Summit Midstream Corporation Reports Third Quarter 2024 Financial and Operating Results
Highlights
- Third quarter 2024 net loss of
$197.5 million , including$142.6 million non-cash income tax expense to primarily establish SMC's deferred tax liability associated with theC-Corp conversion - Generated adjusted EBITDA of
$45.2 million , representing approximately 9% quarter-over-quarter growth1, cash flow available for distributions ("Distributable Cash Flow" or "DCF") of$22.1 million and free cash flow ("FCF") of$9.9 million - Expect to generate approximately
$45 million to$50 million of adjusted EBITDA in the fourth quarter 2024 - Connected 38 wells during the third quarter and maintained an active customer base with six active drilling rigs and more than 100 drilled but uncompleted wells ("DUCs") behind our systems
- Closed the C-Corp conversion and a series of re-financing transactions, further simplifying our corporate structure, extending debt maturities and lowering our cost of capital
- Announced the transformative acquisition of Tall Oak Midstream III in the Arkoma Basin and filed the definitive proxy with the special meeting of stockholders expected to occur on
November 29, 2024
|
1 |
Normalized for |
Management Commentary
From an operational perspective, we connected 38 wells to the system, have six rigs currently operating behind our footprint and made final investment decision on a
Additionally, as a brief update to our recently announced Tall Oak acquisition, we continue to expect to close the transaction during the fourth quarter of 2024. Since announcement, the Tall Oak management team executed a new contract for approximately 20 MMcf/d of existing in-basin production that is expected to begin deliveries to Tall Oak in the second half of 2025 and continue to see the active rig drilling wells that are expected to come online as soon as the end of this year. We filed the definitive proxy on
Third Quarter 2024 Business Highlights
SMC's average daily natural gas throughput for its wholly owned operated systems decreased 6.8% to 667 MMcf/d, and liquids volumes decreased 6.7% to 70 Mbbl/d, relative to the second quarter of 2024. Double E Pipeline gross volumes transported increased from 549 MMcf/d to 661 MMcf/d, a 20.4% increase quarter-over-quarter and generated
Natural gas price-driven segments :
- Natural gas price-driven segments had combined quarterly segment adjusted EBITDA of
$20.1 million , representing a 1.1% increase relative to the second quarter and combined capital expenditures of$1.7 million in the third quarter of 2024. - Piceance segment adjusted EBITDA totaled
$12.8 million , consistent from the second quarter of 2024. Volume throughput decreased 1.7% from the second quarter primarily due to natural production declines and no new wells connected to the system during the quarter. - Barnett segment adjusted EBITDA totaled
$7.3 million , an increase of$1.9 million relative to the second quarter of 2024, primarily due to a 26.2% increase in volumes from a customer continuing to increase flow of curtailed volumes and 9 new wells connected to the system from our anchor customer during the quarter. We estimate there is still approximately 20 MMcf/d of shut-in production behind the system. There is currently one rig running and 14 DUCs behind the system.
Oil price-driven segments :
- Oil price-driven segments generated
$33.3 million of combined segment adjusted EBITDA, representing a 9.1% increase relative to the second quarter, and had combined capital expenditures of$8.7 million . - Permian segment adjusted EBITDA totaled
$8.5 million , an increase of$0.8 million from the second quarter of 2024, primarily due to 20% increase in volumes shipped on the Double E Pipeline leading to an increase in proportionate adjusted EBITDA from ourDouble E joint venture. - Rockies segment adjusted EBITDA totaled
$24.9 million , an increase of 8.7% relative to the second quarter of 2024, primarily due to increased product margin in theDJ Basin , partially offset by a 6.7% decrease in liquids volume throughput. Operational downtime continued to impact volume throughput in theDJ Basin , however, repairs were completed during the quarter, and all systems have now returned to normal operational capacity. There were 29 new wells connected during the quarter, all in theDJ Basin . There are currently five rigs running and approximately 90 DUCs behind the systems.
