What changed in this filing

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Item 1. Business

2021-06-03 compared with 2020-06-01 · 287 added, 335 removed, 309 unchanged (67% of the section changed)

We are a diversified midstream energy partnership that transports, stores, markets and provides other logistics services for crude oil, natural gas liquids and refined petroleum products and we also transport, treat, recycle and dispose of produced water generated as part of the oil and gas production process.

Originally formed in September 2010, we are a Delaware limited partnership and our business is currently organized into three business segments:

Crude Oil Logistics, Water Solutions and Liquids and Refined Products.

Reportable Segments

For the first three quarters of fiscal year 2020, we had four reportable segments:

Crude Oil Logistics, Water Solutions, Refined Products and Renewables, and Liquids.

As a result of the sale of a large part of the assets that constituted the former Refined Products and Renewables reportable segment, we decided during the fourth quarter of fiscal year 2020 that the remaining business within the former Refined Products and Renewables reportable segment will be aggregated with the prior Liquids reportable segment and form the current Liquids and Refined Products reportable segment.

Operating results for the reportable segments have been recast for the years ended March 31, 2019 and 2018 to reflect these changes.

Our Crude Oil Logistics and Water Solutions reportable segments remain unchanged from what has been previously reported.

The following is a description of our three reportable segments at March 31, 2020 .

We are a diversified midstream energy partnership that transports, treats, recycles and disposes of produced water generated as part of the energy production process as well as transports, stores, markets and provides other logistics services for crude oil and liquid hydrocarbons.

Originally formed in September 2010, we are a Delaware master limited partnership and our business is currently organized into the following three segments:

• Our Water Solutions segment transports, treats, recycles and disposes of produced and flowback water generated from oil and natural gas production.

We also sell produced water for reuse and brackish non-potable water to our producer customers to be used in their crude oil exploration and production activities.

As part of processing water, we aggregate and sell recovered crude oil, also known as skim oil.

We also dispose of solids such as tank bottoms, drilling fluids and drilling muds and perform other ancillary services such as truck and frac tank washouts.

Our activities in this segment are underpinned by long-term, fixed fee contracts and acreage dedications, some of which contain minimum volume commitments, with leading oil and gas companies including large, investment grade producer customers.

• Our Crude Oil Logistics segment purchases crude oil from producers and marketers 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 and transportation services through its owned assets.

Our activities in this segment are supported by certain long-term, fixed rate contracts which include minimum volume commitments on our pipelines.

Our Water Solutions segment transports, treats, recycles and disposes of produced and flowback water generated from crude oil and natural gas production.

We also dispose of solids such as tank bottoms, drilling fluids and drilling muds and perform other ancillary services such as truck and frac tank washouts.

As part of processing water, we are able to aggregate recovered crude oil, also known as skim oil, that was contained in the water and sell the crude oil.

We also sell brackish non-potable water to our producer customers to be used in their crude oil exploration and production activities.

Our activities in the Water Solutions segment are underpinned by long-term, fixed fee contracts and acreage dedications, some of which contain minimum volume commitments, with leading oil and gas companies including large, investment grade producer customers.

Our Liquids and Refined Products segment conducts marketing operations for natural gas liquids, refined petroleum products and biodiesel to a broad range of commercial, retail and industrial customers across the United States and Canada.

These operations are conducted through our 28 company-owned terminals, other third party storage and terminal facilities, common carrier pipelines and our extensive fleet of leased railcars.

We also provide natural gas liquid and refined product terminaling and storage services at our salt dome storage facility joint venture in Utah and marine exports through our facility located in Chesapeake, Virginia.

We employ a number of contractual and hedging strategies to minimize commodity exposure and maximize earnings stability of this segment.

• Our Liquids Logistics segment (formerly named Liquids and Refined Products) conducts supply operations for natural gas liquids, refined petroleum products and biodiesel to a broad range of commercial, retail and industrial customers across the United States and Canada.

These operations are conducted through our 28 company-owned terminals, third-party storage and terminal facilities, common carrier pipelines and a fleet of leased railcars.

We also provide marine exports of butane through our facility located in Chesapeake, Virginia.

Debt Refinancing

On February 4, 2021, we closed on a private offering of $2.05 billion of 7.5% senior secured notes due 2026 (“2026 Senior Secured Notes”) and a new credit agreement (the “New Credit Agreement”) which consists of a $500.0 million asset-based revolving credit facility (“ABL Facility”).

We used the net proceeds from the issuance of the 2026 Senior Secured Notes (along with borrowings under the ABL Facility) to (i) repay all outstanding borrowings under and terminate our existing revolving credit facility, (ii) repay all outstanding borrowings under and terminate our term credit agreement and (iii) pay fees and expenses in connection therewith, as well as fees and expenses in connection with the issuance of the 2026 Senior Secured Notes and entering into the ABL Facility.

As part of this refinancing, we also agreed to certain restricted payment provisions under the 2026 Senior Secured Notes and ABL Facility, one of which is the suspension of the quarterly common unit distributions, beginning with the quarter ended December 31, 2020, and all preferred unit distributions, beginning with the quarter ended March 31, 2021.

The cash savings from the suspension of the distributions should accelerate the deleveraging of our balance sheet and increase our liquidity, which should create more financial flexibility going forward.

For additional information related to the ABL Facility and 2026 Senior Secured Notes, see Note 8 to our consolidated financial statements included in this Annual Report.

Business Repositioning

Since late 2017, we have undertaken a number of important strategic actions in an effort to leverage the Partnership’s core areas of competitive strength and focus on generating stable, growing and predictable cash flows, while improving our

credit profile.

These steps included the sale of our 50% interest in the Glass Mountain pipeline, the sale of our Retail Propane segment, the sale of certain non-core assets in our Water Solutions segment and the sale of a substantial portion of our former Refined Products and Renewables segment, as well as the purchase of terminaling assets in our Liquids and Refined Products segment and two strategic water infrastructure assets in the Delaware Basin.

These transactions are described in more detail below and in “Other Dispositions” below.

The sale of a substantial portion of our former Refined Products and Renewables segment has allowed us to reduce working capital indebtedness and decrease earnings volatility, while the purchase of the two strategic water infrastructure assets assists in furthering our ongoing strategy of cash flow predictability by adding long-term contracts under acreage dedications and minimum volume commitments.

We believe these actions have substantially simplified our business mix and has allowed us to focus on what we believe are the core areas of our business and improved our overall financial position.

These transactions are expected to better position us for sustained growth in the future.

Over the past several years, we have undertaken a number of important strategic actions in an effort to leverage the Partnership’s core areas of competitive strength and focus on generating stable, growing and predictable cash flows, while improving our credit profile.

These steps included the following:

Sale of Retail Propane Segment

On March 30, 2018, we sold a portion of our Retail Propane segment to DCC LPG (“DCC”) for net proceeds of $212.4 million .

On July 10, 2018, we completed the sale of virtually all of our remaining Retail Propane segment to Superior Plus Corp.

(“Superior”) for total consideration of $889.8 million and, finally, on August 14, 2018, we sold our interest in Victory Propane, LLC (“Victory Propane”).

These transactions represented a strategic shift in our operations and will have a significant effect on our operations and financial results going forward.

Accordingly, the results of operations and cash flows related to our former Retail Propane segment (including equity in earnings of Victory Propane) have been classified as discontinued operations for all periods presented and prior periods have been retrospectively adjusted in the consolidated statements of operations and consolidated statements of cash flows.

See Note 18 to our consolidated financial statements included in this Annual Report for a further discussion of these transactions.

Sale of Bakken Saltwater Disposal Business

On November 30, 2018, we completed the sale of NGL Water Solutions Bakken, LLC to an affiliate of Tallgrass Energy, LP for $85.0 million in net cash proceeds.

These operations include five saltwater disposal wells located in McKenzie and Dunn Counties, North Dakota.

As this sale transaction did not represent a strategic shift that will have a major effect on our operations or financial results, operations related to this portion of our Water Solutions segment have not been classified as discontinued operations.

See Note 17 to our consolidated financial statements included in this Annual Report for a further discussion of this transaction.

Sale of South Pecos Water Disposal Business

On February 28, 2019, we completed the sale of our South Pecos water disposal business to a subsidiary of WaterBridge Resources LLC for $232.2 million in net cash proceeds.

These operations include:

(i) nine saltwater disposal facilities, (ii) all disposal agreements, commercial, surface and other contracts related to those facilities, (iii) pipelines connected to the facilities and (iv) several disposal permits.

All of the assets sold in this transaction are located near the town of Pecos, Texas in southern Reeves and Ward counties.

See Note 17 to our consolidated financial statements included in this Annual Report for a further discussion of this transaction.

• On March 30, 2018, we sold a portion of our Retail Propane segment to DCC LPG (“DCC”);

• On July 10, 2018, we sold virtually all of our remaining Retail Propane segment to Superior Plus Corp.

(“Superior”);

• On August 14, 2018, we sold our 50% interest in Victory Propane, LLC, the only remaining portion of this segment.

Sale of Non-Core Assets in our Water Solutions Segment

• On November 30, 2018, we sold NGL Water Solutions Bakken, LLC to an affiliate of Tallgrass Energy, LP.

The divested assets included five saltwater disposal wells located in McKenzie and Dunn Counties, North Dakota.

• On February 28, 2019, we sold our South Pecos water disposal business to a subsidiary of WaterBridge Resources LLC.

The divested assets included nine saltwater disposal facilities located near the town of Pecos, Texas in southern Reeves and Ward counties.

Sale of Certain Refined Products Businesses

On September 30, 2019, we completed the sale of TransMontaigne Product Services, LLC (“TPSL”) and associated assets to Trajectory Acquisition Company, LLC (“Trajectory”) for total consideration of $233.8 million , including equity consideration, inventory and net working capital.

The divested assets include the following:

• On September 30, 2019, we sold TransMontaigne Product Services, LLC (“TPSL”) and associated assets to Trajectory Acquisition Company, LLC (“Trajectory”).

The divested assets included the following:

• TPSL Terminaling Services Agreement with TransMontaigne Partners LP, including the exclusive rights to utilize 19 terminals;

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• Two wholly-owned refined products terminals in Georgia and multiple third-party throughput agreements;

and customer contracts, inventory and other working capital associated with the assets.

