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Interest Rate Risk
+Added: Long-Term Debt
A portion of our long-term debt is variable-rate debt.
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The ABL Facility is variable-rate debt with interest rates that are generally indexed to the prime rate or SOFR.
−Removed: At March 31, 2024, there were no borrowings under the ABL Facility.
+Added: At March 31, 2025, $109.0 million was outstanding under the ABL Facility at a weighted average interest rate of 9.50%.
+Added: A change in interest rates of 0.125% would result in an increase or decrease of our annual interest expense of $0.1 million, based on borrowings outstanding at March 31, 2025.
The Term Loan B is variable-rate debt with interest rates that are generally indexed to the SOFR.
−Removed: At March 31, 2024, there was $700.0 million of outstanding borrowings under the Term Loan B at a weighted average interest rate of 5.33% plus a margin of 4.50%.
+Added: At March 31, 2025, $693.0 million was outstanding under the Term Loan B with an interest rate of SOFR of 4.32% plus a margin of 3.75%.
A change in interest rates of 0.125% would result in an increase or decrease of our annual interest expense of $0.9 million, based on borrowings outstanding at March 31, 2025.
−Removed: In March 2024, we entered into a $200.0 million interest rate swap to reduce the variability of cash outflows associated with our floating-rate, SOFR-based borrowings, including borrowings on the Term Loan B.
−Removed: An increase of 10% in the value of the underlying interest rate swap would result in a net change in the fair value of our interest rate swap of $0.1 million at March 31, 2024.
−Removed: The current distribution rate for the Class B Preferred Units is a floating rate of the three-month London Interbank Offered Rate (“LIBOR”) interest rate (5.3314% for the quarter ended March 31, 2024) plus a spread of 7.213%.
+Added: Interest Rate Swaps
+Added: In March and April 2024, we entered into interest rate swaps totaling $400.0 million to reduce the variability of cash outflows associated with our floating-rate, SOFR-based borrowings, including borrowings on the Term Loan B.
+Added: In September 2024, for the $200.0 million interest rate swap entered into in April 2024, we entered into a transaction to extend the original maturity date and to blend the existing swap rate (see Note 10 to our consolidated financial statements included in this Annual Report for a further discussion).
+Added: An increase of 10% in the value of the underlying interest rate swaps would result in a net change in the fair value of our interest rate swaps of $0.3 million at March 31, 2025.
+Added: Preferred Unit Distributions
+Added: The current distribution rate for the Class B Preferred Units is a floating rate of the three-month CME Term SOFR plus a tenor spread adjustment plus a spread of 7.213% (see Note 9 to our consolidated financial statements included in this Annual Report for a further discussion).
A change in interest rates of 0.125% would result in an increase or decrease of our Class B Preferred Unit distribution of $0.1 million, based on the Class B Preferred Units outstanding at March 31, 2025.
−Removed: Effective July 3, 2023, the reference to LIBOR in the formulation for the distribution rate in these securities was replaced with three-month CME Term SOFR, as calculated and published by CME Group Benchmark Administration, Ltd., plus a tenor spread adjustment of 0.26161% in accordance with the Adjustable Interest Rate (LIBOR) Act (“LIBOR Act”), and the rules implementing the LIBOR Act.
−Removed: On April 15, 2024, the distributions for 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 our amended and restated limited partnership agreement (“Partnership Agreement”)) plus a spread of 7.384%.
−Removed: 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 accordance with our Partnership Agreement) plus a spread of 7.00% (“Class D Variable Rate”, as defined in our Partnership Agreement).
−Removed: Each Class D Variable Rate election shall be effective for at least four quarters following such election.
+Added: The current distribution rate for the Class C Preferred Units is a floating rate of the three-month CME Term SOFR plus a spread of 7.384% (see Note 9 to our consolidated financial statements included in this Annual Report for a further discussion).
+Added: A change in interest rates of 0.125% would result in an increase or decrease of our Class C Preferred Unit distribution of less than $0.1 million, based on the Class C Preferred Units outstanding at March 31, 2025.
+Added: The current distribution rate for the Class D Preferred Units is a floating rate of the three-month CME Term SOFR plus a spread of 7.00%, as well as a 1.0% rate increase as we exceeded the adjusted total leverage ratio (as defined in the amended and restated limited partnership agreement) for the quarter ended March 31, 2025 (see Note 9 to our consolidated financial statements included in this Annual Report for a further discussion).
+Added: A change in interest rates of 0.125% would result in an increase or decrease of our Class D Preferred Unit distribution of $0.2 million, based on the Class D Preferred Units outstanding at March 31, 2025.
Commodity Price Risk
Our operations are subject to certain business risks, including commodity price risk.
−Removed: 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.
+Added: Commodity price risk is the risk that the market value of crude oil or natural gas liquids will change, either favorably or unfavorably, in response to changing market conditions.
Procedures and limits for managing commodity price risks are specified in our market risk policy.
Open commodity positions and market price changes are monitored daily and are reported to senior management and to marketing operations personnel.
−Removed: The crude oil, natural gas liquids, and refined and renewables products industries are “margin-based” and “cost-plus” businesses in which our realized margins depend on the differential of sales prices over our supply costs.
+Added: The crude oil and natural gas liquids industries are “margin-based” and “cost-plus” businesses in which our realized margins depend on the differential of sales prices over our supply costs.
We have no control over market conditions.
−Removed: As a result, our profitability may be impacted by sudden and significant changes in the price of crude oil, natural gas liquids, and refined and renewables products.
+Added: As a result, our profitability may be impacted by sudden and significant changes in the price of crude oil and natural gas liquids.
We engage in various types of forward contracts and financial derivative transactions to reduce the effect of price volatility on our product costs, to protect the value of our inventory positions, and to help ensure the availability of product during periods of short supply.
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Although we use financial derivative instruments to reduce the market price risk associated with forecasted transactions, we do not account for financial derivative transactions as hedges.
−Removed: All changes in the fair value of our physical
−Removed: 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, and within cash flows from operations in our consolidated statements of cash flows.
+Added: 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, and within cash flows from operations in our consolidated statements of cash flows.
Management’s Discussion and Analysis of Financial Condition and Results of Operations–Critical Accounting Estimates” for a discussion of how we determine the fair value of our financial derivative instruments.
−Removed: The following table summarizes the hypothetical impact on the March 31, 2024 fair value of our commodity derivatives of an increase of 10% in the value of the underlying commodity (in thousands):
+Added: The following table summarizes the hypothetical impact on the March 31, 2025 fair value of our commodity derivatives of an increase of 10% in the value of the underlying commodity.
+Added: Amounts in the table below do not include commodity derivatives classified as either held for sale or discontinued operations within our March 31, 2025 and 2024 consolidated balance sheets (see Note 18 to our consolidated financial statements included in this Annual Report).
To Fair Value
−Removed: Crude oil (Water Solutions segment) $ (1,504)
+Added: (in thousands)
Crude oil (Crude Oil Logistics segment) $ 322
−Removed: Propane (Liquids Logistics segment) $ (1,432)
Butane (Liquids Logistics segment) $ (5,116)
−Removed: Refined Products (Liquids Logistics segment) $ (2,867)
−Removed: Other Products (Liquids Logistics segment) $ (912)
−Removed: Canadian dollars (Liquids Logistics segment) $ 124
+Added: Other (Liquids Logistics segment) $ (83)
Changes in commodity prices may also impact the volumes that we are able to transport, dispose, store and market, which also impact our cash flows.
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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.