NGL Energy Partners LP

Note 1—Organization and Operations

NGL Energy Partners LP (“we,” “us,” “our,” or the “Partnership”) is a Delaware master limited partnership. NGL Energy Holdings LLC serves as our general partner (“GP”). At September 30, 2026, our operations included three segments:

•Our Water Solutions segment transports, treats, recycles and disposes of produced and flowback water generated from crude oil and natural gas production. We also sell produced water for reuse and recycle to our producer customers to be used in their crude oil exploration and production activities. As part of processing water, we aggregate and sell recovered crude oil, also known as skim oil. We also dispose of solids such as tank bottoms, drilling fluids and drilling muds and perform other ancillary services such as truck washouts. Our activities in this segment are underpinned by long-term, fixed fee contracts and acreage dedications, a significant portion of which contain minimum volume commitments with leading oil and gas companies including large, investment grade producer customers.

•Our Crude Oil Logistics segment purchases crude oil from producers and marketers and transports it to refineries or for resale at pipeline injection stations, storage terminals, barge loading facilities, rail facilities and other trade hubs, and provides storage, terminaling, and transportation services through its owned assets. Our activities in this segment are supported by certain long-term, fixed rate contracts with acreage dedications and which include minimum volume commitments on our storage tanks and owned and leased pipelines. Due to a strategic realignment of the segment’s operations to more align with long-term business objectives, an impairment charge of $58.1 million to write-down the value of certain long-lived assets was recorded as of September 30, 2026.

•Our Liquids Logistics segment conducts supply operations for natural gas liquids to commercial, retail and industrial customers across the United States and Canada. These operations are conducted through ourfive owned terminals, third-party storage and terminal facilities, access tonine common carrier pipelines and a fleet of leased railcars. We also provide services for marine exports of butane through our facility located in Chesapeake, Virginia and we also own a propane pipeline in Michigan. We attempt to reduce our exposure to price fluctuations by using back-to-back physical contracts and pre-sale agreements that allow us to lock in a margin on a percentage of our winter volumes. We also enter into financially settled derivative contracts as economic hedges of our physical inventory, physical sales and physical purchase contracts.

Note 2—Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include our accounts and those of our controlled subsidiaries. Intercompany transactions and account balances have been eliminated in consolidation. We also own an undivided interest in a crude oil pipeline, and include our proportionate share of assets, liabilities, and expenses related to this pipeline in our unaudited condensed consolidated financial statements.

Our unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim consolidated financial information in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, our unaudited condensed consolidated financial statements exclude certain information and notes required by GAAP for complete annual consolidated financial statements. However, we believe that the disclosures made are adequate to make the information presented not misleading. Our unaudited condensed consolidated financial statements include all adjustments that we consider necessary for a fair presentation of our consolidated financial position, results of operations and cash flows for the interim periods presented. Such adjustments consist only of normal recurring items, unless otherwise disclosed in this Quarterly Report on Form 10-Q. Our unaudited condensed consolidated balance sheet at March 31, 2026 was derived from our audited consolidated financial statements for the fiscal year ended March 31, 2026 included in our Annual Report on Form 10-K (“Annual Report”) filed with the SEC on May 28, 2026.

These interim unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto included in our Annual Report. Due to the seasonal nature of certain of our operations and other factors, the results of operations for interim periods are not necessarily indicative of the results of operations to be expected for future periods or for the full fiscal year ending March 31, 2027.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amount of assets and liabilities reported at the date of the consolidated financial statements and the amount of revenues and expenses reported during the periods presented.

Critical accounting estimates we make in the preparation of our unaudited condensed consolidated financial statements include, among others, determining the impairment of goodwill and long-lived assets, useful lives and recoverability of property, plant and equipment and amortizable intangible assets, the fair value of derivative instruments, estimating certain revenues, the fair value of asset retirement obligations, the fair value of assets and liabilities acquired in acquisitions, the recoverability of inventories, the collectability of accounts and notes receivable, the valuation of contingent consideration liabilities and accruals for environmental matters. Although we believe these estimates are reasonable, actual results could differ from those estimates.

Significant Accounting Policies

Our significant accounting policies are consistent with those disclosed in Note 2 of our audited consolidated financial statements included in our Annual Report.

Income Taxes

We qualify as a partnership for income tax purposes. As such, we generally do not pay federal income tax. Rather, each owner reports his or her share of our income or loss on his or her individual tax return. The aggregate difference in the basis of our net assets for financial and tax reporting purposes cannot be readily determined, as we do not have access to information regarding each partner’s basis in the Partnership.

We have a corporate subsidiary with a deferred tax liability of $28.1 million and $28.5 million at September 30, 2026 and March 31, 2026, respectively, in connection with certain of our acquisitions, which is included within other noncurrent liabilities in our unaudited condensed consolidated balance sheets. The deferred tax liability is primarily the tax effected cumulative temporary difference between the GAAP basis and tax basis of the acquired assets within the corporation. For GAAP purposes, certain of the acquired assets will be depreciated and amortized over time which will lower the GAAP basis. The deferred tax benefit recorded during the six months ended September 30, 2026 for the corporate subsidiary was $0.4 million with an effective tax rate of 21.0%. The deferred tax benefit recorded during the six months ended September 30, 2025 for the corporate subsidiary was $0.7 million with an effective tax rate of 21.0%.

We evaluate uncertain tax positions for recognition and measurement in our unaudited condensed consolidated financial statements. To recognize a tax position, we determine whether it is more likely than not that the tax position will be sustained upon examination, including resolution of any related appeals or litigation, based on the technical merits of the position. A tax position that meets the more likely than not threshold is measured to determine the amount of benefit to be recognized in our unaudited condensed consolidated financial statements. We hadno uncertain tax positions that required recognition in our unaudited condensed consolidated financial statements at September 30, 2026 or March 31, 2026.

