NGL Energy Partners LP

Current report

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).

Current report

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.

Current report

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).

Current report

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.

Current report

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.

Current report

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.

Current report

Recent Developments

Current report

Dispositions

Current report

(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.

Current report

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.

Current report

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 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.

Current report

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.

Current report

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.

Current report

(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.

Current report

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.

Current report

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.

Current report

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.

Current report

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.

Current report

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.

Current 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 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.

Current report

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.

Current report

Service Revenues. These revenues relate to billings to the noncontrolling interest holders for usage of the airplanes acquired in June and October 2024.

Current report

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.

Current report

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).

Current report

Income Tax Benefit (Expense)

Current report

Noncontrolling Interests - Redeemable and Nonredeemable

Current report

(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.

Current report

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.

Current report

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.

Current report

Noncontrolling Interests - Redeemable and Nonredeemable

Current report

(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.

Current report

(2) Excludes amounts related to unconsolidated entities and noncontrolling interests.

Current report

(6) Amounts include our refined products and biodiesel businesses.

Current report

The following table summarizes additional amounts attributable to discontinued operations in the EBITDA and Adjusted EBITDA table above for the periods indicated:

Current report

Senior Secured Notes

Current report

Sources (Uses) of Cash

Current report

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):

Current report

Contingent Consideration Liabilities

Current report

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. Changes 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.

Previous report

The following table summarizes the range of low and high Gulf Coast gasoline spot prices per barrel using NYMEX gasoline prompt-month futures for the periods indicated and the prices at period end:

Previous report

The following table summarizes the range of low and high diesel spot prices per barrel using NYMEX ULSD prompt-month futures for the periods indicated and the prices at period end:

Previous report

Our Liquids Logistics segment generated operating income of $2.5 million during the year ended March 31, 2024, compared to operating income of $66.6 million during the year ended March 31, 2023.

Previous report

Global Pandemic, International Conflicts and Market Update

Previous report

Since March 2020, and throughout the last three years, global markets and commodity prices have been extremely volatile due to the impacts from the COVID-19 pandemic, with further impacts on volatility caused by the war in Ukraine that began in February 2022, the current conflict between Israel and Hamas that began in October 2023 and conflicts involving Iran and its proxy forces. While we have seen continued recovery in commodity prices since the beginning of the pandemic, there is still volatility that we expect to continue at least for the near-term and possibly longer, due to these conflicts. This volatility could result in economic recession or depression and negatively impact future prices for crude oil, natural gas, petroleum products and industrial products.

Previous report

In addition, if we see a continuation or acceleration of fiscal year 2023’s inflationary conditions, rising interest rates, supply chain disruptions and tight labor markets, we may also see higher costs of operating our assets and executing on our capital projects in fiscal year 2025. In an effort to curb inflation, the U.S. Federal Reserve raised interest rates during fiscal year

Previous report

2023, in May 2023 and most recently in July 2023. If the U.S. Federal Reserve implements additional increases, costs under our variable-rate debt and preferred units will increase (see “Item 7A. Quantitative and Qualitative Disclosures About Market Risk–Interest Rate Risk” included in this Annual Report on Form 10-K (“Annual Report”)). On the other hand, our ability to pass along rate increases reflecting changes in producer and/or consumer price indices to our customers, under our contracts, should help to counterbalance the impact of inflation on our costs.

Previous report

Regulatory Developments

Previous report

On March 6, 2024, the Securities and Exchange Commission (“SEC”) adopted a new set of rules that require a wide range of climate-related disclosures, including material climate-related risks, information on any climate-related targets or goals that are material to the registrant’s business, results of operations, or financial condition, Scope 1 and Scope 2 greenhouse gasemissions on a phased-in basis by certain larger registrants when those emissions are material and the filing of an attestation report covering the same, and disclosure of the financial statement effects of severe weather events and other natural conditions including costs and losses. Compliance dates under the final rule are phased in by registrant category. Multiple lawsuits have been filed challenging the SEC’s new climate rules, which have been consolidated and will be heard in the U.S. Court of Appeals for the Eighth Circuit. On April 4, 2024, the SEC issued an order staying the final rules until judicial review is complete.

