Summit Midstream Partners, LP Reports Fourth Quarter 2020 Financial and Operating Results and Confirms 2021 Financial Guidance
Summit Midstream Partners reported strong fourth-quarter 2020 results with a net income of $103.0 million driven by a $124.1 million gain from early debt extinguishment. Adjusted EBITDA reached $61.8 million, up slightly from the prior quarter. Operated natural gas volumes increased by 3.2% compared to Q3 2020, supported by new well connections and returning shut-in production. For 2021, SMLP expects adjusted EBITDA between $210 million and $230 million, anticipating lower activity but sufficient cash generation to reduce debt by $130 million to $150 million.
- Net income of $103.0 million for Q4 2020.
- Adjusted EBITDA of $61.8 million, $2 million above Q3 2020.
- 3.2% increase in operated natural gas volumes compared to Q3 2020.
- Successful liability management reduced over $625 million in recourse fixed capital obligations.
- Expected debt reduction of $130 million to $150 million in 2021.
- Expected well connections in 2021 (45 to 75) significantly lower than in 2020 (104) and 2019 (262).
- Anticipated MVC shortfall payment step-downs of approximately $10 million in 2021.
- 2021 projected EBITDA guidance (210 to 230 million) indicates a decrease from previous year.
HOUSTON, March 4, 2021 /PRNewswire/ -- Summit Midstream Partners, LP (NYSE: SMLP) ("Summit", "SMLP" or the "Partnership") announced today its financial and operating results for the three months ended December 31, 2020, including net income of
Fourth quarter 2020 operated natural gas volume throughput averaged 1,436 million cubic feet per day ("MMcf/d") and liquids volume throughput averaged 71 thousand barrels per day ("Mbbl/d"). Operated natural gas volumes increased by
Heath Deneke, President, Chief Executive Officer and Chairman, commented, "Summit's fourth quarter financial results were in line with expectations, and adjusted EBITDA was
"We executed a number of liability management transactions in the fourth quarter, including the repurchase of
"We continue to make great progress on the Double E project, having received all necessary approvals to proceed with construction, and securing bank financing commitments. Now that we have received the Notice to Proceed from the FERC, we have initiated construction activities and we expect to bring the project online during the fourth quarter of 2021. We continue to expect that Double E will be completed at or below the current
"In 2020, we successfully executed a robust set of liability management transactions that strengthened the balance sheet and created financial flexibility to offset the potential for a prolonged challenging macro environment, while generating long term value for our unitholders. We expect that 2021 will be a trough year for Summit, as many of our customers have significantly reduced drilling and completion activities behind our systems, particularly during the first half of the year. As a result, we expect approximately 45 to 75 new well connections in 2021, which is materially less than the 104 and 262 wells connected in 2020 and 2019, respectively. We also anticipate MVC shortfall payment step-downs of approximately
"Although we are expecting softened customer activity in 2021, we expect to generate sufficient cash, after interest expense and capital expenditures, to reduce outstanding indebtedness by approximately
2021 Financial Guidance
SMLP is reiterating its financial guidance for full year 2021 that was released on February 16, 2021, and included the following guidance ranges:
- 2021 adjusted EBITDA of
$210 million to$230 million - Total capital expenditures of
$20 million to$35 million , including approximately$10 million of maintenance capital expenditures, but excluding SMLP's estimated$150 million of capital investment in Double E which is expected to be financed with new non-recourse credit facilities at Summit Permian Transmission, LLC, an indirect, unrestricted subsidiary - Expect to generate sufficient cash in 2021, after interest expense and capital expenditures, to reduce outstanding indebtedness by approximately
$130 million to$150 million
The Partnership believes these guidance ranges reflect a conservative, yet appropriate level of risking to the most recent drill schedules and volume forecasts provided by customers. These projections are subject to risks and uncertainties described in the "Forward-Looking Statements" section at the end of this press release.
Please refer to SMLP's press release issued on February 16, 2021, for additional details regarding Summit's full year 2021 financial guidance.
