Le Lézard
Classified in: Oil industry, Business
Subjects: ERN, ERP, DIV

Summit Midstream Partners, LP Reports Second Quarter 2022 Financial and Operating Results


HOUSTON, Texas, Aug. 4, 2022 /PRNewswire/ -- Summit Midstream Partners, LP (NYSE: SMLP) ("Summit", "SMLP" or the "Partnership") announced today its financial and operating results for the three months ended June 30, 2022, including a net loss of $91.8 million, adjusted EBITDA of $50.5 million and DCF of $25.6 million. SMLP also recognized an impairment of $84.5 million related to the sale of its Lane Gathering and Processing System in the Delaware Basin. Operated natural gas throughput from wholly owned assets averaged 1,200 million cubic feet per day ("MMcf/d") and liquids throughput averaged 54 thousand barrels per day ("Mbbl/d"). Total quarterly natural gas gathering volume throughput, including SMLP's proportionate share from OGC and Double E, decreased 32 MMcf/d relative to the first quarter of 2022, primarily due to approximately 55 MMcf/d of reductions resulting from maintenance activities and wells temporarily shut-in behind the Northeast segment, partially offset by nearly 70% volume growth behind Double E. Natural gas volumes benefited from 8 new wells brought online behind our wholly owned systems and 6 new wells brought online behind our Ohio Gathering joint venture during the quarter. Second quarter 2022 liquids volume decreased by 11 Mbbl/d, or 16.9% relative to the first quarter of 2022 primarily due to severe winter weather in North Dakota and no new wells brought online during the quarter.

Heath Deneke, President, Chief Executive Officer and Chairman, commented, "Summit's second quarter 2022 financial and operating results were ahead of internal expectations, despite approximately $3.6 million of unexpected weather, maintenance and deal costs, which was driven by continued strong performance from recent wells turned in line and lower than anticipated operating expenses for the quarter. I'd like to thank our team up in North Dakota for the significant effort made to get our systems back online safely and quickly. Based on year-to-date financial results and the timing and performance of recent well connections in 2022, we believe we will trend toward the high end of our previously announced Adjusted EBITDA guidance range of $205 to $220 million. We continue to see strong momentum behind our systems throughout the second half of the 2022 and into 2023 which we believe positions SMLP for strong growth in 2023."

"Based on recent customer development plans, permitting and rig activity, and commodity price expectations of over $80 per barrel of crude oil and over $5 per MMBtu of natural gas in 2023, we currently expect to connect at least 200 wells to our systems in 2023. While this remains below pre-pandemic average well connections of approximately 260 wells per year, this would be a 80% increase from the average wells connected to the system in 2021 and 2022. We are seeing positive momentum in virtually all our operating segments. In the Northeast, along with increasing activity, we are optimistic about the potential impact of Ascent Resources, LLC's recently announced acquisition of ~26,800 net acres in the Utica that is dedicated to our wholly owned SMU system. In the Piceance, we continue to work with our customers on a multi-year development program that would bring approximately 200 wells online over the next couple years. We expect the first batch of approximately 15 to 20 wells to come online beginning in Q2 2023 and continue thereafter. We believe this activity will offset natural production declines and result in modest volume growth longer-term in the Piceance. In the Barnett, we are currently working with our customers on a development program that includes over 30 new wells in 2023. The outperformance of recent well results and increased level of activity in 2023 would drive meaningful volume growth behind that segment. In the Williston, we expect to be at the higher end of our previously announced 45 ? 65 well connections in 2022 and based on recent customer conversations we believe there could be comparable levels of well connections in 2023. This level of activity would drive meaningful liquids volume growth behind the system over the next several quarters. While it's still too early to formally provide 2023 guidance, we believe this level of well connection activity and continued contracted EBITDA growth behind our Double E joint venture to generate at least 10% year-over-year Adjusted EBITDA growth in 2023. We are excited about the potential impact of this growth on our business and balance sheet and will continue to provide updates throughout the year as our customer's plans further develop."

