Press Release
Natural gas volume throughput averaged 1,572 million cubic feet per day ("MMcf/d") in the third quarter of 2016, an increase of 8.7% compared to 1,446 MMcf/d in the prior-year period, and an increase of 4.0% compared to 1,512 MMcf/d in the second quarter of 2016. Crude oil and produced water volume throughput in the third quarter of 2016 averaged 92.2 Mbbl/d, an increase of 35.2% compared to 68.2 Mbbl/d in the prior-year period, and an increase of 7.2% compared to 86.0 Mbbl/d in the second quarter of 2016. All volume throughput metrics exclude SMLP's proportionate share of volume throughput from our 40% ownership interest in Ohio Gathering.
We are also encouraged by the recent trend of upstream M&A that is occurring across several of our operating assets. During the third quarter,
Our strong financial performance in the third quarter of 2016 resulted in a quarterly distribution coverage ratio of 1.25x, which includes the impact of our
SMLP reported a net loss of
SMLP's financial results for the nine months ended
Third Quarter 2016 Segment Results
Segment adjusted EBITDA for the third quarter of 2016 totaled
The Bison Midstream, Polar and
Segment adjusted EBITDA for the
Liquids volumes averaged 92.2 Mbbl/d in the third quarter of 2016, an increase of 35.2% over the prior-year period and an increase of 7.2% compared to the second quarter of 2016. Liquids volumes were positively impacted by producers completing 28 drilled but uncompleted ("DUC") wells across our gathering footprint during the third quarter of 2016. We expect that our customers will continue to turn their inventory of DUCs to sales over the next several quarters.
Compared to the third quarter of 2015, associated natural gas volumes increased 4.3% to 24 MMcf/d in the third quarter of 2016, driven by increased volumes associated with the development of the Tioga Midstream system throughout 2015 and into 2016.
Piceance/DJ Basins
The Grand River and the Niobrara Gathering & Processing systems provide our midstream services for the Piceance/DJ Basins reportable segment. These systems provide natural gas gathering and processing services for producers operating in the
Segment adjusted EBITDA totaled
The impact of our anchor customer's volume declines was partially offset by higher minimum volume commitment ("MVC") shortfall payment adjustments associated with certain of our customers' gas gathering agreements. Lower commodity prices in the third quarter of 2016, compared to the prior-year period, also negatively impacted the margins we earned from our
The DFW Midstream system provides our midstream services for the
Segment adjusted EBITDA for the
The Mountaineer Midstream system provides our midstream services for the
Segment adjusted EBITDA for the
The following table presents average daily throughput by reportable segment:
Three months ended September 30, |
Nine months ended September 30, |
||||||||||||||||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||||||||||||||||
Average daily throughput (MMcf/d) (1): |
|||||||||||||||||||||||||
Utica Shale (2) |
234 |
42 |
178 |
24 |
|||||||||||||||||||||
Williston Basin |
24 |
23 |
24 |
22 |
|||||||||||||||||||||
Piceance/DJ Basins |
591 |
599 |
576 |
611 |
|||||||||||||||||||||
Barnett Shale |
305 |
325 |
329 |
361 |
|||||||||||||||||||||
Marcellus Shale |
418 |
457 |
429 |
515 |
|||||||||||||||||||||
Aggregate average daily throughput |
1,572 |
1,446 |
1,536 |
1,533 |
|||||||||||||||||||||
Average daily throughput (Mbbl/d) (1): |
