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Investor Presentation
August 2018
This presentation includes “forward looking statements” within the meaning of
federal securities laws. All statements, other than statements of historical fact,
included in this presentation are forward looking statements, including
statements regarding the Partnership’s future results of operations or ability to
generate income or cash flow, make acquisitions, or make distributions to
unitholders. Words such as “anticipate,” “project,” “expect,” “plan,” “goal,”
“forecast,” “intend,” “could,” “believe,” “may” and similar expressions and
statements are intended to identify forward-looking statements. Although
management believes that the expectations on which such forward-looking
statements are based are reasonable, neither the Partnership nor its general
partner can give assurances that such expectations will prove to be correct.
Forward looking statements rely on assumptions concerning future events and
are subject to a number of uncertainties, factors and risks, many of which are
outside of management’s ability to control or predict. If one or more of these
risks or uncertainties materialize, or if underlying assumptions prove incorrect,
the Partnership’s actual results may vary materially from those anticipated,
estimated, projected or expected.
Additional information concerning these and other factors that could impact the
Partnership can be found in Part I, Item 1A, “Risk Factors” of the Partnership’s
Annual Report on Form 10-K for the year ended March 31, 2018 and in the other
reports it files from time to time with the Securities and Exchange Commission.
Readers are cautioned not to place undue reliance on any forward-looking
statements contained in this presentation, which reflect management’s opinions
only as of the date hereof. Except as required by law, the Partnership
undertakes no obligation to revise or publicly update any forward-looking
statement.
2
Company Information
Contact Information
Forward Looking Statements NGL Energy Partners LP
Corporate Headquarters
NGL Energy Partners LP
6120 South Yale Avenue, Suite 805
Tulsa, Oklahoma 74136
Website
www.nglenergypartners.com
Investor Relations
Contact us at (918) 481-1119
or e-mail us at
(1) Market Data and Unit Count as of 8/9/2018. (NGL-PB ticker for Class B Preferred Units)
(2) Balance Sheet Data as of 6/30/2018, Market Capitalization and Enterprise Value include Preferred Equity
NYSE Ticker NGL
Unit Price (1) 12.75 $
Market Capitalization (1)(2) 2.00 $ Billion
Enterprise Value (1)(2) 5.06 $ Billion
Yield (1) 12.24%
3
NGL Energy Partners LP
Overview
Segment Contribution
Crude
Logistics
Business Overview
4
Refined Products/
Renewables
Purchases and transports crude oil for resale to a pipeline injection point, storage terminal, barge loading facility, rail facility, refinery or trade hub
Provides transportation, terminaling, and storage of crude oil and condensate to third parties for a fixed-fee per barrel
Long term, take-or-pay contracts on Grand Mesa Pipeline
Provides services for the treatment, processing, and disposal of wastewater and solids generated from oil and natural gas production
Revenue streams from the disposal of wastewater and solids, transportation of water through pipelines, truck and frac-tank washouts, and recovered hydrocarbons
Transports, stores, and markets NGLs to and from refiners, gas processors, propane wholesalers, propane retailers, proprietary terminals, petrochemical plants, diluent markets and other merchant users of NGLs
Large provider of butane to refiners for gasoline blending
Utilizes underground storage to take advantage of seasonal demand
Purchase refined petroleum products primarily in the Gulf Coast, Southeast, and Midwest regions of the United States and schedule them for delivery primarily on the Colonial, Plantation, Magellan and NuStar pipelines
Sell our products to commercial and industrial end users, independent retailers, distributors, marketers, government entities, and other wholesalers
Purchase unfinished gasoline blending components for subsequent blending into finished gasoline to supply our marketing business as well as third parties
