THE WOODLANDS, Texas,
Aug. 6, 2015 /PRNewswire/
-- Summit Midstream Partners, LP (NYSE: SMLP) announced today
its financial and operating results for the three and six months
ended June 30, 2015. SMLP
reported adjusted EBITDA of $53.7
million and adjusted distributable cash flow of $40.4 million for the second quarter of 2015
compared to $50.6 million and
$37.5 million, respectively, for the
second quarter of 2014. Adjusted EBITDA for the second
quarter of 2015 was impacted by $0.6
million of transaction costs related to the $290.0 million Polar and Divide acquisition in May 2015. SMLP reported net income of
$5.0 million for the second quarter
of 2015 compared to $5.6 million for
the second quarter of 2014. Natural gas volume throughput
averaged 1,519 million cubic feet per day ("MMcf/d") in the second
quarter of 2015 compared to 1,403 MMcf/d in the second quarter of
2014 and 1,583 MMcf/d in the first quarter of 2015. Crude oil
and produced water volume throughput averaged 54.3 thousand barrels
per day ("Mbbl/d") in the second quarter of 2015 compared to 30.1
Mbbl/d in the second quarter of 2014 and 48.1 Mbbl/d in the first
quarter of 2015.
For the six months ended June 30,
2015, SMLP reported adjusted EBITDA of $108.7 million and adjusted distributable cash
flow of $81.4 million compared to
$97.6 million and $71.7 million, respectively, for the comparable
period in 2014. SMLP reported net income of $10.1 million for the first six months of 2015
compared to $11.5 million for the
first six months of 2014. Natural gas volume throughput
averaged 1,552 MMcf/d for the first six months of 2015 compared to
1,356 MMcf/d for the comparable period in 2014. Crude oil and
produced water volume throughput averaged 51.2 Mbbl/d for the first
six months of 2015 compared to 26.9 Mbbl/d for the comparable
period in 2014.
Steve Newby, President and Chief
Executive Officer commented, "SMLP reported second quarter 2015
financial and operating results that were in line with our internal
expectations. Our quarterly results benefitted from the
$290.0 million Polar and Divide acquisition from Summit Investments in
May 2015. We expect the Polar
and Divide gathering system to
serve as a significant source of SMLP's future volume and cash flow
growth, and we expect that this growth will help offset natural gas
volume declines, which began across our Marcellus and Bakken
systems towards the end of the second quarter of 2015. Our
fee-based gathering contracts, most of which contain MVC
mechanisms, have limited our direct exposure to commodity prices
and helped to mitigate our cash flow volatility associated with
declining volumes.
As we look towards the balance of 2015 and beyond, we remain
optimistic about SMLP's visible growth potential from our existing
assets and from the assets currently in service and under
development at Summit Investments. Over the next five years,
we expect to more than double SMLP's 2015 adjusted EBITDA,
primarily through the drop down of assets from Summit Investments
to SMLP. Volume and cash flow growth from these assets,
particularly from the natural gas gathering assets located in the
southeastern core of the Utica Shale, is encouraging, and continue
to exceed our expectations. We believe that these future drop
downs will serve as a catalyst for significant future growth and
transform SMLP into a leading natural gas gatherer in the Utica
Shale."
Second Quarter 2015 Segment Financial Results
Marcellus Shale
The Mountaineer Midstream gathering
system provides SMLP's midstream services for the Marcellus Shale
reportable segment. This system gathers and delivers
high-pressure natural gas received from pipeline interconnections
with third parties and delivers to MarkWest Energy Partners, L.P.'s
Sherwood Processing Complex in Doddridge County, West
Virginia.
Segment adjusted EBITDA totaled $6.2
million for the second quarter of 2015, up 60.6% over the
second quarter of 2014, primarily due to a 48.1% increase in volume
throughput (to 542 MMcf/d) from Antero Resources Corp. ("Antero")
as well as the receipt of MVC shortfall payments related to the
Zinnia Loop. Higher volume throughput resulted from Antero
well connections, primarily in Doddridge County and points further
west, by third-party gathering systems located upstream of the
Mountaineer Midstream system. Volumes were down 0.9% (from
547 MMcf/d) relative to the first quarter of 2015.
Segment general and administrative ("G&A") expenses
decreased $0.5 million in the second
quarter of 2015 and was primarily related to our decision to
discontinue allocating certain corporate overhead expenses to the
reportable segments beginning in the first quarter of 2015, as had
been our practice in prior periods.
