Attached files
| file | filename |
|---|---|
| EX-99.1 - EX-99.1 - Crestwood Midstream Partners LP | d198082dex991.htm |
| EX-10.1 - EX-10.1 - Crestwood Midstream Partners LP | d198082dex101.htm |
| 8-K - 8-K - Crestwood Midstream Partners LP | d198082d8k.htm |
Exhibit 99.2
CRESTWOOD MIDSTREAM PARTNERS LP
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma condensed consolidated financial statements and accompanying financial information of Crestwood Midstream Partners LP (Crestwood Midstream) as of and for the three months ended March 31, 2016, and for the year ended December 31, 2015, were derived from (i) the audited consolidated financial statements of Crestwood Midstream as of and for the year ended December 31, 2015, included in its Annual Report on Form 10-K; and (ii) the unaudited consolidated financial statements of Crestwood Midstream as of and for the three months ended March 31, 2016 included in its Quarterly Report on Form 10-Q.
Pursuant to the previously announced Contribution Agreement dated April 20, 2016 between a wholly owned subsidiary of Crestwood Midstream and Con Edison Gas Pipeline and Storage Northeast, LLC (CEGPS), a wholly owned subsidiary of Consolidated Edison, Inc., Crestwood Midstream will contribute its natural gas pipeline and storage business located in southern New York and northern Pennsylvania (the NE S&T operations) and CEGPS will contribute approximately $974.5 million to Stagecoach Gas Services LLC (Stagecoach Gas), and Stagecoach Gas will distribute the proceeds to Crestwood Midstream’s wholly owned subsidiary (collectively, the Transactions). The unaudited pro forma financial information of Crestwood Midstream reflects the pro forma impact of the Transactions and related deconsolidation of the NE S&T operations. The historical financial statements have been adjusted in the pro forma financial statements to give effect to events that are (i) directly attributable to the transaction; (ii) factually supportable; and (iii) with respect to the statement of operations, expected to have a continuing impact on Crestwood Midstream’s operations.
Crestwood Midstream’s 50% ownership interest in Stagecoach Gas is reflected in the unaudited pro forma financial statements as an equity method investment at its estimated fair value. The unaudited pro forma condensed consolidated balance sheet as of March 31, 2016 reflects the transaction as if it occurred on March 31, 2016 and the unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2015 and for the three months ended March 31, 2016 reflect the transaction as if it occurred on January 1, 2015. The unaudited pro forma condensed consolidated financial statements are for illustrative purposes only and are not necessarily indicative of the financial position that would have been obtained or the financial results that would have occurred if the transaction had been completed as of the dates indicated. In addition, the unaudited pro forma condensed consolidated financial information does not purport to project the future financial position or operating results of Crestwood Midstream. Future results may vary significantly from the results reflected because of various factors. The pro forma adjustments and their underlying assumptions are described more fully in the notes to the unaudited pro forma condensed financial information.
Crestwood Midstream Partners LP
Unaudited Pro Forma Condensed Consolidated Balance Sheet
March 31, 2016
(In millions)
| Crestwood Midstream Partners LP Historical |
NE S&T Operations |
Other Adjustments |
Crestwood Midstream Partners LP Pro Forma |
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| (a) | ||||||||||||||||||
| ASSETS |
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| Current assets: |
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| Cash and cash equivalents |
$ | 0.8 | $ | — | $ | 974.5 | (b) | $ | — | |||||||||
| (319.1 | ) | (c) | ||||||||||||||||
| (12.0 | ) | (d) | ||||||||||||||||
| (644.2 | ) | (e) | ||||||||||||||||
| Accounts receivable |
209.6 | (14.7 | ) | — | 194.9 | |||||||||||||
| Inventory |
26.6 | (2.0 | ) | — | 24.6 | |||||||||||||
| Prepaid expenses and other current assets |
33.3 | (4.2 | ) | — | 29.1 | |||||||||||||
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| Total current assets |
270.3 | (20.9 | ) | (0.8 | ) | 248.6 | ||||||||||||
