Inergy Reports Second Quarter Results

  Inergy Reports Second Quarter Results

            Management to Host Conference Call Today at 10 a.m. CT

Business Wire

KANSAS CITY, Mo. -- May 7, 2013

Inergy, L.P. (NYSE:NRGY) (“Inergy”) today reported results of operations for
the quarter ended March 31, 2013, the second quarter of fiscal 2013.

Inergy reported Adjusted EBITDA of $61.2 million for the quarter ended March
31, 2013, compared to $122.0 million in the quarter ended March 31, 2012. The
reported Adjusted EBITDA in the quarter ended March 31, 2012, includes our
retail propane operations which were contributed to Suburban Propane Partners,
L.P. (“SPH”) on August 1, 2012. Excluding the retail propane operations from
Adjusted EBITDA in the prior-year quarter, Inergy’s Adjusted EBITDA of $61.2
million increased $18.0 million, or 42%, from approximately $43.2 million for
the quarter ended March 31, 2012.

Net income (loss) was $(5.3) million for the quarter ended March 31, 2013, and
$44.0 million in the same quarter of last year. Distributable cash flow was
$36.6 million for the quarter ended March 31, 2013, compared to $91.3 million
reported in the same quarter of the prior year. Both measures of net income
and distributable cash flow for the prior-year period include results from the
retail propane operations contributed to SPH.

Inergy reported Adjusted EBITDA of $118.6 million for the six months ended
March 31, 2013, compared to $224.7 million in the six months ended March 31,
2012. The reported Adjusted EBITDA in the six months ended March 31, 2012,
includes our retail propane operations as discussed above. Excluding the
retail propane operations from Adjusted EBITDA in the prior-year period,
Inergy’s Adjusted EBITDA of $118.6 million increased $27.7 million, or 30%,
from approximately $90.9 million for the six months ended March 31, 2012.

Net income (loss) was $(2.5) million for the six months ended March 31, 2013,
and $40.4 million in the same period of last year. Distributable cash flow was
$75.5 million for the six months ended March 31, 2013, compared to $162.9
million reported in the same period of the prior year. Both measures of net
income and distributable cash flow for the prior-year period include results
from the retail propane operations contributed to SPH.

A table reconciling Adjusted EBITDA to net income (loss) as reported for the
quarter and six months ended March 31, 2013, appears below.

“Our second quarter results were broadly in line with our expectations. We
continue to deliver predictable and growing earnings in our Northeast
midstream businesses and in our NGL and crude oil supply and logistics
operations,” said John Sherman, President and CEO of Inergy. “Our diverse
portfolio of assets combined with our strong balance sheet position the
partnership well for continued growth.”

Recent Events

As previously announced, the Board of Directors of Inergy’s general partner
declared Inergy’s quarterly cash distribution of $0.29 per limited partner
unit ($1.16 annually) for the quarter ended March 31, 2013. The distribution
will be paid on May 15, 2013.

Also as previously announced, Crestwood Midstream Partners LP (NYSE: CMLP)
(“Crestwood”) and Crestwood Holdings LLC and Inergy, L.P. and Inergy
Midstream, L.P. (NYSE: NRGM) (“Inergy Midstream”) announced the signing of
definitive agreements to create a fully integrated midstream partnership with
a total enterprise value of approximately $7 billion. For a complete
description of these agreements, see the 8-K filed on May 6, 2013.

Quarterly Results

Marketing, supply and logistics gross profit increased to $36.2 million for
the quarter ended March 31, 2013, compared to $19.4 million for the same
quarter in the prior year.

Storage and transportation gross profit increased to $47.7 million for the
quarter ended March 31, 2013, compared to $43.7 million for the same quarter
in the prior year.

For the quarter ended March 31, 2013, operating and administrative expenses
decreased to $30.9 million, compared to $81.4 million reported for the same
quarter in the prior year.

Year-to-Date Results

Marketing, supply and logistics gross profit increased to $68.2 million for
the six months ended March 31, 2013, compared to $38.7 million for the same
period in the prior year.

Storage and transportation gross profit increased to $95.7 million for the six
months ended March 31, 2013, compared to $89.0 million for the same period in
the prior year.

