NGL Energy Partners LP
For the period ended Dec 31, 2024. Filed Feb 10, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2024 · Filed Feb 10, 2025
NGL$14.95+1.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0001504461-24-000025
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-12-31; filed 2025-02-10.
0001504461-25-000004
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 213 previous paragraphs and 219 current paragraphs.
110 unchanged; 90 reworded; 16 added; 11 removed; 2 previous and 3 current paragraphs rearranged.
Tables are not compared: 23 previous and 23 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
Revaluation of Liabilities. During the three months ended December 31, 2024, there was a decrease in expense related to the write-off of a portion of our contingent consideration liability related to royalty agreements acquired as part of certain business combinations, as we no longer expect to make royalty payments for a certain saltwater disposal well that was plugged and abandoned.
Current report
Butane product margins, excluding the impact of derivatives, increased during the three months ended December 31, 2024 due to selling lower priced butane into a market in which prices were increasing.
Current report
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 to a decrease in commodity prices, primarily biodiesel prices and prices for renewable identification numbers (“RINs”), during the three months ended December 31, 2024 compared with the three months ended December 31, 2023. This was partially offset by increased volumes as we decided to wind down our biodiesel business and worked to close out our open purchase and sale contracts. Volumes also increased due to strong spot markets for natural gasoline and isobutane and consistent supply of asphalt during the three months ended December 31, 2024.
Current report
Other products sales product margins, excluding the impact of derivatives, increased during the three months ended December 31, 2024 due to the increase in volumes, as discussed above, and improved differentials for natural gasoline and isobutane as a result of the strong spot market. In addition, during the three months ended December 31, 2023, the supply of biodiesel increased in the market due to the Environmental Protection Agency (“EPA”) final renewable fuels standards (“RFS”) mandate, which lowered biodiesel and RIN’s prices, which impacted margins.
Current report
Gain on Disposal or Impairment of Assets, Net. During the three months ended December 31, 2024, we recorded a net gain of $0.6 million due to the sale of land. During the three months ended December 31, 2023, we recorded a net gain of $1.6 million on the sale of a terminal.
Current report
Loss (Gain) on Disposal or Impairment of Assets, Net. During the three months ended December 31, 2024, we recorded a net loss of less than $0.1 million due to the write-off of information technology equipment. During the three months ended December 31, 2023, we sold an airplane for a gain of $0.7 million.
Current report
Derivative Gain. During the nine months ended December 31, 2024, we had $1.4 million of net unrealized losses on derivatives and $2.7 million of net realized gains on derivatives. During the nine months ended December 31, 2023, we had $2.0 million of net unrealized gains on derivatives and $1.1 million of net realized losses on derivatives.
Current report
Revaluation of Liabilities. During the nine months ended December 31, 2024, there was a decrease in expense related to the write-off of a portion of our contingent consideration liability related to royalty agreements acquired as part of certain business combinations, as we no longer expect to make royalty payments for a certain saltwater disposal well that was plugged and abandoned.
Current report
Butane product margins, excluding the impact of derivatives, increased during the nine months ended December 31, 2024, as compared to the nine months ended December 31, 2023 due to selling lower priced butane into a market in which prices were increasing.
Current report
Other products sales product margins, excluding the impact of derivatives, during the nine months ended December 31, 2024 increased due to the increase in volumes and improved differentials for natural gasoline and isobutane as a result of the strong spot market and an increase in asphalt sales due to the consistent supply during the nine months ended December 31, 2024. Also, market prices for biodiesel decreased during the three months ended December 31, 2023, due to the EPA’s final RFS mandate which lowered the required amount of biodiesel to be blended, thus increasing the amount of supply in the market and impacting margins.
Current report
Gain on Disposal or Impairment of Assets, Net. During the nine months ended December 31, 2024, we recorded a net gain of $0.6 million due to the sale of land. During the nine months ended December 31, 2023, we recorded a net gain of $9.4 million due to the sale of three terminals.
Current report
Loss (Gain) on Disposal or Impairment of Assets, Net. During the nine months ended December 31, 2024, we recorded a net loss of less than $0.1 million due to the write-off of information technology equipment. During the nine months ended December 31, 2023, we sold an airplane for a gain of $0.7 million.
