Other Matters

9 Months Ended

Dec. 31, 2024

Acquisition of Airplanes

As discussed in Note 12, during the three months ended June 30, 2024, we created a new aviation entity whereby we own a 90% interest and a member of our management owns a 10% interest. The aviation entity is considered a VIE (see Note 2). During the three months ended June 30, 2024, the aviation entity purchased an airplane for total consideration of $8.1 million, of which $1.7 million was paid in cash and $6.4 million was a note payable (see Note 7). We also executed a guarantee for the benefit of the lender for the outstanding loan.

As discussed in Note 12, during the three months ended December 31, 2024, we created a new aviation entity whereby we own a 90% interest and a member of our management owns a 10% interest. The aviation entity is considered a VIE (see Note 2). During the three months ended December 31, 2024, the aviation entity purchased an airplane for total consideration of

$8.1 million, of which $1.7 million was paid in cash and $6.4 million was a note payable (see Note 7). We also executed a guarantee for the benefit of the lender for the outstanding loan.

As part of these transactions, the noncontrolling interest holders have an option to require that we purchase their interest in the aviation entities. Due to these put options, activity for the noncontrolling interest holders has been recorded as redeemable noncontrolling interest in our December 31, 2024 unaudited condensed consolidated balance sheet (see Note 2).

Dispositions

Sale of Certain Railcars

On December 5, 2024, we entered into a definitive agreement with a third-party to sell 84 railcars in our Crude Oil Logistics segment for total consideration of $7.5 million in cash. The sale of the railcars will be completed in tranches within one year. These railcars have been classified as held for sale in the below summary of assets held for sale at December 31, 2024.

On January 23, 2025, we sold 35 railcars of the 84 railcars discussed above for $3.2 million. On February 5, 2025, we sold an additional 31 railcars of the 84 railcars discussed above for $2.7 million.

Sale of Certain Saltwater Disposal Assets

On August 1, 2024, we retained a 51% voting interest and sold a minority interest in certain saltwater disposal assets in the Eagle Ford Basin to a third-party for total consideration of $1.5 million, of which $0.025 million was in cash and $1.475 million was a loan receivable. The loan receivable matures on September 30, 2025 with quarterly principal payments starting on December 31, 2024. The disposition of this interest was accounted for as an equity transaction, no gain or loss was recorded and the carrying value of the noncontrolling interest was adjusted to reflect the change in ownership interest of the subsidiary.

Sale of Certain Freshwater Water Solutions Facilities

On April 5, 2024, we sold approximately 122,250 acres of real estate on two ranches located in Eddy and Lea Counties, New Mexico and certain intangible assets to a third-party for total consideration of $68.5 million in cash, including working capital. Our two ranches include fee, state and federal agricultural leased property, certain water rights, freshwater wells, and related freshwater infrastructure. See below summary of assets and liabilities held for sale at March 31, 2024. We recorded a gain of $2.6 million on the sale within loss (gain) on disposal or impairment of assets, net in our unaudited condensed consolidated statement of operations for the nine months ended December 31, 2024.

Sale of Certain Saltwater Disposal Assets

On April 15, 2024, we sold certain saltwater disposal assets and intangible assets in the Delaware Basin to a third-party for total consideration of $4.2 million in cash. The buyer also assumed certain asset retirement obligations associated with the saltwater disposal assets. See below summary of assets and liabilities held for sale at March 31, 2024. As discussed below, we recorded a loss of $1.6 million to write down these assets to fair value less cost to sell within loss on disposal or impairment of assets, net in our consolidated statement of operations for the year ended March 31, 2024. We also recorded a gain of $0.1 million on the sale within loss (gain) on disposal or impairment of assets, net in our unaudited condensed consolidated statement of operations for the nine months ended December 31, 2024.

Sale of Certain Real Estate

On May 14, 2024, we sold approximately 1,400 acres of real estate located in Lea County, New Mexico to a third-party for total consideration of $8.0 million in cash. See below summary of assets and liabilities held for sale at March 31, 2024. We recorded a gain of $7.3 million on the sale within loss (gain) on disposal or impairment of assets, net in our unaudited condensed consolidated statement of operations for the nine months ended December 31, 2024.

Exiting a Business

During the three months ended December 31, 2024, we started the process of winding down our biodiesel business by allowing our storage lease and certain railcar leases to expire and closing out the open purchase and sale contracts. Other than the railcar and storage leases, this business did not have any other long-lived assets. We expect to have all of our inventory

liquidated by the end of February 2025 and to sublease the remaining railcars by March 31, 2025 and we are not expecting to incur any costs in connection with this process.

Assets and Liabilities Held for Sale

At December 31, 2024, we met the criteria for classifying certain railcars as held for sale. Also, as previously reported, at March 31, 2024, we met the criteria for classifying the assets and liabilities of certain freshwater water solutions facilities, certain saltwater disposal assets and certain real estate as held for sale. Upon classification as held for sale, we recorded a loss of $1.6 million to write down certain saltwater disposal assets to fair value less cost to sell within loss on disposal or impairment of assets, net in our consolidated statement of operations for the year ended March 31, 2024, and a valuation allowance included in assets held for sale in our March 31, 2024 consolidated balance sheet. The following table summarizes the major classes of assets and liabilities classified as held for sale at the dates indicated:


	December 31, 2024		March 31, 2024
	(in thousands)
Assets Held for Sale
Accounts receivable-trade, net	$	—	$	565

Prepaid expenses and other current assets	—		13
Property, plant and equipment, net	4,557		14,354
Goodwill	—		4,108
Intangible assets, net	—		49,179


Valuation allowance on assets held for sale	—		(1,622)
Total assets held for sale	$	4,557	$	66,597

Liabilities Held for Sale
Accounts payable-trade	$	—	$	63
Accrued expenses and other payables	—		31
Advance payments received from customers	—		164

Other noncurrent liabilities	—		356
Total liabilities held for sale	$	—	$	614

As these sale transactions did not represent a strategic shift that will have a major effect on our operations or financial results, operations related to these portions of our Water Solutions segment and Crude Oil Logistics segment have not been classified as discontinued operations.

NGL Energy Partners LP 10-Q