Results
NGL Energy Partners LP
11/04/2025 | Press release | Distributed by Public on 11/04/2025 15:22
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following is a discussion of NGL Energy Partners LP's ("we," "us," "our," or the "Partnership") financial condition and results of operations as of and for the three months and six months ended September 30, 2025. The discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q ("Quarterly Report"), as well as Part II, Item 7-"Management's Discussion and Analysis of Financial Condition and Results of Operations" and the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025 ("Annual Report") filed with the Securities and Exchange Commission on May 29, 2025.
Recent Developments
Discontinued Operations
Sale of Refined Products Business and Exiting Biodiesel Business
As of March 31, 2025, we completed winding down our biodiesel business (see Note 1 to our unaudited condensed consolidated financial statements included in this Quarterly Report for a further discussion).
On April 30, 2025, we sold our refined products business, including certain working capital items, to a third-party (see Note 1 to our unaudited condensed consolidated financial statements included in this Quarterly Report for a further discussion).
The sale of our refined products business and winding down of our biodiesel business represent a strategic shift in our operations and will have a significant effect on our operations and financial results going forward. Accordingly, the results of operations and cash flows for our refined products and biodiesel businesses within our Liquids Logistics segment have been classified as discontinued operations for all periods presented and prior periods have been retrospectively adjusted in the unaudited condensed consolidated statements of operations and unaudited condensed consolidated statements of cash flows (see Note 16 to our unaudited condensed consolidated financial statements included in this Quarterly Report for a further discussion).
Other Dispositions
Sale of Certain Investments in Unconsolidated Entities and Related Assets
On April 14, 2025, we sold certain investments in unconsolidated entities, property, plant and equipment and intangible assets to a third-party (see Note 1 to our unaudited condensed consolidated financial statements included in this Quarterly Report for a further discussion).
Sale of Certain Natural Gas Liquids Terminals and Most of Our Wholesale Propane Business
On April 30, 2025, we sold most of our wholesale propane business, 17 of our natural gas liquids terminals, our interest in an unconsolidated entity and working capital ("Wholesale Propane Disposition") to a third-party (see Note 1 to our unaudited condensed consolidated financial statements included in this Quarterly Report for a further discussion).
Sale of Certain Railcars
During the six months ended September 30, 2025, we sold the remaining 203 railcars of our Crude Oil Logistics segment (see Note 15 to our unaudited condensed consolidated financial statements included in this Quarterly Report for a further discussion).
Consolidated Results of Operations
How We Evaluate Our Operations
We use a variety of financial and operating metrics to analyze our performance. Our consolidated financial metrics include operating income, income from continuing operations and Adjusted EBITDA. We evaluate segment operating results using operating income, Adjusted EBITDA and our operating metrics, which include various volume and rate statistics that are relevant for the respective segment. These operating metrics allow investors to analyze the various components of segment financial results in terms of volumes and rate/price. We use these metrics to analyze historical segment financial results and as the key inputs for forecasting and budgeting segment financial results. For additional information on our operating metrics, see the respective segment discussions below.
The following table summarizes our unaudited condensed consolidated statements of operations for the periods indicated:
| Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| Revenues | $ | 674,677 | $ | 756,472 | $ | 1,296,833 | $ | 1,515,706 | ||||||||||||||||||
| Cost of sales | 421,020 | 522,915 | 803,832 | 1,062,220 | ||||||||||||||||||||||
| Operating expenses | 74,089 | 76,565 | 144,857 | 147,953 | ||||||||||||||||||||||
| General and administrative expense | 14,729 | 12,117 | 28,469 | 27,081 | ||||||||||||||||||||||
| Depreciation and amortization | 63,994 | 61,875 | 130,579 | 124,039 | ||||||||||||||||||||||
| Loss (gain) on disposal or impairment of assets, net | 6,594 | 1,509 | (2,605) | (9,157) | ||||||||||||||||||||||
| Operating income | 94,251 | 81,491 | 191,701 | 163,570 | ||||||||||||||||||||||
| Equity in earnings of unconsolidated entities | - | 1,522 | 201 | 1,822 | ||||||||||||||||||||||
| Interest expense | (64,708) | (77,180) | (130,253) | (146,919) | ||||||||||||||||||||||
| Gain on early extinguishment of liabilities, net | - | - | 1,492 | - | ||||||||||||||||||||||
| Other income (expense), net | 208 | 1,834 | (3,307) | 1,998 | ||||||||||||||||||||||
| Income from continuing operations before income taxes | 29,751 | 7,667 | 59,834 | 20,471 | ||||||||||||||||||||||
| Income tax benefit (expense) | 61 | (174) | 243 | 4,625 | ||||||||||||||||||||||
| Income from continuing operations | 29,812 | 7,493 | 60,077 | 25,096 | ||||||||||||||||||||||
| Income (loss) from discontinued operations, net of tax | 9 | (4,102) | 39,388 | (11,230) | ||||||||||||||||||||||
| Net income | 29,821 | 3,391 | 99,465 | 13,866 | ||||||||||||||||||||||
| Less: Net income from continuing operations attributable to nonredeemable noncontrolling interests | (490) | (932) | (1,195) | (1,724) | ||||||||||||||||||||||
| Less: Net income from continuing operations attributable to redeemable noncontrolling interests | (47) | (5) | (64) | (5) | ||||||||||||||||||||||
| Net income attributable to NGL Energy Partners LP | $ | 29,284 | $ | 2,454 | $ | 98,206 | $ | 12,137 | ||||||||||||||||||
| Adjusted EBITDA - Continuing Operations (1) | $ | 167,333 | $ | 149,414 | $ | 311,305 | $ | 288,034 | ||||||||||||||||||
(1) See Adjusted EBITDA definition and reconciliation in "Non-GAAP Financial Measures" section below.
Changes in commodity prices and sales volumes affect both revenues and cost of sales in our unaudited condensed consolidated statements of operations and, therefore, the impact is largely offset between these line items.
Operating income increased $12.8 million for the three months ended September 30, 2025, compared with the same period in 2024, primarily as a result of the following:
•Water Solutions - an increase of $19.5 million due primarily to higher water disposal revenues from an increase in produced water volumes processed, partially offset by increased expenses mainly due to losses on disposal or impairment of assets and higher depreciation and amortization expense;
•Crude Oil Logistics - a decrease of $6.6 million due primarily to lower transportation revenue and lower gains on derivatives, partially offset by higher price and quality differentials realized;
•Liquids Logistics - an increase of $3.7 million due primarily to lower expenses related to the Wholesale Propane Disposition and increased product margins due to lower derivative losses; and
•Corporate and Other - a decrease of $3.9 million due to increased legal expenses and business insurance.
In addition to the items discussed above, interest expense was lower (as discussed below).
Operating income increased $28.1 million for the six months ended September 30, 2025, compared with the same period in 2024, primarily as a result of the following:
•Water Solutions - an increase of $20.1 million due primarily to higher water disposal revenues from an increase in produced water volumes processed, partially offset by increased expenses mainly due to losses on disposal or impairment of assets and higher depreciation and amortization expense;
•Crude Oil Logistics - a decrease of $20.0 million due primarily to lower transportation revenue and increased expenses due to a net loss on the sale of assets;
•Liquids Logistics - an increase of $31.9 million due primarily to lower expenses related to the Wholesale Propane Disposition, including a gain on the sale, and increased margins from the sale of products; and
•Corporate and Other - a decrease of $3.8 million due primarily to increased legal expenses and business insurance.
In addition to the items discussed above, interest expense was lower (as discussed below) which was partially offset by a lower income tax benefit (see Note 2 to our unaudited condensed consolidated financial statements included in this Quarterly Report), losses on marketable securities and a loss from a legal dispute.
Other Items
Seismic Activity
The subsurface injection of produced water for disposal has been associated with induced seismic events in Texas and New Mexico. While these events have been of relatively low magnitude, industry and relevant state regulators are, nevertheless, taking proactive measures to attempt to prevent similar induced seismic events. More specifically, we are engaged in various collaborative industry efforts with other disposal operators and relevant state regulatory agencies, working to collect and review data, enhance understanding of regional fault systems, and ultimately develop and implement appropriate longer-term mitigation strategies. As part of this effort, we have implemented reductions in injected volumes at certain facilities, and where appropriate have temporarily shut-in facilities. To date, due to the capacity of our integrated system in the affected areas, the diverse locations of our disposal facilities, and the connectivity of our system, our ability to dispose of produced water has not been materially impacted by these actions, and with our unique positioning outside of the affected areas, we have the ability to grow our asset base.
Subsequent Events
See Note 17 to our unaudited condensed consolidated financial statements included in this Quarterly Report for a discussion of transactions that occurred subsequent to September 30, 2025.
