Unaudited Condensed Consolidating Guarantor and Non-Guarantor Financial Information | Unaudited Condensed Consolidating Guarantor and Non-Guarantor Financial Information Certain of our wholly owned subsidiaries have, jointly and severally, fully and unconditionally guaranteed the Senior Unsecured Notes (see Note 8 ). Pursuant to Rule 3-10 of Regulation S-X, we have presented in columnar format the unaudited condensed consolidating financial information for NGL Energy Partners LP (Parent), NGL Energy Finance Corp., the guarantor subsidiaries on a combined basis, and the non-guarantor subsidiaries on a combined basis in the tables below. NGL Energy Partners LP and NGL Energy Finance Corp. are co-issuers of the Senior Unsecured Notes. Since NGL Energy Partners LP received the proceeds from the issuance of the Senior Unsecured Notes, this activity has been included in the NGL Energy Partners LP (Parent) column 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 Senior Unsecured Notes. For purposes of the tables below, when the status of a subsidiary changes, all subsidiary activity is included in either the guarantor subsidiaries column or non-guarantor subsidiaries column based on the status of the subsidiary at the balance sheet date regardless of activity during the year. 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 unaudited condensed 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 unaudited condensed consolidating statement of cash flow tables below. As discussed further in Note 1 and Note 16 , certain assets and liabilities related to Mid-Con and Gas Blending and the assets and liabilities related to TPSL have been classified as held for sale within our March 31, 2019 unaudited condensed consolidated balance sheet and December 31, 2019 unaudited condensed consolidated balance sheet for Mid-Con and Gas Blending and the results of operations and cash flows related to Mid-Con, Gas Blending, TPSL and our former Retail Propane segment (including equity in earnings of Victory Propane) have been classified as discontinued operations for all periods presented and prior periods have been retrospectively adjusted in the unaudited condensed consolidated statements of operations and unaudited condensed consolidated statements of cash flows. Unaudited Condensed Consolidating Balance Sheet (in Thousands) December 31, 2019 NGL Energy NGL Energy Guarantor Non-Guarantor Consolidating Consolidated ASSETS CURRENT ASSETS: Cash and cash equivalents $ 182,635 $ — $ (174,771 ) $ 4,144 $ — $ 12,008 Accounts receivable-trade, net of allowance for doubtful accounts — — 947,307 227 — 947,534 Accounts receivable-affiliates — — 12,445 — — 12,445 Inventories — — 182,977 761 — 183,738 Prepaid expenses and other current assets — — 90,239 455 — 90,694 Assets held for sale — — 95,093 — — 95,093 Total current assets 182,635 — 1,153,290 5,587 — 1,341,512 PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation — — 2,510,670 193,442 — 2,704,112 GOODWILL — — 1,301,880 5,175 — 1,307,055 INTANGIBLE ASSETS, net of accumulated amortization — — 1,530,120 70,435 — 1,600,555 INVESTMENTS IN UNCONSOLIDATED ENTITIES — — 22,236 — — 22,236 NET INTERCOMPANY RECEIVABLES (PAYABLES) 1,768,795 — (1,699,213 ) (69,582 ) — — INVESTMENTS IN CONSOLIDATED