NGL Energy Partners LP Announces Fourth Quarter and Full Year Fiscal 2021 Financial Results

Rhea-AI Summary

NGL Energy Partners LP (NYSE:NGL) reported a fourth-quarter loss from continuing operations of $229.2 million for the quarter ending March 31, 2021, driven by one-time costs and an impairment charge. The total loss for Fiscal 2021 reached $637.4 million, largely due to a $383.6 million goodwill write-down. Adjusted EBITDA fell to $94.3 million from $161.8 million year-on-year. Despite challenges, NGL completed a $2.05 billion private offering, enhancing liquidity and extending debt maturities. The partnership anticipates improved performance in Fiscal 2022 with rising crude prices and producer volumes.

Positive

• Successful completion of a $2.05 billion private offering of senior secured notes.
• Enhanced liquidity with total cash and available capacity of $344.9 million as of March 31, 2021.
• Expectation of increased demand in Fiscal 2022 as crude prices stabilize.

Negative

• Loss from continuing operations for the quarter was $229.2 million, including substantial one-time costs.
• Total loss from continuing operations for the year reached $637.4 million.
• Adjusted EBITDA fell to $448.3 million in Fiscal 2021, down from $589.5 million the previous year.

NGL Energy Partners LP (NYSE:NGL) (“NGL,” “our,” “we,” or the “Partnership”) today reported its fourth quarter and full year fiscal 2021 results.

Highlights for the quarter and fiscal year ended March 31, 2021 include:

• Loss from continuing operations for the quarter ended March 31, 2021 of $229.2 million, including a loss of $63.1 million related to the early repayment of the Partnership’s term loan facility, a one-time $40.0 million consent payment to the holders of the Partnership’s Class D Preferred Units and a non-cash impairment charge of $84.3 million for certain inactive or underutilized saltwater disposal facilities
• Loss from continuing operations of $637.4 million for Fiscal 2021, which includes the $383.6 million write down of goodwill and certain intangibles related to the impact of the bankruptcy rejection of transportation contracts with Extraction Oil & Gas, Inc. (“Extraction”), certain costs associated with the re-financing of our credit facility and term loan facility and the impairment of certain assets
• Adjusted EBITDA from continuing operations for the fourth quarter of Fiscal 2021 of $94.3 million, compared to $161.8 million for the fourth quarter of Fiscal 2020, driven by lower volumes in each of our operating segments
• Fiscal Year 2021 Adjusted EBITDA from continuing operations of $448.3 million compared to $589.5 million in the prior year
• Completion of a private offering of $2.05 billion of 7.5% senior secured notes due 2026 (“2026 Secured Notes”) and a new $500.0 million asset-based revolving credit facility (“ABL Facility”) on February 4, 2021. These transactions significantly extended debt maturities as proceeds received were used to repay all outstanding amounts under the Partnership’s previous $1.915 billion revolving credit facility due in October 2021 and its $250.0 million term loan facility and terminate those agreements, as well as to pay all fees and expenses associated with the transactions.
• Announced suspension of all common unit and preferred unit distributions until the Board of Directors of our general partner deems it prudent to resume distributions and such distributions are consistent with the terms of the Partnership’s various debt agreements

“The Partnership is well positioned going into its Fiscal 2022, as crude prices, producer volumes and demand for commodities have all increased following a challenging Fiscal 2021. Our Water Solutions segment continues to drive the growth of the Partnership and we look to fully capitalize on our Delaware Basin platform in the coming year. We are excited about rising and stabilizing crude oil prices and the return of production growth in the DJ Basin and expect to see increased producer demand for capacity on our Grand Mesa Pipeline as well,” stated Mike Krimbill, NGL’s CEO. “Fiscal 2021 was significant for the Partnership as we successfully extended our debt maturities and improved liquidity in a difficult banking environment for energy companies and provided a secure platform from which the Partnership can operate going forward. Once again, we are looking forward to seeing increased utilization of our existing asset platform to deliver excess free cash flow for deleveraging and the eventual reinstatement of our distributions,” Krimbill concluded.

