Other Matters

12 Months Ended

Mar. 31, 2024

Dispute Settlement

During the three months ended December 31, 2022, we recorded other income of $29.5 million to settle a dispute associated with commercial activities not occurring in the current reporting periods. We received payment on December 29, 2022. This amount is recorded within other income, net in our consolidated statement of operations for the year ended March 31, 2023.

Third-party Loan Receivable

As previously disclosed, we had an outstanding loan receivable, including accrued interest, associated with our interest in a facility that was utilized by a third-party. Due to the bankruptcy of the third-party, we wrote down the remaining outstanding balance to what we expected to collect as an unsecured claim. At March 31, 2022, the outstanding balance of our unsecured claim was $0.6 million, net of an allowance for an expected credit loss, which was recorded within prepaid expenses and other current assets in our consolidated balance sheet. During the three months ended June 30, 2022, we received $1.0 million to settle our unsecured claim and we reversed the allowance for the expected credit loss.

Acquisition and Disposition of Certain Saltwater Disposal Assets

On June 21, 2023, we sold certain saltwater disposal assets in the Eagle Ford Basin to a third-party for total consideration of $3.0 million, of which $0.05 million was in cash and $2.95 million was a loan receivable. The buyer also assumed certain asset retirement obligations associated with the saltwater disposal assets. Interest on the loan receivable is based on the prime rate and is due monthly beginning on August 1, 2023. The loan receivable matures on December 31, 2025. We recorded a loss of $5.4 million within loss on disposal or impairment of assets, net in our consolidated statement of operations for the year ended March 31, 2024.

On March 6, 2024, we acquired a 51% voting interest in these previously sold saltwater disposal assets, which we are accounting for as an acquisition of assets. Total consideration for this acquisition was $3.0 million, which included the termination of a loan receivable (discussed above), and was allocated to property, plant and equipment, asset retirement obligation and noncontrolling interest.

Dispositions

Sale of Certain Saltwater Disposal Assets

On March 31, 2023, we sold certain saltwater disposal assets in the Midland Basin to two third-parties for total consideration of $13.6 million, of which $5.0 million was in cash and $8.6 million was a loan receivable. The buyer also assumed certain asset retirement obligations and contingent consideration liabilities associated with the saltwater disposal assets. Interest on the loan receivable is based on the prime rate and is due monthly beginning on September 1, 2023. The loan

receivable matures on April 1, 2026. We recorded a loss of $18.8 million within loss on disposal or impairment of assets, net in our consolidated statement of operations for the year ended March 31, 2023.

On July 25, 2023, we entered into an agreement in which we terminated a minimum volume water disposal contract and sold certain saltwater disposal assets and intangible assets in the Pinedale Anticline Basin to a third-party for total consideration of $8.7 million in cash. The buyer also assumed certain asset retirement obligations associated with the saltwater disposal assets. For this transaction, the consideration was allocated between the termination of the water disposal contract and the sale of assets based on their relative fair values. The terminated contract included a minimum volume commitment through December 31, 2025. Approximately $7.8 million of the total consideration was allocated to the termination of the water disposal contract and was recognized as revenue, and the remaining $0.9 million was allocated to the sale of assets. We recorded a loss of $21.2 million on the sale within loss on disposal or impairment of assets, net in our consolidated statement of operations for the year ended March 31, 2024.

On December 8, 2023, we sold certain saltwater disposal assets and intangible assets in the Delaware Basin to a third-party for total consideration of $12.0 million in cash. The buyer also assumed certain asset retirement obligations associated with the saltwater disposal assets. We recorded a loss of $1.3 million on the sale within loss on disposal or impairment of assets, net in our consolidated statement of operation for the year ended March 31, 2024.

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 have not been classified as discontinued operations.

Sale of Certain Natural Gas Liquids Terminals

On July 24, 2023, we sold two natural gas liquids terminals in the Pacific Northwest to a third-party for total consideration of $16.0 million in cash. Also, as part of this transaction, we wrote off goodwill allocated to this transaction and terminated an existing lease. We recorded a gain of $6.8 million within loss on disposal or impairment of assets, net in our consolidated statement of operations for the year ended March 31, 2024.

On November 15, 2023, we sold a certain other natural gas liquids terminal to a third-party for total consideration of $2.3 million in cash. The buyer also assumed certain asset retirement obligations associated with the natural gas liquids terminal. As part of this transaction, we also terminated an existing lease. We recorded a gain of $1.6 million on the sale within loss on disposal or impairment of assets, net in our consolidated statement of operations for the year ended March 31, 2024.

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 Liquids Logistics segment have not been classified as discontinued operations.

Sale of Marine Assets

On March 30, 2023, we sold our marine assets to two third-parties for total consideration of $111.7 million in cash less estimated expenses of approximately $7.5 million. We recorded a loss of $8.0 million within loss on disposal or impairment of assets, net in our consolidated statement of operations for the year ended March 31, 2023.

As this sale transaction did not represent a strategic shift that will have a major effect on our operations or financial results, operations related to this portion of our Crude Oil Logistics segment have not been classified as discontinued operations.

Sale of Sawtooth

On June 18, 2021, we sold our approximately 71.5% interest in Sawtooth to a group of buyers for total consideration of $70.0 million less expenses of approximately $2.0 million. We recorded a loss of $60.1 million within loss on disposal or impairment of assets, net in our consolidated statement of operations for the year ended March 31, 2022.

As this sale transaction did not represent a strategic shift that will have a major effect on our operations or financial results, operations related to this portion of our Liquids Logistics segment have not been classified as discontinued operations.

Assets and Liabilities Held for Sale

As discussed in Note 18, 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 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	14,354
Goodwill	4,108
Intangible assets, net	49,179
Valuation allowance on assets held for sale	(1,622)
Total assets held for sale	$	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