The following table presents income tax expense (benefit) for the periods indicated:

Amounts in the table above do not include income tax expense (benefit) related to our refined products and biodiesel businesses, as these amounts have been classified within discontinued operations within our unaudited condensed consolidated statements of operations (see Note 15).

Inventories

Our inventories are valued at the lower of cost or net realizable value, with cost determined using the weighted average cost method, including the cost of transportation and storage, and with net realizable value defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. In performing this analysis, we consider fixed-price forward commitments.

Inventories consist of the following at the dates indicated:

Other Noncurrent Assets

Other noncurrent assets consist of the following at the dates indicated:

(1) Represents the noncurrent portion of costs to obtain contracts with customers. At September 30, 2026 and March 31, 2026, the costs to obtain contracts with customers was $25.0 million and $27.2 million, respectively, of which $4.1 million is recorded within prepaid expenses and other current assets in our consolidated balance sheet at September 30, 2026.

Accrued Expenses and Other Payables

Accrued expenses and other payables consist of the following at the dates indicated:

Variable Interest Entities

We decide at the inception of each arrangement whether an entity in which an investment is made or in which we have other variable interests is considered a variable interest entity (“VIE”). Generally, an entity is a VIE if: (1) the entity does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties, (2) the entity’s investors lack any characteristics of a controlling financial interest or (3) the entity was established with non-substantive voting rights.

We consolidate VIEs when we are deemed to be the primary beneficiary. The primary beneficiary of a VIE is generally the party that both: (1) has the power to make decisions that most significantly affect the economic performance of the VIE and (2) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. If we are not deemed to be the primary beneficiary of a VIE, we account for the investment or other variable interests in a VIE in accordance with applicable GAAP.

We havetwo aviation entities whereby we own a 90% interest and members of our management own a 10% interest. We executed guarantees for the benefit of the lender that obligates us for the payment and performance of the aviation entities with respect to the repayment of the loans. Since we guaranteed the payment of the outstanding loans, we have concluded that the aviation entities are VIEs because the equity is not sufficient to fund the aviation entities’ activities without additional subordinated financial support. We have the power to make decisions that most significantly affect the economic performance of the aviation entities and have benefits through our ownership interest. Therefore, we have concluded that we are the primary beneficiary and will consolidate the aviation entities in our unaudited condensed consolidated financial statements and will include the noncontrolling interests as redeemable noncontrolling interests as discussed below.

The following table summarizes the balances related to the VIEs that are consolidated in our unaudited condensed consolidated balance sheets at the dates indicated (excluding intercompany eliminations at the time of consolidation) as well as our equity in the VIEs:

Generally, the assets of the individual consolidated VIEs can be used only to settle liabilities of each respective individual consolidated VIE and the liabilities of the individual consolidated VIEs are liabilities for which creditors or beneficial interest holders do not have recourse to the general credit of the Partnership. In general, our maximum exposure to loss due to involvement with the VIEs is limited to the amount of capital investment in the VIEs, if any, or the potential obligation to perform on the guarantees of the outstanding loans.

Noncontrolling Interests

Noncontrolling interests represent the portion of certain consolidated subsidiaries that are owned by third-parties. Amounts are adjusted by the noncontrolling interest holder’s proportionate share of the subsidiaries’ earnings or losses each period and any distributions that are paid. Noncontrolling interests are reported as a component of equity, unless the noncontrolling interest is considered redeemable, in which case the noncontrolling interest is recorded between liabilities and equity (mezzanine or temporary equity) in our unaudited condensed consolidated balance sheet. The redeemable noncontrolling interest is adjusted at each balance sheet date to its maximum redemption value if the amount is greater than the carrying value. The following table summarizes changes in our redeemable noncontrolling interests in our unaudited condensed consolidated balance sheets (in thousands):

Contingent Consideration Liabilities

The following table summarizes changes in our contingent consideration liabilities (in thousands):

(1) Includes $2.2 million which is recorded within accrued expenses and other payables and $15.8 million which is recorded within other noncurrent liabilities in our March 31, 2026 consolidated balance sheet.

(2) Includes $2.2 million which is recorded within accrued expenses and other payables and $14.8 million which is recorded within other noncurrent liabilities in our September 30, 2026 unaudited condensed consolidated balance sheet.

Recent Accounting Pronouncements

In May 2026, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818), which provides recognition, measurement, presentation, and disclosure requirements for all entities that generate, purchase, or receive environmental credits or have a regulatory compliance obligation that may be settled with environmental credits. The ASU is expected to improve the (i) understandability of financial accounting and reporting information about environmental credits and environmental credit obligations associated with regulatory compliance programs and (ii) comparability of that information by reducing diversity in practice. The ASU is effective for fiscal years beginning after December 15, 2027 (which is the Partnership’s fiscal year beginning April 1, 2028), and for interim periods within those fiscal years, with early adoption permitted. The ASU should be applied retrospectively through a cumulative effect adjustment to the opening balance of retained earnings as of the beginning of the annual period of adoption. We are currently evaluating the ASU to determine its impact on our consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements for Interim Reporting, which amends ASC 270 to provide clarity on the current interim reporting requirements. The ASU improves the navigability of the required interim disclosures and clarifying when that guidance is applicable, provides additional guidance on what disclosures should be provided in interim reporting periods and adds to ASC 270 a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The ASU is effective for fiscal years beginning after December 15, 2027 (which is the Partnership’s fiscal year beginning April 1, 2028), and for interim periods within those fiscal years, with early adoption permitted. The amendments should be applied either prospectively or retrospectively to all prior periods presented in the financial statements. We are currently evaluating the ASU to determine its impact on our financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which includes amendments requiring, among other things, disclosure of disaggregated information about specific categories of expenses (purchases of inventory, employee compensation, depreciation, amortization, and depletion) included in certain expense captions on the income statement. Additionally, the amendments require disclosure of the total amount of selling expenses and an annual disclosure of the definition of selling expenses. The ASU is effective for fiscal years beginning after December 15, 2026 (which is the Partnership’s fiscal year beginning April 1, 2027), and for interim periods within fiscal years beginning after December 15, 2027 (which is the Partnership’s fiscal year beginning April 1, 2028), with early adoption permitted. The ASU may be applied either prospectively or retrospectively to all prior periods presented in the financial statements. We are currently evaluating the ASU to determine its impact on our financial statement disclosures.