On January 3, 2020, we completed the sale of our refined products marketing business in the mid-continent region of the United States (“Mid-Con”) to a third-party.

On March 30, 2020, we completed the sale of our gas blending business in the southeastern and eastern regions of the United States (“Gas Blending”) to another third-party.

As these businesses made up a significant portion of our former Refined Products and Renewables segment, these transactions represent a strategic shift in our operations and will have a significant effect on our operations and financial results going forward.

Accordingly, the results of operations and cash flows related to TPSL, Mid-Con and Gas Blending have been classified as discontinued operations for all periods presented and prior

periods have been retrospectively adjusted in the consolidated statements of operations and consolidated statements of cash flows.

In addition, certain assets and liabilities have been classified as held for sale in our March 31, 2019 consolidated balance sheet.

See Note 1 and Note 18 to our consolidated financial statements included in this Annual Report for a discussion of the accounting for these transactions.

• Customer contracts, inventory and other working capital associated with the assets.

• On January 3, 2020, we sold our refined products marketing business in the mid-continent region of the United States (“Mid-Con”) to a third-party.

• On March 30, 2020, we sold our gas blending business in the southeastern and eastern regions of the United States (“Gas Blending”) to another third-party.

• We retained certain refined products and biodiesel businesses, which are included within our Liquids Logistics segment.

Purchase of Natural Gas Liquids Terminals

In March 2019, we completed the acquisition of the natural gas liquids terminal business of DCP Midstream, LP for total consideration of approximately $103.4 million.

The acquisition consisted of five propane rail terminals located in the Eastern United States and a 50% ownership interest in an additional rail terminal located in Maine.

We also acquired an import/export terminal located in Chesapeake, Virginia, which provides strategic access to the water for international import and export activity, and has the capability to load and unload ships ranging in size from handy-sized vessels up to very large gas carriers.

All of the terminals complement our existing natural gas liquids portfolio and also create additional opportunities for new and existing customers to supply their business.

Purchase of Mesquite Disposals Unlimited, LLC (“Mesquite”)

On July 2, 2019, we acquired all of the assets of Mesquite, including 34 saltwater disposal wells and approximately 175 miles of pipelines.

The purchase price was comprised of (i) $592.5 million in cash, (ii) the issuance of $102.8 million of our Class B Preferred Units (as defined herein) and (iii) additional cash payments of $200.0 million to be paid in two deferred installments contingent on the average daily volume of water processed utilizing the assets being acquired.

The assets include a fully interconnected produced water pipeline transportation and disposal system in Eddy and Lea Counties, New Mexico, and Loving County, Texas.

The vast majority of volumes on Mesquite’s system are contracted under long-term acreage dedications and minimum volume commitments.

The acquisition of the Mesquite assets provides multiple transportation, disposal and recycling options throughout Eddy and Lea Counties that allow us to deliver on our commitments.

The acquisition of the Mesquite assets, together with our existing footprint in the Delaware Basin, provide us with significant scale and capabilities that will facilitate high-quality execution for our customers.

Purchase of Hillstone Environmental Partners, LLC (“Hillstone”)

On October 31, 2019, we acquired all of the equity interests of Hillstone for $642.5 million , subject to certain adjustments.

Hillstone provides water pipeline and disposal infrastructure solutions to producers with a core operational focus in the state line area of southern Eddy and Lea Counties, New Mexico and northern Loving County, Texas in the Delaware Basin.

Hillstone has a fully interconnected produced water pipeline transportation and disposal system, which consists of 19 saltwater disposal wells representing approximately 580,000 barrels per day of permitted disposal capacity, and approximately 70 miles of a newly-built network of water pipelines, with approximately 680,000 barrels per day of transportation capacity.

Hillstone also has an additional 22 permits to develop another 660,000 barrels per day of disposal capacity.

The acquired assets also include minimum volume commitments and long-term dedications covering over 110,000 contracted acres.

This acquisition is highly complementary to our core Delaware Basin asset footprint.

• In March 2019, we acquired the natural gas liquids terminal business of DCP Midstream, LP.

The assets acquired included the following:

• Five propane rail terminals located in the Eastern United States;

• 50% ownership interest in an additional rail terminal located in Maine;

• An import/export terminal located in Chesapeake, Virginia.

Purchase of Strategic Water Infrastructure Assets in the Delaware Basin

• On July 2, 2019, we acquired all of the assets of Mesquite Disposals Unlimited, LLC (“Mesquite”).

The acquired assets included the following:

• 34 saltwater disposal wells;

• A fully interconnected produced water pipeline transportation and disposal system in Eddy and Lea Counties, New Mexico, and Loving County, Texas spanning approximately 175 miles;

• Long-term acreage dedications and minimum volume commitment contracts.

• On October 31, 2019, we acquired all of the equity interests of Hillstone Environmental Partners, LLC (“Hillstone”).

The acquired assets included the following:

• 19 saltwater disposal wells representing approximately 580,000 barrels per day of permitted disposal capacity;

• approximately 70 miles of a newly-built network of water pipelines, with approximately 680,000 barrels per day of transportation capacity;

• 22 permits to develop another 660,000 barrels per day of disposal capacity;

• Long-term acreage dedications and minimum volume commitment contracts.

The sale of our Retail Propane segment and a substantial portion of our former Refined Products and Renewables segment has allowed us to reduce working capital indebtedness and decrease earnings volatility.

The purchase of the natural gas liquids terminals complements our existing natural gas liquids portfolio, provides strategic access to water for international import and export activity and also creates additional opportunities for new and existing customers to supply their business.

The purchase of the two strategic water infrastructure assets assists in furthering our ongoing strategy of cash flow predictability by adding long-term contracts under acreage dedications and minimum volume commitments and provide us with significant scale and capabilities that will facilitate high-quality execution for our customers.

We believe these actions have substantially simplified our business mix and has allowed us to focus on what we believe are the core areas of our business and improved our overall financial position.

These transactions are expected to better position us for sustained growth in the future.

For more information regarding our results of operations and reportable segments, see Part II, Item 7–“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 12 to our consolidated financial statements included in this Annual Report.

Other Acquisitions

The following summarizes our other significant acquisitions over the past three fiscal years.

On November 7, 2019, we acquired the exclusive rights to use certain land in Lea County, New Mexico for produced and treated water operations from one entity, certain membership interests in another entity and other assets.

During the year ended March 31, 2020 , we acquired one saltwater disposal facility (including three saltwater disposal wells) in Eddy County, New Mexico.

During the year ended March 31, 2020 , we acquired land and two saltwater disposal wells in Pecos County, Texas.

During the year ended March 31, 2019, we acquired six saltwater disposal facilities (including 22 saltwater disposal wells), two ranches and four brackish non-potable water facilities (including 45 brackish non-potable water wells).

During the year ended March 31, 2018, we acquired the remaining 50% ownership interest in NGL Solids Solutions, LLC.

For a further discussion of our acquisitions, see Note 4 to our consolidated financial statements included in this Annual Report.

Other Dispositions

The following summarizes our other significant dispositions over the past three fiscal years.

Sale of Interest in E Energy Adams, LLC

On May 3, 2018, we sold our approximately 20% interest in E Energy Adams, LLC for net proceeds of $18.6 million .

Sale of Interest in Glass Mountain Pipeline, LLC (“Glass Mountain”)

On December 22, 2017, we sold our 50% interest in Glass Mountain for net proceeds of $292.1 million .

Sawtooth Caverns, LLC (“Sawtooth”) Joint Venture

On March 30, 2018, we formed a joint venture with Magnum Liquids, LLC and they acquired an approximately 28.5% interest in Sawtooth from us, in exchange for consideration consisting of a cash payment of approximately $37.6 million (excluding working capital) and the contribution of certain refined products rights and adjacent leasehold .

For a further discussion of our dispositions, see Note 17 and Note 18 to our consolidated financial statements included in this Annual Report.

For more information regarding our dispositions and the impact to our operations, see Note 18 and Note 19 to our consolidated financial statements included in this Annual Report and our Annual Report on Form 10-K for the ye ar ended March 31, 2020 .

Primary Service Areas

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Organizational Chart

The following chart provides a summarized view of our legal entity structure at March 31, 2020 :

Includes (i) NGL Crude Logistics, LLC, which includes the operations of our Crude Oil Logistics business and certain businesses within our Liquids and Refined Products segment, (ii) NGL Water Solutions, LLC, which includes the operations of our Water Solutions business and (iii) NGL Liquids, LLC, which includes the operations of certain of our businesses within our Liquids and Refined Products segment.

The following chart provides a summarized overview of our legal entity structure at March 31, 2021:

(1) Includes (i) NGL Water Solutions, LLC, which includes the operations of our Water Solutions business, (ii) NGL Crude Logistics, LLC, which includes the operations of our Crude Oil Logistics business and certain businesses within our Liquids Logistics segment and (iii) NGL Liquids, LLC, which includes the operations of certain of our businesses within our Liquids Logistics segment.

Our Business Strategies

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• Focus on building a diversified midstream master limited partnership providing multiple services to customers.

We continue to enhance our ability to transport crude oil from the wellhead to refiners, produced water from the wellhead to treatment for disposal, recycle, or discharge, and natural gas liquids from processing plants and supply hubs to end users.

We continue to enhance our ability to transport produced water from the wellhead to treatment for disposal, recycle, or discharge, crude oil from the wellhead to refineries, and natural gas liquids from processing plants and supply hubs to end users.

• Operate in a safe and environmentally responsible manner.

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• Focus on consistent annual cash flows from operations under multi-year contracts that minimize commodity price risk and generate fee-based revenues .

We intend to focus on generating revenues under long-term fee-based contracts in addition to back-to-back contracts which minimize direct commodity price exposure.

We seek to continue to increase cash flows that are supported by certain fee-based, multi-year contracts, some of which include acreage dedications from producers or minimum volume commitments.

We intend to focus on generating revenues under long-term fixed fee contracts in addition to back-to-back contracts which minimize direct commodity price exposure.