Fourth Quarter 2020 Business Highlights
In the fourth quarter of 2020, SMLP's average daily natural gas throughput for its operated systems increased
Core Focus Areas:
- Core Focus Areas generated combined quarterly segment adjusted EBITDA of
$33.2 million and had combined capital expenditures of$7.0 million in the fourth quarter of 2020. - Utica Shale segment adjusted EBITDA totaled
$8.7 million , a$1.3 million increase from the third quarter of 2020, which was driven by a25.9% increase in volume throughput. Volume throughput growth was primarily due to seven new wells that were turned in line in September and continue to outperform expectations, together with a customer returning 22 MMcf/d of previously shut-in production. There were no wells connected in the segment during the quarter; however, a new four-well pad site, which is subject to our previously announced gathering agreement to incentivize accelerated upstream activity, was connected to the SMU system in the fourth quarter and these new wells are expected to be turned in line during the first quarter of 2021. There were 10 DUCs in the Utica Shale segment at year-end 2020. - Ohio Gathering segment adjusted EBITDA totaled
$8.5 million , a18.9% increase from the third quarter of 2020. Higher segment adjusted EBITDA was driven by a21.3% increase in volume throughput, largely due to return of all temporarily curtailed production and volumes from 10 new wells that were connected late in the third quarter. As of the end of the fourth quarter, there were seven DUCs in the Ohio Gathering segment, all of which are expected to be turned in line in 2021, based on current customer development plans. - Williston Basin segment adjusted EBITDA totaled
$11.4 million in the fourth quarter of 2020, a2.4% decrease from the third quarter of 2020, primarily due to a change in customer volume mix and impacts to margins from recent contract amendments. Liquids volume throughput increased by2.9% from the third quarter, to 71 Mbbl/d, primarily due to eight new wells that were turned in line in October and November, partially offset by natural production declines. There are 8 DUCs in inventory behind our Williston Basin systems, which we expect to be turned in line in 2021. - DJ Basin segment adjusted EBITDA totaled
$4.4 million in the fourth quarter of 2020, a7.0% decrease from the third quarter of 2020, due to a7.4% quarter-over-quarter decrease in volume throughput to 25 MMcf/d. The volume throughput decrease was primarily driven by natural production declines and offset partially by volumes from 2 new pads that were connected during the quarter. As of December 31, 2020, our customers had approximately 20 DUCs on our DJ Basin system; however, we do not expect them to be turned-in-line in the near-term. - Permian Basin segment adjusted EBITDA totaled
$0.1 million in the fourth quarter of 2020, a decrease of approximately$0.8 million relative to the prior quarter, primarily due to decreased margins on natural gas and NGL sales, a true-up payment due to our customers related to gas purchases, and increased expenses during the fourth quarter. The2.9% decrease in volume throughput was largely attributable to natural production declines and partially offset by volumes associated with a contract that was extended in May of 2020. Our customers have two DUCs in inventory behind the Permian Basin system that we expect to be turned-in-line during the first quarter of 2021.
Legacy Areas:
- Legacy Areas generated
$35.4 million of combined segment adjusted EBITDA in the fourth quarter of 2020 and had combined capital expenditures of$0.9 million . - Piceance Basin segment adjusted EBITDA of
$22.0 million increased by$0.5 million from the third quarter of 2020, primarily due to lower spend on operations and maintenance activities. Lower volume throughput of 14 MMcf/d, or3.9% , compared to the third quarter of 2020, was primarily a result of natural production declines. - Barnett Shale segment adjusted EBITDA increased by
5.7% from the third quarter of 2020, to$7.6 million , primarily due to customer margin mix and impacts from recent contract amendments that reduced net expenses. Throughput volumes decreased by1.9% primarily due natural production declines and were partially offset by increased volumes from workovers and recompletions of existing wells. Our customers have 7 new wells that are being drilled behind our system and 1 DUC in inventory. - Marcellus Shale segment adjusted EBITDA decreased to
$5.8 million for the fourth quarter of 2020, a3.9% quarterly decrease relative to the third quarter of 2020, driven primarily by a6.6% decrease in volume throughput to 370 MMcf/d as a result of natural production declines. Our anchor customer had nine DUCs in inventory behind our Marcellus Shale infrastructure at the end of the fourth quarter, which we expect to all be turned-in-line in the first half of 2021.
