Adjusted EBITDA increased 12% year-over-year driven by a 23% increase
in G&P segment EBITDA
Increased year-over-year producer activity drives 17% increase in
crude oil and natural gas gathering volumes and a 23% increase in
produced water gathering volumes
High utilization of the Bakken Bear Den Processing Plant results in
32% increase in year-over-year processing volumes; Construction has
begun on the 120 MMcf/d Bear Den Phase-2 expansion
200 MMcf/d Orla cryogenic processing plant on-track to be placed into
service by July 1, 2018 in the Delaware Basin
HOUSTON--(BUSINESS WIRE)--
Crestwood Equity Partners LP (NYSE: CEQP) (“Crestwood”) reported today
its financial and operating results for the three months ended March 31,
2018.
First Quarter 2018 Highlights
1
-
First quarter 2018 net income of $34.1 million, compared to net loss
of $19.4 million in first quarter 2017
-
First quarter 2018 Adjusted EBITDA of $101.7 million, compared to
$90.9 million in the first quarter 2017
-
First quarter 2018 distributable cash flow to common unitholders of
$53.4 million; The first quarter 2018 coverage ratio was approximately
1.25x
-
Ended first quarter 2018 with approximately $1.5 billion in total debt
and a 3.9x leverage ratio. Crestwood has substantial liquidity
available under its $1.5 billion revolver with $293 million drawn as
of March 31, 2018
-
Declared first quarter 2018 cash distribution of $0.60 per common
unit, or $2.40 per common unit on an annualized basis, to be paid on
May 15, 2018 to unitholders of record as of May 8, 2018
Management Commentary
“Crestwood delivered another quarter of strong results in the first
quarter 2018 driven by solid operations and continued volume growth
across our gathering and processing assets, resulting in a 12% increase
in year-over-year Adjusted EBITDA, and very healthy leverage and
coverage ratios of 3.9x and 1.25x, respectively,” stated Robert G.
Phillips, Chairman, President and Chief Executive Officer of Crestwood’s
general partner. “Crestwood’s first quarter results outperformed
internal expectations as favorable commodity prices continued to
encourage producer investment around our core assets and enhanced well
recoveries outperformed Crestwood’s type-curve assumptions, which led to
stronger volumes, despite harsh winter weather conditions that impacted
field operations in the Bakken and Powder River Basin during the
quarter.”
Mr. Phillips continued, “Our first quarter results keep us on-track to
achieve our guidance targets in 2018. We continue to prudently invest in
growth capital projects around our core assets that will begin to
materially grow Adjusted EBITDA and distributable cash flow in the
second half of 2018 and full-year 2019. We remain committed to financing
these projects with excess cash flow and our existing revolving credit
facility, eliminating any need to access the equity markets in 2018.”
“Looking ahead, by the end of the second quarter we expect to place our
Orla Express Pipeline and Orla Processing Plant in-service in the
Delaware Basin, where Willow Lake volumes have been running near
capacity and six rigs are currently active on our Nautilus system. By
the end of the third quarter, we will be completing the 2018 Arrow
debottlenecking projects increasing oil, gas and water capacity in the
Bakken. By the end of the fourth quarter, we anticipate completing the
next phase of Jackalope processing and system expansions to support
near-term rising volume forecasts in the Powder River Basin. As
Crestwood executes our 2018 growth program, we remain committed to
capital discipline and self-funding, which should position the
partnership for substantial distributable cash flow growth in late 2018
and full-year 2019. Strong project execution with a conservative
financing model continues to be our primary strategy which should unlock
unrecognized value in Crestwood and drive meaningful total returns for
our unitholders over the next few years.”
First Quarter 2018 Segment Results and Outlook
Gathering and Processing segment EBITDA totaled $82.0 million in the
first quarter 2018, compared to $66.5 million in the first quarter 2017.