Previous report

Debt Refinancing

Previous report

On February 2, 2024, we closed a debt refinancing transaction of $2.9 billion consisting of a private offering of $2.2 billion of senior secured notes and also entered into a new seven-year $700.0 million senior secured term loan “B” credit facility (“Term Loan B”). The net proceeds from these transactions were used to (i) fund the redemption, and related discharge of the indentures governing our existing 7.5% senior secured notes due 2026 (“2026 Senior Secured Notes”) as well as our 6.125% senior unsecured notes due 2025 (“2025 Notes”) and 7.5% senior unsecured notes due 2026 (“2026 Notes”) (collectively, the “Senior Unsecured Notes”), including any applicable premiums and accrued and unpaid interest, (ii) to pay fees and expenses in connection therewith, (iii) to repay borrowings under the $600.0 million asset-based revolving credit facility (“ABL Facility”) and (iv) to the extent of any remaining net proceeds, for general corporate purposes. In addition, we amended the ABL Facility. See Note 7 to our consolidated financial statements included in this Annual Report and “–Liquidity, Sources of Capital and Capital Resource Activities” for a further discussion of these transactions.

Previous report

Repurchase and/or Redemption of Senior Secured Notes and Senior Unsecured Notes

Previous report

During the three months ended March 31, 2024, we repurchased and/or redeemed all $2.1 billion of our outstanding 2026 Senior Secured Notes and $280.7 million of the 2025 Notes. On February 2, 2024, we deposited $331.9 million with the trustee for the redemption of the 2026 Notes. See Note 7 to our consolidated financial statements included in this Annual Report for a further discussion of the repurchases and redemptions.

Previous report

(1) Revenues include $0.5 million and $8.6 million of intersegment sales during the years ended March 31, 2024 and 2023, respectively, that are eliminated in our consolidated statements of operations.

Previous report

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 year ended March 31, 2024 were primarily due to a decrease in sales prices during the current year due to lower commodity prices. This decrease was partially offset by an increase in volumes, as we have added new supply and customer contracts in certain markets.

Previous report

Refined Products product margins, excluding the impact of derivatives, for the year ended March 31, 2024 decreased from the year ended March 31, 2023 due primarily to the higher margins generated in the prior year due to higher demand in several markets experiencing tighter supply. These supply issues returned to normal in the current year as supply issues were resolved and the supply/demand balance was restored.

Previous report

Refined Products Derivative Loss. Our Refined Products product margin during the year ended March 31, 2024 included realized losses of $0.1 million and the year ended March 31, 2023 included realized losses of $1.3 million.

Previous report

Other products sales product margins, excluding the impact of derivatives, decreased during the year ended March 31, 2024 due to the increased supply of biodiesel in the market due to the EPA’s final RFS mandate, which lowered biodiesel and renewable identification numbers prices and delivery of biodiesel contracts entered into in the prior year, when prices were higher, for delivery in the current period when prices were declining.

Previous report

Water Disposal Service Fee Revenues. The increase was due to an increase in produced water volumes processed as a result of increased crude oil production driven by higher crude oil prices and completion activity, primarily in the Delaware Basin as well as higher fees charged for spot volumes. In addition, there was 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. These were partially offset by lower service fees received per barrel due to increased volumes from customers with long-term acreage dedications or minimum volume commitments with lower contracted fees.

Previous report

Recovered Crude Oil Revenues. The increase was due primarily to higher volumes of skim oil barrels sold due to an increase in produced water volumes processed as well as higher realized crude oil prices received from the sale of skim oil barrels. Additionally, an increase in the number of wells completed in our area of operations during the period with increased flowback activity resulted in higher skim oil volumes per barrel of produced water processed.

Previous report

Recycled Water Revenues. The increase was due primarily to increasing demand for water to be used in completions, driven by an increase in drilling and completion activity primarily in the Delaware Basin, and our customers’ transition from brackish non-potable water to recycled water, partially offset by lower pricing for recycled water.

