smlp-20220804
0001549922FALSE00015499222022-08-042022-08-04

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 4, 2022
Summit Midstream Partners, LP
(Exact name of registrant as specified in its charter)
Delaware001-3566645-5200503
(State or other jurisdiction(Commission(IRS Employer
of incorporation)File Number)Identification No.)
910 Louisiana Street, Suite 4200
HoustonTX 77002
(Address of principal executive office) (Zip Code)
(Registrants’ telephone number, including area code): (832413-4770
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Securities Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common UnitsSMLPNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o



Item 2.02 Results of Operations and Financial Condition.
On August 4, 2022, Summit Midstream Partners, LP (the “Partnership,” “we” and “our”) issued a press release announcing its results of operations for the three months ended June 30, 2022. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information furnished in this Item 2.02 shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended (the “1934 Act”), and shall not be deemed incorporated by reference in any filing with the Securities and Exchange Commission, whether or not filed under the Securities Act of 1933 or the 1934 Act, regardless of any general incorporation language in such document.
Use of Non-GAAP Financial Measures
In addition to reporting financial results in accordance with accounting principles generally accepted in the United States of America ("GAAP"), the Partnership presents certain non-GAAP financial measures. Specifically, the Partnership presents adjusted EBITDA and distributable cash flow. 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. We define distributable cash flow as adjusted EBITDA plus cash interest received and cash taxes received, less cash interest paid, senior notes interest adjustment, adjusted Series A Preferred Units cash distribution, cash taxes paid and maintenance capital expenditures.
We exclude these items because they are considered unusual and not indicative of our ongoing operations. Our definitions of these non-GAAP financial measures may differ from the definitions of similar measures used by other companies, thereby diminishing the utility of these measures. Management uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Partnership’s financial performance. Furthermore, management believes that these non-GAAP financial measures may provide users of the Partnership’s financial statements 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 the Partnership’s results as reported under GAAP.
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.
Reconciliations of GAAP to non-GAAP financial measures are included as attachments to the press release which has been posted to the “Investors” section of our website at www.summitmidstream.com.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit NumberDescription
104Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Summit Midstream Partners, LP
(Registrant)
By:Summit Midstream GP, LLC (its general partner)
Dated:8/4/2022/s/ William J. Mault
William J. Mault, Executive Vice President and Chief Financial Officer
2
Document
EXHIBIT 99.1
https://cdn.kscope.io/6f3e435b8e69337572fd7c885e5069e1-image_0.jpg

Summit Midstream Partners, LP
910 Louisiana Street, Suite 4200
Houston, TX 77002
Summit Midstream Partners, LP Reports Second Quarter 2022
Financial and Operating Results
Second quarter 2022 net loss of $91.8 million, adjusted EBITDA of $50.5 million and cash flow available for distributions ("Distributable Cash Flow" or “DCF”) of $25.6 million
Adjusted EBITDA was impacted by approximately $3.6 million of estimated weather-related interruptions in the Rockies segment, maintenance activities and wells temporarily shut-in behind the Northeast segment and deal costs incurred during the quarter
Sold the Lane Gathering and Processing System in the Delaware Basin and assigned the associated take-or-pay firm capacity on Double E to a Subsidiary of Matador Resources Company for $75 million in cash
Reduced total debt by $82 million, increasing available liquidity to approximately $255 million
Expect to be at the high-end of previously announced 2022 Adjusted EBITDA guidance range of $205 million to $220 million
Current producer development plans include at least 200 new well connections in 2023 behind our systems, which we expect to result in at least 10% year-over-year Adjusted EBITDA growth

