NGL Energy Partners LP Announces Second Quarter Fiscal 2025 Financial Results

Rhea-AI Summary

NGL Energy Partners LP reported mixed Q2 Fiscal 2025 results with net income dropping to $3.4 million from $28.3 million in Q2 Fiscal 2024. Adjusted EBITDA decreased to $147.3 million from $176.2 million year-over-year. The company reduced its SOFR margin from 4.50% to 3.75% and commenced operations on LEX II pipeline. Despite a 9% increase in disposed water volumes, NGL lowered its full-year consolidated Adjusted EBITDA guidance to $640-650 million due to projected warmer weather, lower crude oil prices, and Liquids Logistics performance.

Positive

• 9% quarter-over-quarter increase in disposed water volumes
• SOFR margin reduction from 4.50% to 3.75% on Term Loan B
• Successful commencement of LEX II pipeline operations
• Water Solutions segment operating income increased to $72.8M from $59.1M YoY

Negative

• Net income declined 88% YoY to $3.4M from $28.3M
• Adjusted EBITDA decreased 16.4% YoY to $147.3M from $176.2M
• Lowered full-year Adjusted EBITDA guidance to $640-650M
• Liquids Logistics segment turned to operating loss of $1.1M from $23.6M profit YoY

Insights

Financial Analyst

NGL Energy Partners' Q2 FY2025 results show concerning trends with $3.4 million net income, down significantly from $28.3 million in Q2 FY2024. Adjusted EBITDA declined by 16.4% to $147.3 million. The company's revised guidance lowering full-year Adjusted EBITDA to $640-650 million reflects operational challenges.

The Water Solutions segment shows resilience with 9% volume growth quarter-over-quarter, but Liquids Logistics swung to an operating loss. The SOFR margin reduction on Term Loan B from 4.50% to 3.75% should provide some interest expense relief. The warrant repurchase agreement for $6.9 million indicates management's focus on improving capital structure.

While water disposal demand remains strong, headwinds from warmer weather, lower crude prices and Liquids Logistics performance are concerning for near-term performance.

TULSA, Okla.--(BUSINESS WIRE)-- NGL Energy Partners LP (NYSE:NGL) (“NGL,” “we,” “us,” “our,” or the “Partnership”) today reported its second quarter Fiscal 2025 financial results. Highlights include:

• Net income for the second quarter of Fiscal 2025 of $3.4 million, compared to net income of $28.3 million for the second quarter of Fiscal 2024
• Adjusted EBITDA⁽¹⁾ for the second quarter of Fiscal 2025 of $147.3 million, compared to $176.2 million for the second quarter of Fiscal 2024
• On August 5, 2024, we amended the Term Loan B agreement to reduce the SOFR margin from 4.50% to 3.75%.

Highlights for the period subsequent to September 30, 2024:

• On November 1, 2024, we commenced operations on our expanded Lea County Express Pipeline system (LEX II).
• On November 11, 2024, we entered into an agreement to purchase 23,375,000 of our outstanding warrants for approximately $6.9 million. This transaction is expected to close on November 22, 2024.

“We continue to grow our disposed water volumes with the current quarter volumes increasing by approximately 9% over the preceding quarter. As indicated previously, our capital expenditures for the year were front loaded with LEX II so the back half of the fiscal year will generate a majority of our free cash flow. We are on track for the first six months of the fiscal year but are lowering our full year consolidated Adjusted EBITDA⁽²⁾ guidance to a range of $640 to $650 million, as a result of projected warmer weather, lower crude oil prices and other Liquids Logistics results,” stated Mike Krimbill. “We are seeing continued demand for new water disposal capacity, and our conversations with producers to contract additional volumes on Grand Mesa are going well. We continue to work on additional non-core asset sales,” he added.

