NGL Energy Partners LP - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - July 10, 2018

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EX-99.1 - EXHIBIT 99.1 - NGL Energy Partners LPexhibit991-pressreleasesal.htm
EX-10.1 - EXHIBIT 10.1 - NGL Energy Partners LPexhibit101-amendmentno6tot.htm
EX-2.1 - EXHIBIT 2.1 - NGL Energy Partners LPexhibit21-membershipintere.htm
8-K - 8-K - NGL Energy Partners LPform8-kcompletionofthesale.htm


NGL ENERGY PARTNERS LP AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANICAL STATEMENT

Introduction

On March 30, 2018, the Partnership sold a portion of its Retail Propane business to DCC LPG ("DCC") for net proceeds of $212.4 million. On July 10, 2018, NGL Energy Partners LP (the "Partnership") completed the sale of its remaining Retail Propane business to Superior Plus Corp. ("Superior") for $900 million in cash proceeds, adjusted for working capital.

The following sets forth the unaudited pro forma condensed consolidated balance sheet of the Partnership as of March 31, 2018 and the unaudited pro forma condensed consolidated statements of operations for the years ended March 31, 2018, 2017 and 2016. In addition, these pro forma financial statements reflect the repayment of our revolving line of credit as of March 31, 2018 and a pro forma reduction in interest expense for the year ended March 31, 2018. The unaudited pro forma condensed consolidated balance sheet gives pro forma effect only for the sale to Superior as if it had occurred on March 31, 2018, as the transaction with DCC has already been reflected in the Partnership's balance sheet as of such date. The unaudited pro forma condensed consolidated statements of operations give pro forma effect to both the sale to Superior and the sale to DCC as if the two transactions had occurred on April 1, 2015.

These unaudited pro forma condensed consolidated financial statements have been derived from our historical consolidated financial statements, which are included in our Annual Report on Form 10-K for the year ended March 31, 2018. These unaudited condensed consolidated financial statements should be read in conjunction with our historical financial statements and related notes thereto.

The following unaudited pro forma condensed consolidated financial statements are based on certain assumptions and do not purport to be indicative of the results that actually would have been achieved if the transactions described above had occurred on the dates indicated. Moreover, the accompanying unaudited pro forma condensed consolidated financial statements do not project the Partnership's results of operations for any future date or period.





NGL ENERGY PARTNERS LP AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of March 31, 2018
(U.S. Dollars in Thousands)

 
Historical NGL Energy Partners LP (As Reported)
 
Pro Forma Adjustments
 
Pro Forma NGL Energy Partners LP Continuing Operations
ASSETS
 
 
 
 
 
CURRENT ASSETS:
 
 
 
 
 
Cash and cash equivalents
$
26,207

 
$
(4,113
)
(A)
$
22,094

 
 
 
900,000

(B)
 
 
 
 
(5,000
)
(B)
 
 
 
 
(895,000
)
(C)
 
Accounts receivable-trade, net
1,072,688

 
(45,924
)
(A)
1,026,764

Accounts receivable-affiliates
4,772

 
(6
)
(A)
4,766

Inventories
564,553

 
(13,250
)
(A)
551,303

Prepaid expenses and other current assets
131,538

 
(2,796
)
(A)
128,742

Total current assets
1,799,758

 
(66,089
)
 
1,733,669

PROPERTY, PLANT AND EQUIPMENT, net
1,719,947

 
(201,341
)
(A)
1,518,606

GOODWILL
1,312,558

 
(107,949
)
(A)
1,204,609

INTANGIBLE ASSETS, net
1,054,482

 
(141,328
)
(A)
913,154

INVESTMENTS IN UNCONSOLIDATED ENTITIES
17,236

 
—

 
17,236

LOAN RECEIVABLE-AFFILIATE
1,200

 
—

 
1,200

OTHER NONCURRENT ASSETS
245,941

 
(903
)
(A)
245,038

Total assets
$
6,151,122

 
$
(517,610
)
 
$
5,633,512

LIABILITIES AND EQUITY
 
 
 
 
 
CURRENT LIABILITIES:
 
 
 
 
 
