NGL Energy Partners LP (NYSE:NGL) (“NGL,” “our,” “we,” or the
“Partnership”) today reported its fourth quarter and full year
fiscal 2023 results.
Highlights for the fiscal year and quarter ended March 31, 2023
include:
- Net income for full year Fiscal 2023 of $52.5 million, compared
to a net loss of $184.1 million for full year Fiscal 2022; a net
loss for the fourth quarter of Fiscal 2023 of $33.2 million,
compared to a net loss of $29.4 million for the fourth quarter of
Fiscal 2022
- Adjusted EBITDA(1) for full year Fiscal 2023 of $632.7 million,
compared to $542.5 million for full year Fiscal 2022; Adjusted
EBITDA(1) for the fourth quarter of Fiscal 2023 of $173.3 million,
compared to $157.4 million for the fourth quarter of Fiscal
2022
Water Solutions record year:
- Record produced water volumes processed of approximately 2.33
million barrels per day for Fiscal 2023, a 29.4% increase over the
prior year and approximately 2.46 million barrels per day during
the fourth quarter of Fiscal 2023, growing 28.0% compared to the
prior fourth quarter
- Record Water Solutions’ Adjusted EBITDA(1) of $463.1 million
for full year Fiscal 2023, a 35% increase over the prior year and
$131.6 million for the fourth quarter of Fiscal 2023, a 45.7%
increase compared to the prior fourth quarter
- In the face of significant inflationary pressure, Water
Solutions reduced operating expense to $0.25 per barrel for Fiscal
2023, a 7.4% reduction compared to the prior year and $0.24 per
barrel for the fourth quarter of Fiscal 2023, versus $0.28 per
barrel compared to the prior fourth quarter
Debt reduction, leverage and asset sales:
- Reduced indebtedness by approximately $530 million in Fiscal
2023
- Retired all $475.7 million of the outstanding 2023 unsecured
notes
- Paid off the outstanding equipment note of $41.7 million
- Purchased $12.5 million of the outstanding 2026 unsecured
notes
- Reduced total leverage to 4.56 times on March 31, 2023,
surpassing initial target of 4.75 times
- Subsequent to March 31, 2023, purchased $99.3 million of the
outstanding 2025 unsecured notes, leaving a remaining balance of
$280.7 million
- Closed $141 million(2) of asset sales, including marine assets
for $111.7 million in cash. Based on the trailing twelve months of
Adjusted EBITDA generated by these assets the resulting sales
multiple was approximately 13.0 times.
“The Partnership had a strong Fiscal 2023, exceeding
expectations with record Adjusted EBITDA(1), record water disposal
volumes, accelerated debt reduction, declining leverage and
significant asset sales at attractive multiples. Our team pulled on
all the levers available to improve the balance sheet and financial
metrics. Fiscal 2024 holds more of the same as we have closed
additional asset sales, purchased 2025 unsecured notes and guided
to increased Adjusted EBITDA(3). As soon as the 2025 unsecured
notes are retired we will address the Preferred securities," stated
Mike Krimbill, NGL’s CEO. “Providing for potential crude oil
volatility, we are guiding fiscal 2024 Water Solutions Adjusted
EBITDA(3) to a range of $485 - $500 million and full year
consolidated Adjusted EBITDA(3) of $645 million plus. Also, we are
guiding to $125 million in total maintenance and growth capital
expenditures for Fiscal 2024,” 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) Excludes the sale of linefill of $16.6
million.
(3) 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
March 31, 2023
March 31, 2022
Operating Income
(Loss)
Adjusted EBITDA(1)
Operating Income
(Loss)
Adjusted EBITDA(1)
(in thousands)
Water Solutions
$
38,470
$
131,558
$
34,645
$
90,279
Crude Oil Logistics
(5,488
)
29,715
7,092
54,459
Liquids Logistics
17,818
28,469
10,349
24,546
Corporate and Other
(20,340
)
(16,441
)
(13,637
)
(11,870
)
Total
$
30,460
$
173,301
$
38,449
$
157,414
Water Solutions
Operating income for the Water Solutions segment increased $3.8
million for the quarter ended March 31, 2023, compared to the
quarter ended March 31, 2022. The Partnership processed
approximately 2.46 million barrels of water per day during the
quarter ended March 31, 2023, a 28.0% increase when compared to
approximately 1.93 million barrels of water per day processed
during the quarter ended March 31, 2022. This increase was due to
higher production volumes (and associated produced water) primarily
in the Delaware Basin driven by higher completion activity as well
as higher fees charged for spot volumes. In addition, there was an
increase in payments made by certain producers for committed
volumes not delivered. Service fees for produced water processed
($/barrel) also benefited from these deficiency payments. These
increases were partially offset by lower crude oil prices. The
Partnership also sold approximately 76,000 barrels per day of
produced and recycled water for use in our customers’ completion
activities.