Segment Operating Results for the Three Months Ended September 30, 2025 and 2024
Water Solutions
The following table summarizes the operating results of our Water Solutions segment for the periods indicated:
| Three Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | Change | ||||||||||||||||||
| (in thousands, except per barrel and per day amounts) | ||||||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Water disposal service fees (1) | $ | 167,127 | $ | 148,241 | $ | 18,886 | ||||||||||||||
| Sale of recovered crude oil | 28,066 | 24,708 | 3,358 | |||||||||||||||||
| Recycled water (2) | 1,323 | 679 | 644 | |||||||||||||||||
| Other revenues (1)(2) | 13,227 | 8,239 | 4,988 | |||||||||||||||||
| Total revenues | 209,743 | 181,867 | 27,876 | |||||||||||||||||
| Expenses: | ||||||||||||||||||||
| Cost of sales-excluding impact of derivatives | 1,083 | 1,752 | (669) | |||||||||||||||||
| Cost of sales-derivative (gain) loss-unrealized | (1,760) | 388 | (2,148) | |||||||||||||||||
| Cost of sales-derivative gain-realized | - | (2,707) | 2,707 | |||||||||||||||||
| Operating expenses | 55,677 | 53,611 | 2,066 | |||||||||||||||||
| General and administrative expenses | 1,079 | 1,520 | (441) | |||||||||||||||||
| Depreciation and amortization expense | 55,550 | 52,523 | 3,027 | |||||||||||||||||
| Loss on disposal or impairment of assets, net | 5,760 | 1,951 | 3,809 | |||||||||||||||||
| Total expenses | 117,389 | 109,038 | 8,351 | |||||||||||||||||
| Segment operating income | $ | 92,354 | $ | 72,829 | $ | 19,525 | ||||||||||||||
| Adjusted EBITDA - Continuing Operations (3) | $ | 151,902 | $ | 128,862 | $ | 23,040 | ||||||||||||||
| Produced water processed (barrels per day) | ||||||||||||||||||||
| Delaware Basin | 2,442,972 | 2,349,333 | 93,639 | |||||||||||||||||
| Eagle Ford Basin | 185,608 | 188,250 | (2,642) | |||||||||||||||||
| DJ Basin | 174,824 | 143,947 | 30,877 | |||||||||||||||||
| Total | 2,803,404 | 2,681,530 | 121,874 | |||||||||||||||||
| Recycled water (barrels per day) | 140,936 | 92,301 | 48,635 | |||||||||||||||||
| Total (barrels per day) | 2,944,340 | 2,773,831 | 170,509 | |||||||||||||||||
| Skim oil sold (barrels per day) | 5,002 | 3,776 | 1,226 | |||||||||||||||||
| Service fees for produced water processed ($/barrel) (4)(5) | $ | 0.65 | $ | 0.60 | $ | 0.05 | ||||||||||||||
| Recovered crude oil for produced water processed ($/barrel) (4) | $ | 0.11 | $ | 0.10 | $ | 0.01 | ||||||||||||||
| Operating expenses for produced water processed ($/barrel) (4) | $ | 0.22 | $ | 0.22 | $ | - | ||||||||||||||
(1) Water disposal service fees and Other revenues in the table above differ from the amounts reported in Note 10 to our unaudited consolidated financial statements, as the amounts in Note 10 are disaggregated by the performance obligations with type of contract and service provided and the timing of the transfer of goods and services, while the amount above is presented based on how management reviews performance. In the table above, revenues from reimbursements from construction projects, booster operating fees and generator rentals and pipeline revenue are included in Other revenues, while in Note 10 the amounts are included in Water disposal service fees.
(2) Recycled water in the table above differs from the amount of Sale of Water reported in Note 10 to our unaudited consolidated financial statements, as the amounts in Note 10 are disaggregated by the performance obligations with type of contract and service provided and the timing of the transfer of goods and services, while the amount above is presented based on how management reviews performance. In Note 10, Sale of Water includes the sale of produced water, recycled water and brackish non-potable water, which in the table above, brackish non-potable water is included in Other revenues.
(3) See Adjusted EBITDA definition and reconciliation in "Non-GAAP Financial Measures" section below.
(4) Total produced water barrels processed during the three months ended September 30, 2025 and 2024 were 257,913,208 and 246,700,755, respectively. These amounts do not include 23,670,072 barrels and 7,693,542 barrels for the three months ended September 30, 2025 and 2024, respectively, related to payments made by certain producers for committed volumes not delivered, as discussed further below. In addition, water pipeline revenue, which is included in Other Revenues, includes payments from a producer for 8,160,115 committed barrels not delivered during the three months ended September 30, 2025.
(5) Excluding payments made by certain producers for committed volumes not delivered, service fees for produced water processed ($/barrel) would have been $0.61/barrel and $0.59/barrel during the three months ended September 30, 2025 and 2024, respectively.
Water Disposal Service Fee Revenues.The increase was due primarily to an increase in produced water volumes processed from contracted customers. There was also an increase in payments made by certain producers for committed volumes not delivered.
Recovered Crude Oil Revenues.The increase was due primarily to an increase in skim oil barrels sold due to more skim oil recovered from receiving more produced water, partially offset by lower realized crude oil prices received from the sale of skim oil barrels.
Recycled Water Revenues. Revenue from recycled water includes the sale of produced water and recycled water for use in our customers' completion activities. The increase was due primarily to higher pricing for recycled water and higher recycled water volumes related to timing of water to be used in completions.
Other Revenues. Other revenues primarily include reimbursements from construction projects, booster operating fees and generator rentals, water pipeline revenues, solids disposal revenues and brackish non-potable water revenues. The increase was due primarily to higher water pipeline revenue, including payments from a producer for committed volumes not delivered, due to our expanded Lea County Express Pipeline system ("LEX II") commencing operations during the three months ended December 31, 2024. This increase was partially offset by lower reimbursements from construction projects, booster operating fees and generator rentals.
Cost of Sales-Excluding Impact of Derivatives. The decrease was due primarily to lower costs incurred that will be reimbursed by producers for generator and fuel costs at various booster stations.
Operating and General and Administrative Expenses. The increase was due primarily to higher royalty expense due to volumes related to the LEX II pipeline commencing operations and increased volumes at certain other saltwater disposal wells, higher repairs and maintenance expense due to timing of repairs, higher utilities expense due to increased produced water volumes processed and higher severance taxes due to an increase in revenue from recovered crude oil, partially offset by lower chemical expense due to purchasing fewer chemicals and using chemicals more efficiently, lower bad debt expense and lower legal expense.
Depreciation and Amortization Expense. The increase was due primarily to depreciation of newly developed facilities and infrastructure, partially offset by certain long-term assets being fully amortized, impaired or sold during the fiscal year ended March 31, 2025 and six months ended September 30, 2025.
Loss on Disposal or Impairment of Assets, Net. During the three months ended September 30, 2025, we recorded:
•a net loss of $7.8 million primarily related to writing down the net book value of certain saltwater disposal wells and capital projects due to abandonment and the retirement of certain other assets;
•a gain of $1.4 million from insurance recoveries for certain saltwater disposal facilities and boosters damaged in a prior period; and
•a net gain of $0.6 million primarily related to the sale of certain assets.
During the three months ended September 30, 2024, we recorded:
•a net loss of $3.5 million primarily related to writing down the net book value of certain saltwater disposal wells and capital projects due to abandonment and the retirement of certain other assets; and
•a gain of $1.5 million from insurance recoveries for certain saltwater disposal facilities and boosters damaged in a prior period.
Crude Oil Logistics
The following table summarizes the operating results of our Crude Oil Logistics segment for the periods indicated:
| Three Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | Change | ||||||||||||||||||
| (in thousands, except per barrel amounts) | ||||||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Crude oil sales | $ | 211,824 | $ | 225,013 | $ | (13,189) | ||||||||||||||
| Crude oil transportation and other sales | 8,207 | 18,828 | (10,621) | |||||||||||||||||
| Total revenues | 220,031 | 243,841 | (23,810) | |||||||||||||||||
| Expenses: | ||||||||||||||||||||
| Cost of sales-excluding impact of derivatives | 195,665 | 216,593 | (20,928) | |||||||||||||||||
| Cost of sales-derivative gain-unrealized | (313) | (4,012) | 3,699 | |||||||||||||||||
| Cost of sales-derivative gain-realized | (71) | (349) | 278 | |||||||||||||||||
| Operating expenses | 9,745 | 10,249 | (504) | |||||||||||||||||
| General and administrative expenses | 715 | 677 | 38 | |||||||||||||||||
| Depreciation and amortization expense | 6,063 | 6,285 | (222) | |||||||||||||||||
| Loss (gain) on disposal or impairment of assets, net | 3 | (442) | 445 | |||||||||||||||||
| Total expenses | 211,807 | 229,001 | (17,194) | |||||||||||||||||
| Segment operating income | $ | 8,224 | $ | 14,840 | $ | (6,616) | ||||||||||||||
| Adjusted EBITDA - Continuing Operations (1) | $ | 16,553 | $ | 17,263 | $ | (710) | ||||||||||||||
| Crude oil sold (barrels) | 3,173 | 2,868 | 305 | |||||||||||||||||
| Crude oil transported on owned pipelines (barrels) | 6,633 | 5,807 | 826 | |||||||||||||||||
| Crude oil storage capacity - owned and leased (barrels) (2) | 5,232 | 5,232 | - | |||||||||||||||||
| Crude oil storage capacity leased to third-parties (barrels) (2) | 1,650 | 1,650 | - | |||||||||||||||||
| Crude oil inventory (barrels) (2) | 712 | 450 | 262 | |||||||||||||||||
| Crude oil sold ($/barrel) | $ | 66.758 | $ | 78.456 | $ | (11.698) | ||||||||||||||
| Cost per crude oil sold ($/barrel) (3) | $ | 61.666 | $ | 75.521 | $ | (13.855) | ||||||||||||||
| Crude oil product margin ($/barrel) (3) | $ | 5.092 | $ | 2.935 | $ | 2.157 | ||||||||||||||
(1) See Adjusted EBITDA definition and reconciliation in "Non-GAAP Financial Measures" section below.
(2) Information is presented as of September 30, 2025 and September 30, 2024, respectively.
(3) Cost and product margin per barrel excludes the impact of derivatives.
Crude Oil Sales and Cost of Sales-Excluding Impact of Derivatives. The decreases in sales and cost of sales, excluding the impact of derivatives, were primarily due to lower commodity prices partially offset by higher production on acreage dedicated to us in the DJ Basin during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.
During the three months ended September 30, 2025, the crude oil product margin and margin per barrel increased primarily due to higher price and quality differentials realized during the three months ended September 30, 2025, compared to the three months ended September 30, 2024. Additionally, there was a more significant decrease in market prices during the three months ended September 30, 2024, thus also contributing to a smaller margin per barrel for that period. Crude oil product margin calculations do not include gains and losses from derivatives that may offset the movement in the physical margin.
