Crestwood Midstream Partners LP

Bank of America Merrill Lynch Leveraged Bank of America Merrill Lynch Leveraged
Finance Conference
December 4, 2013
Forward Looking Statements
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 Crestwood Midstream and Crestwood Equity 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 Midstreams or Crestwood Equitys financial condition, results of operations
and cash flows include, without limitation, the risks that the Crestwood Midstream and Crestwood Equity businesses will not be
integrated successfully or may take longer than anticipated; the possibility that expected synergies will not be realized, or will not
be realized within the expected timeframe; 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 Crestwood Midstream or Crestwood
Equity assets; failure or delays by customers in achieving expected production in their natural gas projects; competitive
conditions in the industry and their impact on the ability of Crestwood Midstream or Crestwood Equity to connect natural gas
supplies to Crestwood Midstream or Crestwood Equity gathering and processing assets or systems; actions or inactions taken or
non-performance by third parties, including suppliers, contractors, operators, processors, transporters and customers; the ability
of Crestwood Midstream or Crestwood Equity to consummate acquisitions, successfully integrate the acquired businesses,
2
of Crestwood Midstream or Crestwood Equity 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 Midstream or
Crestwood Equitys control; timely receipt of necessary government approvals and permits, the ability of Crestwood Midstream
or Crestwood Equity to control the costs of construction, including costs of materials, labor and right-of-way and other factors that
may impact either companys 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
Midstream and Crestwood Equitys filings with the U.S. Securities and Exchange Commission. You should read filings made by
Crestwood Midstream and Crestwood Equity with the U.S. Securities and Exchange Commission, including Annual Reports on
Form 10-K for the year ended December 31, 2012 and September 30, 2012, respectively, and the most recent Quarterly Reports
and Current Reports, for a more extensive list of factors that could affect results. Crestwood Midstream and Crestwood Equity do
not assume any obligation to update these forward-looking statements.
Merger Creates Unique Mid-Cap MLP
Crestwood Equity Partners LP
(NYSE: CEQP)
$2.7B Market Cap
185.5MM units outstanding
New Crestwoods unique position provides the scale and diversification of a
large-cap MLP with the growth potential of a small-cap MLP
Crestwood Holdings/First
Reserve/Management
~29% LP interest in CEQP
~11% LP interest in CMLP
Final step of the combination between Crestwood and
Inergy completed on October 7, 2013
Strategic benefits of merger in-tact
Portfolio of diversified US midstream assets located in
premier shale plays
Critical infrastructure providing the complete
wellhead-to-burner tip value chain of midstream
services
3
185.5MM units outstanding
Owns CMLP GP IDRs and ~4% CMLP
LP interest
NGL logistics and natural gas storage
Crestwood Midstream Partners L.P.
(NYSE: CMLP)
$3.9B Market Cap
186.4MM units outstanding
Natural gas gathering, processing,
treating and compression
Natural gas storage & transportation
Crude oil gathering, rail terminals and
storage + NGL storage
Mid-Cap MLP with combined enterprise value of ~$8.5B
Strong balance sheet: BB Stable / Ba3 Stable
Size and scale to attract and finance growth objectives
~$1.4B of new capital raised since Sept 2013 to fund
Arrow acquisition and 2014 capital plan
Stable, fee-based cash flows
Manageable backlog of low multiple new organic
projects will drive growth
Experienced management team and strong equity sponsor
Merger creates premier mid-cap MLP with asset
base in the industrys leading shale plays
Over 2 Bcf/d of natural gas and ~500,000 Bbls/d of
NGLs and crude oil handled
Recent acquisition of Arrow crude oil, gas, and water
gathering confirms merger thesis