Quarterly Results of Operations

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

		Quarter Ended
		March 31, 2021								March 31, 2020
		Operating Income (Loss)				Adjusted EBITDA				Operating Income (Loss)				Adjusted EBITDA
		(in thousands)
Water Solutions		$	(79,217	)		$	57,979			$	(207,444	)		$	72,140
Crude Oil Logistics		6,303				22,176				16,750				56,938
Liquids Logistics		19,103				26,467				29,204				47,424
Corporate and Other		(16,166		)		(12,343		)		(15,872		)		(14,740		)
Total		$	(69,977	)		$	94,279			$	(177,362	)		$	161,762

Water Solutions

The Partnership processed approximately 1.4 million barrels of water per day during the quarter ended March 31, 2021, a 17.6% decrease when compared to approximately 1.7 million barrels of water per day processed during the quarter ended March 31, 2020. This decrease was primarily due to lower development activity and production volumes through the past year along with the impact from winter storm Uri and the slower recovery of volumes in the Delaware Basin. The decline was partially offset by new produced water volumes received upon the completion and commencement of the Partnership’s Poker Lake pipeline. The pipeline was successfully completed in October 2020 with capacity of over 400,000 barrels per day and connects into the Partnership’s integrated Delaware Basin produced water pipeline infrastructure network.

Operating expenses in the Water Solutions segment decreased to $0.29 per barrel compared to $0.38 per barrel in the comparative quarter last year. This includes certain costs incurred in February 2021 related to winter storm Uri, combined with lower volumes. The Partnership has taken significant steps to reduce operating costs and continues to evaluate cost saving initiatives.

Crude Oil Logistics

Operating income for the fourth quarter of Fiscal 2021 decreased compared to the same quarter in Fiscal 2020 due to lower activity on our Grand Mesa Pipeline, revenues from which decreased by $19.1 million during the quarter ended March 31, 2021, compared to the quarter ended March 31, 2020. During the three months ended March 31, 2021, financial volumes on the Grand Mesa Pipeline averaged approximately 131,000 barrels per day during the prior year period, a decrease primarily due to the bankruptcy court’s approved rejection of the Extraction transportation agreement. Winter storm Uri in February 2021 reduced not only volumes at the lease in all areas of our operations, including the DJ Basin, but also refinery demand due to outages on the United States Gulf Coast. This was partially offset by an increase in prices during the fourth quarter of Fiscal 2021.

Liquids Logistics

Total product margin per gallon, excluding the impact of derivatives, was $0.060 for the quarter ended March 31, 2021 compared to $0.044 in the same quarter of the prior year. Liquids revenues increased due to increased commodity prices in the quarter ended March 31, 2021 as a result of winter storm Uri in February, which impacted the supply of natural gas liquids and refined products. Refined products volume sold decreased during the quarter ended March 31, 2021 and totaled approximately 188.4 million gallons, compared to 292.1 million gallons in the same period in the prior year, as demand for refined products has not fully rebounded from the pandemic. Butane volumes also continued to be impacted by a lack in demand. Propane volumes for the quarter ended March 31, 2021 were down approximately 5.0% from the same period last year due to less demand throughout the heating season in our core operating areas.

Capitalization and Liquidity

Total liquidity (cash plus available capacity on our revolving credit facility) was approximately $344.9 million as of March 31, 2021. 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 excess cash flow in Fiscal 2022, which will be utilized 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 Thursday, June 3, 2021. Analysts, investors, and other interested parties may access the conference call by dialing (800) 291-4083 and providing access code 7299585. An archived audio replay of the conference call will be available for 7 days beginning at 1:00 pm Central Time on June 4, 2021, which can be accessed by dialing (855) 859-2056 and providing access code 7299585.

NGL filed its Annual Report on Form 10-K for the year ended March 31, 2021 with the Securities and Exchange Commission after market on June 3, 2021. 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 TPSL, 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 TPSL, 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.

