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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
x☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2017
OR
For the quarterly period ended September 30, 2023

OR
¨☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .


(Exact name of registrant as specified in its charter)Commission file numberState or other jurisdiction of incorporation or organization(I.R.S. Employer Identification No.)
Crestwood Equity Partners LP001-34664Delaware43-1918951
Crestwood Midstream Partners LP001-35377Delaware20-1647837


811 Main Street
Suite 3400
Houston, Texas
HoustonTexas77002
(Address of principal executive offices)(Zip code)
(832) 519-2200
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Crestwood Equity Partners LPCommon Units representing limited partnership interestsCEQPNew York Stock Exchange
Crestwood Equity Partners LPPreferred Units representing limited partnership interestsCEQP-PNew York Stock Exchange
Crestwood Midstream Partners LPNoneNoneNone

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Crestwood Equity Partners LP
Yesx
☒No o☐
Crestwood Midstream Partners LP
Yesx
☒No o☐


(Explanatory Note: Crestwood Midstream Partners LP is currently a voluntary filer and is not subject to the filing requirements of the Securities Exchange Act of 1934. Although not subject to these filing requirements, Crestwood Midstream Partners LP has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months.)


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Crestwood Equity Partners LP
Yesx
☒No o☐
Crestwood Midstream Partners LP
Yesx
☒No o☐



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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and "emerging“emerging growth company"company” in Rule 12b-2 of the Exchange Act.
Crestwood Equity Partners LP
Large accelerated filerx
☒
Accelerated filero

☐
Non-accelerated filero
☐
Smaller reporting companyo
☐
Emerging growth companyo☐
Crestwood Midstream Partners LP
Large accelerated filero
☐
Accelerated filero
☐
Non-accelerated filerx
☒
Smaller reporting companyo
☐
Emerging growth companyo☐

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange act.
Act.
Crestwood Equity Partners LPo☐
Crestwood Midstream Partners LPo☐


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Crestwood Equity Partners LP
Yeso
☐Nox☒
Crestwood Midstream Partners LP
Yeso
☐Nox☒


Indicate the number of shares outstanding of each of the issuer'sissuer’s classes of common stock, as of the latest practicable date (October 30, 2017)
27, 2023).
Crestwood Equity Partners LP70,291,071105,098,724
Crestwood Midstream Partners LPNone


Crestwood Midstream Partners LP, as a wholly-owned subsidiary of a reporting company, meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this report with the reduced disclosure format as permitted by such instruction.






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CRESTWOOD EQUITY PARTNERS LP
CRESTWOOD MIDSTREAM PARTNERS LP
INDEX TO FORM 10-Q

Page
Page
Part I – Financial Information
Item 1. Financial Statements (Unaudited):
Crestwood Equity Partners LP
Consolidated Balance Sheets
4
Consolidated Statements of Operations
5
Consolidated Statements of Comprehensive IncomePartners’ Capital
76
Consolidated Statement of Partners’ Capital
8
Consolidated Statements of Cash Flows
98
Crestwood Midstream Partners LP
Consolidated Balance Sheets
109
Consolidated Statements of Operations
1110
Consolidated StatementStatements of Partners’ Capital
1311
Consolidated Statements of Cash Flows
1412
Notes to Consolidated Financial Statements
1513
Note 1. Organization and Business Description
13
Note 2. Basis of Presentation and Summary of Significant Accounting Policies
14
Note 3. Acquisitions and Divestitures
14
Note 4. Certain Balance Sheet Information
15
Note 5. Investments in Unconsolidated Affiliates
16
Note 6. Risk Management
17
Note 7. Fair Value Measurements
19
Note 8. Long-Term Debt
21
Note 9. Commitments and Contingencies
22
Note 10. Leases
23
Note 11. Partners’ Capital and Non-Controlling Partner
24
Note 12. Earnings Per Limited Partner Unit
26
Note 13. Segments
27
Note 14. Revenues
30
Note 15. Related Party Transactions
34
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
4236
Item 3. Quantitative and Qualitative Disclosures About Market Risk
5446
Item 4. Controls and Procedures
5446
Item 1. Legal Proceedings
5548
Item 1A. Risk Factors
5548
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
5548
Item 3. Defaults Upon Senior Securities
5548
Item 4. Mine Safety Disclosures
5548
Item 5. Other Information
5548
Item 6. Exhibits
5648
Signature
5851


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PART I - FINANCIAL INFORMATION


Item 1. Financial Statements



CRESTWOOD EQUITY PARTNERS LP
CONSOLIDATED BALANCE SHEETS
(in millions, except unit information)
 September 30,
2017		 December 31,
2016
 (unaudited)  
Assets   
Current assets:   
Cash$1.4
 $1.6
Accounts receivable, less allowance for doubtful accounts of $1.2 million and $1.9 million at September 30, 2017 and December 31, 2016345.0
 289.8
Inventory92.9
 66.0
Assets from price risk management activities7.8
 6.3
Prepaid expenses and other current assets5.2
 9.7
Total current assets452.3
 373.4
Property, plant and equipment2,599.6
 2,555.4
Less: accumulated depreciation and depletion547.5
 457.8
Property, plant and equipment, net2,052.1
 2,097.6
Intangible assets898.6
 898.6
Less: accumulated amortization281.4
 241.2
Intangible assets, net617.2
 657.4
Goodwill199.0
 199.0
Investments in unconsolidated affiliates1,198.5
 1,115.4
Other assets6.2
 6.1
Total assets$4,525.3
 $4,448.9
Liabilities and partners’ capital   
Current liabilities:   
Accounts payable$312.7
 $217.2
Accrued expenses and other liabilities112.5
 90.5
Liabilities from price risk management activities52.6
 28.6
Current portion of long-term debt0.9
 1.0
Total current liabilities478.7
 337.3
Long-term debt, less current portion1,615.4
 1,522.7
Other long-term liabilities48.2
 44.6
Deferred income taxes4.7
 5.3
Commitments and contingencies (Note 10)


 

Partners’ capital:   
Crestwood Equity Partners LP partners’ capital (70,551,614 and 69,499,741 common and subordinated units issued and outstanding at September 30, 2017 and December 31, 2016)1,566.4
 1,782.0
Preferred units (71,257,445 and 66,533,415 units issued and outstanding at September 30, 2017 and December 31, 2016)612.0
 564.5
Total Crestwood Equity Partners LP partners’ capital2,178.4
 2,346.5
Interest of non-controlling partners in subsidiaries199.9
 192.5
Total partners’ capital2,378.3
 2,539.0
Total liabilities and partners’ capital$4,525.3
 $4,448.9
CRESTWOOD EQUITY PARTNERS LP
CONSOLIDATED BALANCE SHEETS
(in millions, except unit information)
September 30,
2023		December 31,
2022
 (unaudited) 
Assets
Current assets:
Cash$23.8 $7.5 
Accounts receivable, less allowance for doubtful accounts of $0.5
     at both September 30, 2023 and December 31, 2022
350.1 432.2 
Inventory179.9 122.6 
Assets from price risk management activities38.0 72.8 
Prepaid expenses and other current assets8.5 18.7 
Total current assets600.3 653.8 
Property, plant and equipment5,467.5 5,353.2 
Less: accumulated depreciation999.6 822.8 
Property, plant and equipment, net4,467.9 4,530.4 
Intangible assets1,234.6 1,306.3 
Less: accumulated amortization277.9 300.7 
Intangible assets, net956.7 1,005.6 
Goodwill223.0 223.0 
Operating lease right-of-use assets, net23.3 24.4 
Investments in unconsolidated affiliates77.1 119.5 
Other non-current assets11.5 10.3 
Total assets$6,359.8 $6,567.0 
Liabilities and capital
Current liabilities:
Accounts payable$256.9 $305.5 
Accrued expenses and other liabilities183.6 180.8 
Liabilities from price risk management activities17.6 23.9 
Total current liabilities458.1 510.2 
Long-term debt, less current portion3,302.5 3,378.3 
Other long-term liabilities323.4 333.4 
Deferred income taxes3.4 3.5 
Total liabilities4,087.4 4,225.4 
Commitments and contingencies (Note 9)
Interest of non-controlling partner in subsidiary456.0 434.4 
Partners’ capital:
Crestwood Equity Partners LP partners’ capital (105,099,889 and 104,646,374 common units issued and outstanding at September 30, 2023 and December 31, 2022)1,204.4 1,295.2 
Preferred units (71,257,445 units issued and outstanding at both September 30, 2023 and December 31, 2022)612.0 612.0 
Total partners’ capital1,816.4 1,907.2 
Total liabilities and capital$6,359.8 $6,567.0 
See accompanying notes.

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CRESTWOOD EQUITY PARTNERS LP
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per unit data)
(unaudited)

Three Months EndedNine Months Ended
 September 30,September 30,
 2023202220232022
Revenues:
Product revenues$989.2 $1,332.8 $2,991.5 $3,938.3 
Product revenues - related party (Note 15)
— 83.2 — 222.7 
Service revenues150.2 92.4 432.2 286.8 
Service revenues - related party (Note 15)
— 57.6 — 150.0 
Total revenues1,139.4 1,566.0 3,423.7 4,597.8 
Costs of product/services sold (exclusive of items shown separately below):
Product costs898.1 1,228.6 2,668.1 3,613.4 
Product costs - related party (Note 15)
— 51.3 0.5 232.9 
Service costs3.5 6.9 15.0 18.1 
Total costs of products/services sold901.6 1,286.8 2,683.6 3,864.4 
Operating expenses and other:
Operations and maintenance56.9 55.0 166.7 144.0 
General and administrative30.2 33.9 86.8 103.8 
Depreciation, amortization and accretion80.2 86.9 242.7 242.3 
Loss on long-lived assets, net2.6 175.9 4.8 186.9 
Gain on acquisition— (75.3)— (75.3)
169.9 276.4 501.0 601.7 
Operating income67.9 2.8 239.1 131.7 
Earnings from unconsolidated affiliates, net1.1 3.2 135.2 12.2 
Interest and debt expense, net(56.9)(47.6)(167.9)(123.8)
Other income, net0.2 — 0.3 0.2 
Income (loss) before income taxes12.3 (41.6)206.7 20.3 
Provision for income taxes(0.2)(1.4)(1.1)(1.7)
Net income (loss)12.1 (43.0)205.6 18.6 
Net income attributable to non-controlling partner32.1 10.3 52.6 30.8 
Net income (loss) attributable to Crestwood Equity Partners LP(20.0)(53.3)153.0 (12.2)
Net income attributable to preferred units15.1 15.0 45.1 45.0 
Net income (loss) attributable to partners$(35.1)$(68.3)$107.9 $(57.2)
Net income (loss) per limited partner unit: (Note 12)
Basic$(0.33)$(0.64)$1.03 $(0.59)
Diluted$(0.33)$(0.64)$0.99 $(0.59)
Weighted-average limited partners’ units outstanding:
Basic105.2 107.1 105.2 97.1 
Dilutive— — 3.9 — 
Diluted105.2 107.1 109.1 97.1 
CRESTWOOD EQUITY PARTNERS LP
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except unit and per unit data)
(unaudited)
 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Revenues:       
Product revenues:       
Gathering and processing$353.3
 $206.1
 $971.7
 $567.7
Marketing, supply and logistics502.0
 271.3
 1,353.7
 735.2
 855.3
 477.4
 2,325.4
 1,302.9
Services revenues:       
Gathering and processing80.6
 72.5
 235.0
 217.9
Storage and transportation6.2
 18.3
 24.7
 131.5
Marketing, supply and logistics13.0
 18.7
 47.5
 71.1
Related party (Note 11)
0.5
 0.7
 1.4
 2.1
 100.3
 110.2
 308.6
 422.6
Total revenues955.6
 587.6
 2,634.0
 1,725.5
        
Costs of product/services sold (exclusive of items shown separately below):       
Product costs:       
Gathering and processing374.9
 221.1
 1,038.1
 618.4
Marketing, supply and logistics468.4
 229.1
 1,185.6
 605.1
Related party (Note 11)
3.7
 5.0
 11.8
 13.7
 847.0
 455.2
 2,235.5
 1,237.2
Service costs:       
Gathering and processing—
 —
 —
 0.1
Storage and transportation0.2
 0.1
 0.3
 4.9
Marketing, supply and logistics11.3
 11.4
 35.8
 37.9
 11.5
 11.5
 36.1
 42.9
Total costs of products/services sold858.5
 466.7
 2,271.6
 1,280.1
        
Expenses:       
Operations and maintenance35.5
 33.1
 103.4
 119.9
General and administrative22.5
 18.3
 71.6
 70.2
Depreciation, amortization and accretion48.1
 50.3
 145.2
 177.0
 106.1
 101.7
 320.2
 367.1
Other operating expenses:       
Loss on long-lived assets, net(6.3) (2.1) (6.3) (34.8)
Goodwill impairment—
 —
 —
 (109.7)
Operating income (loss)(15.3) 17.1
 35.9
 (66.2)

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CRESTWOOD EQUITY PARTNERS LP
CONSOLIDATED STATEMENTS OF OPERATIONS (continued)
(in millions, except unit and per unit data)
(unaudited)
 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Earnings from unconsolidated affiliates, net11.5
 13.4
 29.2
 26.1
Interest and debt expense, net(24.2) (27.5) (74.8) (97.9)
Gain (loss) on modification/extinguishment of debt—
 —
 (37.7) 10.0
Other income, net0.2
 0.2
 0.4
 0.4
Income (loss) before income taxes(27.8) 3.2
 (47.0) (127.6)
Provision for income taxes(0.1) (0.2) —
 (0.2)
Net income (loss)(27.9) 3.0
 (47.0) (127.8)
Net income attributable to non-controlling partners6.4
 6.1
 18.8
 18.0
Net loss attributable to Crestwood Equity Partners LP(34.3) (3.1) (65.8) (145.8)
Net income attributable to preferred units16.2
 6.9
 47.5
 16.6
Net loss attributable to partners$(50.5) $(10.0) $(113.3) $(162.4)
        
Subordinated unitholders' interest in net loss$—
 $—
 $—
 $—
Common unitholders' interest in net loss$(50.5) $(10.0) $(113.3) $(162.4)
Net loss per limited partner unit:       
Basic$(0.72) $(0.14) $(1.63) $(2.35)
Diluted$(0.72) $(0.14) $(1.63) $(2.35)
Weighted-average limited partners’ units outstanding (in thousands):
      
Basic69,725
 69,050
 69,692
 69,002
Dilutive units—
 —
 —
 —
Diluted69,725
 69,050
 69,692
 69,002


See accompanying notes.

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CRESTWOOD EQUITY PARTNERS LP
CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL
(in millions)
(unaudited)

PreferredCommon
UnitsCapital UnitsCapitalTotal Partners’
Capital
Balance at December 31, 202271.3 $612.0 104.6 $1,295.2 $1,907.2 
Distributions to partners— (15.0)— (68.9)(83.9)
Unit-based compensation— — 1.1 11.8 11.8 
Taxes paid for unit-based compensation vesting— — (0.5)(14.8)(14.8)
Other— — 0.1 1.6 1.6 
Net income— 15.0 — 16.4 31.4 
Balance at March 31, 202371.3 $612.0 105.3 $1,241.3 $1,853.3 
Distributions to partners— (15.0)— (68.9)(83.9)
Unit-based compensation— — — 9.2 9.2 
Taxes paid for unit-based compensation vesting— — (0.1)(0.8)(0.8)
Other— — — (0.2)(0.2)
Net income— 15.0 — 126.6 141.6 
Balance at June 30, 202371.3 $612.0 105.2 $1,307.2 $1,919.2 
Distributions to partners— (15.1)— (68.9)(84.0)
Unit-based compensation— — — 6.5 6.5 
Taxes paid for unit-based compensation vesting— — (0.1)(4.9)(4.9)
Other— — — (0.4)(0.4)
Net income (loss)— 15.1 — (35.1)(20.0)
Balance at September 30, 202371.3 $612.0 105.1 $1,204.4 $1,816.4 
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CRESTWOOD EQUITY PARTNERS LP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
(unaudited)
 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Net income (loss)$(27.9) $3.0
 $(47.0) $(127.8)
Change in fair value of Suburban Propane Partners, L.P. units0.3
 —
 (0.6) 1.3
Comprehensive income (loss)(27.6) 3.0
 (47.6) (126.5)
Comprehensive income attributable to non-controlling interest6.4
 6.1
 18.8
 18.0
Comprehensive loss attributable to Crestwood Equity Partners LP$(34.0) $(3.1) $(66.4) $(144.5)
CRESTWOOD EQUITY PARTNERS LP

CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL (continued)
(in millions)
(unaudited)

PreferredCommon
UnitsCapitalUnitsCapitalTotal Partners’
Capital
Balance at December 31, 202171.3 $612.0 63.0 $487.6 $1,099.6 
Distributions to partners— (15.0)— (60.9)(75.9)
Issuance of common units (Note 3)
— — 33.8 930.0 930.0 
Unit-based compensation— — 1.6 13.0 13.0 
Taxes paid for unit-based compensation vesting— — (0.5)(14.9)(14.9)
Other— — 0.1 2.2 2.2 
Net income (loss)— 15.0 — (3.0)12.0 
Balance at March 31, 202271.3 $612.0 98.0 $1,354.0 $1,966.0 
Distributions to partners— (15.0)— (64.2)(79.2)
Unit-based compensation— — — 8.6 8.6 
Taxes paid for unit-based compensation vesting— — — (0.7)(0.7)
Other— — — (0.4)(0.4)
Net income— 15.0 — 14.1 29.1 
Balance at June 30, 202271.3 $612.0 98.0 $1,311.4 $1,923.4 
Distributions to partners— (15.0)— (71.6)(86.6)
Issuance of common units (Note 3)
— — 11.3 270.8 270.8 
Purchase of common units (Note 11)
— — — (123.7)(123.7)
Retirement of common units (Note 11)
— — (4.6)— — 
Unit-based compensation— — — 8.0 8.0 
Taxes paid for unit-based compensation vesting— — — (0.2)(0.2)
Other— — — (0.2)(0.2)
Net income (loss)— 15.0 — (68.3)(53.3)
Balance at September 30, 202271.3 $612.0 104.7 $1,326.2 $1,938.2 

See accompanying notes.


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CRESTWOOD EQUITY PARTNERS LP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)

Nine Months Ended
 September 30,
 20232022
Operating activities
Net income$205.6 $18.6 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion242.7 242.3 
Amortization of debt-related deferred costs and fair value adjustment2.5 1.7 
Unit-based compensation25.7 26.8 
Loss on long-lived assets, net4.8 186.9 
Gain on acquisition— (75.3)
Earnings from unconsolidated affiliates, net, adjusted for cash distributions received(133.3)(0.9)
Deferred income taxes(0.1)1.1 
Other0.1 — 
Changes in operating assets and liabilities30.5 (123.9)
Net cash provided by operating activities378.5 277.3 
Investing activities
Acquisitions, net of cash acquired (Note 3)
— (604.3)
Purchases of property, plant and equipment(164.0)(147.3)
Investments in unconsolidated affiliates(7.2)(90.2)
Capital distributions from unconsolidated affiliates4.4 9.4 
Net proceeds from sale of assets, including equity investments188.2 315.2 
Net cash provided by (used in) investing activities21.4 (517.2)
Financing activities
Proceeds from the issuance of long-term debt2,058.3 3,072.0 
Payments on long-term debt(2,127.4)(2,393.1)
Payments on finance leases(2.0)(31.3)
Payments for deferred financing costs(9.2)(1.8)
Purchase of common units— (123.7)
Distributions to partners(206.7)(196.7)
Distributions to non-controlling partner(31.0)(31.0)
Distributions to preferred unitholders(45.1)(45.0)
Taxes paid for unit-based compensation vesting(20.5)(15.8)
Other— (0.6)
Net cash provided by (used in) financing activities(383.6)233.0 
Net change in cash16.3 (6.9)
Cash at beginning of period7.5 13.3 
Cash at end of period$23.8 $6.4 
Supplemental schedule of noncash investing activities
Net change to property, plant and equipment through accounts payable and accrued expenses$(18.4)$19.9 
CRESTWOOD EQUITY PARTNERS LP
CONSOLIDATED STATEMENT OF PARTNERS’ CAPITAL
(in millions)
(unaudited)
 Preferred Partners    
 Units Capital Common Units Subordinated Units Capital 
Non-Controlling
Partners
 
Total Partners’
Capital
Balance at December 31, 201666.5
 $564.5
 69.1
 0.4
 $1,782.0
 $192.5
 $2,539.0
Distributions to partners4.8
 —
 —
 —
 (125.4) (11.4) (136.8)
Unit-based compensation charges—
 —
 0.9
 —
 18.9
 —
 18.9
Taxes paid for unit-based compensation vesting—
 —
 (0.2) —
 (5.3) —
 (5.3)
Change in fair value of Suburban Propane Partners, L.P. units—
 —
 —
 —
 (0.6) —
 (0.6)
Issuance of common units—
 —
 0.4
 —
 10.6
 —
 10.6
Other—
 —
 —
 —
 (0.5) —
 (0.5)
Net income (loss)—
 47.5
 —
 —
 (113.3) 18.8
 (47.0)
Balance at September 30, 201771.3
 $612.0
 70.2
 0.4
 $1,566.4
 $199.9
 $2,378.3


See accompanying notes.


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CRESTWOOD EQUITY PARTNERS LP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
 Nine Months Ended
 September 30,
 2017 2016
Operating activities   
Net loss$(47.0) $(127.8)
Adjustments to reconcile net loss to net cash provided by operating activities:   
Depreciation, amortization and accretion145.2
 177.0
Amortization of debt-related deferred costs5.4
 5.1
Unit-based compensation charges18.9
 13.4
Loss on long-lived assets, net6.3
 34.8
Goodwill impairment—
 109.7
(Gain) loss on modification/extinguishment of debt37.7
 (10.0)
Earnings from unconsolidated affiliates, net, adjusted for cash distributions received(2.5) (3.9)
Deferred income taxes(0.7) (0.9)
Other(0.3) 0.3
Changes in operating assets and liabilities65.2
 46.8
Net cash provided by operating activities228.2
 244.5
Investing activities   
Purchases of property, plant and equipment(134.4) (79.3)
Investment in unconsolidated affiliates(46.5) (6.2)
Capital distributions from unconsolidated affiliates35.3
 9.2
Net proceeds from sale of assets1.3
 943.1
Net cash provided by (used in) investing activities(144.3) 866.8
Financing activities   
Proceeds from the issuance of long-term debt2,209.8
 1,364.0
Payments on long-term debt(2,159.2) (2,279.4)
Payments on capital leases(2.2) (1.5)
Payments for debt-related deferred costs(1.0) (3.4)
Distributions to partners(125.4) (178.4)
Distributions paid to non-controlling partners(11.4) (11.4)
Issuance of common units10.6
 —
Taxes paid for unit-based compensation vesting(5.3) (0.8)
Other—
 0.1
Net cash used in financing activities(84.1) (1,110.8)
Net change in cash(0.2) 0.5
Cash at beginning of period1.6
 0.5
Cash at end of period$1.4
 $1.0
Supplemental schedule of noncash investing and financing activities   
Net change to property, plant and equipment through accounts payable and accrued expenses$(15.4) $(9.4)
CRESTWOOD MIDSTREAM PARTNERS LP
CONSOLIDATED BALANCE SHEETS
(in millions)
September 30,
2023		December 31,
2022
(unaudited)
Assets
Current assets:
Cash$23.4 $7.1 
Accounts receivable, less allowance for doubtful accounts of $0.5
     at both September 30, 2023 and December 31, 2022
350.0 432.2 
Inventory179.9 122.6 
Assets from price risk management activities38.0 72.8 
Prepaid expenses and other current assets8.5 18.7 
Total current assets599.8 653.4 
Property, plant and equipment5,464.3 5,350.0 
Less: accumulated depreciation999.3 822.6 
Property, plant and equipment, net4,465.0 4,527.4 
Intangible assets1,234.6 1,306.3 
Less: accumulated amortization277.9 300.7 
Intangible assets, net956.7 1,005.6 
Goodwill223.0 223.0 
Operating lease right-of-use assets, net23.3 24.4 
Investments in unconsolidated affiliates77.1 119.5 
Other non-current assets9.3 8.1 
Total assets$6,354.2 $6,561.4 
Liabilities and capital
Current liabilities:
Accounts payable$256.9 $305.4 
Accrued expenses and other liabilities182.7 179.5 
Liabilities from price risk management activities17.6 23.9 
Total current liabilities457.2 508.8 
Long-term debt, less current portion3,302.5 3,378.3 
Other long-term liabilities321.3 330.3 
Deferred income taxes2.5 2.3 
Total liabilities4,083.5 4,219.7 
Commitments and contingencies (Note 9)
Interest of non-controlling partner in subsidiary456.0 434.4 
Partners’ capital1,814.7 1,907.3 
Total liabilities and capital$6,354.2 $6,561.4 

See accompanying notes.

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CRESTWOOD MIDSTREAM PARTNERS LP
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions)
CRESTWOOD MIDSTREAM PARTNERS LP
CONSOLIDATED BALANCE SHEETS
(in millions)

 September 30,
2017		 December 31,
2016
 (unaudited)  
Assets   
Current assets:   
Cash$1.1
 $1.3
Accounts receivable, less allowance for doubtful accounts of $1.2 million and $1.9 million at September 30, 2017 and December 31, 2016344.7
 289.8
Inventory92.9
 66.0
Assets from price risk management activities7.8
 6.3
Prepaid expenses and other current assets5.2
 9.7
Total current assets451.7
 373.1
Property, plant and equipment2,929.6
 2,885.5
Less: accumulated depreciation and depletion687.4
 587.1
Property, plant and equipment, net2,242.2
 2,298.4
Intangible assets883.1
 883.1
Less: accumulated amortization268.1
 230.2
Intangible assets, net615.0
 652.9
Goodwill199.0
 199.0
Investments in unconsolidated affiliates1,198.5
 1,115.4
Other assets2.6
 1.8
Total assets$4,709.0
 $4,640.6
Liabilities and partners’ capital   
Current liabilities:   
Accounts payable$310.0
 $214.5
Accrued expenses and other liabilities111.8
 87.9
Liabilities from price risk management activities52.6
 28.6
Current portion of long-term debt0.9
 1.0
Total current liabilities475.3
 332.0
Long-term debt, less current portion1,615.4
 1,522.7
Other long-term liabilities45.3
 42.0
Deferred income taxes0.7
 0.7
Commitments and contingencies (Note 10)
   
Partners’ capital2,372.4
 2,550.7
Interest of non-controlling partners in subsidiary199.9
 192.5
Total partners’ capital2,572.3
 2,743.2
Total liabilities and partners’ capital$4,709.0
 $4,640.6
(unaudited)

  Three Months EndedNine Months Ended
September 30,September 30,
 2023202220232022
Revenues:
Product revenues$989.2 $1,332.8 $2,991.5 $3,938.3 
Product revenues - related party (Note 15)
— 83.2 — 222.7 
Service revenues150.2 92.4 432.2 286.8 
Service revenues - related party (Note 15)
— 57.6 — 150.0 
Total revenues1,139.4 1,566.0 3,423.7 4,597.8 
Costs of product/services sold (exclusive of items shown separately below):
Product costs898.1 1,228.6 2,668.1 3,613.4 
Product costs - related party (Note 15)
— 51.3 0.5 232.9 
Service costs3.5 6.9 15.0 18.1 
Total costs of product/services sold901.6 1,286.8 2,683.6 3,864.4 
Operating expenses and other:
Operations and maintenance56.9 55.0 166.7 144.0 
General and administrative20.8 32.3 74.6 99.0 
Depreciation, amortization and accretion80.1 86.8 242.5 248.0 
Loss on long-lived assets, net2.6 247.6 4.8 311.9 
Gain on acquisition— (75.3)— (75.3)
160.4 346.4 488.6 727.6 
Operating income (loss)77.4 (67.2)251.5 5.8 
Earnings from unconsolidated affiliates, net1.1 3.2 135.2 12.2 
Interest and debt expense, net(56.9)(47.6)(167.9)(123.8)
Income (loss) before income taxes21.6 (111.6)218.8 (105.8)
Provision for income taxes(0.2)(1.4)(1.0)(1.6)
Net income (loss)21.4 (113.0)217.8 (107.4)
Net income attributable to non-controlling partner32.1 10.3 52.6 30.8 
Net income (loss) attributable to Crestwood Midstream Partners LP$(10.7)$(123.3)$165.2 $(138.2)


See accompanying notes.