Accounts payable-trade
$
860,629

 
$
(7,790
)
(A)
852,839

Accounts payable-affiliates
1,254

 
—

 
1,254

Accrued expenses and other payables
230,087

 
(6,582
)
(A)
223,505

Advance payments received from customers
21,216

 
(12,842
)
(A)
8,374

Current maturities of long-term debt
3,196

 
(2,550
)
(A)
646

Total current liabilities
1,116,382

 
(29,764
)
 
1,086,618

LONG-TERM DEBT, net of debt issuance costs
2,682,628

 
(2,887
)
(A)
1,797,571

 
 
 
(895,000
)
(C)
 
 
 
 
12,830

(E)
 
OTHER NONCURRENT LIABILITIES
173,514

 
—

 
173,514

COMMITMENTS AND CONTINGENCIES
 
 
 
 
 
 
 
 
 
 
 
CLASS A 10.75% CONVERTIBLE PREFERRED UNITS
82,576

 
—

 
82,576

REDEEMABLE NONCONTROLLING INTEREST
9,927

 
(12,830
)
(E)
—

 
 
 
2,903

(E)
 
 
 
 
 
 
 
EQUITY:
 
 
 
 
 
General partner, representing a 0.1% interest
(50,819
)
 
—

 
(50,819
)
Limited partners, representing a 99.9% interest
1,852,495

 
410,041

(D)
2,259,633

 
 
 
(2,903
)
(E)
 
Class B preferred limited partners
202,731

 
—

 
202,731

Accumulated other comprehensive loss
(1,815
)
 
—

 
(1,815
)
Noncontrolling interests
83,503

 
—

 
83,503

Total equity
2,086,095

 
407,138

 
2,493,233

Total liabilities and equity
$
6,151,122

 
$
(517,610
)
 
$
5,633,512


See accompanying notes to the unaudited pro forma condensed consolidated financial statements.




NGL ENERGY PARTNERS LP AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the year ended March 31, 2018
(U.S. dollars in thousands, except unit and per unit amounts)
 
Historical NGL Energy Partners LP (As Reported)
 
Pro Forma Adjustments
 
Pro Forma NGL Energy Partners LP Continuing Operations
 
 
 
 
 
 
REVENUES
$
17,282,718

 
$
(521,511
)
(H)
$
16,761,207

 
 
 
 
 
 
COST OF SALES
16,536,038

 
(269,367
)
(H)
16,266,671

 
 
 
 
 
 
OPERATING COSTS AND EXPENSES:
 
 
 
 
 
Operating
330,857

 
(129,788
)
(H)
201,069

General and administrative
109,451

 
(11,321
)
(H)
98,130

Depreciation and amortization
252,712

 
(43,692
)
(H)
209,020

(Gain) loss on disposal or impairment of assets, net
(105,313
)
 
88,209

(H)
(17,104
)
Revaluation of liabilities
20,716

 
—

 
20,716

Operating Income (Loss)
138,257

 
(155,552
)
 
(17,295
)
 
 
 
 
 
 
OTHER INCOME (EXPENSE):
 
 
 
 
 
Equity in earnings of unconsolidated entities
7,964

 
—

 
7,964

Interest income (expense)
(199,570
)
 
(133
)
(H)
(159,059
)
 
 
 
40,644

(F)
 
Gain (loss) on early extinguishment of liabilities, net
(23,201
)
 
—

 
(23,201
)
Other income, net
8,403

 
—

 
8,403

Income (Loss) From Continuing Operations Before Income Taxes
(68,147
)
 
(115,041
)
 
(183,188
)
 
 
 
 
 
 
INCOME TAX (EXPENSE) BENEFIT
(1,458
)
 
104

(H)
(1,354
)
Net Loss From Continuing Operations
(69,605
)
 
(114,937
)
 
(184,542
)
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
(240
)
 
—

 
(240
)
LESS: NET INCOME ATTRIBUTABLE TO REDEEMABLE NONCONTROLLING INTERESTS
(1,030
)
 
1,030

(H)
—

NET LOSS ATTRIBUTABLE TO NGL ENERGY PARTNERS LP
(70,875
)
 
(113,907
)
 
(184,782
)
LESS: DISTRIBUTIONS TO PREFERRED UNITHOLDERS
(59,697
)
 
—

 
(59,697
)
LESS: NET INCOME ALLOCATED TO GENERAL PARTNER
(5
)
 
114

(G)
109

LESS: REPURCHASE OF WARRANTS
(349
)
 
—

 
(349
)
NET LOSS ALLOCATED TO COMMON UNITHOLDERS
$
(130,926
)
 
$
(113,793
)
 
$
(244,719
)
BASIC AND DILUTED LOSS PER COMMON UNIT
$
(1.08
)
 
 
 
$
(2.02
)
BASIC AND DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING
120,991,340

 
 
 
120,991,340


See accompanying notes to the unaudited pro forma condensed consolidated financial statements.





