NGL Energy Partners LP Announces Third Quarter Fiscal 2024 Financial Results
- None.
- None.
Insights
The reported net income for NGL Energy Partners LP in the third quarter of Fiscal 2024 indicates a decline from the previous year's comparable quarter. This decline is noteworthy, considering it includes a one-time income from a dispute settlement in the prior year's figures. The reduction in net income could be attributed to various operational factors, which would require a detailed analysis of the segment performances and the impact of the broader market conditions on the company's financials.
Adjusted EBITDA, a common metric used to assess a company's operating performance and cash flow, also shows a decrease year-over-year. This could signal underlying operational challenges or a change in the company's cost structure. The reported leverage ratio improvement, from 5.28 to 4.26 times, is a positive development, reflecting the company's effective debt management and potential reduction in financial risk. This reduction in leverage is likely to be viewed favorably by investors and credit rating agencies.
The announcement of an open season for the Grand Mesa Pipeline resulting in a new shipper contract and the expected increase in total asset sales forecast for Fiscal 2025 could be seen as strategic moves to strengthen the company's core operations and future revenue streams. Additionally, the redemption of senior notes and the closure of a substantial debt refinancing transaction may be interpreted as proactive capital structure optimization. These actions could potentially enhance the company's financial flexibility and reduce future interest expenses.
From a market perspective, the expansion of the Water Solutions business and the completion of the Lea County Express Pipeline System expansion signify a strategic investment in infrastructure that is expected to meet the demand of an investment-grade oil and gas producer. The minimum volume commitment contract underlying this expansion provides a stable cash flow outlook for the segment, which could be a positive indicator for long-term revenue stability.
The company's reaffirmation of its Fiscal 2024 Adjusted EBITDA guidance suggests confidence in its business operations and financial projections, which could influence investor sentiment. However, the market will also consider the broader industry trends, such as commodity price fluctuations and regulatory changes, which could impact the company's performance in the energy sector.
From a legal standpoint, the intention to redeem senior unsecured and secured notes ahead of their maturity dates is a significant move that can affect the rights and expectations of the note holders. Such redemptions often require careful navigation of the covenants and terms outlined in the indenture agreements. The successful execution of these redemptions without legal complications would demonstrate the company's adherence to contractual obligations and its commitment to reducing its debt obligations, potentially leading to an improved credit profile.
-
Net income for the third quarter of Fiscal 2024 of
$45.8 million $59.0 million $29.5 million -
Adjusted EBITDA(1) for the third quarter of Fiscal 2024 of
$151.7 million $193.3 million - Total leverage at the end of the quarter was 4.26 times, versus 5.28 times at the end of the third quarter of Fiscal 2023
- On December 6, 2023, we announced an open season for the Grand Mesa Pipeline. This open season ended at the close of business on January 5, 2024, and resulted in a new shipper with a five-year minimum volume commitment contract.
-
NGL now expects total asset sales in Fiscal 2025 of
$150 million $100 million
Highlights for the period subsequent to December 31, 2023 included:
- On January 19, 2024, we delivered notice to the holders of our 2025 and 2026 senior unsecured notes and to the holders of our 2026 senior secured notes of our intention to redeem all of the existing notes. The 2026 senior secured notes were redeemed on February 6, 2024, and the 2025 and 2026 senior unsecured notes will be redeemed on February 20, 2024 and April 14, 2024, respectively.
- On January 22, 2024, we announced that our Water Solutions business is commencing expansion of its Lea County Express Pipeline System from a capacity of 140,000 barrels of water per day to 340,000 barrels per day in 2024, with the ability to expand the capacity to 500,000 barrels of water per day. This project is fully underwritten by a recently executed minimum volume commitment contract that includes an acreage dedication extension with an investment grade oil and gas producer. We expect the pipeline expansion to be completed during the second half of our 2025 fiscal year.
-
On February 2, 2024, we closed a debt refinancing transaction of
$2.9 billion $2.2 billion $900.0 million 8.125% senior secured notes due 2029 and$1.3 billion 8.375% senior secured notes due 2032. We also entered into a new seven-year$700.0 million -
On February 6, 2024, the Board of Directors of our general partner declared a distribution of
50% of the outstanding arrearages earned for Class B, Class C, and Class D preferred unit holders through December 31, 2023. The distribution will be made on February 27, 2024 to the holders of record at the close of trading on February 16, 2024.