Houston, Texas (August 4, 2022) – Summit Midstream Partners, LP (NYSE: SMLP) (“Summit”, “SMLP” or the “Partnership”) announced today its financial and operating results for the three months ended June 30, 2022, including a net loss of $91.8 million, adjusted EBITDA of $50.5 million and DCF of $25.6 million. SMLP also recognized an impairment of $84.5 million related to the sale of its Lane Gathering and Processing System in the Delaware Basin. Operated natural gas throughput from wholly owned assets averaged 1,200 million cubic feet per day (“MMcf/d”) and liquids throughput averaged 54 thousand barrels per day (“Mbbl/d”). Total quarterly natural gas gathering volume throughput, including SMLP’s proportionate share from OGC and Double E, decreased 32 MMcf/d relative to the first quarter of 2022, primarily due to approximately 55 MMcf/d of reductions resulting from maintenance activities and wells temporarily shut-in behind the Northeast segment, partially offset by nearly 70% volume growth behind Double E. Natural gas volumes benefited from 8 new wells brought online behind our wholly owned systems and 6 new wells brought online behind our Ohio Gathering joint venture during the quarter. Second quarter 2022 liquids volume decreased by 11 Mbbl/d, or 16.9% relative to the first quarter of 2022 primarily due to severe winter weather in North Dakota and no new wells brought online during the quarter.

Heath Deneke, President, Chief Executive Officer and Chairman, commented, “Summit's second quarter 2022 financial and operating results were ahead of internal expectations, despite approximately $3.6 million of unexpected weather, maintenance and deal costs, which was driven by continued strong performance from recent wells turned in line and lower than anticipated operating expenses for the quarter. I’d like to thank our team up in North Dakota for the significant effort made to get our systems back online safely and quickly. Based on year-to-date financial results and the timing and performance of recent well connections in 2022, we believe we will trend toward the high end of our previously announced Adjusted EBITDA guidance range of $205 to $220 million. We continue to see strong momentum behind our systems throughout the second half of the 2022 and into 2023 which we believe positions SMLP for strong growth in 2023.”

“Based on recent customer development plans, permitting and rig activity, and commodity price expectations of over $80 per barrel of crude oil and over $5 per MMBtu of natural gas in 2023, we currently expect to connect at least 200 wells to our systems in 2023. While this remains below pre-pandemic average well connections of approximately 260 wells per year, this would be a 80% increase from the average wells connected to the system in 2021 and 2022. We are seeing positive momentum in virtually all our operating segments. In the Northeast, along with increasing activity, we are optimistic about the potential impact of Ascent Resources, LLC's recently announced acquisition of ~26,800 net acres in the Utica that is dedicated to our wholly owned SMU system. In the Piceance, we continue to work with our customers on a multi-year development program that would bring approximately 200 wells online over the next couple years. We expect the first batch of approximately 15 to 20 wells to come online
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EXHIBIT 99.1
beginning in Q2 2023 and continue thereafter. We believe this activity will offset natural production declines and result in modest volume growth longer-term in the Piceance. In the Barnett, we are currently working with our customers on a development program that includes over 30 new wells in 2023. The outperformance of recent well results and increased level of activity in 2023 would drive meaningful volume growth behind that segment. In the Williston, we expect to be at the higher end of our previously announced 45 – 65 well connections in 2022 and based on recent customer conversations we believe there could be comparable levels of well connections in 2023. This level of activity would drive meaningful liquids volume growth behind the system over the next several quarters. While it’s still too early to formally provide 2023 guidance, we believe this level of well connection activity and continued contracted EBITDA growth behind our Double E joint venture to generate at least 10% year-over-year Adjusted EBITDA growth in 2023. We are excited about the potential impact of this growth on our business and balance sheet and will continue to provide updates throughout the year as our customer’s plans further develop.”