Stable cash flows with ~84% margin from fixed-fee
and take-or-pay contracts
NE Storage & Transportation assets fully subscribed
with firm demand contracts
COLT Hub take-or-pay contracts
Marcellus minimum volume commitments
Key Investor Highlights
Positioning Crestwood for long-term stable growth to create stakeholder value
Marcellus minimum volume commitments
Minimal direct commodity risk taken
Strong financial profile
Demonstrated track record of prudent balance sheet
management
Size and scale provide enhanced ability to access wide
range of financing sources
Diversified portfolio of midstream assets offers
manageable near and long-term growth
Crude and liquids-focused growth strategy benefits
from robust long-term macro fundamentals
Bakken, Marcellus, PRB Niobrara, Permian basin
4
Diversified US Midstream Portfolio
Existing platform in every premier shale play
in North America provides cash flow diversity and creates
opportunity for optimization, organic expansion, and
strategic bolt-on M&A
Asset Summary
(1)
Natural Gas
1.3 Bcf/d natural gas transportation capacity
2.1+ Bcf/d gathering capacity
8 natural gas processing plants; 600+ MMcf/d
processing capacity
1,260+ miles of pipeline
~80 Bcf natural gas storage capacity
NGL & Crude Oil
NGL logistics business including trucks, terminals,
fractionation, NGL storage and marketing
110,000 BPD NGL trucking volumes
300 miles of crude and water gathering pipelines;
125,000 Bbl/d crude oil gathering capacity; 40,000
Bbl/d water gathering capacity
160,000 BPD crude oil rail terminal
5
Gathering and Processing
Greenfield Development Projects
Natural Gas Storage Facilities
NGL Facilities
Crude Oil Rail Facility
160,000 BPD crude oil rail terminal
Crude trucks, rail cars and marketing
(1) Includes announced expansion projects.
High Growth
Core Optimize
Core Stable
Cash Flow Stability and Visibility
Significant diversification provides
greater cash flow stability
Within the core operating segments,
10+ different assets with diversified
fundamental growth drivers each
generating at least $20MM of EBITDA
No single customer, asset or
business unit constituting more than
~15% of total cash flows
Significant gross margin supported by
2013E EBITDA Mix
Gathering &
Processing
40%
Storage &
Transportation
28%
NGL & Crude
Services
32%
Stagecoach
Barnett Rich
Marcellus
Inergy
Services
COLT
Hub
Barnett Dry
Marc I
Arrow
Midstream
Fayetteville
US Salt
Other
Firm Contracts
51%
Fixed-Fee
33%
Un-Contracted
16%
Significant gross margin supported by
long-term (take or pay and equivalent)
contracts
~51% of pro forma consolidated
2013E gross margin generated under
firm take-or-pay style contract
~84% margin fixed-fee (no direct
commodity price exposure)
No speculative commodity positions
2013E Margin Profile
6
Wellhead-to-Burner Tip Operations
Link New Shale Supply to Demand
Nat
Gasoline
Iso-Butane
Butane
Propane
Ethane
Gas Storage
NGL
Fractionation
NGL
Storage & NGL
Pipelines
Crude Gathering,
Trucks, Rail
& Pipelines
Crude Storage &
Terminals
Crude Oil
Refining
Storage
Barges &
Refined
Products
Pipelines
Mixed NGL
Pipeline &
Trucks
CO
2
Treating
Rich Gas
Gathering
Pipelines
Gas Processing
Dry Gas
Gathering
Pipelines
Intrastate
& Interstate
Pipelines
Intrastate &
Interstate
Pipelines
Serving Blue-Chip Customers Across the Value Chain
Denotes current services offerings and/or operational capacity
Serving Blue-Chip Customers Across the Value Chain
7
Focus Capital Investment High Return Assets
Focused on capital allocation to assets with highest growth and
return rates
Assets located in Bakken Shale, Marcellus Shale, PRB Niobrara
Shale, and Permian Basin
Bakken assets to become largest margin contributor in 2014
Marcellus assets benefit from another year of strong Antero growth
to become largest margin contributor in 2015
Focused on optimization through cross-selling services
Core Assets
High-Growth
$1.1B backlog over the next 5 years of identified organic projects drive growth and
returns; bolt on acquisitions and drop-downs from CEQP to supplement capital
investment when appropriate
