NGL Energy Partners LP Announces Third Quarter Fiscal 2022 Financial Results

Rhea-AI Summary

NGL Energy Partners LP reported a loss from continuing operations of $19.0 million for Q3 Fiscal 2022, significantly improved from a loss of $380.4 million in Q3 Fiscal 2021, which was impacted by a $383.6 million goodwill write-down related to contract bankruptcies. Excluding asset impairment losses, the loss was $6.7 million, slightly higher than $6.6 million the previous year. The company achieved an Adjusted EBITDA of $147.7 million, up from $125.0 million year-over-year. Produced water volumes processed increased by 30%. NGL revised its fiscal guidance for Adjusted EBITDA to $550-$560 million.

Positive

• Loss from continuing operations significantly decreased from $380.4 million to $19.0 million year-over-year.
• Adjusted EBITDA improved to $147.7 million from $125.0 million year-over-year.
• Produced water volumes processed increased approximately 30% year-over-year.
• Collaboration with XRI Holdings to enhance water management in the Delaware Basin.

Negative

• Loss from continuing operations excluding impairments was $6.7 million, slightly worse than the prior year's $6.6 million.
• Wholesale propane and crude oil logistics businesses negatively affected by warmer weather and commodity price fluctuations.

TULSA, Okla.--(BUSINESS WIRE)-- NGL Energy Partners LP (NYSE:NGL) (“NGL,” “our,” “we,” or the “Partnership”) today reported its third quarter Fiscal 2022 results. Highlights for the quarter include:

• Loss from continuing operations for the third quarter of Fiscal 2022 of $19.0 million, compared to a loss from continuing operations of $380.4 million for the third quarter of Fiscal 2021, primarily a result of a $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”). Excluding losses on the disposal or impairment of assets, loss from continuing operations for the third quarter of Fiscal 2022 was $6.7 million, compared to a loss from continuing operations of $6.6 million for the third quarter of Fiscal 2021
• Adjusted EBITDA¹ from continuing operations for the third quarter of Fiscal 2022 of $147.7 million, compared to $125.0 million for the third quarter of Fiscal 2021
• Produced water volumes processed increased approximately 30% versus the same period in the prior year, with volumes growing 4.5% versus the preceding quarter
• Announced collaboration with XRI Holdings, LLC (“XRI”) to advance full cycle produced water management across operations in the Delaware Basin and to support increasing demand for sustainable use of produced water in completion activities
• Updated guidance for Fiscal 2022 Adjusted EBITDA to $550 million - $560 million and expected full year capital expenditures to $125 million -$130 million, net of anticipated reimbursements from insurance claims²

“We continue to see growth in our Water Solutions segment due to increased customer activities as well as additional agreements negotiated with producer customers. Additionally, the collaboration we previously announced with XRI will allow us to service produced water reuse and recycle demand in the Delaware Basin while focusing on environmentally-friendly solutions for our customers” stated Mike Krimbill, NGL’s CEO. “While warmer than normal weather and commodity price movements affected our wholesale propane and crude oil logistics businesses, our butane and refined products businesses performed quite well. Looking towards our fourth fiscal quarter, we continue to see produced water volumes increasing, winter weather has finally arrived and crude oil prices have increased, which will benefit us going forward” 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.
² See the “Forward-Looking Statements” section of this release for more information.

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
		December 31, 2021								December 31, 2020
		Operating Income (Loss)				Adjusted EBITDA				Operating Income (Loss)				Adjusted EBITDA
		(in thousands)
Water Solutions		$	19,851			$	82,744			$	15,821			$	65,554
Crude Oil Logistics			21,291				29,764				(382,192	)			26,332
Liquids Logistics			23,158				47,979				32,438				41,824
Corporate and Other			(15,190	)			(12,747	)			(12,374	)			(8,670	)
Total		$	49,110			$	147,740			$	(346,307	)		$	125,040

Water Solutions

Operating income for the Water Solutions segment increased $4.0 million for the quarter ended December 31, 2021, compared to the quarter ended December 31, 2020. The Partnership processed approximately 1.84 million barrels of water per day during the quarter ended December 31, 2021, a 30.3% increase when compared to approximately 1.41 million barrels of water per day processed during the quarter ended December 31, 2020, due to higher production volumes primarily in the Delaware Basin driven by the recovery in crude oil prices from the prior year.

