NGL Energy Partners LP (NYSE:NGL) (“NGL,” ““we,” “us,” “our,” or
the “Partnership”) today reported its fourth quarter and full year
fiscal 2024 results.
Highlights for the fiscal year and quarter ended March 31, 2024
include:
- A net loss for full year Fiscal 2024 of $143.1 million,
compared to net income of $52.5 million for full year Fiscal 2023;
a net loss for the fourth quarter of Fiscal 2024 of $236.7 million,
compared to a net loss of $33.2 million for the fourth quarter of
Fiscal 2023. The fourth quarter of Fiscal 2024 includes a loss from
the impairment of goodwill, an adverse litigation judgment and call
premiums and other costs related to our refinancing.
- Adjusted EBITDA(1) for full year Fiscal 2024 of $610.1 million,
compared to $632.7 million for full year Fiscal 2023; Adjusted
EBITDA(1) for the fourth quarter of Fiscal 2024 of $147.5 million,
compared to $173.3 million for the fourth quarter of Fiscal
2023
- Record Water Solutions’ Adjusted EBITDA(1) of $508.3 million
for full year Fiscal 2024, a 10% increase over the prior year
- Record Water Solutions’ annual water disposal volumes processed
of 884.6 million for full year Fiscal 2024, a 4.1% increase over
the prior year
- 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 consisting of a private offering of $2.2 billion of
senior secured notes, which includes $900.0 million of 8.125%
senior secured notes due 2029 and $1.3 billion of 8.375% senior
secured notes due 2032. We also entered into a new seven-year
$700.0 million senior secured term loan “B” credit facility. The
net proceeds from these transactions were used to fund the
redemption of the 2026 senior secured notes and the 2025 and 2026
senior unsecured notes.
- On February 6, 2024, the board of directors of our general
partner declared a cash distribution of 50% of the outstanding
arrearages through December 31, 2023 to the holders of the Class B
preferred units, the Class C preferred units and the Class D
preferred units. The total distribution of $178.3 million was made
on February 27, 2024 to the holders of record at the close of
trading on February 16, 2024.
Highlights for the period subsequent to March 31, 2024
included:
- On April 4, 2024, the board of directors of our general partner
declared a cash distribution of 55.4% of the outstanding
distribution arrearages through the quarter ended March 31, 2024 to
the holders of the Class B preferred units, the Class C preferred
units and the Class D preferred units. The total distribution of
$120.0 million was made on April 18, 2024 to the holders of record
at the close of trading on April 12, 2024.
- On April 5, 2024, we closed on the sale of two ranches located
in Eddy and Lea Counties, New Mexico for total consideration of
$69.3 million, including working capital.
- On April 9, 2024, the board of directors of our general partner
declared a cash distribution to fully pay the remaining
distribution arrearages to the holders of the Class B preferred
units, the Class C preferred units and the Class D preferred units.
The total distribution of $98.1 million was made on April 25, 2024
to the holders of record at the close of trading on April 19,
2024.
- During April and May 2024, we closed on the sale of certain
saltwater disposal assets in the Delaware Basin and certain real
estate located in Lea County, New Mexico for total consideration of
approximately $12.2 million.
- On June 5, 2024, the board of directors of our GP authorized a
common unit repurchase program, under which we may repurchase up to
$50.0 million of our outstanding common units from time to time in
the open market or in other privately negotiated transactions. This
program does not have a fixed expiration date.
“The Partnership ended Fiscal 2024, with Adjusted EBITDA(1)
exceeding $610 million. Water Solutions achieved record annual
water disposal volumes processed and Adjusted EBITDA(1), the
Partnership executed a global refinancing, and sold non-core assets
at attractive multiples. Fiscal 2025 holds more opportunities for
growth projects with attractive returns, and continued reduction of
our total leverage at fiscal 2025 year-end. NGL made two arrearage
catch-up payments in Fiscal 2025, and became current on all
preferred classes B, C and D’s in April,” stated Mike Krimbill,
NGL’s CEO. “We are guiding Fiscal 2025 Water Solutions Adjusted
EBITDA(1) to a range of $550 - $560 million and full year
consolidated Adjusted EBITDA(1) of $665 million. Also, we are
guiding to $210 million in total maintenance and growth capital
expenditures for Fiscal 2025,” 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.
