NGL Energy Partners LP 10-K

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview NGL Energy Partners LP, a Delaware master limited partnership (“we,” “us,” “our,” or the “Partnership”), is a diversified midstream energy partnership that transports, treats, recycles and disposes of produced and flowback water generated as part of the energy production process as well as transports, stores, markets and provides other logistics services for crude oil and liquid hydrocarbons. NGL Energy Holdings LLC serves as our general partner (“GP”). At March 31, 2025, our operations included three segments as discussed below. Sale of Refined Products Business and Exiting Biodiesel Business As of March 31, 2025, we completed winding down our biodiesel business (see Note 1 to our consolidated financial statements included in this Annual Report for a further discussion). On March 17, 2025, we signed a purchase and sale agreement to sell our refined products business, including certain working capital items, to a third-party (see Note 1 to our consolidated financial statements included in this Annual Report for a further discussion). This sale closed on April 30, 2025. The sale of our refined products business and winding down of our biodiesel business represent a strategic shift in our operations and will have a significant effect on our operations and financial results going forward. Accordingly, the results of operations and cash flows for our refined products and biodiesel businesses within our Liquids Logistics segment have been classified as discontinued operations for all periods presented and prior periods have been retrospectively adjusted in the consolidated statements of operations and consolidated statements of cash flows (see Note 18 to our consolidated financial statements included in this Annual Report for a further discussion). Sale of Certain Natural Gas Liquids Terminals and Most of Our Wholesale Propane Business On February 5, 2025, we signed a purchase and sale agreement to sell 17 of our natural gas liquids terminals, most of our wholesale propane business, our interest in an unconsolidated entity and working capital to a third-party (see Note 1 to our consolidated financial statements included in this Annual Report for a further discussion). This sale closed on April 30, 2025. 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. 52 Water Solutions 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. We operate in a number of the most prolific crude oil and natural gas producing areas in the United States including the Delaware Basin in New Mexico and Texas, the Denver-Julesburg (“DJ”) Basin in Colorado and the Eagle Ford Basin in Texas. With a system that handled approximately 958.3 million barrels of produced water across its areas of operation during the year ended March 31, 2025, we believe that we are the largest independent produced water transportation and disposal company in the United States. The opportunity to generate revenue in our Water Solutions segment is driven in large part by the level of crude oil production in the areas where our facilities are located. Recently, our disposal volumes have been positively impacted by the increase in the level of crude oil production, particularly in the Delaware and Eagle Ford Basins, due to stable crude oil prices. Lower crude oil prices provide producers with less incentive to drill and complete new wells, which results in lower production and negatively impacts our disposal volumes. Our Water Solutions segment generated operating income of $311.5 million during the year ended March 31, 2025, compared to operating income of $231.3 million during the year ended March 31, 2024. Crude Oil Logistics Our Crude Oil Logistics segment purchases crude oil from producers and marketers and transports it to refineries or for resale at pipeline injection stations, storage terminals, barge loading facilities, rail facilities 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 with acreage dedications and which include minimum volume commitments on our storage tanks and owned and leased pipelines. Most of our contracts to purchase or sell crude oil are at floating prices that are indexed to published rates in active markets such as Cushing, Oklahoma, St. James, Louisiana, and Magellan East Houston. We attempt to reduce our exposure to price fluctuations by using back-to-back physical contracts whenever possible. When back-to-back physical contracts are not optimal, we enter into financially settled derivative contracts as economic hedges of our physical inventory, physical sales and physical purchase contracts. We use our transportation assets to move crude oil from the wellhead to the highest value market. Spreads between crude oil prices in different markets can fluctuate, which may expand or limit our opportunity to generate margins by transporting crude oil to different markets. The following table summarizes the range of low and high crude oil spot prices per barrel of New York Mercantile Exchange (“NYMEX”) West Texas Intermediate Crude Oil at Cushing, Oklahoma for the periods indicated and the prices at period end: Crude Oil Spot Price Per Barrel Year Ended March 31, Low High At Period End 2025 $ 66.75 $ 86.91 $ 71.48 2024 $ 67.12 $ 93.68 $ 83.17 2023 $ 66.74 $ 122.11 $ 75.67 We believe volatility in commodity prices will continue, and our ability to adjust to and manage this volatility may impact our financial results. Our Crude Oil Logistics segment generated operating income of $46.1 million during the year ended March 31, 2025, compared to operating income of $52.1 million during the year ended March 31, 2024. 53 Liquids Logistics Our Liquids Logistics segment conducts supply operations for natural gas liquids to commercial, retail and industrial customers across the United States and Canada. These operations are conducted through our five owned terminals, third-party storage and terminal facilities, nine common carrier pipelines and a fleet of leased railcars (updated for the transactions discussed above). We also provide services for marine exports of butane through our facility located in Chesapeake, Virginia and we also own a propane pipeline in Michigan. We attempt to reduce our exposure to price fluctuations by using back-to-back physical contracts and pre-sale agreements that allow us to lock in a margin on a percentage of our winter volumes. We also enter into financially settled derivative contracts as economic hedges of our physical inventory, physical sales and physical purchase contracts. Our wholesale liquids business is a “cost-plus” business that can be affected by both price fluctuations and volume variations. We establish our selling price based on a pass-through of our product supply, transportation, handling, storage, and capital costs plus a margin. Weather conditions and gasoline blending can have a significant impact on the demand for propane and butane, and sales volumes and prices are typically higher during the colder months of the year. Consequently, our revenues, operating profits, and operating cash flows are typically lower in the first and second quarters of our fiscal year. The following table summarizes the range of low and high propane spot prices per gallon at Conway, Kansas, and Mt. Belvieu, Texas, two of our main pricing hubs, for the periods indicated and the prices at period end: Conway, Kansas Mt. Belvieu, Texas Propane Spot Price Per Gallon Propane Spot Price Per Gallon Year Ended March 31, Low High At Period End Low High At Period End 2025 $ 0.61 $ 0.99 $ 0.83 $ 0.49 $ 1.01 $ 0.90 2024 $ 0.49 $ 0.91 $ 0.78 $ 0.53 $ 0.97 $ 0.84 2023 $ 0.63 $ 1.34 $ 0.74 $ 0.64 $ 1.39 $ 0.78 The following table summarizes the range of low and high butane spot prices per gallon at Mt. Belvieu, Texas for the periods indicated and the prices at period end: Butane Spot Price Per Gallon Year Ended March 31, Low High At Period End 2025 $ 0.79 $ 1.26 $ 0.95 2024 $ 0.58 $ 1.14 $ 0.98 2023 $ 0.85 $ 1.65 $ 0.92 We believe volatility in commodity prices will continue, and our ability to adjust to and manage this volatility may impact our financial results. Our Liquids Logistics segment generated operating income of $14.1 million during the year ended March 31, 2025, compared to an operating loss of $13.2 million during the year ended March 31, 2024. 54 Consolidated Results of Operations The following table summarizes our consolidated statements of operations for the periods indicated: Year Ended March 31, 2025 2024 2023 (in thousands) Revenues $ 3,469,186 $ 4,153,307 $ 5,679,020 Cost of sales 2,507,077 3,185,434 4,689,414 Operating expenses 297,686 299,605 304,589 General and administrative expense 55,593 121,625 71,483 Depreciation and amortization 254,732 266,114 273,108 Loss on disposal or impairment of assets, net 31,448 115,936 86,776 Revaluation of liabilities (6,705) 2,680 9,665 Operating income 329,355 161,913 243,985 Equity in earnings of unconsolidated entities 6,565 4,120 4,120 Interest expense (280,078) (269,804) (275,438) (Loss) gain on early extinguishment of liabilities, net — (55,281) 6,177 Other income, net 4,262 2,782 30,410 Income (loss) from continuing operations before income taxes 60,104 (156,270) 9,254 Income tax benefit (expense) 4,885 (1,458) (219) Income (loss) from continuing operations 64,989 (157,728) 9,035 (Loss) income from discontinued operations, net of tax (21,826) 14,604 43,457 Net income (loss) 43,163 (143,124) 52,492 Less: Net income from continuing operations attributable to nonredeemable noncontrolling interests (3,749) (631) (1,106) Less: Net income from continuing operations attributable to redeemable noncontrolling interests (46) — — Net income (loss) attributable to NGL Energy Partners LP $ 39,368 $ (143,755) $ 51,386 Items Impacting the Comparability of Our Financial Results Our current and future results of operations may not be comparable to our historical results of operations for the periods presented due to commodity price volatility, demand fluctuations, acquisitions, dispositions and other transactions. Recent Developments Dispositions Disposition transactions impact the comparability of our results of operations between our current and prior fiscal years. See Note 1 and Note 17 to our consolidated financial statements included in this Annual Report for a discussion of dispositions that occurred during the current and prior fiscal years. Other Developments Seismic Activity The subsurface injection of produced water for disposal has been associated with induced seismic events in Texas and New Mexico. While these events have been of relatively low magnitude, industry and relevant state regulators are, nevertheless, taking proactive measures to attempt to prevent similar induced seismic events. More specifically, we are engaged in various collaborative industry efforts with other disposal operators and relevant state regulatory agencies, working to collect and review data, enhance understanding of regional fault systems, and ultimately develop and implement appropriate longer-term mitigation strategies. As part of this effort, we have implemented reductions in injected volumes at certain facilities, and where appropriate have temporarily shut-in facilities. To date, due to the capacity of our integrated system in the affected areas, the diverse locations of our disposal facilities, and the connectivity of our system, our ability to dispose of produced water has not been materially impacted by these actions, and with our unique positioning outside of the affected areas, we have the ability to grow our asset base. 55 Seasonality Seasonality impacts our Liquids Logistics segment. Consequently, for our Liquids Logistics segment, revenues, operating profits and operating cash flows are generated mostly in the third and fourth quarters of our fiscal year. We generally borrow under our asset-based revolving credit facility (“ABL Facility”) to supplement our operating cash flows during the periods in which we are building inventory (see “–Liquidity, Sources of Capital and Capital Resource Activities–General”). Subsequent Events See Note 20 to our consolidated financial statements included in this Annual Report for a discussion of transactions that occurred subsequent to March 31, 2025. Segment Operating Results for the Years Ended March 31, 2025 and 2024 Water Solutions The following table summarizes the operating results of our Water Solutions segment for the periods indicated. Year Ended March 31, 2025 2024 Change (in thousands, except per barrel and per day amounts) Revenues: Water disposal service fees $ 599,870 $ 572,972 $ 26,898 Sale of recovered crude oil 109,008 107,367 1,641 Recycled water 7,544 9,785 (2,241) Other revenues 39,265 40,694 (1,429) Total revenues 755,687 730,818 24,869 Expenses: Cost of sales-excluding impact of derivatives 7,848 10,146 (2,298) Derivative (gain) loss (5,001) 1,148 (6,149) Operating expenses 214,928 212,052 2,876 General and administrative expenses 6,120 5,417 703 Depreciation and amortization expense 217,227 214,480 2,747 Loss on disposal or impairment of assets, net 9,813 53,639 (43,826) Revaluation of liabilities (6,705) 2,680 (9,385) Total expenses 444,230 499,562 (55,332) Segment operating income $ 311,457 $ 231,256 $ 80,201 Produced water processed (barrels per day) Delaware Basin 2,303,142 2,123,337 179,805 Eagle Ford Basin 175,251 142,374 32,877 DJ Basin 146,956 150,426 (3,470) Other Basins — 740 (740) Total 2,625,349 2,416,877 208,472 Recycled water (barrels per day) 116,058 84,212 31,846 Total (barrels per day) 2,741,407 2,501,089 240,318 Skim oil sold (barrels per day) (1) 4,268 3,992 276 Service fees for produced water processed ($/barrel) (2)(3) $ 0.63 $ 0.65 $ (0.02) Recovered crude oil for produced water processed ($/barrel) (2) $ 0.11 $ 0.12 $ (0.01) Operating expenses for produced water processed ($/barrel) (2) $ 0.22 $ 0.24 $ (0.02) (1) As of March 31, 2023, approximately 34,380 barrels of skim oil were stored and were sold during the year ended March 31, 2024. (2) Total produced water barrels processed during the years ended March 31, 2025 and 2024 were 958,252,275 and 884,576,981, respectively. These amounts do not include 49,861,950 barrels and 63,968,944 barrels for the years ended March 31, 2025 and 2024, respectively, related to payments made by certain producers for committed volumes not delivered, as discussed further below. In addition, water pipeline revenue, which is included in Other Revenues, includes payments from a producer for 19,257,873 committed barrels not delivered during the year ended March 31, 2025. 