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Organization

The accompanying notes to the consolidated financial statements apply to Crestwood Equity Partners LP and Crestwood Midstream Partners LP, unless otherwise indicated. References in this report to “we,” “us,” “our,” “ours,” “our company,” the “partnership,” the “Company,” “Crestwood Equity,” “CEQP,” and similar terms refer to either Crestwood Equity Partners LP itself or Crestwood Equity Partners LP and its consolidated subsidiaries, as the context requires. Unless otherwise indicated, references to “Crestwood Midstream” and “CMLP” refer to Crestwood Midstream Partners LP and its consolidated subsidiaries.

The accompanying consolidated financial statements and related notes should be read in conjunction with our 2019 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 21, 2020. The financial information as of June 30, 2020, and for the three and six months ended June 30, 2020 and 2019, is unaudited. The consolidated balance sheets as of December 31, 2019, were derived from the audited balance sheets filed in our 2019 Annual Report on Form 10-K.

Business Description

Crestwood Equity is a publicly-traded Delaware limited partnership that develops, acquires, owns or controls, and operates primarily fee-based assets and operations within the energy midstream sector. We provide broad-ranging infrastructure solutions across the value chain to service premier liquids-rich natural gas and crude oil shale plays across the United States. We own and operate a diversified portfolio of crude oil and natural gas gathering, processing, storage and transportation assets that connect fundamental energy supply with energy demand across the United States. Crestwood Equity is a holding company and all of its consolidated operating assets are owned by or through its wholly-owned subsidiary, Crestwood Midstream, a Delaware limited partnership.

Basis of Presentation

Our consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and include the accounts of all consolidated subsidiaries after the elimination of all intercompany accounts and transactions. In management’s opinion, all necessary adjustments to fairly present our results of operations, financial position and cash flows for the periods presented have been made and all such adjustments are of a normal and recurring nature. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP have been omitted pursuant to the rules and regulations of the SEC.

Significant Accounting Policies

There were no material changes in our significant accounting policies from those described in our 2019 Annual Report on Form 10-K. Below is an update of our accounting policies related to Goodwill and Accounts Receivable.

Goodwill

Our goodwill represents the excess of the amount we paid for a business over the fair value of the net identifiable assets acquired. We evaluate goodwill for impairment annually on December 31, and whenever events indicate that it is more likely than not that the fair value of a reporting unit could be less than its carrying amount. This evaluation requires us to compare the fair value of each of our reporting units to its carrying value (including goodwill). If the fair value exceeds the carrying amount, goodwill of the reporting unit is not considered impaired.

We estimate the fair value of our reporting units based on a number of factors, including discount rates, projected cash flows and the potential value we would receive if we sold the reporting unit. Estimating projected cash flows requires us to make

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certain assumptions as it relates to the future operating performance of each of our reporting units (which includes assumptions, among others, about estimating future operating margins and related future growth in those margins, contracting efforts and the cost and timing of facility expansions) and assumptions related to our customers, such as their future capital and operating plans and their financial condition. When considering operating performance, various factors are considered such as current and changing economic conditions and the commodity price environment, among others. Due to the imprecise nature of these projections and assumptions, actual results can and often do, differ from our estimates. If the assumptions embodied in the projections prove inaccurate, we could incur a future impairment charge. In addition, the use of the income approach to determine the fair value of our reporting units (see further discussion of the use of the income approach below) could result in a different fair value if we had utilized a market approach, or a combination thereof.

The following table summarizes the goodwill of our various reporting units (in millions):

					Impairment during the six months ended
	December 31, 2019				June 30, 2020				June 30, 2020
Gathering and Processing
Arrow	$	45.9			$	—			$	45.9
Powder River Basin	80.3				80.3				—
Marketing, Supply and Logistics
NGL Marketing and Logistics	92.7				—				92.7
Total	$	218.9			$	80.3			$	138.6

During the first quarter of 2020, current and forward commodity prices significantly declined from their levels at December 31, 2019 due primarily to the decreases in energy demand as a result of the outbreak of the COVID-19 pandemic and actions taken by the Organization of the Petroleum Exporting Countries, Russia, the United States and other oil-producing countries relating to the oversupply of oil. We currently anticipate that the decrease in commodity prices will have a negative impact on certain of our customers in our gathering and processing segment, which could adversely impact the financial performance of certain of the reporting units within those operations.

Upon acquisition, we are required to record the assets, liabilities and goodwill of a reporting unit at its fair value on the date of acquisition. As a result, any level of decrease in the forecasted cash flows of these businesses or increases in the discount rates utilized to value those businesses from their respective acquisition dates would likely result in the fair value of the reporting unit falling below the carrying value of the reporting unit, and could result in an assessment of whether that reporting unit's goodwill is impaired.

We acquired our Powder River Basin reporting unit in 2019 and recorded it at fair value at that time. Based on the events that occurred during the first quarter of 2020 described above, we determined that the forecasted cash flows, and therefore the fair value, of our Powder River Basin reporting unit significantly decreased during the first quarter of 2020, and accordingly performed a quantitative impairment assessment of the goodwill related to that reporting unit during that period. Based on our quantitative assessment, which utilized the income approach, we determined that the goodwill associated with the Powder River Basin reporting unit should be fully impaired during the first quarter of 2020, and accordingly recorded an $80.3 million impairment of the goodwill attributed to that reporting unit during the first quarter of 2020. We did not record any impairments of the goodwill associated with our Arrow or NGL Marketing and Logistics reporting units during the six months ended June 30, 2020, as we do not have indicators that it is more likely than not that the fair value of those reporting units has declined to below their carrying value at June 30, 2020.

Accounts Receivable

Effective January 1, 2020, we adopted the provision of Accounting Standards Update 2016-13, Financial Instruments - Credit Losses (Topic 326), which provides revised guidance on evaluating accounts and notes receivable and other financial instruments for impairment. We record accounts receivable when products or services are delivered and it is probable that payment will be received for those products or services, and we do not record any interest or penalties on accounts receivable that are past due under the terms of the related arrangement or invoice until those amounts are received. Topic 326 requires companies to evaluate their financial instruments for impairment by recording an allowance for doubtful accounts and/or bad debt expense based on certain categories of instruments rather than a specific identification approach. We adopted the

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provisions of this standard using a method to estimate the allowance for doubtful accounts that considered both the aging of our accounts receivable and the projected loss rate of our receivables. We write off accounts receivable, and the related allowance for doubtful accounts, when it becomes remote that payment for products or services will be received. On January 1, 2020, we recorded a $0.7 million increase to our allowance for doubtful accounts and a $0.7 million decrease to partners’ capital to reflect the cumulative effect of adopting the new standard. In addition, on January 1, 2020, Crestwood Permian Basin Holdings LLC (Crestwood Permian), our 50% equity investment, also adopted the provisions of Topic 326 and we recorded a decrease of approximately $0.2 million to our equity investment and a corresponding decrease to our partners’ capital to reflect our proportionate share of the cumulative effect of accounting change recorded by the equity investment related to the new standard. The adoption of this standard was not material to our other equity investments.

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 $160 million in our property, plant and equipment and intangible assets and an increase of approximately $2 million to our other assets and liabilities, net during the three months ended June 30, 2020. 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 for the three and six months ended June 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. This gain is included in gain on acquisition in our consolidated statements of operations.

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Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following (in millions):

	CEQP								CMLP
	June 30,				December 31,				June 30,				December 31,
	2020				2019				2020				2019
Accrued expenses	$	35.1			$	61.6			$	33.7			$	60.3
Accrued property taxes	8.2				6.1				8.2				6.1
Income tax payable	0.3				0.3				0.3				0.3
Interest payable	25.0				25.6				25.0				25.6
Accrued additions to property, plant and equipment	14.9				38.0				14.9				38.0
Contingent consideration	19.0				—				19.0				—
Operating leases	17.8				18.1				17.8				18.1
Finance leases	3.3				3.2				3.3				3.2
Deferred revenue	10.2				8.8				10.2				8.8
Total accrued expenses and other liabilities	$	133.8			$	161.7			$	132.4			$	160.4

Other Long-Term Liabilities

Other long-term liabilities consisted of the following (in millions):

	CEQP								CMLP
	June 30,				December 31,				June 30,				December 31,
	2020				2019				2020				2019
Contract liabilities	$	159.6			$	144.7			$	159.6			$	144.7
Contingent consideration	38.0				57.0				38.0				57.0
Operating leases	32.9				41.5				32.9				41.5
Asset retirement obligations	34.6				33.3				34.6				33.3
Other	20.6				25.1				18.9				19.1
Total other long-term liabilities	$	285.7			$	301.6			$	284.0			$	295.6

Variable Interest Entity

Crestwood Permian is a joint venture owned by Crestwood Infrastructure Holdings LLC (Crestwood Infrastructure), our wholly-owned subsidiary, and an affiliate of First Reserve Management, L.P. (First Reserve). We manage and account for our 50% ownership interest in Crestwood Permian, which is a variable interest entity, under the equity method of accounting as we exercise significant influence, but do not control Crestwood Permian and we are not its primary beneficiary due to First Reserve’s rights to exercise control over the entity.

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Net Investments and Earnings

Our net investments in and earnings from our unconsolidated affiliates are as follows (in millions):

	Investment								Earnings (Loss) from Unconsolidated Affiliates								Earnings (Loss) from Unconsolidated Affiliates
	June 30,				December 31,				Three Months Ended June 30,								Six Months Ended June 30,
	2020				2019				2020				2019				2020				2019
Stagecoach Gas Services LLC(1)	$	802.8			$	814.4			$	9.2			$	6.4			$	18.4			$	13.4
Crestwood Permian Basin Holdings LLC(2)	114.7				121.8				(1.0		)		(3.3		)		(0.2		)		(6.7		)
Tres Palacios Holdings LLC(3)	40.6				35.9				0.1				0.1				0.1				0.3
Powder River Basin Industrial Complex, LLC(4)	3.8				8.3				0.1				—				(4.4		)		(0.1		)
Jackalope Gas Gathering Services, L.L.C.(5)	—				—				—				0.5				—				3.7
Total	$	961.9			$	980.4			$	8.4			$	3.7			$	13.9			$	10.6

(1)	As of June 30, 2020, our equity in the underlying net assets of Stagecoach Gas Services LLC (Stagecoach Gas) exceeded our investment balance by approximately $51.3 million. This excess amount is entirely attributable to goodwill and, as such, is not subject to amortization. Our Stagecoach Gas investment is included in our storage and transportation segment.