"We also achieved another key milestone during the quarter with the sale of our Lane Gathering & Processing System to a wholly owned subsidiary of Matador Resources Company ("Matador") for a cash sale price of $75 million and the assumption of an additional 60 MMcf/d take-or-pay firm capacity behind Double E. The transaction reduced our total leverage ratio by ~0.3x and increased our total liquidity to $255 million as of June 30, 2022. The transaction also expands Double E's commercial relationship with Matador, a significant acreage holder owning nearly 125,000 net acres in Eddy and Lea Counties in southeastern New Mexico. Matador now has two gas processing complexes connected to the Double E system, Matador's interest in San Mateo Midstream, LLC's 460 MMcf/d Black River Processing Plant Complex and the 60 MMcf/d Lane G&P System acquired from us. Additionally, as the availability of pipeline takeaway capacity out of New Mexico continues to tighten with current levels of drilling activity, we are in active dialogue with multiple new shippers to fill up the remaining unsubscribed firm capacity in Double E and potentially further expand the pipeline's capacity to over 2.0 Bcf per day."

Second Quarter 2022 Business Highlights

In the second quarter of 2022, SMLP's average daily natural gas throughput for its wholly owned operated systems decreased by 106 MMcf/d to 1,200 MMcf/d, and liquids volumes decreased by 11 Mbb/d to 54 Mbbl/d, relative to the first quarter of 2022. Ohio Gathering Company natural gas throughput decreased 36 MMcf/d to 562 MMcf/d and generated $7.5 million of adjusted EBITDA net to SMLP for the second quarter of 2022. Double E Pipeline gross volumes transported increased 127 MMcf/d to 314 MMcf/d and generated $3.9 million of adjusted EBITDA net to SMLP for the second quarter of 2022. SMLP's customers are currently operating eight drilling rigs on acreage behind SMLP's gathering systems and have approximately 48 wells that have been drilled and are expected to be turned in line later this year.

Natural gas price driven segments:

Oil price driven segments

The following table presents average daily throughput by reportable segment for the periods indicated:


Three Months Ended June 30,


Six Months Ended June 30,


2022


2021


2022


2021

Average daily throughput (MMcf/d):








Northeast (1)

632


853


687


800

Rockies

29


35


29


35

Permian (1)

27


29


27


29

Piceance

312


326


312


334

Barnett

200


198


199


195

Aggregate average daily throughput

1,200


1,441


1,254


1,393









Average daily throughput (Mbbl/d):








Rockies

54


63


60


64

Aggregate average daily throughput

54


63


60


64









Ohio Gathering average daily throughput (MMcf/d) (2)

562


514


580


536









Double E average daily throughput (MMcf/d) (3)

314


?


251


?

__________

(1)       

Exclusive of Ohio Gathering and Double E due to equity method accounting.

(2)       

Gross basis, represents 100% of volume throughput for Ohio Gathering, subject to a one-month lag.

(3)       

Gross, basis, represents 100% of volume throughput for Double E.

 

The following table presents adjusted EBITDA by reportable segment for the periods indicated:


Three Months Ended June 30,


Six Months Ended June 30,


2022


2021


2022


2021


(In thousands)


(In thousands)

Reportable segment adjusted EBITDA (1):








Northeast (2)

$         18,568


$        23,361


$        38,636


$        43,554

Rockies

13,899


14,732


29,729


30,884

Permian (3)

4,817


1,341


8,966


2,592

Piceance

15,350


20,324


31,118


41,358

Barnett

7,247


8,889


16,533


16,905

Total

$         59,881


$        68,647


$       124,982


$       135,293

Less:  Corporate and Other (4)

9,410


6,517


17,762


12,720

Adjusted EBITDA

$         50,471


$        62,130


$       107,220


$       122,573

__________

(1)       

We define segment adjusted EBITDA as total revenues less total costs and expenses, plus (i) other income, (ii) our proportional adjusted EBITDA for equity method investees, (iii) depreciation and amortization, (iv) adjustments related to MVC shortfall payments, (v) adjustments related to capital reimbursement activity, (vi) unit-based and noncash compensation, (vii) impairments and (viii) other noncash expenses or losses, less other noncash income or gains.

(2)       

Includes our proportional share of adjusted EBITDA for Ohio Gathering, subject to a one-month lag. We define proportional adjusted EBITDA for our equity method investees as the product of (i) total revenues less total expenses, excluding impairments and other noncash income or expense items and (ii) amortization for deferred contract costs; multiplied by our ownership interest during the respective period.

