Crestwood Announces Third Quarter 2022 Financial and Operating Results
Crestwood Equity Partners LP (CEQP) announced its third quarter 2022 results, reflecting a net loss of $43 million, slightly higher than a net loss of $39.6 million in Q3 2021. However, the company reported a significant 50% year-over-year increase in Adjusted EBITDA, reaching $209 million, driven by operational growth in the Williston and Delaware Basins. Their distributable cash flow surged 53% to $131 million, resulting in a coverage ratio of 1.9x. Crestwood's revised full-year Adjusted EBITDA guidance is now $780 million to $800 million, reflecting the impact of recent divestitures and operational adjustments.
- 50% increase in Adjusted EBITDA to $209 million year-over-year.
- Distributable cash flow rose 53% to $131 million.
- Revised cash distribution of $0.655 per common unit, a 5% increase year-over-year.
- MSCI upgraded ESG corporate rating from 'BBB' to 'A'.
- Significant acquisition of Sendero Midstream and CPJV enhances asset portfolio.
- Net loss increased to $43 million from $39.6 million.
- 4.2x consolidated leverage ratio impacting financial flexibility.
- Delayed well completions due to labor market challenges and supply chain constraints.
Recent strategic transactions high-grade asset portfolio and enhance capital structure with the acquisitions of Sendero Midstream and CPJV in the
Generated third quarter 2022 net loss of
Solid cash flow profile highlighted by a quarterly coverage ratio of 1.9x; free cash flow generation from optimized portfolio coupled with EBITDA growth next year drives leverage ratio toward long-term target of approximately 3.5x
Revised 2022E Adjusted EBITDA guidance range of
MSCI upgraded Crestwood’s ESG corporate rating to ‘A’ from ‘BBB’ based on
Third Quarter 2022 Financial Highlights1
-
Third quarter 2022 net loss of
, compared to a net loss of$43.0 million in third quarter 2021$39.6 million -
Third quarter 2022 Adjusted EBITDA of
, compared to$209.3 million in the third quarter 2021, an increase of$139.9 million 50% year-over-year -
Third quarter 2022 distributable cash flow (“DCF”) to common unitholders of
, compared to$131.0 million in the third quarter of 2021, an increase of$85.8 million 53% year-over-year, resulting in a coverage ratio of 1.9x -
Ended the quarter with approximately
of total debt, including$3.6 billion drawn on the revolving credit facilities, resulting in a consolidated leverage ratio of 4.2x (4.1x pro forma for the sale of the$1.3 billion Marcellus Shale divestiture which closed onOctober 25, 2022 ) -
Announced third quarter 2022 cash distribution of
per common unit, or$0.65 5 per common unit on an annualized basis, an approximate$2.62 5% increase year-over-year, payable onNovember 14, 2022 , to unitholders of record as ofNovember 7, 2022
1 Please see non-GAAP reconciliation tables included at the end of the press release. |
Recent Developments
-
On
September 15, 2022 ,Chord Energy Inc. (“Chord”) (Nasdaq: CHRD) sold 16 millionCrestwood common units, or approximately76% of the units received as consideration for its sale of Oasis Midstream, in an oversubscribed secondary offering. As part of this offering,Crestwood purchased and retired 4.6 million units for , resulting in annual distribution savings of approximately$123.7 million . Chord’s current ownership in$12 million Crestwood is now below5% of total common units outstanding. -
On
October 14, 2022 ,Crestwood exercised the accordion feature on its revolving credit facility to increase the facility size from to$1.5 billion , under its existing terms. Pro forma for the accordion and the divesture of the$1.75 billion Marcellus assets,Crestwood has substantially enhanced its financial flexibility and liquidity with available capacity on its revolving credit facilities of more than .$865 million -
On
October 25, 2022 ,Crestwood closed the previously announced divestiture of itsMarcellus gathering and compression assets to Antero Midstream Corporation for approximately in cash.$205 million Crestwood used the proceeds to paydown borrowings on its revolving credit facility.