|||||||||||||||||||||||||
Williston Basin |
92.2 |
68.2 |
91.0 |
61.5 |
|||||||||||||||||||||
Aggregate average daily throughput |
92.2 |
68.2 |
91.0 |
61.5 |
(1) |
Prior periods have been recast to include the incremental historical volumes from the 2016 Drop Down. |
|||||||||
(2) |
Exclusive of volume throughput for Ohio Gathering. |
MVC Shortfall Payments
SMLP billed its customers
MVC shortfall payment adjustments in the third quarter of 2016 totaled
SMLP's MVC shortfall payment mechanisms contributed
Three months ended September 30, 2016 |
||||||||||||||||
MVC billings |
Gathering revenue |
Adjustments payments |
Net impact |
|||||||||||||
(In thousands) |
||||||||||||||||
Net change in deferred revenue related to MVC shortfall payments: |
||||||||||||||||
Utica Shale |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
||||||||
Williston Basin |
— |
— |
— |
— |
||||||||||||
Piceance/DJ Basins |
4,071 |
3,224 |
847 |
4,071 |
||||||||||||
Barnett Shale |
— |
— |
— |
— |
||||||||||||
Marcellus Shale |
— |
— |
— |
— |
||||||||||||
Total net change |
$ |
4,071 |
$ |
3,224 |
$ |
847 |
$ |
4,071 |
||||||||
MVC shortfall payment adjustments: |
||||||||||||||||
Utica Shale |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
||||||||
Williston Basin |
— |
— |
4,195 |
4,195 |
||||||||||||
Piceance/DJ Basins |
290 |
290 |
6,412 |
6,702 |
||||||||||||
Barnett Shale |
245 |
245 |
87 |
332 |
||||||||||||
Marcellus Shale |
1,081 |
1,081 |
— |
1,081 |
||||||||||||
Total MVC shortfall payment adjustments |
$ |
1,616 |
$ |
1,616 |
$ |
10,694 |
$ |
12,310 |
||||||||
Total |
$ |
5,687 |
$ |
4,840 |
$ |
11,541 |
$ |
16,381 |
Nine months ended September 30, 2016 |
||||||||||||||||
MVC billings |
Gathering revenue |
Adjustments |
Net impact to adjusted |
|||||||||||||
(In thousands) |
||||||||||||||||
Net change in deferred revenue related to MVC shortfall payments: |
||||||||||||||||
Utica Shale |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
||||||||
Williston Basin |
235 |
— |
235 |
235 |
||||||||||||
Piceance/DJ Basins |
12,028 |
8,707 |
3,321 |
12,028 |
||||||||||||
Barnett Shale |
— |
677 |
(677) |
— |
||||||||||||
Marcellus Shale |
— |
— |
— |
— |
||||||||||||
Total net change |
$ |
12,263 |
$ |
9,384 |
$ |
2,879 |
$ |
12,263 |
||||||||
MVC shortfall payment adjustments: |
||||||||||||||||
Utica Shale |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
||||||||
Williston Basin |
— |
— |
11,757 |
11,757 |
||||||||||||
Piceance/DJ Basins |
854 |
854 |
18,911 |
19,765 |
||||||||||||
Barnett Shale |
753 |
753 |
271 |
1,024 |
||||||||||||
Marcellus Shale |
2,800 |
2,800 |
— |
2,800 |
||||||||||||
Total MVC shortfall payment adjustments |
$ |
4,407 |
$ |
4,407 |
$ |
30,939 |
$ |
35,346 |
||||||||
Total |
$ |
16,670 |
$ |
13,791 |
$ |
33,818 |
$ |
47,609 |
Capital Expenditures
SMLP recorded total capital expenditures of
Capital & Liquidity
As of
Through
Deferred Purchase Price Obligation
The consideration for the 2016 Drop Down consisted of (i) an initial
The Deferred Payment will be equal to: (a) six-and-one-half (6.5) multiplied by the average Business Adjusted EBITDA of the 2016 Drop Down Assets for 2018 and 2019; less (b) the Initial Payment; less (c) all capital expenditures incurred for the 2016 Drop Down Assets between March 3, 2016 and December 31, 2019; plus (d) all Business Adjusted EBITDA from the 2016 Drop Down Assets between March 3, 2016 and December 31, 2019. SMLP currently estimates that the Deferred Payment will be approximately $800.0 million to $900.0 million.
