Successful close and integration of Oasis
Midstream paired with favorable commodity prices results in first
quarter 2022 net income of $22.2 million and Adjusted EBITDA1 of
$172.8 million
Strong operating performance and financial
discipline drives free cash flow of more than $28 million, a
coverage ratio of 2.0x, leverage ratio of 3.5x, a ~5% increase in
the common unit distribution attributable to the first quarter
2022, and an S&P credit rating upgrade to BB from BB-
Key gathering and processing assets leveraged
to higher producer activity in the Williston, Delaware, and Powder
River Basins in second and third quarters driving volumes and cash
flow growth into second half of 2022 and full-year 2023
Crestwood joined Cheniere Energy and selected
midstream peers in a project to quantify, monitor, report and
verify (QMRV) GHG emissions in a collaborative effort to manage
emissions across the energy value chain
Crestwood Equity Partners LP (NYSE: CEQP) (“Crestwood”) reported
today its financial and operating results for the three months
ended March 31, 2022.
First Quarter 2022 Financial Highlights1
- First quarter 2022 net income of $22.2 million, compared to a
net loss of $38.3 million in first quarter 2021
- First quarter 2022 Adjusted EBITDA of $172.8 million, compared
to $165.4 million in the first quarter 2021, an increase of more
than 4% year-over-year
- First quarter 2022 distributable cash flow (“DCF”) to common
unitholders of $116.7 million resulting in a coverage ratio2 of
2.0x; first quarter 2022 free cash flow after distributions of
$28.3 million
- Ended the quarter with approximately $2.8 billion of total
debt, including $560 million drawn on its revolving credit
facility, resulting in a 3.5x leverage ratio
- Announced first quarter 2022 cash distribution of $0.655 per
common unit, or $2.62 per common unit on an annualized basis, an
approximate 5% increase year-over-year, payable on May 13, 2022, to
unitholders of record as of May 6, 2022
Management Commentary
“I am pleased to report another great quarter of achievements
for Crestwood as we completed the $1.8 billion Oasis Midstream
acquisition, made significant progress on the integration of our
Williston and Delaware Basin assets, published our first Carbon
Management Plan, expanded our board of directors and improved
governance, all while delivering Adjusted EBITDA of $172.8 million,
distributable cash flow of $116.7 million and free cash flow after
distributions of $28.3 million during the first quarter of 2022,"
commented Robert G. Phillips, Founder, Chairman, and Chief
Executive Officer of Crestwood’s general partner. "Our first
quarter results were positively impacted by better-than-expected
contributions from the Oasis Midstream Williston Basin assets,
significant volume growth on our Delaware Basin assets, upside from
favorable commodity prices across our Arrow and Barnett systems and
our Storage and Logistics teams’ ability to manage extreme price
volatility during the quarter."
Mr. Phillips continued, "I want to compliment our Williston
Basin field personnel for adeptly managing the initial Oasis
Midstream integration plan and our significantly larger Williston
operations despite challenging weather conditions in North Dakota
during the first quarter and in recent weeks. Further, based on
first quarter operations, we remain confident in our ability to
exceed our forecasted merger cost savings and revenue enhancements
in both the Williston and Delaware basins during 2022 despite the
inflation and supply chain headwinds that are generally affecting
the industry. Going forward, we are currently seeing increased
producer activity across the portfolio which should support growing
volumes, margins and earnings and allow us to reaffirm our 2022
guidance. Based on that outlook, I am also pleased that the Board
of Directors approved an approximate 5% increase in our common unit
distribution, which is in-line with our capital allocation strategy
to increase the return of capital to unitholders. Overall, I think
the first quarter was a good start to another strong year of
improving financial and operating performance as we look for
opportunities to strategically grow Crestwood's competitive
position in the basins in which we operate."
