EX-99.1 2 d391938dex991.htm PRESS RELEASE DATED AUGUST 6, 2012 Press Release dated August 6, 2012

Exhibit 99.1

 

LOGO   N e w s R e l e a s e
  CRESTWOOD MIDSTREAM PARTNERS LP
  700 Louisiana Street, Suite 2060
  Houston, TX 77002
  www.crestwoodlp.com

 

Crestwood Announces Second Quarter 2012 Results and

Confirms Schedule to Close Acquisition of Assets

from Devon Energy Corporation

HOUSTON, TEXAS, August 6, 2012 – Crestwood Midstream Partners LP (NYSE: CMLP) (“Crestwood” or the “Partnership”) reported today its second quarter 2012 financial results and confirmed that the acquisition of gathering and processing assets from certain subsidiaries of Devon Energy Corporation (“Devon”) is expected to be completed in the third quarter 2012 as previously announced.

Second Quarter Summary Results

 

     Three Months Ended      Six Months Ended  
     June 30,      June 30,  
(in thousands, except as noted)    2012      2011      2012      2011  

Net income

   $ 5,980       $ 10,227       $ 15,785       $ 19,603   

Net income, adjusted

   $ 7,707       $ 13,779       $ 17,933       $ 25,140   

Net income per limited partner unit (diluted basis)

   $ 0.06       $ 0.22       $ 0.21       $ 0.49   

Adjusted net income per limited partner unit (diluted basis)

   $ 0.10       $ 0.31       $ 0.26       $ 0.64   

Weighted average number of limited partner units outstanding (diluted basis)

     43,534         38,694         43,204         35,029   

Adjusted EBITDA

   $ 28,541       $ 29,808       $ 56,903       $ 50,402   

Adjusted distributable cash flow

   $ 20,573       $ 23,421       $ 42,660       $ 41,547   

Volumes gathered (MMcf) (1)

     51,052         50,918         106,656         90,319   

Volumes processed (MMcf)

     13,127         14,559         26,529         25,519   

 

  (1) 

Volumes gathered include only Crestwood’s 100% owned systems. Volumes attributable to Crestwood Marcellus Midstream LLC (“CMM”) are described below and in Segment Performance.

Crestwood’s adjusted earnings before interest, taxes, depreciation, amortization and accretion (“Adjusted EBITDA”) for the second quarter and six months ended June 30, 2012, was $28.5 million and $56.9 million, compared to $29.8 million and $50.4 million, respectively, for the same periods in 2011. Second quarter 2012 performance was approximately flat with first quarter 2012 Adjusted EBITDA of $28.4 million. Crestwood’s total 100% owned gathering

 

-more-


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system volumes for the recent quarter averaged 561 million cubic feet per day (“MMcf/d”), down 8% from 611 MMcf/d gathered in the first quarter 2012 and flat to 560 MMcf/d gathered in the second quarter 2011. Approximately 90% of the volume decline from the first quarter 2012 occurred in the Barnett segment (45 MMcf/d), with the remaining 10% of the decline in the Fayetteville segment (5 MMcf/d). The majority of the Barnett volume reduction occurred on Crestwood’s Alliance and Lake Arlington dry gas gathering systems due to delayed completions of new wells, modest amounts of economic shut-ins and the temporary shut-in of nearby wells for producer fracking operations.

During the second quarter 2012, 29 new wells were connected to Crestwood’s 100% owned gathering systems (including 12 new wells on the Alliance system added late in the second quarter which should increase third quarter volumes), compared to 16 new wells in the first quarter 2012, and 25 new wells in the second quarter 2011. Second quarter 2012 volumes on the Fayetteville dry gas systems were down 6% compared to the first quarter 2012, and were also affected by delayed well completions and temporary shut-ins for producer fracking operations. Crestwood connected 6 new wells to the Fayetteville systems at the end of the second quarter (15 wells total year-to-date) and expects a similar number of new wells to be connected in the second half of 2012 based on current producer activity. To facilitate the expected increase in Fayetteville volumes in the second half of 2012, Crestwood is expanding its Prairie Creek gathering system and adding treating capacity. Additionally, Crestwood is expanding its Indian Creek gathering system in the Granite Wash area to handle new rich gas volumes which were connected to the system in July and to support LeNorman Operating Inc.’s new Granite Wash development program in the area of Crestwood’s assets.

