NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1
– Organization and Business Description
Organization
The accompanying notes to the consolidated financial statements apply to Crestwood Equity Partners LP and Crestwood Midstream Partners LP, unless otherwise indicated. References in this report to “we,” “us,” “our,” “ours,” “our company,” the “partnership,” the “Company,” “Crestwood Equity,” “CEQP,” and similar terms refer to either Crestwood Equity Partners LP itself or Crestwood Equity Partners LP and its consolidated subsidiaries, as the context requires. Unless otherwise indicated, references to “Crestwood Midstream” and “CMLP” refer to Crestwood Midstream Partners LP and its consolidated subsidiaries.
The accompanying consolidated financial statements and related notes should be read in conjunction with our
2018
Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 22, 2019. The financial information as of
June 30, 2019
, and for the
three and six months ended
June 30, 2019
and
2018
, is unaudited. The consolidated balance sheets as of
December 31, 2018
, were derived from the audited balance sheets filed in our
2018
Annual Report on Form 10-K.
Business Description
Crestwood Equity is a publicly-traded (NYSE: CEQP) Delaware limited partnership that develops, acquires, owns or controls, and operates primarily fee-based assets and operations within the energy midstream sector. We provide broad-ranging infrastructure solutions across the value chain to service premier liquids-rich natural gas and crude oil shale plays across the United States. We own and operate a diversified portfolio of crude oil and natural gas gathering, processing, storage and transportation assets that connect fundamental energy supply with energy demand across North America. Crestwood Equity is a holding company and all of its consolidated operating assets are owned by or through its wholly-owned subsidiary, Crestwood Midstream, a Delaware limited partnership.
Note 2
– Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
Our consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and include the accounts of all consolidated subsidiaries after the elimination of all intercompany accounts and transactions. In management’s opinion, all necessary adjustments to fairly present our results of operations, financial position and cash flows for the periods presented have been made and all such adjustments are of a normal and recurring nature. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP have been omitted pursuant to the rules and regulations of the SEC.
Significant Accounting Policies
Effective January 1, 2019, we adopted the following accounting standard. There were no other material changes in our significant accounting policies from those described in our 2018 Annual Report on Form10-K.
Leases
We maintain leases in the ordinary course of our business activities. Our leases include those for the office buildings, crude oil railroad cars, certain vehicles and other operating facilities and equipment leases. We also sublease certain of our crude oil railroad cars and trucks to a third party. We do not have any material leases where we are considered to be the lessor. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Prior to January 1, 2019, we classified our leases as either capital or operating leases under Accounting Standards Codification (ASC) Topic 840,
Leases (Topic 840)
. We recognized assets (included in property, plant and equipment) and liabilities (included in accrued expenses and other liabilities and other long-term liabilities) related to our capital leases on our
consolidated balance sheets. We also recognized depreciation expense and interest expense related to our capital leases on our consolidated statements of operations. The majority of our lease arrangements were classified as operating leases, under which we did not recognize assets or liabilities on our consolidated balance sheets, but rather recognized lease payments on our consolidated statements of operations as either costs of product/services sold or operations and maintenance expense on a straight-line basis over the lease term.
On January 1, 2019, we adopted the provisions of ASC Topic 842,
Leases (Topic 842)
, which revises the accounting for leases by requiring certain leases to be recognized as assets and liabilities on the balance sheet, and requiring companies to disclose additional information about their leasing arrangements. We adopted the standard using the modified retrospective method. Based on the practical expedients allowed for in the standard, we did not reassess the current GAAP classification of leases, easements and rights of way that existed as of January 1, 2019, and we did not utilize the hindsight method in determining the assets and liabilities to be recorded for our existing leases on January 1, 2019. The adoption of this standard required us to make significant judgments on whether our revenue and expenditure-related contracts were considered to be leases (or contain leases) under
Topic 842
, and if contracts were considered to be leases whether they should be considered operating leases or finance leases under the new standard. We do not have any material revenue contracts that are considered leases under
Topic 842
.
Upon the adoption of this standard, on January 1, 2019, we recorded a
$67.5 million
increase to our operating lease right-of-use assets, a
$18.6 million
increase to our accrued expenses and other liabilities and a
$48.9 million
increase to our long-term operating lease liabilities, related to reflecting our operating leases on our consolidated balance sheet as a result of adopting the new standard. We also recorded a
$1.6 million
increase to our property, plant and equipment,
$0.3 million
increase to our accrued expenses and other liabilities and a
$1.3 million
increase to our other long-term liabilities, related to our finance leases (which were all formerly capital leases under
Topic 840
) as a result of applying the provisions of the new standard to the leases. The adoption of the standard did not result in a material cumulative effect of accounting change to our consolidated financial statements. The following table summarizes the balance sheet information related to our operating and finance leases at
June 30, 2019
(
in millions
):
|
|
|
|
|
Operating Leases
|
|
Operating lease right-of-use assets, net
|
$
|
59.5
|
|
|
|
Accrued expenses and other liabilities
|
$
|
17.2
|
|
Long-term operating lease liabilities
|
47.3
|
|
Total operating lease liabilities
|
$
|
64.5
|
|
Finance Leases
|
|
Property, plant and equipment
|
$
|
14.6
|
|
Less: accumulated depreciation
|
3.6
|
|
Property, plant and equipment, net
|
$
|
11.0
|
|
|
|
Accrued expenses and other liabilities
|
$
|
3.0
|
|
Other long-term liabilities
|
6.7
|
|
Total finance lease liabilities
|
$
|
9.7
|
|
The estimation of our right-of-use assets and lease liabilities requires us to make significant assumptions and judgments about the term of the lease, variable payments, and discount rates. Our operating leases have remaining terms that vary from
one year
to
21 years
and certain of those leases have renewal options to extend the leases from
one year
to
ten years
at the end of each lease term, or terminate the leases at our sole discretion. In addition, our finance leases have remaining terms that vary from
two years
to
four years
and certain of those leases have options to purchase the lease property by the end of the lease term. We made significant assumptions on the likelihood on whether we would renew our leases or purchase the property at the end of the lease terms in determining the discounted cash flows to measure our right-of-use assets and lease liabilities. The estimation of variable lease payments in determining discounted cash flows, including those with usage-based costs, also required us to make significant assumptions on the timing and nature of the variability of those payments based on the lease terms. We utilized discount rates ranging from
4.9%
to
8.3%
to estimate the discounted cash flows used in estimating our right-of-use assets and lease liabilities as of
June 30, 2019
, which were primarily based on our credit-adjusted collateralized incremental borrowing rate.
We recognize operating lease expense and amortize our right-of-use assets for our finance leases on a straight-line basis over the term of the respective leases. We have applied the practical expedient of not separating the lease and non-lease components
for our leases where the predominant consideration paid related to the underlying operating and finance lease contracts relate to the lease component.
The following table presents the costs and sublease income associated with our operating and finance leases for the
three and six months ended
June 30, 2019
(
in millions
):
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30, 2019
|
|
June 30, 2019
|
Operating leases:
|
|
|
|
Operating lease expense
(1)(2)
|
$
|
7.5
|
|
|
$
|
15.0
|
|
Sublease income
(3)
|
0.2
|
|
|
0.4
|
|
Total operating lease expense, net
|
$
|
7.3
|
|
|
$
|
14.6
|
|
Finance leases:
|
|
|
|
Amortization of right-of-use assets
(4)
|
$
|
0.9
|
|
|
$
|
1.8
|
|
Interest on lease liabilities
(5)
|
0.2
|
|
|
0.4
|
|
Total finance lease expense
|
$
|
1.1
|
|
|
$
|
2.2
|
|
|
|
(1)
|
Approximately
$4.7 million
and
$9.5 million
is included in costs of product/services sold on our consolidated statements of operations for the
three and six months ended
June 30, 2019
, and
$2.8 million
and
$5.5 million
is included in operations and maintenance expense on our consolidated statements of operations for the
three and six months ended
June 30, 2019
.
|
|
|
(2)
|
Includes short-term and variable lease costs of approximately
$1.3 million
and
$2.0 million
for the
three and six months ended
June 30, 2019
.
|
|
|
(3)
|
Included in Marketing, Supply and Logistics service revenues on our consolidated statements of operations.
|
|
|
(4)
|
Included in depreciation, amortization and accretion on our consolidated statements of operations.
|
|
|
(5)
|
Included in interest and debt expense, net on our consolidated statements of operations.
|
The following table presents supplemental cash flow information for our operating and finance leases for the
six months ended
June 30, 2019
(
in millions
):
|
|
|
|
|
Cash paid for lease liabilities:
|
|
Operating cash flows from operating leases
|
$
|
12.1
|
|
Operating cash flows from finance leases
|
$
|
0.4
|
|
Financing cash flows from finance leases
|
$
|
1.9
|
|
Right-of-use assets obtained in exchange for lease obligations:
|
|
Operating leases
(1)
|
$
|
3.6
|
|
Finance leases
|
$
|
1.6
|
|
|
|
(1)
|
Includes approximately
$2.9 million
of operating leases obtained from the Jackalope Acquisition, which is further discussed in Note 3.
|
The following table presents the weighted-average remaining lease term and the weighted-average discount rate associated with our operating and finance leases for the
six months ended
June 30, 2019
:
|
|
|
|
Weighted-average remaining lease term
(in years)
:
|
|
Operating leases
|
4.7
|
|
Finance leases
|
3.0
|
|
Weighted-average discount rate:
|
|
Operating leases
|
6.0
|
%
|
Finance leases
|
7.3
|
%
|
The following table presents the future minimum lease liabilities under
Topic 842
and
Topic 840
for our leases for the next five years and in total thereafter (
in millions
):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Topic 842
|
|
Topic 840
|
|
June 30, 2019
|
|
December 31, 2018
|
Year Ending December 31,
|
Operating Leases
|
|
Finance Leases
|
|
Total
|
|
Operating Leases
|
|
Capital Leases
|
|
Total
|
2019
(1)
|
$
|
10.2
|
|
|
$
|
1.8
|
|
|
$
|
12.0
|
|
|
$
|
22.3
|
|
|
$
|
3.0
|
|
|
$
|
25.3
|
|
2020
|
18.8
|
|
|
3.6
|
|
|
22.4
|
|
|
18.1
|
|
|
3.3
|
|
|
21.4
|
|
2021
|
15.3
|
|
|
3.5
|
|
|
18.8
|
|
|
14.4
|
|
|
3.2
|
|
|
17.6
|
|
2022
|
10.5
|
|
|
1.9
|
|
|
12.4
|
|
|
9.7
|
|
|
1.9
|
|
|
11.6
|
|
2023
|
6.7
|
|
|
—
|
|
|
6.7
|
|
|
6.0
|
|
|
—
|
|
|
6.0
|
|
Thereafter
|
13.6
|
|
|
—
|
|
|
13.6
|
|
|
10.7
|
|
|
—
|
|
|
10.7
|
|
Total lease payments
|
75.1
|
|
|
10.8
|
|
|
85.9
|
|
|
81.2
|
|
|
11.4
|
|
|
92.6
|
|
Less: Interest
|
10.6
|
|
|
1.1
|
|
|
11.7
|
|
|
—
|
|
|
1.3
|
|
|
1.3
|
|
Present value of lease liabilities
|
$
|
64.5
|
|
|
$
|
9.7
|
|
|
$
|
74.2
|
|
|
$
|
81.2
|
|
|
$
|
10.1
|
|
|
$
|
91.3
|
|
|
|
(1)
|
Represents the remainder of 2019 at
June 30, 2019
.
|
New Accounting Pronouncement Issued But Not Yet Adopted
As of
June 30, 2019
, the following accounting standard had not yet been adopted by us:
In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-13,
Financial Instruments - Credit Losses (Topic 326)
, which provides guidance on how companies should evaluate their accounts and notes receivable and other financial instruments for impairment. The standard requires companies to evaluate their financial instruments for impairment by recording an allowance for doubtful accounts and/or bad debt expense based on certain categories of instruments rather than a specific identification approach. We expect to adopt the provisions of this standard effective January 1, 2020 and are currently evaluating the impact that this standard may have on our consolidated financial statements.
Note 3
– Acquisition
On April 9, 2019, Crestwood Niobrara LLC (Crestwood Niobrara), our consolidated subsidiary, acquired Williams Partners LP’s (Williams)
50%
equity interest in Jackalope Gas Gathering Services, L.L.C. (Jackalope) for approximately
$484.6 million
(Jackalope Acquisition). The acquisition was funded through a combination of borrowings under the CMLP credit facility and the issuance of
$235 million
of new preferred units to CN Jackalope Holdings LLC (Jackalope Holdings) (see Note 10 for a further discussion of the issuance of the new preferred units). Prior to the Jackalope Acquisition, Crestwood Niobrara owned a
50%
equity interest in Jackalope, which we accounted for under the equity method of accounting. As a result of this transaction, Crestwood Niobrara controls and owns
100%
of the equity interests in Jackalope. The financial results of Jackalope are included in our gathering and processing segment from the date of the acquisition. Transaction costs related to the Jackalope Acquisition were approximately
$2.6 million
during both the
three and six months ended
June 30, 2019
. These costs are included in operations and maintenance expenses in our consolidated statements of operations.
The purchase price has been allocated to the assets acquired and liabilities assumed based on preliminary fair values. Those preliminary fair values are Level 3 fair value measurements and were developed by management with the assistance of a third-party valuation firm. The preliminary fair values were estimated primarily utilizing market related information and other projections on the performance of the assets acquired, including an analysis of discounted cash flows at a discount rate of approximately
12%
. The preliminary fair values are subject to change pending a final determination of the fair value of the assets and liabilities acquired as more information is received about their respective values. We expect to finalize the purchase price allocation for this transaction in 2019.
The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the acquisition date (in
millions
):
|
|
|
|
|
Cash
|
$
|
22.5
|
|
Other current assets
|
30.9
|
|
Property, plant and equipment
|
525.4
|
|
Intangible assets
|
310.0
|
|
Goodwill
|
81.8
|
|
Current liabilities
|
(30.1
|
)
|
Other long-term liabilities
|
(19.8
|
)
|
Estimated fair value of 100% interest in Jackalope
|
920.7
|
|
Less:
|
|
Elimination of equity investment in Jackalope
|
226.7
|
|
Gain on acquisition of Jackalope
|
209.4
|
|
Total purchase price
|
$
|
484.6
|
|
The identifiable intangible assets primarily consists of a customer contract that has a weighted-average remaining life of
18 years
. The goodwill recognized relates primarily to anticipated operating synergies between the assets acquired and our existing operations. The fair value of the assets acquired and liabilities assumed in the Jackalope Acquisition exceeded the sum of the cash consideration paid and the historical book value of our
50%
equity interest in Jackalope (which was remeasured at fair value and derecognized) and, as a result, we recognized a gain of approximately
$209.4 million
. This gain is included in gain on acquisition in our consolidated statements of operations.