(3)       

Includes our proportional share of adjusted EBITDA for Double E. We define proportional adjusted EBITDA for our equity method investees as the product of total revenues less total expenses, excluding impairments and other noncash income or expense items; multiplied by our ownership interest during the respective period.

(4)       

Corporate and Other represents those results that are not specifically attributable to a reportable segment or that have not been allocated to our reportable segments, including certain general and administrative expense items and natural gas and crude oil marketing services.

Capital Expenditures

Capital expenditures totaled $6.1 million in the second quarter of 2022, inclusive of maintenance capital expenditures of $1.9 million. Capital expenditures in the second quarter of 2022 were primarily related to growth projects to connect new pad sites in our Northeast and Rockies segments.



Six Months Ended June 30,



2022


2021



(In thousands)

Cash paid for capital expenditures (1):





Northeast


$           5,770


$           3,743

Rockies


3,558


2,147

Permian


1,323


246

Piceance


2,828


(719)

Barnett


552


437

Total reportable segment capital expenditures


$         14,031


$           5,845

Corporate and Other


763


117

Total cash paid for capital expenditures


$         14,794


$           5,962

__________

(1)       

Excludes cash paid for capital expenditures by Ohio Gathering and Double E due to equity method accounting.

Capital & Liquidity

As of June 30, 2022, SMLP had $151 million drawn under its $400 million ABL Revolver and $243.1 million of borrowing availability, after accounting for $5.9 million of issued, but undrawn letters of credit. As of June 30, 2022, SMLP's gross availability based on the borrowing base calculation in the credit agreement was $584 million, which is $184 million greater than the $400 million of lender commitments to the ABL Revolver. As of June 30, 2022 SMLP was in compliance with all financial covenants, including interest coverage of 2.7x relative to a minimum interest coverage covenant of 2.0x and first lien leverage ratio of 0.6x relative to a maximum first lien leverage ratio of 2.5x. As of June 30, 2022, SMLP reported a total leverage ratio of 5.08x.

As of June 30, 2022, the Permian Transmission Credit Facility balance was $157.8 million, a reduction of $2.2 million relative to the December 31, 2021 balance of $160.0 million due to scheduled mandatory amortization.  The Permian Transmission Term Loan remains non-recourse to SMLP.

MVC Shortfall Payments

SMLP billed its customers $7.8 million in the second quarter of 2022 related to MVC shortfalls. For those customers that do not have MVC shortfall credit banking mechanisms in their gathering agreements, the MVC shortfall payments are accounted for as gathering revenue in the period in which they are earned. In the second quarter of 2022, SMLP recognized $10.1 million of gathering revenue associated with MVC shortfall payments. SMLP had no adjustments to MVC shortfall payments in the second quarter of 2022. SMLP's MVC shortfall payment mechanisms contributed $10.1 million of total adjusted EBITDA in the second quarter of 2022.


Three Months Ended June 30, 2022


MVC Billings


Gathering
revenue


Adjustments
to MVC
shortfall
payments


Net impact to
adjusted
EBITDA


(In thousands)

Net change in deferred revenue related to MVC

   shortfall payments:








Piceance Basin

$             ?


$             ?


$            ?


$            ?

Total net change

$             ?


$             ?


$            ?


$            ?









MVC shortfall payment adjustments:








Rockies

$             ?


$        2,246


$            ?


$       2,246

Piceance

6,251


6,251


?


6,251

Northeast

1,556


1,556


?


1,556

Total MVC shortfall payment adjustments

$        7,807


$      10,053


$            ?


$     10,053









Total (1)

$        7,807


$      10,053


$            ?


$     10,053

__________

(1)       

Exclusive of Ohio Gathering and Double E due to equity method accounting.

 


Six Months Ended June 30, 2022


MVC Billings


Gathering
revenue


Adjustments
to MVC
shortfall
payments


Net impact to
adjusted
EBITDA


(In thousands)

Net change in deferred revenue related to MVC

   shortfall payments:








Piceance Basin

$          288


$          288


$            ?


$         288

Total net change

$          288


$          288


$            ?


