Crestwood Equity Partners LP [CEQP] Filings

10-Q 1 ceqp-20220930.htm 10-Q ceqp-20220930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from to .


(Exact name of registrant as specified in its charter)	Commission file number	State or other jurisdiction of incorporation or organization	(I.R.S. Employer Identification No.)
Crestwood Equity Partners LP	001-34664	Delaware	43-1918951
Crestwood Midstream Partners LP	001-35377	Delaware	20-1647837

811 Main Street

Suite 3400

Houston

Texas

77002

(Address of principal executive offices)

(Zip code)

(832) 519-2200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


	Title of each class	Trading Symbol	Name of each exchange on which registered
Crestwood Equity Partners LP	Common Units representing limited partnership interests	CEQP	New York Stock Exchange
Crestwood Equity Partners LP	Preferred Units representing limited partnership interests	CEQP-P	New York Stock Exchange
Crestwood Midstream Partners LP	None	None	None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Crestwood Equity Partners LP

Yes

☒

☐

Crestwood Midstream Partners LP

Yes

☒

☐

(Explanatory Note: Crestwood Midstream Partners LP is currently a voluntary filer and is not subject to the filing requirements of the Securities Exchange Act of 1934. Although not subject to these filing requirements, Crestwood Midstream Partners LP has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months.)

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Crestwood Equity Partners LP

Yes

☒

☐

Crestwood Midstream Partners LP

Yes

☒

☐

Table of Contents

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Crestwood Equity Partners LP

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

Crestwood Midstream Partners LP

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.


Crestwood Equity Partners LP						☐
Crestwood Midstream Partners LP						☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Crestwood Equity Partners LP

Yes

☐

☒

Crestwood Midstream Partners LP

Yes

☐

☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date (October 28, 2022).



Crestwood Equity Partners LP						104,652,379
Crestwood Midstream Partners LP						None

Crestwood Midstream Partners LP, as a wholly-owned subsidiary of a reporting company, meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this report with the reduced disclosure format as permitted by such instruction.

Table of Contents

CRESTWOOD EQUITY PARTNERS LP

CRESTWOOD MIDSTREAM PARTNERS LP

INDEX TO FORM 10-Q


			Page
Part I – Financial Information

Item 1. Financial Statements (Unaudited):

Crestwood Equity Partners LP

Consolidated Balance Sheets			4

Consolidated Statements of Operations			5

Consolidated Statements of Partners’ Capital			6

Consolidated Statements of Cash Flows			8

Crestwood Midstream Partners LP

Consolidated Balance Sheets			9

Consolidated Statements of Operations			10

Consolidated Statements of Partners’ Capital			11

Consolidated Statements of Cash Flows			12

Notes to Consolidated Financial Statements			13

Note 1. Organization and Business Description			13

Note 2. Basis of Presentation and Summary of Significant Accounting Policies			13

Note 3. Acquisition s and Divestitures			14

Note 4. Certain Balance Sheet Information			19

Note 5. Investments in Unconsolidated Affiliates			20

Note 6. Risk Management			21

Note 7. Fair Value Measurements			22

Note 8. Long-Term Debt			24

Note 9. Commitments and Contingencies			26

Note 10. Leases			27

Note 11. Partners’ Capital and Non-Controlling Partner			28

Note 12. Earnings Per Limited Partner Unit			30

Note 13. Segments			31

Note 14. Revenues			34

Note 15. Related Party Transactions			39



Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			41

Item 3. Quantitative and Qualitative Disclosures About Market Risk			53

Item 4. Controls and Procedures			53

Part II – Other Information

Item 1. Legal Proceedings			55

Item 1A. Risk Factors			55

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			55

Item 3. Defaults Upon Senior Securities			55

Item 4. Mine Safety Disclosures			55

Item 5. Other Information			55

Item 6. Exhibits			56

Signature			58

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

CRESTWOOD EQUITY PARTNERS LP

CONSOLIDATED BALANCE SHEETS

(in millions, except unit information)


	September 30, 2022		December 31, 2021
	(unaudited)
Assets
Current assets:
Cash	$	6.4	$	13.3

Accounts receivable, less allowance for doubtful accounts of $0.6 million at both September 30, 2022 and December 31, 2021	479.8		378.0
Inventory	159.1		156.5
Assets from price risk management activities	112.7		42.1
Assets held for sale, net	205.7		—
Prepaid expenses and other current assets	9.2		14.8
Total current assets	972.9		604.7
Property, plant and equipment	5,141.4		3,771.5
Less: accumulated depreciation	752.1		992.1
Property, plant and equipment, net	4,389.3		2,779.4
Intangible assets	1,420.2		1,126.1
Less: accumulated amortization	285.1		393.2
Intangible assets, net	1,135.1		732.9
Goodwill	251.3		138.6
Operating lease right-of-use assets, net	18.6		27.4
Investments in unconsolidated affiliates	121.4		155.8
Other non-current assets	10.8		6.9
Total assets	$	6,899.4	$	4,445.7