Our consolidated statements of operations include the results of Jackalope since April 9, 2019, the closing date of the acquisition. During both the
three and six months ended
June 30, 2019
, we recognized approximately
$20.2 million
of revenues and
$3.4 million
of net income related to Jackalope’s operations.
The tables below presents selected unaudited pro forma information as if the Jackalope Acquisition had occurred on January 1, 2018. The pro forma information is not necessarily indicative of the financial results that would have occurred if the transaction had been completed as of the dates indicated. The amounts have been calculated after applying our accounting policies and adjusting the results to reflect the depreciation, amortization and accretion expense that would have been charged assuming the preliminary fair value adjustments to property, plant and equipment and intangible assets had been made at the beginning of the respective reporting period. The pro forma net income also includes the effects of interest expense on incremental borrowings and recognition of deferred revenue.
Crestwood Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenues
|
|
$
|
685.3
|
|
|
$
|
857.3
|
|
|
$
|
1,539.3
|
|
|
$
|
1,987.3
|
|
Net income (loss)
|
|
$
|
225.1
|
|
|
$
|
(28.1
|
)
|
|
$
|
232.3
|
|
|
$
|
(1.1
|
)
|
Crestwood Midstream
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenues
|
|
$
|
685.3
|
|
|
$
|
857.3
|
|
|
$
|
1,539.3
|
|
|
$
|
1,987.3
|
|
Net income (loss)
|
|
$
|
223.0
|
|
|
$
|
(30.1
|
)
|
|
$
|
227.7
|
|
|
$
|
(4.8
|
)
|
Note 4
– Certain Balance Sheet Information
Accrued Expenses and Other Liabilities
Accrued expenses and other liabilities consisted of the following (
in millions
):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CEQP
|
|
CMLP
|
|
June 30,
|
|
December 31,
|
|
June 30,
|
|
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Accrued expenses
(1)
|
$
|
43.3
|
|
|
$
|
64.8
|
|
|
$
|
42.1
|
|
|
$
|
63.7
|
|
Accrued property taxes
|
6.7
|
|
|
2.6
|
|
|
6.7
|
|
|
2.6
|
|
Income tax payable
|
0.2
|
|
|
0.3
|
|
|
0.2
|
|
|
0.3
|
|
Interest payable
|
27.2
|
|
|
19.8
|
|
|
27.2
|
|
|
19.8
|
|
Accrued additions to property, plant and equipment
|
17.7
|
|
|
10.5
|
|
|
17.7
|
|
|
10.5
|
|
Operating leases
|
17.2
|
|
|
—
|
|
|
17.2
|
|
|
—
|
|
Finance leases
|
3.0
|
|
|
2.4
|
|
|
3.0
|
|
|
2.4
|
|
Deferred revenue
|
12.6
|
|
|
12.0
|
|
|
12.6
|
|
|
12.0
|
|
Total accrued expenses and other liabilities
|
$
|
127.9
|
|
|
$
|
112.4
|
|
|
$
|
126.7
|
|
|
$
|
111.3
|
|
|
|
(1)
|
Includes
$16.2 million
of related party accrued expenses at
December 31, 2018
related to deposits received from Jackalope prior to the acquisition of the remaining
50%
equity interest in Jackalope from Williams in April 2019.
|
Note 5
- Investments in Unconsolidated Affiliates
Variable Interest Entity
Crestwood Permian Basin Holdings LLC (Crestwood Permian) is a joint venture owned by Crestwood Infrastructure Holdings LLC (Crestwood Infrastructure), our wholly-owned subsidiary, and an affiliate of First Reserve Management, L.P. (First Reserve). We manage and account for our
50%
ownership interest in Crestwood Permian, which is a variable interest entity, under the equity method of accounting as we exercise significant influence, but do not control Crestwood Permian and we are not its primary beneficiary due to First Reserve’s rights to exercise control over the entity.
Net Investments and Earnings
Our net investments in and earnings from our unconsolidated affiliates are as follows (
in millions
):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
|
|
Earnings (Loss) from Unconsolidated Affiliates
|
|
June 30,
|
|
December 31,
|
|
Three Months Ended June 30,
|
|
Six Months Ended
June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Stagecoach Gas Services LLC
(1)
|
$
|
818.4
|
|
|
$
|
830.4
|
|
|
$
|
6.4
|
|
|
$
|
7.0
|
|
|
$
|
13.4
|
|
|
$
|
12.7
|
|
Jackalope Gas Gathering Services, L.L.C.
(2)
|
—
|
|
|
210.2
|
|
|
0.5
|
|
|
3.8
|
|
|
3.7
|
|
|
6.8
|
|
Crestwood Permian Basin Holdings LLC
(3)
|
104.7
|
|
|
104.3
|
|
|
(3.3
|
)
|
|
0.7
|
|
|
(6.7
|
)
|
|
3.4
|
|
Tres Palacios Holdings LLC
(4)
|
40.4
|
|
|
35.0
|
|
|
0.1
|
|
|
—
|
|
|
0.3
|
|
|
0.4
|
|
Powder River Basin Industrial Complex, LLC
(5)
|
8.4
|
|
|
8.3
|
|
|
—
|
|
|
0.5
|
|
|
(0.1
|
)
|
|
1.1
|
|
Total
|
$
|
971.9
|
|
|
$
|
1,188.2
|
|
|
$
|
3.7
|
|
|
$
|
12.0
|
|
|
$
|
10.6
|
|
|
$
|
24.4
|
|
|
|
(1)
|
As of
June 30, 2019
, our equity in the underlying net assets of Stagecoach Gas Services LLC (Stagecoach Gas) exceeded our investment balance by approximately
$51.3 million
. This excess amount is entirely attributable to goodwill and, as such, is not subject to amortization. Pursuant to the Stagecoach limited liability company agreement, our share of Stagecoach’s equity earnings increased from
35%
to
40%
effective July 1, 2018. Our Stagecoach Gas investment is included in our storage and transportation segment.
|
|
|
(2)
|
On April 9, 2019, Crestwood Niobrara acquired Williams’
50%
equity interest in Jackalope, and as a result, Crestwood Niobrara controls and owns
100%
of the equity interests in Jackalope. As a result of this transaction, we eliminated our historical equity investment in Jackalope of approximately
$226.7 million
as of April 9, 2019 and began consolidating Jackalope’s operations. Our Jackalope investment was included in our gathering and processing segment. For a further discussion of Crestwood Niobrara’s acquisition of the remaining
50%
equity interest in Jackalope, see Note 3.
|
|
|
(3)
|
As of
June 30, 2019
, the difference of
$8.1 million
between our equity in Crestwood Permian’s net assets and our investment balance is not subject to amortization. Pursuant to the Crestwood Permian limited liability company agreement, we were allocated 100% of Crestwood New Mexico Pipeline LLC’s (Crestwood New Mexico) earnings through June 30, 2018. Effective July 1, 2018, our equity earnings from Crestwood New Mexico is based on our ownership percentage of Crestwood Permian, which is currently
50%
. Our Crestwood Permian investment is included in our gathering and processing segment.
|
|
|
(4)
|
As of
June 30, 2019
, our equity in the underlying net assets of Tres Palacios Holdings LLC (Tres Holdings) exceeded our investment balance by approximately
$24.7 million
. Our Tres Holdings investment is included in our storage and transportation segment.
|
|
|
(5)
|
As of
June 30, 2019
, our equity in the underlying net assets of Powder River Basin Industrial Complex, LLC (PRBIC) exceeded our investment balance by approximately
$5.7 million
. Our PRBIC investment is included in our storage and transportation segment.
|
Summarized Financial Information of Unconsolidated Affiliates
Below is the summarized operating results for our significant unconsolidated affiliates (
in millions; amounts represent 100% of unconsolidated affiliate information
):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
2019
|
|
2018
|
|
Operating Revenues
|
|
Operating Expenses
|
|
Net Income (Loss)
|
|
Operating Revenues
|
|
Operating Expenses
|
|
Net Income
|
Stagecoach Gas
|
$
|
79.1
|
|
|
$
|
40.4
|
|
|
$
|
38.9
|
|
|
$
|
85.5
|
|
|
$
|
39.9
|
|
|
$
|
45.6
|
|
Crestwood Permian
|
17.3
|
|
|
29.6
|
|
|
(13.4
|
)
|
|
40.0
|
|
|
38.4
|
|
|
4.4
|
|
Other
(1)
|
38.1
|
|
|
32.6
|
|
|
5.5
|
|
|
52.9
|
|
|
38.4
|
|
|
14.5
|
|
Total
|
$
|
134.5
|
|
|
$
|
102.6
|
|
|
$
|
31.0
|
|
|
$
|
178.4
|
|
|
$
|
116.7
|
|
|
$
|
64.5
|
|
|
|
(1)
|
Includes our Jackalope (prior to the acquisition of the remaining
50%
equity interest from Williams), Tres Holdings and PRBIC equity investments during the
six months ended
June 30, 2019
and
2018
. We amortize the excess basis in these equity investments as an increase in our earnings from unconsolidated affiliates. We recorded amortization of the excess basis in our Tres Holdings equity investment of
$0.6 million
during both the
six months ended
June 30, 2019
and
2018
. We recorded amortization of the excess basis in our PRBIC equity investment of
$0.2 million
and
$0.3 million
during the
six months ended
June 30, 2019
and
2018
. We recorded amortization of the excess basis in the Jackalope equity investment of less than
$0.1 million
during both the
six months ended
June 30, 2019
and
2018
.
|
Distributions and Contributions
The following table summarizes our distributions from and contributions to our unconsolidated affiliates
(in millions)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions
(1)
|
|
Contributions
|
|
|
Six Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Stagecoach Gas
|
|
$
|
25.4
|
|
|
$
|
22.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Jackalope
|
|
11.6
|
|
|
15.0
|
|
|
24.4
|
|
|
6.8
|
|
Crestwood Permian
|
|
2.9
|
|
|
8.3
|
|
|
10.0
|
|
|
0.1
|
|
Tres Holdings
|
|
1.2
|
|
|
1.4
|
|
|
6.3
|
|
|
—
|
|
PRBIC
|
|
—
|
|
|
0.9
|
|
|
0.2
|
|
|
—
|
|
Total
|
|
$
|
41.1
|
|
|
$
|
48.1
|
|
|
$
|
40.9
|
|
|
$
|
6.9
|
|
|
|
(1)
|
In July 2019, we received cash distributions from Stagecoach Gas and Tres Holdings of approximately
$11.8 million
and
$2.3 million
, respectively.
|
Other
Contingent Consideration
. Pursuant to the Stagecoach Gas limited liability company agreement, we may be required to make payments of up to
$57 million
to Con Edison Gas Pipeline and Storage Northeast, LLC after December 31, 2020 if certain criteria are not met by Stagecoach Gas by December 31, 2020, including achieving certain performance targets on growth capital projects. These growth capital projects depend on the construction of other third-party expansion projects, and during 2017, those third-party projects experienced regulatory and other delays that caused Stagecoach Gas to delay its growth capital projects. As a result, our consolidated balance sheets reflect an other long-term liability of
$57 million
at
June 30, 2019
and
December 31, 2018
.
Guarantee.
CEQP issued a guarantee under which CEQP has agreed to fund 100% of the costs to build the Nautilus gathering system (which is currently estimated to cost
$180 million
, of which approximately
$169.0 million
has been spent through
June 30, 2019
) if Crestwood Permian fails to do so. The Nautilus gathering system is owned by Crestwood Permian Basin LLC, a
50%
equity investment of Crestwood Permian. We do not believe this guarantee is probable of resulting in future losses based on our assessment of the nature of the guarantee, the financial condition of the guaranteed party and the period of time that the guarantee has been outstanding, and as a result, we have not recorded a liability on our consolidated balance sheets at
June 30, 2019
and
December 31, 2018
.
Note 6
– Risk Management
We are exposed to certain market risks related to our ongoing business operations. These risks include exposure to changing commodity prices. We utilize derivative instruments to manage our exposure to fluctuations in commodity prices, which is discussed below. Additional information related to our derivatives is discussed in
Note 7
.
Commodity Derivative Instruments and Price Risk Management
Risk Management Activities
We sell NGLs and crude oil to energy related businesses and may use a variety of financial and other instruments including forward contracts involving physical delivery of NGLs, heating oil and crude oil. We periodically enter into offsetting positions to economically hedge against the exposure our customer contracts create. Certain of these contracts and positions are derivative instruments. We do not designate any of our commodity-based derivatives as hedging instruments for accounting purposes. Our commodity-based derivatives are reflected at fair value in the consolidated balance sheets, and changes in the fair value of these derivatives that impact the consolidated statements of operations are reflected in costs of product/services sold. Our commodity-based derivatives that are settled with physical commodities are reflected as an increase to product revenues, and the commodity inventory that is utilized to satisfy those physical obligations is reflected as an increase to costs of product sold in our consolidated statements of operations. The following table summarizes the impact to our consolidated statements of operations related to our commodity-based derivatives reflected in operating revenues and costs of product/services sold during the
three and six months ended
June 30, 2019
and
2018
(
in millions
):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Product revenues
|
|
$
|
40.2
|
|
|
$
|
33.0
|
|
|
$
|
144.3
|
|
|
$
|
130.8
|
|
Gain (loss) reflected in costs of product/services sold
|
|
$
|
9.9
|
|
|
$
|
(6.4
|
)
|
|
$
|
7.0
|
|
|
$
|
1.4
|
|
We attempt to balance our contractual portfolio in terms of notional amounts and timing of performance and delivery obligations. This balance in the contractual portfolio significantly reduces the volatility in costs of product/services sold related to these instruments.