Gathering volumes attributable to CMM for the second quarter 2012 averaged 257 MMcf/d allowing CMM to contribute Adjusted EBITDA of approximately $1.9 million to Crestwood based upon its 35% indirect interest in the joint venture. CMM was formed March 26, 2012 to acquire certain Marcellus Shale gathering systems from Antero Resources Appalachia Corporation (“Antero”). Crestwood assumed operations of the CMM gathering systems and field operations from Antero on June 1, 2012, one month ahead of schedule under the Transition Services Agreement between CMM and Antero. Antero added 11 new wells and one new production station (Pike Fork) to the CMM systems in the second quarter 2012 compared to 9 new wells in the first quarter 2012 prior to the sale to CMM. Antero currently has 7 rigs running in the area of dedication (“AOD”) committed to CMM with the majority of the drilling activity located in the rich gas portion of the AOD. Based on current producer plans, Crestwood expects approximately 40 additional wells to be connected to the system in the second half of 2012.


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Crestwood expects to close the recently announced acquisition of Devon’s West Johnson County pipeline system and processing plant located in the liquids-rich area of the Barnett Shale during the third quarter 2012. Crestwood expects the acquisition to be accretive to distributable cash flow per unit by approximately 5% in 2013. Devon has already connected 30 wells to the system in 2012, and post-close, Crestwood expects to connect an additional 15 to 18 wells through year-end. Current volumes through the Devon gathering system are approximately 95 MMcf/d, and are expected to increase as additional wells are connected throughout the remainder of 2012. Upon closing, Crestwood plans to consolidate the West Johnson system with its existing Cowtown gathering system and will process all of Devon’s West Johnson County natural gas production at Crestwood’s existing Cowtown and Corvette processing plants. This integration is expected to result in future cost savings for Crestwood and provide Devon with lower wellhead pressures, higher natural gas liquids recoveries and expanded market outlets. In addition, Crestwood will own an idle processing plant that can be utilized for opportunities currently being pursued in other areas.

“Second quarter 2012 results were below our expectations primarily due to slower development activity on our Barnett Shale dry gas systems, while the rest of our business performed relatively well,” stated Robert G. Phillips, Chairman, President and Chief Executive Officer of Crestwood’s general partner. “As gas prices have remained stubbornly low in the past few months, producers have not been in a hurry to drill and complete dry gas wells, or put wells back into service after they have been shut-in for fracking operations on existing pads. However, we have seen continued solid development in the rich gas areas near our Marcellus Shale, Granite Wash and Barnett Shale rich gas systems. We had a good second quarter in the Marcellus, as we took over operations from Antero one month early, fully staffed our operations and support group for this region, connected some great new wells to the system and are getting ready for a strong second half of the year,” added Phillips.

“The Granite Wash play is finally improving for us with current volumes up approximately 40% from the second quarter 2012 average due to recent well additions, with another 2 to 3 wells expected by year-end based on producer drilling plans and infrastructure requests,” Phillips observed. “In addition, we announced a definitive agreement for another important rich gas acquisition immediately after the quarter. The acquisition from Devon is the type of bolt-on acquisition that we have been seeking since acquiring the Barnett Shale assets in 2010. Importantly, we completed a very successful equity offering last week which will allow us to fund the Devon acquisition while maintaining our conservative balance sheet and ensuring adequate liquidity going forward. The Devon acquisition, Granite Wash expansion and increasing distributions from the CMM joint venture will be important growth drivers for the remainder of 2012,” Phillips noted.


