NGL Energy Partners LP Announces Third Quarter Fiscal 2023 Financial Results
NGL Energy Partners LP (NYSE:NGL) (“NGL,” “our,” “we,” or the “Partnership”) today reported its third quarter Fiscal 2023 financial results. Highlights include:
Net income for the third quarter of Fiscal 2023 of $59.0 million, compared to a net loss of $19.0 million for the third quarter of Fiscal 2022; Net income for the first nine months of Fiscal 2023 of $85.7 million, compared to a net loss of $154.7 million for the comparable period of Fiscal 2022 Adjusted EBITDA(1) for the third quarter of Fiscal 2023 of $193.3 million, compared to $147.7 million for the third quarter of Fiscal 2022; Adjusted EBITDA for the first nine months of Fiscal 2023 of $459.4 million, compared to $385.1 million for the comparable period of 2022 Operating income for the Water Solutions segment of $59.7 million for the third quarter of Fiscal 2023, compared to $19.9 million for the third quarter of Fiscal 2022 Record Water Solutions’ quarterly Adjusted EBITDA(1) of $121.7 million for the third quarter of Fiscal 2023, a 47.1% increase compared to the third quarter of Fiscal 2022 and a 16.2% increase over the immediately preceding fiscal quarter In the face of significant inflationary pressure, Water Solutions managed to reduce operating expense to $0.25 per barrel versus $0.27 per barrel in the immediately preceding fiscal quarter Record produced water volumes processed of approximately 2.43 million barrels per day during the third quarter of Fiscal 2023, growing 31.9% from the same period in the prior year and 7.1% over the immediately preceding fiscal quarter Increasing Water Solutions Adjusted EBITDA(2) guidance from $430 million plus to $440 million plus for Fiscal 2023 Reduced $98.1 million in principal on unsecured notes and equipment financing note in the quarter Anticipate all 2023 unsecured notes to be repaid no later than June 30, 2023“Our Water Solutions segment continues to see strong disposal volume and skim oil growth, achieving record Adjusted EBITDA(1) and water volumes processed in the quarter. This strong performance plus the return of working capital has allowed us to lean into the repurchase of our 2023 notes, $97.5 million in the current quarter. The current remaining balance is approximately $203 million, and our plan is to call the remaining 2023 notes no later than June 30, 2023. Paying off the 2023 notes is a key strategic goal as we look to drive down absolute debt and further reduce leverage. We are increasing guidance for our Water Solutions' Adjusted EBITDA(2) from over $430 million to over $440 million for full year Fiscal 2023 and maintaining $630 million plus consolidated Adjusted EBITDA(2) guidance. Due to the increasing activity and volumes in the Delaware Basin, we are adjusting our capital expenditure guidance to a range of $115 million - $125 million in order to keep up with our customers growth,” stated Mike Krimbill, NGL’s CEO. “As we’ve discussed before, we continue to work on sales of non-core assets in the fourth quarter that will continue to drive leverage lower,” Krimbill concluded.
_____________________________
(1) See the “Non-GAAP Financial Measures” section of this release for the definition of Adjusted EBITDA (as used herein) and a discussion of this non-GAAP financial measure.
(2) Certain of the forward-looking financial measures are provided on a non-GAAP basis. A reconciliation of forward-looking financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP is potentially misleading and not practical given the difficulty of projecting event driven transactional and other non-core operating items in any future period. The magnitude of these items, however, may be significant.