Revenues from recovered crude oil, including the impact from realized skim oil hedges, totaled $19.5 million for the quarter ended December 31, 2021, an increase of $8.2 million from the prior year period. This increase was due to increased skim oil barrels sold due to higher produced water volumes processed and higher realized crude oil prices.

Operating expenses in the Water Solutions segment decreased to $0.26 per barrel compared to $0.27 per barrel in the comparative quarter last year primarily due to continued efforts to reduce operating costs per barrel along with higher produced water volumes processed.

Crude Oil Logistics

Operating income for the third quarter of Fiscal 2022 increased compared to the third quarter of Fiscal 2021 primarily due to an impairment charge of $383.6 million in the prior year related to the write down of goodwill of the Extraction transportation agreement (as part of its bankruptcy). Excluding impairments, operating income increased $22.5 million due primarily to increased margins, excluding the impact of derivatives. Our margins continue to benefit from high crude oil prices, which increase the contracted rates with certain producers.

During the three months ended December 31, 2021, financial volumes on the Grand Mesa Pipeline averaged approximately 83,000 barrels per day, compared to approximately 69,000 barrels per day for the three months ended December 31, 2020. This increase was due primarily to the new supply agreement signed with Extraction (now known as Civitas Resources, Inc.) after they exited bankruptcy.

Liquids Logistics

Operating income for the Liquids Logistics segment decreased $9.3 million for the quarter ended December 31, 2021, compared to the quarter ended December 31, 2020. This decrease is mainly related to lower product margins on propane due to reduced demand and falling prices during the last two months of the current quarter, lower service revenues and higher compensation expenses. The decrease was offset by higher product margins for butane and refined products as a result of tighter supply markets for butane, extended refinery downtime in certain refined products markets and favorable supply contracts.

Propane volumes decreased by approximately 87.3 million gallons, or 22.9%, compared to the quarter ended December 31, 2020, as demand decreased due to the unseasonably warm weather. Butane volumes decreased by approximately 32.5 million gallons, or 15.3%, compared to the quarter ended December 31, 2020, due to the tight supply market and an increase in demand for exports.

Corporate and Other

Corporate and Other expenses increased from the comparable prior year period primarily due to increased incentive compensation and outside consulting fees, which were offset by lower legal expenses.

Capitalization and Liquidity

Total liquidity (cash plus available capacity on our asset-based revolving credit facility) was approximately $182.5 million as of December 31, 2021. Borrowings on the Partnership’s revolving credit facility totaled approximately $156.0 million. The balance increase from March 31, 2021 was primarily due to increases in working capital balances driven by increased inventory volumes and higher commodity prices.

The Partnership is in compliance with all of its debt covenants and has no significant debt maturities before November 2023. The Partnership expects to generate operational free cash flow in Fiscal Year 2022, which will be utilized to repay outstanding indebtedness and improve leverage.

Third Quarter Conference Call Information

A conference call to discuss NGL’s results of operations is scheduled for 4:00 pm Central Time on Wednesday, February 9, 2022. Analysts, investors, and other interested parties may join the webcast via the event link: https://www.webcaster4.com/Webcast/Page/2808/44432 or by dialing (888) 506-0062 and providing access code: 294091. 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 44432.

