Crestwood Midstream Announces Second Quarter 2014 Financial and Operating Results

  Crestwood Midstream Announces Second Quarter 2014 Financial and Operating   Results  Business Wire  HOUSTON -- August 6, 2014  Crestwood Midstream Partners LP (NYSE:CMLP) (“Crestwood”) reported today its financial results for the three months ended June 30, 2014.  “Crestwood’s second quarter 2014 results showed continued quarterly improvement, posting an 11% increase in Adjusted EBITDA over the first quarter 2014, and a 29% increase over the third quarter 2013, which was the initial quarter we reported combined results following our merger last year,” stated Robert G. Phillips, Chairman, President and Chief Executive Officer of Crestwood’s general partner. “During the quarter, our three operating segments and key assets in the Marcellus, Bakken and Barnett shale plays all delivered better performance due to improving volume growth on our systems and higher demand for our services. In fact, we achieved record natural gas and crude oil volumes through our systems during the quarter. As a result, our cash distribution coverage ratio increased to 0.96 times quarterly distributions paid for the second quarter, which is an important 2014 goal for the partnership.”  Financial and Operating Highlights ^(1)                            Three Months Ended                            June 30,  March 31,  December 31,  September 30, $ Millions                 2014       2014       2013           2013                                                                   Adjusted EBITDA ^(2)       $109.7     $98.9       $90.9          $85.3 Net income (loss)          $11.7      $5.5        $(42.3)        $11.6 Distributable cash flow    $81.5      $70.3       $64.3          $64.3 ^(2) Distribution coverage      0.96x      0.83x       0.76x          0.82x ratio ^(3) Natural gas volumes        3,049      2,982       2,833          2,706 (MMcf/d) Crude oil volumes          200        152         140            83 (MBbls/d)          Following the Crestwood-Inergy merger completed in October 2013,        Crestwood restated its combined financial and operating results to the        beginning of the third quarter 2013. Where appropriate, we have        compared second quarter 2014 results to first quarter 2014 or third ^(1)  quarter 2013 for purposes of providing more meaningful disclosure to        investors. In addition, results discussed herein do not include the        natural gas liquids (“NGL”) business and the Gulf Coast natural gas        storage and transportation assets owned by Crestwood Equity Partners        LP.        Adjusted EBITDA and distributable cash flow are non-GAAP measures. ^(2)   Please refer to the financial tables accompanying this release for        reconciliation to GAAP.        Represents distributable cash flow divided by cash distribution ^(3)   declared for the quarter with respect to our limited partners units.        This calculation does not include the impact of any non-cash        distributions on preferred securities we have issued.    *Adjusted earnings before interest, taxes, depreciation, amortization and     accretion (“Adjusted EBITDA”) totaled $109.7 million in the second quarter     2014, an 11% sequential increase over the first quarter 2014 and a 29%     increase over the third quarter 2013.   *Net income (loss) for the three months ended June 30, 2014, March 31, 2014     and December 31, 2013 included non-cash accruals of $6.5 million, $2.1     million, and $31.4 million, respectively, related to an earn-out premium     associated with the acquisition of the Marcellus gathering system from     Antero Resources (“Antero”) in 2012.   *Distributable cash flow increased to $81.5 million in the second quarter,     a 16% increase from first quarter 2014, resulting in continued improvement     of the cash distribution coverage ratio to 0.96x for the second quarter     2014.   *Crestwood announced a quarterly cash distribution of $0.41 per common     unit, or $1.64 per common unit on an annualized basis. The announced     distribution will be paid on August 14, 2014, to common unitholders of     record as of the close of business on August 7, 2014.   *Crestwood completed an important long-term financing in the second quarter     2014 by raising $500 million of new equity capital through the issuance of     $300 million of Class A preferred units, with an additional $200 million     of Class A preferred units to be issued by September 30, 2015. The     additional equity resulted in an improved leverage ratio, another 2014     goal of the partnership, and will provide sufficient growth capital for     the remainder of 2014 and well into 2015.  