NGL Energy Partners LP Investor Presentation November 2019 Company Information | --- | --- | |------------------------------|----------------| | NYSE Ticker | NGL | | Unit Price (1) | $10.37 | | Market Capitalization (1)(2) | $2.093 billion | | Enterprise Value (1)(2) | $4.883 billion | | Yield (1) | 15.04% | Contact Information Corporate Headquarters NGL Energy Partners LP 6120 South Yale Avenue, Suite 805 Tulsa, Oklahoma 74136 Website www.nglenergypartners.com Investor Relations | --- | |----------------- ...

[FORM 10-Q General Information](index=1&type=section&id=FORM%2010-Q%20General%20Information) This section provides general information about NGL Energy Partners LP's Form 10-Q filing, including registrant details and forward-looking statements [Registrant Information](index=1&type=section&id=Registrant%20Information) NGL Energy Partners LP, a Delaware limited partnership, filed its Quarterly Report on Form 10-Q for the period ended September 30, 2019, classified as a large accelerated filer - NGL Energy Partners LP is a Delaware limited partnership, filing its Quarterly Report on Form 10-Q for the period ended September 30, 2019[2](index=2&type=chunk) - The registrant is classified as a **large accelerated filer**[3](index=3&type=chunk)[4](index=4&type=chunk) Securities Registered Pursuant to Section 12(b) of the Act | Title of Each Class | Trading Symbols | Name of Each Exchange on Which Registered | | :-------------------------------------------------------- | :-------------- | :---------------------------------------- | | Common units representing Limited Partner Interests | NGL | New York Stock Exchange | | Fixed-to-floating rate cumulative redeemable perpetual preferred units | NGL-PB | New York Stock Exchange | | Fixed-to-floating rate cumulative redeemable perpetual preferred units | NGL-PC | New York Stock Exchange | - As of November 4, 2019, there were **128,040,420 common units** issued and outstanding[5](index=5&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section highlights that the report contains forward-looking statements based on beliefs and assumptions, which are subject to various risks and uncertainties - The Quarterly Report contains forward-looking statements based on beliefs and assumptions, which are subject to risks, uncertainties, and assumptions[9](index=9&type=chunk) - Key risk factors include: * Prices of crude oil, natural gas liquids, gasoline, diesel, ethanol, and biodiesel * General energy prices and production/demand levels * Changes in applicable laws and regulations (tax, environmental, transportation, employment) * Hazards or operating risks related to transporting and distributing petroleum products * Availability and cost of capital and ability to access capital sources * Ability to successfully identify and complete accretive acquisitions and integrate acquired assets[10](index=10&type=chunk)[12](index=12&type=chunk) - The company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law[12](index=12&type=chunk) [PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This part presents the unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for NGL Energy Partners LP, including the Balance Sheets, Statements of Operations, Comprehensive (Loss) Income, Changes in Equity, and Cash Flows, along with detailed notes explaining the company's organization, significant accounting policies, acquisitions, debt, equity, and segment information [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's unaudited condensed consolidated balance sheets as of September 30, 2019, and March 31, 2019 Condensed Consolidated Balance Sheets (in Thousands) | ASSETS | September 30, 2019 | March 31, 2019 | | :------------------------------------------------------------------------------------------------- | :----------------- | :------------- | | **CURRENT ASSETS:** | | | | Cash and cash equivalents | $21,154 | $18,572 | | Accounts receivable-trade, net | 987,875 | 998,203 | | Inventories | 308,793 | 252,770 | | Assets held for sale | — | 387,450 | | **Total current assets** | **1,531,198** | **1,812,673** | | PROPERTY, PLANT AND EQUIPMENT, net | 2,485,880 | 1,828,940 | | GOODWILL | 1,176,042 | 1,113,149 | | INTANGIBLE ASSETS, net | 1,194,581 | 800,889 | | OPERATING LEASE RIGHT-OF-USE ASSETS | 203,122 | — | | **Total assets** | **$6,664,023** | **$5,902,493** | | **LIABILITIES AND EQUITY** | | | | **CURRENT LIABILITIES:** | | | | Accounts payable-trade | $842,064 | $879,063 | | Accrued expenses and other payables | 336,126 | 191,731 | | Liabilities held for sale | — | 142,781 | | **Total current liabilities** | **1,298,510** | **1,251,153** | | LONG-TERM DEBT, net | 2,773,235 | 2,160,133 | | OPERATING LEASE OBLIGATIONS | 132,132 | — | | CLASS D 9.00% PREFERRED UNITS | 343,748 | — | | **Total equity** | **2,051,911** | **2,277,818** | | **Total liabilities and equity** | **$6,664,023** | **$5,902,493** | - Total assets increased by **$761.5 million** from March 31, 2019, to September 30, 2019, primarily driven by increases in property, plant and equipment, goodwill, and intangible assets[15](index=15&type=chunk) - Total liabilities increased by **$1.136 billion**, mainly due to a significant rise in long-term debt and accrued expenses, alongside the introduction of operating lease obligations and Class D preferred units[15](index=15&type=chunk)[16](index=16&type=chunk) [Unaudited Condensed Consolidated Statements of Operations](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) This section presents the company's unaudited condensed consolidated statements of operations for the three and six months ended September 30, 2019, and 2018 Condensed Consolidated Statements of Operations (in Thousands, except per unit amounts) | REVENUES: | Three Months Ended September 30, 2019 | Three Months Ended September 30, 2018 | Six Months Ended September 30, 2019 | Six Months Ended September 30, 2018 | | :-------------------------------------------- | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Total Revenues | $4,289,336 | $5,115,975 | $9,455,761 | $9,375,047 | | Total Cost of Sales | 4,057,376 | 4,945,204 | 9,052,342 | 9,151,432 | | Operating Income (Loss) | 46,395 | 14,347 | 82,629 | (163,644) | | Income (Loss) From Continuing Operations Before Income Taxes | 1,298 | (25,331) | (1,345) | (283,410) | | (Loss) Income From Discontinued Operations, net of Tax | (202,024) | 380,961 | (191,663) | 470,402 | | Net (Loss) Income | (201,366) | 354,939 | (193,327) | 185,650 | | NET (LOSS) INCOME ATTRIBUTABLE TO NGL ENERGY PARTNERS LP | $ (201,237) | $355,505 | $ (192,930) | $186,959 | | BASIC (LOSS) INCOME PER COMMON UNIT: | | | | | | Loss From Continuing Operations | $ (0.13) | $ (0.40) | $ (1.17) | $ (2.69) | | (Loss) Income From Discontinued Operations, net of Tax | (1.59) | 3.10 | (1.51) | 3.86 | | Net (Loss) Income | $ (1.72) | $ 2.70 | $ (2.68) | $ 1.17 | - For the three months ended September 30, 2019: * Total revenues decreased by **$826.6 million (16.16%)** YoY * Operating income increased by **$32.0 