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, 2024
March 31, 2023
Operating
Income (Loss)
Adjusted
EBITDA(1)
Operating
Income (Loss)
Adjusted
EBITDA(1)
(in thousands)
Water Solutions
$
28,537
$
123,440
$
38,470
$
131,558
Crude Oil Logistics
3,279
15,339
(5,488
)
29,715
Liquids Logistics
(51,376
)
21,817
17,818
28,469
Corporate and Other
(62,707
)
(13,054
)
(20,340
)
(16,441
)
Total
$
(82,267
)
$
147,542
$
30,460
$
173,301
Water Solutions
Operating income for the Water Solutions segment decreased by
$9.9 million for the quarter ended March 31, 2024, compared to the
quarter ended March 31, 2023. The Partnership processed
approximately 2.39 million barrels of water per day during the
quarter ended March 31, 2024, a 3.0% decrease when compared to
approximately 2.46 million barrels of water per day processed
during the quarter ended March 31, 2023. The decrease in produced
water volumes processed was primarily due to certain producers in
the Delaware Basin reusing their water in their operations. Service
fees for produced water processed ($/barrel) were lower during the
quarter due to rate changes for certain existing contracts and the
expiration of certain higher fee per barrel contracts which were
replaced with lower fee per barrel contracts with an extended term.
In addition, there was a decrease in payments made by certain
producers for committed volumes not delivered which also impacted
service fees for produced water processed ($/barrel).
Revenues from recovered skim oil, including the impact from
realized skim oil hedges, totaled $28.5 million for the quarter
ended March 31, 2024, an increase of $4.0 million from the prior
year period. The increase was due primarily to an increase in skim
oil barrels sold as a result of 34,380 barrels of skim oil that
were stored as of March 31, 2023 due to tighter pipeline
specifications and higher realized crude oil prices received from
the sale of skim oil barrels.
Operating expenses in the Water Solutions segment decreased $4.5
million for the quarter ended March 31, 2024, compared to the
quarter ended March 31, 2023 due primarily to lower produced water
volumes processed, which resulted in lower chemical and utility
expense. Operating expense per produced barrel processed was $0.23
for the quarter ended March 31, 2024, compared to $0.24 in the
comparative quarter last year.
Crude Oil Logistics
Operating income for the Crude Oil Logistics segment increased
by $8.8 million for the quarter ended March 31, 2024, compared to
the quarter ended March 31, 2023. Operating income for the fourth
quarter of Fiscal 2024 includes a loss from the disposal or
impairment of assets of $0.6 million, compared to a loss of $32.4
million in the same period of the prior year. Excluding these
amounts, operating income decreased by $23.0 million for the fourth
quarter of Fiscal 2024. Product margin for crude oil sales
decreased approximately $14.3 million due to lower production on
acreage dedicated to us in the DJ Basin, lower margins realized as
the result of a contract expiration on December 31, 2023 and the
sale of the Marine business in March 2023. Operating income also
decreased due to net losses on derivative contracts of $14.2
million, which is comprised of net losses of $6.8 million in the
current quarter, versus net gains of $7.4 million in the prior year
quarter. These decreases were partially offset by $5.5 million from
lower operating expenses and lower depreciation expense primarily
due to the sale of the Marine business. During the three months
ended March 31, 2024, physical volumes on the Grand Mesa Pipeline
averaged approximately 67,000 barrels per day, compared to
approximately 76,000 barrels per day for the three months ended
March 31, 2023.
Liquids Logistics
Operating income for the Liquids Logistics segment decreased by
$69.2 million for the quarter ended March 31, 2024, compared to the
quarter ended March 31, 2023. Operating income for the fourth
quarter of Fiscal 2024 includes an impairment loss of $69.2
million, compared to an impairment loss of $10.1 million in the
same period of the prior year. Excluding these amounts, operating
income decreased by $10.1 million for the fourth quarter of Fiscal
2024. This decrease is primarily due to lower propane margins due
to a decrease in volumes as a result of the closure or sale of
several terminals earlier in the fiscal year and warmer than
average temperatures compared to the prior year quarter. Refined
products decreased as the demand for gasoline was weak, relative to
supply, which led to lower margins. These decreases were partially
offset by higher butane margins (excluding the impact of
derivatives), as we had a stronger blending market from January
through mid-February during the quarter ended March 31, 2024. For
the current quarter, we recognized $6.0 million of gains from net
derivative activity, compared to $2.3 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
$539.4 million as of March 31, 2024. On March 31, 2024, there were
no borrowings under the ABL Facility, compared to $138.0 million in
outstanding borrowings at March 31, 2023. The ABL Facility was paid
off with funds from the debt refinancing transaction in February
2024.
As of March 31, 2024, the Partnership is in compliance with all
of its debt covenants and has no significant current debt
maturities before February 2029.