During the first quarter 2018, average natural gas gathering volumes
were 1.0 billion cubic feet per day (“Bcf/d”), or 17% above first
quarter 2017, gas processing volumes were 274 million cubic feet per day
(“MMcf/d”), or 32% above first quarter 2017, compression volumes were
469 MMcf/d, or 1% above first quarter 2017, crude oil gathering volumes
were 80.2 thousand barrels per day (“MBbls/d”), or 17% above first
quarter 2017, and produced water volumes were 38.8 MBbls/d, or 23% above
first quarter 2017. G&P segment volume growth reflects increased well
completion activity by producers over the past twelve months in the
Bakken, Delaware Basin, Powder River Basin and southwest Marcellus as
producers continue to benefit from rising commodity prices and improved
recoveries. Crestwood expects continued growth in the G&P segment in
2018 as debottlenecking projects are completed in the Bakken, and
additional rigs are operated on acreage dedicated to the Delaware Basin
and Powder River Basin systems.
Storage and Transportation segment EBITDA totaled $12.0 million in the
first quarter 2018, compared to $17.2 million in the first quarter 2017.
During the first quarter 2018, segment EBITDA declined primarily as a
result of the expected lower crude oil rail loading volumes at the COLT
Hub. During the first quarter 2018, natural gas storage and
transportation volumes averaged 2.2 Bcf/d, compared to 2.0 Bcf/d in the
first quarter 2017. Segment volumes increased 10% year-over-year as a
result of higher firm storage services demand at Stagecoach due to
favorable winter weather conditions and higher firm and interruptible
services at Tres Palacios driven by growing Gulf Coast LNG demand.
Beginning in the third quarter 2018, the S&T segment will benefit from
the 5% cash distribution step-up provision in the Stagecoach Gas
Services joint venture agreement with Consolidated Edison. This will
result in approximately $4 million of incremental cash flow in 2018.
Stagecoach Gas Services and Tres Palacios Gas Storage are FERC regulated
assets that predominately charge negotiated market based rates which are
not subject to traditional cost of service based tariffs. Crestwood does
not expect either asset to be impacted by revisions to FERC’s 2005
Policy Statement for Recovery of Income Tax Costs.
Marketing, Supply and Logistics segment EBITDA totaled $13.2 million in
the first quarter 2018, compared to $16.7 million in the first quarter
2017. Both periods exclude the non-cash change in fair value of
commodity inventory-related derivative contracts. First quarter 2018
EBITDA reflects the divestiture of US Salt which contributed
approximately $6.0 million of segment EBITDA per quarter prior to its
sale in the fourth quarter 2017. In the first quarter 2018, the MS&L
segment benefited from increased propane demand due to colder
temperatures in the central and northeast regions, increased
transportation demand related to the shut-in of the Mariner East 1
pipeline, and expanded marketing and logistics services provided to
customers at Crestwood’s Bear Den plant in the Bakken and the Willow
Lake plant in the Delaware Basin.
Combined O&M and G&A expenses, net of non-cash unit based compensation
in the first quarter 2018 were $51.2 million compared to $52.8 million
in the first quarter 2017. Crestwood reduced combined O&M and G&A
expenses by approximately $2 million, or 3%, by reducing personnel
expenses, improving maintenance practices and utilizing strategic
purchasing and professional service agreements. In the second half of
2018, Crestwood expects combined O&M and G&A to increase approximately
2%-5% to reflect new assets being brought into service in the second
half of 2018 and activity across its high growth basins.
First Quarter 2018 Business Update
Bakken Update
During the first quarter 2018, the Arrow system averaged crude oil
volumes of 80.2 MBbls/d, natural gas volumes of 63.3 MMcf/d and produced
water volumes of 38.8 MBbls/d, an increase of 17%, 29% and 23%,
respectively, over the first quarter 2017. Gathering volumes on the
Arrow system remained robust in the first quarter 2018 despite harsh
winter weather conditions that resulted in freeze offs at the wellhead
and new well completion delays. During the first quarter, the Bear Den
Processing Plant was fully operational and provided Arrow producers
incremental flow assurance on produced natural gas volumes. Crestwood’s
MS&L segment has agreements with Arrow producers and downstream
fractionators to provide marketing and logistics services for the Bear
Den plant’s processed volumes.