2014 Guidance  Based on Crestwood’s first half 2014 results, we have revised our estimate of full year 2014 Adjusted EBITDA to a range of $440 million to $460 million as compared to the original estimate of $465 million to $510 million. This change is largely the result of a slower than forecast ramp up of Bakken crude oil volumes at the COLT Hub and the Arrow gathering system primarily due to the colder than normal winter of 2013-14 and its impact on crude production and drilling activities. Additionally, the revised estimate reflects delays in achieving certain expected merger integration cost savings and operational synergies during the first half of 2014. Crestwood’s revised full year 2014 distributable cash flow estimate is now $320 million to $340 million as compared to the original estimate of $330 million to $360 million due to lower cash interest payments and the expected receipt of customer deficiency payments.  Second Quarter 2014 Financial and Operating Segment Results  Gathering and processing segment EBITDA totaled $51.0 million in the second quarter, compared to $48.2 million in the first quarter 2014, excluding the impact of the non-cash accrual for the Antero earn-out which has now been fully accrued and will be paid in the first quarter 2015. Natural gas gathering volumes increased 7% to a record 1,213 million cubic feet per day (“MMcf/d”) during the second quarter compared to the first quarter, based on a 10% increase in Marcellus shale volumes and 24% increase in Barnett dry volumes.  Storage and transportation segment EBITDA totaled $37.8 million during the second quarter 2014 compared to $36.8 million in the first quarter 2014. The increase resulted from higher revenues from usage fees on our firm natural gas storage and transportation contracts and increased revenues on interruptible transportation revenues due to increased Marcellus shale producer activity and increased locational basis spreads in the Northeast.  NGL and crude services segment EBITDA totaled $34.7 million during the second quarter 2014, a 32% sequential increase from $26.3 million in the first quarter 2014. The increase was primarily attributable to higher gathering volumes of crude oil, natural gas and produced water on the Arrow system, which increased 27%, 44% and 53%, respectively, over the first quarter 2014. Additionally, rail loading volumes at the COLT Hub increased to 112 thousand barrels per day (“MBbls/d”) in the second quarter 2014, a 14% sequential increase over the first quarter.  Corporate expenses include general and administrative expenses not allocated to the operating segments above. Corporate expenses during the second quarter 2014 totaled $21.3 million, compared with $24.1 million in the first quarter 2014. The decrease was attributable to lower significant transaction-related expenses, which totaled $1.5 million in the second quarter 2014 compared with $5.8 million in the first quarter 2014, partially offset by increased non-cash equity compensation expense.  Project Update / Business Outlook  Marcellus Shale  In the rich gas southwest portion of the Marcellus Shale, Antero’s active drilling program and the completion of several Crestwood gathering and compression projects in recent months drove increased volumes. In the eastern area of dedication, the Stark compressor station was completed in July 2014, increasing total system gathering capacity to 750 MMcf/d. The Banner compressor station is expected to be completed in the fourth quarter 2014 increasing gathering capacity to approximately 875 MMcf/d. Gathering volumes in the second quarter 2014 totaled 585 MMcf/d, an increase of 10% over the first quarter and 41% over the second quarter 2013. Gathering volumes in July 2014 have averaged more than 655 MMcf/d and we continue to expect that gathering volumes will increase to approximately 750 MMcf/d by the end of 2014. During the second quarter of 2014, we also completed an additional 120 MMcf/d compressor station in Antero's western development area leading to total compression volumes of 471 MMcf/d in the second quarter, a 5% increase from the first quarter 2014 and 65% over the second quarter 2013.  In the dry gas northern portion of the Marcellus Shale, our storage and transportation assets continued to operate at record volume levels during the second quarter 2014 as a result of increasing regional production. Firm storage and transportation services increased 14% over the first quarter 2014 to 1.6 billion cubic feet per day. As a result of an open season held earlier in 2014, customer precedent agreements for an additional 117,000 dekatherms per day (“Dth/d”) of firm capacity on these systems have been executed and are expected to begin in the first quarter of 2015 following the installation of additional compression capacity on the systems.  Bakken Shale  Production continues to increase in the Bakken Shale, following the harsh winter that negatively impacted our first quarter 2014 results and led to the downward revision to Crestwood’s original 2014 guidance. In the second quarter 2014, Crestwood’s Bakken crude business handled a combined total of 200 MBbls/d, up 32% from the first quarter 2014.  Arrow crude oil gathering volumes averaged 56 MBbls/d, natural gas gathering volumes averaged 29 MMcf/d and produced water gathering averaged 19 MBbls/d, up 27%, 44%, and 53%, respectively, over the first quarter 2014. Gathering volumes of crude oil, natural gas and produced water in July 2014 averaged 60 MBbls/d, 37 MMcf/d, and 20 MBbls/d, respectively. Due to increased producer drilling and completion activities in the second quarter, 36 wells were connected to the Arrow system, compared to 9 in the first quarter, and we expect an additional 43 wells to be connected to our system in the second half of 2014.  