Quarterly Results of Operations

The following table summarizes the unaudited operating income (loss) and Adjusted EBITDA⁽¹⁾ by reportable segment for the periods indicated:

		Quarter Ended
		September 30, 2024								September 30, 2023
		Operating Income (Loss)				Adjusted EBITDA(1)				Operating Income (Loss)				Adjusted EBITDA(1)
		(in thousands)
Water Solutions		$	72,829			$	128,862			$	59,118			$	140,389
Crude Oil Logistics			14,840				17,263				14,778				30,713
Liquids Logistics			(1,133	)			9,235				23,577				17,086
Corporate and Other			(8,807	)			(8,090	)			(11,443	)			(11,974	)
Total		$	77,729			$	147,270			$	86,030			$	176,214

________________

(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.

(2) Certain of the forward-looking financial measures are provided on a non-GAAP basis. A reconciliation of forward-looking financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP is potentially misleading and not practical given the difficulty of projecting event driven transactional and other non-core operating items in any future period. The magnitude of these items, however, may be significant.

Water Solutions

Operating income for the Water Solutions segment increased by $13.7 million for the quarter ended September 30, 2024, compared to the quarter ended September 30, 2023. The increase was due primarily to lower losses on the disposal or impairment of assets of $2.0 million in the current period compared to $23.6 million in the prior year period. Also contributing to the increase was an increase in net gains from derivatives. These increases were partially offset by lower disposal revenues due to the timing and recognition of payments made by certain producers for committed volumes not delivered and the prior year period including the acceleration of revenue from the termination of a water disposal contract with a minimum volume commitment. Excluding these items, disposal revenues increased due to an increase in produced water volumes processed on our system. The Partnership processed approximately 2.68 million barrels of produced water per day during the quarter ended September 30, 2024, a 9.8% increase when compared to approximately 2.44 million barrels of water per day processed during the quarter ended September 30, 2023.

Revenues from recovered skim oil, including the impact from realized skim oil hedges, totaled $27.4 million for the quarter ended September 30, 2024, a decrease of $3.7 million from the prior year period. The decrease was due primarily to a decrease in skim oil barrels sold as a result of lower skim oil recovered as certain producers recycled their water for use in their operations, lower realized crude oil prices received from the sale of skim oil barrels and the sale during the prior year quarter of approximately 53,000 barrels of skim oil that were stored at June 30, 2023 due to tighter pipeline specifications.

Operating expenses in the Water Solutions segment decreased $0.3 million for the quarter ended September 30, 2024, compared to the quarter ended September 30, 2023 due primarily to lower chemical expense due to purchasing fewer chemicals and using chemicals more efficiently, as well as lower repairs and maintenance expense due to the timing of repairs and tank cleaning. These decreases were partially offset by higher business insurance expense for remediation costs incurred, higher utilities expense due to increased produced water volumes processed and lower severance taxes in the prior year quarter as a result of a severance tax refund received in September 2023 that related to prior periods. Operating expense per produced barrel processed was $0.22 for the quarter ended September 30, 2024, compared to $0.24 in the comparative quarter last year.

Crude Oil Logistics

Operating income for the Crude Oil Logistics segment increased by $0.1 million for the quarter ended September 30, 2024, compared to the quarter ended September 30, 2023. The increase was due to net gains on derivative contracts of $4.4 million in the current period compared to net losses of $15.4 million in the prior year period. This was offset by lower margins due to reduced sales volumes as a result of lower production on acreage dedicated to us in the DJ Basin. In addition, margin per barrel decreased due to the selling higher priced inventory into a market in which prices were declining. During the quarter ended September 30, 2024, physical volumes on the Grand Mesa Pipeline averaged approximately 63,000 barrels per day, compared to approximately 70,000 barrels per day for the quarter ended September 30, 2023.

Liquids Logistics

Operating income for the Liquids Logistics segment decreased by $24.7 million for the quarter ended September 30, 2024, compared to the quarter ended September 30, 2023, primarily due to lower margins. Butane margins declined primarily due to an increase in derivative losses and the prior year period benefiting from a lower of cost or realizable value adjustment. Margins for propane declined due to lower contracted volumes due to reduced retail customer demand as a result of warmer weather, which was offset by an increase in derivative gains. Margins for refined products declined due to lower customer demand and aggressive pricing by some competitors in certain markets. Margins for other products declined primarily due to selling higher priced biodiesel inventory into a market in which prices were declining and lower derivative gains. In addition, a net gain of $6.9 million related to the sale of two propane terminals was realized in the prior year period.

