HOUSTON--(BUSINESS WIRE)--
Crestwood Equity Partners LP (NYSE:CEQP) (“Crestwood Equity” or
“Crestwood”) reported today its financial and operating results for the
full-year and three months ended December 31, 2015 and provided 2016
outlook.
Full-year and Fourth Quarter 2015 Highlights1
-
Full-year 2015 Adjusted EBITDA of $527.4 million, compared to $495.9
million in fiscal 2014; Fourth quarter 2015 Adjusted EBITDA of $118.9
million, compared to $132.7 million in the fourth quarter 2014
-
Full-year 2015 net loss of $2.3 billion, compared to a net loss of
$10.4 million in fiscal 2014. Net loss for the full-year 2015 and
fourth quarter 2015 includes non-cash charges for impairments of
goodwill and long-lived assets of $2.2 billion and $1.3 billion,
respectively. These impairments were largely attributed to increased
discount rates and adjustments to Crestwood’s volume and revenue
outlook which were triggered by the decline in commodity prices and
corresponding decline in Crestwood’s unit price since 2014
-
Full-year 2015 distributable cash flow of $361.5 million, compared to
$356.6 million in fiscal 2014, resulting in a full-year 2015 cash
distribution coverage ratio of approximately 1.0x; Fourth quarter 2015
distributable cash flow of $71.9 million, compared to $97.4 million in
fourth quarter 2014, resulting in a fourth quarter 2015 coverage ratio
of approximately 0.8x
-
Full-year 2015 operating and maintenance (“O&M”) and general and
administrative (“G&A”) expenses were reduced by $26.4 million, or 9%
from fiscal 2014; Fourth quarter 2015 O&M and G&A expenses were
reduced by $11.7 million, or 14% from fourth quarter 2014. These
amounts exclude costs incurred during 2015 to achieve these cost
reductions
-
In March 2015, Crestwood enhanced its credit profile by pricing $700
million in senior notes at 6.25% due 2023 and redeemed all $350
million existing 7.75% senior notes due 2019. In September 2015,
Crestwood entered into an amended and restated $1.5 billion revolving
credit facility in connection with the simplification merger;
Crestwood has no senior notes maturing until 2020
-
In September 2015, completed merger between Crestwood Equity and
Crestwood Midstream Partners LP (“CMLP” or “Crestwood Midstream”),
with CMLP unitholders receiving 2.75 Crestwood Equity units for each
CMLP unit owned and elimination of Incentive Distribution Rights
(“IDRs”)
-
Declared fourth quarter 2015 cash distribution of $1.375 per common
unit, or $5.50 per common unit on an annualized basis, paid on
February 12, 2016 to unitholders of record as of February 5, 2016
Management Commentary
“In 2015, Crestwood delivered higher Adjusted EBITDA and distributable
cash flow despite significant commodity price declines during the year
and record warm temperatures in the fourth quarter 2015, both of which
impacted our customers’ business activities,” stated Robert G. Phillips,
Chairman, President and Chief Executive Officer of Crestwood’s general
partner. “Our performance highlights both the quality of our assets and
the numerous steps we took, in 2015, to enhance our competitive position
in a challenging market. I am very proud of the team’s execution around
streamlining our organization, extending our long-term debt, reducing
costs and improving customer service, and completing the simplification
merger. Despite the prolonged upheaval in the capital markets, Crestwood
remains fundamentally sound and focused on the future.”
Mr. Phillips added, “We expect 2016 to present similar operating and
financial challenges for many of our customers, and affect our business
through lower volumes across some of our assets. However, we have
certain assets and lines of business that will do relatively better, in
2016, given their competitive position, customers and contract makeup.
Given that outlook, we expect our base business to produce solid results
and we intend to continue to evaluate all opportunities to strengthen
the Partnership and remain competitive in a ’lower-for-longer’ period
for the industry.”
2016 Outlook
Crestwood’s diverse assets, fixed-fee contract portfolio and strong
customer base demonstrated resilience in 2015. Crestwood expects to
generate Adjusted EBITDA of $490 million to $520 million in 2016,
reflecting expectations that current industry fundamentals will continue
during 2016. This forecast does not include completion of any
acquisitions or major growth projects.
Crestwood will continue to benefit from its contract profile which is
comprised of 56% take-or-pay, 36% fixed fee, and 8% variable contracts.
Crestwood has a balanced and diversified mix of customers across its
three business segments that include integrated producers, refiners,
utilities, and petrochemical companies. Crestwood has proactively worked
with counterparties with potential liquidity issues to mitigate working
capital exposure in the event of continued market deterioration.
