Summit Midstream Partners
Annual Report 2015

Plain-text annual report

Table of ContentsUNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549Form 10-K(Mark One)[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2015or[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from toCommission file number: 001-35666Summit Midstream Partners, LP (Exact name of registrant as specified in its charter)Delaware 45-5200503(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 1790 Hughes Landing Blvd, Suite 500The Woodlands, TX 77380 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (832) 413-4770 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of exchange on which registeredCommon Units New York Stock ExchangeIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.o Yes x NoIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Act.o Yes x NoIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 duringthe preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. x Yes o NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required tobe submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period thatthe registrant was required to submit and post such files).x Yes o NoIndicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will notbe contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or anyamendment to this Form 10-K. xIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See thedefinitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.Large accelerated filer x Accelerated filer oNon-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company oIndicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). o Yes x NoThe aggregate market value of the common units held by non-affiliates of the registrant as of June 30, 2015, was $1,208,505,269.Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: The registrant had 66,472,494common units and 1,354,700 general partner units outstanding at February 16, 2016.DOCUMENTS INCORPORATED BY REFERENCENoneTABLE OF CONTENTSPART I 1Item 1.Business.1Item 1A.Risk Factors.17Item 1B.Unresolved Staff Comments.44Item 2.Properties.44Item 3.Legal Proceedings.44Item 4.Mine Safety Disclosures.45 PART II 46Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of EquitySecurities.46Item 6.Selected Financial Data.48Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations.50Item 7A.Quantitative and Qualitative Disclosures about Market Risk.80Item 8.Financial Statements and Supplementary Data.81Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.124Item 9A.Controls and Procedures.124Item 9B.Other Information.127 Part III 128Item 10.Directors, Executive Officers and Corporate Governance.128Item 11.Executive Compensation.133Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.150Item 13.Certain Relationships and Related Transactions, and Director Independence.153Item 14.Principal Accounting Fees and Services.154 Part IV 156Item 15.Exhibits, Financial Statement Schedules.156iTable of ContentsGlossary of Termsadjusted EBITDA: EBITDA plus adjustments related to MVC shortfall payments, impairments and other noncash expenses or losses, less othernoncash income or gainsAMI: area of mutual interest; AMIs require that any production from wells drilled by our customers within the AMI be shipped on and/or processedby our gathering systemsassociated natural gas: a form of natural gas which is found with deposits of petroleum, either dissolved in the oil or as a free gas cap above theoil in the reservoirBbl: one barrel; used for crude oil and produced water and equivalent to 42 U.S. gallonsBcf: one billion cubic feetcondensate: a natural gas liquid with a low vapor pressure, mainly composed of propane, butane, pentane and heavier hydrocarbon fractionsconventional resource basin: a basin where natural gas or crude oil production is developed from a well drilled into a geologic formation in whichthe reservoir and fluid characteristics permit the crude oil and natural gas to readily flow to the wellbore; also referred to as a conventional resourceplaydelivery point: the point where hydrocarbons or produced water are delivered into a gathering system, processing or fractionation facility ordownstream transportation pipelinedistributable cash flow: adjusted EBITDA plus cash interest received, less cash interest paid, senior notes interest adjustment, cash taxes paidand maintenance capital expendituresdry gas: a gas primarily composed of methane where heavy hydrocarbons and water either do not exist or have been removed through processingor treatingEBITDA: net income or loss, plus interest expense, income tax expense, and depreciation and amortization, less interest income and income taxbenefitend users: the ultimate users and consumers of transported energy productshub: geographic location of a storage facility and multiple pipeline interconnectionsLACT unit: lease automatic custody transfer unit; a system for ownership transfer of hydrocarbons or produced water from the production site totrucks, pipelines or storage tanksMbbl: one thousand barrelsMbbl/d: one thousand barrels per dayMcf: one thousand cubic feetMcfe: the equivalent of one thousand cubic feet; generally calculated when liquids are converted into gas; determined using a ratio of six thousandcubic feet of natural gas to one barrel of crude oilMMBtu: one million British Thermal UnitsMMcf: one million cubic feetMMcf/d: one million cubic feet per dayMQD: minimum quarterly distribution; SMLP's partnership agreement has established a minimum quarterly distribution of $0.40 per unit per quarter,or $1.60 per unit per yeariiTable of ContentsMVC: minimum volume commitment; an MVC contractually obligates a customer to ship natural gas, crude oil or produced water on SMLP'ssystems and/or use our processing services for a minimum quantity of natural gasNGLs: natural gas liquids; the combination of ethane, propane, normal butane, iso-butane and natural gasolines that when removed fromunprocessed natural gas streams become liquid under various levels of higher pressure and lower temperatureplay: a proven geological formation that contains commercial amounts of hydrocarbonsproduced water: water from underground geologic formations that is brought to the surface during crude oil productionreceipt point: the point where hydrocarbons or produced water are received by or into a gathering system or transportation pipelineresidue gas: the natural gas remaining after being processed and/or treatedsegment adjusted EBITDA: calculated as adjusted EBITDA excluding the impact of the corporate expenses that we allocate to our reportablesegmentsshortfall payment: the payment received from a counterparty when its volume throughput does not meet its MVC for the applicable periodtailgate: refers to the point at which processed residue gas and NGLs leave a processing facility for end-use marketsTcf: one trillion cubic feetthroughput volume: the volume of natural gas, crude oil or produced water transported or passing through a pipeline, plant or other facility duringa particular period; also referred to as volume throughputunconventional resource basin: a basin where natural gas or crude oil production is developed from unconventional sources that requirehydraulic fracturing as part of the completion process, for instance, natural gas produced from shale formations and coalbeds; also referred to asan unconventional resource playwellhead: the equipment at the surface of a well used to control the well's pressure; also, the point at which the hydrocarbons and water exit thegroundIndustry OverviewGeneralThe midstream sector of the energy industry provides the link between exploration and production and the delivery of crude oil, natural gas andtheir components to end-use markets. The midstream sector consists generally of gathering, processing, storage, and transportation activities. Weprovide natural gas gathering, treating and processing services as well as crude oil and produced water gathering services.Natural Gas Midstream ServicesCompanies within the natural gas midstream industry create value at various stages along the natural gas value chain by gathering natural gasfrom producers at the wellhead, separating the hydrocarbons into dry gas and NGLs and then routing the separated dry gas and NGLs streams fordelivery to end-markets or to the next intermediate stage of the value chain. The range of services provided by midstream natural gas servicecompanies are generally divided into the following six categories:Gathering. At the initial stages of the midstream value chain, a network of typically small diameter pipelines known as gathering systems directlyconnect to wellheads, pad sites or other receipt points in the production area. These gathering systems transport natural gas from the wellhead todownstream pipelines or a central location for treating and processing. Gathering systems are typically designed to allow gathering of natural gasat different pressures and are scalable to allow for additional production and well connections.iiiTable of ContentsCompression. Gathering systems are operated at design pressures that enable the maximum amount of production to be gathered fromconnected wells. Through a mechanical process known as compression, volumes of natural gas at a given pressure are compressed to asufficiently higher pressure, thereby allowing those volumes to be delivered to treating, dehydration, processing and fractionation facilities andultimately the market via a higher pressure downstream pipeline. Since wells produce at progressively lower field pressures as they age, itbecomes necessary to add additional compression over time to maintain throughput across the gathering system.Treating and Dehydration. Treating and dehydration involves the removal of impurities such as water, carbon dioxide, nitrogen and hydrogensulfide, which may be present when natural gas is produced at the wellhead. These impurities must be removed for the natural gas to meet thespecifications for transportation on long-haul intrastate and interstate pipelines. Moreover, end users will not purchase natural gas with high levelsof impurities.Processing. The principal components of natural gas are methane and ethane. Most natural gas also contains varying amounts of other NGLs.Even after treating and dehydration, some natural gas is not suitable for long-haul intrastate and interstate pipeline transportation or commercialuse because it contains NGLs and condensate. This natural gas, which is often referred to as liquids-rich natural gas, must also be processed toremove these heavier hydrocarbon components. NGLs not only interfere with pipeline transportation, but are also valuable commodities onceremoved from the natural gas stream. The removal and separation of NGLs usually takes place in a processing plant and fractionation facilityusing industrial processes that exploit differences in the weights, boiling points, vapor pressures and other physical characteristics of NGLcomponents.Fractionation. Fractionation is the process by which NGLs are separated into individual liquid products for sale to petrochemical and industrial endusers. The NGL components that can be separated in fractionation generally include: ethane, propane, normal butane, iso-butane and naturalgasoline. This mixture of raw NGLs is often referred to as y-grade or raw natural gas liquid mix.Transportation and Storage. After treating and dehydration, processing and fractionation, the natural gas and NGL components are either storedor transported and marketed to end-use markets. Each pipeline system typically has storage capacity located both throughout the pipeline networkand at major market centers to help temper seasonal demand and daily supply-demand shifts.Crude Oil Midstream ServicesCrude Oil Gathering. Pipelines typically provide the most cost-effective option for shipping crude oil. Crude oil gathering systems typicallycomprise a network of small-diameter pipelines connected directly to well heads, pad sites or other receipt points that transport crude oil to centralreceipt points or interconnecting pipelines through larger diameter trunk lines. Common carrier pipelines frequently transport crude oil from centraldelivery points to logistics hubs or refineries under tariffs regulated by the Federal Energy Regulatory Commission, also known as FERC, or stateauthorities. Logistic hubs provide storage and connections to other pipeline systems and modes of transportation, such as railroads and trucks.Pipelines not engaged in the interstate transportation of crude may also be proprietary or leased entirely to a single customer.Trucking complements pipeline gathering systems by gathering crude oil from operators at remote wellhead locations not served by pipelinegathering systems. Trucking is generally limited to low volume, short haul movements because trucking costs escalate with distance. Railroadsprovide additional transportation capabilities for shipping crude oil between gathering systems, pipelines, terminals and storage centers and end-users.Produced Water Gathering. Produced water is a by-product or waste stream associated with crude oil production. The cost of managingproduced water is a key consideration for crude oil producers. Pipelines and trucking are used to gather produced water for transport to disposalfacilities. Similar to crude oil gathering, trucking is generally limited to low volume, short haul movements.Contractual ArrangementsNatural Gas Contracts. Natural gas midstream services, other than transportation and storage, are usually provided under contractualarrangements that vary in the amount of commodity price risk they carry. Three typical types of natural gas gathering contracts are describedbelow.Fee-Based. Under fee-based arrangements, the midstream service provider typically receives a fee for each unit of natural gas gathered, treatedand/or compressed at the wellhead and an additional fee per unit of natural gas processed at its facility. As a result, the midstream serviceprovider bears no direct commodity price risk exposure.Percent-of-Proceeds. Under percent-of-proceeds arrangements, the midstream service provider typically remits to the producers either apercentage of the proceeds from the sale of residue gas and NGLs at the tailgate at its ownivTable of Contentsor a third-party processing or fractionation plant. These types of arrangements expose the gatherer/processor to commodity price risk, as therevenues from the contracts directly correlate with the fluctuating price of natural gas, condensate and NGLs.Keep-Whole. Under keep-whole arrangements, the midstream service provider keeps 100% of the NGLs produced, and the processed natural gas,or value of the natural gas, is returned to the producer. Since some of the natural gas is used and removed during processing, the midstreamservice provider compensates the producer for the value or amount of natural gas used and removed during processing by supplying additionalnatural gas or by paying an agreed-upon value for the natural gas utilized. These arrangements have the highest commodity price exposure for theprocessor because the costs are dependent on the price of natural gas and the revenues are based on the price of NGLs.Crude Oil and Produced Water Contracts. Crude oil and produced water gathering services are usually provided under fee-based contractualarrangements whereby the service provider typically receives a fee for each unit of production gathered at the wellhead. As a result, the serviceprovider bears no direct commodity price risk exposure.vTable of ContentsPART IItem 1. Business.Summit Midstream Partners, LP ("SMLP" or the "Partnership") is a Delaware limited partnership that completed its initial public offering ("IPO") onOctober 3, 2012. Summit Midstream Partners, LLC ("Summit Investments") is a Delaware limited liability company and the predecessor foraccounting purposes (the "Predecessor") of SMLP. References to the "Company," "we," or "our," when used for dates or periods ended on or afterthe IPO, refer collectively to SMLP and its subsidiaries. References to the "Company," "we," or "our," when used for dates or periods ended priorto the IPO, refer collectively to Summit Investments and its subsidiaries. For additional information, see Note 1 to the consolidated financialstatements.Item 1. Business is divided into the following sections:•Overview•Business Strategies•Competitive Strengths•Our Midstream Assets•Regulation of the Natural Gas and Crude Oil Industries•Environmental Matters•Other InformationOverviewSMLP is a growth-oriented limited partnership focused on developing, owning and operating midstream energy infrastructure assets that arestrategically located in the core producing areas of unconventional resource basins, primarily shale formations, in the continental United States.We provide natural gas gathering, treating and processing services as well as crude oil and produced water gathering services pursuant to primarilylong-term and fee-based agreements with our customers and counterparties. We generally refer to all of the services provided as gatheringservices.We currently operate in four unconventional resource basins:•the Appalachian Basin, which includes the Marcellus Shale formation in northern West Virginia;•the Williston Basin, which includes the Bakken and Three Forks shale formations in northwestern North Dakota;•the Fort Worth Basin, which includes the Barnett Shale formation in north-central Texas; and•the Piceance Basin, which includes the Mesaverde formation and the Mancos and Niobrara shale formations in western Colorado andeastern Utah.We contract with producers to gather natural gas from pad sites, wells and central receipt points connected to our systems. We then compress,dehydrate, treat and/or process these volumes for delivery to downstream pipelines for ultimate delivery to third-party processing plants and/or endusers. We also contract with producers to gather crude oil and produced water from wells connected to our systems for delivery to third-party railterminals and pipelines in the case of crude oil and to third-party disposal wells in the case of produced water.Our systems, each of which are located in the continental United States, and the basins they serve are as follows:•the Mountaineer Midstream system, a natural gas gathering system ("Mountaineer Midstream"), which serves the Appalachian Basin;•the Bison Midstream system, an associated natural gas gathering system ("Bison Midstream"), which serves the Williston Basin;•the Polar and Divide system, a crude oil and produced water gathering system and recently commissioned transmission pipelines ("Polarand Divide"), which serves the Williston Basin;•the DFW Midstream system, a natural gas gathering system ("DFW Midstream"), which serves the Fort Worth Basin; and1Table of Contents•the Grand River system, a natural gas gathering and processing system ("Grand River"), which serves the Piceance Basin.We believe that our gathering systems are well positioned to capture volumes from producer activity in these regions in the future.We have a diverse group of customers and counterparties comprising affiliates and/or subsidiaries of some of the largest crude oil and natural gasproducers in North America. Our anchor customers and the systems they serve are as follows:•Antero Resources Corp. ("Antero"), the anchor for Mountaineer Midstream;•EOG Resources, Inc. ("EOG") and Oasis Petroleum, Inc. ("Oasis"), the anchors for Bison Midstream;•Whiting Petroleum Corp. ("Whiting") and SM Energy Company ("SM Energy"), the anchors for Polar and Divide;•Chesapeake Energy Corporation ("Chesapeake"), the anchor for DFW Midstream; and•Encana Corporation ("Encana") and WPX Energy, Inc. ("WPX"), the anchors for Grand River.A significant percentage of our revenue is attributable to these anchor customers. For additional information on revenue and accounts receivableconcentrations, see the Liquidity and Capital Resources—Credit and Counterparty Concentration Risks section included in Item 7. Management'sDiscussion and Analysis of Financial Condition and Results of Operations ("MD&A") and Notes 3 and 9 to the consolidated financial statements.We believe that we have positioned SMLP for growth through the increased utilization and further development of our existing midstream assets.We intend to continue expanding our operations and diversifying our geographic footprint through asset acquisitions from Summit Investments andthird parties, although Summit Investments has no obligation to offer any assets to us and we have no obligation to acquire any assets that theyoffer to us. We also intend to grow our business through the execution of new, and the expansion of existing, strategic partnerships with largeproducers to provide midstream services for their upstream exploration and production projects.OrganizationWe conduct our gathering, treating and processing operations in the midstream sector through five gathering systems. As of December 31, 2015,our reportable segments and their respective gathering systems were:•the Marcellus Shale, which is served by Mountaineer Midstream;•the Williston Basin, which is served by Bison Midstream and Polar and Divide;•the Barnett Shale, which is served by DFW Midstream; and•the Piceance Basin, which is served by Grand River.Our reportable segments reflect the way in which (i) we manage our operations and (ii) management uses the reported financial information tomake decisions and allocate resources in connection therewith. The primary assets of each of our reportable segments consist of gatheringsystems and related property, plant and equipment.Our financial results are primarily driven by the volumes that we gather, treat and process across our systems and our management of expenses.During 2015, aggregate natural gas volume throughput averaged 1,449 million cubic feet per day ("MMcf/d") and crude oil and produced watervolume throughput averaged 55.0 thousand barrels per day ("Mbbl/d"). We generate a substantial majority of our revenue under long-term, primarilyfee-based gathering agreements. The fee-based nature of these agreements enhances the stability of our cash flows by limiting our directcommodity price exposure. During the year ended December 31, 2015, substantially all of our revenue, net of pass-through items, was generatedfrom fee-based gathering services. In addition, the vast majority of our gas gathering and processing agreements include areas of mutual interest("AMIs"). Our AMIs cover more than 1.6 million acres in the aggregate.Certain of our gathering and processing agreements include minimum volume commitments or minimum revenue commitments (collectivelyreferred to as "MVCs"). To the extent the customer does not meet its MVC, it must make payments to cover the shortfall of required volumethroughput not shipped or processed, either on a monthly, quarterly or annual basis. We have designed our MVC provisions to ensure that we willgenerate a certain amount of revenue from each customer over the life of the respective gathering or processing agreement, whether by collectinggathering or processing fees on actual throughput or from cash payments to cover any MVC shortfall. As of December 31, 2015, we had remainingMVCs totaling 3.7 trillion cubic feet equivalent ("Tcfe," determined using a2Table of Contentsratio of six thousand cubic feet ("Mcf") of natural gas to one barrel ("Bbl") of crude oil). Our MVCs have a weighted-average remaining life of 8.6years (assuming minimum throughput volume for the remainder of the term) and average approximately 1.2 Bcfe/d through 2020.We use a variety of financial and operational metrics to analyze our performance, including among others, throughput volume, revenues, operationand maintenance expenses, EBITDA, adjusted EBITDA, segment adjusted EBITDA and distributable cash flow. EBITDA, adjusted EBITDA anddistributable cash flow are not financial measures presented in accordance with accounting principles generally accepted in the United States ofAmerica ("GAAP") and may be defined differently by other companies in our industry. We view each of these operational, GAAP and non-GAAPmetrics as important factors in evaluating our profitability and determining the amounts of cash distributions we pay to our unitholders.For additional information on our results of operations, reportable segment disclosures, EBITDA, adjusted EBITDA and distributable cash flow, seeItem 6. Selected Financial Data, MD&A and the consolidated financial statements and notes thereto included in this report.Our Sponsor and Summit Investments. Energy Capital Partners (our "Sponsor"), together with its affiliated funds, is a private equity firm withover $13.0 billion in capital commitments that is focused on investing in North America's energy infrastructure. Energy Capital Partners hassignificant energy and financial expertise to complement its investment in us, including investments in the power generation, midstream oil andgas, electric transmission, environmental infrastructure and energy services sectors.Summit Investments, which was formed in 2009 by members of our management team and our Sponsor, is the ultimate owner of SummitMidstream GP, LLC (our "general partner"). We are managed and operated by the board of directors and executive officers of our general partner,which is managed and operated by Summit Investments. As a result, due to its ownership interest in Summit Investments and its representationon Summit Investments' board of managers, Energy Capital Partners controls our general partner and its activities, thereby controlling SMLP.In December 2015, Energy Capital Partners approved a unit purchase program of up to $100.0 million of SMLP common units (the "PurchaseProgram"). Unit purchases commenced in December 2015 and have continued in 2016. Units may be purchased by Summit Investments orEnergy Capital Partners in open market transactions, in privately negotiated transactions, or otherwise. The Purchase Program does not requireSummit Investments or Energy Capital Partners to purchase a specific number of units. Purchases made under the Purchase Program have notand will not impact the total number of common units outstanding. As February 16, 2016, Summit Investments had acquired 151,160 commonunits under the Purchase Program while Energy Capital Partners had acquired 2,184,186 common units.Initial Public Offering. SMLP was formed in May 2012 in anticipation of its IPO. On October 3, 2012, we completed the IPO and the followingtransactions occurred:•Summit Investments conveyed an interest in Summit Midstream Holdings, LLC ("Summit Holdings") to our general partner as a capitalcontribution;•our general partner conveyed its interest in Summit Holdings to SMLP in exchange for a continuation of its 2% general partner interest inSMLP and the incentive distribution rights ("IDRs");•Summit Investments conveyed its remaining interest in Summit Holdings to SMLP in exchange for (i) 10,029,850 common units, (ii)24,409,850 subordinated units, and (iii) the right to receive cash reimbursement for certain capital expenditures made with respect to thecontributed assets; and•SMLP issued 14,375,000 common units to the public.Since the IPO, we have issued additional common units and general partner interests in connection with drop down transactions, one third-partyacquisition and certain unit-based compensation awards. For additional information, see Notes 1, 10 and 15 to the consolidated financialstatements.Recent DevelopmentsDrop Down Assets Contribution Agreement. On February 25, 2016, we entered into a contribution agreement with Summit Midstream PartnersHoldings, LLC ("SMP Holdings"), a wholly owned subsidiary of Summit Investments, (the “Contribution Agreement”) to acquire substantially all ofthe issued and outstanding membership interests of Summit Midstream Utica, LLC (“Summit Utica”), Meadowlark Midstream Company, LLC(“Meadowlark Midstream”), and Tioga Midstream, LLC (“Tioga”). In addition, we also agreed to acquire substantially all of SMP Holdings’ 40.0%joint venture interest in each of Ohio Gathering Company, L.L.C. (“Ohio Gathering”) and Ohio3Table of ContentsCondensate Company, L.L.C. (“Ohio Condensate,” and together with Summit Utica, Meadowlark Midstream, Tioga and Ohio Gathering, the “2016Drop Down Assets”)(the “2016 Drop Down”). The transaction is expected to close in March 2016 (the “Initial Close”).The consideration