Current report
Income Tax Benefit (Expense)
Current report
(1) Excludes amounts related to unconsolidated entities and noncontrolling interests.
Current report
(4) Amounts represent the write-off of a portion of our contingent consideration liability related to royalty agreements acquired as part of certain business combinations in our Water Solutions segment as we no longer expect to make royalty payments for a certain saltwater disposal well that was plugged and abandoned.
Current report
On December 12, 2024, the board of directors of our GP declared a cash distribution for the quarter ended December 31, 2024 to the holders of the Class B Preferred Units, the Class C Preferred Units and the Class D Preferred Units. The total distribution of $28.9 million was made on January 15, 2025 to the holders of record at the close of trading on January 1, 2025.
Removed paragraphs (11)
Previous report
Recovered Crude Oil Revenues. The decrease was due primarily to a decrease in skim oil barrels sold as a result of lower skim oil recovered as certain producers recycled their water for use in their operations, lower realized crude oil prices received from the sale of skim oil barrels and the sale during the prior year quarter of approximately 53,000 barrels of skim oil that were stored at June 30, 2023 due to tighter pipeline specifications.
Previous report
Cost of Sales-Excluding Impact of Derivatives. The decrease was due primarily to lower third-party disposal fees, lower recycling costs and lower trucking expenses related to skim oil sales.
Previous report
Butane product margins, excluding the impact of derivatives, decreased primarily due to the prior year period benefiting from a lower of cost or realizable value adjustment recorded during the three months ended June 30, 2023. Excluding this adjustment, margins increased due to increased commodity prices and volumes during the three months ended September 30, 2024.
Previous report
Other products sales product margins, excluding the impact of derivatives, decreased during the three months ended September 30, 2024 due to selling higher priced biodiesel inventory into a market in which prices were declining. We had entered into long-term biodiesel contracts in the prior year, when the prices were higher, for delivery in the current period.
Previous report
Gain on Disposal or Impairment of Assets, Net. During the three months ended September 30, 2023, we recorded a net gain of $6.9 million on the sale of two terminals in July 2023.
Previous report
Income Tax Expense
Previous report
Derivative (Gain) Loss. During the six months ended September 30, 2024, we had $0.5 million of net unrealized gains on derivatives and $2.7 million of net realized gains on derivatives. During the six months ended September 30, 2023, we had $4.5 million of net unrealized losses on derivatives and less than $0.1 million of net realized losses on derivatives.
Previous report
Butane product margins, excluding the impact of derivatives, increased during the six months ended September 30, 2024, as compared to the six months ended September 30, 2023, due to increased prices and volumes, as discussed further above.
Previous report
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 higher volumes, partially offset by lower commodity prices for biodiesel and RINs during the three months ended September 30, 2024.
Previous report
Other products sales product margins, excluding the impact of derivatives, during the six months ended September 30, 2024 increased due to the increase in biodiesel and asphalt volumes and higher commodity prices for other natural gas liquids.
Previous report
Gain on Disposal or Impairment of Assets, Net. During the six months ended September 30, 2023, we recorded a net gain of $6.9 million due to the sale of two terminals in July 2023 and recorded a net gain of $0.8 million due to disposal of certain other assets.
Reworded paragraphs (90)
Previous wording
The following is a discussion of NGL Energy Partners LP’s (“we,” “us,” “our,” or the “Partnership”) financial condition and results of operations as of and for the three months and six months ended September 30, 2024. The discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q (“Quarterly Report”), as well as Part II, Item 7–“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024 (“Annual Report”) filed with the Securities and Exchange Commission (“SEC”) on June 6, 2024.
Current wording
The following is a discussion of NGL Energy Partners LP’s (“we,” “us,” “our,” or the “Partnership”) financial condition and results of operations as of and for the three months and nine months ended December 31, 2024. The discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q (“Quarterly Report”), as well as Part II, Item 7–“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024 (“Annual Report”) filed with the Securities and Exchange Commission (“SEC”) on June 6, 2024.
