NGL Energy Partners LP Announces Second Quarter Fiscal 2024 Financial Results

TULSA, Okla.--(BUSINESS WIRE)--NGL Energy Partners LP (NYSE:NGL) ("NGL," "our," "we," or the "Partnership") today reported its second quarter Fiscal 2024 financial results. Highlights include:

• Net income for the second quarter of Fiscal 2024 of $28.3 million, compared to net income of $3.6 million for the second quarter of Fiscal 2023
• Adjusted EBITDA⁽¹⁾ for the second quarter of Fiscal 2024 of $176.2 million, compared to $142.2 million for the second quarter of Fiscal 2023
• Produced water volumes processed of approximately 2.44 million barrels per day during the second quarter of Fiscal 2024, growing 7.7% from the second quarter of Fiscal 2023. Including minimum volume commitment payments, the Partnership received revenue on an additional 20.8 million barrels in the second quarter of Fiscal 2024
• Record Water Solutions' quarterly Adjusted EBITDA⁽¹⁾ of $140.4 million for the second quarter of Fiscal 2024, a 34.0% increase compared to the second quarter of Fiscal 2023
• Total leverage at the end of the quarter was 4.14 times, versus 6.11 times at the end of the second quarter of Fiscal 2023

"Our Water Solutions segment continues to outperform, so we are increasing our Fiscal 2024 Adjusted EBITDA⁽²⁾ guidance for this segment to $500 million plus. The significant reduction in total leverage should provide the financial flexibility to deal with our capital structure. Currently, we are reducing indebtedness on our ABL Facility, rather than the 2025 unsecured notes, as it is our highest cost of debt. We will continue to utilize operational free cash flow, reduced working capital, and asset sale proceeds to further improve the balance sheet. We are reaffirming our full year consolidated Adjusted EBITDA⁽²⁾ guidance of $645 million plus rather than increasing it commensurate with the Water Solutions' increase as we are anticipating asset sales plus uncertainty around the Liquid Logistics segment's performance in the face of a potentially warmer than normal winter." stated Mike Krimbill NGL's CEO.

(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.
(2) Certain of the forward-looking financial measures are provided on a non-GAAP basis. A reconciliation of forward-looking financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP is potentially misleading and not practical given the difficulty of projecting event driven transactional and other non-core operating items in any future period. The magnitude of these items, however, may be significant.

Quarterly Results of Operations

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

		Quarter Ended
		September 30, 2023								September 30, 2022
		Operating Income (Loss)				Adjusted EBITDA(1)				Operating Income (Loss)				Adjusted EBITDA(1)
		(in thousands)
Water Solutions		$	59,118			$	140,389			$	47,128			$	104,774
Crude Oil Logistics			14,778				30,713				32,927				32,863
Liquids Logistics			23,577				17,086				1,653				16,513
Corporate and Other			(11,443	)			(11,974	)			(12,938	)			(11,908	)
Total		$	86,030			$	176,214			$	68,770			$	142,242

Water Solutions

Operating income for the Water Solutions segment increased $12.0 million for the quarter ended September 30, 2023, compared to the quarter ended September 30, 2022. The Partnership processed approximately 2.44 million barrels of produced water per day during the quarter ended September 30, 2023, a 7.7% increase when compared to approximately 2.27 million barrels of water per day processed during the quarter ended September 30, 2022. The increase was due primarily to higher produced water volumes processed from contracted customers mainly in the Delaware Basin, increased fees from new contracts entered into during fiscal year 2023 and higher fees charged for interruptible spot volumes. Also, there was an increase in payments made by certain producers for committed volumes not delivered. In addition, during July 2023, we entered into a transaction in which a portion of the total consideration received was allocated to revenue due to the termination of a minimum volume water disposal contract.

Revenues from recovered skim oil, including the impact from realized skim oil hedges, totaled $31.1 million for the quarter ended September 30, 2023, an increase of $6.9 million from the prior year period. The increase was due primarily to greater skim oil barrels sold as a result of higher skim oil recovered from increased produced water processed, and the sale during the current quarter of approximately 53,000 barrels of skim oil that were stored at the end of the prior quarter due to tighter pipeline specifications.