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 as 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 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 records a realized gain or loss. NGL does not draw such a distinction between realized and unrealized gains and losses on derivatives of 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 NGL is 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 Condensed Consolidated Balance Sheets (in Thousands, except unit amounts)
	December 31, 2021				March 31, 2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	5,456			$	4,829
Accounts receivable-trade, net of allowance for expected credit losses of $2,227 and $2,192, respectively		1,042,641				725,943
Accounts receivable-affiliates		8,824				9,435
Inventories		333,923				158,467
Prepaid expenses and other current assets		131,696				109,164
Total current assets		1,522,540				1,007,838
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $887,840 and $776,279, respectively		2,483,876				2,706,853
GOODWILL		744,439				744,439
INTANGIBLE ASSETS, net of accumulated amortization of $546,221 and $517,518, respectively		1,152,198				1,262,613
INVESTMENTS IN UNCONSOLIDATED ENTITIES		21,263				22,719
OPERATING LEASE RIGHT-OF-USE ASSETS		122,976				152,146
OTHER NONCURRENT ASSETS		47,479				50,733
Total assets	$	6,094,771			$	5,947,341
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable-trade	$	973,471			$	679,868
Accounts payable-affiliates		260				119
Accrued expenses and other payables		165,031				170,400
Advance payments received from customers		16,240				11,163
Current maturities of long-term debt		2,328				2,183
Operating lease obligations		43,822				47,070
Total current liabilities		1,201,152				910,803
LONG-TERM DEBT, net of debt issuance costs of $46,156 and $55,555, respectively, and current maturities		3,411,757				3,319,030
OPERATING LEASE OBLIGATIONS		78,628				103,637
OTHER NONCURRENT LIABILITIES		108,422				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, 130,114 and 129,724 notional units, respectively		(52,422	)			(52,189	)
Limited partners, representing a 99.9% interest, 129,984,138 and 129,593,939 common units issued and outstanding, respectively		430,358				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		(314	)			(266	)
Noncontrolling interests		17,734				69,471
Total equity		743,715				948,159
Total liabilities and equity	$	6,094,771			$	5,947,341

NGL ENERGY PARTNERS LP AND SUBSIDIARIES Unaudited Condensed Consolidated Statements of Operations (in Thousands, except unit and per unit amounts)
		Three Months Ended December 31,								Nine Months Ended December 31,
		2021				2020				2021				2020
REVENUES:
Water Solutions		$	130,653			$	98,925			$	397,089			$	275,668
Crude Oil Logistics			607,203				485,289				1,715,657				1,228,169
Liquids Logistics			1,434,020				877,491				3,301,922				1,969,813
Other			—				314				—				942
Total Revenues			2,171,876				1,462,019				5,414,668				3,474,592
COST OF SALES:
Water Solutions			5,030				3,280				21,791				8,559
Crude Oil Logistics			556,531				448,933				1,591,877				1,053,261
Liquids Logistics			1,388,760				826,211				3,187,039				1,857,633
Other			—				455				—				1,363
Total Cost of Sales			1,950,321				1,278,879				4,800,707				2,920,816
OPERATING COSTS AND EXPENSES:
Operating			72,807				61,427				207,610				182,468
General and administrative			18,925				16,044				46,149				50,677
Depreciation and amortization			68,480				78,200				222,145				249,655
Loss on disposal or impairment of assets, net			12,233				373,776				93,463				391,752
Operating Income (Loss)			49,110				(346,307	)			44,594				(320,776	)
OTHER INCOME (EXPENSE):
Equity in earnings of unconsolidated entities			119				344				765				1,134
Interest expense			(68,379	)			(47,252	)			(204,004	)			(138,148	)
Gain on early extinguishment of liabilities, net			9				11,190				1,131				44,292
Other income, net			24				440				2,003				3,060
Loss From Continuing Operations Before Income Taxes			(19,117	)			(381,585	)			(155,511	)			(410,438	)
INCOME TAX BENEFIT			135				1,162				820				2,237
Loss From Continuing Operations			(18,982	)			(380,423	)			(154,691	)			(408,201	)
Loss From Discontinued Operations, net of Tax			—				(107	)			—				(1,746	)
Net Loss			(18,982	)			(380,530	)			(154,691	)			(409,947	)
LESS: NET LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTERESTS			63				34				(705	)			(185	)
NET LOSS ATTRIBUTABLE TO NGL ENERGY PARTNERS LP		$	(18,919	)		$	(380,496	)		$	(155,396	)		$	(410,132	)
NET LOSS FROM CONTINUING OPERATIONS ALLOCATED TO COMMON UNITHOLDERS		$	(45,233	)		$	(403,755	)		$	(232,361	)		$	(477,503	)
NET LOSS FROM DISCONTINUED OPERATIONS ALLOCATED TO COMMON UNITHOLDERS		$	—			$	(107	)		$	—			$	(1,744	)
NET LOSS ALLOCATED TO COMMON UNITHOLDERS		$	(45,233	)		$	(403,862	)		$	(232,361	)		$	(479,247	)
BASIC LOSS PER COMMON UNIT
Loss From Continuing Operations		$	(0.35	)		$	(3.13	)		$	(1.79	)		$	(3.71	)
Loss From Discontinued Operations, net of Tax		$	—			$	—			$	—			$	(0.01	)
Net Loss		$	(0.35	)		$	(3.13	)		$	(1.79	)		$	(3.72	)
DILUTED LOSS PER COMMON UNIT
Loss From Continuing Operations		$	(0.35	)		$	(3.13	)		$	(1.79	)		$	(3.71	)
Loss From Discontinued Operations, net of Tax		$	—			$	—			$	—			$	(0.01	)
Net Loss		$	(0.35	)		$	(3.13	)		$	(1.79	)		$	(3.72	)
BASIC WEIGHTED AVERAGE COMMON UNITS OUTSTANDING			129,810,245				128,991,414				129,666,303				128,845,214
DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING			129,810,245				128,991,414				129,666,303				128,845,214

