HOUSTON, May 5, 2023
/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, 2023.
Highlights
- First quarter 2023 net loss of $14.2
million, adjusted EBITDA of $60.4
million, cash flow available for distributions
("Distributable Cash Flow" or "DCF") of $24.9 million and free cash flow ("FCF") of
$7.6 million
- Generated 20% quarter-over-quarter adjusted EBITDA growth
- Connected 61 wells during the quarter, four times higher than
the first quarter of 2022
- Experienced 17% quarter-over-quarter growth in liquids volumes
and 14% growth in DJ Basin natural gas volumes relative to
December 2022
- Active customer base with nine drilling rigs and 229 DUCs
behind our systems
- Successful integration of recently acquired DJ Basin gathering
& processing assets
Management Commentary
Heath Deneke, President, Chief
Executive Officer, and Chairman, commented, "Summit's first quarter
2023 financial and operating results were in line with management
expectations. We had a very active quarter, connecting more than 60
wells to our systems, with particularly strong growth in our
Rockies segment, while we focused on the successful integration and
optimization of our recently acquired assets in the DJ Basin.
Liquids volumes increased 17% quarter-over-quarter and we gathered
and processed 108 MMcf/d of natural gas in the DJ Basin,
representing approximately 14% growth relative to December 2022. While we do expect some pull back
in planned well completion activities this year in the Barnett and
Piceance in response to weakening near-term gas prices, our
customers remain active across every segment with nine drilling
rigs running and more than 229 DUCs accumulated behind our systems.
We continue to expect this level of activity to result in strong
sequential quarterly growth in 2023, and we remain on track to hit
our adjusted EBITDA guidance range of $290
million to $320 million."
Business Highlights
SMLP's average daily natural gas throughput for its wholly owned
operated systems increased by 37 MMcf/d to 1,185 MMcf/d, and
liquids volumes increased by 11 Mbbl/d to 74 Mbbl/d, relative to
the fourth quarter of 2022. OGC natural gas throughput decreased
from 754 MMcf/d to 636 MMcf/d and generated $7.4 million of adjusted EBITDA net to SMLP for
the first quarter of 2023. Double E Pipeline gross volumes
transported declined by 25 MMcf/d to 264 MMcf/d and generated
$4.2 million of adjusted EBITDA net
to SMLP for the first quarter of 2023.
Natural gas price driven segments:
- Natural gas price-driven segments had combined quarterly
segment adjusted EBITDA of $38.9
million and combined capital expenditures of $1.8 million in the first quarter of 2023.
- Northeast segment adjusted EBITDA totaled $17.9 million, a decrease of $1.2 million from the fourth quarter 2022,
primarily due to a 1.3% decline in volume on our wholly owned
systems and a 16% decline in volume from our OGC joint venture.
Segment volumes were impacted by customers temporarily shutting-in
producing wells as they completed new wells on the pad site
("frac-protect activities"). We estimate frac-protect activities
impacted quarterly volume by approximately 20 MMcf/d and 50 MMcf/d
(8/8ths basis) on our wholly owned systems and OGC joint venture,
respectively, and segment adjusted EBITDA by approximately
$1.0 million. We expect these impacts
to moderate later in the second quarter of 2023. Five new wells
were brought online behind our wholly owned SMU system, and 12 new wells were connected behind
our OGC joint venture during the quarter. There are currently four
rigs running, including three rigs behind our wholly owned
SMU system, and more than 55 DUCs
behind the OGC, SMU and MTN
systems.
- Piceance segment adjusted EBITDA totaled $14.0 million, a decrease of $0.7 million from the fourth quarter of 2022,
primarily due to a 2.7% decrease in volume throughput from natural
production declines. Eight new wells were brought online in
March 2023 and nine DUCs are expected
to turn-in-line in May 2023. Based on
recent customer conversations, we expect 2023 well connections in
our Piceance segment to trend toward the lower end of our guidance
range of 55 to 70 wells. There is currently one rig running behind
the system.