In the first quarter 2018, Crestwood invested approximately $56 million
in growth projects on the Arrow system, which included the continued
debottlenecking and expansion of the gathering system. The
debottlenecking efforts in the first quarter included drilling two new
water disposal wells, adding new oil and water pumps and expansion of
gas gathering lines to lower system pressures. The ongoing system
expansion and improvements will increase the crude gathering capacity to
120 MBbls/d, natural gas gathering capacity to 150 MMcf/d and produced
water gathering capacity to 75 MBbls/d, which will eliminate system
curtailments and allow for the immediate capture of natural gas volumes
currently being flared and water volumes currently being trucked away
from the wellhead, while also providing producers excess capacity to
execute aggressive drilling and completion schedules going forward.
In April 2018, Crestwood began construction on the Bear Den Phase-2
plant expansion. The plant expansion will provide an additional 120
MMcf/d of gas processing capacity for a combined processing capacity of
150 MMcf/d. Once in-service, the expansion will significantly reduce
future flaring on the Fort Berthold Indian Reservation, provide producer
customers greater flow assurance, and will allow Crestwood to
immediately begin processing 100% of the natural gas on the Arrow
system. Phase 2 is expected to be in-service in the third quarter 2019.
Delaware Basin Update
During the first quarter 2018, Crestwood’s Delaware Basin gathering
assets averaged natural gas volumes of 129.5 MMcf/d, a 233% increase
over the first quarter 2017, and processing volumes averaged 67.8
MMcf/d, a 105% increase over the first quarter 2017. Delaware Basin
gathering and processing volumes increased meaningfully as a result of
the in-service of the Nautilus gathering system in Loving and Ward
counties, TX in June 2017. Currently there are six active rigs across
Crestwood’s Delaware Basin gathering systems. Crestwood expects
continued volume growth as a result of this incremental activity through
the remainder of 2018.
In the first quarter 2018, Crestwood Permian Basin Holdings LLC (“CPJV”)
invested approximately $47 million in growth projects in the Delaware
Basin. The CPJV currently has three projects underway including the Orla
Processing Plant, a 200 MMcf/d cryogenic gas processing plant, the Orla
Express Pipeline, a 33 mile, 20-inch-high pressure line connecting the
existing Willow Lake system with the Orla Processing Plant, and the
Nautilus-to-Orla Pipeline, a 28 mile, 20 inch high pressure line
connecting the Nautilus system to the Orla Processing Plant, which CPJV
is jointly constructing via its joint venture with Shell Midstream
Partners. All three projects are targeted to be in-service by July 1,
2018. Once the Orla plant is completed Crestwood will direct current
volumes on the Willow Lake plant via the Orla Express Pipeline and
repurpose the Willow Lake plant to provide off-load capacity. As part of
the contribution agreement entered into in June 2017, First Reserve will
begin receiving 50% of the cash flow generated by Willow Lake’s assets
after the Orla plant is placed in service. Upon completion of the Orla
Processing Plant, CPJV’s asset footprint in the Delaware Basin will span
over 300,000 acres of dedication, 255 MMcf/d of processing capacity, 650
MMcf/d of natural gas gathering capacity and 390 miles of pipe.
Powder River Basin Update
During the first quarter 2018, the Jackalope system averaged 75.1 MMcf/d
of natural gas gathering and 69.9 MMcf/d of processing, an increase of
59% and 55%, respectively, over the first quarter 2017. Despite harsh
winter conditions in the first quarter 2018, volumes on the Jackalope
system are expected to increase as Chesapeake Energy Corporation
(“Chesapeake”) commits additional resources to developing the acreage.
Chesapeake highlights the Powder River Basin as a core growth asset with
over 500 locations that offer greater than 40% rate of return at $60 per
barrel crude pricing. Chesapeake continues to enhance economics and
accelerate its Turner formation development activity as a result of a
combination of strong well-recoveries, favorable crude oil prices, and
process improvements that have driven a 35% reduction in drilling and
completion costs. Currently, Chesapeake has four active rigs on the
Jackalope system and is evaluating adding a fifth rig during the second
half of 2018.
