Intrinsic value of NGL ENERGY PARTNERS LP - NGL

Previous Close

$13.90

  Intrinsic Value

$12.03

stock screener

  Rating & Target

hold

-13%

Previous close

$13.90

 
Intrinsic value

$12.03

 
Up/down potential

-13%

 
Rating

hold

We calculate the intrinsic value of NGL stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 1.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  46.50
  42.35
  38.62
  35.25
  32.23
  29.51
  27.05
  24.85
  22.86
  21.08
  19.47
  18.02
  16.72
  15.55
  14.49
  13.54
  12.69
  11.92
  11.23
  10.61
  10.05
  9.54
  9.09
  8.68
  8.31
  7.98
  7.68
  7.41
  7.17
  6.95
Revenue, $m
  25,320
  36,042
  49,960
  67,573
  89,350
  115,714
  147,020
  183,553
  225,521
  273,057
  326,221
  385,017
  449,395
  519,270
  594,532
  675,058
  760,724
  851,410
  947,014
  1,047,454
  1,152,676
  1,262,651
  1,377,386
  1,496,917
  1,621,315
  1,750,685
  1,885,161
  2,024,912
  2,170,136
  2,321,063
Variable operating expenses, $m
  24,715
  35,092
  48,561
  65,605
  86,680
  112,193
  142,489
  177,844
  218,459
  264,461
  315,699
  372,598
  434,899
  502,521
  575,356
  653,285
  736,187
  823,948
  916,468
  1,013,669
  1,115,496
  1,221,925
  1,332,958
  1,448,634
  1,569,020
  1,694,217
  1,824,355
  1,959,599
  2,100,139
  2,246,197
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  24,715
  35,092
  48,561
  65,605
  86,680
  112,193
  142,489
  177,844
  218,459
  264,461
  315,699
  372,598
  434,899
  502,521
  575,356
  653,285
  736,187
  823,948
  916,468
  1,013,669
  1,115,496
  1,221,925
  1,332,958
  1,448,634
  1,569,020
  1,694,217
  1,824,355
  1,959,599
  2,100,139
  2,246,197
Operating income, $m
  605
  951
  1,400
  1,968
  2,670
  3,521
  4,530
  5,709
  7,062
  8,596
  10,522
  12,419
  14,495
  16,749
  19,177
  21,774
  24,537
  27,462
  30,546
  33,785
  37,179
  40,727
  44,427
  48,283
  52,295
  56,468
  60,806
  65,313
  69,997
  74,865
EBITDA, $m
  1,095
  1,559
  2,161
  2,923
  3,865
  5,006
  6,360
  7,941
  9,756
  11,813
  14,113
  16,656
  19,441
  22,464
  25,720
  29,204
  32,910
  36,833
  40,969
  45,314
  49,867
  54,624
  59,588
  64,759
  70,141
  75,737
  81,555
  87,601
  93,883
  100,413
Interest expense (income), $m
  118
  188
  322
  502
  736
  1,032
  1,397
  1,840
  2,366
  2,979
  3,684
  4,482
  5,374
  6,362
  7,443
  8,616
  9,879
  11,231
  12,670
  14,192
  15,798
  17,484
  19,251
  21,097
  23,024
  25,031
  27,119
  29,291
  31,549
  33,896
  36,334
Earnings before tax, $m
  417
  628
  897
  1,232
  1,638
  2,123
  2,690
  3,343
  4,083
  4,912
  6,040
  7,044
  8,133
  9,306
  10,561
  11,894
  13,306
  14,792
  16,353
  17,988
  19,695
  21,476
  23,330
  25,259
  27,265
  29,349
  31,514
  33,764
  36,102
  38,532
Tax expense, $m
  113
  170
  242
  333
  442
  573
  726
  903
  1,102
  1,326
  1,631
  1,902
  2,196
  2,513
  2,851
  3,211
  3,592
  3,994
  4,415
  4,857
  5,318
  5,798
  6,299
  6,820
  7,361
  7,924
  8,509
  9,116
  9,747
  10,404
Net income, $m
  305
  459
  655
  899
  1,196
  1,550
  1,964
  2,440
  2,981
  3,586
  4,409
  5,142
  5,937
  6,794
  7,709
  8,683
  9,713
  10,798
  11,938
  13,131
  14,378
  15,677
  17,031
  18,439
  19,903
  21,425
  23,005
  24,648
  26,354
  28,128