The following table presents average daily throughput by reportable segment for the periods indicated:
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
Average daily throughput (MMcf/d): |
|
|
|
|
|
|
|
|
Northeast (1) |
— |
|
752 |
|
269 |
|
658 |
|
Rockies |
128 |
|
117 |
|
127 |
|
108 |
|
Piceance |
284 |
|
313 |
|
295 |
|
299 |
|
Barnett |
255 |
|
170 |
|
212 |
|
184 |
|
Aggregate average daily throughput |
667 |
|
1,352 |
|
903 |
|
1,249 |
|
|
|
|
|
|
|
|
|
|
Average daily throughput (Mbbl/d): |
|
|
|
|
|
|
|
|
Rockies |
70 |
|
85 |
|
73 |
|
76 |
|
Aggregate average daily throughput |
70 |
|
85 |
|
73 |
|
76 |
|
|
|
|
|
|
|
|
|
|
Ohio Gathering average daily throughput |
— |
|
870 |
|
283 |
|
763 |
|
|
|
|
|
|
|
|
|
|
|
661 |
|
327 |
|
559 |
|
278 |
_________
|
(1) |
Exclusive of Ohio Gathering 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 |
The following table presents adjusted EBITDA by reportable segment for the periods indicated:
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
(In thousands) |
|
(In thousands) |
||||
|
Reportable segment adjusted EBITDA (1) : |
|
|
|
|
|
|
|
|
Northeast (2) |
$ — |
|
$ 27,751 |
|
$ 30,634 |
|
$ 65,806 |
|
Rockies |
24,850 |
|
24,998 |
|
70,582 |
|
64,986 |
|
Permian (3) |
8,472 |
|
5,840 |
|
23,434 |
|
16,283 |
|
Piceance |
12,831 |
|
15,292 |
|
40,912 |
|
43,640 |
|
Barnett |
7,278 |
|
6,084 |
|
17,798 |
|
20,380 |
|
Total |
$ 53,431 |
|
$ 79,965 |
|
$ 183,360 |
|
$ 211,095 |
|
Less: Corporate and Other (4) |
8,193 |
|
7,175 |
|
24,915 |
|
19,267 |
|
Adjusted EBITDA (5) |
$ 45,238 |
|
$ 72,790 |
|
$ 158,445 |
|
$ 191,828 |
__________
|
(1) |
Segment adjusted EBITDA is a non-GAAP financial measure. We define segment adjusted EBITDA as total revenues less total costs and expenses, plus (i) other income (excluding interest income), (ii) our proportional adjusted EBITDA for equity method investees, (iii) depreciation and amortization, (iv) adjustments related to minimum volume commitments ("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. Summit records financial results of its investment in Ohio Gathering on a one-month lag and is based on the financial information available to us during the reporting period. With the divestiture of Ohio Gathering in |
|
(3) |
Includes our proportional share of adjusted EBITDA for |
|
(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 transaction costs. |
|
(5) |
Adjusted EBITDA is a non-GAAP financial measure. |
Capital Expenditures
Capital expenditures totaled
|
|
Nine Months Ended |
||
|
|
2024 |
|
2023 |
|
|
(In thousands) |
||
|
Cash paid for capital expenditures (1) : |
|
|
|
|
Northeast |
$ 2,980 |
|
$ 2,502 |
|
Rockies |
29,211 |
|
40,089 |
|
Piceance |
2,278 |
|
3,910 |
|
Barnett |
686 |
|
109 |
|
Total reportable segment capital expenditures |
$ 35,155 |
|
$ 46,610 |
|
Corporate and Other |
2,706 |
|
3,253 |
|
Total cash paid for capital expenditures |
$ 37,861 |
|
$ 49,863 |
__________
|
(1) |
Excludes cash paid for capital expenditures by Ohio Gathering and |
Capital & Liquidity
As of
As of
MVC Shortfall Payments
SMC billed its customers
|
|
Three Months Ended |
||||||
|
|
MVC Billings |
|
Gathering |
|
Adjustments |
|
Net impact to |
|
|
(In thousands) |
||||||
|
Net change in deferred revenue related to MVC shortfall payments: |
|
|
|
|
|
|
|
|
|
$ — |
|
$ — |
|
$ — |
|
$ — |
|
Total net change |
$ — |
|
$ — |
|
$ — |
|
$ — |
|
|
|
|
|
|
|
|
|
|
MVC shortfall payment adjustments: |
|
|
|
|
|
|
|
|
Rockies |
$ 426 |
|
$ 426 |
|
$ — |
|
$ 426 |
|
Piceance |