SUBSIDIARIES 2,019,081 — 123,793 — (2,142,874 ) — OPERATING LEASE RIGHT-OF-USE ASSETS — — 178,607 4,534 — 183,141 OTHER NONCURRENT ASSETS — — 83,944 — — 83,944 Total assets $ 3,970,511 $ — $ 5,205,327 $ 209,591 $ (2,142,874 ) $ 7,242,555 LIABILITIES AND EQUITY CURRENT LIABILITIES: Accounts payable-trade $ — $ — $ 846,667 $ 100 $ — $ 846,767 Accounts payable-affiliates 1 — 29,373 — — 29,374 Accrued expenses and other payables 30,537 — 321,126 1,185 — 352,848 Advance payments received from customers — — 27,108 2,885 — 29,993 Current maturities of long-term debt — — 4,835 — — 4,835 Operating lease obligations — — 56,747 344 — 57,091 Liabilities held for sale — — 40,899 — — 40,899 Total current liabilities 30,538 — 1,326,755 4,514 — 1,361,807 LONG-TERM DEBT, net of debt issuance costs and current maturities 1,429,027 — 1,639,178 — — 3,068,205 OPERATING LEASE OBLIGATIONS — — 118,847 3,951 — 122,798 OTHER NONCURRENT LIABILITIES — — 101,466 2,594 — 104,060 CLASS D 9.00% PREFERRED UNITS 531,768 — — — — 531,768 EQUITY: Partners’ equity 1,979,178 — 2,019,081 198,780 (2,217,613 ) 1,979,426 Accumulated other comprehensive loss — — — (248 ) — (248 ) Noncontrolling interests — — — — 74,739 74,739 Total equity 1,979,178 — 2,019,081 198,532 (2,142,874 ) 2,053,917 Total liabilities and equity $ 3,970,511 $ — $ 5,205,327 $ 209,591 $ (2,142,874 ) $ 7,242,555 Unaudited Condensed Consolidating Balance Sheet (in Thousands) March 31, 2019 NGL Energy NGL Energy Guarantor Non-Guarantor Consolidating Consolidated ASSETS CURRENT ASSETS: Cash and cash equivalents $ 12,798 $ — $ 3,728 $ 2,046 $ — $ 18,572 Accounts receivable-trade, net of allowance for doubtful accounts — — 996,192 2,011 — 998,203 Accounts receivable-affiliates — — 12,867 — — 12,867 Inventories — — 135,094 1,034 — 136,128 Prepaid expenses and other current assets — — 65,443 475 — 65,918 Assets held for sale — — 580,985 — — 580,985 Total current assets 12,798 — 1,794,309 5,566 — 1,812,673 PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation — — 1,620,084 208,856 — 1,828,940 GOODWILL — — 1,105,281 5,175 — 1,110,456 INTANGIBLE ASSETS, net of accumulated amortization — — 725,542 75,347 — 800,889 INVESTMENTS IN UNCONSOLIDATED ENTITIES — — 1,127 — — 1,127 NET INTERCOMPANY RECEIVABLES (PAYABLES) 862,186 — (808,610 ) (53,576 ) — — INVESTMENTS IN CONSOLIDATED SUBSIDIARIES 2,503,848 — 170,690 — (2,674,538 ) — OTHER NONCURRENT ASSETS — — 113,857 — — 113,857 ASSETS HELD FOR SALE — — 234,551 — — 234,551 Total assets $ 3,378,832 $ — $ 4,956,831 $ 241,368 $ (2,674,538 ) $ 5,902,493 LIABILITIES AND EQUITY CURRENT LIABILITIES: Accounts payable-trade $ — $ — $ 872,122 $ 6,941 $ — $ 879,063 Accounts payable-affiliates 1 — 28,468 — — 28,469 Accrued expenses and other payables 25,497 — 80,765 1,497 — 107,759 Advance payments received from customers — — 7,550 911 — 8,461 Current maturities of long-term debt — — 648 — — 648 Liabilities held for sale — — 226,753 — — 226,753 Total current liabilities 25,498 — 1,216,306 9,349 — 1,251,153 LONG-TERM DEBT, net of debt issuance costs and current maturities 984,450 — 1,175,683 — — 2,160,133 OTHER NONCURRENT LIABILITIES — — 60,961 2,581 — 63,542 NONCURRENT LIABILITIES HELD FOR SALE — — 33 — — 33 CLASS A 10.75% CONVERTIBLE PREFERRED UNITS 149,814 — — — — 149,814 EQUITY: Partners’ equity 2,219,070 — 2,503,848 229,693 (2,733,286 ) 2,219,325 Accumulated other comprehensive loss — — — (255 ) — (255 ) Noncontrolling interests — — — — 58,748 58,748 Total equity 2,219,070 — 2,503,848 229,438 (2,674,538 ) 2,277,818 Total liabilities and equity $ 3,378,832 $ — $ 4,956,831 $ 241,368 $ (2,674,538 ) $ 5,902,493 Unaudited Condensed Consolidating Statement of Operations (in Thousands) Three Months Ended December 31, 2019 NGL Energy NGL Energy Guarantor Non-Guarantor Consolidating Consolidated REVENUES $ — $ — $ 2,223,900 $ 5,127 $ (2,498 ) $ 2,226,529 COST OF SALES — — 1,937,767 36 (2,331 ) 1,935,472 OPERATING COSTS AND EXPENSES: Operating — — 92,180 2,399 (167 ) 94,412 General and administrative — — 28,952 198 — 29,150 Depreciation and amortization — — 70,396 3,330 — 73,726 Gain on disposal or impairment of assets, net — — (12,626 ) — — (12,626 ) Revaluation of liabilities — — 10,000 — — 10,000 Operating Income (Loss) — — 97,231 (836 ) — 96,395 OTHER INCOME (EXPENSE): Equity in earnings of unconsolidated entities — — 534 — — 534 Interest expense (26,664 ) — (20,241 ) (26 ) 11 (46,920 ) Other (expense) income, net — — (229 ) 14 (11 ) (226 ) (Loss) Income From Continuing Operations Before Income Taxes (26,664 ) — 77,295 (848 ) — 49,783 INCOME TAX EXPENSE — — (677 ) — — (677 ) EQUITY IN NET INCOME (LOSS) FROM CONTINUING OPERATIONS OF CONSOLIDATED SUBSIDIARIES 69,821 — (682 ) — (69,139 ) — Income (Loss) From Continuing Operations 43,157 — 75,936 (848 ) (69,139 ) 49,106 Loss From Discontinued Operations, Net of Tax — — (6,115 ) — — (6,115 ) Net Income (Loss) 43,157 — 69,821 (848 ) (69,139 ) 42,991 LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS 166 166 NET INCOME (LOSS) ATTRIBUTABLE TO NGL ENERGY PARTNERS LP $ 43,157 $ — $ 69,821 $ (848 ) $ (68,973 ) $ 43,157 Unaudited Condensed Consolidating Statement of Operations (in Thousands) Three Months Ended December 31, 2018 NGL Energy NGL Energy Guarantor Non-Guarantor Consolidating Consolidated REVENUES $ — $ — $ 2,292,268 $ 4,286 $ (1,185 ) $ 2,295,369 COST OF SALES — — 2,049,328 518 (1,185 ) 2,048,661 OPERATING COSTS AND EXPENSES: Operating — — 58,389 2,076 — 60,465 General and administrative — — 24,599 160 — 24,759 Depreciation and amortization — — 50,724 2,557 — 53,281 Gain on disposal or impairment of assets, net — — (36,246 ) — — (36,246 ) Operating Income (Loss) — — 145,474 (1,025 ) — 144,449 OTHER INCOME (EXPENSE): Equity in earnings of unconsolidated entities — — 1,777 — — 1,777 Interest expense (24,026 ) — (15,124 ) (12 ) 11 (39,151 ) Loss on early extinguishment of liabilities, net (10,083 ) — — — — (10,083 ) Other income, net — — 1,198 — (11 ) 1,187 (Loss) Income From Continuing Operations Before Income Taxes (34,109 ) — 133,325 (1,037 ) — 98,179 INCOME TAX EXPENSE — — (980 ) — — (980 ) EQUITY IN NET INCOME (LOSS) FROM CONTINUING OPERATIONS OF CONSOLIDATED SUBSIDIARIES 144,944 — (730 ) — (144,214 ) — Income (Loss) From Continuing Operations 110,835 — 131,615 (1,037 ) (144,214 ) 97,199 Income From Discontinued Operations, Net of Tax — — 13,329 — — 13,329 Net Income (Loss) 110,835 — 144,944 (1,037 ) (144,214 ) 110,528 LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS 307 307 NET INCOME (LOSS) ATTRIBUTABLE TO