Fourth Quarter Conference Call Information
A conference call to discuss NGL’s results of operations is
scheduled for 4:00 pm Central Time on Thursday, June 6, 2024.
Analysts, investors, and other interested parties may join the
webcast via the event link:
https://www.webcaster4.com/Webcast/Page/2808/50611 or by dialing
(888) 506-0062 and providing access code: 410412. 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
50611.
NGL filed its Annual Report on Form 10-K for the year ended
March 31, 2024 with the Securities and Exchange Commission after
market on June 6, 2024. 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
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, revaluation of liabilities 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 (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. 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 $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 differed from period to
period depending on the current crude oil price and future
estimated crude oil price which were valued utilizing third-party
market quoted prices. We recognized 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 hedged
each month through the term of this transaction. This
representation aligns with management’s evaluation of the
transaction. The derivative instrument positions we entered into
related to the CMA Differential Roll expired as of December 31,
2023, and we have not entered into any new derivative instrument
positions related to the CMA Differential Roll.
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 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 master limited partnership,
is a diversified midstream energy partnership that transports,
treats, recycles and disposes of produced and flowback water
generated as part of the energy production process as well as
transports, stores, markets and provides other logistics services
for crude oil and liquid hydrocarbons.
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,
2024
2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
38,909
$
5,431
Accounts receivable-trade, net of
allowance for expected credit losses of $1,671 and $1,964,
respectively
814,087
1,033,956
Accounts receivable-affiliates
1,501
12,362
Inventories
130,907
142,607
Prepaid expenses and other current
assets
126,933
98,089
Assets held for sale
66,597
—
Total current assets
1,178,934
1,292,445
PROPERTY, PLANT AND EQUIPMENT, net of
accumulated depreciation of $1,011,274 and $898,184,
respectively
2,096,702
2,223,380
GOODWILL
634,282
712,364
INTANGIBLE ASSETS, net of accumulated
amortization of $332,560 and $580,860, respectively
939,978
1,058,668
INVESTMENTS IN UNCONSOLIDATED ENTITIES
20,305
21,090
OPERATING LEASE RIGHT-OF-USE ASSETS
97,155
90,220
OTHER NONCURRENT ASSETS
52,738
57,977
Total assets
$
5,020,094
$
5,456,144
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable-trade
$
707,536
$
927,591
Accounts payable-affiliates
37
65
Accrued expenses and other payables
213,757
133,616
Advance payments received from
customers
17,313
14,699
Current maturities of long-term debt
7,000
—
Operating lease obligations
31,090
34,166
Liabilities held for sale
614
—
Total current liabilities
977,347
1,110,137
LONG-TERM DEBT, net of debt issuance costs
of $49,178 and $30,117, respectively, and current maturities
2,843,822
2,857,805
OPERATING LEASE OBLIGATIONS
70,573
58,450
OTHER NONCURRENT LIABILITIES
129,185
111,226
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, 132,645 and 132,059 notional units, respectively
(52,834
)
(52,551
)
Limited partners, representing a 99.9%
interest, 132,512,766 and 131,927,343 common units issued and
outstanding, respectively
134,807
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
