NGL Energy Partners LP Announces Seasonal Net Loss and Filing of Form 10-Q

NGL Energy Partners LP (NYSE:NGL), "NGL Energy," today reported a seasonal net loss allocable to limited partners for the three month period ended September 30, 2011, of $5.4 million and an Adjusted EBITDA loss of $3.9 million. Net loss per limited partner common and subordinated unit for the period was $(0.36).

For the six month period ended September 30, 2011, NGL Energy reported a seasonal net loss allocable to limited partners of $12.2 million and an Adjusted EBITDA loss of $5.6 million. Net loss per limited partner common and subordinated unit for the period was $(0.88).

Subsequent to September 30, 2011, the Partnership announced the completion of two significant business combinations. In October 2011, the assets of E. Osterman Propane and its affiliates were contributed to NGL Energy, adding 20 service and satellite distributions locations with sales exceeding 40 million gallons of propane annually. The Osterman transaction increased Partnership equity by approximately $84 million and long-term debt by approximately $96 million.

In early November 2011, NGL Energy announced that substantially all of the natural gas liquids assets of SemStream, L.P., "Semstream," a subsidiary of SemGroup Corporation (NYSE: SEMG), had been contributed to the Partnership. The transaction added 12 natural gas liquids terminals, 12 million gallons of above ground propane storage, 3.7 million barrels of leased underground natural gas liquids storage, a rail fleet of 350 leased and 12 owned cars and approximately $93 million of natural gas liquids inventory to the Partnership's assets. The SemStream transaction increased Partnership equity by approximately $188 million and seasonal borrowings by approximately $93 million.

"The net loss for the second quarter is consistent with the seasonal nature of our business. However, the loss included approximately $1.2 million of acquisition related costs that could not be capitalized under GAAP," said Craig S. Jones, the Partnership Chief Financial Officer.

EBITDA and Adjusted EBITDA are non-GAAP financial measures which we believe are used by industry analysts, investors, lenders and rating agencies to assess the financial performance and the operating results of the Partnership's fundamental business activities and should not be considered in isolation or as a substitute for net income, income from operations, or other measures of cash flow. A table reconciling EBITDA and Adjusted EBITDA with appropriate GAAP financial measures is included in the summarized financial information in this release. The Partnership's Adjusted EBITDA excludes from EBITDA the unrealized gain or loss on commodity derivative contracts and gain or loss on asset sales for the period.

NGL Energy also announced that it has filed its quarterly report on Form 10-Q for its fiscal quarter ended September 30, 2011 with the Securities and Exchange Commission. NGL has posted a copy of the Form 10-Q on its website at www.nglenergypartners.com. Unitholders of NGL will be provided a copy of NGL's Form 10-Q free of charge upon request. Any such request should be made in writing directed to: NGL Energy Partners LP, Investor Relations, 6120 South Yale Avenue, #805, Tulsa, OK 74136.

About NGL Energy Partners: NGL Energy Partners LP owns and operates a vertically integrated energy business with three operating segments: midstream, wholesale supply and marketing, and retail propane. For further information about the Partnership and the financial results disclosed in this press release, see our website at www.nglenergypartners.com.