Crude Oil Transportation and Other Sales. The decrease was primarily due to lower pipeline revenue because of the expiration of certain transportation services contracts on third-party pipelines and lower rental revenue due to the sale of our railcars.
During the three months ended September 30, 2025, physical volumes on the Grand Mesa Pipeline averaged approximately 72,000 barrels per day, compared to approximately 63,000 barrels per day during the three months ended September 30, 2024. Higher contracted volumes were shipped on the Grand Mesa Pipeline due to higher production on acreage dedicated to us in the DJ Basin.
Operating and General and Administrative Expenses. The decrease was primarily due to lower incentive compensation expense accrued during the three months ended September 30, 2025, and lower ad valorem taxes due to lower assessed values on our Grand Mesa Pipeline assets in the State of Colorado, which were partially offset by higher utilities expense on the Grand Mesa Pipeline from higher volumes flowing through the system during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.
Depreciation and Amortization Expense. The decrease was primarily due to the sale of railcars during the year ended March 31, 2025 and the six months ended September 30, 2025.
Loss (Gain) on Disposal or Impairment of Assets, Net. During the three months ended September 30, 2025, we recorded a loss of $0.5 million from the sale of linefill and other assets and a gain of $0.5 million from the sale of railcars. During the three months ended September 30, 2024, we recorded a net gain of $0.4 million primarily due to a gain on the sale of certain assets.
Liquids Logistics
The following table summarizes the operating results of our Liquids Logistics segment for the periods indicated. As discussed above, the operating results of our refined products and biodiesel businesses have been classified as discontinued operations and prior periods have been retrospectively adjusted.
| Three Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | Change | ||||||||||||||||||
| (in thousands, except per gallon amounts) | ||||||||||||||||||||
| Butane: | ||||||||||||||||||||
| Sales | $ | 113,992 | $ | 123,664 | $ | (9,672) | ||||||||||||||
| Cost of sales-excluding impact of derivatives | 104,821 | 115,280 | (10,459) | |||||||||||||||||
| Cost of sales-derivative loss-unrealized | 1,450 | 5,143 | (3,693) | |||||||||||||||||
| Cost of sales-derivative (gain) loss-realized | (431) | 303 | (734) | |||||||||||||||||
| Product margin | 8,152 | 2,938 | 5,214 | |||||||||||||||||
| Propane: | ||||||||||||||||||||
| Sales | 31,706 | 90,378 | (58,672) | |||||||||||||||||
| Cost of sales-excluding impact of derivatives | 29,882 | 88,851 | (58,969) | |||||||||||||||||
| Cost of sales-derivative loss-unrealized | 265 | 1,147 | (882) | |||||||||||||||||
| Cost of sales-derivative gain-realized | (256) | (2,622) | 2,366 | |||||||||||||||||
| Product margin | 1,815 | 3,002 | (1,187) | |||||||||||||||||
| Other products: | ||||||||||||||||||||
| Sales | 97,304 | 110,637 | (13,333) | |||||||||||||||||
| Cost of sales-excluding impact of derivatives | 90,320 | 102,965 | (12,645) | |||||||||||||||||
| Cost of sales-derivative loss (gain)-unrealized | 39 | (55) | 94 | |||||||||||||||||
| Cost of sales-derivative (gain) loss-realized | (72) | 13 | (85) | |||||||||||||||||
| Product margin | 7,017 | 7,714 | (697) | |||||||||||||||||
| Service: | ||||||||||||||||||||
| Sales | 1,650 | 6,095 | (4,445) | |||||||||||||||||
| Cost of sales | 398 | 309 | 89 | |||||||||||||||||
| Product margin | 1,252 | 5,786 | (4,534) | |||||||||||||||||
| Expenses: | ||||||||||||||||||||
| Operating expenses | 8,667 | 12,705 | (4,038) | |||||||||||||||||
| General and administrative expenses | 851 | 1,741 | (890) | |||||||||||||||||
| Depreciation and amortization expense | 1,540 | 2,365 | (825) | |||||||||||||||||
| Loss on disposal or impairment of assets, net | 832 | - | 832 | |||||||||||||||||
| Total expenses | 11,890 | 16,811 | (4,921) | |||||||||||||||||
| Segment operating income | $ | 6,346 | $ | 2,629 | $ | 3,717 | ||||||||||||||
| Adjusted EBITDA - Continuing Operations (1) | $ | 10,521 | $ | 11,379 | $ | (858) | ||||||||||||||
| Three Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | Change | ||||||||||||||||||
| (in thousands, except per gallon amounts) | ||||||||||||||||||||
| Natural gas liquids storage capacity - owned and leased (gallons) (2) | 49,571 | 116,531 | (66,960) | |||||||||||||||||
| Butane sold (gallons) | 111,442 | 109,783 | 1,659 | |||||||||||||||||
| Butane sold ($/gallon) | $ | 1.023 | $ | 1.126 | $ | (0.103) | ||||||||||||||
| Cost per butane sold ($/gallon) (3) | $ | 0.941 | $ | 1.050 | $ | (0.109) | ||||||||||||||
| Butane product margin ($/gallon) (3) | $ | 0.082 | $ | 0.076 | $ | 0.006 | ||||||||||||||
| Butane inventory (gallons) (2) | 54,976 | 81,441 | (26,465) | |||||||||||||||||
| Propane sold (gallons) | 37,305 | 108,589 | (71,284) | |||||||||||||||||
| Propane sold ($/gallon) | $ | 0.850 | $ | 0.832 | $ | 0.018 | ||||||||||||||
| Cost per propane sold ($/gallon) (3) | $ | 0.801 | $ | 0.818 | $ | (0.017) | ||||||||||||||
| Propane product margin ($/gallon) (3) | $ | 0.049 | $ | 0.014 | $ | 0.035 | ||||||||||||||
| Propane inventory (gallons) (2) | 18,071 | 80,323 | (62,252) | |||||||||||||||||
| Other products sold (gallons) | 74,158 | 74,491 | (333) | |||||||||||||||||
| Other products sold ($/gallon) | $ | 1.312 | $ | 1.485 | $ | (0.173) | ||||||||||||||
| Cost per other products sold ($/gallon) (3) | $ | 1.218 | $ | 1.382 | $ | (0.164) | ||||||||||||||
| Other products product margin ($/gallon) (3) | $ | 0.094 | $ | 0.103 | $ | (0.009) | ||||||||||||||
| Other products inventory (gallons) (2) | 4,849 | 5,254 | (405) | |||||||||||||||||
(1) See Adjusted EBITDA definition and reconciliation in "Non-GAAP Financial Measures" section below.
(2) Information is presented as of September 30, 2025 and September 30, 2024, respectively.
(3) Cost and product margin per gallon excludes the impact of derivatives.
Butane Sales and Cost of Sales-Excluding Impact of Derivatives. The decreases in sales and cost of sales, excluding the impact of derivatives, during the three months ended September 30, 2025, compared to the three months ended September 30, 2024 were primarily due to lower butane prices during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.
Butane product margins, excluding the impact of derivatives, increased during the three months ended September 30, 2025, compared to the three months ended September 30, 2024 due to improved rail utilization and supply optimization.
Propane Sales and Cost of Sales-Excluding Impact of Derivatives. The decreases in sales and cost of sales, excluding the impact of derivatives, were due primarily to the Wholesale Propane Disposition.
Propane product margins, excluding the impact of derivatives, increased during the three months ended September 30, 2025 primarily due to selling lower-priced inventory into a market of rising prices.
Other Products Sales and Cost of Sales-Excluding Impact of Derivatives.The decreases in sales and cost of sales, excluding the impact of derivatives, were primarily due to decreased commodity prices during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.
Other products sales product margins, excluding the impact of derivatives, decreased during the three months ended September 30, 2025 primarily due to lower asphalt margins due to an increase in product costs.
Service Sales and Cost of Sales.The sales include storage, terminaling and transportation services income. Sales during the three months ended September 30, 2025 decreased due to the Wholesale Propane Disposition and the expiration of a throughput contract during the prior fiscal year. Cost of sales increased due to increased hauling activities.
Operating and General and Administrative Expenses. The decrease during the three months ended September 30, 2025 compared to the three months ended September 30, 2024 was due to the Wholesale Propane Disposition.
Depreciation and Amortization Expense. The decrease during the three months ended September 30, 2025 compared to the three months ended September 30, 2024 was due to the Wholesale Propane Disposition.
Loss on Disposal or Impairment of Assets, Net. During the three months ended September 30, 2025, we recorded a net loss of $0.8 million due to the Wholesale Propane Disposition.
Corporate and Other
The operating loss within "Corporate and Other" includes the following components for the periods indicated:
| Three Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | Change | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Other revenues: | ||||||||||||||||||||
| Service revenues | $ | 251 | $ | 74 | $ | 177 | ||||||||||||||
| Expenses: | ||||||||||||||||||||
| General and administrative expenses | 12,084 | 8,179 | 3,905 | |||||||||||||||||
| Depreciation and amortization expense | 841 | 702 | 139 | |||||||||||||||||
| Gain on disposal or impairment of assets, net | (1) | - | (1) | |||||||||||||||||
| Total expenses | 12,924 | 8,881 | 4,043 | |||||||||||||||||
| Operating loss | $ | (12,673) | $ | (8,807) | $ | (3,866) | ||||||||||||||
| Adjusted EBITDA - Continuing Operations (1) | $ | (11,643) | $ | (8,090) | $ | (3,553) | ||||||||||||||
(1) See Adjusted EBITDA definition and reconciliation in "Non-GAAP Financial Measures" section below.
Service Revenues. These revenues relate to billings to the noncontrolling interest holders for usage of the airplanes acquired in June and October 2024.
General and Administrative Expenses. The expenses during the three months ended September 30, 2025 increased by $3.9 million due to lower legal expenses in the prior year period due to a reimbursement of legal expenses related to a dispute associated with commercial activities and lower business insurance expense in the prior year period due to the receipt of credits.