(499
)
(450
)
Noncontrolling interests
18,237
16,507
Total equity
448,070
767,429
Total liabilities and equity
$
5,020,094
$
5,456,144
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,
2024
2023
2024
2023
REVENUES:
Water Solutions
$
172,971
$
185,807
$
730,818
$
697,038
Crude Oil Logistics
276,667
493,055
1,656,064
2,464,822
Liquids Logistics
1,179,956
1,369,972
4,569,689
5,533,044
Total Revenues
1,629,594
2,048,834
6,956,571
8,694,904
COST OF SALES:
Water Solutions
3,874
421
11,294
14,100
Crude Oil Logistics
254,546
442,474
1,521,190
2,250,934
Liquids Logistics
1,144,463
1,326,449
4,435,247
5,383,809
Corporate and Other
2
1,181
(937
)
1,181
Total Cost of Sales
1,402,885
1,770,525
5,966,794
7,650,024
OPERATING COSTS AND EXPENSES:
Operating
72,000
76,354
305,185
313,725
General and administrative
66,160
21,217
121,881
71,818
Depreciation and amortization
66,421
69,516
266,523
273,621
Loss on disposal or impairment of assets,
net
101,715
71,097
115,936
86,888
Revaluation of liabilities
2,680
9,665
2,680
9,665
Operating (Loss) Income
(82,267
)
30,460
177,572
289,163
OTHER INCOME (EXPENSE):
Equity in earnings of unconsolidated
entities
2,340
1,026
4,120
4,120
Interest expense
(94,553
)
(63,917
)
(269,923
)
(275,445
)
(Loss) gain on early extinguishment of
liabilities, net
(62,152
)
(631
)
(55,281
)
6,177
Other income, net
1,662
17
2,793
28,748
(Loss) Income Before Income Taxes
(234,970
)
(33,045
)
(140,719
)
52,763
INCOME TAX EXPENSE
(1,769
)
(158
)
(2,405
)
(271
)
Net (Loss) Income
(236,739
)
(33,203
)
(143,124
)
52,492
LESS: NET INCOME ATTRIBUTABLE TO
NONCONTROLLING INTERESTS
(27
)
(316
)
(631
)
(1,106
)
NET (LOSS) INCOME ATTRIBUTABLE TO NGL
ENERGY PARTNERS LP
$
(236,766
)
$
(33,519
)
$
(143,755
)
$
51,386
NET LOSS ALLOCATED TO COMMON
UNITHOLDERS
$
(272,169
)
$
(67,661
)
$
(283,116
)
$
(73,232
)
BASIC AND DILUTED LOSS PER COMMON UNIT
$
(2.05
)
$
(0.51
)
$
(2.14
)
$
(0.56
)
BASIC AND DILUTED WEIGHTED AVERAGE COMMON
UNITS OUTSTANDING
132,512,766
131,631,271
132,146,477
131,007,171
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,
2024
2023
2024
2023
(in thousands)
Net (loss) income
$
(236,739
)
$
(33,203
)
$
(143,124
)
$
52,492
Less: Net income attributable to
noncontrolling interests
(27
)
(316
)
(631
)
(1,106
)
Net (loss) income attributable to NGL
Energy Partners LP
(236,766
)
(33,519
)
(143,755
)
51,386
Interest expense
94,552
63,932
270,004
275,505
Income tax expense
1,769
158
2,405
271
Depreciation and amortization
66,282
69,519
266,287
273,544
EBITDA
(74,163
)
100,090
394,941
600,706
Net unrealized losses (gains) on
derivatives
7,145
6,492
63,762
(50,438
)
CMA Differential Roll net losses (gains)
(1)
—
(15,877
)
(71,285
)
3,547
Inventory valuation adjustment (2)
1,972
(1,030
)
(3,419
)
(7,795
)
Lower of cost or net realizable value
adjustments
(1,932
)
177
1,337
(11,534
)
Loss on disposal or impairment of assets,
net
101,651
71,097
115,555
86,872
Loss (gain) on early extinguishment of
liabilities, net
62,152
631
55,281
(6,177
)
Equity-based compensation expense
—
852
1,098
2,718
Revaluation of liabilities (3)
2,680
9,665
2,680
9,665
Other (4)
48,037
1,204
50,131
5,111
Adjusted EBITDA
$
147,542
$
173,301
$
610,081
$
632,675
Less: Cash interest expense (5)
91,773
59,707
254,709
258,679
Less: Income tax expense
1,769
158
2,405
271
Less: Maintenance capital expenditures
13,189
20,599
54,854
61,649
Less: CMA Differential Roll (6)
—
(14,439
)
(27,165
)
(27,652
)
Less: Preferred unit distributions
paid
178,299
—
178,299
—
Less: Other (7)
—
220
222
391
Distributable Cash Flow
$
(137,488
)
$
107,056
$
146,757
$
339,337
___________
(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 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.
