What changed in this filing

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Item 1A. Risk Factors

2023-05-31 compared with 2022-06-06 · 149 added, 134 removed, 626 unchanged (31% of the section changed)

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The following is a summary and a description of the material risks relating to our business activities that we have identified.

In addition to the factors discussed elsewhere in this Annual Report, you should carefully consider the risks and uncertainties described below, which could have a material adverse effect on our business, financial condition or results of operations, including our ability to generate cash to fund our operations, repay indebtedness and pay distributions.

fund our operations, repay indebtedness and pay distributions.

You should also consider the interrelationship and potential compounding effects if multiple risks are realized.

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• Increasing interest rates could impact our financing costs, common unit price, distributions on our Class B Preferred Units (as defined herein) and Class C Preferred Units (as defined herein) and our ability to issue equity and incur debt.

• Failure of our banking institutions.

Risks Related to the Operations of Our Business

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• Risk management procedures and the use of derivative financial instruments.

• Reduced demand for our products due to energy efficiency, new technologies and alternative energy sources.

• Reduced demand for our products due to energy efficiency, new technologies, alternative energy sources and new regulations.

• Seasonal weather conditions, including warm winter weather, natural or man-made disasters, pandemics, terrorism and political unrest.

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Risks Related to Our Partnership Structure and in an Investment in Us

• Our partnership agreement limits the fiduciary duties of our general partner to our unitholders and restricts the remedies available to our unitholders.

• Conflicts of interest by our general partner and its affiliates.

• Our amended and restated limited partnership agreement (the “Partnership Agreement”) limits the fiduciary duties of our GP to our unitholders and restricts the remedies available to our unitholders.

• Conflicts of interest by our GP and its affiliates.

• Our unitholders have limited voting rights.

• Control of our general partner or the IDRs (as defined herein) may be transferred to a third party.

• Our general partner has a limited call right that may require our unitholders to sell their common units at an undesirable time or price.

• Control of our GP or the IDRs (as defined herein) may be transferred to a third party.

• Our GP has a limited call right that may require our unitholders to sell their common units at an undesirable time or price.

• Our Partnership Agreement requires that we distribute all of our available cash.

• We may issue additional units without the approval of our unitholders.

• Our general partner may elect to cause us to issue common units while also maintaining its general partner interest in connection with a resetting of the target distribution levels related to its IDRs.

• Our GP may elect to cause us to issue common units while also maintaining its GP interest in connection with a resetting of the target distribution levels related to its IDRs.

• Our unitholders liability may not be limited if a court finds that unitholder action constitutes control of our business.

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• We have subsidiaries that are treated as corporations for federal income tax purposes and subject to corporate level income taxes.

• A unitholder whose units are loaned to a “short seller” to effect a short sale of units may be considered as having disposed of those common units.

• A unitholder whose common units are loaned to a “short seller” to effect a short sale of units may be considered as having disposed of those common units.

• There are limits on the deductibility of our losses that may adversely affect our unitholders.

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Risks Related to Liquidity and Financing

We may not have sufficient cash to enable us to fund our operations, repay indebtedness or pay distributions to our unitholders following the establishment of cash reserves by our general partner and the payment of costs and expenses, including reimbursement of expenses to our general partner.

We may not have sufficient cash to enable us to fund our operations, repay indebtedness or pay distributions to our unitholders following the establishment of cash reserves by our GP and the payment of costs and expenses, including reimbursement of expenses to our GP.

We may not have sufficient cash to enable us to fund our operations, repay indebtedness or pay distributions.

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• the cost of acquisitions, if any;

• restrictions contained in the ABL Facility and the indentures governing our outstanding 7.5% senior notes due 2023, 6.125% senior notes due 2025, 7.5% senior notes due 2026 and 2026 Senior Secured Notes (collectively, the “Indentures”) and other debt service requirements;

• restrictions contained in the ABL Facility and the indentures governing our outstanding 6.125% senior unsecured notes due 2025, 7.5% senior unsecured notes due 2026 and 2026 Senior Secured Notes (collectively, the “Indentures”);

• restrictions contained in the agreements relating to our 9.00% Class B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units (“Class B Preferred Units”), 9.625% Class C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units (“Class C Preferred Units”) and 9.00% Class D Preferred Units (“Class D Preferred Units”) (collectively the “Preferred Units”);

• our ability to borrow funds and access capital markets;

• the amount, if any, of cash reserves established by our general partner;

• the amount, if any, of cash reserves established by our GP;

• other business risks discussed in this Annual Report that may affect our cash levels.

The board of directors of our general partner decided to temporarily suspend all distributions in order to deleverage our balance sheet until we meet, among other things, the 4.75 to 1.00 total leverage ratio set forth within the indenture of the 2026 Senior Secured Notes.

This resulted in the suspension of the quarterly common unit distributions, which began with the quarter ended December 31, 2020, and all preferred unit distributions, which began with the quarter ended March 31, 2021.

The board of directors of our GP expects to evaluate the reinstatement of the common unit and all Preferred Unit distributions in due course, taking into account a number of important factors, including our leverage, liquidity, the sustainability of cash flows, upcoming debt maturities, capital expenditures and the overall performance of our businesses.

The quarterly common unit distributions were suspended with the quarter ended December 31, 2020, and all Preferred Unit distributions were suspended with the quarter ended March 31, 2021.

Our substantial indebtedness may limit our flexibility to obtain financing and to pursue other business opportunities and our ability to service our debt could impact operations.

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Our ability to service our debt will depend on, among other things, our future financial and operating performance, which will be affected by prevailing economic and weather conditions, and financial, business, regulatory and other factors, some of which are beyond our control.

If our operating results are not sufficient to service our future indebtedness, we would be forced to take actions such as reducing or delaying our business activities, acquisitions, investments or capital expenditures, selling assets or seeking additional equity capital.

If our operating results are not sufficient to service our future indebtedness, we would be

forced to take actions such as reducing or delaying our business activities, acquisitions, investments or capital expenditures, selling assets or seeking additional equity capital.

We may be unable to effect any of these actions on satisfactory terms or at all.

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If we were unable to repay the accelerated amounts, our lenders could proceed against the collateral we granted them to secure our debts under our 2026 Senior Secured Notes and ABL Facility.

payment of our debt is accelerated, defaults under our other debt instruments, if any then exist, may be triggered, and our assets may be insufficient to repay such debt in full, and our unitholders could experience a partial or total loss of their investment.

If the payment of our debt is accelerated, defaults under our other debt instruments, if any then exist, may be triggered, and our assets may be insufficient to repay such debt in full, and our unitholders could experience a partial or total loss of their investment.

The consent we entered into with the holder of a majority of our Class D Preferred Units in connection with the 2026 Senior Secured Notes will restrict our current and future operations.

In connection with the offering of the 2026 Senior Secured Notes, we were required to obtain a consent (the “Class D Preferred Consent”) from the holder of the majority of our Class D Preferred Units (the “Class D Preferred Majority”) to, among other things, enable us to consummate the transaction.

The Class D Preferred Consent modifies certain voting and approval rights granted to the Class D Preferred Majority under our Amended and Restated Partnership Agreement.