Revenues from recovered skim oil totaled $24.5 million for the
quarter ended March 31, 2023, a decrease of $3.9 million from the
prior year period. This decrease was due to lower skim oil volumes
per barrel of produced water processed and lower realized crude oil
prices received from the sale of skim oil barrels partially offset
by higher volumes of skim oil barrels sold due to an increase in
produced water volumes processed. In addition, for the quarter
ended March 31, 2023, approximately 33,480 barrels of skim oil were
stored and will be sold during fiscal year 2024.
Operating expenses in the Water Solutions segment decreased to
$0.24 per produced barrel processed compared to $0.28 per produced
barrel processed in the comparative quarter last year primarily due
to the increase in produced water processed. Three of the Water
Solutions segment’s largest variable expenses, utility, royalty and
chemical expenses, were not (and are not expected to be) impacted
by the rise in inflation due to negotiated long-term utility
contracts with fixed rates, royalty contracts with no escalation
clauses and a fixed chemical expense per barrel with our chemical
provider.
Crude Oil Logistics
Operating income for the fourth quarter of Fiscal 2023 decreased
by $12.6 million, compared to the same quarter in Fiscal 2022.
Operating income for the fourth quarter of Fiscal 2023 includes a
loss from the disposal or impairment of assets of $32.4 million,
compared to a gain of $5.3 million in the same period of the prior
year. Excluding these amounts, operating income increased by $25.1
million for the fourth quarter of Fiscal 2023. This increase is
primarily due to net gains on derivative contracts of $57.5
million, which is comprised of net gains of $7.4 million in the
current year, versus a net loss of $50.2 million in the prior year
period. This increase was partially offset by lower product margins
due to the sale of higher priced inventory into a market in which
prices were declining in the current quarter period, versus the
opposite in the prior year period; we sold lower priced inventory
into a market in which prices were rising. In addition, we
experienced lower differentials on certain sales contracts which
lowered current period product margin and partially offsets the
increase discussed above. During the three months ended March 31,
2023, physical volumes on the Grand Mesa Pipeline averaged
approximately 76,000 barrels per day, compared to approximately
74,000 barrels per day for the three months ended March 31, 2022.
This increase was due to increased production in the
Denver-Julesburg basin.
As a part of continued efforts to optimize the Partnership’s
asset portfolio, we sold our crude marine assets during the
quarter, which generated a $8.0 million loss on the sale of
assets.
Liquids Logistics
Operating income for the Liquids Logistics segment increased
$7.5 million for the quarter ended March 31, 2023, compared to the
quarter ended March 31, 2022. Operating income for the fourth
quarter of Fiscal 2023 includes a loss from the disposal or
impairment of assets of $10.2 million. Excluding these amounts,
operating income increased by $17.7 million for the fourth quarter
of Fiscal 2023. This increase is primarily due to higher propane
margins as customers pulled their fixed priced contracts later in
the current year. Margins for refined products also increased as we
continued to be well positioned from a supply and inventory
perspective in certain markets experiencing tight supply. This
increase was partially offset by lower butane margins (excluding
the impact of derivatives) as our product purchased earlier in the
season continued to compete with product purchased in a discounted
market, resulting in our product being more expensive. For the
current quarter, we recognized $2.3 million of gains from net
derivative activity, compared to $16.8 million in losses in the
prior year quarter.
Capitalization and Liquidity
Total liquidity (cash plus available capacity on our asset-based
revolving credit facility (“ABL Facility”)) was approximately
$315.4 million as of March 31, 2023. On March 31, 2023, the
Partnership reported $138.0 million in outstanding borrowings on
its ABL Facility, compared to $116.0 million in outstanding
borrowings at March 31, 2022. This increase was due to the payoff
of the 2023 Notes, which was offset by the seasonal decline in
inventory levels and the sale of our marine assets.
As of March 31, 2023, the Partnership is in compliance with all
of its debt covenants and has no significant current debt
maturities before March 2025.
