NGL Energy Partners LP (NYSE:NGL) today reported 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 transaction),
compared to Adjusted EBITDA of $27.4 million during the three months
ended June 30, 2013 (exclusive of $0.6 million of advisory and legal
costs related to acquisitions), an increase of 57% year over year. NGL
reported a net loss of $39.9 million for the quarter ended June 30,
2014, compared to a net loss of $17.5 million for the quarter ended June
30, 2013.
NGL’s recent accomplishments include the following:
-
The acquisition of TransMontaigne Inc. for $173.8 million of cash, net
of cash acquired. As part of the acquisition, NGL acquired the general
partner interest and a 19.7% limited partner interest in
TransMontaigne Partners L. P., a publicly-traded partnership that
conducts refined products and crude oil transportation and terminaling
operations.
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Completion of a public offering of 8,767,100 common units for net
proceeds of $370.5 million.
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An amendment to NGL’s revolving credit facility that expanded the
capacity to $2.193 billion; and
-
The issuance of $400 million of senior unsecured notes.
NGL reaffirms its Adjusted EBITDA guidance of $425 million for fiscal
year 2015 and 15% distribution growth for calendar year 2014 with a 10%
distribution growth thereafter.
A conference call to discuss NGL's results of operations is scheduled
for 3:00pm Eastern Time (2:00pm Central Time) on Tuesday, August 12,
2014. Analysts, investors, and other interested parties may access the
conference call by dialing (877) 299-4454 and providing access code
12886562. 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 12, 2014 and can be accessed by dialing (888) 286-8010
and providing access code 38186598.
NGL defines EBITDA as net income (loss) attributable to parent equity,
plus interest expense, income taxes, and depreciation and amortization
expense. NGL defines Adjusted EBITDA as EBITDA excluding the unrealized
gain or loss on derivative contracts, the gain or loss on the disposal
or impairment of assets, and equity-based compensation expense. 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 accounting principles generally accepted in the United
States 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 loss
attributable to parent equity is shown below.
For purposes of NGL’s Adjusted EBITDA calculation, NGL makes a
distinction between unrealized gains and losses on derivatives and
realized 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
is settled, NGL reverses the previously-recorded unrealized gain or loss
and records a realized gain or loss. The realized gain or loss is equal
to the amount received or paid on the contract. NGL acquired Gavilon
Energy in December 2013. NGL is still in the process of developing
procedures to calculate realized and unrealized gains and losses for the
Gavilon Energy operations in the same way NGL calculates them for its
other operations. Accordingly, the net unrealized losses in the Adjusted
EBITDA table below exclude any unrealized gains and losses related to
Gavilon Energy.
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: water solutions, crude oil logistics, NGL logistics, refined
products/renewables and retail propane. NGL completed its initial public
offering in May 2011. For further information visit NGL's website at www.nglenergypartners.com.
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NGL ENERGY PARTNERS LP AND SUBSIDIARIES
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Unaudited Condensed Consolidated Balance Sheets
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(U.S. Dollars in Thousands, except unit amounts)
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June 30,
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March 31,
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2014
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2014
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ASSETS
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CURRENT ASSETS:
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Cash and cash equivalents
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$
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39,679
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$
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10,440
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Accounts receivable - trade, net of allowance for doubtful
accounts of $2,732 and $2,822, respectively
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903,011
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900,904
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Accounts receivable - affiliates
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1,110
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7,445
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Inventories
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373,633
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310,160
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Prepaid expenses and other current assets
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58,613
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80,350
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Total current assets
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1,376,046
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1,309,299
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PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of
$127,628 and $109,564, respectively
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863,457
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829,346
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GOODWILL
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1,101,471
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1,107,006
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INTANGIBLE ASSETS, net of accumulated amortization of $140,677 and
$116,728, respectively
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699,315
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714,956
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INVESTMENTS IN UNCONSOLIDATED ENTITIES
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211,480
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189,821
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OTHER NONCURRENT ASSETS
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13,733
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16,795
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Total assets
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$
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4,265,502
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$
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4,167,223
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LIABILITIES AND EQUITY
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CURRENT LIABILITIES:
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Accounts payable - trade
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$
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810,149
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$
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740,211
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Accounts payable - affiliates
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37,706
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76,846
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Accrued expenses and other payables
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123,939
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141,690
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Advance payments received from customers
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56,373
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29,965
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Current maturities of long-term debt
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6,168
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7,080
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Total current liabilities
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1,034,335
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995,792
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LONG-TERM DEBT, net of current maturities
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1,441,875
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1,629,834
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OTHER NONCURRENT LIABILITIES
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8,000
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9,744
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COMMITMENTS AND CONTINGENCIES
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EQUITY:
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General partner, representing a 0.1% interest, 87,435 and 79,420
notional units at June 30, 2014 and March 31, 2014, respectively
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(41,308
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)
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(45,287
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)
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Limited partners, representing a 99.9% interest -
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Common units, 81,427,921 and 73,421,309 units issued and
outstanding at June 30, 2014 and March 31, 2014, respectively
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1,822,572
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1,570,074
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Subordinated units, 5,919,346 units issued and outstanding at June
30, 2014 and March 31, 2014
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(5,248
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)
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2,028
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Accumulated other comprehensive loss
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(51
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(236
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Noncontrolling interests
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5,327
