NGL Energy Partners LP 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures, as defined in Rule 13(a)-15(e) and 15(d)-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure the information required to be disclosed in our filings and submissions under the Exchange Act is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission (“SEC”) and that such information is accumulated and communicated to our management, including the principal executive officer and principal financial officer of our general partner, as appropriate, to allow timely decisions regarding required disclosure. We completed an evaluation under the supervision and with participation of our management, including the principal executive officer and principal financial officer of our general partner, of the effectiveness of the design and operation of our disclosure controls and procedures at March 31, 2023. Based on this evaluation, the principal executive officer and principal financial officer of our general partner have concluded that as of March 31, 2023, such disclosure controls and procedures were effective. Management’s Report on Internal Control Over Financial Reporting The management of our Delaware limited partnership (the “Partnership”) and subsidiaries is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13(a)-15(f). Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer of our general partner, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in the 2013 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or the COSO framework. Based on our evaluation under the COSO framework, our management concluded that our internal control over financial reporting was effective as of March 31, 2023. Our internal control over financial reporting as of March 31, 2023 has been audited by Grant Thornton LLP, an independent registered public accounting firm, as stated in their report, which appears below in this section of the Annual Report. Changes in Internal Control Over Financial Reporting There have been no changes in our internal controls over financial reporting (as defined in Rule 13(a)-15(f) of the Exchange Act) during the three months ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. 88 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors of NGL Energy Holdings LLC and Unitholders of NGL Energy Partners LP Opinion on internal control over financial reporting We have audited the internal control over financial reporting of NGL Energy Partners LP (a Delaware limited partnership) and subsidiaries (the “Partnership”) as of March 31, 2023, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Partnership maintained, in all material respects, effective internal control over financial reporting as of March 31, 2023, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Partnership as of and for the year ended March 31, 2023, and our report dated May 31, 2023 expressed an unqualified opinion on those financial statements. Basis for opinion The Partnership’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Partnership’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and limitations of internal control over financial reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ GRANT THORNTON LLP Tulsa, Oklahoma May 31, 2023 89 Item 9B. Other Information None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. PART III Item 10. Directors, Executive Officers and Corporate Governance Board of Directors of our General Partner NGL Energy Holdings LLC, our general partner (“GP”), manages our operations and activities on our behalf through its directors and executive officers. Unitholders are not entitled to elect the directors of our GP or directly or indirectly participate in our management or operations. The NGL Energy GP Investor Group appoints all members to the board of directors of our GP. The board of directors of our GP currently has eight members. The board of directors of our GP has determined that Mr. James M. Collingsworth, Mr. Stephen L. Cropper, Mr. Bryan K. Guderian and Mr. Derek S. Reiners satisfy the New York Stock Exchange (“NYSE”) and Securities and Exchange Commission (“SEC”) independence requirements. The NYSE does not require a listed publicly traded limited partnership like NGL to have a majority of independent directors on the board of directors of its general partner. In addition, we are not required to have a nominating and corporate governance committee. In evaluating director candidates, the NGL Energy GP Investor Group assesses whether a candidate possesses the integrity, judgment, knowledge, experience, skill and expertise that are likely to enhance the ability of the board of directors of our GP to manage and direct our affairs and business, including, when applicable, to enhance the ability of committees of the board to fulfill their duties. Our GP has no minimum qualifications for director candidates. In general, however, the NGL Energy GP Investor Group reviews and evaluates both incumbent and potential new directors in an effort to achieve diversity of skills and experience among the directors of our GP and in light of the following criteria: • experience in business, government, education, technology or public interests; • high-level managerial experience in large organizations; • breadth of knowledge regarding our business and industry; • specific skills, experience or expertise related to an area of importance to us, such as energy production, consumption, distribution or transportation, government, policy, finance or law; • moral character and integrity; • commitment to our unitholders’ interests; • ability to provide insights and practical wisdom based on experience and expertise; • ability to read and understand financial statements; and • ability to devote the time necessary to carry out the duties of a director, including attendance at meetings and consultation on partnership matters. Although our GP does not have a formal policy in regard to the consideration of diversity in identifying director nominees, qualified candidates for nomination to the board are considered without regard to race, color, religion, gender, ancestry or national origin. 90 Directors and Named Executive Officers Directors of our GP are appointed by the NGL Energy GP Investor Group and hold office until their successors have been duly elected and qualified or until the earlier of their death, resignation, removal or disqualification. Named executive officers are appointed by, and serve at the discretion of, the board of directors of our GP. The following table summarizes information regarding the directors of our GP and our named executive officers as of May 26, 2023. Name Age Position with NGL Energy Holdings LLC H. Michael Krimbill 69 Chief Executive Officer and Director Bradley P. Cooper 47 Executive Vice President and Chief Financial Officer Kurston P. McMurray 51 Executive Vice President and General Counsel and Secretary Lawrence J. Thuillier 52 Chief Accounting Officer Shawn W. Coady 61 Director James M. Collingsworth 68 Director Stephen L. Cropper 73 Director Bryan K. Guderian 63 Director John T. Raymond 52 Director Derek S. Reiners 52 Director Randall S. Wade 53 Director H. Michael Krimbill . Mr. Krimbill has served as our Chief Executive Officer since October 2010 and as a member of the board of directors of our GP since its formation in September 2010. Mr. Krimbill was the President and Chief Financial Officer of Energy Transfer Partners, L.P. from 2004 until his resignation in January 2007. Mr. Krimbill joined Heritage Propane Partners, L.P., the predecessor of Energy Transfer Partners, L.P., as Vice President and Chief Financial Officer in 1990. Mr. Krimbill was President of Heritage Propane Partners, L.P. from 1999 to 2000 and President and Chief Executive Officer of Heritage Propane Partners, L.P. from 2000 to 2005. Mr. Krimbill also served as a director of Energy Transfer Equity, the general partner of Energy Transfer Partners, L.P., from 2000 to January 2007, Williams Partners L.P. from 2007 to September 2012, and Pacific Commerce Bank from January 2011 to March 2015. Mr. Krimbill brings leadership, oversight and financial experience to the board. Mr. Krimbill provides expertise in managing and operating a publicly traded partnership, including substantial expertise in successfully acquiring and integrating midstream businesses. Mr. Krimbill also brings financial expertise to the board, including his prior service as a chief financial officer. Mr. Krimbill’s experience serving on other public company boards is also a valuable asset to the board of directors of our GP. Bradley P. Cooper . Mr. Cooper has served as our Executive Vice President and Chief Financial Officer since January 13, 2023. Mr. Cooper served as our Senior Vice President, Administration and Risk from June 2021, when he joined NGL, to January 2023. Mr. Cooper spent 10 years with WPX Energy, Inc. (“WPX”) where he was Vice President of Finance and Treasurer. Prior to WPX, he was at The Williams Companies where he held various corporate finance and risk management leadership roles. Kurston P. McMurray. Mr. McMurray has served as our Executive Vice President and General Counsel and Secretary since October 2016. Mr. McMurray joined NGL in February 2015 as Vice President, Legal and Corporate Secretary. Prior to joining NGL, Mr. McMurray practiced law in the Tulsa, Oklahoma area since 1998 at firms including Moyers, Martin, Santee, Imel & Tetrick LLP. and Robinett & Osmond and was a founding shareholder of Kurston P. McMurray, PC and Wilkin/McMurray PLLC. Mr. McMurray’s private practice specialized in business transactions, real estate, construction, healthcare, banking, corporate governance, corporate management and commercial litigation. Lawrence J. Thuillier. Mr. Thuillier has served as our Chief Accounting Officer since January 2016. Prior to joining NGL, Mr. Thuillier served in various roles at Eagle Rock Energy Partners, L.P. from December 2007 through October 2015, most recently as Vice President of Financial Reporting and Corporate Controller. Mr. Thuillier served as Assistant Corporate Controller for Exterran Holdings, Inc. (formerly Universal Compression) from November 2006 through November 2007. Prior to that, Mr. Thuillier served in various roles at Deloitte & Touche LLP, most recently as Audit Senior Manager. Shawn W. Coady . Dr. Coady served as our President and Chief Operating Officer, Retail Division, from April 2012 to March 2018, when we sold a portion of our Retail Propane segment to DCC LPG (“DCC”), and previously served as our Co-President and Chief Operating Officer, Retail Division from October 2010 through April 2012. Dr. Coady served as an executive officer of DCC from April 2018 until his retirement in December 2020. Dr. Coady served as a member of the board 91 of directors of our GP since its formation in September 2010. Dr. Coady has served as an officer of Hicks Oils & Hicksgas, Incorporated (“HOH”), from March 1989 to September 2010 when HOH contributed its propane and propane related assets to Hicksgas LLC, and the membership interests in Hicksgas LLC were contributed to us as part of our formation transactions. Dr. Coady was also the President of Hicksgas Gifford, Inc. from March 1989 until the membership interests in the company were contributed to us as part of our formation transactions. Dr. Coady has served as a director for the National Propane Gas Association from 2004 to 2015 and as a member of the executive committee of the Illinois Propane Gas Association from 2004 to March 2015. Dr. Coady brings valuable operational experience to the board. Dr. Coady has over 25 years of experience in the retail propane industry, and provides expertise in both acquisition and organic growth strategies. Dr. Coady also provides insight into developments and trends in the propane industry through his leadership roles in industry associations. James M. Collingsworth . Mr. Collingsworth has served on the board of directors of our GP since January 2015. Mr. Collingsworth previously served as a Senior Vice President of the general partner of Enterprise Products Partners L.P. from November 2001 through January 2014. Prior to that, Mr. Collingsworth served as a board member of Texaco Canada Petroleum Inc. from July 1998 to October 2001 and was employed by Texaco from 1991 to 2001 in various management positions, including Senior Vice President of NGL Assets and Business Services from July 1998 to October 2001. Prior to joining Texaco, Mr. Collingsworth was director of feedstocks for Rexene Petrochemical Company from 1988 to 1991 and served in the MAPCO, Inc. organization from 1973 to 1988 in various capacities, including customer service and business development manager of the Mid-America and Seminole pipelines. Mr. Collingsworth served as a director of American Ethane Co. Mr. Collingsworth currently serves on the board of directors of Martin Midstream Partners L.P. Mr. Collingsworth brings a wealth of in-depth industry experience to the board. Mr. Collingsworth has worked in all facets of the midstream and petrochemical industry for more than 40 years. Stephen L. Cropper . Mr. Cropper joined the board of directors of our GP in June 2011. Mr. Cropper held various positions during his 25-year career at The Williams Companies, Inc., including serving as the President and Chief Executive Officer of Williams Energy Services, a Williams operating unit involved in various energy-related businesses, until his retirement in 1998. Mr. Cropper served as a director of Energy Transfer Partners, L.P. from 2000 through 2005. Since Mr. Cropper’s retirement from The Williams Companies, Inc. in 1998, he has been a consultant and private investor and also served as a director of Sunoco Logistics Partners, L.P., NRG Energy, Inc., Berry Petroleum Company, Rental Car Finance Corp., a subsidiary of Dollar Thrifty Automotive Group and Wawa Inc. Mr. Cropper currently serves on the board of directors of QuikTrip Corporation. Mr. Cropper brings substantial experience in the energy business and in the marketing of energy products to the board. With his significant management and governance experience, Mr. Cropper provides important skills in identifying, assessing and addressing various business issues. As a director for other public companies, Mr. Cropper also provides cross board experience. On May 25, 2023, Mr. Cropper notified the Partnership that he will be resigning from his board position effective June 2, 2023. Bryan K. Guderian . Mr. Guderian joined the board of directors of our GP in May 2012. Mr. Guderian currently serves as a Principal of BKG Consulting LLC, an energy related consulting firm. Mr. Guderian has served as Executive Vice President of Business Development of WPX from February 2018 until his retirement in January 2021. Mr. Guderian served as Senior Vice President of Business Development of WPX from October 2014 to February 2018 and as Senior Vice President of Operations of WPX from August 2011 to October 2014. Mr. Guderian previously served as Vice President of the Exploration & Production unit of The Williams Companies, Inc. from 1998 until August 2011, where he had responsibility for overseeing international operations. Mr. Guderian served as a director of Apco Oil & Gas International Inc., from 2002 to 2015 and as a director of Petrolera Entre Lomas S.A. from 2003 to 2015. Mr. Guderian brings considerable upstream experience to the board including executive, operational and financial expertise from 30 years of petroleum industry involvement, the majority of which has been focused in exploration and production. John T. Raymond. Mr. Raymond joined the board of directors of our GP in August 2013. Mr. Raymond is the Founder and Majority Owner of The Energy & Minerals Group (“EMG”) of which he has been a Managing Partner and the Chief Executive Officer since its September 2006 inception. Mr. Raymond has held executive leadership positions with various energy companies, including President and Chief Executive Officer of Plains Resources Inc. (the predecessor entity of Vulcan 92 Energy Corporation), President and Chief Operating Officer of Plains Exploration and Production Company and was a Director of Plains All American Pipeline, LP. Mr. Raymond also currently serves as a director of Ferus Inc., Ferus Natural Gas Fuels Inc., MarkWest Utica EMG, LLC, Medallion Midstream, LLC and PAA GP Holdings LLC. Mr. Raymond manages various private investments through personally held Lynx Holdings, LLC. Mr. Raymond brings extensive financial and industry experience to the board. As a director for other public companies, Mr. Raymond also provides cross board experience. Derek S. Reiners. Mr. Reiners joined the board of directors of our GP in December 2019 and was appointed to serve on the Audit Committee. Mr. Reiners currently serves as the President of Contango Energy Capital LLC, a privately held investment and consulting firm. Prior to that, Mr. Reiners served in various senior financial and accounting roles at ONEOK, Inc. and ONEOK Partners, L.P. from August 2009 to May 2019, including Senior Vice President and Chief Accounting Officer from August 2009 to December 2012, Senior Vice President, Chief Financial Officer and Treasurer from January 2013 to May 2017 and Senior Vice President, Finance and Treasurer from June 2017 to May 2019. Prior to joining ONEOK, Mr. Reiners was a partner at Grant Thornton LLP from August 2004 to July 2009. Mr. Reiners is a certified public accountant. Mr. Reiners brings extensive executive, financial and operational experience to the board. With over ten years of experience in the natural gas liquids industry in numerous positions, Mr. Reiners provides valuable insight into our business and industry. Randall S. Wade . Mr. Wade has served on the board of directors of our GP since February 2021. Mr. Wade is the President of EIG Global Energy Partners (“EIG”) and a member of its Investment and Executive Committees. He has broad involvement in the firm’s various activities including investments, investor relations, operations and strategic initiatives. Since joining EIG in 1996, Mr. Wade has filled various roles including Chief Operating Officer, head of the direct lending strategy, investment principal with coverage responsibility for Australia and an analyst for the oil and gas team. Prior to joining EIG, Mr. Wade was a Commercial Lending Officer for First Interstate Bank of Texas, where he was responsible for developing a middle-market loan portfolio. Mr. Wade brings extensive financial and industry experience to the board. Director Appointment Rights The Limited Liability Company Agreement of NGL Energy Holdings LLC grants certain parties the right to designate a specified number of persons to serve on the board of directors of our GP. EMG NGL HC LLC has the right to designate one person to serve on the board of directors of our GP, and has designated John T. Raymond. EIG has the right to designate one person to serve on the board of directors of our GP, and has designated Randall S. Wade. The Coady Group (which consists of certain entities controlled by Shawn W. Coady and his brother Todd M. Coady) and the investors who formed the Partnership (“IEP Parties”) (which consists of certain entities controlled by H. Michael Krimbill, and two other investors) each have the right to designate one person to serve on the board of directors of our GP. The Coady Group has designated Shawn W. Coady and the IEP Parties have designated H. Michael Krimbill. Board Leadership Structure and Role in Risk Oversight The board of directors of our GP believes that whether the offices of chairman of the board and chief executive officer are combined or separated should be decided by the board, from time to time, in its business judgment after considering relevant circumstances. The board of directors of our GP currently does not have a chairman, although our chief executive officer, Mr. Krimbill, presides over the meetings. The board of directors of our GP and its committees regularly review material operational, financial, compensation and compliance risks with senior management. In particular, the audit committee is responsible for risk oversight with respect to financial and compliance risks and risks relating to our audit and independent registered public accounting firm. Our compensation committee considers risk in connection with its design and evaluation of compensation programs for our senior management. Each committee regularly reports to the board of directors of our GP regarding its respective risk oversight role. 93 Audit Committee The board of directors of our GP has established an audit committee. The audit committee assists the board in its oversight of the integrity of our financial statements and our compliance with legal and regulatory requirements and partnership policies and controls. The audit committee has the sole authority to, among other things: • retain and terminate our independent registered public accounting firm; • approve all auditing services and related fees and the terms thereof performed by our independent registered public accounting firm; and • establish policies and procedures for the pre-approval of all non-audit services and tax services to be rendered by our independent registered public accounting firm. The audit committee is also responsible for confirming the independence and objectivity of our independent registered public accounting firm. Our independent registered public accounting firm is given unrestricted access to the audit committee and our management, as necessary. Mr. Collingsworth, Mr. Cropper, Mr. Guderian, and Mr. Reiners currently serve on the audit committee, and Mr. Reiners serves as the chairman. The board of directors of our GP has determined that Mr. Reiners is an “audit committee financial expert” as defined under SEC rules and that each member of the audit committee is financially literate. In compliance with the requirements of the NYSE, all of the members of the audit committee are independent directors, as defined in the applicable NYSE and Exchange Act rules. Compensation Committee The board of directors of our GP has established a compensation committee. The compensation committee’s responsibilities include the following, among others: • establishing the GP’s compensation philosophy and objectives; • approving the compensation of the Chief Executive Officer and other officers; • making recommendations to the board of directors with respect to the directors; and • reviewing and making recommendations to the board of directors with respect to incentive compensation and equity-based compensation plans. Mr. Collingsworth, Mr. Cropper, and Mr. Guderian currently serve on the compensation committee, and Mr. Cropper serves as the chairman. The board of directors of our GP has determined that Mr. Cropper, Mr. Collingsworth and Mr. Guderian are independent directors under applicable NYSE and Exchange Act rules. Corporate Governance The board of directors of our GP has adopted a Code of Ethics for the Chief Executive Officer and Senior Financial Officers, or Code of Ethics, that applies to the Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, Corporate Controller and all other senior financial and accounting officers of our GP. Amendments to or waivers from the Code of Ethics will be disclosed on our website. The board of directors of our GP has also adopted Corporate Governance Guidelines that outline important policies and practices regarding our governance and a Code of Business Conduct and Ethics that applies to the directors, officers and employees of our GP and the Partnership. We make available free of charge, within the “Governance” section of our website at www.nglenergypartners.com/governance, and in print to any unitholder who so requests, the Code of Ethics, the Corporate Governance Guidelines, the Code of Business Conduct and Ethics and the charters of the audit committee and the compensation committee of the board of directors of our GP. Requests for print copies may be directed to Investor Relations at investorinfo@nglep.com or to Investor Relations, NGL Energy Partners LP, 6120 South Yale Avenue, Suite 805, Tulsa, Oklahoma 74136 or made by telephone at (918) 481-1119. 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. 94 Meeting of Non-Management Directors and Communications with Directors At each quarterly meeting of the audit committee and/or the board of directors of our GP, our independent directors meet in an executive session without participation by management or non-independent directors. Mr. Reiners presides over these executive sessions. Unitholders or interested parties may communicate directly with the board of directors of our GP, any committee of the board, any independent directors, or any one director, by sending written correspondence by mail addressed to the board, committee or director to the attention of our Secretary at the following address: Name of the Director(s), c/o Secretary, NGL Energy Partners LP, 6120 South Yale Avenue, Suite 805, Tulsa, Oklahoma 74136. Communications are distributed to the board, committee, or director as appropriate, depending on the facts and circumstances outlined in the communication. Item 11. Executive Compensation Compensation Discussion and Analysis The year “2023” in the Compensation Discussion and Analysis and the summary compensation table refers to our fiscal year ended March 31, 2023. Introduction The board of directors of our GP has responsibility and authority for compensation-related decisions for our executive officers. The board of directors of our GP has formed a compensation committee to develop our compensation program and to approve the compensation of the Chief Executive Officer and other officers. Our executive officers are also officers of our operating companies. While we reimburse our GP and its affiliates for all expenses they incur on our behalf, our executive officers do not receive any additional compensation for the services they provide to our GP. Our “named executive officers” for fiscal year 2023 were: • H. Michael Krimbill–Chief Executive Officer • Bradley P. Cooper–Executive Vice President and Chief Financial Officer (effective January 13, 2023) • Lawrence J. Thuillier–Chief Accounting Officer • Kurston P. McMurray–Executive Vice President and General Counsel and Secretary • Linda J. Bridges–Executive Vice President and Chief Financial Officer (resigned effective January 13, 2023) • John A. Ciolek–Executive Vice President, Strategic Initiatives (resigned effective October 21, 2022) Compensation Philosophy Our compensation philosophy emphasizes pay-for-performance, focused primarily on the ability to increase sustainable quarterly distributions to our unitholders. Pay-for-performance is based on a combination of our performance and the individual executive officer’s contribution to our performance. We believe this pay-for-performance approach generally aligns the interests of our executive officers with the interests of our unitholders, and at the same time enables us to maintain a lower level of cash compensation expense in the event our operating and financial performance do not meet our expectations. Our executive compensation program is designed to provide a total compensation package that allows us to: • Attract and retain individuals with the background and skills necessary to successfully execute our business strategies; • Motivate those individuals to reach short-term and long-term goals in a way that aligns their interests with the interests of our unitholders; and • Reward success in reaching those goals. Factors Enhancing Alignment with Unitholder Interests • At risk incentive compensation based on annual financial performance and growth in unitholder value; 95 • No excise tax gross-ups; and • Compensation committee engages an independent compensation adviser. Compensation Setting Process Our compensation program for our named executive officers supports our philosophy of pay-for-performance. • Role of Management: Our Chief Executive Officer provides periodic recommendations to the compensation committee and the board of directors of our GP regarding the compensation of our named executive officers, other than his own. • Role of the Compensation Committee’s Consultant: In carrying out its responsibilities for establishing, implementing and monitoring the effectiveness of our executive compensation philosophy, plans and programs, our compensation committee has the authority to engage outside experts to assist in its deliberations. In March 2021, the compensation committee received compensation advice and data from Pearl Meyer & Partners (“PM&P”). PM&P provided advice and guidance regarding the principal components of compensation for our directors and market salary information for certain executive and senior vice president positions. The compensation committee reviewed the services provided by PM&P and determined that they are independent in providing executive compensation consulting services. In making this determination, the compensation committee noted the following: ◦ PM&P did not provide any services to the Partnership or management other than compensation consulting services requested by or with the approval of the compensation committee; ◦ PM&P does not provide, directly or indirectly through affiliates, any non-compensation services such as pension consulting or human resource outsourcing; ◦ PM&P maintains a conflicts policy, which was provided to the compensation committee with specific policies and procedures designed to ensure independence; ◦ Fees paid to PM&P by the Partnership for the services provided in March 2021 were less than 1% of PM&P’s total revenue; ◦ None of the PM&P consultants working on Partnership matters had any business or personal relationship with compensation committee members; ◦ None of the PM&P consultants working on Partnership matters (or any consultants at PM&P) had any business or personal relationship with any executive officer of the Partnership; and ◦ None of the PM&P consultants working on Partnership matters own Partnership interests. The compensation committee continues to monitor the independence of its compensation consultant on a periodic basis. 