Crestwood Announces First Quarter 2023 Financial and Operating Results
- Crestwood reported an 87% YoY increase in net income for Q1 2023, reaching $41.6 million.
- Adjusted EBITDA increased by 11% YoY to $192.6 million.
- Successfully closed the divestiture of Tres Palacios, receiving net proceeds of $178 million.
- None.
Generated first quarter 2023 net income of
Reaffirming full-year 2023 guidance range; current producer activity supports anticipated volumetric and cash flow growth throughout 2023
Successfully closed the divestiture of Tres Palacios in April 2023;
First Quarter 2023 Financial Highlights1
-
First quarter 2023 net income of
$41.6 million $22.2 million 87% year-over-year -
First quarter 2023 Adjusted EBITDA of
$192.6 million $172.8 million 11% year-over-year -
First quarter 2023 distributable cash flow (“DCF”) to common unitholders of
$103.6 million -
Ended the quarter with approximately
$3.3 billion $474 million $1.75 billion -
Announced first quarter 2023 cash distribution of
$0.65 5$2.62 -
Issued
$600 million 7.375% senior unsecured notes due 2031; proceeds of the issuance were used to repay borrowings on the corporate revolving credit facility and to repay and terminate the Crestwood Permian Basin Holdings LLC (“CPJV”) revolving credit facility
1 Please see non-GAAP reconciliation tables included at the end of the press release. |
Recent Developments
-
On April 3, 2023,
Crestwood and Brookfield Infrastructure (“Brookfield”) closed the previously announced divestiture of Tres Palacios Gas Storage LLC (“Tres Palacios”).Crestwood received approximately$178 million 50% interest in Tres Palacios, which includes certain favorable working capital adjustments. Proceeds were used to repay borrowings on its corporate revolving credit facility.
Management Commentary
“I am pleased to report a solid start to the year with first quarter operational and financial results that delivered on the expectations we set at the beginning of the year. Operationally, producer activity resulted in 70 new wells connected to our gathering assets, driving strong volumes during the quarter. Financially,
Mr. Phillips continued, “With a G&P portfolio concentrated in oil-weighted basins and robust drilling activity in the current commodity price environment, we continue to expect substantial volumetric and cash flow growth throughout 2023. After a significant year of M&A completed in 2022, we are now focused on commercializing our expanded footprints in our three core basins to drive incremental throughput across our available gathering and processing capacities. Combined with a reduction in operating expenses and capital expenditures, we anticipate significant free cash flow generation beginning in the second half of 2023, which will be allocated to debt paydown and leverage reduction. We believe our near-term capital allocation strategy will provide enhanced financial flexibility for the company and drive a compelling long-term value proposition to our unitholders.”
First Quarter 2023 Results
Gathering and Processing North
Gathering and Processing North segment EBITDA totaled
During the first quarter 2023, crude oil gathering volumes averaged 80 MBbl/d, natural gas gathering volumes averaged 230 MMcf/d, natural gas processing volumes averaged 257 MMcf/d, and produced water gathering volumes averaged 171 MBbl/d. Crude oil gathering volumes increased year-over-year by