Management Commentary
“During the third quarter,
Third Quarter 2022 Segment Results
Gathering and Processing North (G&P North) segment EBITDA totaled
Gathering & Processing South (G&P South) segment EBITDA totaled
Storage & Logistics (S&L) segment EBITDA totaled
Combined O&
Third Quarter 2022 Business Update and Outlook
During the third quarter 2022, the
During the third quarter 2022,
During the third quarter 2022, the
During the third quarter 2022,
During the third quarter 2022, the
During the third quarter,
Updated 2022 Financial Guidance
Based on 2022 results to date and the outlook for the fourth quarter,
-
Net income of
to$80 million ; impacted by gains and losses on long-lived assets related to the Barnett and$100 million Marcellus divestitures and a gain on the acquisition of CPJV -
2022E Adjusted EBITDA of
to$780 million $800 million - Contribution by operating segment is set forth below:
$US millions |
|
Adj. |
||
Operating Segment |
|
Low |
|
High |
Gathering & Processing North |
|
|
- |
|
Gathering & Processing South |
|
170 |
- |
180 |
Storage & Logistics |
|
60 |
- |
70 |
Less: Corporate G&A |
|
(55) |
|
(55) |
FY 2022 Totals |
|
|
- |
|
-
Distributable cash flow available to common unitholders of
to$485 million $505 million -
Free cash flow after distributions of
to$5 million $25 million - Full-year 2022E coverage ratio of 1.8x to 2.0x
- Year-end 2022E leverage ratio between 3.9x and 4.1x
-
Growth project capital spending in the range of
to$200 million $220 million -
Maintenance capital spending in the range of
to$25 million $30 million
Capitalization and Liquidity Update
As of
Sustainability Program Update
Crestwood’s ESG performance and commitment to enhanced transparency and disclosure continues to be recognized externally by key ESG rating groups. Recently, MSCI upgraded Crestwood’s ESG corporate rating to ‘A’ from ‘BBB’ due to its strong commitment to corporate governance and environmental stewardship, highlighted by Crestwood’s enhancements to its proxy access, Board diversity, and business ethics programs. MSCI is widely considered to be one of the top ESG evaluation systems recognized by the global investment community. This latest upgrade solidifies Crestwood’s ESG leadership position across the midstream sector and is the third rating upgrade the company has received since formally establishing its sustainability program in 2018.
For more information on Crestwood’s approach to sustainability and carbon management, please visit https://esg.crestwoodlp.com.
Upcoming Conference Participation
Crestwood’s management will participate in the following upcoming investor conferences. Prior to the start of each conference, new presentation materials may be posted to the Investors section of Crestwood’s website at www.crestwoodlp.com.
-
2022
RBC Capital Markets Midstream and Energy Infrastructure Conference ,November 16 - 17, 2022 ,Dallas, Texas -
Bank of America General Leveraged Finance Conference ,November 28 - 30, 2022 ,Boca Raton, Florida -
Capital One Securities Energy Conference ,December 5 - 7, 2022 ,Houston, Texas -
Wells Fargo Midstream, Utilities and Renewable Power Symposium,
December 8 - 9, 2022 ,New York City ,New York
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
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Consolidated Statements of Operations |
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(in millions, except per unit data) |
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(unaudited) |
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Three Months Ended
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Nine Months Ended
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2022 |
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2021 |
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2022 |
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|
2021 |
|
|
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|
|
|
|
