Consolidating Guarantor and Non-Guarantor Financial Information | Note 20—Consolidating Guarantor and Non-Guarantor Financial Information Certain of our wholly owned subsidiaries have, jointly and severally, fully and unconditionally guaranteed the 2019 Notes and the 2021 Notes (see Note 8 ). Pursuant to Rule 3-10 of Regulation S-X, we have presented in columnar format the consolidating financial information for NGL Energy Partners LP, NGL Energy Finance Corp. (which, along with NGL Energy Partners LP, is a co-issuer of the 2019 Notes and 2021 Notes), the guarantor subsidiaries on a combined basis, and the non-guarantor subsidiaries on a combined basis in the tables below. During the periods presented in the tables below, the status of certain subsidiaries changed, in that they either became guarantors of or ceased to be guarantors of the 2019 Notes and 2021 Notes. Such changes have been given retrospective application in the tables below. There are no significant restrictions that prevent the parent or any of the guarantor subsidiaries from obtaining funds from their respective subsidiaries by dividend or loan. None of the assets of the guarantor subsidiaries (other than the investments in non-guarantor subsidiaries) are restricted net assets pursuant to Rule 4-08(e)(3) of Regulation S-X under the Securities Act of 1933, as amended. For purposes of the tables below, (i) the consolidating financial information is presented on a legal entity basis, (ii) investments in consolidated subsidiaries are accounted for as equity method investments, and (iii) contributions, distributions, and advances to (from) consolidated entities are reported on a net basis within net changes in advances with consolidated entities in the consolidating statement of cash flow tables below. NGL ENERGY PARTNERS LP Consolidating Balance Sheet (U.S. Dollars in Thousands) March 31, 2016 NGL Energy NGL Energy Guarantor Non-Guarantor Consolidating Consolidated ASSETS CURRENT ASSETS: Cash and cash equivalents $ 25,749 $ — $ 784 $ 1,643 $ — $ 28,176 Accounts receivable-trade, net of allowance for doubtful accounts — — 516,362 4,652 — 521,014 Accounts receivable-affiliates — — 15,625 — — 15,625 Inventories — — 367,250 556 — 367,806 Prepaid expenses and other current assets — — 94,426 1,433 — 95,859 Total current assets 25,749 — 994,447 8,284 — 1,028,480 PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation — — 1,568,488 81,084 — 1,649,572 GOODWILL — — 1,313,364 1,998 — 1,315,362 INTANGIBLE ASSETS, net of accumulated amortization — — 1,146,355 2,535 — 1,148,890 INVESTMENTS IN UNCONSOLIDATED ENTITIES — — 219,550 — — 219,550 NET INTERCOMPANY RECEIVABLES (PAYABLES) 1,404,479 — (1,402,360 ) (2,119 ) — — INVESTMENTS IN CONSOLIDATED SUBSIDIARIES 1,254,383 — 42,227 — (1,296,610 ) — LOAN RECEIVABLE-AFFILIATE — — 22,262 — — 22,262 OTHER NONCURRENT ASSETS — — 175,512 527 — 176,039 Total assets $ 2,684,611 $ — $ 4,079,845 $ 92,309 $ (1,296,610 ) $ 5,560,155 LIABILITIES AND EQUITY CURRENT LIABILITIES: Accounts payable-trade $ — $ — $ 417,707 $ 2,599 $ — $ 420,306 Accounts payable-affiliates 1 — 7,190 2 — 7,193 Accrued expenses and other payables 16,887 — 196,596 943 — 214,426 Advance payments received from customers — — 55,737 