Acquisitions

9 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

Acquisitions and Divestitures

Acquisitions and Divestiture

Acquisitions

NGL Asset Acquisition

In April 2020, we acquired several NGL storage and rail-to-truck liquid petroleum gas (LPG) terminals from Plains All American Pipeline, L.P. (Plains) for approximately $162 million. The acquired assets include 7 MMBbls of NGL storage and seven LPG terminals, and resulted in an increase of approximately $110 million to our property, plant and equipment, $50 million to our intangible assets and $2 million to our other assets and liabilities, net. We allocated the purchase price to these assets and liabilities based on their fair values, which are Level 3 fair value measurements and were developed by management with the assistance of a third-party valuation firm utilizing market-related information about the property, plant and equipment and customer relationships acquired. These assets are included in our marketing, supply and logistics segment. The transaction costs related to this acquisition were not material during the three and nine months ended September 30, 2020.

Jackalope Acquisition

On April 9, 2019, Crestwood Niobrara LLC (Crestwood Niobrara), our consolidated subsidiary, acquired Williams Partners LP’s (Williams) 50% equity interest in Jackalope Gas Gathering Services, L.L.C. (Jackalope) for approximately $484.6 million (Jackalope Acquisition). The acquisition was funded through a combination of borrowings under the CMLP credit facility and the issuance of $235 million of new preferred units to CN Jackalope Holdings LLC (Jackalope Holdings) (see Note 10 for a further discussion of the issuance of the new preferred units). Prior to the Jackalope Acquisition, Crestwood Niobrara owned a 50% equity interest in Jackalope, which we accounted for under the equity method of accounting. As a result of this transaction, Crestwood Niobrara controls and owns 100% of the equity interests in Jackalope. The financial results of Jackalope are included in our gathering and processing segment from the date of the acquisition.

The fair value of the assets acquired and liabilities assumed in the Jackalope Acquisition exceeded the sum of the cash consideration paid and the historical book value of our 50% equity interest in Jackalope (which was remeasured at fair value and derecognized) and, as a result, we recognized a gain of approximately $209.4 million that is included in gain on acquisition in our consolidated statements of operations.

Divestiture

On October 1, 2020, we sold our gathering systems in the Fayetteville Shale to a third party for approximately $23 million. As a result of the sale, we classified these assets as current assets held for sale on our consolidated balance sheets at September 30, 2020 and recorded a loss on long-lived assets of approximately $19.9 million during three months ended September 30, 2020 for the difference between the assets held for sale and the historical carrying value of the property, plant and equipment and current assets and liabilities related to the assets sold. The current assets held for sale were recorded at fair value based on the sales proceeds, which is a Level 3 fair value measurement. For a further description of the Fayetteville gathering systems, which are included in our gathering and processing segment, see our 2019 Annual Report on Form 10-K.