smlp-20240331

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-35666

Summit Midstream Partners, LP

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of

incorporation or organization)

910 Louisiana Street, Suite 4200

Houston, TX

(Address of principal executive offices)

45-5200503

(I.R.S. Employer

Identification No.)

77002

(Zip Code)

(832) 413-4770

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Units	SMLP	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).


x			Yes			o			No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	x
Non-accelerated filer	☐	Smaller reporting company	x
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes x No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class						As of April 30, 2024
Common Units						10,648,685 units

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TABLE OF CONTENTS


COMMONLY USED OR DEFINED TERMS		2

PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements.
	Unaudited Condensed Consolidated Balance Sheets.	6
	Unaudited Condensed Consolidated Statements of Operations.	7
	Unaudited Condensed Consolidated Statements of Partners' Capital.	8
	Unaudited Condensed Consolidated Statements of Cash Flows.	9
	Notes to Unaudited Condensed Consolidated Financial Statements.	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	23
Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	42
Item 4.	Controls and Procedures.	42
PART II	OTHER INFORMATION	43
Item 1.	Legal Proceedings.	43
Item 1A.	Risk Factors.	44
Item 5.	Other Information.	44
Item 6.	Exhibits.	45

SIGNATURES		46

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COMMONLY USED OR DEFINED TERMS



2015 Blacktail Release			a 2015 rupture of our four-inch produced water gathering pipeline near Williston, North Dakota
2022 DJ Acquisitions			the acquisition of Outrigger DJ Midstream LLC from Outrigger Energy II LLC, and each of Sterling Energy Investments LLC, Grasslands Energy Marketing LLC and Centennial Water Pipelines LLC from Sterling Investment Holdings LLC
2025 Senior Notes			Summit Holdings' and Finance Corp.’s 5.75% senior unsecured notes due April 2025

2026 Secured Notes			Summit Holdings' and Finance Corp.’s 8.500% senior secured second lien notes due October 2026
2026 Secured Notes Indenture			Indenture, dated as of November 2, 2021, by and among Summit Holdings, Finance Corp., the guarantors party thereto and Regions Bank, as trustee
2026 Unsecured Notes			Summit Holdings’ and Finance Corp.’s 12.00% senior unsecured notes due October 2026
ABL Agreement			Loan and Security Agreement, dated as of November 2, 2021, among Summit Holdings, as borrower, SMLP and certain subsidiaries from time to time party thereto, as guarantors, Bank of America, N.A., as agent, ING Capital LLC, Royal Bank of Canada and Regions Bank, as co-syndication agents, and Bank of America, N.A., ING Capital LLC, RBC Capital Markets and Regions Capital Markets, as joint lead arrangers and joint bookrunners
ABL Facility			the asset-based lending credit facility governed by the ABL Agreement
ASU			Accounting Standards Update
Bcf/d			one billion cubic feet per day
Board of Directors			the board of directors of our General Partner

Co-Issuers			Summit Holdings and Finance Corp., as co-issuers of the 2025 Senior Notes, the 2026 Unsecured Notes and the 2026 Secured Notes
condensate			a natural gas liquid with a low vapor pressure, mainly composed of propane, butane, pentane and heavier hydrocarbon fractions

DFW Midstream			DFW Midstream Services LLC
DJ Basin			Denver-Julesburg Basin
Double E			Double E Pipeline, LLC
Double E Pipeline			a 135 mile, 1.35 Bcf/d, FERC-regulated interstate natural gas transmission pipeline that commenced operations in November 2021 and provides transportation service from multiple receipt points in the Delaware Basin to various delivery points in and around the Waha hub in Texas

Double E Project			the development and construction of the Double E Pipeline
EPA			Environmental Protection Agency

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EPU			earnings or loss per unit
FASB			Financial Accounting Standards Board
Finance Corp.			Summit Midstream Finance Corp.
fracking			the process of injecting liquid at high pressure into subterranean rocks, boreholes, etc. so as to force open existing fissures and extract oil or gas
frac-protect activities			activities that are designed to protect existing hydrocarbon wells from harm by shutting in existing hydrocarbon production until new well activities have concluded
GAAP			accounting principles generally accepted in the United States of America
General Partner			Summit Midstream GP, LLC
GP			general partner

Grand River			Grand River Gathering, LLC
Guarantor Subsidiaries			Grand River and its subsidiaries, DFW Midstream, Summit Marketing, OpCo, Meadowlark Midstream, Summit Permian II, LLC, Mountaineer Midstream, Epping Transmission Company, LLC, Red Rock Gathering, Polar Midstream, LLC and Summit Niobrara
Hub			geographic location of a storage facility and multiple pipeline interconnections

LIBOR			London Interbank Offered Rate
Mbbl/d			one thousand barrels per day
MD&A			Management's Discussion and Analysis of Financial Condition and Results of Operations
Meadowlark Midstream			Meadowlark Midstream Company, LLC
MMBTU			metric million British thermal units
MMcf/d			one million cubic feet per day
Mountaineer Midstream			Mountaineer Midstream Company, LLC
MVC			minimum volume commitment
NGLs			natural gas liquids; the combination of ethane, propane, normal butane, iso-butane and natural gasolines that when removed from unprocessed natural gas streams become liquid under various levels of higher pressure and lower temperature

NYSE			New York Stock Exchange


OCC			Ohio Condensate Company, L.L.C.
OGC			Ohio Gathering Company, L.L.C.

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Ohio Gathering			Ohio Gathering Company, L.L.C. and Ohio Condensate Company, L.L.C.
OpCo			Summit Midstream OpCo, LP
play			a proven geological formation that contains commercial amounts of hydrocarbons

Permian Holdco			Summit Permian Transmission Holdco, LLC
Permian Term Loan Facility			the term loan governed by the Credit Agreement, dated as of March 8, 2021, among Summit Permian Transmission, LLC, as borrower, MUFG Bank Ltd., as administrative agent, Mizuho Bank (USA), as collateral agent, ING Capital LLC, Mizuho Bank, Ltd. and MUFG Union Bank, N.A., as L/C issuers, coordinating lead arrangers and joint bookrunners, and the lenders from time to time party thereto
Permian Transmission Credit Facilities			the credit facilities governed by the Credit Agreement, dated as of March 8, 2021, among Summit Permian Transmission, LLC, as borrower, MUFG Bank Ltd., as administrative agent, Mizuho Bank (USA), as collateral agent, ING Capital LLC, Mizuho Bank, Ltd. and MUFG Union Bank, N.A., as L/C issuers, coordinating lead arrangers and joint bookrunners, and the lenders from time to time party thereto

produced water			water from underground geologic formations that is a by-product of natural gas and crude oil production
Red Rock Gathering			Red Rock Gathering Company, LLC
Revolving Credit Facility			the Third Amended and Restated Credit Agreement dated as of May 26, 2017, as amended by the First Amendment to Third Amended and Restated Credit Agreement dated as of September 22, 2017, the Second Amendment to Third Amended and Restated Credit Agreement dated as of June 26, 2019, the Third Amendment to Third Amended and Restated Credit Agreement dated as of December 24, 2019 and the Fourth Amendment to Third Amended and Restated Credit Agreement dated as of December 18, 2020
SEC			Securities and Exchange Commission
Securities Act			Securities Act of 1933, as amended
segment adjusted EBITDA			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
Senior Notes			The 2025 Senior Notes and the 2026 Secured Notes, collectively
Series A Preferred Units			Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units issued by the Partnership
shortfall payment			the payment received from a counterparty when its volume throughput does not meet its MVC for the applicable period
SMLP			Summit Midstream Partners, LP
SMLP LTIP			SMLP Long-Term Incentive Plan

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SOFR			Secured Overnight Financing Rate
Subsidiary Series A Preferred Units			Series A Fixed Rate Cumulative Redeemable Preferred Units issued by Permian Holdco
Summit Holdings			Summit Midstream Holdings, LLC
Summit Investments			Summit Midstream Partners, LLC
Summit Marketing			Summit Midstream Marketing, LLC
Summit Niobrara			Summit Midstream Niobrara, LLC

Summit Permian II			Summit Midstream Permian II, LLC
Summit Permian Transmission			Summit Permian Transmission, LLC
Summit Utica			Summit Midstream Utica, LLC
the Partnership			Summit Midstream Partners, LP and its subsidiaries
the Partnership Agreement			the Fourth Amended and Restated Agreement of Limited Partnership of the Partnership dated May 28, 2020, as amended
throughput volume			the volume of natural gas, crude oil or produced water gathered, transported or passing through a pipeline, plant or other facility during a particular period; also referred to as volume throughput
unconventional resource basin			a basin where natural gas or crude oil production is developed from unconventional sources that require hydraulic fracturing as part of the completion process, for instance, natural gas produced from shale formations and coalbeds; also referred to as an unconventional resource play
wellhead			the equipment at the surface of a well, used to control the well's pressure; also, the point at which the hydrocarbons and water exit the ground

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS


	March 31, 2024		December 31, 2023
	(In thousands, except unit amounts)
ASSETS
Cash and cash equivalents	$	344,590	$	14,044
Restricted cash	3,454		2,601
Accounts receivable	66,587		76,275
Other current assets	5,935		5,502
Total current assets	420,566		98,422
Property, plant and equipment, net	1,447,443		1,698,585
Intangible assets, net	147,304		175,592
Investment in equity method investees	273,476		486,434
Other noncurrent assets	31,786		35,165
TOTAL ASSETS	$	2,320,575	$	2,494,198

LIABILITIES AND CAPITAL
Trade accounts payable	$	18,063	$	22,714
Accrued expenses	36,554		32,377
Deferred revenue	8,899		10,196
Ad valorem taxes payable	3,282		8,543
Accrued compensation and employee benefits	2,824		6,815
Accrued interest	44,826		19,298
Accrued environmental remediation	1,854		1,483
Accrued settlement payable	6,667		6,667
Current portion of long-term debt	29,098		15,524

Other current liabilities	7,476		10,395
Total current liabilities	159,543		134,012
Long-term debt, net of issuance costs	1,127,287		1,455,166
Noncurrent deferred revenue	28,761		30,085
Noncurrent accrued environmental remediation	1,278		1,454
Other noncurrent liabilities	28,298		30,266
TOTAL LIABILITIES	1,345,167		1,650,983
Commitments and contingencies (Note 14)

Mezzanine Capital
Subsidiary Series A Preferred Units (93,039 units issued and outstanding at March 31, 2024 and December 31, 2023)	126,794		124,652

Partners' Capital
Series A Preferred Units (65,508 units issued and outstanding at March 31, 2024 and December 31, 2023)	100,113		96,893
Common limited partner capital (10,648,685 and 10,376,189 units issued and outstanding at March 31, 2024 and December 31, 2023, respectively)	748,501		621,670
Total partners' capital	848,614		718,563
TOTAL LIABILITIES AND CAPITAL	$	2,320,575	$	2,494,198

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


	Three Months Ended March 31,
		2024		2023
		(In thousands, except per-unit amounts)
Revenues:
Gathering services and related fees		$	61,985	$	57,371
Natural gas, NGLs and condensate sales		49,092		49,163
Other revenues		7,794		5,965
Total revenues		118,871		112,499
Costs and expenses:
Cost of natural gas and NGLs		30,182		30,882
Operation and maintenance		25,012		23,972
General and administrative		14,785		9,987
Depreciation and amortization		27,867		29,824
Transaction costs		7,791		302
Acquisition integration costs		40		1,502
Gain on asset sales, net		(27)		(68)
Long-lived asset impairments		67,916		—
Total costs and expenses		173,566		96,401
Other income (expense), net		(13)		56
Gain (loss) on interest rate swaps		2,590		(1,273)
Gain on sale of business		86,202		18

Gain on sale of equity method investment		126,261		—
Interest expense		(37,846)		(34,223)

Income (loss) before income taxes and equity method investment income		122,499		(19,324)
Income tax benefit (expense)		(210)		252
Income from equity method investees		10,638		4,909
Net income (loss)		$	132,927	$	(14,163)
Less: Net income attributable to Subsidiary Series A Preferred Units		(3,770)		(1,746)
Net income (loss) attributable to Summit Midstream Partners, LP		$	129,157	$	(15,909)
Less: net income attributable to Series A Preferred Units		(3,220)		(2,639)

Net income (loss) attributable to common limited partners		$	125,937	$	(18,548)
Net income (loss) per limited partner unit:
Common unit – basic		$	12.05	$	(1.82)
Common unit – diluted		$	11.47	$	(1.82)

Weighted-average limited partner units outstanding:
Common units – basic		10,449		10,213
Common units – diluted		10,980		10,213

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL


	Partners' Capital
		Series A Preferred Units		Common Limited Partners Capital		Total
		(In thousands)
Partners' capital, December 31, 2023		$	96,893	$	621,670	$	718,563
Net income		3,220		125,937		129,157
Unit-based compensation		—		2,772		2,772
Tax withholdings and associated payments on vested SMLP LTIP awards		—		(1,878)		(1,878)

Partners' capital, March 31, 2024		$	100,113	$	748,501	$	848,614


	Partners' Capital
		Series A Preferred Units		Common Limited Partners Capital		Total
		(In thousands)
Partners' capital, December 31, 2022		$	85,327	$	679,491	$	764,818
Net income (loss)		2,639		(18,548)		(15,909)
Unit-based compensation		—		1,929		1,929
Tax withholdings and associated payments on vested SMLP LTIP awards		—		(1,136)		(1,136)


Partners' capital, March 31, 2023		$	87,966	$	661,736	$	749,702

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Three Months Ended March 31,
	2024		2023
	(In thousands)
Cash flows from operating activities:
Net income (loss)	$	132,927	$	(14,163)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	28,102		30,059
Noncash lease expense	1,009		784
Amortization of debt issuance costs	3,505		3,161
Unit-based and noncash compensation	2,772		1,929
Income from equity method investees	(10,638)		(4,909)
Distributions from equity method investees	17,082		10,403
Gain on asset sales, net	(27)		(68)
Foreign currency (gain) loss	19		(32)

Gain on sale of business	(86,202)		—

Gain on sale of equity method investment	(126,261)		—
Unrealized (gain) loss on interest rate swaps	(1,244)		2,417
Long-lived asset impairment	67,916		—
Changes in operating assets and liabilities:
Accounts receivable	2,961		12,377
Trade accounts payable	(3,497)		6,033
Accrued expenses	3,833		2,816
Deferred revenue, net	(2,293)		(1,082)
Ad valorem taxes payable	(5,261)		(6,990)
Accrued interest	25,528		21,961
Accrued environmental remediation, net	195		(289)
Other, net	(6,810)		(14,712)
Net cash provided by operating activities	43,616		49,695
Cash flows from investing activities:
Proceeds from sale of business	292,266		—
Proceeds from sale of equity method investment	332,734		—
Capital expenditures	(16,398)		(16,438)

Proceeds from asset sale	27		—
Investment in Double E equity method investee	—		(3,500)

Other, net	—		(2,611)
Net cash provided by (used in) investing activities	608,629		(22,549)
Cash flows from financing activities:




Repayments on ABL Facility	(313,000)		(13,000)
Repayments on Permian Transmission Term Loan	(3,794)		(2,519)




Distributions on Subsidiary Series A Preferred Units	(1,628)		(1,628)

Debt issuance costs	—		(97)

Other, net	(2,424)		(150)
Net cash used in financing activities	(320,846)		(17,394)
Net change in cash, cash equivalents and restricted cash	331,399		9,752
Cash, cash equivalents and restricted cash, beginning of period	16,645		13,531
Cash, cash equivalents and restricted cash, end of period	$	348,044	$	23,283

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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SUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION, BUSINESS OPERATIONS AND PRESENTATION AND CONSOLIDATION

Organization. Summit Midstream Partners, LP (including its subsidiaries, collectively “SMLP” or the “Partnership”) is a Delaware limited partnership that was formed in May 2012 and began operations in October 2012. SMLP is a value-oriented limited partnership focused on developing, owning and operating midstream energy infrastructure assets that are strategically located in unconventional resource basins, primarily shale formations, in the continental United States. The Partnership’s business activities are primarily conducted through various operating subsidiaries, each of which is owned or controlled by its wholly owned subsidiary holding company, Summit Holdings, a Delaware limited liability company.