NGL ENERGY PARTNERS LP AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the year ended March 31, 2017
(U.S. dollars in thousands, except unit and per unit amounts)
 
Historical NGL Energy Partners LP (As Reported)
 
Pro Forma Adjustments
 
Pro Forma NGL Energy Partners LP Continuing Operations
 
 
 
 
 
 
REVENUES
$
13,022,228

 
$
(413,207
)
(H)
$
12,609,021

 
 
 
 
 
 
COST OF SALES
12,321,909

 
(191,588
)
(H)
12,130,321

 
 
 
 
 
 
OPERATING COSTS AND EXPENSES:
 
 
 
 
 
Operating
307,925

 
(118,922
)
(H)
189,003

General and administrative
116,566

 
(10,761
)
(H)
105,805

Depreciation and amortization
223,205

 
(42,966
)
(H)
180,239

(Gain) loss on disposal or impairment of assets, net
(209,177
)
 
287

(H)
(208,890
)
Revaluation of liabilities
6,717

 
—

 
6,717

Operating Income
255,083

 
(49,257
)
 
205,826

 
 
 
 
 
 
OTHER INCOME (EXPENSE):
 
 
 
 
 
Equity in earnings of unconsolidated entities
3,084

 
—

 
3,084

Revaluation of investments
(14,365
)
 
—

 
(14,365
)
Interest income (expense)
(150,478
)
 
(21
)
(H)
(150,499
)
Gain (loss) on early extinguishment of liabilities, net
24,727

 
—

 
24,727

Other income, net
27,762

 
—

 
27,762

Income From Continuing Operations Before Income Taxes
145,813

 
(49,278
)
 
96,535

 
 
 
 
 
 
INCOME TAX (EXPENSE) BENEFIT
(1,939
)
 
6

(H)
(1,933
)
Net Income From Continuing Operations
143,874

 
(49,272
)
 
94,602

LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
(6,832
)
 
535

(H)
(6,297
)
NET INCOME ATTRIBUTABLE TO NGL ENERGY PARTNERS LP
137,042

 
(48,737
)
 
88,305

LESS: DISTRIBUTIONS TO PREFERRED UNITHOLDERS
(30,142
)
 
—

 
(30,142
)
LESS: NET INCOME ALLOCATED TO GENERAL PARTNER
(232
)
 
48

(G)
(184
)
NET INCOME ALLOCATED TO COMMON UNITHOLDERS
$
106,668

 
$
(48,689
)
 
$
57,979

BASIC INCOME PER COMMON UNIT
$
0.99

 
 
 
$
0.54

DILUTED INCOME PER COMMON UNIT
$
0.95

 
 
 
$
0.52

BASIC WEIGHTED AVERAGE COMMON UNITS OUTSTANDING
108,091,486

 
 
 
108,091,486

DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING
111,850,621

 
 
 
111,850,621


See accompanying notes to the unaudited pro forma condensed consolidated financial statements.





NGL ENERGY PARTNERS LP AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the year ended March 31, 2016
(U.S. dollars in thousands, except unit and per unit amounts)
 
Historical NGL Energy Partners LP (As Reported)
 
Pro Forma Adjustments
 
Pro Forma NGL Energy Partners LP Continuing Operations
 
 
 
 
 
 
REVENUES
$
11,742,110

 
$
(352,977
)
(H)
$
11,389,133

 
 
 
 
 
 
COST OF SALES
10,839,037

 
(156,757
)
(H)
10,682,280

 
 
 
 
 
 
OPERATING COSTS AND EXPENSES:
 
 
 
 
 
Operating
401,118

 
(106,898
)
(H)
294,220

General and administrative
139,541

 
(9,373
)
(H)
130,168

Depreciation and amortization
228,924

 
(32,992
)
(H)
195,932

(Gain) loss on disposal or impairment of assets, net
320,766

 
137

(H)
320,903

Revaluation of liabilities
(82,673
)
 