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Adjusted net income, adjusted net income per unit, adjusted EBITDA and adjusted distributable cash flow are non-generally accepted accounting principles (“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 generally accepted accounting principles in the United States of America (“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.

Segment Performance

Operating revenues in the Barnett segment totaled $31.5 million in the second quarter 2012, compared with $34.7 million in the second quarter 2011. Gathering volumes totaled 401 MMcf/d in 2012, compared with 450 MMcf/d in 2011. The decrease of 49 MMcf/d was primarily due to lower volumes in the Alliance and Lake Arlington areas noted above. Processing volumes totaled 129 MMcf/d in the second quarter 2012, compared to 144 MMcf/d in the prior year. Operating and maintenance expenses totaled $5.3 million, a decrease of $0.2 million from the second quarter 2011, due primarily to lower volume activity in the second quarter 2012.

Operating revenues in the Fayetteville segment, net of product purchases, totaled $6.2 million in the second quarter 2012, compared with $6.5 million in the second quarter 2011. Gathering volumes totaled 78 MMcf/d during the second quarter 2012, compared to 81 MMcf/d in the second quarter 2011. Operating and maintenance expenses totaled $2.2 million for the second quarter 2012, a decrease of $0.2 million from the prior year.

Operating revenues in the Granite Wash segment, net of product purchases, totaled $1.0 million in the second quarter 2012, compared to $2.1 million in the second quarter 2011. The decrease reflects lower margins realized on the sale of NGLs related to percent-of-proceeds contracts on processing volumes. Operating and maintenance expenses totaled $0.5 million in both the second quarter of 2012 and 2011.

Other operating revenues include the Sabine gathering system in the Haynesville/Bossier Shale, which was acquired in the fourth quarter 2011, and the Las Animas system in the emerging Avalon Shale trend acquired in the first quarter 2011. Gathering volumes on the Sabine and Las Animas systems totaled 57 MMcf/d and 9 MMcf/d, respectively, during the second quarter 2012. Gathering volumes on the Las Animas system totaled 12 MMcf/d in the second quarter 2011.


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General and administrative expenses totaled $6.9 million in the second quarter 2012, compared to $6.1 million in the second quarter 2011. Expenses during the second quarter 2012 included approximately $1.7 million of non-recurring costs primarily related to due diligence activities. Second quarter 2011 expenses included approximately $1.1 million of transaction related expenses for the acquisition of assets in the Fayetteville and Granite Wash segments on April 1, 2011.

Equity earnings from Crestwood’s investment in CMM totaled $0.4 million for the second quarter 2012, which represents a 35% ownership interest in CMM. Crestwood’s pro-rata portion of Adjusted EBITDA totaled $1.9 million. CMM paid a $1.7 million distribution to Crestwood during the second quarter 2012. Volumes gathered by CMM during the second quarter 2012 averaged 257 MMcf/d.

At June 30, 2012, Crestwood had approximately $561 million of debt outstanding, comprised of the $200 million principal amount of 7.75 percent fixed-rate senior notes, and approximately $361 million of borrowings under its revolving credit facility. On July 30, 2012, and August 2, 2012, Crestwood issued an aggregate of 4.6 million common units in an underwritten public offering. Net proceeds of approximately $115 million were used to partially repay the outstanding balance of its revolving credit facility. Approximately $90 million is expected to be borrowed during the third quarter 2012 to fund the acquisition of additional gathering and processing assets from Devon described above.

Capital spending for the six months ended June 30, 2012, totaled $21.5 million (excluding acquisition capital), comprised of $19.9 million on growth capital projects and $1.6 million for maintenance capital spending. Growth capital was primarily used for the construction of pipeline laterals and compression equipment in the Fayetteville and Barnett segments. Total capital spending for the full year 2012 is expected to be approximately $30 million, comprised of approximately $25 million for growth related projects and $5 million on maintenance capital spending.