Fourth Quarter Conference Call Information
A conference call to discuss NGL’s results of operations is
scheduled for 4:30 pm Central Time on Wednesday, May 31, 2023.
Analysts, investors, and other interested parties may join the
webcast via the event link:
https://www.webcaster4.com/Webcast/Page/2808/48242 or by dialing
(888) 506-0062 and providing access code: 106759. 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
48242.
NGL filed its Annual Report on Form 10-K for the year ended
March 31, 2023 with the Securities and Exchange Commission after
market on May 31, 2023. A copy of the Form 10-K can be found on the
Partnership’s website at www.nglenergypartners.com. Unitholders may
also request, free of charge, a hard copy of our Form 10-K and our
complete audited financial statements.
Non-GAAP Financial Measures
NGL defines EBITDA as net income (loss) attributable to NGL
Energy Partners LP, plus interest expense, income tax expense
(benefit), and depreciation and amortization expense. NGL defines
Adjusted EBITDA as EBITDA excluding net unrealized gains and losses
on derivatives, lower of cost or net realizable value adjustments,
gains and losses on disposal or impairment of assets, gains and
losses on early extinguishment of liabilities, equity-based
compensation expense, acquisition expense, revaluation of
liabilities, certain legal settlements and other. NGL also includes
in Adjusted EBITDA certain inventory valuation adjustments related
to certain refined products businesses within NGL’s Liquids
Logistics segment, as discussed below. EBITDA and Adjusted EBITDA
should not be considered alternatives to net (loss) income, (loss)
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 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. 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 we
are 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.
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 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 Consolidated Balance
Sheets
(in Thousands, except unit
amounts)
March 31,
2023
2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
5,431
$
3,822
Accounts receivable-trade, net of
allowance for expected credit losses of $1,964 and $2,626,
respectively
1,033,956
1,123,163
Accounts receivable-affiliates
12,362
8,591
Inventories
142,607
251,277
Prepaid expenses and other current
assets
98,089
159,486
Total current assets
1,292,445
1,546,339
PROPERTY, PLANT AND EQUIPMENT, net of
accumulated depreciation of $898,184 and $887,006, respectively
2,223,380
2,462,390
GOODWILL
712,364
744,439
INTANGIBLE ASSETS, net of accumulated
amortization of $580,860 and $507,285, respectively
1,058,668
1,135,354
INVESTMENTS IN UNCONSOLIDATED ENTITIES
21,090
21,897
OPERATING LEASE RIGHT-OF-USE ASSETS
90,220
114,124
OTHER NONCURRENT ASSETS
57,977
45,802
Total assets
$
5,456,144
$
6,070,345
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable-trade
$
927,591
$
1,084,837
Accounts payable-affiliates
65
73
Accrued expenses and other payables
133,616
140,719
Advance payments received from
customers
14,699
7,934
Current maturities of long-term debt
—
2,378
Operating lease obligations
34,166
41,261
Total current liabilities
1,110,137
1,277,202
LONG-TERM DEBT, net of debt issuance costs
of $30,117 and $42,988, respectively, and current maturities
2,857,805
3,350,463
OPERATING LEASE OBLIGATIONS
58,450
72,784
OTHER NONCURRENT LIABILITIES
111,226
104,346
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, 132,059 and 130,827 notional units, respectively
(52,551
)
(52,478
)
Limited partners, representing a 99.9%
interest, 131,927,343 and 130,695,970 common units issued and
outstanding, respectively
455,564
401,486
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
(450
)
(308
)
Noncontrolling interests
16,507
17,394
Total equity
767,429
714,453
Total liabilities and equity
$
5,456,144
$
6,070,345
NGL ENERGY PARTNERS LP AND
SUBSIDIARIES
Unaudited Consolidated
Statements of Operations
(in Thousands, except unit and