The Class D Preferred Consent modifies certain voting and approval rights granted to the Class D Preferred Majority under our Partnership Agreement.

Specifically, the Class D Preferred Consent requires us to obtain the approval of the Class D Preferred Majority for:

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• making investment capital expenditures or expansion capital expenditures in excess of $75.0 million in the aggregate during any fiscal year.

These approval rights supplement the existing approval rights in our Amended and Restated Partnership Agreement for the Class D Preferred Majority.

They became effective upon the closing of the transaction and will remain in effect until we are no longer in arrears on the Class D Preferred Unit distributions.

These approval rights supplement the existing approval rights in our Partnership Agreement for the Class D Preferred Majority.

They became effective upon the closing of the transaction and will remain in effect until we are no longer in arrears

on the Class D Preferred Unit distributions.

Because the 2026 Senior Secured Notes and the ABL Facility will restrict our ability to pay distributions on our Class D Preferred Unit distributions until we meet certain defined metrics, we cannot predict when such actions will no longer be subject to the approval of the Class D Preferred Consent, and there is no certainty that we will be able to obtain such consent.

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We also have exposure to increases in interest rates through variable rate provisions of our Class B Preferred Units and Class C Preferred Units.

In addition, the distribution rates on our Class B Preferred Units and Class C Preferred Units convert from fixed rates to floating rates, beginning on and after July 1, 2022, and on and after April 15, 2024, respectively.

In addition, the distribution rates on our Class C Preferred Units convert from fixed rates to floating rates beginning on and after April 15, 2024.

Our results of operations, cash flows and financial position could be materially adversely affected by significant changes in interest rates.

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A rising interest rate environment could have an adverse impact on our common unit price and our ability to issue equity or incur debt for acquisitions or other purposes and could affect our ability to make payments on our debt obligations and cash distributions at our intended levels.

Our cash and cash equivalents may be exposed to failure of our banking institutions.

While we seek to minimize our exposure to third-party losses of our cash and cash equivalents, we hold our balances in a number of large financial institutions.

Notwithstanding such allocation, we are subject to the risk of bank failure.

For example, on March 10, 2023, Silicon Valley Bank (“SVB”) was unable to continue its operations and the Federal Deposit Insurance Corporation was appointed as receiver for SVB and created the National Bank of Santa Clara to hold the deposits of SVB.

None of our cash and cash equivalents were held at SVB and we do not expect further developments with SVB to have a material impact on our cash and cash equivalents balance, expected results of operations, or financial performance for the foreseeable future.

However, if the banks where we hold deposits were to experience a similar failure, we could experience additional risk.

Any such loss or limitation on our cash and cash equivalents would adversely affect our business.

Risks Related to the Operations of Our Business

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We depend on the ability and willingness of other entities to make operating and capital expenditures to explore for, develop, and produce crude oil and natural gas in the United States and Canada, and to extract natural gas liquids from natural gas, as well as the availability of necessary pipeline transportation and storage capacity.

Customers’ expectations of lower

market prices for crude oil and natural gas, as well as the availability of capital for operating and capital expenditures, may cause them to curtail spending, thereby reducing business opportunities and demand for our services and equipment.

Customers’ expectations of lower market prices for crude oil and natural gas, as well as the availability of capital for operating and capital expenditures, may cause them to curtail spending, thereby reducing business opportunities and demand for our services and equipment.

Actual market conditions and producers’ expectations of market conditions for crude oil and natural gas liquids may also cause producers to curtail spending, thereby reducing business opportunities and demand for our services.

Industry conditions are influenced by numerous factors over which we have no control, such as the availability of commercially viable geographic areas in which to explore and produce crude oil and natural gas, the availability of liquids-rich natural gas needed to produce natural gas liquids, the supply of and demand for crude oil and natural gas, environmental restrictions on the exploration and production of crude oil and natural gas, such as existing and proposed regulation of hydraulic fracturing, domestic and worldwide economic conditions, political instability in crude oil and natural gas producing countries and merger and divestiture activity among our current or potential customers.

and merger and divestiture activity among our current or potential customers.

The volatility of the oil and natural gas industry and the resulting impact on exploration and production activity could adversely impact the level of drilling activity.

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Our profitability could be negatively impacted by price and inventory risk related to our business.

The Crude Oil Logistics and Liquids Logistics segments are “margin-based” businesses in which our realized margins depend on the differential of sales prices over our total supply costs.

The Crude Oil Logistics and Liquids Logistics segments are “margin-based” businesses in which our realized margins depend on the differential of sales prices over our supply costs.

Our profitability is therefore sensitive to changes in product prices caused by changes in supply, pipeline transportation and storage capacity or other market conditions.

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We are subject to the risk of a price decline between the time we purchase refined products and the time we sell the products.

We seek to mitigate this risk by entering into

NYMEX futures contracts.

We seek to mitigate this risk by entering into NYMEX futures contracts.

However, price changes in locations where we operate do not correspond directly with changes in prices in the NYMEX futures market, and as a result these futures contracts cannot be perfect hedges of our commodity price risk.

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In our Liquids Logistics segment, we compete for natural gas liquids supplies and also for customers for our services.

Our competitors include major integrated oil companies, other midstream or wholesale marketing companies, interstate and intrastate pipelines and companies that gather, compress, treat, process, transport, store and market natural gas.

Our competitors include major integrated oil companies, other midstream or wholesale marketing companies, interstate and intrastate pipelines and companies that gather, compress, treat,

process, transport, store and market natural gas.

Our natural gas liquids terminals compete with other terminaling and storage providers in the transportation and storage of natural gas liquids.

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Any interruption of service at the terminals, or on pipeline, railroad or lateral connections or adverse change in the terms and conditions of services could have a material adverse effect on our ability, and the ability of our customers, to transport product to and from our facilities and have a corresponding material adverse effect on our revenues.

In addition, the rates charged by the interconnected pipelines for transportation to and from our facilities impact the utilization and

value of our terminals.

In addition, the rates charged by the interconnected pipelines for transportation to and from our facilities impact the utilization and value of our terminals.

We have historically been able to pass through the costs of pipeline transportation to our customers.

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Our costs may increase more rapidly than the fees that we charge to customers pursuant to our contracts with them.

Additionally, some customers’ obligations under their agreements with us may be permanently or temporarily reduced upon the occurrence of certain events, some of which are beyond our control, including force majeure events wherein the production of or the supply of crude oil, condensate, and/or natural gas liquids are curtailed or cut off.

Additionally, some customers’ obligations under their agreements with us may be permanently or temporarily reduced upon the

occurrence of certain events, some of which are beyond our control, including force majeure events wherein the production of or the supply of crude oil, condensate, and/or natural gas liquids are curtailed or cut off.

Force majeure events include (but are not limited to) revolutions, wars, acts of enemies, embargoes, import or export restrictions, strikes, lockouts, fires, storms, floods, acts of God, explosions, mechanical or physical failures of our equipment or facilities of our customers.

