NGL Energy Partners LP Announces Fourth Quarter and Full Year Fiscal 2024 Financial Results; Guidance for Fiscal 2025

TULSA, Okla.--(BUSINESS WIRE)--NGL Energy Partners LP (NYSE:NGL) (“NGL,” ““we,” “us,” “our,” or the “Partnership”) today reported its fourth quarter and full year fiscal 2024 results.

Highlights for the fiscal year and quarter ended March 31, 2024 include:

• A net loss for full year Fiscal 2024 of $143.1 million, compared to net income of $52.5 million for full year Fiscal 2023; a net loss for the fourth quarter of Fiscal 2024 of $236.7 million, compared to a net loss of $33.2 million for the fourth quarter of Fiscal 2023. The fourth quarter of Fiscal 2024 includes a loss from the impairment of goodwill, an adverse litigation judgment and call premiums and other costs related to our refinancing.

• Adjusted EBITDA⁽¹⁾ for full year Fiscal 2024 of $610.1 million, compared to $632.7 million for full year Fiscal 2023; Adjusted EBITDA⁽¹⁾ for the fourth quarter of Fiscal 2024 of $147.5 million, compared to $173.3 million for the fourth quarter of Fiscal 2023

• Record Water Solutions’ Adjusted EBITDA⁽¹⁾ of $508.3 million for full year Fiscal 2024, a 10% increase over the prior year

• Record Water Solutions’ annual water disposal volumes processed of 884.6 million for full year Fiscal 2024, a 4.1% increase over the prior year

• On January 22, 2024, we announced that our Water Solutions business is commencing expansion of its Lea County Express Pipeline System from a capacity of 140,000 barrels of water per day to 340,000 barrels per day in 2024, with the ability to expand the capacity to 500,000 barrels of water per day. This project is fully underwritten by a recently executed minimum volume commitment contract that includes an acreage dedication extension with an investment grade oil and gas producer. We expect the pipeline expansion to be completed during the second half of our 2025 fiscal year.

• 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, which includes $900.0 million of 8.125% senior secured notes due 2029 and $1.3 billion of 8.375% senior secured notes due 2032. We also entered into a new seven-year $700.0 million senior secured term loan “B” credit facility. The net proceeds from these transactions were used to fund the redemption of the 2026 senior secured notes and the 2025 and 2026 senior unsecured notes.

• On February 6, 2024, the board of directors of our general partner declared a cash distribution of 50% of the outstanding arrearages through December 31, 2023 to the holders of the Class B preferred units, the Class C preferred units and the Class D preferred units. The total distribution of $178.3 million was made on February 27, 2024 to the holders of record at the close of trading on February 16, 2024.

Highlights for the period subsequent to March 31, 2024 included:

• On April 4, 2024, the board of directors of our general partner declared a cash distribution of 55.4% of the outstanding distribution arrearages through the quarter ended March 31, 2024 to the holders of the Class B preferred units, the Class C preferred units and the Class D preferred units. The total distribution of $120.0 million was made on April 18, 2024 to the holders of record at the close of trading on April 12, 2024.

• On April 5, 2024, we closed on the sale of two ranches located in Eddy and Lea Counties, New Mexico for total consideration of $69.3 million, including working capital.

• On April 9, 2024, the board of directors of our general partner declared a cash distribution to fully pay the remaining distribution arrearages to the holders of the Class B preferred units, the Class C preferred units and the Class D preferred units. The total distribution of $98.1 million was made on April 25, 2024 to the holders of record at the close of trading on April 19, 2024.

• During April and May 2024, we closed on the sale of certain saltwater disposal assets in the Delaware Basin and certain real estate located in Lea County, New Mexico for total consideration of approximately $12.2 million.

• On June 5, 2024, the board of directors of our GP authorized a common unit repurchase program, under which we may repurchase up to $50.0 million of our outstanding common units from time to time in the open market or in other privately negotiated transactions. This program does not have a fixed expiration date.