Commodity Price and Credit Risk
Notional Amounts and Terms
The notional amounts and terms of our derivative financial instruments include the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
|
Fixed Price
Payor
|
|
Fixed Price
Receiver
|
|
Fixed Price
Payor
|
|
Fixed Price
Receiver
|
Propane, crude and heating oil (MMBbls)
|
36.8
|
|
|
38.3
|
|
|
27.8
|
|
|
30.1
|
|
Natural gas (Bcf)
|
1.2
|
|
|
1.3
|
|
|
1.8
|
|
|
1.8
|
|
Notional amounts reflect the volume of transactions, but do not represent the amounts exchanged by the parties to the financial instruments. Accordingly, notional amounts do not reflect our monetary exposure to market or credit risks. All contracts subject to price risk had a maturity of
36 months
or less; however,
83%
of the contracted volumes will be delivered or settled within
12 months
.
Credit Risk
Inherent in our contractual portfolio are certain credit risks. Credit risk is the risk of loss from nonperformance by suppliers, customers or financial counterparties to a contract. We take an active role in managing credit risk and have established control procedures, which are reviewed on an ongoing basis. We attempt to minimize credit risk exposure through credit policies and periodic monitoring procedures as well as through customer deposits, letters of credit and entering into netting agreements that allow for offsetting counterparty receivable and payable balances for certain financial transactions, as deemed appropriate. The counterparties associated with our price risk management activities are energy marketers and propane retailers, resellers and dealers.
Certain of our derivative instruments have credit limits that require us to post collateral. The amount of collateral required to be posted is a function of the net liability position of the derivative as well as our established credit limit with the respective counterparty. If our credit rating were to change, the counterparties could require us to post additional collateral. The amount of additional collateral that would be required to be posted would vary depending on the extent of change in our credit rating as well as the requirements of the individual counterparty. In addition, we have margin requirements with a New York Mercantile Exchange (NYMEX) broker related to our net asset or liability position with such broker. All collateral amounts have been netted against the asset or liability with the respective counterparty and are reflected in our consolidated balance sheets as assets and liabilities from price risk management activities.
The following table presents the fair value of our commodity derivative instruments with credit-risk related contingent features and their associated collateral (
in millions
):
|
|
|
|
|
|
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
Aggregate fair value of derivative instruments with credit-risk-related contingent features
(1)
|
$
|
3.8
|
|
|
$
|
2.2
|
|
NYMEX-related net derivative liability position
|
$
|
10.3
|
|
|
$
|
9.4
|
|
NYMEX-related cash collateral posted
|
$
|
21.6
|
|
|
$
|
21.7
|
|
Cash collateral received
|
$
|
15.5
|
|
|
$
|
14.2
|
|
|
|
(1)
|
At
June 30, 2019
and
December 31, 2018
, we posted less than
$0.1 million
of collateral associated with these derivatives.
|
Note 7
– Fair Value Measurements
The accounting standard for fair value measurement establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows:
|
|
•
|
Level 1—Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, listed equities and US government treasury securities.
|
|
|
•
|
Level 2—Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category include non-exchange-traded derivatives such as over the counter (OTC) forwards, options and physical exchanges.
|
|
|
•
|
Level 3—Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.
|
Cash, Accounts Receivable and Accounts Payable
As of
June 30, 2019
and
December 31, 2018
, the carrying amounts of cash, accounts receivable and accounts payable approximate fair value based on the short-term nature of these instruments.
Credit Facility
The fair value of the amounts outstanding under our CMLP credit facility approximates the carrying amounts as of
June 30, 2019
and
December 31, 2018
, due primarily to the variable nature of the interest rate of the instrument, which is considered a Level 2 fair value measurement.
Senior Notes
We estimate the fair value of our senior notes primarily based on quoted market prices for the same or similar issuances (representing a Level 2 fair value measurement). The following table details the carrying amount (reduced for deferred financing costs associated with the respective notes) and fair value of our senior notes (
in millions
):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
2023 Senior Notes
|
$
|
694.4
|
|
|
$
|
716.1
|
|
|
$
|
693.6
|
|
|
$
|
668.1
|
|
2025 Senior Notes
|
$
|
493.9
|
|
|
$
|
509.5
|
|
|
$
|
493.4
|
|
|
$
|
466.2
|
|
2027 Senior Notes
|
$
|
591.6
|
|
|
$
|
598.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Financial Assets and Liabilities
As of
June 30, 2019
and
December 31, 2018
, we held certain assets and liabilities that are required to be measured at fair value on a recurring basis, which include our derivative instruments related to heating oil, crude oil, and NGLs. Our derivative instruments consist of forwards, swaps, futures, physical exchanges and options.
Our derivative instruments that are traded on the NYMEX have been categorized as Level 1.
Our derivative instruments also include OTC contracts, which are not traded on a public exchange. The fair values of these derivative instruments are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. These instruments have been categorized as Level 2.
Our OTC options are valued based on the Black Scholes option pricing model that considers time value and volatility of the underlying commodity. The inputs utilized in the model are based on publicly available information as well as broker quotes. These options have been categorized as Level 2.
Our financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.
The following tables set forth by level within the fair value hierarchy, our financial instruments that were accounted for at fair value on a recurring basis at
June 30, 2019
and
December 31, 2018
(
in millions
):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2019
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Gross Fair Value
|
|
Contract Netting
(1)
|
|
Collateral/Margin Received or Paid
|
|
Fair Value
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets from price risk management
|
$
|
6.2
|
|
|
$
|
151.8
|
|
|
$
|
—
|
|
|
$
|
158.0
|
|
|
$
|
(132.8
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
25.0
|
|
Suburban Propane Partners, L.P. units
(2)
|
3.5
|
|
|
—
|
|
|
—
|
|
|
3.5
|
|
|
—
|
|
|
—
|
|
|
3.5
|
|
Total assets at fair value
|
$
|
9.7
|
|
|
$
|
151.8
|
|
|
$
|
—
|
|
|
$
|
161.5
|
|
|
$
|
(132.8
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
28.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities from price risk management
|
$
|
5.9
|
|
|
$
|
140.6
|
|
|
$
|
—
|
|
|
$
|
146.5
|
|
|
$
|
(132.8
|
)
|
|
$
|
(6.3
|
)
|
|
$
|
7.4
|
|
Total liabilities at fair value
|
$
|
5.9
|
|
|
$
|
140.6
|
|
|
$
|
—
|
|
|
$
|
146.5
|
|
|
$
|
(132.8
|
)
|
|
$
|
(6.3
|
)
|
|
$
|
7.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Gross Fair Value
|
|
Contract Netting
(1)
|
|
Collateral/Margin Received or Paid
|
|
Fair Value
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets from price risk management
|
$
|
12.4
|
|
|
$
|
160.7
|
|
|
$
|
—
|
|
|
$
|
173.1
|
|
|
$
|
(140.3
|
)
|
|
$
|
1.9
|
|
|
$
|
34.7
|
|
Suburban Propane Partners, L.P. units
(2)
|
2.8
|
|
|
—
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
|
—
|
|
|
2.8
|
|
Total assets at fair value
|
$
|
15.2
|
|
|
$
|
160.7
|
|
|
$
|
—
|
|
|
$
|
175.9
|
|
|
$
|
(140.3
|
)
|
|
$
|
1.9
|
|
|
$
|
37.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities from price risk management
|
$
|
7.0
|
|
|
$
|
144.7
|
|
|
$
|
—
|
|
|
$
|
151.7
|
|
|
$
|
(140.3
|
)
|
|
$
|
(5.6
|
)
|
|
$
|
5.8
|
|
Total liabilities at fair value
|
$
|
7.0
|
|
|
$
|
144.7
|
|
|
$
|
—
|
|
|
$
|
151.7
|
|
|
$
|
(140.3
|
)
|
|
$
|
(5.6
|
)
|
|
$
|
5.8
|
|
|
|
(1)
|
Amounts represent the impact of legally enforceable master netting agreements that allow us to settle positive and negative positions as well as cash collateral held or placed with the same counterparties.
|
|
|
(2)
|
Amount is reflected in other assets on CEQP’s consolidated balance sheets.
|
Note 8
– Long-Term Debt
Long-term debt consisted of the following at
June 30, 2019
and
December 31, 2018
(
in millions
):
|
|
|
|
|
|
|
|
|
|
June 30,
2019
|
|
December 31,
2018
|
Credit Facility
|
$
|
363.0
|
|
|
$
|
578.2
|
|
2023 Senior Notes
|
700.0
|
|
|
700.0
|
|
2025 Senior Notes
|
500.0
|
|
|
500.0
|
|
2027 Senior Notes
|
600.0
|
|
|
—
|
|
Other
|
0.8
|
|
|
1.5
|
|
Less: deferred financing costs, net
|
32.4
|
|
|
26.4
|
|
Total debt
|
2,131.4
|
|
|
1,753.3
|
|
Less: current portion
|
0.2
|
|
|
0.9
|
|
Total long-term debt, less current portion
|
$
|
2,131.2
|
|
|
$
|
1,752.4
|
|
Credit Facility
In April 2019, Crestwood Niobrara acquired the remaining
50%
equity interest in Jackalope and funded approximately
$250 million
of the total purchase price through borrowings under Crestwood Midstream’s credit facility. Contemporaneously with the acquisition of the remaining interest in Jackalope, Crestwood Midstream entered into the First Amendment to the Second Amended and Restated Credit Agreement to modify certain defined terms and calculations, among other things, to account for the Jackalope acquisition. The other debt covenants under the amended credit agreement are materially consistent with the credit facility that existed at
December 31, 2018
.
At
June 30, 2019
, Crestwood Midstream had
$655.7 million
of available capacity under its credit facility considering the most restrictive debt covenants in its credit agreement. At
June 30, 2019
and
December 31, 2018
, Crestwood Midstream’s outstanding standby letters of credit were
$64.0 million
and
$68.0 million
. Borrowings under the credit facility accrue interest at prime or Eurodollar based rates plus applicable spreads, which resulted in interest rates between
4.39%
and
6.50%
at
June 30, 2019
and
4.63%
and
6.75%
at
December 31, 2018
. The weighted-average interest rate as of
June 30, 2019
and
December 31, 2018
was
4.41%
and
4.79%
.
Crestwood Midstream is required under its credit agreement to maintain a net debt to consolidated EBITDA ratio (as defined in its credit agreement) of not more than
5.50
to 1.0, a consolidated EBITDA to consolidated interest expense ratio (as defined in its credit agreement) of not less than
2.50
to 1.0, and a senior secured leverage ratio (as defined in its credit agreement) of not more than
3.75
to 1.0. At
June 30, 2019
, the net debt to consolidated EBITDA ratio was approximately
4.22
to 1.0, the consolidated EBITDA to consolidated interest expense ratio was approximately
4.35
to 1.0, and the senior secured leverage ratio was
0.71
to 1.0.
Senior Notes
In April 2019, Crestwood Midstream issued
$600 million
of
5.625%
unsecured senior notes due 2027 (the 2027 Senior Notes). The 2027 Senior Notes will mature on May 1, 2027, and interest is payable semiannually in arrears on May 1 and November 1 of each year, beginning November 1, 2019. The net proceeds from this offering of approximately
$591.1 million
were used to repay a portion of the outstanding borrowings under our credit facility, which included the borrowings that were used to fund the acquisition of the remaining
50%
equity interest in Jackalope.
Note 9
- Earnings Per Limited Partner Unit
Our net income (loss) attributable to Crestwood Equity Partners is allocated to the subordinated and limited partner unitholders based on their ownership percentage after giving effect to net income attributable to the preferred units. We calculate basic net income per limited partner unit using the two-class method. Diluted net income per limited partner unit is computed using the treasury stock method, which considers the impact to net income attributable to Crestwood Equity Partners and limited partner units from the potential issuance of limited partner units.
We exclude potentially dilutive securities from the determination of diluted earnings per unit (as well as their related income statement impacts) when their impact on net income attributable to Crestwood Equity Partners per limited partner unit is anti-dilutive. The following table summarizes information regarding the weighted-average of common units excluded during the
three and six months ended
June 30, 2019
and
2018
(in millions)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30,
|
|
June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Preferred units
(1)
|
—
|
|
|
7.1
|
|
|
7.1
|
|
|
7.1
|
|
Crestwood Niobrara’s preferred units
(1)
|
—
|
|
|
5.9
|
|
|
—
|
|
|
5.9
|
|
Stock-based compensation performance units
(2)
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
Subordinated units
(2)
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
|
|
(1)
|
See
Note 10
for additional information regarding the potential conversion/redemption of our preferred units and Crestwood Niobrara’s preferred units to CEQP common units.
|
|
|
(2)
|
For a description of our performance units and subordinated units, see our 2018 Annual Report on Form 10-K.
|
The table below shows CEQP’s net income per limited partner unit based on the number of basic and diluted limited partner units outstanding for the three and six months ended June 30, 2019 and 2018
(in millions, except per unit data)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Common unitholders’ interest in net income (loss)
|
|
$
|
198.2
|
|
|
$
|
(40.6
|
)
|
|
$
|
193.3
|
|
|
$
|
(25.5
|
)
|
Dilutive effect of net income attributable to preferred units
|
|
15.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Dilutive effect of net income attributable to subordinated units
|
|
1.2
|
|
|
—
|
|
|
1.2
|
|
|
—
|
|
Diluted net income (loss)
|
|
$
|
214.4
|
|
|
$
|
(40.6
|
)
|
|
$
|
194.5
|
|
|
$
|
(25.5
|
)
|
|
|
|
|
|
|
|
|
|
Weighted-average limited partners’ units outstanding - basic
|
|
71.8
|
|
|
71.2
|
|
|
71.8
|
|
|
71.2
|
|
Dilutive effect of preferred units
|
|
7.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Dilutive effect of Crestwood Niobrara preferred units
|
|
3.4
|
|
|
—
|
|
|
4.5
|
|
|
—
|
|
Dilutive effect of stock-based compensation performance units
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
Dilutive effect of subordinated units
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
Weighted-average limited partners’ units outstanding - diluted
|
|
83.0
|
|
|
71.2
|
|
|
77.0
|
|
|
71.2
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per unit:
|
|
|
|
|
|
|
|
|
Net income (loss) per limited partner unit
|
|
$
|
2.76
|
|
|
$
|
(0.57
|
)
|
|
$
|
2.69
|
|
|
$
|
(0.36
|
)
|
Diluted earnings per unit:
|
|
|
|
|
|
|
|
|
Net income (loss) per limited partner unit
|
|
$
|
2.58
|
|
|
$
|
(0.57
|
)
|
|
$
|
2.53
|
|
|
$
|
(0.36
|
)
|
|
|
|
|
|
|
|
|
|
Note 10
– Partners’ Capital
Common Units
We have an employee unit purchase plan under which employees of the general partner may purchase our common units through payroll deductions up to a maximum of
10%
of the employees’ eligible compensation, not to exceed
$25,000
for any calendar year. During the
three and six months ended
June 30, 2019
,
1,761
and
2,550
common units were purchased under the plan. There were no common units purchased under the plan during the
three and six months ended
June 30, 2018
. For a further description of our employee unit purchase plan, see our 2018 Annual Report on Form 10-K.