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Revenues |
$ |
1,566.0 |
|
|
$ |
1,226.3 |
|
|
$ |
4,597.8 |
|
|
$ |
3,188.6 |
|
Cost of products/services sold |
|
1,286.8 |
|
|
|
1,099.3 |
|
|
|
3,864.4 |
|
|
|
2,710.3 |
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses and other: |
|
|
|
|
|
|
|
||||||||
Operations and maintenance |
|
55.0 |
|
|
|
31.6 |
|
|
|
144.0 |
|
|
|
90.2 |
|
General and administrative |
|
33.9 |
|
|
|
25.9 |
|
|
|
103.8 |
|
|
|
67.4 |
|
Depreciation, amortization and accretion |
|
86.9 |
|
|
|
64.6 |
|
|
|
242.3 |
|
|
|
182.6 |
|
Loss on long-lived assets, net |
|
175.9 |
|
|
|
18.5 |
|
|
|
186.9 |
|
|
|
19.6 |
|
Gain on acquisition |
|
(75.3 |
) |
|
|
— |
|
|
|
(75.3 |
) |
|
|
— |
|
|
|
276.4 |
|
|
|
140.6 |
|
|
|
601.7 |
|
|
|
359.8 |
|
Operating income (loss) |
|
2.8 |
|
|
|
(13.6 |
) |
|
|
131.7 |
|
|
|
118.5 |
|
Earnings (loss) from unconsolidated affiliates, net |
|
3.2 |
|
|
|
4.9 |
|
|
|
12.2 |
|
|
|
(125.9 |
) |
Interest and debt expense, net |
|
(47.6 |
) |
|
|
(30.9 |
) |
|
|
(123.8 |
) |
|
|
(102.0 |
) |
Loss on modification/extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(6.7 |
) |
Other income, net |
|
— |
|
|
|
0.1 |
|
|
|
0.2 |
|
|
|
0.2 |
|
Income (loss) before income taxes |
|
(41.6 |
) |
|
|
(39.5 |
) |
|
|
20.3 |
|
|
|
(115.9 |
) |
Provision for income taxes |
|
(1.4 |
) |
|
|
(0.1 |
) |
|
|
(1.7 |
) |
|
|
(0.1 |
) |
Net income (loss) |
|
(43.0 |
) |
|
|
(39.6 |
) |
|
|
18.6 |
|
|
|
(116.0 |
) |
Net income attributable to non-controlling partner |
|
10.3 |
|
|
|
10.3 |
|
|
|
30.8 |
|
|
|
30.7 |
|
Net loss attributable to |
|
(53.3 |
) |
|
|
(49.9 |
) |
|
|
(12.2 |
) |
|
|
(146.7 |
) |
Net income attributable to preferred units |
|
15.0 |
|
|
|
15.0 |
|
|
|
45.0 |
|
|
|
45.0 |
|
Net loss attributable to partners |
$ |
(68.3 |
) |
|
$ |
(64.9 |
) |
|
$ |
(57.2 |
) |
|
$ |
(191.7 |
) |
|
|
|
|
|
|
|
|
||||||||
Net loss per limited partner unit: |
|
|
|
|
|
|
|
||||||||
Basic and Diluted |
$ |
(0.64 |
) |
|
$ |
(1.03 |
) |
|
$ |
(0.59 |
) |
|
$ |
(2.88 |
) |
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Selected Balance Sheet Data |
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(in millions) |
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(unaudited) |
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|
||
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|
|
|
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Cash |
$ |
6.4 |
|
$ |
13.3 |
|
|
|
|
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Outstanding debt: |
|
|
|
||
Revolving Credit Facilities |
$ |
1,319.3 |
|
$ |
282.0 |
Senior Notes |
|
2,250.0 |
|
|
1,800.0 |
Other |
|
27.8 |
|
|
0.2 |
Subtotal |
|
3,597.1 |
|
|
2,082.2 |
Less: deferred financing costs, net |
|
27.1 |
|
|
29.9 |
Total debt |
$ |
3,570.0 |
|
$ |
2,052.3 |
|
|
|
|
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Partners' capital |
|
|
|
||
Total partners' capital |
$ |
1,938.2 |
|
$ |
1,099.6 |
Common units outstanding |
|
104.7 |
|
|
63.0 |
|
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Reconciliation of Non-GAAP Financial Measures |
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(in millions) |
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(unaudited) |
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|
Three Months Ended
|
|
Nine Months Ended
|
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|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net Income (Loss) to Adjusted EBITDA |
|
|
|
|
|
|
|
||||||||
Net income (loss) |
$ |
(43.0 |
) |
|
$ |
(39.6 |
) |
|
$ |
18.6 |
|
|
$ |
(116.0 |
) |
Interest and debt expense, net |
|
47.6 |
|
|
|
30.9 |
|
|
|
123.8 |
|
|
|
102.0 |
|
Loss on modification/extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6.7 |
|
Provision for income taxes |
|
1.4 |
|
|
|
0.1 |
|
|
|
1.7 |
|
|
|
0.1 |
|
Depreciation, amortization and accretion |
|
86.9 |
|
|
|
64.6 |
|
|
|
242.3 |
|
|
|
182.6 |
|
EBITDA (a) |
$ |
92.9 |
|
|
$ |
