What changed in this filing

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Item 1A. Risk Factors

2025-05-29 compared with 2024-06-06 · 94 added, 114 removed, 679 unchanged (23% of the section changed)

9 unchanged sentences

• Our substantial indebtedness and restrictions contained in our debt and preferred unit agreements may limit our flexibility to obtain financing to pursue other business opportunities and restrict our current and future operations.

• Increasing interest rates could impact our financing costs, common unit price, distributions on our preferred units and our ability to issue equity and incur debt.

• Increasing interest rates could impact our financing costs, our common unit price, distributions on our preferred units and our ability to issue equity and incur debt.

• Failure of our banking institutions.

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• Our dependence on the ability and willingness of other parties to explore for and produce crude oil and natural gas.

• Declining demand for hydrocarbons, commodity prices and production volumes, inventory risk, the availability of transportation and storage capacity, and increased transportation and leasing costs.

• Declining demand for hydrocarbons, commodity prices and production volumes, inability to acquire new pore space or loss of existing pore space, inventory risk, the availability of transportation and storage capacity, and increased transportation and leasing costs.

• Competition from other midstream, transportation, and terminaling and storage companies.

• Interruption of service at our principal storage facilities or on common carrier pipelines or railroads.

• Interruption of service at our principal storage facilities, on common carrier pipelines or railroads.

• Fees charged to customers for products and services may not cover increases in costs.

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

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

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

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

• Our ability to successfully complete, integrate and operate accretive acquisitions and organic growth projects.

• Our ability to successfully complete, integrate and operate organic growth projects.

• Constructing new transportation systems and facilities subjects us to construction risks.

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• The tax treatment of publicly traded partnerships could be subject to potential changes or interpretations.

• The IRS (as defined herein) may challenge certain income tax positions, methodologies or treatments that we have taken, and pursuant to the Bipartisan Budget Act of 2015, may make audit adjustments to our income tax returns for tax years beginning after 2019.

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

• Certain action we take, such as issuing additional units, may increase a unitholder’s tax liability.

• Certain actions that we may take, such as issuing additional units, may increase a unitholder’s tax liability.

• Tax gain or loss on the disposition of our common units could be more or less than expected.

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The amount of cash we will have to fund our operations, repay indebtedness or pay distributions principally depends on the amount of cash we generate from our operations, not profitability, which will fluctuate from quarter to quarter based on, among other things:

• the cost of crude oil, natural gas liquids, gasoline, diesel, and biodiesel that we buy for resale and whether we are able to pass along cost increases to our customers;

• the cost of crude oil and natural gas liquids that we buy for resale and whether we are able to pass along cost increases to our customers;

• the volume of produced water delivered to our processing facilities;

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• restrictions contained in the ABL Facility, Term Loan B and the indenture governing our 2029 Senior Secured Notes and 2032 Senior Secured Notes (collectively, the “Indenture”);

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

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

• our ability to borrow funds and access capital markets;

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Our ability to make scheduled payments, to refinance our obligations with respect to our indebtedness or our ability to obtain additional financing in the future will depend on our financial and operating performance, which, in turn, is subject to prevailing economic conditions and to financial, business and other factors.

We may not have sufficient cash flow from operations and available borrowings under the ABL Facility to service

our indebtedness.

We may not have sufficient cash flow from operations and available borrowings under the ABL Facility to service our indebtedness.

A significant downturn in our business or other development adversely affecting our cash flow could materially impair our ability to service our indebtedness.

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• incur additional debt or issue letters of credit;

• redeem or repurchase units;

• redeem or repurchase common units;

• make certain loans, investments and acquisitions;

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We will be permitted to make distributions to our unitholders once we meet certain defined metrics and as long as no default or event of default exists both immediately before and after giving effect to the declaration and payment of the distribution and the distribution does not exceed available cash for the applicable quarterly period.

The provisions of the ABL Facility, Term Loan B and Indenture may affect our ability to obtain future financing and pursue attractive business opportunities and our flexibility in planning for, and reacting to, changes in business conditions.