Corporate and Other

The operating loss for Corporate and Other was lower by $2.6 million for the quarter ended September 30, 2024, compared to the quarter ended September 30, 2023. General and administrative expenses decreased due to lower legal expenses as several large cases ended and the reimbursement of legal expenses relating to a dispute associated with commercial activities in prior periods and a decrease in business insurance. The results for the prior period included gains from derivatives of $3.4 million as we had entered into economic hedges to protect our liquidity positions and leverage from a significant increase in commodity prices.

Capitalization and Liquidity

Total liquidity (cash plus available capacity on our asset-based revolving credit facility (“ABL Facility”)) was approximately $251.1 million as of September 30, 2024. Borrowings on the Partnership’s ABL Facility totaled approximately $274.0 million as of September 30, 2024, as we funded certain capital projects and began to build inventory for the blending and heating seasons.

The Partnership is in compliance with all of its debt covenants and has no upcoming debt maturities.

Second Quarter Conference Call Information

A conference call to discuss NGL’s results of operations is scheduled for 4:00 pm Central Time on Tuesday, November 12, 2024. Analysts, investors, and other interested parties may join the webcast via the event link: https://www.webcaster4.com/Webcast/Page/2808/51470 or by dialing (877) 545-0523 and providing conference code: 395492. An archived audio replay of the call will be available for 14 days, which can be accessed by dialing (877) 481-4010 and providing replay passcode 51470.

Non-GAAP Financial Measures

We define EBITDA as net income (loss) attributable to NGL Energy Partners LP, plus interest expense, income tax expense (benefit), and depreciation and amortization expense. We define 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, revaluation of liabilities and other. EBITDA and Adjusted EBITDA should not be considered as alternatives to net income, income before income taxes, cash flows from operating activities, or any other measure of financial performance calculated in accordance with GAAP, as those items are used to measure operating performance, liquidity or the ability to service debt obligations. We believe that EBITDA provides additional information to investors for evaluating our ability to make quarterly distributions to our unitholders and is presented solely as a supplemental measure. We believe that Adjusted EBITDA provides additional information to investors for evaluating our financial performance without regard to our financing methods, capital structure and historical cost basis. Further, EBITDA and Adjusted EBITDA, as we define them, may not be comparable to EBITDA, Adjusted EBITDA, or similarly titled measures used by other entities.

For purposes of our Adjusted EBITDA calculation, we make a distinction between realized and unrealized gains and losses on derivatives. During the period when a derivative contract is open, we record changes in the fair value of the derivative as an unrealized gain or loss. When a derivative contract matures or is settled, we reverse the previously recorded unrealized gain or loss and record a realized gain or loss. In our Crude Oil Logistics segment, we 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 our contracts. To eliminate the volatility of the CMA Differential Roll, we 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 differed from period to period depending on the current crude oil price and future estimated crude oil price which were valued utilizing third-party market quoted prices. We recognized 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 hedged each month through the term of this transaction. This representation aligns with management’s evaluation of the transaction. The derivative instrument positions we entered into related to the CMA Differential Roll expired as of December 31, 2023, and we have not entered into any new derivative instrument positions related to the CMA Differential Roll.

As previously reported, for purposes of our Adjusted EBITDA calculation, we did not draw a distinction between realized and unrealized gains and losses on derivatives of certain businesses within our 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. We include this in Adjusted EBITDA because the unrealized gains and losses for 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. Beginning April 1, 2024, and going forward, we will now be drawing a distinction between realized and unrealized gains and losses on derivatives and will no longer include the activity on the “inventory valuation adjustment” row in the reconciliation table for these certain businesses within our Liquids Logistics segment. This change aligns with how management now views and evaluates the transactions within these businesses and is also consistent with the calculation of Adjusted EBITDA used in our other businesses. If this change was made as of April 1, 2023, Adjusted EBITDA for the three months and six months ended September 30, 2023 would have been $175.8 million and $311.8 million, respectively.