2016 SMLP Financial Guidance
SMLP expects its 2016 adjusted EBITDA to be at or above the top end of its
Quarterly Distribution
On
Third Quarter 2016 Earnings Call Information
SMLP will host a conference call at
A replay of the conference call will be available until
Upcoming Investor Conferences
Members of SMLP's senior management team will participate in
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, each 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, Deferred Purchase Price Obligation expense, impairments and other noncash expenses or losses, less interest income, 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, cash taxes paid and maintenance capital expenditures. Because adjusted EBITDA and distributable cash flow may be defined differently by other entities in our industry, our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other entities, thereby diminishing their utility.
Management uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating our financial performance. Furthermore, management believes that these non-GAAP financial measures may provide 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 and distributable cash flow are used as supplemental financial measures 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 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 noncash income or expense items.
Distributable cash flow is used to assess:
- the ability of our assets to generate cash sufficient to make future cash distributions and
- the attractiveness of capital projects and acquisitions and the overall rates of return on alternative investment opportunities.
Both of these measures have limitations as analytical tools and investors should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. For example:
- certain items excluded from adjusted EBITDA and distributable cash flow 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 and distributable cash flow do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;
- adjusted EBITDA and distributable cash flow do 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 and distributable cash flow do not reflect any cash requirements for such replacements.
We compensate for the limitations of adjusted EBITDA and distributable cash flow as analytical tools by reviewing the comparable GAAP financial measures, understanding the differences between the financial measures and incorporating these data points into our decision-making process. Reconciliations of GAAP to non-GAAP financial measures are attached to this press release.
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, (ii) deferred purchase price obligation income or expense and (iii) 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.
Comparability Related to Drop Down Transactions
With respect to drop down transactions, SMLP's historical results of operations may not be comparable to its future results of operations. In
About
SMLP is a growth-oriented limited partnership focused on developing, owning and operating midstream energy infrastructure assets that are strategically located in the core producing areas of unconventional resource basins, primarily shale formations, in the continental
About
As of
Forward-Looking Statements
This press release includes certain statements concerning expectations for the future that are forward-looking within the meaning of the federal securities laws. Forward-looking statements contain known and unknown risks and uncertainties (many of which are difficult to predict and beyond management's control) that may cause SMLP's actual results in future periods to differ materially from anticipated or projected results. An extensive list of specific material risks and uncertainties affecting SMLP is contained in its 2015 Annual Report on Form 10-K as updated and superseded by the Current Report on Form 8-K/A filed with the
SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES |
|||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
September 30, 2016 |
December 31, 2015 |
||||||
(In thousands) |
|||||||
Assets |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ |
7,597 |
$ |
21,793 |
|||
Accounts receivable |
52,448 |
89,581 |
|||||
Other current assets |
4,766 |
3,573 |
|||||
Total current assets |
64,811 |
114,947 |
|||||
Property, plant and equipment, net |
1,853,058 |
1,812,783 |
|||||
Intangible assets, net |
431,713 |
461,310 |
|||||
Investment in equity method investees |
705,845 |
751,168 |
|||||
Goodwill |
16,211 |
16,211 |
|||||
Other noncurrent assets |
8,439 |
8,253 |
|||||
Total assets |
$ |
3,080,077 |
$ |
3,164,672 |
|||
Liabilities and Partners' Capital |
|||||||
Current liabilities: |
|||||||
Trade accounts payable |
$ |
13,110 |
$ |
40,808 |
|||
Due to affiliate |
114 |
1,149 |
|||||
Deferred revenue |
— |
677 |
|||||
Ad valorem taxes payable |
9,413 |
10,271 |
|||||
Accrued interest |
7,733 |
17,483 |
|||||
Accrued environmental remediation |
7,954 |
7,900 |
|||||
Other current liabilities |
19,075 |
13,297 |
|||||
Total current liabilities |
57,399 |
91,585 |
|||||
Long-term debt |
1,224,919 |
1,267,270 |
|||||
Deferred Purchase Price Obligation |
538,543 |
— |
|||||
Deferred revenue |
49,042 |
45,486 |
|||||
Noncurrent accrued environmental remediation |
3,082 |
5,764 |
|||||
Other noncurrent liabilities |
7,692 |
7,268 |
|||||
Total liabilities |
1,880,677 |
1,417,373 |
|||||
Common limited partner capital |
1,158,343 |
744,977 |
|||||
Subordinated limited partner capital |
— |
213,631 |
|||||
General partner interests |
29,904 |
25,634 |
|||||
Noncontrolling interest |
11,153 |
— |
|||||
Summit Investments' equity in contributed subsidiaries |
— |
763,057 |
|||||
Total partners' capital |
1,199,400 |
1,747,299 |
|||||
Total liabilities and partners' capital |
$ |
3,080,077 |
$ |
3,164,672 |
SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES |
|||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||||
Three months ended September 30, |
Nine months ended September 30, |
||||||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||||||
(In thousands, except per-unit amounts) |
|||||||||||||||
Revenues: |
|||||||||||||||
Gathering services and related fees |
$ |
80,296 |
$ |
101,574 |
$ |
234,583 |
$ |
239,768 |
|||||||
Natural gas, NGLs and condensate sales |
9,578 |
8,710 |
25,747 |
33,290 |
|||||||||||
Other revenues |
5,199 |
4,917 |
14,949 |
15,084 |
|||||||||||
Total revenues |
95,073 |
115,201 |
275,279 |
288,142 |
|||||||||||
Costs and expenses: |
|||||||||||||||
Cost of natural gas and NGLs |
6,986 |
6,959 |
20,140 |
24,974 |
|||||||||||
Operation and maintenance |
23,059 |
24,660 |
72,311 |
71,044 |
|||||||||||
General and administrative |
12,368 |
10,829 |
38,123 |
34,060 |
|||||||||||
Transaction costs |
— |
322 |
1,296 |
1,254 |
|||||||||||
Depreciation and amortization |
27,979 |
26,396 |
83,670 |
77,945 |
|||||||||||
Environmental remediation |
— |
20,000 |
— |
20,000 |
|||||||||||
Loss (gain) on asset sales, net |
13 |
— |
24 |
(214) |
|||||||||||
Long-lived asset impairment |
1,172 |
7,696 |
1,741 |
7,696 |
|||||||||||
Total costs and expenses |
71,577 |
96,862 |
217,305 |
236,759 |
|||||||||||
Other income |
51 |
1 |
92 |
2 |
|||||||||||
Interest expense |
(15,733) |
(14,360) |
(47,650) |
(44,863) |
|||||||||||
Deferred Purchase Price Obligation expense |
(6,188) |
— |
(31,116) |
— |
|||||||||||
Income (loss) before income taxes and income (loss) from equity method investees |
1,626 |
3,980 |
(20,700) |
6,522 |
|||||||||||