56.0 |
|
|
$ |
386.4 |
|
|
$ |
175.4 |
|
Significant items impacting EBITDA: |
|
|
|
|
|
|
|
||||||||
Unit-based compensation charges |
|
9.6 |
|
|
|
12.9 |
|
|
|
26.8 |
|
|
|
22.8 |
|
Loss on long-lived assets, net |
|
175.9 |
|
|
|
18.5 |
|
|
|
186.9 |
|
|
|
19.6 |
|
Gain on acquisition |
|
(75.3 |
) |
|
|
— |
|
|
|
(75.3 |
) |
|
|
— |
|
(Earnings) loss from unconsolidated affiliates, net |
|
(3.2 |
) |
|
|
(4.9 |
) |
|
|
(12.2 |
) |
|
|
125.9 |
|
Adjusted EBITDA from unconsolidated affiliates, net |
|
5.7 |
|
|
|
9.8 |
|
|
|
24.2 |
|
|
|
56.5 |
|
Change in fair value of commodity inventory-related derivative contracts |
|
(5.4 |
) |
|
|
46.8 |
|
|
|
(4.6 |
) |
|
|
48.9 |
|
Significant transaction and environmental related costs and other items |
|
9.1 |
|
|
|
0.8 |
|
|
|
29.6 |
|
|
|
1.9 |
|
Adjusted EBITDA (a) |
$ |
209.3 |
|
|
$ |
139.9 |
|
|
$ |
561.8 |
|
|
$ |
451.0 |
|
|
|
|
|
|
|
|
|
||||||||
Distributable Cash Flow (b) |
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA (a) |
$ |
209.3 |
|
|
$ |
139.9 |
|
|
$ |
561.8 |
|
|
$ |
451.0 |
|
Cash interest expense (c) |
|
(48.0 |
) |
|
|
(29.4 |
) |
|
|
(124.0 |
) |
|
|
(97.3 |
) |
Maintenance capital expenditures (d) |
|
(6.4 |
) |
|
|
(4.8 |
) |
|
|
(15.2 |
) |
|
|
(13.1 |
) |
Adjusted EBITDA from unconsolidated affiliates, net |
|
(5.7 |
) |
|
|
(9.8 |
) |
|
|
(24.2 |
) |
|
|
(56.5 |
) |
Distributable cash flow from unconsolidated affiliates |
|
5.6 |
|
|
|
9.0 |
|
|
|
22.4 |
|
|
|
53.3 |
|
PRB cash received in excess of recognized revenues (e) |
|
2.9 |
|
|
|
6.3 |
|
|
|
12.7 |
|
|
|
18.6 |
|
Provision for income taxes |
|
(1.4 |
) |
|
|
(0.1 |
) |
|
|
(1.7 |
) |
|
|
(0.1 |
) |
Distributable cash flow attributable to CEQP |
|
156.3 |
|
|
|
111.1 |
|
|
|
431.8 |
|
|
|
355.9 |
|
Distributions to preferred |
|
(15.0 |
) |
|
|
(15.0 |
) |
|
|
(45.0 |
) |
|
|
(45.0 |
) |
Distributions to Niobrara preferred |
|
(10.3 |
) |
|
|
(10.3 |
) |
|
|
(31.0 |
) |
|
|
(30.9 |
) |
Distributable cash flow attributable to CEQP common |
$ |
131.0 |
|
|
$ |
85.8 |
|
|
$ |
355.8 |
|
|
$ |
280.0 |
|
(a) |
EBITDA is defined as income before income taxes, plus debt-related costs (interest and debt expense, net and loss on modification/extinguishment of debt) and depreciation, amortization and accretion expense. Adjusted EBITDA considers the adjusted earnings impact of our unconsolidated affiliates by adjusting our equity earnings or losses from our unconsolidated affiliates to reflect our proportionate share (based on the distribution percentage) of their EBITDA, excluding gains and losses on long-lived assets and other impairments. Adjusted EBITDA also considers the impact of certain significant items, such as unit-based compensation charges, gains or losses on long-lived assets, impairments of goodwill, third party costs incurred related to potential and completed acquisitions, certain environmental remediation costs, the change in fair value of commodity inventory-related derivative contracts, costs associated with the realignment and restructuring of our operations and corporate structure, and other transactions identified in a specific reporting period. The change in fair value of commodity inventory-related derivative contracts is considered in determining Adjusted EBITDA given that the timing of recognizing gains and losses on these derivative contracts differs from the recognition of revenue for the related underlying sale of inventory to which these derivatives relate. Changes in the fair value of other derivative contracts is not considered in determining Adjusted EBITDA given the relatively short-term nature of those derivative contracts. EBITDA and Adjusted EBITDA are not measures calculated in accordance with GAAP, as they do not include deductions for items such as depreciation, amortization and accretion, interest and income taxes, which are necessary to maintain our business. EBITDA and Adjusted EBITDA should not be considered as alternatives to net income, operating cash flow or any other measure of financial performance presented in accordance with GAAP. EBITDA and Adjusted EBITDA calculations may vary among entities, so our computation may not be comparable to measures used by other companies. |
