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Investor Presentation August 2012
Forward Looking Statements
This presentation contains forward-looking statements and projections, made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, regarding future events, occurrences, circumstances, activities, performance, outcomes and results of Crestwood Midstream Partners LP (“Crestwood” or “CMLP”). 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. However, a variety of factors could cause actual results to materially differ from Crestwood’s current expectations in financial condition, results of operations and cash flows including, without limitation, changes in general economic conditions; fluctuations in natural gas 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; 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 acquired businesses, and realize any cost savings and other synergies from any acquisition; fluctuations in the value of certain of our assets and liabilities; 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 rights-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; and other factors disclosed in Crestwood’s filings with the Securities and Exchange Commission. The forward-looking statements included in this presentation are made only as of the date of this presentation, and we undertake no obligation to update any of these forward-looking statements to reflect new information, future events or circumstances except to the extent required by applicable law.
2
Key Investment Considerations First Reserve and Crestwood Management own 100% of the
General Partner and 41% of the outstanding LP units Raised ~$1.7 billion and invested ~$1.6 billion over past 18
months to create Crestwood’s operating platform Distribution growth of 19% since the acquisition of Quicksilver
Gas Services (1)
6 acquisitions in leading unconventional plays (Marcellus, Granite Wash, Barnett, Avalon, Fayetteville, Haynesville)
Long term contracts with top-tier shale producers (Antero, BHP Billiton, BP, Chesapeake, Devon, Exxon Mobil, Quicksilver)
95% fixed-fee portfolio – stable cash flows
Field services acquisitions established CMLP’s initial platform Now focused on bolt-on acquisitions with operating synergies Will evaluate value chain acquisitions to diversify cash flows Building experienced business development team to generate
greenfield infrastructure investment opportunities that offer better return potential than acquisitions at current valuations
Established Field Services
Platform
Evolving Growth Strategy
Strong GP/LP Alignment Of Interest
3
(1) 4th quarter 2010 through 2nd quarter 2012
Crestwood Midstream Partners LP
(NYSE: CMLP)
Enterprise Value: $2.1 Bn
42% LP/GP
Public and Class C
Unit holders
Crestwood Holdings LLC
First Reserve and Management
58% LP
Strong GP/LP Alignment of Interest
Fayetteville Shale
CMM Marcellus
Shale
Granite Wash
Haynesville Shale
Barnett Shale
65% Interest
Avalon Shale
4
Barnett Shale Rich Dry
35% Interest
First Reserve and Management have invested $600MM+ in equity capital to support CMLP growth
Phase I: M&A Drop-Downs Continued equity support from First
Reserve for early stage, high-growth acquisitions
CMM, our Marcellus Shale joint venture, provides model
Phase II: Greenfield Development New greenfield development team
aggressively chasing opportunities Projects financed outside CMLP with
equity capital from First Reserve and other private investors
Drop-Down to CMLP once in-service and generating cash flow
Continued Equity Support from Our General Partner
Established Field Services Platform
Avalon Shale
Granite Wash
13,000+ acres; growing
rich-gas play
55,000 acres; emerging
liquids-rich area
Fayetteville Shale
140,000+ acres; 10-20 year
contracts; 55% developed
Barnett Shale
20,000 acres; 5-10 year contracts;
HBP phase
Haynesville Shale
100,000+ acres; 15 year contracts; 10-20% developed
127,000+ acres; 20 year contracts; 7-year minimum volume contract
Marcellus Shale
Key Operating Statistics (1)
Miles of Pipeline 830
Processing Plants 5
Compression HP (000’s) 226
Gathering Volume (MMcf/d) 945
Processing Volume (MMcf/d) 235
(1) As of 8/15/12 Pro Forma for the pending Devon Acquisition
5
Evolving Growth Strategy M&A strategy focused exclusively on high-growth midstream assets at the wellhead faces
near-term challenges
Competitive landscape and abundant access to capital continues to support “blow-out” asset valuations
More competitive economics across the value chain and from bolt-on transactions where built-in synergies provide competitive advantage
Producer demand for required infrastructure creating significant greenfield opportunity
Drilling activity focused on unconventional crude oil and rich gas plays -- significant demand for infrastructure to transport associated natural gas and NGLs
$200+ billion in potential midstream infrastructure required to support the anticipated upstream development of unconventional assets over the next 2-3 decades
Talented managers currently in the market
Primarily the result of the Kinder Morgan / El Paso transaction Abundance of private capital currently targeting midstream infrastructure
The opportunity for investment created by the scale of the expected future infrastructure build-out has captured the attention of the financial community
Significant private capital seeking qualified teams to provide creative financing solutions
6
Competitive landscape and abundant access to capital continues to support “blow-out” asset valuations
Sellers of assets continue to utilize large auction processes to drive increased competition resulting in higher valuations (10x – 11x EBITDA now on the cheap side!)