56 (3) Excluding payments made by certain producers for committed volumes not delivered and the one-time item discussed below, service fees for produced water processed ($/barrel) would have been $0.60/barrel and $0.61/barrel during the years ended March 31, 2025 and 2024, respectively. Water Disposal Service Fee Revenues. The increase was due primarily to an increase in produced water volumes processed from contracted customers and higher fees charged for interruptible spot volumes. These increases were partially offset by the expiration of certain higher fee per barrel contracts which were replaced with lower fee per barrel contracts with an extended term and higher volumes received under contracts with lower fees per barrel. There was also a decrease in payments made by certain producers for committed volumes not delivered. In addition, during July 2023, we entered into a transaction in which a portion of the total consideration received was allocated to revenue due to the termination of a minimum volume water disposal contract (see Note 17 to our consolidated financial statements included in this Annual Report). Recovered Crude Oil Revenues. The increase was due primarily to an increase in skim oil barrels sold due to more skim oil recovered from receiving more water in higher oil cut basins, partially offset by lower realized crude oil prices received from the sale of skim oil barrels. Also, during the year ended March 31, 2024, we sold approximately 34,380 barrels of skim oil that were stored as of March 31, 2023 due to tighter pipeline specifications. Recycled Water Revenues. Revenue from recycled water includes the sale of produced water and recycled water for use in our customers’ completion activities. The decrease was due primarily to lower pricing for recycled water, partially offset by higher recycled water volumes related to timing of water to be used in completions. Other Revenues. Other revenues primarily include reimbursements from construction projects, booster operating fees and generator rentals, water pipeline revenues, solids disposal revenues, land surface use revenues and brackish non-potable water revenues. The decrease was due primarily to lower land surface use revenues, mining revenues and lease revenue from certain surface use and compensation agreements primarily due to the sale of our ranches in April 2024 (see Note 17 to our consolidated financial statements included in this Annual Report). We also had lower reimbursements from construction projects, booster operating fees and generator rentals. These decreases were partially offset by higher water pipeline revenue, including payments from a producer for committed volumes not delivered, due to our expanded Lea County Express Pipeline system (“LEX II”) commencing operations during the three months ended December 31, 2024. Cost of Sales-Excluding Impact of Derivatives . The decrease was due primarily to lower recycling costs and a decrease in disposal fees paid to third-parties, partially offset by costs incurred that will be reimbursed by producers for generator and fuel costs at various booster stations. Derivative (Gain) Loss . We enter into derivatives in our Water Solutions segment to protect against the risk of a decline in the market price of the crude oil we expect to recover when processing produced water and selling recovered skim oil. During the year ended March 31, 2025, we had $5.0 million of net unrealized losses on derivatives and $10.0 million of net realized gains on derivatives. During the year ended March 31, 2024, we had $0.4 million of net unrealized losses on derivatives and $0.8 million of net realized losses on derivatives. Operating and General and Administrative Expenses . The increase was due primarily to higher royalty expense due to volumes related to the LEX II pipeline commencing operations and increased volumes at certain other saltwater disposal wells, higher business insurance expense for remediation costs incurred and lower severance taxes in the prior year as a result of a severance tax refund in September 2023 related to prior periods. These increases were partially offset by lower chemical expense due to purchasing fewer chemicals and using them more efficiently and lower repairs and maintenance expense due to the timing of repairs and tank cleaning. Depreciation and Amortization Expense . The increase was due primarily to depreciation of newly developed facilities and infrastructure, partially offset by certain long-term assets being fully amortized, impaired or sold during the fiscal years ended March 31, 2024 and 2025. Loss on Disposal or Impairment of Assets, Net . During the year ended March 31, 2025, we recorded a net loss of $15.1 million primarily related to the write down of the value of certain saltwater disposal wells and other assets as well as abandonment of certain capital projects and the retirement of certain other assets. We also recorded a loss of $8.0 million related to the write down of certain investments in unconsolidated entities and related assets to fair value less cost to sell (see Note 18 to our consolidated financial statements included in this Annual Report). In addition, we recorded a $3.4 million loss from the settlement of a dispute related to a force majeure event, which resulted in the plugging and abandoning of a disposal well in a prior period. Lastly, we recorded a net gain of $10.1 million primarily related to the sale of certain assets (see Note 17 to our consolidated financial statements included in this Annual Report) and a gain of $6.5 million from insurance recoveries 57 for certain saltwater disposal facilities and boosters damaged in a prior period. During the year ended March 31, 2024, we recorded a net loss of $37.5 million primarily related to the write down of the value of certain saltwater disposal wells as well as the abandonment of certain capital projects and the retirement of certain assets, a net loss of $17.6 million primarily related to the sale of certain assets and an impairment of $2.4 million for certain leases due to underutilization of certain freshwater wells. In addition, we recorded a gain of $3.9 million from insurance recoveries for certain saltwater disposal facilities and boosters damaged in a prior period. Revaluation of Liabilities. During the year ended March 31, 2025, there was a decrease in expense for the valuation of our contingent consideration liabilities related to royalty agreements acquired as part of certain business combinations due primarily to lower expected produced water volumes from our customers, resulting in a decrease to the expected future royalty payment. During the year ended March 31, 2024, there was an increase in expense for the valuation of our contingent consideration liabilities related to royalty agreements acquired as part of certain business combinations due primarily to higher expected production from new customers, resulting in an increase to the expected future royalty payment. Crude Oil Logistics The following table summarizes the operating results of our Crude Oil Logistics segment for the periods indicated: Year Ended March 31, 2025 2024 Change (in thousands, except per barrel amounts) Revenues: Crude oil sales $ 806,653 $ 1,597,238 $ (790,585) Crude oil transportation and other sales 73,249 59,373 13,876 Total revenues 879,902 1,656,611 (776,709) Expenses: Cost of sales-excluding impact of derivatives 771,526 1,514,370 (742,844) Derivative (gain) loss (2,872) 7,367 (10,239) Operating expenses 38,408 39,004 (596) General and administrative expenses 2,673 3,780 (1,107) Depreciation and amortization expense 25,070 36,922 (11,852) (Gain) loss on disposal or impairment of assets, net (1,004) 3,094 (4,098) Total expenses 833,801 1,604,537 (770,736) Segment operating income $ 46,101 $ 52,074 $ (5,973) Crude oil sold (barrels) 10,412 20,068 (9,656) Crude oil transported on owned pipelines (barrels) 22,238 25,611 (3,373) Crude oil storage capacity - owned and leased (barrels) (1) 5,232 5,232 — Crude oil storage capacity leased to third-parties (barrels) (1) 1,650 2,250 (600) Crude oil inventory (barrels) (1) 339 573 (234) Crude oil sold ($/barrel) $ 77.473 $ 79.591 $ (2.118) Cost per crude oil sold ($/barrel) (2) $ 74.100 $ 75.462 $ (1.362) Crude oil product margin ($/barrel) (2) $ 3.373 $ 4.129 $ (0.756) (1) Information is presented as of March 31, 2025 and March 31, 2024, respectively. (2) Cost and product margin per barrel excludes the impact of derivatives. Crude Oil Sales and Cost of Sales-Excluding Impact of Derivatives. The decreases in sales and cost of sales, excluding the impact of derivatives, were due primarily to lower sales volumes due to lower production on acreage dedicated to us in the DJ Basin during the year ended March 31, 2025, compared to the year ended March 31, 2024. Lower crude oil prices also contributed to the decrease. During the year ended March 31, 2025, the crude oil product margin decreased primarily due to lower volumes as discussed further above. Contributing to the decrease in product margin and margin per barrel was the expiration of certain higher-margin purchase contracts during the year ended March 31, 2024, which resulted in lower margin realized on barrels purchased during the year ended March 31, 2025. The decrease in margin per barrel for the year ended March 31, 2025, compared to the year ended March 31, 2024 was partially offset by higher price and quality differentials realized, and the sale 58 of the remaining pipeline transportation deficiency credits included in gross margin during the year ended March 31, 2025. Crude oil product margin calculations do not include gains and losses from derivatives that may offset the movement in the physical margin. Derivative (Gain) Loss. Our cost of sales during the year ended March 31, 2025 included $1.1 million of net realized losses on derivatives and $4.0 million of net unrealized gains on derivatives. Our cost of sales during the year ended March 31, 2024 included $58.4 million of net realized gains on derivatives and $65.8 million of net unrealized losses on derivatives. The amounts in the previous sentence for the year ended March 31, 2024 includes net realized gains of $60.9 million and net unrealized losses of $61.4 million associated with derivative instruments related to our hedge of the CMA Differential Roll, defined and discussed below under “–Non-GAAP Financial Measures.” Crude Oil Transportation and Other Sales. The increase was primarily due to higher tariff revenue on the Grand Mesa Pipeline as a result of signing a new shipper during the open season that ended January 5, 2024. Additionally, the year ended March 31, 2025 benefited from higher terminaling revenue from an acreage dedication in the Eagle Ford Basin and higher throughput revenue from crude oil transported on third-party pipelines. These increases were partially offset by lower storage fees at our Cushing terminal during the year ended March 31, 2025. During the year ended March 31, 2025, physical volumes on the Grand Mesa Pipeline averaged approximately 61,000 barrels per day, compared to approximately 70,000 barrels per day for the year ended March 31, 2024. Lower contracted volumes were shipped on the Grand Mesa Pipeline due to lower production on acreage dedicated to us in the DJ Basin. Operating and General and Administrative Expenses . The decrease was primarily due to lower utilities expense and lower materials and supplies expense on the Grand Mesa Pipeline and at our Cushing terminal from lower volumes flowing through the system during the year ended March 31, 2025, compared to the year ended March 31, 2024. In addition, the year ended March 31, 2025 benefited from lower cleaning, repairs and maintenance costs on our owned railcars, lower environmental costs at one of our terminals, and lower corporate cost allocations. These decreases were partially offset by higher incentive compensation expenses and higher ad valorem taxes assessed on the Grand Mesa Pipeline by the State of Colorado. Depreciation and Amortization Expense. The decrease was primarily due to certain assets becoming fully depreciated during the year ended March 31, 2024. (Gain) Loss on Disposal or Impairment of Assets, Net . During the year ended March 31, 2025, we recorded a net gain of $1.0 million primarily due to the gain on the sale of railcars (see Note 17 to our consolidated financial statements included in this Annual Report), partially offset by the write-down in value of linefill expected to be sold over the next four months and the loss on the sale of certain other assets. During the year ended March 31, 2024, we recorded a net loss of $3.1 million primarily due to the retirement or sale of certain assets. 