- Barnett segment adjusted EBITDA totaled $7.0 million, a decrease of $0.2 million relative to the fourth quarter of
2022, primarily due to a 6.1% decrease in volume throughput. We
estimate frac-protect activities impacted quarterly volume by
approximately 6 MMcf/d and segment adjusted EBITDA by approximately
$0.3 million. Based on recent
customer conversations and natural gas prices, we now expect
approximately 15 well connections and segment adjusted EBITDA to
trend toward, or slightly below, the low end of our guidance range
of $35 million to $40 million. There is currently one rig running
and 13 DUCs behind the system.
Oil price driven segments
- Oil price-driven segments generated $28.2 million of combined segment adjusted EBITDA
in the first quarter of 2023 and had combined capital expenditures
of $13.4 million, as well as
$3.5 million investment in our Double
E joint venture.
- Permian segment adjusted EBITDA totaled $5.1 million, an increase of $0.8 million from the fourth quarter of 2022, due
to an increase in distributions from Double E as a result of
contractual step-ups in take-or-pay contracts at our Double E joint
venture.
- Rockies segment adjusted EBITDA totaled $23.1 million, an increase of $9.3 million relative to the fourth quarter of
2022, primarily due to the addition of the Outrigger DJ and
Sterling DJ assets that closed in December
2022 and liquids volume growth of 17% relative to the fourth
quarter of 2022. Natural gas volume throughput averaged 108 MMcf/d
during the quarter, representing approximately 14% growth relative
to volume throughput in December
2022. There were 36 new wells connected during the quarter,
and there are currently three rigs running and more than 150 DUCs
behind the systems.
The following table presents average daily throughput by
reportable segment for the periods indicated:
|
Three Months
Ended
March
31,
|
|
2023
|
|
2022
|
Average daily
throughput (MMcf/d):
|
|
|
|
Northeast
(1)
|
591
|
|
741
|
Rockies
|
108
|
|
29
|
Permian
(1)
|
—
|
|
27
|
Piceance
|
287
|
|
312
|
Barnett
|
199
|
|
197
|
Aggregate average
daily throughput
|
1,185
|
|
1,306
|
|
|
|
|
Average daily
throughput (Mbbl/d):
|
|
|
|
Rockies
|
74
|
|
65
|
Aggregate average
daily throughput
|
74
|
|
65
|
|
|
|
|
Ohio Gathering
average daily throughput (MMcf/d)
(2)
|
636
|
|
598
|
|
|
|
|
Double E average
daily throughput (MMcf/d) (3)
|
264
|
|
187
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Exclusive of Ohio
Gathering and Double E due to equity method accounting.
|
(2)
|
Gross basis, represents
100% of volume throughput for Ohio Gathering, subject to a
one-month lag.
|
(3)
|
Gross basis, represents
100% of volume throughput for Double E.
|
The following table presents adjusted EBITDA by reportable
segment for the periods indicated:
|
Three Months
Ended
March
31,
|
|
2023
|
|
2022
|
|
(In
thousands)
|
Reportable segment
adjusted EBITDA (1):
|
|
|
|
Northeast
(2)
|
$
17,854
|
|
$
20,068
|
Rockies
|
23,130
|
|
15,830
|
Permian
(3)
|
5,073
|
|
4,149
|
Piceance
|
13,983
|
|
15,768
|
Barnett
|
7,027
|
|
9,286
|
Total
|
$
67,067
|
|
$
65,101
|
Less: Corporate
and Other (4)
|
6,632
|
|
8,350
|
Adjusted
EBITDA
|
$
60,435
|
|
$
56,751
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
We define segment
adjusted EBITDA as total revenues less total costs and expenses,
plus (i) other income, (ii) our proportional adjusted EBITDA for
equity method investees, (iii) depreciation and amortization, (iv)
adjustments related to MVC shortfall payments, (v) adjustments
related to capital reimbursement activity, (vi) unit-based and
noncash compensation, (vii) impairments and (viii) other noncash
expenses or losses, less other noncash income or gains.