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:
		Three Months Ended December 31,								Nine Months Ended December 31,
		2021				2020				2021				2020
		(in thousands)
Net loss		$	(18,982	)		$	(380,530	)		$	(154,691	)		$	(409,947	)
Less: Net loss (income) attributable to noncontrolling interests			63				34				(705	)			(185	)
Net loss attributable to NGL Energy Partners LP			(18,919	)			(380,496	)			(155,396	)			(410,132	)
Interest expense			68,395				47,253				204,037				138,159
Income tax benefit			(135	)			(1,163	)			(820	)			(2,291	)
Depreciation and amortization			68,452				77,531				221,352				247,555
EBITDA			117,793				(256,875	)			269,173				(26,709	)
Net unrealized (gains) losses on derivatives			(13,500	)			16,529				(48,254	)			47,657
CMA Differential Roll net losses (gains) (1)			23,872				—				60,987				—
Inventory valuation adjustment (2)			1,145				(786	)			1,912				1,393
Lower of cost or net realizable value adjustments			2,921				321				2,636				(33,213	)
Loss on disposal or impairment of assets, net			12,035				373,777				93,268				392,924
Gain on early extinguishment of liabilities, net			(9	)			(11,190	)			(1,168	)			(44,292	)
Equity-based compensation expense (3)			749				1,120				(1,044	)			5,678
Acquisition expense (4)			(36	)			589				67				915
Other (5)			2,770				1,448				7,525				9,049
Adjusted EBITDA		$	147,740			$	124,933			$	385,102			$	353,402
Adjusted EBITDA - Discontinued Operations (6)		$	—			$	(107	)		$	—			$	(591	)
Adjusted EBITDA - Continuing Operations		$	147,740			$	125,040			$	385,102			$	353,993
Less: Cash interest expense (7)			64,049				43,993				191,137				127,960
Less: Income tax benefit			(135	)			(1,162	)			(820	)			(2,237	)
Less: Maintenance capital expenditures			13,330				6,269				38,054				22,267
Less: CMA Differential Roll (8)			15,354				—				49,254				—
Less: Preferred unit distributions paid			—				23,770				—				53,908
Less: Other (9)			—				9				—				9
Distributable Cash Flow - Continuing Operations		$	55,142			$	52,161			$	107,477			$	152,086

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(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 unaudited condensed consolidated financial statements included in the Partnership’s Quarterly Report on Form 10-Q for the quarter ended December 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 unaudited condensed 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 and nine months ended December 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.
(6)		Amounts include the operations of TPSL, Gas Blending and Mid-Con.
(7)		Amounts represent interest expense payable in cash for the period presented, excluding changes in the accrued interest balance.
(8)		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.
(9)		Amounts represents cash paid to settle asset retirement obligations.