The Jackalope system is a 50/50 joint venture with Williams Partners
(“Williams”). Based on Chesapeake’s current volume forecast of >80%
system volume growth by year-end 2018, Crestwood and Williams have
elected to proceed with an incremental compression project that will
expand the Bucking Horse processing plant capacity from 120 MMcf/d to
145 MMcf/d and the expansion of natural gas gathering lines to provide
incremental system capacity and lower wellhead pressures. Both projects
are expected to cost approximately $20 million gross and be in-service
by the fourth quarter 2018. Based on current Chesapeake forecasts, the
anticipated volume increase at Jackalope was utilized by Williams in
recording Jackalope’s GAAP revenues under a new revenue accounting
standard in first quarter. This new standard required Jackalope to defer
an additional $4 million of revenue in first quarter, which, when
combined with Crestwood’s policy to no longer adjust for changes in
deferred revenue, caused Crestwood’s proportionate share of Jackalope’s
Adjusted EBITDA and distributable cash flow to decrease by $2 million
during the first quarter of 2018.
In addition, the joint venture continues to evaluate the addition of a
new 200 MMcf/d gas processing plant, expansion of the gas gathering
system, and the development of a new crude gathering system. The joint
venture expects to reach final investment decision on the gathering and
processing system expansion by the end of the second quarter 2018.
Crestwood expects to execute these incremental growth opportunities
through its existing Crestwood Niobrara joint venture, which has
committed capital from its financial partners.
Capitalization and Liquidity Update
In the first quarter 2018, Crestwood invested approximately $58 million
net in growth capital projects. Crestwood remains on-track to execute
within its previously stated 2018 growth capital guidance of $250
million to $300 million for currently approved projects. As of March 31,
2018, Crestwood had approximately $1.5 billion of debt outstanding,
comprised of $1.2 billion of fixed-rate senior notes and $293 million
outstanding under its $1.5 billion revolving credit facility.
Crestwood’s leverage ratio was 3.9x as of March 31, 2018. Based on
Crestwood’s current outlook for the remainder of 2018, Crestwood expects
to complete the year with total leverage within its previously guided
ranges of 4.0-4.5x and does not expect any equity issuance to execute
its current growth capital plan. Crestwood currently has 71.3 million
preferred units outstanding (par value of $9.13 per unit) which pay a
fixed-rate annual cash distribution of 9.25%, payable quarterly.
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.
-
Deutsche Bank MLP Conference on May 9th in New York, NY
-
SunTrust Midstream Summit on May 10th in New York, NY
-
MLPA Energy and Infrastructure Conference on May 22nd – May
24th at the Hyatt Regency in Orlando, Florida. Robert G.
Phillips, Chairman, President and Chief Executive Officer, will make a
formal presentation at approximately 9:45 a.m. Eastern Time on
Wednesday, May 23rd
-
Stifel Cross Sector Insight Conference on June 11th – 13th