Note 3—(Loss) Income Per Common Unit

The following table presents our calculation of basic and diluted weighted average common units outstanding for the periods indicated:

For the three months and six months ended September 30, 2026 and 2025, all potential common units or convertible units were considered antidilutive.

Our (loss) income per common unit is as follows for the periods indicated:

(1) Includes distributions earned and declared for the three months and six months ended September 30, 2026 and 2025 and the excess of the Class D Preferred Units (as defined herein) repurchase price over the carrying value of the units for the six months ended September 30, 2025.

(2) Net loss (income) allocated to the GP includes distributions to which it is entitled as the holder of incentive distribution rights.

Note 4—Property, Plant and Equipment

Our property, plant and equipment consists of the following at the dates indicated:

(1) Includes finance leases right-of-use assets of $15.9 million and $8.6 million at September 30, 2026 and March 31, 2026, respectively. Accumulated amortization related to these finance leases is included within accumulated depreciation.

(2) Tank bottoms, which are product volumes required for the operation of storage tanks, are recorded at historical cost. We recover tank bottoms when the storage tanks are removed from service. Linefill, which represents our portion of the product volume required for the operation of the proportionate share of a pipeline we own, is recorded at historical cost.

(3) Includes finance leases right-of-use assets of $0.5 million and $0.2 million at September 30, 2026 and March 31, 2026, respectively. Accumulated amortization related to these finance leases is included within accumulated depreciation.

The following table summarizes depreciation expense and capitalized interest expense for the periods indicated:

We record (gains) losses from the sales of property, plant and equipment and any write-downs in value due to impairment within loss (gain) on disposal or impairment of assets, net in our unaudited condensed consolidated statements of operations. The following table summarizes (gains) losses on the disposal or impairment of property, plant and equipment by segment for the period indicated:

(1) During the three months ended September 30, 2026, we recorded an impairment charge to write down the value of certain assets, as discussed further in Note 1.

Note 5—Intangible Assets

Our intangible assets consist of the following at the dates indicated:

(1) Includes debt issuance costs related to the ABL Facility (as defined herein). Debt issuance costs related to the fixed-rate notes and 2026 Term Loan B (as defined herein) are reported as a reduction of the carrying amount of long-term debt.

During the three months ended September 30, 2026, we recorded an impairment charge of $5.8 million to write down the value of certain intangible assets, as discussed further in Note 1.

Amortization expense is as follows for the periods indicated:

The following table summarizes expected amortization of our intangible assets at September 30, 2026 (in thousands):

Note 6—Long-Term Debt

Our long-term debt consists of the following at the dates indicated:

(1) Debt issuance costs related to the ABL Facility are reported within intangible assets, rather than as a reduction of the carrying amount of long-term debt. The unamortized debt issuance costs for the 2026 Term Loan B include a $4.4 million discount.

ABL Facility

Total commitments under the ABL Facility are $425.0 million and the sub-limit for letters of credit is $100.0 million. Availability under the ABL Facility is subject to a borrowing base that is determined by calculating the amount equal to the sum of our eligible cash, outstanding accounts receivable balances with investment and non-investment grade counterparties, certain inventory, including inventory on railcars and unsettled derivative contracts. These amounts are subject to certain percentage and dollar amount caps, as described within the ABL Facility. The borrowing base is calculated monthly pursuant to a borrowing base certificate we deliver to the administrative agent. Availability under the ABL Facility is based on the lower of the current borrowing base and the total commitments, less borrowings and outstanding letters of credit. 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.

The ABL Facility is secured by a lien on substantially all of our assets, including among other things, a first priority lien on our accounts receivable, inventory, pledged deposit accounts, cash and cash equivalents and related assets and a second priority lien on all of our other assets.

All borrowings under the ABL Facility bear interest at a secured overnight financing rate (“SOFR”) or the alternate base rate, in each case plus an applicable margin that is determined by reference to our fixed charge coverage ratio. The applicable margin for alternate base rate loans varies from 1.00% to 1.50% and the applicable margin for SOFR varies from 2.00% to 2.50%. In addition, the ABL Facility includes a commitment fee that is charged and payable quarterly in arrears based on the average daily unused portion of the revolving commitments under the ABL Facility. Such commitment fee is 0.25% per year. In the event our fixed charge coverage ratio is less than 1.75 to 1.00, our commitment fee will be increased to 0.375%.

At September 30, 2026, the borrowings under the ABL Facility had a weighted average interest rate of 6.46% calculated as a SOFR rate of 3.84% plus a margin of 2.50% for SOFR borrowings and the prime rate of 7.00% plus a margin of 1.50% on the alternate base borrowings. On September 30, 2026, the interest rate in effect on letters of credit was 2.50%.

The ABL Facility contains various affirmative and negative covenants, including financial reporting requirements and limitations on indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of assets, distributions and other restricted payments, investments (including acquisitions) and transactions with affiliates. The ABL Facility contains, as the only financial covenant, a fixed charge coverage ratio that is tested based on the financial statements for the most recently ended fiscal quarter upon the occurrence and during the continuation of a Cash Dominion Event (as defined in the ABL Facility). At September 30, 2026, no Cash Dominion Event had occurred.

On October 13, 2026, we exercised $50.0 million of the accordion feature of our ABL Facility, raising commitments to $475.0 million.

At September 30, 2026, we were in compliance with the covenants under the ABL Facility.