4,998 |
|
4,998 |
|
— |
|
$ 4,998 |
|
Northeast |
— |
|
— |
|
— |
|
— |
|
Barnett |
40 |
|
40 |
|
— |
|
40 |
|
Total MVC shortfall payment adjustments |
$ 5,464 |
|
$ 5,464 |
|
$ — |
|
$ 5,464 |
|
|
|
|
|
|
|
|
|
|
Total (1) |
$ 5,464 |
|
$ 5,464 |
|
$ — |
|
$ 5,464 |
|
|
Nine Months Ended |
||||||
|
|
MVC Billings |
|
Gathering |
|
Adjustments |
|
Net impact to |
|
|
(In thousands) |
||||||
|
Net change in deferred revenue related to MVC shortfall payments: |
|
|
|
|
|
|
|
|
|
$ — |
|
$ — |
|
$ — |
|
$ — |
|
Total net change |
$ — |
|
$ — |
|
$ — |
|
$ — |
|
|
|
|
|
|
|
|
|
|
MVC shortfall payment adjustments: |
|
|
|
|
|
|
|
|
Rockies |
$ 1,627 |
|
$ 1,627 |
|
$ (529) |
|
$ 1,098 |
|
Piceance |
14,721 |
|
14,721 |
|
— |
|
14,721 |
|
Northeast |
2,288 |
|
2,288 |
|
— |
|
2,288 |
|
Barnett |
40 |
|
40 |
|
— |
|
40 |
|
Total MVC shortfall payment adjustments |
$ 18,676 |
|
$ 18,676 |
|
$ (529) |
|
$ 18,147 |
|
|
|
|
|
|
|
|
|
|
Total (1) |
$ 18,676 |
|
$ 18,676 |
|
$ (529) |
|
$ 18,147 |
__________
|
(1) |
Exclusive of Ohio Gathering and |
Quarterly Dividend
The board of directors of
Third Quarter 2024 Earnings Call Information
SMC will host a conference call at
Upcoming Investor Conferences
Members of SMC's senior management team will attend the 2024
Use of Non-GAAP Financial Measures
We report financial results in accordance with
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 dividends 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 shareholders less growth capital expenditures, less investments in equity method investees, less dividends to common and preferred shareholders. 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
SMC is a value-driven corporation 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
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 SMC or its 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 SMC's actual results in future periods to differ materially from anticipated or projected results. An extensive list of specific material risks and uncertainties affecting SMC is contained in SMC's Registration Statement on Form S-4 (Registration No. 333-279903), as declared effective on
Important Additional Information Will Be Filed With the
In connection with the proposed Transaction, the Company has filed a proxy statement with the
Participants in the Solicitation
The Company and its directors, executive officers and other members of management and employees may, under the rules of the
|
SUMMIT MIDSTREAM CORPORATION AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
|||
|
|
|||
|
|
|
|
|
|
|
(In thousands) |
||
|
ASSETS |
|
|
|
|
Cash and cash equivalents |
$ 17,842 |
|
$ 14,044 |
|
Restricted cash |
126,524 |
|
2,601 |
|
Accounts receivable |
60,567 |
|
76,275 |
|
Other current assets |
9,080 |
|
5,502 |
|
Total current assets |
214,013 |
|
98,422 |
|
Property, plant and equipment, net |
1,350,758 |
|
1,698,585 |
|
Intangible assets, net |
140,009 |
|
175,592 |
|
Investment in equity method investees |
269,939 |
|
486,434 |
|
Other noncurrent assets |
24,447 |
|
35,165 |
|
TOTAL ASSETS |
$ 1,999,166 |
|
$ 2,494,198 |
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
Trade accounts payable |
$ 12,932 |
|
$ 22,714 |
|
Accrued expenses |
29,645 |
|
32,377 |
|
Deferred revenue |
9,470 |
|
10,196 |
|
Ad valorem taxes payable |
7,229 |
|
8,543 |
|
Accrued compensation and employee benefits |
7,173 |
|
6,815 |
|
Accrued interest |
14,603 |
|
19,298 |
|
Accrued environmental remediation |
1,409 |
|
1,483 |
|