“The Partnership has achieved many significant accomplishments since our previous quarter ended September 30, 2023. First, Crude Oil Logistics completed a successful open season on Grand Meas Pipeline. Second, Water Solutions is expanding its Lea County Express Pipeline system, which is fully underwritten by an executed minimum volume commitment contract that includes an acreage dedication extension with an investment grade oil and gas producer. Third, we completed a
| _______________________________________ | |
(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.. |
Quarterly Results of Operations
The following table summarizes operating income (loss) and Adjusted EBITDA(1) by reportable segment for the periods indicated:
|
|
Quarter Ended |
|||||||||||||
|
|
December 31, 2023 |
|
December 31, 2022 |
|||||||||||
|
|
Operating Income (Loss) |
|
Adjusted EBITDA(1) |
|
Operating Income (Loss) |
|
Adjusted EBITDA(1) |
|||||||
|
|
(in thousands) |
|||||||||||||
Water Solutions |
|
$ |
74,270 |
|
|
$ |
121,285 |
|
|
$ |
59,721 |
|
|
$ |
121,712 |
Crude Oil Logistics |
|
|
17,010 |
|
|
|
17,044 |
|
|
|
35,096 |
|
|
|
33,260 |
Liquids Logistics |
|
|
22,449 |
|
|
|
26,302 |
|
|
|
20,513 |
|
|
|
18,763 |
Corporate and Other |
|
|
(11,940 |
) |
|
|
(12,961 |
) |
|
|
(12,660 |
) |
|
|
19,521 |
Total |
|
$ |
101,789 |
|
|
$ |
151,670 |
|
|
$ |
102,670 |
|
|
$ |
193,256 |
Water Solutions
Operating income for the Water Solutions segment increased
Revenues from recovered skim oil, including the impact from realized skim oil hedges, totaled
Operating expenses in the Water Solutions segment decreased
Crude Oil Logistics
Operating income for the Crude Oil Logistics segment decreased
Liquids Logistics
Operating income for the Liquids Logistics segment increased by
Corporate and Other
The operating loss for Corporate and Other was lower by
Capitalization and Liquidity
Total liquidity (cash plus available capacity on our asset-based revolving credit facility (“ABL Facility”)) was approximately
The Partnership is in compliance with all of its debt covenants and has no upcoming debt maturities.
Third Quarter Conference Call Information
A conference call to discuss NGL’s results of operations is scheduled for 4:00 pm Central Time on Thursday, February 8, 2024. Analysts, investors, and other interested parties may join the webcast via the event link: https://www.webcaster4.com/Webcast/Page/2808/49742 or by dialing (888) 506-0062 and providing access code: 847654. 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 49742.
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, acquisition expense, revaluation of liabilities, certain legal settlements and other. We also include in Adjusted EBITDA certain inventory valuation adjustments related to certain refined products businesses within our Liquids Logistics segment as discussed below. 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.
Other than for certain businesses within our Liquids Logistics segment, 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. We do not draw such 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 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 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
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 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
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
For further information, visit the Partnership’s website at www.nglenergypartners.com.
