CONDENSED CONSOLIDATING FINANCIAL INFORMATION | CONDENSED CONSOLIDATING FINANCIAL INFORMATION In July 2014 and June 2013, the Co-Issuers issued the Senior Notes. As of December 31, 2015, the Senior Notes were fully and unconditionally and jointly and severally guaranteed on a senior unsecured basis by the then-Guarantor Subsidiaries and SMLP. Due to the common control nature of the 2016 Drop Down, we are including the following supplemental condensed consolidating financial information. This information reflects SMLP's separate accounts, the combined accounts of the Co-Issuers, the combined accounts of the Guarantor Subsidiaries, the combined accounts of the Non-Guarantor Subsidiaries and the consolidating adjustments for the dates and periods indicated as-if the guarantor structure that exists subsequent to the August 2016 consent and waiver agreement was executed prior to 2016 (see Note 9). For purposes of the following consolidating information, each of SMLP and Summit Holdings account for their subsidiary investments under the equity method of accounting. Condensed Consolidating Balance Sheets. Balance sheets as of December 31, 2015 and 2014 follow. December 31, 2015 SMLP Co-Issuers Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating adjustments Total (In thousands) Assets Cash and cash equivalents $ 73 $ 12,407 $ 6,930 $ 2,383 $ — $ 21,793 Accounts receivable — — 84,021 5,560 — 89,581 Due from affiliate 3,168 151,443 207,651 — (362,262 ) — Other current assets 540 — 2,672 361 — 3,573 Total current assets 3,781 163,850 301,274 8,304 (362,262 ) 114,947 Property, plant and equipment, net 1,178 — 1,462,623 348,982 — 1,812,783 Intangible assets, net — — 438,093 23,217 — 461,310 Goodwill — — 16,211 — — 16,211 Investment in equity method investees — — — 751,168 — 751,168 Other noncurrent assets 3,480 4,611 162 — — 8,253 Investment in subsidiaries 2,438,395 3,222,187 — — (5,660,582 ) — Total assets $ 2,446,834 $ 3,390,648 $ 2,218,363 $ 1,131,671 $ (6,022,844 ) $ 3,164,672 Liabilities and Partners' Capital Trade accounts payable $ 482 $ — $ 18,489 $ 21,837 $ — $ 40,808 Due to affiliate 360,243 — — 3,168 (362,262 ) 1,149 Deferred revenue — — 677 — — 677 Ad valorem taxes payable 9 — 9,881 381 — 10,271 Accrued interest — 17,483 — — — 17,483 Accrued environmental remediation — — — 7,900 — 7,900 Other current liabilities 4,558 — 7,405 1,334 — 13,297 Total current liabilities 365,292 17,483 36,452 34,620 (362,262 ) 91,585 Long-term debt 332,500 934,770 — — — 1,267,270 Deferred revenue — — 45,486 — — 45,486 Noncurrent accrued environmental remediation — — — 5,764 — 5,764 Other noncurrent liabilities 1,743 — 5,503 22 — 7,268 Total liabilities 699,535 952,253 87,441 40,406 (362,262 ) 1,417,373 Total partners' capital 1,747,299 2,438,395 2,130,922 1,091,265 (5,660,582 ) 1,747,299 Total liabilities and partners' capital $ 2,446,834 $ 3,390,648 $ 2,218,363 $ 1,131,671 $ (6,022,844 ) $ 3,164,672 December 31, 2014 SMLP Co-Issuers Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating adjustments Total (In thousands) Assets Cash and cash equivalents $ 7,531 $ 11,621 $ 7,353 $ 1,306 $ — $ 27,811 Accounts receivable — — 89,201 3,707 — 92,908 Insurance receivable — — — 25,000 — 25,000 Due from affiliate 764 63,239 97,615 — (161,618 ) — Other current assets 907 — 2,610 83 — 3,600 Total current assets 9,202 74,860 196,779 30,096 (161,618 ) 149,319 Property, plant and equipment, net 1,351 — 1,412,998 208,291 — 1,622,640 Intangible assets, net — — 477,734 11,548 — 489,282 Goodwill — — 265,062 — — 265,062 Investment in equity method investees — — — 706,172 — 706,172 Other noncurrent assets 3,771 6,027 189 — — 9,987 Investment in subsidiaries 2,419,433 3,154,626 — — (5,574,059 ) — Total assets $ 2,433,757 $ 3,235,513 $ 2,352,762 $ 956,107 $ (5,735,677 ) $ 3,242,462 Liabilities and Partners' Capital Trade accounts payable $ 1,144 $ — $ 23,711 $ 13,536 $ — $ 38,391 