NGL Energy Partners LP Announces Earnings and Filing of Form 10-K

TULSA, Okla.--(BUSINESS WIRE)--NGL Energy Partners LP (NYSE:NGL), "NGL Energy," today reported net income of $7.9 million and Adjusted EBITDA of $36.3 million for the year ended March 31, 2012. Net income per limited partner common unit for the year was $0.32. General and administrative expenses during the year ended March 31, 2012 included $3.8 million of costs related to four significant acquisitions that were completed during the year.

During the three months ended March 31, 2012, NGL Energy completed two significant business combinations. In January 2012, NGL Energy acquired the assets of seven retail propane companies affiliated with Pacer Propane Holding, L.P. In February 2012, NGL Energy acquired the propane and distillate operations and assets of North American Propane, Inc.

During April and May 2012, NGL entered into three separate business combination agreements to acquire retail propane and distillate operations in Georgia, Kansas, Maine, and New Hampshire.

During May 2012, NGL Energy entered into a merger agreement with High Sierra Energy, LP, or High Sierra, and NGL Energy’s general partner entered into a merger agreement with High Sierra Energy GP, LLC, the general partner of High Sierra. High Sierra is a Denver, Colorado-based limited partnership with three core business segments: crude oil gathering, transportation and marketing; water treatment, disposal, recycling and transportation; and natural gas liquids transportation and marketing. Upon completion of the mergers, NGL expects that it will be able to provide multiple services to upstream customers with its combined fleet of more than 3,000 rail cars, 18 natural gas liquids terminals, three crude oil terminals, over 90 trucks and a substantial wholesale marketing and supply network.

EBITDA and Adjusted EBITDA are non-GAAP financial measures which NGL Energy believes are used by industry analysts, investors, lenders and rating agencies to assess the financial performance and the operating results of NGL Energy's fundamental business activities and should not be considered in isolation or as a substitute for net income, income from operations, or other measures of cash flow. A table reconciling EBITDA and Adjusted EBITDA with appropriate GAAP financial measures is included in the summarized financial information in this release. NGL Energy's Adjusted EBITDA excludes from EBITDA the unrealized gain or loss on commodity derivative contracts and gain or loss on asset sales for the period.

NGL Energy also announced that it has filed its annual report on Form 10-K for its fiscal year ended March 31, 2012 with the Securities and Exchange Commission. NGL Energy has posted a copy of the Form 10-K on its website at www.nglenergypartners.com. Unitholders of NGL Energy will be provided a copy of NGL Energy's Form 10-K free of charge upon request. Any such request should be made in writing directed to: NGL Energy Partners LP, Investor Relations, 6120 South Yale Avenue, #805, Tulsa, OK 74136.

About NGL Energy Partners: NGL Energy Partners LP owns and operates a vertically integrated energy business with three operating segments: midstream, wholesale supply and marketing, and retail propane. For further information about NGL Energy and the financial results disclosed in this press release, see NGL Energy’s website at www.nglenergypartners.com.

NGL ENERGY PARTNERS LP AND SUBSIDIARIES
Unaudited Consolidated Balance Sheets
As of March 31, 2012 and 2011
(U.S. Dollars in Thousands, except unit amounts)
	March 31,		March 31,
	2012		2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	7,832	$	16,337
Accounts receivable, net of allowance for doubtful accounts of $818 and $161, respectively		84,004		44,346
Accounts receivable - affiliates		2,282		-
Inventories		94,504		12,697
Product exchanges		131		427
Prepaid expenses and other current assets		9,871		3,683
Total current assets		198,624		77,490
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $12,843 and $2,871, respectively		255,403		66,020
GOODWILL		148,785		8,568
INTANGIBLE ASSETS, net of accumulated amortization of $8,174 and $1,558, respectively		143,559		11,755
OTHER		2,766		-
Total assets	$	749,137	$	163,833
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable	$	81,369	$	37,244
Accrued expenses and other payables		10,023		3,711
Product exchanges		4,764		1,045
Advance payments received from customers		20,293		7,714
Accounts payable-affiliates		8,486		-
Current maturities of long-term debt		19,484		830
Total current liabilities		144,419		50,544
LONG-TERM DEBT, net of current maturities		199,177		65,541
OTHER NON-CURRENT LIABILITIES		212		395
COMMITMENTS AND CONTINGENCIES
PARTNERS' EQUITY:
General partner, representing a 0.1% interest, 29,245 and 10,945 notional units at March 31, 2012 and 2011, respectively		442		72
Limited partners, representing a 99.9% interest -
Common units, 23,296,253 and 10,933,568 units issued and outstanding at March 31, 2012 and 2011, respectively		384,604		47,225
Subordinated units, 5,919,346 units issued and outstanding at March 31, 2012		19,824		-
Accumulated other comprehensive income -
Foreign currency translation		31		56
Noncontrolling interest		428		-
Total partners' equity		405,329		47,353
Total liabilities and partners' equity	$	749,137	$	163,833

