Economic Performance

At Crestwood, our ability to make a positive impact for our investors and other stakeholders depends on our financial success. We are committed to generating unitholder value and long-term financial returns. We do so by focusing our strategy on prudent investments in high-quality organic growth projects while maintaining a strong balance sheet and solid distribution coverage. Our current growth opportunities are located in the core of the Bakken Shale, Powder River Basin, Delaware Basin and Northeast Marcellus Shale.

As part of Crestwood’s growth strategy, we have the following financial goals:

  1. Generate 15 percent compounded annual growth rate in adjusted earnings before interest, taxes, depreciation, & amortization (EBITDA) by 2020 from a 2017 baseline
  2. Generate 15 percent compounded annual growth rate in distributable cash flow (DCF) per unit by 2020 from a 2017 baseline
  3. Achieve a targeted leverage ratio between 3.5x and 4.0x in 2020
  4. Maintain a full-year distribution coverage ratio in excess of 1.2x

We plan to achieve these goals by executing on the expansion opportunities currently in our portfolio. We will finance each capital project prudently in order to maximize accretive returns while building on the strength of our balance sheet.

“For the last three years, Crestwood’s cash flow growth has been driven by accretive organic investments across our diversified asset base, strong market fundamentals and exceptional execution by our commercial, operational and project management teams. Crestwood’s financial strategy is to identify high quality growth opportunities that meet a strict set of investment hurdles and then prudently finance those projects using a disciplined approach that maintains our balance sheet and maximizes accretive value. Crestwood is well-positioned to maximize value for our unitholders as we continue to execute our long-term growth objectives.”

Portrait of Robert T. Halpin, Executive Vice President and Chief Financial Officer

Robert Halpin,
Executive Vice President and
Chief Financial Officer

2018 Financial Performance

In 2018, Crestwood delivered strong financial performance against our goals, with Adjusted EBITDA of $420 million – a 6 percent increase from 2017 – and DCF of $224 million. Our three business segments of Gathering & Processing, Storage & Transportation, and Marketing, Supply & Logistics contributed 73 percent, 16 percent, and 11 percent of the Adjusted EBITDA, respectively.

Annual Financial Metrics
EBITDA and DCF

2019E
2018
2017
Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) (in millions USD)
$515
$420
$395
Distributable Cash Flow (DCF) attributable to CEQP common
$290
$224
$228
  • *2019E financial metrics reflect mid-point of previously announced financial guidance targets.

Annual Financial Metrics
Distribution Coverage and Leverage

2019E
2018
2017
Distribution Coverage Ratio
1.60x
1.31x
1.36x
Leverage Ratio
4.25x
4.25x
4.14x
  • *2019E financial metrics reflect mid-point of previously announced financial guidance targets.

Looking Ahead

In 2019, we expect favorable market fundamentals to drive increased activity around our core assets, which will allow us to continue growing across all three business segments and progress towards our 2020 goals. We have growth projects underway that will increase crude oil, natural gas, and produced water-gathering capacities. Additionally, we have two-large scale processing plant expansion projects underway, and continued collaboration between our business segments will enable us to provide enhanced services to customers across the midstream value chain. Financially speaking, our 2019 efforts to reach our 2020 goal include achieving Adjusted EBITDA between $500 million and $530 million, DCF between $275 million and $305 million, and stable coverage and leverage ratios. We met or exceeded our 2018 and 2017 guidance targets in all areas and are hopeful to continue that track record of success to continue delivering value to our unitholders.  

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