Economic Performance and Business Strategy

We conduct our business with integrity, transparency and accountability while generating unitholder value and delivering long-term financial results.

Crestwood’s financial strategy focuses on proactively managing the business through commodity cycles while maintaining significant liquidity and balance sheet strength. This strategy positions the company to execute on its capital allocation priorities and generate value for unitholders through free cash flow generation, investment in high return, accretive capital projects and the return of capital to unitholders via distributions and opportunistic equity repurchases.

2021 Financial Performance

Our integrated asset portfolio, providing midstream services and connections from the wellhead to the burner tip, creates diverse financial opportunities for our company. In 2021, Crestwood delivered strong financial performance with adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) of $600 million and distributable cash flow (DCF) of $371 million, both up year-over-year. In addition, we achieved the high end of our 2021 financial guidance targets, which resulted in the highest cash flow levels in the company’s history. During 2021, we generated $154 million in free cash flow after distributions which was used to strengthen the balance sheet and reduce debt. In 2022, we expect to continue this track record of exceptional financial results as we continue to deliver long-term value for our unitholders.

Financial Performance
 

2019

2020

2021

Adjusted EBITDA

$527

$580

$600

Distributable Cash Flow (DCF)

$305

$361

$371

 

 

Financial Performance 
 

2019

2020

2021

Distribution Coverage Ratio

1.8x

2.0x

2.4x

Leverage Ratio

4.1x

4.0x

3.5x

Key Investor Highlights

  • Diversified midstream portfolio with critical infrastructure assets providing reliable services across the energy value chain
  • Strong track record of delivering on operational and financial targets through all commodity cycles
  • Balanced portfolio of high-quality customers supported by take-or-pay and fixed-fee contracts, with POP/POI upside
  • MLP industry leading sustainability program focused on enhanced transparency, minimizing enterprise risk and embracing best-in-class ESG metrics
  • Solid balance sheet with low leverage and substantial liquidity provides financial flexibility
  • Positive outlook in 2022 drives best-in-class financial metrics and incremental returns to unitholders

2021 Strategic Transactions and 2022 Outlook

2021 proved to be another transformational year for Crestwood and included many strategic milestones. 

These landmark deals have repositioned Crestwood with strategic and financial flexibility and established the company as a leading, independent master limited partnership (MLP) in our midstream peer group.

In 2022, we are expecting strong financial performance driven by substantial development activity in our core growth areas coupled with the constructive commodity price backdrop. We are projecting 2022 Adjusted EBITDA between $780 million to $840 million, which includes eleven months of contribution from the Oasis Midstream assets. We expect to generate meaningful free cash flow throughout the year enabling Crestwood to optimize our capital structure and maintain financial flexibility to pursue growth opportunities in our core areas. 

For more information on Crestwood’s economic performance, please see our 2021 Form 10-K

Crestwood and Oasis Midstream – A Winning Combination

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Crestwood and Oasis Midstream – A Winning Combination

In October 2021, Crestwood announced the acquisition of Oasis Midstream Partners in a $1.8 billion transaction. This merger aligned perfectly with our stated strategy of consolidating high quality midstream assets in our core growth areas. It not only enhances our competitive position in the Williston and Delaware Basins but also enables Crestwood to capture substantial operational and commercial synergies as we integrate the assets. The acquisition significantly expands our inventory of top tier drilling locations as well as the acreage dedicated to Crestwood under long-term contracts.

We closed the acquisition of Oasis Midstream in February 2022. The pro forma Crestwood now has an enterprise value of approximately $7 billion and generates over $800 million of Adjusted EBITDA. Since taking over operatorship of the Oasis assets, we are beginning to implement our MLP leading sustainability practices across the Williston and Delaware Basin assets. This includes managing the assets with an intense focus on flare minimization and increased methane emissions monitoring while developing strong commitments to biodiversity, environmental stewardship, safety and community engagement efforts. 

Looking Ahead

Crestwood is well positioned to continue executing on our business strategy in 2022 with a focus on efficiently integrating the Oasis Midstream assets, maintaining our balance sheet strength and maximizing the free cash flow generation of the Company. Our goal continues to be to build an industry leading MLP midstream company through owning and operating high-quality midstream assets that connect fundamental energy supply with energy demand across the United States.