Summit Midstream Corp (SMC) FY 2024 MD&A

Item 7. 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 is intended to inform the reader about matters affecting the financial condition and results of operations of the Company and its subsidiaries. As a result, the following discussion for the year ended December 31, 2024 should be read in conjunction with the consolidated financial statements and notes thereto included in this Annual Report. Among other things, the consolidated 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.

Unless the context requires otherwise or unless otherwise noted, all references to “Summit Midstream,” the “Company,” “we,” “us,” “our” or like terms are to Summit Midstream Corporation (including its subsidiaries) for the periods after August 1, 2024, the date the Corporate Reorganization was consummated. For the periods prior to August 1, 2024, unless the context requires otherwise or unless otherwise noted, all reference to “Summit Midstream,” or the “Company” are to Summit Midstream Partners, LP. (including its subsidiaries).

Overview

We are a value-oriented company focused on developing, owning and operating midstream energy infrastructure assets that are strategically located in the core producing areas of unconventional resource basins, primarily shale formations, in the continental United States.

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, Piceance and Mid-Con segments, (ii) the sale of natural gas we retain from certain Mid-Con 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. During the year ended December 31, 2024, these additional activities accounted for approximately 45% of our total revenues.

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 Years Ended December 31, 2024 and 2023” section herein.

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(1)See “Liquidity and Capital Resources” herein and Note 18 - Segment Information to the consolidated financial statements for additional information on capital expenditures.

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Key Matters for the Year ended December 31, 2024. The following is a brief listing of significant developments and highlights which are items reflected in our financial results for the fiscal year ended December 31, 2024. Additional information regarding these items may be found elsewhere in this Annual Report.

•Strategic review. Subsequent to the October 2023 announcement of our strategic review, we executed the following transactions in order to maximize shareholder value:

•Summit Utica Sale. 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 was 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 was 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 $70.0 million, subject to customary post-closing adjustments. Mountaineer Midstream was the owner of midstream assets located in the 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.

•Debt Reduction and Maturity Optimization. Over the course of 2024, the Company optimized its indebtedness by reducing debt, lowering its borrowing cost, and extending its debt maturities. These optimization transactions included the following:

•2026 Secured Notes Excess Cash Flow Offer. On March 27, 2024, Summit Holdings and Finance Corp. 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 2024 ECF Offer expired on April 24, 2024 with $13.6 million aggregate principal amount of the 2026 Secured Notes tendered and validly accepted and $5.7 million of declined proceeds.

•2026 Secured Notes Asset Sale Offer. On May 7, 2024, Summit Holdings and Finance Corp. commenced a cash tender offer to purchase up to $215.0 million aggregate principal amount of the outstanding 2026 Secured Notes at 100% of the principal amount plus accrued and unpaid interest. The 2026 Secured Notes Asset Sale Offer expired on June 5, 2024 with $6.9 million aggregate principal amount of the 2026 Secured Notes tendered and validly accepted and $208.1 million of declined proceeds.

•2026 Unsecured Notes Redemption. On June 7, 2024, Summit Holdings and Finance Corp. delivered a redemption notice with respect to all $209.5 million aggregate principal amount of the 2026 Unsecured Notes. The 2026 Unsecured Notes Redemption was funded with declined proceeds from the 2024 ECF Offer and the 2026 Secured Notes Asset Sale Offer and proceeds from the Mountaineer Transaction and the Utica Sale and settled on June 24, 2024.

•Issuance of 2029 Secured Notes. On July 26, 2024, Summit Holdings issued $575.0 million aggregate principal amount of the 2029 Secured Notes.

•2026 Secured Notes Tender Offer and Redemption. On July 26, 2024, concurrently with closing the offering of the Initial 2029 Secured Notes, Summit Holdings and Finance Corp. consummated a cash tender offer to purchase any and all of the outstanding 2026 Secured Notes. Summit Holdings and Finance Corp. accepted for payment and made payment for $649.8 million aggregate principal amount of the 2026 Secured Notes validly tendered in the 2026 Secured Notes Tender Offer. On July 26, 2024, concurrently with consummation of the 2026 Secured Notes Tender Offer, Summit Holdings and Finance Corp. delivered a notice of redemption to holders of 2026 Secured Notes for the redemption of all $114.7 million aggregate principal amount of 2026 Secured Notes not purchased in the 2026 Secured Notes Tender Offer, at a price equal to 102.125% of the principal amount thereof, plus accrued and unpaid interest to the redemption date. On July 26, 2024, concurrently with delivery of notice of redemption, Summit Holdings and Finance Corp. irrevocably deposited $121.2 million in aggregate principal amount of non-callable United States Treasury securities, which included amounts for principal, interest, and premium, with the trustee to satisfy and discharge the 2026 Secured Notes until redeemed on October 15, 2024 with the funds deposited with the trustee. On October 15, 2024, the 2026 Secured Notes were fully repaid.

