Related Party Transactions

12 Months Ended

Dec. 31, 2019

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. We enter into transactions with our affiliates within the ordinary course of business and the services are based on the same terms as non-affiliates, including gas gathering and processing services under long-term contracts, product purchases, marketing and various operating agreements. We also enter into transactions with our affiliates related to services provided on our expansion projects. During the years ended December 31, 2019 and 2018, we paid approximately $9.9 million and $7.2 million of capital expenditures to Applied Consultants, Inc., an affiliate of Crestwood Holdings. Below is a discussion of certain of our related party agreements.

Shared Services. CMLP shares common management, general and administrative and overhead costs with CEQP. CEQP grants long-term incentive awards under the Crestwood LTIP as discussed in Note 13 and, as such, CEQP allocates a portion of its unit-based compensation costs to CMLP.

Stagecoach Gas Management Agreement. In May 2016, Crestwood Midstream Operations, LLC (Crestwood Midstream Operations), our wholly-owned subsidiary and Stagecoach Gas entered into a management agreement under which Crestwood Midstream Operations provides the management and operating services required by Stagecoach Gas’ facilities. The initial term of the agreement will expire in May 2021, and is automatically extended for three-year periods unless otherwise terminated pursuant to the terms of the agreement. Reimbursements received from Stagecoach Gas under this agreement are reflected as operations and maintenance expenses at CEQP and CMLP in the table below.

Tres Palacios Operating Agreement. A consolidated subsidiary of Crestwood Midstream entered into an operating agreement with Tres Palacios, pursuant to which we assumed the responsibility of operating and maintaining the facilities as well as certain administrative and other general services identified in the agreement. Under the operating agreement, Tres Palacios reimburses us for all costs incurred on its behalf. These reimbursements are reflected as operations and maintenance expenses at CEQP and CMLP in the table below.

Crestwood Permian Operating Agreement. In October 2016, Crestwood Midstream Operations entered into an operating agreement with Crestwood Permian, pursuant to which we provide operating services for Crestwood Permian’s facilities, as well as certain administrative and other general services identified in the agreement. Under this operating agreement, Crestwood Permian reimburses us for all costs incurred on its behalf. These reimbursements are reflected as operations and maintenance expenses at CEQP and CMLP in the table below.

Jackalope Gas Gathering Services, L.L.C. On April 9, 2019, Crestwood Niobrara, our consolidated subsidiary, acquired Williams’ 50% equity interest in Jackalope, and as a result, Crestwood Niobrara controls and owns 100% of the equity interests in Jackalope. Prior to the acquisition of the remaining interest in Jackalope, a consolidated subsidiary of Crestwood Midstream entered into a marketing services agreement with Jackalope under which we provided marketing services for Jackalope as well as certain administrative and other general services identified in the agreement. Under this marketing services agreement, Jackalope reimbursed us for all costs incurred on its behalf. These reimbursements are reflected as operations and maintenance expenses at CEQP and CMLP in the table below.

The following table shows transactions with our affiliates which are reflected in our consolidated statements of operations for the years December 31, 2019, 2018 and 2017 (in millions):



	Year Ended December 31,
	2019			2018			2017
Revenues at CEQP and CMLP	$	2.9		$	1.0		$	1.8
Costs of product/services sold at CEQP and CMLP⁽¹⁾	$	45.4		$	134.7		$	15.3
Operations and maintenance expenses at CEQP and CMLP⁽²⁾	$	25.9		$	28.7		$	22.3
General and administrative expenses charged by CEQP to CMLP, net⁽³⁾	$	41.4		$	20.7		$	19.4
General and administrative expenses at CEQP charged from Crestwood Holdings, net⁽⁴⁾	$	(0.6	)	$	(2.7	)	$	(1.7	)

(1)

Includes (i) $19.0 million and $56.1 million during the years ended December 31, 2019 and 2018 related to purchases of NGLs from a subsidiary of Crestwood Permian; (ii) $23.9 million and $78.6 million during the years ended December 31, 2019 and 2018 related to an agency marketing agreement with Ascent Resources - Utica, LLC (Ascent); (iii) $0.2 million during the year ended December 31, 2019 related to an agreement with Blue Racer Midstream, LLC (Blue Racer); (iv) $2.3 million during the year ended December 31, 2019 related to purchases of natural gas from a subsidiary of Stagecoach Gas; and (v) $15.3 million during the year ended December 31, 2017 related to natural gas purchases from Sabine Oil and Gas (Sabine). Ascent, Blue Racer and Sabine are affiliates of Crestwood Holdings for the respective periods presented.

(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, and these charges are reflected as a reduction of operations and maintenance expenses in our consolidated statements of operations. During the year ended December 31, 2019, we charged $7.5 million to Stagecoach Gas, $4.4 million to Tres Palacios, $13.5 million to Crestwood Permian and $0.5 million to Jackalope. During the year ended December 31, 2018, we charged $7.9 million to Stagecoach Gas, $3.8 million to Tres Palacios, $15.9 million to Crestwood Permian and $1.1 million to Jackalope. During the year ended December 31, 2017, we charged $8.4 million to Stagecoach Gas, $3.5 million to Tres Palacios, $10.0 million to Crestwood Permian and $0.4 million to Jackalope.

(3) Includes $45.1 million, $24.3 million and $22.4 million of net unit-based compensation charges allocated from CEQP to CMLP for the years ended December 31, 2019, 2018 and 2017. In addition, includes $3.7 million, $3.6 million and $3.0 million of CMLP’s general and administrative costs allocated to CEQP during the years ended December 31, 2019, 2018 and 2017.


(4)	Includes $1.9 million, $4.2 million and $3.1 million of unit-based compensation charges allocated from Crestwood Holdings to CEQP and CMLP during the years ended December 31, 2019, 2018 and 2017.

The following table shows accounts receivable and accounts payable from our affiliates as of December 31, 2019 and 2018 (in millions):



	December 31,
	2019		2018
Accounts receivable at CEQP and CMLP	$	7.3	$	4.1
Accounts payable at CEQP	$	15.6	$	16.1
Accounts payable at CMLP	$	13.1	$	13.6