|
(2)
|
Includes our
proportional share of adjusted EBITDA for Ohio Gathering, subject
to a one-month lag. We define proportional adjusted EBITDA for our
equity method investees as the product of (i) total revenues less
total expenses, excluding impairments and other noncash income
or expense items and (ii) amortization for deferred contract costs;
multiplied by our ownership interest during the respective
period.
|
(3)
|
Includes our
proportional share of adjusted EBITDA for Double E. We define
proportional adjusted EBITDA for our equity method investees as the
product of total revenues less total expenses, excluding
impairments and other noncash income or expense items;
multiplied by our ownership interest during the respective
period.
|
(4)
|
Corporate and Other
represents those results that are not specifically attributable to
a reportable segment or that have not been allocated to our
reportable segments, including certain general and administrative
expense items and natural gas and crude oil marketing
services.
|
Capital Expenditures
Capital expenditures totaled $16.4
million in the first quarter of 2023, inclusive of
maintenance capital expenditures of $4.2
million. Capital expenditures in the first quarter of 2023
were primarily related to pad connections and DJ Basin integration
projects in the Rockies segment.
|
|
Three Months Ended
March 31,
|
|
|
2023
|
|
2022
|
|
|
(In
thousands)
|
Cash paid for
capital expenditures (1):
|
|
|
|
|
Northeast
|
|
$
659
|
|
$
3,403
|
Rockies
|
|
13,360
|
|
2,573
|
Permian
|
|
—
|
|
1,154
|
Piceance
|
|
1,032
|
|
936
|
Barnett
|
|
65
|
|
243
|
Total reportable
segment capital expenditures
|
|
$
15,116
|
|
$
8,309
|
Corporate and
Other
|
|
1,322
|
|
394
|
Total cash paid for
capital expenditures
|
|
$
16,438
|
|
$
8,703
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Excludes cash paid for
capital expenditures by Ohio Gathering and Double E due to equity
method accounting.
|
Capital & Liquidity
As of March 31, 2023, SMLP had
$22.6 million in unrestricted
cash-on-hand and $317 million drawn
under its $400 million ABL Revolver
and $78.7 million of borrowing
availability, after accounting for $4.3
million of issued, but undrawn, letters of credit. As of
March 31, 2023, SMLP's gross
availability based on the borrowing base calculation in the credit
agreement was $560 million, which is
$160 million greater than the
$400 million of lender commitments to
the ABL Revolver. As of March 31,
2023, SMLP was in compliance with all financial covenants,
including interest coverage of 2.4x relative to a minimum interest
coverage covenant of 2.0x and first lien leverage ratio of 1.2x
relative to a maximum first lien leverage ratio of 2.5x. As of
March 31, 2023, SMLP reported a total
leverage ratio of approximately 5.6x.
As of March 31, 2023, the Permian
Transmission Credit Facility balance was $152.8 million, a reduction of $2.6 million relative to the December 31, 2022 balance of $155.4 million due to scheduled mandatory
amortization. The Permian Transmission Term Loan remains
non-recourse to SMLP.
MVC Shortfall Payments
SMLP billed its customers $7.1
million in the first quarter of 2023 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 2023, SMLP
recognized $7.1 million of gathering
revenue associated with MVC shortfall payments. SMLP had no
adjustments to MVC shortfall payments in the first quarter of 2023.
SMLP's MVC shortfall payment mechanisms contributed $7.1 million of total adjusted EBITDA in the
first quarter of 2023.
|
Three Months Ended
March 31, 2023
|
|
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
|
$
—
|
|
$
—
|
|
$
—
|
|
$
—
|
Total net
change
|
$
—
|
|
$
—
|
|
$
—
|
|
$
—
|
|
|
|
|
|
|
|
|
MVC shortfall
payment adjustments:
|
|
|
|
|
|
|
|
Rockies
|
$
35
|
|
$
35
|
|
$
—
|
|
$
35
|
Piceance
|
5,412
|
|
5,412
|
|
—
|
|
5,412
|
Northeast
|
1,666
|
|
1,666
|
|
—
|
|
1,666
|
Total MVC shortfall
payment adjustments
|
$
7,113
|
|
$
7,113
|
|
$
—
|
|
$
7,113
|
|
|
|
|
|
|
|
|
Total
(1)
|
$
7,113
|
|
$
7,113
|
|
$
—
|
|
$
7,113
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Exclusive of Ohio
Gathering and Double E due to equity method accounting.