2026 Term Loan B

The 2026 Term Loan B was issued at 99.50% of par for gross proceeds of $945.3 million. The 2026 Term Loan B was issued pursuant to a credit agreement dated March 12, 2026 (“2026 Term Loan Credit Agreement”).

The 2026 Term Loan B bears interest at either a SOFR-based rate or an alternate base rate, plus an applicable margin determined by our consolidated first lien net leverage ratio (as defined in the 2026 Term Loan Credit Agreement). On September 16, 2026, we amended the facility to lower the applicable margins. The amendment reduced the margin on alternate base rate loans to a range of 1.75% to 2.0% from 2.25% to 2.50%, and reduced the margin on SOFR-based loans to a range of 2.75% to 3.00% from 3.25% to 3.50%.

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.

At September 30, 2026, the borrowings under the 2026 Term Loan B had an interest rate of SOFR of 3.89% plus a margin of 3.00%.

The 2026 Term Loan B is secured by first priority liens on substantially all of our assets other than our accounts receivable, inventory, pledged deposit accounts, cash and cash equivalents, renewable energy tax credits and related assets and second priority liens on our accounts receivable, inventory, pledged deposit accounts, cash and cash equivalents and related assets.

The 2026 Term Loan Credit Agreement contains various affirmative and negative covenants, including financial reporting requirements and limitations on indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of assets, distributions and other restricted payments, investments (including acquisitions) and transactions with affiliates. The 2026 Term Loan Credit Agreement requires that we maintain, on a quarterly basis, beginning with the quarter ended June 30, 2026, a debt service coverage ratio (as defined in the 2026 Term Loan Credit Agreement) of no less than 1.1 to 1.0. At September 30, 2026, our debt service coverage ratio was approximately 2.76 to 1.0.

The 2026 Term Loan Credit Agreement contains other customary terms, events of default and covenants.

At September 30, 2026, we were in compliance with the covenants under the 2026 Term Loan B.

Senior Secured Notes

The 2029 Senior Secured Notes bear interest at 8.125% and the 2032 Senior Secured Notes bear interest at 8.375%. Interest is payable on February 15, May 15, August 15 and November 15 of each year, beginning on May 15, 2024. The 2029 Senior Secured Notes mature on February 15, 2029 and the 2032 Senior Secured Notes mature on February 15, 2032.

The 2029 Senior Secured Notes and 2032 Senior Secured Notes were issued pursuant to an indenture dated February 2, 2024 (“Indenture”). The 2029 Senior Secured Notes and 2032 Senior Secured Notes are secured by first priority liens on substantially all of our assets other than our accounts receivable, inventory, pledged deposit accounts, cash and cash equivalents and related assets and second priority liens on our accounts receivable, inventory, pledged deposit accounts, cash and cash equivalents and related assets.

The Indenture contains covenants that, among other things, limit our ability to: pay distributions or make other restricted payments or repurchase stock; incur or guarantee additional indebtedness or issue disqualified stock or certain preferred stock; make certain investments; create or incur liens; sell assets; enter into restrictions affecting the ability of restricted subsidiaries to make distributions, make loans or advances or transfer assets to the guarantors (including the Partnership); enter into certain transactions with our affiliates; designate restricted subsidiaries as unrestricted subsidiaries; and consolidate, merge or transfer or sell all or substantially all of our assets. These covenants are subject to a number of important exceptions and qualifications.

We have the option to redeem all or part of the 2029 Senior Secured Notes, at any time on or after February 15, 2026 at the redemption prices specified in the Indenture. We have the option to redeem all or part of the 2032 Senior Secured Notes, at any time on or after February 15, 2027 at the redemption prices specified in the Indenture.

The Indenture contains other customary terms, events of default and covenants.

At September 30, 2026, we were in compliance with the covenants under the Indenture.

Other Long-Term Debt

On June 24, 2024, we entered into an equipment loan for $6.4 million with American Bank and Trust Company which bears interest at a rate of 8.50% and is secured by an airplane. On September 24, 2024, we refinanced the loan and lowered the interest rate to 8.00%. We have an aggregate principal balance of $4.3 million at September 30, 2026. This loan matures on June 24, 2030.

On October 1, 2024, we entered into a second equipment loan for $6.4 million with American Bank and Trust Company which bears interest at a rate of 8.00% and is secured by an airplane. We have an aggregate principal balance of $4.6 million at September 30, 2026. This loan matures on September 24, 2030.

Debt Maturity Schedule

The scheduled maturities of our long-term debt are as follows at September 30, 2026:

Amortization of Debt Issuance Costs

Amortization expense for debt issuance costs related to long-term debt was $2.0 million and $2.0 million during the three months ended September 30, 2026 and 2025, respectively, and $3.9 million and $4.0 million during the six months ended September 30, 2026 and 2025, respectively.

The following table summarizes expected amortization of debt issuance costs at September 30, 2026 (in thousands):

Note 7—Commitments and Contingencies

Legal Contingencies

On July 29, 2026, TOG Operating, LLC and Titus Oil & Gas III, LLC (“Titus”) filed a lawsuit against the Partnership and two of its subsidiaries, NGL Water Solutions Permian, LLC, and NGL Water Solutions, LLC, in the District Court of Reeves County, Texas (“Reeves County Matter”) alleging that the Partnership flooded out Titus’s mineral estate through our saltwater disposal operations. Titus has asserted claims for trespass, negligence (including negligence per se and gross negligence), statutory waste, nuisance, declaratory judgment, and unjust enrichment. Titus is seeking an unspecified amount of economic damages along with exemplary damages and injunctive relief. Concurrently, Titus filed a complaint with the Railroad Commission of Texas asking that the Railroad Commission of Texas terminate or suspend injection well permits for certain of our wells located in Reeves County, Texas (“RRC Matter”). At this time, no discovery has been conducted in either matter. Accordingly, we are unable at this time to predict the outcome of these matters or to reasonably estimate the possible loss or range of loss, if any, that may result, and no accrual has been made. The Partnership denies the allegations in the Reeves County Matter and the RRC Matter and intends to vigorously contest and defend both matters.