NE gas storage and transportation strategically located to benefit
from new Marcellus gas supplies and growing NE gas demand
NGL logistics and crude services assets link new shale supplies to
markets; expandable with limited capital investment relative to
margin opportunities
Focused on cost reduction - limited allocation of incremental capital
Stable / mature assets at cyclical bottom with significant upside
potential
Dry gas gathering systems continue to make a meaningful margin
contribution today with significant leverage to higher gas prices
Core Assets
Optimization
Core Assets
Stable
8
71.0% LP
Interest
Disciplined Financial Objectives
Proven access to long-term capital and a balanced funding approach have kept
ahead of capital needs
Commitment to disciplined balance
sheet management
Balanced funding objectives for
capital deployment
$1.0B committed revolving credit
facility maturing in 2018 at CMLP
provides ample liquidity to meet
needs
~$1.5B of senior unsecured notes
Crestwood
Holdings
Crestwood Equity
Partners LP
100% Non-economic GP
Interest (Control)
+
29.0% LP Interest
Current Organizational Structure
CEQP Public
$400M Term Loan
85.1% LP
Interest
9
~$1.5B of senior unsecured notes
Targeted long-term leverage ratios
of 3.5x to 4.0x debt-to-EBITDA
Rigorous economic value added capital
investment process
Conservative approach to risk
management
Maintain fee-based cash flow
profile
Minimal direct commodity risk
Partners LP
(NYSE: CEQP)
Crestwood Midstream
Partners LP
(NYSE: CMLP)
CMLP Public
100% GP / IDR Interest
+
3.8% LP Interest
11.1% LP Interest
$1.0B Revolver
$1.45B Sr. Unsecured
Notes
$550M Revolver
CMLP Capitalization
Recent capital markets activity
positions balance sheet out in front
of 2014 capital plan
Raised ~$800 million of
common CMLP units,
including $200 million of
equity issued to seller in
connection with the Arrow
acquisition
As of September 30, 2013
($ in millions)
Legacy
NRGM
Legacy
CMLP
Pro Forma
As Adjusted
(1)
Cash 1.2 $ 5.7 $ - $
Legacy NRGM & CMLP revolving credit facilities 37.0 548.1 -
New CMLP revolving credit facility - - 256.1
6% senior unsecured notes due 2020 500.0 - 500.0
7.75% senior unsecured notes due 2019 - 350.0 350.0
6.25% senior unsecured notes due 2022 - - 600.0
Other debt - 1.3 1.3
Total Debt 537.0 $ 899.4 $ 1,707.4 $
Partners Capital 915.3 $ 915.3 $ 2,379.8 $
Total Capitalization 1,452.3 $ 1,814.7 $ 4,087.2 $
Debt / Adjusted EBITDA
(2)
4.8x
Pro Forma Capitalization
- - - -
$256
$350
$500
-
$600
$0
$100
$200
$300
$400
$500
$600
$700
2014 2015 2016 2017 2018 2019 2020 2021 2022
10
Issued $600 million of senior
unsecured notes
No near term debt maturity
Average maturity of >6 years
(1) As adjusted for the CMLP/NRGM merger, the net proceeds of ~$358 million from
issuance of 16.9 million common units, the closing of the Arrow Midstream acquisition,
and the issuance of $600 million of senior unsecured notes.
(2) Calculated in accordance with the New CMLP revolving credit facility. CMLP revolving
credit facility allows for a maximum debt-to-EBITDA as defined in the credit facility of
5.5x for a period of 270 days after a material acquisition.
Debt Maturity Profile
($ in millions)
Operations Overview
11
Operations Overview
Core Growth - Bakken Shale
Established strategic position in the core of one of the industrys
most prolific liquids-rich and crude oil plays
Original Oil in Place
Continued Production Growth (Bbls/d)
(2)
Expanding footprint
in the core of the
Bakken
Positioning Crestwood to be a full value chain
midstream services provider for the Bakken Shale
COLT Hub Crude Rail Facility - connects
premier East Coast and West Coast refiners
with growing Bakken Shale crude supplies
Arrow Crude Gathering System - adds >150,000
acres dedicated with >1,000 total potential
drilling locations in the core of the core of the
Bakken Shale
Attractive Producer Economics Drive
(1)
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12
Continued Production Growth (Bbls/d)
(2)
Crestwoods Bakken platform
to service ~18% of current
Bakken production
(1) Source: Cawley, Gillespie & Associates.
