THE WOODLANDS, Texas,
Aug. 3, 2017 /PRNewswire/ --
- Second quarter 2017 net income of $11.2
million
- Second quarter 2017 adjusted EBITDA of $72.6 million and DCF of $50.0 million
- Second quarter 2017 distribution coverage ratio was 1.11x
- Strong natural gas volume growth in the second quarter of 2017
offset by liquids volume decline; liquids volumes impacted by
deferred completion activities
- In July 2017, SMLP announced a
new $110.0 million gathering and
processing project in the Delaware
Basin for XTO Energy
Summit Midstream Partners, LP (NYSE: SMLP) announced today its
financial and operating results for the three and six months ended
June 30, 2017. SMLP reported
net income of $11.2 million for the
second quarter of 2017 compared to a net loss of $50.6 million for the prior-year period.
Net cash provided by operations totaled $58.9 million in the second quarter of 2017
compared to $64.7 million in the
prior-year period. Adjusted EBITDA totaled $72.6 million and distributable cash flow totaled
$50.0 million for the second quarter
of 2017 compared to $72.4 million and
$51.0 million, respectively, for the
prior-year period.
Natural gas volume throughput averaged 1,780 million cubic feet
per day ("MMcf/d") in the second quarter of 2017, an increase of
17.7% compared to 1,512 MMcf/d in the prior-year period, and an
increase of 9.4% compared to 1,627 MMcf/d in the first quarter of
2017. Crude oil and produced water volume throughput in the
second quarter of 2017 averaged 68.9 thousand barrels per day
("Mbbl/d"), a decrease of 19.9% compared to 86.0 Mbbl/d in the
prior-year period, and a decrease of 9.8% compared to 76.4 Mbbl/d
in the first quarter of 2017. SMLP's natural gas volume
throughput metrics exclude its proportionate share of volume
throughput from its 40% ownership interest in Ohio Gathering.
Steve Newby, President and Chief
Executive Officer, commented, "SMLP's financial and operating
results for the second quarter of 2017 were in line with our
expectations, and we continue to expect volume and cash flow growth
in the second half of 2017. Based on recent feedback from
certain customers, we expect well completion activity, particularly
in the Williston, Piceance and
Utica segments, to be slower than
originally expected. In many cases, well completion activity
will be pushed to later dates in the second half of 2017 and in
some cases, from the second half of 2017 into the first half of
2018. As a result, we have lowered the midpoint of our 2017
adjusted EBITDA financial guidance by 4.1% from $305.0 million to $292.5 million.
SMLP had a number of positive developments in the second quarter
of 2017 that we expect will benefit our business over the long
term. We announced a new gathering and processing project for
XTO Energy in the Delaware Basin
which is expected to commence operations in the second quarter of
2018. Our largest customer, Encana, sold its Piceance acreage
to a private equity-backed E&P company that we expect will be
significantly more active behind our Piceance gathering system
going forward. We commissioned the TPL-7 connector project
behind our Summit Midstream Utica system which helped drive
sequential quarterly volume growth on that system from 275 MMcf/d
in the first quarter of 2017 to 413 MMcf/d in the second quarter of
2017. We amended our $1.25
billion revolving credit facility and extended the term of
the facility from November 2018 to
May 2022. Our customers continued their pace of drilling
behind our systems with 11 to 12 rigs working throughout the second
quarter.
We expect volume and cash flow growth from our existing asset
base for the balance of 2017. We are encouraged by our team's
commercial efforts, including our recently announced Delaware Basin organic development project,
which is expected to be operational in the first half of 2018 at a
total investment cost of $110.0
million. We are also currently evaluating a number of
new commercial opportunities in and around our existing service
area and we expect that these opportunities will lead to
incremental growth beginning in 2018."
SMLP reported net income of $10.7
million for the first six months of 2017 compared to a net
loss of $54.2 million for the
prior-year period. Net cash provided by operations totaled
$121.3 million for the first six
months of 2017 compared to $131.5
million in the prior-year period. SMLP reported
adjusted EBITDA of $144.0 million and
distributable cash flow of $103.0
million compared to $142.4
million and $102.5 million,
respectively for the prior-year period. Natural gas volume
throughput averaged 1,704 MMcf/d for the first six months of 2017
compared to 1,518 MMcf/d in the prior-year period. Crude oil
and produced water volume throughput averaged 72.6 Mbbl/d in the
first six months of 2017 compared to 90.5 Mbbl/d in the prior-year
period.
2017 Financial Guidance
On July 27, 2017, SMLP revised its
2017 financial guidance due to our expectation for a slower pace of
well completions in the second half of 2017. The original
2017 adjusted EBITDA guidance range of $295.0 million to $315.0 million was revised to a
new range of $285.0 million to $300.0
million. At the midpoint, 2017 adjusted EBITDA was
reduced by 4.1% from $305.0 million
to $292.5 million.
As a result of our recently announced organic development
project in the Delaware Basin,
partially offset by slower capital spending across our other
basins, SMLP also updated its 2017 capital expenditure guidance to
a new range of $125.0 million to $150.0
million, including maintenance capex of $15.0 million to $20.0 million. SMLP's 2017
capex guidance reflects the inclusion of our contributions to
equity method investees. SMLP expects its full year
distribution coverage will range from 1.10x to 1.20x.
