Edgar Filing: Crestwood Midstream Partners LP

425

Filing pursuant to Rule 425 under the

Securities Act of 1933, as amended

Deemed filed under Rule 14a-12 under the

Securities Exchange Act of 1934, as amended

Filer: Crestwood Equity Partners LP

Subject Company: Crestwood Midstream Partners LP

Commission File No.: 001-35377

This filing relates to a proposed business combination (the “Merger”) involving Crestwood Equity Partners LP (“Crestwood Equity”) and Crestwood Midstream Partners LP (“Crestwood Midstream” and, together with Crestwood Equity, “Crestwood”).

Additional Information and Where to Find It

This communication contains information about the proposed merger involving Crestwood Equity and Crestwood Midstream. In connection with the proposed merger, Crestwood Equity will file with the SEC a registration statement on Form S-4 that will include a proxy statement/prospectus for the unitholders of Crestwood Midstream. Crestwood Midstream will mail the final proxy statement/prospectus to its unitholders. INVESTORS AND UNITHOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CRESTWOOD EQUITY, CRESTWOOD MIDSTREAM, THE PROPOSED MERGER AND RELATED MATTERS. Investors and unitholders will be able to obtain free copies of the proxy statement/prospectus (when available) and other documents filed with the SEC by Crestwood through the website maintained by the SEC at www.sec.gov. In addition, investors and unitholders will be able to obtain free copies of documents filed by Crestwood with the SEC from Crestwood’s website, www.crestwoodlp.com.

Participants in the Solicitation

Crestwood Equity, Crestwood Midstream, and their respective general partner’s directors and executive officers may be deemed to be participants in the solicitation of proxies from the unitholders of Crestwood Midstream in respect of the proposed merger transaction. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of the unitholders of Crestwood Midstream in connection with the proposed transaction, including a description of their direct or indirect interests, by security holdings or otherwise, will be set forth in the proxy statement/prospectus when it is filed with the SEC. Information regarding Crestwood Midstream’s directors and executive officers is contained in Crestwood Midstream’s Annual Report on Form 10-K for the year ended December 31, 2014, which was filed with the SEC on March 2, 2015, and any subsequent statements of changes in beneficial ownership filed with the SEC. Information regarding Crestwood Equity’s directors and executive officers is contained in Crestwood Equity’s Annual Report on Form 10-K for the year ended December 31, 2014, which was filed with the SEC on March 2, 2015, and any subsequent statements of changes in beneficial ownership filed with the SEC. Free copies of these documents may be obtained from the sources described above.

Forward-Looking Statements

The statements in this communication regarding future events, occurrences, circumstances, activities, performance, outcomes and results are forward-looking statements. Although these statements reflect the current views, assumptions and expectations of Crestwood’s management, the matters addressed herein are subject to numerous risks and uncertainties which could cause actual activities, performance, outcomes and results to differ materially from those indicated. Such forward-looking statements include, but are not limited to, statements about the benefits that may results from the merger and statements about the future financial and operating results, objectives, expectations and intentions and other statements that are not historical facts. Factors that could result in such differences or otherwise materially affect Crestwood’s financial condition, results of operations and cash flows include, without limitation, the possibility that expected cost reductions will not be realized, or will not be realized within the expected timeframe; fluctuations in crude oil, natural gas and NGL prices (including, without limitation, lower commodity prices for sustained periods of time); the extent and success of drilling efforts, as well as the extent and quality of natural gas and crude oil volumes produced within proximity of Crestwood assets; failure or delays by customers in achieving expected production in their oil and gas projects; competitive conditions in the industry and their impact on our ability to connect supplies to Crestwood gathering, processing and transportation assets or systems; actions or inactions taken or non-performance by third parties, including suppliers, contractors, operators, processors, transporters and customers; the ability of Crestwood to consummate acquisitions, successfully integrate the acquired businesses, realize any cost savings and other synergies from any acquisition; changes in the availability and cost of capital; operating hazards, natural disasters, weather-related delays, casualty losses and other matters beyond Crestwood’s control; timely receipt of necessary government approvals and permits, the ability of Crestwood to control the costs of construction, including costs of materials, labor and right-of-way and other factors that may impact Crestwood’s ability to complete projects within budget and on schedule; the effects of existing and future laws and governmental regulations, including environmental and climate change requirements; the effects of existing and future litigation; and risks related to the substantial indebtedness, of either company, as well as other factors disclosed in Crestwood’s filings with the U.S. Securities and Exchange Commission. You should read filings made by Crestwood with the U.S. Securities and Exchange Commission, including Annual Reports on Form 10-K and the most recent Quarterly Reports and Current Reports for a more extensive list of factors that could affect results. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect management’s view only as of the date made. Crestwood does not assume any obligation to update these forward-looking statements.