First Quarter 2022 Segment Results and Outlook
Gathering and Processing North (G&P North) segment EBITDA
totaled $133.3 million in the first quarter 2022, compared to
$103.6 million in the first quarter 2021, an increase of 29%
year-over-year. During the first quarter 2022, segment EBITDA
increased as a result of two months of contribution from the Oasis
Midstream assets and the favorable impact of higher commodity
prices on the Arrow system. While the Oasis Midstream assets are
performing above budgeted expectations, volumes in the G&P
North segment were adversely affected by extreme winter weather in
the Williston Basin and Powder River Basin during the first quarter
which impacted producer facilities and development activity in
January and February, pushing out completions on the Arrow system
until the end of the first quarter. With milder weather expected in
the second and third quarters and commodity prices remaining
strong, Crestwood expects producers to accelerate drilling and
completion (D&C) activity, driving an increase in well
connects, volumes, and revenue for the remainder of the year.
Gathering & Processing South (G&P South) segment EBITDA
totaled $27.4 million in the first quarter 2022, compared to $15.9
million in the first quarter 2021, an increase of 72%
year-over-year. During the first quarter 2022, segment EBITDA
increased primarily as a result of a 10% increase year-over-year in
total gas gathering volumes across the segment. The Delaware Basin
gas gathering volumes increased 29% year-over-year driven by strong
producer activity on the Willow Lake system in New Mexico, with an
average of three rigs operating during the quarter. The segment
results also include two months of contribution from the Delaware
Basin oil and water gathering assets acquired from Oasis Midstream.
This system supports Percussion Petroleum ("Percussion"), a
Carnelian Energy Capital backed portfolio company, and the
midstream assets are wholly owned by Crestwood. Additionally, the
Barnett assets continued to benefit from higher natural gas prices
through incremental revenues generated by percent of index (POI)
contracts.
Storage & Logistics (S&L) segment EBITDA totaled $25.2
million in the first quarter 2022, compared to $50.8 million in the
first quarter 2021. Both periods exclude the non-cash change in
fair value of commodity inventory-related derivative contracts and
gain/loss on long-lived assets. First quarter 2021 segment EBITDA
includes a $10 million contribution from Tres Palacios driven by
Winter Storm Uri and a $14 million contribution from the Stagecoach
Gas Services joint venture that was divested in July 2021.
Additionally, first quarter 2021 excludes a $119.9 million
impairment recorded by Crestwood's equity investment in Stagecoach
Gas Services. During the first quarter of 2022, the NGL Logistics
business was able to optimize its storage and logistics assets
across the Midwest and East Coast to meet increased demand driven
by winter weather. With 10 MMBbls of NGL storage and 13 trucking
and rail terminals, the NGL Logistics business is well-positioned
to capture incremental revenue opportunities arising from continued
commodity price volatility. Additionally, the Tres Palacios gas
storage facility exceeded internal expectations during the quarter
as commodity price volatility drove incremental volumes to the
facility.
Combined O&M and G&A expenses, net of non-cash
unit-based compensation, in the first quarter 2022 were $77.2
million compared to $49.2 million in the first quarter 2021. First
quarter 2022 O&M expenses increased due to expanded operations
as a result of the merger with Oasis Midstream, while G&A
expenses include $17 million of transaction costs related to the
merger. Crestwood expects to realize approximately $25 million of
run-rate O&M and G&A synergies related to the Oasis
Midstream merger during 2022.
First Quarter 2022 Business Update
Williston Basin
During the first quarter 2022, the Williston Basin averaged
crude oil gathering volumes of 80 MBbls/d, natural gas gathering
volumes of 248 MMcf/d, natural gas processing volumes of 280
MMcf/d, and produced water gathering volumes of 173 MBbls/d. First
quarter 2022 volumes include two months of ownership of the Oasis
Midstream assets. Crestwood continues to benefit from increasing
gas-to-oil ratios (GORs) across the basin, as well as the sustained
higher commodity price environment. Five wells were connected to
the Williston Basin gathering systems in the first quarter, all of
which were DUCs (drilled but uncompleted wells), which is typical
as producers reduce D&C activities in the winter months.
Approximately 70% of the forecasted well connects in the basin are
expected to come online in the second and third quarters, driving a
step change in cash flow into the second half of the year. With the
recent strength in commodity prices, the Williston Basin has seen a
70% increase in rig count since April of 2021, with four rigs
currently operating on Crestwood's dedicated acreage.