Second Quarter 2017 Segment Results
The following table presents average daily throughput by
reportable segment:
|
Three months
ended
June
30,
|
|
Six months
ended
June
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Average daily
throughput (MMcf/d):
|
|
|
|
|
|
|
|
Utica
Shale
|
413
|
|
|
167
|
|
|
344
|
|
|
150
|
|
Williston
Basin
|
20
|
|
|
24
|
|
|
19
|
|
|
24
|
|
Piceance/DJ
Basins
|
596
|
|
|
564
|
|
|
605
|
|
|
568
|
|
Barnett
Shale
|
271
|
|
|
341
|
|
|
279
|
|
|
341
|
|
Marcellus
Shale
|
480
|
|
|
416
|
|
|
457
|
|
|
435
|
|
Aggregate average
daily throughput
|
1,780
|
|
|
1,512
|
|
|
1,704
|
|
|
1,518
|
|
|
|
|
|
|
|
|
|
Average daily
throughput (Mbbl/d):
|
|
|
|
|
|
|
|
Williston
Basin
|
68.9
|
|
|
86.0
|
|
|
72.6
|
|
|
90.5
|
|
Aggregate average
daily throughput
|
68.9
|
|
|
86.0
|
|
|
72.6
|
|
|
90.5
|
|
|
|
|
|
|
|
|
|
Ohio Gathering
average daily throughput (MMcf/d) (1)
|
706
|
|
|
937
|
|
|
737
|
|
|
903
|
|
__________
(1)
|
Gross basis,
represents 100% of volume throughput for Ohio Gathering, based on a
one-month lag.
|
Utica Shale
The Utica Shale reportable segment includes Summit Midstream
Utica ("SMU"), the natural gas
gathering system operated by SMLP which is currently in service and
under development in Belmont and
Monroe counties in southeastern
Ohio. Summit Utica gathers
and delivers dry natural gas to interconnections with a third-party
intrastate pipeline that provides access to the Clarington
Hub.
Segment adjusted EBITDA for the second quarter of 2017 totaled
$9.5 million, up 102% from
$4.7 million for the prior-year
period, primarily due to higher volume throughput across the
SMU system. Volume throughput at
SMU averaged 413 MMcf/d in the second
quarter of 2017 compared to 167 MMcf/d in the prior-year period and
275 MMcf/d in the first quarter of 2017. Volume throughput
for the second quarter of 2017 increased relative to the prior-year
period due to our customers' completion of six new wells behind the
system in the first quarter of 2017 and another five new wells in
the second quarter of 2017. In addition, in April 2017, we commissioned the TPL-7 connector
project, a new pipeline designed to offload capacity constrained
natural gas from a third-party gathering system adjacent to the
SMU system. This project
significantly increased volumes across SMU in the second quarter of 2017.
We have one drilling rig currently running behind our
SMU system and we expect that our
customers will complete another four wells behind the SMU system in the second half of 2017.
Ohio Gathering
The Ohio Gathering reportable segment includes our 40% ownership
interest in Ohio Gathering, a natural gas gathering system spanning
the condensate, liquids-rich and dry gas windows of the Utica Shale
in Harrison, Guernsey, Noble, Belmont and Monroe counties in southeastern Ohio.
This segment also includes our 40% ownership interest in Ohio
Condensate, a condensate stabilization facility located in
Harrison County, Ohio.
Segment adjusted EBITDA for the Ohio Gathering segment includes our
proportional share of adjusted EBITDA from Ohio Gathering and Ohio
Condensate, based on a one-month lag.
Segment adjusted EBITDA for the first quarter of 2017 totaled
$9.6 million, down 24.5% from
$12.7 million for the prior-year
period, primarily due to lower volume throughput on Ohio Gathering
and lower stabilization revenue at Ohio Condensate. Segment
adjusted EBITDA for the second quarter of 2017 was also negatively
impacted by higher operating expenses related to compressor
overhauls in the quarter. Volume throughput on the Ohio
Gathering system, which is based on a one-month lag, averaged 706
MMcf/d, gross, in the second quarter of 2017 compared to 937
MMcf/d, gross, in the prior-year period and 769 MMcf/d, gross, in
the first quarter of 2017. Volume throughput on Ohio
Gathering in the second quarter of 2017 was impacted by natural
production declines from existing wells on the system and was
partially offset by volumes from 10 new condensate wells that were
commissioned during the quarter. Dry natural gas volumes on
the Ohio Gathering system were favorably impacted by the
commissioning of the Larew Compressor Station in March 2017 which lowered pressures across the dry
gas system and facilitated increased volumes.
Our customers are currently running two drilling rigs in Ohio
Gathering's operating footprint. We expect to see the
production volume increase beginning in the third quarter of 2017
based on our customers running five drilling rigs across the Ohio
Gathering system in the first five months of 2017.
Williston Basin
The Bison Midstream, Polar and Divide and Tioga Midstream systems provide our
midstream services for the Williston Basin reportable segment.
Bison Midstream gathers associated natural gas production in
Mountrail and Burke counties in North Dakota and delivers to third-party
pipelines serving a third-party processing plant in Channahon,
Illinois. The Polar and Divide system gathers crude oil production in
Williams and Divide counties in North Dakota and delivers to the COLT and
Basin Transload rail terminals, as well as other third-party,
intra- and interstate pipelines. The Polar and Divide system also gathers and delivers
produced water to various third-party disposal wells in the
region. Tioga Midstream is a crude oil, produced water and
associated natural gas gathering system in Williams County, North Dakota. All crude
oil and natural gas gathered on the Tioga Midstream system is
delivered to third-party pipelines, and all produced water is
delivered to third-party disposal wells.
Segment adjusted EBITDA for the Williston Basin segment totaled $17.2 million for the second quarter of 2017
compared to $19.2 million for the
prior-year period. Compared to the prior-year period, second
quarter 2017 volumes were negatively impacted due to a lack of new
well completions behind our gathering systems during the
quarter. In addition to lower volumes, a certain Williston customer has gathering rates that
reset lower in July 2016 which
negatively impacted our year-over-year comparisons. The
Williston Basin segment benefitted
in the second quarter of 2017 from the recognition of $2.8 million of gathering revenue related to (i)
gathering services fees from previously billed but unearned
revenue, and (ii) crude oil and produced water volumes that a
customer trucked around our gathering system in the second half of
2016.
Liquids volumes averaged 68.9 Mbbl/d in the second quarter of
2017, a decrease of 19.9% over the prior-year period and a decrease
of 9.8% compared to the first quarter of 2017. Lower liquids
volumes were primarily related to natural production declines from
existing wells on the Polar and Divide system as six new wells were completed
late in the second quarter of 2017. Certain of our customers
remain active across the Polar and Divide system, with four drilling rigs
currently working and adding to an existing backlog of
approximately 40 drilled uncompleted wells ("DUCs") currently
behind our Polar and Divide
gathering system. We expect many of these DUCs to begin to be
completed over the next several months. Overall, we expect
the pace of well completions by our customers on the Polar and
Divide system to be slower than
originally anticipated.
