Economic Performance and Business Strategy

Our business operates on the principles of integrity, transparency and accountability, with a primary focus on generating value for our unitholders and delivering sustainable financial results over the long-term.

A Crestwood NGL facility at dusk

Over the past 18 months, we have focused on responsible growth and authentic advancement, taking significant steps to strategically reposition the company with a streamlined asset base that is better equipped to capitalize on long-term growth driven by strong fundamentals. Our financial strategy focuses on proactively managing the business through commodity cycles while maintaining significant liquidity, financial flexibility and balance sheet strength. This approach enables us to fulfill our capital allocation priorities, generate free cash flow, invest in high-returning and accretive capital projects and deliver value to our unitholders through an attractive distribution.

Key Investor Highlights

Diversified gathering and processing assets with competitive positions in three high growth, oil-weighted basins focused on providing reliable midstream services and top-tier customer service
Balanced portfolio of high-quality public and private customers with large acreage dedications, significant economic drilling locations and fixed-fee contracts
Strong balance sheet with substantial liquidity provides financial flexibility for capital allocation
2023 outlook drives positive free cash flow and strong financial metrics, providing incremental opportunities to deliver long-term returns for unitholders
Leading midstream sustainability program focused on enhanced transparency, minimizing enterprise risk and embracing best-in-class ESG metrics

2022 Financial Performance

Our diversified asset portfolio provides strategic growth opportunities for our company. In 2022, Crestwood delivered strong financial performance with record adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) of $762 million and distributable cash flow (DCF) to common unitholders of $467 million, up 27 percent and 26 percent, respectively, year-over-year.

Financial Performance
	2020	2021	2022
Adjusted EBITDA	$580	$600	$762
Distributable Cash Flow (DCF)	$361	$371	$467

Financial Performance
	2020	2021	2022
Distribution Coverage Ratio	2.0x	2.4x	1.8x
Leverage Ratio	4.0x	3.5x	4.2x

Strategic Transactions in 2022: Another Transformational Year

During 2022, we completed a series of strategic transactions that further enhanced our position as a best-in-class midstream company focused on responsibly building scale in our core basins—the Williston, Delaware and Powder River—while preserving our balance sheet strength and maintaining our ESG commitments. During 2022, we completed the following strategic transactions:

February

Oasis Midstream Acquisition

Crestwood Completes Aquisition of Oasis Midstream

On February 1, 2022, we closed the previously announced acquisition of Oasis Midstream Partners LP for a combination of cash and newly issued Crestwood common units. As a result of the transaction, Crestwood significantly enhanced its scale and competitive position in the Williston and Delaware Basins.

A Crestwood NGL facility with tractors parked out in front

May

Sendero Midstream and CPJV Acquisitions and Barnett Shale Divestiture

In May 2022, we concurrently announced the acquisition of Sendero Midstream in the Delaware Permian for $631 million in cash, the acquisition of First Reserve’s 50 percent interest in Crestwood Permian Basin Holdings LLC (CPJV) for 11.3 million common units, and the divestiture of our Barnett shale assets to EnLink Midstream for $275 million in cash. In July 2022, we closed all three of these transactions, which concluded our long-term investment in the Barnett Shale and enabled Crestwood to immediately redeploy non-core divestiture proceeds into higher growth Delaware Basin assets. As a result of the acquisitions, we more than doubled our natural gas processing capacity in the highly-prolific Delaware Basin and created a complementary asset footprint that enables operational, commercial and capital synergies. For more information, see our press releases below.

Crestwood Announces Strategic Delaware Basin Acquisitions And Divestiture Of Its Non-Core Barnett Shale Assets

Crestwood Closes Series Of Strategic Transactions And Announces Changes To Its Board Of Directors

Crestwood's Delaware Basin facility

September

Marcellus Shale Divestiture

Crestwood Announces Divestiture Of Marcellus Assets

On September 12, 2022, we announced the divestiture of our Marcellus Shale natural gas gathering and compression assets, which were non-core to Crestwood’s long-term growth strategy, to Antero Midstream LLC for $206 million in cash. These proceeds were redeployed into the repurchase of approximately $123 million common units from Chord Energy (formerly known as Oasis Petroleum).

Crestwood's Marcellus Shale facility

For more information about how we utilize our newly-created ESG due diligence risk register and Carbon Acquisition/Divestiture Protocol to evaluate and complete strategic transactions, see our Carbon Management section and our Risk Management section.

Outlook for 2023

In 2023, we expect Adjusted EBITDA of $780 million to $860 million, representing 8 percent growth year-over-year at the midpoint of the range, driven by approximately 260 well connects across our operating footprint as producers continue to execute their active drilling and completion programs. Our growth capital investment of $135 million to $155 million represents a reduction of approximately 20 percent year-over-year at the midpoint and drives increased free cash flow after distributions, which will be allocated to strengthening our balance sheet and reducing debt.

For more information on Crestwood’s economic performance, please see our Form 10-K.

Looking Ahead

Crestwood is well positioned to continue executing on our business strategy in 2023 with a focus on optimizing the Oasis Midstream and Sendero Midstream assets, maintaining our balance sheet strength and maximizing free cash flow generation. We remain focused on developing innovative and sustainable solutions that address the evolving demands of the energy market, while prioritizing operational excellence and creating long-term value for our stakeholders.