Income tax benefit (expense) |
142 |
(199) |
(141) |
(366) |
|||||||||||
Income (loss) from equity method investees |
270 |
(240) |
(31,341) |
(7,494) |
|||||||||||
Net income (loss) |
$ |
2,038 |
$ |
3,541 |
$ |
(52,182) |
$ |
(1,338) |
|||||||
Less: |
|||||||||||||||
Net (loss) income attributable to Summit Investments |
— |
(20,063) |
2,745 |
(29,594) |
|||||||||||
Net income (loss) attributable to noncontrolling interest |
116 |
— |
(108) |
— |
|||||||||||
Net income (loss) attributable to SMLP |
1,922 |
23,604 |
(54,819) |
28,256 |
|||||||||||
Less net income (loss) attributable to general partner, including IDRs |
2,137 |
2,408 |
4,883 |
5,866 |
|||||||||||
Net (loss) income attributable to limited partners |
$ |
(215) |
$ |
21,196 |
$ |
(59,702) |
$ |
22,390 |
|||||||
(Loss) earnings per limited partner unit: |
|||||||||||||||
Common unit – basic |
$ |
0.00 |
$ |
0.32 |
$ |
(0.89) |
$ |
0.33 |
|||||||
Common unit – diluted |
$ |
0.00 |
$ |
0.32 |
$ |
(0.89) |
$ |
0.33 |
|||||||
Subordinated unit – basic and diluted |
$ |
0.32 |
$ |
0.40 |
|||||||||||
Weighted-average limited partner units outstanding: |
|||||||||||||||
Common units – basic |
67,844 |
41,974 |
66,978 |
38,258 |
|||||||||||
Common units – diluted |
67,844 |
42,147 |
66,978 |
38,387 |
|||||||||||
Subordinated units – basic and diluted |
24,410 |
24,410 |
SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES |
|||||||||||||||
UNAUDITED OTHER FINANCIAL AND OPERATING DATA |
|||||||||||||||
Three months ended September 30, |
Nine months ended September 30, |
||||||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||||||
(Dollars in thousands) |
|||||||||||||||
Other financial data: |
|||||||||||||||
Net income (loss) |
$ |
2,038 |
$ |
3,541 |
$ |
(52,182) |
$ |
(1,338) |
|||||||
Net cash provided by operating activities |
$ |
37,205 |
$ |
33,101 |
$ |
168,705 |
$ |
138,097 |
|||||||
Adjusted EBITDA (1) |
$ |
76,483 |
$ |
43,483 |
$ |
218,880 |
$ |
166,959 |
|||||||
Capital expenditures |
$ |
31,363 |
$ |
73,912 |
$ |
122,735 |
$ |
205,429 |
|||||||
Contributions to equity method investees |
$ |
4,512 |
$ |
9,979 |
$ |
20,157 |
$ |
74,375 |
|||||||
Acquisitions of gathering systems (2) |
$ |
— |
$ |
(4,323) |
$ |
866,858 |
$ |
288,618 |
|||||||
Distributable cash flow (1) |
$ |
55,568 |
$ |
26,566 |
$ |
158,104 |
$ |
114,183 |
|||||||
Distributions declared |
$ |
44,439 |
$ |
40,977 |
$ |
126,529 |
$ |
116,983 |
|||||||
Distribution coverage ratio (3) |
1.25x |
* |
* |
* |
|||||||||||
Operating data: |
|||||||||||||||
Aggregate average throughput – gas (MMcf/d) |
1,572 |
1,446 |
1,536 |
1,533 |
|||||||||||
Average throughput – liquids (Mbbl/d) |
92.2 |
68.2 |
91.0 |
61.5 |
* Not considered meaningful |
||||||
(1) Includes transaction costs. These unusual expenses are settled in cash. |
||||||
(2) Reflects cash and noncash consideration, including working capital and capital expenditure adjustments paid (received), to fund acquisitions and/or drop downs. |
||||||
(3) Distribution coverage ratio calculation for the three months ended September 30, 2016 is based on distributions declared in respect of the third quarter of 2016. Represents the ratio of distributable cash flow to distributions declared. Due to the common control nature of drop down transactions and to the extent that common control existed during a given reporting period, our results are reported on an as-if pooled basis with no adjustment to past distributions declared. As such, we do not present year-to-date or prior-year distribution coverage ratios when a drop down, and its funding, impacts distributable cash flow. |
SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES |
|||||||||||||||
UNAUDITED RECONCILIATION OF REPORTABLE SEGMENT ADJUSTED EBITDA |