“The Partnership ended Fiscal 2024, with Adjusted EBITDA⁽¹⁾ exceeding $610 million. Water Solutions achieved record annual water disposal volumes processed and Adjusted EBITDA⁽¹⁾, the Partnership executed a global refinancing, and sold non-core assets at attractive multiples. Fiscal 2025 holds more opportunities for growth projects with attractive returns, and continued reduction of our total leverage at fiscal 2025 year-end. NGL made two arrearage catch-up payments in Fiscal 2025, and became current on all preferred classes B, C and D’s in April,” stated Mike Krimbill, NGL’s CEO. “We are guiding Fiscal 2025 Water Solutions Adjusted EBITDA⁽¹⁾ to a range of $550 - $560 million and full year consolidated Adjusted EBITDA⁽¹⁾ of $665 million. Also, we are guiding to $210 million in total maintenance and growth capital expenditures for Fiscal 2025,” Krimbill concluded.

________________________________

^(1) See the “Non-GAAP Financial Measures” section of this release for the definition of Adjusted EBITDA (as used herein) and a discussion of this non-GAAP financial measure.

Quarterly Results of Operations

The following table summarizes operating income (loss) and Adjusted EBITDA⁽¹⁾ by reportable segment for the periods indicated:

	Quarter Ended
	March 31, 2024						March 31, 2023
	Operating Income (Loss)			Adjusted EBITDA^(1)			Operating Income (Loss)			Adjusted EBITDA^(1)
	(in thousands)
Water Solutions	$	28,537		$	123,440		$	38,470		$	131,558
Crude Oil Logistics		3,279			15,339			(5,488	)		29,715
Liquids Logistics		(51,376	)		21,817			17,818			28,469
Corporate and Other		(62,707	)		(13,054	)		(20,340	)		(16,441	)
Total	$	(82,267	)	$	147,542		$	30,460		$	173,301

Water Solutions

Operating income for the Water Solutions segment decreased by $9.9 million for the quarter ended March 31, 2024, compared to the quarter ended March 31, 2023. The Partnership processed approximately 2.39 million barrels of water per day during the quarter ended March 31, 2024, a 3.0% decrease when compared to approximately 2.46 million barrels of water per day processed during the quarter ended March 31, 2023. The decrease in produced water volumes processed was primarily due to certain producers in the Delaware Basin reusing their water in their operations. Service fees for produced water processed ($/barrel) were lower during the quarter due to rate changes for certain existing contracts and the expiration of certain higher fee per barrel contracts which were replaced with lower fee per barrel contracts with an extended term. In addition, there was a decrease in payments made by certain producers for committed volumes not delivered which also impacted service fees for produced water processed ($/barrel).

Revenues from recovered skim oil, including the impact from realized skim oil hedges, totaled $28.5 million for the quarter ended March 31, 2024, an increase of $4.0 million from the prior year period. The increase was due primarily to an increase in skim oil barrels sold as a result of 34,380 barrels of skim oil that were stored as of March 31, 2023 due to tighter pipeline specifications and higher realized crude oil prices received from the sale of skim oil barrels.

Operating expenses in the Water Solutions segment decreased $4.5 million for the quarter ended March 31, 2024, compared to the quarter ended March 31, 2023 due primarily to lower produced water volumes processed, which resulted in lower chemical and utility expense. Operating expense per produced barrel processed was $0.23 for the quarter ended March 31, 2024, compared to $0.24 in the comparative quarter last year.

Crude Oil Logistics

Operating income for the Crude Oil Logistics segment increased by $8.8 million for the quarter ended March 31, 2024, compared to the quarter ended March 31, 2023. Operating income for the fourth quarter of Fiscal 2024 includes a loss from the disposal or impairment of assets of $0.6 million, compared to a loss of $32.4 million in the same period of the prior year. Excluding these amounts, operating income decreased by $23.0 million for the fourth quarter of Fiscal 2024. Product margin for crude oil sales decreased approximately $14.3 million due to lower production on acreage dedicated to us in the DJ Basin, lower margins realized as the result of a contract expiration on December 31, 2023 and the sale of the Marine business in March 2023. Operating income also decreased due to net losses on derivative contracts of $14.2 million, which is comprised of net losses of $6.8 million in the current quarter, versus net gains of $7.4 million in the prior year quarter. These decreases were partially offset by $5.5 million from lower operating expenses and lower depreciation expense primarily due to the sale of the Marine business. During the three months ended March 31, 2024, physical volumes on the Grand Mesa Pipeline averaged approximately 67,000 barrels per day, compared to approximately 76,000 barrels per day for the three months ended March 31, 2023.