96 Elements of Executive Compensation As part of our pay-for-performance approach to executive compensation, the compensation of our executive officers includes a significant component of incentive compensation based on our performance. The following table summarizes the primary elements of compensation in our executive compensation program: Objective Supported Element Primary Purpose How Amount Determined Attract & Retain Motivate & Pay-for- Performance Unitholder Alignment Base Salary Fixed income to compensate executive officers for their level of responsibility, expertise and experience Based on competition in the marketplace for executive talent and abilities X Discretionary Cash Bonus Awards Rewards achievement of specific annual financial and operational performance goals Based on the named executive officer’s relative contribution to the ongoing business of the Partnership X X X Recognizes individual contributions to our performance Long-Term Equity Incentive Awards Motivates and rewards the achievement of long-term performance goals, including increasing the market price of our common units and the quarterly distributions to our unitholders Based on the named executive officer’s expected contribution to long-term performance goals X X X Provides a forfeitable long-term incentive to encourage executive retention Base Salary The compensation committee periodically reviews the base salaries of our named executive officers and may recommend adjustments as necessary. We do not make automatic annual adjustments to base salary. Our named executive officers are entitled to the following annual base salaries: Name Fiscal Year Ended March 31, 2022 Base Salary Rate($)(1) Fiscal Year Ended March 31, 2023 Base Salary Rate($)(2) H. Michael Krimbill 625,000 700,000 Bradley P. Cooper — 500,000 Lawrence J. Thuillier 312,000 335,000 Kurston P. McMurray 500,000 500,000 Linda J. Bridges 500,000 500,000 John A. Ciolek 500,000 500,000 (1) Ms. Bridges base salary became effective with her appointment to Executive Vice President and Chief Financial Officer on September 30, 2021. Mr. Thuillier’s base salary rate became effective on January 16, 2022. All other named executive officers’ base salary rates were effective April 1, 2021, other than Mr. Cooper who was not serving as a named executive officer during the relevant fiscal year. (2) Mr. Cooper’s base salary rate increased from $375,000 effective with his appointment to Executive Vice President and Chief Financial Officer on January 13, 2023. Mr. Krimbill’s and Mr. Thuillier’s base salary rate became effective on March 26, 2023. Ms. Bridges and Mr. Ciolek’s base salary rates for the fiscal year were prorated through January 13, 2023 and October 21, 2022, respectively, the dates of their resignation from employment. Mr. McMurray’s base salary rate was effective April 1, 2022. Discretionary Cash Bonus Awards None of the named executive officers is subject to a formal cash bonus plan, and any cash bonuses are at the discretion of the compensation committee of the board of directors of our GP. During fiscal year 2023, cash bonuses of $0.8 million, $0.5 97 million, $0.4 million and $0.2 million were paid to Ms. Bridges, Mr. McMurray, Mr. Cooper and Mr. Thuillier, respectively. Neither Mr. Krimbill nor Mr. Ciolek received a cash bonus during fiscal year 2023. Long-Term Equity Incentive Awards The Partnership previously adopted a long-term incentive plan (“LTIP”), which allowed for the issuance of equity-based compensation. The LTIP expired with respect to future awards on May 10, 2021. Restricted units granted prior to the LTIP expiring will continue to vest subject to the continued service of the recipients through the vesting date (the “Service Awards”). The following table summarizes Service Awards activity for all outstanding Service Awards during fiscal year 2023 with respect to the named executive officers: Unvested Units at Unvested Units at Name March 31, 2022 Units Vested Units Forfeited March 31, 2023 H. Michael Krimbill (1) 187,500 (125,000) — 62,500 Lawrence J. Thuillier (2) 41,250 (27,500) — 13,750 Kurston P. McMurray (3) 112,500 (75,000) — 37,500 Linda J. Bridges (4) 75,000 (25,000) (50,000) — John A. Ciolek (5) 112,500 — (112,500) — (1) Mr. Krimbill vested in 62,500 Service Awards on November 14, 2022 and 62,500 Service Awards on February 13, 2023. (2) Mr. Thuillier vested in 13,750 Service Awards on November 14, 2022 and 13,750 Service Awards on February 13, 2023. (3) Mr. McMurray vested in 37,500 Service Awards on November 14, 2022 and 37,500 Service Awards on February 13, 2023. (4) Ms. Bridges vested in 25,000 Service Awards on November 14, 2022. She forfeited all remaining outstanding Service Awards upon her resignation from employment on January 13, 2023. (5) Mr. Ciolek forfeited all outstanding Service Awards upon his resignation from employment on October 21, 2022. The unvested Service Awards at March 31, 2023 vest on November 15, 2023, subject to the continued service of the named executive officers through such vesting date. Severance and Change in Control Benefits We do not provide any severance or change of control benefits to our named executive officers, other than to Mr. McMurray, who is entitled to receive severance benefits pursuant to his employment agreement in the event of certain terminations of his employment (as described below after the “Summary Compensation Table” under the heading, “Employment Agreement with Mr. McMurray”). The board of directors of our GP has the option to accelerate the vesting of the Service Awards in the event of a change in control of the Partnership, although it is not under any obligation to do so. If the board of directors of our GP were to exercise its discretion to accelerate the vesting of Service Awards upon a change in control, that hypothetically occurred on March 31, 2023, the value of such units would be the same as reported in the “Outstanding Equity Awards at March 31, 2023” table below (in the “Market Value of Service Award Units that Have Not Yet Vested” column). 401(k) Plan We have established a defined contribution 401(k) plan to assist our eligible employees in saving for retirement on a tax-deferred basis. The 401(k) plan permits all eligible employees, including our named executive officers, to make voluntary pre-tax contributions to the plan, subject to applicable tax limitations. For every dollar that employees contribute up to 4% of their eligible compensation (as defined in the plan), we contribute one dollar, plus 50 cents for every dollar employees contribute between 4% and 6% of their eligible compensation (as defined in the plan). Our matching contributions vest over an employee’s first two years of employment, subject to a participant’s continued service. Other Benefits We do not maintain a defined benefit or pension plan for our executive officers, because we believe such plans primarily reward longevity rather than performance. We offer a benefits package available to substantially all full-time employees, which includes a 401(k) plan and medical, dental, vision, disability and life insurance. 98 Other Officers Certain officers who have leadership roles within our individual business segments, but who are not executive officers, participate in formulaic bonus programs that are based on the performance of the individual business segments with which they are involved. In most cases, similar programs were in place prior to our acquisition of the businesses, and we have left the programs substantially intact. Employment Agreements We do not have employment agreements with any of our named executive officers, other than Mr. McMurray (as described below after the “Summary Compensation Table” under the heading, “Employment Agreement with Mr. McMurray”). Deductibility of Compensation We believe that the compensation paid to the named executive officers is generally fully deductible for federal income tax purposes. We are a limited partnership and do not meet the definition of a “corporation” subject to deduction limitations under Section 162(m) of the Internal Revenue Code of 1986, as amended. Compensation Committee Report The compensation committee of the board of directors of our GP has reviewed and discussed the Compensation Discussion and Analysis set forth above with management. Based on this review and discussion, the compensation committee recommended to the board of directors of our GP that the Compensation Discussion and Analysis be included in this Annual Report. Members of the Compensation Committee: Stephen L. Cropper (Chairman) James M. Collingsworth Bryan K. Guderian Relation of Compensation Policies and Practices to Risk Management Our compensation arrangements contain a number of design elements that serve to minimize the incentive for taking excessive or inappropriate risk to achieve short-term, unsustainable results. This includes using restricted unit grants as a significant element of executive compensation, as the restricted units are designed to reward the executive officers based on the long-term performance of the Partnership. In combination with our risk management practices, we do not believe that risks arising from our compensation policies and practices for our employees are reasonably likely to have a material adverse effect on us. Compensation Committee Interlocks and Insider Participation During fiscal year 2023, James M. Collingsworth, Stephen L. Cropper, and Bryan K. Guderian served on the compensation committee. None of these individuals is an employee or an officer of our GP. 99 Summary Compensation Table The following table summarizes the compensation earned by our named executive officers for fiscal years 2021 through 2023. Name and Position Fiscal Year Salary ($) Bonus ($) Stock Awards (1) ($) All Other Compensation (2) ($) Total ($) H. Michael Krimbill 2023 649,038 — — 17,922 666,960 Chief Executive Officer 2022 625,000 — 537,500 15,719 1,178,219 2021 625,000 — — 17,632 642,632 Bradley P. Cooper (3) 2023 413,942 375,000 — 17,573 806,515 Executive Vice President and Chief Financial Officer Lawrence J. Thuillier 2023 324,000 225,000 — 16,325 565,325 Chief Accounting Officer 2022 300,692 150,000 118,250 15,353 584,295 2021 270,000 150,000 — 14,849 434,849 Kurston P. McMurray 2023 519,230 500,000 — 7,572 1,026,802 Executive Vice President and 2022 495,192 250,000 322,500 3,863 1,071,555 General Counsel and Secretary 2021 375,000 600,000 — 9,210 984,210 Linda J. Bridges (4) 2023 423,076 750,000 — 9,548 1,182,624 Executive Vice President and 2022 413,846 200,000 215,000 15,632 844,478 Chief Financial Officer John A. Ciolek (5) 2023 307,692 — — 8,030 315,722 Executive Vice President, 2022 500,000 250,000 322,500 12,374 1,084,874 Strategic Initiatives 2021 500,000 — — 15,390 515,390 (1) The fair values of the restricted units shown in the table above were calculated in accordance with FASB Accounting Standards Codification (“ASC”) Topic 718, Stock Compensation. For a discussion of the assumptions and methodologies used in calculating the grant date fair value of the restricted unit awards, see Note 9 to our consolidated financial statements included in this Annual Report. (2) The amounts in this column primarily represent matching contributions to our 401(k) plan. (3) Mr. Cooper became Executive Vice President and Chief Financial Officer effective January 13, 2023, and thus was not a named executive officer prior to fiscal year 2023. (4) Ms. Bridges became Executive Vice President and Chief Financial Officer effective September 30, 2021, and thus was not a named executive officer prior to fiscal year 2022. Ms. Bridges resigned as Executive Vice President and Chief Financial Officer effective January 13, 2023. (5) Mr. Ciolek resigned as Executive Vice President, Strategic Initiatives effective October 21, 2022. Employment Agreement with Mr. McMurray Mr. McMurray is party to an employment agreement with the Partnership, dated March 10, 2017. The agreement has a term of five years from the effective date, subject to automatic renewals for one-year periods thereafter unless either party provides 60 days’ notice of non-renewal of the term. The agreement was renewed by its terms as of March 10, 2022. The agreement provides that Mr. McMurray will receive a base salary of no less than $250,000 per year and will be eligible to receive an annual bonus with respect to each fiscal year of the Partnership at a target of 100% of his base salary. Mr. McMurray is also entitled to receive annual awards of unvested units under the Partnership’s LTIP. In the event that Mr. McMurray’s employment is terminated by the Partnership without “cause” (as defined in his agreement), provided that he executes a general release of claims, Mr. McMurray is entitled to receive (i) continued payment of his base salary for 12 months following the termination, (ii) the guaranteed unit awards that would have been paid or granted to Mr. McMurray had Mr. McMurray remained employed for an additional three years following his termination, and (iii) his target annual bonus for the performance year in which his termination occurs. Mr. McMurray would also be entitled to receive the severance benefits described in the foregoing sentence in the event that he voluntarily resigns due to a “constructive 100 discharge,” which circumstances would include (1) a reduction of Mr. McMurray’s annual base salary below $250,000 (other than an across-the-board, pro rata reduction of no more than 10% applicable to all similarly situated executive officers of the Partnership) or the Partnership’s failure to provide Mr. McMurray’s elements of compensation, (2) the removal of Mr. McMurray from the position of Executive Vice President and General Counsel and Secretary without Mr. McMurray’s written consent, (3) any action by the Partnership that results in significant diminution of Mr. McMurray’s authority, power or responsibilities, or (4) the Partnership’s relocation of its principal place of business in Oklahoma to a location more than 50 miles from its current location. Mr. McMurray is subject to non-disclosure and intellectual property rights assignment obligations, and an obligation not to solicit customers, employees or consultants lasting during his employment and for a period of 12 months thereafter. Restricted Unit Awards During fiscal year 2023, no Service Awards were granted to the named executive officers due to the expiration of the LTIP, as discussed above. All of the unvested Service Awards as of March 31, 2023 vest on November 15, 2023, subject to the continued service of the named executive officers through such vesting date. Outstanding Equity Awards at March 31, 2023 The following table summarizes the number of unvested Service Awards outstanding and their fair values at March 31, 2023: Number of Service Award Units that Have Not Yet Vested Market Value of Service Award Units that Have Not Yet Vested Name (#)(1) ($)(2) H. Michael Krimbill 62,500 181,250 Lawrence J. Thuillier 13,750 39,875 Kurston P. McMurray 37,500 108,750 Linda J. Bridges (3) — — John A. Ciolek (4) — — (1) Reflects Service Awards that have not vested and are held by each named executive officer. The outstanding Service Awards vest on November 15, 2023. (2) Calculated based on the closing market price of our common units at March 31, 2023 of $2.90. No adjustments were made to reflect the fact that the restricted units are not entitled to distributions during the vesting period. (3) Ms. Bridges resigned effective January 13, 2023 resulting in the forfeiture of her Service Awards. As a result, Ms. Bridges did not have any outstanding equity awards as of March 31, 2023. (4) Mr. Ciolek resigned effective October 21, 2022 resulting in the forfeiture of his Service Awards. As a result, Mr. Ciolek did not have any outstanding equity awards as of March 31, 2023. 2023 Units Vested During fiscal year 2023, certain of the Service Awards vested. The following table summarizes the value of the awards on the vesting date which was calculated based of the closing market price per common unit on the vesting dates. Name Number of Service Award Units Acquired on Vesting (#) Value Realized on Vesting ($) H. Michael Krimbill (1) 125,000 231,563 Lawrence J. Thuillier (2) 27,500 50,944 Kurston P. McMurray (3) 75,000 138,938 Linda J. Bridges (4) 25,000 32,750 John A. Ciolek (5) — — (1) Mr. Krimbill vested in 62,500 Service Awards on November 14, 2022 and 62,500 Service Awards on February 13, 2023. (2) Mr. Thuillier vested in 13,750 Service Awards on November 14, 2022 and 13,750 Service Awards on February 13, 2023. (3) Mr. McMurray vested in 37,500 Service Awards on November 14, 2022 and 37,500 Service Awards on February 13, 2023. (4) Ms. Bridges vested in 25,000 Service Awards on November 14, 2022. She forfeited all remaining outstanding Service Awards upon her resignation from employment on January 13, 2023. 101 (5) Mr. Ciolek forfeited all outstanding Service Awards upon his resignation from employment on October 21, 2022. Upon vesting, certain of the named executive officers elected for us to remit payments to taxing authorities in lieu of issuing common units. The following table summarizes the number of common units issued and the number of common units withheld for taxes: Name Number of Units Issued Number of Units Withheld Total H. Michael Krimbill 125,000 — 125,000 Lawrence J. Thuillier 15,743 11,757 27,500 Kurston P. McMurray 41,581 33,419 75,000 Linda J. Bridges 14,474 10,526 25,000 Potential Payments Upon Termination or Change in Control We do not provide any severance or change in control benefits to our named executive officers , other than Mr. McMurray, who is entitled to receive severance benefits for certain types of terminations (as described in more detail above under the heading, “Employment Agreement with Mr. McMurray”). In the event that Mr. McMurray’s employment had been terminated as of March 31, 2023 by the Partnership without “cause” or due to a “constructive discharge,” Mr. McMurray would have been entitled to receive the following amounts: Cash Severance Value of Guaranteed Unit Awards Target Annual Bonus Total $ 500,000 $ 108,750 $ 500,000 $ 1,108,750 The board of directors of our GP has the option to accelerate the vesting of the Service Awards in the event of a change in control of the Partnership, although it is not under any obligation to do so. If the board of directors of our GP were to exercise its discretion to accelerate the vesting of Service Awards upon a change in control, that hypothetically occurred on March 31, 2023, the value of such units would be the same as reported in the “Outstanding Equity Awards at March 31, 2023” table above (in the “Market Value of Service Award Units that Have Not Yet Vested” column). Pay Ratio Disclosure As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information regarding the ratio of the annual total compensation of our Chief Executive Officer, Mr. Krimbill, to the median of the annual total compensation of our employees for our last fiscal year. For the year ended March 31, 2023: • The median of the annual total compensation of all employees (other than the Chief Executive Officer) was $69,503; and • The annual total compensation of Mr. Krimbill, as reported in the Summary Compensation Table above, was $666,960. Based on the information for the year ended March 31, 2023, the ratio of the annual total compensation of our Chief Executive Officer to the annual total compensation of our median employee was approximately 10 to 1. To determine our median employee, we identified each individual employed by us on January 1, 2023, our determination date. As of that date, we had 716 employees located in two countries. We identified the median employee by examining only base pay plus overtime for the period from January 1, 2022 through December 31, 2022. We included all employees, with the exception of four employees that work in Canada, whether employed on a full-time or part-time basis, and did not make any estimates, assumptions or adjustments to any base pay plus overtime amounts. After identifying the median employee, we calculated the annual total compensation for the median employee using the same methodology we use to calculate total annual compensation for our named executive officers, as set forth in the Summary Compensation Table above. This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above. The SEC rules for identifying the median employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay 102 ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. Hedging of Partnership Common Units Our supplemental trading policy prohibits directors, named executive offices and other designated employees from engaging in the following transactions: (i) trade in puts or calls or engage in short sales with respect to our common units, or (ii) engage in certain hedging transactions, such as zero-cost collars, equity swaps, prepaid variable forward contracts and exchange funds, that are designed to hedge or offset a decrease in the market value of their holdings. Our supplemental trading policy also specifies that officers, certain employees and directors may not pledge our common units as collateral for any loan without prior notice and these individuals may not hold our common units in a margin account unless our common units are not taken into account in determining their margin requirements and they have given prior notice to their broker of their affiliation and status with the Partnership and any restrictions applicable to our common units with respect to their sale. Director Compensation Officers or employees of our GP or its affiliates who also serve as directors do not receive additional compensation for their service as a director of our GP. Each director who is not an officer or employee of our GP or its affiliates receives the following cash compensation for his board service: • an annual retainer of $80,000; • an annual retainer of $20,000 for the chairman of the audit committee; • an annual retainer of $15,000 for the chairman of the compensation committee; • an annual retainer of $14,000 for each member of the audit committee other than the chairman; and • an annual retainer of $10,000 for each member of the compensation committee other than the chairman. In addition, each director who is not an officer or employee of our GP or its affiliates has been granted awards of restricted units. All of our directors are also reimbursed for all out-of-pocket expenses incurred in connection with attending board or committee meetings. Each director is indemnified for his actions associated with being a director to the fullest extent permitted under Delaware law. Due to the expiration of the LTIP, as discussed above, no restricted units were granted to the directors who are not officers or employees of our GP or its affiliates during fiscal year 2023. The following table summarizes the compensation earned during fiscal year 2023 by each director who is not an officer or employee of our GP or its affiliates: Name Fees Earned or Paid in Cash ($) Total ($) Shawn W. Coady 80,000 80,000 James M. Collingsworth 104,000 104,000 Stephen L. Cropper 109,000 109,000 Bryan K. Guderian 104,000 104,000 Derek S. Reiners 100,000 100,000 On May 24, 2023, the board of directors of our GP approved the following changes to the compensation for each director who is not an officer or employees of our GP or its affiliates: • an annual retainer of $180,000; • an annual retainer of $25,000 for the chairman of the audit committee; • an annual retainer of $15,000 for the chairman of the compensation committee; • an annual retainer of $15,000 for each member of the audit committee other than the chairman; and • an annual retainer of $10,000 for each member of the compensation committee other than the chairman. 103 Long-Term Equity Incentive Awards The following table summarizes Service Awards activity during fiscal year 2023 with respect to each director who is not an officer or employee of our GP or its affiliates: Unvested Units at Unvested Units at Name March 31, 2022 Units Vested (1) March 31, 2023 (2) Shawn W. Coady 37,500 (25,000) 12,500 James M. Collingsworth 37,500 (25,000) 12,500 Stephen L. Cropper 37,500 (25,000) 12,500 Bryan K. Guderian 37,500 (25,000) 12,500 Derek S. Reiners 37,500 (25,000) 12,500 (1) 12,500 Service Awards vested on November 14, 2022 and 12,500 Service Awards vested on February 13, 2023. (2) 12,500 Service Awards will vest on November 15, 2023, subject to the continued service of the recipients through such vesting date. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters Security Ownership of Certain Beneficial Owners and Management The following table summarizes the beneficial ownership, as of May 26, 2023, of our common units by: • each person or group of persons known by us to be a beneficial owner of more than 5% of our outstanding common units; • each director of our GP; • each named executive officer of our GP; and • all directors and executive officers of our GP as a group. Beneficial Owners Common Units Beneficially Owned Percentage of Common Units Beneficially Owned (1) 5% or greater unitholders (other than officers and directors): Invesco Ltd. (2) 19,717,009 14.95 % EIG Neptune Equity Aggregator, L.P. (3) 16,734,375 11.26 % Directors and named executive officers: Linda J. Bridges (4) 76,639 * John A Ciolek (5) 307,264 * Shawn W. Coady (6) 2,639,695 2.00 % James M. Collingsworth (7) 527,370 * Bradley P. Cooper 200,000 * Stephen L. Cropper (8) 112,500 * Bryan K. Guderian 110,000 * H. Michael Krimbill (9) 4,862,518 3.69 % Kurston P. McMurray (10) 125,812 * John T. Raymond 50,000 * Derek S. Reiners 113,500 * Lawrence J. Thuillier (11) 76,062 * Randall S. Wade — * All directors and executive officers as a group (11 persons) (12) 8,817,457 6.68 % * Less than 1.0% 104 (1) Based on 131,927,343 common units outstanding at May 26, 2023. (2) The mailing address for Invesco Ltd. is 1555 Peachtree Street NE, Suite 1800, Atlanta, GA 30309. Invesco Ltd. reported sole voting and dispositive power with respect to all common units beneficially owned. The information related to Invesco Ltd. is based upon its Schedule 13G/A filed with the SEC on February 10, 2022. (3) The mailing address for EIG Neptune Equity Aggregator, L.P. (“EIG Neptune”) is 600 New Hampshire Ave NW, Suite 1200, Washington, DC 20037. EIG Neptune reported sole voting and dispositive power with respect to all common units beneficially owned. The information related to EIG Neptune is based upon its Schedule 13D/A filed with the SEC on September 4, 2020. The common units beneficially owned relate to warrants that were exercisable on July 2, 2020. For purposes of calculating ownership percentages, the units underlying the warrants are only deemed outstanding for purposes of calculating EIG Neptune’s percentage. (4) Information contained in the table above is based on the Form 4 filed with the SEC on November 16, 2022. Ms. Bridges resigned as our Executive Vice President and Chief Financial Officer effective January 13, 2023. Open market purchases or sales, if any, by Ms. Bridges of our common units since the date she ceased serving as our Executive Vice President and Chief Financial Officer are not known by us or reported in this table. (5) Information contained in the table above is based on the Form 4 filed with the SEC on February 11, 2022. Mr. Ciolek resigned as our Executive Vice President, Strategic Initiatives effective October 21, 2022. Open market purchases or sales, if any, by Mr. Ciolek of our common units since the date he ceased serving as our Executive Vice President, Strategic Initiatives are not known by us or reported in this table. (6) Dr. Coady owns 159,804 of these common units. SWC Family Partnership LP owns 2,320,391 of these common units. SWC Family Partnership LP is solely owned by SWC General Partner, LLC, of which Dr. Coady is the sole member. Dr. Coady may be deemed to have sole voting and investment power over these units, but disclaims such beneficial ownership except to the extent of his pecuniary interest therein. The 2012 Shawn W. Coady Irrevocable Insurance Trust, which was established for the benefit of Shawn W. Coady’s children, owns 135,000 of these common units. Dr. Coady may be deemed to have sole voting and investment power over these units, but disclaims such beneficial ownership except to the extent of his pecuniary interest therein. The Tara Nicole Coady Trust II, of which the reporting person is the trustee, owns 12,250 of these common units. The Colleen Blair Coady Trust, of which the reporting person is the trustee, owns 12,250 of these common units. Dr. Coady also owns a 12.27% interest in our GP through Coady Enterprises, LLC, of which he owns 100% of the membership interests. (7) Mr. Collingsworth owns 515,000 of these common units. Mr. Collingsworth holds 2,000 of these common units jointly with his spouse, Cindy Collingsworth. Cindy Collingsworth and her sister jointly own 9,500 of these common units. Cindy Collingsworth owns 870 of these common units. (8) Mr. Cropper owns 87,500 of these common units. The Donna L. Cropper Revocable Living Trust, of which Mr. Cropper and his spouse, Donna L. Cropper, are the trustees, owns 25,000 of these common units. (9) Mr. Krimbill owns 2,876,115 of these common units, which does not include 62,500 unvested units which will vest on November 15, 2023, subject to the continued service through such vesting date. All of the unvested units noted above were reported on Mr. Krimbill’s Form 4. Krim2010, LLC owns 904,848 of these common units. Krimbill Enterprises LP, H. Michael Krimbill and James E. Krimbill own 90.89%, 4.05%, and 5.06% of Krim2010, LLC, respectively. Krimbill Enterprises LP also owns 588,000 of these common units. Krimbill Enterprises LP is controlled by H. Michael Krimbill via his ownership of its general partner, Krimbill Holding Company. H. Michael Krimbill may be deemed to have sole voting and investment power over these units, but disclaims such beneficial ownership except to the extent of his pecuniary interest therein. KrimGP2010 LLC owns 363,555 of these common units. KrimGP2010 LLC is solely owned by H. Michael Krimbill. H. Michael Krimbill may be deemed to have sole voting and investment power over these units, but disclaims such beneficial ownership except to the extent of his pecuniary interest therein. Krimbill Enterprises LP, II also owns 130,000 of these common units. Krimbill Enterprises LP, II is controlled by H. Michael Krimbill via his ownership of its general partner, Krimbill Holding Company. H. Michael Krimbill may be deemed to have sole voting and investment power over these units, but disclaims such beneficial ownership except to the extent of his pecuniary interest therein. H. Michael Krimbill also owns a 15.10% interest in our GP through KrimGP2010, LLC, of which he owns 100% of the membership interests. (10) Does not include 37,500 unvested units which will vest on November 15, 2023, subject to the continued service through such vesting date. Mr. McMurray owns a 0.25% interest in our GP through MCM Investments, LLC, of which he owns 100% of the membership interests. (11) Does not include 13,750 unvested units which will vest on November 15, 2023, subject to the continued service through such vesting date. (12) The directors and executive officers of our GP, as of May 26, 2023, also collectively own a 29.73% interest in our GP. Unless otherwise noted, each of the individuals listed above is believed to have sole voting and investment power with respect to the units beneficially held by them. The mailing address for each of the officers and directors of our GP listed above is 6120 South Yale Avenue, Suite 805, Tulsa, Oklahoma 74136. 