(2)	As of June 30, 2020, our equity in the underlying net assets of Crestwood Permian exceeded our investment balance by $9.7 million, and this excess amount is not subject to amortization. Our Crestwood Permian investment is included in our gathering and processing segment.

(3)	As of June 30, 2020, our equity in the underlying net assets of Tres Palacios Holdings LLC (Tres Holdings) exceeded our investment balance by approximately $23.4 million. Our Tres Holdings investment is included in our storage and transportation segment.

(4)

As of June 30, 2020, our equity in the underlying net assets of Powder River Basin Industrial Complex, LLC (PRBIC) approximates our investment balance. During the first quarter of 2020, we recorded our share of a long-lived asset impairment recorded by our PRBIC equity investment, which eliminated our $5.5 million historical basis difference between our investment balance and the equity in the underlying net assets of PRBIC, and also resulted in a $4.5 million reduction in our earnings from unconsolidated affiliates during the six months ended June 30, 2020. Our PRBIC investment is included in our storage and transportation segment.

(5)

On April 9, 2019, Crestwood Niobrara acquired Williams 50% equity interest in Jackalope, and as a result, Crestwood Niobrara controls and owns 100% of the equity interests in Jackalope. As a result of this transaction, we eliminated our historical equity investment in Jackalope and began consolidating Jackalope’s operations. Our Jackalope investment was included in our gathering and processing segment.

Summarized Financial Information of Unconsolidated Affiliates

Below is the summarized operating results for our significant unconsolidated affiliates (in millions; amounts represent 100% of unconsolidated affiliate information):

	Six Months Ended June 30,
	2020												2019
	Operating Revenues				Operating Expenses				Net Income (Loss)				Operating Revenues				Operating Expenses				Net Income (Loss)
Stagecoach Gas	$	75.6			$	38.9			$	36.8			$	79.1			$	40.4			$	38.9
Other(1)	53.5				76.1				(21.6		)		55.4				62.2				(7.9		)
Total	$	129.1			$	115.0			$	15.2			$	134.5			$	102.6			$	31.0

(1)

Includes our Crestwood Permian, Tres Holdings and PRBIC equity investments during the six months ended June 30, 2020 and 2019, and our Jackalope equity investment during the six months ended June 30, 2019 (prior to the acquisition of the remaining 50% equity interest from Williams in April 2019). We amortize the excess basis in certain of our equity investments as an increase in our earnings from unconsolidated affiliates. We recorded amortization of the excess basis in our Tres Holdings equity investment of $0.6 million during both the six months ended June 30, 2020 and 2019. We recorded amortization of the excess basis in our PRBIC equity investment of $0.2 million during the six months ended June 30, 2019. We recorded amortization of the excess basis in the Jackalope equity investment of less than $0.1 million during the six months ended June 30, 2019.

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Distributions and Contributions

The following table summarizes our distributions from and contributions to our unconsolidated affiliates (in millions):

		Distributions(1)								Contributions
		Six Months Ended June 30,								Six Months Ended June 30,
		2020				2019				2020				2019
Stagecoach Gas		$	30.0			$	25.4			$	—			$	—
Crestwood Permian		6.7				2.9				—				10.0
Tres Holdings		1.4				1.2				6.0				6.3
PRBIC		0.1				—				—				0.2
Jackalope		—				11.6				—				24.4
Total		$	38.2			$	41.1			$	6.0			$	40.9

(1)	In July 2020, we received cash distributions from Stagecoach Gas, Crestwood Permian and Tres Holdings of approximately $14.5 million, $1.8 million and $3.0 million, respectively.

Other

Contingent Consideration. Pursuant to the Stagecoach Gas limited liability company agreement, we may be required to make payments of up to $57 million to Con Edison Gas Pipeline and Storage Northeast, LLC after December 31, 2020 if certain criteria are not met by Stagecoach Gas by December 31, 2020, including achieving certain performance targets on growth capital projects. These growth capital projects depend on the construction of third-party expansion projects, and those third-party projects experienced regulatory and other delays that caused Stagecoach Gas to delay its growth capital projects. As a result, our consolidated balance sheet at June 30, 2020 reflects a $19 million current liability included in accrued expenses and other liabilities and a $38 million other long-term liability related to the anticipated settlement of this obligation.

We are exposed to certain market risks related to our ongoing business operations. These risks include exposure to changing commodity prices. We utilize derivative instruments to manage our exposure to fluctuations in commodity prices, which is discussed below. Additional information related to our derivatives is discussed in Note 7.

Commodity Derivative Instruments and Price Risk Management

Risk Management Activities

We sell NGLs (such as propane, ethane, butane and heating oil), crude oil and natural gas to energy-related businesses and may use a variety of financial and other instruments including forward contracts involving physical delivery of NGLs, crude oil and natural gas. We periodically enter into offsetting positions to economically hedge against the exposure our customer contracts create. Certain of these contracts and positions are derivative instruments. We do not designate any of our commodity-based derivatives as hedging instruments for accounting purposes. Our commodity-based derivatives are reflected at fair value in our consolidated balance sheets, and changes in the fair value of these derivatives that impact the consolidated statements of operations are reflected in costs of product/services sold. Our commodity-based derivatives that are settled with physical commodities are reflected as an increase to product revenues, and the commodity inventory that is utilized to satisfy those physical obligations is reflected as an increase to costs of product sold in our consolidated statements of operations. The following table summarizes the impact to our consolidated statements of operations related to our commodity-based derivatives reflected in operating revenues and costs of product/services sold during the three and six months ended June 30, 2020 and 2019 (in millions):

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		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2020				2019				2020				2019
Product revenues		$	18.0			$	40.2			$	93.0			$	144.3
Gain reflected in costs of product/services sold		$	6.8			$	9.9			$	28.8			$	7.0

We attempt to balance our contractual portfolio in terms of notional amounts and timing of performance and delivery obligations. This balance in the contractual portfolio significantly reduces the volatility in costs of product/services sold related to these instruments.

Commodity Price and Credit Risk

Notional Amounts and Terms

The notional amounts and terms of our derivative financial instruments include the following:

	June 30, 2020						December 31, 2019
	Fixed Price Payor			Fixed Price Receiver			Fixed Price Payor			Fixed Price Receiver
Propane, ethane, butane, heating oil and crude oil (MMBbls)	64.4			69.8			33.5			36.6
Natural gas (Bcf)	10.2			17.5			3.7			8.7

Notional amounts reflect the volume of transactions, but do not represent the amounts exchanged by the parties to the financial instruments. Accordingly, notional amounts do not reflect our monetary exposure to market or credit risks. All contracts subject to price risk had a maturity of 37 months or less; however, 83% of the contracted volumes will be delivered or settled within 12 months.

Credit Risk

Inherent in our contractual portfolio are certain credit risks. Credit risk is the risk of loss from nonperformance by suppliers, customers or financial counterparties to a contract. We take an active role in managing credit risk and have established control procedures, which are reviewed on an ongoing basis. For example, in June 2020, Chesapeake Energy Corporation (Chesapeake), our major customer in the Powder River Basin, filed for protection under Chapter 11 of the U.S. Bankruptcy Code and in July 2020, Bruin E&P Partners, LLC (Bruin), our major customer in the Bakken also filed for protection under Chapter 11 of the U.S. Bankruptcy Code.  Chesapeake and Bruin were current on all amounts due to us as of June 30, 2020 and we obtained letters of credit from Chesapeake to provide additional cash flow protection related to their credit risk. We attempt to minimize credit risk exposure through credit policies and periodic monitoring procedures as well as through customer deposits, letters of credit and entering into netting agreements that allow for offsetting counterparty receivable and payable balances for certain financial transactions, as deemed appropriate. The counterparties associated with our price risk management activities are energy marketers and propane retailers, resellers and dealers.

Certain of our derivative instruments have credit limits that require us to post collateral. The amount of collateral required to be posted is a function of the net liability position of the derivative as well as our established credit limit with the respective counterparty. If our credit rating were to change, the counterparties could require us to post additional collateral. The amount of additional collateral that would be required to be posted would vary depending on the extent of change in our credit rating as well as the requirements of the individual counterparty. In addition, we have margin requirements with a New York Mercantile Exchange (NYMEX) broker related to our net asset or liability position with such broker. All collateral amounts have been netted against the asset or liability with the respective counterparty and are reflected in our consolidated balance sheets as assets and liabilities from price risk management activities.

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The following table presents the fair value of our commodity derivative instruments with credit-risk related contingent features and their associated collateral (in millions):

	June 30, 2020				December 31, 2019
Aggregate fair value of derivative instruments with credit-risk-related contingent features(1)	$	20.3			$	1.6
NYMEX-related net derivative asset (liability) position	$	1.9			$	(28.8	)
NYMEX-related cash collateral posted	$	26.8			$	40.4
Cash collateral received, net	$	21.1			$	16.9

(1)	At June 30, 2020 and December 31, 2019, we posted less than $0.1 million of collateral associated with these derivatives.

The accounting standard for fair value measurement establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows:

•

Level 1—Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, listed equities and US government treasury securities.

•

Level 2—Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category include non-exchange-traded derivatives such as over the counter (OTC) forwards, options and physical exchanges.

•	Level 3—Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.

Cash, Accounts Receivable and Accounts Payable

As of June 30, 2020 and December 31, 2019, the carrying amounts of cash, accounts receivable and accounts payable approximate fair value based on the short-term nature of these instruments.

Credit Facility

The fair value of the amounts outstanding under our Crestwood Midstream credit facility approximates the carrying amounts as of June 30, 2020 and December 31, 2019, due primarily to the variable nature of the interest rate of the instrument, which is considered a Level 2 fair value measurement.

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Senior Notes

We estimate the fair value of our senior notes primarily based on quoted market prices for the same or similar issuances (representing a Level 2 fair value measurement). The following table represents the carrying amount (reduced for deferred financing costs associated with the respective notes) and fair value of our senior notes (in millions):

	June 30, 2020								December 31, 2019
	Carrying  Amount				Fair Value				Carrying  Amount				Fair Value
2023 Senior Notes	$	695.9			$	623.0			$	695.1			$	714.0
2025 Senior Notes	$	495.0			$	435.0			$	494.4			$	514.4
2027 Senior Notes	$	592.6			$	499.2			$	592.1			$	610.1

Financial Assets and Liabilities

As of June 30, 2020 and December 31, 2019, we held certain assets and liabilities that are required to be measured at fair value on a recurring basis, which include our derivative instruments related to heating oil, crude oil, NGLs and natural gas. Our derivative instruments consist of forwards, swaps, futures, physical exchanges and options.

