HOUSTON, May 7, 2021 /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, 2021,
including net income of $9.0 million,
adjusted EBITDA of $60.4 million and
DCF of $46.2 million. Operated
natural gas volume throughput averaged 1,346 million cubic feet per
day ("MMcf/d") and liquids volume throughput averaged 65 thousand
barrels per day ("Mbbl/d"). Operated natural gas volumes
decreased 6.3% relative to the fourth quarter of 2020, largely due
to natural production declines and impacts from severe winter
weather in some segments, partially offset by volumes from six new
well connections during the quarter in the Utica Shale and Permian
segments. Quarterly liquids volume throughput decreased by
8.5% relative to the fourth quarter of 2020 as there were no new
liquids wells connected during the quarter.
Heath Deneke, President, Chief
Executive Officer and Chairman, commented, "Summit's financial
results exceeded internal expectations for the quarter with
$60.4 million of adjusted EBITDA,
largely due to our continued focus on reducing operating expenses,
together with strong performance from a new Utica pad which came online in March, ahead of
schedule, and at initial production rates that exceeded
expectations by nearly 20%. While it is still early, these
wells continue to materially outperform original expectations
underlying our 2021 financial guidance."
"With respect to our expense improvement, towards the end of
2020, we implemented structural and organizational changes across
our business, aimed at further streamlining operations and
minimizing costs. The first quarter of 2021 is the first
period in which the majority of these savings materialized and is
evidenced by approximately $4.9
million lower operating expenses than our quarterly average
in 2020. I want to thank the entire Summit team for the continuous
improvement mindset and commitment to continue to find ways to
improve our operating efficiency and effectiveness, without
compromising our commitment to safety, compliance, the environment
and providing excellent service for our customers."
"We remain focused on executing the second phase of our balance
sheet transformation initiatives, which includes addressing our
2022 debt maturities and capturing discounts where available on
other fixed capital obligations. During the first quarter, we
utilized our internally generated cash flow, together with
$8 million of cash received from the
sale of surplus compressor equipment, to reduce our revolving
credit facility balance by $55
million. This paydown represents nearly 40% of our 2021 debt
reduction guidance and we remain on track to generate sufficient
cash, after interest expense and capital expenditures, to reduce
outstanding indebtedness this year by approximately $130 million to $150
million."
"In March, we launched a Series A preferred equity for SMLP
common equity exchange, with the intention of enhancing common
equity value by reducing principal at discounts to face value and
eliminating accumulated unpaid distributions. This transaction
was successful and upon closing in April, we exchanged $18.7 million Series A preferred units, or
approximately 11.5% of the outstanding Series A preferred units,
for approximately 560,000 SMLP common units with a value of
approximately $12.3 million, and we
eliminated $2.5 million of accrued
unpaid distributions."
"Addressing our 2022 debt maturities is a top priority for
Summit today. We are actively working on a holistic solution for
our senior unsecured notes and revolving credit facility that
mature in 2022 and we have generated strong interest from numerous
banks and bond investors regarding our refinancing
solution. Our goals are to not only extend our 2022 debt
maturities, but also to provide a significant amount of additional
financial flexibility over the coming years to continue to improve
the balance sheet and transform the overall business. We are
very excited about the progress we've made on the refinancing
efforts to date and look forward to providing additional details
ahead of our next scheduled earnings call."
"We achieved several key milestones on the Double E project
during the first quarter, including closing $175 million of non-recourse senior secured
credit facilities and commencing construction activities, which
were both critical steps towards remaining on schedule. Our
wholly owned, unrestricted subsidiary, Summit Permian Transmission,
LLC, utilized the credit facilities to fund all of Summit's
$4.6 million investment in Double E
in the first quarter, and we expect that these credit facilities
will fund the vast majority of Summit's remaining Double E capital
commitment. All of the pipeline and rights-of-way have been
procured and pipeline construction is underway. We continue to
expect that Double E will be completed at or below the current
$425 million cost estimate (8/8ths),
of which, approximately $35 million
remains in unidentified project contingency. We continue to
expect Double E to be commissioned in the fourth quarter of
2021."
"Overall, Summit is off to a strong start to 2021 and I continue
to be encouraged by a number of positive market developments that
could be a catalyst for increased customer activity on our systems
later in the year. At this point however, we are maintaining
our full year 2021 adjusted EBITDA range of $210 million to $230
million for the year."