Water
Solutions
Liquids
Note: On July 10th 2018, NGL Energy Partners LP announced that it has closed the previously announced transaction to sell the remainder of its Retail Propane
Business. See press release on NGL Energy Partners website
Business Diversity
5
Crude Oil
Production and
Transportation/
Storage Demand
Higher Prices
29-32%
Butane Blending,
Weather and NGL
Production
Lower Prices
12-13%
Motor Fuels
Supply/Demand
and Basis
Differentials
Lower Prices
12-15%
Water Volumes,
Rig Count and
Crude Oil Price
Higher Prices
42-44%
Primary Drivers:
Benefits From:
FY19 Forecasted
EBITDA
Contribution %:
NGL LOGO
With the sale of its Retail Propane assets, NGL is making a strategic shift in its business which positions the Partnership to
focus on, and reinvest in, Crude Logistics and Water Solutions, its two best performing and largest growth platforms
Crude
Logistics Water
Solutions
Liquids
Refined Products/
Renewables
Diversified Across Multiple Businesses and Producing Basins
Common Carrier Propane
Pipelines Basins
Grand Mesa Pipeline
Eagle Ford
Marcellus Shale
DJ Basin
Pinedale Anticline
Jonah Field
Niobrara Shale
Green River Basin
Bakken Shale
Wattenberg Field
Mississippi Lime
Granite Wash
Permian Basin
Water Services
NGL Assets
Crude Barges and
Tug Boats
Crude Oil Logistics
Colonial Products Pipeline TransMontaigne Terminal
NGL Rack Marketing Terminal
NGL Owned/Leased Assets
NGL Utilized Assets
Assets and Marketing
Presence Santa Fe Products Pipeline
Magellan Products Pipeline
NuStar Products Pipeline
NGL Crude Terminal
NuStar Energy Terminal
NGL Renewable Marketing
Terminal
6
NGL Gas Blending Terminal
Pro Forma 6/30/2018 Variance
Cash and Equivalents 13,682$ 13,682$ -$
Total Debt:
Senior Secured Revolving Credit Facilities
Working Capital Facility 429,500 1,060,500 (631,000)
Acquisition Facility - 265,500 (265,500)
Senior Unsecured Notes 1,720,554 1,720,554 -
Other Long-Term Debt 5,815 5,815 -
Total Debt, Including W.C. Facility 2,155,869$ 3,052,369$ (896,500)$
10.75% Class A Convertible Preferred Units 91,559$ 91,559$ -$
Equity:
General Partner (50,919) (50,919) -
Limited Partners 1,740,410 1,740,410 -
Class B preferred limited partners 202,731 202,731 -
Accumulated Other Comprehensive Loss (257) (257) -
Noncontrolling interests 79,463 79,463 -
Gain on Sale of Retail Business 437,312 - 437,312
Total Capitalization 4,656,168$ 5,115,356$ (459,188)$
Debt to Total Capitalization 46% 60% -13%
Credit Facility Availability 1,335,500$ 439,000$ 896,500$
7
Segment Contribution Retail Propane Divestiture Highlights
On July 10th 2018, NGL Energy Partners LP announced that it closed the previously announced transaction to sell the remainder of its Retail Propane
business for $896.5 million, after adjusting for estimated working capital, representing more than 10x Fiscal 2018 Adjusted EBITDA.
Note: See press releases on NGL Energy Partners website
(1) Pro Forma based on June 30, 2018 net assets held for sale of $459.1 million and net proceeds of $896.5 million (net of working capital) applied to acquisition and working capital facilities.
Value received by NGL from propane divestitures totals ~ $1.1 billion (>10x FY18 EBITDA)
Divestiture reduces segment related maintenance capital expenditures by ~$10 million per year
Use of net proceeds from the sale expected to be neutral to slightly dilutive to near-term cash flow per unit, with accretion being driven over time as a result of certain growth opportunities that are included in the FY2019 guidance
Strengthens balance sheet and allows for reduced dependence on debt and equity markets as a source of funding in the near-term
NGL continues to target distribution coverage in excess of 1.3x and expects to achieve that coverage for FY 2019
~$896.5 million of proceeds used to immediately repay certain indebtedness
Expected to achieve and maintain target compliance leverage of ~ 3.25x
Positions NGL to focus on, and reinvest in, two of its largest growth platforms - Crude Logistics and Water Solutions
Portion of proceeds to be deployed for strategic growth acquisitions in the Water Solutions segment, with certain water disposal acquisitions already identified