NGL ENERGY PARTNERS LP AND SUBSIDIARIES
|
|||||||
|
December 31, 2023 |
|
March 31, 2023 |
||||
ASSETS |
|
|
|
||||
CURRENT ASSETS: |
|
|
|
||||
Cash and cash equivalents |
$ |
738 |
|
|
$ |
5,431 |
|
Accounts receivable-trade, net of allowance for expected credit losses of |
|
999,503 |
|
|
|
1,033,956 |
|
Accounts receivable-affiliates |
|
15,459 |
|
|
|
12,362 |
|
Inventories |
|
201,575 |
|
|
|
142,607 |
|
Prepaid expenses and other current assets |
|
123,292 |
|
|
|
98,089 |
|
Total current assets |
|
1,340,567 |
|
|
|
1,292,445 |
|
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of |
|
2,137,386 |
|
|
|
2,223,380 |
|
GOODWILL |
|
707,583 |
|
|
|
712,364 |
|
INTANGIBLE ASSETS, net of accumulated amortization of |
|
999,636 |
|
|
|
1,058,668 |
|
INVESTMENTS IN UNCONSOLIDATED ENTITIES |
|
19,535 |
|
|
|
21,090 |
|
OPERATING LEASE RIGHT-OF-USE ASSETS |
|
101,549 |
|
|
|
90,220 |
|
OTHER NONCURRENT ASSETS |
|
56,231 |
|
|
|
57,977 |
|
Total assets |
$ |
5,362,487 |
|
|
$ |
5,456,144 |
|
LIABILITIES AND EQUITY |
|
|
|
||||
CURRENT LIABILITIES: |
|
|
|
||||
Accounts payable-trade |
$ |
831,991 |
|
|
$ |
927,591 |
|
Accounts payable-affiliates |
|
28 |
|
|
|
65 |
|
Accrued expenses and other payables |
|
195,427 |
|
|
|
133,616 |
|
Advance payments received from customers |
|
27,727 |
|
|
|
14,699 |
|
Operating lease obligations |
|
32,839 |
|
|
|
34,166 |
|
Total current liabilities |
|
1,088,012 |
|
|
|
1,110,137 |
|
LONG-TERM DEBT, net of debt issuance costs of |
|
2,683,918 |
|
|
|
2,857,805 |
|
OPERATING LEASE OBLIGATIONS |
|
70,830 |
|
|
|
58,450 |
|
OTHER NONCURRENT LIABILITIES |
|
107,806 |
|
|
|
111,226 |
|
|
|
|
|
||||
CLASS D |
|
551,097 |
|
|
|
551,097 |
|
|
|
|
|
||||
EQUITY: |
|
|
|
||||
General partner, representing a |
|
(52,562 |
) |
|
|
(52,551 |
) |
Limited partners, representing a |
|
549,600 |
|
|
|
455,564 |
|
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 |
|
(457 |
) |
|
|
(450 |
) |
Noncontrolling interests |
|
15,884 |
|
|
|
16,507 |
|
Total equity |
|
860,824 |
|
|
|
767,429 |
|
Total liabilities and equity |
$ |
5,362,487 |
|
|
$ |
5,456,144 |
|
NGL ENERGY PARTNERS LP AND SUBSIDIARIES
|
||||||||||||||||
|
|
Three Months Ended December 31, |
|
Nine Months Ended December 31, |
||||||||||||
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
REVENUES: |
|
|
|
|
|
|
|
|
||||||||
Water Solutions |
|
$ |
179,301 |
|
|
$ |
180,242 |
|
|
$ |
557,847 |
|
|
$ |
511,231 |
|
Crude Oil Logistics |
|
|
425,294 |
|
|
|
531,613 |
|
|
|
1,379,397 |
|
|
|
1,971,767 |
|
Liquids Logistics |
|
|
1,265,182 |
|
|
|
1,427,385 |
|
|
|
3,389,733 |
|
|
|
4,163,072 |
|
Total Revenues |
|
|
1,869,777 |
|
|
|
2,139,240 |
|
|
|
5,326,977 |
|
|
|
6,646,070 |
|
COST OF SALES: |
|
|
|
|
|
|
|
|
||||||||
Water Solutions |
|
|
(2,573 |
) |
|
|
2,534 |
|
|
|
7,420 |
|
|
|
13,679 |
|
Crude Oil Logistics |
|
|
386,418 |
|
|
|
471,891 |
|
|
|
1,266,644 |
|
|
|
1,808,460 |
|
Liquids Logistics |
|
|
1,224,059 |
|
|
|
1,385,943 |
