CONDENSED CONSOLIDATING FINANCIAL INFORMATION | CONDENSED CONSOLIDATING FINANCIAL INFORMATION In July 2014 and June 2013, the Co-Issuers issued the Senior Notes. The Senior Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by SMLP and the Guarantor Subsidiaries (see Note 9). The following supplemental condensed consolidating financial 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. For purposes of the following consolidating information: • each of SMLP and the Co-Issuers account for their subsidiary investments, if any, under the equity method of accounting and • the balances and results of operations associated with the assets, liabilities and expenses that were carved out of Summit Investments and allocated to SMLP in connection with the 2016 Drop Down have been attributed to SMLP during the common control period. Condensed Consolidating Balance Sheets. Balance sheets as of September 30, 2016 and December 31, 2015 follow. September 30, 2016 SMLP Co-Issuers Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating adjustments Total (In thousands) Assets Cash and cash equivalents $ 4,022 $ 385 $ 2,107 $ 1,083 $ — $ 7,597 Accounts receivable 50 — 42,841 9,557 — 52,448 Other current assets 1,160 — 2,979 627 — 4,766 Due from affiliate 16,336 28,050 344,180 — (388,566 ) — Total current assets 21,568 28,435 392,107 11,267 (388,566 ) 64,811 Property, plant and equipment, net 2,100 — 1,444,558 406,400 — 1,853,058 Intangible assets, net — — 407,392 24,321 — 431,713 Investment in equity method investees — — — 705,845 — 705,845 Goodwill — — 16,211 — — 16,211 Other noncurrent assets 2,546 5,732 161 — — 8,439 Investment in subsidiaries 2,093,929 3,292,414 — — (5,386,343 ) — Total assets $ 2,120,143 $ 3,326,581 $ 2,260,429 $ 1,147,833 $ (5,774,909 ) $ 3,080,077 Liabilities and Partners' Capital Trade accounts payable $ 741 $ — $ 6,018 $ 6,351 $ — $ 13,110 Due to affiliate 372,344 — — 16,336 (388,566 ) 114 Ad valorem taxes payable 12 — 8,760 641 — 9,413 Accrued interest — 7,733 — — — 7,733 Accrued environmental remediation — — — 7,954 — 7,954 Other current liabilities 6,203 — 9,437 3,435 — 19,075 Total current liabilities 379,300 7,733 24,215 34,717 (388,566 ) 57,399 Long-term debt — 1,224,919 — — — 1,224,919 Deferred Purchase Price Obligation 538,543 — — — — 538,543 Deferred revenue — — 49,042 — — 49,042 Noncurrent accrued environmental remediation — — — 3,082 — 3,082 Other noncurrent liabilities 2,900 — 4,775 17 — 7,692 Total liabilities 920,743 1,232,652 78,032 37,816 (388,566 ) 1,880,677 Total partners' capital 1,199,400 2,093,929 2,182,397 1,110,017 (5,386,343 ) 1,199,400 Total liabilities and partners' capital $ 2,120,143 $ 3,326,581 $ 2,260,429 $ 1,147,833 $ (5,774,909 ) $ 3,080,077 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 Other current assets 540 — 2,672 361 — 3,573 Due from affiliate 3,168 151,443 207,651 — (362,262 ) — 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 Investment in equity method investees — — — 751,168 — 751,168 Goodwill — — 16,211 — — 16,211 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 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 three and nine months ended September 30, 2016 and 2015 follow. Three months ended September 30, 2016 SMLP Co-Issuers Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating adjustments Total (In thousands) Revenues: Gathering services and related fees $ — $ — $ 64,065 $ 16,231 $ — $ 80,296 Natural gas, NGLs and condensate sales — — 9,578 — — 9,578 Other revenues — — 4,612 587 — 5,199 Total revenues — — 78,255 16,818 — 95,073 Costs and expenses: Cost of natural gas and NGLs — — 6,986 — — 6,986 Operation and maintenance — — 20,800 2,259 — 23,059 General and administrative — — 10,183 2,185 — 12,368 Depreciation and amortization 154 — 24,765 3,060 — 27,979 Loss on asset sales, net — — 13 — — 13 Long-lived asset impairment — — 1,172 — — 1,172 Total costs and expenses 154 — 63,919 7,504 — 