NGL Energy Partners LP Announces Fourth Quarter and Full Year Fiscal 2022 Financial Results; Guidance for Fiscal 2023

Rhea-AI Summary

NGL Energy Partners LP (NYSE:NGL) reported a loss of $29.4 million for Q4 fiscal 2022 and $184.1 million for the full year. However, produced water processing volumes surged by 37.7%, reaching approximately 1.93 million barrels per day. The company achieved $342 million in Adjusted EBITDA, a 42% increase year-over-year, and anticipates over $400 million in Adjusted EBITDA for fiscal 2023, up from a prior estimate of $385 million. NGL's strong operational performance positions it for expected total Adjusted EBITDA of at least $600 million for fiscal 2023, with capital expenditures projected at $100 million.

Positive

• Achieved 42% year-over-year increase in Water Solutions Adjusted EBITDA, totaling $342 million.
• Anticipates over $400 million Adjusted EBITDA in Water Solutions for fiscal 2023, an increase from prior guidance of $385 million.
• Processed produced water volumes increased by 37.7% to approximately 1.93 million barrels per day.

Negative

• Reported a significant loss from continuing operations of $29.4 million in Q4 and $184.1 million for the full fiscal year.
• Experiencing a decline in Liquids Logistics operating income by $8.8 million due to lower product margins on propane.

TULSA, Okla.--(BUSINESS WIRE)-- NGL Energy Partners LP (NYSE:NGL) (“NGL,” “our,” “we,” or the “Partnership”) today reported its fourth quarter and full year fiscal 2022 results. The Partnership reported a loss from continuing operations of $29.4 million for the quarter ended March 31, 2022 and $184.1 million for its full fiscal year 2022.

Highlights for the quarter and fiscal year ended March 31, 2022 include:

• Produced water volumes processed of approximately 1.93 million barrels per day during the quarter ended March 31, 2022, growing 37.7% from the same period in the prior year and 4.7% versus the preceding fiscal quarter
• Water Solutions Adjusted EBITDA¹ of $342 million, an increase of $100.5 million, or 42%, year-over-year
• Adjusted EBITDA¹ from continuing operations for the fourth quarter of Fiscal 2022 of $157.4 million compared to $94.3 million for the fourth quarter of Fiscal 2021
• Fiscal Year 2022 Adjusted EBITDA¹ from continuing operations of $542.5 million compared to $448.3 million in the prior year
• Announced a new long-term produced water transportation, recycling and disposal agreement with a leading investment grade independent producer. The new dedicated agreement spans an area of over 300,000 acres in New Mexico and Texas, bringing our total dedicated acreage portfolio in the Delaware Basin to over 660,000 acres.

“The Partnership had a strong finish to its Fiscal 2022 and continues to see positive momentum as we move into our 2023 fiscal year. Produced water volumes approximated 2.1 million barrels per day in April, 2.2 million barrels per day in May and are expected to exceed this level for the remainder of Fiscal 2023. We achieved our first $90 million Adjusted EBITDA¹ quarter in Water Solutions segment and anticipate Adjusted EBITDA¹ for the Water Solutions segment of over $400 million for the upcoming fiscal year, assuming current producer activity levels and commodity prices. This is an increase of $15 million from our previous guidance of $385 million. We have worked incredibly hard over the past few years to build the premier water solutions asset position in the best basin in the country and we are beginning to realize the benefit of those efforts,” stated Mike Krimbill, NGL’s CEO. “The Partnership expects total Adjusted EBITDA¹ of at least $600 million and capital expenditures of approximately $100 million for Fiscal 2023. Assuming stable commodity prices, we expect the resulting free cash flow to total approximately $280 million, which we plan to use to repay our Senior Notes due 2023. We will update the market on our progress towards these goals as the year goes on,” Krimbill concluded.

____________________________

1 See the “Non-GAAP Financial Measures” section of this release for the definition of Adjusted EBITDA (as used herein) and a discussion of this non-GAAP financial measure.

