Attached files
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| 8-K - 8-K - NGL Energy Partners LP | a15-16776_28k.htm |
Exhibit 99.1
NGL Energy Partners LP Announces First Quarter 2016 Results
TULSA, Okla.—(BUSINESS WIRE)—August 10, 2015—NGL Energy Partners LP (NYSE:NGL) today reported Adjusted EBITDA of $89.0 million for the three months ended June 30, 2015 (exclusive of $0.1 million of advisory and legal costs related to acquisitions) compared to Adjusted EBITDA of $43.1 million for the three months ended June 30, 2014 (exclusive of $1.1 million of advisory and legal costs related to acquisitions and $2.7 million of compensation costs related to the Gavilon acquisition). This represents an increase of 106% year over year. NGL reported a net loss of $38.5 million for the three months ended June 30, 2015, compared to a net loss of $39.9 million for the three months ended June 30, 2014.
“We are very pleased with NGL’s performance, delivering another solid quarter of improved Adjusted EBITDA while continuing to increase our distribution per common unit. We are very excited about our slate of internal growth projects, which will allow us to continue to deliver on our commitment to growth. In addition, we are pursuing certain acquisitions and joint venture opportunities,” said Mike Krimbill, CEO of NGL Energy Partners.
A conference call to discuss NGL’s results of operations is scheduled for 3:00pm Eastern Time (2:00pm Central Time) on Monday, August 10, 2015. Analysts, investors, and other interested parties may access the conference call by dialing (866) 318-8615 and providing access code 52208297. An archived audio replay of the conference call will be available for 7 days beginning at 7:00pm Eastern Time (6:00pm Central Time) on August 10, 2015 and can be accessed by dialing (888) 286-8010 and providing access code 40590712.
NGL defines EBITDA as net income (loss) attributable to parent equity, plus interest expense, income tax provision (benefit), and depreciation and amortization expense. NGL defines Adjusted EBITDA as EBITDA excluding net unrealized gains and losses on derivatives, lower of cost or market adjustments, gain (loss) on disposal or impairment of assets, net, and equity-based compensation expense. NGL also includes in Adjusted EBITDA certain inventory valuation adjustments related to its refined products and renewables segment, as described below. EBITDA and Adjusted EBITDA should not be considered alternatives to net income, income before income taxes, cash flows from operating activities, or any other measure of financial performance calculated in accordance with accounting principles generally accepted in the United States (“GAAP”) as those items are used to measure operating performance, liquidity or the ability to service debt obligations. NGL believes that EBITDA provides additional information to investors for evaluating its ability to make quarterly distributions to its unitholders and is presented solely as a supplemental measure. NGL believes that Adjusted EBITDA provides additional information to investors for evaluating NGL’s financial performance without regard to financing methods, capital structure and historical cost basis. Further, EBITDA and Adjusted EBITDA, as NGL defines them, may not be comparable to EBITDA and Adjusted EBITDA or similarly titled measures used by other entities.
Other than for its refined products and renewables segment, for purposes of its Adjusted EBITDA calculation, NGL makes a distinction between realized and unrealized gains and losses on derivatives. During the period when a derivative contract is open, NGL records changes in the fair value of the derivative as an unrealized gain or loss. When a derivative contract matures or is settled, NGL reverses the previously recorded unrealized gain or loss and records a realized gain or loss. NGL does not draw such a distinction between realized and unrealized gains and losses on derivatives of its refined products and renewables segment. The primary hedging strategy of NGL’s refined products and renewables segment is to hedge against the risk of declines in the value of inventory over the course of the contract
cycle, and many of the hedges are six months to one year in duration at inception. The “inventory valuation adjustment” row in the table below reflects the excess of the market value of the inventory of the refined products and renewables segment at the balance sheet date over its cost. NGL adds this to Adjusted EBITDA because the gains and losses associated with derivative contracts of this segment, which are intended primarily to hedge inventory holding risk, also impact Adjusted EBITDA.
This press release includes “forward-looking statements.” All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Actual results could vary significantly from those expressed or implied in such statements and are subject to a number of risks and uncertainties. While NGL believes its expectations as reflected in the forward-looking statements are reasonable, NGL can give no assurance that such expectations will prove to be correct. The forward-looking statements involve risks and uncertainties that affect operations, financial performance, and other factors as discussed in filings with the Securities and Exchange Commission. Other factors that could impact any forward-looking statements are those risks described in NGL’s annual report on Form 10-K, quarterly reports on Form 10-Q, and other public filings. You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading “Risk Factors.” NGL undertakes no obligation to publicly update or revise any forward-looking statements except as required by law.
About NGL Energy Partners LP
NGL Energy Partners LP is a Delaware limited partnership. NGL owns and operates a vertically integrated energy business with five primary businesses: crude oil logistics, water solutions, liquids, retail propane, and refined products and renewables. For further information, visit the Partnership’s website at www.nglenergypartners.com.