Previous wording
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. Our results of operations for the three months and six months ended September 30, 2024 are not necessarily indicative of the results of operations to be expected for future periods or for the full fiscal year ending March 31, 2025.
Current wording
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. Our results of operations for the three months and nine months ended December 31, 2024 are not necessarily indicative of the results of operations to be expected for future periods or for the full fiscal year ending March 31, 2025.
Previous wording
(2) Total produced water barrels processed during the three months ended September 30, 2024 and 2023 were 246,700,755 and 224,605,594, respectively. These amounts do not include 7,693,542 barrels and 20,763,928 barrels for the three months ended September 30, 2024 and 2023, respectively, related to payments received from producers for committed volumes not delivered, as discussed further below.
Current wording
(1) Total produced water barrels processed during the three months ended December 31, 2024 and 2023 were 241,343,277 and 218,646,417, respectively. These amounts do not include 16,410,749 barrels and 20,992,750 barrels for the three months ended December 31, 2024 and 2023, 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 9,938,582 committed barrels not delivered during the three months ended December 31, 2024.
Previous wording
Water Disposal Service Fee Revenues. 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. Excluding this item, revenue decreased due primarily to lower fees for produced water processed during the period due to rate changes for certain existing contracts, 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. These decreases were partially offset by an increase in produced water volumes processed from contracted customers and higher fees charged for interruptible spot volumes.
Current wording
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.
Previous wording
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 an increase in recycled water volumes related to timing of water to be used in completions.
Current wording
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 a decrease in recycled water volumes related to timing of water to be used in completions.
Previous wording
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 15 to our unaudited condensed consolidated financial statements included in this Quarterly Report). We also had lower reimbursements from construction projects. These decreases were partially offset by higher reimbursements from booster operating fees and generator rentals.
Current wording
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 increase was due primarily to 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 current quarter. This increase was partially offset by 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 16 to our unaudited condensed consolidated financial statements included in this Quarterly Report). We also had lower reimbursements from construction projects, booster operating fees and generator rentals.
Previous wording
Cost of Sales-Excluding Impact of Derivatives. The decrease was due primarily to lower recycling costs and lower third-party disposal fees, partially offset by costs incurred that will be reimbursed by producers for generator and fuel costs at various booster stations.
Current wording
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.
Previous wording
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 three months ended September 30, 2024, we had $0.4 million of net unrealized losses on derivatives and $2.7 million of net realized gains on derivatives. During the three months ended September 30, 2023, we had $4.5 million of net unrealized losses on derivatives and less than $0.1 million of net realized losses on derivatives.
Current wording
Derivative Loss (Gain). 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 three months ended December 31, 2024, we had $1.9 million of net unrealized losses on derivatives and less than $0.1 million of net realized losses on derivatives. During the three months ended December 31, 2023, we had $6.4 million of net unrealized gains on derivatives and $1.1 million of net realized losses on derivatives.
Previous wording
Operating and General and Administrative Expenses. The increase was due primarily to higher business insurance expense for remediation costs incurred, higher utilities expense due to increased produced water volumes processed and lower severance taxes in the prior year quarter as a result of a severance tax refund received in September 2023 that related to prior periods. These increases were partially offset by lower chemical expense due to purchasing fewer chemicals and using chemicals more efficiently and lower repairs and maintenance expense due to the timing of repairs and tank cleaning.
Current wording
Operating and General and Administrative Expenses. The decrease was due primarily to lower utilities expense due to a negotiated long-term utility contract with lower rates, 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. These decreases were partially offset by higher royalty expense due to volumes related to the LEX II pipeline commencing operations and increased volumes at certain other saltwater disposal wells.
Previous wording
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 year ended March 31, 2024 and six months ended September 30, 2024.
Current wording
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 year ended March 31, 2024 and nine months ended December 31, 2024.
