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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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27-3427920
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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6120 South Yale Avenue, Suite 805
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Tulsa,
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Oklahoma
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74136
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(Address of Principal Executive Offices)
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(Zip Code)
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Large accelerated filer
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x
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Accelerated filer
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o
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Non-accelerated filer
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o
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Title of Each Class
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Trading Symbols
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Name of Each Exchange on Which Registered
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Common units representing Limited Partner Interests
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NGL
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New York Stock Exchange
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Fixed-to-floating rate cumulative redeemable perpetual preferred units
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NGL-PB
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New York Stock Exchange
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Fixed-to-floating rate cumulative redeemable perpetual preferred units
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NGL-PC
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New York Stock Exchange
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•
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changes in general economic conditions, including market and macroeconomic disruptions resulting from the novel strain of coronavirus (“COVID-19”) pandemic and related governmental responses;
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•
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the prices of crude oil, natural gas liquids, gasoline, diesel, and biodiesel;
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•
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energy prices generally;
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•
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the general level of crude oil, natural gas, and natural gas liquids production;
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•
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the general level of demand, and the availability of supply, for crude oil, natural gas liquids, gasoline, diesel, and biodiesel;
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•
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the level of crude oil and natural gas drilling and production in areas where we have water treatment and disposal facilities;
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•
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the ability to obtain adequate supplies of products if an interruption in supply or transportation occurs and the availability of capacity to transport products to market areas;
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•
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actions taken by foreign oil and gas producing nations;
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•
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the political and economic stability of foreign oil and gas producing nations;
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•
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the effect of weather conditions on supply and demand for crude oil, natural gas liquids, gasoline, diesel, and biodiesel;
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•
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the effect of natural disasters, lightning strikes, or other significant weather events;
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•
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the availability of local, intrastate, and interstate transportation infrastructure with respect to our truck, railcar, and barge transportation services;
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•
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the availability, price, and marketing of competing fuels;
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•
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the effect of energy conservation efforts on product demand;
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•
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energy efficiencies and technological trends;
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•
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changes in applicable laws and regulations, including tax, environmental, transportation, and employment regulations, or new interpretations by regulatory agencies concerning such laws and regulations and the effect of such laws and regulations (now existing or in the future) on our business operations;
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•
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the effect of legislative and regulatory actions on hydraulic fracturing, water disposal and transportation, and the treatment of flowback and produced water;
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•
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hazards or operating risks related to transporting and distributing petroleum products that may not be fully covered by insurance;
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•
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the maturity of the crude oil, natural gas liquids, and refined products industries and competition from other markets;
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•
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loss of key personnel;
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•
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the ability to renew contracts with key customers;
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•
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the ability to maintain or increase the margins we realize for our terminal, barging, trucking, water disposal, recycling, and discharge services;
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•
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the ability to renew leases for our leased equipment and storage facilities;
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•
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the nonpayment, nonperformance or bankruptcy by our counterparties;
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•
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the availability and cost of capital and our ability to access certain capital sources;
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•
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a deterioration of the credit and capital markets;
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•
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the ability to successfully identify and complete accretive acquisitions, and integrate acquired assets and businesses;
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•
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changes in the volume of crude oil recovered during the water treatment process;
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•
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changes in the financial condition and results of operations of entities in which we own noncontrolling equity interests;
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•
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the costs and effects of legal and administrative proceedings;
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•
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political pressure and influence of environmental groups upon policies and decisions related to the production, gathering, refining, processing, fractionation, transportation and marketing of crude oil, refined products, natural gas, natural gas liquids, gasoline, diesel or biodiesel; and
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•
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changes in the jurisdictional characteristics of, or the applicable regulatory policies with respect to, our pipeline assets.
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June 30, 2020
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March 31, 2020
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ASSETS
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CURRENT ASSETS:
|
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||||
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Cash and cash equivalents
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$
|
26,400
|
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|
$
|
22,704
|
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Accounts receivable-trade, net of allowance for expected credit losses of $3,674 and $4,540, respectively
|
424,814
|
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566,834
|
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Accounts receivable-affiliates
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14,814
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12,934
|
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Inventories
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135,918
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69,634
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Prepaid expenses and other current assets
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75,433
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101,981
|
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Total current assets
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677,379
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774,087
|
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PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $570,806 and $529,068, respectively
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2,833,002
|
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2,851,555
|
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GOODWILL
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993,114
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993,587
|
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INTANGIBLE ASSETS, net of accumulated amortization of $670,382 and $631,449, respectively
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1,574,216
|
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1,612,480
|
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INVESTMENTS IN UNCONSOLIDATED ENTITIES
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22,626
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23,182
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OPERATING LEASE RIGHT-OF-USE ASSETS
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177,010
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180,708
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OTHER NONCURRENT ASSETS
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48,739
|
|
|
63,137
|
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Total assets
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$
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6,326,086
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$
|
6,498,736
|
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LIABILITIES AND EQUITY
|
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||||
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CURRENT LIABILITIES:
|
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Accounts payable-trade
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$
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367,463
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$
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515,049
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Accounts payable-affiliates
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22,864
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17,717
|
|
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Accrued expenses and other payables
|
142,836
|
|
|
232,062
|
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Advance payments received from customers
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25,326
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19,536
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Current maturities of long-term debt
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4,521
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4,683
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Operating lease obligations
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53,720
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56,776
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Total current liabilities
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616,730
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845,823
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LONG-TERM DEBT, net of debt issuance costs of $24,022 and $19,795, respectively, and current maturities
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3,281,402
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3,144,848
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OPERATING LEASE OBLIGATIONS
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120,986
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121,013
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OTHER NONCURRENT LIABILITIES
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112,034
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114,079
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COMMITMENTS AND CONTINGENCIES (NOTE 9)
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CLASS D 9.00% PREFERRED UNITS, 600,000 and 600,000 preferred units issued and outstanding, respectively
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544,151
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537,283
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EQUITY:
|
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General partner, representing a 0.1% interest, 128,901 and 128,901 notional units, respectively
|
(51,474
|
)
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(51,390
|
)
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Limited partners, representing a 99.9% interest, 128,771,715 and 128,771,715 common units issued and outstanding, respectively
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1,283,491
|
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1,366,152
|
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Class B preferred limited partners, 12,585,642 and 12,585,642 preferred units issued and outstanding, respectively
|
305,468
|
|
|
305,468
|
|
||
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Class C preferred limited partners, 1,800,000 and 1,800,000 preferred units issued and outstanding, respectively
|
42,891
|
|
|
42,891
|
|
||
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Accumulated other comprehensive loss
|
(341
|
)
|
|
(385
|
)
|
||
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Noncontrolling interests
|
70,748
|
|
|
72,954
|
|
||
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Total equity
|
1,650,783
|
|
|
1,735,690
|
|
||
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Total liabilities and equity
|
$
|
6,326,086
|
|
|
$
|
6,498,736
|
|
|
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Three Months Ended June 30,
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||||||
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2020
|
|
2019
|
||||
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REVENUES:
|
|
|
|
|
||||
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Crude Oil Logistics
|
|
$
|
276,039
|
|
|
$
|
716,160
|
|
|
Water Solutions
|
|
88,065
|
|
|
71,783
|
|
||
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Liquids and Refined Products
|
|
479,998
|
|
|
1,083,693
|
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||
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Other
|
|
313
|
|
|
255
|
|
||
|
Total Revenues
|
|
844,415
|
|
|
1,871,891
|
|
||
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COST OF SALES:
|
|
|
|
|
||||
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Crude Oil Logistics
|
|
217,557
|
|
|
649,240
|
|
||
|
Water Solutions
|
|
4,700
|
|
|
(2,807
|
)
|
||
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Liquids and Refined Products
|
|
454,336
|
|
|
1,043,032
|
|
||
|
Other
|
|
454
|
|
|
465
|
|
||
|
Total Cost of Sales
|
|
677,047
|
|
|
1,689,930
|
|
||
|
OPERATING COSTS AND EXPENSES:
|
|
|
|
|
||||
|
Operating
|
|
64,987
|
|
|
61,312
|
|
||
|
General and administrative
|
|
17,158
|
|
|
20,342
|
|
||
|
Depreciation and amortization
|
|
83,986
|
|
|
53,754
|
|
||
|
Loss (gain) on disposal or impairment of assets, net
|
|
12,022
|
|
|
(967
|
)
|
||
|
Operating (Loss) Income
|
|
(10,785
|
)
|
|
47,520
|
|
||
|
OTHER INCOME (EXPENSE):
|
|
|
|
|
||||
|
Equity in earnings of unconsolidated entities
|
|
289
|
|
|
8
|
|
||
|
Interest expense
|
|
(43,961
|
)
|
|
(39,877
|
)
|
||
|
Gain on early extinguishment of liabilities, net
|
|
19,355
|
|
|
—
|
|
||
|
Other income, net
|
|
1,035
|
|
|
1,010
|
|
||
|
(Loss) Income From Continuing Operations Before Income Taxes
|
|
(34,067
|
)
|
|
8,661
|
|
||
|
INCOME TAX BENEFIT
|
|
301
|
|
|
321
|
|
||
|
(Loss) Income From Continuing Operations
|
|
(33,766
|
)
|
|
8,982
|
|
||
|
Loss From Discontinued Operations, net of Tax
|
|
(1,486
|
)
|
|
(943
|
)
|
||
|
Net (Loss) Income
|
|
(35,252
|
)
|
|
8,039
|
|
||
|
LESS: NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
|
(51
|
)
|
|
268
|
|
||
|
NET (LOSS) INCOME ATTRIBUTABLE TO NGL ENERGY PARTNERS LP
|
|
$
|
(35,303
|
)
|
|
$
|
8,307
|
|
|
NET LOSS FROM CONTINUING OPERATIONS ALLOCATED TO COMMON UNITHOLDERS (NOTE 3)
|
|
$
|
(55,815
|
)
|
|
$
|
(120,126
|
)
|
|
NET LOSS FROM DISCONTINUED OPERATIONS ALLOCATED TO COMMON UNITHOLDERS (NOTE 3)