Preferred Units
Subject to certain conditions, the holders of the preferred units have the right to convert their preferred units into (i) common units on a 1-for-10 basis or (ii) a number of common units determined pursuant to a conversion ratio set forth in Crestwood Equity’s partnership agreement upon the occurrence of certain events, such as a change in control. The preferred units have voting rights that are identical to the voting rights of the common units and will vote with the common units as a single class, with each preferred unit entitled to one vote for each common unit into which such preferred unit is convertible, except that the preferred units are entitled to vote as a separate class on any matter on which all unitholders are entitled to vote that adversely affects the rights, powers, privileges or preferences of the preferred units in relation to Crestwood Equity’s other securities outstanding.
Distributions
Crestwood Equity
Limited Partners.
A summary of CEQP’s limited partner quarterly cash distributions for the
six months ended
June 30, 2019
and
2018
is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
Record Date
|
|
Payment Date
|
|
Per Unit Rate
|
|
Cash Distributions
(
in millions
)
|
2019
|
|
|
|
|
|
|
February 7, 2019
|
|
February 14, 2019
|
|
$
|
0.60
|
|
|
$
|
43.1
|
|
May 8, 2019
|
|
May 15, 2019
|
|
0.60
|
|
|
43.1
|
|
|
|
|
|
|
|
$
|
86.2
|
|
2018
|
|
|
|
|
|
|
February 7, 2018
|
|
February 14, 2018
|
|
$
|
0.60
|
|
|
$
|
42.7
|
|
May 8, 2018
|
|
May 15, 2018
|
|
0.60
|
|
|
42.7
|
|
|
|
|
|
|
|
$
|
85.4
|
|
On
July 18, 2019
,
we declared a distribution of
$0.60
per limited partner unit to be paid on
August 14, 2019
to unitholders of record on
August 7, 2019
with respect to the quarter ended
June 30, 2019
.
Preferred Unit Holders
.
During the
six months ended
June 30, 2019
and
2018
, we made cash distributions to our preferred unitholders of approximately
$30.0 million
in both periods. On
July 18, 2019
, the board of directors of our general partner authorized a cash distribution to our preferred unitholders of approximately
$15.0 million
for the quarter ended
June 30, 2019
.
Crestwood Midstream
During the
six months ended
June 30, 2019
and
2018
, Crestwood Midstream paid cash distributions of
$117.5 million
and
$120.0 million
to Crestwood Equity.
Non-Controlling Partner
Crestwood Niobrara issued preferred interests (Series A-2 Preferred Units) to Jackalope Holdings, which are reflected as non-controlling interest in our consolidated financial statements and included as a component of partners’ capital on our consolidated balance sheet at December 31, 2018. In April 2019, Crestwood Niobrara issued
$235 million
in new preferred interests (Series A-3 Preferred Units, and collectively with the Series A-2 Preferred Units defined as the Crestwood Niobrara Preferred Units) to Jackalope Holdings in conjunction with Crestwood Niobrara’s acquisition of the remaining
50%
equity interest in Jackalope from
Williams. In connection with the issuance of the Series A-3 Preferred Units, we entered into a Third Amended and Restated Limited Liability Company Agreement (Crestwood Niobrara Amended Agreement) with Jackalope Holdings, pursuant to which we serve as managing member of Crestwood Niobrara. The Crestwood Niobrara Amended Agreement modified certain provisions under the previous limited liability company agreement related to the conversion and redemption of the Series A-2 Preferred Units, as follows:
|
|
•
|
The Crestwood Niobrara Preferred Units are convertible by the preferred interest holder starting on January 1, 2021 into Crestwood Niobrara common units. The preferred interest holder has the option to contribute additional capital to Crestwood Niobrara to increase their common ownership percentage in Crestwood Niobrara to 50% upon the conversion.
|
|
|
•
|
The Crestwood Niobrara Preferred Units are redeemable by the preferred interest holder starting on December 31, 2023 for an amount equal to the Liquidation Preference (as defined in the Crestwood Niobrara Amended Agreement). If redemption is elected by the preferred interest holder, we have the option to elect to give consideration equal to the Liquidation Preference in either (i) unregistered CEQP common units (subject to a Registration Rights Agreement) with total value of up to
$100 million
and/or cash; or (ii) proceeds from a full liquidation of Crestwood Niobrara’s assets and unregistered CEQP common units (subject to a Registration Rights Agreement).
|
|
|
•
|
The Crestwood Niobrara Preferred Units are redeemable by us starting on January 1, 2023 for either (i) unregistered CEQP common units (subject to a Registration Rights Agreement) with total value of up to
$100 million
and/or cash; or (ii) proceeds from a full liquidation of Crestwood Niobrara’s assets and registered CEQP common units (subject to a Registration Rights Agreement).
|
As a result of the modification of the conversion and redemption provisions of the Crestwood Niobrara Preferred Units, we have reflected these preferred interests as a non-controlling interest in subsidiary apart from partners’ capital on our consolidated balance sheet at June 30, 2019. The following table shows the change in our non-controlling interest in subsidiary at June 30, 2019
(in millions)
:
|
|
|
|
|
|
Balance at December 31, 2018
|
|
$
|
—
|
|
Reclassification of Series A-2 Preferred Units
|
|
178.8
|
|
Issuance of Series A-3 Preferred Units
|
|
235.0
|
|
Net income attributable to non-controlling partner
(1)
|
|
10.6
|
|
Balance at June 30, 2019
|
|
$
|
424.4
|
|
|
|
(1)
|
We adjust the carrying amount of our non-controlling interest to its redemption value each period through net income attributable to non-controlling partner.
|
Crestwood Niobrara makes quarterly cash distributions on its preferred interests within 30 days after the end of each quarter. During the six months ended June 30, 2019 and 2018, Crestwood Niobrara paid cash distributions related to the Series A-2 Preferred Units of
$6.6 million
and
$3.3 million
to Jackalope Holdings. In July 2019, Crestwood Niobrara paid cash distributions to Jackalope Holdings of
$3.9 million
related to the Series A-2 Preferred Units and
$5.3 million
related to the Series A-3 Preferred Units for the quarter ended June 30, 2019.
Other
In February 2019, Crestwood Equity issued
238,263
performance units under the Crestwood Equity Partners LP Long Term Incentive Plan (Crestwood LTIP). The performance units are designed to provide an incentive for continuous employment to certain key employees. The vesting of performance units is subject to the attainment of certain performance and market goals over a three-year period, and entitle a participant to receive common units of Crestwood Equity without payment of an exercise price upon vesting. As of
June 30, 2019
, we had total unamortized compensation expense of approximately
$6.3 million
related to these performance units, which we expect will be amortized during the next three years. We recognized compensation expense of approximately
$0.5 million
and
$1.9 million
under the Crestwood LTIP related to these performance units during the
three and six months ended
June 30, 2019
, which is included in general and administrative expenses on our consolidated statements of operations.
Note 11
– Commitments and Contingencies
Legal Proceedings
We are periodically involved in litigation proceedings. If we determine that a negative outcome is probable and the amount of loss is reasonably estimable, then we accrue the estimated amount. The results of litigation proceedings cannot be predicted with certainty. We could incur judgments, enter into settlements or revise our expectations regarding the outcome of certain matters, and such developments could have a material adverse effect on our results of operations or cash flows in the period in which the amounts are paid and/or accrued. As of
June 30, 2019
and
December 31, 2018
, both CEQP and CMLP had approximately
$0.2 million
and
$0.1 million
accrued for outstanding legal matters. Based on currently available information, we believe it is remote that future costs related to known contingent liability exposures for which we can estimate will exceed current accruals by an amount that would have a material adverse impact on our consolidated financial statements. As we learn new facts concerning contingencies, we reassess our position both with respect to accrued liabilities and other potential exposures.
Any loss estimates are inherently subjective, based on currently available information, and are subject to management’s judgment and various assumptions. Due to the inherently subjective nature of these estimates and the uncertainty and unpredictability surrounding the outcome of legal proceedings, actual results may differ materially from any amounts that have been accrued.
Regulatory Compliance
In the ordinary course of our business, we are subject to various laws and regulations. In the opinion of our management, compliance with current laws and regulations will not have a material effect on our results of operations, cash flows or financial condition.
Environmental Compliance
Our operations are subject to stringent and complex laws and regulations pertaining to worker health, safety, and the environment. We are subject to laws and regulations at the federal, state, regional and local levels that relate to air and water quality, hazardous and solid waste management and disposal, and other environmental matters. The cost of planning, designing, constructing and operating our facilities must incorporate compliance with environmental laws and regulations and safety standards. Failure to comply with these laws and regulations may trigger a variety of administrative, civil and potentially criminal enforcement measures.
During 2014, we experienced
three
releases totaling approximately
28,000
barrels of produced water on our Arrow water gathering system located on the Fort Berthold Indian Reservation in North Dakota. We immediately notified the National Response Center, the Three Affiliated Tribes and numerous other regulatory authorities. Thereafter, we contained and cleaned up the releases, and placed the impacted segments of these water lines back into service. In May 2015, we experienced a release of approximately
5,200
barrels of produced water on our Arrow water gathering system, immediately notified numerous regulatory authorities and other third parties, and thereafter contained and cleaned up the releases.
In August 2015, we received a notice of violation from the Three Affiliated Tribes’ Environmental Division related to our 2014 produced water releases on the Fort Berthold Indian Reservation. The notice of violation imposes fines and requests reimbursements exceeding
$1.1 million
; however, the notice of violation was stayed on September 15, 2015. Our discussions regarding the notice of violation continue with the Three Affiliated Tribes.
We will continue our remediation efforts to ensure the impacted lands are restored to their prior state. We believe these releases are insurable events under our policies, and we have notified our carriers of these events. We have not recorded an insurance receivable as of
June 30, 2019
.
At
June 30, 2019
and
December 31, 2018
, our accrual of approximately
$1.7 million
and
$1.8 million
was based on our undiscounted estimate of amounts we will spend on compliance with environmental and other regulations, and any associated fines or penalties (including the Arrow water releases described above). We estimate that our potential liability for reasonably possible outcomes related to our environmental exposures could range from approximately
$1.7 million
to
$3.3 million
at
June 30, 2019
.
Self-Insurance
We utilize third-party insurance subject to varying retention levels of self-insurance, which management considers prudent. Such self-insurance relates to losses and liabilities primarily associated with medical claims, workers’ compensation claims and general, product, vehicle and environmental liability. Losses are accrued based upon management’s estimates of the aggregate liability for claims incurred using certain assumptions followed in the insurance industry and based on past experience. The primary assumption utilized is actuarially determined loss development factors. The loss development factors are based primarily on historical data. Our self insurance reserves could be affected if future claim developments differ from the historical trends. We believe changes in health care costs, trends in health care claims of our employee base, accident frequency and severity and other factors could materially affect the estimate for these liabilities. We continually monitor changes in employee demographics, incident and claim type and evaluate our insurance accruals and adjust our accruals based on our evaluation of these qualitative data points. We are liable for the development of claims for our disposed retail propane operations, provided they were reported prior to August 1, 2012. The following table summarizes CEQP’s and CMLP’s self-insurance reserves at
June 30, 2019
and
December 31, 2018
(
in millions
):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CEQP
|
|
CMLP
|
|
June 30, 2019
|
|
December 31, 2018
|
|
June 30, 2019
|
|
December 31, 2018
|
Self-insurance reserves
(1)
|
$
|
10.1
|
|
|
$
|
11.3
|
|
|
$
|
8.6
|
|
|
$
|
9.6
|
|
|
|
(1)
|
At
June 30, 2019
, CEQP and CMLP classified approximately
$7.4 million
and
$6.3 million
, respectively of these reserves as other long-term liabilities on their consolidated balance sheets.
|
Guarantees and Indemnifications
We are involved in various joint ventures that sometimes require financial and performance guarantees. In a financial guarantee, we are obligated to make payments if the guaranteed party fails to make payments under, or violates the terms of, the financial arrangement. In a performance guarantee, we provide assurance that the guaranteed party will execute on the terms of the contract. If they do not, we are required to perform on their behalf. We also periodically provide indemnification arrangements related to assets or businesses we have sold. For a further description of our guarantees associated with our joint ventures, see
Note 5
.
Our potential exposure under guarantee and indemnification arrangements can range from a specified amount to an unlimited dollar amount, depending on the nature of the claim, specificity as to duration, and the particular transaction. As of
June 30, 2019
and
December 31, 2018
, we have no amounts accrued for these guarantees.
Note 12
– Related Party Transactions
Crestwood Holdings indirectly owns both CEQP’s and CMLP’s general partner. The affiliates of Crestwood Holdings and its owners are considered CEQP’s and CMLP’s related parties. We enter into transactions with our affiliates within the ordinary course of business, including gas gathering and processing services under long-term contracts, product purchases and various operating agreements. We also enter into transactions with our affiliates related to services provided on our expansion projects. For the six months ended
June 30, 2019
and 2018, we paid approximately
$5.1 million
and
$1.9 million
of capital expenditures to Applied Consultants, Inc., an affiliate of Crestwood Holdings.