Williston Basin –
Gas
The Bison Midstream gathering system provides SMLP's
midstream services for the Williston Basin – Gas reportable
segment. This system gathers and delivers low-pressure
associated natural gas production from pad sites located in
Mountrail and Burke counties in North Dakota to third-party pipelines serving
Aux Sable Midstream, LLC's processing plant in Channahon,
Illinois.
Segment adjusted EBITDA totaled $4.7
million for the second quarter of 2015, down 1.4% from the
second quarter of 2014 primarily due to lower margins associated
with our percent-of-proceeds contracts, partially offset by 13.3%
higher volume throughput (to 17 MMcf/d) in the second quarter of
2015 compared to the second quarter of 2014. Volumes were
down 5.6% (from 18 MMcf/d) relative to the first quarter of
2015. Segment adjusted EBITDA for the second quarter of 2015
also benefitted from the aforementioned decision to discontinue
allocating certain corporate overhead expenses beginning in the
first quarter of 2015. Segment G&A expenses decreased
$0.7 million in the second quarter of
2015 compared to the second quarter of 2014.
Williston Basin –
Liquids
The Polar and Divide gathering system provides SMLP's
midstream services for the Williston Basin – Liquids reportable
segment. This system gathers and delivers crude oil and
produced water received from pad sites located in Williams and Divide counties in North Dakota to (i) the COLT Hub rail terminal
in Epping, North Dakota for crude
oil, and (ii) various third-party injection wells located in the
region for produced water. Interconnections to additional
delivery points, including the Columbus Rail Terminal, which will
be served by the Stampede Lateral, are currently underway and
expected to be operational by the end of 2015.
Segment adjusted EBITDA totaled $6.5
million for the second quarter of 2015, up 147.4% over the
second quarter of 2014 primarily due to (i) 80.4% higher volume
throughput (to 54.3 Mbbl/d) reflecting new pad site connections as
well as ongoing drilling activity by SMLP's customers and (ii)
higher gathering rates associated with contract amendments with
certain customers in 2014 that reflect SMLP's commitment to further
expand the Polar and Divide system
to connect new pad sites. Volumes increased 12.9% (from 48.1
Mbbl/d) relative to the first quarter of 2015.
Barnett Shale
The DFW Midstream gathering system
provides SMLP's midstream services for the Barnett Shale reportable
segment. This system gathers and delivers low-pressure
natural gas received from pad sites primarily located in southeast
Tarrant County, Texas to
downstream intrastate pipelines serving various natural gas hubs in
the region.
Segment adjusted EBITDA totaled $15.5
million for the second quarter of 2015, up 3.9% over the
second quarter of 2014 primarily due to higher volume throughput
and a shift in customer mix. While volume throughput in the
second quarter of 2015 was up 1.7% (to 356 MMcf/d) over the second
quarter of 2014, volume throughput was negatively impacted by
delayed drilling and completion activities from several
customers. These customers are expected to commission more
than twelve new wells by the end of 2015, which we expect will
stimulate volume throughput towards the end of the third quarter of
2015. Volumes were down 11.7% (from 403 MMcf/d) relative to
the first quarter of 2015.
Segment adjusted EBITDA for the second quarter of 2015 also
benefitted from the aforementioned decision to discontinue
allocating certain corporate overhead expenses beginning in the
first quarter of 2015. Segment G&A expenses decreased
$0.8 million in the second quarter of
2015 compared to the second quarter of 2014.
Piceance Basin
The Grand River Gathering system
provides SMLP's midstream services for the Piceance Basin
reportable segment. This system provides low-pressure and
high-pressure natural gas gathering and processing services for
producers operating in western Colorado and eastern Utah.
Segment adjusted EBITDA totaled $26.9
million for the second quarter of 2015, up 0.3% over the
second quarter of 2014. Volume throughput on the Grand River
system decreased by 10.1% (to 604 MMcf/d) from the second quarter
of 2014 primarily as a result of our anchor customer's continued
suspension of drilling activities in the basin. The impact of
these volume declines was partially offset by higher MVC shortfall
payment adjustments associated with certain of our customers' gas
gathering agreements. Volumes were down 1.8% (from 615
MMcf/d) relative to the first quarter of 2015.
Segment adjusted EBITDA for the second quarter of 2015 also
benefitted from the aforementioned decision to discontinue
allocating certain corporate overhead expenses beginning in the
first quarter of 2015. Segment G&A expenses decreased
$1.8 million in the second quarter of
2015 compared to the second quarter of 2014.