|
|
$
|
(1,485
|
)
|
|
$
|
(942
|
)
|
|
NET LOSS ALLOCATED TO COMMON UNITHOLDERS
|
|
$
|
(57,300
|
)
|
|
$
|
(121,068
|
)
|
|
BASIC LOSS PER COMMON UNIT
|
|
|
|
|
||||
|
Loss From Continuing Operations
|
|
$
|
(0.43
|
)
|
|
$
|
(0.95
|
)
|
|
Loss From Discontinued Operations, net of Tax
|
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
|
Net Loss
|
|
$
|
(0.44
|
)
|
|
$
|
(0.96
|
)
|
|
DILUTED LOSS PER COMMON UNIT
|
|
|
|
|
||||
|
Loss From Continuing Operations
|
|
$
|
(0.43
|
)
|
|
$
|
(0.95
|
)
|
|
Loss From Discontinued Operations, net of Tax
|
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
|
Net Loss
|
|
$
|
(0.44
|
)
|
|
$
|
(0.96
|
)
|
|
BASIC WEIGHTED AVERAGE COMMON UNITS OUTSTANDING
|
|
128,771,715
|
|
|
125,886,738
|
|
||
|
DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING
|
|
128,771,715
|
|
|
125,886,738
|
|
||
|
|
|
Three Months Ended June 30,
|
||||||
|
|
|
2020
|
|
2019
|
||||
|
Net (loss) income
|
|
$
|
(35,252
|
)
|
|
$
|
8,039
|
|
|
Other comprehensive income
|
|
44
|
|
|
37
|
|
||
|
Comprehensive (loss) income
|
|
$
|
(35,208
|
)
|
|
$
|
8,076
|
|
|
|
|
|
|
Limited Partners
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
Preferred
|
|
Common
|
|
Accumulated
Other |
|
|
|
|
||||||||||||||||||
|
|
|
General
Partner |
|
Units
|
|
Amount
|
|
Units |
|
Amount
|
|
Comprehensive
Income (Loss) |
|
Noncontrolling
Interests |
|
Total
Equity |
||||||||||||||
|
BALANCES AT MARCH 31, 2020
|
|
$
|
(51,390
|
)
|
|
14,385,642
|
|
|
$
|
348,359
|
|
|
128,771,715
|
|
|
$
|
1,366,152
|
|
|
$
|
(385
|
)
|
|
$
|
72,954
|
|
|
$
|
1,735,690
|
|
|
Distributions to general and common unit partners and preferred unitholders (Note 10)
|
|
(26
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(47,652
|
)
|
|
—
|
|
|
—
|
|
|
(47,678
|
)
|
||||||
|
Distributions to noncontrolling interest owners
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,257
|
)
|
|
(2,257
|
)
|
||||||
|
Equity issued pursuant to incentive compensation plan (Note 10)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,349
|
|
|
—
|
|
|
—
|
|
|
1,349
|
|
||||||
|
Net (loss) income
|
|
(57
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(35,246
|
)
|
|
—
|
|
|
51
|
|
|
(35,252
|
)
|
||||||
|
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|
—
|
|
|
44
|
|
||||||
|
Cumulative effect adjustment for adoption of ASU 2016-13 (Note 16)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,112
|
)
|
|
—
|
|
|
—
|
|
|
(1,113
|
)
|
||||||
|
BALANCES AT JUNE 30, 2020
|
|
$
|
(51,474
|
)
|
|
14,385,642
|
|
|
$
|
348,359
|
|
|
128,771,715
|
|
|
$
|
1,283,491
|
|
|
$
|
(341
|
)
|
|
$
|
70,748
|
|
|
$
|
1,650,783
|
|
|
|
|
|
|
Limited Partners
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
Preferred
|
|
Common
|
|
Accumulated
Other |
|
|
|
|
||||||||||||||||||
|
|
|
General
Partner |
|
Units
|
|
Amount
|
|
Units |
|
Amount
|
|
Comprehensive
Income (Loss) |
|
Noncontrolling
Interests |
|
Total
Equity |
||||||||||||||
|
BALANCES AT MARCH 31, 2019
|
|
$
|
(50,603
|
)
|
|
8,400,000
|
|
|
$
|
202,731
|
|
|
124,508,497
|
|
|
$
|
2,067,197
|
|
|
$
|
(255
|
)
|
|
$
|
58,748
|
|
|
$
|
2,277,818
|
|
|
Distributions to general and common unit partners and preferred unitholders
|
|
(85
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(63,274
|
)
|
|
—
|
|
|
—
|
|
|
(63,359
|
)
|
||||||
|
Issuance of Class C preferred units, net of offering costs
|
|
—
|
|
|
1,800,000
|
|
|
42,638
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42,638
|
|
||||||
|
Equity issued pursuant to incentive compensation plan
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,752
|
|
|
—
|
|
|
—
|
|
|
2,752
|
|
||||||
|
Warrants exercised
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,458,371
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
||||||
|
Accretion of beneficial conversion feature of 10.75% Class A convertible preferred units
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(36,517
|
)
|
|
—
|
|
|
—
|
|
|
(36,517
|
)
|
||||||
|
10.75% Class A convertible preferred units redemption - amount paid in excess of carrying value
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(78,797
|
)
|
|
—
|
|
|
—
|
|
|
(78,797
|
)
|
||||||
|
Investment in NGL Energy Holdings LLC
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,361
|
)
|
|
—
|
|
|
—
|
|
|
(2,361
|
)
|
||||||
|
Net (loss) income
|
|
(85
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,392
|
|
|
—
|
|
|
(268
|
)
|
|
8,039
|
|
||||||
|
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|
—
|
|
|
37
|
|
||||||
|
BALANCES AT JUNE 30, 2019
|
|
$
|
(50,773
|
)
|
|
10,200,000
|
|
|
$
|
245,369
|
|
|
125,966,868
|
|
|
$
|
1,897,407
|
|
|
$
|
(218
|
)
|
|
$
|
58,480
|
|
|
$
|
2,150,265
|
|
|
|
|
Three Months Ended June 30,
|
||||||
|
|
|
2020
|
|
2019
|
||||
|
OPERATING ACTIVITIES:
|
|
|
|
|
||||
|
Net (loss) income
|
|
$
|
(35,252
|
)
|
|
$
|
8,039
|
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
|
||||
|
Loss from discontinued operations, net of tax
|
|
1,486
|
|
|
943
|
|
||
|
Depreciation and amortization, including amortization of debt issuance costs
|
|
87,680
|
|
|
56,117
|
|
||
|
Gain on early extinguishment of liabilities, net
|
|
(19,355
|
)
|
|
—
|
|
||
|
Non-cash equity-based compensation expense
|
|
2,302
|
|
|
3,701
|
|
||
|
Loss (gain) on disposal or impairment of assets, net
|
|
12,022
|
|
|
(967
|
)
|
||
|
Provision for expected credit losses
|
|
(27
|
)
|
|
280
|
|
||
|
Net adjustments to fair value of commodity derivatives
|
|
27,402
|
|
|
(5,559
|
)
|
||
|
Equity in earnings of unconsolidated entities
|
|
(289
|
)
|
|
(8
|
)
|
||
|
Distributions of earnings from unconsolidated entities
|
|
742
|
|
|
—
|
|
||
|
Lower of cost or net realizable value adjustments
|
|
1,950
|
|
|
155
|
|
||
|
Other
|
|
1,223
|
|
|
(1,061
|
)
|
||
|
Changes in operating assets and liabilities, exclusive of acquisitions:
|
|
|
|
|
||||
|
Accounts receivable-trade and affiliates
|
|
139,734
|
|
|
208,572
|
|
||
|
Inventories
|
|
(68,281
|
)
|
|
(26,954
|
)
|
||
|
Other current and noncurrent assets
|
|
30,606
|
|
|
(34,761
|
)
|
||
|
Accounts payable-trade and affiliates
|
|
(142,439
|
)
|
|
(148,413
|
)
|
||
|
Other current and noncurrent liabilities
|
|
42,348
|
|
|
32,554
|
|
||
|
Net cash provided by operating activities-continuing operations
|
|
81,852
|
|
|
92,638
|
|
||
|
Net cash used in operating activities-discontinued operations
|
|
(1,439
|
)
|
|
(22,744
|
)
|
||
|
Net cash provided by operating activities
|
|
80,413
|
|
|
69,894
|
|
||
|
INVESTING ACTIVITIES:
|
|
|
|
|
||||
|
Capital expenditures
|
|
(97,815
|
)
|
|
(155,391
|
)
|
||
|
Acquisitions, net of cash acquired
|
|
—
|
|
|
(54,548
|
)
|
||
|
Net settlements of commodity derivatives
|
|
(26,653
|
)
|
|
2,072
|
|
||
|
Proceeds from sales of assets
|
|
150
|
|
|
1,673
|
|
||
|
Investments in unconsolidated entities
|
|
—
|
|
|
(889
|
)
|
||
|
Distributions of capital from unconsolidated entities
|
|
103
|
|
|
439
|
|
||
|
Repayments on loan for natural gas liquids facility
|
|
—
|
|
|
3,022
|
|
||
|
Net cash used in investing activities-continuing operations
|
|
(124,215
|
)
|
|
(203,622
|
)
|
||
|
Net cash provided by investing activities-discontinued operations
|
|
—
|
|
|
4,375
|
|
||
|
Net cash used in investing activities
|
|
(124,215
|
)
|
|
(199,247
|
)
|
||
|
FINANCING ACTIVITIES:
|
|
|
|
|
||||
|
Proceeds from borrowings under Revolving Credit Facility
|
|
442,500
|
|
|
1,139,000
|
|
||
|
Payments on Revolving Credit Facility
|
|
(254,500
|
)
|
|
(1,155,000
|
)
|
||
|
Issuance of senior unsecured notes and term credit agreement
|
|
250,000
|
|
|
450,000
|
|
||
|
Repayment of bridge term credit agreement
|
|
(250,000
|
)
|
|
—
|
|
||
|
Repurchase of senior unsecured notes
|
|
(25,040
|
)
|
|
—
|
|
||
|
Payments on other long-term debt
|
|
(163
|
)
|
|
(163
|
)
|
||
|
Debt issuance costs
|
|
(9,479
|
)
|
|
(7,873
|
)
|
||
|
Distributions to general and common unit partners and preferred unitholders
|
|
(40,810
|
)
|
|
(62,288
|
)
|
||
|
Distributions to noncontrolling interest owners
|
|
(2,257
|
)
|
|
—
|
|
||
|
Proceeds from sale of preferred units, net of offering costs
|
|
—
|
|
|
42,638
|
|
||
|
Payments for redemption of preferred units
|
|
—
|
|
|
(265,128
|
)
|
||
|
Payments for settlement and early extinguishment of liabilities
|
|
(62,753
|
)
|
|
(543
|
)
|
||
|
Investment in NGL Energy Holdings LLC
|
|
—
|
|
|
(2,361
|
)
|
||
|
Net cash provided by financing activities
|
|
47,498
|
|
|
138,282
|
|
||
|
Net increase in cash and cash equivalents
|
|
3,696
|
|
|
8,929
|
|
||
|
Cash and cash equivalents, beginning of period
|
|
22,704
|
|
|
18,572
|
|
||
|
Cash and cash equivalents, end of period
|
|
$
|
26,400
|
|
|
$
|
27,501
|
|
|
Supplemental cash flow information:
|
|
|
|
|
||||
|
Cash interest paid
|
|
$
|
56,096
|
|
|
$
|
36,538
|
|
|
Income taxes paid (net of income tax refunds)
|
|
$
|
590
|
|
|
$
|
2,537
|
|
|
Supplemental non-cash investing and financing activities:
|
|
|
|
|
||||
|
Distributions declared but not paid to Class B, Class C and Class D preferred unitholders
|
|
$
|
15,030
|
|
|
$
|
5,796
|
|
|
Accrued capital expenditures
|
|
$
|
21,042
|
|
|
$
|
32,926
|
|
|
•
|
Our Crude Oil Logistics segment purchases crude oil from producers and marketers and transports it to refineries or for resale at pipeline injection stations, storage terminals, barge loading facilities, rail facilities, refineries, and other trade hubs, and provides storage, terminaling, and transportation services through its owned assets. Our activities in this segment are supported by certain long-term, fixed rate contracts which include minimum volume commitments on our pipelines.
|
|
•
|
Our Water Solutions segment transports, treats, recycles and disposes of produced and flowback water generated from crude oil and natural gas production. We also dispose of solids such as tank bottoms, drilling fluids and drilling muds and perform other ancillary services such as truck and frac tank washouts. As part of processing water, we are able to aggregate recovered crude oil, also known as skim oil, that was contained in the water and sell the crude oil. We also sell brackish non-potable water to our producer customers to be used in their crude oil exploration and production activities. Our activities in this segment are underpinned by long-term, fixed fee contracts and acreage dedications, some of which contain minimum volume commitments, with leading oil and gas companies including large, investment grade producer customers.
|
|
•
|
Our Liquids and Refined Products segment conducts marketing operations for natural gas liquids, refined petroleum products and biodiesel to a broad range of commercial, retail and industrial customers across the United States and Canada. These operations are conducted through our company-owned terminals, other third party storage and terminal facilities, common carrier pipelines and our extensive fleet of leased railcars. We also provide natural gas liquids and refined product terminaling and storage services at our salt dome storage facility joint venture in Utah and marine exports through our facility located in Chesapeake, Virginia. We employ a number of contractual and hedging strategies to minimize commodity exposure and maximize earnings stability of this segment.
|
|
|
|
June 30, 2020
|
|
March 31, 2020
|
||||
|
|
|
(in thousands)
|
||||||
|
Crude oil
|
|
$
|
44,246
|
|
|
$
|
18,201
|
|
|
Propane
|
|
39,329
|
|
|
25,163
|
|
||
|
Butane
|
|
32,714
|
|
|
9,619
|
|
||
|
Biodiesel
|
|
8,247
|
|
|
8,195
|
|
||
|
Ethanol
|
|
5,525
|
|
|
1,834
|
|
||
|
Diesel
|
|
2,239
|
|
|
2,414
|
|
||
|
Other
|
|
3,618
|
|
|
4,208
|
|
||
|
Total
|
|
$
|
135,918
|
|
|
$
|
69,634
|
|
|
Entity
|
|
Segment
|
|
Ownership
Interest (1) |
|
Date Acquired
|
|
June 30, 2020
|
|
March 31, 2020
|
||||
|
|
|
|
|
|
|
|
|
(in thousands)
|
||||||
|
Water services and land company (2)
|
|
Water Solutions
|
|
50%
|
|
November 2019
|
|
$
|
16,623
|
|
|
$
|
16,607
|
|
|
Water services and land company (3)
|
|
Water Solutions
|
|
50%
|
|
November 2019
|
|
1,976
|
|
|
2,092
|
|
||
|
Water services and land company (4)
|
|
Water Solutions
|
|
10%
|
|
November 2019
|
|
3,103
|
|
|
3,384
|
|
||
|
Aircraft company (5)
|
|
Corporate and Other
|
|
50%
|
|
June 2019
|
|
286
|
|
|
447
|
|
||
|
Water services company (6)
|
|
Water Solutions
|
|
50%
|
|
August 2018
|
|
443
|
|
|
449
|
|
||
|
Natural gas liquids terminal company (7)
|
|
Liquids and Refined Products
|
|
50%
|
|
March 2019
|
|
195
|
|
|
203
|
|
||
|
Total
|
|
|
|
|
|
|
|
$
|
22,626
|
|
|
$
|
23,182
|
|
|
|
|
(1)
|
Ownership interest percentages are at June 30, 2020.
|
|
(2)
|
This is an investment that we acquired as part of an acquisition in November 2019, and represents certain membership interests in a limited liability company and are related to specific land operations.
|
|
(3)
|
This is an investment that we acquired as part of an acquisition in November 2019, and represents certain membership interests in a limited liability company and are related to specific land operations.
|
|
(4)
|
This is an investment that we acquired as part of an acquisition in November 2019, and represents certain membership interests in a limited liability company and are related to specific water services operations.
|
|
(5)
|
This is an investment with a related party.
|
|
(6)
|
This is an investment that we acquired as part of an acquisition in August 2018.
|
|
(7)
|
This is an investment that we acquired as part of an acquisition in March 2019.
|
|
|
|
June 30, 2020
|
|
March 31, 2020
|
||||
|
|
|
(in thousands)
|
||||||
|
Loan receivable (1)
|
|
$
|
2,830
|
|
|
$
|
5,374
|
|
|
Line fill (2)
|
|
23,039
|
|
|
25,763
|
|
||
|
Minimum shipping fees - pipeline commitments (3)
|
|
16,374
|
|
|
17,443
|
|
||
|
Other
|
|
6,496
|
|
|
14,557
|
|
||
|
Total
|
|
$
|
48,739
|
|
|
$
|
63,137
|
|
|
|
|
(1)
|
Amounts at June 30, 2020 and March 31, 2020 represent the noncurrent portion of a loan receivable, net of an allowance for an expected credit loss, with Victory Propane, LLC. In addition, the amount at March 31, 2020 represents the noncurrent portion of a loan receivable associated with our interest in the construction of a natural gas liquids loading/unloading facility (the “Facility”) that is utilized by a third party. The third party filed for Chapter 11 bankruptcy in July 2019. For a further discussion, see Note 17.
|
|
(2)
|
Represents minimum volumes of product we are required to leave on certain third-party owned pipelines under long-term shipment commitments. At June 30, 2020, line fill consisted of 335,069 barrels of crude oil. At March 31, 2020, line fill consisted of 335,069 barrels of crude oil and 262,000 barrels of propane. Line fill held in pipelines we own is included within property, plant and equipment (see Note 5).
|
|
(3)
|
Represents the noncurrent portion of minimum shipping fees paid in excess of volumes shipped, or deficiency credits, for one contract with a crude oil pipeline operator. This amount can be recovered when volumes shipped exceed the minimum monthly volume commitment (see Note 9). As of June 30, 2020, the deficiency credit was $21.1 million, of which $4.7 million is recorded within prepaid expenses and other current assets in our unaudited condensed consolidated balance sheet.
|
|
|
|
June 30, 2020
|
|
March 31, 2020
|
||||
|
|
|
(in thousands)
|
||||||
|
Accrued compensation and benefits
|
|
$
|
26,646
|
|
|
$
|
29,990
|
|
|
Excise and other tax liabilities
|
|
9,549
|
|
|
9,941
|
|
||
|
Derivative liabilities
|
|
3,469
|
|
|
17,777
|
|
||
|
Accrued interest
|
|
24,106
|
|
|
39,803
|
|
||
|
Product exchange liabilities
|
|
2,749
|
|
|
1,687
|
|
||
|
Contingent consideration liability (1)
|
|
36,169
|
|
|
102,419
|
|
||
|
Other
|
|
40,148
|
|
|
30,445
|
|
||
|
Total
|
|
$
|
142,836
|
|
|
$
|
232,062
|
|
|
|
|
(1)
|
Decrease is due to the monthly installment payments made during the three months ended June 30, 2020 related to our acquisition of certain assets of Mesquite Disposals Unlimited, LLC (“Mesquite”). We have made two monthly payments subsequent to June 30, 2020, and per the agreement, we currently have four remaining monthly payments.
|
|
|
|
Three Months Ended June 30,
|
||||
|
|
|
2020
|
|
2019
|
||
|
Weighted average common units outstanding during the period:
|
|
|
|
|
||
|
Common units - Basic
|
|
128,771,715
|
|
|
125,886,738
|
|
|
Common units - Diluted
|
|
128,771,715
|
|
|
125,886,738
|
|
|
|
|
Three Months Ended June 30,
|
||||||
|
|
|
2020
|
|
2019
|
||||
|
|
|
(in thousands, except unit and per unit amounts)
|
||||||
|
(Loss) income from continuing operations
|
|
$
|
(33,766
|
)
|
|
$
|
8,982
|
|
|
Less: Continuing operations (income) loss attributable to noncontrolling interests
|
|
(51
|
)
|
|
268
|
|
||
|
Net (loss) income from continuing operations attributable to NGL Energy Partners LP
|
|
(33,817
|
)
|
|
9,250
|
|
||
|
Less: Distributions to preferred unitholders (1)
|
|
(22,054
|
)
|
|
(129,460
|
)
|
||
|
Less: Continuing operations net loss allocated to general partner (2)
|
|
56
|
|
|
84
|
|
||
|
Net loss from continuing operations allocated to common unitholders
|
|
$
|
(55,815
|
)
|
|
$
|
(120,126
|
)
|
|
|
|
|
|
|
||||
|
Loss from discontinued operations, net of tax
|
|
$
|
(1,486
|
)
|
|
$
|
(943
|
)
|
|
Less: Discontinued operations loss allocated to general partner (2)
|
|
1
|
|
|
1
|
|
||
|
Net loss from discontinued operations allocated to common unitholders
|
|
$
|
(1,485
|
)
|
|
$
|
(942
|
)
|
|
|
|
|
|
|
||||
|
Net loss allocated to common unitholders
|
|
$
|
(57,300
|
)
|
|
$
|
(121,068
|
)
|
|
|
|
|
|
|
||||
|
Basic loss per common unit
|
|
|
|
|
||||
|
Loss from continuing operations
|
|
$
|
(0.43
|
)
|
|
$
|
(0.95
|
)
|
|
Loss from discontinued operations, net of tax
|
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
|
Net loss
|
|
$
|
(0.44
|
)
|
|
$
|
(0.96
|
)
|
|
Diluted loss per common unit
|
|
|
|
|
||||
|
Loss from continuing operations
|
|
$
|
(0.43
|
)
|
|
$
|
(0.95
|
)
|
|
Loss from discontinued operations, net of tax
|
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
|
Net loss
|
|
$
|
(0.44
|
)
|
|
$
|
(0.96
|
)
|
|
Basic weighted average common units outstanding
|
|
128,771,715
|
|
|
125,886,738
|
|
||
|
Diluted weighted average common units outstanding
|
|
128,771,715
|
|
|
125,886,738
|
|
||
|
|
|
(1)
|
This amount includes distributions to preferred unitholders. The final accretion for the beneficial conversion of the 10.75% Class A Convertible Preferred Units and the excess of the 10.75% Class A Convertible Preferred Units repurchase price over the carrying value of the units are included in the three months ended June 30, 2019.
|
|
(2)
|
Net loss allocated to the general partner includes distributions to which it is entitled as the holder of incentive distribution rights.
