Summit Midstream Partners, LP Reports Record Fourth Quarter and Full Year 2018 Financial Results and Provides 2019 Financial Guidance

THE WOODLANDS, Texas, Feb. 26, 2019 /PRNewswire/ -- In addition to the strategic actions and leadership changes announced earlier today in a separate press release, Summit Midstream Partners, LP (NYSE: SMLP) is announcing its financial and operating results for the three months and year ended December 31, 2018.  SMLP reported net income of $38.7 million for the fourth quarter of 2018, compared to a net loss of $18.3 million for the prior-year period.  Net income in the fourth quarter of 2018 included $32.8 million of non-cash income related to a decrease in the present value of the estimated Deferred Purchase Price Obligation ("DPPO").  Net cash provided by operations totaled $61.4 million for the fourth quarter of 2018, compared to $41.3 million for the prior-year period.  Adjusted EBITDA totaled $­­­76.9 million and distributable cash flow ("DCF") totaled $­­44.4 million for the fourth quarter of 2018, compared to $72.9 million and $49.2 million, respectively, for the prior-year period.  Compared to the prior-year period, fourth quarter of 2018 DCF included $3.9 million of higher maintenance capital expenditures related to increased compressor overhauls, right-of-way improvements, and measurement software upgrades, and $3.6 million of higher net distributions to Series A Preferred unitholders.

Leonard Mallett, interim President and Chief Executive Officer, commented, "SMLP finished 2018 with a strong quarter of operating and financial results, and full year adjusted EBITDA exceeded the midpoint of our 2018 guidance.  The outlook for our business in 2019 is strong, and contemplates year-over-year adjusted EBITDA growth of approximately 7% at the midpoint, as adjusted for the sale of Tioga Midstream.  We expect that adjusted EBITDA growth in 2019 will be driven primarily by increased utilization of our two major processing facility investments in the Permian and DJ basins together with growing volumes across our Utica Shale and Williston Basin segments, partially offset by a decline in customer activity on our Piceance Basin and Marcellus Shale segments.    

"The sale of Tioga Midstream represents the first step in SMLP's strategy to evaluate and execute sales of non-core assets, and is occurring at an attractive value to SMLP.  The net proceeds from the sale will be used to repay outstanding indebtedness under our revolver.  We intend to continue focusing on streamlining our asset portfolio in 2019 and expanding our presence in our core focus areas, including the Utica, Williston, DJ and Permian."

SMLP reported net income of $42.4 million for the full year 2018, compared to net income of $86.1 million for the prior-year period.  Net cash provided by operations totaled $227.9 million for the full year 2018, compared to $237.8 million in the prior-year period.  SMLP reported adjusted EBITDA of $294.1 million and DCF of $179.3 million for the full year 2018, compared to $290.4 million and $205.0 million, respectively, for the prior-year period. 

Sale of Tioga Midstream

SMLP has executed definitive agreements with affiliates of Hess Infrastructure Partners LP ("HIP") related to the sale of Tioga Midstream, LLC ("Tioga") for cash consideration of $90.0 million, subject to customary closing adjustments.  Tioga owns and operates natural gas, crude oil, and produced water gathering infrastructure in Williams County, North Dakota and provides related gathering services, primarily for affiliates of Hess Corporation, in the Williston Basin.  SMLP is also eligible to earn up to $10.0 million of contingency payments from HIP in future periods, subject to certain future performance metrics.  The transaction is subject to certain customary closing conditions and is expected to close before the end of the first quarter of 2019. 

Double E Pipeline Project Update

The Double E Pipeline Project is expected to provide natural gas transportation service from multiple receipt points in the Delaware Basin to various delivery points in and around the Waha Hub.  SMLP continues to make progress with a number of counterparties to finalize volume commitments such that its final investment decision can be completed once these negotiations have concluded.  SMLP is on schedule to file its 7(c) application with the Federal Energy Regulatory Commission by the end of the first quarter of 2019, an important next step toward achieving the previously announced expected in-service date of the second quarter of 2021.