to be paid by the Partnership to SMP Holdings for the 2016 Drop Down Assets will consist of (i) a cash payment to SMPHoldings at Initial Close of $360.0 million (the “Initial Payment”) which will be funded with borrowings under our revolving credit facility (see Note 8to the consolidated financial statements) and (ii) a deferred payment to be paid no later than December 31, 2020 (the “Deferred Payment”). TheDeferred Payment will be equal to:•six-and-one-half (6.5) multiplied by the average adjusted EBITDA, as defined in the Contribution Agreement, of the 2016 Drop DownAssets for 2018 and 2019;•less the Initial Payment;•less all capital expenditures incurred for the 2016 Drop Down Assets between the Initial Close and December 31, 2019;•plus all adjusted EBITDA from the 2016 Drop Down Assets between the Initial Close and December 31, 2019. At the discretion of the board of directors of our general partner, Summit Midstream GP, LLC, the Deferred Payment can be paid in cash, SMLPcommon units or a combination thereof. The present value of the Deferred Payment will be reflected as a liability on our balance sheet until paid. Management currently expects that the Deferred Payment will be financed with a combination of (i) net proceeds from the sale of common units byus, (ii) the net proceeds from the issuance of senior unsecured debt by us, (iii) borrowings under our revolving credit facility and/or (iv) otherinternally generated sources of cash.The terms of the Contribution Agreement were approved by the conflicts committee of the board of directors of our general partner, whichcommittee consists entirely of independent directors, and by the entire board of our general partner.Summit Utica. Summit Utica is a natural gas gathering system located in the Appalachian Basin in southeastern Ohio serving producers targetingthe Utica and Point Pleasant shale formations. The system is currently in service and under development with fourth quarter of 2015 volumethroughput of 75 MMcf/d. Upon full development, it will be composed of 60 miles of low-pressure and high-pressure gathering pipelines and threecompressor and dehydration stations with total throughput capacity of 450 MMcf/d. The Summit Utica system gathers and delivers natural gas,primarily under long-term, fee-based contracts which include acreage dedications. XTO Energy, Inc. ("XTO") serves as the anchor customer onthe system. The system interconnects with Energy Transfer Partners, L.P.’s Utica Ohio River Pipeline.Ohio Gathering. Ohio Gathering is a natural gas gathering system located in the core of the Utica Shale in southeastern Ohio which is currently inservice and under development. The gathering system spans the condensate, rich-gas, and dry-gas windows of the Utica Shale for multipleproducers that are targeting natural gas, condensate and NGL production from the Utica and Point Pleasant formations across Harrison, Guernsey,Belmont, Noble and Monroe counties in Ohio. Currently, the system is composed of more than 250 miles of low-pressure and high-pressuregathering pipeline and offers throughput capacity in excess of 1.9 Bcf/d. Condensate and rich gas production is gathered, compressed,dehydrated and delivered to the Cadiz and Seneca processing complexes, which are owned by a joint venture owned by MPLX LP (“MPLX”) andThe Energy and Minerals Group (“EMG”). Dry gas production is gathered, compressed, dehydrated and delivered to a downstream interconnectwith TETCO and another third-party pipeline. All gathering services on the Ohio Gathering system are provided pursuant to long-term, fee-basedgathering agreements. Gulfport Energy Corporation (“Gulfport”) serves as the anchor customer for Ohio Gathering. In the fourth quarter of 2015,Ohio Gathering gathered an average of 813 MMcf/d of natural gas. A 60.0% non-affiliated joint venture ownership in Ohio Gathering is held byMPLX and EMG.Ohio Condensate. Ohio Condensate is a 23 Mbbl/d condensate stabilization facility located in the core of the Utica Shale in southeastern Ohio. The facility commenced operations in February 2015 and is underpinned by a long-term, fee-based agreement with Gulfport. Condensatestabilization allows for producers to capture the NGLs that would otherwise flash from condensate in atmospheric conditions. Ohio Condensate isthe largest stabilization facility in the Utica Shale Play and will ultimately serve as the origination point for MPLX’s Cornerstone Pipeline which willdeliver condensate to Marathon Petroleum’s refinery in Canton, Ohio. In the fourth quarter of 2015, Ohio Condensate handled an average of 18Mbbl/d of condensate. A 60.0% non-affiliated joint venture ownership in Ohio Condensate is held by MPLX.4Table of ContentsTioga. The Tioga gathering system is currently in service with 73 miles of crude oil gathering pipeline, 83 miles of produced water gatheringpipeline and 79 miles of associated natural gas gathering pipeline. Tioga is located in Williams County, North Dakota and has 20 Mbbl/d of crudeoil gathering capacity, 25 Mbbl/d of produced water gathering capacity and 14 MMcf/d of natural gas gathering capacity. All gathering services onthe Tioga gathering system are provided pursuant to long-term, fee-based gathering agreements with Hess Corp. ("Hess"), which is primarilytargeting crude oil production from the Bakken and Three Forks shale formations. All crude oil, produced water and natural gas gathered on theTioga system is delivered to downstream pipelines and disposal wells (for produced water) that are owned and operated by Hess. In the fourthquarter of 2015, Tioga gathered an average of 5 Mbbl/d of crude oil, 5 Mbbl/d of produced water, and 7 MMcf/d of natural gas. Meadowlark Midstream. Meadowlark Midstream is currently composed of two separate gathering systems, including (i) an associated natural gasgathering and processing system located in the Denver-Julesburg ("DJ") Basin serving producers primarily targeting crude oil production from theNiobrara and Codell shale formations in northern Colorado and southern Wyoming (“Niobrara G&P”) and (ii) a crude oil and produced watergathering system located in the Williston Basin serving a producer targeting the Bakken and Three Forks shale formations in northwestern NorthDakota (“Blacktail”). The Niobrara G&P system is currently in service with 91 miles of low-pressure and high-pressure gathering pipeline and a cryogenic natural gasprocessing plant with processing capacity of 15 MMcf/d; processing capacity is currently being expanded to 20 MMcf/d pursuant to a long-term,fee-based gathering and processing agreement with EOG Resources, Inc. Volume throughput on the Niobrara G&P system averaged 7 MMcf/d inthe fourth quarter of 2015. Residue gas is delivered to the Colorado Interstate Gas pipeline and processed NGLs are delivered to the OverlandPass Pipeline.The Blacktail gathering system is currently in service with 53 miles of crude oil gathering pipeline and 96 miles of produced water gatheringpipeline. The Blacktail system is located in Williams County, North Dakota and has 40 Mbbls/d of crude oil throughput capacity and 30 Mbbls/d ofproduced water throughput capacity. All gathering services on the Blacktail system are provided pursuant to a long-term, fee-based gatheringagreement with an independent producer that is primarily targeting crude oil production from the Bakken and Three Forks shale formations. Crudeoil on the Blacktail system is currently delivered to the COLT Hub rail facility in Epping, North Dakota and produced water is delivered to variousthird-party disposal wells located throughout Williams County, North Dakota. In the fourth quarter of 2015, Blacktail gathered an average of 4Mbbl/d of crude oil and 7 Mbbl/d of produced water.Fourth Quarter 2015 Distribution. In accordance with the terms of our partnership agreement, the subordination period ends on the first businessday after we have earned and paid at least $1.60 (the minimum quarterly distribution on an annualized basis) on each outstanding common unitand subordinated unit and the corresponding distribution on the general partner's 2.0% interest for each of three consecutive, non-overlapping four-quarter periods ending on or after December 31, 2015. On February 12, 2016, we paid a quarterly cash distribution to our unitholders for the fourthquarter of 2015 of $0.575 per unit, or $2.30 per unit on an annualized basis, on all outstanding units, including the general partner's 2.0% interest.In connection therewith, the subordination period ended on February 16, 2016 and all 24,409,850 subordinated units converted to common units ona one-for-one basis.Business StrategiesOur principal business strategy is to increase the amount of cash distributions we make to our unitholders over time. Our plan for continuing toexecute this strategy includes the following key components:•Maintaining our focus on fee-based revenue with minimal direct commodity price exposure. As we expand our business, we intendto maintain our focus on providing midstream energy services under fee-based arrangements. Our midstream services are provided underprimarily long-term and fee-based contracts with original terms of up to 25 years. Currently, all of the contracts associated with assetsowned and being developed by Summit Investments are fee based. We believe that our focus on fee-based revenues with minimal directcommodity exposure is essential to maintaining stable cash flows.•Capitalizing on organic growth opportunities to maximize throughput on our existing systems. We intend to continue to leverageour management team's expertise in constructing, developing and optimizing our midstream assets to grow our business through organicdevelopment projects. We believe that our broad and geographically diverse operating footprint provides us with a competitive advantageto pursue organic development projects that are designed to extend our geographic reach, diversify our customer5Table of Contentsbase, expand our midstream service offerings, increase the number of our hydrocarbon receipt points and maximize volume throughput.•Diversifying our asset base by expanding our midstream service offerings to new geographic areas. Our gathering operations in theMarcellus, Bakken, Three Forks and Barnett shale plays and the Piceance Basin currently represent our core business. We intend todiversify our operations into other geographic regions, as a result of the 2016 Drop Down and through both greenfield development projectsand acquisitions from third parties.•Partnering with producers to provide midstream services for their development projects in high-growth, unconventional resourceplays. We seek to promote commercial relationships with established and well-capitalized producers that are willing to serve as anchorcustomers and commit to long-term MVCs and AMIs. We will continue to pursue partnership opportunities with established producers todevelop new midstream energy infrastructure in unconventional resource basins that we believe will complement our existing assetsand/or enhance our overall business by facilitating our entry into new basins. These opportunities generally consist of a strategic acreageposition in an unconventional resource play that is well-positioned for accelerated production but has limited existing midstream energyinfrastructure to support such growth.Competitive StrengthsWe believe that we will be able to execute the components of our principal business strategy successfully because of the following competitivestrengths:•Strategically located assets in core areas of prolific unconventional resource basins supported by partnerships with largeproducers. We believe our assets are strategically positioned within the core areas of four established unconventional resource basins.The geologic formations in the basins served by our assets have either relatively low drilling and completion costs, highly economicproduction profiles, or a combination of both which incent producers to develop more actively than in more marginal areas.•Fee-based revenues underpinned by long-term contracts with AMIs and MVCs. A substantial majority of our revenue for the yearended December 31, 2015 was generated under long-term and fee-based gathering and processing agreements. We believe that long-term,fee-based gathering and processing agreements enhance the stability of our cash flows by limiting our direct commodity price exposure.•Capital structure and financial flexibility. At December 31, 2015, we had $944.0 million of total indebtedness and the unused portion ofour $700.0 million amended and restated senior secured revolving credit facility (the "revolving credit facility") totaled $356.0 million. Underthe terms of our revolving credit facility, our total leverage ratio (total net indebtedness to consolidated trailing 12-month EBITDA, asdefined in the credit agreement) was approximately 4.2 to 1.0 at December 31, 2015, which compares with a total leverage ratio upper limitof not more than 5.0 to 1.0, or not more than 5.5 to 1.0 for up to 270 days following certain acquisitions (as defined in the creditagreement). Additionally, the total leverage ratio upper limit can be increased from 5.0 to 1.0 to 5.5 to 1.0 at our option, subject to theinclusion of a senior secured leverage ratio (senior secured net indebtedness to consolidated trailing 12-month EBITDA, as defined in thecredit agreement) upper limit of 3.75 to 1.0.•Relationship with a large and committed financial sponsor. Our Sponsor, Energy Capital Partners, is an experienced energy investorwith a proven track record of making substantial, long-term investments in high-quality energy assets. In addition to its direct investmentin Summit Investments, Energy Capital Partners began purchasing our common units in open market transactions beginning in December2015. We believe that the relationship with and support of our Sponsor is a competitive advantage as it brings not only significant financialand management experience, but also numerous relationships throughout the energy industry that we believe will continue to benefit us aswe seek to grow our business.•Experienced management team with a proven record of asset acquisition, construction, development, operations and integrationexpertise. Our board members and senior leadership team have extensive energy experience (see Item 10. Directors, Executive Officersand Corporate Governance—Directors and Executive Officers) and a proven track record of identifying, consummating and integratingsignificant acquisitions in addition to partnering with major producers to construct and develop midstream energy infrastructure.6Table of ContentsOur Midstream AssetsOur midstream assets currently consist of five gathering systems:•Mountaineer Midstream in northern West Virginia;•Bison Midstream in northwestern North Dakota;•Polar and Divide in northwestern North Dakota;•DFW Midstream in north-central Texas; and•Grand River in western Colorado and eastern Utah.We compete with other midstream companies, producers and intrastate and interstate pipelines. Competition for volumes is primarily based onreputation, commercial terms, service levels, access to end-use markets, location and available capacity. We may also face competition to gatherproduction drilled outside of our AMIs and attract producer volumes to our gathering systems. Additionally, we could face incremental competitionto the extent we make acquisitions.We earn revenue by providing gathering, treating and/or processing services pursuant to primarily long-term and fee-based gathering andprocessing agreements with some of the largest and most active producers in North America. The fee-based nature of these agreementsenhances the stability of our cash flows by limiting our direct commodity price exposure.The significant features of our gathering and processing agreements and the gathering systems to which they relate are discussed in more detailbelow. For additional information, on a consolidated basis and by reportable segment, see the "Results of Operations" section in MD&A.Areas of Mutual Interest. The vast majority of our gathering and processing agreements contain AMIs. The AMIs generally have original terms ofup to 25 years and require that any production by our customers within the AMIs will be shipped on and/or processed by our systems. Ourcustomers do not have leased production acreage that currently cover our entire AMIs but, to the extent that our customers lease additionalacreage in the future within our AMIs, any production from wells drilled by our customers within that AMI will be gathered and/or processed by oursystems.Under certain of our gas gathering agreements, we have agreed to construct pipeline laterals to connect our gathering systems to pad sites locatedwithin the AMI. However, we may choose not to participate in a discretionary opportunity presented by a customer because we believe that theproject would not meet our internal return expectations. Under this scenario, the customer may, in certain circumstances, construct the additionalinfrastructure and sell it to us at a price equal to their cost plus an applicable margin, or, in some cases, we may release the relevant acreagededication from the AMI.Minimum Volume Commitments. Many of our gathering and processing agreements contain MVCs pursuant to which our customers agree toship or process a minimum volume of production on our gathering systems, or, in some cases, to pay a minimum monetary amount, over certainperiods during the MVC's term. MVCs, like AMIs, are beneficial in connection with the development and ongoing operation of a gathering systembecause they provide a contracted minimum revenue stream at start up and limit our direct commodity price exposure during the life of thegathering system. The original terms of our MVCs range up to 15 years and had a weighted-average remaining life of 8.6 years as of December 31,2015. In addition, certain of our customers have an aggregate MVC, which is a total amount of volume throughput that the customer has agreed toship and/or process on our systems (or an equivalent monetary amount) over the MVC term. In these cases, once a customer achieves itsaggregate MVC, any remaining future MVCs will terminate and the customer will then simply pay the applicable gathering or processing ratemultiplied by the actual throughput volumes shipped or processed.For additional information on our MVCs, see the "Critical Accounting Estimates" section in MD&A and Notes 2 and 7 to the consolidated financialstatements.Mountaineer MidstreamIn June 2013, we acquired certain high-pressure natural gas gathering pipelines and compression assets located in the liquids-rich window of theMarcellus Shale Play from an affiliate of MarkWest Energy Partners, L.P. (“MarkWest,” which has subsequently been acquired by MPLX). Werefer to these assets as the Mountaineer Midstream system, or Mountaineer Midstream. Mountaineer Midstream, which operates in theAppalachian Basin, benefits from its location in Doddridge and Harrison counties in West Virginia where it gathers natural gas under a long-term,fee-7Table of Contentsbased contract with Antero. Mountaineer Midstream consists of newly constructed, high-pressure natural gas gathering pipelines ranging from eightinches to 20 inches in diameter and two compressor stations. This liquids-rich natural gas gathering and compression system serves as a criticalinlet to MPLX's Sherwood Processing Complex, a primary destination for liquids-rich natural gas in northern West Virginia. The MountaineerMidstream system currently provides our midstream services for the Marcellus Shale reportable segment.The following table provides information regarding our Mountaineer Midstream system as of December 31, 2015.Gathering system Throughputcapacity(MMcf/d)Mountaineer Midstream (1) 1,050__________(1) Contract terms related to AMIs and MVCs are excluded for confidentiality purposes.In November 2013, we amended our original fee-based natural gas gathering agreement with Antero whereby we agreed to construct approximatelynine miles of high-pressure, 20-inch pipeline on the Mountaineer Midstream system (the "Zinnia Loop"). The Zinnia Loop project is underpinned bya 12-year, minimum revenue commitment from Antero, which extends the original term of the contract through 2026.During the third quarter of 2014, throughput capacity was increased to 1,050 MMcf/d to support Antero's current and future drilling activities. Withthis expansion, we believe the Mountaineer Midstream system will enhance its strategic position as a primary source of natural gas deliveries tothe Sherwood Processing Complex.Bison MidstreamIn June 2013, we acquired certain associated natural gas gathering pipeline, dehydration and compression assets in the Williston Basin from asubsidiary of Summit Investments. We refer to these assets as the Bison Midstream system, or Bison Midstream. Bison Midstream, which islocated in Mountrail and Burke counties in northwestern North Dakota, consists of low- and high-pressure pipeline and six compressor stations andincludes gathering lines ranging from three inches to 10 inches in diameter. Bison Midstream gathers, compresses and treats associated naturalgas that exists in the crude oil stream produced from the Bakken and Three Forks shale formations. These formations are primarily targeted forcrude oil production and producer drilling decisions and activity on the Bison Midstream system are based largely on the prevailing price of crudeoil. As such, Bison Midstream's volume throughput is also impacted by the prevailing price of crude oil.Our gas gathering agreements for the Bison Midstream system are long-term, fee-based or percent-of-proceeds, contracts ranging from five yearsto 15 years. Natural gas gathered on the Bison Midstream system is delivered to Aux Sable Midstream LLC's ("Aux Sable") Palermo ConditioningPlant in Palermo, North Dakota and then delivered to its 2.1 Bcf/d natural gas processing plant in Channahon, Illinois. The Bison Midstreamsystem currently provides our associated natural gas midstream services for the Williston Basin reportable segment.The following table provides information regarding our Bison Midstream system as of December 31, 2015.Gathering system Throughputcapacity(MMcf/d) ApproximateAMIs(Acres) Average dailyMVCs through2020 (MMcf/d) RemainingMVCs (Bcf) Weighted-averageremainingcontract life(Years) (1)Bison Midstream 32 676,500 8 14 4.6__________(1) Weighted average based on total remaining MVC (total remaining MVCs multiplied by average rate).Volume throughput on the Bison Midstream system is underpinned by MVCs from its anchor customers, EOG and Oasis. In addition to its fee-based gas gathering agreement with EOG and percent-of-proceeds gas gathering agreement with Oasis, the Bison Midstream system is alsosupported by other fee-based gas gathering agreements. As of December 31, 2015, these gas gathering agreements had AMIs extending through2027.Polar and DivideIn May 2015, we acquired certain crude oil and produced water gathering systems and recently commissioned transmission pipelines in theWilliston Basin from a subsidiary of Summit Investments. We refer to these assets,8Table of Contentswhich commenced operations in the second quarter of 2013, as the Polar and Divide system, or Polar and Divide. Polar and Divide, which islocated in Williams and Divide counties in northwestern North Dakota, owns, operates, and is currently developing crude oil and produced watergathering systems and transmission pipelines serving the Bakken and Three Forks shale formations.Polar and Divide's gathering agreements are long-term, fee-based contracts. Several of these gathering agreements include rate redeterminationmechanisms which effectively serve to protect future cash flows by resetting the gathering rate upward in the future in the event that the customerdoes not attain certain minimum production thresholds. Crude oil that is gathered by Polar and Divide is currently delivered to Crestwood EquityPartners LP's COLT Hub rail facility in Epping, North Dakota and produced water is delivered to third-party disposal facilities located throughout theWilliston Basin. The Polar and Divide system currently provides our crude oil and produced water midstream services for the Williston Basinreportable segment.The following table provides information regarding our Polar and Divide system as of December 31, 2015.Gathering system Throughputcapacity(Mbbl/d) ApproximateAMIs(Acres)Polar and Divide (1) 85 192,600__________(1) Contract terms related to MVCs are excluded for confidentiality purposes.The Polar and Divide system is underpinned by two long-term, fee-based gathering agreements with our anchor customers Whiting and SMEnergy. In addition to Whiting and SM Energy, the Polar and Divide system is also supported by other long-term, fee-based gathering agreementsand has executed agreements to expand the system to additional customer pad sites.The Polar and Divide system commissioned the Stampede Lateral, a 46-mile, 10-inch diameter crude oil transmission pipeline, in the first quarterof 2016. The Stampede Lateral has throughput capacity of 60 Mbbl/d and connects to Global Partners LP's Basin Transload rail terminal inColumbus, North Dakota for delivery to east coast markets. In the first quarter of 2016, we also began commissioning the Little Muddy pipeline, a14-mile, 10-inch diameter crude oil transmission pipeline with an interconnect into Enbridge’s North Dakota Pipeline System in Williams County,North Dakota.We will continue to develop the Polar and Divide system to extend our gathering reach, increase capacity, increase our receipt and delivery pointsand maximize volume throughput.DFW MidstreamIn September 2009, we acquired certain natural gas gathering pipeline and compression assets in the Barnett Shale from Energy Future HoldingsCorp. ("Energy Future Holdings") and a subsidiary of Chesapeake. We refer to these assets as the DFW Midstream system, or DFW Midstream.DFW Midstream is primarily located in southeastern Tarrant County, in north-central Texas. Southeastern Tarrant County is commonly referred toas the core of the Barnett Shale. As the largest natural gas-producing county in Texas, we consider this area to be the core of the core of theBarnett Shale because of the quality of the geology and the high production profile of the wells drilled to date. Based on peak month average dailyproduction rates sourced from the Railroad Commission of Texas as of December 2015, this area contains the most prolific wells in the BarnettShale. For example, the two largest and five of the ten largest wells drilled in the Barnett Shale are connected to the DFW Midstream system.The DFW Midstream system includes gathering lines ranging from four inches to 30 inches in diameter and is located along existing electrictransmission corridors and under both private and public property. Since our initial acquisition, we have expanded throughput capacity by installingelectric-drive compression for which we retain a fixed percentage of the natural gas that we receive to offset the costs we incur to operate ourelectric-drive compressors. DFW Midstream currently has six primary interconnections with third-party, primarily intrastate pipelines. Theseinterconnections enable us to connect our customers, directly or indirectly, with the major natural gas market hubs of Waha, Carthage, and Katy inTexas, and Perryville and Henry Hub in Louisiana. The DFW Midstream system currently provides our midstream services for the Barnett Shalereportable segment.9Table of ContentsThe following table provides information regarding our DFW Midstream system as of December 31, 2015.Gathering system Throughputcapacity(MMcf/d) ApproximateAMIs(Acres) Average dailyMVCs through2020 (MMcf/d) RemainingMVCs (Bcf) Weighted-averageremainingcontract life(Years) (1)DFW Midstream 480 108,300 68 120 3.8__________(1) Weighted average based on total remaining MVC (total remaining MVCs multiplied by average rate).In September 2009, we entered into a long-term, fee-based gas gathering agreement with Chesapeake as our anchor customer that included a 20-year AMI covering approximately 95,000 acres and a 10-year MVC totaling approximately 450 Bcf. In addition to Chesapeake, the DFW Midstreamsystem is underpinned by other long-term, fee-based gas gathering agreements. In September 2014, we acquired certain natural gas gatheringassets