NGL Energy Partners LP (NYSE:NGL) Q4 2021 Earnings Conference Call June 3, 2021 5:00 PM ET Company Participants Trey Karlovich - Chief Financial Officer Mike Krimbill - Chief Executive Officer Conference Call Participants Tarek Hamid - JPMorgan Philipp Duffner - Aurelius Jason Stuart - Stuart Holdings Alan Fragen - Lonestar Capital James Spicer - TD Securities Jason Mandel - RBC Capital Markets Harold Weber - Aegis Capital Operator Good day and thank you for standing by. Welcome to the Fourth Quarter Fiscal ...

Part I [Business](index=5&type=section&id=Item%201.%20Business) NGL Energy Partners LP, a diversified midstream energy MLP, has strategically repositioned its portfolio and completed a major debt refinancing, leading to the suspension of distributions to accelerate deleveraging - The company operates through three primary business segments: **Water Solutions**, **Crude Oil Logistics**, and **Liquids Logistics**[17](index=17&type=chunk)[21](index=21&type=chunk) - In February 2021, NGL completed a major debt refinancing, issuing **$2.05 billion** in 7.5% senior secured notes due 2026 and securing a new **$500 million** ABL facility[18](index=18&type=chunk) - As part of the refinancing, the company suspended quarterly common unit distributions (from Q4 2020) and all preferred unit distributions (from Q1 2021) to accelerate deleveraging and increase financial flexibility[19](index=19&type=chunk) - The company has strategically repositioned its portfolio by selling its Retail Propane segment and certain refined products businesses, while acquiring key water infrastructure assets in the Delaware Basin and NGL terminals to focus on stable, fee-based cash flows[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) [Water Solutions](index=11&type=section&id=Item%201.%20Business%20-%20Water%20Solutions) The Water Solutions segment, the largest independent produced water transportation and disposal company in the U.S., handles produced water from oil and gas production - The Water Solutions segment transports, treats, recycles, and disposes of produced water, handling approximately **498.1 million barrels** in fiscal year 2021[33](index=33&type=chunk)[34](index=34&type=chunk) - The segment's core asset is an integrated network of pipelines and disposal wells in the Northern Delaware Basin, supported by over **325,000 dedicated acres** under long-term, fixed-fee contracts[34](index=34&type=chunk)[35](index=35&type=chunk) Water Solutions Facilities Overview (as of March 31, 2021) | Location | Number of Facilities | Number of Wells | Total Permitted Processing Capacity (barrels per day) | | :--- | :--- | :--- | :--- | | Delaware Basin (TX & NM) | 58 | 119 | 4,661,300 | | Midland Basin (TX) | 15 | 15 | 400,800 | | Eagle Ford (TX) | 24 | 38 | 956,000 | | DJ Basin (CO) | 13 | 32 | 555,500 | | Other Basins | 4 | 8 | 152,765 | | **Total** | **114** | **212** | **6,726,365** | [Crude Oil Logistics](index=13&type=section&id=Item%201.%20Business%20-%20Crude%20Oil%20Logistics) This segment purchases and transports crude oil to refineries and trade hubs, with the Grand Mesa Pipeline as its foundational asset - This segment purchases crude oil from producers and transports it to refineries, with the Grand Mesa Pipeline having a capacity of **150,000 barrels per day**[50](index=50&type=chunk)[51](index=51&type=chunk) - In fiscal year 2021, approximately **32.8 million financial barrels** of crude oil were transported on the Grand Mesa Pipeline[51](index=51&type=chunk) - The segment owns and operates significant storage and terminal assets, including a **3.6 million barrel** terminal in Cushing, OK[53](index=53&type=chunk)[54](index=54&type=chunk) [Liquids Logistics](index=15&type=section&id=Item%201.%20Business%20-%20Liquids%20Logistics) The Liquids Logistics segment supplies NGLs, refined products, and biodiesel across North America, selling **3.3 billion gallons** in fiscal year 2021 - The Liquids Logistics segment supplies natural gas liquids, refined products, and biodiesel, selling **3.3 billion gallons** in fiscal year 2021, averaging **9.09 million gallons per day**[66](index=66&type=chunk) - Operations are conducted through **28 company-owned terminals**, third-party facilities, and a fleet of approximately **5,100 leased railcars**[66](index=66&type=chunk)[81](index=81&type=chunk) - In March 2021, the company acquired the Ambassador pipeline, a **225-mile** NGL pipeline in Michigan, to expand its presence in the upper Midwest propane market[80](index=80&type=chunk) [Government Regulation](index=19&type=section&id=Item%201.