NGL ENERGY PARTNERS LP
Unaudited Condensed Consolidated Balance Sheets
As of September 30, 2011 and March 31, 2011
(U.S. Dollars in Thousands)
	Â			Â
		September 30,			March 31,
		2011			2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	8,403		$	16,337
Accounts receivable - trade, net of allowance for doubtful accounts of $163 and $161, respectively			55,058			44,346
Accounts receivable - affiliates			92			-
Inventories			107,285			12,697
Product exchanges			668			427
Prepaid expenses and other current assets		Â	2,612		Â	3,683
Total current assets			174,118			77,490
					Â
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $5,347 and $2,871, respectively			66,405			66,020
GOODWILL			9,118			8,568
INTANGIBLE ASSETS, net of accumulated amortization of $3,062 and $1,558, respectively		Â	12,632		Â	11,755
Total assets		$	262,273		$	163,833
					Â
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable		$	62,736		$	37,244
Accrued expenses and other payables			4,712			3,711
Product exchanges			10,142			1,045
Advance payments received from customers			33,131			7,714
Current maturities of long-term debt		Â	40,647		Â	830
Total current liabilities			151,368			50,544
					Â
LONG-TERM DEBT, net of current maturities			10,090			65,541
OTHER NON-CURRENT LIABILITIES			50			395
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COMMITMENTS AND CONTINGENCIES
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PARTNERS' EQUITY:
General Partner — 0.1% interest; 14,799 and 10,945 notional units outstanding, respectively			138			72
Limited Partners — 99.9% interest —
Common units — 8,864,222 and 10,933,568 units outstanding, respectively			81,834			47,225
Subordinated units — 5,919,346 and no units outstanding, respectively			18,793			-
Accumulated other comprehensive income —
Foreign currency translation		Â	-		Â	56
Total partners' equity		Â	100,765		Â	47,353
Total liabilities and partners' equity		$	262,273		$	163,833
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NGL ENERGY PARTNERS LP
AND NGL SUPPLY, INC.
Unaudited Condensed Consolidated Statements of Operations
Three Months and Six Months Ended September 30, 2011 and 2010
(U.S. Dollars in Thousands, except per unit and per share amounts)
	Â				Â				Â				Â
														Â
		NGL Energy Partners LP				NGL Supply, Inc.				NGL Energy Partners LP				NGL Supply, Inc.
		Three Months				Three Months				Six Months				Six Months
		Ended				Ended				Ended				Ended
		September 30,				September 30,				September 30,				September 30,
		2011				2010				2011				2010
REVENUES:
Retail propane		$	19,225			$	4,727			$	32,077			$	6,868
Wholesale supply and marketing			190,130				151,295				367,627				309,029
Midstream		Â	686	Â		Â	629	Â		Â	1,182	Â		Â	1,046	Â
Total Revenues		Â	210,041	Â		Â	156,651	Â		Â	400,886	Â		Â	316,943	Â
														Â
COST OF SALES:
Retail propane			13,208				3,393				21,314				4,749
Wholesale supply and marketing			188,144				149,199				365,913				305,965
Midstream		Â	102	Â		Â	101	Â		Â	200	Â		Â	194	Â
Total Cost of Sales		Â	201,454	Â		Â	152,693	Â		Â	387,427	Â		Â	310,908	Â
														Â
Gross Margin			8,587				3,958				13,459				6,035
														Â
OPERATING COSTS AND EXPENSES:
Operating			7,250				2,667				14,392				5,231
General and administrative			4,164				2,105				6,200				3,210
Depreciation and amortization		Â	1,701	Â		Â	674	Â		Â	3,078	Â		Â	1,389	Â
Operating Loss			(4,528	)			(1,488	)			(10,211	)			(3,795	)
														Â
OTHER INCOME (EXPENSE):
Interest income			99				25				225				66
Interest expense			(1,012	)			(300	)			(2,313	)			(372	)
Other, net		Â	46	Â		Â	19	Â		Â	131	Â		Â	124	Â
Loss Before Income Taxes			(5,395	)			(1,744	)			(12,168	)			(3,977	)
														Â
INCOME TAX BENEFIT		Â	-	Â		Â	627	Â		Â	-	Â		Â	1,417	Â
														Â
Net Loss			(5,395	)			(1,117	)			(12,168	)			(2,560	)
														Â
Net Loss Allocated to General Partner			5								12
														Â
Net Loss Attributable to Noncontrolling Interest							16								45
Â		Â				Â				Â				Â
Net Loss Allocable to Limited Partners or Attributable to Parent Equity		$	(5,390	)		$	(1,101	)		$	(12,156	)		$	(2,515	)
														Â
Basic and Diluted Earnings Per Common Unit or Share		$	(0.36	)		$	(55.86	)		$	(0.88	)		$	(128.46	)
														Â
Basic and Diluted Earnings per Subordinated Unit		$	(0.36	)						$	(0.88	)
														Â
Basic and Diluted Weighted average units outstanding:
Common		Â	8,864,222	Â						Â	9,370,997	Â
Subordinated		Â	5,919,346	Â						Â	4,431,423	Â
														Â
Basic and Diluted Weighted average common shares outstanding:						Â	19,711	Â						Â	19,711	Â
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NGL ENERGY PARTNERS LP
AND NGL SUPPLY, INC.
Summarized Operating Information
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VOLUME INFORMATION
	Â		Â		Â		Â
								Â
		Three Months Ended September 30,				Six Months Ended September 30,
Segment		2011		2010		2011		2010
		(gallons in thousands)
Retail propane sales		7,961		2,753		12,964		3,747
Wholesale supply and marketing		129,121		137,186		250,265		272,422
Midstream		28,256		26,119		49,259		43,704
Total		165,338		166,058		312,488		319,873
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ADJUSTED EBITDA RECONCILIATION

The following tables reconcile net loss or net loss to parent equity to our EBITDA and Adjusted EBITDA, each of which are non-GAAP financial measures, for the periods indicated:

	Â	Three Months Ended September 30,							Â	Six Months Ended September 30,
		2011			Â	2010				2011			Â	2010
		(in thousands)
EBITDA:
Net loss or net loss to parent equity		$	(5,395	)		$	(1,101	)		$	(12,168	)		$	(2,515	)
Benefit for income taxes			-				(627	)			-				(1,417	)
Interest expense			1,012				300				2,313				372
Depreciation and amortization		Â	1,901	Â		Â	874	Â		Â	3,478	Â		Â	1,789	Â
EBITDA		$	(2,482	)		$	(554	)		$	(6,377	)		$	(1,771	)
Unrealized (gain) loss on derivative contracts			(1,384	)			(317	)			862				200
Gain on sale of assets		Â	(46	)		Â	(19	)		Â	(46	)		Â	(124	)
Adjusted EBITDA		$	(3,912	)		$	(890	)		$	(5,561	)		$	(1,695	)
																Â

We define EBITDA as net income (loss) or net income (loss) attributable to parent equity, plus income taxes, interest expense and depreciation and amortization expense. We define Adjusted EBITDA as EBITDA excluding the unrealized gain or loss on derivative contracts and the gain or loss on the disposal of assets. EBITDA and Adjusted EBITDA should not be considered an alternative to net income, income before income taxes, cash flows from operating activities, or any other measure of financial performance calculated in accordance with GAAP as those items are used to measure operating performance, liquidity or the ability to service debt obligations. We believe that EBITDA provides additional information for evaluating our ability to make quarterly distributions to our unitholders and is presented solely as a supplemental measure. We believe that Adjusted EBITDA provides additional information for evaluating our financial performance without regard to our financing methods, capital structure and historical cost basis. Further, EBITDA and Adjusted EBITDA, as we define them, may not be comparable to EBITDA and Adjusted EBITDA or similarly titled measures used by other entities.

Contacts:

NGL Energy Partners LP
Craig S. Jones, 918-477-0532
Chief Financial Officer
[e-mail]
or
Mary Ann Vassar, 918-477-0522
Director of Investor Relations
[e-mail]