The document discusses Crestwood Midstream Partners LP and Crestwood Equity Partners LP. It provides an investor presentation on the company's financial results and growth outlook. Some key points:
- Crestwood exceeded its 2017 guidance targets and outperformed consensus estimates.
- Volume growth in 2017 was strong across various basins where Crestwood operates. Further volume growth is expected in 2018-2019 from increased drilling plans.
- Crestwood's contract portfolio is largely composed of take-or-pay and fixed-fee contracts, providing stability.
- The presentation outlines Crestwood's 2018 financial outlook and capital program focused on organic growth projects across various regions.
1. Presentation Title
Presentation Subtitle
Crestwood Midstream Partners LP Crestwood Equity Partners LP
Connections for Americaâs Energy
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Presentation Title
Presentation Subtitle
Crestwood Midstream Partners LP Crestwood Equity Partners LP
Connections for Americaâs Energy
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Presentation Title
Presentation Subtitle
Crestwood Midstream Partners LP Crestwood Equity Partners LP
Connections for Americaâs Energy
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2/19/2018
Presentation Title
Presentation Subtitle
Crestwood Midstream Partners LP Crestwood Equity Partners LP
Connections for Americaâs Energy
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Presentation Title
Presentation Subtitle
Crestwood Midstream Partners LP Crestwood Equity Partners LP
Connections for Americaâs Energy
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Connections for Americaâs Energy
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Investor Presentation
February 2018
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The statements in this communication 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 Crestwoodâs 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 benefits that may result
from the merger and 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
Crestwoodâs financial condition, results of operations and cash flows include, without limitation, the possibility that
expected cost reductions will not be realized, or will not be realized within the expected timeframe; fluctuations in crude oil,
natural gas and NGL prices (including, without limitation, lower commodity prices for sustained periods of time); 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 Crestwoodâs 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 Crestwoodâs 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 Crestwoodâs 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 managementâs view only as of the
date made. Crestwood does not assume any obligation to update these forward-looking statements.
Company Information
2
Forward-Looking Statements
Contact Information
Corporate Headquarters
811 Main Street
Suite 3400
Houston, TX 77002
(1) Market data as of 2/16/2018.
(2) Unit count and balance sheet data as of 12/31/2017.
Crestwood Equity Partners LP
NYSE Ticker CEQP
Market Capitalization ($MM)(1,2) $1,962
Enterprise Value ($MM)(2) $4,138
Annualized Distribution $2.40
Investor Relations
investorrelations@crestwoodlp.com
(713) 380-3081
No IDRs
Corporate Structure
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Key Investor Highlights:
Solid Execution in 2017 Sets Up Crestwood for Stronger 2018
4
EXECUTION
UNITHOLDER
ALIGNMENT
FINANCIAL
DISCIPLINE
SELF-FUNDED
GROWTH
Focused on generating increased DCF per unit to enhance unitholder
value on a Price/DCF basis
⢠2017 Adj. EBITDA of $395MM achieves upper end of increased 2017 guidance
⢠29%, 23% and 24% y-o-y growth on oil, gas and water gathering volumes, respectively
⢠Recognized by EnergyPoint, NDPC and the EPA as a best-in-class midstream operator for
safety, customer service, community and environmental responsibility
⢠No incentive distribution rights (âIDRsâ)
⢠Management and insiders own >30% of common LP units
⢠First Reserve continues to commit over $500MM of new capital to support CEQP growth;
Highlights First Reserveâs long-term committee to Crestwood
⢠Attractive balance sheet; committed to long-term leverage ratio of 4.0x or below
⢠Strong distribution coverage of 1.2x or above