%20Business%20-%20Government%20Regulation) The company's operations are subject to extensive federal, state, and local regulations from bodies like FERC, PHMSA, EPA, and OSHA, covering environmental, health, safety, and transportation aspects - The company's operations are subject to extensive federal, state, and local regulations covering environmental protection, health and safety, waste management, and transportation from key bodies including **FERC**, **PHMSA**, **EPA**, and **OSHA**[97](index=97&type=chunk)[104](index=104&type=chunk)[127](index=127&type=chunk) - The Grand Mesa Pipeline's transportation services are subject to **FERC** regulation, and the company is also subject to anti-market manipulation rules from **FERC**, **FTC**, and **CFTC**[99](index=99&type=chunk)[102](index=102&type=chunk) - Growing regulatory scrutiny on climate change and GHG emissions, including actions by the Biden Administration, could lead to increased compliance costs and impact future operations[120](index=120&type=chunk)[121](index=121&type=chunk) - State and federal initiatives related to hydraulic fracturing and saltwater disposal wells, including concerns about induced seismicity, could result in increased costs and operating restrictions[119](index=119&type=chunk)[214](index=214&type=chunk) [Risk Factors](index=25&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from substantial indebtedness, restrictive debt covenants, commodity price volatility, dependence on third-party production, extensive environmental and tax regulations, and its partnership structure - **Liquidity and Financing Risks:** The company's substantial debt of **$3.4 billion** as of March 31, 2021, and restrictive covenants limit its ability to incur more debt, make acquisitions, and pay distributions[147](index=147&type=chunk)[148](index=148&type=chunk) - **Operational Risks:** Business performance is highly dependent on crude oil and natural gas production levels, influenced by commodity prices and producer spending, which could adversely impact segments[156](index=156&type=chunk)[162](index=162&type=chunk) - **Regulatory Risks:** The business is subject to stringent environmental, safety, and transportation regulations, with increasing scrutiny on hydraulic fracturing, water disposal, and GHG emissions potentially leading to higher costs[198](index=198&type=chunk)[206](index=206&type=chunk)[213](index=213&type=chunk) - **Partnership and Tax Risks:** The partnership agreement limits the general partner's fiduciary duties and unitholders' voting rights, with a significant tax risk being the potential loss of partnership status[223](index=223&type=chunk)[246](index=246&type=chunk) [Properties](index=49&type=section&id=Item%202.%20Properties) The company holds satisfactory title or valid rights to its material properties, with substantially all assets subject to liens securing its ABL Facility and 2026 Senior Secured Notes - NGL believes it has satisfactory title or valid rights to use all material properties necessary for its business operations[296](index=296&type=chunk) - Obligations under the ABL Facility and the 2026 Senior Secured Notes are secured by liens and mortgages on substantially all of the company's real and personal property[296](index=296&type=chunk) [Legal Proceedings](index=49&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings arising in the ordinary course of business, with details referenced in Notes 9 and 18 of the financial statements - The company is involved in various legal proceedings from time to time in the ordinary course of business, with specific details incorporated by reference from Notes 9 and 18 of the financial statements[299](index=299&type=chunk) Part II [Market for Registrant's Common Equity, Related Unitholder Matters and Issuer Purchases of Equity Securities](index=52&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Unitholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) NGL's common units trade on the NYSE, but all distributions are temporarily suspended since Q4 2020 to deleverage the balance sheet in accordance with debt covenants - The company's common units are listed on the New York Stock Exchange (**NYSE**) under the ticker symbol **"NGL"**[303](index=303&type=chunk) - A temporary suspension of all distributions was implemented to deleverage the balance sheet, affecting common units from the quarter ended **December 31, 2020**, and preferred units from the quarter ended **March 31, 2021**[310](index=310&type=chunk) - The suspension is tied to a covenant in the 2026 Senior Secured Notes indenture, which restricts distributions until the total leverage ratio is not greater than **4.75 to 1.00**[309](index=309&type=chunk)[310](index=310&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=53&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) For FY2021, NGL reported a consolidated operating loss of **$390.8 million**, primarily due to a **$383.6 million** impairment in Crude Oil Logistics, with liquidity supported by a new **$500 million** ABL facility and projected FY2022 capital expenditures of **$100 million** to **$125 million** Consolidated Results of Operations (in thousands) | | Year Ended March 31, 2021 | Year Ended March 31, 2020 | | :--- | :--- | :--- | | **Revenues** | $5,227,023 | $7,584,000 | | **Operating (loss) income** | $(390,753) | $(3,332) | | **Loss from continuing operations** | $(637,418) | $(180,545) | | **Net (loss) income** | $(639,187) | $(398,780) | | **Net (loss) income attributable to NGL** | $(639,819) | $(397,007) | - The COVID-19 pandemic and related collapse in crude oil prices negatively impacted all three business segments through reduced demand and lower commodity prices[322](index=322&type=chunk)[323](index=323&type=chunk)[325](index=325&type=chunk) - The Crude Oil Logistics segment recorded a **$304.3 million** operating loss for FY2021, including impairment charges of **$383.6 million** related to the Extraction Oil & Gas bankruptcy[337](index=337&type=chunk)[378](index=378&type=chunk) - The Water Solutions segment's operating loss narrowed to **$92.7 million** in FY2021 from **$173.1 million** in FY2020, despite an **$84.3 million** impairment charge in FY2021, with the prior year including a **$250.0 million** goodwill impairment[331](index=331&type=chunk) - Adjusted EBITDA from continuing operations was **$448.3 million** for FY2021, compared to **$589.5 million** for FY2020[471](index=471&type=chunk) - Capital expenditures for fiscal year 2022 are projected to be between **$100 million** and **$125 million**, split evenly between maintenance and growth projects[496](index=496&type=chunk) [Segment Operating Results (FY2021 vs. FY2020)](index=60&type=section&id=Item%207.