|
|
|
3,290,784 |
|
|
|
4,057,360 |
|
Corporate and Other |
|
|
(1,772 |
) |
|
|
— |
|
|
|
(939 |
) |
|
|
— |
|
Total Cost of Sales |
|
|
1,606,132 |
|
|
|
1,860,368 |
|
|
|
4,563,909 |
|
|
|
5,879,499 |
|
OPERATING COSTS AND EXPENSES: |
|
|
|
|
|
|
|
|
||||||||
Operating |
|
|
79,115 |
|
|
|
81,353 |
|
|
|
233,185 |
|
|
|
237,371 |
|
General and administrative |
|
|
17,934 |
|
|
|
17,216 |
|
|
|
55,721 |
|
|
|
50,601 |
|
Depreciation and amortization |
|
|
65,597 |
|
|
|
69,327 |
|
|
|
200,102 |
|
|
|
204,105 |
|
(Gain) loss on disposal or impairment of assets, net |
|
|
(790 |
) |
|
|
8,306 |
|
|
|
14,221 |
|
|
|
15,791 |
|
Operating Income |
|
|
101,789 |
|
|
|
102,670 |
|
|
|
259,839 |
|
|
|
258,703 |
|
OTHER INCOME (EXPENSE): |
|
|
|
|
|
|
|
|
||||||||
Equity in earnings of unconsolidated entities |
|
|
838 |
|
|
|
1,213 |
|
|
|
1,780 |
|
|
|
3,094 |
|
Interest expense |
|
|
(57,221 |
) |
|
|
(75,920 |
) |
|
|
(175,370 |
) |
|
|
(211,528 |
) |
Gain on early extinguishment of liabilities, net |
|
|
— |
|
|
|
2,667 |
|
|
|
6,871 |
|
|
|
6,808 |
|
Other income, net |
|
|
515 |
|
|
|
28,100 |
|
|
|
1,131 |
|
|
|
28,731 |
|
Income Before Income Taxes |
|
|
45,921 |
|
|
|
58,730 |
|
|
|
94,251 |
|
|
|
85,808 |
|
INCOME TAX (EXPENSE) BENEFIT |
|
|
(154 |
) |
|
|
252 |
|
|
|
(636 |
) |
|
|
(113 |
) |
Net Income |
|
|
45,767 |
|
|
|
58,982 |
|
|
|
93,615 |
|
|
|
85,695 |
|
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
|
|
(85 |
) |
|
|
(448 |
) |
|
|
(604 |
) |
|
|
(790 |
) |
NET INCOME ATTRIBUTABLE TO NGL ENERGY PARTNERS LP |
|
$ |
45,682 |
|
|
$ |
58,534 |
|
|
$ |
93,011 |
|
|
$ |
84,905 |
|
NET INCOME (LOSS) ALLOCATED TO COMMON UNITHOLDERS - BASIC |
|
$ |
10,244 |
|
|
$ |
26,007 |
|
|
$ |
(10,947 |
) |
|
$ |
(5,571 |
) |
NET INCOME (LOSS) ALLOCATED TO COMMON UNITHOLDERS - DILUTED |
|
$ |
10,244 |
|
|
$ |
26,123 |
|
|
$ |
(10,947 |
) |
|
$ |
(5,571 |
) |
BASIC INCOME (LOSS) PER COMMON UNIT |
|
$ |
0.08 |
|
|
$ |
0.20 |
|
|
$ |
(0.08 |
) |
|
$ |
(0.04 |
) |
DILUTED INCOME (LOSS) PER COMMON UNIT |
|
$ |
0.08 |
|
|
$ |
0.19 |
|
|
$ |
(0.08 |
) |
|
$ |
(0.04 |
) |
BASIC WEIGHTED AVERAGE COMMON UNITS OUTSTANDING |
|
|
132,220,055 |
|
|
|
131,015,658 |
|
|
|
132,025,268 |
|
|
|
130,802,920 |
|
DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING |
|
|
132,498,734 |
|
|
|
134,485,325 |
|
|
|
132,025,268 |
|
|
|
130,802,920 |
|
EBITDA, ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW RECONCILIATION
|
||||||||||||||||
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 December 31, |
|
Nine Months Ended December 31, |
||||||||||||
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
(in thousands) |
||||||||||||||
Net income |
|
$ |
45,767 |
|
|
$ |
58,982 |
|
|
$ |
93,615 |
|
|
$ |
85,695 |
|
Less: Net income attributable to noncontrolling interests |
|
|
(85 |
) |
|
|
(448 |
) |
|
|
(604 |
) |
|
|
(790 |
) |
Net income attributable to NGL Energy Partners LP |
|
|
45,682 |
|
|
|
58,534 |
|
|
|
93,011 |
|
