NGL Energy Partners LP Announces Third Quarter Fiscal 2023 Financial Results

NGL Energy Partners LP (NYSE:NGL) (“NGL,” “our,” “we,” or the “Partnership”) today reported its third quarter Fiscal 2023 financial results. Highlights include:

Net income for the third quarter of Fiscal 2023 of $59.0 million, compared to a net loss of $19.0 million for the third quarter of Fiscal 2022; Net income for the first nine months of Fiscal 2023 of $85.7 million, compared to a net loss of $154.7 million for the comparable period of Fiscal 2022

Adjusted EBITDA(1) for the third quarter of Fiscal 2023 of $193.3 million, compared to $147.7 million for the third quarter of Fiscal 2022; Adjusted EBITDA for the first nine months of Fiscal 2023 of $459.4 million, compared to $385.1 million for the comparable period of 2022

Operating income for the Water Solutions segment of $59.7 million for the third quarter of Fiscal 2023, compared to $19.9 million for the third quarter of Fiscal 2022

Record Water Solutions’ quarterly Adjusted EBITDA(1) of $121.7 million for the third quarter of Fiscal 2023, a 47.1% increase compared to the third quarter of Fiscal 2022 and a 16.2% increase over the immediately preceding fiscal quarter

In the face of significant inflationary pressure, Water Solutions managed to reduce operating expense to $0.25 per barrel versus $0.27 per barrel in the immediately preceding fiscal quarter

Record produced water volumes processed of approximately 2.43 million barrels per day during the third quarter of Fiscal 2023, growing 31.9% from the same period in the prior year and 7.1% over the immediately preceding fiscal quarter

Increasing Water Solutions Adjusted EBITDA(2) guidance from $430 million plus to $440 million plus for Fiscal 2023

Reduced $98.1 million in principal on unsecured notes and equipment financing note in the quarter

Anticipate all 2023 unsecured notes to be repaid no later than June 30, 2023

“Our Water Solutions segment continues to see strong disposal volume and skim oil growth, achieving record Adjusted EBITDA(1) and water volumes processed in the quarter. This strong performance plus the return of working capital has allowed us to lean into the repurchase of our 2023 notes, $97.5 million in the current quarter. The current remaining balance is approximately $203 million, and our plan is to call the remaining 2023 notes no later than June 30, 2023. Paying off the 2023 notes is a key strategic goal as we look to drive down absolute debt and further reduce leverage. We are increasing guidance for our Water Solutions' Adjusted EBITDA(2) from over $430 million to over $440 million for full year Fiscal 2023 and maintaining $630 million plus consolidated Adjusted EBITDA(2) guidance. Due to the increasing activity and volumes in the Delaware Basin, we are adjusting our capital expenditure guidance to a range of $115 million - $125 million in order to keep up with our customers growth,” stated Mike Krimbill, NGL’s CEO. “As we’ve discussed before, we continue to work on sales of non-core assets in the fourth quarter that will continue to drive leverage lower,” 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) 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) from continuing operations by reportable segment for the periods indicated:

Quarter Ended

December 31, 2022

December 31, 2021

Operating

Income (Loss)

Adjusted

EBITDA(1)

Operating

Income (Loss)

Adjusted

EBITDA(1)

(in thousands)

Water Solutions

59,721

121,712

19,851

82,744

Crude Oil Logistics

35,096

33,260

21,291

29,764

Liquids Logistics

20,513

18,763

23,158

47,979

Corporate and Other

(12,660

)

19,521

(15,190

)

(12,747

)

Total

102,670

193,256

49,110

147,740

Water Solutions

Operating income for the Water Solutions segment increased $39.9 million for the quarter ended December 31, 2022, compared to the quarter ended December 31, 2021. The Partnership processed approximately 2.43 million barrels of produced water per day during the quarter ended December 31, 2022, a 31.9% increase when compared to approximately 1.84 million barrels of water per day processed during the quarter ended December 31, 2021. This increase was due to higher production volumes (and associated produced water) primarily in the Delaware Basin driven by higher crude oil prices and completion activity as well as higher fees charged for spot volumes. The Partnership also sold approximately 168,000 barrels per day of produced and recycled water for use in our customers’ completion activities.

Revenues from recovered skim oil totaled $30.3 million for the quarter ended December 31, 2022, an increase of $12.4 million from the prior year period. This increase was due to higher volumes of skim oil barrels sold due to an increase in produced water volumes processed as well as higher realized crude oil prices received from the sale of skim oil barrels. Additionally, an increase in the number of wells completed in our area of operations during the period with increased flowback activity resulted in higher skim oil volumes per barrel of produced water processed.