NGL ENERGY PARTNERS LP AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
(U.S. Dollars in Thousands, except unit amounts)
|
|
|
June 30, |
|
March 31, |
| ||
|
|
|
2015 |
|
2015 |
| ||
|
ASSETS |
|
|
|
|
| ||
|
CURRENT ASSETS: |
|
|
|
|
| ||
|
Cash and cash equivalents |
|
$ |
43,506 |
|
$ |
41,303 |
|
|
Accounts receivable—trade, net of allowance for doubtful accounts of $4,827 and $4,367, respectively |
|
905,196 |
|
1,024,226 |
| ||
|
Accounts receivable—affiliates |
|
18,740 |
|
17,198 |
| ||
|
Inventories |
|
489,064 |
|
441,762 |
| ||
|
Prepaid expenses and other current assets |
|
130,889 |
|
120,855 |
| ||
|
Total current assets |
|
1,587,395 |
|
1,645,344 |
| ||
|
|
|
|
|
|
| ||
|
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $236,863 and $202,959, respectively |
|
1,743,584 |
|
1,617,389 |
| ||
|
GOODWILL |
|
1,451,654 |
|
1,402,761 |
| ||
|
INTANGIBLE ASSETS, net of accumulated amortization of $248,497 and $220,517, respectively |
|
1,251,478 |
|
1,288,343 |
| ||
|
INVESTMENTS IN UNCONSOLIDATED ENTITIES |
|
474,221 |
|
472,673 |
| ||
|
LOAN RECEIVABLE—AFFILIATE |
|
23,775 |
|
8,154 |
| ||
|
OTHER NONCURRENT ASSETS |
|
110,544 |
|
112,837 |
| ||
|
Total assets |
|
$ |
6,642,651 |
|
$ |
6,547,501 |
|
|
|
|
|
|
|
| ||
|
LIABILITIES AND EQUITY |
|
|
|
|
| ||
|
CURRENT LIABILITIES: |
|
|
|
|
| ||
|
Accounts payable—trade |
|
$ |
755,062 |
|
$ |
833,380 |
|
|
Accounts payable—affiliates |
|
25,592 |
|
25,794 |
| ||
|
Accrued expenses and other payables |
|
237,407 |
|
195,116 |
| ||
|
Advance payments received from customers |
|
66,706 |
|
54,234 |
| ||
|
Current maturities of long-term debt |
|
3,933 |
|
4,472 |
| ||
|
Total current liabilities |
|
1,088,700 |
|
1,112,996 |
| ||
|
|
|
|
|
|
| ||
|
LONG-TERM DEBT, net of current maturities |
|
2,968,069 |
|
2,745,299 |
| ||
|
OTHER NONCURRENT LIABILITIES |
|
17,082 |
|
16,086 |
| ||
|
|
|
|
|
|
| ||
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
EQUITY: |
|
|
|
|
| ||
|
General partner, representing a 0.1% interest, 104,286 and 103,899 notional units at June 30, 2015 and March 31, 2015, respectively |
|
(35,097 |
) |
(37,021 |
) | ||
|
Limited partners, representing a 99.9% interest, 104,181,253 and 103,794,870 common units issued and outstanding at June 30, 2015 and March 31, 2015, respectively |
|
2,056,852 |
|
2,162,924 |
| ||
|
Accumulated other comprehensive loss |
|
(117 |
) |
(109 |
) | ||
|
Noncontrolling interests |
|
547,162 |
|
547,326 |
| ||
|
Total equity |
|
2,568,800 |
|
2,673,120 |
| ||
|
Total liabilities and equity |
|
$ |
6,642,651 |
|
$ |
6,547,501 |
|
NGL ENERGY PARTNERS LP AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(U.S. Dollars in Thousands, except unit and per unit amounts)
|
|
|
Three Months Ended June 30, |
| ||||
|
|
|
2015 |
|
2014 |
| ||
|
REVENUES: |
|
|
|
|
| ||
|
Crude oil logistics |
|
$ |
1,327,784 |
|
$ |
1,929,283 |
|
|
Water solutions |
|
54,293 |
|
47,314 |
| ||
|
Liquids |
|
248,985 |
|
475,157 |
| ||
|
Retail propane |
|
64,447 |
|
77,902 |
| ||
|
Refined products and renewables |
|
1,842,960 |
|
1,117,497 |
| ||
|
Other |
|
— |
|
1,461 |
| ||
|
Total Revenues |
|
3,538,469 |
|
3,648,614 |
| ||
|
|
|
|
|
|
| ||
|
COST OF SALES: |
|
|
|
|
| ||
|
Crude oil logistics |
|
1,291,992 |
|
1,897,639 |
| ||
|
Water solutions |
|
3,607 |
|
10,573 |
| ||
|
Liquids |
|
232,276 |
|
462,016 |
| ||
|