Business Operations. The Partnership provides natural gas gathering, compression, treating and processing services as well as crude oil and produced water gathering services pursuant to primarily long-term, fee-based agreements with its customers. In addition to these services, the Partnership also provides freshwater delivery services pursuant to short-term agreements with customers. The Partnership’s results are primarily driven by the volumes of natural gas that it gathers, compresses, treats and/or processes as well as by the volumes of crude oil and produced water that it gathers. As of March 31, 2024, other than the Partnership’s investment in Double E, all of its business activities are conducted through wholly owned operating subsidiaries.

Presentation and Consolidation. The Partnership prepares its condensed consolidated financial statements in accordance with GAAP as established by the FASB and pursuant to the rules and regulations of the SEC pertaining to interim financial information. The unaudited condensed consolidated financial statements contained in this report include all normal and recurring material adjustments that, in the opinion of management, are necessary for a fair statement of the financial position, results of operations and cash flows for the interim periods presented herein. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements and related notes that are included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2023.

The Partnership makes estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet dates, including fair value measurements, the reported amounts of revenues and expenses and the disclosure of commitments and contingencies. Although management believes these estimates are reasonable, actual results could differ from its estimates.

The unaudited condensed consolidated financial statements include the assets, liabilities and results of operations of SMLP and its subsidiaries. All intercompany transactions among the consolidated entities have been eliminated in consolidation. Comprehensive income or loss is the same as net income or loss for all periods presented.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENTLY ISSUED ACCOUNTING STANDARDS APPLICABLE TO THE PARTNERSHIP

There have been no changes to the Partnership’s significant accounting policies since December 31, 2023.

Accounting standards recently implemented. ASU No. 2020-06 Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815–40) (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in GAAP. The ASU’s amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The provisions of ASU 2020-06 did not have a material impact on the Partnership’s condensed consolidated financial statements and disclosures.

New accounting standards not yet implemented. ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 enhances disclosures on reportable segments and provides additional detailed information about significant segment expenses. The guidance in ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Partnership continues to assess the impact of the new guidance, but does not expect the provisions of ASU 2023-07 will have a material impact on its consolidated financial statements and disclosures.

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3. DIVESTITURES

Summit Utica Sale. On March 22, 2024, the Partnership completed the disposition of Summit Utica, LLC (“Summit Utica”) to a subsidiary of MPLX LP (“MPLX”) for a cash sale price of $625.0 million, subject to customary post-closing adjustments (the “Utica Sale”). Summit Utica is the owner of (i) approximately 36% of the issued and outstanding equity interests in OGC, (ii) approximately 38% of the issued and outstanding equity interests in OCC, together with OGC, Ohio Gathering and (iii) midstream assets located in the Utica Shale. Ohio Gathering is the owner of a natural gas gathering system and condensate stabilization facility located in Belmont and Monroe counties in the Utica Shale in southeastern Ohio.

During the quarterly period ended March 31, 2024, the Partnership recognized a total gain on the disposition of Summit Utica of $212.5 million based on total cash proceeds received of $625.0 million and net assets sold of $412.5 million. A portion of the cash proceeds was used to reduce amounts outstanding under the ABL Facility (see Note 8 - Debt, for additional information) and are subject to final working capital adjustments.

The $625.0 million sale price did not discretely list values for either OGC, OCC or the Partnership’s midstream assets located in the Utica Shale. Using fair value methods allowed by GAAP, the Partnership derived a preliminary fair value estimate for the disposed assets and then determined the appropriate gain recognition amount for each disposal to include in its unaudited condensed consolidated financial statements. The estimated fair values were determined utilizing a discounted cash flow technique based on estimated revenues, costs, capital expenditures and an appropriate discount rate. Given the unobservable nature of the inputs, the fair value measurement is deemed to use Level 3 inputs. These fair value estimates are preliminary, and subject to change and such changes could be material. Based on these preliminary fair values, the Partnership recognized a gain on the disposition of the Utica midstream business of $86.2 million, which is recorded within gain on sale of business in the unaudited condensed consolidated statements of operations, and a gain of $126.3 million related to the disposition of Ohio Gathering, which is recorded within gain on sale of equity method investment in the unaudited condensed consolidated statements of operations.

4. REVENUE

The following table presents estimated revenue expected to be recognized during the remainder of 2024 and over the remaining contract period related to performance obligations that are unsatisfied and are comprised of estimated MVC shortfall payments.


(In thousands)	2024		2025		2026		2027		2028		Thereafter

Gathering services and related fees	$	48,833	$	45,594	$	29,292	$	7,685	$	5,137	$	—

Revenue by category. In the following tables, revenue is disaggregated by geographic area and major products and services. For more detailed information about reportable segments, see Note 15 – Segment Information.


	Three Months Ended March 31, 2024
	Gathering services and related fees		Natural gas, NGLs and condensate sales		Other revenues		Total
	(In thousands)
Reportable Segments:
Northeast	$	16,853	$	—	$	—	$	16,853
Rockies	16,516		47,970		4,108		68,594
Permian	—		—		910		910
Piceance	20,387		948		1,245		22,580
Barnett	8,229		174		1,457		9,860
Total reportable segments	61,985		49,092		7,720		118,797
Corporate and other	—		—		74		74
Total	$	61,985	$	49,092	$	7,794	$	118,871

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	Three Months Ended March 31, 2023
	Gathering services and related fees		Natural gas, NGLs and condensate sales		Other revenues		Total
	(In thousands)
Reportable Segments:
Northeast	$	12,755	$	—	$	—	$	12,755
Rockies	15,303		47,329		2,619		65,251
Permian	—		—		893		893
Piceance	19,119		1,641		1,426		22,186
Barnett	10,194		193		1,064		11,451
Total reportable segments	57,371		49,163		6,002		112,536
Corporate and other	—		—		(37)		(37)
Total	$	57,371	$	49,163	$	5,965	$	112,499

5. PROPERTY, PLANT AND EQUIPMENT

Details on the Partnership’s property, plant and equipment follow.


	March 31, 2024		December 31, 2023
	(In thousands)
Gathering and processing systems and related equipment	$	2,124,517	$	2,335,980
Construction in progress	41,888		56,064
Land and line fill	11,546		11,534
Other	64,319		65,029
Total	2,242,270		2,468,607
Less: accumulated depreciation	(794,827)		(770,022)
Property, plant and equipment, net	$	1,447,443	$	1,698,585

Depreciation expense and capitalized interest for the Partnership follow.


	Three Months Ended March 31,
	2024		2023
	(In thousands)
Depreciation expense	$	23,571	$	22,918
Capitalized interest	472		193

6. EQUITY METHOD INVESTMENTS

As of March 31, 2024, the Partnership has an equity method investment in Double E, the balance of which is included in the Investment in equity method investees caption on the unaudited condensed consolidated balance sheets. On March 22, 2024, in connection with the Utica Sale, the Partnership sold its investment in Ohio Gathering and recognized an estimated $126.3 million gain, which is recorded within Gain on sale of equity method investment within the unaudited condensed consolidated statements of operations. See Note 3 - Divestitures for additional information.

Details of the Partnership’s equity method investments follow.


	March 31, 2024		December 31, 2023
	(In thousands)
Double E	$	273,476	$	276,221
Ohio Gathering	—		210,213
Total	$	273,476	$	486,434

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7. DEFERRED REVENUE

Certain of the Partnership’s gathering and/or processing agreements provide for monthly or annual MVCs. The amount of the shortfall payment is based on the difference between the actual throughput volume shipped and/or processed for the applicable period and the MVC for the applicable period, multiplied by the applicable gathering or processing fee.

Many of the Partnership’s gas gathering agreements contain provisions that can reduce or delay the cash flows that it expects to receive from MVCs to the extent that a customer's actual throughput volumes are above or below its MVC for the applicable contracted measurement period.

The balances in deferred revenue as of March 31, 2024 and December 31, 2023 are primarily related to contributions in aid of construction which will be recognized as revenue over the life of the contract. An update of current deferred revenue follows.


	Total
	(In thousands)
Current deferred revenue, December 31, 2023	$	10,196
Add: additions	1,696
Less: revenue recognized and other	(2,993)
Current deferred revenue, March 31, 2024	$	8,899

An update of noncurrent deferred revenue follows.


	Total
	(In thousands)
Noncurrent deferred revenue, December 31, 2023	$	30,085
Add: additions	563
Less: reclassification to current deferred revenue and other	(1,887)
Noncurrent deferred revenue, March 31, 2024	$	28,761

8. DEBT

Debt for the Partnership at March 31, 2024 and December 31, 2023, follows:


	March 31, 2024		December 31, 2023
	(In thousands)
ABL Facility: Summit Holdings' asset based credit facility due May 1, 2026	$	—	$	313,000

Permian Transmission Term Loan: Summit Permian Transmission's variable rate senior secured term loan due January 2028	141,052		144,846
2026 Unsecured Notes: 12.00% senior unsecured notes due October 15, 2026	209,510		209,510
2025 Senior Notes: 5.75% senior unsecured notes due April 15, 2025	49,783		49,783
2026 Secured Notes: 8.50% senior second lien notes due October 15, 2026	785,000		785,000
Less: unamortized debt discount and debt issuance costs	(28,960)		(31,449)
Total debt, net of unamortized debt discount and debt issuance costs	1,156,385		1,470,690
Less: current portion of Permian Transmission Term Loan and 2026 Secured Notes tender	(29,098)		(15,524)
Total long-term debt	$	1,127,287	$	1,455,166

ABL Facility. On November 2, 2021, the Partnership, the Partnership’s subsidiary, Summit Holdings, and the subsidiaries of Summit Holdings party thereto entered into a first-lien, senior secured credit facility, consisting of a $400.0 million asset-based revolving credit facility (the “ABL Facility”), subject to a borrowing base comprised of a percentage of eligible accounts receivable of Summit Holdings and its subsidiaries that guarantee the ABL Facility (collectively, the “ABL Facility Subsidiary Guarantors”) and a percentage of eligible above-ground fixed assets including eligible compression units, processing plants, compression stations and related equipment of Summit Holdings and the ABL Facility Subsidiary Guarantors. As of March 31, 2024, the most recent borrowing base determination of eligible assets totaled $683.6 million, an amount greater than the $400.0 million of aggregate lending commitments.

The ABL Facility will mature on May 1, 2026; provided that if the outstanding amount of the 2025 Senior Notes (or any permitted refinancing indebtedness in respect thereof that has a final maturity, scheduled amortization or any other scheduled

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repayment, mandatory prepayment, mandatory redemption or sinking fund obligation prior to the date that is 120 days after the Termination Date (as defined in the ABL Agreement)) on such date equals or exceeds $50.0 million, then the ABL Facility will mature on December 13, 2024. As of March 31, 2024, the outstanding balance of the 2025 Senior Notes was $49.8 million.

As of March 31, 2024, the applicable margin under the adjusted SOFR borrowings was 3.25%, the interest rate was 8.69% and the available borrowing capacity of the ABL Facility totaled $383.7 million after giving effect to the issuance of $4.3 million in outstanding but undrawn irrevocable standby letters of credit and $12.0 million of commitment reserves.

In connection with the closing of the Utica Sale, the ABL Facility was amended to, among other things, (i) permit the Utica Sale, (ii) amend the change of control provision to permit certain structural changes in connection with a conversion to a C-corporation and (iii) amend the Interest Coverage Ratio (as defined in the ABL Agreement) covenant such that the Interest Coverage Ratio as of the last day of any fiscal quarter must be less than (a) for any fiscal quarter ending on or before December 31, 2024, (x) if no loans under the Credit Agreement are outstanding and unrestricted cash exceeds $200.0 million, 1.50:1.00 and (y) if any loans under the Credit Agreement are outstanding or unrestricted cash is less than such threshold, 1.75:1.00 and (b) thereafter, 1.90:1.00.

The ABL Facility also requires that Summit Holdings not permit the First Lien Net Leverage Ratio (as defined in the ABL Agreement) as of the last day of any fiscal quarter to be greater than 2.50:1.00. As of March 31, 2024, the First Lien Net Leverage Ratio was -0.26:1.00 and the Interest Coverage Ratio was 1.87:1.00. As of March 31, 2024, the Partnership was in compliance with the financial covenants of the ABL Facility.