which increased throughput capacity on the DFW Midstream system by approximately 30 MMcf/d.We designed the DFW Midstream system to benefit from incremental volumes arising from high-density, infill drilling on existing pad sites that arealready connected to the gathering system and, as such, would not require significant additional capital expenditures. Development of the DFWMidstream system has enabled our customers to efficiently produce natural gas by utilizing horizontal drilling techniques from pad sites alreadyconnected in our AMIs. Given the urban nature of southeastern Tarrant County, we expect that the majority of future natural gas drilling in this areawill occur from existing pad site locations.We believe that the AMIs underpinning our system are substantially undeveloped compared with other areas in the Barnett Shale due to thehistorical lack of gathering infrastructure. Furthermore, we believe the production profile of wells drilled within our AMIs and flowing on the DFWMidstream system will continue to attract drilling activity over the long term as producers become more selective in their drilling locations andfocus on the core areas of certain basins to maximize their returns.Grand RiverIn October 2011, we acquired certain natural gas gathering pipeline, dehydration and compression assets in the Piceance Basin from Encana Oil &Gas (USA) Inc., a subsidiary of Encana. We refer to these assets as the Legacy Grand River system. The Legacy Grand River system is primarilylocated in Garfield County, the largest natural gas producing county in Colorado. It gathers natural gas from the Mesaverde formation and theMancos and Niobrara shale formations located within the Piceance Basin.In March 2014, we acquired certain natural gas gathering pipeline, dehydration, compression and processing assets in the Piceance Basin from asubsidiary of Summit Investments. We refer to these assets as the Red Rock Gathering system, or Red Rock Gathering. Summit Investmentsacquired Red Rock Gathering from a subsidiary of Energy Transfer Partners, L.P. in October 2012. Red Rock Gathering gathers and processesnatural gas from the Mesaverde formation and the emerging Mancos and Niobrara shale formations located in western Colorado and eastern Utah.Red Rock Gathering is primarily located in Rio Blanco and Mesa counties in Colorado and Uintah and Grand counties in Utah. The Legacy GrandRiver and Red Rock Gathering systems have been connected and are managed as a single system. As such, we collectively refer to LegacyGrand River and Red Rock Gathering as the Grand River system, or Grand River.The Grand River system is primarily a low-pressure gathering system that was originally designed to gather natural gas produced from directionalwells targeting the liquids-rich Mesaverde formation. The Mesaverde is a shallow, tight sands geologic formation that producers have targeted withdirectional drilling for several decades. We also gather natural gas from our customers' wells targeting the emerging Mancos and Niobrara shaleformations, which underlie the Mesaverde formation, via a new medium-pressure gathering system.Natural gas gathered and/or processed on the Grand River system is compressed, dehydrated, processed and/or discharged to downstreampipelines serving (i) Enterprise's Meeker Natural Gas Processing Plant, a 1.8 Bcf/d processing facility located in Meeker, Colorado, (ii) WilliamsPartners L.P.'s Northwest Pipeline system, and (iii) Kinder Morgan, Inc.'s TransColorado Pipeline system. Processed NGLs from Grand River areinjected into Enterprise's Mid-America Pipeline system. In addition, certain of our gas gathering agreements with our Grand River customers permitus to retain condensate volumes that naturally discharge from the liquids-rich natural gas as it moves across our system. The Grand River systemcurrently provides our midstream services for the Piceance Basin reportable segment.10Table of ContentsThe following table provides information regarding our Grand River system as of December 31, 2015.Gathering system Throughputcapacity(MMcf/d) ApproximateAMIs(Acres) Average dailyMVCs through2020 (MMcf/d) RemainingMVCs (Bcf) Weighted-averageremainingcontract life(Years) (1)Grand River 1,171 687,400 683 1,878 9__________(1) Weighted average based on total remaining MVC (total remaining MVCs multiplied by average rate).In October 2011, we entered into a long-term, fee-based gathering agreement with Encana as our anchor customer that included a 25-year AMIcovering approximately 187,000 acres and a 15-year MVC totaling approximately 1,558 Bcf. In conjunction with Summit Investments' acquisitionof Red Rock Gathering, we assumed fee-based agreements with Black Hills Exploration and Production, Inc. ("Black Hills") and a subsidiary ofWPX. Both agreements include long-term acreage dedications and collectively provide more than 375 Bcf of MVCs. Certain of Grand River's othergathering and processing agreements include MVCs with original terms ranging up to 15 years and AMIs with original terms up to 25 years.In the third quarter of 2015, we executed an expansion agreement with a wholly owned subsidiary of Ursa Resources Group II LLC ("Ursa") toprovide approximately 40 MMcf/d of additional throughput capacity in exchange for new MVCs. This new capacity will be utilized by Ursa as itexecutes its drilling plan over the next two years. In connection with the Black Hills agreement, in March 2014 we commissioned a 20 MMcf/dcryogenic processing plant and related gas gathering infrastructure in the DeBeque, Colorado area to support Black Hills' development of itsacreage in the liquids-rich Mancos and Niobrara formations. In connection with the WPX agreement, we agreed to expand our gathering andcompression services by constructing gas gathering infrastructure to gather new WPX production in the Rifle, Colorado area. In addition toEncana, WPX, Ursa and Black Hills, the Grand River system is underpinned by other long-term, primarily fee-based gas gathering agreements.We anticipate that the majority of our near-term throughput on the Grand River system will continue to originate from the Mesaverde formation. Weexpect to continue to pursue additional volumes on the low-pressure system to more fully utilize Grand River's existing throughput capacity. Inaddition, we believe that the Grand River system is optimally located for expansion to gather production from the emerging Mancos and Niobrarashale formations.For additional information relating to our business and gathering systems as well as the recent decline in natural gas and crude oil prices and ourcommodity price exposure, see the "Trends and Outlook—Natural gas, NGL and crude oil supply and demand dynamics" and "Results ofOperations" sections in MD&A.Regulation of the Natural Gas and Crude Oil IndustriesGeneral. Sales by producers of natural gas, crude oil, condensate, and NGLs are currently made at market prices. However, gathering andtransportation services are subject to various types of regulation, which may affect certain aspects of our business and the market for ourservices. The Federal Energy Regulatory Commission ("FERC") regulates the transportation of natural gas in interstate commerce and theinterstate transportation of crude oil, petroleum products and NGLs. FERC regulation includes reviewing and accepting or approving rates and otherterms and conditions for such transportation services. FERC is also authorized to prevent and sanction market manipulation in natural gasmarkets while the Federal Trade Commission is authorized to prevent and sanction market manipulation in petroleum markets. State and municipalregulations may apply to the production and gathering of natural gas, the construction and operation of natural gas and crude oil facilities, and therates and practices of gathering systems and intrastate pipelines.Regulation of Crude Oil and Natural Gas Exploration, Production and Sales. Sales of crude oil and NGLs are not currently regulated and aretransacted at market prices. In 1989, the U.S. Congress enacted the Natural Gas Wellhead Decontrol Act, which removed all remaining price andnon-price controls affecting wellhead sales of natural gas. FERC, which has the authority under the Natural Gas Act to regulate the prices andother terms and conditions of the sale of natural gas for resale in interstate commerce, has issued blanket authorizations for all gas resellerssubject to its regulation, except interstate pipelines, to resell natural gas at market prices. Either Congress or FERC (with respect to the resale ofgas in interstate commerce), however, could re-impose price controls in the future.Exploration and production operations are subject to various types of federal, state and local regulation, including, but not limited to, permitting,well location, methods of drilling, well operations, and conservation of resources. While11Table of Contentsthese regulations do not directly apply to our business, they may affect our customers' ability to produce natural gas.Regulation of the Gathering and Transportation of Natural Gas and Crude Oil. We believe that our natural gas pipeline facilities qualify asgathering facilities that are exempt from the jurisdiction of FERC under the Natural Gas Act and the Natural Gas Policy Act of 1978 (the "NGPA").As of December 31, 2015, movements of crude oil on our crude oil pipelines were not subject to FERC jurisdiction under the Interstate CommerceAct ("ICA"); however, on February 1, 2016, Polar Midstream's FERC tariff for interstate movements of crude oil on its Little Muddy pipeline in NorthDakota became effective. That tariff will be subject to FERC jurisdiction and oversight. We are also generally subject to FERC's anti-marketmanipulation regulations. The distinction between federally unregulated natural gas and crude oil pipelines and FERC-regulated natural gas andcrude oil pipelines has been the subject of extensive litigation and changes in the policies and interpretations of laws and regulations. In addition,the status of any individual pipeline system may be determined by FERC on a case-by-case basis, although FERC has made no determinationsas to the status of our facilities. Consequently, the classification and regulation of pipeline systems (including some of our pipelines) could changebased on future determinations by FERC or the courts.Intrastate pipelines, which may include some pipelines that perform gathering functions, may be subject to safety regulation by the U.S.Department of Transportation (the "DOT") although typically state regulatory authorities (operating under a federal certification) perform thisfunction. State regulatory authorities also have jurisdiction over the rates and practices of intrastate pipelines and gathering systems, includingrequirements for ratable takes or non-discriminatory access to pipeline services. The basis for state regulation and the degree of regulatoryoversight of gathering systems and intrastate pipelines varies from state to state. In Texas, we are regulated as a gas utility and have filed tariffswith the Railroad Commission of Texas to establish rates and terms of service for our DFW Midstream system assets. We have not been requiredto file a tariff in Colorado or Utah for our Grand River system assets, nor have we been required to file a tariff in West Virginia or North Dakota forour operations in those states, although we are required to submit shape files and other information regarding the location and construction ofunderground gathering pipelines in North Dakota. The states in which we operate have adopted complaint-based regulation that allows natural gasproducers and shippers to file complaints with state regulators in an effort to resolve access issues and rate grievances, among other matters.State authorities in Texas, Colorado, North Dakota, and West Virginia generally have not initiated investigations of the rates or practices ofgathering systems or intrastate pipelines in the absence of a complaint. State regulation of intrastate pipelines continues to evolve and maybecome more stringent in the future. For example, the North Dakota Industrial Commission is considering rule changes that could result inadditional construction and monitoring requirements for all pipelines, including, but not limited to, those that transport produced water.Natural gas, crude oil and produced water production, gathering and transportation, including the construction of new gathering facilities andexpansion of existing gathering facilities may also be subject to local regulation, such as approval and permit requirements.Anti-Market Manipulation Rules. We are subject to the anti-market manipulation provisions in the Natural Gas Act and the NGPA, as amendedby the Energy Policy Act of 2005, which authorize FERC to impose fines of up to $1,000,000 per day per violation of the Natural Gas Act, theNGPA, or their implementing regulations. In addition, the Federal Trade Commission holds statutory authority under the Energy Independence andSecurity Act of 2007 to prevent market manipulation in petroleum markets, including the authority to request that a court impose fines of up to$1,000,000 per violation. These agencies have promulgated broad rules and regulations prohibiting fraud and manipulation in oil and gas markets.The Commodity Futures Trading Commission (the "CFTC") is directed under the Commodity Exchange Act to prevent price manipulations in thecommodity and futures markets, including the energy futures markets. Pursuant to statutory authority, the CFTC has adopted anti-marketmanipulation regulations that prohibit fraud and price manipulation in the commodity and futures markets. The CFTC also has statutory authority toseek civil penalties of up to the greater of $1,000,000 per day per violation or triple the monetary gain to the violator for violations of the anti-market manipulation sections of the Commodity Exchange Act. We are also subject to various reporting requirements that are designed tofacilitate transparency and prevent market manipulation.Safety and Maintenance. We are subject to regulation by the U.S. Department of Transportation, which establishes federal safety standards forthe design, construction, operation and maintenance of natural gas and crude oil pipeline facilities. In the Pipeline Safety Act of 1992, Congressexpanded the U.S. Department of Transportation's regulatory authority to include regulated gathering lines that had previously been exempt fromfederal jurisdiction. The Pipeline Safety Improvement Act of 2002 and the Pipeline Inspection, Protection, Enforcement and Safety Act of 2006established mandatory inspections for certain U.S. oil and natural gas transmission pipelines in high consequence areas. The Pipeline Safety,Regulatory Certainty, and Job Creation Act12Table of Contentsof 2011 reauthorizes funding for federal pipeline safety programs through 2015, increases penalties for safety violations, establishes additionalsafety requirements for newly constructed pipelines, and requires studies of certain safety issues that could result in the adoption of newregulatory requirements for existing pipelines.The DOT has delegated the implementation of safety requirements to the Pipeline and Hazardous Materials Safety Administration ("PHMSA"),which has adopted and enforces safety standards and procedures applicable to a limited number of our pipelines. In addition, many states,including the states in which we operate, have adopted regulations that are identical to or more restrictive than existing DOT regulations forintrastate pipelines. Among the regulations applicable to us, PHMSA requires pipeline operators to develop integrity management programs forcertain pipelines located in high consequence areas, which include high-population areas such as the Dallas-Fort Worth greater metropolitan areawhere our DFW Midstream gathering system is located. While the majority of our pipelines meet the DOT definition of gathering lines and are thuscurrently exempt from the integrity management requirements of PHMSA, we also operate a limited number of pipelines that are subject to theintegrity management requirements. Those regulations require operators, including us, to:•perform ongoing assessments of pipeline integrity;•identify and characterize applicable threats to pipeline segments that could impact a high consequence area;•maintain processes for data collection, integration and analysis;•repair and remediate pipelines as necessary;•adopt and maintain procedures, standards and training programs for control room operations; and•implement preventive and mitigating actions.In October 2015, PHMSA proposed changes to its pipeline safety regulations that would significantly extend the integrity managementrequirements to previously exempt pipelines and would impose additional obligations on pipeline operators that are already subject to the integritymanagement requirements. PHMSA’s proposed rule would also require annual reporting of safety-related conditions and incident reports for allgathering lines and gravity lines, including pipelines that are currently exempt from PHMSA regulations. PHMSA issued a separate regulatoryproposal in July 2015 that would impose pipeline incident prevention and response measures on pipeline operators. PHMSA has also issued anAdvisory Bulletin providing guidance on verification of records related to pipeline maximum allowable operating pressure. Pipelines that do notmeet PHMSA’s record verification standards may be required to perform additional testing or reduce their operating pressures.Gathering systems like ours are also subject to a number of federal and state laws and regulations, including the Federal Occupational Safety andHealth Act and comparable state statutes, the purposes of which are to protect the health and safety of workers, both generally and within thepipeline industry. In addition, the OSHA hazard communication standard, Environmental Protection Agency ("EPA") community right-to-knowregulations under Title III of the federal Superfund Amendment and Reauthorization Act and comparable state statutes require that information bemaintained concerning hazardous materials used or produced in our operations and that such information be provided to employees, state andlocal government authorities and the public.Environmental MattersGeneral. Our operation of pipelines and other assets for the gathering, treating and/or processing of natural gas and the gathering of crude oil andproduced water is subject to stringent and complex federal, state and local laws and regulations relating to the protection of the environment. Asan owner or operator of these assets, we must comply with these laws and regulations at the federal, state and local levels. These laws andregulations can restrict or impact our business activities in many ways, such as:•requiring the installation of pollution-control equipment or otherwise restricting the way we operate;•limiting or prohibiting construction activities in sensitive areas, such as wetlands, coastal regions or areas inhabited by endangered orthreatened species;•delaying system modification or upgrades during permit reviews;•requiring investigatory and remedial actions to mitigate pollution conditions caused by our operations or attributable to former operations;and13Table of Contents•enjoining the operations of facilities deemed to be in non-compliance with permits or permit requirements issued pursuant to or imposed bysuch environmental laws and regulations.Failure to comply with these laws and regulations may trigger administrative, civil and criminal enforcement measures, including the assessmentof monetary penalties. Certain environmental statutes impose strict joint and several liability for costs required to clean up and restore sites wheresubstances, hydrocarbons or wastes have been disposed or otherwise released. Moreover, it is not uncommon for neighboring landowners andother third parties to file claims for personal injury and property damage allegedly caused by the release of hazardous substances, hydrocarbons orother waste products into the environment.The trend in environmental regulation is to place more stringent requirements, resulting in more restrictions and limitations, on activities that mayaffect the environment. Thus, there can be no assurance as to the amount or timing of future expenditures for environmental compliance orremediation and actual future expenditures may be different from the amounts we currently anticipate. We try to anticipate future regulatoryrequirements that might be imposed and plan accordingly to remain in compliance with changing environmental laws and regulations and tominimize the costs of such compliance. We also actively participate in industry groups that help formulate recommendations for addressingexisting and future regulations.The following is a discussion of the material environmental laws and regulations that relate to our business.Hazardous Substances and Waste. Our operations are subject to environmental laws and regulations relating to the management and release ofsolid and hazardous wastes and other substances, including hydrocarbons. These laws generally regulate the generation, storage, treatment,transportation and disposal of solid and hazardous waste and may impose strict joint and several liability for the investigation and remediation ofaffected areas where hazardous substances may have been released or disposed. Furthermore, the Toxic Substances Control Act, and analogousstate laws, impose requirements on the use, storage and disposal of various chemicals and chemical substances at our facilities. TheComprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") and comparable state laws impose liability, without regardto fault or the legality of the original conduct, on certain classes of persons that contributed to the release of a hazardous substance into theenvironment. We may handle hazardous substances within the meaning of CERCLA, or similar state statutes, in the course of our ordinaryoperations and, as a result, may be jointly and severally liable under CERCLA for all or part of the costs required to clean up sites at which thesehazardous substances have been released into the environment.We also generate industrial wastes that are subject to the requirements of the Resource Conservation and Recovery Act and comparable statestatutes. While the Resource Conservation and Recovery Act regulates both solid and hazardous wastes, it imposes strict requirements on thegeneration, storage, treatment, transportation and disposal of hazardous wastes. Although we generate minimal hazardous waste, it is possiblethat non-hazardous wastes, which could include wastes currently generated during our operations, will in the future be designated as hazardouswastes and, therefore, be subject to more rigorous and costly disposal requirements. Moreover, from time to time, the EPA and state regulatoryagencies have considered the adoption of stricter disposal standards for non-hazardous wastes, including natural gas wastes.We currently own or lease properties where hydrocarbons are being or have been handled for many years. Although we believe that the previousoperators utilized operating and disposal practices that were standard in the industry at the time, hydrocarbons or other wastes may have beendisposed of or released on or under the properties owned or leased by us or on or under the other locations where these hydrocarbons and wasteshave been transported for treatment or disposal. These properties and the wastes disposed thereon may be subject to CERCLA, the ResourceConservation and Recovery Act and analogous state laws. Under these laws, we could be required to remove or remediate previously disposedwastes (including wastes disposed of or released by prior owners or operators), to clean up contaminated property (including contaminatedgroundwater) or to perform remedial operations to prevent future contamination. We are not currently aware of any facts, events or conditionsrelating to such requirements that could materially impact our operations or financial condition.Air Emissions. Our operations are subject to the federal Clean Air Act and comparable state and local laws and regulations. These laws andregulations regulate emissions of air pollutants from various industrial sources, including our facilities, and also impose various monitoring, controland reporting requirements. Such laws and regulations may require that we obtain pre-approval for the construction or modification of certainprojects or facilities expected to produce or significantly increase air emissions, obtain and strictly comply with air permits containing variousemissions and operational limitations and utilize specific emission control technologies to limit emissions. Our failure to comply with theserequirements could subject us to monetary penalties, injunctions, conditions or restrictions on operations and criminal enforcement actions.Furthermore, we may be required to incur14Table of Contentscertain capital expenditures in the future to obtain and maintain operating permits and approvals for air pollutant emitting sources.In April 2012, the EPA finalized rules that establish new air emission reporting, monitoring, and control requirements for oil and natural gasproduction and natural gas processing operations. Specifically, the EPA's rule package included New Source Performance Standards ("NSPS") toaddress emissions of sulfur dioxide and volatile organic compounds ("VOCs") from a number of sources that were previously not regulated in thecrude oil and natural gas industry. Through the same rulemaking, the EPA revised several existing regulations to address hazardous air pollutantsfrequently associated with oil and natural gas production and processing activities. The rules establish specific new requirements regardingemissions from compressors, pneumatic controllers, dehydrators, storage tanks and other production equipment. In addition, the rules establishnew leak detection requirements for natural gas processing plants at 500 ppm. These rules required a number of modifications to our operations,including the installation of new equipment to control emissions from VOC emitting tanks at initial startup. To date, compliance with such rules hasnot resulted in significant costs.On August 18, 2015, the EPA submitted revisions to its 2012 NSPS for the crude oil and natural gas industry to reduce emissions of greenhousegases, most notably methane, along with smog-forming VOCs. The updates would add methane to the pollutants covered by the rule, along withrequirements for detecting and repairing leaks at gathering and boosting stations, and requirements to limit emissions from pneumatic pumps usedat gathering and boosting stations. The updates are expected to be finalized mid-year 2016.On October 1, 2015, the EPA issued a new lower national ambient air quality standard (“NAAQS”) for ozone. The previous ozone standard was setat 75 parts per billion ("ppb"). The revised standard has been lowered to 70 ppb. The lowered ozone NAAQS could result in a significant expansionof ozone nonattainment areas across the United States, including areas in which we operate, which could subject us to increased regulatoryburdens in the form of more stringent emission controls, emission offset requirements, and increased permitting delays and costs. Impacts fromthe new standard have not yet been determined, as states are still in the process of incorporating the new standard into their respective stateimplementation plans. We will continue to monitor developments to determine if any adverse effects on our operations can be expected.In addition, in February 2014, the Colorado Department of Public Health and Environment’s Air Quality Control Commission finalized regulationsimposing stringent new requirements relating to air emissions from oil and gas facilities in Colorado. These new Colorado rules include storagetank control, monitoring, recordkeeping and reporting requirements as well as leak detection and repair requirements for both well productionfacilities and compressor stations and associated equipment. The new requirements went into effect January 2015 and we will continue to evaluatehow these requirements impact our business.Water Discharges. The Clean Water Act, and analogous state laws impose restrictions and strict controls regarding