Volatility in natural gas, NGL and even crude oil prices exploits near-term challenges in midstream M&A strategy at the wellhead
While long-term growth prospects and economics remain intact, producers are rationally allocating capital today to the highest return plays
M&A will always be a key component of CMLP’s growth strategy; however, current market conditions require a disciplined approach to evaluating new opportunities
M&A strategy shifting away from…
Wellhead gathering where growth prospects are solely dependent on producer activity
M&A strategy shifting towards…
Bolt-on acquisitions around existing assets where synergies drive meaningful accretion
Diversification throughout the value chain and across commodities
Disciplined Approach to M&A
7
Investing in the Value Chain
Where We Are Going Where We Are
Gas Gathering Pipelines
CO2 Treating
Intrastate & Interstate Pipelines
Nat Gasoline
Iso-Butane
Butane
Propane
Ethane
Res
idue
G
as
Gas Gathering Pipelines
Gas Processing
Intrastate & Interstate Pipelines
Gas Storage
NGL Fractionation
Mixed NGL Pipelines
NGL Storage & NGL
Pipelines
Trucks, Barges & Crude Oil Pipelines
Crude Oil Storage
Crude Oil Refining Storage
Barges & Refined
Products Pipelines
Rich Gas
Enhance Crestwood’s customer service offerings with integrated solutions from wellhead to end market
Diversify Crestwood's operating platform functionally throughout the value chain Improve Crestwood’s long-term cash flow growth profile Broaden Crestwood’s opportunity set
8
Positioning for Greenfield Growth $200+ billion in potential midstream infrastructure required to support the
anticipated upstream development of unconventional assets over the next 2-3 decades
Currently evaluating $1.0+ billion in greenfield opportunities in developing plays (Utica, Marcellus, Niobrara and Avalon / Permian)
Heath Deneke, former VP Project Development and Engineering at El Paso, joins CMLP as SVP and Chief Commercial Officer bringing significant technical and commercial expertise to lead the development efforts
Development team will leverage the CMLP platform, including industry relationships and existing asset footprint, to aggressively pursue new opportunities
Abundant pool of private capital (private equity, infrastructure funds, asset managers and sovereign wealth) chasing the midstream infrastructure opportunity
Continued support from First Reserve, coupled with increasing appetite from new private capital sources, provides ability to pursue and finance early stage greenfield build-out at the general partner level
Strategy to build significant backlog of future growth at CMLP through the drop-down strategy
Building a World-Class
Team
Financing the Growth Strategy
Significant Greenfield Growth
Opportunities
9
Recent Acquisition - Marcellus Shale Crestwood Midstream Marcellus (CMM)
acquired Antero Resources’ Marcellus Shale gathering systems on March 26, 2012
Purchase price: ~$377MM
CMM Ownership: Crestwood Holdings 65% - CMLP 35% with quarterly distributions
Growth Capital: $200MM revolver at CMM level to fund growth capital needs
Operations: CMLP assumed operations from Antero in June 2012
Long Term Strategy: CMM is an appropriate ownership vehicle during the development phase of the Marcellus assets
Provides visible CMLP growth through planned drop downs from CMM
10
Rich Gas Area Dry Gas Area
Legend Area of Dedication (AOD) Planned MWE Sherwood Plant Pipeline in Service at YE 2012
Planned Pipeline (2013 – 2016) Existing and Planned Third Party Pipeline
Marcellus Transaction Merits
11
Very reasonable purchase price of ~11X 2012E EBITDA