|
|
Description
|
|
Estimated
Useful Lives |
|
June 30, 2020
|
|
March 31, 2020
|
||||||
|
|
|
(in years)
|
|
(in thousands)
|
||||||||
|
Natural gas liquids terminal and storage assets
|
|
2
|
-
|
30
|
|
$
|
316,327
|
|
|
$
|
314,694
|
|
|
Pipeline and related facilities
|
|
30
|
-
|
40
|
|
244,937
|
|
|
244,751
|
|
||
|
Vehicles and railcars
|
|
3
|
-
|
25
|
|
126,199
|
|
|
123,937
|
|
||
|
Water treatment facilities and equipment
|
|
3
|
-
|
30
|
|
1,743,555
|
|
|
1,525,859
|
|
||
|
Crude oil tanks and related equipment
|
|
2
|
-
|
30
|
|
233,402
|
|
|
234,143
|
|
||
|
Barges and towboats
|
|
5
|
-
|
30
|
|
125,169
|
|
|
125,162
|
|
||
|
Information technology equipment
|
|
3
|
-
|
7
|
|
37,686
|
|
|
34,261
|
|
||
|
Buildings and leasehold improvements
|
|
3
|
-
|
40
|
|
154,054
|
|
|
151,690
|
|
||
|
Land
|
|
|
|
|
|
96,645
|
|
|
91,446
|
|
||
|
Tank bottoms and line fill (1)
|
|
|
|
|
|
20,346
|
|
|
20,346
|
|
||
|
Other
|
|
3
|
-
|
20
|
|
14,996
|
|
|
14,627
|
|
||
|
Construction in progress
|
|
|
|
|
|
290,492
|
|
|
499,707
|
|
||
|
|
|
|
|
|
|
3,403,808
|
|
|
3,380,623
|
|
||
|
Accumulated depreciation
|
|
|
|
|
|
(570,806
|
)
|
|
(529,068
|
)
|
||
|
Net property, plant and equipment
|
|
|
|
|
|
$
|
2,833,002
|
|
|
$
|
2,851,555
|
|
|
|
|
(1)
|
Tank bottoms, which are product volumes required for the operation of storage tanks, are recorded at historical cost. We recover tank bottoms when the storage tanks are removed from service. Line fill, which represents our portion of the product volume required for the operation of the proportionate share of a pipeline we own, is recorded at historical cost.
|
|
|
|
Three Months Ended June 30,
|
||||||
|
|
|
2020
|
|
2019
|
||||
|
|
|
(in thousands)
|
||||||
|
Depreciation expense
|
|
$
|
46,723
|
|
|
$
|
25,456
|
|
|
Capitalized interest expense
|
|
$
|
1,668
|
|
|
$
|
—
|
|
|
|
|
Three Months Ended June 30,
|
||||||
|
|
|
2020
|
|
2019
|
||||
|
|
|
(in thousands)
|
||||||
|
Crude Oil Logistics
|
|
$
|
1,844
|
|
|
$
|
(533
|
)
|
|
Water Solutions
|
|
326
|
|
|
48
|
|
||
|
Liquids and Refined Products
|
|
4
|
|
|
(3
|
)
|
||
|
Total
|
|
$
|
2,174
|
|
|
$
|
(488
|
)
|
|
|
|
Crude Oil
Logistics |
|
Water
Solutions |
|
Liquids and
Refined Products |
|
Total
|
||||||||
|
|
|
(in thousands)
|
||||||||||||||
|
Balances at March 31, 2020
|
|
$
|
579,846
|
|
|
$
|
294,658
|
|
|
$
|
119,083
|
|
|
$
|
993,587
|
|
|
Revisions to acquisition accounting (Note 4)
|
|
—
|
|
|
(473
|
)
|
|
—
|
|
|
(473
|
)
|
||||
|
Balances at June 30, 2020
|
|
$
|
579,846
|
|
|
$
|
294,185
|
|
|
$
|
119,083
|
|
|
$
|
993,114
|
|
|
|
|
|
|
|
|
June 30, 2020
|
|
March 31, 2020
|
||||||||||||||||||||
|
Description
|
|
Amortizable Lives
|
|
Gross Carrying
Amount |
|
Accumulated
Amortization |
|
Net
|
|
Gross Carrying
Amount |
|
Accumulated
Amortization |
|
Net
|
||||||||||||||
|
|
|
(in years)
|
|
(in thousands)
|
||||||||||||||||||||||||
|
Amortizable:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Customer relationships
|
|
3
|
-
|
30
|
|
$
|
1,435,573
|
|
|
$
|
(469,398
|
)
|
|
$
|
966,175
|
|
|
$
|
1,435,573
|
|
|
$
|
(445,250
|
)
|
|
$
|
990,323
|
|
|
Customer commitments
|
|
10
|
-
|
25
|
|
502,000
|
|
|
(121,347
|
)
|
|
380,653
|
|
|
502,000
|
|
|
(111,677
|
)
|
|
390,323
|
|
||||||
|
Pipeline capacity rights
|
|
30
|
|
|
|
7,799
|
|
|
(1,712
|
)
|
|
6,087
|
|
|
7,799
|
|
|
(1,647
|
)
|
|
6,152
|
|
||||||
|
Rights-of-way and easements
|
|
1
|
-
|
45
|
|
89,709
|
|
|
(7,194
|
)
|
|
82,515
|
|
|
89,476
|
|
|
(6,506
|
)
|
|
82,970
|
|
||||||
|
Water rights
|
|
13
|
-
|
30
|
|
100,937
|
|
|
(9,972
|
)
|
|
90,965
|
|
|
100,937
|
|
|
(8,441
|
)
|
|
92,496
|
|
||||||
|
Executory contracts and other agreements
|
|
5
|
-
|
30
|
|
48,601
|
|
|
(18,990
|
)
|
|
29,611
|
|
|
48,570
|
|
|
(18,210
|
)
|
|
30,360
|
|
||||||
|
Non-compete agreements
|
|
2
|
-
|
24
|
|
12,723
|
|
|
(5,255
|
)
|
|
7,468
|
|
|
12,723
|
|
|
(4,735
|
)
|
|
7,988
|
|
||||||
|
Debt issuance costs (1)
|
|
3
|
-
|
5
|
|
44,457
|
|
|
(36,515
|
)
|
|
7,942
|
|
|
44,051
|
|
|
(34,983
|
)
|
|
9,068
|
|
||||||
|
Total amortizable
|
|
|
|
|
|
2,241,799
|
|
|
(670,383
|
)
|
|
1,571,416
|
|
|
2,241,129
|
|
|
(631,449
|
)
|
|
1,609,680
|
|
||||||
|
Non-amortizable:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Trade names
|
|
|
|
|
|
2,800
|
|
|
—
|
|
|
2,800
|
|
|
2,800
|
|
|
—
|
|
|
2,800
|
|
||||||
|
Total
|
|
|
|
|
|
$
|
2,244,599
|
|
|
$
|
(670,383
|
)
|
|
$
|
1,574,216
|
|
|
$
|
2,243,929
|
|
|
$
|
(631,449
|
)
|
|
$
|
1,612,480
|
|
|
|
|
(1)
|
Includes debt issuance costs related to the Revolving Credit Facility (as defined herein) and the Sawtooth credit agreement. Debt issuance costs related to the fixed-rate notes, Bridge Term Credit Agreement (as defined herein) and Term Credit Agreement (as defined herein) are reported as a reduction of the carrying amount of long-term debt.
|
|
|
|
Three Months Ended June 30,
|
||||||
|
Recorded In
|
|
2020
|
|
2019
|
||||
|
|
|
(in thousands)
|
||||||
|
Depreciation and amortization
|
|
$
|
37,263
|
|
|
$
|
28,298
|
|
|
Cost of sales
|
|
77
|
|
|
87
|
|
||
|
Interest expense
|
|
1,532
|
|
|
1,276
|
|
||
|
Operating expenses
|
|
62
|
|
|
151
|
|
||
|
Total
|
|
$
|
38,934
|
|
|
$
|
29,812
|
|
|
Fiscal Year Ending March 31,
|
|
||
|
2021 (nine months)
|
$
|
105,660
|
|
|
2022
|
131,329
|
|
|
|
2023
|
122,766
|
|
|
|
2024
|
116,563
|
|
|
|
2025
|
100,334
|
|
|
|
Thereafter
|
994,764
|
|
|
|
Total
|
$
|
1,571,416
|
|
|
|
|
June 30, 2020
|
|
March 31, 2020
|
||||||||||||||||||||
|
|
|
Face
Amount |
|
Unamortized
Debt Issuance Costs (1) |
|
Book
Value |
|
Face
Amount |
|
Unamortized
Debt Issuance Costs (1) |
|
Book
Value |
||||||||||||
|
|
|
(in thousands)
|
||||||||||||||||||||||
|
Revolving credit facility:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Expansion capital borrowings
|
|
$
|
1,400,000
|
|
|
$
|
—
|
|
|
$
|
1,400,000
|
|
|
$
|
1,120,000
|
|
|
$
|
—
|
|
|
$
|
1,120,000
|
|
|
Working capital borrowings
|
|
258,000
|
|
|
—
|
|
|
258,000
|
|
|
350,000
|
|
|
—
|
|
|
350,000
|
|
||||||
|
Senior unsecured notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
7.500% Notes due 2023 ("2023 Notes")
|
|
592,323
|
|
|
(4,904
|
)
|
|
587,419
|
|
|
607,323
|
|
|
(5,405
|
)
|
|
601,918
|
|
||||||
|
6.125% Notes due 2025 ("2025 Notes")
|
|
380,020
|
|
|
(3,927
|
)
|
|
376,093
|
|
|
387,320
|
|
|
(4,217
|
)
|
|
383,103
|
|
||||||
|
7.500% Notes due 2026 ("2026 Notes")
|
|
425,081
|
|
|
(6,316
|
)
|
|
418,765
|
|
|
450,000
|
|
|
(6,975
|
)
|
|
443,025
|
|
||||||
|
Bridge term credit agreement
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250,000
|
|
|
(3,198
|
)
|
|
246,802
|
|
||||||
|
Term credit agreement
|
|
250,000
|
|
|
(8,875
|
)
|
|
241,125
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
Other long-term debt
|
|
4,521
|
|
|
—
|
|
|
4,521
|
|
|
4,683
|
|
|
—
|
|
|
4,683
|
|
||||||
|
|
|
3,309,945
|
|
|
(24,022
|
)
|
|
3,285,923
|
|
|
3,169,326
|
|
|
(19,795
|
)
|
|
3,149,531
|
|
||||||
|
Less: Current maturities
|
|
4,521
|
|
|
—
|
|
|
4,521
|
|
|
4,683
|
|
|
—
|
|
|
4,683
|
|
||||||
|
Long-term debt
|
|
$
|
3,305,424
|
|
|
$
|
(24,022
|
)
|
|
$
|
3,281,402
|
|
|
$
|
3,164,643
|
|
|
$
|
(19,795
|
)
|
|
$
|
3,144,848
|
|
|
|
|
(1)
|
Debt issuance costs related to the Revolving Credit Facility and the Sawtooth credit agreement are reported within intangible assets, rather than as a reduction of the carrying amount of long-term debt.
|
|
Fiscal Year Ending March 31,
|
|
|
||
|
2021 (nine months)
|
|
$
|
4,852
|
|
|
2022
|
|
6,429
|
|
|
|
2023
|
|
6,421
|
|
|
|
2024
|
|
3,322
|
|
|
|
2025
|
|
1,864
|
|
|
|
Thereafter
|
|
1,134
|
|
|
|
Total
|
|
$
|
24,022
|
|
|
|
|
Three Months Ended
|
||
|
|
|
June 30,
|
||
|
|
|
2020
|
||
|
|
|
(in thousands)
|
||
|
2023 Notes
|
|
|
||
|
Notes repurchased
|
|
$
|
15,000
|
|
|
Cash paid (excluding payments of accrued interest)
|
|
$
|
8,421
|
|
|
Gain on early extinguishment of debt (1)
|
|
$
|
6,449
|
|
|
|
|
|
||
|
2025 Notes
|
|
|
||
|
Notes repurchased
|
|
$
|
7,300
|
|
|
Cash paid (excluding payments of accrued interest)
|
|
$
|
3,647
|
|
|
Gain on early extinguishment of debt (2)
|
|
$
|
3,575
|
|
|
|
|
|
||
|
2026 Notes
|
|
|
||
|
Notes repurchased
|
|
$
|
24,919
|
|
|
Cash paid (excluding payments of accrued interest)
|
|
$
|
12,972
|
|
|
Gain on early extinguishment of debt (3)
|
|
$
|
11,567
|
|
|
|
|
(1)
|
Gain on early extinguishment of debt for the 2023 Notes is inclusive of the write-off of debt issuance costs of $0.1 million. The gain is reported within gain on early extinguishment of liabilities, net within our unaudited condensed consolidated statement of operations.
|
|
(2)
|
Gain on early extinguishment of debt for the 2025 Notes is inclusive of the write-off of debt issuance costs of $0.1 million. The gain is reported within gain on early extinguishment of liabilities, net within our unaudited condensed consolidated statement of operations.
|
|
(3)
|
Gain on early extinguishment of debt for the 2026 Notes is inclusive of the write-off of debt issuance costs of $0.4 million. The gain is reported within gain on early extinguishment of liabilities, net within our unaudited condensed consolidated statement of operations.
|
|
Fiscal Year Ending March 31,
|
|
Revolving
Credit Facility |
|
Senior
Unsecured Notes |
|
Term Credit
Agreement |
|
Other
Long-Term Debt |
|
Total
|
||||||||||
|
|
|
(in thousands)
|
||||||||||||||||||
|
2021 (nine months)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,521
|
|
|
$
|
4,521
|
|
|
2022
|
|
1,658,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,658,000
|
|
|||||
|
2023
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
2024
|
|
—
|
|
|
592,323
|
|
|
250,000
|
|
|
—
|
|
|
842,323
|
|
|||||
|
2025
|
|
—
|
|
|
380,020
|
|
|
—
|
|
|
—
|
|
|
380,020
|
|
|||||
|
Thereafter
|
|
—
|
|
|
425,081
|
|
|
—
|
|
|
—
|
|
|
425,081
|
|
|||||
|
Total
|
|
$
|
1,658,000
|
|
|
$
|
1,397,424
|
|
|
$
|
250,000
|
|
|
$
|
4,521
|
|
|
$
|
3,309,945
|
|
|
Balance at March 31, 2020
|
$
|
18,416
|
|
|
Liabilities incurred
|
830
|
|
|
|
Accretion expense
|
354
|
|
|
|
Balance at June 30, 2020
|
$
|
19,600
|
|
|
Fiscal Year Ending March 31,
|
|
||
|
2021 (nine months)
|
$
|
12,455
|
|
|
2022
|
11,838
|
|
|
|
2023
|
4,497
|
|
|
|
2024
|
197
|
|
|
|
2025
|
172
|
|
|
|
Thereafter
|
526
|
|
|
|
Total
|
$
|
29,685
|
|
|
Fiscal Year Ending March 31,
|
|
||
|
2021 (nine months)
|
$
|
26,509
|
|
|
2022
|
35,314
|
|
|
|
2023
|
35,314
|
|
|
|
2024
|
35,410
|
|
|
|
2025
|
30,897
|
|
|
|
Total
|
$
|
163,444
|
|
|
|
|
Crude Oil (1)
|
|
Natural Gas Liquids
|
||||||||||
|
|
|
Value
|
|
Volume
(in barrels) |
|
Value
|
|
Volume
(in gallons) |
||||||
|
Fixed-Price Commodity Purchase Commitments:
|
|
|
|
|
|
|
|
|
||||||
|
2021 (nine months)
|
|
$
|
48,972
|
|
|
1,347
|
|
|
$
|
11,545
|
|
|
25,416
|
|
|
2022
|
|
—
|
|
|
—
|
|
|
2,495
|
|
|
5,766
|
|
||
|
Total
|
|
$
|
48,972
|
|
|
1,347
|
|
|
$
|
14,040
|
|
|
31,182
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Index-Price Commodity Purchase Commitments:
|
|
|
|
|
|
|
|
|
||||||
|
2021 (nine months)
|
|
$
|
787,180
|
|
|
22,005
|
|
|
$
|
456,844
|
|
|
937,433
|
|
|
2022
|
|
707,480
|
|
|
18,484
|
|
|
17,601
|
|
|
37,069
|
|
||
|
2023
|
|
643,062
|
|
|
15,702
|
|
|
—
|
|
|
—
|
|
||
|
2024
|
|
602,350
|
|
|
14,359
|
|
|
—
|
|
|
—
|
|
||
|
2025
|
|
436,785
|
|
|
10,220
|
|
|
—
|
|
|
—
|
|
||
|
Thereafter
|
|
17,426
|
|
|
390
|
|
|
—
|
|
|
—
|
|
||
|
Total
|
|
$
|
3,194,283
|
|
|
81,160
|
|
|
$
|
474,445
|
|
|
974,502
|
|
|
|
|
(1)
|
Our crude oil index-price purchase commitments exceed our crude oil index-price sales commitments (presented below) due primarily to our long-term purchase commitments for crude oil that we purchase and ship on the Grand Mesa Pipeline. As these purchase commitments are deliver-or-pay contracts, whereby our counterparty is required to pay us for any volumes not delivered, we have not entered into corresponding long-term sales contracts for volumes we may not receive.