Associated natural gas volumes averaged 20 MMcf/d in the second
quarter of 2017, a decrease of 16.7% over the prior-year period and
up 17.6% from the first quarter of 2017. Relative to the
prior-year period, volume declines were primarily related to
natural production declines from existing wells on the Bison
Midstream and Tioga Midstream systems as no new wells were
connected during the quarter. Volumes increased relative to
the first quarter of 2017 due to the severe winter weather that
impacted natural gas volumes in this segment in the first quarter
of 2017.
Piceance/DJ Basins
The Grand River and the Niobrara G&P systems provide our
midstream services for the Piceance/DJ Basins reportable
segment. These systems provide natural gas gathering and
processing services for producers operating in the Piceance Basin
located in western Colorado and
eastern Utah and in the
Denver-Julesburg ("DJ") Basin located in northeastern
Colorado.
Segment adjusted EBITDA totaled $27.3
million for the second quarter of 2017, an increase of 4.0%
from $26.2 million for the prior-year
period. Second quarter 2017 volume throughput averaged 596
MMcf/d, an increase of 5.7% from 564 MMcf/d in the prior-year
period and a decrease of 3.1% from 615 MMcf/d in the first quarter
of 2017. Volume growth relative to the prior-year period was
primarily due to ongoing drilling and completion activity from our
single-basin focused, private equity-backed customers. These
customers commissioned dozens of new wells across our Piceance and
DJ Basin gathering systems in 2016, and in the first quarter of
2017, these customers commissioned another 31 new wells; seven new
wells were commissioned behind our systems late in the second
quarter of 2017. This activity was partially offset by the
impact of our anchor customer's continued suspension of drilling
activities in the basin and the resulting natural declines from
existing production. This impact of our anchor customer's
volume declines was partially offset by higher minimum volume
commitment ("MVC") shortfall payment adjustments associated with
our gas gathering agreements. Certain of our customers remain
active across our Piceance and DJ gathering systems with four
drilling rigs currently working. We expect drilling levels to
increase and volume growth to follow as a result of Caerus' recent
acquisition of Encana's acreage in the Piceance Basin.
Barnett Shale
The DFW Midstream system provides our midstream services for the
Barnett Shale reportable segment. This system gathers and
delivers low-pressure natural gas received from pad sites,
primarily located in southeastern Tarrant
County, Texas, to downstream intrastate pipelines serving
various natural gas hubs in the region.
Segment adjusted EBITDA for the Barnett Shale segment totaled
$13.0 million for the second quarter
of 2017, a decrease of 6.6% from the prior-year period.
Volume throughput of 271 MMcf/d in the second quarter of 2017 was
down 20.5% compared to the prior-year period average of 341 MMcf/d
and down 5.2% from 286 MMcf/d in the first quarter of 2017.
No new wells were completed behind the DFW gathering system
in the second quarter of 2017, but two of our customers resumed
drilling activity behind the DFW system beginning in April
2017. The two new rigs were added by single basin-focused,
private equity-backed customers who acquired the underlying acreage
in the last 18 months. Two workover rigs also continue to
operate behind our system and return several dormant wells to
service. We expect this workover activity will continue
across the second half of 2017 and, together with the expected
completions of the new wells currently being drilled, will increase
volume throughput beginning in the fourth quarter of
2017.
Marcellus Shale
The Mountaineer Midstream system provides our midstream services
for the Marcellus Shale reportable segment. This system gathers
high-pressure natural gas received from upstream pipeline
interconnections with Antero Midstream Partners, LP and Crestwood
Equity Partners LP. Natural gas on the Mountaineer Midstream
system is delivered to the Sherwood Processing Complex located in
Doddridge County, West Virginia.
Segment adjusted EBITDA for the Marcellus Shale segment totaled
$5.4 million for the second quarter
of 2017, an increase of 13.3% from $4.8
million for the prior-year period, primarily due to an
increase in volume throughput, partially offset by $0.5 million of right-of-way repair expenses
incurred during the quarter. Volume throughput for this
segment averaged 480 MMcf/d in the second quarter of 2017, an
increase of 15.4% from 416 MMcf/d in the prior-year period, and an
increase of 10.6% from 434 MMcf/d in the first quarter of
2017. Volume throughput increased relative to the first
quarter of 2017 as a result of our customer completing 11 new wells
behind our system. Although there are no rigs currently
working behind our system, we expect our customer to continue to
complete its inventory of DUCs behind the Mountaineer Midstream
system throughout the balance of the year, which we expect to drive
volumes higher in the third and fourth quarter of 2017.
MVC Shortfall Payments
SMLP billed its customers $9.0
million in the second quarter of 2017 related to MVCs.
For those customers that do not have credit banking
mechanisms in their gathering agreements, or do not have the
ability to use MVC shortfall payments as credits, the MVC shortfall
payments are accounted for as gathering revenue in the period that
they are earned. For the second quarter of 2017, SMLP
recognized $10.2 million of gathering
revenue associated with MVC shortfall payments from certain
customers in the Williston Basin,
Piceance/DJ Basins, Barnett Shale and Marcellus Shale reportable
segments.
MVC shortfall payment adjustments in the second quarter of 2017
totaled $5.6 million and included
($1.2) million of deferred revenue
related to MVC shortfall payments and $6.8
million related to MVC shortfall payment adjustments from
certain customers in the Piceance/DJ Basins, Williston Basin and Barnett Shale reportable
segments.
