- First quarter 2022 net loss of $5
thousand, adjusted EBITDA of $56.8
million and cash flow available for distributions
("Distributable Cash Flow" or "DCF") of $31.8 million
- Generated significant free cash flow in Q1 2022, reducing total
debt by $34 million
- 21% increase in crude oil volumes relative to Q4 2021, due to
strong performance from 25 wells brought online over the past two
quarters
- In January 2022, completed Series
A Preferred exchange offer, resulting in an aggregate reduction in
Series A Preferred face value of 78% since July of 2020
- Revised 2022 Adjusted EBITDA guidance range of $205 million to $220
million, an increase of $5
million relative to the midpoint of SMLP's initial guidance
range
- Updated 2022 well connect guidance range includes 30 to 40
incremental well connects in the second half of 2022, represents a
nearly 40% increase in customer activity levels assumed in SMLP's
initial full year 2022 guidance range provided in February
- Increased the lower end of SMLP's initial 2022 adjusted EBITDA
guidance by $10 million, establishing
a new 2022 adjusted EBITDA guidance range of $205 million to $220
million
HOUSTON, May 3, 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
March 31, 2022, including a net loss
of $5 thousand, adjusted EBITDA of
$56.8 million and DCF of $31.8 million. Operated natural gas throughput
from wholly owned assets averaged 1,306 million cubic feet per day
("MMcf/d") and liquids throughput averaged 65 thousand barrels per
day ("Mbbl/d"). Total quarterly natural gas gathering volume
throughput, including SMLP's proportionate share from OGC, was up
by 24 MMcf/d relative to the fourth quarter of 2021, primarily
because of strong performance from wells that were connected near
the end of calendar 2021, including 8 wells turned-in-line behind
SMLP's wholly owned and operated assets and 3 wells connected
behind OGC. First quarter 2022 liquids volume increased by 3
Mbbl/d, or 4.8% relative to the fourth quarter of 2021 due to the
impacts from 25 new wells that were connected over the past two
quarters. We estimate that operational and weather-related
interruptions impacted liquids volumes by 2 Mbbl/d to 3 Mbbl/d
during the quarter.
Heath Deneke, President, Chief
Executive Officer and Chairman, commented, "Summit's first quarter
2022 financial and operating results were ahead of internal
expectations, driven by strong performance from recent wells turned
in line and lower than anticipated operating expenses for the
quarter. Industry fundamentals have continued to improve as
indicated by a 17% increase in WTI futures and 29% increase in
Henry Hub futures, along with an approximate 20% increase in US Rig
count since the beginning of the year. At Summit, our most recent
producer guidance now includes an additional 30 to 40 well
connections in the second half of 2022 relative to our original
guidance range, with most of this new activity occurring in the
Williston and Barnett basins. As a
result, SMLP is increasing its 2022 Adjusted EBITDA guidance to a
new range of $205 to $220 million. Given the anticipated timing of
these incremental wells, we except this activity will mostly impact
our fourth quarter results in 2022 and will also help build
momentum as we head into 2023. We believe that this increase in
activity levels signal that producers are beginning to build
confidence in fundamentals that support the back end of the forward
price curves, which we believe is a key catalyst for commencing
reinvestment for growth into the future. We are actively working
with our customers to evaluate further price response drilling
activities in late 2022 and early 2023 across many of the basins we
operate in and will continue to provide updates throughout the year
as these plans further develop."
"We continue to be encouraged by recent pick-up in producer
activity and overall well results in the Williston, which is highlighted by the 21%
quarter over quarter growth in crude oil volumes. In the
Barnett, we had 3 new wells brought online behind our system at the
end of April that are producing more than 7 MMcf/d each, which
exceeded our internal expectations. Based on updated producer
guidance, we expect an incremental 5 to 9 well connections in the
Barnett for the remainder of 2022. There are also over 20 recently
issued permits behind the Barnett system that provide a strong
leading indicator for potential additional activity in late 2022
and 2023 in the segment."
"While the level of expected well connect activity in 2022 for
the Northeast Segment hasn't changed since the beginning of the
year, we continue to be impressed with recent well results. Between
OGC and our wholly-owned SMU system,
there were 7 new wells that came online late in the fourth quarter
of 2021 that produced over 200 MMcf/d (gross) in the first quarter
of 2022. We are also excited about potential upstream M&A
activity in the Utica region,
which could be a very strong catalyst for incremental development
behind our systems in the coming years."