Based on our current budget forecast, we anticipate reduced volumes
across much of Crestwood’s asset portfolio during a period of prolonged
weakness in commodity pricing. Crestwood anticipates average volumes
across its Gathering and Processing segment to be down 15% to 20%, the
Marketing, Supply and Logistics segment to remain flat, and the Storage
and Transportation segment to increase up to 5% year-over-year. Adjusted
EBITDA contribution by operating segment is set forth below:
|
|
|
|
|
$US millions
|
|
Adj. EBITDA Range
|
|
Operating Segment
|
|
Low
|
|
High
|
|
Gathering & Processing
|
|
$
|
235
|
|
-
|
$
|
250
|
|
|
Storage & Transportation
|
|
|
225
|
|
-
|
|
235
|
|
|
Marketing, Supply & Logistics
|
|
|
95
|
|
-
|
|
100
|
|
|
Less: Corporate G&A
|
|
|
(65
|
)
|
|
|
(65
|
)
|
|
FY 2016 Totals
|
|
$
|
490
|
|
-
|
$
|
520
|
|
|
|
|
|
|
|
Crestwood will limit its growth capital expenditures to approximately
$50 million to $75 million for the full-year 2016, compared to growth
capital of $151 million for the full-year 2015. Budgeted capital
projects in 2016 will include well connections and upgrades on the Arrow
and Willow Lake gathering systems and expansions of NGL storage and
terminal assets. In the event of improved commodity prices, Crestwood
has sufficient excess capacity across all systems to meet incremental
producer activity without additional capital requirements. Crestwood has
ample liquidity under its revolving credit agreement to fund all capital
requirements and will not require capital market access for additional
funding sources.
As part of Crestwood’s 2016 plan, management is focused on optimizing
its balance sheet and enhancing its overall liquidity position to
address near-term cost of capital limitations through a comprehensive
strategy to meet its strategic and financial objectives. In addition,
Crestwood has identified an additional $10 million of potential O&M and
G&A cost savings in 2016.
Robert T. Halpin, Senior Vice President and Chief Financial Officer,
commented, “We are underway in executing a strategy to achieve our
targeted leverage goals, improve distribution coverage, substantially
de-risk Crestwood’s investment profile and position Crestwood to emerge
from this challenging market as a stronger, better capitalized company.”
Fourth Quarter 2015 Segment Results
Gathering and Processing segment EBITDA totaled $57.2 million in the
fourth quarter 2015, exclusive of loss from unconsolidated affiliate and
non-cash impairments of goodwill and long-lived assets noted below,
compared to $68.1 million in the fourth quarter 2014. During the fourth
quarter 2015, average natural gas gathering volumes were 980 million
cubic feet per day (“MMcf/d”), crude oil gathering volumes were 70
MBbls/d, processing volumes were 221 MMcf/d and compression volumes were
460 MMcf/d. Segment performance was impacted by lower gathering volumes
in the southwest Marcellus and Barnett regions resulting from production
shut-ins due to low natural gas and NGL prices, downstream constraints
and natural production declines, offset by a 22% quarter-over-quarter
reduction in segment operating expenses.
Storage and Transportation segment EBITDA totaled $52.2 million in the
fourth quarter 2015, exclusive of loss from unconsolidated affiliates
and non-cash goodwill impairments noted below, compared to $55.0 million
in the fourth quarter 2014 (excluding gains on long-lived assets and
earnings from unconsolidated affiliates). During the fourth quarter
2015, natural gas storage and transportation volumes averaged 2.0 Bcf/d,
compared to 2.1 Bcf/d in the fourth quarter 2014. Volumes were
negatively impacted during the quarter due to unseasonably warm weather
and depressed regional natural gas pricing. The COLT Hub contributed
EBITDA of $17.8 million, a 12% increase from $15.9 million in the fourth
quarter 2014, primarily as a result of higher take-or-pay revenues
offsetting reduced loading volumes as a result of narrowed spreads
between WTI and Brent crude pricing.
Marketing, Supply and Logistics segment EBITDA totaled $28.2 million in
the fourth quarter 2015, exclusive of non-cash impairments of goodwill
and long-lived assets noted below, compared to $31.1 million in the
fourth quarter 2014. Segment EBITDA during the quarter was largely
impacted by unseasonably warm weather in the northeast US region as a
result of a 20-year record low of heating degree days. This lower demand
for NGLs impacted our trucking, storage and terminal operations offset
by strong performance from our supply team. Crestwood continues to
expand this business through new NGL marketing agreements, LPG rail
terminal expansions and increased marketing opportunities in the West
Coast and Rocky Mountain regions.
Excluding $2.1 million of costs incurred related to the merger of CEQP
and CMLP, combined O&M and G&A expenses in the fourth quarter 2015 were
reduced by 14%, or $11.7 million, compared to the fourth quarter 2014.
In 2015, Crestwood exceeded its 2015 cost reduction goal by removing
$26.4 million in operating and maintenance expense and general and
administrative expenses (after excluding $29.4 million of costs incurred
to achieve these cost reductions), 76% above its stated target of $15
million.
Business Update
Northeast Storage and Transportation
Crestwood completed several expansion projects on its MARC I and
North/South pipelines in 2015 which will make full-year contributions in
2016. Our favorable outlook in 2016, for these premier assets, is based
on growing long-term demand for low-cost natural gas in the region and a
diverse utility and producer customer base with a majority firm
take-or-pay contracts and high system utilization rates. Approximately
10% of our contracted capacity is up for renewal in 2016. Re-contracting
interest in this capacity remains strong and Crestwood expects to renew
at favorable market rates due to the facilities’ proximity to growing
northeast and mid-Atlantic natural gas markets.