59 Liquids Logistics The following table summarizes the operating results of our Liquids Logistics segment for the periods indicated. As discussed above, the operating results of our refined products and biodiesel businesses have been classified as discontinued operations for all periods presented and prior periods have been retrospectively adjusted. Year Ended March 31, 2025 2024 Change (in thousands, except per gallon amounts) Propane: Sales $ 755,646 $ 739,591 $ 16,055 Cost of sales-excluding impact of derivatives 721,372 692,649 28,723 Derivative (gain) loss (1,509) 2,463 (3,972) Product margin 35,783 44,479 (8,696) Butane: Sales 649,452 628,685 20,767 Cost of sales-excluding impact of derivatives 606,694 587,307 19,387 Derivative loss 14,136 2,771 11,365 Product margin 28,622 38,607 (9,985) Other products: Sales-excluding impact of derivatives 414,985 383,998 30,987 Cost of sales-excluding impact of derivatives 393,935 367,293 26,642 Derivative (gain) loss (272) 25 (297) Product margin 21,322 16,680 4,642 Service: Sales 13,529 14,151 (622) Cost of sales 1,636 1,379 257 Product margin 11,893 12,772 (879) Expenses: Operating expenses 44,350 48,549 (4,199) General and administrative expenses 7,208 7,281 (73) Depreciation and amortization expense 9,408 9,963 (555) Loss on disposal or impairment of assets, net 22,596 59,923 (37,327) Total expenses 83,562 125,716 (42,154) Segment operating income (loss) $ 14,058 $ (13,178) $ 27,236 Natural gas liquids storage capacity - owned and leased (gallons) (1) 52,721 122,831 (70,110) Propane sold (gallons) 760,287 811,035 (50,748) Propane sold ($/gallon) $ 0.994 $ 0.912 $ 0.082 Cost per propane sold ($/gallon) (2) $ 0.949 $ 0.854 $ 0.095 Propane product margin ($/gallon) (2) $ 0.045 $ 0.058 $ (0.013) Propane inventory (gallons) (1) 11,833 35,177 (23,344) Butane sold (gallons) 516,202 537,015 (20,813) Butane sold ($/gallon) $ 1.258 $ 1.171 $ 0.087 Cost per butane sold ($/gallon) (2) $ 1.175 $ 1.094 $ 0.081 Butane product margin (loss) ($/gallon) (2) $ 0.083 $ 0.077 $ 0.006 Butane inventory (gallons) (1) 21,871 17,790 4,081 Other products sold (gallons) 277,495 263,422 14,073 Other products sold ($/gallon) $ 1.495 $ 1.458 $ 0.037 Cost per other products sold ($/gallon) (2) $ 1.420 $ 1.394 $ 0.026 Other products product margin ($/gallon) (2) $ 0.075 $ 0.064 $ 0.011 Other products inventory (gallons) (1) 8,556 5,623 2,933 (1) Information is presented as of March 31, 2025 and March 31, 2024, respectively. 60 (2) Cost and product margin (loss) per gallon excludes the impact of derivatives. Propane Sales and Cost of Sales-Excluding Impact of Derivatives. The increases in sales and cost of sales, excluding the impact of derivatives, were primarily due to higher prices during the quarter ended March 31, 2025 due to the cold weather experienced throughout the United States during the first two months of the quarter. Propane volumes decreased during the year ended March 31, 2025 due to lower contracted volumes and reduced retail customer demand. Propane product margins, excluding the impact of derivatives, decreased during the year ended March 31, 2025 primarily due to lower volumes. For most of the year ended March 31, 2025, we sold higher priced inventory into a market of declining prices, compared to the year ended March 31, 2024, when we were selling lower priced inventory into a market with rising prices. In addition, during the quarter ended March 31, 2025, due to an increase in demand due to the colder than normal weather, we were short product and had to purchase spot barrels at higher prices to fulfill term obligations, resulting in lower margins. Propane Derivative (Gain) Loss. Our cost of propane sales included $3.0 million of net unrealized losses on derivatives and $4.5 million of net realized gains on derivatives during the year ended March 31, 2025. During the year ended March 31, 2024, our cost of propane sales included $4.6 million of net unrealized gains on derivatives and $7.0 million of net realized losses on derivatives. Butane Sales and Cost of Sales-Excluding Impact of Derivatives. The increases in sales and cost of sales, excluding the impact of derivatives, were due primarily to higher butane prices during the year ended March 31, 2025. Butane product margins, excluding the impact of derivatives, increased during the year ended March 31, 2025, as compared to the year ended March 31, 2024, primarily due to higher prices, partially offset by lower volumes due to a weak gasoline blending season. Butane Derivative Loss. Our cost of butane sales during the year ended March 31, 2025 included $0.6 million of net unrealized gains on derivatives and $14.7 million of net realized losses on derivatives. Our cost of butane sales included $3.2 million of net unrealized losses on derivatives and $0.5 million of net realized gains on derivatives during the year ended March 31, 2024. Other Products Sales and Cost of Sales-Excluding Impact of Derivatives. The increases in sales and cost of sales, excluding the impact of derivatives, were primarily due to an increase in prices and volumes. Strong spot markets led to an increase in isobutane and natural gasoline sales and asphalt sales increased due to a consistent supply during the year ended March 31, 2025. Other products sales product margins, excluding the impact of derivatives, increased during the year ended March 31, 2025 due to the increase in volumes and prices, as discussed further above. Other Products Derivative (Gain) Loss. Our derivatives of other products included $0.3 million of net realized gains on derivatives during the year ended March 31, 2025. Our derivatives of other products during the year ended March 31, 2024 included $0.1 million of net realized gains on derivatives and $0.1 million of net unrealized losses on derivatives. Service Sales and Cost of Sales. The sales include storage, terminaling and transportation services income. Sales and cost of sales during the year ended March 31, 2025 remained consistent with the year ended March 31, 2024. Operating and General and Administrative Expenses. The decrease during the year ended March 31, 2025 compared to the year ended March 31, 2024 was primarily due to a decrease in incentive compensation due to lower than expected earnings, a decrease in travel and entertainment expenses due to our efforts in the prior year to visit all customers and lower office lease expense due to the sale of certain terminals in the prior year. Depreciation and Amortization Expense. The decrease was due to a customer relationship intangible asset being fully amortized as of June 30, 2023. Loss on Disposal or Impairment of Assets, Net. During the year ended March 31, 2025, we recorded a net loss of $22.6 million. The net loss was due to a goodwill impairment loss of $17.9 million in our Wholesale/Terminal reporting unit (see Note 5 to our consolidated financial statements included in this Annual Report). We also recorded a net loss of $7.3 million due to costs incurred related to the sale of certain natural gas liquid terminals and a net gain of $2.0 million for the sale of the Green Bay terminal discussed in Note 17 to our consolidated financial statements included in this Annual Report. During the year 61 ended March 31, 2024, we recorded a goodwill impairment loss of $69.2 million in our Wholesale/Terminal reporting unit (see Note 5 to our consolidated financial statements included in this Annual Report). In addition, we recorded a net gain of $8.5 million due to the sale of three natural gas liquids terminals and we recorded a net gain of $0.8 million related to the retirement or sale of certain other assets. Corporate and Other The operating loss within “Corporate and Other” includes the following components for the periods indicated: Year Ended March 31, 2025 2024 Change (in thousands) Other revenues: Service revenues $ 401 $ — $ 401 Cost of sales: Derivative gain — (937) 937 Expenses: General and administrative expenses 39,592 105,147 (65,555) Depreciation and amortization expense 3,027 4,749 (1,722) Loss (gain) on disposal or impairment of assets, net 43 (720) 763 Total expenses 42,662 109,176 (66,514) Operating loss $ (42,261) $ (108,239) $ 65,978 Service Revenues. These revenues relate to billings to the noncontrolling interest holders for usage of the airplanes acquired in June and October 2024. Cost of Sales - Derivative Gain. Our cost of sales during the year ended March 31, 2024 included $0.2 million of net realized losses on derivatives and $1.2 million of net unrealized gains on derivatives. We entered into economic hedges to protect our liquidity positions and leverage from a significant increase in commodity prices that drive our working capital demands. There were no open hedge positions that would impact cost of sales as of March 31, 2025. General and Administrative Expenses . The decrease during the year ended March 31, 2025 is primarily due to the increase in our accrual as of March 31, 2024, related to the LCT Capital, LLC (“LCT”) legal matter (see Note 8 to our consolidated financial statements included in this Annual Report and also in the section below discussing the segment operating results for the years ended March 31, 2024 and 2023). The decrease also relates to lower legal expenses as several large cases ended and lower business insurance expense as we paid an insurance company in the prior year for the release of any supplementary calls related to our former crude marine business. Compensation expense was also lower due to the elimination of the share-based compensation expense due to all outstanding long-term incentive plan awards being fully vested in November 2023. Depreciation and Amortization Expense. The decrease during the year ended March 31, 2025 was due to software that became fully depreciated during the year ended March 31, 2024. Loss (Gain) on Disposal or Impairment of Assets, Net. During the year ended March 31, 2025, we recorded a net loss of less than $0.1 million due to the write-off of information technology equipment. During the year ended March 31, 2024, we sold an airplane for a gain of $0.7 million. Equity in Earnings of Unconsolidated Entities Equity in earnings of unconsolidated entities was $6.6 million during the year ended March 31, 2025, compared to $4.1 million during the year ended March 31, 2024. The increase of $2.5 million during the year ended March 31, 2025 was due primarily to higher earnings from certain membership interests related to specific land and water services operations. 62 Interest Expense The following table summarizes the components of our consolidated interest expense for the periods indicated: Year Ended March 31, 2025 2024 Change (in thousands) Senior secured notes $ 182,000 $ 160,088 $ 21,912 Senior secured term loan “B” credit facility (“Term Loan B”) 63,118 11,275 51,843 ABL Facility 20,893 15,645 5,248 Senior unsecured notes — 40,829 (40,829) Other indebtedness 1,630 26,781 (25,151) Total debt interest expense 267,641 254,618 13,023 Amortization of debt issuance costs 12,010 15,701 (3,691) Unrealized loss (gain) on interest rate swaps 3,054 (515) 3,569 Realized gain on interest rate swaps (2,627) — (2,627) Total interest expense $ 280,078 $ 269,804 $ 10,274 The debt interest expense increased $13.0 million during the year ended March 31, 2025 primarily due to higher interest rates on the Term Loan B, the 8.125% senior secured notes due 2029 (“2029 Senior Secured Notes”) and the 8.375% senior secured notes due 2032 (“2032 Senior Secured Notes”). This was partially offset by the repurchase/redemption of the 6.125% senior unsecured notes due 2025 (“2025 Notes”) and the redemption of the 7.5% senior unsecured notes due 2026 (“2026 Notes”) (collectively, the “Senior Unsecured Notes”) during the year ended March 31, 2024. Also, in the prior year we had an interest accrual of $26.1 million, included in other indebtedness, related to the LCT legal matter (see Note 8 to our consolidated financial statements included in this Annual Report). Loss on Early Extinguishment of Liabilities, Net Loss on early extinguishment of liabilities, net was $55.3 million during the year ended March 31, 2024. During the year ended March 31, 2024, the net loss (inclusive of debt issuance costs written off) primarily relates to the call premium of $38.4 million paid for the early extinguishment of the outstanding 7.5% senior secured notes due 2026 (“2026 Senior Secured Notes”), the write-off of debt issuance costs and other expenses related to the repurchase/redemption of the 2026 Senior Secured Notes and Senior Unsecured Notes during the fiscal year. We did not repurchase any debt during the year ended March 31, 2025. See Note 7 to our consolidated financial statements included in this Annual Report for a further discussion of the debt instruments repurchased and redeemed. Other Income, Net Other income, net of $4.3 million during the year ended March 31, 2025 consisted primarily of a gain on the expiration of an option, realized and unrealized gains on marketable securities, interest income on loan receivables (see Note 2 to our consolidated financial statements included in this Annual Report for a further discussion) and unrealized losses on investments. Other income, net of $2.8 million during the year ended March 31, 2024 consisted primarily of interest income on loan receivables and cash on hand, income from the settlement of a dispute and income from excess distributions received from an equity method investee. Income Tax Benefit (Expense) Income tax benefit was $4.9 million during the year ended March 31, 2025, compared to income tax expense of $1.5 million during the year ended March 31, 2024. See Note 2 to our consolidated financial statements included in this Annual Report for a further discussion. Noncontrolling Interests - Redeemable and Nonredeemable Noncontrolling interests represent the portion of certain consolidated subsidiaries that are owned by third-parties. Noncontrolling interest income was $3.8 million during the year ended March 31, 2025, compared to $0.6 million during the year ended March 31, 2024. The increase of $3.2 million during the year ended March 31, 2025 was due primarily to higher income from certain water solutions operations. 