(2) Source: North Dakota Department of Mineral Resources
Attractive Producer Economics Drive
(1)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
$20.00 $40.00 $60.00 $80.00 $100.00 $120.00 $140.00
R
a
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e

o
f

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%
Oil Price ($/Bbl)
ROR
Arrow Midstream Acquisition
$750MM Arrow Midstream acquisition funded with ~$540MM of equity prior to closing
on November 8, 2013
Located on the Fort Berthold Reservation
Long term gathering contracts with committed
Bakken Shale producers: WPX, QEP, XTO, Halcon
and Kodiak
460 miles of gathering pipeline systems
150 miles of crude oil gathering lines (125,000
Bbl/d of throughput capacity by 2015)
160 miles of natural gas gathering lines (100
MMcf/d of throughput capacity by 2015)
Asset Description Asset Map
13
150 miles of water gathering lines (40,000 Bbl/d of
throughput capacity by 2015)
Multiple crude pipeline interconnects (Tesoro,
Hiland and Bakken Link) and natural gas pipeline
and processing connect with OneOk
Fully-automated truck loading facilities and crude
oil storage capacity at CDP
Substantial gathering system expansion underway
Commissioning 5 new compressor stations to
capture flared associated gas in 4Q 2013
9-10 rigs operating in area to drive 2014 volumes
Operations: Dunn and McKenzie Counties, ND
Volumes: ~ 50,000 MBbls/d crude oil; ~15 MMcf/d
of gas; ~ 8,500 MBbls/d of water
Wells Connected: ~235 wells
COLT
Connector
Dry Fork
Terminal
COLT
Terminal
Enbridge
Pipeline
BNSF
Mainline
Beaver
Lodge
Synergy Potential
Arrow system is ~ 60 miles southeast of CMLPs
COLT Hub crude rail and pipeline terminal
COLT Hub is North Dakotas most active crude by rail
facility; expansion to be completed in 1Q 2014
160,000 BPD unit train capacity; 1.2 MMBls
crude oil storage; 105,000 BPD pipeline
capacity; 95,000 BPD truck rack unloading
capacity
Integrating the Bakken Footprint
Arrows CDP is a strategic liquidity hub south of the Missouri river, which
complements CMLPs existing COLT Hub
Tesoro Corporation
Belle Fourche Pipeline Co.
Enbridge Pipelines North Dakota Inc.
Crude Pipelines
BNSF Railroad
130,000 BPD rail loading take or pay contracts
with refiners (70% of flow to Pacific NW)
Direct connectivity between Arrow and COLT Hub
through Hiland and Tesoro Pipelines
Improves pricing and sales optionality for Arrow
producers
Improves access to new wellhead supplies for
COLT customers
14
Arrow
System
Tesoro
Pipeline
Antero Resources/Crestwood Agreements
20-year, 100% fixed-fee contract with annual
escalators for low pressure natural gas
gathering and compression services
~136,000 net acres area of dedication
7 year East AOD minimum volume
commitments underpins Crestwoods capital
outlay; 7 year ROFO on Anteros Western Area
Antero Resources 2013 Update
Western Area
Core Growth - Marcellus Shale
Growing rich gas gathering and compression assets in the core Southwest portion of the Marcellus Growing rich gas gathering and compression assets in the core Southwest portion of the Marcellus
Victoria
15 drilling rigs operating in WV; >$1.2B of D&C
capex in WV Marcellus
Signed contracts for 1.0 Bcf/d processing and
1.3 Bcf/d pipeline take-away capacity to support
WV drilling program
Completed Largest E&P IPO ever in the US
markets raising ~$1.6B in gross proceeds
Accelerating Antero development plans drive
significant Crestwood 2013/14 system growth
Exit 2013 at ~ 500 MMcf/d (+25% YTD)
Exit 2014 at ~ 750 MMcf/d (+50% YTD)
East AOD
Existing pipeline