|
|
|
|
Crude Oil
|
|
Natural Gas Liquids
|
||||||||||
|
|
|
Value
|
|
Volume
(in barrels) |
|
Value
|
|
Volume
(in gallons) |
||||||
|
Fixed-Price Commodity Sale Commitments:
|
|
|
|
|
|
|
|
|
||||||
|
2021 (nine months)
|
|
$
|
49,667
|
|
|
1,347
|
|
|
$
|
89,105
|
|
|
142,845
|
|
|
2022
|
|
—
|
|
|
—
|
|
|
5,522
|
|
|
10,010
|
|
||
|
2023
|
|
—
|
|
|
—
|
|
|
28
|
|
|
35
|
|
||
|
Total
|
|
$
|
49,667
|
|
|
1,347
|
|
|
$
|
94,655
|
|
|
152,890
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Index-Price Commodity Sale Commitments:
|
|
|
|
|
|
|
|
|
||||||
|
2021 (nine months)
|
|
$
|
545,789
|
|
|
13,865
|
|
|
$
|
582,198
|
|
|
871,580
|
|
|
2022
|
|
193,108
|
|
|
4,745
|
|
|
11,309
|
|
|
18,682
|
|
||
|
2023
|
|
198,301
|
|
|
4,745
|
|
|
—
|
|
|
—
|
|
||
|
2024
|
|
204,146
|
|
|
4,758
|
|
|
—
|
|
|
—
|
|
||
|
2025
|
|
208,894
|
|
|
4,745
|
|
|
—
|
|
|
—
|
|
||
|
Thereafter
|
|
17,426
|
|
|
390
|
|
|
—
|
|
|
—
|
|
||
|
Total
|
|
$
|
1,367,664
|
|
|
33,248
|
|
|
$
|
593,507
|
|
|
890,262
|
|
|
Date Declared
|
|
Record Date
|
|
Payment Date
|
|
Amount Per Unit
|
|
Amount Paid/Payable
to Limited Partners |
|
Amount Paid/Payable
to General Partner |
||||||
|
|
|
|
|
|
|
|
|
(in thousands)
|
|
(in thousands)
|
||||||
|
April 27, 2020
|
|
May 7, 2020
|
|
May 15, 2020
|
|
$
|
0.2000
|
|
|
$
|
25,754
|
|
|
$
|
26
|
|
|
July 23, 2020
|
|
August 6, 2020
|
|
August 14, 2020
|
|
$
|
0.2000
|
|
|
$
|
25,754
|
|
|
$
|
26
|
|
|
|
|
|
|
|
|
|
|
Amount Paid to Class B
|
||||
|
Date Declared
|
|
Record Date
|
|
Payment Date
|
|
Amount Per Unit
|
|
Preferred Unitholders
|
||||
|
|
|
|
|
|
|
|
|
(in thousands)
|
||||
|
March 16, 2020
|
|
March 31, 2020
|
|
April 15, 2020
|
|
$
|
0.5625
|
|
|
$
|
7,079
|
|
|
June 15, 2020
|
|
June 30, 2020
|
|
July 15, 2020
|
|
$
|
0.5625
|
|
|
$
|
7,079
|
|
|
|
|
|
|
|
|
|
|
Amount Paid to Class C
|
||||
|
Date Declared
|
|
Record Date
|
|
Payment Date
|
|
Amount Per Unit
|
|
Preferred Unitholders
|
||||
|
|
|
|
|
|
|
|
|
(in thousands)
|
||||
|
March 16, 2020
|
|
March 31, 2020
|
|
April 15, 2020
|
|
$
|
0.6016
|
|
|
$
|
1,083
|
|
|
June 15, 2020
|
|
June 30, 2020
|
|
July 15, 2020
|
|
$
|
0.6016
|
|
|
$
|
1,083
|
|
|
|
|
|
|
|
|
|
|
Amount Paid to Class D
|
||||
|
Date Declared
|
|
Record Date
|
|
Payment Date
|
|
Amount Per Unit
|
|
Preferred Unitholders
|
||||
|
|
|
|
|
|
|
|
|
(in thousands)
|
||||
|
April 27, 2020
|
|
May 7, 2020
|
|
May 15, 2020
|
|
$
|
11.25
|
|
|
$
|
6,868
|
|
|
July 23, 2020
|
|
August 6, 2020
|
|
August 14, 2020
|
|
$
|
11.25
|
|
|
$
|
6,946
|
|
|
Unvested Service Award units at March 31, 2020
|
|
1,371,425
|
|
|
Units granted
|
|
3,000
|
|
|
Units forfeited
|
|
(10,500
|
)
|
|
Unvested Service Award units at June 30, 2020
|
|
1,363,925
|
|
|
Fiscal Year Ending March 31,
|
|
|
||
|
2021 (nine months)
|
|
$
|
3,602
|
|
|
2022
|
|
1,706
|
|
|
|
Total
|
|
$
|
5,308
|
|
|
|
|
June 30, 2020
|
|
March 31, 2020
|
||||||||||||
|
|
|
Derivative
Assets |
|
Derivative
Liabilities |
|
Derivative
Assets |
|
Derivative
Liabilities |
||||||||
|
|
|
(in thousands)
|
||||||||||||||
|
Level 1 measurements
|
|
$
|
23,080
|
|
|
$
|
(8,509
|
)
|
|
$
|
64,037
|
|
|
$
|
(2,235
|
)
|
|
Level 2 measurements
|
|
3,486
|
|
|
(3,584
|
)
|
|
25,217
|
|
|
(17,635
|
)
|
||||
|
|
|
26,566
|
|
|
(12,093
|
)
|
|
89,254
|
|
|
(19,870
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Netting of counterparty contracts (1)
|
|
(8,530
|
)
|
|
8,530
|
|
|
(2,282
|
)
|
|
2,282
|
|
||||
|
Net cash collateral provided (held)
|
|
3,688
|
|
|
—
|
|
|
(50,104
|
)
|
|
(370
|
)
|
||||
|
Commodity derivatives
|
|
$
|
21,724
|
|
|
$
|
(3,563
|
)
|
|
$
|
36,868
|
|
|
$
|
(17,958
|
)
|
|
|
|
(1)
|
Relates to commodity derivative assets and liabilities that are expected to be net settled on an exchange or through a netting arrangement with the counterparty. Our physical contracts that do not qualify as normal purchase normal sale transactions are not subject to such netting arrangements.
|
|
|
|
June 30, 2020
|
|
March 31, 2020
|
||||
|
|
|
(in thousands)
|
||||||
|
Prepaid expenses and other current assets
|
|
$
|
21,724
|
|
|
$
|
36,868
|
|
|
Accrued expenses and other payables
|
|
(3,469
|
)
|
|
(17,777
|
)
|
||
|
Other noncurrent liabilities
|
|
(94
|
)
|
|
(181
|
)
|
||
|
Net commodity derivative asset
|
|
$
|
18,161
|
|
|
$
|
18,910
|
|
|
Contracts
|
|
Settlement Period
|
|
Net Long
(Short) Notional Units (in barrels) |
|
Fair Value
of Net Assets (Liabilities) |
|||
|
|
|
|
|
(in thousands)
|
|||||
|
At June 30, 2020:
|
|
|
|
|
|
|
|||
|
Crude oil fixed-price (1)
|
|
July 2020–December 2021
|
|
(2,565
|
)
|
|
$
|
13,408
|
|
|
Propane fixed-price (1)
|
|
July 2020–December 2021
|
|
1,209
|
|
|
3,024
|
|
|
|
Refined products fixed-price (1)
|
|
July 2020–March 2021
|
|
(193
|
)
|
|
(727
|
)
|
|
|
Other
|
|
July 2020–March 2022
|
|
|
|
(1,232
|
)
|
||
|
|
|
|
|
|
|
14,473
|
|
||
|
Net cash collateral provided
|
|
|
|
|
|
3,688
|
|
||
|
Net commodity derivative asset
|
|
|
|
|
|
$
|
18,161
|
|
|
|
|
|
|
|
|
|
|
|||
|
At March 31, 2020:
|
|
|
|
|
|
|
|||
|
Crude oil fixed-price (1)
|
|
April 2020–December 2021
|
|
(2,252
|
)
|
|
$
|
41,721
|
|
|
Propane fixed-price (1)
|
|
April 2020–December 2021
|
|
415
|
|
|
(738
|
)
|
|
|
Refined products fixed-price (1)
|
|
April 2020–January 2021
|
|
(26
|
)
|
|
27,401
|
|
|
|
Other
|
|
April 2020–March 2022
|
|
|
|
1,000
|
|
||
|
|
|
|
|
|
|
69,384
|
|
||
|
Net cash collateral held
|
|
|
|
|
|
(50,474
|
)
|
||
|
Net commodity derivative asset
|
|
|
|
|
|
$
|
18,910
|
|
|
|
|
|
(1)
|
We may have fixed price physical purchases, including inventory, offset by floating price physical sales or floating price physical purchases offset by fixed price physical sales. These contracts are derivatives we have entered into as an economic hedge against the risk of mismatches between fixed and floating price physical obligations.
|
|
Senior Unsecured Notes:
|
|
||
|
2023 Notes
|
$
|
497,551
|
|
|
2025 Notes
|
$
|
292,972
|
|
|
2026 Notes
|
$
|
324,788
|
|
|
|
|
Three Months Ended June 30,
|
||||||
|
|
|
2020
|
|
2019
|
||||
|
|
|
(in thousands)
|
||||||
|
Revenues:
|
|
|
|
|
||||
|
Crude Oil Logistics:
|
|
|
|
|
||||
|
Topic 606 revenues
|
|
|
|
|
||||
|
Crude oil sales
|
|
$
|
230,728
|
|
|
$
|
682,069
|
|
|
Crude oil transportation and other
|
|
42,641
|
|
|
39,997
|
|
||
|
Non-Topic 606 revenues
|
|
3,169
|
|
|
3,621
|
|
||
|
Elimination of intersegment sales
|
|
(499
|
)
|
|
(9,527
|
)
|
||
|
Total Crude Oil Logistics revenues
|
|
276,039
|
|
|
716,160
|
|
||
|
Water Solutions:
|
|
|
|
|
||||
|
Topic 606 revenues
|
|
|
|
|
||||
|
Disposal service fees
|
|
81,378
|
|
|
51,140
|
|
||
|
Sale of recovered crude oil
|
|
1,368
|
|
|
14,335
|
|
||
|
Sale of brackish non-potable water
|
|
1,833
|
|
|
2,096
|
|
||
|
Other service revenues
|
|
3,486
|
|
|
4,212
|
|
||
|
Total Water Solutions revenues
|
|
88,065
|
|
|
71,783
|
|
||
|
Liquids and Refined Products:
|
|
|
|
|
||||
|
Topic 606 revenues
|
|
|
|
|
||||
|
Refined products sales
|
|
210,547
|
|
|
674,713
|
|
||
|
Propane sales
|
|
121,528
|
|
|
139,374
|
|
||
|
Butane sales
|
|
55,197
|
|
|
82,225
|
|
||
|
Other product sales
|
|
48,335
|
|
|
114,605
|
|
||
|
Service revenues
|
|
6,342
|
|
|
8,787
|
|
||
|
Non-Topic 606 revenues
|
|
38,717
|
|
|
65,178
|
|
||
|
Elimination of intersegment sales
|
|
(668
|
)
|
|
(1,189
|
)
|
||
|
Total Liquids and Refined Products revenues
|
|
479,998
|
|
|
1,083,693
|
|
||
|
Corporate and Other:
|
|
|
|
|
||||
|
Non-Topic 606 revenues
|
|
313
|
|
|
255
|
|
||
|
Total Corporate and Other revenues
|
|
313
|
|
|
255
|
|
||
|
Total revenues
|
|
$
|
844,415
|
|
|
$
|
1,871,891
|
|
|
|
|
Three Months Ended June 30,
|
||||||
|
|
|
2020
|
|
2019
|
||||
|
|
|
(in thousands)
|
||||||
|
Depreciation and Amortization:
|
|
|
|
|
||||
|
Crude Oil Logistics
|
|
$
|
16,795
|
|
|
$
|
17,585
|
|
|
Water Solutions
|
|
58,195
|
|
|
28,223
|
|
||
|
Liquids and Refined Products
|
|
8,233
|
|
|
7,441
|
|
||
|
Corporate and Other
|
|
4,457
|
|
|
2,868
|
|
||
|
Total depreciation and amortization
|
|
$
|
87,680
|
|
|
$
|
56,117
|
|
|
|
|
|
|
|
||||
|
Operating Income (Loss):
|
|
|
|
|
||||
|
Crude Oil Logistics
|
|
$
|
23,320
|
|
|
$
|
33,802
|
|
|
Water Solutions
|
|
(16,047
|
)
|
|
13,689
|
|
||
|
Liquids and Refined Products
|
|
4,562
|
|
|
15,371
|
|
||
|
Corporate and Other
|
|
(22,620
|
)
|
|
(15,342
|
)
|
||
|
Total operating (loss) income
|
|
$
|
(10,785
|
)
|
|
$
|
47,520
|
|
|
|
|
Three Months Ended June 30,
|
||||||
|
|
|
2020
|
|
2019
|
||||
|
|
|
(in thousands)
|
||||||
|
Crude Oil Logistics
|
|
$
|
5,672
|
|
|
$
|
14,805
|
|
|
Water Solutions
|
|
20,702
|
|
|
203,900
|
|
||
|
Liquids and Refined Products
|
|
1,532
|
|
|
5,553
|
|
||
|
Corporate and Other
|
|
2,032
|
|
|
739
|
|
||
|
Total
|
|
$
|
29,938
|
|
|
$
|
224,997
|
|
|
|
|
June 30, 2020
|
|
March 31, 2020
|
||||
|
|
|
(in thousands)
|
||||||
|
Long-lived assets, net:
|
|
|
|
|
||||
|
Crude Oil Logistics
|
|
$
|
1,553,137
|
|
|
$
|
1,567,503
|
|
|
Water Solutions
|
|
3,344,740
|
|
|
3,382,727
|
|
||
|
Liquids and Refined Products (1)
|
|
639,063
|
|
|
654,530
|
|
||
|
Corporate and Other
|
|
40,402
|
|
|
33,570
|
|
||
|
Total
|
|
$
|
5,577,342
|
|
|
$
|
5,638,330
|
|
|
|
|
(1)
|
Includes $23.9 million and $25.9 million of non-US long-lived assets at June 30, 2020 and March 31, 2020, respectively.
|
|
|
|
June 30, 2020
|
|
March 31, 2020
|
||||
|
|
|
(in thousands)
|
||||||
|
Total assets:
|
|
|
|
|
||||
|
Crude Oil Logistics
|
|
$
|
1,896,491
|
|
|
$
|
1,886,211
|
|
|
Water Solutions
|
|
3,472,566
|
|
|
3,539,328
|
|
||
|
Liquids and Refined Products (1)
|
|
896,997
|
|
|
972,684
|
|
||
|
Corporate and Other
|
|
60,032
|
|
|
100,513
|
|
||
|
Total
|
|
$
|
6,326,086
|
|
|
$
|
6,498,736
|
|
|
|
|
(1)
|
Includes $44.9 million and $37.8 million of non-US total assets at June 30, 2020 and March 31, 2020, respectively.