|||||||||||||||
TO ADJUSTED EBITDA |
|||||||||||||||
Three months ended September 30, |
Nine months ended September 30, |
||||||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||||||
(In thousands) |
|||||||||||||||
Reportable segment adjusted EBITDA (1): |
|||||||||||||||
Utica Shale (2) |
$ |
17,042 |
$ |
11,031 |
$ |
50,071 |
$ |
22,651 |
|||||||
Williston Basin |
21,815 |
(5,800) |
60,745 |
17,817 |
|||||||||||
Piceance/DJ Basins |
28,074 |
26,162 |
79,120 |
83,070 |
|||||||||||
Barnett Shale |
13,128 |
13,143 |
41,118 |
45,444 |
|||||||||||
Marcellus Shale |
5,146 |
5,795 |
14,554 |
18,492 |
|||||||||||
Total |
85,205 |
50,331 |
245,608 |
187,474 |
|||||||||||
Less corporate expenses (3) |
8,722 |
6,848 |
26,728 |
20,515 |
|||||||||||
Adjusted EBITDA |
$ |
76,483 |
$ |
43,483 |
$ |
218,880 |
$ |
166,959 |
(1) We define reportable 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) impairments and (vi) other noncash expenses or losses, less other noncash income or gains. |
||||||
(2) Includes our proportional share of adjusted EBITDA for Ohio Gathering. 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) Corporate expenses represent 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. |
SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES |
|||||||||||||||
UNAUDITED RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES |
|||||||||||||||
Three months ended September 30, |
Nine months ended September 30, |
||||||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||||||
(Dollars in thousands) |
|||||||||||||||
Reconciliations of net income (loss) to adjusted EBITDA and distributable cash flow: |
|||||||||||||||
Net income (loss) |
$ |
2,038 |
$ |
3,541 |
$ |
(52,182) |
$ |
(1,338) |
|||||||
Add: |
|||||||||||||||
Interest expense |
15,733 |
14,360 |
47,650 |
44,863 |
|||||||||||
Income tax expense |
— |
199 |
141 |
366 |
|||||||||||
Depreciation and amortization (1) |
28,101 |
26,581 |
84,058 |
78,593 |
|||||||||||
Proportional adjusted EBITDA for equity method investees (2) |
10,059 |
10,177 |
35,173 |
21,992 |
|||||||||||
Adjustments related to MVC shortfall payments (3) |
11,541 |
(21,354) |
33,818 |
1,914 |
|||||||||||
Unit-based and noncash compensation |
2,050 |
2,044 |
6,000 |
5,595 |
|||||||||||
Deferred Purchase Price Obligation expense (4) |
6,188 |
— |
31,116 |
— |
|||||||||||
Loss on asset sales |
34 |
— |
168 |
24 |
|||||||||||
Long-lived asset impairment |
1,172 |
7,696 |
1,741 |
7,696 |
|||||||||||
Less: |
|||||||||||||||
Interest income |
— |
1 |
— |
2 |
|||||||||||
Income tax benefit |
142 |
— |
— |
— |
|||||||||||
Income (loss) from equity method investees |
270 |
(240) |
(31,341) |
(7,494) |
|||||||||||
Gain on asset sales |
21 |
— |
144 |
238 |
|||||||||||
Adjusted EBITDA (5) |
$ |
76,483 |
$ |
43,483 |
$ |
218,880 |
$ |
166,959 |
|||||||
Add: |
|||||||||||||||
Cash interest received |
— |
1 |
— |
2 |
|||||||||||
Cash taxes received |
— |
— |
50 |
— |
|||||||||||
Less: |
|||||||||||||||
Cash interest paid |
25,753 |
23,972 |
57,217 |
54,303 |
|||||||||||
Senior notes interest adjustment (6) |
(9,750) |
(9,750) |
(9,750) |
(11,171) |
|||||||||||
Maintenance capital expenditures |
4,912 |
2,696 |
13,359 |
9,646 |
|||||||||||
Distributable cash flow (5) |
$ |
55,568 |
$ |
26,566 |
$ |
158,104 |
$ |
114,183 |
|||||||
Distributions declared |
$ |
44,439 |
$ |
40,977 |
$ |
126,529 |
$ |
116,983 |
|||||||
Distribution coverage ratio (7) |
1.25x |
* |
* |
* |
* Not considered meaningful |
||||||
(1) Includes amortization of favorable and unfavorable gas gathering contracts reported in other revenues. |
||||||
(2) Reflects our proportionate share of Ohio Gathering adjusted EBITDA, based on a one-month lag. |
||||||