Quarterly Results of Operations

The following table summarizes operating income (loss) and Adjusted EBITDA¹ from continuing operations by reportable segment for the periods indicated:

		Quarter Ended
		March 31, 2022								March 31, 2021
		Operating Income (Loss)				Adjusted EBITDA1				Operating Income (Loss)				Adjusted EBITDA1
		(in thousands)
Water Solutions		$	34,645			$	90,279			$	(79,217	)		$	57,979
Crude Oil Logistics			7,092				54,459				6,303				22,176
Liquids Logistics			10,349				24,546				19,103				26,467
Corporate and Other			(13,637	)			(11,870	)			(16,166	)			(12,343	)
Total		$	38,449			$	157,414			$	(69,977	)		$	94,279

Water Solutions

Operating income for the Water Solutions segment increased $113.9 million for the quarter ended March 31, 2022, compared to the quarter ended March 31, 2021. The Partnership processed approximately 1.93 million barrels of water per day during the quarter ended March 31, 2022, a 37.7% increase when compared to approximately 1.40 million barrels of water per day processed during the quarter ended March 31, 2021. This increase was due to higher production volumes (and associated produced water) primarily in the Delaware Basin driven by the recovery in crude oil prices from the prior year. The Partnership also sold approximately 146,000 barrels per day of produced and recycled water for use in our customers’ completion activities.

Revenues from recovered crude oil, including the impact from realized skim oil hedges, totaled $26.4 million for the quarter ended March 31, 2022, an increase of $14.3 million from the prior year period. This increase was due to increased skim oil barrels sold due to higher produced water volumes processed as well as higher realized crude oil prices received from the sale of skim oil barrels.

Operating expenses in the Water Solutions segment decreased to $0.28 per produced barrel processed compared to $0.29 per barrel in the comparative quarter last year primarily due to continued efforts to manage operating costs per barrel along with higher produced water volumes processed. Two of the Water Solutions segment’s largest variable expenses, utility and royalty expenses, were not (and are not expected to be) impacted by the rise in inflation due to negotiating long-term utility contracts with fixed rates and royalty contracts with no escalation clauses.

Crude Oil Logistics

Operating income for the fourth quarter of Fiscal 2022 increased slightly compared to the same quarter in Fiscal 2021. Our margins continued to benefit from high crude oil prices, which increase contracted rates with certain producers, and realized gains on the sale of inventory due to rapidly increasing crude oil prices. This was offset by our losses from derivatives which increased by $33 million for the quarter ended March 31, 2022, compared to the quarter ended March 31, 2021, a portion of which is expected to be realized in Adjusted EBITDA¹ during the quarter ending June 30, 2022.

During the three months ended March 31, 2022, physical volumes on the Grand Mesa Pipeline averaged approximately 74,000 barrels per day, compared to approximately 66,000 barrels per day for the three months ended March 31, 2021. This increase was due primarily to the new supply agreement with a term customer, which commenced in March 2021.

As a part of continued efforts to optimize the Partnership’s asset portfolio, we sold certain of our crude trucking assets during the quarter, which generated a $5.5 million gain on the sale of assets.

Liquids Logistics

Operating income for the Liquids Logistics segment decreased $8.8 million for the quarter ended March 31, 2022, compared to the quarter ended March 31, 2021. This decrease is mainly related to lower product margins on propane due to reduced demand, increased competition and lower product allocations from certain suppliers, as well as lower service revenues due to the sale of Sawtooth and less throughput in certain of our terminals. The decrease was offset by higher product margins for butane and refined products as a result of tighter supply markets and volatility caused by the geopolitical unrest.

Propane volumes decreased by 87.8 million gallons, or 18.4%, compared to the quarter ended March 31, 2021, due to the warm winter weather in our core operating areas, increased competition and lower allocations of product from certain suppliers. Butane volumes decreased by 19.2 million gallons, or 10.7%, due to the tight supply market and an increase in demand for exports.

Capitalization and Liquidity

Total liquidity (cash plus available capacity on our asset-based revolving credit facility (“ABL Facility”)) was approximately $232.7 million as of March 31, 2022. On March 31, 2022, the Partnership reported $116.0 million in outstanding borrowings on its ABL Facility, compared to $4.0 million in outstanding borrowings at March 31, 2021. This increase was due to higher working capital requirements as a result of increased commodity prices, a portion of which was funded using free cash flow. On April 13, 2022, the ABL Facility was amended to increase, under the accordion feature, the commitments to $600 million with an agreement to lower the commitments back to $500 million on or before March 31, 2023.

As of March 31, 2022, the Partnership is in compliance with all of its debt covenants and has no significant current debt maturities before November 2023. The Partnership expects to generate approximately $280 million of excess cash flow in Fiscal 2023, which it plans to use to repay outstanding indebtedness and improve leverage.

Fourth Quarter Conference Call Information

A conference call to discuss NGL’s results of operations is scheduled for 4:00 pm Central Time on Monday, June 6, 2022. Analysts, investors, and other interested parties may join the webcast via the event link: https://www.webcaster4.com/Webcast/Page/2808/45661 or by dialing (888) 506-0062 and providing access code: 956840. An archived audio replay of the call will be available for 14 days, which can be accessed by dialing (877) 481-4010 and providing access code 45661.