Narrows operational scope to four business segments
Reduces seasonality and weather-dependency of NGL’s earnings
Proceeds to be used to meaningfully reduce debt and enhance liquidity
Transitions to a “self-funding” model highlighted by low leverage and high
distribution coverage
Pro Forma Capitalization (In Thousands)
(1)
NGL Operational Assumptions
8
Business Strategy
Build a Diversified
Vertically Integrated
Energy Business
Achieve Organic Growth
by Investing in New
Assets
Accretive Growth
through Strategic
Acquisitions
Focus on Businesses
that Generate Long-
Term Fee Based Cash
Flows
Transport crude oil from the wellhead to refiners
Wastewater from the wellhead to treatment for disposal, recycle or discharge
Natural Gas Liquids from fractionators / hubs to refineries and end users
Refined Products from refiners to customers
Projects that increase volumes, enhance our operations and generate attractive rates of return
Accretive organic growth opportunities that originate from assets we own and operate
Invest in existing businesses such as crude oil logistics and water solutions which provide high quality, fee based revenues
Build upon our vertically integrated business
Scale our existing operating platforms
Enhance our geographic diversity
Continue our successful track record of acquiring companies and assets at attractive prices
Focus on long-term, fee based contracts and back-to-back transactions that minimize commodity price exposure
Increase cash flows that are supported by certain fee-based, multi-year contracts that include acreage dedications or volume commitments
Disciplined Capital
Structure
Target leverage levels that are consistent with investment grade companies
Maintain sufficient liquidity to manage existing and future capital requirements and take advantage of market opportunities
Prudent distribution coverage to manage commodity cycles and fund growth opportunities
9
Operating Segments
10
Crude Logistics Platform
Grand Mesa Pipeline Crude Assets Crude Transportation Crude Marketing
~550 miles of 20” Crude oil
pipeline from the DJ Basin to
Cushing, OK
150,000 BPD capacity
16 total truck unloading bays
970,000 BBL origin tankage
Our Crude Oil Logistics segment purchases crude oil from producers and transports it to refineries or for resale at pipeline
injection stations, storage terminals, barge loading facilities, rail facilities, refineries, and other trade hubs, and provides
storage, terminaling, trucking, marine and pipeline transportation services through its owned assets
4 NGL Crude Logistics Tows NGL Cushing Crude Oil Storage Tanks
Own 7 storage terminal facilities
3.6 MMbbls of storage in Cushing
1.7 MMbbls of storage in addition
to Cushing
Own 10 tows, 19 barges with
>25Mbbls per barge capacity
797 GP railcars leased or owned
163 owned trucks and 260 owned
trailers
27 LACT units
Operations are centered near
areas of high crude oil production,
such as the Bakken, DJ, Permian,
Eagle Ford, Anadarko, STACK,
SCOOP, Granite Wash,
Mississippi Lime, and southern
Louisiana at the Gulf of Mexico
11
Segment Contribution Grand Mesa Pipeline
Source: Current rig locations denoted by a black rig icon and the heat map represents permit activity in the last 180 days with permits denoted as dots based on data from DrillingInfo
as of 8/7/18
Grand Mesa Pipeline NGL Crude Terminal
DJ Basin
Niobrara Shale
Wattenberg Field
Cushing Storage
= Lucerne & Riverside
= Platteville
Grand Mesa
Share of
Capacity
~550 miles of 20” Crude oil pipeline from the DJ Basin to
Cushing, OK
NGL/Grand Mesa have 37.5% undivided joint interest
150,000 BPD capacity
Origin Station
Terminals
Lucerne & Riverside Terminals in Weld County, CO
16 total truck unloading bays capable of unloading over 325
trucks per day in aggregate
970,000 BBL origin tankage
Batching
Capabilities
Grand Mesa offers two unique batching specs allowing
producers to preserve their crude oil quality
Gathering
Connectivity
The Lucerne origin has inbound receipt connections to
multiple gathering systems including:
Platte River Midstream
Saddle Butte Pipeline
Noble Midstream
Destination
Terminal
NGL’s Cushing Terminal has 3.6 million barrels of total shell