Distributable Cash Flow is defined as Adjusted EBITDA minus maintenance capital expenditures, income tax expense, cash interest expense, preferred unit distributions paid 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 of our general partner) 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 of our general partner.

We do not provide a reconciliation for non-GAAP estimates on a forward-looking basis where we are unable to provide a meaningful calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing or amount of various items that would impact the most directly comparable forward-looking U.S. GAAP financial measure that have not yet occurred, are out of the Partnership’s control and/or cannot be reasonably predicted. Forward-looking non-GAAP financial measures provided without the most directly comparable U.S. GAAP financial measures may vary materially from the corresponding U.S. GAAP financial measures.

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 master limited partnership, is a diversified midstream energy partnership that transports, treats, recycles and disposes of produced and flowback 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 Condensed Consolidated Balance Sheets
(in Thousands, except unit amounts)
	September 30, 2024				March 31, 2024
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	4,495			$	38,909
Accounts receivable-trade, net of allowance for expected credit losses of $2,932 and $1,671, respectively		727,520				814,087
Accounts receivable-affiliates		1,569				1,501
Inventories		193,886				130,907
Prepaid expenses and other current assets		75,990				126,933
Assets held for sale		—				66,597
Total current assets		1,003,460				1,178,934
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $1,098,141 and $1,011,274, respectively		2,165,779				2,096,702
GOODWILL		634,282				634,282
INTANGIBLE ASSETS, net of accumulated amortization of $343,925 and $332,560, respectively		915,869				939,978
INVESTMENTS IN UNCONSOLIDATED ENTITIES		20,137				20,305
OPERATING LEASE RIGHT-OF-USE ASSETS		97,756				97,155
OTHER NONCURRENT ASSETS		52,896				52,738
Total assets	$	4,890,179			$	5,020,094
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable-trade	$	594,547			$	707,536
Accounts payable-affiliates		72				37
Accrued expenses and other payables		173,683				213,757
Advance payments received from customers		25,158				17,313
Current maturities of long-term debt		7,865				7,000
Operating lease obligations		27,660				31,090
Liabilities held for sale		—				614
Total current liabilities		828,985				977,347
LONG-TERM DEBT, net of debt issuance costs of $46,997 and $49,178, respectively, and current maturities		3,121,794				2,843,822
OPERATING LEASE OBLIGATIONS		74,118				70,573
OTHER NONCURRENT LIABILITIES		128,671				129,185
CLASS D 9.00% PREFERRED UNITS, 600,000 and 600,000 preferred units issued and outstanding, respectively		551,097				551,097
REDEEMABLE NONCONTROLLING INTEREST		179				—
EQUITY:
General partner, representing a 0.1% interest, 132,145 and 132,645 notional units, respectively		(52,881	)			(52,834	)
Limited partners, representing a 99.9% interest, 132,012,766 and 132,512,766 common units issued and outstanding, respectively		(131,712	)			134,807
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		(99	)			(499	)
Noncontrolling interests		21,668				18,237
Total equity		185,335				448,070
Total liabilities and equity	$	4,890,179			$	5,020,094