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CRESTWOOD MIDSTREAM PARTNERS LP
CRESTWOOD MIDSTREAM PARTNERS LP
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions)
(unaudited)
  Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Revenues:       
Product revenues:       
Gathering and processing$353.3
 $206.1
 $971.7
 $567.7
Marketing, supply and logistics502.0
 271.3
 1,353.7
 735.2
 855.3
 477.4
 2,325.4
 1,302.9
Service revenues:       
Gathering and processing80.6
 72.5
 235.0
 217.9
Storage and transportation6.2
 18.3
 24.7
 131.5
Marketing, supply and logistics13.0
 18.7
 47.5
 71.1
Related party (Note 11)
0.5
 0.7
 1.4
 2.1
 100.3
 110.2
 308.6
 422.6
Total revenues955.6
 587.6
 2,634.0
 1,725.5
        
Costs of product/services sold (exclusive of items shown separately below):       
Product costs:       
Gathering and processing374.9
 221.1
 1,038.1
 618.4
Marketing, supply and logistics468.4
 229.1
 1,185.6
 605.1
Related party (Note 11)
3.7
 5.0
 11.8
 13.7
 847.0
 455.2
 2,235.5
 1,237.2
Service costs:       
Gathering and processing—
 —
 —
 0.1
Storage and transportation0.2
 0.1
 0.3
 4.9
Marketing, supply and logistics11.3
 11.4
 35.8
 37.9
 11.5
 11.5
 36.1
 42.9
Total costs of product/services sold858.5
 466.7
 2,271.6
 1,280.1
        
Expenses:       
Operations and maintenance35.5
 33.6
 103.4
 116.7
General and administrative21.4
 17.3
 69.0
 67.5
Depreciation, amortization and accretion50.9
 53.2
 153.5
 185.2
 107.8
 104.1
 325.9
 369.4
Other operating expenses:       
Loss on long-lived assets, net(6.3) (2.1) (6.3) (34.8)
Goodwill impairment—
 —
 —
 (109.7)
Operating income (loss)(17.0) 14.7
 30.2
 (68.5)
CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

(in millions)
11
Table of Contents(unaudited)

Total Partners’ Capital
Balance at December 31, 2022$1,907.3 
Distributions to partners(85.9)
Unit-based compensation11.8 
Taxes paid for unit-based compensation vesting(14.8)
Net income32.8 
Balance at March 31, 2023$1,851.2 
Distributions to partners(85.4)
Unit-based compensation9.2 
Taxes paid for unit-based compensation vesting(0.8)
Net income143.1 
Balance at June 30, 2023$1,917.3 
Distributions to partners(93.5)
Unit-based compensation6.5 
Taxes paid for unit-based compensation vesting(4.9)
Net loss(10.7)
Balance at September 30, 2023$1,814.7 


Total Partners’ Capital
Balance at December 31, 2021$1,232.3 
Non-cash contribution from partner (Note 11)
1,075.1 
Cash contribution from partner (Note 11)
14.9 
Distributions to partners(238.1)
Unit-based compensation13.0 
Taxes paid for unit-based compensation vesting(14.9)
Other0.1 
Net income10.0 
Balance at March 31, 2022$2,092.4 
Distributions to partners(81.6)
Unit-based compensation8.6 
Taxes paid for unit-based compensation vesting(0.7)
Net loss(24.9)
Balance at June 30, 2022$1,993.8 
Non-cash contribution from partner (Note 11)
127.3 
Cash contribution from partner (Note 11)
149.4 
Distributions to partners(217.9)
Unit-based compensation8.0 
Taxes paid for unit-based compensation vesting(0.2)
Net loss(123.3)
Balance at September 30, 2022$1,937.1 
CRESTWOOD MIDSTREAM PARTNERS LP
CONSOLIDATED STATEMENTS OF OPERATIONS (continued)
(in millions)
(unaudited)
  Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Earnings from unconsolidated affiliates, net11.5
 13.4
 29.2
 26.1
Interest and debt expense, net(24.2) (27.5) (74.8) (97.9)
Gain (loss) on modification/extinguishment of debt—
 —
 (37.7) 10.0
Income (loss) before income taxes(29.7) 0.6
 (53.1) (130.3)
Provision for income taxes(0.1) —
 —
 —
Net income (loss)(29.8) 0.6
 (53.1) (130.3)
Net income attributable to non-controlling partners6.4
 6.1
 18.8
 18.0
Net loss attributable to Crestwood Midstream Partners LP$(36.2) $(5.5) $(71.9) $(148.3)


See accompanying notes.

11

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CRESTWOOD MIDSTREAM PARTNERS LP
CRESTWOOD MIDSTREAM PARTNERS LP
CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL
(in millions)
(unaudited)

  Partners Non-Controlling Partners 
Total Partners’
Capital
Balance at December 31, 2016 $2,550.7
 $192.5
 $2,743.2
Distributions to partners (119.5) (11.4) (130.9)
Unit-based compensation charges 18.9
 —
 18.9
Taxes paid for unit-based compensation vesting (5.3) —
 (5.3)
Other (0.5) —
 (0.5)
Net income (loss) (71.9) 18.8
 (53.1)
Balance at September 30, 2017 $2,372.4
 $199.9
 $2,572.3
CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(unaudited)
Nine Months Ended
 September 30,
 20232022
Operating activities
Net income (loss)$217.8 $(107.4)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, amortization and accretion242.5 248.0 
Amortization of debt-related deferred costs and fair value adjustment2.5 1.7 
Unit-based compensation25.7 26.8 
Loss on long-lived assets, net4.8 311.9 
Gain on acquisition— (75.3)
Earnings from unconsolidated affiliates, net, adjusted for cash distributions received(133.3)(0.9)
Deferred income taxes0.2 1.2 
Other0.1 — 
Changes in operating assets and liabilities31.2 (123.9)
Net cash provided by operating activities391.5 282.1 
Investing activities
Acquisitions, net of cash acquired (Note 3)
— (602.7)
Purchases of property, plant and equipment(164.0)(146.6)
Investments in unconsolidated affiliates(7.2)(90.2)
Capital distributions from unconsolidated affiliates4.4 9.4 
Net proceeds from sale of assets, including equity investments188.2 315.2 
Net cash provided by (used in) investing activities21.4 (514.9)
Financing activities
Proceeds from the issuance of long-term debt2,058.3 3,072.0 
Payments on long-term debt(2,127.4)(2,393.1)
Payments on finance leases(2.0)(31.3)
Payments for deferred financing costs(9.2)(1.8)
Contributions from partner— 164.3 
Distributions to partners(264.8)(537.6)
Distributions to non-controlling partner(31.0)(31.0)
Taxes paid for unit-based compensation vesting(20.5)(15.8)
Net cash provided by (used in) financing activities(396.6)225.7 
Net change in cash16.3 (7.1)
Cash at beginning of period7.1 12.9 
Cash at end of period$23.4 $5.8 
Supplemental schedule of non-cash investing activities
Net change to property, plant and equipment through accounts payable and accrued expenses$(18.4)$19.9 

See accompanying notes.



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CRESTWOOD MIDSTREAM PARTNERS LP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)

 Nine Months Ended
 September 30,
 2017 2016
Operating activities   
Net loss$(53.1) $(130.3)
Adjustments to reconcile net loss to net cash provided by operating activities:   
Depreciation, amortization and accretion153.5
 185.2
Amortization of debt-related deferred costs5.4
 5.1
Unit-based compensation charges18.9
 13.4
Goodwill impairment—
 109.7
Loss on long-lived assets6.3
 34.8
(Gain) loss on modification/extinguishment of debt37.7
 (10.0)
Earnings from unconsolidated affiliates, net, adjusted for cash distributions received(2.5) (3.9)
Deferred income taxes0.1
 0.2
Other(0.3) 0.3
Changes in operating assets and liabilities66.9
 46.3
Net cash provided by operating activities232.9
 250.8
Investing activities   
Purchases of property, plant and equipment(134.4) (79.3)
Investment in unconsolidated affiliates(46.5) (6.2)
Capital distributions from unconsolidated affiliates35.3
 9.2
Net proceeds from sale of assets1.3
 943.1
Net cash provided by (used in) investing activities(144.3) 866.8
Financing activities   
Proceeds from the issuance of long-term debt2,209.8
 1,364.0
Payments on long-term debt(2,159.2) (2,279.2)
Payments on capital leases(2.2) (1.5)
Payments for debt-related deferred costs(1.0) (3.4)
Distributions to partners(130.9) (196.4)
Taxes paid for unit-based compensation vesting(5.3) (0.8)
Other—
 0.1
Net cash used in financing activities(88.8) (1,117.2)
Net change in cash(0.2) 0.4
Cash at beginning of period1.3
 0.1
Cash at end of period$1.1
 $0.5
Supplemental schedule of non-cash investing and financing activities   
Net change to property, plant and equipment through accounts payable and accrued expenses$(15.4) $(9.4)




See accompanying notes.

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CRESTWOOD EQUITY PARTNERS LP
CRESTWOOD MIDSTREAM PARTNERS LP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


Note 1 – Organization and Business Description

Organization


The accompanying notes to the consolidated financial statements apply to Crestwood Equity Partners LP (Crestwood Equity or CEQP) and Crestwood Midstream Partners LP unless(Crestwood Midstream or CMLP).

The accompanying consolidated financial statements and related notes should be read in conjunction with our 2022 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 27, 2023. The financial information as of September 30, 2023 and for the three and nine months ended September 30, 2023 and 2022, is unaudited. The consolidated balance sheets as of December 31, 2022 were derived from the audited balance sheets filed in our 2022 Annual Report on Form 10-K.

Unless otherwise indicated. Referencesindicated, references in this report to “we,” “us,” “our,” “ours,” “our company,” the “partnership,“Partnership,” the “Company,” "Crestwood“Crestwood Equity,"” “CEQP,” and similar terms refer to either Crestwood Equity Partners LP itself or Crestwood Equity Partners LP and its consolidated subsidiaries, as the context requires. Unless otherwise indicated, references to "Crestwood Midstream"“Crestwood Midstream” and "CMLP"“CMLP” refer to Crestwood Midstream Partners LP and its consolidated subsidiaries.subsidiaries, as the context requires.


The accompanying consolidated financial statementsOrganization

Energy Transfer LP Merger. On November 3, 2023, Crestwood Equity is expected to merge with and related notes shouldinto a direct wholly-owned subsidiary of Energy Transfer LP (Energy Transfer) in an all-equity transaction valued at approximately $7.1 billion (the Energy Transfer Merger). On August 16, 2023, Crestwood Equity entered into a merger agreement with Energy Transfer pursuant to which each Crestwood Equity common unit representing limited partner interests in Crestwood Equity issued and outstanding immediately prior to the Energy Transfer Merger will be readconverted into the right to receive 2.07 common units representing limited partner interests in conjunctionEnergy Transfer. Each preferred unit representing limited partner interests in Crestwood Equity issued and outstanding immediately prior to the Energy Transfer Merger will, at the election of the holder of such preferred unit, be (i) converted into a preferred unit of Energy Transfer that has substantially similar terms, including with respect to economics and structural protections, as the preferred units of Crestwood Equity, (ii) redeemed in exchange for cash, at a price of 108% of the preferred unit price plus accrued and unpaid distributions to the date of such redemption, or (iii) converted into common units, at the then-applicable conversion ratio (one common unit for 10 preferred), subject to the payment of any accrued but unpaid distributions prior to Energy Transfer Merger. In connection with the Energy Transfer Merger and at the direction of Energy Transfer, Crestwood Equity conducted a consent solicitation pursuant to which Crestwood Equity solicited consent from the preferred unitholders to approve an amendment to its Sixth Amended and Restated Agreement of Limited Partnership. Pursuant to the proposed amendment, among other things, (i) the preferred unitholders electing a cash redemption in the Energy Transfer Merger would receive such cash redemption price as increased from 101% to 108% of the preferred unit price; and (ii) the preferred unitholders electing to receive preferred units of Energy Transfer would receive such preferred units of Energy Transfer with terms similar to Energy Transfer’s other outstanding series of preferred units. Crestwood Equity received the consents from the preferred unitholders necessary to approve the proposed amendment and therefore, the proposed amendment will be adopted at the closing of the Energy Transfer Merger.

For more information regarding the merger and the merger agreement, see our 2016 AnnualCurrent Report on Form 10-K8-K filed with the SecuritiesSEC on August 16, 2023 and our definitive merger proxy statement on Schedule 14A filed with the SEC on September 29, 2023.

Crestwood Equity Partners LP. CEQP is a publicly-traded Delaware limited partnership, and its common units are listed on the New York Stock Exchange Commission (SEC)(NYSE) under the ticker symbol “CEQP” and its preferred units are listed on February 27, 2017. The financial informationthe NYSE under the ticker symbol “CEQP-P.” In connection with the consummation of the Energy Transfer Merger, we requested that the NYSE delist our common and preferred units and, as a result, trading of September 30, 2017,our common and forpreferred units will be suspended on November 3, 2023. We also requested that the threeNYSE file a Form 25 with the SEC notifying the SEC of the delisting of our common and nine months ended September 30, 2017preferred units and 2016, is unaudited. The consolidated balance sheets asthe withdrawal of December 31, 2016, were derived fromregistration of our common and preferred units under Section 12(b) of the audited balance sheets filedExchange Act. Following the effectiveness of the Form 25, we intend to file with the SEC a Form 15 regarding the termination of registration of our common and preferred units under the Exchange Act and the suspension of reporting obligations with respect to our common and preferred units.

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Crestwood Midstream Partners LP. Crestwood Equity owns a 99.9% limited partnership interest in our 2016 Annual Report on Form 10-K.Crestwood Midstream and Crestwood Gas Services GP LLC, a wholly-owned subsidiary of Crestwood Equity, owns a 0.1% limited partnership interest in Crestwood Midstream. Crestwood Midstream GP LLC, a wholly-owned subsidiary of Crestwood Equity, owns the non-economic general partnership interest of Crestwood Midstream.


Business Description


Crestwood Equity is a publicly-traded (NYSE: CEQP) Delaware limited partnership that develops, acquires, owns or controls, and operates primarily fee-based assets and operations within the energy midstream sector. We provide broad-ranging infrastructure solutions across the value chain to service premier liquids-rich natural gas and crude oil shale plays across the United States.North America. We own and operate a diversified portfolio of natural gas liquids (NGLs), crude oil, and natural gas and produced water gathering, processing, storage, disposal and transportation assets andthat connect fundamental energy supply with energy demand across North America.the United States. Crestwood Equity is a holding company and all of its consolidated operating assets are owned by or through its wholly-owned subsidiary, Crestwood Midstream, a Delaware limited partnership.Midstream.



See Note 13 for information regarding our operating and reporting segments.


Note 2 – Basis of Presentation and Summary of Significant Accounting Policies


Basis of Presentation


Our consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP)in the United States (U.S. GAAP) and include the accounts of all consolidated subsidiaries after the elimination of all intercompany accounts and transactions. In management’s opinion, all necessary adjustments to fairly present our results of operations, financial position and cash flows for the periods presented have been made and all such adjustments are of a normal and recurring nature. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to the rules and regulations of the SEC.


Significant Accounting Policies


There were no material changes in our significant accounting policies from those described in our 20162022 Annual Report on Form 10-K. Below is


Note 3 – Acquisitions and Divestitures

Oasis Merger

On February 1, 2022, we completed the merger with Oasis Midstream Partners LP (Oasis Midstream), in an updateequity and cash transaction which was valued at approximately $1.8 billion (the Oasis Merger). Pursuant to the merger agreement, Oasis Petroleum Inc., now known as Chord Energy Corporation (Chord), received $150 million in cash plus approximately 20.9 million newly issued CEQP common units in exchange for its 33.8 million common units held in Oasis Midstream. In addition, Oasis Midstream’s public unitholders received approximately 12.9 million newly issued CEQP common units in exchange for the approximately 14.8 million Oasis Midstream common units held by them. Additionally, under the merger agreement, Chord received a $10 million cash payment in exchange for its ownership of our accounting policies related to Goodwillthe general partner of Oasis Midstream.

Sendero and Unit-Based Compensation,CPJV Acquisitions

On July 11, 2022, we acquired Sendero Midstream Partners LP (Sendero), a privately-held midstream company, for cash consideration of approximately $631.2 million (Sendero Acquisition). Additionally, on July 11, 2022, we acquired First Reserve Management, L.P.’s (First Reserve) 50% equity interest in Crestwood Permian Basin Holdings LLC (Crestwood Permian) in exchange for approximately $5.9 million in cash and a description of Crestwood Equity's Long Term Incentive Plan.

Goodwillapproximately 11.3 million newly issued CEQP common units (CPJV Acquisition). The goodwill impairments recorded duringfair value of the first quarterassets acquired and liabilities assumed in the CPJV Acquisition exceeded the sum of 2016 primarily resulted from increasing the discount rates utilized in determiningcash consideration paid, the fair value of the reporting units considering the significant, sustained decrease in the market price of our common units issued and the continued decrease in commodity prices and its impact on the midstream industry and our customers during that period. We utilized the income approach to determine the fairhistorical book value of our reporting units given the limited availability of comparable market-based transactions as of March 31, 2016, and we utilized discount rates ranging from 10% to 19%50% equity interest in applying the income approach to determine theCrestwood Permian (which was remeasured at fair value and derecognized) and, as a result, we recognized a gain of approximately $75.3 million, which is included in gain on acquisition in our reporting units with goodwill asconsolidated statements of March 31, 2016.




operations. Prior to the CPJV Acquisition, we owned a 50% equity interest in Crestwood Permian, which we accounted for under the equity method of
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accounting and we reflected this equity investment in our gathering and processing south segment. As a result of the CPJV Acquisition, we control and own 100% of the equity interests in Crestwood Permian.



Divestitures
The following table summarizes goodwill impairments of certain of
Barnett

On July 1, 2022, we sold our reporting units recordedassets in the Barnett Shale to EnLink Midstream, LLC for approximately $290 million, and during the nine months ended September 30, 2016 (2022, Crestwood Midstream recorded a loss on the sale of approximately $53.3 million, which is included in millions):

Gathering and Processing 
Marcellus$8.6
Storage and Transportation 
COLT13.7
Marketing, Supply and Logistics 
Supply and Logistics65.5
Storage and Terminals14.1
Trucking7.8
Total$109.7

Unit-Based Compensation. Effective January 1, 2017, we adopted the provisionsloss on long-lived assets, net on its consolidated statement of Accounting Standards Update (ASU) 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which simplifies several aspectsoperations. Crestwood Equity’s historical carrying value of the accountingproperty, plant and equipment related to our Barnett Shale assets was less than the sales proceeds due to historical impairments previously recorded on the property, plant and equipment by Crestwood Equity and as a result, during the three months ended September 30, 2022, Crestwood Equity recorded a gain on the sale of approximately $72 million, which is included in loss on long-lived assets, net on its consolidated statements of operations.

Marcellus

In October 2022, we sold our assets in the Marcellus Shale to Antero Midstream Corporation for share-based payment award transactions, includingapproximately $206 million, and during the classificationthree months ended September 30, 2022, we recorded a loss on long-lived assets of awards as either equity orapproximately $248.2 million for the difference between the historical carrying value of the net assets and liabilities to be sold and the presentation onproceeds received from the statement of cash flows. The adoption of this accounting standard did not have a material impact onsale.

Other Divestitures

In August 2023, we sold our consolidated financial statements.

Crestwood Equity Long Term Incentive Plan. As oftransportation assets for approximately $8.0 million, and during the three months ended September 30, 2017, Crestwood Equity had 404,847 performance units outstanding under the Crestwood Equity Partners LP Long Term Incentive Plan (Crestwood LTIP) that were issued in 2017. The performance units are designed to provide an incentive for continuous employment to certain key employees. The vesting of performance units is subject to the attainment of certain performance and market goals over2023, we recorded a three-year period, and entitle a participant to receive common units of Crestwood Equity without payment of an exercise price upon vesting. As of September 30, 2017, we had total unamortized compensation expenseloss on long-lived assets of approximately $7.6$2.5 million related to the sale of these performance units, which we expect will be amortized duringassets. During the next three years. We recognized compensation expense of approximately $0.9 million and $2.9 million under the Crestwood LTIP related to these performance units during the three and nine months ended September 30, 2017, which is included in general and administrative expenses2022, we recorded a loss on our consolidated statementslong-lived assets of operations.

New Accounting Pronouncements Issued But Not Yet Adopted

Asapproximately $7.0 million related to the sale of September 30, 2017, the following accounting standards had not yet been adopted by us:

In May 2014, the Financial Accounting Standards Board (FASB) issued ASU 2014-09, Revenue from Contracts with Customers, which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance. We anticipate utilizing the modified retrospective method to adopt the provisions of this standard effective January 1, 2018 and are currently applying the provisions of the standardparts inventory related to our aggregated listing of gathering and processing, storage and transportation, and marketing, supply and logistics revenue contracts that involve revenue generating activities that occur after January 1, 2018. We are also in the process of implementing appropriate changes to our processes, systems and controls to support the accounting and disclosure requirements of the new standard. We are currently evaluating the impact that this standard will have on our consolidated financial statements, and currently believe that the standard will require us to begin classifying certain capital expenditure reimbursements received from our customers as deferred revenue rather than as reductions of property, plant and equipment in our consolidated financial statements.  We currently anticipate that approximately $60 million to $70 million of these net reimbursements will be reclassified to net deferred revenue on January 1, 2018, which would result in a $15 million to $25 million cumulative effect of accounting change being recorded as an increase to partners' capital on January 1, 2018.  In addition, we currently believe that the standard will require us to begin classifying service revenues on certain of our gathering and processing contracts as reductions of costs of product sold prospectively beginning January 1, 2018.  We continue to evaluate the impact that this standard will have on our consolidated financial statements, especially as it relates to non-cash consideration received under certain of our gathering, processing, storage and transportation contracts.legacy Granite Wash operations.





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In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which revises the accounting for leases by requiring certain leases to be recognized as assets and liabilities on the balance sheet, and requiring companies to disclose additional information about their leasing arrangements. We expect to adopt the provisions of this standard effective January 1, 2019 and are currently evaluating the impact that this standard will have on our consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows. We expect to adopt the provisions of this standard effective January 1, 2018 and are currently evaluating the impact that this standard may have on our consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which changes the annual quantitative goodwill impairment test to eliminate the current two step method and replace it with a single test to determine if goodwill is impaired and the amount of any impairment. We are required to adopt the provisions of this standard by January 1, 2020 and are currently evaluating the impact that this standard may have on our consolidated financial statements.


Note 34 – Certain Balance Sheet Information


Accrued Expenses and Other Liabilities


Accrued expenses and other liabilities consisted of the following (in millions):

September 30,December 31,
20232022
CMLP
Accrued expenses$56.9 $66.5 
Accrued property taxes10.5 8.4 
Income tax payable0.7 0.9 
Interest payable64.4 43.2 
Accrued additions to property, plant and equipment16.3 35.6 
Operating leases11.1 10.9 
Finance leases1.7 1.9 
Contract liabilities20.3 11.7 
Asset retirement obligations0.8 0.4 
Total CMLP accrued expenses and other liabilities$182.7 $179.5 
CEQP
Accrued expenses0.9 1.2 
Income tax payable— 0.1 
Total CEQP accrued expenses and other liabilities$183.6 $180.8 

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 CEQP CMLP
 September 30, December 31, September 30, December 31,
 2017 2016 2017 2016
Accrued expenses$40.6
 $46.9
 $39.9
 $45.5
Accrued property taxes6.3
 4.2
 6.3
 4.2
Accrued natural gas purchases0.7
 4.9
 0.7
 4.9
Tax payable—
 1.2
 —
 —
Interest payable39.7
 22.8
 39.7
 22.8
Accrued additions to property, plant and equipment16.6
 1.7
 16.6
 1.7
Capital leases1.1
 1.3
 1.1
 1.3
Deferred revenue7.5
 7.5
 7.5
 7.5
Total accrued expenses and other liabilities$112.5
 $90.5
 $111.8
 $87.9
Other Long-Term Liabilities



Other long-term liabilities consisted of the following (in millions):
September 30,December 31,
20232022
CMLP
Contract liabilities$207.4 $212.3 
Intangible liabilities, net45.5 50.0 
Asset retirement obligations38.5 36.4 
Operating leases15.4 17.4 
Other14.5 14.2 
Total CMLP other long-term liabilities$321.3 $330.3 
CEQP
Other2.1 3.1 
Total CEQP other long-term liabilities$323.4 $333.4 


Note 45 - Investments in Unconsolidated Affiliates


Crestwood Permian BasinTres Holdings LLCDivestiture


In October 2016, CrestwoodOn February 20, 2023, we and Brookfield Infrastructure our wholly-owned subsidiary, andGroup (Brookfield) entered into an affiliate of First Reserve formed a joint venture, Crestwood Permian Basin Holdings LLC (Crestwood Permian), to fund and own the Nautilus gathering system (described below) and other potential investments in the Delaware Permian. As part of this transaction, we transferred to the Crestwood Permian joint venture 100% of the equity interests of Crestwood Permian Basin LLC (Crestwood Permian Basin), which owns the Nautilus gathering system. We manage and account for our 50% ownership interest in Crestwood Permian, which is a VIE, under the equity method of accounting as we exercise significant influence, but do not control Crestwood Permian and we are not its primary beneficiary due to First Reserve’s rights to exercise control over the entity.

Crestwood Permian Basin has a long-term agreement with SWEPI LP (SWEPI), a subsidiary of Royal Dutch Shell plc,Enbridge, Inc. to construct, ownsell each of our respective interests in Tres Palacios Holdings LLC (Tres Holdings) for approximately $335 million, plus working capital adjustments. The sale was completed on April 3, 2023 and operatewe received net cash proceeds of approximately $178 million. We recorded a natural gas gathering system (the Nautilus gathering system)gain on the sale of approximately $132 million, which is reflected as an increase in SWEPI’s operated positionour earnings from unconsolidated affiliates in our consolidated statements of operations during the Delaware Permian. SWEPI has dedicated to Crestwood Permian Basin approximately 100,000 acres and gathering rights for SWEPI’s gas production across a large acreage position in Loving, Reeves and Ward Counties, Texas. The Nautilus gathering system is designed to include 194 miles of low pressure gathering lines, 36 miles of high pressure trunklines and centralized compression facilities, which are expandable over time as production increases, providing gas gathering capacity ofnine months ended September 30, 2023.


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approximately 250 MMcf/d. The initial build-out of the Nautilus gathering system was completed on June 6, 2017 and includes 20 receipt point meters, 60 miles of pipeline, a 24-mile high pressure header system, 10,800 horsepower of compression and a high pressure delivery point. Crestwood Permian Basin provides gathering, dehydration, compression and liquids handling services to SWEPI on a fixed fee basis. In October 2017, Shell Midstream Partners L.P. (Shell Midstream), a subsidiary of Royal Dutch Shell plc, purchased a 50% equity interest in Crestwood Permian Basin for approximately $37.9 million in cash.

CEQP issued a guarantee in conjunction with the Crestwood Permian Basin gas gathering agreement with SWEPI described above, under which CEQP has agreed to fund 100% of the costs to build the Nautilus gathering system (which is currently estimated to cost $180 million, of which approximately $72.7 million has been spent through September 30, 2017) if Crestwood Permian fails to do so. We do not believe this guarantee is probable of resulting in future losses based on our assessment of the nature of the guarantee, the financial condition of the guaranteed party and the period of time that the guarantee has been outstanding, and as a result, we have not recorded a liability on our balance sheet at September 30, 2017 and December 31, 2016.

On June 21, 2017, we contributed to Crestwood Permian 100% of theequity interest of Crestwood New Mexico Pipeline LLC (Crestwood New Mexico), our wholly-owned subsidiary that owns our Delaware Basin assets located in Eddy County, New Mexico. This contribution was treated as a transaction between entities under common control (because of our relationship with First Reserve), and accordingly we deconsolidated Crestwood New Mexico and our investment in Crestwood Permian was increased by the historical book value of these assets of approximately $69.4 million. In conjunction with this contribution, First Reserve has agreed to contribute to Crestwood Permian the first $151 million of capital cost required to fund the expansion of the Delaware Basin assets, which includes a new processing plant located in Orla, Texas and associated pipelines (Orla processing plant).

Pursuant to Crestwood Permian's limited liability company agreement, we will receive 100% of Crestwood New Mexico's available cash (as defined in the limited liability company agreement) until the earlier of the Orla processing plant in-service date or June 30, 2018, at which time the distributions will be based on the members respective ownership percentages. Because our ownership and distribution percentages will differ during this period, equity earnings from Crestwood Permian is determined using the Hypothetical Liquidation at Book Value (HLBV) method. Under the HLBV method, a calculation is prepared at each balance sheet date to determine the amount that we would receive if Crestwood Permian were to liquidate all of its assets, as valued in accordance with GAAP, and distribute that cash to the members. The difference between the calculated liquidation distribution amounts at the beginning and the end of the reporting period, after adjusting for capital contributions and distributions, is our share of the earnings or losses from the equity investment for the period, which approximates how earnings are allocated under the terms of the limited liability company agreement.

Stagecoach Gas Services LLC. In June 2016, we contributed to Stagecoach Gas Services LLC (Stagecoach Gas) the entities owning the Northeast storage and transportation assets. Additionally, Con Edison Gas Pipeline Storage Northeast, LLC (CEGP), a wholly-owned subsidiary of Consolidated Edison, Inc., contributed $945 million to Stagecoach Gas in exchange for a 50% equity interest in Stagecoach Gas, and Stagecoach Gas distributed to us the cash proceeds received (net of approximately $3 million of cash transferred to the joint venture) from CEGP. Pursuant to the Stagecoach Gas limited liability company agreement, we may be required to make payments of up to $57 million to CEGP after December 31, 2020 if certain criteria are not met by Stagecoach Gas by December 31, 2020, including achieving certain performance targets on growth capital projects. We do not believe that this provision is probable of resulting in future payments to CEGP, and as a result we have not recorded a liability on our balance sheet as of September 30, 2017 and December 31, 2016.

