HOUSTON, June 21, 2021 /PRNewswire/ -- Summit
Midstream Partners, LP (NYSE: SMLP) ("Summit", "SMLP" or the
"Partnership") today announced an increase to its full year 2021
financial guidance, including a new adjusted EBITDA range of
$225 million to $240 million which, at the midpoint, represents
an increase of 5.7% from the original guidance range of
$210 million to $230 million. Management now expects total
indebtedness as of June 30, 2021, net
of unrestricted cash on hand, to be reduced by approximately
$82 million, which is nearly 6% lower
than the outstanding net debt balance as of December 31, 2020.
Heath Deneke, President,
Chief Executive Officer and Chairman, commented, "Summit's year to
date financial and operational results continue to exceed our
original expectations, largely driven by the outperformance from
wells turned in line year to date, accelerated customer activity,
and continued gains from expense management initiatives that have
been implemented across the organization. While we still
expect 2021 to be a trough year for new well connect activity
across our footprint, we are encouraged by the strengthening
commodity price backdrop and increasing customer activity now
expected during the second half of the year. As a result of
year to date outperformance and accelerated well activity, we are
increasing our full year 2021 adjusted EBITDA guidance to a new
range of $225 million to $240 million. We are maintaining our 2021
capital expenditure guidance range of $20
million to $35
million."
"The business continues to produce strong free cash flow,
which will enable us to reduce outstanding net indebtedness by
nearly $82 million by the end of the
second quarter and will continue to allow us to reduce our
outstanding debt balance for the foreseeable future."
"We continue to make excellent progress with our efforts
to refinance our 2022 debt maturities. We have a number of
supportive banks working to facilitate our refinancing plans and a
strong capital markets backdrop that we expect will help further
optimize our comprehensive refinancing solution. We look
forward to providing additional details on our refinancing plans
ahead of our second quarter earnings call."
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, a
non-GAAP financial measure. 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, less interest
income, 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 by
external users of our financial statements such as investors,
commercial banks, research analysts and others.
Adjusted EBITDA is used to assess:
- the ability of our assets to generate cash sufficient to make
future potential cash distributions and support our
indebtedness;
- the financial performance of our assets without regard to
financing methods, capital structure or historical cost basis;
- our operating performance and return on capital as compared to
those of other entities in the midstream energy sector, without
regard to financing or capital structure;
- the attractiveness of capital projects and acquisitions and the
overall rates of return on alternative investment opportunities;
and
- the financial performance of our assets without regard to (i)
income or loss from equity method investees, (ii) the impact of the
timing of minimum volume commitments shortfall payments under our
gathering agreements or (iii) the timing of impairments or other
income or expense items that we characterize as unrepresentative of
our ongoing operations.
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:
- certain items excluded from adjusted EBITDA are significant
components in understanding and assessing an entity's financial
performance, such as an entity's cost of capital and tax
structure;
- adjusted EBITDA does not reflect our cash expenditures or
future requirements for capital expenditures or contractual
commitments;
- adjusted EBITDA does not reflect changes in, or cash
requirements for, our working capital needs; and
- although depreciation and amortization are noncash charges, the
assets being depreciated and amortized will often have to be
replaced in the future, and adjusted EBITDA does not reflect any
cash requirements for such replacements.
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.
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-oriented 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 investment in Double E Pipeline, LLC, which is
developing natural gas transmission infrastructure that will
provide 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 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 2020 Annual Report on Form 10-K filed with
the Securities and Exchange Commission (the
"SEC") on March 4, 2021, 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.
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SOURCE Summit Midstream Partners, LP