A portion of the proceeds from the Utica Sale were used to repay all amounts outstanding under the ABL Facility. As of March 31, 2024, there were no amounts outstanding under the ABL Facility.

Permian Transmission Credit Facilities. On March 8, 2021, the Partnership’s unrestricted subsidiary, Summit Permian Transmission, entered into a Credit Agreement which allows for $175.0 million of senior secured credit facilities (the “Permian Transmission Credit Facilities”), including a $160.0 million Term Loan Facility and a $15.0 million working capital facility. The Permian Transmission Credit Facilities can be used to finance Summit Permian Transmission’s capital calls associated with its investment in Double E, debt service and other general corporate purposes. Unexpended proceeds from draws on the Permian Transmission Credit Facilities are classified as restricted cash on the accompanying unaudited condensed consolidated balance sheets.

As of March 31, 2024, the applicable margin under adjusted term SOFR borrowings was 2.475%, the average interest rate was 7.79% and the unused portion of the Permian Transmission Credit Facilities totaled $4.5 million, subject to a commitment fee of 0.7% after giving effect to the issuance of $10.5 million in outstanding but undrawn irrevocable standby letters of credit. Summit Permian Transmission, LLC entered into interest rate hedges with notional amounts representing approximately 90% of the Permian Term Loan facility at a fixed SOFR rate of 1.23%. As of March 31, 2024, the Partnership was in compliance with the financial covenants of the Permian Transmission Credit Facilities.

Permian Transmission Term Loan. In accordance with the terms of the Permian Transmission Credit Facilities, in January 2022, the Permian Term Loan Facility was converted into a Term Loan (the “Permian Transmission Term Loan”). The Permian Transmission Term Loan is due January 2028. As of March 31, 2024, the applicable margin under adjusted term SOFR borrowings was 2.475% and the average interest rate was 7.79%. As of March 31, 2024, the Partnership was in compliance with the financial covenants governing the Permian Transmission Term Loan.

In accordance with the terms of the Permian Transmission Term Loan, Summit Permian Transmission is required to make mandatory principal repayments. Below is a summary of the remaining mandatory principal repayments as of March 31, 2024:


(In thousands)	Total		2024		2025		2026		2027		2028
Amortizing principal repayments	$	141,052	$	11,730	$	16,580	$	16,967	$	17,769	$	78,006

2026 Secured Notes. In 2021, the Co-Issuers issued $700.0 million of 8.500% Senior Secured Second Lien Notes due 2026 to eligible purchasers pursuant to Rule 144A and Regulation S of the Securities Act, at a price of 98.5% of their face value. Additionally, in November 2022, in connection with the 2022 DJ Acquisitions, the Co-Issuers issued an additional $85.0 million of 2026 Secured Notes at a price of 99.26% of their face value. The 2026 Secured Notes will pay interest semi-annually on April 15 and October 15 of each year, commencing on April 15, 2022 and are jointly and severally guaranteed, on a senior second-priority secured basis (subject to permitted liens), by the Partnership and each restricted subsidiary of the Partnership (other than the Co-Issuers) that is an obligor under the ABL Agreement, or under the Co-Issuers’ 2025 Senior Notes on the issue date of the 2026 Secured Notes.

The 2026 Secured Notes are effectively subordinated to any of our or the guarantors’ current and future secured first lien indebtedness, including indebtedness incurred under the ABL Facility, to the extent of the value of the collateral securing such

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indebtedness, and our and the guarantors’ current and future debt that is secured by liens on assets other than the collateral, to the extent of the value of such assets. The 2026 Secured Notes are structurally subordinated to all indebtedness and other liabilities of our subsidiaries that do not guarantee the 2026 Secured Notes. The 2026 Secured Notes are effectively equal to our and the guarantors’ obligations under any future second lien indebtedness and effectively senior to all of our future junior lien indebtedness and existing and future unsecured indebtedness, including our outstanding senior unsecured notes, to the extent of the value of the collateral, and senior to any of our future subordinated indebtedness. The 2026 Secured Notes will mature on October 15, 2026.

At any time prior to October 15, 2023, the Co-Issuers could have on any one or more occasions redeemed up to 35% of the aggregate principal amount of the 2026 Secured Notes (including any additional notes) issued under the 2026 Secured Notes Indenture at a redemption price of 108.5% of the principal amount of the 2026 Secured Notes, plus accrued and unpaid interest, if any, to, but not including the redemption date, in an amount not greater than the net cash proceeds of certain equity offerings by the Partnership, provided that: (i) at least 65% of the initial aggregate principal amount of the 2026 Secured Notes (including any additional notes) remains outstanding immediately after the occurrence of such redemption (excluding notes held by the Partnership and its subsidiaries); and (ii) the redemption occurs within 180 days of the date of the closing of each such equity offering by the Partnership. On and after October 15, 2023, the Co-Issuers may redeem all or part of the 2026 Secured Notes at redemption prices (expressed as percentages of principal amount) equal to: (a) 104.250% for the twelve-month period beginning October 15, 2023; (b) 102.125% for the twelve-month period beginning October 15, 2024; and (c) 100.000% for the twelve-month period beginning on October 15, 2025 and at any time thereafter, in each case plus accrued and unpaid interest, if any, to, but not including the redemption date. As of March 31, 2024, the Partnership was in compliance with the financial covenants governing its 2026 Secured Notes.

Starting in the first quarter of 2023 with respect to the fiscal year ended 2022, and continuing annually through the fiscal year ended 2025, the Partnership is required under the terms of the 2026 Secured Notes Indenture to, if it has Excess Cash Flow (as defined in the 2026 Secured Notes Indenture), and subject to its ability to make such an offer under the ABL Facility, offer to purchase an amount of the 2026 Secured Notes, at 100% of the principal amount plus accrued and unpaid interest, equal to 100% of the Excess Cash Flow generated in the prior year. Excess Cash Flow is generally defined as consolidated cash flow minus the sum of capital expenditures and cash payments in respect of permitted investments and permitted restricted payments.

Generally, if the Partnership does not offer to purchase designated annual amounts of its 2026 Secured Notes or reduce its first lien capacity under the 2026 Secured Notes Indenture per annum from 2023 through 2025, the interest rate on the 2026 Secured Notes is subject to certain rate escalations. Per the terms of the 2026 Secured Notes Indenture, the designated amounts are to offer to purchase $50.0 million aggregate principal amount of the 2026 Secured Notes by April 1, 2023, otherwise the interest rate shall automatically increase by 50 basis points per annum; $100.0 million aggregate principal amount of the 2026 Secured Notes by April 1, 2024, otherwise the interest rate shall automatically increase by 100 basis points per annum (minus any amount previously increased); and $200.0 million aggregate principal amount of the 2026 Secured Notes by April 1, 2025, otherwise the interest rate shall automatically increase by 200 basis points per annum (minus any amount previously increased).

Based on the amount of our Excess Cash Flow for the fiscal year ended 2023, on March 27, 2024, the Partnership commenced a cash tender offer to purchase up to $19.3 million aggregate principal amount of the outstanding 2026 Secured Notes at 100% of the principal amount plus accrued and unpaid interest. The cash flow offer expired on April 24, 2024 with $13.6 million tendered and validly accepted. Accordingly, $13.6 million of the 2026 Secured Notes is reflected as current debt in the March 31, 2024 unaudited condensed consolidated balance sheet.

As of April 1, 2024, the Partnership had not made offers to purchase in the required amount of $100.0 million and the interest rate on the 2026 Secured Notes increased an incremental 50 basis points to 9.50% effective on such date.

To the extent the Partnership makes an offer to purchase, and the offer is not fully accepted by the holders of the 2026 Secured Notes, the Partnership may use any remaining amount not accepted for any purpose not prohibited by the 2026 Secured Notes Indenture or the ABL Facility.

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2026 Unsecured Notes. In November 2023, the Co-Issuers issued a total of $209.5 million aggregate principal amount of 2026 Unsecured Notes in exchange for $180.0 million aggregate principal amount of the 2025 Senior Notes and $29.5 million in cash. The cash raised was used to repurchase $29.7 million aggregate principal amount of the remaining 2025 Senior Notes that were not exchanged. The Partnership pays interest on the 2026 Unsecured Notes semi-annually in cash in arrears on April 15 and October 15 of each year. The 2026 Unsecured Notes are senior, unsecured obligations and rank equally in right of payment with all of the Partnership’s existing and future senior obligations. The 2026 Unsecured Notes are effectively subordinated in right of payment to all of the Partnership’s secured indebtedness, to the extent of the collateral securing such indebtedness.

The Co-Issuers have the right to redeem all or part of the 2026 Unsecured Notes at a redemption price of (a) on or before April 15, 2025, 101.000%, and (b) after April 15, 2025, 102.000%, plus accrued and unpaid interest, if any, to, but not including the redemption date.

As March 31, 2024, the Partnership was in compliance with the financial covenants of the 2026 Unsecured Notes. The 2026 Unsecured Notes will mature on October 15, 2026.

2025 Senior Notes. In February 2017, the Co-Issuers co-issued the 2025 Senior Notes. The Partnership pays interest on the 2025 Senior Notes semi-annually in cash in arrears on April 15 and October 15 of each year. The 2025 Senior Notes are senior, unsecured obligations and rank equally in right of payment with all of the Partnership’s existing and future senior obligations. The 2025 Senior Notes are effectively subordinated in right of payment to all of the Partnership’s secured indebtedness, to the extent of the collateral securing such indebtedness.

The Co-Issuers have the right to redeem all or part of the 2025 Senior Notes at a redemption price of 100.00%, plus accrued and unpaid interest, if any, to, but not including the redemption date.

As discussed above, in November, 2023, the Partnership exchanged $180.0 million aggregate principal amount of the 2025 Senior Notes and repurchased $29.7 million aggregate principal amount of the remaining 2025 Senior Notes that were not exchanged.

As of March 31, 2024, the Partnership was in compliance with the financial covenants of the 2025 Senior Notes. The 2025 Senior Notes will mature on April 15, 2025.

9. FINANCIAL INSTRUMENTS

Fair Value. A summary of the estimated fair value of our debt financial instruments follows.


	March 31, 2024				December 31, 2023
	Carrying Value (1)		Estimated fair value (Level 2)		Carrying Value (1)		Estimated fair value (Level 2)
	(In thousands)

2025 Senior Notes	$	49,783	$	49,016	$	49,783	$	48,414
2026 Secured Notes	$	785,000	$	794,485	$	785,000	$	778,131
2026 Unsecured Notes	$	209,510	$	211,605	$	209,510	$	203,225

________

(1) Excludes applicable unamortized debt issuance costs and debt discounts.

The carrying values on the balance sheets of the ABL Facility and Permian Transmission Term Loan represent their fair value due to their floating interest rates. The fair values of the 2026 Unsecured Notes, 2026 Secured Notes and 2025 Senior Notes are based on an average of nonbinding broker quotes as of March 31, 2024 and December 31, 2023. The use of different market assumptions or valuation methodologies may have a material effect on their estimated fair value of the Senior Notes.

Deferred earn-out. The Partnership’s deferred earn-out liability is remeasured each reporting period. As of March 31, 2024 and December 31, 2023, the estimated fair value of the deferred earn-out liability was $4.9 million and $5.1 million, respectively, and was estimated using a discounted cash flow technique based on estimated future freshwater deliveries and appropriate discount rates. Given the unobservable nature of the inputs, the fair value measurement of the deferred earn-out is deemed to use Level 3 inputs. The deferred earn-out sits within Centennial Water Pipelines LLC, one of the Partnership’s unrestricted subsidiaries.

Interest Rate Swaps. In connection with the Permian Transmission Term Loan, the Partnership entered into amortizing interest rate swap agreements. As of March 31, 2024 and December 31, 2023, the outstanding notional amounts of interest rate swaps were $126.9 million and $130.4 million, respectively. These interest rate swaps manage exposure to variability in expected cash flows attributable to interest rate risk. Interest rate swaps convert a portion of the Partnership’s variable rate debt to fixed rate debt. The Partnership chooses counterparties for its derivative instruments that it believes are creditworthy at the time the

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transactions are entered into, and the Partnership actively monitors the creditworthiness where applicable. However, there can be no assurance that a counterparty will be able to meet its obligations to the Partnership. The Partnership presents its derivative positions on a gross basis and does not net the asset and liability positions.

As of March 31, 2024 and December 31, 2023, the Partnership’s interest rate swap agreements had a fair value of $13.2 million and $11.9 million, respectively, and are recorded within other noncurrent assets within the unaudited condensed consolidated balance sheets. The derivative instruments’ fair value are determined using level 2 inputs from the fair value hierarchy. For the three months ended March 31, 2024 and 2023, the Partnership recorded a gain on interest rate swaps of $2.6 million and a loss on interest rate swaps of $1.3 million, respectively.

10. PARTNERS' CAPITAL AND MEZZANINE CAPITAL

Common Units. An update on the number of common units is as follows for the period from December 31, 2023 to March 31, 2024.


			Common Units
Units, December 31, 2023			10,376,189

Common units issued for SMLP LTIP, net			272,496
Units, March 31, 2024			10,648,685

Series A Preferred Units. As of March 31, 2024, the Partnership had 65,508 Series A Preferred Units outstanding and $36.3 million of accrued and unpaid distributions on its Series A Preferred Units.

Subsidiary Series A Preferred Units. The Partnership records its Subsidiary Series A Preferred Units at fair value upon issuance, net of issuance costs, and subsequently records an effective interest method accretion amount each reporting period to accrete the carrying value to a most probable redemption value that is based on a predetermined internal rate of return measure. The Partnership also elected to make PIK distributions to holders of the Subsidiary Series A Preferred Units during portions of the year ended December 31, 2022, which increase the liquidation preference on each Subsidiary Series A Preferred Unit. Ultimately, Net income (loss) attributable to common limited partners includes adjustments for PIK distributions and redemption accretion.

As of March 31, 2024, the Partnership had 93,039 Subsidiary Series A Preferred Units issued and outstanding.

If the Subsidiary Series A Preferred Units were redeemed on March 31, 2024, the redemption amount would be $127.1 million when considering the applicable multiple of invested capital metric and make-whole amount provisions contained in the Amended and Restated Limited Liability Company Agreement of Permian Holdco.