Acquired early phase gathering and compression assets with significant long term growth potential based on producer plans, minimum volume commitments, current drilling economics and downstream infrastructure build-out
Assets located in core fairway of the Marcellus Shale with rich gas exposure
High BTU value provides processing upgrade which enhances drilling economics
127,000 acre Area of Dedication (AOD) de-risked through substantial production history and future development potential
63 wells producing ~ 200 MMcf/d at acquisition close
Over 800 Antero well locations and 300+ third party well locations in AOD
20 year 100% fixed fee contract structure with annual escalator
7 year Minimum Throughput Volume Guarantee by Antero ensures minimum quarterly cash flow to CMM and distributions to CMLP
7 year ROFO on Antero gathering systems on additional rich gas acreage located due west in Doddridge County, WV
Marcellus Development Update System volumes averaged 257
MMcf/d for 2Q 2012 with 11 new wells and one new production area connected
Antero currently running 9 rigs on the Antero acreage & AOD
~286 MMcf/d currently flowing through CMM systems (1)
~ 40 additional wells expected to be connected in 2H 2012
Expected FYE exit rate 380 MMcf/d (average 300 MMcf/d for 2012)
AOD well IP’s running ~ 20% better than acquisition forecast
Markwest Sherwood plant on track for 3Q 2012 in-service date
12
2,000
4,000
6,000
8,000
10,000
30 60 90
Antero CMM Wells 1st 90 Days
Mcf
d
Acquisition Type Curve
050,000
100,000150,000200,000250,000300,000350,000400,000
Antero CMM Volumes
Mcf
d
(1) As of 8/15/12
Minimum Annual Volume
Marcellus Operations Update Opened Charleston, West Virginia
(Commercial office) and Clarksburg WV (Operations office) in 2Q 2012 Fully staffed Marcellus team
Completing first new compression station installation in 4Q 2012
Currently building first full scale gathering system extension project Target in-service Nov 2012
CMM building new Greenbrier compression station Target in-service 2Q 2013
Revised CMM 2H 2012 capex of $20MM ($50MM original est.) due to increased pad drilling versus HBP drilling
13
Pending Acquisition – Barnett Rich Located in southwestern rich gas portion of
the Barnett Shale
$90MM pending acquisition of Devon Energy’s West Johnson County gathering and processing assets
HSR approval 8/13/2012 Expected to close by 9/1/2012
Acquiring 74 miles of gathering system and a 100 MMcf/d gas processing plant
Constructed in 2006-08 System capacity of 100 MMcf/d Current volumes of ~95 MMcf/d ~230 Devon wells connected
Signed 20-year fixed fee contract with Devon
20,500 acreage dedication Annual fee escalator
Corvette Plant
Devon Plant
Cowtown Plant
Legend Processing Plants CMLP Cowtown Gathering System
Devon Gathering System
14
Barnett Rich Transaction Merits
15
~5%-8% accretive transaction to CMLP in 2H 2012 and 2013 Ensures solid coverage of Class C unit conversion from PIK to cash pay in
2Q 2013 Acquisition of high quality rich gas midstream assets from Devon, a leading
North American unconventional resource play developer Should lead to additional acquisition and greenfield development
opportunities with Devon Allows for the integration of the Devon gathering system with Crestwood’s
Cowtown gathering system Optimize excess processing capacity at CMLP’s Cowtown and Corvette
plants Reduced wellhead pressures on Devon system provides 3-5% volume uplift Increased NGL recoveries at CMLP plants enhances Devon’s sales value
and future development activity After integration, provides CMLP with an additional 100 MMcf/d 2008 vintage
cryogenic processing plant to redeploy in new rich gas development areas Offers competitive advantage to CMLP as new 100 MMcf/d plants cost