NGL filed its Annual Report on Form 10-K for the year ended March 31, 2022 with the Securities and Exchange Commission after market on June 6, 2022. A copy of the Form 10-K can be found on the Partnership’s website at www.nglenergypartners.com. Unitholders may also request, free of charge, a hard copy of our Form 10-K and our complete audited financial statements.

Non-GAAP Financial Measures

NGL defines EBITDA as net income (loss) attributable to NGL Energy Partners LP, plus interest expense, income tax expense (benefit), and depreciation and amortization expense. NGL defines Adjusted EBITDA as EBITDA excluding net unrealized gains and losses on derivatives, lower of cost or net realizable value adjustments, gains and losses on disposal or impairment of assets, gains and losses on early extinguishment of liabilities, equity-based compensation expense, acquisition expense, revaluation of liabilities, certain legal settlements and other. NGL also includes in Adjusted EBITDA certain inventory valuation adjustments related to TransMontaigne Product Services, LLC (“TPSL”), our refined products business in the mid-continent region of the United States (“Mid-Con”) and our gas blending business in the southeastern and eastern regions of the United States (“Gas Blending”), which are included in discontinued operations, and certain refined products businesses within NGL’s Liquids Logistics segment, as discussed below. EBITDA and Adjusted EBITDA should not be considered alternatives to net loss, loss from continuing operations 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 to investors for evaluating NGL’s ability to make quarterly distributions to NGL’s 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 NGL’s financing methods, capital structure and historical cost basis. Further, EBITDA and Adjusted EBITDA, as NGL defines them, may not be comparable to EBITDA, Adjusted EBITDA, or similarly titled measures used by other entities.

Other than for the Mid-Con, and Gas Blending businesses, which are included in discontinued operations, and certain businesses within NGL’s Liquids Logistics segment, for purposes of the 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 record a realized gain or loss. NGL does not draw such a distinction between realized and unrealized gains and losses on derivatives of the Mid-Con, and Gas Blending businesses, which are included in discontinued operations, and certain businesses within NGL’s Liquids Logistics segment. The primary hedging strategy of these businesses 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 cover extended periods of time. The “inventory valuation adjustment” row in the reconciliation table reflects the difference between the market value of the inventory of these businesses at the balance sheet date and its cost, adjusted for the impact of seasonal market movements related to our base inventory and the related hedge. NGL includes this in Adjusted EBITDA because the unrealized gains and losses associated with derivative contracts associated with the inventory of this segment, which are intended primarily to hedge inventory holding risk and are included in net income, also affect Adjusted EBITDA. In NGL’s Crude Oil Logistics segment, they purchase certain crude oil barrels using the West Texas Intermediate (“WTI”) calendar month average (“CMA”) price and sell the crude oil barrels using the WTI CMA price plus the Argus CMA Differential Roll Component (“CMA Differential Roll”) per NGL’s contracts. To eliminate the volatility of the CMA Differential Roll, NGL entered into derivative instrument positions in January 2021 to secure a margin of approximately $0.20 per barrel on 1.5 million barrels per month from May 2021 through December 2023. Due to the nature of these positions, the cash flow and earnings recognized on a GAAP basis will differ from period to period depending on the current crude oil price and future estimated crude oil price which are valued utilizing third-party market quoted prices. NGL is recognizing in Adjusted EBITDA the gains and losses from the derivative instrument positions entered into in January 2021 to properly align with the physical margin we are hedging each month through the term of this transaction. This representation aligns with management’s evaluation of the transaction.

Distributable Cash Flow is defined as Adjusted EBITDA minus maintenance capital expenditures, income tax expense, cash interest expense, preferred unit distributions and other. Maintenance capital expenditures represent capital expenditures necessary to maintain the Partnership’s operating capacity. For the CMA Differential Roll transaction, as discussed above, we have included an adjustment to Distributable Cash Flow to reflect, in the period for which they relate, the actual cash flows for the positions that settled that are not being recognized in Adjusted EBITDA. Distributable Cash Flow is a performance metric used by senior management to compare cash flows generated by the Partnership (excluding growth capital expenditures and prior to the establishment of any retained cash reserves by the Board of Directors) to the cash distributions expected to be paid to unitholders. Using this metric, management can quickly compute the coverage ratio of estimated cash flows to planned cash distributions. This financial measure also is important to investors as an indicator of whether the Partnership is generating cash flow at a level that can sustain, or support an increase in, quarterly distribution rates. Actual distribution amounts are set by the Board of Directors.