million (223.05%)** YoY * Net loss attributable to NGL Energy Partners LP was **$(201.2) million**, a significant decrease from **$355.5 million** net income in the prior year, primarily due to a **$(202.0) million** loss from discontinued operations[18](index=18&type=chunk) - For the six months ended September 30, 2019: * Total revenues increased by **$80.7 million (0.86%)** YoY * Operating income significantly improved to **$82.6 million** from a loss of **$(163.6) million** in the prior year * Net loss attributable to NGL Energy Partners LP was **$(192.9) million**, compared to a net income of **$187.0 million** in the prior year, largely due to a **$(191.7) million** loss from discontinued operations[18](index=18&type=chunk) [Unaudited Condensed Consolidated Statements of Comprehensive (Loss) Income](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20%28Loss%29%20Income) This section presents the company's unaudited condensed consolidated statements of comprehensive (loss) income for the three and six months ended September 30, 2019, and 2018 Condensed Consolidated Statements of Comprehensive (Loss) Income (in Thousands) | | Three Months Ended September 30, 2019 | Three Months Ended September 30, 2018 | Six Months Ended September 30, 2019 | Six Months Ended September 30, 2018 | | :---------------------------- | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Net (loss) income | $ (201,366) | $354,939 | $ (193,327) | $185,650 | | Other comprehensive loss | (46) | (13) | (9) | (24) | | Comprehensive (loss) income | $ (201,412) | $354,926 | $ (193,336) | $185,626 | - For the three months ended September 30, 2019, comprehensive loss was **$(201.4) million**, a significant decline from comprehensive income of **$354.9 million** in the prior year[20](index=20&type=chunk) - For the six months ended September 30, 2019, comprehensive loss was **$(193.3) million**, compared to comprehensive income of **$185.6 million** in the prior year[20](index=20&type=chunk) [Unaudited Condensed Consolidated Statements of Changes in Equity](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) This section presents the company's unaudited condensed consolidated statements of changes in equity for the six months ended September 30, 2019 Condensed Consolidated Statement of Changes in Equity (Six Months Ended September 30, 2019, in Thousands) | | General Partner | Preferred Units | Common Units | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | Total Equity | | :------------------------------------ | :-------------- | :-------------- | :----------- | :-------------------------------------------- | :----------------------- | :----------- | | BALANCES AT MARCH 31, 2019 | $ (50,603) | $202,731 | $2,067,197 | $ (255) | $58,748 | $2,277,818 | | Distributions | (170) | — | (118,299) | — | — | (118,469) | | Issuance of Class C preferred units | — | 42,638 | — | — | — | 42,638 | | Issuance of Class B preferred units | — | 102,757 | — | — | — | 102,757 | | Class A preferred units redemption | — | — | (78,797) | — | — | (78,797) | | Net (loss) income | (268) | — | (192,662) | — | (397) | (193,327) | | BALANCES AT SEPTEMBER 30, 2019 | $ (51,014) | $348,393 | $1,697,015 | $ (264) | $57,781 | $2,051,911 | - Total equity decreased by **$225.9 million** from March 31, 2019, to September 30, 2019, primarily due to net loss and distributions, partially offset by preferred unit issuances[16](index=16&type=chunk)[23](index=23&type=chunk) - Significant equity activities during the six months ended September 30, 2019, included the issuance of Class B and Class C preferred units, redemption of Class A preferred units, and a net loss[23](index=23&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the company's unaudited condensed consolidated statements of cash flows for the six months ended September 30, 2019, and 2018 Condensed Consolidated Statements of Cash Flows (Six Months Ended September 30, in Thousands) | | 2019 | 2018 | | :------------------------------------------------------------ | :---------- | :---------- | | Net cash used in operating activities | $ (4,488) | $ (87,881) | | Net cash (used in) provided by investing activities | $ (633,214) | $389,159 | | Net cash provided by (used in) financing activities | $640,284 | $ (286,998) | | Net increase in cash and cash equivalents | $2,582 | $14,280 | | Cash and cash equivalents, end of period | $21,154 | $36,374 | - Net cash used in operating activities significantly decreased from **$(87.9) million** in 2018 to **$(4.5) million** in 2019[28](index=28&type=chunk) - Investing activities shifted from providing **$389.2 million** in 2018 to using **$(633.2) million** in 2019, primarily due to increased capital expenditures and acquisitions[28](index=28&type=chunk) - Financing activities provided **$640.3 million** in 2019, a substantial increase from using **$(287.0) million** in 2018, driven by proceeds from debt and preferred unit issuances[28](index=28&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the unaudited condensed consolidated financial statements, explaining the company's organization, accounting policies, and specific financial items [Note 1—Organization and Operations](index=14&type=section&id=Note%201%E2%80%94Organization%20and%20Operations) NGL Energy Partners LP is a Delaware limited partnership with NGL Energy Holdings LLC as its general partner, operating in Crude Oil Logistics, Water Solutions, Liquids, and Refined Products and Renewables segments - NGL Energy Partners LP operates through four segments: Crude Oil Logistics, Water Solutions, Liquids, and Refined Products and Renewables[32](index=32&type=chunk) - On September 30, 2019, the company completed the sale of TransMontaigne Product Services, LLC (TPSL) for approximately **$275.5 million**, classifying its results as discontinued operations[31](index=31&type=chunk) - The sale of the Retail Propane segment to Superior Plus Corp. for **$889.8 million** in cash was completed on July 10, 2018, with its results also classified as discontinued operations[32](index=32&type=chunk) [Note 2—Significant Accounting Policies](index=15&type=section&id=Note%202%E2%80%94Significant%20Accounting%20Policies) The financial statements are prepared in accordance with GAAP for interim information, with key estimates including fair value of acquisitions and derivatives, collectibility of receivables, and impairment assessments - Unaudited condensed consolidated financial statements are prepared in accordance with GAAP for interim information, with certain annual disclosures excluded[35](index=35&type=chunk) - Critical estimates include: * Fair value of assets and liabilities in acquisitions * Fair value of derivative instruments * Collectibility of accounts receivable and recoverability of inventories * Impairment of long-lived assets and goodwill[38](index=38&type=chunk) - All derivative financial instrument contracts are recorded at fair value, except for certain physical contracts qualifying for the normal purchase and normal sale