the discharge of pollutantsinto regulated waters, which impacts our ability to conduct construction activities in waters and wetlands. Certain state regulations and the generalpermits issued under the Federal National Pollutant Discharge Elimination System program prohibit the discharge of pollutants and chemicals. Inaddition, the Clean Water Act and analogous state laws require individual permits or coverage under general permits for discharges of storm waterrunoff from certain types of facilities. These permits require us to control storm water runoff from some of our facilities. Some states also maintaingroundwater protection programs that require permits for discharges or operations that may impact groundwater conditions. Federal and stateregulatory agencies can impose administrative, civil and criminal penalties for non-compliance with discharge permits or other requirements of theClean Water Act and analogous state laws and regulations.Oil Pollution Act. The Oil Pollution Control Act (the "OPA") requires the preparation of a Spill Prevention Control and Countermeasure (“SPCC”)plan for facilities engaged in drilling, producing, gathering, storing, processing, refining, transferring, distributing, using, or consuming oil and oilproducts, and which due to their location, could reasonably be expected to discharge oil in harmful quantities into or upon the navigable waters ofthe United States. The owner or operator of an SPCC-regulated facility is required to prepare a written, site-specific spill prevention plan, whichdetails how a facility's operations comply with the requirements. To be in compliance, the facility's SPCC plan must satisfy all of the applicablerequirements for drainage, bulk storage tanks, tank car and truck loading and unloading, transfer operations (intrafacility piping), inspections andrecords, security, and training. Certain of our facilities are classified as SPCC-regulated facilities. We believe that they are in substantialcompliance with all applicable requirements of OPA.Hydraulic Fracturing. Hydraulic fracturing is an important and increasingly common practice that is used to stimulate production of natural gasand/or crude oil from dense subsurface rock formations, and is primarily presently regulated by state agencies. However, Congress has in the pastand may in the future consider legislation15Table of Contentsto regulate hydraulic fracturing by federal agencies. Many states have already adopted laws and/or regulations that require disclosure of thechemicals used in hydraulic fracturing, and are considering legal requirements that could impose more stringent permitting, disclosure and wellconstruction requirements on oil and/or natural gas drilling activities. The EPA is also moving forward with various related regulatory actions,including approving new regulations requiring green completions of hydraulically-fractured wells and corresponding reporting requirements that wentinto effect in 2015. We do not believe these new regulations will have a direct effect on our operations, but because natural gas and/or crude oilproduction using hydraulic fracturing is growing rapidly in the United States, if new or more stringent federal, state or local legal restrictions relatingto such drilling activities or to the hydraulic fracturing process are adopted, this could result in a reduction in the supply of natural gas and/or crudeoil.Endangered Species Act. The Endangered Species Act restricts activities that may affect endangered or threatened species or their habitats.Some of our pipelines may be located in areas that are designated as habitats for endangered or threatened species.National Environmental Policy Act. The National Environmental Policy Act (the "NEPA"), establishes a national environmental policy and goalsfor the protection, maintenance and enhancement of the environment and provides a process for implementing these goals within federal agencies.A major federal agency action having the potential to significantly impact the environment requires review under NEPA and, as a result, manyactivities requiring FERC approval must undergo NEPA review. Many of our activities are covered under categorical exclusions which results in ashorter NEPA review process. The Council on Environmental Quality has announced an intention to reinvigorate NEPA reviews and in March 2012,issued final guidance that may result in longer review processes.Climate Change. In December 2009, the EPA published its findings that emissions of carbon dioxide, methane and other GHGs present anendangerment to public health and the environment because emissions of such gases are contributing to warming of the earth’s atmosphere andother climatic changes. Based on these findings, the EPA has adopted regulations under the Clean Air Act that, among other things, establishGHG emission limits from motor vehicles as well as establish Prevention of Significant Deterioration (“PSD”) construction and Title V operatingpermit reviews for certain large stationary sources that are potential major sources of GHG emissions. Facilities required to obtain PSD permits fortheir GHG emissions also will be required to meet “best available control technology” standards that will be established by the states or, in somecases, by the EPA on a case-by-case basis.In addition, in September 2009, the EPA issued a final rule requiring the reporting of greenhouse gas emissions from specified large greenhousegas emitting sources in the United States beginning in 2011 for emissions in 2010. In November 2010, the EPA published a final rule expanding itsexisting greenhouse gas emissions reporting to include onshore and offshore oil and natural gas systems beginning in 2012. We are required toreport under these rules for our assets that have GHG emissions above the reporting thresholds. On October 22, 2015, the EPA issued revisionsto Subpart W of the GHG reporting rule to include reporting requirements for gathering and booster stations, onshore natural gas transmissionpipelines, and completions and workovers of oil wells with hydraulic fracturing. This development will result in increased monitoring and reportingfor our operations and for upstream producers for whom we provide midstream services. The EPA continues to consider additional climate changerequirements for the energy industry. We will continue to monitor any such additional requirements to determine if they will impact our operations.Legislation or regulations that may be adopted to address climate change could also affect the markets for our products by making our productsmore or less desirable than competing sources of energy. To the extent that our products are competing with higher greenhouse gas emittingenergy sources, our products would become more desirable in the market with more stringent limitations on greenhouse gas emissions.Conversely, to the extent that our products are competing with lower greenhouse gas emitting energy sources such as solar and wind, ourproducts would become less desirable in the market with more stringent limitations on greenhouse gas emissions.Other InformationEmployees. SMLP does not have any employees. All of the employees required to conduct and support its operations are employed by SummitInvestments, but these individuals are sometimes referred to as our employees. The officers of our general partner manage our operations andactivities. As of December 31, 2015, Summit Investments employed 294 people who provide direct, full-time support to our operations. None of ouremployees are covered by collective bargaining agreements, and we have never experienced any business interruption as a result of any labordisputes.16Table of ContentsAvailability of Reports. We make certain filings with the Securities and Exchange Commission (the "SEC"), including, among other filings, ourannual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments and exhibits to those reports,available free of charge through our website, www.summitmidstream.com, as soon as reasonably practicable after the date they are filed with, orfurnished to, the SEC. The filings are also available at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549 or bycalling 1-800-SEC-0330. These filings are also available through the SEC's website, www.sec.gov. Our press releases and recent investorpresentations are also available on our website.Item 1A. Risk Factors.Item 1A. Risk Factors is divided into the following sections:•Risks Related to our Business•Risks Inherent in an Investment in Us•Tax RisksRisks Related to our BusinessOur principal business strategy is to increase the amount of cash distribution we make to our unitholders over time. We may not havesufficient cash from operations following the establishment of cash reserves and payment of fees and expenses, including costreimbursements of expenses incurred on our behalf by our general partner, to enable us to pay the minimum quarterly distribution("MQD") or any distribution to holders of our common units.To pay the MQD of $0.40 per unit per quarter, or $1.60 per unit on an annualized basis, we will require available cash of $27.1 million per quarter,or $108.5 million per year (based on units outstanding, as of December 31, 2015). We may not have sufficient available cash from operatingsurplus each quarter to pay the MQD. The amount of cash we can distribute on our units principally depends upon the amount of cash we generatefrom our operations, which will fluctuate from quarter to quarter based on, among other things:•the volumes we gather, treat and process;•the level of production of natural gas and crude oil (and associated volumes of produced water) from wells connected to our gatheringsystems, which is dependent in part on the demand for, and the market prices of, crude oil, natural gas and NGLs;•damage to pipelines, facilities, related equipment and surrounding properties caused by earthquakes, floods, fires, severe weather,explosions and other natural disasters, accidents and acts of terrorism;•leaks or accidental releases of hazardous materials into the environment;•weather conditions and seasonal trends;•changes in the fees we charge for our services;•the level of competition from other midstream energy companies in our areas of operation;•changes in the level of our operating, maintenance and general and administrative expenses;•regulatory action affecting the supply of, or demand for, crude oil, natural gas and NGLs, the fees we can charge, how we contract forservices, our existing contracts, our operating and maintenance costs or our operating flexibility; and•prevailing economic and market conditions.In addition, the actual amount of cash we will have available for distribution will depend on other factors, some of which are beyond our control,including:•the level and timing of capital expenditures we make;•the level of our operating, maintenance and general and administrative expenses, including reimbursements of expenses incurred on ourbehalf by our general partner;•the cost of acquisitions, if any;Table of Contents•our debt service requirements and other liabilities;•fluctuations in our working capital needs;•our ability to borrow funds and access capital markets;•restrictions contained in our debt agreements;•the amount of cash reserves established by our general partner;•not receiving anticipated shortfall payments from our customers; and•other business risks affecting our cash levels.We depend on certain customers for a significant portion of our revenues. The loss of, or material nonpayment or nonperformance by,or the curtailment of production by, any one or more of these customers could materially adversely affect our revenues, cash flow andability to make cash distributions to our unitholders.Certain of our customers may have material financial and liquidity issues or may, as a result of operational incidents or other events, bedisproportionately affected as compared to larger, better-capitalized companies. Any material nonpayment or nonperformance by any of thesecustomers could have a material adverse effect on our revenue and cash flows and our ability to make cash distributions to our unitholders. Weexpect our exposure to concentrated risk of non-payment or non-performance to continue as long as we remain substantially dependent on arelatively small number of customers for a substantial portion of our revenue.If our customers curtail or reduce production in our areas of operation, it could reduce throughput on our system and, therefore, materiallyadversely affect our revenues, cash flow and ability to make cash distributions to our unitholders.We are exposed to the creditworthiness and performance of our customers, suppliers and contract counterparties, and any materialnonpayment or nonperformance by one or more of these parties could materially adversely affect our financial and operating results.Although we attempt to assess the creditworthiness and associated liquidity of our customers, suppliers and contract counterparties, there can beno assurance that our assessments will be accurate or that there will not be a rapid or unanticipated deterioration in their creditworthiness, whichmay have an adverse impact on our business, results of operations, financial condition and ability to make cash distributions to our unitholders. Inaddition, there can be no assurance that our contract counterparties will perform or adhere to existing or future contractual arrangements, includingmaking any required shortfall payments.The policies and procedures we use to manage our exposure to credit risk, such as credit analysis, credit monitoring and, if necessary, requiringcredit support, cannot fully eliminate counterparty credit risks. To the extent our policies and procedures prove to be inadequate, our financial andoperational results may be negatively impacted.Some of our counterparties may be highly leveraged, have limited financial resources and/or have recently experienced a rating agency downgradeand will be subject to their own operating and regulatory risks. Even if our credit review and analysis mechanisms work properly, we mayexperience financial losses in our dealings with such parties. In addition, volatility in commodity prices could have a negative impact on ourcounterparties, which, in turn, could have a negative impact on their ability to meet their obligations to us.Any material nonpayment or nonperformance by any of our counterparties or suppliers could require us to pursue substitute counterparties orsuppliers for the affected operations or reduce our operations. There can be no assurance that any such efforts would be successful or wouldprovide similar financial and operational results.Adverse developments in our areas of operation could materially adversely impact our financial condition, results of operations andcash flows and reduce our ability to make cash distributions to our unitholders.Our operations are focused on gathering, treating and processing services in four unconventional resource basins: (i) the Appalachian Basin, whichincludes the Marcellus Shale formation in northern West Virginia; (ii) the Williston Basin, which includes the Bakken and Three Forks shaleformations in northwestern North Dakota; (iii) the Fort Worth Basin, which includes the Barnett Shale formation in north-central Texas; and (iv) thePiceance Basin, which includes the Mesaverde formation and the Mancos and Niobrara shale formations in western Colorado and eastern Utah.Due to our limited industry and geographic diversity, adverse developments in the natural gas and crude oil18Table of Contentsindustries or in our existing areas of operation could have a significantly greater impact on our financial condition, results of operations and cashflows.Significant prolonged weakness in natural gas, NGL and crude oil prices could reduce throughput on our systems and materiallyadversely affect our revenues and cash available to make cash distributions to our unitholders over the long term.The current level of natural gas, NGL and crude oil prices has had a negative impact on exploration, development and production activity in ourareas of operation. Unchanged or lower natural gas, NGL and crude oil prices over the long term could result in a further decline in the productionof natural gas and crude oil, thereby resulting in reduced throughput on our gathering systems. The price of natural gas has been at historically lowlevels for an extended period of time. In addition, the price of crude oil has experienced a significant decline since the fall of 2014 in response to aglobal supply surplus.Additionally, due to the extended period of historically low natural gas prices and decline in NGL and crude oil prices, certain of our customers ineach of our areas of operations have, and others could, reduce drilling activity and capital expenditure budgets. If natural gas, NGL and/or crude oilprices remain depressed or decrease further, it could cause sustained reductions in exploration or production activity in our areas of operation andresult in a further reduction in throughput on our systems, which could have a material adverse effect on our business, financial condition, resultsof operations and ability to make cash distributions to our unitholders.Because of the natural decline in production from existing wells in our areas of operation, our success depends in part on ourcustomers replacing declining production and also on our ability to maintain levels of throughput on our systems. Any decrease in thevolumes that we gather and process could materially adversely affect our business and operating results.The customer volumes that support our business depend on the level of production from natural gas and crude oil wells connected to our systems,the production from which may be less than expected and will naturally decline over time. As a result, our cash flows associated with these wellswill also decline over time. To maintain or increase throughput levels on our systems, we must obtain new sources of volume throughput. Theprimary factors affecting our ability to obtain new sources of volume throughput include (i) the level of successful drilling activity in our areas ofoperation and (ii) our ability to compete for new volumes on our systems.We have no control over the level of drilling activity in our areas of operation, the amount of reserves associated with wells connected to oursystems or the rate at which production from a well declines. In addition, we have no control over producers or their drilling and productiondecisions, which are affected by, among other things:•the availability and cost of capital;•prevailing and projected commodity prices, including the prices of crude oil, natural gas and other hydrocarbon products, including NGLs;•demand for crude oil, natural gas and other hydrocarbon products, including NGLs;•levels of reserves;•geological considerations;•environmental or other governmental regulations, including the availability of drilling permits and the regulation of hydraulic fracturing; and•the availability of drilling rigs and other costs of production and equipment.Fluctuations in energy prices can also greatly affect the development of new crude oil and natural gas reserves. Drilling and production activitygenerally decreases as commodity prices decrease. In general terms, the prices of crude oil, natural gas, and other hydrocarbon products fluctuatein response to changes in supply and demand, market uncertainty and a variety of additional factors that are beyond our control. These factorsinclude:•worldwide economic and geopolitical conditions;•weather conditions and seasonal trends;•the levels of domestic production and consumer demand;•the availability of imported liquefied natural gas ("LNG");•the ability to export LNG;19Table of Contents•the availability of transportation systems with adequate capacity;•the volatility and uncertainty of regional pricing differentials and premiums;•the price and availability of alternative fuels;•the effect of energy conservation measures;•the nature and extent of governmental regulation and taxation; and•the anticipated future prices of crude oil, natural gas and other hydrocarbon products, including NGLs.Because of these factors, even if new crude oil or natural gas reserves are known to exist in areas served by our assets, producers may choosenot to develop those reserves. If reductions in drilling activity result in our inability to maintain the current levels of throughput on our systems,those reductions could reduce our revenue and cash flow and materially adversely affect our ability to make cash distributions to our unitholders.In addition, it may be more difficult to maintain or increase the current volumes on our gathering systems, as several of the formations in theunconventional resource plays in which we operate generally have higher initial production rates and steeper production decline curves than wellsin more conventional basins. Should we determine that the economics of our gathering, treating and processing assets do not justify the capitalexpenditures needed to grow or maintain volumes associated therewith, revenues associated with these assets will decline over time. In additionto capital expenditures to support growth, the steeper production decline curves associated with unconventional resource plays may require us toincur higher maintenance capital expenditures over time, which will reduce our cash available for distribution.Many of our costs are fixed and do not vary with our throughput. These costs may not decline ratably or at all should we experience a reduction inthroughput, which could result in a decline in our revenue and cash flow and materially adversely affect our ability to make cash distributions to ourunitholders.If our customers do not increase the volumes they provide to our gathering systems, our growth strategy and ability to increase cashdistributions to our unitholders may be materially adversely affected.If we are unsuccessful in attracting new customers and/or new gathering opportunities with existing customers, our ability to increase thethroughput on our gathering systems will be dependent on receiving increased volumes from our existing customers. Our customers are notobligated to provide additional volumes to our gathering systems, and they may determine in the future that drilling activities in areas outside of ourcurrent areas of operation are strategically more attractive to them. Reductions by our customers in our areas of mutual interest could result inreductions in throughput on our systems and materially adversely impact our ability to grow our operations and increase cash distributions to ourunitholders.Certain of our gathering and processing agreements contain provisions that can reduce the cash flow stability that the agreements weredesigned to achieve.Our gathering and processing agreements were designed to generate stable cash flows for us over the life of the MVC contract term while alsominimizing direct commodity price risk. Under certain of these MVCs, our customers agree to ship a minimum volume on our gathering systems orsend a minimum volume to our processing plants or, in some cases, to pay a minimum monetary amount, over certain periods during the term ofthe MVC. In addition, the majority of our gathering and processing agreements also include an aggregate MVC, which is a total amount that thecustomer must flow on our gathering system or send to our processing plants (or an equivalent monetary amount) over the MVC term. If acustomer's actual throughput volumes are less than its minimum volume commitment for the contracted measurement period, it must make ashortfall payment to us at the end of that contract month, quarter or year, as applicable. The amount of the shortfall payment is based on thedifference between the actual throughput volume shipped or processed for the applicable period and the MVC for the applicable period, multipliedby the applicable fee. To the extent that a customer's actual throughput volumes are above or below its MVC for the applicable contractedmeasurement period, many of our gathering agreements contain provisions that allow the customer to use the excess volumes or the shortfallpayment to credit against future excess volumes or future shortfall payments, which could have a material adverse effect on our results ofoperations, financial condition and cash flows and our ability to make cash distributions to our unitholders.20Table of ContentsWe do not intend to obtain independent evaluations of the reserves connected to our gathering systems on a regular or ongoing basis;therefore, in the future, customer volumes on our systems could be less than we anticipate.We have not obtained and do not intend to obtain independent evaluations of all of the reserves connected to our systems. Moreover, even if wedid obtain independent evaluations of all of the reserves connected to our systems, such evaluations may prove to be incorrect. Crude oil andnatural gas reserve engineering requires subjective estimates of underground accumulations of crude oil and natural gas and assumptionsconcerning future crude oil and natural gas prices, future production levels and operating and development costs.Accordingly, we may not have accurate estimates of total reserves dedicated to some or all of our systems or the anticipated life of suchreserves. If the total reserves or estimated life of the reserves connected to our gathering systems are less than we anticipate and we are unableto secure additional volumes, it could have a material adverse effect on our business, results of operations, financial condition and our ability tomake cash distributions to our unitholders.Our industry is highly competitive, and increased competitive pressure could materially adversely affect our business and operatingresults.We compete with other midstream companies, in our areas of operations, some of which are large companies that have greater financial,managerial and other resources than we do. In addition, some of our competitors may have assets in closer proximity to natural gas and crude oilsupplies and may have available idle capacity in existing assets that would not require new capital investments for use. Our competitors mayexpand or construct gathering systems that would create additional competition for the services we provide to our customers. Because ourcustomers do not have leases that cover the entirety of our areas of mutual interest, non-customer producers that lease acreage within any of ourareas of mutual interest may choose to use one of our competitors for their gathering and/or processing service needs.In addition, our customers may develop their own gathering systems outside of our areas of mutual interest. Our ability to renew or replace existingcontracts with our customers at rates sufficient to maintain current revenue and cash flow could be materially adversely affected by the activitiesof our competitors and our customers. All of these competitive pressures could have a material adverse effect on our business, results ofoperations, financial condition and ability to make cash distributions to our unitholders.We may not be able to renew or replace expiring contracts at favorable rates or on a long-term basis.Our gathering, treating and processing contracts have terms of various durations. As these contracts expire, we may have to negotiate extensionsor renewals with existing customers or enter into new contracts with other customers. We may be unable to obtain new contracts on favorablecommercial terms, if at all. We also may be unable to maintain the economic structure of a particular contract with an existing customer or theoverall mix of our contract portfolio. Moreover, we may be unable to obtain areas of mutual interest from new customers in the future, and we maybe unable to renew existing areas of mutual interest with current customers as and when they expire. The extension or replacement of existingcontracts depends on a number of factors beyond our control, including:•the level of existing and new competition to provide gathering and/or processing services in our areas of operation;•the macroeconomic factors affecting gathering, treating and processing economics for our current and potential customers;•the balance of supply and demand, on a short-term, seasonal and long-term basis, in our markets;•the extent to which the