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•2025 Senior Notes Redemption. On July 17, 2024, Summit Holdings and Finance Corp. delivered a conditional notice of redemption to holders of 2025 Senior Notes for the redemption of all $49.8 million aggregate principal amount of outstanding 2025 Senior Notes, at a price equal to 100.000% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, conditioned on closing of the offering of the Initial 2029 Secured Notes. On July 26, 2024, concurrently with closing of the offering of the Initial 2029 Secured Notes, Summit Holdings and Finance Corp. irrevocably deposited $50.6 million in aggregate principal amount of non-callable United States Treasury securities, which included amounts for principal and interest, with the trustee to satisfy and discharge the 2025 Senior Notes until redeemed with the funds deposited with the trustee. On August 16, 2024, the 2025 Senior Notes were fully repaid.

•Corporate Reorganization. On August 1, 2024, following unitholder approval at SMLP’s Special Meeting of Unitholders on July 18, 2024, SMLP consummated a previously announced transaction that resulted in SMLP becoming a wholly owned subsidiary of the Company. Upon the consummation of the Corporate Reorganization, each outstanding common unit of SMLP was converted into the right to receive 1.000 shares of common stock of the Company and each outstanding Series A Preferred Unit was converted into the right to receive 1.000 shares of Series A Preferred Stock of the Company, with the liquidation preference of each share of Series A Preferred Stock initially equal to $1,000 and the Series A Certificate of Designation deeming all accumulated and unpaid distributions on the Series A Preferred Units to be Series A Unpaid Cash Dividends (as defined in the Series A Certificate of Designation) per share of Series A Preferred Stock, which constituted all consideration to be paid in respect to such Series A Preferred Units, and any rights to accumulated and unpaid distributions on such Series A Preferred Units were discharged.

The Corporate Reorganization was accounted for as a common-control transaction between SMLP and the Company as a result of SMLP’s unitholders controlling both SMLP and the Company before and after the Corporate Reorganization. In the case of this common-control transaction, the historical financial statements of SMLP became the historical financial statements of the Company, except for certain changes that conform SMLP’s historical financial statements to a corporate entity. These changes include, but are not limited to, the reclassification of SMLP’s capital accounts to shareholders’ equity accounts and an update of certain limited partner terms to synonymous corporate entity terms. The Corporate Reorganization had no impact to historical revenues, expenses, assets, liabilities, or cash flows.

•Tall Oak Acquisition. On December 2, 2024, the Company completed the transaction contemplated in the Tall Oak Business Contribution Agreement, pursuant to which Tall Oak Parent contributed all of its equity interests in Tall Oak to SMLP in exchange for total consideration equal to $425.0 million. Total consideration consisted of (i) a $155.0 million cash payment, (ii) cash earn-out payments of up to $25.0 million subject to Tall Oak and its customers meeting certain development requirements and (iii) the issuance of 7,471,008 shares of Class B Common Stock of the Company and 7,471,008 Partnership Common Units of SMLP (causing SMLP to be treated as a partnership for U.S. federal income tax purposes), that are exchangeable into an equivalent quantity of the Company’s common stock on a 1:1 exchange ratio. Upon completion of the Tall Oak Acquisition, the Company’s tax structure shifted to the Up-C Structure.

Key Matters for the Year ended December 31, 2023. The following items are reflected in our financial results for the fiscal year ended 2023:

•Strategic review. As we previously announced in October 2023, based on our then-recent and expected financial performance, as well as interest received from third parties for potential transactions, ranging from the sale of specific assets to consideration for the whole SMLP, our Board of Directors engaged external advisors to evaluate strategic alternatives for us with the goal of maximizing value for our unitholders. These alternatives included, but were not limited to, continued execution of our business plan, sale of assets, refinancing parts or the entirety of our capital structure, sale of SMLP by merger or cash, or any combination of these and other alternatives. The strategic review concluded in 2024 and is discussed above.

•Refinancing of 2025 Senior Notes. In November 2023, we entered into a private agreement to issue a total of $209.5 million aggregate principal amount of 2026 Unsecured Notes in exchange for $180.0 million aggregate principal amount of our existing 2025 Senior Notes and $29.5 million in cash (the “2023 Exchange”). The exchanged 2025 Senior Notes were cancelled. The cash raised was used to repurchase $29.7 million aggregate principal amount of existing 2025 Senior Notes (together with the 2023 Exchange, the “2023 Exchange Transactions”) that were not exchanged. As of December 31, 2023, following the consummation of the 2023 Exchange Transactions, approximately $49.8 million of 2025 Senior Notes remained outstanding.

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•Integration of DJ Acquisitions. Our financial results for the year ended December 31, 2023 include our first full year with the assets acquired in the 2022 DJ Acquisitions. During 2023, we worked on integrating the 2022 DJ Acquisitions into our existing DJ Basin assets and began to achieve capital and operating synergies. Those integration efforts continued into 2024.

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 current Russia-Ukraine conflict, the international sanctions against Russia, continued conflict in the Middle East 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.

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 shareholder value. This may include opportunistic acquisitions, divestitures, 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 Amended and Restated ABL Facility, the Permian Credit Facility, and access to debt 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 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.