Operating expenses in the Water Solutions segment decreased to $0.25 per produced barrel processed compared to $0.26 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 Crude Oil Logistics segment increased $13.8 million for the quarter ended December 31, 2022, compared to the quarter ended December 31, 2021. The increase was due to higher product margins compared to the prior year period and an increase in net derivative gains of $7.7 million. Product margins increased due to higher contracted rates with certain producers as well as increased differentials on certain other sales contracts. Operating and general and administrative expenses declined by $2.3 million, primarily due to the sale of our trucking business during our fourth quarter of the prior year. In addition, during the prior year quarter, we recorded an impairment charge of $2.2 million due to damage caused by Hurricane Ida to one of our Gulf Coast terminals. During the three months ended December 31, 2022, physical volumes on the Grand Mesa Pipeline averaged approximately 77,000 barrels per day, compared to approximately 83,000 barrels per day for the three months ended December 31, 2021. Overall production in the DJ Basin continues to be negatively impacted by producer permitting issues.

Liquids Logistics

Operating income for the Liquids Logistics segment decreased $2.6 million for the quarter ended December 31, 2022, compared to the quarter ended December 31, 2021. Our Butane product margins (excluding the impact of derivatives) were lower as product purchased earlier in the season continues to compete with product purchased in a discounted market, resulting in our product being more expensive. Propane results are below expectations partially due to warmer than normal winter temperatures. Product margins for refined products also increased as we continue to be well positioned from a supply and inventory perspective in certain markets experiencing tight supply. For the current quarter, losses from net derivative activity for all products in this segment increased by $6.4 million, compared to the prior year quarter.

Capitalization and Liquidity

Total liquidity (cash plus available capacity on our asset-based revolving credit facility (“ABL Facility”)) was approximately $280.1 million as of December 31, 2022. Borrowings on the Partnership’s ABL Facility totaled approximately $156.0 million. The increase from March 31, 2022 was primarily due to increases in working capital balances driven by increased inventory volumes and higher net account receivable balances.

The Partnership is in compliance with all of its debt covenants and has no significant debt maturities before November 2023. The Partnership expects to pay off the remaining outstanding 2023 Notes no later than June 30, 2023 using cash flows from operations, and if needed, borrowings under our ABL Facility. Proceeds generated from other cash flow positive initiatives currently being pursued, such as sales of non-core assets, may also be used for additional debt reductions.

Third Quarter Conference Call Information

A conference call to discuss NGL’s results of operations is scheduled for 4:30 pm Central Time on Thursday, February 9, 2023. Analysts, investors, and other interested parties may join the webcast via the event link: https://www.webcaster4.com/Webcast/Page/2808/47555 or by dialing (888) 506-0062 and providing access code: 893513. 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 47555.

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 as alternatives to net income (loss), income (loss) 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 NGL is 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 Condensed Consolidated Balance Sheets

(in Thousands, except unit amounts)

December 31, 2022

March 31, 2022

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

4,534

3,822

Accounts receivable-trade, net of allowance for expected credit losses of $2,455 and $2,626, respectively

1,129,294

1,123,163

Accounts receivable-affiliates

10,257

8,591

Inventories

238,073

251,277

Prepaid expenses and other current assets

135,980

159,486

Total current assets

1,518,138

1,546,339

PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $1,000,765 and $887,006, respectively

2,400,508

2,462,390

GOODWILL

744,439

INTANGIBLE ASSETS, net of accumulated amortization of $563,075 and $507,285, respectively

1,078,631

1,135,354

INVESTMENTS IN UNCONSOLIDATED ENTITIES

22,769

21,897

OPERATING LEASE RIGHT-OF-USE ASSETS

85,576

114,124

OTHER NONCURRENT ASSETS

64,030

45,802

Total assets

5,914,091

6,070,345

LIABILITIES AND EQUITY

CURRENT LIABILITIES:

Accounts payable-trade

952,506

1,084,837

Accounts payable-affiliates

Accrued expenses and other payables

174,400

140,719

Advance payments received from customers

20,957

7,934

Current maturities of long-term debt

303,788

2,378

Operating lease obligations

32,883

41,261

Total current liabilities

1,484,599

1,277,202

LONG-TERM DEBT, net of debt issuance costs of $32,986 and $42,988, respectively, and current maturities