Southwest Marcellus Gathering and Compression
Antero Resources (“Antero”) volumes averaged 432 MMcf/d in the fourth
quarter 2015 compared to 522 MMcf/d in the third quarter and 550 MMcf/d
for the full year 2015. Fourth quarter volumes were impacted by
downstream constraints and economic shut-ins by Antero of approximately
120 MMcf/d in November 2015 and 70 MMcf/d in December 2015. Fourth
quarter operating margin was also impacted by approximately 11 Bcf of
throughput under an incentive rate agreement with Antero. A new third
party pipeline was placed in service in December 2015, providing Antero
access to higher priced, mid-Atlantic and Gulf Coast markets and
canceling Crestwood’s incentive rate agreement with Antero. As a result,
previously curtailed volumes have been brought on-line and the system is
averaging gathering volumes of approximately 480 MMcf/d since January 1,
2016.
Barnett Gathering and Processing
In January 2016, Quicksilver Resources (“Quicksilver”) announced that it
signed an agreement with BlueStone Natural Resources II, LLC
(“BlueStone”) for the sale of Quicksilver’s US assets. BlueStone has
until March 31, 2016 to complete the transaction. Crestwood remains
encouraged by this next step in Quicksilver’s bankruptcy process and we
are involved in constructive dialogue with BlueStone on its plan for
future development of the assets.
Capitalization and Liquidity Update
As of December 31, 2015, Crestwood had approximately $2.5 billion of
debt outstanding, composed primarily of $1.8 billion of fixed-rate
senior notes and $735 million outstanding under its $1.5 billion
revolving credit facility. Crestwood has ample liquidity under its
revolver to fund expected capital expenditures during 2016 and will not
require additional capital funding sources.
In March 2015, Crestwood successfully priced $700 million in senior
notes at 6.25%. Proceeds from the issuance were used to redeem all $350
million existing 7.75% senior notes due 2019 and repay a portion of the
revolving credit facility. As a result, Crestwood’s nearest senior note
maturity is 2020.
Crestwood currently has 62.1 million preferred units outstanding which
pay a quarterly distribution of 9.25% payable in cash or through the
issuance of additional preferred units. On February 12, 2016, holders of
the preferred units received 1.4 million additional preferred units
related to the fourth quarter 2015 distribution declared.
Impairments
Generally Accepted Accounting Principles (“GAAP”) require us to record
the assets and goodwill in our gathering and processing segment, storage
and transportation segment and marketing, supply and logistics segment
at fair value when acquired. Our storage and transportation and
marketing, supply and logistics assets were primarily acquired in 2013
as a result of the Crestwood Inergy merger. GAAP further requires
continuing analysis to assess the recoverability of assigned values,
including goodwill. As a result of this analysis, Crestwood recorded, in
fiscal year 2015, goodwill impairments of $1.4 billion, long-lived asset
impairments of $821.2 million and impairments of investments in
unconsolidated affiliates of $74.8 million, primarily related to its
COLT Hub, Barnett, Fayetteville and Marketing, Supply and Logistics
assets. These impairments primarily resulted from increasing the
discount rate utilized in determining the fair value of these assets
when taking into consideration actual commodity price declines since
2014, continued commodity price weakness in 2016 and in future periods
based on forward commodity markets and its impact on the midstream
industry in general and Crestwood’s customers specifically on the
affected assets, and the corresponding impact all of these factors had
in 2015 on Crestwood’s unit price.
Upcoming Conference Participation
Crestwood management will participate in Barclay’s Select Series: MLP
Corporate Access Day on March 1, 2016 and the Morgan Stanley MLP
Diversified Natural Gas, Utilities & Clean Tech Conference on March 2,
2016 in New York, NY. Prior to the meetings presentation materials will
be posted to the Investors section of Crestwood’s website at www.crestwoodlp.com.
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 may participate in
the call either by phone or audio webcast.
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By Phone:
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Dial 877-407-8037 or 201-689-8037 at least 10 minutes before the
call and ask for the Crestwood Earnings Call. A replay will be
available for 7 days by dialing 877-660-6853 or 201-612-7415 and
using the access code 13628604#.
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By Webcast:
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Connect to the webcast via the “Presentations” page of Crestwood’s
Investor Relations 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.
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Non-GAAP Financial Measures
Adjusted EBITDA and adjusted distributable 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 unconventional 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; and
gathering, storage, terminalling and marketing of crude oil.
1 Please see non-GAAP reconciliation table included at the
end of the press release.