"Producer activity remains very strong in New Mexico with approximately 95 rigs
currently running in Eddy and
Lea counties, which are the key
supply catchment areas for the Double E pipeline. At the
current level of rig activity, our projections indicate that
existing residue gas takeaway capacity out of New Mexico will become constrained in late
2023 to early 2024 timeframe. Our team is advancing commercial
discussions with multiple counterparties to secure incremental
contracts to help fill up the remainder of our current 1.35 Bcf/d
of Double E capacity. Furthermore, given the projected
tightening of gas pipeline takeaway capacity out of New Mexico, we are advancing plans to
potentially expand Double E to approximately 2.0 Bcf/d via a timely
and cost-effective midpoint compression expansion project. We
believe Double E is very well positioned to meet the growing needs
for incremental gas takeaway capacity out of New Mexico while providing customers access to
highly desirable Gulf Coast markets via existing and planned
downstream pipelines originating out of Waha, TX."
First Quarter 2022 Business Highlights
In the first quarter of 2022, SMLP's average daily natural gas
throughput for its wholly owned operated systems decreased by 1
MMcf/d to 1306 MMcf/d, and liquids volumes increased by 4.8% to 65
Mbbl/d, relative to the fourth quarter of 2021. Double E Pipeline
transported an average of 187 MMcf/d of gross volumes and generated
$3.2 million of adjusted EBITDA net
to SMLP for the first quarter of 2022. SMLP's customers are
currently operating seven drilling rigs on acreage behind SMLP's
gathering systems and have approximately 39 wells that have been
drilled and are expected to be turned in line later this year.
Natural gas price driven segments:
- Natural gas price driven segments had combined quarterly
segment adjusted EBITDA of $45.1
million and combined capital expenditures of $4.6 million in the first quarter of 2022.
- Northeast segment adjusted EBITDA of $20.1 million increased by $1.1 million from the fourth quarter of 2021,
primarily due to a 4.4% increase in volume on our wholly owned
systems and 12.9% increase in volume at our Ohio Gathering Joint
Venture. Volume growth was primarily driven by 4 new wells that
were brought online behind our wholly-owned SMU system. These wells have produced over 100
MMcf/d since early December. We generally expect these wells to
hold flat for 4 to 6 months before they begin declining. There were
3 new wet gas wells that came online in late fourth quarter 2021
behind our OGC joint venture that also produced over 100 MMcf/d
during the quarter, in addition to 2 lower volume condensate wells
that were connected during the quarter. There are currently no DUCs
behind our wholly-owned system and 14 DUCs behind the OGC system.
We are optimistic about activity given current and expected natural
gas prices and the productivity of wells in the region.
- Piceance segment adjusted EBITDA of $15.8 million was generally in line with the
fourth quarter of 2021. Volume throughput decreased 5 MMcf/d, or
1.6%, primarily due to natural production declines, partially
offset by volume from a new 9-well pad that was turned-in line in
October 2021. No new wells were
connected during the quarter. We still expect 17 permitted wells to
be turned-in-line by one of our anchor customers in the latter half
of 2022.
- Barnett segment adjusted EBITDA of $9.3
million decreased by $0.9
million relative to the fourth quarter of 2021 primarily due
to a 25 MMcf/d volume throughput decrease to 197 MMcf/d as a result
of natural production declines. The new 7 well pad that was
connected in the third quarter of 2021 averaged 32.6 MMcf/d during
Q1 2022, a 14.6 MMcf/d decrease from Q4 2021, accounting for nearly
60% of the quarterly volume throughput decline in the segment.
There were 4 new wells connected to the system at the end of
April 2022 and there is currently 1
DUC behind the system. Based on permitting activity, rig activity
and updated producer guidance, we now expect 8 to 12 total well
connections in 2022, which should result in segment adjusted EBITDA
at or above the high end of our original segment guidance range of
$26 million to $28 million.
Oil price driven segments
- Oil price driven segments generated $20.0 million of combined segment adjusted EBITDA
in the first quarter of 2022 and had combined capital expenditures
of $3.7 million.