First Quarter 2021 Business Highlights
In the first
quarter of 2021, SMLP's average daily natural gas throughput for
its operated systems decreased 6.3% to 1,346 MMcf/d, and liquids
volumes decreased 8.5% to 65 Mbbl/d, relative to the fourth quarter
of 2020. SMLP's customers had approximately 29 DUCs in
inventory upstream of its systems as of March 31, 2021, with visible line of sight to
completions for the majority of these DUCs in the second and third
quarters of the year.
Core Focus Areas:
- Core Focus Areas generated combined quarterly segment adjusted
EBITDA of $31.5 million and had
combined capital expenditures of $2.3
million in the first quarter of 2021.
- Utica Shale segment adjusted EBITDA totaled $7.7 million in the first quarter of 2021, a
$1.0 million decrease from the fourth
quarter of 2020, which was driven by natural production declines on
existing wells connected to the SMU
system. In March, a new four well pad that is subject to our
previously announced gathering agreement amendment to incentivize
accelerated upstream activity, was turned-in-line. These four
wells have been outperforming expectations by nearly 20% and are
currently flowing in excess of 190 MMcf/d. There were six DUCs in
the Utica Shale segment at the end of the first quarter, which were
all turned-in-line in April of 2021.
- Ohio Gathering segment adjusted EBITDA totaled $6.9 million in the first quarter of 2021, a
$1.6 million decrease from the fourth
quarter of 2020, driven by 10.2% lower volume throughput. There
were four wells connected during the quarter, which partially
offset natural production declines. At the end of the quarter,
there were five DUCs, three of which came online in April and two
that are expected to be turned-in-line by the end of the third
quarter of 2021.
- Williston Basin segment
adjusted EBITDA totaled $10.8 million
in the first quarter of 2021, a 5.5% decrease from the fourth
quarter of 2020, primarily as a result of reduced volume throughput
and impacts from an MVC that expired at the end of 2020, offset
partially by lower operating expenses. No new wells were
connected during the quarter, resulting in decreased volume
throughput of 2 MMcf/d for natural gas and 6 Mbbl/d for
liquids. There were eight DUCs in inventory behind our
Williston Basin systems as of
March 31, 2021, and all are expected
to be turned-in-line by the end of the third quarter of 2021.
- DJ Basin segment adjusted EBITDA totaled $5.3 million in the first quarter of 2021, a
20.6% increase from the fourth quarter of 2020 due to positive
impacts from cost reductions and a change in customer volume mix,
resulting in increased revenue from processing
activities. Quarterly volume throughput decreased by
approximately 2 MMcf/d, or 8.0%, primarily due to natural
production declines. As of March 31,
2021, there were no DUCs behind our DJ Basin infrastructure
expected to be turned-in-line in the near-term.
- Permian Basin segment adjusted EBITDA totaled $0.7 million in the first quarter of 2021, an
increase of approximately $0.6
million compared to the prior quarter, largely due to
reduced operating expenses, despite a volume decrease of
approximately 12.1%. Two wells were turned-in-line during the
quarter; however, natural production declines combined with lower
producer volumes due to severe winter weather during part of the
quarter caused volume throughput to be approximately 4 MMcf/d lower
than the fourth quarter of 2020. Now that these two wells have been
turned-in-line, all new wells contemplated in our full year 2021
guidance have been connected.
Legacy Areas:
- Legacy Areas generated $34.7
million of combined segment adjusted EBITDA in the first
quarter of 2021 and had combined capital expenditures of
$0.3 million.
- Piceance Basin segment adjusted EBITDA totaled $21.0 million in the first quarter of 2021, a
$1.0 million decrease from the fourth
quarter of 2020, primarily due to increased spend on operations and
maintenance activities and property taxes as well as impacts from
lower volume throughput. Lower volume throughput of 7 MMcf/d, or
2.0%, compared to the fourth quarter of 2020, was primarily a
result of natural production declines.
- Barnett Shale segment adjusted EBITDA totaled $8.0 million in the first quarter of 2021, a 5.2%
increase from the fourth quarter of 2020, primarily due to customer
margin mix and lower operating expenses. Throughput volumes
decreased by 4.4% due to natural production declines, which was
offset partially by increased volumes from workovers and
recompletions of existing wells. Our customers have 8 new
wells that are either being drilled or awaiting completion behind
our system that we expect to be turned-in-line in the third quarter
of 2021.