Beginning in the second quarter,
Powder River Basin
During the first quarter 2023, natural gas gathering volumes averaged 96 MMcf/d and natural gas processing volumes averaged 93 MMcf/d, which decreased year-over-year by
Gathering & Processing South
Gathering and Processing South segment EBITDA totaled
During the first quarter 2023, natural gas gathering volumes averaged 495 MMcf/d, natural gas processing volumes averaged 403 MMcf/d, produced water gathering volumes averaged 139 MBbl/d, and crude oil gathering volumes averaged 22 MBbl/d. Natural gas gathering and natural gas processing volumes increased year-over-year by
Storage & Logistics
Storage & Logistics segment EBITDA totaled
O&M and G&A Expenses
Combined O&M and G&A expenses, net of non-cash unit-based compensation, in the first quarter 2023 were
Capitalization and Liquidity Update
During the first quarter,
On January 17, 2023, Crestwood Midstream Partners LP (“CMLP”), a wholly owned subsidiary of
As of March 31, 2023,
Sustainability Program Update
Upcoming Conference Participation
-
EIC Energy Infrastructure CEO & Investor Conference,
West Palm Beach, Florida , May 22 – 24, 2023 -
RBC Global Energy, Power & Infrastructure Conference,
New York, New York , June 6 – 7, 2023 -
Stifel Cross Sector Insight Conference,
Boston, Massachusetts , June 6 – 7, 2023 -
J.P. Morgan Energy, Power & Renewables Conference,
New York, New York , June 21 - 22, 2023
Earnings Conference Call Schedule
Management will host a conference call for investors and analysts of
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
About Crestwood Equity Partners LP
CRESTWOOD EQUITY PARTNERS LP Consolidated Statements of Operations (in millions, except per unit data) (unaudited) |
|||||||
|
Three Months Ended March 31, |
||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
||||
Revenues |
$ |
1,263.1 |
|
|
$ |
1,583.8 |
|
Cost of products/services sold |
|
997.4 |
|
|
|
1,364.4 |
|
|
|
|
|
||||
Operating expenses and other: |
|
|
|
||||
Operations and maintenance |
|
56.6 |
|
|
|
42.4 |
|
General and administrative |
|
31.6 |
|
|
|
43.4 |
|
Depreciation, amortization and accretion |
|
81.4 |
|
|
|
74.8 |
|
Loss on long-lived assets, net |
|
0.4 |
|
|
|
3.8 |
|
|
|
170.0 |
|
|
|
164.4 |
|
Operating income |
|
95.7 |
|
|
|
55.0 |
|
Earnings from unconsolidated affiliates, net |
|
1.7 |
|
|
|
3.0 |
|
Interest and debt expense, net |
|
(55.6 |
) |
|
|
(36.1 |
) |
Other income, net |
|
0.1 |
|
|
|
0.3 |
|
Income before income taxes |
|
41.9 |
|
|
|
22.2 |
|
Provision for income taxes |
|
(0.3 |
) |
|
|
— |
|
Net income |
|
41.6 |
|
|
|
22.2 |
|
Net income attributable to non-controlling partner |
|
10.2 |
|
|
|
10.2 |
|
Net income attributable to Crestwood Equity Partners LP |
|
31.4 |
|
|
|
12.0 |
|
Net income attributable to preferred units |
|
15.0 |
|
|
|
15.0 |
|
Net income (loss) attributable to partners |
$ |
16.4 |
|
|
$ |
(3.0 |
) |
|
|
|
|
||||
Net income (loss) per limited partner unit: |
|
|
|
||||
Basic |
$ |
0.16 |
|
|
$ |
(0.04 |
) |
Diluted |
$ |
0.15 |
|
|
$ |
(0.04 |
) |
CRESTWOOD EQUITY PARTNERS LP Selected Balance Sheet Data (in millions) |
|||||
|
March 31,
|
|
December 31,
|
||
|
(unaudited) |
|
|
||
|
|
|
|
||
Cash |
$ |
8.6 |
|
$ |
7.5 |
|
|
|
|
||
Outstanding debt: |
|
|
|
||
Revolving Credit Facilities |
$ |