⢠Opportunistically managing capital structure to reduce cost of capital
⢠No equity required to fund $250MM-$300MM capital program in 2018
⢠Asset divestitures used to reduce debt; US Salt divested in Q4 2017 for ~$225MM
⢠Highly strategic joint-ventures with Shell Midstream, Williams, Con Edison and First Reserve
reduce capital requirements
⢠High quality growth in the Bakken, Delaware Basin, Powder River Basin and NE Marcellus
⢠Committed to accretive organic growth projects offering 5x â 7x build projects
⢠~$120MM+ expected EBITDA contribution from current projects by 2021
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($US Millions) Q4 2017
Actuals
Consensus
Adjusted EBITDA $110.9 $104
(-) Cash Interest Expense (23.5)
(-) Maintenance Capital (5.9)
(-) Other (5.9)
(-) Distribution to Preferred Holders (18.8)
Distributable Cash Flow $56.8 $55
($US Millions) FY 2017
Actuals
2017 Guidance
Adjusted EBITDA $395 $380 â $400
Distributable Cash Flow $228 $220 â $230
Growth Capital $214 $225 â $250
Maintenance Capital $22 $20 â $25
Coverage Ratio 1.4x 1.2 â 1.3x
Leverage Ratio 4.1x 4.0x â 4.5x
5
Q4 and FY 2017 Financial Results Outperform
Crestwood exceeded the mid-point of its increased guidance targets and outperformed
consensus estimates in 2017
Fourth Quarter 2017 Results
FY 2017 Actuals vs. Guidance
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Diversified Assets in Active Basins
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Crestwood assets offer operating scale, fixed-fee services & DCF growth
⢠5-Yr Growth Strategy Driven by
4 Core Growth Areas
â Bakken â 2018+
â Delaware Basin â 2019+
â Powder River Basin â 2019+
â NE Marcellus Shale â 2020+
⢠Remaining portfolio of assets
provide stable cash flows,
optimization alternatives and
upside optionality
Bakken
Northeast
MarcellusPowder
River Basin
Delaware
Basin
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Balanced Portfolio; High Quality Customers
CEQP Contract Portfolio
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7
Variable
Rate Contracts
14%
Take-or-Pay and
Fixed-Fee
Contracts
86%
~86% of Crestwood 2018 EBITDA from take-or-pay and fixed-fee contracts;
Key assets protected from commodity volatility and volume declines
Long-Term Contract Profile With High Quality Customers(1)
2018 Forecasted EBITDA
(1) Not inclusive of all Crestwood customers.
Stable cash flows supported by fixed-fee contracts, top-tier customer base
and balanced commodity exposure by volume and EBITDA
G&P assets backed by 1.1 million acreage; High quality producer mix
Top-tier NE Gas Storage & Transportation franchise; Largely investment grade
Diversified NGL Marketing, Supply & Logistics business
Gas Oil NGLs
Volumes by
Commodity
EBITDA by
Commodity
60%25%
15%
50%
30%
20%
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2018E Financial Outlook
Marketing, Supply & Logistics
⢠Adjusted EBITDA(1): $50MM - $55MM
⢠US Salt divested for $225MM in 2017
at ~11x cash flow
⢠NGL marketing business driven by
seasonal propane and butane
demand in the Northeast
⢠West Coast stable and primarily
based on butane demand from local
refiners
Segment Outlook
Storage & Transportation
⢠Adjusted EBITDA(1): $70MM - $75MM
⢠Stagecoach distribution to increase 5%
in June 2018 and 10% in June 2019
⢠COLT Hub $10MM-$15MM cash flow
contribution in 2018 and 2019
⢠Tres Palacios rate improvement driven
by gulf coast LNG and Mexican gas
demand
Gathering & Processing
⢠Adjusted EBITDA(1): $335MM - $355MM
⢠Bakken 15% y-o-y growth driven by
system de-bottlenecking and new
processing capacity
⢠Powder River growth driven by improved
contract and rig activity; 4 expected in
1H 2018
⢠Delaware Basin growth driven by
increased gathering volumes and Orla
processing plant in-service in mid-2018
⢠SW Marcellus / Barnett modest declines
Crestwood expects to resume cash flow growth in 2018 as volumes in the Bakken,
Delaware Basin, and Powder River Basin benefit from increased activity
Adjusted EBITDA
Distributable Cash Flow
Distribution Coverage Ratio
2018E Leverage Ratio
Growth Capital
Maintenance Capital
>1.2x
4.0x â 4.5x
$250 million â $300 million
$15 million â $20 million
$390 million â $420 million
$195 million â $225 million
Note: Please see accompanying tables of non-GAAP reconciliations for
Adjusted EBITDA and DCF.
(1) Segment Adjusted EBITDA excludes corporate G&A of $65MM.