Due to affiliate 163,565 — — 764 (161,618 ) 2,711 Deferred revenue — — 2,377 — — 2,377 Ad valorem taxes payable 23 — 9,095 61 — 9,179 Accrued interest — 18,858 — — — 18,858 Accrued environmental remediation — — — 25,000 — 25,000 Other current liabilities 1,622 15 12,552 1,118 — 15,307 Total current liabilities 166,354 18,873 47,735 40,479 (161,618 ) 111,823 Long-term debt 435,000 797,207 — — — 1,232,207 Deferred revenue — — 55,239 — — 55,239 Noncurrent accrued environmental remediation — — — 5,000 — 5,000 Other noncurrent liabilities 1,725 — 5,790 — — 7,515 Total liabilities 603,079 816,080 108,764 45,479 (161,618 ) 1,411,784 Total partners' capital 1,830,678 2,419,433 2,243,998 910,628 (5,574,059 ) 1,830,678 Total liabilities and partners' capital $ 2,433,757 $ 3,235,513 $ 2,352,762 $ 956,107 $ (5,735,677 ) $ 3,242,462 Condensed Consolidating Statements of Operations. For the purposes of the following condensed consolidating statements of operations, we allocate general and administrative expenses recognized at the SMLP parent to the Guarantor Subsidiaries and Non-Guarantor Subsidiaries to reflect what those entities' results would have been had they operated on a stand-alone basis. Statements of operations for the years ended December 31, 2015, 2014 and 2013 follow. Year ended December 31, 2015 SMLP Co-Issuers Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating adjustments Total (In thousands) Revenues: Gathering services and related fees $ — $ — $ 310,830 $ 26,989 $ — $ 337,819 Natural gas, NGLs and condensate sales — — 42,079 — — 42,079 Other revenues — — 18,411 2,248 — 20,659 Total revenues — — 371,320 29,237 — 400,557 Costs and expenses: Cost of natural gas and NGLs — — 31,398 — — 31,398 Operation and maintenance — — 87,286 7,700 — 94,986 General and administrative — — 37,926 7,182 — 45,108 Transaction costs 1,342 — — — — 1,342 Depreciation and amortization 603 — 95,586 8,928 — 105,117 Environmental remediation — — — 21,800 — 21,800 Gain on asset sales, net — — (172 ) — — (172 ) Long-lived asset impairment — — 9,305 — — 9,305 Goodwill impairment — — 248,851 — — 248,851 Total costs and expenses 1,945 — 510,180 45,610 — 557,735 Other income 2 — — — — 2 Interest expense (10,494 ) (48,598 ) — — — (59,092 ) Loss before income taxes (12,437 ) (48,598 ) (138,860 ) (16,373 ) — (216,268 ) Income tax benefit 603 — — — — 603 Loss from equity method investees — — — (6,563 ) — (6,563 ) Equity in earnings of consolidated subsidiaries (210,394 ) (161,796 ) — — 372,190 — Net loss $ (222,228 ) $ (210,394 ) $ (138,860 ) $ (22,936 ) $ 372,190 $ (222,228 ) Year ended December 31, 2014 SMLP Co-Issuers Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating adjustments Total (In thousands) Revenues: Gathering services and related fees $ — $ — $ 255,211 $ 12,267 $ — $ 267,478 Natural gas, NGLs and condensate sales — — 97,094 — — 97,094 Other revenues — — 20,398 2,199 — 22,597 Total revenues — — 372,703 14,466 — 387,169 Costs and expenses: Cost of natural gas and NGLs — — 72,415 — — 72,415 Operation and maintenance — — 88,927 5,942 — 94,869 General and administrative — — 40,447 2,834 — 43,281 Transaction costs 2,985 — — — — 2,985 Depreciation and amortization 588 — 86,762 3,528 — 90,878 Environmental remediation — — — 5,000 — 5,000 Loss on asset sales, net — — 442 — — 442 Long-lived asset impairment — — 5,505 — — 5,505 Goodwill impairment — — 54,199 — — 54,199 Total costs and expenses 3,573 — 348,697 17,304 — 369,574 Other income — — 1,189 — — 1,189 Interest expense (8,417 ) (40,169 ) — — — (48,586 ) (Loss) income before income taxes (11,990 ) (40,169 ) 25,195 (2,838 ) — (29,802 ) Income tax (expense) benefit (1,680 ) — 826 — — (854 ) Loss from equity method investees — — — (16,712 ) — (16,712 ) Equity in earnings of consolidated subsidiaries (33,698 ) 6,471 — — 27,227 — Net (loss) income $ (47,368 ) $ (33,698 ) $ 26,021 $ (19,550 ) $ 27,227 $ (47,368 ) Year