Liquids Logistics

Operating income for the Liquids Logistics segment decreased by $69.2 million for the quarter ended March 31, 2024, compared to the quarter ended March 31, 2023. Operating income for the fourth quarter of Fiscal 2024 includes an impairment loss of $69.2 million, compared to an impairment loss of $10.1 million in the same period of the prior year. Excluding these amounts, operating income decreased by $10.1 million for the fourth quarter of Fiscal 2024. This decrease is primarily due to lower propane margins due to a decrease in volumes as a result of the closure or sale of several terminals earlier in the fiscal year and warmer than average temperatures compared to the prior year quarter. Refined products decreased as the demand for gasoline was weak, relative to supply, which led to lower margins. These decreases were partially offset by higher butane margins (excluding the impact of derivatives), as we had a stronger blending market from January through mid-February during the quarter ended March 31, 2024. For the current quarter, we recognized $6.0 million of gains from net derivative activity, compared to $2.3 million in losses in the prior year quarter.

Capitalization and Liquidity

Total liquidity (cash plus available capacity on our asset-based revolving credit facility (“ABL Facility”)) was approximately $539.4 million as of March 31, 2024. On March 31, 2024, there were no borrowings under the ABL Facility, compared to $138.0 million in outstanding borrowings at March 31, 2023. The ABL Facility was paid off with funds from the debt refinancing transaction in February 2024.

As of March 31, 2024, the Partnership is in compliance with all of its debt covenants and has no significant current debt maturities before February 2029.

Fourth Quarter Conference Call Information

A conference call to discuss NGL’s results of operations is scheduled for 4:00 pm Central Time on Thursday, June 6, 2024. Analysts, investors, and other interested parties may join the webcast via the event link: https://www.webcaster4.com/Webcast/Page/2808/50611 or by dialing [phone] and providing access code: 410412. An archived audio replay of the call will be available for 14 days, which can be accessed by dialing [phone] and providing replay passcode 50611.

NGL filed its Annual Report on Form 10-K for the year ended March 31, 2024 with the Securities and Exchange Commission after market on June 6, 2024. A copy of the Form 10-K can be found on the Partnership’s website at www.nglenergypartners.com. Unitholders may also request, free of charge, a hard copy of our Form 10-K and our complete audited financial statements.

Non-GAAP Financial Measures

We define EBITDA as net income (loss) attributable to NGL Energy Partners LP, plus interest expense, income tax expense (benefit), and depreciation and amortization expense. We define Adjusted EBITDA as EBITDA excluding net unrealized gains and losses on derivatives, lower of cost or net realizable value adjustments, gains and losses on disposal or impairment of assets, gains and losses on early extinguishment of liabilities, equity-based compensation expense, revaluation of liabilities and other. We also include in Adjusted EBITDA certain inventory valuation adjustments related to certain refined products businesses within our Liquids Logistics segment as discussed below. EBITDA and Adjusted EBITDA should not be considered as alternatives to net (loss) income, (loss) income 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.

