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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number: 001-35172

NGL Energy Partners LP
(Exact Name of Registrant as Specified in Its Charter)
Delaware27-3427920
(State or Other Jurisdiction of Incorporation or Organization)(I.R.S. Employer Identification No.)
6120 South Yale Avenue, Suite 805
Tulsa,Oklahoma74136
(Address of Principal Executive Offices)(Zip Code)
(918) 481-1119
(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolsName of Each Exchange on Which Registered
Common units representing Limited Partner InterestsNGLNew York Stock Exchange
Fixed-to-floating rate cumulative redeemable perpetual preferred unitsNGL-PBNew York Stock Exchange
Fixed-to-floating rate cumulative redeemable perpetual preferred unitsNGL-PCNew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes    No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes    No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated fileroAccelerated filerx
Non-accelerated fileroSmaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes    No

At February 6, 2023, there were 131,321,742 common units issued and outstanding.


TABLE OF CONTENTS

i

Forward-Looking Statements

This Quarterly Report on Form 10-Q (“Quarterly Report”) contains various forward-looking statements and information that are based on our beliefs and those of our general partner, as well as assumptions made by and information currently available to us. These forward-looking statements are identified as any statement that does not relate strictly to historical or current facts. Certain words in this Quarterly Report such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “plan,” “project,” “will,” and similar expressions and statements regarding our plans and objectives for future operations, identify forward-looking statements. Although we and our general partner believe such forward-looking statements are reasonable, neither we nor our general partner can assure they will prove to be correct. Forward-looking statements are subject to a variety of risks, uncertainties and assumptions. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, our actual results may vary materially from those expected. Among the key risk factors that may affect our consolidated financial position and results of operations are:

the prices of crude oil, natural gas liquids, gasoline, diesel, biodiesel and energy prices generally;
the general level of demand, and the availability of supply, for crude oil, natural gas liquids, gasoline, diesel, and biodiesel;
the level of crude oil and natural gas drilling and production in areas where we have operations and facilities;
the ability to obtain adequate supplies of products if an interruption in supply or transportation occurs and the availability of capacity to transport products to market areas;
the effect of weather conditions on supply and demand for crude oil, natural gas liquids, gasoline, diesel, and biodiesel;
the effect of natural disasters, earthquakes, hurricanes, tornados, lightning strikes, or other significant weather events;
the availability of local, intrastate, and interstate transportation infrastructure with respect to our transportation services;
the availability, price, and marketing of competing fuels;
the effect of energy conservation efforts on product demand;
energy efficiencies and technological trends;
issuance of executive orders, changes in applicable laws, regulations and policies, including tax, environmental, transportation, and employment regulations, or new interpretations by regulatory agencies concerning such laws and regulations and the effect of such laws, regulations and policies (now existing or in the future) on our business operations;
the effect of executive orders and legislative and regulatory actions on hydraulic fracturing, water disposal and transportation, and the treatment of flowback and produced water;
hazards or operating risks related to transporting and distributing petroleum products that may not be fully covered by insurance;
the maturity of the crude oil, natural gas liquids, and refined products industries and competition from other markets;
loss of key personnel;
the ability to renew contracts with key customers;
the ability to maintain or increase the margins we realize for our services;
the ability to renew leases for our leased equipment and storage facilities;
inflation, interest rates, and general economic conditions (including recessions and other future disruptions and volatility in the global credit markets and the impact of these events on customers and suppliers);
the nonpayment, nonperformance or bankruptcy by our counterparties;
the availability and cost of capital and our ability to access certain capital sources;
a deterioration of the credit and capital markets;
1

the ability to successfully identify and complete accretive acquisitions and organic growth projects, and integrate acquired assets and businesses;
the costs and effects of legal and administrative proceedings;
changes in general economic conditions, including market and macroeconomic disruptions resulting from global pandemics and related governmental responses; and
political pressure and influence of environmental groups upon policies and decisions related to the production, gathering, refining, processing, fractionation, transportation and sale of crude oil, refined products, natural gas, natural gas liquids, gasoline, diesel or biodiesel.