We deconsolidated the Northeast storage and transportation assets as a result of this transaction discussed above and began accounting for our 50% equity interest in Stagecoach under the equity method of accounting. We recognized a loss on the deconsolidation of the Northeast storage and transportation assets of approximately $32.9 million.

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Net Investments and Earnings (Loss) of Unconsolidated Affiliates


Our net investments in and earnings (loss) from our unconsolidated affiliates are as follows (in millions unless otherwise stated):
InvestmentEarnings (Loss) from
Unconsolidated Affiliates		Earnings (Loss) from
Unconsolidated Affiliates
Three Months EndedNine Months Ended
September 30,December 31,September 30,September 30,
202320222023202220232022
Crestwood Permian Basin LLC(1)
$74.0 $76.5 $1.1 $0.7 $2.0 $0.7 
Tres Palacios Holdings LLC(2)
— 39.8 0.1 1.3 133.6 3.2 
Powder River Basin Industrial Complex, LLC(3)
3.1 3.2 (0.1)(0.1)(0.4)(0.4)
Crestwood Permian Basin Holdings LLC(4)
— — — 1.3 — 8.7 
Total$77.1 $119.5 $1.1 $3.2 $135.2 $12.2 
 Investment Earnings (Loss) from Unconsolidated Affiliates
 September 30, December 31, Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016 2017 2016
Stagecoach Gas Services LLC(1)
$854.3
 $871.0
 $6.4
 $6.8
 $19.0
 $9.1
Jackalope Gas Gathering Services, L.L.C.(2)
186.2
 197.2
 1.5
 5.5
 5.5
 16.5
Tres Palacios Holdings LLC(3)
34.7
 39.0
 0.3
 0.8
 1.5
 (0.7)
Powder River Basin Industrial Complex, LLC(4)
8.6
 8.7
 0.5
 0.3
 1.0
 1.2
Crestwood Permian Basin Holdings LLC(5)
114.7
 (0.5) 2.8
 —
 2.2
 —
Total$1,198.5
 $1,115.4
 $11.5
 $13.4
 $29.2
 $26.1

(1)As of September 30, 2017, our equity in the underlying net assets of Stagecoach Gas exceeded our investment balance by approximately $51.4 million. This excess amount is entirely attributable to goodwill and, as such, is not subject to amortization. Our Stagecoach Gas investment is included in our storage and transportation segment.
(2)As of September 30, 2017, our equity in the underlying net assets of Jackalope Gas Gathering Services, L.L.C. (Jackalope) exceeded our investment balance by approximately $0.8 million. We amortize this amount over 20 years, which represents the life of Jackalope’s gathering agreement with Chesapeake Energy Corporation (Chesapeake), and we reflect the amortization as an increase
(1)As discussed in Note 3, in July 2022, we acquired the remaining 50% equity interest in Crestwood Permian, whose operations included its 50% equity interest in Crestwood Permian Basin LLC (Crestwood Permian Basin). As of September 30, 2023, our equity in the underlying net assets of Crestwood Permian Basin was less than the carrying value of our investment balance by approximately $2.2 million. During the three and nine months ended September 30, 2023, we recorded amortization of less than $0.1 million and approximately $0.1 million, respectively, related to this basis difference, which is reflected as a decrease in our earnings from unconsolidated affiliates. Our Jackalope investment is included in our gathering and processing segment.
(3)As of September 30, 2017, our equity in the underlying net assets of Tres Palacios Holdings LLC (Tres Holdings) exceeded our investment balance by approximately $26.9 million. We amortize this amount over the life of the Tres Palacios Gas Storage LLC (Tres Palacios) sublease agreement, and we reflect the amortization as an increase in our earnings from unconsolidated affiliates. Our Tres Holdings investment is included in our storage and transportation segment.
(4)As of September 30, 2017, our equity in the underlying net assets of Powder River Basin Industrial Complex, LLC (PRBIC) exceeded our investment balance by approximately $6.5 million. We amortize a portion of this amount over the life of PRBIC's property, plant and equipment and its agreement with Chesapeake, and we reflect the amortization as an increase in our earnings from unconsolidated affiliates. During 2015, we recorded an impairment of our PRBIC equity investment as further discussed in our 2016 Annual Report on Form 10-K. For the year ended December 31, 2016, PRBIC recorded a $41.3 million impairment of its goodwill and long-lived assets and as a result, we adjusted our excess basis in PRBIC by approximately $8.3 million to reflect our proportionate share of the fair value of PRBIC's net assets. Our PRBIC investment is included in our storage and transportation segment.
(5)As of September 30, 2017, our equity in the underlying net assets of Crestwood Permian exceeded our investment balance by approximately $22.0 million, which is entirely attributable to goodwill and, as such, is not subject to amortization. Our Crestwood Permian investment is included in our gathering and processing segment.

Summarized Financial Information of Unconsolidated Affiliates

Below is the summarized operating results for our significant unconsolidated affiliates (in millions; amounts representour consolidated statements of operations, and during both the three and nine months ended September 30, 2022, we recorded amortization of less than $0.1 million related to this basis difference. Our Crestwood Permian Basin investment is included in our gathering and processing south segment.
(2)In April 2023, we sold our equity interest in Tres Holdings and we recorded a gain on the sale of approximately $132 million, which eliminated our $19.9 million historical basis difference between our investment balance and our equity in the underlying net assets of Tres Holdings. During the nine months ended September 30, 2023, we recorded amortization of approximately $0.3 million related to this excess basis, which is reflected as an increase in our earnings from unconsolidated affiliates in our consolidated statements of operations, and during the three and nine months ended September 30, 2022, we recorded amortization of approximately $0.3 million and $0.9 million related to this excess basis. Our Tres Holdings investment was included in our storage and logistics segment. See Tres Holdings Divestiture above for a further discussion of the sale of our Tres Holdings equity investment.
(3)As of September 30, 2023, our equity in the underlying net assets of Powder River Basin Industrial Complex, LLC (PRBIC) approximates the carrying value of our investment balance. Our PRBIC investment is included in our storage and logistics segment.
(4)In July 2022, we acquired the remaining 50% equity interest in Crestwood Permian and as a result, we control and own 100% of the equity interests in Crestwood Permian. Our Crestwood Permian equity investment was previously included in our gathering and processing south segment. See Note 3 for a further discussion of this acquisition.
unconsolidated affiliate information):

 Three Months Ended September 30,
 2017 2016
 Operating Revenues Operating Expenses Net Income Operating Revenues Operating Expenses Net Income
Stagecoach Gas$43.1
 $20.4
 $22.7
 $42.8
 $18.4
 $24.4
Other(1)
78.3
 66.4
 11.9
 30.1
 18.4
 11.7
Total$121.4
 $86.8
 $34.6
 $72.9
 $36.8
 $36.1
(1)Includes our Jackalope, Tres Holdings, PRBIC and Crestwood Permian equity investments. We amortize the excess basis in certain of our equity investments as an increase in our earnings from unconsolidated affiliates. We recorded amortization of the excess basis in our Jackalope equity investment of less than $0.1 million for both the three months ended September 30, 2017 and 2016. We recorded amortization of the excess basis in our Tres Holdings equity investment of approximately $0.3 million for both the three months ended September 30, 2017 and 2016. We recorded amortization of the excess basis in our PRBIC equity investment of approximately $0.2 million and $0.4 million for the three months ended September 30, 2017 and 2016.

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 Nine Months Ended September 30,
 2017 2016
 Operating Revenues Operating Expenses Net Income Operating Revenues Operating Expenses Net Income
Stagecoach Gas$127.1
 $58.4
 $68.8
 $56.0
 $24.1
 $31.9
Other(1)
124.6
 103.7
 20.8
 90.3
 60.6
 29.6
Total$251.7
 $162.1
 $89.6
 $146.3
 $84.7
 $61.5

(1)Includes our Jackalope, Tres Holdings, PRBIC and Crestwood Permian equity investments. We amortize the excess basis in certain of our equity investments as an increase in our earnings from unconsolidated affiliates. We recorded amortization of the excess basis in our Jackalope equity investment of less than $0.1 million for both the nine months ended September 30, 2017 and 2016. We recorded amortization of the excess basis in our Tres Holdings equity investment of approximately $0.9 million for both the nine months ended September 30, 2017 and 2016. We recorded amortization of the excess basis in our PRBIC equity investment of approximately $0.5 million and $1.2 million for the nine months ended September 30, 2017 and 2016.


Distributions and Contributions


The following table summarizes our distributions from and contributions to our unconsolidated affiliates (in millions):
DistributionsContributions
Nine Months EndedNine Months Ended
September 30,September 30,
2023202220232022
Crestwood Permian Basin$6.3 $2.2 $1.8 $— 
Tres Holdings— 4.9 5.1 6.7 
PRBIC— — 0.3 — 
Crestwood Permian— 13.6 — 83.5 
Total$6.3 $20.7 $7.2 $90.2 


  Distributions Contributions
  Nine Months Ended September 30, Nine Months Ended September 30,
  2017 2016 2017 2016
Stagecoach Gas(1)
 $35.7
 $3.7
 $—
 $—
Jackalope 19.4
 19.9
 2.9
 0.7
Tres Holdings(1)
 5.8
 6.2
 —
 5.5
PRBIC 1.1
 1.6
 —
 —
Crestwood Permian(2) 
 —
 —
 113.0
 —
Total $62.0
 $31.4
 $115.9
 $6.2

(1)In October 2017, we received a cash distribution from Stagecoach Gas, Tres Holdings and Crestwood Permian of approximately $11.6 million, $3.1 million and $4.5 million, respectively.
(2)On June 21, 2017, we contributed to Crestwood Permian 100% of the equity interest of Crestwood New Mexico at our historical book value of approximately $69.4 million. This contribution was treated as a non-cash transaction between entities under common control.


Note 56 – Risk Management


We are exposed to certain market risks related to our ongoing business operations. These risks include exposure to changing commodity prices. We utilize derivative instruments to manage our exposure to fluctuations in commodity prices, which is discussed below. Additional information related to our derivatives is discussed in Note 6.7.

Commodity Derivative Instruments and Price Risk Management


Risk Management Activities


We sell NGLs (such as propane, ethane, butane and heating oil), crude oil and natural gas to energy relatedenergy-related businesses and may use a variety of financial and other instruments including forward contracts involving physical delivery of NGLs, heatingcrude oil and crude oil.natural gas. We periodically enter into offsetting positions to economically hedge against the exposure our customer contracts create. Certain of these contracts and positions are derivative instruments. We do not designate any of our commodity-based
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derivatives as hedging instruments for accounting purposes. Our commodity-based derivatives are reflected at fair value in theour consolidated balance sheets, and changes in the fair value of these derivatives that impact the consolidated statements of operations are reflected in costs of product/services sold. DuringOur commodity-based derivatives that are settled with physical commodities are reflected as an increase to product revenues, and the threecommodity inventory that is utilized to satisfy those physical obligations is reflected as an increase to product costs in our consolidated statements of operations. Our commodity-based derivatives that are settled financially are also reflected in product costs in our consolidated statements of operations. The following table summarizes the increase (decrease) in our product revenues and nine months ended September 30, 2017, the impact toproduct costs, net, in our consolidated statements of operations related to our commodity-based derivatives reflected (in costs of product/services sold was a loss of $24.1 million and $22.6 million. During the three and nine months ended September 30, 2016, the impact to the statement of operations related to our commodity-based derivatives reflected in costs of product/services sold was a gain of $2.1 million and $4.1 million. millions):
Three Months EndedNine Months Ended
September 30,September 30,
2023202220232022
Product revenues$49.1 $84.7 $236.0 $395.7 
Product costs, net$18.0 $(45.0)$(13.5)$6.3 

We attempt to balance our contractual portfolio in terms of notional amounts and timing of performance and delivery obligations. This balance in the contractual portfolio significantly reduces the volatility in product costs of product/services sold related to these instruments.


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Commodity Price and Credit Risk


Notional Amounts and Terms


The notional amounts and terms of our derivative financial instruments include the following:
 September 30, 2023December 31, 2022
 Fixed Price
Payor		Fixed Price
Receiver		Fixed Price
Payor		Fixed Price
Receiver
Propane, ethane, butane, heating oil and crude oil (MMBbls)72.9 78.7 67.2 70.2 
Natural gas (Bcf)11.3 12.8 44.2 48.4 
 September 30, 2017 December 31, 2016
 
Fixed Price
Payor
 
Fixed Price
Receiver
 
Fixed Price
Payor
 
Fixed Price
Receiver
Propane, crude and heating oil (MMBbls)19.7
 22.7
 13.1
 15.1
Natural gas (MMBTU’s)0.9
 0.6
 —
 —


Notional amounts reflect the volume of transactions, but do not represent the amounts exchanged by the parties to the financial instruments. Accordingly, notional amounts do not reflect our monetary exposure to market or credit risks.

All contracts subject to price risk had a maturity of 3536 months or less; however, 87%88% of the contracted volumes will be delivered or settled within 12 months.


Credit Risk


Inherent in our contractual portfolio are certain credit risks. Credit risk is the risk of loss from nonperformance by suppliers, customers or financial counterparties to a contract. We take an active role in managing credit risk and have established control procedures, which are reviewed on an ongoing basis. We attempt to minimize credit risk exposure through credit policies and periodic monitoring procedures as well as through customer deposits, letters of credit and entering into netting agreements that allow for offsetting counterparty receivable and payable balances for certain financial transactions, as deemed appropriate. The counterparties associated with our price risk management activities are primarily energy marketers and propane retailers, resellers and dealers.


Certain of our derivative instruments have credit limits that require us to post collateral. The amount of collateral required to be posted is a function of the net liability position of the derivative as well as our established credit limit with the respective counterparty. If our credit rating were to change, the counterparties could require us to post additional collateral. The amount of additional collateral that would be required to be posted would vary depending on the extent of change in our credit rating as well as the requirements of the individual counterparty. The aggregate fair value of all commodity derivative instruments with credit-risk-related contingent features that were in a liability position at September 30, 2017 and December 31, 2016 was $30.1 million and $13.9 million. At September 30, 2017 and December 31, 2016, we posted less than $0.1 million of collateral for our commodity derivative instruments with credit-risk-related contingent features. In addition, at September 30, 2017 and December 31, 2016, we had a New York Mercantile Exchange (NYMEX) related net derivative asset position of $30.7 million and $14.3 million, for which we posted $25.2 million and $4.2 million of cash collateral in the normal course of business. At September 30, 2017 and December 31, 2016, we also received collateral of $5.7 million and $4.3 million in the normal course of business. All collateral amounts have been netted against the asset or liability with the respective counterparty and are reflected in our consolidated balance sheets as assets and liabilities from price risk management activities. For a summary of the fair value of our commodity derivative instruments with credit-risk related contingent features and their associated collateral, see Note 7.




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Note 67 – Fair Value Measurements


The accounting standard for fair value measurement establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows:


•Level 1—Quoted prices1 — Includes inputs that are availableobservable in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instrumentsdate such as exchange-traded derivatives, listed equities and USU.S. government treasury securities.


•Level 2—Pricing2 — Includes inputs that are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various

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assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category include non-exchange-traded derivatives such as over the counter (OTC) forwards, options and physical exchanges.


•Level 3—Pricing inputs include3 — Includes significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.


Financial Assets and Liabilities

As of September 30, 2023 and December 31, 2022, we held certain assets and liabilities that are required to be measured at fair value on a recurring basis, which include our derivative instruments related to crude oil, NGLs and natural gas. Our derivative instruments consist of forwards, swaps, futures, physical exchanges and options. Our derivative instruments that are traded on the New York Mercantile Exchange have been categorized as Level 1. Our derivative instruments also include OTC contracts, which have been categorized as Level 2.

The following tables summarize the fair value hierarchy of our financial instruments that were reflected in our consolidated balance sheets (in millions):
September 30, 2023
Level 1Level 2Level 3Gross Fair Value
Contract Netting(1)
Collateral/Margin Received or PaidFair Value
Assets
Assets from price risk management$14.5 $248.6 $— $263.1 $(213.9)$(11.2)$38.0 
Other investments(2)
2.8 — — 2.8 — — 2.8 
Total assets at fair value$17.3 $248.6 $— $265.9 $(213.9)$(11.2)$40.8 
Liabilities
Liabilities from price risk management with credit-risk-related contingent features$11.5 $206.2 $— $217.7 $(213.9)$3.9 $7.7 
Liabilities from price risk management without credit-risk-related contingent features— 5.5 — 5.5 — 4.4 9.9 
Total liabilities at fair value$11.5 $211.7 $— $223.2 $(213.9)$8.3 $17.6 
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December 31, 2022
Level 1Level 2Level 3Gross Fair Value
Contract Netting(1)
Collateral/Margin Received or PaidFair Value
Assets
Assets from price risk management$62.8 $474.3 $— $537.1 $(452.1)$(12.2)$72.8 
Other investments(2)
2.6 — — 2.6 — — 2.6 
Total assets at fair value$65.4 $474.3 $— $539.7 $(452.1)$(12.2)$75.4 
Liabilities
Liabilities from price risk management with credit-risk-related contingent features$65.7 $420.1 $— $485.8 $(452.1)$(25.6)$8.1 
Liabilities from price risk management without credit-risk-related contingent features— 11.9 — 11.9 — 3.9 15.8 
Total liabilities at fair value$65.7 $432.0 $— $497.7 $(452.1)$(21.7)$23.9 
(1)Amounts represent the impact of legally enforceable master netting agreements that allow us to settle positive and negative positions.
(2)Amount primarily relates to our investment in Suburban Propane Partners, L.P. units, which is reflected in other non-current assets on CEQP’s consolidated balance sheets.

Cash, Accounts Receivable and Accounts Payable


As of September 30, 20172023 and December 31, 2016,2022, the carrying amounts of cash, accounts receivable and accounts payable approximate fair value based on the short-term nature of these instruments.


Credit FacilityFacilities


The fair value of the amounts outstanding under our CMLP credit facilityfacilities approximates thetheir respective carrying amounts as of September 30, 20172023 and December 31, 2016,2022, primarily due primarily to the variable nature of the interest raterates of the instrument,instruments, which is considered a Level 2 fair value measurement. See Note 8 for a further discussion of our credit facilities.


Senior Notes


We estimate the fair value of our senior notes primarily based on quoted market prices for the same or similar issuances (representing a Level 2 fair value measurement). The following table reflectsrepresents the carrying valueamount (reduced for deferred financing costs associated with the respective notes) and fair value of our senior notes (in millions):
September 30, 2023December 31, 2022
Carrying
 Amount		Fair
Value		Carrying
 Amount		Fair
Value
2025 Senior Notes$498.4 $491.8 $497.6 $486.7 
2027 Senior Notes$596.1 $576.7 $595.3 $556.9 
February 2029 Senior Notes$693.1 $674.4 $692.1 $642.1 
April 2029 Senior Notes(1)
$473.5 $464.2 $476.7 $450.0 
2031 Senior Notes$591.6 $611.5 $— $— 
 September 30, 2017 December 31, 2016
 
Carrying
 Amount
 
Fair
Value
 
Carrying
 Amount
 
Fair
Value
2020 Senior Notes$—
 $—
 $340.6
 $350.2
2022 Senior Notes$—
 $—
 $429.3
 $447.3
2023 Senior Notes$691.7
 $724.7
 $690.6
 $722.6
2025 Senior Notes$492.1
 $511.5
 $—
 $—


Financial Assets and Liabilities

As of September 30, 2017 and December 31, 2016, we held certain assets and liabilities that are required to be measured at(1)    The carrying amount includes a fair value onadjustment we recorded in conjunction with the merger with Oasis Midstream discussed in Note 3. For a recurring basis, which include our derivative instruments related to heating oil, crude oil, and NGLs. Our derivative instruments consistfurther discussion of forwards, swaps, futures, physical exchanges and options.

Our derivative instruments that are traded on the NYMEX have been categorized as Level 1.

Our derivative instruments also include OTC contracts, which are not traded on a public exchange. The fair values of these derivative instruments are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. These instruments have been categorized as Level 2.

Our OTC options are valued based on the Black Scholes option pricing model that considers time value and volatility of the underlying commodity. The inputs utilized in the model are based on publicly available information as well as broker quotes. These options have been categorized as Level 2.

Our financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to thethis fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.adjustment, see Note 8.




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The following tables set forth by level within the fair value hierarchy, our financial instruments that were accounted for at fair value on a recurring basis at September 30, 2017 and December 31, 2016 (in millions):
 September 30, 2017  
 Fair Value of Derivatives     
 Level 1 Level 2 Level 3 Gross Fair Value 
Contract Netting(1)
 Collateral/Margin Received or Paid Recorded in Balance Sheet
Assets             
Assets from price risk management$0.9
 $127.1
 $—
 $128.0
 $(94.2) $(26.0) $7.8
Suburban Propane Partners, L.P. units(2)
3.7
 —
 —
 3.7
 —
 —
 3.7
Total assets at fair value$4.6
 $127.1
 $—
 $131.7
 $(94.2) $(26.0) $11.5
              
Liabilities             
Liabilities from price risk management$1.6
 $140.3
 $—
 $141.9
 $(94.2) $4.9
 $52.6
Total liabilities at fair value$1.6
 $140.3
 $—
 $141.9
 $(94.2) $4.9
 $52.6
              
 December 31, 2016  
 Fair Value of Derivatives     
 Level 1 Level 2 Level 3 Gross Fair Value 
Contract Netting(1)
 Collateral/Margin Received or Paid Recorded in Balance Sheet
Assets             
Assets from price risk management$0.6
 $84.4
 $—
 $85.0
 $(67.8) $(10.9) $6.3
Suburban Propane Partners, L.P. units(2)
4.3
 —
 —
 4.3
 —
 —
 4.3
Total assets at fair value$4.9
 $84.4
 $—
 $89.3
 $(67.8) $(10.9) $10.6
              
Liabilities             
Liabilities from price risk management$2.7
 $90.2
 $—
 $92.9
 $(67.8) $3.5
 $28.6
Total liabilities at fair value$2.7
 $90.2
 $—
 $92.9
 $(67.8) $3.5
 $28.6

(1)Amounts represent the impact of legally enforceable master netting agreements that allow us to settle positive and negative positions as well as cash collateral held or placed with the same counterparties.
(2)Amount is reflected in other assets on CEQP's consolidated balance sheets.



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Note 78 – Long-Term Debt


Long-term debt consisted of the following at (in millions):
September 30,
2023		December 31,
2022
CMLP Credit Facility$460.0 $922.3 
CPBH Credit Facility— 206.8 
2025 Senior Notes500.0 500.0 
2027 Senior Notes600.0 600.0 
February 2029 Senior Notes700.0 700.0 
April 2029 Senior Notes450.0 450.0 
April 2029 Senior Notes fair value adjustment, net(1)
23.5 26.7 
2031 Senior Notes600.0 — 
Less: deferred financing costs, net31.0 27.5 
Total long-term debt$3,302.5 $3,378.3 

(1)In conjunction with the merger with Oasis Midstream discussed in Note 3, we assumed the April 2029 Senior Notes, and we recorded a fair value adjustment of approximately $30.7 million. We recorded a reduction to our interest and debt expense related to the amortization of the fair value adjustment of approximately $1.1 million and $3.2 million during the three and nine months ended September 30, 20172023 and December 31, 2016 (in millions):$1.1 million and $2.9 million during the three and nine months ended September 30, 2022.
 September 30,
2017		 December 31,
2016
Credit Facility$444.1
 $77.0
2020 Senior Notes—
 338.8
Fair value adjustment of 2020 Senior Notes—
 1.8
2022 Senior Notes—
 436.4
2023 Senior Notes700.0
 700.0
2025 Senior Notes500.0
 —
Other2.4
 3.7
Less: deferred financing costs, net30.2
 34.0
Total debt1,616.3
 1,523.7
Less: current portion0.9
 1.0
Total long-term debt, less current portion$1,615.4
 $1,522.7


Credit FacilityFacilities


At September 30, 2017,CMLP Credit Facility. Crestwood Midstream’s five-year $1.75 billion revolving credit facility (the CMLP Credit Facility) is available to fund acquisitions, working capital and internal growth projects and for general partnership purposes. Subject to limited exception, the CMLP Credit Facility is guaranteed and secured by substantially all of the equity interests and assets of Crestwood Midstream’s subsidiaries, except for Crestwood Infrastructure Holdings LLC, Crestwood Niobrara LLC, PRBIC and their respective subsidiaries. In January 2023, Crestwood Permian and certain of its subsidiaries were designated as guarantor subsidiaries of Crestwood Midstream’s credit facility and senior notes.

In conjunction with the merger with Oasis Midstream had $548.7on February 1, 2022, we borrowed amounts under the CMLP Credit Facility to fund the cash paid of $160 million to Oasis Petroleum and to repay approximately $218 million of available capacity under itsborrowings on Oasis Midstream’s credit facility, considering the most restrictive debt covenantswhich was retired on February 1, 2022. In addition, in its credit agreement. At September 30, 2017 and December 31, 2016, Crestwood Midstream's outstanding standby letters of credit were $63.6July 2022 we borrowed approximately $631.2 million and $64.0 million. Borrowings under the CMLP Credit Facility to fund the Sendero Acquisition.

Under the credit facility accrue interest at prime or Eurodollar based rates plus applicable spreads, which resulted in interest rates between 3.49% and 5.50% at September 30, 2017 and 3.21% and 5.25% at December 31, 2016. The weighted-average interest rate as of September 30, 2017 and December 31, 2016 was 3.50% and 3.23%.

agreement, Crestwood Midstream is required under its credit agreement to maintain a net debt to consolidated EBITDA ratio (as defined in itsthe credit agreement) of not more than 5.50 to 1.0, a consolidated EBITDA to consolidated interest expense ratio (as defined in itsthe credit agreement) of not less than 2.50 to 1.0, and a senior secured leverage ratio (as defined in itsthe credit agreement) of not more than 3.753.50 to 1.0. At September 30, 2017,2023, the net debt to consolidated EBITDA ratio was approximately 4.134.35 to 1.0, the consolidated EBITDA to consolidated interest expense ratio was approximately 4.083.65 to 1.0, and the senior secured leverage ratio was 1.110.61 to 1.0.


The CMLP credit facility allowsAt September 30, 2023, Crestwood Midstream to increase itshad $872.0 million of available borrowingscapacity under the facility by $350.0 million, subject to lender approval andCMLP Credit Facility considering the satisfaction of certain other conditions, as describedmost restrictive debt covenants in the credit agreement. At September 30, 2023 and December 31, 2022, outstanding standby letters of credit under the CMLP Credit Facility were $5.7 million and $8.2 million. Borrowings under the CMLP Credit Facility accrue interest at either prime or the Adjusted Term SOFR (as defined in the credit agreement) plus applicable spreads, which resulted in interest rates between 7.67% and 9.75% at September 30, 2023 and 6.28% and 8.50% at December 31, 2022. The weighted-average interest rate on outstanding borrowings as of September 30, 2023 and December 31, 2022 was 7.68% and 6.40%.


CPBH Credit Facility. In conjunction with the acquisition of the remaining 50% equity interest in Crestwood Permian in July 2022, we assumed a credit agreement entered into by CPB Subsidiary Holdings LLC, a wholly-owned subsidiary of Crestwood Permian (the CPBH Credit Facility). In January 2023, we utilized borrowings under the CMLP Credit Facility to repay and terminate the CPBH Credit Facility.

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Senior Notes


Repayments2031 Senior Notes.In January 2023, Crestwood Midstream issued $600 million of 7.375% unsecured senior notes due 2031 (the 2031 Senior Notes). DuringThe 2031 Senior Notes will mature on February 1, 2031, and interest is payable semi-annually in arrears on February 1 and August 1 of each year, beginning on August 1, 2023. The net proceeds from this offering of approximately $592.5 million were used to repay borrowings outstanding under the CMLP Credit Facility.


Note 9 – Commitments and Contingencies

Legal Proceedings

Linde Lawsuit. On December 23, 2019, Linde Engineering North America Inc. (Linde) filed a lawsuit in the District Court of Harris County, Texas alleging that Arrow Field Services, LLC, our consolidated subsidiary, and Crestwood Midstream breached a contract entered into in March 2018 under which Linde was to provide engineering, procurement and construction services to us related to the completion of the construction of the Bear Den II cryogenic processing plant.

A jury trial concluded on June 17, 2022, and a final judgement was entered on October 24, 2022. The final judgment includes an award of damages of approximately $20.7 million, a pre-judgement interest award of approximately $17.7 million and attorney fees and other costs of approximately $4.7 million. We have insurance coverage related to certain pre-judgement interest awards but have not recorded a receivable related to any potential insurance recovery at September 30, 2023. On January 9, 2023, we paid approximately $21.2 million to the Court Registry under protest to mitigate the impact of post-judgement interest. We filed a Notice of Appeal on January 13, 2023 and an Opening Appeal Brief on September 29, 2023. We are unable to predict the ultimate outcome of the appeal related to this matter.