Operating expenses in the Water Solutions segment decreased $1.7 million for the quarter ended September 30, 2023, compared to the quarter ended September 30, 2022 due primarily to lower chemical expense and lower severance taxes as a result of a severance tax refund in September 2023 related to prior periods. Operating expense per produced barrel processed was $0.24 for the quarter ended September 30, 2023, compared to $0.27 in the comparative quarter last year.

Crude Oil Logistics

Operating income for the Crude Oil Logistics segment decreased $18.1 million for the quarter ended September 30, 2023, compared to the quarter ended September 30, 2022. The decrease was primarily due to net losses on derivative contracts of $15.4 million compared to net gains in the prior year of $27.8 million. Product margin for crude oil sales increased due to the selling of lower priced inventory into a rising price market. The decrease in operating income was offset by a decrease in expenses of $5.3 million primarily related to the sale of our marine assets on March 30, 2023. During the quarter ended September 30, 2023, physical volumes on the Grand Mesa Pipeline averaged approximately 70,000 barrels per day, compared to approximately 72,000 barrels per day for the quarter ended September 30, 2022.

Liquids Logistics

Operating income for the Liquids Logistics segment increased by $21.9 million for the quarter ended September 30, 2023, compared to the quarter ended September 30, 2022. The increase was primarily due to increased product margins (excluding the impact of derivatives) for propane and butane, offset by lower product margins for refined and other products. Propane margins increased due to our selling lower priced inventory into a market with rising prices. Butane product margins increased due to higher demand for butane blending for the quarter ended September 30, 2023. Margins for refined products declined as the supply issues in certain regions, resulting in higher margins, were resolved and supply and demand were more in balance. Margins for certain other products decreased due to an increase in supply in the market as the final renewable fuel standards mandate released by the EPA lowered the required amount of biodiesel required for blending. In addition, derivative gains increased by approximately $3.4 million and the sale of two propane terminals in July 2023 netted a gain of approximately $6.9 million.

Corporate and Other

The operating loss for Corporate and Other was lower by $1.5 million for the quarter ended September 30, 2023, compared to the quarter ended September 30, 2022. Results for the current period include gains from derivatives of $3.4 million as we have entered into economic hedges to protect our liquidity positions and leverage from a significant increase in commodity prices. These positions will expire between November 2023 and March 2024. The gains were partially offset by an increase in business insurance and legal expenses.

Capitalization and Liquidity

Total liquidity (cash plus available capacity on our asset-based revolving credit facility ("ABL Facility")) was approximately $307.7 million as of September 30, 2023. Borrowings on the Partnership's ABL Facility totaled approximately $156.0 million. The increase from March 31, 2023 was primarily due to increases in working capital balances driven by increased inventory volumes and higher net account receivable balances.

The Partnership is in compliance with all of its debt covenants and has no significant debt maturities before March 2025.

Second Quarter Conference Call Information

A conference call to discuss NGL's results of operations is scheduled for 4:00 pm Central Time on Thursday, November 9, 2023. Analysts, investors, and other interested parties may join the webcast via the event link: https://www.webcaster4.com/Webcast/Page/2808/49346 or by dialing [phone] and providing access code: 476458. An archived audio replay of the call will be available for 14 days, which can be accessed by dialing [phone] and providing replay passcode 49346.

Upcoming Events

Brad Cooper, NGL Energy Partners CFO, and other members of the management team will be attending the Bank of America Leverage Finance/Credit Conference in Boca Raton, FL on November 28, 2023 and the Wells Fargo Annual Midstream and Utilities Symposium in New York City, NY on December 6, 2023.