The following table presents average daily throughput by reportable segment for the periods indicated:
Three months ended December 31, | Year ended December 31, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Average daily throughput (MMcf/d): | ||||||||||||||||
Utica Shale | 443 | 273 | 358 | 273 | ||||||||||||
Williston Basin (1) | 14 | 12 | 14 | 12 | ||||||||||||
DJ Basin | 25 | 27 | 26 | 27 | ||||||||||||
Permian Basin | 33 | 19 | 33 | 19 | ||||||||||||
Piceance Basin (2) | 347 | 452 | 364 | 452 | ||||||||||||
Barnett Shale | 204 | 251 | 212 | 251 | ||||||||||||
Marcellus Shale | 370 | 363 | 368 | 363 | ||||||||||||
Aggregate average daily throughput | 1,436 | 1,397 | 1,375 | 1,397 | ||||||||||||
Average daily throughput (Mbbl/d): | ||||||||||||||||
Williston Basin | 71 | 105 | 79 | 105 | ||||||||||||
Aggregate average daily throughput | 71 | 105 | 79 | 105 | ||||||||||||
Ohio Gathering average daily throughput (MMcf/d) (3) | 621 | 732 | 571 | 732 |
__________ |
(1) The Williston Basin segment includes the Tioga Midstream system, which was sold in March 2019. |
(2) The Piceance Basin segment includes the RRG West system, which was sold in December 2019. |
(3) Gross basis, represents |
The following table presents adjusted EBITDA by reportable segment for the periods indicated:
Three months ended December 31, | Year ended December 31, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(In thousands) | ||||||||||||||||
Reportable segment adjusted EBITDA (1): | ||||||||||||||||
Utica Shale | $ | 8,709 | $ | 8,595 | $ | 32,783 | $ | 29,292 | ||||||||
Ohio Gathering (2) | 8,474 | 9,542 | 31,056 | 39,126 | ||||||||||||
Williston Basin (3) | 11,428 | 20,213 | 52,060 | 69,437 | ||||||||||||
DJ Basin | 4,433 | 6,625 | 19,449 | 18,668 | ||||||||||||
Permian Basin | 124 | 117 | 4,426 | (879) | ||||||||||||
Piceance Basin (4) | 22,026 | 24,138 | 88,820 | 98,765 | ||||||||||||
Barnett Shale | 7,617 | 9,560 | 32,093 | 43,043 | ||||||||||||
Marcellus Shale | 5,786 | 5,316 | 22,015 | 20,051 | ||||||||||||
Total | $ | 68,597 | $ | 84,106 | $ | 282,702 | $ | 317,503 | ||||||||
Less: Corporate and Other (5) | 6,806 | 7,122 | 30,587 | 34,151 | ||||||||||||
Adjusted EBITDA | $ | 61,791 | $ | 76,984 | $ | 252,115 | $ | 283,352 |
__________ | |
(1) | We define segment adjusted EBITDA as total revenues less total costs and expenses, plus (i) other income excluding interest income, (ii) our proportional adjusted EBITDA for equity method investees, (iii) depreciation and amortization, (iv) adjustments related to MVC shortfall payments, (v) adjustments related to capital reimbursement activity, (vi) unit-based and noncash compensation, (vii) impairments and (viii) other noncash expenses or losses, less other noncash income or gains. |
(2) | Represents our proportional share of adjusted EBITDA for Ohio Gathering, subject to a one-month lag. We define proportional adjusted EBITDA for our equity method investees as the product of (i) total revenues less total expenses, excluding impairments and other noncash income or expense items and (ii) amortization for deferred contract costs; multiplied by our ownership interest in Ohio Gathering during the respective period. |
(3) | The Williston Basin segment includes the Tioga Midstream system, which was sold in March 2019. |
(4) | The Piceance Basin segment includes the RRG West system, which was sold in December 2019. |
(5) | Corporate and Other represents those results that are not specifically attributable to a reportable segment (such as Double E) or that have not been allocated to our reportable segments, including certain general and administrative expense items and natural gas and crude oil marketing services. |
Capital Expenditures
Capital expenditures totaled
Year ended December 31, | ||||||||
2020 | 2019 | |||||||
(In thousands) | ||||||||
Cash paid for capital expenditures (1): | ||||||||
Utica Shale | $ | 6,957 | $ | 3,902 | ||||
Williston Basin | 8,767 | 30,861 | ||||||
DJ Basin | 12,829 | 80,487 | ||||||
Permian Basin | 7,014 | 44,955 | ||||||
Piceance Basin | 1,370 | 1,946 | ||||||
Barnett Shale (2) | 1,878 | 184 | ||||||