2013 Pipelines
Planned build out 2014-2016
3
rd
Party take away
Area of Dedication (AOD)
CMM compressor stations
3
rd
Party comp stations
MWE Sherwood Plant
West Union
15
Greenbrier Area
Marcellus Projects Update
Recently completed the Zinnia 20 Trunkline
integrating the Greenbrier Area with the Eastern
AOD system
14 laterals under construction or recently
completed connecting multiple Antero well pads
2H 2013 to early 1Q 2014 in-service dates
11 new laterals in early planning stages
2H 2014 to early 1Q 2015 in-service dates
Recently completed the West Union Phases 1 & 2 Recently completed the West Union Phases 1 & 2
(Western Area) and Morgan Phase 1 (East AOD)
Stations adding 184 MMcfd of compression
capacity
5 additional compression projects totaling 263
MMcfd under construction and expected to come
on line over next 6 months
New 120 MMcfd Banner station plus 2 additional
compressor stations on the planning horizon over
remaining 18 month Antero development period
16
PRB Niobrara Shale 3Q 2013 Acquisitions
Add to Rich Gas Asset Portfolio
CHK/RKI Leasehold
CHK Operated Rigs
Industry Rigs
Non-Operated Rigs
Acquired 50% interest in Jackalope Gas Gathering
System (JGGS) on 7/19/2013 for ~$108 MM
Rich gas gathering and processing for Chesapeake
(CHK), RKI (First Reserve affiliate) and CNOOC on
300,000+ acres
111 miles of pipeline / 15,600 HP of compression; 51
wells currently connected to JGGS system
Initial 120 MMcf/d processing plant in-service 3Q 2014
Acquisition financed by $150 MM preferred equity with
Integrated gathering, processing NGL pipeline and rail potential In the Powder River Basin (PRB)
Jackalope AMI (311,000 acres)
Acquisition financed by $150 MM preferred equity with
GEFS
Acquired 50% interest in Enserco Crude Oil Rail
Terminal (Powder River Basin Industrial Complex)
on 9/4/2013 for $22.5 MM
Early stage crude oil rail terminal (similar start up to
COLT HUB)
Anchored by long term contract with CHK from JGGS
area
Expanding for crude by rail unit-train service to 20,000
BPD in 1Q 2014
17
Jackalope Area (Converse County, WY) Development Activity
9 CHK operated rigs active within Jackalope AMI (deep Niobrara and Turner rich gas targets)
3 RKI operated rigs in Jackalope area (shallow Parkman and Sussex crude oil targets)
Substantial CHK/RKI acreage position (~750,000) offers long term growth potential for JGGS and PRBIC
~$480 MM drilling carry from CNOOC drives CHK activity in Jackalope AMI through 2014
~250 total well connects expected by year-end 2014; ~1,000+ drilling locations (>10 year drilling inventory)
Niobrara Shale - Strong Producer
Economics Accelerates Supply Growth
$72 $72
$81
$91
$80
$90
$100
Breakeven Prices to Earn 10% Single Well IRR
18
Source: Tudor Pickering Research
$34
$42
$43
$44
$47
$48
$50 $50
$52 $52 $53 $53
$56 $56
$59
$60 $60 $61 $61 $61
$63
$64
$68 $69
$72 $72
$0
$10
$20
$30
$40
$50
$60
$70
$80
Breakeven Prices to Earn 10% Single Well IRR
Core Optimization - NE Storage &
Transportation
Storage Contract Profile
NE Assets are fully subscribed through March 31, 2014
Significant re-contracting progress made during 3Q 2013:
NE 2014 storage renewal capacity largely re-contracted at existing 18/MSQ rates; latest Stagecoach
capacity renewed at 25/MSQ showing strong NE market demand for multi-turn storage
100 MMcfd of MARC I capacity (originally turned back due to project delays) marketed through end of 1Q
2015 at 12/Dthd; Marc I fully subscribed and evaluating an expansion project
Facility
Commodity
Stored
Percentage
Contractually
Committed
Weighted Avg.