105 Securities Authorized for Issuance Under Equity Compensation Plan The following table summarizes information regarding the securities that may be issued under the LTIP at March 31, 2023. Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuances Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) Plan Category (a) (b) (c) Equity Compensation Plans Approved by Security Holders — — — Equity Compensation Plans Not Approved by Security Holders (1) 627,975 — — Total 627,975 — — (1) Our GP adopted the LTIP in connection with the completion of our initial public offering (“IPO”) in May 2011, which did not require the approval of our unitholders. Prior to the expiration of the LTIP on May 10, 2021, we granted approximately 3.3 million common units as Service Awards, and the remaining Service Awards under this grant will vest in our 2024 fiscal year. Due to the LTIP expiring, we have no common units available for grant and any current unvested Service Awards that are forfeited or canceled will not be available for future grants. Item 13. Certain Relationships and Related Transactions, and Director Independence Our directors, executive officers, and greater than 5% unitholders collectively own an aggregate of 45,268,841 common units, representing an aggregate 34.31% limited partner interest in us. In addition, our GP owns a 0.1% GP interest in us and all of our incentive distribution rights (“IDRs”). As of March 31, 2023, we owned 8.69% of our GP. Distributions and Payments to Our General Partner and Its Affiliates Our GP and its affiliates do not receive any management fee or other compensation for the management of our business and affairs, but they are reimbursed for all expenses that they incur on our behalf, including general and administrative expenses. Our GP determines the amount of these expenses. In addition, our GP owns the 0.1% GP interest and all of the IDRs. Our GP is entitled to receive incentive distributions if the amount we distribute with respect to any quarter exceeds levels specified in our Partnership Agreement. The following table summarizes the distributions and payments to be made by us to our directors, executive officers, and greater than 5% unitholders and our GP in connection with our ongoing operation and any liquidation. These distributions and payments were determined by and among affiliated entities before our IPO and, consequently, are not the result of arm’s length negotiations. 106 Operation Stage Distributions of available cash to our directors, executive officers, and greater than 5% unitholders and our GP We generally make cash distributions 99.9% to our unitholders pro rata, including our directors, executive officers, and greater than 5% unitholders as the holders of an aggregate 45,268,841 common units, and 0.1% to our GP. In addition, when distributions exceed the minimum quarterly distribution and other higher target distributions levels, our GP is entitled to increasing percentages of the distributions, up to 48.1% of the distributions above the highest target distribution level. If our GP elects to reset the target distribution levels, it will be entitled to receive common units and to maintain its GP interest. As described in Note 7 to our consolidated financial statements included in this Annual Report, the indenture to the 2026 Senior Secured Notes restricts us from paying distributions until our total leverage ratio (as defined in the indenture) for the most recently ended four full fiscal quarters at the time of the distribution is not greater than 4.75 to 1.00. In addition, quarterly distributions on the preferred units must be fully paid for all preceding fiscal quarters before we are permitted to declare or pay any distributions on our common units. Payments to our GP and its affiliates Our GP and its affiliates do not receive any management fee or other compensation for the management of our business and affairs, but they are reimbursed for all expenses that they incur on our behalf, including general and administrative expenses. As the sole purpose of the GP is to act as our GP, substantially all of the expenses of our GP are incurred on our behalf and reimbursed by us or our subsidiaries. Our GP determines the amount of these expenses. Withdrawal or removal of our GP If our GP withdraws or is removed, its GP interest and its IDRs will either be sold to the new general partner for cash or converted into common units, in each case for an amount equal to the fair market value of those interests. Liquidation Stage Liquidation Upon our liquidation, our partners, including our GP, will be entitled to receive liquidating distributions according to their respective capital account balances. Transactions with Related Persons We purchase goods and services from certain entities that are partially owned by our named executive officers. The following table summarizes these transactions from April 1, 2022 to March 31, 2023: Entity Nature of Purchases Amount Purchased Ownership Interest in Entity (in thousands) H. Michael Krimbill KAIR2014 LLC (“KAIR2014”) Aircraft $ 1,435 50 % In connection with the purchase of our 50% interest in an aircraft company, KAIR2014, we executed a joint and several guarantee for the benefit of the lender for KAIR2014’s outstanding loan. The other owner of KAIR2014, our Chief Executive Officer, H. Michael Krimbill, is a party to a similar guarantee. This guarantee obligates us for the payment and performance of KAIR2014 with respect to the repayment of the loan. As of March 31, 2023, the outstanding balance of the loan is approximately $2.3 million. Payments are made monthly, reducing the outstanding balance, and the loan matures in September 2023. As the guarantee is joint and several, we could be liable for the entire outstanding balance of the loan. The loan is collateralized by the airplane owned by KAIR2014 and in the event of a default, the lender could seek payment in full from us. As of March 31, 2023, no accrual has been recorded related to this guarantee. 107 Travis Krimbill, an employee of the Partnership, is the son of H. Michael Krimbill, who is a named executive officer of the Partnership and a member of the board of directors of our GP. Travis Krimbill does not report to H. Michael Krimbill and his compensation is determined by the Chief Financial Officer. During the year ended March 31, 2023, Travis Krimbill received total compensation of approximately $0.2 million. Registration Rights Agreement We have entered into a registration rights agreement (as amended, the “Registration Rights Agreement”) with certain third parties (the “Registration Rights Parties”) pursuant to which we agreed to register for resale under the Securities Act of 1933, as amended (“Securities Act”) common units owned by the Registration Rights Parties. In connection with our IPO, we granted registration rights to the NGL Energy GP Investor Group, and subsequently, we have granted registration rights in connection with several acquisitions. We will not be required to register such common units if an exemption from the registration requirements of the Securities Act is available with respect to the number of common units desired to be sold. Subject to limitations specified in the Registration Rights Agreement, the registration rights of the Registration Rights Parties include the following: • Demand Registration Rights. Certain registration rights parties deemed “Significant Holders” under the agreement may, to the extent that they continue to own more than 4% of our common units, require us to file a registration statement with the SEC registering the offer and sale of a specified number of common units, subject to limitations on the number of requests for registration that can be made in any twelve-month period as well as customary cutbacks at the discretion of the underwriters relating to a potential offering. All other Registration Rights Parties are entitled to notice of a Significant Holder’s exercise of its demand registration rights and may include their common units in such registration. We can only be required to file a total of nine registration statements upon the Significant Holders’ exercise of these demand registration rights and are only required to effect demand registration if the aggregate proposed offering price to the public is at least $10.0 million. • Piggyback Registration Rights. If we propose to file a registration statement under the Securities Act to register our common units, the Registration Rights Parties are entitled to notice of such registration and have the right to include their common units in the registration, subject to limitations that the underwriters relating to a potential offering may impose on the number of common units included in the registration. These counterparties also have the right to include their units in our future registrations, including secondary offerings of our common units. • Expenses of Registration. With specified exceptions, we are required to pay all expenses incidental to any registration of common units, excluding underwriting discounts and commissions. Review, Approval or Ratification of Transactions with Related Parties The board of directors of our GP has adopted a Code of Business Conduct and Ethics that, among other things, sets forth our policies for the review, approval and ratification of transactions with related persons. The Code of Business Conduct and Ethics provides that the board of directors of our GP or its authorized committee will periodically review all related person transactions that are required to be disclosed under SEC rules and, when appropriate, initially authorize or ratify all such transactions. In the event that the board of directors of our GP or its authorized committee considers ratification of a related person transaction and determines not to so ratify, the Code of Business Conduct and Ethics provides that our officers will make all reasonable efforts to cancel or annul the transaction. The Code of Business Conduct and Ethics provides that, in determining whether or not to recommend the initial approval or ratification of a related person transaction, the board of directors of our GP or its authorized committee should consider all of the relevant facts and circumstances available, including (if applicable) but not limited to: • whether there is an appropriate business justification for the transaction; • the benefits that accrue to the Partnership as a result of the transaction; • the terms available to unrelated third parties entering into similar transactions; • the impact of the transaction on a director’s independence (in the event the related party is a director, an immediate family member of a director or an entity in which a director is a partner, shareholder or executive officer); • the availability of other sources for comparable products or services; • whether it is a single transaction or a series of ongoing, related transactions; and 108 • whether entering into the transaction would be consistent with the Code of Business Conduct and Ethics. Director Independence The NYSE does not require a listed publicly traded limited partnership like NGL to have a majority of independent directors on the board of directors of its general partner. For a discussion of the independence of the board of directors of our GP, see Part III, Item 10–“Directors, Executive Officers and Corporate Governance–Board of Directors of our General Partner.” Item 14. Principal Accountant Fees and Services We have engaged Grant Thornton LLP as our independent registered public accounting firm. The following table summarizes fees we have paid Grant Thornton LLP for the periods indicated: March 31, 2023 2022 (in thousands) Audit fees (1) $ 1,769 $ 1,882 Audit-related fees — — Tax fees — — All other fees — — Total $ 1,769 $ 1,882 (1) Includes fees for audits of the Partnership’s financial statements, reviews of the related quarterly financial statements, and services that are normally provided by the independent accountants in connection with statutory and regulatory filings or engagements, including reviews of documents filed with the SEC. In fiscal years 2023 and 2022, all of Grant Thornton LLP’s services were pre-approved by the Audit Committee. 109 PART IV Item 15. Exhibit and Financial Statement Schedules (a) The following documents are filed as part of this Annual Report: 1. Financial Statements . See the accompanying Index to Financial Statements. 2. Financial Statement Schedules . All schedules have been omitted because they are either not applicable, not required or the information required in such schedules appears in the financial statements or the related notes. 3. Exhibits. Exhibit Number Description 2.1 Membership Interest Purchase Agreement, dated as of May 30, 2018, by and among NGL Energy Operating, LLC, NGL Energy Partners LP, and Superior Plus Energy Services Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on July 10, 2018) 2.2 Asset Purchase and Sale Agreement, dated May 13, 2019, by and among NGL Energy Partners LP, Mesquite Disposals Unlimited, LLC and Mesquite SWD, Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on July 8, 2019) 2.3 Membership Interest Purchase Agreement, dated as of August 7, 2019, between NGL Energy Operating, LLC and Trajectory Acquisition Company LLC (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on October 4, 2019) 2.4 Equity Purchase Agreement, dated September 25, 2019, by and among NGL Energy Partners LP, NGL Water Solutions Permian, LLC, Water Remainco, LLC, Hillstone Environmental Partners, LLC, GGCOF HEP Blocker II, LLC, GGCOF HEP Blocker, LLC, Golden Gate Capital Opportunity Fund-A, L.P., GGCOF AIV L.P. and GGCOF HEP Blocker II Holdings, LLC (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on November 1, 2019) 2.5 Membership Interest Purchase Agreement, dated as of March 3, 2023 (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on April 3, 2023) . 2.6 Membership Interest Purchase Agreement, dated as of March 3, 2023 (incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on April 3, 2023) . 3.1 Certificate of Limited Partnership of NGL Energy Partners LP (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 (File No. 333-172186) filed with the SEC on April 15, 2011) 3.2 Certificate of Amendment to Certificate of Limited Partnership of NGL Energy Partners LP (incorporated by reference to Exhibit 3.2 to the Registration Statement on Form S-1 (File No. 333-172186) filed with the SEC on April 15, 2011) 3.3 Certificate of Formation of NGL Energy Holdings LLC (incorporated by reference to Exhibit 3.4 to the Registration Statement on Form S-1 (File No. 333-172186) filed with the SEC on April 15, 2011) 3.4 Certificate of Amendment to Certificate of Formation of NGL Energy Holdings LLC (incorporated by reference to Exhibit 3.5 to the Registration Statement on Form S-1 (File No. 333-172186) filed with the SEC on April 15, 2011) 3.5 Third Amended and Restated Limited Liability Company Agreement of NGL Energy Holdings LLC (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on February 28, 2013) 3.6 Amendment No. 1 to Third Amended and Restated Limited Liability Company Agreement of NGL Energy Holdings LLC, dated as of August 6, 2013 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on August 7, 2013) 3.7 Amendment No. 2 to Third Amended and Restated Limited Liability Company Agreement of NGL Energy Holdings LLC, dated as of June 27, 2014 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on July 3, 2014) 3.8 Amendment No. 3 to Third Amended and Restated Limited Liability Company Agreement of NGL Energy Holdings LLC, dated as of June 24, 2016 (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on June 28, 2016) 3.9 Amendment No. 4 to Third Amended and Restated Limited Liability Company Agreement of NGL Energy Holdings LLC, dated as of August 20, 2019 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on August 21, 2019) 3.10 Fourth Amended and Restated Agreement of Limited Partnership of NGL Energy Partners LP, dated as of June 13, 2017 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on June 13, 2017) 3.11 Fifth Amended and Restated Agreement of Limited Partnership of NGL Energy Partners LP, dated as of April 2, 2019 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on April 2, 2019) 3.12 Sixth Amended and Restated Agreement of Limited Partnership of NGL Energy Partners LP, dated as of July 2, 2019 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on July 8, 2019) 3.13 Seventh Amended and Restated Agreement of Limited Partnership of NGL Energy Partners LP, dated as of October 31, 2019 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on November 1, 2019) 110 Exhibit Number Description 3.14 First Amendment to Seventh Amended and Restated Agreement of Limited Partnership of NGL Energy Partners LP, dated as of February 4, 2021 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on February 8, 2021) 4.1 First Amended and Restated Registration Rights Agreement, dated October 3, 2011, by and among the Partnership, Hicks Oils & Hicksgas, Incorporated, NGL Holdings, Inc., Krim2010, LLC, Infrastructure Capital Management, LLC, Atkinson Investors, LLC, E. Osterman Propane, Inc. and the other holders party thereto (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on October 7, 2011) 4.2 Amendment No. 1 and Joinder to First Amended and Restated Registration Rights Agreement dated as of November 1, 2011 by and among the Partnership and SemStream (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on November 4, 2011) 4.3 Amendment No. 2 and Joinder to First Amended and Restated Registration Rights Agreement, dated January 3, 2012, by and among NGL Energy Holdings LLC, Liberty Propane, L.L.C., Pacer-Enviro Propane, L.L.C., Pacer-Pittman Propane, L.L.C., Pacer-Portland Propane, L.L.C., Pacer Propane (Washington), L.L.C., Pacer-Salida Propane, L.L.C. and Pacer-Utah Propane, L.L.C. (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on January 9, 2012) 4.4 Amendment No. 3 and Joinder to First Amended and Restated Registration Rights Agreement, dated May 1, 2012, by and between NGL Energy Holdings LLC and Downeast Energy Corp. (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on May 4, 2012) 4.5 Amendment No. 4 and Joinder to First Amended and Restated Registration Rights Agreement, dated June 19, 2012, by and between NGL Energy Holdings LLC and NGP M&R HS LP LLC (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on June 25, 2012) 4.6 Amendment No. 5 and Joinder to First Amended and Restated Registration Rights Agreement, dated October 1, 2012, by and between NGL Energy Holdings LLC and Enstone, LLC (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on October 3, 2012) 4.7 Amendment No. 6 and Joinder to First Amended and Restated Registration Rights Agreement, dated November 13, 2012, by and between NGL Energy Holdings LLC and Gerald L. Jensen, Thrift Opportunity Holdings, LP, Jenco Petroleum Corporation, Caritas Trust, Animosus Trust and Nitor Trust (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on November 19, 2012) 4.8 Amendment No. 7 and Joinder to First Amended and Restated Registration Rights Agreement, dated as of August 1, 2013, by and among NGL Energy Holdings LLC, Oilfield Water Lines, LP and Terry G. Bailey (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on August 7, 2013) 4.9 Amendment No. 8 and Joinder to First Amended and Restated Registration Rights Agreement, dated as of February 17, 2015, by and among NGL Energy Holdings LLC and Magnum NGL Holdco LLC (incorporated by reference to Exhibit 4.9 to the Annual Report on Form 10-K (File No. 001-35172) for the year ended March 31, 2015 filed with the SEC on June 1, 2015) 4.10 Amendment No. 9 and Joinder to First Amended and Restated Registration Rights Agreement, dated as of February 25, 2016, by and among NGL Energy Holdings LLC and Magnum NGL Holdco LLC (incorporated by reference to Exhibit 4.10 to the Annual Report on Form 10-K (File No. 001-35172) for the year ended March 31, 2016 filed with the SEC on May 31, 2016) 4.11 Registration Rights Agreement, dated December 2, 2013, by and among NGL Energy Partners LP and the purchasers set forth on Schedule A thereto (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on December 5, 2013) 4.12 Indenture, dated as of February 22, 2017, by and among NGL Energy Partners LP, NGL Energy Finance Corp., the guarantors party thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on February 22, 2017) 4.13 Forms of 6.125% Senior Notes due 2025 (incorporated by reference to Exhibit 4.2 and included as Exhibits A1 and A2 to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on February 22, 2017) 4.14 Registration Rights Agreement, dated as of February 22, 2017, by and among NGL Energy Partners LP, NGL Energy Finance Corp., the guarantors listed therein on Exhibit A and RBC Capital Markets, LLC and Deutsche Bank Securities Inc., as representatives of the several initial purchasers (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on February 22, 2017) 4.15 First Supplemental Indenture, dated as of July 18, 2018, among NGL Energy Partners LP, NGL Energy Finance Corp., the Guaranteeing Subsidiaries party thereto, the Guarantors party thereto and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.11 to the Quarterly Report on Form 10-Q (File No. 001-35172) for the quarter ended December 31, 2018 filed with the SEC on February 11, 2019) 4.16 Second Supplemental Indenture, dated as of January 25, 2019, among NGL Energy Partners LP, NGL Energy Finance Corp., the Guaranteeing Subsidiaries party thereto, the Guarantors party thereto and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.12 to the Quarterly Report on Form 10-Q (File No. 001-35172) for the quarter ended December 31, 2018 filed with the SEC on February 11, 2019) 4.17 Third Supplemental Indenture, dated as of October 31, 2019, among NGL Energy Partners LP, NGL Energy Finance Corp., the Guaranteeing Subsidiaries party thereto, the Guarantors party thereto and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.4 to the Quarterly Report on Form 10-Q (File No. 001-35172) for the quarter ended September 30, 2019 filed with the SEC on November 8, 2019) 4.18 Fourth Supplemental Indenture, dated as of December 27, 2019, among NGL Energy Partners LP, NGL Energy Finance Corp., the Guaranteeing Subsidiaries party thereto, the Guarantors party thereto and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.6 to the Quarterly Report on Form 10-Q (File No. 001-35172) for the quarter ended December 31, 2019 filed with the SEC on February 6, 2020) 111 Exhibit Number Description 4.19 Fifth Supplemental Indenture, dated as of June 30, 2020, among NGL Energy Partners LP, NGL Energy Finance Corp., the Guaranteeing Subsidiaries party thereto, the Guarantors party thereto and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.2 to the Quarterly Report on Form 10-Q (File No. 001-35172) for the quarter ended June 30, 2020 filed with the SEC on August 10, 2020) 4.20 Sixth Supplemental Indenture, dated as of February 18, 2021, among NGL Energy Partners LP, NGL Energy Finance Corp., the Guaranteeing Subsidiaries party thereto, the Guarantors party thereto and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.30 to the Annual Report on Form 10-K (File No. 001-35172) for the year ended March 31, 2021 filed with the SEC on June 3, 2021) 4.21 Seventh Supplemental Indenture, dated as of March 25, 2022, among NGL Energy Partners LP, NGL Energy Finance Corp., the Guaranteeing Subsidiaries party thereto, the Guarantors party thereto and U.S. Bank Trust Company, National Association, as Trustee (incorporated by reference to Exhibit 4.32 to the Annual Report on Form 10-K (File No. 001-35172) for the year ended March 31, 2022 filed with the SEC on June 6, 2022) 4.22 Indenture, dated as of April 9, 2019, by and among NGL Energy Partners LP, NGL Energy Finance Corp., the guarantors party thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on April 9, 2019) 4.23 Forms of 7.5% Senior Notes due 2026 (incorporated by reference to Exhibit 4.2 and included as Exhibits A1 and A2 to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on April 9, 2019) 4.24 Registration Rights Agreement, dated as of April 9, 2019, by and among NGL Energy Partners LP, NGL Energy Finance Corp., the guarantors listed therein on Exhibit A and RBC Capital Markets, LLC and Mizuho Securities USA LLC, as representatives of the several initial purchasers (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on April 9, 2019) 4.25 First Supplemental Indenture, dated as of October 31, 2019, among NGL Energy Partners LP, NGL Energy Finance Corp., the Guaranteeing Subsidiaries party thereto, the Guarantors party thereto and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.5 to the Quarterly Report on Form 10-Q (File No. 001-35172) for the quarter ended September 30, 2019 filed with the SEC on November 8, 2019) 4.26 Second Supplemental Indenture, dated as of December 27, 2019, among NGL Energy Partners LP, NGL Energy Finance Corp., the Guaranteeing Subsidiaries party thereto, the Guarantors party thereto and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.7 to the Quarterly Report on Form 10-Q (File No. 001-35172) for the quarter ended December 31, 2019 filed with the SEC on February 6, 2020) 4.27 Third Supplemental Indenture, dated as of June 30, 2020, among NGL Energy Partners LP, NGL Energy Finance Corp., the Guaranteeing Subsidiaries party thereto, the Guarantors party thereto and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.3 to the Quarterly Report on Form 10-Q (File No. 001-35172) for the quarter ended June 30, 2020 filed with the SEC on August 10, 2020) 4.28 Fourth Supplemental Indenture, dated as of February 18, 2021, among NGL Energy Partners LP, NGL Energy Finance Corp., the Guaranteeing Subsidiaries party thereto, the Guarantors party thereto and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.37 to the Annual Report on Form 10-K (File No. 001-35172) for the year ended March 31, 2021 filed with the SEC on June 3, 2021) 4.29 Fifth Supplemental Indenture, dated as of March 25, 2022, among NGL Energy Partners LP, NGL Energy Finance Corp., the Guaranteeing Subsidiaries party thereto, the Guarantors party thereto and U.S. Bank Trust Company, National Association, as Trustee (incorporated by reference to Exhibit 4.40 to the Annual Report on Form 10-K (File No. 001-35172) for the year ended March 31, 2022 filed with the SEC on June 6, 2022) 4.30 Indenture, dated as of February 4, 2021, by and among NGL Energy Operating LLC, NGL Energy Finance Corp., the guarantors party thereto and U.S. Bank National Association, as trustee and notes collateral agent (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on February 8, 2021) 4.31 Form of 7.500% Senior Secured Notes due 2026 (incorporated by reference to Exhibit 4.1 and included as Exhibit A to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on February 8, 2021) 4.32 First Supplemental Indenture, dated as of March 28, 2022, among NGL Shared Services, LLC, NGL Shared Services Holdings, Inc., NGL Energy Operating LLC, NGL Energy Finance Corp., the other Guarantors and U.S. Bank Trust Company, National Association, as Trustee (incorporated by reference to Exhibit 4.43 to the Annual Report on Form 10-K (File No. 001-35172) for the year ended March 31, 2022 filed with the SEC on June 6, 2022) 4.33 Amended and Restated Guaranty Agreement, dated as of March 31, 2017 and effective as of December 31, 2016, among NGL Energy Partners LP and the purchasers named therein (incorporated by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q (File No. 001-35172) for the quarter ended June 30, 2017 filed with the SEC on August 4, 2017) 4.34 Registration Rights Agreement, dated July 2, 2019, by and among NGL Energy Partners LP, EIG Neptune Aggregator, L.P. and FS Energy and Power Fund (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on July 8, 2019) 4.35 Amended and Restated Registration Rights Agreement, dated October 31, 2019, by and among NGL Energy Partners LP, EIG Neptune Equity Aggregator, L.P., FS Energy and Power Fund and GCM Pellit Holdings, LLC (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on November 1, 2019) 4.36* Description of NGL Energy Partners LP’s securities 10.1 Credit Agreement, dated as of February 4, 2021, by and among NGL Energy Operating LLC, NGL Energy Partners LP, JPMorgan Chase Bank, N.A. and certain other financial institutions (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on February 8, 2021) 10.2 First Amendment to Credit Agreement (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q (File No. 001-35172) for the quarter ended September 30, 2021 filed with the SEC on November 9, 2021) 10.3 Second Amendment to Credit Agreement (incorporated by reference to Exhibit 10.3 to the Annual Report on Form 10-K (File No. 001-35172) for the year ended March 31, 2022 filed with the SEC on June 6, 2022) 112 Exhibit Number Description 10.4 Third Amendment to Credit Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on February 16, 2023) 10.5 Credit Party Accession Agreement, dated as of March 28, 2022, among NGL Shared Services, LLC, NGL Shared Services Holdings, Inc., and JPMorgan Chase Bank, N.A., as Administrative Agent and as Collateral Agent (incorporated by reference to Exhibit 10.4 to the Annual Report on Form 10-K (File No. 001-35172) for the year ended March 31, 2022 filed with the SEC on June 6, 2022) 10.6 Common Unit Purchase Agreement, dated November 5, 2013, by and among NGL Energy Partners LP and the purchasers listed on Schedule A thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on December 5, 2013) 10.7+ NGL Energy Partners LP 2011 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on May 17, 2011) 10.8+ Form of Restricted Unit Award Agreement under the NGL Energy Partners LP 2011 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q (File No. 001-35172) for the quarter ended June 30, 2012 filed with the SEC on August 14, 2012 ) 10.9 Class D Preferred Unit and Warrant Purchase Agreement, dated July 2, 2019, by and among NGL Energy Partners LP, EIG Neptune Equity Aggregator, L.P. and FS Energy and Power Fund (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on July 8, 2019) 10.10 Board Representation Rights Agreement, dated July 2, 2019, by and among NGL Energy Partners LP, NGL Energy Holdings LLC and certain affiliates of EIG Neptune Equity Aggregator, L.P. and FS Energy and Power Fund (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on July 8, 2019) 10.11 Voting Agreement, dated July 2, 2019, by and among the members of NGL Energy Holdings LLC named therein (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on July 8, 2019) 10.12 Letter Agreement, dated July 2, 2019, by and among NGL Energy Partners LP, Mesquite Disposals Unlimited, LLC and Mesquite SWD, Inc. (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on July 8, 2019) 10.13 Form of Par Warrant (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on July 8, 2019) 10.14 Form of Premium Warrant (incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on July 8, 2019) 10.15 Class D Preferred Unit and Warrant Purchase Agreement, dated September 25, 2019, by and among NGL Energy Partners LP, EIG Neptune Equity Aggregator, L.P., FS Energy and Power Fund and GCM Pellit Holdings, LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on September 30, 2019) 10.16 Form of Par Warrant (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on November 1, 2019) 10.17 Form of Premium Warrant (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K (File No. 001-35172) filed with the SEC on November 1, 2019) 21.1* List of Subsidiaries of NGL Energy Partners LP 22.1* List of Issuers and Guarantor Subsidiaries of NGL Energy Partners LP 23.1* Consent of Grant Thornton LLP 31.1* Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2* Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1* Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2* Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101.INS** XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH** Inline XBRL Schema Document 101.CAL** Inline XBRL Calculation Linkbase Document 101.DEF** Inline XBRL Definition Linkbase Document 101.LAB** Inline XBRL Label Linkbase Document 101.PRE** Inline XBRL Presentation Linkbase Document 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) * Exhibits filed with this report. ** The following documents are formatted in Inline XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets at March 31, 2023 and 2022, (ii) Consolidated Statements of Operations for the years ended March 31, 2023, 2022, and 2021, (iii) Consolidated Statements of Comprehensive Income (Loss) for the years ended March 31, 2023, 2022, and 2021, (iv) Consolidated Statements of Changes in Equity for the years ended March 31, 2023, 2022, and 2021, (v) Consolidated Statements of Cash Flows for the years ended March 31, 2023, 2022, and 2021, and (vi) Notes to Consolidated Financial Statements. 