capacity
Offers producers connectivity to multiple markets
including the Gulf Coast via TransCanada Marketlink
Financial
Guidance
Total volumes for FY19 average ~115kbpd
Average remaining contract term on the pipeline is
approximately 7 years
$-
$20
$40
$60
$80
$100
6/30/2015 6/30/2016 6/30/2017 6/30/2018
$28
$73
$48 $48
$106
$145-155
$13 $11
$12
$-
$40
$80
$120
$160
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019E
Glass Mountain Crude Oil Logistics
12
Segment Contribution Crude Oil Logistics
Crude WTI Spot Price Area of Operation
Adjusted EBITDA (In Millions) FY 2019 Forecast Assumptions
Grand Mesa Pipeline
– Total volumes average ~115kbpd
Crude Assets
– Cushing market rates reduced with no assumed Contango
– Glass Mountain Sale in FY 2018
Crude Oil Marketing/Transportation
– Three new tow boats are put into service (1 every three
months starting in June)
– Assumed Crude Price forward curve April 1, 2018 – March
31, 2019 ($64.56-$59.63)
$61 $59
$118
13
Water Solutions Platform
Water Disposal Water Recycling Solids Solutions Water Pipelines
120 completed SWD wells with
~3.0 million BPD of total capacity
spanning
Bakken (ND)
Pinedale Anticline (WY)
DJ (CO)
Eagle Ford (TX)
Midland (TX)
Delaware (TX)
24x7 operations at most locations
1 water recycling facility with
~60,000 BPD of total capacity in
Wyoming
Over 30 million barrels of water
recycled and discharged since
June 2012
Multi-patented 14-step water
treatment process
8 solids disposal facilities with
~60,000 BPD of total capacity in
Texas
Provides producers with in-field
disposal alternative for Gels, High
Solids Content Water, Water and
Oil-Based Mud, and Tank Bottoms
generated from oil and natural gas
production and drilling activities
~100 miles of water pipelines
owned by NGL
~100 miles of water pipelines
owned by producers
Currently disposing of > 340,000
BPD of wastewater via pipelines
(both NGL and producer owned)
Our Water Solutions segment provides services for the treatment and disposal of wastewater generated from crude oil
and natural gas production and for the disposal of solids such as tank bottoms, drilling fluids and drilling muds and
performs truck and frac tank washouts. In addition, our Water Solutions segment sells the recovered hydrocarbons that
result from performing these services
NGL saltwater disposal facility with solids processing capacity
14
Delaware Basin – Characteristics
Note: Includes FY2019 Q1 Acquisitions
(1) Delaware Basin Production Statistics by County per DrillingInfo Data as of 8/10/18
Sample of Delaware Customers Salt Water
Disposal
Facilities &
Disposal Wells
NGL has 26 Salt Water Disposal Facilities & 42 Disposal Wells
in-service
23 Facilities in Texas and 3 in New Mexico
NGL has 1 Solids Disposal Facilities in-service at its Orla
Facility
Water
Pipelines
NGL has 45 pipeline tie-ins currently in-service
Pipelines (owned and third party) are moving ~265k bpd
in the basin
~50 miles of owned water pipelines in-service
~130 miles of water pipeline projects in progress at various
stages of development
Includes trunk line from Carlsbad, New Mexico to Pecos,
Texas
Crude
Production (1)
Crude Oil Production in the Delaware Basin reached 43.4
million BBLs (~1.4mm bpd) in March 2018
Market
Dynamics (1)
Produced Water to Crude Ratio of Approximately 4 to 1
Total Water Disposal Market of ~5.7mm bpd (based on
March 2018 crude production and water to crude ratio)
Water Disposal Market still very fragmented
Continue to see robust produced and flow back water demand
Demand expected to increase with production
Capital Focus NGL invested ~$126 million in acquisitions in the first quarter
of Fiscal Year 2019
NGL invested ~$40 million in Delaware Basin organic projects
in the first quarter of Fiscal Year 2019
Expected return of 5x or less on acquisitions and organic
projects
15
Delaware Basin – SWD Facilities & Pipelines
Note: Includes FY2019 Q1 Acquisitions
0
100
200
300
400
500
6/30/2015 6/30/2016 6/30/2017 6/30/2018
Permian Basin Eagle Ford Basin DJ Basin
16
Segment Contribution Water Solutions
U.S Oil Rig Count(1) Area of Operation
Adjusted EBITDA (In Millions) FY 2019 Forecast Assumptions
(1) Baker Hughes as of August 2018.
