Fair Value of Financial Instruments (Tables)

12 Months Ended

Mar. 31, 2013

Fair Value of Financial Instruments

Schedule of estimated fair value measurements of assets and liabilities

The following table summarizes the estimated fair values of the commodity derivative assets (liabilities) reported on the consolidated balance sheet at March 31, 2013:

	Derivative			Derivative
	Assets			Liabilities
	(in thousands)
Level 1 measurements	$	947		$	(3,324	)
Level 2 measurements	9,911			(13,280		)
	10,858			(16,604		)
Netting of counterparty contracts	(3,503		)	3,503
Cash collateral provided or held	(1,760		)	400
Commodity contracts reported on consolidated balance sheet	$	5,595		$	(12,701	)

The following table summarizes the estimated fair values of the commodity derivative assets (liabilities) reported on the consolidated balance sheet at March 31, 2012:

	Derivative		Derivative
	Assets		Liabilities
	(in thousands)
Level 1 measurements	$	—	$	—
Level 2 measurements	—		(36		)
	—		(36		)
Netting of counterparty contracts	—		—
Cash collateral provided or held	—		—
Commodity contracts reported on consolidated balance sheet	$	—	$	(36	)

Schedule of location of commodity derivative assets (liabilities) reported on the consolidated balance sheets

	March 31,			March 31,
	2013			2012
	(in thousands)
Prepaid expenses and other current assets	$	5,551		$	—
Other noncurrent assets	44			—
Accrued expenses and other payables	(12,701		)	(36		)
Net liability	$	(7,106	)	$	(36	)

Schedule of open commodity derivative contract positions

Contracts	Settlement Period	Total Notional Units (Barrels)		Fair Value of Net Assets (Liabilities)
		(in thousands)
As of March 31, 2013 -
Propane swaps (1)	April 2013 - March 2014	(282	)	$	3,197
Heating oil calls and futures (2)	May 2013 - June 2013	8		79
Crude swaps (3)	April 2013 - June 2014	(91	)	153
Crude - butane spreads (4)	April 2013 - March 2014	(1,116	)	(7,651		)
Crude forwards (5)	April 2013 - March 2014	(144	)	1,033
Butane forwards (6)	April 2013 - March 2014	1,546		(2,557		)
				(5,746		)
Net cash collateral held				(1,360		)
Net fair value of commodity derivatives on consolidated balance sheet				$	(7,106	)
As of March 31, 2012 -
Propane swaps	April 2012 - March 2013	(460	)	$	(36	)

(1) Propane swaps — Our natural gas liquids logistics segment routinely purchases inventory during the warmer months and stores the inventory for sale in the colder months. The contracts listed in this table as “propane swaps” represent financial derivatives we have entered into as an economic hedge against the risk that propane prices will decline while we are holding the inventory.

(2) Heating oil calls and futures — Our retail segment offers our customers the opportunity to purchase a specified volume of heating oil at a fixed price. The contracts listed in this table as “heating oil calls and futures” represent financial derivatives we have entered into as an economic hedge against the risk that heating oil prices will rise between the time we entered into the fixed price sale commitment with the customers and the time we will the purchase heating oil to sell to the customers.

(3) Crude swaps — Our crude oil logistics segment routinely enters into crude oil purchase and sale contracts that are priced based on a crude oil index. These indices may vary in the type or location of crude oil, or in the timing of delivery within a given month. The contracts listed in this table as “crude swaps” represent hedges against the risk that changes in the different index prices would reduce the margins between the purchase and the sale transactions.

(4) Crude-butane spreads — Our natural gas liquids logistics segment enters into forward contracts to sell butane at a price that will be calculated as a specified percentage of a crude oil index at the delivery date. The contracts listed in this table as “crude — butane spreads” represent financial derivatives we have entered into as economic hedges against the risk that the spread between butane prices and crude prices will narrow between the time we entered into the butane forward sale contracts and the expected delivery dates.

(5) Crude forwards — Our crude oil logistics segment routinely purchases crude oil inventory to enable us to fulfill future orders expected to be placed by our customers. The contracts listed in this table as “crude forwards” represent financial derivatives we have entered into as an economic hedge against the risk that crude oil prices will decline while we are holding inventory.

(6) Butane forwards — Our natural gas liquids logistics segment routinely purchases butane inventory to enable us to fulfill future orders expected to be placed by our customers. The contracts listed in this table as “butane forwards” represent financial derivatives we have entered into as an economic hedge against the risk that butane prices will decline while we are holding inventory.

Schedule of net gains (losses) from commodity and interest rate derivatives

	NGL Energy Partners LP								NGL Supply
	Year			Year			Six Months		Six Months
	Ended			Ended			Ended		Ended
	March 31,			March 31,			March 31,		September 30,
	2013			2012			2011		2010
	(in thousands)
Commodity contracts -
Unrealized gain (loss)	$	(5,275	)	$	(4,384	)	$	1,357	$	(200	)
Realized gain	899			10,351			111		426
Interest rate swaps	(5		)	(291		)	224		—
Total	$	(4,381	)	$	5,676		$	1,692	$	226