NGL ENERGY PARTNERS LP $ 110,835 $ — $ 144,944 $ (1,037 ) $ (143,907 ) $ 110,835 Unaudited Condensed Consolidating Statement of Operations (in Thousands) Nine Months Ended December 31, 2019 NGL Energy NGL Energy Guarantor Non-Guarantor Consolidating Consolidated REVENUES $ — $ — $ 5,869,693 $ 38,501 $ (5,438 ) $ 5,902,756 COST OF SALES — — 5,218,841 535 (4,771 ) 5,214,605 OPERATING COSTS AND EXPENSES: Operating — — 217,662 13,615 (667 ) 230,610 General and administrative — — 92,730 670 — 93,400 Depreciation and amortization — — 180,630 9,963 — 190,593 Gain on disposal or impairment of assets, net — — (10,478 ) (4 ) — (10,482 ) Revaluation of liabilities — — 10,000 — — 10,000 Operating Income — — 160,308 13,722 — 174,030 OTHER INCOME (EXPENSE): Equity in earnings of unconsolidated entities — — 277 — — 277 Interest expense (79,119 ) — (52,680 ) (49 ) 34 (131,814 ) Other income, net — — 947 54 (34 ) 967 (Loss) Income From Continuing Operations Before Income Taxes (79,119 ) — 108,852 13,727 — 43,460 INCOME TAX EXPENSE — — (996 ) — — (996 ) EQUITY IN NET (LOSS) INCOME FROM CONTINUING OPERATIONS OF CONSOLIDATED SUBSIDIARIES (70,654 ) — 14,290 — 56,364 — (Loss) Income From Continuing Operations (149,773 ) — 122,146 13,727 56,364 42,464 Loss From Discontinued Operations, Net of Tax — — (192,800 ) — — (192,800 ) Net (Loss) Income (149,773 ) — (70,654 ) 13,727 56,364 (150,336 ) LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS 563 563 NET (LOSS) INCOME ATTRIBUTABLE TO NGL ENERGY PARTNERS LP $ (149,773 ) $ — $ (70,654 ) $ 13,727 $ 56,927 $ (149,773 ) Unaudited Condensed Consolidating Statement of Operations (in Thousands) Nine Months Ended December 31, 2018 NGL Energy NGL Energy Guarantor Non-Guarantor Consolidating Consolidated REVENUES $ — $ — $ 6,558,089 $ 10,768 $ (2,854 ) $ 6,566,003 COST OF SALES — — 6,049,032 495 (2,854 ) 6,046,673 OPERATING COSTS AND EXPENSES: Operating — — 166,013 6,206 — 172,219 General and administrative — — 85,737 691 — 86,428 Depreciation and amortization — — 150,093 7,678 — 157,771 Loss on disposal or impairment of assets, net — — 71,077 — — 71,077 Revaluation of liabilities — — 800 — — 800 Operating Income (Loss) — — 35,337 (4,302 ) — 31,035 OTHER INCOME (EXPENSE): Equity in earnings of unconsolidated entities — — 2,375 — — 2,375 Interest expense (83,011 ) — (43,764 ) (35 ) 34 (126,776 ) Loss on early extinguishment of liabilities, net (10,220 ) — — — — (10,220 ) Other expense, net — — (31,196 ) — (219 ) (31,415 ) Loss From Continuing Operations Before Income Taxes (93,231 ) — (37,248 ) (4,337 ) (185 ) (135,001 ) INCOME TAX EXPENSE — — (2,322 ) — — (2,322 ) EQUITY IN NET INCOME (LOSS) FROM CONTINUING OPERATIONS OF CONSOLIDATED SUBSIDIARIES 391,025 — (3,750 ) — (387,275 ) — Income (Loss) From Continuing Operations 297,794 — (43,320 ) (4,337 ) (387,460 ) (137,323 ) Income (Loss) From Discontinued Operations, Net of Tax — — 434,345 (1,029 ) 185 433,501 Net Income (Loss) 297,794 — 391,025 (5,366 ) (387,275 ) 296,178 LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS 1,170 1,170 LESS: NET LOSS ATTRIBUTABLE TO REDEEMABLE NONCONTROLLING INTERESTS 446 446 NET INCOME (LOSS) ATTRIBUTABLE TO NGL ENERGY PARTNERS LP $ 297,794 $ — $ 391,025 $ (5,366 ) $ (385,659 ) $ 297,794 Unaudited Condensed