election[42](index=42&type=chunk) Inventories (in Thousands) | | September 30, 2019 | March 31, 2019 | | :---------------------------- | :----------------- | :------------- | | Crude oil | $62,794 | $51,359 | | Natural gas liquids: | | | | Propane | 49,060 | 33,478 | | Butane | 35,386 | 15,294 | | Other | 8,238 | 7,482 | | Refined products: | | | | Gasoline | 106,083 | 87,661 | | Diesel | 23,751 | 37,791 | | Renewables: | | | | Ethanol | 10,790 | 14,955 | | Biodiesel | 12,691 | 4,750 | | **Total** | **$308,793** | **$252,770** | [Note 3—(Loss) Income Per Common Unit](index=20&type=section&id=Note%203%E2%80%94%28Loss%29%20Income%20Per%20Common%20Unit) This note details the calculation of basic and diluted (loss) income per common unit, showing a net loss per common unit of $(1.72) for the three months and $(2.68) for the six months ended September 30, 2019 Basic and Diluted (Loss) Income Per Common Unit | | Three Months Ended September 30, 2019 | Three Months Ended September 30, 2018 | Six Months Ended September 30, 2019 | Six Months Ended September 30, 2018 | | :------------------------------------------------------------ | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Loss from continuing operations | $ (0.13) | $ (0.40) | $ (1.17) | $ (2.69) | | (Loss) income from discontinued operations, net of tax | (1.59) | 3.10 | (1.51) | 3.86 | | **Net (Loss) Income** | **$ (1.72)** | **$ 2.70** | **$ (2.68)** | **$ 1.17** | | Basic weighted average common units outstanding | 126,979,034 | 122,380,197 | 126,435,870 | 121,964,593 | | Diluted weighted average common units outstanding | 126,979,034 | 122,380,197 | 126,435,870 | 121,964,593 | - All potentially dilutive securities were anti-dilutive for all periods presented[67](index=67&type=chunk) - Net loss from continuing operations allocated to common unitholders was **$(16.3) million** for the three months and **$(147.7) million** for the six months ended September 30, 2019[69](index=69&type=chunk) - Net loss from discontinued operations allocated to common unitholders was **$(201.8) million** for the three months and **$(191.5) million** for the six months ended September 30, 2019[69](index=69&type=chunk) [Note 4—Acquisitions](index=21&type=section&id=Note%204%E2%80%94Acquisitions) During the six months ended September 30, 2019, NGL Energy Partners LP completed several acquisitions, including Mesquite Disposals Unlimited, LLC for $885.3 million, primarily expanding the Water Solutions segment - On July 2, 2019, NGL Energy Partners LP acquired Mesquite Disposals Unlimited, LLC (including 34 saltwater disposal wells) for a preliminary purchase price of **$885.3 million**, consisting of cash, Class B Preferred Units, and contingent deferred payments[71](index=71&type=chunk)[73](index=73&type=chunk) Preliminary Fair Values of Mesquite Acquisition (in Thousands) | Asset/Liability | September 30, 2019 | | :-------------------------- | :----------------- | | Property, plant and equipment | $377,525 | | Goodwill | 57,782 | | Intangible assets | 454,650 | | Other noncurrent liabilities| (4,700) | | **Fair value of net assets acquired** | **$885,257** | - The Mesquite acquisition generated **$25.6 million** in revenues and **$8.4 million** in operating income for the six months ended September 30, 2019[77](index=77&type=chunk) - The company also acquired one saltwater disposal facility for approximately **$53.0 million**, recording **$3.4 million** in revenues and **$0.8 million** in operating income for the six months ended September 30, 2019[78](index=78&type=chunk)[84](index=84&type=chunk) [Note 5—Property, Plant and Equipment](index=25&type=section&id=Note%205%E2%80%94Property%20Plant%20and%20Equipment) Property, plant and equipment, net, increased significantly to $2.49 billion at September 30, 2019, primarily due to acquisitions in the Water Solutions segment Property, Plant and Equipment, Net (in Thousands) | Description | September 30, 2019 | March 31, 2019 | | :---------------------------------------- | :----------------- | :------------- | | Water treatment facilities and equipment | $1,101,336 | $704,666 | | Construction in progress | 541,443 | 290,805 | | Total gross property, plant and equipment | 2,955,109 | 2,246,397 | | Accumulated depreciation | (469,229) | (417,457) | | **Net property, plant and equipment** | **$2,485,880** | **$1,828,940** | - Net property, plant and equipment increased by **$656.9 million** from March 31, 2019, to September 30, 2019[92](index=92&type=chunk) Depreciation Expense (in Thousands) | Period | 2019 | 2018 | | :------------------------------------ | :-------- | :-------- | | Three Months Ended September 30, | $31,334 | $25,831 | | Six Months Ended September 30, | $56,790 | $50,408 | - The Water Solutions segment recorded a net loss on disposal or impairment of assets of **$3.6 million** for the three months and **$3.2 million** for the six months ended September 30, 2019[97](index=97&type=chunk) [Note 6—Goodwill](index=26&type=section&id=Note%206%E2%80%94Goodwill) Goodwill increased by $62.9 million to $1.18 billion at September 30, 2019, primarily due to acquisitions in the Water Solutions segment Changes in Goodwill by Segment (Six Months Ended September 30, 2019, in Thousands) | Segment | Balances at March 31, 2019 | Revisions to Acquisition Accounting | Acquisitions | Balances at September 30, 2019 | | :-------------------------- | :------------------------- | :---------------------------------- | :----------- | :----------------------------- | | Crude Oil Logistics | $579,846 | — | — | $579,846 | | Water Solutions | 410,139 | 4,755 | 60,195 | 475,089 | | Liquids | 103,421 | (2,057) | — | 101,364 | | Refined Products and Renewables | 19,743 | — | — | 19,743 | | **Total** | **$1,113,149** | **$2,698** | **$60,195** | **$1,176,042** | - Goodwill increased by **$62.9 million** during the six months ended September 30, 2019, primarily from acquisitions in the Water Solutions segment[98](index=98&type=chunk) - The Mesquite acquisition contributed **$57.8 million** to goodwill, representing a premium paid to expand disposal sites and enhance competitive position[75](index=75&type=chunk)[76](index=76&type=chunk) [Note 7—Intangible Assets](index=26&type=section&id=Note%207%E2%80%94Intangible%20Assets) Intangible assets, net, increased to $1.19 billion at September 30, 2019, mainly due to acquisitions, with a weighted-average remaining amortization period of approximately 16.2 years Intangible Assets, Net (in Thousands) | Description | September 30, 2019 | March 31, 2019 | | :------------------------ | :----------------- | :------------- | | Customer relationships | $576,883 | $372,849 | | Customer commitments | 407,683 | 235,083 | | Rights-of-way and easements | 79,385 | 68,900 | | Water rights | 59,389 | 61,850 | | Executory contracts and other agreements | 36,394 | 30,018 | | Non-compete agreements | 15,460 | 10,153 | | Debt issuance costs | 10,304 | 12,824 | | Trade names (non-amortizable) | 2,800 | 2,800 | | **Total Net Intangible