Quarterly Results of Operations
The following table summarizes operating income (loss) and Adjusted EBITDA(1) from continuing operations by reportable segment for the periods indicated:
Quarter Ended
December 31, 2022
December 31, 2021
Operating
Income (Loss)
Adjusted
EBITDA(1)
Operating
Income (Loss)
Adjusted
EBITDA(1)
(in thousands)
Water Solutions
$
59,721
$
121,712
$
19,851
$
82,744
Crude Oil Logistics
35,096
33,260
21,291
29,764
Liquids Logistics
20,513
18,763
23,158
47,979
Corporate and Other
(12,660
)
19,521
(15,190
)
(12,747
)
Total
$
102,670
$
193,256
$
49,110
$
147,740
Water Solutions
Operating income for the Water Solutions segment increased $39.9 million for the quarter ended December 31, 2022, compared to the quarter ended December 31, 2021. The Partnership processed approximately 2.43 million barrels of produced water per day during the quarter ended December 31, 2022, a 31.9% increase when compared to approximately 1.84 million barrels of water per day processed during the quarter ended December 31, 2021. This increase was due to higher production volumes (and associated produced water) primarily in the Delaware Basin driven by higher crude oil prices and completion activity as well as higher fees charged for spot volumes. The Partnership also sold approximately 168,000 barrels per day of produced and recycled water for use in our customers’ completion activities.
Revenues from recovered skim oil totaled $30.3 million for the quarter ended December 31, 2022, an increase of $12.4 million from the prior year period. This increase was due to higher volumes of skim oil barrels sold due to an increase in produced water volumes processed as well as higher realized crude oil prices received from the sale of skim oil barrels. Additionally, an increase in the number of wells completed in our area of operations during the period with increased flowback activity resulted in higher skim oil volumes per barrel of produced water processed.
Operating expenses in the Water Solutions segment decreased to $0.25 per produced barrel processed compared to $0.26 per produced barrel processed in the comparative quarter last year primarily due to the increase in produced water processed. Three of the Water Solutions segment’s largest variable expenses, utility, royalty and chemical expenses, were not (and are not expected to be) impacted by the rise in inflation due to negotiated long-term utility contracts with fixed rates, royalty contracts with no escalation clauses and a fixed chemical expense per barrel with our chemical provider.
Crude Oil Logistics
Operating income for the Crude Oil Logistics segment increased $13.8 million for the quarter ended December 31, 2022, compared to the quarter ended December 31, 2021. The increase was due to higher product margins compared to the prior year period and an increase in net derivative gains of $7.7 million. Product margins increased due to higher contracted rates with certain producers as well as increased differentials on certain other sales contracts. Operating and general and administrative expenses declined by $2.3 million, primarily due to the sale of our trucking business during our fourth quarter of the prior year. In addition, during the prior year quarter, we recorded an impairment charge of $2.2 million due to damage caused by Hurricane Ida to one of our Gulf Coast terminals. During the three months ended December 31, 2022, physical volumes on the Grand Mesa Pipeline averaged approximately 77,000 barrels per day, compared to approximately 83,000 barrels per day for the three months ended December 31, 2021. Overall production in the DJ Basin continues to be negatively impacted by producer permitting issues.
Liquids Logistics
Operating income for the Liquids Logistics segment decreased $2.6 million for the quarter ended December 31, 2022, compared to the quarter ended December 31, 2021. Our Butane product margins (excluding the impact of derivatives) were lower as product purchased earlier in the season continues to compete with product purchased in a discounted market, resulting in our product being more expensive. Propane results are below expectations partially due to warmer than normal winter temperatures. Product margins for refined products also increased as we continue to be well positioned from a supply and inventory perspective in certain markets experiencing tight supply. For the current quarter, losses from net derivative activity for all products in this segment increased by $6.4 million, compared to the prior year quarter.
Capitalization and Liquidity
Total liquidity (cash plus available capacity on our asset-based revolving credit facility (“ABL Facility”)) was approximately $280.1 million as of December 31, 2022. Borrowings on the Partnership’s ABL Facility totaled approximately $156.0 million. The increase from March 31, 2022 was primarily due to increases in working capital balances driven by increased inventory volumes and higher net account receivable balances.
The Partnership is in compliance with all of its debt covenants and has no significant debt maturities before November 2023. The Partnership expects to pay off the remaining outstanding 2023 Notes no later than June 30, 2023 using cash flows from operations, and if needed, borrowings under our ABL Facility. Proceeds generated from other cash flow positive initiatives currently being pursued, such as sales of non-core assets, may also be used for additional debt reductions.