Marcellus Shale | 700 | 693 | ||||||
Total reportable segment capital expenditures | 39,515 | 163,028 | ||||||
Corporate and Other (3) | 3,613 | 19,263 | ||||||
Total cash paid for capital expenditures | $ | 43,128 | $ | 182,291 |
__________ | |
(1) | Excludes cash paid for capital expenditures by Ohio Gathering and Double E (after June 2019) due to equity method accounting. |
(2) | For the year ended December 31, 2019, the amount includes sales tax reimbursements of |
(3) | For the year ended December 31, 2019, and through the formation date of the Double E joint venture in June 2019, reflects |
Capital & Liquidity
As of December 31, 2020, SMLP had
Based upon the terms of SMLP's revolving credit facility and total outstanding debt, net of cash, of
Fourth Quarter 2020 Loss Contingency
In accordance with certain GAAP requirements, in the fourth quarter of 2020, the Partnership recognized a
Double E Update
During the fourth quarter of 2020, SMLP made cash investments totaling
MVC Shortfall Payments
SMLP billed its customers
Three months ended December 31, 2020 | ||||||||||||||||
MVC Billings | Gathering | Adjustments | Net impact to | |||||||||||||
(In thousands) | ||||||||||||||||
Net change in deferred revenue related to MVC shortfall payments: | ||||||||||||||||
Piceance Basin | $ | 3,469 | $ | 3,469 | $ | — | $ | 3,469 | ||||||||
Total net change | $ | 3,469 | $ | 3,469 | $ | — | $ | 3,469 | ||||||||
MVC shortfall payment adjustments: | ||||||||||||||||
Williston Basin | $ | 9,144 | $ | 1,354 | $ | 1,416 | $ | 2,770 | ||||||||
Piceance Basin | 8,136 | 7,619 | (557 | ) | 7,062 | |||||||||||
Marcellus Shale | 1,569 | 1,569 | — | 1,569 | ||||||||||||
Total MVC shortfall payment adjustments | $ | 18,849 | $ | 10,542 | $ | 859 | $ | 11,401 | ||||||||
Total (1) | $ | 22,318 | $ | 14,011 | $ | 859 | $ | 14,870 |
__________ |
(1) Exclusive of Ohio Gathering due to equity method accounting. |
Year ended December 31, 2020 | ||||||||||||||||
MVC Billings | Gathering | Adjustments | Net impact to | |||||||||||||
(In thousands) | ||||||||||||||||
Net change in deferred revenue related to MVC shortfall payments: | ||||||||||||||||
Piceance Basin | $ | 14,000 | $ | 14,000 | $ | — | $ | 14,000 | ||||||||
Total net change | $ | 14,000 | $ | 14,000 | $ | — | $ | 14,000 | ||||||||
MVC shortfall payment adjustments: | ||||||||||||||||
Williston Basin | $ | 12,191 | $ | 12,191 | $ | — | $ | 12,191 | ||||||||
Piceance Basin | 29,182 | 28,560 | — | 28,560 | ||||||||||||
Marcellus Shale | 5,467 | 5,467 | — | 5,467 | ||||||||||||
Total MVC shortfall payment adjustments | $ | 46,840 | $ | 46,218 | $ | — | $ | 46,218 | ||||||||
Total (1) | $ | 60,840 | $ | 60,218 | $ | — | $ | 60,218 |
__________ |
(1) Exclusive of Ohio Gathering due to equity method accounting. |
Quarterly Distribution
The board of directors of SMLP's general partner continues to suspend cash distributions payable on its common units and on its
Fourth Quarter 2020 Earnings Call Information
SMLP will host a conference call at 10:00 a.m. Eastern on Thursday, March 4, 2021, to discuss its quarterly operating and financial results. Interested parties may participate in the call by dialing 847-585-4405 or toll-free 888-771-4371 and entering the passcode 50087230. 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, a non-GAAP financial measure. We define adjusted EBITDA as net income or loss, plus interest expense, income tax expense, depreciation and amortization, our proportional adjusted EBITDA for equity method investees, adjustments related to MVC shortfall payments, adjustments related to capital reimbursement activity, unit-based and noncash compensation, impairments, items of income or loss that we characterize as unrepresentative of our ongoing operations and other noncash expenses or losses, less interest income, income tax benefit, income (loss) from equity method investees and other noncash income or gains. Because adjusted EBITDA may be defined differently by other entities in our industry, our definition of this non-GAAP financial measure may not be comparable to similarly titled measures of other entities, thereby diminishing its utility.