In addition, a failure to comply with the provisions of these agreements could result in a default or an event of default that could enable our lenders, subject to the terms and conditions, to declare the outstanding principal of that debt, together with accrued and unpaid interest, to be immediately due and payable.

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In addition, we may seek to address the outstanding balances on the Class D Preferred Units prior to when they are required to be redeemed, which may impact our ability to service our indebtedness.

Increasing interest rates could impact our financing costs and our common unit price, our ability to issue equity or incur debt, and our ability to make cash distributions at our intended levels.

Increasing interest rates could impact our financing costs, our common unit price, our ability to issue equity or incur debt, and our ability to make cash distributions at our intended levels.

Interest rates may increase in the future.

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

In addition, the distribution rates on our Class C Preferred Units converted from fixed rates to floating rates on April 15, 2024, while 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.

The distribution rates on our Class B Preferred Units converted from fixed rates to floating rates on July 1, 2022, while the distribution rates on our Class C Preferred Units converted from fixed rates to floating rates on April 15, 2024

and Class D Preferred Units converted from fixed rates to floating rates on October 15, 2024.

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

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Risks Related to the Operations of Our Business

Our business depends on the availability of crude oil, natural gas liquids, and refined products in the United States and Canada, which is dependent on the ability and willingness of other parties to explore for and produce crude oil and natural gas.

Our business depends on the availability of crude oil and natural gas liquids in the United States and Canada, which is dependent on the ability and willingness of other parties to explore for and produce crude oil and natural gas.

Spending on crude oil and natural gas exploration and production may be adversely affected by industry and financial market conditions that are beyond our control.

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Limitations on the availability of capital, or higher costs of capital, for financing expenditures have caused and may continue to cause customers to make additional reductions to capital budgets in the future even if commodity prices increase from current levels.

These cuts in spending may curtail drilling programs and other discretionary spending, which could result in a reduction in business opportunities and demand for our services, the rates we can charge and our utilization.

These cuts in spending may curtail drilling programs and other discretionary spending, which could result in a reduction in business

opportunities and demand for our services, the rates we can charge and our utilization.

In addition, certain of our customers could become unable to pay their suppliers, including us.

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A decline in crude oil prices or a prolonged period of low crude oil prices could have an adverse effect on our businesses.

Our Water Solutions business depends upon available pore space in subsurface geologic formations by which we can dispose of produced water through underground injection wells.

Our inability to acquire new pore space or our loss of existing pore space may negatively impact our ability to service new and existing customers.

We dispose of produced water generated by our customers during oil and gas operations by drilling disposal wells and injecting such produced water into porous subsurface geologic formations.

The amount of subsurface pore space that is capable of permanently storing injected produced water is finite and requires constant replenishment.

As we continue to inject produced water into our existing produced water disposal wells, we may exhaust the geologic or technical limits of the subsurface strata for produced water injection.

Furthermore, state regulatory bodies in Texas and New Mexico, which have permitting authority over disposal wells, have imposed new requirements in the permitting of produced water disposal wells to assess any relationship between induced seismicity and the use of such wells.

State regulators may deny, modify, suspend or terminate permits on grounds that a disposal well is likely to be, or determined to be, causing seismic activity or would be operating at impermissible pressure levels.

States have also issued, and may in the future issue, orders to temporarily shut down or to curtail the injection depth, injection capacity or injection rate of existing wells because of concerns over induced seismicity.

Any loss of pore space or injection capacity for technical, geological or regulatory reasons could require us to spend significant time and capital expenditures to locate, apply for, permit, drill, complete and place into service new disposal wells and to build pipeline infrastructure to transport produced water to such new wells.

Our customers’ oil and gas production growth plans may also require us to secure additional pore space and disposal wells and build new pipeline infrastructure.

Permits for new disposal wells could be challenged for a variety of reasons by our competitors, oil and gas producers, landowners or non-governmental organizations.

Such regulatory challenges could be successful and prevent us from being able to secure additional disposal capacity.