$68
$126
$72 $63
$116
$200-225
$-
$100
$200
$300
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019E
Primary growth focused in Permian (Delaware) and DJ basins
Average skim oil percentage forecasted at 0.43% for each disposal volume
– Assumed Crude Price forward curve April 1, 2018 – March 31, 2019 ($64.56-$59.63) further adjusted for Differentials and Hedges
Pipelines, Solids disposal, Washouts, and other service revenues increase with volumes
Growth capital and planned acquisitions adds several new facilities and disposal wells to existing footprint
– ~$140 - $150 million in acquisitions
– ~$100 million in organic growth
Propane/Butane Wholesale
Office locations in Denver,
Chicago, Calgary, Houston, Tulsa
Fleet of ~4,200 railcars and will
reduce fleet to ~3,700 by fiscal
year end
23 transloading units
17
NGL Liquids Platform
NGL Terminals Sawtooth
400 Customers
Shipper on 5 common carrier
pipelines
Approximately 2.8 million barrels of
leased underground storage, 0.35
million barrels of above ground
storage
21 Terminals with throughput
capacity of 11.9 million gallons per
day
12 terminals with rail
unloading capability
4 Multi-products terminals
9 Pipe-connected terminals
5 Caverns
~6.0 million barrels of butane and
propane storage capacity in Utah
Newly created JV structure to store
refined products
Our Liquids segment provides natural gas liquids procurement, storage, transportation, and supply services to
customers through assets owned by us and third parties. We also sell butanes and natural gasolines to refiners and
producers for use as blending stocks and diluent and assist refineries by managing their seasonal butane supply needs
Railcar Rack NGL Thackerville Liquids Terminal West Memphis NGL Wholesale Liquids Terminal
18
Segment Contribution Liquids
Heating Degree Days Area of Operation
Adjusted EBITDA (In Millions) FY 2019 Forecast Assumptions
$87 $93 $101
$64 $50
$55-70
$-
$50
$100
$150
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019E
Propane/Butane Wholesale
– Assumes a normal winter (5-year average of HDD)
– Assumes butane blending economics are better for refiners than FY 2018
NGL Terminals
– Results are determined by propane demand
Sawtooth
– Newly created JV structure with additional commercial development drive
– Additional rights to store refined products
19
Refined Products & Renewables Platform
Southeast Rack Marketing and Other Gas Blending
Line Space on Colonial and
Plantation pipelines
Long-term Lease of TLP SE
Terminals along Colonial and
Plantation Pipelines
Approximately 7.0 million barrels of
storage capacity
Utilizing 3 major Pipelines
Magellan
NuStar
Explorer
Ethanol and Biodiesel Blending
Approximately 1.0 million barrels of
storage capacity
Rack marketing services from over
180 terminals in 34 states
providing diesel and gasoline
products
Margins driven by normal
supply/demand activity as well as
disruption events such as weather
or refinery/pipeline issues
TLP-Collins Storage facility in
Collins, MS
1.15 million barrels capacity
Colonial Pipeline in/out
Nustar Storage Facility in Linden,
NJ
715K barrels capacity
Our Refined Products and Renewables segment conducts gasoline, diesel, ethanol, and biodiesel marketing operations. In
addition, in certain storage locations, our Refined Products and Renewables segment may also purchase unfinished
gasoline blending components for subsequent blending into finished gasoline to supply our marketing business as well
as third parties
Collins, MS Refined Products Terminal
7,500
8,000
8,500
9,000
9,500
10,000
2011 to 2015 Range
2011 to 2015 Average 2016
2017 2018
20
Segment Contribution
DOE Total U.S. Gas Supplied(1) Area of Operation
Adjusted EBITDA (In Millions) FY 2019 Forecast Assumptions
Refined Products/Renewables
(1) Department of Energy EIA weekly data for 8/6/18.
Southeast (Colonial and Plantation pipelines)
– Average gross margin of $0.03 per gallon
– Renewables blending contributes ~$4.0 million of gross margin
Gas Blending
– Nymex delivery point allows for increased price protection for Southeast volumes
Rack Marketing and Other
– Diesel demand growth in the Permian basin
– Increased storage capacity to utilize for blending
– No significant legislative impact (Renewables)
$8
$79
$134 $125
$49 $55-80
$-
$50
$100
$150
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019E
21
Financial Overview
22