For the six months ended March 31, 2013, operating and administrative expenses
decreased to $63.4 million, compared to $164.0 million reported for the same
period in the prior year.

Inergy, L.P. and Inergy Midstream, L.P. will conduct a live conference call
and internet webcast today, May 7, 2013, to discuss results of operations for
the quarter ended March 31, 2013, and their business outlook. The call will
begin at 10:00 a.m. Central Time. The call-in number for the earnings call is
1-877-405-3427, and the conference name is Inergy. The live internet webcast
and the replay can be accessed on Inergy’s website, www.inergylp.com. A
digital recording of the call will be available for one week following the
call by dialing 1-855-859-2056 and entering the pass code 57678868.

About Inergy, L.P.

Inergy, L.P., headquartered in Kansas City, Missouri, is a publicly traded
master limited partnership. Inergy's operations include a natural gas storage
business in Texas and an NGL supply logistics, transportation, and marketing
business that serves customers in the United States and Canada. Through its
general partner interest and majority equity ownership interest in Inergy
Midstream, L.P., Inergy is also engaged in the development and operation of
natural gas, NGL and crude oil storage, transportation, and logistics
businesses in the Northeast region of the United States and in North Dakota.

About Inergy Midstream, L.P.

Inergy Midstream, L.P., headquartered in Kansas City, Missouri, is a publicly
traded master limited partnership engaged in the development and operation of
natural gas, NGL and crude oil storage, transportation, and logistics
businesses in the Northeast region of the United States and in North Dakota.

Corporate news, unit prices, and additional information about Inergy,
including reports from the United States Securities and Exchange Commission,
are available on the company’s website, www.inergylp.com. For more
information, contact Vince Grisell in Inergy’s Investor Relations Department
at 816-842-8181 or via e-mail at investorrelations@inergyservices.com.

EBITDA is a non-GAAP financial measure and is defined as income before income
taxes plus net interest expense, early extinguishment of debt, and
depreciation and amortization expense. Adjusted EBITDA represents EBITDA
excluding the gain or loss on derivative contracts associated with retail
propane fixed price sales contracts, the gain or loss on the disposal of
assets, long-term incentive and equity compensation expenses, and transaction
costs. Transaction costs are third-party professional fees and other costs
that are incurred in conjunction with closing a transaction.

EBITDA and Adjusted EBITDA should not be considered an alternative to net
income, income before income taxes, cash flows from operating activities, or
any other measure of financial performance calculated in accordance with
generally accepted accounting principles as those items are used to measure
operating performance, liquidity, and our ability to service debt obligations.
We believe that EBITDA provides additional information for evaluating our
ability to make the quarterly distribution and is presented solely as a
supplemental measure. We believe that Adjusted EBITDA provides additional
information for evaluating our financial performance without regard to our
financing methods, capital structure, and historical cost basis. Further,
EBITDA and Adjusted EBITDA, as we define them, may not be comparable to EBITDA
and Adjusted EBITDA or similarly titled measures used by other corporations or
partnerships.

Participants in the Solicitation

Crestwood, NRGM, Inergy and their respective general partner’s directors and
executive officers may be deemed to be participants in the solicitation of
proxies from the unitholders of Crestwood in respect of the proposed merger
transaction. Information regarding the persons who may, under the rules of the
SEC, be deemed participants in the solicitation of the unitholders of
Crestwood in connection with the proposed transaction, including a description
of their direct or indirect interests, by security holdings or otherwise, will
be set forth in the proxy statement/prospectus when it is filed with the SEC.
Information regarding Crestwood’s directors and executive officers is
contained in Crestwood’s Annual Report on Form 10-K for the year ended
December 31, 2012, which is filed with the SEC. Information regarding NRGM’s
directors and executive officers is contained in NRGM’s Annual Report on Form
10-K for the year ended September 30, 2012, which is filed with the SEC.
Information regarding Inergy’s directors and executive officers is contained
in Inergy’s Annual Report on Form 10-K for the year ended September 30, 2012,
which is filed with the SEC. Free copies of these documents may be obtained
from the sources described above.