Other than for certain businesses within our Liquids Logistics segment, for purposes of our Adjusted EBITDA calculation, we make a distinction between realized and unrealized gains and losses on derivatives. During the period when a derivative contract is open, we record changes in the fair value of the derivative as an unrealized gain or loss. When a derivative contract matures or is settled, we reverse the previously recorded unrealized gain or loss and record a realized gain or loss. We do not draw such a distinction between realized and unrealized gains and losses on derivatives of certain businesses within our Liquids Logistics segment. 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 associated with 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. In our Crude Oil Logistics segment, we purchase certain crude oil barrels using the West Texas Intermediate (“WTI”) calendar month average (“CMA”) price and sell the crude oil barrels using the WTI CMA price plus the Argus CMA Differential Roll Component (“CMA Differential Roll”) per our contracts. To eliminate the volatility of the CMA Differential Roll, we entered into derivative instrument positions in January 2021 to secure a margin of approximately $0.20 per barrel on 1.5 million barrels per month from May 2021 through December 2023. Due to the nature of these positions, the cash flow and earnings recognized on a GAAP basis differed from period to period depending on the current crude oil price and future estimated crude oil price which were valued utilizing third-party market quoted prices. We recognized in Adjusted EBITDA the gains and losses from the derivative instrument positions entered into in January 2021 to properly align with the physical margin we hedged each month through the term of this transaction. This representation aligns with management’s evaluation of the transaction. The derivative instrument positions we entered into related to the CMA Differential Roll expired as of December 31, 2023, and we have not entered into any new derivative instrument positions related to the CMA Differential Roll.

Distributable Cash Flow is defined as Adjusted EBITDA minus maintenance capital expenditures, income tax expense, cash interest expense, preferred unit distributions and other. Maintenance capital expenditures represent capital expenditures necessary to maintain the Partnership’s operating capacity. For the CMA Differential Roll transaction, as discussed above, we have included an adjustment to Distributable Cash Flow to reflect, in the period for which they relate, the actual cash flows for the positions that settled that are not being recognized in Adjusted EBITDA. Distributable Cash Flow is a performance metric used by senior management to compare cash flows generated by the Partnership (excluding growth capital expenditures and prior to the establishment of any retained cash reserves by the board of directors of our general partner) to the cash distributions expected to be paid to unitholders. Using this metric, management can quickly compute the coverage ratio of estimated cash flows to planned cash distributions. This financial measure also is important to investors as an indicator of whether the Partnership is generating cash flow at a level that can sustain, or support an increase in, quarterly distribution rates. Actual distribution amounts are set by the board of directors of our general partner.

We do not provide a reconciliation for non-GAAP estimates on a forward-looking basis where we are unable to provide a meaningful calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing or amount of various items that would impact the most directly comparable forward-looking U.S. GAAP financial measure that have not yet occurred, are out of the Partnership’s control and/or cannot be reasonably predicted. Forward-looking non-GAAP financial measures provided without the most directly comparable U.S. GAAP financial measures may vary materially from the corresponding U.S. GAAP financial measures.

Forward-Looking Statements

This press release includes “forward-looking statements.” All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Actual results could vary significantly from those expressed or implied in such statements and are subject to a number of risks and uncertainties. While NGL believes such forward-looking statements are reasonable, NGL cannot assure they will prove to be correct. The forward-looking statements involve risks and uncertainties that affect operations, financial performance, and other factors as discussed in filings with the Securities and Exchange Commission. Other factors that could impact any forward-looking statements are those risks described in NGL’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other public filings. You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading “Risk Factors.” NGL undertakes no obligation to publicly update or revise any forward-looking statements except as required by law.

NGL provides Adjusted EBITDA guidance that does not include certain charges and costs, which in future periods are generally expected to be similar to the kinds of charges and costs excluded from Adjusted EBITDA in prior periods, such as income taxes, interest and other non-operating items, depreciation and amortization, 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, acquisition expense, revaluation of liabilities and items that are unusual in nature or infrequently occurring. The exclusion of these charges and costs in future periods will have a significant impact on the Partnership’s Adjusted EBITDA, and the Partnership is not able to provide a reconciliation of its Adjusted EBITDA guidance to net income (loss) without unreasonable efforts due to the uncertainty and variability of the nature and amount of these future charges and costs and the Partnership believes that such reconciliation, if possible, would imply a degree of precision that would be potentially confusing or misleading to investors.

About NGL Energy Partners LP

NGL Energy Partners LP, a Delaware master limited partnership, is a diversified midstream energy partnership that transports, treats, recycles and disposes of produced and flowback water generated as part of the energy production process as well as transports, stores, markets and provides other logistics services for crude oil and liquid hydrocarbons.

For further information, visit the Partnership’s website at www.nglenergypartners.com.