Our derivative instruments that are traded on the NYMEX have been categorized as Level 1.

Our derivative instruments also include OTC contracts, which are not traded on a public exchange. The fair values of these derivative instruments are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. These instruments have been categorized as Level 2.

Our OTC options are valued based on the Black Scholes option pricing model that considers time value and volatility of the underlying commodity. The inputs utilized in the model are based on publicly available information as well as broker quotes. These options have been categorized as Level 2.

Our financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

The following tables set forth by level within the fair value hierarchy, our financial instruments that were accounted for at fair value on a recurring basis at June 30, 2020 and December 31, 2019 (in millions):

	June 30, 2020
	Level 1				Level 2				Level 3				Gross Fair Value				Contract Netting(1)				Collateral/Margin Received or Paid				Fair Value
Assets
Assets from price risk management	$	26.2			$	187.8			$	—			$	214.0			$	(186.3	)		$	16.7			$	44.4
Suburban Propane Partners, L.P. units(2)	2.0				—				—				2.0				—				—				2.0
Total assets at fair value	$	28.2			$	187.8			$	—			$	216.0			$	(186.3	)		$	16.7			$	46.4
Liabilities
Liabilities from price risk management	$	29.7			$	177.8			$	—			$	207.5			$	(186.3	)		$	11.0			$	32.2
Total liabilities at fair value	$	29.7			$	177.8			$	—			$	207.5			$	(186.3	)		$	11.0			$	32.2

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	December 31, 2019
	Level 1				Level 2				Level 3				Gross Fair Value				Contract Netting(1)				Collateral/Margin Received or Paid				Fair Value
Assets
Assets from price risk management	$	3.7			$	164.0			$	—			$	167.7			$	(122.3	)		$	(2.2	)		$	43.2
Suburban Propane Partners, L.P. units(2)	3.1				—				—				3.1				—				—				3.1
Total assets at fair value	$	6.8			$	164.0			$	—			$	170.8			$	(122.3	)		$	(2.2	)		$	46.3
Liabilities
Liabilities from price risk management	$	2.8			$	151.9			$	—			$	154.7			$	(122.3	)		$	(25.7	)		$	6.7
Total liabilities at fair value	$	2.8			$	151.9			$	—			$	154.7			$	(122.3	)		$	(25.7	)		$	6.7

(1)	Amounts represent the impact of legally enforceable master netting agreements that allow us to settle positive and negative positions.

(2)	Amount is reflected in other assets on CEQP’s consolidated balance sheets.

Long-term debt consisted of the following at June 30, 2020 and December 31, 2019 (in millions):

	June 30, 2020				December 31, 2019
Credit Facility	$	801.2			$	557.0
2023 Senior Notes	700.0				700.0
2025 Senior Notes	500.0				500.0
2027 Senior Notes	600.0				600.0
Other	0.6				0.6
Less: deferred financing costs, net	25.9				29.1
Total debt	2,575.9				2,328.5
Less: current portion	0.2				0.2
Total long-term debt, less current portion	$	2,575.7			$	2,328.3

Credit Facility

At June 30, 2020, Crestwood Midstream had $424.9 million of available capacity under its credit facility considering the most restrictive debt covenants in its credit agreement. At June 30, 2020 and December 31, 2019, Crestwood Midstream’s outstanding standby letters of credit were $23.9 million and $31.7 million. Borrowings under the credit facility accrue interest at prime or Eurodollar based rates plus applicable spreads, which resulted in interest rates between 2.43% and 4.50% at June 30, 2020 and 3.96% and 6.00% at December 31, 2019. The weighted-average interest rate on outstanding borrowings as of June 30, 2020 and December 31, 2019 was 2.44% and 4.00%.

Crestwood Midstream is required under its credit agreement to maintain a net debt to consolidated EBITDA ratio (as defined in its credit agreement) of not more than 5.50 to 1.0, a consolidated EBITDA to consolidated interest expense ratio (as defined in its credit agreement) of not less than 2.50 to 1.0, and a senior secured leverage ratio (as defined in its credit agreement) of not more than 3.75 to 1.0. At June 30, 2020, the net debt to consolidated EBITDA ratio was approximately 4.16 to 1.0, the consolidated EBITDA to consolidated interest expense ratio was approximately 4.62 to 1.0, and the senior secured leverage ratio was 1.28 to 1.0.

Senior Notes

In April 2019, Crestwood Midstream issued $600 million of 5.625% unsecured senior notes due 2027 (the 2027 Senior Notes). The 2027 Senior Notes mature on May 1, 2027, and interest is payable semi-annually in arrears on May 1 and November 1 of each year, beginning on November 1, 2019. The net proceeds from this offering of approximately $591.1 million were used to

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repay a portion of the outstanding borrowings under our credit facility, which included approximately $250 million which was used to fund the acquisition of the remaining 50% equity interest in Jackalope.

Our net income (loss) attributable to Crestwood Equity Partners is allocated to the subordinated and limited partner unitholders based on their ownership percentage after giving effect to net income attributable to the preferred units. We calculate basic net income per limited partner unit using the two-class method. Diluted net income per limited partner unit is computed using the treasury stock method, which considers the impact to net income attributable to Crestwood Equity Partners and limited partner units from the potential issuance of limited partner units.

We exclude potentially dilutive securities from the determination of diluted earnings per unit (as well as their related income statement impacts) when their impact on net income attributable to Crestwood Equity Partners per limited partner unit is anti-dilutive. The following table summarizes information regarding the weighted-average of common units excluded during the three and six months ended June 30, 2020 and 2019 (in millions):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2019			2020			2019
Preferred units (1)	7.1			—			7.1			7.1
Crestwood Niobrara’s preferred units(1)	8.2			—			8.2			—
Unit-based compensation performance units(1)	0.2			—			0.3			—
Subordinated units(1)	0.4			—			0.4			—

(1)	For additional information regarding the potential conversion/redemption of our preferred units and Crestwood Niobrara’s preferred units to CEQP common units, and of our performance units and subordinated units, see our 2019 Annual Report on Form 10-K.

The table below shows CEQP’s net income per limited partner unit based on the number of basic and diluted limited partner units outstanding for the three and six months ended June 30, 2020 and 2019 (in millions, except for per unit data):

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2020				2019				2020				2019
Common unitholders’ interest in net income (loss)		$	(49.5	)		$	198.2			$	(97.8	)		$	193.3
Dilutive effect of net income attributable to preferred units		—				15.0				—				—
Dilutive effect of net income attributable to subordinated units		—				1.2				—				1.2
Diluted net income (loss)		$	(49.5	)		$	214.4			$	(97.8	)		$	194.5
Weighted-average limited partners’ units outstanding - basic		73.2				71.8				73.0				71.8
Dilutive effect of preferred units		—				7.1				—				—
Dilutive effect of Crestwood Niobrara preferred units		—				3.4				—				4.5
Dilutive effect of stock-based compensation performance units		—				0.3				—				0.3
Dilutive effect of subordinated units		—				0.4				—				0.4
Weighted-average limited partners’ units outstanding - diluted		73.2				83.0				73.0				77.0
Basic earnings per unit:
Net income (loss) per limited partner unit		$	(0.68	)		$	2.76			$	(1.34	)		$	2.69
Diluted earnings per unit:
Net income (loss) per limited partner unit		$	(0.68	)		$	2.58			$	(1.34	)		$	2.53

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Common Units

Effective April 1, 2020, we suspended the equity distribution program with certain financial institutions under which we were allowed to offer and sell, from time to time through one or more of these financial institutions, common units having an aggregate offering price of up to $250 million. We did not issue any common units under this program during the six months ended June 30, 2020 and 2019.

Distributions

Crestwood Equity

Limited Partners. A summary of CEQP’s limited partner quarterly cash distributions for the six months ended June 30, 2020 and 2019 is presented below:

Record Date		Payment Date		Per Unit Rate				Cash Distributions (in millions)
2020
February 7, 2020		February 14, 2020		$	0.625			$	45.3
May 8, 2020		May 15, 2020		0.625				45.7
								$	91.0
2019
February 7, 2019		February 14, 2019		$	0.60			$	43.1
May 8, 2019		May 15, 2019		0.60				43.1
								$	86.2

On July 16, 2020, we declared a distribution of $0.625 per limited partner unit to be paid on August 14, 2020 to unitholders of record on August 7, 2020 with respect to the quarter ended June 30, 2020.

Preferred Unitholders. During the six months ended June 30, 2020 and 2019, we made cash distributions to our preferred unitholders of approximately $30.0 million in both periods. On July 16, 2020, the board of directors of our general partner authorized a cash distribution to our preferred unitholders of approximately $15.0 million for the quarter ended June 30, 2020.

Crestwood Midstream

During the six months ended June 30, 2020 and 2019, Crestwood Midstream paid cash distributions of $119.0 million and $117.5 million to Crestwood Equity.

Non-Controlling Partner

Crestwood Niobrara issued preferred interests to Jackalope Holdings, which are reflected as non-controlling interest in subsidiary apart from partners’ capital (i.e., temporary equity) on our consolidated balance sheets. In April 2019, Crestwood Niobrara issued $235 million in new preferred interests (Series A-3 Preferred Units) to Jackalope Holdings in conjunction with Crestwood Niobrara’s acquisition of the remaining 50% equity interest in Jackalope from Williams, at which time we began classifying our non-controlling interest in subsidiary apart from partners’ capital. 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, 2020 and 2019 (in millions):

Balance at December 31, 2019		$	426.2
Contributions from non-controlling partner		2.8
Distributions to non-controlling partner		(18.5		)
Net income attributable to non-controlling partner		20.1
Balance at June 30, 2020		$	430.6

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Balance at December 31, 2018		$	—
Reclassification of Series A-2 Preferred Units		178.8
Issuance of Series A-3 Preferred Units		235.0
Net income attributable to non-controlling partner		10.6
Balance at June 30, 2019		$	424.4

Crestwood Niobrara makes quarterly cash distributions on its preferred interests within 30 days after the end of each quarter. During the six months ended June 30, 2020 and 2019, Crestwood Niobrara paid cash distributions of $18.5 million and $6.6 million to Jackalope Holdings. In July 2020, Crestwood Niobrara paid cash distributions to Jackalope Holdings of approximately$9.3 million for the quarter ended June 30, 2020. During the six months ended June 30, 2020, we received contributions of $2.8 million from our non-controlling partner to fund our Jackalope expansion projects.