Forward Looking Statements

The statements in this document regarding future events, occurrences,
circumstances, activities, performance, outcomes and results are
forward-looking statements. Although these statements reflect the current
views, assumptions and expectations of NRGM’s and Crestwood’s management, the
matters addressed herein are subject to numerous risks and uncertainties which
could cause actual activities, performance, outcomes and results to differ
materially from those indicated. Such forward-looking statements include, but
are not limited to, statements about the future financial and operating
results, objectives, expectations and intentions and other statements that are
not historical facts. Factors that could result in such differences or
otherwise materially affect NRGM’s or Crestwood’s financial condition, results
of operations and cash flows include, without limitation, failure to satisfy
closing conditions with respect to the merger; the risks that the NRGM and
Crestwood businesses will not be integrated successfully or may take longer
than anticipated; the possibility that expected synergies will not be
realized, or will not be realized within the expected timeframe; fluctuations
in oil, natural gas and NGL prices; the extent and success of drilling
efforts, as well as the extent and quality of natural gas volumes produced
within proximity of our assets; failure or delays by our customers in
achieving expected production in their natural gas projects; competitive
conditions in our industry and their impact on our ability to connect natural
gas supplies to our gathering and processing assets or systems; actions or
inactions taken or non-performance by third parties, including suppliers,
contractors, operators, processors, transporters and customers; our ability to
consummate acquisitions, successfully integrate the acquired businesses,
realize any cost savings and other synergies from any acquisition; changes in
the availability and cost of capital; operating hazards, natural disasters,
weather-related delays, casualty losses and other matters beyond our control;
timely receipt of necessary government approvals and permits, our ability to
control the costs of construction, including costs of materials, labor and
right-of-way and other factors that may impact our ability to complete
projects within budget and on schedule; the effects of existing and future
laws and governmental regulations, including environmental and climate change
requirements; the effects of existing and future litigation; and risks related
to our substantial indebtedness, as well as other factors disclosed in NRGM’s
and Crestwood’s filings with the U.S. Securities and Exchange Commission. You
should read NRGM’s and Crestwood’s filings with the U.S. Securities and
Exchange Commission, including their Annual Reports on Form 10-K for the years
ended September 30, 2012 and December 31,2012, respectively, and their most
recent Quarterly Reports and Current Reports for a more extensive list of
factors that could affect results. Neither NRGM nor Crestwood assumes any
obligation to update these forward-looking statements.


Inergy, L.P. and Subsidiaries
Consolidated Statements of Operations
For the Three Months and Six Months Ended March 31, 2013 and 2012
(in millions, except unit and per unit data)

                   (Unaudited)                       (Unaudited)
                      Three Months Ended                    Six Months Ended
                      March 31,                             March 31,
                      2013           2012                2013           2012
Revenue:
Retail                $ -               $ 321.3             $ -               $ 616.3
Marketing,
supply and              365.6             278.0               736.4             592.4
logistics
Storage and            84.8            63.1              152.6           122.3   
transportation
                        450.4             662.4               889.0             1,331.0
                                                                              
Cost of product
sold (excluding
depreciation
and
amortization as
shown below):
Retail                  -                 184.6               -                 363.4
Marketing,
supply and              329.4             258.6               668.2             553.7
logistics
Storage and            37.1            19.4              56.9            33.3    
transportation
                        366.5             462.6               725.1             950.4
                                                                              
Expenses:
Operating and           30.9              81.4                63.4              164.0
administrative
Depreciation
and                     46.8              49.7                83.1              98.4
amortization
Loss on
disposal of            -               2.2               0.8             3.6     
assets
Operating               6.2               66.5                16.6              114.6
income
                                                                              
Other income
(expense):
Interest                (11.3   )         (22.4   )           (19.4   )         (50.4   )
expense, net
Early
extinguishment          -                 -                   -                 (24.9   )
of debt
Other income           0.1             0.1               0.7             1.4     
Income (loss)
before income           (5.0    )         44.2                (2.1    )         40.7
taxes
Provision for          0.3             0.2               0.4             0.3     
income taxes
Net income              (5.3    )         44.0                (2.5    )         40.4
(loss)
Net income
attributable to        (0.5    )        (3.3    )          (2.0    )        (3.7    )
non-controlling
partners
Net income
(loss)                $ (5.8    )       $ 40.7             $ (4.5    )       $ 36.7    
attributable to
partners
                                                                              