The majority of the gathering agreements for the Piceance Basin
segment include MVCs, which largely mitigate the financial impact
associated with volume declines. As a result, lower volume
throughput in the second quarter of 2015 primarily translated into
larger MVC shortfall payments, thereby minimizing the impact on
segment adjusted EBITDA.
The following table presents average daily throughput by
reportable segment:
|
Three months
ended
June
30,
|
|
Six months
ended
June
30,
|
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
Average daily
throughput (MMcf/d):
|
|
|
|
|
|
|
|
|
Marcellus
Shale
|
542
|
|
366
|
|
|
545
|
|
326
|
Williston Basin –
Gas
|
17
|
|
15
|
|
|
18
|
|
14
|
Barnett
Shale
|
356
|
|
350
|
|
|
379
|
|
349
|
Piceance
Basin
|
604
|
|
672
|
|
|
610
|
|
667
|
Aggregate average
daily throughput
|
1,519
|
|
1,403
|
|
|
1,552
|
|
1,356
|
|
|
|
|
|
|
|
|
|
Average daily
throughput (Mbbl/d):
|
|
|
|
|
|
|
|
|
Williston Basin –
Liquids
|
54.3
|
|
30.1
|
|
|
51.2
|
|
26.9
|
Average daily
throughput
|
54.3
|
|
30.1
|
|
|
51.2
|
|
26.9
|
MVC Shortfall Payments
SMLP billed its customers
$5.5 million of MVC shortfall
payments in the second quarter of 2015 because those customers did
not meet their MVCs. Certain of SMLP's natural gas gathering
agreements do not have credit banking mechanisms and as such, the
MVC shortfall payments from these customers are accounted for as
gathering revenue in the period that they are earned. For the
second quarter of 2015, SMLP recognized $3.4
million of gathering revenue associated with MVC shortfall
payments from certain customers in the Marcellus Shale, Piceance
Basin, and Barnett Shale segments. Of the billings for MVC
shortfall payments, $2.1 million was
recorded as deferred revenue on SMLP's balance sheet because these
customers have the ability to use these MVC shortfall payments to
offset gathering fees related to future throughput in excess of
future period MVCs. MVC shortfall payment adjustments in the
second quarter of 2015 totaled $8.8
million and included adjustments related to future
anticipated shortfall payments from certain customers in the
Piceance Basin, Williston Basin –
Gas, and Barnett Shale segments. The net impact of these mechanisms
increased adjusted EBITDA by $14.4
million in the second quarter of 2015.
|
Three months ended
June 30, 2015
|
|
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:
|
|
|
|
|
|
|
|
|
|
|
|
|
Marcellus
Shale
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Williston Basin –
Gas
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Barnett
Shale
|
677
|
|
|
|
2,377
|
|
|
(1,700)
|
|
|
677
|
|
Piceance
Basin
|
3,799
|
|
|
|
—
|
|
|
3,799
|
|
|
3,799
|
|
Total net
change
|
$
|
4,476
|
|
|
|
$
|
2,377
|
|
|
$
|
2,099
|
|
|
$
|
4,476
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MVC shortfall
payment adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Marcellus
Shale
|
$
|
795
|
|
|
|
$
|
795
|
|
|
$
|
—
|
|
|
$
|
795
|
|
Williston Basin –
Gas
|
—
|
|
|
|
—
|
|
|
2,840
|
|
|
2,840
|
|
Barnett
Shale
|
37
|
|
|
|
37
|
|
|
(78)
|
|
|
(41)
|
|
Piceance
Basin
|
215
|
|
|
|
215
|
|
|
6,067
|
|
|
6,282
|
|
Total MVC shortfall
payment adjustments
|
$
|
1,047
|
|
|
|
$
|
1,047
|
|
|
$
|
8,829
|
|
|
$
|
9,876
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
5,523
|
|
|
|
$
|
3,424
|
|
|
$
|
10,928
|
|
|
$
|
14,352
|
|
|
|
|
Six months ended
June 30, 2015
|
|
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:
|
|
|
|
|
|
|
|
|
|
|
|
|
Marcellus
Shale
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Williston Basin –
Gas
|
—
|
|
|
|
20
|
|
|
(20)
|
|
|
—
|
|
Barnett
Shale
|
677
|
|
|
|
2,377
|
|
|
(1,700)
|
|
|
677
|
|
Piceance
Basin
|
7,572
|
|
|
|
—
|
|
|
7,572
|
|
|
7,572
|
|
Total net
change
|
$
|
8,249
|
|
|
|
$
|
2,397
|
|
|
$
|
5,852
|
|
|
$
|
8,249
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MVC shortfall
payment adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Marcellus
Shale
|
$
|
1,590
|
|
|
|
$
|
1,590
|
|
|
$
|
—
|
|
|
$
|
1,590
|
|
Williston Basin –
Gas
|
—
|
|
|
|
—
|
|
|
5,520
|
|
|
5,520
|
|
Barnett
Shale
|
72
|
|
|
|
72
|
|
|
(301)
|
|
|
(229)
|
|
Piceance
Basin
|
663
|
|
|
|
663
|
|
|
12,197
|
|
|
12,860
|
|
Total MVC shortfall
payment adjustments
|
$
|
2,325
|
|
|
|
$
|
2,325
|
|
|
$
|
17,416
|
|
|
$
|
19,741
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
10,574
|
|
|
|
$
|
4,722
|
|
|
$
|
23,268
|
|
|
$
|
27,990
|
|
Capital Expenditures
For the three months ended
June 30, 2015, SMLP recorded total
capital expenditures of $35.0
million, including approximately $2.2
million of maintenance capital expenditures.