Non-GAAP Financial Measures

NGL defines EBITDA as net income (loss) attributable to NGL Energy Partners LP, plus interest expense, income tax expense (benefit), and depreciation and amortization expense. NGL defines 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, acquisition expense, revaluation of liabilities, certain legal settlements and other. NGL also includes in Adjusted EBITDA certain inventory valuation adjustments related to certain refined products businesses within NGL's Liquids Logistics segment as discussed below. EBITDA and Adjusted EBITDA should not be considered as alternatives to net income, 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. NGL believes that EBITDA provides additional information to investors for evaluating NGL's ability to make quarterly distributions to NGL's unitholders and is presented solely as a supplemental measure. NGL believes that Adjusted EBITDA provides additional information to investors for evaluating NGL's financial performance without regard to NGL's financing methods, capital structure and historical cost basis. Further, EBITDA and Adjusted EBITDA, as NGL defines them, may not be comparable to EBITDA, Adjusted EBITDA, or similarly titled measures used by other entities.

Other than for certain businesses within NGL's Liquids Logistics segment, for purposes of the Adjusted EBITDA calculation, NGL makes a distinction between realized and unrealized gains and losses on derivatives. During the period when a derivative contract is open, NGL records changes in the fair value of the derivative as an unrealized gain or loss. When a derivative contract matures or is settled, NGL reverses the previously recorded unrealized gain or loss and records a realized gain or loss. NGL does not draw such a distinction between realized and unrealized gains and losses on derivatives of certain businesses within NGL's 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. NGL includes 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 NGL's Crude Oil Logistics segment, they 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 NGL's contracts. To eliminate the volatility of the CMA Differential Roll, NGL 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 will differ from period to period depending on the current crude oil price and future estimated crude oil price which are valued utilizing third-party market quoted prices. NGL is recognizing in Adjusted EBITDA the gains and losses from the derivative instrument positions entered into in January 2021 to properly align with the physical margin NGL is hedging each month through the term of this transaction. This representation aligns with management's evaluation of the transaction.

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) 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.

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 limited partnership, is a diversified midstream energy company that transports, stores, markets and provides other logistics services for crude oil, natural gas liquids and other products and transports, treats and disposes of produced water generated as part of the oil and natural gas production process.

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

NGL ENERGY PARTNERS LP AND SUBSIDIARIES Unaudited Condensed Consolidated Balance Sheets (in Thousands, except unit amounts)
	September 30, 2023				March 31, 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	2,680			$	5,431
Accounts receivable-trade, net of allowance for expected credit losses of $1,840 and $1,964, respectively		1,157,710				1,033,956
Accounts receivable-affiliates		15,035				12,362
Inventories		250,572				142,607
Prepaid expenses and other current assets		137,585				98,089
Total current assets		1,563,582				1,292,445
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $908,595 and $898,184, respectively		2,166,103				2,223,380
GOODWILL		707,583				712,364
INTANGIBLE ASSETS, net of accumulated amortization of $406,653 and $580,860, respectively		1,016,820				1,058,668
INVESTMENTS IN UNCONSOLIDATED ENTITIES		20,900				21,090
OPERATING LEASE RIGHT-OF-USE ASSETS		95,231				90,220
OTHER NONCURRENT ASSETS		57,696				57,977
Total assets	$	5,627,915			$	5,456,144
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable-trade	$	1,080,673			$	927,591
Accounts payable-affiliates		44				65
Accrued expenses and other payables		164,115				133,616
Advance payments received from customers		29,239				14,699
Operating lease obligations		33,376				34,166
Total current liabilities		1,307,447				1,110,137
LONG-TERM DEBT, net of debt issuance costs of $24,385 and $30,117, respectively		2,782,262				2,857,805
OPERATING LEASE OBLIGATIONS		63,975				58,450
OTHER NONCURRENT LIABILITIES		107,945				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, 132,059 and 132,059 notional units, respectively		(52,572	)			(52,551	)
Limited partners, representing a 99.9% interest, 131,927,343 and 131,927,343 common units issued and outstanding, respectively		503,798				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		(473	)			(450	)
Noncontrolling interests		16,077				16,507
Total equity		815,189				767,429
Total liabilities and equity	$	5,627,915			$	5,456,144