During the first quarter 2022, Crestwood invested $15.1 million
in growth capital in the Williston Basin, of which approximately
70% was for the expansion of the three-product gathering systems
for Oasis Petroleum and new third party customers on the Oasis
Midstream footprint. On the Arrow system, Crestwood continued to
invest capital for incremental compression and the expansion of the
produced water gathering system to meet producer development
activity in 2022.
Oasis Midstream Integration
Update
Following the closing of the Oasis Midstream merger on February
1, 2022, Crestwood has exceeded its integration schedule and
expects to meet or beat its previously stated goal of $45 million
in annual revenue and cost synergies in the first 12 to 18 months
of ownership. Crestwood's operations team has identified numerous
additional synergy opportunities across the portfolio, including
the reduction of contract labor, and Crestwood's commercial team
has continued to be successful contracting with several new
third-party producers in the surrounding footprint.
Powder River Basin
During the first quarter 2022, the Powder River Basin averaged
gathering volumes of 98 MMcf/d and processing volumes of 94 MMcf/d.
During the first quarter 2022, six wells were connected to the
Jackalope system and Crestwood continues to forecast a total of 10
to 15 well connects for the year. Late in the first quarter,
Continental Resources (NYSE: CLR) ("Continental") closed on its
acquisition of acreage owned by Chesapeake Energy Corp in the
basin, resulting in Continental becoming Crestwood's largest
producer customer in the basin. Continental is currently operating
two rigs on acreage dedicated to Crestwood and expects first
volumes to flow into the Bucking Horse processing plant via the
Continental Express pipeline in late second quarter 2022. Crestwood
invested $3 million in the Powder River Basin during the quarter,
primarily related to construction of the Continental Express
high-pressure pipeline.
Delaware Basin
During the first quarter 2022, the Delaware Basin averaged
natural gas gathering volumes of 234 MMcf/d, an increase of 29%
year-over-year, and processing volumes of 117 MMcf/d, an increase
of 115% year-over-year. Gathering volumes on the Willow Lake system
in New Mexico increased 125% year-over-year, as private producers
continue to drive activity levels, operating an average of three
rigs. During the first quarter, five wells were connected to the
Willow Lake system and Crestwood continues to forecast a total of
100 to 110 wells across the Delaware Basin for the year.
Additionally, produced water gathering volumes averaged 102 MBbls/d
during the first quarter across Crestwood's two water gathering
systems in the basin. Percussion is currently running two rigs on
Crestwood's dedicated footprint, resulting in average crude oil
gathering volumes of 20 MBbls/d for the two months of
ownership.
In the first quarter, capital investment in the Delaware Basin
was focused on the expansion of gathering and compression capacity
in New Mexico to support the development plans of Novo Oil &
Gas, the expansion of the oil and water gathering system for
Percussion, and the drilling and completion of two shallow,
produced water disposal wells to support increasing produced water
volumes on the Desert Hills water system. Based on current producer
forecasts, Crestwood estimates that the Orla processing plant will
be near full capacity in the fourth quarter 2022 and is actively
evaluating accretive investments to expand processing capacity to
the system. Crestwood forecasts the Delaware Basin assets to
generate more than $60 million of cash flow net to Crestwood in
2022.
Capitalization and Liquidity Update
Crestwood invested approximately $30 million in consolidated
growth capital projects and joint venture contributions during the
first quarter 2022 (excluding litigation-related capital pertaining
to the Bear Den II processing plant). As Crestwood continues to
build-out infrastructure on the Oasis Midstream footprint, the
company expects capital investments to peak in the second and third
quarters before declining in the fourth quarter, driving a
significant increase in free cash flow by the fourth quarter of
this year. As of March 31, 2022, Crestwood had approximately $2.8
billion of debt outstanding, comprised of $2.25 billion of
fixed-rate senior notes and $560 million outstanding under its
revolving credit facility, resulting in a leverage ratio of 3.5x
and more than $900 million of available liquidity. Additionally, in
April 2022, Crestwood was upgraded by Standard and Poor's to a
credit rating of BB from BB- based on the company's increased
financial and operational scale and improved financial strength
following the Oasis Midstream merger.