Liabilities and capital
Current liabilities:
Accounts payable	$	386.2	$	336.5
Accrued expenses and other liabilities	204.5		147.1
Liabilities from price risk management activities	36.9		114.6

Current portion of long-term debt	—		0.2
Total current liabilities	627.6		598.4
Long-term debt, less current portion	3,570.0		2,052.1

Other long-term liabilities	325.7		258.7
Deferred income taxes	3.5		2.3
Total liabilities	4,526.8		2,911.5
Commitments and contingencies (Note 9)
Interest of non-controlling partner in subsidiary	434.4		434.6
Crestwood Equity Partners LP partners’ capital (104,651,317 and 62,991,511 common units issued and outstanding at September 30, 2022 and December 31, 2021)	1,326.2		487.6
Preferred units (71,257,445 units issued and outstanding at both September 30, 2022 and December 31, 2021)	612.0		612.0
Total partners’ capital	1,938.2		1,099.6
Total liabilities and capital	$	6,899.4	$	4,445.7

See accompanying notes.

Table of Contents


CRESTWOOD EQUITY PARTNERS LP CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per unit data) (unaudited)
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Revenues:
Product revenues	$	1,332.8	$	1,120.8	$	3,938.3	$	2,872.1
Product revenues - related party (Note 15)	83.2		6.5		222.7		24.2
Service revenues	92.4		98.4		286.8		291.3
Service revenues - related party (Note 15)	57.6		0.6		150.0		1.0
Total revenues	1,566.0		1,226.3		4,597.8		3,188.6

Costs of product/services sold (exclusive of items shown separately below):
Product costs	1,228.6		1,060.2		3,613.4		2,595.8
Product costs - related party (Note 15)	51.3		34.8		232.9		101.3
Service costs	6.9		4.3		18.1		13.2
Total costs of products/services sold	1,286.8		1,099.3		3,864.4		2,710.3

Operating expenses and other:
Operations and maintenance	55.0		31.6		144.0		90.2
General and administrative	33.9		25.9		103.8		67.4
Depreciation, amortization and accretion	86.9		64.6		242.3		182.6
Loss on long-lived assets, net	175.9		18.5		186.9		19.6
Gain on acquisition	(75.3)		—		(75.3)		—

	276.4		140.6		601.7		359.8
Operating income (loss)	2.8		(13.6)		131.7		118.5
Earnings (loss) from unconsolidated affiliates, net	3.2		4.9		12.2		(125.9)
Interest and debt expense, net	(47.6)		(30.9)		(123.8)		(102.0)
Loss on modification/extinguishment of debt	—		—		—		(6.7)
Other income, net	—		0.1		0.2		0.2
Income (loss) before income taxes	(41.6)		(39.5)		20.3		(115.9)
Provision for income taxes	(1.4)		(0.1)		(1.7)		(0.1)
Net income (loss)	(43.0)		(39.6)		18.6		(116.0)
Net income attributable to non-controlling partner	10.3		10.3		30.8		30.7
Net loss attributable to Crestwood Equity Partners LP	(53.3)		(49.9)		(12.2)		(146.7)
Net income attributable to preferred units	15.0		15.0		45.0		45.0
Net loss attributable to partners	$	(68.3)	$	(64.9)	$	(57.2)	$	(191.7)

Net loss per limited partner unit: (Note 12)
Basic and Diluted	$	(0.64)	$	(1.03)	$	(0.59)	$	(2.88)

Weighted-average limited partners’ units outstanding:


Basic and Diluted	107.1		62.9		97.1		66.6

See accompanying notes.

Table of Contents

CRESTWOOD EQUITY PARTNERS LP

CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

(in millions)

(unaudited)


