Exhibit 99.2
NGL ENERGY PARTNERS LP AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
Introduction
On March 30, 2023, NGL Energy Partners LP (“we,” “us,” “our” or “the Partnership”) sold its marine assets to two third-parties for total consideration of $111.65 million in cash less estimated expenses of approximately $7.5 million. The marine assets previously comprised a portion of the Partnership’s Crude Oil Logistics segment.
The following sets forth the unaudited pro forma condensed consolidated balance sheet of the Partnership as of December 31, 2022 and the unaudited pro forma condensed consolidated statements of operations for the nine months ended December 31, 2022 and the year ended March 31, 2022. The unaudited pro forma condensed consolidated balance sheet gives pro forma effect only for the sale of the marine assets as if it had occurred on December 31, 2022. The unaudited pro forma condensed consolidated statement of operations give pro forma effect for the sale of the marine assets as if it had occurred on April 1, 2021.
These unaudited pro forma condensed consolidated financial statements have been derived from the Partnership’s historical consolidated financial statements, which are included in its Quarterly Report on Form 10-Q for the quarter ended December 31, 2022 and its Annual Report on Form 10-K for the year ended March 31, 2022. 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 December 31, 2022
(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 | | $ | 4,534 | | | $ | 111,650 | | | | (A) | $ | 68,944 | |
| | | | (7,518) | | | | (A) | |
| | | | (39,722) | | | | (B) | |
| Accounts receivable-trade, net | | 1,129,294 | | | — | | | | | 1,129,294 | |
| Accounts receivable-affiliates | | 10,257 | | | — | | | | | 10,257 | |
| Inventories | | 238,073 | | | — | | | | | 238,073 | |
| Prepaid expenses and other current assets | | 135,980 | | | — | | | | | 135,980 | |
| Total current assets | | 1,518,138 | | | 64,410 | | | | | 1,582,548 | |
| PROPERTY, PLANT AND EQUIPMENT, net | | 2,400,508 | | | (81,188) | | | | (C) | 2,319,320 | |
| GOODWILL | | 744,439 | | | (30,996) | | | | (C) | 713,443 | |
| INTANGIBLE ASSETS, net | | 1,078,631 | | | — | | | | | 1,078,631 | |
| INVESTMENTS IN UNCONSOLIDATED ENTITIES | | 22,769 | | | — | | | | | 22,769 | |
| OPERATING LEASE RIGHT-OF-USE ASSETS | | 85,576 | | | — | | | | | 85,576 | |
| OTHER NONCURRENT ASSETS | | 64,030 | | | (130) | | | | (C) | 63,900 | |
| Total assets | | $ | 5,914,091 | | | $ | (47,904) | | | | | $ | 5,866,187 | |
| LIABILITIES AND EQUITY | | | | | | | | |
| CURRENT LIABILITIES: | | | | | | | | |
| Accounts payable-trade | | $ | 952,506 | | | $ | — | | | | | $ | 952,506 | |
| Accounts payable-affiliates | | 65 | | | — | | | | | 65 | |
| Accrued expenses and other payables | | 174,400 | | | — | | | | | 174,400 | |
| Advance payments received from customers | | 20,957 | | | — | | | | | 20,957 | |
| Current maturities of long-term debt | | 303,788 | | | (2,536) | | | | (B) | 301,252 | |
| Operating lease obligations | | 32,883 | | | — | | | | | 32,883 | |
| Total current liabilities | | 1,484,599 | | | (2,536) | | | | | 1,482,063 | |
| LONG-TERM DEBT, net of debt issuance costs and current maturities | | 2,921,174 | | | (37,186) | | | | (B) | 2,883,988 | |
| OPERATING LEASE OBLIGATIONS | | 53,518 | | | — | | | | | 53,518 | |
| OTHER NONCURRENT LIABILITIES | | 103,378 | | | — | | | | | 103,378 | |
| COMMITMENTS AND CONTINGENCIES | | | | | | | | |
| | | | | | | | |
| CLASS D PREFERRED UNITS | | 551,097 | | | — | | | | | 551,097 | |
| | | | | | | | |
| EQUITY: | | | | | | | | |
| General partner, representing a 0.1% interest | | (52,484) | | | (8) | | | | (D) | (52,492) | |
| Limited partners, representing a 99.9% interest | | 488,221 | | | (8,174) | | | | (D) | 480,047 | |
| Class B preferred limited partners | | 305,468 | | | — | | | | | 305,468 | |
| Class C preferred limited partners | | 42,891 | | | — | | | | | 42,891 | |
| Accumulated other comprehensive loss | | (439) | | | — | | | | | (439) | |
| Noncontrolling interests | | 16,668 | | | — | | | | | 16,668 | |
| Total equity | | 800,325 | | | (8,182) | | | | | 792,143 | |
| Total liabilities and equity | | $ | 5,914,091 | | | $ | (47,904) | | | | | $ | 5,866,187 | |
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 nine months ended December 31, 2022
(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 | | $ | 6,646,070 | | | $ | (25,362) | | | | (E) | $ | 6,620,708 | |
| | | | | | | | |
| COST OF SALES | | 5,879,499 | | | (15,514) | | | | (E) | 5,863,985 | |
| | | | | | | | |
| OPERATING COSTS AND EXPENSES: | | | | | | | | |
| Operating | | 237,371 | | | (5,956) | | | | (E) | 231,415 | |