You should not put undue reliance on any forward-looking statements. All forward-looking statements speak only as of the date of this Quarterly Report. Except as may be required by state and federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements as a result of new information, future events, or otherwise. When considering forward-looking statements, please review the risks discussed under Part I, Item 1A–“Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2022.
2

PART I - FINANCIAL INFORMATION

Item 1.    Financial Statements
NGL ENERGY PARTNERS LP AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
(in Thousands, except unit amounts)
December 31, 2022March 31, 2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$4,534 $3,822 
Accounts receivable-trade, net of allowance for expected credit losses of $2,455 and $2,626, respectively
1,129,294 1,123,163 
Accounts receivable-affiliates10,257 8,591 
Inventories238,073 251,277 
Prepaid expenses and other current assets135,980 159,486 
Total current assets1,518,138 1,546,339 
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $1,000,765 and $887,006, respectively
2,400,508 2,462,390 
GOODWILL744,439 744,439 
INTANGIBLE ASSETS, net of accumulated amortization of $563,075 and $507,285, respectively
1,078,631 1,135,354 
INVESTMENTS IN UNCONSOLIDATED ENTITIES22,769 21,897 
OPERATING LEASE RIGHT-OF-USE ASSETS85,576 114,124 
OTHER NONCURRENT ASSETS64,030 45,802 
Total assets$5,914,091 $6,070,345 
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable-trade$952,506 $1,084,837 
Accounts payable-affiliates65 73 
Accrued expenses and other payables174,400 140,719 
Advance payments received from customers20,957 7,934 
Current maturities of long-term debt303,788 2,378 
Operating lease obligations32,883 41,261 
Total current liabilities1,484,599 1,277,202 
LONG-TERM DEBT, net of debt issuance costs of $32,986 and $42,988, respectively, and current maturities
2,921,174 3,350,463 
OPERATING LEASE OBLIGATIONS53,518 72,784 
OTHER NONCURRENT LIABILITIES103,378 104,346 
COMMITMENTS AND CONTINGENCIES (NOTE 7)
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, 131,453 and 130,827 notional units, respectively
(52,484)(52,478)
Limited partners, representing a 99.9% interest, 131,321,742 and 130,695,970 common units issued and outstanding, respectively
488,221 401,486 
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(439)(308)
Noncontrolling interests16,668 17,394 
Total equity800,325 714,453 
Total liabilities and equity$5,914,091 $6,070,345 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3


NGL ENERGY PARTNERS LP AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(in Thousands, except unit and per unit amounts)
Three Months Ended December 31,Nine Months Ended December 31,
2022202120222021
REVENUES:
Water Solutions$180,242 $130,653 $511,231 $397,089 
Crude Oil Logistics531,613 607,203 1,971,767 1,715,657 
Liquids Logistics1,427,385 1,434,020 4,163,072 3,301,922 
Total Revenues2,139,240 2,171,876 6,646,070 5,414,668 
COST OF SALES:
Water Solutions2,534 5,030 13,679 21,791 
Crude Oil Logistics471,891 556,531 1,808,460 1,591,877 
Liquids Logistics1,385,943 1,388,760 4,057,360 3,187,039 
Total Cost of Sales1,860,368 1,950,321 5,879,499 4,800,707 
OPERATING COSTS AND EXPENSES:
Operating81,353 72,807 237,371 207,610 
General and administrative17,216 18,925 50,601 46,149 
Depreciation and amortization69,327 68,480 204,105 222,145 
Loss on disposal or impairment of assets, net8,306 12,233 15,791 93,463 
Operating Income102,670 49,110 258,703 44,594 
OTHER INCOME (EXPENSE):  
Equity in earnings of unconsolidated entities1,213 119 3,094 765 
Interest expense(75,920)(68,379)(211,528)(204,004)
Gain on early extinguishment of liabilities, net2,667 9 6,808 1,131 
Other income, net28,100 24 28,731 2,003 
Income (Loss) Before Income Taxes58,730 (19,117)85,808 (155,511)
INCOME TAX BENEFIT (EXPENSE)252 135 (113)820 
Net Income (Loss)58,982 (18,982)85,695 (154,691)
LESS: NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS(448)63 (790)(705)
NET INCOME (LOSS) ATTRIBUTABLE TO NGL ENERGY PARTNERS LP$58,534 $(18,919)$84,905 $(155,396)
NET INCOME (LOSS) ALLOCATED TO COMMON UNITHOLDERS - BASIC (NOTE 3)$26,007 $(45,233)$(5,571)$(232,361)
NET INCOME (LOSS) ALLOCATED TO COMMON UNITHOLDERS - DILUTED (NOTE 3)$26,123 $(45,233)$(5,571)$(232,361)
BASIC INCOME (LOSS) PER COMMON UNIT$0.20 $(0.35)$(0.04)$(1.79)
DILUTED INCOME (LOSS) PER COMMON UNIT$0.19 $(0.35)$(0.04)$(1.79)
BASIC WEIGHTED AVERAGE COMMON UNITS OUTSTANDING131,015,658 129,810,245 130,802,920 129,666,303 
DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING134,485,325 129,810,245 130,802,920 129,666,303 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4

