EX-99.1 3 exhibit991updatedproformaf.htm EX-99.1 Document

Exhibit 99.1

NGL ENERGY PARTNERS LP AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS

Introduction

On June 18, 2021, NGL Energy Partners LP (“we,” “us,” “our” or “the Partnership”) sold its 71.5% interest in Sawtooth Caverns LLC (“Sawtooth”) and associated assets to a group of buyers for total consideration of $70 million less estimated expenses of approximately $2.1 million. Sawtooth previously comprised a portion of the Partnership’s Liquids Logistics segment.

The following sets forth the unaudited pro forma condensed consolidated balance sheet of the Partnership as of March 31, 2021 and the unaudited pro forma condensed consolidated statement of operations for the year ended March 31, 2021. The unaudited pro forma condensed consolidated balance sheet gives pro forma effect only for the sale of Sawtooth as if it had occurred on March 31, 2021. The unaudited pro forma condensed consolidated statement of operations gives pro forma effect for the sale of Sawtooth as if it had occurred on April 1, 2020.

These unaudited pro forma condensed consolidated financial statements have been derived from the Partnership’s historical consolidated financial statements, which are included in its Annual Report on Form 10-K for the year ended March 31, 2021. These unaudited condensed consolidated financial statements should be read in conjunction with the Partnership’s historical financial statements and related notes thereto.

The following unaudited pro forma condensed consolidated financial statements are based on certain assumptions and do not purport to be indicative of the results that actually would have been achieved if the transactions described above had occurred on the dates indicated. Moreover, the accompanying unaudited pro forma condensed consolidated financial statements do not project the Partnership’s results of operations for any future date or period.


NGL ENERGY PARTNERS LP AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of March 31, 2021
(U.S. Dollars in Thousands)
Historical NGL Energy Partners LP (As Reported)Transaction Accounting AdjustmentsPro Forma NGL Energy Partners LP
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$4,829 $(1,697)(A)$71,032 
70,000 (B)
(2,100)(B)
Accounts receivable-trade, net725,943 (1,254)(A)724,689 
Accounts receivable-affiliates9,435 — 9,435 
Inventories158,467 (1,658)(A)156,809 
Prepaid expenses and other current assets109,164 (159)(A)109,005 
Total current assets1,007,838 63,132 1,070,970 
PROPERTY, PLANT AND EQUIPMENT, net2,706,853 (120,629)(A)2,586,224 
GOODWILL744,439 — 744,439 
INTANGIBLE ASSETS, net1,262,613 (64,958)(A)1,197,655 
INVESTMENTS IN UNCONSOLIDATED ENTITIES22,719 — 22,719 
OPERATING LEASE RIGHT-OF-USE ASSETS152,146 (3,497)(A)148,649 
OTHER NONCURRENT ASSETS50,733 — 50,733 
Total assets$5,947,341 $(125,952)$5,821,389 
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable-trade$679,868 $(79)(A)$679,789 
Accounts payable-affiliates119 — 119 
Accrued expenses and other payables170,400 (567)(A)169,833 
Advance payments received from customers11,163 (2,787)(A)8,376 
Current maturities of long-term debt2,183 — 2,183 
Operating lease obligations47,070 (293)(A)46,777 
Total current liabilities910,803 (3,726)907,077 
LONG-TERM DEBT, net of debt issuance costs and current maturities3,319,030 (5,000)(A)3,314,030 
OPERATING LEASE OBLIGATIONS103,637 (3,027)(A)100,610 
OTHER NONCURRENT LIABILITIES114,615 (1,582)(A)113,033 
COMMITMENTS AND CONTINGENCIES
CLASS D PREFERRED UNITS551,097 — 551,097 
EQUITY:
General partner, representing a 0.1% interest(52,189)(61)(C)(52,250)
Limited partners, representing a 99.9% interest582,784 (61,244)(C)521,540 
Class B preferred limited partners305,468 — 305,468 
Class C preferred limited partners42,891 — 42,891 
Accumulated other comprehensive loss(266)— (266)
Noncontrolling interests69,471 (51,312)(A)18,159 
Total equity948,159 (112,617)835,542 
Total liabilities and equity$5,947,341 $(125,952)$5,821,389 

See accompanying notes to the unaudited pro forma condensed consolidated financial statements.