Other

In February 2020, Crestwood Equity issued 184,528 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, 2020, we had total unamortized compensation expense of approximately $3.7 million related to these performance units, which we expect will be amortized during the next three years. During the three and six months ended June 30, 2020, we recognized compensation expense of approximately $0.6 million and $0.8 million related to these performance units, which is included in general and administrative expenses on our consolidated statements of operations.

Legal Proceedings

Linde Lawsuit. On December 23, 2019, Linde Engineering North America Inc. (Linde) filed a lawsuit in the District Court of Harris County, Texas alleging that Arrow Field Services, LLC, our consolidated subsidiary, and Crestwood Midstream breached a contract entered into in March 2018 under which Linde was to provide engineering, procurement and construction services to us related to the completion of the construction of the Bear Den II cryogenic processing plant. Linde claims damages of $55 million in unpaid invoices and other damages. This matter is not an insurable event based on our insurance policies, and we are unable to predict the outcome for this matter.

General. We are periodically involved in litigation proceedings. If we determine that a negative outcome is probable and the amount of loss is reasonably estimable, then we accrue the estimated amount. The results of litigation proceedings cannot be predicted with certainty. We could incur judgments, enter into settlements or revise our expectations regarding the outcome of certain matters, and such developments could have a material adverse effect on our results of operations or cash flows in the period in which the amounts are paid and/or accrued. As of June 30, 2020 and December 31, 2019, we had approximately $10.9 million and $10.7 million accrued for outstanding legal matters. Based on currently available information, we believe it is remote that future costs related to known contingent liability exposures for which we can estimate will exceed current accruals by an amount that would have a material adverse impact on our consolidated financial statements. As we learn new facts concerning contingencies, we reassess our position both with respect to accrued liabilities and other potential exposures.

Any loss estimates are inherently subjective, based on currently available information, and are subject to management’s judgment and various assumptions. Due to the inherently subjective nature of these estimates and the uncertainty and unpredictability surrounding the outcome of legal proceedings, actual results may differ materially from any amounts that have been accrued.

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Regulatory Compliance

In the ordinary course of our business, we are subject to various laws and regulations. In the opinion of our management, compliance with current laws and regulations will not have a material effect on our results of operations, cash flows or financial condition.

Environmental Compliance

Our operations are subject to stringent and complex laws and regulations pertaining to worker health, safety, and the environment. We are subject to laws and regulations at the federal, state, regional and local levels that relate to air and water quality, hazardous and solid waste management and disposal, and other environmental matters. The cost of planning, designing, constructing and operating our facilities must incorporate compliance with environmental laws and regulations and safety standards. Failure to comply with these laws and regulations may trigger a variety of administrative, civil and potentially criminal enforcement measures.

During 2014, we experienced three releases totaling approximately 28,000 barrels of produced water on our Arrow water gathering system located on the Fort Berthold Indian Reservation in North Dakota. We immediately notified the National Response Center, the Three Affiliated Tribes and numerous other regulatory authorities. Thereafter, we contained and cleaned up the releases, and placed the impacted segments of these water lines back into service. In May 2015, we experienced a release of approximately 5,200 barrels of produced water on our Arrow water gathering system, immediately notified numerous regulatory authorities and other third parties, and thereafter contained and cleaned up the releases.

In August 2015, we received a notice of violation from the Three Affiliated Tribes’ Environmental Division related to our 2014 produced water releases on the Fort Berthold Indian Reservation. The notice of violation imposes fines and requests reimbursements exceeding $1.1 million; however, the notice of violation was stayed on September 15, 2015. Our discussions regarding the notice of violation continue with the Three Affiliated Tribes.

During September 2019, we experienced two produced water releases totaling approximately 5,000 barrels on our Arrow system located on the Fort Berthold Indian Reservation in North Dakota.  We immediately notified the National Response Center, the State of North Dakota, the Three Affiliated Tribes, affected landowners and numerous other regulatory authorities. We are substantially complete with the remediation efforts and continue to monitor the impact of both spills.

In response to the water releases on our Arrow system, we removed approximately 30 miles of water gathering pipeline from service. In addition, we are currently in the process of replacing certain sections of our water gathering pipeline with pipeline composed of higher capacity material that is more suitable to the environment and climate conditions in the Bakken, which will increase water gathering capacity on the Arrow system and further our commitment to sustainability and environmental stewardship in the areas where we live and operate.

We will continue our remediation efforts to ensure the impacted lands are restored to their prior state. We believe these releases are insurable events under our policies, and we have notified our carriers of these events. We have not recorded an insurance receivable as of June 30, 2020.

At June 30, 2020 and December 31, 2019, our accrual of approximately $3.8 million and $6.7 million was based on our undiscounted estimate of amounts we will spend on compliance with environmental and other regulations, and any associated fines or penalties. We estimate that our potential liability for reasonably possible outcomes related to our environmental exposures could range from approximately $3.8 million to $8.0 million at June 30, 2020.

Self-Insurance

We utilize third-party insurance subject to varying retention levels of self-insurance, which management considers prudent. Such self-insurance relates to losses and liabilities primarily associated with medical claims, workers’ compensation claims and general, product, vehicle and environmental liability. Losses are accrued based upon management’s estimates of the aggregate liability for claims incurred using certain assumptions followed in the insurance industry and based on past experience. The primary assumption utilized is actuarially determined loss development factors. The loss development factors are based primarily on historical data. Our self insurance reserves could be affected if future claim developments differ from the historical trends. We believe changes in health care costs, trends in health care claims of our employee base, accident frequency and severity and other factors could materially affect the estimate for these liabilities. We continually monitor changes in employee demographics, incident and claim type and evaluate our insurance accruals and adjust our accruals based on our

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evaluation of these qualitative data points. We are liable for the development of claims for our disposed retail propane operations, provided they were reported prior to August 1, 2012. The following table summarizes CEQP’s and CMLP’s self-insurance reserves at June 30, 2020 and December 31, 2019 (in millions):

	CEQP								CMLP
	June 30, 2020				December 31, 2019				June 30, 2020				December 31, 2019
Self-insurance reserves(1)	$	9.4			$	9.7			$	8.3			$	8.3

(1)	At June 30, 2020, CEQP and CMLP classified approximately $6.2 million and $5.2 million, respectively of these reserves as other long-term liabilities on their consolidated balance sheets.

Leases

The following table summarizes the balance sheet information related to our operating and finance leases at June 30, 2020 and December 31, 2019 (in millions):

	June 30,				December 31,
	2020				2019
Operating Leases
Operating lease right-of-use assets, net	$	44.2			$	53.8
Accrued expenses and other liabilities	$	17.8			$	18.1
Long-term operating lease liabilities	32.9				41.5
Total operating lease liabilities	$	50.7			$	59.6
Finance Leases
Property, plant and equipment	$	14.9			$	14.9
Less: accumulated depreciation	7.2				5.4
Property, plant and equipment, net	$	7.7			$	9.5
Accrued expenses and other liabilities	$	3.3			$	3.2
Other long-term liabilities	3.6				5.2
Total finance lease liabilities	$	6.9			$	8.4

Lease expense. Our operating lease expense, net totaled $7.1 million and $7.3 million for the three months ended June 30, 2020 and 2019 and $14.6 million for both the six months ended June 30, 2020 and 2019. Our finance lease expense totaled $1.1 million for both the three months ended June 30, 2020 and 2019 and $2.2 million for both the six months ended June 30, 2020 and 2019.

Guarantees and Indemnifications

We are involved in various joint ventures that sometimes require financial and performance guarantees. In a financial guarantee, we are obligated to make payments if the guaranteed party fails to make payments under, or violates the terms of, the financial arrangement. In a performance guarantee, we provide assurance that the guaranteed party will execute on the terms of the contract. If they do not, we are required to perform on their behalf. We also periodically provide indemnification arrangements related to assets or businesses we have sold. For a further description of our guarantees associated with our joint ventures, see Note 5.

Our potential exposure under guarantee and indemnification arrangements can range from a specified amount to an unlimited dollar amount, depending on the nature of the claim, specificity as to duration, and the particular transaction. As of June 30, 2020 and December 31, 2019, we have no amounts accrued for these guarantees.

Crestwood Holdings LLC (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, including gas gathering and processing services, product purchases, marketing

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services and various operating agreements. We also enter into transactions with our affiliates related to services provided on our expansion projects. During the six months ended June 30, 2020 and 2019, we paid approximately $2.9 million and $5.1 million of capital expenditures to Applied Consultants, Inc., an affiliate of Crestwood Holdings.

The following table shows transactions with our affiliates which are reflected in our consolidated statements of operations (in millions). For a further description of our related party agreements, see our 2019 Annual Report on Form 10-K.

	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2020				2019				2020				2019
Revenues at CEQP and CMLP(1)	$	7.5			$	1.3			$	15.0			$	2.5
Costs of product/services sold at CEQP and CMLP(2)	$	3.6			$	0.9			$	6.8			$	35.3
Operations and maintenance expenses charged by CEQP and CMLP(3)	$	5.5			$	5.9			$	11.7			$	13.4
General and administrative expenses charged by CEQP to CMLP, net(4)	$	10.9			$	10.1			$	18.0			$	21.1
General and administrative expenses at CEQP charged to (from) Crestwood Holdings, net(5)	$	(1.5	)		$	(0.1	)		$	11.3			$	(5.3	)

(1)	Includes $7.5 million and $15.0 million during the three and six months ended June 30, 2020 related to the sale of NGLs to a subsidiary of Crestwood Permian and $1.3 million and $2.5 million during the three and six months ended June 30, 2019 related to the sale of natural gas to a subsidiary of Stagecoach Gas.