- Marcellus Shale segment adjusted
EBITDA totaled $5.6 million in the
first quarter of 2021, a 3.2% decrease relative to the fourth
quarter of 2020, driven primarily by an 8.9% decrease in volume
throughput to 337 MMcf/d as a result of natural production
declines. Our anchor customer had nine DUCs in inventory
behind our Marcellus Shale
infrastructure at the end of the first quarter, all of which we
expect will be turned-in-line during the second quarter of
2021.
The following table presents average daily throughput by
reportable segment for the periods indicated:
|
|
Three months ended
March 31,
|
|
|
|
2021
|
|
|
2020
|
|
Average daily
throughput (MMcf/d):
|
|
|
|
|
|
|
|
|
Utica
Shale
|
|
|
410
|
|
|
|
222
|
|
Williston
Basin
|
|
|
12
|
|
|
|
14
|
|
DJ Basin
|
|
|
23
|
|
|
|
32
|
|
Permian
Basin
|
|
|
29
|
|
|
|
33
|
|
Piceance
Basin
|
|
|
340
|
|
|
|
383
|
|
Barnett
Shale
|
|
|
195
|
|
|
|
233
|
|
Marcellus
Shale
|
|
|
337
|
|
|
|
364
|
|
Aggregate average
daily throughput
|
|
|
1,346
|
|
|
|
1,281
|
|
|
|
|
|
|
|
|
|
|
Average daily
throughput (Mbbl/d):
|
|
|
|
|
|
|
|
|
Williston
Basin
|
|
|
65
|
|
|
|
98
|
|
Aggregate average
daily throughput
|
|
|
65
|
|
|
|
98
|
|
|
|
|
|
|
|
|
|
|
Ohio Gathering
average daily throughput
(MMcf/d) (1)
|
|
|
558
|
|
|
|
610
|
|
__________
(1) Gross basis, represents 100% of volume throughput for
Ohio Gathering, subject to a one-month lag.
The following table presents adjusted EBITDA by reportable
segment for the periods indicated:
|
|
Three months ended
March 31,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
(In
thousands)
|
|
Reportable segment
adjusted EBITDA (1):
|
|
|
|
|
|
|
|
|
Utica
Shale
|
|
$
|
7,719
|
|
|
$
|
5,928
|
|
Ohio Gathering
(2)
|
|
|
6,872
|
|
|
|
7,939
|
|
Williston
Basin
|
|
|
10,805
|
|
|
|
16,192
|
|
DJ Basin
|
|
|
5,347
|
|
|
|
5,911
|
|
Permian
Basin
|
|
|
709
|
|
|
|
1,581
|
|
Piceance
Basin
|
|
|
21,034
|
|
|
|
23,557
|
|
Barnett
Shale
|
|
|
8,016
|
|
|
|
8,760
|
|
Marcellus
Shale
|
|
|
5,602
|
|
|
|
5,320
|
|
Total
|
|
$
|
66,104
|
|
|
$
|
75,188
|
|
Less: Corporate
and Other (3)
|
|
|
5,661
|
|
|
|
9,286
|
|
Adjusted
EBITDA
|
|
$
|
60,443
|
|
|
$
|
65,902
|
|
__________
(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) 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)
|
Represents 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 in
Ohio Gathering during the respective period.
|
(3)
|
Corporate and
Other represents those results that are not specifically
attributable to a reportable segment (such as Double E) 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
$2.6 million in the first quarter of
2021, inclusive of maintenance capital expenditures of $0.9 million. Capital expenditures in the
first quarter of 2021 were primarily related to growth projects to
connect new pad sites in our Utica Shale segment.
|
|
Three months ended
March 31,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
(In
thousands)
|
|
Cash paid for
capital expenditures (1):
|
|
|
|
|
|
|
|
|
Utica
Shale
|
|
$
|
1,517
|
|
|
$
|
909
|
|
Williston
Basin
|
|
|
301
|
|
|
|
4,943
|
|
DJ Basin
|
|
|
300
|
|
|
|
6,298
|
|
Permian
Basin
|
|
|
210
|
|
|
|
3,281
|
|
Piceance
Basin
|
|
|
93
|
|
|
|
346
|
|
Barnett
Shale
|
|
|
60
|
|
|
|
657
|
|
Marcellus
Shale
|
|
|
106
|
|
|
|
422
|
|
Total reportable
segment capital expenditures
|
|
|
2,587
|
|
|
|
16,856
|
|
Corporate and
Other
|
|
|
23
|
|
|
|
1,727
|
|
Total cash paid for
capital expenditures
|
|
$
|
2,610
|
|
|
$
|
18,583
|
|
__________
(1) Excludes cash paid for capital expenditures by Ohio
Gathering and Double E (after June
2019) due to equity method accounting.