63 Segment Operating Results for the Years Ended March 31, 2024 and 2023 Water Solutions The following table summarizes the operating results of our Water Solutions segment for the periods indicated. Year Ended March 31, 2024 2023 Change (in thousands, except per barrel and per day amounts) Revenues: Water disposal service fees $ 572,972 $ 524,689 $ 48,283 Sale of recovered crude oil 107,367 120,705 (13,338) Recycled water 9,785 13,841 (4,056) Other revenues 40,694 37,803 2,891 Total revenues 730,818 697,038 33,780 Expenses: Cost of sales-excluding impact of derivatives 10,146 9,737 409 Derivative loss 1,148 4,363 (3,215) Operating expenses 212,052 212,115 (63) General and administrative expenses 5,417 8,722 (3,305) Depreciation and amortization expense 214,480 207,081 7,399 Loss on disposal or impairment of assets, net 53,639 46,431 7,208 Revaluation of liabilities 2,680 9,665 (6,985) Total expenses 499,562 498,114 1,448 Segment operating income $ 231,256 $ 198,924 $ 32,332 Produced water processed (barrels per day) Delaware Basin 2,123,337 2,042,777 80,560 Eagle Ford Basin 142,374 119,458 22,916 DJ Basin 150,426 150,619 (193) Other Basins 740 14,483 (13,743) Total 2,416,877 2,327,337 89,540 Recycled water (barrels per day) 84,212 118,847 (34,635) Total (barrels per day) 2,501,089 2,446,184 54,905 Skim oil sold (barrels per day) (1) 3,992 3,764 228 Service fees for produced water processed ($/barrel) (2)(3) $ 0.65 $ 0.62 $ 0.03 Recovered crude oil for produced water processed ($/barrel) (2) $ 0.12 $ 0.14 $ (0.02) Operating expenses for produced water processed ($/barrel) (2) $ 0.24 $ 0.25 $ (0.01) (1) As of March 31, 2023, approximately 34,380 barrels of skim oil were stored and were sold during the year ended March 31, 2024. (2) Total produced water barrels processed during the years ended March 31, 2024 and 2023 were 884,576,981 and 849,477,938, respectively. These amounts do not include 63,968,944 barrels and 36,143,594 barrels for the years ended March 31, 2024 and 2023, respectively, related to payments made by certain producers for committed volumes not delivered, as discussed further below. (3) Excluding payments made by certain producers for committed volumes not delivered and the one-time item discussed below, service fees for produced water processed ($/barrel) would have been $0.61/barrel and $0.59/barrel during the years ended March 31, 2024 and 2023, respectively. Water Disposal Service Fee Revenues. The increase was due primarily to an increase in produced water volumes processed from contracted customers mainly in the Delaware Basin, increased fees from new contracts and higher fees charged for interruptible spot volumes. There was also an increase in payments made by certain producers for committed volumes not delivered. Service fees for produced water processed ($/barrel) also benefited from these deficiency payments. In addition, during July 2023, we entered into a transaction in which a portion of the total consideration received was allocated to revenue due to the termination of a minimum volume water disposal contract (see Note 17 to our consolidated financial statements included in this Annual Report). 64 Recovered Crude Oil Revenues. The decrease was due primarily to lower realized crude oil prices received from the sale of skim oil barrels, partially offset by an increase in skim oil barrels sold as a result of higher skim oil recovered from increased produced water processed. In addition, during the current fiscal year we sold 34,380 barrels of skim oil that were stored as of March 31, 2023 due to tighter pipeline specifications. Recycled Water Revenues. The decrease was due primarily to lower recycled water volumes related to timing of water to be used in completions. Other Revenues. The increase was due primarily to higher reimbursements from construction projects, booster operating fees and generator rentals, higher land surface use revenues and higher lease revenue from certain surface use and compensation agreements. These increases were partially offset by lower water pipeline revenues due to the expiration of certain pipeline commitment revenue in December 2022 and lower sales of brackish non-potable water related to the timing of our customers transitioning from brackish non-potable water to recycled water. Cost of Sales-Excluding Impact of Derivatives . The increase was due primarily to costs incurred that will be reimbursed by producers for generator and fuel costs at various booster stations. In addition, we incurred increased trucking expenses for skim oil sales during the year ended March 31, 2024. These increases were partially offset by lower recycling costs due to a decrease in recycling activity and lower purchases of brackish non-potable water from third-parties to meet customer needs. Derivative Loss. We enter into derivatives in our Water Solutions segment to protect against the risk of a decline in the market price of the crude oil we expect to recover when processing produced water and selling recovered skim oil. During the year ended March 31, 2024, we had $0.4 million of net unrealized losses on derivatives and $0.8 million of net realized losses on derivatives. During the year ended March 31, 2023, we had $4.5 million of net unrealized gains on derivatives and $8.8 million of net realized losses on derivatives. Operating and General and Administrative Expenses . The decrease was due primarily to lower chemical expense due to purchasing fewer chemicals and using chemicals more efficiently, lower overhead costs, lower generator rental expense due to renting fewer generators and lower severance taxes due to a decrease in revenue from recovered crude oil and a severance tax refund in September 2023 related to prior periods. These decreases were partially offset by higher operating expenses due to increased produced water volumes processed. Depreciation and Amortization Expense . The increase was due primarily to depreciation of newly developed facilities and infrastructure, partially offset by certain long-term assets being fully amortized or impaired during the fiscal years ended March 31, 2023 and 2024. Loss on Disposal or Impairment of Assets, Net. During the year ended March 31, 2024, we recorded a net loss of $37.5 million primarily related to the write down of the value of certain saltwater disposal wells as well as the abandonment of certain capital projects and the retirement of certain assets, a net loss of $17.6 million primarily related to the sale of certain assets and an impairment of $2.4 million for certain leases due to underutilization of certain freshwater wells. In addition, we recorded a gain of $3.9 million from insurance recoveries for certain saltwater disposal facilities and boosters damaged in a prior period. During the year ended March 31, 2023, we recorded a net loss of $26.3 million primarily related to the sale of certain assets and 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. We also recorded a loss of $0.5 million related to the termination of a joint marketing agreement. In addition, we recorded a gain of $2.1 million from an insurance recovery for a saltwater disposal facility damaged in a prior period. Revaluation of Liabilities. During the years ended March 31, 2024 and 2023, there was an increase in expense for the valuation of our contingent consideration liabilities related to royalty agreements acquired as part of certain business combinations due primarily to higher expected produced water volumes from our customers, resulting in an increase to the expected future royalty payment. 65 Crude Oil Logistics The following table summarizes the operating results of our Crude Oil Logistics segment for the periods indicated: Year Ended March 31, 2024 2023 Change (in thousands, except per barrel amounts) Revenues: Crude oil sales $ 1,597,238 $ 2,376,434 $ (779,196) Crude oil transportation and other sales 59,373 96,978 (37,605) Total revenues 1,656,611 2,473,412 (816,801) Expenses: Cost of sales-excluding impact of derivatives 1,514,370 2,274,089 (759,719) Derivative loss (gain) 7,367 (14,565) 21,932 Operating expenses 39,004 50,154 (11,150) General and administrative expenses 3,780 4,547 (767) Depreciation and amortization expense 36,922 46,577 (9,655) Loss on disposal or impairment of assets, net 3,094 31,086 (27,992) Total expenses 1,604,537 2,391,888 (787,351) Segment operating income $ 52,074 $ 81,524 $ (29,450) Crude oil sold (barrels) 20,068 25,497 (5,429) Crude oil transported on owned pipelines (barrels) 25,611 27,714 (2,103) Crude oil storage capacity - owned and leased (barrels) (1) 5,232 5,232 — Crude oil storage capacity leased to third-parties (barrels) (1) 2,250 1,501 749 Crude oil inventory (barrels) (1) 573 684 (111) Crude oil sold ($/barrel) $ 79.591 $ 93.204 $ (13.613) Cost per crude oil sold ($/barrel) (2) $ 75.462 $ 89.190 $ (13.728) Crude oil product margin ($/barrel) (2) $ 4.129 $ 4.014 $ 0.115 (1) Information is presented as of March 31, 2024 and March 31, 2023, respectively. (2) Cost and product margin per barrel excludes the impact of derivatives. Crude Oil Sales and Cost of Sales-Excluding Impact of Derivatives. The decreases in sales and cost of sales, excluding the impact of derivatives, were due primarily to lower sales volumes due to lower production on acreage dedicated to us in the DJ Basin during the year ended March 31, 2024, compared to the year ended March 31, 2023 and a decrease in crude oil prices year over year. Crude oil product margin from the sale of crude oil decreased from $102.3 million for the year ended March 31, 2023 to $82.9 million during the year ended March 31, 2024, primarily due to lower volumes and lower crude oil prices year over year. The lower crude oil prices resulted in lower contracted rates with certain producers, compared to the prior year when the contracted rates were higher due to the higher crude oil prices. We also realized lower contract differentials on certain other sales contracts. Crude oil product margin per barrel increased during the year ended March 31, 2024, compared to the year ended March 31, 2023, due to the sale of lower priced inventory into a market in which prices were increasing during certain periods of 2024. Whereas during the year ended March 31, 2023, we were selling higher priced inventory into a market in which prices were generally declining throughout the fiscal year. Crude oil product margin calculations does not include gains and losses from derivatives that may offset the movement in the physical margin. Derivative Loss (Gain). Our cost of sales during the year ended March 31, 2024 included $58.4 million of net realized gains on derivatives and $65.8 million of net unrealized losses on derivatives. The amounts in the previous sentence for the year ended March 31, 2024 included net realized gains of $60.9 million and net unrealized losses of $61.4 million associated with derivative instruments related to our hedge of the CMA Differential Roll, defined and discussed below under “–Non-GAAP Financial Measures.” Our cost of sales during the year ended March 31, 2023 included $35.5 million of net realized losses on derivatives and $50.1 million of net unrealized gains on derivatives. The amounts in the previous sentence for the year ended 66 March 31, 2023 includes net realized losses of $13.1 million and net unrealized gains of $23.8 million associated with derivative instruments related to our hedge of the CMA Differential Roll. Crude Oil Transportation and Other Sales. The decrease was primarily due to the sale of our marine assets on March 30, 2023, and lower pipeline tariff revenue due to the assignment of our commitment on a third-party pipeline. During the year ended March 31, 2024, physical volumes on the Grand Mesa Pipeline averaged approximately 70,000 barrels per day, compared to approximately 76,000 barrels per day for the year ended March 31, 2023. Lower contracted volumes were shipped on the Grand Mesa Pipeline due to lower production on acreage dedicated to us in the DJ Basin. Operating and General and Administrative Expenses . The decrease was primarily due to the sale of our marine assets on March 30, 2023. Additionally, the current year benefited from lower incentive compensation expense, as well as lower repairs and maintenance expense on leased railcars returned to the lessor in the prior year. Depreciation and Amortization Expense. The decrease was primarily due to the sale of our marine assets on March 30, 2023, lower depreciation expense due to certain of our railcar assets becoming fully depreciated during the year ended March 31, 2024 and the impairment of certain terminal assets in the prior year, which lowered their depreciable base. Loss on Disposal or Impairment of Assets, Net . During the year ended March 31, 2024, we recorded a net loss of $3.1 million primarily due to the retirement or sale of certain assets. During the year ended March 31, 2023, we recorded an impairment of $23.1 million related to an underperforming crude oil terminal and a loss of $8.0 million on the sale of our marine assets. 