(2)

Includes (i) $3.2 million and $6.4 million during the three and six months ended June 30, 2020 and $0.9 million and $9.1 million during the three and six months ended June 30, 2019 related to purchases of NGLs from a subsidiary of Crestwood Permian; (ii) $0.1 million during both the three and six months ended June 30, 2020 related to purchases from a subsidiary of Tres Palacios Holdings, (iii) less than $0.1 million and $2.3 million during the three and six months ended June 30, 2019 related to purchases of natural gas from a subsidiary of Stagecoach Gas; and (iv) $0.3 million during both the three and six months ended June 30, 2020 and less than $0.1 million and $23.9 million during the three and six months ended June 30, 2019 related to an agency marketing agreement with Ascent Resources - Utica, LLC, an affiliate of Crestwood Holdings.

(3)

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 three and six months ended June 30, 2020, we charged $1.6 million and $3.3 million to Stagecoach Gas, $1.1 million and $2.2 million to Tres Palacios, and $2.8 million and $6.2 million to Crestwood Permian under these agreements. During the three and six months ended June 30, 2019, we charged $1.9 million and $3.9 million to Stagecoach Gas, $1.0 million and $2.2 million to Tres Palacios, and $3.0 million and $6.8 million to Crestwood Permian. During the six months ended June 30, 2019, we charged $0.5 million to Jackalope under an operating agreement prior to our acquisition of the remaining 50% equity interest in Jackalope in Williams.

(4)

Includes $11.9 million and $20.1 million of unit-based compensation charges allocated from CEQP to CMLP for the three and six months ended June 30, 2020 and $11.0 million and $22.9 million for the three and six months ended June 30, 2019. In addition, includes $1.0 million and $2.1 million of CMLP’s general and administrative costs allocated to CEQP during the three and six months ended June 30, 2020 and $0.9 million and $1.8 million during the three and six months ended June 30, 2019.

(5)

Includes $1.7 million of unit-based compensation charges allocated from Crestwood Holdings to CEQP and CMLP during the three months ended June 30, 2020, a $10.9 million reduction of unit-based compensation charges allocated from Crestwood Holdings to CEQP and CMLP during the six months ended June 30, 2020 and $0.2 million and $5.6 million of unit-based compensation charges allocated from Crestwood Holdings to CEQP and CMLP during the three and six months ended June 30, 2019. In addition, includes $0.2 million and $0.4 million of CEQP’s general and administrative costs allocated to Crestwood Holdings during the three and six months ended June 30, 2020 and $0.1 million and $0.3 million during the three and six months ended June 30, 2019.

The following table shows accounts receivable and accounts payable with our affiliates (in millions):

	June 30, 2020				December 31, 2019
Accounts receivable at CEQP and CMLP	$	10.9			$	7.3
Accounts payable at CEQP	$	6.9			$	15.6
Accounts payable at CMLP	$	4.5			$	13.1

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Financial Information

We have three operating and reportable segments: (i) gathering and processing operations; (ii) storage and transportation operations; and (iii) marketing, supply and logistics operations. Our corporate operations include all general and administrative expenses that are not allocated to our reportable segments. We assess the performance of our operating segments based on EBITDA, which is defined as income before income taxes, plus interest and debt expense, net and depreciation, amortization and accretion expense.

Below is a reconciliation of CEQP’s net income (loss) to EBITDA (in millions):

	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2020				2019				2020				2019
Net income (loss)	$	(24.3	)		$	225.0			$	(47.7	)		$	239.1
Add:
Interest and debt expense, net	34.0				27.8				66.6				52.7
Provision (benefit) for income taxes	(0.1		)		0.3				(0.1		)		0.3
Depreciation, amortization and accretion	61.0				49.3				117.1				89.1
EBITDA	$	70.6			$	302.4			$	135.9			$	381.2

Below is a reconciliation of CMLP’s net income (loss) to EBITDA (in millions):

	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2020				2019				2020				2019
Net income (loss)	$	(26.8	)		$	222.9			$	(52.4	)		$	234.5
Add:
Interest and debt expense, net	34.0				27.8				66.6				52.7
Provision (benefit) for income taxes	(0.2		)		0.3				(0.2		)		0.3
Depreciation, amortization and accretion	64.6				52.7				124.2				96.1
EBITDA	$	71.6			$	303.7			$	138.2			$	383.6

The following tables summarize CEQP’s and CMLP’s reportable segment data for the three and six months ended June 30, 2020 and 2019 (in millions). Intersegment revenues included in the following tables are accounted for as arms-length transactions that apply our revenue recognition policies as described in our 2019 Annual Report on Form 10-K. Included in earnings from unconsolidated affiliates, net below was approximately $9.5 million and $10.3 million of our proportionate share of interest expense, depreciation and amortization expense and gains (losses) on long-lived assets, net recorded by our equity investments for the three months ended June 30, 2020 and 2019 and $23.3 million and $23.0 million for the six months ended June 30, 2020 and 2019.

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Crestwood Equity

	Three Months Ended June 30, 2020
	Gathering and Processing				Storage and Transportation				Marketing, Supply and Logistics				Corporate				Total
Revenues	$	114.5			$	3.1			$	235.1			$	—			$	352.7
Intersegment revenues	14.3				2.4				(16.7		)		—				—
Costs of product/services sold	21.3				0.1				204.3				—				225.7
Operations and maintenance expense	19.3				0.7				11.6				—				31.6
General and administrative expense	—				—				—				29.5				29.5
Loss on long-lived assets, net	(3.6		)		—				(0.2		)		—				(3.8		)
Earnings (loss) from unconsolidated affiliates, net	(1.0		)		9.4				—				—				8.4
Other income, net	—				—				—				0.1				0.1
EBITDA	$	83.6			$	14.1			$	2.3			$	(29.4	)		$	70.6
Goodwill	$	45.9			$	—			$	92.7			$	—			$	138.6
Total assets	$	3,589.8			$	964.7			$	736.9			$	32.3			$	5,323.7

	Three Months Ended June 30, 2019
	Gathering and Processing				Storage and Transportation				Marketing, Supply and Logistics				Corporate				Total
Revenues	$	199.7			$	4.9			$	478.8			$	—			$	683.4
Intersegment revenues	25.4				3.2				(28.6		)		—				—
Costs of product/services sold	108.9				—				428.3				—				537.2
Operations and maintenance expense	24.6				0.9				9.2				—				34.7
General and administrative expense	—				—				—				22.3				22.3
Gain (loss) on long-lived assets, net	(0.2		)		—				—				0.2				—
Gain on acquisition	209.4				—				—				—				209.4
Earnings (loss) from unconsolidated affiliates, net	(2.8		)		6.5				—				—				3.7
Other income, net	—				—				—				0.1				0.1
EBITDA	$	298.0			$	13.7			$	12.7			$	(22.0	)		$	302.4

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	Six Months Ended June 30, 2020
	Gathering and Processing				Storage and Transportation				Marketing, Supply and Logistics				Corporate				Total
Revenues	$	329.4			$	6.6			$	744.6			$	—			$	1,080.6
Intersegment revenues	54.3				5.0				(59.3		)		—				—
Costs of product/services sold	129.6				0.3				630.2				—				760.1
Operations and maintenance expense	46.3				2.1				20.8				—				69.2
General and administrative expense	—				—				—				44.4				44.4
Loss on long-lived assets, net	(4.6		)		—				(0.2		)		—				(4.8		)
Goodwill impairment	(80.3		)		—				—				—				(80.3		)
Earnings (loss) from unconsolidated affiliates, net	(0.2		)		14.1				—				—				13.9
Other income, net	—				—				—				0.2				0.2
EBITDA	$	122.7			$	23.3			$	34.1			$	(44.2	)		$	135.9
Goodwill	$	45.9			$	—			$	92.7			$	—			$	138.6
Total assets	$	3,589.8			$	964.7			$	736.9			$	32.3			$	5,323.7

	Six Months Ended June 30, 2019
	Gathering and Processing				Storage and Transportation				Marketing, Supply and Logistics				Corporate				Total
Revenues	$	382.0			$	12.7			$	1,123.9			$	—			$	1,518.6
Intersegment revenues	78.2				6.8				(85.0		)		—				—
Costs of product/services sold	246.9				—				985.9				—				1,232.8
Operations and maintenance expense	42.7				1.9				18.7				—				63.3
General and administrative expense	—				—				—				59.5				59.5
Gain (loss) on long-lived assets, net	(2.0		)		—				(0.2		)		0.2				(2.0		)
Gain on acquisition	209.4				—				—				—				209.4
Earnings (loss) from unconsolidated affiliates, net	(3.0		)		13.6				—				—				10.6
Other income, net	—				—				—				0.2				0.2
EBITDA	$	375.0			$	31.2			$	34.1			$	(59.1	)		$	381.2

Crestwood Midstream

	Three Months Ended June 30, 2020
	Gathering and Processing				Storage and Transportation				Marketing, Supply and Logistics				Corporate				Total
Revenues	$	114.5			$	3.1			$	235.1			$	—			$	352.7
Intersegment revenues	14.3				2.4				(16.7		)		—				—
Costs of product/services sold	21.3				0.1				204.3				—				225.7
Operations and maintenance expense	19.3				0.7				11.6				—				31.6
General and administrative expense	—				—				—				28.4				28.4
Loss on long-lived assets, net	(3.6		)		—				(0.2		)		—				(3.8		)
Earnings (loss) from unconsolidated affiliates, net	(1.0		)		9.4				—				—				8.4
EBITDA	$	83.6			$	14.1			$	2.3			$	(28.4	)		$	71.6
Goodwill	$	45.9			$	—			$	92.7			$	—			$	138.6
Total assets	$	3,742.1			$	964.7			$	736.9			$	28.6			$	5,472.3

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	Three Months Ended June 30, 2019
	Gathering and Processing				Storage and Transportation				Marketing, Supply and Logistics				Corporate				Total
Revenues	$	199.7			$	4.9			$	478.8			$	—			$	683.4
Intersegment revenues	25.4				3.2				(28.6		)		—				—
Costs of product/services sold	108.9				—				428.3				—				537.2
Operations and maintenance expense	24.6				0.9				9.2				—				34.7
General and administrative expense	—				—				—				20.9				20.9
Gain (loss) on long-lived assets, net	(0.2		)		—				—				0.2				—
Gain on acquisition	209.4				—				—				—				209.4
Earnings (loss) from unconsolidated affiliates, net	(2.8		)		6.5				—				—				3.7
EBITDA	$	298.0			$	13.7			$	12.7			$	(20.7	)		$	303.7