Crestwood currently has 71.3 million preferred units outstanding
(par value of $9.13 per unit) that pay a fixed-rate annual cash
distribution of 9.25%, payable quarterly. The preferred units are
listed on the New York Stock Exchange and trade under the ticker
symbol CEQP-P.
Sustainability Program Update
Crestwood recently joined a collaboration with Cheniere Energy,
Inc. ("Cheniere") (AMEX: LNG), and other leading industry
participants to improve the overall understanding of GHG emissions
and further the deployment of advanced monitoring technologies and
protocols across the energy value chain. In collaboration with
global emission researchers from Colorado State University and the
University of Texas, the program will implement quantification,
monitoring, reporting and verification (QMRV) of greenhouse gas
(GHG) emissions at natural gas gathering, processing, transmission
and storage systems.
The measurement protocol designed by the research group and
Cheniere will be field tested at facilities operated by the
participating companies, which include assets owned and operated by
Crestwood, including the Jarvisville Compressor Station in the
Marcellus, the Herradura Compressor Station in the Delaware Basin,
and the Tres Palacios gas storage facility on the Gulf Coast.
Mr. Phillips commented, "Crestwood continues to advance our
understanding of our GHG emissions to better quantify, measure and
reduce our emissions. We remain resolute on evolving our emissions
measurement capabilities in the field and believe participation in
the QMRV project along with five other industry-leading peers will
further propel Crestwood’s, and the midstream sector's,
understanding and use of leading measurement protocols and
emissions monitoring technologies."
Crestwood remains on track to publish its fourth annual
sustainability report in June 2022. For more information on
Crestwood’s approach to sustainability and carbon management,
please visit https://esg.crestwoodlp.com.
Upcoming Conference Participation
Crestwood’s management will participate in the following
upcoming investor conferences. Prior to the start of each
conference, new presentation materials may be posted to the
Investors section of Crestwood’s website at
www.crestwoodlp.com.
- 2022 EIC Investor Conference, West Palm Beach, Florida, May 15
- 17, 2022
- J.P. Morgan Energy, Power & Renewables Conference, New York
City, New York, June 21 – 22, 2022
Earnings Conference Call Schedule
Management will host a conference call for investors and
analysts of Crestwood today at 9:00 a.m. Eastern Time (8:00 a.m.
Central Time) which will be broadcast live over the Internet.
Investors will be able to connect to the webcast via the
“Investors” page of Crestwood’s website at www.crestwoodlp.com.
Please log in at least 10 minutes in advance to register and
download any necessary software. A replay will be available shortly
after the call for 90 days.
Non-GAAP Financial Measures
Adjusted EBITDA, distributable cash flow and free cash flow are
non-GAAP financial measures. The accompanying schedules of this
news release provide reconciliations of these non-GAAP financial
measures to their most directly comparable financial measures
calculated and presented in accordance with GAAP. Our non-GAAP
financial measures should not be considered as alternatives to GAAP
measures such as net income or operating income or any other GAAP
measure of liquidity or financial performance.
Forward-Looking Statements
This news release contains forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of
1995 and Section 21E of the Securities and Exchange Act of 1934.
The words “expects,” “believes,” “anticipates,” “plans,” “will,”
“shall,” “estimates,” and similar expressions identify
forward-looking statements, which are generally not historical in
nature. Forward-looking statements are subject to risks and
uncertainties and are based on the beliefs and assumptions of
management, based on information currently available to them.
Although Crestwood believes that these forward-looking statements
are based on reasonable assumptions, it can give no assurance that
any such forward-looking statements will materialize. Important
factors that could cause actual results to differ materially from
those expressed in or implied from these forward-looking statements
include the risks and uncertainties described in Crestwood’s
reports filed with the Securities and Exchange Commission,
including its Annual Report on Form 10-K and its subsequent
reports, which are available through the SEC’s EDGAR system at
www.sec.gov and on our website. Readers are cautioned not to place
undue reliance on forward-looking statements, which reflect
management’s view only as of the date made, and Crestwood assumes
no obligation to update these forward-looking statements.