%20MD%26A%20-%20Segment%20Operating%20Results) For fiscal year 2021, Water Solutions' operating loss decreased, Crude Oil Logistics incurred a significant impairment-driven loss, and Liquids Logistics' operating income declined Segment Operating (Loss) Income (in thousands) | Segment | FY 2021 | FY 2020 | | :--- | :--- | :--- | | Water Solutions | $(92,720) | $(173,064) | | Crude Oil Logistics | $(304,330) | $117,768 | | Liquids Logistics | $70,441 | $142,411 | - **Water Solutions:** The reduced operating loss was primarily due to a smaller impairment charge in FY2021 (**$76.9 million**) compared to FY2020 (**$255.3 million**, including **$250 million** goodwill impairment), with processed water volumes decreasing to **1.36 million barrels/day** from **1.64 million barrels/day**[354](index=354&type=chunk)[364](index=364&type=chunk) - **Crude Oil Logistics:** The shift to a significant operating loss was driven by a **$384.1 million** loss on impairment of assets, primarily related to the rejected Extraction transportation agreement and associated goodwill[368](index=368&type=chunk)[378](index=378&type=chunk) - **Liquids Logistics:** Operating income decreased by half, mainly due to lower product margins in Butane (down **$59.4 million**) and Refined Products (down **$15.4 million**) as a result of reduced demand from the COVID-19 pandemic[380](index=380&type=chunk) [Liquidity, Sources of Capital and Capital Resource Activities](index=82&type=section&id=Item%207.%20MD%26A%20-%20Liquidity%2C%20Sources%20of%20Capital%20and%20Capital%20Resource%20Activities) The company's liquidity is primarily from operations and a new **$500.0 million** ABL Facility, with the February 2021 refinancing extending debt maturities but introducing restrictive covenants, including distribution suspension - Principal liquidity sources are cash from operations and borrowings under the new **$500.0 million** ABL Facility, which replaced the previous credit facility in February 2021[480](index=480&type=chunk)[481](index=481&type=chunk) - The February 2021 refinancing extended debt maturities and improved liquidity but also introduced restrictive covenants, including the suspension of distributions until the total leverage ratio falls below **4.75 to 1.00**[481](index=481&type=chunk) Capital Expenditures & Acquisitions (in thousands) | Year Ended March 31, | Expansion Capital | Maintenance Capital | Acquisitions | | :--- | :--- | :--- | :--- | | 2021 | $90,920 | $28,787 | $(901) | | 2020 | $571,154 | $61,353 | $1,268,474 | Cash Flow Summary (in thousands) | | FY 2021 | FY 2020 | | :--- | :--- | :--- | | **Net cash from operating activities** | $303,994 | $464,055 | | **Net cash used in investing activities** | $(221,493) | $(1,438,756) | | **Net cash (used in) provided by financing activities** | $(100,376) | $978,833 | [Quantitative and Qualitative Disclosures About Market Risk](index=92&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to interest rate risk from its variable-rate ABL Facility, commodity price risk in its logistics businesses, and credit risk from counterparty nonperformance, using derivatives to mitigate commodity price volatility - **Interest Rate Risk:** The company has exposure through its variable-rate ABL Facility, with a **0.125%** change in interest rates having a minimal impact (less than **$0.1 million**) on annual interest expense[536](index=536&type=chunk)[537](index=537&type=chunk) - **Commodity Price Risk:** The logistics businesses are margin-based and sensitive to price fluctuations, with the company using forward contracts and financial derivatives to reduce this risk[539](index=539&type=chunk)[541](index=541&type=chunk)[542](index=542&type=chunk) - **Credit Risk:** The company faces risk of nonperformance from customers and counterparties, managed through credit analysis, collateral requirements, and master netting agreements[545](index=545&type=chunk) [Controls and Procedures](index=94&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of March 31, 2021, a conclusion affirmed by an unqualified auditor's opinion - Management concluded that the company's disclosure controls and procedures were effective as of the fiscal year-end, **March 31, 2021**[551](index=551&type=chunk) - Management's assessment, based on the **2013 COSO framework**, concluded that internal control over financial reporting was effective as of **March 31, 2021**[553](index=553&type=chunk) - The independent registered public accounting firm, **Grant Thornton LLP**, issued an unqualified opinion on the effectiveness of the Partnership's internal control over financial reporting as of **March 31, 2021**[557](index=557&type=chunk)[558](index=558&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=96&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The company is managed by its general