Crestwood Midstream Partners and Crestwood Equity Partners Provide 2014 Financial and Operating Guidance Conference call with management to be held today at 10:00 a.m. Central Business Wire HOUSTON -- December 5, 2013 Crestwood Midstream Partners LP (NYSE: CMLP) (“Crestwood Midstream”) and Crestwood Equity Partners LP (NYSE: CEQP) (“Crestwood Equity,” and together with Crestwood Midstream, “Crestwood”) today provided preliminary financial and operating guidance for 2014. Crestwood’s 2014 strategic plan includes estimates for the combined operations of the legacy Inergy Midstream, L.P. and legacy Crestwood Midstream Partners LP businesses which merged on October 7, 2013. “We are excited about Crestwood’s opportunities in 2014, and pleased to provide guidance that we believe demonstrates the merits of the transformational merger we completed this year,” stated Robert G. Phillips, Chairman, President and Chief Executive Officer of Crestwood’s general partner. “Since announcing our business combination in May, we have focused on executing our strategy to leverage our operational critical mass in liquids-rich and crude oil shale plays to accelerate growth. We remain focused on our commitment to deliver distribution growth and value creation for Crestwood unit holders in 2014.” Crestwood operates a diversified portfolio of midstream assets located in every premier shale play in the United States. With substantial segment operations in gathering and processing, storage and transportation and natural gas liquids (“NGLs”) and crude services, Crestwood’s activities span the entire midstream value chain connecting fundamental energy supply with energy demand centers across North America through a best-in-class midstream network. Crestwood serves many of the leading producers and consumers of natural gas, NGLs and crude oil with more than 80% of its operating margin from fixed-fee and take-or-pay contracts. Crestwood’s 2014 strategic plan, which continues to focus on liquids-rich and crude oil shale plays, is supported by a substantial backlog of internally generated capital projects in the Marcellus Shale, Bakken Shale and Powder River Basin (“PRB”) Niobrara Shale. Additionally, Crestwood’s 2014 results are expected to benefit significantly from expansion projects and acquisitions completed in 2013 including acquisitions of the Arrow gathering system in the Bakken Shale, and the Douglas crude rail facility and Jackalope gathering system in the PRB Niobrara. With more than $1.2 billion of identified multi-year growth projects in the current portfolio, Crestwood has clear visibility to long-term growth. Crestwood Midstream 2014 Outlook The following projections for 2014 results are based on management’s current estimates and assumptions and are subject to risks and uncertainties as described in the “Forward-Looking Statements” section at the end of this release. *Adjusted EBITDA in the range of $465 million to $510 million, a 34% increase from anticipated 2013 performance assuming the mid-point of 2014 guidance; *Distributable cash flow in the range of $330 million to $360 million, resulting in targeted distribution growth of 6% to 10% and coverage of 1.05 to 1.10 times cash distributions paid; and *Growth capital spending in the range of $400 million to $425 million is largely supported by fee-based contracts. Capital spending next year will focus primarily on expanding our gathering system in the Marcellus Shale, building out the Arrow system in the Bakken Shale, completing the current COLT Hub expansion in the Bakken Shale, and constructing a 120 million cubic feet per day (“MMcf/d”) processing facility on the Jackalope system in the PRB Niobrara Shale. The Marcellus expansion is supported by long-term, fixed-fee gathering and compression agreements and will provide additional system capacity for expected growth in gathering volumes from approximately 500 MMcf/d to approximately 750 MMcf/d by year-end 2014. The Arrow system is being expanded to a total design capacity of 125,000 barrels per day (“Bbls/d”) of crude oil gathering, 100 MMcf/d of gas gathering and 40,000 Bbls/d of produced water gathering. The COLT Hub expansion, which is expected to be completed in the first quarter of 2014, will increase crude oil rail loading capacity to 160,000 Bbls/d and is supported by take-or-pay contracts. The Jackalope system is expected to commence processing volumes through its facility in the third quarter 2014, and is supported by long-term contracts that provide for fixed rates of return on invested capital. “As we discussed on our last earnings call, our fourth-quarter 2013 and full-year 2014 capital spending has ramped up significantly to facilitate increased production forecasts. Anticipating this ramp-up, we took steps earlier this year – issuing almost $1.6 billion of equity and debt securities – to substantially prefund our 2014 growth capital program,” commented Phillips. Crestwood Equity 2014 Outlook The following projections for 2014 results are based on management’s current estimates and assumptions and are subject to risks and uncertainties as described in the “Forward-Looking Statements” section at the end of this release. *Adjusted EBITDA, including Crestwood Midstream, is estimated to be in the range of $520 million to $570 million. Adjusted EBITDA from operational assets owned by Crestwood Equity is estimated to be in the range of $55 million to $60 million in 2014; and *Adjusted distributable cash flow is estimated to be in the range of $85 million to $95 million, resulting in targeted distribution growth of 5% to 10% and coverage of 1.00 to 1.05 times cash distributions paid. “In 2014, Crestwood Equity is poised for growth from incentive cash distributions received from Crestwood Midstream attributable to forecasted distribution growth, as well as growth in its NGL and crude oil logistics business,” said Phillips. “Although 2014 performance will be challenged by ongoing weakness in Gulf Coast natural gas storage fundamentals, we believe the long-term fundamentals remain positive and expect to mitigate weak storage fundamentals impacting our Tres Palacios facility through cost reduction and asset optimization.” Conference Call Management will host a conference call for investors and analysts of Crestwood today at 11:00 a.m. Eastern Time (10:00 a.m. Central Time) which will be broadcast live over the Internet. Investors may participate in