in Boston, MA
-
J.P. Morgan Energy Equity Conference on June 18th – 20th
in New York, NY
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 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
March 31,
|
|
|
|
2018
|
|
|
2017
|
Revenues:
|
|
|
|
|
|
|
Gathering and processing
|
|
|
$
|
340.3
|
|
|
|
$
|
368.1
|
|
Storage and transportation
|
|
|
4.2
|
|
|
|
10.0
|
|
Marketing, supply and logistics
|
|
|
770.2
|
|
|
|
449.5
|
|
Related party
|
|
|
0.3
|
|
|
|
0.5
|
|
Total revenues
|
|
|
1,115.0
|
|
|
|
828.1
|
|
Cost of products/services sold
|
|
|
965.8
|
|
|
|
683.5
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
Operations and maintenance
|
|
|
34.5
|
|
|
|
33.7
|
|
General and administrative
|
|
|
23.9
|
|
|
|
26.4
|
|
Depreciation, amortization and accretion
|
|
|
45.1
|
|
|
|
48.4
|
|
|
|
|
103.5
|
|
|
|
108.5
|
|
Other operating expenses:
|
|
|
|
|
|
|
Gain on long-lived assets, net
|
|
|
0.3
|
|
|
|
—
|
|
Operating income
|
|
|
46.0
|
|
|
|
36.1
|
|
Earnings from unconsolidated affiliates, net
|
|
|
12.4
|
|
|
|
8.1
|
|
Interest and debt expense, net
|
|
|
(24.4
|
)
|
|
|
(26.5
|
)
|
Loss on modification/extinguishment of debt
|
|
|
—
|
|
|
|
(37.3
|
)
|
Other income, net
|
|
|
0.1
|
|
|
|
0.1
|
|
Income (loss) before income taxes
|
|
|
34.1
|
|
|
|
(19.5
|
)
|
Benefit for income taxes
|
|
|
—
|
|
|
|
0.1
|
|
Net income (loss)
|
|
|
34.1
|
|
|
|
(19.4
|
)
|
Net income attributable to non-controlling partners
|
|
|
4.0
|
|
|
|
6.1
|
|
Net income (loss) attributable to Crestwood Equity Partners LP
|
|
|
30.1
|
|
|
|
(25.5
|
)
|
Net income attributable to preferred units
|
|
|
15.0
|
|
|
|
17.8
|
|
Net income (loss) attributable to partners
|
|
|
$
|
15.1
|
|
|
|
$
|
(43.3
|
)
|
|
|
|
|
|
|
|
Subordinated unitholders' interest in net income
|
|
|
$
|
0.1
|
|
|
|
$
|
—
|
|
Common unitholders' interest in net income (loss)
|
|
|
$
|
15.0
|
|
|
|
$
|
(43.3
|
)
|
|
|
|
|
|
|
|
Net income (loss) per limited partner unit:
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.21
|
|
|
|
$
|
(0.62
|
)
|
Diluted
|
|
|
$
|
0.21
|
|
|
|
$
|
(0.62
|
)
|
|
|
|
|
|
|
|
Weighted-average limited partners’ units outstanding (in thousands):
|
|
|
|
|
|
|
Basic
|
|
|
71,165
|
|
|
|
69,697
|
|
Dilutive units
|
|
|
789
|
|
|
|
—
|
|
Diluted
|
|
|
71,954
|
|
|
|
69,697
|
|
|
CRESTWOOD EQUITY PARTNERS LP
Selected Balance Sheet Data
(in millions)
|
|
|
|
March 31,
2018
|
|
|
December 31,
2017
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
$
|
7.3
|
|
|
|
$
|
1.3
|
|
|
|
|
|
|
|
Outstanding debt:
|
|
|
|
|
|
|
Crestwood Midstream Partners LP
|
|
|
|
|
|
|
Revolving Credit Facility
|
|
|
$
|
293.0
|
|
|
|
$
|
318.2
|
Senior Notes
|
|
|
1,200.0
|
|
|
|
1,200.0
|
Other
|
|
|
2.0
|
|
|
|
2.4
|
Subtotal
|
|
|
1,495.0
|
|
|
|
1,520.6
|
Less: deferred financing costs, net
|
|
|
26.6
|
|
|
|
28.4
|
Total debt
|
|
|
$
|
1,468.4
|
|
|
|
$
|
1,492.2
|
|
|
|
|
|
|
|
Total partners' capital
|
|
|
$
|
2,164.8
|
|
|
|
$
|
2,180.5
|
|
|
|
|
|
|
|
Crestwood Equity Partners LP partners'
capital
|
|
|
|
|
|
|
Common units outstanding
|
|
|
71.7
|
|
|
|
70.7
|
|
CRESTWOOD EQUITY PARTNERS LP
Reconciliation of Non-GAAP Financial Measures