New disposal wells may also subject us to higher royalty rates.

Furthermore, we may not have contractual or real property rights to dispose of produced water at locations that are in geographic proximity to our customers’ existing or new oil and gas production wells or our existing injection wells and pipeline infrastructure.

In such cases, we would be required to spend significant amounts of capital to build new pipeline infrastructure to transport produced water to distant disposal locations.

If we are unable to accept all of the produced water delivered to us by our customers because we lack available pore space for underground injection, we could be subject to contractual penalties for alternative disposal solutions, including trucking, and such penalties could be significant.

Any curtailment of our customers’ oil and gas production due to a lack of available pore space or injection capacity would result in lost revenue to us and could trigger contractual termination rights.

Any of these events, either individually or in aggregate, could result in a material adverse effect on our business, financial condition or results of operations.

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

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Generally, we attempt to maintain an inventory position that is substantially balanced between our purchases and sales, including our future delivery obligations.

We attempt to obtain a certain margin for our purchases by selling our product to our customers, which include third-party consumers, other wholesalers and retailers, and others.

We attempt to obtain a certain margin for our purchases by selling our product to our

customers, which include third-party consumers, other wholesalers and retailers, and others.

However, market, weather or other conditions beyond our control may disrupt our expected supply of product, and we may be required to obtain supply at increased prices that cannot be passed through to our customers.

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Conversely, a prolonged decline in product prices could potentially result in a reduction of the borrowing base under the ABL Facility, and we could be required to liquidate inventory that we have already presold.

One of the strategies of our Liquids Logistics segment is to purchase refined petroleum and renewable products primarily in the Gulf Coast, West Coast and Midwest regions of the United States and schedule them for delivery at various locations throughout the country.

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

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

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

We are affected by competition from other midstream, transportation and terminaling and storage companies, some of which are larger, more firmly established and may have greater resources than we do.

5 unchanged sentences

Our Liquids Logistics segment is also seeing increased competition for supply from international markets.

We also face significant competition for refined products supplies and customers for those services.

Our Crude Oil Logistics segment faces significant competition for crude oil supplies and customers for our services.

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If a competitor attempts to increase market share by reducing prices, we may lose customers, which would reduce our revenues.

Our business would be adversely affected if service at our principal storage facilities or on common carrier pipelines or railroads we use is interrupted.

Our business would be adversely affected if service at our principal storage facilities, common carrier pipelines or railroads we use is interrupted.

We use third-party common carrier pipelines to transport our products and we use third-party facilities to store our products.

Any significant interruption in the service at these storage facilities or on common carrier pipelines we use would adversely affect our ability to obtain and deliver products.

We transport natural gas liquids and biodiesel by railcar.

We transport natural gas liquids by railcar.

We do not own or operate the railroads on which these railcars are transported.

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Additionally, our loss of rights, through our inability to renew right-of-way contracts or otherwise, could materially and adversely affect our business, consolidated results of operations and financial position.

Additionally, certain facilities and equipment (or parts thereof) used by us are leased from third parties for specific periods, including many of our railcars.

Additionally, certain facilities and equipment (or parts thereof) used by us are leased from third parties for specific periods, including most of our railcars.

Our inability to renew facility or equipment leases or otherwise maintain the right to utilize such facilities and equipment on acceptable terms, or the increased costs to maintain such rights, could have a material and adverse effect on our consolidated results of operations and cash flows.

Our operations depend on various forms of storage and transportation for receipt and delivery of crude oil, natural gas liquids and refined products.

We own natural gas liquids and crude oil terminals and lease storage capacity from third-party natural gas liquids and refined product terminals.

Our operations depend on various forms of storage and transportation for receipt and delivery of crude oil and natural gas liquids.

We own natural gas liquids and crude oil terminals and lease storage capacity from third-party natural gas liquids.

The facilities depend on pipelines, railroads, truck transports, and storage systems that are owned and operated by third parties.