partner, NGL Energy Holdings LLC, with an eight-member board including four independent directors, and key executives H. Michael Krimbill (CEO) and Robert W. Karlovich III (CFO) - The board of directors of the general partner has **eight members**, with **four** determined to be independent according to NYSE and SEC standards[567](index=567&type=chunk) - Key executive officers include **H. Michael Krimbill** as Chief Executive Officer and **Robert W. Karlovich III** as Executive Vice President and Chief Financial Officer[572](index=572&type=chunk) - The board has an **Audit Committee** and a **Compensation Committee**, both composed of independent directors, with **Mr. Derek S. Reiners** designated as the 'audit committee financial expert'[597](index=597&type=chunk)[598](index=598&type=chunk)[599](index=599&type=chunk) [Executive Compensation](index=101&type=section&id=Item%2011.%20Executive%20Compensation) The company's executive compensation philosophy emphasizes pay-for-performance, with CEO H. Michael Krimbill's total compensation at **$642,632** for FY2021, and a CEO-to-median-employee pay ratio of approximately **10 to 1** - The compensation philosophy emphasizes pay-for-performance to align executive and unitholder interests[608](index=608&type=chunk) Summary Compensation for Top Executives (FY 2021) | Name and Position | Salary ($) | Bonus ($) | Total Compensation ($) | | :--- | :--- | :--- | :--- | | H. Michael Krimbill, CEO | 625,000 | — | 642,632 | | Robert W. Karlovich III, CFO | 500,000 | 600,000 | 1,112,759 | | Kurston P. McMurray, General Counsel | 375,000 | 600,000 | 984,210 | - Cash bonuses were paid to Messrs. Karlovich, Thuillier, and McMurray in fiscal 2021 primarily for their work related to the successful issuance of the **2026 Senior Secured Notes** and the new **ABL facility**[610](index=610&type=chunk)[618](index=618&type=chunk) - The ratio of the CEO's annual total compensation (**$642,632**) to the median employee's annual total compensation (**$65,415**) was approximately **10 to 1** for fiscal year 2021[648](index=648&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters](index=110&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Unitholder%20Matters) As of May 28, 2021, Invesco Ltd. and EIG Neptune Equity Aggregator, L.P. were the largest beneficial owners of NGL's common units, while the company's Long-Term Incentive Plan expired with no remaining securities for future issuance Beneficial Ownership of Common Units (as of May 28, 2021) | Beneficial Owner | Percentage Owned | | :--- | :--- | | Invesco Ltd. | 15.37% | | EIG Neptune Equity Aggregator, L.P. | 11.44% | | All directors and executive officers as a group | 4.87% | - The company's **2011 Long-Term Incentive Plan (LTIP)** expired in **May 2021**, with **446,975 unvested awards** outstanding as of March 31, 2021, but no securities remain available for future grants[665](index=665&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=112&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company engages in related party transactions, including a **$40.0 million** fee paid to EIG for debt refinancing consent and transactions with WPX, all reviewed under the Code of Business Conduct and Ethics - A **$40.0 million** fee was paid to **EIG**, an affiliate of a board member, to obtain consent for the **February 2021** debt refinancing[672](index=672&type=chunk) - The company conducted transactions with **WPX**, including **$39.1 million** in sales to WPX and **$216.5 million** in purchases from WPX for the year ended **March 31, 2021**[671](index=671&type=chunk) - The board of directors has adopted a **Code of Business Conduct and Ethics** for reviewing, approving, or ratifying transactions with related persons[676](index=676&type=chunk) [Principal Accountant Fees and Services](index=115&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Grant Thornton LLP serves as the independent auditor, with total fees of **$2.156 million** for FY2021, predominantly for audit services, all subject to audit committee pre-approval Accountant Fees (in thousands) | Fee Type | FY 2021 | FY 2020 | | :--- | :--- | :--- | | Audit fees | $2,149 | $2,735 | | Audit-related fees | $7 | $48 | | **Total** | **$2,156** | **$2,783** | - The audit committee has a pre-approval policy for all services performed by the independent registered public accounting firm, **Grant Thornton LLP**[682](index=682&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=116&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed as part of the Annual Report on Form 10-K, including various agreements and required certifications - This item provides a comprehensive list of all exhibits filed with the **Form 10-K**, including material contracts, partnership agreements, debt indentures, and executive certifications[685](index=685&type=chunk)[686](index=686&type=chunk)

NGL Energy Partners LP (NYSE:NGL) Q3 2021 Earnings Conference Call February 9, 2021 5:00 PM ET Company Participants Trey Karlovich - Chief Financial Officer Mike Krimbill - Chief Executive Officer Conference Call Participants TJ Schultz - RBC Capital Markets Patrick Fitzgerald - Baird Philipp Duffner - Aurelius Operator Ladies and gentlemen, thank you for standing by and welcome to the Q3 FY 2021 NGL Energy Partners Conference Call. [Operator Instructions] As a reminder, this conference call is being record ...