The following table shows transactions with our affiliates which are reflected in our consolidated statements of operations (
in millions
). For a further description of our related party agreements, see our 2018 Annual Report on Form 10-K.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30,
|
|
June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenues at CEQP and CMLP
|
$
|
1.3
|
|
|
$
|
0.3
|
|
|
$
|
2.5
|
|
|
$
|
0.6
|
|
Costs of product/services sold at CEQP and CMLP
(1)
|
$
|
0.9
|
|
|
$
|
32.2
|
|
|
$
|
35.3
|
|
|
$
|
45.3
|
|
Operations and maintenance expenses at CEQP and CMLP
(2)
|
$
|
5.9
|
|
|
$
|
7.3
|
|
|
$
|
13.4
|
|
|
$
|
14.0
|
|
General and administrative expenses charged by CEQP to CMLP, net
(3)
|
$
|
10.1
|
|
|
$
|
4.9
|
|
|
$
|
21.1
|
|
|
$
|
10.5
|
|
General and administrative expenses at CEQP charged from Crestwood Holdings, net
(4)
|
$
|
(0.1
|
)
|
|
$
|
(4.4
|
)
|
|
$
|
(5.3
|
)
|
|
$
|
(4.8
|
)
|
|
|
(1)
|
Includes
$0.9 million
and
$9.1 million
during the
three and six months ended
June 30, 2019
and
$15.2 million
and
$28.3 million
during the
three and six months ended
June 30, 2018
related to purchases of NGLs from a subsidiary of Crestwood Permian. Includes less than
$0.1 million
and
$23.9 million
during the
three and six months ended
June 30, 2019
and
$17.0 million
during both the
three and six months ended
June 30, 2018
related to an agency marketing agreement with Ascent Resources - Utica, LLC, an affiliate of Crestwood Holdings. Includes less than
$0.1 million
and
$2.3 million
during the
three and six months ended
June 30, 2019
related to purchases of natural gas from a subsidiary of Stagecoach Gas.
|
|
|
(2)
|
We have operating agreements with certain of our unconsolidated affiliates pursuant to which we charge them operations and maintenance expenses in accordance with their respective agreements, and these charges are reflected as a reduction of operations and maintenance expenses in our consolidated statements of income. During the
three and six months ended
June 30, 2019
, we charged
$1.9 million
and
$3.9 million
to Stagecoach Gas,
$1.0 million
and
$2.2 million
to Tres Palacios, and
$3.0 million
and
$6.8 million
to Crestwood Permian. During the six months ended June 30, 2019, we charged
$0.5 million
to Jackalope. During the
three and six months ended
June 30, 2018
, we charged
$2.1 million
and
$4.2 million
to Stagecoach Gas,
$0.9 million
and
$2.0 million
to Tres Palacios,
$4.1 million
and
$7.5 million
to Crestwood Permian, and
$0.2 million
and
$0.3 million
to Jackalope.
|
|
|
(3)
|
Includes
$11.0 million
and
$22.9 million
of net unit-based compensation charges allocated from CEQP to CMLP for the
three and six months ended
June 30, 2019
and and
$5.7 million
and
$12.1 million
for the
three and six months ended
June 30, 2018
. In addition, includes
$0.9 million
and
$1.8 million
of CMLP’s general and administrative costs allocated to CEQP during the
three and six months ended
June 30, 2019
and and
$0.8 million
and
$1.6 million
during the
three and six months ended
June 30, 2018
.
|
|
|
(4)
|
Includes
$0.2 million
and
$5.6 million
unit-based compensation charges allocated from Crestwood Holdings to CEQP and CMLP during the
three and six months ended
June 30, 2019
and
$4.6 million
and
$5.4 million
during the
three and six months ended
June 30, 2018
.
|
The following table shows accounts receivable and accounts payable with our affiliates (
in millions
):
|
|
|
|
|
|
|
|
|
|
June 30,
2019
|
|
December 31,
2018
|
Accounts receivable at CEQP and CMLP
|
$
|
5.1
|
|
|
$
|
4.1
|
|
Accounts payable at CEQP
|
$
|
6.7
|
|
|
$
|
16.1
|
|
Accounts payable at CMLP
|
$
|
4.2
|
|
|
$
|
13.6
|
|
Note 13
– Segments
Financial Information
We have
three
operating and reportable segments: (i) gathering and processing operations; (ii) storage and transportation operations; and (iii) marketing, supply and logistics operations. Our corporate operations include all general and administrative expenses that are not allocated to our reportable segments. We assess the performance of our operating segments based on EBITDA, which is defined as income before income taxes, plus interest and debt expense, net and depreciation, amortization and accretion expense.
Below is a reconciliation of CEQP’s net income (loss) to EBITDA (
in millions
):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30,
|
|
June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net income (loss)
|
$
|
225.0
|
|
|
$
|
(21.5
|
)
|
|
$
|
239.1
|
|
|
$
|
12.6
|
|
Add:
|
|
|
|
|
|
|
|
Interest and debt expense, net
|
27.8
|
|
|
24.3
|
|
|
52.7
|
|
|
48.7
|
|
Provision for income taxes
|
0.3
|
|
|
0.2
|
|
|
0.3
|
|
|
0.2
|
|
Depreciation, amortization and accretion
|
49.3
|
|
|
44.5
|
|
|
89.1
|
|
|
89.6
|
|
EBITDA
|
$
|
302.4
|
|
|
$
|
47.5
|
|
|
$
|
381.2
|
|
|
$
|
151.1
|
|
Below is a reconciliation of CMLP’s net income (loss) to EBITDA (
in millions
):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
June 30,
|
|
June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net income (loss)
|
$
|
222.9
|
|
|
$
|
(23.5
|
)
|
|
$
|
234.5
|
|
|
$
|
8.9
|
|
Add:
|
|
|
|
|
|
|
|
Interest and debt expense, net
|
27.8
|
|
|
24.3
|
|
|
52.7
|
|
|
48.7
|
|
Provision for income taxes
|
0.3
|
|
|
0.1
|
|
|
0.3
|
|
|
0.1
|
|
Depreciation, amortization and accretion
|
52.7
|
|
|
47.4
|
|
|
96.1
|
|
|
95.2
|
|
EBITDA
|
$
|
303.7
|
|
|
$
|
48.3
|
|
|
$
|
383.6
|
|
|
$
|
152.9
|
|
The following tables summarize CEQP’s and CMLP’s reportable segment data for the
three and six months ended
June 30, 2019
and
2018
(
in millions
). Intersegment revenues included in the following tables are accounted for as arms-length transactions that apply our revenue recognition policies as described in our 2018 Annual Report on Form 10-K. Included in earnings from unconsolidated affiliates, net below was approximately
$10.3 million
and
$9.9 million
of interest expense, depreciation and amortization expense and gains (losses) on long-lived assets, net related to our equity investments for the three months ended June 30, 2019 and 2018 and
$23.0 million
and
$19.6 million
for the
six months ended
June 30, 2019
and
2018
.
Crestwood Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2019
|
|
Gathering and Processing
|
|
Storage and Transportation
|
|
Marketing, Supply and Logistics
|
|
Corporate
|
|
Total
|
Revenues
|
$
|
199.7
|
|
|
$
|
4.9
|
|
|
$
|
478.8
|
|
|
$
|
—
|
|
|
$
|
683.4
|
|
Intersegment revenues
|
25.4
|
|
|
3.2
|
|
|
(28.6
|
)
|
|
—
|
|
|
—
|
|
Costs of product/services sold
|
108.9
|
|
|
—
|
|
|
428.3
|
|
|
—
|
|
|
537.2
|
|
Operations and maintenance expense
|
24.6
|
|
|
0.9
|
|
|
9.2
|
|
|
—
|
|
|
34.7
|
|
General and administrative expense
|
—
|
|
|
—
|
|
|
—
|
|
|
22.3
|
|
|
22.3
|
|
Gain (loss) on long-lived assets, net
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
Gain on acquisition
|
209.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
209.4
|
|
Earnings (loss) from unconsolidated affiliates, net
|
(2.8
|
)
|
|
6.5
|
|
|
—
|
|
|
—
|
|
|
3.7
|
|
Other income, net
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
EBITDA
|
$
|
298.0
|
|
|
$
|
13.7
|
|
|
$
|
12.7
|
|
|
$
|
(22.0
|
)
|
|
$
|
302.4
|
|
Goodwill
|
$
|
127.7
|
|
|
$
|
—
|
|
|
$
|
92.7
|
|
|
$
|
—
|
|
|
$
|
220.4
|
|
Total assets
|
$
|
3,505.7
|
|
|
$
|
991.7
|
|
|
$
|
548.1
|
|
|
$
|
41.7
|
|
|
$
|
5,087.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2018
|
|
Gathering and Processing
|
|
Storage and Transportation
|
|
Marketing, Supply and Logistics
|
|
Corporate
|
|
Total
|
Revenues
|
$
|
255.5
|
|
|
$
|
5.1
|
|
|
$
|
579.9
|
|
|
$
|
—
|
|
|
$
|
840.5
|
|
Intersegment revenues
|
45.4
|
|
|
2.5
|
|
|
(47.9
|
)
|
|
—
|
|
|
—
|
|
Costs of product/services sold
|
208.8
|
|
|
0.1
|
|
|
516.5
|
|
|
—
|
|
|
725.4
|
|
Operations and maintenance expense
|
17.8
|
|
|
0.8
|
|
|
13.3
|
|
|
—
|
|
|
31.9
|
|
General and administrative expense
|
—
|
|
|
—
|
|
|
—
|
|
|
23.4
|
|
|
23.4
|
|
Loss on long-lived assets
|
—
|
|
|
—
|
|
|
(24.4
|
)
|
|
—
|
|
|
(24.4
|
)
|
Earnings from unconsolidated affiliates, net
|
4.5
|
|
|
7.5
|
|
|
—
|
|
|
—
|
|
|
12.0
|
|
Other income, net
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
EBITDA
|
$
|
78.8
|
|
|
$
|
14.2
|
|
|
$
|
(22.2
|
)
|
|
$
|
(23.3
|
)
|
|
$
|
47.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2019
|
|
Gathering and Processing
|
|
Storage and Transportation
|
|
Marketing, Supply and Logistics
|
|
Corporate
|
|
Total
|
Revenues
|
$
|
382.0
|
|
|
$
|
12.7
|
|
|
$
|
1,123.9
|
|
|
$
|
—
|
|
|
$
|
1,518.6
|
|
Intersegment revenues
|
78.2
|
|
|
6.8
|
|
|
(85.0
|
)
|
|
—
|
|
|
—
|
|
Costs of product/services sold
|
246.9
|
|
|
—
|
|
|
985.9
|
|
|
—
|
|
|
1,232.8
|
|
Operations and maintenance expense
|
42.7
|
|
|
1.9
|
|
|
18.7
|
|
|
—
|
|
|
63.3
|
|
General and administrative expense
|
—
|
|
|
—
|
|
|
—
|
|
|
59.5
|
|
|
59.5
|
|
Gain (loss) on long-lived assets, net
|
(2.0
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
0.2
|
|
|
(2.0
|
)
|
Gain on acquisition
|
209.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
209.4
|
|
Earnings (loss) from unconsolidated affiliates, net
|
(3.0
|
)
|
|
13.6
|
|
|
—
|
|
|
—
|
|
|
10.6
|
|
Other income, net
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.2
|
|
EBITDA
|
$
|
375.0
|
|
|
$
|
31.2
|
|
|
$
|
34.1
|
|
|
$
|
(59.1
|
)
|
|
$
|
381.2
|
|
Goodwill
|
$
|
127.7
|
|
|
$
|
—
|
|
|
$
|
92.7
|
|
|
$
|
—
|
|
|
$
|
220.4
|
|
Total assets
|
$
|
3,505.7
|
|
|
$
|
991.7
|
|
|
$
|
548.1
|
|
|
$
|
41.7
|
|
|
$
|
5,087.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2018
|
|
Gathering and Processing
|
|
Storage and Transportation
|
|
Marketing, Supply and Logistics
|
|
Corporate
|
|
Total
|
Revenues
|
$
|
595.8
|
|
|
$
|
9.3
|
|
|
$
|
1,350.4
|
|
|
$
|
—
|
|
|
$
|
1,955.5
|
|
Intersegment revenues
|
86.7
|
|
|
4.5
|
|
|
(91.2
|
)
|
|
—
|
|
|
—
|
|
Costs of product/services sold
|
496.5
|
|
|
0.2
|
|
|
1,194.5
|
|
|
—
|
|
|
1,691.2
|
|
Operations and maintenance expense
|
35.5
|
|
|
1.6
|
|
|
29.3
|
|
|
—
|
|
|
66.4
|
|
General and administrative expense
|
—
|
|
|
—
|
|
|
—
|
|
|
47.3
|
|
|
47.3
|
|
Gain (loss) on long-lived assets
|
0.1
|
|
|
—
|
|
|
(24.2
|
)
|
|
—
|
|
|
(24.1
|
)
|
Earnings from unconsolidated affiliates, net
|
10.2
|
|
|
14.2
|
|
|
—
|
|
|
—
|
|
|
24.4
|
|
Other income, net
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.2
|
|
EBITDA
|
$
|
160.8
|
|
|
$
|
26.2
|
|
|
$
|
11.2
|
|
|
$
|
(47.1
|
)
|
|
$
|
151.1
|
|
Crestwood Midstream
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2019
|
|
Gathering and Processing
|
|
Storage and Transportation
|
|
Marketing, Supply and Logistics
|
|
Corporate
|
|
Total
|
Revenues
|
$
|
199.7
|
|
|
$
|
4.9
|
|
|
$
|
478.8
|
|
|
$
|
—
|
|
|
$
|
683.4
|
|
Intersegment revenues
|
25.4
|
|
|
3.2
|
|
|
(28.6
|
)
|
|
—
|
|
|
—
|
|
Costs of product/services sold
|
108.9
|
|
|
—
|
|
|
428.3
|
|
|
—
|
|
|
537.2
|
|
Operations and maintenance expense
|
24.6
|
|