ADJUSTED EBITDA RECONCILIATION BY SEGMENT
	Three Months Ended December 31, 2021
	Water Solutions				Crude Oil Logistics				Liquids Logistics				Corporate and Other				Consolidated
	(in thousands)
Operating income (loss)	$	19,851			$	21,291			$	23,158			$	(15,190	)		$	49,110
Depreciation and amortization		50,815				12,166				3,756				1,743				68,480
Amortization recorded to cost of sales		—				—				69				—				69
Net unrealized losses (gains) on derivatives		1,758				(32,201	)			16,943				—				(13,500	)
CMA Differential Roll net losses (gains)		—				23,872				—				—				23,872
Inventory valuation adjustment		—				—				1,145				—				1,145
Lower of cost or net realizable value adjustments		—				—				2,921				—				2,921
Loss (gain) on disposal or impairment of assets, net		9,997				2,262				(26	)			—				12,233
Equity-based compensation expense		—				—				—				749				749
Acquisition expense		4				—				—				(40	)			(36	)
Other (expense) income, net		(6	)			—				(31	)			61				24
Adjusted EBITDA attributable to unconsolidated entities		384				—				10				(70	)			324
Adjusted EBITDA attributable to noncontrolling interest		(419	)			—				(3	)			—				(422	)
Other		360				2,374				37				—				2,771
Adjusted EBITDA	$	82,744			$	29,764			$	47,979			$	(12,747	)		$	147,740

	Three Months Ended December 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 income (loss)	$	15,821			$	(382,192	)		$	32,438			$	(12,374	)		$	(346,307	)		$	—			$	(346,307	)
Depreciation and amortization		53,327				16,513				6,976				1,384				78,200				—				78,200
Amortization recorded to cost of sales		—				—				77				—				77				—				77
Net unrealized losses on derivatives		5,800				7,878				2,851				—				16,529				—				16,529
Inventory valuation adjustment		—				—				(802	)			—				(802	)			—				(802	)
Lower of cost or net realizable value adjustments		—				(166	)			502				—				336				—				336
(Gain) loss on disposal or impairment of assets, net		(9,967	)			383,251				(43	)			535				373,776				—				373,776
Equity-based compensation expense		—				—				—				1,120				1,120				—				1,120
Acquisition expense		4				—				—				585				589				—				589
Other income, net		1				2				341				96				440				—				440
Adjusted EBITDA attributable to unconsolidated entities		573				—				3				(16	)			560				—				560
Adjusted EBITDA attributable to noncontrolling interest		(389	)			—				(544	)			—				(933	)			—				(933	)
Other		384				1,046				25				—				1,455				—				1,455
Discontinued operations		—				—				—				—				—				(107	)			(107	)
Adjusted EBITDA	$	65,554			$	26,332			$	41,824			$	(8,670	)		$	125,040			$	(107	)		$	124,933

	Nine Months Ended December 31, 2021
	Water Solutions				Crude Oil Logistics				Liquids Logistics				Corporate and Other				Consolidated
	(in thousands)
Operating income (loss)	$	60,206			$	37,941			$	(18,790	)		$	(34,763	)		$	44,594
Depreciation and amortization		164,466				37,029				15,409				5,241				222,145
Amortization recorded to cost of sales		—				—				213				—				213
Net unrealized losses (gains) on derivatives		6,845				(53,808	)			(1,291	)			—				(48,254	)
CMA Differential Roll net losses (gains)		—				60,987				—				—				60,987
Inventory valuation adjustment		—				—				1,912				—				1,912
Lower of cost or net realizable value adjustments		—				(11	)			2,647				—				2,636
Loss on disposal or impairment of assets, net		19,450				2,206				71,807				—				93,463
Equity-based compensation expense		—				—				—				(1,044	)			(1,044	)
Acquisition expense		4				—				—				63				67
Other income, net		616				350				627				410				2,003
Adjusted EBITDA attributable to unconsolidated entities		1,559				—				(9	)			(190	)			1,360
Adjusted EBITDA attributable to noncontrolling interest		(1,987	)			—				(529	)			—				(2,516	)
Other		520				6,994				22				—				7,536
Adjusted EBITDA	$	251,679			$	91,688			$	72,018			$	(30,283	)		$	385,102