NGL ENERGY PARTNERS LP AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the year ended March 31, 2021
(U.S. dollars in thousands, except unit and per unit amounts)
Historical NGL Energy Partners LP (As Reported)Transaction Accounting AdjustmentsPro Forma NGL Energy Partners LP
REVENUES$5,227,023 $(12,523)(D)$5,214,500 
COST OF SALES4,493,822 (220)(D)4,493,602 
OPERATING COSTS AND EXPENSES:
Operating254,562 (7,867)(D)246,695 
General and administrative70,468 (114)(D)70,354 
Depreciation and amortization317,227 (9,652)(D)307,575 
Loss on disposal or impairment of assets, net475,436 (6)(D)475,430 
Revaluation of liabilities6,261 — 6,261 
Operating Loss(390,753)5,336 (385,417)
OTHER INCOME (EXPENSE):
Equity in earnings of unconsolidated entities1,938 — 1,938 
Interest expense (198,799)206 (D)(198,593)
Loss on early extinguishment of liabilities, net(16,692)— (16,692)
Other expense, net(36,503)(3)(D)(36,506)
Loss From Continuing Operations Before Income Taxes(640,809)5,539 (635,270)
INCOME TAX BENEFIT3,391 — 3,391 
Net Loss From Continuing Operations(637,418)5,539 (631,879)
LESS: CONTINUING OPERATIONS NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS(632)56 (D)(576)
NET LOSS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO NGL ENERGY PARTNERS LP(638,050)5,595 (632,455)
LESS: DISTRIBUTIONS TO PREFERRED UNITHOLDERS(93,364)— (93,364)
LESS: CONTINUING OPERATIONS NET LOSS ALLOCATED TO GENERAL PARTNER731 (6)(E)725 
NET LOSS FROM CONTINUING OPERATIONS ALLOCATED TO COMMON UNITHOLDERS$(730,683)$5,589 $(725,094)
BASIC AND DILUTED LOSS FROM CONTINUING OPERATIONS PER COMMON UNIT$(5.67)$(5.62)
BASIC AND DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING128,980,823 128,980,823 

See accompanying notes to the unaudited pro forma condensed consolidated financial statements.




NGL ENERGY PARTNERS LP AND SUBSIDIARIES
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

Note 1 - Basis of Presentation

See “Introduction” for more information regarding the basis of presentation for these unaudited pro forma condensed consolidated financial statements.

Note 2 - Transaction Accounting Adjustments

The unaudited pro forma condensed consolidated financial statements reflect the impact of the following transaction accounting adjustments:

A.Represents the removal of the Sawtooth assets and liabilities from the balance sheet.
B.Represents the net cash proceeds received at closing from the sale of Sawtooth for total consideration of $70 million, less estimated expenses of approximately $2.1 million.
C.Represents the pro forma non-recurring loss on the sale that would have been recorded if the Partnership had completed the sale of Sawtooth on March 31, 2021.
D.Represents the pro forma effect of eliminating the results of operations of Sawtooth for the year ended March 31, 2021 from the presentation of continuing operations.
E.Represents our general partner’s interest in the transaction accounting adjustments related to the sale of Sawtooth for the year ended March 31, 2021.

Note 3 - Earnings per Unit

Basic earnings per unit is computed by dividing the net income (loss) by the weighted average number of units outstanding during a period. To determine net income (loss) allocated to each class of ownership, the Partnership first allocates net income (loss) in accordance with the amount of distributions made for the quarter by each class of units, if any. The remaining net income is allocated to each class of units in proportion to the weighted average number of units of such class outstanding for a period, as compared to the weighted average number of units outstanding for all classes for the period, with the exception of net losses. Net losses are allocated only to the common units.