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

Any interruption of service at the terminals, or on pipeline, railroad or lateral connections or adverse change in the terms and

conditions of services could have a material adverse effect on our ability, and the ability of our customers, to transport product to and from our facilities and have a corresponding material adverse effect on our revenues.

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

1 unchanged sentence

However, if competing pipelines do not have similar annual tariff increases or service fee adjustments, such increases could affect our ability to compete, thereby adversely affecting our revenues.

The fees charged to customers under our agreements with them for the transportation and sale of crude oil, condensate, natural gas liquids, gasoline , diesel, and biodiesel and the disposal of produced water may not escalate sufficiently to cover increases in costs and the agreements may be suspended in some circumstances, which would affect our profitability.

The fees charged to customers under our agreements with them for the transportation and sale of crude oil, condensate, natural gas liquids and the disposal of produced water may not escalate sufficiently to cover increases in costs and the agreements may be suspended in some circumstances, which would affect our profitability.

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

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

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

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

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

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

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

Any sustained decrease in demand for refined products in the markets we serve could reduce our cash flow.

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

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

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

• an increase in automotive engine fuel economy, whether as a result of a shift by consumers to more fuel-efficient vehicles or technological advances by manufacturers;

• an increase in the market price of crude oil that leads to higher refined product prices, which may reduce demand for refined products and drive demand for alternative products;

• the increased use of alternative fuel sources, such as battery-powered engines.

Seasonal weather conditions and natural or man-made disasters could severely disrupt normal operations and have an adverse effect on our business, financial position and results of operations.

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

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

Our ability to complete accretive acquisitions on economically acceptable terms may be limited by various factors, including, but not limited to:

• increased competition for attractive acquisitions;

• covenants in the ABL Facility, Term Loan B and Indenture that limit the amount and types of indebtedness that we may incur to finance acquisitions;

• lack of available cash or external capital or limitations on our ability to issue equity to pay for acquisitions;

• possible unwillingness of prospective sellers to accept our common units as consideration and the potential dilutive effect to our existing unitholders caused by an issuance of common units in an acquisition.

There can be no assurance that we will identify attractive acquisition candidates in the future, that we will be able to acquire such businesses on economically acceptable terms, that any acquisitions will not be dilutive to earnings and distributions.

Furthermore, if we consummate any future acquisitions, our capitalization and results of operations may change

significantly, and unitholders will not have the opportunity to evaluate the economic, financial and other relevant information that we will consider in determining the application of these funds and other resources.

We may be subject to substantial risks in connection with the integration and operation of acquired businesses, in particular, those businesses with operations that are distinct and separate from our existing operations.

Any acquisitions we make in pursuit of our growth strategy are subject to potential risks, including, but not limited to:

• the inability to successfully integrate the operations of recently acquired businesses;

• the assumption of known or unknown liabilities, including environmental liabilities;

• limitations on rights to indemnity from the seller;

• mistaken assumptions about the overall costs of equity, debt or synergies;

• mistaken assumptions about sales volume, margin or operational expenses;

• unforeseen difficulties operating in new geographic areas or in new business segments;

• the diversion of management’s and employees’ attention from other business concerns;

• customer or key employee loss from the acquired businesses;

• a potential significant increase in our indebtedness and related interest expense.

We undertake due diligence efforts in our assessment of acquisitions, but may be unable to identify or fully plan for all issues and risks associated with a particular acquisition.

Even when an issue or risk is identified, we may be unable to obtain adequate contractual protection from the seller.

The realization of any of these risks could have a material adverse effect on the success of a particular acquisition or our consolidated financial position, results of operations or future growth.

As part of our growth strategy, we may expand our operations into businesses that differ from our existing operations.

Integration of new businesses is a complex, costly and time-consuming process and may involve assets with which we have limited operating experience.

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

In addition to the risks set forth above, new businesses will subject us to additional business and operating risks, such as the acquisitions not being accretive to our unitholders as a result of decreased profitability, increased interest expense related to debt we incur to make such acquisitions or an inability to successfully integrate those operations into our overall business operations.

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

Growing our business by constructing new transportation systems and facilities subjects us to construction risks and risks that supplies for such systems and facilities will not be available upon completion thereof.