Third Quarter Conference Call Information
A conference call to discuss NGL’s results of operations is scheduled for 4:30 pm Central Time on Thursday, February 9, 2023. Analysts, investors, and other interested parties may join the webcast via the event link: https://www.webcaster4.com/Webcast/Page/2808/47555 or by dialing (888) 506-0062 and providing access code: 893513. An archived audio replay of the call will be available for 14 days, which can be accessed by dialing (877) 481-4010 and providing replay passcode 47555.
Non-GAAP Financial Measures
NGL defines EBITDA as net income (loss) attributable to NGL Energy Partners LP, plus interest expense, income tax expense (benefit), and depreciation and amortization expense. NGL defines Adjusted EBITDA as EBITDA excluding net unrealized gains and losses on derivatives, lower of cost or net realizable value adjustments, gains and losses on disposal or impairment of assets, gains and losses on early extinguishment of liabilities, equity-based compensation expense, acquisition expense, revaluation of liabilities, certain legal settlements and other. NGL also includes in Adjusted EBITDA certain inventory valuation adjustments related to certain refined products businesses within NGL’s Liquids Logistics segment as discussed below. EBITDA and Adjusted EBITDA should not be considered as alternatives to net income (loss), income (loss) before income taxes, cash flows from operating activities, or any other measure of financial performance calculated in accordance with GAAP, as those items are used to measure operating performance, liquidity or the ability to service debt obligations. NGL believes that EBITDA provides additional information to investors for evaluating NGL’s ability to make quarterly distributions to NGL’s unitholders and is presented solely as a supplemental measure. NGL believes that Adjusted EBITDA provides additional information to investors for evaluating NGL’s financial performance without regard to NGL’s financing methods, capital structure and historical cost basis. Further, EBITDA and Adjusted EBITDA, as NGL defines them, may not be comparable to EBITDA, Adjusted EBITDA, or similarly titled measures used by other entities.
Other than for certain businesses within NGL’s Liquids Logistics segment, for purposes of the Adjusted EBITDA calculation, NGL makes a distinction between realized and unrealized gains and losses on derivatives. During the period when a derivative contract is open, NGL records changes in the fair value of the derivative as an unrealized gain or loss. When a derivative contract matures or is settled, NGL reverses the previously recorded unrealized gain or loss and records a realized gain or loss. NGL does not draw such a distinction between realized and unrealized gains and losses on derivatives of certain businesses within NGL’s Liquids Logistics segment. The primary hedging strategy of these businesses is to hedge against the risk of declines in the value of inventory over the course of the contract cycle, and many of the hedges cover extended periods of time. The “inventory valuation adjustment” row in the reconciliation table reflects the difference between the market value of the inventory of these businesses at the balance sheet date and its cost. NGL includes this in Adjusted EBITDA because the unrealized gains and losses associated with derivative contracts associated with the inventory of this segment, which are intended primarily to hedge inventory holding risk and are included in net income, also affect Adjusted EBITDA. In NGL’s Crude Oil Logistics segment, they purchase certain crude oil barrels using the West Texas Intermediate (“WTI”) calendar month average (“CMA”) price and sell the crude oil barrels using the WTI CMA price plus the Argus CMA Differential Roll Component (“CMA Differential Roll”) per NGL’s contracts. To eliminate the volatility of the CMA Differential Roll, NGL entered into derivative instrument positions in January 2021 to secure a margin of approximately $0.20 per barrel on 1.5 million barrels per month from May 2021 through December 2023. Due to the nature of these positions, the cash flow and earnings recognized on a GAAP basis will differ from period to period depending on the current crude oil price and future estimated crude oil price which are valued utilizing third-party market quoted prices. NGL is recognizing in Adjusted EBITDA the gains and losses from the derivative instrument positions entered into in January 2021 to properly align with the physical margin NGL is hedging each month through the term of this transaction. This representation aligns with management’s evaluation of the transaction.