The following table shows the change in the Partnership’s Subsidiary Series A Preferred Unit balance from January 1, 2024 to March 31, 2024, net of $1.6 million and $1.7 million of unamortized issuance costs at March 31, 2024 and December 31, 2023, respectively:


	(In thousands)
Balance at December 31, 2023	$	124,652
Redemption accretion, net of issuance cost amortization	3,770
Cash distribution (includes a $1.6 million distribution payable as of March 31, 2024)	(1,628)
Balance at March 31, 2024	$	126,794

Cash Distribution Policy. The Partnership suspended its cash distributions to holders of its common units and Series A Preferred Units, commencing with respect to the quarter ended March 31, 2020. Upon the resumption of distributions, the Partnership Agreement requires that it distribute all available cash, subject to reserves established by its General Partner, within 45 days after the end of each quarter to unitholders of record on the applicable record date. The amount of distributions paid under this policy is subject to fluctuations based on the amount of cash the Partnership generates from its business and the decision to make any distribution is determined by the General Partner, taking into consideration the terms of the Partnership Agreement. There were no distributions paid during the three months ended March 31, 2024 or during the twelve months ended December 31, 2023.

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11. EARNINGS PER UNIT

The following table details the components of EPU.


	Three Months Ended March 31,
		2024		2023
		(In thousands, except per-unit amounts)
Numerator for basic and diluted EPU:
Allocation of net loss among limited partner interests:
Net income (loss)		$	132,927	$	(14,163)
Less: Net income attributable to Subsidiary Series A Preferred Units		(3,770)		(1,746)
Net income (loss) attributable to Summit Midstream Partners, LP		$	129,157	(15,909)

Less: Net income attributable to Series A Preferred Units		$	(3,220)	(2,639)


Net income (loss) attributable to common limited partners		$	125,937	$	(18,548)

Denominator for basic and diluted EPU:
Weighted-average common units outstanding – basic		10,449		10,213
Effect of nonvested phantom units		531		—
Weighted-average common units outstanding – diluted		10,980		10,213

Net income (loss) per limited partner unit:
Common unit – basic		$	12.05	$	(1.82)
Common unit – diluted		$	11.47	$	(1.82)

Nonvested anti-dilutive phantom units excluded from the calculation of diluted EPU		38		285

12. SUPPLEMENTAL CASH FLOW INFORMATION


	Three Months Ended March 31,
	2024		2023
	(In thousands)
Supplemental cash flow information:
Cash interest paid	$	9,210	$	9,420


Noncash investing and financing activities:
Capital expenditures in trade accounts payable (period-end accruals)	$	6,183	$	8,735
Accretion of Subsidiary Series A Preferred Units, net of issuance cost amortization	$	3,770	$	1,746

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13. UNIT-BASED AND NONCASH COMPENSATION

SMLP Long-Term Incentive Plan. The Partnership’s Long-Term Incentive Plan (“SMLP LTIP”) provides for equity awards to eligible officers, employees, consultants and directors of the Partnership, thereby linking the recipients’ compensation directly to SMLP’s performance. Significant items to note:

•For the three-month period ended March 31, 2024, the Partnership granted 230,815 time-based phantom units and associated distribution equivalent rights to employees in connection with the Partnership’s annual incentive compensation award cycle. The grant date fair value of these awards totaled $3.7 million and the awards vest ratably over a 3-year period.

•For the three-month period ended March 31, 2024, the Partnership granted 122,867 performance-based phantom units and associated distribution equivalent rights to certain members of management in connection with the Partnership’s annual incentive compensation award cycle. The grant date fair value of these awards totaled $2.4 million and the awards vest at the end of three years.

•For the three-month period ended March 31, 2024, the Partnership issued 39,486 common units to the Partnership’s six independent directors in connection with their annual compensation plan. The grant date fair value of these awards totaled $0.6 million and became fully vested at the grant date.

•As of March 31, 2024, approximately 0.1 million common units remained available for future issuance under the SMLP LTIP, which includes the impact of 0.7 million granted but unvested phantom units.

14. COMMITMENTS AND CONTINGENCIES

Environmental Matters. Although the Partnership believes that it is in material compliance with applicable environmental regulations, the risk of environmental remediation costs and liabilities are inherent in pipeline ownership and operation. Furthermore, the Partnership can provide no assurances that significant environmental remediation costs and liabilities will not be incurred in the future. The Partnership is currently not aware of any material contingent liabilities that exist with respect to environmental matters, except as noted below.

As of March 31, 2024, the Partnership has recognized (i) a current liability for remediation effort expenditures expected to be incurred within the next 12 months and (ii) a noncurrent liability for estimated remediation expenditures expected to be incurred subsequent to March 31, 2025. Each of these amounts represent the Partnership’s best estimate for costs expected to be incurred. Neither of these amounts have been discounted to their present value.

An update of the Partnership’s undiscounted accrued environmental remediation is as follows and is primarily related to the 2015 Blacktail Release and other environmental remediation activities, as detailed below.


	(In thousands)
Accrued environmental remediation, December 31, 2023	$	2,937
Payments made	(226)
Changes in estimates	421
Accrued environmental remediation, March 31, 2024	$	3,132

In 2015, the Partnership learned of the rupture of a four-inch produced water gathering pipeline on the Meadowlark Midstream system near Williston, North Dakota (“2015 Blacktail Release”). On August 4, 2021, subsidiaries of the Partnership entered into the following agreements to resolve the U.S. federal and North Dakota state governments’ environmental claims with respect to the 2015 Blacktail Release: (i) a Consent Decree with the U.S. Department of Justice (“DOJ”), the U.S. Environmental Protection Agency (“EPA”), and the State of North Dakota (“Consent Decree”); (ii) a Plea Agreement with the United States (“Plea Agreement”); and (iii) a Consent Agreement with the North Dakota Industrial Commission (“Consent Agreement” together with the Consent Decree and Plea Agreement, the “Global Settlement”). As of March 31, 2024 and December 31, 2023, the accrued loss liability for the 2015 Blacktail Release was $21.7 million and are recorded within Other noncurrent liabilities and Accrued settlement payable within the unaudited condensed consolidated balance sheets.

Key terms of the Global Settlement included (i) payment of penalties and fines totaling $36.3 million, consisting of $1.25 million in natural resource damages payable to federal and state governments, a $25.0 million payable to the federal government over 5 years, and a $10.0 million payable to state governments over, for the federal and state civil amounts, six years and, for the federal criminal amounts, five years, with interest applied to unpaid amounts accruing at, for the federal and state civil amounts, a fixed rate of 3.25% and, for the federal criminal amounts, a variable rate set by statute, and of which $6.7 million is expected to be paid within the next twelve months; (ii) continuation of remediation efforts at the site of the 2015 Blacktail Release; (iii) other injunctive relief including but not limited to control room management, environmental management system audit, training, and reporting; (iv) guilty pleas by Defendant subsidiary for (a) one charge of negligent

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discharge of a harmful quantity of oil and (b) one charge of knowing failure to immediately report a discharge of oil; and (v) organizational probation for a minimum period of three years from sentencing on December 6, 2021, including payment in full of certain components of the fines and penalty amounts. The agreements comprising the Global Settlement were subject to the approval of the U.S. District Court for the District of North Dakota (the “U.S. District Court”). The U.S. District Court entered an order making the civil components of the Global Settlement effective on September 28, 2021 and accepted the sentencing in the Plea Agreement on December 6, 2021, completing approval of the Global Settlement.

Subsidiaries of the Partnership are also participating in two proceedings before the EPA as a result of the Plea Agreement becoming effective. Following the U.S. District Court’s entering judgment on Defendant subsidiary’s guilty plea to one count of negligent discharge of produced water in violation of the Clean Water Act, Defendant subsidiary was statutorily debarred by operation of law pursuant to 33 U.S.C. § 1368(a) to participate in federal awards performed at the “violating facility,” which EPA determined to be the Marmon subsystem of the produced water gathering system in North Dakota. The scope and effect of the debarment as defined do not materially affect our operations. Defendant has submitted a petition for reinstatement, which was denied by the EPA’s suspension and debarment office (“SDO”) on July 11, 2022. The SDO determined that the term of probation in the Plea Agreement was the appropriate period of time to demonstrate Defendant subsidiary’s change of corporate attitude, policies, practices, and procedures. The Partnership and certain subsidiaries have also received a show cause notice from the EPA requesting us to “show cause” why SDO should not issue a Notice of Proposed Debarment to the Defendant subsidiary and certain affiliates under 2 C.F.R. § 180.800(d), to which the Partnership has responded, and in which proceeding no further developments have occurred.

Legal Proceedings. The Partnership is involved in various litigation and administrative proceedings arising in the ordinary course of business. In the opinion of management, any liabilities, which include insured claims, would not individually or in the aggregate have a material adverse effect on the Partnership's financial position or results of operations.

15. SEGMENT INFORMATION

As of March 31, 2024, the Partnership’s reportable segments are:

•Rockies – Includes the Partnership’s wholly owned midstream assets located in the Williston Basin and the DJ Basin.

•Permian – Includes the Partnership’s equity method investment in Double E.

•Northeast – Includes the Partnership’s wholly owned midstream assets located in the Marcellus shale play and its wholly owned midstream assets located in the Utica shale play together with its equity method investment in Ohio Gathering that is focused on the Utica Shale. For additional information regarding the Utica Sale, see Note 3 - Divestitures regarding the disposition of Northeast assets.

•Piceance – Includes the Partnership’s wholly owned midstream assets located in the Piceance Basin.

•Barnett – Includes the Partnership’s wholly owned midstream assets located in the Barnett Shale.

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Corporate and Other represents those results that: (i) are not specifically attributable to a reportable segment; (ii) are not individually reportable; or (iii) have not been allocated to our reportable segments, including certain general and administrative expense items, transaction costs, acquisition integration costs and interest expense.

Assets by reportable segment follow.


	March 31, 2024		December 31, 2023
	(In thousands)
Assets:
Rockies	$	906,854	$	904,974
Permian	290,168		291,073
Northeast	80,460		573,663
Piceance	419,773		431,687
Barnett	276,378		281,861
Total reportable segment assets	1,973,633		2,483,258
Corporate and Other	346,942		10,940
Total assets	$	2,320,575	$	2,494,198

Segment adjusted EBITDA by reportable segment follows.


	Three Months Ended March 31,
		2024		2023
		(In thousands)
Reportable segment adjusted EBITDA
Rockies		$	22,874	$	23,130
Permian		7,265		5,073
Northeast		29,021		17,854
Piceance		15,233		13,983
Barnett		5,100		7,027
Total of reportable segments' measures of profit		$	79,493	$	67,067

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A reconciliation of income or loss before income taxes and income from equity method investees to total of reportable segments' measures of profit follows.


	Three Months Ended March 31,
			2024		2023
		(In thousands)
Reconciliation of loss before income taxes and income from equity method
investees to total of reportable segments' measures of profit:
Income (loss) before income taxes and income from equity method investees			$	122,499	$	(19,324)
Add:
Corporate and Other expense			15,096		9,796
Interest expense			37,846		34,223
Depreciation and amortization (1)			28,102		30,059
Proportional adjusted EBITDA for equity method investees			20,675		11,638
Adjustments related to capital reimbursement activity			(2,923)		(1,186)
Unit-based and noncash compensation			2,772		1,929
Gain on asset sales, net			(27)		(68)
Gain on sale of business			(86,202)		—
Gain on sale of equity method investment			(126,261)		—
Long-lived asset impairment			67,916		—
Total of reportable segments' measures of profit			$	79,493	$	67,067

________

(1) Includes the amortization expense associated with our favorable gas gathering contracts as reported in other revenues.

(2) The Partnership records financial results of its investment in Ohio Gathering on a one-month lag and is based on the financial information available to us during the reporting period. With the divestiture of Ohio Gathering in March 2024, proportional adjusted EBITDA includes financial results from December 1, 2023 through March 22, 2024.

16. SUBSEQUENT EVENTS

Mountaineer Midstream. On May 1, 2024, the Partnership completed the sale of its Mountaineer Midstream system, to Antero Midstream LLC for a cash sale price of $70 million, subject to customary post-closing adjustments (the “Mountaineer Transaction”). Mountaineer Midstream is the owner of midstream assets located in the Marcellus Shale. Prior to closing the Mountaineer Transaction, the Partnership sold related compression assets located in the Marcellus Shale to a compression service provider for approximately $5 million in April 2024.

During the three months ended March 31, 2024, the Partnership recognized an impairment of $68 million, in connection with the Mountaineer Transaction and the sale of compression assets, based on total cash proceeds of approximately $75 million and net assets of approximately $143 million.

Cash Tender. As discussed in Note 8 - Debt, on March 27, 2024, the Partnership commenced a cash tender offer to purchase up to $19.3 million aggregate principal amount of the outstanding 2026 Secured Notes at 100% of the principal amount plus accrued and unpaid interest. The cash flow offer expired on April 24, 2024 with $13.6 million tendered and validly accepted. Accordingly, $13.6 million of the 2026 Secured Notes is reflected as current debt in the March 31, 2024 unaudited condensed consolidated balance sheet.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to inform the reader about matters affecting the financial condition and results of operations of the Partnership and its subsidiaries for the periods since December 31, 2023. As a result, the following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included in this report and the MD&A and the audited consolidated financial statements and related notes that are included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Annual Report”). Among other things, those financial statements and the related notes include more detailed information regarding the basis of presentation for the following information. This discussion contains forward-looking statements that constitute our plans, estimates and beliefs. These forward-looking statements involve numerous risks and uncertainties, including, but not limited to, those discussed in Forward-Looking Statements. Actual results may differ materially from those contained in any forward-looking statements.

Overview

We are a value-driven limited partnership focused on developing, owning and operating midstream energy infrastructure assets that are strategically located in unconventional resource basins, primarily shale formations, in the continental United States.