Natural gas, NGL and crude oil supply and demand dynamics. Natural gas continues to be a critical component of energy supply and demand in the United States. The average spot price of natural gas decreased by approximately 13% from 2023 to 2024, primarily due to natural gas supply exceeding demand. The average daily Henry Hub Natural Gas Spot Price was $2.19 per MMBtu during 2024, compared with $2.53 per MMBtu during 2023. As of January 31, 2025, Henry Hub 12-month strip pricing closed at 3.04 per MMBtu. During 2024, the number of active natural gas drilling rigs in the continental United States decreased from 120 in December 2023 to 102 in December 2024, according to Baker Hughes. Over the long term, we believe that the prospects for continued natural gas demand are favorable and will be driven primarily by global population and economic growth, as well as the continued displacement of coal-fired electricity generation by natural gas-fired electricity generation and increase in U.S. LNG exports. Over the next several years, we expect natural gas prices will support continued upstream industry activity by producers focused on natural gas production.

In addition, certain of our gathering systems are directly affected by crude oil supply and demand dynamics. Crude oil prices decreased in 2024, with the average daily Cushing, Oklahoma West Texas Intermediate crude oil spot price average of $77.58 per barrel during 2023 decreasing to an average of $76.63 per barrel during 2024, representing a 1% decrease. As of January 31, 2025, West Texas Intermediate 12-month strip pricing closed at 72.53 per barrel. During 2024, the number of active crude oil drilling rigs in the continental United States decreased from 500 in December 2023 to 483 in December 2024, according to Baker Hughes. Over the next several years, we expect that crude oil prices will support continued drilling activity and increasing production in the Williston Basin, Permian Basin, and given the current regulatory environment in Colorado, in rural parts of the DJ Basin where we operate.

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Despite improving fundamentals that should support additional development activities, we note that over the last several years there has been an increasing societal opposition to the production of hydrocarbons generally, which may be reflected in legislation, executive orders or regulations that may significantly restrict the domestic production of fossil fuels, including natural gas.

Growth in production from U.S. shale plays. Over the past several years, natural gas production from unconventional shale resources has increased due to advances in technology that allow producers to extract significant volumes of natural gas from unconventional shale plays on favorable economic terms relative to most conventional plays. In recent years, a number of producers and their joint venture partners, including large international operators, industrial manufacturers and private equity sponsors, have committed significant capital to the development of these unconventional resources, including the Piceance, Barnett, Bakken, Permian and Arkoma Basin shale plays in which we operate. We believe that these long-term capital investments should support drilling activity in unconventional shale plays over the long term.

Rate of growth in production from U.S. shale plays. Some of our producer customers have adjusted their drilling and completion activities and schedules to manage drilling and completion costs at levels that are achievable using internally generated cash flow from their underlying operations. Historically, as part of a strategy to accelerate production growth, these producers would raise external capital to fund drilling and completion costs in excess of the cash flows generated from their underlying assets. Producers are experiencing increasing pressure from their investors to focus on returning capital and maximizing free cash flow versus re-investing that cash flow into development. In general, we expect our producer customers to maintain moderate completion and production activities across many of our systems relative to our previous expectations as a result of the commodity price environment and a continuation of the general trend of producers constraining drilling and completion activity to levels that can be satisfied with internally generated cash flow.

Capital markets availability and cost of capital. Capital markets conditions, including but not limited to availability and higher borrowing costs, could affect our ability to access the debt and equity capital markets, to the extent necessary, to fund our future growth. In addition, interest rates on future credit facilities and debt offerings could be higher than current levels, causing our financing costs to increase accordingly.

The borrowings under our Amended and Restated ABL Facility, which have a variable interest rate, expose us to the risk of increasing interest rates.

Inflation and operating costs. The annual rate of inflation in the United States hit 6.5% in December 2022, one of the highest increases in more than three decades, as measured by the Consumer Price Index. While inflation has declined since the second half of 2022, declining to 2.9% in December 2024, further increases in inflation in 2024 could increase our operating costs and the overall cost of capital projects we undertake. While some of our fee arrangements escalate based on changes in price indexes, these fee escalations may not be sufficient to offset an increase in our expenditures. Furthermore, inflation may impact producers’ economic decision making, which in turn could impact their willingness to develop acreage in areas that are more susceptible to inflationary pressures and labor force shortages.

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How We Evaluate Our Operations

We currently conduct and report our operations in the midstream energy industry through four reportable segments: Rockies, Permian, Piceance and Mid-Con. 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 (see Note 18 - Segment Information to the consolidated financial statements). Our management uses a variety of financial and operational metrics to analyze our consolidated and segment performance and we view these metrics as important factors in evaluating our profitability. These metrics include (i) throughput volume, (ii) revenues, (iii) operation and maintenance expenses, (iv) capital expenditures and (v) segment adjusted EBITDA.

During the year ended December 31, 2024, we divested of our Northeast operations which consisted of midstream assets located in the Marcellus shale play and midstream assets located in the Utica shale play together with our equity method investment in Ohio Gathering that is focused on the Utica Shale.

Throughput Volume

The volume of (i) natural gas that we gather, compress, treat and/or process and (ii) crude oil and produced water that we gather depends on the level of production from natural gas or crude oil wells connected to our gathering systems. Aggregate production volumes are impacted by the overall amount of drilling and completion activity. Furthermore, because the production rate of natural gas and crude oil wells decline over time, production can only be maintained or increased by new drilling or other activity.