|
CRESTWOOD EQUITY PARTNERS LP
|
|
Consolidated Statements of Operations
|
|
(in millions, except unit and per unit data)
|
|
(unaudited)
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended December 31,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Gathering and processing
|
|
$
|
327.4
|
|
|
$
|
495.5
|
|
|
$
|
1,377.1
|
|
|
$
|
2,163.7
|
|
|
Storage and transportation
|
|
65.2
|
|
|
67.0
|
|
|
266.3
|
|
|
264.6
|
|
|
Marketing, supply and logistics
|
|
235.6
|
|
|
434.1
|
|
|
985.5
|
|
|
1,500.0
|
|
|
Related party
|
|
0.9
|
|
|
0.6
|
|
|
3.9
|
|
|
3.0
|
|
|
|
|
629.1
|
|
|
997.2
|
|
|
2,632.8
|
|
|
3,931.3
|
|
|
Costs of product/services sold:
|
|
|
|
|
|
|
|
|
|
Gathering and processing
|
|
255.6
|
|
|
408.9
|
|
|
1,075.0
|
|
|
1,817.7
|
|
|
Storage and transportation
|
|
4.3
|
|
|
5.4
|
|
|
20.1
|
|
|
33.3
|
|
|
Marketing, supply and logistics
|
|
179.5
|
|
|
364.0
|
|
|
759.5
|
|
|
1,272.1
|
|
|
Related party
|
|
5.7
|
|
|
10.1
|
|
|
28.9
|
|
|
42.2
|
|
|
|
|
445.1
|
|
|
788.4
|
|
|
1,883.5
|
|
|
3,165.3
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
Operations and maintenance
|
|
46.4
|
|
|
54.6
|
|
|
190.2
|
|
|
203.3
|
|
|
General and administrative
|
|
25.4
|
|
|
26.8
|
|
|
116.3
|
|
|
100.2
|
|
|
Depreciation, amortization and accretion
|
|
75.6
|
|
|
76.1
|
|
|
300.1
|
|
|
285.3
|
|
|
|
|
147.4
|
|
|
157.5
|
|
|
606.6
|
|
|
588.8
|
|
|
Other operating income (expense):
|
|
|
|
|
|
|
|
|
|
Loss on long-lived assets, net
|
|
(817.3
|
)
|
|
(2.7
|
)
|
|
(821.2
|
)
|
|
(1.9
|
)
|
|
Goodwill impairment
|
|
(515.4
|
)
|
|
(48.8
|
)
|
|
(1,406.3
|
)
|
|
(48.8
|
)
|
|
Loss on contingent consideration
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8.6
|
)
|
|
Operating income (loss)
|
|
(1,296.1
|
)
|
|
(0.2
|
)
|
|
(2,084.8
|
)
|
|
117.9
|
|
|
Earnings (loss) from unconsolidated affiliates, net
|
|
(72.0
|
)
|
|
0.6
|
|
|
(60.8
|
)
|
|
(0.7
|
)
|
|
Interest and debt expense, net
|
|
(35.4
|
)
|
|
(31.3
|
)
|
|
(140.1
|
)
|
|
(127.1
|
)
|
|
Loss on modification/extinguishment of debt
|
|
(0.2
|
)
|
|
—
|
|
|
(20.0
|
)
|
|
—
|
|
|
Other income, net
|
|
0.1
|
|
|
0.2
|
|
|
0.6
|
|
|
0.6
|
|
|
Loss before income taxes
|
|
(1,403.6
|
)
|
|
(30.7
|
)
|
|
(2,305.1
|
)
|
|
(9.3
|
)
|
|
Provision (benefit) for income taxes
|
|
(1.2
|
)
|
|
—
|
|
|
(1.4
|
)
|
|
1.1
|
|
|
Net loss
|
|
(1,402.4
|
)
|
|
(30.7
|
)
|
|
(2,303.7
|
)
|
|
(10.4
|
)
|
|
Net (income) loss attributable to non-controlling partners
|
|
(5.9
|
)
|
|
69.1
|
|
|
636.8
|
|
|
66.8
|
|
|
Net income (loss) attributable to Crestwood Equity Partners LP
|
|
$
|
(1,408.3
|
)
|
|
$
|
38.4
|
|
|
$
|
(1,666.9
|
)
|
|
$
|
56.4
|
|
|
Net income attributable to preferred units
|
|
(6.2
|
)
|
|
—
|
|
|
(6.2
|
)
|
|
—
|
|
|
Net income (loss) attributable to partners
|
|
$
|
(1,414.5
|
)
|
|
$
|
38.4
|
|
|
$
|
(1,673.1
|
)
|
|
$
|
56.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Subordinated unitholders' interest in net income
|
|
$
|
—
|
|
|
$
|
0.9
|
|
|
$
|
—
|
|
|
$
|
1.3
|
|
|
Common unitholders' interest in net income (loss)
|
|
$
|
(1,414.5
|
)
|
|
$
|
37.5
|
|
|
$
|
(1,673.1
|
)
|
|
$
|
55.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per limited partner unit:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(20.77
|
)
|
|
$
|
2.06
|
|
|
$
|
(54.00
|
)
|
|
$
|
3.03
|
|
|
Diluted
|
|
$
|
(20.77
|
)
|
|
$
|
2.06
|
|
|
$
|
(54.00
|
)
|
|
$
|
3.03
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average limited partners’ units outstanding (in thousands):
|
|
Basic
|
|
68,119
|
|
|
18,202
|
|
|
30,983
|
|
|
18,201
|
|
|
Dilutive units
|
|
—
|
|
|
439
|
|
|
—
|
|
|
439
|
|
|
Diluted
|
|
68,119
|
|
|
18,641
|
|
|
30,983
|
|
|
18,640
|
|
|
|
|
CRESTWOOD EQUITY PARTNERS LP
|
|
Selected Balance Sheet Data
|
|
(in millions)
|
|
(unaudited)
|
|
|
|
|
|
December 31,
|
|
|
|
2015
|
|
2014
|
|
Cash and cash equivalents
|
|
$
|
0.5
|
|
|
$
|
8.8
|
|
|
|
|
|
|
|
Outstanding debt:
|
|
|
|
|
|
Crestwood Equity Partners LP (a)
|
|
|
|
|
|
Revolving Credit Facility
|
|
$
|
—
|
|
|
$
|
369.0
|
|
Senior Notes
|
|
—
|
|
|
11.4
|
|
Other
|
|
0.2
|
|
|
0.8
|
|
Subtotal
|
|
$
|
0.2
|
|
|
$
|
381.2
|
|
|
|
|
|
|
|
Crestwood Midstream Partners LP (b)
|
|
|
|
|
|
Revolving Credit Facility
|
|
$
|
735.0
|
|
|
$
|
555.0
|
|
Senior Notes
|
|
1,800.0
|
|
|
1,450.0
|
|
Other
|
|
8.6
|
|
|
10.3
|
|
Subtotal
|
|
$
|
2,543.6
|
|
|
$
|
2,015.3
|
|
|
|
|
|
|
|
Total debt
|
|
$
|
2,543.8
|
|
|
$
|
2,396.5
|
|
|
|
|
|
|
|
Total partners' capital
|
|
$
|
2,946.9
|
|
|
$
|
5,584.5
|
|
|
|
|
|
|
|
Crestwood Equity Partners LP partners'
capital
|
|
|
|
|
|
Common units outstanding
|
|
68.6
|
|
|
18.6
|
|
(a)
|
|
Crestwood Midstream and its subsidiaries do not provide credit
support or guarantee any amounts outstanding under CEQP’s credit
facility or senior notes.