the call either by phone or audio webcast. An accompanying slide presentation can be accessed and downloaded approximately 30 minutes before the call starts by going to www.crestwoodlp.com. Dial 480-629-9692 at least 10 minutes before the call and ask By Phone: for the Crestwood Guidance Call. A replay will be available for one week by dialing 303-590-3030 and using the access code 4653568#. Connect to the webcast via the “Presentations and Webcasts” page in the Investor Relations section of Crestwood’s website at By Webcast: www.crestwoodlp.com. Please log in at least 10 minutes in advance to register and download any necessary software. A replay will be available shortly after the call for 90 days. Basis of Presentation and Non-GAAP Financial Measures Adjusted EBITDA and distributable cash flow are non-GAAP financial measures. The accompanying schedules of this news release provide reconciliations of these non-GAAP financial measures to their most directly comparable financial measures calculated and presented in accordance with GAAP. Our non-GAAP financial measures should not be considered as alternatives to GAAP measures such as net income or operating income or any other GAAP measure of liquidity or financial performance. Forward-Looking Statements The statements in this news release 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 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 Crestwood’s financial condition, results of operations and cash flows include, without limitation, the possibility that expected synergies will not be realized, or will not be realized within the expected timeframe; fluctuations in crude 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 Crestwood assets; failure or delays by customers in achieving expected production in their natural gas projects; competitive conditions in the industry and their impact on our ability to connect natural gas supplies to Crestwood gathering and processing assets or systems; actions or inactions taken or non-performance by third parties, including suppliers, contractors, operators, processors, transporters and customers; the ability of Crestwood 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 Crestwood’s control; timely receipt of necessary government approvals and permits, the ability of Crestwood to control the costs of construction, including costs of materials, labor and right-of-way and other factors that may impact Crestwood’s 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 the substantial indebtedness, of either company, as well as other factors disclosed in Crestwood Equity’s and Crestwood Midstream’s filings with the U.S. Securities and Exchange Commission. You should read filings made by Crestwood with the U.S. Securities and Exchange Commission, including Annual Reports on Form 10-K and the most recent Quarterly Reports and Current Reports for a more extensive list of factors that could affect results. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect management’s view only as of the date made. Crestwood does not assume any obligation to update these forward-looking statements. About Crestwood Midstream Partners LP Houston, Texas, based Crestwood Midstream (NYSE: CMLP) is a master limited partnership that owns and operates midstream businesses in multiple unconventional shale resource plays across the United States. Crestwood Midstream is engaged in the gathering, processing, treating and compression of natural gas; transportation and storage of natural gas; transportation, fractionation, storage, and terminalling of NGLs; and gathering, storage and terminalling of crude oil. Prior to the merger of Crestwood Midstream Partners LP into Inergy Midstream, L.P., which was completed on October 7, 2013, the partnership was named Inergy Midstream, L.P. and was traded on the New York Stock Exchange under the ticker symbol “NRGM.” About Crestwood Equity Partners LP Houston, Texas, based Crestwood Equity Partners LP (NYSE: CEQP) is a master limited partnership that owns the general partner interest, the incentive distribution rights and an approximate 4% limited partner interest of Crestwood Midstream. In addition, Crestwood Equity’s operations include a natural gas storage business in Texas and an NGL and crude oil supply and logistics business that serves customers in the United States and Canada. Prior to October 7, 2013, Crestwood Equity Partners LP was named Inergy, L.P. and was traded on the New York Stock Exchange under the ticker symbol “NRGY.” CRESTWOOD MIDSTREAM PARTNERS LP Full Year 2014 Adjusted EBITDA and Distributable Cash Flow Guidance Reconciliation to Net Income ($ In millions) Net income $105 - $138 Interest expense, net $130 - $142 Depreciation, amortization and accretion $230 Adjusted EBITDA $465 - $510 Cash interest expense^1 ($115) - ($127) Maintenance capital expenditures^1 ($20) - ($23) Adjusted distributable cash flow $330 - $360 ^1 We define cash interest expense as interest expense, net, adjusted for the amortization of debt issue costs, premiums, discounts and other non-cash debt-related items. We define maintenance capital expenditures as capital expenditures related to maintaining our assets and operations. CRESTWOOD EQUITY PARTNERS LP Full Year 2014 Adjusted EBITDA and Distributable Cash Flow Guidance Reconciliation to Net Income ($ In millions) Net income $135 - $173 Interest expense, net $145 - $157 Depreciation, amortization and accretion $240 Adjusted EBITDA $520 - $570 Cash interest expense^1 ($130) - ($142) Maintenance capital expenditures^1 ($25) - ($28) Proportionate Adjusted DCF Attributable to Public CMLP ($280) - ($305) Unitholders^2 Adjusted distributable cash flow $85 - $95 ^1 We define cash interest expense as interest expense, net, adjusted for the amortization of debt issue costs, premiums, discounts and other non-cash debt-related items. We define maintenance capital expenditures as capital expenditures related to maintaining our assets and operations. ^2 Represents proportionate amount of DCF attributable to public unitholders after taking into account CEQP's ownership interest in CMLP's incentive distribution rights and common units. Contact: Crestwood Mark Stockard Vice President, Investor Relations 832-519-2207 firstname.lastname@example.org
Crestwood Midstream Partners and Crestwood Equity Partners Provide 2014 Financial and Operating Guidance
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