(in millions)
(unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2018
|
|
|
2017
|
EBITDA
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
34.1
|
|
|
|
$
|
(19.4
|
)
|
Interest and debt expense, net
|
|
|
24.4
|
|
|
|
26.5
|
|
Loss on modification/extinguishment of debt
|
|
|
—
|
|
|
|
37.3
|
|
Benefit for income taxes
|
|
|
—
|
|
|
|
(0.1
|
)
|
Depreciation, amortization and accretion
|
|
|
45.1
|
|
|
|
48.4
|
|
EBITDA
(a)
|
|
|
$
|
103.6
|
|
|
|
$
|
92.7
|
|
Significant items impacting EBITDA:
|
|
|
|
|
|
|
Unit-based compensation charges
|
|
|
7.2
|
|
|
|
7.3
|
|
Gain on long-lived assets, net
|
|
|
(0.3
|
)
|
|
|
—
|
|
Earnings from unconsolidated affiliates, net
|
|
|
(12.4
|
)
|
|
|
(8.1
|
)
|
Adjusted EBITDA from unconsolidated affiliates, net
|
|
|
22.1
|
|
|
|
15.6
|
|
Change in fair value of commodity inventory-related derivative
contracts
|
|
|
(20.2
|
)
|
|
|
(18.6
|
)
|
Significant transaction and environmental related costs and other
items
|
|
|
1.7
|
|
|
|
2.0
|
|
Adjusted EBITDA
(a)
|
|
|
$
|
101.7
|
|
|
|
$
|
90.9
|
|
|
|
|
|
|
|
|
Distributable Cash Flow
|
|
|
|
|
|
|
Adjusted EBITDA (a) |
|
|
$
|
101.7
|
|
|
|
$
|
90.9
|
|
Cash interest expense (b) |
|
|
(23.1
|
)
|
|
|
(25.0
|
)
|
Maintenance capital expenditures (c) |
|
|
(6.0
|
)
|
|
|
(2.3
|
)
|
Adjusted EBITDA from unconsolidated affiliates, net
|
|
|
(22.1
|
)
|
|
|
—
|
|
Distributable cash flow from unconsolidated affiliates
|
|
|
21.2
|
|
|
|
—
|
|
Benefit for income taxes
|
|
|
—
|
|
|
|
0.1
|
|
Deficiency payments
|
|
|
—
|
|
|
|
(0.5
|
)
|
Distributable cash flow attributable to CEQP
|
|
|
71.7
|
|
|
|
63.2
|
|
Distributions to preferred
|
|
|
(15.0
|
)
|
|
|
—
|
|
Distributions to Niobrara preferred
|
|
|
(3.3
|
)
|
|
|
(3.8
|
)
|
Distributable cash flow attributable to CEQP common
(d)
|
|
|
$
|
53.4
|
|
|
|
$
|
59.4
|
|
|
|
|
(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 impairments. Adjusted EBITDA
also considers the impact of certain significant items, such as
unit-based compensation charges, gains or losses on long-lived
assets, 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 of our Marketing,
Supply and Logistics operations 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
generally accepted accounting principles (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 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)
|
|
Cash interest expense less amortization of deferred financing costs.
|
(c)
|
|
Maintenance capital expenditures are defined as those capital
expenditures which do not increase operating capacity or revenues
from existing levels.
|
(d)
|
|
Beginning in 2018, distributable cash flow is defined as Adjusted
EBITDA, adjusted for cash interest expense, maintenance capital
expenditures, income taxes, and our proportionate share (based on
the distribution percentage) of our unconsolidated affiliates'
distributable cash flow. In 2017, distributable cash flow was
defined as Adjusted EBITDA, less cash interest expense, maintenance
capital expenditures, income taxes, and changes in deferred revenue
(primarily related to deficiency payments). 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.