|
(b) |
Distributable cash flow is defined as Adjusted EBITDA, adjusted for cash interest expense, maintenance capital expenditures, income taxes, the cash received from our |
|
(c) |
Cash interest expense less amortization of deferred financing costs. |
|
(d) |
Maintenance capital expenditures are defined as those capital expenditures which do not increase operating capacity or revenues from existing levels. |
|
(e) |
Cash received from customers of our |
|
|||||||||||||||
Reconciliation of Non-GAAP Financial Measures |
|||||||||||||||
(in millions) |
|||||||||||||||
(unaudited) |
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Operating Cash Flows to Adjusted EBITDA |
|
|
|
|
|
|
|
||||||||
Net cash provided by operating activities |
$ |
25.3 |
|
|
$ |
79.4 |
|
|
$ |
277.3 |
|
|
$ |
372.9 |
|
Net changes in operating assets and liabilities |
|
129.9 |
|
|
|
(25.1 |
) |
|
|
123.9 |
|
|
|
(114.8 |
) |
Amortization of debt-related deferred costs |
|
(0.5 |
) |
|
|
(1.7 |
) |
|
|
(1.7 |
) |
|
|
(5.1 |
) |
Interest and debt expense, net |
|
47.6 |
|
|
|
30.9 |
|
|
|
123.8 |
|
|
|
102.0 |
|
Unit-based compensation charges |
|
(9.6 |
) |
|
|
(12.9 |
) |
|
|
(26.8 |
) |
|
|
(22.8 |
) |
Loss on long-lived assets, net |
|
(175.9 |
) |
|
|
(18.5 |
) |
|
|
(186.9 |
) |
|
|
(19.6 |
) |
Gain on acquisition |
|
75.3 |
|
|
|
— |
|
|
|
75.3 |
|
|
|
— |
|
Earnings (loss) from unconsolidated affiliates, net, adjusted for cash distributions received |
|
0.7 |
|
|
|
3.6 |
|
|
|
0.9 |
|
|
|
(137.5 |
) |
Deferred income taxes |
|
(1.2 |
) |
|
|
0.3 |
|
|
|
(1.1 |
) |
|
|
0.4 |
|
Provision for income taxes |
|
1.4 |
|
|
|
0.1 |
|
|
|
1.7 |
|
|
|
0.1 |
|
Other non-cash expense |
|
(0.1 |
) |
|
|
(0.1 |
) |
|
|
— |
|
|
|
(0.2 |
) |
EBITDA (a) |
$ |
92.9 |
|
|
$ |
56.0 |
|
|
$ |
386.4 |
|
|
$ |
175.4 |
|
Unit-based compensation charges |
|
9.6 |
|
|
|
12.9 |
|
|
|
26.8 |
|
|
|
22.8 |
|
Loss on long-lived assets, net |
|
175.9 |
|
|
|
18.5 |
|
|
|
186.9 |
|
|
|
19.6 |
|
Gain on acquisition |
|
(75.3 |
) |
|
|
— |
|
|
|
(75.3 |
) |
|
|
— |
|
(Earnings) loss from unconsolidated affiliates, net |
|
(3.2 |
) |
|
|
(4.9 |
) |
|
|
(12.2 |
) |
|
|
125.9 |
|
Adjusted EBITDA from unconsolidated affiliates, net |
|
5.7 |
|
|
|
9.8 |
|
|
|
24.2 |
|
|
|
56.5 |
|
Change in fair value of commodity inventory-related derivative contracts |
|
(5.4 |
) |
|
|
46.8 |
|
|
|
(4.6 |
) |
|
|
48.9 |
|
Significant transaction and environmental related costs and other items |
|
9.1 |
|
|
|
0.8 |
|
|
|
29.6 |
|
|
|
1.9 |
|
Adjusted EBITDA (a) |
$ |
209.3 |
|
|
$ |
139.9 |
|
|
$ |
561.8 |
|
|
$ |
451.0 |
|
|
|
|
|
|
|
|
|
||||||||
Distributable Cash Flow (b) |
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA (a) |
$ |
209.3 |
|
|
$ |
139.9 |
|
|
$ |
561.8 |
|
|
$ |
451.0 |
|
Cash interest expense (c) |
|
(48.0 |
) |
|
|
(29.4 |
) |
|
|
(124.0 |
) |
|
|
(97.3 |
) |
Maintenance capital expenditures (d) |
|
(6.4 |
) |
|
|
(4.8 |
) |
|
|
(15.2 |
) |
|
|
(13.1 |
) |
Adjusted EBITDA from unconsolidated affiliates, net |
|
(5.7 |
) |
|
|
(9.8 |
) |
|
|
(24.2 |
) |
|
|
(56.5 |
) |
Distributable cash flow from unconsolidated affiliates |
|
5.6 |
|
|
|
9.0 |
|
|
|
22.4 |
|
|
|
53.3 |
|
PRB cash received in excess of recognized revenues (e) |
|
2.9 |
|
|
|
6.3 |
|
|
|
12.7 |
|
|
|
18.6 |
|
Provision for income taxes |
|
(1.4 |
) |
|
|
(0.1 |
) |
|
|
(1.7 |
) |
|
|
(0.1 |
) |
Distributable cash flow attributable to CEQP |
|
156.3 |
|
|
|
111.1 |
|
|
|
431.8 |
|
|
|
355.9 |
|
Distributions to preferred |
|
(15.0 |
) |
|
|
(15.0 |
) |
|
|
(45.0 |
) |
|
|
(45.0 |
) |
Distributions to Niobrara preferred |
|
(10.3 |
) |
|
|
(10.3 |
) |
|
|
(31.0 |
) |
|
|
(30.9 |
) |
Distributable cash flow attributable to CEQP common |
