TULSA, Okla.--(BUSINESS WIRE)--NGL Energy Partners LP (NYSE:NGL) today reported a net loss of $24.7 million and an Adjusted EBITDA loss of $6.5 million for the three months ended June 30, 2012. Net loss per limited partner common unit for the quarter was $0.76.
The net loss was impacted by the following items:
- General and administrative expenses during the quarter ended June 30, 2012, included $3.5 million of costs related to the merger with High Sierra Energy, LP and High Sierra Energy, GP (collectively, “High Sierra”).
- NGL recorded a loss of $5.8 million resulting from the accelerated amortization of previously capitalized debt issuance costs upon closing of its new $645 million revolving credit facility.
- Declining propane prices had an adverse impact on margins of NGL’s wholesale marketing and supply segment which NGL expects to recover when delivering future volumes. NGL has contracts whereby it has committed to purchase ratable volumes of propane at index prices. NGL seeks to manage the price risk associated with these contracts primarily by selling the inventory not stored immediately after it is received. When NGL sells product, it records the cost of sale at the average cost of all inventory at that location, which may include inventory purchased earlier at higher prices and stored for sale in the future. During periods of falling prices, this results in negative margins on these sales.
On June 19, 2012, NGL completed a merger with High Sierra. High Sierra is a Denver, Colorado based limited partnership with three core businesses: crude oil gathering, transportation and marketing; water treatment, disposal, recycling and transportation; and natural gas liquids transportation and marketing.
During April and May 2012, NGL completed three separate business combinations to acquire retail propane and distillate operations in Georgia, Kansas, Maine, and New Hampshire.
A conference call to discuss NGL's results of operations is scheduled for 2:00 p.m. Central Time on August 16, 2012. Analysts, investors, and other interested parties may access the conference call by dialing (800) 237-9752 and providing access code 58099124. An audio replay of the conference call will be available for 7 days beginning at 4:00 p.m. Central Time on August 16, 2012, and can be accessed by dialing (888) 286-8010 and providing access code 48448684.
NGL also announced that it has filed its quarterly report on Form 10-Q for its fiscal quarter ended June 30, 2012, with the Securities and Exchange Commission. NGL has posted a copy of the Form 10-Q on its website at www.nglenergypartners.com.
NGL defines EBITDA as net income (loss) attributable to parent equity, plus income taxes, interest expense and depreciation and amortization expense. NGL defines Adjusted EBITDA as EBITDA excluding the unrealized gain or loss on derivative contracts and the gain or loss on the disposal of assets and share-based compensation expenses. EBITDA and Adjusted EBITDA should not be considered an alternative 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. NGL believes that EBITDA provides additional information for evaluating its ability to make quarterly distributions to its unitholders and is presented solely as a supplemental measure. NGL believes that Adjusted EBITDA provides additional information for evaluating its financial performance without regard to its financing methods, capital structure and historical cost basis. Further, EBITDA and Adjusted EBITDA, as NGL defines them, may not be comparable to EBITDA and Adjusted EBITDA or similarly titled measures used by other entities. A reconciliation of Adjusted EBITDA to net income (loss) attributable to parent equity is shown below.
About NGL Energy Partners LP:
NGL Energy Partners LP is a Delaware limited partnership. NGL owns and operates a vertically integrated energy business with four primary businesses: water services, crude oil logistics, NGL logistics and retail. NGL completed its initial public offering in May 2011. For further information about NGL and the financial results disclosed in this press release, see NGL Energy’s website at www.nglenergypartners.com.
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NGL ENERGY PARTNERS LP |
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Unaudited Condensed Consolidated Balance Sheets |
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As of June 30, 2012, and March 31, 2012 |
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(U.S. Dollars in Thousands, except unit amounts) |
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| June 30, | March 31, | |||||||
| 2012 | 2012 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 21,467 | $ | 7,832 | ||||
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Accounts receivable - trade, net of allowance for doubtful accounts of $1,111 and $818, respectively |
347,709 | 84,004 | ||||||
| Receivables from affiliates | 4,599 | 2,282 | ||||||
| Inventories | 192,066 | 94,504 | ||||||
| Prepaid expenses and other current assets | 62,617 | 10,002 | ||||||
| Total current assets | 628,458 | 198,624 | ||||||
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PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $18,819 and $12,843, respectively |
435,369 | 255,403 | ||||||
| GOODWILL | 476,894 | 148,785 | ||||||
| INTANGIBLE ASSETS, net of accumulated amortization of $9,805 and $8,174, respectively | 355,673 | 143,559 | ||||||
| Other | 3,816 | 2,766 | ||||||
| Total assets | $ | 1,900,210 | $ | 749,137 | ||||