Distributable Cash Flow is defined as Adjusted EBITDA minus maintenance capital expenditures, income tax expense, cash interest expense, preferred unit distributions and other. Maintenance capital expenditures represent capital expenditures necessary to maintain the Partnership’s operating capacity. For the CMA Differential Roll transaction, as discussed above, we have included an adjustment to Distributable Cash Flow to reflect, in the period for which they relate, the actual cash flows for the positions that settled that are not being recognized in Adjusted EBITDA. Distributable Cash Flow is a performance metric used by senior management to compare cash flows generated by the Partnership (excluding growth capital expenditures and prior to the establishment of any retained cash reserves by the Board of Directors) to the cash distributions expected to be paid to unitholders. Using this metric, management can quickly compute the coverage ratio of estimated cash flows to planned cash distributions. This financial measure also is important to investors as an indicator of whether the Partnership is generating cash flow at a level that can sustain, or support an increase in, quarterly distribution rates. Actual distribution amounts are set by the Board of Directors.
We do not provide a reconciliation for non-GAAP estimates on a forward-looking basis where we are unable to provide a meaningful calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing or amount of various items that would impact the most directly comparable forward-looking U.S. GAAP financial measure that have not yet occurred, are out of the Partnership’s control and/or cannot be reasonably predicted. Forward-looking non-GAAP financial measures provided without the most directly comparable U.S. GAAP financial measures may vary materially from the corresponding U.S. GAAP financial measures.
Forward-Looking Statements
This press release includes “forward-looking statements.” All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Actual results could vary significantly from those expressed or implied in such statements and are subject to a number of risks and uncertainties. While NGL believes such forward-looking statements are reasonable, NGL cannot assure they will prove to be correct. The forward-looking statements involve risks and uncertainties that affect operations, financial performance, and other factors as discussed in filings with the Securities and Exchange Commission. Other factors that could impact any forward-looking statements are those risks described in NGL’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other public filings. You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading “Risk Factors.” NGL undertakes no obligation to publicly update or revise any forward-looking statements except as required by law.
NGL provides Adjusted EBITDA guidance that does not include certain charges and costs, which in future periods are generally expected to be similar to the kinds of charges and costs excluded from Adjusted EBITDA in prior periods, such as income taxes, interest and other non-operating items, depreciation and amortization, net unrealized gains and losses on derivatives, lower of cost or net realizable value adjustments, gains and losses on disposal or impairment of assets, gains and losses on early extinguishment of liabilities, equity-based compensation expense, acquisition expense, revaluation of liabilities and items that are unusual in nature or infrequently occurring. The exclusion of these charges and costs in future periods will have a significant impact on the Partnership’s Adjusted EBITDA, and the Partnership is not able to provide a reconciliation of its Adjusted EBITDA guidance to net income (loss) without unreasonable efforts due to the uncertainty and variability of the nature and amount of these future charges and costs and the Partnership believes that such reconciliation, if possible, would imply a degree of precision that would be potentially confusing or misleading to investors.
About NGL Energy Partners LP
NGL Energy Partners LP, a Delaware limited partnership, is a diversified midstream energy company that transports, stores, markets and provides other logistics services for crude oil, natural gas liquids and other products and transports, treats and disposes of produced water generated as part of the oil and natural gas production process.
For further information, visit the Partnership’s website at www.nglenergypartners.com.