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We cannot predict the effect that development of alternative energy sources, increased conservation or new technology may have on our operations, including whether subsidies of alternative energy sources by local, state, and federal governments might be expanded, or what impact this might have on the supply of or the demand for crude oil, natural gas, and natural gas liquids.

The Inflation Reduction Act of 2022 (the “IRA”) could impact demand for hydrocarbon fuel products and impose new costs on certain customers.

In August 2022, President Biden signed the IRA, which contains numerous incentives for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles and supporting infrastructure and carbon capture and sequestration, amongst other provisions.

In addition, the IRA imposes a federal fee on the emission of methane from sources required to report their greenhouse gas emissions to the EPA, including certain sources in the onshore petroleum and natural gas production categories.

Some of our producer clients face exposure to the IRA pay to emit methane program.

In addition, the

multiple incentives offered for various clean energy industries referenced above could decrease demand for crude oil and natural gas, increase our compliance and operating costs and consequently adversely affect our business.

Reduced demand for refined products could have an adverse effect on our results of operations.

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Factors that could lead to a decrease in market demand include:

• a recession, rising inflation, or other adverse economic condition that results in lower spending by consumers on gasoline, diesel, and travel;

• a recession, rising inflation, or other adverse economic conditions that results in lower spending by consumers on gasoline, diesel, and travel;

• higher fuel taxes or other governmental or regulatory actions that increase, directly or indirectly, the cost of gasoline;

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Weather conditions have a significant impact on the demand for propane for heating and agriculture purposes.

Accordingly, our sales volumes of propane are highest during the five-month winter-heating season of November through March and are directly affected by the temperatures during these months.

Accordingly, our sales volumes of propane are highest during the winter-heating season of November through March and are directly affected by the temperatures during these months.

Actual weather conditions can vary substantially from year to year, which may significantly affect our financial performance or condition.

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The agricultural demand for propane is affected by weather, as dry or warm weather during the harvest season may reduce the demand for propane used in some crop drying applications.

The widespread outbreak pandemics (like COVID-19) or any other public health crises that impacts the global demand for energy commodities may have material adverse effects on our business, financial position, results or operations and/or cash flows.

The widespread outbreak of pandemics (like COVID-19) or any other public health crises that impacts the global demand for energy commodities may have material adverse effects on our business, financial position, results or operations and/or cash flows.

We face risks related to the outbreak of illnesses, pandemics and other public health crises that are outside of our control and could significantly disrupt our operations and adversely affect our financial condition.

For example, the global spread of COVID-19 has caused business disruption, including disruption to the oil and gas industry.

The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains, reduced global demand for oil and gas, and created significant volatility and disruption of the financial and commodity markets.

The full extent of the impact of a pandemic on our operational and financial performance, including our ability to execute our business strategies and initiatives in the expected time frame, is uncertain and depends on various factors, including the demand for natural gas liquids, crude oil and refined products (including the impact that reductions in travel, manufacturing and consumer product demand have had and will have on the demand for energy commodities), produced water disposal services and the availability of personnel, equipment and services critical to our ability to operate our assets and the impact of potential governmental restrictions on travel, transportation and operations.

The degree to which the COVID-19 pandemic or any other public health crisis adversely impacts our results will also depend on future developments, which are highly uncertain and cannot be predicted.

These developments include, but are not limited to, the duration and spread of the outbreak, its severity, the actions to contain the virus or treat its impact, its impact on the economy and market conditions, and how quickly and to what extent normal economic and operating conditions can resume.

Therefore, while we expect this matter will continue to disrupt our operations in some way, the degree of the adverse financial impact cannot be reasonably estimated at this time.

The effects of the COVID-19 pandemic, including travel bans, prohibitions on group events and gatherings, shutdowns of certain businesses, curfews, shelter-in-place orders and recommendations to practice social distancing in addition to other actions taken by both businesses and governments, resulted in a significant and swift reduction in international and United States economic activity.

Since the beginning of 2021, the distribution of COVID-19 vaccines progressed and many government-imposed restrictions were relaxed or rescinded.

However, we continue to monitor the effects of the pandemic on our operations.

Our results of operations and financial condition have been and may continue to be adversely affected by the COVID-19 pandemic.

The extent to which our operating and financial results are affected by COVID-19 will depend on various factors and consequences beyond our control, such as the emergence of more contagious and harmful variants of the COVID-19 virus, the

duration and scope of the pandemic, additional actions by businesses and governments in response to the pandemic, and the speed and effectiveness of responses to combat the virus.

COVID-19, and the volatile regional and global economic conditions stemming from the pandemic, could also aggravate the other risk factors that we identify herein.

While the effects of the COVID-19 pandemic have lessened recently in the United States, we cannot predict the duration or future effects of the pandemic, or more contagious and harmful variants of the COVID-19 virus, and such effects may materially adversely affect our results of operations and financial condition in a manner that is not currently known to us or that we do not currently consider to present significant risks to our operations.

Our future financial performance and growth may be limited by our ability to successfully complete accretive acquisitions on economically acceptable terms.

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Failure to timely and successfully integrate acquired businesses into our existing operations may have a material adverse effect on our business, consolidated financial position or results of operations.

In addition to the risks set forth above, new businesses will subject us to additional business and operating risks, such as the acquisitions not being accretive to our unitholders as a result of decreased profitability, increased interest expense related to debt we incur to make

such acquisitions or an inability to successfully integrate those operations into our overall business operations.

In addition to the risks set forth above, new businesses will subject us to additional business and operating risks, such as the acquisitions not being

accretive to our unitholders as a result of decreased profitability, increased interest expense related to debt we incur to make such acquisitions or an inability to successfully integrate those operations into our overall business operations.

The realization of any of these risks could have a material adverse effect on our consolidated financial position or results of operations.

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The CFTC has also issued new rules, which became effective on March 15, 2021, that place limits on positions in certain core futures and equivalent swaps contracts for or linked to certain physical commodities, subject to exceptions for certain bona fide hedging transactions.

We do not expect the impact of those provisions to have a material effect on us.

However, new legislation and any new regulations could significantly increase the cost of derivative contracts (including through requirements to post collateral which could adversely affect our available liquidity), materially alter the terms of derivative contracts, reduce the availability of derivatives to protect against risks that we encounter, reduce our ability to monetize or restructure our existing derivative contracts, and increase our exposure to less creditworthy counterparties.

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We use various modes of transportation to carry natural gas liquids, crude oil, refined and renewable products and produced water, including trucks, railcars, barges, and pipelines, each of which is subject to regulation.

With respect to transportation by truck, we are subject to regulations promulgated under federal legislation, including the Federal Motor Carrier Safety Act and the Homeland Security Act of 2002, which cover the security and transportation of hazardous materials and are

administered by the DOT.

We also own and lease a fleet of railcars, the operation of which is subject to the regulatory jurisdiction of the Federal Railroad Administration of the DOT, as well as other federal and state regulatory agencies.

We also own and lease a fleet of railcars, the operation of which is subject to the regulatory

jurisdiction of the Federal Railroad Administration of the DOT, as well as other federal and state regulatory agencies.

Railcar accidents within the industry involving trains carrying crude oil from the Bakken region (none of which directly involved any of our business operations), have led to increased legislative and regulatory scrutiny over the safety of transporting crude oil by railcar.