NGL ENERGY PARTNERS LP AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)
(in Thousands)
Three Months Ended December 31,Nine Months Ended December 31,
2022202120222021
Net income (loss)$58,982 $(18,982)$85,695 $(154,691)
Other comprehensive income (loss)1 (4)(131)(48)
Comprehensive income (loss)$58,983 $(18,986)$85,564 $(154,739)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5

NGL ENERGY PARTNERS LP AND SUBSIDIARIES
Unaudited Condensed Consolidated Statement of Changes in Equity
Three Months and Nine Months Ended December 31, 2022
(in Thousands, except unit amounts)
Limited Partners
PreferredCommon
General
Partner
UnitsAmount
Units
AmountAccumulated
Other Comprehensive
Income (Loss)
Noncontrolling
Interests
Total
Equity
BALANCE AT MARCH 31, 2022$(52,478)14,385,642 $348,359 130,695,970 $401,486 $(308)$17,394 $714,453 
Distributions to noncontrolling interest owners— — — — — — (975)(975)
Equity issued pursuant to incentive compensation plan (Note 8)— — — — 497 — — 497 
Net (loss) income(5)— — — 22,866 — 245 23,106 
Other comprehensive loss— — — — — (50)— (50)
BALANCE AT JUNE 30, 2022(52,483)14,385,642 348,359 130,695,970 424,849 (358)16,664 737,031 
Distributions to noncontrolling interest owners— — — — — — (274)(274)
Equity issued pursuant to incentive compensation plan (Note 8)— — — — 479 — — 479 
Net (loss) income(27)— — — 3,537 — 97 3,607 
Other comprehensive loss— — — — — (82)— (82)
BALANCE AT SEPTEMBER 30, 2022(52,510)14,385,642 348,359 130,695,970 428,865 (440)16,487 740,761 
Distributions to noncontrolling interest owners— — — — — — (267)(267)
Common unit repurchases and cancellations (Note 8)— — — (31,828)(42)— — (42)
Equity issued pursuant to incentive compensation plan (Note 8)— — — 657,600 890 — — 890 
Net income26 — — — 58,508 — 448 58,982 
Other comprehensive income— — — — — 1 — 1 
BALANCE AT DECEMBER 31, 2022$(52,484)14,385,642 $348,359 131,321,742 $488,221 $(439)$16,668 $800,325 


6

NGL ENERGY PARTNERS LP AND SUBSIDIARIES
Unaudited Condensed Consolidated Statement of Changes in Equity
Three Months and Nine Months Ended December 31, 2021
(in Thousands, except unit amounts)

Limited Partners
PreferredCommon
General
Partner
UnitsAmount
Units
AmountAccumulated
Other Comprehensive
Income (Loss)
Noncontrolling
Interests
Total
Equity
BALANCE AT MARCH 31, 2021$(52,189)14,385,642 $348,359 129,593,939 $582,784 $(266)$69,471 $948,159 
Distributions to noncontrolling interest owners— — — — — — (444)(444)
Sawtooth joint venture disposition— — — — — — (51,097)(51,097)
Equity issued pursuant to incentive compensation plan— — — — 960 — — 960 
Net (loss) income(159)— — — (134,781)— 438 (134,502)
Other comprehensive income— — — — — 8 — 8 
BALANCE AT JUNE 30, 2021(52,348)14,385,642 348,359 129,593,939 448,963 (258)18,368 763,084 
Distributions to noncontrolling interest owners— — — — — — (513)(513)
Equity issued pursuant to incentive compensation plan — — — — 1,048 — — 1,048 
Net (loss) income(27)— — — (1,510)— 330 (1,207)
Other comprehensive loss— — — — — (52)— (52)
BALANCE AT SEPTEMBER 30, 2021(52,375)14,385,642 348,359 129,593,939 448,501 (310)18,185 762,360 
Distributions to noncontrolling interest owners— — — — — — (388)(388)
Common unit repurchases and cancellations— — — (8,901)(20)— — (20)
Equity issued pursuant to incentive compensation plan — — — 399,100 749 — — 749 
Net loss(47)— — — (18,872)— (63)(18,982)
Other comprehensive loss— — — — — (4)— (4)
BALANCE AT DECEMBER 31, 2021$(52,422)14,385,642 $348,359 129,984,138 $430,358 $(314)$17,734 $743,715 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7