Maturity (Year)
Working Storage
Capacity
(1) Stagecoach and Thomas Corners are 100% contracted based on operational capacity.
(2) Steuben facility granted market-based rate structure beginning April 1, 2013.
Transportation Contract Profile
Transporation Asset
Commodity
Transported
Percentage
Contractually
Committed
Weighted Avg.
Maturity (Year)
North-South Facilities Natural Gas 325.0 MMcf/d 100% 2016
MARC I Pipeline Natural Gas 550.0 MMcf/d 100% 2021
East Pipeline Natural Gas 30.0 MMcf/d 100% 2021
Transportation
Capacity
Facility Stored Committed Maturity (Year)
Stagecoach
(1)
Natural Gas 26.3 Bcf 100% 2016
Thomas Corners
(1)
Natural Gas 7.0 Bcf 100% 2015
Seneca Lake Natural Gas 1.5 Bcf 100% 2016
Steuben
(2)
Natural Gas 6.2 Bcf 100% 2017
Tres Palacios
(3)
Natural Gas 38.4 Bcf 64% 2014
Capacity
19
Core Optimization Crude Services and NGL
Facilities & Logistics
Key NGL Facilities and Assets
Nationwide, Crestwood is handling over 500,000 BPD of NGLs and Crude Oil through our facilities and
transportation assets
~180,000 BPD of NGLs through NGL facilities and transport assets
~186,000 BPD of NGLs controlled by Crestwoods supply and logistics business
~160,000 BPD crude through COLT Hub and Arrow Midstream
Truck & Rail Car Fleet 500 trailers (450 NGL) and 1,100 rail cars
largely servicing the Marcellus and Utica Shale regions
West Coast Assets 25,000 BPD fractionation, isomerization,
storage and terminaling
Bath/NE Storage 1.7 MMBbl propane and butane storage
cavern
South Jersey Terminal rail to truck serving refiners and
blenders in Eastern US markets
Seymour, Indiana proprietary NGL marketing terminal on
Enterprises Teppco Pipeline with 500,000 Bbl storage cavern
Refiner Services includes keep dry agreements, butane
blending services, emerging crude marketing business
Producer Services Exclusive NGL marketer for Williams and
Total in Marcellus/Utica region
US Salt produces ~400,000 tons per year; provides access to
growing NE storage cavern space
20
Historical Adjusted EBITDA
(1)
$132
$155
$200
$250
$300
$350
($MMs)
CMLP
Combined Legacy CMLP and Legacy NRGM
have generated 103% growth in Adjusted
EBITDA since 2010
$750 MM Arrow acquisition completed in 4Q
2013 at 10-10.5x multiple will drive significant
EBITDA growth in 2014
$1.1B backlog of contracted and identified
organic capital opportunities drive significant
growth going forward
Past Performance Drives Growth Expectations
21
$90
$100
$125
$184
$77
$110
$-
$50
$100
$150
2010 2011 2012 3Q 2013
Annualized
NRGM CMLP
Positioning CEQP as pure-play GP when
timing for drop-downs to CMLP is appropriate
Future growth primarily driven by CMLP IDRs
CEQP
growth going forward
Larger post merger balance sheet and
improving credit metrics allow for
consideration of larger acquisitions
(1) Adjusted EBITDA for Legacy CMLP and Legacy NRGM based on public filings. The quarter ending December 31, 2013, will mark the first quarter end following completion of the
Crestwood / Inergy Merger, which closed on October 7, 2013, and as such, will be the first quarter in which CMLP will report fully consolidated results.