67 Liquids Logistics The following table summarizes the operating results of our Liquids Logistics segment for the periods indicated. As discussed above, the operating results of our refined products and biodiesel businesses have been classified as discontinued operations for all periods presented and prior periods have been retrospectively adjusted. Year Ended March 31, 2024 2023 Change (in thousands, except per gallon amounts) Propane: Sales $ 739,591 $ 1,161,129 $ (421,538) Cost of sales-excluding impact of derivatives 692,649 1,103,786 (411,137) Derivative loss 2,463 11,642 (9,179) Product margin 44,479 45,701 (1,222) Butane: Sales 628,685 773,633 (144,948) Cost of sales-excluding impact of derivatives 587,307 776,845 (189,538) Derivative loss (gain) 2,771 (22,976) 25,747 Product margin 38,607 19,764 18,843 Other products: Sales -excluding impact of derivatives 383,998 568,180 (184,182) Cost of sales-excluding impact of derivatives 367,293 551,053 (183,760) Derivative loss 25 1,246 (1,221) Product margin 16,680 15,881 799 Service: Sales 14,151 14,218 (67) Cost of sales 1,379 1,603 (224) Product margin 12,772 12,615 157 Expenses: Operating expenses 48,549 42,320 6,229 General and administrative expenses 7,281 7,236 45 Depreciation and amortization expense 9,963 12,788 (2,825) Loss on disposal or impairment of assets, net 59,923 10,171 49,752 Total expenses 125,716 72,515 53,201 Segment operating (loss) income $ (13,178) $ 21,446 $ (34,624) Natural gas liquids storage capacity - owned and leased (gallons) (1) 122,831 152,719 (29,888) Propane sold (gallons) 811,035 1,018,937 (207,902) Propane sold ($/gallon) $ 0.912 $ 1.140 $ (0.228) Cost per propane sold ($/gallon) (2) $ 0.854 $ 1.083 $ (0.229) Propane product margin ($/gallon) (2) $ 0.058 $ 0.057 $ 0.001 Propane inventory (gallons) (1) 35,177 48,379 (13,202) Butane sold (gallons) 537,015 539,658 (2,643) Butane sold ($/gallon) $ 1.171 $ 1.434 $ (0.263) Cost per butane sold ($/gallon) (2) $ 1.094 $ 1.440 $ (0.346) Butane product margin (loss) ($/gallon) (2) $ 0.077 $ (0.006) $ 0.083 Butane inventory (gallons) (1) 17,790 17,409 381 Other products sold (gallons) 263,422 318,511 (55,089) Other products sold ($/gallon) $ 1.458 $ 1.784 $ (0.326) Cost per other products sold ($/gallon) (2) $ 1.394 $ 1.730 $ (0.336) Other products product margin ($/gallon) (2) $ 0.064 $ 0.054 $ 0.010 Other products inventory (gallons) (1) 5,623 3,889 1,734 68 (1) Information is presented as of March 31, 2024 and March 31, 2023, respectively. (2) Cost and product margin (loss) per gallon excludes the impact of derivatives. Propane Sales and Cost of Sales-Excluding Impact of Derivatives. The decreases in sales and cost of sales, excluding the impact of derivatives, were due to lower propane volumes and lower prices during the year ended March 31, 2024. Propane volumes decreased during the year ended March 31, 2024 due to the sale of three natural gas liquids terminals, the loss of a certain supply contract, lower performing natural gas liquids terminals being idled and a focus on more profitable markets and customers. Also, demand was lower during the year ended March 31, 2024 due to the warmer than normal winter. Propane product margins, excluding the impact of derivatives, decreased during the year ended March 31, 2024 primarily due to lower volumes and lower prices. Propane Derivative Loss. Our cost of propane sales included $4.6 million of net unrealized gains on derivatives and $7.0 million of net realized losses on derivatives during the year ended March 31, 2024. During the year ended March 31, 2023, our cost of propane sales included $6.9 million of net unrealized losses on derivatives and $4.7 million of net realized losses on derivatives. Butane Sales and Cost of Sales-Excluding Impact of Derivatives. The decreases in sales and cost of sales, excluding the impact of derivatives, were due primarily to lower butane prices. The decrease was also due to lower volumes during the first six months of the year ended March 31, 2024 as a result of weak spot demand, weak export demand and a change in strategy by a significant customer. These decreases were partially offset by strong blending demand from October 2023 through February 15, 2024. Butane product margins, excluding the impact of derivatives, increased during the year ended March 31, 2024, as compared to the year ended March 31, 2023, primarily due to higher demand for butane blending which has tightened up the butane supply, causing sales differentials to increase. Also, in the prior year, we were negatively impacted by lower location differentials as the product we contracted to purchase in the beginning of the season was continuing to compete with product purchased in the discounted market. Butane Derivative Loss (Gain). Our cost of butane sales during the year ended March 31, 2024 included $3.2 million of net unrealized losses on derivatives and $0.5 million of net realized gains on derivatives. Our cost of butane sales included $3.9 million of net unrealized gains on derivatives and $19.1 million of net realized gains on derivatives during the year ended March 31, 2023. Other Products Sales and Cost of Sales-Excluding Impact of Derivatives. The decreases in sales and cost of sales, excluding the impact of derivatives, were due primarily to the decrease in market prices during the year ended March 31, 2024 as compared to the year ended March 31, 2023. The decrease was also the result of lower natural gasoline volumes due to the loss of certain supply contracts. These decreases were partially offset by increased sales of asphalt due to increased supply. Other products sales product margins, excluding the impact of derivatives, decreased during the year ended March 31, 2024, mainly due to loss of certain supply contracts for natural gasoline as well as decreased market prices for natural gasoline. Other Products Derivative Loss. Our derivatives of other products included $0.1 million of net realized gains on derivatives and $0.1 million of net unrealized losses on derivatives during the year ended March 31, 2024. Our derivatives of other products during the year ended March 31, 2023 included $1.3 million of net realized losses on derivatives and $0.1 million of net unrealized gains on derivatives. Service Sales and Cost of Sales. The sales include storage, terminaling and transportation services income. Sales during the year ended March 31, 2024 remained consistent with the year ended March 31, 2023 but cost of sales decreased due to lower third-party costs. Operating and General and Administrative Expenses. The increase was due to higher incentive compensation due to improved margins in certain of our businesses year over year. Depreciation and Amortization Expense. The decrease was due to a customer relationship intangible asset being fully amortized as of June 30, 2023. 69 Loss on Disposal or Impairment of Assets, Net. During the year ended March 31, 2024, we recorded a goodwill impairment loss of $69.2 million in our Wholesale/Terminal reporting unit (see Note 5 to our consolidated financial statements included in this Annual Report). In addition, we recorded a net gain of $8.5 million due to the sale of three natural gas liquids terminals and we recorded a net gain of $0.8 million related to the retirement or sale of certain other assets. During the year ended March 31, 2023, we recorded a net loss of $10.1 million due to the impairment of several underperforming natural gas liquids terminals. In addition, during the year ended March 31, 2023, we recorded a net loss of $0.1 million related to the sale and retirement of other assets. Corporate and Other The operating loss within “Corporate and Other” includes the following components for the periods indicated: Year Ended March 31, 2024 2023 Change (in thousands) Cost of sales: Derivative (gain) loss $ (937) $ 1,181 $ (2,118) Expenses: General and administrative expenses 105,147 50,978 54,169 Depreciation and amortization expense 4,749 6,662 (1,913) Gain on disposal or impairment of assets, net (720) (912) 192 Total expenses 109,176 56,728 52,448 Operating loss $ (108,239) $ (57,909) $ (50,330) Cost of Sales - Derivative (Gain) Loss. Our cost of sales during the year ended March 31, 2024 included $0.2 million of net realized losses on derivatives and $1.2 million of net unrealized gains on derivatives. We entered into economic hedges to protect our liquidity positions and leverage from a significant increase in commodity prices that drive our working capital demands, as we experienced in the prior fiscal year, thus impacting our ability to reduce absolute indebtedness until commodity prices weakened. There were no open hedge positions that would impact cost of sales as of March 31, 2024. General and Administrative Expenses . The increase during the year ended March 31, 2024 relates primarily to the increase in our accrual related to the LCT legal matter from $2.5 million to $36.0 million (see Note 8 to our consolidated financial statements included in this Annual Report), and the write-off of $14.2 million of legal costs related to the LCT legal matter that were originally allocated to the GP. In addition, we also incurred increased business insurance expense as we paid the insurance company to be released from any future supplementary calls on our indemnity policy related to our former crude marine business (which we sold on March 30, 2023), increased insurance premiums and a reduction in our corporate overhead allocation to the other business segments. These increases were partially offset by a decrease in equity-based incentive compensation as our final service award vested on November 15, 2023. Depreciation and Amortization Expense. The decrease during the year ended March 31, 2024 was due to software that became fully depreciated during the year ended March 31, 2024. Gain on Disposal or Impairment of Assets, Net. During the year ended March 31, 2024, we sold an airplane for a gain of $0.7 million. During the year ended March 31, 2023, we sold an airplane for a gain of $1.3 million, which was partially offset by a loss recorded to write-off the remaining amount of a loan receivable, due July 31, 2023, that was prepaid by the debtor and an impairment loss recorded on the sublease of a building we were no longer using. Equity in Earnings of Unconsolidated Entities Equity in earnings of unconsolidated entities of $4.1 million during the year ended March 31, 2024 consisted primarily of earnings from certain membership interests related to specific land and water services operations and earnings from another entity due to a gain recognized on the sale of an airplane during the three months ended December 31, 2023. Equity in earnings of unconsolidated entities of $4.1 million during the year ended March 31, 2023 consisted primarily of earnings from certain membership interests related to specific land and water services operations and a loss from our interest in an aircraft company. 70 Interest Expense The following table summarizes the components of our consolidated interest expense for the periods indicated: Year Ended March 31, 2024 2023 Change (in thousands) Senior secured notes $ 160,088 $ 153,750 $ 6,338 Senior unsecured notes 40,829 76,288 (35,459) ABL Facility 15,645 17,111 (1,466) Term Loan B 11,275 — 11,275 Other indebtedness 26,781 11,552 15,229 Total debt interest expense 254,618 258,701 (4,083) Amortization of debt issuance costs 15,701 16,737 (1,036) Unrealized gain on interest rate swaps (515) — (515) Total interest expense $ 269,804 $ 275,438 $ (5,634) The debt interest expense decreased $4.1 million during the year ended March 31, 2024 primarily due to the repurchase of the 7.5% senior unsecured notes due 2023 (“2023 Notes”) throughout the prior year and the redemption of the remaining 2023 Notes on March 31, 2023. In addition, we repurchased a portion of the outstanding 2025 Notes during the three months ended June 30, 2023. Also, in the prior year, we had an accrual of the settlement of a claim for the failure to pay interest on royalty payments. These decreases were partially offset by $26.1 million of interest accrued related to the LCT legal matter (see Note 8 to our consolidated financial statements included in this Annual Report) and an increase due to higher interest rates on the new debt instruments. (Loss) Gain on Early Extinguishment of Liabilities, Net Loss on early extinguishment of liabilities, net was $55.3 million during the year ended March 31, 2024, compared to a gain on early extinguishment of liabilities, net of $6.2 million during the year ended March 31, 2023. During the year ended March 31, 2024, the net loss (inclusive of debt issuance costs written off) primarily relates to the call premium of $38.4 million paid for the early extinguishment of the outstanding 2026 Senior Secured Notes, the write-off of debt issuance costs and other expenses related to the repurchase/redemption of the 2026 Senior Secured Notes and Senior Unsecured Notes during the fiscal year. During the year ended March 31, 2023, the net gain (inclusive of debt issuance costs written off) primarily related to the early extinguishment of a portion of the outstanding Senior Unsecured Notes partially offset by the write-off of debt issuance costs. In addition, we paid a prepayment premium of $1.6 million and wrote off debt issuance costs of less than $0.1 million related to the payoff of an outstanding equipment loan. See Note 7 to our consolidated financial statements included in this Annual Report for a further discussion of the debt instruments repurchased and redeemed. Other Income, Net Other income, net of $2.8 million during the year ended March 31, 2024 consisted primarily of interest income on loan receivables (see Note 2 to our consolidated financial statements included in this Annual Report for a further discussion) and cash on hand, income from the settlement of a dispute and income from excess distributions received from an equity method investee. Other income, net of $30.4 million during the year ended March 31, 2023 consisted primarily of a settlement of a dispute associated with commercial activities not occurring in the current reporting periods (see Note 17 to our consolidated financial statements included in this Annual Report for a further discussion). Income Tax Expense Income tax expense was $1.5 million during the year ended March 31, 2024, compared to income tax expense of $0.2 million during the year ended March 31, 2023. See Note 2 to our consolidated financial statements included in this Annual Report for a further discussion. Noncontrolling Interests - Redeemable and Nonredeemable Noncontrolling interest income was $0.6 million during the year ended March 31, 2024, compared to $1.1 million during the year ended March 31, 2023. The decrease of $0.5 million during the year ended March 31, 2024 was due primarily to lower income from certain water solutions operations during the year ended March 31, 2024. 