General. We are periodically involved in litigation proceedings. If we determine that a negative outcome is probable and the amount of loss is reasonably estimable, then we accrue the estimated amount. The results of litigation proceedings cannot be predicted with certainty. We could incur judgments, enter into settlements or revise our expectations regarding the outcome of certain matters, and such developments could have a material adverse effect on our results of operations or cash flows in the period in which the amounts are paid and/or accrued. As of September 30, 2023 and December 31, 2022, we had approximately $8.9 million and $35.0 million accrued for outstanding legal matters. Based on currently available information, we believe it is remote that future costs related to known contingent liability exposures for which we can estimate will exceed current accruals by an amount that would have a material adverse impact on our consolidated financial statements. As we learn new facts concerning contingencies, we reassess our position both with respect to accrued liabilities and other potential exposures.

Any loss estimates are inherently subjective, based on currently available information, and are subject to management’s judgment and various assumptions. Due to the inherently subjective nature of these estimates and the uncertainty and unpredictability surrounding the outcome of legal proceedings, actual results may differ materially from any amounts that have been accrued.

Regulatory Compliance

In the ordinary course of our business, we are subject to various laws and regulations. In the opinion of our management, compliance with current laws and regulations will not have a material effect on our results of operations, cash flows or financial condition.

Environmental Compliance

Our operations are subject to stringent and complex laws and regulations pertaining to worker health, safety, and the environment. We are subject to laws and regulations at the federal, state, regional and local levels that relate to air and water quality, hazardous and solid waste management and disposal, and other environmental matters. The cost of planning, designing, constructing and operating our facilities must incorporate compliance with environmental laws and regulations and safety standards. Failure to comply with these laws and regulations may trigger a variety of administrative, civil and potentially criminal enforcement measures. At both September 30, 2023 and December 31, 2022, our accrual for environmental matters was less than $1.0 million and our potential exposure related to environmental matters was less than $1.0 million at September 30, 2023.

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Self-Insurance

We utilize third-party insurance subject to varying retention levels of self-insurance, which management considers prudent. Such self-insurance relates to losses and liabilities primarily associated with medical claims, workers’ compensation claims and general, product, vehicle and environmental liability. Losses are accrued based upon management’s estimates of the aggregate liability for claims incurred using certain assumptions followed in the insurance industry and based on past experience. The primary assumption utilized is actuarially determined loss development factors. The loss development factors are based primarily on historical data. Our self-insurance reserves could be affected if future claim developments differ from the historical trends. We believe changes in health care costs, trends in health care claims of our employee base, accident frequency and severity and other factors could materially affect the estimate for these liabilities. We continually monitor changes in employee demographics, incident and claim type and evaluate our insurance accruals and adjust our accruals based on our evaluation of these qualitative data points. We are liable for the development of claims for our previously disposed of retail propane operations, provided they were reported prior to August 1, 2012. The following table summarizes CEQP’s and CMLP’s self-insurance reserves (in millions):
 CEQPCMLP
 September 30,
2023		December 31, 2022September 30,
2023		December 31, 2022
Self-insurance reserves(1)
$5.7 $5.6 $5.0 $4.8 
(1)At September 30, 2023, CEQP and CMLP classified approximately $3.2 million and $2.7 million, respectively, of these reserves as other long-term liabilities on their consolidated balance sheets.

Indemnifications

We periodically provide indemnification arrangements related to assets or businesses we have sold. Our potential exposure under indemnification arrangements can range from a specified amount to an unlimited amount, depending on the nature of the claim, specificity as to duration, and the particular transaction. As of September 30, 2023 and December 31, 2022, we have no amounts accrued for these indemnifications.


Note 10 - Leases

The following table summarizes the balance sheet information related to our operating and finance leases (in millions):
September 30,
2023		December 31, 2022
Operating Leases
Operating lease right-of-use assets, net$23.3 $24.4 
Accrued expenses and other liabilities$11.1 $10.9 
Other long-term liabilities15.4 17.4 
Total operating lease liabilities$26.5 $28.3 
Finance Leases
Property, plant and equipment$9.8 $13.6 
Less: accumulated depreciation4.9 8.9 
Property, plant and equipment, net$4.9 $4.7 
Accrued expenses and other liabilities$1.7 $1.9 
Other long-term liabilities3.0 2.7 
Total finance lease liabilities$4.7 $4.6 

Lease expense. Our operating lease expense, net totaled $3.5 million and $3.4 million for the three months ended September 30, 2023 and 2022 and $10.9 million and $9.2 million for the nine months ended September 30, 2017, Crestwood Midstream paid approximately $457.82023 and 2022. Our finance lease expense totaled $0.6 million and $0.9 million for the three months ended September 30, 2023 and 2022 and $2.1 million and $2.7 million for the nine months ended September 30, 2023 and 2022.
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Other. During March 2022, we exercised an option to purchase redeem and/or cancel allcrude oil railcars under certain of our finance leases as a result of our plan to exit our crude oil railcar operations. In April 2022, we sold the principal amount outstanding under the 2022 Senior Notescrude oil railcars to a third party for approximately $24.7 million and approximately $349.9 million to redeem all of the principal amount outstanding under the 2020 Senior Notes. Crestwood Midstream funded the repayments with a combination of net proceeds from the issuance of the 2025 Senior Notes described below and borrowings under the credit facility. In conjunction with these note repayments, Crestwood Midstream (i)we recognized a loss on extinguishment of debtthe sale of approximately $37.7$4.1 million during the nine months ended September 30, 2017 (including the write off of approximately $6.8 million of deferred financing costs associated with the2022.


Note 11 – Partners’ Capital and Non-Controlling Partner

Common Units

On February 1, 2022, Senior Notes); and (ii) paid $5.1 million and $1.0 million of accrued interest on the 2020 Senior Notes and 2022 Senior Notes, respectively, on the date they were tendered.

In June 2016, Crestwood Midstream paid approximately $312.9 million to purchase and cancel approximately $161.2 million and $163.6 million of the principal amounts outstanding under its 2020 Senior Notes and 2022 Senior Notes, respectively, utilizing a portion of the proceeds received from Stagecoach Gas, as further discussed in Note 4. Crestwood Midstream recognized a gain on extinguishment of debt of approximately $10 million in conjunction with the early tender of these notes.

2025 Senior Notes. In March 2017, Crestwood Midstream issued $500 million of 5.75% unsecured senior notes due 2025 (the 2025 Senior Notes) in a private offering. The 2025 Senior Notes will mature on April 1, 2025, and interest is payable

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semiannually in arrears on April 1 and October 1 of each year, beginning October 1, 2017. The net proceeds from this offering of approximately $492 million were used to repay amounts outstanding under the 2020 Senior Notes and the 2022 Senior Notes.

In May 2017, Crestwood Midstream filed a registration statement with the SEC under which it offered to exchange new senior notes for any and all outstanding 2025 Senior Notes. Crestwood Midstreamwe completed the exchange offer in July 2017. The terms of the exchange notes are substantially identicalmerger with Oasis Midstream. Pursuant to the terms of the 2025 Senior Notes, except that the exchange notes are freely tradable.

At September 30, 2017, Crestwood Midstream was in compliance with all of its debt covenants applicable to the CMLP credit facilitymerger agreement, Chord received cash and its senior notes.


Note 8 - Earnings Per Limited Partner Unit

Our net income (loss) attributable to Crestwood Equity Partners is allocated to the subordinated and limited partner unitholders based on their ownership percentage after giving effect to net income attributable to the Preferred Units. We calculate basic net income per limited partner unit using the two-class method. Diluted net income per limited partner unit is computed using the treasury stock method, which considers the impact to net income attributable to Crestwood Equity Partners and limited partner units from the potential issuance of limited partner units.
We exclude potentially dilutive securities from the determination of diluted earnings per unit (as well as their related income statement impacts) when their impact on net income attributable to Crestwood Equity Partners per limited partner unit is anti-dilutive. During the three and nine months ended September 30, 2017, we excluded a weighted-average of 7,125,744 and 6,968,210 common units (representing preferred units), a weighted-average of 7,277,340approximately 20.9 million newly issued CEQP common units in both periods (representing Crestwood Niobrara's preferred units), and a weighted-average of 438,789exchange for its common units held in Oasis Midstream. In addition, Oasis Midstream’s public unitholders received approximately 12.9 million newly issued CEQP common units in both periods (representing subordinated units). Duringexchange for the three and nine months ended September 30, 2016, we excluded a weighted-average of 6,502,907 and 6,358,626Oasis Midstream common units (representing preferred units),held by them. For a further discussion of the merger with Oasis Midstream, see Note 3.

On July 11, 2022, we acquired First Reserves’s 50% equity interest in Crestwood Permian in exchange for approximately $5.9 million in cash and approximately 11.3 million newly issued CEQP common units. For a weighted-averagefurther discussion of 8,669,633the CPJV Acquisition, see Note 3.

On September 15, 2022, CEQP acquired 4.6 million CEQP common units from OMS Holdings LLC, a subsidiary of Chord, for approximately $123.7 million. This transaction resulted in both periods (representing Crestwood Niobrara's preferred units) and a weighted-average of 438,789 common units in both periods (representing subordinated units). See Note 9 for additional information regarding the potential conversion of our preferred units and Crestwood Niobrara's preferred units to common units.


Note 9 – Partners’ Capital

Preferred Units

Subject to certain conditions, the holders of the Preferred Units have the right to convert their Preferred Units into (i) common units on a 1-for-10 basis or (ii) a number of common units determined pursuant to a conversion ratio set forth in Crestwood Equity's partnership agreement upon the occurrence of certain events, such as a change in control. The Preferred Units have voting rights that are identical to the voting rights ofCEQP retiring the common units and will vote with the common units as a single class, with each Preferred Unit entitled to one vote for each common unit into which such Preferred Unit is convertible, except that the Preferred Units are entitled to vote as a separate class on any matter on which all unitholders are entitled to vote that adversely affects the rights, powers, privileges or preferences of the Preferred Units in relation to Crestwood Equity's other securities outstanding.acquired from OMS Holdings LLC.

Common Units

On August 4, 2017, we entered into an equity distribution agreement with certain financial institutions (each, a Manager), under which we may offer and sell from time to time through one or more of the Managers, common units having an aggregate offering price of up to $250 million. Common units sold pursuant to this at-the-market (ATM) equity distribution program are issued under a registration statement that became effective on April 12, 2017. We will pay the Managers an aggregate fee of up to 2.0% (which totaled $0.2 million during the three and nine months ended September 30, 2017) of the gross sales price per common unit sold under our ATM equity distribution program. The table below shows the units issued and the net proceeds from the issuances:
Issuance Dates Common Units 
Net Proceeds(1)
(in millions)
Third Quarter 2017 437,518
 $10.6
(1)The net proceeds from sales under the ATM program are used for general partnership purposes, which may include debt repayment and capital expenditures.

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Distributions


Crestwood Equity


Limited Partners. A summary of CEQP'sCEQP’s limited partner quarterly cash distributions for the nine months ended September 30, 20172023 and 20162022 is presented below:
Record Date Payment Date Per Unit Rate 
Cash Distributions
(in millions)
2017      
February 7, 2017 February 14, 2017 $0.60
 $41.8
May 8, 2017 May 15, 2017 0.60
 41.8
August 7, 2017 August 14, 2017 0.60
 41.8
      $125.4
2016      
February 5, 2016 February 12, 2016 $1.375
 $95.6
May 6, 2016 May 13, 2016 0.60
 41.4
August 5, 2016 August 12, 2016 0.60
 41.4
      $178.4
Record DatePayment DatePer Unit Rate
Cash Distributions
(in millions)
2023
February 7, 2023February 14, 2023$0.655 $68.9 
May 8, 2023May 15, 2023$0.655 68.9 
August 7, 2023August 14, 2023$0.655 68.9 
$206.7 
2022
February 7, 2022February 14, 2022$0.625 $60.9 
May 6, 2022May 13, 2022$0.655 64.2 
August 5, 2022August 12, 2022$0.655 71.6 
$196.7 


On October 19, 2017,we declared a distribution of $0.60 per limited partner unit to be paid on November 14, 2017, to unitholders of record on November 7, 2017 with respect to the third quarter of 2017.

Preferred Unit Holders. We are required to make quarterly distributions to our preferred unitholders. During the nine months ended September 30, 2017 and 2016, we issued 4,724,030 and 4,311,143 Preferred Units to our preferred unitholders in lieu of paying cash distributions of $43.1 million and $39.3 million, respectively. On October 19, 2017, 12, 2023,the board of directors of our general partner authorizeddeclared a cash distribution to our preferred unitholders of approximately $15.0 million for$0.655 per limited partner unit with respect to the quarter ended September 30, 20172023. In addition, the board of directors declared a special cash distribution of $0.003 per limited partner unit in lieu of issuing additional preferred units, and beginningconjunction with the quarter ending DecemberEnergy Transfer Merger. The cash distributions were paid on October 31, 2017,2023 to unitholders of record on October 23, 2023.

Preferred Unitholders. During the nine months ended September 30, 2023 and 2022, we will be required to make all future quarterlypaid cash distributions of approximately $45.1 million and $45.0 million to our preferred unitholders. On October 12, 2023, the board of directors of our general partner declared a cash distribution of approximately $15 million with respect to the quarter ended September 30, 2023. In addition, the board of directors declared a special cash distribution of $0.0003 per preferred unit in conjunction with the Energy Transfer Merger. The cash distributions were paid on October 31, 2023 to unitholders in cash.of record on October 23, 2023.


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Crestwood Midstream


During the nine months ended September 30, 20172023 and 2016,2022, Crestwood Midstream paid cash distributions of $119.5$264.8 million and $185.0$537.6 million to its partners.

On February 1, 2022, Crestwood Equity.

Non-Controlling Partners

Midstream received a non-cash contribution of approximately $1,075.1 million from Crestwood Niobrara issued a preferred interestEquity related to a subsidiary of General Electric Capital Corporation and GE Structured Finance, Inc. (collectively, GE)net assets it acquired in conjunction with the merger with Oasis Midstream. In addition, Crestwood Equity contributed the cash acquired in conjunction with the merger with Oasis Midstream of approximately $14.9 million to Crestwood Midstream.

On July 11, 2022, Crestwood Midstream received a non-cash contribution of approximately $127.3 million from Crestwood Equity related to the acquisition of its investment50% equity interest in Crestwood Permian. In addition, Crestwood Equity contributed the cash acquired in conjunction with this acquisition of approximately $149.4 million to Crestwood Midstream.

For a further discussion of these acquisitions, see Note 3.

Non-Controlling Partner

Crestwood Niobrara LLC (Crestwood Niobrara) issued preferred interests to CN Jackalope Holdings LLC (Jackalope Holdings), which isare reflected as non-controlling interest in subsidiary apart from partners’ capital (i.e., temporary equity) on our consolidated financial statements.balance sheets. We adjust the carrying amount of our non-controlling interest to its liquidation value each period through net income attributable to non-controlling partner.

In July 2023, we entered into a Fourth Amended and Restated Limited Liability Company Agreement with Jackalope Holdings to modify certain provisions related to the conversion and redemption of the Crestwood Niobrara preferred units. In conjunction with the merger agreement we entered into with Energy Transfer in August 2023 which is further discussed in Note 1, the Crestwood Niobrara preferred units became currently redeemable and as a result, we reflected the Crestwood Niobrara preferred units at their Change of Control Redemption Price (as defined in the agreement) which is equal to 105% of the liquidation value.

The following tables show the change in our non-controlling interest in subsidiary at September 30, 2023 and 2022 (in millions):

Balance at December 31, 2022$434.4 
Distributions to non-controlling partner(31.0)
Net income attributable to non-controlling partner(1)
52.6 
Balance at September 30, 2023$456.0 
Balance at December 31, 2021$434.6 
Distributions to non-controlling partner(31.0)
Net income attributable to non-controlling partner30.8 
Balance at September 30, 2022$434.4 
(1)Includes approximately $21.7 million recorded during the three months ended September 30, 2023 to reflect the Crestwood Niobrara preferred units at their maximum redemption value as discussed above.

In October 2023, Crestwood Niobrara paid a cash distribution of approximately $10.3 million to Jackalope Holdings with respect to the quarter ended September 30, 2023.

Other

In February 2023, Crestwood Equity issued 245,929 performance units (the February 2023 Units) under the Crestwood Equity Partners LP 2018 Long-Term Incentive Plan (Crestwood LTIP). The performance units are designed to provide an incentive for continuous employment to certain key employees. The vesting of performance units is subject to the attainment of certain performance and market goals over a three-year period, and entitle a participant to receive common units of Crestwood Equity without payment of an exercise price upon vesting. As of September 30, 2023, we had total unamortized compensation expense
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of approximately $4.5 million related to the February 2023 Units. During the three and nine months ended September 30, 2017, net income attributable to non-controlling partners was approximately $6.42023, we recognized compensation expense of $0.5 million and $18.8 million. During$1.9 million related to the threeFebruary 2023 Units, which is included in general and nine months ended September 30, 2016, net income attributable to non-controlling partners was approximately $6.1 million and $18.0 million. administrative expenses on our consolidated statements of operations.

During both the nine months ended September 30, 20172023, 161,278 performance units that were previously issued in 2020 under the Crestwood LTIP vested, and 2016, Crestwood Niobrara paid cashas a result of the attainment of certain performance and market goals and related distributions of $11.4 million to GE. In October 2017, Crestwood Niobrara paid a cash distribution of $3.8 million to GE forduring the quarterthree years that the awards were outstanding, we issued 217,702 common units during the nine months ended September 30, 2017.2023 related to those performance units.




Note 10 – Commitments12 - Earnings Per Limited Partner Unit

We calculate the dilutive effect of the preferred units and Contingencies

Legal Proceedings

WeCrestwood Niobrara preferred units using the if-converted method which assumes units are periodically involved in litigation proceedings. If we determine that a negative outcome is probableconverted at the beginning of the period (beginning with their respective issuance date), and the amountresulting common units are included in the denominator of loss is reasonably estimable, then we accrue the estimated amount. The results of litigation proceedings cannot be predicted with certainty. We could incur judgments, enter into settlements or revise our expectations regardingdiluted net income per common unit calculation for the outcome of certain matters, and such developments could have a material adverse effect on our results of operations or cash flowsperiod being presented. Distributions declared in the period inand undeclared distributions that accumulated during the period are added back to the numerator for purposes of the if-converted calculation. The dilutive effect of the unit-based compensation performance units is calculated using the treasury stock method which considers the amounts are paid and/impact to net income or accrued. Asloss attributable to Crestwood Equity Partners and limited partner units from the potential issuance of limited partner units.

We exclude potentially dilutive securities from the determination of diluted earnings per unit (as well as their related income statement impacts) when their impact is anti-dilutive. The following table summarizes information regarding the weighted-average of common units excluded during the three and nine months ended September 30, 20172023 and December 31, 2016, both2022 (in millions):
Three Months EndedNine Months Ended
September 30,September 30,
2023202220232022
Preferred units(1)
7.1 7.1 7.1 7.1 
Crestwood Niobrara’s preferred units(1)
3.8 3.9 — 3.9 
Unit-based compensation performance units(1)
0.1 0.1 — 0.2 
(1)For additional information regarding the potential conversion/redemption of our preferred units and Crestwood Niobrara’s preferred units to CEQP common units, and CMLP had lessadditional information regarding our performance units, see our 2022 Annual Report on Form 10-K, Note 1 and Note 11.


The following table shows Crestwood Equity’s common unitholders’ interest in net income (loss) and weighted-average limited partner units used in computing basic and diluted net income (loss) per limited partner unit for the three and nine months ended September 30, 2023 and 2022 (in millions, except for per unit data):

Three Months EndedNine Months Ended
September 30,September 30,
2023202220232022
Common unitholders’ interest in net income (loss)$(35.1)$(68.3)$107.9 $(57.2)
Diluted net income (loss)$(35.1)$(68.3)$107.9 $(57.2)
Weighted-average limited partners’ units outstanding - basic105.2 107.1 105.2 97.1 
Dilutive effect of Crestwood Niobrara preferred units— — 3.8 — 
Dilutive effect of unit-based compensation performance units— — 0.1 — 
Weighted-average limited partners’ units outstanding - diluted105.2 107.1 109.1 97.1 
Net income (loss) per limited partner unit:
Basic$(0.33)$(0.64)$1.03 $(0.59)
Diluted$(0.33)$(0.64)$0.99 $(0.59)

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Note 13 – Segments
than $0.1
Our financial statements reflect three operating and reporting segments: (i) gathering and processing north operations; (ii) gathering and processing south operations; and (iii) storage and logistics operations. Our corporate operations include all general and administrative expenses that are not allocated to our reportable segments.

Below is a description of our operating and reporting segments.

•Gathering and Processing North. Our gathering and processing north operations provide natural gas gathering, compression, treating and processing services, crude oil gathering and storage services and produced water gathering and disposal services to producers in the Williston Basin and Powder River Basin.

•Gathering and Processing South. Our gathering and processing south operations provide natural gas gathering, compression, treating and processing services, crude oil gathering services and produced water gathering and disposal services to producers in the Delaware Basin.

•Storage and Logistics. Our storage and logistics operations provide NGLs, crude oil and natural gas storage, terminal, marketing and transportation (including rail, truck and pipeline) services to producers, refiners, marketers, utilities and other customers.

We assess the performance of our operating segments based on EBITDA, which is identified as income (loss) before debt-related costs (interest and debt expense, net), income taxes and depreciation, amortization and accretion expense. Below is a reconciliation of CEQP’s and CMLP’s net income to EBITDA (in millions):
CEQPCMLP
Three Months EndedNine Months EndedThree Months EndedNine Months Ended
September 30,September 30,September 30,September 30,
20232022202320222023202220232022
Net income (loss)$12.1 $(43.0)$205.6 $18.6 $21.4 $(113.0)$217.8 $(107.4)
Add:
Interest and debt expense, net56.9 47.6 167.9 123.8 56.9 47.6 167.9 123.8 
Provision for income taxes0.2 1.4 1.1 1.7 0.2 1.4 1.0 1.6 
Depreciation, amortization and accretion80.2 86.9 242.7 242.3 80.1 86.8 242.5 248.0 
EBITDA$149.4 $92.9 $617.3 $386.4 $158.6 $22.8 $629.2 $266.0 

The following tables summarize CEQP’s and CMLP’s reportable segment data for the three and nine months ended September 30, 2023 and 2022 (in millions). Intersegment revenues included in the following tables are accounted for as arms-length transactions that apply our revenue recognition policy described in our 2022 Annual Report on Form 10-K. Included in earnings from unconsolidated affiliates, net reflected in the tables below was approximately $1.3 million accruedand $2.5 million of our proportionate share of net interest income, income taxes, depreciation and amortization expense and gains on long-lived assets, net recorded by our equity investments for outstanding legal matters. Basedthe three months ended September 30, 2023 and 2022 and $5.4 million and $12.0 million for the nine months ended September 30, 2023 and 2022.

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Segment EBITDA Information

Three Months Ended September 30, 2023
Gathering and Processing NorthGathering and Processing SouthStorage and LogisticsCorporateTotal
Crestwood Midstream
Revenues$262.8 $123.0 $753.6 $— $1,139.4 
Intersegment revenues, net70.9 52.5 (123.4)— — 
Costs of product/services sold158.4 121.1 622.1 — 901.6 
Operations and maintenance expense29.9 14.9 12.1 — 56.9 
General and administrative expense— — — 20.8 20.8 
Loss on long-lived assets, net— — (2.6)— (2.6)
Earnings from unconsolidated affiliates, net— 1.1 — — 1.1 
Crestwood Midstream EBITDA$145.4 $40.6 $(6.6)$(20.8)$158.6 
Crestwood Equity
General and administrative expense— — — 9.4 9.4 
Other income, net— — — 0.2 0.2 
Crestwood Equity EBITDA$145.4 $40.6 $(6.6)$(30.0)$149.4 

Three Months Ended September 30, 2022
Gathering and Processing NorthGathering and Processing SouthStorage and LogisticsCorporateTotal
Crestwood Midstream
Revenues$272.6 $177.4 $1,116.0 $— $1,566.0 
Intersegment revenues, net142.2 137.8 (280.0)— — 
Costs of product/services sold230.2 249.6 807.0 — 1,286.8 
Operations and maintenance expense27.4 14.3 13.3 — 55.0 
General and administrative expense— — — 32.3 32.3 
Loss on long-lived assets, net— (247.6)— — (247.6)
Gain on acquisition— 75.3 — — 75.3 
Earnings from unconsolidated affiliates, net— 2.0 1.2 — 3.2 
Crestwood Midstream EBITDA$157.2 $(119.0)$16.9 $(32.3)$22.8 
Crestwood Equity
General and administrative expense— — — 1.6 1.6 
Gain on long-lived assets(1)
— 71.7 — — 71.7 
Crestwood Equity EBITDA$157.2 $(47.3)$16.9 $(33.9)$92.9 

(1)Represents the gain on currently available information,the sale of our Barnett operations recorded by CEQP. For a further discussion of this transaction, see Note 3.
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Nine Months Ended September 30, 2023
Gathering and Processing NorthGathering and Processing SouthStorage and LogisticsCorporateTotal
Crestwood Midstream
Revenues$717.1 $373.3 $2,333.3 $— $3,423.7 
Intersegment revenues, net231.0 119.2 (350.2)— — 
Costs of product/services sold447.7 329.8 1,906.1 — 2,683.6 
Operations and maintenance expense85.6 45.2 35.9 — 166.7 
General and administrative expense— — — 74.6 74.6 
Gain (loss) on long-lived assets, net0.1 (2.7)(2.6)0.4 (4.8)
Earnings from unconsolidated affiliates, net(1)
— 2.0 133.2 — 135.2 
Crestwood Midstream EBITDA$414.9 $116.8 $171.7 $(74.2)$629.2 
Crestwood Equity
General and administrative expense— — — 12.2 12.2 
Other income, net— — — 0.3 0.3 
Crestwood Equity EBITDA$414.9 $116.8 $171.7 $(86.1)$617.3 

(1)In April 2023, we believe itsold our equity interest in Tres Holdings which is remote that future costsreflected in our storage and logistics segment. During the nine months ended September 30, 2023, we recorded a gain on the sale of approximately $132 million, which is reflected as an increase in our earnings from unconsolidated affiliates.

Nine Months Ended September 30, 2022
Gathering and Processing NorthGathering and Processing SouthStorage and LogisticsCorporateTotal
Crestwood Midstream
Revenues$787.2 $243.4 $3,567.2 $— $4,597.8 
Intersegment revenues, net421.2 137.8 (559.0)— — 
Costs of product/services sold686.6 249.6 2,928.2 — 3,864.4 
Operations and maintenance expense78.6 28.6 36.8 — 144.0 
General and administrative expense— — — 99.0 99.0 
Loss on long-lived assets, net— (307.8)(4.1)— (311.9)
Gain on acquisition— 75.3 — — 75.3 
Earnings from unconsolidated affiliates, net— 9.4 2.8 — 12.2 
Crestwood Midstream EBITDA$443.2 $(120.1)$41.9 $(99.0)$266.0 
Crestwood Equity
General and administrative expense— — — 4.8 4.8 
Gain on long-lived assets(1)
— 125.0 — — 125.0 
Other income, net— — — 0.2 0.2 
Crestwood Equity EBITDA$443.2 $4.9 $41.9 $(103.6)$386.4 

(1)Represents the elimination of the loss on long-lived assets of approximately $53 million recorded by CMLP related to known contingent liability exposuresthe sale of our legacy assets in the Barnett Shale and a gain on long-lived assets of approximately $72 million recorded by CEQP related to the sale. For a further discussion of this transaction, see Note 3.

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Other Segment Information

CEQPCMLP
September 30, 2023December 31, 2022September 30, 2023December 31, 2022
Total Assets
Gathering and Processing North$3,921.3 $4,003.6 $3,921.3 $4,003.6 
Gathering and Processing South1,452.4 1,473.0 1,452.4 1,473.0 
Storage and Logistics946.1 1,057.6 946.1 1,057.6 
Corporate40.0 32.8 34.4 27.2 
Total assets$6,359.8 $6,567.0 $6,354.2 $6,561.4 


Note 14 - Revenues

Contract Assets and Contract Liabilities

Our contract assets and contract liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. Our receivables related to our revenue contracts accounted for which we can estimate will exceed current accruals by an amount that would have a material adverse impactunder Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) totaled $336.5 million and $368.2 million at September 30, 2023 and December 31, 2022, and are included in accounts receivable on our consolidated financial statements. As we learn new facts concerning contingencies, we reassessbalance sheets. Our contract assets are included in other non-current assets on our position both with respect toconsolidated balance sheets. Our contract liabilities primarily consist of current and non-current deferred revenues. On our consolidated balance sheets, our current deferred revenues are included in accrued expenses and other liabilities and our non-current deferred revenues are included in other potential exposures.long-term liabilities. The majority of revenues associated with our deferred revenues is expected to be recognized as the performance obligations under the related contracts are satisfied over the next 14 years.


