NGL Energy Partners LP (NYSE:NGL) Q2 2020 Earnings Conference Call - Final Transcript

Nov 08, 2019 • 11:00 am ET


NGL Energy Partners LP (NYSE:NGL) Q2 2020 Earnings Conference Call - Final Transcript


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Trey Karlovich

from an inventory and average cost perspective. We are forecasting based on a normal heating degree winter. We increased our guidance range for this segment based on our results to date and our expectations for the remainder of this year.

Finally Refined Products. Our remaining Refined Products business will primarily consist of our rack marketing business, which carries minimal inventory and markets barrels through third-party terminals across the United States, and our Renewables business, which is centered around biofuel marketing.

We are in the process of winding down our other marketing operations which required significant amount of inventory storage and has contributed minimal earnings over the past year. We have maintained our distribution this quarter, and do not expect any changes to the distribution at this time. Our coverage has continued to increase. We are just over 1 times on an LTM basis, and we expect to hit or exceed our 1.3 times LTM coverage target at the end of this fiscal year.

It seems like we always get caught up in the moment over the quarter, but if you look at what we have proactively accomplished to redirect our strategy of this business, reduce leverage, improve cash flow predictability, strengthen contract terms, grow fee-based revenues, extend debt maturities, among other efforts, many of which address the always growing list of marketing concerns. It's pretty remarkable what has been accomplished in NGL in the past two years. Mike said, we have sold over $2.1 billion of assets; acquired $1.1 billion in high quality water assets; and increased our EBITDA and cash flow, and still reduce leverage by about 2 times over this period. We believe we are doing the right things for all of our business stakeholders.

That concludes our prepared remarks. Jonathan, please open the line for questions.