473.6 |
|
$ |
1,129.1 |
Senior Notes |
|
2,850.0 |
|
|
2,250.0 |
Other |
|
25.7 |
|
|
26.7 |
Subtotal |
|
3,349.3 |
|
|
3,405.8 |
Less: deferred financing costs, net |
|
34.8 |
|
|
27.5 |
Total debt |
$ |
3,314.5 |
|
$ |
3,378.3 |
|
|
|
|
||
Partners' capital |
|
|
|
||
Total partners' capital |
$ |
1,853.3 |
|
$ |
1,907.2 |
Common units outstanding |
|
105.3 |
|
|
104.6 |
CRESTWOOD EQUITY PARTNERS LP Reconciliation of Non-GAAP Financial Measures (in millions) (unaudited) |
|||||||
|
Three Months Ended March 31, |
||||||
|
|
2023 |
|
|
|
2022 |
|
Net Income to Adjusted EBITDA |
|
|
|
||||
Net income |
$ |
41.6 |
|
|
$ |
22.2 |
|
Interest and debt expense, net |
|
55.6 |
|
|
|
36.1 |
|
Provision for income taxes |
|
0.3 |
|
|
|
— |
|
Depreciation, amortization and accretion |
|
81.4 |
|
|
|
74.8 |
|
EBITDA (a) |
$ |
178.9 |
|
|
$ |
133.1 |
|
Significant items impacting EBITDA: |
|
|
|
||||
Unit-based compensation charges |
|
10.0 |
|
|
|
8.6 |
|
Loss on long-lived assets, net |
|
0.4 |
|
|
|
3.8 |
|
Earnings from unconsolidated affiliates, net |
|
(1.7 |
) |
|
|
(3.0 |
) |
Adjusted EBITDA from unconsolidated affiliates, net |
|
4.2 |
|
|
|
7.6 |
|
Change in fair value of commodity inventory-related derivative contracts |
|
(3.5 |
) |
|
|
5.7 |
|
Significant transaction and environmental related costs and other items |
|
4.3 |
|
|
|
17.0 |
|
Adjusted EBITDA (a) |
$ |
192.6 |
|
|
$ |
172.8 |
|
|
|
|
|
||||
Distributable Cash Flow (b) |
|
|
|
||||
Adjusted EBITDA (a) |
$ |
192.6 |
|
|
$ |
172.8 |
|
Cash interest expense (c) |
|
(56.0 |
) |
|
|
(35.6 |
) |
Maintenance capital expenditures (d) |
|
(6.9 |
) |
|
|
(1.4 |
) |
Adjusted EBITDA from unconsolidated affiliates, net |
|
(4.2 |
) |
|
|
(7.6 |
) |
Distributable cash flow from unconsolidated affiliates |
|
3.7 |
|
|
|
6.7 |
|
PRB cash received in excess of recognized revenues (e) |
|
— |
|
|
|
7.1 |
|
Provision for income taxes |
|
(0.3 |
) |
|
|
— |
|
Distributable cash flow attributable to CEQP |
|
128.9 |
|
|
|
142.0 |
|
Distributions to preferred |
|
(15.0 |
) |
|
|
(15.0 |
) |
Distributions to Niobrara preferred |
|
(10.3 |
) |
|
|
(10.3 |
) |
Distributable cash flow attributable to CEQP common |
$ |
103.6 |
|
|
$ |
116.7 |
|
(a) |
EBITDA is defined as income before income taxes, plus debt-related costs (interest and debt expense) 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, 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 |
(b) |
Beginning in 2023, 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 2022, distributable cash flow also includes the cash received from our Powder River Basin operations in excess of revenue recognized. 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 |
(c) |
Interest and debt expense less amortization of deferred financing costs plus capitalized interest and amortization of debt premium. |
(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 during the three months ended March 31, 2022. |
CRESTWOOD EQUITY PARTNERS LP Reconciliation of Non-GAAP Financial Measures (in millions) (unaudited) |
|||||||
|
Three Months Ended March 31, |
||||||
|
|
2023 |
|
|
|
2022 |
|
Operating Cash Flows to Adjusted EBITDA |
|
|
|
||||
Net cash provided by operating activities |
$ |
245.9 |
|
|
$ |
222.5 |
|
Net changes in operating assets and liabilities |
|
(113.1 |
) |
|
|
(112.9 |
) |
Amortization of debt-related deferred costs |