Development activities during the second quarter of 2015 were
related primarily to the ongoing expansion of the Polar and
Divide system.
Capital & Liquidity
As of June 30, 2015, SMLP had total liquidity (undrawn
borrowing capacity under its $700.0
million revolving credit facility) of $421.0 million. Based upon the terms of
SMLP's revolving credit facility and total outstanding debt of
$879.0 million, total leverage (net
debt divided by EBITDA) was 3.95 to 1 as of June 30, 2015.
During the second quarter of 2015, SMLP executed an equity
distribution agreement and filed a prospectus and a prospectus
supplement with the SEC for the issuance and sale from time to time
of SMLP common units having an aggregate offering price of up to
$150.0 million (the "ATM
Program"). There were no transactions under the ATM Program
during the second quarter of 2015; however, we expect to use the
proceeds from sales under this program as a source of liquidity in
the future.
2015 Financial Guidance
SMLP is tightening its 2015
adjusted EBITDA guidance from a previous range of $210.0 million to $225.0 million to a new range
of $210.0 million to $220.0 million.
Maintenance capex guidance for 2015 is being revised downward
from a previous range of $14.0 million to
$18.0 million to a new range of $10.0
million to $14.0 million. Guidance for both adjusted
EBITDA and maintenance capex reflects the impact of retrospectively
pooling the financial results of the Polar and Divide system for all periods prior to the
drop down in May 2015 and excludes
the effect of any additional acquisitions from Summit Investments
or third parties.
Quarterly Distribution
On July
22, 2015, the board of directors of SMLP's general partner
declared a quarterly cash distribution of $0.57 per unit on all outstanding common and
subordinated units, or $2.28 per unit
on an annualized basis, for the quarter ended June 30, 2015. This distribution will be
paid on August 14, 2015 to
unitholders of record as of the close of business on August 7, 2015. This was SMLP's eleventh
consecutive quarterly distribution increase and represents an
increase of $0.05 per unit, or 9.6%,
over the distribution paid for the second quarter of 2014 and an
increase of $0.005 per unit, or 0.9%,
over the distribution paid for the first quarter of 2015.
Second Quarter 2015 Earnings Call Information
SMLP
will host a conference call at 10:00
a.m. Eastern on Friday, August 7,
2015, to discuss its quarterly operating and financial
results. Interested parties may participate in the call by
dialing 847-619-6547 or toll-free 888-895-5271 and entering the
passcode 40293476. 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 21, 2015 at 11:59 p.m. Eastern, and can be accessed by
dialing 888-843-7419 and entering the replay passcode
40293476#. An archive of the conference call will also be
available on SMLP's website.
Use of Non-GAAP Financial Measures
We report
financial results in accordance with U.S. generally accepted
accounting principles ("GAAP"). We also present EBITDA, adjusted
EBITDA, distributable cash flow and adjusted distributable cash
flow. We define EBITDA as net income, plus interest expense, income
tax expense, and depreciation and amortization, less interest
income and income tax benefit. We define adjusted EBITDA as
EBITDA plus adjustments related to MVC shortfall payments,
impairments and other noncash expenses or losses, less other
noncash income or gains. We define distributable cash flow as
adjusted EBITDA plus cash interest received, less cash interest
paid, senior notes interest, cash taxes paid and maintenance
capital expenditures. We define adjusted distributable cash flow as
distributable cash flow plus or minus other unusual or
non-recurring expenses or income. Our definitions of these non-GAAP
financial measures may differ from the definitions of similar
measures used by other companies. 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 users with additional meaningful comparisons
between current results and results of prior periods as they are
expected to be reflective of our core ongoing business. These
measures have limitations, and investors should not consider them
in isolation or as a substitute for analysis of our results as
reported under GAAP. Reconciliations of GAAP to non-GAAP
financial measures are attached to this release.