The introduction of regulations that result in new requirements addressing the type, design, specifications or construction of railcars used to transport crude oil could result in severe transportation capacity constraints during the periods in which new railcars are constructed to meet new specifications or in which the railcars already placed in service are being retrofitted.

Our barge transportation operations are subject to the Jones Act, a federal law generally restricting marine transportation in the United States to vessels built and registered in the United States, and manned/owned by United States citizens, as well as setting forth the rules and regulations of the United States Coast Guard.

Non-compliance with any of these regulations could result in increased costs related to the transportation of our products and could have an adverse effect on our business.

Barge transportation is subject to the Jones Act, a federal law generally restricting marine transportation in the United States to vessels built and registered in the United States, and manned/owned by United States citizens, as well as setting forth the rules and regulations of the United States Coast Guard.

Non-compliance with any of these regulations could result in increased costs related to the transportation of our products.

In addition, under certain environmental laws, we could be subject to strict and/or joint and several liability for the investigation, removal or remediation of previously released materials.

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In April 2022, the state of New Mexico adopted new air quality rules that aim to eliminate hundreds of millions of pounds of harmful emissions annually from oil and gas production in New Mexico.

Compliance with these new rules is expected to begin in the summer of 2022.

Any significant increased costs or restrictions placed on our customers to comply with environmental laws and regulations could affect their production output significantly.

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Numerous proposals have been made and could continue to be made at the international, national, regional and state levels of government to monitor and limit existing emissions of GHGs as well as to restrict or eliminate such future emissions.

As a result, our operations as well as the operations of our crude oil and natural gas exploration and production customers and

suppliers are subject to a series of regulatory, political, litigation, and financial risks associated with the production and processing of fossil fuels and emission of GHGs.

As a result, our operations as well as the operations of our crude oil and natural gas exploration and production customers and suppliers are subject to a series of regulatory, political, litigation, and financial risks associated with the production and processing of fossil fuels and emission of GHGs.

In the United States, no comprehensive climate change legislation has been implemented at the federal level.

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Separately, on January 20, 2021, the Acting Secretary of the United States Department of the Interior issued an order that, among other things, imposed a 60-day moratorium on the issuance of fossil fuel authorizations, including leases and permits, on federal lands.

Although the order says it does not limit existing operations under valid leases, on January 27, 2021, President Biden signed an Executive Order indefinitely suspending new oil and gas leasing on federal lands, pending completion of a review of the federal government’s oil and gas permitting and leasing practices.

While the United States Department of the Interior announced on April 15, 2022 that it will resume oil and gas leasing on public lands following a federal court’s decision, the topic of oil and gas leasing on public land remains politically fraught, as the announcement indicates that federal land available for oil and gas leasing will be reduced by 80 percent from the acreage originally nominated due to environmental and climate concerns.

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There is also a risk that financial institutions will be required to adopt policies that have the effect of reducing the funding provided to the fossil fuel sector.

Recently, the Federal Reserve announced that it has applied to join the Network for Greening the Financial System, a consortium of financial regulators focused on addressing climate-related risks in the financial sector.

Federal Reserve announced that it has applied to join the Network for Greening the Financial System, a consortium of financial regulators focused on addressing climate-related risks in the financial sector.

A material reduction in the capital available to the fossil fuel industry could make it more difficult to secure funding for exploration, development, production, transportation and processing activities, which could result in decreased demand for our services.

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If any such effects were to occur, they could adversely affect our results of operations and ability to make cash distributions to unitholders.

In addition, while our consideration of changing weather conditions and inclusion of safety factors in design covers the uncertainties that climate change and other events may potentially introduce, our ability to mitigate the adverse impacts of these events depends in part on the effectiveness of our facilities and our disaster preparedness and response and business continuity planning, which may not have considered or be prepared for every eventuality.

the adverse impacts of these events depends in part on the effectiveness of our facilities and our disaster preparedness and response and business continuity planning, which may not have considered or be prepared for every eventuality.

State and federal legislation and regulatory initiatives relating to our hydraulic fracturing customers could harm our business.

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In one specific instance, we limited the water into a disposal well and redirected the flow of water to a different area of the geologic formation in order to address such concerns.

Recently, in December 2021, as a result of increased seismic activity, the Texas Railroad Commission suspended all deep oil and gas produced water injection in an area which spans approximately 100 square miles in Midland and Ector counties, which directly impacted one of our idled disposal wells.

We are currently in the process of plugging and abandoning the idled disposal well.

In December 2021, as a result of increased seismic activity, the Texas Railroad Commission suspended all deep oil and gas produced water injection in an area which spans approximately 100 square miles in Midland and Ector counties, which directly impacted one of our idled disposal wells.

This idled well was subsequently plugged and abandoned.

We cannot predict whether any federal, state or local laws or regulations will be enacted and, if so, what actions any such laws or regulations would require or prohibit.

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The Energy Policy Act of 1992 directed the Commission to establish a simplified and generally applicable ratemaking methodology for oil pipelines, keeping with the FERC’s statutory mandate to ensure that oil pipelines’ rates are just and reasonable.

Intrastate transportation and gathering pipelines that do not provide interstate services are not subject to regulation by state regulatory commissions, such as the Railroad Commission of Texas.

Intrastate transportation and gathering pipelines that do not provide interstate services are subject to regulation by state regulatory commissions, such as the Texas Railroad Commission.

The distinction between the FERC-regulated interstate pipeline transportation on the one hand and intrastate pipeline transportation on the other hand, is a fact-based determination.

The Grand Mesa Pipeline became operational on November 1, 2016 and has several points of origin in Colorado, runs from those origin points through Kansas and terminates in Cushing, Oklahoma.

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

The transportation services on the Grand Mesa

Pipeline are subject to FERC regulation.

Other of our transportation services could in the future become subject to the jurisdiction of the FERC, which could adversely affect the terms of service, rates and revenues of such services.

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Risks Related to Our Partnership Structure and in an Investment in Us

Our partnership agreement limits the fiduciary duties of our general partner to our unitholders and restricts the remedies available to our unitholders for actions taken by our general partner that might otherwise be breaches of fiduciary duty.

Fiduciary duties owed to our unitholders by our general partner are prescribed by law and our partnership agreement.

Our Partnership Agreement limits the fiduciary duties of our GP to our unitholders and restricts the remedies available to our unitholders for actions taken by our GP that might otherwise be breaches of fiduciary duty.

Fiduciary duties owed to our unitholders by our GP are prescribed by law and our Partnership Agreement.

The Delaware Revised Uniform Limited Partnership Act (“Delaware LP Act”) provides that Delaware limited partnerships may, in their partnership agreements, restrict the fiduciary duties owed by the general partner to limited partners and the partnership.

Our partnership agreement contains provisions that reduce the standards to which our general partner would otherwise be held by state fiduciary duty law.

Our Partnership Agreement contains provisions that reduce the standards to which our GP would otherwise be held by state fiduciary duty law.