|
|
84,905 |
|
Interest expense |
|
|
57,274 |
|
|
|
75,934 |
|
|
|
175,452 |
|
|
|
211,573 |
|
Income tax expense (benefit) |
|
|
154 |
|
|
|
(252 |
) |
|
|
636 |
|
|
|
113 |
|
Depreciation and amortization |
|
|
65,582 |
|
|
|
69,308 |
|
|
|
200,005 |
|
|
|
204,025 |
|
EBITDA |
|
|
168,692 |
|
|
|
203,524 |
|
|
|
469,104 |
|
|
|
500,616 |
|
Net unrealized losses (gains) on derivatives |
|
|
47,558 |
|
|
|
4,800 |
|
|
|
56,617 |
|
|
|
(56,930 |
) |
CMA Differential Roll net losses (gains) (1) |
|
|
(64,381 |
) |
|
|
(8,678 |
) |
|
|
(71,285 |
) |
|
|
19,424 |
|
Inventory valuation adjustment (2) |
|
|
709 |
|
|
|
(2,650 |
) |
|
|
(5,391 |
) |
|
|
(6,765 |
) |
Lower of cost or net realizable value adjustments |
|
|
(575 |
) |
|
|
(12,568 |
) |
|
|
3,269 |
|
|
|
(11,711 |
) |
(Gain) loss on disposal or impairment of assets, net |
|
|
(1,107 |
) |
|
|
8,290 |
|
|
|
13,904 |
|
|
|
15,775 |
|
Gain on early extinguishment of liabilities, net |
|
|
— |
|
|
|
(2,667 |
) |
|
|
(6,871 |
) |
|
|
(6,808 |
) |
Equity-based compensation expense |
|
|
214 |
|
|
|
890 |
|
|
|
1,098 |
|
|
|
1,866 |
|
Acquisition expense (3) |
|
|
— |
|
|
|
— |
|
|
|
47 |
|
|
|
— |
|
Other (4) |
|
|
560 |
|
|
|
2,315 |
|
|
|
2,047 |
|
|
|
3,907 |
|
Adjusted EBITDA |
|
$ |
151,670 |
|
|
$ |
193,256 |
|
|
$ |
462,539 |
|
|
$ |
459,374 |
|
Less: Cash interest expense (5) |
|
|
53,042 |
|
|
|
71,751 |
|
|
|
162,936 |
|
|
|
198,972 |
|
Less: Income tax expense (benefit) |
|
|
154 |
|
|
|
(252 |
) |
|
|
636 |
|
|
|
113 |
|
Less: Maintenance capital expenditures |
|
|
8,780 |
|
|
|
11,464 |
|
|
|
41,665 |
|
|
|
41,050 |
|
Less: CMA Differential Roll (6) |
|
|
(9,118 |
) |
|
|
(15,147 |
) |
|
|
(27,165 |
) |
|
|
(13,213 |
) |
Less: Other (7) |
|
|
— |
|
|
|
1 |
|
|
|
222 |
|
|
|
171 |
|
Distributable Cash Flow |
|
$ |
98,812 |
|
|
$ |
125,439 |
|
|
$ |
284,245 |
|
|
$ |
232,281 |
|
| _______________________________________ | |
(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) |
Amounts represent 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 expenses we incurred related to legal and advisory costs associated with acquisitions. |
(4) |
Amounts represent unrealized gains/losses on marketable securities and accretion expense for asset retirement obligations. Also, the amount for the nine months ended December 31, 2022 includes non-cash operating expenses related to our Grand Mesa Pipeline. |
(5) |
Amounts represent interest expense payable in cash, excluding changes in the accrued interest balance. |
(6) |
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. |
(7) |
Amounts represent cash paid to settle asset retirement obligations. |
ADJUSTED EBITDA RECONCILIATION BY SEGMENT |
|||||||||||||||||||
|
Three Months Ended December 31, 2023 |
||||||||||||||||||
|
Water Solutions |
|
Crude Oil Logistics |
|
Liquids Logistics |
|
Corporate and Other |
|
Consolidated |
||||||||||
|
(in thousands) |
||||||||||||||||||
Operating income (loss) |
$ |
74,270 |
|