About Crestwood Equity Partners LP
Houston, Texas, based Crestwood Equity Partners LP (NYSE: CEQP)
is a master limited partnership that owns and operates midstream
businesses in multiple shale resource plays across the United
States. Crestwood Equity is engaged in the gathering, processing,
treating, compression, storage and transportation of natural gas;
storage, transportation, terminalling and marketing of NGLs;
gathering, storage, terminalling and marketing of crude oil; and
gathering and disposal of produced water. Visit Crestwood Equity
Partners LP at www.crestwoodlp.com; and to learn more about
Crestwood’s sustainability efforts, please visit
https://esg.crestwoodlp.com.
_________________________ 1 Please see non-GAAP reconciliation
tables included at the end of the press release. 2 Coverage ratio
includes distributable cash flow generated by Oasis Midstream
during January 2022.
CRESTWOOD EQUITY PARTNERS
LP
Consolidated Statements of
Operations
(in millions, except per unit
data)
(unaudited)
Three Months Ended March
31,
2022
2021
Revenues
$
1,583.8
$
1,032.7
Cost of products/services sold
1,364.4
813.8
Operating expenses and other:
Operations and maintenance
42.4
32.8
General and administrative
43.4
18.7
Depreciation, amortization and
accretion
74.8
59.2
Loss on long-lived assets, net
3.8
1.4
164.4
112.1
Operating income
55.0
106.8
Earnings (loss) from unconsolidated
affiliates, net
3.0
(103.7
)
Interest and debt expense, net
(36.1
)
(36.0
)
Loss on modification/extinguishment of
debt
—
(5.5
)
Other income, net
0.3
—
Income (loss) before income taxes
22.2
(38.4
)
Benefit for income taxes
—
0.1
Net income (loss)
22.2
(38.3
)
Net income attributable to non-controlling
partner
10.2
10.1
Net income (loss) attributable to
Crestwood Equity Partners LP
12.0
(48.4
)
Net income attributable to preferred
units
15.0
15.0
Net loss attributable to partners
$
(3.0
)
$
(63.4
)
Net loss per limited partner unit:
Basic and Diluted
$
(0.04
)
$
(0.86
)
CRESTWOOD EQUITY PARTNERS
LP
Selected Balance Sheet
Data
(in millions)
March 31, 2022
December 31,
2021
(unaudited)
Cash
$
11.9
$
13.3
Outstanding
debt:
Revolving Credit Facility
$
560.0
$
282.0
Senior Notes
2,250.0
1,800.0
Other
30.2
0.2
Subtotal
2,840.2
2,082.2
Less: deferred financing costs, net
30.1
29.9
Total debt
$
2,810.1
$
2,052.3
Partners'
capital
Total partners' capital
$
1,966.0
$
1,099.6
Common units outstanding
98.0
63.0
CRESTWOOD EQUITY PARTNERS
LP
Reconciliation of Non-GAAP
Financial Measures
(in millions)
(unaudited)
Three Months Ended March
31,
2022
2021
Net Income (Loss)
to Adjusted EBITDA
Net income (loss)
$
22.2
$
(38.3
)
Interest and debt expense, net
36.1
36.0
Loss on modification/extinguishment of
debt
—
5.5
Benefit for income taxes
—
(0.1
)
Depreciation, amortization and
accretion
74.8
59.2
EBITDA (a)
$
133.1
$
62.3
Significant items impacting EBITDA:
Unit-based compensation charges
8.6
2.3
Loss on long-lived assets, net
3.8
1.4
(Earnings) loss from unconsolidated
affiliates, net
(3.0
)
103.7
Adjusted EBITDA from unconsolidated
affiliates, net
7.6
25.7
Change in fair value of commodity
inventory-related derivative contracts
5.7
(30.5
)
Significant transaction and environmental
related costs and other items
17.0
0.5
Adjusted EBITDA (a)
$
172.8
$
165.4
Distributable
Cash Flow (b)
Adjusted EBITDA (a)
$
172.8
$
165.4
Cash interest expense (c)
(35.6
)
(34.5
)
Maintenance capital expenditures (d)
(1.4
)
(3.0
)
Adjusted EBITDA from unconsolidated
affiliates, net
(7.6
)
(25.7
)
Distributable cash flow from
unconsolidated affiliates
6.7
24.8
PRB cash received in excess of recognized