(4)
Amounts represent accretion expense for
asset retirement obligations, unrealized gains/losses on marketable
securities and expenses incurred related to legal and advisory
costs associated with acquisitions and dispositions, including the
accrued judgment related to the LCT Capital, LLC legal matter,
excluding interest, and the write-off of the legal costs related to
the LCT Capital, LLC legal matter that were originally allocated to
the Partnership’s general partner as reported in the footnotes to
our consolidated financial statements included in the Partnership’s
Annual Report on Form 10-K for the year ended March 31, 2024. Also,
the amount for the year ended March 31, 2023 includes the write off
of an asset acquired in a prior period acquisition and 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
(Unaudited)
Three Months Ended March 31,
2024
Water
Solutions
Crude Oil
Logistics
Liquids
Logistics
Corporate
and Other
Consolidated
(in thousands)
Operating income (loss)
$
28,537
$
3,279
$
(51,376
)
$
(62,707
)
$
(82,267
)
Depreciation and amortization
55,361
8,058
2,337
665
66,421
Amortization recorded to cost of sales
—
—
65
—
65
Net unrealized losses on derivatives
2,354
4,113
678
—
7,145
Inventory valuation adjustment
—
—
1,972
—
1,972
Lower of cost or net realizable value
adjustments
—
(785
)
(1,147
)
—
(1,932
)
Loss (gain) on disposal or impairment of
assets, net
31,799
623
69,298
(5
)
101,715
Other income (expense), net
194
(1
)
5
1,464
1,662
Adjusted EBITDA attributable to
unconsolidated entities
2,419
—
7
(13
)
2,413
Adjusted EBITDA attributable to
noncontrolling interest
(371
)
—
—
—
(371
)
Revaluation of liabilities
2,680
—
—
—
2,680
Other
467
52
(22
)
47,542
48,039
Adjusted EBITDA
$
123,440
$
15,339
$
21,817
$
(13,054
)
$
147,542
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
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
979
105
39
95
1,218
Adjusted EBITDA
$
131,558
$
29,715
$
28,469
$
(16,441
)
$
173,301
Year Ended March 31,
2024
Water
Solutions
Crude Oil
Logistics
Liquids
Logistics
Corporate
and Other
Consolidated
(in thousands)
Operating income (loss)
$
231,256
$
52,074
$
2,481
$
(108,239
)
$
177,572
Depreciation and amortization
214,480
36,922
10,372
4,749
266,523
Amortization recorded to cost of sales
—
—
260
—
260
Net unrealized losses (gains) on
derivatives
385
65,786
(1,230
)
(1,179
)
63,762
CMA Differential Roll net losses
(gains)
—
(71,285
)
—
—
(71,285
)
Inventory valuation adjustment
—
—
(3,419
)
—
(3,419
)
Lower of cost or net realizable value
adjustments
—
—
1,337
—
1,337
Loss (gain) on disposal or impairment of
assets, net
53,639
3,094
59,923
(720
)
115,936
Equity-based compensation expense
—
—
—
1,098
1,098
Other income, net
1,110
105
12
1,566
2,793
Adjusted EBITDA attributable to
unconsolidated entities
4,393
—
(12
)
124
4,505
Adjusted EBITDA attributable to
noncontrolling interest
(1,821
)
—
—
—
(1,821
)
Revaluation of liabilities
2,680
—
—
—
2,680
Other
2,186
191
230
47,533
50,140
Adjusted EBITDA
$
508,308
$
86,887
$
69,954
$
(55,068
)
$
610,081
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
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
2,894
203
1,933
95
5,125
Adjusted EBITDA
$
463,091
$
110,916
$
76,646
$
(17,978
)
$
632,675
OPERATIONAL DATA
(Unaudited)
Three Months Ended
Year Ended
March 31,
March 31,
2024
2023
2024
2023
(in thousands, except per day
amounts)
Water Solutions:
Produced water processed (barrels per
day)
Delaware Basin
2,086,047
2,169,690
2,123,337
2,042,777
Eagle Ford Basin
161,976
135,552
142,374
119,458
DJ Basin
143,237
147,033
150,426
150,619
Other Basins
—
12,555
740
14,483
Total
2,391,260
2,464,830
2,416,877
2,327,337
Recycled water (barrels per day)
87,129
76,056
84,212
118,847
Total (barrels per day)
2,478,389
2,540,886
2,501,089
2,446,184
Skim oil sold (barrels per day)
4,217
3,785
3,992
3,764
Crude Oil Logistics:
Crude oil sold (barrels)
3,338
6,069
20,068
25,497
Crude oil transported on owned pipelines
(barrels)
6,091
6,882
25,611
27,714
Crude oil storage capacity - owned and
leased (barrels) (1)
5,232
5,232
Crude oil inventory (barrels) (1)
573
684
Liquids Logistics:
Refined products sold (gallons)
185,832
202,154
817,634
769,151
Propane sold (gallons)
287,028
379,251
811,035
1,018,937
Butane sold (gallons)
142,897
130,521
537,015
539,658
Other products sold (gallons)
102,179
96,758
379,077
391,723
Natural gas liquids and refined products
storage capacity - owned and leased (gallons) (1)
130,441
160,329
Refined products inventory (gallons)
(1)
1,872
1,003
Propane inventory (gallons) (1)
35,177
48,379
Butane inventory (gallons) (1)
17,790
17,409
Other products inventory (gallons) (1)
20,112
12,893
___________
(1)
Information is presented as of March 31,
2024 and March 31, 2023, respectively.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240606989751/en/
David Sullivan, 918-495-4631 Vice President - Finance
David.Sullivan@nglep.com
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