For example, our Partnership Agreement:

• limits the liability and reduces the fiduciary duties of our general partner, while also restricting the remedies available to our unitholders for actions that, without these limitations, might constitute breaches of fiduciary duty.

• limits the liability and reduces the fiduciary duties of our GP, while also restricting the remedies available to our unitholders for actions that, without these limitations, might constitute breaches of fiduciary duty.

As a result of purchasing common units, our unitholders consent to some actions and conflicts of interest that might otherwise constitute a breach of fiduciary or other duties under applicable state law;

• permits our general partner to make a number of decisions in its individual capacity, as opposed to in its capacity as our general partner.

This entitles our general partner to consider only the interests and factors that it desires, and it has no duty or obligation to give any consideration to any interest of, or factors affecting, us, our affiliates or any limited partner.

• permits our GP to make a number of decisions in its individual capacity, as opposed to in its capacity as our GP.

This entitles our GP to consider only the interests and factors that it desires, and it has no duty or obligation to give any consideration to any interest of, or factors affecting, us, our affiliates or any limited partner.

Examples include the exercise of its limited call right, its voting rights with respect to the units it owns and its determination whether or not to consent to any merger or consolidation of the Partnership;

• provides that our general partner shall not have any liability to us or our unitholders for decisions made in its capacity as general partner so long as it acted in good faith, meaning our general partner subjectively believed that the decision was in, or not opposed to, the best interests of the Partnership;

• generally provides that affiliated transactions and resolutions of conflicts of interest not approved by the conflicts committee of the board of directors of our general partner and not involving a vote of our unitholders must be on terms no less favorable to us than those generally being provided to or available from unrelated third parties or be “fair and reasonable” to us and that, in determining whether a transaction or resolution is “fair and reasonable,” our general partner may consider the totality of the relationships between the parties involved, including other transactions that may be particularly favorable or advantageous to us;

• provides that our general partner and its officers and directors will not be liable for monetary damages to us or our limited partners for any acts or omissions unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that our general partner or those other persons acted in bad faith or engaged in fraud or willful misconduct.

• provides that our GP shall not have any liability to us or our unitholders for decisions made in its capacity as GP so long as it acted in good faith, meaning our GP subjectively believed that the decision was in, or not opposed to, the best interests of the Partnership;

• generally provides that affiliated transactions and resolutions of conflicts of interest not approved by the conflicts committee of the board of directors of our GP and not involving a vote of our unitholders must be on terms no less favorable to us than those generally being provided to or available from unrelated third parties or be “fair and reasonable” to us and that, in determining whether a transaction or resolution is “fair and reasonable,” our GP may consider the totality of the relationships between the parties involved, including other transactions that may be particularly favorable or advantageous to us;

• provides that our GP and its officers and directors will not be liable for monetary damages to us or our limited partners for any acts or omissions unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that our GP or those other persons acted in bad faith or engaged in fraud or willful misconduct.

By purchasing a common unit, a common unitholder will become bound by the provisions of our Partnership Agreement, including the provisions described above.

Our general partner and its affiliates have conflicts of interest with us and limited fiduciary duties to our unitholders, and they may favor their own interests to the detriment of us and our unitholders.

The NGL Energy GP Investor Group owns and controls our general partner and its 0.1% general partner interest in us.

Although our general partner has certain fiduciary duties to manage us in a manner beneficial to us and our unitholders, the executive officers and directors of our general partner have a fiduciary duty to manage our general partner in a manner beneficial to its owners.

Furthermore, since certain executive officers and directors of our general partner are executive officers or directors of affiliates of our general partner, conflicts of interest may arise between the NGL Energy GP Investor Group and its affiliates, including our general partner, on the one hand, and us and our unitholders, on the other hand.

As a result of these conflicts, our general partner may favor its own interests and the interests of its affiliates over the interests of our unitholders (see “– Our partnership agreement limits the fiduciary duties of our general partner to our unitholders and restricts the remedies available to our unitholders for actions taken by our general partner that might otherwise be breaches of fiduciary duty ,” above).

Our GP and its affiliates have conflicts of interest with us and limited fiduciary duties to our unitholders, and they may favor their own interests to the detriment of us and our unitholders.

The NGL Energy GP Investor Group owns and controls our GP and its 0.1% GP interest in us.

Although our GP has certain fiduciary duties to manage us in a manner beneficial to us and our unitholders, the executive officers and directors of our GP have a fiduciary duty to manage our GP in a manner beneficial to its owners.

Furthermore, since certain executive officers and directors of our GP are executive officers or directors of affiliates of our GP, conflicts of interest may arise between the NGL Energy GP Investor Group and its affiliates, including our GP, on the one hand, and us and our unitholders, on the other hand.

As a result of these conflicts, our GP may favor its own interests and the interests of its affiliates over the interests of our unitholders (see “– Our Partnership Agreement limits the fiduciary duties of our GP to our unitholders and restricts the remedies available to our unitholders for actions taken by our GP that might otherwise be breaches of fiduciary duty ,” above).

The risk to our unitholders due to such conflicts may arise because of the following factors, among others:

• our general partner is allowed to take into account the interests of parties other than us, such as members of the NGL Energy GP Investor Group, in resolving conflicts of interest;

• neither our partnership agreement nor any other agreement requires owners of our general partner to pursue a business strategy that favors us;

• except in limited circumstances, our general partner has the power and authority to conduct our business without unitholder approval;

• our general partner determines the amount and timing of asset purchases and sales, borrowings, issuance of additional partnership securities and the creation, reduction or increase of reserves, each of which can affect the amount of cash that is distributed to our unitholders;

• our general partner determines the amount and timing of any capital expenditures and whether a capital expenditure is classified as a maintenance capital expenditure, which reduces operating surplus, or an expansion capital expenditure, which does not reduce operating surplus.

This determination can affect the amount of cash that is distributed to our unitholders and to our general partner;

• our general partner determines which costs incurred by it are reimbursable by us;

• our general partner may cause us to borrow funds to permit the payment of cash distributions, even if the purpose or effect of the borrowing is to make incentive distributions;

• our GP is allowed to take into account the interests of parties other than us, such as members of the NGL Energy GP Investor Group, in resolving conflicts of interest;

• neither our Partnership Agreement nor any other agreement requires owners of our GP to pursue a business strategy that favors us;

• except in limited circumstances, our GP has the power and authority to conduct our business without unitholder approval;

• our GP determines the amount and timing of asset purchases and sales, borrowings, issuance of additional partnership securities and the creation, reduction or increase of reserves, each of which can affect the amount of cash that is distributed to our unitholders;

• our GP determines the amount and timing of any capital expenditures and whether a capital expenditure is classified as a maintenance capital expenditure, which reduces operating surplus, or an expansion capital expenditure, which does not reduce operating surplus.

This determination can affect the amount of cash that is distributed to our unitholders and to our GP;

• our GP determines which costs incurred by it are reimbursable by us;

• our GP may cause us to borrow funds to permit the payment of cash distributions, even if the purpose or effect of the borrowing is to make incentive distributions;

• our Partnership Agreement permits us to classify up to $20.0 million as operating surplus, even if it is generated from asset sales, non-working capital borrowings or other sources that would otherwise constitute capital surplus.