	Six Months Ended June 30, 2020
	Gathering and Processing				Storage and Transportation				Marketing, Supply and Logistics				Corporate				Total
Revenues	$	329.4			$	6.6			$	744.6			$	—			$	1,080.6
Intersegment revenues	54.3				5.0				(59.3		)		—				—
Costs of product/services sold	129.6				0.3				630.2				—				760.1
Operations and maintenance expense	46.3				2.1				20.8				—				69.2
General and administrative expense	—				—				—				41.9				41.9
Loss on long-lived assets, net	(4.6		)		—				(0.2		)		—				(4.8		)
Goodwill impairment	(80.3		)		—				—				—				(80.3		)
Earnings (loss) from unconsolidated affiliates, net	(0.2		)		14.1				—				—				13.9
EBITDA	$	122.7			$	23.3			$	34.1			$	(41.9	)		$	138.2
Goodwill	$	45.9			$	—			$	92.7			$	—			$	138.6
Total assets	$	3,742.1			$	964.7			$	736.9			$	28.6			$	5,472.3

	Six Months Ended June 30, 2019
	Gathering and Processing				Storage and Transportation				Marketing, Supply and Logistics				Corporate				Total
Revenues	$	382.0			$	12.7			$	1,123.9			$	—			$	1,518.6
Intersegment revenues	78.2				6.8				(85.0		)		—				—
Costs of product/services sold	246.9				—				985.9				—				1,232.8
Operations and maintenance expense	42.7				1.9				18.7				—				63.3
General and administrative expense	—				—				—				56.9				56.9
Gain (loss) on long-lived assets, net	(2.0		)		—				(0.2		)		0.2				(2.0		)
Gain on acquisition	209.4				—				—				—				209.4
Earnings (loss) from unconsolidated affiliates, net	(3.0		)		13.6				—				—				10.6
EBITDA	$	375.0			$	31.2			$	34.1			$	(56.7	)		$	383.6

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Contract Assets and Contract Liabilities

Our contract assets and contract liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. Our receivables related to our revenue contracts totaled $158.3 million and $225.0 million at June 30, 2020 and December 31, 2019, and are included in accounts receivable on our consolidated balance sheets. Our contract assets are included in other non-current assets on our consolidated balance sheets. Our contract liabilities primarily consist of current and non-current deferred revenues. On our consolidated balance sheets, our current deferred revenues are included in accrued expenses and other liabilities and our non-current deferred revenues are included in other long-term liabilities. The majority of revenues associated with our deferred revenues is expected to be recognized as the performance obligations under the related contracts are satisfied over the next 17 years.

The following table summarizes our contract assets and contract liabilities (in millions):

		June 30, 2020				December 31, 2019
Contract assets (non-current)		$	1.2			$	1.2
Contract liabilities (current)(1)		$	10.2			$	8.8
Contract liabilities (non-current)(1)		$	159.6			$	144.7

(1)

During the three and six months ended June 30, 2020, we recognized revenues of approximately $3.1 million and $6.9 million that were previously included in contract liabilities (current) at December 31, 2019. The remaining change in our contract liabilities during the three and six months ended June 30, 2020, related to capital reimbursements associated with our revenue contracts and revenue deferrals associated with our contracts with increasing (decreasing) rates.

The following table summarizes the transaction price allocated to our remaining performance obligations under certain contracts that have not been recognized as of June 30, 2020 (in millions):

Remainder of 2020	$	52.3
2021	94.1
2022	63.2
2023	8.0
2024	3.3
Total	$	220.9

Our remaining performance obligations presented in the table above exclude estimates of variable rate escalation clauses in our contracts with customers, and is generally limited to fixed-fee and percentage-of-proceeds service contracts which have fixed pricing and minimum volume terms and conditions. Our remaining performance obligations generally exclude, based on the following practical expedients that we elected to apply, disclosures for (i) variable consideration allocated to a wholly-unsatisfied promise to transfer a distinct service that forms part of the identified single performance obligation; (ii) unsatisfied performance obligations where the contract term is one year or less; and (iii) contracts for which we recognize revenues as amounts are invoiced.

Disaggregation of Revenues

The following tables summarize our revenues from contracts with customers disaggregated by type of product/service sold and by commodity type for each of our segments for the three and six months ended June 30, 2020 and 2019 (in millions). We believe this summary best depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by economic factors.

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	Three Months Ended June 30, 2020
	Gathering and Processing				Storage and Transportation				Marketing, Supply and Logistics				Intersegment Elimination				Total
Topic 606 revenues
Gathering
Natural gas	$	33.2			$	—			$	—			$	—			$	33.2
Crude oil	17.9				—				—				—				17.9
Water	18.3				—				—				—				18.3
Processing
Natural gas	7.1				—				—				—				7.1
Compression
Natural gas	5.7				—				—				—				5.7
Storage
Crude oil	0.4				1.1				—				(0.8		)		0.7
NGLs	—				—				3.6				—				3.6
Pipeline
Crude oil	—				1.3				—				(0.4		)		0.9
NGLs	—				—				0.2				—				0.2
Transportation
Crude oil	1.5				—				0.3				—				1.8
NGLs	—				—				2.6				—				2.6
Rail Loading
Crude oil	—				2.9				—				(1.2		)		1.7
Product Sales
Natural gas	6.9				—				15.5				(6.8		)		15.6
Crude oil	34.8				—				102.0				(7.1		)		129.7
NGLs	3.0				—				92.4				(0.3		)		95.1
Other	—				0.2				0.2				(0.1		)		0.3
Total Topic 606 revenues	128.8				5.5				216.8				(16.7		)		334.4
Non-Topic 606 revenues(1)	—				—				18.3				—				18.3
Total revenues	$	128.8			$	5.5			$	235.1			$	(16.7	)		$	352.7

(1)	Represents revenues primarily related to our commodity-based derivatives. See Note 6 for additional information related to our price risk management activities.

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	Three Months Ended June 30, 2019
	Gathering and Processing				Storage and Transportation				Marketing, Supply and Logistics				Intersegment Elimination				Total
Topic 606 revenues
Gathering
Natural gas	$	42.9			$	—			$	—			$	—			$	42.9
Crude oil	15.1				—				—				—				15.1
Water	19.0				—				—				—				19.0
Processing
Natural gas	8.1				—				—				—				8.1
Compression
Natural gas	6.2				—				—				—				6.2
Storage
Crude oil	0.5				1.5				—				(0.5		)		1.5
NGLs	—				—				1.3				—				1.3
Pipeline
Crude oil	—				1.5				—				(0.5		)		1.0
Transportation
Crude oil	1.8				—				1.5				—				3.3
NGLs	—				—				2.1				—				2.1
Rail Loading
Crude oil	—				3.9				—				(1.4		)		2.5
Product Sales
Natural gas	10.9				—				7.9				(4.8		)		14.0
Crude oil	110.2				—				291.4				(16.0		)		385.6
NGLs	10.4				—				133.9				(4.5		)		139.8
Other	—				1.2				0.3				(0.9		)		0.6
Total Topic 606 revenues	225.1				8.1				438.4				(28.6		)		643.0
Non-Topic 606 revenues(1)	—				—				40.4				—				40.4
Total revenues	$	225.1			$	8.1			$	478.8			$	(28.6	)		$	683.4

(1)	Represents revenues primarily related to our commodity-based derivatives. See Note 6 for additional information related to our price risk management activities.

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	Six Months Ended June 30, 2020
	Gathering and Processing				Storage and Transportation				Marketing, Supply and Logistics				Intersegment Elimination				Total
Topic 606 revenues
Gathering
Natural gas	$	77.0			$	—			$	—			$	—			$	77.0
Crude oil	44.4				—				—				—				44.4
Water	41.3				—				—				—				41.3
Processing
Natural gas	17.3				—				—				—				17.3
Compression
Natural gas	12.0				—				—				—				12.0
Storage
Crude oil	0.9				1.7				—				(1.2		)		1.4
NGLs	—				—				5.2				—				5.2
Pipeline
Crude oil	—				2.9				—				(0.9		)		2.0
NGLs	—				—				0.2				—				0.2
Transportation
Crude oil	3.5				—				1.9				—				5.4
NGLs	—				—				4.3				—				4.3
Rail Loading
Crude oil	—				6.3				—				(2.6		)		3.7
Product Sales
Natural gas	18.9				—				33.8				(18.5		)		34.2
Crude oil	155.9				—				352.2				(23.4		)		484.7
NGLs	12.5				—				252.7				(12.2		)		253.0
Other	—				0.7				0.7				(0.5		)		0.9
Total Topic 606 revenues	383.7				11.6				651.0				(59.3		)		987.0
Non-Topic 606 revenues(1)	—				—				93.6				—				93.6
Total revenues	$	383.7			$	11.6			$	744.6			$	(59.3	)		$	1,080.6

(1)	Represents revenues primarily related to our commodity-based derivatives. See Note 6 for additional information related to our price risk management activities.

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	Six Months Ended June 30, 2019
	Gathering and Processing				Storage and Transportation				Marketing, Supply and Logistics				Intersegment Elimination				Total
Topic 606 revenues
Gathering
Natural gas	$	73.1			$	—			$	—			$	—			$	73.1
Crude oil	30.4				—				—				—				30.4
Water	35.8				—				—				—				35.8
Processing
Natural gas	10.6				—				—				—				10.6
Compression
Natural gas	12.2				—				—				—				12.2
Storage
Crude oil	1.0				2.9				—				(1.2		)		2.7
NGLs	—				—				2.6				—				2.6
Pipeline
Crude oil	—				3.2				—				(1.2		)		2.0
Transportation
Crude oil	3.3				—				3.0				—				6.3
NGLs	—				—				6.2				—				6.2
Rail Loading
Crude oil	—				11.1				—				(2.8		)		8.3
Product Sales
Natural gas	29.7				—				30.2				(11.4		)		48.5
Crude oil	241.8				—				581.5				(59.3		)		764.0
NGLs	22.3				—				355.4				(7.3		)		370.4
Other	—				2.3				0.3				(1.8		)		0.8
Total Topic 606 revenues	460.2				19.5				979.2				(85.0		)		1,373.9
Non-Topic 606 revenues(1)	—				—				144.7				—				144.7
Total revenues	$	460.2			$	19.5			$	1,123.9			$	(85.0	)		$	1,518.6

(1)	Represents revenues primarily related to our commodity-based derivatives. See Note 6 for additional information related to our price risk management activities.