Our financial results are driven primarily by volume throughput across our gathering systems and by expense management. We generate the majority of our revenues from the gathering, compression, treating and processing services that we provide to our customers. A majority of the volumes that we gather, compress, treat and/or process have a fixed-fee rate structure which enhances the stability of our cash flows by providing a revenue stream that is not subject to direct commodity price risk. We also earn a portion of our revenues from the following activities that directly expose us to fluctuations in commodity prices: (i) the sale of physical natural gas and/or NGLs purchased under percentage-of-proceeds or other processing arrangements with certain of our customers in the Rockies and Piceance segments, (ii) the sale of natural gas we retain from certain Barnett segment customers, (iii) the sale of condensate we retain from our gathering services in the Rockies and Piceance segment and (iv) additional gathering fees that are tied to the performance of certain commodity price indexes which are then added to the fixed gathering rates.

We also have indirect exposure to changes in commodity prices such that persistently low commodity prices may cause our customers to delay and/or cancel drilling and/or completion activities or temporarily shut-in production, which would reduce the volumes of natural gas and crude oil (and associated volumes of produced water) that we gather. If certain of our customers cancel or delay drilling and/or completion activities or temporarily shut-in production, the associated MVCs, if any, ensure that we will earn a minimum amount of revenue.

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The following table presents certain consolidated and reportable segment financial data. For additional information on our reportable segments, see the "Segment Overview for the Three Months Ended March 31, 2024 and 2023" section included herein.


	Three Months Ended March 31,
		2024		2023
		(In thousands)
Net income (loss)		$	132,927	$	(14,163)
Reportable segment adjusted EBITDA
Northeast		$	29,021	$	17,854
Rockies		22,874		23,130
Permian		7,265		5,073
Piceance		15,233		13,983
Barnett		5,100		7,027

Net cash provided by operating activities		$	43,616	$	49,695
Capital expenditures (1)		16,398		16,438
Proceeds from sale of business		292,266		—
Proceeds from sale of equity method investment		332,734		—
Investment in Double E equity method investee		—		3,500
Repayments on ABL Facility		(313,000)		(13,000)

Repayments on Permian Transmission Term Loan		(3,794)		(2,519)

________

(1)See "Liquidity and Capital Resources" herein to the unaudited condensed consolidated financial statements for additional information on capital expenditures.

Trends and Outlook

Our business has been, and we expect our future business to continue to be, affected by the following key trends:

•Ongoing impact of political and economic conditions and events in foreign oil and natural gas producing countries on commodity prices, including the continued conflict in the Middle East, current Russia-Ukraine conflict, the international sanctions against Russia and other sustained military campaigns;

•Natural gas, NGL and crude oil supply and demand dynamics;

•Actions of the OPEC and its allies, including the ability and willingness of the members of OPEC and other exporting nations to agree to and maintain oil price and production controls;

•Production from U.S. shale plays;

•Capital markets availability and cost of capital; and

•Inflation and shifts in operating costs.

Our expectations are based on assumptions made by us and information currently available to us. To the extent our underlying assumptions about, or interpretations of, available information prove to be incorrect, our actual results may vary materially from our expected results. For additional information, see the "Trends and Outlook" section of MD&A included in the 2023 Annual Report.

Summit Utica Sale. As previously announced on March 22, 2024, we completed the Utica Sale for a cash sale price of $625.0 million, subject to customary post-closing adjustments. Summit Utica is the owner of (i) approximately 36% of the issued and outstanding equity interests in OGC, (ii) approximately 38% of the issued and outstanding equity interests in OCC, together with OGC, Ohio Gathering and (iii) midstream assets located in the Utica Shale. Ohio Gathering is the owner of a natural gas gathering system and condensate stabilization facility located in Belmont and Monroe counties in the Utica Shale in southeastern Ohio.

Mountaineer Transaction. On May 1, 2024, we completed the Mountaineer Transaction for a cash sale price of $70 million, subject to customary post-closing adjustments. Mountaineer Midstream is the owner of midstream assets located in the

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Marcellus Shale. Prior to closing the Mountaineer Transaction, we sold related compression assets located in the Marcellus Shale to a compression service provider for approximately $5 million in April 2024.

Conclusion of Strategic Alternatives Review. In connection with the announcement of the Utica Sale, we also announced the conclusion of the strategic alternative review process undertaken by our Board of Directors that was previously announced on October 3, 2023. While we have concluded our active process, we remain open to all potential value-enhancing transactions.

Capital structure optimization and portfolio management. We intend to continue to improve our capital structure in the future by reducing our indebtedness with free cash flow, and when appropriate, we may pursue opportunistic transactions with the objective of increasing long term unitholder value. This may include opportunistic acquisitions, divestitures (such as the Utica Sale in 2024), re-allocation of capital to new or existing areas, and development of joint ventures involving our existing midstream assets or new investment opportunities. We believe that our current cash balance, internally generated cash flow, our ABL Facility, the Permian Credit Facility, and access to debt (such as the additional 2026 Unsecured Notes) or equity will be adequate to finance our strategic initiatives. To attain our overall corporate strategic objectives, we may conduct an asset divestiture, or divestitures, at a transaction valuation that is less than the net book value of the divested asset.

Ongoing impact of political and economic conditions and events in foreign oil and natural gas producing countries on commodity prices. Although we operate solely in the United States, certain events and conditions in foreign oil and natural gas producing countries, such as the continued conflict in the Middle East, including the Hamas-Israel war and Russia’s invasion of Ukraine, could have potential effects on us, including, but not limited to, volatility in currencies and commodity prices, higher inflation, cost and supply chain pressures and availability and disruptions in banking systems and capital markets. As of the date of filing, there have been no material impacts to us.

Based on recently updated production forecasts and 2024 development plans from our customers, we currently expect that 2024 activity will be higher than 2023 and be at an activity level near our historical periods prior to COVID-19.

Impact of increases in interest rates. Increases in interest rates could adversely affect our future ability to obtain financing or materially increase the cost of existing and any additional financing. Since March 2022, the Federal Reserve has raised its target range for the federal funds rate multiple times to a current target range of 5.25% to 5.50%, and the timing of any potential further increases or decreases remains uncertain. As of March 31, 2024, we had approximately $1.0 billion principal of fixed-rate debt, nil outstanding under our variable rate ABL Facility and $141.1 million outstanding under the variable rate Permian Transmission Term Loan (see Note 8 - Debt). As of March 31, 2024, we had $126.9 million of interest rate exposure hedged to offset the impact of changes in interest rates on our Permian Transmission Term Loan.

C-Corporation conversion. In connection with the recently concluded strategic alternatives review, we evaluated various corporate structures to determine how to drive the greatest long-term value for unitholders. We believe converting to a C-Corp positions us to maximize value by optimizing long-term tax consequences to unitholders, enhancing trading liquidity, and expanding the universe of potential investors. We plan to seek approval from Summit unitholders to convert the Partnership to a C-Corp at a Special Meeting later this year. Summit will file a proxy statement to provide unitholders with additional information about the rationale and benefits of the C-Corp conversion in advance of the Special Meeting.

How We Evaluate Our Operations

We conduct and report our operations in the midstream energy industry through five reportable segments: Northeast, Rockies, Permian, Piceance and Barnett. Each of our reportable segments provides midstream services in a specific geographic area and our reportable segments reflect the way in which we internally report the financial information used to make decisions and allocate resources in connection with our operations. For additional information see Note 15 - Segment Information.

Our management uses a variety of financial and operational metrics to analyze our consolidated and segment performance. We view these metrics as important factors in evaluating our profitability. These metrics include:

•throughput volume;

•revenues;

•operation and maintenance expenses;

•capital expenditures; and

•segment adjusted EBITDA.

We review these metrics on a regular basis for consistency and trend analysis. There have been no changes in the composition or characteristics of these metrics during the three months ended March 31, 2024.

Additional Information. For additional information, see the "Results of Operations" section herein and the notes to the unaudited condensed consolidated financial statements. For additional information on how these metrics help us manage our

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business, see the "How We Evaluate Our Operations" section of MD&A included in the 2023 Annual Report. For information on impending accounting changes that are expected to materially impact our financial results reported in future periods, see Note 2 – Summary of Significant Accounting Policies and Recently Issued Accounting Standards Applicable to the Partnership.

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Results of Operations

Consolidated Overview for the Three Months Ended March 31, 2024 and 2023

The following table presents certain consolidated financial and operating data.


	Three Months Ended March 31,
		2024		2023
		(In thousands)
Revenues:
Gathering services and related fees		$	61,985	$	57,371
Natural gas, NGLs and condensate sales		49,092		49,163
Other revenues		7,794		5,965
Total revenues		118,871		112,499
Costs and expenses:
Cost of natural gas and NGLs		30,182		30,882
Operation and maintenance		25,012		23,972
General and administrative		14,785		9,987
Depreciation and amortization		27,867		29,824
Transaction costs		7,791		302
Acquisition integration costs		40		1,502
Gain on asset sales, net		(27)		(68)
Long-lived asset impairment		67,916		—
Total costs and expenses		173,566		96,401
Other income (expense), net		(13)		56
Gain (loss) on interest rate swaps		2,590		(1,273)
Gain on sale of business		86,202		18
Gain on sale of equity method investment		126,261		—
Interest expense		(37,846)		(34,223)

Income (loss) before income taxes and equity method investment income		122,499		(19,324)
Income tax (expense) benefit		(210)		252
Income from equity method investees		10,638		4,909
Net income (loss)		$	132,927	$	(14,163)

Volume throughput (1):
Aggregate average daily throughput - natural gas (MMcf/d)		1,327		1,185
Aggregate average daily throughput - liquids (Mbbl/d)		74		74

________

(1)Excludes volume throughput for Ohio Gathering and Double E. For additional information, see the Northeast and Permian sections herein under the caption “Segment Overview for the Three Months Ended March 31, 2024 and 2023”.

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Volumes – Gas. Natural gas throughput volumes increased 142 MMcf/d for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily reflecting:

•a volume throughput increase of 121 MMcf/d for the Northeast segment.

•a volume throughput increase of 25 MMcf/d for the Piceance segment.

•a volume throughput increase of 16 MMcf/d for the Rockies segment.

•a volume throughput decrease of 20 MMcf/d for the Barnett segment.

Volumes – Liquids. Crude oil and produced water throughput volumes at the Rockies segment remained consistent for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily as a result of 60 new well connections that came online subsequent to March 31, 2023, offset by natural production declines.

For additional information on volumes, see the "Segment Overview for the Three Months Ended March 31, 2024 and 2023" section herein.

Revenues. Total revenues increased $6.4 million during the three months ended March 31, 2024 compared to the three months ended March 31, 2023, comprised of a $4.6 million increase in gathering services and related fees, a $1.8 million increase in other revenue; offset by a $0.1 million decrease in natural gas, NGLs and condensate sales.

Gathering Services and Related Fees. Gathering services and related fees increased $4.6 million compared to the three months ended March 31, 2023, primarily reflecting:

•a $4.1 million increase in the Northeast, primarily due to increased volume throughput;

•a $1.3 million increase in the Piceance, primarily due to increased volume throughput;

•a $1.2 million increase in the Rockies, primarily due to increased volume throughput; offset by

•a $2.0 million decrease in the Barnett, primarily due to decreased volume throughput.

Natural Gas, NGLs and Condensate Sales. Natural gas, NGLs and condensate revenues decreased $0.1 million compared to the three months ended March 31, 2023.

Costs and Expenses. Total costs and expenses increased $77.2 million during the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

Cost of Natural Gas and NGLs. Cost of natural gas and NGLs decreased $0.7 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

Operation and Maintenance. Operation and maintenance expense increased $1.0 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

Acquisition Integration Costs. Acquisition integration costs in 2023 were primarily related to costs associated with the ongoing integration of the 2022 DJ Acquisitions.

Long-lived asset impairments. During the quarterly period ended March 31, 2024, we recognized an impairment charge of $67.9 million in connection with the Mountaineer Transaction.

Interest Expense. Interest expense increased $3.6 million for the three months ended March 31, 2024, compared to three months ended March 31, 2023, primarily due to $6.3 million of increased borrowing costs on the recently issued 2026 Unsecured Notes, partially offset by $3.0 million of reduced interest expense as a result of the exchange and repurchase of $209.7 million of the 2025 Senior Notes that occurred in November 2023.

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Segment Overview for the Three Months Ended March 31, 2024 and 2023

Northeast.

Volume throughput for the Northeast reportable segment follows.


		Northeast
	Three Months Ended March 31,
		2024	2023	Percentage Change
Average daily throughput (MMcf/d)		712	591	20%
Average daily throughput (MMcf/d) (Ohio Gathering)		849	636	33%

On March 22, 2024, we completed the disposition of Summit Utica. Summit Utica is also the owner of our equity method investment, Ohio Gathering.

Volume throughput for the Northeast, excluding Ohio Gathering, increased 20% compared to the three months ended March 31, 2023, primarily due to 29 well connections that came online subsequent to March 31, 2023, partially offset by natural production declines as well as the disposition of Summit Utica as discussed above.

Volume throughput for the Ohio Gathering system increased 33%, compared to the three months ended March 31, 2023, primarily as a result of 43 new well connections that came online subsequent to March 31, 2023, partially offset by natural production declines as well as the disposition of Summit Utica as discussed above, which owns an interest in the Ohio Gathering System.

Financial data for our Northeast reportable segment follows.


		Northeast
	Three Months Ended March 31,
		2024		2023		Percentage Change
	(In thousands)
Revenues:
Gathering services and related fees		$	16,853	$	12,755	32%
Total revenues		16,853		12,755		32%
Costs and expenses:
Operation and maintenance		1,893		2,085		(9%)
General and administrative		201		210		(4%)
Depreciation and amortization		4,248		4,453		(5)%

Long-lived asset impairment		67,916		—		*
Total costs and expenses		74,258		6,748		*
Add:
Depreciation and amortization		4,248		4,453
Adjustments related to capital reimbursement activity		(20)		(20)

Long-lived asset impairment		67,916		—
Proportional adjusted EBITDA for Ohio Gathering (1)		14,282		7,414		93%

Segment adjusted EBITDA		$	29,021	$	17,854	63%

* Not considered meaningful

(1)The Partnership records financial results of its investment in Ohio Gathering on a one-month lag based on financial information available to us during the reporting period. With the divestiture of Ohio Gathering in March 2024, proportional adjusted EBITDA includes financial results from December 1, 2023 through March 22, 2024 ($2.5 million for March 1, 2024 - March 22, 2024).