- Permian segment adjusted EBITDA of $4.2
million increased $1.6 million
relative to the fourth quarter of 2021, primarily due to the first
quarter of 2022 being the first full quarter of contribution from
Double E. Volumes on our wholly-owned system increased 3 MMcf/d
relative to the fourth quarter of 2021, primarily due to an
increase in offload volumes and a 4-well pad that was directly
connected to the system. Double E gross volume throughput averaged
187 MMcf/d during the first quarter of 2022, an increase of 131
MMcf/d relative to the prior quarter.
- Rockies segment adjusted EBITDA of $15.8
million increased $0.9 million
relative to the fourth quarter of 2021, primarily due to
approximately $2.0 million reduction
in operating expenses and a 21.2% increase in crude oil volumes.
There were 25 crude oil wells connected to the system over the past
two quarters, with 16 in 2021 and 9 in the first quarter of 2022.
Results were partially offset by a 12.9% decrease in produced water
volume and a 14.7% decrease in natural gas volume. There were
several operational and weather-related interruptions that impacted
volumes for the quarter. We estimate that these interruptions
reduced liquids volumes by approximately 2.0 Mbbl/d to 3.0 Mbbl/d
and natural gas volumes by approximately 0.6 MMcf/d to 0.8 MMcf/d.
We estimate that this impacted gross margin by approximately
$0.4 to $0.6
million during the quarter. While we continue to experience
some of these interruptions thus far, we would expect them to be
fully resolved by the end of the second quarter of 2022. We remain
very encouraged by the commodity price environment and recent
updated customer plans regarding additional wells on the system.
There are 19 DUCs behind the system and based on updated producer
guidance, we now expect approximately 45 – 65 new wells on the
system for 2022 versus our original guidance range of 20 – 30 new
wells. As a result of this incremental activity, we now expect to
trend toward the high end of our Adjusted EBITDA segment guidance
range of $53 million to $57 million.
The following table presents average daily throughput by
reportable segment for the periods indicated:
|
Three Months Ended
March 31,
|
|
2022
|
|
2021
|
Average daily
throughput (MMcf/d):
|
|
|
|
Northeast
(1)
|
741
|
|
747
|
Rockies
|
29
|
|
35
|
Permian
(1)
|
27
|
|
29
|
Piceance
|
312
|
|
340
|
Barnett
|
197
|
|
195
|
Aggregate average daily throughput
|
1,306
|
|
1,346
|
|
|
|
|
Average daily
throughput (Mbbl/d):
|
|
|
|
Rockies
|
65
|
|
65
|
Aggregate average daily throughput
|
65
|
|
65
|
|
|
|
|
Ohio Gathering
average daily throughput (MMcf/d) (2)
|
598
|
|
558
|
|
|
|
|
Double E average
daily throughput (MMcf/d) (3)
|
187
|
|
—
|
__________
|
|
|
(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
March 31,
|
|
2022
|
|
2021
|
|
(In
thousands)
|
Reportable segment
adjusted EBITDA (1):
|
|
|
|
Northeast
(2)
|
$
20,068
|
|
$
20,193
|
Rockies
|
15,830
|
|
16,152
|
Permian
(3)
|
4,149
|
|
1,250
|
Piceance
|
15,768
|
|
21,034
|
Barnett
|
9,286
|
|
8,016
|
Total
|
$
65,101
|
|
$
66,645
|
Less: Corporate
and Other (4)
|
8,350
|
|
6,202
|
Adjusted EBITDA
|
$
56,751
|
|
$
60,443
|
__________
|
|
|
(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 $8.7
million in the first quarter of 2022, inclusive of
maintenance capital expenditures of $2.9
million. Capital expenditures in the first quarter of 2022
were primarily related to growth projects to connect new pad sites
in our Northeast, Rockies and Permian segments.
|
Three Months Ended
March 31,
|
|
2022
|
|
2021
|
|
(In
thousands)
|
Cash paid for
capital expenditures (1):
|
|
|
|
Northeast
|
$
3,403
|
|
$
1,623
|
Rockies
|
2,573
|
|
601
|
Permian
|
1,154
|
|
210
|
Piceance
|
936
|
|
93
|
Barnett
|
243
|
|
60
|
Total reportable segment capital expenditures
|
$
8,309
|
|
$
2,587
|
Corporate and
Other
|
394
|
|
23
|
Total cash paid for capital expenditures
|
$
8,703
|
|
$
2,610
|
__________
|
|
|
(1)
|
Excludes cash paid for
capital expenditures by Ohio Gathering and Double E due to equity
method accounting.