Simplification Overview and

Q1 2015 Financial & Operating Results

May 6, 2015

Crestwood Midstream Partners LP

Crestwood Equity Partners LP

Connections for America’s Energy

™

Connections for America’s Energy ™

Forward-Looking Statements

ADDITIONAL INFORMATION AND WHERE TO FIND IT

This press release contains information about the proposed merger involving Crestwood Equity and Crestwood Midstream. In connection with the proposed

merger, Crestwood Equity will file with the SEC a registration statement on Form S-4 that will include a proxy statement/prospectus for the unitholders of

Crestwood Midstream. Crestwood Midstream will mail the final proxy statement/prospectus to its unitholders. INVESTORS AND UNITHOLDERS ARE URGED

TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY WHEN THEY

BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CRESTWOOD EQUITY, CRESTWOOD MIDSTREAM, THE PROPOSED

MERGER AND RELATED MATTERS. Investors and unitholders will be able to obtain free copies of the proxy statement/prospectus (when available) and other

documents filed with the SEC by Crestwood through the website maintained by the SEC at www.sec.gov. In addition, investors and unitholders will be able to

obtain free copies of documents filed by Crestwood with the SEC from Crestwood’s website, www.crestwoodlp.com.

PARTICIPANTS IN THE SOLICITATION

Crestwood Equity, Crestwood Midstream, and their respective general partner’s directors and executive officers may be deemed to be participants in the

solicitation of proxies from the unitholders of Crestwood Midstream in respect of the proposed merger transaction. Information regarding the persons who

may, under the rules of the SEC, be deemed participants in the solicitation of the unitholders of Crestwood Midstream in connection with the proposed

transaction, including a description of their direct or indirect interests, by security holdings or otherwise, will be set forth in the proxy statement/prospectus

when it is filed with the SEC. Information regarding Crestwood Midstream’s directors and executive officers is contained in Crestwood Midstream’s Annual

Report on Form 10-K for the year ended December 31, 2014, which is filed with the SEC on March 2, 2015, and any subsequent statements of changes in

beneficial ownership on file with the SEC. Information regarding Crestwood Equity’s directors and executive officers is contained in Crestwood Equity’s Annual

Report on Form 10-K for the year ended December 31, 2014, which is filed with the SEC on March 2, 2015, and any subsequent statements of changes in

beneficial ownership on file with the SEC. Free copies of these documents may be obtained from the sources described above.

The statements in this communication regarding future events, occurrences, circumstances, activities, performance, outcomes and results are forward-

looking statements. Although these statements reflect the current views, assumptions and expectations of Crestwood’s management, the matters addressed

herein are subject to numerous risks and uncertainties which could cause actual activities, performance, outcomes and results to differ materially from those

indicated. Such forward-looking statements include, but are not limited to, statements about the benefits that may result from the merger and statements

about the future financial and operating results, objectives, expectations and intentions and other statements that are not historical facts. Factors that could

result in such differences or otherwise materially affect Crestwood’s financial condition, results of operations and cash flows include, without limitation, the

possibility that expected cost reductions will not be realized, or will not be realized within the expected timeframe; fluctuations in crude oil, natural gas and

NGL prices (including, without limitation, lower commodity prices for sustained periods of time); the extent and success of drilling efforts, as well as the

extent and quality of natural gas and crude oil volumes produced within proximity of Crestwood assets; failure or delays by customers in achieving expected

production in their oil and gas projects; competitive conditions in the industry and their impact on our ability to connect supplies to Crestwood gathering,

processing and transportation assets or systems; actions or inactions taken or non-performance by third parties, including suppliers, contractors, operators,

processors, transporters and customers; the ability of Crestwood to consummate acquisitions, successfully integrate the acquired businesses, realize any cost

savings and other synergies from any acquisition; changes in the availability and cost of capital; operating hazards, natural disasters, weather-related delays,

casualty losses and other matters beyond Crestwood’s control; timely receipt of necessary government approvals and permits, the ability of Crestwood to

control the costs of construction, including costs of materials, labor and right-of-way and other factors that may impact Crestwood’s ability to complete

projects within budget and on schedule; the effects of existing and future laws and governmental regulations, including environmental and climate change

requirements; the effects of existing and future litigation; and risks related to the substantial indebtedness, of either company, as well as other factors

disclosed in Crestwood’s filings with the U.S. Securities and Exchange Commission. You should read filings made by Crestwood with the U.S. Securities and

