Crestwood Equity Partners LP — Merger or Acquisition (August 2023)
45 slides from Crestwood Equity Partners LP's merger presentation, Aug 24, 2023
Slide 1: Investor Presentation August 2023
Filed by Energy Transfer LP Pursuant to Rule 425 under the Securities Act of 1933 Subject Company: Crestwood Equity Partners LP Commission File No.: 001-34664 Date: August 22, 2023 Investor Presentation August 2023
Slide 2: Forward-looking Statements / Legal Disclaimer
Forward-looking Statements / Legal Disclaimer Management of Energy Transfer LP (“Energy Transfer” or “ET”) will provide this presentation to analysts and/or investors at meetings to be held throughout August 2023. At the meetings, members of management may make statements about future events, outloo
Slide 3: What's New?
What’s New? Operational Financials Strategic Ø Midstream gathered volumes reached a Ø Narrowed 2023 Adjusted EBITDA Ø Announced plans to acquire Crestwood new record in Q2’23 guidance: Equity Partners LP in a $7.1 billion all- equity transaction on August 16, 2023 ‒ Expected Adj. EBITDA: $13.1 – $13
Slide 4: Acquisition of Crestwood Equity Partners LP
Acquisition of Crestwood Equity Partners LP
Slide 5: Overview of Proposed Transaction
Overview of Proposed Transaction Overview of Merger Transaction Illustration • Energy Transfer has executed a definitive agreement to acquire Crestwood at an ~$7.1Bn enterprise value in a 100% all-equity transaction based on a 2.07x exchange ratio Public and Preferred Insiders Units •ET issues ~219
Slide 6: Key Transaction Highlights
Key Transaction Highlights Immediately Accretive to DCF/Unit Upon Closing Credit Neutrality Driven by All-Equity Deal Diversified and Complementary Assets Drive $40MM+ of Annual Operational and Cost Synergies with Future Opportunities for Financial Synergies Long-term (9+ Years) Contracted Portfolio
Slide 7: Combination Expected To Benefit All Stakeholders Through Additional Scale and Integration
Combination Expected To Benefit All Stakeholders Through Additional Scale and Integration Ø CEQP’s substantial processing capacity in the Williston and Delaware basins complements ET’s significant downstream fractionation capacity at Mont Belvieu and hydrocarbon export capability from both Nederland
Slide 8: Diversified U.S. Portfolio of Leading G&P Assets
Diversified U.S. Portfolio of Leading G&P Assets Expanded operating footprint in oil-weighted basins drives competitive scale and growth opportunities Williston Basin Key CEQP Assets Williston Basin • 2.0 Bcf/d gas gathering Major Customers • 1.4 Bcf/d gas processing Dedicated • 340 MBbls/d crude oi
Slide 9: Williston Basin Overview
Williston Basin Overview CEQP is a leading midstream operator in the Williston with gas gathering capacity of 818 MMcf/d, crude gathering capacity of 250 MBbls/d, as well as gas processing capacity of 430 MMcf/d, and a diverse mix of well-capitalized producers Overview Williston Basin Asset Map Bakk
Slide 10: Delaware Basin Overview
Delaware Basin Overview Fully integrated gathering system creates enhanced competitive advantages for CEQP in some of the most active counties in New Mexico and Texas Overview Delaware Basin Asset Map • Assets include multiple wellhead gas gathering systems, 550 MMcf/d of in-service processing capac
Slide 11: Powder River Overview
Powder River Overview CEQP continues to realize commercial success leveraging excess capacity at the Bucking Horse Processing Plant to attract new, high-quality customers Overview Powder River Basin Asset Map • CEQP is the largest well-head service provider in the Power River Basin WY WY WY SD SD SD
Slide 12: Storage & Logistics Overview