Crude-by-rail loadings at our COLT Hub continued to increase, with second quarter volumes of 112 MBbls/d, up 14% over the first quarter, and pipeline deliveries of 9 MBbls/d. We are on schedule to complete an additional release and departure track at the COLT Hub in the fourth quarter 2014, which will increase the capacity for our customers to load additional unit trains. The COLT Hub is contracted on a take-or-pay basis and in the second quarter 2014 we recognized $3.8 million of deficiency payments in distributable cash flow under these contracts.  During the second quarter 2014, we completed the acquisition of another Bakken trucking business which expands our crude oil and produced water trucking business to 48 MBbls/d. In addition, we acquired 10 MBbls/d of firm transportation capacity on Tesoro’s High Plains crude oil pipeline, which is being expanded and connects our Arrow system and COLT Hub. The expansion capacity is expected to be placed into service in September 2014.  Powder River Basin (PRB) Niobrara  Expansion of the Jackalope gas gathering system and construction of the 120 MMcf/d Bucking Horse gas processing plant remains on schedule to be completed in the fourth quarter 2014.Gas gathering volumes on the Jackalope system in the second quarter 2014 were 44 MMcf/d and were constrained due to third-party processing limitations. Under Jackalope’s cost of service structure, gathering fees in 2014 have been increased substantially to offset lower than expected volumes on the Jackalope system. Chesapeake continues to operate three drilling rigs on the Jackalope acreage and has developed an inventory of approximately 36 drilled but uncompleted wells available to be connected to the system when the Bucking Horse plant is placed in service. Recently, Chesapeake and RKI announced an acreage exchange resulting in a more concentrated acreage position owned by Chesapeake in the Jackalope gathering area. As part of that announcement, Chesapeake announced favorable drilling results in the area and the plan to potentially increase drilling activity on the dedicated area in 2015.  Crestwood’s 50%-owned Douglas crude rail terminal, located approximately eight miles from the Bucking Horse plant, was converted to unit train service in May 2014. Chesapeake’s crude production volumes continue to increase at the facility and have recently loaded up to 11 MBbls/d in the later part of July. The terminal is being expanded to provide up to 20 MBbls/d of unit train rail loading capacity and to include 240,000 barrels of working storage capacity by the end of 2014.  Barnett Shale  Gas gathering volumes on our Barnett Shale systems increased 13% to 439 MMcf/d in the second quarter compared to 387 MMcf/d in the first quarter 2014. This increase was largely attributable to a 24% increase in dry gas volumes to 264 MMcf/d in the second quarter due to new wells connected, increased gas lift volumes, lower wellhead pressures and additional volumes received from third-party pipelines. Second quarter gathering volumes in the rich gas areas were flat with first quarter 2014 volumes due to lower wellhead operating pressures and enhanced recovery that offset production decline rates. We have recently entered into an incentive gathering fee arrangement with Quicksilver Resources which should lead to increased drilling and volumes from new acreage dedications. We expect Quicksilver to run at least one drilling rig in the Barnett throughout the remainder of 2014 and continue to optimize well performance to minimize natural production declines.  Delaware/Permian  Crestwood completed a 20 MMcf/d expansion of its Willow Lake processing facility in July 2014 and expects gas volumes to ramp up from increased drilling activity by Legend Production Holdings, LLC and other area producers during the second half of 2014. In the second quarter 2014, the Willow Lake facility handled gas volumes of 6 MMcf/d being developed from the Bone Spring 2 formation in Eddy County, New Mexico.  Capital Spending and Liquidity  Growth capital expenditures and joint venture contributions for the six months ended June 30, 2014 totaled approximately $191 million, including pipeline laterals and compression equipment in the Marcellus Shale, expansion of the COLT Hub and Arrow gathering system in the Bakken, and construction of the Bucking Horse processing facility in the PRB Niobrara. Capital spending and joint venture contributions for the full year 2014 are forecasted to total between $425 million and $450 million, including approximately $20 million for maintenance capital projects.  