Capital & Liquidity
As of March 31, 2021, SMLP had $275.9 million of undrawn commitments under its
$1.1 billion revolving credit
facility, after accounting for $22.1
million of issued, but undrawn letters of
credit. Subject to covenant limits, our available borrowing
capacity at March 31, 2021 totaled
approximately $115.0
million. SMLP also had $16.2
million of unrestricted cash on hand as of March 31, 2021.
Based upon the terms of SMLP's revolving credit facility, and
total outstanding debt, net of cash, of $1.28 billion (inclusive of $493.5 million of senior unsecured notes), SMLP's
total leverage ratio and first lien leverage ratio (as defined in
the credit agreement) as of March 31,
2021, were 5.0 to 1.0 and 3.1 to 1.0, respectively, relative
to maximum threshold limits of 5.75 to 1.0 and 3.50 to 1.0.
Double E Update
On March 8,
2021, SMLP's wholly-owned, unrestricted subsidiary, Summit
Permian Transmission, LLC, closed on $175
million of commercial bank credit facilities, which it
utilized to fund cash investments of $4.6
million in the first quarter of 2021, to finance the
development of its 70% equity investment in the Double E pipeline
project. These credit facilities are non-recourse to SMLP and
are expected to fund the vast majority of SMLP's remaining
investment in Double E. SMLP's 70% share of the total expected
Double E capital costs continues to be approximately $300 million, of which approximately $136 million had been funded from inception of
the project through March 31,
2021. Construction activities on Double E commenced in the
first quarter of 2021 and the project continues to progress on
schedule, with an estimated in-service date of the fourth quarter
of 2021.
MVC Shortfall Payments
SMLP billed its customers
$11.4 million in the first quarter of
2021 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 2021, SMLP recognized $13.5 million of gathering revenue associated
with MVC shortfall payments. SMLP had no adjustments to MVC
shortfall payments in the first quarter of 2021 related to
shortfall payment adjustments. SMLP's MVC shortfall payment
mechanisms contributed $13.5 million
of total adjusted EBITDA in the first quarter of 2021.
|
Three months ended
March 31, 2021
|
|
|
MVC
Billings
|
|
|
|
Gathering
revenue
|
|
|
Adjustments
to MVC
shortfall
payments
|
|
|
Net impact
to adjusted
EBITDA
|
|
|
(In
thousands)
|
|
Net change in
deferred revenue related to MVC
shortfall payments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Piceance
Basin
|
$
|
3,663
|
|
|
|
$
|
3,663
|
|
|
$
|
—
|
|
|
$
|
3,663
|
|
Total net
change
|
$
|
3,663
|
|
|
|
$
|
3,663
|
|
|
$
|
—
|
|
|
$
|
3,663
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MVC shortfall
payment adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Williston
Basin
|
$
|
—
|
|
|
|
$
|
2,145
|
|
|
$
|
—
|
|
|
$
|
2,145
|
|
Piceance
Basin
|
|
6,164
|
|
|
|
|
6,164
|
|
|
|
—
|
|
|
|
6,164
|
|
Marcellus
Shale
|
|
1,551
|
|
|
|
|
1,551
|
|
|
|
—
|
|
|
|
1,551
|
|
Total MVC shortfall
payment adjustments
|
$
|
7,715
|
|
|
|
$
|
9,860
|
|
|
$
|
—
|
|
|
$
|
9,860
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
(1)
|
$
|
11,378
|
|
|
|
$
|
13,523
|
|
|
$
|
—
|
|
|
$
|
13,523
|
|
__________
(1) Exclusive of Ohio Gathering due to equity method
accounting.
Quarterly Distribution
The board of directors of
SMLP's general partner continues 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 for the period ended March 31,
2021. Unpaid distributions on the Series A preferred units
will continue to accrue.