$18-20MM and take over 1 year to manufacture
Barnett Rich Development Plan
Devon is one of the largest Barnett Shale producers by production volume
2Q 2012 ~ 1.3 Bcf/d
10 rigs running at June 30, 2012
Devon’s current West Johnson County rich gas volumes are ~95 MMcf/d
30 Devon wells connected YTD
17 Devon wells remaining for 2012
CMLP inherits 6 well connect projects w/ total capex of ~$1.5MM in 2H 2012
Expect 10-20 wells to be drilled on current acreage in 2013
4 4
2
3
2 2
3
16
Barnett Rich Integration Plan System Integration Strategy: Combine the
Cowtown and Devon gathering systems to enable processing of Devon volumes at CMLP’s Cowtown and Corvette processing plants
Approximately $7MM capital cost to connect (includes new NGL and gas interconnects)
Avoids paying Quicksilver lateral fee on current Devon offload volumes
Plant Optimization Strategy: Current CMLP plant capacity of 325 MMcf/d vs current Cowtown volumes of 140-150 MMcf/d
Current CMLP capacity utilization of ~40%
Excess capacity of 175 – 185 MMcf/d vs current Devon volumes of 95 MMcf/d
Improve capacity utilization to ~80%
Increase in plant and system compression efficiency
Lower operating costs per MCF than Devon plant on a standalone basis
17
Granite Wash Development Update Acquired the Indian Creek gathering system
and processing plant in Roberts County, Texas from Frontier Gas Services in April 2011
32 miles mid/low pressure gathering system; 36 MMcf/d cryogenic processing plant
Long term fixed fee/POP contracts with acreage dedications from Chesapeake, Linn and Great Plains
Le Norman Operating (FRC portfolio company) acquired Great Plains acreage and formed JV with Noble in May 2012
Le Norman commenced Granite Wash development program on Great Plains acreage and will then move to Noble acreage
1st Le Norman Granite Wash completion on Great Plains acreage currently flowing ~ 4.5 MMcf/d + 1,000 Bpd of oil
To MAPL
Existing Frontier Pipeline
Chesapeake Low Pressure Line
Pitco Low Pressure Line
Plains Low Pressure Line
Linn Low Pressure Line
CDP
Producing Gas Well
Permitted Gas Well Indian Creek North Station
Indian Creek Dedication Area
Great Plains Acreage
Indian Creek Plant Site
Existing Frontier Liquids Line
18
Granite Wash Development Update Current Le Norman Phase 1 drilling
plan calls for 13 wells over next 18 months
37 total well locations on Phase 1 acreage over next 5 years
Currently negotiating 5,000 acre addition to original Great Plains acreage dedication
$3MM CMLP capital project to receive higher volumes from Le Norman Phase 1 delivery points
Potential 37,000 acreage expansion (Phase 2) in the coming months based on 2H 2012 and 2013 drilling results
Long term volume forecasts (Phase 1 and Phase 2) may exceed current Indian Creek plant capacity of 38 MMcf/d
Phase 1
Phase 2
Current
Indian Creek Plant
19
Total Barnett Shale 2Q 2012 gathering volumes were 401 MMcf/d vs 450 MMcf/d in 2Q 2011 and 447 MMcf/d in 1Q 2012 Lower than expected volumes due to delayed
new well completions, extended shut-in of current volumes due to fracking operations, modest economic shut-ins and natural decline
12 new wells connected to Alliance system late 2Q 2012 added 50 MMcf/d IP rate
Current 3Q 2012 volumes averaging ~ 430 MMcf/d (1)
Total Barnett Shale 2Q 2012 processing volumes were 130 MMcf/d ~ flat over the last 3 quarters Current 3Q volumes averaging 143 MMcf/d
including ~ 35 MMcf/d third party volumes (1)
Quicksilver added 10 new wells in 1H 2012 with additional 8-10 wells expected in 2H 2012
Devon West Johnson County volumes will add ~ 95 MMcf/d net of offloads after closing