2,921,174

3,350,463

OPERATING LEASE OBLIGATIONS

53,518

72,784

OTHER NONCURRENT LIABILITIES

103,378

104,346

CLASS D 9.00% PREFERRED UNITS, 600,000 and 600,000 preferred units issued and outstanding, respectively

551,097

EQUITY:

General partner, representing a 0.1% interest, 131,453 and 130,827 notional units, respectively

(52,484

)

(52,478

)

Limited partners, representing a 99.9% interest, 131,321,742 and 130,695,970 common units issued and outstanding, respectively

488,221

401,486

Class B preferred limited partners, 12,585,642 and 12,585,642 preferred units issued and outstanding, respectively

305,468

Class C preferred limited partners, 1,800,000 and 1,800,000 preferred units issued and outstanding, respectively

42,891

Accumulated other comprehensive loss

(439

)

(308

)

Noncontrolling interests

16,668

17,394

Total equity

800,325

714,453

Total liabilities and equity

5,914,091

6,070,345

NGL ENERGY PARTNERS LP AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Operations

(in Thousands, except unit and per unit amounts)

Three Months Ended December 31,

Nine Months Ended December 31,

2022

2021

2022

2021

REVENUES:

Water Solutions

180,242

130,653

511,231

397,089

Crude Oil Logistics

531,613

607,203

1,971,767

1,715,657

Liquids Logistics

1,427,385

1,434,020

4,163,072

3,301,922

Total Revenues

2,139,240

2,171,876

6,646,070

5,414,668

COST OF SALES:

Water Solutions

2,534

5,030

13,679

21,791

Crude Oil Logistics

471,891

556,531

1,808,460

1,591,877

Liquids Logistics

1,385,943

1,388,760

4,057,360

3,187,039

Total Cost of Sales

1,860,368

1,950,321

5,879,499

4,800,707

OPERATING COSTS AND EXPENSES:

Operating

81,353

72,807

237,371

207,610

General and administrative

17,216

18,925

50,601

46,149

Depreciation and amortization

69,327

68,480

204,105

222,145

Loss on disposal or impairment of assets, net

8,306

12,233

15,791

93,463

Operating Income

102,670

49,110

258,703

44,594

OTHER INCOME (EXPENSE):

Equity in earnings of unconsolidated entities

1,213

119

3,094

765

Interest expense

(75,920

)

(68,379

)

(211,528

)

(204,004

)

Gain on early extinguishment of liabilities, net

2,667

6,808

1,131

Other income, net

28,100

28,731

2,003

Income (Loss) Before Income Taxes

58,730

(19,117

)

85,808

(155,511

)

INCOME TAX BENEFIT (EXPENSE)

252

135

(113

)

820

Net Income (Loss)

58,982

(18,982

)

85,695

(154,691

)

LESS: NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS

(448

)

(790

)

(705

)

NET INCOME (LOSS) ATTRIBUTABLE TO NGL ENERGY PARTNERS LP

58,534

(18,919

)

84,905

(155,396

)

NET INCOME (LOSS) ALLOCATED TO COMMON UNITHOLDERS - BASIC

26,007

(45,233

)

(5,571

)

(232,361

)

NET INCOME (LOSS) ALLOCATED TO COMMON UNITHOLDERS - DILUTED

26,123

(45,233

)

(5,571

)

(232,361

)

BASIC INCOME (LOSS) PER COMMON UNIT

0.20

(0.35

)

(0.04

)

(1.79

)

DILUTED INCOME (LOSS) PER COMMON UNIT

0.19

(0.35

)

(0.04

)

(1.79

)

BASIC WEIGHTED AVERAGE COMMON UNITS OUTSTANDING

131,015,658

129,810,245

130,802,920

129,666,303

DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING

134,485,325

129,810,245

130,802,920

129,666,303

EBITDA, ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW RECONCILIATION

(Unaudited)

The following table reconciles NGL’s net income (loss) to NGL’s EBITDA, Adjusted EBITDA and Distributable Cash Flow:

Three Months Ended December 31,

Nine Months Ended December 31,

2022

2021

2022

2021

(in thousands)

Net income (loss)

58,982

(18,982

)

85,695

(154,691

)

Less: Net (income) loss attributable to noncontrolling interests

(448

)

(790

)

(705

)

Net income (loss) attributable to NGL Energy Partners LP

58,534

(18,919

)

84,905

(155,396

)

Interest expense

75,934

68,395

211,573

204,037

Income tax (benefit) expense

(252

)

(135

)

113

(820

)