First Quarter 2021 Earnings Call Information
SMLP will
host a conference call at 10:00 a.m.
Eastern on Friday, May 7, 2021, 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 50148779. 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.
Upcoming Investor Conference
Members of SMLP's senior
management team will virtually attend the 2021 EIC Investor
Conference: Connecting the Energy Value Chain on May 19, 2021. Presentation materials
associated with this event will be accessible through the Investors
section of SMLP's website at www.summitmidstream.com in advance 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, 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.
SUMMIT MIDSTREAM
PARTNERS, LP AND SUBSIDIARIES
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
(In
thousands)
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
16,233
|
|
|
$
|
15,544
|
|
Restricted
cash
|
|
|
8,067
|
|
|
|
—
|
|
Accounts receivable,
net
|
|
|
54,301
|
|
|
|
61,932
|
|
Other current
assets
|
|
|
12,167
|
|
|
|
4,623
|
|
Total current
assets
|
|
|
90,768
|
|
|
|
82,099
|
|
Property, plant and
equipment, net
|
|
|
1,788,222
|
|
|
|
1,817,546
|
|
Intangible assets,
net
|
|
|
192,378
|
|
|
|
199,566
|
|
Investment in equity
method investees
|
|
|
394,405
|
|
|
|
392,740
|
|
Other noncurrent
assets
|
|
|
6,792
|
|
|
|
7,866
|
|
TOTAL
ASSETS
|
|
$
|
2,472,565
|
|
|
$
|
2,499,817
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
CAPITAL
|
|
|
|
|
|
|
|
|
Trade accounts
payable
|
|
$
|
15,873
|
|
|
$
|
11,878
|
|
Accrued
expenses
|
|
|
11,666
|
|
|
|
13,036
|
|
Deferred
revenue
|
|
|
10,017
|
|
|
|
9,988
|
|
Ad valorem taxes
payable
|
|
|
7,589
|
|
|
|
9,086
|
|
Accrued compensation
and employee benefits
|
|
|
4,481
|
|
|
|
9,658
|
|
Accrued
interest
|
|
|
8,512
|
|
|
|
8,007
|
|
Accrued environmental
remediation
|
|
|
1,885
|
|
|
|
1,392
|
|
Other current
liabilities
|
|
|
14,682
|
|
|
|
5,363
|
|
Total current
liabilities
|
|
|
74,705
|
|
|
|
68,408
|
|
Long-term
debt
|
|
|
1,304,918
|
|
|
|
1,347,326
|
|
Noncurrent deferred
revenue
|
|
|
47,644
|
|
|
|
48,250
|
|
Noncurrent accrued
environmental remediation
|
|
|
1,368
|
|
|
|
1,537
|
|
Other noncurrent
liabilities
|
|
|
21,700
|
|
|
|
21,747
|
|
Total
liabilities
|
|
|
1,450,335
|
|
|
|
1,487,268
|
|
|
|
|
|
|
|
|
|
|
Mezzanine
Capital
|
|
|
|
|
|
|
|
|
Subsidiary Series A
Preferred Units
|
|
|
93,590
|
|
|
|
89,658
|
|
|
|
|
|
|
|
|
|
|
Partners'
Capital
|
|
|
|
|
|
|
|
|
Series A Preferred
Units
|
|
|
178,712
|
|
|
|
174,425
|
|
Common limited
partner capital
|
|
|
749,928
|
|
|
|
748,466
|
|
Total partners'
capital
|
|
|
928,640
|
|
|
|
922,891
|
|
TOTAL LIABILITIES AND
CAPITAL
|
|
$
|
2,472,565
|
|
|
$
|
2,499,817
|
|
SUMMIT MIDSTREAM
PARTNERS, LP AND SUBSIDIARIES
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
(In thousands,
except per-unit amounts)
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Gathering services
and related fees
|
|