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For example, repairing our pipelines often involves securing consent from individual landowners to access their property;

one or more landowners may resist our efforts to make

needed repairs, which could lead to an interruption in the operation of the affected pipeline or facility for a period of time that is significantly longer than would have otherwise been the case.

one or more landowners may resist our efforts to make needed repairs, which could lead to an interruption in the operation of the affected pipeline or facility for a period of time that is significantly longer than would have otherwise been the case.

In addition, acts of sabotage or eco-terrorism could cause significant damage or injury to people, property or the environment or lead to extended interruptions of our operations.

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Risks Related to Regulatory Compliance

Our sales of crude oil, condensate, natural gas liquids, gasoline , diesel, and biodiesel and related transportation and hedging activities, and our processing of produced water, expose us to potential regulatory risks.

Our sales of crude oil, condensate, natural gas liquids and related transportation and hedging activities, and our processing of produced water, expose us to potential regulatory risks.

The FTC, the FERC, and the CFTC hold statutory authority to monitor certain segments of the physical and financial energy commodity markets.

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Failure to comply with such regulations, as interpreted and enforced, could have a material and adverse effect on our business, consolidated results of operations and financial position.

The intrastate transportation or storage of crude oil and refined products is subject to regulation by the state in which the facilities are located and transactions occur.

The intrastate transportation or storage of crude oil is subject to regulation by the state in which the facilities are located and transactions occur.

Compliance with these state regulations could have a material and adverse effect on that portion of our business, consolidated results of operations and financial position.

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The Dodd-Frank Act requires the CFTC and the SEC to promulgate rules and regulations implementing the Dodd-Frank Act.

The Dodd-Frank Act provides for statutory and regulatory requirements for derivative transactions, including crude oil, refined and renewable products, and natural gas hedging transactions.

The Dodd-Frank Act provides for statutory and regulatory requirements for derivative transactions, including crude oil, and natural gas hedging transactions.

Certain transactions will be required to be cleared on exchanges and cash collateral will have to be posted.

The Dodd-Frank Act provides for a potential

exemption from these clearing and cash collateral requirements for commercial end users and it includes a number of defined terms that will be used in determining how this exemption applies to particular derivative transactions and the parties to those transactions.

The Dodd-Frank Act provides for a potential exemption from these clearing and cash collateral requirements for commercial end users and it includes a number of defined terms that will be used in determining how this exemption applies to particular derivative transactions and the parties to those transactions.

Since the Dodd-Frank Act mandates the CFTC to promulgate rules to define these terms, the full impact of the Dodd-Frank Act on our hedging activities is uncertain at this time.

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Our business is subject to federal, state, provincial and local laws and regulations with respect to environmental, safety and other regulatory matters and the cost of compliance with, violation of or liabilities under, such laws and regulations could adversely affect our profitability.

Our operations, including those involving crude oil, condensate, natural gas liquids, refined products, renewables, and crude oil and natural gas produced water, are subject to stringent federal, state, provincial and local laws and regulations relating to the protection of natural resources and the environment, health and safety, waste management, and transportation and disposal of such products and materials.

We face inherent risks of incurring significant environmental costs and liabilities due to handling of produced water and hydrocarbons, such as crude oil, condensate, natural gas liquids, gasoline, diesel, and biodiesel.

Our operations, including those involving crude oil, condensate, natural gas liquids, crude oil and natural gas produced water, are subject to stringent federal, state, provincial and local laws and regulations relating to the protection of natural resources and the environment, health and safety, waste management, and transportation and disposal of such products and materials.

We face inherent risks of incurring significant environmental costs and liabilities due to handling of produced water and hydrocarbons, such as crude oil, condensate and natural gas liquids.

For instance, our Water Solutions segment carries with it environmental risks, including the risk of leakage from the treatment plants to surface or subsurface soils, surface water or groundwater, or accidental spills.