$ |
131.0 |
|
|
$ |
85.8 |
|
|
$ |
355.8 |
|
|
$ |
280.0 |
|
|
|
|
|
|
|
|
|
||||||||
Free Cash Flow After Distributions (f) |
|
|
|
|
|
|
|
||||||||
Distributable cash flow attributable to CEQP common |
$ |
131.0 |
|
|
$ |
85.8 |
|
|
$ |
355.8 |
|
|
$ |
280.0 |
|
Less: Growth capital expenditures |
|
59.1 |
|
|
|
29.0 |
|
|
|
125.9 |
|
|
|
40.9 |
|
Less: Distributions to common unitholders (g) |
|
68.5 |
|
|
|
39.3 |
|
|
|
196.9 |
|
|
|
117.9 |
|
Free cash flow after distributions |
$ |
3.4 |
|
|
$ |
17.5 |
|
|
$ |
33.0 |
|
|
$ |
121.2 |
|
(a) |
EBITDA is defined as income before income taxes, plus debt-related costs (interest and debt expense, net and loss on modification/extinguishment of debt) and depreciation, amortization and accretion expense. Adjusted EBITDA considers the adjusted earnings impact of our unconsolidated affiliates by adjusting our equity earnings or losses from our unconsolidated affiliates to reflect our proportionate share (based on the distribution percentage) of their EBITDA, excluding gains and losses on long-lived assets and other impairments. Adjusted EBITDA also considers the impact of certain significant items, such as unit-based compensation charges, gains or losses on long-lived assets, impairments of goodwill, third party costs incurred related to potential and completed acquisitions, certain environmental remediation costs, the change in fair value of commodity inventory-related derivative contracts, costs associated with the realignment and restructuring of our operations and corporate structure, and other transactions identified in a specific reporting period. The change in fair value of commodity inventory-related derivative contracts is considered in determining Adjusted EBITDA given that the timing of recognizing gains and losses on these derivative contracts differs from the recognition of revenue for the related underlying sale of inventory to which these derivatives relate. Changes in the fair value of other derivative contracts is not considered in determining Adjusted EBITDA given the relatively short-term nature of those derivative contracts. EBITDA and Adjusted EBITDA are not measures calculated in accordance with GAAP, as they do not include deductions for items such as depreciation, amortization and accretion, interest and income taxes, which are necessary to maintain our business. EBITDA and Adjusted EBITDA should not be considered as alternatives to net income, operating cash flow or any other measure of financial performance presented in accordance with GAAP. EBITDA and Adjusted EBITDA calculations may vary among entities, so our computation may not be comparable to measures used by other companies. |
|
(b) |
Distributable cash flow is defined as Adjusted EBITDA, adjusted for cash interest expense, maintenance capital expenditures, income taxes, the cash received from our |
|
(c) |
Cash interest expense less amortization of deferred financing costs. |
|
(d) |
Maintenance capital expenditures are defined as those capital expenditures which do not increase operating capacity or revenues from existing levels. |
|
(e) |
Cash received from customers of our |
|
(f) |
Free cash flow after distributions is defined as distributable cash flow attributable to common unitholders less growth capital expenditures and distributions to common unitholders. Free cash flow after distributions should not be considered an alternative to cash flows from operating activities or any other measure of liquidity calculated in accordance with GAAP as those items are used to measure liquidity or the ability to service debt obligations. We believe that free cash flow after distributions provides additional information for evaluating our ability to generate cash flow after paying our distributions to common unitholders and paying for our growth capital expenditures. |
|
(g) |
Excludes |
|
|||||||||||||||
Segment Data |
|||||||||||||||
(in millions) |
|||||||||||||||
(unaudited) |