Retail propane |
|
29,564 |
|
47,524 |
| ||
|
Refined products and renewables |
|
1,765,112 |
|
1,114,313 |
| ||
|
Other |
|
— |
|
1,988 |
| ||
|
Total Cost of Sales |
|
3,322,551 |
|
3,534,053 |
| ||
|
|
|
|
|
|
| ||
|
OPERATING COSTS AND EXPENSES: |
|
|
|
|
| ||
|
Operating |
|
107,914 |
|
67,436 |
| ||
|
General and administrative |
|
62,481 |
|
27,873 |
| ||
|
Depreciation and amortization |
|
59,831 |
|
39,375 |
| ||
|
Loss on disposal or impairment of assets, net |
|
421 |
|
432 |
| ||
|
Operating Loss |
|
(14,729 |
) |
(20,555 |
) | ||
|
|
|
|
|
|
| ||
|
OTHER INCOME (EXPENSE): |
|
|
|
|
| ||
|
Equity in earnings of unconsolidated entities |
|
8,718 |
|
2,565 |
| ||
|
Interest expense |
|
(30,802 |
) |
(20,494 |
) | ||
|
Other expense, net |
|
(1,175 |
) |
(391 |
) | ||
|
Loss Before Income Taxes |
|
(37,988 |
) |
(38,875 |
) | ||
|
|
|
|
|
|
| ||
|
INCOME TAX PROVISION |
|
(538 |
) |
(1,035 |
) | ||
|
|
|
|
|
|
| ||
|
Net Loss |
|
(38,526 |
) |
(39,910 |
) | ||
|
|
|
|
|
|
| ||
|
LESS: NET INCOME ALLOCATED TO GENERAL PARTNER |
|
(15,359 |
) |
(9,381 |
) | ||
|
|
|
|
|
|
| ||
|
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
|
(3,875 |
) |
(65 |
) | ||
|
|
|
|
|
|
| ||
|
NET LOSS ALLOCATED TO LIMITED PARTNERS |
|
$ |
(57,760 |
) |
$ |
(49,356 |
) |
|
|
|
|
|
|
| ||
|
BASIC AND DILUTED LOSS PER COMMON UNIT |
|
$ |
(0.56 |
) |
$ |
(0.61 |
) |
|
|
|
|
|
|
| ||
|
BASIC AND DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING |
|
103,888,281 |
|
74,126,205 |
| ||
ADJUSTED EBITDA RECONCILIATION
The following table reconciles net loss attributable to parent equity to our EBITDA and Adjusted EBITDA, each of which are non-GAAP financial measures:
|
|
|
Three Months Ended June 30, |
| ||||
|
|
|
2015 |
|
2014 |
| ||
|
|
|
(in thousands) |
| ||||
|
Net loss attributable to parent equity |
|
$ |
(42,401 |
) |
$ |
(39,975 |
) |
|
Interest expense |
|
28,648 |
|
20,517 |
| ||
|
Income tax provision |
|
521 |
|
1,035 |
| ||
|
Depreciation and amortization |
|
54,168 |
|
44,350 |
| ||
|
EBITDA |
|
40,936 |
|
25,927 |
| ||
|
Net unrealized losses on derivatives |
|
3,540 |
|
5,010 |
| ||
|
Inventory valuation adjustment |
|
10,158 |
|
— |
| ||
|
Lower of cost or market adjustments |
|
(6,340 |
) |
— |
| ||
|
Loss on disposal or impairment of assets, net |
|
419 |
|
458 |
| ||
|
Equity-based compensation expense |
|
40,232 |
|
7,914 |
| ||
|
Adjusted EBITDA |
|
$ |
88,945 |
|
$ |
39,309 |
|
The following table reconciles depreciation and amortization amounts per the EBITDA table above to depreciation and amortization as reported in our condensed consolidated statements of operations:
|
|
|
Three Months Ended |
| ||||
|
|
|
June 30, |
| ||||
|
|
|
2015 |
|
2014 |
| ||
|
|
|
(in thousands) |
| ||||
|
Depreciation and amortization per EBITDA table |
|
$ |
54,168 |
|
$ |
44,350 |
|
|
Intangible asset amortization recorded to cost of sales |
|
(1,701 |
) |
(2,137 |
) | ||
|
Depreciation and amortization of unconsolidated entities |
|
(5,034 |
) |
(2,945 |
) | ||
|
Depreciation and amortization attributable to noncontrolling interests |
|
12,398 |
|
107 |
| ||
|
Depreciation and amortization per condensed consolidated statements of operations |
|
$ |
59,831 |
|
$ |
39,375 |
|
SOURCE: NGL Energy Partners LP
NGL Energy Partners LP
Atanas H. Atanasov, 918-481-1119
Chief Financial Officer and Treasurer
atanas.atanasov@nglep.com