SMLP Financial Guidance

SMLP is updating its 2019 financial guidance, which is summarized in the table below:

SMLP's 2019 financial guidance has been modified to account for the sale of Tioga Midstream, which is expected to close by the end of the first quarter of 2019.  SMLP's 2019 financial guidance also includes the establishment of a new distribution policy through the reduction of SMLP's distribution per common unit to $0.2875 per quarter, beginning with the distribution to be paid in respect to the first quarter of 2019.

Our 2019 adjusted EBITDA guidance incorporates current production expectations from our customers, which in some cases have been reduced relative to our prior expectations, primarily due to the decrease in crude oil prices that occurred late in the fourth quarter of 2018.  Despite a lower commodity price backdrop, we have a strong growth outlook for our gathering systems that are located in crude oil-focused production basins, with approximately 215 new wells expected to be commissioned in 2019 for our systems serving the Williston, DJ and Permian basin segments.  Relative to our preliminary 2019 financial guidance issued in November 2018, our outlook for 2019 reflects a four-month delay in the commissioning of our 60 MMcf/d DJ Basin processing plant, together with well commissioning delays expected in the Utica Shale, Ohio Gathering, and Williston Basin segments. 

Capital expenditures in 2019 will be primarily focused in the Williston, DJ and Permian basins and include the development of a second 60 MMcf/d processing plant in the DJ Basin, which will increase SMLP's DJ Basin processing capacity to 120 MMcf/d and is expected to be operational by the third quarter of 2020. 

Fourth Quarter 2018 Segment Results

The following table presents average daily throughput by reportable segment:

Utica Shale

The Utica Shale reportable segment includes Summit Midstream Utica ("SMU"), a natural gas gathering system located in Belmont and Monroe counties in southeastern Ohio.  SMU gathers and delivers dry natural gas to interconnections with a third-party intrastate pipeline that provides access to the Clarington Hub. 

Segment adjusted EBITDA for the fourth quarter of 2018 totaled $5.8 million, a decrease of 28.6% from $8.2 million in the prior-year period and a decrease of 10.7% from $6.5 million in the third quarter of 2018, primarily due to lower volume throughput, partially offset by lower operating expense. Total volume throughput averaged 309 MMcf/d in the fourth quarter of 2018, a decrease of 16.3% from 369 MMcf/d in the prior-year period and a decrease of 13.4% from 357 MMcf/d in the third quarter of 2018.  Volumes were lower in the fourth quarter of 2018 compared to both the prior-year and prior-quarter periods, primarily due to natural production declines, partially offset by four new wells that were commissioned at the end of the fourth quarter of 2018.  Volume throughput on the TPL-7 Connector project, which generates a lower gathering margin compared to volumes gathered directly from a pad site, totaled 142 MMcf/d in the fourth quarter of 2018, compared to 48 MMcf/d in the prior-year period and 148 MMcf/d in the third quarter of 2018.      

We estimate that approximately 36 MMcf/d of temporary volume curtailments occurred in the fourth quarter of 2018 as a result of infill drilling and completion activities from customers on existing pad sites.  Drilling and completion activity is expected to increase in the near-term with approximately 15 new wells projected for 2019 from pad sites directly connected to the SMU system, compared to four new wells in 2018.  These completions are expected to generate annualized segment adjusted EBITDA in the second half of 2019 that is approximately 50% higher than the annualized segment adjusted EBITDA generated in the fourth quarter of 2018.

Ohio Gathering

The Ohio Gathering reportable segment includes our 40% ownership interest in the Ohio Gathering system, a natural gas gathering system spanning the condensate, liquids-rich and dry gas windows of the Utica Shale in Harrison, Guernsey, Noble, Belmont and Monroe counties in southeastern Ohio, as well as our ownership interest in Ohio Condensate, a condensate stabilization facility located in Harrison County, Ohio.  Segment adjusted EBITDA for the Ohio Gathering segment includes our proportional share of adjusted EBITDA from Ohio Gathering and Ohio Condensate, based on a one-month lag. 