As a result, we must continually obtain new supplies of production to maintain or increase the throughput volume on our systems. Our ability to maintain or increase throughput volumes from existing customers and obtain new supplies of throughput is impacted by:

•successful drilling activity within our AMIs;

•the level of work-overs and recompletions of wells on existing pad sites to which our gathering systems are connected;

•the number of new pad sites in our AMIs awaiting connections;

•our ability to compete for volumes from successful new wells in the areas in which we operate outside of our existing AMIs; and

•our ability to gather, treat and/or process production that has been released from commitments with our competitors.

We report volumes gathered for natural gas in cubic feet per day. We aggregate crude oil and produced water gathering and report volumes gathered in barrels per day.

Revenues

Our revenues are primarily attributable to the volumes that we gather, compress, treat and/or process and the rates we charge for those services. A majority of our gathering and processing agreements are fee-based, which limits our direct exposure to fluctuations in commodity prices; however, certain of our contracts have rates that are directly impacted by commodity prices. We also have percent-of-proceeds arrangements with certain customers under which the gathering and processing revenues that we earn correlate directly with the fluctuating price of natural gas, condensate and NGLs.

Certain of our gathering and processing agreements contain MVCs pursuant to which our customers agree to ship or process a minimum volume of production on our gathering systems, or, in some cases, to pay a minimum monetary amount, over certain periods during the term of the MVC. These MVCs help us generate stable revenues and serve to mitigate the financial impact associated with declining volumes.

Operation and Maintenance Expenses

We seek to maximize the profitability of our operations in part by minimizing, to the extent appropriate, expenses directly tied to operating our assets. Direct labor costs, compression costs, ad valorem taxes, repair and non-capitalized maintenance costs, integrity management costs, utilities and contract services comprise the most significant portion of our operation and maintenance expense. Other than utilities expense, these expenses are largely independent of volumes delivered through our gathering systems but may fluctuate depending on the activities performed during a specific period.

Our operations and maintenance expenses also include costs that are reimbursed by our customers, which are included in Other revenues.

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Segment Adjusted EBITDA

Segment adjusted EBITDA is a supplemental financial measure used by management and by external users of our financial statements such as investors, commercial banks, research analysts and others.

Segment adjusted EBITDA is used to assess:

•the ability of our assets to generate cash sufficient to make cash distributions and support our indebtedness;

•the financial performance of our assets without regard to financing methods, capital structure or historical cost basis;

•our operating performance and return on capital as compared to other companies in the midstream energy sector, without regard to financing or capital structure;

•the attractiveness of capital projects and acquisitions and the overall rates of return on alternative investment opportunities; and

•the financial performance of our assets without regard to (i) income or loss from equity method investees, (ii) the impact of the timing of MVC shortfall payments under our gathering agreements or (iii) the timing of impairments or other noncash income or expense items.

Additional Information. For additional information, see the “Results of Operations” section herein and the notes to the consolidated financial statements contained in Item 8. Financial Statements and Supplementary Data.

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Results of Operations

Consolidated Overview for the Years Ended December 31, 2024 and 2023

The following table presents certain consolidated data and volume throughput for the years ended December 31, 2024 and 2023.

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*Not considered meaningful

(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 Years Ended December 31, 2024 and 2023.”

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Volumes – Gas. Natural gas throughput volumes decreased 430 MMcf/d for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily reflecting:

•a volume throughput decrease of 490 MMcf/d for the Northeast segment;

•a volume throughput decrease of 13 MMcf/d for the Piceance segment; offset by

•a volume throughput increase of 58 MMcf/d for the Mid-Con segment;

•a volume throughput increase of 15 MMcf/d for the Rockies segment.

Volumes – Liquids. Crude oil and produced water volume throughput for the Rockies segment decreased 6 Mbbl/d for the year ended December 31, 2024 compared to the year ended December 31, 2023.

For additional information on volumes, see the “Segment Overview for the Years Ended December 31, 2024 and 2023” section herein.

Revenues. Total revenues decreased $29.3 million during the year ended December 31, 2024 compared to the year ended December 31, 2023 comprised of a $47.4 million decrease in gathering services and related fees, offset by a $15.8 million increase in natural gas, NGLs and condensate sales and a $2.3 million increase in Other revenues.

Gathering services and related fees. Gathering services and related fees decreased $47.4 million compared to the year ended December 31, 2023, primarily reflecting:

•a $45.0 million decrease in the Northeast segment;

•a $7.9 million decrease in the Piceance segment;

•a $2.7 million decrease in the Rockies segment; offset by

•an $8.2 million increase in the Mid-Con segment.

Natural Gas, NGLs and Condensate Sales. Natural gas, NGLs and condensate sales revenue increased $15.8 million compared to the year ended December 31, 2023, primarily reflecting:

•a $16.8 million increase in the Rockies segment;

•a $0.9 million increase in the Mid-Con segment; offset by

•a $2.0 million decrease in the Piceance segment.