We are party to various other claims, legal actions, and complaints arising in the ordinary course of business. In the opinion of our management, the ultimate resolution of these claims, legal actions, and complaints, after consideration of amounts accrued, insurance coverage, and other arrangements, is not expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows. However, the outcome of such matters is inherently uncertain, and estimates of our liabilities may change materially as circumstances develop.

Environmental Matters

At September 30, 2026, we have an environmental liability, measured on an undiscounted basis, of $1.2 million, which is recorded within accrued expenses and other payables in our unaudited condensed consolidated balance sheet. Our operations are subject to extensive federal, state, and local environmental laws and regulations. Although we believe our operations are in substantial compliance with applicable environmental laws and regulations, risks of additional costs and liabilities are inherent in our business, and there can be no assurance that we will not incur significant costs. Moreover, it is possible that other developments, such as increasingly stringent environmental laws, regulations and enforcement policies thereunder, and claims for damages to property or persons resulting from the operations, could result in substantial costs. Accordingly, we have adopted policies, practices, and procedures in the areas of pollution control, product safety, occupational health, and the handling, storage, use, and disposal of hazardous materials designed to prevent material environmental or other damage, and to limit the financial liability that could result from such events. However, some risk of environmental or other damage is inherent in our businesses.

Asset Retirement Obligations

We have contractual and regulatory obligations at certain facilities for which we have to perform remediation, dismantlement or removal activities when the assets are retired. Our liability for asset retirement obligations is discounted to present value. To calculate the liability, we make estimates and assumptions about the retirement cost and the timing of retirement. Changes in our assumptions and estimates may occur as a result of the passage of time and the occurrence of future events.

The following table summarizes changes in our asset retirement obligations, which is reported within other noncurrent liabilities in our unaudited condensed consolidated balance sheets (in thousands):

(1) Relates to the sale of a certain freshwater well within our Water Solutions segment.

In addition to the obligations described above, we may be obligated to remove facilities or perform other remediation upon retirement of certain other assets. However, the fair value of the asset retirement obligation cannot currently be reasonably estimated because the settlement dates are indeterminable. We will record an asset retirement obligation for these assets in the periods in which settlement dates are reasonably determinable.

Sales and Purchase Contracts

We have entered into product sales and purchase contracts for which we expect the parties to physically settle and deliver the inventory in future periods.

At September 30, 2026, we had the following commodity purchase commitments:

(1) Our crude oil index-price purchase commitments exceed our crude oil index-price sales commitments (presented below) due primarily to our long-term purchase commitments for crude oil that we purchase and ship on the Grand Mesa Pipeline.

At September 30, 2026, we had the following commodity sale commitments:

We account for the contracts shown in the tables above using the normal purchase and normal sale election. Under this accounting policy election, we do not record the physical contracts at fair value at each balance sheet date; instead, we record the purchase or sale at the contracted value once the delivery occurs. Contracts in the tables above may have offsetting derivative contracts (described in Note 9) or inventory positions (described in Note 2).

Other Commitments

We have noncancelable agreements for product storage, railcar spurs, capital projects and real estate. The following table summarizes future minimum payments under these agreements at September 30, 2026 (in thousands):

Note 8—Equity

Partnership Equity

The Partnership’s equity consists of a 0.1% GP interest and a 99.9% limited partner interest, which consists of common units. Our GP has the right, but not the obligation, to contribute a proportionate amount of capital to the Partnership to maintain its 0.1% GP interest. Our GP is not required to guarantee or pay any of our debts or obligations. At September 30, 2026, we owned 11.66% of our GP.

General Partner Equity

In connection with the issuance of common units for the vesting of restricted units during the three months ended June 30, 2026, we issued 1,001 notional units to our GP for less than $0.1 million in order to maintain its 0.1% interest in the Partnership. During the three months ended September 30, 2026, we did not issue any notional units to our GP.

Common Unit Repurchase Program

On April 8, 2026, the board of directors of our GP authorized a common unit repurchase program, under which we may repurchase up to $100.0 million of our outstanding common units from time to time in the open market, including pursuant to a repurchase plan administrated in accordance with Rule 10b5-1 under the Exchange Act, or in other privately negotiated transactions. This program does not have a fixed expiration date. The common unit repurchase program authorization does not obligate us to repurchase any dollar amount or number of common units. We did not repurchase any units under this program during the three months ended September 30, 2026.

Class B Preferred Units

As of September 30, 2026, there were 12,585,642 of our Class B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units (“Class B Preferred Units”) outstanding.

The current distribution rate for the Class B Preferred Units is thethree-month CME Term SOFR interest rate, which is calculated and published by CME Group Benchmark Administration, Ltd., plus a spread of 7.213%. The Class B Preferred Units also have an additional tenor spread adjustment of 0.26161%, in accordance with the Adjustable Interest Rate (LIBOR) Act.

The following table summarizes the distributions declared on our Class B Preferred Units during the last three quarters:

Class C Preferred Units

As of September 30, 2026, there were 1,800,000 of our Class C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units (“Class C Preferred Units”) outstanding.

The current distribution rate for the Class C Preferred Units is thethree-month CME Term SOFR interest rate plus a spread of 7.384%.

The following table summarizes the distributions declared on our Class C Preferred Units during the last three quarters:

Class D Preferred Units

As of September 30, 2026, there were 315,489 preferred units (“Class D Preferred Units”) and warrants exercisable to purchase an aggregate of 2,125,000 common units outstanding.

The following table summarizes the outstanding warrants at September 30, 2026:

All outstanding warrants are currently exercisable and any unexercised warrants will expire on the tenth anniversary of the date of issuance. The warrants will not participate in cash distributions.