per unit amounts)
Three Months Ended March
31,
Year Ended March 31,
2023
2022
2023
2022
REVENUES:
Water Solutions
$
185,807
$
147,777
$
697,038
$
544,866
Crude Oil Logistics
493,055
789,839
2,464,822
2,505,496
Liquids Logistics
1,369,972
1,595,631
5,533,044
4,897,553
Total Revenues
2,048,834
2,533,247
8,694,904
7,947,915
COST OF SALES:
Water Solutions
421
12,189
14,100
33,980
Crude Oil Logistics
442,474
761,055
2,250,934
2,352,932
Liquids Logistics
1,326,449
1,565,361
5,383,809
4,752,400
Corporate and Other
1,181
—
1,181
—
Total Cost of Sales
1,770,525
2,338,605
7,650,024
7,139,312
OPERATING COSTS AND EXPENSES:
Operating
76,354
77,925
313,725
285,535
General and administrative
21,217
17,397
71,818
63,546
Depreciation and amortization
69,516
66,575
273,621
288,720
Loss on disposal or impairment of assets,
net
71,097
791
86,888
94,254
Revaluation of liabilities
9,665
(6,495
)
9,665
(6,495
)
Operating Income
30,460
38,449
289,163
83,043
OTHER INCOME (EXPENSE):
Equity in earnings of unconsolidated
entities
1,026
635
4,120
1,400
Interest expense
(63,917
)
(67,636
)
(275,445
)
(271,640
)
(Loss) gain on early extinguishment of
liabilities, net
(631
)
682
6,177
1,813
Other income, net
17
251
28,748
2,254
(Loss) Income Before Income Taxes
(33,045
)
(27,619
)
52,763
(183,130
)
INCOME TAX EXPENSE
(158
)
(1,791
)
(271
)
(971
)
Net (Loss) Income
(33,203
)
(29,410
)
52,492
(184,101
)
LESS: NET (INCOME) LOSS ATTRIBUTABLE TO
NONCONTROLLING INTERESTS
(316
)
50
(1,106
)
(655
)
NET (LOSS) INCOME ATTRIBUTABLE TO NGL
ENERGY PARTNERS LP
$
(33,519
)
$
(29,360
)
$
51,386
$
(184,756
)
NET LOSS ALLOCATED TO COMMON
UNITHOLDERS
$
(67,661
)
$
(56,269
)
$
(73,232
)
$
(288,630
)
BASIC AND DILUTED LOSS PER COMMON UNIT
$
(0.51
)
$
(0.43
)
$
(0.56
)
$
(2.22
)
BASIC WEIGHTED AVERAGE COMMON UNITS
OUTSTANDING
131,631,271
130,371,691
131,007,171
129,840,234
DILUTED WEIGHTED AVERAGE COMMON UNITS
OUTSTANDING
131,631,271
130,371,691
131,007,171
129,840,234
EBITDA, ADJUSTED EBITDA AND
DISTRIBUTABLE CASH FLOW RECONCILIATION
(Unaudited)
The following table reconciles NGL’s net
(loss) income to NGL’s EBITDA, Adjusted EBITDA and Distributable
Cash Flow for the periods indicated:
Three Months Ended March
31,
Year Ended March 31,
2023
2022
2023
2022
(in thousands)
Net (loss) income
$
(33,203
)
$
(29,410
)
$
52,492
$
(184,101
)
Less: Net (income) loss attributable to
noncontrolling interests
(316
)
50
(1,106
)
(655
)
Net (loss) income attributable to NGL
Energy Partners LP
(33,519
)
(29,360
)
51,386
(184,756
)
Interest expense
63,932
67,652
275,505
271,689
Income tax expense
158
1,791
271
971
Depreciation and amortization
69,519
66,591
273,544
287,943
EBITDA
100,090
106,674
600,706
375,847
Net unrealized losses (gains) on
derivatives
6,492
33,277
(50,438
)
(14,977
)
CMA Differential Roll net losses (gains)
(1)
(15,877
)
6,751
3,547
67,738
Inventory valuation adjustment (2)
(1,030
)
6,497
(7,795
)
8,409
Lower of cost or net realizable value
adjustments
177
8,226
(11,534
)
10,862
Loss on disposal or impairment of assets,
net
71,097
791
86,872
94,059
Loss (gain) on early extinguishment of
liabilities, net
631
(683
)
(6,177
)
(1,851
)
Equity-based compensation expense
852
(8
)
2,718
(1,052
)
Acquisition expense (3)
118
—
118
67
Revaluation of liabilities (4)
9,665
(6,495
)
9,665
(6,495
)
Other (5)
1,086
2,384
4,993
9,909
Adjusted EBITDA
$
173,301
$
157,414
$
632,675
$
542,516
Less: Cash interest expense (6)
59,707
63,482
258,679
254,619
Less: Income tax expense
158
1,791
271
971
Less: Maintenance capital expenditures
20,599
21,414
61,649
59,468
Less: CMA Differential Roll (7)
(14,439
)
5,563
(27,652
)
54,817
Less: Other (8)
220
—
391
—
Distributable Cash Flow
$
107,056
$
65,164
$
339,337
$
172,641
____________________
(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 the non-cash valuation
adjustment of contingent consideration liabilities, offset by the
cash payments, related to royalty agreements acquired as part of
acquisitions in our Water Solutions segment.