revenues (e)
7.1
6.6
Benefit for income taxes
—
0.1
Distributable cash flow attributable to
CEQP
142.0
133.7
Distributions to preferred
(15.0
)
(15.0
)
Distributions to Niobrara preferred
(10.3
)
(10.3
)
Distributable cash flow attributable to
CEQP common
$
116.7
$
108.4
(a)
EBITDA is defined as income before income
taxes, plus debt-related costs (interest and debt expense, net and
loss on modification/extinguishment of debt) and depreciation,
amortization and accretion expense. Adjusted EBITDA considers the
adjusted earnings impact of our unconsolidated affiliates by
adjusting our equity earnings or losses from our unconsolidated
affiliates to reflect our proportionate share (based on the
distribution percentage) of their EBITDA, excluding gains and
losses on long-lived assets and other impairments. Adjusted EBITDA
also considers the impact of certain significant items, such as
unit-based compensation charges, gains or losses on long-lived
assets, impairments of goodwill, third party costs incurred related
to potential and completed acquisitions, certain environmental
remediation costs, the change in fair value of commodity
inventory-related derivative contracts, costs associated with the
realignment and restructuring of our operations and corporate
structure, and other transactions identified in a specific
reporting period. The change in fair value of commodity
inventory-related derivative contracts is considered in determining
Adjusted EBITDA given that the timing of recognizing gains and
losses on these derivative contracts differs from the recognition
of revenue for the related underlying sale of inventory to which
these derivatives relate. Changes in the fair value of other
derivative contracts is not considered in determining Adjusted
EBITDA given the relatively short-term nature of those derivative
contracts. EBITDA and Adjusted EBITDA are not measures calculated
in accordance with GAAP, as they do not include deductions for
items such as depreciation, amortization and accretion, interest
and income taxes, which are necessary to maintain our business.
EBITDA and Adjusted EBITDA should not be considered as alternatives
to net income, operating cash flow or any other measure of
financial performance presented in accordance with GAAP. EBITDA and
Adjusted EBITDA calculations may vary among entities, so our
computation may not be comparable to measures used by other
companies.
(b)
Distributable cash flow is defined as
Adjusted EBITDA, adjusted for cash interest expense, maintenance
capital expenditures, income taxes, the cash received from our
Powder River Basin operations in excess of revenue recognized, and
our proportionate share of our unconsolidated affiliates'
distributable cash flow. Distributable cash flow should not be
considered an alternative to 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.
We believe that distributable cash flow provides additional
information for evaluating our ability to declare and pay
distributions to unitholders. Distributable cash flow, as we define
it, may not be comparable to distributable cash flow or similarly
titled measures used by other companies.
(c)
Cash interest expense less amortization of
deferred financing costs.
(d)
Maintenance capital expenditures are
defined as those capital expenditures which do not increase
operating capacity or revenues from existing levels.
(e)
Cash received from customers of our Powder
River Basin operations pursuant to certain contractual minimum
revenue commitments in excess of related revenue recognized under
FASB ASC 606.