NGL ENERGY PARTNERS LP AND SUBSIDIARIES Unaudited Condensed Consolidated Statements of Operations (in Thousands, except unit and per unit amounts)
		Three Months Ended September 30,								Six Months Ended September 30,
			2023				2022				2023				2022
REVENUES:
Water Solutions		$	197,244			$	164,910			$	378,546			$	330,989
Crude Oil Logistics			489,713				574,783				954,103				1,440,154
Liquids Logistics			1,154,139				1,269,754				2,124,551				2,735,687
Total Revenues			1,841,096				2,009,447				3,457,200				4,506,830
COST OF SALES:
Water Solutions			7,424				920				9,993				11,145
Crude Oil Logistics			454,927				514,199				880,226				1,336,569
Liquids Logistics			1,119,478				1,249,001				2,066,725				2,671,417
Corporate and Other			(3,381	)			-				833				-
Total Cost of Sales			1,578,448				1,764,120				2,957,777				4,019,131
OPERATING COSTS AND EXPENSES:
Operating			77,389				84,158				154,070				156,018
General and administrative			17,496				16,628				37,787				33,385
Depreciation and amortization			65,526				68,118				134,505				134,778
Loss on disposal or impairment of assets, net			16,207				7,653				15,011				7,485
Operating Income			86,030				68,770				158,050				156,033
OTHER INCOME (EXPENSE):
Equity in earnings of unconsolidated entities			851				1,207				942				1,881
Interest expense			(58,627	)			(68,297	)			(118,149	)			(135,608	)
Gain on early extinguishment of liabilities, net			63				2,479				6,871				4,141
Other income (expense), net			310				(15	)			616				631
Income Before Income Taxes			28,627				4,144				48,330				27,078
INCOME TAX EXPENSE			(342	)			(537	)			(482	)			(365	)
Net Income			28,285				3,607				47,848				26,713
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS			(257	)			(97	)			(519	)			(342	)
NET INCOME ATTRIBUTABLE TO NGL ENERGY PARTNERS LP		$	28,028			$	3,510			$	47,329			$	26,371
NET LOSS ALLOCATED TO COMMON UNITHOLDERS		$	(6,709	)		$	(26,899	)		$	(21,191	)		$	(31,578	)
BASIC AND DILUTED LOSS PER COMMON UNIT		$	(0.05	)		$	(0.21	)		$	(0.16	)		$	(0.24	)
BASIC WEIGHTED AVERAGE COMMON UNITS OUTSTANDING			131,927,343				130,695,970				131,927,343				130,695,970
DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING			131,927,343				130,695,970				131,927,343				130,695,970

EBITDA, ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW RECONCILIATION (Unaudited)
The following table reconciles NGL's net income to NGL's EBITDA, Adjusted EBITDA and Distributable Cash Flow for the periods indicated:
		Three Months Ended September 30,								Six Months Ended September 30,
			2023				2022				2023				2022
		(in thousands)
Net income		$	28,285			$	3,607			$	47,848			$	26,713
Less: Net income attributable to noncontrolling interests			(257	)			(97	)			(519	)			(342	)
Net income attributable to NGL Energy Partners LP			28,028				3,510				47,329				26,371
Interest expense			58,642				68,313				118,178				135,639
Income tax expense			342				537				482				365
Depreciation and amortization			65,502				68,103				134,423				134,717
EBITDA			152,514				140,463				300,412				297,092
Net unrealized losses (gains) on derivatives			9,691				(4,828	)			9,059				(61,730	)
CMA Differential Roll net losses (gains) (1)			2,233				(6,518	)			(6,904	)			28,102
Inventory valuation adjustment (2)			(6,436	)			(3,560	)			(6,100	)			(4,115	)
Lower of cost or net realizable value adjustments			1,080				10,143				3,844				857
Loss on disposal or impairment of assets, net			16,207				7,653				15,011				7,485
Gain on early extinguishment of liabilities, net			(63	)			(2,479	)			(6,871	)			(4,141	)
Equity-based compensation expense			410				479				884				976
Acquisition expense (3)			42				-				47				-
Other (4)			536				889				1,487				1,592
Adjusted EBITDA		$	176,214			$	142,242			$	310,869			$	266,118
Less: Cash interest expense (5)			54,483				64,096				109,894				127,221
Less: Income tax expense			342				537				482				365
Less: Maintenance capital expenditures			16,358				14,219				32,885				29,586
Less: CMA Differential Roll (6)			(7,352	)			(16,274	)			(18,047	)			1,934
Less: Other (7)			4				77				222				170
Distributable Cash Flow		$	112,379			$	79,587			$	185,433			$	106,842