Depreciation and amortization

69,308

68,452

204,025

221,352

EBITDA

203,524

117,793

500,616

269,173

Net unrealized losses (gains) on derivatives

4,800

(13,500

)

(56,930

)

(48,254

)

CMA Differential Roll net losses (gains) (1)

(8,678

)

23,872

19,424

60,987

Inventory valuation adjustment (2)

(2,650

)

1,145

(6,765

)

1,912

Lower of cost or net realizable value adjustments

(12,568

)

2,921

(11,711

)

2,636

Loss on disposal or impairment of assets, net

8,290

12,035

15,775

93,268

Gain on early extinguishment of liabilities, net

(2,667

)

(6,808

)

(1,168

)

Equity-based compensation expense

890

749

1,866

(1,044

)

Acquisition expense (3)

—

(36

)

—

Other (4)

2,315

2,770

3,907

7,525

Adjusted EBITDA

193,256

147,740

459,374

385,102

Less: Cash interest expense (5)

71,751

64,049

198,972

191,137

Less: Income tax (benefit) expense

(252

)

(135

)

113

(820

)

Less: Maintenance capital expenditures

11,464

13,330

41,050

38,054

Less: CMA Differential Roll (6)

(15,147

)

15,354

(13,213

)

49,254

Less: Other (7)

—

171

—

Distributable Cash Flow

125,439

55,142

232,281

107,477

_____________________________

(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)

Amount reflects 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 non-cash operating expenses related to our Grand Mesa Pipeline, unrealized gains/losses on marketable securities, accretion expense for asset retirement obligations and the write off of an asset acquired in a prior period acquisition.

(5)

Amounts represent interest expense payable in cash, excluding changes in the accrued interest balance.

(6)

Amount represents 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 represents cash paid to settle asset retirement obligations.

ADJUSTED EBITDA RECONCILIATION BY SEGMENT

Three Months Ended December 31, 2022

Water

Solutions

Crude Oil

Logistics

Liquids

Logistics

Corporate

and Other

Consolidated

(in thousands)

Operating income (loss)

59,721

35,096

20,513

(12,660

)

102,670

Depreciation and amortization

52,591

11,664

3,417

1,655

69,327

Amortization recorded to cost of sales

—

Net unrealized (gains) losses on derivatives

—

(1,810

)

6,610

—

4,800

CMA Differential Roll net losses (gains)

—

(8,678

)

—

(8,678

)

Inventory valuation adjustment

—

(2,650

)

—

(2,650

)

Lower of cost or net realizable value adjustments

—

(3,321

)

(9,247

)

—

(12,568

)

Loss (gain) on disposal or impairment of assets, net

7,959

277

)

8,306

Equity-based compensation expense

—

890

Other income (expense), net

(1,481

)

29,520

28,100

Adjusted EBITDA attributable to unconsolidated entities

1,357

—

1,423

Adjusted EBITDA attributable to noncontrolling interest

(747

)

—

(747

)

Other

829

(27

)

1,513

—

2,315

Adjusted EBITDA

121,712

33,260

18,763

19,521

193,256

Three Months Ended December 31, 2021

Water

Solutions

Crude Oil

Logistics

Liquids

Logistics

Corporate

and Other

Consolidated

(in thousands)

Operating income (loss)

19,851

21,291

23,158

(15,190

)

49,110

Depreciation and amortization

50,815

12,166

3,756

1,743

68,480

Amortization recorded to cost of sales

—

Net unrealized losses (gains) on derivatives

1,758

(32,201

)

16,943

—

(13,500

)

CMA Differential Roll net losses (gains)

—

23,872

—

23,872

Inventory valuation adjustment

—

1,145

—

1,145

Lower of cost or net realizable value adjustments

—

2,921

—

2,921

Loss (gain) on disposal or impairment of assets, net

9,997

2,262

(26

)

—

12,233

Equity-based compensation expense

—

749

Acquisition expense

—

(40

)

(36

)

Other (expense) income, net

)

—

(31

)

Adjusted EBITDA attributable to unconsolidated entities

384

—

(70

)

324

Adjusted EBITDA attributable to noncontrolling interest

(419

)

—

)

—

(422

)

Other

360

2,374

—

2,771

Adjusted EBITDA

82,744

29,764

47,979

(12,747

)

147,740

Nine Months Ended December 31, 2022

Water

Solutions

Crude Oil

Logistics

Liquids

Logistics

Corporate

and Other

Consolidated

(in thousands)

Operating income (loss)