Management uses adjusted EBITDA in making financial, operating and planning decisions and in evaluating our financial performance. Furthermore, management believes that adjusted EBITDA may provide external users of our financial statements, such as investors, commercial banks, research analysts and others, with additional meaningful comparisons between current results and results of prior periods as they are expected to be reflective of our core ongoing business.
Adjusted EBITDA is used as a supplemental financial measure by external users of our financial statements such as investors, commercial banks, research analysts and others.
Adjusted EBITDA is used to assess:
- the ability of our assets to generate cash sufficient to make future potential cash distributions and support our indebtedness;
- the financial performance of our assets without regard to financing methods, capital structure or historical cost basis;
- our operating performance and return on capital as compared to those of other entities in the midstream energy sector, without regard to financing or capital structure;
- the attractiveness of capital projects and acquisitions and the overall rates of return on alternative investment opportunities; and
- the financial performance of our assets without regard to (i) income or loss from equity method investees, (ii) the impact of the timing of minimum volume commitments shortfall payments under our gathering agreements or (iii) the timing of impairments or other income or expense items that we characterize as unrepresentative of our ongoing operations.
Adjusted EBITDA has limitations as an analytical tool and investors should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. For example:
- certain items excluded from adjusted EBITDA are significant components in understanding and assessing an entity's financial performance, such as an entity's cost of capital and tax structure;
- adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;
- adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; and
- although depreciation and amortization are noncash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted EBITDA does not reflect any cash requirements for such replacements.
We compensate for the limitations of adjusted EBITDA as an analytical tool by reviewing the comparable GAAP financial measures, understanding the differences between the financial measures and incorporating these data points into our decision-making process.
We do not provide the GAAP financial measures of net income or loss or net cash provided by operating activities on a forward-looking basis because we are unable to predict, without unreasonable effort, certain components thereof including, but not limited to, (i) income or loss from equity method investees and (ii) asset impairments. These items are inherently uncertain and depend on various factors, many of which are beyond our control. As such, any associated estimate and its impact on our GAAP performance and cash flow measures could vary materially based on a variety of acceptable management assumptions.
About Summit Midstream Partners, LP
SMLP is a value-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 investment in Double E Pipeline, LLC, which is developing natural gas transmission infrastructure that will provide transportation service from multiple receipt points in the Delaware Basin to various delivery points in and around the Waha Hub in Texas. SMLP also has an equity investment in Ohio Gathering, which operates extensive natural gas gathering and condensate stabilization infrastructure in the Utica Shale in Ohio. SMLP is headquartered in Houston, Texas.
Forward-Looking Statements