|
Capital & Liquidity
As of March 31, 2022, SMLP had $233
million drawn under its $400
million ABL Revolver and $148.6
million of borrowing availability, after accounting for
$18.4 million of issued, but undrawn
letters of credit. As of March 31, 2022, SMLP's gross
availability based on the borrowing base calculation in the credit
agreement was $695 million, which is
$295 million greater than the
$400 million of lender commitments to
the ABL Revolver. As of March 31, 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 1.0x relative to a maximum first lien
leverage ratio of 2.5x. As of March 31, 2022, SMLP reported a
total leverage ratio of 5.12x.
As of March 31, 2022, the Permian Transmission Credit
Facility balance was $158.9 million,
a reduction of $1.1 million relative
to December 31, 2021 due to the
commencement of mandatory amortization in March of 2022. The
Permian Transmission Term Loan remains non-recourse to SMLP.
MVC Shortfall Payments
SMLP billed its customers $7.9
million in the first 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 first quarter of 2022, SMLP
recognized $10.2 million of gathering
revenue associated with MVC shortfall payments. SMLP had no
adjustments to MVC shortfall payments in the first quarter of 2022.
SMLP's MVC shortfall payment mechanisms contributed $10.2 million of total adjusted EBITDA in the
first quarter of 2022.
|
Three Months Ended
March 31, 2022
|
|
MVC
Billings
|
|
Gathering
revenue
|
|
Adjustments
to MVC
shortfall
payments
|
|
Net impact to
adjusted
EBITDA
|
|
|
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
|
$
—
|
|
$
2,246
|
|
$
—
|
|
$
2,246
|
Piceance
|
6,131
|
|
6,131
|
|
—
|
|
6,131
|
Northeast
|
1,510
|
|
1,510
|
|
—
|
|
1,510
|
Total MVC shortfall payment adjustments
|
$
7,641
|
|
$
9,887
|
|
$
—
|
|
$
9,887
|
|
|
|
|
|
|
|
|
Total (1)
|
$
7,929
|
|
$
10,175
|
|
$
—
|
|
$ 10,175
|
__________
|
|
|
(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 March 31, 2022. Unpaid distributions on the
Series A Preferred Units will continue to accumulate.
First Quarter 2022 Earnings Call Information
SMLP will host a conference call at 10:00
a.m. Eastern on Wednesday, May 4,
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 passcode
73884207. 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:
- 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.
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
|
|
|
March 31,
2022
|
|
December 31,
2021
|
|
(In
thousands)
|
ASSETS
|
|
|
|
Cash and cash equivalents
|
$
8,559
|
|
$
7,349
|
Restricted cash
|
3,921
|
|
12,223
|
Accounts receivable
|
59,209
|
|
62,121
|
Other current assets
|
4,771
|
|
5,676
|
Total current assets
|
76,460
|
|
87,369
|
Property, plant and
equipment, net
|
1,706,146
|
|
1,726,082
|
Intangible assets,
net
|
167,649
|
|
172,927
|
Investment in equity
method investees
|
525,387
|
|
523,196
|
Other noncurrent
assets
|
19,138
|
|
12,888
|
TOTAL ASSETS
|
$
2,494,780
|
|
$
2,522,462
|
|
|
|
|
LIABILITIES AND
CAPITAL
|
|
|
|
Trade accounts payable
|
$
13,546
|
|
$
10,498
|
Accrued expenses
|
15,859
|
|
14,462
|
Deferred revenue
|
9,999
|
|
10,374
|
Ad
valorem taxes payable
|
2,847
|
|
8,570
|
Accrued compensation and employee benefits
|
6,040
|
|
11,019
|
Accrued interest
|
31,359
|
|
12,737
|
Accrued environmental remediation
|
2,340
|
|
3,068
|
Current portion of long-term debt
|
6,072
|
|
—
|
Other current liabilities
|
6,559
|
|
8,509
|
Total current
liabilities
|
94,621
|
|
79,237
|
Long-term
debt
|
1,315,495
|
|
1,355,072