CRESTWOOD EQUITY PARTNERS
LP
Reconciliation of Non-GAAP
Financial Measures
(in millions)
(unaudited)
Three Months Ended
March 31,
2022
2021
Operating Cash
Flows to Adjusted EBITDA
Net cash provided by operating
activities
$
222.5
$
258.5
Net changes in operating assets and
liabilities
(112.9
)
(122.8
)
Amortization of debt-related deferred
costs
(0.8
)
(1.7
)
Interest and debt expense, net
36.1
36.0
Unit-based compensation charges
(8.6
)
(2.3
)
Loss on long-lived assets, net
(3.8
)
(1.4
)
Earnings (loss) from unconsolidated
affiliates, net, adjusted for cash distributions received
0.4
(103.8
)
Deferred income taxes
0.1
—
Benefit for income taxes
—
(0.1
)
Other non-cash income
0.1
(0.1
)
EBITDA (a)
$
133.1
$
62.3
Unit-based compensation charges
8.6
2.3
Loss on long-lived assets, net
3.8
1.4
(Earnings) loss from unconsolidated
affiliates, net
(3.0
)
103.7
Adjusted EBITDA from unconsolidated
affiliates, net
7.6
25.7
Change in fair value of commodity
inventory-related derivative contracts
5.7
(30.5
)
Significant transaction and environmental
related costs and other items
17.0
0.5
Adjusted EBITDA (a)
$
172.8
$
165.4
Distributable
Cash Flow (b)
Adjusted EBITDA (a)
$
172.8
$
165.4
Cash interest expense (c)
(35.6
)
(34.5
)
Maintenance capital expenditures (d)
(1.4
)
(3.0
)
Adjusted EBITDA from unconsolidated
affiliates, net
(7.6
)
(25.7
)
Distributable cash flow from
unconsolidated affiliates
6.7
24.8
PRB cash received in excess of recognized
revenues (e)
7.1
6.6
Benefit for income taxes
—
0.1
Distributable cash flow attributable to
CEQP
142.0
133.7
Distributions to preferred
(15.0
)
(15.0
)
Distributions to Niobrara preferred
(10.3
)
(10.3
)
Distributable cash flow attributable to
CEQP common
$
116.7
$
108.4
Free Cash Flow
After Distributions (f)
Distributable cash flow attributable to
CEQP common
$
116.7
$
108.4
Less: Growth capital expenditures
24.2
5.5
Less: Distributions to common
unitholders
64.2
39.3
Free cash flow after
distributions
$
28.3
$
63.6
(a)
EBITDA is defined as income before income
taxes, plus debt-related costs (interest and debt expense, net and
loss on modification/extinguishment of debt) and depreciation,
amortization and accretion expense. Adjusted EBITDA considers the
adjusted earnings impact of our unconsolidated affiliates by
adjusting our equity earnings or losses from our unconsolidated
affiliates to reflect our proportionate share (based on the
distribution percentage) of their EBITDA, excluding gains and
losses on long-lived assets and other impairments. Adjusted EBITDA
also considers the impact of certain significant items, such as
unit-based compensation charges, gains or losses on long-lived
assets, impairments of goodwill, third party costs incurred related
to potential and completed acquisitions, certain environmental
remediation costs, the change in fair value of commodity
inventory-related derivative contracts, costs associated with the
realignment and restructuring of our operations and corporate
structure, and other transactions identified in a specific
reporting period. The change in fair value of commodity
inventory-related derivative contracts is considered in determining
Adjusted EBITDA given that the timing of recognizing gains and
losses on these derivative contracts differs from the recognition
of revenue for the related underlying sale of inventory to which
these derivatives relate. Changes in the fair value of other
derivative contracts is not considered in determining Adjusted
EBITDA given the relatively short-term nature of those derivative
contracts. EBITDA and Adjusted EBITDA are not measures calculated
in accordance with GAAP, as they do not include deductions for
items such as depreciation, amortization and accretion, interest
and income taxes, which are necessary to maintain our business.
EBITDA and Adjusted EBITDA should not be considered as alternatives
to net income, operating cash flow or any other measure of
financial performance presented in accordance with GAAP. EBITDA and
Adjusted EBITDA calculations may vary among entities, so our
computation may not be comparable to measures used by other
companies.
(b)
Distributable cash flow is defined as
Adjusted EBITDA, adjusted for cash interest expense, maintenance
capital expenditures, income taxes, the cash received from our
Powder River Basin operations in excess of revenue recognized, and
our proportionate share of our unconsolidated affiliates'
distributable cash flow. Distributable cash flow should not be
considered an alternative to 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.
We believe that distributable cash flow provides additional
information for evaluating our ability to declare and pay
distributions to unitholders. Distributable cash flow, as we define
it, may not be comparable to distributable cash flow or similarly
titled measures used by other companies.
(c)
Cash interest expense less amortization of
deferred financing costs.
(d)
Maintenance capital expenditures are
defined as those capital expenditures which do not increase
operating capacity or revenues from existing levels.
(e)
Cash received from customers of our Powder
River Basin operations pursuant to certain contractual minimum
revenue commitments in excess of related revenue recognized under
FASB ASC 606.
