NGL Energy Partners LP Announces Third Quarter Results and Filing of Form 10-Q

NGL Energy Partners LP Announces Third Quarter Results and Filing of Form 10-Q

TULSA, Okla.--(BUSINESS WIRE)-- NGL Energy Partners LP (NYS: NGL) today reported net income of $40.5 million and Adjusted EBITDA of $73.2 million for the three months ended December 31, 2012. Net income per limited partner common unit for the quarter was $0.75. General and administrative expenses during the quarter ended December 31, 2012 included $0.8 million of costs related to acquisitions.

NGL's Chief Executive Officer, H. Michael Krimbill, said, "We are pleased to announce Adjusted EBITDA results exceeding prior guidance for the quarter. We completed a number of acquisitions during the quarter that further enhanced our ability to provide customers with a full range of services from wellhead to the end market. Going forward our focus will also include internal growth projects, many of which have been initiated in fiscal 2013 and will contribute to results in fiscal 2014."


During the three months ended December 31, 2012, NGL completed several acquisitions, including:

  • The November 2012 acquisition of certain entities that conduct crude oil purchasing and logistics operations in Texas and New Mexico;

  • The December 2012 acquisition of a barge transportation business;

  • The acquisition of two retail propane businesses; and

  • The acquisition of three water services and crude oil logistics businesses.

For the nine months ended December 31, 2012, NGL reported net income of $25.8 million and Adjusted EBITDA of $93.1 million. Net income per limited partner common unit for the nine months ended December 31, 2012 was $0.53. General and administrative expenses during the nine months ended December 31, 2012 included $5.2 million of costs related to acquisitions.

On January 24, 2013, NGL announced that the Board of Directors of its general partner increased the quarterly cash distribution for the third fiscal quarter ended December 31, 2012, by $.0125 to $0.4625 per outstanding limited partner unit from $0.45 per unit, resulting in an annualized cash distribution of $1.85 per unit. This distribution was paid on February 14, 2013, to unitholders of record entitled to receive the distribution at the close of business on February 4, 2013. This is the fifth consecutive quarter NGL has increased its cash distribution since its initial public offering in May 2011.

NGL also announced that it has filed its quarterly report on Form 10-Q for its fiscal quarter ended December 31, 2012 with the Securities and Exchange Commission. NGL has posted a copy of the Form 10-Q on its website at www.nglenergypartners.com.

A conference call to discuss NGL's results of operations is scheduled for 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on February 15, 2013. Analysts, investors, and other interested parties may access the conference call by dialing (866) 788-0545 and providing access code 55364675. An audio replay of the conference call will be available for 7 days beginning at 12:00 p.m. Eastern Time on February 15, 2013 and can be accessed by dialing (888) 286-8010 and providing access code 86475629.

NGL defines EBITDA as net income (loss) attributable to parent equity, plus income taxes, interest expense and depreciation and amortization expense. NGL defines Adjusted EBITDA as EBITDA excluding the unrealized gain or loss on derivative contracts and the gain or loss on the disposal of assets and share-based compensation expenses. EBITDA and Adjusted EBITDA should not be considered an alternative to net income, income before income taxes, cash flows from operating activities, or any other measure of financial performance calculated in accordance with 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 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 for evaluating its financial performance without regard to its 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. A reconciliation of Adjusted EBITDA to net income (loss) attributable to parent equity is shown below.

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 four primary businesses: water services, crude oil logistics, NGL logistics and retail. NGL completed its initial public offering in May 2011. For further information visit the Partnership's website at www.nglenergypartners.com.

NGL ENERGY PARTNERS LP

Unaudited Condensed Consolidated Balance Sheets

As of December 31, 2012 and March 31, 2012

(U.S. Dollars in Thousands, except unit amounts)

December 31,
2012

March 31,
2012

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

23,903

$

7,832

Accounts receivable - trade, net of allowance for doubtful accounts of $1,962 and $818, respectively

595,274

84,004

Receivables from affiliates

1,334

2,282

Inventories

234,025

94,504

Prepaid expenses and other current assets

58,004

10,002

Total current assets

912,540

198,624

PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $34,072 and $12,843, respectively

520,084

231,394

GOODWILL

510,072

167,245

INTANGIBLE ASSETS, net of accumulated amortization of $29,807 and $8,174, respectively