$         288









MVC shortfall payment adjustments:








Rockies

$             ?


$        4,491


$            ?


$       4,491

Piceance

12,382


12,382


?


12,382

Northeast

3,066


3,066


?


3,066

Total MVC shortfall payment adjustments

$      15,448


$      19,939


$            ?


$     19,939









Total (1)

$      15,736


$      20,227


$            ?


$     20,227

__________

(1)       

Exclusive of Ohio Gathering and Double E due to equity method accounting.

Quarterly Distribution

The board of directors of SMLP's general partner continued to suspend cash distributions payable on its common units and on its 9.50% Series A fixed-to-floating rate cumulative redeemable perpetual preferred units (the "Series A Preferred Units") for the period ended June 30, 2022. Unpaid distributions on the Series A Preferred Units will continue to accumulate.

Second Quarter 2022 Earnings Call Information

SMLP will host a conference call at 10:00 a.m. Eastern on Friday, August 5, 2022, to discuss its quarterly operating and financial results.  Interested parties may participate in the call by dialing 404-400-0571 or toll-free 866-374-5140 and entering the PIN 91939799#.  The conference call, live webcast and archive of the call can be accessed through the Investors section of SMLP's website at www.summitmidstream.com.

Use of Non-GAAP Financial Measures

We report financial results in accordance with U.S. generally accepted accounting principles ("GAAP"). We also present adjusted EBITDA and Distributable Cash Flow, non-GAAP financial measures.

Adjusted EBITDA

We define adjusted EBITDA as net income or loss, plus interest expense, income tax expense, depreciation and amortization, our proportional adjusted EBITDA for equity method investees, adjustments related to MVC shortfall payments, adjustments related to capital reimbursement activity, unit-based and noncash compensation, impairments, items of income or loss that we characterize as unrepresentative of our ongoing operations and other noncash expenses or losses, income tax benefit, income (loss) from equity method investees and other noncash income or gains. Because adjusted EBITDA may be defined differently by other entities in our industry, our definition of this non-GAAP financial measure may not be comparable to similarly titled measures of other entities, thereby diminishing its utility.

Management uses adjusted EBITDA in making financial, operating and planning decisions and in evaluating our financial performance. Furthermore, management believes that adjusted EBITDA may provide external users of our financial statements, such as investors, commercial banks, research analysts and others, with additional meaningful comparisons between current results and results of prior periods as they are expected to be reflective of our core ongoing business.

Adjusted EBITDA is used as a supplemental financial measure to assess:

Adjusted EBITDA has limitations as an analytical tool and investors should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. For example:

We compensate for the limitations of adjusted EBITDA as an analytical tool by reviewing the comparable GAAP financial measures, understanding the differences between the financial measures and incorporating these data points into our decision-making process.

Distributable Cash Flow

We define Distributable Cash Flow as adjusted EBITDA, as defined above, less cash interest paid, cash paid for taxes, net interest expense accrued and paid on the senior notes, and maintenance capital expenditures.

We do not provide the GAAP financial measures of net income or loss or net cash provided by operating activities on a forward-looking basis because we are unable to predict, without unreasonable effort, certain components thereof including, but not limited to, (i) income or loss from equity method investees and (ii) asset impairments. These items are inherently uncertain and depend on various factors, many of which are beyond our control. As such, any associated estimate and its impact on our GAAP performance and cash flow measures could vary materially based on a variety of acceptable management assumptions. 

About Summit Midstream Partners, LP

SMLP is a value-driven limited partnership focused on developing, owning and operating midstream energy infrastructure assets that are strategically located in the core producing areas of unconventional resource basins, primarily shale formations, in the continental United States. SMLP provides natural gas, crude oil and produced water gathering, processing and transportation services pursuant to primarily long-term, fee-based agreements with customers and counterparties in six unconventional resource basins: (i) the Appalachian Basin, which includes the Utica and Marcellus shale formations in Ohio and West Virginia; (ii) the Williston Basin, which includes the Bakken and Three Forks shale formations in North Dakota; (iii) the Denver-Julesburg Basin, which includes the Niobrara and Codell shale formations in Colorado and Wyoming; (iv) the Permian Basin, which includes the Bone Spring and Wolfcamp formations in New Mexico; (v) the Fort Worth Basin, which includes the Barnett Shale formation in Texas; and (vi) the Piceance Basin, which includes the Mesaverde formation as well as the Mancos and Niobrara shale formations in Colorado. SMLP has an equity method investment in Double E Pipeline, LLC, which provides interstate natural gas transportation service from multiple receipt points in the Delaware Basin to various delivery points in and around the Waha Hub in Texas. SMLP also has an equity method investment in Ohio Gathering, which operates extensive natural gas gathering and condensate stabilization infrastructure in the Utica Shale in Ohio. SMLP is headquartered in Houston, Texas.