113 + Management contracts or compensatory plans or arrangements. Item 16. Form 10-K Summary None. 114 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on May 31, 2023. NGL Energy Partners LP By: NGL Energy Holdings LLC, its general partner By: /s/ H. Michael Krimbill H. Michael Krimbill Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ H. Michael Krimbill Chief Executive Officer and Director May 31, 2023 H. Michael Krimbill (Principal Executive Officer) /s/ Bradley P. Cooper Chief Financial Officer May 31, 2023 Bradley P. Cooper (Principal Financial Officer) /s/ Lawrence J. Thuillier Chief Accounting Officer May 31, 2023 Lawrence J. Thuillier (Principal Accounting Officer) /s/ Shawn W. Coady Director May 31, 2023 Shawn W. Coady /s/ James M. Collingsworth Director May 31, 2023 James M. Collingsworth /s/ Stephen L. Cropper Director May 31, 2023 Stephen L. Cropper /s/ Bryan K. Guderian Director May 31, 2023 Bryan K. Guderian Director May 31, 2023 John T. Raymond /s/ Derek S. Reiners Director May 31, 2023 Derek S. Reiners /s/ Randall S. Wade Director May 31, 2023 Randall S. Wade 115 INDEX TO FINANCIAL STATEMENTS NGL Energy Partners LP Report of Independent Registered Public Accounting Firm (PCAOB ID Number 248 ) F- 2 Consolidated Balance Sheets at March 31, 2023 and 2022 F- 4 Consolidated Statements of Operations for the years ended March 31, 2023, 2022, and 2021 F- 5 Consolidated Statements of Comprehensive Income (Loss) for the years ended March 31, 2023, 2022, and 2021 F- 6 Consolidated Statements of Changes in Equity for the years ended March 31, 2023, 2022, and 2021 F- 7 Consolidated Statements of Cash Flows for the years ended March 31, 2023, 2022, and 2021 F- 8 Notes to Consolidated Financial Statements F- 9 F-1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors of NGL Energy Holdings LLC and Unitholders of NGL Energy Partners LP Opinion on the financial statements We have audited the accompanying consolidated balance sheets of NGL Energy Partners LP (a Delaware limited partnership) and subsidiaries (the “Partnership”) as of March 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), changes in equity, and cash flows for each of the three years in the period ended March 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Partnership as of March 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2023, in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Partnership’s internal control over financial reporting as of March 31, 2023, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated May 31, 2023 expressed an unqualified opinion. Basis for opinio n These financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on the Partnership’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical audit matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Goodwill Impairment Assessment As described further in Note 5 to the consolidated financial statements, the Partnership’s consolidated goodwill balance was $712.4 million as of March 31, 2023. Management evaluates goodwill for impairment on January 1 of each year, or more frequently to the extent events or conditions indicate a risk of possible impairment. Management performed quantitative impairment assessments for the Crude Oil Logistics and Wholesale/Terminal reporting units to test goodwill for impairment as of January 1, 2023. As a result of the assessment performed for the reporting units, and as described further in Note 5 to the consolidated financial statements, the Partnership concluded the fair value of the Crude Oil Logistics and Wholesale/Terminal reporting units exceeded their carrying values and no goodwill impairment was recorded. We identified the goodwill impairment assessment as a critical audit matter. The principal considerations for our determination that the goodwill impairment assessment was a critical audit matter are that there was a high estimation uncertainty due to significant judgments with respect to assumptions used to estimate the future cash flows, including growth rates, operating expenses and cash outflows necessary to support the cash flows, weighted average costs of capital and future market conditions as well as the valuation methodologies applied by the Partnership. This in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence related to management’s forecasted future cash flows. In addition, the audit effort involved the use of professionals with specialized skill and knowledge to assist in performing these procedures and evaluating the audit evidence obtained. F-2 Our audit procedures related to the goodwill impairment assessment included the following, among others: We tested the effectiveness of controls relating to management’s goodwill impairment tests, including controls over the determination of the fair value of the reporting units. In addition to testing the effectiveness of controls, we also performed the following: • Utilized a valuation specialist to evaluate: ◦ The methodologies used and whether they were acceptable for the underlying assets or operations and being applied correctly by performing an independent calculation, ◦ The appropriateness of the discount rate by recalculating the weighted average costs of capital and evaluating future market conditions, and ◦ Other significant assumptions, including the terminal growth rate. • Tested the reasonableness of management’s process for determining the fair value of the reporting units, including the growth rate, forecasted costs and operating margins by comparing such items to the industry projections and conditions found in industry reports as well as historical operating results of the reporting units and by assessing the likelihood or capability of the reporting units to undertake activities or initiatives underpinning significant drivers of growth in the forecasted period. /s/ GRANT THORNTON LLP We have served as the Partnership’s auditor since 2010. Tulsa, Oklahoma May 31, 2023 F-3 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Consolidated Balance Sheets (in Thousands, except unit amounts) March 31, 2023 2022 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 5,431 $ 3,822 Accounts receivable-trade, net of allowance for expected credit losses of $ 1,964 and $ 2,626 , respectively 1,033,956 1,123,163 Accounts receivable-affiliates 12,362 8,591 Inventories 142,607 251,277 Prepaid expenses and other current assets 98,089 159,486 Total current assets 1,292,445 1,546,339 PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $ 898,184 and $ 887,006 , respectively 2,223,380 2,462,390 GOODWILL 712,364 744,439 INTANGIBLE ASSETS, net of accumulated amortization of $ 580,860 and $ 507,285 , respectively 1,058,668 1,135,354 INVESTMENTS IN UNCONSOLIDATED ENTITIES 21,090 21,897 OPERATING LEASE RIGHT-OF-USE ASSETS 90,220 114,124 OTHER NONCURRENT ASSETS 57,977 45,802 Total assets $ 5,456,144 $ 6,070,345 LIABILITIES AND EQUITY CURRENT LIABILITIES: Accounts payable-trade $ 927,591 $ 1,084,837 Accounts payable-affiliates 65 73 Accrued expenses and other payables 133,616 140,719 Advance payments received from customers 14,699 7,934 Current maturities of long-term debt — 2,378 Operating lease obligations 34,166 41,261 Total current liabilities 1,110,137 1,277,202 LONG-TERM DEBT, net of debt issuance costs of $ 30,117 and $ 42,988 , respectively, and current maturities 2,857,805 3,350,463 OPERATING LEASE OBLIGATIONS 58,450 72,784 OTHER NONCURRENT LIABILITIES 111,226 104,346 COMMITMENTS AND CONTINGENCIES (NOTE 8) CLASS D 9.00 % PREFERRED UNITS, 600,000 and 600,000 preferred units issued and outstanding, respectively 551,097 551,097 EQUITY: General partner, representing a 0.1 % interest, 132,059 and 130,827 notional units, respectively ( 52,551 ) ( 52,478 ) Limited partners, representing a 99.9 % interest, 131,927,343 and 130,695,970 common units issued and outstanding, respectively 455,564 401,486 Class B preferred limited partners, 12,585,642 and 12,585,642 preferred units issued and outstanding, respectively 305,468 305,468 Class C preferred limited partners, 1,800,000 and 1,800,000 preferred units issued and outstanding, respectively 42,891 42,891 Accumulated other comprehensive loss ( 450 ) ( 308 ) Noncontrolling interests 16,507 17,394 Total equity 767,429 714,453 Total liabilities and equity $ 5,456,144 $ 6,070,345 The accompanying notes are an integral part of these consolidated financial statements. F-4 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Consolidated Statements of Operations (in Thousands, except unit and per unit amounts) Year Ended March 31, 2023 2022 2021 REVENUES: Water Solutions $ 697,038 $ 544,866 $ 370,986 Crude Oil Logistics 2,464,822 2,505,496 1,721,636 Liquids Logistics 5,533,044 4,897,553 3,133,146 Corporate and Other — — 1,255 Total Revenues 8,694,904 7,947,915 5,227,023 COST OF SALES: Water Solutions 14,100 33,980 9,622 Crude Oil Logistics 2,250,934 2,352,932 1,515,993 Liquids Logistics 5,383,809 4,752,400 2,966,391 Corporate and Other 1,181 — 1,816 Total Cost of Sales 7,650,024 7,139,312 4,493,822 OPERATING COSTS AND EXPENSES: Operating 313,725 285,535 254,562 General and administrative 71,818 63,546 70,468 Depreciation and amortization 273,621 288,720 317,227 Loss on disposal or impairment of assets, net 86,888 94,254 475,436 Revaluation of liabilities 9,665 ( 6,495 ) 6,261 Operating Income (Loss) 289,163 83,043 ( 390,753 ) OTHER INCOME (EXPENSE): Equity in earnings of unconsolidated entities 4,120 1,400 1,938 Interest expense ( 275,445 ) ( 271,640 ) ( 198,799 ) Gain (loss) on early extinguishment of liabilities, net 6,177 1,813 ( 16,692 ) Other income (expense), net 28,748 2,254 ( 36,503 ) Income (Loss) From Continuing Operations Before Income Taxes 52,763 ( 183,130 ) ( 640,809 ) INCOME TAX (EXPENSE) BENEFIT ( 271 ) ( 971 ) 3,391 Income (Loss) From Continuing Operations 52,492 ( 184,101 ) ( 637,418 ) Loss From Discontinued Operations, net of Tax — — ( 1,769 ) Net Income (Loss) 52,492 ( 184,101 ) ( 639,187 ) LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS ( 1,106 ) ( 655 ) ( 632 ) NET INCOME (LOSS) ATTRIBUTABLE TO NGL ENERGY PARTNERS LP $ 51,386 $ ( 184,756 ) $ ( 639,819 ) NET LOSS FROM CONTINUING OPERATIONS ALLOCATED TO COMMON UNITHOLDERS (NOTE 3) $ ( 73,232 ) $ ( 288,630 ) $ ( 730,683 ) NET LOSS FROM DISCONTINUED OPERATIONS ALLOCATED TO COMMON UNITHOLDERS (NOTE 3) $ — $ — $ ( 1,767 ) NET LOSS ALLOCATED TO COMMON UNITHOLDERS (NOTE 3) $ ( 73,232 ) $ ( 288,630 ) $ ( 732,450 ) BASIC AND DILUTED LOSS PER COMMON UNIT Loss From Continuing Operations $ ( 0.56 ) $ ( 2.22 ) $ ( 5.67 ) Loss From Discontinued Operations, net of Tax $ — $ — $ ( 0.01 ) Net Loss $ ( 0.56 ) $ ( 2.22 ) $ ( 5.68 ) BASIC WEIGHTED AVERAGE COMMON UNITS OUTSTANDING 131,007,171 129,840,234 128,980,823 DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING 131,007,171 129,840,234 128,980,823 The accompanying notes are an integral part of these consolidated financial statements. F-5 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Consolidated Statements of Comprehensive Income (Loss) (in Thousands) Year Ended March 31, 2023 2022 2021 Net income (loss) $ 52,492 $ ( 184,101 ) $ ( 639,187 ) Other comprehensive (loss) income ( 142 ) ( 42 ) 119 Comprehensive income (loss) $ 52,350 $ ( 184,143 ) $ ( 639,068 ) The accompanying notes are an integral part of these consolidated financial statements. F-6 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Consolidated Statements of Changes in Equity For the Years Ended March 31, 2023, 2022, and 2021 (in Thousands, except unit amounts) Limited Partners Preferred Common General Partner Units Amount Units Amount Accumulated Other Comprehensive Income (Loss) Noncontrolling Interests Total Equity BALANCE AT MARCH 31, 2020 $ ( 51,390 ) 14,385,642 $ 348,359 128,771,715 $ 1,366,152 $ ( 385 ) $ 72,954 $ 1,735,690 Distributions to general and common unit partners and preferred unitholders (Note 9) ( 65 ) — — — ( 147,715 ) — — ( 147,780 ) Distributions to noncontrolling interest owners — — — — — — ( 4,115 ) ( 4,115 ) Common unit repurchases and cancellations — — — ( 70,226 ) ( 182 ) — — ( 182 ) Equity issued pursuant to incentive compensation plan — — — 892,450 4,727 — — 4,727 Net (loss) income ( 733 ) — — — ( 639,086 ) — 632 ( 639,187 ) Other comprehensive income — — — — — 119 — 119 Cumulative effect adjustment for adoption of ASU 2016-13 (Note 16) ( 1 ) — — — ( 1,112 ) — — ( 1,113 ) BALANCE AT MARCH 31, 2021 ( 52,189 ) 14,385,642 348,359 129,593,939 582,784 ( 266 ) 69,471 948,159 Distributions to noncontrolling interest owners — — — — — — ( 1,635 ) ( 1,635 ) Sawtooth joint venture disposition (Note 17) — — — — — — ( 51,097 ) ( 51,097 ) Common unit repurchases and cancellations — — — ( 44,769 ) ( 90 ) — — ( 90 ) Equity issued pursuant to incentive compensation plan — — — 1,146,800 3,259 — — 3,259 Net (loss) income ( 289 ) — — — ( 184,467 ) — 655 ( 184,101 ) Other comprehensive loss — — — — — ( 42 ) — ( 42 ) BALANCE AT MARCH 31, 2022 ( 52,478 ) 14,385,642 348,359 130,695,970 401,486 ( 308 ) 17,394 714,453 Distributions to noncontrolling interest owners — — — — — — ( 1,993 ) ( 1,993 ) Common unit repurchases and cancellations (Note 9) — — — ( 55,702 ) ( 99 ) — — ( 99 ) Equity issued pursuant to incentive compensation plan (Note 9) — — — 1,287,075 2,718 — — 2,718 Net (loss) income ( 73 ) — — — 51,459 — 1,106 52,492 Other comprehensive loss — — — — — ( 142 ) — ( 142 ) BALANCE AT MARCH 31, 2023 $ ( 52,551 ) 14,385,642 $ 348,359 131,927,343 $ 455,564 $ ( 450 ) $ 16,507 $ 767,429 The accompanying notes are an integral part of these consolidated financial statements. F-7 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Consolidated Statements of Cash Flows (in Thousands) Year Ended March 31, 2023 2022 2021 OPERATING ACTIVITIES: Net income (loss) $ 52,492 $ ( 184,101 ) $ ( 639,187 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Loss from discontinued operations, net of tax — — 1,769 Depreciation and amortization, including amortization of debt issuance costs 290,879 306,208 331,200 Loss (gain) on early extinguishment or revaluation of liabilities, net 3,488 ( 8,308 ) 22,953 Equity-based compensation expense 2,718 ( 1,052 ) 6,727 Loss on disposal or impairment of assets, net 86,888 94,254 475,436 Change in provision for expected credit losses ( 385 ) 929 5,988 Net adjustments to fair value of commodity derivatives 5,383 116,556 83,578 Equity in earnings of unconsolidated entities ( 4,120 ) ( 1,400 ) ( 1,938 ) Distributions of earnings from unconsolidated entities 4,627 2,205 3,364 Lower of cost or net realizable value adjustments 3,227 14,761 3,898 Other 1,827 2,310 1,513 Changes in operating assets and liabilities, exclusive of acquisitions: Accounts receivable-trade and affiliates 86,629 ( 397,607 ) ( 162,031 ) Inventories 85,050 ( 119,806 ) ( 92,731 ) Other current and noncurrent assets 20,848 40,158 92,555 Accounts payable-trade and affiliates ( 155,883 ) 405,420 207,505 Other current and noncurrent liabilities ( 38,482 ) ( 64,681 ) ( 34,836 ) Net cash provided by operating activities-continuing operations 445,186 205,846 305,763 Net cash used in operating activities-discontinued operations — — ( 1,769 ) Net cash provided by operating activities 445,186 205,846 303,994 INVESTING ACTIVITIES: Capital expenditures ( 147,765 ) ( 142,359 ) ( 186,801 ) Acquisitions, net of cash acquired — — 901 Net settlements of commodity derivatives 54,430 ( 152,055 ) ( 80,372 ) Proceeds from sales of assets 45,978 18,500 45,742 Proceeds from divestitures of businesses and investments, net 111,633 63,489 — Investments in unconsolidated entities ( 88 ) ( 350 ) ( 963 ) Distributions of capital from unconsolidated entities — 367 — Net cash provided by (used in) investing activities 64,188 ( 212,408 ) ( 221,493 ) FINANCING ACTIVITIES: Proceeds from borrowings under revolving credit facility 2,007,000 1,815,000 1,261,000 Payments on revolving credit facility ( 1,985,000 ) ( 1,703,000 ) ( 2,727,000 ) Issuance of senior secured notes and term credit agreement — — 2,300,000 Repayment of term credit agreements — — ( 555,562 ) Repayment and repurchase of senior unsecured notes ( 479,302 ) ( 83,167 ) ( 115,796 ) Proceeds from borrowings on other long-term debt — — 50,000 Payments on other long-term debt ( 43,278 ) ( 7,390 ) ( 5,590 ) Debt issuance costs ( 3,294 ) ( 12,932 ) ( 65,566 ) Distributions to general and common unit partners and preferred unitholders — — ( 142,128 ) Distributions to noncontrolling interest owners ( 1,993 ) ( 1,635 ) ( 4,115 ) Common unit repurchases and cancellations ( 99 ) ( 90 ) ( 182 ) Payments to settle contingent consideration liabilities ( 1,789 ) ( 1,231 ) ( 95,437 ) Principal payments of finance lease ( 10 ) — — Net cash (used in) provided by financing activities ( 507,765 ) 5,555 ( 100,376 ) Net increase (decrease) in cash and cash equivalents 1,609 ( 1,007 ) ( 17,875 ) Cash and cash equivalents, beginning of period 3,822 4,829 22,704 Cash and cash equivalents, end of period $ 5,431 $ 3,822 $ 4,829 Supplemental cash flow information: Cash interest paid $ 265,420 $ 254,814 $ 168,642 Income taxes paid (net of income tax refunds) $ 3,410 $ 2,480 $ 2,586 Supplemental non-cash investing and financing activities: Distributions declared but not paid to preferred unitholders $ — $ — $ 13,814 Accrued capital expenditures $ 7,533 $ 14,558 $ 21,824 The accompanying notes are an integral part of these consolidated financial statements. F-8 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements Note 1— Organization and Operations NGL Energy Partners LP (“we,” “us,” “our,” or the “Partnership”) is a Delaware limited partnership formed in September 2010. NGL Energy Holdings LLC serves as our general partner (“GP”). At March 31, 2023, our operations included three segments: • Our Water Solutions segment transports, treats, recycles and disposes of produced and flowback water generated from crude oil and natural gas production. We also sell produced water for reuse and recycle 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 owned and leased pipelines. • Our Liquids Logistics segment 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 25 owned terminals, third-party storage and terminal facilities, nine common carrier pipelines and a fleet of leased railcars. We also provide services for marine exports of butane through our facility located in Chesapeake, Virginia, and we own a propane pipeline system in Michigan. Note 2— Significant Accounting Policies Basis of Presentation Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The accompanying consolidated financial statements include our accounts and those of our controlled subsidiaries. Intercompany transactions and account balances have been eliminated in consolidation. Investments we do not control, but can exercise significant influence over, are accounted for using the equity method of accounting. We also own an undivided interest in a crude oil pipeline, and include our proportionate share of assets, liabilities, and expenses related to this pipeline in our consolidated financial statements. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amount of assets and liabilities reported at the date of the consolidated financial statements and the amount of revenues and expenses reported during the periods presented. Critical accounting estimates we make in the preparation of our consolidated financial statements include, among others, determining the impairment of goodwill and long-lived assets, useful lives and recoverability of property, plant and equipment and amortizable intangible assets, the fair value of derivative instruments, estimating certain revenues, the fair value of asset retirement obligations, the fair value of assets and liabilities acquired in acquisitions, the recoverability of inventories, the collectability of accounts and notes receivable and accruals for environmental matters. Although we believe these estimates are reasonable, actual results could differ from those estimates. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. Fair value is based upon assumptions that market participants would use when pricing an asset or liability. We use the following fair value hierarchy, which prioritizes valuation technique inputs used to measure fair value into three broad levels: F-9 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) • Level 1: Quoted prices in active markets for identical assets and liabilities that we have the ability to access at the measurement date. • Level 2: Inputs (other than quoted prices included within Level 1) that are either directly or indirectly observable for the asset or liability, including (i) quoted prices for similar assets or liabilities in active markets, (ii) quoted prices for identical or similar assets or liabilities in inactive markets, (iii) inputs other than quoted prices that are observable for the asset or liability, and (iv) inputs that are derived from observable market data by correlation or other means. Instruments categorized in Level 2 include non-exchange traded derivatives such as over-the-counter commodity price swap and option contracts and forward commodity contracts. We determine the fair value of all of our derivative financial instruments utilizing pricing models for similar instruments. Inputs to the pricing models include publicly available prices and forward curves generated from a compilation of data gathered from third parties. • Level 3: Unobservable inputs for the asset or liability including situations where there is little, if any, market activity for the asset or liability. The fair value hierarchy gives the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable inputs (Level 3). In some cases, the inputs used to measure fair value might fall into different levels of the fair value hierarchy. The lowest level input that is significant to a fair value measurement determines the applicable level in the fair value hierarchy. Assessing the significance of a particular input to a fair value measurement requires judgment, considering factors specific to the asset or liability. Derivative Financial Instruments We record all derivative financial instrument contracts at fair value in our consolidated balance sheets except for normal purchase and normal sale transactions that are expected to result in physical delivery. For these transactions, we do not record the physical contracts at fair value at each balance sheet date; instead, we record the purchase or sale at the contracted value once the delivery occurs. We have not designated any financial instruments as hedges for accounting purposes. All changes in the fair value of our physical contracts that do not qualify as normal purchases and normal sales and settlements (whether cash transactions or non-cash mark-to-market adjustments) are reported either within revenue (for sales contracts) or cost of sales (for purchase contracts) in our consolidated statements of operations, regardless of whether the contract is physically or financially settled. We utilize various commodity derivative financial instrument contracts to attempt to reduce our exposure to price fluctuations. We do not enter into such contracts for trading purposes. Changes in assets and liabilities from commodity derivative financial instruments result primarily from changes in market prices, newly originated transactions, and the timing of settlements and are reported within cost of sales on the consolidated statements of operations, along with related settlements. We attempt to balance our contractual portfolio in terms of notional amounts and timing of performance and delivery obligations. However, net unbalanced positions can exist or are established based on our assessment of anticipated market movements. Inherent in the resulting contractual portfolio are certain business risks, including commodity price risk and credit risk. Commodity price risk is the risk that the market value of crude oil, natural gas liquids, or refined and renewables products will change, either favorably or unfavorably, in response to changing market conditions. Credit risk is the risk of loss from nonperformance by suppliers, customers or financial counterparties to a contract. Procedures and limits for managing commodity price risks and credit risks are specified in our market risk policy and credit policy, respectively. Open commodity positions and market price changes are monitored daily and are reported to senior management and to marketing operations personnel. Credit risk is monitored daily and exposure is minimized through customer deposits, letters of credit, monitoring customer receivables relative to previously-approved credit limits, restrictions on product liftings, entering into master netting agreements that allow for offsetting counterparty receivable and payable balances for certain transactions, reviewing the receivable aging and suspending sales to customers that have not timely paid outstanding invoices. Cost of Sales We include all costs we incur to acquire products, including the costs of purchasing, terminaling, and transporting inventory, prior to delivery to our customers, in cost of sales. Depreciation and Amortization Depreciation and amortization in our consolidated statements of operations includes all depreciation of our property, plant and equipment and amortization of intangible assets other than debt issuance costs, for which the amortization is recorded F-10 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) to interest expense and certain contract-based intangible assets, for which the amortization is recorded to either cost of sales or operating expense. Income Taxes We qualify as a partnership for income tax purposes. As such, we generally do not pay federal income tax. Rather, each owner reports his or her share of our income or loss on his or her individual tax return. The aggregate difference in the basis of our net assets for financial and tax reporting purposes cannot be readily determined, as we do not have access to information regarding each partner’s basis in the Partnership. We have certain taxable corporate subsidiaries in the United States and Canada, and our operations in Texas are subject to a state franchise tax that is calculated based on revenues net of cost of sales. Our fiscal years 2019 to 2022 generally remain subject to examination by federal, state, and Canadian tax authorities. We utilize the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying value of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which these temporary differences are expected to be recovered or settled. Changes in tax rates are recognized in income in the period that includes the enactment date. A publicly traded partnership is required to generate at least 90 % of its gross income (as defined for federal income tax purposes) from certain qualifying sources. Income generated by our taxable corporate subsidiaries is excluded from this qualifying income calculation. Although we routinely generate income outside of our corporate subsidiaries that is non-qualifying, we believe that at least 90 % of our gross income has been qualifying income for each of the calendar years since our initial public offering. We have a deferred tax liability of $ 40.7 million and $ 43.5 million at March 31, 2023 and 2022, respectively, as a result of acquiring corporations in connection with certain of our acquisitions, which is included within other noncurrent liabilities in our consolidated balance sheets. The deferred tax liability is the tax effected cumulative temporary difference between the GAAP basis and tax basis of the acquired assets within the corporation. For GAAP purposes, certain of the acquired assets will be depreciated and amortized over time which will lower the GAAP basis. The deferred tax benefit recorded during the year ended March 31, 2023 was $ 2.3 million with an effective tax rate of 27.5 %. The deferred tax benefit recorded during the year ended March 31, 2022 was $ 1.2 million with an effective tax rate of 11.3 %. We evaluate uncertain tax positions for recognition and measurement in the consolidated financial statements. To recognize a tax position, we determine whether it is more likely than not that the tax position will be sustained upon examination, including resolution of any related appeals or litigation, based on the technical merits of the position. A tax position that meets the more likely than not threshold is measured to determine the amount of benefit to be recognized in the consolidated financial statements. We had no uncertain tax positions that required recognition in our consolidated financial statements at March 31, 2023 or 2022. Cash and Cash Equivalents Management considers all highly liquid investments with a maturity of three months or less, when