Three months ended March 31, 2024. Segment adjusted EBITDA increased $11.2 million, compared to the three months ended March 31, 2023 primarily as the result of an increase of $6.9 million, in proportional adjusted EBITDA from Ohio Gathering during the three months ended March 31, 2024, as well as an increase in gathering services and related fees. These results were partially offset by the disposition of Summit Utica on March 22, 2024.

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Rockies.

Volume throughput for our Rockies reportable segment follows.


		Rockies
	Three Months Ended March 31,
		2024	2023	Percentage Change
Aggregate average daily throughput - natural gas (MMcf/d)		124	108	15%
Aggregate average daily throughput - liquids (Mbbl/d)		74	74	*

Natural gas. Natural gas volume throughput increased 15% compared to the three months ended March 31, 2023, primarily reflecting 120 new well connections that came online subsequent to March 31, 2023, partially offset by winter related interruptions which occurred during the first quarter of 2024.

For the three months ended March 31, 2024 and 2023, costs of natural gas and NGLs includes $11.2 million and $10.9 million, respectively, of gathering fees collected under percentage of proceeds arrangements.

Liquids. Liquids volume throughput remained consistent compared to the three months ended March 31, 2023, primarily associated with 60 new well connections that came online subsequent to March 31, 2023 offset by natural production declines.

Financial data for our Rockies reportable segment follows.


		Rockies
	Three Months Ended March 31,
		2024		2023		Percentage Change
	(In thousands)
Revenues:
Gathering services and related fees		$	16,516	$	15,303	8%
Natural gas, NGLs and condensate sales		47,970		47,329		1%
Other revenues		4,108		2,619		57%
Total revenues		68,594		65,251		5%
Costs and expenses:
Cost of natural gas and NGLs		29,808		29,808		*
Operation and maintenance		13,012		12,069		8%
General and administrative		1,431		673		113%
Depreciation and amortization		8,945		8,378		7%
Integration costs		—		411		*
Gain on asset sales, net		(19)		(57)		(67%)

Total costs and expenses		53,177		51,282		4%
Add:
Depreciation and amortization		8,945		8,378
Integration costs		—		411
Adjustments related to capital reimbursement activity		(1,469)		404
Gain on asset sales, net		(19)		(57)

Other		—		25
Segment adjusted EBITDA		$	22,874	$	23,130	*

* Not considered meaningful

Three months ended March 31, 2024. Segment adjusted EBITDA remained consistent, compared to the three months ended March 31, 2023.

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Permian.

Volume throughput for our Permian reportable segment follows.


		Permian
	Three Months Ended March 31,
		2024	2023	Percentage Change
Average daily throughput (MMcf/d) (Double E)		467	264	77%

Volume throughput for Double E increased 77% compared to the three months ended March 31, 2023.

The following table presents the MVC quantities that Double E’s shippers have contracted to with firm transportation service agreements and related negotiated rate agreements. This table excludes two new firm transportation agreements executed during the fourth quarter of 2023 and first half of 2024 with large independent oil and gas exploration and production companies aggregating to 115,000 MMBTU/day. The firm transportation agreements contain 10 year contract terms and commence upon the completion of in service construction activities or other contractual start dates:


(Amounts in MMBTU/day)			Weighted average MVC quantities for the year ended December 31,


2024			986,803
2025			1,000,000
2026			1,000,000
2027			1,000,000
2028			1,000,000
2029			1,000,000
2030			1,000,000
2031			879,452

Financial data for our Permian reportable segment follows.


		Permian
	Three Months Ended March 31,
		2024		2023		Percentage Change
	(In thousands)
Revenues:


Other revenues		910		893		2%
Total revenues		910		893		2%
Costs and expenses:


General and administrative		36		44		(18)%




Total costs and expenses		36		44		(18)%
Add:





Proportional adjusted EBITDA for Double E		6,391		4,224		51%

Segment adjusted EBITDA		$	7,265	$	5,073	43%

*Not considered meaningful

Three months ended March 31, 2024. Segment adjusted EBITDA increased $2.2 million compared to the three months ended March 31, 2023, primarily as a result of an increase in proportional adjusted EBITDA from our equity method investment in Double E.

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Piceance.

Volume throughput for our Piceance reportable segment follows.


		Piceance
	Three Months Ended March 31,
		2024	2023	Percentage Change
Aggregate average daily throughput (MMcf/d)		312	287	9%

Volume throughput increased 9% compared to the three months ended March 31, 2023 primarily as a result of 48 new well connections that came online subsequent to March 31, 2023, partially offset by natural production declines.

Financial data for our Piceance reportable segment follows.


		Piceance
	Three Months Ended March 31,
		2024		2023		Percentage Change
	(In thousands)
Revenues:
Gathering services and related fees		$	20,387	$	19,119	7%
Natural gas, NGLs and condensate sales		948		1,641		(42)%
Other revenues		1,245		1,426		(13)%
Total revenues		22,580		22,186		2%
Costs and expenses:
Cost of natural gas and NGLs		374		1,074		(65)%
Operation and maintenance		5,672		5,749		(1)%
General and administrative		306		239		28%
Depreciation and amortization		10,468		12,881		(19%)
Gain on asset sales, net		(8)		(4)		100%

Total costs and expenses		16,812		19,939		(16)%
Add:
Depreciation and amortization		10,468		12,881

Adjustments related to capital reimbursement activity		(1,105)		(1,245)
Gain on asset sales, net		(8)		(4)

Other		110		104
Segment adjusted EBITDA		$	15,233	$	13,983	9%

________

*Not considered meaningful

Three months ended March 31, 2024. Segment adjusted EBITDA increased $1.3 million, compared to the three months ended March 31, 2023.

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Barnett.

Volume throughput for our Barnett reportable segment follows.


		Barnett
	Three Months Ended March 31,
		2024	2023	Percentage Change
Average daily throughput (MMcf/d)		179	199	(10%)

Volume throughput decreased 10% compared to the three months ended March 31, 2023, primarily due to temporary production curtailments associated with reductions in commodity pricing, partially offset by 14 wells that came online subsequent to March 31, 2023.

Financial data for our Barnett reportable segment follows.


		Barnett
	Three Months Ended March 31,
		2024		2023		Percentage Change
	(In thousands)
Revenues:
Gathering services and related fees		$	8,229	$	10,194	(19%)
Natural gas, NGLs and condensate sales		174		193		(10%)
Other revenues (1)		1,457		1,064		37%
Total revenues		9,860		11,451		(14%)
Costs and expenses:

Operation and maintenance		4,376		4,069		8%
General and administrative		291		265		10%
Depreciation and amortization		3,820		3,805		*


Total costs and expenses		8,487		8,139		4%
Add:
Depreciation and amortization		4,055		4,039
Adjustments related to capital reimbursement activity		(328)		(324)



Segment adjusted EBITDA		$	5,100	$	7,027	(27)%

________

*Not considered meaningful

(1)Includes the amortization expense associated with our favorable gas gathering contracts as reported in Other revenues.

Three months ended March 31, 2024. Segment adjusted EBITDA decreased $1.9 million, compared to the three months ended March 31, 2023, primarily as a result of decreased throughput described above.

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Corporate and Other Overview for the Three Months Ended March 31, 2024 and 2023

Corporate and Other represents those results that are not specifically attributable to a reportable segment or that have not been allocated to our reportable segments, including certain general and administrative expense items, transaction costs, acquisition integration costs and interest expense. Corporate and Other includes intercompany eliminations.


		Corporate and Other
	Three Months Ended March 31,
		2024	2023	Percentage Change
	(In thousands)


Costs and expenses:

General and administrative		12,520	8,556	46%
Transaction costs		7,791	302	*
Interest expense		37,846	34,223	11%

________

* Not considered meaningful

General and administrative. General and administrative expenses increased by $4.0 million, compared to the three months ended March 31, 2023, primarily due to increased employee salaries and benefit expense.

Transaction costs. Transaction costs in 2024 are primarily related to the Utica Sale that closed on March 22, 2024.

Interest expense. Interest expense increased $3.6 million for the three months ended March 31, 2024, compared to three months ended March 31, 2023, primarily due to $6.3 million of increased borrowing costs on the recently issued 2026 Unsecured Notes, partially offset by $3.0 million of reduced interest expense as a result of the exchange and repurchase of $209.7 million of the 2025 Senior Notes that occurred in November 2023.

Liquidity and Capital Resources

We rely primarily on internally generated cash flows as well as current cash balance and external financing sources, including commercial bank borrowings, and the issuance of debt, equity and preferred equity securities, and proceeds from potential asset divestitures to fund our capital expenditures. We believe that our ABL Facility and Permian Transmission Credit Facility, together with internally generated cash flows, current cash balance and access to debt or equity capital markets, will be adequate to finance our operations for the next twelve months without adversely impacting our liquidity.

We may enter into off-balance sheet arrangements and transactions that can give rise to material off-balance sheet obligations. As of March 31, 2024, our material off-balance sheet arrangements and transactions include (i) letters of credit outstanding against our ABL Facility aggregating to $4.3 million, and (ii) letters of credit outstanding against our Permian Transmission Credit Facility aggregating to $10.5 million. There are no other transactions, arrangements or other relationships with unconsolidated entities or other persons that are reasonably likely to materially affect our liquidity or availability of our capital resources.

As of March 31, 2024, we were in compliance with all covenants contained in the Senior Notes, the ABL Facility and the Permian Transmission Credit Facility. The ABL Facility requires that Summit Holdings not permit (i) the First Lien Net Leverage Ratio (as defined in the ABL Agreement) as of the last day of any fiscal quarter to be greater than 2.50:1.00, or (ii) the Interest Coverage Ratio (as defined in the ABL Agreement) for any fiscal quarter ending on or before December 31, 2024, (x) if no loans under the Credit Agreement are outstanding and unrestricted cash exceeds $200.0 million, 1.50:1.00 and (y) if any loans under the Credit Agreement are outstanding or unrestricted cash is less than such threshold, 1.75:1.00 and (b) thereafter, 1.90:1.00. As of March 31, 2024, the First Lien Net Leverage Ratio and Interest Coverage Ratio was -0.26:1.00 and 1.87:1.00, respectively.

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ABL Facility. As of March 31, 2024, we had a $400.0 million revolving ABL Facility with a maturity date of May 1, 2026. As of March 31, 2024, there were no amounts outstanding under the ABL Facility and the available borrowing capacity totaled $383.7 million after giving effect to the issuance thereunder of $4.3 million of outstanding but undrawn irrevocable standby letters of credit and $12.0 million of commitment reserves.

2025 Senior Notes. In February 2017, the Co-Issuers co-issued $500.0 million of 5.75% senior unsecured notes maturing April 15, 2025 (the “2025 Senior Notes”). As of March 31, 2024, the outstanding balance of the 2025 Senior Notes was $49.8 million. The 2025 Senior Notes are senior, unsecured obligations and rank equally in right of payment with all of our existing and future senior obligations. The 2025 Senior Notes are effectively subordinated in right of payment to all of our secured indebtedness, to the extent of the collateral securing such indebtedness. As of March 31, 2024, the Co-Issuers could redeem all or part of the 2025 Senior Notes at a redemption price of 100.000%, plus accrued and unpaid interest, if any, to, but not including the redemption date.

2026 Secured Notes. In November 2021, we issued $700.0 million of the 2026 Secured Notes, at a price of 98.5% of face value. Additionally, in November 2022, we issued an additional $85.0 million of 2026 Secured Notes at a price of 99.26% of their face value. The Co-Issuers pay interest on the 2026 Secured Notes semi-annually on April 15 and October 15 of each year, and the 2026 Secured Notes are jointly and severally guaranteed, on a senior second-priority secured basis (subject to permitted liens), by us and each of our restricted subsidiaries that is an obligor under the ABL Facility, or under the 2025 Senior Notes on the issue date of the 2026 Secured Notes. As of March 31, 2024, the outstanding balance of the 2026 Secured Notes was $785.0 million.

The 2026 Secured Notes will mature on October 15, 2026; provided that, if the outstanding amount of the 2025 Senior Notes (or any refinancing indebtedness in respect thereof that has a final maturity on or prior to the date that is 91 days after the Initial Maturity Date (as defined in the 2026 Secured Notes Indenture)) is greater than or equal to $50.0 million on January 14, 2025, which is 91 days prior to the scheduled maturity date of the 2025 Senior Notes, then the 2026 Secured Notes will mature on January 14, 2025.

Starting in the first quarter of 2023 with respect to the fiscal year ended 2022, and continuing annually through the fiscal year ended 2025, we are required under the terms of the 2026 Secured Notes Indenture to, if it has Excess Cash Flow (as defined in the 2026 Secured Notes Indenture), and subject to its ability to make such an offer under the ABL Facility, offer to purchase an amount of the 2026 Secured Notes, at 100% of the principal amount plus accrued and unpaid interest, equal to 100% of the Excess Cash Flow generated in the prior year. Excess Cash Flow is generally defined as consolidated cash flow minus the sum of capital expenditures and cash payments in respect of permitted investments and permitted restricted payments.

Generally, if we do not offer to purchase designated annual amounts of its 2026 Secured Notes or reduce its first lien capacity under the 2026 Secured Notes Indenture per annum from 2023 through 2025, the interest rate on the 2026 Secured Notes is subject to certain rate escalations. Per the terms of the 2026 Secured Notes Indenture, the designated amounts are $50.0 million aggregate principal amount of the 2026 Secured Notes by April 1, 2023, otherwise the interest rate shall automatically increase by 50 basis points per annum; $100.0 million aggregate principal amount of the 2026 Secured Notes by April 1, 2024, otherwise the interest rate shall automatically increase by 100 basis points per annum (minus any amount previously increased); and $200.0 million aggregate principal amount of the 2026 Secured Notes by April 1, 2025, otherwise the interest rate shall automatically increase by 200 basis points per annum (minus any amount previously increased).

Based on the amount of our Excess Cash Flow for the fiscal year ended 2023, on March 27, 2024, we commenced a cash tender offer to purchase up to $19.3 million aggregate principal amount of the outstanding 2026 Secured Notes at 100% of the principal amount plus accrued and unpaid interest. The cash flow offer expired on April 24, 2024 with $13.6 million tendered and validly accepted. Accordingly, $13.6 million of the 2026 Secured Notes is reflected as current debt in the March 31, 2024 unaudited condensed consolidated balance sheet.