SMLP's MVC shortfall payment mechanisms contributed $15.7 million of adjusted EBITDA in the second
quarter of 2017.
|
Three months ended
June 30, 2017
|
|
|
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:
|
|
|
|
|
|
|
|
|
Utica
Shale
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Williston
Basin
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Piceance/DJ
Basins
|
3,096
|
|
|
|
4,282
|
|
|
(1,186)
|
|
|
3,096
|
|
Barnett
Shale
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Marcellus
Shale
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total net
change
|
$
|
3,096
|
|
|
|
$
|
4,282
|
|
|
$
|
(1,186)
|
|
|
$
|
3,096
|
|
|
|
|
|
|
|
|
|
|
|
MVC shortfall
payment adjustments:
|
|
|
|
|
|
|
|
|
Utica
Shale
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Williston
Basin
|
1,081
|
|
|
|
1,081
|
|
|
1,982
|
|
|
3,063
|
|
Piceance/DJ
Basins
|
266
|
|
|
|
266
|
|
|
6,522
|
|
|
6,788
|
|
Barnett
Shale
|
3,366
|
|
|
|
3,366
|
|
|
(1,740)
|
|
|
1,626
|
|
Marcellus
Shale
|
1,162
|
|
|
|
1,162
|
|
|
—
|
|
|
1,162
|
|
Total MVC shortfall
payment adjustments
|
$
|
5,875
|
|
|
|
$
|
5,875
|
|
|
$
|
6,764
|
|
|
$
|
12,639
|
|
|
|
|
|
|
|
|
|
|
|
Total
(1)
|
$
|
8,971
|
|
|
|
$
|
10,157
|
|
|
$
|
5,578
|
|
|
$
|
15,735
|
|
|
__________
(1)
|
Exclusive of Ohio
Gathering due to equity method accounting.
|
|
Six months ended
June 30, 2017
|
|
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:
|
|
|
|
|
|
|
|
|
|
Utica
Shale
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Williston
Basin
|
—
|
|
|
|
37,693
|
|
|
(37,693)
|
|
|
—
|
|
|
Piceance/DJ
Basins
|
6,670
|
|
|
|
8,648
|
|
|
(1,978)
|
|
|
6,670
|
|
|
Barnett
Shale
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Marcellus
Shale
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total net
change
|
$
|
6,670
|
|
|
|
$
|
46,341
|
|
|
$
|
(39,671)
|
|
|
$
|
6,670
|
|
|
|
|
|
|
|
|
|
|
|
|
MVC shortfall
payment adjustments:
|
|
|
|
|
|
|
|
|
|
Utica
Shale
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Williston
Basin
|
2,687
|
|
|
|
2,687
|
|
|
3,964
|
|
|
6,651
|
|
|
Piceance/DJ
Basins
|
518
|
|
|
|
518
|
|
|
13,067
|
|
|
13,585
|
|
|
Barnett
Shale
|
3,650
|
|
|
|
3,650
|
|
|
(422)
|
|
|
3,228
|
|
|
Marcellus
Shale
|
2,402
|
|
|
|
2,402
|
|
|
—
|
|
|
2,402
|
|
|
Total MVC shortfall
payment adjustments
|
$
|
9,257
|
|
|
|
$
|
9,257
|
|
|
$
|
16,609
|
|
|
$
|
25,866
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
(1)
|
$
|
15,927
|
|
|
|
$
|
55,598
|
|
|
$
|
(23,062)
|
|
|
$
|
32,536
|
|
|
__________
(1)
|
Exclusive of Ohio
Gathering due to equity method accounting.
|
Capital Expenditures
Capital expenditures totaled $42.2
million in the second quarter of 2017, including
$10.7 million of contributions to
equity method investees and maintenance capital expenditures of
approximately $5.9 million.
Development activities during the second quarter of 2017 were
primarily related to the ongoing expansion of our Summit Midstream
Utica natural gas gathering system as well as the continued
development of certain pipeline and compression expansion projects
in the Williston and Piceance/DJ
Basins segment.
Capital & Liquidity
As of June 30, 2017, SMLP had
$759.0 million of available borrowing
capacity under its $1.25 billion
revolving credit facility, subject to covenant limits. Based
upon the terms of SMLP's revolving credit facility and total
outstanding debt of $1.291 billion
(inclusive of $800.0 million of
senior unsecured notes), SMLP's total leverage ratio and senior
secured leverage ratio (as defined in the credit agreement) as of
June 30, 2017 were 4.35 to 1.0 and
1.65 to 1.0, respectively.
In May 2017, SMLP executed an
amendment and extension of its $1.25
billion revolving credit facility. The maturity date
of the revolving credit facility was extended by approximately 3.5
years, from November 2018 to May
2022. The facility includes a $250.0
million accordion and has the same pricing and a similar
covenant package to the previous facility. The total leverage
ratio financial covenant, as defined in the credit agreement, was
increased from 5.00 to 1.00 to 5.50 to 1.00 in exchange for
including a new senior secured leverage ratio financial covenant of
3.75 to 1.00.
During the second quarter of 2017, SMLP issued 745,848 common
units under its $150.0 million
At-The-Market program raising gross proceeds of $17.3 million.
Deferred Purchase Price Obligation
The consideration for the 2016 Drop Down consisted of (i) an
initial $360.0 million cash payment
(the "Initial Payment") which was funded on March 3, 2016 with borrowings under SMLP's
revolving credit facility and (ii) a deferred payment which will be
paid no later than December 31, 2020
(the "Deferred Purchase Price Obligation" or the "Deferred
Payment," as defined below). At the discretion of the board
of directors of SMLP's general partner, the Deferred Payment can be
made in either cash or SMLP common units, or a combination
thereof.
The Deferred Payment will be equal to: (a) six-and-one-half
(6.5) multiplied by the average Business Adjusted EBITDA of the
2016 Drop Down Assets for 2018 and 2019; less (b) the Initial
Payment; less (c) all capital expenditures incurred for the 2016
Drop Down Assets between March 3, 2016 and December 31, 2019; plus
(d) all Business Adjusted EBITDA from the 2016 Drop Down Assets
between March 3, 2016 and December 31, 2019. SMLP currently
estimates that the undiscounted future value of the Deferred
Payment will be approximately $800.0 million.
Quarterly Distribution
On July 27, 2017, the board of
directors of SMLP's general partner declared a quarterly cash
distribution of $0.575 per unit on
all of its outstanding common units, or $2.30 per unit on an annualized basis, for the
quarter ended June 30, 2017.