This press release includes certain statements concerning expectations for the future that are forward-looking within the meaning of the federal securities laws. Forward-looking statements include, without limitation, any statement that may project, indicate or imply future results, events, performance or achievements and may contain the words "expect," "intend," "plan," "anticipate," "estimate," "believe," "will be," "will continue," "will likely result," and similar expressions, or future conditional verbs such as "may," "will," "should," "would," and "could." In addition, any statement concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies and possible actions taken by us or our subsidiaries are also forward-looking statements. Forward-looking statements also contain known and unknown risks and uncertainties (many of which are difficult to predict and beyond management's control) that may cause SMLP's actual results in future periods to differ materially from anticipated or projected results. An extensive list of specific material risks and uncertainties affecting SMLP is contained in its 2019 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on March 9, 2020, Quarterly Report on Form 10-Q for the three months ended March 31, 2020 filed with the SEC on May 8, 2020, Quarterly Report on Form 10-Q for the three months ended June 30, 2020 filed with the SEC on August 10, 2020 and Quarterly Report on Form 10-Q for the three months ended September 30, 2020 filed with the SEC on November 6, 2020, each 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 | ||||||||
December 31, | December 31, | |||||||
2020 | 2019 | |||||||
(In thousands) | ||||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 15,544 | $ | 9,530 | ||||
Restricted cash | - | 27,392 | ||||||
Accounts receivable | 61,932 | 97,418 | ||||||
Other current assets | 4,623 | 5,521 | ||||||
Total current assets | 82,099 | 139,861 | ||||||
Property, plant and equipment, net | 1,817,546 | 1,882,489 | ||||||
Intangible assets, net | 199,566 | 232,278 | ||||||
Investment in equity method investees | 392,740 | 309,728 | ||||||
Other noncurrent assets | 7,866 | 9,742 | ||||||
TOTAL ASSETS | $ | 2,499,817 | $ | 2,574,098 | ||||
LIABILITIES AND CAPITAL | ||||||||
Trade accounts payable | $ | 11,878 | $ | 24,415 | ||||
Accrued expenses | 13,036 | 11,339 | ||||||
Deferred revenue | 9,988 | 13,493 | ||||||
Ad valorem taxes payable | 9,086 | 8,477 | ||||||
Accrued compensation and employee benefits | 9,658 | 8,719 | ||||||
Accrued interest | 8,007 | 12,346 | ||||||
Accrued environmental remediation | 1,392 | 1,725 | ||||||
Other current liabilities | 5,363 | 3,487 | ||||||
Term loan | - | 5,546 | ||||||
Total current liabilities | 68,408 | 89,547 | ||||||
Long-term debt | 1,347,326 | 1,622,279 | ||||||
Noncurrent deferred revenue | 48,250 | 38,709 | ||||||
Noncurrent accrued environmental remediation | 1,537 | 2,926 | ||||||
Other noncurrent liabilities | 21,747 | 7,951 | ||||||
Total liabilities | 1,487,268 | 1,761,412 | ||||||
Mezzanine Capital | ||||||||
Subsidiary Series A Preferred Units | 89,658 | 27,450 | ||||||
Partners' Capital | ||||||||
Series A Preferred Units | 174,425 | 293,616 | ||||||
Common limited partner capital | 748,466 | 305,550 | ||||||
Noncontrolling interest | — | 186,070 | ||||||
Total partners' capital | 922,891 | 785,236 | ||||||
TOTAL LIABILITIES AND CAPITAL | $ | 2,499,817 | $ | 2,574,098 |
SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES | ||||||||||||||||
Three months ended December 31, | Year ended December 31, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(In thousands, except per-unit amounts) | ||||||||||||||||
Revenues: | ||||||||||||||||
Gathering services and related fees | $ | 73,125 | $ | 83,708 | $ | 302,792 | $ | 326,747 | ||||||||
Natural gas, NGLs and condensate sales | 14,073 | 18,556 | 49,319 | 86,994 | ||||||||||||
Other revenues | 9,212 | 9,983 | 31,362 | 29,787 | ||||||||||||
Total revenues | 96,410 | 112,247 | 383,473 | 443,528 | ||||||||||||
Costs and expenses: | ||||||||||||||||
Cost of natural gas and NGLs | 13,708 | 12,636 | 36,653 | 63,438 | ||||||||||||
Operation and maintenance | 20,899 | 23,948 | 86,030 | 98,719 | ||||||||||||
General and administrative (1) | 33,530 | 16,968 | 73,438 | 55,947 | ||||||||||||
Depreciation and amortization | 29,331 | 28,310 | 118,132 | 110,354 | ||||||||||||
Transaction costs | 1,049 | 455 | 2,993 | 3,017 | ||||||||||||
Gain on asset sales, net | (37) | 59 | (307) | (1,536) | ||||||||||||
Long-lived asset impairment (2) | 8,614 | 15,486 | 13,089 | 60,507 | ||||||||||||
Goodwill Impairment (3) | — | - | — | 16,211 | ||||||||||||
Total costs and expenses | 107,094 | 97,862 | 330,028 | 406,657 | ||||||||||||
Other income | (596) | 147 | 48 | 451 | ||||||||||||
Interest expense | (14,058) | (23,419) | (78,894) | (91,966) | ||||||||||||
Gain on early extinguishment of debt (4) | 124,137 | — | 203,062 | — | ||||||||||||