Financial Objectives
The Partnership has made significant strides with over ~$1.5 billion
in asset sales and debt reduction in LTM and will continue to pursue
a flexible balance sheet with a leverage target of less than 3.25x on a
compliance basis
Goal of achieving investment grade rating
Increasing fee-based business and long-term contracts with high
credit quality customers
Transitioning to a more traditional midstream repeatable cash flow
model
Continue to pursue opportunities to find and execute on low cost of
capital financing in the current and future environments
Consistently pursuing strategies that increase NGL’s unit price and
lower cost of debt
Crude and Water segments provide accretive growth platforms
Accretive growth through organic growth projects and strategic
acquisitions focused on assets backed by multi-year fee based
contracted cash flows
Sufficient liquidity to operate the business and execute growth objectives
Targeting over 1.3x distribution coverage
Excess distribution coverage will be used to strengthen the balance
sheet and fund growth opportunities
Strong Balance
Sheet
Cash Flow
Predictability
Lower Cost of
Capital
Accretive Capital
Projects
Robust Distribution
Coverage
Jun-18 Jun-17 % Variance
Total Volume (In Thousand's)
Refined Products/Renewables
Gasoline (BBL's) 40,738 28,516 43%
Diesel (BBL's) 11,777 13,798 -15%
Ethanol (BBL's) 544 1,014 -46%
Biodiesel (BBL's) 328 627 -48%
Crude Oil (BBL's) 11,225 10,020 12%
Crude Oil (Owned Pipelines) (BBL's) 9,987 6,766 48%
Liquids
Propane (GAL's) 233,786 224,733 4%
Butane (GAL's) 113,025 91,517 24%
Other NGL's (GAL's) 116,985 90,611 29%
Water Solutions
Permian Basin (BBL's) 421,535 232,105 82%
Eagle Ford Basin (BBL's) 279,184 220,579 27%
DJ Basin (BBL's) 136,115 112,437 21%
Other Basins (BBL's) 83,038 58,979 41%
Total Water Processed (BBL's) 919,872 624,100 47%
Total Revenue 5,844.4$ 3,730.7$ 57%
Total Cost of Sales 5,696.2$ 3,628.7$ 57%
Adjusted EBITDA 80.3$ 38.9$ 106%
Distributable Cash Flow 23.4$ (14.4)$ 262%
Distribution to LP Unitholders 0.39$ 0.39$ 0%
TTM Distribution Coverage 0.95x .86x
Maintenance Capex 12.4$ 6.5$ 90%
Growth Capex with Investments 212.7$ 48.6$ 338%
Covenant Compliance Leverage 4.5x 5.2x
Total L-T Debt (Excluding Working Capital Facility) 1,972.0$ 2,065.0$ -5%
Working Capital Facility 1,060.5$ 769.5$ 38%
Total Liquidity 324.3$ 943.4$ -66%
23
1st Quarter Update
Segment Summary
– Crude Oil Logistics outperformed expectations primarily due to increased volumes on
Grand Mesa as the pipeline continues to benefit from increased production out of the
DJ Basin
– Water Solutions performed in-line with expectations and has continued to benefit from
high crude oil prices, increased rig counts, and increased crude oil production in the
basins in which it operates
– Refined Products/Renewables performed in-line with expectations due to increased
prices, volumes and product margins of refined products due to stronger demand at
our wholesale locations, especially in the Southeast and West Texas
– Liquids performed in-line with expectations as a result of higher margins, increased
demand, lower costs and increased railcar utilization
Quarterly Summary Performance ($’s In Millions)
(1) Does not include acquisition expenses.
(2) Covenant Compliance Leverage excludes the working capital facility and includes Pro Forma effects of projects in construction, and recent acquisitions/divestitures
(1)
(2)
(1)
Executed balance sheet and leverage improving transactions:
– Note Repurchases:
• Repurchased approximately $5 million of outstanding Unsecured Notes
– Asset Sales:
• Sold NGL Energy Partners’ interest in E Energy Adams (an Ethanol plant in
Nebraska) for $18.6 million
• Announced Retail Propane sale for $900 million
Water growth Initiated:
– Completed Water acquisitions of approximately $126 million, primarily in the
Delaware Basin
– Invested approximately $50 million on new SWD facilities, disposal wells, and
pipelines
$169
$320
$274
$210 $180
>$300
$168
$266 $290
$182
$225 ~$235
FY 2014 FY 2015 FY2016 FY 2017 FY2018 FY2019E
Distributable Cash Flow Distributions
1.0x
1.2x
0.9x
1.2x
0.8x
1.3x
FY 2014 FY 2015 FY2016 FY 2017 FY2018 FY2019E
$24
$184
$271
$443 $424 $381
$408 $450
IPO FY 2013 FY 2014 FY 2015 FY2016 FY 2017 FY2018 FY2019E
24
Performance Metrics
Distributable Cash Flow & Total Distributions (In Millions)