We seek to continue to increase cash flows that are supported by certain fixed fee, multi-year contracts, some of which include acreage dedications from producers or minimum volume commitments.

• Prudently manage our balance sheet to provide us with maximum financial flexibility for funding our operations, capital projects and strategic acquisitions.

We will seek to maintain sufficient liquidity and credit metrics to manage existing and future capital requirements and to take advantage of market opportunities.

We expect to continue to evaluate the capital markets and may opportunistically pursue financing transactions to optimize our capital structure.

• Achieve growth by investing in new assets, customers and ventures that increase volumes, enhance our operations, and generate attractive rates of return .

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We also continue to pursue strategic transactions and ventures that complement and enhance our existing footprint.

Prudently manage our balance sheet to provide us with maximum financial flexibility for funding our operations, capital projects and strategic acquisitions.

We will seek to maintain sufficient liquidity and credit metrics to manage existing and future capital requirements and to take advantage of market opportunities.

We expect to continue to evaluate the capital markets and may opportunistically pursue financing transactions to optimize our capital structure.

Our Competitive Strengths

We believe that we are well positioned to successfully execute our business strategies and achieve our principal business objectives because of the following competitive strengths:

Our diversified operations allow us to generate more predictable and stable cash flows on a year-to-year basis.

Our ability to provide multiple services to customers in numerous geographic areas enhances our competitive position.

Our three business units are diversified by geography, customer base and commodity sensitivities, which we believe provides us with more stable cash flows through the typical commodity cycles.

Our network of crude oil transportation and storage assets, which allows us to serve customers over a wide geographic area and optimize sales.

Our strategically deployed terminals, towboats, barges, trucks, and our owned and contracted pipeline capacity, provide access to a wide range of customers and markets.

We use this expansive network of transportation assets to deliver crude oil to the optimal markets.

These operations are supported by long-term, fee-based contracts with producers, refiners and marketers.

• Our water processing facilities, which are strategically located near areas of high crude oil and natural gas production .

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In addition, we believe that the technological capabilities of our Water Solutions business can be quickly implemented at new facilities and locations.

These assets are also supported by long-term, fee-based contracts that include acreage dedications and minimum volume commitments.

Our network of natural gas liquids transportation, terminal, and storage assets, which allows us to provide multiple services across the continental United States.

These assets are also underpinned by long-term, fixed fee contracts and acreage dedications, some of which contain minimum volume commitments.

• Our network of crude oil transportation and storage assets, which allows us to serve customers over a wide geographic area and optimize sales.

Our strategically deployed terminals, towboats, barges, trucks, and our owned and contracted pipeline capacity, provide access to a wide range of customers and markets.

We use this expansive network of transportation assets to deliver crude oil to optimal markets.

These operations are supported by certain long-term, fixed rate contracts with producers, refiners and marketers and include minimum volume commitments on our pipelines.

• Our network of natural gas liquids transportation, terminal, and storage assets, which allows us to provide multiple services across the United States and Canada.

Our strategically located terminals, large leased railcar fleet, shipper status on common carrier pipelines, and substantial leased and owned underground storage, enable us to be a preferred purchaser and seller of natural gas liquids.

We have a diverse base of long-standing customers

and believe that our performance metrics allow us to reliably supply, store and transport products throughout North America.

We have a diverse base of long-standing customers and believe that our performance metrics allow us to reliably supply, store and transport products throughout the United States and Canada.

• Our diversified operations allow us to generate more predictable and stable cash flows on a year-to-year basis.

Our ability to provide multiple services to customers in numerous geographic areas enhances our competitive position.

Our three business units are diversified by geography, customer base and commodity sensitivities, which we believe provides us with more stable cash flows through the typical commodity cycles.

• Our seasoned management team with extensive midstream industry experience and a track record of acquiring, integrating, operating and growing successful businesses.

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Our Businesses

Crude Oil Logistics

Our Crude Oil Logistics segment purchases crude oil from producers and marketers 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 and transportation services through its owned assets.

Our operations are concentrated in and around a number of the most prolific crude oil producing basins in the United States including the DJ Basin in Colorado, the Permian Basin in Texas and New Mexico, the Eagle Ford Basin in Texas and the United States Gulf Coast.

Our activities in this segment are supported by a number of long-term, fixed rate minimum volume commitments on our Grand Mesa Pipeline that provide a significant amount of stability to these operations.

Our foundation asset in this segment is the Grand Mesa Pipeline (“Grand Mesa”), a 550-mile pipeline that transports crude oil from its origin in Weld County, Colorado to our terminal in Cushing, Oklahoma.

Grand Mesa commenced operations on November 1, 2016 and has operated continuously since then.

The main line portion of this pipeline is comprised of a 37.5% undivided interest in a crude oil pipeline jointly owned by Saddlehorn Pipeline Company, LLC (“Saddlehorn”) in which we have the right to use 150,000 barrels per day of capacity of the pipeline.

During the year ended March 31, 2020, approximately 45.9 million barrels of crude were transported on the Grand Mesa Pipeline, which averaged approximately 131,000 financial barrels per day.

Operating costs associated with Grand Mesa are allocated to us based on our proportionate ownership interest and throughput.

We also own an origin terminal in Lucerne, Colorado where we aggregate crude volumes of different types and grades and store them until they are ready for transfer to our Grand Mesa Pipeline.

The terminal has 950,000 barrels of operational tankage and a 12 bay truck loading facility.

We also own and operate the Riverside terminal with 20,000 barrels of storage and a four bay truck loading facility, which connects to the Grand Mesa Pipeline.

Through our undivided interest in the Grand Mesa Pipeline, we have sufficient capacity to service our customer contracts at the same origin and termination points with the ability to accept additional volume commitments.

We retained ownership of our previously-acquired easements for the potential future development of transportation projects involving petroleum commodities other than crude oil and condensate.

With the consent and participation of Saddlehorn, we and Saddlehorn may consider future opportunities using these easements for projects involving the transportation of crude oil and condensate.

We own and operate a large scale crude oil terminal located in Cushing, Oklahoma with 3,626,000 barrels of storage capacity, seven off-loading lease automatic custody transfer units (“LACTs”), a full control room, on-site laboratory, and three 24-inch bi-directional pipelines each capable of moving 360,000 barrels per day.

The terminal features advantaged connectivity to other terminals and pipelines including important connections to our Grand Mesa Pipeline and TransCanada’s terminal with access to the United States Gulf Coast via Marketlink.

The terminal is situated on 200 acres and is designed to be expanded based on customer demand.

Cushing is one of the most liquid trading hubs in the world and is the delivery point for the West Texas Intermediate futures contract.

We own and operate a crude oil marine terminal in Point Comfort, Texas with 350,000 barrels of storage capacity, six off-loading LACTs and three docks (two for ocean-going barges and ships and one for brown water barges).

We own and operate a crude oil pipeline and marine terminal in Houma, Louisiana with 288,000 barrels of storage capacity, two off-loading LACTs, a brown water barge dock and two bi-directional pipelines each capable of moving 120,000 barrels per day with connectivity to Shell’s Zydeco System.

We also own a terminal in Kingfisher, Oklahoma with 6,000 barrels of storage.

We purchase crude oil from producers and marketers and transport it to refineries or for resale.

Our strategically deployed terminals, towboats, barges, trucks, and our owned and contracted pipeline capacity, provide access to a

wide range of customers and markets.

We use this expansive network of transportation assets to deliver crude oil to the optimal markets.

We currently transport crude oil using the following assets:

The Grand Mesa Pipeline, which is described above, and 20 other common carrier pipelines owned by third parties;

131 owned trucks and 214 owned trailers operating primarily in the Mid-Continent, Permian Basin, Eagle Ford Basin, and Rocky Mountain regions;

397 owned railcars (all of which are leased to third parties) and 246 leased railcars (all of which are subleased to third parties);

11 owned towboats and 23 owned barges operating primarily in the intercoastal waterways of the Gulf Coast and along the Mississippi and Arkansas River systems.

We accepted delivery of a newly constructed barge in April 2020 and expect to accept delivery of a second newly constructed barge in July 2020.

All of our 397 owned railcars and 246 leased railcars are compliant with the standards for railcars built subsequent to 2011 for the commodities they are transporting.

(See Part I, Item 1–“Government Regulation”).

We also own 27 strategically located pipeline injection stations, the locations of which are summarized below.

Number of Pipeline Injection Stations

Our customers include crude oil refiners, producers, and marketers.

During the year ended March 31, 2020 , 77% of the revenues of our Crude Oil Logistics segment were generated from our ten largest customers of the segment .

In addition to utilizing our assets to transport crude oil we own, we also provide truck transportation, barge transportation, storage, and terminal throughput services to our customers.

Additionally, certain key customers of the Grand Mesa Pipeline contribute significantly to the cash flows and profitability of that asset.

Any loss of those customers or their contracts could have an adverse impact on our financial results.

Our Crude Oil Logistics business faces significant competition, as many entities are engaged in the crude oil logistics business, some of which are larger and have greater financial resources than we do.

The primary factors on which we compete are:

availability of supply;

reliability of service;

logistics capabilities, including the availability of railcars, proprietary terminals, and owned pipelines, barges, railcars, trucks, and towboats;

long-term customer relationships;

the acquisition of businesses.

We obtain crude oil from a large base of suppliers, which consists primarily of crude oil producers.

We currently purchase crude oil from approximately 200 producers at approximately 2,300 leases.

Pricing Policy.

Most of our contracts to purchase or sell crude oil are at floating prices that are indexed to published rates in active markets such as Cushing, Oklahoma, St.

James, Louisiana, and Magellan East Houston.

We seek to manage price risk by entering into purchase and sale contracts of similar volumes based on similar indexes and by hedging exposure due to fluctuations in actual volumes and scheduled volumes.

Our profitability is impacted by forward crude oil prices.

Crude oil markets can either be in contango (a condition in which forward crude oil prices are greater than spot prices) or can be in backwardation (a condition in which forward crude oil prices are lower than spot prices).

Our Crude Oil Logistics business benefits when the market is in contango, as increasing prices result in inventory holding gains during the time between when we purchase inventory and when we sell it.