|
$ |
17,010 |
|
|
$ |
22,449 |
|
|
$ |
(11,940 |
) |
|
$ |
101,789 |
|
Depreciation and amortization |
|
52,643 |
|
|
|
9,545 |
|
|
|
2,438 |
|
|
|
971 |
|
|
|
65,597 |
|
Amortization recorded to cost of sales |
|
— |
|
|
|
— |
|
|
|
65 |
|
|
|
— |
|
|
|
65 |
|
Net unrealized (gains) losses on derivatives |
|
(6,440 |
) |
|
|
51,984 |
|
|
|
3,581 |
|
|
|
(1,567 |
) |
|
|
47,558 |
|
CMA Differential Roll net losses (gains) |
|
— |
|
|
|
(64,381 |
) |
|
|
— |
|
|
|
— |
|
|
|
(64,381 |
) |
Inventory valuation adjustment |
|
— |
|
|
|
— |
|
|
|
709 |
|
|
|
— |
|
|
|
709 |
|
Lower of cost or net realizable value adjustments |
|
— |
|
|
|
785 |
|
|
|
(1,360 |
) |
|
|
— |
|
|
|
(575 |
) |
(Gain) loss on disposal or impairment of assets, net |
|
(478 |
) |
|
|
2,042 |
|
|
|
(1,639 |
) |
|
|
(715 |
) |
|
|
(790 |
) |
Equity-based compensation expense |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
214 |
|
|
|
214 |
|
Other income (expense), net |
|
488 |
|
|
|
1 |
|
|
|
(8 |
) |
|
|
34 |
|
|
|
515 |
|
Adjusted EBITDA attributable to unconsolidated entities |
|
715 |
|
|
|
— |
|
|
|
7 |
|
|
|
42 |
|
|
|
764 |
|
Adjusted EBITDA attributable to noncontrolling interest |
|
(362 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(362 |
) |
Other |
|
449 |
|
|
|
58 |
|
|
|
60 |
|
|
|
— |
|
|
|
567 |
|
Adjusted EBITDA |
$ |
121,285 |
|
|
$ |
17,044 |
|
|
$ |
26,302 |
|
|
$ |
(12,961 |
) |
|
$ |
151,670 |
|
|
Three Months Ended December 31, 2022 |
||||||||||||||||||
|
Water Solutions |
|
Crude Oil Logistics |
|
Liquids Logistics |
|
Corporate and Other |
|
Consolidated |
||||||||||
|
(in thousands) |
||||||||||||||||||
Operating income (loss) |
$ |
59,721 |
|
|
$ |
35,096 |
|
|
$ |
20,513 |
|
|
$ |
(12,660 |
) |
|
$ |
102,670 |
|
Depreciation and amortization |
|
52,591 |
|
|
|
11,664 |
|
|
|
3,417 |
|
|
|
1,655 |
|
|
|
69,327 |
|
Amortization recorded to cost of sales |
|
— |
|
|
|
— |
|
|
|
68 |
|
|
|
— |
|
|
|
68 |
|
Net unrealized (gains) losses on derivatives |
|
— |
|
|
|
(1,810 |
) |
|
|
6,610 |
|
|
|
— |
|
|
|
4,800 |
|
CMA Differential Roll net losses (gains) |
|
— |
|
|
|
(8,678 |
) |
|
|
— |
|
|
|
— |
|
|
|
(8,678 |
) |
Inventory valuation adjustment |
|
— |
|
|
|
— |
|
|
|
(2,650 |
) |
|
|
— |
|
|
|
(2,650 |
) |
Lower of cost or net realizable value adjustments |
|
— |
|
|
|
(3,321 |
) |
|
|
(9,247 |
) |
|
|
— |
|
|
|
(12,568 |
) |
Loss (gain) on disposal or impairment of assets, net |
|
7,959 |
|
|
|
277 |
|
|
|
(1 |
) |
|
|
71 |
|
|
|
8,306 |
|
Equity-based compensation expense |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
890 |
|
|
|
890 |
|
Other income (expense), net |
|
2 |
|
|
|
59 |
|
|
|
(1,481 |
) |
|
|
29,520 |
|
|
|
28,100 |
|
Adjusted EBITDA attributable to unconsolidated entities |
|
1,357 |
|
|
|
— |
|
|
|
21 |
|
|
|
45 |
|
|
|
1,423 |
|
Adjusted EBITDA attributable to noncontrolling interest |
|
(747 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(747 |
) |
Other |
|
829 |
|
|
|
(27 |