| LIABILITIES AND PARTNERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Trade accounts payable | $ | 360,941 | $ | 81,369 | ||||
| Accrued expenses and other payables | 51,068 | 10,023 | ||||||
| Product exchanges | 15,372 | 4,764 | ||||||
| Advance payments received from customers | 47,042 | 20,293 | ||||||
| Payable to affiliates | 14,778 | 8,486 | ||||||
| Current maturities of long-term debt | 92,412 | 19,484 | ||||||
| Total current liabilities | 581,613 | 144,419 | ||||||
| LONG-TERM DEBT, net of current maturities | 510,437 | 199,177 | ||||||
| OTHER NONCURRENT LIABILITIES | 2,978 | 212 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| PARTNERS' EQUITY: | ||||||||
| General Partner — 0.1% interest; 50,720 and 29,245 notional units outstanding, respectively | (51,601 | ) | 442 | |||||
| Limited Partners — 99.9% interest — | ||||||||
| Common units — 44,749,763 and 23,296,253 units outstanding, respectively | 840,744 | 384,604 | ||||||
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Subordinated units — 5,919,346 units outstanding at June 30, 2012, and March 31, 2012 |
13,133 | 19,824 | ||||||
| Accumulated other comprehensive income — | ||||||||
| Foreign currency translation | 18 | 31 | ||||||
| Noncontrolling interests | 2,888 | 428 | ||||||
| Total partners' equity | 805,182 | 405,329 | ||||||
| Total liabilities and partners' equity | $ | 1,900,210 | $ | 749,137 | ||||
| NGL ENERGY PARTNERS LP | ||||||||
| Unaudited Condensed Consolidated Statements of Operations | ||||||||
| For the Three Months Ended June 30, 2012 and 2011 | ||||||||
| (U.S. Dollars in Thousands, except unit and per unit amounts) | ||||||||
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Three Months |
Three Months | ||||||
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Ended |
Ended | ||||||
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June 30, |
June 30, | ||||||
| 2012 | 2011 | |||||||
| REVENUES: | ||||||||
| Retail propane | $ | 59,184 | $ | 12,852 | ||||
| Wholesale supply and marketing | 164,675 | 177,497 | ||||||
| Midstream | 2,151 | 497 | ||||||
| High Sierra operations | 100,426 | - | ||||||
| Total Revenues | 326,436 | 190,846 | ||||||
| COST OF SALES: | ||||||||
| Retail propane | 37,417 | 8,106 | ||||||
| Wholesale supply and marketing | 155,176 | 177,769 | ||||||
| Midstream | 803 | 98 | ||||||
| High Sierra operations | 105,589 | - | ||||||
| Total Cost of Sales | 298,985 | 185,973 | ||||||
| OPERATING COSTS AND EXPENSES: | ||||||||
| Operating | 23,338 | 7,142 | ||||||
| General and administrative | 9,960 | 2,036 | ||||||
| Depreciation and amortization | 9,227 | 1,377 | ||||||
| Operating Loss | (15,074 | ) | (5,682 | ) | ||||
| OTHER INCOME (EXPENSE): | ||||||||
| Interest income | 366 | 126 | ||||||
| Interest expense | (3,800 | ) | (1,301 | ) | ||||
| Loss on extinguishment of debt | (5,769 | ) | - | |||||
| Other, net | 26 | 85 | ||||||
| Loss Before Income Taxes | (24,251 | ) | (6,772 | ) | ||||
| INCOME TAX PROVISION | (459 | ) | - | |||||
| Net Loss | (24,710 | ) | (6,772 | ) | ||||
| Net (Income) Loss Allocated to General Partner | (95 | ) | 7 | |||||
| Net Loss Attributable to Noncontrolling Interests | 60 | |||||||
| Net Loss Attributable to Parent Equity | ||||||||
| Allocated to Limited Partners | $ | (24,745 | ) | $ | (6,765 | ) | ||
| Basic and Diluted Earnings Per Common Unit | $ | (0.76 | ) | $ | (0.53 | ) | ||
| Basic and Diluted Earnings per Subordinated Unit | $ | (0.77 | ) | $ | (0.53 | ) | ||
| Basic and Diluted Weighted average units outstanding: | ||||||||
| Common | 26,529,133 | 9,883,342 | ||||||
| Subordinated | 5,919,346 | 2,927,149 | ||||||
OPERATIONAL DATA
The following table summarizes the volume of gallons sold by NGL Energy’s retail propane and wholesale supply and marketing segments and the throughput volume for the midstream segment. Gallons sold by the wholesale supply and marketing segment shown in the table below include sales to the retail segment.
| Three Months Ended June 30, | ||||
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Segment |
2012 | 2011 | ||
| (gallons in thousands) | ||||
| Retail propane | ||||
| Propane | 19,270 | 5,003 | ||
| Distillates | 3,249 | - | ||
| Wholesale supply and marketing | ||||
| Propane | 116,618 | 102,698 | ||
| Other natural gas liquids | 48,146 | 18,446 | ||
| Midstream | 36,300 | 21,004 | ||
The volumes shown in the table above do not include the operations of High Sierra. NGL Energy’s consolidated statement of operations for the three months ended June 30, 2012 includes the results of operations of High Sierra from the June 19, 2012 merger date through the end of the quarter.
ADJUSTED EBITDA RECONCILIATION
The following table reconciles net loss attribtuable to parent equity to EBITDA and Adjusted EBITDA, each of which are non-GAAP financial measures, for the periods indicated:
| Three Months Ended June 30, | ||||||||
| 2012 | 2011 | |||||||
| (in thousands) | ||||||||
| EBITDA: | ||||||||
| Net loss attributable to parent equity | $ | (24,650 | ) | $ | (6,772 | ) | ||
| Provision for income taxes | 459 | - | ||||||
| Interest expense | 3,800 | 1,301 | ||||||
| Loss on early extinguishment of debt | 5,769 | - | ||||||
| Depreciation and amortization | 9,414 | 1,577 | ||||||
| EBITDA | $ | (5,208 | ) | $ | (3,894 | ) | ||
| Unrealized (gain) loss on derivative contracts | (1,929 | ) | 2,246 | |||||
| Loss on sale of assets | 7 | - | ||||||
| Share-based compensation expense | 655 | - | ||||||
| Adjusted EBITDA | $ | (6,475 | ) | $ | (1,648 | ) | ||