NGL ENERGY PARTNERS LP AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(in Thousands, except unit and per unit amounts)
		Three Months Ended September 30,								Six Months Ended September 30,
		2024				2023				2024				2023
REVENUES:
Water Solutions		$	181,867			$	197,244			$	363,277			$	378,546
Crude Oil Logistics			243,757				489,713				523,860				954,103
Liquids Logistics			926,977				1,154,139				1,852,723				2,124,551
Corporate and Other			74				—				74				—
Total Revenues			1,352,675				1,841,096				2,739,934				3,457,200
COST OF SALES:
Water Solutions			(567	)			7,424				433				9,993
Crude Oil Logistics			212,148				454,927				461,645				880,226
Liquids Logistics			909,614				1,119,478				1,832,325				2,066,725
Corporate and Other			—				(3,381	)			—				833
Total Cost of Sales			1,121,195				1,578,448				2,294,403				2,957,777
OPERATING COSTS AND EXPENSES:
Operating			78,132				77,389				150,665				154,070
General and administrative			12,179				17,496				27,193				37,787
Depreciation and amortization			61,931				65,526				124,150				134,505
Loss (gain) on disposal or impairment of assets, net			1,509				16,207				(9,157	)			15,011
Operating Income			77,729				86,030				152,680				158,050
OTHER INCOME (EXPENSE):
Equity in earnings of unconsolidated entities			1,522				851				1,822				942
Interest expense			(77,404	)			(58,627	)			(147,143	)			(118,149	)
Gain on early extinguishment of liabilities, net			—				63				—				6,871
Other income, net			1,822				310				1,989				616
Income Before Income Taxes			3,669				28,627				9,348				48,330
INCOME TAX (EXPENSE) BENEFIT			(278	)			(342	)			4,518				(482	)
Net Income			3,391				28,285				13,866				47,848
LESS: NET INCOME ATTRIBUTABLE TO NONREDEEMABLE NONCONTROLLING INTERESTS			(932	)			(257	)			(1,724	)			(519	)
LESS: NET INCOME ATTRIBUTABLE TO REDEEMABLE NONCONTROLLING INTERESTS			(5	)			—				(5	)			—
NET INCOME ATTRIBUTABLE TO NGL ENERGY PARTNERS LP		$	2,454			$	28,028			$	12,137			$	47,329
NET LOSS ALLOCATED TO COMMON UNITHOLDERS		$	(28,270	)		$	(6,709	)		$	(47,382	)		$	(21,191	)
BASIC AND DILUTED LOSS PER COMMON UNIT		$	(0.21	)		$	(0.05	)		$	(0.36	)		$	(0.16	)
BASIC AND DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING			132,274,669				131,927,343				132,393,067				131,927,343

EBITDA, ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW RECONCILIATION
(Unaudited)
The following table reconciles NGL’s net income to NGL’s EBITDA, Adjusted EBITDA and Distributable Cash Flow for the periods indicated:
		Three Months Ended September 30,								Six Months Ended September 30,
		2024				2023				2024				2023
		(in thousands)
Net income		$	3,391			$	28,285			$	13,866			$	47,848
Less: Net income attributable to nonredeemable noncontrolling interests			(932	)			(257	)			(1,724	)			(519	)
Less: Net income attributable to redeemable noncontrolling interests			(5	)			—				(5	)			—
Net income attributable to NGL Energy Partners LP			2,454				28,028				12,137				47,329
Interest expense			77,391				58,642				147,129				118,178
Income tax expense (benefit)			278				342				(4,518	)			482
Depreciation and amortization			61,546				65,502				123,395				134,423
EBITDA			141,669				152,514				278,143				300,412
Net unrealized losses on derivatives			5,632				9,691				23,588				9,059
Lower of cost or net realizable value adjustments			(901	)			1,080				(1,231	)			3,844
Loss (gain) on disposal or impairment of assets, net			1,515				16,207				(9,151	)			15,011
CMA Differential Roll net losses (gains) (1)			—				2,233				—				(6,904	)
Inventory valuation adjustment (2)			—				(6,436	)			—				(6,100	)
Gain on early extinguishment of liabilities, net			—				(63	)			—				(6,871	)
Equity-based compensation expense			—				410				—				884
Other (3)			(645	)			578				263				1,534
Adjusted EBITDA		$	147,270			$	176,214			$	291,612			$	310,869
Less: Cash interest expense (4)			68,491				54,483				135,709				109,894
Less: Income tax expense (benefit)			278				342				(4,518	)			482
Less: Maintenance capital expenditures			16,572				16,358				39,376				32,885
Less: CMA Differential Roll (5)			—				(7,352	)			—				(18,047	)
Less: Preferred unit distributions paid			27,513				—				245,604				—
Less: Other (6)			—				4				65				222
Distributable Cash Flow		$	34,416			$	112,379			$	(124,624	)		$	185,433

_______________
(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 represents the difference between the market value of the inventory at the balance sheet date and its cost. See “Non-GAAP Financial Measures” section above for a further discussion.
(3)	Amounts represent accretion expense for asset retirement obligations and expenses incurred related to legal and advisory costs associated with acquisitions and dispositions. Also, amounts for the three months and six months ended September 30, 2023 included unrealized gains/losses on marketable securities.
(4)	Amounts represent interest expense payable in cash, excluding changes in the accrued interest balance.
(5)	Amounts represent the cash portion of the adjustments of the Partnership’s CMA Differential Roll derivative instrument positions, as discussed above, that settled during the period.
(6)	Amounts represent cash paid to settle asset retirement obligations.