Crestwood Midstream is a holding company (Parent) and owns no operating assets and has no significant operations independent of its subsidiaries. Obligations under Crestwood Midstream’s senior notes and its credit facility are jointly and severally guaranteed by substantially all of its subsidiaries, except for Crestwood Infrastructure, Crestwood Niobrara, Crestwood Pipeline and Storage Northeast LLC, PRBIC and Tres Holdings and their respective subsidiaries (collectively, Non-Guarantor Subsidiaries). Crestwood Midstream Finance Corp., the co-issuer of the senior notes, is Crestwood Midstream’s 100% owned subsidiary and has no material assets, operations, revenues or cash flows other than those related to its service as co-issuer of the Crestwood Midstream senior notes.

The tables below present condensed consolidating financial statements for Crestwood Midstream as Parent on a stand-alone, unconsolidated basis, and Crestwood Midstream’s combined guarantor and combined non-guarantor subsidiaries as of June 30, 2020 and December 31, 2019, and for the three and six months ended June 30, 2020 and 2019.  The financial information may not necessarily be indicative of the results of operations, cash flows or financial position had the subsidiaries operated as independent entities.

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Crestwood Midstream Partners LP
Condensed Consolidating Balance Sheet
June 30, 2020
(in millions)
(unaudited)
	Parent				Guarantor Subsidiaries				Non- Guarantor Subsidiaries				Eliminations				Consolidated
Assets
Current assets:
Cash	$	0.4			$	—			$	5.7			$	—			$	6.1
Accounts receivable	—				146.5				19.3				—				165.8
Inventory	—				88.9				—				—				88.9
Other current assets	—				52.8				0.3				—				53.1
Total current assets	0.4				288.2				25.3				—				313.9
Property, plant and equipment, net	—				2,410.1				783.6				—				3,193.7
Goodwill and intangible assets, net	—				671.2				284.5				—				955.7
Operating lease right-of-use assets, net	—				41.5				2.7				—				44.2
Investments in consolidated affiliates	4,501.0				—				—				(4,501.0		)		—
Investments in unconsolidated affiliates	—				—				961.9				—				961.9
Other non-current assets	—				2.4				0.5				—				2.9
Total assets	$	4,501.4			$	3,413.4			$	2,058.5			$	(4,501.0	)		$	5,472.3
Liabilities and capital
Current liabilities:
Accounts payable	$	—			$	114.6			$	1.5			$	—			$	116.1
Other current liabilities	25.2				114.8				24.8				—				164.8
Total current liabilities	25.2				229.4				26.3				—				280.9
Long-term liabilities:
Long-term debt, less current portion	2,575.7				—				—				—				2,575.7
Other long-term liabilities	—				165.8				118.2				—				284.0
Deferred income taxes	—				0.6				—				—				0.6
Total liabilities	2,600.9				395.8				144.5				—				3,141.2
Interest of non-controlling partner in subsidiary	—				—				430.6				—				430.6
Partners’ capital	1,900.5				3,017.6				1,483.4				(4,501.0		)		1,900.5
Total liabilities and capital	$	4,501.4			$	3,413.4			$	2,058.5			$	(4,501.0	)		$	5,472.3

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Crestwood Midstream Partners LP
Condensed Consolidating Balance Sheet
December 31, 2019
(in millions)
	Parent				Guarantor Subsidiaries				Non- Guarantor Subsidiaries				Eliminations				Consolidated
Assets
Current assets:
Cash	$	1.8			$	—			$	23.6			$	—			$	25.4
Accounts receivable	—				229.1				12.8				—				241.9
Inventory	—				53.7				—				—				53.7
Other current assets	—				54.6				0.2				—				54.8
Total current assets	1.8				337.4				36.6				—				375.8
Property, plant and equipment, net	—				2,331.3				736.2				—				3,067.5
Goodwill and intangible assets, net	—				650.7				373.4				—				1,024.1
Operating lease right-of-use assets, net	—				51.0				2.8				—				53.8
Investments in consolidated affiliates	4,451.6				—				—				(4,451.6		)		—
Investments in unconsolidated affiliates	—				—				980.4				—				980.4
Other non-current assets	—				1.9				0.5				—				2.4
Total assets	$	4,453.4			$	3,372.3			$	2,129.9			$	(4,451.6	)		$	5,504.0
Liabilities and capital
Current liabilities:
Accounts payable	$	—			$	175.9			$	10.7			$	—			$	186.6
Other current liabilities	25.8				123.9				17.6				—				167.3
Total current liabilities	25.8				299.8				28.3				—				353.9
Long-term liabilities:
Long-term debt, less current portion	2,328.3				—				—				—				2,328.3
Other long-term liabilities	—				174.8				120.8				—				295.6
Deferred income taxes	—				0.7				—				—				0.7
Total liabilities	2,354.1				475.3				149.1				—				2,978.5
Interest of non-controlling partner in subsidiary	—				—				426.2				—				426.2
Partners’ capital	2,099.3				2,897.0				1,554.6				(4,451.6		)		2,099.3
Total liabilities and capital	$	4,453.4			$	3,372.3			$	2,129.9			$	(4,451.6	)		$	5,504.0

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Crestwood Midstream Partners LP
Condensed Consolidating Statement of Operations
Three Months Ended June 30, 2020
(in millions)
(unaudited)
	Parent				Guarantor Subsidiaries				Non- Guarantor Subsidiaries				Eliminations				Consolidated
Revenues	$	—			$	336.5			$	16.2			$	—			$	352.7
Costs of product/services sold	—				225.5				0.2				—				225.7
Operating expenses and other:
Operations and maintenance	—				26.5				5.1				—				31.6
General and administrative	14.8				13.6				—				—				28.4
Depreciation, amortization and accretion	—				50.3				14.3				—				64.6
Loss on long-lived assets, net	—				2.0				1.8				—				3.8
	14.8				92.4				21.2				—				128.4
Operating income (loss)	(14.8		)		18.6				(5.2		)		—				(1.4		)
Earnings from unconsolidated affiliates, net	—				—				8.4				—				8.4
Interest and debt expense, net	(33.9		)		(0.1		)		—				—				(34.0		)
Equity in net income (loss) of subsidiaries	11.7				—				—				(11.7		)		—
Income (loss) before income taxes	(37.0		)		18.5				3.2				(11.7		)		(27.0		)
Benefit for income taxes	—				0.2				—				—				0.2
Net income (loss)	(37.0		)		18.7				3.2				(11.7		)		(26.8		)
Net income attributable to non-controlling partner in subsidiary	—				—				10.2				—				10.2
Net income (loss) attributable to Crestwood Midstream Partners LP	$	(37.0	)		$	18.7			$	(7.0	)		$	(11.7	)		$	(37.0	)

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Crestwood Midstream Partners LP
Condensed Consolidating Statement of Operations
Three Months Ended June 30, 2019
(in millions)
(unaudited)
	Parent				Guarantor Subsidiaries				Non- Guarantor Subsidiaries				Eliminations				Consolidated
Revenues	$	—			$	663.2			$	20.2			$	—			$	683.4
Costs of product/services sold	—				537.2				—				—				537.2
Operating expenses:
Operations and maintenance	—				27.5				7.2				—				34.7
General and administrative	9.7				11.2				—				—				20.9
Depreciation, amortization and accretion	—				43.0				9.7				—				52.7
Gain on acquisition	—				—				(209.4		)		—				(209.4		)
	9.7				81.7				(192.5		)		—				(101.1		)
Operating income (loss)	(9.7		)		44.3				212.7				—				247.3
Earnings from unconsolidated affiliates, net	—				—				3.7				—				3.7
Interest and debt expense, net	(28.0		)		0.2				—				—				(27.8		)
Equity in net income (loss) of subsidiaries	250.0				—				—				(250.0		)		—
Income (loss) before income taxes	212.3				44.5				216.4				(250.0		)		223.2
Provision for income taxes	—				(0.3		)		—				—				(0.3		)
Net income (loss)	212.3				44.2				216.4				(250.0		)		222.9
Net income attributable to non-controlling partner in subsidiary	—				—				10.6				—				10.6
Net income (loss) attributable to Crestwood Midstream Partners LP	$	212.3			$	44.2			$	205.8			$	(250.0	)		$	212.3

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Crestwood Midstream Partners LP
Condensed Consolidating Statement of Operations
Six Months Ended June 30, 2020
(in millions)
(unaudited)
	Parent				Guarantor Subsidiaries				Non- Guarantor Subsidiaries				Eliminations				Consolidated
Revenues	$	—			$	1,036.9			$	43.7			$	—			$	1,080.6
Costs of product/services sold	—				759.9				0.2				—				760.1
Operating expenses and other:
Operations and maintenance	—				58.3				10.9				—				69.2
General and administrative	32.7				9.2				—				—				41.9
Depreciation, amortization and accretion	—				98.1				26.1				—				124.2
Loss on long-lived assets, net	—				3.0				1.8				—				4.8
Goodwill impairment	—				—				80.3				—				80.3
	32.7				168.6				119.1				—				320.4
Operating income (loss)	(32.7		)		108.4				(75.6		)		—				0.1
Earnings from unconsolidated affiliates, net	—				—				13.9				—				13.9
Interest and debt expense, net	(66.3		)		(0.3		)		—				—				(66.6		)
Equity in net income (loss) of subsidiaries	26.5				—				—				(26.5		)		—
Income (loss) before income taxes	(72.5		)		108.1				(61.7		)		(26.5		)		(52.6		)
Benefit for income taxes	—				0.2				—				—				0.2
Net income (loss)	(72.5		)		108.3				(61.7		)		(26.5		)		(52.4		)
Net income attributable to non-controlling partner	—				—				20.1				—				20.1
Net income (loss) attributable to Crestwood Midstream Partners LP	$	(72.5	)		$	108.3			$	(81.8	)		$	(26.5	)		$	(72.5	)