|
|
|
|
Three Months Ended June 30,
|
||||||
|
|
|
2020
|
|
2019
|
||||
|
|
|
(in thousands)
|
||||||
|
Sales to WPX
|
|
$
|
9,756
|
|
|
$
|
8,436
|
|
|
Purchases from WPX (1)
|
|
$
|
33,773
|
|
|
$
|
80,771
|
|
|
Sales to entities affiliated with management
|
|
$
|
880
|
|
|
$
|
1,021
|
|
|
Purchases from entities affiliated with management
|
|
$
|
67
|
|
|
$
|
1,156
|
|
|
Purchases from equity method investees
|
|
$
|
453
|
|
|
$
|
—
|
|
|
|
|
(1)
|
Amount primarily relates to purchases of crude oil under the definitive agreement we signed with WPX.
|
|
|
|
June 30, 2020
|
|
March 31, 2020
|
||||
|
|
|
(in thousands)
|
||||||
|
Receivables from NGL Energy Holdings LLC
|
|
$
|
7,940
|
|
|
$
|
7,781
|
|
|
Receivables from WPX
|
|
4,784
|
|
|
3,563
|
|
||
|
Receivables from entities affiliated with management
|
|
104
|
|
|
151
|
|
||
|
Receivables from equity method investees
|
|
1,986
|
|
|
1,439
|
|
||
|
Total
|
|
$
|
14,814
|
|
|
$
|
12,934
|
|
|
|
|
June 30, 2020
|
|
March 31, 2020
|
||||
|
|
|
(in thousands)
|
||||||
|
Payables to WPX
|
|
$
|
22,365
|
|
|
$
|
17,039
|
|
|
Payables to entities affiliated with management
|
|
1
|
|
|
149
|
|
||
|
Payables to equity method investees
|
|
498
|
|
|
529
|
|
||
|
Total
|
|
$
|
22,864
|
|
|
$
|
17,717
|
|
|
Fiscal Year Ending March 31,
|
|
||
|
2021 (nine months)
|
$
|
181,644
|
|
|
2022
|
210,387
|
|
|
|
2023
|
204,131
|
|
|
|
2024
|
173,712
|
|
|
|
2025
|
147,638
|
|
|
|
Thereafter
|
164,437
|
|
|
|
Total (1)
|
$
|
1,081,949
|
|
|
|
|
(1)
|
Amount includes revenue from a counterparty that filed for Chapter 11 bankruptcy in June 2020. See Note 17 for a further discussion.
|
|
|
|
Balance at
|
||||||
|
|
|
March 31, 2020
|
|
June 30, 2020
|
||||
|
|
|
(in thousands)
|
||||||
|
Accounts receivable from contracts with customers
|
|
$
|
372,930
|
|
|
$
|
324,290
|
|
|
Contract liabilities balance at March 31, 2020
|
|
$
|
19,536
|
|
|
Payment received and deferred
|
|
12,711
|
|
|
|
Payment recognized in revenue
|
|
(6,921
|
)
|
|
|
Contract liabilities balance at June 30, 2020
|
|
$
|
25,326
|
|
|
|
|
Three Months Ended June 30,
|
||||||
|
|
|
2020
|
|
2019
|
||||
|
|
|
(in thousands)
|
||||||
|
Operating lease expense
|
|
$
|
18,277
|
|
|
$
|
29,398
|
|
|
Variable lease expense
|
|
4,879
|
|
|
1,808
|
|
||
|
Short-term lease expense
|
|
396
|
|
|
126
|
|
||
|
Total lease expense
|
|
$
|
23,552
|
|
|
$
|
31,332
|
|
|
Fiscal Year Ending March 31,
|
|
||
|
2021 (nine months)
|
$
|
61,077
|
|
|
2022
|
44,199
|
|
|
|
2023
|
30,703
|
|
|
|
2024
|
19,332
|
|
|
|
2025
|
10,252
|
|
|
|
Thereafter
|
59,762
|
|
|
|
Total lease payments
|
225,325
|
|
|
|
Less imputed interest
|
(50,619
|
)
|
|
|
Total operating lease obligations
|
$
|
174,706
|
|
|
|
|
Three Months Ended June 30,
|
||||||
|
|
|
2020
|
|
2019 (1)
|
||||
|
|
|
(in thousands)
|
||||||
|
Cash paid for amounts included in the measurement of operating lease obligations
|
|
$
|
17,678
|
|
|
$
|
29,108
|
|
|
Operating lease right-of-use assets obtained in exchange for operating lease obligations
|
|
$
|
12,642
|
|
|
$
|
552,527
|
|
|
|
|
(1)
|
Amounts in the table for the three months ended June 30, 2019 include the leases and activity for the TPSL and Gas Blending businesses which were sold during the fiscal year ended March 31, 2020 (see Note 18).
|
|
Fiscal Year Ending March 31,
|
|
||
|
2021 (nine months)
|
$
|
12,666
|
|
|
2022
|
8,112
|
|
|
|
2023
|
5,605
|
|
|
|
2024
|
3,001
|
|
|
|
2025
|
2,165
|
|
|
|
Thereafter
|
11,275
|
|
|
|
Total
|
$
|
42,824
|
|
|
|
|
Accounts Receivable - Trade
|
|
Notes Receivable and Other
|
||||
|
|
|
(in thousands)
|
||||||
|
Balance at March 31, 2020
|
|
$
|
4,540
|
|
|
$
|
—
|
|
|
Cumulative effect adjustment
|
|
433
|
|
|
680
|
|
||
|
Current period provision for expected credit losses
|
|
(27
|
)
|
|
—
|
|
||
|
Write-offs charged against the allowance
|
|
(1,272
|
)
|
|
(222
|
)
|
||
|
Balance at June 30, 2020
|
|
$
|
3,674
|
|
|
$
|
458
|
|
|
|
|
Three Months Ended June 30,
|
||||||
|
|
|
2020
|
|
2019
|
||||
|
|
|
(in thousands)
|
||||||
|
Revenues
|
|
$
|
16,198
|
|
|
$
|
4,766,000
|
|
|
Cost of sales
|
|
16,311
|
|
|
4,763,537
|
|
||
|
Operating expenses
|
|
208
|
|
|
2,955
|
|
||
|
General and administrative expense
|
|
—
|
|
|
21
|
|
||
|
Depreciation and amortization
|
|
—
|
|
|
454
|
|
||
|
Loss on disposal or impairment of assets, net (1)
|
|
1,065
|
|
|
—
|
|
||
|
Operating loss from discontinued operations
|
|
(1,386
|
)
|
|
(967
|
)
|
||
|
Interest expense
|
|
(100
|
)
|
|
(31
|
)
|
||
|
Other income, net
|
|
—
|
|
|
65
|
|
||
|
Loss from discontinued operations before taxes
|
|
(1,486
|
)
|
|
(933
|
)
|
||
|
Income tax expense
|
|
—
|
|
|
(10
|
)
|
||
|
Loss from discontinued operations, net of tax
|
|
$
|
(1,486
|
)
|
|
$
|
(943
|
)
|
|
|
|
(1)
|
Amount for the three months ended June 30, 2020 includes a loss of $1.0 million on the sale of Gas Blending and $0.1 million on the sale of TPSL.
|
|
|
|
Three Months Ended June 30,
|
||||||
|
|
|
2020
|
|
2019
|
||||
|
|
|
(in thousands)
|
||||||
|
Total revenues
|
|
$
|
844,415
|
|
|
$
|
1,871,891
|
|
|
Total cost of sales
|
|
677,047
|
|
|
1,689,930
|
|
||
|
Operating expenses
|
|
64,987
|
|
|
61,312
|
|
||
|
General and administrative expense
|
|
17,158
|
|
|
20,342
|
|
||
|
Depreciation and amortization
|
|
83,986
|
|
|
53,754
|
|
||
|
Loss (gain) on disposal or impairment of assets, net
|
|
12,022
|
|
|
(967
|
)
|
||
|
Operating (loss) income
|
|
(10,785
|
)
|
|
47,520
|
|
||
|
Equity in earnings of unconsolidated entities
|
|
289
|
|
|
8
|
|
||
|
Interest expense
|
|
(43,961
|
)
|
|
(39,877
|
)
|
||
|
Gain on early extinguishment of liabilities, net
|
|
19,355
|
|
|
—
|
|
||
|
Other income, net
|
|
1,035
|
|
|
1,010
|
|
||
|
(Loss) income from continuing operations before income taxes
|
|
(34,067
|
)
|
|
8,661
|
|
||
|
Income tax benefit
|
|
301
|
|
|
321
|
|
||
|
(Loss) income from continuing operations
|
|
(33,766
|
)
|
|
8,982
|
|
||
|
Loss from discontinued operations, net of tax
|
|
(1,486
|
)
|
|
(943
|
)
|
||
|
Net (loss) income
|
|
(35,252
|
)
|
|
8,039
|
|
||
|
Less: Net (income) loss attributable to noncontrolling interests
|
|
(51
|
)
|
|
268
|
|
||
|
Net (loss) income attributable to NGL Energy Partners LP
|
|
$
|
(35,303
|
)
|
|
$
|
8,307
|
|
|
•
|
On July 2, 2019, we acquired all of the assets of Mesquite Disposals Unlimited, LLC (“Mesquite”) (including 34 saltwater disposal wells and approximately 175 miles of pipelines);
|
|
•
|
On October 31, 2019, we acquired all of the equity interests of Hillstone Environmental Partners, LLC (“Hillstone”) (including 19 saltwater disposal wells);
|
|
•
|
On November 7, 2019, we acquired the exclusive rights to use certain land in Lea County, New Mexico for produced and treated water operations from one entity, certain membership interests in another entity and other assets;
|
|
•
|
During the fiscal year ended March 31, 2020, we acquired one saltwater disposal facility (including three saltwater disposal wells) in Eddy County, New Mexico; and
|
|
•
|
During the fiscal year ended March 31, 2020, we acquired land and two saltwater disposal wells in Pecos County, Texas.
|
|
•
|
On September 30, 2019, we completed the sale of TransMontaigne Product Services, LLC (“TPSL”) to Trajectory Acquisition Company, LLC;
|
|
•
|
On January 3, 2020, we completed the sale of our refined products business in the mid-continent region of the United States (“Mid-Con”) to a third-party; and
|
|
•
|
On March 30, 2020, we completed the sale of our gas blending business in the southeastern and eastern regions of the United States (“Gas Blending”) to another third-party.
|
|
|
|
Three Months Ended June 30,
|
|
|
||||||||
|
|
|
2020
|
|
2019
|
|
Change
|
||||||
|
|
|
(in thousands, except per barrel amounts)
|
||||||||||
|
Revenues:
|
|
|
|
|
|
|
||||||
|
Crude oil sales
|
|
$
|
230,728
|
|
|
$
|
682,069
|
|
|
$
|
(451,341
|
)
|
|
Crude oil transportation and other
|
|
45,810
|
|
|
43,618
|
|
|
2,192
|
|
|||
|
Total revenues (1)
|
|
276,538
|
|
|
725,687
|
|
|
(449,149
|
)
|
|||
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|||
|
Cost of sales-excluding impact of derivatives
|
|
193,592
|
|
|
662,038
|
|
|
(468,446
|
)
|
|||
|
Derivative loss (gain)
|
|
24,464
|
|
|
(3,271
|
)
|
|
27,735
|
|
|||
|
Operating expenses
|
|
14,826
|
|
|
14,378
|
|
|
448
|
|
|||
|
General and administrative expenses
|
|
2,091
|
|
|
1,771
|
|
|
320
|
|
|||
|
Depreciation and amortization expense
|
|
16,795
|
|
|
17,585
|
|
|
(790
|
)
|
|||
|
Loss (gain) on disposal or impairment of assets, net
|
|
1,450
|
|
|
(616
|
)
|
|
2,066
|
|
|||
|
Total expenses
|
|
253,218
|
|
|
691,885
|
|
|
(438,667
|
)
|
|||
|
Segment operating income
|
|
$
|
23,320
|
|
|
$
|
33,802
|
|
|
$
|
(10,482
|
)
|
|
|
|
|
|
|
|
|
||||||
|
Crude oil sold (barrels)
|
|
9,292
|
|
|
11,291
|
|
|
(1,999
|
)
|
|||
|
Crude oil transported on owned pipelines (barrels)
|
|
10,476
|
|
|
11,789
|
|
|
(1,313
|
)
|
|||
|
Crude oil storage capacity - owned and leased (barrels) (2)
|
|
5,239
|
|
|
5,232
|
|
|
7
|
|
|||
|
Crude oil storage capacity leased to third parties (barrels) (2)
|
|
2,062
|
|
|
2,563
|
|
|
(501
|
)
|
|||
|
Crude oil inventory (barrels) (2)
|
|
1,622
|
|
|
1,125
|
|
|
497
|
|
|||
|
Crude oil sold ($/barrel)
|
|
$
|
24.831
|
|
|
$
|
60.408
|
|
|
$
|
(35.577
|
)
|
|
Cost per crude oil sold ($/barrel)
|
|
$
|
23.467
|
|
|
$
|
58.344
|
|
|
$
|
(34.877
|
)
|
|
Crude oil product margin ($/barrel)
|
|
$
|
1.364
|
|
|
$
|
2.064
|
|
|
$
|
(0.700
|
)
|
|
|
|
(1)
|
Revenues include $0.5 million and $9.5 million of intersegment sales during the three months ended June 30, 2020 and 2019, respectively, that are eliminated in our unaudited condensed consolidated statements of operations.
|
|
(2)
|
Information is presented as of June 30, 2020 and June 30, 2019, respectively.
|
|
|
|
Three Months Ended June 30,
|
|
|
||||||||
|
|
|
2020
|
|
2019
|
|
Change
|
||||||
|
|
|
(in thousands, except per barrel and per day amounts)
|
||||||||||
|
Revenues:
|
|
|
|
|
|
|
||||||
|
Water disposal service fees
|
|
$
|
78,317
|
|
|
$
|
45,927
|
|
|
$
|
32,390
|
|
|
Sale of recovered crude oil
|
|
1,368
|
|
|
14,335
|
|
|
(12,967
|
)
|
|||
|
Other service revenues
|
|
8,380
|
|
|
11,521
|
|
|
(3,141
|
)
|
|||
|
Total revenues
|
|
88,065
|
|
|
71,783
|
|
|
16,282
|
|
|||
|
Expenses:
|
|
|
|
|
|
|
||||||
|
Cost of sales-excluding impact of derivatives
|
|
115
|
|
|
248
|
|
|
(133
|
)
|
|||
|
Derivative loss (gain)
|
|
4,585
|
|
|
(3,055
|
)
|
|
7,640
|
|
|||
|
Operating expenses
|
|
39,299
|
|
|
32,456
|
|
|
6,843
|
|
|||
|
General and administrative expenses
|
|
1,651
|
|
|
963
|
|
|
688
|
|
|||
|
Depreciation and amortization expense
|
|
58,133
|
|
|
28,071
|
|
|
30,062
|
|
|||
|
Loss (gain) on disposal or impairment of assets, net
|
|
329
|
|
|
(589
|
)
|
|
918
|
|
|||
|
Total expenses
|
|
104,112
|
|
|
58,094
|
|
|
46,018
|
|
|||
|
Segment operating (loss) income
|
|
$
|
(16,047
|
)
|
|
$
|
13,689
|
|
|
$
|
(29,736
|
)
|
|
|
|
|
|
|
|
|
||||||
|
Produced water processed (barrels per day)
|
|
|
|
|
|
|
||||||
|
Northern Delaware Basin
|
|
915,188
|
|
|
88,089
|
|
|
827,099
|
|
|||
|
Permian Basin
|
|
214,340
|
|
|
311,540
|
|
|
(97,200
|
)
|
|||
|
Eagle Ford Basin
|
|
95,375
|
|
|
267,244
|
|
|
(171,869
|
)
|
|||
|
DJ Basin
|
|
132,365
|
|
|
169,620
|
|
|
(37,255
|
)
|
|||
|
Other Basins
|
|
9,151
|
|
|
12,394
|
|
|
(3,243
|
)
|
|||
|
Total
|
|
1,366,419
|
|
|
848,887
|
|
|
517,532
|
|
|||
|
Solids processed (barrels per day)
|
|
1,899
|
|
|
5,442
|
|
|
(3,543
|
)
|
|||
|
Skim oil sold (barrels per day) (1)
|
|
687
|
|
|
2,860
|
|
|
(2,173
|
)
|
|||
|
Service fees for produced water processed ($/barrel) (2)
|
|
$
|
0.63
|
|
|
$
|
0.59
|
|
|
$
|
0.04
|
|
|
Recovered crude oil for produced water processed ($/barrel) (2)
|
|
$
|
0.01
|
|
|
$
|
0.19
|
|
|
$
|
(0.18
|
)
|
|
Operating expenses for produced water processed ($/barrel) (2)
|
|
$
|
0.32
|
|
|
$
|
0.42
|
|
|
$
|
(0.10
|
)
|
|
|
|
(1)
|
During the three months ended June 30, 2020, approximately 1,054 barrels per day of skim oil were not sold due to crude oil prices but rather were stored for sale at a later date.