| Property, plant and equipment, net |
3,514.4 | (1,134.0 | ) | — | 2,380.4 | |||||||||||||
| Intangible assets, net |
743.3 | (9.3 | ) | — | 734.0 | |||||||||||||
| Goodwill |
975.8 | (726.3 | ) | — | 249.5 | |||||||||||||
| Investment in unconsolidated affiliates |
260.6 | — | 864.0 | (f) | 1,124.6 | |||||||||||||
| Other assets |
3.0 | — | — | 3.0 | ||||||||||||||
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| Total assets |
$ | 5,767.4 | $ | (1,890.5 | ) | $ | 863.2 | $ | 4,740.1 | |||||||||
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| LIABILITIES & PARTNERS’ CAPITAL |
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| Current liabilities: |
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| Accounts payable |
$ | 116.5 | $ | (0.8 | ) | $ | — | $ | 115.7 | |||||||||
| Accrued expenses and other liabilities |
94.6 | (1.5 | ) | (3.7 | ) | (c) | 89.4 | |||||||||||
| Other current liabilities |
8.2 | — | — | 8.2 | ||||||||||||||
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| Total current liabilities |
219.3 | (2.3 | ) | (3.7 | ) | 213.3 | ||||||||||||
| Long term debt, less current portion |
2,530.8 | — | (322.8 | ) | (c) | 1,560.7 | ||||||||||||
| (3.1 | ) | (d) | ||||||||||||||||
| (644.2 | ) | (e) | ||||||||||||||||
| Other long-term liabilities |
44.7 | (2.3 | ) | — | 42.4 | |||||||||||||
| Partners’ capital |
2,972.6 | (1,885.9 | ) | 974.5 | (b) | 2,923.7 | ||||||||||||
| 7.4 | (c) | |||||||||||||||||
| (8.9 | ) | (d) | ||||||||||||||||
| 864.0 | (f) | |||||||||||||||||
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| Total liabilities and partners’ capital |
$ | 5,767.4 | $ | (1,890.5 | ) | $ | 863.2 | $ | 4,740.1 | |||||||||
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See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
Crestwood Midstream Partners LP
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Three Months Ended March 31, 2016
(In millions)
| Crestwood Midstream Partners LP Historical |
NE S&T Operations |
Other Adjustments |
Crestwood Midstream Partners LP Pro Forma |
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| (a) | ||||||||||||||||||
| Revenues |
$ | 536.0 | $ | (43.3 | ) | $ | — | $ | 492.7 | |||||||||
| Expenses |
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| Costs of product/services sold (excluding depreciation, amortization and accretion as shown below) |
363.4 | (2.8 | ) | — | 360.6 | |||||||||||||
| Operations and maintenance expenses |
41.7 | (4.2 | ) | — | 37.5 | |||||||||||||
| General and administrative expenses |
22.2 | — | — | 22.2 | ||||||||||||||
| Depreciation, amortization and accretion |
64.9 | (10.7 | ) | — | 54.2 | |||||||||||||
| Other operating expenses |
109.7 | — | — | 109.7 | ||||||||||||||
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| 601.9 | (17.7 | ) | — | 584.2 | ||||||||||||||
| Operating loss |
(65.9 | ) | (25.6 | ) | — | (91.5 | ) | |||||||||||
| Earnings from unconsolidated affiliates, net |
6.5 | — | 12.8 | (g) | 19.3 | |||||||||||||
| Interest and debt expense |
(36.1 | ) | — | 9.7 | (h) | (26.4 | ) | |||||||||||
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| Income (loss) before income taxes |
(95.5 | ) | (25.6 | ) | 22.5 | (98.6 | ) | |||||||||||
| Benefit for income taxes |
(0.2 | ) | — | — | (0.2 | ) | ||||||||||||
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| Net income (loss) |
(95.3 | ) | (25.6 | ) | 22.5 | (98.4 | ) | |||||||||||
| Net income attributable to non-controlling partners |
5.9 | — | — | 5.9 | ||||||||||||||
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| Net income (loss) attributable to partners |
$ | (101.2 | ) | $ | (25.6 | ) | $ | 22.5 | $ | (104.3 | ) | |||||||
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See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
Crestwood Midstream Partners LP
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2015
(In millions)
| Crestwood Midstream Partners LP Historical |
NE S&T Operations |
Other Adjustments |
Crestwood Midstream Partners LP Pro Forma |
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| (a) | ||||||||||||||||||
| Revenues |
$ | 2,632.8 | $ | (176.8 | ) | $ | — | $ | 2,456.0 | |||||||||
| Expenses |
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| Costs of product/services sold (excluding depreciation, amortization and accretion as shown below) |