Forward-Looking Statements

This press release includes certain statements concerning expectations for the future that are forward-looking within the meaning of the federal securities laws. Forward-looking statements include, without limitation, any statement that may project, indicate or imply future results, events, performance or achievements and may contain the words "expect," "intend," "plan," "anticipate," "estimate," "believe," "will be," "will continue," "will likely result," and similar expressions, or future conditional verbs such as "may," "will," "should," "would," and "could." In addition, any statement concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies and possible actions taken by us or our subsidiaries are also forward-looking statements. Forward-looking statements also contain known and unknown risks and uncertainties (many of which are difficult to predict and beyond management's control) that may cause SMLP's actual results in future periods to differ materially from anticipated or projected results. An extensive list of specific material risks and uncertainties affecting SMLP is contained in its 2021 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on February 28, 2022, as amended and updated from time to time. Any forward-looking statements in this press release are made as of the date of this press release and SMLP undertakes no obligation to update or revise any forward-looking statements to reflect new information or events.

 

SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS



June 30,
2022


December 31,
2021


(In thousands)

ASSETS




Cash and cash equivalents

$        12,367


$          7,349

Restricted cash

3,333


12,223

Accounts receivable

59,392


62,121

Other current assets

3,716


5,676

Total current assets

78,808


87,369

Property, plant and equipment, net

1,531,450


1,726,082

Intangible assets, net

156,877


172,927

Investment in equity method investees

519,553


523,196

Other noncurrent assets

23,645


12,888

TOTAL ASSETS

$   2,310,333


$   2,522,462





LIABILITIES AND CAPITAL




Trade accounts payable

$          8,378


$        10,498

Accrued expenses

21,323


14,462

Deferred revenue

9,720


10,374

Ad valorem taxes payable

4,738


8,570

Accrued compensation and employee benefits

6,760


11,019

Accrued interest

15,992


12,737

Accrued environmental remediation

2,108


3,068

Current portion of long-term debt

7,526


?

Other current liabilities

10,476


8,509

Total current liabilities

87,021


79,237

Long-term debt, net of issuance costs

1,232,512


1,355,072

Noncurrent deferred revenue

40,362


42,570

Noncurrent accrued environmental remediation

2,272


2,538

Other noncurrent liabilities

32,184


32,357

Total liabilities

1,394,351


1,511,774

Commitments and contingencies








Mezzanine Capital




Subsidiary Series A Preferred Units

113,574


106,325





Partners' Capital




Series A Preferred Units

81,290


169,769

Common limited partner capital

721,118


734,594

Total partners' capital

802,408


904,363

TOTAL LIABILITIES AND CAPITAL

$   2,310,333


$   2,522,462





 

SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



Three Months Ended June 30,


Six Months Ended June 30,


2022


2021


2022


2021


(In thousands, except per-unit amounts)

Revenues:








Gathering services and related fees

$      61,631


$      74,233


$    125,651


$    144,580

Natural gas, NGLs and condensate sales

28,278


16,416


50,736


37,180

Other revenues

9,154


9,392


18,802


17,599

Total revenues

99,063


100,041


195,189


199,359

Costs and expenses:








Cost of natural gas and NGLs

26,831


16,626


49,082


37,102

Operation and maintenance

22,277


17,507


39,339


34,100

General and administrative

10,473


29,360


23,433


39,938

Depreciation and amortization

30,111


28,364


60,556


56,875

Transaction costs

(13)


450


233


217

Gain on asset sales, net

(313)


(4)


(310)


(140)

Long-lived asset impairments

84,614


33


84,628


1,525

Total costs and expenses

173,980


92,336


256,961


169,617

Other income (expense), net

(4)


352


(4)


408

Gain (loss) on interest rate swaps

3,936


(2,686)


10,964


(2,692)

Loss on ECP Warrants

?