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. 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, treats, recycles and disposes of produced water generated as part of the energy production process as well as transports, stores, markets and provides other logistics services for crude oil and liquid hydrocarbons.

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,
	2021				2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	4,829			$	22,704
Accounts receivable-trade, net of allowance for expected credit losses of $2,192 and $4,540, respectively	725,943				566,834
Accounts receivable-affiliates	9,435				12,934
Inventories	158,467				69,634
Prepaid expenses and other current assets	109,164				101,981
Total current assets	1,007,838				774,087
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $776,279 and $529,068, respectively	2,706,853				2,851,555
GOODWILL	744,439				993,587
INTANGIBLE ASSETS, net of accumulated amortization of $517,518 and $631,449, respectively	1,262,613				1,612,480
INVESTMENTS IN UNCONSOLIDATED ENTITIES	22,719				23,182
OPERATING LEASE RIGHT-OF-USE ASSETS	152,146				180,708
OTHER NONCURRENT ASSETS	50,733				63,137
Total assets	$	5,947,341			$	6,498,736
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable-trade	$	679,868			$	515,049
Accounts payable-affiliates	119				17,717
Accrued expenses and other payables	170,400				232,062
Advance payments received from customers	11,163				19,536
Current maturities of long-term debt	2,183				4,683
Operating lease obligations	47,070				56,776
Total current liabilities	910,803				845,823
LONG-TERM DEBT, net of debt issuance costs of $55,555 and $19,795, respectively, and current maturities	3,319,030				3,144,848
OPERATING LEASE OBLIGATIONS	103,637				121,013
OTHER NONCURRENT LIABILITIES	114,615				114,079
CLASS D 9.00% PREFERRED UNITS, 600,000 and 600,000 preferred units issued and outstanding, respectively	551,097				537,283
EQUITY:
General partner, representing a 0.1% interest, 129,724 and 128,901 notional units, respectively	(52,189		)		(51,390		)
Limited partners, representing a 99.9% interest, 129,593,939 and 128,771,715 common units issued and outstanding, respectively	582,784				1,366,152
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	(266		)		(385		)
Noncontrolling interests	69,471				72,954
Total equity	948,159				1,735,690
Total liabilities and equity	$	5,947,341			$	6,498,736