|
Noncurrent deferred
revenue
|
41,575
|
|
42,570
|
Noncurrent accrued
environmental remediation
|
2,362
|
|
2,538
|
Other noncurrent
liabilities
|
31,568
|
|
32,357
|
Total liabilities
|
1,485,621
|
|
1,511,774
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Mezzanine
Capital
|
|
|
|
Subsidiary Series A
Preferred Units
|
112,038
|
|
106,325
|
|
|
|
|
Partners'
Capital
|
|
|
|
Series A Preferred
Units
|
79,402
|
|
169,769
|
Common limited partner
capital
|
817,719
|
|
734,594
|
Total partners'
capital
|
897,121
|
|
904,363
|
TOTAL LIABILITIES AND CAPITAL
|
$
2,494,780
|
|
$
2,522,462
|
|
|
|
|
SUMMIT MIDSTREAM
PARTNERS, LP AND SUBSIDIARIES
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
Three Months Ended
March 31,
|
|
2022
|
|
2021
|
|
(In thousands,
except per-unit amounts)
|
Revenues:
|
|
|
|
Gathering services and
related fees
|
$
64,020
|
|
$
70,348
|
Natural gas, NGLs and
condensate sales
|
22,458
|
|
20,763
|
Other
revenues
|
9,648
|
|
8,207
|
Total revenues
|
96,126
|
|
99,318
|
Costs and
expenses:
|
|
|
|
Cost of natural gas and
NGLs
|
22,251
|
|
20,476
|
Operation and
maintenance
|
17,062
|
|
16,593
|
General and
administrative
|
12,960
|
|
10,344
|
Depreciation and
amortization
|
30,445
|
|
28,511
|
Transaction
costs
|
246
|
|
—
|
(Gain) loss on asset
sales, net
|
3
|
|
(136)
|
Long-lived asset
impairment
|
14
|
|
1,492
|
Total costs and expenses
|
82,981
|
|
77,280
|
Other income,
net
|
—
|
|
55
|
Gain (loss) on interest
rate swaps
|
7,028
|
|
(6)
|
Loss on ECP
Warrants
|
—
|
|
(1,475)
|
Interest
expense
|
(24,163)
|
|
(13,953)
|
Income (loss) before income taxes and equity method
investment income
|
(3,990)
|
|
6,659
|
Income tax (expense)
benefit
|
(50)
|
|
14
|
Income from equity
method investees
|
4,035
|
|
2,315
|
Net
income (loss)
|
$
(5)
|
|
$
8,988
|
|
|
|
|
Net income per
limited partner unit:
|
|
|
|
Common unit – basic
|
$
1.35
|
|
$
0.13
|
Common unit – diluted
|
$
1.32
|
|
$
0.12
|
|
|
|
|
Weighted-average
limited partner units outstanding:
|
|
|
|
Common units – basic
|
9,670
|
|
6,125
|
Common units – diluted
|
9,892
|
|
6,260
|
SUMMIT MIDSTREAM
PARTNERS, LP AND SUBSIDIARIES
UNAUDITED OTHER
FINANCIAL AND OPERATING DATA
|
|
|
Three Months Ended
March 31,
|
|
2022
|
|
2021
|
|
(In
thousands)
|
Other financial
data:
|
|
|
|
Net income
(loss)
|
$
(5)
|
|
$
8,988
|
Net cash provided by
operating activities
|
46,046
|
|
51,430
|
Capital
expenditures
|
8,703
|
|
2,610
|
Contributions to equity
method investees
|
8,444
|
|
5,619
|
Adjusted
EBITDA
|
56,751
|
|
60,443
|
Cash flow available for
distributions (1)
|
$
31,755
|
|
$
46,163
|
Distributions
(2)
|
n/a
|
|
n/a
|
|
|
|
|
Operating
data:
|
|
|
|
Aggregate average daily
throughput – natural gas (MMcf/d)
|
1,306
|
|
1,346
|
Aggregate average daily
throughput – liquids (Mbbl/d)
|
65
|
|
65
|
|
|
|
|
Ohio Gathering average
daily throughput (MMcf/d) (3)
|
598
|
|
558
|
Double E average daily
throughput (MMcf/d) (4)
|
187
|
|
—
|
__________
|
|
|
(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
March 31,
|
|
2022
|
|
2021
|
|
(In
thousands)
|
Reconciliations of
net income to adjusted EBITDA and Distributable
Cash Flow:
|
|
|
|
Net income
(loss)
|
$
(5)
|
|
$
8,988
|
Add:
|
|
|
|
Interest expense
|
24,163
|
|
13,953
|
Income tax expense (benefit)
|
50
|
|
(14)
|
Depreciation and amortization (1)
|
30,679
|
|
28,746
|
Proportional adjusted EBITDA for equity method investees
(2)
|
10,452
|
|
6,872
|
Adjustments related to capital reimbursement activity
(3)
|
(1,728)
|
|
(1,245)
