NGL Energy Partners LP

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 ended June 30, 2026. The discussion should be read in conjunction with our 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, 2026 (“Annual Report”) filed with the Securities and Exchange Commission on May 28, 2026.

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 six months ended September 30, 2026. The discussion should be read in conjunction with our 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, 2026 (“Annual Report”) filed with the Securities and Exchange Commission on May 28, 2026.

Previous wording

On May 7, 2026, we announced a further expansion of our Lea County Express Pipeline System to increase capacity by 165,000 barrels of water per day with a capability to transport approximately 560,000 barrels of water per day on the LEX II system. This expansion is underwritten by a newly executed long-term volume commitment contract that includes increased volume commitments, and an additional four township committed area in Eddy County, New Mexico. The LEX II expansion is expected to be in service by the end of calendar year 2026. Additionally, this expansion is expandable up to 650,000 barrels of water per day.

Current wording

On May 7, 2026, we announced a further expansion of our Lea County Express Pipeline System to increase capacity by 165,000 barrels of water per day with a capability to transport approximately 560,000 barrels of water per day on the LEX II system. This expansion is underwritten by a newly executed long-term volume commitment contract that includes increased volume commitments, and an additional four township committed area in Eddy County, New Mexico. The LEX II expansion is expected to be in service by the end of calendar year 2026. Additionally, the LEX II system is expandable up to 650,000 barrels of water per day.

Previous wording

Operating income increased $47.9 million for the three months ended June 30, 2026, compared with the same period in 2025, primarily as a result of the following:

Current wording

Operating income decreased $70.3 million for the three months ended September 30, 2026, compared with the same period in 2025, primarily as a result of the following:

Previous wording

•Water Solutions– an increase of $53.6 million due primarily to higher water disposal revenues from an increase in produced water volumes processed, higher revenues from recovered crude oil and higher pipeline revenues;

Current wording

•Water Solutions– an increase of $2.3 million due primarily to higher water disposal revenues from an increase in produced water volumes processed, higher revenues from recovered crude oil and higher pipeline revenues, partially offset by derivative losses and higher operating expenses;

Previous wording

•Corporate and Other– an increase in operating losses of $3.5 million due primarily to equity-based compensation expense.

Current wording

•Corporate and Other– an increase in operating losses of $5.0 million due primarily to equity-based compensation expense.

Previous wording

•Liquids Logistics– a decrease of $7.4 million due primarily to lower expenses in the prior year period, which included a gain on the sale of assets, partially offset by higher butane margins, service revenue, and derivative gains; and

Current wording

•Liquids Logistics– a decrease of $10.3 million due primarily to higher derivative losses in the current year and lower gains on the sale of assets, partially offset by higher product margins, excluding derivatives, and higher service revenue; and

Previous wording

(2) Brackish non-potable water, which was previously included in Other revenues, was reclassified and is now included in Recycled water.

Current wording

(2) Brackish non-potable water, which was previously included in Other revenues, was reclassified and is now included in Sale of water.

Previous wording

(4) Total produced water barrels processed during the three months ended June 30, 2026 and 2025 were 301,669,982 and 252,216,853, respectively. These amounts do not include 6,457,258 barrels and 16,367,740 barrels for the three months ended June 30, 2026 and 2025, respectively, related to payments made by certain producers for committed volumes not delivered. In addition, water pipeline revenue, which is included in Other revenues, includes payments from a producer for 3,597,195 and 9,446,030 committed barrels not delivered during the three months ended June 30, 2026 and 2025, respectively.

Current wording

(4) Total produced water barrels processed during the three months ended September 30, 2026 and 2025 were 317,095,315 and 257,913,208, respectively. These amounts do not include 1,123,132 barrels and 23,670,072 barrels for the three months ended September 30, 2026 and 2025, respectively, related to payments made by certain producers for committed volumes not delivered. In addition, water pipeline revenue, which is included in Other revenues, includes payments from a producer for 3,225,976 and 8,160,115 committed barrels not delivered during the three months ended September 30, 2026 and 2025, respectively.

Previous wording

(5) Excluding payments made by certain producers for committed volumes not delivered, service fees for produced water processed ($/barrel) would have been $0.58/barrel and $0.61/barrel during the three months ended June 30, 2026 and 2025, respectively.

Current wording

(5) Excluding payments made by certain producers for committed volumes not delivered, service fees for produced water processed ($/barrel) would have been $0.59/barrel and $0.61/barrel during the three months ended September 30, 2026 and 2025, respectively.

