NGL Energy Partners LP NGL today reported Adjusted EBITDA of $67.6 million for the three months ended September 30, 2015 (exclusive of $0.6 million of advisory and legal costs related to acquisitions) compared to Adjusted EBITDA of $70.4 million for the three months ended September 30, 2014 (exclusive of $3.2 million of advisory and legal costs related to acquisitions and $5.0 million of severance/compensation costs related to the Gavilon and TransMontaigne acquisitions). NGL reported a net loss of $24.2 million for the three months ended September 30, 2015, compared to a net loss of $15.9 million for the three months ended September 30, 2014.
For the six months ended September 30, 2015, NGL reported Adjusted EBITDA of $156.6 million (exclusive of $0.6 million of advisory and legal costs related to acquisitions), compared to Adjusted EBITDA of $113.5 million during the six months ended September 30, 2014 (exclusive of $4.3 million of advisory and legal costs related to acquisitions and $7.7 million of severance/retention costs related to the Gavilon and TransMontaigne acquisitions). NGL reported a net loss of $62.7 million for the six months ended September 30, 2015, compared to a net loss of $55.8 million for the six months ended September 30, 2014.
"NGL delivered another solid quarter in an overall challenged energy environment growing our EBITDA year to date by approximately 40% over the previous year. We are focused on completing our previously announced organic projects, originating additional such projects, and increasing the partnership's fee-based cash flows to two-thirds by fiscal 2018," said Mike Krimbill, CEO of NGL Energy Partners.
A conference call to discuss NGL's results of operations is scheduled for 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on Tuesday, November 10, 2015. Analysts, investors, and other interested parties may access the conference call by dialing (855) 436-2710 and providing access code 70634807. An archived audio replay of the conference call will be available for 7 days beginning at 7:00 p.m. Eastern Time (6:00 p.m. Central Time) on November 10, 2015 and can be accessed by dialing (855) 859-2056 and providing access code 70634807. A presentation of the results will be posted before the conference call at NGL's Investor Relations website at www.nglenergypartners.com/investor-relations/presentations/.
NGL defines EBITDA as net income (loss) attributable to parent equity, plus interest expense, income tax provision (benefit), and depreciation and amortization expense. NGL defines Adjusted EBITDA as EBITDA excluding net unrealized gains and losses on derivatives, lower of cost or market adjustments, gains and losses on disposal or impairment of assets, and equity-based compensation expense. NGL also includes in Adjusted EBITDA certain inventory valuation adjustments related to its refined products and renewables segment, as described below. EBITDA and Adjusted EBITDA should not be considered alternatives to net income, income before income taxes, cash flows from operating activities, or any other measure of financial performance calculated in accordance with accounting principles generally accepted in the United States ("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 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 to investors for evaluating NGL's 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, Adjusted EBITDA or similarly titled measures used by other entities.
Other than for its refined products and renewables segment, for purposes of its 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 its refined products and renewables segment. The primary hedging strategy of NGL's refined products and renewables segment 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 are six months to one year in duration at inception. The "inventory valuation adjustment" row in the table below reflects the excess of the market value of the inventory of the refined products and renewables segment at the balance sheet date over its cost. NGL adds this to Adjusted EBITDA because the gains and losses associated with derivative contracts of this segment, which are intended primarily to hedge inventory holding risk, also impact Adjusted EBITDA.
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 five primary businesses: crude oil logistics, water solutions, liquids, retail propane, and refined products and renewables. For further information, visit the Partnership's website at www.nglenergypartners.com.