Depreciation and Amortization Expense.The increase during the three months ended September 30, 2025 was due to depreciation of the airplane put into service in October 2024.
Interest Expense
The following table summarizes the components of our consolidated interest expense for the periods indicated:
| Three Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | Change | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Senior secured notes | $ | 45,102 | $ | 45,500 | $ | (398) | ||||||||||||||
| Senior secured term loan "B" credit facility ("Term Loan B") | 14,212 | 16,668 | (2,456) | |||||||||||||||||
| Asset-based revolving credit facility ("ABL Facility") | 2,013 | 6,401 | (4,388) | |||||||||||||||||
| Other indebtedness | 553 | (294) | 847 | |||||||||||||||||
| Total debt interest expense | 61,880 | 68,275 | (6,395) | |||||||||||||||||
| Amortization of debt issuance costs | 3,133 | 2,929 | 204 | |||||||||||||||||
| Unrealized (gain) loss on interest rate swaps | (86) | 7,027 | (7,113) | |||||||||||||||||
| Realized gain on interest rate swaps | (219) | (1,051) | 832 | |||||||||||||||||
| Total interest expense | $ | 64,708 | $ | 77,180 | $ | (12,472) | ||||||||||||||
The debt interest expense decreased $6.4 million during the three months ended September 30, 2025 primarily due to lower interest rates on the Term Loan B and a lower weighted average daily balance on the ABL Facility for the three months ended September 30, 2025 compared to our outstanding debt instruments in the prior year period.
Segment Operating Results for the Six Months Ended September 30, 2025 and 2024
Water Solutions
The following table summarizes the operating results of our Water Solutions segment for the periods indicated:
| Six Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | Change | ||||||||||||||||||
| (in thousands, except per barrel and per day amounts) | ||||||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Water disposal service fees (1) | $ | 329,202 | $ | 289,239 | $ | 39,963 | ||||||||||||||
| Sale of recovered crude oil | 52,874 | 55,484 | (2,610) | |||||||||||||||||
| Recycled water (2) | 2,699 | 2,939 | (240) | |||||||||||||||||
| Other revenues (1)(2) | 26,248 | 15,615 | 10,633 | |||||||||||||||||
| Total revenues | 411,023 | 363,277 | 47,746 | |||||||||||||||||
| Expenses: | ||||||||||||||||||||
| Cost of sales-excluding impact of derivatives | 2,740 | 3,577 | (837) | |||||||||||||||||
| Cost of sales-derivative gain-unrealized | (5,274) | (473) | (4,801) | |||||||||||||||||
| Cost of sales-derivative gain-realized | - | (2,671) | 2,671 | |||||||||||||||||
| Operating expenses | 111,010 | 106,436 | 4,574 | |||||||||||||||||
| General and administrative expenses | 2,324 | 2,731 | (407) | |||||||||||||||||
| Depreciation and amortization expense | 113,626 | 105,235 | 8,391 | |||||||||||||||||
| Loss (gain) on disposal or impairment of assets, net | 9,296 | (8,745) | 18,041 | |||||||||||||||||
| Total expenses | 233,722 | 206,090 | 27,632 | |||||||||||||||||
| Segment operating income | $ | 177,301 | $ | 157,187 | $ | 20,114 | ||||||||||||||
| Adjusted EBITDA - Continuing Operations (3) | $ | 294,771 | $ | 254,465 | $ | 40,306 | ||||||||||||||
| Produced water processed (barrels per day) | ||||||||||||||||||||
| Delaware Basin | 2,427,382 | 2,255,861 | 171,521 | |||||||||||||||||
| Eagle Ford Basin | 193,149 | 182,311 | 10,838 | |||||||||||||||||
| DJ Basin | 167,064 | 135,867 | 31,197 | |||||||||||||||||
| Total | 2,787,595 | 2,574,039 | 213,556 | |||||||||||||||||
| Recycled water (barrels per day) | 189,917 | 98,334 | 91,583 | |||||||||||||||||
| Total (barrels per day) | 2,977,512 | 2,672,373 | 305,139 | |||||||||||||||||
| Skim oil sold (barrels per day) | 4,803 | 4,099 | 704 | |||||||||||||||||
| Service fees for produced water processed ($/barrel) (4)(5) | $ | 0.65 | $ | 0.61 | $ | 0.04 | ||||||||||||||
| Recovered crude oil for produced water processed ($/barrel) (4) | $ | 0.10 | $ | 0.12 | $ | (0.02) | ||||||||||||||
| Operating expenses for produced water processed ($/barrel) (4) | $ | 0.22 | $ | 0.23 | $ | (0.01) | ||||||||||||||
(1) Water disposal service fees and Other revenues in the table above differ from the amounts reported in Note 10 to our unaudited consolidated financial statements, as the amounts in Note 10 are disaggregated by the performance obligations with type of contract and service provided and the timing of the transfer of goods and services, while the amount above is presented based on how management reviews performance. In the table above, revenues from reimbursements from construction projects, booster operating fees and generator rentals and pipeline revenue are included in Other revenues, while in Note 10 the amounts are included in Water disposal service fees.
(2) Recycled water in the table above differs from the amount of Sale of Water reported in Note 10 to our unaudited consolidated financial statements, as the amounts in Note 10 are disaggregated by the performance obligations with type of contract and service provided and the timing of the transfer of goods and services, while the amount above is presented based on how management reviews performance. In Note 10, Sale of Water includes the sale of produced water, recycled water and brackish non-potable water, which in the table above, brackish non-potable water is included in Other revenues.
(3) See Adjusted EBITDA definition and reconciliation in "Non-GAAP Financial Measures" section below.
(4) Total produced water barrels processed during the six months ended September 30, 2025 and 2024 were 510,130,061 and 471,049,065, respectively. These amounts do not include 40,037,812 barrels and 19,393,348 barrels for the six months ended September 30, 2025 and 2024, respectively, related to payments made by certain producers for committed volumes not delivered, as discussed further below. In addition, water pipeline revenue, which is included in Other Revenues, includes payments from a producer for 17,606,145 committed barrels not delivered during the six months ended September 30, 2025.
(5) Excluding payments made by certain producers for committed volumes not delivered, service fees for produced water processed ($/barrel) would have been $0.62/barrel and $0.59/barrel during the six months ended September 30, 2025 and 2024, respectively.
Water Disposal Service Fee Revenues.The increase was due primarily to an increase in produced water volumes processed from contracted customers. There was also an increase in payments made by certain producers for committed volumes not delivered.
Recovered Crude Oil Revenues.The decrease was due primarily to lower realized crude oil prices received from the sale of skim oil barrels, partially offset by an increase in skim oil barrels sold due to more skim oil recovered from receiving more produced water.
Recycled Water Revenues. The decrease was due primarily to lower pricing for recycled water, partially offset by higher recycled water volumes related to timing of water to be used in completions.
Other Revenues. The increase was due primarily to higher water pipeline revenue, including payments from a producer for committed volumes not delivered, due to our LEX II commencing operations during the three months ended December 31, 2024. This increase was partially offset by lower reimbursements from construction projects, booster operating fees and generator rentals.
Cost of Sales-Excluding Impact of Derivatives. The decrease was due primarily to lower costs incurred that will be reimbursed by producers for generator and fuel costs at various booster stations.
Operating and General and Administrative Expenses. The increase was due primarily to higher royalty expense due to volumes related to the LEX II pipeline commencing operations and increased volumes at certain other saltwater disposal wells, higher utilities expense due to increased produced water volumes processed and higher repairs and maintenance expense due to timing of repairs, partially offset by lower bad debt expense and lower legal expense.
Depreciation and Amortization Expense. The increase was due primarily to depreciation of newly developed facilities and infrastructure, partially offset by certain long-term assets being fully amortized, impaired or sold during the fiscal year ended March 31, 2025 and six months ended September 30, 2025.
Loss (Gain) on Disposal or Impairment of Assets, Net. During the six months ended September 30, 2025, we recorded:
•a net loss of $10.8 million primarily related to writing down the net book value of certain saltwater disposal wells and capital projects due to abandonment and the retirement of certain other assets;
•a gain of $2.2 million from insurance recoveries for certain saltwater disposal facilities and boosters damaged in a prior period; and
•a net loss of $0.6 million primarily related to the sale of certain assets.
During the six months ended September 30, 2024, we recorded:
•a net gain of $10.5 million primarily related to the sale of certain assets;
•a net loss of $3.6 million primarily related to writing down the net book value of certain saltwater disposal wells and capital projects due to abandonment and the retirement of certain other assets; and
•a gain of $1.8 million from insurance recoveries for certain saltwater disposal facilities and boosters damaged in a prior period.