Previous wording

Recycled Water Revenues. Revenue from recycled water primarily includes the sale of produced water and recycled water for use in our customers’ completion activities. The increase was due primarily to higher pricing for recycled water. partially offset by lower recycled water volumes related to timing of water to be used in completions.

Current wording

Sale of Water Revenues. Revenue from sales of water primarily includes the sale of produced water and recycled water for use in our customers’ completion activities. The increase was due primarily to higher pricing for recycled water, partially offset by lower recycled water volumes related to timing of water to be used in completions.

Previous wording

Operating and General and Administrative Expenses. The increase was due primarily to higher royalty expense from increased volumes related to certain saltwater disposal wells, higher utilities expense due to increased produced water volumes processed and higher severance taxes due to the increase in revenue from recovered crude oil.

Current wording

Operating and General and Administrative Expenses. The increase was due primarily to higher royalty expense from increased volumes related to certain saltwater disposal wells, higher utilities expense due to increased produced water volumes processed and newly constructed assets placed in-service in advance of permanent grid power infrastructure availability and higher severance taxes due to the increase in revenue from recovered crude oil.

Previous wording

Depreciation and Amortization Expense. The decrease was due primarily to certain long-term assets being fully amortized, impaired or sold during the fiscal year ended March 31, 2026 and three months ended June 30, 2026, partially offset by depreciation of newly developed facilities and infrastructure.

Current wording

Depreciation and Amortization Expense. The decrease was due primarily to certain long-term assets being fully amortized, impaired or sold during the fiscal year ended March 31, 2026 and six months ended September 30, 2026, partially offset by depreciation of newly developed facilities and infrastructure.

Previous wording

•a net gain of $0.1 million primarily related to the sale of certain assets.

Current wording

•a net loss of $0.1 million primarily related to the sale of certain assets.

Previous wording

•a gain of $0.7 million from insurance recoveries for certain saltwater disposal facilities and boosters damaged in a prior period.

Current wording

•a gain of $1.4 million from insurance recoveries for certain saltwater disposal facilities and boosters damaged in a prior period; and

Previous wording

During the three months ended June 30, 2026, the crude oil product margin and margin per barrel decreased compared to the three months ended June 30, 2025 due to selling higher priced inventory into a declining market and due to the expiration of a crude oil purchase agreement with a certain producer during the three months ended March 31, 2026. 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 September 30, 2026, the crude oil product margin per barrel decreased compared to the prior year period due to the expiration of a crude oil purchase agreement with a certain producer during the three months ended March 31, 2026. Crude oil product margin calculations do not include gains and losses from derivatives that may offset the movement in the physical margin.

Previous wording

During the three months ended June 30, 2026, physical volumes on the Grand Mesa Pipeline averaged approximately 74,000 barrels per day, compared to approximately 55,000 barrels per day during the three months ended June 30, 2025. Higher contracted volumes were shipped on the Grand Mesa Pipeline due to higher production on acreage dedicated to us in the DJ Basin.

Current wording

During the three months ended September 30, 2026, physical volumes on the Grand Mesa Pipeline averaged approximately 64,000 barrels per day, compared to approximately 72,000 barrels per day during the three months ended

Previous wording

Butane Sales and Cost of Sales-Excluding Impact of Derivatives. The increase in sales and cost of sales, excluding the impact of derivatives, during the three months ended June 30, 2026, compared to the three months ended June 30, 2025 were due primarily to higher butane prices and volumes during the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

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, during the three months ended September 30, 2026, compared to the prior year period, were primarily due to higher butane prices and volumes.

Previous wording

Propane product margins, excluding the impact of derivatives, increased during the three months ended June 30, 2026, compared to the three months ended June 30, 2025 primarily due to the Wholesale Propane Disposition.

Current wording

Propane product margins, excluding the impact of derivatives, increased during the three months ended September 30, 2026, compared to the prior year period, primarily due to higher propane prices as well as optimizing our freight costs.

Previous wording

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 increased commodity prices during the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

Current wording

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 increased commodity prices during the three months ended September 30, 2026, compared to the prior year period, partially offset by lower volumes.

Previous wording

Other products sales product margins, excluding the impact of derivatives, decreased during the three months ended June 30, 2026, compared to the three months ended June 30, 2025 primarily due to lower asphalt volumes due to tighter supply.

Current wording

Other products sales product margins, excluding the impact of derivatives, decreased during the three months ended September 30, 2026, compared to the prior year period, primarily due to lower isobutane volumes due to refinery issues and lower asphalt volumes due to tighter supply.