NGL Energy Partners LP (NYSE:NGL) Q2 2021 Earnings Conference Call November 9, 2020 5:00 PM ET Company Participants Trey Karlovich ??? Chief Financial Officer Mike Krimbill ??? Chief Executive Officer Conference Call Participants T.J. Schultz ??? RBC Capital Markets Pearce Hammond ??? Simmons Energy Jason Mandel ??? RBC Capital Markets Operator Good morning, ladies and gentlemen, and welcome to the Q2 Fiscal Year 2021 NGL Energy Partners LP Earnings Conference Call. At this time, all participants are in a l ...

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents NGL Energy Partners LP's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive income, changes in equity, and cash flows, with notes on presentation and accounting policies [Unaudited Condensed Consolidated Balance Sheets](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) - Total assets decreased from **$6.50 billion** at March 31, 2020, to **$6.29 billion** at September 30, 2020. Total liabilities decreased from **$4.76 billion** to **$4.68 billion** over the same period, while total equity declined from **$1.74 billion** to **$1.61 billion**[17](index=17&type=chunk) Condensed Consolidated Balance Sheet Data (in thousands) | Account | September 30, 2020 | March 31, 2020 | | :--- | :--- | :--- | | **Total current assets** | $728,714 | $774,087 | | **Total assets** | **$6,286,411** | **$6,498,736** | | **Total current liabilities** | $629,952 | $845,823 | | **Long-term debt** | $3,275,166 | $3,144,848 | | **Total liabilities** | $4,145,786 | $4,125,763 | | **Total equity** | $1,609,528 | $1,735,690 | | **Total liabilities and equity** | **$6,286,411** | **$6,498,736** | [Unaudited Condensed Consolidated Statements of Operations](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) - For the three months ended September 30, 2020, the company reported Net Income of **$5.8 million**, a significant improvement from a Net Loss of **$201.4 million** in the same period of 2019. The prior year's loss was heavily impacted by a **$185.7 million** loss from discontinued operations[19](index=19&type=chunk) - For the six months ended September 30, 2020, the company reported a Net Loss of **$29.4 million**, compared to a Net Loss of **$193.3 million** in the prior-year period. Total revenues for the six-month period decreased to **$2.01 billion** from **$3.68 billion** year-over-year[19](index=19&type=chunk) Key Operating Results (in thousands, except per unit amounts) | Metric | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Six Months Ended Sep 30, 2020 | Six Months Ended Sep 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $1,168,158 | $1,804,336 | $2,012,573 | $3,676,227 | | **Operating Income** | $36,316 | $30,115 | $25,531 | $77,635 | | **Net Income (Loss)** | $5,835 | $(201,366) | $(29,417) | $(193,327) | | **Net Loss per Common Unit (Basic)** | $(0.14) | $(1.72) | $(0.58) | $(2.68) | [Unaudited Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) - For the six months ended September 30, 2020, net cash provided by operating activities was **$143.7 million**, a significant improvement from a net cash use of **$4.5 million** in the prior-year period, primarily driven by changes in operating assets and liabilities[29](index=29&type=chunk) - Net cash used in investing activities decreased substantially to **$153.5 million** from **$633.2 million** year-over-year, mainly due to the absence of large acquisitions and lower capital expenditures[29](index=29&type=chunk) Cash Flow Summary (in thousands) | Activity | Six Months Ended Sep 30, 2020 | Six Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | $143,660 | $(4,488) | | **Net cash used in investing activities** | $(153,548) | $(633,214) | | **Net cash provided by financing activities** | $4,096 | $640,284 | | **Net (decrease) increase in cash** | $(5,792) | $2,582 | | **Cash and cash equivalents, end of period** | $16,912 | $21,154 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) - The company operates through three segments: Crude Oil Logistics, Water Solutions, and Liquids and Refined Products[31](index=31&type=chunk)[33](index=33&type=chunk) - The company adopted ASU No. 2016-13, "Financial Instruments-Credit Losses," on April 1, 2020, resulting in a cumulative effect adjustment of **$1.1 million** to opening equity[52](index=52&type=chunk) - A significant customer, Extraction Oil & Gas, Inc., filed for Chapter 11 bankruptcy in June 2020, seeking to reject transportation contracts, which could materially impact the Crude Oil Logistics segment and lead to impairment charges against assets and goodwill, with the related pipeline's long-lived assets valued at **$537.0 million** as of September 30, 2020[172](index=172&type=chunk)[176](index=176&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and operating results, emphasizing the COVID-19 pandemic and energy market downturn's impact on segments, liquidity, and capital resources, alongside the risk from a major customer's bankruptcy [Recent Developments and Market Conditions](index=40&type=section&id=Recent%20Developments%20and%20Market%20Conditions) - The energy industry experienced a simultaneous demand and supply shock in late fiscal 2020 due to increased production from Saudi Arabia/Russia and the COVID-19 pandemic, leading to a collapse in global crude oil prices and reduced demand for refined products[187](index=187&type=chunk)[188](index=188&type=chunk) - All