Any loss estimates are inherently subjective, based on currently available information,The following table summarizes our contract assets and are subjectcontract liabilities (in millions):

September 30, 2023December 31, 2022
Contract assets (non-current)$6.8 $5.4 
Contract liabilities (current)(1)
$20.3 $11.7 
Contract liabilities (non-current)(1)
$207.4 $212.3 

(1)During the three and nine months ended September 30, 2023, we recognized revenues of approximately $4.5 million and $14.9 million that were previously included in contract liabilities at December 31, 2022. The remaining change in our contract liabilities during the three and nine months ended September 30, 2023 is related to management's judgmentcapital reimbursements associated with our revenue contracts and various assumptions. Duerevenue deferrals associated with our contracts with increasing (decreasing) rates.

The following table summarizes the transaction price allocated to the inherently subjective nature of these estimates and the uncertainty and unpredictability surrounding the outcome of legal proceedings, actual results may differ materially from any amountsour remaining performance obligations under certain contracts that have not been accrued.

Regulatory Compliance

In the ordinary course of our business, we are subject to various laws and regulations. In the opinion of our management, compliance with current laws and regulations will not have a material effect on our results of operations, cash flows or financial condition.

Environmental Compliance

Our operations are subject to stringent and complex laws and regulations pertaining to worker health, safety, and the environment. We are subject to laws and regulations at the federal, state, regional and local levels that relate to air and water quality, hazardous and solid waste management and disposal and other environmental matters. The cost of planning, designing, constructing and operating our facilities must incorporate compliance with environmental laws and regulations and safety standards. Failure to comply with these laws and regulations may trigger a variety of administrative, civil and potentially criminal enforcement measures.

During 2014, we experienced three releases totaling approximately 28,000 barrels of produced water on our Arrow water gathering system located on the Fort Berthold Indian Reservation in North Dakota. We immediately notified the National Response Center, the Three Affiliated Tribes and numerous other regulatory authorities, and thereafter contained and cleaned up the releases completely and placed the impacted segments of these water lines back into service. In May 2015, we experienced a release of approximately 5,200 barrels of produced water on our Arrow water gathering system, immediately notified numerous regulatory authorities and other third parties, and thereafter contained and cleaned up the releases. 

In October 2014, we received data requests from the Environmental Protection Agency (EPA) related to the 2014 water releases and we responded to the requests during the first half of 2015.  In April 2015, the EPA issued a Notice of Potential Violation (NOPV) under the Clean Water Act relating to the largest of the 2014 water releases. We responded to the NOPV in May 2015, and in April 2017, we entered into an Administrative Order on Consent (the Order) with the EPA. The Order requires us to continue to remediate and monitor the impacted area for no less than four years unless all goals of the Order are satisfied earlier. The Order does not preclude the EPA from seeking to impose fines and penalties as a result of the water releases.

On March 3, 2015, we received a grand jury subpoena from the United States Attorney’s Office in Bismarck, North Dakota, seeking documents and information relating to the largest of the three 2014 water releases. We provided the requested information during the second quarter of 2015 and key employees were interviewed by the United States’ Attorney in December 2015. On September 13, 2017, we received a notice from the United States Department of Justice that it completed the investigation with no charges being filed against us. In August 2015, we received a notice of violation from the Three Affiliated Tribes' Environmental Division related to our 2014 produced water releases on the Fort Berthold Indian Reservation. The notice of violation imposes fines and requests reimbursements exceeding $1.1 million; however, the notice of violation was stayed on September 15, 2015, upon our posting of a performance bond for the amount contemplated by the notice and pending the outcome of ongoing settlement discussions with the regulatory agencies asserting jurisdiction over the 2014 produced water releases.

We will continue our remediation efforts to ensure the impacted lands are restored to their prior state. We believe these releases are insurable events under our policies, and we have notified our carriers of these events. We have not recorded an insurance receivablerecognized as of September 30, 2017.2023 (in millions):

Remainder of 2023$16.5 
202446.4 
20256.5 
20264.9 
20272.1 
Thereafter1.1 
Total$77.5 


Our remaining performance obligations presented in the table above exclude estimates of variable rate escalation clauses in our contracts with customers, and is generally limited to fixed-fee and percentage-of-proceeds service contracts which have fixed pricing and minimum volume terms and conditions. Our remaining performance obligations generally exclude, based on the following practical expedients that we elected to apply, disclosures for (i) variable consideration allocated to a wholly-unsatisfied promise to transfer a distinct service that forms part of the identified single performance obligation; (ii) unsatisfied performance obligations where the contract term is one year or less; and (iii) contracts for which we recognize revenues as amounts are invoiced.

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Disaggregation of Revenues
At
The following tables summarize our revenues from contracts with customers disaggregated by type of product/service sold and by commodity type for each of our segments for the three and nine months ended September 30, 20172023 and December 31, 2016,2022 (in millions). We believe this summary best depicts how the nature, amount, timing and uncertainty of our accrual of approximately $2.7 millionrevenues and $2.1 million is based on our undiscounted estimate of amounts we will spend on compliance with environmental and other regulations, and any associated fines or penalties. We estimate that our potential liability for reasonably possible outcomescash flows are affected by economic factors. Our non-Topic 606 revenues presented in the tables below primarily represents revenues related to our environmental exposures (including the Arrow water releases described above) could range from approximately $2.7 million to $4.2 million at September 30, 2017.commodity-based derivatives.


Self-Insurance
Three Months Ended September 30, 2023
Gathering and Processing NorthGathering and Processing SouthStorage and LogisticsIntersegment EliminationTotal
Topic 606 revenues
Gathering
Natural gas$32.2 $4.8 $— $— $37.0 
Crude oil16.9 1.9 — — 18.8 
Water51.0 8.4 — — 59.4 
Processing
Natural gas20.0 6.9 — — 26.9 
Storage
Crude oil0.6 — — — 0.6 
NGLs— — 2.1 — 2.1 
Pipeline
Crude oil1.4 0.1 0.6 — 2.1 
NGLs— 6.8 0.2 (6.8)0.2 
Transportation
NGLs— — 2.2 — 2.2 
Rail Loading
Crude oil— — 0.2 — 0.2 
Product Sales
Natural gas27.4 47.5 78.2 (70.1)83.0 
Crude oil139.4 0.8 352.2 (15.0)477.4 
NGLs42.8 98.8 268.4 (31.3)378.7 
Water1.0 — — — 1.0 
Other0.5 — 0.1 (0.2)0.4 
Total Topic 606 revenues333.2 176.0 704.2 (123.4)1,090.0 
Non-Topic 606 revenues0.5 (0.5)49.4 — 49.4 
Total revenues$333.7 $175.5 $753.6 $(123.4)$1,139.4 

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We utilize third-party insurance subject to varying retention levels
Three Months Ended September 30, 2022
Gathering and Processing NorthGathering and Processing SouthStorage and LogisticsIntersegment EliminationTotal
Topic 606 revenues
Gathering
Natural gas$33.4 $10.1 $— $— $43.5 
Crude oil14.7 1.7 — — 16.4 
Water41.8 7.5 — — 49.3 
Processing
Natural gas20.7 4.8 — — 25.5 
Compression
Natural gas— 4.7 — — 4.7 
Storage
Crude oil0.6 — 0.1 — 0.7 
NGLs— — 2.2 — 2.2 
Pipeline
Crude oil1.5 0.1 0.6 — 2.2 
NGLs— 5.2 0.1 (5.2)0.1 
Transportation
NGLs— — 5.0 — 5.0 
Product Sales
Natural gas109.6 144.4 248.4 (205.6)296.8 
Crude oil120.9 — 362.8 (9.8)473.9 
NGLs68.3 136.2 411.7 (58.9)557.3 
Water2.1 — — — 2.1 
Other0.8 — 0.2 (0.5)0.5 
Total Topic 606 revenues414.4 314.7 1,031.1 (280.0)1,480.2 
Non-Topic 606 revenues0.4 0.5 84.9 — 85.8 
Total revenues$414.8 $315.2 $1,116.0 $(280.0)$1,566.0 
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Table of self-insurance, which management considers prudent. Such self-insurance relates to losses and liabilities primarily associated with medical claims, workers' compensation claims and general, product, vehicle and environmental liability. At September 30, 2017 and December 31, 2016, CEQP's self-insurance reserves were $15.8 million and $15.6 million. We estimate that $10.6 millionContents

Nine Months Ended September 30, 2023
Gathering and Processing NorthGathering and Processing SouthStorage and LogisticsIntersegment EliminationTotal
Topic 606 revenues
Gathering
Natural gas$95.5 $13.6 $— $— $109.1 
Crude oil46.3 6.0 — — 52.3 
Water139.9 25.2 — — 165.1 
Processing
Natural gas56.6 19.6 — — 76.2 
Storage
Crude oil1.7 — 0.1 (0.2)1.6 
NGLs— — 6.4 — 6.4 
Pipeline
Crude oil3.7 0.4 1.5 — 5.6 
NGLs— 17.7 0.3 (17.7)0.3 
Transportation
NGLs— — 12.4 — 12.4 
Rail Loading
Crude oil— — 0.6 — 0.6 
Product Sales
Natural gas95.1 113.6 211.9 (182.9)237.7 
Crude oil377.2 1.1 954.4 (57.7)1,275.0 
NGLs126.5 296.9 907.8 (91.3)1,239.9 
Water2.9 — — — 2.9 
Other1.1 — 1.0 (0.4)1.7 
Total Topic 606 revenues946.5 494.1 2,096.4 (350.2)3,186.8 
Non-Topic 606 revenues1.6 (1.6)236.9 — 236.9 
Total revenues$948.1 $492.5 $2,333.3 $(350.2)$3,423.7 

33
Table of this balance will be paid subsequent to September 30, 2018. As such, CEQP has classified $10.6 million in other long-term liabilities on its consolidated balance sheet at September 30, 2017. At September 30, 2017 and December 31, 2016, CMLP's self insurance reserves were $12.9 million and $12.2 million. CMLP estimates that $8.0 million of this balance will be paid subsequent to September 30, 2018. As such, CMLP has classified $8.0 million in other long-term liabilities on its consolidated balance sheet at September 30, 2017.Contents


Guarantees and Indemnifications. We are involved in various joint ventures that sometimes require financial and performance guarantees. In a financial guarantee, we are obligated to make payments if the guaranteed party fails to make payments under, or violates the terms of, the financial arrangement. In a performance guarantee, we provide assurance that the guaranteed party will execute on the terms of the contract. If they do not, we are required to perform on their behalf. We also periodically provide indemnification arrangements related to assets or businesses we have sold. For a further description of our guarantees associated with our joint ventures, see Note 4, and for a further description of our guarantees associated with our assets or businesses we have sold, see our 2016 Annual Report on Form 10-K.
Nine Months Ended September 30, 2022
Gathering and Processing NorthGathering and Processing SouthStorage and LogisticsIntersegment EliminationTotal
Topic 606 revenues
Gathering
Natural gas$92.2 $57.0 $— $— $149.2 
Crude oil43.6 4.6 — — 48.2 
Water117.7 13.0 — — 130.7 
Processing
Natural gas54.8 7.1 — — 61.9 
Compression
Natural gas— 11.3 — — 11.3 
Storage
Crude oil1.7 — 0.4 (0.2)1.9 
NGLs— — 6.9 — 6.9 
Pipeline
Crude oil4.2 0.5 1.5 (0.1)6.1 
NGLs— 5.2 0.2 (5.2)0.2 
Transportation
NGLs— — 16.3 — 16.3 
Rail Loading
Crude oil— — 0.4 — 0.4 
Product Sales
Natural gas269.1 145.3 508.0 (331.2)591.2 
Crude oil394.9 — 1,130.3 (33.9)1,491.3 
NGLs222.7 136.2 1,505.6 (187.9)1,676.6 
Water5.0 — — — 5.0 
Other1.4 — 0.5 (0.5)1.4 
Total Topic 606 revenues1,207.3 380.2 3,170.1 (559.0)4,198.6 
Non-Topic 606 revenues1.1 1.0 397.1 — 399.2 
Total revenues$1,208.4 $381.2 $3,567.2 $(559.0)$4,597.8 


Our potential exposure under guarantee and indemnification arrangements can range from a specified amount to an unlimited dollar amount, depending on the nature of the claim, specificity as to duration, and the particular transaction. As of September 30, 2017 and December 31, 2016, we have no amounts accrued for these guarantees.


Note 1115 – Related Party Transactions


Crestwood Holdings indirectly owns both CEQP's and CMLP's general partner. The affiliates of Crestwood Holdings and its owners are considered CEQP's and CMLP's related parties, including Sabine Oil and Gas LLC (Sabine) and Arsenal Resources. CEQP and CMLPWe enter into transactions with theirour affiliates within the ordinary course of business, including gas gathering and processing services under long-term contracts, product purchases, marketing services and various operating agreements.agreements, including operating leases. We also enter into transactions with our affiliates related to services provided on our expansion projects. For a further description of our related party agreements, see our 2022 Annual Report on Form 10-K. During the nine months ended September 30, 2023, we paid approximately $1.0 million of capital expenditures to Applied Consultants, Inc., an affiliate of First Reserve.



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The following table shows transactions with our affiliates which are reflected in our consolidated statements of operations (in millions):.
Three Months EndedNine Months Ended
September 30,September 30,
2023202220232022
Revenues at CEQP and CMLP(1)
$— $140.8 $— $372.7 
Costs of product/services sold at CEQP and CMLP(2)
$— $51.3 $0.5 $232.9 
Operations and maintenance expenses at CEQP and CMLP(3)
$1.0 $2.6 $4.6 $12.4 
General and administrative expenses charged by CEQP to CMLP, net(4)
$5.4 $8.5 $22.4 $23.5 
General and administrative expenses at CEQP and CMLP(5)
$— $— $— $1.3 
 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Gathering and processing revenues at CEQP and CMLP$0.5
 $0.7
 $1.4
 $2.1
Gathering and processing costs of product/services sold at CEQP and CMLP(1)
$3.7
 $5.0
 $11.8
 $13.7
Operations and maintenance expenses at CEQP and CMLP(2)
$6.6
 $1.8
 $16.4
 $3.5
General and administrative expenses charged by CEQP to CMLP, net(3)
$4.4
 $2.7
 $14.8
 $9.6
General and administrative expenses at CEQP charged from Crestwood Holdings, net(4)
$(0.2) $(0.5) $(0.4) $(0.6)


(1)Represents natural gas purchases from Sabine.
(2)
We have operating agreements with certain of our unconsolidated affiliates pursuant to which we charge them operations and maintenance expenses in accordance with their respective agreements. During the three and nine months ended September 30, 2017, we charged $2.0 million and $6.5 million to Stagecoach Gas, $0.8 million and $2.6 million to Tres Palacios, $3.7 million and $7.0 million to Crestwood Permian and $0.1 million and $0.3 million to Jackalope. During the three and nine months ended September 30, 2016, we charged $0.8 million and $2.2 million to Tres Palacios and $1.0 million and$1.3 million to Stagecoach Gas.
(3)Includes $5.2 million and $17.1 million of net unit-based compensation charges allocated from CEQP to CMLP for the three and nine months ended September 30, 2017 and $3.5 million and $11.9 million for the three and nine months ended September 30, 2016. In addition, CMLP shares common management, general and administrative and overhead costs with CEQP. During both the three and nine months ended September 30, 2017 and 2016, CMLP allocated $0.8 million and $2.3 million of general and administrative costs to CEQP.
(4)Includes less than $1.1 million and $1.9 million unit-based compensation charges allocated from Crestwood Holdings to CEQP and CMLP during the three and nine months ended September 30, 2017 and $0.6 million and $1.5 million during the three and nine months ended September 30, 2016.

(1)Includes (i) $83.0 million and $218.9 million during the three and nine months ended September 30, 2022 primarily related to the sale of crude oil and NGLs to a subsidiary of Chord; (ii) $57.4 million and $148.6 million during the three and nine months ended September 30, 2022 primarily related to gathering and processing services provided to a subsidiary of Chord; (iii) $0.3 million and $3.9 million during the three and nine months ended September 30, 2022 related to the sale of NGLs to a subsidiary of Crestwood Permian; and (iv) $0.1 million and $1.3 million during the three and nine months ended September 30, 2022 related to compressor leases with a subsidiary of Crestwood Permian.
(2)Includes (i) $0.3 million during the nine months ended September 30, 2023 and $0.3 million and $1.7 million during the three and nine months ended September 30, 2022 primarily related to purchases of natural gas from a subsidiary of Tres Holdings; (ii) $0.2 million during the nine months ended September 30, 2023 and $0.3 million during both the three and nine months ended September 30, 2022 related to gathering services under agreements with Crestwood Permian Basin; (iii) $41.5 million and $114.1 million during the three and nine months ended September 30, 2022 primarily related to purchases of NGLs from a subsidiary of Chord; and (iv) $9.2 million and $116.8 million during the three and nine months ended September 30, 2022 related to purchases of natural gas and NGLs from a subsidiary of Crestwood Permian.
(3)We have operating agreements with certain of our unconsolidated affiliates pursuant to which we charge them operations and maintenance expenses in accordance with their respective agreements, and these charges are reflected as a reduction of operations and maintenance expenses in our consolidated statements of operations. During the nine months ended September 30, 2023, we charged $1.5 million to Tres Holdings and during the three and nine months ended September 30, 2023, we charged $1.0 million and $3.1 million to Crestwood Permian Basin. During the three and nine months ended September 30, 2022, we charged $1.2 million and $3.5 million to Tres Holdings, $1.0 million to Crestwood Permian Basin in both periods and $0.4 million and $7.9 million to Crestwood Permian.
(4)Includes $6.5 million and $25.7 million of unit-based compensation allocated from CEQP to CMLP during the three and nine months ended September 30, 2023 and $9.6 million and $26.8 million during the three and nine months ended September 30, 2022. In addition, includes $1.1 million and $3.3 million of CMLP’s general and administrative costs allocated to CEQP during the three and nine months ended September 30, 2023 and $1.1 million and $3.3 million during the three and nine months ended September 30, 2022.
(5)Represents general and administrative expenses related to a transition services agreement with Chord.

The following table shows accounts receivable and accounts payable from our affiliates (in millions):
September 30,
2023		December 31,
2022
Accounts receivable at CEQP and CMLP$0.4 $1.6 
Accounts payable at CEQP and CMLP$0.1 $3.0 
35
 September 30,
2017		 December 31,
2016
Accounts receivable at CEQP and CMLP$9.8
 $5.6
Accounts payable at CEQP$9.7
 $2.5
Accounts payable at CMLP$7.2
 $—


Note 12 – Segments

Financial Information

We have three operating and reportable segments: (i) gathering and processing operations; (ii) storage and transportation operations; and (iii) marketing, supply and logistics operations. Our corporate operations include all general and administrative expenses that are not allocated to our reportable segments. We assess the performance of our operating segments based on EBITDA, which is defined as income before income taxes, plus debt-related costs (interest and debt expense, net and gain (loss) on modification/extinguishment of debt) and depreciation, amortization and accretion expense.

Below is a reconciliation of CEQP's net income (loss) to EBITDA (in millions):
 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Net income (loss)$(27.9) $3.0
 $(47.0) $(127.8)
Add:       
Interest and debt expense, net24.2
 27.5
 74.8
 97.9
(Gain) loss on modification/extinguishment of debt—
 —
 37.7
 (10.0)
Provision for income taxes0.1
 0.2
 —
 0.2
Depreciation, amortization and accretion48.1
 50.3
 145.2
 177.0
EBITDA$44.5
 $81.0
 $210.7
 $137.3

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The following tables summarize CEQP's reportable segment data for the three and nine months ended September 30, 2017 and 2016 (in millions). Intersegment revenues included in the following tables are accounted for as arms-length transactions that apply our revenue recognition policies described in our 2016 Annual Report on Form 10-K. Included in earnings from unconsolidated affiliates, net below was approximately $10.0 million and $8.3 million of depreciation and amortization expense and gains (losses) on long-lived assets, net related to our equity investments for the three months ended September 30, 2017 and 2016 and $25.7 million and $15.3 million for the nine months ended September 30, 2017 and 2016.
 Three Months Ended September 30, 2017
 Gathering and Processing Storage and Transportation Marketing, Supply and Logistics Corporate Total
Revenues$434.4
 $6.2
 $515.0
 $—
 $955.6
Intersegment revenues29.9
 1.2
 (31.1) —
 —
Costs of product/services sold378.6
 0.2
 479.7
 —
 858.5
Operations and maintenance expense16.2
 1.0
 18.3
 —
 35.5
General and administrative expense—
 —
 —
 22.5
 22.5
Gain (loss) on long-lived assets(3.9) —
 0.6
 (3.0) (6.3)
Earnings from unconsolidated affiliates, net4.3
 7.2
 —
 —
 11.5
Other income, net—
 —
 —
 0.2
 0.2
EBITDA$69.9
 $13.4
 $(13.5) $(25.3) $44.5
Goodwill$45.9
 $—
 $153.1
 $—
 $199.0
Total assets$2,452.2
 $1,049.9
 $1,002.3
 $20.9
 $4,525.3
 Three Months Ended September 30, 2016
 Gathering and Processing Storage and Transportation Marketing, Supply and Logistics Corporate Total
Revenues$279.3
 $18.3
 $290.0
 $—
 $587.6
Intersegment revenues24.8
 1.5
 (26.3) —
 —
Costs of product/services sold226.1
 0.1
 240.5
 —
 466.7
Operations and maintenance expense17.4
 2.5
 13.2
 —
 33.1
General and administrative expense—
 —
 —
 18.3
 18.3
Loss on long-lived assets(2.0) (0.1) —
 —
 (2.1)
Earnings from unconsolidated affiliates, net5.5
 7.9
 —
 —
 13.4
Other income, net—
 —
 —
 0.2
 0.2
EBITDA$64.1
 $25.0
 $10.0
 $(18.1) $81.0

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 Nine Months Ended September 30, 2017
 Gathering and Processing Storage and Transportation Marketing, Supply and Logistics Corporate Total
Revenues$1,208.1
 $24.7
 $1,401.2
 $—
 $2,634.0
Intersegment revenues94.3
 4.7
 (99.0) —
 —
Costs of product/services sold1,049.9
 0.3
 1,221.4
 —
 2,271.6
Operations and maintenance expense51.8
 3.4
 48.2
 —
 103.4
General and administrative expense—
 —
 —
 71.6
 71.6
Gain (loss) on long-lived assets(3.9) —
 0.6
 (3.0) (6.3)
Earnings from unconsolidated affiliates, net7.7
 21.5
 —
 —
 29.2
Other income, net—
 —
 —
 0.4
 0.4
EBITDA$204.5
 $47.2
 $33.2
 $(74.2) $210.7
Goodwill$45.9
 $—
 $153.1
 $—
 $199.0
Total assets$2,452.2
 $1,049.9
 $1,002.3
 $20.9
 $4,525.3

 Nine Months Ended September 30, 2016
 Gathering and Processing Storage and Transportation Marketing, Supply and Logistics Corporate Total
Revenues$787.7
 $131.5
 $806.3
 $—
 $1,725.5
Intersegment revenues75.9
 3.0
 (78.9) —
 —
Costs of product/services sold632.2
 4.9
 643.0
 —
 1,280.1
Operations and maintenance expense56.1
 18.2
 45.6
 —
 119.9
General and administrative expense—
 —
 —
 70.2
 70.2
Loss on long-lived assets(2.0) (32.8) —
 —
 (34.8)
Goodwill impairment(8.6) (13.7) (87.4) —
 (109.7)
Earnings from unconsolidated affiliates, net16.5
 9.6
 —
 —
 26.1
Other income, net—
 —
 —
 0.4
 0.4
EBITDA$181.2
 $74.5
 $(48.6) $(69.8) $137.3

Below is a reconciliation of CMLP's net income (loss) to EBITDA (in millions):

 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Net income (loss)$(29.8) $0.6
 $(53.1) $(130.3)
Add:       
Interest and debt expense, net24.2
 27.5
 74.8
 97.9
(Gain) loss on modification/extinguishment of debt—
 —
 37.7
 (10.0)
Provision for income taxes0.1
 —
 —
 —
Depreciation, amortization and accretion50.9
 53.2
 153.5
 185.2
EBITDA$45.4
 $81.3
 $212.9
 $142.8


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The following tables summarize CMLP's reportable segment data for the three and nine months ended September 30, 2017 and 2016 (in millions). Intersegment revenues included in the following tables are accounted for as arms-length transactions that apply our revenue recognition policies described in our 2016 Annual Report on Form 10-K. Included in earnings from unconsolidated affiliates, net below was approximately $10.0 million and $8.3 million of depreciation and amortization expense and gains (losses) on long-lived assets, net related to our equity investments for the three months ended September 30, 2017 and 2016 and $25.7 million and $15.3 million for the nine months ended September 30, 2017 and 2016.
 Three Months Ended September 30, 2017
 Gathering and Processing Storage and Transportation Marketing, Supply and Logistics Corporate Total
Revenues$434.4
 $6.2
 $515.0
 $—
 $955.6
Intersegment revenues29.9
 1.2
 (31.1) —
 —
Costs of product/services sold378.6
 0.2
 479.7
 —
 858.5
Operations and maintenance expense16.2
 1.0
 18.3
 —
 35.5
General and administrative expense—
 —
 —
 21.4
 21.4
Gain (loss) on long-lived assets(3.9) —
 0.6
 (3.0) (6.3)
Earnings from unconsolidated affiliates, net4.3
 7.2
 —
 —
 11.5
EBITDA$69.9
 $13.4
 $(13.5) $(24.4) $45.4
Goodwill$45.9
 $—
 $153.1
 $—
 $199.0
Total assets$2,643.7
 $1,049.9
 $1,002.3
 $13.1
 $4,709.0
 Three Months Ended September 30, 2016
 Gathering and Processing Storage and Transportation Marketing, Supply and Logistics Corporate Total
Revenues$279.3
 $18.3
 $290.0
 $—
 $587.6
Intersegment revenues24.8
 1.5
 (26.3) —
 —
Costs of product/services sold226.1
 0.1
 240.5
 —
 466.7
Operations and maintenance expense17.4
 3.0
 13.2
 —
 33.6
General and administrative expense—
 —
 —
 17.3
 17.3
Loss on long-lived assets(2.0) (0.1) —
 —
 (2.1)
Earnings from unconsolidated affiliates, net5.5
 7.9
 —
 —
 13.4
EBITDA$64.1
 $24.5
 $10.0
 $(17.3) $81.3
 Nine Months Ended September 30, 2017
 Gathering and Processing Storage and Transportation Marketing, Supply and Logistics Corporate Total
Revenues$1,208.1
 $24.7
 $1,401.2
 $—
 $2,634.0
Intersegment revenues94.3
 4.7
 (99.0) —
 —
Costs of product/services sold1,049.9
 0.3
 1,221.4
 —
 2,271.6
Operations and maintenance expense51.8
 3.4
 48.2
 —
 103.4
General and administrative expense—
 —
 —
 69.0
 69.0
Gain (loss) on long-lived assets(3.9) —
 0.6
 (3.0) (6.3)
Earnings from unconsolidated affiliates, net7.7
 21.5
 —
 —
 29.2
EBITDA$204.5
 $47.2
 $33.2
 $(72.0) $212.9
Goodwill$45.9
 $—
 $153.1
 $—
 $199.0
Total assets$2,643.7
 $1,049.9
 $1,002.3
 $13.1
 $4,709.0


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 Nine Months Ended September 30, 2016
 Gathering and Processing Storage and Transportation Marketing, Supply and Logistics Corporate Total
Revenues$787.7
 $131.5
 $806.3
 $—
 $1,725.5
Intersegment revenues75.9
 3.0
 (78.9) —
 —
Costs of product/services sold632.2
 4.9
 643.0
 —
 1,280.1
Operations and maintenance expense56.1
 15.0
 45.6
 —
 116.7
General and administrative expense—
 —
 —
 67.5
 67.5
Loss on long-lived assets(2.0) (32.8) —
 —
 (34.8)
Goodwill impairment(8.6) (13.7) (87.4) —
 (109.7)
Earnings from unconsolidated affiliates, net16.5
 9.6
 —
 —
 26.1
EBITDA$181.2
 $77.7
 $(48.6) $(67.5) $142.8


Note 13 – Condensed Consolidating Financial Information

Crestwood Midstream is a holding company (Parent) and owns no operating assets and has no significant operations independent of its subsidiaries. Obligations under Crestwood Midstream's senior notes and its credit facility are jointly and severally guaranteed by substantially all of its subsidiaries, except for Crestwood Infrastructure Holdings LLC, Crestwood Niobrara, Crestwood Pipeline and Storage Northeast LLC (Crestwood Northeast), PRBIC and Tres Holdings and their respective subsidiaries (collectively, Non-Guarantor Subsidiaries). Crestwood Midstream Finance Corp., the co-issuer of its senior notes, is Crestwood Midstream's 100% owned subsidiary and has no material assets, operations, revenues or cash flows other than those related to its service as co-issuer of the Crestwood Midstream senior notes.