|
|
(b)
|
|
CEQP and its subsidiaries do not provide credit support or guarantee
any amounts outstanding under the credit facility or senior notes of
Crestwood Midstream.
|
|
|
|
CRESTWOOD EQUITY PARTNERS LP
|
|
Reconciliation of Non-GAAP Financial Measures
|
|
(in millions)
|
|
(unaudited)
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended December 31,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
EBITDA
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(1,402.4
|
)
|
|
$
|
(30.7
|
)
|
|
$
|
(2,303.7
|
)
|
|
$
|
(10.4
|
)
|
|
Interest and debt expense, net
|
|
35.4
|
|
|
31.3
|
|
|
140.1
|
|
|
127.1
|
|
|
Loss on modification/extinguishment of debt
|
|
0.2
|
|
|
—
|
|
|
20.0
|
|
|
—
|
|
|
Provision (benefit) for income taxes
|
|
(1.2
|
)
|
|
—
|
|
|
(1.4
|
)
|
|
1.1
|
|
|
Depreciation, amortization and accretion
|
|
75.6
|
|
|
76.1
|
|
|
300.1
|
|
|
285.3
|
|
|
EBITDA (a)
|
|
$
|
(1,292.4
|
)
|
|
$
|
76.7
|
|
|
$
|
(1,844.9
|
)
|
|
$
|
403.1
|
|
|
Significant items impacting EBITDA:
|
|
|
|
|
|
|
|
|
|
Unit-based compensation charges
|
|
4.1
|
|
|
4.9
|
|
|
19.7
|
|
|
21.3
|
|
|
Loss on long-lived assets, net
|
|
817.3
|
|
|
2.7
|
|
|
821.2
|
|
|
1.9
|
|
|
Goodwill impairment
|
|
515.4
|
|
|
48.8
|
|
|
1,406.3
|
|
|
48.8
|
|
|
Loss on contingent consideration
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.6
|
|
|
(Earnings) loss from unconsolidated affiliates, net
|
|
72.0
|
|
|
(0.6
|
)
|
|
60.8
|
|
|
0.7
|
|
|
Adjusted EBITDA from unconsolidated affiliates, net
|
|
6.9
|
|
|
2.9
|
|
|
25.3
|
|
|
6.9
|
|
|
Change in fair value of commodity inventory-related derivative
contracts
|
|
(5.3
|
)
|
|
(3.5
|
)
|
|
5.4
|
|
|
(10.3
|
)
|
|
Significant transaction and environmental related costs and other
items
|
|
0.9
|
|
|
0.8
|
|
|
33.6
|
|
|
14.9
|
|
|
Adjusted EBITDA (a)
|
|
$
|
118.9
|
|
|
$
|
132.7
|
|
|
$
|
527.4
|
|
|
$
|
495.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributable Cash Flow
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (a)
|
|
$
|
118.9
|
|
|
$
|
132.7
|
|
|
$
|
527.4
|
|
|
$
|
495.9
|
|
|
Cash interest expense (b)
|
|
(33.5
|
)
|
|
(29.4
|
)
|
|
(132.3
|
)
|
|
(121.3
|
)
|
|
Maintenance capital expenditures (c)
|
|
(10.0
|
)
|
|
(9.4
|
)
|
|
(23.4
|
)
|
|
(27.6
|
)
|
|
(Provision) benefit for income taxes
|
|
1.2
|
|
|
—
|
|
|
1.4
|
|
|
(1.1
|
)
|
|
Deficiency payments
|
|
(0.9
|
)
|
|
3.5
|
|
|
3.6
|
|
|
10.7
|
|
|
Distributable cash flow attributable to CEQP
|
|
75.7
|
|
|
97.4
|
|
|
376.7
|
|
|
356.6
|
|
|
Distributions to Niobrara Preferred
|
|
(3.8
|
)
|
|
—
|
|
|
(15.2
|
)
|
|
—
|
|
|
Distributable cash flow attributable to CEQP common (d)
|
|
$
|
71.9
|
|
|
$
|
97.4
|
|
|
$
|
361.5
|
|
|
$
|
356.6
|
|
|
(a)
|
|
EBITDA is defined as income before income taxes, plus debt-related
costs (net interest and debt expense and loss on
modification/extinguishment of debt) and depreciation, amortization
and accretion expense. In addition, Adjusted EBITDA considers the
adjusted earnings impact of our unconsolidated affiliates by
adjusting our equity earnings or losses from our unconsolidated
affiliates for our proportionate share of their depreciation and
interest. Adjusted EBITDA also considers the impact of certain
significant items, such as unit-based compensation charges, gains
and impairments of long-lived assets and goodwill, gains and losses
on acquisition-related contingencies, third party costs incurred
related to potential and completed acquisitions, certain
environmental remediation costs, certain costs related to our 2015
cost savings initiatives, the change in fair value of commodity
inventory related derivative contracts, 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
that these derivatives relate to. 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 an alternative 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)
|
|
Cash interest expense less amortization of deferred financing costs
plus bond premium amortization plus or minus fair value adjustment
of interest rate swaps.
