News Column

NGL Energy Partners LP Announces Fiscal 2014 Results

May 30, 2014

TULSA, Okla.--(BUSINESS WIRE)-- NGL Energy Partners LP (NYSE:NGL) today reported Adjusted EBITDA of $270.5 million for the year ended March 31, 2014 (exclusive of $6.9 million of advisory and legal costs related to acquisitions plus $8.2 million of severance and compensation costs related to the Gavilon transaction), compared to Adjusted EBITDA of $183.5 million during the year ended March 31, 2013 (exclusive of $5.6 million of advisory and legal costs related to acquisitions). NGL reported net income of $48.8 million for the year ended March 31, 2014, compared to net income of $48.2 million for the year ended March 31, 2013. Net income per limited partner common unit for the year ended March 31, 2014 was $0.51, compared to net income per limited partner common unit of $0.96 for the year ended December 31, 2013.

NGL’s accomplishments during fiscal 2014 included the following:

  • The acquisition of the diversified midstream energy business of Gavilon Energy, LLC in December 2013, which added 7.7 million barrels of storage at Cushing, OK and a 50% interest in the Glass Mountain pipeline;
  • Amendments to NGL’s revolving credit facility in November and December 2013 that expanded the capacity to $1.721 billion, extended the maturity date to late 2018, and reduced interest costs; and
  • First issue of senior unsecured notes in the amount of $450 million in a private placement in October 2013.

    A conference call to discuss NGL's results of operations is scheduled for 11:00am Eastern Time (10:00am Central Time) on May 30, 2014. Analysts, investors, and other interested parties may access the conference call by dialing (800) 706-7741 and providing access code 55877851. An archived audio replay of the conference call will be available for 7 days beginning at 4:30pm Eastern Time (3:30pm Central Time) on May 30, 2014 and can be accessed by dialing (888) 286-8010 and providing access code 45965561.

    NGL defines EBITDA as net income attributable to parent equity, plus income taxes, interest expense, loss on early extinguishment of debt, and depreciation and amortization expense. NGL defines Adjusted EBITDA as EBITDA excluding the unrealized gain or loss on derivative contracts, the gain or loss on the disposal or impairment of assets, and share-based compensation expense. For purposes of NGL’s Adjusted EBITDA calculation, NGL draws a distinction between unrealized gains and losses on derivatives and realized 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 unrealized gains or losses. When a derivative contract is settled, NGL reverses the previously-recorded unrealized gain or loss and records a realized gain or loss. The realized gain or loss is equal to the amount received or paid on the contract. NGL acquired Gavilon Energy in December 2013. NGL is still in the process of developing procedures to calculate realized and unrealized gains and losses for the Gavilon Energy operations in the same way NGL calculates them for its other operations. Accordingly, the unrealized gain and loss in the Adjusted EBITDA table below excludes any unrealized gains and losses related to Gavilon Energy.

    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 attributable to parent equity is shown below.

    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 its expectations as reflected in the forward-looking statements are reasonable, NGL can give no assurance that such expectations 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.

    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 solutions, crude oil logistics, NGL liquids and retail propane. NGL completed its initial public offering in May 2011. For further information visit the Partnership's website at www.nglenergypartners.com.

       

    NGL ENERGY PARTNERS LP

    Consolidated Balance Sheets

    At March 31, 2014 and 2013

    (U.S. Dollars in Thousands, except unit amounts)

     
    March 31,
      2014     2013  
    ASSETS
    CURRENT ASSETS:
    Cash and cash equivalents $ 10,440 $ 11,561

    Accounts receivable - trade, net of allowance for doubtful accounts of $2,822 and $1,760, respectively

    900,904 562,757
    Accounts receivable - affiliates 7,445 22,883
    Inventories 310,160 126,895
    Prepaid expenses and other current assets   80,350     37,891  
    Total current assets 1,309,299 761,987
     

    PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $109,564 and $50,127, respectively

    829,346 526,437
    GOODWILL 1,107,006 555,220

    INTANGIBLE ASSETS, net of accumulated amortization of $116,728 and $44,155, respectively

    714,956 441,432
    INVESTMENTS IN UNCONSOLIDATED ENTITIES 189,821 -
    OTHER NONCURRENT ASSETS   16,795     6,542  
    Total assets $ 4,167,223   $ 2,291,618  
     
    LIABILITIES AND EQUITY
    CURRENT LIABILITIES:
    Accounts payable - trade $ 740,211 $ 536,055
    Accounts payable - affiliates 76,846 6,900
    Accrued expenses and other payables 141,690 85,606
    Advance payments received from customers 29,965 22,372
    Current maturities of long-term debt   7,080     8,626  
    Total current liabilities 995,792 659,559
     