purchased, to be cash equivalents. We place our cash and cash equivalents with financial institutions that are insured by the Federal Deposit Insurance Corporation; however, we maintain deposits in banks which exceed the amount of deposit insurance available. Management routinely assesses the financial condition of the institutions and believes that any possible credit loss would be minimal. Accounts Receivable and Concentration of Credit Risk We operate in the United States and Canada. We grant unsecured credit to customers under normal industry standards and terms, and have established policies and procedures that allow for an evaluation of each customer’s creditworthiness as well as general economic conditions. See Note 16 for a further discussion of our allowance for expected credit losses. We execute master netting agreements with certain customers to mitigate our credit risk. Receivables and payables are reflected at a net balance to the extent a master netting agreement is in place and we intend to settle on a net basis. F-11 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) We did not have any customers that represented over 10% of our consolidated revenues for the years ended March 31, 2023 or 2021. CITGO Petroleum Corporation accounted for 12.8 % of our consolidated revenues for the year ended March 31, 2022. The majority of the revenue for this customer pertains to our Crude Oil Logistics segment activities. Inventories Our inventories are valued at the lower of cost or net realizable value, with cost determined using either the weighted-average cost or the first in, first out (FIFO) methods, including the cost of transportation and storage, and with net realizable value defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. In performing this analysis, we consider fixed-price forward commitments. Inventories consist of the following at the dates indicated: March 31, 2023 2022 (in thousands) Crude oil $ 49,586 $ 135,485 Propane 46,910 43,971 Biodiesel 19,778 20,474 Butane 18,384 33,144 Diesel 2,536 3,504 Ethanol 3 3,503 Other 5,410 11,196 Total $ 142,607 $ 251,277 Investments in Unconsolidated Entities Investments we do not control, but can exercise significant influence over, are accounted for using the equity method of accounting. Investments in partnerships and limited liability companies, unless our investment is considered to be minor, and investments in unincorporated joint ventures are also accounted for using the equity method of accounting. Under the equity method, we do not report the individual assets and liabilities of these entities on our consolidated balance sheets; instead, our ownership interests are reported within investments in unconsolidated entities on our consolidated balance sheets. Under the equity method, the investment is recorded at acquisition cost, increased by our proportionate share of any earnings and additional capital contributions and decreased by our proportionate share of any losses, distributions paid, and amortization of any excess investment. Excess investment is the amount by which our total investment exceeds our proportionate share of the net assets of the investee. We consider distributions received from unconsolidated entities which do not exceed cumulative equity in earnings subsequent to the date of investment to be a return on investment and are classified as operating activities in our consolidated statements of cash flows. We consider distributions received from unconsolidated entities in excess of cumulative equity in earnings subsequent to the date of investment to be a return of investment and are classified as investing activities in our consolidated statements of cash flows. At March 31, 2023, cumulative equity earnings and cumulative distributions of our unconsolidated entities since they were acquired were $ 10.6 million and $ 14.0 million, respectively. F-12 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) Our investments in unconsolidated entities consist of the following at the dates indicated: March 31, Entity Segment Ownership Interest 2023 2022 (in thousands) Water services and land company Water Solutions 50 % $ 15,036 $ 15,714 Water services and land company Water Solutions 10 % 3,511 2,863 Water services and land company Water Solutions 50 % 2,071 2,210 Aircraft company (1) Corporate and Other 50 % 308 538 Natural gas liquids terminal company Liquids Logistics 50 % 164 163 Water services company (2) Water Solutions 50 % — 409 Total $ 21,090 $ 21,897 (1) This is an investment with a related party. (2) This entity was dissolved on March 31, 2023. Other Noncurrent Assets Other noncurrent assets consist of the following at the dates indicated: March 31, 2023 2022 (in thousands) Linefill (1) $ 37,861 $ 28,065 Loan receivable (2) 8,592 3,147 Minimum shipping fees - pipeline commitments (3) 4,628 8,899 Other 6,896 5,691 Total $ 57,977 $ 45,802 (1) Represents minimum volumes of product we are required to leave on certain third-party owned pipelines under long-term shipment commitments. At March 31, 2023 and 2022, linefill consisted of 502,686 and 423,978 barrels of crude oil, respectively. The increase was due primarily to capitalizing additional crude oil barrels as a result of increased requirements by third-party owned pipelines. This was partially offset by a decrease as we assigned our commitment with a pipeline operator to a third-party whereby the third-party purchased our linefill in the pipeline (see Note 8). Linefill held in pipelines we own is included within property, plant and equipment (see Note 4). (2) The March 31, 2023 balance represents the noncurrent portion of a loan receivable, net of an allowance for an expected credit loss, related to the sale of certain saltwater disposal assets in the Midland Basin in March 2023 (see Note 17). The March 31, 2022 balance represents the noncurrent portion of a loan receivable, net of an allowance for an expected credit loss, with a former related party. During the year ended March 31, 2023, we received payments totaling $ 3.1 million to extinguish this loan receivable and we recorded a loss of $ 0.2 million within loss on disposal or impairment of assets, net to write off the remaining balance. (3) Represents the noncurrent portion of minimum shipping fees paid in excess of volumes shipped, or deficiency credits, for a contract with a crude oil pipeline operator. This amount can be recovered when volumes shipped exceed the minimum monthly volume commitment (see Note 8). At March 31, 2023, the deficiency credit was $ 8.9 million, of which $ 4.3 million is recorded within prepaid expenses and other current assets in our consolidated balance sheet. F-13 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) Accrued Expenses and Other Payables Accrued expenses and other payables consist of the following at the dates indicated: March 31, 2023 2022 (in thousands) Accrued interest $ 49,362 $ 56,104 Accrued compensation and benefits 27,013 18,417 Derivative liabilities 14,752 27,108 Excise and other tax liabilities 11,777 10,451 Product exchange liabilities 4,047 853 Other 26,665 27,786 Total $ 133,616 $ 140,719 Property, Plant and Equipment We record property, plant and equipment at cost less accumulated depreciation. Acquisitions and improvements are capitalized, and maintenance and repairs are expensed as incurred. As we dispose of assets, we remove the cost and related accumulated depreciation from the accounts, and any resulting gain or loss is included within loss on disposal or impairment of assets, net. We compute depreciation expense of our property, plant and equipment using the straight-line method over the estimated useful lives of the assets (see Note 4). Intangible Assets Our intangible assets include contracts and arrangements acquired in business combinations, including customer relationships, customer commitments, pipeline capacity rights, rights-of-way and easements, water rights, executory contracts and other agreements, covenants not to compete, and trade names. In addition, we capitalize certain debt issuance costs associated with the ABL Facility (as defined herein). We amortize the majority of our intangible assets on a straight-line basis over the estimated useful lives of the assets (see Note 6). We amortize debt issuance costs over the terms of the related debt using a method that approximates the effective interest method. Impairment of Long-Lived Assets We evaluate the carrying value of our long-lived assets (property, plant and equipment and amortizable intangible assets) for potential impairment when events and circumstances warrant such a review. A long-lived asset group is considered impaired when the anticipated undiscounted future cash flows from the use and eventual disposition of the asset group is less than its carrying value. If the carrying value is not recoverable, an impairment loss is measured as the excess of the asset’s carrying value over its estimated fair value. When we cease to use an acquired trade name, we test the trade name for impairment using the relief from royalty method and we begin amortizing the trade name over its estimated useful life as a defensive asset. See Note 4 and Note 6 for a further discussion of long-lived asset impairments recognized in the consolidated statements of operations. We evaluate our investments in unconsolidated entities for impairment whenever events or changes in circumstances indicate, in management’s judgment, that the fair value of such investment may have experienced a decline to less than its carrying value and the decline is other than temporary. Goodwill Goodwill represents the excess of the consideration paid for the acquired businesses over the fair value of the individual assets acquired, net of liabilities assumed. Business combinations are accounted for using the “acquisition method”. We expect that all of our goodwill at March 31, 2023 is deductible for federal income tax purposes. Goodwill and indefinite-lived intangible assets are not amortized, but instead are evaluated for impairment at least annually. We perform our annual assessment of impairment on January 1 of our fiscal year, and more frequently if circumstances warrant. F-14 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) For purposes of the goodwill impairment assessment, assets are grouped into “reporting units.” A reporting unit is either an operating segment or a component of an operating segment, depending on how similar the components of the operating segment are to each other in terms of operational and economic characteristics. For each reporting unit, we perform a qualitative assessment of relevant events and circumstances about the likelihood of goodwill impairment. If it is deemed more likely than not that the fair value of the reporting unit is less than its carrying value, we calculate the fair value of the reporting unit. Otherwise, further testing is not required. If the fair value of the reporting unit (including its inherent goodwill) is less than its carrying value, an impairment loss is recognized to the extent that the implied fair value of the goodwill of the reporting unit is less than its carrying value, limited to the total amount of goodwill for the reporting unit. Estimates and assumptions used to perform the impairment evaluation are inherently uncertain and can significantly affect the outcome of the analysis. The estimates and assumptions we used in the annual goodwill impairment assessment included market participant considerations and future forecasted operating results. Changes in operating results and other assumptions could materially affect these estimates. See Note 5 for a further discussion and analysis of our goodwill impairment assessment. Product Exchanges Quantities of products receivable or returnable under exchange agreements are reported within prepaid expenses and other current assets and within accrued expenses and other payables in our consolidated balance sheets. We estimate the value of product exchange assets and liabilities based on the weighted-average cost basis of the inventory we have delivered or will deliver on the exchange, plus or minus location differentials. Noncontrolling Interests Noncontrolling interests represent the portion of certain consolidated subsidiaries that are owned by third parties. Amounts are adjusted by the noncontrolling interest holder’s proportionate share of the subsidiaries’ earnings or losses each period and any distributions that are paid. Noncontrolling interests are reported as a component of equity, unless the noncontrolling interest is considered redeemable, in which case the noncontrolling interest is recorded between liabilities and equity (mezzanine or temporary equity) in our consolidated balance sheet. Acquisitions To determine if a transaction should be accounted for as a business combination or an acquisition of assets, we first calculate the relative fair values of the assets acquired. If substantially all of the relative fair value is concentrated in a single asset or group of similar assets, or if not but the transaction does not include a significant process (does not meet the definition of a business), we record the transaction as an acquisition of assets. For acquisitions of assets, the purchase price is allocated based on the relative fair values and goodwill is not recorded. All other transactions are recorded as business combinations. We record the assets acquired and liabilities assumed in a business combination at their acquisition date fair values. For a business combination, the excess of the purchase price over the net fair value of acquired assets and assumed liabilities is recorded as goodwill, which is not amortized but instead is evaluated for impairment at least annually (as described above). Pursuant to GAAP, an entity is allowed a reasonable period of time (not to exceed one year) to obtain the information necessary to identify and measure the fair value of the assets acquired and liabilities assumed in a business combination. Reclassifications We have reclassified certain prior period financial statement information to be consistent with the classification methods used in the current fiscal year. These reclassifications did not impact previously reported amounts of assets, liabilities, equity, net income or cash flows. Recent Accounting Pronouncements In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06, “Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” This ASU (i) simplifies an issuer’s accounting for convertible instruments by eliminating two of the three models in Accounting Standards Codification (“ASC”) 470-20 that require separate accounting for embedded conversion features, (ii) amends diluted earnings per share calculations for convertible instruments by requiring the use of the if-converted method and (iii) simplifies F-15 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) the settlement assessment entities are required to perform on contracts that can potentially settle in an entity’s own equity by removing certain requirements. We adopted this guidance on April 1, 2022 using the modified retrospective method. Under our Class D Preferred Unit (as defined in Note 9) agreement, we are permitted to issue common units to redeem a portion of the outstanding Class D Preferred Units. Using the if-converted method, we expect our calculation of earnings per unit to be impacted by both an increase in the number of diluted weighted average common units outstanding and a decrease in the amount of Class D Preferred Unit distributions, when they are determined to be dilutive. Other than the potential impact to our future earnings per unit calculations, the adoption of this guidance did not impact our financial position, results of operations or cash flows related to any debt or preferred units issued prior to adoption. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The ASU provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (“LIBOR”) interest rate or another reference rate expected to be discontinued because of reference rate reform. This guidance was to be effective prospectively upon issuance through December 31, 2022 and applied from the beginning of an interim period that included the issuance date of this ASU. However, in December 2022, the FASB issued ASU 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848” which deferred the sunset date from December 31, 2022 to December 31, 2024. All other provisions of ASU 2020-04 were unchanged. On April 13, 2022, the ABL Facility was amended to replace the LIBOR benchmark with the SOFR (as defined herein) benchmark (as discussed further in Note 7). We are continuing to evaluate the effect that this guidance will have on our financial position, results of operations and cash flows. Note 3— Loss Per Common Unit The following table presents our calculation of basic and diluted weighted average common units outstanding for the periods indicated: Year Ended March 31, 2023 2022 2021 Weighted average common units outstanding during the period: Common units - Basic 131,007,171 129,840,234 128,980,823 Common units - Diluted 131,007,171 129,840,234 128,980,823 For the years ended March 31, 2023, 2022 and 2021, all potential common units or convertible securities were considered antidilutive. Our loss per common unit is as follows for the periods indicated: Year Ended March 31, 2023 2022 2021 (in thousands, except unit and per unit amounts) Income (loss) from continuing operations $ 52,492 $ ( 184,101 ) $ ( 637,418 ) Less: Continuing operations income attributable to noncontrolling interests ( 1,106 ) ( 655 ) ( 632 ) Net income (loss) from continuing operations attributable to NGL Energy Partners LP 51,386 ( 184,756 ) ( 638,050 ) Less: Distributions to preferred unitholders (1) ( 124,691 ) ( 104,163 ) ( 93,364 ) Less: Continuing operations net loss allocated to GP (2) 73 289 731 Net loss from continuing operations allocated to common unitholders $ ( 73,232 ) $ ( 288,630 ) $ ( 730,683 ) Loss from discontinued operations, net of tax $ — $ — $ ( 1,769 ) Less: Discontinued operations net loss allocated to GP (2) — — 2 Net loss from discontinued operations allocated to common unitholders $ — $ — $ ( 1,767 ) Net loss allocated to common unitholders $ ( 73,232 ) $ ( 288,630 ) $ ( 732,450 ) Basic and diluted loss per common unit Loss from continuing operations $ ( 0.56 ) $ ( 2.22 ) $ ( 5.67 ) Loss from discontinued operations, net of tax $ — $ — $ ( 0.01 ) Net loss $ ( 0.56 ) $ ( 2.22 ) $ ( 5.68 ) (1) Includes cumulative distributions for the years ended March 31, 2023, 2022 and 2021 which were earned but not declared or paid (see Note 9 for a further discussion of the suspension of common unit and preferred unit distributions). (2) Net loss allocated to the GP includes distributions to which it is entitled as the holder of incentive distribution rights. F-16 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) Note 4— Property, Plant and Equipment Our property, plant and equipment consists of the following at the dates indicated: Estimated March 31, Description Useful Lives 2023 2022 (in years) (in thousands) Natural gas liquids terminal and storage assets 2 - 30 $ 160,939 $ 173,199 Pipeline and related facilities 30 - 40 265,253 265,643 Vehicles and railcars (1) 3 - 25 92,640 93,126 Water treatment facilities and equipment 3 - 30 2,040,792 2,040,687 Crude oil tanks and related equipment 2 - 30 221,881 236,805 Barges and towboats (2) 5 - 30 — 138,778 Information technology equipment 3 - 7 35,884 48,664 Buildings and leasehold improvements 3 - 40 130,119 151,071 Land 89,474 100,038 Tank bottoms and linefill (3) 40,001 30,443 Other 3 - 20 10,908 15,252 Construction in progress 33,673 55,690 3,121,564 3,349,396 Accumulated depreciation ( 898,184 ) ( 887,006 ) Net property, plant and equipment $ 2,223,380 $ 2,462,390 (1) Includes a finance lease right-of-use asset of $ 0.1 million. The accumulated amortization related to this finance lease is included within accumulated depreciation. (2) On March 30, 2023, we sold our marine assets (see Note 17). (3) Tank bottoms, which are product volumes required for the operation of storage tanks, are recorded at historical cost. We recover tank bottoms when the storage tanks are removed from service. Linefill, which represents our portion of the product volume required for the operation of the proportionate share of a pipeline we own, is recorded at historical cost. The following table summarizes depreciation expense and capitalized interest expense for the periods indicated: Year Ended March 31, 2023 2022 2021 (in thousands) Depreciation expense $ 196,129 $ 203,783 $ 190,204 Capitalized interest expense $ 945 $ 916 $ 2,778 We record (gains) losses from the sales of property, plant and equipment and any write-downs in value due to impairment within loss on disposal or impairment of assets, net in our consolidated statement of operations. The following table summarizes (gains) losses on the disposal or impairment of property, plant and equipment by segment for the periods indicated: Year Ended March 31, 2023 2022 2021 (in thousands) Water Solutions $ 56,644 $ 28,068 $ 36,492 Crude Oil Logistics 18,944 ( 3,194 ) 1,766 Liquids Logistics 10,135 11,750 3,350 Corporate and Other ( 1,214 ) — 228 Total $ 84,509 $ 36,624 $ 41,836 During the year ended March 31, 2023, the following transactions were recorded: • A net loss of $ 26.3 million primarily related to the sale of certain assets in our Water Solutions segment. F-17 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) • A net loss of $ 21.8 million to write down the value of an inactive saltwater disposal facility and damaged equipment at another saltwater disposal facility, as well as the abandonment of certain capital projects and the retirement of certain assets in our Water Solutions segment. • A net loss of $ 20.0 million related to the impairment of an underperforming crude oil terminal in our Crude Oil Logistics segment. • A net loss of $ 10.0 million related to the impairment of several underperforming natural gas liquids terminals in our Liquids Logistics segment. • A gain of $ 2.1 million from an insurance recovery for a saltwater disposal facility damaged in a prior period in our Water Solutions segment. During the year ended March 31, 2022, the following transactions were recorded: • A net loss of $ 22.3 million related to write-down or write off of certain assets, including facilities damaged by lightning strikes and abandoned projects, and the sale of certain other miscellaneous assets in our Water Solutions segment. • A loss of $ 11.8 million on the sale of a natural gas liquids terminals in our Liquids Logistics segment. • An impairment charge of $ 5.8 million to write down the value of an inactive saltwater disposal facility that we do not expect to bring back online as a result of suspended operations from increased seismic activity in our Water Solutions segment. • A loss of $ 2.2 million from the retirement of certain crude oil terminal assets damaged as part of Hurricane Ida in our Crude Oil Logistics segment. • A gain of $ 5.5 million on the sale of our trucking assets in our Crude Oil Logistics segment. During the year ended March 31, 2021, the following transactions were recorded within our Water Solutions segment: • An impairment charge of $ 30.6 million to write down the value of an asset group due to a decline in producer activity, resulting in lower disposal volumes. See Note 6 for a discussion of the impairment of intangible assets within this asset group. • An impairment charge of $ 11.9 million to write down the value of certain inactive saltwater disposal facilities that we do not expect to bring back online. • A net loss of $ 6.7 million related to write-down or write off of certain assets, including facilities damaged by lightning strikes and abandoned projects, and the sale of certain other miscellaneous assets. • A gain of $ 12.8 million related to the sale of certain permits, land and a saltwater disposal facility (see Note 17). Note 5— Goodwill The following table summarizes changes in goodwill by segment for the periods indicated: Water Solutions Crude Oil Logistics Liquids Logistics Total (in thousands) Balance at March 31, 2021 $ 283,310 $ 342,046 $ 119,083 $ 744,439 Balance at March 31, 2022 $ 283,310 $ 342,046 $ 119,083 $ 744,439 Disposal (Note 17) — ( 32,075 ) — ( 32,075 ) Balance at March 31, 2023 $ 283,310 $ 309,971 $ 119,083 $ 712,364 Fiscal Year 2023 Goodwill Impairment Assessment We performed a qualitative assessment as of January 1, 2023 to determine whether it was more likely than not that the fair value of each reporting unit was greater than the carrying value of the reporting unit. Based on these qualitative assessments, we determined that the fair value of each of our reporting units was more likely than not greater than the carrying value of the reporting units as of January 1, 2023, with the exception of our Crude Oil Logistics and Wholesale/Terminal reporting units. See below for a further discussion of the testing. F-18 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) Due to lower than expected operating results, it was decided that the goodwill within the Crude Oil Logistics reporting unit should be tested for impairment as of January 1, 2023. We estimated the fair value of the Crude Oil Logistics reporting unit based on the income approach, also known as the discounted cash flow method, which utilizes the present value of future expected cash flows to estimate the fair value. The future cash flows of the Crude Oil Logistics reporting unit were projected based upon estimates as of the test date of future revenues, operating expenses and cash outflows necessary to support these cash flows, including working capital and maintenance capital expenditures. We also considered expectations regarding: (i) the crude oil price environment as reflected in crude oil forward prices as of the test date, (ii) volumes based on historical information and estimates of future drilling and completion activity, as well as expectations for future demand recovery and (iii) estimated fixed and variable costs. The discounted cash flows for the Crude Oil Logistics reporting unit were based on five years of projected cash flows and we applied a discount rate and terminal multiple that we believe would be applied by a theoretical market participant in similar market transactions. Based on this test, we concluded that the fair value of the Crude Oil Logistics reporting unit exceeded its carrying value by approximately 18 %. Due to lower than expected operating results, it was decided that the goodwill within the Wholesale/Terminal reporting unit should be tested for impairment as of January 1, 2023. We estimated the fair value of the Wholesale/Terminal reporting unit based on the income approach, also known as the discounted cash flow method, which utilizes the present value of future expected cash flows to estimate the fair value. The future cash flows of the Wholesale/Terminal reporting unit were projected based upon estimates as of the test date of future revenues, operating expenses and cash outflows necessary to support these cash flows, including working capital and maintenance capital expenditures. We also considered expectations regarding: (i) the margins to be generated on product sold, (ii) estimated volumes based on historical information and estimates of future growth, (iii) renewal of certain customer contracts and (iv) estimated fixed and variable costs. The discounted cash flows for the Wholesale/Terminal reporting unit were based on five years of projected cash flows and we applied a discount rate and terminal multiple that we believe would be applied by a theoretical market participant in similar market transactions. Based on this test, we concluded that the fair value of the Wholesale/Terminal reporting unit exceeded its carrying value by approximately 5 %. Fiscal Year 2022 Goodwill Impairment Assessment We performed a qualitative assessment as of January 1, 2022 to determine whether it was more likely than not that the fair value of each reporting unit was greater than the carrying value of the reporting unit. Based on these qualitative assessments, we determined that the fair value of each of our reporting units was more likely than not greater than the carrying value of the reporting units as of January 1, 2022, with the exception of our Crude Oil Logistics reporting unit. See below for a further discussion of the testing. Due to lower than expected operating results, it was decided that the goodwill within the Crude Oil Logistics reporting unit should be tested for impairment as of January 1, 2022. We estimated the fair value of the Crude Oil Logistics reporting unit based on the income approach, also known as the discounted cash flow method, which utilizes the present value of future expected cash flows to estimate the fair value. The future cash flows of the Crude Oil Logistics reporting unit were projected based upon estimates as of the test date of future revenues, operating expenses and cash outflows necessary to support these cash flows, including working capital and maintenance capital expenditures. We also considered expectations regarding: (i) the crude oil price environment as reflected in crude oil forward prices as of the test date, (ii) volumes based on historical information and estimates of future drilling and completion activity, as well as expectations for future demand recovery and (iii) estimated fixed and variable costs. The discounted cash flows for the Crude Oil Logistics reporting unit were based on five years of projected cash flows and we applied a discount rate and terminal multiple that we believe would be applied by a theoretical market participant in similar market transactions. Based on this test, we concluded that the fair value of the Crude Oil Logistics reporting unit exceeded its carrying value by approximately 12.0 %. Fiscal Year 2021 Goodwill Impairment Assessment We performed a qualitative assessment as of January 1, 2021 to determine whether it was more likely than not that the fair value of each reporting unit was greater than the carrying value of the reporting unit. Based on these qualitative assessments, we determined that the fair value of each of our reporting units was more likely than not greater than the carrying value of the reporting units as of January 1, 2021, with the exception of our Water Solutions reporting unit, and our Crude Oil Logistics reporting unit, which was tested for impairment as of December 31, 2020. See below for a further discussion of the testing. Due to lower than expected disposal volumes as a result of a slower than expected recovery in oil production in the various basins in which our Water Solutions reporting unit operates and the completion of our annual budget process, it was decided that the goodwill within the Water Solutions reporting unit should be tested for impairment as of January 1, 2021. We F-19 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) estimated the fair value of our Water Solutions reporting unit based on the income approach, also known as the discounted cash flow method, which utilizes the present value of future expected cash flows to estimate the fair value. The future cash flows of the Water Solutions reporting unit were projected based upon estimates as of the test date of future revenues, operating expenses and cash outflows necessary to support these cash flows, including working capital and maintenance capital expenditures. We also considered expectations regarding: (i) the crude oil price environment as reflected in crude oil forward prices as of the test date, (ii) disposal volumes based on historical information and estimates of future drilling and completion activity, as well as expectations for future demand recovery and (iii) estimated fixed and variable costs. The discounted cash flows for the Water Solutions reporting unit were based on five years of projected cash flows and we applied a discount rate and terminal multiple that we believe would be applied by a theoretical market participant in similar market transactions. Based on this test, we concluded that the fair value of the Water Solutions reporting unit exceeded its carrying value by approximately 3.0 %. As discussed in Note 17, in December 2020, we reached a settlement in the Extraction Oil & Gas, Inc.