Total limited
partners’             $ (5.8    )       $ 40.7             $ (4.5    )       $ 36.7    
interest in net
income (loss)
                                                                              
Net income
(loss) per
limited partner
unit:
Basic                 $ (0.04   )       $ 0.32             $ (0.03   )       $ 0.30    
Diluted               $ (0.04   )       $ 0.31             $ (0.03   )       $ 0.28    
                                                                              
Weighted
average limited
partners’ units
outstanding (in
thousands):
Basic                  131,746         125,743           130,241         124,141 
Diluted                131,746         131,594           130,241         131,484 



                      (Unaudited)                           (Unaudited)
                      Three Months Ended                    Six Months Ended
                      March 31,                             March 31,
                      2013              2012                2013              2012
Supplemental
Information:
                                                                              
Cash and cash                                               $ 2.3             $ 14.6
equivalents
                                                                              
Outstanding
debt:
Inergy credit                                               $ 276.8           $ 355.7
agreement
Inergy senior                                                 11.5              1,200.8
unsecured notes
Inergy fair
value hedge
adjustment on                                                 -                 0.3
senior
unsecured notes
Inergy swap                                                   -                 10.5
premium
Inergy other                                                  2.9               16.7
debt
NRGM credit                                                   211.9             97.0
facility ^(e)
NRGM senior
unsecured notes                                              500.0           -       
^(e)
Total debt                                                  $ 1,003.1        $ 1,681.0 
                                                                              
Total partners’                                             $ 1,327.0        $ 1,307.4 
capital
                                                                              
Limited partner
units
outstanding (in
thousands):
Common units                                                  131,743           125,752
Class B units                                                -               5,882   
Total Common
and Class B                                                  131,743         131,634 
limited partner
units
                                                                              
EBITDA:
Net income            $ (5.3    )       $ 44.0              $ (2.5    )       $ 40.4
(loss)
Interest                11.3              22.4                19.4              50.4
expense, net
Early
extinguishment          -                 -                   -                 24.9
of debt
Provision for           0.3               0.2                 0.4               0.3
income taxes
Depreciation
and                    46.8            49.7              83.1            98.4    
amortization
EBITDA ^(a)           $ 53.1           $ 116.3            $ 100.4          $ 214.4   
Non-cash (gain)
loss on                 3.3               (0.7    )           6.7               (0.6    )
derivative
contracts
Long-term
incentive and
equity                  4.2               3.1                 7.3               6.2
compensation
expense
Loss on
disposal of             -                 2.2                 0.8               3.6
assets
Transaction            0.6             1.1               3.4             1.1     
costs
Adjusted EBITDA       $ 61.2           $ 122.0            $ 118.6          $ 224.7   
^(a)
                                                                              
Distributable
cash flow:
Adjusted EBITDA       $ 61.2            $ 122.0             $ 118.6           $ 224.7
^(a)
Cash interest           (10.0   )         (20.8   )           (14.9   )         (47.1   )
expense ^(b)
Maintenance
capital                 (2.6    )         (2.8    )           (4.6    )         (6.8    )
expenditures
^(c)
Income tax              (0.3    )         (0.2    )           (0.4    )         (0.3    )
expense
Inergy
Midstream
distributions
declared and           (11.7   )        (6.9    )          (23.2   )        (7.6    )
paid for
minority
unitholders
^(f)
Distributable         $ 36.6           $ 91.3             $ 75.5           $ 162.9   
cash flow ^(d)
                                                                              