Crude Oil Logistics
The following table summarizes the operating results of our Crude Oil Logistics segment for the periods indicated:
| Six Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | Change | ||||||||||||||||||
| (in thousands, except per barrel amounts) | ||||||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Crude oil sales | $ | 370,352 | $ | 487,622 | $ | (117,270) | ||||||||||||||
| Crude oil transportation and other sales | 17,310 | 36,434 | (19,124) | |||||||||||||||||
| Total revenues | 387,662 | 524,056 | (136,394) | |||||||||||||||||
| Expenses: | ||||||||||||||||||||
| Cost of sales-excluding impact of derivatives | 344,075 | 467,044 | (122,969) | |||||||||||||||||
| Cost of sales-derivative gain-unrealized | (1,444) | (5,992) | 4,548 | |||||||||||||||||
| Cost of sales-derivative (gain) loss-realized | (232) | 789 | (1,021) | |||||||||||||||||
| Operating expenses | 18,953 | 19,590 | (637) | |||||||||||||||||
| General and administrative expenses | 1,362 | 1,382 | (20) | |||||||||||||||||
| Depreciation and amortization expense | 12,128 | 12,726 | (598) | |||||||||||||||||
| Loss (gain) on disposal or impairment of assets, net | 3,924 | (412) | 4,336 | |||||||||||||||||
| Total expenses | 378,766 | 495,127 | (116,361) | |||||||||||||||||
| Segment operating income | $ | 8,896 | $ | 28,929 | $ | (20,033) | ||||||||||||||
| Adjusted EBITDA - Continuing Operations (1) | $ | 26,136 | $ | 35,898 | $ | (9,762) | ||||||||||||||
| Crude oil sold (barrels) | 5,597 | 6,042 | (445) | |||||||||||||||||
| Crude oil transported on owned pipelines (barrels) | 11,623 | 11,520 | 103 | |||||||||||||||||
| Crude oil storage capacity - owned and leased (barrels) (2) | 5,232 | 5,232 | - | |||||||||||||||||
| Crude oil storage capacity leased to third-parties (barrels) (2) | 1,650 | 1,650 | - | |||||||||||||||||
| Crude oil inventory (barrels) (2) | 712 | 450 | 262 | |||||||||||||||||
| Crude oil sold ($/barrel) | $ | 66.170 | $ | 80.705 | $ | (14.535) | ||||||||||||||
| Cost per crude oil sold ($/barrel) (3) | $ | 61.475 | $ | 77.300 | $ | (15.825) | ||||||||||||||
| Crude oil product margin ($/barrel) (3) | $ | 4.695 | $ | 3.405 | $ | 1.290 | ||||||||||||||
(1) See Adjusted EBITDA definition and reconciliation in "Non-GAAP Financial Measures" section below.
(2) Information is presented as of September 30, 2025 and September 30, 2024, respectively.
(3) Cost and product margin per barrel excludes the impact of derivatives.
Crude Oil Sales and Cost of Sales-Excluding Impact of Derivatives. The decreases in sales and cost of sales, excluding the impact of derivatives, were primarily due to lower commodity prices partially offset by higher production on acreage dedicated to us in the DJ Basin during the six months ended September 30, 2025, compared to the six months ended September 30, 2024.
During the six months ended September 30, 2025, the crude oil product margin and margin per barrel increased compared to the six months ended September 30, 2024 due to lower transportation costs. In addition, there was a more significant decrease in market prices during the six months ended September 30, 2024, thus also contributing to a smaller margin per barrel for that period. Crude oil product margin calculations do not include gains and losses from derivatives that may offset the movement in the physical margin.
Crude Oil Transportation and Other Sales. The decrease was primarily due to lower pipeline revenue because of the expiration of certain transportation services contracts on third-party pipelines and lower rental revenue due to the sale of our railcars.
During the six months ended September 30, 2025, physical volumes on the Grand Mesa Pipeline averaged approximately 64,000 barrels per day, compared to approximately 63,000 barrels per day during the six months ended September 30, 2024. Higher contracted volumes were shipped on the Grand Mesa Pipeline due to higher production on acreage dedicated to us in the DJ Basin.
Operating and General and Administrative Expenses. The decrease was primarily due to lower incentive compensation expense accrued during the six months ended September 30, 2025, and lower ad valorem taxes due to lower assessed values on our Grand Mesa Pipeline assets in the State of Colorado, which were partially offset by higher utilities expense on the Grand Mesa Pipeline from higher volumes flowing through the system during the six months ended September 30, 2025, compared to the six months ended September 30, 2024.
Depreciation and Amortization Expense. The decrease was primarily due to the sale of railcars during the year ended March 31, 2025 and the six months ended September 30, 2025.
Loss (Gain) on Disposal or Impairment of Assets, Net. During the six months ended September 30, 2025, we recorded a loss from the sale of linefill held on third-party pipelines of $5.9 million, which includes a loss from derivatives of $1.8 million from hedging transactions relating to the sale of linefill barrels. We also recorded of loss of $0.3 million related to the retirement of certain assets. In addition, we recorded a gain of $2.2 million from the sale of railcars during the six months ended September 30, 2025. During the six months ended September 30, 2024, we recorded a net gain of $0.4 million primarily due to a gain on the sale of certain assets.
Liquids Logistics
The following table summarizes the operating results of our Liquids Logistics segment for the periods indicated. As discussed above, the operating results of our refined products and biodiesel businesses have been classified as discontinued operations and prior periods have been retrospectively adjusted.
| Six Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | Change | ||||||||||||||||||
| (in thousands, except per gallon amounts) | ||||||||||||||||||||
| Butane: | ||||||||||||||||||||
| Sales | $ | 213,737 | $ | 221,720 | $ | (7,983) | ||||||||||||||
| Cost of sales-excluding impact of derivatives | 199,131 | 209,404 | (10,273) | |||||||||||||||||
| Cost of sales-derivative (gain) loss-unrealized | (36) | 7,649 | (7,685) | |||||||||||||||||
| Cost of sales-derivative gain-realized | (1,332) | (67) | (1,265) | |||||||||||||||||
| Product margin | 15,974 | 4,734 | 11,240 | |||||||||||||||||
| Propane: | ||||||||||||||||||||
| Sales | 93,399 | 188,436 | (95,037) | |||||||||||||||||
| Cost of sales-excluding impact of derivatives | 91,250 | 185,501 | (94,251) | |||||||||||||||||
| Cost of sales-derivative (gain) loss-unrealized | (1,104) | 6,354 | (7,458) | |||||||||||||||||
| Cost of sales-derivative gain-realized | (1,074) | (8,107) | 7,033 | |||||||||||||||||
| Product margin | 4,327 | 4,688 | (361) | |||||||||||||||||
| Other products: | ||||||||||||||||||||
| Sales | 187,534 | 208,837 | (21,303) | |||||||||||||||||
| Cost of sales-excluding impact of derivatives | 176,471 | 198,522 | (22,051) | |||||||||||||||||
| Cost of sales-derivative loss (gain)-unrealized | 16 | (14) | 30 | |||||||||||||||||
| Cost of sales-derivative gain-realized | (84) | (96) | 12 | |||||||||||||||||
| Product margin | 11,131 | 10,425 | 706 | |||||||||||||||||
| Service: | ||||||||||||||||||||
| Sales | 3,067 | 9,502 | (6,435) | |||||||||||||||||
| Cost of sales | 733 | 996 | (263) | |||||||||||||||||
| Product margin | 2,334 | 8,506 | (6,172) | |||||||||||||||||
| Expenses: | ||||||||||||||||||||
| Operating expenses | 14,894 | 21,927 | (7,033) | |||||||||||||||||
| General and administrative expenses | 1,510 | 3,498 | (1,988) | |||||||||||||||||
| Depreciation and amortization expense | 3,107 | 4,721 | (1,614) | |||||||||||||||||
| Gain on disposal or impairment of assets, net | (15,823) | - | (15,823) | |||||||||||||||||
| Total expenses | 3,688 | 30,146 | (26,458) | |||||||||||||||||
| Segment operating income (loss) | $ | 30,078 | $ | (1,793) | $ | 31,871 | ||||||||||||||
| Adjusted EBITDA - Continuing Operations (1) | $ | 13,392 | $ | 17,115 | $ | (3,723) | ||||||||||||||
| Six Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | Change | ||||||||||||||||||
| (in thousands, except per gallon amounts) | ||||||||||||||||||||
| Natural gas liquids storage capacity - owned and leased (gallons) (2) | 49,571 | 116,531 | (66,960) | |||||||||||||||||
| Butane sold (gallons) | 208,380 | 204,972 | 3,408 | |||||||||||||||||
| Butane sold ($/gallon) | $ | 1.026 | $ | 1.082 | $ | (0.056) | ||||||||||||||
| Cost per butane sold ($/gallon) (3) | $ | 0.956 | $ | 1.022 | $ | (0.066) | ||||||||||||||
| Butane product margin ($/gallon) (3) | $ | 0.070 | $ | 0.060 | $ | 0.010 | ||||||||||||||
| Butane inventory (gallons) (2) | 54,976 | 81,441 | (26,465) | |||||||||||||||||
| Propane sold (gallons) | 104,080 | 221,093 | (117,013) | |||||||||||||||||
| Propane sold ($/gallon) | $ | 0.897 | $ | 0.852 | $ | 0.045 | ||||||||||||||
| Cost per propane sold ($/gallon) (3) | $ | 0.877 | $ | 0.839 | $ | 0.038 | ||||||||||||||
| Propane product margin ($/gallon) (3) | $ | 0.020 | $ | 0.013 | $ | 0.007 | ||||||||||||||
| Propane inventory (gallons) (2) | 18,071 | 80,323 | (62,252) | |||||||||||||||||
| Other products sold (gallons) | 145,774 | 136,663 | 9,111 | |||||||||||||||||
| Other products sold ($/gallon) | $ | 1.286 | $ | 1.528 | $ | (0.242) | ||||||||||||||
| Cost per other products sold ($/gallon) (3) | $ | 1.211 | $ | 1.453 | $ | (0.242) | ||||||||||||||
| Other products product margin (loss) ($/gallon) (3) | $ | 0.075 | $ | 0.075 | $ | - | ||||||||||||||
| Other products inventory (gallons) (2) | 4,849 | 5,254 | (405) | |||||||||||||||||
(1) See Adjusted EBITDA definition and reconciliation in "Non-GAAP Financial Measures" section below.
(2) Information is presented as of September 30, 2025 and September 30, 2024, respectively.
(3) Cost and product margin per gallon excludes the impact of derivatives.
Butane Sales and Cost of Sales-Excluding Impact of Derivatives.The decreases in sales and cost of sales, excluding the impact of derivatives, during the six months ended September 30, 2025, compared to the six months ended September 30, 2024 were primarily due to lower butane prices during the six months ended September 30, 2025, compared to the six months ended September 30, 2024.