Previous wording

General and Administrative Expenses. The increase during the three months ended June 30, 2026 was due primarily to equity-based compensation expense related to grants made under the 2025 Long-Term Incentive Plan and a reduction in the allocation of insurance premiums to the other business segments.

Current wording

General and Administrative Expenses. The increase during the three months ended September 30, 2026 was due primarily to equity-based compensation expense related to awards granted under the 2025 Long-Term Incentive Plan (“2025 Plan”) (see Note 8 to our unaudited condensed consolidated financial statements included in this Quarterly Report) and a reduction in the allocation of insurance premiums to the other business segments.

Previous wording

The debt interest expense increased $3.6 million during the three months ended June 30, 2026 primarily due to a higher weighted average loan balance for the 2026 Term Loan B compared to the 2024 Term Loan B in the three months ended

Current wording

The debt interest expense increased $3.6 million during the three months ended September 30, 2026 primarily due to higher weighted average borrowings under the 2026 Term Loan B and the ABL Facility compared to the prior year period.

Previous wording

Crude Oil 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 commodity prices during the three months ended June 30, 2026 and higher production on acreage dedicated to us in the DJ Basin during the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

Current wording

Crude Oil 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 commodity prices during the six months ended September 30, 2026, compared to the prior year period and higher production on acreage dedicated to us in the DJ Basin.

Previous wording

Loss on Disposal or Impairment of Assets, Net. During the three months ended June 30, 2026, we recorded a net loss of $0.1 million primarily due to disposal or retirement of certain assets. During the three months ended June 30, 2025, we recorded a net loss of $3.9 million on the sale of assets. This amount is comprised of a loss from the sale of linefill held on third-party pipelines of $5.6 million, which includes a loss from derivatives of $1.7 million from hedging transactions relating to the sale of linefill barrels. The losses from the sale of linefill barrels are partially offset by a net gain of $1.7 million on the sale of railcars that were sold during the three months ended June 30, 2025.

Current wording

Loss on Disposal or Impairment of Assets, Net. During the six months ended September 30, 2026, we recorded a net loss of $58.3 million primarily due to the impairment of certain long-lived assets (see Note 1 to our unaudited condensed consolidated financial statements included in this Quarterly Report). During the six months ended September 30, 2025, we recorded a net loss from the sale of linefill held on third-party pipelines of $5.9 million, which includes a loss from derivatives of $1.8 million from hedging transactions relating to the sale of linefill barrels. We also recorded a loss of $0.3 million related to the retirement of certain assets. In addition, we recorded a net gain of $2.2 million from the sale of railcars during the six months ended September 30, 2025.

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 the sale of most of our wholesale propane business and 17 of our natural gas liquids terminals (“Wholesale Propane Disposition”) to a third-party in the prior year period.

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 primarily due to the Wholesale Propane Disposition.

Previous wording

Operating and General and Administrative Expenses. The increase during the three months ended June 30, 2026 compared to the three months ended June 30, 2025, was primarily due to adjustments to ad valorem taxes in the prior year due to the Wholesale Propane Disposition and foreign currency losses, partially offset by expense reductions due to the Wholesale Propane Disposition.

Current wording

Operating and General and Administrative Expenses. The increase during the six months ended September 30, 2026 compared to the six months ended September 30, 2025 was due to adjustments to ad valorem taxes in the prior year period related to the Wholesale Propane Disposition, higher utility expenses due to the new throughput contract, increased incentive compensation expense and increased foreign currency losses.

Previous wording

Gain on Disposal or Impairment of Assets, Net. During the three months ended June 30, 2026, we recorded a net gain of less than $0.1 million due to the sale of certain assets. During the three months ended June 30, 2025, we recorded a net gain of $18.2 million due to the Wholesale Propane Disposition. We also recorded a net loss of $1.6 million related to the impairment of certain right-of-use assets.

Current wording

Gain on Disposal or Impairment of Assets, Net. During the six months ended September 30, 2026, we recorded a net gain of less than $0.1 million due to the sale of certain assets. During the six months ended September 30, 2025, we recorded a net gain of $17.3 million due to the Wholesale Propane Disposition. We also recorded a net loss of $1.6 million related to the impairment of certain right-of-use assets.

Previous wording

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, income 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.

Current wording

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. Also excluded are temporary power costs, which are the incremental costs of power generation for newly constructed assets placed in-service in advance of permanent grid power infrastructure availability. In addition, severance costs are excluded as they are not considered part of the normal operations and excluding these costs enhances comparability across periods and provides a better assessment of underlying operating performance. EBITDA and Adjusted EBITDA should not be considered as alternatives to net (loss) income, (loss) income 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.