71 Non-GAAP Financial Measures In addition to financial results reported in accordance with accounting principles generally accepted in the United States (“GAAP”), we have provided the non-GAAP financial measures of EBITDA and Adjusted EBITDA. These non-GAAP financial measures are not intended to be a substitute for those reported in accordance with GAAP. These measures may be different from non-GAAP financial measures used by other entities, even when similar terms are used to identify such measures. We define EBITDA as net income (loss) attributable to NGL Energy Partners LP, plus interest expense, income tax expense (benefit), and depreciation and amortization expense. We define Adjusted EBITDA as EBITDA excluding net unrealized gains and losses on derivatives, lower of cost or net realizable value adjustments, gains and losses on disposal or impairment of assets, gains and losses on early extinguishment of liabilities, equity-based compensation expense, revaluation of liabilities and other. EBITDA and Adjusted EBITDA should not be considered as alternatives to net income (loss), income (loss) from continuing operations before income taxes, cash flows from operating activities, or any other measure of financial performance calculated in accordance with GAAP, as those items are used to measure operating performance, liquidity or the ability to service debt obligations. We believe that EBITDA provides additional information to investors for evaluating our ability to make quarterly distributions to our unitholders and is presented solely as a supplemental measure. We believe that Adjusted EBITDA provides additional information to investors for evaluating our financial performance without regard to our financing methods, capital structure and historical cost basis. Further, EBITDA and Adjusted EBITDA, as we define them, may not be comparable to EBITDA, Adjusted EBITDA, or similarly titled measures used by other entities. For purposes of our Adjusted EBITDA calculation, we make a distinction between realized and unrealized gains and losses on derivatives. During the period when a derivative contract is open, we record changes in the fair value of the derivative as an unrealized gain or loss. When a derivative contract matures or is settled, we reverse the previously recorded unrealized gain or loss and record a realized gain or loss. In our Crude Oil Logistics segment, we purchase certain crude oil barrels using the West Texas Intermediate (“WTI”) calendar month average (“CMA”) price and sell the crude oil barrels using the WTI CMA price plus the Argus CMA Differential Roll Component (“CMA Differential Roll”) per our contracts. To eliminate the volatility of the CMA Differential Roll, we entered into derivative instrument positions in January 2021 to secure a margin of approximately $0.20 per barrel on 1.5 million barrels per month from May 2021 through December 2023. Due to the nature of these positions, the cash flow and earnings recognized on a GAAP basis differed from period to period depending on the current crude oil price and future estimated crude oil price which were valued utilizing third-party market quoted prices. We recognized in Adjusted EBITDA the gains and losses from the derivative instrument positions entered into in January 2021 to properly align with the physical margin we hedged each month through the term of this transaction. This representation aligns with management’s evaluation of the transaction. The derivative instrument positions we entered into related to the CMA Differential Roll expired as of December 31, 2023, and we have not entered into any new derivative instrument positions related to the CMA Differential Roll. As previously reported, for purposes of our Adjusted EBITDA calculation, we did not draw a distinction between realized and unrealized gains and losses on derivatives of certain businesses within our Liquids Logistics segment, which are included in discontinued operations. The primary hedging strategy of these businesses is to hedge against the risk of declines in the value of inventory over the course of the contract cycle, and many of the hedges cover extended periods of time. The “inventory valuation adjustment” row in the reconciliation table reflects the difference between the market value of the inventory of these businesses at the balance sheet date and its cost. We include this in Adjusted EBITDA because the unrealized gains and losses for derivative contracts associated with the inventory of this segment, which are intended primarily to hedge inventory holding risk and are included in net income, also affect Adjusted EBITDA. Beginning April 1, 2024, and going forward, we will now be drawing a distinction between realized and unrealized gains and losses on derivatives and will no longer include the activity on the “inventory valuation adjustment” row in the reconciliation table for these certain businesses within our Liquids Logistics segment, which are included in discontinued operations. This change aligns with how management now views and evaluates the transactions within these businesses and is also consistent with the calculation of Adjusted EBITDA used in our other businesses. If this change was made as of April 1, 2022, Adjusted EBITDA for the years ended March 31, 2023 and 2024 would have been $638.8 million and $609.5 million, respectively. 72 The following table reconciles net income (loss) to EBITDA and Adjusted EBITDA for the periods indicated: Year Ended March 31, 2025 2024 2023 (in thousands) Net income (loss) $ 43,163 $ (143,124) $ 52,492 Less: Net income from continuing operations attributable to nonredeemable noncontrolling interests (3,749) (631) (1,106) Less: Net income from continuing operations attributable to redeemable noncontrolling interests (46) — — Net income (loss) attributable to NGL Energy Partners LP 39,368 (143,755) 51,386 Interest expense 280,241 270,004 275,505 Income tax (benefit) expense (4,775) 2,405 271 Depreciation and amortization 253,190 266,287 273,544 EBITDA 568,024 394,941 600,706 Net unrealized losses (gains) on derivatives 21,782 63,762 (50,438) Lower of cost or net realizable value adjustments (1) (1,619) 1,337 (11,534) Loss on disposal or impairment of assets, net (2) 33,705 115,555 86,872 Revaluation of liabilities (6,705) 2,680 9,665 CMA Differential Roll net losses (gains) (3) — (71,285) 3,547 Inventory valuation adjustment (4) — (3,419) (7,795) Loss (gain) on early extinguishment of liabilities, net — 55,281 (6,177) Equity-based compensation expense — 1,098 2,718 Other (5) 2,572 50,131 5,111 Adjusted EBITDA $ 617,759 $ 610,081 $ 632,675 Adjusted EBITDA - Discontinued Operations (6) $ (5,133) $ 16,667 $ 39,066 Adjusted EBITDA - Continuing Operations $ 622,892 $ 593,414 $ 593,609 (1) Lower of cost or net realizable value adjustments in the table above differ from lower of cost or net realizable value adjustments reported in our consolidated statements of cash flows, as the amounts reported in the table above represent the change in lower of cost or net realizable value adjustments recorded in the consolidated statements of operations, which includes reversals, whereas the amounts reported in our consolidated statements of cash flows represent the lower of cost or net realizable value adjustments recorded at the balance sheet date. (2) Excludes amounts related to unconsolidated entities and noncontrolling interests. (3) Adjustment to align, within Adjusted EBITDA, the net gains and losses of the Partnership’s CMA Differential Roll derivative instruments positions with the physical margin being hedged. See “Non-GAAP Financial Measures” section above for a further discussion. (4) Amounts represent the difference between the market value of the inventory at the balance sheet date and its cost. See “Non-GAAP Financial Measures” section above for a further discussion. (5) Amounts represent accretion expense for asset retirement obligations, unrealized gains and losses on investments and marketable securities and expenses incurred related to legal and advisory costs associated with acquisitions and dispositions, including the accrued judgment related to the LCT legal matter, excluding interest (see Note 8 to our consolidated financial statements included in this Annual Report), and the write-off of the legal costs related to the LCT legal matter that were originally allocated to the GP. Also, the amount for the year ended March 31, 2023 includes the write off of an asset acquired in a prior period acquisition and non-cash operating expenses related to our Grand Mesa Pipeline. (6) Amounts include our refined products and biodiesel businesses. 73 The following tables reconcile depreciation and amortization amounts per the EBITDA table above to depreciation and amortization amounts reported in our consolidated statements of operations and consolidated statements of cash flows for the periods indicated: Year Ended March 31, 2025 2024 2023 (in thousands) Depreciation and amortization per EBITDA table $ 253,190 $ 266,287 $ 273,544 Intangible asset amortization recorded to cost of sales (257) — (14) Depreciation and amortization attributable to unconsolidated entities (426) (686) (783) Depreciation and amortization attributable to noncontrolling interests 2,708 1,182 1,134 Depreciation and amortization attributable to discontinued operations (483) (669) (773) Depreciation and amortization per consolidated statements of operations $ 254,732 $ 266,114 $ 273,108 Depreciation and amortization per EBITDA table $ 253,190 $ 266,287 $ 273,544 Amortization of debt issuance costs recorded to interest expense 12,010 15,701 16,737 Amortization of royalty expense recorded to operating expense 247 247 247 Depreciation and amortization attributable to unconsolidated entities (426) (686) (783) Depreciation and amortization attributable to noncontrolling interests 2,708 1,182 1,134 Depreciation and amortization attributable to discontinued operations (483) (669) (773) Depreciation and amortization per consolidated statements of cash flows $ 267,246 $ 282,062 $ 290,106 The following table reconciles interest expense per the EBITDA table above to interest expense reported in our consolidated statements of operations for the periods indicated: Year Ended March 31, 2025 2024 2023 (in thousands) Interest expense per EBITDA table $ 280,241 $ 270,004 $ 275,505 Interest expense attributable to noncontrolling interests 63 — — Interest expense attributable to unconsolidated entities (1) (81) (60) Interest expense attributable to discontinued operations (225) (119) (7) Interest expense per consolidated statements of operations $ 280,078 $ 269,804 $ 275,438 The following table summarizes additional amounts attributable to discontinued operations in the EBITDA and Adjusted EBITDA table above for the periods indicated: Year Ended March 31, 2025 2024 2023 (in thousands) Income tax expense $ 110 $ 947 $ 52 Net unrealized losses on derivatives $ 18,416 $ — $ — Lower of cost or realizable value adjustments $ (4,535) $ 3,745 $ 790 Loss on disposal or impairment of assets, net $ 1,995 $ — $ 112 Inventory valuation adjustment $ — $ (3,419) $ (7,795) Other $ — $ 1 $ 1,670 74 The following tables reconcile operating income (loss) to Adjusted EBITDA by segment for the periods indicated. Year Ended March 31, 2025 Water Solutions Crude Oil Logistics Liquids Logistics Corporate and Other Continuing Operations Discontinued Operations Consolidated (in thousands) Operating income (loss) $ 311,457 $ 46,101 $ 14,058 $ (42,261) $ 329,355 $ — $ 329,355 Depreciation and amortization 217,227 25,070 9,408 3,027 254,732 — 254,732 Amortization recorded to cost of sales — — 257 — 257 — 257 Net unrealized losses (gains) on derivatives 4,953 (4,011) 2,424 — 3,366 — 3,366 Lower of cost or net realizable value adjustments — — 2,916 — 2,916 — 2,916 Loss (gain) on disposal or impairment of assets, net 9,813 (1,004) 22,596 43 31,448 — 31,448 Other income, net 485 1 1,518 2,258 4,262 — 4,262 Adjusted EBITDA attributable to unconsolidated entities 7,044 — (51) — 6,993 — 6,993 Adjusted EBITDA attributable to noncontrolling interest (6,196) — — (178) (6,374) — (6,374) Revaluation of liabilities (6,705) — — — (6,705) — (6,705) Other 3,918 216 243 (1,735) 2,642 — 2,642 Discontinued operations — — — — — (5,133) (5,133) Adjusted EBITDA $ 541,996 $ 66,373 $ 53,369 $ (38,846) $ 622,892 $ (5,133) $ 617,759 Year Ended March 31, 2024 Water Solutions Crude Oil Logistics Liquids Logistics Corporate and Other Continuing Operations Discontinued Operations Consolidated (in thousands) Operating income (loss) $ 231,256 $ 52,074 $ (13,178) $ (108,239) $ 161,913 $ — $ 161,913 Depreciation and amortization 214,480 36,922 9,963 4,749 266,114 — 266,114 Net unrealized losses (gains) on derivatives 385 65,786 (1,230) (1,179) 63,762 — 63,762 CMA Differential Roll net losses (gains) — (71,285) — — (71,285) — (71,285) Lower of cost or net realizable value adjustments — — (2,408) — (2,408) — (2,408) Loss (gain) on disposal or impairment of assets, net 53,639 3,094 59,923 (720) 115,936 — 115,936 Equity-based compensation expense — — — 1,098 1,098 — 1,098 Other income, net 1,110 105 1 1,566 2,782 — 2,782 Adjusted EBITDA attributable to unconsolidated entities 4,393 — (12) 124 4,505 — 4,505 Adjusted EBITDA attributable to noncontrolling interest (1,821) — — — (1,821) — (1,821) Revaluation of liabilities 2,680 — — — 2,680 — 2,680 Other 2,186 191 228 47,533 50,138 — 50,138 Discontinued operations — — — — — 