|
(0.8 |
) |
|
|
(0.8 |
) |
Interest and debt expense, net |
|
55.6 |
|
|
|
36.1 |
|
Unit-based compensation charges |
|
(10.0 |
) |
|
|
(8.6 |
) |
Loss on long-lived assets, net |
|
(0.4 |
) |
|
|
(3.8 |
) |
Earnings from unconsolidated affiliates, net, adjusted for cash distributions received |
|
1.4 |
|
|
|
0.4 |
|
Deferred income taxes |
|
— |
|
|
|
0.1 |
|
Provision for income taxes |
|
0.3 |
|
|
|
— |
|
Other non-cash expense |
|
— |
|
|
|
0.1 |
|
EBITDA (a) |
$ |
178.9 |
|
|
$ |
133.1 |
|
Unit-based compensation charges |
|
10.0 |
|
|
|
8.6 |
|
Loss on long-lived assets, net |
|
0.4 |
|
|
|
3.8 |
|
Earnings from unconsolidated affiliates, net |
|
(1.7 |
) |
|
|
(3.0 |
) |
Adjusted EBITDA from unconsolidated affiliates, net |
|
4.2 |
|
|
|
7.6 |
|
Change in fair value of commodity inventory-related derivative contracts |
|
(3.5 |
) |
|
|
5.7 |
|
Significant transaction and environmental related costs and other items |
|
4.3 |
|
|
|
17.0 |
|
Adjusted EBITDA (a) |
$ |
192.6 |
|
|
$ |
172.8 |
|
|
|
|
|
||||
Distributable Cash Flow (b) |
|
|
|
||||
Adjusted EBITDA (a) |
$ |
192.6 |
|
|
$ |
172.8 |
|
Cash interest expense (c) |
|
(56.0 |
) |
|
|
(35.6 |
) |
Maintenance capital expenditures (d) |
|
(6.9 |
) |
|
|
(1.4 |
) |
Adjusted EBITDA from unconsolidated affiliates, net |
|
(4.2 |
) |
|
|
(7.6 |
) |
Distributable cash flow from unconsolidated affiliates |
|
3.7 |
|
|
|
6.7 |
|
PRB cash received in excess of recognized revenues (e) |
|
— |
|
|
|
7.1 |
|
Provision for income taxes |
|
(0.3 |
) |
|
|
— |
|
Distributable cash flow attributable to CEQP |
|
128.9 |
|
|
|
142.0 |
|
Distributions to preferred |
|
(15.0 |
) |
|
|
(15.0 |
) |
Distributions to Niobrara preferred |
|
(10.3 |
) |
|
|
(10.3 |
) |
Distributable cash flow attributable to CEQP common |
$ |
103.6 |
|
|
$ |
116.7 |
|
|
|
|
|
||||
Free Cash Flow After Distributions (f) |
|
|
|
||||
Distributable cash flow attributable to CEQP common |
$ |
103.6 |
|
|
$ |
116.7 |
|
Less: Growth capital expenditures (g) |
|
57.9 |
|
|
|
24.2 |
|
Less: Distributions to common unitholders |
|
69.0 |
|
|
|
64.2 |
|
Free cash flow after distributions |
$ |
(23.3 |
) |
|
$ |
28.3 |
|
(a) |
EBITDA is defined as income before income taxes, plus debt-related costs (interest and debt expense) 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, 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 |
(b) |
Beginning in 2023, 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 2022, distributable cash flow also includes the cash received from our Powder River Basin operations in excess of revenue recognized. 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 |
(c) |
Interest and debt expense less amortization of deferred financing costs plus capitalized interest and amortization of debt premium. |
(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 during the three months ended March 31, 2022. |
(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 |
(g) |
Includes |
CRESTWOOD EQUITY PARTNERS LP Segment Data (in millions) (unaudited) |
|||||||
|
Three Months Ended March 31, |
||||||
|
|
2023 |
|
|
|
2022 |
|
Gathering and Processing North |
|
|
|
||||
Revenues |
$ |
314.4 |
|
|
$ |
362.6 |
|
Costs of product/services sold |
|
152.4 |
|
|
|
205.6 |
|
Operations and maintenance expenses |
|
29.3 |
|
|
|
23.7 |
|
Gain on long-lived assets, net |
