Summit Midstream Partners, LP (SMLP)·Q2 2024 Earnings Summary

Executive Summary

• Q2 2024 revenue was $101.3M, diluted EPS was -$2.91, and adjusted EBITDA was $43.1M; management reiterated pro forma FY2024 adjusted EBITDA guidance of $170–$200M .
• Sequential mix shifted after the Northeast divestitures, with Rockies resilient but DJ Basin downtime compressing product margins by ~$1.5M; Double E throughput rose 18% QoQ to 549 MMcf/d and generated $7.8M adjusted EBITDA (net to SMLP) .
• Balance sheet flexibility improved post-quarter with a new $500M ABL and $575M 8.625% second-lien notes due 2029; pro forma net leverage ~4.4x, and C‑Corp conversion completed Aug 1, 2024 to broaden investor appeal .
• Wall Street consensus (S&P Global) for Q2 2024 EPS/Revenue/EBITDA was unavailable; no estimate comparison possible. Guidance and midstream execution (Double E commercialization, DJ remediation) are the likely stock drivers near term.

What Went Well and What Went Wrong

What Went Well

• Double E throughput increased 18% QoQ (467 → 549 MMcf/d), delivering $7.8M adjusted EBITDA net to SMLP; Permian segment adjusted EBITDA rose to $7.7M (+$0.4M QoQ) on higher JV contribution .
• Rockies volumes increased (gas +4.8%, liquids +1.4%) with 20 wells connected (18 DJ, 2 Williston); segment adjusted EBITDA of $22.9M held essentially flat YoY .
• Strategic actions improved capital structure and liquidity: upsized $500M ABL and $575M notes due 2029; C‑Corp conversion expected to deliver tax benefits and broaden investor base .
  Quote: “With this maturity extension and improved liquidity profile, Summit is well positioned…to further reduce debt and achieve our long-term leverage target of 3.5x.” — CEO Heath Deneke .

What Went Wrong

• DJ Basin compressor downtime forced offloading to a third-party plant, compressing product margins by ~ $1.5M in Q2; management expects partial resolution in Q3 and full resolution by Q4 .
• Natural gas price-driven segment EBITDA fell 59.7% QoQ, primarily due to Northeast segment dispositions; total segment EBITDA $19.9M, capex $1.6M .
• Consolidated net loss widened YoY to -$23.8M, driven by higher transaction costs and impairments; O&M was stable but G&A increased YoY ($14.2M vs $10.8M) .

Financial Results

Segment adjusted EBITDA ($USD Thousands):

KPIs and operating data:

Notes:

• Sequential comparability (Q1→Q2) is impacted by the Northeast divestitures completed in Mar–May 2024 .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Summit has made considerable progress… With this maturity extension and improved liquidity profile, Summit is well positioned… to further reduce debt and achieve our long-term leverage target of 3.5x.” — Heath Deneke, CEO .
• “Other than some operational downtime experienced in our Rockies segment, second quarter financial and operating results… were in line with management expectations… We continue to expect to achieve our pro forma 2024 adjusted EBITDA guidance range of $170 million to $200 million.” — Heath Deneke .
• Call opening framing: conversion to SMC, refinancing actions, and continued focus on Double E commercialization and deleveraging — prepared remarks (operator/IR/CEO) .

Q&A Highlights

• Topics focused on capital structure (ABL/notes, leverage trajectory to ~3.5x), corporate conversion benefits, Double E throughput and commercial wins, and DJ Basin remediation timeline; management reiterated distribution reinstatement is contingent on leverage targets .
• CFO referenced Q2 net loss of ~$23.9M and provided segment-level details consistent with the release, underscoring non-GAAP measures’ reconciliation to GAAP .
• Clarifications indicated DJ downtime impact (~$1.5M) expected to abate across Q3–Q4, supporting H2 trajectory within guidance .

Estimates Context

• S&P Global consensus for Q2 2024 EPS, Revenue, and EBITDA was unavailable for SMLP; we were unable to retrieve estimates due to mapping limitations. As a result, we cannot provide beat/miss analysis versus Wall Street consensus for this quarter [GetEstimates error].
• Investors should focus on internal drivers (Double E growth, DJ remediation, composition changes post-Northeast divestitures) and the reiterated FY2024 adjusted EBITDA range as the anchor for near-term revisions .

Key Takeaways for Investors

• Mix shift post-Northeast divestitures: Rockies and Permian are the earnings backbone; monitor DJ remediation pace and Double E commercialization momentum in H2 .
• Balance sheet de-risking: 2029 maturities and larger ABL significantly reduce near-term refinancing risk; deleveraging path toward ~3.5x is credible if H2 execution matches guidance .
• Operational cadence: 34 wells connected in Q2 (105 YTD), two rigs in Rockies, one in Barnett; pad cadence supports stability while downtime normalization could release ~$1.5M margin drag .
• Valuation drivers: With estimates unavailable, trade the narrative—Double E throughput/contracting updates and DJ repair milestones are the catalysts to track through Q3/Q4 .
• Distribution optionality: Management continues to signal potential reinstatement contingent on leverage—progress toward ~3.5x is the gating factor .
• Watch capex discipline: Q2 capex $10.5M (maintenance $3.4M); Rockies pad connections are the primary use—supports asset health without overextending .
• Non-GAAP vs GAAP: Adjusted EBITDA of $43.1M and DCF $11.7M align with midstream cash metrics; reconcile to GAAP given Q2 net loss and one-off items (transaction costs, impairments) .

Sources: Q2 2024 8‑K with Exhibit 99.1 press release and financials ; Q2 2024 earnings call (external transcript) ; Q1 2024 press release (PRNewswire) ; Q4 2023 press release (PRNewswire) .