|
|
(2)
|
Total produced water barrels processed during the three months ended June 30, 2020 and 2019 were 124,344,088 and 77,248,629, respectively.
|
|
|
|
Three Months Ended June 30,
|
|
|
||||||||
|
|
|
2020
|
|
2019
|
|
Change
|
||||||
|
|
|
(in thousands, except per gallon amounts)
|
||||||||||
|
|
|
|
|
|
|
|
||||||
|
Refined products sales:
|
|
|
|
|
|
|
||||||
|
Revenues-excluding impact of derivatives (1)(2)
|
|
$
|
210,642
|
|
|
$
|
668,558
|
|
|
$
|
(457,916
|
)
|
|
Cost of sales-excluding impact of derivatives (3)
|
|
207,612
|
|
|
659,679
|
|
|
(452,067
|
)
|
|||
|
Derivative loss (gain)
|
|
445
|
|
|
(427
|
)
|
|
872
|
|
|||
|
Product margin
|
|
2,585
|
|
|
9,306
|
|
|
(6,721
|
)
|
|||
|
|
|
|
|
|
|
|
||||||
|
Propane sales:
|
|
|
|
|
|
|
||||||
|
Revenues (1)
|
|
122,323
|
|
|
140,159
|
|
|
(17,836
|
)
|
|||
|
Cost of sales-excluding impact of derivatives
|
|
114,622
|
|
|
135,199
|
|
|
(20,577
|
)
|
|||
|
Derivative (gain) loss
|
|
(4,334
|
)
|
|
2,810
|
|
|
(7,144
|
)
|
|||
|
Product margin
|
|
12,035
|
|
|
2,150
|
|
|
9,885
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Butane sales:
|
|
|
|
|
|
|
|
|
||||
|
Revenues (1)
|
|
55,429
|
|
|
82,312
|
|
|
(26,883
|
)
|
|||
|
Cost of sales-excluding impact of derivatives
|
|
51,655
|
|
|
75,541
|
|
|
(23,886
|
)
|
|||
|
Derivative loss (gain)
|
|
1,013
|
|
|
(6,105
|
)
|
|
7,118
|
|
|||
|
Product margin
|
|
2,761
|
|
|
12,876
|
|
|
(10,115
|
)
|
|||
|
|
|
|
|
|
|
|
|
|||||
|
Other product sales:
|
|
|
|
|
|
|
||||||
|
Revenues-excluding impact of derivatives (1)
|
|
84,166
|
|
|
195,956
|
|
|
(111,790
|
)
|
|||
|
Cost of sales-excluding impact of derivatives
|
|
81,725
|
|
|
182,269
|
|
|
(100,544
|
)
|
|||
|
Derivative loss
|
|
1,230
|
|
|
4,490
|
|
|
(3,260
|
)
|
|||
|
Product margin
|
|
1,211
|
|
|
9,197
|
|
|
(7,986
|
)
|
|||
|
|
|
|
|
|
|
|
||||||
|
Service revenues:
|
|
|
|
|
|
|
||||||
|
Revenues (1)
|
|
9,056
|
|
|
11,115
|
|
|
(2,059
|
)
|
|||
|
Cost of sales
|
|
1,986
|
|
|
3,983
|
|
|
(1,997
|
)
|
|||
|
Product margin
|
|
7,070
|
|
|
7,132
|
|
|
(62
|
)
|
|||
|
|
|
|
|
|
|
|
||||||
|
Expenses:
|
|
|
|
|
|
|
||||||
|
Operating expenses
|
|
10,862
|
|
|
14,173
|
|
|
(3,311
|
)
|
|||
|
General and administrative expenses
|
|
2,078
|
|
|
3,765
|
|
|
(1,687
|
)
|
|||
|
Depreciation and amortization expense
|
|
8,156
|
|
|
7,355
|
|
|
801
|
|
|||
|
Loss (gain) on disposal or impairment of assets, net
|
|
4
|
|
|
(3
|
)
|
|
7
|
|
|||
|
Total expenses
|
|
21,100
|
|
|
25,290
|
|
|
(4,190
|
)
|
|||
|
Segment operating income
|
|
$
|
4,562
|
|
|
$
|
15,371
|
|
|
$
|
(10,809
|
)
|
|
|
|
Three Months Ended June 30,
|
|
|
||||||||
|
|
|
2020
|
|
2019
|
|
Change
|
||||||
|
|
|
(in thousands, except per gallon amounts)
|
||||||||||
|
|
|
|
|
|
|
|
||||||
|
Liquids and Refined Products storage capacity - owned and leased (gallons) (4)
|
|
399,251
|
|
|
400,409
|
|
|
(1,158
|
)
|
|||
|
|
|
|
|
|
|
|
||||||
|
Refined products sold (gallons)
|
|
211,974
|
|
|
321,634
|
|
|
(109,660
|
)
|
|||
|
Refined products sold ($/gallon)
|
|
$
|
0.994
|
|
|
$
|
2.102
|
|
|
$
|
(1.108
|
)
|
|
Cost per refined products sold ($/gallon)
|
|
$
|
0.979
|
|
|
$
|
2.077
|
|
|
$
|
(1.098
|
)
|
|
Refined products product margin ($/gallon)
|
|
$
|
0.015
|
|
|
$
|
0.025
|
|
|
$
|
(0.010
|
)
|
|
Refined products inventory (gallons) (4)
|
|
2,656
|
|
|
4,420
|
|
|
(1,764
|
)
|
|||
|
|
|
|
|
|
|
|
||||||
|
Propane sold (gallons)
|
|
252,289
|
|
|
245,267
|
|
|
7,022
|
|
|||
|
Propane sold ($/gallon)
|
|
$
|
0.485
|
|
|
$
|
0.571
|
|
|
$
|
(0.086
|
)
|
|
Cost per propane sold ($/gallon)
|
|
$
|
0.437
|
|
|
$
|
0.563
|
|
|
$
|
(0.126
|
)
|
|
Propane product margin ($/gallon)
|
|
$
|
0.048
|
|
|
$
|
0.008
|
|
|
$
|
0.040
|
|
|
Propane inventory (gallons) (4)
|
|
77,968
|
|
|
76,012
|
|
|
1,956
|
|
|||
|
Propane storage capacity leased to third parties (gallons) (4)
|
|
46,066
|
|
|
45,436
|
|
|
630
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Butane sold (gallons)
|
|
119,566
|
|
|
142,479
|
|
|
(22,913
|
)
|
|||
|
Butane sold ($/gallon)
|
|
$
|
0.464
|
|
|
$
|
0.578
|
|
|
$
|
(0.114
|
)
|
|
Cost per butane sold ($/gallon)
|
|
$
|
0.440
|
|
|
$
|
0.487
|
|
|
$
|
(0.047
|
)
|
|
Butane product margin ($/gallon)
|
|
$
|
0.024
|
|
|
$
|
0.091
|
|
|
$
|
(0.067
|
)
|
|
Butane inventory (gallons) (4)
|
|
73,291
|
|
|
53,219
|
|
|
20,072
|
|
|||
|
Butane storage capacity leased to third parties (gallons) (4)
|
|
33,894
|
|
|
33,894
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Other products sold (gallons)
|
|
114,222
|
|
|
154,592
|
|
|
(40,370
|
)
|
|||
|
Other products sold ($/gallon)
|
|
$
|
0.737
|
|
|
$
|
1.268
|
|
|
$
|
(0.531
|
)
|
|
Cost per other products sold ($/gallon)
|
|
$
|
0.726
|
|
|
$
|
1.208
|
|
|
$
|
(0.482
|
)
|
|
Other products product margin ($/gallon)
|
|
$
|
0.011
|
|
|
$
|
0.060
|
|
|
$
|
(0.049
|
)
|
|
Other products inventory (gallons) (4)
|
|
31,583
|
|
|
52,071
|
|
|
(20,488
|
)
|
|||
|
|
|
(1)
|
Revenues include $0.7 million and $1.2 million of intersegment sales during the three months ended June 30, 2020 and 2019, respectively, that are eliminated in our unaudited condensed consolidated statements of operations.
|
|
(2)
|
Revenues included $7.5 million of intersegment sales during the three months ended June 30, 2019 between certain businesses within the Liquids and Refined Products segment and TPSL, Mid-Con and Gas Blending that are eliminated in our unaudited condensed consolidated statement of operations.
|
|
(3)
|
Cost of sales included $8.8 million of intersegment cost of sales during the three months ended June 30, 2019 between certain businesses within the Liquids and Refined Products segment and TPSL, Mid-Con and Gas Blending that are eliminated in our unaudited condensed consolidated statement of operations.
|
|
(4)
|
Information is presented as of June 30, 2020 and June 30, 2019, respectively.
|
|
|
|
Three Months Ended June 30,
|
|
|
||||||||
|
|
|
2020
|
|
2019
|
|
Change
|
||||||
|
|
|
(in thousands)
|
||||||||||
|
Other revenues
|
|
|
|
|
|
|
||||||
|
Revenues
|
|
$
|
313
|
|
|
$
|
255
|
|
|
$
|
58
|
|
|
Cost of sales
|
|
454
|
|
|
465
|
|
|
(11
|
)
|
|||
|
Loss
|
|
(141
|
)
|
|
(210
|
)
|
|
69
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Expenses:
|
|
|
|
|
|
|
||||||
|
Operating expenses
|
|
—
|
|
|
305
|
|
|
(305
|
)
|
|||
|
General and administrative expenses
|
|
11,338
|
|
|
13,843
|
|
|
(2,505
|
)
|
|||
|
Depreciation and amortization expense
|
|
902
|
|
|
743
|
|
|
159
|
|
|||
|
Loss on disposal or impairment of assets, net
|
|
10,239
|
|
|
241
|
|
|
9,998
|
|
|||
|
Total expenses
|
|
22,479
|
|
|
15,132
|
|
|
7,347
|
|
|||
|
Operating loss
|
|
$
|
(22,620
|
)
|
|
$
|
(15,342
|
)
|
|
$
|
(7,278
|
)
|
|
|
|
Three Months Ended June 30,
|
||||||
|
|
|
2020
|
|
2019
|
||||
|
|
|
(in thousands)
|
||||||
|
Net (loss) income
|
|
$
|
(35,252
|
)
|
|
$
|
8,039
|
|
|
Less: Net (income) loss attributable to noncontrolling interests
|
|
(51
|
)
|
|
268
|
|
||
|
Net (loss) income attributable to NGL Energy Partners LP
|
|
(35,303
|
)
|
|
8,307
|
|
||
|
Interest expense
|
|
44,066
|
|
|
39,910
|
|
||
|
Income tax benefit
|
|
(301
|
)
|
|
(311
|
)
|
||
|
Depreciation and amortization
|
|
83,202
|
|
|
54,844
|
|
||
|
EBITDA
|
|
91,664
|
|
|
102,750
|
|
||
|
Net unrealized losses (gains) on derivatives
|
|
26,671
|
|
|
(3,474
|
)
|
||
|
Inventory valuation adjustment (1)
|
|
3,820
|
|
|
(19,746
|
)
|
||
|
Lower of cost or net realizable value adjustments
|
|
(32,003
|
)
|
|
(918
|
)
|
||
|
Loss (gain) on disposal or impairment of assets, net
|
|
13,084
|
|
|
(967
|
)
|
||
|
Gain on early extinguishment of liabilities, net
|
|
(19,355
|
)
|
|
—
|
|
||
|
Equity-based compensation expense (2)
|
|
2,302
|
|
|
3,701
|
|
||
|
Acquisition expense (3)
|
|
157
|
|
|
2,091
|
|
||
|
Other (4)
|
|
4,348
|
|
|
3,323
|
|
||
|
Adjusted EBITDA
|
|
$
|
90,688
|
|
|
$
|
86,760
|
|
|
Adjusted EBITDA - Discontinued Operations (5)
|
|
$
|
(294
|
)
|
|
$
|
(16,958
|
)
|
|
Adjusted EBITDA - Continuing Operations
|
|
$
|
90,982
|
|
|
$
|
103,718
|
|
|
|
|
(1)
|
Amount reflects the difference between the market value of the inventory at the balance sheet date and its cost, adjusted for the impact of seasonal market movements related to our base inventory and the related hedge position. See “Non-GAAP Financial Measures” section above for a further discussion.
|
|
(2)
|
Equity-based compensation expense in the table above may differ from equity-based compensation expense reported in Note 10 to our unaudited condensed consolidated financial statements included in this Quarterly Report. Amounts reported in the table above include expense accruals for bonuses expected to be paid in common units, whereas the amounts reported in Note 10 to our unaudited condensed consolidated financial statements only include expenses associated with equity-based awards that have been formally granted.
|
|
(3)
|
Amounts represent expenses we incurred related to legal and advisory costs associated with acquisitions.
|
|
(4)
|
Amounts for the three months ended June 30, 2020 and 2019 represent non-cash operating expenses related to our Grand Mesa Pipeline, unrealized losses on marketable securities and accretion expense for asset retirement obligations.
|
|
(5)
|
Amounts include the operations of TPSL, Gas Blending and Mid-Con.