	Preferred			Common
	Units	Capital		Units	Capital		Total Partners’ Capital
Balance at December 31, 2021	71.3	$	612.0	63.0	$	487.6	$	1,099.6
Distributions to partners	—	(15.0)		—	(60.9)		(75.9)
Issuance of common units (Note 3)	—	—		33.8	930.0		930.0
Unit-based compensation charges	—	—		1.6	13.0		13.0
Taxes paid for unit-based compensation vesting	—	—		(0.5)	(14.9)		(14.9)
Other	—	—		0.1	2.2		2.2
Net income (loss)	—	15.0		—	(3.0)		12.0
Balance at March 31, 2022	71.3	612.0		98.0	1,354.0		1,966.0
Distributions to partners	—	(15.0)		—	(64.2)		(79.2)
Unit-based compensation charges	—	—		—	8.6		8.6
Taxes paid for unit-based compensation vesting	—	—		—	(0.7)		(0.7)
Other	—	—		—	(0.4)		(0.4)
Net income	—	15.0		—	14.1		29.1
Balance at June 30, 2022	71.3	612.0		98.0	1,311.4		1,923.4
Distributions to partners	—	(15.0)		—	(71.6)		(86.6)
Issuance of common units (Note 3)	—	—		11.3	270.8		270.8
Purchase of common units (Note 11)	—	—		—	(123.7)		(123.7)
Retirement of common units (Note 11)	—	—		(4.6)	—		—
Unit-based compensation charges	—	—		—	8.0		8.0
Taxes paid for unit-based compensation vesting	—	—		—	(0.2)		(0.2)
Other	—	—		—	(0.2)		(0.2)
Net income (loss)	—	15.0		—	(68.3)		(53.3)
Balance at September 30, 2022	71.3	$	612.0	104.7	$	1,326.2	$	1,938.2

Table of Contents

CRESTWOOD EQUITY PARTNERS LP

CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL (continued)

(in millions)

(unaudited)


	Preferred			Partners
	Units	Capital		Common Units	Subordinated Units	Capital		Total Partners’ Capital
Balance at December 31, 2020	71.3	$	612.0	73.6	0.4	$	1,043.4	$	1,655.4
Crestwood Holdings Transactions (Note 11)	—	—		—	—	(273.2)		(273.2)
Retirement of units (Note 11)	—	—		(11.5)	(0.4)	—		—
Distributions to partners	—	(15.0)		—	—	(46.4)		(61.4)
Unit-based compensation charges	—	—		1.1	—	3.7		3.7
Taxes paid for unit-based compensation vesting	—	—		(0.4)	—	(8.1)		(8.1)
Other	—	—		—	—	(0.4)		(0.4)
Net income (loss)	—	15.0		—	—	(63.4)		(48.4)
Balance at March 31, 2021	71.3	612.0		62.8	—	655.6		1,267.6
Distributions to partners	—	(15.0)		—	—	(39.3)		(54.3)
Unit-based compensation charges	—	—		—	—	7.6		7.6
Taxes paid for unit-based compensation vesting	—	—		—	—	(0.1)		(0.1)
Other	—	—		—	—	(0.3)		(0.3)
Net income (loss)	—	15.0		—	—	(63.4)		(48.4)
Balance at June 30, 2021	71.3	612.0		62.8	—	560.1		1,172.1
Distributions to partners	—	(15.0)		—	—	(39.3)		(54.3)
Unit-based compensation charges	—	—		0.1	—	9.6		9.6
Taxes paid for unit-based compensation vesting	—	—		—	—	(0.1)		(0.1)
Other	—	—		—	—	(1.1)		(1.1)
Net income (loss)	—

Crestwood Equity Partners LP [CEQP] Filings
Crestwood Equity Partners LP [CEQP-P] Filings
10-Q	[2022-11-03]
10-Q	[2022-07-28]
10-Q	[2022-04-28]
10-K	[2022-02-28]
10-Q	[2021-10-28]
10-Q	[2021-07-29]
10-Q	[2021-04-30]
10-K	[2021-02-26]
10-Q	[2020-10-29]
10-Q	[2020-08-06]
10-Q	[2020-05-07]
10-K	[2020-02-21]
10-Q	[2019-10-31]
10-Q	[2019-08-02]
10-Q	[2019-05-02]
10-K	[2019-02-22]
10-Q	[2018-11-01]
10-Q	[2018-08-02]
10-Q	[2018-05-03]
10-K	[2018-02-26]
10-Q	[2017-11-03]
10-Q	[2017-08-04]
10-Q	[2017-05-04]
10-K	[2017-02-27]
10-Q	[2016-11-04]
10-Q	[2016-08-04]
10-Q	[2016-05-06]
10-K	[2016-02-29]
10-Q	[2015-11-09]
10-Q	[2015-08-07]
10-Q	[2015-05-07]
10-K	[2015-03-02]
10-Q	[2014-11-07]
10-Q	[2014-08-08]
10-Q	[2014-05-08]
10-K	[2014-02-28]
10-Q	[2013-11-08]
10-Q	[2013-08-08]
10-Q	[2013-05-08]
10-Q	[2013-02-06]
10-K	[2012-11-21]
10-Q	[2012-08-03]
10-Q	[2012-05-03]
10-Q	[2012-02-01]

Crestwood Equity Partners LP [CEQP] Filings

Crestwood Equity Partners LP [CEQP-P] Filings