Costs and expenses. Total costs and expenses increased $89.3 million during the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily reflecting:

General and administrative. General and administrative expense increased $13.4 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to increased employee salaries and benefit expense, as well as professional and other expenses associated with our Corporate Reorganization.

Depreciation and amortization. Depreciation and amortization expense decreased $22.1 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to the sale of our Mountaineer Midstream system and disposition of Summit Utica during 2024 as well as a reduction to amortization expense in connection with certain intangible assets that became fully amortized in December 2023.

Transaction costs. Transaction costs during 2024 were primarily related to the Utica Sale that closed on March 22, 2024, the Mountaineer Transaction that closed on May 1, 2024, the Tall Oak Acquisition which closed on December 2, 2024 and the costs incurred in connection with our Corporate Reorganization and strategic alternatives review.

Long-lived asset impairments. In 2024, we recognized impairments of $68.3 million primarily in connection with the Mountaineer Transaction.

Gain on sale of business. Gain on sale of business is primarily related to the gain recognized in connection with the disposition of the Utica midstream business in March of 2024.

Gain on sale of equity method investment. Gain on sale of equity method investment is related to disposition of our equity method investment Ohio Gathering in March of 2024.

Interest Expense. Interest expense decreased $25.3 million during the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to $27.3 million of reduced interest expense as a result of the 2026 Secured Notes Tender Offer and the 2026 Secured Notes Asset Sale Offer that occurred in July 2024 and May 2024, respectively, $16.0 million of reduced interest expense as a result of decreased borrowings on the Amended and Restated ABL Facility, $11.9

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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, partially offset by $21.4 million of increased borrowing costs on the 2029 Secured Notes issued in July 2024 and $8.9 million of increased borrowing costs on the 2026 Unsecured Notes issued in November 2023.

Loss on early extinguishment of debt. Loss on early extinguishment of debt in 2024 is primarily related to amortization of debt issuance costs in connection with extinguishments of our 2026 Unsecured Notes, 2026 Secured Notes and 2025 Senior Notes.

Income taxes. Effective August 1, 2024, we became a corporation and therefore subject to United States federal and state income taxes. Prior to this date SMLP was treated as a partnership for federal and state income tax purposes, in which SMLP’s taxable income or loss was passed through to its unitholders.

See Note 9 – Debt to the consolidated financial statements for additional details. Interest expense does not include the impact of gains or losses from our interest rate swaps entered into for the Permian Transmission Credit Facilities.

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Segment Overview for the Years Ended December 31, 2024 and 2023

Rockies.

Volume throughput for our Rockies reportable segment follows.

Natural gas. Natural gas volume throughput in 2024 increased 13% compared to the year ended December 31, 2023, primarily reflecting 92 new well connections that came online during 2024, partially offset by winter related interruptions which occurred during the first quarter of 2024.

For the years ended December 31, 2024 and 2023, costs of natural gas and NGLs includes $50.6 million and $39.6 million, respectively, of gathering fees collected under percentage of proceeds arrangements.

Liquids. Liquids volume throughput in 2024 decreased 8% compared to the year ended December 31, 2023, primarily due to natural production declines, offset by 37 new well connections that came online during 2024.

Financial data for our Rockies reportable segment follows.

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* Not considered meaningful

Year ended December 31, 2024. Segment adjusted EBITDA increased $6.4 million compared to the year ended December 31, 2023 primarily as a result of increased natural gas throughput as described above, partially offset by a decrease in liquids throughput and lower natural gas and NGL pricing.

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Permian.

Volume throughput for our Permian reportable segment follows.

Volume throughput for Double E increased 88% compared to the year ended December 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:

Financial data for our Permian reportable segment follows.

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* Not considered meaningful

Year ended December 31, 2024. Segment adjusted EBITDA increased $7.0 million compared to the year ended December 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.

Volume throughput decreased 4% in 2024 compared to the year ended December 31, 2023, primarily as a result of natural production declines.

Financial data for our Piceance reportable segment follows.

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* Not considered meaningful

Year ended December 31, 2024. Segment adjusted EBITDA decreased $7.0 million compared to the year ended December 31, 2023, primarily related to a decrease in volume throughput described above, contractual step-downs associated with MVC shortfall payments and a reduction in condensate margin.

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Mid-Con.

Volume throughput for our Mid-Con reportable segment follows.

Volume throughput increased 32% compared to the year ended December 31, 2023, primarily as a result of 27 wells that came online during 2024 and the acquisition of Tall Oak in December 2024, partially offset by temporary production curtailments associated with reductions in commodity pricing.

Financial data for our Mid-Con reportable segment follows.

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*Not considered meaningful

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

Year ended December 31, 2024. Segment adjusted EBITDA increased $4.5 million compared to the year ended December 31, 2023 primarily as a result of increased volume throughput partially offset by production curtailments discussed above and unfavorable margin mix.

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Northeast.

Volume throughput for the Northeast reportable segment follows.

On March 22, 2024, we completed the disposition of Summit Utica, the owner of our previously owned equity method investment, Ohio Gathering, and on May 1, 2024, we completed the disposition of our Mountaineer Midstream system.