Barnett Shale 2Q Update
20
Alliance
Barnett Shale Asset Overview 420 miles of pipeline 850 MMcf/d gathering capacity 325 MMcf/d processing
capacity 160,000 HP compression 950 wells connected
Cowtown
Lake Arlington
(1) As of 8/15/12
Barnett Quicksilver Update
21
Quicksilver currently accounts for ~35% of total CMLP/CMM gathering volumes and ~40% of total CMLP/CMM revenues (1)
Quicksilver expects to scale back Barnett development plans in 2H 2012 15 wells connected 1H 2012; 8-10 wells to be connected in 2H 2012 24 drilled but uncompleted wells remaining at year-end 2012
Quicksilver is actively pursuing improvement in capital flexibility Amended credit agreement provides $440MM of availability; lower interest coverage
requirement through 2014 S&P revised its outlook of KWK’s credit rating (B-) to stable from negative in August
2012 reflecting improved assessment of liquidity Quicksilver Production Partners - Barnett Shale MLP cleared by the SEC in 2Q –
waiting on improved market conditions to proceed; analysts believe it is likely a 2013 event
Currently considering other Barnett related monetization strategies (i.e. development JV, asset sale or combination with MLP)
Long term Quicksilver / Barnett Shale outlook Barnett Rich Gas (Cowtown area) remains the best economic play in the Quicksilver
portfolio with an estimated value at the wellhead of $6.02 Mcf (2)
Barnett Shale still holds 4 TCF (proved and potential) resource base; 55% developed per KWK forecast (2)
(1) Based on preliminary Crestwood July 2012 gathering and revenue estimates and pro forma for the pending Devon acquisition (2) Per Quicksilver Resources July 2012 Investor Presentation
Fayetteville Shale 2Q Update Gathering volumes 78 MMcf/d vs 81 MMcf/d in 2Q
2011 and 83 MMcf/d in 1Q 2012 15 wells connected YTD; 13 additional wells
expected in 2H 2012 6 new wells connected to Twin Groves system
late 2Q 2012 added 12 – 17 MMcf/d IP rate Current 3Q volumes averaging ~ 86 MMcf/d
with recent highs of 93 MMcf/d (1)
BHP has 1 rig running in CMLP AOD with 2 rigs running in overall Fayetteville Shale play
On August 3, 2012 BHP announced a $2.84 billion impairment charge on carrying value of its Fayetteville Shale assets “The Fayetteville charge reflects the decline in
US domestic gas prices and the company’s decision to adjust its development plans to more liquids rich fields. We believe our dry gas assets are well positioned for the future given their competitive position on the industry cost curve” BHP CEO Marius Klopper
22
Fayetteville Shale Asset Overview 160 miles of pipeline 510 MMcf/d gathering capacity 165 MMcf/d treating capacity 28,000 HP compression 150 wells connected
Rose Bud
Wilson Creek
Prairie Creek
Twin Groves
Woolly Hollow
(1) As of 8/15/12
Other Gathering Systems 2Q Update Haynesville – Crestwood continues to
benefit from a firm transportation agreement with Wildcat Gathering which supports CMLP’s expected volumes through mid 2013. Producers on CMLP’s Sabine gathering system continue to implement restricted choke production practices which curtails volumes but enhances the long term reserve to production potential of dedicated wells.
55 miles of pipeline 100 MMcf/d gathering capacity 74 MMcf/d treating capacity 100 wells connected
Sabine System
Las Animas Systems
47 miles of pipeline 50 MMcf/d gathering capacity 60 wells connected
23
Avalon – Avalon Shale development has been slow to develop on our Las Animas gathering systems. Further development of CMLP’s adjacent Poker Lake rich gas gathering and processing project has been delayed by Chesapeake’s Permian Basin asset sales process expected to be completed before FYE 2012.