Exchange Commission, including Annual Reports on Form 10-K and the most recent Quarterly Reports and Current Reports for a more extensive list of

factors that could affect results. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect management’s view only as

of the date made. Crestwood does not assume any obligation to update these forward-looking statements.

Transaction Overview

•

Crestwood Equity Partners LP (NYSE: CEQP) and Crestwood Midstream Partners LP

(NYSE: CMLP) have executed definitive agreements to merge the two partnerships

–

Terms of the simplification transaction have been approved by both conflicts committees

and boards of directors

–

The merger must be approved by a majority of CMLP unitholders

–

First Reserve retains 100% non-economic GP interest (control)

•

CMLP

unitholders

will

receive

2.75

CEQP

units

for

each

CMLP

unit

owned

tax-

free exchange

–

Implies 17% premium to CMLP closing price as of 5/5/2015

–

~498 MM units issued to CMLP unitholders or 73% of pro forma CEQP

•

CMLP becomes wholly-owned subsidiary and all existing and new debt remains at

CMLP entity

–

CMLP’s incentive distribution rights eliminated

–

CEQP remaining operating assets contributed to CMLP immediately following the merger

–

CEQP

and

CMLP

revolvers

refinanced

into

new

$1.5

billion

facility

–

Class A Preferred units at CMLP exchanged into a substantially equivalent security at CEQP

•

Transaction is expected to close in Q3 2015, subject to CMLP unitholder approval

and customary closing conditions

Connections for America’s Energy ™

Transaction Highlights

•

Elimination of ~$30 million of IDRs drives immediate cost of capital improvement

•

Competitive cost of capital improves positioning for >$3.0 billion of identified

expansion opportunities

Improved Cost of

Capital

•

Simplified entity that should attract a broader universe of investors

•

Improved credit profile due to the elimination of structural subordination

•

Simplification of Crestwood’s governance structure better positions the partnership

to participate in the continuing trend of industry consolidation

Simplify

Corporate

Structure

•

Eliminates $5 million of estimated public company costs

•

Additive to $25 million to $30 million run-rate savings identified as a part of

Crestwood’s 2015 cost reduction initiatives

Further Reduce

Cost Structure /

Fixed Charges

•

Pro forma 2015 CEQP coverage ratio improved to ~1.05x at $0.55 per unit

distribution

(~$15

million

excess

cash

flow

coverage)

(1)

•

2% dilutive to CMLP in 2016, 3% accretive in 2017, substantial accretion thereafter

•

Expected pro forma DCF growth of ~11% through 2017

(2)

; accelerated with greater

M&A and organic investment

Growth and

Stability in

Distributions

•

Focus on core strategy of servicing the full midstream value chain in the premier

shale plays in North America

•

Eliminates

existing

conflicts

interest

arising

from

financial

complexity

Unified Corporate

Strategy

Estimated coverage ratio and cash coverage assumes January 1, 2015 effective date for the transaction for illustrative purposes.

Represents growth rate from 2015E pro forma DCF (assuming January 1, 2015 effective date) to 2017E pro forma DCF.

Connections for America’s Energy ™

Simplified Organizational Structure

Crestwood Equity

Partners LP

(NYSE: CEQP)

187.2 MM units

First Reserve/

Crestwood

Holdings

~11% LP

Interest

Crestwood

Midstream

Partners LP

(NYSE: CMLP)

188.3 MM common units

18.3 MM Class A

preferred units

Operating Subsidiaries

~4% LP

Interest

GP / IDR

Ownership

CEQP Public

Unitholders

~71% LP

Interest

CMLP Public

Common and

Preferred

Unitholders

~85% LP

Interest

~29% LP Interest

100% Non-economic GP

Interest (Control)

Operating

Subsidiaries

(NGL Assets)

Current Structure

Pro Forma Structure

Crestwood Equity

Partners LP

(NYSE: CEQP)

685 MM common units

52 MM preferred units

First Reserve/

Crestwood

Holdings

Crestwood

Midstream

Partners LP

(private wholly-owned

subsidiary)