) |
|
|
1,513 |
|
|
|
— |
|
|
|
2,315 |
|
Adjusted EBITDA |
$ |
121,712 |
|
|
$ |
33,260 |
|
|
$ |
18,763 |
|
|
$ |
19,521 |
|
|
$ |
193,256 |
|
|
Nine Months Ended December 31, 2023 |
||||||||||||||||||
|
Water Solutions |
|
Crude Oil Logistics |
|
Liquids Logistics |
|
Corporate and Other |
|
Consolidated |
||||||||||
|
(in thousands) |
||||||||||||||||||
Operating income (loss) |
$ |
202,719 |
|
|
$ |
48,795 |
|
|
$ |
53,857 |
|
|
$ |
(45,532 |
) |
|
$ |
259,839 |
|
Depreciation and amortization |
|
159,119 |
|
|
|
28,864 |
|
|
|
8,035 |
|
|
|
4,084 |
|
|
|
200,102 |
|
Amortization recorded to cost of sales |
|
— |
|
|
|
— |
|
|
|
195 |
|
|
|
— |
|
|
|
195 |
|
Net unrealized (gains) losses on derivatives |
|
(1,969 |
) |
|
|
61,673 |
|
|
|
(1,908 |
) |
|
|
(1,179 |
) |
|
|
56,617 |
|
CMA Differential Roll net losses (gains) |
|
— |
|
|
|
(71,285 |
) |
|
|
— |
|
|
|
— |
|
|
|
(71,285 |
) |
Inventory valuation adjustment |
|
— |
|
|
|
— |
|
|
|
(5,391 |
) |
|
|
— |
|
|
|
(5,391 |
) |
Lower of cost or net realizable value adjustments |
|
— |
|
|
|
785 |
|
|
|
2,484 |
|
|
|
— |
|
|
|
3,269 |
|
Loss (gain) on disposal or impairment of assets, net |
|
21,840 |
|
|
|
2,471 |
|
|
|
(9,375 |
) |
|
|
(715 |
) |
|
|
14,221 |
|
Equity-based compensation expense |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,098 |
|
|
|
1,098 |
|
Acquisition expense |
|
(28 |
) |
|
|
— |
|
|
|
84 |
|
|
|
(9 |
) |
|
|
47 |
|
Other income, net |
|
916 |
|
|
|
106 |
|
|
|
7 |
|
|
|
102 |
|
|
|
1,131 |
|
Adjusted EBITDA attributable to unconsolidated entities |
|
1,974 |
|
|
|
— |
|
|
|
(19 |
) |
|
|
137 |
|
|
|
2,092 |
|
Adjusted EBITDA attributable to noncontrolling interest |
|
(1,450 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,450 |
) |
Other |
|
1,747 |
|
|
|
139 |
|
|
|
168 |
|
|
|
— |
|
|
|
2,054 |
|
Adjusted EBITDA |
$ |
384,868 |
|
|
$ |
71,548 |
|
|
$ |
48,137 |
|
|
$ |
(42,014 |
) |
|
$ |
462,539 |
|
|
Nine Months Ended December 31, 2022 |
||||||||||||||||||
|
Water Solutions |
|
Crude Oil Logistics |
|
Liquids Logistics |
|
Corporate and Other |
|
Consolidated |
||||||||||
|
(in thousands) |
||||||||||||||||||
Operating income (loss) |
$ |
160,454 |
|
|
$ |
87,012 |
|
|
$ |
48,806 |
|
|
$ |
(37,569 |
) |
|
$ |
258,703 |
|
Depreciation and amortization |
|
153,766 |
|
|
|
35,193 |
|
|
|
10,194 |
|
|
|
4,952 |
|
|
|
204,105 |
|
Amortization recorded to cost of sales |
|
— |
|
|
|
— |
|
|
|
205 |
|
|
|
— |
|
|
|
205 |
|
Net unrealized (gains) losses on derivatives |
|
(4,464 |
) |
|
|
(57,390 |
) |
|
|
4,924 |
|
|
|
— |
|
|
|
(56,930 |
) |
CMA Differential Roll net losses (gains) |
|
— |
|
|
|
19,424 |
|
|
|
— |
|
|
|
— |
|
|
|
19,424 |
|
Inventory valuation adjustment |
|
— |
|
|
|
— |
|
|
|
(6,765 |
) |
|
|
— |
|
|
|
(6,765 |
) |
Lower of cost or net realizable value adjustments |
|
— |
|
|
|
(2,247 |
) |
|
|
(9,464 |
) |
|
|
— |
|
|
|
(11,711 |
) |
Loss (gain) on disposal or impairment of assets, net |
|
17,935 |
|
|
|
(1,279 |