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  9,011
  12,826
  17,779
  24,047
  31,797
  41,179
  52,320
  65,321
  80,257
  97,173
  116,093
  137,017
  159,927
  184,794
  211,577
  240,234
  270,720
  302,993
  337,016
  372,760
  410,205
  449,342
  490,173
  532,711
  576,981
  623,019
  670,876
  720,609
  772,290
  826,001
Adjusted assets (=assets-cash), $m
  9,011
  12,826
  17,779
  24,047
  31,797
  41,179
  52,320
  65,321
  80,257
  97,173
  116,093
  137,017
  159,927
  184,794
  211,577
  240,234
  270,720
  302,993
  337,016
  372,760
  410,205
  449,342
  490,173
  532,711
  576,981
  623,019
  670,876
  720,609
  772,290
  826,001
Revenue / Adjusted assets
  2.810
  2.810
  2.810
  2.810
  2.810
  2.810
  2.810
  2.810
  2.810
  2.810
  2.810
  2.810
  2.810
  2.810
  2.810
  2.810
  2.810
  2.810
  2.810
  2.810
  2.810
  2.810
  2.810
  2.810
  2.810
  2.810
  2.810
  2.810
  2.810
  2.810
Average production assets, $m
  4,152
  5,911
  8,193
  11,082
  14,653
  18,977
  24,111
  30,103
  36,986
  44,781
  53,500
  63,143
  73,701
  85,160
  97,503
  110,710
  124,759
  139,631
  155,310
  171,783
  189,039
  207,075
  225,891
  245,494
  265,896
  287,112
  309,166
  332,086
  355,902
  380,654
Working capital, $m
  1,620
  2,307
  3,197
  4,325
  5,718
  7,406
  9,409
  11,747
  14,433
  17,476
  20,878
  24,641
  28,761
  33,233
  38,050
  43,204
  48,686
  54,490
  60,609
  67,037
  73,771
  80,810
  88,153
  95,803
  103,764
  112,044
  120,650
  129,594
  138,889
  148,548
Total debt, $m
  4,605
  7,177
  10,515
  14,740
  19,963
  26,287
  33,796
  42,558
  52,625
  64,027
  76,779
  90,881
  106,323
  123,083
  141,135
  160,450
  180,997
  202,749
  225,680
  249,772
  275,010
  301,388
  328,908
  357,579
  387,417
  418,447
  450,702
  484,222
  519,056
  555,257
Total liabilities, $m
  6,073
  8,645
  11,983
  16,208
  21,431
  27,755
  35,264
  44,027
  54,093
  65,495
  78,247
  92,349
  107,791
  124,551
  142,603
  161,918
  182,465
  204,217
  227,148
  251,240
  276,478
  302,857
  330,377
  359,047
  388,885
  419,915
  452,170
  485,691
  520,524
  556,725
Total equity, $m
  2,937
  4,181
  5,796
  7,839
  10,366
  13,424
  17,056
  21,295
  26,164
  31,678
  37,846
  44,667
  52,136
  60,243
  68,974
  78,316
  88,255
  98,776
  109,867
  121,520
  133,727
  146,486
  159,796
  173,664
  188,096
  203,104
  218,705
  234,919
  251,767
  269,276
Total liabilities and equity, $m
  9,010
  12,826
  17,779
  24,047
  31,797
  41,179
  52,320
  65,322
  80,257
  97,173
  116,093
  137,016
  159,927
  184,794
  211,577
  240,234
  270,720
  302,993
  337,015
  372,760
  410,205
  449,343
  490,173
  532,711
  576,981
  623,019
  670,875
  720,610
  772,291
  826,001
Debt-to-equity ratio
  1.570
  1.720
  1.810
  1.880
  1.930
  1.960
  1.980
  2.000
  2.010
  2.020
  2.030
  2.030
  2.040
  2.040
  2.050
  2.050
  2.050
  2.050
  2.050
  2.060
  2.060
  2.060
  2.060
  2.060
  2.060
  2.060
  2.060
  2.060
  2.060
  2.060
Adjusted equity ratio
  0.326
  0.326
  0.326
  0.326
  0.326
  0.326
  0.326
  0.326
  0.326
  0.326
  0.326
  0.326
  0.326
  0.326
  0.326
  0.326
  0.326
  0.326
  0.326
  0.326
  0.326
  0.326
  0.326
  0.326
  0.326
  0.326
  0.326
  0.326
  0.326
  0.326