NGL ENERGY PARTNERS LP AND SUBSIDIARIES | ||||||||
Unaudited Condensed Consolidated Balance Sheets | ||||||||
(U.S. Dollars in Thousands, except unit amounts) | ||||||||
September 30, | March 31, | |||||||
2015 | 2015 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 30,053 | $ | 41,303 | ||||
Accounts receivable–trade, net of allowance for doubtful accounts of $5,995 | ||||||||
and $4,367, respectively | 712,025 | 1,024,226 | ||||||
Accounts receivable–affiliates | 6,345 | 17,198 | ||||||
Inventories | 408,374 | 441,762 | ||||||
Prepaid expenses and other current assets | 120,122 | 120,855 | ||||||
Total current assets | 1,276,919 | 1,645,344 | ||||||
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of | ||||||||
$270,332 and $202,959, respectively | 1,845,112 | 1,617,389 | ||||||
GOODWILL | 1,490,928 | 1,402,761 | ||||||
INTANGIBLE ASSETS, net of accumulated amortization of $274,823 and $220,517, | ||||||||
respectively | 1,231,192 | 1,288,343 | ||||||
INVESTMENTS IN UNCONSOLIDATED ENTITIES | 473,239 | 472,673 | ||||||
LOAN RECEIVABLE–AFFILIATE | 23,775 | 8,154 | ||||||
OTHER NONCURRENT ASSETS | 108,672 | 112,837 | ||||||
Total assets | $ | 6,449,837 | $ | 6,547,501 | ||||
LIABILITIES AND EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable–trade | $ | 568,523 | $ | 833,380 | ||||
Accounts payable–affiliates | 18,794 | 25,794 | ||||||
Accrued expenses and other payables | 164,433 | 195,116 | ||||||
Advance payments received from customers | 96,380 | 54,234 | ||||||
Current maturities of long-term debt | 4,040 | 4,472 | ||||||
Total current liabilities | 852,170 | 1,112,996 | ||||||
LONG-TERM DEBT, net of current maturities | 3,093,694 | 2,745,299 | ||||||
OTHER NONCURRENT LIABILITIES | 17,679 | 16,086 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
EQUITY: | ||||||||
General partner, representing a 0.1% interest, 105,269 and 103,899 notional units, respectively | (34,380 | ) | (37,021 | ) | ||||
Limited partners, representing a 99.9% interest, 105,164,071 and 103,794,870 common units | ||||||||
issued and outstanding, respectively | 1,976,663 | 2,162,924 | ||||||
Accumulated other comprehensive loss | (136 | ) | (109 | ) | ||||
Noncontrolling interests | 544,147 | 547,326 | ||||||
Total equity | 2,486,294 | 2,673,120 | ||||||
Total liabilities and equity | $ | 6,449,837 | $ | 6,547,501 |
NGL ENERGY PARTNERS LP AND SUBSIDIARIES | ||||||||||||||||
Unaudited Condensed Consolidated Statements of Operations | ||||||||||||||||
(U.S. Dollars in Thousands, except unit and per unit amounts) | ||||||||||||||||
Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
REVENUES: | ||||||||||||||||
Crude oil logistics | $ | 1,007,578 | $ | 2,111,143 | $ | 2,335,362 | $ | 4,040,426 | ||||||||
Water solutions | 47,494 | 52,719 | 101,787 | 100,033 | ||||||||||||
Liquids | 258,992 | 539,753 | 507,977 | 1,014,910 | ||||||||||||
Retail propane | 53,206 | 68,358 | 117,653 | 146,260 | ||||||||||||
Refined products and renewables | 1,825,925 | 2,607,220 | 3,668,885 | 3,724,717 | ||||||||||||
Other | - | 1,333 | - | 2,794 | ||||||||||||
Total Revenues | 3,193,195 | 5,380,526 | 6,731,664 | 9,029,140 | ||||||||||||
COST OF SALES: | ||||||||||||||||
Crude oil logistics | 982,719 | 2,083,712 | 2,274,711 | 3,981,351 | ||||||||||||
Water solutions | (8,567 | ) | (9,439 | ) | (4,960 | ) | 1,134 | |||||||||
Liquids | 221,115 | 514,064 | 453,391 | 976,080 | ||||||||||||
Retail propane | 20,879 | 39,894 | 50,443 | 87,418 | ||||||||||||
