Business Context and Reporting Period
This Form 8-K Current Report was filed by NGL Energy Partners LP on January 26, 2012, regarding events occurring on January 20, 2012. The filing addresses a material modification to the rights of security holders through an amendment to the Partnership Agreement.
Key Financial Metrics
The filing does not provide standard financial performance metrics such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on the terms of a distribution waiver and partial payment agreement related to specific common units.
Material Changes
On January 20, 2012, the General Partner, NGL Energy Holdings LLC, entered into the Third Amendment to the Partnership Agreement. This amendment modifies distribution rights for 8,932,031 Common Units issued pursuant to the August 31, 2011 Contribution and Sale Agreement:
- Waiver of Distributions: Distributions for any quarter ending prior to August 30, 2012, are waived for 3,932,031 Common Units.
- Partial Payment: For the remaining 5,000,000 Common Units, the distribution for the quarter ended December 31, 2011, will be paid at a rate of 66.3% of the full distribution amount.
Guidance, Outlook, and Risks
The filing contains no forward-looking guidance, management commentary on future operations, or discussion of general business risks. The amendment is a contractual obligation agreed upon in the Contribution and Sale Agreement. The full text of the Third Amendment is filed as Exhibit 3.1.
Investor Verification Checklist
- Verify the total number of Common Units affected by the distribution waiver (3,932,031) versus those receiving partial payment (5,000,000).
- Confirm the specific date by which the distribution waiver expires (August 30, 2012).
- Review the full text of the Third Amendment (Exhibit 3.1) for any additional covenants or conditions not summarized in the 8-K.
- Assess the impact of the 66.3% partial payment on the total cash flow expected from the December 31, 2011 quarter for the affected units.