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Gathering and Processing North |
|
|
|
|
|
|
|
||||||||
Revenues |
$ |
414.8 |
|
|
$ |
270.1 |
|
|
$ |
1,208.4 |
|
|
$ |
738.0 |
|
Costs of product/services sold |
|
230.2 |
|
|
|
149.7 |
|
|
|
686.6 |
|
|
|
386.4 |
|
Operations and maintenance expenses |
|
27.4 |
|
|
|
14.1 |
|
|
|
78.6 |
|
|
|
38.2 |
|
Gain on long-lived assets, net |
|
— |
|
|
|
0.1 |
|
|
|
— |
|
|
|
0.2 |
|
EBITDA |
$ |
157.2 |
|
|
$ |
106.4 |
|
|
$ |
443.2 |
|
|
$ |
313.6 |
|
|
|
|
|
|
|
|
|
||||||||
Gathering and Processing South |
|
|
|
|
|
|
|
||||||||
Revenues |
$ |
315.2 |
|
|
$ |
26.7 |
|
|
$ |
381.2 |
|
|
$ |
76.0 |
|
Costs of product/services sold |
|
249.6 |
|
|
|
0.4 |
|
|
|
249.6 |
|
|
|
0.8 |
|
Operations and maintenance expenses |
|
14.3 |
|
|
|
5.4 |
|
|
|
28.6 |
|
|
|
17.4 |
|
Loss on long-lived assets, net |
|
(175.9 |
) |
|
|
(18.6 |
) |
|
|
(182.8 |
) |
|
|
(19.9 |
) |
Gain on acquisition |
|
75.3 |
|
|
|
— |
|
|
|
75.3 |
|
|
|
— |
|
Earnings from unconsolidated affiliates, net |
|
2.0 |
|
|
|
4.2 |
|
|
|
9.4 |
|
|
|
4.4 |
|
EBITDA |
$ |
(47.3 |
) |
|
$ |
6.5 |
|
|
$ |
4.9 |
|
|
$ |
42.3 |
|
|
|
|
|
|
|
|
|
||||||||
Storage and Logistics |
|
|
|
|
|
|
|
||||||||
Revenues |
$ |
836.0 |
|
|
$ |
929.5 |
|
|
$ |
3,008.2 |
|
|
$ |
2,374.6 |
|
Costs of product/services sold |
|
807.0 |
|
|
|
949.2 |
|
|
|
2,928.2 |
|
|
|
2,323.1 |
|
Operations and maintenance expenses |
|
13.3 |
|
|
|
12.1 |
|
|
|
36.8 |
|
|
|
34.6 |
|
Gain (loss) on long-lived assets, net |
|
— |
|
|
|
— |
|
|
|
(4.1 |
) |
|
|
0.1 |
|
Earnings (loss) from unconsolidated affiliates, net |
|
1.2 |
|
|
|
0.7 |
|
|
|
2.8 |
|
|
|
(130.3 |
) |
EBITDA |
$ |
16.9 |
|
|
$ |
(31.1 |
) |
|
$ |
41.9 |
|
|
$ |
(113.3 |
) |
|
|
|
|
|
|
|
|
||||||||
Total Segment EBITDA |
$ |
126.8 |
|
|
$ |
81.8 |
|
|
$ |
490.0 |
|
|
$ |
242.6 |
|
Corporate |
|
(33.9 |
) |
|
|
(25.8 |
) |
|
|
(103.6 |
) |
|
|
(67.2 |
) |
EBITDA |
$ |
92.9 |
|
|
$ |
56.0 |
|
|
$ |
386.4 |
|
|
$ |
175.4 |
|
|
|||||||||||
Operating Statistics |
|||||||||||
(unaudited) |
|||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Gathering and Processing North |
|
|
|
|
|
|
|
||||
Gas gathering volumes (MMcf/d) |
|
|
|
|
|
|
|
||||
|
255.9 |
|
|
139.2 |
|
|
247.9 |
|
|
138.4 |
|
|
113.1 |
|
|
102.0 |
|
|
106.3 |
|
|
100.0 |
|
Total gas gathering volumes |
369.0 |
|
|
241.2 |
|
|
354.2 |
|
|
238.4 |
|
Processing volumes (MMcf/d) |
|
|
|
|
|
|
|
||||
|
293.0 |
|
|
130.7 |
|
|
280.2 |
|
|
132.5 |
|
|
110.2 |
|
|
98.2 |
|
|
103.1 |
|
|
97.3 |
|
Total processing volumes |
403.2 |
|
|
228.9 |
|
|
383.3 |
|
|
229.8 |
|
|
|
|
|
|
|
|
|
||||
Crude oil gathering volumes (MBbls/d) |
78.3 |
|
|
81.6 |
|
|
78.6 |
|
|
90.4 |
|
Water gathering volumes (MBbls/d) |
172.9 |
|
|
90.0 |
|
|
170.1 |
|
|
85.0 |
|
|
|
|
|
|
|
|
|
||||
Gathering and Processing South |
|
|
|
|
|
|
|
||||
Gas gathering volumes (MMcf/d) |
|
|
|
|
|
|
|
||||
|
507.5 |
|
|
260.3 |
|
|
462.9 |
|
|
221.6 |
|
|
207.6 |
|
|
225.6 |
|
|
210.6 |
|
|
229.3 |
|
Barnett |
— |
|
|
248.1 |
|
|
212.9 |
|
|
214.9 |
|
Total gas gathering volumes |
715.1 |
|
|
734.0 |
|
|
886.4 |
|
|
665.8 |
|
Processing volumes (MMcf/d) |
|
|
|
|
|
|
|
||||
|
418.6 |
|
|
104.4 |
|
|
391.1 |
|
|
75.5 |
|
Barnett |
— |
|
|
76.1 |
|
|
70.4 |
|
|
76.3 |
|
Total processing volumes |
418.6 |
|
|
180.5 |
|
|
461.5 |
|
|
151.8 |
|
Compression volumes (MMcf/d) |
213.7 |
|
|
253.6 |
|
|
224.5 |
|
|
260.2 |
|
|
20.8 |
|
|
— |
|
|
21.5 |
|
|
— |
|
|
125.7 |
|
|
42.3 |
|
|
123.7 |
|
|
46.9 |
|
|
|
|
|
|
|
|
|
||||
Storage and Logistics |
|
|
|
|
|
|
|
||||
Gulf Coast Storage - firm contracted capacity (Bcf) (a) |
29.0 |
|
|
28.8 |
|
|
28.9 |
|
|
29.4 |
|
% of operational capacity contracted |
76 |
% |
|
75 |
% |
|
75 |
% |
|
76 |
% |
Firm storage services (MMcf/d) (a) |
327.1 |
|
|
225.7 |
|
|
321.7 |
|
|
313.6 |
|
Interruptible services (MMcf/d) (a) |
215.3 |
|
|
102.0 |
|
|
177.5 |
|
|
78.4 |
|
COLT Hub |
|
|
|
|
|
|
|
||||