24
Key Financial Metrics as of 2Q 2012 2012 2011 % Increase
Gathering (Bcf) (1) 114.9 90.3 + 27%Processing (Bcf) 26.5 25.5 + 4%
Revenues ($MMs) $101.9 $87.9 + 16%Adjusted EBITDA ($MMs) $56.9 $50.4 + 13%
Distributions per Unit $1.00 $0.90 + 11%
Total Debt ($MMs) $550.5 $437.5Debt to Capitalization 46% 48%
Debt to Pro Forma LTM EBITDA 4.1x 4.3xBorrowing Capacity ($MMs) $165.5 $185.1
(1) Includes 35% proportionate ownership of Crestwood Marcellus Midstream LLC gathering volumes.(2) As defined in CMLP's credit agreement. Debt includes capital lease obligations, $8.0 million deferred purchase of Tristate acquisition that will be paid Q4 2012,
$90 million for the pending Devon Acquisition, offset by $116.9 million of equity proceeds received in Q3 2012. Latest twelve months EBITDA is pro forma for theTristate Acquisition and the pending Devon Acquisition.
Six Months Ended June 30,
Operating Statistics:
Leverage Metrics(2):
Revised 2012 Financial Guidance
$55
$38
$125 $125
$65
$43
$135 $130
$-
$20
$40
$60
$80
$100
$120
$140
$160
OriginalNet Income
RevisedNet Income
OriginalAdjusted EBITDA
RevisedAdjusted EBITDA
$ M
illio
ns
Low Range High Range
25
(1) Original guidance provided in February 28, 2012 earnings release
(1) (1)
Factors Effecting Revised 2012 Guidance Lower than expected 2Q 2012 gathering volumes on the
Alliance, Lake Arlington, Sabine, Prairie Creek and Woolly Hollow dry gas systems
Higher than expected DD&A and Interest expense Revised 2H 2012 producer drilling plans on dry gas systems
based on lower than expected natural gas prices for the remainder of 2012
Offset by: Increasing contribution from CMM in 3Q and 4Q 2012 Completion of pending Devon acquisition by 9/1/12 Recent new well production results and 2H 2012
development plans on the Indian Creek gathering system
26
Growth Drivers to Improved 2013 Performance Based on Current Crestwood 5-Year Plan Forecast
0 200 400 600 800 1,000 1,200
Dry Gas Systems
Rich Gas Systems(100% Owned)
Marcellus JointVenture
Total Rich GasVolumes
Total CrestwoodVolumes
Gathering Volumes MMcf/d
2012 2013
10%
26%
65%
49%
21%
27
Factors which could improve distribution growth and strengthen coverage
Improved natural gas prices leading to increased drilling on dry gas systems
Contributions from bolt-on or value chain acquisitions
Contributions from new greenfield infrastructure projects
Faster drop downs from Crestwood Holdings related to CMM
Current Crestwood 5-Year Plan Supports Solid Distribution Growth from Base Business
2011 2012 2013 2014 2015Annual Distributions
Crestwood maintains its 10% historical distribution growth target
28
Key Investment Considerations Experienced management team and strong general partner
Solid field services operating platform
New strategy to emphasize bolt-on and value chain acquisitions
Building competitive business development team to take advantage of historic midstream infrastructure opportunities
Access to multiple sources of growth capital Ample CMLP current liquidity to execute new acquisition and greenfield
project strategies
Focused on creating long term value through consistent distribution growth Remain committed to 10% annual distribution growth target
29
Non-GAAP Financial Measures
The following slides of this presentation provide reconciliations of the non-GAAP financial measures adjusted EBITDA and adjusted distributable cash flow 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. We define adjusted EBITDA as net income from continuing operations adjusted for interest expense, income taxes, depreciation, amortization and accretion expense and certain non-recurring expenses, including but not limited to items such as transaction related expenses and gains/losses on the exchange of property, plant and equipment. 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. We define adjusted distributable cash flow as net income from continuing operations adjusted for: (i) the addition of depreciation, amortization and accretion expense; (ii) the addition of income taxes; (iii) the addition of non-cash interest expense; (iv) the subtraction of maintenance capital expenditures and (v) certain non-recurring expenses, including but not limited to items such as transaction related expenses and gains/losses on the exchange of property, plant and equipment. The GAAP measure most directly comparable to adjusted distributable cash flow is net income from continuing operations.