Storage & Logistics Overview Integrated infrastructure of NGL marketing, storage, terminal & transportation services supported by crude and gas marketing and the COLT Hub Overview NGL Asset Overview • NGL Logistics: strategically located storage and terminal assets with 10 MMBbls of storage capacity
Slide 13: ET and CEQP Complementary Assets
ET and CEQP Complementary Assets Gather ~19.8 million MMBtu/d of Gather ~1.2 million MMBtu/d of gas and 863,000 Bbls/d of NGLs gas and ~96,000 Bbls/d of NGLs produced produced Transport ~31.4 million MMBtu/d 10 million Bbls NGL storage of natural gas via inter and intrastate pipelines 340 thousand B
Slide 14: Continued Consolidation
Continued Consolidation (1) Ø Closed December 2021Ø Closed September 2022Ø Closed May 2023Ø Announced August 2023 Ø Assets complementary to ET’s Ø Assets extended ET’s gas Ø Assets complementary to ET’s Ø Commercial synergy opportunities interstate and intrastate pipeline gathering and processing sy
Slide 15: Energy Transfer Overview
Energy Transfer Overview Se ENERGY TRANSFER
Slide 16: Energy Transfer – A Truly Unique, Coast-to-Coast Asset Base
Energy Transfer – A Truly Unique, Coast-to-Coast Asset Base Marcus Hook Terminal Mont Belvieu Nederland Terminal Compressor Station Asset Overview Natural Gas Storage Natural Gas Liquids (NGLs) Fractionator Crude Terminals Refined Products Processing Houston Terminal Treating Major Terminals Houston
Slide 17: Long-Term Capital Allocation Strategy
Long-Term Capital Allocation Strategy Illustrative – Based on $7.5B Distributable Cash Flow • Discretionary cash flow for debt paydown and unit buybacks • $0.5-$1.5B (up to 20%) $0.5-1.5B ~7-20% • Growth capital • (Stated long-term range of $2-3B annual spend; up to 40%) • Distributions to LP common
Slide 18: Outlook Supported by Strong, Predominantly Fee-based Core Business
Outlook Supported by Strong, Predominantly Fee-based Core Business ET 2023E Adjusted EBITDA $13.1 - $13.4 billion 2022 to 2023 Adjusted EBITDA Drivers 2023E Adjusted EBITDA Breakout + Volume growth on existing assets Commodity 1 Spread 5-10% + NGL pipeline, fractionation and export activities 0-5% +
Slide 19: Well Balanced Asset Mix Provides Strong Earnings
Well Balanced Asset Mix Provides Strong Earnings Q2 2023 Adjusted EBITDA by Segment¹ Segment Contract Structure Strength Fees from dedicated Significant connectivity from acreage, take-or-pay and Permian, Bakken and Midcon Crude Oil throughput-based basins to U.S. markets, transportation, terminalli
Slide 20: Strong Investment Returns With Shorter Cash Cycle
Strong Investment Returns With Shorter Cash Cycle 2023E Growth Capital: ~$2 billion % of 2023E • Bear high-recovery cryogenic processing plant • New treating capacity in the Haynesville Midstream ~40% • Efficiency improvements and emissions reduction projects • Multiple gathering & processing and co
Slide 21: Growing With Increased Financial Discipline – 2023 A Key Inflection Period
Growing With Increased Financial Discipline – 2023 A Key Inflection Period 2 Legacy ET Organic Growth ET Adjusted EBITDA Major growth projects added since 2017 1 Capital • Bakken Pipeline System* • Permian Express 3* 2023E 2018 2017 • Trans Pecos/Comanche Trail •Panther Plant $13.1-$13.4B $4.9B Pipe
Slide 22: Significant Management Ownership – Continued Buying
Significant Management Ownership – Continued Buying Since January 2021, Energy Transfer insiders and independent board members purchased approximately 38.5 million units, totaling ~$382 million Insider Ownership vs Peers Ownership Breakout Leadership Support 12% • Executive Chairman (Kelcy Warren) -
Slide 23: Permian Basin Processing Expanding to Meet Growing Demand