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⢠10
Attractive Set of Near-term
Organic Growth Projects
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2018E Growth Capital
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2018E Growth Capital By Region(1)
2018E Growth Capital by Quarter
Growth Capital Summary by Region
Bakken
81%
Delaware
Basin
13%
Powder
River
4%
Other
2%
-
$25
$50
$75
$100
Q1:18 Q2:18 Q3:18 Q4:18
⢠Bakken
â Gathering and compression de-bottlenecking projects for
oil, gas and water systems
â Bear Den processing Phase 1 and 2 plant expansions;
target Phase 2 in-service date Q3 2019
â Salt water disposal wells and water upgrades
â Growth projects drive 15% - 20% EBITDA 5-yr CAGR
⢠Delaware Basin
â Orla processing plant (200 MMcf/d); target in-service date
July 2018
â High pressure pipelines connecting Willow Lake to Orla and
Nautilus to Orla
â Gathering system expansions for Shell, Concho, Marathon
and Mewbourne
⢠Powder River Basin
â Well connects and gathering system expansions
â Monitoring processing capacity at Bucking Horse plant;
Current capacity of 120 MMcf/d
â CHK plans to run 4 rigs on PRB acreage in 2018
Crestwood plans to invest $250MM-$300MM in 2018 to expand gathering and
processing capacity in the Bakken, Delaware Basin and Powder River Basin
Highly accretive growth projects expected to generate 5x â 7x build multiples
(1) 2018E range of $250 million to $300 million
represents growth capital net to CEQP.
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Bakken Growth Strategy
12
Crestwood continues to expand the Bakken Arrow System to offer producers full
value-chain services and meet growing volume forecasts
Arrow Overview
Oil
Natural Gas
Water
⢠Arrow Gathering system generated ~$120MM of Adj. EBITDA
in 2017
⢠>1,500 drilling locations identified on dedicated acreage
⢠Diversified and balanced group of producers: WPX, QEP,
XTO, EnerPlus, Bruin, Rimrock
⢠8-year weighted average contract length and Crestwood
purchases 100% of oil and gas volumes at the wellhead
⢠The Arrow system will be Crestwoodâs largest driver of
cash flow growth in â18/â19
3-Product Growth Strategy
⢠Oil gathering volumes expected to increase ~15% in 2018
⢠Current projects: Increasing oil gathering capacity to 120 MBbls/d
⢠Gas gathering volumes expected to increase ~50% in 2018
⢠Current Projects: (1) Increasing gas gathering capacity to 120 MMcf/d and (2) Bear Den Plant: 2-phase
150 MMcf/d plant; Evaluating downstream NGL solutions to optimize producer netbacks and project returns
⢠Water gathering volumes expected to increase ~60% in 2018
⢠Current projects: Increasing water gathering capacity to 90 MBbls/d and new SWD wells
1
2
3
Forecasted Volume Growth
80 well connects per
year through 2021 drives
15-20% EBITDA CAGR
â
25
50
75
100
125
2013 2014 2015 2016 2017 2018 2019 2020 2021
Oil (MBbl/d) Water (MBbl/d) Gas (MMcf/d)
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0
30
60
90
120
150
YE 2017 YE 2019
Capacity(MMcf/d)
0
30
60
90
120
150
YE 2017 YE 2019
Capacity(MBbls/d)
0
30
60
90
120
YE 2017 YE 2019
Capacity(MMcf/d)
0
20
40
60
80
100
YE 2017 YE 2019
Capacity(MBbls/d)
Arrow System Expansion Projects
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Arrow expansions nearly double capacity to support long-term development
plans and increasing Bakken well performance
Gathering
Projects
New Oil &
Water Pumps
New
Compressor
Station
Bear Den Plant
Phase 1: 30 MMcf/d
Phase 2: 120 MMcf/d
SWD
Expansions
Crude Gathering Water Gathering Gas Gathering Gas Processing
+50% +70% +120% +400%
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Bakken Processing Expansion Projects
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Overview Processing Capacity Growth Timeline
Bear Den plant phase-1
Crestwood is investing growth capital to expand Arrowâs processing capacity to
meet producer drilling forecasts; Bear Den Phase 2 scheduled in-service for Q3 2019
⢠Bear Den Processing Plant is a two phase
processing solution that will provide 150
MMcf/d of combined processing capacity
⢠Phase 1: âImmediate solutionâ - 30 MMcf/d
RJT unit sized to process excess gas volumes
previously flared or above third-party