|
0.1 |
|
|
|
— |
|
EBITDA |
$ |
132.8 |
|
|
$ |
133.3 |
|
|
|
|
|
||||
Gathering and Processing South |
|
|
|
||||
Revenues |
$ |
165.1 |
|
|
$ |
30.7 |
|
Costs of product/services sold |
|
108.5 |
|
|
|
(0.6 |
) |
Operations and maintenance expenses |
|
15.1 |
|
|
|
6.7 |
|
Gain (loss) on long-lived assets, net |
|
(0.8 |
) |
|
|
0.2 |
|
Earnings from unconsolidated affiliates, net |
|
0.3 |
|
|
|
2.6 |
|
EBITDA |
$ |
41.0 |
|
|
$ |
27.4 |
|
|
|
|
|
||||
Storage and Logistics |
|
|
|
||||
Revenues |
$ |
783.6 |
|
|
$ |
1,190.5 |
|
Costs of product/services sold |
|
736.5 |
|
|
|
1,159.4 |
|
Operations and maintenance expenses |
|
12.2 |
|
|
|
12.0 |
|
Loss on long-lived assets, net |
|
— |
|
|
|
(4.0 |
) |
Earnings from unconsolidated affiliates, net |
|
1.4 |
|
|
|
0.4 |
|
EBITDA |
$ |
36.3 |
|
|
$ |
15.5 |
|
|
|
|
|
||||
Total Segment EBITDA |
$ |
210.1 |
|
|
$ |
176.2 |
|
Corporate |
|
(31.2 |
) |
|
|
(43.1 |
) |
EBITDA |
$ |
178.9 |
|
|
$ |
133.1 |
|
CRESTWOOD EQUITY PARTNERS LP Operating Statistics (unaudited) |
|||||
|
Three Months Ended March 31, |
||||
|
2023 |
|
2022 |
||
Gathering and Processing North |
|
|
|
||
Gas gathering volumes (MMcf/d) |
|
|
|
||
|
230.4 |
|
|
247.5 |
|
Powder River Basin |
95.9 |
|
|
98.1 |
|
Total gas gathering volumes |
326.3 |
|
|
345.6 |
|
Processing volumes (MMcf/d) |
|
|
|
||
|
256.6 |
|
|
280.2 |
|
Powder River Basin |
93.2 |
|
|
94.2 |
|
Total processing volumes |
349.8 |
|
|
374.4 |
|
|
|
|
|
||
Crude oil gathering volumes (MBbls/d) |
80.4 |
|
|
79.8 |
|
Water gathering volumes (MBbls/d) |
171.3 |
|
|
173.3 |
|
|
|
|
|
||
Gathering and Processing South |
|
|
|
||
Gas gathering volumes (MMcf/d) |
|
|
|
||
|
494.5 |
|
|
234.2 |
|
Marcellus(b) |
— |
|
|
214.6 |
|
Barnett(b) |
— |
|
|
214.1 |
|
Total gas gathering volumes |
494.5 |
|
|
662.9 |
|
Processing volumes (MMcf/d) |
|
|
|
||
|
402.6 |
|
|
116.9 |
|
Barnett(b) |
— |
|
|
71.1 |
|
Total processing volumes |
402.6 |
|
|
188.0 |
|
|
22.4 |
|
|
20.1 |
|
|
138.9 |
|
|
102.3 |
|
|
|
|
|
||
Storage and Logistics |
|
|
|
||
Gulf Coast Storage - firm contracted capacity (Bcf) (a) |
29.2 |
|
|
28.8 |
|
% of operational capacity contracted |
76 |
% |
|
75 |
% |
Firm storage services (MMcf/d) (a) |
263.3 |
|
|
394.8 |
|
Interruptible services (MMcf/d) (a) |
250.7 |
|
|
155.2 |
|
COLT Hub |
|
|
|
||
Rail loading (MBbls/d) |
14.8 |
|
|
18.0 |
|
Outbound pipeline (MBbls/d) (c) |
23.1 |
|
|
25.4 |
|
NGL Operations |
|
|
|
||
NGL volumes sold or processed (MBbls/d) |
142.4 |
|
|
160.0 |
|
NGL volumes trucked (MBbls/d) |
22.0 |
|
|
23.1 |
|
(a) |
Includes operational data for our |
(b) |
The Barnett assets and the Marcellus assets were sold in July 2022 and October 2022, respectively. |
(c) |
Represents only throughput leaving the terminal. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230501005763/en/
Crestwood Equity Partners LP
Investor Contacts
Andrew Thorington, 713-380-3028
andrew.thorington@crestwoodlp.com
Vice President, Finance & Investor Relations
Sustainability and Media Contact
Joanne Howard, 832-519-2211
joanne.howard@crestwoodlp.com
Senior Vice President, Sustainability and Corporate Communications
Source: Crestwood Equity Partners LP
FAQ
What was Crestwood's net income for Q1 2023?
What was the YoY change in Adjusted EBITDA for Q1 2023?
What was the net proceeds from the divestiture of Tres Palacios?