Conference Call

Crestwood will host a conference call for investors and analysts on Monday, August 6, 2012, beginning at 10:30 a.m. Central Time, to discuss the second quarter 2012 performance. Interested parties may participate by joining the conference call at 888-437-9315 and entering passcode 3402935. The conference call will also be webcast live and can be accessed through the Investor Relations section of our website at www.crestwoodlp.com. A replay will be available for 30 days following the conference call by dialing 888-203-1112 and entering the replay passcode 3402935.


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About Crestwood Midstream Partners LP

Houston, Texas based Crestwood is a growth-oriented, midstream master limited partnership which owns and operates predominately fee-based gathering, processing, treating and compression assets servicing natural gas producers in the Barnett Shale in north Texas, the Fayetteville Shale in northwest Arkansas, the Haynesville/Bossier Shale in western Louisiana, the Granite Wash in the Texas Panhandle, the Avalon Shale in southeastern New Mexico and the Marcellus Shale in northern West Virginia. For more information about Crestwood, visit www.crestwoodlp.com.

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 including, without limitation, changes in general economic conditions; 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 Crestwood’s filings with the U.S. Securities and Exchange Commission. You should read our filings with the U.S. Securities and Exchange Commission,


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including our Annual Report on Form 10-K for the year ended December 31, 2011, and our most recent Quarterly Reports and Current Reports for a more extensive list of factors that could affect results.

Investor Contact:

Mark Stockard

832-519-2207

mstockard@crestwoodlp.com

###


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CRESTWOOD MIDSTREAM PARTNERS LP

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except for per unit data - Unaudited)

 

     Three Months Ended
June 30,
     Six Months Ended
June 30,
 
     2012      2011      2012      2011  

Revenue

           

Gathering revenue - related party

   $ 21,616       $ 24,515       $ 45,462       $ 47,866   

Gathering revenue

     10,734         8,425         22,571         9,901   

Processing revenue - related party

     6,550         7,903         13,321         14,540   

Processing revenue

     1,198         659         2,394         1,175   

Product sales

     8,104         14,033         18,187         14,433   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total revenue

     48,202         55,535         101,935         87,915   
  

 

 

    

 

 

    

 

 

    

 

 

 

Expenses

           

Product purchases

     7,441         12,105         16,414         12,528   

Operations and maintenance

     8,887         8,634         18,598         15,592   

General and administrative

     6,936         6,060         13,674         12,430   

Depreciation, amortization and accretion

     10,838         8,361         21,484         14,386   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total expenses

     34,102         35,160         70,170         54,936   
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating income

     14,100         20,375         31,765         32,979   

Earnings from unconsolidated affiliate

     441         —           441         —     

Interest expense

     8,286         9,819         15,843         12,825   
  

 

 

    

 

 

    

 

 

    

 

 

 

Income from operations before income taxes

     6,255         10,556         16,363         20,154   

Income tax provision

     275         329         578         551   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income

   $ 5,980       $ 10,227       $ 15,785       $ 19,603   
  

 

 

    

 

 

    

 

 

    

 

 

 

General partner’s interest in net income

   $ 3,336       $ 1,628       $ 6,704       $ 2,516   

Limited partners’ interest in net income

   $ 2,644       $ 8,599       $ 9,081       $ 17,087   

Basic income per unit:

           

Net income per limited partner unit

   $ 0.06       $ 0.22       $ 0.21       $ 0.49   

Diluted income per unit:

           

Net income per limited partner unit

   $ 0.06       $ 0.22       $ 0.21       $ 0.49   

Weighted-average number of limited partner units:

           

Basic

     43,333         38,558         43,014         34,893   

Diluted

     43,534         38,694         43,204         35,029   

Distributions declared per limited partner unit

(attributable to the period ended)

   $ 0.50       $ 0.46       $ 1.00       $ 0.90   


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CRESTWOOD MIDSTREAM PARTNERS LP

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except for unit data - Unaudited)

 

     June 30,
2012
     December 31,
2011
 
ASSETS              

Current assets

     

Cash and cash equivalents

   $ 21       $ 797   

Accounts receivable - related party

     23,369         27,312   

Accounts receivable

     9,344         11,926   

Prepaid expenses and other

     5,141         1,935   
  

 