NGL ENERGY PARTNERS LP AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
(in Thousands)
Nine Months Ended December 31,
20222021
OPERATING ACTIVITIES:
Net income (loss)$85,695 $(154,691)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization, including amortization of debt issuance costs217,028 235,357 
Gain on early extinguishment of liabilities, net(6,808)(1,131)
Equity-based compensation expense1,866 (1,044)
Loss on disposal or impairment of assets, net15,791 93,463 
Change in provision for expected credit losses(485)88 
Net adjustments to fair value of commodity derivatives13,879 42,875 
Equity in earnings of unconsolidated entities(3,094)(765)
Distributions of earnings from unconsolidated entities2,568 2,178 
Lower of cost or net realizable value adjustments3,050 6,534 
Other701 1,593 
Changes in operating assets and liabilities, exclusive of acquisitions:
Accounts receivable-trade and affiliates(4,778)(316,477)
Inventories(24,904)(194,053)
Other current and noncurrent assets6,285 33,792 
Accounts payable-trade and affiliates(131,086)294,230 
Other current and noncurrent liabilities31,157 (15,038)
Net cash provided by operating activities206,865 26,911 
INVESTING ACTIVITIES:
Capital expenditures(122,362)(107,480)
Net settlements of commodity derivatives28,521 (60,972)
Proceeds from sales of assets22,120 8,419 
Proceeds from divestitures of businesses and investments, net 63,489 
Investments in unconsolidated entities(346)(350)
Distributions of capital from unconsolidated entities 393 
Net cash used in investing activities(72,067)(96,501)
FINANCING ACTIVITIES:
Proceeds from borrowings under revolving credit facility1,432,000 1,342,000 
Payments on revolving credit facility(1,392,000)(1,190,000)
Repayment and repurchase of senior unsecured notes(168,047)(60,149)
Payments on other long-term debt(1,931)(6,772)
Debt issuance costs(1,340)(12,503)
Distributions to noncontrolling interest owners(1,516)(1,345)
Common unit repurchases and cancellations(42)(20)
Payments to settle contingent consideration liabilities(1,204)(994)
Principal payments of finance leases(6) 
Net cash (used in) provided by financing activities(134,086)70,217 
Net increase in cash and cash equivalents712 627 
Cash and cash equivalents, beginning of period3,822 4,829 
Cash and cash equivalents, end of period$4,534 $5,456 
Supplemental cash flow information:
Cash interest paid$163,203 $162,053 
Income taxes paid (net of income tax refunds)$3,088 $1,896 
Supplemental non-cash investing and financing activities:
Accrued capital expenditures$7,398 $9,949 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
8

NGL ENERGY PARTNERS LP AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements

Note 1—Organization and Operations

NGL Energy Partners LP (“we,” “us,” “our,” or the “Partnership”) is a Delaware limited partnership. NGL Energy Holdings LLC serves as our general partner (“GP”). At December 31, 2022, our operations included three segments:

Our Water Solutions segment transports, treats, recycles and disposes of produced and flowback water generated from crude oil and natural gas production. We also sell produced water for reuse and recycle and brackish non-potable water to our producer customers to be used in their crude oil exploration and production activities. As part of processing water, we aggregate and sell recovered crude oil, also known as skim oil. We also dispose of solids such as tank bottoms, drilling fluids and drilling muds and perform other ancillary services such as truck and frac tank washouts. Our activities in this segment are underpinned by long-term, fixed fee contracts and acreage dedications, some of which contain minimum volume commitments with leading oil and gas companies including large, investment grade producer customers.
Our Crude Oil Logistics segment purchases crude oil from producers and marketers and transports it to refineries or for resale at pipeline injection stations, storage terminals, barge loading facilities, rail facilities, refineries, and other trade hubs, and provides storage, terminaling, and transportation services through its owned assets. Our activities in this segment are supported by certain long-term, fixed rate contracts which include minimum volume commitments on our owned and leased pipelines.
Our Liquids Logistics segment conducts supply operations for natural gas liquids, refined petroleum products and biodiesel to a broad range of commercial, retail and industrial customers across the United States and Canada. These operations are conducted through our 24 owned terminals, third-party storage and terminal facilities, nine common carrier pipelines and a fleet of leased railcars. We also provide services for marine exports of butane through our facility located in Chesapeake, Virginia. Our propane pipeline in Michigan was completed on August 8, 2022.