$
|
70,348
|
|
|
$
|
83,792
|
|
Natural gas, NGLs and
condensate sales
|
|
|
20,763
|
|
|
|
13,780
|
|
Other
revenues
|
|
|
8,207
|
|
|
|
7,331
|
|
Total
revenues
|
|
|
99,318
|
|
|
|
104,903
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Cost of natural gas
and NGLs
|
|
|
20,476
|
|
|
|
8,225
|
|
Operation and
maintenance
|
|
|
16,593
|
|
|
|
21,811
|
|
General and
administrative (1)
|
|
|
10,344
|
|
|
|
16,561
|
|
Depreciation and
amortization
|
|
|
28,511
|
|
|
|
29,666
|
|
Transaction
costs
|
|
|
—
|
|
|
|
11
|
|
(Gain) loss on
asset sales, net
|
|
|
(136)
|
|
|
|
115
|
|
Long-lived asset
impairment
|
|
|
1,492
|
|
|
|
3,821
|
|
Total costs and
expenses
|
|
|
77,280
|
|
|
|
80,210
|
|
Other income
(expense), net
|
|
|
55
|
|
|
|
(427)
|
|
Interest
expense
|
|
|
(13,953)
|
|
|
|
(23,828)
|
|
Loss on ECP Warrants
and other
|
|
|
(1,481)
|
|
|
|
—
|
|
Income before income
taxes and
equity method investment income
|
|
|
6,659
|
|
|
|
438
|
|
Income tax
benefit
|
|
|
14
|
|
|
|
13
|
|
Income from equity
method investees
|
|
|
2,315
|
|
|
|
3,311
|
|
Net income
|
|
$
|
8,988
|
|
|
$
|
3,762
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
per limited partner unit:
|
|
|
|
|
|
|
|
|
Common unit
– basic
|
|
$
|
0.13
|
|
|
$
|
(0.80)
|
|
Common unit
– diluted
|
|
$
|
0.12
|
|
|
$
|
(0.80)
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
limited partner units outstanding:
|
|
|
|
|
|
|
|
|
Common units
– basic
|
|
|
6,125
|
|
|
|
3,021
|
|
Common units
– diluted
|
|
|
6,260
|
|
|
|
3,021
|
|
__________
(1) For the three months ended March 31,
2021, the amount includes $0.7
million of restructuring expenses and $0.2 million of severance expenses. For the three
months ended March 31, 2020, the
amount includes $2.8 million of
restructuring expenses.
SUMMIT MIDSTREAM
PARTNERS, LP AND SUBSIDIARIES
|
UNAUDITED OTHER
FINANCIAL AND OPERATING DATA
|
|
|
|
|
Three months ended
March 31,
|
|
|
2021
|
|
|
2020
|
|
|
(Dollars in
thousands)
|
|
Other financial
data:
|
|
|
|
|
|
|
|
Net income
|
$
|
8,988
|
|
|
$
|
3,762
|
|
Net cash provided by
operating activities
|
$
|
51,430
|
|
|
$
|
70,201
|
|
Capital
expenditures
|
$
|
2,610
|
|
|
$
|
18,583
|
|
Contributions to
equity method investees
|
$
|
5,619
|
|
|
$
|
58,033
|
|
Adjusted
EBITDA
|
$
|
60,443
|
|
|
$
|
65,902
|
|
Cash flow available
for distributions (1)
|
$
|
46,163
|
|
|
$
|
38,048
|
|
Distributions
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
Operating
data:
|
|
|
|
|
|
|
|
Aggregate average
daily throughput – natural
gas (MMcf/d)
|
|
1,346
|
|
|
|
1,281
|
|
Aggregate average
daily throughput – liquids (Mbbl/d)
|
|
65
|
|
|
|
98
|
|
|
|
|
|
|
|
|
|
Ohio Gathering
average daily throughput (MMcf/d) (2)
|
|
558
|
|
|
|
610
|
|
__________
(1) Cash flow available for distributions is also referred
to as Distributable Cash Flow, or DCF.
(2) Gross basis, represents 100% of volume throughput for
Ohio Gathering, subject to a one-month lag.