|
Quarterly Distribution
The board of directors of SMLP's general partner continued to
suspend cash distributions payable on its common units and on its
Series A fixed-to-floating rate cumulative redeemable perpetual
preferred units (the "Series A Preferred Units") for the period
ended March 31, 2023. Unpaid
distributions on the Series A Preferred Units will continue to
accumulate.
First Quarter 2023 Earnings Call Information
SMLP will host a conference call at 10:00
a.m. Eastern on May 5, 2023,
to discuss its quarterly operating and financial results. The call
can be accessed via teleconference at: Q1 2023 Summit Midstream
Partners LP Earnings Conference
Call (https://register.vevent.com/register/BI4b4d0f59743e432e92e0fc8b65387af6).
Once registration is completed, participants will receive a dial-in
number along with a personalized PIN to access the call. While not
required, it is recommended that participants join 10 minutes prior
to the event start. 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 Conferences
Members of SMLP's senior management team will attend the 2023
Energy Infrastructure CEO & Investor Conference which will take
place on May 22–24, 2023, the 2023 RBC Capital Markets Global
Energy, Power & Infrastructure Conference taking place on June
6–7, 2023, and the BofA Securities 2023 Energy Credit Conference on
June 7–8, 2023. The presentation materials associated with these
events 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, Distributable Cash Flow, and Free Cash Flow, non-GAAP
financial measures.
Adjusted EBITDA
We define adjusted EBITDA as net income or loss, plus interest
expense, income tax expense, depreciation and amortization, our
proportional adjusted EBITDA for equity method investees,
adjustments related to MVC shortfall payments, adjustments related
to capital reimbursement activity, unit-based and noncash
compensation, impairments, items of income or loss that we
characterize as unrepresentative of our ongoing operations and
other noncash expenses or losses, income tax benefit, income (loss)
from equity method investees and other noncash income or
gains. Because adjusted EBITDA may be defined differently by
other entities in our industry, our definition of this non-GAAP
financial measure may not be comparable to similarly titled
measures of other entities, thereby diminishing its utility.
Management uses adjusted EBITDA in making financial, operating
and planning decisions and in evaluating our financial performance.
Furthermore, management believes that adjusted EBITDA may provide
external users of our financial statements, such as investors,
commercial banks, research analysts and others, with additional
meaningful comparisons between current results and results of prior
periods as they are expected to be reflective of our core ongoing
business.
Adjusted EBITDA is used as a supplemental financial measure to
assess:
- the ability of our assets to generate cash sufficient to make
future potential cash distributions and support our
indebtedness;
- the financial performance of our assets without regard to
financing methods, capital structure or historical cost basis;
- our operating performance and return on capital as compared to
those of other entities in the midstream energy sector, without
regard to financing or capital structure;
- the attractiveness of capital projects and acquisitions and the
overall rates of return on alternative investment opportunities;
and
- the financial performance of our assets without regard to (i)
income or loss from equity method investees, (ii) the impact of the
timing of MVC shortfall payments under our gathering agreements or
(iii) the timing of impairments or other income or expense items
that we characterize as unrepresentative of our ongoing
operations.
Adjusted EBITDA has limitations as an analytical tool and
investors should not consider it in isolation or as a substitute
for analysis of our results as reported under GAAP. For
example:
- certain items excluded from adjusted EBITDA are significant
components in understanding and assessing an entity's financial
performance, such as an entity's cost of capital and tax
structure;
- adjusted EBITDA does not reflect our cash expenditures or
future requirements for capital expenditures or contractual
commitments;
- adjusted EBITDA does not reflect changes in, or cash
requirements for, our working capital needs; and
- although depreciation and amortization are noncash charges, the
assets being depreciated and amortized will often have to be
replaced in the future, and adjusted EBITDA does not reflect any
cash requirements for such replacements.