|
|
(c)
|
|
Maintenance capital expenditures are defined as those capital
expenditures which do not increase operating capacity or revenues
from existing levels. The year ended December 31, 2014, includes
$1.5 million of maintenance capital expenditures for January 1, 2014
to September 30, 2014 that was reclassified from growth capital
expenditures to maintenance capital expenditures.
|
|
(d)
|
|
Distributable cash flow is defined as Adjusted EBITDA, less cash
interest expense, maintenance capital expenditures, income taxes and
deficiency payments (primarily related to deferred revenue).
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 generally
accepted accounting principles 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 corporations and partnerships.
|
|
|
|
CRESTWOOD EQUITY PARTNERS LP
|
|
Reconciliation of Non-GAAP Financial Measures
|
|
(in millions)
|
|
(unaudited)
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended December 31,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
EBITDA
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
139.1
|
|
|
$
|
108.2
|
|
|
$
|
440.7
|
|
|
$
|
283.0
|
|
|
Net changes in operating assets and liabilities
|
|
(52.4
|
)
|
|
(5.8
|
)
|
|
(98.0
|
)
|
|
73.8
|
|
|
Amortization of debt-related deferred costs, discounts and premiums
|
|
(2.3
|
)
|
|
(2.6
|
)
|
|
(8.9
|
)
|
|
(8.5
|
)
|
|
Interest and debt expense, net
|
|
35.4
|
|
|
31.3
|
|
|
140.1
|
|
|
127.1
|
|
|
Market adjustment on interest rate swap
|
|
—
|
|
|
0.7
|
|
|
0.5
|
|
|
2.7
|
|
|
Unit-based compensation charges
|
|
(4.1
|
)
|
|
(4.9
|
)
|
|
(19.7
|
)
|
|
(21.3
|
)
|
|
Loss on long-lived assets, net
|
|
(817.3
|
)
|
|
(2.7
|
)
|
|
(821.2
|
)
|
|
(1.9
|
)
|
|
Goodwill impairment
|
|
(515.4
|
)
|
|
(48.8
|
)
|
|
(1,406.3
|
)
|
|
(48.8
|
)
|
|
Loss on contingent consideration
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8.6
|
)
|
|
Earnings (loss) from unconsolidated affiliates, net, adjusted for
cash distributions
|
|
(75.2
|
)
|
|
0.6
|
|
|
(73.6
|
)
|
|
(0.7
|
)
|
|
Deferred income taxes
|
|
1.1
|
|
|
0.7
|
|
|
3.6
|
|
|
5.2
|
|
|
Provision (benefit) for income taxes
|
|
(1.2
|
)
|
|
—
|
|
|
(1.4
|
)
|
|
1.1
|
|
|
Other non-cash expense
|
|
(0.1
|
)
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
EBITDA (a)
|
|
$
|
(1,292.4
|
)
|
|
$
|
76.7
|
|
|
$
|
(1,844.9
|
)
|
|
$
|
403.1
|
|
|
Unit-based compensation charges
|
|
4.1
|
|
|
4.9
|
|
|
19.7
|
|
|
21.3
|
|
|
Loss on long-lived assets, net
|
|
817.3
|
|
|
2.7
|
|
|
821.2
|
|
|
1.9
|
|
|
Goodwill impairment
|
|
515.4
|
|
|
48.8
|
|
|
1,406.3
|
|
|
48.8
|
|
|
Loss on contingent consideration
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.6
|
|
|
(Earnings) loss from unconsolidated affiliates, net
|
|
72.0
|
|
|
(0.6
|
)
|
|
60.8
|
|
|
0.7
|
|
|
Adjusted EBITDA from unconsolidated affiliates, net
|
|
6.9
|
|
|
2.9
|
|
|
25.3
|
|
|
6.9
|
|
|
Change in fair value of commodity inventory-related derivative
contracts
|
|
(5.3
|
)
|
|
(3.5
|
)
|
|
5.4
|
|
|
(10.3
|
)
|
|
Significant transaction and environmental related costs and other
items
|
|
0.9
|
|
|
0.8
|
|
|
33.6
|
|
|
14.9
|
|
|
Adjusted EBITDA (a)
|
|
$
|
118.9
|
|
|
$
|
132.7
|
|
|
$
|
527.4
|
|
|
$
|
495.9
|
|
|
(a)
|
|
EBITDA is defined as income before income taxes, plus debt-related
costs (net interest and debt expense and loss on
modification/extinguishment of debt) and depreciation, amortization
and accretion expense. In addition, Adjusted EBITDA considers the
adjusted earnings impact of our unconsolidated affiliates by
adjusting our equity earnings or losses from our unconsolidated
affiliates for our proportionate share of their depreciation and
interest. Adjusted EBITDA also considers the impact of certain
significant items, such as unit-based compensation charges, gains
and impairments of long-lived assets and goodwill, gains and losses
on acquisition-related contingencies, third party costs incurred
related to potential and completed acquisitions, certain
environmental remediation costs, certain costs related to our 2015
cost savings initiatives, the change in fair value of commodity
inventory-related derivative contracts, 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
that these derivatives relate to. 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 an alternative 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.