In addition, we are able to better utilize our storage assets when contango markets justify storing barrels.

When markets are in backwardation, falling prices typically have an unfavorable impact on our storage tank lease rates.

Billing and Collection Procedures.

Our Crude Oil Logistics customers consist primarily of crude oil refiners, producers, and marketers.

We typically invoice these customers on a monthly basis.

We perform credit analysis, require credit approvals, establish credit limits, and follow monitoring procedures on these customers.

We believe the following procedures enhance our collection efforts with these customers:

we require certain customers to prepay or place deposits for our products and services;

we require certain customers to post letters of credit or other forms of surety on a portion of our receivables;

we review receivable aging analyses regularly to identify issues or trends that may develop;

we require our marketing personnel to manage their customers’ receivable position and suspend sales to customers that have not timely paid invoices.

Our Crude Oil Logistics segment operates primarily under the NGL Crude Logistics, NGL Crude Transportation and NGL Marine trade names.

Water Solutions

Our Water Solutions segment transports, treats, recycles and disposes of produced and flowback water generated from crude oil and natural gas production.

Our Water Solutions segment transports, treats, recycles and disposes of produced and flowback water generated from oil and natural gas production.

We also sell produced water for reuse and brackish non-potable water to our producer customers to be used in their crude oil exploration and production activities.

As part of processing water, we aggregate and sell recovered crude oil, also known as skim oil.

We also dispose of solids such as tank bottoms, drilling fluids and drilling muds and perform other ancillary services such as truck and frac tank washouts.

As part of processing water, we are able to aggregate recovered crude oil, also known as skim oil, that was contained in the water and sell the crude oil.

We also sell brackish non-potable water to our producer customers to be used in their crude oil exploration and production activities.

We operate in a number of the most prolific crude oil and natural gas producing areas including the Delaware Basin in New Mexico and Texas, the Midland Basin in Texas, the DJ Basin in Colorado and the Eagle Ford Basin in Texas.

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The location and permitted processing capacities of these facilities are summarized below.

Permitted Processing Capacity (barrels per day)

Number of Number of Permitted Processing Capacity (barrels per day)

Location Facilities Wells Own (1) Lease (2) Total

Permian Basin

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(5) This facility has a design capacity of 60,000 barrels per day to process water to a recycle standard.

Our customers bring produced and flow back water generated by crude oil and natural gas exploration and production operations to our facilities for treatment through pipeline gathering systems and by truck.

Our customers bring produced and flowback water generated by crude oil and natural gas exploration and production operations to our facilities for treatment through pipeline gathering systems and by truck.

We expect that our pipeline delivered volumes will continue to increase as new projects come on line.

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At this facility, we have the option of disposing of the water in underground injection wells or recycling the water.

With regard to recycling the water, we either process the water to the point where it can be returned to producers to be reused in future drilling operations (recycle quality water), or we treat the water to a greater extent, such that it exceeds the standards for drinking water, and can be returned to the ecosystem (discharge quality water).

Recycling offers producers an alternative to the use of fresh water in hydraulic fracturing operations.

This minimizes the impact on aquifers, particularly in arid regions of the United States.

Since June 2012, we have recycled approximately 19.4 million barrels (815 million gallons) of recycle quality water, have returned approximately 9.6 million barrels (403 million gallons) of discharge quality water back to New Fork River, which is a tributary of the Colorado River, and have returned approximately 2.7 million barrels (113 million gallons) of water to the ecosystem through an agricultural irrigation system.

With regard to recycling the water, we either process the water to the point where it can be returned to producers to be reused in future drilling operations (recycle quality water), which minimizes the impact on the aquifer, or we can treat the water to a greater extent, such that it exceeds the standards for drinking water, and can be returned to the ecosystem (discharge quality water).

The primary customers of our operations consist mainly of large publicly traded, oil and gas companies with diversified acreage positions across multiple leading oil and gas plays.

The customers have contracts with us including minimum volume commitments, acreage dedications, water pipeline and trucked water disposal agreements.

The customers of our Wyoming and Colorado facilities consist primarily of public and private exploration and production companies that conduct drilling operations near our facilities.

The primary customer of our Wyoming facility has committed to deliver a specified minimum volume of water to our facility under a long-term contract.

The primary customers of our Colorado facilities have acreage dedications to deliver all produced water produced at wells within the acreage to our facilities.

During the year ended

March 31, 2020 , 52% of the water treatment and disposal revenues of our Water Solutions segment were generated from our ten largest customers of the segment .

During the year ended March 31, 2021, 75% of the water treatment and disposal revenues of our Water Solutions segment were generated from our ten largest customers of the segment.

The principal elements of competition are system reliability, project execution capability and reputation, system capacity and flexibility, rates for services and system location relative to the producer’s operations.

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In addition, we may charge pipeline transportation fees, pipeline interconnection fees, solids disposal fees and fees for the sale of produced water for reuse by our customers.

Billing and Collection Procedures.

Our Water Solutions customers consist of large, integrated oil and gas companies and leading independent exploration and production companies.

We typically invoice these customers on a monthly basis.

We perform credit analysis, require credit approvals, establish credit limits, and follow monitoring procedures on these customers.

We believe the following procedures enhance our collection efforts with these customers:

we require certain customers to prepay or place deposits for our services;

we require certain customers to post letters of credit or other forms of surety on a portion of our receivables;

we review receivable aging analyses regularly to identify issues or trends that may develop;

we require our marketing personnel to manage their customers’ receivable position and suspend service to customers that have not timely paid invoices.

Our Water Solutions segment operates primarily under the NGL Water Solutions and Anticline Disposal trade names.

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We believe that the technological capabilities of our Water Solutions business can be quickly implemented at new facilities and locations.

Liquids and Refined Products

These operations are conducted through our 28 company-owned terminals, other third party storage and terminal facilities, common carrier pipelines and our extensive fleet of leased railcars.

Crude Oil Logistics

Our activities in this segment are supported by certain long-term, fixed rate contracts which include minimum volume commitments on our pipelines.

Our operations are concentrated in and around four prolific crude oil producing regions in the United States - the DJ Basin in Colorado, the Permian Basin in Texas and New Mexico, the Eagle Ford Basin in Texas and the United States Gulf Coast.

Our foundational asset in this segment is the Grand Mesa Pipeline (“Grand Mesa”), a 550-mile pipeline that transports crude oil from its origin in Weld County, Colorado to our terminal in Cushing, Oklahoma.

Grand Mesa commenced operations on November 1, 2016 and has operated continuously since then.

The main line portion of this pipeline is comprised of an undivided interest with Saddlehorn Pipeline Company, LLC (“Saddlehorn”) in which we have the right to use 150,000 barrels per day of capacity of the pipeline.

During the year ended March 31, 2021, approximately 32.8 million financial barrels (volume amounts are from both internal and external parties) of crude were transported on the Grand Mesa Pipeline.

Operating costs associated with Grand Mesa are allocated to us based on our proportionate ownership interest and throughput.

We also own and operate origin terminals at Lucerne and Riverside Colorado where we aggregate crude volumes of different types and grades and store them until they are ready for transfer to our Grand Mesa Pipeline.

The Lucerne terminal has 950,000 barrels of operational tankage and a 12 bay truck loading facility.

The Riverside terminal has 20,000 barrels of storage and a four bay truck loading facility.

We retained ownership of our previously-acquired easements for the potential future development of transportation projects involving petroleum commodities other than crude oil and condensate.

With the consent and participation of Saddlehorn, we and Saddlehorn may consider future opportunities using these easements for projects involving the transportation of crude oil and condensate.

Similarly, the terminal connects at Cushing to the Glass Mountain Pipeline which feeds two major mid-continent refineries.

The terminal is situated on 200 acres and is designed to be expanded based on customer demand.

Cushing is one of the most liquid crude oil trading hubs in the world and is the delivery point for the West Texas Intermediate futures contracts.

We own and operate a crude oil marine terminal in Point Comfort, Texas with 355,000 barrels of storage capacity, six off-loading LACTs and three docks (two for ocean-going barges and ships and one for inland barges).

We purchase crude oil from producers and marketers and transport it to refineries or for resale.

Our strategically deployed terminals, towboats, barges, trucks, and our owned and contracted pipeline capacity, provide access to a wide range of customers and markets.

We use this expansive network of transportation assets to deliver crude oil to optimal markets.

We currently transport crude oil using the following assets:

• The Grand Mesa Pipeline, which is described above, and 20 other common carrier pipelines owned by third parties;

• 131 owned trucks and 214 owned trailers operating primarily in the Mid-Continent, Permian Basin, Eagle Ford Basin, and Rocky Mountain regions;

• 397 owned and 210 leased railcars (all of which are leased or subleased to third parties);

• 13 owned towboats and 23 owned barges operating primarily in the intercoastal waterways of the United States Gulf Coast and along the Mississippi and Arkansas River systems.

All of our 397 owned railcars and 210 leased railcars are compliant with the standards for railcars built subsequent to 2011 for the commodities they are transporting.

(See Part I, Item 1–“Government Regulation”).

We also own 28 strategically located pipeline injection stations, the locations of which are summarized below.

State Number of Pipeline Injection Stations

Our customers include crude oil refiners, producers, and marketers.

During the year ended March 31, 2021, 78% of the revenues of our Crude Oil Logistics segment were generated from our ten largest customers of the segment.

Additionally, certain key customers of the Crude Oil Logistics segment contribute significantly to the cash flows and profitability of the organization.

Any loss of those customers or their contracts could have an adverse impact on our financial results.

The primary factors on which we compete are:

• availability of supply and refinery demand;

• reliability of service;

• open credit;

• logistics capabilities, including the availability of railcars, proprietary terminals, and owned pipelines, barges, railcars, trucks, and towboats;

• long-term customer relationships.

We obtain crude oil from a large base of suppliers, which consists primarily of crude oil producers.

We currently purchase crude oil from approximately 270 producers at approximately 5,400 leases.

Pricing Policy.

Most of our contracts to purchase or sell crude oil are at floating prices that are indexed to published rates in active markets such as Cushing, Oklahoma, St.

James, Louisiana, and Magellan East Houston.