EBITDA:
Net cash
provided by           $ 121.0           $ 171.3             $ 149.0           $ 194.5
operating
activities
Net changes in
working capital         (74.0   )         (70.6   )           (55.9   )         (34.6   )
balances
Non-cash early
extinguishment          -                 -                   -                 (8.3    )
of debt
Provision for
doubtful                (0.4    )         (0.5    )           (0.5    )         (0.4    )
accounts
Amortization of
deferred
financing               (1.2    )         (1.2    )           (4.5    )         (2.7    )
costs, swap
premium and net
bond discount
Long-term
incentive and
equity                  (4.2    )         (3.1    )           (7.3    )         (6.2    )
compensation
expense
Loss on
disposal of             -                 (2.2    )           (0.8    )         (3.6    )
assets
Deferred income         0.3               -                   0.6               0.1
tax
Interest                11.3              22.4                19.4              50.4
expense, net
Early
extinguishment          -                 -                   -                 24.9
of debt
Provision for          0.3             0.2               0.4             0.3     
income taxes
EBITDA                $ 53.1           $ 116.3            $ 100.4          $ 214.4   
Non-cash (gain)
loss on                 3.3               (0.7    )           6.7               (0.6    )
derivative
contracts
Long-term
incentive and
equity                  4.2               3.1                 7.3               6.2
compensation
expense
Loss on
disposal of             -                 2.2                 0.8               3.6
assets
Transaction            0.6             1.1               3.4             1.1     
costs
Adjusted EBITDA       $ 61.2           $ 122.0            $ 118.6          $ 224.7   

          EBITDA is defined as income (loss) before income taxes, plus net
          interest expense, early extinguishment of debt, and depreciation and
          amortization expense. As indicated in the table, Adjusted EBITDA
          represents EBITDA excluding the gain or loss on derivative contracts
          associated with retail propane fixed price sales contracts,
          long-term incentive and equity compensation expenses, the gain or
          loss on the disposal of assets and transaction costs. Transaction
          costs are third-party professional fees and other costs that are
          incurred in conjunction with closing a transaction. EBITDA and
          Adjusted EBITDA should not be considered an alternative to net
          income, income before income taxes, cash flows from operating
(a)    activities, or any other measure of financial performance calculated
          in accordance with generally accepted accounting principles as those
          items are used to measure operating performance, liquidity, and our
          ability to service debt obligations. We believe that EBITDA provides
          additional information for evaluating our ability to make the
          quarterly distribution and is presented solely as a supplemental
          measure. We believe that Adjusted EBITDA provides additional
          information for evaluating our financial performance without regard
          to our financing methods, capital structure, and historical cost
          basis. Further, EBITDA and Adjusted EBITDA, as we define them, may
          not be comparable to EBITDA and Adjusted EBITDA or similarly titled
          measures used by other corporations or partnerships.
(b)       Cash interest expense is book interest expense less amortization of
          deferred financing costs.
          Maintenance capital expenditures are defined as those capital
(c)       expenditures which do not increase operating capacity or revenues
          from existing levels.
          Distributable cash flow is defined as Adjusted EBITDA, less cash
          interest expense, maintenance capital expenditures, income taxes,
          and Inergy Midstream distributions declared and paid for minority
          unitholders. Distributable cash flow should not be considered an
          alternative to cash flows from operating activities or any other
          measure of financial performance calculated in accordance with
(d)       generally accepted accounting principles as those items are used to
          measure operating performance, liquidity, or the ability to service
          debt obligations. We believe that distributable cash flow provides
          additional information for evaluating our ability to declare and pay
          distributions to unitholders. Distributable cash flow, as we define
          it, may not be comparable to distributable cash flow or similarly
          titled measures used by other corporations and partnerships.
          Inergy and each of its wholly owned subsidiaries do not provide
(e)       credit support nor do they guarantee any amounts outstanding under
          the NRGM Credit Facility or senior notes.
          The amount of distributions for the three and six months ended March
          31, 2013, includes distributions that are to be received by Inergy
          Midstream’s minority unitholders relating to the quarter ended March
          31, 2013. The amount of distributions for the six months ended March
          31, 2013, also includes the amount already paid to Inergy
          Midstream’s minority unitholders relating to the first quarter of
(f)       fiscal 2013. The amount of distributions for the three and six
          months ended March 31, 2012, includes distributions that were to be
          received by Inergy Midstream’s minority unitholders relating to the
          quarter ended March 31, 2012. The amount of distributions for the
          six months ended March 31, 2012, also includes the amount already
          paid to Inergy Midstream’s minority unitholders relating to the
          first quarter of fiscal 2012.

Contact:

Inergy, L.P.
Vince Grisell, 816-842-8181
investorrelations@inergyservices.com
 
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