71,577 Other income 51 — — — — 51 Interest expense — (15,733 ) — — — (15,733 ) Deferred Purchase Price Obligation expense (6,188 ) — — — — (6,188 ) (Loss) income before income taxes and income from equity method investees (6,291 ) (15,733 ) 14,336 9,314 — 1,626 Income tax benefit 142 — — — — 142 Income from equity method investees — — — 270 — 270 Equity in earnings of consolidated subsidiaries 8,187 23,920 — — (32,107 ) — Net income $ 2,038 $ 8,187 $ 14,336 $ 9,584 $ (32,107 ) $ 2,038 Three months ended September 30, 2015 SMLP Co-Issuers Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating adjustments Total (In thousands) Revenues: Gathering services and related fees $ — $ — $ 93,480 $ 8,094 $ — $ 101,574 Natural gas, NGLs and condensate sales — — 8,710 — — 8,710 Other revenues — — 4,367 550 — 4,917 Total revenues — — 106,557 8,644 — 115,201 Costs and expenses: Cost of natural gas and NGLs — — 6,959 — — 6,959 Operation and maintenance — — 23,046 1,614 — 24,660 General and administrative — — 9,226 1,603 — 10,829 Transaction costs 322 — — — — 322 Depreciation and amortization 138 — 23,974 2,284 — 26,396 Environmental remediation — — — 20,000 — 20,000 Long-lived asset impairment — — 7,696 — — 7,696 Total costs and expenses 460 — 70,901 25,501 — 96,862 Other income 1 — — — — 1 Interest expense (2,228 ) (12,119 ) (13 ) — — (14,360 ) (Loss) income before income taxes and loss from equity method investees (2,687 ) (12,119 ) 35,643 (16,857 ) — 3,980 Income tax expense (199 ) — — — — (199 ) Loss from equity method investees — — — (240 ) — (240 ) Equity in earnings of consolidated subsidiaries 6,427 18,546 — — (24,973 ) — Net income (loss) $ 3,541 $ 6,427 $ 35,643 $ (17,097 ) $ (24,973 ) $ 3,541 Nine months ended September 30, 2016 SMLP Co-Issuers Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating adjustments Total (In thousands) Revenues: Gathering services and related fees $ — $ — $ 191,510 $ 43,073 $ — $ 234,583 Natural gas, NGLs and condensate sales — — 25,747 — — 25,747 Other revenues — — 13,286 1,663 — 14,949 Total revenues — — 230,543 44,736 — 275,279 Costs and expenses: Cost of natural gas and NGLs — — 20,140 — — 20,140 Operation and maintenance — — 64,413 7,898 — 72,311 General and administrative — — 31,072 7,051 — 38,123 Transaction costs 1,296 — — — — 1,296 Depreciation and amortization 424 — 74,194 9,052 — 83,670 Loss on asset sales, net — — 24 — — 24 Long-lived asset impairment — — 1,212 529 — 1,741 Total costs and expenses 1,720 — 191,055 24,530 — 217,305 Other income 92 — — — — 92 Interest expense (1,441 ) (46,209 ) — — — (47,650 ) Deferred Purchase Price Obligation expense (31,116 ) — — — — (31,116 ) (Loss) income before income taxes and loss from equity method investees (34,185 ) (46,209 ) 39,488 20,206 — (20,700 ) Income tax expense (141 ) — — — — (141 ) Loss from equity method investees — — — (31,341 ) — (31,341 ) Equity in (loss) earnings of consolidated subsidiaries (17,856 ) 28,353 — — (10,497 ) — Net (loss) income $ (52,182 ) $ (17,856 ) $ 39,488 $ (11,135 ) $ (10,497 ) $ (52,182 ) Nine months ended September 30, 2015 SMLP Co-Issuers Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating adjustments Total (In thousands) Revenues: Gathering services and related fees $ — $ — $ 222,085 $ 17,683 $ — $ 239,768 Natural gas, NGLs and condensate sales — — 33,290 — — 33,290 Other revenues — — 13,342 1,742 — 15,084 Total revenues — — 268,717 19,425 — 288,142 Costs and expenses: Cost of natural gas and NGLs — — 24,974 — — 24,974 Operation and maintenance — — 65,718 5,326 — 71,044 General and administrative — — 28,974 5,086 — 34,060 Transaction costs 1,254 — — — — 1,254 Depreciation and amortization 488 — 71,357 6,100 — 77,945 Environmental remediation — — — 20,000 — 20,000 Gain on asset sales, net — — (214 ) — — (214 ) Long-lived asset impairment — — 7,696 — — 7,696 Total costs and expenses 1,742 — 198,505 36,512 — 236,759 Other income 2 — — — — 2 Interest