) |
|
|
51 |
|
|
|
(916 |
) |
|
|
15,791 |
|
Equity-based compensation expense |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,866 |
|
|
|
1,866 |
|
Other income (expense), net |
|
10 |
|
|
|
390 |
|
|
|
(1,665 |
) |
|
|
29,996 |
|
|
|
28,731 |
|
Adjusted EBITDA attributable to unconsolidated entities |
|
3,569 |
|
|
|
— |
|
|
|
(3 |
) |
|
|
134 |
|
|
|
3,700 |
|
Adjusted EBITDA attributable to noncontrolling interest |
|
(1,652 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,652 |
) |
Other |
|
1,915 |
|
|
|
98 |
|
|
|
1,894 |
|
|
|
— |
|
|
|
3,907 |
|
Adjusted EBITDA |
$ |
331,533 |
|
|
$ |
81,201 |
|
|
$ |
48,177 |
|
|
$ |
(1,537 |
) |
|
$ |
459,374 |
|
OPERATIONAL DATA
|
|||||||
|
Three Months Ended |
|
Nine Months Ended |
||||
|
December 31, |
|
December 31, |
||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
(in thousands, except per day amounts) |
||||||
Water Solutions: |
|
|
|
|
|
|
|
Produced water processed (barrels per day) |
|
|
|
|
|
|
|
|
2,097,428 |
|
2,128,673 |
|
2,135,677 |
|
2,001,242 |
Eagle Ford Basin |
136,185 |
|
131,551 |
|
135,887 |
|
114,191 |
DJ Basin |
142,978 |
|
151,265 |
|
152,805 |
|
151,792 |
Other Basins |
— |
|
14,335 |
|
985 |
|
15,114 |
Total |
2,376,591 |
|
2,425,824 |
|
2,425,354 |
|
2,282,339 |
Recycled water (barrels per day) |
115,141 |
|
167,774 |
|
83,247 |
|
132,851 |
Total (barrels per day) |
2,491,732 |
|
2,593,598 |
|
2,508,601 |
|
2,415,190 |
Skim oil sold (barrels per day) |
3,663 |
|
4,099 |
|
3,918 |
|
3,757 |
|
|
|
|
|
|
|
|
Crude Oil Logistics: |
|
|
|
|
|
|
|
Crude oil sold (barrels) |
5,087 |
|
5,955 |
|
16,730 |
|
19,428 |
Crude oil transported on owned pipelines (barrels) |
6,473 |
|
7,062 |
|
19,520 |
|
20,832 |
Crude oil storage capacity - owned and leased (barrels) (1) |
|
|
|
|
5,232 |
|
5,232 |
Crude oil inventory (barrels) (1) |
|
|
|
|
790 |
|
892 |
|
|
|
|
|
|
|
|
Liquids Logistics: |
|
|
|
|
|
|
|
Refined products sold (gallons) |
201,796 |
|
192,340 |
|
631,802 |
|
566,997 |
Propane sold (gallons) |
254,266 |
|
305,067 |
|
524,007 |
|
639,686 |
Butane sold (gallons) |
207,544 |
|
177,061 |
|
394,118 |
|
409,137 |
Other products sold (gallons) |
85,410 |
|
96,349 |
|
276,898 |
|
294,965 |
Natural gas liquids and refined products storage capacity - owned and leased (gallons) (1) |
|
|
|
|
157,409 |
|
159,999 |
Refined products inventory (gallons) (1) |
|
|
|
|
2,020 |
|
1,738 |
Propane inventory (gallons) (1) |
|
|
|
|
92,861 |
|
97,283 |
Butane inventory (gallons) (1) |
|
|
|
|
35,951 |
|
31,029 |
Other products inventory (gallons) (1) |
|
|
|
|
19,526 |
|
13,360 |
| _______________________________________ | |
(1) |
Information is presented as of December 31, 2023 and December 31, 2022, respectively. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240208258121/en/
David Sullivan, 918-495-4631
Vice President - Finance
David.Sullivan@nglep.com
Source: NGL Energy Partners LP
FAQ
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