Note 2—Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include our accounts and those of our controlled subsidiaries. Intercompany transactions and account balances have been eliminated in consolidation. Investments we do not control, but can exercise significant influence over, are accounted for using the equity method of accounting. We also own an undivided interest in a crude oil pipeline, and include our proportionate share of assets, liabilities, and expenses related to this pipeline in our unaudited condensed consolidated financial statements.

Our unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim consolidated financial information in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, the unaudited condensed consolidated financial statements exclude certain information and notes required by GAAP for complete annual consolidated financial statements. However, we believe that the disclosures made are adequate to make the information presented not misleading. The unaudited condensed consolidated financial statements include all adjustments that we consider necessary for a fair presentation of our consolidated financial position, results of operations and cash flows for the interim periods presented. Such adjustments consist only of normal recurring items, unless otherwise disclosed in this Quarterly Report. The unaudited condensed consolidated balance sheet at March 31, 2022 was derived from our audited consolidated financial statements for the fiscal year ended March 31, 2022 included in our Annual Report on Form 10-K (“Annual Report”) filed with the SEC on June 6, 2022.

These interim unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto included in our Annual Report. Due to the seasonal nature of certain of our operations and other factors, the results of operations for interim periods are not necessarily indicative of the results of operations to be expected for future periods or for the full fiscal year ending March 31, 2023.

Use of Estimates

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

9

NGL ENERGY PARTNERS LP AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

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

Significant Accounting Policies

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

Income Taxes

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

We have a deferred tax liability of $42.0 million and $43.5 million at December 31, 2022 and March 31, 2022, respectively, as a result of acquiring corporations in connection with certain of our acquisitions, which is included within other noncurrent liabilities in our unaudited condensed consolidated balance sheets. The deferred tax liability is the tax effected cumulative temporary difference between the GAAP basis and tax basis of the acquired assets within the corporation. For GAAP purposes, certain of the acquired assets will be depreciated and amortized over time which will lower the GAAP basis. The deferred tax benefit recorded during the nine months ended December 31, 2022 was $1.6 million with an effective tax rate of 25.1%. The deferred tax benefit recorded during the nine months ended December 31, 2021 was $2.0 million with an effective tax rate of 22.9%.

We evaluate uncertain tax positions for recognition and measurement in the unaudited condensed consolidated financial statements. To recognize a tax position, we determine whether it is more likely than not that the tax position will be sustained upon examination, including resolution of any related appeals or litigation, based on the technical merits of the position. A tax position that meets the more likely than not threshold is measured to determine the amount of benefit to be recognized in the unaudited condensed consolidated financial statements. We had no uncertain tax positions that required recognition in our unaudited condensed consolidated financial statements at December 31, 2022 or March 31, 2022.

Inventories

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

Inventories consist of the following at the dates indicated:
December 31, 2022March 31, 2022
(in thousands)
Propane$97,706 $43,971 
Crude oil69,905 135,485 
Butane39,294 33,144 
Biodiesel16,598 20,474 
Diesel5,192 3,504 
Ethanol798 3,503 
Other8,580 11,196 
Total$238,073 $251,277 

10

NGL ENERGY PARTNERS LP AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements (Continued)

Investments in Unconsolidated Entities

Investments we do not control, but can exercise significant influence over, are accounted for using the equity method of accounting. Investments in partnerships and limited liability companies, unless our investment is considered to be minor, and investments in unincorporated joint ventures are also accounted for using the equity method of accounting.

Our investments in unconsolidated entities consist of the following at the dates indicated:
EntitySegmentOwnership InterestDecember 31, 2022March 31, 2022
(in thousands)
Water services and land companyWater Solutions50%$15,963 $15,714 
Water services and land companyWater Solutions10%3,615 2,863 
Water services and land companyWater Solutions50%2,281 2,210 
Aircraft company (1)Corporate and Other50%362 538 
Water services companyWater Solutions50%409 409 
Natural gas liquids terminal companyLiquids Logistics50%139 163 
Total$22,769 $21,897 
(1)    This is an investment with a related party.

Other Noncurrent Assets

Other noncurrent assets consist of the following at the dates indicated:
December 31, 2022March 31, 2022
(in thousands)
Linefill (1)$53,772 $28,065 
Minimum shipping fees - pipeline commitments (2)5,696 8,899 
Loan receivable (3)