The tables below present condensed consolidating financial statements for Crestwood Midstream as Parent on a stand-alone, unconsolidated basis, and Crestwood Midstream's combined guarantor and combined non-guarantor subsidiaries as of September 30, 2017 and December 31, 2016, and for the three and nine months ended September 30, 2017 and 2016.  The financial information may not necessarily be indicative of the results of operations, cash flows or financial position had the subsidiaries operated as independent entities.

The condensed consolidating financial statements for the three and nine months ended September 30, 2016 include reclassifications that were made to conform to the current year presentation, none of which impacted previously reported net income (loss) or partners’ capital. In particular, the condensed consolidating statement of operations was modified to consider the impact of net income (loss) attributable to non-controlling partners in subsidiaries in arriving at equity in net income (loss) of subsidiaries in the parent and eliminations columns of those statements.

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Crestwood Midstream Partners LP
Condensed Consolidating Balance Sheet
September 30, 2017
(in millions)
 Parent 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 Eliminations Consolidated
Assets         
Current assets:         
Cash$1.1
 $—
 $—
 $—
 $1.1
Accounts receivable—
 341.0
 3.7
 —
 344.7
Inventory—
 92.9
 —
 —
 92.9
Other current assets—
 13.0
 —
 —
 13.0
Total current assets1.1
 446.9
 3.7
 —
 451.7
          
Property, plant and equipment, net—
 2,242.2
 —
 —
 2,242.2
Goodwill and intangible assets, net—
 814.0
 —
 —
 814.0
Investment in consolidated affiliates4,025.8
 —
 —
 (4,025.8) —
Investment in unconsolidated affiliates—
 —
 1,198.5
 —
 1,198.5
Other assets—
 2.6
 —
 —
 2.6
Total assets$4,026.9
 $3,505.7
 $1,202.2
 $(4,025.8) $4,709.0
          
Liabilities and partners' capital         
Current liabilities:         
Accounts payable$—
 $310.0
 $—
 $—
 $310.0
Other current liabilities39.9
 125.4
 —
 —
 165.3
Total current liabilities39.9
 435.4
 —
 —
 475.3
          
Long-term liabilities:         
Long-term debt, less current portion1,614.6
 0.8
 —
 —
 1,615.4
Other long-term liabilities—
 45.3
 —
 —
 45.3
Deferred income taxes—
 0.7
 —
 —
 0.7
          
Partners' capital2,372.4
 3,023.5
 1,002.3
 (4,025.8) 2,372.4
Interest of non-controlling partners in subsidiaries—
 —
 199.9
 —
 199.9
Total partners' capital2,372.4
 3,023.5
 1,202.2
 (4,025.8) 2,572.3
Total liabilities and partners' capital$4,026.9
 $3,505.7
 $1,202.2
 $(4,025.8) $4,709.0

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Crestwood Midstream Partners LP
Condensed Consolidating Balance Sheet
December 31, 2016
(in millions)
 Parent 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 Eliminations Consolidated
Assets         
Current assets:         
Cash$1.3
 $—
 $—
 $—
 $1.3
Accounts receivable—
 289.3
 0.5
 —
 289.8
Inventory—
 66.0
 —
 —
 66.0
Other current assets—
 16.0
 —
 —
 16.0
Total current assets1.3
 371.3
 0.5
 —
 373.1
          
Property, plant and equipment, net—
 2,298.4
 —
 —
 2,298.4
Goodwill and intangible assets, net—
 851.9
 —
 —
 851.9
Investment in consolidated affiliates4,093.7
 —
 —
 (4,093.7) —
Investment in unconsolidated affiliates—
 —
 1,115.4
 —
 1,115.4
Other assets—
 1.8
 —
 —
 1.8
Total assets$4,095.0
 $3,523.4
 $1,115.9
 $(4,093.7) $4,640.6
          
Liabilities and partners' capital         
Current liabilities:         
Accounts payable$—
 $214.5
 $—
 $—
 $214.5
Other current liabilities23.1
 94.4
 —
 —
 117.5
Total current liabilities23.1
 308.9
 —
 —
 332.0
          
Long-term liabilities:         
Long-term debt, less current portion1,521.2
 1.5
 —
 —
 1,522.7
Other long-term liabilities—
 42.0
 —
 —
 42.0
Deferred income taxes—
 0.7
 —
 —
 0.7
          
Partners' capital2,550.7
 3,170.3
 923.4
 (4,093.7) 2,550.7
Interest of non-controlling partners in subsidiaries—
 —
 192.5
 —
 192.5
Total partners' capital2,550.7
 3,170.3
 1,115.9
 (4,093.7) 2,743.2
Total liabilities and partners' capital$4,095.0
 $3,523.4
 $1,115.9
 $(4,093.7) $4,640.6



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Crestwood Midstream Partners LP
Condensed Consolidating Statement of Operations
Three Months Ended September 30, 2017
(in millions)
 Parent 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 Eliminations Consolidated
Revenues$—
 $955.6
 $—
 $—
 $955.6
Costs of product/services sold—
 858.5
 —
 —
 858.5
Expenses:         
Operations and maintenance—
 35.5
 —
 —
 35.5
General and administrative15.2
 6.2
 —
 —
 21.4
Depreciation, amortization and accretion—
 50.9
 —
 —
 50.9
 15.2
 92.6
 —
 —
 107.8
Other operating expense:         
Loss on long-lived assets, net—
 (6.3) —
 —
 (6.3)
Operating loss(15.2) (1.8) —
 —
 (17.0)
Earnings from unconsolidated affiliates, net—
 —
 11.5
 —
 11.5
Interest and debt expense, net(24.2) —
 —
 —
 (24.2)
Equity in net income (loss) of subsidiaries3.2
 —
 —
 (3.2) —
Income (loss) before income taxes(36.2) (1.8) 11.5
 (3.2) (29.7)
Provision for income taxes—
 (0.1) —
 —
 (0.1)
Net income (loss)(36.2) (1.9) 11.5
 (3.2) (29.8)
Net income attributable to non-controlling partners in subsidiaries—
 —
 6.4
 —
 6.4
Net income (loss) attributable to Crestwood Midstream Partners LP$(36.2) $(1.9) $5.1
 $(3.2) $(36.2)

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Crestwood Midstream Partners LP
Condensed Consolidating Statement of Operations
Three Months Ended September 30, 2016
(in millions)
 Parent 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
��Eliminations Consolidated
Revenues$—
 $587.6
 $—
 $—
 $587.6
Costs of product/services sold—
 466.7
 —
 —
 466.7
Expenses:         
Operations and maintenance—
 33.6
 —
 —
 33.6
General and administrative13.3
 4.0
 —
 —
 17.3
Depreciation, amortization and accretion—
 53.2
 —
 —
 53.2
 13.3
 90.8
 —
 —
 104.1
Other operating expense:         
Loss on long-lived assets, net—
 (2.1) —
 —
 (2.1)
Operating income (loss)(13.3) 28.0
 —
 —
 14.7
Earnings from unconsolidated affiliates, net—
 —
 13.4
 —
 13.4
Interest and debt expense, net(27.5) —
 —
 —
 (27.5)
Equity in net income (loss) of subsidiaries35.3
 —
 —
 (35.3) —
Net income (loss)(5.5) 28.0
 13.4
 (35.3) 0.6
Net income attributable to non-controlling partners in subsidiaries—
 —
 6.1
 —
 6.1
Net income (loss) attributable to Crestwood Midstream Partners LP(5.5) 28.0
 7.3
 (35.3) (5.5)


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Crestwood Midstream Partners LP
Condensed Consolidating Statement of Operations
Nine Months Ended September 30, 2017
(in millions)
 Parent 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 Eliminations Consolidated
Revenues$—
 $2,634.0
 $—
 $—
 $2,634.0
Costs of product/services sold—
 2,271.6
 —
 —
 2,271.6
Expenses:         
Operations and maintenance—
 103.4
 —
 —
 103.4
General and administrative50.1
 18.9
 —
 —
 69.0
Depreciation, amortization and accretion—
 153.5
 —
 —
 153.5
 50.1
 275.8
 —
 —
 325.9
Other operating expense:         
Loss on long-lived assets, net—
 (6.3) —
 —
 (6.3)
Operating income (loss)(50.1) 80.3
 —
 —
 30.2
Earnings from unconsolidated affiliates, net—
 —
 29.2
 —
 29.2
Interest and debt expense, net(74.8) —
 —
 —
 (74.8)
Loss on modification/extinguishment of debt(37.7) —
 —
 —
 (37.7)
Equity in net income (loss) of subsidiaries90.7
 —
 —
 (90.7) —
Net income (loss)(71.9) 80.3
 29.2
 (90.7) (53.1)
Net income attributable to non-controlling partners in subsidiaries—
 —
 18.8
 —
 18.8
Net income (loss) attributable to Crestwood Midstream Partners LP$(71.9) $80.3
 $10.4
 $(90.7) $(71.9)

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Crestwood Midstream Partners LP
Condensed Consolidating Statement of Operations
Nine Months Ended September 30, 2016
(in millions)
 Parent 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 Eliminations Consolidated
Revenues$—
 $1,725.5
 $—
 $—
 $1,725.5
Costs of product/services sold—
 1,280.1
 —
 —
 1,280.1
Expenses:         
Operations and maintenance—
 116.7
 —
 —
 116.7
General and administrative54.2
 13.3
 —
 —
 67.5
Depreciation, amortization and accretion—
 185.2
 —
 —
 185.2
 54.2
 315.2
 —
 —
 369.4
Other operating expense:         
Loss on long-lived assets, net—
 (34.8) —
 —
 (34.8)
Goodwill Impairment—
 (109.7) —
 —
 (109.7)
Operating loss(54.2) (14.3) —
 —
 (68.5)
Earnings from unconsolidated affiliates, net—
 —
 26.1
 —
 26.1
Interest and debt expense, net(97.9) —
 —
 —
 (97.9)
Gain on modification/extinguishment of debt10.0
 —
 —
 —
 10.0
Equity in net income (loss) of subsidiaries(6.2) —
 —
 6.2
 —
Net income (loss)(148.3) (14.3) 26.1
 6.2
 (130.3)
Net income attributable to non-controlling partners in subsidiaries—
 —
 18.0
 —
 18.0
Net income (loss) attributable to Crestwood Midstream Partners LP$(148.3) $(14.3) $8.1
 $6.2
 $(148.3)

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Crestwood Midstream Partners LP
Condensed Consolidating Statement of Cash Flows
Nine Months Ended September 30, 2017
(in millions)
 Parent 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 Eliminations Consolidated
Cash flows from operating activities:$(102.6) $312.0
 $23.5
 $—
 $232.9
          
Cash flows from investing activities:         
Purchases of property, plant and equipment(5.8) (128.6) —
 —
 (134.4)
Investment in unconsolidated affiliates—
 —
 (46.5) —
 (46.5)
Capital distributions from unconsolidated affiliates—
 —
 35.3
 —
 35.3
Net proceeds from sale of assets—
 1.3
 —
 —
 1.3
Capital distributions from consolidated affiliates0.9
 —
 —
 (0.9) —
Net cash used in investing activities(4.9) (127.3) (11.2) (0.9) (144.3)
          
Cash flows from financing activities:         
Proceeds from the issuance of long-term debt2,209.8
 —
 —
 —
 2,209.8
Payments on long-term debt(2,157.9) (1.3) —
 —
 (2,159.2)
Payments on capital leases—
 (2.2) —
 —
 (2.2)
Payments for debt-related deferred costs(1.0) —
 —
 —
 (1.0)
Distributions paid(119.5) —
 (11.4) —
 (130.9)
Distributions to parent—
 —
 (0.9) 0.9
 —
Taxes paid for unit-based compensation vesting—
 (5.3) —
 —
 (5.3)
Change in intercompany balances175.9
 (175.9) —
 —
 —
Net cash provided by (used in) financing activities107.3
 (184.7) (12.3) 0.9
 (88.8)
          
Net change in cash(0.2) —
 —
 —
 (0.2)
Cash at beginning of period1.3
 —
 —
 —
 1.3
Cash at end of period$1.1
 $—
 $—
 $—
 $1.1

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Crestwood Midstream Partners LP
Condensed Consolidating Statement of Cash Flows
Nine Months Ended September 30, 2016
(in millions)
 Parent 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 Eliminations Consolidated
Cash flows from operating activities:$(140.4) $371.3
 $19.9
 $—
 $250.8
          
Cash flows from investing activities:         
Purchases of property, plant and equipment(1.6) (77.7) —
 —
 (79.3)
Investment in unconsolidated affiliates—
 —
 (6.2) —
 (6.2)
Capital distributions from unconsolidated affiliates—
 —
 9.2
 —
 9.2
Net proceeds from sale of assets

—
 943.1
 —
 —
 943.1
Capital distributions from consolidated affiliates11.5
 —
 —
 (11.5) —
Net cash provided by (used in) investing activities9.9
 865.4
 3.0
 (11.5) 866.8
          
Cash flows from financing activities:         
Proceeds from the issuance of long-term debt1,364.0
 —
 —
 —
 1,364.0
Payments on long-term debt(2,278.4) (0.8) —
 —
 (2,279.2)
Payments on capital leases—
 (1.5) —
 —
 (1.5)
Payments for debt-related deferred costs(3.4) —
 —
 —
 (3.4)
Distributions paid(185.0) —
 (11.4) —
 (196.4)
Distributions to parent—
 —
 (11.5) 11.5
 —
Taxes paid for unit-based compensation vesting—
 (0.8) —
 —
 (0.8)
Change in intercompany balances1,233.7
 (1,233.7) —
 —
 —
Other—
 0.1
 —
 —
 0.1
Net cash provided by (used in) financing activities130.9
 (1,236.7) (22.9) 11.5
 (1,117.2)
          
Net change in cash0.4
 —
 —
 —
 0.4
Cash at beginning of period0.1
 —
 —
 —
 0.1
Cash at end of period$0.5
 $—
 $—
 $—
 $0.5


Note 14– Subsequent Event

In October 2017, we entered into a Purchase Agreement with an affiliate of Kissner Group Holdings LP to sell 100% of our equity interests in US Salt, LLC (US Salt) for approximately $225 million. US Salt is a solution mining and salt production company located on the shores of Seneca Lake near Watkins Glen in Schuyler County, New York. US Salt is included in our marketing, supply and logistics segment. Subject to the terms and conditions of the Purchase Agreement (including customary closing conditions and purchase price adjustments), we expect to close the transaction during the fourth quarter of 2017. The impact of this transaction has not been reflected in this Quarterly Report on Form 10-Q as of and for the three and nine months ended September 30, 2017.



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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

Our Management'sManagement’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the unaudited consolidated financial statements and the accompanying footnotes included in this Quarterly Report on Form 10-Q and Part II, Item 7. Management'sManagement’s Discussion and Analysis of Financial Condition and Results of Operations included in our 20162022 Annual Report on Form 10-K.


This report, including information included or incorporated by reference herein, contains forward-looking statements concerning the financial condition, results of operations, plans, objectives, future performance and business of our company and its subsidiaries. These forward-looking statements include:


•statements that are not historical in nature, including, but not limited to: (i) our belief that anticipated cash from operations, cash distributions from entities that we control, and borrowing capacity under our credit facility will be sufficient to meet our anticipated liquidity needs for the foreseeable future; and (ii) our belief that we do not have material potential liability in connection with legal proceedings that would have a significant financial impact on our consolidated financial condition, results of operations or cash flows; and (iii) our belief that our assets will continue to benefit from the development of unconventional shale plays as significant supply basins; and

•statements preceded by, followed by or that contain forward-looking terminology including the words “believe,” “expect,” “may,” “will,” “should,” “could,” “anticipate,” “estimate,” “intend” or the negation thereof, or similar expressions.


Forward-looking statements are not guarantees of future performance or results. They involve risks, uncertainties and assumptions. Actual results may differ materially from those contemplated by the forward-looking statements due to, among others, the following factors:


•our ability to successfully implement our business plan for our assets and operations;
•governmental legislation and regulations;
•industry and global factors that influence the supply of and demand for crude oil, natural gas and NGLs;
•industry factors that influence the demand for services in the markets (particularly unconventional shale plays) in which we provide services;
•weather conditions;
•outbreak of illness, pandemic or any other public health crisis, including the COVID-19 pandemic;
•the availability of crude oil, natural gas and NGLs, and the price of those commodities, to consumers relative to the price of alternative and competing fuels;
•the availability of storage and transportation infrastructure for hydrocarbons;
•the ability of members of the Organization of Petroleum Exporting Countries and other oil-producing countries to agree and maintain oil price and production controls;
•changes in global economic conditions;conditions, including capital and credit market conditions, inflation and interest rates;
•costs or difficulties related to the integration of our existing businesses and acquisitions;
•environmental claims;
•operating hazards and other risks incidental to the provision of midstream services, including gathering, compressing, treating, processing, fractionating, transporting and storing energy products (i.e., crude oil, NGLs and natural gas) and related products (i.e., produced water);
interest rates;
•the price and availability of debt and equity financing;financing, including our ability to raise capital through alternatives like joint ventures; and
•the ability to sell or monetize assets, in the current market, to reduce indebtedness, to repurchase our equity securities, to make strategic investments, or for other general partnership purposes.


For additional factors that could cause actual results to be materially different from those described in the forward-looking statements above, see Part I, Item IA.1A. Risk Factors of our 20162022 Annual Report on Form 10-K.


OutlookRecent Developments

On November 3, 2023, Crestwood Equity is expected to merge with and Trends

Our business objective isinto a direct wholly-owned subsidiary of Energy Transfer LP (Energy Transfer) in an all-equity transaction valued at approximately $7.1 billion (the Energy Transfer Merger). On August 16, 2023, Crestwood Equity entered into a merger agreement with Energy Transfer pursuant to create long-term value for our unitholders. We expectwhich each Crestwood Equity common unit representing limited partner interests in Crestwood Equity issued and outstanding immediately prior to create long-term value by consistently generating stable operating margin and improved cash flows from operations by prudently financing our investments, maximizing throughput on our assets, and effectively controlling our operating and administrative costs. Our business strategy depends, in part, on our abilitythe Energy Transfer Merger will be converted into the right to provide increased services to our customers at competitive fees, including opportunities to expand our services resulting from expansions, organic growth projects and acquisitions that can be financed appropriately.

We have positioned the Company to generate consistent results in a low commodity price environment without sacrificing revenue upside. For example, many of our G&P assets are supported by long-term, core acreage dedications in shale plays that are economic to varying degrees based upon natural gas, NGL and crude oil prices, the availability of infrastructure to flow production to market, and the operational and financial condition of our diverse customer base. We believe the diversity of our asset portfolio, the risk and cost sharing nature of our strategic joint ventures, the wide range of services provided by our

receive 2.07 common units representing limited partner
42
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investments,interests in Energy Transfer. Each preferred unit representing limited partner interests in Crestwood Equity issued and our extensive customer portfolio collectively position usoutstanding immediately prior to be successful in the current market, which has been impacted by prolonged low commodity prices. In addition, a substantial portion of our midstream investments are based on fixed fee, take-or-pay or minimum volume commitment agreements that ensure a minimum level of cash flow regardless of actual commodity prices or volumetric throughput.

ForEnergy Transfer Merger will, at the remainder of 2017 and beyond, we will continue to execute on our plan to better position the Company to emerge from this challenging market environment as a stronger, better capitalized company that can sustainably resume growing its distributions. We will remain focused on efficiently allocating capital expenditures, eliminating costs (through increased operating efficiencies and cost discipline) and strengthening our balance sheet. We expect to focus on expansion and greenfield opportunities in the Delaware Permian and the Bakken shale as further described in "Segment Highlights" below.

Regulatory Matters

Many aspectselection of the energy midstream sector,holder of such preferred unit, be (i) converted into a preferred unit of Energy Transfer that has substantially similar terms, including with respect to economics and structural protections, as crude-by-rail activitiesthe preferred units of Crestwood Equity, (ii) redeemed in exchange for cash, at a price of 108% of the preferred unit price plus accrued and pipeline integrity, have experienced increased regulatory oversight over the past few years. Priorunpaid distributions to the 2016 presidential election, we expecteddate of such redemption, or (iii) converted into common units, at the trendthen-applicable conversion ratio (one common unit for 10 preferred), subject to the payment of greater regulatory oversightany accrued but unpaid distributions prior to continue forEnergy Transfer Merger. In connection with the foreseeable future, However,Energy Transfer Merger and at the election resultsdirection of Energy Transfer, Crestwood Equity conducted a consent solicitation pursuant to which Crestwood Equity solicited consent from the preferred unitholders to approve an amendment to its Sixth Amended and anticipated changes in policy could lessenRestated Agreement of Limited Partnership. Pursuant to the degree of regulatory scrutiny we face in the near term.

Segment Highlights

Below is a discussion of events that highlight our core business and financing activities.

Gathering and Processing

Bakken. In the Bakken, we are expanding and upgrading our Arrow system water handling facilities, increasing natural gas capacity on the system, and constructing a 30 million cubic feet per day (MMcf/d) natural gas processing facility and associated pipelines that we expect to place into service in late 2017. We believe the installation of a gas processing solution on the Arrow system will,proposed amendment, among other things, spur greater development activity around(i) the Arrow system, allow uspreferred unitholders electing a cash redemption in the Energy Transfer Merger would receive such cash redemption price as increased from 101% to provide greater flow assurance108% of the preferred unit price; and (ii) the preferred unitholders electing to receive preferred units of Energy Transfer would receive such preferred units of Energy Transfer with terms similar to Energy Transfer’s other outstanding series of preferred units. Crestwood Equity received the consents from the preferred unitholders necessary to approve the proposed amendment and therefore, the proposed amendment will be adopted at the closing of the Energy Transfer Merger.

CEQP is a publicly-traded Delaware limited partnership, and its common units are listed on the New York Stock Exchange (NYSE) under the ticker symbol “CEQP” and its preferred units are listed on the NYSE under the ticker symbol “CEQP-P.” In connection with the consummation of the Energy Transfer Merger, we requested that the NYSE delist our common and preferred units and, as a result, trading of our common and preferred units will be suspended on November 3, 2023. We also requested that the NYSE file a Form 25 with the SEC notifying the SEC of the delisting of our common and preferred units and the withdrawal of registration of our common and preferred units under Section 12(b) of the Exchange Act. Following the effectiveness of the Form 25, we intend to file with the SEC a Form 15 regarding the termination of registration of our common and preferred units under the Exchange Act and the suspension of reporting obligations with respect to our producer customers,common and reducepreferred units.

For more information regarding the downstream constraints currently experienced by producers on the Fort Berthold Indian Reservation. The anticipated cost of this natural gas processing facility and associated pipeline is approximately $115 million.In conjunction with this project, we are negotiating various amendments and extensions with several of our producer customers,merger and the impact of these contract negotiations is not expected to have a material impact tomerger agreement, see our 2017 results of operations.
Delaware Permian. In the Delaware Permian, we have identified gathering and processing and transportation opportunities in and around our existing assets, including our joint ventures. Through our Crestwood Permian joint venture, we are expanding both our processing capacity in the region, which includes the construction of a 200 MMcf/d natural gas processing facility in Orla, Texas, and associated pipelines, as well as our interconnection capacity to accommodate greater takeaway options for residue gas and NGLs. The initial cost of the expansion project is expected to cost approximately $170 million with an in-service date in the second half of 2018. We are also developing a crude oil and condensate storage terminal near Orla, Texas that would offer condensate stabilization, truck loading/unloading options and connections to third party pipelines. In addition, we are developing a produced water gathering, disposal and recycling facility in the Delaware Permian. We continue to believe that we are positioned well to benefit from the continued build-out of this world-class resource.

On June 21, 2017, we contributed to Crestwood Permian 100% of theequity interest of Crestwood New Mexico Pipeline LLC (Crestwood New Mexico), our wholly-owned subsidiary that owns our Delaware Basin assets located in Eddy County, New Mexico. This contribution was treated as a transaction between entities under common control, and accordingly we deconsolidated Crestwood New Mexico and our investment in Crestwood Permian was increased by the historical book value of these assets of approximately $69.4 million. In conjunction with this contribution, First Reserve has agreed to contribute to Crestwood Permian the first $151 million of capital costs required to fund the expansion of the Delaware Basin assets, which includes the Orla processing plant and associated pipelines. In October 2017, CPB Subsidiary Holdings LLC, a wholly-subsidiary of Crestwood Permian, entered into a credit agreement with certain lenders. The five year term credit agreement allows for revolving loans, letters of credit and swingline loans in an aggregate principal amount of up to $150 million. Borrowings under the credit agreement will be used to fund expansion projects and for general corporate purposes.

Crestwood Permian Basin has a long-term agreement with SWEPI to construct, own and operate a natural gas gathering system in SWEPI's operated position in the Delaware Permian. SWEPI has dedicated to Crestwood Permian Basin approximately 100,000 acres and gathering rights for SWEPI's gas production across a large acreage position in Loving, Reeves, Ward and Culberson Counties, Texas. The Nautilus gathering system is designed to include 194 miles of low pressure gathering lines, 36

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miles of high pressure trunklines and centralized compression facilities which are expandable over time as production increases, producing gas gathering capacity of approximately 250 MMcf/d. The initial build-out of the Nautilus gathering system was completed on June 6, 2017 and includes 20 receipt point meters, 60 miles of pipeline, a 24-mile high pressure header system, 10,800 horsepower of compression and a high pressure delivery point. Crestwood Permian Basin provides gathering, dehydration, compression and liquids handling services to SWEPI on a fixed fee basis. In October 2017, Shell Midstream purchased a 50% equity interest in Crestwood Permian Basin for approximately $37.9 million in cash. See Item 1. Financial Statements, Note 4 for additional information regarding Crestwood Permian Basin.

During the first half of 2017, we terminated an agreement with a large producer to develop a three-stream gathering system in Reeves County, Texas. We continue to work with this producer and other producers in the area for the potential development of future expansion projects.

Marketing, Supply and Logistics

During 2017, we commenced an in-depth assessment of our trucking and transportation operations to evaluate the markets in which our trucking and transportation business operates, its operating cost structure, customer service levels and organizational efficiencies. Based on this assessment, we, along with our Board of Directors, determined that our trucking and transportation operations should be realigned, including leadership changes, cost reductions, sizing of our fleet and the implementation of rate and profitability key performance indicators. Certain of these changes were implemented during 2017 and will continue throughout the remainder of the year, and we believe these changes will result in improved profitability for this business. Additionally, management plans to realign our trucking operations service capability to be more coordinated with our NGL, crude and water operations and less reliant on third party transportation services. This commercial realignment should allow us to optimize the use of available capacity and position us to reevaluate our trucking and transportation operations in future periods. We anticipate that these realignment efforts will be completed before the end of 2017, which includes the consolidation and relocation of our three corporate offices into two offices located in Houston and Kansas City.

In October 2017, we entered into a Purchase Agreement with an affiliate of Kissner Group Holdings LP to sell 100% of our equity interests in US Salt, LLC (US Salt) for approximately $225 million. US Salt is a solution mining and salt production company located on the shores of Seneca Lake near Watkins Glen in Schuyler County, New York. We intend to use the proceeds from the divestiture to reduce borrowings under the CMLP credit facility and reinvest in on-going organic growth projects in the Bakken and Delaware Basin discussed above in our Gathering and Processing Segment Highlights. Subject to the terms and conditions of the Purchase Agreement (including customary closing conditions and purchase price adjustments), we expect to close the transaction during the fourth quarter of 2017.

Through the execution of the strategic efforts described above, we expect to increase the stability and strength of the Company through a continued challenging and competitive market environment, which will position us to achieve our chief business objective to create long-term value for our unitholders.

Critical Accounting Estimates

Our critical accounting estimates are consistent with those described in our 2016 AnnualCurrent Report on Form 10-K.8-K filed with the SEC on August 16, 2023 and our definitive merger proxy statement on Schedule 14A filed with the SEC on September 29, 2023.


How We Evaluate Our Operations

We evaluate our overall business performance based primarily on EBITDA and Adjusted EBITDA. We do not utilize depreciation, amortization and accretion expense in our key measures because we focus our performance management on cash flow generation and our assets have long useful lives.


EBITDA and Adjusted EBITDA - We believe that EBITDA and Adjusted EBITDA are widely accepted financial indicators of a company'scompany’s operational performance and its ability to incur and service debt, fund capital expenditures and make distributions. We believe that EBITDA and Adjusted EBITDA are useful to our investors because it allows them to use the same performance measure analyzed internally by our management to evaluate the performance of our businesses and investments without regard to the manner in which they are financed or our capital structure. EBITDA is defined as income (loss) before income taxes, plus debt-related costs (interest and debt expense, net and gain (loss) on modification/extinguishment of debt)net), income taxes and depreciation, amortization and accretion expense. Adjusted EBITDA considers the adjusted earnings impact of our unconsolidated affiliates by adjusting our equity earnings or losses from our unconsolidated affiliates to reflect our proportionate share (based on the distribution percentage) of their EBITDA, excluding gains and losses on long-lived assets and other impairments. Adjusted EBITDA also considers the impact of certain significant items, such as unit-based compensation, charges,gains or losses on long-lived assets, impairments of goodwill, third partythird-party costs incurred related to potential and completed acquisitions, certain environmental remediation costs, the change in fair value

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of commodity inventory-related derivative contracts, costs associated with our 2017the realignment and restructuring of our Marketing, Supply and Logistics operations and related consolidation and relocation of our corporate offices,structure, and other transactions identified in a specific reporting period. The change in fair value of commodity inventory-related derivative contracts is considered in determining Adjusted EBITDA given that the timing of recognizing gains and losses on these derivative contracts differs from the recognition of revenue for the related underlying sale of inventory to which these derivatives relate. Changes in the fair value of other derivative contracts isare not considered in determining Adjusted EBITDA given the relatively short-term nature of those derivative contracts. EBITDA and Adjusted EBITDA are not measures calculated in accordance with U.S. GAAP, as they do not include deductions for itemsexpenses such as depreciation, amortization and accretion, interest and income taxes, which are necessary to maintain our business. EBITDA and Adjusted EBITDA should not be considered as alternatives to net income, operating cash flow or any other measure of financial performance presented in accordance with U.S. GAAP. EBITDA and Adjusted EBITDA calculations may vary among entities, so our computation may not be comparable to measures used by other companies.
See our reconciliation of net income to EBITDA and Adjusted EBITDA in “Results of Operations” below.