Forward-Looking Statements

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 such forward-looking statements are reasonable, NGL cannot assure they 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.

NGL provides Adjusted EBITDA guidance that does not include certain charges and costs, which in future periods are generally expected to be similar to the kinds of charges and costs excluded from Adjusted EBITDA in prior periods, such as income taxes, interest and other non-operating items, depreciation and amortization, net unrealized gains and losses on derivatives, lower of cost or net realizable value adjustments, gains and losses on disposal or impairment of assets, gains and losses on early extinguishment of liabilities, equity-based compensation expense, acquisition expense, revaluation of liabilities and items that are unusual in nature or infrequently occurring. The exclusion of these charges and costs in future periods will have a significant impact on the Partnership’s Adjusted EBITDA, and the Partnership is not able to provide a reconciliation of its Adjusted EBITDA guidance to net income (loss) without unreasonable efforts due to the uncertainty and variability of the nature and amount of these future charges and costs and the Partnership believes that such reconciliation, if possible, would imply a degree of precision that would be potentially confusing or misleading to investors.

About NGL Energy Partners LP

NGL Energy Partners LP, a Delaware limited partnership, is a diversified midstream energy company that transports, stores, markets and provides other logistics services for crude oil, natural gas liquids and other products and transports, treats and disposes of produced water generated as part of the oil and natural gas production process.

For further information, visit the Partnership’s website at www.nglenergypartners.com.

NGL ENERGY PARTNERS LP AND SUBSIDIARIES Unaudited Consolidated Balance Sheets (in Thousands, except unit amounts)
	March 31,
	2022				2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	3,822			$	4,829
Accounts receivable-trade, net of allowance for expected credit losses of $2,626 and $2,192, respectively		1,123,163				725,943
Accounts receivable-affiliates		8,591				9,435
Inventories		251,277				158,467
Prepaid expenses and other current assets		159,486				109,164
Total current assets		1,546,339				1,007,838
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $887,006 and $776,279, respectively		2,462,390				2,706,853
GOODWILL		744,439				744,439
INTANGIBLE ASSETS, net of accumulated amortization of $507,285 and $517,518, respectively		1,135,354				1,262,613
INVESTMENTS IN UNCONSOLIDATED ENTITIES		21,897				22,719
OPERATING LEASE RIGHT-OF-USE ASSETS		114,124				152,146
OTHER NONCURRENT ASSETS		45,802				50,733
Total assets	$	6,070,345			$	5,947,341
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable-trade	$	1,084,837			$	679,868
Accounts payable-affiliates		73				119
Accrued expenses and other payables		140,719				170,400
Advance payments received from customers		7,934				11,163
Current maturities of long-term debt		2,378				2,183
Operating lease obligations		41,261				47,070
Total current liabilities		1,277,202				910,803
LONG-TERM DEBT, net of debt issuance costs of $42,988 and $55,555, respectively, and current maturities		3,350,463				3,319,030
OPERATING LEASE OBLIGATIONS		72,784				103,637
OTHER NONCURRENT LIABILITIES		104,346				114,615
CLASS D 9.00% PREFERRED UNITS, 600,000 and 600,000 preferred units issued and outstanding, respectively		551,097				551,097
EQUITY:
General partner, representing a 0.1% interest, 130,827 and 129,724 notional units, respectively		(52,478	)			(52,189	)
Limited partners, representing a 99.9% interest, 130,695,970 and 129,593,939 common units issued and outstanding, respectively		401,486				582,784
Class B preferred limited partners, 12,585,642 and 12,585,642 preferred units issued and outstanding, respectively		305,468				305,468
Class C preferred limited partners, 1,800,000 and 1,800,000 preferred units issued and outstanding, respectively		42,891				42,891
Accumulated other comprehensive loss		(308	)			(266	)
Noncontrolling interests		17,394				69,471
Total equity		714,453				948,159
Total liabilities and equity	$	6,070,345			$	5,947,341