|
Unit-based and noncash compensation
|
1,690
|
|
1,967
|
Gain on asset sales, net
|
3
|
|
(136)
|
Long-lived asset impairment
|
14
|
|
1,492
|
Other, net (4)
|
(4,532)
|
|
2,135
|
Less:
|
|
|
|
Income from equity method investees
|
4,035
|
|
2,315
|
Adjusted EBITDA
|
$
56,751
|
|
$
60,443
|
Less:
|
|
|
|
Cash interest paid
|
3,474
|
|
12,885
|
Cash paid for taxes
|
—
|
|
—
|
Senior notes interest adjustment (5)
|
18,605
|
|
512
|
Maintenance capital expenditures
|
2,917
|
|
883
|
Cash flow available for
distributions (6)
|
$
31,755
|
|
$
46,163
|
__________
|
|
|
(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 months ended March 31, 2022,
the amount includes $7.0 million of realized and unrealized gains
related to the fair value of interest rate swaps and $2.0 million
of severance expenses. For the three months ended March 31, 2021,
the amount includes $1.5 million loss related to the change in the
fair value of our derivatives, $0.7 million of restructuring
expenses and $0.2 million of severance expenses.
|
|
|
(5)
|
Senior notes interest
adjustment represents the net of interest expense accrued and paid
during the period. Interest on the 5.5% senior notes was paid in
cash semi-annually in arrears on February 15 and August 15.
Interest on the 5.75% senior notes is paid in cash semi-annually in
arrears on April 15 and October 15 until maturity in April 2025.
Interest on the 8.5% 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
|
|
|
Three Months Ended
March 31,
|
|
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
|
$
46,046
|
|
$
51,430
|
Add:
|
|
|
|
Interest expense, excluding amortization of debt issuance
costs
|
21,929
|
|
12,236
|
Income tax expense (benefit)
|
50
|
|
(14)
|
Loss on ECP warrants and unsettled interest rate
swaps
|
7,504
|
|
(1,475)
|
Changes in operating assets and liabilities
|
(12,467)
|
|
(2,933)
|
Proportional adjusted EBITDA for equity method investees
(1)
|
10,452
|
|
6,872
|
Adjustments related to capital reimbursement activity
(2)
|
(1,728)
|
|
(1,245)
|
Other, net (3)
|
(4,532)
|
|
2,135
|
Less:
|
|
|
|
Distributions from equity method investees
|
10,224
|
|
6,268
|
Noncash lease expense
|
279
|
|
289
|
Adjusted EBITDA
|
$
56,751
|
|
$
60,449
|
Less:
|
|
|
|
Cash interest paid
|
3,474
|
|
12,885
|
Cash paid for taxes
|
—
|
|
—
|
Senior notes interest adjustment (4)
|
18,605
|
|
512
|
Maintenance capital expenditures
|
2,917
|
|
883
|
Cash flow available for
distributions (5)
|
$
31,755
|
|
$
46,169
|
__________
|
|
|
(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 three months ended March 31, 2022,
the amount includes $7.0 million of realized and unrealized gains
related to the fair value of interest rate swaps and $2.0 million
of severance expenses. For the three months ended March 31, 2021,
the amount includes $1.5 million loss related to the change in the
fair value of our derivatives, $0.7 million of restructuring
expenses and $0.2 million of severance expenses.
|
|
|
(4)
|
Senior notes interest
adjustment represents the net of interest expense accrued and paid
during the period. Interest on the 5.5% senior notes is paid in
cash semi-annually in arrears on February 15 and August 15 until
maturity in August 2022. Interest on the 5.75% senior notes is paid
in cash semi-annually in arrears on April 15 and October 15 until
maturity in April 2025.
|
|
|
(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.
|
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SOURCE Summit Midstream Partners, LP