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Results of Operations


The following tables summarize our results of operations for the three and nine months ended September 30, 2017 and 2016 (in millions):
Crestwood EquityCrestwood Midstream
Three Months EndedNine Months EndedThree Months EndedNine Months Ended
September 30,September 30,September 30,September 30,
20232022202320222023202220232022
Revenues$1,139.4 $1,566.0 $3,423.7 $4,597.8 $1,139.4 $1,566.0 $3,423.7 $4,597.8 
Costs of product/services sold901.6 1,286.8 2,683.6 3,864.4 901.6 1,286.8 2,683.6 3,864.4 
Operations and maintenance expense56.9 55.0 166.7 144.0 56.9 55.0 166.7 144.0 
General and administrative expense30.2 33.9 86.8 103.8 20.8 32.3 74.6 99.0 
Depreciation, amortization and accretion80.2 86.9 242.7 242.3 80.1 86.8 242.5 248.0 
Loss on long-lived assets, net2.6 175.9 4.8 186.9 2.6 247.6 4.8 311.9 
Gain on acquisition— (75.3)— (75.3)— (75.3)— (75.3)
Operating income (loss)67.9 2.8 239.1 131.7 77.4 (67.2)251.5 5.8 
Earnings from unconsolidated affiliates, net1.1 3.2 135.2 12.2 1.1 3.2 135.2 12.2 
Interest and debt expense, net(56.9)(47.6)(167.9)(123.8)(56.9)(47.6)(167.9)(123.8)
Other income, net0.2 — 0.3 0.2 — — — — 
Provision for income taxes(0.2)(1.4)(1.1)(1.7)(0.2)(1.4)(1.0)(1.6)
Net income (loss)12.1 (43.0)205.6 18.6 21.4 (113.0)217.8 (107.4)
Add:
Interest and debt expense, net56.9 47.6 167.9 123.8 56.9 47.6 167.9 123.8 
Provision for income taxes0.2 1.4 1.1 1.7 0.2 1.4 1.0 1.6 
Depreciation, amortization and accretion80.2 86.9 242.7 242.3 80.1 86.8 242.5 248.0 
EBITDA$149.4 $92.9 $617.3 $386.4 $158.6 $22.8 $629.2 $266.0 
Unit-based compensation6.5 9.6 25.7 26.8 6.5 9.6 25.7 26.8 
Loss on long-lived assets, net2.6 175.9 4.8 186.9 2.6 247.6 4.8 311.9 
Gain on acquisition— (75.3)— (75.3)— (75.3)— (75.3)
Earnings from unconsolidated affiliates, net(1.1)(3.2)(135.2)(12.2)(1.1)(3.2)(135.2)(12.2)
Adjusted EBITDA from unconsolidated affiliates, net2.4 5.7 8.6 24.2 2.4 5.7 8.6 24.2 
Change in fair value of commodity inventory-related derivative contracts27.3 (5.4)26.8 (4.6)27.3 (5.4)26.8 (4.6)
Significant transaction and environmental related costs and other items9.6 9.1 17.2 29.6 1.4 9.1 9.0 29.6 
Adjusted EBITDA$196.7 $209.3 $565.2 $561.8 $197.7 $210.9 $568.9 $566.4 
38
 Crestwood Equity Crestwood Midstream
 Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended
 September 30, September 30, September 30, September 30,
 2017 2016 2017 2016 2017 2016 2017 2016
Revenues$955.6
 $587.6
 $2,634.0
 $1,725.5
 $955.6
 $587.6
 $2,634.0
 $1,725.5
Costs of product/services sold858.5
 466.7
 2,271.6
 1,280.1
 858.5
 466.7
 2,271.6
 1,280.1
Operations and maintenance expense35.5
 33.1
 103.4
 119.9
 35.5
 33.6
 103.4
 116.7
General and administrative expense22.5
 18.3
 71.6
 70.2
 21.4
 17.3
 69.0
 67.5
Depreciation, amortization and accretion48.1
 50.3
 145.2
 177.0
 50.9
 53.2
 153.5
 185.2
Loss on long-lived assets, net(6.3) (2.1) (6.3) (34.8) (6.3) (2.1) (6.3) (34.8)
Goodwill impairment—
 —
 —
 (109.7) —
 —
 —
 (109.7)
Operating income (loss)(15.3) 17.1
 35.9
 (66.2) (17.0) 14.7
 30.2
 (68.5)
Earnings from unconsolidated
     affiliates, net
11.5
 13.4
 29.2
 26.1
 11.5
 13.4
 29.2
 26.1
Interest and debt expense, net(24.2) (27.5) (74.8) (97.9) (24.2) (27.5) (74.8) (97.9)
Gain (loss) on modification/extinguishment of debt—
 —
 (37.7) 10.0
 —
 —
 (37.7) 10.0
Other income, net0.2
 0.2
 0.4
 0.4
 —
 —
 —
 —
Provision for income taxes(0.1) (0.2) —
 (0.2) (0.1) —
 —
 —
Net income (loss)(27.9) 3.0
 (47.0) (127.8) (29.8) 0.6
 (53.1) (130.3)
Add:               
Interest and debt expense, net24.2
 27.5
 74.8
 97.9
 24.2
 27.5
 74.8
 97.9
(Gain) loss on modification/extinguishment of debt—
 —
 37.7
 (10.0) —
 —
 37.7
 (10.0)
Provision for income taxes0.1
 0.2
 —
 0.2
 0.1
 —
 —
 —
Depreciation, amortization and accretion48.1
 50.3
 145.2
 177.0
 50.9
 53.2
 153.5
 185.2
EBITDA44.5
 81.0
 210.7
 137.3
 45.4
 81.3
 212.9
 142.8
Unit-based compensation charges6.2
 4.1
 18.9
 13.4
 6.2
 4.1
 18.9
 13.4
Loss on long-lived assets, net6.3
 2.1
 6.3
 34.8
 6.3
 2.1
 6.3
 34.8
Goodwill impairment—
 —
 —
 109.7
 —
 —
 —
 109.7
Earnings from unconsolidated
affiliates, net
(11.5) (13.4) (29.2) (26.1) (11.5) (13.4) (29.2) (26.1)
Adjusted EBITDA from unconsolidated affiliates, net21.5
 21.7
 54.9
 41.4
 21.5
 21.7
 54.9
 41.4
Change in fair value of commodity inventory-related derivative contracts27.4
 7.5
 12.5
 8.3
 27.4
 7.5
 12.5
 8.3
Significant transaction and environmental related costs and other items1.9
 0.5
 10.4
 11.2
 1.9
 0.5
 10.4
 11.2
Adjusted EBITDA$96.3
 $103.5
 $284.5
 $330.0
 $97.2
 $103.8
 $286.7
 $335.5

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Crestwood EquityCrestwood Midstream
Three Months EndedNine Months EndedThree Months EndedNine Months Ended
September 30,September 30,September 30,September 30,
20232022202320222023202220232022
Net cash provided by operating activities$111.4 $25.3 $378.5 $277.3 $120.9 $26.9 $391.5 $282.1 
Net changes in operating assets and liabilities(9.1)129.9 (30.5)123.9 (9.2)129.8 (31.2)123.9 
Amortization of debt-related deferred costs and fair value adjustment(0.9)(0.5)(2.5)(1.7)(0.9)(0.5)(2.5)(1.7)
Interest and debt expense, net56.9 47.6 167.9 123.8 56.9 47.6 167.9 123.8 
Unit-based compensation(6.5)(9.6)(25.7)(26.8)(6.5)(9.6)(25.7)(26.8)
Loss on long-lived assets, net(2.6)(175.9)(4.8)(186.9)(2.6)(247.6)(4.8)(311.9)
Gain on acquisition— 75.3 — 75.3 — 75.3 — 75.3 
Earnings from unconsolidated affiliates, net, adjusted for cash distributions received0.1 0.7 133.3 0.9 0.1 0.7 133.3 0.9 
Deferred income taxes0.1 (1.2)0.1 (1.1)(0.1)(1.1)(0.2)(1.2)
Provision for income taxes0.2 1.4 1.1 1.7 0.2 1.4 1.0 1.6 
Other non-cash expense(0.2)(0.1)(0.1)— (0.2)(0.1)(0.1)— 
EBITDA$149.4 $92.9 $617.3 $386.4 $158.6 $22.8 $629.2 $266.0 
Unit-based compensation6.5 9.6 25.7 26.8 6.5 9.6 25.7 26.8 
Loss on long-lived assets, net2.6 175.9 4.8 186.9 2.6 247.6 4.8 311.9 
Gain on acquisition— (75.3)— (75.3)— (75.3)— (75.3)
Earnings from unconsolidated affiliates, net(1.1)(3.2)(135.2)(12.2)(1.1)(3.2)(135.2)(12.2)
Adjusted EBITDA from unconsolidated affiliates, net2.4 5.7 8.6 24.2 2.4 5.7 8.6 24.2 
Change in fair value of commodity inventory-related derivative contracts27.3 (5.4)26.8 (4.6)27.3 (5.4)26.8 (4.6)
Significant transaction and environmental related costs and other items9.6 9.1 17.2 29.6 1.4 9.1 9.0 29.6 
Adjusted EBITDA$196.7 $209.3 $565.2 $561.8 $197.7 $210.9 $568.9 $566.4 
 Crestwood Equity Crestwood Midstream
 Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended
 September 30, September 30, September 30, September 30,
 2017 2016 2017 2016 2017 2016 2017 2016
Net cash provided by operating activities$95.3
 $51.5
 $228.2
 $244.5
 $96.8
 $54.8
 $232.9
 $250.8
Net changes in operating assets and liabilities(63.6) 6.5
 (65.2) (46.8) (64.1) 4.0
 (66.9) (46.3)
Amortization of debt-related deferred costs(1.9) (1.7) (5.4) (5.1) (1.9) (1.7) (5.4) (5.1)
Interest and debt expense, net24.2
 27.5
 74.8
 97.9
 24.2
 27.5
 74.8
 97.9
Unit-based compensation charges(6.2) (4.1) (18.9) (13.4) (6.2) (4.1) (18.9) (13.4)
Loss on long-lived assets, net(6.3) (2.1) (6.3) (34.8) (6.3) (2.1) (6.3) (34.8)
Goodwill impairment—
 —
 —
 (109.7) —
 —
 —
 (109.7)
Earnings from unconsolidated affiliates, net, adjusted for cash distributions received3.0
 3.1
 2.5
 3.9
 3.0
 3.1
 2.5
 3.9
Deferred income taxes—
 0.3
 0.7
 0.9
 (0.1) —
 (0.1) (0.2)
Provision for income taxes0.1
 0.2
 —
 0.2
 0.1
 —
 —
 —
Other non-cash (income) expense(0.1) (0.2) 0.3
 (0.3) (0.1) (0.2) 0.3
 (0.3)
EBITDA44.5
 81.0
 210.7
 137.3
 45.4
 81.3
 212.9
 142.8
Unit-based compensation charges6.2
 4.1
 18.9
 13.4
 6.2
 4.1
 18.9
 13.4
Loss on long-lived assets, net6.3
 2.1
 6.3
 34.8
 6.3
 2.1
 6.3
 34.8
Goodwill impairment—
 —
 —
 109.7
 —
 —
 —
 109.7
Earnings from unconsolidated
affiliates, net
(11.5) (13.4) (29.2) (26.1) (11.5) (13.4) (29.2) (26.1)
Adjusted EBITDA from unconsolidated affiliates, net21.5
 21.7
 54.9
 41.4
 21.5
 21.7
 54.9
 41.4
Change in fair value of commodity inventory-related derivative contracts27.4
 7.5
 12.5
 8.3
 27.4
 7.5
 12.5
 8.3
Significant transaction and environmental related costs and other items1.9
 0.5
 10.4
 11.2
 1.9
 0.5
 10.4
 11.2
Adjusted EBITDA$96.3
 $103.5
 $284.5
 $330.0
 $97.2
 $103.8
 $286.7
 $335.5

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Segment Results


The following tables summarize the EBITDAand discussion are a summary of our segments (in millions):

Crestwood Equity
 Three Months Ended Three Months Ended
 September 30, 2017 September 30, 2016
 Gathering and Processing Storage and Transportation Marketing, Supply and Logistics Gathering and Processing Storage and Transportation Marketing, Supply and Logistics
Revenues$434.4
 $6.2
 $515.0
 $279.3
 $18.3
 $290.0
Intersegment revenues29.9
 1.2
 (31.1) 24.8
 1.5
 (26.3)
Costs of product/services sold378.6
 0.2
 479.7
 226.1
 0.1
 240.5
Operations and maintenance expenses16.2
 1.0
 18.3
 17.4
 2.5
 13.2
Gain (loss) on long-lived assets(3.9) —
 0.6
 (2.0) (0.1) —
Earnings from unconsolidated affiliates, net4.3
 7.2
 —
 5.5
 7.9
 —
EBITDA$69.9
 $13.4
 $(13.5) $64.1
 $25.0
 $10.0
 Nine Months Ended Nine Months Ended
 September 30, 2017 September 30, 2016
 Gathering and Processing Storage and Transportation Marketing, Supply and Logistics Gathering and Processing Storage and Transportation Marketing, Supply and Logistics
Revenues$1,208.1
 $24.7
 $1,401.2
 $787.7
 $131.5
 $806.3
Intersegment revenues94.3
 4.7
 (99.0) 75.9
 3.0
 (78.9)
Costs of product/services sold1,049.9
 0.3
 1,221.4
 632.2
 4.9
 643.0
Operations and maintenance expenses51.8
 3.4
 48.2
 56.1
 18.2
 45.6
Goodwill impairment—
 —
 —
 (8.6) (13.7) (87.4)
Gain (loss) on long-lived assets(3.9) —
 0.6
 (2.0) (32.8) —
Earnings from unconsolidated affiliates, net7.7
 21.5
 —
 16.5
 9.6
 —
EBITDA$204.5
 $47.2
 $33.2
 $181.2
 $74.5
 $(48.6)

Crestwood Midstream
 Three Months Ended Three Months Ended
 September 30, 2017 September 30, 2016
 Gathering and Processing Storage and Transportation Marketing, Supply and Logistics Gathering and Processing Storage and Transportation Marketing, Supply and Logistics
Revenues$434.4
 $6.2
 $515.0
 $279.3
 $18.3
 $290.0
Intersegment revenues29.9
 1.2
 (31.1) 24.8
 1.5
 (26.3)
Costs of product/services sold378.6
 0.2
 479.7
 226.1
 0.1
 240.5
Operations and maintenance expenses16.2
 1.0
 18.3
 17.4
 3.0
 13.2
Gain (loss) on long-lived assets(3.9) —
 0.6
 (2.0) (0.1) —
Earnings from unconsolidated affiliates, net4.3
 7.2
 —
 5.5
 7.9
 —
EBITDA$69.9
 $13.4
 $(13.5) $64.1
 $24.5
 $10.0

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 Nine Months Ended Nine Months Ended
 September 30, 2017 September 30, 2016
 Gathering and Processing Storage and Transportation Marketing, Supply and Logistics Gathering and Processing Storage and Transportation Marketing, Supply and Logistics
Revenues$1,208.1
 $24.7
 $1,401.2
 $787.7
 $131.5
 $806.3
Intersegment revenues94.3
 4.7
 (99.0) 75.9
 3.0
 (78.9)
Costs of product/services sold1,049.9
 0.3
 1,221.4
 632.2
 4.9
 643.0
Operations and maintenance expenses51.8
 3.4
 48.2
 56.1
 15.0
 45.6
Goodwill impairment—
 —
 —
 (8.6) (13.7) (87.4)
Gain (loss) on long-lived assets(3.9) —
 0.6
 (2.0) (32.8) —
Earnings from unconsolidated affiliates, net7.7
 21.5
 —
 16.5
 9.6
 —
EBITDA$204.5
 $47.2
 $33.2
 $181.2
 $77.7
 $(48.6)

Below is a discussion of the factors that impacted EBITDA by segment for the three and nine months ended September 30, 20172023 compared to the same periods in 2016.2022 (in millions):


Gathering
Three Months EndedThree Months Ended
September 30, 2023September 30, 2022
Gathering and Processing NorthGathering and Processing SouthStorage and LogisticsGathering and Processing NorthGathering and Processing SouthStorage and Logistics
Revenues$262.8 $123.0 $753.6 $272.6 $177.4 $1,116.0 
Intersegment revenues70.9 52.5 (123.4)142.2 137.8 (280.0)
Costs of product/services sold158.4 121.1 622.1 230.2 249.6 807.0 
Operations and maintenance expenses29.9 14.9 12.1 27.4 14.3 13.3 
Loss on long-lived assets, net— — (2.6)— (247.6)— 
Gain on acquisition— — — — 75.3 — 
Earnings from unconsolidated affiliates, net— 1.1 — — 2.0 1.2 
Crestwood Midstream EBITDA$145.4 $40.6 $(6.6)$157.2 $(119.0)$16.9 
Gain on long-lived assets— — — — 71.7 — 
Crestwood Equity EBITDA$145.4 $40.6 $(6.6)$157.2 $(47.3)$16.9 

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Nine Months EndedNine Months Ended
September 30, 2023September 30, 2022
Gathering and Processing NorthGathering and Processing SouthStorage and LogisticsGathering and Processing NorthGathering and Processing SouthStorage and Logistics
Revenues$717.1 $373.3 $2,333.3 $787.2 $243.4 $3,567.2 
Intersegment revenues231.0 119.2 (350.2)421.2 137.8 (559.0)
Costs of product/services sold447.7 329.8 1,906.1 686.6 249.6 2,928.2 
Operations and maintenance expenses85.6 45.2 35.9 78.6 28.6 36.8 
Gain (loss) on long-lived assets, net0.1 (2.7)(2.6)— (307.8)(4.1)
Gain on acquisition— — — — 75.3 — 
Earnings from unconsolidated affiliates, net— 2.0 133.2 — 9.4 2.8 
Crestwood Midstream EBITDA$414.9 $116.8 $171.7 $443.2 $(120.1)$41.9 
Gain on long-lived assets(1)
— — — — 125.0 — 
Crestwood Equity EBITDA$414.9 $116.8 $171.7 $443.2 $4.9 $41.9 

(1)Represents the elimination of the loss on long-lived assets of approximately $53 million recorded by CMLP and Processing

EBITDA for our gathering and processing segment increasedthe gain on long-lived assets of approximately $72 million recorded by approximately $5.8 million and $23.3 million for the three and nine months ended September 30, 2017 comparedCEQP related to the same periodssale of our legacy assets in 2016.

During the three and nine months ended September 30, 2017, our gathering and processing segment's revenues increased by approximately $160.2 million and $438.8 million compared to the same periods in 2016, partially offset by an increase in costs of product/services sold of approximately $152.5 million and $417.7 million. These increases were primarily driven by our Arrow operations, which experienced a $176.1 million and $442.3 million increase in revenues and a $166.1 million and $419.7 million increase in costs of product/services sold during the three and nine months ended September 30, 2017 compared to the same periods in 2016. The increase in Arrow's revenues and costs was primarily driven by higher average prices on Arrow's agreements under which it purchases and sells crude oil. In addition, our crude, gas and water volumes increased by 31%, 12% and 29%, respectively, during the nine months ended September 30, 2017 compared to the same period in 2016, due to the connection of 78 wells on our Arrow system during the nine months ended September 30, 2017 compared to 31 wells during the same period in 2016, and higher initial production rates experienced on those connected wells in 2017 compared to 2016.

Partially offsetting the increase in our gathering and processing segment's revenues and costs from our Arrow operations during the three months ended September 30, 2017 compared to the same period in 2016, were lower revenues and costs of approximately $16.1 million and $11.4 million, respectively, from our Permian operations as a result of the deconsolidation of Crestwood New Mexico in June 2017 due to the contribution of these assets to Crestwood Permian.Barnett Shale. For a further discussion of this transaction, see Item 1. Financial Statements, Note 4.3.


OurGathering and Processing North

EBITDA for our gathering and processing segment's operations and maintenance expensesnorth segment decreased by approximately $1.2$11.8 million and $4.3$28.3 million during the three and nine months ended September 30, 20172023 compared to the same periods in 20162022. Our gathering and processing north segment’s revenues decreased by approximately $81.1 million and $260.3 million during the three and nine months ended September 30, 2023 compared to the same periods in 2022, while our costs of product/services sold decreased by approximately $71.8 million and $238.9 million during those same periods. These decreases were primarily driven by declines in commodity prices experienced during 2023 compared to 2022.

During the three and nine months ended September 30, 2023, our Arrow operations experienced lower average commodity prices on natural gas, NGLs and crude oil it purchases and sells pursuant to its agreements, which decreased by more than 50%, 30% and 20%, respectively, compared to the same periods in 2022, and largely contributed to the decrease in our gathering and processing north segment’s revenues and costs of product/services sold period over period. We manage our company-wide oil, natural gas and NGL commodity exposures through price risk management activities conducted by our storage and logistics segment, which is further described under Storage and Logistics below. In addition, Arrow’s natural gas gathering and processing volumes both decreased by approximately 10% during the three and nine months ended September 30, 2023 compared to the same periods in 2022. These decreases were primarily due to continued cost-reduction efforts undertakendowntime experienced by our producer customers related to maintenance and completion activity associated with new well connections and unusual weather conditions experienced at the end of 2022 and into early 2023.

During the three and nine months ended September 30, 2023, our Rough Rider operations also experienced a decrease in its revenues and costs of product/services sold compared to the same periods in 2022, which was partially offset by an increase in its natural gas gathering and processing volumes and its crude oil and water gathering volumes. During the nine months ended September 30, 2023, our Rough Rider operations experienced an increase in its natural gas gathering and processing volumes of approximately 10% and 6% respectively, compared to the same period in 2022 due to the full contribution from these operations during the nine months ended September 30, 2023. Our Rough Rider operations’ crude oil and water gathering volumes increased by approximately 71% and 28%, respectively, compared to the same period in 2022. These increases were due primarily to placing in service a three-product gathering system, increased activity from our producer customers related to new well connections and the full contribution from these operations during the nine months ended September 30, 2023.

Our gathering and processing north segment’s operations and maintenance expenses increased by approximately $2.5 million and $7.0 million during the deconsolidationthree and nine months ended September 30, 2023 compared to the same periods in 2022, primarily due to our Rough Rider operations acquired in conjunction with the merger with Oasis Midstream in February 2022.

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The comparability of our G&P segment's Gathering and Processing South

EBITDA for CMLP’s gathering and processing south segment increased by approximately $159.6 million and $236.9 million during the three and nine months ended September 30, 2023 compared to the same periods in 2022. CMLP’s gathering and processing south segment’s EBITDA during the nine months ended September 30, 2022 was impacted by an $8.6 million goodwill impairment recorded during the first quarterCPJV Acquisition as well as the divestitures of 2016 related to our operations in the Barnett and Marcellus operations.Shales described below. For a further discussion of our goodwill impairments recorded during 2016,these transactions, see Item 1. Financial Statements, Note 2.3.


Our gathering and processing segment'ssouth segment’s revenues and costs of product/services sold decreased by approximately $139.7 million and $128.5 million, respectively, during the three months ended September 30, 2023 compared to the same period in 2022. These decreases were primarily driven by the divestiture of our Marcellus operations in late 2022 and by lower average commodity prices experienced by our gathering and processing south segment on its natural gas gathering agreements compared to the same period in 2022. During the three months ended September 30, 2023, our gathering and processing south segment’s operations and maintenance expenses were relatively flat compared to the same period in 2022.

Our gathering and processing south segment’s revenues, costs of product/services sold and operations and maintenance expenses increased by approximately $111.3 million, $80.2 million and $16.6 million, respectively, during the nine months ended September 30, 2023 compared to the same period in 2022. These increases were primarily driven by the impact of the Sendero Acquisition and the CPJV Acquisition in July 2022, which increased our gathering and processing south segment’s revenues, costs of product/services sold and operations and maintenance expenses by approximately $175.0 million, $77.2 million, and $31.5 million, respectively, during the nine months ended September 30, 2023 compared to the same period in 2022. In addition, during the nine months ended September 30, 2022, CMLP recognized a gain of approximately $75 million related to the CPJV Acquisition.

Partially offsetting the increases described above were the divestitures of our Barnett and Marcellus legacy, non-core operations during 2022, which decreased our gathering and processing south segment’s revenues and operations and maintenance expenses by approximately $68.6 million and $16.4 million, respectively, during the nine months ended September 30, 2023 compared to the same period in 2022. In addition, during the nine months ended September 30, 2022, CMLP recorded a loss on long-lived assets related to the Barnett and Marcellus divestitures of approximately $53 million and $248 million, respectively.

Also impacting CMLP’s gathering and processing south segment’s EBITDA during the nine months ended September 30, 2022 was a loss on long-lived assets of approximately $7.0 million related to the sale of parts inventory related to our legacy Granite Wash operations.

CMLP’s gathering and processing south segment’s EBITDA was also impacted by a decrease in earnings from our unconsolidated affiliates of approximately $1.2 million and $8.8 million during the three and nine months ended September 30, 2017 compared to the same periods in 2016. The decrease was primarily driven by a reduction in revenues at our Jackalope equity investment as a result of the restructuring of its contracts with Chesapeake Energy Corporation (Chesapeake) effective January 1, 2017. Jackalope and Chesapeake replaced the cost-of-service based contract with a fixed-fee gathering and processing contract that includes minimum revenue guarantees for a five to seven year period. Partially offsetting the decrease in equity earnings from our Jackalope equity investment was an increase in equity earnings from our Crestwood Permian equity investment of approximately $2.8 million and $2.2 million during the three and nine months ended September 30, 2017 primarily due to the

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contribution of Crestwood New Mexico to Crestwood Permian in June 2017, and the Nautilus system coming online in June 2017.

Storage and Transportation

EBITDA for CMLP's storage and transportation segment decreased by approximately $11.1 million and $30.5 million for the three and nine months ended September 30, 2017 compared to the same periods in 2016. The comparability of our storage and transportation segment's results was impacted by a $32.9 million loss recognized on the deconsolidation of our Northeast storage and transportation assets as a result of the contribution of these assets to Stagecoach Gas in June 2016. The deconsolidation of the Northeast storage and transportation assets resulted in lower revenues and costs of product/services sold of approximately $74.1 million and $4.6 million, respectively, during the nine months ended September 30, 2017 compared to the same period in 2016. We also experienced lower operations and maintenance expenses of approximately $11.6 million during the nine months ended September 30, 2017 compared to the same period in 2016, primarily as a result of the deconsolidation of the Northeast storage and transportation assets.

Our storage and transportation segment's revenues was also impacted by lower revenues of approximately $11.6 million and $31.0 million from our COLT Hub operations during the three and nine months ended September 30, 2017 compared to the same periods in 2016. The decrease was primarily due to a reduction in our rail throughput revenues resulting from lower rail loading volumes as a result of two rail loading contracts that expired in late 2016 and the in-service of the Dakota Access Pipeline system.

The comparability of our storage and transportation segment's EBITDA was also impacted by a $13.7 million goodwill impairment recorded during the first quarter of 2016 related to our COLT Hub operations. For a further discussion of our goodwill impairments recorded during 2016, see Item 1. Financial Statements, Note 2.

Our storage and transportation segment's EBITDA was impacted by an increase in earnings from our unconsolidated affiliates. As discussed above, in June 2016, we deconsolidated our Northeast storage and transportation assets as a result of the Stagecoach Gas transaction and began accounting for our 50% equity interest in Stagecoach Gas under the equity method of accounting. We recognized equity earnings from Stagecoach Gas of approximately $19.0 million during the nine months ended September 30, 2017. Earnings from our Tres Holdings equity investment increased by approximately $2.2 million during the nine months ended September 30, 2017 compared to the same period in 2016, primarily due to property tax accruals recorded by Tres Holdings during 2016.

EBITDA for CEQP's storage and transportation segment decreased by approximately $11.6 million and $27.3 million during the three and nine months ended September 30, 2017 compared to the same periods in 2016. The change in CEQP's storage and transportation segment's EBITDA period over period was due to all the factors as discussed above for CMLP. In addition, in June 2016, the Matagorda County court issued a final judgment related to Tres Palacios' 2012 and 2013 property tax years which resulted in CEQP recording additional net property taxes (including interest and penalties) of approximately $2.9 million during the nine months ended September 30, 2016.