At June 30, 2014, Crestwood had approximately $1,871 million of debt outstanding, composed primarily of $1,450 million of fixed-rate senior notes and approximately $412 million outstanding under its revolving credit facility. The revolving credit facility has a maximum borrowing capacity of $1.0 billion and matures in 2019. As noted above, Crestwood has $200 million of remaining equity commitment available under its $500 million Class A preferred equity commitment as well as $300 million of common units available for issuance under an at-the-market (“ATM”) offering program.  Conference Call  Management will host a conference call for investors and analysts of Crestwood today at 9:00 a.m. Eastern Time (8:00 a.m. Central Time) which will be broadcast live over the Internet. Investors may participate in the call either by phone or audio webcast.                Dial 719-457-2689 at least 10 minutes before the call and ask By Phone:    for the Crestwood Earnings Call. A replay will be available               until August 20, 2014 by dialing 888-203-1112 and using the               access code 7830581#.                              Connect to the webcast via the “Presentations” 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.                 Non-GAAP Financial Measures  Adjusted EBITDA and adjusted 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 and crude oil volumes produced within proximity of Crestwood assets; failure or delays by customers in achieving expected production in their oil and gas projects; competitive conditions in the industry and their impact on our ability to connect supplies to Crestwood gathering, processing and transportation 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’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 (NYSE: CMLP) is a master limited partnership that owns and operates midstream businesses in multiple unconventional shale resource plays across the United States. Crestwood is engaged in the gathering, processing, treating, compression, storage and transportation of natural gas; storage, transportation and terminalling of NGLs; and gathering, storage, terminalling and marketing of crude oil.  About Crestwood Equity Partners LP  Houston, Texas, based Crestwood Equity Partners LP (NYSE: CEQP) (“Crestwood Equity”) is a master limited partnership that owns the general partner interest, the incentive distribution rights and an approximate 4% limited partner interest of Crestwood. In addition, Crestwood Equity’s operations include a natural gas storage business in Texas and an NGL supply and logistics business that serves customers in the United States and Canada.  CRESTWOOD MIDSTREAM PARTNERS LP (FORMERLY INERGY MIDSTREAM, L.P.)  Consolidated Statements of Operations  (in millions, except unit and per unit data)  (unaudited)                    Three Months Ended      Six Months Ended                                                                Three Months Ended                    June 30,                June 30,                                                                   March 31,   December    September                    2014       2013(a)     2014       2013(a)               31,        30,                                                                   2014                                                                               2013        2013 Revenues: Gathering and      $  82.7     $ 46.5      $ 161.3     $ 93.3     $ 78.6      $ 76.0      $  47.0 processing Storage and        45.4        5.5         89.7        5.5        44.3        42.5        42.1 transportation NGL and crude      543.5       3.1         953.4       3.1        409.9       243.5       23.5 services Related party      4.1        25.0       8.3        50.6      4.2        4.0        27.5                        675.7       80.1        1,212.7     152.5      537.0       366.0       140.1 Costs of product/services sold (excluding depreciation, amortization and accretion as shown below): Gathering and      7.8         6.2         15.5        12.9       7.7         5.9         5.3 processing Storage and        3.8         0.4         7.0         0.4        3.2         4.3         4.0 transportation NGL and crude      497.7       0.9         873.9       0.9        376.2       219.8       9.7 services Related party      9.8        7.8        20.8       14.6      11.0       10.3       7.6                         519.1       15.3        917.2       28.8       398.1       240.3       26.6 Expenses: Operations and     32.7        13.4        60.7        26.4       28.0        25.2        21.7 maintenance General and        21.3        11.0        45.4        18.8       24.1        36.7        25.2 administrative Depreciation, amortization and   54.9       20.9       105.7      38.3      50.8       48.3       35.1     accretion                    108.9       45.3        211.8       83.5       102.9       110.2       82.0 Other operating income (expense): Goodwill           —           —           —           —          —           —           (4.1    ) impairment Gain on long-lived         1.1         —           1.6         —          0.5         1.0         4.4 assets Loss on contingent         (6.5    )   —          (8.6    )   —         (2.1    )   (31.4   )   —        consideration Operating income   42.3        19.5        76.7        40.2       34.4        (14.9   )   31.8 (loss) Earnings (loss) from               (1.5    )   —           (1.6    )   —          (0.1    )   0.3         (0.4    ) unconsolidated affiliates, net Interest and debt expense,      (29.0   )   (12.5   )   (57.1   )   (23.9  )   (28.1   )   (28.0   )   (19.5   ) net Income (loss) before income      11.8        7.0         18.0        16.3       6.2         (42.6   )   11.9 taxes Provision (benefit) for      0.1        0.3        0.8        0.7       0.7        (0.3    )   0.3      income taxes Net income         11.7        6.7         17.2        15.6       5.5         (42.3   )   11.6 (loss) Net income attributable to    (3.7    )   —          (6.8    )   —         (3.1    )   (3.0    )   (1.9    ) non-controlling partners Net income (loss) attributable to    8.0         6.7         10.4        15.6       2.4         (45.3   )   9.7 Crestwood Midstream Partners LP Net income attributable to    (1.1    )   —          (1.1    )   —         —          —          —        Class A preferred units Net income (loss)             $  6.9     $ 6.7      $ 9.3      $ 15.6    $ 2.4      $ (45.3 )   $  9.7   attributable to partners                                                                                                    General partner's          $  7.5     $ 7.8      $ 15.0     $ 13.0    $ 7.5      $ 7.5      $  6.3   interest in net income Payment to Legacy Crestwood   $  —       $ —        $ —        $ —       $ —        $ 34.9     $  —     unitholders Limited partners’          $  (0.6 )   $ (1.1  )   $ (5.7  )   $ 2.6     $ (5.1  )   $ (87.7 )   $  3.4   interest in net income (loss)                                                                                                    Net income (loss) per limited partner unit: Basic              $  —       $ (0.01 )   $ (0.03 )   $ 0.04    $ (0.03 )   $ (0.50 )   $  0.02  Diluted            $  —       $ (0.01 )   $ (0.03 )   $ 0.04    $ (0.03 )   $ (0.50 )   $  0.02                                                                                                     Weighted-average limited partners’ units outstanding (in thousands): Basic              187,998    75,986     187,920    70,352    187,840    175,451    161,575  Diluted            187,998    75,986     187,920    70,352    187,840    175,451    161,575                                                                                                            Financial data presented for the three and six months ended June 30,       2013 reflects the operations of Legacy Crestwood for the entire period,       and the operations of Legacy Inergy Midstream from June 19, 2013 to June (a)  30, 2013. This presentation is required under U.S. Generally Accepted       Accounting Principles (“GAAP”). We have also compared second quarter       2014 results to first quarter 2014, fourth quarter 2013 and third       quarter 2013 for purposes of providing more meaningful disclosure to       investors.         CRESTWOOD MIDSTREAM PARTNERS LP (FORMERLY INERGY MIDSTREAM, L.P.)  Selected Balance Sheet Data  (in millions)                                                    June 30,     December 31,                                                     2014          2013                                                     (unaudited) Cash and cash equivalents                           $ 17.3        $   2.7                                                                    Outstanding debt:                                                                    Crestwood Midstream Partners LP Credit Facility                                     $ 412.3       $   414.9 2019 Senior Notes                                   350.0         350.0 Premium on 2019 Senior Notes                        1.1           1.2 2020 Senior Notes                                   500.0         500.0 Fair value adjustment of 2020 Senior Notes          4.3           4.7 2022 Senior Notes                                   600.0         600.0 Other                                               3.5          — Total debt                                          $ 1,871.2    $   1,870.8                                                                    Total partners' capital                             $ 4,371.7    $   4,193.1  Crestwood Midstream Partners LP partners' capital                                                                    Class A preferred units outstanding                 12.0          — Limited partner units outstanding                   187.9         187.2                                                                     CRESTWOOD MIDSTREAM PARTNERS LP (FORMERLY INERGY MIDSTREAM, L.P.)  