| General and administrative | | 50,601 | | | — | | | | | 50,601 | |
| Depreciation and amortization | | 204,105 | | | (5,562) | | | | (E) | 198,543 | |
| Loss on disposal or impairment of assets, net | | 15,791 | | | — | | | | | 15,791 | |
| Operating Income | | 258,703 | | | 1,670 | | | | | 260,373 | |
| | | | | | | | |
| OTHER INCOME (EXPENSE): | | | | | | | | |
| Equity in earnings of unconsolidated entities | | 3,094 | | | — | | | | | 3,094 | |
| Interest expense | | (211,528) | | | 2,644 | | | | (E) | (208,884) | |
| Gain on early extinguishment of liabilities, net | | 6,808 | | | — | | | | | 6,808 | |
| Other income, net | | 28,731 | | | — | | | | | 28,731 | |
| Income Before Income Taxes | | 85,808 | | | 4,314 | | | | | 90,122 | |
| | | | | | | | |
| INCOME TAX EXPENSE | | (113) | | | — | | | | | (113) | |
| Net Income | | 85,695 | | | 4,314 | | | | | 90,009 | |
| LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | | (790) | | | — | | | | | (790) | |
| NET INCOME ATTRIBUTABLE TO NGL ENERGY PARTNERS LP | | 84,905 | | | 4,314 | | | | | 89,219 | |
| LESS: DISTRIBUTIONS TO PREFERRED UNITHOLDERS | | (90,482) | | | — | | | | | (90,482) | |
| LESS: NET LOSS ALLOCATED TO GENERAL PARTNER | | 6 | | | (5) | | | | (F) | 1 | |
| NET LOSS ALLOCATED TO COMMON UNITHOLDERS | | $ | (5,571) | | | $ | 4,309 | | | | | $ | (1,262) | |
| BASIC AND DILUTED LOSS PER COMMON UNIT | | $ | (0.04) | | | | | | | $ | (0.01) | |
| BASIC AND DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING | | 130,802,920 | | | | | | | 130,802,920 | |
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, 2022
(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 | | $ | 7,947,915 | | | $ | (22,712) | | | | (E) | $ | 7,925,203 | |
| | | | | | | | |
| COST OF SALES | | 7,139,312 | | | (16,059) | | | | (E) | 7,123,253 | |
| | | | | | | | |
| OPERATING COSTS AND EXPENSES: | | | | | | | | |
| Operating | | 285,535 | | | (7,174) | | | | (E) | 278,361 | |
| General and administrative | | 63,546 | | | — | | | | | 63,546 | |
| Depreciation and amortization | | 288,720 | | | (7,690) | | | | (E) | 281,030 | |
| Loss on disposal or impairment of assets, net | | 94,254 | | | 6 | | | | (E) | 94,260 | |
| Revaluation of liabilities | | (6,495) | | | — | | | | | (6,495) | |
| Operating Income | | 83,043 | | | 8,205 | | | | | 91,248 | |
| | | | | | | | |
| OTHER INCOME (EXPENSE): | | | | | | | | |
| Equity in earnings of unconsolidated entities | | 1,400 | | | — | | | | | 1,400 | |
| Interest expense | | (271,640) | | | 3,711 | | | | (E) | (267,929) | |
| Gain on early extinguishment of liabilities, net | | 1,813 | | | — | | | | | 1,813 | |
| Other income, net | | 2,254 | | | (154) | | | | (E) | 2,100 | |
| Loss Before Income Taxes | | (183,130) | | | 11,762 | | | | | (171,368) | |
| | | | | | | | |
| INCOME TAX EXPENSE | | (971) | | | — | | | | | (971) | |
| Net Loss | | (184,101) | | | 11,762 | | | | | (172,339) | |
| LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | | (655) | | | — | | | | | (655) | |
| NET LOSS ATTRIBUTABLE TO NGL ENERGY PARTNERS LP | | (184,756) | | | 11,762 | | | | | (172,994) | |
| LESS: DISTRIBUTIONS TO PREFERRED UNITHOLDERS | | (104,163) | | | — | | | | | (104,163) | |
| LESS: NET LOSS ALLOCATED TO GENERAL PARTNER | | 289 | | | (12) | | | | (F) | 277 | |
| NET LOSS ALLOCATED TO COMMON UNITHOLDERS | | $ | (288,630) | | | $ | 11,750 | | | | | $ | (276,880) | |
| BASIC AND DILUTED LOSS PER COMMON UNIT | | $ | (2.22) | | | | | | | $ | (2.13) | |
| BASIC AND DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING | | 129,840,234 | | | | | | | 129,840,234 | |
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 net cash proceeds received at closing from the sale of the marine assets for total consideration of $111.65 million, less estimated expenses of approximately $7.5 million.
B.Prior to the closing of the transaction, we had an equipment loan which was secured by certain of our barges and towboats. Upon closing of the transaction, we paid off the equipment loan.
C.Represents the removal of the marine assets and liabilities from the balance sheet.
D.Represents the pro forma non-recurring loss on the sale that would have been recorded if the Partnership had completed the sale of the marine assets on December 31, 2022.
E.Represents the pro forma effect of eliminating the results of operations of the marine assets for the nine months ended December 31, 2022 and the year ended March 31, 2022 from the presentation of net income (loss).
F.Represents our general partner’s interest in the transaction accounting adjustments related to the sale of the marine assets for the nine months ended December 31, 2022 and the year ended March 31, 2022.
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.