|
|
|
|
Three Months Ended June 30,
|
||||||
|
|
|
2020
|
|
2019
|
||||
|
|
|
(in thousands)
|
||||||
|
Reconciliation to unaudited condensed consolidated statements of operations:
|
|
|
|
|
||||
|
Depreciation and amortization per EBITDA table
|
|
$
|
83,202
|
|
|
$
|
54,844
|
|
|
Intangible asset amortization recorded to cost of sales
|
|
(77
|
)
|
|
(87
|
)
|
||
|
Depreciation and amortization of unconsolidated entities
|
|
(93
|
)
|
|
(6
|
)
|
||
|
Depreciation and amortization attributable to noncontrolling interests
|
|
954
|
|
|
741
|
|
||
|
Depreciation and amortization attributable to discontinued operations
|
|
—
|
|
|
(1,738
|
)
|
||
|
Depreciation and amortization per unaudited condensed consolidated statements of operations
|
|
$
|
83,986
|
|
|
$
|
53,754
|
|
|
|
|
Three Months Ended June 30,
|
||||||
|
|
|
2020
|
|
2019
|
||||
|
|
|
(in thousands)
|
||||||
|
Reconciliation to unaudited condensed consolidated statements of cash flows:
|
|
|
|
|
||||
|
Depreciation and amortization per EBITDA table
|
|
$
|
83,202
|
|
|
$
|
54,844
|
|
|
Amortization of debt issuance costs recorded to interest expense
|
|
3,555
|
|
|
2,125
|
|
||
|
Amortization of royalty expense recorded to operating expense
|
|
62
|
|
|
151
|
|
||
|
Depreciation and amortization of unconsolidated entities
|
|
(93
|
)
|
|
(6
|
)
|
||
|
Depreciation and amortization attributable to noncontrolling interests
|
|
954
|
|
|
741
|
|
||
|
Depreciation and amortization attributable to discontinued operations
|
|
—
|
|
|
(1,738
|
)
|
||
|
Depreciation and amortization per unaudited condensed consolidated statements of cash flows
|
|
$
|
87,680
|
|
|
$
|
56,117
|
|
|
|
|
Three Months Ended June 30,
|
||||||
|
|
|
2020
|
|
2019
|
||||
|
|
|
(in thousands)
|
||||||
|
Interest expense per EBITDA table
|
|
$
|
44,066
|
|
|
$
|
39,910
|
|
|
Interest expense attributable to noncontrolling interests
|
|
13
|
|
|
—
|
|
||
|
Interest expense attributable to unconsolidated entities
|
|
(18
|
)
|
|
(2
|
)
|
||
|
Interest expense attributable to discontinued operations
|
|
(100
|
)
|
|
(31
|
)
|
||
|
Interest expense per unaudited condensed consolidated statements of operations
|
|
$
|
43,961
|
|
|
$
|
39,877
|
|
|
|
|
Three Months Ended June 30,
|
||||||
|
|
|
2020
|
|
2019
|
||||
|
|
|
(in thousands)
|
||||||
|
Income tax expense
|
|
$
|
—
|
|
|
$
|
10
|
|
|
Inventory valuation adjustment
|
|
$
|
(20
|
)
|
|
$
|
(19,780
|
)
|
|
Lower of cost or net realizable value adjustments
|
|
$
|
20
|
|
|
$
|
705
|
|
|
Loss on disposal or impairment of assets, net
|
|
$
|
1,065
|
|
|
$
|
—
|
|
|
|
Three Months Ended June 30, 2020
|
||||||||||||||||||||||||||
|
|
Crude Oil
Logistics |
|
Water
Solutions |
|
Liquids and
Refined Products |
|
Corporate
and Other |
|
Continuing
Operations |
|
Discontinued Operations
(TPSL, Mid-Con, Gas Blending) |
|
Consolidated
|
||||||||||||||
|
|
(in thousands)
|
||||||||||||||||||||||||||
|
Operating income (loss)
|
$
|
23,320
|
|
|
$
|
(16,047
|
)
|
|
$
|
4,562
|
|
|
$
|
(22,620
|
)
|
|
$
|
(10,785
|
)
|
|
$
|
—
|
|
|
$
|
(10,785
|
)
|
|
Depreciation and amortization
|
16,795
|
|
|
58,133
|
|
|
8,156
|
|
|
902
|
|
|
83,986
|
|
|
—
|
|
|
83,986
|
|
|||||||
|
Amortization recorded to cost of sales
|
—
|
|
|
—
|
|
|
77
|
|
|
—
|
|
|
77
|
|
|
—
|
|
|
77
|
|
|||||||
|
Net unrealized losses (gains) on derivatives
|
14,638
|
|
|
13,312
|
|
|
(1,279
|
)
|
|
—
|
|
|
26,671
|
|
|
—
|
|
|
26,671
|
|
|||||||
|
Inventory valuation adjustment
|
—
|
|
|
—
|
|
|
3,840
|
|
|
—
|
|
|
3,840
|
|
|
—
|
|
|
3,840
|
|
|||||||
|
Lower of cost or net realizable value adjustments
|
(29,060
|
)
|
|
—
|
|
|
(2,963
|
)
|
|
—
|
|
|
(32,023
|
)
|
|
—
|
|
|
(32,023
|
)
|
|||||||
|
Loss on disposal or impairment of assets, net
|
1,450
|
|
|
329
|
|
|
4
|
|
|
10,239
|
|
|
12,022
|
|
|
—
|
|
|
12,022
|
|
|||||||
|
Equity-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
2,302
|
|
|
2,302
|
|
|
—
|
|
|
2,302
|
|
|||||||
|
Acquisition expense
|
—
|
|
|
12
|
|
|
—
|
|
|
145
|
|
|
157
|
|
|
—
|
|
|
157
|
|
|||||||
|
Other income, net
|
338
|
|
|
256
|
|
|
377
|
|
|
64
|
|
|
1,035
|
|
|
—
|
|
|
1,035
|
|
|||||||
|
Adjusted EBITDA attributable to unconsolidated entities
|
—
|
|
|
465
|
|
|
(1
|
)
|
|
(62
|
)
|
|
402
|
|
|
—
|
|
|
402
|
|
|||||||
|
Adjusted EBITDA attributable to noncontrolling interest
|
—
|
|
|
(487
|
)
|
|
(536
|
)
|
|
—
|
|
|
(1,023
|
)
|
|
—
|
|
|
(1,023
|
)
|
|||||||
|
Intersegment transactions (1)
|
—
|
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
(27
|
)
|
|||||||
|
Other
|
3,373
|
|
|
953
|
|
|
22
|
|
|
—
|
|
|
4,348
|
|
|
—
|
|
|
4,348
|
|
|||||||
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(294
|
)
|
|
(294
|
)
|
|||||||
|
Adjusted EBITDA
|
$
|
30,854
|
|
|
$
|
56,926
|
|
|
$
|
12,232
|
|
|
$
|
(9,030
|
)
|
|
$
|
90,982
|
|
|
$
|
(294
|
)
|
|
$
|
90,688
|
|
|
|
Three Months Ended June 30, 2019
|
||||||||||||||||||||||||||
|
|
Crude Oil
Logistics |
|
Water
Solutions |
|
Liquids and
Refined Products |
|
Corporate
and Other |
|
Continuing
Operations |
|
Discontinued Operations
(TPSL, Mid-Con, Gas Blending) |
|
Consolidated
|
||||||||||||||
|
|
(in thousands)
|
||||||||||||||||||||||||||
|
Operating income (loss)
|
$
|
33,802
|
|
|
$
|
13,689
|
|
|
$
|
15,371
|
|
|
$
|
(15,342
|
)
|
|
$
|
47,520
|
|
|
$
|
—
|
|
|
$
|
47,520
|
|
|
Depreciation and amortization
|
17,585
|
|
|
28,071
|
|
|
7,355
|
|
|
743
|
|
|
53,754
|
|
|
—
|
|
|
53,754
|
|
|||||||
|
Amortization recorded to cost of sales
|
—
|
|
|
—
|
|
|
87
|
|
|
—
|
|
|
87
|
|
|
—
|
|
|
87
|
|
|||||||
|
Net unrealized gains on derivatives
|
(1,858
|
)
|
|
(167
|
)
|
|
(1,449
|
)
|
|
—
|
|
|
(3,474
|
)
|
|
—
|
|
|
(3,474
|
)
|
|||||||
|
Inventory valuation adjustment
|
—
|
|
|
—
|
|
|
34
|
|
|
—
|
|
|
34
|
|
|
—
|
|
|
34
|
|
|||||||
|
Lower of cost or net realizable value adjustments
|
—
|
|
|
—
|
|
|
(1,623
|
)
|
|
—
|
|
|
(1,623
|
)
|
|
—
|
|
|
(1,623
|
)
|
|||||||
|
(Gain) loss on disposal or impairment of assets, net
|
(616
|
)
|
|
(589
|
)
|
|
(3
|
)
|
|
241
|
|
|
(967
|
)
|
|
—
|
|
|
(967
|
)
|
|||||||
|
Equity-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
3,701
|
|
|
3,701
|
|
|
—
|
|
|
3,701
|
|
|||||||
|
Acquisition expense
|
—
|
|
|
20
|
|
|
—
|
|
|
2,071
|
|
|
2,091
|
|
|
—
|
|
|
2,091
|
|
|||||||
|
Other (expense) income, net
|
(4
|
)
|
|
—
|
|
|
20
|
|
|
994
|
|
|
1,010
|
|
|
—
|
|
|
1,010
|
|
|||||||
|
Adjusted EBITDA attributable to unconsolidated entities
|
—
|
|
|
—
|
|
|
4
|
|
|
11
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|||||||
|
Adjusted EBITDA attributable to noncontrolling interest
|
—
|
|
|
(75
|
)
|
|
(397
|
)
|
|
—
|
|
|
(472
|
)
|
|
—
|
|
|
(472
|
)
|
|||||||
|
Intersegment transactions (1)
|
—
|
|
|
—
|
|
|
(1,281
|
)
|
|
—
|
|
|
(1,281
|
)
|
|
—
|
|
|
(1,281
|
)
|
|||||||
|
Other
|
3,165
|
|
|
140
|
|
|
18
|
|
|
—
|
|
|
3,323
|
|
|
—
|
|
|
3,323
|
|
|||||||
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,958
|
)
|
|
(16,958
|
)
|
|||||||
|
Adjusted EBITDA
|
$
|
52,074
|
|
|
$
|
41,089
|
|
|
$
|
18,136
|
|
|
$
|
(7,581
|
)
|
|
$
|
103,718
|
|
|
$
|
(16,958
|
)
|
|
$
|
86,760
|
|
|
|
|
(1)
|
Amount reflects the transactions with TPSL, Mid-Con and Gas Blending that are eliminated in consolidation.
|
|
|
|
Capital Expenditures
|
|
|
|
Other
|
||||||||||
|
|
|
Expansion (1)
|
|
Maintenance
|
|
Acquisitions
|
|
Investments (2)
|
||||||||
|
|
|
(in thousands)
|
||||||||||||||
|
Three Months Ended June 30,
|
|
|
|
|
|
|
|
|
||||||||
|
2020
|
|
$
|
20,770
|
|
|
$
|
9,168
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
2019
|
|
$
|
159,265
|
|
|
$
|
16,929
|
|
|
$
|
54,548
|
|
|
$
|
889
|
|
|
|
|
(1)
|
Amount for the three months ended June 30, 2019 includes $13.0 million of transactions classified as acquisitions of assets. There were no acquisitions of assets during the three months ended June 30, 2020.
|
|
(2)
|
Amount for the three months ended June 30, 2019 related to contributions made to unconsolidated entities. There were no other investments for the three months ended June 30, 2020.
|
|
|
|
Three Months Ended June 30,
|
||||||
|
Cash Flows Provided by (Used in):
|
|
2020
|
|
2019
|
||||
|
|
|
(in thousands)
|
||||||
|
Operating activities, before changes in operating assets and liabilities
|
|
$
|
79,884
|
|
|
$
|
61,640
|
|
|
Changes in operating assets and liabilities
|
|
1,968
|
|
|
30,998
|
|
||
|
Operating activities-continuing operations
|
|
$
|
81,852
|
|
|
$
|
92,638
|
|
|
Investing activities-continuing operations
|
|
$
|
(124,215
|
)
|
|
$
|
(203,622
|
)
|
|
Financing activities-continuing operations
|
|
$
|
47,498
|
|
|
$
|
138,282
|
|
|
•
|
a decrease in capital expenditures from $155.4 million (includes payment of amounts accrued as of March 31, 2019) during the three months ended June 30, 2019 to $97.8 million (includes payment of amounts accrued as of March 31, 2020) during the three months ended June 30, 2020 due primarily to expansion projects in our Water Solutions segment during the three months ended June 30, 2019; and
|
|
•
|
$55.4 million in cash paid for acquisitions and investments in unconsolidated entities during the three months ended June 30, 2019.
|
|
•
|
$450.0 million in proceeds from the issuance of the 2026 Notes during the three months ended June 30, 2019;
|
|
•
|
$62.8 million in contingent consideration payments as part of the Mesquite acquisition during the three months ended June 30, 2020;
|
|
•
|
$42.6 million in net proceeds from the issuance of the Class C Preferred Units during the three months ended June 30, 2019; and
|
|
•
|
repurchases of $25.0 million of our senior unsecured notes during the three months ended June 30, 2020.
|
|
•
|
$265.1 million in payments for the redemption of the 10.75% Class A Convertible Preferred Units during the three months ended June 30, 2019;
|
|
•
|
an increase of $204.0 million in borrowings on the Revolving Credit Facility (net of repayments) during the three months ended June 30, 2020; and
|
|
•
|
a decrease of $19.2 million in distributions paid to our general partners and common unitholders, preferred unitholders and noncontrolling interest owners during the three months ended June 30, 2020 due primarily to the reduction in the quarterly common unit distribution rate.
|
|
|
|
NGL Energy Partners LP (Parent) and Guarantor Subsidiaries
|
||||||
|
|
|
June 30, 2020
|
|
March 31, 2020
|
||||
|
|
|
(in thousands)
|
||||||
|
ASSETS:
|
|
|
|
|
||||
|
Current assets
|
|
$
|
662,845
|
|
|
$
|
766,026
|
|
|
Noncurrent assets (1)(2)
|
|
$
|
5,437,214
|
|
|
$
|
5,454,609
|
|
|
LIABILITIES AND EQUITY (3):
|
|
|
|
|
||||
|
Current liabilities
|
|
$
|
607,035
|
|
|
$
|
837,577
|
|
|
Noncurrent liabilities
|
|
$
|
3,501,072
|
|
|
$
|
3,374,143
|
|
|
Class D Preferred Units
|
|
$
|
544,151
|
|
|
$
|
537,283
|
|
|
|
|
(1)
|
Excludes $1.7 million of net intercompany payables and $70.0 million of net intercompany receivables due from/to NGL Energy Partners LP (parent) and the Guarantor Subsidiaries to/from the non-guarantor subsidiaries at June 30, 2020 and March 31, 2020, respectively.
|
|
(2)
|
Includes $2.5 billion and $2.5 billion of goodwill and intangible assets at June 30, 2020 and March 31, 2020, respectively.
|
|
(3)
|
There are no noncontrolling interests held at the co-issuers or Guarantor Subsidiaries for either period presented.
|
|
|
|
NGL Energy Partners LP (Parent) and Guarantor Subsidiaries
|
||||||
|
|
|
Three Months Ended
June 30, 2020 |
|
Twelve Months Ended
March 31, 2020 |
||||
|
|
|
(in thousands)
|
||||||
|
Revenues
|
|
$
|
841,719
|
|
|
$
|
7,548,659
|
|
|
Operating loss
|
|
$
|
(9,765
|
)
|
|
$
|
(16,210
|
)
|
|
Loss from continuing operations
|
|
$
|
(32,690
|
)
|
|
$
|
(193,375
|
)
|
|
Net loss (1)
|
|
$
|
(34,176
|
)
|
|
$
|
(411,610
|
)
|
|
Loss from continuing operations allocated to common unitholders
|
|
$
|
(54,739
|
)
|
|
$
|
(380,076
|
)
|
|
|
|
(1)
|
There are no noncontrolling interests held at the co-issuers or Guarantor Subsidiaries for either period presented.
|
|
|
Increase
(Decrease)
To Fair Value
|
||
|
Crude oil (Crude Oil Logistics segment)
|
$
|
(6,705
|
)
|
|
Crude oil (Water Solutions segment)
|
$
|
(2,492
|
)
|
|
Propane (Liquids and Refined Products segment)
|
$
|
2,359
|
|
|
Butane (Liquids and Refined Products segment)
|
$
|
(1,079
|
)
|
|
Refined Products (Liquids and Refined Products segment)
|
$
|
(613
|
)
|
|
Other Products (Liquids and Refined Products segment)
|
$
|
(179
|
)
|
|
Canadian dollars (Liquids and Refined Products segment)
|
$
|
287
|
|
|
Item 4.
|
Controls and Procedures
|
|
Exhibit Number
|
|
Exhibit
|
|
4.1*
|
|
|
|
4.2*
|
|
|
|
4.3*
|
|
|
|
10.1
|
|
|
|
10.2
|
|
|
|
22.1*
|
|
|
|
31.1*
|
|
|
|
31.2*
|
|
|
|
32.1*
|
|
|
|
32.2*
|
|
|
|
101.INS**
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
101.SCH**
|
|
Inline XBRL Schema Document
|
|
101.CAL**
|
|
Inline XBRL Calculation Linkbase Document
|
|
101.DEF**
|
|
Inline XBRL Definition Linkbase Document
|
|
101.LAB**
|
|
Inline XBRL Label Linkbase Document
|
|
101.PRE**
|
|
Inline XBRL Presentation Linkbase Document
|
|
104
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
|
|
|
|
*
|
Exhibits filed with this report.
|
|
**
|
The following documents are formatted in Inline XBRL (Extensible Business Reporting Language): (i) Unaudited Condensed Consolidated Balance Sheets at June 30, 2020 and March 31, 2020, (ii) Unaudited Condensed Consolidated Statements of Operations for the three months ended June 30, 2020 and 2019, (iii) Unaudited Condensed Consolidated Statements of Comprehensive (Loss) Income for the three months ended June 30, 2020 and 2019, (iv) Unaudited Condensed Consolidated Statements of Changes in Equity for the three months ended June 30, 2020 and 2019, (v) Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended June 30, 2020 and 2019, and (vi) Notes to Unaudited Condensed Consolidated Financial Statements.