100% Operating

Subsidiaries

CEQP Public

and Preferred

Unitholders

~84% LP

Interest

~16% LP Interest

100% Non-economic GP

Interest (Control)

Connections for America’s Energy ™

Realignment of Strategy Centered on Value

Creation

One Stock,

Simplified

Strategy

•

Provide first-in-class customer service

•

Focus on maintaining stable, fee-based cash flow profile

–

>90% total consolidated cash flow from fee based contracts

•

Leverage asset footprint to seek attractive investment opportunities

–

8 core assets in the most prolific shale plays in North America

–

>$3.0 billion identified expansion opportunities around our asset footprint

•

Manage costs to match commercial and operational opportunity sets

–

>$30 million of identified run-rate cost savings through 2015 cost reduction

initiative

•

Prudently manage the balance sheet

–

Leverage targets <4.0x

•

Transparency to investors

Simplification of structure realigns strategic focus towards unlocking full value

potential of our midstream portfolio

Connections for America’s Energy ™

Connections for America’s Energy

™

Cost of Capital Analysis –

Impact of IDR Elimination

Key Assumptions:

•

$500 MM Investment, 50% Equity / 50% Debt Consideration

•

Cost of Debt: 6.25%, CMLP Unit Price = $16.00, CEQP Unit Price = $6.82 (as of 5/5/2015)

Illustrative Cost of Capital Uplift

CMLP

Pro Forma CEQP

Current LP distribution on newly issued units.

Assumes 1.05x distribution coverage on incremental DCF.

($ millions except per unit data)

$500 MM Investment

Investment Multiple

6.0x

9.0x

12.0x

6.0x

9.0x

12.0x

Acquired EBITDA

$83

$56

$42

$83

$56

$42

(-) Maintenance Capex

(4)

(3)

(2)

(4)

(3)

(2)

(-) Incremental Interest Expense

(16)

(-) Cost of New Equity

(1)

(26)

(20)

Incremental DCF Available to Distribute

$38

$12

($2)

$43

$17

(-) Incremental GP Distribution / IDRs

(19)

(6)

–

Incremental DCF Available to LPs

$19

($2)

$43

$17

Existing Units

188

685

New Units

Pro Forma Total Units

204

722

Distribution Summary

Current Distribution per Unit

$1.64

$0.55

(+) Incremental Distribution per Unit

(2)

0.08

0.02

(0.01)

0.06

0.02

0.01

Pro Forma Distribution per Unit

$1.72

$1.66

$1.63

$0.61

$0.57

$0.56

Distribution Growth %

4.8%

1.1%

(0.8%)

10.4%

4.1%

0.9%

Connections for America’s Energy

™

Positioning Crestwood for Growth

Expansion Opportunities

Marcellus Shale:

~$500 to $600 million

South Texas:

~$1.1 to $1.3 billion

Permian Basin:

~$600 to $700 million

Niobrara Shale:

~$300 to $350 million

Bakken Shale:

~$500 to $750 million

West Coast:

~$75 to $100 million

Improving cost of capital to capture >$3.0 billion of identified potential

expansion opportunities around asset footprint

Connections for America’s Energy

™

Proposed Transaction Timeline

Announce Transaction

Complete new

$1.5 BB Revolver

syndication

May 6

May

Jun

Jul

Aug

Sep

May

CEQP /CMLP

Files S-4 and

Proxy Statement

with SEC

SEC Completes

Review of CMLP

Proxy Statement

July / August

Merger

Completed

(CMLP Delisted)

September

CMLP Unitholder

Vote

Aug / Sep

•

Transactions recommended by CEQP and CMLP conflicts committees and approved by CEQP

and CMLP Boards of Directors

•

No major regulatory approvals required

•

CMLP majority unitholder approval required

–

CEQP, Crestwood Holdings, Crestwood management, the board of directors, and the Class

A Preferred Holders own approximately 26% of the CMLP units entitled to vote and have

indicated their support for the transaction

May / June

Conservative estimate of ~4+ months from Announcement to Merger Closing

Connections for America’s Energy

™

First Quarter Highlights

Connections for America’s Energy ™

First Quarter Highlights

•

Adjusted EBITDA of $124.7MM, 26% over 1Q 2014

•

Distributable cash flow of $93.1MM, 34% over 1Q 2014

•

Quarterly cash distribution of $0.41/common unit to be

paid May 15, 2015 to unit holders of record on May 8, 2015

•

Consolidated Adjusted EBITDA of $141.9MM, 22% over 1Q

2014

•

Distributable cash flow of $21.4MM, 9% over 1Q 2014

•

Quarterly cash distribution of $0.1375/common unit to be

paid May 15, 2015 to unit holders of record on May 8, 2015

Note: See reconciliations of Adjusted EBITDA and distributable cash flow in the Appendix of this presentation.