Volume throughput for the Northeast, excluding Ohio Gathering, decreased 71% compared to the year ended December 31, 2023 primarily due to the sale of our Mountaineer Midstream system and the disposition of Summit Utica as discussed above.

Volume throughput for the Ohio Gathering system decreased 73% compared to the year ended December 31, 2023, primarily due to the disposition of Summit Utica, which owned an interest in the Ohio Gathering system.

Financial data for our Northeast reportable segment follows.

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*Not considered meaningful

(1) SMLP recorded its 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).

Year ended December 31, 2024. Segment adjusted EBITDA decreased $63.6 million compared to the year ended December 31, 2023, primarily as the result of the sale of our Mountaineer Midstream system and the disposition of Summit Utica, the owner of our previously owned equity method investment, Ohio Gathering.

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Corporate and Other Overview for the Years Ended December 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, interest expense and losses on early extinguishment of debt. Corporate and Other includes intercompany eliminations.

_________________

* Not considered meaningful

Transaction costs. Transaction costs during 2024 were primarily related to the Utica Sale that closed on March 22, 2024, the Mountaineer Transaction that closed on May 1, 2024, the Tall Oak Acquisition which closed on December 2, 2024 and the costs incurred in connection with our strategic alternatives review.

General and administrative. General and administrative expense attributable to Corporate and Other increased by $13.5 million compared to the year ended December 31, 2023, primarily due to increased employee salaries and benefit expense, as well as certain professional and other expenses associated with our Corporate Reorganization.

Interest Expense. Interest expense decreased $25.3 million during the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to $27.3 million of reduced interest expense as a result of the 2026 Secured Notes Tender Offer and the 2026 Secured Notes Asset Sale Offer that occurred in July 2024 and May 2024, respectively, $16.0 million of reduced interest expense as a result of decreased borrowings on the Amended and Restated ABL Facility, $11.9 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, partially offset by $21.4 million of increased borrowing costs on the 2029 Secured Notes issued in July 2024 and $8.9 million of increased borrowing costs on the 2026 Unsecured Notes issued in November 2023.

See Note 9 – Debt to the consolidated financial statements for additional details. Interest expense does not include the impact of gains or losses from our interest rate swaps entered into for the Permian Transmission Credit Facilities.

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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 Amended and Restated 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, and based on current expectations, the long-term, 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 December 31, 2024, our material off-balance sheet arrangements and transactions include (i) letters of credit outstanding against our Amended and Restated ABL Facility aggregating to $0.8 million and (ii) letters of credit outstanding against our Permian Transmission Credit Facilities 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.

We are in compliance with all covenants contained in the indenture governing the 2029 Secured Notes, the Amended and Restated ABL Facility and the Permian Transmission Credit Facilities. The Amended and Restated ABL Facility requires that Summit Holdings not permit (i) the First Lien Net Leverage Ratio (as defined in the Amended and Restated 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 Amended and Restated ABL Agreement) as of the last day of any fiscal quarter to be less than 2.00:1.00. As of December 31, 2024, the First Lien Net Leverage Ratio was 0.41:1.00 and the Interest Coverage Ratio was 2.84:1.00, in each case including the pro forma impacts of (i) the January 10, 2025 issuance by Summit Holdings of an additional $250.0 million in aggregate principal amount of 2029 Secured Notes and (ii) our March 10, 2025 completion of the transaction contemplated in the Membership Interest Purchase Agreement, dated as of March 10, 2025, by and among us, Summit Holdings, Fundare Resources Company HoldCo, LLC, a Delaware limited liability company (“Fundare”), and solely for purposes of Section 9.19 thereto, Fundare Resources Company, LLC, a Delaware limited liability company, pursuant to which Fundare contributed all of its equity interests in Moonrise Midstream, LLC, a Delaware limited liability company, to Summit Holdings in exchange for total consideration equal to $90.0 million. See Note 19 - Subsequent Events to the consolidated financial statements for additional information.

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Amended and Restated ABL Facility. Concurrently with the issuance of the 2029 Secured Notes, on July 26, 2024, Summit Holdings, as borrower, amended and restated its existing first-lien, senior secured credit agreement, with SMLP, consisting of a $500.0 million asset-based revolving credit facility. As of December 31, 2024, the Amended and Restated ABL Facility will mature on the earliest of (a) July 26, 2029, (b) July 31, 2029 if either (i) the outstanding amount of the 2029 Secured Notes (or any refinancing debt permitted under the Amended and Restated ABL Facility in respect thereof that has a final maturity date, scheduled amortization or any other scheduled repayment, mandatory prepayment, mandatory redemption or sinking fund obligation prior to the date that is 91 days after the Amended and Restated ABL Termination Date (provided, that the terms of such permitted refinancing debt may (x) require the payment of interest from time to time and (y) include customary mandatory redemptions, prepayments or offers to purchase with proceeds of asset sales or upon the occurrence of a change of control)) on such date equals or exceeds $50.0 million or (ii) the outstanding amount of such debt described in clause (i) above on such date is less than $50.0 million and Liquidity (as defined in the Amended and Restated ABL Agreement) at any time on or after such date is less than the sum of (A) such outstanding amount and (B) the greater of (x) 10% of the aggregate Commitments (as defined in the Amended and Restated ABL Agreement) then in effect and (y) $50.0 million (and, for the avoidance of doubt, once the Amended and Restated ABL Termination Date occurs it may not be unwound as a result of Liquidity (as defined in the Amended and Restated ABL Agreement) increasing on a subsequent date), and (c) any date on which the aggregate Commitments terminate thereunder. As of December 31, 2024, there was $305.0 million outstanding under the Amended and Restated ABL Facility and the available borrowing capacity totaled $194.2 million after giving effect to the issuance thereunder of $0.8 million of outstanding but undrawn irrevocable standby letters of credit.