contracts
â Phase 1 project cost ~$100MM (includes
Bear Den pipeline)
â Commissioned late November 2017
⢠Phase 2: âLong-term solutionâ - 120 MMcf/d
cryogenic plant sized to process 100% of
Arrow gas by 2019
â Phase 2 project cost ~$195MM
â Targeted in-service Q3 2019
⢠Attractive total project returns of sub-6x;
Phase 1 project accretive to DCF in 2018
0
20
40
60
80
100
120
140
160
2017 2018 2019 2020 2021
ProcessingVolume(MMcf/d)
CEQP Bear Den - Phase 2
CEQP Bear Den - Phase 1
Third-Party Processing
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Delaware Basin Strategy and Overview
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Asset MapAsset Overview & Strategy
Crestwood is building competitive scale and fully integrated systems in the heart of
the Delaware Basin through 50/50 JV with First Reserve
⢠Current assets includes Willow Lake gathering &
processing and Nautilus gathering & compression
â Total gathering capacity of 335 MMcf/d
â Total processing capacity of 85 MMcf/d
⢠Current growth projects: In-Service
â 200 MMcf/d Orla Processing Plant Q3 2018
â Nautilus to Orla Pipeline Q3 2018
â Willow Lake to Orla Pipeline Q3 2018
⢠Future expansion opportunities:
â Crude oil gathering, terminalling and condensate
stabilization/blending
â Produced water gathering and disposal
⢠Halcon Resources acquired southern Ward Co.
acreage from SWEPI â Q1 2018
â Potentially accelerates development and build-
out of southern Nautilus system
Willow Lake and Nautilus systems expected to be fully connected to the Orla
Processing plant by July 2018; Crestwood pursuing incremental undedicated third-
party volumes around existing systems
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Delaware Basin Current G&P Assets
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Willow Lake and Nautilus gathering systems, combined gather over 140 MMcf/d, are
at the center of significant development activity in the Delaware Basin
Delaware System MapsWillow Lake System
⢠Willow Lake Gathering and Processing System is at the epicenter of
Northern Delaware Basin development in Eddy and Lea counties, NM
â ~82 miles low pressure gathering system
â Current processing capacity of 85 MMcf/d (includes 30 MMcf/d
expansion to handle volume growth through 2Q18)
⢠Existing acreage/well dedications with Concho and Mewbourne
supported by 100,000 acre AMI around plant/system
⢠The Orla Express pipeline will connect the Willow Lake system to the
Orla Processing Plant in 1H 2018
Nautilus System
Asset Ownership:
Willow
Lake
Orla
Plant Nautilus
Crestwood 50% 50% 25%
First Reserve 50% 50% 25%
Shell Midstream - - 50%
⢠Nautilus Natural Gas Gathering System supports Shellâs Delaware
Basin development program; Joint venture with Shell Midstream LP
â 20-year tiered fixed-fee gathering and compression contract
â 100,000 acreage dedication in Loving and Ward counties, TX
⢠~$90MM of capital invested in 2017 at a ~5.0x build-multiple
⢠The Nautilus-to-Orla pipeline will connect the Nautilus system to the Orla
Processing Plant in 1H 2018
Over 200K
dedicated acres
The Permian basin is the most important asset within Shellâs
unconventional portfolio, Shell has around 270k acres in the
Permian, and intends to invest $1 billion per year to grow
production to 155 MBbls/d by 2020.â â Shell Midstream
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Delaware Basin Water Solutions Next Leg of Growth
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Scalable infrastructure solutions for Delaware Basin water requirements; potential
next phase of Delaware Basin growth strategy
Delaware Water Production
⢠Based on Crestwoodâs current capture area, 2.4 MMBbls/d
of produced water is forecasted by 2021
⢠Crestwoodâs existing assets well-positioned to offer water
gathering and disposal services to producers
⢠Crestwood has extensive experience gathering and
disposing produced water in the BakkenCapture Area.
1.0
1.2
1.6
2.0
2.4
â
0.5
1.0
1.5
2.0
2.5
3.0
2017 2018 2019 2020 2021
Source: DrillingInfo and Wood Mackenzie.
(1) Water forecast based on capture area gas forecast and converted to
water based on GORs and WORs for the Wolfcamp and Bone Spring
type curves per Wood Mackenzie.