As of April 1, 2024, we have not made offers to purchase in the required amount of $100.0 million and the interest rate on the 2026 Secured Notes increased an incremental 50 basis points to 9.50% effective on such date.

To the extent we make an offer to purchase, and the offer is not fully accepted by the holders of the 2026 Secured Notes, we may use any remaining amount not accepted for any purpose not prohibited by the 2026 Secured Notes Indenture or the ABL Facility.

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We may in the future use a combination of cash, secured or unsecured borrowings and issuances of our common units or other securities and the proceeds from asset sales to retire or refinance our outstanding debt or Series A Preferred Units through privately negotiated transactions, open market repurchases, redemptions, exchange offers, tender offers or otherwise, but we are under no obligation to do so. Any such transactions may produce allocations of taxable income to a unitholder, such as gains on asset sales or income from cancellation of indebtedness, that are large on a per-unit basis relative to the trading price of our common units and are not accompanied by any corresponding distribution of cash to fund the payment of the resulting tax liability to the unitholder.

2026 Unsecured Notes. In November 2023, we issued a total of $209.5 million aggregate principal amount of 2026 Unsecured Notes in exchange for $180.0 million aggregate principal amount of the 2025 Senior Notes and $29.5 million in cash. As of March 31, 2024, the outstanding balance of the 2026 Unsecured Notes was $209.5 million. The 2026 Unsecured Notes bear interest at 12.00% and mature on October 15, 2026, in line with the maturity date of the 2026 Secured Notes. The 2026 Unsecured Notes are senior, unsecured obligations and rank equally in right of payment with all of our existing and future senior obligations. The 2026 Unsecured Notes are effectively subordinated in right of payment to all of our secured indebtedness, to the extent of the collateral securing such indebtedness. The Co-Issuers may redeem all or a part of the 2026 Unsecured Notes at a redemption price of (a) on or before April 15, 2025, 101.00%, and (b) after April 15, 2025, 102.00%, plus accrued and unpaid interest, if any, to, but not including the redemption date.

Cash Flows

The components of the net change in cash and cash equivalents were as follows:


	Three Months Ended March 31,
	2024		2023
	(In thousands)
Net cash provided by operating activities	$	43,616	$	49,695
Net cash provided by (used in) investing activities	608,629		(22,549)
Net cash used in financing activities	(320,846)		(17,394)
Net change in cash, cash equivalents and restricted cash	$	331,399	$	9,752

Operating activities.

Cash flows provided by operating activities for the three months ended March 31, 2024 primarily reflected:

•a net income of $132.9 million plus positive adjustments of $104.0 million for non-cash operating items; and

•a $14.7 million change in working capital accounts.

Cash flows provided by operating activities for the three months ended March 31, 2023 primarily reflected:

•a net loss of $14.2 million plus adjustments of $43.7 million for non-cash operating items; and

•a $20.1 million change in working capital accounts.

Investing activities.

Cash flows provided by investing activities during the three months ended March 31, 2024 primarily reflected:

•$332.7 million of cash inflows from the proceeds of the sale of our equity method investment;

•$292.3 million of cash inflows from the proceeds of the sale of Summit Utica; and

•$16.4 million of cash outflows for capital expenditures.

Cash flows used in investing activities during the three months ended March 31, 2023 primarily reflected:

•$16.4 million of cash outflows for capital expenditures; and

•$3.5 million for cash investments in the Double E Project.

Financing activities.

Cash flows used in financing activities during the three months ended March 31, 2024 primarily reflected:

•$313.0 million of cash outflows for repayments on the ABL Facility; and

•$3.8 million of cash outflows for repayments on the Permian Transmission Term Loan.

Cash flows used in financing activities during the three months ended March 31, 2023 primarily reflected:

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•$13.0 million of cash outflows for repayments on the ABL Facility;

•$2.5 million of cash outflows for repayments on the Permian Transmission Term Loan.

Capital Requirements

Overall.

Our business is capital intensive, requiring significant investment for the maintenance of existing gathering systems and the acquisition or construction and development of new gathering systems and other midstream assets and facilities. Our Partnership Agreement requires that we categorize our capital expenditures as either:

•maintenance capital expenditures, which are cash expenditures (including expenditures for the addition or improvement to, or the replacement of, our capital assets or for the acquisition of existing, or the construction or development of, new capital assets) made to maintain our long-term operating income or operating capacity; or

•expansion capital expenditures, which are cash expenditures incurred for acquisitions or capital improvements that we expect will increase our operating income or operating capacity over the long term.

For the three months ended March 31, 2024, cash paid for capital expenditures totaled $16.4 million which included $2.7 million of maintenance capital expenditures. For the three months ended March 31, 2024, we did not make any contributions to Double E and Ohio Gathering.

We rely primarily on internally generated cash flows, our current cash balance as well as external financing sources, including commercial bank borrowings and the issuance of debt, equity and preferred equity securities, and proceeds from potential asset divestitures to fund our capital expenditures. We believe that our internally generated cash flows, current cash balance, our ABL Facility and the Permian Transmission Credit Facility, and access to debt or equity capital markets, will be adequate to finance our operations for the next twelve months without adversely impacting our liquidity. .

We estimate that our 2024 capital program will range from $30.0 million to $40.0 million, including between $10.0 million and $15.0 million of maintenance capital expenditures. We estimate that our 2024 investment in our Double E equity method investee will be approximately $5.0 million.

There are a number of risks and uncertainties that could cause our current expectations to change, including, but not limited to, (i) the ability to reach agreements with third parties; (ii) prevailing conditions and outlook in the natural gas, crude oil and NGLs and markets, and (iii) our ability to obtain financing from commercial banks, the capital markets, or other financing sources.

Excess Cash Flow Offers to Purchase.

Starting in the first quarter of 2023 with respect to the fiscal year ended 2022, and continuing annually through the fiscal year 2025, we are required under the terms of the 2026 Secured Notes Indenture to, if it has Excess Cash Flow (as defined in the 2026 Secured Notes Indenture), and subject to its ability to make such an offer under the ABL Facility, offer to purchase an amount of the 2026 Secured Notes, at 100% of the principal amount plus accrued and unpaid interest, equal to 100% of the Excess Cash Flow generated in the prior year. Excess Cash Flow is generally defined as consolidated cash flow minus the sum of capital expenditures and cash payments in respect of permitted investments and permitted restricted payments.

Generally, if we do not offer to purchase designated annual amounts of its 2026 Secured Notes or reduce its first lien capacity under the 2026 Secured Notes Indenture per annum from 2023 through 2025, the interest rate on the 2026 Secured Notes is subject to certain rate escalations. Per the terms of the 2026 Secured Notes Indenture, the designated amounts are to offer to purchase $50.0 million aggregate principal amount of the 2026 Secured Notes by April 1, 2023, otherwise the interest rate shall automatically increase by 50 basis points per annum; $100.0 million aggregate principal amount of the 2026 Secured Notes by April 1, 2024, otherwise the interest rate shall automatically increase by 100 basis points per annum (minus any amount previously increased); and $200.0 million aggregate principal amount of the 2026 Secured Notes by April 1, 2025, otherwise the interest rate shall automatically increase by 200 basis points per annum (minus any amount previously increased).

As of April 1, 2024, we had not made offers to purchase in the required amount of $100.0 million and the interest rate on the 2026 Secured Notes increased an incremental 50 basis points to 9.50% effective on such date.

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Credit and Counterparty Concentration Risks

We examine the creditworthiness of counterparties to whom we extend credit and manage our exposure to credit risk through credit analysis, credit approval, credit limits and monitoring procedures, and for certain transactions, we may request letters of credit, prepayments or guarantees.

Certain of our customers may be temporarily unable to meet their current obligations. While this may cause disruption to cash flows, we believe that we are properly positioned to deal with the potential disruption because the vast majority of our gathering assets are strategically positioned at the beginning of the midstream value chain. The majority of our infrastructure is connected directly to our customers’ wellheads and pad sites, which means our gathering systems are typically the first third-party infrastructure through which our customers’ commodities flow and, in many cases, the only way for our customers to get their production to market.

We have exposure due to nonperformance under our MVC contracts whereby a potential customer, may not have the wherewithal to make its MVC shortfall payments when they become due. We typically receive payment for all prior-year MVC shortfall billings in the quarter immediately following billing. Therefore, our exposure to risk of nonperformance is limited to and accumulates during the current year-to-date contracted measurement period.

Off-Balance Sheet Arrangements

During the three months ended March 31, 2024, there were no material changes to the off-balance sheet obligations disclosed in our 2023 Annual Report.

Summarized Financial Information

The supplemental summarized financial information below reflects SMLP's separate accounts, the combined accounts of Summit Holdings and Finance Corp. (together, the “Co-Issuers”) and its guarantor subsidiaries (the “Guarantor Subsidiaries” and together with the Co-Issuers, the “Obligor Group”) for the dates and periods indicated. The financial information of the Obligor Group is presented on a combined basis and intercompany balances and transactions between the Co-Issuers and Guarantor Subsidiaries have been eliminated. There were no reportable transactions between the Co-Issuers and Obligor Group and the subsidiaries that were not issuers or guarantors of the Senior Notes.

Payments to holders of the Senior Notes are affected by the composition of and relationships among the Co-Issuers, the Guarantor Subsidiaries and Permian Holdco and Summit Permian Transmission, both of which are unrestricted subsidiaries of SMLP and are not issuers or guarantors of the Senior Notes. The assets of our unrestricted subsidiaries are not available to satisfy the demands of the holders of the Senior Notes. In addition, our unrestricted subsidiaries are subject to certain contractual restrictions related to the payment of dividends, and other rights in favor of their non-affiliated stakeholders, that limit their ability to satisfy the demands of the holders of the Senior Notes.

On March 22, 2024, we completed the disposition of Summit Utica, to a subsidiary of MPLX LP. In connection with the disposition, the status of Summit Utica as guarantor subsidiary, was modified prior to the occurrence of the disposition.

The summarized financial information below presents the activities and balances of Summit Utica as guarantor subsidiaries for all summarized income statement periods and balance sheet dates presented in which they were owned by the Partnership. Summit Utica was not included in the Partnership’s balance sheet as of March 31, 2024.

A list of each of SMLP’s subsidiaries that is a guarantor, issuer or co-issuer of our registered securities subject to the reporting requirements in Release 33-10762 is filed as Exhibit 22.1 to this report.

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Summarized Balance Sheet Information. Summarized balance sheet information as of March 31, 2024 and December 31, 2023 follows.


	March 31, 2024
	SMLP		Obligor Group
	(In thousands)
Assets
Current assets	$	3,963	$	411,806
Noncurrent assets	9,960		1,575,023

Liabilities
Current liabilities	$	15,587	$	124,283
Noncurrent liabilities	1,986		1,056,379


	December 31, 2023
	SMLP		Obligor Group
	(In thousands)
Assets
Current assets	$	2,993	$	93,035
Noncurrent assets	9,801		2,069,149

Liabilities
Current liabilities	$	10,395	$	104,694
Noncurrent liabilities	2,054		1,383,704

Summarized Statements of Operations Information. For the purposes of the following summarized statements of operations, we allocate a portion of general and administrative expenses recognized at the SMLP parent to the Obligor Group to reflect what those entities' results would have been had they operated on a stand-alone basis. Summarized statements of operations for the three months ended March 31, 2024 and for the year ended December 31, 2023 follow.


	Three Months Ended March 31, 2024
	SMLP		Obligor Group
	(In thousands)
Total revenues	$	—	$	115,168
Total costs and expenses	8,477		162,711
Income (loss) before income taxes and income from equity method investees	(8,477)		130,202
Income from equity method investees	—		7,039
Net income (loss)	$	(8,687)	$	137,241


	Year Ended December 31, 2023
	SMLP		Obligor Group
	(In thousands)
Total revenues	$	—	$	451,032
Total costs and expenses	3,882		373,245
Loss before income taxes and income from equity method investees	(3,661)		(60,615)
Income from equity method investees	—		22,922
Net loss	$	(3,983)	$	(37,693)

Critical Accounting Estimates

We prepare our financial statements in accordance with GAAP. These principles are established by the FASB. We employ methods, estimates and assumptions based on currently available information when recording transactions resulting from business operations. There have been no significant changes to our critical accounting estimates from those disclosed on Form 10-K for the fiscal year ended December 31, 2023.

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Forward-Looking Statements

Investors are cautioned that certain statements contained in this report as well as in periodic press releases and certain oral statements made by our officers and employees during our presentations are “forward-looking” statements. 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 or prospects, and possible actions taken by us or our subsidiaries are also forward-looking statements. These forward-looking statements involve various risks and uncertainties, including, but not limited to, those described in Part II. Item 1A. Risk Factors included in this report.