Income (loss) before income taxes and | 98,799 | (8,887) | 177,661 | (54,644) | ||||||||||||
Income tax benefit (expense) | 42 | 196 | 146 | (1,231) | ||||||||||||
Income (loss) from equity method investees (5) | 4,125 | (336,654) | 11,271 | (337,851) | ||||||||||||
Net income (loss) | $ | 102,966 | $ | (345,345) | $ | 189,078 | $ | (393,726) | ||||||||
Net income (loss) per limited partner unit: | ||||||||||||||||
Common unit – basic | $ | 30.45 | $ | (59.74) | $ | 73.22 | $ | (70.50) | ||||||||
Common unit – diluted | $ | 29.73 | $ | (59.74) | $ | 55.84 | $ | (70.50) | ||||||||
Weighted-average limited partner units | ||||||||||||||||
Common units – basic | 4,894 | 3,021 | 3,592 | 3,021 | ||||||||||||
Common units – diluted | 5,013 | 3,021 | 4,710 | 3,021 |
__________ | |
(1) | For the three months ended December 31, 2020, the amount includes a |
(2) | For the year ended December 31, 2020, the amount is associated with (i) a |
(3) | For the year ended December 31, 2019, the amount represents an impairment charge associated with our annual goodwill testing of the Marcellus Shale reporting unit. |
(4) | Subsequent to the GP Buy-In Transaction, the Partnership commenced a debt buyback program to repurchase our Senior Notes, which is ongoing. We repurchased |
(5) | For the year ended December 31, 2019, the amount includes a |
SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES | |||||||||||||||
Three months ended December 31, | Year ended December 31, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Other financial data: | |||||||||||||||
Net income (loss) | $ | 102,966 | $ | (345,345) | $ | 189,078 | $ | (393,726) | |||||||
Net cash provided by operating activities | $ | 51,782 | $ | 34,124 | $ | 198,589 | $ | 161,741 | |||||||
Capital expenditures | $ | 7,816 | $ | 30,628 | $ | 43,128 | $ | 182,291 | |||||||
Contributions to equity method investees | $ | 7,855 | $ | 6,986 | $ | 99,927 | $ | 18,316 | |||||||
Adjusted EBITDA | $ | 61,791 | $ | 76,984 | $ | 252,115 | $ | 283,352 | |||||||
Cash flow available for distributions (1) | $ | 44,755 | $ | 50,348 | $ | 162,835 | $ | 176,491 | |||||||
Distributions (2) | $ | — | $ | 18,812 | $ | — | $ | 111,530 | |||||||
Operating data: | |||||||||||||||
Aggregate average daily throughput – natural gas (MMcf/d) | 1,436 | 1,397 | 1,375 | 1,397 | |||||||||||
Aggregate average daily throughput – liquids (Mbbl/d) | 71 | 105 | 79 | 105 | |||||||||||
Ohio Gathering average daily throughput (MMcf/d) (3) | 621 | 732 | 571 | 732 |
__________ | |
(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 |
SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES | ||||||||||||||||
Three months ended December 31, | Year ended December 31, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(In thousands) | ||||||||||||||||
Reconciliations of net income or loss to adjusted EBITDA and distributable cash flow: | ||||||||||||||||
Net income (loss) | $ | 102,966 | $ | (345,345) | $ | 189,078 | $ | (393,726) | ||||||||
Add: | ||||||||||||||||
Interest expense | 14,058 | 23,419 | 78,894 | 91,966 | ||||||||||||
Income tax (benefit) expense | (42) | (196) | (146) | 1,231 | ||||||||||||
Depreciation and amortization (1) | 29,565 | 28,544 | 119,070 | 111,574 | ||||||||||||
Proportional adjusted EBITDA for equity | 8,474 | 9,542 | 31,056 | 39,126 | ||||||||||||
Adjustments related to MVC shortfall | 859 | 608 | — | 3,476 | ||||||||||||
Adjustments related to capital reimbursement | (619) | (250) | (1,395) | (2,156) | ||||||||||||
Unit-based and noncash compensation | 1,920 | 2,801 | 8,111 | 8,171 | ||||||||||||
Gain on early extinguishment of debt (5) | (124,137) | — | (203,062) | — | ||||||||||||
Gain on asset sales, net | (37) | 59 | (307) | (1,536) | ||||||||||||
Long-lived asset impairment (6) | 8,614 | 15,486 | 13,089 | 60,507 | ||||||||||||
Goodwill Impairment | — | — | — | 16,211 | ||||||||||||
Other, net (7) | 24,295 | 5,662 | 28,998 | 10,657 | ||||||||||||
Less: | ||||||||||||||||
Income (loss) from equity method investees | 4,125 | (336,654) | 11,271 | (337,851) | ||||||||||||
Adjusted EBITDA | $ | 61,791 | $ | 76,984 | $ | 252,115 | $ | 283,352 | ||||||||
Less: | ||||||||||||||||
Cash interest paid | 17,009 | 26,101 | 79,450 | 92,536 | ||||||||||||
Cash paid for taxes | — | — | 190 | 150 | ||||||||||||