NGL ENERGY PARTNERS LP AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
(in Thousands, except unit amounts)
December 31, 2022
March 31, 2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
4,534
$
3,822
Accounts receivable-trade, net of allowance for expected credit losses of $2,455 and $2,626, respectively
1,129,294
1,123,163
Accounts receivable-affiliates
10,257
8,591
Inventories
238,073
251,277
Prepaid expenses and other current assets
135,980
159,486
Total current assets
1,518,138
1,546,339
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $1,000,765 and $887,006, respectively
2,400,508
2,462,390
GOODWILL
744,439
744,439
INTANGIBLE ASSETS, net of accumulated amortization of $563,075 and $507,285, respectively
1,078,631
1,135,354
INVESTMENTS IN UNCONSOLIDATED ENTITIES
22,769
21,897
OPERATING LEASE RIGHT-OF-USE ASSETS
85,576
114,124
OTHER NONCURRENT ASSETS
64,030
45,802
Total assets
$
5,914,091
$
6,070,345
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable-trade
$
952,506
$
1,084,837
Accounts payable-affiliates
65
73
Accrued expenses and other payables
174,400
140,719
Advance payments received from customers
20,957
7,934
Current maturities of long-term debt
303,788
2,378
Operating lease obligations
32,883
41,261
Total current liabilities
1,484,599
1,277,202
LONG-TERM DEBT, net of debt issuance costs of $32,986 and $42,988, respectively, and current maturities
2,921,174
3,350,463
OPERATING LEASE OBLIGATIONS
53,518
72,784
OTHER NONCURRENT LIABILITIES
103,378
104,346
CLASS D 9.00% PREFERRED UNITS, 600,000 and 600,000 preferred units issued and outstanding, respectively
551,097
551,097
EQUITY:
General partner, representing a 0.1% interest, 131,453 and 130,827 notional units, respectively
(52,484
)
(52,478
)
Limited partners, representing a 99.9% interest, 131,321,742 and 130,695,970 common units issued and outstanding, respectively
488,221
401,486
Class B preferred limited partners, 12,585,642 and 12,585,642 preferred units issued and outstanding, respectively
305,468
305,468
Class C preferred limited partners, 1,800,000 and 1,800,000 preferred units issued and outstanding, respectively
42,891
42,891
Accumulated other comprehensive loss
(439
)
(308
)
Noncontrolling interests
16,668
17,394
Total equity
800,325
714,453
Total liabilities and equity
$
5,914,091
$
6,070,345
NGL ENERGY PARTNERS LP AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(in Thousands, except unit and per unit amounts)
Three Months Ended December 31,
Nine Months Ended December 31,
2022
2021
2022
2021
REVENUES:
Water Solutions
$
180,242
$
130,653
$
511,231
$
397,089
Crude Oil Logistics
531,613
607,203
1,971,767
1,715,657
Liquids Logistics
1,427,385
1,434,020
4,163,072
3,301,922
Total Revenues
2,139,240
2,171,876
6,646,070
5,414,668
COST OF SALES:
Water Solutions
2,534
5,030
13,679
21,791
Crude Oil Logistics
471,891
556,531
1,808,460
1,591,877
Liquids Logistics
1,385,943
1,388,760
4,057,360
3,187,039
Total Cost of Sales
1,860,368
1,950,321
5,879,499
4,800,707
OPERATING COSTS AND EXPENSES:
Operating
81,353
72,807
237,371
207,610
General and administrative
17,216
18,925
50,601
46,149
Depreciation and amortization
69,327
68,480
204,105
222,145
Loss on disposal or impairment of assets, net
8,306
12,233
15,791
93,463
Operating Income
102,670
49,110
258,703
44,594
OTHER INCOME (EXPENSE):
Equity in earnings of unconsolidated entities
1,213
119
3,094
765
Interest expense
(75,920
)
(68,379
)
(211,528
)
(204,004
)
Gain on early extinguishment of liabilities, net
2,667
9
6,808
1,131