We compensate for the limitations of adjusted EBITDA as an
analytical tool by reviewing the comparable GAAP financial
measures, understanding the differences between the financial
measures and incorporating these data points into our
decision-making process.
Distributable Cash Flow
We define Distributable Cash Flow as adjusted EBITDA, as defined
above, less cash interest paid, cash paid for taxes, net interest
expense accrued and paid on the senior notes, and maintenance
capital expenditures.
Free Cash Flow
We define free cash flow as distributable cash flow attributable
to common and preferred unitholders less growth capital
expenditures, less investments in equity method investees, less
distributions to common and preferred unitholders. Free cash flow
excludes proceeds from asset sales and cash consideration paid for
acquisitions.
We do not provide the GAAP financial measures of net income or
loss or net cash provided by operating activities on a
forward-looking basis because we are unable to predict, without
unreasonable effort, certain components thereof including, but not
limited to, (i) income or loss from equity method investees and
(ii) asset impairments. These items are inherently uncertain and
depend on various factors, many of which are beyond our control. As
such, any associated estimate and its impact on our GAAP
performance and cash flow measures could vary materially based on a
variety of acceptable management assumptions.
About Summit Midstream Partners, LP
SMLP is a value-driven limited partnership focused on
developing, owning and operating midstream energy infrastructure
assets that are strategically located in the core producing areas
of unconventional resource basins, primarily shale formations, in
the continental United States.
SMLP provides natural gas, crude oil and produced water gathering,
processing and transportation services pursuant to primarily
long-term, fee-based agreements with customers and counterparties
in five 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 Fort Worth Basin, which includes the Barnett
Shale formation in Texas; and (v)
the Piceance Basin, which includes the Mesaverde formation as well
as the Mancos and Niobrara shale formations in Colorado. SMLP has an equity method investment
in Double E Pipeline, LLC, which provides interstate natural gas
transportation service from multiple receipt points in the
Delaware Basin to various delivery
points in and around the Waha Hub in Texas. SMLP also has an equity method
investment in Ohio Gathering, which operates extensive natural gas
gathering and condensate stabilization infrastructure in the Utica
Shale in Ohio. SMLP is
headquartered in Houston,
Texas.
Forward-Looking Statements
This press release includes certain statements concerning
expectations for the future that are forward-looking within the
meaning of the federal securities laws. Forward-looking statements
include, without limitation, any statement that may project,
indicate or imply future results, events, performance or
achievements and may contain the words "expect," "intend," "plan,"
"anticipate," "estimate," "believe," "will be," "will continue,"
"will likely result," and similar expressions, or future
conditional verbs such as "may," "will," "should," "would," and
"could", including the estimated closing date of the acquisitions,
sources and uses of funding, the benefits of the acquisitions to us
and any related opportunities. 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
2022 Annual Report on Form 10-K filed with the Securities and
Exchange Commission (the "SEC") on March 1,
2023, 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,
2023
|
|
December 31,
2022
|
|
(In
thousands)
|
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
22,631
|
|
$
11,808
|
Restricted
cash
|
652
|
|
1,723
|
Accounts
receivable
|
62,888
|
|
75,287
|
Other current
assets
|
8,033
|
|
8,724
|
Total current
assets
|
94,204
|
|
97,542
|
Property, plant and
equipment, net
|
1,712,494
|