NGL ENERGY PARTNERS LP AND SUBSIDIARIES Unaudited Consolidated Statements of Operations (in Thousands, except unit and per unit amounts)
		Three Months Ended March 31,								Year Ended March 31,
		2022				2021				2022				2021
REVENUES:
Water Solutions		$	147,777			$	95,318			$	544,866			$	370,986
Crude Oil Logistics			789,839				493,467				2,505,496				1,721,636
Liquids Logistics			1,595,631				1,163,333				4,897,553				3,133,146
Corporate and Other			—				313				—				1,255
Total Revenues			2,533,247				1,752,431				7,947,915				5,227,023
COST OF SALES:
Water Solutions			12,189				1,063				33,980				9,622
Crude Oil Logistics			761,055				462,732				2,352,932				1,515,993
Liquids Logistics			1,565,361				1,108,758				4,752,400				2,966,391
Corporate and Other			—				453				—				1,816
Total Cost of Sales			2,338,605				1,573,006				7,139,312				4,493,822
OPERATING COSTS AND EXPENSES:
Operating			77,925				72,094				285,535				254,562
General and administrative			17,397				19,791				63,546				70,468
Depreciation and amortization			66,575				67,572				288,720				317,227
Loss on disposal or impairment of assets, net			791				83,684				94,254				475,436
Revaluation of liabilities			(6,495	)			6,261				(6,495	)			6,261
Operating Income (Loss)			38,449				(69,977	)			83,043				(390,753	)
OTHER INCOME (EXPENSE):
Equity in earnings of unconsolidated entities			635				804				1,400				1,938
Interest expense			(67,636	)			(60,651	)			(271,640	)			(198,799	)
Gain (loss) on early extinguishment of liabilities, net			682				(60,984	)			1,813				(16,692	)
Other income (expense), net			251				(39,563	)			2,254				(36,503	)
Loss From Continuing Operations Before Income Taxes			(27,619	)			(230,371	)			(183,130	)			(640,809	)
INCOME TAX (EXPENSE) BENEFIT			(1,791	)			1,154				(971	)			3,391
Loss From Continuing Operations			(29,410	)			(229,217	)			(184,101	)			(637,418	)
Loss From Discontinued Operations, net of Tax			—				(23	)			—				(1,769	)
Net Loss			(29,410	)			(229,240	)			(184,101	)			(639,187	)
LESS: NET LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTERESTS			50				(447	)			(655	)			(632	)
NET LOSS ATTRIBUTABLE TO NGL ENERGY PARTNERS LP		$	(29,360	)		$	(229,687	)		$	(184,756	)		$	(639,819	)
NET LOSS FROM CONTINUING OPERATIONS ALLOCATED TO COMMON UNITHOLDERS		$	(56,269	)		$	(253,180	)		$	(288,630	)		$	(730,683	)
NET LOSS FROM DISCONTINUED OPERATIONS ALLOCATED TO COMMON UNITHOLDERS		$	—			$	(23	)		$	—			$	(1,767	)
NET LOSS ALLOCATED TO COMMON UNITHOLDERS		$	(56,269	)		$	(253,203	)		$	(288,630	)		$	(732,450	)
BASIC LOSS PER COMMON UNIT
Loss From Continuing Operations		$	(0.43	)		$	(1.96	)		$	(2.22	)		$	(5.67	)
Loss From Discontinued Operations, net of Tax		$	—			$	—			$	—			$	(0.01	)
Net Loss		$	(0.43	)		$	(1.96	)		$	(2.22	)		$	(5.68	)
DILUTED LOSS PER COMMON UNIT
Loss From Continuing Operations		$	(0.43	)		$	(1.96	)		$	(2.22	)		$	(5.67	)
Loss From Discontinued Operations, net of Tax		$	—			$	—			$	—			$	(0.01	)
Net Loss		$	(0.43	)		$	(1.96	)		$	(2.22	)		$	(5.68	)
BASIC WEIGHTED AVERAGE COMMON UNITS OUTSTANDING			130,371,691				129,395,184				129,840,234				128,980,823
DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING			130,371,691				129,395,184				129,840,234				128,980,823