Previous wording
Loss on Disposal or Impairment of Assets, Net. During the three months ended September 30, 2024, we recorded a net loss of $3.5 million primarily related to the write down of the value of certain saltwater disposal wells as well as abandonment of certain capital projects and the retirement of certain other assets. In addition, we recorded a gain of $1.5 million from insurance recoveries for certain saltwater disposal facilities and boosters damaged in a prior period. During the three months ended September 30, 2023, we recorded a net loss of $21.2 million primarily related to the sale of certain assets and a net loss of $2.4 million related to the abandonment of certain capital projects and the retirement of certain assets.
Current wording
Loss (Gain) on Disposal or Impairment of Assets, Net. During the three months ended December 31, 2024, we recorded a net loss of $7.4 million primarily related to the write down of the value of certain saltwater disposal wells as well as abandonment of certain capital projects and the retirement of certain other assets. We also 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. In addition, we recorded a gain of $0.2 million from insurance recoveries for certain saltwater disposal facilities and boosters damaged in a prior period. During the three months ended December 31, 2023, we recorded a gain of $2.3 million from insurance recoveries for certain saltwater disposal facilities and boosters damaged in a prior period. In addition, we recorded a net loss of $0.9 million related to the abandonment of certain capital projects and the retirement of certain assets and a net loss of $0.9 million primarily related to the sale of certain assets.
Previous wording
(1) Revenues include $0.1 million and $0.1 million of intersegment sales during the three months ended September 30, 2024 and 2023, respectively, that are eliminated in our unaudited condensed consolidated statements of operations.
Current wording
(1) Revenues include $0.2 million and $0.1 million of intersegment sales during the three months ended December 31, 2024 and 2023, respectively, that are eliminated in our unaudited condensed consolidated statements of operations.
Previous wording
The decrease in the crude oil product margin was primarily due to lower contracted volumes purchased and sold year over year as discussed above. Crude oil product margin per barrel decreased during the three months ended September 30, 2024, compared to the three months ended September 30, 2023, primarily due to the sale of higher priced inventory into a market in which prices were declining, whereas during the three months ended September 30, 2023, we experienced the opposite in which we were selling lower priced inventory into a market in which prices were increasing. This decrease is partially offset by higher price and quality differentials realized in the current period compared to the prior period. Crude oil product margin calculations do not include gains and losses from derivatives that may offset the movement in the physical margin.
Current wording
During the three months ended December 31, 2024, the crude oil product margin decreased primarily due to lower volumes as discussed further above. The increase in the crude oil product margin per barrel for the three months ended December 31, 2024 was favorably impacted from the sale of the remaining pipeline transportation deficiency credits included in gross margin. When the impact of the sale of the pipeline transportation deficiency credits is removed, crude oil product margin per barrel realized is consistent during the three months ended December 31, 2024, compared to the three months ended December 31, 2023. Crude oil product margin calculations do not include gains and losses from derivatives that may offset the movement in the physical margin.
Previous wording
Derivative (Gain) Loss. Our cost of sales during the three months ended September 30, 2024 included $0.3 million of net realized gains on derivatives and $4.0 million of net unrealized gains on derivatives. Our cost of sales during the three months ended September 30, 2023 included $10.8 million of net realized losses on derivatives and $4.6 million of net unrealized losses on derivatives. The amounts for the three months ended September 30, 2023 included net realized gains of $9.4 million and net unrealized losses of $4.8 million associated with derivative instruments related to our hedge of the CMA Differential Roll, defined and discussed below under “Non-GAAP Financial Measures.” The CMA hedge expired as of December 31, 2023 and we did not enter into another hedge.
Current wording
Derivative Loss (Gain). Our cost of sales during the three months ended December 31, 2024 included $0.5 million of net realized losses on derivatives and $1.5 million of net unrealized losses on derivatives. Our cost of sales during the three months ended December 31, 2023 included $59.6 million of net realized gains on derivatives and $52.0 million of net unrealized losses on derivatives. The amounts for the three months ended December 31, 2023 included net realized gains of $61.5 million and net unrealized losses of $61.0 million associated with derivative instruments related to our hedge of the CMA Differential Roll, defined and discussed below under “Non-GAAP Financial Measures.” The CMA hedge expired as of December 31, 2023 and we did not enter into another hedge.
