HOUSTON--(BUSINESS WIRE)--Crestwood Equity Partners LP (NYSE: CEQP) (“Crestwood” or “CEQP”) announced today that the board of directors of its general partner has declared the partnership’s quarterly cash distribution of $0.625 per limited partner unit ($2.50 annually) for the quarter ended March 31, 2020. In addition, Crestwood announced a quarterly cash distribution of $0.2111 per Class A preferred equity unit ($0.8444 annually). Both common and preferred distributions will be made on May 15, 2020, to unitholders of record as of May 8, 2020.
“Based on our current financial position and expected first quarter financial and operating results, Crestwood’s board of directors has elected to maintain the common and preferred distributions at their current levels for the quarter ended March 31, 2020. We are closely monitoring the unprecedented market conditions created by the COVID-19 pandemic and the corresponding volatility for global crude oil demand and commodity prices. Crestwood has been responding to these extraordinary market events by aggressively canceling or delaying capital projects, significantly reducing operating and administrative costs, optimizing storage assets and working with customers to maintain volumes across our diversified asset portfolio. We are also closely collaborating with our customers, considering near-term market prices and access, to update Crestwood’s financial and operating guidance for the balance of 2020 as the financial policies we laid out earlier this year are no longer relevant or appropriate on an intermediate-term basis given the current environment. These revised forecasts, and the current dislocations we are seeing across our capital structure, will form the basis for our comprehensive strategy focused on preserving liquidity and balance sheet flexibility through this industry-wide downturn. As a part of this strategy, we are evaluating multiple avenues to further enhance and preserve optionality with respect to the company’s financial position, including our common and preferred unit distribution policies,” commented Robert G. Phillips, Chairman, President and Chief Executive Officer.
Mr. Phillips continued, “Due to actions we have taken in the past several years, including building substantial distribution coverage and a strong balance sheet with no debt maturities until 2023, Crestwood is positioned to manage the partnership through this current down-cycle. Additionally, in response to the unprecedented industry conditions over the past few weeks, we have reduced Crestwood’s capital expenditures in 2020 by over $40 million and O&M and G&A expenses by approximately $40 million on an annual run-rate basis. These cost reductions are intended to partially offset the near-term impact of record low crude oil prices and limited market access for our customers in the current market environment. Over the long term, we continue to believe that our diversified portfolio of midstream infrastructure assets and services will position Crestwood to regain the value our stakeholders have lost due to the current pandemic crisis.”
Crestwood plans to report financial results for the first quarter 2020 on Tuesday, May 5, 2020, before the New York Stock Exchange opens for trading. Following the announcement, management will host a conference call for investors and analysts at 9:00 a.m. Eastern Time (8:00 a.m. Central Time) that day to discuss the operating and financial results. Crestwood will provide an update on its operations, financial strategy, and revised 2020 guidance at that time. The call will be broadcast live over the internet via audio webcast. Investors will be able to connect to the webcast via the “Investors” page of Crestwood’s website at www.crestwoodlp.com. Please log in at least ten minutes in advance to register and download any necessary software. A replay will be available shortly after the call for 90 days.
About Crestwood Equity Partners LP
Houston, Texas, based Crestwood Equity Partners LP (NYSE: CEQP) is a master limited partnership that owns and operates midstream businesses in multiple shale resource plays across the United States. Crestwood Equity is engaged in the gathering, processing, treating, compression, storage and transportation of natural gas; storage, transportation, terminalling, and marketing of NGLs; gathering, storage, terminalling and marketing of crude oil; and gathering and disposal of produced water. Visit Crestwood Equity Partners LP at www.crestwoodlp.com; and to learn more about Crestwood’s sustainability efforts, please visit https://esg.crestwoodlp.com.
Forward Looking Statements
This press release may include certain statements concerning expectations for the future that are forward-looking statements as defined by federal securities law. Such forward-looking statements are subject to a variety of known and unknown risks, uncertainties, and other factors that are difficult to predict and many of which are beyond management’s control. These risks and assumptions are described in Crestwood’s annual reports on Form 10-K and other reports that are available from the United States Securities and Exchange Commission. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect management’s view only as of the date made. We undertake no obligation to update any forward-looking statement, except as otherwise required by law.
Tax Notice to Foreign Investors
This release serves as qualified notice to nominees under Treasury Regulation Sections 1.1446-4(b)(4) and (d). Please note that 100% of Crestwood’s distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business. Accordingly, all of Crestwood’s distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate for individuals or corporations, as applicable. Nominees, and not Crestwood, are treated as the withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.