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  305
  459
  655
  899
  1,196
  1,550
  1,964
  2,440
  2,981
  3,586
  4,409
  5,142
  5,937
  6,794
  7,709
  8,683
  9,713
  10,798
  11,938
  13,131
  14,378
  15,677
  17,031
  18,439
  19,903
  21,425
  23,005
  24,648
  26,354
  28,128
Depreciation, amort., depletion, $m
  490
  609
  762
  956
  1,195
  1,485
  1,830
  2,232
  2,694
  3,217
  3,591
  4,238
  4,946
  5,715
  6,544
  7,430
  8,373
  9,371
  10,424
  11,529
  12,687
  13,898
  15,160
  16,476
  17,845
  19,269
  20,749
  22,288
  23,886
  25,547
Funds from operations, $m
  795
  1,067
  1,417
  1,855
  2,391
  3,035
  3,794
  4,672
  5,675
  6,803
  8,000
  9,380
  10,884
  12,509
  14,253
  16,113
  18,086
  20,170
  22,361
  24,660
  27,065
  29,575
  32,191
  34,915
  37,749
  40,694
  43,755
  46,935
  50,240
  53,675
Change in working capital, $m
  514
  686
  891
  1,127
  1,394
  1,687
  2,004
  2,338
  2,686
  3,042
  3,403
  3,763
  4,120
  4,472
  4,817
  5,154
  5,483
  5,804
  6,119
  6,428
  6,734
  7,038
  7,343
  7,650
  7,961
  8,280
  8,606
  8,944
  9,294
  9,659
Cash from operations, $m
  281
  381
  526
  727
  998
  1,348
  1,790
  2,334
  2,989
  3,761
  4,598
  5,617
  6,764
  8,037
  9,436
  10,959
  12,604
  14,366
  16,243
  18,232
  20,331
  22,537
  24,848
  27,265
  29,787
  32,414
  35,148
  37,991
  40,946
  44,016
Maintenance CAPEX, $m
  -190
  -279
  -397
  -550
  -744
  -983
  -1,274
  -1,618
  -2,020
  -2,482
  -3,005
  -3,591
  -4,238
  -4,946
  -5,715
  -6,544
  -7,430
  -8,373
  -9,371
  -10,424
  -11,529
  -12,687
  -13,898
  -15,160
  -16,476
  -17,845
  -19,269
  -20,749
  -22,288
  -23,886
New CAPEX, $m
  -1,315
  -1,759
  -2,283
  -2,888
  -3,572
  -4,324
  -5,134
  -5,991
  -6,883
  -7,796
  -8,719
  -9,642
  -10,558
  -11,460
  -12,343
  -13,206
  -14,049
  -14,873
  -15,679
  -16,472
  -17,256
  -18,036
  -18,816
  -19,603
  -20,401
  -21,217
  -22,054
  -22,919
  -23,817
  -24,752
Cash from investing activities, $m
  -1,505
  -2,038
  -2,680
  -3,438
  -4,316
  -5,307
  -6,408
  -7,609
  -8,903
  -10,278
  -11,724
  -13,233
  -14,796
  -16,406
  -18,058
  -19,750
  -21,479
  -23,246
  -25,050
  -26,896
  -28,785
  -30,723
  -32,714
  -34,763
  -36,877
  -39,062
  -41,323
  -43,668
  -46,105
  -48,638
Free cash flow, $m
  -1,224
  -1,656
  -2,153
  -2,711
  -3,318
  -3,959
  -4,618
  -5,275
  -5,914
  -6,517
  -7,127
  -7,616
  -8,032
  -8,369
  -8,622
  -8,791
  -8,876
  -8,880
  -8,808
  -8,664
  -8,455
  -8,187
  -7,866
  -7,498
  -7,090
  -6,648
  -6,175
  -5,677
  -5,158
  -4,622
Issuance/(repayment) of debt, $m
  1,925
  2,572
  3,338
  4,225
  5,224
  6,323
  7,509
  8,763
  10,066
  11,402
  12,752
  14,103
  15,442
  16,760
  18,052
  19,315
  20,547
  21,752
  22,931
  24,091
  25,238
  26,378
  27,520
  28,670
  29,838
  31,030
  32,255
  33,520
  34,833
  36,201
Issuance/(repurchase) of shares, $m
  630
  785
  960
  1,144
  1,330
  1,509
  1,668
  1,798
  1,888
  1,929
  1,758
  1,679
  1,531
  1,313
  1,022
  659
  225
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  2,555
  3,357
  4,298
  5,369
  6,554
  7,832
  9,177
  10,561
  11,954
  13,331
  14,510
  15,782
  16,973
  18,073
  19,074
  19,974
  20,772
  21,752
  22,931
  24,091
  25,238
  26,378
  27,520
  28,670
  29,838
  31,030
  32,255
  33,520
  34,833
  36,201
Total cash flow (excl. dividends), $m
  1,330
  1,701
  2,145
  2,658
  3,236
  3,873
  4,560
  5,286
  6,040
  6,813
  7,383
  8,165
  8,941
  9,704
  10,452
  11,183
  11,897
  12,872
  14,124
  15,428
  16,783
  18,192
  19,654
  21,172
  22,748
  24,383
  26,080
  27,843
  29,675
  31,579
Retained Cash Flow (-), $m
  -935
  -1,244
  -1,615
  -2,043
  -2,527
  -3,059
  -3,632
  -4,238
  -4,869
  -5,515
  -6,168
  -6,821
  -7,469
  -8,107
  -8,731
  -9,342
  -9,938
  -10,521
  -11,091
  -11,653
  -12,207
  -12,759
  -13,311
  -13,867
  -14,432
  -15,009
  -15,601
  -16,213
  -16,848
  -17,510
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  396
  457
  530
  615
  710
  815
  928
  1,047
  1,171
  1,299
  1,216
  1,344
  1,472
  1,598
  1,721
  1,841
  1,959
  2,351
  3,032
  3,775
  4,576
  5,433
  6,343
  7,305
  8,316
  9,374
  10,479
  11,630
  12,827
  14,069
Discount rate, %
  9.70
  10.19
  10.69
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.21
  20.17
  21.17
  22.23
  23.34
  24.51
  25.74
  27.02
  28.38
  29.79
  31.28
  32.85
  34.49
  36.21
  38.03
  39.93
PV of cash for distribution, $m
  361
  376
  391
  401
  407
  404
  394
  376
  351
  320
  242
  213
  182
  152
  123
  97
  75
  63
  56
  47
  37
  28
  20
  14
  9
  6
  4
  2
  1
  1
Current shareholders' claim on cash, %
  73.3
  56.0
  44.2
  36.0
  30.1
  25.7
  22.5
  20.0
  18.2
  16.7
  15.7
  15.0
  14.4
  14.0
  13.7
  13.6
  13.5
  13.5
  13.5
  13.5
  13.5
  13.5
  13.5
  13.5
  13.5
  13.5
  13.5
  13.5
  13.5
  13.5