Previous report

Operating and General and Administrative Expenses. The increase was due primarily to higher utility, royalty and chemical expenses as a result of the increase in produced water volumes processed. Utility, royalty and chemical expenses, which are three of our largest variable expenses, were not impacted by the rise in inflation due to negotiated long-term utility contracts with fixed rates, royalty contracts with no escalation clauses and a fixed chemical expense per barrel with our chemical provider. The increase was also due to higher incentive compensation expense, higher severance taxes due to the increase in revenue from recovered crude oil and higher repairs and maintenance expense due to timing of repairs and the operation of temporary booster stations.

Previous report

(1) Revenues include $8.6 million and $11.1 million of intersegment sales during the years ended March 31, 2023 and 2022, respectively, that are eliminated in our consolidated statements of operations.

Previous report

(2) Information is presented as of March 31, 2023 and March 31, 2022, respectively. The decrease in crude oil inventory was due primarily to capitalizing additional crude oil barrels as linefill as a result of increased requirements.

Previous report

Crude Oil Sales and Cost of Sales-Excluding Impact of Derivatives. The decrease in sales was due primarily to a reduction in sales volumes primarily due to lower production in the DJ Basin and increased buy/sell transactions during the year ended March 31, 2023. Buy/sell transactions are transactions in which we purchase product from a counterparty and sell the same volumes of product to the same counterparty at a different location or time. The sales, cost of sales and volumes are netted for these transactions. The decrease was partially offset by an increase in crude oil prices during the year ended March 31, 2023, compared to the year ended March 31, 2022. The increase in cost of sales, excluding the impact of derivatives, was due primarily to an increase in crude oil prices during the year ended March 31, 2023, compared to the year ended March 31, 2022 which was offset by a decrease in sales volumes.

Previous report

Crude oil product margin from the sale of crude oil decreased primarily due to the sale of higher priced inventory into a market in which prices were declining for most of the year. In the prior year, lower priced inventory was sold into a market in which prices were rising for most of the year. In addition, we incurred increased freight costs during the current period. This decrease in product margin was offset by higher contracted rates with certain producers as well as increased differentials on certain other sales contracts during the first nine months of the current year. Crude oil product margin calculations do not include gains and losses from derivatives that may offset the movement in the physical margin.

Previous report

Crude Oil Transportation and Other Sales. The increase was primarily due to an increase in charter days and day rates within our marine transportation business as demand increased. On March 30, 2023, we sold our marine assets (see Note 17 to our consolidated financial statements included in this Annual Report).

Previous report

Operating and General and Administrative Expenses. The decrease was primarily related to the sale of the trucking business during the year ended March 31, 2022, and lower lease expense during the current period due to the completion of the renegotiation of certain leases.

Previous report

Depreciation and Amortization Expense. The decrease was due primarily to the sale of our trucking assets during the year ended March 31, 2022.

Previous report

Loss (Gain) on Disposal or Impairment of Assets, Net. 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. During the year ended March 31, 2022, we recorded a gain of $5.5 million on the sale of our trucking assets and a loss of $2.2 million due to damage caused by Hurricane Ida to one of our Gulf Coast terminals.

Previous report

(1) Revenue includes $1.3 million of intersegment sales during the year ended March 31, 2022 that is eliminated in our consolidated statement of operations.

Previous report

Refined Products Sales and Cost of Sales-Excluding Impact of Derivatives. The increases in sales and cost of sales, excluding the impact of derivatives, were due to an increase in refined products prices. This was partially offset by a decrease in volumes primarily related to tighter supply in certain markets.

Previous report

Refined Products product margins, excluding the impact of derivatives, for the year ended March 31, 2023 increased from the year ended March 31, 2022 due to higher demand in several markets that were experiencing tighter supply as well as being well positioned from a supply and inventory perspective during the continued period of extreme volatility in commodity prices.

Previous report

Refined Products Derivative Loss. Our Refined Products product margin during the year ended March 31, 2023 included realized losses of $1.3 million and the year ended March 31, 2022 included realized losses of $2.9 million.

Previous report

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 propane prices and a decline in volumes. Propane prices have declined along with the decline in global energy prices as a result of the increase in interest rates to curb inflation and the overall concerns in the economy about a potential recession, as well as due to an increase in the days of domestic supply available, combined with lower demand due to the warmer heating season. Sales volumes decreased due to the decommissioning ofa critical underground storage facility in the Midwest in April 2022, which were offset by an increase in sales volumes in the state of Michigan due to the completion of the Ambassador Pipeline.