487,206

149,490

OTHER NONCURRENT ASSETS

7,567

2,766

Total assets

$

2,437,469

$

749,519

LIABILITIES AND PARTNERS' EQUITY

CURRENT LIABILITIES:

Trade accounts payable

$

579,371

$

81,369

Accrued expenses and other payables

74,064

14,143

Advance payments received from customers

59,237

20,293

Payables to affiliates

6,527

9,462

Current maturities of long-term debt

8,635

19,534

Total current liabilities

727,834

144,801

LONG-TERM DEBT, net of current maturities

827,570

199,177

OTHER NONCURRENT LIABILITIES

1,428

212

COMMITMENTS AND CONTINGENCIES

PARTNERS' EQUITY:

General Partner — 0.1% interest; 53,174 and 29,245 notional units outstanding, respectively

(50,752

)

442

Limited Partners — 99.9% interest —

Common units — 47,201,831 and 23,296,253 units outstanding, respectively

912,028

384,604

Subordinated units — 5,919,346 units outstanding at December 31, 2012 and March 31, 2012

13,556

19,824

Accumulated other comprehensive income —

Foreign currency translation

32

31

Noncontrolling interests

5,773

428

Total partners' equity

880,637

405,329

Total liabilities and partners' equity

$

2,437,469

$

749,519

NGL ENERGY PARTNERS LP

Unaudited Condensed Consolidated Statements of Operations

Three Months and Nine Months Ended December 31, 2012 and 2011

(U.S. Dollars in Thousands, except unit and per unit amounts)

Three Months Ended
December 31,

Nine Months Ended
December 31,

2012

2011

2012

2011

REVENUES:

Retail propane

$

127,905

$

62,701

$

244,116

$

94,787

Natural gas liquids logistics

508,131

407,948

1,050,116

776,757

Crude oil logistics

677,985

1,462,523

Water services

22,806

40,557

Other

1,381

2,842

Total Revenues

1,338,208

470,649

2,800,154

871,544

COST OF SALES:

Retail propane

77,449

40,502

144,556

61,825

Natural gas liquids logistics

470,621

399,288

982,949

765,400

Crude oil logistics

654,976

1,425,546

Water services

1,499

4,169

Total Cost of Sales

1,204,545

439,790

2,557,220

827,225

OPERATING COSTS AND EXPENSES:

Operating

50,518

12,653

113,287

27,045

General and administrative

14,175

4,163

34,578

10,363

Depreciation and amortization

18,747

5,402

41,335

8,480

Operating Income (Loss)

50,223

8,641

53,734

(1,569

)

OTHER INCOME (EXPENSE):

Interest income

241

197

870

422

Interest expense

(9,762

)

(2,676

)

(22,254

)

(4,989

)

Loss on early extinguishment of debt

(5,769

)

Other, net

20

86

49

215

Income (Loss) Before Income Taxes

40,722

6,248

26,630

(5,921

)

INCOME TAX PROVISION

(245

)

(158

)

(781

)

(158

)

Net Income (Loss)

40,477

6,090

25,849

(6,079

)

Net (Income) Loss Allocated to General Partner

(942

)

(6

)

(1,731

)

6

Net (Income) Loss Attributable to Noncontrolling Interests

(301

)

(250

)

Net Income (Loss) Attributable to Parent Equity Allocated to Limited Partners

$

39,234

$

6,084

$

23,868

$

(6,073

)

Basic and Diluted Earnings (Loss) per Common Unit

$

0.75

$

0.24

$

0.53

$

(0.41

)

Basic and Diluted Earnings (Loss) per Subordinated Unit

$

0.75

$

0.28

$

0.51

$

(0.20

)

Basic and Diluted Weighted average units outstanding:

Common

46,364,381

18,699,590

39,288,012

12,491,836

Subordinated

5,919,346

5,919,346

5,919,346

4,929,201

OPERATIONAL DATA

The following table summarizes the volume of product sold and wastewater processed for the three months and nine months ended December 31, 2012 and 2011. Gallons sold by our natural gas liquids logistics segment shown in the table below include sales to our retail segment.

Three Months Ended
December 31,

Nine Months Ended
December 31,

Segment

2012

2011

2012

2011

(in thousands)

Retail propane

Propane gallons sold

42,122

24,694

81,449

37,658

Distillate gallons sold