30
Non-GAAP Reconciliations
31
2008 2009 2010 2011 2011 2012
Total revenues 76,084$ 95,881$ 113,590$ 205,820$ 87,915$ 101,935$
Product purchases - - - (38,787) (12,528) (16,414)
Operations and maintenance expense (19,395) (21,968) (25,702) (36,303) (15,592) (18,598)
General and administrative expense (6,407) (9,676) (17,657) (24,153) (12,430) (13,674)
Earnings from unconsolidated affiliate - - - - - 441
Gain from exchange of property, plant and equipment - - - 1,106 - -
Other income 11 1 - - - -
EBITDA 50,293 64,238 70,231 107,683 47,365 53,690
Add: Non-recurring expenses - - 6,318 2,279 3,037 1,778
Less: Equity earnings from unconsolidated affiliates - - - - - (441)
Add: Adjusted earnings from unconsolidated affiliates - - - - - 1,876
Adjusted EBITDA 50,293 64,238 76,549 109,962 50,402 56,903
Less:
Depreciation and accretion expense 13,131 20,829 22,359 33,812 14,386 21,484
Interest expense 8,437 8,519 13,550 27,617 12,825 15,843
Income tax provision (benefit) 253 399 (550) 1,251 551 578
Non-recurring items impacting net income - - 6,318 2,279 3,037 3,213
Net income from continuing operations 28,472$ 34,491$ 34,872$ 45,003$ 19,603$ 15,785$
Net income from continuing operations 28,472$ 34,491$ 34,872$ 45,003$ 19,603$ 15,785$
Depreciation and accretion expense 13,131 20,829 22,359 33,812 14,386 21,484
Income tax provision (benefit) 253 399 (550) 1,251 551 578
Amortization of deferred financing fees 6,096 3,836 4,961 3,473 1,610 2,325
Non-cash equity compensation 1,017 1,705 5,522 916 565 994
Maintenance capital expenditures (1,890) (10,000) (6,600) (1,409) (705) (1,593)
Distributable cash flow 47,079 51,260 60,564 83,046 36,010 39,573
Add: Non-recurring expenses - - 2,737 4,779 5,537 1,778
Less: Equity earnings from unconsolidated affiliates - - - - - (441)
Add: Adjusted DCF from unconsolidated affiliates - - - - - 1,750
Adjusted distributable cash flow 47,079$ 51,260$ 63,301$ 87,825$ 41,547$ 42,660$
Distributions declared for respective period 33,736 39,428 52,423 70,453 31,621 45,787
Distribution coverage 1.40x 1.30x 1.21x 1.25x 1.31x 0.93x
Six Months EndedYear Ended December 31, June 30,
($ in thousands)
Non-GAAP Reconciliation: 2012 Forecast
32
Net income $38 to $43
Add: Depreciation, amortization and accretion expense $45
Add: Interest expense $35
Add: Income tax provision $1
EBITDA $119 to $124
Add: Non-recurring expenses (1) $2
Deduct: Equity earnings from Crestwood Marcellus Midstream ("CMM") ($3)
Add: 35% of CMM's Adjusted EBITDA $7
Adjusted EBITDA $125 to $130
(1) Includes approximately $2 million of non-recurring expenses primarily related to due diligence activitiesof a potential acquisition that is not expected to be completed.
Reconciliation of Net Income to Adjusted EBITDA(in millions)
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