customers in our areas of operation are willing to contract on a long-term basis; and•the effects of federal, state or local regulations on the contracting practices of our customers.To the extent we are unable to renew our existing contracts on terms that are favorable to us or successfully manage our overall contract mix overtime, our revenues and cash flows could decline and our ability to make cash distributions to our unitholders could be materially adverselyaffected.If third-party pipelines or other midstream facilities interconnected to our gathering systems become partially or fully unavailable, ourrevenue and cash flow and our ability to make cash distributions to our unitholders could be materially adversely affected.Our gathering systems connect to third-party pipelines and other midstream facilities, such as processing plants, rail terminals and produced waterdisposal facilities. The continuing operation of such third-party pipelines and other21Table of Contentsmidstream facilities is not within our control. These pipelines and other midstream facilities may become unavailable due to issues including, butnot limited to, testing, turnarounds, line repair, reduced operating pressure, lack of operating capacity, regulatory requirements, curtailments ofreceipt or deliveries due to insufficient capacity or because of damage from other operational hazards. In addition, we do not have interconnectagreements with all of these pipelines and other facilities and the agreements we do have may be terminated in certain circumstances and/or onshort notice. If any of these pipelines or other midstream facilities become unavailable for any reason, or, if these third parties are otherwiseunwilling to receive or transport the natural gas, crude oil and produced water that we gather and/or process, our revenue, cash flow and ability tomake cash distributions to our unitholders could be materially adversely affected.We have a limited ownership history with respect to all of our assets. There could be unknown events or conditions or increasedmaintenance or repair expenses and downtime associated with our pipelines that could have a material adverse effect on our businessand operating results.We have a relatively limited history of operating our assets. There may be historical occurrences or latent issues regarding our pipeline systems ofwhich we may be unaware and that may have a material adverse effect on our business and results of operations. The steeper production declinecurves associated with unconventional resource plays may require us to incur higher maintenance capital expenditures over time to connectadditional wells and maintain throughput volume. Any significant increase in maintenance and repair expenditures or loss of revenue due to thecondition of our pipeline systems could materially adversely affect our business and results of operations and our ability to make cash distributionsto our unitholders.Crude oil and natural gas production in certain areas in which we operate may be adversely affected by seasonal weather conditionswhich in turn could negatively impact the operations of our gathering, treating and processing facilities and our construction ofadditional facilities.Extended periods of below freezing weather and unseasonably wet weather conditions, especially in North Dakota and West Virginia, can besevere and can adversely affect crude oil and natural gas operations due to the potential shut-in of producing wells or decreased drilling activities.The result of these types of interruptions could result in a decrease in the volumes supplied to our gathering systems. Further, delays andshutdowns caused by severe weather during the winter months may have a material negative impact on the continuous operations of ourgathering, treating and processing systems, including interruptions in service. These types of interruptions could negatively impact our ability tomeet our contractual obligations to our customers and thereby give rise to certain termination rights and/or the release of dedicated acreage. Anyresulting terminations or releases could materially adversely affect our business and results of operations.Interruptions in operations at any of our facilities may adversely affect our operations and cash flows available for distribution to ourunitholders.Our operations depend upon the infrastructure that we have developed and constructed. Any significant interruption at any of our gathering, treatingor processing facilities, or in our ability to provide gathering, treating or processing services, could adversely affect our operations and cash flowsavailable for distribution to our unitholders.Operations at our facilities could be partially or completely shut down, temporarily or permanently, as the result of circumstances not within ourcontrol, such as:•unscheduled turnarounds or catastrophic events at our physical plants or pipeline facilities;•restrictions imposed by governmental authorities or court proceedings;•labor difficulties that result in a work stoppage or slowdown;•a disruption in the supply of resources necessary to operate our midstream facilities;•damage to our facilities resulting from production volumes that do not comply with applicable specifications; and•inadequate transportation or market access to support production volumes, including lack of pipeline, rail terminals, produced waterdisposal facilities and/or third-party processing capacity.22Table of ContentsOur business involves many hazards and operational risks, some of which may not be fully covered by insurance. If a significantincident or event occurs for which we are not adequately insured or if we fail to recover all anticipated insurance proceeds for significantincidents or events for which we are insured, our operations and financial results could be materially adversely affected.Our operations are subject to all of the risks and hazards inherent in the operation of gathering, treating and processing systems, including:•damage to pipelines, processing plants, compression assets, related equipment and surrounding properties caused by tornadoes, floods,fires and other natural disasters and acts of terrorism;•inadvertent damage from construction, vehicles, farm and utility equipment;•leaks or losses resulting from the malfunction of equipment or facilities;•ruptures, fires and explosions; and•other hazards that could also result in personal injury and loss of life, pollution and suspension of operations.These risks could result in substantial losses due to personal injury and/or loss of life, severe damage to and destruction of property andequipment and pollution or other environmental damage. The location of certain of our systems in or near populated areas, including residentialareas, commercial business centers and industrial sites, could increase the damages resulting from these risks.These risks may also result in curtailment or suspension of our operations. A natural disaster or any event such as those described aboveaffecting the areas in which we and our customers operate could have a material adverse effect on our operations. Accidents or other operatingrisks could further result in loss of service available to our customers. Such circumstances, including those arising from maintenance and repairactivities, could result in service interruptions on portions or all of our gathering systems. Potential customer impacts arising from serviceinterruptions on segments of our gathering systems could include limitations on our ability to satisfy customer requirements, obligations totemporarily waive minimum volume commitments during times of constrained capacity, and solicitation of existing customers by others forpotential new projects that would compete directly with our existing services. Such circumstances could materially adversely impact our ability tomeet contractual obligations and retain customers, with a resulting negative impact on our business and results of operations and our ability tomake cash distributions to our unitholders.Our insurance coverage is provided by policies that cover all of our assets and those of Summit Investments and its non-SMLP subsidiaries.Therefore, it is possible that an incident, or incidents, at those subsidiaries could exhaust claim capacity and leave SMLP and its subsidiariesexposed to risk of loss should they experience a loss during the same policy cycle. In addition, although we have a range of insurance programsproviding varying levels of protection for public liability, damage to property, loss of income and certain environmental hazards, we may not beinsured against all causes of loss, claims or damage that may occur. If a significant incident or event occurs for which we are not fully insured, itcould materially adversely affect our operations and financial condition. Furthermore, we may not be able to maintain or obtain insurance of thetype and amount we desire at reasonable rates and/or claims by Summit Investments or its non-SMLP subsidiaries may increase rates on all ofthe insured-asset group, including those owned by SMLP and its subsidiaries. As a result of industry or market conditions, some of which arebeyond our control, premiums and deductibles for certain of our insurance policies may substantially increase. In some instances, certaininsurance could become unavailable or available only for reduced amounts of coverage. Additionally, with regard to the assets we have acquired,we have limited indemnification rights to recover in the event of any potential environmental liabilities.We intend to grow our business in part by seeking strategic acquisition opportunities. If we are unable to make acquisitions oneconomically acceptable terms from third parties, our future growth will be affected, and the acquisitions we do make may reduce, ratherthan increase, our cash generated from operations. Our ability to grow depends, in part, on our ability to make acquisitions that increaseour cash generated from operations. The acquisition component of our strategy also relies, in part, on the continued divestiture ofmidstream assets by industry participants. A material decrease in such divestitures would limit our opportunities for future acquisitionsand could materially adversely affect our ability to grow our operations and increase our cash distributions to our unitholders.If we are unable to make accretive acquisitions from third parties, whether because we are (i) unable to identify attractive acquisition candidates ornegotiate acceptable purchase contracts; (ii) unable to obtain financing for these acquisitions on economically acceptable terms; (iii) outbid bycompetitors; or (iv) unable to obtain necessary23Table of Contentsgovernmental or third-party consents or for any other reason, then our future growth and ability to increase cash distributions on a per-unit basiswill be limited. If we are unable to acquire assets from third parties in the near or long term it may adversely affect our ability to grow our business.Even if we do make acquisitions that we believe will be accretive, these acquisitions may nevertheless result in a decrease in the cash generatedfrom operations. Any acquisition involves potential risks, including, among other things:•mistaken assumptions about volumes, revenue and costs, including synergies and potential growth;•an inability to secure adequate customer commitments to use the acquired systems or facilities;•the risk that natural gas or crude oil reserves expected to support the acquired assets may not be of the anticipated magnitude or may notbe developed as anticipated;•an inability to successfully integrate the assets or businesses we acquire;•coordinating geographically disparate organizations, systems and facilities;•the assumption of unknown liabilities for which we are not indemnified or for which our indemnity is inadequate;•mistaken assumptions about the overall costs of debt or equity capital;•the diversion of management's and employees' attention from other business concerns;•unforeseen difficulties operating in new geographic areas and business lines;•customer or key employee losses at the acquired businesses;•production declines higher than anticipated; and•facilities being properly constructed.If we consummate any future acquisitions, our capitalization, results of operations and future growth may change significantly and our unitholderswill not have the opportunity to evaluate the economic, financial and other relevant information that we will consider in deciding to engage in thesefuture acquisitions, which may reduce, rather than increase, our cash generated from operations.Following the initial closing of the 2016 Drop Down, which is expected to occur in March 2016, substantially all of the assets owned by SummitInvestments will be contributed to the Partnership, and, as a result, our growth strategy will become more dependent on making acquisitions fromthird parties. This shift from a growth strategy focused, primarily, on acquisitions from Summit Investments, to one focused, primarily, on third-party acquisitions could materially adversely affect our ability to grow our operations and increase our cash distributions to our unitholders.We may fail to successfully integrate gathering system acquisitions into our existing business in a timely manner, which could have amaterial adverse effect on our business, results of operations, financial condition and ability to make cash distributions to ourunitholders, or fail to realize all of the expected benefits of the acquisitions, which could negatively impact our future results ofoperations.Integration of future gathering system acquisitions could be a complex, time-consuming and costly process, particularly if the acquired assetssignificantly increase our size and/or diversify the geographic areas in which we operate or the service offerings that we provide.The failure to successfully integrate the acquired assets with our existing business in a timely manner may have a material adverse effect on ourbusiness, results of operations, financial condition and ability to make cash distributions to our unitholders. If any of the risks described above orin the immediately preceding risk factor or unanticipated liabilities or costs were to materialize with respect to future acquisitions or if the acquiredassets were to perform at levels below the forecasts we used to evaluate them, then the anticipated benefits from the acquisition may not be fullyrealized, if at all, and our future results of operations and ability to make cash distributions to unitholders could be negatively impacted.Our construction of new assets may not result in revenue increases and will be subject to regulatory, environmental, political, legal andeconomic risks, which could materially adversely affect our results of operations and financial condition.One of the ways we intend to grow our business is through organic growth projects. The construction of additions or modifications to our existingsystems and the construction of new midstream assets involve numerous regulatory, environmental, political, legal and economic uncertaintiesthat are beyond our control.24Table of ContentsSuch expansion projects may also require the expenditure of significant amounts of capital, and financing, traditional or otherwise, may not beavailable on economically acceptable terms or at all. If we undertake these projects, our revenue may not increase immediately upon theexpenditure of funds for a particular project and they may not be completed on schedule, at the budgeted cost, or at all.Moreover, we could construct facilities to capture anticipated future production growth in a region where such growth does not materialize or onlymaterializes over a period materially longer than expected. To the extent we rely on estimates of future production in our decision to constructadditions to our systems, such estimates may prove to be inaccurate due to the numerous uncertainties inherent in estimating quantities of futureproduction. As a result, new facilities may not attract enough throughput to achieve our expected investment return, which could materiallyadversely affect our results of operations and financial condition.In addition, the construction of additions or modifications to our existing gathering, treating and processing assets and the construction of newmidstream assets may require us to obtain new rights-of-way or federal and state environmental or other authorizations. The approval process forgathering, treating and processing activities has become increasingly challenging, due in part to state and local concerns related to unregulatedexploration and production and gathering, treating and processing activities in new production areas. Such authorization may not be granted or, ifgranted, such authorization may include burdensome or expensive conditions. As a result, we may be unable to obtain such rights-of-way or otherauthorizations and may, therefore, be unable to connect new volumes to our systems or capitalize on other attractive expansion opportunities.Additionally, it may become more expensive for us to obtain new rights-of-way or authorizations or to renew existing rights-of-way orauthorizations. If the cost of renewing or obtaining new rights-of-way or authorizations increases materially, our cash flows could be materiallyadversely affected.We require access to significant amounts of additional capital to implement our growth strategy, as well as to meet potential futurecapital requirements under certain of our gathering and processing agreements. Limited access and/or availability of the debt and equitycapital markets could impair our ability to grow or cause us to be unable to meet future capital requirements.To expand our asset base, whether through acquisitions or organic growth, we will need to make expansion capital expenditures. We alsofrequently consider and enter into discussions with third parties regarding potential acquisitions. In addition, the terms of certain of our gatheringand processing agreements also require us to spend significant amounts of capital, over a short period of time, to construct and develop additionalmidstream assets to support our customers' development projects. Depending on our customers' future development plans, it is possible that thecapital we would be required to spend to construct and develop such assets could exceed our ability to finance those expenditures using our cashreserves or available capacity under our amended and restated revolving credit facility.We plan to use cash from operations, incur borrowings, and/or sell additional common units or other securities to fund our future expansion capitalexpenditures. Using cash from operations to fund expansion capital expenditures will directly reduce our cash available for distribution tounitholders. Our ability to obtain financing or to access the capital markets for future debt or equity offerings may be limited by our financialcondition at the time of any such financing or offering as well as covenants in our debt agreements, general economic conditions andcontingencies and uncertainties that are beyond our control. If we are unable to raise expansion capital, we may lose the opportunity to makeacquisitions or to gather, treat and process new production volumes from our customers with whom we have agreed to construct and developmidstream assets in the future. Even if we are successful in obtaining funds for expansion capital expenditures through equity or debt financings,the terms thereof could limit our ability to pay distributions to our common unitholders. In addition, incurring additional debt may significantlyincrease our interest expense and financial leverage, and issuing additional units representing limited partner interests may result in significantcommon unitholder dilution and increase the aggregate amount of cash required to maintain the then-current distribution rate, which couldmaterially decrease our ability to pay distributions at the then-current distribution rate.We do not have a contractual commitment from our Sponsor or Summit Investments to provide any direct or indirect financial assistance to us.Because our common units are yield-oriented securities, increases in interest rates could materially adversely impact our unit price, ourability to issue equity or incur debt for acquisitions or other purposes and our ability to make cash distributions to our unitholders.Interest rates are generally at or near historic lows and may increase in the future. As a result, interest rates on our future credit facilities and debtofferings could be higher than current levels, causing our financing costs to increase.25Table of ContentsAs with other yield-oriented securities, our unit price is impacted by the level of our cash distributions and implied distribution yield. The distributionyield is often used by investors to compare and rank yield-oriented securities for investment decision-making purposes. Therefore, changes ininterest rates, either positive or negative, may affect the yield requirements of investors who invest in our common units, and a rising interest rateenvironment could have a material adverse impact on our unit price, our ability to issue equity or incur debt for acquisitions or other purposes andour ability to make cash distributions at our intended levels.Debt we incur in the future may limit our flexibility to obtain financing and to pursue other business opportunities.At December 31, 2015, we had $944.0 million of total indebtedness and the unused portion of our $700.0 million amended and restated revolvingcredit facility totaled $356.0 million. Contingent upon and concurrent with the Initial Close of the 2016 Drop Down, the borrowing capacity of ouramended and restated revolving credit facility will increase to $1.25 billion and we will draw $360.0 million to fund the Initial Payment. Our futurelevel of debt could have significant consequences, including among other things:•limiting our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposesand/or obtaining such financing on favorable terms;•reducing our funds available for operations, future business opportunities and cash distributions to unitholders by that portion of our cashflow required to make interest payments on our debt;•increasing our vulnerability to competitive pressures or a downturn in our business or the economy generally; and•limiting our flexibility in responding to changing business and economic conditions.Our ability to service our debt will depend upon, among other things, our future financial and operating performance, which will be affected byprevailing economic conditions and financial, business, regulatory and other factors, some of which are beyond our control. If our operating resultsare not sufficient to service any future indebtedness, we will be forced to take actions such as reducing distributions, reducing or delaying ourbusiness activities, acquisitions, investments or capital expenditures, selling assets or seeking additional equity capital. We may not be able toeffect any of these actions on satisfactory terms or at all.Restrictions in our amended and restated revolving credit facility and senior notes indentures could materially adversely affect ourbusiness, financial condition, results of operations, ability to make cash distributions to unitholders and value of our common units.We are dependent upon the earnings and cash flow generated by our operations to meet our debt service obligations and to make cashdistributions to our unitholders. The operating and financial restrictions and covenants in our amended and restated revolving credit facility, oursenior notes indentures and any future financing agreements could restrict our ability to finance future operations or capital needs or to expand orpursue our business activities, which may, in turn, limit our ability to make cash distributions to our unitholders. For example, our amended andrestated revolving credit facility and indentures restrict our ability to, among other things:•incur or guarantee certain additional debt;•make certain cash distributions on or redeem or repurchase certain units;•make certain investments and acquisitions;•make certain capital expenditures;•incur certain liens or permit them to exist;•enter into certain types of transactions with affiliates;•merge or consolidate with another company or otherwise engage in a change of control transaction; and•transfer, sell or otherwise dispose of certain assets.Our amended and restated revolving credit facility and senior notes indentures also contain covenants requiring us to maintain certain financialratios and meet certain tests. Our ability to meet those financial ratios and tests can be affected by events beyond our control, and we cannotguarantee that we will meet those ratios and tests.The provisions of our amended and restated revolving credit facility and senior notes indentures may affect our ability to obtain future financingand pursue attractive business opportunities as well as affect our flexibility in planning for, and reacting to, changes in business conditions. Inaddition, a failure to comply with the provisions of26Table of Contentsour amended and restated revolving credit facility or senior notes indentures could result in a default or an event of default that could enable ourlenders or senior noteholders to declare the outstanding principal of that debt, together with accrued and unpaid interest, to be immediately due andpayable. If we were unable to repay the accelerated amounts, the lenders under our amended and restated revolving credit facility could proceedagainst the collateral granted to them to secure such debt. If the payment of our debt is accelerated, our assets may be insufficient to repay suchdebt in full, and our unitholders could experience a partial or total loss of their investment. The amended and restated revolving credit facility alsohas cross default provisions that apply to any other indebtedness we may have and the indentures have cross default provisions that apply tocertain other indebtedness.A portion of our revenues are directly exposed to changes in crude oil, natural gas and NGL prices, and our exposure may increase inthe future.We generate a substantial majority of our revenues pursuant to primarily long-term and fee-based gathering and processing agreements underwhich we are paid based on the volumes that we gather and/or process rather than the value of the underlying commodity or related byproduct.Consequently, our existing operations and cash flows have limited direct exposure to commodity price risk. Although we will seek to enter intosimilar fee-based contracts with new customers in the future, our efforts to obtain such contractual terms may not be successful or the localmarket for our services may not support fee-based gathering and processing agreements. For example, we have percent-of-proceeds contractswith certain natural gas producer customers and we may, in the future, enter into additional percent-of-proceeds contracts with these customers orother customers, which would increase our exposure to commodity price risk, as the revenues generated from those contracts directly correlatewith the fluctuating price of the underlying commodities.Substantially all of our remaining revenue is derived from (i) the sale of physical natural gas that we retain from our DFW Midstream customers tooffset our power expense associated with our electric-drive compression, (ii) the sale of condensate volumes that we retain at Grand River, and (iii)the sale of processed natural gas and NGLs pursuant to our percent-of-proceeds contracts with certain of our customers on the Bison Midstreamand Grand River systems. The revenues we earn from the sale of retained natural gas are tied to the price of natural gas. In addition, changes inthe price of crude oil could directly affect the revenues we receive from the sale of condensate and other NGLs.Furthermore, we may acquire or develop additional midstream assets in the future that have a greater exposure to fluctuations in commodity pricerisk than our current operations. Future exposure to the volatility of natural gas and crude oil prices could have a material adverse effect on ourbusiness, results of operations and financial condition.A change in laws and regulations applicable to our assets or services, or the interpretation or implementation