Previous wording
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 on a new shipper during the open season that ended January 5, 2024. Additionally, the three months ended September 30, 2024 also benefited from higher terminaling revenue from an acreage dedication in the Eagle Ford Basin as compared to the three months ended September 30, 2023. These increases were partially offset by lower storage fees at our Cushing terminal during the three months ended September 30, 2024, compared to the prior period.
Current wording
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 and higher throughput revenue. These increases were partially offset by lower storage fees at our Cushing terminal during the three months ended December 31, 2024, compared to the prior period.
Previous wording
During the three months ended September 30, 2024, physical volumes on the Grand Mesa Pipeline averaged approximately 63,000 barrels per day, compared to approximately 70,000 barrels per day during the three months ended September 30, 2023. Lower contracted volumes were shipped on the Grand Mesa Pipeline due to lower production on acreage dedicated to us in the DJ Basin.
Current wording
During the three months ended December 31, 2024, physical volumes on the Grand Mesa Pipeline averaged approximately 61,000 barrels per day, compared to approximately 70,000 barrels per day during the three months ended December 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.
Previous wording
Operating and General and Administrative Expenses. The increase was primarily due to higher ad valorem taxes due to higher assessed values on our Grand Mesa Pipeline assets in the State of Colorado, which we are currently protesting, and higher compensation expense incurred during the three months ended September 30, 2024. These increases were partially offset by lower utilities expense on the Grand Mesa Pipeline and at our Cushing terminal due to lower volumes flowing through the system during the three months ended September 30, 2024, compared to the three months ended September 30, 2023.
Current wording
Operating and General and Administrative Expenses. The increase was primarily due to a higher incentive compensation expense accrual during the three months ended December 31, 2024. This increase was partially offset by lower utilities expense on the Grand Mesa Pipeline and at our Cushing terminal from lower volumes flowing through the system and lower corporate cost allocations during the three months ended December 31, 2024, compared to the three months ended December 31, 2023.
Previous wording
(Gain) Loss on Disposal or Impairment of Assets, Net. During the six months ended September 30, 2024, we recorded a net gain of $0.4 million primarily due to a gain on the sale of certain assets. During the six months ended September 30, 2023, we recorded a net loss of $0.4 million primarily due to disposals and retirements of certain assets including linefill and certain real estate assets.
Current wording
Loss on Disposal or Impairment of Assets, Net. During the three months ended December 31, 2023, we recorded a net loss of $2.0 million primarily due to disposals and retirements of certain real estate assets.
Previous wording
Refined Products Sales and Cost of Sales-Excluding Impact of Derivatives. The decreases in sales and cost of sales, excluding the impact of derivatives, during the three months ended September 30, 2024 were primarily due to lower prices during the current quarter and a decrease in volumes due to lower demand.
Current wording
Refined Products Sales and Cost of Sales-Excluding Impact of Derivatives. The decreases in sales and cost of sales, excluding the impact of derivatives, during the three months ended December 31, 2024 were primarily due to lower commodity prices during the current quarter and a decrease in volumes due to lower demand.
Previous wording
Refined Products Derivative (Gain) Loss. Our Refined Products product margin during the three months ended September 30, 2024 included realized gains of less than $0.1 million and the three months ended September 30, 2023 included realized losses of $0.1 million.
Current wording
Refined Products Derivative Gain. Our cost of refined products sales during the three months ended December 31, 2024 included unrealized gains of less than $0.1 million and the three months ended December 31, 2023 included realized gains of $0.1 million.
Previous wording
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 primarily to lower volumes. Volumes decreased due to lower contracted volumes during the three months ended September 30, 2024, due to reduced retail customer demand. This decrease was partially offset by higher average propane prices during the three months ended September 30, 2024 compared to the three months ended September 30, 2023.
Current wording
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 primarily to lower volumes. Volumes decreased during the three months ended December 31, 2024 due to reduced retail customer demand resulting in lower contracted volumes due to the warmer than normal winters the past several years and lower spot market volumes due to the warmer weather during the period. This decrease was partially offset by higher average propane prices during the three months ended December 31, 2024 compared to the three months ended December 31, 2023.