NGL ENERGY PARTNERS LP AND SUBSIDIARIES Unaudited Consolidated Balance Sheets (in Thousands, except unit amounts)
	March 31,
		2024			2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	38,909		$	5,431
Accounts receivable-trade, net of allowance for expected credit losses of $1,671 and $1,964, respectively		814,087			1,033,956
Accounts receivable-affiliates		1,501			12,362
Inventories		130,907			142,607
Prepaid expenses and other current assets		126,933			98,089
Assets held for sale		66,597			—
Total current assets		1,178,934			1,292,445
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $1,011,274 and $898,184, respectively		2,096,702			2,223,380
GOODWILL		634,282			712,364
INTANGIBLE ASSETS, net of accumulated amortization of $332,560 and $580,860, respectively		939,978			1,058,668
INVESTMENTS IN UNCONSOLIDATED ENTITIES		20,305			21,090
OPERATING LEASE RIGHT-OF-USE ASSETS		97,155			90,220
OTHER NONCURRENT ASSETS		52,738			57,977
Total assets	$	5,020,094		$	5,456,144
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable-trade	$	707,536		$	927,591
Accounts payable-affiliates		37			65
Accrued expenses and other payables		213,757			133,616
Advance payments received from customers		17,313			14,699
Current maturities of long-term debt		7,000			—
Operating lease obligations		31,090			34,166
Liabilities held for sale		614			—
Total current liabilities		977,347			1,110,137
LONG-TERM DEBT, net of debt issuance costs of $49,178 and $30,117, respectively, and current maturities		2,843,822			2,857,805
OPERATING LEASE OBLIGATIONS		70,573			58,450
OTHER NONCURRENT LIABILITIES		129,185			111,226
CLASS D 9.00% PREFERRED UNITS, 600,000 and 600,000 preferred units issued and outstanding, respectively		551,097			551,097
EQUITY:
General partner, representing a 0.1% interest, 132,645 and 132,059 notional units, respectively		(52,834	)		(52,551	)
Limited partners, representing a 99.9% interest, 132,512,766 and 131,927,343 common units issued and outstanding, respectively		134,807			455,564
Class B preferred limited partners, 12,585,642 and 12,585,642 preferred units issued and outstanding, respectively		305,468			305,468
Class C preferred limited partners, 1,800,000 and 1,800,000 preferred units issued and outstanding, respectively		42,891			42,891
Accumulated other comprehensive loss		(499	)		(450	)
Noncontrolling interests		18,237			16,507
Total equity		448,070			767,429
Total liabilities and equity	$	5,020,094		$	5,456,144

NGL ENERGY PARTNERS LP AND SUBSIDIARIES Unaudited Consolidated Statements of Operations (in Thousands, except unit and per unit amounts)
	Three Months Ended March 31,						Year Ended March 31,
		2024			2023			2024			2023
REVENUES:
Water Solutions	$	172,971		$	185,807		$	730,818		$	697,038
Crude Oil Logistics		276,667			493,055			1,656,064			2,464,822
Liquids Logistics		1,179,956			1,369,972			4,569,689			5,533,044
Total Revenues		1,629,594			2,048,834			6,956,571			8,694,904
COST OF SALES:
Water Solutions		3,874			421			11,294			14,100
Crude Oil Logistics		254,546			442,474			1,521,190			2,250,934
Liquids Logistics		1,144,463			1,326,449			4,435,247			5,383,809
Corporate and Other		2			1,181			(937	)		1,181
Total Cost of Sales		1,402,885			1,770,525			5,966,794			7,650,024
OPERATING COSTS AND EXPENSES:
Operating		72,000			76,354			305,185			313,725
General and administrative		66,160			21,217			121,881			71,818
Depreciation and amortization		66,421			69,516			266,523			273,621
Loss on disposal or impairment of assets, net		101,715			71,097			115,936			86,888
Revaluation of liabilities		2,680			9,665			2,680			9,665
Operating (Loss) Income		(82,267	)		30,460			177,572			289,163
OTHER INCOME (EXPENSE):
Equity in earnings of unconsolidated entities		2,340			1,026			4,120			4,120
Interest expense		(94,553	)		(63,917	)		(269,923	)		(275,445	)
(Loss) gain on early extinguishment of liabilities, net		(62,152	)		(631	)		(55,281	)		6,177
Other income, net		1,662			17			2,793			28,748
(Loss) Income Before Income Taxes		(234,970	)		(33,045	)		(140,719	)		52,763
INCOME TAX EXPENSE		(1,769	)		(158	)		(2,405	)		(271	)
Net (Loss) Income		(236,739	)		(33,203	)		(143,124	)		52,492
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		(27	)		(316	)		(631	)		(1,106	)
NET (LOSS) INCOME ATTRIBUTABLE TO NGL ENERGY PARTNERS LP	$	(236,766	)	$	(33,519	)	$	(143,755	)	$	51,386
NET LOSS ALLOCATED TO COMMON UNITHOLDERS	$	(272,169	)	$	(67,661	)	$	(283,116	)	$	(73,232	)
BASIC AND DILUTED LOSS PER COMMON UNIT	$	(2.05	)	$	(0.51	)	$	(2.14	)	$	(0.56	)
BASIC AND DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING		132,512,766			131,631,271			132,146,477			131,007,171