    LONG-TERM DEBT, net of current maturities 1,629,834 740,436
    OTHER NONCURRENT LIABILITIES 9,744 2,205
     
    COMMITMENTS AND CONTINGENCIES
     
    EQUITY

    General partner, representing a 0.1% interest, 79,420 and 53,676 notional units at March 31, 2014 and 2013, respectively

    (45,287 ) (50,497 )
    Limited partners, representing a 99.9% interest -

    Common units, 73,421,309 and 47,703,313 units issued and outstanding at March 31, 2014 and 2013, respectively

    1,570,074 920,998

    Subordinated units, 5,919,346 units issued and outstanding at March 31, 2014 and 2013

    2,028 13,153
    Accumulated other comprehensive income (loss) (236 ) 24
    Noncontrolling interests   5,274     5,740  
    Total equity   1,531,853     889,418  
    Total liabilities and equity $ 4,167,223  

     

    $ 2,291,618  
     

    NGL ENERGY PARTNERS LP

    Consolidated Statements of Operations

    For the Years Ended December 31, 2014, 2013 and 2012

    (U.S. Dollars in Thousands, except unit and per unit amounts)

     
    Year Ended March 31,
      2014       2013     2012  
    REVENUES:
    Crude oil logistics $ 4,558,545 $ 2,316,288 $ -
    Water solutions 143,100 62,227 -
    Liquids 2,650,425 1,604,746 1,111,139
    Retail propane 551,815 430,273 199,334
    Refined products 1,180,895 - -
    Renewables 176,781 - -
    Other   437,713     4,233     -  
    Total Revenues   9,699,274     4,417,767     1,310,473  
     
    COST OF SALES:
    Crude oil logistics 4,477,397 2,244,647 -
    Water solutions 11,738 5,611 -
    Liquids 2,518,099 1,530,459 1,086,881
    Retail propane 354,676 258,393 130,142
    Refined products 1,172,754 - -
    Renewables 171,422 - -
    Other   426,613     -     -  
    Total Cost of Sales   9,132,699     4,039,110     1,217,023  
     
    OPERATING COSTS AND EXPENSES:
    Operating 259,396 169,799 47,300
    General and administrative 79,860 52,698 16,009
    Depreciation and amortization   120,754     68,853     15,111  
    Operating Income 106,565 87,307 15,030
     
    OTHER INCOME (EXPENSE):
    Earnings of unconsolidated entities 1,898 - -
    Interest expense (58,854 ) (32,994 ) (7,620 )
    Loss on early extinguishment of debt - (5,769 ) -
    Other, net   86     1,521     1,055  
    Income Before Income Taxes 49,695 50,065 8,465
     
    INCOME TAX PROVISION   (937 )   (1,875 )   (601 )
     
    Net Income 48,758 48,190 7,864
     
    NET INCOME ALLOCATED TO GENERAL PARTNER (14,148 ) (2,917 ) (8 )
     
    NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS (1,103 ) (250 ) 12
         
    NET INCOME ALLOCATED TO LIMITED PARTNERS $ 33,507   $ 45,023   $ 7,868  
     
     
    BASIC AND DILUTED INCOME PER COMMON UNIT $ 0.51   $ 0.96   $ 0.32  
     
    BASIC AND DILUTED INCOME PER SUBORDINATED UNIT $ 0.32   $ 0.93   $ 0.58  
     
    BASIC AND DILUTED WEIGHTED AVERAGE UNITS OUTSTANDING:
    Common units   61,970,471     41,353,574     15,169,983  
    Subordinated units   5,919,346     5,919,346     5,175,384  

    ADJUSTED EBITDA RECONCILIATION

    The following table reconciles net income attributable to parent equity to EBITDA and Adjusted EBITDA, each of which are non-GAAP financial measures, for the periods indicated:

      Year Ended March 31,
      2014       2013     2012  
    (in thousands)
    Net income attributable to parent equity $ 47,655 $ 47,940 $ 7,876
    Income tax provision 937 1,875 601
    Interest expense 58,871 32,994 7,620
    Loss on early extinguishment of debt - 5,769 -
    Depreciation and amortization   127,821     73,739   15,911  
    EBITDA 235,284 162,317 32,008
    Unrealized (gain) loss on derivative contracts (1,327 ) 5,275 4,384
    Loss (gain) on disposal or impairment of assets 3,597 187 (71 )
    Share-based compensation expense   17,804     10,138   -  
    Adjusted EBITDA $ 255,358   $ 177,917 $ 36,321  





    NGL Energy Partners LP

    Atanas H. Atanasov, 918-481-1119

    Chief Financial Officer and Treasurer

    atanas.atanasov@nglep.com


    Source: NGL Energy Partners LP


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