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5,274
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Total equity
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1,781,292
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1,531,853
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Total liabilities and equity
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$
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4,265,502
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$
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4,167,223
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NGL ENERGY PARTNERS LP AND SUBSIDIARIES
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Unaudited Condensed Consolidated Statements of Operations
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(U.S. Dollars in Thousands, except unit and per unit amounts)
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Three Months Ended June 30,
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2014
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2013
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REVENUES:
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Crude oil logistics
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$
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1,929,283
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$
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930,794
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Water solutions
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47,314
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20,513
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Liquids
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475,157
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360,959
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Retail propane
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77,902
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72,217
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Refined products
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986,223
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-
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Renewables
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131,274
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-
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Other
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1,461
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1,474
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Total Revenues
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3,648,614
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1,385,957
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COST OF SALES:
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Crude oil logistics
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1,897,639
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909,219
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Water solutions
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10,573
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583
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Liquids
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462,016
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350,251
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Retail propane
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47,524
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43,023
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Refined products
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983,012
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-
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Renewables
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131,301
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-
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Other
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1,988
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-
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Total Cost of Sales
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3,534,053
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1,303,076
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OPERATING COSTS AND EXPENSES:
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Operating
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67,868
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49,045
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General and administrative
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27,873
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18,454
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Depreciation and amortization
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39,375
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22,724
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Operating Loss
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(20,555
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(7,342
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OTHER INCOME (EXPENSE):
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Earnings of unconsolidated entities
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2,565
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-
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Interest expense
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(20,494
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(10,622
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Other, net
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(391
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)
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50
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Loss Before Income Taxes
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(38,875
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)
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(17,914
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INCOME TAX (PROVISION) BENEFIT
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(1,035
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406
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Net Loss
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(39,910
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)
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(17,508
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NET INCOME ALLOCATED TO GENERAL PARTNER
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(9,381
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)
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(1,688
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)
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NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
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(65
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)
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(125
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)
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NET LOSS ALLOCATED TO LIMITED PARTNERS
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$
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(49,356
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)
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$
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(19,321
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)
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BASIC AND DILUTED LOSS PER COMMON UNIT
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$
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(0.61
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)
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$
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(0.35
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)
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BASIC AND DILUTED LOSS PER SUBORDINATED UNIT
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$
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(0.68
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)
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$
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(0.46
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)
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BASIC AND DILUTED WEIGHTED AVERAGE UNITS OUTSTANDING:
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Common units
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74,126,205
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47,703,313
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Subordinated units
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5,919,346
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5,919,346
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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:
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Three Months Ended June 30,
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2014
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2013
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(in thousands)
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Net loss attributable to parent equity
|
|
|
$
|
(39,975
|
)
|
|
|
$
|
(17,633
|
)
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Income tax provision (benefit)
|
|
|
|
1,035
|
|
|
|
|
(406
|
)
|
Interest expense
|
|
|
|
20,517
|
|
|
|
|
10,622
|
|
Depreciation and amortization
|
|
|
|
44,350
|
|
|
|
|
23,195
|
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EBITDA
|
|
|
$
|
25,927
|
|
|
|
$
|
15,778
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Net unrealized losses on derivative contracts
|
|
|
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5,010
|
|
|
|
|
3,578
|
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Loss on disposal or impairment of assets
|
|
|
|
458
|
|
|
|
|
373
|
|
Equity-based compensation expense
|
|
|
|
7,914
|
|
|
|
|
7,075
|
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Adjusted EBITDA
|
|
|
$
|
39,309
|
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|
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$
|
26,804
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