EBITDA, ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW RECONCILIATION (Unaudited)   The following table reconciles NGL’s net (loss) income to NGL’s EBITDA, Adjusted EBITDA and Distributable Cash Flow for the periods indicated:
	Three Months Ended March 31,						Year Ended March 31,
		2024			2023			2024			2023
	(in thousands)
Net (loss) income	$	(236,739	)	$	(33,203	)	$	(143,124	)	$	52,492
Less: Net income attributable to noncontrolling interests		(27	)		(316	)		(631	)		(1,106	)
Net (loss) income attributable to NGL Energy Partners LP		(236,766	)		(33,519	)		(143,755	)		51,386
Interest expense		94,552			63,932			270,004			275,505
Income tax expense		1,769			158			2,405			271
Depreciation and amortization		66,282			69,519			266,287			273,544
EBITDA		(74,163	)		100,090			394,941			600,706
Net unrealized losses (gains) on derivatives		7,145			6,492			63,762			(50,438	)
CMA Differential Roll net losses (gains) (1)		—			(15,877	)		(71,285	)		3,547
Inventory valuation adjustment (2)		1,972			(1,030	)		(3,419	)		(7,795	)
Lower of cost or net realizable value adjustments		(1,932	)		177			1,337			(11,534	)
Loss on disposal or impairment of assets, net		101,651			71,097			115,555			86,872
Loss (gain) on early extinguishment of liabilities, net		62,152			631			55,281			(6,177	)
Equity-based compensation expense		—			852			1,098			2,718
Revaluation of liabilities (3)		2,680			9,665			2,680			9,665
Other (4)		48,037			1,204			50,131			5,111
Adjusted EBITDA	$	147,542		$	173,301		$	610,081		$	632,675
Less: Cash interest expense (5)		91,773			59,707			254,709			258,679
Less: Income tax expense		1,769			158			2,405			271
Less: Maintenance capital expenditures		13,189			20,599			54,854			61,649
Less: CMA Differential Roll (6)		—			(14,439	)		(27,165	)		(27,652	)
Less: Preferred unit distributions paid		178,299			—			178,299			—
Less: Other (7)		—			220			222			391
Distributable Cash Flow	$	(137,488	)	$	107,056		$	146,757		$	339,337