Our profitability is impacted by forward crude oil prices.

In addition, we are able to better utilize our storage assets when contango markets justify storing barrels.

When markets are in backwardation, falling prices typically have an unfavorable impact on our storage tank lease rates.

Our Crude Oil Logistics segment operates primarily under the NGL Crude Logistics, NGL Crude Transportation, NGL Marine, NGL Crude Terminals and NGL Crude Cushing trade names.

Liquids Logistics

Our Liquids Logistics segment (formerly named Liquids and Refined Products) conducts supply operations for natural gas liquids, refined petroleum products and biodiesel to a broad range of commercial, retail and industrial customers across the United States and Canada.

These operations are conducted through our 28 company-owned terminals, third-party storage and terminal facilities, common carrier pipelines and a fleet of leased railcars.

We also provide marine exports of butane through our facility located in Chesapeake, Virginia.

We employ a number of contractual and hedging strategies to minimize commodity exposure and maximize earnings stability of this segment.

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Back-to-back contracts, in which we balance our contractual portfolio by buying physical propane supply or derivatives when we have a matching purchase commitment from our wholesale customers, protect our margins and mitigate commodity price risk.

Presales also reduce the impact of warm weather because the customer is required to take

delivery of the propane regardless of the weather or any other factors.

Presales also reduce the impact of warm weather because the customer is required to take delivery of the propane regardless of the weather or any other factors.

We generally require cash deposits from these customers.

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We also transport customer-owned natural gas liquids on our leased railcars and charge the customers a transportation service fee as well as subleasing railcars to certain customers.

We utilize a fleet of approximately 4,900 high-pressure and general purpose leased railcars of which 275 railcars are subleased to third parties.

Our owned and leased terminals and railcar fleet give us the opportunity to access markets throughout the United States, and to move product to locations where demand is highest.

We provide transportation, storage, and throughput services to third parties at our facilities at Kingfisher, Oklahoma and Port Hudson, Louisiana, as well as Sawtooth, an underground storage facility near Delta, Utah, in which we own approximately a 71.5% interest, as described further below.

We provide transportation, storage, and throughput services to third parties at our facilities at Kingfisher, Oklahoma, Port Hudson, Louisiana and Chesapeake, Virginia, as well as Sawtooth Caverns, LLC (“Sawtooth”), an underground storage facility near Delta, Utah, in which we own approximately a 71.5% interest, as described further below.

We purchase refined petroleum and renewable products primarily in the Gulf Coast, West Coast and Midwest regions of the United States and schedule them for delivery at various locations throughout the country.

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A significant percentage of our business is priced on a back-to-back basis which minimizes our commodity price exposure.

The following table summarizes the location of our facilities (excluding Sawtooth) and respective throughput capacity and interconnects to those facilities.

Throughput Capacity

(gallons per day)

Terminal Interconnects

Connected to Enterprise Texas Eastern Products Pipeline;

Rail Facility

Connected to Phillips66 Blue Line Pipeline

Connected to Enterprise Mid-America Pipeline;

Rail Facility

Connected to Enterprise Texas Eastern Products Pipeline;

Rail Facility

Truck Facility

Connected to Phillips66 Blue Line Pipeline

Connected to Enterprise Mid-America Pipeline;

Rail Facility

Rail Facility;

The following table summarizes the location of our facilities and respective storage capacity and interconnects to those facilities.

Storage Capacity

Location Number of Facilities Own (1) Lease (2) Total Terminal Interconnects

Utah 1 256,200,000 — 256,200,000 Rail Facility

Virginia 2 20,720,000 — 20,720,000 Rail Facility;

Marine Facility

Connected to Phillips66 Chisholm Pipeline;

Rail Facility

Massachusetts

Rail Facility

Arkansas 3 3,765,000 90,000 3,855,000 Connected to Enterprise Texas Eastern Products Pipeline;

Rail Facility

Minnesota 1 1,829,000 — 1,829,000 Connected to Enterprise Mid-America Pipeline;

Rail Facility

Missouri 2 1,770,000 — 1,770,000 Connected to Phillips66 Blue Line Pipeline

Indiana 1 1,530,000 — 1,530,000 Connected to Enterprise Texas Eastern Products Pipeline;

Rail Facility

Wisconsin 2 714,000 390,000 1,104,000 Connected to Enterprise Mid-America Pipeline;

Rail Facility

Oklahoma 2 898,800 — 898,800 Rail Facility

Massachusetts 2 668,400 120,000 788,400 Rail Facility

Louisiana 1 720,000 — 720,000 Truck Facility

Washington 3 300,000 355,000 655,000 Rail Facility

Illinois 1 480,000 — 480,000 Connected to Phillips66 Blue Line Pipeline

Maine 2 — 240,000 240,000 Rail Facility

New York 2 — 270,000 270,000 Rail Facility

Pennsylvania 1 180,000 — 180,000 Rail Facility

Vermont 1 — 120,000 120,000 Rail Facility

United States Total 27 289,775,200 1,585,000 291,360,200

Ontario, Canada

Truck Facility

Ontario, Canada 1 — 120,000 120,000 Truck Facility

Canada Total 1 — 120,000 120,000

Total 28 289,775,200 1,705,000 291,480,200

(1) These facilities are located on lands we own.

(2) These facilities are located on lands we lease.

We have operating agreements with third parties for certain of our terminals.

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This facility currently has capacity to store approximately 6.0 million barrels of natural gas liquids and refined products.

We lease storage to approximately 16 customers, with lease terms ranging from one to three years.

We lease storage to 15 customers, with lease terms ranging from one to three years.

The facility is located on property for which we have a long-term lease.

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The Port Hudson terminal is located near Baton Rouge, Louisiana, and is in proximity to other refined products infrastructure along the Colonial pipeline.

This truck unloading and storage facility allows for the aggregation and supply of butane and naphtha for motor fuel blending and consists of storage tanks with total capacity of 720,000 gallons.

This truck unloading and storage facility allows for the aggregation and supply of butane and naphtha for motor fuel blending and consists of storage tanks with a total capacity of 720,000 gallons.

The Kingfisher facility is a natural gas liquids and condensate facility located in Kingfisher, Oklahoma, which is located in the middle of the STACK production region.

The facility connects to the Chisholm NGL pipeline and the Conway fractionation complex and consists of 450,000 gallons of storage capacity, a methanol extraction tower and a 5,000-barrel per day condensate splitter.

The Chesapeake facility is a marine export/import terminal situated upstream of Norfolk, Virginia on the Elizabeth River.

The site includes a proprietary dock with the capacity to berth handy-sized vessels (a dry bulk carrier of an oil tanker with a capacity between 15,000 and 35,000 dead weight tonnage) to very large gas carriers (a carrier capable of loading anywhere between 100,000 cubic meters to 200,000 cubic meter of gas), truck loading and off-road racks along with 22 railcar spots, with service provided by Norfolk Southern Railroad.

truck loading and off-road racks along with 22 railcar spots, with service provided by Norfolk Southern Railroad.

The facility has an aggregate storage capacity of 20,378,000 gallons.

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These transloading units can be moved to locations along a railroad where it is most convenient for customers to transfer their product.

In March 2021, we acquired the Ambassador pipeline, an approximately 225-mile natural gas liquids pipeline, which runs from the Kalkaska gas plant in Kalkaska County, Michigan to a termination point near Marysville in St.

Clair County, Michigan.

We plan to build a propane terminal, connected to the pipeline, in central Michigan.

This pipeline complements our existing assets in the upper Midwest and expands our presence with anchor assets in the state of Michigan, one of the top propane markets in the United States.

We utilize a fleet of approximately 5,100 high-pressure and general purpose leased railcars of which 140 railcars are subleased by third parties.

We lease storage space to accommodate the supply requirements and contractual needs of our retail and wholesale customers.

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Leased Storage Space

Storage Facility

Storage Facility Beginning

2021 Storage Interconnects

Connected to Enterprise Mid-America Pipeline, NuStar Pipelines and ONEOK North System Pipeline;

Kansas 56,700,000 63,000,000 Connected to Enterprise Mid-America Pipeline, NuStar Pipelines and ONEOK North System Pipeline;

Rail Facility;

Truck Facility

Connected to Enterprise Dixie Pipeline;

Rail Facility

Michigan 10,500,000 2,100,000 Rail Facility;

Truck Facility

Connected to Kinder Morgan Pipeline;

Missouri 7,560,000 7,560,000 Truck Facility

Mississippi 7,056,000 7,980,000 Connected to Enterprise Dixie Pipeline;

Rail Facility

Truck Facility

Connected to Enterprise Texas Eastern Products Pipeline;

Texas 3,990,000 3,990,000 Connected to Enterprise Texas Eastern Products Pipeline;

Truck Facility

Oregon 554,400 554,400 Connected to Kinder Morgan Pipeline and Olympic Pipeline

Arizona — 4,956,000 Connected to Kinder Morgan Pipeline;

Rail Facility;

Truck Facility

Connected to Buckeye Wood River Pipeline

United States Total 86,360,400 90,140,400

Ontario, Canada

Rail Facility

Alberta, Canada

Connected to Cochin Pipeline;

Ontario, Canada 15,750,000 15,750,000 Rail Facility

Alberta, Canada 3,440,800 3,440,800 Connected to Cochin Pipeline;

Rail Facility

Our Liquids and Refined Products business serves approximately 1,400 customers in 49 states and Canada.

Our Liquids and Refined Products business serves national, regional and independent retail, industrial, wholesale, petrochemical, refiner and natural gas liquids production customers.

We deliver natural gas liquids, refined products and biodiesel supply to our customers at terminals located on common carrier pipelines, rail terminals, refineries, and major United States storage hubs.

During the year ended March 31, 2020 , 22% of the revenues of our Liquids and Refined Products segment were generated from our ten largest customers of the segment .

Canada Total 19,190,800 19,190,800

Total 105,551,200 109,331,200

Our Liquids Logistics business serves approximately 1,400 customers in 49 states and Canada, including national, regional and independent retail, industrial, wholesale, petrochemical, refiner and natural gas liquids production customers.

During the year ended March 31, 2021, 26% of the revenues of our Liquids Logistics segment were generated from our ten largest customers of the segment.