448 — 56,185 Current maturities of long-term debt — — 7,109 798 — 7,907 Total current liabilities 16,888 — 684,339 4,790 — 706,017 LONG-TERM DEBT, net of debt issuance costs and current maturities 1,011,365 — 1,894,428 7,044 — 2,912,837 OTHER NONCURRENT LIABILITIES — — 246,695 541 — 247,236 EQUITY Partners’ equity 1,656,358 — 1,254,384 80,090 (1,334,317 ) 1,656,515 Accumulated other comprehensive loss — — (1 ) (156 ) — (157 ) Noncontrolling interests — — — — 37,707 37,707 Total equity 1,656,358 — 1,254,383 79,934 (1,296,610 ) 1,694,065 Total liabilities and equity $ 2,684,611 $ — $ 4,079,845 $ 92,309 $ (1,296,610 ) $ 5,560,155 (1) The parent and NGL Energy Finance Corp. are co-issuers of the 2019 Notes and 2021 Notes. Since the parent received the proceeds from the issuance of the 2019 Notes and 2021 Notes, all activity has been reflected in the parent column. NGL ENERGY PARTNERS LP Consolidating Balance Sheet (U.S. Dollars in Thousands) March 31, 2015 NGL Energy NGL Energy Guarantor Non-Guarantor Consolidating Consolidated ASSETS CURRENT ASSETS: Cash and cash equivalents $ 29,115 $ — $ 9,757 $ 2,431 $ — $ 41,303 Accounts receivable-trade, net of allowance for doubtful accounts — — 1,007,001 18,762 — 1,025,763 Accounts receivable-affiliates 5 — 16,610 583 — 17,198 Inventories — — 440,289 1,736 — 442,025 Prepaid expenses and other current assets — — 104,771 16,436 — 121,207 Total current assets 29,120 — 1,578,428 39,948 — 1,647,496 PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation — — 1,092,271 531,745 — 1,624,016 GOODWILL — — 1,526,067 32,166 — 1,558,233 INTANGIBLE ASSETS, net of accumulated amortization — — 1,167,795 64,513 — 1,232,308 INVESTMENTS IN UNCONSOLIDATED ENTITIES — — 217,600 255,073 — 472,673 NET INTERCOMPANY RECEIVABLES (PAYABLES) 1,363,792 — (1,319,388 ) (44,404 ) — — INVESTMENTS IN CONSOLIDATED SUBSIDIARIES 1,855,386 — 56,690 — (1,912,076 ) — LOAN RECEIVABLE-AFFILIATE — — 8,154 — — 8,154 OTHER NONCURRENT ASSETS — — 110,195 2,717 — 112,912 Total assets $ 3,248,298 $ — $ 4,437,812 $ 881,758 $ (1,912,076 ) $ 6,655,792 LIABILITIES AND EQUITY CURRENT LIABILITIES: Accounts payable-trade $ — $ — $ 820,042 $ 12,976 $ — $ 833,018 Accounts payable-affiliates — — 25,690 104 — 25,794 Accrued expenses and other payables 19,690 — 172,074 10,585 — 202,349 Advance payments received from customers — — 53,903 331 — 54,234 Current maturities of long-term debt — — 4,413 59 — 4,472 Total current liabilities 19,690 — 1,076,122 24,055 — 1,119,867 LONG-TERM DEBT, net of debt issuance costs and current maturities (2) 1,082,166 — 1,395,099 250,199 — 2,727,464 OTHER NONCURRENT LIABILITIES — — 111,205 3,824 — 115,029 EQUITY Partners’ equity 2,146,442 — 1,855,386 603,789 (2,459,066 ) 2,146,551 Accumulated other comprehensive loss — — — (109 ) — (109 ) Noncontrolling interests — — — — 546,990 546,990 Total equity 2,146,442 — 1,855,386 603,680 (1,912,076 ) 2,693,432 Total liabilities and equity $ 3,248,298 $ — $ 4,437,812 $ 881,758 $ (1,912,076 ) $ 6,655,792 (1) The parent and NGL Energy Finance Corp. are co-issuers of the 2019 Notes and 2021 Notes. Since the parent received the proceeds from the issuance of the 2019 Notes and 2021 Notes, all activity has been reflected in the parent