“We also achieved another key milestone during the quarter with the sale of our Lane Gathering & Processing System to a wholly owned subsidiary of Matador Resources Company (“Matador”) for a cash sale price of $75 million and the assumption of an additional 60 MMcf/d take-or-pay firm capacity behind Double E. The transaction reduced our total leverage ratio by ~0.3x and increased our total liquidity to $255 million as of June 30, 2022. The transaction also expands Double E’s commercial relationship with Matador, a significant acreage holder owning nearly 125,000 net acres in Eddy and Lea Counties in southeastern New Mexico. Matador now has two gas processing complexes connected to the Double E system, Matador’s interest in San Mateo Midstream, LLC’s 460 MMcf/d Black River Processing Plant Complex and the 60 MMcf/d Lane G&P System acquired from us. Additionally, as the availability of pipeline takeaway capacity out of New Mexico continues to tighten with current levels of drilling activity, we are in active dialogue with multiple new shippers to fill up the remaining unsubscribed firm capacity in Double E and potentially further expand the pipeline’s capacity to over 2.0 Bcf per day.”
Second Quarter 2022 Business Highlights
In the second quarter of 2022, SMLP’s average daily natural gas throughput for its wholly owned operated systems decreased by 106 MMcf/d to 1,200 MMcf/d, and liquids volumes decreased by 11 Mbb/d to 54 Mbbl/d, relative to the first quarter of 2022. Ohio Gathering Company natural gas throughput decreased 36 MMcf/d to 562 MMcf/d and generated $7.5 million of adjusted EBITDA net to SMLP for the second quarter of 2022. Double E Pipeline gross volumes transported increased 127 MMcf/d to 314 MMcf/d and generated $3.9 million of adjusted EBITDA net to SMLP for the second quarter of 2022. SMLP’s customers are currently operating eight drilling rigs on acreage behind SMLP's gathering systems and have approximately 48 wells that have been drilled and are expected to be turned in line later this year.
Natural gas price driven segments:
Natural gas price driven segments had combined quarterly segment adjusted EBITDA of $41.2 million and combined capital expenditures of $4.6 million in the second quarter of 2022.
Northeast segment adjusted EBITDA of $18.6 million decreased by $1.5 million from the first quarter of 2022, primarily due to a 14.7% decrease in volume on our wholly owned systems and a 6.1% decrease in volume at our Ohio Gathering Company ("OGC") joint venture. The volume decline was primarily driven by approximately 45 MMcf/d of maintenance related downtime upstream of our TPL-7 connection, approximately 9 MMcf/d of volume temporarily shut-in behind our wholly-owned SMU system and approximately 6 MMcf/d (8/8ths) of volume temporarily shut-in behind our OGC joint venture while customers were completing near-by wells, and natural production declines, partially offset by 6 new condensate wells that came online behind our OGC joint venture. We estimate that the maintenance related downtime and frac-protect activities impacted segment adjusted EBITDA by approximately $0.9 million, net to SMLP, during the quarter. The maintenance and frac-protect activities subsided beginning in July, we connected 4 new wells behind our wholly-owned SMU system in late July 2022 that are producing over 100 MMcf/d, and 9 new wells were recently connected behind our OGC joint venture that are expected to producer over 180 MMcf/d. We believe these activities will serve as a volume catalyst for the Northeast segment beginning in the third quarter of 2022.
Piceance segment adjusted EBITDA of $15.4 million was generally in line with the first quarter of 2022. Volume throughput was flat with the prior quarter, primarily due to natural production declines, offset by volume from a new 9-well pad that was turned-in-line in October 2021. No new wells were connected during the quarter. We expect 17 permitted wells to be turned-in-line by one of our anchor customers in the fourth quarter of 2022.
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EXHIBIT 99.1
Barnett segment adjusted EBITDA of $7.2 million decreased by $2.0 million relative to the first quarter of 2022 primarily due to a $3.0 million increase in operating expenses resulting from commercial settlements that reduced operating expenses in prior periods, partially offset by a 1.5% increase in volume throughput. There were 4 new wells connected to the system at the end of April 2022 that achieved peak volumes of approximately 27 MMcf/d during the quarter. There were also 4 new wells that came online in late July and we expect an additional 4 wells in the fourth quarter of 2022 that are currently being drilled.
Oil price driven segments
Oil price driven segments generated $18.7 million of combined segment adjusted EBITDA in the second quarter of 2022 and had combined capital expenditures of $1.2 million.
Permian segment adjusted EBITDA of $4.8 million increased $0.7 million relative to the first quarter of 2022, primarily due to a $0.8 million increase in proportionate EBITDA from our Double E joint venture. The second quarter financial results include the Lane Gathering and Processing System, which we sold on June 30, 2022. Volumes on the Lane Gathering and Processing System were flat relative to the first quarter of 2022. Double E gross volume throughput averaged 314 MMcf/d during the second quarter of 2022, an increase of 127 MMcf/d, or approximately 70% growth relative to the first quarter of 2022. There are currently over 100 rigs running in Eddy and Lea Counties, New Mexico, which we believe will be a catalyst for additional volumes and long-term take-or-pay contracts behind our Double E joint venture.
Rockies segment adjusted EBITDA of $13.9 million decreased $1.9 million relative to the first quarter of 2022, primarily due to an 11 Mbbl/d, or 16.9% decrease in liquids volumes because of significant weather-related interruptions during the quarter. Liquids volumes were completely shut-in across the system from April 23rd through early-May and ramped back up to normal production in late-May. We estimate that the winter storm reduced liquids volumes by approximately 11 Mbbl/d, accounting for nearly all the sequential volume decline, and impacted gross margin by approximately $1.7 million during the quarter. There were 4 new wells connected behind our gas gathering systems and no new wells connected behind our liquids system during the quarter. There are currently 4 rigs running with over 35 DUCs behind the system and over 25 wells expected to come online in the third quarter of 2022.