ADJUSTED EBITDA RECONCILIATION BY SEGMENT
(unaudited)
	Three Months Ended September 30, 2024
	Water Solutions				Crude Oil Logistics				Liquids Logistics				Corporate and Other				Consolidated
	(in thousands)
Operating income (loss)	$	72,829			$	14,840			$	(1,133	)		$	(8,807	)		$	77,729
Depreciation and amortization		52,523				6,285				2,421				702				61,931
Amortization recorded to cost of sales		—				—				102				—				102
Net unrealized losses (gains) on derivatives		388				(4,012	)			9,256				—				5,632
Lower of cost or net realizable value adjustments		—				540				(1,441	)			—				(901	)
Loss (gain) on disposal or impairment of assets, net		1,951				(442	)			—				—				1,509
Other income (expense), net		1,805				(1	)			(12	)			30				1,822
Adjusted EBITDA attributable to unconsolidated entities		1,649				—				(19	)			—				1,630
Adjusted EBITDA attributable to noncontrolling interest		(1,522	)			—				—				(34	)			(1,556	)
Other		(761	)			53				61				19				(628	)
Adjusted EBITDA	$	128,862			$	17,263			$	9,235			$	(8,090	)		$	147,270

	Three Months Ended September 30, 2023
	Water Solutions				Crude Oil Logistics				Liquids Logistics				Corporate and Other				Consolidated
	(in thousands)
Operating income (loss)	$	59,118			$	14,778			$	23,577			$	(11,443	)		$	86,030
Depreciation and amortization		52,053				9,573				2,383				1,517				65,526
Amortization recorded to cost of sales		—				—				65				—				65
Net unrealized losses (gains) on derivatives		4,471				4,554				3,230				(2,564	)			9,691
CMA Differential Roll net losses (gains)		—				2,233				—				—				2,233
Inventory valuation adjustment		—				—				(6,436	)			—				(6,436	)
Lower of cost or net realizable value adjustments		—				—				1,080				—				1,080
Loss (gain) on disposal or impairment of assets, net		23,599				(467	)			(6,925	)			—				16,207
Equity-based compensation expense		—				—				—				410				410
Other income (expense), net		248				(1	)			14				49				310
Adjusted EBITDA attributable to unconsolidated entities		1,032				—				(21	)			51				1,062
Adjusted EBITDA attributable to noncontrolling interest		(542	)			—				—				—				(542	)
Other		410				43				119				6				578
Adjusted EBITDA	$	140,389			$	30,713			$	17,086			$	(11,974	)		$	176,214

	Six Months Ended September 30, 2024
	Water Solutions				Crude Oil Logistics				Liquids Logistics				Corporate and Other				Consolidated
	(in thousands)
Operating income (loss)	$	157,187			$	28,929			$	(12,683	)		$	(20,753	)		$	152,680
Depreciation and amortization		105,235				12,726				4,832				1,357				124,150
Amortization recorded to cost of sales		—				—				167				—				167
Net unrealized (gains) losses on derivatives		(473	)			(5,992	)			30,053				—				23,588
Lower of cost or net realizable value adjustments		—				540				(1,771	)			—				(1,231	)
Gain on disposal or impairment of assets, net		(8,745	)			(412	)			—				—				(9,157	)
Other income, net		1,911				1				10				67				1,989
Adjusted EBITDA attributable to unconsolidated entities		2,036				—				(35	)			—				2,001
Adjusted EBITDA attributable to noncontrolling interest		(2,836	)			—				—				(34	)			(2,870	)
Other		150				106				120				(81	)			295
Adjusted EBITDA	$	254,465			$	35,898			$	20,693			$	(19,444	)		$	291,612