column. (2) The carrying value of long-term debt in the NGL Energy Partners LP (Parent) column has been reduced by $17.8 million of debt issuance costs. NGL ENERGY PARTNERS LP Consolidating Statement of Operations (U.S. Dollars in Thousands) Year Ended March 31, 2016 NGL Energy NGL Energy Guarantor Non-Guarantor Consolidating Consolidated REVENUES $ — $ — $ 11,593,272 $ 182,175 $ (33,337 ) $ 11,742,110 COST OF SALES — — 10,843,937 28,237 (33,137 ) 10,839,037 OPERATING COSTS AND EXPENSES: Operating — — 327,377 73,941 (200 ) 401,118 General and administrative — — 122,196 17,345 — 139,541 Depreciation and amortization — — 184,091 44,833 — 228,924 Loss on disposal or impairment of assets, net — — 303,422 17,344 — 320,766 Revaluation of liabilities — — (82,673 ) — — (82,673 ) Operating (Loss) Income — — (105,078 ) 475 — (104,603 ) OTHER INCOME (EXPENSE): Equity in earnings of unconsolidated entities — — 4,374 11,747 — 16,121 Interest expense (43,493 ) — (82,360 ) (7,546 ) 310 (133,089 ) Gain on early extinguishment of debt — — 28,532 — — 28,532 Other income, net — — 5,533 352 (310 ) 5,575 (Loss) Income Before Income Taxes (43,493 ) — (148,999 ) 5,028 — (187,464 ) INCOME TAX BENEFIT (EXPENSE) — — 574 (207 ) — 367 EQUITY IN NET LOSS OF CONSOLIDATED SUBSIDIARIES (155,436 ) — (7,011 ) — 162,447 — Net (Loss) Income (198,929 ) — (155,436 ) 4,821 162,447 (187,097 ) LESS: NET INCOME ALLOCATED TO GENERAL PARTNER (47,620 ) (47,620 ) LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS (11,832 ) (11,832 ) NET (LOSS) INCOME ALLOCATED TO LIMITED PARTNERS $ (198,929 ) $ — $ (155,436 ) $ 4,821 $ 102,995 $ (246,549 ) (1) The parent and NGL Energy Finance Corp. are co-issuers of the 2019 Notes and 2021 Notes. NGL ENERGY PARTNERS LP Consolidating Statement of Operations (U.S. Dollars in Thousands) Year Ended March 31, 2015 NGL Energy NGL Energy Guarantor Non-Guarantor Consolidating Consolidated REVENUES $ — $ — $ 16,648,382 $ 189,979 $ (36,304 ) $ 16,802,057 COST OF SALES — — 15,934,529 59,825 (36,147 ) 15,958,207 OPERATING COSTS AND EXPENSES: Operating — — 306,576 57,555 — 364,131 General and administrative — — 131,898 17,532 — 149,430 Depreciation and amortization — — 161,906 32,043 — 193,949 Loss on disposal or impairment of assets, net — — 11,619 29,565 — 41,184 Revaluation of liabilities — — (12,264 ) — — (12,264 ) Operating Income (Loss) — — 114,118 (6,541 ) (157 ) 107,420 OTHER INCOME (EXPENSE): Equity in earnings of unconsolidated entities — — 6,640 5,463 — 12,103 Interest expense (65,723 ) — (39,023 ) (5,423 ) 46 (110,123 ) Other income, net — — 36,953 264 (46 ) 37,171 (Loss) Income Before Income Taxes (65,723 ) — 118,688 (6,237 ) (157 ) 46,571 INCOME TAX BENEFIT (EXPENSE) — — 3,795 (173 ) — 3,622 EQUITY IN NET INCOME (LOSS) OF CONSOLIDATED SUBSIDIARIES 103,029 — (19,297 ) — (83,732 ) — Net Income (Loss) 37,306 — 103,186 (6,410 ) (83,889 ) 50,193 LESS: NET INCOME ALLOCATED TO GENERAL PARTNER (45,700 ) (45,700 ) LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS (12,887 ) (12,887 ) NET INCOME (LOSS) ALLOCATED TO LIMITED PARTNERS $ 37,306 $ — $ 103,186 $ (6,410 ) $ (142,476 ) $ (8,394 ) (1) The parent and NGL Energy Finance Corp. are co-issuers of the 2019 Notes and 2021 Notes. NGL ENERGY PARTNERS