The following table presents average daily throughput by reportable segment for the periods indicated:
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Average daily throughput (MMcf/d):
Northeast (1)
632 853687 800
Rockies29 3529 35
Permian (1)
27 2927 29
Piceance312 326312 334
Barnett200 198199 195
Aggregate average daily throughput1,200 1,4411,254 1,393
Average daily throughput (Mbbl/d):
Rockies54 6360 64
Aggregate average daily throughput54 6360 64
Ohio Gathering average daily throughput (MMcf/d) (2)
562 514580 536
Double E average daily throughput (MMcf/d) (3)
314 — 251 
__________
(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.
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EXHIBIT 99.1
(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 June 30,Six Months Ended June 30,
2022202120222021
(In thousands)(In thousands)
Reportable segment adjusted EBITDA (1):
Northeast (2)
$18,568 $23,361 $38,636 $43,554 
Rockies13,899 14,732 29,729 30,884 
Permian (3)
4,817 1,341 8,966 2,592 
Piceance15,350 20,324 31,118 41,358 
Barnett7,247 8,889 16,533 16,905 
Total$59,881 $68,647 $124,982 $135,293 
Less: Corporate and Other (4)
9,410 6,517 17,762 12,720 
Adjusted EBITDA$50,471 $62,130 $107,220 $122,573 
__________
(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 $6.1 million in the second quarter of 2022, inclusive of maintenance capital expenditures of $1.9 million. Capital expenditures in the second quarter of 2022 were primarily related to growth projects to connect new pad sites in our Northeast and Rockies segments.
Six Months Ended June 30,
20222021
(In thousands)
Cash paid for capital expenditures (1):
Northeast$5,770 $3,734 
Rockies3,558 2,147 
Permian1,323 246 
Piceance2,828 (719)
Barnett552 437 
Total reportable segment capital expenditures$14,031 $5,845 
Corporate and Other763 117 
Total cash paid for capital expenditures$14,794 $5,962 
__________
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EXHIBIT 99.1
(1)Excludes cash paid for capital expenditures by Ohio Gathering and Double E due to equity method accounting.
Capital & Liquidity
As of June 30, 2022, SMLP had $151 million drawn under its $400 million ABL Revolver and $243.1 million of borrowing availability, after accounting for $5.9 million of issued, but undrawn letters of credit. As of June 30, 2022, SMLP's gross availability based on the borrowing base calculation in the credit agreement was $584 million, which is $184 million greater than the $400 million of lender commitments to the ABL Revolver. As of June 30, 2022 SMLP was in compliance with all financial covenants, including interest coverage of 2.7x relative to a minimum interest coverage covenant of 2.0x and first lien leverage ratio of 0.6x relative to a maximum first lien leverage ratio of 2.5x. As of June 30, 2022, SMLP reported a total leverage ratio of 5.08x.
As of June 30, 2022, the Permian Transmission Credit Facility balance was $157.8 million, a reduction of $2.2 million relative to the December 31, 2021 balance of $160.0 million due to scheduled mandatory amortization. The Permian Transmission Term Loan remains non-recourse to SMLP.
MVC Shortfall Payments
SMLP billed its customers $7.8 million in the second quarter of 2022 related to MVC shortfalls. For those customers that do not have MVC shortfall credit banking mechanisms in their gathering agreements, the MVC shortfall payments are accounted for as gathering revenue in the period in which they are earned. In the second quarter of 2022, SMLP recognized $10.1 million of gathering revenue associated with MVC shortfall payments. SMLP had no adjustments to MVC shortfall payments in the second quarter of 2022. SMLP’s MVC shortfall payment mechanisms contributed $10.1 million of total adjusted EBITDA in the second quarter of 2022.
Three Months Ended June 30, 2022
MVC BillingsGathering revenueAdjustments to MVC shortfall paymentsNet impact to adjusted EBITDA
(In thousands)
Net change in deferred revenue related to MVC
   shortfall payments:
Piceance Basin$— $— $— $— 
Total net change$ $ $ $ 
MVC shortfall payment adjustments:
Rockies$— $2,246 $— $2,246 
Piceance6,251 6,251 — 6,251 
Northeast1,556 1,556 — 1,556 
Total MVC shortfall payment adjustments$7,807 $10,053 $ $10,053 
Total (1)
$7,807 $10,053 $ $10,053 
__________
(1)Exclusive of Ohio Gathering and Double E due to equity method accounting.
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EXHIBIT 99.1
Six Months Ended June 30, 2022
MVC BillingsGathering revenueAdjustments to MVC shortfall paymentsNet impact to adjusted EBITDA
(In thousands)
Net change in deferred revenue related to MVC
   shortfall payments:
Piceance Basin$288 $288 $— $288 
Total net change$288 $288 $ $288 
MVC shortfall payment adjustments:
Rockies$— $4,491 $— $4,491 
Piceance12,382 12,382 — 12,382 
Northeast3,066 3,066 — 3,066 
Total MVC shortfall payment adjustments$15,448 $19,939 $ $19,939 
Total (1)
$15,736 $20,227 $ $20,227 
__________
(1)Exclusive of Ohio Gathering and Double E due to equity method accounting.
Quarterly Distribution
The board of directors of SMLP’s general partner continued to suspend cash distributions payable on its common units and on its 9.50% Series A fixed-to-floating rate cumulative redeemable perpetual preferred units (the "Series A Preferred Units") for the period ended June 30, 2022. Unpaid distributions on the Series A Preferred Units will continue to accumulate.
Second Quarter 2022 Earnings Call Information
SMLP will host a conference call at 10:00 a.m. Eastern on Friday, August 5, 2022, to discuss its quarterly operating and financial results. Interested parties may participate in the call by dialing 404-400-0571 or toll-free 866-374-5140 and entering the PIN 91939799#. The conference call, live webcast and archive of the call can be accessed through the Investors section of SMLP's website at www.summitmidstream.com.
Use of Non-GAAP Financial Measures
We report financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). We also present adjusted EBITDA and Distributable Cash Flow, non-GAAP financial measures.
Adjusted EBITDA
We define adjusted EBITDA as net income or loss, plus interest expense, income tax expense, depreciation and amortization, our proportional adjusted EBITDA for equity method investees, adjustments related to MVC shortfall payments, adjustments related to capital reimbursement activity, unit-based and noncash compensation, impairments, items of income or loss that we characterize as unrepresentative of our ongoing operations and other noncash expenses or losses, income tax benefit, income (loss) from equity method investees and other noncash income or gains. Because adjusted EBITDA may be defined differently by other entities in our industry, our definition of this non-GAAP financial measure may not be comparable to similarly titled measures of other entities, thereby diminishing its utility.
Management uses adjusted EBITDA in making financial, operating and planning decisions and in evaluating our financial performance. Furthermore, management believes that adjusted EBITDA may provide external users of our financial statements, such as investors, commercial banks, research analysts and others, with additional meaningful comparisons between current results and results of prior periods as they are expected to be reflective of our core ongoing business.
Adjusted EBITDA is used as a supplemental financial measure to assess:
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EXHIBIT 99.1
the ability of our assets to generate cash sufficient to make future potential cash distributions and support our indebtedness;
the financial performance of our assets without regard to financing methods, capital structure or historical cost basis;
our operating performance and return on capital as compared to those of other entities in the midstream energy sector, without regard to financing or capital structure;
the attractiveness of capital projects and acquisitions and the overall rates of return on alternative investment opportunities; and
the financial performance of our assets without regard to (i) income or loss from equity method investees, (ii) the impact of the timing of minimum volume commitments shortfall payments under our gathering agreements or (iii) the timing of impairments or other income or expense items that we characterize as unrepresentative of our ongoing operations.
Adjusted EBITDA has limitations as an analytical tool and investors should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. For example:
certain items excluded from adjusted EBITDA are significant components in understanding and assessing an entity's financial performance, such as an entity's cost of capital and tax structure;
adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;
adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; and
although depreciation and amortization are noncash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted EBITDA does not reflect any cash requirements for such replacements.
We compensate for the limitations of adjusted EBITDA as an analytical tool by reviewing the comparable GAAP financial measures, understanding the differences between the financial measures and incorporating these data points into our decision-making process.
Distributable Cash Flow
We define Distributable Cash Flow as adjusted EBITDA, as defined above, less cash interest paid, cash paid for taxes, net interest expense accrued and paid on the senior notes, and maintenance capital expenditures.
We do not provide the GAAP financial measures of net income or loss or net cash provided by operating activities on a forward-looking basis because we are unable to predict, without unreasonable effort, certain components thereof including, but not limited to, (i) income or loss from equity method investees and (ii) asset impairments. These items are inherently uncertain and depend on various factors, many of which are beyond our control. As such, any associated estimate and its impact on our GAAP performance and cash flow measures could vary materially based on a variety of acceptable management assumptions.
About Summit Midstream Partners, LP
SMLP is a value-driven limited partnership focused on developing, owning and operating midstream energy infrastructure assets that are strategically located in the core producing areas of unconventional resource basins, primarily shale formations, in the continental United States. SMLP provides natural gas, crude oil and produced water gathering, processing and transportation services pursuant to primarily long-term, fee-based agreements with customers and counterparties in six unconventional resource basins: (i) the Appalachian Basin, which includes the Utica and Marcellus shale formations in Ohio and West Virginia; (ii) the Williston Basin, which includes the Bakken and Three Forks shale formations in North Dakota; (iii) the Denver-Julesburg Basin, which includes the Niobrara and Codell shale formations in Colorado and Wyoming; (iv) the Permian Basin, which includes the Bone Spring and Wolfcamp formations in New Mexico; (v) the Fort Worth Basin, which includes the Barnett Shale formation in Texas; and (vi) the Piceance Basin, which includes the Mesaverde formation as well as the Mancos and Niobrara shale formations in Colorado. SMLP has an equity method investment in Double E Pipeline, LLC, which provides interstate natural gas transportation service from multiple receipt points in the Delaware Basin to various delivery points in and around the Waha Hub in Texas. SMLP also has an equity method investment in Ohio Gathering, which
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EXHIBIT 99.1
operates extensive natural gas gathering and condensate stabilization infrastructure in the Utica Shale in Ohio. SMLP is headquartered in Houston, Texas.
Forward-Looking Statements
This press release includes certain statements concerning expectations for the future that are forward-looking within the meaning of the federal securities laws. Forward-looking statements include, without limitation, any statement that may project, indicate or imply future results, events, performance or achievements and may contain the words "expect," "intend," "plan," "anticipate," "estimate," "believe," "will be," "will continue," "will likely result," and similar expressions, or future conditional verbs such as "may," "will," "should," "would," and "could." In addition, any statement concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies and possible actions taken by us or our subsidiaries are also forward-looking statements. Forward-looking statements also contain known and unknown risks and uncertainties (many of which are difficult to predict and beyond management’s control) that may cause SMLP’s actual results in future periods to differ materially from anticipated or projected results. An extensive list of specific material risks and uncertainties affecting SMLP is contained in its 2021 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2022, as amended and updated from time to time. Any forward-looking statements in this press release are made as of the date of this press release and SMLP undertakes no obligation to update or revise any forward-looking statements to reflect new information or events.
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SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
June 30,
2022
December 31,
2021
(In thousands)
ASSETS
Cash and cash equivalents$12,367 $7,349 
Restricted cash3,333 12,223 
Accounts receivable59,392 62,121 
Other current assets3,716 5,676 
Total current assets78,808 87,369 
Property, plant and equipment, net1,531,450 1,726,082 
Intangible assets, net156,877 172,927 
Investment in equity method investees519,553 523,196 
Other noncurrent assets23,645 12,888 
TOTAL ASSETS$2,310,333 $2,522,462 
LIABILITIES AND CAPITAL
Trade accounts payable$8,378 $10,498 
Accrued expenses21,323 14,462 
Deferred revenue9,720 10,374 
Ad valorem taxes payable4,738 8,570 
Accrued compensation and employee benefits6,760 11,019 
Accrued interest15,992 12,737 
Accrued environmental remediation2,108 3,068 
Current portion of long-term debt7,526 — 
Other current liabilities10,476 8,509 
Total current liabilities87,021 79,237 
Long-term debt, net of issuance costs1,232,512 1,355,072 
Noncurrent deferred revenue40,362 42,570 
Noncurrent accrued environmental remediation2,272 2,538 
Other noncurrent liabilities32,184 32,357 
Total liabilities1,394,351 1,511,774 
Commitments and contingencies
Mezzanine Capital
Subsidiary Series A Preferred Units113,574 106,325 
Partners' Capital
Series A Preferred Units81,290 169,769 
Common limited partner capital 721,118 734,594 
Total partners' capital
802,408 904,363 
TOTAL LIABILITIES AND CAPITAL
$2,310,333 $2,522,462 
9


SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
(In thousands, except per-unit amounts)
Revenues:
Gathering services and related fees$61,631 $74,233 $125,651 $144,580 
Natural gas, NGLs and condensate sales28,278 16,416 50,736 37,180 
Other revenues9,154 9,392 18,802 17,599 
Total revenues99,063 100,041 195,189 199,359 
Costs and expenses:
Cost of natural gas and NGLs26,831 16,626 49,082 37,102 
Operation and maintenance22,277 17,507 39,339 34,100 
General and administrative10,473 29,360 23,433 39,938 
Depreciation and amortization30,111 28,364 60,556 56,875 
Transaction costs(13)450 233 217 
Gain on asset sales, net(313)(4)(310)(140)
Long-lived asset impairments84,614 33 84,628 1,525 
Total costs and expenses173,980 92,336 256,961 169,617 
Other income (expense), net(4)352 (4)408 
Gain (loss) on interest rate swaps3,936 (2,686)10,964 (2,692)
Loss on ECP Warrants— (12,159)— (13,634)
Interest expense(24,887)(15,502)(49,050)(29,455)
Loss before income taxes and equity method investment income(95,872)(22,290)(99,862)(15,631)
Income tax (expense) benefit(325)248 (375)262 
Income from equity method investees4,393 2,304 8,428 4,619 
Net loss$(91,804)$(19,738)$(91,809)$(10,750)
Net loss per limited partner unit:
Common unit – basic$(9.53)$(2.91)$(8.45)$(2.91)
Common unit – diluted$(9.53)$(2.91)$(8.45)$(2.91)
Weighted-average limited partner units outstanding:
Common units – basic10,166 6,656 9,919 6,392 
Common units – diluted10,166 6,656 9,919 6,392 