Refined products and renewables | 1,789,680 | 2,550,851 | 3,554,792 | 3,665,164 | ||||||||||||
Other | - | 383 | - | 2,371 | ||||||||||||
Total Cost of Sales | 3,005,826 | 5,179,465 | 6,328,377 | 8,713,518 | ||||||||||||
OPERATING COSTS AND EXPENSES: | ||||||||||||||||
Operating | 99,773 | 97,419 | 207,687 | 164,855 | ||||||||||||
General and administrative | 29,298 | 41,639 | 91,779 | 69,512 | ||||||||||||
Depreciation and amortization | 56,761 | 50,099 | 116,592 | 89,474 | ||||||||||||
Loss on disposal or impairment of assets, net | 1,291 | 4,134 | 1,712 | 4,566 | ||||||||||||
Operating Income (Loss) | 246 | 7,770 | (14,483 | ) | (12,785 | ) | ||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||
Equity in earnings of unconsolidated entities | 2,432 | 3,697 | 11,150 | 6,262 | ||||||||||||
Interest expense | (31,571 | ) | (28,651 | ) | (62,373 | ) | (49,145 | ) | ||||||||
Other income (expense), net | 1,955 | (617 | ) | 780 | (1,008 | ) | ||||||||||
Loss Before Income Taxes |
(26,938 | ) | (17,801 | ) | (64,926 | ) | (56,676 | ) | ||||||||
INCOME TAX BENEFIT | 2,786 | 1,922 | 2,248 | 887 | ||||||||||||
Net Loss | (24,152 | ) | (15,879 | ) | (62,678 | ) | (55,789 | ) | ||||||||
LESS: NET INCOME ALLOCATED TO GENERAL PARTNER | (16,166 | ) | (11,056 | ) | (31,525 | ) | (20,437 | ) | ||||||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | (2,891 | ) | (3,345 | ) | (6,766 | ) | (3,410 | ) | ||||||||
NET LOSS ALLOCATED TO LIMITED PARTNERS | $ | (43,209 | ) | $ | (30,280 | ) | $ | (100,969 | ) | $ | (79,636 | ) | ||||
BASIC AND DILUTED LOSS PER COMMON UNIT | $ | (0.41 | ) | $ | (0.34 | ) | $ | (0.97 | ) | $ | (0.93 | ) | ||||
BASIC AND DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING | 105,189,463 | 88,331,653 | 104,542,427 | 81,267,742 |
ADJUSTED EBITDA RECONCILIATION | ||||||||||||||||
The following table reconciles net loss to our EBITDA and Adjusted EBITDA, each of which are non-GAAP financial measures: | ||||||||||||||||
Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
(in thousands) | ||||||||||||||||
Net loss | $ | (24,152 | ) | $ | (15,879 | ) | $ | (62,678 | ) | $ | (55,789 | ) | ||||
Net income attributable to noncontrolling interests | (2,891 | ) | (3,345 | ) | (6,766 | ) | (3,410 | ) | ||||||||
Net loss attributable to parent equity | (27,043 | ) | (19,224 | ) | (69,444 | ) | (59,199 | ) | ||||||||
Interest expense | 29,520 | 27,929 | 58,168 | 48,446 | ||||||||||||
Income tax benefit | (2,805 | ) | (1,933 | ) | (2,284 | ) | (898 | ) | ||||||||
Depreciation and amortization | 53,299 | 48,366 | 107,467 | 92,716 | ||||||||||||
EBITDA | 52,971 | 55,138 | 93,907 | 81,065 | ||||||||||||
Net unrealized gains on derivatives | (6,286 | ) | (13,700 | ) | (2,746 | ) | (8,690 | ) | ||||||||
Inventory valuation adjustment | 9,197 | - | 19,355 | - | ||||||||||||
Lower of cost or market adjustments | 414 | 2,837 | (5,926 | ) | 2,837 | |||||||||||
Loss on disposal or impairment of assets, net | 1,294 | 4,150 | 1,713 | 4,608 | ||||||||||||
Equity-based compensation expense | 9,448 | 13,745 | 49,680 | 21,659 | ||||||||||||
Adjusted EBITDA | $ | 67,038 | $ | 62,170 | $ | 155,983 | $ | 101,479 |
View source version on businesswire.com: http://www.businesswire.com/news/home/20151109006759/en/
NGL Energy Partners LP
Atanas H. Atanasov, 918-481-1119
Chief
Financial Officer and Treasurer
atanas.atanasov@nglep.com
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