LP Consolidating Statement of Operations (U.S. Dollars in Thousands) Year Ended March 31, 2014 NGL Energy NGL Energy Guarantor Non-Guarantor Consolidating Consolidated REVENUES $ — $ — $ 9,560,124 $ 139,519 $ (369 ) $ 9,699,274 COST OF SALES — — 9,011,011 122,057 (369 ) 9,132,699 OPERATING COSTS AND EXPENSES: Operating — — 250,841 8,958 — 259,799 General and administrative — — 73,756 2,104 — 75,860 Depreciation and amortization — — 117,573 3,181 — 120,754 Loss (gain) on disposal or impairment of assets, net — — 6,373 (2,776 ) — 3,597 Operating Income — — 100,570 5,995 — 106,565 OTHER INCOME (EXPENSE): Equity in earnings of unconsolidated entities — — 1,898 — — 1,898 Interest expense (31,818 ) — (27,031 ) (51 ) 46 (58,854 ) Other income (expense), net — — 202 (70 ) (46 ) 86 (Loss) Income Before Income Taxes (31,818 ) — 75,639 5,874 — 49,695 INCOME TAX EXPENSE — — (937 ) — — (937 ) EQUITY IN NET INCOME OF CONSOLIDATED SUBSIDIARIES 79,473 — 4,771 — (84,244 ) — Net Income 47,655 — 79,473 5,874 (84,244 ) 48,758 LESS: NET INCOME ALLOCATED TO GENERAL PARTNER (14,148 ) (14,148 ) LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS (1,103 ) (1,103 ) NET INCOME ALLOCATED TO LIMITED PARTNERS $ 47,655 $ — $ 79,473 $ 5,874 $ (99,495 ) $ 33,507 (1) The parent and NGL Energy Finance Corp. are co-issuers of the 2019 Notes and 2021 Notes. NGL ENERGY PARTNERS LP Consolidating Statements of Comprehensive Income (Loss) (U.S. Dollars in Thousands) Year Ended March 31, 2016 NGL Energy NGL Energy Guarantor Non-Guarantor Consolidating Consolidated Net (loss) income $ (198,929 ) $ — $ (155,436 ) $ 4,821 $ 162,447 $ (187,097 ) Other comprehensive loss — — — (48 ) — (48 ) Comprehensive (loss) income $ (198,929 ) $ — $ (155,436 ) $ 4,773 $ 162,447 $ (187,145 ) (1) The parent and NGL Energy Finance Corp. are co-issuers of the 2019 Notes and 2021 Notes. Year Ended March 31, 2015 NGL Energy NGL Energy Guarantor Non-Guarantor Consolidating Consolidated Net income (loss) $ 37,306 $ — $ 103,186 $ (6,410 ) $ (83,889 ) $ 50,193 Other comprehensive income (loss) — — 189 (62 ) — 127 Comprehensive income (loss) $ 37,306 $ — $ 103,375 $ (6,472 ) $ (83,889 ) $ 50,320 (1) The parent and NGL Energy Finance Corp. are co-issuers of the 2019 Notes and 2021 Notes. Year Ended March 31, 2014 NGL Energy NGL Energy Guarantor Non-Guarantor Consolidating Consolidated Net income $ 47,655 $ — $ 79,473 $ 5,874 $ (84,244 ) $ 48,758 Other comprehensive loss — — (189 ) (71 ) — (260 ) Comprehensive income $ 47,655 $ — $ 79,284 $ 5,803 $ (84,244 ) $ 48,498 (1) The parent and NGL Energy Finance Corp. are co-issuers of the 2019 Notes and 2021 Notes. NGL ENERGY PARTNERS LP Consolidating Statement of Cash Flows (U.S. Dollars in Thousands) Year Ended March 31, 2016 NGL Energy NGL Energy Guarantor Non-Guarantor Consolidated OPERATING ACTIVITIES: Net cash (used in) provided by operating activities $ (74,822 ) $ — $ 360,851 $ 65,466 $ 351,495 INVESTING ACTIVITIES: Purchases of long-lived assets — — (604,214 ) (57,671 ) (661,885 ) Acquisitions of businesses, including acquired working capital, net of cash acquired (624 ) — (232,148 ) (1,880 ) (234,652 ) Cash flows from commodity derivatives — — 105,662 — 105,662 Proceeds from sales of assets — — 8,453 