Segment adjusted EBITDA for the fourth quarter of 2018 totaled $10.4 million, a decrease of 13.8% from $12.0 million in the prior-year period and an increase of 2.1% from $10.2 million in the third quarter of 2018.  Volume throughput on the Ohio Gathering system averaged 780 MMcf/d, gross, in the fourth quarter of 2018, compared to 825 MMcf/d, gross, in the prior-year period and 797 MMcf/d, gross, in the third quarter of 2018.  Volumes were lower in the fourth quarter of 2018 compared to both the prior-year and prior-quarter periods, primarily due to natural production declines from existing wells connected to the system, partially offset by three new wells that were commissioned in the fourth quarter of 2018. 

Our customers are currently operating one drilling rig upstream of the Ohio Gathering system.  We expect drilling and completion activity to remain consistent in 2019 relative to 2018, and to remain focused on the condensate and liquids-rich windows of the play, with approximately 50 new wells projected for 2019, compared to 43 new wells in 2018. 

Williston Basin

The Polar and Divide, Tioga Midstream and Bison Midstream systems provide our midstream services for the Williston Basin reportable segment.  The Polar and Divide system gathers crude oil in Williams and Divide counties in North Dakota and delivers to third-party intra- and interstate pipelines as well as third-party rail terminals.  The Polar and Divide system also gathers and delivers produced water to various third-party disposal wells in the region.  Tioga Midstream is a crude oil, produced water and associated natural gas gathering system in Williams County, North Dakota.  All crude oil and natural gas gathered on the Tioga Midstream system is delivered to third-party pipelines, and all produced water is delivered to third-party disposal wells.  Bison Midstream gathers associated natural gas production in Mountrail and Burke counties in North Dakota and delivers to third-party pipelines serving a third-party processing plant in Channahon, Illinois. 

Segment adjusted EBITDA for the Williston Basin segment totaled $21.9 million for the fourth quarter of 2018, an increase of 43.4% compared to $15.2 million in the prior-year period, and an increase of 10.1% from $19.8 million in the third quarter of 2018. 

Liquids volumes averaged 108.9 Mbbl/d in the fourth quarter of 2018, an increase of 47.0% from 74.1 Mbbl/d in the prior-year period and an increase of 12.4% compared to 96.9 Mbbl/d in the third quarter of 2018.  Liquids volumes increased as a result of 18 new wells commissioned on our system in the fourth quarter of 2018.  We estimate that approximately 13 Mbbl/d of volume throughput did not flow in the fourth quarter of 2018 as a result of (i) certain customers initiating temporary production curtailments on existing wells for nearby drilling and completion activities or (ii) produced water capacity constraints at third party disposal wells.    

Associated natural gas volumes averaged 18 MMcf/d in the fourth quarter of 2018, a decrease of 5.3% from 19 MMcf/d in both the prior-year period and the third quarter of 2018.  Five new associated natural gas wells were connected to our Williston gathering systems in the fourth quarter of 2018.    

Our Williston Basin customers are currently operating two drilling rigs upstream of our gathering systems.  We expect drilling activity to remain consistent in 2019 with completion activities expected to be more heavily weighted towards the second half of the year.  We expect that our customers will commission approximately 70 new wells in 2019, compared to 79 new wells in 2018. 

DJ Basin

The DJ Basin reportable segment includes the Niobrara Gathering & Processing system ("Niobrara G&P"), an associated natural gas gathering and processing system located in the DJ Basin in northeastern Colorado.  Niobrara G&P delivers residue gas to the Colorado Interstate Gas pipeline and processed NGLs to the Overland Pass Pipeline.

Segment adjusted EBITDA for the fourth quarter of 2018 totaled $3.0 million, an increase of 56.9% from $1.9 million in the prior-year period and an increase of 34.8% from $2.2 million in the third quarter of 2018.  Volume throughput averaged 21 MMcf/d in the fourth quarter of 2018, an increase of 50.0% from 14 MMcf/d in the prior-year period and an increase of 16.7% from 18 MMcf/d in the third quarter of 2018.  Volumes were higher compared to both the prior-year and prior-quarter periods, primarily due to 28 new wells that were commissioned upstream of the Niobrara G&P system in the fourth quarter of 2018. 