of existing laws andregulations may cause our revenues to decline or our operation and maintenance expenses to increase.Various aspects of our operations are subject to regulation by the various federal, state and local departments and agencies that have jurisdictionover participants in the energy industry. The regulation of our activities and the natural gas and crude oil industries frequently change as they arereviewed by legislators and regulators. In 2014, the North Dakota Industrial Commission began to oversee the integrity and location of undergroundgathering pipelines that are not monitored by other state or federal agencies and is considering additional rule changes that could result inadditional construction and monitoring requirements for all pipelines, including, but not limited to, those that transport produced water. In 2015, theDOT, through PHMSA, proposed changes to its hazardous liquid pipeline regulations that would extend pipeline safety regulation to previouslyunregulated gathering systems and increase safety requirements for other pipelines as well. Penalties for violating federal safety standards haverecently increased. In addition, the adoption of proposals for more stringent legislation, regulation or taxation of drilling activity could directly curtailsuch activity or increase the cost of drilling, resulting in reduced levels of drilling activity and therefore reduced demand for our services.Regulatory agencies establish and, from time to time, change priorities, which may result in additional burdens on us, such as additional reportingrequirements and more frequent audits of operations. Our operations and the markets in which we participate are affected by these laws,regulations and interpretations and may be affected by changes to them or their implementation, which may cause us to realize materially lowerrevenues or incur materially increased operation and maintenance costs or both.Increased regulation of hydraulic fracturing could result in reductions or delays in customer production, which could materiallyadversely impact our revenues.Hydraulic fracturing is an important and increasingly common practice that is used to stimulate production of natural gas and/or crude oil fromdense subsurface rock formations, and is primarily regulated by state agencies. However, Congress has in the past and may in the future considerlegislation to regulate hydraulic fracturing by federal27Table of Contentsagencies. Many states have already adopted laws and/or regulations that require disclosure of the chemicals used in hydraulic fracturing, and areconsidering legal requirements that could impose more stringent permitting, disclosure and well construction requirements on crude oil and/ornatural gas drilling activities. The Environmental Protection Agency ("EPA") is also moving forward with various related regulatory actions,including approving, on April 17, 2012, new regulations requiring, among other matters, green completions of hydraulically-fractured wells. Therequirement to conduct green completions, and the corresponding notification and reporting requirements, went into effect in 2015. If new or morestringent federal, state or local legal restrictions relating to such drilling activities or to the hydraulic fracturing process are adopted, this couldresult in a reduction in the supply of natural gas and/or crude oil, which could adversely affect our results of operations and financial condition.We are subject to federal anti-market manipulation laws and regulations, potentially other federal regulatory requirements, and state andlocal regulation, and could be materially affected by changes in such laws and regulations, or in the way they are interpreted andenforced.We believe that our natural gas pipeline facilities qualify as gathering facilities that are exempt from the jurisdiction of the Federal EnergyRegulatory Commission ("FERC"), the Natural Gas Act ("NGA") and the Natural Gas Policy Act of 1978 (the "NGPA"). As of December 31, 2015,movements of crude oil on our crude oil pipelines were not subject to FERC jurisdiction under the Interstate Commerce Act (“ICA”); however, onFebruary 1, 2016, Polar Midstream's FERC tariff for interstate movements of crude oil on its Little Muddy pipeline in North Dakota will becomeeffective (the "Little Muddy Tariff"). The Little Muddy Tariff will be subject to FERC jurisdiction and oversight. We are also generally subject to theanti-market manipulation provisions in the NGA, as amended by the Energy Policy Act of 2005, and to FERC's regulations thereunder, whichauthorize FERC to impose fines of up to $1,000,000 per day per violation of the NGA or its implementing regulations. In addition, the Federal TradeCommission holds statutory authority under the Energy Independence and Security Act of 2007 to prevent market manipulation in oil markets, andhas adopted broad rules and regulations prohibiting fraud and market manipulation. The Federal Trade Commission is also authorized to seek finesof up to $1,000,000 per violation. The Commodity Futures Trading Commission (the "CFTC") is directed under the Commodity Exchange Act, toprevent price manipulation in the commodity, futures and swaps markets, including the energy markets. Pursuant to the Dodd-Frank Wall StreetReform and Consumer Protection Act of 2010 (the "Dodd-Frank Act"), and other authority, the CFTC has adopted additional anti-marketmanipulation regulations that prohibit fraud and price manipulation in the commodity, futures and swaps markets. The CFTC also has statutoryauthority to seek civil penalties of up to the greater of $1,000,000 per violation or triple the monetary gain to the violator for each violation of theanti-market manipulation provisions of the Commodity Exchange Act.The distinction between federally unregulated natural gas and crude oil pipelines and FERC-regulated natural gas and crude oil pipelines has beenthe subject of extensive litigation and is determined by FERC on a case-by-case basis. FERC has made no determinations as to the status of ourfacilities. Consequently, the classification and regulation of some of our pipelines could change based on future determinations by FERC,Congress or the courts. If our natural gas gathering operations or crude oil operations beyond the Little Muddy pipeline become subject to FERCjurisdiction under the NGA, the NGPA or the ICA, the result may materially adversely affect the rates we are able to charge and the services wecurrently provide, and may include the potential for a termination of our gathering agreements with our customers. In addition, if any of our facilitieswere found to have provided services or otherwise operated in violation of the NGA, the NGPA or the ICA, this could result in the imposition of civilpenalties, as well as a requirement to disgorge charges collected for such services in excess of the rate established by FERC.We are subject to state and local regulation regarding the construction and operation of our gathering, treating and processing systems, as well asstate ratable take statutes and regulations. Regulation of the construction and operation of our facilities may affect our ability to expand ourfacilities or build new facilities and such regulation may cause us to incur additional operating costs or limit the quantities of natural gas and crudeoil we may gather, treat and process. Ratable take statutes and regulations generally require gatherers to take natural gas and crude oil productionthat may be tendered for gathering without undue discrimination. These requirements restrict our right to decide whose production we gather, treatand process. Many states have adopted complaint-based regulation of gathering, treating and processing activities, which allows producers andshippers to file complaints with state regulators in an effort to resolve access issues, rate grievances, and other matters. Other state andmunicipal regulations do not directly apply to our business, but may nonetheless affect the availability of natural gas and crude oil for gathering,treating and processing, including state regulation of production rates, maximum daily production allowable from wells, and other activities relatedto drilling and operating wells. While our facilities currently are subject to limited state and local regulation, there is a risk that state or local lawswill be changed or reinterpreted, which may materially affect our operations, operating costs, and revenues.28Table of ContentsWe are subject to stringent environmental laws and regulations that may expose us to significant costs and liabilities.Our gathering, treating and processing operations are subject to stringent and complex federal, state and local environmental laws and regulations,including laws and regulations regarding the discharge of materials into the environment or otherwise relating to environmental protection, including,for example, the Clean Air Act, the Comprehensive Environmental Response, Compensation, and Liability Act; the Clean Water Act; the OilPollution Act; the Resource Conservation and Recovery Act; the Endangered Species Act; and the Toxic Substances Control Act.These laws and regulations may impose numerous obligations that are applicable to our operations, including the acquisition of permits to conductregulated activities, the incurrence of capital or operating expenditures to limit or prevent releases of materials from our pipelines and facilities, andthe imposition of substantial liabilities and remedial obligations for pollution resulting from our operations or at locations currently or previouslyowned or operated by us. For example in October 2015, the EPA lowered the existing national ambient air quality standard ("NAAQS") for ozone,which could subject us to increased regulatory burdens in the form of more stringent emissions controls, emission offset requirements andincreased permitting delays and costs. And in August 2015, the EPA proposed additional regulations to reduce emissions of methane and VOCsfrom the crude oil and natural gas sector. Numerous governmental authorities, such as the EPA and analogous state agencies, have the power toenforce compliance with these laws and regulations and the permits issued under them, oftentimes requiring difficult and costly corrective actionsor costly pollution control measures. Failure to comply with these laws, regulations and requisite permits may result in the assessment ofsignificant administrative, civil and criminal penalties, the imposition of remedial obligations and the issuance of injunctions limiting or preventingsome or all of our operations. In addition, we may experience a delay in obtaining or be unable to obtain required permits or regulatoryauthorizations, which may cause us to lose potential and current customers, interrupt our operations and limit our growth and revenue.There is a risk that we may incur significant environmental costs and liabilities in connection with our operations due to historical industryoperations and waste disposal practices, our handling of hydrocarbons and other wastes and potential emissions and discharges related to ouroperations. Joint and several, strict liability may be incurred, without regard to fault, under certain of these environmental laws and regulations inconnection with discharges or releases of hydrocarbon wastes on, under or from our properties and facilities, many of which have been used formidstream activities for a number of years, oftentimes by third parties not under our control. Private parties, including the owners of the propertiesthrough which our gathering systems pass, and on which certain of our facilities are located, may also have the right to pursue legal actions toenforce compliance as well as to seek damages for non-compliance with environmental laws and regulations or for personal injury or propertydamage. For example, an accidental release from one of our pipelines could subject us to substantial liabilities arising from environmental cleanupand restoration costs, claims made by neighboring landowners and other third parties for personal injury and property damage and fines orpenalties for related violations of environmental laws or regulations. In addition, changes in environmental laws occur frequently, and any suchchanges that result in additional permitting obligations or more stringent and costly waste handling, storage, transport, disposal or remediationrequirements could have a material adverse effect on our operations or financial position. We may not be able to recover all or any of these costsfrom insurance.We may incur greater than anticipated costs and liabilities as a result of pipeline safety requirements.The DOT, through PHMSA, has adopted and enforces safety standards and procedures applicable to our pipelines. In addition, many states,including the states in which we operate, have adopted regulations that are identical to or more restrictive than existing DOT regulations forintrastate pipelines. Among the regulations applicable to us, PHMSA requires pipeline operators to develop integrity management programs forcertain pipelines located in high consequence areas, which include high population areas such as the Dallas-Fort Worth greater metropolitan areawhere our DFW Midstream system is located. While the majority of our pipelines meet the DOT definition of gathering lines and are thus currentlyexempt from PHMSA's integrity management requirements, we also operate a limited number of pipelines that are subject to the integritymanagement requirements. The regulations require operators, including us, to:•perform ongoing assessments of pipeline integrity;•identify and characterize applicable threats to pipeline segments that could impact a high consequence area;•maintain processes for data collection, integration and analysis;29Table of Contents•repair and remediate pipelines as necessary;•adopt and maintain procedures, standards and training programs for control room operations; and•implement preventive and mitigating actions.In October 2015, PHMSA proposed changes to its pipeline safety regulations that would significantly extend the integrity managementrequirements to previously exempt pipelines and would impose additional obligations on pipeline operators that are already subject to the integritymanagement requirements. PHMSA’s proposed rule would also require annual reporting of safety-related conditions and incident reports for allgathering lines and gravity lines, including pipelines that are currently exempt from PHMSA regulations. PHMSA issued a separate regulatoryproposal in July 2015 that would impose pipeline incident prevention and response measures on pipeline operators. Acceptance of the PHMSAproposals could have a material adverse effect on our operations and costs of transportation services.PHMSA has also issued an Advisory Bulletin which, among other things, advises pipeline operators that if they are relying on design, construction,inspection, testing or other data to determine the pressures at which their pipelines should operate, the records of that data must be traceable,verifiable and complete. Locating such records and, in the absence of any such records, verifying maximum pressures through physical testing ormodifying or replacing facilities to meet the demands of such pressures, could significantly increase our costs. Additionally, failure to locate suchrecords or verify maximum pressures could result in reductions of allowable operating pressures, which would reduce available capacity of ourpipelines. While we believe that we are in compliance with existing safety laws and regulations, increased penalties for safety violations andpotential regulatory changes could have a material adverse effect on our operations, operating and maintenance expenses, and revenues.Climate change legislation, regulatory initiatives and litigation could result in increased operating costs and reduced demand for theservices we provide.In recent years, the U.S. Congress has considered legislation to restrict or regulate emissions of greenhouse gases (“GHGs”), such as carbondioxide and methane that may be contributing to global warming. It presently appears unlikely that comprehensive climate legislation will bepassed by either house of Congress in the near future, although energy legislation and other initiatives are expected to be proposed that may berelevant to GHG emissions issues. In addition, almost half of the states, either individually or through multi-state regional initiatives, have begun toaddress GHG emissions, primarily through the planned development of emission inventories or regional GHG cap and trade programs. Most ofthese cap and trade programs work by requiring either major sources of emissions, such as electric power plants, or major producers of fuels,such as refineries and gas processing plants, to acquire and surrender emission allowances. In general, the number of allowances available forpurchase is reduced each year until the overall GHG emission reduction goal is achieved. Depending on the scope of a particular program, wecould be required to purchase and surrender allowances for GHG emissions resulting from our operations (e.g., at compressor stations). Althoughmost of the state-level initiatives have to date been focused on large sources of GHG emissions, such as electric power plants, it is possible thatcertain components of our operations, such as our gas-fired compressors, could become subject to state-level GHG-related regulation.Independent of Congress, the EPA has begun to adopt regulations under its existing Clean Air Act authority. In 2009, the EPA published itsfindings that emissions of GHGs present an endangerment to public health and the environment because emissions of such gases are contributingto warming of the earth's atmosphere and other climatic changes. Based on these findings, the EPA adopted regulations that, among other things,establish Prevention of Significant Deterioration (“PSD”) construction and Title V operating permit reviews for certain large stationary sources ofGHG emissions. In addition, in September 2009, the EPA issued a final rule requiring the reporting of GHG emissions from specified large GHG-emitting sources in the United States beginning in 2011 for emissions in 2010. In November 2010, the EPA published a final rule expanding thereporting requirement to include onshore and offshore crude oil and natural gas systems beginning in 2012, which was again expanded in October2015 to include additional crude oil and natural gas systems like gathering and boosting activities and onshore natural gas transmission pipelines.These rules require that we report our GHG emissions for certain of our assets. Further, in December 2015, over 190 countries, including theUnited States, reached an agreement to reduce global GHG emissions. If and to the extent the United States implements this agreement, it couldhave a material adverse effect on our business and that of our customers.Although it is not possible at this time to accurately estimate how potential future laws or regulations addressing GHG emissions would impact ourbusiness, either directly or indirectly, any future federal or state laws or implementing regulations that may be adopted to address GHG emissionscould require us to incur increased30Table of Contentsoperating costs and could materially adversely affect demand for our services. The potential increase in the costs of our operations resulting fromany legislation or regulation to restrict emissions of GHG could include new or increased costs to operate and maintain our facilities, install newemission controls on our facilities, acquire allowances to authorize our GHG emissions, pay any taxes related to our GHG emissions andadminister and manage a GHG emissions program. While we may be able to include some or all of such increased costs in the rates we charge,such recovery of costs is uncertain. Moreover, incentives to conserve energy or use alternative energy sources could reduce demand for ourservices. We cannot predict with any certainty at this time how these possibilities may affect our operations.The implementation of statutory and regulatory requirements for swap transactions could have an adverse impact on our ability to hedgerisks associated with our business and increase the working capital requirements to conduct these activities.Congress adopted comprehensive financial reform legislation under the Dodd-Frank Act that establishes federal oversight and regulation of theover-the-counter ("OTC") derivatives market and entities, such as us, that participate in that market. This legislation requires the CFTC and theSEC and other regulatory authorities to promulgate certain rules and regulations, including rules and regulations relating to the regulation of certainswaps market participants, such as swap dealers, the clearing of certain swaps through central counterparties, the execution of certain swaps ondesignated contract markets or swap execution facilities, mandatory margin requirements for uncleared swaps, and the reporting andrecordkeeping of swaps. While most of the regulations have been promulgated and are already in effect, the rulemaking and implementationprocess is still ongoing. Moreover, CFTC continues to refine its initial rulemakings under the Dodd-Frank Act. As a result, we cannot yet predictthe ultimate effect of the rules and regulations on our business and while most of the regulations have been adopted, any new regulations ormodifications to existing regulations could increase the cost of derivative contracts, limit the availability of derivatives to protect against risks thatwe encounter, reduce our ability to monetize or restructure our existing derivative contracts and increase our exposure to less creditworthycounterparties.The CFTC has proposed federal position limits on certain core futures and equivalent swaps contracts in the major energy and other markets, withexceptions for certain bona fide hedging transactions provided that various conditions are satisfied. If finalized, the position limits rule and itscompanion rule on aggregation among entities under common ownership or control may have an impact on our ability to hedge our exposure tocertain enumerated commodities.In 2013, the CFTC implemented final rules regarding mandatory clearing of certain classes of interest rate swaps and certain classes of indexcredit default swaps. Mandatory trading on designated contract markets or swap execution facilities of certain interest rate swaps and index creditdefault swaps also began in 2014. At this time, the CFTC has not proposed any rules designating other classes of swaps, including physicalcommodity swaps, for mandatory clearing. The CFTC and prudential banking regulators also recently adopted mandatory margin requirements onuncleared swaps between swap dealers and certain other counterparties. Although we may qualify for a commercial end-user exception from themandatory clearing, trade execution and uncleared swaps margin requirements, mandatory clearing and trade execution requirements anduncleared swaps margin requirements applicable to other market participants, such as swap dealers, may affect the cost and availability of theswaps that we use for hedging.Under the Dodd-Frank Act, the CFTC is also directed generally to prevent price manipulation and fraud in the following two markets: (a) physicalcommodities traded in interstate commerce, including physical energy and other commodities, as well as (b) financial instruments, such asfutures, options and swaps. Pursuant to the Dodd-Frank Act, the CFTC has adopted additional anti-market manipulation, anti-fraud and disruptivetrading practices regulations that prohibit, among other things, fraud and price manipulation in the physical commodities, futures, options andswaps markets. Should we violate these laws and regulations, we could be subject to CFTC enforcement action and material penalties, andsanctions.We currently enter into forward contracts with third parties to buy power and sell natural gas in an attempt to hedge our exposure to fluctuations inthe price of natural gas with respect to those volumes. The CFTC has finalized an interpretation clarifying whether certain forwards with volumetricoptionality are regulated as forwards or qualify as options on commodities and therefore swaps. This interpretation may have an impact on ourability to enter into certain forwards or may impose additional requirements with respect to certain transactions.In addition to the Dodd-Frank Act, the European Union and other foreign regulators have adopted and are implementing local reforms generallycomparable with the reforms under the Dodd-Frank Act. Implementation and enforcement of these regulatory provisions may reduce our ability tohedge our market risks with non-U.S. counterparties and may make any transactions involving cross-border swaps more expensive andburdensome.31Table of ContentsAdditionally, the lack of regulatory equivalency across jurisdictions may increase compliance costs and make it more costly to satisfy regulatoryobligations.We do not own all of the land on which our pipelines and facilities are located, which could result in disruptions to our operations.We do not own all of the land on which our pipelines and facilities have been constructed, and we are, therefore, subject to the possibility of moreonerous terms and/or increased costs to retain necessary land use if we do not have valid rights-of-way or if such rights-of-way lapse or terminateor if our pipelines are not properly located within the boundaries of such rights-of-way. We obtain the rights to construct and operate our pipelineson land owned by third parties and governmental agencies for a specific period of time. If we were to be unsuccessful in renegotiating rights-of-way, we might have to relocate our facilities. Our loss of these rights, through our inability to renew right-of-way contracts or otherwise, could havea material adverse effect on our business, results of operations, financial condition and ability to make cash distributions to our unitholders.Terrorist attacks and threats, escalation of military activity in response to these attacks or acts of war could have a material adverse effecton our business, financial condition or results of operations.Terrorist attacks and threats, escalation of military activity or acts of war may have significant effects on general economic conditions,fluctuations in consumer confidence and spending and market liquidity, each of which could materially and adversely affect our business. Futureterrorist attacks, rumors or threats of war, actual conflicts involving the United States or its allies, or military or trade disruptions may significantlyaffect our operations and those of our customers. Strategic targets, such as energy-related assets, may be at greater risk of future attacks thanother targets in the United States. Disruption or significant increases in energy prices could result in government-imposed price controls. It ispossible that any of these occurrences, or a combination of them, could have a material adverse effect on our business, financial condition andresults of operations.Our operations depend on the use of information technology ("IT") systems that could be the target of a cyber-attack.Our operations depend on the use of sophisticated IT systems. Our IT systems and networks, as well as those of our customers, vendors andcounterparties, may become the target of cyber-attacks or information security breaches, which in turn could result in the unauthorized release andmisuse of confidential or proprietary information as well as disrupt our operations or damage our facilities or those of third parties, which couldhave a material adverse effect on our revenues and increase our operating and capital costs, which could reduce the amount of cash otherwiseavailable for distribution. We may be required to incur additional costs to modify or enhance our IT systems or to prevent or remediate any suchattacks.Our ability to operate our business effectively could be impaired if we fail to attract and retain key management personnel.Our ability to operate our business and implement our strategies depends on our continued ability to attract and retain highly skilled managementpersonnel with midstream energy industry experience and competition for these persons in the midstream energy industry is intense. Given oursize, we may be at a disadvantage, relative to our larger competitors, in the competition for these personnel. We may not be able to continue toemploy our senior executives and key personnel or attract and retain qualified personnel in the future, and our failure to retain or attract our seniorexecutives and key personnel could have a material adverse effect on our ability to effectively operate our business.A shortage of skilled labor in the midstream energy industry could reduce employee productivity and increase costs, which could have amaterial adverse effect on our business and results of operations.The operation of gathering, treating and processing systems requires skilled laborers in multiple disciplines such as equipment operators,mechanics and engineers, among others. We have from time to time encountered shortages for these types of skilled labor. If we experienceshortages of skilled labor in the future, our labor and overall productivity or costs could be materially adversely affected. If our labor pricesincrease or if we experience materially increased health and benefit costs with respect to our general partner's employees, our business andresults of operations and our ability to make cash distributions to our unitholders could be materially adversely affected.32Table of ContentsRisks Inherent in an Investment in UsSummit Investments indirectly owns and controls our general partner, which has sole responsibility for conducting our business andmanaging our operations and limited duties to us and our unitholders. Our general partner and its affiliates have conflicts of interestwith us and they may favor their own interests to the detriment of us and our unitholders.Summit Investments controls our general partner and has authority to appoint all of the officers and directors of our general partner, some of whomwill also be officers, directors or principals of Energy Capital Partners, the entity that controls Summit Investments. Although our general partnerhas a duty to manage us in a manner that is in our best interests, the directors and officers of our general partner also have a duty to manage ourgeneral partner in a manner that is in the best interests of its owner. Conflicts of interest will arise between Summit Investments and its ownersand our general partner, on the one hand, and us and our unitholders, on the other hand. In resolving these conflicts of interest, our general partnermay favor its own interests and the interests of Summit Investments and its owners over our interests and the interests of our unitholders. Theseconflicts include the following situations, among others:•Neither our partnership agreement nor any other agreement requires Summit Investments or its owners to pursue a business strategy thatfavors us, and the directors and officers of Summit Investments have a fiduciary duty to make these decisions in the best interests of theowners of Summit Investments, which may be contrary to our interests. Summit Investments may choose to shift the focus of theirinvestment and growth to areas not served by our assets.