2 8,455 Proceeds from sale of general partner interest in TLP, net — — 343,135 — 343,135 Investments in unconsolidated entities — — (4,480 ) (6,951 ) (11,431 ) Distributions of capital from unconsolidated entities — — 11,031 4,761 15,792 Loan for natural gas liquids facility — — (3,913 ) — (3,913 ) Payments on loan for natural gas liquids facility — — 7,618 — 7,618 Loan to affiliate — — (15,621 ) — (15,621 ) Payments on loan to affiliate — — 1,513 — 1,513 Net cash used in investing activities (624 ) — (382,964 ) (61,739 ) (445,327 ) FINANCING ACTIVITIES: Proceeds from borrowings under revolving credit facilities — — 2,499,000 103,500 2,602,500 Payments on revolving credit facilities — — (2,041,500 ) (91,500 ) (2,133,000 ) Repurchases of senior notes (43,421 ) — — — (43,421 ) Proceeds from borrowings under other long-term debt — — 45,873 7,350 53,223 Payments on other long-term debt — — (4,762 ) (325 ) (5,087 ) Debt issuance costs (3,493 ) — (6,744 ) — (10,237 ) Contributions from general partner 54 — — — 54 Contributions from limited partner (3,829 ) — — — (3,829 ) Contributions from noncontrolling interest owners — — — 15,376 15,376 Distributions to partners (322,007 ) — — — (322,007 ) Distributions to noncontrolling interest owners — — — (35,720 ) (35,720 ) Taxes paid on behalf of equity incentive plan participants — — (19,395 ) — (19,395 ) Common unit repurchases (17,680 ) — — — (17,680 ) Net changes in advances with consolidated entities 462,456 — (459,289 ) (3,167 ) — Other — — (43 ) (29 ) (72 ) Net cash provided by (used in) financing activities 72,080 — 13,140 (4,515 ) 80,705 Net decrease in cash and cash equivalents (3,366 ) — (8,973 ) (788 ) (13,127 ) Cash and cash equivalents, beginning of period 29,115 — 9,757 2,431 41,303 Cash and cash equivalents, end of period $ 25,749 $ — $ 784 $ 1,643 $ 28,176 (1) The parent and NGL Energy Finance Corp. are co-issuers of the 2019 Notes and 2021 Notes. NGL ENERGY PARTNERS LP Consolidating Statement of Cash Flows (U.S. Dollars in Thousands) Year Ended March 31, 2015 NGL Energy NGL Energy Guarantor Non-Guarantor Consolidated OPERATING ACTIVITIES: Net cash (used in) provided by operating activities $ (59,448 ) $ — $ 287,953 $ 33,886 $ 262,391 INVESTING ACTIVITIES: Purchases of long-lived assets — — (198,847 ) (4,913 ) (203,760 ) Purchases of pipeline capacity allocations — — (24,218 ) — (24,218 ) Purchase of equity interest in Grand Mesa Pipeline — — (310,000 ) — (310,000 ) Acquisitions of businesses, including acquired working capital, net of cash acquired (124,281 ) — (831,505 ) (5,136 ) (960,922 ) Cash flows from commodity derivatives — — 199,165 — 199,165 Proceeds from sales of assets — — 11,806 14,456 26,262 Investments in unconsolidated entities — — (13,244 ) (20,284 ) (33,528 ) Distributions of capital from unconsolidated entities — — 5,030 5,793 10,823 Loan for natural gas liquids facility — — (63,518 ) — (63,518 ) Payments on loan for natural gas liquids facility — — 1,625 — 1,625 Loan to affiliate — — (8,154 ) — (8,154 ) Other — — 4 — 4 Net cash used in investing activities (124,281 ) — (1,231,856 ) (10,084 ) (1,366,221 ) FINANCING ACTIVITIES: Proceeds from borrowings under revolving credit facilities — — 3,663,000 101,500 3,764,500 