Assets** | **$1,194,581** | **$800,889** | - Net intangible assets increased by **$393.7 million** from March 31, 2019, to September 30, 2019[99](index=99&type=chunk) - The weighted-average remaining amortization period for intangible assets is approximately **16.2 years**[102](index=102&type=chunk) Amortization Expense (in Thousands) | Recorded In | Three Months Ended September 30, 2019 | Three Months Ended September 30, 2018 | Six Months Ended September 30, 2019 | Six Months Ended September 30, 2018 | | :-------------------------- | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Depreciation and amortization | $31,779 | $26,766 | $60,077 | $54,082 | | Cost of sales | 88 | 101 | 176 | 283 | | Interest expense | 1,280 | 1,225 | 2,556 | 2,418 | | Operating expenses | 111 | — | 262 | — | | **Total** | **$33,258** | **$28,092** | **$63,071** | **$56,783** | [Note 8—Long-Term Debt](index=28&type=section&id=Note%208%E2%80%94Long-Term%20Debt) Long-term debt, net, increased to $2.77 billion at September 30, 2019, primarily due to the issuance of $450.0 million in 2026 Notes and a $250.0 million Term Credit Agreement Long-Term Debt, Net (in Thousands) | Description | September 30, 2019 | March 31, 2019 | | :---------------------------------------- | :----------------- | :------------- | | Revolving credit facility: | | | | Expansion capital borrowings | $450,000 | $275,000 | | Working capital borrowings | 643,000 | 896,000 | | Senior unsecured notes: | | | | 7.500% Notes due 2023 | 601,164 | 600,407 | | 6.125% Notes due 2025 | 384,470 | 384,043 | | 7.500% Notes due 2026 | 442,548 | — | | Term credit agreement | 247,695 | — | | Other long-term debt | 5,007 | 5,331 | | **Long-term debt, net** | **$2,773,235** | **$2,160,133** | - Long-term debt, net, increased by **$613.1 million** from March 31, 2019, to September 30, 2019[106](index=106&type=chunk) - Key debt activities: * Issued **$450.0 million** of 7.50% Senior Unsecured Notes Due 2026 on April 9, 2019 * Entered into a **$250.0 million** Term Credit Agreement on July 2, 2019, to fund a portion of the Mesquite acquisition[116](index=116&type=chunk)[118](index=118&type=chunk) - The Credit Agreement was amended on October 30, 2019, to adjust lender commitments and eliminate the leverage ratio financial covenant, while adjusting other ratios[111](index=111&type=chunk) [Note 9—Commitments and Contingencies](index=30&type=section&id=Note%209%E2%80%94Commitments%20and%20Contingencies) The company is involved in legal proceedings, has environmental liabilities, and significant contractual obligations totaling $5.71 billion at September 30, 2019 - The company has accrued **$2.5 million** related to a lawsuit with LCT Capital, LLC, with potential liability estimated to be less than **$4.0 million**[128](index=128&type=chunk) - An environmental liability of **$2.3 million** is recorded at September 30, 2019[130](index=130&type=chunk) Total Contractual Obligations at September 30, 2019 (in Thousands) | Obligation Type | Total | Six Months Ending March 31, 2020 | | :-------------------------------------- | :------------ | :------------------------------- | | Principal payments on long-term debt | $2,794,465 | $630 | | Interest payments on long-term debt | 775,658 | 83,052 | | Letters of credit | 189,644 | — | | Future minimum commitment payments | 234,498 | 29,861 | | Future minimum lease payments | 244,578 | 39,970 | | Construction commitments | 7,992 | 7,992 | | Fixed-price commodity purchase commitments: Crude oil | 75,128 | 75,128 | | Fixed-price commodity purchase commitments: Natural gas liquids | 16,938 | 15,597 | | Index-price commodity purchase commitments: Crude oil | 1,076,425 | 731,963 | | Index-price commodity purchase commitments: Natural gas liquids | 342,971 | 341,410 | | **Total contractual obligations** | **$5,713,297**| **$1,326,403** | [Note 10—Equity](index=34&type=section&id=Note%2010%E2%80%94Equity) The Partnership's equity consists of a 0.1% general partner interest and 99.9% limited partner interest, with significant activities including preferred unit redemptions and issuances - The Partnership's equity structure includes a **0.1% general partner interest** and a **99.9% limited partner interest** (common units)[144](index=144&type=chunk) - Key equity transactions: * Redeemed all **19,942,169 Class A Preferred Units** for a total of **$269.4 million** in April and May 2019 * Issued **4,185,642 Class B Preferred Units** on July 2, 2019, to fund a portion of the Mesquite acquisition * Issued **1,800,000 Class C Preferred Units** on April 2, 2019, for net proceeds of **$42.9 million** * Issued **400,000 Class D Preferred Units** and warrants for **$385.4 million** on July 2, 2019, to fund the Mesquite acquisition * Post-period, issued **200,000 Class D Preferred Units** and warrants for **$200.0 million** on October 31, 2019, for the Hillstone acquisition[152](index=152&type=chunk)[153](index=153&type=chunk)[155](index=155&type=chunk)[158](index=158&type=chunk)[160](index=160&type=chunk)[167](index=167&type=chunk) - A common unit repurchase plan was authorized on August 30, 2019, allowing repurchase of up to **$150.0 million** of common units through September 30, 2021[148](index=148&type=chunk) [Note 11—Fair Value of Financial Instruments](index=39&type=section&id=Note%2011%E2%80%94Fair%20Value%20of%20Financial%20Instruments) The company records commodity derivative contracts at fair value, with net commodity derivative assets increasing to $17.5 million at September 30, 2019 Estimated Fair Values of Commodity Derivative Assets and Liabilities (in Thousands) | | September 30, 2019 | March 31, 2019 | | :---------------------------- | :----------------- | :------------- | | Level 1 measurements | $45,652 | $49,509 | | Level 2 measurements | 35,310 | 77,926 | | Netting of counterparty contracts | (8,350) | (7,501) | | Net cash collateral held | (23,848) | (18,271) | | **Commodity derivatives (Net Asset)** | **$48,764** | **$101,663** | | **Commodity derivatives (Net Liability)** | **$ (31,224)** | **$ (89,104)** | - Net commodity derivative asset increased to **$17.5 million** at September 30, 2019, from **$12.6 million** at March 31, 2019[185](index=185&type=chunk) - Net gains from commodity derivatives: * Three months ended September 30, 2019: **$24.6 million** * Six months ended September 30, 2019: **$54.2 million**[190](index=190&type=chunk) - Fixed-rate notes (2023, 2025, 2026 Notes) are valued based on publicly traded quotes, classified as Level 1 in the fair value hierarchy[195](index=195&type=chunk) [Note 12—Segments](index=43&type=section&id=Note%2012%E2%80%94Segments) The company operates in Crude Oil Logistics, Water Solutions, Liquids, and Refined Products and Renewables segments, with total revenues of $4.29 billion for the three months and $9.46 billion for the six months ended September 30, 2019 Total Revenues by Segment (in Thousands) | Segment | Three Months Ended September 30, 2019 | Three Months Ended September 30, 2018 | Six Months Ended September 30, 2019 | Six