Senior notes interest adjustment (8) | (3,091) | (3,063) | (4,487) | — | ||||||||||||
Maintenance capital expenditures | 3,118 | 3,598 | 14,127 | 14,175 | ||||||||||||
Cash flow available for distributions (9) | $ | 44,755 | $ | 50,348 | $ | 162,835 | $ | 176,491 | ||||||||
Distributions (10) | $ | — | $ | 18,812 | $ | — | $ | 111,530 |
__________ | |
(1) | Includes the amortization expense associated with our favorable gas gathering contracts as reported in other revenues. |
(2) | Reflects our proportionate share of Ohio Gathering adjusted EBITDA, subject to a one-month lag. |
(3) | Adjustments related to MVC shortfall payments are recognized ratably over the term of the associated MVC. |
(4) | Adjustments related to capital reimbursement activity represent contributions in aid of construction revenue recognized in accordance with Accounting Standards Update No. 2014-09 Revenue from Contracts with Customers ("Topic 606"). |
(5) | Subsequent to the GP Buy-In Transaction, the Partnership commenced a debt buyback program to repurchase our Senior Notes, which is ongoing. We repurchased |
(6) | For the year ended December 31, 2020, the amount is associated with (i) a |
(7) | Represents items of income or loss that we characterize as unrepresentative of our ongoing operations. For the three months ended December 31, 2020, the amount includes |
(8) | Senior notes interest adjustment represents the net of interest expense accrued and paid during the period. Interest on the |
(9) | 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. |
(10) | 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. |
SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES | ||||||||
Year ended December 31, | ||||||||
2020 | 2019 | |||||||
(In thousands) | ||||||||
Reconciliation of net cash provided by operating activities to adjusted EBITDA and distributable cash flow: | ||||||||
Net cash provided by operating activities | $ | 198,589 | $ | 161,741 | ||||
Add: | ||||||||
Interest expense, excluding amortization of debt issuance costs | 72,286 | 85,653 | ||||||
Income tax (benefit) expense | (146) | 1,231 | ||||||
Gain on fair value of warrants | 393 | — | ||||||
Settlement of interest rate derivative | (134) | — | ||||||
Transaction costs | 3,913 | — | ||||||
Changes in operating assets and liabilities | (50,018) | 24,010 | ||||||
Proportional adjusted EBITDA for equity method investees (1) | 31,056 | 39,126 | ||||||
Adjustments related to MVC shortfall payments (2) | — | 3,476 | ||||||
Adjustments related to capital reimbursement activity (3) | (1,395) | (2,156) | ||||||
Other, net (4) | 28,998 | 10,657 | ||||||
Less: | ||||||||
Distributions from equity method investees | 28,185 | 37,300 | ||||||
Noncash lease expense | 3,242 | 3,086 | ||||||
Adjusted EBITDA | $ | 252,115 | $ | 283,352 | ||||
Less: | ||||||||
Cash interest paid | 79,450 | 92,536 | ||||||
Cash paid for taxes | 190 | 150 | ||||||
Senior notes interest adjustment (5) | (4,487) | — | ||||||
Maintenance capital expenditures | 14,127 | 14,175 | ||||||
Cash flow available for distributions (6) | $ | 162,835 | $ | 176,491 |
__________ | |
(1) | Reflects our proportionate share of Ohio Gathering adjusted EBITDA, subject to a one-month lag. |
(2) | Adjustments related to MVC shortfall payments are recognized ratably over the term of the associated MVC. |
(3) | Adjustments related to capital reimbursement activity represent contributions in aid of construction revenue recognized in accordance with Accounting Standards Update No. 2014-09 Revenue from Contracts with Customers ("Topic 606"). |
(4) | Represents items of income or loss that we characterize as unrepresentative of our ongoing operations. For the year ended December 31, 2020, the amount includes |
(5) | Senior notes interest adjustment represents the net of interest expense accrued and paid during the period. Interest on the |
(6) | Represents cash flow available for distribution to preferred and common unitholders. Common distributions cannot be paid unless all accrued preferred distributions are paid. Cash flow available for distributions is also referred to as Distributable Cash Flow, or DCF. |
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SOURCE Summit Midstream Partners, LP
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