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 Adjustments | | | | Pro 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, net | | 725,943 | | | (1,254) | | | | (A) | 724,689 | |
| Accounts receivable-affiliates | | 9,435 | | | — | | | | | 9,435 | |
| Inventories | | 158,467 | | | (1,658) | | | | (A) | 156,809 | |
| Prepaid expenses and other current assets | | 109,164 | | | (159) | | | | (A) | 109,005 | |
| Total current assets | | 1,007,838 | | | 63,132 | | | | | 1,070,970 | |
| PROPERTY, PLANT AND EQUIPMENT, net | | 2,706,853 | | | (120,629) | | | | (A) | 2,586,224 | |
| GOODWILL | | 744,439 | | | — | | | | | 744,439 | |
| INTANGIBLE ASSETS, net | | 1,262,613 | | | (64,958) | | | | (A) | 1,197,655 | |
| INVESTMENTS IN UNCONSOLIDATED ENTITIES | | 22,719 | | | — | | | | | 22,719 | |
| OPERATING LEASE RIGHT-OF-USE ASSETS | | 152,146 | | | (3,497) | | | | (A) | 148,649 | |
| OTHER NONCURRENT ASSETS | | 50,733 | | | — | | | | | 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-affiliates | | 119 | | | — | | | | | 119 | |
| Accrued expenses and other payables | | 170,400 | | | (567) | | | | (A) | 169,833 | |
| Advance payments received from customers | | 11,163 | | | (2,787) | | | | (A) | 8,376 | |
| Current maturities of long-term debt | | 2,183 | | | — | | | | | 2,183 | |
| Operating lease obligations | | 47,070 | | | (293) | | | | (A) | 46,777 | |
| Total current liabilities | | 910,803 | | | (3,726) | | | | | 907,077 | |
| LONG-TERM DEBT, net of debt issuance costs and current maturities | | 3,319,030 | | | (5,000) | | | | (A) | 3,314,030 | |
| | | | | | | | |
| | | | | | | | |
| OPERATING LEASE OBLIGATIONS | | 103,637 | | | (3,027) | | | | (A) | 100,610 | |
| OTHER NONCURRENT LIABILITIES | | 114,615 | | | (1,582) | | | | (A) | 113,033 | |
| COMMITMENTS AND CONTINGENCIES | | | | | | | | |
| | | | | | | | |
| CLASS D PREFERRED UNITS | | 551,097 | | | — | | | | | 551,097 | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| EQUITY: | | | | | | | | |
| General partner, representing a 0.1% interest | | (52,189) | | | (61) | | | | (C) | (52,250) | |
| Limited partners, representing a 99.9% interest | | 582,784 | | | (61,244) | | | | (C) | 521,540 | |
| | | | | | | | |
| Class B preferred limited partners | | 305,468 | | | — | | | | | 305,468 | |
| Class C preferred limited partners | | 42,891 | | | — | | | | | 42,891 | |
| Accumulated other comprehensive loss | | (266) | | | — | | | | | (266) | |
| Noncontrolling interests | | 69,471 | | | (51,312) | | | | (A) | 18,159 | |
| Total equity | | 948,159 | | | (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 Adjustments | | | | Pro Forma NGL Energy Partners LP |
| | | | | | | | |
| REVENUES | | $ | 5,227,023 | | | $ | (12,523) | | | | (D) | $ | 5,214,500 | |
| | | | | | | | |
| | | | | | | | |
| COST OF SALES | | 4,493,822 | | | (220) | | | | (D) | 4,493,602 | |
| | | | | | | | |
| | | | | | | | |
| OPERATING COSTS AND EXPENSES: | | | | | | | | |
| Operating | | 254,562 | | | (7,867) | | | | (D) | 246,695 | |
| General and administrative | | 70,468 | | | (114) | | | | (D) | 70,354 | |
| Depreciation and amortization | | 317,227 | | | (9,652) | | | | (D) | 307,575 | |
| Loss on disposal or impairment of assets, net | | 475,436 | | | (6) | | | | (D) | 475,430 | |
| Revaluation of liabilities | | 6,261 | | | — | | | | | 6,261 | |
| Operating Loss | | (390,753) | | | 5,336 | | | | | (385,417) | |
| | | | | | | | |
| OTHER INCOME (EXPENSE): | | | | | | | | |
| Equity in earnings of unconsolidated entities | | 1,938 | | | — | | | | | 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 BENEFIT | | 3,391 | | | — | | | | | 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 PARTNER | | 731 | | | (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 OUTSTANDING | | 128,980,823 | | | | | | | 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.