Months Ended September 30, 2018 | | :------------------------------ | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Crude Oil Logistics | $641,152 | $860,054 | $1,357,312 | $1,643,884 | | Water Solutions | 101,249 | 79,764 | 173,032 | 155,909 | | Liquids | 328,509 | 550,442 | 676,156 | 1,010,339 | | Refined Products and Renewables | 3,218,162 | 3,625,123 | 7,248,742 | 6,564,168 | | Corporate and Other | 264 | 592 | 519 | 747 | | **Total revenues** | **$4,289,336** | **$5,115,975** | **$9,455,761** | **$9,375,047** | Operating Income (Loss) by Segment (in Thousands) | Segment | Three Months Ended September 30, 2019 | Three Months Ended September 30, 2018 | Six Months Ended September 30, 2019 | Six Months Ended September 30, 2018 | | :------------------------------ | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Crude Oil Logistics | $38,520 | $31,022 | $72,322 | $ (68,716) | | Water Solutions | 21,274 | 9,770 | 34,963 | 10,739 | | Liquids | 8,397 | 10,758 | 16,881 | 13,381 | | Refined Products and Renewables | 16,681 | (1,851) | 12,282 | (66,266) | | Corporate and Other | (38,477) | (35,352) | (53,819) | (52,782) | | **Total operating income (loss)** | **$46,395** | **$14,347** | **$82,629** | **$ (163,644)** | - Water Solutions segment's long-lived assets increased significantly from **$1.60 billion** at March 31, 2019, to **$2.75 billion** at September 30, 2019, reflecting substantial acquisitions and development[203](index=203&type=chunk) [Note 13—Transactions with Affiliates](index=46&type=section&id=Note%2013%E2%80%94Transactions%20with%20Affiliates) The company engages in various transactions with affiliates, including WPX Energy, Inc. and SemGroup Corporation, involving crude oil purchases/sales and wastewater treatment - NGL Energy Partners LP conducts business with WPX Energy, Inc. and SemGroup Corporation, both considered affiliates[208](index=208&type=chunk)[209](index=209&type=chunk) Related Party Transactions (Six Months Ended September 30, in Thousands) | Transaction Type | 2019 | 2018 | | :---------------------------------------- | :-------- | :-------- | | Sales to WPX | $22,828 | $9,771 | | Purchases from WPX | $166,167 | $157,327 | | Sales to SemGroup | $458 | $669 | | Purchases from SemGroup | $ — | $1,337 | | Sales to entities affiliated with management | $1,720 | $5,645 | | Purchases from entities affiliated with management | $2,115 | $1,806 | - The company purchased a **50% interest** in KAIR2014 LLC (an aircraft rental company) for **$0.9 million** and a **7.62% aggregate interest** in its general partner, NGL Energy Holdings LLC, for **$13.9 million** from affiliates[212](index=212&type=chunk)[213](index=213&type=chunk)[214](index=214&type=chunk) [Note 14—Revenue from Contracts with Customers](index=47&type=section&id=Note%2014%E2%80%94Revenue%20from%20Contracts%20with%20Customers) Revenue is recognized as performance obligations are satisfied, primarily under ASC 606, with contract liabilities increasing to $27.0 million at September 30, 2019 - Revenue is recognized when performance obligations are satisfied, primarily under ASC 606[215](index=215&type=chunk) - Revenue from contracts accounted for as derivatives under ASC 815 within the Refined Products and Renewables segment included **$81.0 million** of net gains for the six months ended September 30, 2019[218](index=218&type=chunk) Contract Liabilities (in Thousands) | | March 31, 2019 | September 30, 2019 | | :------------------------------------ | :------------- | :----------------- | | Contract liabilities balance | $8,461 | $27,045 | | Payment received and deferred | | 30,925 | | Payment recognized in revenue | | (12,341) | [Note 15—Leases](index=48&type=section&id=Note%2015%E2%80%94Leases) The company adopted ASC 842 effective April 1, 2019, recognizing operating lease right-of-use assets of $551.2 million and operating lease obligations of $549.0 million upon adoption - ASC 842 was adopted effective April 1, 2019, using the modified retrospective method, resulting in the recognition of **$551.2 million** in operating lease right-of-use assets and **$549.0 million** in operating lease obligations[222](index=222&type=chunk) - At September 30, 2019: * Operating lease right-of-use assets: **$203.1 million** * Current operating lease obligations: **$68.1 million** * Noncurrent operating lease obligations: **$132.1 million** * Weighted-average remaining lease term: **6.04 years** * Weighted-average discount rate: **5.78%**[229](index=229&type=chunk) Lease Expense (Six Months Ended September 30, 2019, in Thousands) | Lease Component | 2019 | | :------------------ | :------- | | Operating lease cost| $44,387 | | Variable lease cost | 5,665 | | Short-term lease cost | 259 | | **Total lease cost**| **$50,311**| [Note 16—Assets and Liabilities Held for Sale and Discontinued Operations](index=51&type=section&id=Note%2016%E2%80%94Assets%20and%20Liabilities%20Held%20for%20Sale%20and%20Discontinued%20Operations) The sale of TransMontaigne Product Services, LLC (TPSL) was completed on September 30, 2019, for approximately $275.5 million, with its operations reported as discontinued - The sale of TPSL was completed on September 30, 2019, for approximately **$275.5 million**, with its assets and liabilities classified as held for sale at March 31, 2019[238](index=238&type=chunk) Major Classes of Assets and Liabilities of TPSL Held for Sale at March 31, 2019 (in Thousands) | Asset/Liability Class | Amount | | :------------------------------ | :--------- | | Current Assets Held for Sale | $387,450 | | Noncurrent Assets Held for Sale | 231,858 | | **Total assets held for sale** | **$619,308** | | Current Liabilities Held for Sale | $142,781 | Results of Discontinued Operations (in Thousands) | | Three Months Ended September 30, 2019 | Three Months Ended September 30, 2018 | Six Months Ended September 30, 2019 | Six Months Ended September 30, 2018 | | :---------------------------------------- | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Revenues | $1,304,232 | $1,542,845 | $2,775,698 | $3,194,880 | | Operating (loss) income | (202,001) | 379,585 | (191,682) | 468,802 | | **(Loss) income from discontinued operations, net of tax** | **$ (202,024)** | **$380,961** | **$ (191,663)** | **$470,402** | [Note 17—Subsequent Events](index=52&type=section&id=Note%2017%E2%80%94Subsequent%20Events) Subsequent to September 30, 2019, NGL Energy Partners LP acquired Hillstone Environmental Partners, LLC for $624.4 million and completed another acquisition of real property and disposal permits - On October 31, 2019, NGL Energy Partners LP acquired Hillstone Environmental Partners, LLC for **$624.4 million**, expanding its water pipeline and disposal system in the Delaware Basin[243](index=243&type=chunk) - Hillstone's assets include **19 saltwater disposal wells** with **580,000 barrels per day** permitted capacity and a newly-built pipeline network with **680,000 barrels per day** transportation capacity, plus **22 additional permits**[243](index=243&type=chunk) - On