three business segments were negatively impacted by the lower commodity price environment and reduced demand, leading the company to discontinue its earnings guidance due to ongoing uncertainty[188](index=188&type=chunk)[190](index=190&type=chunk) - A significant customer, Extraction Oil & Gas, Inc., filed for Chapter 11 bankruptcy and received a court ruling allowing contract rejection, which the company intends to appeal, but an unsuccessful appeal could significantly impact operating results[189](index=189&type=chunk) [Segment Operating Results](index=42&type=section&id=Segment%20Operating%20Results) Segment Operating Income (Loss) (in thousands) | Segment | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Six Months Ended Sep 30, 2020 | Six Months Ended Sep 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | **Crude Oil Logistics** | $48,239 | $38,520 | $71,559 | $72,322 | | **Water Solutions** | $(13,277) | $21,274 | $(29,324) | $34,963 | | **Liquids and Refined Products** | $14,338 | $8,798 | $18,900 | $24,169 | | **Corporate and Other** | $(12,984) | $(38,477) | $(35,604) | $(53,819) | | **Total operating income** | **$36,316** | **$30,115** | **$25,531** | **$77,635** | - **Crude Oil Logistics** operating income increased in Q2 2021 vs Q2 2020, primarily due to higher product margins from selling lower-cost inventory and increased revenue from the Grand Mesa Pipeline tariff increase, despite lower sales volumes and prices[195](index=195&type=chunk)[198](index=198&type=chunk)[201](index=201&type=chunk) - **Water Solutions** swung to an operating loss, driven by lower recovered crude oil revenue due to lower prices, reduced other service revenues from decreased drilling activity, and a significant increase in depreciation and amortization from recent acquisitions and developments[205](index=205&type=chunk)[207](index=207&type=chunk)[212](index=212&type=chunk) - **Liquids and Refined Products** operating income increased, largely due to a significant improvement in propane product margin, which offset a sharp decline in butane product margin, while refined products margins were negatively impacted by reduced demand due to COVID-19[214](index=214&type=chunk)[218](index=218&type=chunk) [Non-GAAP Financial Measures](index=58&type=section&id=Non-GAAP%20Financial%20Measures) Reconciliation of Net Income (Loss) to Adjusted EBITDA (in thousands) | Metric | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Six Months Ended Sep 30, 2020 | Six Months Ended Sep 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | **Net income (loss) attributable to NGL** | $5,667 | $(201,237) | $(29,636) | $(192,930) | | **EBITDA** | $138,502 | $(92,208) | $230,166 | $10,542 | | **Adjusted EBITDA** | $137,781 | $103,263 | $228,469 | $190,023 | | **Adjusted EBITDA - Continuing Operations** | $137,971 | $123,466 | $228,953 | $227,184 | - Adjusted EBITDA from Continuing Operations for the three months ended September 30, 2020 was **$138.0 million**, compared to **$123.5 million** for the same period in 2019. For the six-month period, it was **$229.0 million** in 2020 compared to **$227.2 million** in 2019[284](index=284&type=chunk) [Liquidity, Sources of Capital and Capital Resource Activities](index=63&type=section&id=Liquidity%2C%20Sources%20of%20Capital%20and%20Capital%20Resource%20Activities) - The company is taking measures to increase liquidity and de-lever its balance sheet, including reducing quarterly common unit distributions twice (from **$0.39** to **$0.20** in April 2020, and then to **$0.10** in October 2020) and cutting capital spending expectations for fiscal 2021[291](index=291&type=chunk) - The company is actively working with its syndicate of lenders to extend the maturity of its **$1.915 billion** Credit Agreement, which expires in October 2021, with a proposal including covenant modifications, commitment reductions, and limitations on distributions[294](index=294&type=chunk)[295](index=295&type=chunk) - During the six months ended September 30, 2020, the company repurchased a total of **$91.0 million** in face value of its senior unsecured notes (2023, 2025, and 2026 notes)[301](index=301&type=chunk) - On June 3, 2020, the company entered into a new **$250.0 million** Term Credit Agreement expiring in June 2023 to refinance its previous bridge term credit agreement[303](index=303&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=68&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from variable-rate debt interest rates and commodity price fluctuations, with **$1.7 billion** outstanding on its Revolving Credit Facility and **$250.0 million** on its Term Credit Agreement, using derivatives to mitigate volatility without hedge accounting - At September 30, 2020, the company had **$1.7 billion** of outstanding borrowings under its variable-rate Revolving Credit Facility, where a **0.125%** change in interest rates would impact annual interest expense by **$2.1 million**[326](index=326&type=chunk) - The company had **$250.0 million** outstanding under its Term Credit Agreement, which has a LIBOR floor of **1.50%**, meaning a **0.125%** change in LIBOR would not impact interest expense as the current rate is below the floor[327](index=327&type=chunk) [Controls and Procedures](index=70&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded the company's disclosure controls and procedures were effective