EX-99.2 5 exhibit992proformafinancia.htm EX-99.2 Document

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 AdjustmentsPro 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, net1,129,294 — 1,129,294 
Accounts receivable-affiliates10,257 — 10,257 
Inventories238,073 — 238,073 
Prepaid expenses and other current assets135,980 — 135,980 
Total current assets1,518,138 64,410 1,582,548 
PROPERTY, PLANT AND EQUIPMENT, net2,400,508 (81,188)(C)2,319,320 
GOODWILL744,439 (30,996)(C)713,443 
INTANGIBLE ASSETS, net1,078,631 — 1,078,631 
INVESTMENTS IN UNCONSOLIDATED ENTITIES22,769 — 22,769 
OPERATING LEASE RIGHT-OF-USE ASSETS85,576 — 85,576 
OTHER NONCURRENT ASSETS64,030 (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-affiliates65 — 65 
Accrued expenses and other payables174,400 — 174,400 
Advance payments received from customers20,957 — 20,957 
Current maturities of long-term debt303,788 (2,536)(B)301,252 
Operating lease obligations32,883 — 32,883 
Total current liabilities1,484,599 (2,536)1,482,063 
LONG-TERM DEBT, net of debt issuance costs and current maturities2,921,174 (37,186)(B)2,883,988 
OPERATING LEASE OBLIGATIONS53,518 — 53,518 
OTHER NONCURRENT LIABILITIES103,378 — 103,378 
COMMITMENTS AND CONTINGENCIES
CLASS D PREFERRED UNITS551,097 — 551,097 
EQUITY:
General partner, representing a 0.1% interest(52,484)(8)(D)(52,492)
Limited partners, representing a 99.9% interest488,221 (8,174)(D)480,047 
Class B preferred limited partners305,468 — 305,468 
Class C preferred limited partners42,891 — 42,891 
Accumulated other comprehensive loss(439)— (439)
Noncontrolling interests16,668 — 16,668 
Total equity800,325 (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 AdjustmentsPro Forma NGL Energy Partners LP
REVENUES$6,646,070 $(25,362)(E)$6,620,708 
COST OF SALES5,879,499 (15,514)(E)5,863,985 
OPERATING COSTS AND EXPENSES:
Operating237,371 (5,956)(E)231,415 
General and administrative50,601 — 50,601 
Depreciation and amortization204,105 (5,562)(E)198,543 
Loss on disposal or impairment of assets, net15,791 — 15,791 
Operating Income258,703 1,670 260,373 
OTHER INCOME (EXPENSE):
Equity in earnings of unconsolidated entities3,094 — 3,094 
Interest expense (211,528)2,644 (E)(208,884)
Gain on early extinguishment of liabilities, net6,808 — 6,808 
Other income, net28,731 — 28,731 
Income Before Income Taxes85,808 4,314 90,122 
INCOME TAX EXPENSE(113)— (113)
Net Income85,695 4,314 90,009 
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS(790)— (790)
NET INCOME ATTRIBUTABLE TO NGL ENERGY PARTNERS LP84,905 4,314 89,219 
LESS: DISTRIBUTIONS TO PREFERRED UNITHOLDERS(90,482)— (90,482)
LESS: NET LOSS ALLOCATED TO GENERAL PARTNER6 (5)(F)1 
NET LOSS ALLOCATED TO COMMON UNITHOLDERS$(5,571)$4,309 $(1,262)
BASIC AND DILUTED LOSS PER COMMON UNIT$(0.04)$(0.01)
BASIC AND DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING130,802,920 130,802,920 

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 AdjustmentsPro Forma NGL Energy Partners LP
REVENUES$7,947,915 $(22,712)(E)$7,925,203 
COST OF SALES7,139,312 (16,059)(E)7,123,253 
OPERATING COSTS AND EXPENSES:
Operating285,535 (7,174)(E)278,361 
General and administrative63,546 — 63,546 
Depreciation and amortization288,720 (7,690)(E)281,030 
Loss on disposal or impairment of assets, net94,254 6 (E)94,260 
Revaluation of liabilities(6,495)— (6,495)
Operating Income83,043 8,205 91,248 
OTHER INCOME (EXPENSE):
Equity in earnings of unconsolidated entities1,400 — 1,400 
Interest expense (271,640)3,711 (E)(267,929)
Gain on early extinguishment of liabilities, net1,813 — 1,813 
Other income, net2,254 (154)(E)2,100 
Loss Before Income Taxes(183,130)11,762 (171,368)
INCOME TAX EXPENSE(971)— (971)
Net Loss(184,101)11,762 (172,339)
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS(655)— (655)
NET LOSS ATTRIBUTABLE TO NGL ENERGY PARTNERS LP(184,756)11,762 (172,994)
LESS: DISTRIBUTIONS TO PREFERRED UNITHOLDERS(104,163)— (104,163)
LESS: NET LOSS ALLOCATED TO GENERAL PARTNER289 (12)(F)277 
NET LOSS ALLOCATED TO COMMON UNITHOLDERS$(288,630)$11,750 $(276,880)
BASIC AND DILUTED LOSS PER COMMON UNIT$(2.22)$(2.13)
BASIC AND DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING129,840,234 129,840,234 

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.