The holders of our Class D Preferred Units have elected, which they are allowed to do so from time to time, for the distributions to be calculated based on the three-month CME Term SOFR interest rate in accordance with our Partnership Agreement plus a spread of 7.00%. The distribution rate for the Class D Preferred Units is 10.734% for the quarter ended September 30, 2026.

The following table summarizes the distributions declared on our Class D Preferred Units during the last three quarters:

Equity-Based Incentive Compensation

On December 9, 2025, the board of directors of our GP approved the 2025 Long-Term Incentive Plan (“2025 Plan”), and unitholder approval was received on February 9, 2026. Our GP has granted certain restricted units to employees, which vest in tranches, subject to the continued service of the recipients through the vesting date (“Service Awards”).

The following table summarizes the Service Award activity during the six months ended September 30, 2026:

The following table summarizes the scheduled vesting of our unvested Service Awards at September 30, 2026:

Service Awards are valued at the average of the high/low sales prices as of the grant date. We record the expense for each Service Award on a straight-line basis over the requisite period for the entire award (that is, over the requisite service period of the last separately vesting portion of the award), ensuring that the amount of compensation cost recognized at any date at least equals the portion of the grant-date value of the award that is vested at that date. Forfeitures of Service Awards are accounted for when they occur.

During the three months and six months ended September 30, 2026, we recorded compensation expense related to Service Awards of $4.2 million and $6.2 million, respectively.

The following table summarizes the estimated future expense we expect to record on the unvested Service Awards at September 30, 2026 (in thousands):

As of September 30, 2026, there are approximately 6.5 million units remaining available for issuance under the 2025 Plan.

Note 9—Fair Value of Financial Instruments

The carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and other current assets and liabilities (excluding derivative instruments) approximate fair value because of the short-term nature of these instruments. Therefore, these assets and liabilities are not presented in the following table.

Derivatives

The following table summarizes, by level within the fair value hierarchy, the estimated fair values of our derivative assets and liabilities reported in our unaudited condensed consolidated balance sheets at the dates indicated:

(1) Relates to commodity derivative assets and liabilities that are expected to be net settled on an exchange or through a master netting arrangement with the counterparty. Our physical contracts that do not qualify as normal purchase normal sale transactions are not subject to such master netting arrangements.

The following table summarizes the accounts that include our derivative assets and liabilities in our unaudited condensed consolidated balance sheets at the dates indicated:

The following table summarizes our open derivative contract positions at the dates indicated. We do not account for these derivatives as hedges.

(1) We may have fixed price physical purchases, including inventory, offset by floating price physical sales or floating price physical purchases offset by fixed price physical sales. These contracts are derivatives we have entered into as an economic hedge against the risk of mismatches between fixed and floating price physical obligations.

(2) See further discussion of these instruments in “Interest Rate Risk” below.

During the three months ended September 30, 2026 and 2025, we recorded net losses of $46.6 million and net gains of $1.1 million, respectively, from our commodity derivatives to cost of sales-product in our unaudited condensed consolidated statements of operations. During the six months ended September 30, 2026 and 2025, we recorded net losses of $26.6 million and net gains of $10.6 million, respectively, from our commodity derivatives to cost of sales-product in our unaudited condensed consolidated statements of operations. These amounts do not include net gains and losses from our commodity derivatives related to our refined products and biodiesel businesses, as these amounts have been classified within discontinued operations within our unaudited condensed consolidated statement of operations for the six months ended September 30, 2025 (see Note 15).

During the three months ended September 30, 2026 and 2025, we recorded net gains of $1.8 million and $0.3 million, respectively, from our interest rate swaps to interest expense in our unaudited condensed consolidated statements of operations. During the six months ended September 30, 2026 and 2025, we recorded net gains of $3.4 million and net losses of $0.3 million from our interest rate swaps to interest expense in our unaudited condensed consolidated statements of operations.

Credit Risk

We have credit policies that we believe minimize our overall credit risk, including an evaluation of potential counterparties’ financial condition (including credit ratings), collateral requirements under certain circumstances, and the use of industry standard master netting agreements, which allow for offsetting counterparty receivable and payable balances for certain transactions. At September 30, 2026, our primary counterparties were retailers, resellers, energy marketers, producers, refiners, and dealers. This concentration of counterparties may impact our overall exposure to credit risk, either positively or negatively, as the counterparties may be similarly affected by changes in economic, regulatory or other conditions. If a counterparty does not perform on a contract, we may not realize amounts that have been recorded in our unaudited condensed consolidated balance sheets and recognized in our net income.

Interest Rate Risk

Long-Term Debt

The ABL Facility is variable-rate debt with interest rates that are generally indexed to the prime rate or SOFR plus an applicable margin (see Note 6 for the current rates on the ABL Facility).

The 2026 Term Loan B is variable-rate debt with interest rates that are generally indexed to SOFR plus an applicable margin (see Note 6 for the current rates on the 2026 Term Loan B).

Interest Rate Swaps

In March and April 2024, we entered intotwo $200.0 million interest rate swaps to reduce the variability of cash outflows associated with our floating-rate, SOFR-based instruments. One of the interest rate swaps expired in April 2026. For the other interest rate swap, we pay a fixed interest rate of 3.842% in exchange for SOFR-based variable interest through April 2028.

Preferred Unit Distributions

The current distribution rate for the Class B, Class C and Class D Preferred Units is the three-month CME Term SOFR plus a fixed spread(see Note 8 for the current distribution rates).

Fair Value of Fixed-Rate Notes

The following table provides fair value estimates of our fixed-rate notes at September 30, 2026 (in thousands):

For the 2029 Senior Secured Notes and 2032 Senior Secured Notes, the fair value estimates were developed based on publicly traded quotes and would be classified as Level 2 in the fair value hierarchy.