NGL Energy Partners LP owns and operates a vertically integrated energy business. The Company's segments are crude oil logistics, water solutions, liquids, retail propane, refined products and renewables, and corporate and other. Its crude oil logistics segment includes owned and leased crude oil storage terminals, and owned and leased pipeline injection stations. Its 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 and drilling fluids. Its liquids segment supplies natural gas liquids to retailers, wholesalers, refiners and petrochemical plants throughout the United States and in Canada. Its retail propane segment consists of the retail marketing, and sale and distribution of propane and distillates, among others. The Company's refined products and renewables segment is engaged in gasoline, diesel, ethanol and biodiesel marketing operations.

FINANCIAL RATIOS  of  NGL ENERGY PARTNERS LP (NGL)

Valuation Ratios
P/E Ratio 12.2
Price to Sales 0.1
Price to Book 0.8
Price to Tangible Book
Price to Cash Flow -61.9
Price to Free Cash Flow -4.3
Growth Rates
Sales Growth Rate 10.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -45%
Cap. Spend. - 3 Yr. Gr. Rate 17.1%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 134.4%
Total Debt to Equity 135.8%
Interest Coverage 2
Management Effectiveness
Return On Assets 4.3%
Ret/ On Assets - 3 Yr. Avg. 1.8%
Return On Total Capital 2.8%
Ret/ On T. Cap. - 3 Yr. Avg. -0.2%
Return On Equity 7.1%
Return On Equity - 3 Yr. Avg. -0.5%
Asset Turnover 2.2
Profitability Ratios
Gross Margin 3.6%
Gross Margin - 3 Yr. Avg. 4.4%
EBITDA Margin 3.9%
EBITDA Margin - 3 Yr. Avg. 2.5%
Operating Margin 2%
Oper. Margin - 3 Yr. Avg. 0.6%
Pre-Tax Margin 1.1%
Pre-Tax Margin - 3 Yr. Avg. -0.1%
Net Profit Margin 1.1%
Net Profit Margin - 3 Yr. Avg. -0.1%
Effective Tax Rate 1.4%
Eff/ Tax Rate - 3 Yr. Avg. -1.7%
Payout Ratio 132.8%

NGL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NGL stock intrinsic value calculation we used $17283 million for the last fiscal year's total revenue generated by NGL ENERGY PARTNERS LP. The default revenue input number comes from 0001 income statement of NGL ENERGY PARTNERS LP. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our NGL stock valuation model: a) initial revenue growth rate of 46.5% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 9.7%, whose default value for NGL is calculated based on our internal credit rating of NGL ENERGY PARTNERS LP, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of NGL ENERGY PARTNERS LP.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of NGL stock the variable cost ratio is equal to 98%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for NGL stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 7% for NGL ENERGY PARTNERS LP.

Corporate tax rate of 27% is the nominal tax rate for NGL ENERGY PARTNERS LP. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the NGL stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for NGL are equal to 16.4%.

Life of production assets of 14.9 years is the average useful life of capital assets used in NGL ENERGY PARTNERS LP operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for NGL is equal to 6.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $2002.592 million for NGL ENERGY PARTNERS LP - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 124.352 million for NGL ENERGY PARTNERS LP is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of NGL ENERGY PARTNERS LP at the current share price and the inputted number of shares is $1.7 billion.

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