|
|
CRESTWOOD EQUITY PARTNERS LP
Reconciliation of Non-GAAP Financial Measures
(in millions)
(unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2018
|
|
|
2017
|
EBITDA
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
$
|
148.7
|
|
|
|
$
|
58.9
|
|
Net changes in operating assets and liabilities
|
|
|
(61.5
|
)
|
|
|
15.2
|
|
Amortization of debt-related deferred costs
|
|
|
(1.8
|
)
|
|
|
(1.8
|
)
|
Interest and debt expense, net
|
|
|
24.4
|
|
|
|
26.5
|
|
Unit-based compensation charges
|
|
|
(7.2
|
)
|
|
|
(7.3
|
)
|
Gain on long-lived assets, net
|
|
|
0.3
|
|
|
|
—
|
|
Earnings from unconsolidated affiliates, net, adjusted for cash
distributions received
|
|
|
0.6
|
|
|
|
0.3
|
|
Deferred income taxes
|
|
|
0.2
|
|
|
|
0.6
|
|
Benefit for income taxes
|
|
|
—
|
|
|
|
(0.1
|
)
|
Other non-cash (income) expense
|
|
|
(0.1
|
)
|
|
|
0.4
|
|
EBITDA
(a)
|
|
|
$
|
103.6
|
|
|
|
$
|
92.7
|
|
Unit-based compensation charges
|
|
|
7.2
|
|
|
|
7.3
|
|
Gain on long-lived assets, net
|
|
|
(0.3
|
)
|
|
|
—
|
|
Earnings from unconsolidated affiliates, net
|
|
|
(12.4
|
)
|
|
|
(8.1
|
)
|
Adjusted EBITDA from unconsolidated affiliates, net
|
|
|
22.1
|
|
|
|
15.6
|
|
Change in fair value of commodity inventory-related derivative
contracts
|
|
|
(20.2
|
)
|
|
|
(18.6
|
)
|
Significant transaction and environmental related costs and other
items
|
|
|
1.7
|
|
|
|
2.0
|
|
Adjusted EBITDA
(a)
|
|
|
$
|
101.7
|
|
|
|
$
|
90.9
|
|
|
|
|
(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 impairments. Adjusted EBITDA
also considers the impact of certain significant items, such as
unit-based compensation charges, gains or losses on long-lived
assets, 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 of our Marketing,
Supply and Logistics operations 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
generally accepted accounting principles (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 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.
|
|
CRESTWOOD EQUITY PARTNERS LP
Segment Data
(in millions)
(unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2018
|
|
|
2017
|
Gathering and Processing
|
|
|
|
|
|
|
Revenues
|
|
|
$
|
381.6
|
|
|
|
$
|
398.9
|
|
Costs of product/services sold
|
|
|
287.7
|
|
|
|
316.6
|
|
Operations and maintenance expenses
|
|
|
17.7
|
|
|
|
17.4
|
|
Gain on long-lived assets
|
|
|
0.1
|
|
|
|
—
|
|
Earnings from unconsolidated affiliates, net
|
|
|
5.7
|
|
|
|
1.6
|
|
EBITDA
|
|
|
$
|
82.0
|
|
|
|
$
|
66.5
|
|
|
|
|
|
|
|
|
Storage and Transportation
|
|
|
|
|
|
|
Revenues
|
|
|
$
|
6.2
|
|
|
|
$
|
11.8
|
|
Costs of product/services sold
|
|
|
0.1
|
|
|
|
—
|
|
Operations and maintenance expenses
|
|
|
0.8
|
|
|
|
1.1
|
|
Earnings from unconsolidated affiliates, net
|
|
|
6.7
|
|
|
|
6.5
|
|
EBITDA
|
|
|
$
|
12.0
|
|
|
|
$
|
17.2
|
|
|
|
|
|
|
|
|
Marketing, Supply and Logistics
|
|
|
|
|
|
|
Revenues
|
|
|
$
|
727.2
|
|
|
|
$
|
417.4
|
|
Costs of product/services sold
|
|
|
678.0
|
|
|
|
366.9
|
|
Operations and maintenance expenses