as of September 30, 2020, with no material changes to internal controls during the quarter - Management concluded that as of September 30, 2020, the company's disclosure controls and procedures were effective[336](index=336&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=71&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in legal proceedings, including a lawsuit by LCT Capital, LLC for investment banking services, for which **$2.5 million** has been accrued, and actions related to Extraction Oil & Gas, Inc.'s bankruptcy - The company is involved in a lawsuit with LCT Capital, LLC regarding investment banking services, where a jury awarded **$4.0 million** for quantum meruit and **$29.0 million** for fraudulent misrepresentation, though the damages award was overturned and is under appeal, with **$2.5 million** accrued for this matter as of September 30, 2020[97](index=97&type=chunk) [Risk Factors](index=71&type=section&id=Item%201A.%20Risk%20Factors) A key risk is customer and counterparty default, especially in a low commodity price environment, potentially leading to nonpayment, contract rejections in bankruptcy, and asset write-downs, materially impacting financial condition - A key risk is the potential for customer and counterparty default, especially in a low commodity price environment, which could lead to nonpayment, contract rejection in bankruptcy (as seen with Extraction Oil & Gas), and significant write-downs or impairment charges, materially harming the business[341](index=341&type=chunk) [Other Items (Items 2-6)](index=71&type=section&id=Item%202-6) This section covers other required disclosures, noting Items 2, 3, and 4 were not applicable, Item 5 had no disclosures, and Item 6 lists the exhibits filed with the report

NGL Energy Partners LP (NYSE:NGL) Q1 2021 Earnings Conference Call August 10, 2020 5:00 PM ET Company Participants Trey Karlovich ??? Chief Financial Officer Mike Krimbill ??? Chief Executive Officer Conference Call Participants Pearce Hammond ??? Simmons Energy James Spicer ??? TD Securities Patrick Fitzgerald ??? Baird TJ Schultz ??? RBC Capital Markets Operator Ladies and gentlemen, thank you for standing by, and welcome to the Q1 Fiscal Year 2021 NGL Energy Partnership LP Earnings Conference call. At th ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-35172 NGL Energy Partners LP (Exact Name of Registrant as Specified in Its Charter) Dela ...

Financial Data and Key Metrics Changes - The company reported a record adjusted EBITDA from continuing operations of $590 million for fiscal year 2020, with a net loss on a GAAP basis due to non-cash impairments [9][31][48] - Total leverage improved from 5.0 times last quarter to 4.86 times as of March 31, 2020, with expectations to remain in the high 4x to low 4x range for the upcoming year [26][32] - Free cash flow is projected to be positive based on the adjusted EBITDA guidance of $600 million for fiscal 2021, with distributable cash flow after interest expense and maintenance capital estimated at approximately $295 million [26][49] Business Line Data and Key Metrics Changes - Crude Oil Logistics segment achieved adjusted EBITDA of approximately $57 million for the quarter and $202 million year-to-date, performing at the high end of guidance [35] - NGL Logistics segment significantly exceeded expectations, with strong performance in both butane blending and wholesale propane business components [10][31] - Water Solutions segment reported adjusted EBITDA of $72 million for the quarter, totaling $232 million year-to-date, with Delaware Basin volumes accounting for nearly 80% of total volumes [37][41] Market Data and Key Metrics Changes - The company averaged 1.7 million barrels per day in water volumes during the fourth quarter, with a high of 1.9 million barrels per day in March [11] - April volumes averaged 1.6 million barrels per day, while May volumes dropped to approximately 1.25 million barrels per day, indicating a potential bottoming out [20] - The company has a significant disposal capacity of 3.4 million barrels in the Delaware Basin, with 535 miles of pipeline in service [13] Company Strategy and Development Direction - The company has completed its transition away from Retail Propane and Refined Products, focusing on Crude Oil Logistics, NGL Logistics, and Water Solutions for future growth [9] - The strategy includes reducing capital expenditures to $50 million annually and maintenance capital to around $50 million, reflecting a focus on efficiency and cost reduction [23][24] - The company aims to maintain a strong diversified asset base to weather market challenges and maximize value over the next decade [28][51] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by COVID-19 and the volatility in oil prices, indicating a cautious outlook for the midstream sector [14][58] - The company expects to see a recovery in water volumes as producers resume operations, with a target leverage of 4x remaining consistent [112] - Management expressed optimism about the performance in the second half of fiscal 2021, particularly in the NGL Logistics segment due to expected colder winter conditions [17][45] Other Important Information - The company reduced its common unit distribution to $0.20 per unit for the quarter, a 50% reduction, saving approximately $100 million in cash annually [48] - Cost reduction measures have resulted in over $2 million in cash savings per month, with a nearly 15% reduction in headcount [21][22] - The company has been actively repurchasing unsecured indebtedness at a discount, reducing debt by an additional $24 million [27][34] Q&A Session Summary Question: Expectations for produced water volumes and Poker Lake - Management indicated that volumes are expected to trend upwards as shut-in wells come back online, with Poker Lake still on schedule [55] Question: Plans for dividends and conditions for reinstatement - Management expressed disappointment with the current dividend level and indicated that increasing water volumes and reduced leverage are necessary for reinstating dividends [64][66] Question: Impact of contango on storage strategy - The company has rolled short-term contracts for storage and is monitoring market conditions for potential longer-term contracts [72][74] Question: Liquids segment performance and future expectations - The strong performance in the Liquids segment was attributed to both volume and margin increases, with expectations for a ramp-up in demand in the latter half of the fiscal year [100][101] Question: Completions activity and price levels - Management noted that completions are beginning to pick up in the Delaware Basin, with activity expected to continue at price levels between $35 and $40 [108] Question: Target leverage and Class D preferreds - The target leverage remains at 4x, and Class D preferreds are viewed as equity instruments for leverage calculations [112][114]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-35172 NGL Energy Partners LP Securities registered pursuant to Section 12(g) of the Act: None Indicate by check m ...

Financial Data and Key Metrics Changes - The company reported record adjusted EBITDA exceeding $200 million, which is at least 20% higher than any retail analyst projection [6] - The 12-month trailing common unit coverage ratio increased from 1 time to 1.5x [6][12] - Total debt outstanding was just under $3.1 billion, resulting in a total leverage of 5x [15] - Adjusted EBITDA for the quarter was approximately $200 million and almost $428 million year-to-date [16] Business Line Data and Key Metrics Changes - Crude Oil segment generated approximately $56 million of adjusted EBITDA for the quarter, with a year-to-date total of $162 million [17] - Water segment adjusted EBITDA was $62 million for the quarter and totaled $160 million year-to-date [18] - Liquids segment achieved record adjusted EBITDA of $69 million for the quarter, totaling $100 million year-to-date [23] - Refined Products segment adjusted EBITDA for continuing operations was $24 million for the quarter, totaling $34 million year-to-date [26] Market Data and Key Metrics Changes - The company expects water disposal volumes to continue to increase, particularly with the upcoming Poker Lake project [20] - The average disposal fee for the quarter was $0.62 per barrel, consistent with year-to-date figures [20] - The company is well-positioned from an inventory standpoint to manage potentially warmer weather impacting volumes [24] Company Strategy and Development Direction - The company is focused on self-funding and continued deleveraging, with a targeted leverage metric of 4x or lower [11] - The strategy includes increasing acreage dedications, MVCs, and extending the tenure of existing contracts [11] - The company aims to simplify its business while maintaining a diverse cash flow [27] Management's Comments on Operating Environment and Future Outlook - Management indicated that water volumes are approximately three months behind original expectations but are expected to ramp up significantly [23] - The company is optimistic about future water volumes, particularly with the development plans of major customers [62] - Management emphasized the importance of reducing operating expenses and achieving synergies from recent acquisitions [62] Other Important Information - The company closed the Hillstone acquisition during the quarter and exited additional smaller refined products businesses [6] - The company has significantly reduced capex in fiscal 2021 and is approaching free cash flow positive status [9] Q&A Session Summary Question: Water volumes delay and exit rate expectations - Management indicated that water volumes are about three months behind schedule, and the exit rate for the end of the calendar year will not include Poker Lake [30][31] Question: Margin expectations for the Water business - Management expects net margins to be larger on a go-forward basis, with operating expenses anticipated to decrease significantly [41][42] Question: Competitive dynamics for new water deals - The competitive environment is tough as many long-term dedications have already been secured, limiting new opportunities for competitors [55] Question: Credit risk associated with Grand Mesa - Management monitors credit risk closely and feels comfortable with the current customer base, despite some credit concerns [64] Question: Purchase of third-party volumes and margin implications - The purchase of third-party volumes is consistent with pipeline operations, and margins are generally in line with basin differentials [70] Question: Role of the new Executive VP of Strategic Initiatives - The role focuses on ensuring the company does not miss strategic acquisition opportunities and enhancing communication with investors [72]