|
|
|
|
CRESTWOOD EQUITY PARTNERS LP
|
|
Segment Data
|
|
(in millions)
|
|
(unaudited)
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended December 31,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Gathering and Processing
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
340.5
|
|
|
$
|
515.4
|
|
|
$
|
1,447.7
|
|
|
$
|
2,216.8
|
|
|
Costs of product/services sold
|
|
261.3
|
|
|
419.0
|
|
|
1,103.9
|
|
|
1,859.9
|
|
|
Operations and maintenance expense
|
|
22.0
|
|
|
28.3
|
|
|
89.0
|
|
|
102.8
|
|
|
Loss on long-lived assets, net
|
|
(786.1
|
)
|
|
(32.8
|
)
|
|
(787.3
|
)
|
|
(32.7
|
)
|
|
Goodwill impairment
|
|
(69.9
|
)
|
|
(18.5
|
)
|
|
(329.7
|
)
|
|
(18.5
|
)
|
|
Loss on contingent consideration
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8.6
|
)
|
|
Earnings (loss) from unconsolidated affiliate
|
|
(49.0
|
)
|
|
0.4
|
|
|
(43.4
|
)
|
|
0.5
|
|
|
EBITDA
|
|
$
|
(847.8
|
)
|
|
$
|
17.2
|
|
|
$
|
(905.6
|
)
|
|
$
|
194.8
|
|
|
|
|
|
|
|
|
|
|
|
|
Storage and Transportation
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
65.2
|
|
|
$
|
67.0
|
|
|
$
|
266.3
|
|
|
$
|
264.6
|
|
|
Costs of product/services sold
|
|
4.3
|
|
|
5.4
|
|
|
20.1
|
|
|
33.3
|
|
|
Operations and maintenance expense
|
|
8.7
|
|
|
6.6
|
|
|
31.7
|
|
|
28.8
|
|
|
Gain (loss) on long-lived assets
|
|
—
|
|
|
33.2
|
|
|
(1.6
|
)
|
|
33.8
|
|
|
Goodwill impairment
|
|
(275.4
|
)
|
|
—
|
|
|
(623.4
|
)
|
|
—
|
|
|
Earnings (loss) from unconsolidated affiliates
|
|
(23.0
|
)
|
|
0.2
|
|
|
(17.4
|
)
|
|
(1.2
|
)
|
|
EBITDA
|
|
$
|
(246.2
|
)
|
|
$
|
88.4
|
|
|
$
|
(427.9
|
)
|
|
$
|
235.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing, Supply and Logistics
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
168.9
|
|
|
$
|
384.0
|
|
|
$
|
918.8
|
|
|
$
|
1,449.9
|
|
|
Costs of product/services sold
|
|
125.0
|
|
|
333.2
|
|
|
759.5
|
|
|
1,272.1
|
|
|
Operations and maintenance expense
|
|
15.7
|
|
|
19.7
|
|
|
69.5
|
|
|
71.7
|
|
|
Loss on long-lived assets
|
|
(31.2
|
)
|
|
(3.1
|
)
|
|
(32.3
|
)
|
|
(3.0
|
)
|
|
Goodwill impairment
|
|
(170.1
|
)
|
|
(30.3
|
)
|
|
(453.2
|
)
|
|
(30.3
|
)
|
|
EBITDA
|
|
$
|
(173.1
|
)
|
|
$
|
(2.3
|
)
|
|
$
|
(395.7
|
)
|
|
$
|
72.8
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment EBITDA
|
|
$
|
(1,267.1
|
)
|
|
$
|
103.3
|
|
|
$
|
(1,729.2
|
)
|
|
$
|
502.7
|
|
|
Corporate
|
|
(25.3
|
)
|
|
(26.6
|
)
|
|
(115.7
|
)
|
|
(99.6
|
)
|
|
EBITDA
|
|
$
|
(1,292.4
|
)
|
|
$
|
76.7
|
|
|
$
|
(1,844.9
|
)
|
|
$
|
403.1
|
|
|
|
|
CRESTWOOD EQUITY PARTNERS LP
|
|
Operating Statistics
|
|
(unaudited)
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended December 31,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Gathering and Processing (MMcf/d)
|
|
|
|
|
|
|
|
|
|
Arrow
|
|
43.7
|
|
|
42.9
|
|
|
43.0
|
|
|
33.1
|
|
|
Marcellus
|
|
431.7
|
|
|
629.1
|
|
|
550.1
|
|
|
597.9
|
|
|
Barnett rich
|
|
114.6
|
|
|
162.3
|
|
|
128.0
|
|
|
170.1
|
|
|
Barnett dry
|
|
194.6
|
|
|
261.3
|
|
|
213.3
|
|
|
247.2
|
|
|
Fayetteville
|
|
66.4
|
|
|
85.2
|
|
|
72.5
|
|
|
98.0
|
|
|
PRB Niobrara - Jackalope Gas Gathering (a)
|
|
78.1
|
|
|
68.4