Comparability Related to Drop Down Transactions
With
respect to drop down transactions, SMLP's historical results of
operations may not be comparable to its future results of
operations. In May 2015, SMLP
acquired the assets comprising the Polar and Divide system from two subsidiaries of Summit
Investments. In March 2014,
SMLP acquired Red Rock Gathering from a subsidiary of Summit
Investments. SMLP accounted for both the Polar and Divide
Drop Down and the Red Rock Drop Down on an "as-if pooled" basis
because these transactions were executed by entities under common
control. As such, SMLP's consolidated financial statements
reflect Summit Investments' fair value purchase accounting,
historical cost of construction, and the results of operations of
(i) Polar and Divide since
February 15, 2013, and (ii) Red Rock
Gathering since October 23, 2012, as
if SMLP had owned and operated both Polar and Divide and Red Rock Gathering during the
common control period.
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 North America. SMLP currently 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 four unconventional
resource basins: (i) the Appalachian Basin, which includes the
Marcellus Shale formation in northern West Virginia; (ii) the Williston Basin, which includes the Bakken and
Three Forks shale formations in northwestern North Dakota; (iii) the Fort Worth Basin, which includes the Barnett
Shale formation in north-central Texas; and (iv) the Piceance Basin, which
includes the Mesaverde formation as well as the Mancos and Niobrara shale formations in
western Colorado and eastern
Utah. SMLP owns and operates more
than 2,600 miles of pipeline and 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") indirectly owns a 43.9%
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 owns, operates and is
developing various natural gas, crude oil and produced
water-related midstream energy infrastructure assets in the Utica
Shale in southeastern Ohio, the
Bakken Shale in northwestern North
Dakota, and the DJ Basin in northeastern Colorado. Summit Investments also owns a 40%
interest in a joint venture that is developing natural gas
gathering and condensate stabilization infrastructure in the Utica
Shale in southeastern Ohio. Summit
Investments is a privately held company controlled by Energy
Capital Partners II, LLC, and certain of its affiliates.
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 2014 Annual Report on Form 10-K filed with the
Securities and Exchange Commission on March
2, 2015 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.
SUMMIT MIDSTREAM
PARTNERS, LP AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
June
30,
2015
|
|
December
31,
2014
|
|
(In
thousands)
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
26,973
|
|
|
$
|
26,504
|
|
Accounts
receivable
|
51,739
|
|
|
89,201
|
|
Other current
assets
|
1,648
|
|
|
3,517
|
|
Total current
assets
|
80,360
|
|
|
119,222
|
|
Property, plant and
equipment, net
|
1,438,798
|
|
|
1,414,350
|
|
Intangible assets,
net
|
458,625
|
|
|
477,734
|
|
Goodwill
|
265,062
|
|
|
265,062
|
|
Other noncurrent
assets
|
15,908
|
|
|
17,353
|
|
Total
assets
|
$
|
2,258,753
|
|
|
$
|
2,293,721
|
|
|
|
|
|
Liabilities and
Partners' Capital
|
|
|
|
Current
liabilities:
|
|
|
|
Trade accounts
payable
|
$
|
13,806
|