(5)
Amounts represent non-cash operating
expenses related to our Grand Mesa Pipeline, unrealized
gains/losses on marketable securities and accretion expense for
asset retirement obligations. Also, the amount for the year ended
March 31, 2023 includes the write off of an asset acquired in a
prior period acquisition.
(6)
Amounts represent interest expense payable
in cash, excluding changes in the accrued interest balance.
(7)
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.
(8)
Amounts represent cash paid to settle
asset retirement obligations.
ADJUSTED EBITDA RECONCILIATION BY
SEGMENT
(Unaudited)
Three Months Ended March 31,
2023
Water Solutions
Crude Oil
Logistics
Liquids Logistics
Corporate and
Other
Consolidated
(in thousands)
Operating income (loss)
$
38,470
$
(5,488
)
$
17,818
$
(20,340
)
$
30,460
Depreciation and amortization
53,315
11,384
3,107
1,710
69,516
Amortization recorded to cost of sales
—
—
69
—
69
Net unrealized losses (gains) on
derivatives
—
7,286
(1,973
)
1,179
6,492
CMA Differential Roll net losses
(gains)
—
(15,877
)
—
—
(15,877
)
Inventory valuation adjustment
—
—
(1,030
)
—
(1,030
)
Lower of cost or net realizable value
adjustments
—
—
177
—
177
Loss on disposal or impairment of assets,
net
28,496
32,365
10,232
4
71,097
Equity-based compensation expense
—
—
—
852
852
Acquisition expense
29
—
—
89
118
Other income (expense), net
60
(60
)
—
17
17
Adjusted EBITDA attributable to
unconsolidated entities
1,190
—
30
42
1,262
Adjusted EBITDA attributable to
noncontrolling interest
(617
)
—
—
—
(617
)
Revaluation of liabilities
9,665
—
—
—
9,665
Other
950
105
39
6
1,100
Adjusted EBITDA
$
131,558
$
29,715
$
28,469
$
(16,441
)
$
173,301
Three Months Ended March 31,
2022
Water Solutions
Crude Oil
Logistics
Liquids Logistics
Corporate and
Other
Consolidated
(in thousands)
Operating income (loss)
$
34,645
$
7,092
$
10,349
$
(13,637
)
$
38,449
Depreciation and amortization
50,092
11,460
3,305
1,718
66,575
Amortization recorded to cost of sales
—
—
68
—
68
Net unrealized losses (gains) on
derivatives
4,807
30,144
(1,674
)
—
33,277
CMA Differential Roll net losses
(gains)
—
6,751
—
—
6,751
Inventory valuation adjustment
—
—
6,497
—
6,497
Lower of cost or net realizable value
adjustments
—
2,246
5,980
—
8,226
Loss (gain) on disposal or impairment of
assets, net
6,148
(5,307
)
—
(50
)
791
Equity-based compensation expense
—
—
—
(8
)
(8
)
Other income, net
102
3
84
62
251
Adjusted EBITDA attributable to
unconsolidated entities
804
—
23
45
872
Adjusted EBITDA attributable to
noncontrolling interest
(225
)
—
1
—
(224
)
Revaluation of liabilities
(6,495
)
—
—
—
(6,495
)
Other
401
2,070
(87
)
—
2,384
Adjusted EBITDA
$
90,279
$
54,459
$
24,546
$
(11,870
)
$
157,414
Year Ended March 31,
2023
Water Solutions
Crude Oil
Logistics
Liquids Logistics
Corporate and
Other
Consolidated
(in thousands)
Operating income (loss)
$
198,924
$
81,524
$
66,624
$
(57,909
)
$
289,163
Depreciation and amortization
207,081
46,577
13,301
6,662
273,621
Amortization recorded to cost of sales
—
—
274
—
274
Net unrealized (gains) losses on
derivatives
(4,464
)
(50,104
)
2,951
1,179
(50,438
)
CMA Differential Roll net losses
(gains)
—
3,547
—
—
3,547
Inventory valuation adjustment
—
—
(7,795
)
—
(7,795
)
Lower of cost or net realizable value
adjustments
—
(2,247
)
(9,287
)
—
(11,534
)
Loss (gain) on disposal or impairment of