This quarterly distribution remains unchanged from the previous
quarter and from the quarter ended June
30, 2016. This distribution will be paid on
August 14, 2017, to unitholders of
record as of the close of business on August
7, 2017.
Second Quarter 2017 Earnings Call Information
SMLP will host a conference call at 10:00
a.m. Eastern on Friday, August 4,
2017, to discuss its quarterly operating and financial
results. Interested parties may participate in the call by
dialing 847-585-4405 or toll-free 888-771-4371 and entering the
passcode 45198036. The conference call will also be webcast
live and can be accessed through the Investors section of SMLP's
website at www.summitmidstream.com.
A replay of the conference call will be available until
August 18, 2017 at 11:59 p.m. Eastern, and can be accessed by
dialing 888-843-7419 and entering the replay passcode
45198036#. An archive of the conference call will also be
available on SMLP's website.
Upcoming Investor Conferences
Members of SMLP's senior management team will participate in the
2017 Citi One-on-One MLP/Midstream Infrastructure Conference being
held in Las Vegas, Nevada on
August 16, 2017 and August 17, 2017. The presentation materials
associated with this event will be accessible through the Investors
section of SMLP's website at www.summitmidstream.com prior to the
beginning of the conference.
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, each 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,
unit-based and noncash compensation, Deferred Purchase Price
Obligation, early extinguishment of debt expense, impairments and
other noncash expenses or losses, less interest income, income tax
benefit, income (loss) from equity method investees and other
noncash income or gains. We define distributable cash flow as
adjusted EBITDA plus cash interest received and cash taxes
received, less cash interest paid, senior notes interest
adjustment, cash taxes paid and maintenance capital
expenditures. Because adjusted EBITDA and distributable cash
flow may be defined differently by other entities in our industry,
our definitions of these non-GAAP financial measures may not be
comparable to similarly titled measures of other entities, thereby
diminishing their utility.
Management uses these non-GAAP financial measures in making
financial, operating and planning decisions and in evaluating our
financial performance. Furthermore, management believes that these
non-GAAP financial measures 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 and distributable cash flow are used as
supplemental financial measures 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
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
noncash income or expense items.
Distributable cash flow is used to assess:
- the ability of our assets to generate cash sufficient to make
future cash distributions and
- the attractiveness of capital projects and acquisitions and the
overall rates of return on alternative investment
opportunities.
Both of these measures have limitations as analytical tools and
investors should not consider them in isolation or as a substitute
for analysis of our results as reported under GAAP. For
example:
- certain items excluded from adjusted EBITDA and distributable
cash flow 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 and distributable cash flow do not reflect our
cash expenditures or future requirements for capital expenditures
or contractual commitments;
- adjusted EBITDA and distributable cash flow do 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 and distributable cash
flow do not reflect any cash requirements for such
replacements.
We compensate for the limitations of adjusted EBITDA and
distributable cash flow as analytical tools by reviewing the
comparable GAAP financial measures, understanding the differences
between the financial measures and incorporating these data points
into our decision-making process. Reconciliations of GAAP to
non-GAAP financial measures are attached to this press release.
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, (ii)
deferred purchase price obligation and (iii) 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 growth-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
services pursuant to primarily long-term and fee-based gathering
and processing agreements with customers and counterparties in five
unconventional resource basins: (i) the Appalachian Basin, which
includes the Marcellus and Utica
shale formations in West Virginia
and Ohio; (ii) the Williston Basin, which includes the Bakken and
Three Forks shale formations in North
Dakota; (iii) the Fort
Worth Basin, which includes the Barnett Shale formation in
Texas; (iv) the Piceance Basin,
which includes the Mesaverde formation as well as the Mancos and Niobrara shale formations in Colorado and Utah; and (v) the Denver-Julesburg Basin,
which includes the Niobrara and
Codell shale formations in Colorado and Wyoming. SMLP is in the process of
developing new gathering and processing infrastructure in a sixth
basin, the Delaware Basin, in
New Mexico. SMLP also owns
substantially all of a 40% ownership interest in Ohio Gathering,
which is developing natural gas gathering and condensate
stabilization infrastructure in the Utica Shale in Ohio. SMLP is headquartered in The Woodlands, Texas, with regional corporate
offices in Denver, Colorado and
Atlanta, Georgia.
About Summit Midstream Partners, LLC
Summit Midstream Partners, LLC ("Summit Investments")
beneficially owns a 34.7% limited partner interest in SMLP and
indirectly owns and controls the general partner of SMLP, Summit
Midstream GP, LLC, which has sole responsibility for conducting the
business and managing the operations of SMLP. Summit Investments is
a privately held company controlled by Energy Capital Partners II,
LLC, and certain of its affiliates. An affiliate of Energy Capital
Partners II, LLC directly owns an 7.9% limited partner interest in
SMLP.
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
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 2016 Annual Report on Form 10-K filed with the
Securities and Exchange Commission on February 27, 2017, and 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.
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, (ii)
deferred purchase price obligation and (iii) 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.