ended December 31, 2013 SMLP Co-Issuers Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating adjustments Total (In thousands) Revenues: Gathering services and related fees $ — $ — $ 213,979 $ 2,373 $ — $ 216,352 Natural gas, NGLs and condensate sales — — 88,185 — — 88,185 Other revenues — — 21,522 101 — 21,623 Total revenues — — 323,686 2,474 — 326,160 Costs and expenses: Cost of natural gas and NGLs — — 68,037 — — 68,037 Operation and maintenance — — 77,122 1,053 — 78,175 General and administrative — — 33,970 2,746 — 36,716 Transaction costs 2,841 — — — 2,841 Depreciation and amortization 454 — 70,122 656 — 71,232 Loss on asset sales, net — — 113 — — 113 Total costs and expenses 3,295 — 249,364 4,455 — 257,114 Other income 5 — — — — 5 Interest expense (2,141 ) (19,173 ) — — — (21,314 ) (Loss) income before income taxes (5,431 ) (19,173 ) 74,322 (1,981 ) — 47,737 Income tax expense — — (729 ) — — (729 ) Equity in earnings of consolidated subsidiaries 52,439 71,612 — — (124,051 ) — Net income (loss) $ 47,008 $ 52,439 $ 73,593 $ (1,981 ) $ (124,051 ) $ 47,008 Condensed Consolidating Statements of Cash Flows. Statements of cash flows for the years ended December 31, 2015, 2014 and 2013 follow. Year ended December 31, 2015 SMLP Co-Issuers Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating adjustments Total (In thousands) Cash flows from operating activities: Net cash provided by (used in) operating activities $ 409 $ (46,716 ) $ 202,324 $ 35,358 $ — $ 191,375 Cash flows from investing activities: Capital expenditures (429 ) — (118,458 ) (153,338 ) — (272,225 ) Contributions to equity method investees — — — (86,200 ) — (86,200 ) Proceeds from asset sales — — 323 — — 323 Acquisitions of gathering systems from affiliate, net of acquired cash (288,618 ) — — — — (288,618 ) Advances to affiliates (2,589 ) (88,221 ) (110,003 ) — 200,813 — Net cash used in investing activities (291,636 ) (88,221 ) (228,138 ) (239,538 ) 200,813 (646,720 ) Year ended December 31, 2015 SMLP Co-Issuers Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating adjustments Total (In thousands) Cash flows from financing activities: Distributions to unitholders (152,074 ) — — — — (152,074 ) Borrowings under revolving credit facility 180,000 187,000 — — — 367,000 Repayments under revolving credit facility (100,000 ) (51,000 ) — — — (151,000 ) Repayments under term loan (182,500 ) — — — — (182,500 ) Deferred loan costs (135 ) (277 ) — — — (412 ) Proceeds from issuance of common units, net 221,977 — — — — 221,977 Contribution from general partner 4,737 — — — — 4,737 Cash advance from Summit Investments to contributed subsidiaries, net 102,500 — 21,719 196,308 — 320,527 Expenses paid by Summit Investments on behalf of contributed subsidiaries 12,655 — 3,864 6,360 — 22,879 Other, net (1,615 ) — (192 ) — — (1,807 ) Advances from affiliates 198,224 — — 2,589 (200,813 ) — Net cash provided by financing activities 283,769 135,723 25,391 205,257 (200,813 ) 449,327 Net change in cash and cash equivalents (7,458 ) 786 (423 ) 1,077 — (6,018 ) Cash and cash equivalents, beginning of period 7,531 11,621 7,353 1,306 — 27,811 Cash and cash equivalents, end of period $ 73 $ 12,407 $ 6,930 $ 2,383 $ — $ 21,793 Year ended December 31, 2014 SMLP Co-Issuers Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating adjustments Total (In thousands) Cash flows from operating activities: Net cash (used in) provided by operating activities $ (3,658 ) $ (30,689 ) $ 179,685 $ 7,615 $ — $ 152,953 Cash flows from investing activities: Capital expenditures (460 ) — (220,360 ) (122,560 ) — (343,380 ) Initial contribution to Ohio Gathering — — — (8,360 ) — (8,360 ) Acquisition of Ohio Gathering Option — — — (190,000 ) — (190,000 ) Option Exercise — — — (382,385 ) — (382,385 ) Contributions to equity method investees — — — (145,131 ) — (145,131 ) Proceeds from asset sales — — 325 — — 325 Acquisition of