Forward-looking statements are based on current expectations and projections about future events and are inherently subject to a variety of risks and uncertainties, many of which are beyond the control of our management team. All forward-looking statements in this report and subsequent written and oral forward-looking statements attributable to us, or to persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements in this paragraph. These risks and uncertainties include, among others:

•our decision whether to pay, or our ability to grow, our cash distributions;

•fluctuations in natural gas, NGLs and crude oil prices, including as a result of political or economic measures taken by various countries or OPEC;

•the extent and success of our customers' drilling and completion efforts, as well as the quantity of natural gas, crude oil, freshwater deliveries, and produced water volumes produced within proximity of our assets;

•failure or delays by our customers in achieving expected production in their natural gas, crude oil and produced water projects;

•competitive conditions in our industry and their impact on our ability to connect hydrocarbon supplies to our gathering and processing assets or systems;

•actions or inactions taken or nonperformance by third parties, including suppliers, contractors, operators, processors, transporters and customers, including the inability or failure of our shipper customers to meet their financial obligations under our gathering agreements and our ability to enforce the terms and conditions of certain of our gathering agreements in the event of a bankruptcy of one or more of our customers;

•our ability to divest of certain of our assets to third parties on attractive terms, which is subject to a number of factors, including prevailing conditions and outlook in the natural gas, NGL and crude oil industries and markets;

•the ability to attract and retain key management personnel;

•commercial bank and capital market conditions and the potential impact of changes or disruptions in the credit and/or capital markets;

•changes in the availability and cost of capital and the results of our financing efforts, including availability of funds in the credit and/or capital markets;

•restrictions placed on us by the agreements governing our debt and preferred equity instruments;

•the availability, terms and cost of downstream transportation and processing services;

•natural disasters, accidents, weather-related delays, casualty losses and other matters beyond our control;

•the current and potential future impact of the COVID-19 pandemic or other pandemics on our business, results of operations, financial position or cash flows;

•operational risks and hazards inherent in the gathering, compression, treating and/or processing of natural gas, crude oil and produced water;

•our ability to comply with the terms of the agreements comprising the Global Settlement;

•weather conditions and terrain in certain areas in which we operate;

•physical and financial risks associated with climate change;

•any other issues that can result in deficiencies in the design, installation or operation of our gathering, compression, treating, processing and freshwater facilities;

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•timely receipt of necessary government approvals and permits, our ability to control the costs of construction, including costs of materials, labor and rights-of-way and other factors that may impact our ability to complete projects within budget and on schedule;

•our ability to finance our obligations related to capital expenditures, including through opportunistic asset divestitures or joint ventures and the impact any such divestitures or joint ventures could have on our results;

•the effects of existing and future laws and governmental regulations, including environmental, safety and climate change requirements and federal, state and local restrictions or requirements applicable to oil and/or gas drilling, production or transportation;

•changes in tax status;

•the effects of litigation;

•interest rates;

•changes in general economic conditions;

•our ability to effect a transaction pursuant to our strategic review; and

•certain factors discussed elsewhere in this report.

Developments in any of these areas could cause actual results to differ materially from those anticipated or projected or cause a significant reduction in the market price of our common units, preferred units and senior notes.

The foregoing list of risks and uncertainties may not contain all of the risks and uncertainties that could affect us. In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this document may not in fact occur. Accordingly, undue reliance should not be placed on these statements. We undertake no obligation to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise, except as otherwise required by law.

Information About Us

Investors should note that we make available, free of charge on our website at www.summitmidstream.com, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. We also post announcements, updates, events, investor information and presentations on our website in addition to copies of all recent news releases. We may use the Investors section of our website to communicate with investors. It is possible that the financial and other information posted there could be deemed to be material information. Documents and information on our website are not incorporated by reference herein.

The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers, including us, that file electronically with the SEC.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Interest Rate Risk

Our interest rate risk exposure, which is largely related to our indebtedness, has not changed materially since December 31, 2023. As of March 31, 2024, we had approximately $1.0 billion principal of fixed-rate debt, nil outstanding under our variable rate ABL Facility and $141.1 million outstanding under the variable rate Permian Transmission Term Loan (see Note 8 - Debt). As of March 31, 2024, we had $126.9 million of interest rate exposure hedged to offset the impact of changes in interest rates on our Permian Transmission Term Loan. While existing fixed-rate debt mitigates the downside impact of fluctuations in interest rates, future issuances of long-term debt could be impacted by increases in interest rates, which could result in higher overall interest costs. In addition, the borrowings under our ABL Facility, which have a variable interest rate, also expose us to the risk of increasing interest rates. For additional information, see the "Interest Rate Risk" section included in Item 7A. Quantitative and Qualitative Disclosures About Market Risk of the 2023 Annual Report and updates to our risk factors included herein.

Commodity Price Risk

We generate a majority of our revenues pursuant to primarily long-term and fee-based gathering agreements, many of which include MVCs and areas of mutual interest. Our direct commodity price exposure relates to (i) the sale of physical natural gas and/or NGLs purchased under percentage-of-proceeds and other processing arrangements with certain of our customers in the Rockies and Piceance segments, (ii) the sale of natural gas we retain from certain Barnett segment customers and (iii) the sale of condensate we retain from certain gathering services in the Piceance segment. Our gathering agreements with certain Barnett customers permit us to retain a certain quantity of natural gas that we sell to offset the power costs we incur to operate our electric-drive compression assets. We manage our direct exposure to natural gas and power prices through the use of forward power purchase contracts with wholesale power providers that require us to purchase a fixed quantity of power at a fixed heat rate based on prevailing natural gas prices on the Henry Hub Index. We sell retainage natural gas at prices that are based on the Atmos Zone 3 Index. By basing the power prices on a system and basin-relevant market, we are able to closely associate the relationship between the compression electricity expense and natural gas retainage sales. We do not enter into risk management contracts for speculative purposes. Our current commodity price risk exposure has not changed materially since December 31, 2023. For additional information, see the "Commodity Price Risk" section included in Item 7A. Quantitative and Qualitative Disclosures About Market Risk of the 2023 Annual Report.

Item 4. Controls and Procedures.

Under the direction of our General Partner's Chief Executive Officer and Chief Financial Officer, we evaluated our disclosure controls and procedures and internal control over financial reporting and concluded that (i) our disclosure controls and procedures were effective as of March 31, 2024 and (ii) no change in internal control over financial reporting occurred during the quarter ended March 31, 2024, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

Although we may, from time to time, be involved in litigation and claims arising out of our operations in the ordinary course of business, we are not currently a party to any significant legal or governmental proceedings, except as described below. In addition, we are not aware of any significant legal or governmental proceedings contemplated to be brought against us, under the various environmental protection statutes to which we are subject.

Fiberspar Corporation. On May 3, 2022, Fiberspar Corporation (“Fiberspar”) filed a petition in state court alleging, before costs and interest, over $5.0 million owed but not paid for orders of pipeline product from Fiberspar. The petition asserts causes of action for breach of contract and suit on sworn account. A civil action on the same claims had been filed by Fiberspar in 2016 but was dismissed without prejudice pursuant to a standstill and tolling agreement that expired in 2021. We filed an answer on September 6, 2022 denying Fiberspar’s claims and asserting counter claims. The case is pending in the District Court of Harris County, Texas. We are unable to predict the final outcome of this matter.

Global Settlement. On August 4, 2021, the Partnership and several of its subsidiaries entered into agreements to resolve government investigations into the previously disclosed 2015 Blacktail Release, from a pipeline owned and operated by Meadowlark Midstream, which at the time was a wholly owned subsidiary of Summit Investments, (together with Meadowlark Midstream, the “Companies”). The Companies entered into the following agreements to resolve the U.S. federal and North Dakota state governments’ environmental claims against the Companies with respect to the 2015 Blacktail Release: (i) a Consent Decree with (a) the DOJ, on behalf of the U.S. Environmental Protection Agency and the U.S. Department of Interior, and (b) the State of North Dakota, on behalf of the North Dakota Department of Environmental Quality and the North Dakota Game and Fish Department, lodged with the U.S. District Court; (ii) a Plea Agreement with the United States, by and through the U.S. Attorney for the District of North Dakota, and the Environmental Crimes Section of the DOJ; and (iii) a Consent Agreement with the North Dakota Industrial Commission (together, the “Global Settlement”).

The Consent Decree provides for, among other requirements and subject to the conditions therein, (i) payment of total civil penalties and reimbursement of assessment costs of $21.25 million, with the federal portion of penalties payable over up to five years and the state portion of penalties payable over up to, for the federal and state civil amounts, six years and, for the federal criminal amounts, five years, with interest accruing at, for the federal and state civil amounts, a fixed rate of 3.25% and, for the federal criminal amounts, a variable rate set by statute; (ii) continuation of remediation efforts at the site of the 2015 Blacktail Release; (iii) other injunctive relief including but not limited to control room management, an environmental management system audit, training, and reporting; and (iv) no admission of liability to the U.S. or North Dakota. The Consent Decree was entered by the U.S. District Court on September 28, 2021.

The Consent Agreement settles a complaint brought by the NDIC in an administrative action against the Companies for alleged violations of the North Dakota Administrative Code (“NDAC”) arising from the 2015 Blacktail Release on the following terms: (i) the Companies admit to three counts of violating the NDAC; (ii) the Companies agree to follow the terms and conditions of the Consent Decree, including payment of penalty and reimbursement amounts set forth in the Consent Decree; and (iii) specified conditions in the Consent Decree regarding operation and testing of certain existing produced water pipelines shall survive until those pipelines are properly abandoned.

Under the Plea Agreement, the Companies agreed to, among other requirements and subject to the conditions therein, (i) enter guilty pleas for one charge of negligent discharge of a harmful quantity of oil and one charge of knowing failure to immediately report a discharge of oil; (ii) sentencing that includes payment of a fine of $15.0 million plus mandatory special assessments over a period of up to five years with interest accruing at the federal statutory rate; (iii) organizational probation for a minimum period of three years from sentencing on December 6, 2021, which will include payment in full of certain components of the fines and penalty amounts; and (iv) compliance with the remedial measures in the Consent Decree.

On December 6, 2021, the U.S. District Court accepted the Plea Agreement. This Global Settlement resulted in losses amounting to $36.3 million and will be paid over five to six years, of which we have paid principal amounts of $14.7 million as of March 31, 2024.

Sage Natural Resources. In July 2022, the Partnership’s subsidiary DFW Midstream filed a petition in the District Court of Dallas County, Texas seeking payment, before costs and interest, of approximately $1.0 million in electric power costs for gathering services provided to Sage Natural Resources, LLC (“Sage”) in 2021-2022. Sage has denied the amounts are owed and has filed counterclaims seeking damages and other relief for DFW Midstream’s alleged breaches of the gathering agreement. The issues in this case arose from events in February 2021 impacting the oil and gas industry in the Barnett during Winter Storm Uri. A non-jury trial is currently scheduled for August 2024, and we are unable to predict the final outcome of this matter.

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Item 1A. Risk Factors.

The risk factors contained in the Item 1A. Risk Factors of the 2023 Annual Report are incorporated herein by reference except to the extent they address risks arising from or relating to the failure of events described therein to occur, which events have since occurred.

Item 5. Other Information.

Mountaineer Disposition

On May 1, 2024, Mountaineer Midstream, a wholly owned subsidiary of the Partnership, closed the sale (the “Mountaineer Sale”) of its operated gathering system, the Mountaineer Midstream System, to Antero Midstream LLC (“Antero”) for a cash sale price of $70.0 million, subject to customary closing adjustments, pursuant to a purchase and sale agreement between Mountaineer Midstream and Antero, and solely for the purpose of unconditionally and irrevocably guaranteeing the payment and performance of all of Mountaineer Midstream’s obligations under the agreement, the Partnership, and its wholly owned subsidiary, Summit Midstream Holdings, LLC. Under the agreement, Mountaineer Midstream has agreed to customary indemnification obligations for breaches of covenants, warranties, and representations, including environmental representations.

The Mountaineer Midstream system, located within the Marcellus shale, is in Doddridge and Harrison counties in West Virginia.

The Partnership intends to use the proceeds from the Mountaineer Sale for general partnership purposes or future acquisitions. In addition, a subsidiary of the Partnership has agreed to provide customary transition services to Antero for an initial period of 60 days, unless terminated or otherwise extended.

The foregoing summary of the Purchase agreement is not complete and is qualified in its entirety by reference to the full and complete Purchase agreement, a copy of which is filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q and is incorporated herein by reference.

See the unaudited condensed consolidated proforma financial information of the Partnership filed as exhibit 99.1 to this Quarterly Report on form 10-Q.

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Item 6. Exhibits.


Exhibit number		Description
3.1		Fourth Amended and Restated Agreement of Limited Partnership of Summit Midstream Partners, LP, dated May 28, 2020 (Incorporated herein by reference to Exhibit 3.1 to SMLP’s Current Report on Form 8-K dated June 2, 2020 (Commission File No. 001-35666))
3.2		First Amendment to Fourth Amended and Restated Agreement of Limited Partnership of Summit Midstream Partners, LP, dated February 23, 2023 (Incorporated herein by reference to Exhibit 3.2 to SMLP's Annual Report on Form 10-K filed March 1, 2023 (Commission File No. 001-35666))
3.3		Second Amended and Restated Limited Liability Company Agreement of Summit Midstream GP, LLC, dated May 28, 2020 (Incorporated herein by reference to Exhibit 3.2 to SMLP's Current Report on Form 8-K filed June 2, 2020 (Commission File No. 001-35666))
3.4		Certificate of Limited Partnership of Summit Midstream Partners, LP (Incorporated herein by reference to Exhibit 3.1 to SMLP's Form S-1 Registration Statement dated August 21, 2012 (Commission File No. 333-183466))
3.5		Certificate of Formation of Summit Midstream GP, LLC (Incorporated herein by reference to Exhibit 3.4 to SMLP's Form S-1 Registration Statement dated August 21, 2012 (Commission File No. 333-183466))
10.1	+	P urchase and Sale Agreement, dated May 1, 202 4, by and amo ng Mountaineer Midstream Company, LLC, as Seller, and Antero Midstream L LC , as Buy er, and for the limited purposes expressly set forth there to , Summit Midstream Par tners, LP
22.1	+	Summit Midstream Partners, LP Subsidiary Issuers and Guarantors of Registered Securities
31.1	+	Rule 13a-14(a)/15d-14(a) Certification, executed by Heath Deneke, President, Chief Executive Officer and Director
31.2	+	Rule 13a-14(a)/15d-14(a) Certification, executed by William J. Mault, Executive Vice President and Chief Financial Officer
32.1	+	Certifications required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350), executed by Heath Deneke, President, Chief Executive Officer and Director, and William J. Mault, Executive Vice President and Chief Financial Officer
99.1	+	The unaudited pro forma condensed consolidated balance sheet as of March 31, 2024 and the unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2023 and the three-months ended March 31, 2024
101.INS	*	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	*	Inline XBRL Taxonomy Extension Schema
101.CAL	*	Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF	*	Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB	*	Inline XBRL Taxonomy Extension Label Linkbase
101.PRE	*	Inline XBRL Taxonomy Extension Presentation Linkbase
104	*	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

+ Filed herewith.

* Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections. The financial information contained in the XBRL (eXtensible Business Reporting Language)-related documents is unaudited and unreviewed.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			Summit Midstream Partners, LP
			(Registrant)

			By: Summit Midstream GP, LLC (its General Partner)

May 6, 2024			/s/ WILLIAM J. MAULT
			William J. Mault, Executive Vice President and Chief Financial Officer (Principal Financial Officer)