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,
		2021				2020				2021				2020
REVENUES:
Water Solutions		$	95,318			$	127,420			$	370,986			$	422,059
Crude Oil Logistics		493,467				501,466				1,721,636				2,549,767
Liquids Logistics		1,163,333				1,052,119				3,133,146				4,611,136
Other		313				239				1,255				1,038
Total Revenues		1,752,431				1,681,244				5,227,023				7,584,000
COST OF SALES:
Water Solutions		1,063				(38,571		)		9,622				(33,870		)
Crude Oil Logistics		462,732				446,571				1,515,993				2,293,953
Liquids Logistics		1,108,758				981,341				2,966,391				4,342,526
Other		453				437				1,816				1,774
Total Cost of Sales		1,573,006				1,389,778				4,493,822				6,604,383
OPERATING COSTS AND EXPENSES:
Operating		72,094				102,383				254,562				332,993
General and administrative		19,791				20,264				70,468				113,664
Depreciation and amortization		67,572				74,719				317,227				265,312
Loss on disposal or impairment of assets, net		83,684				272,268				475,436				261,786
Revaluation of liabilities		6,261				(806		)		6,261				9,194
Operating Loss		(69,977		)		(177,362		)		(390,753		)		(3,332		)
OTHER INCOME (EXPENSE):
Equity in earnings of unconsolidated entities		804				1,014				1,938				1,291
Interest expense		(60,651		)		(49,370		)		(198,799		)		(181,184		)
(Loss) gain on early extinguishment of liabilities, net		(60,984		)		1,341				(16,692		)		1,341
Other (expense) income, net		(39,563		)		717				(36,503		)		1,684
Loss From Continuing Operations Before Income Taxes		(230,371		)		(223,660		)		(640,809		)		(180,200		)
INCOME TAX BENEFIT (EXPENSE)		1,154				651				3,391				(345		)
Loss From Continuing Operations		(229,217		)		(223,009		)		(637,418		)		(180,545		)
Loss From Discontinued Operations, net of Tax		(23		)		(25,435		)		(1,769		)		(218,235		)
Net Loss		(229,240		)		(248,444		)		(639,187		)		(398,780		)
LESS: NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS		(447		)		1,210				(632		)		1,773
NET LOSS ATTRIBUTABLE TO NGL ENERGY PARTNERS LP		$	(229,687	)		$	(247,234	)		$	(639,819	)		$	(397,007	)
NET LOSS FROM CONTINUING OPERATIONS ALLOCATED TO COMMON UNITHOLDERS		$	(253,180	)		$	(243,454	)		$	(730,683	)		$	(367,246	)
NET LOSS FROM DISCONTINUED OPERATIONS ALLOCATED TO COMMON UNITHOLDERS		$	(23	)		$	(25,410	)		$	(1,767	)		$	(218,017	)
NET LOSS ALLOCATED TO COMMON UNITHOLDERS		$	(253,203	)		$	(268,864	)		$	(732,450	)		$	(585,263	)
BASIC (LOSS) INCOME PER COMMON UNIT
Loss From Continuing Operations		$	(1.96	)		$	(1.89	)		$	(5.67	)		$	(2.88	)
Loss From Discontinued Operations, net of Tax		$	—			$	(0.20	)		$	(0.01	)		$	(1.71	)
Net Loss		$	(1.96	)		$	(2.09	)		$	(5.68	)		$	(4.59	)
DILUTED (LOSS) INCOME PER COMMON UNIT
Loss From Continuing Operations		$	(1.96	)		$	(1.89	)		$	(5.67	)		$	(2.88	)
Loss From Discontinued Operations, net of Tax		$	—			$	(0.20	)		$	(0.01	)		$	(1.71	)
Net Loss		$	(1.96	)		$	(2.09	)		$	(5.68	)		$	(4.59	)
BASIC WEIGHTED AVERAGE COMMON UNITS OUTSTANDING		129,395,184				128,576,572				128,980,823				127,411,908
DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING		129,395,184				128,576,572				128,980,823				127,411,908

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,
		2021				2020				2021				2020
		(in thousands)
Net loss		$	(229,240	)		$	(248,444	)		$	(639,187	)		$	(398,780	)
Less: Net (income) loss attributable to noncontrolling interests		(447		)		1,210				(632		)		1,773
Net loss attributable to NGL Energy Partners LP		(229,687		)		(247,234		)		(639,819		)		(397,007		)
Interest expense		60,664				49,388				198,823				181,357
Income tax (benefit) expense		(1,153		)		(650		)		(3,444		)		365
Depreciation and amortization		66,921				74,098				314,476				265,147
EBITDA		(103,255		)		(124,398		)		(129,964		)		49,862
Net unrealized (gains) losses on derivatives		(291		)		(46,408		)		47,366				(38,557		)
Inventory valuation adjustment (1)		(169		)		(4,121		)		1,224				(29,676		)
Lower of cost or net realizable value adjustments		3,111				33,667				(30,102		)		31,202
Loss on disposal or impairment of assets, net		83,677				292,726				476,601				464,483
Loss (gain) on early extinguishment of liabilities, net		60,984				(1,341		)		16,692				(1,341		)
Equity-based compensation expense (2)		1,049				(699		)		6,727				26,510
Acquisition expense (3)		796				1,127				1,711				19,722
Revaluation of liabilities (4)		6,261				(806		)		6,261				9,194
Class D Preferred Unitholder consent fee (5)		40,000				—				40,000				—
Other (6)		2,086				5,107				11,135				15,788
Adjusted EBITDA		$	94,249			$	154,854			$	447,651			$	547,187
Adjusted EBITDA - Discontinued Operations (7)		$	(30	)		$	(6,908	)		$	(621	)		$	(42,270	)
Adjusted EBITDA - Continuing Operations		$	94,279			$	161,762			$	448,272			$	589,457
Less: Cash interest expense (8)		57,178				45,848				185,138				170,254
Less: Income tax (benefit) expense		(1,154		)		(650		)		(3,391		)		345
Less: Maintenance capital expenditures		6,520				10,999				28,787				61,353
Less: Preferred unit distributions paid		23,770				14,237				77,678				45,721
Less: Other (9)		(9		)		16				—				658
Distributable Cash Flow - Continuing Operations		$	7,974			$	91,312			$	160,060			$	311,126