Connections for America’s Energy ™

Consolidated Operating Statistics

Q1 2015

Q1 2014

Gathering and Processing

Gathering (Bcf/d)

1.2

1.1

Processing (MMcf/d)

203

189

Compression (MMcf/d)

692

448

Storage and Transportation

Firm (Bcf/d)

1.7

1.5

Interruptible (MMcf/d)

370

477

NGL and Crude Services

COLT Hub –

Rail Loading (MBbls/d)

123

Arrow –

(Crude MBbls/d / Gas MMcf/d

Water MBbls/d)

44/20/12

Total Bakken Crude Handled (MBbls/d)

223

154

CEQP NGL Volumes (MBbls/d)

232

244

66/45/25

Connections for America’s Energy ™

First Quarter Financial Results -

CMLP

Q1 2015

Q1 2014

Total Revenues

$455

$537

Gross Margin

169

139

Operations and Maintenance

General and Administrative

Net Income

Adjusted EBITDA

125

(-) Cash Interest Expense

(28)

(26)

(-) Maintenance Capital

(3)

Distributable

Cash

Flow

(1)

($US Millions)

(1)

Other adjustments include income tax expense and deficiency payments.

Connections for America’s Energy ™

First Quarter Financial Results -

CEQP

Q1 2015

Q1 2014

Total Revenues

$732

$972

Gross Margin

202

186

Operations and Maintenance

General and Administrative

Net Income

Adjusted EBITDA

142

117

(-) Cash Interest Expense

(32)

(30)

(-) Maintenance Capital

(5)

(7)

(-) CMLP DCF Attributable to Public LPs

(82)

(60)

CEQP

Distributable

Cash

Flow

(1)

($US Millions)

(1)

Other adjustments include income tax expense and deficiency payments.

Connections for America’s Energy ™

Non GAAP Reconciliations

Connections for America’s Energy ™

CMLP Non-GAAP Reconciliations

2015

2014

EBITDA

Net income

21.7

5.5

Interest and debt expense, net

29.9

28.1

Provision for income taxes

0.3

0.7

Depreciation, amortization and accretion

59.9

50.8

EBITDA

(a)

111.8

85.1

Significant items impacting EBITDA:

Unit-based compensation charges

5.2

4.6

(Gain) loss on long-lived assets, net

0.8

(0.5)

Loss on contingent consideration

—

2.1

(Earnings) loss from unconsolidated affiliates, net

(3.4)

0.1

Adjusted EBITDA from unconsolidated affiliates, net

6.5

1.7

Significant transaction and environmental related costs and other items

3.8

5.8

Adjusted EBITDA

(a)

124.7

98.9

Distributable Cash Flow

Adjusted EBITDA

(a)

124.7

98.9

Cash interest expense

(b)

(28.0)

(26.3)

Maintenance capital expenditures

(c)

(2.7)

(3.3)

Provision for income taxes

(0.3)

(0.7)

Deficiency payments

(0.6)

1.1

Distributable cash flow attributable to CMLP

(d)

93.1

69.7

(a)

(b)

Cash interest expense is book interest expense less amortization

of deferred financing costs plus bond premium amortization.

(c)

(d)

EBITDA is defined as income before income taxes, plus net interest and debt expense, and depreciation, amortization and accretion expense. In addition, Adjusted EBITDA considers the adjusted earnings impact of our

unconsolidated

affiliates

adjusting

our

equity

earnings

losses

from

our

unconsolidated

affiliates

for

our

proportionate

their

depreciation

and

interest

and

the

impact

certain

significant

items,

such

unit-

based compensation expenses, gains and impairments of long-lived assets and goodwill, gains and losses on acquisition-related contingencies, third party costs incurred related to potential and completed acquisitions,

certain environmental remediation costs, change in fair value of

certain commodity derivative contracts, certain costs related to our 2015 cost savings initiatives, and other transactions identified in a specific reporting

period. EBITDA and Adjusted EBITDA are not measures calculated in accordance with GAAP, as they do not include deductions for items 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 an alternative to net income, operating cash flow or any other measure of financial performance presented in accordance

with GAAP. EBITDA and Adjusted EBITDA calculations may vary among entities, so our computation may not be comparable to measures used by other companies.