|
|
$
|
24,855
|
|
Due to
affiliate
|
4,936
|
|
|
2,711
|
|
Deferred
revenue
|
677
|
|
|
2,377
|
|
Ad valorem taxes
payable
|
6,482
|
|
|
9,118
|
|
Accrued
interest
|
17,483
|
|
|
18,858
|
|
Other current
liabilities
|
11,068
|
|
|
13,550
|
|
Total current
liabilities
|
54,452
|
|
|
71,469
|
|
Long-term
debt
|
879,000
|
|
|
808,000
|
|
Unfavorable gas
gathering contract, net
|
5,239
|
|
|
5,577
|
|
Deferred
revenue
|
62,784
|
|
|
55,239
|
|
Other noncurrent
liabilities
|
1,343
|
|
|
1,715
|
|
Total
liabilities
|
1,002,818
|
|
|
942,000
|
|
|
|
|
|
Common limited
partner capital
|
912,661
|
|
|
649,060
|
|
Subordinated limited
partner capital
|
312,269
|
|
|
293,153
|
|
General partner
interests
|
31,005
|
|
|
24,676
|
|
Summit Investments'
equity in contributed subsidiaries
|
—
|
|
|
384,832
|
|
Total partners'
capital
|
1,255,935
|
|
|
1,351,721
|
|
Total liabilities and
partners' capital
|
$
|
2,258,753
|
|
|
$
|
2,293,721
|
|
SUMMIT MIDSTREAM
PARTNERS, LP AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
(In thousands,
except per-unit amounts)
|
Revenues:
|
|
|
|
|
|
|
|
Gathering services and
related fees
|
$
|
61,370
|
|
|
$
|
55,858
|
|
|
$
|
122,137
|
|
|
$
|
105,761
|
|
Natural gas, NGLs and
condensate sales
|
11,967
|
|
|
26,703
|
|
|
24,580
|
|
|
53,007
|
|
Other
revenues
|
3,937
|
|
|
3,423
|
|
|
7,718
|
|
|
6,597
|
|
Total
revenues
|
77,274
|
|
|
85,984
|
|
|
154,435
|
|
|
165,365
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Cost of natural gas
and NGLs
|
4,905
|
|
|
15,118
|
|
|
10,289
|
|
|
29,473
|
|
Operation and
maintenance
|
21,616
|
|
|
22,797
|
|
|
42,673
|
|
|
44,628
|
|
General and
administrative
|
9,374
|
|
|
9,659
|
|
|
19,032
|
|
|
18,712
|
|
Transaction
costs
|
595
|
|
|
76
|
|
|
595
|
|
|
612
|
|
Depreciation and
amortization
|
23,978
|
|
|
21,435
|
|
|
47,733
|
|
|
41,814
|
|
(Gain) loss on asset
sales
|
(214)
|
|
|
6
|
|
|
(214)
|
|
|
6
|
|
Total costs and
expenses
|
60,254
|
|
|
69,091
|
|
|
120,108
|
|
|
135,245
|
|
Other
income
|
—
|
|
|
1
|
|
|
1
|
|
|
2
|
|
Interest
expense
|
(12,083)
|
|
|
(10,803)
|
|
|
(24,201)
|
|
|
(17,947)
|
|
Income before income
taxes
|
4,937
|
|
|
6,091
|
|
|
10,127
|
|
|
12,175
|
|
Income tax benefit
(expense)
|
105
|
|
|
(469)
|
|
|
(72)
|
|
|
(628)
|
|
Net income
|
$
|
5,042
|
|
|
$
|
5,622
|
|
|
$
|
10,055
|
|
|
$
|
11,547
|
|
Less: net income
attributable to Summit Investments
|
2,057
|
|
|
1,586
|
|
|
5,403
|
|
|
3,966
|
|
Net income
attributable to SMLP
|
2,985
|
|
|
4,036
|
|
|
4,652
|
|
|
7,581
|
|
Less: net income
attributable to general partner, including IDRs
|
1,891
|
|
|
801
|
|
|
3,459
|
|
|
1,232
|
|
Net income
attributable to limited partners
|
$
|
1,094
|
|
|
$
|
3,235
|
|
|
$
|
1,193
|
|
|
$
|
6,349
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
per limited partner unit:
|
|
|
|
|
|
|
|
Common unit –
basic
|
$
|
0.05
|
|
|
$
|
0.05
|
|
|
$
|
0.04
|
|
|
$
|
0.14
|
|
Common unit –
diluted
|
$
|
0.05
|
|
|
$
|
0.05
|
|
|
$
|
0.04
|
|
|
$
|
0.14
|
|
Subordinated unit –
basic and diluted
|
$
|
(0.03)
|
|
|
$
|
0.05
|
|
|
$
|
(0.01)
|
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
Weighted-average
limited partner units outstanding:
|
|
|
|
|
|
|
|
Common units –
basic
|
38,278
|
|
|
34,422
|
|
|
36,369
|
|
|
32,179
|
|
Common units –
diluted
|
38,461
|
|
|
34,619
|
|