Previous report

Propane product margins, excluding the impact of derivatives, increased as we replaced our inventory in a lower price environment and we realized the margin associated with our forward fixed-priced sales contracts and lower inventory costs due to the decreasing prices throughout the year ended March 31, 2023. During the year ended March 31, 2022, we experienced the opposite situation and were replacing our inventory when prices were rising.

Previous report

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 to lower volumes due to weaker spot demand for the product, especially exports, and lower prices. The softening of export economics continued throughout the year, which led to lower domestic prices as less product was being moved abroad.

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 due to an increased supply of biodiesel to sell during the current year compared to the prior year period due to favorable supply contracts entered into in the prior year. The increase was also related to the increase in asphalt revenues due to increased supply.

Previous report

Service Sales and Cost of Sales. The sales include storage, terminaling and transportation services income. The decrease during the year ended March 31, 2023 was due to the disposition of Sawtooth Caverns, LLC (“Sawtooth”)in June 2021 as well as less throughput in certain of our propane and butane terminals. Cost of sales increased due to higher chemical costs at our natural gas liquids terminals.

Previous report

Operating and General and Administrative Expenses. The decrease was primarily related to lower incentive compensation due to lower operating results.

Current report — wording carried from elsewhere

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).

Current report — wording carried from elsewhere

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.

Current report — wording carried from elsewhere

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.

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.

Current report — wording carried from elsewhere

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.

Current report — wording carried from elsewhere

Depreciation and Amortization Expense. The decrease was primarily due to certain assets becoming fully depreciated during the year ended March 31, 2024.

Current report — wording carried from elsewhere

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.

Current report — wording carried from elsewhere

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 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.

Current report — wording carried from elsewhere

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.

Current report — wording carried from elsewhere

Loss on Early Extinguishment of Liabilities, Net

Current report — wording carried from elsewhere

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.

Current report — wording carried from elsewhere

Recycled Water Revenues. The decrease was due primarily to lower recycled water volumes related to timing of water to be used in completions.

Current report — wording carried from elsewhere

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.

Current report — wording carried from elsewhere

(1) Information is presented as of March 31, 2024 and March 31, 2023, respectively.

Current report — wording carried from elsewhere

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.

Current report — wording carried from elsewhere

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.

Previous report — wording carried elsewhere

The following table summarizes the operating results of our Liquids Logistics segment for the periods indicated:

Previous report — wording carried elsewhere

Other Revenues. The decrease was due primarily to lower sales of brackish non-potable water related to the termination of a joint marketing agreement as well as our customers transitioning from brackish non-potable water to recycled water, partially offset by reimbursements from construction projects in the current period.

Previous report — wording carried elsewhere

Cost of Sales-Excluding Impact of Derivatives. The decrease was due primarily to lower purchases of brackish non-potable water from third-parties to meet customer needs due to the termination of a joint marketing agreement.

Previous report — wording carried elsewhere

The following table summarizes the operating results of our Liquids Logistics segment for the periods indicated:

Previous report — wording carried elsewhere

Butane product margins, excluding the impact of derivatives, declined during the year ended March 31, 2023, as compared to the year ended March 31, 2022, due to the declining prices, lower export demand and increased freight charges due to higher fuel surcharges. In addition, we were also 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.

Previous report — wording carried elsewhere

Loss on Disposal or Impairment of Assets, Net. 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 $0.2 million related to the sale and retirement of other assets. During the year ended March 31, 2022, we recorded a net loss of $60.1 million related to the sale of Sawtooth (see Note 17 to our consolidated financial statements included in this Annual Report) and a net loss of $11.8 million related to the sale of another terminal during the three months ended September 30, 2021.

Previous report — wording carried elsewhere

Gain on Early Extinguishment of Liabilities, Net

Previous report — wording carried elsewhere

Other income, net was $28.7 million during the year ended March 31, 2023, compared to other income, net of $2.3 million during the year ended March 31, 2022. The increase in other income, net of $26.4 million during the year ended March 31, 2023 was due primarily to the 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).