(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 expenses we incurred related to legal and advisory costs associated with acquisitions.
(4)		Amounts represent unrealized gains/losses on marketable securities and accretion expense for asset retirement obligations. Also, the amount for the six months ended September 30, 2022 includes 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)		Amount represents 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 represents cash paid to settle asset retirement obligations.

ADJUSTED EBITDA RECONCILIATION BY SEGMENT
	Three Months Ended September 30, 2023
	Water Solutions				Crude Oil Logistics				Liquids Logistics				Corporate and Other				Consolidated
	(in thousands)
Operating income (loss)	$	59,118			$	14,778			$	23,577			$	(11,443	)		$	86,030
Depreciation and amortization		52,053				9,573				2,383				1,517				65,526
Amortization recorded to cost of sales		-				-				65				-				65
Net unrealized losses (gains) on derivatives		4,471				4,554				3,230				(2,564	)			9,691
CMA Differential Roll net losses (gains)		-				2,233				-				-				2,233
Inventory valuation adjustment		-				-				(6,436	)			-				(6,436	)
Lower of cost or net realizable value adjustments		-				-				1,080				-				1,080
Loss (gain) on disposal or impairment of assets, net		23,599				(467	)			(6,925	)			-				16,207
Equity-based compensation expense		-				-				-				410				410
Acquisition expense		(29	)			-				65				6				42
Other income (expense), net		248				(1	)			14				49				310
Adjusted EBITDA attributable to unconsolidated entities		1,032				-				(21	)			51				1,062
Adjusted EBITDA attributable to noncontrolling interest		(542	)			-				-				-				(542	)
Other		439				43				54				-				536
Adjusted EBITDA	$	140,389			$	30,713			$	17,086			$	(11,974	)		$	176,214

	Three Months Ended September 30, 2022
	Water Solutions				Crude Oil Logistics				Liquids Logistics				Corporate and Other				Consolidated
	(in thousands)
Operating income (loss)	$	47,128			$	32,927			$	1,653			$	(12,938	)		$	68,770
Depreciation and amortization		51,327				11,775				3,396				1,620				68,118
Amortization recorded to cost of sales		-				-				69				-				69
Net unrealized (gains) losses on derivatives		(4,340	)			(4,575	)			4,087				-				(4,828	)
CMA Differential Roll net losses (gains)		-				(6,518	)			-				-				(6,518	)
Inventory valuation adjustment		-				-				(3,560	)			-				(3,560	)
Lower of cost or net realizable value adjustments		-				(493	)			10,636				-				10,143
Loss (gain) on disposal or impairment of assets, net		9,035				(296	)			52				(1,138	)			7,653
Equity-based compensation expense		-				-				-				479				479
Other (expense) income, net		(251	)			303				(91	)			24				(15	)
Adjusted EBITDA attributable to unconsolidated entities		1,387				-				(17	)			45				1,415
Adjusted EBITDA attributable to noncontrolling interest		(373	)			-				-				-				(373	)
Other		861				(260	)			288				-				889
Adjusted EBITDA	$	104,774			$	32,863			$	16,513			$	(11,908	)		$	142,242