Reconciliation of Non-GAAP Financial Measures  (in millions)  (unaudited)                 Three Months Ended    Six Months Ended      Three Months Ended                  June 30,               June 30,                                                                March      December    September                  2014       2013       2014       2013       31,       31,        30,                                                                2014       2013        2013 EBITDA Net income       $ 11.7      $ 6.7      $ 17.2      $ 15.6     $ 5.5      $ (42.3 )   $  11.6 (loss) Interest and debt expense,    29.0        12.5       57.1        23.9       28.1       28.0        19.5 net Provision (benefit) for    0.1         0.3        0.8         0.7        0.7        (0.3    )   0.3 income taxes Depreciation, amortization     54.9       20.9      105.7      38.3      50.8      48.3       35.1     and accretion EBITDA ^(a)      $ 95.7      $ 40.4     $ 180.8     $ 78.5     $ 85.1     $ 33.7      $  66.5 Significant items impacting EBITDA: Non-cash equity           5.2         1.1        9.8         1.7        4.6        9.3         4.8 compensation expense Gain on long-lived       (1.1    )   —          (1.6    )   —          (0.5   )   (1.0    )   (4.4    ) assets Goodwill         —           —          —           —          —          —           4.1 impairment Loss on contingent       6.5         —          8.6         —          2.1        31.4        — consideration Earnings (loss) from unconsolidated   1.5         —          1.6         —          0.1        (0.3    )   0.4 affiliates, net Adjusted EBITDA from      0.4         —          2.1         —          1.7        1.9         0.6 unconsolidated affiliates Significant transaction related costs    1.5        4.8       7.3        5.5       5.8       15.9       13.3     and other items Adjusted         $ 109.7     $ 46.3     $ 208.6     $ 85.7     $ 98.9     $ 90.9      $  85.3 EBITDA ^(a)                                                                                                Distributable Cash Flow Adjusted         $ 109.7     $ 46.3     $ 208.6     $ 85.7     $ 98.9     $ 90.9      $  85.3 EBITDA ^(a) Cash interest    (27.2   )   (11.4  )   (53.5   )   (21.8  )   (26.3  )   (21.9   )   (18.6   ) expense ^(b) Maintenance capital          (4.7    )   (2.0   )   (7.4    )   (2.9   )   (2.7   )   (5.0    )   (3.7    ) expenditures ^ (c) (Provision) benefit for      (0.1    )   (0.3   )   (0.8    )   (0.7   )   (0.7   )   0.3         (0.3    ) income taxes Deficiency       3.8         —          4.9         —          1.1        —           1.6 payment Other            —          —         —          0.1       —         —          —        adjustments Distributable cash flow attributable     $ 81.5      $ 32.6     $ 151.8     $ 60.4     $ 70.3     $ 64.3      $  64.3  to CMLP ^(d)                                                                                                       EBITDA is defined as income before income taxes, plus net interest and       debt expense, and depreciation, amortization and accretion expense. In       addition, Adjusted EBITDA considers the adjusted earnings impact of our       unconsolidated affiliates by adjusting our equity earnings or losses       from our unconsolidated affiliates for our proportionate share of their       depreciation and interest, the impact of certain significant items, such       as non-cash equity compensation expenses, gains and impairments of       long-lived assets and goodwill, third party costs incurred related to       potential and completed acquisitions, loss on contingent consideration, (a)  and other transactions identified in a specific reporting period. EBITDA       and Adjusted EBITDA are not measures calculated in accordance with       accounting principles generally accepted in the United States of America       (GAAP), as they do not include deductions for items such as       depreciation, amortization and accretion, interest and income taxes,       which are necessary to maintain our business. EBITDA and Adjusted EBITDA       should not be considered an alternative to net income, operating cash       flow or any other measure of financial performance presented in       accordance with GAAP. EBITDA and Adjusted EBITDA calculations may vary       among entities, so our computation may not be comparable to measures       used by other companies. (b)   Cash interest expense is book interest expense less amortization of       deferred financing costs plus bond premium amortization.       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,       deficiency payments (primarily related to deferred revenue), and other       adjustments. 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 generally (d)   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.         CRESTWOOD MIDSTREAM PARTNERS LP (FORMERLY INERGY MIDSTREAM, L.P.)  