 

    

 

 

 

Total current assets

     37,875         41,970   

Investment in unconsolidated affiliate

     129,966         —     

Property, plant and equipment, net

     751,656         746,045   

Intangible assets, net

     124,434         127,760   

Goodwill

     90,978         93,628   

Deferred financing costs, net

     14,536         16,699   

Other assets

     794         790   
  

 

 

    

 

 

 

Total assets

   $ 1,150,239       $ 1,026,892   
  

 

 

    

 

 

 
LIABILITIES AND PARTNERS’ CAPITAL              

Current liabilities

     

Accrued additions to property, plant and equipment

     6,266         7,500   

Capital leases

     3,656         2,693   

Accounts payable - related party

     262         1,308   

Accounts payable, accrued expenses and other liabilities

     25,916         31,794   
  

 

 

    

 

 

 

Total current liabilities

     36,100         43,295   

Long-term debt

     561,450         512,500   

Long-term capital leases

     4,266         3,929   

Asset retirement obligations

     12,244         11,545   

Commitments and contingent liabilities

     

Partners’ capital

     

Common unitholders (36,548,228 and 32,997,696 units issued and outstanding at June 30, 2012 and December 31, 2011, respectively)

     362,063         286,945   

Class C unitholders (6,852,858 and 6,596,635 units issued and outstanding at June 30, 2012 and December 31, 2011, respectively)

     158,803         157,386   

General partner

     15,313         11,292   
  

 

 

    

 

 

 

Total partners’ capital

     536,179         455,623   
  

 

 

    

 

 

 
   $ 1,150,239       $ 1,026,892   
  

 

 

    

 

 

 


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CRESTWOOD MIDSTREAM PARTNERS LP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands - Unaudited)

 

     Six Months Ended
June 30,
 
     2012     2011  

Operating activities:

    

Net income

   $ 15,785      $ 19,603   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation, amortization and accretion

     21,484        14,386   

Equity-based compensation

     994        565   

Amortization/accretion of deferred financing costs and capital lease obligations

     2,230        1,610   

Changes in assets and liabilities:

    

Accounts receivable - related party

     3,943        (2,999

Accounts receivable

     2,582        (6,568

Prepaid expenses and other assets

     (560     (1,612

Accounts payable - related party

     (1,046     (219

Accounts payable, accrued expenses and other liabilities

     (5,878     13,791   
  

 

 

   

 

 

 

Net cash provided by operating activities

     39,534        38,557   
  

 

 

   

 

 

 

Investing activities:

    

Capital expenditures

     (21,535     (16,888

Acquisitions, net of cash acquired

     —          (353,966

Investment in unconsolidated affiliate

     (131,250     —     

Capital distributions from unconsolidated affiliate

     1,284        —     
  

 

 

   

 

 

 

Net cash used in investing activities

     (151,501     (370,854
  

 

 

   

 

 

 

Financing activities:

    

Proceeds from issuance of senior notes

     —          200,000   

Proceeds from credit facility

     223,700        64,200   

Repayments of credit facility

     (174,750     (110,204

Payments on capital leases

     (1,375     —     

Deferred financing costs paid

     (161     (6,982

Proceeds from issuance of Class C units

     —          152,671   

Proceeds from issuance of common units, net

     103,034        53,550   

Contributions from partners

     3,413        8,741   

Distributions to partners

     (42,268     (29,130

Taxes paid for equity-based compensation vesting

     (402     —     
  

 

 

   

 

 

 

Net cash provided by financing activities

     111,191        332,846   
  

 

 

   

 

 

 

Net cash increase (decrease) in cash and cash equivalents

     (776     549   

Cash and cash equivalents at beginning of period

     797        2   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 21      $ 551   
  

 

 

   

 

 

 

Cash paid for interest

   $ 13,976      $ 7,357   

Cash paid for income taxes

   $ 1,259        220   

Non-cash transactions:

    

Accrued capital expenditures

   $ 6,266      $ 10,331   

Increase in Class C unitholders equity paid in kind

   $ 7,532      $ 2,900   

Capital lease additions

   $ 2,769      $ —     


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CRESTWOOD MIDSTREAM PARTNERS LP

OPERATING STATISTICS

(In thousands - Unaudited)

 

     Three Months Ended
June 30,
     Six Months Ended
June 30,
 
     2012      2011      2012      2011  

Barnett:

           

Gathering Revenues

   $ 23,771       $ 26,104       $ 49,830       $ 50,850   

Processing Revenues

     7,732         8,557         15,616         15,710   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Revenues

   $ 31,503       $ 34,661       $ 65,446       $ 66,560   

Operation and Maintenance Expense

     5,345         5,585         11,475         12,513   
  

 

 

    

 

 

    

 

 

    

 

 

 

EBITDA

   $ 26,158       $ 29,076       $ 53,971       $ 54,047   
  

 

 

    

 

 

    

 

 

    

 

 

 

Gathering Volumes (in MMcf)

     36,529         40,946         77,182         79,829   

Processing Volumes (in MMcf)

     11,765         13,093         23,822         24,053   

Fayetteville:

           

Gathering Revenues

   $ 6,228       $ 6,561       $ 12,994       $ 6,561   

Product Sales

     102         522         200         522   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Revenues

   $ 6,330       $ 7,083       $ 13,194       $ 7,083   

Product Purchases

     124         559         206         559   

Operation and Maintenance Expense

     2,231         2,391         4,544         2,391   
  

 

 

    

 

 

    

 

 

    

 

 

 

EBITDA

   $ 3,975       $ 4,133       $ 8,444       $ 4,133   
  

 

 

    

 

 

    

 

 

    

 

 

 

Gathering Volumes (in MMcf)

     7,112         7,334         14,647         7,334   

Granite Wash:

           

Gathering Revenues

   $ 270       $ 95       $ 409       $ 95   

Processing Revenues

     16         5         99         5   

Product Sales

     7,436         12,436         16,811         12,436   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Revenues

   $ 7,722       $ 12,536       $ 17,319       $ 12,536   

Product Purchases

     6,732         10,474         15,033         10,474   

Operation and Maintenance Expense

     541         499         1,059         499   
  

 

 

    

 

 

    

 

 

    

 

 

 

EBITDA

   $ 449       $ 1,563       $ 1,227       $ 1,563   
  

 

 

    

 

 

    

 

 

    

 

 

 

Gathering Volumes (in MMcf)

     1,367         1,538         2,720         1,538   

Processing Volumes (in MMcf)

     1,362         1,466         2,707         1,466   

Other:

           

Gathering Revenues

   $ 2,081       $ 180       $ 4,800       $ 261   

Product Sales

     566         1,075         1,176         1,475   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Revenues

   $ 2,647       $ 1,255       $ 5,976       $ 1,736   

Product Purchases

     585         1,072         1,175         1,495   

Operation and Maintenance Expense

     770         159         1,520         189   
  

 

 

    

 

 

    

 

 

    

 

 

 

EBITDA

   $ 1,292       $ 24       $ 3,281       $ 52   
  

 

 

    

 

 

    

 

 

    

 

 

 

Gathering Volumes (in MMcf)

     6,044         1,100         12,107         1,618   


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CRESTWOOD MIDSTREAM PARTNERS LP

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(In thousands, except for per unit data - Unaudited)

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2012     2011     2012     2011  

Net income

   $ 5,980      $ 10,227      $ 15,785      $ 19,603   

Items impacting net income:

        

Non-recurring expenses

     1,727        1,072        1,778        3,037   

Non-cash interest expense (write-off of deferred financing costs)

     —          —          370        —     

Interest expense (bridge loan fees)

     —          2,500        —          2,500   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net income

   $ 7,707      $ 13,799      $ 17,933      $ 25,140   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income per limited partner unit (diluted basis)