|
|
|
16.0
|
|
|
|
15.2
|
|
Gain on long-lived assets
|
|
|
0.2
|
|
|
|
—
|
|
EBITDA
|
|
|
$
|
33.4
|
|
|
|
$
|
35.3
|
|
|
|
|
|
|
|
|
Total Segment EBITDA
|
|
|
$
|
127.4
|
|
|
|
$
|
119.0
|
|
Corporate
|
|
|
(23.8
|
)
|
|
|
(26.3
|
)
|
EBITDA
|
|
|
$
|
103.6
|
|
|
|
$
|
92.7
|
|
|
CRESTWOOD EQUITY PARTNERS LP
Operating Statistics
(unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2018
|
|
|
2017
|
Gathering and Processing (MMcf/d)
|
|
|
|
|
|
|
Bakken - Arrow
|
|
|
63.3
|
|
|
|
49.2
|
|
Marcellus
|
|
|
432.3
|
|
|
|
359.9
|
|
Barnett
|
|
|
288.4
|
|
|
|
331.1
|
|
Permian (a) |
|
|
129.5
|
|
|
|
38.9
|
|
PRB Niobrara - Jackalope Gas Gathering (b) |
|
|
75.1
|
|
|
|
47.3
|
|
Other
|
|
|
49.3
|
|
|
|
62.1
|
|
Total gas gathering volumes
|
|
|
1,037.9
|
|
|
|
888.5
|
|
Processing volumes
|
|
|
273.9
|
|
|
|
208.2
|
|
Compression volumes
|
|
|
469.2
|
|
|
|
466.5
|
|
Arrow Midstream
|
|
|
|
|
|
|
Bakken Crude oil (MBbls/d)
|
|
|
80.2
|
|
|
|
68.6
|
|
Bakken Water (MBbls/d)
|
|
|
38.8
|
|
|
|
31.5
|
|
|
|
|
|
|
|
|
Storage and Transportation
|
|
|
|
|
|
|
Northeast Storage - firm contracted capacity (Bcf) (b) |
|
|
31.5
|
|
|
|
35.8
|
|
% of operational capacity contracted
|
|
|
82
|
%
|
|
|
100
|
%
|
Firm storage services (MMcf/d) (b) |
|
|
356.1
|
|
|
|
286.0
|
|
Interruptible storage services (MMcf/d) (b) |
|
|
0.8
|
|
|
|
1.0
|
|
Northeast Transportation - firm contracted capacity (MMcf/d) (b) |
|
|
1,492.1
|
|
|
|
1,412.1
|
|
% of operational capacity contracted
|
|
|
82
|
%
|
|
|
80
|
%
|
Firm services (MMcf/d) (b) |
|
|
1,368.0
|
|
|
|
1,318.7
|
|
Interruptible services (MMcf/d) (b) |
|
|
41.4
|
|
|
|
75.9
|
|
Gulf Coast Storage - firm contracted capacity (Bcf) (b) |
|
|
28.5
|
|
|
|
31.1
|
|
% of operational capacity contracted
|
|
|
74
|
%
|
|
|
81
|
%
|
Firm storage services (MMcf/d) (b) |
|
|
354.8
|
|
|
|
295.8
|
|
Interruptible services (MMcf/d) (b) |
|
|
102.9
|
|
|
|
37.9
|
|
COLT Hub
|
|
|
|
|
|
|
Rail loading (MBbls/d)
|
|
|
36.0
|
|
|
|
57.9
|
|
Outbound pipeline (MBbls/d) (c) |
|
|
12.1
|
|
|
|
9.5
|
|
|
|
|
|
|
|
|
Marketing, Supply and Logistics
|
|
|
|
|
|
|
NGL Operations
|
|
|
|
|
|
|
NGL volumes sold or processed (MBbls/d)
|
|
|
169.0
|
|
|
|
119.3
|
|
NGL volumes trucked (MBbls/d)
|
|
|
50.0
|
|
|
|
64.2
|
|
Crude Operations
|
|
|
|
|
|
|
Crude barrels trucked (MBbls/d)
|
|
|
7.5
|
|
|
|
7.1
|
|
|
|
|
(a)
|
|
Beginning in June 2017, represents 50% owned joint venture,
operational data reported is at 100%.
|
(b)
|
|
Represents 50% owned joint venture, operational data reported is at
100%.
|
(c)
|
|
Represents only throughput leaving the terminal.
|
View source version on businesswire.com:
https://www.businesswire.com/news/home/20180501005411/en/
Crestwood Equity Partners LP
Investor Contact
Josh
Wannarka, 713-380-3081
josh.wannarka@crestwoodlp.com
Vice
President, Investor Relations
or
Elizabeth Suman, 832-519-2276
elizabeth.suman@crestwoodlp.com
Senior
Manager, Investor Relations & Corporate Communications
Source: Crestwood Equity Partners LP