160,454

87,012

48,806

(37,569

)

258,703

Depreciation and amortization

153,766

35,193

10,194

4,952

204,105

Amortization recorded to cost of sales

—

205

—

205

Net unrealized (gains) losses on derivatives

(4,464

)

(57,390

)

4,924

—

(56,930

)

CMA Differential Roll net losses (gains)

—

19,424

—

19,424

Inventory valuation adjustment

—

(6,765

)

—

(6,765

)

Lower of cost or net realizable value adjustments

—

(2,247

)

(9,464

)

—

(11,711

)

Loss (gain) on disposal or impairment of assets, net

17,935

(1,279

)

(916

)

15,791

Equity-based compensation expense

—

1,866

Other income (expense), net

390

(1,665

)

29,996

28,731

Adjusted EBITDA attributable to unconsolidated entities

3,569

—

)

134

3,700

Adjusted EBITDA attributable to noncontrolling interest

(1,652

)

—

(1,652

)

Other

1,915

1,894

—

3,907

Adjusted EBITDA

331,533

81,201

48,177

(1,537

)

459,374

Nine Months Ended December 31, 2021

Water

Solutions

Crude Oil

Logistics

Liquids

Logistics

Corporate

and Other

Consolidated

(in thousands)

Operating income (loss)

60,206

37,941

(18,790

)

(34,763

)

44,594

Depreciation and amortization

164,466

37,029

15,409

5,241

222,145

Amortization recorded to cost of sales

—

213

—

213

Net unrealized losses (gains) on derivatives

6,845

(53,808

)

(1,291

)

—

(48,254

)

CMA Differential Roll net losses (gains)

—

60,987

—

60,987

Inventory valuation adjustment

—

1,912

—

1,912

Lower of cost or net realizable value adjustments

—

(11

)

2,647

—

2,636

Loss on disposal or impairment of assets, net

19,450

2,206

71,807

—

93,463

Equity-based compensation expense

—

(1,044

)

(1,044

)

Acquisition expense

—

Other income, net

616

350

627

410

2,003

Adjusted EBITDA attributable to unconsolidated entities

1,559

—

)

(190

)

1,360

Adjusted EBITDA attributable to noncontrolling interest

(1,987

)

—

(529

)

—

(2,516

)

Other

520

6,994

—

7,536

Adjusted EBITDA

251,679

91,688

72,018

(30,283

)

385,102

OPERATIONAL DATA

(Unaudited)

Three Months Ended

Nine Months Ended

December 31,

2022

2021

2022

2021

(in thousands, except per day amounts)

Water Solutions:

Produced water processed (barrels per day)

Delaware Basin

2,128,673

1,551,621

2,001,242

1,488,529

Eagle Ford Basin

131,551

110,243

114,191

99,298

DJ Basin

151,265

159,332

151,792

142,606

Other Basins

14,335

18,351

15,114

25,516

Total

2,425,824

1,839,547

2,282,339

1,755,949

Recycled water (barrels per day)

167,774

52,854

132,851

76,319

Total (barrels per day)

2,593,598

1,892,401

2,415,190

1,832,268

Skim oil sold (barrels per day)

4,099

2,678

3,757

2,667

Crude Oil Logistics:

Crude oil sold (barrels)

5,955

7,515

19,428

23,027

Crude oil transported on owned pipelines (barrels)

7,062

7,590

20,832

21,961

Crude oil storage capacity - owned and leased (barrels) (1)

5,232

Crude oil inventory (barrels) (1)

892

1,295

Liquids Logistics:

Refined products sold (gallons)

192,340

203,898

566,997

586,136

Propane sold (gallons)

305,067

294,282

639,686

644,883

Butane sold (gallons)

177,061

180,191

409,137

427,646

Other products sold (gallons)

96,349

99,915

294,965

290,078

Natural gas liquids and refined products storage capacity - owned and leased (gallons) (1)

159,999

168,189

Refined products inventory (gallons) (1)

1,738

1,314

Propane inventory (gallons) (1)

97,283

125,235

Butane inventory (gallons) (1)

31,029

45,129

Other products inventory (gallons) (1)

13,360

23,491

_____________________________

(1) Information is presented as of December 31, 2022 and December 31, 2021, respectively.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230209005600/en/

NGL Energy Partners LP Brad Cooper, 918-481-1119 Executive Vice President and Chief Financial Officer Brad.Cooper@nglep.com or David Sullivan, 918-481-1119 Vice President - Finance David.Sullivan@nglep.com

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