(1)		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.
(2)		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, 2021. 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.
(3)		Amounts represent expenses we incurred related to legal and advisory costs associated with acquisitions, including Mesquite and Hillstone, along with amounts accrued related to the LCT Capital, LLC legal matter (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, 2021).
(4)		Amounts for the three months ended March 31, 2021 and 2020 and year ended March 31, 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. Amount for the year ended March 31, 2020 represents the non-cash valuation adjustment of our contingent consideration liability issued by us as part of our acquisition of Mesquite (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, 2021), partially offset by 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.
(5)		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, 2021).
(6)		Amounts for the three months and years ended March 31, 2021 and 2020 represent non-cash operating expenses related to our Grand Mesa Pipeline, unrealized losses on marketable securities and accretion expense for asset retirement obligations.
(7)		Amounts include the operations of TPSL, Gas Blending and Mid-Con.
(8)		Amounts represent interest expense payable in cash for the period presented, excluding changes in the accrued interest balance.
(9)		Amounts represent cash paid to settle asset retirement obligations.

ADJUSTED EBITDA RECONCILIATION BY SEGMENT
(Unaudited)
	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

	Three Months Ended March 31, 2020
	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	$	(207,444	)		$	16,750			$	29,204			$	(15,872	)		$	(177,362	)		$	—			$	(177,362	)
Depreciation and amortization	49,522				17,531				6,896				770				74,719				—				74,719
Amortization recorded to cost of sales	—				—				87				—				87				—				87
Net unrealized (gains) losses on derivatives	(35,748		)		(11,391		)		731				—				(46,408		)		—				(46,408		)
Inventory valuation adjustment	—				—				(1,886		)		—				(1,886		)		—				(1,886		)
Lower of cost or net realizable value adjustments	—				29,469				4,213				—				33,682				—				33,682
Loss on disposal or impairment of assets, net	264,306				284				7,678				—				272,268				—				272,268
Equity-based compensation expense	—				—				—				(699		)		(699		)		—				(699		)
Acquisition expense	92				—				—				1,035				1,127				—				1,127
Other income (expense), net	4				614				(20		)		119				717				—				717
Adjusted EBITDA attributable to unconsolidated entities	1,467				—				29				(93		)		1,403				—				1,403
Adjusted EBITDA attributable to noncontrolling interest	(613		)		—				(546		)		—				(1,159		)		—				(1,159		)
Revaluation of liabilities	(806		)		—				—				—				(806		)		—				(806		)
Intersegment transactions (1)	—				—				974				—				974				—				974
Other	1,360				3,681				64				—				5,105				—				5,105
Discontinued operations	—				—				—				—				—				(6,908		)		(6,908		)
Adjusted EBITDA	$	72,140			$	56,938			$	47,424			$	(14,740	)		$	161,762			$	(6,908	)		$	154,854