Maintenance capital expenditures are defined as those capital expenditures which do not increase operating capacity or revenues from existing levels.

Distributable cash flow is defined as Adjusted EBITDA, less cash

interest expense, maintenance capital expenditures, income taxes, deficiency payments (primarily related to deferred revenue), and other adjustments.

Distributable cash flow should not be considered an alternative to cash flows from operating activities or any other measure of financial performance calculated in accordance with generally accepted accounting principles

those

items

are

used

measure

operating

performance,

liquidity,

the

ability

service

debt

obligations.

believe

that

distributable

cash

flow

provides

additional

information

for

evaluating

our

ability

declare

and

pay

distributions to unitholders. Distributable cash flow, as we define it, may not be comparable to distributable cash flow or similarly titled measures used by other corporations and partnerships.

Three Months Ended

March 31,

(in millions, unaudited)

Connections for America’s Energy ™

CEQP Non-GAAP Reconciliations

2015

2014

EBITDA

Net income

18.1

13.2

Interest and debt expense, net

33.6

31.7

Provision for income taxes

0.4

0.8

Depreciation, amortization and accretion

74.2

66.3

EBITDA

(a)

126.3

112.0

Significant items impacting EBITDA:

Unit-based compensation charges

5.8

5.4

(Gain) loss on long-lived assets, net

1.0

(0.5)

Loss on contingent consideration

—

2.1

Earnings (loss) from unconsolidated affiliates, net

(3.4)

0.1

Adjusted EBITDA from unconsolidated affiliates, net

6.5

1.7

Change in fair value of commodity inventory-related derivative contracts

1.1

(10.7)

Significant transaction and environmental related costs and other items

4.6

6.5

Adjusted EBITDA

(a)

141.9

116.6

Distributable Cash Flow

Adjusted EBITDA

(a)

141.9

116.6

Cash interest expense

(b)

(31.8)

(30.4)

Maintenance capital expenditures

(c)

(5.4)

(7.0)

Provision for income taxes

(0.4)

(0.8)

Deficiency payments

(0.6)

1.1

Public Crestwood Midstream LP unitholders interest in CMLP distributable

cash flow

(d)

(82.3)

(59.8)

Distributable cash flow attributable to CEQP

(e)

21.4

19.7

Three Months Ended

March 31,

(in millions, unaudited)

(a)

(b)

Cash interest expense less amortization of deferred financing costs plus bond premium amortization plus or minus fair value adjustment of interest rate swaps.

(c)

(d)

(e)

Crestwood Midstream distributable cash flow less incentive distributions paid to the general partner and the public LP ownership interest in Crestwood Midstream.

Distributable cash flow is defined as Adjusted EBITDA, less cash interest expense, maintenance capital expenditures, income taxes, deficiency payments (primarily related to deferred revenue), and public Crestwood

Midstream LP unitholders interest in CMLP distributable cash flow. Distributable cash flow should not be considered an alternative to cash flows from operating activities or any other measure of financial performance

calculated in accordance with generally accepted accounting principles as those items are used to measure operating performance, liquidity, or the ability to service debt obligations. We believe that distributable cash flow

provides additional information for evaluating our ability to declare and pay distributions to unitholders. Distributable cash flow, as we define it, may not be comparable to distributable cash flow or similarly titled measures

used by other corporations and partnerships.

unconsolidated affiliates by adjusting our equity earnings or losses from our unconsolidated affiliates for our proportionate share of their depreciation and interest and the impact of certain significant items, such as unit-

certain environmental remediation costs, change in fair value of certain commodity derivative contracts, certain costs related to our 2015 cost savings initiatives, and other transactions identified in a specific reporting

which are necessary to maintain our business. EBITDA and Adjusted EBITDA should not be considered an alternative to net income, operating cash flow or any other measure of financial performance presented in

accordance with GAAP. EBITDA and Adjusted EBITDA calculations may vary among entities, so our computation may not be comparable to measures used by other companies.

Maintenance capital expenditures are defined as those capital expenditures which do not increase operating capacity or revenues from existing levels.