|
1,718,754
|
Intangible assets,
net
|
193,786
|
|
198,718
|
Investment in equity
method investees
|
504,683
|
|
506,677
|
Other noncurrent
assets
|
40,268
|
|
38,273
|
TOTAL
ASSETS
|
$
2,545,435
|
|
$
2,559,964
|
|
|
|
|
LIABILITIES AND
CAPITAL
|
|
|
|
Trade accounts
payable
|
$
21,978
|
|
$
14,052
|
Accrued
expenses
|
23,548
|
|
20,601
|
Deferred
revenue
|
8,788
|
|
9,054
|
Ad valorem taxes
payable
|
3,256
|
|
10,245
|
Accrued compensation
and employee benefits
|
2,915
|
|
16,319
|
Accrued
interest
|
39,317
|
|
17,355
|
Accrued environmental
remediation
|
1,342
|
|
1,365
|
Accrued settlement
payable
|
6,667
|
|
6,667
|
Current portion of
long-term debt
|
11,782
|
|
10,507
|
Other current
liabilities
|
12,460
|
|
11,724
|
Total current
liabilities
|
132,053
|
|
117,889
|
Long-term debt, net of
issuance costs
|
1,465,555
|
|
1,479,855
|
Noncurrent deferred
revenue
|
36,878
|
|
37,694
|
Noncurrent accrued
environmental remediation
|
2,074
|
|
2,340
|
Other noncurrent
liabilities
|
40,471
|
|
38,784
|
TOTAL
LIABILITIES
|
1,677,031
|
|
1,676,562
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Mezzanine
Capital
|
|
|
|
Subsidiary Series A
Preferred Units
|
118,702
|
|
118,584
|
|
|
|
|
Partners'
Capital
|
|
|
|
Series A Preferred
Units
|
87,966
|
|
85,327
|
Common limited partner
capital
|
661,736
|
|
679,491
|
Total partners'
capital
|
749,702
|
|
764,818
|
TOTAL LIABILITIES AND
CAPITAL
|
$
2,545,435
|
|
$
2,559,964
|
|
|
|
|
SUMMIT MIDSTREAM
PARTNERS, LP AND SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
Three Months Ended
March 31,
|
|
2023
|
|
2022
|
|
(In thousands,
except per-unit amounts)
|
Revenues:
|
|
|
|
Gathering services and
related fees
|
$ 57,371
|
|
$ 64,020
|
Natural gas, NGLs and
condensate sales
|
49,163
|
|
22,458
|
Other
revenues
|
5,965
|
|
9,648
|
Total
revenues
|
112,499
|
|
96,126
|
Costs and
expenses:
|
|
|
|
Cost of natural gas and
NGLs
|
30,882
|
|
22,251
|
Operation and
maintenance
|
23,972
|
|
17,062
|
General and
administrative
|
9,987
|
|
12,960
|
Depreciation and
amortization
|
29,824
|
|
30,445
|
Transaction
costs
|
302
|
|
246
|
Acquisition integration
costs
|
1,502
|
|
—
|
(Gain) loss on asset
sales, net
|
(68)
|
|
3
|
Long-lived asset
impairments
|
—
|
|
14
|
Total costs and
expenses
|
96,401
|
|
82,981
|
Other income,
net
|
56
|
|
—
|
Gain (loss) on interest
rate swaps
|
(1,273)
|
|
7,028
|
Gain on sale of
business
|
18
|
|
—
|
Interest
expense
|
(34,223)
|
|
(24,163)
|
Loss before income
taxes and equity method investment income
|
(19,324)
|
|
(3,990)
|
Income tax benefit
(expense)
|
252
|
|
(50)
|
Income from equity
method investees
|
4,909
|
|
4,035
|
Net loss
|
$ (14,163)
|
|
$
(5)
|
|
|
|
|
Net loss per limited
partner unit:
|
|
|
|
Common unit –
basic
|
$
(1.82)
|
|
$
1.35
|
Common unit –
diluted
|
$
(1.82)
|
|
$
1.32
|
|
|
|
|
Weighted-average
limited partner units outstanding:
|
|
|
|
Common units –
basic
|
10,213
|
|
9,670
|
Common units –
diluted
|
10,213
|
|
9,892
|
SUMMIT MIDSTREAM
PARTNERS, LP AND SUBSIDIARIES
UNAUDITED OTHER
FINANCIAL AND OPERATING DATA
|
|
|
Three Months Ended
March 31,
|
|
2023
|
|
2022
|
|
(In
thousands)
|
Other financial
data:
|
|
|
|
Net loss
|
$ (14,163)
|
|
$
(5)
|
Net cash provided by
operating activities
|
49,695
|
|
46,046
|
Capital
expenditures
|
16,438
|
|
8,703
|
Contributions to equity
method investees
|
3,500
|
|
8,444
|
Adjusted
EBITDA
|
60,435
|
|
56,751
|
Cash flow available for
distributions (1)
|
24,903
|
|
31,755
|
Free Cash
Flow
|
7,566
|
|
17,525
|
Distributions
(2)
|
n/a
|
|
n/a
|
|
|
|
|
Operating
data:
|
|
|
|
Aggregate average daily
throughput – natural gas (MMcf/d)
|
1,185
|
|
1,306
|
Aggregate average daily
throughput – liquids (Mbbl/d)
|
74
|
|
65
|
|
|
|
|
Ohio Gathering average
daily throughput (MMcf/d) (3)
|
636
|
|
598
|
Double E average daily
throughput (MMcf/d) (4)
|
264
|
|
187
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Cash flow available for
distributions is also referred to as Distributable Cash Flow, or
DCF.