Adjusted EBITDA (In Millions) Acquisition, Growth and Maintenance Capex (In Millions)
Distribution Coverage
1.3x
Target
(1) Does not include TLP capital expenditures (2) Includes the GP and preferred unit distributions, if any, and assumes the most recent quarterly distribution
annualized
(1)
(2)
$491
$1,269
$961
$138 $164 $50
$140-150
$59 $133 $160
$600
$334
$162 $110-125 $14 $32 $35 $30 $26 $38
$25-30
FY 2013 FY 2014 FY 2015 FY2016 FY 2017 FY 2018E FY 2019E
Acquisitions Growth Capital Maintenance Capital
6/30/2018 3/31/2018 Variance
Cash and Equivalents 13,682$ 22,094$ (8,412)$
Total Debt:
Senior Secured Revolving Credit Facilities
Working Capital Facility 1,060,500 969,500 91,000
Acquisition Facility 265,500 - 265,500
5.125% Senior Notes due 2019 353,424 353,424 -
6.875% Senior Notes due 2021 367,048 367,048 -
7.500% Senior Notes due 2023 610,947 615,947 (5,000)
6.125% Senior Notes due 2025 389,135 389,135 -
Other Long-Term Debt 5,815 5,977 (162)
Total Debt, Excluding Working Capital Facility 1,991,869$ 1,731,531$ 260,338$
10.75% Class A Convertible Preferred Units 91,559$ 82,576$ 8,983$
Equity:
General Partner (50,919) (50,819) (100)
Limited Partners 1,740,410 1,852,495 (112,085)
Class B preferred limited partners 202,731 202,731 -
Accumulated Other Comprehensive Loss (257) (1,815) 1,558
Noncontrolling interests 79,463 83,503 (4,040)
Total Capitalization 4,054,856$ 3,900,202$ 154,654$
2.9x 3.2x 3.2x
3.9x
4.7x 4.4x
3.25x or less
.00x
1.50x
3.00x
4.50x
6.00x
FY 2013 FY 2014 FY 2015 FY2016 FY 2017 FY 2018 FY 2019E
Credit Profile
Debt Maturities as of 6/30/18 (In Millions)
Covenant Compliance Leverage
3.25x
Target
Capitalization (In Thousands)
(1) Covenant Compliance Leverage excludes acquisition expenses, excludes the working capital facility and includes Pro Forma adjustments for projects in construction or recent acquisitions/divestitures. Total
Indebtedness at June 30, 2018 per the Partnership’s Credit Facility and used for covenant compliance totaled $2.0 billion.
(2) Convertible Preferred Units included in Total Partners’ Capital calculation.
(1)
25
This
is
tied
out
$1,326
$353 $367
$611
$389
$-
$400
$800
$1,200
$1,600
Apr-18 Apr-19 Apr-20 Apr-21 Apr-22 Apr-23 Apr-24 Apr-25
Credit Facility due 10/2021 5.125% Notes due 7/2019
6.875% Notes due 10/2021 7.500% Notes due 11/2023
6.125% Notes due 2/2025
NGL Operational Assumptions
26
Key Investment Highlights
Diversified and
Attractive Asset Base
Multiple business segments with significant geographic diversity reduce cash flow volatility
Presence in the highest rate of return oil & gas producing regions in North America as well as the highest growing
population areas for consumer demand
Natural hedge between certain business segments reduces commodity price volatility and risk exposure
Vertical and Horizontal
Integration
Vertical integration allows for capture of margin across the value chain from wellhead to end-user
Emphasis on asset ownership drives ability to capitalize on multiple revenue/bolt-on opportunities
Offer a menu of services to producers and customers
Stable Cash Flows
Focus on medium to long-term, repeatable fee-based cash flows
Combination of fee-based, take-or-pay, acreage dedication, margin-based and cost-plus revenue contracts
Targeting ~70% fee based revenues in normal commodity price environment
Strong Credit Profile and
Liquidity
Targeting a distribution coverage over 1.3x on a TTM basis
Excess distribution coverage will be reinvested in growth opportunities and reduce indebtedness
Targeting a capital structure with compliance leverage of under 3.25x and total leverage under 5.0x
Experienced & Incentivized
Management Team
Extensive industry and MLP experience with proven record of acquiring, integrating, operating and growing
successful businesses
Senior management holds significant limited partner interests, which strengthens alignment of incentives with
lenders and public unitholders
Supportive general partner which is privately owned, of which over 65% is held by current and former management
and directors, with no indebtedness
27
Appendix
28
NGL Organizational Chart
NGL Energy Holdings LLC
G.P. (DE LLC) 0.1% GP Interest
IDR’s
NGL Energy Operating LLC
(DE LLC)
NGL Water Solutions (NGL Water Solutions, LLC)
Members
(1) Includes the operations of our Legacy Gavilon crude oil logistics, refined products, and renewables businesses.