Previous wording
Propane product margins, excluding the impact of derivatives, decreased during the three months ended September 30, 2024 due to lower volumes and selling higher priced inventory into a market in which prices were declining. During the three months ended September 30, 2023, we sold lower priced inventory into a market in which prices were increasing. Also, we incurred higher than anticipated costs to clean and repair railcars coming off lease during the three months ended September 30, 2024.
Current wording
Propane product margins, excluding the impact of derivatives, decreased during the three months ended December 31, 2024 due to lower volumes. During the three months ended December 31, 2023, we sold lower priced inventory into a market in which prices were increasing. Also, we incurred higher than anticipated costs to clean and repair railcars coming off lease during the three months ended December 31, 2024.
Previous wording
Propane Derivative (Gain) Loss. Our cost of propane sales during the three months ended September 30, 2024 included net unrealized losses of $1.1 million on derivatives and $2.6 million of net realized gains on derivatives. Our cost of propane sales during the three months ended September 30, 2023 included $0.9 million of net unrealized gains on derivatives and $3.7 million of net realized losses on derivatives.
Current wording
Propane Derivative Gain. Our cost of propane sales during the three months ended December 31, 2024 included net unrealized gains of $1.9 million on derivatives and $1.3 million of net realized losses on derivatives. Our cost of propane sales during the three months ended December 31, 2023 included $3.0 million of net unrealized gains on derivatives and $1.9 million of net realized losses on derivatives.
Previous wording
Butane 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 increased commodity prices during the three months ended September 30, 2024 compared to prices during the three months ended September 30, 2023. The increase was also due to a strong start to the gasoline blending season and stronger exports during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.
Current wording
Butane 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 increased commodity prices during the three months ended December 31, 2024 compared to prices during the three months ended December 31, 2023. These increases were offset by lower volumes due to a weaker gasoline blending season and a weaker spot market during the three months ended December 31, 2024.
Previous wording
Butane Derivative Loss. Our cost of butane sales during the three months ended September 30, 2024 included $5.2 million of net unrealized losses on derivatives and $0.3 million of net realized losses on derivatives. Our cost of butane sales during the three months ended September 30, 2023 included $4.5 million of net unrealized losses on derivatives and $3.1 million of net realized gains on derivatives.
Current wording
Butane Derivative Loss. Our cost of butane sales during the three months ended December 31, 2024 included $3.5 million of net unrealized gains on derivatives and $11.2 million of net realized losses on derivatives. Our cost of butane sales during the three months ended December 31, 2023 included $6.5 million of net unrealized losses on derivatives and $0.5 million of net realized losses on derivatives.
Previous wording
Other Products Derivative Gain. Our derivatives of other products during the three months ended September 30, 2024 included $2.9 million of net unrealized losses on derivatives and $9.4 million of net realized gains on derivatives. Our derivatives of other products during the three months ended September 30, 2023 included $0.5 million of net unrealized gains on derivatives and $6.4 million of net realized gains on derivatives.
Current wording
Other Products Derivative Loss (Gain). Our derivatives of other products during the three months ended December 31, 2024 included $1.1 million of net unrealized losses on derivatives and $1.4 million of net realized losses on derivatives. Our derivatives of other products during the three months ended December 31, 2023 included $0.1 million of net unrealized losses on derivatives and $5.4 million of net realized gains on derivatives.
Previous wording
Service Sales and Cost of Sales. The sales includes storage, terminaling and transportation services income. Revenues and cost of sales during the six months ended September 30, 2024 were consistent with the six months ended September 30, 2023.
Current wording
Service Sales and Cost of Sales. The sales includes storage, terminaling and transportation services income. Revenues and cost of sales during the three months ended December 31, 2024 were consistent with the three months ended December 31, 2023.
Previous wording
Operating and General and Administrative Expenses. The increase during the three months ended September 30, 2024 compared to three months ended September 30, 2023 is due primarily to an increase to the provision for expected credit losses and an increase in sales commissions.