Other income, net
28,100
24
28,731
2,003
Income (Loss) Before Income Taxes
58,730
(19,117
)
85,808
(155,511
)
INCOME TAX BENEFIT (EXPENSE)
252
135
(113
)
820
Net Income (Loss)
58,982
(18,982
)
85,695
(154,691
)
LESS: NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS
(448
)
63
(790
)
(705
)
NET INCOME (LOSS) ATTRIBUTABLE TO NGL ENERGY PARTNERS LP
$
58,534
$
(18,919
)
$
84,905
$
(155,396
)
NET INCOME (LOSS) ALLOCATED TO COMMON UNITHOLDERS - BASIC
$
26,007
$
(45,233
)
$
(5,571
)
$
(232,361
)
NET INCOME (LOSS) ALLOCATED TO COMMON UNITHOLDERS - DILUTED
$
26,123
$
(45,233
)
$
(5,571
)
$
(232,361
)
BASIC INCOME (LOSS) PER COMMON UNIT
$
0.20
$
(0.35
)
$
(0.04
)
$
(1.79
)
DILUTED INCOME (LOSS) PER COMMON UNIT
$
0.19
$
(0.35
)
$
(0.04
)
$
(1.79
)
BASIC WEIGHTED AVERAGE COMMON UNITS OUTSTANDING
131,015,658
129,810,245
130,802,920
129,666,303
DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING
134,485,325
129,810,245
130,802,920
129,666,303
EBITDA, ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW RECONCILIATION
(Unaudited)
The following table reconciles NGL’s net income (loss) to NGL’s EBITDA, Adjusted EBITDA and Distributable Cash Flow:
Three Months Ended December 31,
Nine Months Ended December 31,
2022
2021
2022
2021
(in thousands)
Net income (loss)
$
58,982
$
(18,982
)
$
85,695
$
(154,691
)
Less: Net (income) loss attributable to noncontrolling interests
(448
)
63
(790
)
(705
)
Net income (loss) attributable to NGL Energy Partners LP
58,534
(18,919
)
84,905
(155,396
)
Interest expense
75,934
68,395
211,573
204,037
Income tax (benefit) expense
(252
)
(135
)
113
(820
)
Depreciation and amortization
69,308
68,452
204,025
221,352
EBITDA
203,524
117,793
500,616
269,173
Net unrealized losses (gains) on derivatives
4,800
(13,500
)
(56,930
)
(48,254
)
CMA Differential Roll net losses (gains) (1)
(8,678
)
23,872
19,424
60,987
Inventory valuation adjustment (2)
(2,650
)
1,145
(6,765
)
1,912
Lower of cost or net realizable value adjustments
(12,568
)
2,921
(11,711
)
2,636
Loss on disposal or impairment of assets, net
8,290
12,035
15,775
93,268
Gain on early extinguishment of liabilities, net
(2,667
)
(9
)
(6,808
)
(1,168
)
Equity-based compensation expense
890
749
1,866
(1,044
)
Acquisition expense (3)
—
(36
)
—
67
Other (4)
2,315
2,770
3,907
7,525
Adjusted EBITDA
$
193,256
$
147,740
$
459,374
$
385,102
Less: Cash interest expense (5)
71,751
64,049
198,972
191,137
Less: Income tax (benefit) expense
(252
)
(135
)
113
(820
)
Less: Maintenance capital expenditures
11,464
13,330
41,050
38,054
Less: CMA Differential Roll (6)
(15,147
)
15,354
(13,213
)
49,254
Less: Other (7)
1
—
171
—
Distributable Cash Flow
$
125,439
$
55,142
$
232,281
$
107,477
_____________________________
(1)Adjustment to align, within Adjusted EBITDA, the net gains and losses of the Partnership’s CMA Differential Roll derivative instruments positions with the physical margin being hedged. See “Non-GAAP Financial Measures” section above for a further discussion.
(2)
Amount reflects the difference between the market value of the inventory at the balance sheet date and its cost. See “Non-GAAP Financial Measures” section above for a further discussion.
(3)
Amounts represent expenses we incurred related to legal and advisory costs associated with acquisitions.
(4)
Amounts represent non-cash operating expenses related to our Grand Mesa Pipeline, unrealized gains/losses on marketable securities, accretion expense for asset retirement obligations and the write off of an asset acquired in a prior period acquisition.