2029 Secured Notes. On July 26, 2024, Summit Holdings issued $575.0 million aggregate principal amount of 8.625% Senior Secured Second Lien Notes due 2029. The 2029 Secured Notes are guaranteed on a senior second-priority basis by Summit Midstream Corporation and certain of Summit Midstream Corporation’s existing and future subsidiaries and are secured on a second-priority basis by substantially the same collateral that is pledged for the benefit of the lenders under the Amended and Restated ABL Facility. The 2029 Secured Notes mature on October 31, 2029 and have interest payable semi-annually in arrears on each February 15 and August 15. As of December 31, 2024, the outstanding balance of the 2029 Secured Notes was $575.0 million, and we subsequently issued an additional $250.0 million of the 2029 Secured Notes on January 10, 2025. As of March 11, 2025, $825.0 million of the 2029 Secured Notes were outstanding. See Note 19 – Subsequent Events, for additional information.

Other. We may in the future use a combination of cash, secured or unsecured borrowings and issuances of our common stock or other securities and the proceeds from asset sales to retire or refinance our outstanding debt or Series A Preferred Stock through privately negotiated transactions, open market repurchases, redemptions, exchange offers, tender offers or otherwise, but we are under no obligation to do so.

Cash Flows

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

Operating activities. Details of cash flows from operating activities follow.

Cash flows from operating activities for the year ended December 31, 2024, primarily reflected:

•a net loss of $113.2 million plus adjustments of $192.9 million for non-cash items; and

•a $18.0 million change in working capital accounts.

Cash flows from operating activities for the year ended December 31, 2023, primarily reflected:

•a net loss of $38.9 million plus adjustments of $185.5 million for non-cash items; and

•a $19.7 million change in working capital accounts.

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Investing activities. Details of cash flows from investing activities follow.

Cash flows used in investing activities during the year ended December 31, 2024 primarily reflected:

•$332.7 million of cash inflows from the proceeds of the sale Ohio Gathering;

•$292.3 million of cash inflows from the proceeds of the Utica Sale (excluding Ohio Gathering);

•$69.3 million of cash inflows from the proceeds of the Mountaineer Transaction;

•$4.4 million of cash inflows from the sale of compressor equipment; partially offset by

•$154.2 million of cash outflows from the Tall Oak Acquisition; and

•$53.6 million of cash outflows for capital expenditures.

Cash flows used in investing activities during the year ended December 31, 2023 primarily reflected:

•$68.9 million of cash outflows for capital expenditures; and

•$3.5 million of capital contributions and costs for our equity method investment in Double E.

Financing activities. Details of cash flows from financing activities follow.

Cash flows used in financing activities during the year ended December 31, 2024 primarily reflected:

•$764.5 million of cash outflows for the 2026 Secured Notes Tender Offer and redemption of 2026 Secured Notes;

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

•$209.5 million of cash outflows from the redemption of 2026 Unsecured Notes;

•$49.8 million of cash outflows from the redemption of 2025 Senior Notes;

•$23.8 million of cash outflows for debt extinguishment costs;

•$15.5 million of cash outflows for repayments on the Permian Transmission Term Loan;

•$13.6 million of cash outflows for the Excess Cash Flow Offer;

•$6.9 million of cash outflows for the 2026 Secured Notes Asset Sale Offer; offset by

•$565.8 million of cash inflows from the issuance of the 2029 Secured Notes;

•$305.0 million of cash inflows from borrowings on the Amended and Restated ABL Facility.

Cash flows provided by financing activities during the year ended December 31, 2023 primarily reflected:

•$87.0 million of cash outflows for repayments on the ABL Facility;

•$29.7 million of cash outflows for the repurchase of 2025 Senior Notes;

•$10.5 million of cash outflows for repayments on the Permian Transmission Term Loan; offset by

•$29.5 million of borrowings under the 2026 Unsecured Notes; and

•$70.0 million from borrowings under the ABL Facility.

Contractual Obligations Update

The Company’s cash flows generated from operations are the primary source for funding various contractual obligations. The table below summarizes the Company’s major commitments as of December 31, 2024 through 2029 (in thousands):

(1)Amounts include an estimate for interest cost based on either the stated interest rate for fixed rate indebtedness or the interest rate in effect as of December 31, 2024 for variable rate indebtedness.

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(2)Amounts do not reflect the additional $250.0 million of the 2029 Secured Notes that Summit Holdings issued on January 10, 2025. See Note 19 – Subsequent Events, for additional information.