•Summit Investments is not limited in its ability to compete with us and may offer business opportunities or sell midstream assets to thirdparties without first offering us the right to bid for them.•Our general partner is allowed to take into account the interests of parties other than us, such as Summit Investments and its owners, inresolving conflicts of interest.•Our partnership agreement replaces the fiduciary duties that would otherwise be owed by our general partner to us and our unitholders withcontractual standards governing its duties to us and our unitholders. These contractual standards limit our general partner's liabilities andthe rights of our unitholders with respect to actions that, without the limitations, might constitute breaches of fiduciary duty.•Except in limited circumstances, our general partner has the power and authority to conduct our business without unitholder approval.•Our general partner determines the amount and timing of asset purchases and sales, borrowings, issuance of additional partnershipinterests and the creation, reduction or increase of reserves, each of which can affect the amount of cash that is distributed to ourunitholders.•Our general partner determines the amount and timing of any capital expenditures and whether a capital expenditure is classified as amaintenance capital expenditure, which reduces operating surplus, or an expansion capital expenditure, which does not reduce operatingsurplus. This determination can affect the amount of cash that is distributed to our unitholders and to our general partner and the ability ofthe subordinated units to convert to common units.•Our general partner determines which costs incurred by it are reimbursable by us.•Our general partner may cause us to borrow funds to permit the payment of cash distributions, even if the purpose or effect of theborrowing is to make incentive distribution payments.•Our partnership agreement permits us to classify up to $50.0 million as operating surplus, even if it is generated from asset sales, non-working capital borrowings or other sources that would otherwise constitute capital surplus. This cash may be used to fund distributions onour common units or to our general partner in respect of the general partner interest or the IDRs.•Our partnership agreement does not restrict our general partner from causing us to pay it or its affiliates for any services rendered to us orentering into additional contractual arrangements with any of these entities on our behalf.•Our general partner intends to limit its liability regarding our contractual and other obligations.•Our general partner may exercise its right to call and purchase all of the common units not owned by it and its affiliates if they own morethan 80% of the common units.33Table of Contents•Our general partner controls the enforcement of the obligations that it and its affiliates owe to us.•Our general partner decides whether to retain separate counsel, accountants or others to perform services for us.•Our general partner may elect to cause us to issue common units to it in connection with a resetting of the target distribution levels relatedto our general partner's IDRs without the approval of the conflicts committee of the board of directors of our general partner or ourunitholders. This election may result in lower distributions to our other unitholders in certain situations.Our general partner interest or the control of our general partner may be transferred to a third party without unitholder consent.If Energy Capital Partners, the private equity firm that controls Summit Investments, consummates a transaction involving a sale or otherdisposition of its interests in Summit Invesments, the transaction would result in a change of control of SMLP because Summit Investmentsindirectly owns and controls our general partner. In addition, our general partner may transfer its general partner interest to a third party in a mergeror in a sale of all or substantially all of its assets without the consent of the unitholders. Furthermore, our partnership agreement does not restrictthe ability of Summit Investments to transfer all or a portion of its ownership interest in our general partner to a third party. The owner of SummitInvestments, or new members of our general partner, as applicable, would then be in a position to replace the board of directors and officers of ourgeneral partner with their own designees and thereby exert significant control over the decisions made by the board of directors and officers. Thiseffectively permits a change of control without the vote or consent of the unitholders.Our general partner's IDRs may be transferred to a third party without unitholder consent.Our general partner may transfer the IDRs it owns to a third party at any time without the consent of our unitholders. If our general partner transfersthe IDRs to a third party but retains its general partner interest, our general partner may not have the same incentive to grow our business andincrease quarterly distributions to unitholders over time as it would if it had retained ownership of the IDRs. For example, a transfer of the IDRs byour general partner could reduce the likelihood of Summit Investments selling or contributing additional midstream assets to us, as SummitInvestments would have less of an economic incentive to grow our business, which in turn would impact our ability to grow our asset base.Our Sponsor is not limited in its ability to compete with us and is not obligated to offer us the opportunity to acquire additional assetsor businesses, which could limit our ability to grow and could materially adversely affect our results of operations and cash available fordistribution to our unitholders.Our Sponsor has significantly greater resources than us and has experience making investments in midstream energy businesses. Although itcontrols Summit Investments, our Sponsor may compete with us for investment opportunities and may own interests in entities that compete withus. Energy Capital Partners is not prohibited from owning assets or engaging in businesses that compete directly or indirectly with us. In addition,Energy Capital Partners and Summit Investments may acquire, construct or dispose of additional midstream or other assets and may bepresented with new business opportunities, without any obligation to offer us the opportunity to purchase or construct such assets or to engage insuch business opportunities.Pursuant to the terms of our partnership agreement, the doctrine of corporate opportunity, or any analogous doctrine, does not apply to our generalpartner, its officers and directors or any of its affiliates, including Summit Investments and our Sponsor and its respective executive officers,directors and principals. Any such person or entity that becomes aware of a potential transaction, agreement, arrangement or other matter thatmay be an opportunity for us will not have any duty to communicate or offer such opportunity to us. Any such person or entity will not be liable tous or to any limited partner for breach of any fiduciary duty or other duty by reason of the fact that such person or entity pursues or acquires suchopportunity for itself, directs such opportunity to another person or entity or does not communicate such opportunity or information to us. This maycreate actual and potential conflicts of interest between us and affiliates of our general partner and result in less than favorable treatment of us andour unitholders.The amount of cash we have available for distribution to holders of our common units depends primarily on our cash flow rather thanon our profitability, which may prevent us from making distributions, even during periods in which we record net income.The amount of cash we have available for distribution depends primarily upon our cash flow and not solely on profitability, which will be affected bynon-cash items. As a result, we may make cash distributions during periods34Table of Contentswhen we report net losses for GAAP purposes and may not make cash distributions during periods when we report net income for GAAPpurposes.The market price of our common units may fluctuate significantly and, due to limited daily trading volumes, an investor could lose all orpart of its investment in us.Of the 42,062,644 common units outstanding at December 31, 2015, Summit Investments beneficially owned 5,444,731 common units and24,409,850 subordinated units, which converted to common units on a one-for-one basis on February 16, 2016. In connection with the PurchaseProgram, a subsidiary of Energy Capital Partners had acquired 2,184,186 common units as of February 16, 2016. An investor may not be able toresell its common units at or above its acquisition price. Additionally, limited liquidity may result in wide bid-ask spreads, contribute to significantfluctuations in the market price of the common units and limit the number of investors who are able to buy the common units.The market price of our common units may decline and be influenced by many factors, some of which are beyond our control, including amongothers:•our quarterly distributions;•our quarterly or annual earnings or those of other companies in our industry;•the loss of a large customer;•announcements by our customers or others regarding our customers or changes in our customers’ credit ratings, liquidity position,leverage profile and/or other financial or credit-related metrics;•announcements by our competitors of significant contracts or acquisitions;•changes in accounting standards, policies, guidance, interpretations or principles;•general economic and geopolitical conditions;•the failure of securities analysts to cover our common units or changes in financial estimates by analysts;•future sales of our common units, including those held by Summit Investments and its subsidiaries; and•other factors described in these Risk Factors.If we fail to develop or maintain an effective system of internal controls, we may not be able to report our financial results timely andaccurately or prevent fraud, which would likely have a negative impact on the market price of our common units.As a publicly traded partnership, we are subject to the public reporting requirements of the Securities Exchange Act of 1934, as amended,including the rules thereunder that will require our management to certify financial and other information in our quarterly and annual reports andprovide an annual management report on the effectiveness of our internal control over financial reporting. Effective internal controls are necessaryfor us to provide reliable and timely financial reports, prevent fraud and to operate successfully as a publicly traded partnership. We prepare ourconsolidated financial statements in accordance with GAAP. Our efforts to develop and maintain our internal controls may not be successful andwe may be unable to maintain effective controls over our financial processes and reporting in the future or to comply with our obligations underSection 404 of the Sarbanes-Oxley Act of 2002.Given the difficulties inherent in the design and operation of internal controls over financial reporting, in addition to our limited accounting personneland management resources, we can provide no assurance as to our or our independent registered public accounting firm's future conclusionsabout the effectiveness of our internal controls, and we may incur significant costs in our efforts to comply with Section 404 of the Sarbanes-OxleyAct of 2002. Any failure to implement and maintain effective internal controls over financial reporting could subject us to regulatory scrutiny and aloss of confidence in our reported financial information, which could have an adverse effect on our business and would likely have a negativeeffect on the trading price of our common units.Our partnership agreement replaces our general partner's fiduciary duties to unitholders with contractual standards governing its duties.Our partnership agreement contains provisions that eliminate fiduciary duties to which our general partner would otherwise be held by statefiduciary duty law and replaces those duties with several different contractual standards. For example, our partnership agreement permits ourgeneral partner to make a number of decisions in its individual capacity, as opposed to in its capacity as our general partner or otherwise, free ofany duties to us and our unitholders, other than the implied contractual covenant of good faith and fair dealing. This entitles our general35Table of Contentspartner to consider only the interests and factors that it desires and relieves it of any duty or obligation to give any consideration to any interest of,or factors affecting, us, our affiliates or our limited partners. Examples of decisions that our general partner may make in its individual capacityinclude, among others:•how to allocate corporate opportunities among us and its affiliates;•whether to exercise its limited call right;•whether to seek approval of the resolution of a conflict of interest by the conflicts committee of the board of directors of our generalpartner;•how to exercise its voting rights with respect to the units it owns;•whether to exercise its registration rights;•whether to elect to reset target distribution levels;•whether to transfer the IDRs or any units it owns to a third party; and•whether or not to consent to any merger or consolidation of the partnership or amendment to the partnership agreement.By purchasing a common unit, a common unitholder agrees to become bound by the provisions in the partnership agreement, including theprovisions discussed above.Our partnership agreement limits the liabilities of our general partner and the rights of our unitholders with respect to actions taken byour general partner that might otherwise constitute breaches of fiduciary duty.Our partnership agreement contains provisions that limit the liability of our general partner and the rights of our unitholders with respect to actionstaken by our general partner that might otherwise constitute breaches of fiduciary duty under state fiduciary duty law. For example, our partnershipagreement provides that:•whenever our general partner makes a determination or takes, or declines to take, any other action in its capacity as our general partner,our general partner is required to make such determination, or take or decline to take such other action, in good faith, meaning that itsubjectively believed that the decision was in our best interests, and will not be subject to any other or different standard imposed by ourpartnership agreement, Delaware law, or any other law, rule or regulation, or at equity;•our general partner will not have any liability to us or our unitholders for decisions made in its capacity as a general partner so long assuch decisions are made in good faith;•our general partner and its officers and directors will not be liable for monetary damages to us, our limited partners or their assigneesresulting from any act or omission unless there has been a final and non-appealable judgment entered by a court of competent jurisdictiondetermining that our general partner or its officers and directors, as the case may be, acted in bad faith or engaged in fraud or willfulmisconduct or, in the case of a criminal matter, acted with knowledge that the conduct was criminal; and•our general partner will not be in breach of its obligations under the partnership agreement or its duties to us or our unitholders if atransaction with an affiliate or the resolution of a conflict of interest is:i.approved by the conflicts committee of the board of directors of our general partner, although our general partner is not obligatedto seek such approval;ii.approved by the vote of a majority of the outstanding common units, excluding any common units owned by our general partnerand its affiliates;iii.on terms no less favorable to us than those generally being provided to or available from unrelated third parties; oriv.fair and reasonable to us, taking into account the totality of the relationships among the parties involved, including othertransactions that may be particularly favorable or advantageous to us.In connection with a situation involving a transaction with an affiliate or a conflict of interest, any determination by our general partner or theconflicts committee must be made in good faith. If an affiliate transaction or the resolution of a conflict of interest is not approved by our commonunitholders or the conflicts committee and the board of directors of our general partner determines that the resolution or course of action taken withrespect to the affiliate transaction or conflict of interest satisfies either of the standards set forth in the final two subclauses above, then it will bepresumed that, in making its decision, the board of directors acted in good faith, and in any proceeding36Table of Contentsbrought by or on behalf of any limited partner or the partnership, the person bringing or prosecuting such proceeding will have the burden ofovercoming such presumption.Our general partner intends to limit its liability regarding our obligations.Our general partner intends to limit its liability under contractual arrangements so that the counterparties to such arrangements have recourse onlyagainst our assets, and not against our general partner or its assets. Our general partner may therefore cause us to incur indebtedness or otherobligations that are nonrecourse to our general partner. Our partnership agreement provides that any action taken by our general partner to limit itsliability is not a breach of our general partner's fiduciary duties, even if we could have obtained more favorable terms without the limitation onliability. In addition, we are obligated to reimburse or indemnify our general partner to the extent that it incurs obligations on our behalf. Any suchreimbursement or indemnification payments would reduce the amount of cash otherwise available for distribution to our unitholders.Our partnership agreement requires that we distribute all of our available cash, which could limit our ability to grow and makeacquisitions.We expect that we will distribute all of our available cash to our unitholders and will rely primarily upon external financing sources, includingcommercial bank borrowings and the issuance of debt and equity securities, to fund our acquisitions and expansion capital expenditures. As aresult, to the extent we are unable to finance growth externally, our cash distribution policy will significantly impair our ability to grow.In addition, because we intend to distribute all of our available cash, we may not grow as quickly as businesses that reinvest their available cashto expand ongoing operations. To the extent we issue additional units in connection with any acquisitions or expansion capital expenditures, thepayment of distributions on those additional units may increase the risk that we will be unable to maintain or increase our per-unit distribution level.There are no limitations in our partnership agreement, our amended and restated revolving credit facility or senior notes indentures on our ability toissue additional units, including units ranking senior to the common units. The incurrence of additional commercial borrowings or other debt tofinance our growth strategy would result in increased interest expense, which, in turn, may impact the available cash that we have to distribute toour unitholders.While our partnership agreement requires us to distribute all of our available cash, our partnership agreement, including provisionsrequiring us to make cash distributions contained therein, may be amended.While our partnership agreement requires us to distribute all of our available cash, our partnership agreement, including provisions requiring us tomake cash distributions contained therein, may be amended. Our partnership agreement can be amended with the consent of our general partnerand the approval of a majority of the outstanding common units (including common units held by affiliates of our general partner.) As of December31, 2015, Summit Investments beneficially owned 5,444,731 common units out of 42,062,644 outstanding common units and all of our 24,409,850subordinated units which converted to common units on a one-for-one basis on February 16, 2016. Additionally, in connection with the PurchaseProgram, a subsidiary of Energy Capital Partners had acquired 2,184,186 common units as of February 16, 2016.Reimbursements due to our general partner and its affiliates for expenses incurred on our behalf will reduce cash available fordistribution to our common unitholders. The amount and timing of such reimbursements will be determined by our general partner.Prior to making any distribution on our common units, we will reimburse our general partner and its affiliates, including Summit Investments, forexpenses they incur and payments they make on our behalf. Under our partnership agreement, we will reimburse our general partner and itsaffiliates for certain expenses incurred on our behalf, including, without limitation, salary, bonus, incentive compensation and other amounts paid toour general partner's employees and executive officers who provide services necessary to run our business. Our partnership agreement providesthat our general partner will determine in good faith the expenses that are allocable to us. The reimbursement of expenses to our general partnerand its affiliates will reduce the amount of available cash to pay cash distributions to our unitholders.37Table of ContentsOur general partner may elect to cause us to issue common units to it in connection with a resetting of the MQD and the targetdistribution levels related to our general partner's IDRs without the approval of the conflicts committee of our general partner's board orour unitholders. This election may result in lower distributions to our unitholders in certain situations.Our general partner has the right, at any time when it has received incentive distributions at the highest level to which it is entitled (48.0%) for eachof the prior four consecutive fiscal quarters (and the amount of each such distribution did not exceed adjusted operating surplus for such quarter),to reset the initial target distribution levels at higher levels based on our cash distribution at the time of the exercise of the reset election. Followinga reset election by our general partner, the MQD will be reset to an amount equal to the average cash distribution per unit for the two fiscalquarters immediately preceding the reset election (such amount is referred to as the reset MQD), and the target distribution levels will be reset tocorrespondingly higher levels based on percentage increases above the reset MQD.In the event of a reset of target distribution levels, our general partner will be entitled to receive the number of common units equal to that numberof common units that would have entitled it to an average aggregate quarterly cash distribution in the prior two quarters equal to the average of thedistributions on the IDRs in the prior two quarters. Our general partner will also be issued the number of general partner units necessary to maintainits general partner interest in us that existed immediately prior to the reset election. We anticipate that our general partner would exercise this resetright to facilitate acquisitions or internal growth projects that would not be sufficiently accretive to cash distributions per common unit without suchconversion; however, it is possible that our general partner could exercise this reset election at a time when we are experiencing declines in ouraggregate cash distributions or at a time when our general partner expects that we will experience declines in our aggregate cash distributions inthe foreseeable future. In such situations, our general partner may be experiencing, or may expect to experience, declines in the cash distributionsit receives related to its IDRs and may therefore desire to be issued common units, which are entitled to specified priorities with respect to ourdistributions and which therefore may be more advantageous for the general partner to own in lieu of the right to receive incentive distributionpayments based on target distribution levels that are less certain to be achieved in the then-current business environment. As a result, a resetelection may cause our common unitholders to experience dilution in the amount of cash distributions that they would have otherwise received hadwe not issued common units to our general partner in connection with resetting the target distribution levels related to our general partner's IDRs.The New York Stock Exchange does not require a publicly traded partnership like us to comply with certain of its corporate governancerequirements.We have listed our common units on the New York Stock Exchange. Because we are a publicly traded partnership, the New York Stock Exchangedoes not require us to have, and we do not intend to have, a majority of independent directors on our general partner's board of directors or toestablish a nominating and corporate governance committee. Additionally, any future issuance of additional common units or other securities,including to affiliates, will not be subject