Accrued settlement payable |
6,715 |
|
6,667 |
|
Current portion of long-term debt |
130,512 |
|
15,524 |
|
Other current liabilities |
11,278 |
|
10,395 |
|
Total current liabilities |
230,966 |
|
134,012 |
|
Deferred tax liabilities |
115,552 |
|
1,425 |
|
Long-term debt, net |
826,453 |
|
1,455,166 |
|
Noncurrent deferred revenue |
26,176 |
|
30,085 |
|
Noncurrent accrued environmental remediation |
989 |
|
1,454 |
|
Other noncurrent liabilities |
16,136 |
|
28,841 |
|
TOTAL LIABILITIES |
1,216,272 |
|
1,650,983 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
Mezzanine Equity |
|
|
|
|
Subsidiary Series A Preferred Units |
131,410 |
|
124,652 |
|
Equity |
|
|
|
|
Series A Preferred Units |
— |
|
96,893 |
|
Common limited partner capital |
— |
|
621,670 |
|
Series A Preferred Shares |
106,819 |
|
— |
|
Common stock, |
106 |
|
— |
|
Additional paid-in capital |
702,357 |
|
— |
|
Accumulated deficit |
(157,798) |
|
— |
|
Total Equity |
651,484 |
|
718,563 |
|
TOTAL LIABILITIES AND EQUITY |
$ 1,999,166 |
|
$ 2,494,198 |
|
SUMMIT MIDSTREAM CORPORATION AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||
|
|
|||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
(In thousands, except per unit amounts) |
||||||
|
Revenues: |
|
|
|
|
|
|
|
|
Gathering services and related fees |
$ 44,013 |
|
$ 66,035 |
|
$ 151,211 |
|
$ 180,492 |
|
Natural gas, NGLs and condensate sales |
48,243 |
|
45,120 |
|
145,294 |
|
130,365 |
|
Other revenues |
10,159 |
|
10,038 |
|
26,096 |
|
20,728 |
|
Total revenues |
102,415 |
|
121,193 |
|
322,601 |
|
331,585 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
Cost of natural gas and NGLs |
28,246 |
|
27,110 |
|
88,047 |
|
77,967 |
|
Operation and maintenance |
24,473 |
|
26,161 |
|
72,925 |
|
75,291 |
|
General and administrative |
12,419 |
|
11,098 |
|
41,368 |
|
31,897 |
|
Depreciation and amortization |
23,540 |
|
30,778 |
|
75,324 |
|
90,734 |
|
Transaction costs |
2,094 |
|
144 |
|
13,156 |
|
926 |
|
Acquisition integration costs |
— |
|
171 |
|
40 |
|
2,396 |
|
(Gain) loss on asset sales, net |
(6) |
|
(40) |
|
1 |
|
(183) |
|
Long-lived asset impairments |
— |
|
— |
|
67,936 |
|
455 |
|
Total costs and expenses |
90,766 |
|
95,422 |
|
358,797 |
|
279,483 |
|
Other income (expense), net |
666 |
|
(315) |
|
2,784 |
|
747 |
|
Gain (loss) on interest rate swaps |
(2,574) |
|
2,856 |
|
936 |
|
4,851 |
|
Gain (loss) on sale of business |
(1,672) |
|
(9) |
|
82,338 |
|
(45) |
|
Gain on sale of equity method investment |
— |
|
— |
|
126,261 |
|
— |
|
Interest expense |
(25,712) |
|
(34,568) |
|
(95,015) |
|
(103,966) |
|
Loss on early extinguishment of debt |
(42,235) |
|
— |
|
(47,199) |
|
— |
|
Equity method investees income |
4,910 |
|
10,211 |
|
19,828 |
|
22,302 |
|
Income (loss) before income taxes |
(54,968) |
|
3,946 |
|
53,737 |
|
(24,009) |
|
Income tax benefit (expense) |
(142,573) |
|
(72) |
|
(142,129) |
|
180 |
|
Net income (loss) |
$ (197,541) |
|
$ 3,874 |
|
$ (88,392) |
|
$ (23,829) |
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share: |
|
|
|
|
|
|
|
|
Common stock – basic |
$ (19.25) |
|
$ (0.27) |
|
$ (10.39) |
|
$ (3.99) |
|
Common stock – diluted |
$ (19.25) |
|
$ (0.27) |
|
$ (10.39) |
|
$ (3.99) |
|
|
|
|
|
|
|
|
|
|
Weighted-average number of shares outstanding: |
|
|
|
|
|
|
|
|
Common stock – basic |
10,649 |
|
10,376 |
|
10,583 |
|
10,320 |
|
Common stock – diluted |
10,649 |
|
10,376 |
|
10,583 |
|
10,320 |
__________
|
SUMMIT MIDSTREAM CORPORATION AND SUBSIDIARIES UNAUDITED OTHER FINANCIAL AND OPERATING DATA |