SUMMIT MIDSTREAM
PARTNERS, LP AND SUBSIDIARIES
|
UNAUDITED
RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
(In
thousands)
|
|
Reconciliations of
net income or loss to
adjusted EBITDA and distributable
cash flow:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
8,988
|
|
|
$
|
3,762
|
|
Add:
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
13,953
|
|
|
|
23,828
|
|
Income tax
benefit
|
|
|
(14)
|
|
|
|
(13)
|
|
Depreciation and
amortization (1)
|
|
|
28,746
|
|
|
|
29,900
|
|
Proportional adjusted
EBITDA for equity
method investees (2)
|
|
|
6,872
|
|
|
|
7,939
|
|
Adjustments related to
MVC shortfall
payments (3)
|
|
|
—
|
|
|
|
(5,442)
|
|
Adjustments related to
capital reimbursement
activity (4)
|
|
|
(1,245)
|
|
|
|
(211)
|
|
Unit-based and noncash
compensation
|
|
|
1,967
|
|
|
|
2,723
|
|
(Gain) loss on
asset sales, net
|
|
|
(136)
|
|
|
|
115
|
|
Long-lived asset
impairment
|
|
|
1,492
|
|
|
|
3,821
|
|
Other, net
(5)
|
|
|
2,135
|
|
|
|
2,791
|
|
Less:
|
|
|
|
|
|
|
|
|
Income from equity
method investees
|
|
|
2,315
|
|
|
|
3,311
|
|
Adjusted
EBITDA
|
|
$
|
60,443
|
|
|
$
|
65,902
|
|
Less:
|
|
|
|
|
|
|
|
|
Cash interest
paid
|
|
|
12,885
|
|
|
|
19,660
|
|
Cash paid for
taxes
|
|
|
—
|
|
|
|
—
|
|
Senior notes interest
adjustment (6)
|
|
|
512
|
|
|
|
3,063
|
|
Maintenance capital
expenditures
|
|
|
883
|
|
|
|
5,131
|
|
Cash flow available
for distributions (7)
|
|
$
|
46,163
|
|
|
$
|
38,048
|
|
|
|
|
|
|
|
|
|
|
Distributions
|
|
$
|
—
|
|
|
$
|
—
|
|
__________
(1) Includes the amortization expense associated with our
favorable gas gathering contracts as reported in other
revenues.
(2) Reflects our proportionate share of Ohio Gathering adjusted
EBITDA, subject to a one-month lag.
(3) Adjustments related to MVC shortfall payments are recognized
ratably over the term of the associated MVC.
(4) 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").
(5) Represents items of income or loss that we characterize as
unrepresentative of our ongoing operations. 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.
For the three months ended March 31,
2020, the amount represents restructuring expenses.
(6) 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.
(7) 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,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
(In
thousands)
|
|
Reconciliation of
net cash provided by operating activities to
adjusted
EBITDA and distributable cash flow:
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
51,430
|
|
|
$
|
70,201
|
|
Add:
|
|
|
|
|
|
|
|
|
Interest expense,
excluding amortization of debt issuance costs
|
|
|
12,236
|
|
|
|
22,246
|
|
Income tax
benefit
|
|
|
(14)
|
|
|
|
(13)
|
|
Loss on ECP warrants
and other
|
|
|
(1,481)
|
|
|
|
—
|
|
Changes in operating
assets and liabilities
|
|
|
(2,933)
|
|
|
|
(23,642)
|
|
Proportional adjusted
EBITDA for equity method investees (1)
|
|
|
6,872
|
|
|
|
7,939
|
|
Adjustments related to
MVC shortfall payments (2)
|
|
|
—
|
|
|
|
(5,442)
|
|
Adjustments related to
capital reimbursement activity (3)
|
|
|
(1,245)
|
|
|
|
(211)
|
|
Other, net
(4)
|
|
|
2,135
|
|
|
|
2,791
|
|
Less:
|
|
|
|
|
|
|
|
|
Distributions from
equity method investees
|
|
|
6,268
|
|
|
|
7,494
|
|
Noncash lease
expense
|
|
|
289
|
|
|
|
473
|
|
Adjusted
EBITDA
|
|
$
|
60,443
|
|
|
$
|
65,902
|
|
Less:
|
|
|
|
|
|
|
|
|
Cash interest
paid
|
|
|
12,885
|
|
|
|
19,660
|
|
Cash paid for
taxes
|
|
|
—
|
|
|
|
—
|
|
Senior notes interest
adjustment (5)
|
|
|
512
|
|
|
|
3,063
|
|
Maintenance capital
expenditures
|
|
|
883
|
|
|
|
5,131
|
|
Cash flow available
for distributions (6)
|
|
$
|
46,163
|
|
|
$
|
38,048
|
|
__________
(1) Reflects our proportionate share of Ohio Gathering adjusted
EBITDA, subject to a one-month lag.
(2) Adjustments related to MVC shortfall payments are recognized
ratably over the term of the associated MVC.
(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, 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.
For the three months ended March 31,
2020, the amount represents restructuring 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 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.
(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.
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SOURCE Summit Midstream Partners, LP