Our DJ Basin segment customers are currently operating five drilling rigs upstream of our Niobrara G&P system, and we expect a consistent level of drilling and completion activity in the near-term, with approximately 130 new well connections projected for 2019, compared to 61 new well connections in 2018. 

We expect to commission our 60 MMcf/d processing plant expansion in the second quarter of 2019, which will facilitate increased volume throughput, beginning in the second quarter of 2019.  In 2019, we expect to begin construction on a second 60 MMcf/d processing plant, which will increase total processing capacity for our Niobrara G&P system from 60 MMcf/d to 120 MMcf/d in the third quarter of 2020.

Permian Basin

The Permian Basin reportable segment includes Summit Midstream Permian ("Summit Permian"), an associated natural gas gathering and processing system located in the northern Delaware Basin in southeastern New Mexico.  Summit Permian operates the 60 MMcf/d Lane Gathering & Processing system ("Lane G&P"), which delivers residue gas to the Transwestern Pipeline and processed NGLs to the Lone Star Express pipeline. 

Summit Permian commissioned the Lane G&P system late in the fourth quarter of 2018.  Segment adjusted EBITDA for the fourth quarter of 2018 totaled ($0.3) million, an increase of 44.4% from ($0.7) million in the third quarter of 2018.  Summit Permian did not have material operations in the prior-year period.  Volume throughput averaged 3 MMcf/d in the fourth quarter of 2018 and was based on approximately 20 days of operations.

Our Permian Basin customers are currently operating two drilling rigs upstream of the Lane G&P system.  Volume throughput is expected to increase throughout 2019 based on our customers commissioning approximately 15 new wells over the course of the year.

Piceance Basin

The Grand River system provides our midstream services for the Piceance Basin reportable segment.  This system provides natural gas gathering and processing services for producers operating in the Piceance Basin located in western Colorado and eastern Utah. 

Segment adjusted EBITDA totaled $28.8 million for the fourth quarter of 2018, a decrease of 2.4% from $29.6 million in the prior-year period and an increase of 4.5% from $27.6 million in the third quarter of 2018, primarily due to lower volume throughput, partially offset by lower operating expense.  Fourth quarter 2018 volume throughput averaged 526 MMcf/d, a decrease of 6.2% from 561 MMcf/d in the prior-year period and a decrease of 5.1% from 554 MMcf/d in the third quarter of 2018.  No new wells were connected in the fourth quarter of 2018.  Volume throughput was lower in the fourth quarter of 2018 compared to the prior-quarter period due to natural production declines, primarily related to 93 new wells that were commissioned in the first three quarters of 2018.

There are no drilling rigs currently operating upstream of the Grand River system, and we do not anticipate a significant level of drilling or completion activity from our Piceance Basin customers in 2019.

Barnett Shale

The DFW Midstream system provides our midstream services for the Barnett Shale reportable segment.  This system gathers and delivers low-pressure natural gas received from pad sites, primarily located in southeastern Tarrant County, Texas, to downstream intrastate pipelines serving various natural gas hubs in the region. 

Segment adjusted EBITDA for the Barnett Shale segment totaled $11.5 million in the fourth quarter of 2018, a 11.5% increase from $10.3 million in the prior-year period and a 6.3% increase from $10.8 million in the third quarter of 2018.  Compared to the prior-year period, segment adjusted EBITDA in the fourth quarter of 2018 was negatively impacted by a two-month shutdown to repair our CO₂ treating facility, which was returned to normal operations in early January 2019. This was partially offset by approximately $1.5 million of adjustments to MVC shortfall payments, related to a customer's estimated MVC deficiency payment due in the fourth quarter of 2019. 

Volume throughput in the fourth quarter of 2018 averaged 255 MMcf/d, which was down 1.2% compared to 258 MMcf/d in the prior-year period and up 9.9% from 232 MMcf/d in the third quarter of 2018.  Volume throughput in the fourth quarter of 2018 was positively impacted by five new wells that were commissioned at the end of the third quarter of 2018.     