Current wording
Operating and General and Administrative Expenses. The decrease during the three months ended December 31, 2024 compared to three months ended December 31, 2023 is due primarily to a decrease in incentive compensation due to lower than expected earnings and lower travel and entertainment expenses due to our efforts in the prior year to visit all customers.
Previous wording
Service Revenues. These revenues relate to payments made by the noncontrolling interest holder for usage of the airplane acquired in June 2024.
Current wording
Service Revenues. These revenues relate to billings to the noncontrolling interest holders for usage of the airplanes acquired in June and October 2024.
Previous wording
Cost of Sales - Derivative Gain. Our cost of sales during the three months ended September 30, 2023 included $0.8 million of net realized gains on derivatives and $2.6 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 September 30, 2024.
Current wording
Cost of Sales - Derivative Gain. Our cost of sales during the three months ended December 31, 2023 included $0.2 million of net realized gains on derivatives and $1.6 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 December 31, 2024.
Previous wording
General and Administrative Expenses. The expenses during the three months ended September 30, 2024 decreased due to lower legal expenses as several large cases ended, the reimbursement of legal expenses relating to a dispute associated with commercial activities in prior periods and lower compensation expense due to the elimination of share-based compensation expense due to all outstanding long-term incentive plan awards being fully vested in November 2023. Business insurance was also lower for the period, as we paid an insurance company to be released from any future supplementary calls on our indemnity policy related to our former crude marine business (which was sold on March 30, 2023) during the three months ended September 30, 2023, as well as accruing for higher claims in the prior year. These decreases were partially offset by higher incentive compensation expense.
Current wording
General and Administrative Expenses. The expenses during the three months ended December 31, 2024 decreased due to business insurance expense being lower for the period, as we paid an insurance company during the three months ended December 31, 2023 for the release of any supplementary calls related to our former crude marine business and a reduction in current year automobile claims. In addition, legal expenses were lower as several large cases ended and lease expense decreased due to subleasing part of our office space in Denver, Colorado and reducing our office space in Tulsa, Oklahoma.
Previous wording
Equity in earnings of unconsolidated entities was $1.5 million during the three months ended September 30, 2024, compared to $0.9 million during the three months ended September 30, 2023. The increase of $0.7 million during the three months ended September 30, 2024 was due primarily to higher earnings from certain membership interests related to specific land and water services operations and a lower loss from our interest in an aircraft company which was dissolved on April 30, 2024.
Current wording
Equity in earnings of unconsolidated entities was $1.4 million during the three months ended December 31, 2024, compared to $0.8 million during the three months ended December 31, 2023. The increase of $0.5 million during the three months ended December 31, 2024 was due primarily to higher earnings from certain membership interests related to specific land and water services operations.
Previous wording
The debt interest expense increased $14.0 million during the three months ended September 30, 2024 primarily due to higher interest rates on Term Loan B, the $900.0 million of 8.125% senior secured notes that mature on February 15, 2029 (“2029 Senior Secured Notes”) and the $1.3 billion of 8.375% senior secured notes that mature on February 15, 2032 (“2032 Senior Secured Notes”).
Current wording
The debt interest expense increased $14.6 million during the three months ended December 31, 2024 primarily due to higher interest rates on the Term Loan B, the $900.0 million of 8.125% senior secured notes that mature on February 15, 2029 (“2029 Senior Secured Notes”) and the $1.3 billion of 8.375% senior secured notes that mature on February 15, 2032 (“2032 Senior Secured Notes”) compared to our outstanding debt instruments in the prior year period.
Previous wording
Gain on early extinguishment of liabilities, net of $0.1 million during the three months ended September 30, 2023 consisted of debt issuance costs previously written off that were reversed. We did not repurchase any debt during the three months ended September 30, 2024.
Current wording
We did not repurchase any debt during the three months ended December 31, 2024 or 2023.
Previous wording
Other income, net of $1.8 million during the three months ended September 30, 2024 consisted of an unrealized gain on an investment and interest income on loan receivables. Other income, net of $0.3 million during the three months ended September 30, 2023 consisted primarily of interest income on loan receivables (see Note 2 to our unaudited condensed consolidated financial statements included in this Quarterly Report for a further discussion).