Reconciliation of Non-GAAP Financial Measures  (in millions)  (unaudited)                 Three Months Ended    Six Months Ended      Three Months Ended                  June 30,               June 30,                                                                March      December   September                  2014       2013       2014       2013       31,       31,       30,                                                                2014       2013       2013 EBITDA Net cash provided by      $ 37.3      $ 34.4     $ 95.4      $ 68.5     $ 58.1     $ 55.0     $  63.0 operating activities Net changes in operating        43.0        (4.8   )   50.0        (10.8  )   7.0        (3.5   )   (10.4   ) assets and liabilities Amortization of debt-related     (1.8    )   (0.9   )   (3.6    )   (2.0   )   (1.8   )   (6.1   )   (1.0    ) deferred costs and premiums Interest and debt expense,    29.0        12.5       57.1        23.9       28.1       28.0       19.5 net Non-cash equity           (5.2    )   (1.1   )   (9.8    )   (1.7   )   (4.6   )   (9.3   )   (4.8    ) compensation expense Gain on long-lived       1.1         —          1.6         —          0.5        1.0        4.4 assets Goodwill         —           —          —           —          —          —          (4.1    ) impairment Loss on contingent       (6.5    )   —          (8.6    )   —          (2.1   )   (31.4  )   — consideration Earnings (loss) from unconsolidated   (1.5    )   —          (1.6    )   —          (0.1   )   0.3        (0.4    ) affiliates, net Deferred         —           —          (0.5    )   —          (0.5   )   —          — income taxes Provision (benefit) for    0.1         0.3        0.8         0.7        0.7        (0.3   )   0.3 income taxes Other non-cash (income)         0.2        —         —          (0.1   )   (0.2   )   —         —        expense EBITDA ^(a)      $ 95.7      $ 40.4     $ 180.8     $ 78.5     $ 85.1     $ 33.7     $  66.5 Non-cash equity           5.2         1.1        9.8         1.7        4.6        9.3        4.8 compensation expense Gain on long-lived       (1.1    )   —          (1.6    )   —          (0.5   )   (1.0   )   (4.4    ) assets Goodwill         —           —          —           —          —          —          4.1 impairment Loss on contingent       6.5         —          8.6         —          2.1        31.4       — consideration (Earnings) loss from unconsolidated   1.5         —          1.6         —          0.1        (0.3   )   0.4 affiliates, net Adjusted EBITDA from      0.4         —          2.1         —          1.7        1.9        0.6 unconsolidated affiliates Significant transaction related costs    1.5        4.8       7.3        5.5       5.8       15.9      13.3     and other items Adjusted         $ 109.7     $ 46.3     $ 208.6     $ 85.7     $ 98.9     $ 90.9     $  85.3 EBITDA ^(a)                                                                                                      EBITDA is defined as income before income taxes, plus net interest and       debt expense, and depreciation, amortization and accretion expense. In       addition, Adjusted EBITDA considers the adjusted earnings impact of our       unconsolidated affiliates by adjusting our equity earnings or losses       from our unconsolidated affiliates for our proportionate share of their       depreciation and interest, the impact of certain significant items, such       as non-cash equity compensation expenses, gains and impairments of       long-lived assets and goodwill, third party costs incurred related to       potential and completed acquisitions, loss on contingent consideration, (a)  and other transactions identified in a specific reporting period. EBITDA       and Adjusted EBITDA are not measures calculated in accordance with       accounting principles generally accepted in the United States of America       (GAAP), as they do not include deductions for items such as       depreciation, amortization and accretion, interest and income taxes,       which are necessary to maintain our business. EBITDA and Adjusted EBITDA       should not be considered an alternative to net income, operating cash       flow or any other measure of financial performance presented in       accordance with GAAP. EBITDA and Adjusted EBITDA calculations may vary       among entities, so our computation may not be comparable to measures       used by other companies.         CRESTWOOD MIDSTREAM PARTNERS LP (FORMERLY INERGY MIDSTREAM, L.P.) Segment Data  (in millions)  (unaudited)                                                                                                                                  Three                     Three Months Ended     Six Months Ended        Months                     June 30,               June 30,                Ended                                                                     March 31,                     2014        2013       2014        2013        2014 Gathering and Processing Operating           $ 83.4      $ 71.1     $ 162.9     $ 143.5     $  79.5 revenues Costs of product/services    17.6        14.0       36.3        27.5        18.7 sold Operations and maintenance         14.7        12.6       28.1        25.6        13.4 expense Gain on             0.5         —          1.0         —           0.5 long-lived assets Loss on contingent          (6.5    )   —          (8.6    )   —           (2.1      ) consideration Earnings (loss) from                (0.6    )   —         (0.3    )   —          0.3        unconsolidated affiliate EBITDA              $ 44.5      $ 44.5     $ 90.6      $ 90.4      $  46.1  Storage and Transportation Operating           $ 45.4      $ 5.5      $ 89.7      $ 5.5       $  44.3 revenues Costs of product/services    3.8         0.4        7.0         