SUMMIT MIDSTREAM
PARTNERS, LP AND SUBSIDIARIES
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
June
30,
2017
|
|
December
31,
2016
|
|
(In
thousands)
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
2,588
|
|
|
$
|
7,428
|
|
Accounts
receivable
|
55,837
|
|
|
97,364
|
|
Other current
assets
|
2,264
|
|
|
4,309
|
|
Total current
assets
|
60,689
|
|
|
109,101
|
|
Property, plant and
equipment, net
|
1,859,953
|
|
|
1,853,671
|
|
Intangible assets,
net
|
402,020
|
|
|
421,452
|
|
Goodwill
|
16,211
|
|
|
16,211
|
|
Investment in equity
method investees
|
701,020
|
|
|
707,415
|
|
Other noncurrent
assets
|
14,457
|
|
|
7,329
|
|
Total
assets
|
$
|
3,054,350
|
|
|
$
|
3,115,179
|
|
|
|
|
|
Liabilities and
Partners' Capital
|
|
|
|
Current
liabilities:
|
|
|
|
Trade accounts
payable
|
$
|
10,327
|
|
|
$
|
16,251
|
|
Accrued
expenses
|
8,278
|
|
|
11,389
|
|
Due to
affiliate
|
470
|
|
|
258
|
|
Deferred
revenue
|
4,745
|
|
|
—
|
|
Ad valorem taxes
payable
|
7,295
|
|
|
10,588
|
|
Accrued
interest
|
17,015
|
|
|
17,483
|
|
Accrued environmental
remediation
|
6,183
|
|
|
4,301
|
|
Other current
liabilities
|
6,305
|
|
|
11,471
|
|
Total current
liabilities
|
60,618
|
|
|
71,741
|
|
Long-term
debt
|
1,280,645
|
|
|
1,240,301
|
|
Deferred Purchase
Price Obligation
|
579,106
|
|
|
563,281
|
|
Deferred
revenue
|
13,049
|
|
|
57,465
|
|
Noncurrent accrued
environmental remediation
|
2,346
|
|
|
5,152
|
|
Other noncurrent
liabilities
|
7,687
|
|
|
7,566
|
|
Total
liabilities
|
1,943,451
|
|
|
1,945,506
|
|
|
|
|
|
Common limited
partner capital
|
1,071,244
|
|
|
1,129,132
|
|
General Partner
interests
|
28,217
|
|
|
29,294
|
|
Noncontrolling
interest
|
11,438
|
|
|
11,247
|
|
Total partners'
capital
|
1,110,899
|
|
|
1,169,673
|
|
Total liabilities and
partners' capital
|
$
|
3,054,350
|
|
|
$
|
3,115,179
|
|
SUMMIT MIDSTREAM
PARTNERS, LP AND SUBSIDIARIES
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
Three months
ended
June
30,
|
|
Six months
ended
June
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(In thousands,
except per-unit amounts)
|
Revenues:
|
|
|
|
|
|
|
|
Gathering services and
related fees
|
$
|
84,801
|
|
|
$
|
76,187
|
|
|
$
|
202,814
|
|
|
$
|
154,287
|
|
Natural gas, NGLs and
condensate sales
|
10,595
|
|
|
8,581
|
|
|
21,715
|
|
|
16,169
|
|
Other
revenues
|
6,396
|
|
|
4,867
|
|
|
13,068
|
|
|
9,750
|
|
Total
revenues
|
101,792
|
|
|
89,635
|
|
|
237,597
|
|
|
180,206
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Cost of natural gas
and NGLs
|
9,099
|
|
|
6,864
|
|
|
18,151
|
|
|
13,154
|
|
Operation and
maintenance
|
24,016
|
|
|
23,410
|
|
|
47,708
|
|
|
49,252
|
|
General and
administrative
|
12,949
|
|
|
12,876
|
|
|
27,081
|
|
|
25,755
|
|
Depreciation and
amortization
|
28,688
|
|
|
27,963
|
|
|
57,257
|
|
|
55,691
|
|
Transaction
costs
|
119
|
|
|
122
|
|
|
119
|
|
|
1,296
|
|
Loss on asset sales,
net
|
67
|
|
|
74
|
|
|
70
|
|
|
11
|
|
Long-lived asset
impairment
|
3
|
|
|
569
|
|
|
287
|
|
|
569
|
|
Total costs and
expenses
|
74,941
|
|
|
71,878
|
|
|
150,673
|
|
|
145,728
|
|
Other
income
|
64
|
|
|
19
|
|
|
135
|
|
|
41
|
|
Interest
expense
|
(17,553)
|
|
|
(16,035)
|
|
|
(34,269)
|
|
|
(31,917)
|
|
Early extinguishment
of debt
|
—
|
|
|
—
|
|
|
(22,020)
|
|
|
—
|
|
Deferred Purchase
Price Obligation
|
5,058
|
|
|
(17,465)
|
|
|
(15,825)
|
|
|
(24,928)
|
|
Income (loss) before
income taxes and loss from equity method investees
|
14,420
|
|
|
(15,724)
|
|
|
14,945
|
|
|
(22,326)
|
|
Income tax benefit
(expense)
|
211
|
|
|
(360)
|
|
|
(241)
|
|
|
(283)
|
|
Loss from equity
method investees
|
(3,385)
|
|
|
(34,471)
|
|
|
(4,041)
|
|
|
(31,611)
|
|
Net income
(loss)
|
$
|
11,246
|
|
|
$
|
(50,555)
|
|
|
$
|
10,663
|
|
|
$
|
(54,220)
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
per limited partner unit:
|
|
|
|
|
|
|
|
Common unit –
basic
|
$
|
0.12
|
|
|
$
|
(0.77)
|
|
|
$
|
0.08
|
|
|
$
|
(0.89)
|
|
Common unit –
diluted
|
$
|
0.12
|
|
|
$
|
(0.77)
|
|
|
$
|
0.08
|
|
|
$
|
(0.89)
|
|
|
|
|
|
|
|
|
|
Weighted-average
limited partner units outstanding:
|
|
|
|
|
|
|
|
Common units –
basic
|
72,532
|
|
|
66,587
|
|
|
72,341
|
|
|
66,540
|
|
Common units –
diluted
|
72,842
|
|
|
66,587
|
|
|
72,708
|
|
|
66,540
|
|
SUMMIT MIDSTREAM
PARTNERS, LP AND SUBSIDIARIES
|
UNAUDITED OTHER
FINANCIAL AND OPERATING DATA
|
|
|
Three months
ended
June
30,
|
|
Six months
ended
June
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(Dollars in
thousands)
|
Other financial
data:
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
11,246
|
|
|
$
|
(50,555)
|
|
|
$
|
10,663
|
|
|
$
|
(54,220)
|
|
|
Net cash provided by
operating activities
|
$
|
58,892
|
|
|
$
|
64,651
|
|
|
$
|
121,341
|
|
|
$
|
131,500
|
|
|
Capital
expenditures
|
$
|
31,484
|
|
|
$
|
30,046
|
|
|
$
|
45,912
|
|
|
$
|
91,372
|
|
|
Contributions to
equity method investees
|
$
|
10,713
|
|
|
$
|
—
|
|
|
$
|
15,649
|
|
|
$
|
15,645
|
|
|
Acquisitions of
gathering systems (1)
|
$
|
—
|
|
|
$
|
(569)
|
|
|
$
|
—
|
|
|
$
|
866,858
|
|
|
Adjusted
EBITDA
|
$
|
72,577
|
|
|
$
|
72,365
|
|
|
$
|
143,987
|
|
|
$
|
142,396
|
|
|
Distributable cash
flow
|
$
|
50,009
|
|
|
$
|
51,024
|
|
|
$
|
102,960
|
|
|
$
|
102,535
|
|
|
Distributions
declared (2)
|
$
|
45,037
|
|
|
$
|
41,045
|
|
|
$
|
89,614
|
|
|
$
|
82,090
|
|
|
Distribution coverage
ratio (3)
|
1.11x
|
|
|
1.24x
|
|
|
1.15x
|
|
|
1.25x
|
|
|
|
|
|
|
|
|
|
|
Operating
data:
|
|
|
|
|
|
|
|
Aggregate average
daily throughput – natural gas (MMcf/d)
|
1,780
|
|
|
1,512
|
|
|
1,704
|
|
|
1,518
|
|
|
Aggregate average
daily throughput – liquids (Mbbl/d)
|
68.9
|
|
|
86.0
|
|
|
72.6
|
|
|
90.5
|
|
|
|
|
|
|
|
|
|
|
Ohio Gathering
average daily throughput (MMcf/d) (4)
|
706
|
|
|
937
|
|
|
737
|
|
|
903
|
|
|
__________
(1) Reflects cash and
noncash consideration, including working capital and capital
expenditure adjustments paid (received), for acquisitions and/or
drop downs.