1,883.5 | (13.3 | ) | — | 1,870.2 | |||||||||||||
| Operations and maintenance expenses |
188.7 | (21.7 | ) | — | 167.0 | |||||||||||||
| General and administrative expenses |
105.6 | — | — | 105.6 | ||||||||||||||
| Depreciation, amortization and accretion |
278.5 | (42.9 | ) | — | 235.6 | |||||||||||||
| Other operating expenses |
1,376.9 | — | — | 1,376.9 | ||||||||||||||
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| 3,833.2 | (77.9 | ) | — | 3,755.3 | ||||||||||||||
| Operating loss |
(1,200.4 | ) | (98.9 | ) | — | (1,299.3 | ) | |||||||||||
| Earnings (loss) from unconsolidated affiliates, net |
(60.8 | ) | — | 48.7 | (g) | (12.1 | ) | |||||||||||
| Interest and debt expense |
(130.5 | ) | 0.1 | 37.1 | (h) | (93.3 | ) | |||||||||||
| Other expense |
(18.9 | ) | 1.4 | — | (17.5 | ) | ||||||||||||
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| Income (loss) before income taxes |
(1,410.6 | ) | (97.4 | ) | 85.8 | (1,422.2 | ) | |||||||||||
| Provision for income taxes |
— | — | — | — | ||||||||||||||
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| Net income (loss) |
(1,410.6 | ) | (97.4 | ) | 85.8 | (1,422.2 | ) | |||||||||||
| Net income attributable to non-controlling partners |
23.1 | — | — | 23.1 | ||||||||||||||
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| Net income (loss) attributable to Crestwood Midstream Partners LP |
(1,433.7 | ) | (97.4 | ) | 85.8 | (1,445.3 | ) | |||||||||||
| Net income attributable to Class A preferred units |
23.1 | — | — | 23.1 | ||||||||||||||
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| Net income (loss) attributable to partners |
$ | (1,456.8 | ) | $ | (97.4 | ) | $ | 85.8 | $ | (1,468.4 | ) | |||||||
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See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Deconsolidation of NE S&T Operations
| (a) | To record the deconsolidation of the NE S&T operations in connection with the Transactions. |
Unaudited Pro Forma Condensed Consolidated Balance Sheet Adjustments
| (b) | Reflects the proceeds received from the Transactions. Based on proceeds and the pro forma investment in unconsolidated affiliate to be recorded as of March 31, 2016, Crestwood Midstream would recognize a loss on deconsolidation of approximately $47.4 million, which is reflected in the pro forma adjustment to partners’ capital. The unaudited pro forma condensed consolidated statements of operations do not include this loss because the loss is not expected to have a continuing impact on Crestwood Midstream’s results of operations. |
| (c) | Reflects the following: (i) repayments of the principal amounts and fees associated with Crestwood Midstream’s 6.0% Senior Notes due 2020 and 6.125% Senior Notes due 2022 with proceeds received from the Transactions; (ii) a gain on the extinguishment of the senior notes; and (iii) payment of accrued interest associated with the senior notes. |
| (d) | Reflects payment of transaction costs, of which $3.1 million represents deferred financing costs. |
| (e) | Reflects repayment of a portion of the amount outstanding under Crestwood Midstream’s credit facility with proceeds received as a result of the Transactions. |
| (f) | Reflects Crestwood Midstream’s equity investment in Stagecoach Gas based on its estimated fair value as of March 31, 2016. |
Unaudited Pro Forma Condensed Consolidated Statements of Operations Adjustments
| (g) | Reflects Crestwood Midstream’s portion of Stagecoach Gas’ net income based on its 50% equity method investment in Stagecoach Gas. From June 2016 through May 2018, and from June 2018 through May 2019, and thereafter, Crestwood Midstream will receive distributions from Stagecoach Gas based on 35%, 40% and 50%, respectively, of its available cash. |
| (h) | Reflects the pro forma adjustment of interest expense as follows (in millions): |
| December 31, 2015 |
March 31, 2016 |
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| Reduction in Crestwood Midstream’s interest expense for repayments of amounts under its credit facility and senior notes |
$ | (37.1 | ) | $ | (9.7 | ) | ||
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| Pro forma adjustment to interest expense |
$ | (37.1 | ) | $ | (9.7 | ) | ||
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