10


SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
UNAUDITED OTHER FINANCIAL AND OPERATING DATA
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
(In thousands)
Other financial data:
Net income (loss)$(91,804)$(19,738)$(91,809)$(10,750)
Net cash provided by operating activities14,113 34,787 60,159 86,217 
Capital expenditures6,091 3,352 14,794 5,962 
Contributions to equity method investees— 43,324 8,444 48,943 
Adjusted EBITDA50,471 62,130 107,220 122,573 
Cash flow available for distributions (1)
$25,626 $46,465 $57,379 $92,627 
Distributions (2)
n/an/an/an/a
Operating data:
Aggregate average daily throughput – natural gas (MMcf/d)
1,200 1,441 1,254 1,393 
Aggregate average daily throughput – liquids (Mbbl/d)54 63 60 64 
Ohio Gathering average daily throughput (MMcf/d) (3)
562 514 580 536 
Double E average daily throughput (MMcf/d) (4)
314 — 251 
__________
(1)Cash flow available for distributions is also referred to as Distributable Cash Flow, or DCF.
(2)Represents distributions declared and ultimately paid or expected to be paid to preferred and common unitholders in respect of a given period. On May 3, 2020, the board of directors of SMLP’s general partner announced an immediate suspension of the cash distributions payable on its preferred and common units.
(3)Gross basis, represents 100% of volume throughput for Ohio Gathering, subject to a one-month lag.
(4)Gross, basis, represents 100% of volume throughput for Double E.




