Various statements contained in this report that express a belief, expectation, or intention, or that are not statements of historical fact, are forward-looking statements“forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements are subject to a number ofAct, which involve risks, uncertainties, and uncertainties, many of which are beyond our control.assumptions. All statements, other than statements of historical fact, including statements regarding our strategy,our: future operations,performance; business strategy; future operations; estimates and projections of revenues, losses, costs, expenses, returns, cash flow, and financial position, estimated revenuesposition; anticipated benefits of strategic transactions (including acquisitions and losses, projected costs, prospects,divestitures); and plans and objectives of management (including plans for future cash flow from operations) are forward-looking statements. When used in this report,document, the words “could,“aim,” “anticipate,” “believe,” “anticipate,“continue,” “intend,“could,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “continue,“model,” “outlook,” “plan,” “positioned,” “potential,” “predict,” “potential,“project,” “project,“seek,” “should,” “target,” “will,” “would,” and similar expressions (including the negative of such terms) as they relate to the Partnership are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. In particular,Although we believe that the factors discussedexpectations and assumptions reflected in this reportour forward-looking statements are reasonable as and when made, they involve risks and uncertainties that are difficult to predict and, in many cases, beyond our control. Accordingly, forward-looking statements are not guarantees of future performance and our Annual Report on Form 10-K for the year ended December 31, 2020actual outcomes could affect our actual results and cause our actual results to differ materially from expectations, estimates or assumptionswhat we have expressed forecasted or implied in suchour forward-looking statements. Unless the context requires otherwise, references to “we,” “us,” “our” or the “Partnership” are intended to mean the business and operations of the Partnership and its consolidated subsidiaries.

The Partnership is a publicly traded Delaware limited partnership focused on owning, operating, developing and acquiring midstream and energy-related infrastructure assets in the Midland and Delaware Basins of the Permian Basin.

As of March 31, 2021,2022, the General Partner held a 100% general partner interest in the Partnership. Diamondback ownsbeneficially owned all of the Partnership’s 107,815,152 outstanding Class B units, that provide a 72% voting interest.representing approximately 74% of the Partnership’s total units outstanding. Diamondback owns and controls the General Partner.

The accompanying condensed consolidated financial statements and related notes thereto were prepared in accordance with GAAP. All significant intercompany balances and transactions have been eliminated upon consolidation. The Partnership reports its operations in 1 reportable segment. Effective in the first quarter of fiscal 2021, the Partnership determined the former real estate operations segment no longer met the criteria to be an operating segment due to a change in focus and the relative immateriality of the activity.

Certain prior period amounts have been reclassified to conform to the current period financial statement presentation. These reclassifications had no effect on the previously reported total assets, total liabilities, unitholders’ equity, results of operations or cash flows.

Certain amounts included in or affecting the Partnership’s financial statements and related notes must be estimated by management, requiring certain assumptions to be made with respect to values or conditions that cannot be known with certainty at the time the financial statements are prepared. These estimates and assumptions affect the amounts the Partnership reports for assets and liabilities and the Partnership’s disclosure of contingent assets and liabilities atas of the date of the financial statements.

Making accurate estimates and assumptions is particularly difficult in the oil and natural gas industry given the challenges resulting from volatility in oil and natural gas prices. For instance, in 2020,response to the effects of COVID-19 and actions by OPEC members and other exporting nations on the supply and demand in global oil and natural gas markets, resulted in significant negative pricing pressure in the first half of 2020, followed by a recovery in pricing in the second half of 2020 and into 2021. Manymany companies in the oil and natural gas industry, including Diamondback, changed their business plans in response to changing market conditions. Such circumstances generally increase the uncertainty in the Partnership’s accounting estimates, particularly those involving financial forecasts.

The Partnership evaluates these estimates on an ongoing basis, using historical experience, consultation with experts and other methods it considers reasonable in each particular circumstance. Nevertheless, actual results may differ significantly from the Partnership’s estimates. Any effects on the Partnership’s business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the facts that give rise to the revision become known. Significant items subject to such estimates and assumptions include, but are not limited to, (i) revenue accruals, (ii) the fair value of long-lived assets (iii) asset retirement obligations and (iv)equity method investments and (iii) income taxes.

Accrued liabilities and accounts payable consist of the following as of the dates indicated:

The following table provides changes in the components of accumulated other comprehensive income, net of related income tax effects (in thousands):

There are no recent accounting for income taxes by removing certain exceptions and by clarifying and amending existing guidance. This update is effective for public business entities beginning after December 15, 2020, with early adoption permitted. The Partnership adopted this update effective January 1, 2021. The adoption of this update didpronouncements not have a material impact on its financial position, results of operations or liquidity.yet adopted.

The Partnership considers the applicability and impact of all ASUs. ASUs not discussed above were assessed and determined to be either not applicable or clarifications of ASUs previously disclosed.

The Partnership generates revenues by charging fees on a per unit basis for gathering crude oil and natural gas, delivering and storing sourced water, and collecting, recycling and disposing of produced water.

In the following table, revenue from contracts with customers is disaggregated by type of service and type of fee:

On January 19, 2022, a wholly owned subsidiary of the Operating Company invested approximately $22.2 million in cash to acquire a 10% interest in the BANGL joint venture. The BANGL pipeline, which began full commercial service in the fourth quarter of 2021, provides NGL takeaway capacity from the MPLX and amortization expense for real estateWTG gas processing plants in the Permian Basin to the NGL fractionation hub in Sweeny, Texas and has expansion capacity of up to 300,000 Bbl/d.