expense (8,529 ) (36,320 ) (14 ) — — (44,863 ) (Loss) income before income taxes and loss from equity method investees (10,269 ) (36,320 ) 70,198 (17,087 ) — 6,522 Income tax expense (366 ) — — — — (366 ) Loss from equity method investees — — — (7,494 ) — (7,494 ) Equity in earnings of consolidated subsidiaries 9,297 45,617 — — (54,914 ) — Net (loss) income $ (1,338 ) $ 9,297 $ 70,198 $ (24,581 ) $ (54,914 ) $ (1,338 ) Condensed Consolidating Statements of Cash Flows. Statements of cash flows for the nine months ended September 30, 2016 and 2015 follow. Nine months ended September 30, 2016 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 $ 3,740 $ (52,916 ) $ 159,650 $ 58,231 $ — $ 168,705 Cash flows from investing activities: Capital expenditures (904 ) — (39,630 ) (82,201 ) — (122,735 ) Contributions to equity method investees — — — (20,157 ) — (20,157 ) Acquisitions of gathering systems from affiliate, net of acquired cash (359,431 ) — — — — (359,431 ) Other, net (373 ) — — — — (373 ) Advances to affiliates (16,822 ) (245,093 ) (124,843 ) — 386,758 — Net cash used in investing activities (377,530 ) (245,093 ) (164,473 ) (102,358 ) 386,758 (502,696 ) Cash flows from financing activities: Distributions to unitholders (123,064 ) — — — — (123,064 ) Borrowings under revolving credit facility 12,000 478,300 — — — 490,300 Repayments under revolving credit facility — (189,300 ) — — — (189,300 ) Deferred loan costs — (3,013 ) — — — (3,013 ) Proceeds from issuance of common units, net 126,115 — — — — 126,115 Contribution from general partner 2,702 — — — — 2,702 Cash advance (to) from Summit Investments (from) to contributed subsidiaries, net (12,000 ) — — 24,214 — 12,214 Expenses paid by Summit Investments on behalf of contributed subsidiaries 3,030 — — 1,791 — 4,821 Other, net (980 ) — — — — (980 ) Advances from affiliates 369,936 — — 16,822 (386,758 ) — Net cash provided by financing activities 377,739 285,987 — 42,827 (386,758 ) 319,795 Net change in cash and cash equivalents 3,949 (12,022 ) (4,823 ) (1,300 ) — (14,196 ) Cash and cash equivalents, beginning of period 73 12,407 6,930 2,383 — 21,793 Cash and cash equivalents, end of period $ 4,022 $ 385 $ 2,107 $ 1,083 $ — $ 7,597 Nine months ended September 30, 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 $ 1,026 $ (45,034 ) $ 157,931 $ 24,174 $ — $ 138,097 Cash flows from investing activities: Capital expenditures (427 ) — (89,643 ) (115,359 ) — (205,429 ) Contributions to equity method investees — — — (74,375 ) — (74,375 ) Acquisitions of gathering systems from affiliate, net of acquired cash (288,618 ) — — — — (288,618 ) Other, net — — 238 — — 238 Advances to affiliates (1,811 ) (62,363 ) (96,100 ) — 160,274 — Net cash used in investing activities (290,856 ) (62,363 ) (185,505 ) (189,734 ) 160,274 (568,184 ) Cash flows from financing activities: Distributions to unitholders (111,099 ) — — — — (111,099 ) Borrowings under revolving credit facility 170,000 147,000 — — — 317,000 Repayments under revolving credit facility (100,000 ) (51,000 ) — — — (151,000 ) Repayments under term loan (180,000 ) — — — — (180,000 ) Deferred loan costs (50 ) (154 ) — — — (204 ) Proceeds from issuance of common units, net 222,014 — — — — 222,014 Contribution from general partner 4,737 — — — — 4,737 Cash advance from Summit Investments to contributed subsidiaries, net 110,000 — 21,719 160,687 — 292,406 Expenses paid by Summit Investments on behalf of contributed subsidiaries 9,825 — 3,864 2,950 — 16,639 Other, net (1,435 ) — (130 ) (1 ) — (1,566 ) Advances from affiliates 158,463 — — 1,811 (160,274 ) — Net cash provided by financing activities 282,455 95,846 25,453 165,447 (160,274 ) 408,927 Net change in cash and cash equivalents (7,375 ) (11,551 ) (2,121 ) (113 ) — (21,160 ) Cash and cash equivalents, beginning of period 7,531 11,621 7,353 1,306 — 27,811 Cash and cash equivalents, end of period $ 156 $ 70 $ 5,232 $ 1,193 $ — $ 6,651 |