This cash may be used to fund distributions to our general partner in respect of the general partner interest or the incentive distribution rights (“IDRs”);

• our partnership agreement does not restrict our general partner from causing us to pay it or its affiliates for any services rendered to us or entering into additional contractual arrangements with any of these entities on our behalf;

• our general partner intends to limit its liability regarding our contractual and other obligations;

• our general partner may exercise its right to call and purchase all of the common units not owned by it and its affiliates if they own more than 80% of the common units;

• our general partner controls the enforcement of the obligations that it and its affiliates owe to us;

• our general partner decides whether to retain separate counsel, accountants or others to perform services for us;

• our general partner may elect to cause us to issue common units to it in connection with a resetting of the target distribution levels related to our general partner’s IDRs without the approval of the conflicts committee of the board of directors of our general partner or our unitholders.

This cash may be used to fund distributions to our GP in respect of the GP interest or the incentive distribution rights (“IDRs”);

• our Partnership Agreement does not restrict our GP from causing us to pay it or its affiliates for any services rendered to us or entering into additional contractual arrangements with any of these entities on our behalf;

• our GP intends to limit its liability regarding our contractual and other obligations;

• our GP may exercise its right to call and purchase all of the common units not owned by it and its affiliates if they own more than 80% of the common units;

• our GP controls the enforcement of the obligations that it and its affiliates owe to us;

• our GP decides whether to retain separate counsel, accountants or others to perform services for us;

• our GP may elect to cause us to issue common units to it in connection with a resetting of the target distribution levels related to our GP’s IDRs without the approval of the conflicts committee of the board of directors of our GP or our unitholders.

This election may result in lower distributions to our common unitholders in certain situations.

In addition, certain members of the NGL Energy GP Investor Group and their affiliates currently hold interests in other companies in the energy and natural resource sectors.

Our partnership agreement provides that our general partner will be restricted from engaging in any business activities other than acting as our general partner and those activities incidental to its ownership interest in us.

Our Partnership Agreement provides that our GP will be restricted from engaging in any business activities other than acting as our GP and those activities incidental to its ownership interest in us.

However, members of the NGL Energy GP Investor Group are not prohibited from engaging in other businesses or activities, including those that might be in direct competition with us.

As a result, they could potentially compete with us for acquisition opportunities and for new business or extensions of the existing services provided by us.

Pursuant to the terms of our partnership agreement, the doctrine of corporate opportunity, or any analogous doctrine, does not apply to our general partner or any of its affiliates, including its executive officers, directors and owners.

Pursuant to the terms of our Partnership Agreement, the doctrine of corporate opportunity, or any analogous doctrine, does not apply to our GP or any of its affiliates, including its executive officers, directors and owners.

Any such person or entity that becomes aware of a potential transaction, agreement, arrangement or other matter that may be an opportunity for us will not have any duty to communicate or offer such opportunity to us.

Any such person or entity will not be liable to us or to any limited partner for breach of any fiduciary duty or other duty by reason of the fact that such person or entity pursues or acquires such opportunity for itself, directs such opportunity to another person or entity or does not communicate such opportunity or information to us.

This may create actual and potential conflicts of interest between us and affiliates of our general partner and result in less than favorable treatment of us and our unitholders.

Even if our unitholders are dissatisfied, they have limited voting rights and are not entitled to elect our general partner or its directors.

This may create actual and potential conflicts of interest between us and affiliates of our GP and result in less than favorable treatment of us and our unitholders.

Even if our unitholders are dissatisfied, they have limited voting rights and are not entitled to elect our GP or its directors.

Unlike the holders of common stock in a corporation, unitholders have only limited voting rights on matters affecting our business and, therefore, limited ability to influence management’s decisions regarding our business.

Unitholders will have no right on an annual or ongoing basis to elect our general partner or its board of directors.

The board of directors of our general partner is chosen entirely by its members and not by our unitholders.

Unitholders will have no right on an annual or ongoing basis to elect our GP or its board of directors.

The board of directors of our GP is chosen entirely by its members and not by our unitholders.

Unlike publicly traded corporations, we will not conduct annual meetings of our unitholders to elect directors or conduct other matters routinely conducted at annual meetings of stockholders of corporations.

Furthermore, if our unitholders are dissatisfied with the performance of our general partner, they will have limited ability to remove our general partner.

Furthermore, if our unitholders are dissatisfied with the performance of our GP, they will have limited ability to remove our GP.

As a result of these limitations, the price at which the common units will trade could be diminished because of the absence or reduction of a takeover premium in the trading price.

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Our Partnership Agreement restricts the voting rights of unitholders owning 20% or more of our common units.

Unitholders’ voting rights are further restricted by a provision of our partnership agreement providing that any units held by a person that owns 20% or more of any class of units then outstanding, other than our general partner, its affiliates, their direct transferees and their indirect transferees approved by our general partner (which approval may be granted in its sole discretion) and persons who acquired such units with the prior approval of our general partner, cannot vote on any matter.

Our general partner interest or the control of our general partner may be transferred to a third party without the consent of our unitholders.

Our general partner may transfer its general partner interest to a third party in a merger or in a sale of all or substantially all of its assets without the consent of our unitholders.

Furthermore, our partnership agreement does not restrict the ability of the members of the NGL Energy GP Investor Group to transfer all or a portion of their ownership interest in our general partner to a third party.

The new owner of our general partner would then be in a position to replace the board of directors and officers of our general partner with its own designees and thereby exert significant control over the decisions made by the board of directors and officers.

The IDRs of our general partner may be transferred to a third party.

Our general partner may transfer its IDRs to a third party at any time without the consent of our unitholders.

If our general partner transfers its IDRs to a third party but retains its general partner interest, our general partner may not have the same incentive to grow our partnership and increase quarterly distributions to unitholders over time as it would if it had retained ownership of its IDRs.

Our general partner has a limited call right that may require our unitholders to sell their common units at an undesirable time or price.

If at any time our general partner and its affiliates own more than 80% of the common units, our general partner will have the right, which it may assign to any of its affiliates or to us, but not the obligation, to acquire all, but not less than all, of the common units held by unaffiliated persons at a price that is not less than their then-current market price, as calculated pursuant to the terms of our partnership agreement.

Unitholders’ voting rights are further restricted by a provision of our Partnership Agreement providing that any units held by a person that owns 20% or more of any class of units then outstanding, other than our GP, its affiliates, their direct transferees and their indirect transferees approved by our GP (which approval may be granted in its sole discretion) and persons who acquired such units with the prior approval of our GP, cannot vote on any matter.

Our GP interest or the control of our GP may be transferred to a third party without the consent of our unitholders.

Our GP may transfer its GP interest to a third party in a merger or in a sale of all or substantially all of its assets without the consent of our unitholders.

Furthermore, our Partnership Agreement does not restrict the ability of the members of the NGL Energy GP Investor Group to transfer all or a portion of their ownership interest in our GP to a third party.

The new owner of our GP would then be in a position to replace the board of directors and officers of our GP with its own designees and thereby exert significant control over the decisions made by the board of directors and officers.