Eddy
Lea
Culberson
Jeff
Davis
Loving
Pecos
Reeves
Ward
Winkler
Daily Production
(BBL)
5-YR Delaware Basin Water Forecast(1)
MMBbls/d
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Powder River Basin Strategy and Overview
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Overview
Recent volume growth and future development activity may provide meaningful
gathering and processing expansion opportunities in 2H 2018 or early 2019
Powder River Basin is gaining traction as a very economic stacked play; Chesapeake
development and off-set producer activity provide growth potential for Crestwood
Stacked Pay and Large Inventory Offer High Growth Potential
$25/Bbl - $35/Bbl Breakeven
2,780 undrilled inventory
388,000 dedicated acres
CHK projects PRB production
of ~200 Mboe/d by 2022
2016/2017 delineation program proved
concept across acreage position
Source: Chesapeake Energy investor presentation dated 2/13/2018.
⢠Powder River Basin system
experiencing meaningful volume
growth due to multiple bench
production
⢠Crestwood and Williamsâs (50/50
JV) assets may reach capacity in
2H 2018 or early 2019
â Jackalope gathering system
capacity of 180 MMcf/d
â Buckinghorse plant processing
capacity of 120 MMcf/d
⢠Chesapeake Energy currently
operating three rigs with the
expectation of adding a fourth in
1Hâ18
â Turner drilling program offers
over 100% RORs
â Recent Turner tests:
2,886 Boe/d with 51% oil cut
2,560 Boe/d with 80% oil cut
1,700 Boe/d with 80% oil cut
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⢠Strategic 50/50 JV with Consolidated Edison
⢠FERC regulated storage and pipeline assets
located at center of prolific NE Marcellus
â 2.9 Bcf/d delivery capacity; over 180
miles of pipes
â 41 Bcf storage capacity
â 3.1 Bcf/d of deliverability and 5 Bcf/d of
supply access
⢠Near-term growth: JV Cash Flow
â Stagecoach generated ~$135MM
Adjusted EBITDA in 2017
â June 2018/2019: Cash flow distribution
steps to 40% and 50%, respectively
⢠Long-term growth potential:
â Evaluating incremental takeaway projects
out of the basin
â Pipeline constraints will continue in NE for
the next 10 years
â NE production needs an additional 3-5
Bcf/d of take-away capacity to catch up
with the available production
NE Marcellus is the most prolific US gas basin and best potential for demand growth;
Stagecoach is strategically positioned to capture growth opportunities
NE Marcellus Provides Long-Term Growth Potential
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Strategic Position in NE Natural Gas MarketStagecoach Overview
Stagecoach Assets
15
14
13
12
11
10
9
8
7
Bcf/d
NE Marcellus Gas Production Constrained in 2020+
Production â More Pipe
Production â Base Case
Production â Less Pipe
Pipeline Capacity (Base)
Pipeline Capacity (Less)
Pipeline Capacity (More)
Source: Northeast production data per BTU Analytics.
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⢠20
Balance Sheet Strength,
Disciplined Capital Allocation,
Accretive DCF Growth
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Self-Funded 2018 Capital Program
US Salt
Divestiture
Crestwood is committed to maintaining a strong balance sheet and
excess distribution coverage as it pursues organic growth projects
⢠Divested US Salt LLC, a non-core business in the MS&L segment, for
approximately $225 million
⢠Valuation is ~11x 2017E distributable cash flow
⢠Transaction closed December 1, 2017
Crestwood is self-funding its 2018 capital program to maximize project returns
and DCF/unit value creation
Retained DCF
Joint-Venture
Strategy
⢠Forecasted cash flow growth allows Crestwood to maintain
distribution coverage >1.2x and leverage <4.0x
⢠Crestwood will reinvest cash flow into accretive organic projects in
FY 2018
⢠Strategic joint-ventures minimize project risk and capital
commitments, while enhancing commercial opportunities:
â Delaware Basin: First Reserve and Shell Midstream (NYSE: SHLX)
â NE Marcellus: Consolidated Edison (NYSE:ED)
â Powder River Basin: Williams Partners (NYSE:WPZ)
1
2
3
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$0
$200
$400
$600
$800
2017 2018 2019 2020 2021 2022 2023 2024 2025
22
Strong Balance Sheet and Liquidity
⢠Top-tier leverage position
â YE 2017 leverage of 4.1x
â Current borrowing capacity ~$500 MM
â Substantial debt reduction over past 2-
years
⢠Committed to long-term leverage <4.0x once
growth projects come online
⢠No near-term maturities; attractive long-term
capital
⢠Committed to funding 2018 capital program
without accessing the public equity markets
â Excess cash re-invested into accretive
growth projects
â Substantial revolver capacity
â Additional potential non-core divestitures
Balance Sheet Positioned for Strength Current Capitalization
No Near-Term Debt Maturities
($MM)
RCF
6.25%
Notes
5.75%
Notes
Issue Price Yield
2023 102.75 5.3%
2025 101.00 5.5%
Crestwood is committed to maintaining a very strong balance sheet and financial
flexibility; Crestwood targets YE 2018 leverage of 4.0x-4.5x
Actuals Actuals Actuals
($ millions) 2015 2016 2017
Cash $1 $2 $1
Revolver $735 $77 $318
Senior Notes 1,800 1,475 1,200
Other Debt 9 6 8
Total Debt $2,544 $1,558 $1,526
Total Leverage Ratio 4.8x 3.7x 4.1x
Note: Senior note price and yield data per Bloomberg as of 2/16/2018.