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Liability under, or violation of, environmental laws and regulations could result in, among other things, the restriction or cancellation of operations, injunctions, fines and penalties, reputational damage, expenditures for remediation and liability for natural resource damages, property damage and personal injuries.

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

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

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

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

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

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

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Also, upon closure of certain facilities, such as at the end of their useful life, we have been and may be required to undertake environmental evaluations or cleanups.

Additionally, in order to conduct our operations, we must obtain and maintain numerous permits, approvals and other authorizations from various federal, state, provincial and local governmental authorities relating to produced water handling, discharge and disposal, air emissions, transportation and other environmental matters.

discharge and disposal, air emissions, transportation and other environmental matters.

These authorizations subject us to terms and conditions which may be onerous or costly to comply with, and that may require costly operational modifications to attain and maintain compliance.

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Changes in environmental laws and regulations occur frequently.

New laws or regulations, changes to existing laws or regulations, such as more stringent pollution control requirements or additional safety requirements, or more stringent interpretation or enforcement of existing laws and regulations, may adversely impact us, and could result in increased operating

costs and have a material and adverse effect on our activities and profitability.

For example, new or proposed laws or regulations governing the withdrawal, storage and use of surface water or groundwater necessary for hydraulic fracturing of wells may increase our costs for treatment of hydraulic fracturing flowback water (or affect our hydraulic fracturing customers’ ability to operate) and cause delays, interruption or termination of our water treatment operations, all of which could have a material and adverse effect on our consolidated results of operations and financial position.

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Internationally, the United Nations-sponsored “Paris Agreement” requires member states to individually determine and submit non-binding emissions reduction targets every five years after 2020.

Although the United States withdrew from the Paris Agreement on November 4, 2020, on January 20, 2021, President Biden signed executive orders recommitting the United States to the agreement and calling on the federal government to begin formulating the United States’ nationally determined emissions reduction targets under the agreement.

The United States withdrew from the Paris Agreement on November 4, 2020, and although former President Biden signed executive orders on January 20, 2021 recommitting the United States to the agreement and calling on the federal government to begin formulating the United States’ nationally determined emissions reduction targets under the agreement, on January 20, 2025, President Trump issued an Executive Order for the United States to again withdraw from the Paris Agreement.

Such withdrawal is expected to take effect in 2026.

Governmental, scientific, and public concern over the threat of climate change arising from GHG emissions has resulted in increasing political risks in the United States, including climate change related pledges made by certain candidates recently elected to public office.

These have included promises to limit emissions and curtail the production of oil and gas, such as through the cessation of leasing public land for hydrocarbon development.

For example, on January 27, 2021, President Biden issued an Executive Order that commits to substantial action on climate change, calling for, among other things, the increased use of zero-emissions vehicles by the federal government, the elimination of subsidies provided to the fossil fuel industry, and increased emphasis on climate-related risk across governmental agencies and economic sectors.

These have included promises to limit emissions and curtail the production of oil and gas, such

as through the cessation of leasing public land for hydrocarbon development.

For example, on January 27, 2021, former President Biden issued an Executive Order that commits to substantial action on climate change, calling for, among other things, the increased use of zero-emissions vehicles by the federal government, the elimination of subsidies provided to the fossil fuel industry, and increased emphasis on climate-related risk across governmental agencies and economic sectors.

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

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

Other actions that could be pursued by the Biden Administration may include the imposition of more restrictive requirements for the establishment of pipeline infrastructure or the permitting of liquified natural

gas export facilities.

Litigation risks are also increasing, as a number of cities and other local governments have sought to bring suit against the largest oil and natural gas companies in state or federal court, alleging, among other things, that such companies created public nuisances by producing fuels that contributed to climate change.

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New laws or regulations, or changes to existing laws or regulations in response to this perceived threat may adversely impact the oil and gas drilling industry.

Any current or proposed restrictions on hydraulic fracturing could lead to operational delays or increased operating costs and regulatory burdens that could make it more difficult or costly to perform hydraulic fracturing which would negatively impact our customer base resulting in an adverse effect on our profitability.