|
(2) Represents
distributions declared in respect of a given period. For example,
for the three months ended June 30, 2017, represents the
distributions to be paid in August 2017.
|
(3) Distribution
coverage ratio calculation for the three months ended June 30, 2017
and 2016 is based on distributions declared in respect of the
second quarter of 2017 and 2016. Represents the ratio of
distributable cash flow to distributions declared.
|
(4) Gross basis,
represents 100% of volume throughput for Ohio Gathering, based on a
one-month lag.
|
SUMMIT MIDSTREAM
PARTNERS, LP AND SUBSIDIARIES
|
UNAUDITED
RECONCILIATION OF REPORTABLE SEGMENT ADJUSTED EBITDA
|
TO ADJUSTED
EBITDA
|
|
|
Three months
ended
June
30,
|
|
Six months
ended
June
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(In
thousands)
|
Reportable segment
adjusted EBITDA (1):
|
|
|
|
|
|
|
|
Utica
Shale
|
$
|
9,533
|
|
|
$
|
4,727
|
|
|
$
|
17,445
|
|
|
$
|
7,916
|
|
Ohio Gathering
(2)
|
9,606
|
|
|
12,725
|
|
|
18,679
|
|
|
25,113
|
|
Williston
Basin
|
17,155
|
|
|
19,209
|
|
|
34,964
|
|
|
38,929
|
|
Piceance/DJ
Basins
|
27,274
|
|
|
26,231
|
|
|
56,248
|
|
|
51,046
|
|
Barnett
Shale
|
12,998
|
|
|
13,913
|
|
|
25,086
|
|
|
27,990
|
|
Marcellus
Shale
|
5,446
|
|
|
4,807
|
|
|
11,093
|
|
|
9,408
|
|
Total
|
82,012
|
|
|
81,612
|
|
|
163,515
|
|
|
160,402
|
|
Less Corporate and
other (3)
|
9,435
|
|
|
9,247
|
|
|
19,528
|
|
|
18,006
|
|
Adjusted
EBITDA
|
$
|
72,577
|
|
|
$
|
72,365
|
|
|
$
|
143,987
|
|
|
$
|
142,396
|
|
__________
(1) We define segment
adjusted EBITDA as total revenues less total costs and expenses;
plus (i) other income excluding interest income, (ii) our
proportional adjusted EBITDA for equity method investees, (iii)
depreciation and amortization, (iv) adjustments related to MVC
shortfall payments, (v) unit-based and noncash compensation, (vi)
change in the Deferred Purchase Price Obligation, (vii) early
extinguishment of debt expense, (viii) impairments and (ix) other
noncash expenses or losses, less other noncash income or
gains.
|
(2) Represents our
proportional share of adjusted EBITDA for Ohio Gathering, based on
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 in
Ohio Gathering during the respective period.
|
(3) 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, natural gas and crude oil marketing
services, transaction costs, interest expense, early extinguishment
of debt and a change in the Deferred Purchase Price
Obligation.