     0.06      $ 0.22        0.21      $ 0.49   

Items impacting net income

     0.04        0.09        0.05        0.15   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net income per limited partner unit (diluted basis)

   $ 0.10      $ 0.31      $ 0.26      $ 0.64   
  

 

 

   

 

 

   

 

 

   

 

 

 
     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2012     2011     2012     2011  

Net income

   $ 5,980      $ 10,227      $ 15,785      $ 19,603   

Depreciation, amortization and accretion expense

     10,838        8,361        21,484        14,386   

Income tax provision

     275        329        578        551   

Amortization of deferred financing fees

     1,023        932        2,325        1,610   

Non-cash equity compensation

     500        282        994        565   

Maintenance capital expenditures

     (1,079     (282     (1,593     (705
  

 

 

   

 

 

   

 

 

   

 

 

 

Distributable cash flow

     17,537        19,849        39,573        36,010   

Add: Non-recurring expenses

     1,727        3,572        1,778        5,537   

Less: Equity earnings from unconsolidated affiliate

     (441     —          (441     —     

Add: Adjusted DCF from unconsolidated affiliate

     1,750        —          1,750        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted distributable cash flow

   $ 20,573      $ 23,421      $ 42,660      $ 41,547   
  

 

 

   

 

 

   

 

 

   

 

 

 
     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2012     2011     2012     2011  

Total revenues

   $ 48,202      $ 55,535      $ 101,935      $ 87,915   

Product purchases

     7,441        12,105        16,414        12,528   

Operations and maintenance expense

     8,887        8,634        18,598        15,592   

General and administrative expense

     6,936        6,060        13,674        12,430   

Earnings from unconsolidated affiliate

     441        —          441        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

     25,379        28,736        53,690        47,365   

Items impacting EBITDA:

        

Add: Non-recurring expenses

     1,727        1,072        1,778        3,037   

Less: Equity earnings from unconsolidated affiliate

     (441     —          (441     —     

Add: Adjusted earnings from unconsolidated affiliate

     1,876        —          1,876        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     28,541        29,808        56,903        50,402   

Less:

        

Depreciation, amortization and accretion expense

     10,838        8,361        21,484        14,386   

Interest expense

     8,286        9,819        15,843        12,825   

Income tax provision

     275        329        578        551   

Items impacting net income

     3,162        1,072        3,213        3,037   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 5,980      $ 10,227      $ 15,785      $ 19,603   
  

 

 

   

 

 

   

 

 

   

 

 

 


NEWS RELEASE

PAGE 13 of 13

 

 

CRESTWOOD MARCELLUS MIDSTREAM LLC

OPERATING STATISTICS

(In thousands - Unaudited)

 

     For the Three  and
Six Months Ended
June 30, 2012
 

Revenue

  

Gathering revenue

   $ 7,027   
  

 

 

 

Total revenue

     7,027   
  

 

 

 

Expenses

  

Operations and maintenance

     513   

General and administrative

     1,721   

Depreciation and amortization

     2,857   
  

 

 

 

Total expenses

     5,091   
  

 

 

 

Operating income

     1,936   

Interest expense

     677   
  

 

 

 

Income from operations before income taxes

     1,259   

Income tax provision

     —     
  

 

 

 

Net income

   $ 1,259   
  

 

 

 

Add:

  

Interest expense

     677   

Income tax provision

     —     

Depreciation and amortization

     2,857   
  

 

 

 

EBITDA

   $ 4,793   

Non-recurring expenses

     568   
  

 

 

 

Adjusted EBITDA

   $ 5,361   
  

 

 

 

Volumes:

  

Gathering Volumes (in MMcf)

     23,424   

CMLP’s 35% Interest in Crestwood Marcellus Midstream LLC:

  

Equity Earnings

   $ 441   

EBITDA

   $ 1,678   

Adjusted EBITDA

   $ 1,876   

Gathering Volumes (in MMcf)

     8,198