Merger creates premier mid-cap MLP with asset
base in the industrys leading shale plays
Over 2 Bcf/d of natural gas and ~500,000 Bbls/d of
NGLs and crude oil handled
Recent acquisition of Arrow crude oil, gas, and water
gathering confirms merger thesis
Stable cash flows with ~84% margin from fixed-fee
and take-or-pay contracts
NE Storage & Transportation assets fully subscribed
with firm demand contracts
COLT Hub take-or-pay contracts
Marcellus minimum volume commitments
Key Investor Highlights
Positioning Crestwood for long-term stable growth to create stakeholder value
Marcellus minimum volume commitments
Minimal direct commodity risk taken
Strong financial profile
Demonstrated track record of prudent balance sheet
management
Size and scale provide enhanced ability to access wide
range of financing sources
Diversified portfolio of midstream assets offers
manageable near and long-term growth
Crude and liquids-focused growth strategy benefits
from robust long-term macro fundamentals
Bakken, Marcellus, PRB Niobrara, Permian basin
22
Appendix
23
Appendix
Legacy Crestwood Midstream Partners LP
Non-GAAP Reconciliations
Three Months
Year Ended December 31, Ended
2010 2011 2012 9/30/2013
(in MMs) (audited) (audited) (audited) (unaudited)
Net income 34.9 $ 45.0 $ 38.9 $ 6.3 $
Depreciation and amortization 22.4 33.8 51.9 14.5
Interest expense, net 13.5 27.6 35.8 11.7
Income tax expense (benefit) (0.6) 1.3 1.2 0.3
EBITDA 70.2 $ 107.7 $ 127.8 $ 32.8 $
Loss from unconsolidate affiliate - - - 0.4
EBITDA from unconsolidated affiliate - - - 0.6
24
Legacy Crestwood Midstream Partners LP defines Adjusted EBITDA as net income adjusted for depreciation,
amortization and accretion expense, interest expense, and expenses related to certain significant items, including but
not limited to items such as gains/losses on property, plant and equipment and significant transaction related
expenses. Adjusted EBITDA is commonly used as a supplemental financial measure by senior management and by
external users of our financial statements, such as investors, research analysts and rating agencies, to assess the
financial performance of our assets without regard to financing methods, capital structures or historical cost basis.
EBITDA from unconsolidated affiliate - - - 0.6
Gain from property, plant and equipment - (1.1) - (4.4)
Goodwill impairment - - - 4.1
Expenses associated with significant items 6.3 3.4 4.7 5.2
Adjusted EBITDA 76.5 $ 110.0 $ 132.5 $ 38.7 $
Legacy Inergy Midstream, L.P. Non-GAAP
Reconciliations
Three Months
FYE Sept. 30 Ended
2010
(1)
2011
(1)
2012 9/30/2013
(in MMs) (audited) (audited) (audited) (unaudited)
Net income 43.2 $ 53.5 $ 65.7 $ (1.0) $
Depreciation and amortization 42.4 43.9 50.5 25.2
Income tax expense - - - 0.1
Interest expense, net - - 1.8 8.5
EBITDA 85.6 $ 97.4 $ 118.0 $ 32.8 $
Long-term incentive and equity compensation expense 3.5 1.8 6.5 4.1
Loss on disposal of assets 0.9 - - -
Reimbursement of certain costs Crestwood Equity Partners LP - - - 5.5
25
Legacy Inergy Midstream, L.P. defines Adjusted EBITDA as net income adjusted for depreciation and amortization expense,
interest expense and certain significant expenses, including but not limited to items such as long-term incentive and equity
compensation expense, gains/losses on disposal of assets, reimbursement of certain costs by Crestwood Equity Partners
LP (formerly Inergy, L.P.) and transaction related expenses. Adjusted EBITDA is commonly used as a supplemental
financial measure by senior management and by external users of our financial statements, such as investors, research
analysts and rating agencies, to assess the financial performance of our assets without regard to financing methods, capital
structures or historical cost basis.
(1) On May 14, 2012, Legacy NRGM acquired 100% of the membership interests in US Salt from Crestwood Equity Partners LP, formerly Inergy, L.P. (US Salt
Acquisition). The US Salt Acquisition is reflected in Legacy NRGMs consolidated financial statements based on the historical values, and periods prior to the
acquisition have been retrospectively adjusted to include the historical balances of US Salt. This accounting treatment is required as the transaction is amongst
entities under common control.
Reimbursement of certain costs Crestwood Equity Partners LP - - - 5.5
Transaction costs 0.2 0.4 0.7 3.5
Adjusted EBITDA 90.2 $ 99.6 $ 125.2 $ 45.9 $