The IDRs of our GP may be transferred to a third party.

Our GP may transfer its IDRs to a third party at any time without the consent of our unitholders.

If our GP transfers its IDRs to a third party but retains its GP interest, our GP may not have the same incentive to grow our partnership and increase quarterly distributions to unitholders over time as it would if it had retained ownership of its IDRs.

Our GP has a limited call right that may require our unitholders to sell their common units at an undesirable time or price.

If at any time our GP and its affiliates own more than 80% of the common units, our GP will have the right, which it may assign to any of its affiliates or to us, but not the obligation, to acquire all, but not less than all, of the common units held by unaffiliated persons at a price that is not less than their then-current market price, as calculated pursuant to the terms of our Partnership Agreement.

As a result, our unitholders may be required to sell their common units at an undesirable time or price and may not receive any return or may receive a negative return on their investment.

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• the market price of the common units may decline.

Our general partner, without the approval of our unitholders, may elect to cause us to issue common units while also maintaining its general partner interest in connection with a resetting of the target distribution levels related to its IDRs.

Our GP, without the approval of our unitholders, may elect to cause us to issue common units while also maintaining its GP interest in connection with a resetting of the target distribution levels related to its IDRs.

This could result in lower distributions to our unitholders.

Our general partner has the right to reset the initial target distribution levels at higher levels based on our distributions at the time of the exercise of the reset election.

Following a reset election by our general partner, the minimum quarterly distribution will be adjusted to equal the reset minimum quarterly distribution and the target distribution levels will be reset to correspondingly higher levels based on percentage increases above the reset minimum quarterly distribution.

If our general partner elects to reset the target distribution levels, it will be entitled to receive a number of common units.

The number of common units to be issued to our general partner will be equal to that number of common units that would have entitled their holder to an average aggregate quarterly cash distribution in the prior two quarters equal to the average of the distributions to our general partner on the IDRs in the prior two quarters.

We anticipate that our general partner would exercise this reset right to facilitate acquisitions or organic growth projects that would not be sufficiently accretive to cash distributions per common unit without such conversion.

It is possible, however, that our general partner could exercise this reset election at a time when it is experiencing, or expects to experience, declines in the cash distributions it receives related to its IDRs and may, therefore, desire to be issued common units rather than retain the right to receive distributions on its IDRs based on the initial target distribution levels.

As a result, a reset election may cause our common unitholders to experience a reduction in the amount of cash distributions that our common unitholders would have otherwise received had we not issued new common units and general partner interests to our general partner in connection with resetting the target distribution levels.

Our GP has the right to reset the initial target distribution levels at higher levels based on our distributions at the time of the exercise of the reset election.

Following a reset election by our GP, the minimum quarterly distribution will be adjusted to equal the reset minimum quarterly distribution and the target distribution levels will be reset to correspondingly higher levels based on percentage increases above the reset minimum quarterly distribution.

If our GP elects to reset the target distribution levels, it will be entitled to receive a number of common units.

The number of common units to be issued to our GP will be equal to that number of common units that would have entitled their holder to an average aggregate quarterly cash distribution in the prior two quarters equal to the average of the distributions to our GP on the IDRs in the prior two quarters.

We anticipate that our GP would exercise this reset right to facilitate acquisitions or organic growth projects that would not be sufficiently accretive to cash distributions per common unit without such conversion.

It is possible, however, that our GP could exercise this reset election at a time when it is experiencing, or expects to experience, declines in the cash distributions it receives related to its IDRs and may, therefore, desire to be issued common units rather than retain the right to receive distributions on its IDRs based on the initial target distribution levels.

As a result, a reset election may cause our common unitholders to experience a reduction in the amount of cash distributions that our common

unitholders would have otherwise received had we not issued new common units and GP interests to our GP in connection with resetting the target distribution levels.

Our unitholders’ liability may not be limited if a court finds that unitholder action constitutes control of our business.

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• we were conducting business in a state but had not complied with that particular state’s partnership statute;

• a unitholder’s right to act with other unitholders to remove or replace our general partner, to approve some amendments to our partnership agreement or to take other actions under our partnership agreement constitute “control” of our business.

• a unitholder’s right to act with other unitholders to remove or replace our GP, to approve some amendments to our Partnership Agreement or to take other actions under our Partnership Agreement constitute “control” of our business.

Our unitholders may have liability to repay distributions that were wrongfully distributed to them.

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In the event of our liquidation, winding-up or dissolution, the holders of the Preferred Units would have the right to receive proceeds from any such transaction before the holders of the common units.

The payment of the liquidation preference could result in common unitholders not receiving any consideration if we were to

liquidate, dissolve or wind up, either voluntarily or involuntarily.

The payment of the liquidation preference could result in common unitholders not receiving any consideration if we were to liquidate, dissolve or wind up, either voluntarily or involuntarily.

Additionally, the existence of the liquidation preference may reduce the value of the common units, make it harder for us to sell common units in offerings in the future, or prevent or delay a change of control.

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The present income tax treatment of publicly traded partnerships, including us, or an investment in our common units may be modified by administrative, legislative or judicial interpretation at any time.

For example, from time to time, members of Congress propose and consider substantive changes to the existing United States federal income tax laws that affect the tax treatment of publicly traded partnerships, including as a result of any fundamental tax reform.

For example, from time to time, members of Congress propose and consider substantive changes to the existing federal income tax laws that affect the tax treatment of publicly traded partnerships, including as a result of any fundamental tax reform.

We are unable to predict whether any such change or other proposals will ultimately be enacted or will affect our tax treatment.

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Any contest with the IRS may materially and adversely impact the market for our common units and the price at which they trade.

In addition, our costs of any contest with the IRS will be borne indirectly by our unitholders and our general partner because the costs will reduce our cash available for distribution.

In addition, our costs of any contest with the IRS will be borne indirectly by our unitholders and our GP because the costs will reduce our cash available for distribution.

If the IRS makes audit adjustments to our income tax returns for tax years beginning after 2017, it may collect any resulting taxes (including any applicable penalties and interest) directly from us, in which case our cash available for distribution to our unitholders could be substantially reduced.

Pursuant to the Bipartisan Budget Act of 2015, if the IRS makes audit adjustments to our income tax returns for tax years beginning after 2017, it may collect any resulting taxes (including any applicable penalties and interest) directly from us.

We will generally have the ability to shift any such tax liability to our general partner and our unitholders in accordance with their interests in us during the year under audit, but there can be no assurance that we will be able to do so under all circumstances.

We will generally have the ability to shift any such tax liability to our GP and our unitholders in accordance with their interests in us during the year under audit, but there can be no assurance that we will be able to do so under all circumstances.

If we are required to make payments of taxes, penalties and interest resulting from audit adjustments, our cash available for distribution to our unitholders could be substantially reduced.

Our unitholders will be required to pay taxes on their share of our income even if they do not receive any cash distributions from us.

Because we expect to be treated as a partnership for United States federal income tax purposes, our unitholders will be treated as partners to whom we will allocate taxable income that could be different in amount than the cash we distribute, our unitholders will be required to pay any federal income taxes and, in some cases, state and local income taxes on their share of our taxable income even if they receive no cash distributions from us.