For example, on January 20, 2021, the Biden Administration placed a 60-day moratorium on new oil and gas leasing and drilling permits on federal lands, and on January 27, 2021, the DOI acting pursuant to an Executive Order from President Biden suspended the federal oil and gas leasing program indefinitely.

negatively impact our customer base resulting in an adverse effect on our profitability.

For example, on January 20, 2021, the Biden Administration placed a 60-day moratorium on new oil and gas leasing and drilling permits on federal lands, and on January 27, 2021, the DOI acting pursuant to an Executive Order from former President Biden suspended the federal oil and gas leasing program indefinitely.

Although the DOI announced the resumption of onshore oil and gas leasing in April 2022, the program is being significantly reformed, with 80 percent less land available for leasing from the acreage originally nominated.

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A critical habitat or suitable habitat designation could result in further material restrictions to federal land use and private land use and could delay, restrict or prohibit our customers’ land access or oil and gas development.

If adverse impact to species or damages to wetlands, habitat or natural resources occur or may occur as result of our or our customers’ activities, government entities or, at times, private parties may act to prevent such activities or seek damages for harm to species, habitat or natural resources resulting from our activities or our customers’ drilling, construction or releases of oil, wastes, hazardous substances or other regulated materials, which could reduce the demand for our services.

For example, on July 3, 2023, the USFWS proposed that the dunes sagebrush lizard, which is found in areas where we operate, be listed as endangered under the ESA.

The comment period on the proposed rule ended on October 2, 2023.

If an adverse impact to species or damages to wetlands, habitat or natural resources occurs or may occur as a result of our or our customers’ activities, government entities or, at times, private parties may act to prevent such activities or seek damages for harm to species, habitat or natural resources resulting from our activities or our customers’ drilling, construction or releases of oil, wastes, hazardous substances or other regulated materials, which could reduce the demand for our services.

For example, in May 2024, the dunes sagebrush lizard, which is found in areas where we operate, was listed as endangered under the ESA.

In addition, the lesser prairie-chicken, which can also be found in areas where we operate, was listed under the ESA effective March 27, 2023.

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New laws or regulations, or changes to existing laws or regulations, in response to this perceived threat may adversely impact the water disposal industry.

On certain specific occasions, state regulatory agencies have and could request that we suspend operations at one or multiple disposal facilities, pending further study of a location’s potential impact on seismic activity.

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

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

This idled well was subsequently plugged and abandoned.

In January 2024, the Texas Railroad Commission indefinitely suspended all deep oil and gas produced water injection in Culberson and Reeves counties, which directly impacted one of our disposal wells.

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Some of our operations are subject to the jurisdiction of the FERC and other operations may become subject in the future.

The FERC regulates the transportation of crude oil and refined products on interstate pipelines, among other things.

The FERC regulates the transportation of crude oil on interstate pipelines, among other things.

The FERC’s jurisdiction over oil pipelines derives from a 1906 amendment to the Interstate Commerce Act making oil pipelines common carriers subject to federal regulation.

The FERC has regulated oil pipelines under this authority since 1977, when legislation transferred jurisdiction to the FERC from the Interstate Commerce Commission.

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

The Energy Policy Act of 1992 directed the

FERC to establish a simplified and generally applicable ratemaking methodology for oil pipelines, keeping with its statutory mandate to ensure that oil pipelines’ rates are just and reasonable.

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

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

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

As a result of

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

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

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

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

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

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

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

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

our GP on the IDRs in the prior two quarters.

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

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We currently have outstanding exercisable warrants to purchase 2,125,000 common units at exercise prices ranging from $13.56 per unit to $16.28 per unit.

Any exercise of these warrants would cause dilution to existing common unitholders and may place downward pressure on the trading price of our common units.

Any exercise of these warrants would cause dilution to existing common unitholders

and may place downward pressure on the trading price of our common units.

All outstanding warrants are currently exercisable and any unexercised warrants will expire on the tenth anniversary of the date of issuance.

The warrants will not participate in

cash distributions.

The warrants will not participate in cash distributions.