Note 10—Segments

Our operations are organized into three reportable segments: (i) Water Solutions, (ii) Crude Oil Logistics and (iii) Liquids Logistics. These segments have been identified based on the differing products and services, regulatory environment and the expertise required for these operations. Our Liquids Logistics reportable segment includes operating segments that have been aggregated based on the nature of the products and services provided. Our chief operating decision maker (“CODM”) is our chief executive officer. Adjusted EBITDA is reviewed by the CODM to evaluate performance and make business decisions. We define Adjusted EBITDA for Water Solutions as revenue minus operating and general and administrative expense, which excludes accretion expense for asset retirement obligations (“Accretion Expense”) and legal and advisory costs associated with acquisitions and dispositions (“Acquisition Expense”), incremental costs to power newly constructed assets prior to grid power availability (“Temporary Power Costs”), and plus or minus other reconciling items. We define Adjusted EBITDA for Crude Oil Logistics and Liquids Logistics as revenue minus cost of sales, which excludes unrealized gains and losses on derivatives, lower of cost or net realizable value adjustments and plus or minus other reconciling segment items. The calculation of Adjusted EBITDA for ourthree reportable segments is presented in the Reportable Segment Information tables below.

See Note 1 for a discussion of the products and services of our reportable segments. The remainder of our business operations is presented as “Corporate and Other” and consists of certain corporate expenses that are not allocated to the reportable segments and the amounts to eliminate intercompany or intersegment transactions. Intercompany or intersegment transactions are recorded based on prices negotiated between the segments. Intrasegment transactions eliminations are recorded within each reportable segment. None of the tables below include amounts related to our refined products and biodiesel businesses, as those amounts have been classified as discontinued operations within our unaudited condensed consolidated statements of operations for all periods presented (see Note 15).

Disaggregation of Revenue

The following table summarizes revenues related to our segments for the periods indicated:

(1) During the three months ended September 30, 2026 and 2025, our Liquids Logistics revenues included $22.9 million and $21.0 million of non-US revenues, respectively, and during the six months ended September 30, 2026 and 2025, our Liquids Logistics revenues included $44.5 million and $36.0 million of non-US revenues, respectively.

Reportable Segment Information

The following tables set forth certain selected financial information for our segments for the periods indicated:

(1) Amount excludes net unrealized gains and losses on derivatives, lower of cost or net realizable value adjustments, and amortization expense for certain intangible assets.

(2) Amount excludes Accretion Expense, Acquisition Expense, Temporary Power Costs and severance expense.

(3) Amount includes interest income and certain other non-operating income and expense items less Adjusted EBITDA related to our noncontrolling interests.

(4) Amount includes the net of Adjusted EBITDA related to our noncontrolling interests, unrealized gains and losses on investments and marketable securities and certain other non-operating income and expense items.

(5) Total domestic loss from continuing operations before income taxes for the quarter ended September 30, 2026 was $42.7 million and total non-US income from continuing operations before income taxes for the quarter ended September 30, 2026 was $0.3 million.

(7) Information is presented as of September 30, 2026.

(8) Total assets includes $19.1 million of non-US total assets.

(1) Amount excludes net unrealized gains and losses on derivatives and lower of cost or net realizable value adjustments.

(2) Amount excludes Accretion Expense and Acquisition Expense.

(3) Amount includes Adjusted EBITDA related to our unconsolidated entities, interest income and certain other non-operating income and expense items less Adjusted EBITDA related to our noncontrolling interests.

(4) Amount includes the net of Adjusted EBITDA related to our noncontrolling interests, unrealized gains and losses on investments and marketable securities and certain other non-operating income and expense items.

(5) Total domestic income from continuing operations before income taxes for the quarter ended September 30, 2025 was $29.1 million and total non-US income from continuing operations before income taxes for the quarter ended September 30, 2025 was $0.7 million.

(7) Information is presented as of September 30, 2025.

(8) Total assets includes $21.4 million of non-US total assets.

(1) Amount excludes net unrealized gains and losses on derivatives, lower of cost or net realizable value adjustments, and amortization expense for certain intangible assets. For Crude Oil Logistics, the amount also excludes $2.6 million of realized losses from derivatives associated with crude oil barrels reclassified as linefill as of March 31, 2026.

(2) Amount excludes Accretion Expense, Acquisition Expense, Temporary Power Costs and severance expense.

(3) Amount includes interest income and certain other non-operating income and expense items less Adjusted EBITDA related to our noncontrolling interests.

(4) Amount includes the net of Adjusted EBITDA related to our noncontrolling interests, unrealized gains and losses on investments and marketable securities and certain other non-operating income and expense items.

(5) Total domestic income from continuing operations before income taxes for the six months ended September 30, 2026 was $36.0 million and the total non-US income from continuing operations before income taxes for the six months ended September 30, 2026 was $1.3 million.

(1) Amount excludes net unrealized gains and losses on derivatives and lower of cost or net realizable value adjustments.

(2) Amount excludes Accretion Expense and Acquisition Expense.

(3) Amount includes Adjusted EBITDA related to our unconsolidated entities, interest income and certain other non-operating income and expense items less Adjusted EBITDA related to our noncontrolling interests.

(4) Amount represents the sum of the amount excluded from our equity in earnings of unconsolidated entities, including, depreciation and amortization, interest expense, and gains and losses on disposal or impairment of assets.

(5) Amount includes the net of Adjusted EBITDA related to our noncontrolling interests, unrealized gains and losses on investments and marketable securities and certain other non-operating income and expense items.

(6) Total domestic income from continuing operations before income taxes for the six months ended September 30, 2025 was $58.7 million and total non-US income from continuing operations before income taxes for the six months ended September 30, 2025 was $1.1 million.

(7) Amount includes additions to property, plant and equipment and intangible assets, including the acquisition of assets.