99.9% LP Interest
Limited Partners
NGL Energy Partners LP (NYSE: NGL)
(DE LP)
NGL Liquids (NGL Liquids, LLC)
NGL Refined
Products/Renewables (TransMontaigne LLC)
100%
100%
NGL Crude Logistics (NGL Crude Logistics, LLC) (1)
122,051,314 C.U. Outstanding
29
1Q’19 Adjusted EBITDA & DCF Walk
2018 2017
Net loss (169,289)$ (63,707)$
Less: Net loss (income) attributable to noncontrolling interests 345 (52)
Less: Net loss attributable to redeemable noncontrolling interests 398 397
Net loss attributable to NGL Energy Partners LP (168,546) (63,362)
Interest expense 46,412 49,278
Income tax expense 651 459
Depreciation and amortization 61,575 68,063
EBITDA (59,908) 54,438
Net unrealized losses (gains) on derivatives 18,953 (2,001)
Inventory valuation adjustment (24,602) (19,182)
Lower of cost or market adjustments (413) 4,078
Loss (gain) on disposal or impairment of assets, net 101,343 (11,213)
Loss on early extinguishment of liabilities, net 137 3,281
Equity-based compensation expense 5,511 8,821
Acquisition expense 1,252 (318)
Revaluation of liabilities 800 -
Gavilon legal matter settlement 35,000 -
Other 2,241 1,025
Adjusted EBITDA 80,314 38,929
Less: Cash interest expense 43,840 46,371
Less: Income tax expense 651 459
Less: Maintenance capital expenditures 12,390 6,527
Distributable Cash Flow 23,433$ (14,428)$
Three Months Ended June 30,
(in thousands)
Crude Oil Logistics Water Solutions Liquids
Refined Products and
Renewables Corporate and Other
Discontinued
Operations Consolidated
Operating (loss) income (99,738)$ 969$ 2,623$ 29,022$ (17,430)$ -$ (84,554)$
Depreciation and amortization 19,229 25,309 6,468 321 718 - 52,045
Amortization recorded to cost of sales 80 - 37 1,348 - - 1,465
Net unrealized losses on derivatives 7,412 9,110 2,337 - - - 18,859
Inventory valuation adjustment - - - (24,602) - - (24,602)
Lower of cost or market adjustments - - (504) 91 - - (413)
Loss (gain) on disposal or impairment of assets, net 101,894 2,475 (10) (3,026) 2 - 101,335
Equity-based compensation expense - - - - 5,511 - 5,511
Acquisition expense - - 160 - 1,136 - 1,296
Other income (expense), net 14 - 35 (17) (33,774) - (33,742)
Adjusted EBITDA attributable to unconsolidated entities - (54) - 476 (43) - 379
Adjusted EBITDA attributable to noncontrolling interest - (112) (322) - - - (434)
Revaluation of liabilities - 800 - - - - 800
Gavilon legal matter settlement - - - - 35,000 - 35,000
Other 1,550 100 17 150 - - 1,817
Discontinued operations - - - - - 5,552 5,552
Adjusted EBITDA 30,441$ 38,597$ 10,841$ 3,763$ (8,880)$ 5,552$ 80,314$
Crude Oil Logistics Water Solutions Liquids
Refined Products and
Renewables Corporate and Other
Discontinued
Operations Consolidated
Operating income (loss) 4,357$ (1,154)$ (8,772)$ 14,496$ (17,726)$ -$ (8,799)$
Depreciation and amortization 20,835 24,008 6,330 324 920 - 52,417
Amortization recorded to cost of sales 85 - 70 1,430 - - 1,585
Net unrealized gains on derivatives (659) - (1,369) - - - (2,028)
Inventory valuation adjustment - - - (19,182) - - (19,182)
Lower of cost or market adjustments - - 2,476 1,602 - - 4,078
Gain on disposal or impairment of assets, net (3,559) (730) - (7,528) - - (11,817)
Equity-based compensation expense - - - - 8,821 - 8,821
Acquisition expense - - - - (318) - (318)
Other income, net 44 18 4 168 1,541 - 1,775
Adjusted EBITDA attributable to unconsolidated entities 3,822 154 - 891 11 - 4,878
Adjusted EBITDA attributable to noncontrolling interest - (244) - - - - (244)
Other 911 93 21 - - - 1,025
Discontinued operations - - - - - 6,738 6,738
Adjusted EBITDA 25,836$ 22,145$ (1,240)$ (7,799)$ (6,751)$ 6,738$ 38,929$
Three Months Ended June 30, 2018
(in thousands)
Three Months Ended June 30, 2017
(in thousands)
30
1Q’19 & 1Q’18 Adjusted EBITDA by Segment