EBITDA, ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW RECONCILIATION (Unaudited)
The following table reconciles NGL’s net loss to NGL’s EBITDA, Adjusted EBITDA and Distributable Cash Flow for the periods indicated:
		Three Months Ended March 31,								Year Ended March 31,
		2022				2021				2022				2021
		(in thousands)
Net loss		$	(29,410	)		$	(229,240	)		$	(184,101	)		$	(639,187	)
Less: Net loss (income) attributable to noncontrolling interests			50				(447	)			(655	)			(632	)
Net loss attributable to NGL Energy Partners LP			(29,360	)			(229,687	)			(184,756	)			(639,819	)
Interest expense			67,652				60,664				271,689				198,823
Income tax expense (benefit)			1,791				(1,153	)			971				(3,444	)
Depreciation and amortization			66,591				66,921				287,943				314,476
EBITDA			106,674				(103,255	)			375,847				(129,964	)
Net unrealized losses (gains) on derivatives			33,277				(291	)			(14,977	)			47,366
CMA Differential Roll net losses (gains) (1)			6,751				—				67,738				—
Inventory valuation adjustment (2)			6,497				(169	)			8,409				1,224
Lower of cost or net realizable value adjustments			8,226				3,111				10,862				(30,102	)
Loss on disposal or impairment of assets, net			791				83,677				94,059				476,601
(Gain) loss on early extinguishment of liabilities, net			(683	)			60,984				(1,851	)			16,692
Equity-based compensation expense (3)			(8	)			1,049				(1,052	)			6,727
Acquisition expense (4)			—				796				67				1,711
Revaluation of liabilities (5)			(6,495	)			6,261				(6,495	)			6,261
Class D Preferred Unitholder consent fee (6)			—				40,000				—				40,000
Other (7)			2,384				2,086				9,909				11,135
Adjusted EBITDA		$	157,414			$	94,249			$	542,516			$	447,651
Adjusted EBITDA - Discontinued Operations (8)		$	—			$	(30	)		$	—			$	(621	)
Adjusted EBITDA - Continuing Operations		$	157,414			$	94,279			$	542,516			$	448,272
Less: Cash interest expense (9)			63,482				57,178				254,619				185,138
Less: Income tax expense (benefit)			1,791				(1,154	)			971				(3,391	)
Less: Maintenance capital expenditures			21,414				6,520				59,468				28,787
Less: CMA Differential Roll (10)			5,563				—				54,817				—
Less: Preferred unit distributions paid			—				23,770				—				77,678
Less: Other (11)			—				(9	)			—				—
Distributable Cash Flow - Continuing Operations		$	65,164			$	7,974			$	172,641			$	160,060

(1)	Adjustment to align, within Adjusted EBITDA, the net gains and losses of the Partnership’s CMA Differential Roll derivative instruments positions with the physical margin being hedged. See “Non-GAAP Financial Measures” section above for a further discussion.
(2)	Amount reflects the difference between the market value of the inventory at the balance sheet date and its cost, adjusted for the impact of seasonal market movements related to our base inventory and the related hedge. See “Non-GAAP Financial Measures” section above for a further discussion.
(3)	Equity-based compensation expense in the table above may differ from equity-based compensation expense reported in the footnotes to our consolidated financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended March 31, 2022. Amounts reported in the table above include expense accruals for bonuses expected to be paid in common units, whereas the amounts reported in the footnotes to our consolidated financial statements only include expenses associated with equity-based awards that have been formally granted.
(4)	Amounts represent expenses we incurred related to legal and advisory costs associated with acquisitions.
(5)	Amounts for the three months ended March 31, 2022 and 2021 and years ended March 31, 2022 and 2021 represent the non-cash valuation adjustment of contingent consideration liabilities, offset by the cash payments, related to royalty agreements acquired as part of acquisitions in our Water Solutions segment.
(6)	Represents the fee paid to the holders of the Class D Preferred Units to obtain their consent in order to complete the issuance of the 2026 Senior Secured Notes and the ABL Facility (as discussed in the footnotes to our consolidated financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended March 31, 2022).
(7)	Amounts for the three months and years ended March 31, 2022 and 2021 represent non-cash operating expenses related to our Grand Mesa Pipeline, unrealized losses on marketable securities and accretion expense for asset retirement obligations.
(8)	Amounts include the operations of TPSL, Gas Blending and Mid-Con.
(9)	Amounts represent interest expense payable in cash for the period presented, excluding changes in the accrued interest balance.
(10)	Amount represents the cash portion of the adjustments of the Partnership’s CMA Differential Roll derivative instrument positions, as discussed above, that settled during the period.
(11)	Amounts represent cash paid to settle asset retirement obligations.

ADJUSTED EBITDA RECONCILIATION BY SEGMENT (Unaudited)
	Three Months Ended March 31, 2022
	Water Solutions				Crude Oil Logistics				Liquids Logistics				Corporate and Other				Consolidated
	(in thousands)
Operating income (loss)	$	34,645			$	7,092			$	10,349			$	(13,637	)		$	38,449
Depreciation and amortization		50,092				11,460				3,305				1,718				66,575
Amortization recorded to cost of sales		—				—				68				—				68
Net unrealized losses (gains) on derivatives		4,807				30,144				(1,674	)			—				33,277
CMA Differential Roll net losses (gains)		—				6,751				—				—				6,751
Inventory valuation adjustment		—				—				6,497				—				6,497
Lower of cost or net realizable value adjustments		—				2,246				5,980				—				8,226
Loss (gain) on disposal or impairment of assets, net		6,148				(5,307	)			—				(50	)			791
Equity-based compensation expense		—				—				—				(8	)			(8	)
Other income, net		102				3				84				62				251
Adjusted EBITDA attributable to unconsolidated entities		804				—				23				45				872
Adjusted EBITDA attributable to noncontrolling interest		(225	)			—				1				—				(224	)
Revaluation of liabilities		(6,495	)			—				—				—				(6,495	)
Other		401				2,070				(87	)			—				2,384
Adjusted EBITDA	$	90,279			$	54,459			$	24,546			$	(11,870	)		$	157,414