(3) Adjustments related to MVC shortfall payments account for (i) the net increases or decreases in deferred revenue for MVC shortfall payments and (ii) our inclusion of expected annual MVC shortfall payments. |
||||||
(4) Deferred Purchase Price Obligation expense represents the change in the present value of the deferred purchase price obligation. |
||||||
(5) Includes transaction costs. These unusual expenses are settled in cash. |
||||||
(6) Senior notes interest adjustment represents the net of interest expense accrued and paid during the period. Interest on the $300.0 million 5.5% senior notes is paid in cash semi-annually in arrears on February 15 and August 15 until maturity in August 2022. Interest on the $300.0 million 7.5% senior notes is paid in cash semi-annually in arrears on January 1 and July 1 until maturity in July 2021. |
||||||
(7) Distribution coverage ratio calculation for the three months ended September 30, 2016 is based on distributions declared in respect of the third quarter of 2016. Represents the ratio of distributable cash flow to distributions declared. Due to the common control nature of drop down transactions and to the extent that common control existed during a given reporting period, our results are reported on an as-if pooled basis with no adjustment to past distributions declared. As such, we do not present year-to-date or prior-year distribution coverage ratios when a drop down, and its funding, impacts distributable cash flow. |
SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES |
|||||||
UNAUDITED RECONCILIATIONS TO NON-GAAP FINANCIAL MEASURES |
|||||||
Nine months ended September 30, |
|||||||
2016 |
2015 |
||||||
(In thousands) |
|||||||
Reconciliation of net cash provided by operating activities to adjusted EBITDA and distributable cash flow: |
|||||||
Net cash provided by operating activities |
$ |
168,705 |
$ |
138,097 |
|||
Add: |
|||||||
Interest expense, excluding deferred loan costs |
44,623 |
41,623 |
|||||
Income tax expense |
141 |
366 |
|||||
Changes in operating assets and liabilities |
(29,441) |
(12,869) |
|||||
Proportional adjusted EBITDA for equity method investees (1) |
35,173 |
21,992 |
|||||
Adjustments related to MVC shortfall payments (2) |
33,818 |
1,914 |
|||||
Less: |
|||||||
Distributions from equity method investees |
34,139 |
23,435 |
|||||
Interest income |
— |
2 |
|||||
Write-off of debt issuance costs |
— |
727 |
|||||
Adjusted EBITDA (3) |
$ |
218,880 |
$ |
166,959 |
|||
Add: |
|||||||
Cash interest received |
— |
2 |
|||||
Cash taxes received |
50 |
— |
|||||
Less: |
|||||||
Cash interest paid |
57,217 |
54,303 |
|||||
Senior notes interest adjustment (4) |
(9,750) |
(11,171) |
|||||
Maintenance capital expenditures |
13,359 |
9,646 |
|||||
Distributable cash flow (3) |
$ |
158,104 |
$ |
114,183 |
(1) Reflects our proportionate share of Ohio Gathering adjusted EBITDA, based on a one-month lag. |
|||||
(2) Adjustments related to MVC shortfall payments account for (i) the net increases or decreases in deferred revenue for MVC shortfall payments and (ii) our inclusion of expected annual MVC shortfall payments. |
|||||
(3) Includes transaction costs. These unusual expenses are settled in cash. |
|||||
(4) Senior notes interest adjustment represents the net of interest expense accrued and paid during the period. Interest on the $300.0 million 5.5% senior notes is paid in cash semi-annually in arrears on February 15 and August 15 until maturity in August 2022. Interest on the $300.0 million 7.5% senior notes is paid in cash semi-annually in arrears on January 1 and July 1 until maturity in July 2021. |
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SOURCE
Marc Stratton, Senior Vice President and Treasurer, 832-608-6166, ir@summitmidstream.com