Consolidating Statements of Comprehensive Income (Loss) (in Thousands) Three Months Ended December 31, 2019 NGL Energy NGL Energy Guarantor Non-Guarantor Consolidating Consolidated Net income (loss) $ 43,157 $ — $ 69,821 $ (848 ) $ (69,139 ) $ 42,991 Other comprehensive (los s) income — — (1 ) 17 — 16 Comprehensive income (loss) $ 43,157 $ — $ 69,820 $ (831 ) $ (69,139 ) $ 43,007 Three Months Ended December 31, 2018 NGL Energy NGL Energy Guarantor Non-Guarantor Consolidating Consolidated Net income (loss) $ 110,835 $ — $ 144,944 $ (1,037 ) $ (144,214 ) $ 110,528 Other comprehensive loss — — — (3 ) — (3 ) Comprehensive income (loss) $ 110,835 $ — $ 144,944 $ (1,040 ) $ (144,214 ) $ 110,525 Nine Months Ended December 31, 2019 NGL Energy NGL Energy Guarantor Non-Guarantor Consolidating Consolidated Net (loss) income $ (149,773 ) $ — $ (70,654 ) $ 13,727 $ 56,364 $ (150,336 ) Other comprehensive inco me (loss) — — 17 (10 ) — 7 Comprehensive (loss) income $ (149,773 ) $ — $ (70,637 ) $ 13,717 $ 56,364 $ (150,329 ) Nine Months Ended December 31, 2018 NGL Energy NGL Energy Guarantor Non-Guarantor Consolidating Consolidated Net income (loss) $ 297,794 $ — $ 391,025 $ (5,366 ) $ (387,275 ) $ 296,178 Other comprehensive loss — — (1 ) (26 ) — (27 ) Comprehensive income (loss) $ 297,794 $ — $ 391,024 $ (5,392 ) $ (387,275 ) $ 296,151 Unaudited Condensed Consolidating Statement of Cash Flows (in Thousands) Nine Months Ended December 31, 2019 NGL Energy NGL Energy Guarantor Non-Guarantor Consolidated OPERATING ACTIVITIES: Net cash (used in) provided by operating activities-continuing operations $ (74,889 ) $ — $ 308,905 $ 39,572 $ 273,588 Net cash provided by operating activities-discontinued operations — — 59,890 — 59,890 Net cash (used in) provided by operating activities (74,889 ) — 368,795 39,572 333,478 INVESTING ACTIVITIES: Capital expenditures — — (380,050 ) (47,203 ) (427,253 ) Acquisitions, net of cash acquired — — (1,262,853 ) — (1,262,853 ) Net settlements of commodity derivatives — — 2,735 — 2,735 Proceeds from sales of assets — — 17,052 4 17,056 Investments in unconsolidated entities — — (21,272 ) — (21,272 ) Distributions of capital from unconsolidated entities — — 440 — 440 Repayments on loan for natural gas liquids facility — — 3,022 — 3,022 Net cash used in investing activities-continuing operations — — (1,640,926 ) (47,199 ) (1,688,125 ) Net cash provided by investing activities-discontinued operations — — 281,908 — 281,908 Net cash used in investing activities — — (1,359,018 ) (47,199 ) (1,406,217 ) FINANCING ACTIVITIES: Proceeds from borrowings under Revolving Credit Facility — — 3,461,000 — 3,461,000 Payments on Revolving Credit Facility — — (3,240,000 ) — (3,240,000 ) Issuance of senior unsecured notes and term credit agreement 450,000 — 250,000 — 700,000 Payments on other long-term debt — — (489 ) — (489 ) Debt issuance costs (8,034 ) — (5,164 ) — (13,198 ) Distributions to general and common unit partners and preferred unitholders (180,021 ) — — — (180,021 ) Distributions to noncontrolling interest owners — — — (570 ) (570 ) Proceeds from sale of preferred units, net of offering costs 622,965 — — — 622,965 Payments for redemption of preferred units (265,128 ) — — — (265,128 ) Common unit repurchases and