Permian Basin Processing Expanding to Meet Growing Demand Permian Basin plant inlet volumes remain at or near record highs Permian Basin Footprint Ø Extensive Permian Basin Footprint: • Have significant acreage dedications to ET processing plants in the Permian Basin Ø Permian Bridge Pipeline • Conv
Slide 24: Comprehensive Permian Gas Takeaway Solutions
Comprehensive Permian Gas Takeaway Solutions Flexibility to Provide Natural Gas Delivery to Most Market Hubs Waha Header Permian Natural Gas Takeaway Project Chicago • Energy Transfer’s Waha header connects to more than 10 different • Proposed project would include construction of a new intrastate n
Slide 25: Gulf Run Pipeline
Gulf Run Pipeline Providing An Efficient Gulf Coast Connection Gulf Run Pipeline Ø Unparalleled access to prolific natural gas producing regions in the U.S. Perryville with ability to deliver Haynesville-area gas to Gulf Coast Region Ø Zone 1 (formerly Line CP): ~200-mile, interstate pipeline with a
Slide 26: US Propane and Normal Butane Annual Exports
US Propane and Normal Butane Annual Exports More than 60% of all US propane is currently exported, and ET is bullish that there will be significant growth in international demand for many years to come 2,000,000 1,769,000 1,800,000 1,741,000 1,614,000 1,600,000 1,378,000 1,400,000 1,157,000 1,200,00
Slide 27: NGL & Refined Products Segment - A World Leader in NGL Exports
NGL & Refined Products Segment - A World Leader in NGL Exports ET’s market share of worldwide NGL exports remains at ~20% ET NGL Exports Nederland Terminal 1000 900 800 700 600 500 400 300 200 100 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Expanding industry leading business while capturing
Slide 28: NGL & Refined Products Segment – Growing Ethane Export Assets
NGL & Refined Products Segment – Growing Ethane Export Assets Ethane Export Pipeline and Terminal Facilities Orbit JV Ø Orbit Joint Venture with Satellite Petrochemical USA Corp includes an ethane export terminal on the U.S. Gulf Coast which provides ethane to Satellite’s newly-constructed ethane cr
Slide 29: NGL & Refined Products Segment – Pipeline & Fractionation
NGL & Refined Products Segment – Pipeline & Fractionation – Continuing to Expand Leading Asset Base Lone Star Express Expansion Mont Belvieu Fractionation Expansions • Total of 7 fractionators at Mont Belvieu; current capacity over 900,000 • 24-inch, 352-mile expansion bbls/d • Added incremental NGL
Slide 30: World-Class Export Capabilities
World-Class Export Capabilities – Uniquely Positioned to Serve Global Demand Marcus Hook Terminal Houston Terminal Total NGL export capacity is over 1.1 million barrels per day • 330 acres on Houston Ship Channel • 18.2 million barrels of crude and heated product storage • ~850,000 bbls/d of crude e
Slide 31: Lotus Midstream
Lotus Midstream Opportunistic Addition to Permian Pipeline Network Overview Ø On May 2, 2023, Energy Transfer completed the acquisition of Lotus Midstream Operations, LLC for total consideration of $930 million in cash and approximately 44.5 million newly issued common units Ø Integration is going w
Slide 32: Alternative Energy Group
Alternative Energy Group – Leveraging asset base and expertise to develop projects to reduce environmental footprint Dual Drive Compressors - Established in 2012 Ø Proprietary technology that allows for switching between electric motors and natural gas engines to drive compressors, and Ø ET and Oxy
Slide 33: Corporate Responsibility Program Highlights
Corporate Responsibility Program Highlights Program Accomplishments • Culture of “safety first, safety always” and a commitment to zero-incidents • Established an Alternative Energy Group to explore renewable energy projects • Real-time tracking of EHS incidents focused on leading indicators • ~20%