Seasonality .

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However, the demand for diesel typically peaks during the fall and winter months due to colder temperatures in the Northeast, and peaks in the Midwest during spring planting and fall harvest.

Our Liquids and Refined Products business faces significant competition from other natural gas liquids wholesalers, trading companies and companies involved in the natural gas liquids midstream industry (such as terminal and refinery operations), some of which have greater financial resources than we do.

Our Liquids Logistics business faces significant competition from other natural gas liquids wholesalers, trading companies and companies involved in the natural gas liquids midstream industry (such as terminal and refinery operations), some of which have greater financial resources than we do.

The primary factors on which we compete are:

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• long-term customer relationships.

the acquisition of businesses.

Market Price Risk .

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Specific exposure limits are mandated in our credit agreement and in our market risk policy.

The value of refined products in any local delivery market is the sum of the commodity price as reflected on the NYMEX and the basis differential for that local delivery market.

The value of refined products in any local delivery market is the sum of the commodity price as reflected on the New York Mercantile Exchange (“NYMEX”) and the basis differential for that local delivery market.

The basis differential for any local delivery market is the spread between the cash price in the physical market and the quoted price in the futures markets for the prompt month.

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Pricing Policy.

In our Liquids and Refined Products segment, we offer our customers the following categories of contracts:

In our Liquids Logistics segment, we offer our customers the following categories of contracts:

• customer pre-buys, which typically require deposits based on market pricing conditions;

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We generally require deposits from our customers for fixed price future delivery if the delivery date is more than 30 days after the time of contractual agreement.

Billing and Collection Procedures.

Our propane and butane customers consist of commercial accounts varying in size from local independent distributors to large regional and national retailers.

These sales tend to be large volume transactions that can range from 10,000 gallons up to 1,000,000 gallons, and deliveries can occur over time periods extending from days to as long as a year.

Our refined products customers consist primarily of commercial and industrial end users, independent retailers, distributors, marketers, government entities, and other wholesalers of refined petroleum products.

We perform credit analysis, require credit approvals, establish credit limits, and follow monitoring procedures on these customers.

We believe the following procedures enhance our collection efforts with these customers:

we require certain customers to prepay or place deposits for their purchases;

we require certain customers to post letters of credit or other forms of surety on a portion of our receivables;

we monitor individual customer receivables relative to previously-approved credit limits, and our rack delivery system gives us the option to discontinue providing product to customers when they exceed their credit limits;

we require certain customers to take delivery of their contracted volume ratably to help control the account balance rather than allowing them to take delivery of propane at their discretion;

we review receivable aging analysis regularly to identify issues or trends that may develop;

we require our marketing personnel to manage their customers’ receivable position and suspend sales to customers that have not timely paid invoices.

Legal and Regulatory Considerations.

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Changes in future mandates and incentives, or decisions by the federal government related to future reinstatement of the biodiesel tax credit, could result in changes in demand for ethanol and biodiesel.

Our Liquids and Refined Products segment operates primarily under the NGL Supply Wholesale, NGL Supply Terminal Company, Sawtooth Caverns, Centennial Energy, NGL Crude Logistics and Centennial Gas Liquids trade names.

At March 31, 2020 , we had approximately 1,400 full-time employees.

We do not have any employees that are members of a labor union.

Our Liquids Logistics segment operates primarily under the NGL Supply Wholesale, NGL Supply Terminal Company, Sawtooth Caverns, Centennial Energy, NGL Crude Logistics and Centennial Gas Liquids trade names.

Human Capital

At March 31, 2021, we had 997 employees in 28 states and Canada.

Of those employees, 240 provide work primarily for our Water Solutions segment, 303 provide work primarily for our Crude Oil Logistics segment, 208 provide work primarily for our Liquids Logistics segment, and 246 provide administrative services to the various business segments.

NGL is an equal-opportunity employer, and our employee handbook underscores that commitment, with policies prohibiting discrimination, harassment, and retaliation.

We understand the importance of competitive benefits packages for the health and welfare of our employees and for our ability to recruit and retain the best talent.

In that regard, at the end of fiscal year 2021, we implemented $20 per hour minimum wage for all regular, full-time employees.

We are proud of the fact that 95% of our eligible employees participate in the NGL 401(k) Plan, and we increased our employer match in our 401(k) Plan in fiscal year 2021.

In addition, we provide access to health, life, and disability plans, including the following:

the choice between a traditional PPO or a high-deductible medical plan;

a health savings account with employer contributions for high-deductible plan participants;

a flexible spending account for traditional PPO participants;

a dental plan;

a voluntary vision plan;

an Employee Assistance Plan with access to free counseling sessions;

company-paid short-term disability coverage;

voluntary long-term disability coverage;

and life and AD&D plan opportunities.

Our operations are guided by specific health and safety principles.

Specifically, we endeavor to conduct our business in a manner that meets or exceeds applicable health and safety regulations and minimizes risk, both to our employees and the communities where we operate.

Our environmental, health and safety professionals:

• Advise on safety and industrial hygiene regulatory requirements and best practices;

• Develop safety procedures and guidelines;

• Conduct safety inspections;

• Advise on strategies to improve safety and health performance;

• Design and conduct safety and industrial hygiene training courses.

As part of this effort, we recently acquired and are implementing an enterprise management information system to help us achieve a better understanding of our performance, identify root causes of incidents of substandard performance, and where appropriate, implement necessary mitigations.

Government Regulation

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While these regulations do not directly apply to our business, they may affect the businesses of certain of our customers and suppliers and thereby indirectly affect our business.

It is not possible to predict how or when regulations affecting our operations or our customers’ or suppliers’ operations might change.

Regulation of the Transportation and Storage of Natural Gas and Oil and Related Facilities.

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The transportation services on the Grand Mesa Pipeline are subject to FERC regulation.

In February 2018, the FERC issued a revised policy to disallow income tax allowance cost recovery in rates charged by pipeline companies organized as master limited partnerships.

In February 2018, the FERC issued a revised policy to disallow income tax allowance cost recovery in rates charged

by pipeline companies organized as master limited partnerships.

The FERC’s revised policy impacts cost-of-service rates on oil pipelines.

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The Commodity Futures Trading Commission (“CFTC”) is directed under the Commodity Exchange Act to prevent price manipulations in the commodity and futures markets, including the energy futures markets.

Pursuant to statutory authority, the CFTC has adopted anti-market manipulation regulations that prohibit fraud

and price manipulation in the commodity and futures markets.

Pursuant to statutory authority, the CFTC has adopted anti-market manipulation regulations that prohibit fraud and price manipulation in the commodity and futures markets.

The CFTC also has statutory authority to seek civil penalties of up to the greater of $1 million per day per violation or triple the monetary gain to the violator for violations of the anti-market manipulation sections of the Commodity Exchange Act.

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• shaping decisions regarding what types of pollution-control equipment to deploy and how a facility should be designed;

informed construction activities, such as where to locate and where not to locate a facility, e.g., locating construction activities away from sensitive environmental, cultural or historic areas, including wetlands, coastal regions or areas inhabited by endangered or threatened species, and limiting or prohibiting construction activities during certain sensitive periods, such as when threatened or endangered species are breeding/nesting;

informed decision-making regarding the timing of activities, for example, we will delay construction or system modification or upgrades during the issuance or renewal periods of certain permits;

informed decision-making pertaining to our approach to investigating, mitigating and remediating unplanned releases from our facilities and operations or attributable to former facilities or operations, as necessary and appropriate;

• informing construction activities, such as where to locate and where not to locate a facility, e.g., locating construction activities away from sensitive environmental, cultural or historic areas, including wetlands, coastal regions or areas inhabited by endangered or threatened species, and limiting or prohibiting construction activities during certain sensitive periods, such as when threatened or endangered species are breeding/nesting;

• informing decision-making regarding the timing of activities, for example, we will delay construction or system modification or upgrades during the issuance or renewal periods of certain permits;

• informing decision-making pertaining to our approach to investigating, mitigating and remediating unplanned releases from our facilities and operations or attributable to former facilities or operations, as necessary and appropriate;

• shaping our decision-making about whether a facility or operation should be temporarily halted to address potential non-compliance with relevant permit requirements.

Consideration of and compliance with relevant environmental regulatory requirements has lead our business activities to be more sustainable while simultaneously mitigating exposure to long and short-term environmental risk.

Conversely, failure to comply with these laws and regulations may trigger a variety of administrative, civil and criminal enforcement measures, including the assessment of monetary penalties.

Certain environmental statutes impose strict, joint and several liability for costs required to clean up and restore sites where substances such as crude oil or wastes have been disposed or otherwise unlawfully released.

Consideration of and compliance with relevant environmental regulatory requirements has led our business activities to be more sustainable while simultaneously mitigating exposure to long and short-term environmental risk.

Conversely, failure to comply with these laws and regulations may trigger a variety of administrative, civil, and criminal enforcement measures,

including the assessment of monetary penalties.

Certain environmental statutes impose strict and joint and several liability for costs required to clean up and restore sites where substances such as crude oil or wastes have been disposed or otherwise unlawfully released.

The trend in environmental regulation is to place more restrictions and limitations on activities that may adversely affect the environment.

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We are subject to various federal, state, and local environmental laws and regulations governing the storage, distribution, and transportation of natural gas liquids and the operation of bulk storage liquefied petroleum gas (LPG) terminals, as well as laws and regulations governing environmental protection, including those addressing the discharge of materials into the environment or otherwise relating to protection of the environment.

Generally, these laws (i) regulate air and water quality and impose limitations on the discharge of pollutants and establish standards for the handling of solid and hazardous wastes;

Generally, these laws (i) regulate air and water quality, impose limitations on the discharge of pollutants and establish standards for the handling of solid and hazardous wastes;

(ii) subject our operations to certain permitting and registration requirements;

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(iv) impose substantial liabilities on us for pollution resulting from our operations;

(v) require remedial measures to mitigate pollution from former or ongoing

(v) require remedial measures to mitigate pollution from former or ongoing operations;

and (vi) may result in the assessment of administrative, civil, and criminal penalties for failure to comply with such laws.