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|
|||||||
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|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
(In thousands) |
||||||
|
Other financial data: |
|
|
|
|
|
|
|
|
Net income (loss) |
$ (197,541) |
|
$ 3,874 |
|
$ (88,392) |
|
$ (23,829) |
|
Net cash provided by (used in) operating activities |
9,151 |
|
59,119 |
|
40,124 |
|
110,759 |
|
Capital expenditures |
10,941 |
|
17,685 |
|
37,861 |
|
49,863 |
|
Contributions to equity method investees |
989 |
|
— |
|
1,431 |
|
3,500 |
|
Adjusted EBITDA |
45,238 |
|
72,790 |
|
158,445 |
|
191,828 |
|
Cash flow available for distributions (1) |
22,091 |
|
38,478 |
|
66,509 |
|
87,786 |
|
Free Cash Flow |
9,663 |
|
21,922 |
|
29,751 |
|
38,606 |
|
Dividends (2) |
n/a |
|
n/a |
|
n/a |
|
n/a |
|
|
|
|
|
|
|
|
|
|
Operating data: |
|
|
|
|
|
|
|
|
Aggregate average daily throughput – natural gas (MMcf/d) |
667 |
|
1,352 |
|
903 |
|
1,249 |
|
Aggregate average daily throughput – liquids (Mbbl/d) |
70 |
|
85 |
|
73 |
|
76 |
|
|
|
|
|
|
|
|
|
|
Ohio Gathering average daily throughput (MMcf/d) (3) |
— |
|
870 |
|
283 |
|
763 |
|
|
661 |
|
327 |
|
559 |
|
278 |
__________
|
(1) |
Cash flow available for distributions is also referred to as Distributable Cash Flow, or DCF. |
|
(2) |
Represents dividends declared and ultimately paid or expected to be paid to preferred and common shareholders in respect of a given period. On |
|
(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 |
|
SUMMIT MIDSTREAM CORPORATION AND SUBSIDIARIES UNAUDITED RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES |
|||||||
|
|
|||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
(In thousands) |
||||||
|
Reconciliations of net income to adjusted EBITDA and Distributable Cash Flow: |
|
|
|
|
|
|
|
|
Net income (loss) |
$ (197,541) |
|
$ 3,874 |
|
$ (88,392) |
|
$ (23,829) |
|
Add: |
|
|
|
|
|
|
|
|
Interest expense |
25,712 |
|
34,568 |
|
95,015 |
|
103,966 |
|
Income tax expense (benefit) |
142,573 |
|
72 |
|
142,129 |
|
(180) |
|
Depreciation and amortization (1) |
23,774 |
|
31,013 |
|
76,028 |
|
91,438 |
|
Proportional adjusted EBITDA for equity method |
7,585 |
|
16,917 |
|
35,102 |
|
42,655 |
|
Adjustments related to capital reimbursement activity |
(2,283) |
|
(3,111) |
|
(7,934) |
|
(6,778) |
|
Unit-based and noncash compensation |
1,840 |
|
1,396 |
|
6,698 |
|
5,158 |
|
Loss on early extinguishment of debt |
42,235 |
|
— |
|
47,199 |
|
— |
|
(Gain) loss on asset sales, net |
(6) |
|
(40) |
|
1 |
|
(183) |
|
Long-lived asset impairment |
— |
|
— |
|
67,936 |
|
455 |
|
(Gain) loss on interest rate swaps |
2,574 |
|
(2,856) |
|
(936) |
|
(4,851) |
|
(Gain) loss on sale of business |
1,672 |
|
9 |
|
(82,338) |
|
45 |
|
Gain on sale of equity method investment |
— |
|
— |
|
(126,261) |
|
— |
|
Other, net (4) |
2,013 |
|
1,159 |
|
14,026 |
|
6,234 |
|
Less: |
|
|
|
|
|
|
|
|
Income from equity method investees |
4,910 |
|
10,211 |
|
19,828 |
|
22,302 |
|
Adjusted EBITDA |
$ 45,238 |
|
$ 72,790 |
|
$ 158,445 |
|
$ 191,828 |
|
Less: |
|
|
|
|
|
|
|
|
Cash interest paid |
23,601 |
|
10,162 |
|
89,408 |
|
72,749 |
|
Cash paid for taxes |
7 |
|
— |
|
22 |
|
15 |
|
Senior notes interest adjustment (5) |
(1,779) |
|
21,392 |
|
(4,913) |
|
22,210 |
|
Maintenance capital expenditures |
1,318 |
|
2,758 |
|
7,419 |
|
9,068 |
|
Cash flow available for distributions (6) |
$ 22,091 |
|
$ 38,478 |
|
$ 66,509 |
|
$ 87,786 |
|
Less: |
|
|
|
|
|
|
|
|
Growth capital expenditures |