(“Extraction”) bankruptcy case, which is expected to result in decreases in future cash flows for certain of our assets. Based on this aforementioned event, we concluded that a triggering event occurred, which required us to perform a quantitative impairment test as of December 31, 2020 for our Crude Oil Logistics reporting unit. We estimated the fair value of the Crude Oil Logistics reporting unit based on the income approach, also known as the discounted cash flow method, which utilizes the present value of future expected cash flows to estimate the fair value. The future cash flows of the Crude Oil Logistics reporting unit were projected based upon estimates as of the test date of future revenues, operating expenses and cash outflows necessary to support these cash flows, including working capital and maintenance capital expenditures. We also considered expectations regarding: (i) the crude oil price environment as reflected in crude oil forward prices as of the test date, (ii) volumes based on historical information and estimates of future drilling and completion activity, as well as expectations for future demand recovery and (iii) estimated fixed and variable costs. The discounted cash flows for the Crude Oil Logistics reporting unit were based on five years of projected cash flows and we applied a discount rate and terminal multiple that we believe would be applied by a theoretical market participant in similar market transactions. Based on this test, we concluded that the fair value of the Crude Oil Logistics reporting unit was less than its carrying value by approximately 17.0 %. During the three months ended December 31, 2020, in our Crude Oil Logistics reporting unit, we recorded a goodwill impairment charge of $ 237.8 million within loss on disposal or impairment of assets, net in our consolidated statement of operations. Note 6— Intangible Assets Our intangible assets consist of the following at the dates indicated: March 31, 2023 March 31, 2022 Description Weighted- Average Remaining Useful Life Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net (in years) (in thousands) Amortizable: Customer relationships 18.9 $ 1,196,468 $ ( 492,002 ) $ 704,466 $ 1,200,919 $ ( 436,837 ) $ 764,082 Customer commitments 21.3 192,000 ( 28,800 ) 163,200 192,000 ( 21,120 ) 170,880 Pipeline capacity rights 20.7 7,799 ( 2,427 ) 5,372 7,799 ( 2,167 ) 5,632 Rights-of-way and easements 30.8 94,875 ( 15,138 ) 79,737 91,664 ( 12,201 ) 79,463 Water rights 16.4 99,869 ( 26,453 ) 73,416 99,869 ( 20,404 ) 79,465 Executory contracts and other agreements 23.7 21,570 ( 5,037 ) 16,533 20,931 ( 3,014 ) 17,917 Non-compete agreements 0.1 1,100 ( 1,082 ) 18 7,000 ( 6,487 ) 513 Debt issuance costs (1) 2.9 25,592 ( 9,921 ) 15,671 22,202 ( 5,055 ) 17,147 Total amortizable 1,639,273 ( 580,860 ) 1,058,413 1,642,384 ( 507,285 ) 1,135,099 Non-amortizable: Trade names 255 255 255 255 Total $ 1,639,528 $ ( 580,860 ) $ 1,058,668 $ 1,642,639 $ ( 507,285 ) $ 1,135,354 (1) Includes debt issuance costs related to the ABL Facility. Debt issuance costs related to fixed-rate notes are reported as a reduction of the carrying amount of long-term debt. F-20 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) Write off of Intangible Assets For intangible assets other than debt issuance costs, we record (gains) losses from the sales of intangible assets and any write-downs in value due to impairment within loss on disposal or impairment of assets, net in our consolidated statement of operations. We record the write-off of debt issuance costs within gain (loss) on early extinguishment of liabilities, net in our consolidated statement of operations. During the year ended March 31, 2023, we recorded an impairment charge of $ 1.6 million against certain intangible assets related to an underperforming crude oil terminal. During the year ended March 31, 2022, we recorded the following: • A gain of $ 1.6 million related to the sale of certain intangible assets in our Water Solutions segment. • A loss of $ 0.1 million from the write-off of debt issuance costs related to the Sawtooth Caverns, LLC (“Sawtooth”) credit agreement which was paid off and terminated prior to us selling our ownership interest in Sawtooth (see Note 17). During the year ended March 31, 2021, we recorded the following: • An impairment charge of $ 145.8 million against the customer commitment intangible asset related to a transportation contract with Extraction that was rejected as part of Extraction’s bankruptcy. See Note 17 for a further discussion of Extraction’s bankruptcy and the impairment of the intangible asset. • An impairment charge of $ 39.2 million to write down the value of a customer relationship intangible asset as part of the write down in value of a larger asset group (see Note 4). • A $ 4.5 million write off of the debt issuance costs related to a former revolving credit facility which was repaid and terminated on February 4, 2021. • An impairment charge of $ 2.5 million to write down the value of the trade name as part of the write down of a larger asset group (see Note 4). Amortization expense is as follows for the periods indicated: Year Ended March 31, Recorded In 2023 2022 2021 (in thousands) Depreciation and amortization $ 77,492 $ 84,937 $ 127,023 Cost of sales 274 281 307 Interest expense 4,866 4,779 5,572 Operating expenses 247 247 247 Total $ 82,879 $ 90,244 $ 133,149 The following table summarizes expected amortization of our intangible assets at March 31, 2023 (in thousands): Year Ending March 31, 2024 $ 76,753 2025 68,509 2026 65,464 2027 60,158 2028 57,305 Thereafter 730,224 Total $ 1,058,413 F-21 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) Note 7— Long-Term Debt Our long-term debt consists of the following at the dates indicated: March 31, 2023 March 31, 2022 Face Amount Unamortized Debt Issuance Costs (1) Book Value Face Amount Unamortized Debt Issuance Costs (1) Book Value (in thousands) Senior secured notes: 7.500 % Notes due 2026 (“2026 Senior Secured Notes”) $ 2,050,000 $ ( 26,009 ) $ 2,023,991 $ 2,050,000 $ ( 35,140 ) $ 2,014,860 Asset-based revolving credit facility (“ABL Facility”) 138,000 138,000 116,000 116,000 Senior unsecured notes: 7.500 % Notes due 2023 (“2023 Notes”) — — — 475,702 ( 1,873 ) 473,829 6.125 % Notes due 2025 (“2025 Notes”) 380,020 ( 1,612 ) 378,408 380,020 ( 2,456 ) 377,564 7.500 % Notes due 2026 (“2026 Notes”) 319,902 ( 2,496 ) 317,406 332,402 ( 3,460 ) 328,942 Other long-term debt — — — 41,705 ( 59 ) 41,646 2,887,922 ( 30,117 ) 2,857,805 3,395,829 ( 42,988 ) 3,352,841 Less: Current maturities — — — 2,378 — 2,378 Long-term debt $ 2,887,922 $ ( 30,117 ) $ 2,857,805 $ 3,393,451 $ ( 42,988 ) $ 3,350,463 (1) Debt issuance costs related to the ABL Facility are reported within intangible assets, rather than as a reduction of the carrying amount of long-term debt. 2026 Senior Secured Notes On February 4, 2021, we closed on our private offering of $ 2.05 billion of 7.5 % 2026 Senior Secured Notes. Interest is payable on February 1 and August 1 of each year, beginning on August 1, 2021. The 2026 Senior Secured Notes mature on February 1, 2026. The 2026 Senior Secured Notes were issued pursuant to an indenture dated February 4, 2021 (the “Indenture”). The 2026 Senior Secured Notes are secured by first priority liens on substantially all of our assets other than our accounts receivable, inventory, pledged deposit accounts, cash and cash equivalents, renewable energy tax credits and related assets and second priority liens in our accounts receivable, inventory, pledged deposit accounts, cash and cash equivalents, renewable energy tax credits and related assets. The Indenture contains covenants that, among other things, limit our ability to: pay distributions or make other restricted payments or repurchase stock; incur or guarantee additional indebtedness or issue disqualified stock or certain preferred stock; make certain investments; create or incur liens; sell assets; enter into restrictions affecting the ability of restricted subsidiaries to make distributions, make loans or advances or transfer assets to the guarantors (including the Partnership); enter into certain transactions with our affiliates; designate restricted subsidiaries as unrestricted subsidiaries; and merge, consolidate or transfer or sell all or substantially all of our assets. The Indenture specifically restricts our ability to pay distributions until our total leverage ratio (as defined in the Indenture) for the most recently ended four full fiscal quarters at the time of the distribution is not greater than 4.75 to 1.00. These covenants are subject to a number of important exceptions and qualifications. We have an option to redeem all or a portion of the 2026 Senior Secured Notes at any time on or after February 1, 2023 at fixed redemption prices contained within the Indenture. If we experience certain kinds of change of control triggering events, we will be required to offer to repurchase the 2026 Senior Secured Notes at 101% of the aggregate principal amount of the 2026 Senior Secured Notes repurchased plus accrued and unpaid interest on the 2026 Senior Secured Notes repurchased to, but not including, the date of purchase. F-22 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) Compliance At March 31, 2023, we were in compliance with the covenants under the 2026 Senior Secured Notes indenture. ABL Facility On February 4, 2021, we closed on our ABL Facility that is subject to a borrowing base, which includes a sub-limit for letters of credit. The initial commitments under the ABL Facility totaled $ 500.0 million and the sub-limit for letters of credit was $ 200.0 million. On April 13, 2022, we amended the ABL Facility to increase the commitments to $ 600.0 million under the accordion feature within the ABL Facility. As part of the amendment, we agreed to reduce the commitments back to $ 500.0 million on or before March 31, 2023. In addition, the sub-limit for letters of credit was increased to $ 250.0 million and the LIBOR benchmark was replaced with an adjusted forward-looking term rate based on the secured overnight financing rate (“SOFR”) as the interest rate benchmark. On February 16, 2023, we amended the ABL Facility to extend the maturity date of the additional $ 100.0 million of commitments through the remaining term of the ABL Facility as discussed below. The ABL Facility is secured by a lien on substantially all of our assets, including among other things, a first priority lien on our accounts receivable, inventory, pledged deposit accounts, cash and cash equivalents, renewable energy tax credits and related assets and a second priority lien on all of our other assets. At March 31, 2023, $ 138.0 million had been borrowed under the ABL Facility and we had letters of credit outstanding of approximately $ 152.0 million. The ABL Facility is scheduled to mature at the earliest of (a) February 4, 2026 or (b) 91 days prior to the earliest maturity date in respect to any of our indebtedness in an aggregate principal amount of $50.0 million or greater, if such indebtedness is outstanding at such time, subject to certain exceptions. All borrowings under the ABL Facility bear interest at our option, at either (i) a LIBOR-based rate (with such customary provisions under the ABL Facility providing for the replacement of LIBOR with any successor rate such rate having been determined to be the SOFR or (ii) an alternate base rate, in each case plus an applicable borrowing margin based on our fixed charge coverage ratio (as defined in the ABL Facility). The applicable margin for alternate base rate loans varies from 1.50% to 2.00% and the applicable margin for LIBOR/SOFR-based loans varies from 2.50% to 3.00%. In addition, a commitment fee will be charged and payable quarterly in arrears based on the average daily unused portion of the revolving commitments under the ABL Facility. Such commitment fee will be 0.50% per year, subject to a reduction to 0.375% in the event our fixed charge coverage ratio is greater than or equal to 1.75 to 1.00. At March 31, 2023, the borrowings under the ABL Facility had a weighted average interest rate of 8.70 % calculated as the prime rate of 8.00 % plus a margin of 1.50 % on the alternate base rate borrowings and the weighted average SOFR of 4.80 % plus a margin of 2.50 % for the SOFR borrowings. On March 31, 2023, the interest rate in effect on letters of credit was 2.50 %. The ABL Facility contains various affirmative and negative covenants, including financial reporting requirements and limitations on indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of assets, distributions and other restricted payments, investments (including acquisitions) and transactions with affiliates. The ABL Facility contains, as the only financial covenant, a fixed charge coverage ratio that is tested based on the financial statements for the most recently ended fiscal quarter upon the occurrence and during the continuation of a Cash Dominion Event (as defined in the ABL Facility). At March 31, 2023, no Cash Dominion Event had occurred. Compliance At March 31, 2023, we were in compliance with the covenants under the ABL Facility. Senior Unsecured Notes The senior unsecured notes include the 2023 Notes, 2025 Notes and the 2026 Notes (collectively, the “Senior Unsecured Notes”). The Partnership and NGL Energy Finance Corp. are co-issuers of the Senior Unsecured Notes, and the obligations under the Senior Unsecured Notes are fully and unconditionally guaranteed by certain of our existing and future restricted subsidiaries that incur or guarantee indebtedness under certain of our other indebtedness, including the ABL Facility. The indentures governing the Senior Unsecured Notes contain various customary covenants, including certain covenants that govern our ability to (i) pay distributions on, purchase or redeem our common equity or purchase or redeem our subordinated debt, (ii) incur or guarantee additional indebtedness or issue preferred units, (iii) create or incur certain liens, (iv) enter into agreements F-23 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) that restrict distributions or other payments from our restricted subsidiaries to us, (v) consolidate, merge or transfer all or substantially all of our assets, and (vi) engage in transactions with affiliates. Our obligations under the Senior Unsecured Notes may be accelerated following certain events of default (subject to applicable cure periods), including, without limitation, (i) the failure to pay principal or interest when due, (ii) experiencing an event of default on certain other debt agreements, or (iii) certain events of bankruptcy or insolvency. Issuances On October 24, 2016, we issued $ 700.0 million of 7.5 % 2023 Notes. Interest is payable on May 1 and November 1 of each year. We redeemed all of the remaining outstanding 2023 Notes on March 31, 2023 (see “Redemptions” below). On February 22, 2017, we issued $ 500.0 million of 6.125 % 2025 Notes. Interest is payable on March 1 and September 1 of each year. The 2025 Notes mature on March 1, 2025. As of March 1, 2023, we have the right to redeem all or a portion of the outstanding 2025 Notes at 100% of the principal amount plus accrued and unpaid interest. On April 9, 2019, we issued $ 450.0 million of 7.5 % 2026 Notes in a private placement. Interest is payable on April 15 and October 15 of each year. The 2026 Notes mature on April 15, 2026. As of April 15, 2024, we will have the right to redeem all or a portion of the outstanding 2026 Notes at 100% of the principal amount plus accrued and unpaid interest. Repurchases The following table summarizes repurchases of Senior Unsecured Notes for the periods indicated: Year Ended March 31, 2023 2022 2021 (in thousands) 2023 Notes Notes repurchased $ 272,316 $ 79,549 $ 52,072 Cash paid (excluding payments of accrued interest) $ 265,127 $ 77,847 $ 33,566 Gain on early extinguishment of debt (1) $ 6,555 $ 1,318 $ 18,096 2025 Notes Notes repurchased $ — $ — $ 7,300 Cash paid (excluding payments of accrued interest) $ — $ — $ 3,647 Gain on early extinguishment of debt (2) $ — $ — $ 3,575 2026 Notes Notes repurchased $ 12,500 $ 6,000 $ 111,598 Cash paid (excluding payments of accrued interest) $ 10,789 $ 5,320 $ 78,583 Gain on early extinguishment of debt (3) $ 1,611 $ 610 $ 31,463 (1) Gain on early extinguishment of debt for the 2023 Notes during the years ended March 31, 2023, 2022 and 2021 is inclusive of the write off of debt issuance costs of $ 0.6 million, $ 0.4 million and $ 0.4 million respectively. The gain is reported within gain (loss) on early extinguishment of liabilities, net within our consolidated statements of operations. (2) Gain on early extinguishment of debt for the 2025 Notes during the year ended March 31, 2021 is inclusive of the write off of debt issuance costs of $ 0.1 million. The gain is reported within gain (loss) on early extinguishment of liabilities, net within our consolidated statement of operations. (3) Gain on early extinguishment of debt for the 2026 Notes during the years ended March 31, 2023, 2022 and 2021 is inclusive of the write off of debt issuance costs of $ 0.1 million, $ 0.1 million and $ 1.6 million respectively. The gain is reported within gain (loss) on early extinguishment of liabilities, net within our consolidated statements of operations. Subsequent to March 31, 2023, we have repurchased $ 99.3 million of the 2025 Notes. F-24 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) Redemptions The following table summarizes redemptions of Senior Unsecured Notes for the year ended March 31, 2023 (in thousands): 2023 Notes (1) Notes redeemed $ 203,386 Cash paid (excluding payments of accrued interest) $ 203,386 Loss on early extinguishment of debt $ 367 (1) On March 31, 2023, we redeemed all of the remaining outstanding 2023 Notes. Loss on the early extinguishment of debt for the 2023 Notes during the year ended March 31, 2023 is inclusive of the write off of debt issuance costs of $ 0.4 million. The loss is reported within gain (loss) on early extinguishment of liabilities, net within our consolidated statement of operations . Compliance At March 31, 2023, we were in compliance with the covenants under all of the Senior Unsecured Notes indentures. Other Long-Term Debt The Sawtooth credit agreement was paid off and terminated prior to us selling our ownership interest in Sawtooth on June 18, 2021 (see Note 17). On October 29, 2020, we entered into an equipment loan for $ 45.0 million which bears interest at a rate of 8.6 % and is secured by certain of our barges and towboats. On March 30, 2023, due to the sale of our marine assets (see Note 17), we paid off the outstanding balance of $ 39.3 million on our equipment loan. In addition, we paid a prepayment premium of $ 1.6 million and wrote off debt issuance costs of less than $ 0.1 million which are reported within gain (loss) on early extinguishment of liabilities, net within our consolidated statement of operations. Debt Maturity Schedule The scheduled maturities of our long-term debt are as follows at March 31, 2023: Year Ending March 31, 2026 Senior Secured Notes ABL Facility Senior Unsecured Notes Total (in thousands) 2024 $ — $ — $ — $ — 2025 — — 380,020 380,020 2026 2,050,000 138,000 — 2,188,000 2027 — — 319,902 319,902 Total $ 2,050,000 $ 138,000 $ 699,922 $ 2,887,922 Amortization of Debt Issuance Costs Amortization expense for debt issuance costs related to long-term debt was $ 11.9 million, $ 12.2 million and $ 7.8 million during the years ended March 31, 2023, 2022 and 2021, respectively. The following table summarizes expected amortization of debt issuance costs at March 31, 2023 (in thousands): Year Ending March 31, 2024 $ 10,842 2025 10,772 2026 8,471 2027 32 Total $ 30,117 F-25 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) Note 8— Commitments and Contingencies Legal Contingencies In August 2015, LCT Capital, LLC (“LCT”) filed a lawsuit against the GP and the Partnership seeking payment for investment banking services relating to the purchase of TransMontaigne Inc. and related assets in July 2014. After pre-trial rulings, LCT was limited to pursuing claims of (i) quantum meruit (the value of the services rendered by LCT) and (ii) fraudulent misrepresentation against the defendants. Following a jury trial conducted in Delaware state court from July 23, 2018 through August 1, 2018, the jury returned a verdict consisting of an award of $ 4.0 million for quantum meruit and $ 29.0 million for fraudulent misrepresentation, subject to statutory interest. On December 5, 2019, in response to the defendants’ post-trial motion, the Court issued an Order overturning the jury’s damages award and ordering the case to be set for a damages-only trial (the “December 5th Order”). Both parties filed applications with the trial court asking the trial court to certify the December 5th Order for interlocutory, immediate review by the Appellate Court. On January 7, 2020, the Supreme Court of Delaware (“Supreme Court”) entered an Order accepting an interlocutory appeal of various issues relating to both the quantum meruit and fraudulent misrepresentation verdicts. The Supreme Court heard oral arguments of the parties on November 4, 2020, took the matters presented under advisement and on January 28, 2021, issued a ruling that (a) LCT is not entitled to “benefit-of-the-bargain” damages on its fraud claim; (b) LCT is not entitled to receive fraudulent misrepresentation damages separate from its quantum meruit damages; (c) the trial court abused its discretion when it ordered a new trial on damages relating to LCT’s claim of fraudulent misrepresentation; and (d) the trial court properly ordered a new trial on LCT’s claim of quantum meruit damages. The re-trial of the quantum meruit claim was conducted in Delaware state court from February 6, 2023 through February 15, 2023 and resulted in the jury returning a verdict consisting of an award of $ 36.0 million, subject to statutory interest, as applicable. The GP and the Partnership contend that the jury verdict is not supportable by controlling law or the evidentiary record; and plan to file post-verdict motions as appropriate before the trial court, and, will file an appeal to the Delaware Supreme Court. Any allocation of the ultimate verdict award, if any, between the GP and the Partnership will be made by the board of directors of our GP once all information is available to it and after any post-trial and/or any appellate process has concluded and the verdict is final as a matter of law. As of March 31, 2023, we have accrued $ 2.5 million related to this matter. The Partnership is a party defendant to a purported class action complaint filed in the federal court in the Northern District of Oklahoma styled Gary R. Underwood, Successor Trustee for the James L. Price Revocable Living Trust, on behalf of the Trust and all others similarly situated v. NGL Energy Partners LP , Case No. 4:21-cv-00135-CVE-SH. This case seeks class certification on behalf of owners who allege the Partnership’s Crude Oil Logistics group violated Oklahoma’s Production Revenue Standards Act when it failed to include statutory interest on proceeds payments it made to certain mineral owners and to state unclaimed property divisions for oil purchased from certain Oklahoma wells. A substantial portion of the statutory interest claimed to be owed in the lawsuit related to suspended proceeds we inherited from our predecessors and remitted to various state unclaimed property divisions in 2016. With no admission of liability or wrongdoing, but only to avoid the expense and uncertainty of future litigation, the Partnership entered into a settlement agreement in this case to resolve all claims made against it by the plaintiff and the proposed class. We have agreed to pay the sum of approximately $ 8.4 million to the plaintiff and the proposed class, and we accrued the amount as of March 31, 2023. On April 3, 2023, we paid this money into escrow. The settlement agreement is subject to court approval and a full fairness hearing will be held in the coming months. We are party to various other claims, legal actions, and complaints arising in the ordinary course of business. In the opinion of our management, the ultimate resolution of these claims, legal actions, and complaints, after consideration of amounts accrued, insurance coverage, and other arrangements, is not expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows. However, the outcome of such matters is inherently uncertain, and estimates of our liabilities may change materially as circumstances develop. Environmental Matters At March 31, 2023, we have an environmental liability, measured on an undiscounted basis, of $ 1.5 million, which is recorded within accrued expenses and other payables in our consolidated balance sheet. Our operations are subject to extensive federal, state, and local environmental laws and regulations. Although we believe our operations are in substantial compliance with applicable environmental laws and regulations, risks of additional costs and liabilities are inherent in our business, and there can be no assurance that we will not incur significant costs. Moreover, it is possible that other developments, such as increasingly stringent environmental laws, regulations and enforcement policies thereunder, and claims for damages to property or persons resulting from the operations, could result in substantial costs. Accordingly, we have adopted policies, practices, and procedures in the areas of pollution control, product safety, occupational health, and the handling, storage, use, and disposal of hazardous materials designed to prevent material environmental or other damage, and to limit the financial liability that could result from such events. However, some risk of environmental or other damage is inherent in our business. F-26 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) Asset Retirement Obligations We have contractual and regulatory obligations at certain facilities for which we have to perform remediation, dismantlement or removal activities when the assets are retired. Our liability for asset retirement obligations is discounted to present value. To calculate the liability, we make estimates and assumptions about the retirement cost and the timing of retirement. Changes in our assumptions and estimates may occur as a result of the passage of time and the occurrence of future events. The following table summarizes changes in our asset retirement obligation, which is reported within other noncurrent liabilities in our consolidated balance sheets (in thousands): Balance at March 31, 2021 $ 28,079 Liabilities incurred 1,865 Liabilities associated with disposed assets (1) ( 1,716 ) Accretion expense 1,713 Balance at March 31, 2022 29,941 Liabilities incurred 3,880 Liabilities associated with disposed assets (2) ( 1,493 ) Liabilities settled ( 391 ) Accretion expense 3,226 Balance at March 31, 2023 $ 35,163 (1) Relates primarily to the disposition of Sawtooth (see Note 17) as well as the sale of certain water disposal wells. (2) Relates to the sale of 17 saltwater disposal wells and other long-lived assets within our Water Solutions business. In addition to the obligations described above, we may be obligated to remove facilities or perform other remediation upon retirement of certain other assets. However, the fair value of the asset retirement obligation cannot currently be reasonably estimated because the settlement dates are indeterminable. We will record an asset retirement obligation for these assets in the periods in which settlement dates are reasonably determinable. Pipeline Capacity Agreements We have noncancelable agreements with crude oil pipeline operators, which guarantee us minimum monthly shipping capacity on their pipelines. As a result, we are required to pay the minimum shipping fees if actual shipments are less than our allotted capacity. Under certain agreements we have the ability to recover minimum shipping fees previously paid if our shipping volumes exceed the minimum monthly shipping commitment during each month remaining under the agreement, with some contracts containing provisions that allow us to continue shipping up to six months after the maturity date of the contract in order to recapture previously paid minimum shipping delinquency fees. We currently have an asset recorded in prepaid expenses and other current assets and in other noncurrent assets in our consolidated balance sheet for minimum shipping fees paid in both the current and previous periods that are expected to be recovered in future periods by exceeding the minimum monthly volumes (see Note 2). On March 1, 2023, we assigned our commitment with one of the pipeline operators to a third-party. Along with the assignment, they purchased our linefill in the pipeline for $ 16.6 million. The following table summarizes future minimum throughput payments under these agreements at March 31, 2023 (in thousands): Year Ending March 31, 2024 $ 26,857 2025 26,784 Total $ 53,641 Sales and Purchase Contracts We have entered into product sales and purchase contracts for which we expect the parties to physically settle and deliver the inventory in future periods. F-27 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) At March 31, 2023, we had the following commodity purchase commitments: Crude Oil (1) Natural Gas Liquids Value Volume (in barrels) Value Volume (in gallons) (in thousands) Fixed-Price Commodity Purchase