|
(2)
|
Represents
distributions declared and ultimately paid or expected to be paid
to preferred and common unitholders in respect of a given period.
On May 3, 2020, the board of directors of SMLP's general partner
announced an immediate suspension of the cash distributions payable
on its preferred and common units. Excludes distributions paid on
the Subsidiary Series A Preferred Units issued at Summit Permian
Transmission Holdco, LLC.
|
(3)
|
Gross basis, represents
100% of volume throughput for Ohio Gathering, subject to a
one-month lag.
|
(4)
|
Gross basis, represents
100% of volume throughput for Double E.
|
SUMMIT MIDSTREAM
PARTNERS, LP AND SUBSIDIARIES
UNAUDITED
RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES
|
|
|
Three Months Ended
March 31,
|
|
2023
|
|
2022
|
|
(In
thousands)
|
Reconciliations of
net income to adjusted EBITDA and Distributable
Cash Flow:
|
|
|
|
Net loss
|
$ (14,163)
|
|
$
(5)
|
Add:
|
|
|
|
Interest
expense
|
34,223
|
|
24,163
|
Income tax expense
(benefit)
|
(252)
|
|
50
|
Depreciation and
amortization (1)
|
30,059
|
|
30,679
|
Proportional adjusted
EBITDA for equity method investees (2)
|
11,638
|
|
10,452
|
Adjustments related to
capital reimbursement activity (3)
|
(1,186)
|
|
(1,728)
|
Unit-based and noncash
compensation
|
1,929
|
|
1,690
|
(Gain) loss on asset
sales, net
|
(68)
|
|
3
|
Long-lived asset
impairment
|
—
|
|
14
|
Other, net
(4)
|
3,164
|
|
(4,532)
|
Less:
|
|
|
|
Income from equity
method investees
|
4,909
|
|
4,035
|
Adjusted
EBITDA
|
$ 60,435
|
|
$ 56,751
|
Less:
|
|
|
|
Cash interest
paid
|
9,420
|
|
3,474
|
Senior notes interest
adjustment (5)
|
21,883
|
|
18,605
|
Maintenance capital
expenditures
|
4,229
|
|
2,917
|
Cash flow available
for distributions (6)
|
$ 24,903
|
|
$ 31,755
|
Less:
|
|
|
|
Growth capital
expenditures
|
12,209
|
|
5,786
|
Investment in equity
method investee
|
3,500
|
|
8,444
|
Distributions on
Subsidiary Series A Preferred Units
|
1,628
|
|
—
|
Free Cash
Flow
|
$
7,566
|
|
$ 17,525
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes the
amortization expense associated with our favorable gas gathering
contracts as reported in other revenues.
|
(2)
|
Reflects our
proportionate share of Double E and Ohio Gathering (subject to a
one-month lag) adjusted EBITDA.
|
(3)
|
Adjustments related to
capital reimbursement activity represent contributions in aid of
construction revenue recognized in accordance with Accounting
Standards Update No. 2014-09 Revenue from Contracts with Customers
("Topic 606").