gathering systems — — (10,872 ) — — (10,872 ) Acquisitions of gathering systems from affiliate, net of acquired cash (305,000 ) — — — — (305,000 ) Advances to affiliates (183 ) (174,495 ) (47,271 ) — 221,949 — Net cash used in investing activities (305,643 ) (174,495 ) (278,178 ) (848,436 ) 221,949 (1,384,803 ) Year ended December 31, 2014 SMLP Co-Issuers Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating adjustments Total (In thousands) Cash flows from financing activities: Distributions to unitholders (122,224 ) — — — — (122,224 ) Borrowings under revolving credit facility 57,000 237,295 — — — 294,295 Repayments under revolving credit facility (115,000 ) (315,295 ) — — — (430,295 ) Borrowings under term loan 400,000 — — — — 400,000 Repayments under term loan (100,000 ) — — — — (100,000 ) Deferred loan costs (3,003 ) (5,320 ) — — — (8,323 ) Proceeds from issuance of common units, net 197,806 — — — — 197,806 Contribution from general partner 4,235 — — — — 4,235 Cash advance (to) from Summit Investments (from) to contributed subsidiaries, net (242,000 ) — 81,421 834,962 — 674,383 Expenses paid by Summit Investments on behalf of contributed subsidiaries 12,845 — 10,483 1,556 — 24,884 Issuance of senior notes — 300,000 — — — 300,000 Repurchase of equity-based compensation awards (228 ) — — — — (228 ) Other, net (656 ) — — — — (656 ) Advances from affiliates 221,766 — — 183 (221,949 ) — Net cash provided by financing activities 310,541 216,680 91,904 836,701 (221,949 ) 1,233,877 Net change in cash and cash equivalents 1,240 11,496 (6,589 ) (4,120 ) — 2,027 Cash and cash equivalents, beginning of period 6,291 125 13,942 5,426 — 25,784 Cash and cash equivalents, end of period $ 7,531 $ 11,621 $ 7,353 $ 1,306 $ — $ 27,811 Year ended December 31, 2013 SMLP Co-Issuers Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating adjustments Total (In thousands) Cash flows from operating activities: Net cash provided by operating activities $ (544 ) $ (4,799 ) $ 141,260 $ (506 ) $ — $ 135,411 Cash flows from investing activities: Capital expenditures (930 ) — (182,048 ) (66,648 ) — (249,626 ) Proceeds from asset sales — — 585 — — 585 Acquisition of gathering systems (210,000 ) — — — — (210,000 ) Acquisitions of gathering systems from affiliate, net of acquired cash (200,000 ) — — — — (200,000 ) Advances to affiliates (84 ) (371,408 ) (36,672 ) — 408,164 — Net cash used in investing activities (411,014 ) (371,408 ) (218,135 ) (66,648 ) 408,164 (659,041 ) Year ended December 31, 2013 SMLP Co-Issuers Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating adjustments Total (In thousands) Cash flows from financing activities: Distributions to unitholders (90,196 ) — — — — (90,196 ) Borrowings under revolving credit facility 96,000 380,950 — — — 476,950 Repayments under revolving credit facility (3,000 ) (294,180 ) — — — (297,180 ) Borrowings under term loan 200,000 — — — — 200,000 Repayments under term loan (100,000 ) — — — — (100,000 ) Deferred loan costs (3,451 ) (10,608 ) — — — (14,059 ) Contribution from general partner 2,229 — — — — 2,229 Cash advance (to) from Summit Investments (from) to contributed subsidiaries, net (193,000 ) — 72,745 70,168 — (50,087 ) Expenses paid by Summit Investments on behalf of contributed subsidiaries 8,088 — 11,964 2,328 — 22,380 Issuance of senior notes — 300,000 — — — 300,000 Repurchase of equity-based compensation awards (11,957 ) — — — — (11,957 ) Issuance of units to affiliate in connection with the Mountaineer Acquisition 100,000 — — — — 100,000 Advances from affiliates 408,080 — — 84 (408,164 ) — Net cash provided by financing activities 412,793 376,162 84,709 72,580 (408,164 ) 538,080 Net change in cash and cash equivalents 1,235 (45 ) 7,834 5,426 — 14,450 Cash and cash equivalents, beginning of period 5,056 170 6,108 — — 11,334 Cash and cash equivalents, end of period $ 6,291 $ 125 $ 13,942 $ 5,426 $ — $ 25,784 |