Previous wording

The following table reconciles net income to EBITDA and Adjusted EBITDA for the periods indicated:

Current wording

The following table reconciles net (loss) income to EBITDA and Adjusted EBITDA for the periods indicated:

Previous wording

(4) Amounts represent accretion expense for asset retirement obligations, expenses incurred related to legal and advisory costs associated with acquisitions and dispositions, unrealized gains and losses on investments and marketable securities and a loss from a legal dispute. In addition, the amount for the three months ended June 30, 2026 includes approximately $2.6 million of realized losses from derivatives associated with crude oil barrels reclassified as linefill as of March 31, 2026.

Current wording

(3) Amounts represent accretion expense for asset retirement obligations, expenses incurred related to legal and advisory costs associated with acquisitions and dispositions, unrealized gains and losses on investments and marketable securities and a loss from a legal dispute. For the three months and six months ended September 30, 2026, the amounts include temporary power costs and severance costs. In addition, the amount for the six months ended September 30, 2026 includes approximately $2.6 million of realized losses from derivatives associated with crude oil barrels reclassified as linefill as of March 31, 2026.

Previous wording

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

Current wording

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

Previous wording

Total commitments under the ABL Facility are $425.0 million, subject to a borrowing base, and includes a sub-limit for letters of credit of $100.0 million. At June 30, 2026, $177.0 million was outstanding under the ABL Facility, letters of credit outstanding were $49.5 million and we had a borrowing base of $417.3 million. The ABL Facility is scheduled to mature at the earliest of (a) February 2, 2029 or (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.

Current wording

Total commitments under the ABL Facility are $425.0 million, subject to a borrowing base, and includes a sub-limit for letters of credit of $100.0 million. At September 30, 2026, $249.0 million was outstanding under the ABL Facility, letters of credit outstanding were $53.9 million and we had a borrowing base of $502.8 million. The ABL Facility is scheduled to mature at the earliest of (a) February 2, 2029 or (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.

Previous wording

As of June 30, 2026, our current assets exceeded our current liabilities by approximately $92.9 million.

Current wording

As of September 30, 2026, our current assets exceeded our current liabilities by approximately $99.8 million.

Previous wording

On March 12, 2026, we entered into a new seven-year $950.0 million 2026 Term Loan B. The 2026 Term Loan B matures on March 11, 2033 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 June 30, 2026 is $947.6 million.

Current wording

On March 12, 2026, we entered into a new seven-year $950.0 million 2026 Term Loan B. The 2026 Term Loan B matures on March 11, 2033 and will amortize in equal quarterly installments in aggregate annual amounts equal to 1.0% of the original principal amount beginning with the fiscal quarter ended June 30, 2026, with the balance payable on maturity. The amount outstanding at September 30, 2026 is $945.3 million.

Previous wording

There were no acquisitions, non-cash capital expenditures or other investments during the three months ended June 30, 2026 or 2025.

Current wording

There were no acquisitions or other investments during the three months or six months ended September 30, 2026 or 2025.

Previous wording

Capital expenditures for the fiscal year ending March 31, 2027 are expected to be approximately $200 million for growth and $45 million for maintenance.

Current wording

Capital expenditures for the fiscal year ending March 31, 2027 are expected to be a range of approximately $250-$270 million for growth and $45 million for maintenance.

Previous wording

On June 17, 2026, the board of directors of our GP declared a cash distribution for the quarter ended June 30, 2026 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 $18.8 million was made on July 15, 2026 to the holders of record at the close of trading on July 1, 2026.

Current wording

On September 17, 2026, the board of directors of our GP declared a cash distribution for the quarter ended September 30, 2026 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 Class D Preferred Units (“Class D Preferred Units”). The total distribution of $18.9 million was made on October 15, 2026 to the holders of record at the close of trading on October 1, 2026.

Previous wording

Operating Activities-Continuing Operations. The increase in net cash provided by operating activities during the three months ended June 30, 2026 was due primarily to higher earnings from operations as well as fluctuations in working capital, particularly accounts receivable and accounts payable, due to higher crude oil prices and the timing of invoices and payments on construction projects.

Current wording

Operating Activities-Continuing Operations. The increase in net cash provided by operating activities during the six months ended September 30, 2026 was due primarily to higher earnings from operations (excluding non-cash items) as well as fluctuations in working capital, particularly accounts receivable and accounts payable, due to higher commodity prices and the timing of invoices and payments on construction projects as well as fluctuations in inventory due to building our natural gas liquids inventories in anticipation of the butane blending and heating seasons.