For additional information related to the warrants, see Note 9 to our consolidated financial statements included in this Annual Report.

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In general, our unitholders are entitled to a deduction for the interest we have paid or accrued on indebtedness properly allocable to our business during our taxable year.

However, under the Act signed into law by the President of the United States on December 22, 2017, beginning in tax year 2018, the deductibility of net interest expense is limited to 30% of our adjusted taxable income.

However, under the Act signed into law by President Trump on December 22, 2017, beginning in tax year 2018, the deductibility of net interest expense is limited to 30% of our adjusted taxable income.

For tax years beginning after December 31, 2017 and before January 1, 2022, the Act calculates adjusted taxable income using an EBITDA-based calculation.

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Imposition of any such taxes may substantially reduce the cash available for distribution to our unitholders.

Our Partnership Agreement provides that, if a law is enacted or existing law is modified or interpreted in a manner that subjects us to entity-level taxation, the minimum quarterly distribution amount and the target distribution amounts may be adjusted to reflect the impact of that law on us.

Our Partnership Agreement provides that, if a law is

enacted or existing law is modified or interpreted in a manner that subjects us to entity-level taxation, the minimum quarterly distribution amount and the target distribution amounts may be adjusted to reflect the impact of that law on us.

The tax treatment of publicly traded partnerships or an investment in our common units could be subject to potential legislative, judicial or administrative changes and differing interpretations, possibly on a retroactive basis.

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

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

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

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

Similarly, taking advantage of opportunities to reduce our existing debt, such as debt exchanges, debt repurchases, or modifications of our existing debt could result in “cancellation of indebtedness income” being allocated to our unitholders as taxable income without any common unit distribution.

Our unitholders may not receive cash distributions from us equal to their share of our taxable income or even equal to the actual tax liability that results from that income.

Our unitholders may not receive cash

distributions from us equal to their share of our taxable income or even equal to the actual tax liability that results from that income.

Certain actions that we may take, such as issuing additional units, may increase the federal income tax liability of unitholders.

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

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

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

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

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

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

The IRS may challenge our valuation methods, or our allocation of the Internal Revenue Code Section 743(b) adjustment attributable to our

tangible and intangible assets, and allocations of taxable income, gain, loss and deduction between the GP and certain of our unitholders.

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

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A holder of Preferred Units will be required to recognize a gain or loss on a sale of Preferred Units equal to the difference between the amount realized by such holder and such holder’s tax basis in the Preferred Units sold.

The amount realized generally will equal the sum of the cash and the fair market value of other property such holder receives in exchange for such Preferred Units.

The amount realized generally will equal the sum of the cash and the fair market value of other property such holder receives in exchange

for such Preferred Units.

Subject to general rules requiring a blended basis among multiple partnership interests, the tax basis of a Preferred Unit will generally be equal to the sum of the cash and the fair market value of other property paid by the holder of Preferred Units to acquire such Preferred Unit.

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Disruptions in the supply of product and in the crude oil and natural gas liquids commodities sector overall for an extended or near term period of time could result in counterparty defaults on our derivative and physical purchase and sale contracts.

This could impair our ability to obtain supply to fulfill our sales delivery commitments or obtain supply at reasonable prices, which could result in decreased gross margins and profitability, thereby impairing our ability to make payments on our debt obligations or distributions to our unitholders.

This could impair our ability to obtain supply

to fulfill our sales delivery commitments or obtain supply at reasonable prices, which could result in decreased gross margins and profitability, thereby impairing our ability to make payments on our debt obligations or distributions to our unitholders.

If we fail to maintain an effective system of internal control, including internal control over financial reporting, we may be unable to report our financial results accurately or prevent fraud, which would likely have a negative impact on the market price of our common units.

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An act of terror, or political unrest, in any of the major energy producing regions of the world could potentially result in disruptions in the supply of crude oil and natural gas, which could have a material impact on both availability and price.

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

refined and renewables products to our locations.

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

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

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

What changed 10-K

Item 1A. Risk Factors