0.4         3.2 sold Operations and maintenance         4.4         0.6        8.7         0.6         4.3 expense Gain on             0.6        —         0.6        —          —          long-lived assets EBITDA              $ 37.8      $ 4.5      $ 74.6      $ 4.5       $  36.8  NGL and Crude Services Operating           $ 546.9     $ 3.5      $ 960.1     $ 3.5       $  413.2 revenues Costs of product/services    497.7       0.9        873.9       0.9         376.2 sold Operations and maintenance         13.6        0.2        23.9        0.2         10.3 expense Loss from unconsolidated      (0.9    )   —         (1.3    )   —          (0.4      ) affiliate EBITDA              $ 34.7      $ 2.4      $ 61.0      $ 2.4       $  26.3                                                                               Total Segment       $ 117.0     $ 51.4     $ 226.2     $ 97.3      $  109.2 EBITDA Corporate           (21.3   )   (11.0  )   (45.4   )   (18.8   )   (24.1     ) EBITDA              $ 95.7     $ 40.4    $ 180.8    $ 78.5     $  85.1                                                                                   CRESTWOOD MIDSTREAM PARTNERS LP (FORMERLY INERGY MIDSTREAM, L.P.) Operating Statistics  (unaudited)                                                                                    Three Months Ended    Six Months Ended      Three Months                       June 30,              June 30,              Ended                                                                   March 31,                       2014        2013      2014        2013      2014 Gathering and Processing (MMcf/d) Marcellus             584.7       415.0     558.0       396.0     531.0 Barnett rich          174.8       203.9     174.6       207.5     174.3 Barnett dry           264.1       233.9     238.5       235.7     212.7 Fayetteville          102.2       84.6      107.5       83.7      112.8 PRB Niobrara - Jackalope Gas         44.2        —         48.5        —         52.9 Gathering^(a) Other                 43.2       55.4     44.4       60.9     45.6       Total gathering       1,213.2     992.8     1,171.5     983.8     1,129.3 volumes Processing volumes    190.9       217.3     190.1       220.7     189.4 Compression volumes   470.5       284.4     459.3       277.1     448.0                                                                              Storage and Transportation Storage Storage capacity, 100% firm             34.8        —         34.8        —         34.8 contracted (Bcf) Firm storage          474.0       —         480.1       —         486.2 services (MMcf/d) Interruptible storage services      23.1        —         45.0        —         66.9 (MMcf/d) Transportation - firm contracted       955.0       —         915.0       —         875.0 capacity (MMcf/d) % of operational      100     %   —     %   100     %   —     %   100       % capacity contracted Firm services         1,072.0     —         982.7       —         893.3 (MMcf/d) Interruptible         237.7       —         311.7       —         385.6 services (MMcf/d)                                                                              NGL and Crude Services Arrow Midstream Crude oil (MBbls/d)   55.8        —         50.0        —         44.1 Natural gas           29.0        —         24.6        —         20.2 (MMcf/d) Water (MBbls/d)       19.0        —         15.7        —         12.4 COLT Hub Rail loading          111.6       —         104.8       —         98.1 (MBbls/d) NGL Storage -         1,500.0     —         1,500.0     —         1,500.0 capacity (MBbls) % of operational      100     %   —     %   100     %   —     %   100       % capacity contracted                                                                               (a)  Represents 50% owned joint venture, operational data reported at 100%.         CRESTWOOD MIDSTREAM PARTNERS LP (FORMERLY INERGY MIDSTREAM, L.P.)  Full Year 2014 Adjusted EBITDA and Distributable Cash Flow Guidance  Reconciliation to Net Income  (in millions)  (unaudited)                                                  Net income                                           $90 - $110 Interest and debt expense, net                       $120 Depreciation, amortization and accretion             $230 Adjusted EBITDA                                      $440 - $460                                                       Cash interest expense ^(a)                           ($100) Maintenance capital expenditures ^(b)                ($20) Distributable cash flow attributable to CMLP         $320 - $340                                                        (a)  Cash interest expense is book interest expense less amortization of       deferred financing costs plus bond premium amortization.       Maintenance capital expenditures are defined as those capital (b)   expenditures which do not increase operating capacity or revenues from       existing levels.  Contact:  Crestwood Midstream Partners LP Mark Stockard, 832-519-2207 Vice President, Investor Relations mstockard@crestwoodlp.com  
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