Because we expect to be treated as a partnership for federal income tax purposes, our unitholders will be treated as partners to whom we will allocate taxable income that could be different in amount than the cash we distribute, our unitholders will be required to pay any federal income taxes and, in some cases, state and local income taxes on their share of our taxable income even if they receive no cash distributions from us.

For example, if we sell assets and use the proceeds to repay existing debt or fund capital expenditures, our unitholders may be allocated taxable income and gain resulting from the sale and may not receive a common unit distribution.

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For example, virtually all of our income allocated to organizations that are exempt from federal income tax, including IRAs and other retirement plans, will be unrelated business taxable income and will be taxable to them.

Distributions to non-United States persons will be reduced by withholding taxes at the highest applicable effective tax rate, and non-United States persons will be required to file United States federal income tax returns and pay tax on their share of our taxable income.

Distributions to non-United States persons will be reduced by withholding taxes at the highest applicable effective tax rate, and non-United States persons will be required to file federal income tax returns and pay tax on their share of our taxable income.

If you are a tax exempt entity or a non-United States person, you should consult your tax advisor before investing in our common units.

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Any position we take that is inconsistent with applicable Treasury Regulations may have to be disclosed on our federal income tax return.

This disclosure increases the likelihood that the IRS will challenge our positions and propose adjustments to some or all of our

This disclosure increases the likelihood that the IRS will challenge our positions and propose adjustments to some or all of our unitholders.

A successful IRS challenge to those positions could adversely affect the amount of tax benefits available to our unitholders.

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If the IRS or other state or local jurisdictions were to successfully assert that our corporate subsidiaries have more tax liability than we anticipate or legislation was enacted that increased the corporate tax rate, our cash available for distribution to our unitholders would be further reduced.

We prorate our items of income, gain, loss and deduction for United States federal income tax purposes between transferors and transferees of our units each month based on the ownership of our units on the first business day of each month, instead of on the basis of the date a particular unit is transferred.

We prorate our items of income, gain, loss and deduction for federal income tax purposes between transferors and transferees of our units each month based on the ownership of our units on the first business day of each month, instead of on the basis of the date a particular unit is transferred.

The IRS may challenge this treatment, which could change the allocation of items of income, gain, loss and deduction among our unitholders.

We prorate our items of income, gain, loss and deduction between transferors and transferees of our units each month based on the ownership of our units on the first business day of each month, instead of on the basis of the date a particular unit is transferred.

The United States Department of the Treasury recently adopted final Treasury Regulations allowing a similar monthly simplifying convention for taxable years beginning on or after August 3, 2015.

The United States Department of the Treasury adopted final Treasury Regulations allowing a similar monthly simplifying convention for taxable years beginning on or after August 3, 2015.

However, such regulations do not specifically authorize all aspects of the proration method we have adopted.

If the IRS were to challenge our proration method, we may be required to change the allocation of items of income, gain, loss and deduction among our unitholders.

A unitholder whose units are loaned to a “short seller” to effect a short sale of units may be considered as having disposed of those common units.

A unitholder whose common units are loaned to a “short seller” to effect a short sale of units may be considered as having disposed of those common units.

If so, such unitholder would no longer be treated for federal income tax purposes as a partner with respect to those common units during the period of the loan and may recognize a gain or loss from the disposition.

Because a unitholder whose units are loaned to a “short seller” to effect a short sale of units may be considered as having disposed of those common units, the unitholder would no longer be treated for federal income tax purposes as a partner with respect to those units during the period of the loan to the short seller and the unitholder may recognize a gain or loss from the disposition.

Moreover, during the period of the loan to the short seller, any of our income, gain, loss or deduction with respect to those units may not be reportable by the unitholder and any cash distributions received by the unitholder as to those units could be fully taxable as ordinary income.

Unitholders desiring to assure their status as partners and avoid the risk of gain recognition from a loan to a short seller are urged to consult a tax advisor to discuss whether it is advisable to modify any applicable brokerage account agreements to prohibit their brokers from borrowing their units.

We have adopted certain valuation methodologies and monthly conventions for United States federal income tax purposes that may result in a shift of income, gain, loss and deduction between our general partner and our unitholders.

Because a unitholder whose common units are loaned to a “short seller” to effect a short sale of units may be considered as having disposed of those common units, the unitholder would no longer be treated for federal income tax purposes as a partner with respect to those common units during the period of the loan to the short seller and the unitholder may recognize a gain or loss from the disposition.

Moreover, during the period of the loan to the short seller, any of our income, gain, loss or deduction with respect to those common units may not be reportable by the unitholder and any cash distributions received by the unitholder as to those common units could be fully taxable as ordinary income.

We have adopted certain valuation methodologies and monthly conventions for federal income tax purposes that may result in a shift of income, gain, loss and deduction between our GP and our unitholders.

The IRS may challenge this treatment, which could adversely affect the value of our common units.

When we issue additional units or engage in certain other transactions, we will determine the fair market value of our assets and allocate any unrealized gain or loss attributable to our assets to the capital accounts of our unitholders and our general partner.

Our methodology may be viewed as understating the value of our assets.

In that case, there may be a shift of income, gain, loss and deduction between certain unitholders and the general partner, which may be unfavorable to such unitholders.

In that case, there may be a shift of income, gain, loss and deduction between certain unitholders and the GP, which may be unfavorable to such unitholders.

Moreover, under our current valuation methods, subsequent purchasers of common units may have a greater portion of their Internal Revenue Code Section 743(b) adjustment allocated to our tangible assets and a lesser portion allocated to our intangible assets.

The IRS may challenge our valuation methods, or our allocation of the Internal Revenue Code Section 743(b) adjustment attributable to our tangible and intangible assets, and allocations of taxable income, gain, loss and deduction between the general partner and certain of our unitholders.

A successful IRS challenge to these methods or allocations could adversely affect the amount of taxable income or loss being allocated to our unitholders.

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federal income tax actually due, non-U.S.

holders of Preferred Units

may be required to file U.S.

holders of Preferred Units may be required to file U.S.

federal income tax returns in order to seek a refund of such excess.

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Since Russia’s military invasion of Ukraine in late February 2022, prices for commodities produced in those countries, including crude oil and natural gas, have risen sharply and have been volatile due to market concerns of worldwide supply constraints.

Terrorist attacks in the areas of our operations could negatively impact our ability to transport propane to our locations.

Terrorist attacks in the areas of our operations could negatively impact our ability to transport crude oil, natural gas liquids and refined and renewables products to our locations.

These risks could potentially negatively impact our consolidated results of operations.

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Any future cyber security attacks that affect our facilities, our customers and any financial data could have a material adverse effect on our business.

In addition, cyber security attacks on our customer and employee data may result in a financial loss,

including potential fines for failure to safeguard data, and may negatively impact our reputation.

In addition, cyber security attacks on our customer and employee data may result in a financial loss, including potential fines for failure to safeguard data, and may negatively impact our reputation.

Third-party systems on which we rely could also suffer operational system failure.

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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 1A. Risk Factors