16,667 16,667 Adjusted EBITDA $ 508,308 $ 86,887 $ 53,287 $ (55,068) $ 593,414 $ 16,667 $ 610,081 75 Year Ended March 31, 2023 Water Solutions Crude Oil Logistics Liquids Logistics Corporate and Other Continuing Operations Discontinued Operations Consolidated (in thousands) Operating income (loss) $ 198,924 $ 81,524 $ 21,446 $ (57,909) $ 243,985 $ — $ 243,985 Depreciation and amortization 207,081 46,577 12,788 6,662 273,108 — 273,108 Amortization recorded to cost of sales — — 14 — 14 — 14 Net unrealized (gains) losses on derivatives (4,464) (50,104) 2,951 1,179 (50,438) — (50,438) CMA Differential Roll net losses (gains) — 3,547 — — 3,547 — 3,547 Lower of cost or net realizable value adjustments — (2,247) (10,077) — (12,324) — (12,324) Loss (gain) on disposal or impairment of assets, net 46,431 31,086 10,171 (912) 86,776 — 86,776 Equity-based compensation expense — — — 2,718 2,718 — 2,718 Other income (expense), net 70 330 (3) 30,013 30,410 — 30,410 Adjusted EBITDA attributable to unconsolidated entities 4,759 — 27 176 4,962 — 4,962 Adjusted EBITDA attributable to noncontrolling interest (2,269) — — — (2,269) — (2,269) Revaluation of liabilities 9,665 — — — 9,665 — 9,665 Other 2,894 203 263 95 3,455 — 3,455 Discontinued operations — — — — — 39,066 39,066 Adjusted EBITDA $ 463,091 $ 110,916 $ 37,580 $ (17,978) $ 593,609 $ 39,066 $ 632,675 Liquidity, Sources of Capital and Capital Resource Activities General Our principal sources of liquidity and capital resource requirements are cash flows from our operations, borrowings under the ABL Facility, issuing long-term notes, common and/or preferred units, loans from financial institutions, asset securitizations or asset sales. We expect our primary cash outflows to be related to capital expenditures, interest, repayment of debt maturities and distributions. We believe that our anticipated cash flows from operations and the borrowing capacity under the ABL Facility will be sufficient to meet our liquidity needs. Our borrowing needs vary during the year due in part to the seasonal nature of certain businesses within our Liquids Logistics segment. Our greatest working capital borrowing needs generally occur during the period of June through December, when we are building our natural gas liquids inventories in anticipation of the butane blending and propane heating seasons. Our working capital borrowing needs generally decline during the period of January through March, when the cash inflows from our Liquids Logistics segment are the greatest. In addition, our working capital borrowing needs vary with changes in commodity prices. A significant increase in commodity prices could drive up our working capital demands and limit our ability to continue to delever our balance sheet and restrict our financial flexibility. To protect our liquidity and leverage, we have in the past and may in the future enter into economic hedges that mitigate this exposure when we are building inventory. There were no open hedge positions as of March 31, 2025. Cash Management We manage cash by utilizing a centralized cash management program that concentrates the cash assets of our operating subsidiaries in joint accounts for the purposes of providing financial flexibility and lowering the cost of borrowing, transaction costs and bank fees. Our centralized cash management program provides that funds in excess of the daily needs of our operating subsidiaries are concentrated, consolidated or otherwise made available for use within our consolidated group. All of our wholly-owned operating subsidiaries participate in this program. Under the cash management program, depending on whether a participating subsidiary has short-term cash surpluses or cash requirements, we provide cash to the subsidiary or the subsidiary provides cash to us. 76 Short-Term Liquidity Our principal sources of short-term liquidity consist of cash flows from our operations and borrowings under the ABL Facility, which we believe will provide liquidity to operate our business, manage our working capital requirements and repay current maturities. On February 2, 2024, we amended the ABL Facility to, among other things, (i) extend the maturity to the earliest of (a) February 2, 2029 and (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, subject to certain exceptions, (ii) provide for a sub-limit of $200.0 million for letters of credit and a $200.0 million incremental facility, subject to the receipt of commitments from lenders and customary borrowing conditions, (iii) modify the applicable margin for loans under the ABL Facility based on a secured overnight financing rate (“SOFR”) or the alternative base rate to provide for a 0.25% decrease based on our consolidated net leverage ratio, and (iv) provide for a mandatory prepayment under the ABL Facility while any loans are outstanding under the ABL Facility if aggregate “excess cash” (as defined in the ABL Facility) exceeds $50.0 million, subject to certain exceptions. Total commitments under the ABL Facility are $550.0 million. At March 31, 2025, $109.0 million was outstanding under the ABL Facility, letters of credit outstanding were $60.9 million, and we had a borrowing base of $397.7 million. For additional information related to the ABL Facility and the amendment, see Note 7 to our consolidated financial statements included in this Annual Report. As of March 31, 2025, our current assets exceeded our current liabilities by approximately $222.8 million. Long-Term Financing We expect to fund our long-term financing requirements by issuing long-term notes, common units and/or preferred units, loans from financial institutions, asset securitizations or asset sales. Senior Secured Notes On February 2, 2024, we closed on our private offering of $900.0 million of 2029 Senior Secured Notes that mature on February 15, 2029 and $1.3 billion of 2032 Senior Secured Notes that mature on February 15, 2032. Interest on the 2029 Senior Secured Notes and 2032 Senior Secured Notes is payable on February 15, May 15, August 15 and November 15 of each year. Term Loan B On February 2, 2024, we entered into a new seven-year $700.0 million Term Loan B. The Term Loan B matures on February 2, 2031 and will amortize in equal quarterly installments in aggregate annual amounts equal to 1.0% of the original principal amount, with the balance payable on maturity. The amount outstanding at March 31, 2025 is $693.0 million. For additional information related to our long-term debt, see Note 7 to our consolidated financial statements included in this Annual Report. Capital Expenditures, Acquisitions and Other Investments The following table summarizes expansion, maintenance and other non-cash capital expenditures (which excludes additions for tank bottoms and linefill and has been prepared on the accrual basis), acquisitions and other investments for the periods indicated. Capital Expenditures Other Year Ended March 31, Expansion Maintenance Other (1) Acquisitions (2) Investments (3) (in thousands) 2025 $ 175,730 $ 69,500 $ 20 $ — $ 106 2024 $ 99,533 $ 54,854 $ 15,680 $ — $ 258 2023 $ 79,091 $ 61,649 $ — $ — $ 88 (1) Amount for the year ended March 31, 2025 is related to a transaction classified as an acquisition of assets in a prior period. Amount for the year ended March 31, 2024 includes $9.2 million of equipment and other assets received in connection with contracts with customers 77 and $6.4 million for a transaction classified as an acquisition of assets. See Note 17 to our consolidated financial statements included in this Annual Report for information regarding the acquisition of assets. (2) There were no acquisitions during the years ended March 31, 2025, 2024 or 2023. (3) Amounts relate to contributions made to unconsolidated entities. Capital expenditures for the year ending March 31, 2026 are expected to be approximately $105 million. Distributions Declared On March 19, 2025, the board of directors of our GP declared a cash distribution for the quarter ended March 31, 2025 to the holders of the Class B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units (“Class B Preferred Units”), the Class C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units (“Class C Preferred Units”) and the 9.00% Class D Preferred Units (“Class D Preferred Units”). The total distribution of $29.8 million was made on April 15, 2025 to the holder of record at the close of trading on April 1, 2025. The board of directors of our GP expects to evaluate the reinstatement of the common unit distributions in due course, taking into account a number of important factors, including our leverage, liquidity, the sustainability of cash flows, upcoming debt maturities, capital expenditures and the overall performance of our businesses. See further discussion of our cash distribution policy in Part II, Item 5–“Market for Registrant’s Common Equity, Related Unitholder Matters and Issuer Purchases of Equity Securities” included in this Annual Report. For further discussion of the distributions, see Note 9 to our consolidated financial statements included in this Annual Report. Contractual Obligations Our contractual obligations primarily consist of purchase commitments, outstanding debt principal and interest obligations, operating lease obligations, asset retirement obligations and other commitments. The amounts below do not include obligations related to liabilities 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). Purchase Commitments Our fixed-price and index-price commodity purchase commitments result from contracts we have entered into for which we expect the parties to physically settle and deliver the inventory in future periods. As of March 31, 2025, our purchase commitments totaled $2.8 billion, with $2.5 billion due within one year. See Note 8 to our consolidated financial statements included in this Annual Report for information regarding our commodity purchase commitments and timing of our expected purchase commitments payments. Debt Principal and Interest Obligations As of March 31, 2025, our aggregate principal amount of outstanding debt was $3.0 billion, with $8.8 million due within one year. Our interest obligation on the debt was $1.4 billion, with $239.4 million due within one year, based on our outstanding balances and interest rates as of March 31, 2025. See Note 7 to our consolidated financial statements included in this Annual Report for information regarding our outstanding debt principal and interest obligations and timing of our expected debt principal and interest payments. Operating Lease Obligations As of March 31, 2025, our undiscounted operating lease obligation was $142.8 million, with $35.7 million due within one year. See Note 15 to our consolidated financial statements included in this Annual Report for information regarding our lease obligations and timing of our expected lease payments. 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. As of March 31, 2025, our asset retirement obligations were $69.6 million, of which we expect to settle $2.5 million during fiscal year 2026. See Note 8 to our consolidated financial statements included in this Annual Report for information regarding our asset retirement obligations. 78 Other Commitments We have noncancelable agreements for product storage, railcar spurs, capital projects and real estate. As of March 31, 2025, our commitment obligations were $30.0 million, with $9.7 million due within one year. See Note 8 to our consolidated financial statements included in this Annual Report for information regarding our other commitments and timing of our expected commitment payments. Sources (Uses) of Cash The following table summarizes the sources (uses) of cash and cash equivalents for the periods indicated related to continuing operations (see the footnotes to our consolidated financial statements included in this Annual Report for the footnotes referenced in the table): Cash Flow Year Ended March 31, Category 2025 2024 2023 (in thousands) Sources of cash and cash equivalents: Net cash provided by operating activities-continuing operations Operating $ 256,850 $ 361,818 $ 355,685 Net proceeds from borrowings under ABL Facility (see Note 7) Financing 109,000 — 22,000 Proceeds from divestitures of businesses and investments, net (see Note 17) Investing 72,246 16,000 111,633 Proceeds from sales of assets (see Note 17) Investing 42,819 53,246 45,848 Proceeds from borrowings on other long-term debt (see Note 7) Financing 12,720 — — Issuance of secured debt (see Note 7) Financing — 2,894,873 — Net settlements of derivatives (see Note 10) Investing — — 56,005 Uses of cash and cash equivalents: Distributions to preferred unitholders (see Note 9) Financing (305,291) (178,299) — Capital expenditures (see Note 11) Investing (245,816) (152,295) (147,765) Payments on Term Loan B (see Note 7) Financing (7,000) — — Warrant repurchases (see Note 9) Financing (6,929) — — Debt issuance costs (see Note 6 and Note 7) Financing (5,258) (53,170) (3,294) Payments on other long-term debt (see Note 7) Financing (1,068) — (43,278) Net settlements of derivatives (see Note 10) Investing (246) (6,185) — Repayment and repurchase of Senior Unsecured Notes (see Note 7) Financing — (2,781,067) (479,302) Net payments on borrowings under ABL Facility (see Note 7) Financing — (138,000) — Other sources / (uses) – net Investing and Financing (2,192) (2,952) (3,979) Net (decrease) increase in cash and cash equivalents-continuing operations $ (80,165) $ 13,969 $ (86,447) Operating Activities-Continuing Operations. The decrease in net cash provided by operating activities during the year ended March 31, 2025 was due primarily to fluctuations in working capital, particularly accounts receivable and accounts payable, due to lower crude oil volumes and lower crude oil prices and the timing of invoices and payments on construction projects, partially