Butane product margins, excluding the impact of derivatives, increased during the six months ended September 30, 2025, compared to the six months ended September 30, 2024 due to improved rail utilization and supply optimization.
Propane Sales and Cost of Sales-Excluding Impact of Derivatives.The decreases in sales and cost of sales, excluding the impact of derivatives, were due primarily to the Wholesale Propane Disposition.
Propane product margins, excluding the impact of derivatives, decreased during the six months ended September 30, 2025 primarily due to the negative margin from our wholesale propane business prior to the Wholesale Propane Disposition on April 30, 2025, as higher-priced inventory was sold into a declining market.
Other Products Sales and Cost of Sales-Excluding Impact of Derivatives. The decreases in sales and cost of sales, excluding the impact of derivatives, were primarily due to decreased commodity prices during the six months ended September 30, 2025, compared to the six months ended September 30, 2024.
Other products sales product margins, excluding the impact of derivatives, increased during the six months ended September 30, 2025 primarily due to increased sales volumes for asphalt and isobutane in the current year which was partially offset by lower commodity prices.
Service Sales and Cost of Sales.The sales include storage, terminaling and transportation services income. Sales and cost of sales decreased during the six months ended September 30, 2025 due to the Wholesale Propane Disposition and the expiration of a throughput agreement in the prior fiscal year.
Operating and General and Administrative Expenses. The decrease during the six months ended September 30, 2025 compared to the six months ended September 30, 2024 was due to the Wholesale Propane Disposition.
Depreciation and Amortization Expense. The decrease during the six months ended September 30, 2025 compared to
the six months ended September 30, 2024 was due to the Wholesale Propane Disposition.
Gain on Disposal or Impairment of Assets, Net.During the six months ended September 30, 2025, we recorded a net gain of $17.3 million due to the Wholesale Propane Disposition. We also recorded a net loss of $1.6 million related to the impairment of certain right-of-use assets.
Corporate and Other
The operating loss within "Corporate and Other" includes the following components for the periods indicated:
| Six Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | Change | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Other revenues: | ||||||||||||||||||||
| Service revenues | $ | 415 | $ | 74 | $ | 341 | ||||||||||||||
| Expenses: | ||||||||||||||||||||
| General and administrative expenses | 23,273 | 19,470 | 3,803 | |||||||||||||||||
| Depreciation and amortization expense | 1,718 | 1,357 | 361 | |||||||||||||||||
| Gain on disposal or impairment of assets, net | (2) | - | (2) | |||||||||||||||||
| Total expenses | 24,989 | 20,827 | 4,162 | |||||||||||||||||
| Operating loss | $ | (24,574) | $ | (20,753) | $ | (3,821) | ||||||||||||||
| Adjusted EBITDA - Continuing Operations (1) | $ | (22,994) | $ | (19,444) | $ | (3,550) | ||||||||||||||
(1) See Adjusted EBITDA definition and reconciliation in "Non-GAAP Financial Measures" section below.
Service Revenues.These revenues relate to billings to the noncontrolling interest holders for usage of the airplanes acquired in June and October 2024.
General and Administrative Expenses. The expenses during the six months ended September 30, 2025 increased by $3.8 million due to lower legal expenses in the prior year due to a reimbursement of legal expenses related to a dispute associated with commercial activities and lower business expense in the prior year period due to the receipt of credits.
Depreciation and Amortization Expense. The increase during the six months ended September 30, 2025 was due to depreciation of the two airplanes put into service during the year ended March 31, 2025.
Interest Expense
The following table summarizes the components of our consolidated interest expense for the periods indicated:
| Six Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | Change | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Senior secured notes | $ | 90,363 | $ | 91,000 | $ | (637) | ||||||||||||||
| Term Loan B | 28,356 | 34,052 | (5,696) | |||||||||||||||||
| ABL Facility | 3,899 | 9,545 | (5,646) | |||||||||||||||||
| Other indebtedness | 1,063 | 904 | 159 | |||||||||||||||||
| Total debt interest expense | 123,681 | 135,501 | (11,820) | |||||||||||||||||
| Amortization of debt issuance costs | 6,253 | 5,775 | 478 | |||||||||||||||||
| Unrealized loss on interest rate swaps | 782 | 7,473 | (6,691) | |||||||||||||||||
| Realized gain on interest rate swaps | (463) | (1,830) | 1,367 | |||||||||||||||||
| Total interest expense | $ | 130,253 | $ | 146,919 | $ | (16,666) | ||||||||||||||
The debt interest expense decreased $11.8 million during the six months ended September 30, 2025 primarily due to lower interest rates on the Term Loan B and a lower weighted average daily balance on the ABL Facility for the six months ended September 30, 2025 compared to our outstanding debt instruments in the prior year period.
Non-GAAP Financial Measures
In addition to financial results reported in accordance with accounting principles generally accepted in the United States ("GAAP"), we have provided the non-GAAP financial measures of EBITDA and Adjusted EBITDA. These non-GAAP financial measures are not intended to be a substitute for those reported in accordance with GAAP. These measures may be different from non-GAAP financial measures used by other entities, even when similar terms are used to identify such 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, revaluation of liabilities and other. EBITDA and Adjusted EBITDA should not be considered as alternatives to net income, income from continuing operations before income taxes, cash flows from operating activities, or any other measure of financial performance calculated in accordance with GAAP, as those items are used to measure operating performance, liquidity or the ability to service debt obligations. We believe that EBITDA provides additional information to investors for evaluating our ability to make quarterly distributions to our unitholders and is presented solely as a supplemental measure. We believe that Adjusted EBITDA provides additional information to investors for evaluating our financial performance without regard to our financing methods, capital structure and historical cost basis. Further, EBITDA and Adjusted EBITDA, as we define them, may not be comparable to EBITDA, Adjusted EBITDA, or similarly titled measures used by other entities.
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.
The following table reconciles net income to EBITDA and Adjusted EBITDA for the periods indicated:
| Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| Net income | $ | 29,821 | $ | 3,391 | $ | 99,465 | $ | 13,866 | ||||||||||||||||||
| Less: Net income from continuing operations attributable to nonredeemable noncontrolling interests | (490) | (932) | (1,195) | (1,724) | ||||||||||||||||||||||
| Less: Net income from continuing operations attributable to redeemable noncontrolling interests | (47) | (5) | (64) | (5) | ||||||||||||||||||||||
| Net income attributable to NGL Energy Partners LP | 29,284 | 2,454 | 98,206 | 12,137 | ||||||||||||||||||||||
| Interest expense | 64,687 | 77,391 | 130,212 | 147,129 | ||||||||||||||||||||||
| Income tax (benefit) expense | (45) | 278 | (227) | (4,518) | ||||||||||||||||||||||
| Depreciation and amortization | 63,222 | 61,546 | 129,048 | 123,395 | ||||||||||||||||||||||
| EBITDA | 157,148 | 141,669 | 357,239 | 278,143 | ||||||||||||||||||||||
| Net unrealized (gains) losses on derivatives | (317) | 5,632 | (7,857) | 23,588 | ||||||||||||||||||||||
| Lower of cost or net realizable value adjustments (1) | 2,519 | (901) | (425) | (1,231) | ||||||||||||||||||||||
| Loss (gain) on disposal or impairment of assets, net (2) | 6,595 | 1,515 | (40,984) | (9,151) | ||||||||||||||||||||||
| Gain on early extinguishment of liabilities, net | - | - | (1,492) | - | ||||||||||||||||||||||
| Other (3) | 1,436 | (645) | 5,867 | 263 | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 167,381 | $ | 147,270 | $ | 312,348 | $ | 291,612 | ||||||||||||||||||
| Adjusted EBITDA - Discontinued Operations (4) | $ | 48 | $ | (2,144) | $ | 1,043 | $ | 3,578 | ||||||||||||||||||
| Adjusted EBITDA - Continuing Operations | $ | 167,333 | $ | 149,414 | $ | 311,305 | $ | 288,034 | ||||||||||||||||||
(1) Lower of cost or net realizable value adjustments in the table above differ from lower of cost or net realizable value adjustments reported in our unaudited condensed consolidated statements of cash flows, as the amounts reported in the table above represent the change in lower of cost or net realizable value adjustments recorded in the unaudited condensed consolidated statements of operations, which includes reversals, whereas the amounts reported in our unaudited condensed consolidated statements of cash flows represent the lower of cost or net realizable value adjustments recorded at the balance sheet date.
(2) Excludes amounts related to unconsolidated entities and noncontrolling interests.
(3) Amounts represent accretion expense for asset retirement obligations, expenses incurred related to legal and advisory costs associated with acquisitions and dispositions, unrealized gains and losses on investments and marketable securities and a loss from a legal dispute.
(4) Amounts include our refined products and biodiesel businesses.