	Three Months Ended March 31, 2021
	Water Solutions				Crude Oil Logistics				Liquids Logistics				Corporate and Other				Continuing Operations				Discontinued Operations (TPSL, Mid-Con, Gas Blending)				Consolidated
	(in thousands)
Operating (loss) income	$	(79,217	)		$	6,303			$	19,103			$	(16,166	)		$	(69,977	)		$	—			$	(69,977	)
Depreciation and amortization		48,427				10,334				7,026				1,785				67,572				—				67,572
Amortization recorded to cost of sales		—				—				77				—				77				—				77
Net unrealized losses (gains) on derivatives		975				4,233				(5,499	)			—				(291	)			—				(291	)
Inventory valuation adjustment		—				—				(202	)			—				(202	)			—				(202	)
Lower of cost or net realizable value adjustments		—				(213	)			3,357				—				3,144				—				3,144
Loss (gain) on disposal or impairment of assets, net		80,357				(248	)			3,346				229				83,684				—				83,684
Equity-based compensation expense		—				—				—				1,049				1,049				—				1,049
Acquisition expense		10				—				—				786				796				—				796
Other income (expense), net		7				50				297				(39,917	)			(39,563	)			—				(39,563	)
Adjusted EBITDA attributable to unconsolidated entities		1,136				—				8				(109	)			1,035				—				1,035
Adjusted EBITDA attributable to noncontrolling interest		(330	)			—				(1,071	)			—				(1,401	)			—				(1,401	)
Revaluation of liabilities		6,261				—				—				—				6,261				—				6,261
Class D Preferred Unitholder consent fee		—				—				—				40,000				40,000				—				40,000
Other		353				1,717				25				—				2,095				—				2,095
Discontinued operations		—				—				—				—				—				(30	)			(30	)
Adjusted EBITDA	$	57,979			$	22,176			$	26,467			$	(12,343	)		$	94,279			$	(30	)		$	94,249

	Year Ended March 31, 2022
	Water Solutions				Crude Oil Logistics				Liquids Logistics				Corporate and Other				Consolidated
	(in thousands)
Operating income (loss)	$	94,851			$	45,033			$	(8,441	)		$	(48,400	)		$	83,043
Depreciation and amortization		214,558				48,489				18,714				6,959				288,720
Amortization recorded to cost of sales		—				—				281				—				281
Net unrealized losses (gains) on derivatives		11,652				(23,664	)			(2,965	)			—				(14,977	)
CMA Differential Roll net losses (gains)		—				67,738				—				—				67,738
Inventory valuation adjustment		—				—				8,409				—				8,409
Lower of cost or net realizable value adjustments		—				2,235				8,627				—				10,862
Loss (gain) on disposal or impairment of assets, net		25,598				(3,101	)			71,807				(50	)			94,254
Equity-based compensation expense		—				—				—				(1,052	)			(1,052	)
Acquisition expense		4				—				—				63				67
Other income, net		718				353				711				472				2,254
Adjusted EBITDA attributable to unconsolidated entities		2,363				—				14				(145	)			2,232
Adjusted EBITDA attributable to noncontrolling interest		(2,212	)			—				(528	)			—				(2,740	)
Revaluation of liabilities		(6,495	)			—				—				—				(6,495	)
Other		921				9,064				(65	)			—				9,920
Adjusted EBITDA	$	341,958			$	146,147			$	96,564			$	(42,153	)		$	542,516

