Summit Midstream Partners, LP(SMC) - 2025 Q2 - Quarterly Results

Executive Summary and Management Commentary Q2 2025 Adjusted EBITDA of $61.1 million was below expectations, leading to a revised full-year outlook near the low end of guidance - Adjusted EBITDA performance was below expectations primarily due to the timing and performance of certain wells in the DJ and Arkoma Basins, as well as lower realized commodity prices in the DJ Basin[4] - The company now expects to be near the low end of its 2025 Adjusted EBITDA guidance range of $245 million to $280 million[4][6] - Key commercial developments include a new 20-well program in the Arkoma Basin, a 10-year gathering agreement extension in the Williston Basin, and a new 100 MMcf/d firm capacity agreement on the Double E Pipeline expected to be in-service in Q4 2026[5][6] Q2 2025 Key Financial Metrics | Metric | Value (in millions) | | :--- | :--- | | Net Loss | $4.2 | | Adjusted EBITDA | $61.1 | | Distributable Cash Flow (DCF) | $32.4 | | Free Cash Flow (FCF) | $9.2 | Detailed Operational and Segment Performance Q2 2025 saw increased natural gas throughput and liquids volumes, with natural gas-driven segments generating $35.4 million and oil-driven segments $33.5 million in Adjusted EBITDA Overall Operational Throughput Q2 2025 average daily natural gas throughput increased 3.3% to 912 MMcf/d, and liquids volumes rose 5.4% to 78 Mbbl/d - Compared to Q1 2025, average daily natural gas throughput on wholly owned operated systems increased by 3.3% to 912 MMcf/d, and liquids volumes increased by 5.4% to 78 Mbbl/d[6] - The Double E pipeline transported an average of 682 MMcf/d in Q2 2025, an increase from 549 MMcf/d in Q2 2024[7][11] Average Daily Throughput by Segment (MMcf/d) | Segment | Q2 2025 (MMcf/d) | Q2 2024 (MMcf/d) | | :--- | :--- | :--- | | Rockies | 147 | 130 | | Piceance | 263 | 289 | | Mid-Con | 502 | 202 | | Aggregate | 912 | 716 | Segment Financial Performance Total segment Adjusted EBITDA reached $68.9 million in Q2 2025, with natural gas-driven segments contributing $35.4 million and oil-driven segments $33.5 million - Natural gas price-driven segments (Mid-Con, Piceance) generated a combined $35.4 million in adjusted EBITDA, a 3.3% increase from Q1 2025, driven by higher volumes and sales in the Mid-Con segment[10] - Oil price-driven segments (Rockies, Permian) generated $33.5 million in combined adjusted EBITDA, a 1.2% increase from Q1 2025, despite an estimated $2.0 million negative impact from lower commodity prices in Rockies[10] Segment Adjusted EBITDA (in thousands) | Segment | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Rockies | $25,235 | $22,858 | | Permian | $8,300 | $7,697 | | Piceance | $10,474 | $12,848 | | Mid-Con | $24,900 | $5,420 | | Total Segment Adj. EBITDA | $68,909 | $50,436 | Capital Management and Financial Position SMC invested $26.4 million in Q2 2025 capital expenditures, maintaining $20.9 million cash and $359 million ABL Revolver availability, and remaining compliant with financial covenants Capital Expenditures Q2 2025 total capital expenditures were $26.4 million, including $5.5 million for maintenance, with YTD segment capital expenditures at $45.2 million Q2 2025 Capital Expenditures | Category | Amount (in millions) | | :--- | :--- | | Total Capital Expenditures | $26.4 | | Maintenance Capital Expenditures | $5.5 | YTD 2025 Capital Expenditures by Segment (in thousands) | Segment | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | Rockies | $22,321 | $20,468 | | Piceance | $1,200 | $873 | | Mid-Con | $21,726 | $525 | | Total Segment Capex | $45,247 | $24,683 | Capital & Liquidity As of June 30, 2025, SMC had $20.9 million cash and $359 million ABL Revolver availability, remaining compliant with all financial covenants, including a total leverage ratio of approximately 4.1x - As of June 30, 2025, SMC had $20.9 million in unrestricted cash and $359 million of borrowing availability under its $500 million ABL Revolver[18] - The company was in compliance with all financial covenants, with an interest coverage ratio of 2.7x (vs. 2.0x minimum) and a first lien leverage ratio of 0.5x (vs. 2.5x maximum)[18] - The total