The following tables reconcile depreciation and amortization amounts per the EBITDA table above to depreciation and amortization amounts in our unaudited condensed consolidated statements of operations and unaudited condensed consolidated statements of cash flows for the periods indicated:
| Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| Depreciation and amortization per EBITDA table | $ | 63,222 | $ | 61,546 | $ | 129,048 | $ | 123,395 | ||||||||||||||||||
| Intangible asset amortization recorded to cost of sales | - | (37) | - | (37) | ||||||||||||||||||||||
| Depreciation and amortization attributable to unconsolidated entities | - | (108) | (24) | (179) | ||||||||||||||||||||||
| Depreciation and amortization attributable to noncontrolling interests | 772 | 595 | 1,555 | 1,101 | ||||||||||||||||||||||
| Depreciation and amortization attributable to discontinued operations | - | (121) | - | (241) | ||||||||||||||||||||||
| Depreciation and amortization per unaudited condensed consolidated statements of operations | $ | 63,994 | $ | 61,875 | $ | 130,579 | $ | 124,039 | ||||||||||||||||||
| Six Months Ended September 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (in thousands) | ||||||||||||||
| Depreciation and amortization per EBITDA table | $ | 129,048 | $ | 123,395 | ||||||||||
| Amortization of debt issuance costs recorded to interest expense | 6,253 | 5,775 | ||||||||||||
| Amortization of royalty expense recorded to operating expense | 123 | 123 | ||||||||||||
| Depreciation and amortization attributable to unconsolidated entities | (24) | (179) | ||||||||||||
| Depreciation and amortization attributable to noncontrolling interests | 1,555 | 1,101 | ||||||||||||
| Depreciation and amortization attributable to discontinued operations | - | (241) | ||||||||||||
| Depreciation and amortization per unaudited condensed consolidated statements of cash flows | $ | 136,955 | $ | 129,974 | ||||||||||
The following table summarizes additional amounts attributable to discontinued operations in the EBITDA and Adjusted EBITDA table above for the periods indicated:
| Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| Income tax expense | $ | 16 | $ | 104 | $ | 16 | $ | 107 | ||||||||||||||||||
| Net unrealized losses (gains) on derivatives | $ | - | $ | 3,022 | $ | (15) | $ | 16,066 | ||||||||||||||||||
| Lower of cost or realizable value adjustments | $ | - | $ | (1,513) | $ | - | $ | (1,830) | ||||||||||||||||||
| Loss (gain) on disposal or impairment of assets, net | $ | 3 | $ | - | $ | (38,370) | $ | - | ||||||||||||||||||
The following tables reconcile operating income (loss) to Adjusted EBITDA by segment for the periods indicated:
| Three Months Ended September 30, 2025 | |||||||||||||||||||||||||||||||||||||||||
|
Water Solutions |
Crude Oil Logistics |
Liquids Logistics |
Corporate and Other |
Continuing Operations | Discontinued Operations | Consolidated | |||||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | 92,354 | $ | 8,224 | $ | 6,346 | $ | (12,673) | $ | 94,251 | $ | - | $ | 94,251 | |||||||||||||||||||||||||||
| Depreciation and amortization | 55,550 | 6,063 | 1,540 | 841 | 63,994 | - | 63,994 | ||||||||||||||||||||||||||||||||||
| Net unrealized (gains) losses on derivatives | (1,760) | (312) | 1,755 | - | (317) | - | (317) | ||||||||||||||||||||||||||||||||||
| Lower of cost or net realizable value adjustments | - | 2,519 | - | - | 2,519 | - | 2,519 | ||||||||||||||||||||||||||||||||||
| Loss (gain) on disposal or impairment of assets, net | 5,760 | 3 | 832 | (1) | 6,594 | - | 6,594 | ||||||||||||||||||||||||||||||||||
| Other income (expense), net | 33 | - | (18) | 193 | 208 | - | 208 | ||||||||||||||||||||||||||||||||||
| Adjusted EBITDA attributable to noncontrolling interests | (1,259) | - | - | (98) | (1,357) | - | (1,357) | ||||||||||||||||||||||||||||||||||
| Other | 1,224 | 56 | 66 | 95 | 1,441 | - | 1,441 | ||||||||||||||||||||||||||||||||||
| Discontinued operations | - | - | - | - | - | 48 | 48 | ||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 151,902 | $ | 16,553 | $ | 10,521 | $ | (11,643) | $ | 167,333 | $ | 48 | $ | 167,381 | |||||||||||||||||||||||||||
| Three Months Ended September 30, 2024 | |||||||||||||||||||||||||||||||||||||||||
|
Water Solutions |
Crude Oil Logistics |
Liquids Logistics |
Corporate and Other |
Continuing Operations | Discontinued Operations | Consolidated | |||||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | 72,829 | $ | 14,840 | $ | 2,629 | $ | (8,807) | $ | 81,491 | $ | - | $ | 81,491 | |||||||||||||||||||||||||||
| Depreciation and amortization | 52,523 | 6,285 | 2,365 | 702 | 61,875 | - | 61,875 | ||||||||||||||||||||||||||||||||||
| Amortization in cost of sales-product | - | - | 37 | - | 37 | - | 37 | ||||||||||||||||||||||||||||||||||
| Net unrealized losses (gains) on derivatives | 388 | (4,012) | 6,234 | - | 2,610 | - | 2,610 | ||||||||||||||||||||||||||||||||||
| Lower of cost or net realizable value adjustments | - | 540 | 72 | - | 612 | - | 612 | ||||||||||||||||||||||||||||||||||
| Loss (gain) on disposal or impairment of assets, net | 1,951 | (442) | - | - | 1,509 | - | 1,509 | ||||||||||||||||||||||||||||||||||
| Other income (expense), net | 1,805 | (1) | - | 30 | 1,834 | - | 1,834 | ||||||||||||||||||||||||||||||||||
| Adjusted EBITDA attributable to unconsolidated entities | 1,649 | - | (19) | - | 1,630 | - | 1,630 | ||||||||||||||||||||||||||||||||||
| Adjusted EBITDA attributable to noncontrolling interests | (1,522) | - | - | (34) | (1,556) | - | (1,556) | ||||||||||||||||||||||||||||||||||
| Other | (761) | 53 | 61 | 19 | (628) | - | (628) | ||||||||||||||||||||||||||||||||||
| Discontinued operations | - | - | - | - | - | (2,144) | (2,144) | ||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 128,862 | $ | 17,263 | $ | 11,379 | $ | (8,090) | $ | 149,414 | $ | (2,144) | $ | 147,270 | |||||||||||||||||||||||||||
| Six Months Ended September 30, 2025 | |||||||||||||||||||||||||||||||||||||||||
|
Water Solutions |
Crude Oil Logistics |
Liquids Logistics |
Corporate and Other |
Continuing Operations | Discontinued Operations | Consolidated | |||||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | 177,301 | $ | 8,896 | $ | 30,078 | $ | (24,574) | $ | 191,701 | $ | - | $ | 191,701 | |||||||||||||||||||||||||||
| Depreciation and amortization | 113,626 | 12,128 | 3,107 | 1,718 | 130,579 | - | 130,579 | ||||||||||||||||||||||||||||||||||
| Net unrealized gains on derivatives | (5,274) | (1,444) | (1,124) | - | (7,842) | - | (7,842) | ||||||||||||||||||||||||||||||||||
| Lower of cost or net realizable value adjustments | - | 2,519 | (2,944) | - | (425) | - | (425) | ||||||||||||||||||||||||||||||||||
| Loss (gain) on disposal or impairment of assets, net | 9,296 | 3,924 | (15,823) | (2) | (2,605) | - | (2,605) | ||||||||||||||||||||||||||||||||||
| Other (expense) income, net | (100) | 1 | (346) | (2,862) | (3,307) | - | (3,307) | ||||||||||||||||||||||||||||||||||
| Adjusted EBITDA attributable to unconsolidated entities | 221 | - | 4 | - | 225 | - | 225 | ||||||||||||||||||||||||||||||||||
| Adjusted EBITDA attributable to noncontrolling interests | (2,744) | - | - | (166) | (2,910) | - | (2,910) | ||||||||||||||||||||||||||||||||||
| Other | 2,445 | 112 | 440 | 2,892 | 5,889 | - | 5,889 | ||||||||||||||||||||||||||||||||||
| Discontinued operations | - | - | - | - | - | 1,043 | 1,043 | ||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 294,771 | $ | 26,136 | $ | 13,392 | $ | (22,994) | $ | 311,305 | $ | 1,043 | $ | 312,348 | |||||||||||||||||||||||||||
| Six Months Ended September 30, 2024 | |||||||||||||||||||||||||||||||||||||||||
|
Water Solutions |
Crude Oil Logistics |
Liquids Logistics |
Corporate and Other |
Continuing Operations | Discontinued Operations | Consolidated | |||||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | 157,187 | $ | 28,929 | $ | (1,793) | $ | (20,753) | $ | 163,570 | $ | - | $ | 163,570 | |||||||||||||||||||||||||||
| Depreciation and amortization | 105,235 | 12,726 | 4,721 | 1,357 | 124,039 | - | 124,039 | ||||||||||||||||||||||||||||||||||
| Amortization in cost of sales-product | - | - | 37 | - | 37 | - | 37 | ||||||||||||||||||||||||||||||||||
| Net unrealized (gains) losses on derivatives | (473) | (5,992) | 13,987 | - | 7,522 | - | 7,522 | ||||||||||||||||||||||||||||||||||
| Lower of cost or net realizable value adjustments | - | 540 | 59 | - | 599 | - | 599 | ||||||||||||||||||||||||||||||||||
| Gain on disposal or impairment of assets, net | (8,745) | (412) | - | - | (9,157) | - | (9,157) | ||||||||||||||||||||||||||||||||||
| Other income, net | 1,911 | 1 | 19 | 67 | 1,998 | - | 1,998 | ||||||||||||||||||||||||||||||||||
| Adjusted EBITDA attributable to unconsolidated entities | 2,036 | - | (35) | - | 2,001 | - | 2,001 | ||||||||||||||||||||||||||||||||||
| Adjusted EBITDA attributable to noncontrolling interests | (2,836) | - | - | (34) | (2,870) | - | (2,870) | ||||||||||||||||||||||||||||||||||
| Other | 150 | 106 | 120 | (81) | 295 | - | 295 | ||||||||||||||||||||||||||||||||||
| Discontinued operations | - | - | - | - | - | 3,578 | 3,578 | ||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 254,465 | $ | 35,898 | $ | 17,115 | $ | (19,444) | $ | 288,034 | $ | 3,578 | $ | 291,612 | |||||||||||||||||||||||||||
Liquidity, Sources of Capital and Capital Resource Activities
General
Our principal sources of liquidity and capital resource requirements are cash flows from our operations, borrowings under our asset-based revolving credit facility ("ABL Facility"), issuing long-term notes, common and/or preferred units, loans from financial institutions, asset securitizations or asset sales. We expect our primary cash outflows to be related to capital expenditures, interest, repayment of debt maturities and distributions.