Commitments: 2024 $ 74,933 1,085 $ 68,849 75,214 2025 — — 2,829 3,486 2026 — — 1,982 2,730 2027 — — 1,808 2,520 Total $ 74,933 1,085 $ 75,468 83,950 Index-Price Commodity Purchase Commitments: 2024 $ 4,306,093 60,542 $ 905,626 966,567 2025 1,711,827 25,557 10,897 11,600 2026 633,722 10,410 — — Total $ 6,651,642 96,509 $ 916,523 978,167 (1) Our crude oil index-price purchase commitments exceed our crude oil index-price sales commitments (presented below) due primarily to our long-term purchase commitments for crude oil that we purchase and ship on the Grand Mesa Pipeline. As these purchase commitments are deliver-or-pay contracts, whereby our counterparty is required to pay us for any volumes not delivered, we have not entered into corresponding long-term sales contracts for volumes we may not receive. At March 31, 2023, we had the following commodity sale commitments: Crude Oil Natural Gas Liquids Value Volume (in barrels) Value Volume (in gallons) (in thousands) Fixed-Price Commodity Sale Commitments: 2024 $ 75,694 1,085 $ 91,903 89,900 2025 — — 5,071 5,841 2026 — — 3,183 4,058 2027 — — 2,064 2,805 Total $ 75,694 1,085 $ 102,221 102,604 Index-Price Commodity Sale Commitments: 2024 $ 2,263,615 41,737 $ 369,134 356,181 2025 523,647 13,002 822 826 2026 26,403 390 — — Total $ 2,813,665 55,129 $ 369,956 357,007 We account for the contracts shown in the tables above using the normal purchase and normal sale election. Under this accounting policy election, we do not record the physical contracts at fair value at each balance sheet date; instead, we record the purchase or sale at the contracted value once the delivery occurs. Contracts in the tables above may have offsetting derivative contracts (described in Note 10) or inventory positions (described in Note 2). Certain other forward purchase and sale contracts do not qualify for the normal purchase and normal sale election. These contracts are recorded at fair value in our consolidated balance sheet and are not included in the tables above. These contracts are included in the derivative disclosures in Note 10, and represent $ 22.4 million of our prepaid expenses and other current assets and $ 15.2 million of our accrued expenses and other payables at March 31, 2023. F-28 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) Other Commitments We have noncancelable agreements for product storage, railcar spurs and real estate. The following table summarizes future minimum payments under these agreements at March 31, 2023 (in thousands): Year Ending March 31, 2024 $ 10,286 2025 3,397 2026 1,349 2027 1,335 2028 1,288 Thereafter 4,437 Total $ 22,092 As part of the acquisition of Hillstone Environmental Partners, LLC, we assumed an obligation to pay a quarterly subsidy payment in the event that specified volumetric thresholds are not exceeded at a third-party facility (the “Subsidy Agreement”). During the years ended March 31, 2023, 2022 and 2021, we recorded $ 1.3 million, $ 2.1 million and $ 2.6 million, respectively, within operating expense in our consolidated statements of operations. The Subsidy Agreement expired on December 31, 2022. Note 9— Equity Partnership Equity The Partnership’s equity consists of a 0.1 % GP interest and a 99.9 % limited partner interest, which consists of common units. Our GP has the right, but not the obligation, to contribute a proportionate amount of capital to the Partnership to maintain its 0.1 % GP interest. Our GP is not required to guarantee or pay any of our debts or obligations. As of March 31, 2023, we owned 8.69 % of our GP. General Partner Contributions In connection with the issuance of common units for the vesting of restricted units during the years ended March 31, 2023, 2022 and 2021, we issued 1,232 , 1,103 and 823 , respectively, notional units to our GP for less than $ 0.1 million in each of the years, in order to maintain its 0.1 % interest in the Partnership. Common Unit Repurchase Program On August 30, 2019, the board of directors of our GP authorized a common unit repurchase program, under which we may repurchase up to $ 150.0 million of our outstanding common units through September 30, 2021 from time to time in the open market or in other privately negotiated transactions. We did not repurchase any units under this plan and this plan has expired. Suspension of Common Unit and Preferred Unit Distributions The board of directors of our GP temporarily suspended all distributions (common unit distributions which began with the quarter ended December 31, 2020 and preferred unit distributions which began with the quarter ended March 31, 2021) in order to deleverage our balance sheet and meet the financial performance ratios set within the Indenture of the 2026 Senior Secured Notes, as discussed further in Note 7. F-29 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) Our Distributions The following table summarizes distributions declared on our common units during the year ended March 31, 2021: Date Declared Record Date Payment Date Amount Per Unit Amount Paid to Limited Partners Amount Paid to General Partner (in thousands) (in thousands) April 27, 2020 May 7, 2020 May 15, 2020 $ 0.2000 $ 25,754 $ 26 July 23, 2020 August 6, 2020 August 14, 2020 $ 0.2000 $ 25,754 $ 26 October 27, 2020 November 6, 2020 November 13, 2020 $ 0.1000 $ 12,877 $ 13 Class B Preferred Units As of March 31, 2023, there were 12,585,642 of our Class B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units (“Class B Preferred Units”) outstanding. The following table summarizes distributions declared on our Class B Preferred Units for the year ended March 31, 2021: Date Declared Record Date Payment Date Amount Per Unit Amount Paid to Class B Preferred Unitholders (in thousands) March 16, 2020 March 31, 2020 April 15, 2020 $ 0.5625 $ 7,079 June 15, 2020 June 30, 2020 July 15, 2020 $ 0.5625 $ 7,079 September 15, 2020 September 30, 2020 October 15, 2020 $ 0.5625 $ 7,079 December 17, 2020 January 1, 2021 January 15, 2021 $ 0.5625 $ 7,079 On July 1, 2022, the Class B Preferred Units distribution rate changed from a fixed rate of 9.00% to a floating rate of the three-month LIBOR interest rate (4.77% for the quarter ended March 31, 2023) plus a spread of 7.213%. For the quarter ended March 31, 2023, we did not declare or pay distributions to the holders of the Class B Preferred Units, thus the quarterly distribution for March 31, 2023 is $ 0.7488 and the cumulative distributions since suspension for each Class B Preferred unit is $ 5.4029 . In addition, the amount of cumulative but unpaid distribution shall continue to accumulate at the then applicable rate until all unpaid distributions have been paid in full. The total amount due as of March 31, 2023 is $ 74.3 million. Class C Preferred Units As of March 31, 2023, there were 1,800,000 of our Class C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units (“Class C Preferred Units”) outstanding. The following table summarizes distributions declared on our Class C Preferred Units for the year ended March 31, 2021: Amount Paid to Class C Date Declared Record Date Payment Date Amount Per Unit Preferred Unitholders (in thousands) March 16, 2020 March 31, 2020 April 15, 2020 $ 0.6016 $ 1,083 June 15, 2020 June 30, 2020 July 15, 2020 $ 0.6016 $ 1,083 September 15, 2020 September 30, 2020 October 15, 2020 $ 0.6016 $ 1,083 December 17, 2020 January 1, 2021 January 15, 2021 $ 0.6016 $ 1,083 The current distribution rate for the Class C Preferred Units is 9.625% per year of the $25.00 liquidation preference per unit (equal to $2.41 per unit per year). For the quarter ended March 31, 2023, we did not declare or pay distributions to the holders of the Class C Preferred Units, thus the quarterly distribution for each Class C Preferred Unit is $ 0.6016 and the cumulative distribution since suspension for each Class C Preferred Unit is $ 5.4141 . In addition, the amount of cumulative but unpaid distributions shall continue to accumulate at the then applicable rate until all unpaid distributions have been paid in full. The total amount due as of March 31, 2023 is $ 10.7 million. F-30 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) On and after April 15, 2024, distributions on the Class C Preferred Units will accumulate at a percentage of the $25.00 liquidation preference equal to the applicable three-month LIBOR interest rate (or alternative rate as determined in accordance with the amended and restated limited partnership agreement (the “Partnership Agreement”)) plus a spread of 7.384%. Class D Preferred Units As of March 31, 2023, there were 600,000 preferred units (“Class D Preferred Units”) and warrants exercisable to purchase an aggregate of 25,500,000 common units outstanding. The following table summarizes the outstanding warrants at March 31, 2023: Issuance Date and Description Number of Warrants Exercise Price July 2, 2019 Premium warrants 10,000,000 $ 17.45 Par warrants 7,000,000 $ 14.54 October 31, 2019 Premium warrants 5,000,000 $ 16.28 Par warrants 3,500,000 $ 13.56 The warrants may be exercised from and after the first anniversary of the date of issuance. Unexercised warrants will expire on the tenth anniversary of the date of issuance. The warrants will not participate in cash distributions. Upon a change of control, all unvested warrants shall immediately vest and be exercisable in full. The following table summarizes cash distributions declared on our Class D Preferred Units for the year ended March 31, 2021: Amount Paid to Class D Date Declared Record Date Payment Date Amount Per Unit Preferred Unitholders (in thousands) April 27, 2020 May 7, 2020 May 15, 2020 $ 11.25 $ 6,868 July 23, 2020 August 6, 2020 August 14, 2020 $ 11.25 $ 6,946 October 27, 2020 November 6, 2020 November 13, 2020 $ 26.01 $ 15,608 January 20, 2021 February 5, 2021 February 12, 2021 $ 26.01 $ 15,608 The distributions for the quarters ended September 30, 2020 and December 31, 2020 include a 1.0 % rate increase due to us exceeding the adjusted total leverage ratio, as defined within the Partnership Agreement. The distributions paid in cash for the three months ended June 30, 2020 of $ 6.9 million represented 50 % of the Class D Preferred Units distributions amount, as represented in the table above. In accordance with the terms of our Partnership Agreement, the value of each Class D Preferred Unit automatically increased by the non-cash accretion which was approximately $ 6.9 million in the aggregate with respect to the distribution for the three months ended June 30, 2020. The current distribution rate for the Class D Preferred Units increased on July 1, 2022 from 9.00% to 10.00% per year per unit (equal to $100.00 per every $1,000 in unit value per year), and includes an additional 1.50% rate increase due to us exceeding the adjusted total leverage ratio and due to a Class D distribution payment default, as defined within the Partnership Agreement. For the quarter ended March 31, 2023, we did not declare or pay distributions to the holders of the Class D Preferred Units, thus the average quarterly distribution at March 31, 2023 is $ 29.92 and the average cumulative distribution since suspension for each Class D Preferred unit is $ 252.34 . In addition, the amount of cumulative but unpaid distributions shall continue to accumulate at the then applicable rate until all unpaid distributions have been paid in full. The total amount due as of March 31, 2023 is $ 167.7 million. On or after July 1, 2024, the holders of our Class D Preferred Units can elect, from time to time, for the distributions to be calculated based on a floating rate equal to the applicable three-month LIBOR interest rate (or alternative rate as determined in the Partnership Agreement) plus a spread of 7.00% (“Class D Variable Rate”, as defined in the Partnership Agreement). Each Class D Variable Rate election shall be effective for at least four quarters following such election. At any time after July 2, 2019 (the “Closing Date”), the Partnership shall have the right to redeem all of the outstanding Class D Preferred Units at a price per Class D Preferred Unit equal to the sum of the then-unpaid accumulations with respect to such Class D Preferred Unit and the greater of either the applicable multiple on invested capital or the applicable F-31 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) redemption price based on an applicable internal rate of return, as more fully described in the Partnership Agreement. At any time on or after the eighth anniversary of the Closing Date, each Class D Preferred Unitholder will have the right to require the Partnership to redeem on a date not prior to the 180th day after such anniversary all or a portion of the Class D Preferred Units then held by such preferred unitholder for the then-applicable redemption price, which may be paid in cash or, at the Partnership’s election, a combination of cash and a number of common units not to exceed one-half of the aggregate then- applicable redemption price, as more fully described in the Partnership Agreement. Upon a Class D Change of Control (as defined in the Partnership Agreement), each Class D Preferred Unitholder will have the right to require the Partnership to redeem the Class D Preferred Units then held by such Preferred Unitholder at a price per Class D Preferred Unit equal to the applicable redemption price. The Class D Preferred Units generally will not have any voting rights, except with respect to certain matters which require the vote of the Class D Preferred Units. The Class D Preferred Units generally do not have any voting rights, except that the Class D Preferred Units shall be entitled to vote as a separate class on any matter on which unitholders are entitled to vote that adversely affects the rights, powers, privileges or preferences of the Class D Preferred Units in relation to other classes of Partnership Interests (as defined in the Partnership Agreement) or as required by law. The consent of a majority of the then-outstanding Class D Preferred Units, with one vote per Class D Preferred Unit, shall be required to approve any matter for which the preferred unitholders are entitled to vote as a separate class or the consent of the representative of the Class D Preferred Unitholders, as applicable. Amended and Restated Partnership Agreement On February 4, 2021, NGL Energy Holdings LLC executed the First Amendment to the Seventh Amended and Restated Agreement of Limited Partnership for the purpose of amending certain consent rights in relation to the Class D Preferred Units. Equity-Based Incentive Compensation Our GP adopted a long-term incentive plan (“LTIP”), which allowed for the issuance of equity-based compensation. Our GP granted certain restricted units to employees and directors, which vest in tranches, subject to the continued service of the recipients through the vesting date (the “Service Awards”). The Service Awards may also vest upon a change of control, at the discretion of the board of directors of our GP. No distributions accrue to or are paid on the Service Awards during the vesting period. The LTIP expired on May 10, 2021. The following table summarizes the Service Award activity during the year ended March 31, 2023: Weighted-Average Grant Date Number of Fair Value Units Per Unit Unvested Service Award units at March 31, 2022 2,188,800 $ 2.15 Units vested and issued ( 1,287,075 ) $ 2.15 Units forfeited ( 273,750 ) $ 2.15 Unvested Service Award units at March 31, 2023 627,975 $ 2.15 There were no units granted for the year ended March 31, 2023. The weighted-average grant prices for the years ended March 31, 2022 and 2021 were $ 2.15 . In connection with the vesting of certain Service Awards during the year ended March 31, 2023, 55,702 of the newly-vested common units were surrendered by employees in satisfaction of $ 0.1 million of employee withholding taxes paid by the Partnership. Pursuant to the expiration of the LTIP discussed below, those surrendered units are not available for future grants. As the LTIP expired on May 10, 2021, we had no common units available for grant during the year ended March 31, 2023. As of March 31, 2023, there are 627,975 unvested Service Award units which are expected to vest during the fiscal year ending March 31, 2024. Also, any current unvested Service Awards that are forfeited or canceled will not be available for future grants. Service Awards are valued at the average of the high/low sales price as of the grant date less the present value of the expected distribution stream over the vesting period using a risk-free interest rate. We record the expense for each Service F-32 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) Award on a straight-line basis over the requisite period for the entire award (that is, over the requisite service period of the last separately vesting portion of the award), ensuring that the amount of compensation cost recognized at any date at least equals the portion of the grant date value of the award that is vested at that date. During the years ended March 31, 2023, 2022 and 2021, we recorded compensation expense related to Service Award units of $ 2.7 million, $ 3.3 million and $ 4.7 million, respectively. For the unvested Service Award units at March 31, 2023, we had estimated future expense of $ 1.1 million which we expect to record during the fiscal year ending March 31, 2024. Note 10— Fair Value of Financial Instruments Our cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and other current assets and liabilities (excluding derivative instruments) are carried at amounts which reasonably approximate their fair values due to their short-term nature. Commodity Derivatives The following table summarizes the estimated fair values of our commodity derivative assets and liabilities reported in our consolidated balance sheet at the dates indicated: March 31, 2023 March 31, 2022 Derivative Assets Derivative Liabilities Derivative Assets Derivative Liabilities (in thousands) Level 1 measurements $ 63,553 $ ( 6,043 ) $ 73,353 $ ( 47,585 ) Level 2 measurements 25,128 ( 15,827 ) 51,968 ( 27,372 ) 88,681 ( 21,870 ) 125,321 ( 74,957 ) Netting of counterparty contracts (1) ( 6,670 ) 6,670 ( 47,585 ) 47,585 Net cash collateral (held) provided ( 47,686 ) ( 114 ) 839 — Commodity derivatives $ 34,325 $ ( 15,314 ) $ 78,575 $ ( 27,372 ) (1) Relates to commodity derivative assets and liabilities that are expected to be net settled on an exchange or through a master netting arrangement with the counterparty. Our physical contracts that do not qualify as normal purchase normal sale transactions are not subject to such master netting arrangements. The following table summarizes the accounts that include our commodity derivative assets and liabilities in our consolidated balance sheets at the dates indicated: March 31, 2023 2022 (in thousands) Prepaid expenses and other current assets $ 33,875 $ 78,575 Other noncurrent assets 450 — Accrued expenses and other payables ( 14,752 ) ( 27,108 ) Other noncurrent liabilities ( 562 ) ( 264 ) Net commodity derivative asset $ 19,011 $ 51,203 F-33 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) The following table summarizes our open commodity derivative contract positions at the dates indicated. We do not account for these derivatives as hedges. Contracts Settlement Period Net Long (Short) Notional Units (in barrels) Fair Value of Net Assets (Liabilities) (in thousands) At March 31, 2023: Crude oil fixed-price (1) April 2023–March 2024 1,069 $ 52,613 Propane fixed-price (1) April 2023–March 2025 ( 320 ) ( 4,047 ) Refined products fixed-price (1) April 2023–July 2024 ( 429 ) 4,468 Butane fixed-price (1) April 2023–March 2024 ( 830 ) 3,485 Other April 2023–September 2024 10,292 66,811 Net cash collateral held ( 47,800 ) Net commodity derivative asset $ 19,011 At March 31, 2022: Crude oil fixed-price (1) April 2022–December 2023 ( 1,330 ) $ 35,662 Propane fixed-price (1) April 2022–December 2023 184 3,785 Refined products fixed-price (1) April 2022–December 2022 685 ( 6,063 ) Butane fixed-price (1) April 2022–December 2023 ( 268 ) ( 1,711 ) Other April 2022–March 2023 18,691 50,364 Net cash collateral provided 839 Net commodity derivative asset $ 51,203 (1) We may have fixed price physical purchases, including inventory, offset by floating price physical sales or floating price physical purchases offset by fixed price physical sales. These contracts are derivatives we have entered into as an economic hedge against the risk of mismatches between fixed and floating price physical obligations. The following table summarizes the net losses recorded from our commodity derivatives to revenues and cost of sales in our consolidated statements of operations for the periods indicated (in thousands): Year Ended March 31, 2023 $ ( 5,383 ) 2022 $ ( 116,556 ) 2021 $ ( 83,578 ) Amounts in the table above do not include net losses from our commodity derivatives related to Mid-Con (as defined herein) and Gas Blending (as defined herein), as these amounts have been classified as discontinued operations within our consolidated statement of operations for the year ended March 31, 2021 (see Note 18). Credit Risk We have credit policies that we believe minimize our overall credit risk, including an evaluation of potential counterparties’ financial condition (including credit ratings), collateral requirements under certain circumstances, and the use of industry standard master netting agreements, which allow for offsetting counterparty receivable and payable balances for certain transactions. At March 31, 2023, our primary counterparties were retailers, resellers, energy marketers, producers, refiners, and dealers. This concentration of counterparties may impact our overall exposure to credit risk, either positively or negatively, as the counterparties may be similarly affected by changes in economic, regulatory or other conditions. If a counterparty does not perform on a contract, we may not realize amounts that have been recorded in our consolidated balance sheets and recognized in our net income. F-34 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) Interest Rate Risk The ABL Facility is variable-rate debt with interest rates that are generally indexed to the prime rate or SOFR, an adjusted forward-looking term rate based on the secured overnight financing rate. At March 31, 2023, we had $ 138.0 million of outstanding borrowings under the ABL Facility at a weighted average interest rate of 8.70 %. On July 1, 2022, the Class B Preferred Units distribution rate changed from a fixed rate of 9.00% to a floating rate of the three-month LIBOR interest rate (4.77% for the quarter ended March 31, 2023) plus a spread of 7.213%. For our Class C Preferred Units, distributions on and after April 15, 2024 will accumulate at a percentage of the $25.00 liquidation preference equal to the applicable three-month LIBOR interest rate (or alternative rate as determined in the Partnership Agreement) plus a spread of 7.384%. On or after July 1, 2024, the holders of our Class D Preferred Units can elect, from time to time, for the distributions to be calculated based on a floating rate equal to the applicable three-month LIBOR interest rate (or alternative rate as determined in the Partnership Agreement) plus the Class D Variable Rate. Each Class D Variable Rate election shall be effective for at least four quarters following such election. Fair Value of Fixed-Rate Notes The following table provides fair values estimates of our fixed-rate notes at March 31, 2023 (in thousands): 2026 Senior Secured Notes $ 1,974,833 2025 Notes $ 340,118 2026 Notes $ 287,333 For the 2026 Senior Secured Notes, 2025 Notes and 2026 Notes, the fair value estimates were developed based on publicly traded quotes and would be classified as Level 2 in the fair value hierarchy. Note 11— Segments Our operations are organized into three reportable segments: (i) Water Solutions, (ii) Crude Oil Logistics and (iii) Liquids Logistics, consistent with the manner in which our chief operating decision maker evaluates performance and allocates resources. These segments have been identified based on the differing products and services, regulatory environment and the expertise required for these operations. Our Liquids Logistics reportable segment includes operating segments that have been aggregated based on the nature of the products and services provided. Operating income of these segments is reviewed by the chief operating decision maker to evaluate performance and make business decisions. Intersegment transactions are recorded based on prices negotiated between the segments and are eliminated upon consolidation. See Note 1 for a discussion of the products and services of our reportable segments. The remainder of our business operations is presented as “Corporate and Other” and consists of certain corporate expenses that are not allocated to the reportable segments. The following table summarizes revenues related to our segments for the periods indicated: F-35 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) Year Ended March 31, 2023 2022 2021 (in thousands) Revenues: Water Solutions: Topic 606 revenues Disposal service fees $ 545,008 $ 412,822 $ 321,460 Sale of recovered crude oil 120,705 77,203 28,599 Sale of water 17,509 39,518 13,569 Other service revenues 13,816 15,323 7,358 Total Water Solutions revenues 697,038 544,866 370,986 Crude Oil Logistics: Topic 606 revenues Crude oil sales 2,376,434 2,432,393 1,574,699 Crude oil transportation and other 89,502 75,484 142,233 Non-Topic 606 revenues 7,476 8,687 11,355 Elimination of intersegment sales ( 8,590 ) ( 11,068 ) ( 6,651 ) Total Crude Oil Logistics revenues 2,464,822 2,505,496 1,721,636 Liquids Logistics: Topic 606 revenues Refined products sales 2,554,084 1,899,898 1,124,087 Propane sales 1,156,821 1,322,210 1,023,479 Butane sales 772,085 861,998 516,358 Other product sales 565,706 551,841 373,707 Service revenues 7,944 8,781 22,270 Non-Topic 606 revenues 476,404 254,148 79,318 Elimination of intersegment sales — ( 1,323 ) ( 6,073 ) Total Liquids Logistics revenues 5,533,044 4,897,553 3,133,146 Corporate and Other: Non-Topic 606 revenues — — 1,255 Total Corporate and Other revenues — — 1,255 Total revenues $ 8,694,904 $ 7,947,915 $ 5,227,023 The following table summarizes depreciation and amortization expense (including amortization expense recorded within interest expense, cost of sales and operating expenses in Note 6 and Note 7) and operating income (loss) by segment for the periods indicated: Year Ended March 31, 2023 2022 2021 (in thousands) Depreciation and Amortization: Water Solutions $ 207,328 $ 214,805 $ 222,354 Crude Oil Logistics 46,577 48,489 60,874 Liquids Logistics 13,575 19,000 29,503 Corporate and Other 23,399 23,914 18,469 Total $ 290,879 $ 306,208 $ 331,200 Operating Income (Loss): Water Solutions $ 198,924 $ 94,851 $ ( 92,720 ) Crude Oil Logistics 81,524 45,033 ( 304,330 ) Liquids Logistics 66,624 ( 8,441 ) 70,441 Corporate and Other ( 57,909 ) ( 48,400 ) ( 64,144 ) Total $ 289,163 $ 83,043 $ ( 390,753 ) F-36 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) The following table summarizes additions to property, plant and equipment and intangible assets by segment for the periods indicated. This information has been prepared on the accrual basis, and includes property, plant and equipment and intangible assets acquired in acquisitions. Year Ended March 31, 2023 2022 2021 (in thousands) Water Solutions $ 123,180 $ 115,267 $ 66,649 Crude Oil Logistics 9,649 6,422 9,933 Liquids Logistics 5,704 11,185 31,172 Corporate and Other 2,207 2,148 11,953 Total $ 140,740 $ 135,022 $ 119,707 All of the tables above do not include amounts related to Mid-Con, Gas Blending and TPSL (as defined herein), as these amounts have been classified as discontinued operations within our consolidated statement of operations for the year ended March 31, 2021 (see Note 18). The following tables summarize long-lived assets (consisting of property, plant and equipment, intangible assets, operating lease right-of-use assets and goodwill) and total assets by segment at the dates indicated: March 31, 2023 2022 (in thousands) Long-lived assets, net: Water Solutions $ 2,810,534 $ 2,970,911 Crude Oil Logistics 870,999 1,050,546 Liquids Logistics (1) 363,736 385,783 Corporate and Other 39,363 49,067 Total $ 4,084,632 $ 4,456,307 (1) Includes $ 12.5 million and $ 17.1 million of non-US long-lived assets at March 31, 2023 and 2022, respectively. March 31, 2023 2022 (in thousands) Total assets: Water Solutions $ 3,009,869 $ 3,130,659 Crude Oil Logistics 1,616,953 1,952,048 Liquids Logistics (1) 774,221 888,927 Corporate and Other 55,101 98,711 Total $ 5,456,144 $ 6,070,345 (1) Includes $ 32.3 million and $ 40.2 million of non-US total assets at March 31, 2023 and 2022, respectively. F-37 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) Note 12— Transactions with Affiliates The following table summarizes our related party transactions for the periods indicated: Year Ended March 31, 2023 2022 2021 (in thousands) Purchases from equity method investees $ 1,872 $ 1,091 $ 3,249 Purchases from entities affiliated with management $ — $ 1,489 $ 1,239 Sales to entities affiliated with management $ — $ — $ 18,402 Purchases from WPX (1) $ 216,487 Sales to WPX (1) $ 39,129 (1) As previously disclosed, a member of the board of directors of our GP was an executive officer of WPX Energy, Inc. (“WPX”) and has subsequently retired. Therefore, we are no longer classifying transactions with WPX as a related party. The prior year amounts relate to purchases and sales of crude oil with WPX as well as the treatment and disposal of produced water and solids received from WPX. Accounts receivable from affiliates consist of the following at the dates indicated: March 31, 2023 2022 (in thousands) NGL Energy Holdings LLC $ 11,688 $ 8,483 Equity method investees 673 107 Entities affiliated with management 1 1 Total $ 12,362 $ 8,591 Accounts payable to affiliates consist of the following at the dates indicated: March 31, 2023 2022 (in thousands) Equity method investees $ 64 $ 27 Entities affiliated with management 1 46 Total $ 65 $ 73 Other Related Party Transactions Guarantee of Outstanding Loan for KAIR2014 LLC (“KAIR2014”) In connection with the purchase of our 50 % interest in an aircraft company, KAIR2014, we executed a joint and several guarantee for the benefit of the lender for KAIR2014’s outstanding loan. The other owner of KAIR2014, our Chief Executive Officer, H. Michael Krimbill, is a party to a similar guarantee. This guarantee obligates us for the payment and performance of KAIR2014 with respect to the repayment of the loan. As of March 31, 2023, the outstanding balance of the loan is approximately $ 2.3 million. Payments are made monthly, reducing the outstanding balance, and the loan matures in September 2023. As the guarantee is joint and several, we could be liable for the entire outstanding balance of the loan. The loan is collateralized by the airplane owned by KAIR2014 and in the event of a default, the lender could seek payment in full from us. As of March 31, 2023, no accrual has been recorded related to this guarantee. 