Rail loading (MBbls/d) |
15.0 |
|
|
40.7 |
|
|
14.4 |
|
|
46.1 |
|
Outbound pipeline (MBbls/d) (b) |
23.2 |
|
|
20.5 |
|
|
25.1 |
|
|
16.3 |
|
NGL Operations |
|
|
|
|
|
|
|
||||
NGL volumes sold or processed (MBbls/d) |
112.8 |
|
|
151.2 |
|
|
129.4 |
|
|
138.9 |
|
NGL volumes trucked (MBbls/d) |
16.9 |
|
|
16.2 |
|
|
19.4 |
|
|
18.4 |
|
(a) |
Includes our |
|
(b) |
Represents only throughput leaving the terminal. |
|
|
Revised Full Year 2022 Adjusted EBITDA, Distributable Cash Flow and Free Cash Flow Guidance |
|
Reconciliation of Non-GAAP Financial Measures |
|
(in millions) |
|
(unaudited) |
|
|
Expected 2022 Range
|
Net Income Reconciliation |
|
Net income |
|
Interest and debt expense, net |
175 - 180 |
Depreciation, amortization and accretion |
330 - 345 |
Unit-based compensation charges |
30 - 35 |
(Gain) loss on long-lived assets and acquisitions, net |
112 |
Earnings from unconsolidated affiliates, net |
(10) - (15) |
Adjusted EBITDA from unconsolidated affiliates |
25 - 30 |
Other (a) |
25 - 30 |
Adjusted EBITDA |
|
|
|
Cash interest expense (b) |
(175) - (180) |
Maintenance capital expenditures (c) |
(25) - (30) |
PRB cash received in excess of recognized revenues (d) |
15 - 20 |
Adjusted EBITDA from unconsolidated affiliates |
(25) - (30) |
Distributable cash flow from unconsolidated affiliates |
22 - 27 |
Cash distributions to preferred unitholders (e) |
(101) |
Distributable cash flow attributable to CEQP (f) |
|
|
|
Cash Flows from Operating Activities Reconciliation |
|
Net cash provided by operating activities, net |
|
Interest and debt expense, net |
175 - 180 |
Adjusted EBITDA from unconsolidated affiliates |
25 - 30 |
Earnings from unconsolidated affiliates, net |
(10) - (15) |
Amortization of debt-related deferred costs |
(6) |
Changes in operating assets and liabilities, net |
90 - 110 |
Adjusted EBITDA |
|
|
|
Cash interest expense (b) |
(175) - (180) |
Maintenance capital expenditures (c) |
(25) - (30) |
PRB cash received in excess of recognized revenues (d) |
15 - 20 |
Adjusted EBITDA from unconsolidated affiliates |
(25) - (30) |
Distributable cash flow from unconsolidated affiliates |
22 - 27 |
Cash distributions to preferred unitholders (e) |
(101) |
Distributable cash flow attributable to CEQP (f) |
|
|
|
Less: Growth capital expenditures |
200 - 220 |
Less: Distributions to common unitholders(g) |
270 |
Free cash flow after distributions (h) |
|
(a) |
Includes significant transaction and environmental related costs and other items. |
|
(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) |
Cash received from customers of our |
|
(e) |
Includes cash distributions to preferred unitholders and Crestwood Niobrara preferred unitholders. |
|
(f) |
Distributable cash flow is defined as Adjusted EBITDA, adjusted for cash interest expense, maintenance capital expenditures, income taxes, the cash received from our |
|
(g) |
Excludes |
|
(h) |
Free cash flow after distributions is defined as distributable cash flow attributable to common unitholders less growth capital expenditures and distributions to common unitholders. Free cash flow after distributions should not be considered an alternative to cash flows from operating activities or any other measure of liquidity calculated in accordance with GAAP as those items are used to measure liquidity or the ability to service debt obligations. We believe that free cash flow after distributions provides additional information for evaluating our ability to generate cash flow after paying our distributions to common unitholders and paying for our growth capital expenditures. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20221101006226/en/
Investor Contacts
andrew.thorington@crestwoodlp.com
Vice President, Finance & Investor Relations
rhianna.disch@crestwoodlp.com
Director, Investor Relations
Sustainability and Media Contact
joanne.howard@crestwoodlp.com
Senior Vice President,
Source:
FAQ
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