	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

	Year Ended March 31, 2020
	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	$	(173,064	)		$	117,768			$	142,411			$	(90,447	)		$	(3,332	)		$	—			$	(3,332	)
Depreciation and amortization	163,588				70,759				27,930				3,035				265,312				—				265,312
Amortization recorded to cost of sales	—				—				349				—				349				—				349
Net unrealized (gains) losses on derivatives	(29,861		)		(11,315		)		2,619				—				(38,557		)		—				(38,557		)
Inventory valuation adjustment	—				—				(2,150		)		—				(2,150		)		—				(2,150		)
Lower of cost or net realizable value adjustments	—				29,469				2,724				—				32,193				—				32,193
Loss (gain) on disposal or impairment of assets, net	255,285				(1,144		)		7,645				—				261,786				—				261,786
Equity-based compensation expense	—				—				—				26,510				26,510				—				26,510
Acquisition expense	4,079				—				—				15,643				19,722				—				19,722
Other (expense) income, net	(448		)		717				21				1,394				1,684				—				1,684
Adjusted EBITDA attributable to unconsolidated entities	2,152				—				24				(263		)		1,913				—				1,913
Adjusted EBITDA attributable to noncontrolling interest	(1,210		)		—				(1,842		)		—				(3,052		)		—				(3,052		)
Revaluation of liabilities	9,194				—				—				—				9,194				—				9,194
Intersegment transactions (1)	—				—				2,099				—				2,099				—				2,099
Other	2,607				12,965				214				—				15,786				—				15,786
Discontinued operations	—				—				—				—				—				(42,270		)		(42,270		)
Adjusted EBITDA	$	232,322			$	219,219			$	182,044			$	(44,128	)		$	589,457			$	(42,270	)		$	547,187

(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,
	2021			2020			2021			2020
	(in thousands, except per day amounts)
Water Solutions:
Produced water processed (barrels per day)
Delaware Basin (1)	1,212,453			1,294,750			1,148,582			1,170,158
Eagle Ford Basin	63,871			197,587			78,397			246,784
DJ Basin	101,116			158,159			111,016			164,936
Other Basins	21,210			47,594			26,596			61,091
Total	1,398,650			1,698,090			1,364,591			1,642,969
Solids processed (barrels per day)	1,104			5,449			1,324			5,697
Skim oil sold (barrels per day)	2,525			3,539			1,957			3,397
Crude Oil Logistics:
Crude oil sold (barrels)	8,146			9,870			38,349			42,799
Crude oil transported on owned pipelines (barrels)	5,961			10,971			32,797			45,884
Crude oil storage capacity - owned and leased (barrels) (2)							5,239			5,362
Crude oil inventory (barrels) (2)							1,201			1,111
Liquids Logistics:
Refined products sold (gallons)	188,368			292,140			834,717			1,272,546
Propane sold (gallons)	477,652			502,977			1,364,224			1,478,759
Butane sold (gallons)	179,601			225,834			655,256			814,528
Other products sold (gallons)	119,654			127,286			471,245			602,872
Natural gas liquids and refined products storage capacity - owned and leased (gallons) (2)							427,975			400,301
Refined products inventory (gallons) (2)							1,223			2,391
Propane inventory (gallons) (2)							51,026			57,221
Butane inventory (gallons) (2)							20,066			24,808
Other products inventory (gallons) (2)							19,195			26,126

(1)		During the year ended March 31, 2020, barrels per day of produced water processed by the assets acquired in the Mesquite (acquired July 2, 2019) and Hillstone (acquired October 31, 2019) transactions are calculated by the number of days in which we owned the assets.
(2)		Information is presented as of March 31, 2021 and March 31, 2020, respectively.

 

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FAQ

What were NGL's fourth-quarter results for the fiscal year ending March 31, 2021?

NGL reported a fourth-quarter loss from continuing operations of $229.2 million, significantly impacted by one-time costs and an impairment charge.

How did NGL's adjusted EBITDA change in fiscal year 2021?

NGL's adjusted EBITDA decreased to $448.3 million for Fiscal 2021, down from $589.5 million in the previous year.

What is NGL's outlook for fiscal year 2022?

NGL anticipates improved performance in Fiscal 2022 due to rising crude prices and increased producer demand.

What were the major components of NGL's losses in Fiscal 2021?

Major losses included a $383.6 million goodwill write-down and substantial one-time costs totaling $63.1 million.

What liquidity measures has NGL implemented?

NGL has enhanced its liquidity to approximately $344.9 million as of March 31, 2021, by completing a $2.05 billion private offering.