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8.8x 8.9x
9.5x 9.6x
10.6x 10.9x
12.4x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
CEQP Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6
23
CEQP Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6
2018E Leverage Ratio <4.25x
2018E Coverage Ratio >1.25x
No IDRS
Self-Funded 2018E CAPEX
Significant Insider Ownership
Execution in 2018 to Drive Value Creation
2018E Price/DCF
2018E P/DCF peer average = 10.3x;
Implies >20% CEQP unit price upside to ~$34/unit
Source: DCF data provided by industry research dated 2/9/2018.
G&P Peers Include: AMID, DCP, ENBL, ENLK, MPLX and WES.
Note: Significant insider ownership defined as management and Board of
Directors common unit ownership over 5% of outstanding units.
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The Crestwood Investment Opportunity
24
Focused on aggressively executing growth opportunities while maintaining
financial strength
⢠SELF-FUNDED near-term gathering and processing growth opportunities in
the Bakken and Delaware Basin
⢠Long-term PRB and northeast Marcellus pipeline projects
In the meantimeâŚ
⢠Crestwood is well-positioned to deliver attractive yield to investors(1)
â Current Yield = 8.7%; Coverage Ratio = 1.4x; Leverage Ratio = 4.1x
⢠Diversified business mix and strong contract portfolio
⢠No incentive distribution rights
⢠Reversion to Peer Group / Alerian yield provides significant upside for units
Execution Drives Significant Upside Return Opportunity;
CASH FLOW PER UNIT GROWTH TO RESUME IN 2018
(1) Current yield data as of 2/16/2018. Coverage ratio and leverage ratio as of 12/31/2017.
26. Connections for Americaâs Energy
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Crestwoodâs Commitment to Excellence was
Recognized in 2017
Customer
Service
Community
Engagement
Ranked #1 in the EnergyPoint Research
Customer Satisfaction Survey for 2015-
2017
In 2017, Crestwood was recognized for its unwavering commitment to best
in class customer service, community engagement, environmental
stewardship and unitholder alignment
Unitholder
Alignment
Crestwood was awarded the NDPC Excellence
in Community Engagement Award for our
commitment to the communities where we
operate
~1/3rd common units owned by insiders;
Crestwood scored #1 in Wells Fargoâs
December 2017 midstream investor
alignment report(1)
Environmental
Stewardship Recognized by the EPA as a SmartWay
Partner, as a Company that demonstrates a
standard of operations that minimizes their
environmental footprint
Crestwoodâs culture of excellence positions the partnership to be a responsible
steward of capital and an attractive midstream investment
(1) Wells Fargo research report titled âThe Midstream Alignment Scorecard.â Published on
12/5/2017. Ranking based on unit ownership, governance , safety metrics, structure and
incentive compensation.