|
SUMMIT MIDSTREAM
PARTNERS, LP AND SUBSIDIARIES
|
UNAUDITED
RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES
|
|
|
Three months
ended
June
30,
|
|
Six months
ended
June
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(Dollars in
thousands)
|
Reconciliations of
net income or loss to adjusted EBITDA and distributable cash
flow:
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
11,246
|
|
|
$
|
(50,555)
|
|
|
$
|
10,663
|
|
|
$
|
(54,220)
|
|
|
Add:
|
|
|
|
|
|
|
|
Interest
expense
|
17,553
|
|
|
16,035
|
|
|
34,269
|
|
|
31,917
|
|
|
Income tax
expense
|
—
|
|
|
360
|
|
|
241
|
|
|
283
|
|
|
Depreciation and
amortization (1)
|
28,537
|
|
|
28,092
|
|
|
56,955
|
|
|
55,957
|
|
|
Proportional adjusted
EBITDA for equity method investees (2)
|
9,606
|
|
|
12,725
|
|
|
18,679
|
|
|
25,113
|
|
|
Adjustments related to
MVC shortfall payments (3)
|
5,578
|
|
|
11,135
|
|
|
(23,062)
|
|
|
22,277
|
|
|
Unit-based and noncash
compensation
|
1,871
|
|
|
1,994
|
|
|
3,999
|
|
|
3,950
|
|
|
Deferred Purchase
Price Obligation (4)
|
(5,058)
|
|
|
17,465
|
|
|
15,825
|
|
|
24,928
|
|
|
Early extinguishment
of debt (5)
|
—
|
|
|
—
|
|
|
22,020
|
|
|
—
|
|
|
Loss on asset sales,
net
|
67
|
|
|
74
|
|
|
70
|
|
|
11
|
|
|
Long-lived asset
impairment
|
3
|
|
|
569
|
|
|
287
|
|
|
569
|
|
|
Less:
|
|
|
|
|
|
|
|
Income tax
benefit
|
211
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Loss from equity
method investees
|
(3,385)
|
|
|
(34,471)
|
|
|
(4,041)
|
|
|
(31,611)
|
|
|
Adjusted
EBITDA
|
$
|
72,577
|
|
|
$
|
72,365
|
|
|
$
|
143,987
|
|
|
$
|
142,396
|
|
|
Add:
|
|
|
|
|
|
|
|
Cash taxes
received
|
—
|
|
|
—
|
|
|
—
|
|
|
50
|
|
|
Less:
|
|
|
|
|
|
|
|
Cash interest
paid
|
5,342
|
|
|
6,300
|
|
|
33,382
|
|
|
31,464
|
|
|
Senior notes interest
adjustment (6)
|
11,312
|
|
|
9,750
|
|
|
(469)
|
|
|
—
|
|
|
Maintenance capital
expenditures
|
5,914
|
|
|
5,291
|
|
|
8,114
|
|
|
8,447
|
|
|
Distributable cash
flow
|
$
|
50,009
|
|
|
$
|
51,024
|
|
|
$
|
102,960
|
|
|
$
|
102,535
|
|
|
|
|
|
|
|
|
|
|
Distributions
declared (7)
|
$
|
45,037
|
|
|
$
|
41,045
|
|
|
$
|
89,614
|
|
|
$
|
82,090
|
|
|
|
|
|
|
|
|
|
|
Distribution coverage
ratio (8)
|
1.11x
|
|
|
1.24x
|
|
|
1.15x
|
|
|
1.25x
|
|
|
__________
(1) Includes the
amortization expense associated with our favorable and unfavorable
gas gathering contracts as reported in other revenues.
|
(2) Reflects our
proportionate share of Ohio Gathering adjusted EBITDA, based on a
one-month lag.
|
(3) Adjustments
related to MVC shortfall payments account for (i) the net increases
or decreases in deferred revenue for MVC shortfall payments and
(ii) our inclusion of expected annual MVC shortfall
payments.
|
(4) Deferred Purchase
Price Obligation represents the change in the present value of the
Deferred Purchase Price Obligation.
|
(5) Early
extinguishment of debt includes $17.9 million paid for redemption
and call premiums, as well as $4.1 million of unamortized debt
issuance costs which were written off in connection with the
repurchase of the outstanding $300.0 million 7.5% Senior Notes in
the first quarter of 2017.
|
(6) Senior notes
interest adjustment represents the net of interest expense accrued
and paid during the period. Interest on the $300.0 million 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 $500.0 million 5.75% senior notes is paid in cash semi-annually
in arrears on April 15 and October 15, beginning October 15, 2017
until maturity in April 2025.
|
(7) Represents
distributions declared in respect of a given period. For example,
for the three months ended June 30, 2017, represents the
distributions to be paid in August 2017.
|
(8) Distribution
coverage ratio calculation for the three months ended June 30, 2017
and 2016 is based on distributions declared in respect of the
second quarter of 2017 and 2016. Represents the ratio of
distributable cash flow to distributions declared.
|
SUMMIT MIDSTREAM
PARTNERS, LP AND SUBSIDIARIES
|
UNAUDITED
RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES
|
|
|
Six months
ended
June
30,
|
|
2017
|
|
2016
|
|
(In
thousands)
|
Reconciliation of
net cash provided by operating activities to adjusted EBITDA and
distributable cash flow:
|
|
|
|
Net cash provided by
operating activities
|
$
|
121,341
|
|
|
$
|
131,500
|
|
Add:
|
|
|
|
Interest expense,
excluding amortization of debt issuance costs
|
32,197
|
|
|
29,970
|
|
Income tax
expense
|
241
|
|
|
283
|
|
Changes in operating
assets and liabilities
|
12,896
|
|
|
(42,566)
|
|
Proportional adjusted
EBITDA for equity method investees (1)
|
18,679
|
|
|
25,113
|
|
Adjustments related to
MVC shortfall payments (2)
|
(23,062)
|
|
|
22,277
|
|
Less:
|
|
|
|
Distributions from
equity method investees
|
18,003
|
|
|
24,181
|
|
Write-off of debt
issuance costs
|
302
|
|
|
—
|
|
Adjusted
EBITDA
|
$
|
143,987
|
|
|
$
|
142,396
|
|
Add:
|
|
|
|
Cash taxes
received
|
—
|
|
|
50
|
|
Less:
|
|
|
|
Cash interest
paid
|
33,382
|
|
|
31,464
|
|
Senior notes interest
adjustment (3)
|
(469)
|
|
|
—
|
|
Maintenance capital
expenditures
|
8,114
|
|
|
8,447
|
|
Distributable cash
flow
|
$
|
102,960
|
|
|
$
|
102,535
|
|
__________
(1) Reflects our
proportionate share of Ohio Gathering adjusted EBITDA, based on a
one-month lag.
|
(2) Adjustments
related to MVC shortfall payments account for (i) the net increases
or decreases in deferred revenue for MVC shortfall payments and
(ii) our inclusion of expected annual MVC shortfall
payments.
|
(3) Senior notes
interest adjustment represents the net of interest expense accrued
and paid during the period. Interest on the $300.0 million 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 $500.0 million 5.75% senior notes is paid in cash semi-annually
in arrears on April 15 and October 15, beginning October 15, 2017
until maturity in April 2025.
|
View original content with
multimedia:http://www.prnewswire.com/news-releases/summit-midstream-partners-lp-reports-second-quarter-2017-financial-results-300499458.html
SOURCE Summit Midstream Partners, LP