|
0.9
|
|
|
9.2
|
|
|
—
|
|
|
34.7
|
|
General and administrative expense
|
—
|
|
|
—
|
|
|
—
|
|
|
20.9
|
|
|
20.9
|
|
Gain (loss) on long-lived assets, net
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
Gain on acquisition
|
209.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
209.4
|
|
Earnings (loss) from unconsolidated affiliates, net
|
(2.8
|
)
|
|
6.5
|
|
|
—
|
|
|
—
|
|
|
3.7
|
|
EBITDA
|
$
|
298.0
|
|
|
$
|
13.7
|
|
|
$
|
12.7
|
|
|
$
|
(20.7
|
)
|
|
$
|
303.7
|
|
Goodwill
|
$
|
127.7
|
|
|
$
|
—
|
|
|
$
|
92.7
|
|
|
$
|
—
|
|
|
$
|
220.4
|
|
Total assets
|
$
|
3,672.2
|
|
|
$
|
991.7
|
|
|
$
|
548.1
|
|
|
$
|
36.0
|
|
|
$
|
5,248.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2018
|
|
Gathering and Processing
|
|
Storage and Transportation
|
|
Marketing, Supply and Logistics
|
|
Corporate
|
|
Total
|
Revenues
|
$
|
255.5
|
|
|
$
|
5.1
|
|
|
$
|
579.9
|
|
|
$
|
—
|
|
|
$
|
840.5
|
|
Intersegment revenues
|
45.4
|
|
|
2.5
|
|
|
(47.9
|
)
|
|
—
|
|
|
—
|
|
Costs of product/services sold
|
208.8
|
|
|
0.1
|
|
|
516.5
|
|
|
—
|
|
|
725.4
|
|
Operations and maintenance expense
|
17.8
|
|
|
0.8
|
|
|
13.3
|
|
|
—
|
|
|
31.9
|
|
General and administrative expense
|
—
|
|
|
—
|
|
|
—
|
|
|
22.5
|
|
|
22.5
|
|
Loss on long-lived assets
|
—
|
|
|
—
|
|
|
(24.4
|
)
|
|
—
|
|
|
(24.4
|
)
|
Earnings from unconsolidated affiliates, net
|
4.5
|
|
|
7.5
|
|
|
—
|
|
|
—
|
|
|
12.0
|
|
EBITDA
|
$
|
78.8
|
|
|
$
|
14.2
|
|
|
$
|
(22.2
|
)
|
|
$
|
(22.5
|
)
|
|
$
|
48.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2019
|
|
Gathering and Processing
|
|
Storage and Transportation
|
|
Marketing, Supply and Logistics
|
|
Corporate
|
|
Total
|
Revenues
|
$
|
382.0
|
|
|
$
|
12.7
|
|
|
$
|
1,123.9
|
|
|
$
|
—
|
|
|
$
|
1,518.6
|
|
Intersegment revenues
|
78.2
|
|
|
6.8
|
|
|
(85.0
|
)
|
|
—
|
|
|
—
|
|
Costs of product/services sold
|
246.9
|
|
|
—
|
|
|
985.9
|
|
|
—
|
|
|
1,232.8
|
|
Operations and maintenance expense
|
42.7
|
|
|
1.9
|
|
|
18.7
|
|
|
—
|
|
|
63.3
|
|
General and administrative expense
|
—
|
|
|
—
|
|
|
—
|
|
|
56.9
|
|
|
56.9
|
|
Gain (loss) on long-lived assets, net
|
(2.0
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
0.2
|
|
|
(2.0
|
)
|
Gain on acquisition
|
209.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
209.4
|
|
Earnings (loss) from unconsolidated affiliates, net
|
(3.0
|
)
|
|
13.6
|
|
|
—
|
|
|
—
|
|
|
10.6
|
|
EBITDA
|
$
|
375.0
|
|
|
$
|
31.2
|
|
|
$
|
34.1
|
|
|
$
|
(56.7
|
)
|
|
$
|
383.6
|
|
Goodwill
|
$
|
127.7
|
|
|
$
|
—
|
|
|
$
|
92.7
|
|
|
$
|
—
|
|
|
$
|
220.4
|
|
Total assets
|
$
|
3,672.2
|
|
|
$
|
991.7
|
|
|
$
|
548.1
|
|
|
$
|
36.0
|
|
|
$
|
5,248.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2018
|
|
Gathering and Processing
|
|
Storage and Transportation
|
|
Marketing, Supply and Logistics
|
|
Corporate
|
|
Total
|
Revenues
|
$
|
595.8
|
|
|
$
|
9.3
|
|
|
$
|
1,350.4
|
|
|
$
|
—
|
|
|
$
|
1,955.5
|
|
Intersegment revenues
|
86.7
|
|
|
4.5
|
|
|
(91.2
|
)
|
|
—
|
|
|
—
|
|
Costs of product/services sold
|
496.5
|
|
|
0.2
|
|
|
1,194.5
|
|
|
—
|
|
|
1,691.2
|
|
Operations and maintenance expense
|
35.5
|
|
|
1.6
|
|
|
29.3
|
|
|
—
|
|
|
66.4
|
|
General and administrative expense
|
—
|
|
|
—
|
|
|
—
|
|
|
45.3
|
|
|
45.3
|
|
Gain (loss) on long-lived assets
|
0.1
|
|
|
—
|
|
|
(24.2
|
)
|
|
—
|
|
|
(24.1
|
)
|
Earnings from unconsolidated affiliates, net
|
10.2
|
|
|
14.2
|
|
|
—
|
|
|
—
|
|
|
24.4
|
|
EBITDA
|
$
|
160.8
|
|
|
$
|
26.2
|
|
|
$
|
11.2
|
|
|
$
|
(45.3
|
)
|
|
$
|
152.9
|
|
Note 14
- Revenues
Contract Assets and Contract Liabilities
Our contract assets and contract liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. Our receivables related to our
Topic 606
revenue contracts totaled
$179.6 million
and
$209.7 million
for both CEQP and CMLP at
June 30, 2019
and
December 31, 2018
, and are included in accounts receivable on our consolidated balance sheets. Our contract assets are included in other non-current assets on our consolidated balance sheets. Our contract liabilities primarily consist of current and non-current deferred revenues. On our consolidated balance sheets, our current deferred revenues are included in accrued expenses and other liabilities and our non-current deferred revenues are included in other long-term liabilities. The majority of revenues associated with our deferred revenues is expected to be recognized as the performance obligations under the related contracts are satisfied over the next
18 years
.
The following table provides a summary of the opening and closing balances of our contract assets and contract liabilities
(in millions)
:
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
Contract Assets (Non-current)
|
|
$
|
0.9
|
|
|
$
|
1.0
|
|
Contract Liabilities (Current)
(1)
|
|
$
|
12.6
|
|
|
$
|
12.0
|
|
Contract Liabilities (Non-current)
(1)
|
|
$
|
95.5
|
|
|
$
|
65.4
|
|
|
|
(1)
|
During the
three and six months ended
June 30, 2019
, we recognized revenues of approximately
$3.0 million
and
$5.8 million
that were previously included in contract liabilities (current) at
December 31, 2018
. The remaining change in our contract liabilities during the
three and six months ended
June 30, 2019
primarily related to approximately
$19.8 million
of deferred revenues recorded in the purchase price allocation for the Jackalope Acquisition described in more detail in Note 3, and the remainder relates primarily to capital reimbursements associated with our revenue contracts and revenue deferrals associated with our contracts with increasing (decreasing) rates.
|
The following table summarizes the transaction price allocated to our remaining performance obligations under certain contracts that have not been recognized as of
June 30, 2019
(in millions)
:
|
|
|
|
|
Remainder of 2019
|
$
|
50.7
|
|
2020
|
98.0
|
|
2021
|
86.1
|
|
2022
|
66.0
|
|
2023
|
7.3
|
|
Thereafter
|
3.3
|
|
Total
|
$
|
311.4
|
|
Our remaining performance obligations presented in the table above exclude estimates of variable rate escalation clauses in our contracts with customers, and is generally limited to fixed-fee and percentage-of-proceeds service contracts which have fixed pricing and minimum volume terms and conditions. Our remaining performance obligations generally exclude, based on the following practical expedients that we elected to apply, disclosures for (i) variable consideration allocated to a wholly-unsatisfied promise to transfer a distinct service that forms part of the identified single performance obligation; (ii) unsatisfied
performance obligations where the contract term is one year or less; and (iii) contracts for which we recognize revenues as amounts are invoiced.
Disaggregation of Revenues
The following tables summarize our revenues from contracts with customers disaggregated by type of product/service sold and by commodity type for each of our segments for the
three and six months ended
June 30, 2019
and
2018
(
in millions
). We believe this summary best depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by economic factors.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2019
|
|
Gathering and Processing
|
|
Storage and Transportation
|
|
Marketing, Supply and Logistics
|
|
Intersegment Elimination
|
|
Total
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Topic 606 revenues
|
|
|
|
|
|
|
|
|
|
Gathering
|
|
|
|
|
|
|
|
|
|
Natural gas
|
$
|
42.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
42.9
|
|
Crude oil
|
15.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15.1
|
|
Water
|
19.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19.0
|
|
Processing
|
|
|
|
|
|
|
|
|
|
Natural gas
|
8.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.1
|
|
Compression
|
|
|
|
|
|
|
|
|
|
Natural gas
|
6.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.2
|
|
Storage
|
|
|
|
|
|
|
|
|
|
Crude oil
|
0.5
|
|
|
1.5
|
|
|
—
|
|
|
(0.5
|
)
|
|
1.5
|
|
NGLs
|
—
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|
1.3
|
|
Pipeline
|
|
|
|
|
|
|
|
|
|
Crude oil
|
—
|
|
|
1.5
|
|
|
—
|
|
|
(0.5
|
)
|
|
1.0
|
|
Transportation
|
|
|
|
|
|
|
|
|
|
Crude oil
|
1.8
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|
3.3
|
|
NGLs
|
—
|
|
|
—
|
|
|
2.1
|
|
|
—
|
|
|
2.1
|
|
Rail Loading
|
|
|
|
|
|
|
|
|
|
Crude oil
|
—
|
|
|
3.9
|
|
|
—
|
|
|
(1.4
|
)
|
|
2.5
|
|
Product Sales
|
|
|
|
|
|
|
|
|
|
Natural gas
|
10.9
|
|
|
—
|
|
|
7.9
|
|
|
(4.8
|
)
|
|
14.0
|
|
Crude oil
|
110.2
|
|
|
—
|
|
|
291.4
|
|
|
(16.0
|
)
|
|
385.6
|
|
NGLs
|
10.4
|
|
|
—
|
|
|
133.9
|
|
|
(4.5
|
)
|
|
139.8
|
|
Other
|
—
|
|
|
1.2
|
|
|
0.3
|
|
|
(0.9
|
)
|
|
0.6
|
|
Total Topic 606 revenues
|
225.1
|
|
|
8.1
|
|
|
438.4
|
|
|
(28.6
|
)
|
|
643.0
|
|
Non-Topic 606 revenues
(1)
|
—
|
|
|
—
|
|
|
40.4
|
|
|
—
|
|
|
40.4
|
|
Total revenues
|
$
|
225.1
|
|
|
$
|
8.1
|
|
|
$
|
478.8
|
|
|
$
|
(28.6
|
)
|
|
$
|
683.4
|
|
|
|
(1)
|
Represents revenues primarily related to our commodity-based derivatives. See
Note 6
for additional information related to our price risk management activities.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2018
|
|
Gathering and Processing
|
|
Storage and Transportation
|
|
Marketing, Supply and Logistics
|
|
Intersegment Elimination
|
|
Total
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Topic 606 revenues
|
|
|
|
|
|
|
|
|
|
Gathering
|
|
|
|
|
|
|
|
|
|
Natural gas
|
$
|
33.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33.9
|
|
Crude oil
|
9.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.4
|
|
Water
|
13.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13.7
|
|
Processing
|
|
|
|
|
|
|
|
|
|
Natural gas
|
2.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.7
|
|
NGLs
|
—
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
|
2.4
|
|
Compression
|
|
|
|
|
|
|
|
|
|
Natural gas
|
7.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.9
|
|
Storage
|
|
|
|
|
|
|
|
|
|
Crude oil
|
0.4
|
|
|
1.2
|
|
|
—
|
|
|
(0.3
|
)
|
|
1.3
|
|
NGLs
|
—
|
|
|
—
|
|
|
2.3
|
|
|
—
|
|
|
2.3
|
|
Pipeline
|
|
|
|
|
|
|
|
|
|
Crude oil
|
—
|
|
|
1.4
|
|
|
—
|
|
|
(0.5
|
)
|
|
0.9
|
|
Transportation
|
|
|
|
|
|
|
|
|
|
Crude oil
|
0.6
|
|
|
—
|
|
|
1.7
|
|
|
—
|
|
|
2.3
|
|
NGLs
|
—
|
|
|
—
|
|
|
9.7
|
|
|
—
|
|
|
9.7
|
|
Rail Loading
|
|
|
|
|
|
|
|
|
|
Crude oil
|
—
|
|
|
4.7
|
|
|
—
|
|
|
(1.5
|
)
|
|
3.2
|
|
NGLs
|
—
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
|
1.1
|
|
Product Sales
|
|
|
|
|
|
|
|
|
|
Natural gas
|
11.9
|
|
|
—
|
|
|
8.9
|
|
|
(2.8
|
)
|
|
18.0
|
|
Crude oil
|
197.7
|
|
|
—
|
|
|
266.0
|
|
|
(37.0
|
)
|
|
426.7
|
|
NGLs
|
22.7
|
|
|
—
|
|
|
254.8
|
|
|
(5.6
|
)
|
|
271.9
|
|
Other
|
—
|
|
|
0.3
|
|
|
—
|
|
|
(0.2
|
)
|
|
0.1
|
|
Total Topic 606 revenues
|
300.9
|
|
|
7.6
|
|
|
546.9
|
|
|
(47.9
|
)
|
|
807.5
|
|
Non-Topic 606 revenues
(1)
|
—
|
|
|
—
|
|
|
33.0
|
|
|
—
|
|
|
33.0
|
|
Total revenues
|
$
|
300.9
|
|
|
$
|
7.6
|
|
|
$
|
579.9
|
|
|
$
|
(47.9
|
)
|
|
$
|
840.5
|
|
|
|
(1)
|