Customer Service
Unitholder Alignment Environmental Stewardship
Community Engagement
Customer
Service
Community
Engagement
Environmental
Stewardship
Unitholder
Alignment
27. Connections for Americaâs Energy
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0
50
100
150
200
250
300
350
400
Q3:15 Q4:15 Q1:16 Q2:16 Q3:16 Q4:16 Q1:17 Q2:17 Q3:17 Q4:17
GatheringVolumes(MMcf/d)
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
⢠Crestwood & BlueStone have 10-year
agreement
â Fixed-fee and percent of index fee
structure for both Natural Gas and
NGLs
â Contract structure provides significant
upside as commodity prices rebound
⢠BlueStone brought 7 DUCs online in the
first quarter 2017
⢠Active workover program designed to
eliminate system declines and modestly
grow volumes
⢠BlueStone evaluating new development
and refrac opportunities
Barnett Overview
27
BlueStoneâs workover activities and recent DUC completions offset natural volume
declines in 2017
Asset Overview Barnett Gathering Volume Growth
Increased volumes combined with fixed-fee/percent of index contract structure
drive cash flow outperformance
Natural Gas Prices Since 2016(1)
BlueStone Begins
System Reactivation
April 15th:
BlueStone
Agreement
(1) Source: EIA Henry Hub Natural Gas Spot Price.
2017 Workovers Offset
Natural Field Decline
28. Connections for Americaâs Energy
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⢠20-year, fixed-fee gathering and compression services w/
Antero Resources
⢠140,000 acreage dedication; System capacity of 875 MMcf/d
⢠100 MMcf/d compression services on AM gathering in Western
Area (90% utilized)
⢠MVCs through 2018 term; however, all current and future
cash flow reflective of actual throughput and rate (no cash
flow cliff)
⢠21 DUCs brought online in 2017
SW Marcellus Overview
28
Gathering volumes up 36% in 2017 as Antero completes DUC Inventory
Overview
Highlights
⢠~275 wells have been connected to Crestwoodâs system â No
dry holes
⢠Avg. 30D IP rate ~8.0 MMcf/d; Avg. EURs between 8â12 Bcf(1)
⢠800+ liquid-rich (>1,100 BTU) drilling locations and 1,000+
dry gas drilling locations remain
⢠Growing NGL processing at the Sherwood plant with increased
market takeaway capacity out of the basin
⢠Multiple large SW Marcellus operators hold acreage positions
contiguous to Crestwoodâs eastern AOD
East AOD
Western Area
Arsenal
Resources
EQT
Noble Energy
EQT
SWN
(1) Source: Wood Mackenzie.
200,000
250,000
300,000
350,000
400,000
450,000
500,000
550,000
600,000
J-16 F-16 M-16 A-16 M-16 J-16 J-16 A-16 S-16 O-16 N-16 D-16 J-17 F-17 M-17 A-17 M-17 J-17 J-17 A-17 S-17 O-17 N-17
Asset Map
Gathering Volumes Since FY 2016
21 DUCs in 2017 increased
daily volumes >150 MMcf/d
Well connections in 2017 highlight exceptional reservoir quality and significant upside
growth potential with incremental activity
Mcf/d
29. Connections for Americaâs Energy
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CEQP Non-GAAP Reconciliations
29
Expected 2018 Range
Low - High
Net income
Interest and debt expense, net
Depreciation, amortization and accretion
Unit-based compensation charges
Earnings from unconsolidated affiliates
Adjusted EBITDA from unconsolidated affiliates
Adjusted EBITDA
Cash interest expense(a)
Maintenance capital expenditures(b)
Adjusted EBITDA from unconsolidated affiliates
Distributable cash flow from unconsolidated affiliates
Cash distribution to preferred unitholders(c)
Distributable cash flow attributable to CEQP(d)
(110) - (115)
105 - 110
(d) Distributable cash flow is defined as Adjusted EBITDA, adjusted for cash interest expense, maintenance capital expenditures, income taxes, and
our proportionate share of our unconsolidated affiliates' distributable cash flow. 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 GAAP 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 companies.
$35 - $65
CRESTWOOD EQUITY PARTNERS LP
Full-Year 2018 Adjusted EBITDA and Distributable Cash Flow Guidance
Reconciliation to Net Income
(in millions, unaudited)
(a) Cash interest expense less amortization of deferred financing costs.
(b) M aintenance capital expenditures are defined as those capital expenditures which do not increase operating capacity or revenues from existing
levels.
(c) Includes cash distributions to preferred unitholders and Crestwood Niobrara preferred unit holders.
25
188
102-107
(75) - (80)
110 - 115
$390 - $420
$195 - $225
(75)
(95) - (100)
(15) - (20)