(12,159)


?


(13,634)

Interest expense

(24,887)


(15,502)


(49,050)


(29,455)

Loss before income taxes and equity method
investment income

(95,872)


(22,290)


(99,862)


(15,631)

Income tax (expense) benefit

(325)


248


(375)


262

Income from equity method investees

4,393


2,304


8,428


4,619

Net loss

$     (91,804)


$     (19,738)


$     (91,809)


$     (10,750)









Net loss per limited partner unit:








Common unit ? basic

$         (9.53)


$         (2.91)


$         (8.45)


$         (2.91)

Common unit ? diluted

$         (9.53)


$         (2.91)


$         (8.45)


$         (2.91)









Weighted-average limited partner units outstanding:








Common units ? basic

10,166


6,656


9,919


6,392

Common units ? diluted

10,166


6,656


9,919


6,392

 

SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES

UNAUDITED OTHER FINANCIAL AND OPERATING DATA



Three Months Ended June 30,


Six Months Ended June 30,


2022


2021


2022


2021


(In thousands)

Other financial data:








Net income (loss)

$      (91,804)


$      (19,738)


$      (91,809)


$      (10,750)

Net cash provided by operating activities

14,113


34,787


60,159


86,217

Capital expenditures

6,091


3,352


14,794


5,962

Contributions to equity method investees

?


43,324


8,444


48,943

Adjusted EBITDA

50,471


62,130


107,220


122,573

Cash flow available for distributions (1)

$       25,626


$       46,465


$       57,379


$       92,627

Distributions (2)

n/a


n/a


n/a


n/a









Operating data:








Aggregate average daily throughput ? natural gas (MMcf/d)

1,200


1,441


1,254


1,393

Aggregate average daily throughput ? liquids (Mbbl/d)

54


63


60


64









Ohio Gathering average daily throughput (MMcf/d) (3)

562


514


580


536

Double E average daily throughput (MMcf/d) (4)

314


?


251


?

__________

(1)       

Cash flow available for distributions is also referred to as Distributable Cash Flow, or DCF.

(2)       

Represents distributions declared and ultimately paid or expected to be paid to preferred and common unitholders in respect of a given period. On May 3, 2020, the board of directors of SMLP's general partner announced an immediate suspension of the cash distributions payable on its preferred and common units.

(3)       

Gross basis, represents 100% of volume throughput for Ohio Gathering, subject to a one-month lag.

(4)       

Gross, basis, represents 100% of volume throughput for Double E.

 

SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES

UNAUDITED RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES



Three Months Ended June 30,


Six Months Ended June 30,


2022


2021


2022


2021


(In thousands)

Reconciliations of net income to adjusted EBITDA
and Distributable

    Cash Flow:








Net income (loss)

$     (91,804)


$     (19,738)


$     (91,809)


$     (10,750)

Add:








Interest expense

24,887


15,502


49,050


29,455

Income tax expense (benefit)

325


(248)


375


(262)

Depreciation and amortization (1)

30,346


28,598


61,025


57,344

Proportional adjusted EBITDA for equity method
investees (2)

11,406


6,841


21,858


13,713

Adjustments related to capital reimbursement activity (3)

(1,578)


(2,225)


(3,306)


(3,470)

Unit-based and noncash compensation

582


1,048


2,272


3,015

Gain on asset sales, net

(313)


(4)


(310)


(140)

Long-lived asset impairment

84,614


33


84,628


1,525

Other, net (4)

(3,601)


34,627


(8,135)


36,762

Less:








Income from equity method investees

4,393


2,304


8,428


4,619

Adjusted EBITDA

$      50,471


$      62,130


$    107,220


$    122,573

Less:








Cash interest paid

38,565


14,984


42,039


27,869

Cash paid for taxes

149


15


149


15

Senior notes interest adjustment (5)

(15,795)


(512)


2,810


?