	Six Months Ended September 30, 2023
	Water Solutions				Crude Oil Logistics				Liquids Logistics				Corporate and Other				Consolidated
	(in thousands)
Operating income (loss)	$	128,449			$	31,785			$	31,408			$	(33,592	)		$	158,050
Depreciation and amortization		106,476				19,319				5,597				3,113				134,505
Amortization recorded to cost of sales		-				-				130				-				130
Net unrealized losses (gains) on derivatives		4,471				9,689				(5,489	)			388				9,059
CMA Differential Roll net losses (gains)		-				(6,904	)			-				-				(6,904	)
Inventory valuation adjustment		-				-				(6,100	)			-				(6,100	)
Lower of cost or net realizable value adjustments		-				-				3,844				-				3,844
Loss (gain) on disposal or impairment of assets, net		22,318				429				(7,736	)			-				15,011
Equity-based compensation expense		-				-				-				884				884
Acquisition expense		(28	)			-				84				(9	)			47
Other income, net		428				105				15				68				616
Adjusted EBITDA attributable to unconsolidated entities		1,259				-				(26	)			95				1,328
Adjusted EBITDA attributable to noncontrolling interest		(1,088	)			-				-				-				(1,088	)
Other		1,298				81				108				-				1,487
Adjusted EBITDA	$	263,583			$	54,504			$	21,835			$	(29,053	)		$	310,869

	Six Months Ended September 30, 2022
	Water Solutions				Crude Oil Logistics				Liquids Logistics				Corporate and Other				Consolidated
	(in thousands)
Operating income (loss)	$	100,733			$	51,916			$	28,293			$	(24,909	)		$	156,033
Depreciation and amortization		101,175				23,529				6,777				3,297				134,778
Amortization recorded to cost of sales		-				-				137				-				137
Net unrealized gains on derivatives		(4,464	)			(55,580	)			(1,686	)			-				(61,730	)
CMA Differential Roll net losses (gains)		-				28,102				-				-				28,102
Inventory valuation adjustment		-				-				(4,115	)			-				(4,115	)
Lower of cost or net realizable value adjustments		-				1,074				(217	)			-				857
Loss (gain) on disposal or impairment of assets, net		9,976				(1,556	)			52				(987	)			7,485
Equity-based compensation expense		-				-				-				976				976
Other income (expense), net		8				331				(184	)			476				631
Adjusted EBITDA attributable to unconsolidated entities		2,212				-				(24	)			89				2,277
Adjusted EBITDA attributable to noncontrolling interest		(905	)			-				-				-				(905	)
Other		1,086				125				381				-				1,592
Adjusted EBITDA	$	209,821			$	47,941			$	29,414			$	(21,058	)		$	266,118

OPERATIONAL DATA (Unaudited)
	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
	(in thousands, except per day amounts)
Water Solutions:
Produced water processed (barrels per day)
Delaware Basin	2,156,733		1,986,585		2,154,906		1,937,179
Eagle Ford Basin	138,509		112,337		135,737		105,463
DJ Basin	146,124		153,766		157,745		152,057
Other Basins	-		13,150		1,481		15,505
Total	2,441,366		2,265,838		2,449,869		2,210,204
Recycled water (barrels per day)	35,341		93,898		67,213		115,294
Total (barrels per day)	2,476,707		2,359,736		2,517,082		2,325,498
Skim oil sold (barrels per day)	4,378		3,216		4,046		3,584
Crude Oil Logistics:
Crude oil sold (barrels)	5,636		5,839		11,643		13,473
Crude oil transported on owned pipelines (barrels)	6,484		6,600		13,047		13,770
Crude oil storage capacity - owned and leased (barrels) (1)					5,232		5,232
Crude oil inventory (barrels) (1)					660		660
Liquids Logistics:
Refined products sold (gallons)	209,919		186,031		430,006		374,657
Propane sold (gallons)	129,988		169,775		269,741		334,619
Butane sold (gallons)	108,085		111,551		186,574		232,076
Other products sold (gallons)	100,389		104,979		191,488		198,616
Natural gas liquids and refined products storage capacity - owned and leased (gallons) (1)					157,589		167,559
Refined products inventory (gallons) (1)					707		1,990
Propane inventory (gallons) (1)					115,491		101,880
Butane inventory (gallons) (1)					92,651		84,928
Other products inventory (gallons) (1)					18,012		33,653

(1)

Information is presented as of September 30, 2023 and September 30, 2022, respectively.

Contacts

David Sullivan, 918-495-4631
Vice President - Finance
[e-mail]