Partners' Capital

6 Months Ended

Jun. 30, 2022

Statement of Partners' Capital [Abstract]

Partners’ Capital and Non-Controlling Partner

Common and Subordinated Units

On February 1, 2022, we completed the merger with Oasis Midstream. Pursuant to the merger agreement, Oasis Petroleum received cash plus approximately 20.9 million newly issued CEQP units in exchange 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 exchange for the Oasis Midstream common units held by them. For a further discussion of the merger with Oasis Midstream, see Note 3.

In March 2021, CEQP acquired approximately 11.5 million CEQP common units and 0.4 million subordinated units of CEQP from Crestwood Holdings LLC (Crestwood Holdings) for approximately $268 million (Crestwood Holdings Transactions). CEQP reflected the purchase price as a reduction to its common unitholders’ partners’ capital in its consolidated statement of partners’ capital during the first quarter of 2021. This transaction resulted in CEQP retiring the common and subordinated units acquired from Crestwood Holdings. In addition, in conjunction with this transaction, CEQP eliminated approximately $2.4 million of accounts payable to Crestwood Holdings which is reflected as an increase to CEQP’s common unitholders’ partners’ capital in its consolidated statements of partners’ capital during the first quarter of 2021. Transaction costs related to this transaction of approximately $7.6 million are reflected as a reduction of CEQP’s common unitholders’ partners’ capital in its consolidated statement of partners’ capital during the first quarter of 2021.

Distributions

Crestwood Equity

Limited Partners. A summary of CEQP’s limited partner quarterly cash distributions for the six months ended June 30, 2022 and 2021 is presented below:


Record Date	Payment Date	Per Unit Rate		Cash Distributions (in millions)
2022
February 7, 2022	February 14, 2022	$	0.625	$	60.9
May 6, 2022	May 13, 2022	$	0.655	64.2

				$	125.1
2021
February 5, 2021	February 12, 2021	$	0.625	$	46.4
May 7, 2021	May 14, 2021	$	0.625	39.3

				$	85.7

On July 14, 2022, we declared a distribution of $0.655 per limited partner unit to be paid on August 12, 2022 to unitholders of record on August 5, 2022 with respect to the quarter ended June 30, 2022.

Preferred Unitholders. During the six months ended June 30, 2022 and 2021, we paid cash distributions to our preferred unitholders of approximately $30 million in both periods. On July 14, 2022, the board of directors of our general partner authorized a cash distribution to our preferred unitholders of approximately $15 million with respect to the quarter ended June 30, 2022.

Crestwood Midstream

During the six months ended June 30, 2022 and 2021, Crestwood Midstream paid cash distributions of $319.7 million and $395.4 million to its partners.

On February 1, 2022, Crestwood Midstream received a non-cash contribution of approximately $1,075.1 million from Crestwood Equity related to net assets it acquired in conjunction with the merger with Oasis Midstream. In addition, on February 1, 2022, Crestwood Equity contributed cash acquired in conjunction with the merger with Oasis Midstream of approximately $14.9 million to Crestwood Midstream.

Non-Controlling Partner

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

The following table shows the change in our non-controlling interest in subsidiary at June 30, 2022 and 2021 (in millions):


Balance at December 31, 2021	$	434.6

Distributions to non-controlling partner	(20.7)
Net income attributable to non-controlling partner	20.5
Balance at June 30, 2022	$	434.4


Balance at December 31, 2020	$	432.7

Distributions to non-controlling partner	(19.6)
Net income attributable to non-controlling partner	20.4
Balance at June 30, 2021	$	433.5

In July 2022, Crestwood Niobrara paid cash distributions to Jackalope Holdings of approximately $10.3 million with respect to the quarter ended June 30, 2022.

Other

In February 2022, Crestwood Equity issued 177,025 performance units under the Crestwood Equity Partners LP 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 June 30, 2022, we had total unamortized compensation expense of approximately $4.2 million related to these performance units. During the three and six months ended June 30, 2022, we recognized compensation expense of $0.5 million and $0.7 million related to these performance units, which is included in general and administrative expenses on our consolidated statements of operations.

During the six months ended June 30, 2022, 206,017 performance units that were previously issued under the Crestwood LTIP vested, and as a result of the attainment of certain performance and market goals and related distributions during the three years that the awards were outstanding, we issued 526,322 common units during the six months ended June 30, 2022 related to those performance units.