11


SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
UNAUDITED RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
(In thousands)
Reconciliations of net income to adjusted EBITDA and Distributable
    Cash Flow:
Net income (loss)$(91,804)$(19,738)$(91,809)$(10,750)
Add:
Interest expense24,887 15,502 49,050 29,455 
Income tax expense (benefit)325 (248)375 (262)
Depreciation and amortization (1)
30,346 28,598 61,025 57,344 
Proportional adjusted EBITDA for equity method investees (2)
11,406 6,841 21,858 13,713 
Adjustments related to capital reimbursement activity (3)
(1,578)(2,225)(3,306)(3,470)
Unit-based and noncash compensation582 1,048 2,272 3,015 
Gain on asset sales, net(313)(4)(310)(140)
Long-lived asset impairment84,614 33 84,628 1,525 
Other, net (4)
(3,601)34,627 (8,135)36,762 
Less:
Income from equity method investees4,393 2,304 8,428 4,619 
Adjusted EBITDA$50,471 $62,130 $107,220 $122,573 
Less:
Cash interest paid38,565 14,984 42,039 27,869 
Cash paid for taxes149 15 149 15 
Senior notes interest adjustment (5)
(15,795)(512)2,810 — 
Maintenance capital expenditures1,926 1,178 4,843 2,062 
Cash flow available for distributions (6)
$25,626 $46,465 $57,379 $92,627 
__________
(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 and six months ended June 30, 2022, the amount includes $3.9 million of realized and unrealized gains related to the fair value of interest rate swaps and $0.2 million of severance expenses. For the six months ended June 30, 2022, the amount includes $11.0 million of realized and unrealized gains related to the fair value of interest rate swaps and $2.4 million of severance expenses. For the three months ended June 30, 2021, the amount includes $19.3 million incremental loss contingency related to the Blacktail Release and a $12.2 million loss related to the change in the fair value of the ECP Warrants. For the six months ended June 30, 2021, the amount includes a $19.3 million incremental loss contingency related to the Blacktail Release and a $13.6 million loss related to the change in the fair value of the ECP Warrants.
(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.
12


SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES
UNAUDITED RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES
Six Months Ended June 30,
20222021
(In thousands)
Reconciliation of net cash provided by operating activities to adjusted
    EBITDA and distributable cash flow:
Net cash provided by operating activities$60,159 $86,217 
Add:
Interest expense, excluding amortization of debt issuance costs44,609 26,008 
Income tax expense (benefit) 375 (262)
Changes in operating assets and liabilities962 (6,434)
Proportional adjusted EBITDA for equity method investees (1)
21,858 13,713 
Adjustments related to capital reimbursement activity (2)
(3,306)(3,470)
Other, net (3)
3,482 20,436 
Less:
Distributions from equity method investees20,451 13,116 
Noncash lease expense468 519 
Adjusted EBITDA$107,220 $122,573 
Less:
Cash interest paid42,039 27,869 
Cash paid for taxes149 15 
Senior notes interest adjustment (4)
2,810 — 
Maintenance capital expenditures4,843 2,062 
Cash flow available for distributions (5)
$57,379 $92,627 
__________
(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 six months ended June 30, 2022, the amount includes $2.4 million of severance expenses. For the six months ended June 30, 2021, the amount includes a $19.3 million incremental loss contingency related to the Blacktail Release.
(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.


Contact: 832-413-4770, ir@summitmidstream.com
SOURCE: Summit Midstream Partners, LP
13