|
36,477
|
|
|
32,360
|
|
Subordinated units –
basic and diluted
|
24,410
|
|
|
24,410
|
|
|
24,410
|
|
|
24,410
|
|
SUMMIT MIDSTREAM
PARTNERS, LP AND SUBSIDIARIES
OTHER FINANCIAL
AND OPERATING DATA
|
|
|
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
(Dollars in
thousands)
|
Other financial
data:
|
|
|
|
|
|
|
|
EBITDA (1)
|
$
|
41,210
|
|
$
|
38,553
|
|
$
|
82,523
|
|
$
|
72,385
|
|
Adjusted EBITDA
(1)
|
$
|
53,661
|
|
$
|
50,582
|
|
$
|
108,711
|
|
$
|
97,575
|
|
Capital
expenditures
|
$
|
34,987
|
|
$
|
34,453
|
|
$
|
60,175
|
|
$
|
88,033
|
|
Acquisitions of
gathering systems (2)
|
$
|
290,000
|
|
$
|
—
|
|
$
|
292,941
|
|
$
|
305,000
|
|
Distributable cash
flow (1)
|
$
|
39,762
|
|
$
|
37,295
|
|
$
|
80,688
|
|
$
|
70,897
|
|
Adjusted
distributable cash flow
|
$
|
40,357
|
|
$
|
37,548
|
|
$
|
81,386
|
|
$
|
71,686
|
|
Distributions
declared
|
$
|
40,479
|
|
$
|
31,953
|
|
$
|
76,005
|
|
$
|
62,336
|
|
Distribution coverage
ratio (3)
|
1.00x
|
|
*
|
|
*
|
|
*
|
|
|
|
|
|
|
|
|
|
|
Operating
data:
|
|
|
|
|
|
|
|
|
Miles of pipeline
(end of period)
|
2,658
|
|
2,568
|
|
2,658
|
|
2,568
|
|
Aggregate average
throughput – gas (MMcf/d)
|
1,519
|
|
1,403
|
|
1,552
|
|
1,356
|
|
Average throughput –
liquids (Mbbl/d)
|
54.3
|
|
30.1
|
|
51.2
|
|
26.9
|
|
|
|
|
|
|
|
|
|
*
|
Not considered
meaningful
|
(1)
|
Includes transaction
costs. These unusual expenses are settled in cash.
|
(2)
|
Reflects cash paid
and value of units issued, if any, to fund acquisitions.
|
(3)
|
Distribution coverage
ratio calculation for the three months ended June 30, 2015 is based
on distributions in respect of the second quarter of 2015.
Represents the ratio of adjusted distributable cash flow to
distributions declared. Due to the common control nature of drop
down transactions and to the extent that common control existed
during a given reporting period, quarter-to-date and year-to-date
results are reported on an as-if pooled basis with no adjustment to
distributions declared. As such, we only present the current
quarter's distribution coverage ratio when a drop down, and its
funding, impacts adjusted distributable cash flow and distributions
declared.
|
SUMMIT MIDSTREAM
PARTNERS, LP AND SUBSIDIARIES
UNAUDITED
RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES
|
|
|
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
(Dollars in
thousands)
|
Reconciliations of
Net Income to EBITDA, Adjusted EBITDA, Distributable Cash Flow and
Adjusted Distributable Cash Flow:
|
|
|
|
|
|
|
|
Net income
|
$
|
5,042
|
|
|
$
|
5,622
|
|
|
$
|
10,055
|
|
|
$
|
11,547
|
|
Add:
|
|
|
|
|
|
|
|
Interest
expense
|
12,083
|
|
|
10,803
|
|
|
24,201
|
|
|
17,947
|
|
Income tax
expense
|
—
|
|
|
469
|
|
|
72
|
|
|
628
|
|
Depreciation and
amortization (1)
|
24,190
|
|
|
21,660
|
|
|
48,196
|
|
|
42,265
|
|
Less:
|
|
|
|
|
|
|
|
Interest
income
|
—
|
|
|
1
|
|
|
1
|
|
|
2
|
|
Income tax
benefit
|
105
|
|
|
—
|
|
|
—
|
|
|
—
|
|
EBITDA
|
$
|
41,210
|
|
|
$
|
38,553
|
|
|
$
|
82,523
|
|
|
$
|
72,385
|
|
Add:
|
|
|
|
|
|
|
|
Adjustments related to
MVC shortfall payments (2)
|
10,928
|
|
|
10,577
|
|
|
23,268
|
|
|
22,590
|
|
Unit-based
compensation
|
1,737
|
|
|
1,446
|
|
|
3,134
|
|
|
2,594
|
|
Loss on asset
sales
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
Less gain on asset
sales
|
214
|
|
|
—