(f)
Free cash flow after distributions is
defined as distributable cash flow attributable to common
unitholders less growth capital expenditures and distributions to
common unitholders. Free cash flow after distributions should not
be considered an alternative to cash flows from operating
activities or any other measure of liquidity calculated in
accordance with GAAP as those items are used to measure liquidity
or the ability to service debt obligations. We believe that free
cash flow after distributions provides additional information for
evaluating our ability to generate cash flow after paying our
distributions to common unitholders and paying for our growth
capital expenditures.
CRESTWOOD EQUITY PARTNERS
LP
Segment Data
(in millions)
(unaudited)
Three Months Ended March
31,
2022
2021
Gathering and
Processing North
Revenues
$
362.6
$
235.1
Costs of product/services sold
205.6
116.2
Operations and maintenance expenses
23.7
15.1
Loss on long-lived assets, net
—
(0.2
)
EBITDA
$
133.3
$
103.6
Gathering and
Processing South
Revenues
$
30.7
$
24.6
Costs of product/services sold
(0.6
)
0.3
Operations and maintenance expenses
6.7
6.3
Gain (loss) on long-lived assets, net
0.2
(1.3
)
Earnings (loss) from unconsolidated
affiliates, net
2.6
(0.8
)
EBITDA
$
27.4
$
15.9
Storage and
Logistics
Revenues
$
1,190.5
$
773.0
Costs of product/services sold
1,159.4
697.3
Operations and maintenance expenses
12.0
11.4
Gain (loss) on long-lived assets, net
(4.0
)
0.1
Earnings (loss) from unconsolidated
affiliates, net
0.4
(102.9
)
EBITDA
$
15.5
$
(38.5
)
Total Segment EBITDA
$
176.2
$
81.0
Corporate
(43.1
)
(18.7
)
EBITDA
$
133.1
$
62.3
CRESTWOOD EQUITY PARTNERS
LP
Operating Statistics
(unaudited)
Three Months Ended March
31,
2022
2021
Gathering and
Processing North
Gas gathering volumes (MMcf/d)
Williston Basin
247.5
134.2
Powder River Basin
98.1
98.3
Total gas gathering volumes
345.6
232.5
Processing volumes (MMcf/d)
Williston Basin
280.2
129.6
Powder River Basin
94.2
97.5
Total processing volumes
374.4
227.1
Williston Basin
Crude oil gathering volumes (MBbls/d)
79.8
100.3
Water gathering volumes (MBbls/d)
173.3
82.0
Gathering and
Processing South
Gas gathering volumes (MMcf/d)
Marcellus
214.6
234.5
Barnett
214.1
184.9
Delaware Basin (a)
234.2
181.5
Total gas gathering volumes
662.9
600.9
Processing volumes (MMcf/d)
Barnett
71.1
75.6
Delaware Basin (a)
116.9
54.3
Total processing volumes
188.0
129.9
Compression volumes (MMcf/d)
241.5
278.3
Delaware Basin - Crude oil gathering
volumes (MBbls/d)
20.1
—
Delaware Basin - Water gathering volumes
(MBbls/d) (a)
102.3
48.1
Storage and
Logistics
Gulf Coast Storage - firm contracted
capacity (Bcf) (a)
28.8
30.5
% of operational capacity contracted
75
%
79
%
Firm storage services (MMcf/d) (a)
394.8
443.8
Interruptible services (MMcf/d) (a)
155.2
49.9
COLT Hub
Rail loading (MBbls/d)
18.0
51.5
Outbound pipeline (MBbls/d) (b)
25.4
10.1
NGL Operations
NGL volumes sold or processed
(MBbls/d)
160.0
151.5
NGL volumes trucked (MBbls/d)
23.1
22.2
(a)
Includes our 50% owned joint venture,
operational data reported is at 100%.
(b)
Represents only throughput leaving the
terminal.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220425005971/en/
Crestwood Equity Partners LP
Investor Contact
Rhianna Disch, 713-380-3006 rhianna.disch@crestwoodlp.com
Director, Investor Relations
Sustainability and Media Contact
Joanne Howard, 832-519-2211 joanne.howard@crestwoodlp.com Senior
Vice President, Sustainability and Corporate Communications
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