There are no rigs currently operating upstream of the DFW Midstream system; four new wells were commissioned on the system in January 2019 and another three wells are expected in the third quarter of 2019.

Marcellus Shale

The Mountaineer Midstream system provides our midstream services for the Marcellus Shale reportable segment. This system gathers high-pressure natural gas received from upstream pipeline interconnections with Antero Midstream Partners, LP and Crestwood Equity Partners LP.  Natural gas on the Mountaineer Midstream system is delivered to the Sherwood Processing Complex located in Doddridge County, West Virginia. 

Segment adjusted EBITDA for the Marcellus Shale segment totaled $5.5 million for the fourth quarter of 2018, a decrease of 10.1% from $6.1 million in the prior-year period and a decrease of 0.9% from $5.6 million in the third quarter of 2018, primarily due to lower volume throughput, partially offset by lower operating expense.  Volume throughput in the fourth quarter of 2018 averaged 401 MMcf/d, which was down 25.7% compared to the prior-year period of 540 MMcf/d and down 10.9% from 450 MMcf/d in the third quarter of 2018.  Volume throughput was lower in the fourth quarter of 2018 compared to both the prior-year and prior-quarter periods due to natural production declines, primarily related to 36 new wells that were commissioned in 2017 and the first quarter 2018.    

No new wells were connected in the fourth quarter of 2018.  We expect drilling activity to resume in mid-2019,  and we expect volume throughput growth beginning in the fourth quarter of 2019.

MVC Shortfall Payments

SMLP billed its customers $23.3 million in the fourth quarter of 2018 related to MVC shortfalls.  For those customers that do not have MVC shortfall credit banking mechanisms in their gathering agreements, the MVC shortfall payments are accounted for as gathering revenue in the period in which they are earned.  In the fourth quarter of 2018, SMLP recognized $14.5 million of gathering revenue associated with MVC shortfall payments.  SMLP also recognized $2.9 million of adjustments to MVC shortfall payments in the fourth quarter of 2018, primarily related to future expected shortfall payments from customers in the Williston Basin segment and the Barnett Shale segment.  SMLP's MVC shortfall payment mechanisms contributed $17.5 million of total adjusted EBITDA in the fourth quarter of 2018.

Capital Expenditures

Capital expenditures totaled $63.6 million in the fourth quarter of 2018, including maintenance capital expenditures of $7.9 million. Contributions to equity method investees in the fourth quarter of 2018 totaled $4.9 million.  Development activities during the fourth quarter of 2018 were primarily related to the ongoing construction and development of associated natural gas gathering and processing infrastructure in the Permian and DJ basins.  Maintenance capital expenditures in the fourth quarter of 2018 included higher costs associated with compressor overhauls, right-of-way improvements, and measurement software upgrades.

Capital & Liquidity

As of December 31, 2018, SMLP had $784.0 million of available borrowing capacity under its $1.25 billion revolving credit facility, subject to covenant limits.  Based upon the terms of SMLP's revolving credit facility and total outstanding debt of $1.27 billion (inclusive of $800.0 million of senior unsecured notes), SMLP's total leverage ratio and senior secured leverage ratio (as defined in the credit agreement) as of December 31, 2018, were 4.23 to 1.0 and 1.55 to 1.0, respectively.

Deferred Purchase Price Obligation

SMLP lowered the estimated undiscounted amount of the Deferred Purchase Price Obligation related to the 2016 Drop Down transaction from $470.9 million at September 30, 2018, to $423.9 million at December 31, 2018.  The decrease is primarily related to a decrease in the expected number of well connections together with a delay in the timing of certain well connections upstream of the SMU and Ohio Gathering systems in 2019.  In addition, the decrease accounts for a delay in the start-up of the new 60 MMcf/d Hereford processing plant from late in the fourth quarter of 2018 to the second quarter of 2019. 

The consideration for the 2016 Drop Down consisted of (i) an initial $360.0 million cash payment on March 3, 2016, which was subsequently adjusted by a $0.6 million working capital adjustment received from a subsidiary of Summit Midstream Partners, LLC ("Summit Investments") in June 2016 and (ii) the DPPO, which will be paid no later than December 31, 2020.  At the discretion of the board of directors of SMLP's general partner, the DPPO can be made in either cash or SMLP common units, or a combination thereof.