2026 Senior Secured Notes and ABL Facility To complete the issuance of the 2026 Senior Secured Notes and the ABL Facility (see Note 7), we were required to receive the consent of the holders of our Class D Preferred Units, who are represented on the board of directors of our GP. For their consent, we paid to the holders of the Class D Preferred Units $ 40.0 million. F-38 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements Note 13— Employee Benefit Plan We have established a defined contribution 401(k) plan to assist our eligible employees in saving for retirement on a tax-deferred basis. The 401(k) plan permits all eligible employees to make voluntary pre-tax contributions to the plan, subject to applicable tax limitations. For every dollar that employees contribute up to 4% of their eligible compensation (as defined in the plan), we contribute one dollar, plus 50 cents for every dollar employees contribute between 4 and 6% of their eligible compensation (as defined in the plan). Our matching contributions vest over an employee’s first two years of employment, subject to a participant’s continued service. Expenses under the plan for the years ended March 31, 2023, 2022 and 2021 were $ 2.8 million, $ 2.9 million and $ 3.4 million, respectively, and do not include expenses for matching contributions related to Mid-Con and Gas Blending, as these amounts have been classified as discontinued operations within our consolidated statement of operations for the year ended March 31, 2021 (see Note 18). Note 14— Revenue from Contracts with Customers We recognize revenue for services and products under revenue contracts as our obligations to either perform services or deliver or sell products under the contracts are satisfied. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation in the contract and is recognized as revenue when, or as, the performance obligation is satisfied. Our revenue contracts in scope under ASC 606 primarily have a single performance obligation. The evaluation of when performance obligations have been satisfied and the transaction price that is allocated to our performance obligations requires significant judgment and assumptions, including our evaluation of the timing of when control of the underlying good or service has transferred to our customers and the relative stand-alone selling price of goods and services provided to customers under contracts with multiple performance obligations. Actual results can vary from those judgments and assumptions. We do not have any material contracts with multiple performance obligations or under which we receive material amounts of non-cash consideration. Our costs to obtain or fulfill our revenue contracts were not material as of March 31, 2023. The majority of our revenue agreements are in the scope under ASC 606 and the remainder of our revenue comes from contracts that are accounted for as derivatives under ASC 815 or that contain nonmonetary exchanges or leases in the scope of ASC 845 and ASC 842, respectively. See Note 11 for a detail of disaggregated revenue. Revenue from contracts accounted for as derivatives under ASC 815 within our Liquids Logistics segment includes $ 4.2 million of net gains related to changes in the mark-to-market value of these arrangements recorded during the year ended March 31, 2023. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. The primary purpose of our invoicing terms is to allow customers to secure the right to reserve the product or storage capacity to be received or used at a later date, not to receive financing from our customers or to provide customers with financing. We report taxes collected from customers and remitted to taxing authorities, such as sales and use taxes, on a net basis. We include amounts billed to customers for shipping and handling costs in revenues in our consolidated statements of operations. Water Solutions Performance Obligations Within the Water Solutions segment, revenue is disaggregated into two primary revenue streams that include service revenue and commodity sales revenue. For contracts involving disposal services, we accept produced water and solids for disposal at our facilities. In cases where we have agreed within a contract or are required by law to remove crude oil from the produced water, the skim oil will be valued as non-cash consideration. Ordinarily, it is required that the fair value of the skim oil is to be estimated at contract inception; however, due to variability of the form of the non-cash consideration, the amount and dollar value is unknown at the contract inception date. Accordingly, ASC 606-10-32-11 allows us to value the skim oil on the date in which the value becomes known. The Water Solutions segment has certain disposal contracts that contain the following types of terms or pricing structures that involve significant judgment that impacts the determination and timing of revenue. • Minimum volume commitments. We receive a shortfall fee if the customer does not deliver a certain amount of volume of produced water over a specified period of time. At each reporting period, we make a determination as to the likelihood of earning this fee. We recognize revenue from these contracts when (i) actual volumes are F-39 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) received; and (ii) when the likelihood of a customer exercising its remaining rights to make up the deficient volumes under minimum volume commitments becomes remote (also known as the breakage model). • Tiered pricing. For contracts with tiered pricing provisions, the period in which the tiers are earned and settled (i.e., the “reset period”) may vary from monthly to over a period of multiple months. If the tiered pricing is based on a month, we allocate the fee to the distinct daily service to which it relates. If the tiered pricing spans across multiple reporting periods, we estimate the total transaction price at the beginning of each reset period, based on the expected volumes. We revise the estimate of variable consideration at each reporting date throughout each reset period. • Volume discount pricing. Volume discount pricing is a form of variable consideration whereby the customer pays for the volumes delivered on a cumulative basis. Similar to tiered pricing, the period in which the cumulative volumes are earned and settled (i.e., the “reset period”) may vary from daily to over a period of multiple months. If the volume discount is based on a month, we allocate the fee to the distinct daily service to which it relates. If the volume discount period spans across multiple reporting periods, we estimate the total transaction price at the beginning of each reset period, based on the expected volumes. We revise the estimate of variable consideration at each reporting date throughout each reset period. For all of our disposal contracts within the Water Solutions segment, revenue will be recognized over time utilizing the output method based on the volume of produced water or solids we accept from the customer. For contracts that involve the sale of recovered crude oil and reuse, recycled and brackish non-potable water, we will recognize revenue at a point in time, based on when control of the product is transferred to the customer. Crude Oil Logistics Performance Obligations Within the Crude Oil Logistics segment, revenue is disaggregated into two primary revenue streams that include revenue from the sale of commodities and service revenue. For sales of commodities, we are obligated to deliver a predetermined amount of crude oil, primarily on a month-to-month basis, to our customers. For these types of agreements, revenue is recognized at a point in time based on when the crude oil is delivered and control is transferred to the customer. For revenue received from services rendered, we are obligated to provide throughput services to move crude oil via pipeline, railcar or marine vessel or to provide terminal maintenance services. In either case, the obligation is satisfied over time utilizing the output method based on each volume of crude oil that is moved from the origination point to the final destination or based on the passage of time. Liquids Logistics Performance Obligations Within the Liquids Logistics segment, revenue is disaggregated into two primary revenue streams that include revenue from the sale of commodities and service revenue. For sales of commodities, we are obligated to deliver a specified amount of product over a specified period of time. For these types of agreements, revenue is recognized at a point in time based on when the product is delivered and control is transferred to the customer. For revenue received from services rendered, we offer a variety of services which include: (i) storage services where product is commingled; (ii) railcar transportation services; (iii) transloading services; and (iv) logistics services. We are obligated to provide these services over a predetermined period of time. All revenue from services is recognized over time utilizing the output method based on volumes stored or moved. Remaining Performance Obligations Most of our service contracts are such that we have the right to consideration from a customer in an amount that corresponds directly with the value to the customer of our performance completed to date. Therefore, we utilized the practical expedient in ASC 606-10-55-18 under which we recognize revenue in the amount to which we have the right to invoice. Applying this practical expedient, we are not required to disclose the transaction price allocated to remaining performance obligations under these agreements. The following table summarizes the amount and timing of revenue recognition for such contracts at March 31, 2023 (in thousands): F-40 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) Year Ending March 31, 2024 $ 101,324 2025 85,069 2026 26,696 2027 10,846 2028 1,269 Thereafter 802 Total $ 226,006 Many agreements are short-term in nature with a contract term of one year or less. For those contracts, we utilized the practical expedient in ASC 606-10-50 that exempts us from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less. Additionally, for our product sales contracts, we have elected the practical expedient set out in ASC 606-10-50-14A, which states that we are not required to disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under these agreements, each unit of product represents a separate performance obligation and therefore future volumes are wholly unsatisfied and disclosure of transaction price allocated to remaining performance obligations is not required. Under product sales contracts, the variability arises as both volume and pricing (typically index-based) are not known until the product is delivered. Contract Assets and Liabilities Amounts owed from our customers under our revenue contracts are typically billed as the service is being provided on a monthly basis and are due within 1-30 days of billing, and are classified as accounts receivable-trade on our consolidated balance sheets. Under certain of our contracts, we recognize revenues in excess of billings, referred to as contract assets, within prepaid expenses and other current assets in our consolidated balance sheets. Accounts receivable from contracts with customers are presented within accounts receivable-trade and accounts receivable-affiliates in our consolidated balance sheets. Under certain of our contracts, we may be entitled to receive payments in advance of satisfying our performance obligations under the contract. We recognize a liability for these payments in excess of revenue recognized, referred to as deferred revenue or contract liabilities, within advance payments received from customers in our consolidated balance sheets. Our deferred revenue primarily relates to: • Prepayments. Some revenue contracts contain prepayment provisions within our Liquids Logistics segment. In some cases, we also receive prepayments from customers purchasing commodities, which allows the customer to secure the right to receive their requested volumes in a future period. Revenue from these contracts is initially deferred, thus creating a contract liability. • Multi-period contract in which fee escalates each subsequent year of the contract. Revenue from these contracts is recognized over time based on a weighted average of what is expected to be received over the life of the contract. As the actual amount billed and received from the customer differs from the amount of revenue recognized, a contract liability is recorded. • Tiered pricing and volume discount pricing. As described above, we revise the estimate of variable consideration at each reporting date throughout each reset period. As the actual amount billed and received from the customer differs from the amount of revenue recognized, a contract liability is recorded. • Capital reimbursements. Certain contracts in our Water Solutions segment require that our customers reimburse us for capital expenditures related to the construction of long-lived assets, such as water gathering pipelines, booster stations and custody transfer points, utilized to provide services to them under the revenue contracts. Because we consider these amounts as consideration from customers associated with ongoing services to be provided to customers, we defer these upfront payments in deferred revenue and recognize the amounts in revenue over the life of the associated revenue contract as the performance obligations are satisfied under the contract. F-41 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) The following tables summarize the balances of our contract assets and liabilities at the dates indicated: March 31, 2023 March 31, 2022 (in thousands) Accounts receivable from contracts with customers $ 425,760 $ 605,384 Contract assets (current) $ 10,050 $ — Contract liabilities balance at March 31, 2021 $ 10,896 Payment received and deferred 49,024 Payment recognized in revenue ( 44,019 ) Disposition of Sawtooth (see Note 17) ( 8,234 ) Contract liabilities balance at March 31, 2022 7,667 Payment received and deferred 62,969 Payment recognized in revenue ( 56,116 ) Contract liabilities balance at March 31, 2023 $ 14,520 Note 15— Leases Lessee Accounting Our leasing activity primarily consists of product storage, office space, real estate, railcars, and equipment. We determine if an agreement contains a lease at the inception of the arrangement. If an arrangement is determined to contain a lease, we classify the lease as an operating lease or a finance lease depending on the terms of the arrangement. Our leases are classified as operating and finance leases. Operating lease right-of-use assets represent our right to use an underlying asset for the lease term when we control the use of the asset by obtaining substantially all of the economic benefits of the asset and direct the use of the asset. Operating lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and operating lease liabilities with an initial term of greater than one year are recognized at the commencement date based on the present value of lease payments over the lease term. As our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Our incremental borrowing rate represents the interest rate which we would pay to borrow, on a collateralized basis, an amount equal to the lease payments over a similar term in a similar economic environment. We do not have any leases that provide for guarantees of residual value. Our lease agreements may include options to extend or terminate the lease which are included in the measurement of our operating lease liability when it is reasonably certain that we will exercise the option. Lease renewal terms vary from one year to 30 years. Operating lease expense is recognized on a straight-line basis over the lease term. We have variable lease payments, including adjustments to lease payments based on an index or rate, such as a consumer price index, fair value adjustments to lease payments, and common area maintenance, real estate taxes, and insurance payments in certain real estate leases. We also have certain land leas es within our Water Solutions segment that require us to pay a royalty, which could be based on a flat rate per barrel disposed or a percentage of revenue generated. Variable lease payments are excluded from operating lease right-of-use assets and operating lease liabilities and are expensed as incurred. Operating lease right-of-use assets also include any lease prepayments and exclude lease incentives. For leases acquired as a result of an acquisition, the right-of-use asset also includes adjustments for any favorable or unfavorable market terms present in the lease. Short-term leases with an initial term of 12 months or less that do not include a purchase option, with the exception of railcar leases, are not recorded on the consolidated balance sheet. Operating lease expense for short-term leases is recognized on a straight-line basis over the lease term and is disclosed below. We have lease agreements with lease and non-lease components, which are generally accounted for separately. For certain leases of buildings and land, we account for the lease and non-lease components as a single lease component based on the election of the practical expedient to not separate lease components from non-lease components. At March 31, 2023, we had operating lease right-of-use assets of $ 90.2 million and current and noncurrent operating lease obligations of $ 34.2 million and $ 58.5 million, respectively, on our consolidated balance sheet. An impairment of the operating lease right-of-use asset of $ 1.6 million was recorded for the underperforming terminals in our Liquids Logistics and Crude Oil Logistics segments. Also we recorded an impairment of the operating lease right-of-use asset of $ 0.1 million related to an office lease and $ 0.3 million related to the termination of leases. At March 31, 2022, we had operating lease right-of-use assets of $ 114.1 million and current and noncurrent operating lease obligations of $ 41.3 million and $ 72.8 million, respectively, F-42 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) on our consolidated balance sheet. At March 31, 2023, the weighted-average remaining lease term and weighted-average discount rate for our operating leases was 5.71 years and 9.61 %, respectively. At March 31, 2022, the weighted-average remaining lease term and weighted-average discount rate for our operating leases was 6.46 years and 7.49 %, respectively. The following table summarizes the components of our lease cost for the periods indicated: Year Ended March 31, 2023 2022 2021 (in thousands) Operating lease cost (1) $ 51,525 $ 58,535 $ 69,031 Variable lease cost (1) 29,742 22,130 18,871 Short-term lease cost (1) 341 351 1,217 Finance lease cost Amortization of right-of-use asset (2) 3 — — Interest on lease obligation (3) 9 — — Total lease cost $ 81,620 $ 81,016 $ 89,119 (1) Included in operating expenses in our consolidated statements of operations. (2) Included in depreciation and amortization expense in our consolidated statements of operations. (3) Included in interest expense in our consolidated statement of operations. The following table summarizes maturities of our lease obligations at March 31, 2023 (in thousands): Operating Finance Year Ending March 31, Leases Lease (1) 2024 $ 40,766 $ 28 2025 26,486 28 2026 13,726 28 2027 7,854 28 2028 5,789 9 Thereafter 26,763 — Total lease payments 121,384 121 Less imputed interest ( 28,768 ) ( 30 ) Total lease obligations $ 92,616 $ 91 (1) At March 31, 2023, the short-term finance lease obligation of less than $ 0.1 million is included in accrued expenses and other payables and the long-term finance lease obligation of $ 0.1 million is included in other noncurrent liabilities. The following table summarizes supplemental cash flow information related to our leases for the periods indicated: Year Ended March 31, 2023 2022 2021 (in thousands) Supplemental Cash Flow Information Cash paid for amounts included in the measurement of lease obligations Operating cash outflows from operating leases $ 51,147 $ 57,449 $ 68,141 Operating cash outflows from finance lease $ 9 $ — $ — Financing cash outflows from finance lease $ 10 $ — $ — Right-of-use assets obtained in exchange for lease obligations Operating leases $ 32,984 $ 14,950 $ 33,579 Finance lease $ 102 $ — $ — Lessor Accounting and Subleases Our lessor arrangements include storage and railcar contracts, of which certain agreements contain renewal options for periods of between one year and five years . We determine if an agreement contains a lease at the inception of the arrangement. F-43 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) If an arrangement is determined to contain a lease, we classify the lease as operating, sales-type or direct financing. Lessor accounting under ASC 842 is substantially unchanged and all of our leases will continue to be classified as operating leases. We also, from time to time, sublease certain of our storage capacity and railcars to third-parties. Fixed rental revenue is recognized on a straight-line basis over the lease term. During the years ended March 31, 2023, 2022 and 2021, fixed rental revenue was $ 13.9 million , $ 14.4 million and $ 15.9 million , which includes $ 3.8 million, $ 1.4 million and $ 2.5 million of sublease revenue, respectively. The following table summarizes future minimum lease payments receivable under various noncancelable operating lease agreements at March 31, 2023 (in thousands): Year Ending March 31, 2024 $ 8,862 2025 4,693 2026 4,017 2027 4,017 2028 3,927 Thereafter 189 Total $ 25,705 Note 16— Allowance for Current Expected Credit Loss (CECL) ASU 2016-13 requires that an allowance for expected credit losses be recognized for certain financial assets that reflects the current expected credit loss over the financial asset’s contractual life. The valuation allowance considers the risk of loss, even if remote, and considers past events, current conditions and reasonable and supportable forecasts. We are exposed to credit losses primarily through sale of products and services and notes receivable from third-parties. A counterparty’s ability to pay is assessed through a credit process that considers the payment terms, the counterparty’s established credit rating or our assessment of the counterparty’s credit worthiness and other risks. We can require prepayment or collateral to mitigate credit risks. We group our financial assets into pools of counterparties with similar risk characteristics for the purpose of determining the allowance for expected credit losses. Each reporting period, we assess whether a significant change in the risk of expected credit loss has occurred. Among the quantitative and qualitative factors considered in calculating our allowance for expected credit losses are historical financial data, including write-offs and allowances, current conditions, industry risk and current credit ratings. Financial assets will be written off in whole, or in part, when practical recovery efforts have been exhausted and no reasonable expectation of recovery exists. Subsequent recoveries of amounts previously written off are recorded as an increase to the allowance. We manage receivable pools using past due balances as a key credit quality indicator. The following table summarizes changes in our allowance for expected credit losses for the periods indicated: Accounts Receivable - Trade Notes Receivable and Other (in thousands) Balance at March 31, 2020 $ 4,540 $ — Cumulative effect adjustment 433 680 Change in provision for expected credit losses 319 — Write-offs charged against the provision ( 3,100 ) ( 222 ) Balance at March 31, 2021 2,192 458 Change in provision for expected credit losses 929 — Write-offs charged against the provision ( 491 ) — Disposition of Sawtooth (See Note 17) ( 4 ) — Balance at March 31, 2022 2,626 458 Change in provision for expected credit losses 25 ( 410 ) Write-offs charged against the provision ( 687 ) — Balance at March 31, 2023 $ 1,964 $ 48 F-44 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) In addition to the provision for expected credit losses below, we also wrote off $ 5.7 million during the year ended March 31, 2021 as discussed in Note 17. Note 17— Other Matters Dispute Settlement During the three months ended December 31, 2022, we recorded other income of $ 29.5 million to settle a dispute associated with commercial activities not occurring in the current reporting periods. We received payment on December 29, 2022. This amount is recorded within other income (expense), net in our consolidated statement of operations for the year ended March 31, 2023. Third-party Loan Receivable As previously disclosed, we had an outstanding loan receivable, including accrued interest, associated with our interest in a facility that was utilized by a third-party. Due to the bankruptcy of the third-party, we wrote down the remaining outstanding balance to what we expected to collect as an unsecured claim. At March 31, 2022, the outstanding balance of our unsecured claim was $ 0.6 million, net of an allowance for an expected credit loss, which was recorded within prepaid expenses and other current assets in our consolidated balance sheet. During the three months ended June 30, 2022, we received $ 1.0 million to settle our unsecured claim and we reversed the allowance for the expected credit loss. Third-party Bankruptcy As previously disclosed, during the three months ended June 30, 2020, Extraction, who is a significant shipper on our Grand Mesa pipeline and had transportation contracts to ship crude oil on our pipeline, filed a petition for bankruptcy under Chapter 11 of the bankruptcy code and requested that the court authorize it to reject these transportation contracts, effective June 14, 2020. On November 2, 2020, the bankruptcy court issued a bench ruling granting Extraction’s motion to reject the transportation contracts effective as of June 14, 2020. As a result of the bankruptcy proceedings, we reached a global settlement agreement with Extraction on January 21, 2021. Among other consideration, the global settlement agreement included a new long-term supply agreement, a new rate structure under the supply agreement and the receipt of $ 35.0 million from Extraction as a liquidated payment for our unsecured claims, which was received on January 21, 2021. As a result of entering into the global settlement agreement, we determined that the customer commitment intangible asset related to one of the transportation contracts was impaired as of December 31, 2020 and recorded an impairment charge of $ 145.8 million . Also, as a result of these transactions, we assessed the goodwill of our Crude Oil Logistics reporting unit for impairment, which resulted in an impairment charge of $ 237.8 million (s ee Note 5 for a further discussion). These impairment charges were recorded within loss on disposal or impairment of assets, net in our consolidated statement of operations for the year ended March 31, 2021 . Extraction continued to utilize, during the bankruptcy period, the services under the transportation contracts and, as of September 30, 2020, owed us $ 5.7 million related to deficiency volumes, which following our global settlement, we deemed uncollectible and wrote off this balance to bad debt expense within our consolidated statement of operations during the year ended March 31, 2021. Dispositions Sale of Certain Saltwater Disposal Assets On March 31, 2023, we sold certain saltwater disposal assets in the Midland Basin to two third-parties for total consideration of $ 13.6 million, of which $ 5.0 million was in cash and $ 8.6 million was a loan receivable. Interest on the loan receivable is based on the prime rate and is due monthly beginning on September 1, 2023. The loan receivable matures on April 1, 2026. We recorded a loss of $ 18.8 million within loss on disposal or impairment of assets, net in our consolidated statement of operations for the year ended March 31, 2023 . 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. F-45 NGL ENERGY PARTNERS LP AND SUBSIDIARIES Notes to Consolidated Financial Statements (Continued) Sale of Marine Assets On March 30, 2023, we sold our marine assets to two third-parties for total consideration of $ 111.7 million in cash less estimated expenses of approximately $ 7.5 million. We recorded a loss of $ 8.0 million within loss on disposal or impairment of assets, net in our consolidated statement of operations for the year ended March 31, 2023 . 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 Crude Oil Logistics segment have not been classified as discontinued operations. Sale of Sawtooth On June 18, 2021, we sold our approximately 71.5 % interest in Sawtooth to a group of buyers for total consideration of $ 70.0 million less expenses of approximately $ 2.0 million. We recorded a loss of $ 60.1 million within loss on disposal or impairment of assets, net in our consolidated statement of operations for the year ended March 31, 2022 . 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 Liquids Logistics segment have not been classified as discontinued operations. Sale of Certain Assets During the three months ended December 31, 2020, we sold certain permits, land and a saltwater disposal facility to WaterBridge Resources LLC for total proceeds of $ 43.2 million. We recorded a gain of $ 14.0 million within loss on disposal or impairment of assets, net in our consolidated statement of operations for the year ended March 31, 2021 . Note 18— Discontinued Operations As previously disclosed, on September 30, 2019, we completed the sale of TransMontaigne Product Services, LLC (“TPSL”) to Trajectory Acquisition Company, LLC. On January 3, 2020, we completed the sale of our refined products 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 the sale of each of these businesses represented strategic shifts, the results of operations and cash flows related to these businesses are classified as discontinued operations for the period presented. The following table summarizes the results of operations from discontinued operations for the year ended March 31, 2021 (in thousands): Revenues $ 16,198 Cost of sales 16,556 Operating expenses 290 Loss on disposal or impairment of assets, net (1) 1,174 Operating loss from discontinued operations ( 1,822 ) Income tax benefit 53 Loss from discontinued operations, net of tax $ ( 1,769 ) (1) Includes a loss of $ 1.0 million on the sale of Gas Blending and $ 0.2 million on the sale of TPSL. Note 19— Subsequent Events Subsequent to March 31, 2023, we have repurchased $ 99.3 million of the 2025 Notes (see Note 7 for a further discussion). F-46