(5)
Amounts represent interest expense payable in cash, excluding changes in the accrued interest balance.
(6)
Amount represents the cash portion of the adjustments of the Partnership’s CMA Differential Roll derivative instrument positions, as discussed above, that settled during the period.
(7)
Amounts represents cash paid to settle asset retirement obligations.
ADJUSTED EBITDA RECONCILIATION BY SEGMENT
Three Months Ended December 31, 2022
Water
Solutions
Crude Oil
Logistics
Liquids
Logistics
Corporate
and Other
Consolidated
(in thousands)
Operating income (loss)
$
59,721
$
35,096
$
20,513
$
(12,660
)
$
102,670
Depreciation and amortization
52,591
11,664
3,417
1,655
69,327
Amortization recorded to cost of sales
—
—
68
—
68
Net unrealized (gains) losses on derivatives
—
(1,810
)
6,610
—
4,800
CMA Differential Roll net losses (gains)
—
(8,678
)
—
—
(8,678
)
Inventory valuation adjustment
—
—
(2,650
)
—
(2,650
)
Lower of cost or net realizable value adjustments
—
(3,321
)
(9,247
)
—
(12,568
)
Loss (gain) on disposal or impairment of assets, net
7,959
277
(1
)
71
8,306
Equity-based compensation expense
—
—
—
890
890
Other income (expense), net
2
59
(1,481
)
29,520
28,100
Adjusted EBITDA attributable to unconsolidated entities
1,357
—
21
45
1,423
Adjusted EBITDA attributable to noncontrolling interest
(747
)
—
—
—
(747
)
Other
829
(27
)
1,513
—
2,315
Adjusted EBITDA
$
121,712
$
33,260
$
18,763
$
19,521
$
193,256
Three Months Ended December 31, 2021
Water
Solutions
Crude Oil
Logistics
Liquids
Logistics
Corporate
and Other
Consolidated
(in thousands)
Operating income (loss)
$
19,851
$
21,291
$
23,158
$
(15,190
)
$
49,110
Depreciation and amortization
50,815
12,166
3,756
1,743
68,480
Amortization recorded to cost of sales
—
—
69
—
69
Net unrealized losses (gains) on derivatives
1,758
(32,201
)
16,943
—
(13,500
)
CMA Differential Roll net losses (gains)
—
23,872
—
—
23,872
Inventory valuation adjustment
—
—
1,145
—
1,145
Lower of cost or net realizable value adjustments
—
—
2,921
—
2,921
Loss (gain) on disposal or impairment of assets, net
9,997
2,262
(26
)
—
12,233
Equity-based compensation expense
—
—
—
749
749
Acquisition expense
4
—
—
(40
)
(36
)
Other (expense) income, net
(6
)
—
(31
)
61
24
Adjusted EBITDA attributable to unconsolidated entities
384
—
10
(70
)
324
Adjusted EBITDA attributable to noncontrolling interest
(419
)
—
(3
)
—
(422
)
Other
360
2,374
37
—
2,771
Adjusted EBITDA
$
82,744
$
29,764
$
47,979
$
(12,747
)
$
147,740
Nine Months Ended December 31, 2022
Water
Solutions
Crude Oil
Logistics
Liquids
Logistics
Corporate
and Other
Consolidated
(in thousands)
Operating income (loss)
$
160,454
$
87,012
$
48,806
$
(37,569
)
$
258,703
Depreciation and amortization
153,766
35,193
10,194
4,952
204,105
Amortization recorded to cost of sales
—
—
205
—
205
Net unrealized (gains) losses on derivatives
(4,464
)
(57,390
)
4,924
—
(56,930
)
CMA Differential Roll net losses (gains)
—
19,424
—
—
19,424
Inventory valuation adjustment
—
—
(6,765
)
—
(6,765
)
Lower of cost or net realizable value adjustments
—
(2,247
)
(9,464
)
—
(11,711
)
Loss (gain) on disposal or impairment of assets, net