assets, net
46,431
31,086
10,283
(912
)
86,888
Equity-based compensation expense
—
—
—
2,718
2,718
Acquisition expense
29
—
—
89
118
Other income (expense), net
70
330
(1,665
)
30,013
28,748
Adjusted EBITDA attributable to
unconsolidated entities
4,759
—
27
176
4,962
Adjusted EBITDA attributable to
noncontrolling interest
(2,269
)
—
—
—
(2,269
)
Revaluation of liabilities
9,665
—
—
—
9,665
Other
2,865
203
1,933
6
5,007
Adjusted EBITDA
$
463,091
$
110,916
$
76,646
$
(17,978
)
$
632,675
Year Ended March 31,
2022
Water Solutions
Crude Oil
Logistics
Liquids Logistics
Corporate and
Other
Consolidated
(in thousands)
Operating income (loss)
$
94,851
$
45,033
$
(8,441
)
$
(48,400
)
$
83,043
Depreciation and amortization
214,558
48,489
18,714
6,959
288,720
Amortization recorded to cost of sales
—
—
281
—
281
Net unrealized losses (gains) on
derivatives
11,652
(23,664
)
(2,965
)
—
(14,977
)
CMA Differential Roll net losses
(gains)
—
67,738
—
—
67,738
Inventory valuation adjustment
—
—
8,409
—
8,409
Lower of cost or net realizable value
adjustments
—
2,235
8,627
—
10,862
Loss (gain) on disposal or impairment of
assets, net
25,598
(3,101
)
71,807
(50
)
94,254
Equity-based compensation expense
—
—
—
(1,052
)
(1,052
)
Acquisition expense
4
—
—
63
67
Other income, net
718
353
711
472
2,254
Adjusted EBITDA attributable to
unconsolidated entities
2,363
—
14
(145
)
2,232
Adjusted EBITDA attributable to
noncontrolling interest
(2,212
)
—
(528
)
—
(2,740
)
Revaluation of liabilities
(6,495
)
—
—
—
(6,495
)
Other
921
9,064
(65
)
—
9,920
Adjusted EBITDA
$
341,958
$
146,147
$
96,564
$
(42,153
)
$
542,516
OPERATIONAL DATA
(Unaudited)
Three Months Ended
Year Ended
March 31,
March 31,
2023
2022
2023
2022
(in thousands, except per day
amounts)
Water Solutions:
Produced water processed (barrels per
day)
Delaware Basin
2,169,690
1,664,140
2,042,777
1,531,830
Eagle Ford Basin
135,552
99,299
119,458
99,298
DJ Basin
147,033
142,628
150,619
142,611
Other Basins
12,555
20,091
14,483
24,179
Total
2,464,830
1,926,158
2,327,337
1,797,918
Recycled water (barrels per day)
76,056
145,944
118,847
93,487
Total (barrels per day)
2,540,886
2,072,102
2,446,184
1,891,405
Skim oil sold (barrels per day)
3,785
3,468
3,764
2,864
Crude Oil Logistics:
Crude oil sold (barrels)
6,069
8,064
25,497
31,091
Crude oil transported on owned pipelines
(barrels)
6,882
6,653
27,714
28,410
Crude oil storage capacity - owned and
leased (barrels) (1)
5,232
5,232
Crude oil inventory (barrels) (1)
684
1,339
Liquids Logistics:
Refined products sold (gallons)
202,154
190,661
769,151
776,797
Propane sold (gallons)
379,251
389,823
1,018,937
1,034,706
Butane sold (gallons)
130,521
160,386
539,658
588,032
Other products sold (gallons)
96,758
86,828
391,723
376,906
Natural gas liquids and refined products
storage capacity - owned and leased (gallons) (1)
160,329
156,219
Refined products inventory (gallons)
(1)
1,003
1,090
Propane inventory (gallons) (1)
48,379
37,719
Butane inventory (gallons) (1)
17,409
19,825
Other products inventory (gallons) (1)
12,893
18,614
____________________ (1) Information is presented as of March 31,
2023 and March 31, 2022, respectively.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230531005797/en/
David Sullivan, 918-495-4631 Vice President - Finance
David.Sullivan@nglep.com
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