Represents revenues primarily related to our commodity-based derivatives. See
Note 6
for additional information related to our price risk management activities.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2019
|
|
Gathering and Processing
|
|
Storage and Transportation
|
|
Marketing, Supply and Logistics
|
|
Intersegment Elimination
|
|
Total
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Topic 606 revenues
|
|
|
|
|
|
|
|
|
|
Gathering
|
|
|
|
|
|
|
|
|
|
Natural gas
|
$
|
73.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
73.1
|
|
Crude oil
|
30.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30.4
|
|
Water
|
35.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35.8
|
|
Processing
|
|
|
|
|
|
|
|
|
|
Natural gas
|
10.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.6
|
|
Compression
|
|
|
|
|
|
|
|
|
|
Natural gas
|
12.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12.2
|
|
Storage
|
|
|
|
|
|
|
|
|
|
Crude oil
|
1.0
|
|
|
2.9
|
|
|
—
|
|
|
(1.2
|
)
|
|
2.7
|
|
NGLs
|
—
|
|
|
—
|
|
|
2.6
|
|
|
—
|
|
|
2.6
|
|
Pipeline
|
|
|
|
|
|
|
|
|
|
Crude oil
|
—
|
|
|
3.2
|
|
|
—
|
|
|
(1.2
|
)
|
|
2.0
|
|
Transportation
|
|
|
|
|
|
|
|
|
|
Crude oil
|
3.3
|
|
|
—
|
|
|
3.0
|
|
|
—
|
|
|
6.3
|
|
NGLs
|
—
|
|
|
—
|
|
|
6.2
|
|
|
—
|
|
|
6.2
|
|
Rail Loading
|
|
|
|
|
|
|
|
|
|
Crude oil
|
—
|
|
|
11.1
|
|
|
—
|
|
|
(2.8
|
)
|
|
8.3
|
|
Product Sales
|
|
|
|
|
|
|
|
|
|
Natural gas
|
29.7
|
|
|
—
|
|
|
30.2
|
|
|
(11.4
|
)
|
|
48.5
|
|
Crude oil
|
241.8
|
|
|
—
|
|
|
581.5
|
|
|
(59.3
|
)
|
|
764.0
|
|
NGLs
|
22.3
|
|
|
—
|
|
|
355.4
|
|
|
(7.3
|
)
|
|
370.4
|
|
Other
|
—
|
|
|
2.3
|
|
|
0.3
|
|
|
(1.8
|
)
|
|
0.8
|
|
Total Topic 606 revenues
|
460.2
|
|
|
19.5
|
|
|
979.2
|
|
|
(85.0
|
)
|
|
1,373.9
|
|
Non-Topic 606 revenues
(1)
|
—
|
|
|
—
|
|
|
144.7
|
|
|
—
|
|
|
144.7
|
|
Total revenues
|
$
|
460.2
|
|
|
$
|
19.5
|
|
|
$
|
1,123.9
|
|
|
$
|
(85.0
|
)
|
|
$
|
1,518.6
|
|
|
|
(1)
|
Represents revenues primarily related to our commodity-based derivatives. See
Note 6
for additional information related to our price risk management activities.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2018
|
|
Gathering and Processing
|
|
Storage and Transportation
|
|
Marketing, Supply and Logistics
|
|
Intersegment Elimination
|
|
Total
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Topic 606 revenues
|
|
|
|
|
|
|
|
|
|
Gathering
|
|
|
|
|
|
|
|
|
|
Natural gas
|
$
|
69.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
69.3
|
|
Crude oil
|
18.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18.6
|
|
Water
|
25.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25.8
|
|
Processing
|
|
|
|
|
|
|
|
|
|
Natural gas
|
5.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.4
|
|
NGLs
|
—
|
|
|
—
|
|
|
4.1
|
|
|
—
|
|
|
4.1
|
|
Compression
|
|
|
|
|
|
|
|
|
|
Natural gas
|
15.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15.5
|
|
Storage
|
|
|
|
|
|
|
|
|
|
Crude oil
|
0.9
|
|
|
1.8
|
|
|
—
|
|
|
(0.5
|
)
|
|
2.2
|
|
NGLs
|
—
|
|
|
—
|
|
|
5.5
|
|
|
—
|
|
|
5.5
|
|
Pipeline
|
|
|
|
|
|
|
|
|
|
Crude oil
|
—
|
|
|
2.6
|
|
|
—
|
|
|
(1.0
|
)
|
|
1.6
|
|
Transportation
|
|
|
|
|
|
|
|
|
|
Crude oil
|
1.2
|
|
|
—
|
|
|
2.9
|
|
|
—
|
|
|
4.1
|
|
NGLs
|
—
|
|
|
—
|
|
|
19.4
|
|
|
—
|
|
|
19.4
|
|
Water
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
Rail Loading
|
|
|
|
|
|
|
|
|
|
Crude oil
|
—
|
|
|
8.7
|
|
|
—
|
|
|
(2.5
|
)
|
|
6.2
|
|
NGLs
|
—
|
|
|
—
|
|
|
2.2
|
|
|
—
|
|
|
2.2
|
|
Product Sales
|
|
|
|
|
|
|
|
|
|
Natural gas
|
25.3
|
|
|
—
|
|
|
16.7
|
|
|
(6.7
|
)
|
|
35.3
|
|
Crude oil
|
477.6
|
|
|
—
|
|
|
456.6
|
|
|
(69.3
|
)
|
|
864.9
|
|
NGLs
|
42.9
|
|
|
—
|
|
|
712.0
|
|
|
(10.7
|
)
|
|
744.2
|
|
Other
|
—
|
|
|
0.7
|
|
|
—
|
|
|
(0.5
|
)
|
|
0.2
|
|
Total Topic 606 revenues
|
682.5
|
|
|
13.8
|
|
|
1,219.6
|
|
|
(91.2
|
)
|
|
1,824.7
|
|
Non-Topic 606 revenues
(1)
|
—
|
|
|
—
|
|
|
130.8
|
|
|
—
|
|
|
130.8
|
|
Total revenues
|
$
|
682.5
|
|
|
$
|
13.8
|
|
|
$
|
1,350.4
|
|
|
$
|
(91.2
|
)
|
|
$
|
1,955.5
|
|
|
|
(1)
|
Represents revenues related to our commodity-based derivatives. See
Note 6
for additional information related to our price risk management activities.
|
Note 15
– Condensed Consolidating Financial Information
Crestwood Midstream is a holding company (Parent) and owns no operating assets and has no significant operations independent of its subsidiaries. Obligations under Crestwood Midstream’s senior notes and its credit facility are jointly and severally guaranteed by substantially all of its subsidiaries, except for Crestwood Infrastructure, Crestwood Niobrara, Crestwood Pipeline and Storage Northeast LLC, PRBIC and Tres Holdings and their respective subsidiaries (collectively, Non-Guarantor Subsidiaries). Crestwood Midstream Finance Corp., the co-issuer of the senior notes, is Crestwood Midstream’s 100% owned subsidiary and has no material assets, operations, revenues or cash flows other than those related to its service as co-issuer of the Crestwood Midstream senior notes.
The tables below present condensed consolidating financial statements for Crestwood Midstream as Parent on a stand-alone, unconsolidated basis, and Crestwood Midstream’s combined guarantor and combined non-guarantor subsidiaries as of
June 30, 2019
and
December 31, 2018
, and for the
three and six months ended
June 30, 2019
and
2018
. The financial information may not necessarily be indicative of the results of operations, cash flows or financial position had the subsidiaries operated as independent entities.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crestwood Midstream Partners LP
|
Condensed Consolidating Balance Sheet
|
June 30, 2019
|
(in millions)
|
(unaudited)
|
|
Parent
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
Assets
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
Cash
|
$
|
1.4
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
1.5
|
|
Accounts receivable
|
—
|
|
|
173.2
|
|
|
21.8
|
|
|
—
|
|
|
195.0
|
|
Inventory
|
—
|
|
|
33.2
|
|
|
—
|
|
|
—
|
|
|
33.2
|
|
Other current assets
|
—
|
|
|
35.7
|
|
|
0.5
|
|
|
—
|
|
|
36.2
|
|
Total current assets
|
1.4
|
|
|
242.1
|
|
|
22.4
|
|
|
—
|
|
|
265.9
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
—
|
|
|
2,269.7
|
|
|
619.9
|
|
|
—
|
|
|
2,889.6
|
|
Goodwill and intangible assets, net
|
—
|
|
|
671.5
|
|
|
387.5
|
|
|
—
|
|
|
1,059.0
|
|
Operating lease right-of-use assets, net
|
—
|
|
|
56.6
|
|
|
2.9
|
|
|
—
|
|
|
59.5
|
|
Investment in consolidated affiliates
|
4,305.4
|
|
|
—
|
|
|
—
|
|
|
(4,305.4
|
)
|
|
—
|
|
Investment in unconsolidated affiliates
|
—
|
|
|
—
|
|
|
971.9
|
|
|
—
|
|
|
971.9
|
|
Other non-current assets
|
—
|
|
|
2.1
|
|
|
—
|
|
|
—
|
|
|
2.1
|
|
Total assets
|
$
|
4,306.8
|
|
|
$
|
3,242.0
|
|
|
$
|
2,004.6
|
|
|
$
|
(4,305.4
|
)
|
|
$
|
5,248.0
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and capital
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
$
|
—
|
|
|
$
|
133.5
|
|
|
$
|
25.5
|
|
|
$
|
—
|
|
|
$
|
159.0
|
|
Other current liabilities
|
27.4
|
|
|
97.9
|
|
|
9.0
|
|
|
—
|
|
|
134.3
|
|
Total current liabilities
|
27.4
|
|
|
231.4
|
|
|
34.5
|
|
|
—
|
|
|
293.3
|
|
|
|
|
|
|
|
|
|
|
|
Long-term liabilities:
|
|
|
|
|
|
|
|
|
|
Long-term debt, less current portion
|
2,131.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,131.2
|
|
Other long-term liabilities
|
—
|
|
|
162.9
|
|
|
87.2
|
|
|
—
|
|
|
250.1
|
|
Deferred income taxes
|
—
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
Total liabilities
|
2,158.6
|
|
|
395.1
|
|
|
121.7
|
|
|
—
|
|
|
2,675.4
|
|
|
|
|
|
|
|
|
|
|
|
Interest of non-controlling partner in subsidiary
|
—
|
|
|
—
|
|
|
424.4
|
|
|
—
|
|
|
424.4
|
|
Partners’ capital
|
2,148.2
|
|
|
2,846.9
|
|
|
1,458.5
|
|
|
(4,305.4
|
)
|
|
2,148.2
|
|
Total liabilities and capital
|
$
|
4,306.8
|
|
|
$
|
3,242.0
|
|
|
$
|
2,004.6
|
|
|
$
|
(4,305.4
|
)
|
|
$
|
5,248.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crestwood Midstream Partners LP
|
Condensed Consolidating Balance Sheet
|
December 31, 2018
|
(in millions)
|
|
Parent
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
Assets
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
Cash
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
Restricted cash
|
16.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16.3
|
|
Accounts receivable
|
—
|
|
|
246.3
|
|
|
19.9
|
|
|
(16.3
|
)
|
|
249.9
|
|
Inventory
|
—
|
|
|
64.6
|
|
|
—
|
|
|
—
|
|
|
64.6
|
|
Other current assets
|
—
|
|
|
46.0
|
|
|
—
|
|
|
—
|
|
|
46.0
|
|
Total current assets
|
16.5
|
|
|
356.9
|
|
|
19.9
|
|
|
(16.3
|
)
|
|
377.0
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
—
|
|
|
2,202.3
|
|
|
—
|
|
|
—
|
|
|
2,202.3
|
|
Goodwill and intangible assets, net
|
—
|
|
|
692.4
|
|
|
—
|
|
|
—
|
|
|
692.4
|
|
Investment in consolidated affiliates
|
3,800.4
|
|
|
—
|
|
|
—
|
|
|
(3,800.4
|
)
|
|
—
|
|
Investment in unconsolidated affiliates
|
—
|
|
|
—
|
|
|
1,188.2
|
|
|
—
|
|
|
1,188.2
|
|
Other non-current assets
|
—
|
|
|
2.1
|
|
|
—
|
|
|
—
|
|
|
2.1
|
|
Total assets
|
$
|
3,816.9
|
|
|
$
|
3,253.7
|
|
|
$
|
1,208.1
|
|
|
$
|
(3,816.7
|
)
|
|
$
|
4,462.0
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and capital
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
$
|
16.3
|
|
|
$
|
210.5
|
|
|
$
|
—
|
|
|
$
|
(16.3
|
)
|
|
$
|
210.5
|
|
Other current liabilities
|
20.0
|
|
|
81.8
|
|
|
16.2
|
|
|
—
|
|
|
118.0
|
|
Total current liabilities
|
36.3
|
|
|
292.3
|
|
|
16.2
|
|
|
(16.3
|
)
|
|
328.5
|
|
|
|
|
|
|
|
|
|
|
|
Long-term liabilities:
|
|
|
|
|
|
|
|
|
|
Long-term debt, less current portion
|
1,752.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,752.4
|
|
Other long-term liabilities
|
—
|
|
|
114.0
|
|
|
57.0
|
|
|
—
|
|
|
171.0
|
|
Deferred income taxes
|
—
|
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
Total liabilities
|
1,788.7
|
|
|
406.9
|
|
|
73.2
|
|
|
(16.3
|
)
|
|
2,252.5
|
|
|
|
|
|
|
|
|
|
|
|
Interest of non-controlling partner in subsidiary
|
—
|
|
|
—
|
|
|
181.3
|
|
|
—
|
|
|
181.3
|
|
Partners’ capital
|
2,028.2
|
|
|
2,846.8
|
|
|
953.6
|
|
|
(3,800.4
|
)
|
|
2,028.2
|
|
Total partners’ capital
|
2,028.2
|
|
|
2,846.8
|
|
|
1,134.9
|
|
|
(3,800.4
|
)
|
|
2,209.5
|
|
Total liabilities and capital
|
$
|
3,816.9
|
|
|
$
|
3,253.7
|
|
|
$
|
1,208.1
|
|
|
$
|
(3,816.7
|
)
|
|
$
|
4,462.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crestwood Midstream Partners LP
|
Condensed Consolidating Statement of Operations
|
Three Months Ended June 30, 2019
|
(in millions)
|
(unaudited)
|
|
Parent
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
Revenues
|
$
|
—
|
|
|
$
|
663.2
|
|
|
$
|
20.2
|
|
|
$
|
—
|
|
|
$
|
683.4
|
|
Costs of product/services sold
|
—
|
|
|
537.2
|
|
|
—
|
|
|
—
|
|
|
537.2
|
|
Operating expenses and other:
|
|
|
|
|
|
|
|
|
|
Operations and maintenance
|
—
|
|
|
27.5
|
|
|
7.2
|
|
|
—
|
|
|
34.7
|
|
General and administrative
|
9.7
|
|
|
11.2
|
|
|
—
|
|
|
—
|
|
|
20.9