We believe that our anticipated cash flows from operations and the borrowing capacity under the ABL Facility will be sufficient to meet our liquidity needs. Our borrowing needs vary during the year due in part to the seasonal nature of certain businesses within our Liquids Logistics segment. Our greatest working capital borrowing needs generally occur during the period of June through December, when we are building our natural gas liquids inventories in anticipation of the butane blending and propane heating seasons. Our working capital borrowing needs generally decline during the period of January through March, when the cash inflows from our Liquids Logistics segment are the greatest. In addition, our working capital borrowing needs vary with changes in commodity prices. A significant increase in commodity prices could drive up our working capital demands and limit our ability to continue to delever our balance sheet and restrict our financial flexibility. To protect our liquidity and leverage, we have in the past and may in the future enter into economic hedges that mitigate this exposure when we are building inventory. There were no open hedge positions as of September 30, 2025.
Cash Management
We manage cash by utilizing a centralized cash management program that concentrates the cash assets of our operating subsidiaries in joint accounts for the purposes of providing financial flexibility and lowering the cost of borrowing, transaction costs and bank fees. Our centralized cash management program provides that funds in excess of the daily needs of our operating subsidiaries are concentrated, consolidated or otherwise made available for use within our consolidated group. All of our wholly-owned operating subsidiaries participate in this program. Under the cash management program, depending on whether a participating subsidiary has short-term cash surpluses or cash requirements, we provide cash to the subsidiary or the subsidiary provides cash to us.
Short-Term Liquidity
Our principal sources of short-term liquidity consist of cash flows from our operations and borrowings under the ABL Facility, which we believe will provide liquidity to operate our business, manage our working capital requirements and repay current maturities.
Total commitments under the ABL Facility are $475.0 million, subject to a borrowing base, and includes a sub-limit for letters of credit of $200.0 million. At September 30, 2025, $71.0 million was outstanding under the ABL Facility, letters of credit outstanding were $53.6 million and we had a borrowing base of $399.6 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.
For additional information related to the ABL Facility, see Note 6 to our unaudited condensed consolidated financial statements included in this Quarterly Report.
As of September 30, 2025, our current assets exceeded our current liabilities by approximately $147.6 million.
Long-Term Financing
We expect to fund our long-term financing requirements by issuing long-term notes, common units and/or preferred units, loans from financial institutions, asset securitizations or asset sales.
Senior Secured Notes
On February 2, 2024, we closed on our private offering of $900.0 million of 8.125% senior secured notes due 2029 ("2029 Senior Secured Notes") that mature on February 15, 2029 and $1.3 billion of 8.375% senior secured notes due 2032 ("2032 Senior Secured Notes") that mature on February 15, 2032. Interest on the 2029 Senior Secured Notes and 2032 Senior Secured Notes is payable on February 15, May 15, August 15 and November 15 of each year.
Term Loan B
On February 2, 2024, we entered into a new seven-year $700.0 million Term Loan B. The Term Loan B matures on February 2, 2031 and will amortize in equal quarterly installments in aggregate annual amounts equal to 1.0% of the original principal amount, with the balance payable on maturity. The amount outstanding at September 30, 2025 is $689.5 million.
For additional information related to our long-term debt, see Note 6 to our unaudited condensed consolidated financial statements included in this Quarterly Report.
Capital Expenditures, Acquisitions and Other Investments
The following table summarizes expansion, maintenance and other non-cash capital expenditures (which excludes additions for tank bottoms and linefill and has been prepared on the accrual basis), acquisitions and other investments for the periods indicated.
| Capital Expenditures | Other | |||||||||||||||||||||||||
| Expansion | Maintenance | Other (1) | Investments (2) | |||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| Three Months Ended September 30, | ||||||||||||||||||||||||||
| 2025 | $ | 39,570 | $ | 11,523 | $ | - | $ | - | ||||||||||||||||||
| 2024 | $ | 77,643 | $ | 16,572 | $ | - | $ | 106 | ||||||||||||||||||
| Six Months Ended September 30, | ||||||||||||||||||||||||||
| 2025 | $ | 49,523 | $ | 22,622 | $ | - | $ | - | ||||||||||||||||||
| 2024 | $ | 132,320 | $ | 39,376 | $ | 50 | $ | 106 | ||||||||||||||||||
(1) Amount for the six months ended September 30, 2024 is related to a transaction classified as an acquisition of assets in a prior period.
(2) Amounts for the three months and six months ended September 30, 2024 relate to contributions made to unconsolidated entities. There were no other investments during the three months and six months ended September 30, 2025.
There were no acquisitions during the three months or six months ended September 30, 2025 or 2024.
Capital expenditures for the fiscal year ending March 31, 2026 are expected to be approximately $205 million.
Distributions Declared
On September 18, 2025, the board of directors of our GP declared a cash distribution for the quarter ended September 30, 2025 to the holders of the Class B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units ("Class B Preferred Units"), the Class C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units ("Class C Preferred Units") and the 9.00% Class D Preferred Units ("Class D Preferred Units"). The total distribution of $26.1 million was made on October 15, 2025 to the holders of record at the close of trading on October 1, 2025.
The board of directors of our GP expects to evaluate the reinstatement of the common unit distributions in due course, taking into account a number of important factors, including our leverage, liquidity, the sustainability of cash flows, upcoming debt maturities, capital expenditures and the overall performance of our businesses.
For additional information related to the payment of distributions, see Note 8 to our unaudited condensed consolidated financial statements included in this Quarterly Report.
Contractual Obligations
Our contractual obligations primarily consist of purchase commitments, outstanding debt principal and interest obligations, lease obligations, asset retirement obligations and other commitments.
For a discussion of contractual obligations, see Note 6, Note 7 and Note 13 to our unaudited condensed consolidated financial statements included in this Quarterly Report.
Sources (Uses) of Cash
The following table summarizes the sources (uses) of cash and cash equivalents for the periods indicated related to continuing operations (see the footnotes to our unaudited condensed consolidated financial statements included in this Quarterly Report for the footnotes referenced in the table):
| Cash Flow | Six Months Ended September 30, | ||||||||||||||||
| Category | 2025 | 2024 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Sources of cash and cash equivalents: | |||||||||||||||||
| Net cash provided by operating activities-continuing operations | Operating | $ | 58,160 | $ | - | ||||||||||||
|
Proceeds from divestitures of businesses and investments, net (see Note 15)
|
Investing | 88,639 | 68,500 | ||||||||||||||
|
Proceeds from sales of assets (see Note 15)
|
Investing | 72,529 | 18,556 | ||||||||||||||
|
Net settlements of derivatives (see Note 9)
|
Investing | 3,847 | 4,516 | ||||||||||||||
|
Net proceeds from borrowings under ABL Facility (see Note 6)
|
Financing | - | 274,000 | ||||||||||||||
|
Proceeds from borrowings on other long-term debt (see Note 6)
|
Financing | - | 6,360 | ||||||||||||||
| Uses of cash and cash equivalents: | |||||||||||||||||
| Net cash used in operating activities-continuing operations | Operating | - | (35,215) | ||||||||||||||
|
Class D preferred unit repurchases (see Note 8)
|
Financing | (100,010) | - | ||||||||||||||
|
Distributions to preferred unitholders (see Note 8)
|
Financing | (57,689) | (245,604) | ||||||||||||||
|
Capital expenditures (see Note 10)
|
Investing | (53,066) | (149,545) | ||||||||||||||
|
Net payments on borrowings under ABL Facility (see Note 6)
|
Financing | (38,000) | - | ||||||||||||||
|
Common unit repurchases and cancellations (see Note 8)
|
Financing | (29,068) | (2,126) | ||||||||||||||
|
Repayment and repurchase of senior secured notes (see Note 6)
|
Financing | (17,274) | - | ||||||||||||||
|
Payments on Term Loan B (see Note 6)
|
Financing | (3,500) | (3,500) | ||||||||||||||
| Other sources / (uses) - net | Investing and Financing | (4,760) | (2,459) | ||||||||||||||
| Net decrease in cash and cash equivalents-continuing operations | $ | (80,192) | $ | (66,517) | |||||||||||||
Operating Activities-Continuing Operations.The increase in net cash provided by operating activities during the six months ended September 30, 2025 was due primarily to higher earnings from operations as well as fluctuations in working capital, particularly accounts receivable and accounts payable, due to lower crude oil volumes and lower crude oil prices, lower purchases and sales of natural gas liquids due to the Wholesale Propane Disposition and the timing of invoices and payments on construction projects as well as fluctuations in inventory due to building our natural gas liquids inventories in anticipation of the butane blending and heating seasons. Also, on June 13, 2024, we paid LCT Capital, LLC ("LCT") $63.3 million related to the legal judgment against us, of which $27.2 million represented interest and $0.1 million of costs awarded to LCT.
Environmental Legislation
See our Annual Report for a discussion of proposed environmental legislation and regulations that, if enacted, could result in increased compliance and operating costs. However, at this time we cannot predict the structure or outcome of any future legislation or regulations or the eventual cost we could incur in compliance.
Recent Accounting Pronouncements
For a discussion of recent accounting pronouncements that are applicable to us, see Note 2 to our unaudited condensed consolidated financial statements included in this Quarterly Report.
Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity with GAAP requires the selection and application of appropriate accounting principles to the relevant facts and circumstances of our operations and the use of estimates made by management. We have identified certain more critical judgment areas in the application of our accounting policies that are most important to the portrayal of our consolidated financial position and results of operations. The application of these accounting policies, which requires subjective or complex judgments regarding estimates and projected outcomes of
future events, and changes in these accounting policies, could have a material effect on our consolidated financial statements. There have been no material changes in the critical accounting estimates previously disclosed in our Annual Report.
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