17,935
(1,279
)
51
(916
)
15,791
Equity-based compensation expense
—
—
—
1,866
1,866
Other income (expense), net
10
390
(1,665
)
29,996
28,731
Adjusted EBITDA attributable to unconsolidated entities
3,569
—
(3
)
134
3,700
Adjusted EBITDA attributable to noncontrolling interest
(1,652
)
—
—
—
(1,652
)
Other
1,915
98
1,894
—
3,907
Adjusted EBITDA
$
331,533
$
81,201
$
48,177
$
(1,537
)
$
459,374
Nine Months Ended December 31, 2021
Water
Solutions
Crude Oil
Logistics
Liquids
Logistics
Corporate
and Other
Consolidated
(in thousands)
Operating income (loss)
$
60,206
$
37,941
$
(18,790
)
$
(34,763
)
$
44,594
Depreciation and amortization
164,466
37,029
15,409
5,241
222,145
Amortization recorded to cost of sales
—
—
213
—
213
Net unrealized losses (gains) on derivatives
6,845
(53,808
)
(1,291
)
—
(48,254
)
CMA Differential Roll net losses (gains)
—
60,987
—
—
60,987
Inventory valuation adjustment
—
—
1,912
—
1,912
Lower of cost or net realizable value adjustments
—
(11
)
2,647
—
2,636
Loss on disposal or impairment of assets, net
19,450
2,206
71,807
—
93,463
Equity-based compensation expense
—
—
—
(1,044
)
(1,044
)
Acquisition expense
4
—
—
63
67
Other income, net
616
350
627
410
2,003
Adjusted EBITDA attributable to unconsolidated entities
1,559
—
(9
)
(190
)
1,360
Adjusted EBITDA attributable to noncontrolling interest
(1,987
)
—
(529
)
—
(2,516
)
Other
520
6,994
22
—
7,536
Adjusted EBITDA
$
251,679
$
91,688
$
72,018
$
(30,283
)
$
385,102
OPERATIONAL DATA
(Unaudited)
Three Months Ended
Nine Months Ended
December 31,
December 31,
2022
2021
2022
2021
(in thousands, except per day amounts)
Water Solutions:
Produced water processed (barrels per day)
Delaware Basin
2,128,673
1,551,621
2,001,242
1,488,529
Eagle Ford Basin
131,551
110,243
114,191
99,298
DJ Basin
151,265
159,332
151,792
142,606
Other Basins
14,335
18,351
15,114
25,516
Total
2,425,824
1,839,547
2,282,339
1,755,949
Recycled water (barrels per day)
167,774
52,854
132,851
76,319
Total (barrels per day)
2,593,598
1,892,401
2,415,190
1,832,268
Skim oil sold (barrels per day)
4,099
2,678
3,757
2,667
Crude Oil Logistics:
Crude oil sold (barrels)
5,955
7,515
19,428
23,027
Crude oil transported on owned pipelines (barrels)
7,062
7,590
20,832
21,961
Crude oil storage capacity - owned and leased (barrels) (1)
5,232
5,232
Crude oil inventory (barrels) (1)
892
1,295
Liquids Logistics:
Refined products sold (gallons)
192,340
203,898
566,997
586,136
Propane sold (gallons)
305,067
294,282
639,686
644,883
Butane sold (gallons)
177,061
180,191
409,137
427,646
Other products sold (gallons)
96,349
99,915
294,965
290,078
Natural gas liquids and refined products storage capacity - owned and leased (gallons) (1)
159,999
168,189
Refined products inventory (gallons) (1)
1,738
1,314
Propane inventory (gallons) (1)
97,283
125,235
Butane inventory (gallons) (1)
31,029
45,129
Other products inventory (gallons) (1)
13,360
23,491
_____________________________
(1) Information is presented as of December 31, 2022 and December 31, 2021, respectively.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230209005600/en/