	Nine Months Ended December 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	$	(13,503	)		$	(310,633	)		$	51,338			$	(47,978	)		$	(320,776	)		$	—			$	(320,776	)
Depreciation and amortization		173,680				50,540				22,158				3,277				249,655				—				249,655
Amortization recorded to cost of sales		—				—				230				—				230				—				230
Net unrealized losses on derivatives		23,525				19,199				4,933				—				47,657				—				47,657
Inventory valuation adjustment		—				—				1,399				—				1,399				—				1,399
Lower of cost or net realizable value adjustments		—				(29,245	)			(3,974	)			—				(33,219	)			—				(33,219	)
(Gain) loss on disposal or impairment of assets, net		(3,415	)			384,391				4				10,772				391,752				—				391,752
Equity-based compensation expense		—				—				—				5,678				5,678				—				5,678
Acquisition expense		17				—				—				898				915				—				915
Other income, net		259				1,515				1,004				282				3,060				—				3,060
Adjusted EBITDA attributable to unconsolidated entities		1,883				—				(11	)			(143	)			1,729				—				1,729
Adjusted EBITDA attributable to noncontrolling interest		(1,317	)			—				(1,816	)			—				(3,133	)			—				(3,133	)
Intersegment transactions (1)		—				—				(27	)			—				(27	)			—				(27	)
Other		2,398				6,600				75				—				9,073				—				9,073
Discontinued operations		—				—				—				—				—				(591	)			(591	)
Adjusted EBITDA	$	183,527			$	122,367			$	75,313			$	(27,214	)		$	353,993			$	(591	)		$	353,402

_____________________

(1)

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

OPERATIONAL DATA (Unaudited)
	Three Months Ended				Nine Months Ended
	December 31,				December 31,
	2021		2020		2021		2020
	(in thousands, except per day amounts)
Water Solutions:
Produced water processed (barrels per day)
Delaware Basin	1,551,621		1,216,096		1,488,529		1,127,679
Eagle Ford Basin	110,243		72,951		99,298		83,151
DJ Basin	159,332		96,383		142,606		114,256
Other Basins	18,351		26,532		25,516		28,359
Total	1,839,547		1,411,962		1,755,949		1,353,445
Recycled water (barrels per day)	52,854		95,903		76,319		43,008
Total Produced Water Processed and/or Sold (barrels per day)	1,892,401		1,507,865		1,832,268		1,396,453
Skim oil sold (barrels per day)	2,678		2,004		2,667		1,771
Crude Oil Logistics:
Crude oil sold (barrels)	7,515		10,733		23,027		30,203
Crude oil transported on owned pipelines (barrels)	7,590		6,368		21,961		26,836
Crude oil storage capacity - owned and leased (barrels) (1)					5,232		5,239
Crude oil inventory (barrels) (1)					1,295		1,019
Liquids Logistics:
Refined products sold (gallons)	203,898		214,132		586,136		646,349
Propane sold (gallons)	294,282		381,590		644,883		886,572
Butane sold (gallons)	180,191		212,697		427,646		475,655
Other products sold (gallons)	99,915		122,645		290,078		351,591
Natural gas liquids and refined products storage capacity - owned and leased (gallons) (1)					168,189		426,962
Refined products inventory (gallons) (1)					1,314		1,190
Propane inventory (gallons) (1)					125,235		128,568
Butane inventory (gallons) (1)					45,129		31,847
Other products inventory (gallons) (1)					23,491		21,326

_____________________

(1)

Information is presented as of December 31, 2021 and December 31, 2020, respectively.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220208006296/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's earnings for Q3 Fiscal 2022?

NGL reported a loss from continuing operations of $19.0 million for Q3 Fiscal 2022.

How did NGL's Adjusted EBITDA change in Q3 Fiscal 2022?

NGL's Adjusted EBITDA increased to $147.7 million in Q3 Fiscal 2022, compared to $125.0 million in Q3 Fiscal 2021.

What is NGL's updated guidance for Adjusted EBITDA for Fiscal 2022?

NGL updated its guidance for Adjusted EBITDA to between $550 million and $560 million for Fiscal 2022.

How much did produced water volumes increase for NGL in Q3 Fiscal 2022?

Produced water volumes processed increased by approximately 30% year-over-year for NGL in Q3 Fiscal 2022.

What impact did the weather have on NGL's logistics businesses?

NGL's wholesale propane and crude oil logistics businesses were negatively affected by warmer than normal weather.