|
|
Depreciation, amortization and accretion
|
—
|
|
|
43.0
|
|
|
9.7
|
|
|
—
|
|
|
52.7
|
|
Gain on acquisition
|
—
|
|
|
—
|
|
|
(209.4
|
)
|
|
—
|
|
|
(209.4
|
)
|
|
9.7
|
|
|
81.7
|
|
|
(192.5
|
)
|
|
—
|
|
|
(101.1
|
)
|
Operating income (loss)
|
(9.7
|
)
|
|
44.3
|
|
|
212.7
|
|
|
—
|
|
|
247.3
|
|
Earnings from unconsolidated affiliates, net
|
—
|
|
|
—
|
|
|
3.7
|
|
|
—
|
|
|
3.7
|
|
Interest and debt expense, net
|
(28.0
|
)
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
(27.8
|
)
|
Equity in net income (loss) of subsidiaries
|
250.0
|
|
|
—
|
|
|
—
|
|
|
(250.0
|
)
|
|
—
|
|
Income (loss) before income taxes
|
212.3
|
|
|
44.5
|
|
|
216.4
|
|
|
(250.0
|
)
|
|
223.2
|
|
Provision for income taxes
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
Net income (loss)
|
212.3
|
|
|
44.2
|
|
|
216.4
|
|
|
(250.0
|
)
|
|
222.9
|
|
Net income attributable to non-controlling partner in subsidiary
|
—
|
|
|
—
|
|
|
10.6
|
|
|
—
|
|
|
10.6
|
|
Net income (loss) attributable to Crestwood Midstream Partners LP
|
$
|
212.3
|
|
|
$
|
44.2
|
|
|
$
|
205.8
|
|
|
$
|
(250.0
|
)
|
|
$
|
212.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crestwood Midstream Partners LP
|
Condensed Consolidating Statement of Operations
|
Three Months Ended June 30, 2018
|
(in millions)
|
(unaudited)
|
|
Parent
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
Revenues
|
$
|
—
|
|
|
$
|
840.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
840.5
|
|
Costs of product/services sold
|
—
|
|
|
725.4
|
|
|
—
|
|
|
—
|
|
|
725.4
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Operations and maintenance
|
—
|
|
|
31.9
|
|
|
—
|
|
|
—
|
|
|
31.9
|
|
General and administrative
|
12.1
|
|
|
10.4
|
|
|
—
|
|
|
—
|
|
|
22.5
|
|
Depreciation, amortization and accretion
|
—
|
|
|
47.4
|
|
|
—
|
|
|
—
|
|
|
47.4
|
|
Loss on long-lived assets, net
|
—
|
|
|
24.4
|
|
|
—
|
|
|
—
|
|
|
24.4
|
|
|
12.1
|
|
|
114.1
|
|
|
—
|
|
|
—
|
|
|
126.2
|
|
Operating income (loss)
|
(12.1
|
)
|
|
1.0
|
|
|
—
|
|
|
—
|
|
|
(11.1
|
)
|
Earnings from unconsolidated affiliates, net
|
—
|
|
|
—
|
|
|
12.0
|
|
|
—
|
|
|
12.0
|
|
Interest and debt expense, net
|
(24.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24.3
|
)
|
Equity in net income (loss) of subsidiaries
|
8.9
|
|
|
—
|
|
|
—
|
|
|
(8.9
|
)
|
|
—
|
|
Income (loss) before income taxes
|
(27.5
|
)
|
|
1.0
|
|
|
12.0
|
|
|
(8.9
|
)
|
|
(23.4
|
)
|
Provision for income taxes
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
Net income (loss)
|
(27.5
|
)
|
|
0.9
|
|
|
12.0
|
|
|
(8.9
|
)
|
|
(23.5
|
)
|
Net income attributable to non-controlling partner in subsidiary
|
—
|
|
|
—
|
|
|
4.0
|
|
|
—
|
|
|
4.0
|
|
Net income (loss) attributable to Crestwood Midstream Partners LP
|
$
|
(27.5
|
)
|
|
$
|
0.9
|
|
|
$
|
8.0
|
|
|
$
|
(8.9
|
)
|
|
$
|
(27.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crestwood Midstream Partners LP
|
Condensed Consolidating Statement of Operations
|
Six Months Ended June 30, 2019
|
(in millions)
|
(unaudited)
|
|
Parent
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
Revenues
|
$
|
—
|
|
|
$
|
1,498.4
|
|
|
$
|
20.2
|
|
|
$
|
—
|
|
|
$
|
1,518.6
|
|
Costs of product/services sold
|
—
|
|
|
1,232.8
|
|
|
—
|
|
|
—
|
|
|
1,232.8
|
|
Operating expenses and other:
|
|
|
|
|
|
|
|
|
|
Operations and maintenance
|
—
|
|
|
56.1
|
|
|
7.2
|
|
|
—
|
|
|
63.3
|
|
General and administrative
|
28.4
|
|
|
28.5
|
|
|
—
|
|
|
—
|
|
|
56.9
|
|
Depreciation, amortization and accretion
|
—
|
|
|
86.4
|
|
|
9.7
|
|
|
—
|
|
|
96.1
|
|
Loss on long-lived assets, net
|
—
|
|
|
2.0
|
|
|
—
|
|
|
—
|
|
|
2.0
|
|
Gain on acquisition
|
—
|
|
|
—
|
|
|
(209.4
|
)
|
|
—
|
|
|
(209.4
|
)
|
|
28.4
|
|
|
173.0
|
|
|
(192.5
|
)
|
|
—
|
|
|
8.9
|
|
Operating income (loss)
|
(28.4
|
)
|
|
92.6
|
|
|
212.7
|
|
|
—
|
|
|
276.9
|
|
Earnings from unconsolidated affiliates, net
|
—
|
|
|
—
|
|
|
10.6
|
|
|
—
|
|
|
10.6
|
|
Interest and debt expense, net
|
(52.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(52.7
|
)
|
Equity in net income (loss) of subsidiaries
|
301.0
|
|
|
—
|
|
|
—
|
|
|
(301.0
|
)
|
|
—
|
|
Income (loss) before income taxes
|
219.9
|
|
|
92.6
|
|
|
223.3
|
|
|
(301.0
|
)
|
|
234.8
|
|
Provision for income taxes
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
Net income (loss)
|
219.9
|
|
|
92.3
|
|
|
223.3
|
|
|
(301.0
|
)
|
|
234.5
|
|
Net income attributable to non-controlling partner in subsidiary
|
—
|
|
|
—
|
|
|
14.6
|
|
|
—
|
|
|
14.6
|
|
Net income (loss) attributable to Crestwood Midstream Partners LP
|
$
|
219.9
|
|
|
$
|
92.3
|
|
|
$
|
208.7
|
|
|
$
|
(301.0
|
)
|
|
$
|
219.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crestwood Midstream Partners LP
|
Condensed Consolidating Statement of Operations
|
Six Months Ended June 30, 2018
|
(in millions)
|
(unaudited)
|
|
Parent
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
Revenues
|
$
|
—
|
|
|
$
|
1,955.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,955.5
|
|
Costs of product/services sold
|
—
|
|
|
1,691.2
|
|
|
—
|
|
|
—
|
|
|
1,691.2
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Operations and maintenance
|
—
|
|
|
66.4
|
|
|
—
|
|
|
—
|
|
|
66.4
|
|
General and administrative
|
27.7
|
|
|
17.6
|
|
|
—
|
|
|
—
|
|
|
45.3
|
|
Depreciation, amortization and accretion
|
—
|
|
|
95.2
|
|
|
—
|
|
|
—
|
|
|
95.2
|
|
Loss on long-lived assets, net
|
—
|
|
|
24.1
|
|
|
—
|
|
|
—
|
|
|
24.1
|
|
|
27.7
|
|
|
203.3
|
|
|
—
|
|
|
—
|
|
|
231.0
|
|
Operating income (loss)
|
(27.7
|
)
|
|
61.0
|
|
|
—
|
|
|
—
|
|
|
33.3
|
|
Earnings from unconsolidated affiliates, net
|
—
|
|
|
—
|
|
|
24.4
|
|
|
—
|
|
|
24.4
|
|
Interest and debt expense, net
|
(48.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(48.7
|
)
|
Equity in net income (loss) of subsidiaries
|
77.3
|
|
|
—
|
|
|
—
|
|
|
(77.3
|
)
|
|
—
|
|
Income (loss) before income taxes
|
0.9
|
|
|
61.0
|
|
|
24.4
|
|
|
(77.3
|
)
|
|
9.0
|
|
Provision for income taxes
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
Net income (loss)
|
0.9
|
|
|
60.9
|
|
|
24.4
|
|
|
(77.3
|
)
|
|
8.9
|
|
Net income attributable to non-controlling partner in subsidiary
|
—
|
|
|
—
|
|
|
8.0
|
|
|
—
|
|
|
8.0
|
|
Net income (loss) attributable to Crestwood Midstream Partners LP
|
$
|
0.9
|
|
|
$
|
60.9
|
|
|
$
|
16.4
|
|
|
$
|
(77.3
|
)
|
|
$
|
0.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crestwood Midstream Partners LP
|
Condensed Consolidating Statement of Cash Flows
|
Six Months Ended June 30, 2019
|
(in millions)
|
(unaudited)
|
|
Parent
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
Cash flows from operating activities
|
$
|
(87.1
|
)
|
|
$
|
309.5
|
|
|
$
|
(27.3
|
)
|
|
$
|
—
|
|
|
$
|
195.1
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Acquisition, net of cash acquired
|
—
|
|
|
—
|
|
|
(462.1
|
)
|
|
—
|
|
|
(462.1
|
)
|
Purchases of property, plant and equipment
|
—
|
|
|
(127.7
|
)
|
|
(77.0
|
)
|
|
—
|
|
|
(204.7
|
)
|
Investment in unconsolidated affiliates
|
—
|
|
|
—
|
|
|
(40.9
|
)
|
|
—
|
|
|
(40.9
|
)
|
Capital distributions from unconsolidated affiliates
|
—
|
|
|
—
|
|
|
24.2
|
|
|
—
|
|
|
24.2
|
|
Capital contributions to consolidated affiliates
|
(217.1
|
)
|
|
—
|
|
|
—
|
|
|
217.1
|
|
|
—
|
|
Other
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
Net cash provided by (used in) investing activities
|
(217.1
|
)
|
|
(128.2
|
)
|
|
(555.8
|
)
|
|
217.1
|
|
|
(684.0
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from the issuance of long-term debt
|
1,544.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,544.0
|
|
Payments on long-term debt
|
(1,159.1
|
)
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
(1,159.5
|
)
|
Payments on finance leases
|
—
|
|
|
(1.9
|
)
|
|
—
|
|
|
—
|
|
|
(1.9
|
)
|
Payments for debt-related deferred costs
|
(9.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9.0
|
)
|
Net proceeds from the issuance of
non-controlling interest
|
—
|
|
|
—
|
|
|
235.0
|
|
|
—
|
|
|
235.0
|
|
Distributions to partners
|
(117.5
|
)
|
|
—
|
|
|
(6.6
|
)
|
|
—
|
|
|
(124.1
|
)
|
Contributions from parent
|
—
|
|
|
—
|
|
|
217.1
|
|
|
(217.1
|
)
|
|
—
|
|
Taxes paid for unit-based compensation vesting
|
—
|
|
|
(10.6
|
)
|
|
—
|
|
|
—
|
|
|
(10.6
|
)
|
Change in intercompany balances
|
30.7
|
|
|
(168.4
|
)
|
|
137.7
|
|
|
—
|
|
|
—
|
|
Net cash provided by (used in) financing activities
|
289.1
|
|
|
(181.3
|
)
|
|
583.2
|
|
|
(217.1
|
)
|
|
473.9
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and restricted cash
|
(15.1
|
)
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
(15.0
|
)
|
Cash and restricted cash at beginning of period
|
16.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16.5
|
|
Cash and restricted cash at end of period
|
$
|
1.4
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
1.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crestwood Midstream Partners LP
|
Condensed Consolidating Statement of Cash Flows
|
Six Months Ended June 30, 2018
|
(in millions)
|
(unaudited)
|
|
Parent
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
Cash flows from operating activities:
|
$
|
(72.6
|
)
|
|
$
|
212.9
|
|
|
$
|
24.1
|
|
|
$
|
—
|
|
|
$
|
164.4
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
(2.4
|
)
|
|
(116.3
|
)
|
|
—
|
|
|
—
|
|
|
(118.7
|
)
|
Investment in unconsolidated affiliates
|
—
|
|
|
—
|
|
|
(6.9
|
)
|
|
—
|
|
|
(6.9
|
)
|
Capital distributions from unconsolidated affiliates
|
—
|
|
|
—
|
|
|
23.9
|
|
|
—
|
|
|
23.9
|
|
Net proceeds from sale of assets
|
—
|
|
|
6.8
|
|
|
—
|
|
|
—
|
|
|
6.8
|
|
Capital distributions from consolidated affiliates
|
37.8
|
|
|
—
|
|
|
—
|
|
|
(37.8
|
)
|
|
—
|
|
Net cash provided by (used in) investing activities
|
35.4
|
|
|
(109.5
|
)
|
|
17.0
|
|
|
(37.8
|
)
|
|
(94.9
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from the issuance of long-term debt
|
847.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
847.1
|
|
Payments on long-term debt
|
(780.3
|
)
|
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|
(781.0
|
)
|
Payments on capital leases
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
Distributions to partners
|
(120.0
|
)
|
|
—
|
|
|
(3.3
|
)
|
|
—
|
|
|
(123.3
|
)
|
Distributions to parent
|
—
|
|
|
—
|
|
|
(37.8
|
)
|
|
37.8
|
|
|
—
|
|
Taxes paid for unit-based compensation vesting
|
—
|
|
|
(6.9
|
)
|
|
—
|
|
|
—
|
|
|
(6.9
|
)
|
Change in intercompany balances
|
95.1
|
|
|
(95.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
Net cash provided by (used in) financing activities
|
41.9
|
|
|
(103.4
|
)
|
|
(41.1
|
)
|
|
37.8
|
|
|
(64.8
|
)
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and restricted cash
|
4.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.7
|
|
Cash and restricted cash at beginning of period
|
1.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
Cash and restricted cash at end of period
|
$
|
5.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5.7
|
|