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Crestwood Midstream Partners LP
Condensed Consolidating Statement of Operations
Six Months Ended June 30, 2019
(in millions)
(unaudited)
	Parent				Guarantor Subsidiaries				Non- Guarantor Subsidiaries				Eliminations				Consolidated
Revenues	$	—			$	1,498.4			$	20.2			$	—			$	1,518.6
Costs of product/services sold	—				1,232.8				—				—				1,232.8
Operating expenses and other:
Operations and maintenance	—				56.1				7.2				—				63.3
General and administrative	28.4				28.5				—				—				56.9
Depreciation, amortization and accretion	—				86.4				9.7				—				96.1
Loss on long-lived assets, net	—				2.0				—				—				2.0
Gain on acquisition	—				—				(209.4		)		—				(209.4		)
	28.4				173.0				(192.5		)		—				8.9
Operating income (loss)	(28.4		)		92.6				212.7				—				276.9
Earnings from unconsolidated affiliates, net	—				—				10.6				—				10.6
Interest and debt expense, net	(52.7		)		—				—				—				(52.7		)
Equity in net income (loss) of subsidiaries	301.0				—				—				(301.0		)		—
Income (loss) before income taxes	219.9				92.6				223.3				(301.0		)		234.8
Provision for income taxes	—				(0.3		)		—				—				(0.3		)
Net income (loss)	219.9				92.3				223.3				(301.0		)		234.5
Net income attributable to non-controlling partner in subsidiary	—				—				14.6				—				14.6
Net income (loss) attributable to Crestwood Midstream Partners LP	$	219.9			$	92.3			$	208.7			$	(301.0	)		$	219.9

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Crestwood Midstream Partners LP
Condensed Consolidating Statement of Cash Flows
Six Months Ended June 30, 2020
(in millions)
(unaudited)
	Parent				Guarantor Subsidiaries				Non- Guarantor Subsidiaries				Eliminations				Consolidated
Cash flows from operating activities	$	(96.4	)		$	197.4			$	80.1			$	—			$	181.1
Cash flows from investing activities:
Acquisition, net of cash acquired	—				(162.3		)		—				—				(162.3		)
Purchases of property, plant and equipment	—				(56.2		)		(87.0		)		—				(143.2		)
Investment in unconsolidated affiliates	—				—				(6.0		)		—				(6.0		)
Capital distributions from unconsolidated affiliates	—				—				18.9				—				18.9
Capital distributions from consolidated affiliates	8.2				—				—				(8.2		)		—
Other	—				(0.3		)		—				—				(0.3		)
Net cash provided by (used in) investing activities	8.2				(218.8		)		(74.1		)		(8.2		)		(292.9		)
Cash flows from financing activities:
Proceeds from the issuance of long-term debt	742.5				—				—				—				742.5
Payments on long-term debt	(498.2		)		—				—				—				(498.2		)
Payments on finance leases	—				(1.6		)		—				—				(1.6		)
Net proceeds from issuance of non-controlling interest	—				—				2.8				—				2.8
Distributions to partners	(119.0		)		—				(18.5		)		—				(137.5		)
Distributions to parent	—				—				(8.2		)		8.2				—
Taxes paid for unit-based compensation vesting	—				(15.5		)		—				—				(15.5		)
Change in intercompany balances	(38.5		)		38.5				—				—				—
Net cash provided by (used in) financing activities	86.8				21.4				(23.9		)		8.2				92.5
Net change in cash	(1.4		)		—				(17.9		)		—				(19.3		)
Cash at beginning of period	1.8				—				23.6				—				25.4
Cash at end of period	$	0.4			$	—			$	5.7			$	—			$	6.1

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Crestwood Midstream Partners LP
Condensed Consolidating Statement of Cash Flows
Six Months Ended June 30, 2019
(in millions)
(unaudited)
	Parent				Guarantor Subsidiaries				Non- Guarantor Subsidiaries				Eliminations				Consolidated
Cash flows from operating activities	$	(87.1	)		$	309.5			$	(27.3	)		$	—			$	195.1
Cash flows from investing activities:
Acquisition, net of cash acquired	—				—				(462.1		)		—				(462.1		)
Purchases of property, plant and equipment	—				(127.7		)		(77.0		)		—				(204.7		)
Investment in unconsolidated affiliates	—				—				(40.9		)		—				(40.9		)
Capital distributions from unconsolidated affiliates	—				—				24.2				—				24.2
Capital contributions to consolidated affiliates	(217.1		)		—				—				217.1				—
Other	—				(0.5		)		—				—				(0.5		)
Net cash provided by (used in) investing activities	(217.1		)		(128.2		)		(555.8		)		217.1				(684.0		)
Cash flows from financing activities:
Proceeds from the issuance of long-term debt	1,544.0				—				—				—				1,544.0
Payments on long-term debt	(1,159.1		)		(0.4		)		—				—				(1,159.5		)
Payments on finance leases	—				(1.9		)		—				—				(1.9		)
Payments for debt-related deferred costs	(9.0		)		—				—				—				(9.0		)
Net proceeds from the issuance of non-controlling interest	—				—				235.0				—				235.0
Distributions to partners	(117.5		)		—				(6.6		)		—				(124.1		)
Contributions from parent	—				—				217.1				(217.1		)		—
Taxes paid for unit-based compensation vesting	—				(10.6		)		—				—				(10.6		)
Change in intercompany balances	30.7				(168.4		)		137.7				—				—
Net cash provided by (used in) financing activities	289.1				(181.3		)		583.2				(217.1		)		473.9
Net change in cash	(15.1		)		—				0.1				—				(15.0		)
Cash at beginning of period	16.5				—				—				—				16.5
Cash at end of period	$	1.4			$	—			$	0.1			$	—			$	1.5

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Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations

•

statements that are not historical in nature, including, but not limited to: (i) our belief that anticipated cash from operations, cash distributions from entities that we control, and borrowing capacity under our credit facility will be sufficient to meet our anticipated liquidity needs for the foreseeable future; (ii) our belief that we do not have material potential liability in connection with legal proceedings that would have a significant financial impact on our consolidated financial condition, results of operations or cash flows; and (iii) our belief that our assets will continue to benefit from the development of unconventional shale plays as significant supply basins; and

•	statements preceded by, followed by or that contain forward-looking terminology including the words “believe,” “expect,” “may,” “will,” “should,” “could,” “anticipate,” “estimate,” “intend” or the negation thereof, or similar expressions.

•	our ability to successfully implement our business plan for our assets and operations;

•	governmental legislation and regulations;

•	industry factors that influence the supply of and demand for crude oil, natural gas and NGLs;

•	industry factors that influence the demand for services in the markets (particularly unconventional shale plays) in which we provide services;

•	weather conditions;

•	outbreak of illness, pandemic or any other public health crisis, including the COVID-19 pandemic;

•	the availability of crude oil, natural gas and NGLs, and the price of those commodities, to consumers relative to the price of alternative and competing fuels;

•	the availability of storage for hydrocarbons;

•	the ability of members of the Organization of Petroleum Exporting Countries (OPEC) and other oil-producing countries to agree and maintain oil price and production controls;

•	economic conditions;

•	costs or difficulties related to the integration of acquisitions and success of our joint ventures’ operations;

•	environmental claims;

•	operating hazards and other risks incidental to the provision of midstream services, including gathering, compressing, treating, processing, fractionating, transporting and storing energy products (i.e., crude oil, NGLs and natural gas) and related products (i.e., produced water);

•	interest rates;

•	the price and availability of debt and equity financing, including our ability to raise capital through alternatives like joint ventures; and

•	the ability to sell or monetize assets, to reduce indebtedness, to repurchase our equity securities, to make strategic investments, or for other general partnership purposes.

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•	growth capital expenditures, which are made to construct additional assets, expand and upgrade existing systems, or acquire additional assets; or

•	maintenance capital expenditures, which are made to replace partially or fully depreciated assets, to maintain the existing operating capacity of our assets, extend their useful lives or comply with regulatory requirements.

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•	During the six months ended June 30, 2020, distributions to our partners increased by $4.8 million compared to the same period in 2019, primarily due to the increase in our distribution per limited partner unit from $0.60 per limited partner unit to $0.625 per limited partner unit;

•	During the six months ended June 30, 2020 and 2019, Crestwood Niobrara paid cash distributions of $18.5 million and $6.6 million to its non-controlling partner. In addition, during the six months ended June 30, 2020, Crestwood Niobrara received contributions of $2.8 million from its non-controlling partner;

•	During the six months ended June 30, 2019, Crestwood Niobrara issued $235 million in new Series A-3 Preferred Units to Jackalope Holdings in conjunction with Crestwood Niobrara’s acquisition of the remaining 50% equity interest in Jackalope from Williams. For a further discussion of this transaction, see Item 1. Financial Statements, Note 10;

•	During the six months ended June 30, 2020, our taxes paid from unit-based compensation vesting increased by $4.9 million compared to the same period in 2019, primarily due to higher vesting of unit-based compensation awards; and

•	During the six months ended June 30, 2020, our debt-related transactions resulted in net proceeds of approximately $244.3 million compared to net proceeds of $375.5 million during the six months ended June 30, 2019.

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Item 3.	Quantitative and Qualitative Disclosures About Market Risk

Item 4.	Controls and Procedures

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Item 1.	Legal Proceedings

Item 1A.	Risk Factors

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•	changes in general domestic and global economic and political conditions;

•	changes in domestic regulations that could impact the supply or demand for oil and gas;

•	technological advancements that may drive further increases in production and reduction in costs of developing shale plays;

•	competition from imported supplies and alternate fuels;

•	commodity price changes, including the recent decline in crude oil and natural gas prices, that could negatively impact the supply of, or the demand for these products;

•	outbreak of illness, pandemic or any other public health crisis, including the COVID-19 pandemic;

•	the availability of hydrocarbon storage;

•	increased costs to explore for, develop, produce, gather, process or transport commodities;

•	impact of interest rates on economic activity;

•	shareholder activism and activities by non-governmental organizations to limit sources of funding for the energy sector or restrict the exploration, development and production of oil and gas:

•	operational hazards, including terrorism, cyber-attacks or domestic vandalism;

•	adoption of various energy efficiency and conservation measures; and

•	perceptions of customers on the availability and price volatility of our services, particularly customers’ perceptions on the volatility of commodity prices over the longer-term.

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Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.	Defaults Upon Senior Securities

Item 4.	Mine Safety Disclosures

Item 5.	Other Information

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Item 6.	Exhibits

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