leverage ratio was approximately 4.1x as of June 30, 2025[18] Revenue and Corporate Updates SMC billed $4.2 million for MVC shortfalls in Q2 2025, contributing to revenue and Adjusted EBITDA, while common stock dividends remain suspended, but Series A Preferred stock dividends will be paid MVC Shortfall Payments SMC billed customers $4.2 million in Q2 2025 for MVC shortfalls, recognizing the full amount as gathering revenue and contributing to Adjusted EBITDA - SMC billed customers $4.2 million in Q2 2025 for MVC shortfalls, recognizing the full amount as gathering revenue[20] MVC Shortfall Payments Impact (Q2 2025, in thousands) | Basin | MVC Billings | Gathering Revenue | Net Impact to Adj. EBITDA | | :--- | :--- | :--- | :--- | | Rockies | $— | $— | $(9) | | Piceance | $4,219 | $4,219 | $4,219 | | Total | $4,219 | $4,219 | $4,210 | Quarterly Dividend The board continued the suspension of common stock cash dividends for Q2 2025, but will pay the scheduled dividend on Series A Preferred stock, with prior unpaid preferred dividends accrued - The board of directors has continued the suspension of cash dividends on common stock for the period ended June 30, 2025[23] - The cash dividend for Series A Preferred stock for the period ending September 14, 2025, will be paid, and all unpaid preferred dividends from prior periods remain accrued[23] Unaudited Financial Statements Q2 2025 total revenues were $140.2 million with a net loss of $4.2 million, total assets $2.42 billion, liabilities $1.33 billion, and operating cash flow $37.2 million Condensed Consolidated Balance Sheets As of June 30, 2025, total assets were $2.42 billion, total liabilities $1.33 billion, and total equity $959.0 million Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $116,071 | $118,271 | | Total Assets | $2,423,043 | $2,359,484 | | Total Current Liabilities | $157,386 | $174,801 | | Long-term debt, net | $1,058,663 | $976,995 | | Total Liabilities | $1,327,057 | $1,261,413 | | Total Equity | $959,026 | $965,125 | Condensed Consolidated Statements of Operations Q2 2025 total revenues were $140.2 million, with total costs and expenses at $126.0 million, leading to a net loss of $4.2 million Statement of Operations Summary (Q2, in thousands) | Account | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenues | $140,217 | $101,315 | | Total Costs and Expenses | $126,013 | $94,465 | | Interest Expense | $(23,864) | $(31,457) | | Net Income (Loss) | $(4,228) | $(23,778) | | EPS - basic | $(0.66) | $(2.91) | Other Financial and Operating Data Q2 2025 operating cash flow was $37.2 million, capital expenditures $26.4 million, Adjusted EBITDA $61.1 million, DCF $32.4 million, and FCF $9.2 million Key Financial Data Summary (Q2, in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $37,213 | $(12,643) | | Capital expenditures | $26,390 | $10,522 | | Adjusted EBITDA | $61,094 | $43,148 | | Distributable Cash Flow (DCF) | $32,356 | $11,697 | | Free Cash Flow (FCF) | $9,222 | $2,723 | Non-GAAP Financial Measures and Reconciliations The company uses non-GAAP measures like Adjusted EBITDA, DCF, and FCF; Q2 2025 net loss of $4.2 million reconciled to $61.1 million Adjusted EBITDA and $32.4 million DCF - The company uses non-GAAP measures including Adjusted EBITDA, Distributable Cash Flow (DCF), and Free Cash Flow (FCF) for financial, operating, and planning decisions[28][33][34] Reconciliation of Net Income to Adjusted EBITDA (Q2 2025, in thousands) | Line Item | Amount | | :--- | :--- | | Net income (loss) | $(4,228) | | Add: Interest expense | $23,864 | | Add: Depreciation and amortization | $30,289 | | Add: Proportional adjusted EBITDA for equity method investees | $7,444 | | Other adjustments (net) | $8,527 | | Less: Income from equity method investees | $4,802 | | Adjusted EBITDA | $61,094 | Reconciliation of Adjusted EBITDA to DCF (Q2 2025, in thousands) | Line Item | Amount | | :--- | :--- | | Adjusted EBITDA | $61,094 | | Less: Cash interest paid | $5,309 | | Less: Senior notes interest adjustment | $17,789 | | Less: Maintenance capital expenditures | $5,460 | | Less: Cash paid for taxes | $180 | | Cash flow available for distributions (DCF) | $32,356 |