___________
(1)	Adjustment to align, within Adjusted EBITDA, the net gains and losses of the Partnership’s CMA Differential Roll derivative instruments positions with the physical margin being hedged. See “Non-GAAP Financial Measures” section above for a further discussion.
(2)	Amounts represent the difference between the market value of the inventory at the balance sheet date and its cost. See “Non-GAAP Financial Measures” section above for a further discussion.
(3)	Amounts represent the non-cash valuation adjustment of contingent consideration liabilities, offset by the cash payments, related to royalty agreements acquired as part of acquisitions in our Water Solutions segment.
(4)	Amounts represent accretion expense for asset retirement obligations, unrealized gains/losses on marketable securities and expenses incurred related to legal and advisory costs associated with acquisitions and dispositions, including the accrued judgment related to the LCT Capital, LLC legal matter, excluding interest, and the write-off of the legal costs related to the LCT Capital, LLC legal matter that were originally allocated to the Partnership’s general partner as reported in the footnotes to our consolidated financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended March 31, 2024. Also, the amount for the year ended March 31, 2023 includes the write off of an asset acquired in a prior period acquisition and non-cash operating expenses related to our Grand Mesa Pipeline.
(5)	Amounts represent interest expense payable in cash, excluding changes in the accrued interest balance.
(6)	Amounts represent the cash portion of the adjustments of the Partnership’s CMA Differential Roll derivative instrument positions, as discussed above, that settled during the period.
(7)	Amounts represent cash paid to settle asset retirement obligations.

ADJUSTED EBITDA RECONCILIATION BY SEGMENT (Unaudited)
	Three Months Ended March 31, 2024
	Water Solutions			Crude Oil Logistics			Liquids Logistics			Corporate and Other			Consolidated
	(in thousands)
Operating income (loss)	$	28,537		$	3,279		$	(51,376	)	$	(62,707	)	$	(82,267	)
Depreciation and amortization		55,361			8,058			2,337			665			66,421
Amortization recorded to cost of sales		—			—			65			—			65
Net unrealized losses on derivatives		2,354			4,113			678			—			7,145
Inventory valuation adjustment		—			—			1,972			—			1,972
Lower of cost or net realizable value adjustments		—			(785	)		(1,147	)		—			(1,932	)
Loss (gain) on disposal or impairment of assets, net		31,799			623			69,298			(5	)		101,715
Other income (expense), net		194			(1	)		5			1,464			1,662
Adjusted EBITDA attributable to unconsolidated entities		2,419			—			7			(13	)		2,413
Adjusted EBITDA attributable to noncontrolling interest		(371	)		—			—			—			(371	)
Revaluation of liabilities		2,680			—			—			—			2,680
Other		467			52			(22	)		47,542			48,039
Adjusted EBITDA	$	123,440		$	15,339		$	21,817		$	(13,054	)	$	147,542

	Three Months Ended March 31, 2023
	Water Solutions			Crude Oil Logistics			Liquids Logistics			Corporate and Other			Consolidated
	(in thousands)
Operating income (loss)	$	38,470		$	(5,488	)	$	17,818		$	(20,340	)	$	30,460
Depreciation and amortization		53,315			11,384			3,107			1,710			69,516
Amortization recorded to cost of sales		—			—			69			—			69
Net unrealized losses (gains) on derivatives		—			7,286			(1,973	)		1,179			6,492
CMA Differential Roll net losses (gains)		—			(15,877	)		—			—			(15,877	)
Inventory valuation adjustment		—			—			(1,030	)		—			(1,030	)
Lower of cost or net realizable value adjustments		—			—			177			—			177
Loss on disposal or impairment of assets, net		28,496			32,365			10,232			4			71,097
Equity-based compensation expense		—			—			—			852			852
Other income (expense), net		60			(60	)		—			17			17
Adjusted EBITDA attributable to unconsolidated entities		1,190			—			30			42			1,262
Adjusted EBITDA attributable to noncontrolling interest		(617	)		—			—			—			(617	)
Revaluation of liabilities		9,665			—			—			—			9,665
Other		979			105			39			95			1,218
Adjusted EBITDA	$	131,558		$	29,715		$	28,469		$	(16,441	)	$	173,301