	Year Ended March 31, 2021
	Water Solutions				Crude Oil Logistics				Liquids Logistics				Corporate and Other				Continuing Operations				Discontinued Operations (TPSL, Mid-Con, Gas Blending)				Consolidated
	(in thousands)
Operating (loss) income	$	(92,720	)		$	(304,330	)		$	70,441			$	(64,144	)		$	(390,753	)		$	—			$	(390,753	)
Depreciation and amortization		222,107				60,874				29,184				5,062				317,227				—				317,227
Amortization recorded to cost of sales		—				—				307				—				307				—				307
Net unrealized losses (gains) on derivatives		24,500				23,432				(566	)			—				47,366				—				47,366
Inventory valuation adjustment		—				—				1,197				—				1,197				—				1,197
Lower of cost or net realizable value adjustments		—				(29,458	)			(617	)			—				(30,075	)			—				(30,075	)
Loss on disposal or impairment of assets, net		76,942				384,143				3,350				11,001				475,436				—				475,436
Equity-based compensation expense		—				—				—				6,727				6,727				—				6,727
Acquisition expense		27				—				—				1,684				1,711				—				1,711
Other income (expense), net		266				1,565				1,301				(39,635	)			(36,503	)			—				(36,503	)
Adjusted EBITDA attributable to unconsolidated entities		3,019				—				(3	)			(252	)			2,764				—				2,764
Adjusted EBITDA attributable to noncontrolling interest		(1,647	)			—				(2,887	)			—				(4,534	)			—				(4,534	)
Revaluation of liabilities		6,261				—				—				—				6,261				—				6,261
Class D Preferred Unitholder consent fee		—				—				—				40,000				40,000				—				40,000
Intersegment transactions (1)		—				—				(27	)			—				(27	)			—				(27	)
Other		2,751				8,317				100				—				11,168				—				11,168
Discontinued operations		—				—				—				—				—				(621	)			(621	)
Adjusted EBITDA	$	241,506			$	144,543			$	101,780			$	(39,557	)		$	448,272			$	(621	)		$	447,651

(1)	Amount reflects the transactions with TPSL, Mid-Con and Gas Blending that are eliminated in consolidation.

OPERATIONAL DATA (Unaudited)
	Three Months Ended				Year Ended
	March 31,				March 31,
	2022		2021		2022		2021
	(in thousands, except per day amounts)
Water Solutions:
Produced water processed (barrels per day)
Delaware Basin	1,664,140		1,212,453		1,531,830		1,148,582
Eagle Ford Basin	99,299		63,871		99,298		78,397
DJ Basin	142,628		101,116		142,611		111,016
Other Basins	20,091		21,210		24,179		26,596
Total	1,926,158		1,398,650		1,797,918		1,364,591
Recycled water (barrels per day)	145,944		45,017		93,487		43,503
Total (barrels per day)	2,072,102		1,443,667		1,891,405		1,408,094
Skim oil sold (barrels per day)	3,468		2,525		2,864		1,957
Crude Oil Logistics:
Crude oil sold (barrels)	8,064		8,146		31,091		38,349
Crude oil transported on owned pipelines (barrels)	6,653		5,961		28,410		32,797
Crude oil storage capacity - owned and leased (barrels) (1)					5,232		5,239
Crude oil inventory (barrels) (1)					1,339		1,201
Liquids Logistics:
Refined products sold (gallons)	190,661		188,368		776,797		834,717
Propane sold (gallons)	389,823		477,652		1,034,706		1,364,224
Butane sold (gallons)	160,386		179,601		588,032		655,256
Other products sold (gallons)	86,828		119,654		376,906		471,245
Natural gas liquids and refined products storage capacity - owned and leased (gallons) (1)					156,219		427,975
Refined products inventory (gallons) (1)					1,090		1,223
Propane inventory (gallons) (1)					37,719		51,026
Butane inventory (gallons) (1)					19,825		20,066
Other products inventory (gallons) (1)					18,614		19,195

(1)	Information is presented as of March 31, 2022 and March 31, 2021, respectively.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220605005110/en/

NGL Energy Partners LP

Linda J. Bridges, 918-481-1119

Executive Vice President, Chief Financial Officer and Treasurer

Linda.Bridges@nglep.com

or

David Sullivan, 918-481-1119

Vice President - Finance

David.Sullivan@nglep.com

Source: NGL Energy Partners LP

FAQ

What were NGL Energy's earnings for fiscal year 2022?

NGL reported a loss from continuing operations of $184.1 million for fiscal year 2022.

How much Adjusted EBITDA did NGL generate in Q4 fiscal 2022?

NGL generated $157.4 million in Adjusted EBITDA from continuing operations for Q4 fiscal 2022.

What is NGL's outlook for Adjusted EBITDA in fiscal 2023?

NGL expects total Adjusted EBITDA of at least $600 million for fiscal 2023.

What operational milestone did NGL achieve in produced water processing?

NGL processed approximately 1.93 million barrels of produced water per day in Q4 fiscal 2022, a 37.7% increase year-over-year.

How much did NGL's capital expenditures amount to for fiscal 2023?

NGL plans for approximately $100 million in capital expenditures for fiscal 2023.