Slide 34: Appendix
Appendix Se ENERGY TRANSFER
Slide 35: Crude Oil Segment
Crude Oil Segment ~14,300 miles of crude oil trunk and gathering lines Crude Oil Pipelines ~ 1 million barrels per day of Permian crude oil takeaway capacity Ø Directly connected to 6.8 MMbbls/d (~37%) of domestic refining capacity Ø 1.85 MMbbls/d of ET-owned export capacity on USGC Ø ET owns and op
Slide 36: NGL & Refined Products Segment
NGL & Refined Products Segment Fractionation Ø 7 Mont Belvieu fractionators (over 900 Mbpd) Ø 150,000 Bbls/d Frac VIII expected in full commercial service around September 1, 2023 Ø 35 Mbpd Geismar Frac; 30 to 50 Mbpd Marcus Hook C3+ Frac NGL Storage Ø Total NGL storage ~83 million barrels Ø ~58 mil
Slide 37: Midstream Segment
Midstream Segment Midstream Highlights Ø Extensive Gathering and Processing Footprint • Assets in most of the major U.S. producing basins PA Ø Continued Volume Growth • Q2 2023 volumes were a record 19.8 million MMbtu/d primarily due to increased throughput in the majority of our operating regions Ø
Slide 38: Interstate Natural Gas Pipeline Segment
Interstate Natural Gas Pipeline Segment Interstate Highlights ET’s interstate pipelines provide: Ø Stability • Approximately 95% of revenue derived from fixed reservation fees Ø Diversity • Access to multiple shale plays, storage facilities and markets Asset OverviewØ Growth Opportunities Transweste
Slide 39: Intrastate Natural Gas Pipeline Segment
Intrastate Natural Gas Pipeline Segment ~ 11,385 miles of intrastate pipelines with ~24 Bcf/d of throughput capacity, Intrastate Highlights and ~88 Bcf/d of working storage capacity Ø Well-positioned to capture additional revenues from anticipated changes in natural gas supply and demand in the next
Slide 40: Scale and Diversity of Cash Flow Enhances Credit Profile
Scale and Diversity of Cash Flow Enhances Credit Profile Ø Expected accretion and increased free cash flow will further ET’s ability to buy back units and/or increase distribution growth rate Ø Pro forma ET maintains a predominantly fee-based cash flow profile Ø Limited commodity price exposure with
Slide 41: Cash Flow Supported By Balanced Portfolio With High-Quality Customers
Cash Flow Supported By Balanced Portfolio With High-Quality Customers Cash flow supported by primarily fixed fee agreements and top-tier customer base; favorable commodity prices drive upside in PoP contracts Contract & Customer Portfolio Commodity Type Contract Type • G&P assets supported by long-t
Slide 42: Transaction Timeline
Transaction Timeline August 2023 Q3 and Q4 2023 Q4 2023 Ø Sign AgreementØ S-4 registration statement (including Ø Transaction close Crestwood proxy statement) declared Ø Announce Transaction effective by the SEC and file definitive Ø Begin drafting S-4 proxy statement with the SEC registration state
Slide 43: Non-GAAP Reconciliations
Non-GAAP Reconciliations 43
Slide 44: Non-GAAP Reconciliation
Non-GAAP Reconciliation Energy Transfer LP Reconciliation of Non-GAAP Measures * Year 2020 2021 2022 2023 Full Year Full Year Q1 Q2 Q3 Q4 Full Year Q1 Q2 To Date Net income $ 140 $ 6,687 $ 1,487 $ 1,622 $ 1,322 $ 1,437 $ 5,868 $ 1,447 $ 1,233 $ 2,680 Interest expense, net 2,327 2,267 5 59 578 577 59
Slide 45: Non-GAAP Reconciliation Definitions
Non-GAAP Reconciliation Definitions Adjusted EBITDA and Distributable Cash Flow are non-GAAP financial measures used by industry analysts, investors, lenders and rating agencies to assess the financial performance and the operating results of Energy Transfer's fundamental business activities and sho
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