November 7, 2019, the company acquired **50%** of one entity and **100%** of another for **$55.9 million**, gaining real property, right-of-ways, and saltwater disposal permits, and entering a joint development agreement[245](index=245&type=chunk)[247](index=247&type=chunk) [Note 18—Unaudited Condensed Consolidating Guarantor and Non-Guarantor Financial Information](index=53&type=section&id=Note%2018%E2%80%94Unaudited%20Condensed%20Consolidating%20Guarantor%20and%20Non-Guarantor%20Financial%20Information) This note provides unaudited condensed consolidating financial information for NGL Energy Partners LP, NGL Energy Finance Corp., guarantor subsidiaries, and non-guarantor subsidiaries - Certain wholly-owned subsidiaries jointly and severally guarantee the Senior Unsecured Notes and Term Credit Agreement[248](index=248&type=chunk) - The financial information is presented in columnar format for NGL Energy Partners LP (Parent), NGL Energy Finance Corp., guarantor subsidiaries, and non-guarantor subsidiaries[248](index=248&type=chunk) - Investments in consolidated subsidiaries are accounted for as equity method investments, and intercompany transactions are reported on a net basis[251](index=251&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=63&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations for the three and six months ended September 30, 2019 [Overview](index=63&type=section&id=Overview) NGL Energy Partners LP operates in Crude Oil Logistics, Water Solutions, Liquids, and Refined Products and Renewables segments, with recent dispositions significantly impacting future financial results - NGL Energy Partners LP operates in Crude Oil Logistics, Water Solutions, Liquids, and Refined Products and Renewables segments[273](index=273&type=chunk) - The sale of TransMontaigne Product Services, LLC (TPSL) was completed on September 30, 2019, for approximately **$275.5 million**, with its results classified as discontinued operations[272](index=272&type=chunk) - The sale of the Retail Propane segment was completed on July 10, 2018, for **$889.8 million**, also classified as discontinued operations[273](index=273&type=chunk) [Consolidated Results of Operations](index=64&type=section&id=Consolidated%20Results%20of%20Operations) Consolidated revenues decreased for the three months ended September 30, 2019, but slightly increased for the six months, while net income attributable to NGL Energy Partners LP turned into a substantial loss due to discontinued operations Consolidated Statements of Operations (in Thousands) | | Three Months Ended September 30, 2019 | Three Months Ended September 30, 2018 | Six Months Ended September 30, 2019 | Six Months Ended September 30, 2018 | | :------------------------------------------------------------ | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Total revenues | $4,289,336 | $5,115,975 | $9,455,761 | $9,375,047 | | Operating income (loss) | 46,395 | 14,347 | 82,629 | (163,644) | | (Loss) income from discontinued operations, net of tax | (202,024) | 380,961 | (191,663) | 470,402 | | Net (loss) income attributable to NGL Energy Partners LP | $ (201,237) | $355,505 | $ (192,930) | $186,959 | - For the three months ended September 30, 2019, total revenues decreased by **$826.6 million (16.2%)** YoY, while operating income increased by **$32.0 million (223.1%)** YoY[275](index=275&type=chunk) - For the six months ended September 30, 2019, total revenues increased by **$80.7 million (0.9%)** YoY, and operating income improved significantly from a loss of **$(163.6) million** to a gain of **$82.6 million**[275](index=275&type=chunk) [Items Impacting the Comparability of Our Financial Results](index=64&type=section&id=Items%20Impacting%20the%20Comparability%20of%20Our%20Financial%20Results) The comparability of financial results is significantly affected by numerous business combinations and dispositions, altering the company's operational and financial landscape - Current and future results may not be comparable to historical results due to business combinations, disposals, and other transactions[276](index=276&type=chunk) - Acquisitions impacting comparability: * Mesquite Disposals Unlimited, LLC (34 saltwater disposal wells) on July 2, 2019 * One saltwater disposal facility (5 saltwater disposal wells) during the six months ended September 30, 2019 * Remaining **18.375% interest** in NGL Water Pipelines, LLC, six saltwater disposal facilities, two ranches, and four freshwater facilities during fiscal year ended March 31, 2019 * Natural gas liquids terminal business of DCP Midstream, LP in the Liquids segment[277](index=277&type=chunk)[278](index=278&type=chunk)[279](index=279&type=chunk)[280](index=280&type=chunk) - The disposition of TPSL on September 30, 2019, for **$275.5 million**, resulted in a **$174.4 million** loss on disposal and significantly impacts comparability[281](index=281&type=chunk) [Recent Developments](index=65&type=section&id=Recent%20Developments) Recent developments include significant acquisitions like Mesquite Disposals Unlimited, LLC and Hillstone Environmental Partners, LLC, funded partly by new debt and preferred unit issuances - Acquisitions: * Mesquite Disposals Unlimited, LLC (34 saltwater disposal wells) on July 2, 2019 * One saltwater disposal facility (5 saltwater disposal wells) during the six months ended September 30, 2019 * Hillstone Environmental Partners, LLC (subsequent event, October 31, 2019)[278](index=278&type=chunk)[279](index=279&type=chunk)[284](index=284&type=chunk) - Financing: * Entered into a **$250.0 million** Term Credit Agreement on July 2, 2019 * Issued **400,000 Class D Preferred Units** and warrants for **$385.4 million** on July 2, 2019 * Issued **200,000 Class D Preferred Units** and warrants for **$200.0 million** on October 31, 2019 (subsequent event)[282](index=282&type=chunk)[283](index=283&type=chunk)[284](index=284&type=chunk) - Other: * Disposition of TPSL on September 30, 2019 * Authorized a common unit repurchase plan of up to **$150.0 million** through September 30, 2021[281](index=281&type=chunk)[285](index=285&type=chunk) [Segment Operating Results for the Three Months Ended September 30, 2019 and 2018](index=66&type=section&id=Segment%20Operating%20Results%20for%20the%20Three%20Months%20Ended%20September%2030%2C%202019%20and%202018) This section details the operating results for each segment for the three months ended September 30, 2019, and 2018, highlighting revenue and income changes [Crude Oil Logistics](index=66&type=section&id=Crude%20Oil%20Logistics_3M) For the three months ended September 30, 2019, Crude Oil Logistics revenues decreased due to lower crude oil prices, but operating income increased due to derivative gains and increased transportation revenues Crude Oil Logistics Operating Results (Three Months Ended September 30, in Thousands) | | 2019 | 2018 | Change | | :------------------------------------ | :---------- | :---------- | :---------- | | Total revenues | $643,450 | $867,138 | $ (223,688) | | Cost of sales-derivative (gain) loss | (6,792) | 422 | (7,214) | | Segment operating income (loss) | $38,520 | $31,022 | $7,498 | | Crude oil sold ($/barrel) | $57.257 | $69.428 | $ (12.171) | | Crude oil product margin ($/barrel) | $2.368 | $2.167 | $0.201 | - Crude oil sales revenues decreased by **$228.9 million** due to lower crude oil prices and decreased production[289](index=289&type=chunk) - Crude oil transportation and other revenues increased by **$5.2 million**, with Grand Mesa Pipeline revenues up **$2.9 million** due to increased production in the DJ Basin, and crude transportation up **$2.3 million** from increased barge activity[290](index=290&type=chunk) - Cost of sales-derivative included **$6.8 million** of net gains in 2019, compared to **$0.4 million** of net losses in 2018[292](index=292&type=chunk) [Water Solutions](index=67&type=section&id=Water%20Solutions_3M) For the three months ended September 30, 2019, Water Solutions revenues increased by $21.5 million and operating income surged by $11.5 million, driven by higher disposal fees and increased volumes from acquisitions Water Solutions Operating Results (Three Months Ended September 30, in Thousands) | | 2019 | 2018 | Change | | :------------------------------------ | :---------- | :---------- | :--------- | | Total revenues | $101,249 | $79,764 | $21,485 | | Cost of sales-derivative (gain) loss | (7,535) | 7,112 | (14,647) | | Segment operating income | $21,274 | $9,770 | $11,504 | | Wastewater processed (barrels per day) | 1,258,353 | 1,007,649 | 250,704 | | Service fees for wastewater processed ($/barrel) | $0.64 | $0.56 | $0.08 | - Wastewater disposal service fee revenues increased by **$22.9 million** due to higher prices and increased volumes from acquired and newly developed facilities[295](index=295&type=chunk) - Recovered hydrocarbon revenues decreased by **$3.5 million** due to a lower percentage of skim oil volumes recovered and lower crude oil prices[296](index=296&type=chunk) - Operating and general and administrative expenses increased due to the higher number of owned and operated water disposal facilities[301](index=301&type=chunk) [Liquids](index=69&type=section&id=Liquids_3M) For the three months ended September 30, 2019, Liquids revenues decreased by $221.9 million and operating income decreased by $2.4 million, primarily due to lower commodity prices impacting propane sales Liquids Operating Results (Three Months Ended September 30, in Thousands) | | 2019 | 2018 | Change | | :------------------------------------ | :---------- | :---------- | :---------- | | Propane sales revenues | $116,449 | $236,319 | $ (119,870) | | Butane sales revenues | 87,983 | 146,951 | (58,968) | | Other product sales revenues | 117,997 | 171,099 | (53,102) | | Service revenues | 11,200 | 4,883 | 6,317 | | Segment operating income | $8,397 | $10,758 | $ (2,361) | | Propane product margin ($/gallon) | $0.013 | $0.058 | $ (0.045) | | Butane product margin (loss) ($/gallon) | $0.085 | $ (0.001) | $0.086 | - Propane sales and cost of sales decreased due to lower commodity prices, leading to a decline in propane product margins[307](index=307&type=chunk)[309](index=309&type=chunk) - Butane product margins increased due to higher volumes, including steady volumes at the Chesapeake, Virginia export terminal and strong domestic blending economics[311](index=311&type=chunk) - Service revenues increased by **$6.3 million** due to the addition of new terminals from the March 2019 acquisition[313](index=313&type=chunk) [Refined Products and Renewables](index=72&type=section&id=Refined%20Products%20and%20Renewables_3M) For the three months ended September 30, 2019, Refined Products and Renewables revenues decreased by $407.0 million, but operating income significantly improved due to derivative gains on refined products Refined Products and Renewables Operating Results (Three Months Ended September 30, in Thousands) | | 2019 | 2018 | Change | | :------------------------------------ | :---------- | :---------- | :---------- | | Refined products sales revenues | $3,084,572 | $3,558,229 | $ (473,657) | | Renewables sales revenues | 86,252 | 66,386 | 19,866 | | Refined Products-Derivative (gain) loss | (14,369) | 11,884 | (26,253) | | Renewables-Derivative loss | 763 | 279 | 484 | | Segment operating income (loss) | $16,681 | $ (1,851) | $18,532 | | Refined products product margin ($/barrel) | $0.540 | $0.099 | $0.441 | - Refined products sales revenues decreased due to lower prices, partially offset by increased volumes, while derivative activities generated a **$14.4 million** gain in 2019 compared to an **$11.9 million** loss in 2018[318](index=318&type=chunk)[320](index=320&type=chunk)[321](index=321&type=chunk) - Renewables revenues increased due to higher prices from ethanol renewable identification numbers sales, despite decreased volumes[322](index=322&type=chunk) [Corporate and Other](index=74&type=section&id=Corporate%20and%20Other_3M) For the three months ended September 30, 2019, the Corporate and Other segment's operating loss increased by $3.1 million, primarily due to higher general and administrative expenses, including increased equity-based compensation and acquisition expenses Corporate and Other Operating Results (Three Months Ended September 30, in Thousands) | | 2019 | 2018 | Change | | :------------------------------------ | :-------- | :-------- | :-------- | | Other revenues | $264 | $371 | $ (107) | | General and administrative expenses | 37,543 | 33,258 | 4,285 | | **Operating loss** | **$ (38,477)**| **$ (35,352)**| **$ (3,125)** | - General and administrative expenses increased by **$4.3 million**, primarily due to: * Higher equity-based compensation expense (**$21.3 million** in 2019 vs. **$19.2 million** in 2018) * Increased acquisition expense (**$5.4 million** in 2019 vs. **$2.9 million** in 2018) related to Mesquite and Hillstone acquisitions[325](index=325&type=chunk)[326](index=326&type=chunk) - Equity in earnings of unconsolidated entities decreased by **$0.6 million** due to lower earnings from a water services company and a loss from an aircraft rental company[327](index=327&type=chunk) - Interest expense increased by **$3.7 million** due to the issuance of 2026 Notes, the Term Credit Agreement, and higher average outstanding balances on the Revolving Credit Facility[328](index=328&type=chunk) [Segment Operating Results for the Six Months Ended September 30, 2019 and 2018](index=76&type=section&id=Segment%20Operating%20Results%20for%20the%20Six%20Months%20Ended%20September%2030%2C%202019%20and%202018) This section details the operating results for each segment for the six months ended September 30, 2019, and 2018, highlighting revenue and income changes [Crude Oil Logistics](index=76&type=section&id=Crude%20Oil%20Logistics_6M) For the six months ended September 30, 2019, Crude Oil Logistics revenues decreased by $286.4 million, but operating income significantly improved from a loss to a gain, driven by derivative gains and increased transportation revenues Crude Oil Logistics Operating Results (Six Months Ended September 30, in Thousands) | | 2019 | 2018 | Change | | :------------------------------------ | :---------- | :---------- | :---------- | | Total revenues | $1,369,137 | $1,655,493 | $ (286,356) | | Cost of sales-derivative (gain) loss | (10,063) | 11,680 | (21,743) | | Segment operating income (loss) | $72,322 | $ (68,716) | $141,038 | | Crude oil sold ($/barrel) | $58.896 | $68.441 | $ (9.545) | | Crude oil product margin ($/barrel) | $2.210 | $1.277 | $0.933 | - Crude oil sales revenues decreased by **$303.3 million** due to lower crude oil prices and sales volumes[334](index=334&type=chunk) - Crude oil transportation and other revenues increased by **$17.0 million**, with Grand Mesa Pipeline revenues up **$5.8 million** and a new c