	Six Months Ended September 30, 2023
	Water Solutions				Crude Oil Logistics				Liquids Logistics				Corporate and Other				Consolidated
	(in thousands)
Operating income (loss)	$	128,449			$	31,785			$	31,408			$	(33,592	)		$	158,050
Depreciation and amortization		106,476				19,319				5,597				3,113				134,505
Amortization recorded to cost of sales		—				—				130				—				130
Net unrealized losses (gains) on derivatives		4,471				9,689				(5,489	)			388				9,059
CMA Differential Roll net losses (gains)		—				(6,904	)			—				—				(6,904	)
Inventory valuation adjustment		—				—				(6,100	)			—				(6,100	)
Lower of cost or net realizable value adjustments		—				—				3,844				—				3,844
Loss (gain) on disposal or impairment of assets, net		22,318				429				(7,736	)			—				15,011
Equity-based compensation expense		—				—				—				884				884
Other income, net		428				105				15				68				616
Adjusted EBITDA attributable to unconsolidated entities		1,259				—				(26	)			95				1,328
Adjusted EBITDA attributable to noncontrolling interest		(1,088	)			—				—				—				(1,088	)
Other		1,270				81				192				(9	)			1,534
Adjusted EBITDA	$	263,583			$	54,504			$	21,835			$	(29,053	)		$	310,869

OPERATIONAL DATA
(Unaudited)
	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
	(in thousands, except per day amounts)
Water Solutions:
Produced water processed (barrels per day)
Delaware Basin	2,349,333		2,156,733		2,255,861		2,154,906
Eagle Ford Basin	188,250		138,509		182,311		135,737
DJ Basin	143,947		146,124		135,867		157,745
Other Basins	—		—		—		1,481
Total	2,681,530		2,441,366		2,574,039		2,449,869
Recycled water (barrels per day)	92,301		35,341		98,334		67,213
Total (barrels per day)	2,773,831		2,476,707		2,672,373		2,517,082
Skim oil sold (barrels per day)	3,776		4,378		4,099		4,046
Crude Oil Logistics:
Crude oil sold (barrels)	2,868		5,636		6,042		11,643
Crude oil transported on owned pipelines (barrels)	5,807		6,484		11,520		13,047
Crude oil storage capacity - owned and leased (barrels) (1)					5,232		5,232
Crude oil inventory (barrels) (1)					450		660
Liquids Logistics:
Refined products sold (gallons)	206,915		209,919		406,864		430,006
Propane sold (gallons)	108,589		129,988		221,093		269,741
Butane sold (gallons)	109,783		108,085		204,972		186,574
Other products sold (gallons)	121,317		100,389		208,124		191,488
Natural gas liquids and refined products storage capacity - owned and leased (gallons) (1)					124,141		157,589
Refined products inventory (gallons) (1)					1,404		707
Propane inventory (gallons) (1)					80,323		115,491
Butane inventory (gallons) (1)					81,441		92,651
Other products inventory (gallons) (1)					12,813		18,012

_______________
(1)	Information is presented as of September 30, 2024 and September 30, 2023, respectively.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241112929360/en/

David Sullivan, 918-495-4631

Vice President - Finance

David.Sullivan@nglep.com

Source: NGL Energy Partners LP

FAQ

What was NGL Energy Partners' net income for Q2 Fiscal 2025?

NGL Energy Partners (NYSE:NGL) reported net income of $3.4 million for Q2 Fiscal 2025, down from $28.3 million in Q2 Fiscal 2024.

Why did NGL Energy Partners lower its Fiscal 2025 EBITDA guidance?

NGL lowered its Fiscal 2025 Adjusted EBITDA guidance to $640-650 million due to projected warmer weather, lower crude oil prices, and weaker Liquids Logistics results.

What operational milestone did NGL Energy Partners achieve in November 2024?

NGL Energy Partners commenced operations on its expanded Lea County Express Pipeline system (LEX II) on November 1, 2024.