These laws include, among others, the Resource Conservation and Recovery Act (“RCRA”), the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), the federal Clean Air Act, the Homeland Security Act of 2002, the Emergency Planning and Community Right to Know Act, the Clean Water Act, the Safe Drinking Water Act, and comparable state statutes.

These laws include, among others, the Resource Conservation and Recovery Act (“RCRA”), the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), the federal Clean Air Act “(CAA”), the Homeland Security Act of 2002, the Emergency Planning and Community Right to Know Act, the Clean Water Act (“CWA”) , the Safe Drinking Water Act, the Oil Spills Prevention and Preparedness Regulations, and comparable state statutes.

CERCLA, also known as the “Superfund” law, and similar state laws, impose liability on certain classes of potentially responsible persons that are considered to have contributed to the release of a “hazardous substance” into the environment.

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While natural gas liquids are not a hazardous substance within the meaning of CERCLA, other chemicals used in or generated by our operations may be classified as a hazardous substance.

Persons who are or were responsible for releases of hazardous substances under CERCLA may be subject to strict and joint and several liability for the costs of investigating and cleaning up the hazardous substances that have been released into the environment, for damages to natural resources and for the costs of certain health studies, and it is not uncommon for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by the hazardous substances released into the environment.

RCRA, and comparable state statutes and their implementing regulations, regulate the generation, transportation, treatment, storage, disposal and cleanup of hazardous and non-hazardous wastes.

Under the auspices of the EPA, most states administer some or all of the provisions of RCRA, sometimes in conjunction with their own, more stringent requirements.

It is not uncommon for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by the release of hazardous substances into the environment.

RCRA, and comparable state statutes and their implementing regulations, regulate the generation, transportation, treatment, storage, disposal and cleanup of solid and hazardous wastes.

Under a delegation of authority from the EPA, most states administer some or all of the provisions of RCRA, sometimes in conjunction with their own, more stringent requirements.

Federal and state regulatory agencies can seek to impose administrative, civil and criminal penalties for alleged non-compliance with RCRA and analogous state requirements.

Certain wastes associated with the production of oil and natural gas, as well as certain types of petroleum-contaminated media and debris, are excluded from regulation as hazardous waste under Subtitle C of RCRA.

These wastes, instead, are regulated under RCRA’s less stringent solid waste provisions, state laws or other federal laws.

It is possible, however, that certain wastes now classified as non-hazardous could be classified as hazardous wastes in the future and therefore be subject to more rigorous and costly disposal requirements.

Legislation has been proposed from time to time in Congress to re-categorize certain oil and natural gas wastes as “hazardous wastes.” Any such change could result in an increase in our costs to manage and dispose of wastes, which could have a material adverse effect on our consolidated results of operations and financial position.

These wastes, instead, are regulated as solid waste under RCRA’s less stringent Subtitle D, state laws, or other federal laws.

It is possible, however, that certain wastes now classified as non-hazardous solid waste could be classified as hazardous wastes in the future and thereby be subject to more rigorous and costly disposal requirements.

Legislation has been proposed from time to time in Congress to regulate certain oil and natural gas wastes as “hazardous wastes under RCRA.” Any such change could result in an increase in our costs to manage and dispose of wastes, which could have a material adverse effect on our consolidated results of operations and financial position.

We currently own or lease properties where crude oil is being or has been handled for many years.

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Our operations involve the shipment of crude oil by barge through navigable waters of the United States.

The Oil Pollution Prevention Act imposes liability for releases of crude oil from vessels or facilities into navigable waters.

If a release of crude oil to navigable waters occurred during shipment or from a terminal, we could be subject to liability under the Oil Pollution Prevention Act.

The Oil Pollution Act of 1990 amended the CWA to impose liability for releases of crude oil from vessels or

facilities into navigable waters.

If a release of crude oil to navigable waters occurred during shipment or from an oil terminal, we could be subject to liability under the Oil Pollution Act.

We are not currently aware of any facts, events, or conditions related to oil spills that could materially impact our consolidated results of operations or financial position.

In 1973, the EPA adopted oil pollution prevention regulations under the Clean Water Act.

In 1973, the EPA adopted oil pollution prevention regulations under the CWA.

These oil pollution prevention regulations, as amended several times since their original adoption, require the preparation of a Spill Prevention Control and Countermeasure (“SPCC”) plan for facilities engaged in drilling, producing, gathering, storing, processing, refining, transferring, distributing, using, or consuming crude oil and oil products, and which due to their location, could reasonably be expected to discharge oil in harmful quantities into or upon the navigable waters of the United States.

SPCC requirements under the CWA require appropriate containment berms and similar structures to help prevent the discharge of pollutants into regulated waters in the event of a crude oil or other constituent tank spill, rupture or leak.

The owner or operator of an SPCC-regulated facility is required to prepare a written, site-specific spill prevention plan, which details how a facility’s operations comply with the requirements.

To be in compliance, the facility’s SPCC plan must satisfy all of the applicable requirements for drainage, bulk storage tanks, tank car and truck loading and unloading, transfer operations (intrafacility piping), inspections and records, security, and training.

To be in compliance, the facility’s SPCC plan must satisfy all of the applicable requirements for drainage, bulk storage tanks, tank car and truck loading and unloading, transfer operations (intra-facility piping), inspections and records, security, and training.

Most importantly, the facility must fully implement the SPCC plan and train personnel in its execution.

Where applicable, we maintain and implement such plans for our facilities.

Where applicable, we strive to maintain and implement SPCC plans for our facilities.

Air Emissions.

Our operations are subject to the federal Clean Air Act and comparable state and local laws and regulations, which regulate emissions of air pollutants from various industrial sources and mandate certain monitoring and reporting requirements.

This regulatory overlay may require that we obtain permits prior to the construction, modification or

operation of certain projects or facilities expected to produce or increase air emissions;

that we obtain and strictly comply with air permits containing emissions and operational limitations and utilize specific emission control technologies to limit emissions.

Violation of these requirements could subject us to monetary penalties, injunctions, conditions or restrictions on operations and, potentially, criminal enforcement actions.

Our operations are subject to the CAA and comparable state and local laws and regulations, which regulate emissions of air pollutants from various industrial sources and mandate certain permitting, monitoring, recordkeeping and reporting requirements.

The CAA and its implementing regulations may require that we obtain permits prior to the construction, modification or operation of certain projects or facilities expected to produce or increase air emissions above certain threshold levels, that we obtain and strictly comply with air permits containing emissions and operational limitations, or utilize specific emission control technologies to limit emissions, any of which could impose significant costs on our business.

Violation of CAA requirements could subject us to monetary penalties, injunctions, conditions or restrictions on operations and, potentially, criminal enforcement actions.

Furthermore, we may make certain future capital expenditures for air pollution control equipment in connection with obtaining and maintaining operating permits and approvals for air emissions.

Water Discharges .

The Clean Water Act and analogous state laws impose restrictions and strict controls regarding the discharge of pollutants into state waters as well as waters of the United States and impose requirements affecting our ability to conduct construction activities in waters and wetlands.

Certain state regulations and the general permits issued under the Clean Water Act’s National Pollutant Discharge Elimination System program prohibit the discharge of pollutants and chemicals.

SPCC requirements of federal laws require appropriate containment berms and similar structures to help prevent the contamination of regulated waters in the event of a crude oil or other constituent tank spill, rupture or leak.

In addition, the Clean Water Act and analogous state laws require individual permits or coverage under general permits for discharges of storm water runoff from certain types of facilities.

The CWA and analogous state laws impose restrictions and strict controls regarding the discharge of pollutants into state waters as well as navigable waters, defined as waters of the United States (“WOTUS”), and impose requirements affecting our ability to conduct construction activities in waters and wetlands.

Certain state regulations and the general permits issued under the CWA’s National Pollutant Discharge Elimination System program prohibit the discharge of pollutants and chemicals.

The federal SPCC program requires appropriate containment berms and similar structures to help prevent the contamination of regulated waters in the event of a crude oil or other constituent tank spill, rupture or leak.

The CWA prohibits the placement of dredge or fill material in wetlands or other WOTUS unless authorized by a permit issued by the U.S.

Army Corps of Engineers (“Corps”) or a delegated state agency pursuant to Section 404.

In addition, the CWA and analogous state laws require individual permits or coverage under general permits for discharges of storm water runoff from certain types of facilities.

We maintain a number of discharge permits, some of which may require us to monitor and sample storm water runoff from such facilities.

Some states also maintain groundwater protection programs that require permits for discharges or operations that may impact groundwater conditions.

Federal and state regulatory agencies can impose administrative, civil and criminal penalties for non-compliance with discharge permits or other requirements of the Clean Water Act and analogous state laws and regulations.

Federal and state regulatory agencies can impose administrative, civil and criminal penalties for non-compliance with discharge permits or other requirements of the CWA and analogous state laws and regulations.

Underground Injection Control .

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Under the auspices of the federal UIC program as implemented by states with UIC primacy, regulators, particularly at the state level, are becoming increasingly sensitive to possible correlations between underground injection and seismic activity.

Consequently, state regulators implementing both the federal UIC program and state corollaries are heavily scrutinizing the location of injection facilities relative to faulting and are limiting both the density or injection facilities as well as the rate of injection.

Hydraulic Fracturing.

Hydraulic fracturing involves the injection of water, sand, and chemicals under pressure into the formation to stimulate oil and gas production.

We do not conduct any hydraulic fracturing activities.

However, a portion of our customers’ crude oil and natural gas production is developed from unconventional sources that require hydraulic fracturing as part of the completion process, and our Water Solutions business treats and disposes of produced water generated from crude oil and natural gas production, including production employing hydraulic fracturing.

Hydraulic fracturing involves the injection of water, sand and chemicals under pressure into the formation to stimulate oil and gas production.

Legislation to amend the Safe Drinking Water Act to repeal the exemption for hydraulic fracturing from the definition of underground injection and require federal permitting and regulatory control of hydraulic fracturing, as well as legislative proposals to require disclosure of the chemical constituents of the fluids used in the fracturing process, have been proposed in recent sessions of Congress.