Financial Data and Key Metrics Changes - Adjusted EBITDA totaled $87 million for the quarter, which included an $11 million loss in refined products. Removing the TPSL business would have resulted in pro forma adjusted EBITDA of $97 million for the quarter [23][32] - Total debt is expected to reduce from $2.6 billion to $2.3 billion with no reduction in LTM EBITDA, reducing leverage by about half a term [14][21] - The company declared a $0.39 per unit distribution for the quarter, targeting 1.3 times coverage on a trailing 12-month basis [35] Business Line Data and Key Metrics Changes - The Crude segment generated approximately $52 million of adjusted EBITDA, consistent with prior quarters, with Grand Mesa volumes averaging 133,000 barrels per day [24][25] - Water adjusted EBITDA was $41 million for the quarter, with approximately 849,000 barrels per day of disposal volumes [26] - Adjusted EBITDA for the Liquid segment totaled $12 million, benefiting from recently acquired terminals, particularly the Chesapeake export facility [30] Market Data and Key Metrics Changes - The company expects significant growth in the water business for the remainder of the year, particularly with the addition of Mesquite [29] - Fresh water sales were slightly lower than expected, but the company anticipates catching up through the remainder of the year [27] - The company hedged approximately 3,500 barrels per day for the remainder of fiscal 2020 at a weighted average price of just over $60 per barrel [28] Company Strategy and Development Direction - The company signed an agreement to sell refined products, with proceeds expected to approximate $300 million, which will be used to reduce debt and increase availability on the bank line of credit [10] - The company is focused on long-term contracts across all three businesses to increase cash flow predictability [12] - The company aims to maintain a compliance leverage target of 3.25 times and all-in leverage under five times [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market's reaction to the sale of refined products, noting minimal stock price impact [9] - The company anticipates a significant ramp in water volumes in the second half of the year, driven by producer activity [41] - Management highlighted the importance of maintaining a healthy balance sheet while exploring acquisition opportunities in the water sector [58] Other Important Information - The company expects to close the sale of the TPSL division by the end of September, with an updated FY 2020 guidance range for the refined products segment of $15 million to $30 million [34] - The company has retained its rack marketing and gas blending businesses, which are expected to be profitable despite some inventory risk [50][51] Q&A Session Summary Question: Can you break out CapEx spend in the first quarter? - About $250 million was spent, with almost $200 million in water, including $82 million on acquisitions [37] Question: Any change to expectation for organic growth CapEx? - No changes to the growth CapEx guidance [38] Question: What are the expectations for water volumes going forward? - A significant increase in volumes is expected starting at the end of September [39] Question: Can you expand on the Intrepid joint marketing deal? - Intrepid has more water rights in New Mexico and will market both companies' water [44] Question: What businesses are left in refining? - The retained businesses include rack marketing, gas blending, and renewables, which are expected to be profitable [49] Question: Any updated thoughts on share repurchase? - The company is considering share repurchase due to attractive pricing [59]

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, 2019 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 Indicate by check mark whether the registrant (1) has filed ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 2019 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 6120 South Yale Avenue, Suite 805 Tulsa, Oklahoma 74136 (Address of Principal Executive Offices) (Zip Code) (918) 481-1119 (Registrant's Telephone Number, Including Area Code) For ...

NGL Energy Partners LP (NYSE:NGL) Q4 2019 Results Earnings Conference Call May 30, 2019 11:00 AM ET Company Participants Robert Karlovich - Chief Financial Officer Michael Krimbill - Chief Executive Officer Conference Call Participants TJ Schultz - RBC Capital Markets Spiro Dounis - Credit Suisse Dennis Coleman - Bank of America Merrill Lynch Operator Good day, ladies and gentlemen, and welcome to the NGL Energy Partners LP Fourth Quarter Fiscal Year 2019 Earnings Conference Call. At this time, all particip ...

Investor Presentation May 2019 Company Information NGL Energy Partners LP Forward Looking Statements | --- | --- | --- | --- | |--------------------------------|-------|---------------|---------| | NYSE Ticker \nUnit Price (1) | | NGL \n$ 13.82 | | | Market Capitalization (1)(2) | | $ 2.16 | Billion | | Enterprise Value (1)(2) | | $ 4.33 | Billion | | Yield (1) | | 11.29% | | Contact Information Corporate Headquarters NGL Energy Partners LP 6120 South Yale Avenue, Suite 805 Tulsa, Oklahoma 74136 Website www ...

NGL Energy Partners LP (NYSE:NGL) Q3 2019 Results Earnings Conference Call February 11, 2019 11:00 AM ET Company Participants Robert Karlovich - Chief Financial Officer Michael Krimbill - Chief Executive Officer Conference Call Participants Shneur Gershuni - UBS Justin Jenkins - Raymond James TJ Schultz - RBC Capital Markets Ujjwal Pradhan - Bank of America Michael Blum - Wells Fargo Sunil Sibal - Seaport Global Securities Lin Shen - HITE Operator Good day, ladies and gentlemen, and welcome to the Q3 2019 N ...

Investor Presentation January 2019 Company Information NGL Energy Partners LP Forward Looking Statements | --- | --- | --- | --- | |--------------------------------|-------|---------------|---------| | NYSE Ticker \nUnit Price (1) | | NGL \n$ 10.56 | | | Market Capitalization (1)(2) | | $ 1.74 | Billion | | Enterprise Value (1)(2) | | $ 4.16 | Billion | | Yield (1) | | 14.77% | | Contact Information Corporate Headquarters NGL Energy Partners LP 6120 South Yale Avenue, Suite 805 Tulsa, Oklahoma 74136 Website ...