NGL ENERGY PARTNERS LP AND SUBSIDIARIES
AND NGL SUPPLY, INC.
Unaudited Consolidated Statements of Operations
For the Year Ended March 31, 2012, the Six Months Ended March 31, 2011
and September 30, 2010, and the Year Ended March 31, 2010
(U.S. Dollars in Thousands, except unit, per unit, share, and per share amounts)
	NGL Energy Partners LP						NGL Supply, Inc.
				Six Months			Six Months
	Year Ended			Ended			Ended				Year Ended
	March 31,			March 31,			September 30,				March 31,
		2012			2011				2010			2010
REVENUES:
Retail propane operations	$	199,334		$	72,813			$	6,868		$	26,967
Wholesale supply and marketing		1,104,706			546,782				309,029			704,436
Midstream		6,433			2,637				1,046			4,103
Total Revenues		1,310,473			622,232				316,943			735,506
COST OF SALES:
Retail propane operations		130,142			46,985				4,749			15,603
Wholesale supply and marketing		1,086,544			535,755				305,965			692,145
Midstream		337			292				194			467
Total Cost of Sales		1,217,023			583,032				310,908			708,215
Gross Margin		93,450			39,200				6,035			27,291
OPERATING COSTS AND EXPENSES:
Operating		47,300			15,898				5,231			11,523
General and administrative		16,009			5,024				3,210			6,326
Depreciation and amortization		15,111			3,441				1,389			2,781
Operating Income (Loss)		15,030			14,837				(3,795	)		6,661
OTHER INCOME (EXPENSE):
Interest income		765			221				66			120
Interest expense		(7,620	)		(2,482	)			(372	)		(668	)
Other, net		290			103				124			(5	)
Income (Loss) Before Income Taxes		8,465			12,679				(3,977	)		6,108
INCOME TAX PROVISION (BENEFIT)		601			-				(1,417	)		2,478
Net Income (Loss)		7,864			12,679				(2,560	)		3,630
INCOME ALLOCABLE TO GENERAL PARTNER		(8	)		(13	)			-			-
NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST		12			-				45			6
NET INCOME (LOSS) ATTRIBUTABLE TO LIMITED PARTNERS OR PARENT EQUITY	$	7,868		$	12,666			$	(2,515	)	$	3,636
BASIC AND DILUTED NET INCOME PER LIMITED PARTNER UNIT:
Common units	$	0.32		$	1.16
Subordinated units	$	0.58		$	-
BASIC AND DILUTED WEIGHTED AVERAGE UNITS OUTSTANDING:
Common units		15,169,983			10,933,568
Subordinated units		5,175,384			-
BASIC NET INCOME (LOSS) PER COMMON SHARE								$	(128.46	)	$	178.75
BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING									19,711			19,603
DILUTED NET INCOME (LOSS) PER COMMON SHARE								$	(128.46	)	$	176.61
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING									19,711			19,840

NGL ENERGY PARTNERS LP AND SUBSIDIARIES
AND NGL SUPPLY, INC.
Unaudited Summarized Operating Information
VOLUME INFORMATION
	NGL Energy Partners LP		NGL Supply, Inc.
		Six Months	Six Months
	Year Ended	Ended	Ended	Year Ended
	March 31,	March 31,	September 30,	March 31,
	2012	2011	2010	2010
	(gallons in thousands)
Retail propane -
Propane	78,236	34,932	3,747	15,514
Distillates	1,650	-	-	-
Wholesale supply and marketing -
Propane	659,921	372,504	226,330	623,510
Other NGLs	134,998	49,465	46,092	53,878
Midstream	223,847	110,146	43,704	170,621

UNAUDITED ADJUSTED EBITDA RECONCILIATION

The following tables reconcile net income (loss) or net income (loss) to parent equity to our EBITDA and Adjusted EBITDA, each of which are non-GAAP financial measures, for the periods indicated:

	NGL Energy Partners LP							NGL Supply, Inc.
		Year Ended			Six Months Ended			Six Months Ended			Year Ended
		March 31,			March 31,			September 30,			March 31,
			2012			2011			2010			2010
		(in thousands)
EBITDA:
Net income (loss) to parent		$	7,876		$	12,679		$	(2,515	)	$	3,636
Provision (benefit) for income taxes			601			-			(1,417	)		2,478
Interest expense			7,620			2,482			372			668
Depreciation and amortization			15,911			3,841			1,789			3,752
EBITDA		$	32,008		$	19,002		$	(1,771	)	$	10,534
Unrealized (gain) loss on derivative contracts			4,384			(1,357	)		200			(563	)
Loss (gain) on sale of assets			(71	)		16			(124	)		11
Share-based compensation expense			-			-			-			-
Adjusted EBITDA		$	36,321		$	17,661		$	(1,695	)	$	9,982

NGL Energy defines EBITDA as net income (loss) or net income (loss) attributable to parent equity, plus income taxes, interest expense and depreciation and amortization expense. NGL Energy defines Adjusted EBITDA as EBITDA excluding the unrealized gain or loss on derivative contracts and the gain or loss on the disposal of assets and share-based compensation expenses. EBITDA and Adjusted EBITDA should not be considered an alternative to net income, income 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 Energy believes that EBITDA provides additional information for evaluating its ability to make quarterly distributions to its unitholders and is presented solely as a supplemental measure. NGL Energy believes that Adjusted EBITDA provides additional information for evaluating its financial performance without regard to its financing methods, capital structure and historical cost basis. Further, EBITDA and Adjusted EBITDA, as NGL Energy defines them, may not be comparable to EBITDA and Adjusted EBITDA or similarly titled measures used by other entities.