offset by higher earnings from operations. Also, on June 13, 2024, we paid LCT $63.3 million related to the legal judgment against us, of which $27.2 million represented interest and $0.1 million of costs awarded to LCT (see Note 8 to our consolidated financial statements included in this Annual Report). The increase in net cash provided by operating activities during the year ended March 31, 2024 was due primarily to fluctuations in working capital, particularly accounts receivable and accounts payable, due to open derivative positions, partially offset by lower crude oil volumes and prices, lower inventory due to decreased sales and purchases of natural gas liquids, and decreased earnings from operations. Environmental Legislation See Part I, Item 1–“Business–Government Regulation–Greenhouse Gas Regulation” for a discussion of proposed environmental legislation and regulations that, if enacted, could result in increased compliance and operating costs. However, at 79 this time we cannot predict the structure or outcome of any future legislation or regulations or the eventual cost we could incur in compliance. Recent Accounting Pronouncements For a discussion of recent accounting pronouncements that are applicable to us, see Note 2 to our consolidated financial statements included in this Annual Report. Critical Accounting Estimates The preparation of financial statements and related disclosures in conformity with GAAP requires the selection and application of appropriate accounting principles to the relevant facts and circumstances of our operations and the use of estimates made by management. We have identified the following more critical judgment areas in the application of our accounting policies that are most important to the portrayal of our consolidated financial position and results of operations. The application of these accounting policies, which requires subjective or complex judgments regarding estimates and projected outcomes of future events, and changes in these accounting policies, could have a material effect on our consolidated financial statements. Impairment of Goodwill The goodwill relating to each of our reporting units is tested for impairment annually as well as when an event or change in circumstances indicates an impairment may have occurred. 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. The qualitative assessment is based on reviewing several factors, including macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, other entity specific events (for example, changes in management) or other events such as selling or disposing of a reporting unit. The determination of a reporting unit’s fair value is predicated on our assumptions regarding the future economic prospects of the reporting unit. Such assumptions include (i) discrete financial forecasts for the assets contained within the reporting unit, which rely on management’s estimates of operating margins, (ii) long-term growth rates for cash flows beyond the discrete forecast period, (iii) appropriate discount rates and (iv) estimates of the cash flow multiples to apply in estimating the market value of our reporting units. An estimate of the sensitivity to changes in underlying assumptions of a fair value calculation is not practicable, given the numerous assumptions that can materially affect our estimates. 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. If future results are not consistent with our estimates, we could be exposed to future impairment losses that could be material to our results of operations. During the years ended March 31, 2025 and 2024, we recorded goodwill impairments of $17.9 million and $69.2 million, respectively. We did not record a goodwill impairment during the year ended March 31, 2023. See Note 5 to our consolidated financial statements included in this Annual Report for a further discussion of our goodwill impairment assessment. 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. Individual assets are grouped at the lowest level for which the related identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Estimates of future net cash flows include estimating future volumes, future margins or tariff rates, future operating costs and other estimates and assumptions consistent with our business plans as well as external factors such as industry and economic trends. An estimate of the sensitivity to changes in underlying assumptions of a fair value calculation is not practicable, given the numerous assumptions that can materially affect our estimates. 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. If future results are not consistent with our estimates, we could be exposed to future impairment losses that could be material to our results of operations. See Note 4 and Note 6 to our consolidated financial statements included in this Annual Report for a further discussion of our impairments of long-lived assets. 80 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. Depreciation and Amortization Methods and Estimated Useful Lives of Property, Plant and Equipment and Intangible Assets Depreciation and amortization expense is the systematic write-off of the cost of our property, plant and equipment (net of residual or salvage value, if any) and the cost of our amortizable intangible assets to the results of operations for the quarterly and annual periods during which the assets are used. We depreciate our property, plant and equipment and amortize the majority of our intangible assets using the straight-line method, which results in our recording depreciation and amortization expense evenly over the estimated life of the individual asset. The estimate of depreciation and amortization expense requires us to make assumptions regarding the estimated useful lives and residual values of our assets. When we acquire and place our property, plant and equipment in service or acquire intangible assets, we develop assumptions about the estimated useful lives and residual values of such assets that we believe to be reasonable; however, circumstances may develop that could require us to change these assumptions in future periods, which would change our depreciation and amortization expense prospectively and have a material impact on our results of operations. Examples of such circumstances include changes in laws and regulations that limit the estimated economic life of an asset, changes in technology that render an asset obsolete, changes in expected salvage values or changes in customer attrition rates. See Note 2, Note 4 and Note 6 to our consolidated financial statements included in this Annual Report for a further discussion. 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. 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. The change in the fair value of our interest rate swaps is recorded as a net gain or loss within interest expense in our consolidated statement of operations and within cash flows from operations in our consolidated statements of cash flows. We determine the fair value of our exchange traded derivative financial instruments utilizing publicly available prices, and for non-exchange traded derivative financial instruments, we utilize pricing models for similar instruments including publicly available prices and forward curves generated from a compilation of data gathered from third parties. Actual amounts could vary materially from estimated fair values due to changes in market prices. In addition, changes in the methods or assumptions used to determine the fair value of our derivative financial instruments could have a material effect on our consolidated financial statements. See “Item 7A. Quantitative and Qualitative Disclosures About Market Risk–Commodity Price Risk” for the impact of a 10% increase in the underlying commodity value, “Item 7A. Quantitative and Qualitative Disclosures About Market Risk–Interest Rate Risk” for the impact of a 10% increase in the underlying interest rate swap value and Note 2 and Note 10 to our consolidated financial statements included in this Annual Report for a further discussion of our derivative financial instruments. Revenue Recognition Our Water Solutions segment has certain long-term contracts with customers that include variable consideration that must be estimated at contract inception and re-assessed at each reporting period. Total consideration for these arrangements is recognized as revenue over the applicable contract period and is based on our measure of satisfaction of our corresponding performance obligation, and the difference in timing of revenue recognition and billings results in contract assets and liabilities. The estimated performance obligation over the life of a contract includes significant judgments by management including volume and forecasted production information. Changes in these assumptions or a contract modification could have a material effect on the amount of variable consideration recognized as revenue. See Note 14 to our consolidated financial statements included in this Annual Report for a further discussion of our revenue recognition policies. 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 largest asset retirement obligations involve the abandonment or removal of pipelines and saltwater and freshwater disposal wells. We are required to recognize the fair value of a liability for an asset retirement obligation if a reasonable estimate of fair value can be made. In order to determine the fair value of such a liability, we must make certain estimates and assumptions including, among other things, projected cash flows, 81 the estimated timing of retirement, a credit-adjusted risk-free interest rate, and an assessment of market conditions, which could significantly impact the estimated fair value of the asset retirement obligation. Most of these asset retirement obligations are many years, or decades, in the future and the contracts and regulations often have vague descriptions of what removal practices and criteria must be met when the removal event actually occurs. These estimates and assumptions are very subjective and can vary over time. Our consolidated balance sheet at March 31, 2025 includes a liability of $69.6 million related to asset retirement obligations, which is reported within other noncurrent liabilities. 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. Contingent Consideration Liabilities Certain business combinations in our Water Solutions segment included future royalty payments to the seller, which we recorded as contingent consideration liabilities as part of our purchase price allocation. The initial fair value was calculated based on an estimate of the activity related to the assets acquired in the transaction, either volumes or revenue, and an estimate of the expected useful life of the assets and discounted to its present value using an appropriate discount rate. The fair value of the contingent consideration liabilities is assessed each reporting period and the updated fair value is calculated using the same process used to calculate the initial fair value. Cha nges in our assumptions and estimates may occur as a result of the passage of time and the occurrence of future events. Our consolidated balance sheet at March 31, 2025 includes a liability of $15.8 million related to contingent consideration liabilities, which is recorded within accrued expenses and other payables and other noncurrent liabilities. Acquisitions Fair values of assets acquired and liabilities assumed are based upon available information and may involve engaging an independent third party to perform an appraisal. Estimating fair values can be complex and subject to significant business judgment. We must also identify and include in the allocation all acquired tangible and intangible assets that meet certain criteria, including assets that were not previously recorded by the acquired entity. The estimates most commonly involve property, plant and equipment and intangible assets, including those with indefinite lives. The estimates also include the fair value of contracts including commodity purchase and sale agreements, storage contracts, and transportation contracts. The judgments made in the determination of the estimated fair value assigned to the assets acquired, the liabilities assumed and any noncontrolling interest in the investee, as well as the estimated useful life of each asset and the duration of each liability, can materially impact the financial statements in periods after the acquisition, such as through depreciation and amortization expense. While we believe we have made reasonable assumptions to calculate the fair value, if future results are not consistent with our estimates, we could be exposed to future impairment losses that could be material to our results of operations. 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. 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. Inventories Our inventories consist of crude oil and natural gas liquids. 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. At the end of each fiscal year, we also perform a “lower of cost or net realizable value” analysis; if the cost basis of the inventories would not be recoverable based on the net realizable value at the end of the year, we reduce the book value of the inventories to the recoverable amount. When performing this analysis during interim periods within a fiscal year, accounting standards do not require us to record a lower of cost or net realizable value write-down if we expect the net realizable value to recover by our fiscal year end. The net realizable values of these commodities change on a daily basis as supply and demand conditions change. We are unable to control changes in the net realizable value of these commodities and are unable to determine whether write-downs will be required in future periods. 82