Marketing, Supply and Logistics

EBITDA for our marketing, supply and logistics segment decreased by approximately $23.5 million for the three months ended September 30, 2017 compared to the same period in 2016, while we experienced an increase in EBITDA of approximately $81.8 million during the nine months ended September 30, 2017 compared to the same period in 2016. The comparability of our marketing, supply and logistics segment's results was impacted by goodwill impairments of approximately $87.4 million recorded during 2016. For a further discussion of our goodwill impairments recorded during the first quarter of 2016, see Item 1. Financial Statements, Note 2.

Our supply and logistics operations experienced an increase in revenues of approximately $105.3$0.9 million and $302.8$7.4 million during the three and nine months ended September 30, 20172023 compared to the same periods in 2016, and an increase in costs of product/services sold of approximately $117.8 million and $297.3 million during those same periods. During 2016, we experienced unseasonably warm weather which resulted in lower demand for NGLs compared to 2017. The costs of product/services sold increases include a loss of $24.1 million and $22.6 million on our commodity-based derivative contracts during the three and nine months ended September 30, 2017 and a $2.1 million and $4.1 million gain on commodity-based derivative contracts during the three and nine months ended September 30, 2016. The loss on our commodity-based derivative contracts during the three and nine months ended September 30, 2017 resulted from higher average NGL prices during the third quarter of 2017 compared2022, primarily due to the prior periods, which resulted in an increase in our liabilities from price risk management activities associated with contracts that provide fixed prices on future salesconsolidation of our NGL inventory.Crestwood Permian equity investment as a result of acquiring the remaining 50% equity interest in Crestwood Permian in July 2022.


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During the threeEBITDA for CEQP’s gathering and nine months ended September 30, 2017, our storage and terminals operations (including our West Coast operations) experienced a $39.0 million and $104.1 million increase in revenues compared to the same periods in 2016 and a $45.1 million and $109.4 million increase in costs of product/services sold during those same periods. These increases were primarily driven by increases in NGL prices during the three months ended September 30, 2017, and the increase in our costs of product/services sold more than offset the increase in our revenues due to decreasing demand from our refinery customers primarily on the West Coast.

Revenues from our crude marketing operationsprocessing south segment increased by approximately $76.5$87.9 million and $172.4$111.9 million during the three and nine months ended September 30, 20172023 compared to the same periods in 2016. In addition, we experienced an increase2022. The change in our costs of product/services sold of approximately $76.0 millionCEQP’s gathering and $172.0 million. These increases were driven by higher crude marketing volumesprocessing south segment’s EBITDA period over period was due to increased marketing activity surrounding our crude-related operations.

Our NGL and crude trucking operations continued to experiencethe factors discussed above for CMLP. However, CEQP did not record a decline in demand for their services due to lower supply volumes, increased competition, excess trucking capacity in the marketplace and lower commodity pricesloss on long-lived assets during the three and nine months ended September 30, 2017 compared2022 related to the same periods in 2016, resulting in a $2.8 million and $12.3 million decrease in revenues and a $1.1 million and $5.0 million decrease in costsdivestiture of product/services sold period over period.

Our marketing, supply and logistics segment'sour Barnett operations and maintenance expenses increased duringdue to historical impairments previously recorded by CEQP on Barnett’s long-lived assets. During the three and nine months ended September 30, 2017 compared to2022, CEQP recorded a gain on the same periods in 2016 primarily due to a $3.1Barnett divestiture of approximately $72 million.

Storage and Logistics

EBITDA for our storage and logistics segment decreased by approximately $23.5 million property tax refund received during the third quarter of 2016 related to our West Coast operations.

Other EBITDA Results

General and Administrative Expenses. During the three and nine months ended September 30, 2017, our general and administrative expenses increased compared to the same periods in 2016, primarily due to an increase in unit-based compensation charges based on higher average awards outstanding in 2017 compared to 2016 and the impact of performance units granted during 2017 under the Crestwood Equity LTIP. For a further discussion of Crestwood Equity's Long Term Incentive Plan, see Item 1. Financial Statements, Note 2. In addition, we incurred additional costs during the third quarter of 2017 as a result of the relocation of Crestwood's Houston corporate headquarters.

Items not affecting EBITDA include the following:

Depreciation, Amortization and Accretion Expense. Depreciation, amortization and accretion expense decreased during the nine months September 30, 20172023 compared to the same period in 2016, primarily due2022, while our storage and logistics segment’s EBITDA increased by approximately $129.8 million during the nine months ended September 30, 2023 compared to the deconsolidationsame period in 2022. Our storage and logistics segment’s EBITDA for the nine months ended September 30, 2023 was impacted by a $132 million increase to the equity earnings from our Tres Holdings equity method investment as a result of recording a gain on the sale of the Northeastequity method investment as further discussed below.

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Our storage and transportation assets in June 2016 and Crestwood New Mexico operations in June 2017.

Interest and Debt Expense, Net. Interest and debt expense, netlogistics segment’s revenues decreased by approximately $3.3$205.8 million and $23.1$1,025.1 million during the three and nine months ended September 30, 20172023 compared to the same periods in 2016,2022, and our costs of product/services sold decreased by $184.9 million and $1,022.1 million during those same periods.

Our NGL marketing and logistics operations experienced a decrease in revenues of approximately $160.4 million and $681.3 million during the three and nine months ended September 30, 2023 compared to the same periods in 2022, and a decrease in costs of product/services sold of approximately $137.1 million and $683.1 million during those same periods. These decreases were primarily driven by lower NGL prices during 2023 compared to 2022. Included in our costs of product/services sold was a loss of $18.0 million and a gain of $13.5 million during the three and nine months ended September 30, 2023, and a gain of $45.0 million and a loss of $6.3 million during the three and nine months ended September 30, 2022 related to our price risk management activities, which were also driven by the volatility in commodity prices described above.

Our crude oil and natural gas marketing operations experienced a decrease in its revenues of approximately $45.4 million and $343.7 million during the three and nine months ended September 30, 2023, compared to the same periods in 2022, and a decrease in product costs of approximately $47.8 million and $339.1 million during those same periods. These decreases were primarily driven by lower crude oil purchases and sales as a result of decreases in commodity prices during 2023 compared to 2022.

During the three months ended September 30, 2023, our storage and logistics segment’s EBITDA was impacted by a loss on long-lived assets of approximately $2.6 million primarily related to the sale of our transportation assets in August 2023. Also impacting our storage and logistics segment’s EBITDA during the nine months ended September 30, 2022 was a loss on long-lived assets of approximately $4.1 million primarily due to the repaymentsbuyout of leases related to our exiting the crude oil railcar leasing business.

Our storage and logistics segment’s EBITDA was also impacted by a net increase in earnings from unconsolidated affiliates of approximately $130.4 million during the nine months ended September 30, 2023 compared to the same period in 2022. On April 3, 2023, we and Brookfield sold our respective interests in Tres Holdings to a subsidiary of Enbridge, Inc. We recorded a gain on the sale of approximately $132 million, which we reflected as an increase to the equity earnings from our Tres Holding equity method investment. For a further discussion of the sale of our Tres Holding equity investment, see Item 1. Financial Statements, Note 5.

Other EBITDA Results

General and Administrative Expenses. During the three and nine months ended September 30, 2023, our general and administrative expenses decreased compared to the same periods in 2022, primarily due to transactions costs incurred in connection with our strategic transactions executed during 2022.

Items not affecting EBITDA include the following:

Depreciation, Amortization and Accretion Expense. During the three months ended September 30, 2023, CMLP’s and CEQP’s depreciation, amortization and accretion expense decreased by approximately $6.7 million compared to the same period in 2022, primarily due to the divestiture of our Marcellus operations in late 2022, partially offset by our acquisitions of Sendero and Crestwood Midstream's 2020Permian in July 2022. During the nine months ended September 30, 2023, CMLP’s depreciation, amortization and accretion expense decreased by approximately $5.5 million, primarily due to the divestitures of our legacy Barnett and Marcellus operations in 2022, partially offset by our acquisitions during 2022. During the nine months ended September 30, 2023, CEQP’s depreciation, amortization and accretion expense was relatively flat. For a further discussion of our acquisitions and divestitures during 2022, see Item 1. Financial Statements, Note 3.

Interest and Debt Expense, Net. During the three and nine months ended September 30, 2023, our interest and debt expense, net increased by approximately $9.3 million and $44.1 million compared to the same periods in 2022, primarily due to the 2031 Senior Notes issued in January 2023 and 2022 Senior Notes.higher interest rates on borrowings under the CMLP Credit Facility during 2023 compared to 2022.

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The following table provides a summary of our interest and debt expense, net (in millions):
Three Months EndedNine Months Ended
September 30,September 30,
2023202220232022
Credit facilities$10.2 $12.8 $30.6 $21.5 
Senior notes46.1 35.2 136.4 102.4 
Other, net0.8 0.5 2.9 1.8 
Gross interest and debt expense57.1 48.5 169.9 125.7 
Less: capitalized interest0.2 0.9 2.0 1.9 
Interest and debt expense, net$56.9 $47.6 $167.9 $123.8 
 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Credit facility$5.5
 $2.9
 $13.3
 $16.0
Senior notes18.2
 22.8
 58.3
 77.1
Other debt-related costs1.7
 1.9
 5.4
 5.4
Gross interest and debt expense25.4
 27.6
 77.0
 98.5
Less: capitalized interest1.2
 0.1
 2.2
 0.6
Interest and debt expense, net$24.2
 $27.5
 $74.8
 $97.9



Loss on Modification/Extinguishment of Debt. During the nine months ended September 30, 2017, we recognized a loss on extinguishment of debt of approximately $37.7 million in conjunction with the tender of the remaining principal amounts of Crestwood Midstream's 2020 Senior Notes and 2022 Senior Notes. During the nine months ended September 30, 2016, we

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recognized a gain of $10 million on the early tender of principal amounts under Crestwood Midstream's 2020 Senior Notes and 2022 Senior Notes. For a further discussion of these repayments, see Item 1. Financial Statements, Note 7.

Liquidity and Sources of Capital


Crestwood Equity is a holding company that derives all of its operating cash flow from its operating subsidiaries. Our principal sources of liquidity include cash generated by operating activities from our subsidiaries, distributions from our joint ventures, borrowings under the CMLP credit facility, and sales of equity and debt securities. Our operating subsidiariesequity investments use cash from their respective operations and contributions from us to fund their operating activities and maintenance and growth capital expenditures, and service their outstanding indebtedness. We believe our liquidity sources and operating cash flows are sufficient to address our future operating, debt service and capital requirements.expenditures.

We pay quarterly cash distributions of approximately $15 million to our preferred unitholders. In November 2017, we will paycommon unitholders within approximately 45 days after the end of each fiscal quarter in an aggregate amount equal to our available cash for such quarter. On October 12, 2023, the board of directors of our general partner declared a quarterly cash distribution relatedof $0.655 per unit to our common unitholders with respect to the quarter ended September 30, 2017 to our preferred unitholders2023. In addition, the board of directors declared a special cash distribution of $0.003 per limited partner unit in cash in lieu of issuing additional preferred units, and beginningconjunction with the quarter ending December 31, 2017, we will be required to make all futureEnergy Transfer Merger. We also pay quarterly cash distributions to our preferred unitholders, and on October 12, 2023, the board of directors of our general partner declared a cash distribution of approximately $15 million with respect to the quarter ended September 30, 2023. In addition, the board of directors declared a special cash distribution of $0.0003 per preferred unit in cash. We believe our operating cash flows will well exceed our quarterly distributions atconjunction with the current level andEnergy Transfer Merger. The cash distributions related to our common and preferred unitholders.unitholders were paid on October 31, 2023 to common and preferred unitholders of record on October 23, 2023.


As described in Segment Highlights - Marketing, Supply and Logistics above,We pay quarterly cash distributions of approximately $10 million to Crestwood Niobrara’s non-controlling partner. In conjunction with the merger agreement we have entered into an agreement to sell our US Salt operations for approximately $225 million. We intend to usewith Energy Transfer in August 2023, the proceeds fromCrestwood Niobrara preferred units became currently redeemable and as a result, we reflected the divestiture to reduce borrowings under the CMLP credit facility and reinvest in on-going organic growth projectsCrestwood Niobrara preferred units at their Change of Control Redemption Price (as defined in the Bakken and Delaware Basin discussed above in our Gathering and Processing Segment Highlights, andagreement ), which is equal to 105% of the liquidation value. During the three months ended September 30, 2023, we expectrecorded an increase of approximately $22 million to net income attributable to non-controlling partner to reflect the proceeds from this divestiture will eliminate the need to access the equity capital markets to fund our current 2017 and 2018 capital programs.Crestwood Niobrara preferred units at their maximum liquidation value.


As of September 30, 2017, Crestwood Midstream2023, we had $548.7$872.0 million of available capacity under itsthe Crestwood Midstream credit facility, considering the most restrictive debt covenants in itsthe credit agreement. AtAs of September 30, 2017, Crestwood Midstream was2023, we were in compliance with all of itsour debt covenants applicable to itsour credit facility and senior notes. See Item 1. Financial Statements, Note 8 for a description of the covenants related to our credit facility.


In January 2023, Crestwood Midstream issued $600 million of 7.375% unsecured senior notes due 2031 (the 2031 Senior Notes). We mayused the net proceeds from timethe issuance of the 2031 Senior Notes to time seekrepay borrowings under the Crestwood Midstream credit facility and to retire or purchaserepay all outstanding borrowings under the Crestwood Permian credit facility, which was terminated in January 2023. In April 2023, we sold our 50% equity interest in Tres Holdings for approximately $178 million, including working capital adjustments, and we used the proceeds from the sale to repay amounts outstanding debt through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions, tender offers or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.under the Crestwood Midstream credit facility.


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Cash Flows


The following table provides a summary of Crestwood Equity'sEquity’s cash flows by category (in millions):
Nine Months Ended
September 30,
20232022
Net cash provided by operating activities$378.5 $277.3 
Net cash provided by (used in) investing activities$21.4 $(517.2)
Net cash provided by (used in) financing activities$(383.6)$233.0 
 Nine Months Ended
 September 30,
 2017 2016
Net cash provided by operating activities$228.2
 $244.5
Net cash provided by (used in) investing activities(144.3) 866.8
Net cash used in financing activities(84.1) (1,110.8)


Operating Activities


Our operating cash flows decreasedfrom operating activities increased by approximately $16.3$101.2 million during the nine months ended September 30, 20172023 compared to the same period in 2016,2022. The net increase was primarily due to an increase in costs of product/services sold of approximately $964.8 million primarily fromdriven by our gathering and processing and marketing, supply and logistics segments' operations discussed above,acquired in the Delaware Basin during 2022, partially offset by a $908.5 million increasereduction in operating revenuescash flows from these segments' operations.our Barnett and Marcellus operations which were divested during 2022. In addition, we experienced lower operationsour general and maintenanceadministrative expenses of approximately $16.5 milliondecreased during the nine months ended September 30, 2023 compared to the same period in 2022, primarily due to the deconsolidation oftransaction costs incurred in connection with our Northeast storage and transportation assets in June 2016. The decrease in our net operating cash flows described above was partially offset by a $18.4 million net cash inflow from working capital primarily resulting from lesser working capital requirements from our NGL and crude trucking operations.strategic transactions executed during 2022.


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Investing Activities


Capital Expenditures. The energy midstream business is capital intensive, requiring significant investments for the acquisition or development of new facilities. We categorize our capital expenditures as either:


•growth capital expenditures, which are made to construct additional assets, expand and upgrade existing systems, or acquire additional assets; or


•maintenance capital expenditures, which are made to replace partially or fully depreciated assets, to maintain the existing operating capacity of our assets, extend their useful lives or comply with regulatory requirements.


We anticipate that ourOur growth and reimbursable capital expenditures forduring the remainder of 2017 willyear increase the services we can provide to our customers and the operating efficiencies of our systems and generate meaningful contributions to our results of operations beginning in 2018. We expect to finance our growth and maintenance capital expenditures with a combination of cash generated by our operating subsidiaries, distributions received from our joint ventures and borrowings under the CMLP credit facility.

We have identified additional growth capital project opportunities for each of our reporting segments.systems. Additional commitments or expenditures will beare made at ourthe discretion of management, and any discontinuation of the construction of these projects will likelycould result in less future operating cash flows and earnings.

The following table summarizes our capital expenditures for the nine months ended September 30, 20172023 (in millions).:


Growth capital(1)
$130.9 
Maintenance capital21.9 
Other(2)
11.2 
Purchases of property, plant and equipment$164.0 
Growth capital$97.5
Maintenance capital16.1
Other (1)
20.8
Purchases of property, plant and equipment134.4
Reimbursements of property, plant and equipment(18.8)
Net$115.6


(1)Includes payments of approximately $21 million related to litigation on the construction of the Bear Den II cryogenic processing plant.
(1) (2)Represents gross purchases of property, plant and equipment that are reimbursable by third parties.


Acquisitions and Divestitures.

•Oasis Merger. In February 2022, we acquired Oasis Midstream, which included cash consideration of $160 million, net of cash acquired of approximately $14.9 million.
•Sendero Acquisition. In July 2022, we acquired Sendero for cash consideration of $631.2 million, net of cash acquired of approximately $28.5 million.
•CPJV Acquisition. In July 2022, we acquired First Reserve’s 50% equity interest in Crestwood Permian, which included cash consideration of approximately $5.9 million, net of cash acquired of approximately $149.4 million.
•Tres Holdings Divestiture. In April 2023, we sold our 50% equity interest in Tres Holdings for approximately $178.4 million.
•Transportation Assets Sale. In August 2023, we sold our transportation assets for approximately $8.0 million.
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•Crude Oil Railcars Sale. In April 2022, we sold our crude oil railcars for approximately $24.7 million primarily as a result of the exit of our crude railcar operations.
•Barnett Divestiture. In July 2022, we sold our assets in the Barnett Shale for approximately $290 million, including working capital adjustments.

Investments in Unconsolidated Affiliates. Pursuant to our joint venture agreements with our respective equity investments, we periodically make contributions to our equity investments to fund their expansion projects and for other operating purposes. During the nine months ended September 30, 2023 and 2022, we contributed approximately $7.2 million and $90.2 million to our equity investments.

Financing Activities


Significant items impactingThe following equity and debt transactions impacted our financing activities during the nine months endedSeptember 30, 2017 and 2016, included the following:

Equity Transactions

Beginning in 2016, we declared a decrease in distributions paid per limited partner unit from $1.375 to $0.60. This
reduction resulted in a decrease in distributions paid to partners of approximately $53.0 million during the nine months ended September 30, 20172023 compared to the same period in 2016;2022:


$10.6 million of net proceeds from the issuances of CEQP common units during•During the nine months ended September 30, 2017; and2023, distributions to our partners increased by approximately $10.0 million compared to the same period in 2022, primarily due to an increase in common units outstanding as a result of the units issued in conjunction with our strategic transactions during 2022 as well as an increase in our distribution per limited partner unit from $0.625 per unit to $0.655 per unit beginning in the second quarter of 2022;

•During the nine months ended September 30, 2022, CEQP acquired 4.6 million CEQP common units from OMS Holdings LLC, a subsidiary of Chord for approximately $123.7 million;
Increase in•During the nine months ended September 30, 2022, payments under our finance leases increased primarily due to an option we exercised to purchase crude oil railcars under certain of our finance leases;
•During the nine months ended September 30, 2023, our taxes paid for unit-based compensation vesting ofincreased by approximately $4.5$4.7 million compared to the same period in 2022, primarily due to higher vesting of unit-based compensation awards during the nine months ended September 30, 2017 compared to the same period in 2016.awards;

Debt Transactions

•During the nine months ended September 30, 2017,2023, we received approximately $592.5 million from the issuance of the 2031 Senior Notes;
•During the nine months ended September 30, 2022, we borrowed amounts under the Crestwood Midstream credit facility to (i) fund cash consideration of approximately $631.2 million to acquire Sendero; (ii) fund approximately $5.9 million of cash consideration to acquire the remaining 50% equity interest in Crestwood Permian; (iii) fund $160.0 million of cash consideration paid in conjunction with the merger with Oasis Midstream; and (iv) to repay approximately $218.4 million outstanding under the credit facility acquired in conjunction with the merger with Oasis Midstream; and
• During the nine months ended September 30, 2023, our other debt-related transactions resulted in net proceedsrepayments under our credit facilities of approximately $49.6$670.8 million compared to net repayments of $918.8approximately $243.7 million during the same period in 2016. This variance2022.

Guarantor Summarized Financial Information

Crestwood Midstream and Crestwood Midstream Finance Corp. are issuers of our debt securities (the Issuers). Crestwood Midstream is primarily duea holding company and owns no operating assets and has no significant operations independent of its subsidiaries. Crestwood Midstream Finance Corp. is Crestwood Midstream’s 100% owned subsidiary and has no material assets or operations other than those related to repaymentsits service as co-issuer of amounts outstandingour senior notes. Obligations under Crestwood Midstream’s senior notes and its credit facility are jointly and severally guaranteed by substantially all of its subsidiaries (collectively, the Guarantor Subsidiaries), except for Crestwood Infrastructure Holdings LLC, Crestwood Niobrara LLC, and Powder River Basin Industrial Complex LLC and their respective subsidiaries (collectively, Non-Guarantor Subsidiaries). The assets and credit of our Credit Facility withNon-Guarantor Subsidiaries are not available to satisfy the proceeds fromdebts of the Issuers or Guarantor Subsidiaries, and the liabilities of our Stagecoach Gas transactionNon-Guarantor Subsidiaries do not constitute obligations of the Issuers or Guarantor Subsidiaries. In January 2023, Crestwood Permian and repaymentscertain of its subsidiaries were designated as Guarantor Subsidiaries of Crestwood Midstream's 2020 Senior NotesMidstream’s senior notes and its credit facility. For additional information regarding the Crestwood Midstream credit facility and senior notes and related guarantees, see our 2022 Senior Notes. For a further discussion of these transactions, see Item 1. Financial Statements, Notes 4 and 7.Annual Report on Form 10-K.


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The following tables provide summarized financial information for the Issuers and Guarantor Subsidiaries (collectively, the Obligor Group) on a combined basis after elimination of significant intercompany balances and transactions between entities in the Obligor Group. The investment balances in the Non-Guarantor Subsidiaries have been excluded from the supplemental summarized combined financial information. Transactions with other related parties, including the Non-Guarantor Subsidiaries, represent affiliate transactions and are presented separately in the summarized combined financial information below.

Summarized Combined Balance Sheet Information (in millions)
September 30, 2023December 31, 2022
Current assets$580.7 $588.4 
Current assets - affiliates$1.3 $1.3 
Property, plant and equipment, net$3,779.2 $3,295.8 
Non-current assets$981.7 $1,012.9 
Current liabilities$445.8 $466.1 
Current liabilities - affiliates$2.8 $41.5 
Long-term debt, less current portion$3,302.5 $3,171.5 
Non-current liabilities$197.0 $147.6 

Summarized Combined Statement of Operations Information (in millions)
Nine Months Ended September 30, 2023
Revenues$3,370.5 
Revenues - affiliates$0.8 
Cost of products/services sold$2,670.5 
Cost of products/services sold - affiliates$13.8 
Operations and maintenance expenses(1)
$152.0 
General and administrative expenses(2)
$74.6 
Operating income$259.4 
Net income$90.3 

(1)    We have operating agreements with certain of our affiliates pursuant to which we charge them operations and maintenance expenses in accordance with their respective agreements, and these charges are reflected as a reduction of operations and maintenance expenses in our consolidated statements of operations. During the nine months ended September 30, 2023, we charged $12.3 million to our affiliates under these agreements.
(2)    Includes $22.4 million of net general and administrative expenses that were charged by our affiliates to us.


Item 3.Quantitative and Qualitative Disclosures About Market Risk

Item 3.Quantitative and Qualitative Disclosures About Market Risk

Our interest rate, risk and commodity price, market and marketcredit risks are discussed in our 20162022 Annual Report on Form 10-K and there10-K. There have been no material changes in those exposures from December 31, 20162022 to September 30, 2017.2023.



Item 4.Controls and Procedures

Item 4.Controls and Procedures

Disclosure Controls and Procedures


As of September 30, 2017,2023, Crestwood Equity and Crestwood Midstream carried out an evaluation under the supervision and with the participation of their respective management, including the Chief Executive Officer and Chief Financial Officer of their General Partners, as to the effectiveness, design and operation of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934, as amended (Exchange Act) Rules 13a-15(e) and 15d-15(e)). Crestwood Equity and Crestwood Midstream maintain controls and procedures designed to provide reasonable assurance that information required to be disclosed in their respective reports that are filed or submitted under the Exchange Act of 1934, as amended, are recorded, processed, summarized and reported within the time periods specified by the rules and forms of the SEC, and that information is accumulated and communicated to their respective management, including the Chief Executive Officer and Chief Financial Officer of their General Partners, as appropriate, to allow timely decisions regarding required disclosure. Such management,
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including the Chief Executive Officer and Chief Financial Officer of their General Partners, dodoes not expect that the disclosure controls and procedures or the internal controls will prevent and/or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Crestwood Equity'sEquity’s and Crestwood Midstream'sMidstream’s disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives and ourthe Chief Executive Officer and Chief Financial Officer of their General Partners concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2017.2023.


Changes in Internal Control over Financial Reporting


There werehave been no changes toin Crestwood Equity'sEquity’s or Crestwood Midstream'sMidstream’s internal control over financial reporting during the three and nine months ended September 30, 20172023 that have materially affected, or are reasonably likely to materially affect Crestwood Equity'sEquity’s or Crestwood Midstream'sMidstream’s internal control over financial reporting.


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PART II – OTHER INFORMATION


Item 1.Legal Proceedings

Item 1.Legal Proceedings

Part I, Item 1. Financial Statements, Note 109 to the Consolidated Financial Statements, of this Form 10-Q is incorporated herein by reference.



Item 1A.Risk Factors

Item 1A.Risk Factors

Our business faces many risks. Any of the risks discussed below or elsewhere in this Form 10-Q or our other SEC filings could have a material impact on our business, financial position or results of operations. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also impair our business operations. For a detailed discussion of the risk factors that should be understood by any investor contemplating investment in our common units, see Part I, Item 1A. Risk Factors in our 20162022 Annual Report on Form 10-K.



Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

None.



Item 3.Defaults Upon Senior Securities

Item 3.Defaults Upon Senior Securities

None.



Item 4.Mine Safety Disclosures

Item 4.Mine Safety Disclosures

Not applicable.



Item 5.Other Information

Item 5.Other Information
None.

During the three months ended September 30, 2023, none of our directors of officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).


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Item 6.Exhibits
Item 6.Exhibits
Exhibit

Number		Description
2.1
3.12.2
2.3
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2.4
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
3.11
3.12
3.113.13
3.123.14
3.133.15
4.1
Indenture, dated as of March 14, 2017, among Crestwood Midstream Partners LP, Crestwood Midstream Finance Corp., the guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to Crestwood Midstream’s Form 8- K filed on March 15, 2017)
4.2
Form of 5.75% Senior Note due 2025 (included in Exhibit 4.1)
4.3
Registration Rights Agreement, dated as of March 14, 2017, by and among Crestwood Midstream Partners LP, Crestwood Midstream Finance Corp., the guarantors named therein and J.P. Morgan Securities LLC, as representative of the several initial purchasers, with respect to the 5.75% Senior Notes due 2025 (incorporated by reference to Exhibit 4.3 to Crestwood Midstream’s Form 8- K filed on March 15, 2017)
*12.1
Computation of ratio of earnings to fixed charges - Crestwood Equity Partners LP
*12.2
Computation of ratio of earnings to fixed charges - Crestwood Midstream Partners LP

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*31.13.16
3.17
3.18
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10.1
10.2
10.3
*31.1
*31.2
*31.3
*31.4
*32.1
*32.2
*32.3
*32.4
**101.INSInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
**101.SCHInline XBRL Taxonomy Extension Schema Document
**101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
**101.LABInline XBRL Taxonomy Extension Label Linkbase Document
**101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
**101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
*Filed herewith
104Cover Page Interactive Data File (contained in Exhibit 101)
*Filed herewith
**Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


CRESTWOOD EQUITY PARTNERS LP
By:CRESTWOOD EQUITY GP LLC
(its general partner)
Date:November 2, 2023CRESTWOOD EQUITY PARTNERS LPBy:/s/ JOHN BLACK
By:CRESTWOOD EQUITY GP LLCJohn Black
(its general partner)
Date:November 2, 2017By:/s/ ROBERT T. HALPIN
Robert T. Halpin
Executive Vice President and Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)
CRESTWOOD MIDSTREAM PARTNERS LP
By:CRESTWOOD MIDSTREAM GP LLC
(its general partner)
Date:November 2, 20172023By:/s/ ROBERT T. HALPINJOHN BLACK
Robert T. HalpinJohn Black
Executive Vice President and Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)



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