Current wording
Other income, net of $0.5 million during the three months ended December 31, 2024 consisted of a gain on the expiration of an option, interest income on loan receivables and an unrealized loss on an investment. Other income, net of $0.5 million during the three months ended December 31, 2023 consisted primarily of interest income on loan receivables (see Note 2 to our unaudited condensed consolidated financial statements included in this Quarterly Report for a further discussion).
Previous wording
Income tax expense was $0.3 million during the three months ended September 30, 2024, compared to income tax expense of $0.3 million during the three months ended September 30, 2023. See Note 2 to our unaudited condensed consolidated financial statements included in this Quarterly Report for a further discussion.
Current wording
Income tax benefit was $0.3 million during the three months ended December 31, 2024, compared to income tax expense of $0.2 million during the three months ended December 31, 2023. See Note 2 to our unaudited condensed consolidated financial statements included in this Quarterly Report for a further discussion.
Previous wording
Noncontrolling interests represent the portion of certain consolidated subsidiaries that are owned by third-parties. Noncontrolling interest income was $0.9 million during the three months ended September 30, 2024, compared to $0.3 million during the three months ended September 30, 2023. The increase of $0.7 million during the three months ended September 30, 2024 was due primarily to higher income from certain water solutions operations.
Current wording
Noncontrolling interests represent the portion of certain consolidated subsidiaries that are owned by third-parties. Noncontrolling interest income was $1.1 million during the three months ended December 31, 2024, compared to $0.1 million during the three months ended December 31, 2023. The increase of $1.0 million during the three months ended December 31, 2024 was due primarily to higher income from certain water solutions operations.
Previous wording
Segment Operating Results for the Six Months Ended September 30, 2024 and 2023
Current wording
Segment Operating Results for the Nine Months Ended December 31, 2024 and 2023
Previous wording
(1) As of March 31, 2023, approximately 34,380 barrels of skim oil were stored and were sold during the six months ended September 30, 2023.
Current wording
(1) As of March 31, 2023, approximately 34,380 barrels of skim oil were stored and were sold during the nine months ended December 31, 2023.
Previous wording
(2) Total produced water barrels processed during the six months ended September 30, 2024 and 2023 were 471,049,065 and 448,325,889, respectively. These amounts do not include 19,393,348 barrels and 23,873,967 barrels for the six months ended September 30, 2024 and 2023, respectively, related to payments received from producers for committed volumes not delivered, as discussed further below.
Current wording
(2) Total produced water barrels processed during the nine months ended December 31, 2024 and 2023 were 712,392,342 and 666,972,306, respectively. These amounts do not include 35,804,097 barrels and 44,866,717 barrels for the nine months ended December 31, 2024 and 2023, respectively, related to payments made by certain producers for committed volumes not delivered, as discussed further below. In addition, water pipeline revenue, which is included in Other Revenues, includes payments from a producer for 9,938,582 committed barrels not delivered during the nine months ended December 31, 2024.
Showing the first 40 of 90 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
(2) Excluding payments made by certain producers for committed volumes not delivered, service fees for produced water processed ($/barrel) would have been $0.60/barrel and $0.61/barrel during the three months ended December 31, 2024 and 2023, respectively.
Current report — wording carried from elsewhere
Recovered Crude Oil Revenues. The decrease was due primarily to lower realized crude oil prices received from the sale of skim oil barrels, partially offset by an increase in skim oil barrels sold due to more skim oil recovered from receiving more water in higher oil cut basins.
Current report — wording carried from elsewhere
Cost of Sales-Excluding Impact of Derivatives. The decrease was due primarily to lower recycling costs and a decrease in disposal fees paid to third-parties, partially offset by costs incurred that will be reimbursed by producers for generator and fuel costs at various booster stations.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
(1) As of June 30, 2023, approximately 53,000 barrels of skim oil were stored and were sold during the three months ended September 30, 2023.
Previous report — wording carried elsewhere
(3) Excluding the one-time item discussed below, service fees for produced water processed ($/barrel) would have been $0.64/barrel during the six months ended September 30, 2023.