|
|
|
NGL ENERGY PARTNERS LP
|
||
|
|
|
|
|
|
|
By:
|
NGL Energy Holdings LLC, its general partner
|
|
|
|
|
|
|
|
Date: August 10, 2020
|
|
By:
|
/s/ H. Michael Krimbill
|
|
|
|
|
H. Michael Krimbill
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
Date: August 10, 2020
|
|
By:
|
/s/ Robert W. Karlovich III
|
|
|
|
|
Robert W. Karlovich III
|
|
|
|
|
Chief Financial Officer
|
|
1.
|
CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.
|
|
2.
|
AGREEMENT TO GUARANTEE. Each Guaranteeing Subsidiary hereby agrees to provide an unconditional Guarantee on the terms and subject to the conditions set forth in the Note Guarantee and in the Indenture including but not limited to Article 10 thereof.
|
|
3.
|
EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees that the Note Guarantees shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Note Guarantee.
|
|
4.
|
NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, partner, employee, incorporator, organizer, manager, unitholder or other owner of Capital Stock (as defined in the Indenture) of a Guaranteeing Subsidiary or agent thereof, as such, shall have any liability for any obligations of the Issuers, the Guarantors, or such Guaranteeing Subsidiary or any other Subsidiary of an Issuer providing a Note Guarantee under the Notes, any Note Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of the Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy.
|
|
5.
|
NEW YORK LAW TO GOVERN. THE LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.
|
|
6.
|
COUNTERPARTS. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. The exchange of signed copies of this Supplemental Indenture by facsimile transmission or emailed portable document format (pdf) shall constitute effective execution and delivery of this Supplemental Indenture as to the parties hereto and such copies may be used in lieu of the original Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or portable document format (pdf) shall be deemed to be their original signatures for all purposes other than authentication of Notes by the Trustee.
|
|
7.
|
EFFECT OF HEADINGS. The Section headings herein are for convenience only and shall not affect the construction hereof.
|
|
8.
|
THE TRUSTEE. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by each Guaranteeing Subsidiary and the Issuers
|
|
By:
|
/s/ Robert W. Karlovich III
|
|
Name:
|
Robert W. Karlovich III
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|
|
By:
|
/s/ Robert W. Karlovich III
|
|
Name:
|
Robert W. Karlovich III
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|
|
By:
|
/s/ Robert W. Karlovich III
|
|
Name:
|
Robert W. Karlovich III
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|
|
By:
|
/s/ Robert W. Karlovich III
|
|
Name:
|
Robert W. Karlovich III
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|
|
By:
|
/s/ Michael K. Herberger
|
|
Name:
|
Michael K. Herberger
|
|
Title:
|
Vice President
|
|
Guaranteeing Subsidiaries
|
|
|
Name
|
Jurisdiction and Form of Organization
|
|
Disposals Operating, LLC
|
Delaware limited liability company
|
|
GSR Northeast Terminals LLC
|
Delaware limited liability company
|
|
NGL Energy GP LLC
|
Delaware limited liability company
|
|
NGL Recycling Services, LLC
|
Delaware limited liability company
|
|
NGL Waste Services, LLC
|
New Mexico limited liability company
|
|
1.
|
CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.
|
|
2.
|
AGREEMENT TO GUARANTEE. Each Guaranteeing Subsidiary hereby agrees to provide an unconditional Guarantee on the terms and subject to the conditions set forth in the Note Guarantee and in the Indenture including but not limited to Article 10 thereof.
|
|
3.
|
EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees that the Note Guarantees shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Note Guarantee.
|
|
4.
|
NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, partner, employee, incorporator, organizer, manager, unitholder or other owner of Capital Stock (as defined in the Indenture) of a Guaranteeing Subsidiary or agent thereof, as such, shall have any liability for any obligations of the Issuers, the Guarantors, or such Guaranteeing Subsidiary or any other Subsidiary of an Issuer providing a Note Guarantee under the Notes, any Note Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of the Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy.
|
|
5.
|
NEW YORK LAW TO GOVERN. THE LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.
|
|
6.
|
COUNTERPARTS. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. The exchange of signed copies of this Supplemental Indenture by facsimile transmission or emailed portable document format (pdf) shall constitute effective execution and delivery of this Supplemental Indenture as to the parties hereto and such copies may be used in lieu of the original Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or portable document format (pdf) shall be deemed to be their original signatures for all purposes other than authentication of Notes by the Trustee.
|
|
7.
|
EFFECT OF HEADINGS. The Section headings herein are for convenience only and shall not affect the construction hereof.
|
|
8.
|
THE TRUSTEE. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by each Guaranteeing Subsidiary and the Issuers.
|
|
By:
|
/s/ Robert W. Karlovich III
|
|
Name:
|
Robert W. Karlovich III
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|
|
By:
|
/s/ Robert W. Karlovich III
|
|
Name:
|
Robert W. Karlovich III
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|
|
By:
|
/s/ Robert W. Karlovich III
|
|
Name:
|
Robert W. Karlovich III
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|
|
By:
|
/s/ Robert W. Karlovich III
|
|
Name:
|
Robert W. Karlovich III
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|
|
By:
|
/s/ Michael K. Herberger
|
|
Name:
|
Michael K. Herberger
|
|
Title:
|
Vice President
|
|
Guaranteeing Subsidiaries
|
|
|
Name
|
Jurisdiction and Form of Organization
|
|
Disposals Operating, LLC
|
Delaware limited liability company
|
|
GSR Northeast Terminals LLC
|
Delaware limited liability company
|
|
NGL Energy GP LLC
|
Delaware limited liability company
|
|
NGL Recycling Services, LLC
|
Delaware limited liability company
|
|
NGL Waste Services, LLC
|
New Mexico limited liability company
|
|
1.
|
CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.
|
|
2.
|
AGREEMENT TO GUARANTEE. Each Guaranteeing Subsidiary hereby agrees to provide an unconditional Guarantee on the terms and subject to the conditions set forth in the Note Guarantee and in the Indenture including but not limited to Article 10 thereof.
|
|
3.
|
EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees that the Note Guarantees shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Note Guarantee.
|
|
4.
|
NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, partner, employee, incorporator, organizer, manager, unitholder or other owner of Capital Stock (as defined in the Indenture) of a Guaranteeing Subsidiary or agent thereof, as such, shall have any liability for any obligations of the Issuers, the Guarantors, or such Guaranteeing Subsidiary or any other Subsidiary of an Issuer providing a Note Guarantee under the Notes, any Note Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of the Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy.
|
|
5.
|
NEW YORK LAW TO GOVERN. THE LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.
|
|
6.
|
COUNTERPARTS. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. The exchange of signed copies of this Supplemental Indenture by facsimile transmission or emailed portable document format (pdf) shall constitute effective execution and delivery of this Supplemental Indenture as to the parties hereto and such copies may be used in lieu of the original Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or portable document format (pdf) shall be deemed to be their original signatures for all purposes other than authentication of Notes by the Trustee.
|
|
7.
|
EFFECT OF HEADINGS. The Section headings herein are for convenience only and shall not affect the construction hereof.
|
|
8.
|
THE TRUSTEE. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by each Guaranteeing Subsidiary and the Issuers.
|
|
By:
|
/s/ Robert W. Karlovich III
|
|
Name:
|
Robert W. Karlovich III
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|
|
By:
|
/s/ Robert W. Karlovich III
|
|
Name:
|
Robert W. Karlovich III
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|
|
By:
|
/s/ Robert W. Karlovich III
|
|
Name:
|
Robert W. Karlovich III
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|
|
By:
|
/s/ Robert W. Karlovich III
|
|
Name:
|
Robert W. Karlovich III
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|
|
By:
|
/s/ Michael K. Herberger
|
|
Name:
|
Michael K. Herberger
|
|
Title:
|
Vice President
|
|
Guaranteeing Subsidiaries
|
|
|
Name
|
Jurisdiction and Form of Organization
|
|
Disposals Operating, LLC
|
Delaware limited liability company
|
|
GSR Northeast Terminals LLC
|
Delaware limited liability company
|
|
NGL Energy GP LLC
|
Delaware limited liability company
|
|
NGL Recycling Services, LLC
|
Delaware limited liability company
|
|
NGL Waste Services, LLC
|
New Mexico limited liability company
|
|
Entity
|
|
Jurisdiction of
Organization
|
|
NGL Energy Partners LP
Senior Unsecured Notes
|
|
NGL Energy Partners LP
|
|
Delaware
|
|
Issuer
|
|
NGL Energy Finance Corp.
|
|
Delaware
|
|
Issuer
|
|
AntiCline Disposal, LLC
|
|
Wyoming
|
|
Guarantor
|
|
AWR Disposal, LLC
|
|
Delaware
|
|
Guarantor
|
|
Centennial Energy, LLC
|
|
Colorado
|
|
Guarantor
|
|
Centennial Gas Liquids ULC
|
|
Alberta
|
|
Guarantor
|
|
Choya Operating, LLC
|
|
Texas
|
|
Guarantor
|
|
DACO Permian 76, LLC
|
|
Texas
|
|
Guarantor
|
|
Disposals Operating, LLC
|
|
Delaware
|
|
Guarantor
|
|
GGCOF HEP Blocker, LLC
|
|
Delaware
|
|
Guarantor
|
|
GGCOF HEP Blocker II, LLC
|
|
Delaware
|
|
Guarantor
|
|
Grand Mesa Pipeline, LLC
|
|
Delaware
|
|
Guarantor
|
|
GSR Northeast Terminals LLC
|
|
Delaware
|
|
Guarantor
|
|
HEP Intermediate Holdco, LLC
|
|
Delaware
|
|
Guarantor
|
|
HEP Intermediate Holdco Sub, LLC
|
|
Delaware
|
|
Guarantor
|
|
HEP Operations Holdings, LLC
|
|
Delaware
|
|
Guarantor
|
|
HEP Operations, LLC
|
|
Delaware
|
|
Guarantor
|
|
HEP Shalewater Solutions, LLC
|
|
Delaware
|
|
Guarantor
|
|
Hillstone DACO 76, LLC
|
|
Delaware
|
|
Guarantor
|
|
Hillstone DACO Permian, LLC
|
|
Delaware
|
|
Guarantor
|
|
Hillstone Environmental Partners, LLC
|
|
Delaware
|
|
Guarantor
|
|
Hillstone Permian Adams, LLC
|
|
Delaware
|
|
Guarantor
|
|
Hillstone Permian Arthur, LLC
|
|
Delaware
|
|
Guarantor
|
|
Hillstone Permian Cleveland, LLC
|
|
Delaware
|
|
Guarantor
|
|
Hillstone Permian Fortress, LLC
|
|
Texas
|
|
Guarantor
|
|
Hillstone Permian Garfield, LLC
|
|
Delaware
|
|
Guarantor
|
|
Hillstone Permian Hamilton, LLC
|
|
Delaware
|
|
Guarantor
|
|
Hillstone Permian Harrison, LLC
|
|
Delaware
|
|
Guarantor
|
|
Hillstone Permian Hayes, LLC
|
|
Delaware
|
|
Guarantor
|
|
Hillstone Permian Knox, LLC
|
|
Delaware
|
|
Guarantor
|
|
Hillstone Permian Madison, LLC
|
|
Delaware
|
|
Guarantor
|
|
Hillstone Permian McKinley, LLC
|
|
Delaware
|
|
Guarantor
|
|
Hillstone Permian Monroe, LLC
|
|
Delaware
|
|
Guarantor
|
|
Hillstone Permian Pipeline, LLC
|
|
Delaware
|
|
Guarantor
|
|
Hillstone Permian Pipeline Loving BR, LLC
|
|
Delaware
|
|
Guarantor
|
|
Hillstone Permian Poker Lake, LLC
|
|
Delaware
|
|
Guarantor
|
|
Hillstone Permian Rattlesnake, LLC
|
|
Delaware
|
|
Guarantor
|
|
Hillstone Permian Reagan, LLC
|
|
Delaware
|
|
Guarantor
|
|
Hillstone Permian Roosevelt, LLC
|
|
Delaware
|
|
Guarantor
|
|
Hillstone Permian Shultz, LLC
|
|
Delaware
|
|
Guarantor
|
|
Hillstone Permian St. Lucia, LLC
|
|
Delaware
|
|
Guarantor
|
|
Hillstone Permian Taft, LLC
|
|
Delaware
|
|
Guarantor
|
|
Entity
|
|
Jurisdiction of
Organization
|
|
NGL Energy Partners LP
Senior Unsecured Notes
|
|
Hillstone Permian Wilson, LLC
|
|
Delaware
|
|
Guarantor
|
|
Loving Fortress, LLC
|
|
Texas
|
|
Guarantor
|
|
NGL Crude Cushing, LLC
|
|
Oklahoma
|
|
Guarantor
|
|
NGL Crude Logistics, LLC
|
|
Delaware
|
|
Guarantor
|
|
NGL Crude Terminals, LLC
|
|
Delaware
|
|
Guarantor
|
|
NGL Crude Transportation, LLC
|
|
Colorado
|
|
Guarantor
|
|
NGL Delaware Basin Holdings, LLC
|
|
Delaware
|
|
Guarantor
|
|
NGL Energy Equipment LLC
|
|
Colorado
|
|
Guarantor
|
|
NGL Energy GP LLC
|
|
Delaware
|
|
Guarantor
|
|
NGL Energy Holdings II, LLC
|
|
Delaware
|
|
Guarantor
|
|
NGL Energy Logistics, LLC
|
|
Delaware
|
|
Guarantor
|
|
NGL Energy Operating LLC
|
|
Delaware
|
|
Guarantor
|
|
NGL Liquids, LLC
|
|
Delaware
|
|
Guarantor
|
|
NGL Marine, LLC
|
|
Texas
|
|
Guarantor
|
|
NGL Milan Investments, LLC
|
|
Colorado
|
|
Guarantor
|
|
NGL Recycling Services, LLC
|
|
Delaware
|
|
Guarantor
|
|
NGL South Ranch, Inc.
|
|
New Mexico
|
|
Guarantor
|
|
NGL Supply Terminal Company, LLC
|
|
Delaware
|
|
Guarantor
|
|
NGL Supply Wholesale, LLC
|
|
Delaware
|
|
Guarantor
|
|
NGL TM LLC
|
|
Delaware
|
|
Guarantor
|
|
NGL Waste Services, LLC
|
|
New Mexico
|
|
Guarantor
|
|
NGL Water Pipelines, LLC
|
|
Texas
|
|
Guarantor
|
|
NGL Water Solutions DJ, LLC
|
|
Colorado
|
|
Guarantor
|
|
NGL Water Solutions Eagle Ford, LLC
|
|
Delaware
|
|
Guarantor
|
|
NGL Water Solutions, LLC
|
|
Colorado
|
|
Guarantor
|
|
NGL Water Solutions Orla-SWD, LLC
|
|
Delaware
|
|
Guarantor
|
|
NGL Water Solutions Permian, LLC
|
|
Colorado
|
|
Guarantor
|
|
Red Rock Midstream, LLC
|
|
Delaware
|
|
Guarantor
|
|
Sand Lake Midstream, LLC
|
|
Delaware
|
|
Guarantor
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of NGL Energy Partners LP;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Date: August 10, 2020
|
/s/ H. Michael Krimbill
|
|
|
H. Michael Krimbill
|
|
|
Chief Executive Officer of NGL Energy Holdings LLC, the general partner of NGL Energy Partners LP
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of NGL Energy Partners LP;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Date: August 10, 2020
|
/s/ Robert W. Karlovich III
|
|
|
Robert W. Karlovich III
|
|
|
Chief Financial Officer of NGL Energy Holdings LLC, the general partner of NGL Energy Partners LP
|
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.
|
|
Date: August 10, 2020
|
/s/ H. Michael Krimbill
|
|
|
H. Michael Krimbill
|
|
|
Chief Executive Officer of NGL Energy Holdings LLC, the general partner of NGL Energy Partners LP
|
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.
|
|
Date: August 10, 2020
|
/s/ Robert W. Karlovich III
|
|
|
Robert W. Karlovich III
|
|
|
Chief Financial Officer of NGL Energy Holdings LLC, the general partner of NGL Energy Partners LP
|