—

 
(82,673
)
Operating Loss
(104,603
)
 
(47,094
)
 
(151,697
)
 
 
 
 
 
 
OTHER INCOME (EXPENSE):
 
 
 
 
 
Equity in earnings of unconsolidated entities
16,121

 
—

 
16,121

Interest income (expense)
(133,089
)
 
(450
)
(H)
(133,539
)
Gain (loss) on early extinguishment of liabilities, net
28,532

 
—

 
28,532

Other income, net
5,575

 
—

 
5,575

Income (Loss) From Continuing Operations Before Income Taxes
(187,464
)
 
(47,544
)
 
(235,008
)
 
 
 
 
 
 
INCOME TAX (EXPENSE) BENEFIT
367

 
61

(H)
428

Net Income (Loss) From Continuing Operations
(187,097
)
 
(47,483
)
 
(234,580
)
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
(11,832
)
 
630

(H)
(11,202
)
NET INCOME (LOSS) ATTRIBUTABLE TO NGL ENERGY PARTNERS LP
(198,929
)
 
(46,853
)
 
(245,782
)
LESS: NET INCOME ALLOCATED TO GENERAL PARTNER
(47,620
)
 
47

(G)
(47,573
)
NET INCOME (LOSS) ALLOCATED TO COMMON UNITHOLDERS
$
(246,549
)
 
$
(46,806
)
 
$
(293,355
)
BASIC AND DILUTED INCOME (LOSS) PER COMMON UNIT
$
(2.35
)
 
 
 
$
(2.80
)
BASIC AND DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING
104,838,886

 
 
 
104,838,886


See accompanying notes to the unaudited pro forma condensed consolidated financial statements.





NGL ENERGY PARTNERS LP AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements

Note 1 - Basis of Presentation

See "Introduction" for more information regarding the basis of presentation for our unaudited pro forma condensed consolidated financial statements.

Note 2 - Pro Forma Adjustments

Our unaudited pro forma condensed consolidated financial statements reflect the impact of the following pro forma adjustments:

A.
Represents the removal of assets and liabilities of the discontinued operations from the balance sheet.
B.
Represents the net cash proceeds received from Superior at closing from the sale of our Retail Propane business for total consideration of $900 million less estimated expenses of approximately $5 million.
C.
The Partnership's use of net proceeds from the consideration received from Superior to repay a portion of the outstanding debt under the revolving credit facility as of March 31, 2018, which bears interest primarily based on a LIBOR rate plus the applicable margin.
D.
Represents the non-recurring pro forma gain on sale that would have been recorded if we had completed the sale of the Retail Propane business on March 31, 2018.
E.
As condition to closing on the sale of the Retail Propane business to Superior, the Partnership contemporaneously acquired the remaining 40% membership interest in Atlantic Propane and transfered all its membership interests in Atlantic Propane to Superior upon closing.
F.
The reduction of interest expense from the net repayment of outstanding borrowings under the revolving credit facility as a result of the sale of the Retail Propane business. As the pro forma statement of operations assumes that the transaction closed on April 1, 2015, the Partnership calculated the reduction by using $814.5 million, the outstanding balance under its revolving credit facility as of March 31, 2017 and an assumed interest rate of 4.99%, the interest rate on the Partnership's revolving credit facility as of March 31, 2018. A change of 0.125% in the assumed interest rate would result in an adjustment of interest expense of approximately $1 million.
G.
Represents our general partner's interest in the pro forma adjustment.
H.
Amounts reflect the pro forma effect of eliminating the results of operations of our Retail Propane business for the years ended March 31, 2018, 2017 and 2016 from the presentation of continuing operations in the unaudited pro forma consolidated statements of operations.

Note 3 - Earnings per Unit

Basic earnings per unit is computed by dividing the net income (loss) by the weighted average number of units outstanding during a period. To determine net income (loss) allocated to each class of ownership, the Partnership first allocates net income (loss) in accordance with the amount of distributions made for the quarter by each class, if any. The remaining net income is allocated to each class in proportion to the class weighted average number of units outstanding for a period, as compared to the weighted average number of units for all classes for the period, with the exception of net losses. Net losses are allocated only to the common units.



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