|
|
|
214
|
|
|
—
|
|
Adjusted
EBITDA
|
$
|
53,661
|
|
|
$
|
50,582
|
|
|
$
|
108,711
|
|
|
$
|
97,575
|
|
Add cash interest
received
|
—
|
|
|
1
|
|
|
1
|
|
|
2
|
|
Less:
|
|
|
|
|
|
|
|
Cash interest
paid
|
1,919
|
|
|
2,845
|
|
|
24,731
|
|
|
17,153
|
|
Senior notes interest
(3)
|
9,750
|
|
|
5,625
|
|
|
(1,421)
|
|
|
(875)
|
|
Maintenance capital
expenditures
|
2,230
|
|
|
4,818
|
|
|
4,714
|
|
|
10,402
|
|
Distributable cash
flow
|
$
|
39,762
|
|
|
$
|
37,295
|
|
|
$
|
80,688
|
|
|
$
|
70,897
|
|
Add:
|
|
|
|
|
|
|
|
Transaction
costs
|
595
|
|
|
76
|
|
|
595
|
|
|
612
|
|
Regulatory compliance
costs (4)
|
—
|
|
|
177
|
|
|
103
|
|
|
177
|
|
Adjusted distributable
cash flow
|
$
|
40,357
|
|
|
$
|
37,548
|
|
|
$
|
81,386
|
|
|
$
|
71,686
|
|
|
|
|
|
|
|
|
|
Distributions
declared
|
$
|
40,479
|
|
|
$
|
31,953
|
|
|
$
|
76,005
|
|
|
$
|
62,336
|
|
|
|
|
|
|
|
|
|
Distribution coverage
ratio (5)
|
1.00x
|
|
|
*
|
|
|
*
|
|
|
*
|
|
|
|
|
|
|
|
*
|
Not considered
meaningful
|
(1)
|
Includes amortization
of favorable and unfavorable contracts reported in other
revenues.
|
(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 future expected annual MVC shortfall
payments.
|
(3)
|
Senior notes interest
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 $300.0 million 7.5% senior
notes is paid in cash semi-annually in arrears on January 1 and
July 1 until maturity in July 2021.
|
(4)
|
We incurred expenses
associated with our adoption of the 2013 Internal
Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission ("COSO 2013"). These
first-year COSO 2013 expenses are not expected to be incurred
subsequent to completion of the 2014 integrated audit.
|
(5)
|
Distribution coverage
ratio calculation for the three months ended June 30, 2015 is based
on distributions in respect of the second quarter of 2015.
Represents the ratio of adjusted distributable cash flow to
distributions declared. Due to the common control nature of drop
down transactions and to the extent that common control existed
during a given reporting period, quarter-to-date and year-to-date
results are reported on an as-if pooled basis with no adjustment to
distributions declared. As such, we only present the current
quarter's distribution coverage ratio when a drop down, and its
funding, impacts adjusted distributable cash flow and distributions
declared.
|
SUMMIT MIDSTREAM
PARTNERS, LP AND SUBSIDIARIES
UNAUDITED
RECONCILIATION OF SEGMENT ADJUSTED EBITDA TO ADJUSTED
EBITDA
|
|
|
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
(In
thousands)
|
Reportable segment
adjusted EBITDA:
|
|
|
|
|
|
|
|
Marcellus
Shale
|
$
|
6,162
|
|
|
$
|
3,837
|
|
|
$
|
12,696
|
|
|
$
|
7,721
|
|
Williston Basin –
Gas
|
4,740
|
|
|
4,809
|
|
|
10,075
|
|
|
9,485
|
|
Williston Basin –
Liquids
|
6,497
|
|
|
2,626
|
|
|
11,540
|
|
|
3,000
|
|
Barnett
Shale
|
15,540
|
|
|
14,958
|
|
|
32,301
|
|
|
29,991
|
|
Piceance
Basin
|
26,864
|
|
|
26,780
|
|
|
54,099
|
|
|
52,361
|
|
Total reportable
segment adjusted EBITDA
|
59,803
|
|
|
53,010
|
|
|
120,711
|
|
|
102,558
|
|
Allocated corporate
expenses
|
(6,142)
|
|
|
(2,428)
|
|
|
(12,000)
|
|
|
(4,983)
|
|
Adjusted
EBITDA
|
$
|
53,661
|
|
|
$
|
50,582
|
|
|
$
|
108,711
|
|
|
$
|
97,575
|
|
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SOURCE Summit Midstream Partners, LP