(3)Amounts include mandatory principal repayments of $16.6 million in 2025, $17.0 million in 2026 and $17.8 million in 2027.

(4)Global Settlement amounts in the table exclude interest owed on the unpaid portion. See Note 10 - Commitments and Contingencies to the consolidated financial statements for additional details.

(5)Amounts exclude potential cumulative earn-out payments continuing through March 31, 2026 not to exceed $25.0 million in connection with an incurred earn-out liability as part of the Tall Oak Acquisition.

Capital Requirements

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 required 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.

In connection with the consummation of the Corporate Reorganization, the Partnership Agreement was amended to, among other things, reflect that all of the issued and outstanding limited partnership interests of the Partnership are held by Summit Midstream Corporation. For information on the Corporate Reorganization, see Note 1 - Organization, Business Operations, Corporate Reorganization and Presentation and Consolidation.

For the year ended December 31, 2024, cash paid for capital expenditures totaled $53.6 million which included $11.7 million of maintenance capital expenditures. For the year ended December 31, 2024, we contributed $3.9 million to Double E.

We rely primarily on internally generated cash flows, our 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 Amended and Restated ABL Facility and the Permian Transmission Credit Facilities, 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 2025 capital program will range from $65.0 million to $75.0 million, including between $15.0 million and $20.0 million of maintenance capital expenditures. We estimate that we will make an additional investment in our Double E equity method investee of 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 NGL industries and markets and (iii) our ability to obtain financing from commercial banks, the capital markets, or other financing sources.

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.

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Critical Accounting Estimates

The discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. We evaluate our estimates on an on-going basis, based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. We believe the following describes significant judgments and estimates used in the preparation of our consolidated financial statements.

Long-Lived Assets. Our long-lived assets consist of property, plant and equipment and intangible assets that have been obtained by multiple business combinations and property, plant and equipment that has been constructed in recent years. The initial recording of a majority of these long-lived assets was at fair value, which is estimated by management primarily utilizing market-related information, asset specific information and other projections on the performance of the assets acquired (including an analysis of discounted cash flows which can involve assumptions on weighted average cost of capital and projected cash flows of the assets acquired). Management reviews this information to determine its reasonableness in comparison to the assumptions utilized in determining the purchase price of the assets in addition to other market-based information that was received through the purchase process and other sources. These projections also include projections on potential and contractual obligations assumed in these acquisitions. Due to the imprecise nature of the projections and assumptions utilized in determining fair value, actual results can and often do, differ from our estimates.

As of December 31, 2024, we had net property, plant and equipment with a carrying value of approximately $1.8 billion and net intangible assets with a carrying value of approximately $154.3 million. When evidence exists that we will not be able to recover a long-lived asset’s carrying value through future cash flows, we write down the carrying value of the asset to its estimated fair value. We test assets for impairment when events or circumstances indicate that the carrying value of a long-lived asset may not be recoverable. With respect to property, plant and equipment and our amortizing intangible assets, the carrying value of a long-lived asset is not recoverable if the carrying value exceeds the sum of the undiscounted cash flows expected to result from the asset’s use and eventual disposal. In this situation, we would recognize an impairment loss equal to the amount by which the carrying value exceeds the asset’s fair value. We determine fair value using a combination of approaches, including a market-based approach and an income-based approach in which we discount the asset’s expected future cash flows to reflect the risk associated with achieving the underlying cash flows. Any impairment determinations involve significant assumptions and judgments. Differing assumptions regarding any of these inputs could have a significant effect on the various valuations. As such, the fair value measurements utilized within these estimates are classified as non-recurring Level 3 measurements in the fair value hierarchy because they are not observable from objective sources. Due to the volatility of the inputs used, we cannot predict the likelihood of any future impairment.

We evaluate our equity method investments for impairment when we believe the current fair value may be less than the carrying amount and record an impairment if we believe the decline in value is other than temporary.

Business Combinations. In accordance with accounting guidance for business combinations, we allocate the purchase price of an acquired business to its identifiable assets and liabilities based on estimated fair values. The excess of the purchase price over the amount allocated to the assets and liabilities, if any, is recorded as goodwill. We use all available information to estimate fair values. We typically engage outside appraisal firms to assist in the fair value determination of identifiable intangible assets such as trade names and any other significant assets or liabilities. We adjust the preliminary purchase price allocation, as necessary, up to one year after the acquisition closing date as we obtain more information regarding asset valuations and liabilities assumed.

Our purchase price allocation methodology contains uncertainties because it requires management to make assumptions and to apply judgment to estimate the fair value of acquired assets and liabilities. Management estimates the fair value of assets and liabilities based upon quoted market prices, the carrying value of the acquired assets and widely accepted valuation techniques, including discounted cash flows and market multiple analysis. Unanticipated events or circumstances may occur which could affect the accuracy of our fair value estimates, including assumptions regarding industry economic factors and business strategies. If actual results are materially different than the assumptions we used to determine fair value of the assets and liabilities acquired through a business combination, it is possible that adjustments to the carrying values of such assets and liabilities will have an impact on our net earnings.

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