Congress will likely continue to consider legislation to amend the Safe Drinking Water Act to subject hydraulic fracturing operations to regulation under the Act’s UIC Program and/or require disclosure of chemicals used in the hydraulic fracturing process.

Federal agencies, including the EPA and the United States Department of the Interior, have asserted their regulatory authority to, for example, study the potential impacts of hydraulic fracturing on the environment, and initiate rulemakings to compel disclosure of the chemicals used in hydraulic fracturing operations, and establish pretreatment standards for produced water from hydraulic fracturing operations.

In addition, some states have also proposed or adopted legislative or regulatory restrictions on hydraulic fracturing, which include additional permit requirements, public disclosure of fracturing fluid contents, operational restrictions, and/or temporary or permanent bans on hydraulic fracturing.

Federal agencies, including the EPA and the United States Department of the Interior, have asserted their regulatory authority to, for example, study the potential impacts of hydraulic fracturing on the environment, and initiate rulemakings to compel disclosure of the chemicals used in hydraulic fracturing operations, and establish pretreatment standards and effluent limitation guidelines for produced water from hydraulic fracturing operations.

In addition, some states and local governments have also proposed or adopted legislative or regulatory restrictions on hydraulic fracturing, which include additional permit requirements, public disclosure of fracturing fluid contents, operational restrictions, and/or temporary or permanent bans on hydraulic fracturing.

We expect that scrutiny of hydraulic fracturing activities will continue in the future.

Greenhouse Gas Regulation

There is a growing concern, both nationally and internationally, about climate change and the contribution of greenhouse gas emissions, most notably methane and carbon dioxide, to global warming.

This growing concern has resulted in

a steady stream of legislation considered by Congress to address climate change through a variety of mechanisms, including carbon taxes and carbon cap-and-trade programs.

For example, on January 24, 2019, Representative Theodore E.

Deutch (D-FL) introduced H.R.

763, the Energy Innovation and Carbon Dividend Act of 2019, which would impose a fee on the carbon content of fuels, including crude oil and natural gas, on the producers or importers of such fuels.

On April 10, 2019, Senator Sheldon Whitehouse (D-RI) introduced S.

1128, the American Opportunity Carbon Fee Act of 2019, which would impose fees on emissions from natural gas, petroleum products, and coal.

There is a growing concern, both nationally and internationally, about climate change and the contribution of greenhouse gas (“GHG”) emissions, most notably methane and carbon dioxide, to climate change.

This growing concern has resulted in a steady stream of legislation considered by Congress to address climate change through a variety of mechanisms, including carbon taxes and carbon cap-and-trade programs.

For example, in February 2021, the Climate Emergency Act of 2021 was introduced in the House of Representative by Rep.

Earl Blumenauer (D-OR) as H.R.

795 and in the Senate by Sen.

Bernie Sanders (I-VT), which would require the President of the United States to declare a national climate emergency and take various actions to address climate change.

The ultimate outcome of any possible future federal legislative initiatives is uncertain.

In addition, several states have already adopted legal measures to reduce emissions of greenhouse gases, primarily through the planned development of greenhouse gas emission inventories and/or regional greenhouse gas cap-and-trade programs.

On December 15, 2009, the EPA published its findings that emissions of carbon dioxide, methane and other greenhouse gases present an endangerment to public health and the environment because emissions of such gases are, according to the EPA, contributing to warming of the earth’s atmosphere and other climatic changes.

These findings allowed the EPA to adopt and implement regulations to restrict emissions of greenhouse gases under existing provisions of the federal Clean Air Act.

On May 12, 2016, the EPA finalized three rules that regulate greenhouse gas emissions from certain sources in the oil and natural gas industry, including New Source Performance Standards for the Oil and Natural Gas Sector, which became effective on August 2, 2016.

On April 18, 2017, the EPA announced its intention to reconsider certain aspects of the rule in response to several administrative reconsideration petitions.

On October 15, 2018, the EPA proposed to amend the New Source Performance Standards for the Oil and Natural Gas Sector to, among other things, address fugitive emissions, pneumatic pump standards, and closed vent system certification requirements.

The schedule for when this rulemaking could be finalized is not presently known.

The EPA’s greenhouse gas regulations could require us to incur costs to reduce emissions of greenhouse gases associated with our operations and also could adversely affect demand for the products that we transport, store, process, or otherwise handle in connection with our services.

In addition, several states have already adopted legal measures to reduce emissions of GHGs, primarily through the planned development of GHG emission inventories and/or regional GHG cap-and-trade programs.

On December 15, 2009, the EPA published its findings that emissions of carbon dioxide, methane and other GHGs present an endangerment to public health and the environment because emissions of such gases are, according to the EPA, contributing to warming of the earth’s atmosphere and other climatic changes.

These findings allowed the EPA to adopt and implement regulations to restrict emissions of GHGs under existing provisions of the CAA.

During the Obama Administration, the EPA finalized three rules that regulate GHG emissions from certain sources in the oil and natural gas industry, including New Source Performance Standards for the Oil and Natural Gas Sector (“GHG NSPS”), which became effective on August 2, 2016.

During the Trump Administration, rulemaking was undertaken resulting in a substantial relaxation in the GHG NSPS’s requirements, including those relating to fugitive emissions, pneumatic pump standards, and closed vent system certification, among other things, which were finalized on August 13, 2020.

The Biden Administration has announced that it intends to review the revisions to the GHG NSPS in President Biden’s January 20, 2021 Executive Order on Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisi s.

It is foreseeable that the EPA may seek to reinstate the previous, more stringent regulations, though to do so, it will have to undertake notice-and-comment rulemaking consistent with the Administrative Procedure Act, which could take appreciable time to complete.

If future GHG regulations are more stringent, it could require us to incur costs to reduce emissions of GHGs associated with our operations and also could adversely affect demand for the products that we transport, store, process, or otherwise handle in connection with our services.

Some scientists have suggested climate change could increase the severity of extreme weather, such as increased hurricanes and floods, which could damage our facilities.

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If there is an overall trend of warmer temperatures, it would be expected to have an adverse effect on our business.

Because propane is considered a clean alternative fuel under the federal Clean Air Act Amendments of 1990, new climate change regulations may provide us with a competitive advantage over other sources of energy, such as fuel oil and coal.

The trend of more expansive and stringent environmental legislation and regulations, including greenhouse gas regulation, could continue, resulting in increased costs of conducting business and consequently affecting our profitability.

Because propane is considered a clean alternative fuel under the CAA, new climate change regulations may provide us with a competitive advantage over other sources of energy, such as fuel oil and coal.

The trend of more expansive and stringent environmental legislation and regulations, including GHG regulation, could continue, resulting in increased costs of conducting business and consequently affecting our profitability.

To the extent laws are enacted or other governmental action is taken that restricts certain aspects of our business or imposes more stringent and costly operating, waste handling, disposal and cleanup requirements, our business and prospects could be adversely affected.

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Regulations under these statutes cover the security and transportation of hazardous materials and are administered by the United States Department of Transportation (“DOT”).

Specifically, crude oil pipelines are subject to regulation by the DOT, through the Pipeline and Hazardous Materials Safety Administration (“PHMSA”), under the Hazardous Liquid Pipeline Safety Act of 1979 (“HLPSA”), which requires PHMSA to develop, prescribe, and enforce minimum federal safety standards for the storage and transportation of hazardous liquids by and comparable state statutes with respect to design, installation, testing, construction, operation, replacement and management of pipeline facilities.

HLPSA covers petroleum and petroleum products

and requires any entity that owns or operates pipeline facilities to comply with such regulations, to permit access to and copying of records and to file certain reports and provide information as required by the United States Secretary of Transportation.

Specifically, crude oil pipelines are subject to regulation by the DOT, through the Pipeline and Hazardous Materials Safety Administration (“PHMSA”), under the Hazardous Liquid Pipeline Safety Act of 1979 (“HLPSA”), which requires PHMSA to develop, prescribe, and enforce minimum federal safety standards for the storage and transportation of hazardous liquids and comparable state statutes with respect to design, installation, testing, construction, operation, replacement and management of pipeline facilities.

HLPSA covers petroleum and petroleum products and requires any entity that owns or operates pipeline facilities to comply with such regulations, to permit access to and copying of records and to file certain reports and provide information as required by the United States Secretary of Transportation.

These regulations include potential fines and penalties for violations.

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and (v) reforming the process by which pipeline operators notify federal, state and local officials of pipeline accidents.

On June 22, 2016, the Protecting Our Infrastructure of Pipelines and Enhancing Safety Act of 2016 was enacted, further strengthening PHMSA’s safety authority and extending PHMSA’s statutory mandate under prior legislation through 2019.

Congress did not pass a reauthorization bill in 2019 and PHMSA is operating under a continuing resolution until a new bill is passed.

In recent years, Congress has strengthened PHMSA’s safety authority and repeatedly extended it, most recently in the Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2020.

Railcar Regulation

We transport a significant portion of our natural gas liquids, crude oil, ethanol and biodiesel via rail transportation, and we own and/or lease a fleet of crude oil, high-pressure and general purpose railcars for this purpose.

We transport a significant portion of our natural gas liquids, crude oil and biodiesel via rail transportation, and we own and/or lease a fleet of crude oil, high-pressure and general purpose railcars for this purpose.

Our railcar operations are subject to the regulatory jurisdiction of the Federal Railroad Administration of the DOT, as well as other federal and state regulatory agencies.

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Available Information on our Website

Our website address is http://www.nglenergypartners.com.

Our website address is www.nglenergypartners.com.

We make available on our website, free of charge, the periodic reports that we file with or furnish to the Securities and Exchange Commission (“SEC”), as well as all amendments to these reports, as soon as reasonably practicable after such reports are filed with or furnished to the SEC.

The information contained on, or connected to, our website is not incorporated by reference into this Annual Report and should not be considered part of this or any other report that we file with or furnish to the SEC.

In addition, the SEC maintains an internet site (http://www.sec.gov) that contains reports, proxy and information statements and other information related to issuers that file electronically with the SEC.

In addition, the SEC maintains an internet site (www.sec.gov) that contains reports, proxy and information statements and other information related to issuers that file electronically with the SEC.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business