	Year Ended March 31, 2024
	Water Solutions			Crude Oil Logistics			Liquids Logistics			Corporate and Other			Consolidated
	(in thousands)
Operating income (loss)	$	231,256		$	52,074		$	2,481		$	(108,239	)	$	177,572
Depreciation and amortization		214,480			36,922			10,372			4,749			266,523
Amortization recorded to cost of sales		—			—			260			—			260
Net unrealized losses (gains) on derivatives		385			65,786			(1,230	)		(1,179	)		63,762
CMA Differential Roll net losses (gains)		—			(71,285	)		—			—			(71,285	)
Inventory valuation adjustment		—			—			(3,419	)		—			(3,419	)
Lower of cost or net realizable value adjustments		—			—			1,337			—			1,337
Loss (gain) on disposal or impairment of assets, net		53,639			3,094			59,923			(720	)		115,936
Equity-based compensation expense		—			—			—			1,098			1,098
Other income, net		1,110			105			12			1,566			2,793
Adjusted EBITDA attributable to unconsolidated entities		4,393			—			(12	)		124			4,505
Adjusted EBITDA attributable to noncontrolling interest		(1,821	)		—			—			—			(1,821	)
Revaluation of liabilities		2,680			—			—			—			2,680
Other		2,186			191			230			47,533			50,140
Adjusted EBITDA	$	508,308		$	86,887		$	69,954		$	(55,068	)	$	610,081

	Year Ended March 31, 2023
	Water Solutions			Crude Oil Logistics			Liquids Logistics			Corporate and Other			Consolidated
	(in thousands)
Operating income (loss)	$	198,924		$	81,524		$	66,624		$	(57,909	)	$	289,163
Depreciation and amortization		207,081			46,577			13,301			6,662			273,621
Amortization recorded to cost of sales		—			—			274			—			274
Net unrealized (gains) losses on derivatives		(4,464	)		(50,104	)		2,951			1,179			(50,438	)
CMA Differential Roll net losses (gains)		—			3,547			—			—			3,547
Inventory valuation adjustment		—			—			(7,795	)		—			(7,795	)
Lower of cost or net realizable value adjustments		—			(2,247	)		(9,287	)		—			(11,534	)
Loss (gain) on disposal or impairment of assets, net		46,431			31,086			10,283			(912	)		86,888
Equity-based compensation expense		—			—			—			2,718			2,718
Other income (expense), net		70			330			(1,665	)		30,013			28,748
Adjusted EBITDA attributable to unconsolidated entities		4,759			—			27			176			4,962
Adjusted EBITDA attributable to noncontrolling interest		(2,269	)		—			—			—			(2,269	)
Revaluation of liabilities		9,665			—			—			—			9,665
Other		2,894			203			1,933			95			5,125
Adjusted EBITDA	$	463,091		$	110,916		$	76,646		$	(17,978	)	$	632,675

OPERATIONAL DATA (Unaudited)
	Three Months Ended		Year Ended
	March 31,		March 31,
	2024	2023	2024	2023
	(in thousands, except per day amounts)
Water Solutions:
Produced water processed (barrels per day)
Delaware Basin	2,086,047	2,169,690	2,123,337	2,042,777
Eagle Ford Basin	161,976	135,552	142,374	119,458
DJ Basin	143,237	147,033	150,426	150,619
Other Basins	—	12,555	740	14,483
Total	2,391,260	2,464,830	2,416,877	2,327,337
Recycled water (barrels per day)	87,129	76,056	84,212	118,847
Total (barrels per day)	2,478,389	2,540,886	2,501,089	2,446,184
Skim oil sold (barrels per day)	4,217	3,785	3,992	3,764
Crude Oil Logistics:
Crude oil sold (barrels)	3,338	6,069	20,068	25,497
Crude oil transported on owned pipelines (barrels)	6,091	6,882	25,611	27,714
Crude oil storage capacity - owned and leased (barrels) (1)			5,232	5,232
Crude oil inventory (barrels) (1)			573	684
Liquids Logistics:
Refined products sold (gallons)	185,832	202,154	817,634	769,151
Propane sold (gallons)	287,028	379,251	811,035	1,018,937
Butane sold (gallons)	142,897	130,521	537,015	539,658
Other products sold (gallons)	102,179	96,758	379,077	391,723
Natural gas liquids and refined products storage capacity - owned and leased (gallons) (1)			130,441	160,329
Refined products inventory (gallons) (1)			1,872	1,003
Propane inventory (gallons) (1)			35,177	48,379
Butane inventory (gallons) (1)			17,790	17,409
Other products inventory (gallons) (1)			20,112	12,893

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