Maintenance capital expenditures

1,926


1,178


4,843


2,062

Cash flow available for distributions (6)

$      25,626


$      46,465


$      57,379


$      92,627

__________

(1)       

Includes the amortization expense associated with our favorable gas gathering contracts as reported in other revenues.

(2)       

Reflects our proportionate share of Double E and Ohio Gathering (subject to a one-month lag) adjusted EBITDA.

(3)       

Adjustments related to capital reimbursement activity represent contributions in aid of construction revenue recognized in accordance with Accounting Standards Update No. 2014-09 Revenue from Contracts with Customers ("Topic 606").

(4)       

Represents items of income or loss that we characterize as unrepresentative of our ongoing operations. For the three and six months ended June 30, 2022, the amount includes $3.9 million of realized and unrealized gains related to the fair value of interest rate swaps and $0.2 million of severance expenses. For the six months ended June 30, 2022, the amount includes $11.0 million of realized and unrealized gains related to the fair value of interest rate swaps and $2.4 million of severance expenses. For the three months ended June 30, 2021, the amount includes $19.3 million incremental loss contingency related to the Blacktail Release and a $12.2 million loss related to the change in the fair value of the ECP Warrants. For the six months ended June 30, 2021, the amount includes a $19.3 million incremental loss contingency related to the Blacktail Release and a $13.6 million loss related to the change in the fair value of the ECP Warrants.

(5)       

Senior notes interest adjustment represents the net of interest expense accrued and paid during the period. Interest on the 2025 senior notes is paid in cash semi-annually in arrears on April 15 and October 15 until maturity in April 2025. Interest on the 2026 senior notes is paid in cash semi-annually in arrears on April 15 and October 15 until maturity in October 2026.

(6)       

Represents cash flow available for distribution to preferred and common unitholders. Common distributions cannot be paid unless all accrued preferred distributions are paid. Cash flow available for distributions is also referred to as Distributable Cash Flow, or DCF.

 

SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES

UNAUDITED RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES



Six Months Ended June 30,


2022


2021


(In thousands)

Reconciliation of net cash provided by operating activities to adjusted

    EBITDA and distributable cash flow:








Net cash provided by operating activities

$       60,159


$       86,217

Add:




Interest expense, excluding amortization of debt issuance costs

44,609


26,008

Income tax expense (benefit)

375


(262)

Changes in operating assets and liabilities

962


(6,434)

Proportional adjusted EBITDA for equity method investees (1)

21,858


13,713

Adjustments related to capital reimbursement activity (2)

(3,306)


(3,470)

Other, net (3)

3,482


20,436

Less:




Distributions from equity method investees

20,451


13,116

Noncash lease expense

468


519

Adjusted EBITDA

$      107,220


$      122,573

Less:




Cash interest paid

42,039


27,869

Cash paid for taxes

149


15

Senior notes interest adjustment (4)

2,810


?

Maintenance capital expenditures

4,843


2,062

Cash flow available for distributions (5)

$       57,379


$       92,627

__________

(1)       

Reflects our proportionate share of Double E and Ohio Gathering adjusted EBITDA, subject to a one-month lag.

(2)       

Adjustments related to capital reimbursement activity represent contributions in aid of construction revenue recognized in accordance with Accounting Standards Update No. 2014-09 Revenue from Contracts with Customers ("Topic 606").

(3)       

Represents items of income or loss that we characterize as unrepresentative of our ongoing operations. For the six months ended June 30, 2022, the amount includes $2.4 million of severance expenses. For the six months ended June 30, 2021, the amount includes a $19.3 million incremental loss contingency related to the Blacktail Release.

(4)       

Senior notes interest adjustment represents the net of interest expense accrued and paid during the period. Interest on the 2025 senior notes is paid in cash semi-annually in arrears on April 15 and October 15 until maturity in April 2025. Interest on the 2026 senior notes is paid in cash semi-annually in arrears on April 15 and October 15 until maturity in October 2026.

(5)       

Represents cash flow available for distribution to preferred and common unitholders. Common distributions cannot be paid unless all accrued preferred distributions are paid. Cash flow available for distributions is also referred to as Distributable Cash Flow, or DCF.

 

SOURCE Summit Midstream Partners, LP


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