9,810 |
|
14,927 |
|
30,442 |
|
40,795 |
|
Investment in equity method investee |
989 |
|
— |
|
1,431 |
|
3,500 |
|
Distributions on Subsidiary Series A Preferred Units |
1,629 |
|
1,629 |
|
4,885 |
|
4,885 |
|
Free Cash Flow |
$ 9,663 |
|
$ 21,922 |
|
$ 29,751 |
|
$ 38,606 |
__________
|
(1) |
Includes the amortization expense associated with our favorable gas gathering contracts as reported in other revenues. |
|
|
|
|
(2) |
Reflects our proportionate share of |
|
|
|
|
(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. |
|
|
|
|
(4) |
Represents items of income or loss that we characterize as unrepresentative of our ongoing operations. For the nine months ended |
|
|
|
|
(5) |
Senior notes interest adjustment represents the net of interest expense accrued and paid during the period. Interest on the 2025 Notes was paid in cash semi-annually in arrears on |
|
|
|
|
(6) |
Represents cash flow available for distribution to preferred and common shareholders. Common dividends cannot be paid unless all accrued preferred dividends are paid. Cash flow available for distributions is also referred to as Distributable Cash Flow, or DCF. |
|
SUMMIT MIDSTREAM CORPORATION AND SUBSIDIARIES UNAUDITED RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES |
|||
|
|
|||
|
|
Nine Months Ended
|
||
|
|
2024 |
|
2023 |
|
|
(In thousands) |
||
|
Reconciliation of net cash provided by operating activities to adjusted EBITDA and distributable cash flow: |
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
$ 40,124 |
|
$ 110,759 |
|
Add: |
|
|
|
|
Interest expense, excluding amortization of debt issuance costs |
84,689 |
|
94,473 |
|
Income tax benefit, excluding federal income taxes |
(140) |
|
(180) |
|
Changes in operating assets and liabilities |
30,119 |
|
(6,685) |
|
Proportional adjusted EBITDA for equity method investees (1) |
35,102 |
|
42,655 |
|
Adjustments related to capital reimbursement activity (2) |
(7,934) |
|
(6,778) |
|
Realized gain on swaps |
(3,974) |
|
(3,777) |
|
Other, net (3) |
13,992 |
|
5,897 |
|
Less: |
|
|
|
|
Distributions from equity method investees |
31,241 |
|
40,732 |
|
Noncash lease expense |
2,292 |
|
3,804 |
|
Adjusted EBITDA |
$ 158,445 |
|
$ 191,828 |
|
Less: |
|
|
|
|
Cash interest paid |
89,408 |
|
72,749 |
|
Cash paid for taxes |
22 |
|
15 |
|
Senior notes interest adjustment (4) |
(4,913) |
|
22,210 |
|
Maintenance capital expenditures |
7,419 |
|
9,068 |
|
Cash flow available for distributions (5) |
$ 66,509 |
|
$ 87,786 |
|
Less: |
|
|
|
|
Growth capital expenditures |
30,442 |
|
40,795 |
|
Investment in equity method investee |
1,431 |
|
3,500 |
|
Distributions on Subsidiary Series A Preferred Units |
4,885 |
|
4,885 |
|
Free Cash Flow |
$ 29,751 |
|
$ 38,606 |
___
|
(1) |
Reflects our proportionate share of |
|
|
|
|
(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. |
|
|
|
|
(3) |
Represents items of income or loss that we characterize as unrepresentative of our ongoing operations. For the nine months ended |
|
|
|
|
(4) |
Senior notes interest adjustment represents the net of interest expense accrued and paid during the period. Interest on the 2025 Notes was paid in cash semi-annually in arrears on |
|
|
|
|
(5) |
Represents cash flow available for distribution to preferred and common shareholders. Common dividends cannot be paid unless all accrued preferred dividends are paid. Cash flow available for distributions is also referred to as Distributable Cash Flow, or DCF. |
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