|
|
|
79.7
|
|
|
56.5
|
|
|
Other
|
|
50.7
|
|
|
44.8
|
|
|
49.7
|
|
|
44.6
|
|
|
Total gathering volumes
|
|
979.8
|
|
|
1,294.0
|
|
|
1,136.3
|
|
|
1,247.4
|
|
|
Processing volumes
|
|
220.6
|
|
|
186.5
|
|
|
216.5
|
|
|
189.5
|
|
|
Compression volumes
|
|
459.7
|
|
|
657.7
|
|
|
579.0
|
|
|
542.3
|
|
|
Arrow Midstream
|
|
|
|
|
|
|
|
|
|
Crude oil (MBbls/d)
|
|
69.9
|
|
|
65.8
|
|
|
65.7
|
|
|
57.9
|
|
|
Water (MBbls/d)
|
|
27.9
|
|
|
19.3
|
|
|
26.4
|
|
|
17.8
|
|
|
|
|
|
|
|
|
|
|
|
|
Storage and Transportation
|
|
|
|
|
|
|
|
|
|
Northeast Storage - firm contracted capacity (Bcf)
|
|
34.4
|
|
|
34.8
|
|
|
34.4
|
|
|
34.8
|
|
|
% of operational capacity contracted
|
|
99
|
%
|
|
100
|
%
|
|
99
|
%
|
|
100
|
%
|
|
Firm storage services (MMcf/d)
|
|
277.9
|
|
|
384.5
|
|
|
336.7
|
|
|
458.3
|
|
|
Interruptible storage services (MMcf/d)
|
|
17.6
|
|
|
73.9
|
|
|
71.2
|
|
|
46.5
|
|
|
Northeast Transportation - firm contracted capacity (MMcf/d)
|
|
1,265.0
|
|
|
975.0
|
|
|
1,214.8
|
|
|
940.0
|
|
|
% of operational capacity contracted
|
|
87
|
%
|
|
100
|
%
|
|
87
|
%
|
|
100
|
%
|
|
Firm services (MMcf/d)
|
|
1,139.7
|
|
|
1,192.8
|
|
|
1,209.7
|
|
|
1,066.9
|
|
|
Interruptible services (MMcf/d)
|
|
199.8
|
|
|
208.5
|
|
|
190.2
|
|
|
252.5
|
|
|
Gulf Coast Storage - firm contracted capacity (Bcf) (b)
|
|
28.9
|
|
|
13.6
|
|
|
26.4
|
|
|
11.2
|
|
|
% of operational capacity contracted
|
|
75
|
%
|
|
35
|
%
|
|
69
|
%
|
|
30
|
%
|
|
Firm storage services (MMcf/d) (b)
|
|
196.1
|
|
|
56.2
|
|
|
161.2
|
|
|
88.5
|
|
|
Interruptible storage services (MMcf/d) (b)
|
|
161.7
|
|
|
145.1
|
|
|
137.3
|
|
|
70.3
|
|
|
COLT Hub
|
|
|
|
|
|
|
|
|
|
Rail loading (MBbls/d)
|
|
107.4
|
|
|
111.9
|
|
|
117.3
|
|
|
109.7
|
|
|
Connector pipeline (MBbls/d)
|
|
13.1
|
|
|
7.8
|
|
|
7.5
|
|
|
7.8
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing, Supply and Logistics
|
|
|
|
|
|
|
|
|
|
Crude barrels trucked (MBbls/d)
|
|
16.0
|
|
|
21.0
|
|
|
24.1
|
|
|
18.3
|
|
|
NGL Operations
|
|
|
|
|
|
|
|
|
|
Storage capacity, 100% contracted (MBbls)
|
|
1,700.0
|
|
|
1,500.0
|
|
|
1,700.0
|
|
|
1,500.0
|
|
|
Supply & Logistics volumes sold (MBbls/d)
|
|
81.2
|
|
|
97.4
|
|
|
95.4
|
|
|
80.0
|
|
|
West Coast volumes sold or processed (MBbls/d)
|
|
23.2
|
|
|
40.4
|
|
|
26.3
|
|
|
43.3
|
|
|
NGL volumes trucked (MBbls/d)
|
|
65.3
|
|
|
82.7
|
|
|
64.0
|
|
|
79.7
|
|
|
(a)
|
|
Represents 50% owned joint venture, operational data reported at
100%.
|
|
(b)
|
|
In December 2014, we sold our 100% interest in Tres Palacios Gas
Storage LLC, to a joint venture formed by Crestwood Midstream (owns
a 50.01% interest) and Brookfield Infrastructure Group (owns a
49.99% interest), operational data reported is at 100%.
|
|
(c)
|
|
Represents only throughput leaving the terminal. Total connector
pipeline throughput, including receivables was 38.2 MBbls/d and
33.7 MBbls/d for the three and twelve months ended December 31,
2015, 36.5 MBbls/d and 31.6 MBbls/d for the three and twelve
months ended December 31, 2014.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160223005713/en/
Source: Crestwood Equity Partners LP