In February 2019, the Contribution Agreement associated with the 2016 Drop Down was amended to account for (i) a $100.0 million prepayment of the DPPO, which is expected to occur by the end of the first quarter of 2019 and (ii) an agreement to fix the remaining obligation due in 2020 at $303.5 million.

Quarterly Distribution

On January 24, 2019, the board of directors of SMLP's general partner declared a quarterly cash distribution of $0.575 per unit on all of its outstanding common units, or $2.30 per unit on an annualized basis, for the quarter ended December 31, 2018.  This quarterly distribution remains unchanged from the previous quarter and from the quarter ended December 31, 2017.  This distribution was paid on February 14, 2019, to unitholders of record as of the close of business on February 7, 2019.

In a separate press release issued on February 26, 2019, SMLP announced that it is undertaking a series of strategic actions to reposition the Company to better serve its customers and create value for its unitholders by enhancing its ability to fund attractive growth opportunities and maintain a prudent capital structure.  These actions include (i) the elimination of SMLP's economic General Partner interest and incentive distribution rights ("IDRs") in exchange for 8.75 million SMLP common units and (ii) the establishment of a new distribution policy through the reduction of SMLP's distribution per common unit to $0.2875 per quarter, beginning with the distribution to be paid in respect of the first quarter of 2019.

Fourth Quarter 2018 Earnings Call Information

SMLP will host a conference call at 9:00 a.m. Eastern on Tuesday, February 26, 2019, to discuss its quarterly operating and financial results, as well as the strategic actions announced on February 26, 2019.  Interested parties may participate in the call by dialing 847-585-4405 or toll-free 888-771-4371 and entering the passcode 48142406.  The conference call will also be webcast live and can be accessed through the Investors section of SMLP's website at www.summitmidstream.com.

A replay of the conference call will be available until March 12, 2019, at 11:59 p.m. Eastern, and can be accessed by dialing 888-843-7419 and entering the replay passcode 48142406#.  An archive of the conference call will also be available on SMLP's website.

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, adjustments related to capital reimbursement activity, unit-based and noncash compensation, the change in the Deferred Purchase Price Obligation fair value, early extinguishment of debt expense, 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.  We define distributable cash flow as adjusted EBITDA plus cash interest received and cash taxes received, less cash interest paid, senior notes interest adjustment, distributions to Series A Preferred unitholders, Series A Preferred units distribution 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 income or expense items that we characterize as unrepresentative of our ongoing operations.

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 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. 

About Summit Midstream Partners, LP

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 United States.  SMLP provides natural gas, crude oil and produced water gathering services pursuant to primarily long-term and fee-based gathering and processing 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 and Utah.  SMLP also owns a 40% ownership interest in Ohio Gathering, which is developing natural gas gathering and condensate stabilization infrastructure in the Utica Shale in Ohio. SMLP is headquartered in The Woodlands, Texas, with regional corporate offices in Denver, Colorado; Atlanta, Georgia; Pittsburgh, Pennsylvania; and Dallas, Texas.

About Summit Midstream Partners, LLC

Summit Midstream Partners, LLC ("Summit Investments") beneficially owns a 42.1% limited partner interest in SMLP, pro forma for the strategic actions announced on February 26, 2019, and indirectly owns and controls the non-economic general partner of SMLP, Summit Midstream GP, LLC, which has sole responsibility for conducting the business and managing the operations of SMLP. Summit Investments is a privately held company controlled by Energy Capital Partners II, LLC, and certain of its affiliates. An affiliate of Energy Capital Partners II, LLC directly owns an 7.2% limited partner interest in SMLP, pro forma for the strategic actions announced on February 26, 2019.

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 2017 Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2018, and as amended and updated from time to time. Any forward-looking statements in this press release, including forward-looking statements regarding 2019 financial guidance or financial or operating expectations for 2019, 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.

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 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. 

SOURCE Summit Midstream Partners, LP

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