Note 11—Transactions with Affiliates

The following table summarizes our related party transactions for the periods indicated:

Affiliate balances consist of the following at the dates indicated:

Other Related Party Transactions

Acquisition of Interest in NGL Energy Holdings LLC

During the three months ended June 30, 2026, we purchased, intwo transactions, a 1.64% interest in our GP for $1.8 million in cash and accounted for this as a deduction within limited partners’ equity in our unaudited condensed consolidated balance sheet.

During the three months ended September 30, 2026, we purchased, in a single transaction, a 1.33% interest in our GP for $1.5 million in cash and accounted for this as a deduction within limited partners’ equity in our unaudited condensed consolidated balance sheet.

Note 12—Revenue from Contracts with Customers

We recognize revenue for services and products under revenue contracts as our obligations to either perform services or deliver or sell products under the contracts are satisfied. Our revenue contracts in scope under ASC 606 primarily have a single performance obligation and we do not receive material amounts of non-cash consideration.

The majority of our revenue agreements are in scope under ASC 606 and the remainder of our revenue comes from contracts that contain nonmonetary exchanges or leases in the scope of ASC 845 and ASC 842, respectively. See Note 10 for a detail of disaggregated revenue.

Remaining Performance Obligations

Most of our service contracts are such that we have the right to consideration from a customer in an amount that corresponds directly with the value to the customer of our performance completed to date. Therefore, we utilized the practical expedient in ASC 606-10-55-18 under which we recognize revenue in the amount to which we have the right to invoice. Applying this practical expedient, we are not required to disclose the transaction price allocated to remaining performance obligations under these contracts. The following table summarizes the amount and timing of revenue recognition for such contracts at September 30, 2026 (in thousands):

Contract Assets and Liabilities

The following tables summarize the balances of our contract assets and liabilities at the dates indicated:

Costs to Obtain Contracts with Customers

Capitalized costs to obtain contracts with customers was $25.0 million and $27.2 million at September 30, 2026 and March 31, 2026, respectively, and are included within prepaid expenses and other current assets and other noncurrent assets in our unaudited condensed consolidated balance sheets. During the three months and six months ended September 30, 2026, $1.1 million and $2.2 million, respectively, of amortization expense related to these costs were recorded within operating expense in our unaudited condensed consolidated statements of operations.

Note 13—Leases

Lessee Accounting

Our leasing activity primarily includes product storage, office space, real estate, railcars, vehicles and equipment.

The following table summarizes the components of our lease cost for the periods indicated:

(1) Included in operating expenses in our unaudited condensed consolidated statements of operations.

(2) Included in depreciation and amortization expense in our unaudited condensed consolidated statements of operations.

(3) Included in interest expense in our unaudited condensed consolidated statements of operations.

During the three months ended September 30, 2026, we recorded an impairment charge of $1.1 million to write down the value of certain right-of-use assets, as discussed further in Note 1.

The following table summarizes maturities of our lease obligations at September 30, 2026 (in thousands):

(1) At September 30, 2026, the short-term finance lease obligation of $5.2 million is included in accrued expenses and other payables and the long-term finance lease obligation of $7.9 million is included in other noncurrent liabilities in our unaudited condensed consolidated balance sheet.

The following table summarizes supplemental cash flow information related to our leases for the periods indicated:

Lessor Accounting and Subleases

Our lessor arrangements include storage, railcar, office space and surface contracts. We also, from time to time, sublease certain of our storage capacity and railcars to third-parties. Fixed rental revenue is recognized on a straight-line basis over the lease term. During the three months ended September 30, 2026 and 2025, fixed rental revenue was $3.1 million and $3.3 million, respectively, which includes $1.0 million and $1.1 million of sublease revenue, respectively. During the six months ended September 30, 2026 and 2025, fixed rental revenue was $6.4 million and $6.3 million, including $2.1 million and $1.9 million of sublease revenue, respectively.

The following table summarizes future minimum lease payments to be received under various noncancelable operating lease agreements at September 30, 2026 (in thousands):

Note 14—Allowance for Current Expected Credit Losses

ASU 2016-13 requires that an allowance for expected credit losses be recognized for certain financial assets that reflects the current expected credit loss over the financial asset’s contractual life. The valuation allowance considers the risk of loss, even if remote, and considers past events, current conditions and reasonable and supportable forecasts. We adopted the practical expedient under ASU 2025-05 that allows us to assume that the current conditions as of the balance sheet date do not change for the remaining life of our current accounts receivable and contract assets.

We are exposed to credit losses primarily through the sale of products and services and notes receivable from third-parties. A counterparty’s ability to pay is assessed through a credit process that considers the payment terms, the counterparty’s established credit rating or our assessment of the counterparty’s credit worthiness and other risks. We can require prepayment or collateral to mitigate credit risks.

We group our financial assets into pools of counterparties with similar risk characteristics for the purpose of determining the allowance for expected credit losses. Each reporting period, we assess whether a significant change in the risk of expected credit loss has occurred. Among the quantitative and qualitative factors considered in calculating our allowance for expected credit losses are historical financial data, including write-offs and allowances, current conditions, industry risk and current credit ratings. Financial assets will be written off in whole, or in part, when practical recovery efforts have been exhausted and no reasonable expectation of recovery exists. Subsequent recoveries of amounts previously written off are recorded as an increase to the allowance for expected credit losses. We manage receivable pools using past due balances as a key credit quality indicator.

The following table summarizes changes in our allowance for expected credit losses for the period indicated:

Note 15—Discontinued Operations

As previously reported, we met the criteria for classifying the operations of our refined products business and biodiesel business as discontinued. The following table summarizes the results of operations from discontinued operations related to these businesses for the periods indicated:

(1) Negative amounts for the three months and six months ended September 30, 2026 relate to the reversal of a previously recognized bad debt allowance.

(2) Negative amounts for the three months ended September 30, 2025 relate to prior period adjustments.