cancellations (1,205 ) — — — (1,205 ) Payments for settlement and early extinguishment of liabilities — — (1,953 ) — (1,953 ) Investment in NGL Energy Holdings LLC (15,226 ) — — — (15,226 ) Net changes in advances with consolidated entities (358,625 ) — 348,330 10,295 — Net cash provided by financing activities 244,726 — 811,724 9,725 1,066,175 Net increase (decrease) in cash and cash equivalents 169,837 — (178,499 ) 2,098 (6,564 ) Cash and cash equivalents, beginning of period 12,798 — 3,728 2,046 18,572 Cash and cash equivalents, end of period $ 182,635 $ — $ (174,771 ) $ 4,144 $ 12,008 Unaudited Condensed Consolidating Statement of Cash Flows (in Thousands) Nine Months Ended December 31, 2018 NGL Energy NGL Energy Guarantor Non-Guarantor Consolidating Adjustments Consolidated OPERATING ACTIVITIES: Net cash (used in) provided by operating activities-continuing operations $ (92,619 ) $ — $ 92,240 $ 3,759 $ (185 ) $ 3,195 Net cash provided by operating activities-discontinued operations — — 109,242 3,221 — 112,463 Net cash (used in) provided by operating activities (92,619 ) — 201,482 6,980 (185 ) 115,658 INVESTING ACTIVITIES: Capital expenditures — — (301,883 ) (2,106 ) — (303,989 ) Acquisitions, net of cash acquired — — (194,044 ) (3,927 ) — (197,971 ) Net settlements of commodity derivatives — — 5,066 — — 5,066 Proceeds from sales of assets — — 8,335 — — 8,335 Proceeds from divestitures of businesses and investments, net — — 103,594 — — 103,594 Investments in unconsolidated entities — — (92 ) — — (92 ) Repayments on loan for natural gas liquids facility — — 8,371 — — 8,371 Loan to affiliate — — (1,515 ) — — (1,515 ) Net cash used in investing activities-continuing operations — — (372,168 ) (6,033 ) — (378,201 ) Net cash provided by investing activities-discontinued operations — — 929,709 6,982 — 936,691 Net cash provided by investing activities — — 557,541 949 — 558,490 FINANCING ACTIVITIES: Proceeds from borrowings under Revolving Credit Facility — — 2,956,500 — — 2,956,500 Payments on Revolving Credit Facility — — (3,037,000 ) — — (3,037,000 ) Repayment and repurchase of senior unsecured notes (395,471 ) — — — — (395,471 ) Payments on other long-term debt — — (488 ) — — (488 ) Debt issuance costs (16 ) — (899 ) — — (915 ) Contributions from noncontrolling interest owners, net — — — 169 — 169 Distributions to general and common unit partners and preferred unitholders (177,003 ) — — — — (177,003 ) Repurchase of warrants (14,988 ) — — — — (14,988 ) Common unit repurchases and cancellations (162 ) — — — — (162 ) Payments for settlement and early extinguishment of liabilities — — (3,534 ) — — (3,534 ) Net changes in advances with consolidated entities 669,236 — (661,753 ) (7,668 ) 185 — Net cash provided by (used in) financing activities-continuing operations 81,596 — (747,174 ) (7,499 ) 185 (672,892 ) Net cash used in financing activities-discontinued operations — — (295 ) (30 ) — (325 ) Net cash provided by (used in) financing activities 81,596 — (747,469 ) (7,529 ) 185 (673,217 ) Net (decrease) increase in cash and cash equivalents (11,023 ) — 11,554 400 — 931 Cash and cash equivalents, beginning of period 16,915 — 3,329 1,850 — 22,094 Cash and cash equivalents, end of period $ 5,892 $ — $ 14,883 $ 2,250 $ — $ 23,025 |