Payments on revolving credit facilities — — (3,194,500 ) (85,500 ) (3,280,000 ) Issuances of notes 400,000 — — — 400,000 Payments on other long-term debt — — (6,666 ) (22 ) (6,688 ) Debt issuance costs (8,150 ) — (2,926 ) — (11,076 ) Contributions from general partner 823 — — — 823 Contributions from noncontrolling interest owners — — — 9,433 9,433 Distributions to partners (242,595 ) — — — (242,595 ) Distributions to noncontrolling interest owners — — — (27,147 ) (27,147 ) Proceeds from sale of common units, net of offering costs 541,128 — — — 541,128 Taxes paid on behalf of equity incentive plan participants — — (13,491 ) — (13,491 ) Net changes in advances with consolidated entities (479,543 ) — 499,709 (20,166 ) — Other — — (194 ) — (194 ) Net cash provided by (used in) financing activities 211,663 — 944,932 (21,902 ) 1,134,693 Net increase in cash and cash equivalents 27,934 — 1,029 1,900 30,863 Cash and cash equivalents, beginning of period 1,181 — 8,728 531 10,440 Cash and cash equivalents, end of period $ 29,115 $ — $ 9,757 $ 2,431 $ 41,303 (1) The parent and NGL Energy Finance Corp. are co-issuers of the 2019 Notes and 2021 Notes. NGL ENERGY PARTNERS LP Consolidating Statement of Cash Flows (U.S. Dollars in Thousands) Year Ended March 31, 2014 NGL Energy NGL Energy Guarantor Non-Guarantor Consolidated OPERATING ACTIVITIES: Net cash (used in) provided by operating activities $ (16,625 ) $ — $ 99,754 $ 2,107 $ 85,236 INVESTING ACTIVITIES: Purchases of long-lived assets — — (118,455 ) (46,693 ) (165,148 ) Acquisitions of businesses, including acquired working capital, net of cash acquired (334,154 ) — (932,373 ) (2,283 ) (1,268,810 ) Cash flows from commodity derivatives — — (35,956 ) — (35,956 ) Proceeds from sales of assets — — 12,884 11,776 24,660 Investments in unconsolidated entities — — (11,515 ) — (11,515 ) Distributions of capital from unconsolidated entities — — 1,591 — 1,591 Other — — 540 (735 ) (195 ) Net cash used in investing activities (334,154 ) — (1,083,284 ) (37,935 ) (1,455,373 ) FINANCING ACTIVITIES: Proceeds from borrowings under revolving credit facilities — — 2,545,500 — 2,545,500 Payments on revolving credit facilities — — (2,101,000 ) — (2,101,000 ) Issuances of notes 450,000 — — — 450,000 Proceeds from borrowings under other long-term debt — — 780 100 880 Payments on other long-term debt — — (8,802 ) (17 ) (8,819 ) Debt issuance costs (12,931 ) — (11,664 ) — (24,595 ) Contributions from general partner 765 — — — 765 Contributions from noncontrolling interest owners — — — 2,060 2,060 Distributions to partners (145,090 ) — — — (145,090 ) Distributions to noncontrolling interest owners — — — (840 ) (840 ) Proceeds from sale of common units, net of offering costs 650,155 — — — 650,155 Net changes in advances with consolidated entities (590,939 ) — 556,238 34,701 — Net cash provided by financing activities 351,960 — 981,052 36,004 1,369,016 Net increase (decrease) in cash and cash equivalents 1,181 — (2,478 ) 176 (1,121 ) Cash and cash equivalents, beginning of period — — 11,206 355 11,561 Cash and cash equivalents, end of period $ 1,181 $ — $ 8,728 $ 531 $ 10,440 (1) The parent and NGL Energy Finance Corp. are co-issuers of the 2019 Notes and 2021 Notes. |