|
(4)
|
Represents items of
income or loss that we characterize as unrepresentative of our
ongoing operations. For the three months ended March 31, 2023,
the amount includes $1.3 million of loss related to the fair value
of interest rate swaps and $1.5 million of integration costs. For
the three months ended March 31, 2022, the amount includes
$7.0 million of realized and unrealized gains related to the fair
value of interest rate swaps and $2.0 million of severance
expenses.
|
(5)
|
Senior notes interest
adjustment represents the net of interest expense accrued and paid
during the period. Interest on the 2025 senior notes is paid in
cash semi-annually in arrears on April 15 and October 15 until
maturity in April 2025. Interest on the 2026 senior notes is paid
in cash semi-annually in arrears on April 15 and October 15 until
maturity in October 2026.
|
(6)
|
Represents cash flow
available for distribution to preferred and common unitholders.
Common distributions cannot be paid unless all accrued preferred
distributions are paid. Cash flow available for distributions is
also referred to as Distributable Cash Flow, or DCF.
|
SUMMIT MIDSTREAM
PARTNERS, LP AND SUBSIDIARIES
UNAUDITED
RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES
|
|
|
Three Months Ended
March 31,
|
|
2023
|
|
2022
|
|
(In
thousands)
|
Reconciliation of
net cash provided by operating activities to
adjusted
EBITDA and distributable cash flow:
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
49,695
|
|
$
46,046
|
Add:
|
|
|
|
Interest expense,
excluding amortization of debt issuance costs
|
31,062
|
|
21,929
|
Income tax expense
(benefit)
|
(252)
|
|
50
|
Changes in operating
assets and liabilities
|
(20,114)
|
|
(12,467)
|
Proportional adjusted
EBITDA for equity method investees (1)
|
11,638
|
|
10,452
|
Adjustments related to
capital reimbursement activity (2)
|
(1,186)
|
|
(1,728)
|
Other, net
(3)
|
779
|
|
2,972
|
Less:
|
|
|
|
Distributions from
equity method investees
|
10,403
|
|
10,224
|
Noncash lease
expense
|
784
|
|
279
|
Adjusted
EBITDA
|
$
60,435
|
|
$
56,751
|
Less:
|
|
|
|
Cash interest
paid
|
9,420
|
|
3,474
|
Senior notes interest
adjustment (4)
|
21,883
|
|
18,605
|
Maintenance capital
expenditures
|
4,229
|
|
2,917
|
Cash flow available
for distributions (5)
|
$
24,903
|
|
$
31,755
|
Less:
|
|
|
|
Growth capital
expenditures
|
12,209
|
|
5,786
|
Investment in equity
method investee
|
3,500
|
|
8,444
|
Distributions on
Subsidiary Series A Preferred Units
|
1,628
|
|
—
|
Free Cash
Flow
|
$
7,566
|
|
$
17,525
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Reflects our
proportionate share of Double E and Ohio Gathering adjusted EBITDA,
subject to a one-month lag.
|
(2)
|
Adjustments related to
capital reimbursement activity represent contributions in aid of
construction revenue recognized in accordance with Accounting
Standards Update No. 2014-09 Revenue from Contracts with Customers
("Topic 606").
|
(3)
|
Represents items of
income or loss that we characterize as unrepresentative of our
ongoing operations. For the three months ended March 31, 2023,
the amount includes $1.5 million of integration costs and $1.1
million of realized gains on interest rate swaps. For the three
months ended March 31, 2022, the amount includes $2.0 million
of severance expenses.
|
(4)
|
Senior notes interest
adjustment represents the net of interest expense accrued and paid
during the period. Interest on the 2025 senior notes is paid in
cash semi-annually in arrears on April 15 and October 15 until
maturity in April 2025. Interest on the 2026 senior notes is paid
in cash semi-annually in arrears on April 15 and October 15 until
maturity in October 2026.
|
(5)
|
Represents cash flow
available for distribution to preferred and common unitholders.
Common distributions cannot be paid unless all accrued preferred
distributions are paid. Cash flow available for distributions is
also referred to as Distributable Cash Flow, or DCF.
|
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SOURCE Summit Midstream Partners, LP