to the New York Stock Exchange's shareholder approval rules. Accordingly, unitholders will not have thesame protections afforded to certain corporations that are subject to all of the New York Stock Exchange corporate governance requirements.Holders of our common units have limited voting rights and are not entitled to elect our general partner or its directors.Unlike the holders of common stock in a corporation, holders of our common units have only limited voting rights on matters affecting our businessand, therefore, limited ability to influence management's decisions regarding our business. Unitholders have no right on an annual or ongoing basisto elect our general partner or its board of directors. The board of directors of our general partner has been chosen by Summit Investments.Furthermore, if our unitholders are dissatisfied with the performance of our general partner, they have little ability to remove our general partner. Asa result of these limitations, the price at which the common units trade could be diminished because of the absence or reduction of a takeoverpremium in the trading price. Our partnership agreement also contains provisions limiting the ability of our unitholders to call meetings or to acquireinformation about our operations, as well as other provisions limiting the unitholders' ability to influence the manner or direction of management.Even if holders of our common units are dissatisfied, they may not be able to remove our general partner without its consent.The vote of the holders of at least 66 2/3% of all outstanding limited partner units voting together as a single class is required to remove ourgeneral partner. As of December 31, 2015, Summit Investments beneficially owned38Table of Contents5,444,731 common units out of 42,062,644 outstanding common units and all of our 24,409,850 subordinated units which converted to commonunits on a one-for-one basis on February 16, 2016, representing a voting block sufficient to prevent the other limited partners from removing ourgeneral partner. Additionally, in connection with the Purchase Program, a subsidiary of Energy Capital Partners had acquired 2,184,186 commonunits as of February 16, 2016.Our partnership agreement restricts the voting rights of unitholders owning 20% or more of our common units.Unitholders' voting rights are further restricted by a provision of our partnership agreement providing that any person or group that owns 20% ormore of any class of units then outstanding cannot vote on any matter, other than our general partner, its affiliates, their transferees and personswho acquired such units with the prior approval of the board of directors of our general partner.Our general partner interest or the control of our general partner may be transferred to a third party without unitholder consent.Our general partner may transfer its general partner interest to a third party in a merger or in a sale of all or substantially all of its assets withoutthe consent of the unitholders. Furthermore, our partnership agreement does not restrict the ability of Summit Investments to transfer all or aportion of its ownership interest in our general partner to a third party. The new owner of our general partner would then be in a position to replacethe board of directors and officers of our general partner with its own designees and thereby exert significant control over the decisions made bythe board of directors and officers. This effectively permits a change of control without the vote or consent of the unitholders.We may issue additional units without unitholder approval, which would dilute existing ownership interests.Our partnership agreement does not limit the number of additional limited partner interests, including limited partner interests that rank senior to thecommon units that we may issue at any time without the approval of our unitholders. The issuance by us of additional common units or otherequity securities of equal or senior rank will have the following effects:•our existing unitholders' proportionate ownership interest in us will decrease;•the amount of cash available for distribution on each unit may decrease;•because the amount payable to holders of IDRs is based on a percentage of the total cash available for distribution, the distributions toholders of IDRs will increase even if the per-unit distribution on common units remains the same;•the ratio of taxable income to distributions may increase;•the relative voting strength of each previously outstanding unit may be diminished; and•the market price of the common units may decline.Summit Investments or our Sponsor may sell units in the public or private markets, and such sales could have an adverse impact on thetrading price of the common units.As of December 31, 2015, Summit Investments beneficially owned 5,444,731 common units out of 42,062,644 outstanding common units and allof our 24,409,850 subordinated units, which converted to common units on a one-for-one basis on February 16, 2016. We have agreed to provideSummit Investments with certain registration rights pursuant to the terms of our partnership agreement. Additionally, in connection with thePurchase Program, a subsidiary of Energy Capital Partners had acquired 2,184,186 common units as of February 16, 2016. The sale of any ofthese units in the public or private markets could have an adverse impact on the price of the common units or on any trading market that maydevelop.39Table of ContentsOur general partner has a limited call right that may require an investor to sell its units at an undesirable time or price.If at any time our general partner and its affiliates own more than 80% of our outstanding common units, our general partner will have the right,which it may assign to any of its affiliates or to us, but not the obligation, to acquire all, but not less than all, of the common units held byunaffiliated persons at a price that is not less than their then-current market price, as calculated pursuant to the terms of our partnershipagreement. As a result, an investor may be required to sell its common units at an undesirable time or price and may not receive any return on itsinvestment. An investor may also incur a tax liability upon a sale of its units. As of December 31, 2015, Summit Investments beneficially owned5,444,731 common units out of 42,062,644 outstanding common units and all of our 24,409,850 subordinated units, which converted to commonunits on a one-for-one basis on February 16, 2016. Additionally, in connection with the Purchase Program, a subsidiary of Energy Capital Partnershad acquired 2,184,186 common units as of February 16, 2016. As such, our general partner and its affiliates controlled a total of 32,038,767common units, or 48.2% of our common units outstanding as of February 16, 2016.An investor's liability may not be limited if a court finds that unitholder action constitutes control of our business.A general partner of a partnership generally has unlimited liability for the obligations of the partnership, except for those contractual obligations ofthe partnership that are expressly made without recourse to the general partner. Our partnership is organized under Delaware law, and we conductbusiness in a number of other states. The limitations on the liability of holders of limited partner interests for the obligations of a limited partnershiphave not been clearly established in some of the other states in which we do business. An investor could be liable for any and all of our obligationsas if it was a general partner if a court or government agency were to determine that:•we were conducting business in a state but had not complied with that particular state's partnership statute; or•an investor's right to act with other unitholders to remove or replace our general partner, to approve some amendments to our partnershipagreement or to take other actions under our partnership agreement constitute control of our business.Unitholders may have liability to repay distributions that were wrongfully distributed to them.Under certain circumstances, unitholders may have to repay amounts wrongfully returned or distributed to them. Under Delaware law, we may notmake a distribution if the distribution would cause our liabilities to exceed the fair value of our assets. Delaware law provides that for a period ofthree years from the date of an impermissible distribution, limited partners who received the distribution and who knew at the time of thedistribution that it violated Delaware law will be liable to the limited partnership for the distribution amount. Substituted limited partners are liableboth for the obligations of the assignor to make contributions to the partnership that were known to the substituted limited partner at the time itbecame a limited partner and for those obligations that were unknown if the liabilities could have been determined from the partnership agreement.Neither liabilities to partners on account of their partnership interest nor liabilities that are non-recourse to the partnership are counted for purposesof determining whether a distribution is permitted.If an investor is not an eligible holder, it may not receive distributions or allocations of income or loss on those common units andthose common units will be subject to redemption.We have adopted certain requirements regarding those investors who may own our common units. Eligible holders are U.S. individuals or entitiessubject to U.S. federal income taxation on the income generated by us or entities not subject to U.S. federal income taxation on the incomegenerated by us, so long as all of the entity's owners are U.S. individuals or entities subject to such taxation. If an investor is not an eligibleholder, our general partner may elect not to make distributions or allocate income or loss on that investor's units, and it runs the risk of having itsunits redeemed by us at the lower of purchase price cost or the then-current market price. The redemption price may be paid in cash or by deliveryof a promissory note, as determined by our general partner.40Table of ContentsTax RisksOur tax treatment depends on our status as a partnership for federal income tax purposes. If the Internal Revenue Service (the "IRS")were to treat us as a corporation for federal income tax purposes, which would subject us to entity-level taxation, then our cash availablefor distribution to our unitholders would be substantially reduced.The anticipated after-tax economic benefit of an investment in our common units depends largely on our being treated as a partnership for federalincome tax purposes.Despite the fact that we are a limited partnership under Delaware law, it is possible in certain circumstances for a partnership such as ours to betreated as a corporation for federal income tax purposes. A change in current law could cause us to be treated as a corporation for federal incometax purposes or otherwise subject us to taxation as an entity.If we were treated as a corporation for federal income tax purposes, we would pay federal income tax on our taxable income at the corporate taxrate, which is currently a maximum of 35%, and would likely pay state and local income tax at varying rates. Distributions would generally betaxed again as corporate dividends (to the extent of our current and accumulated earnings and profits), and no income, gains, losses, deductions,or credits would flow through to unitholders. Because a tax would be imposed upon us as a corporation, our cash available for distribution would besubstantially reduced. Therefore, if we were treated as a corporation for federal income tax purposes, there would be material reduction in theanticipated cash flow and after-tax return to our unitholders, likely causing a substantial reduction in the value of our common units.Our partnership agreement provides that, if a law is enacted or existing law is modified or interpreted in a manner that subjects us to taxation as acorporation or otherwise subjects us to entity-level taxation for federal, state or local income tax purposes, the minimum quarterly distributionamount and the target distribution amounts may be adjusted to reflect the impact of that law on us.If we were subjected to a material amount of additional entity-level taxation by individual states, it would reduce our cash available fordistribution to our unitholders.Changes in current state law may subject us to additional entity-level taxation by individual states. Because of state budget deficits and otherreasons, several states are evaluating ways to subject partnerships to entity-level taxation through the imposition of state income, franchise andother forms of taxation. Imposition of any such taxes may substantially reduce the cash available for distribution. Our partnership agreementprovides that, if a law is enacted or existing law is modified or interpreted in a manner that subjects us to entity-level taxation, the minimumquarterly distribution amount and the target distribution amounts may be adjusted to reflect the impact of that law on us.The tax treatment of publicly traded partnerships or an investment in our common units could be subject to potential legislative, judicialor administrative changes and differing interpretations, possibly on a retroactive basis.The present U.S. federal income tax treatment of publicly traded partnerships, including us, or an investment in our common units may bemodified by administrative, legislative or judicial changes or differing interpretations at any time. For example, the Obama administration’s budgetproposal for fiscal year 2016 recommends that certain publicly traded partnerships earning income from activities related to fossil fuels be taxed ascorporations beginning in 2021. From time to time, members of Congress propose and consider such substantive changes to the existing federalincome tax laws that affect publicly traded partnerships. If successful, the Obama administration’s proposal or other similar proposals couldeliminate the qualifying income exception to the treatment of all publicly traded partnerships as corporations, upon which we rely for our treatmentas a partnership for U.S. federal income tax purposes.In addition, the U.S. Treasury Department and the IRS have issued proposed regulations concerning which activities give rise to qualifying incomewithin the meaning of Section 7704 of the Internal Revenue Code ("IRC"). We do not believe the proposed regulations affect our ability to qualify asa publicly traded partnership. However, finalized regulations could modify the amount of our gross income that we are able to treat as qualifyingincome for the purposes of the qualifying income requirement.Any modification to the U.S. federal income tax laws may be applied retroactively and could make it more difficult or impossible for us to meet theexception for certain publicly traded partnerships to be treated as partnerships for U.S. federal income tax purposes. We are unable to predictwhether any of these changes or other proposals will ultimately be enacted. Any such changes could negatively impact the value of an investmentin our common units.41Table of ContentsOur unitholders' share of our income will be taxable to them for federal income tax purposes even if they do not receive any cashdistributions from us.Because a unitholder will be treated as a partner to whom we will allocate taxable income that could be different in amount than the cash wedistribute, a unitholder's allocable share of our taxable income will be taxable to it, which may require the payment of federal income taxes and, insome cases, state and local income taxes, on its share of our taxable income even if the unitholder receives no cash distributions from us. Ourunitholders may not receive cash distributions from us equal to their share of our taxable income or even equal to the actual tax liability thatresults from that income.If the IRS contests the federal income tax positions we take, the market for our common units may be adversely impacted and the cost ofany IRS contest will reduce our cash available for distribution to our unitholders.The IRS may adopt positions that differ from the positions we take, and the IRS's positions may ultimately be sustained. It may be necessary toresort to administrative or court proceedings to sustain some or all of the positions we take and such positions may not ultimately be sustained.Any contest with the IRS, and the outcome of any IRS contest, may have an adverse impact on the market for our common units and the price atwhich they trade. In addition, our costs of any contest with the IRS will be borne indirectly by our unitholders and our general partner because thecosts will reduce our cash available for distribution.Tax gain or loss on the disposition of our common units could be more or less than expected.If a unitholder sells its common units, a gain or loss will be recognized for federal income tax purposes equal to the difference between the amountrealized and the unitholder's tax basis in those common units. Because distributions in excess of a unitholder's allocable share of its net taxableincome decrease its tax basis in its common units, the amount, if any, of such prior excess distributions with respect to the common units it sellswill, in effect, become taxable income to the unitholder if it sells such common units at a price greater than its tax basis in those common units,even if the price it receives is less than its original cost. Furthermore, a substantial portion of the amount realized on any sale of a unitholder'scommon units, whether or not representing gain, may be taxed as ordinary income due to potential recapture items, including depreciationrecapture. In addition, because the amount realized includes a unitholder's share of our nonrecourse liabilities, if a unitholder sells its commonunits, it may incur a tax liability in excess of the amount of cash it receives from the sale.Tax-exempt entities and non-U.S. persons face unique tax issues from owning our common units that may result in adverse taxconsequences to them.Investment in common units by tax-exempt entities, such as employee benefit plans and individual retirement accounts ("IRAs"), and non-U.S.persons raises issues unique to them. For example, virtually all of our income allocated to organizations that are exempt from federal income tax,including IRAs and other retirement plans, will be unrelated business taxable income and will be taxable to them. Distributions to non-U.S. personswill be reduced by withholding taxes at the highest applicable effective tax rate, and non-U.S. persons will be required to file federal income taxreturns and pay tax on their share of our taxable income. Tax-exempt entities and non-U.S. persons should consult a tax advisor before investingin our common units.We will treat each purchaser of common units as having the same tax benefits without regard to the actual common units purchased.The IRS may challenge this treatment, which could adversely affect the value of the common units.Because we cannot match transferors and transferees of common units and because of other reasons, we will adopt depreciation and amortizationpositions that may not conform to all aspects of existing Treasury Regulations. A successful IRS challenge to those positions could adverselyaffect the amount of tax benefits available to our unitholders. It also could affect the timing of these tax benefits or the amount of gain from ourunitholders' sale of common units and could have a negative impact on the value of our common units or result in audit adjustments to ourunitholders' tax returns.We prorate our items of income, gain, loss and deduction between transferors and transferees of our units each month based upon theownership of our units on the first business day of each month, instead of on the basis of the date a particular unit is transferred. TheIRS may challenge aspects of our proration method, and, if its challenge is successful, we would be required to change the allocation ofitems of income, gain, loss and deduction among our unitholders.We prorate our items of income, gain, loss and deduction between transferors and transferees of our units each month based upon the ownershipof our units on the first business day of each month, instead of on the basis of the42Table of Contentsdate a particular unit is transferred. The U.S. Treasury Department and the IRS recently issued Treasury Regulations that permit publicly tradedpartnerships to use a monthly simplifying convention that is similar to our, but they do not specifically authorize all aspects of the proration methodwe have adopted. If the IRS were to successfully challenge this method, we could be required to change the allocation of items of income, gain,loss and deduction among our unitholders.A unitholder whose common units are loaned to a short seller to effect a short sale of common units may be considered as havingdisposed of those common units. If so, he would no longer be treated for federal income tax purposes as a partner with respect to thosecommon units during the period of the loan and may recognize gain or loss from the disposition.Because a unitholder whose common units are loaned to a short seller to effect a short sale of common units may be considered as havingdisposed of the loaned common units, he may no longer be treated for federal income tax purposes as a partner with respect to those commonunits during the period of the loan to the short seller and the unitholder may recognize gain or loss from such disposition. Moreover, during theperiod of the loan to the short seller, any of our income, gain, loss or deduction with respect to those common units may not be reportable by theunitholder and any cash distributions received by the unitholder as to those common units could be fully taxable as ordinary income. Unitholdersdesiring to assure their status as partners and avoid the risk of gain recognition from a loan to a short seller are advised to consult a tax advisor todiscuss whether it is advisable to modify any applicable brokerage account agreements to prohibit their brokers from loaning their common units.We have adopted certain valuation methodologies in determining a unitholder's allocations of income, gain, loss and deduction. TheIRS may challenge these methodologies or the resulting allocations, and such a challenge could adversely affect the value of ourcommon units.In determining the items of income, gain, loss and deduction allocable to our unitholders, in certain circumstances, including when we issueadditional units, we must determine the fair market value of our assets. Although we may from time to time consult with professional appraisersregarding valuation matters, we make many fair market value estimates using a methodology based on the market value of our common units as ameans to measure the fair market value of our assets. The IRS may challenge these valuation methods and the resulting allocations of income,gain, loss and deduction.A successful IRS challenge to these methods or allocations could adversely affect the amount, character and timing of taxable income or lossbeing allocated to our unitholders. It also could affect the amount of gain from our unitholders' sale of common units and could have a negativeimpact on the value of the common units or result in audit adjustments to our unitholders' tax returns without the benefit of additional deductions.The sale or exchange of 50% or more of our capital and profits interests during any twelve-month period will result in the termination ofour partnership for federal income tax purposes.We will be considered to have technically terminated our partnership for federal income tax purposes if there is a sale or exchange of 50% or moreof the total interests in our capital and profits within a twelve-month period. For purposes of determining whether the 50% threshold has been met,multiple sales of the same interest will be counted only once. Our technical termination would, among other things, result in the closing of ourtaxable year for all unitholders, which would result in us filing two tax returns (and our unitholders could receive two Schedules K-1 if relief was notavailable, as described below) for one fiscal year and would result in a deferral of depreciation deductions allowable in computing our taxableincome. In the case of a unitholder reporting on a taxable year other than a fiscal year ending December 31, the closing of our taxable year mayalso result in more than twelve months of our taxable income or loss being includable in the unitholder's taxable income for the year of termination.Our termination currently would not affect our classification as a partnership for federal income tax purposes, but instead we would be treated as anew partnership for tax purposes. If treated as a new partnership, we must make new tax elections and could be subject to penalties if we areunable to determine that a termination occurred. The IRS has announced a publicly traded partnership technical termination relief programwhereby, if a publicly traded partnership that technically terminated requests publicly traded partnership technical termination relief and such reliefis granted by the IRS, among other things, the partnership will only have to provide one Schedule K-1 to unitholders for the year notwithstandingtwo partnership tax years.If the IRS makes audit adjustments to our income tax returns for tax years beginning after December 31, 2017, it may assess and collectany taxes (including any applicable penalties and interest) resulting from such audit adjustment directly from us, in which case our cashavailable for distribution to our unitholders could be substantially reduced.43Table of ContentsPursuant to the Bipartisan Budget Act of 2015, for tax years beginning after December 31, 2017, if the IRS makes audit adjustments to our incometax returns, it may assess and collect any taxes (including any applicable penalties and interest) resulting from such audit adjustment directly fromus. Generally, we expect to elect to have our general partner and our unitholders take such audit adjustment into account in accordance with theirinterests in us during the tax year under audit, but there can be no assurance that such election will be effective in all circumstances. If we areunable to have our general partner and our unitholders take such audit adjustment into account in accordance with their interests in us during thetax year under audit, our current unitholders may bear some or all of the tax liability resulting from such audit adjustment, even if such unitholdersdid not own our units during the tax year under audit. If, as a result of any such audit adjustment, we are required to make payments of taxes,penalties and interest, our cash available for distribution to our unitholders could be substantially reduced. These rules are not applicable to us fortax years beginning on or prior to December 31, 2017.As a result of investing in our common units, our unitholders may become subject to state and local taxes and return filing requirementsin jurisdictions where we operate or own or acquire properties.In addition to federal income taxes, our unitholders will likely be subject to other taxes, including state and local taxes, unincorporated businesstaxes and estate, inheritance or intangible taxes that are imposed by the various jurisdictions in which we conduct business or control propertynow or in the future, even if the unitholders do not live in any of those jurisdictions. Our unitholders will likely be required to file state and localincome tax returns and pay state and local income taxes in some or all of these various jurisdictions. Further, our unitholders may be subject topenalties for failure to comply with those requirements. Some of the states in which we conduct business currently impose a personal income taxon individuals. As we make acquisitions or expand our business, we may control assets or conduct business in additional states that impose apersonal income tax. It is the unitholder's responsibility to file all federal, state and local tax returns.Item 1B. Unresolved Staff Comments.Not applicable.Item 2. Properties.We currently have five gathering systems which provide gathering, treating and processing services. They are (i) Mountaineer Midstream locatedin Doddridge and Harrison counties, West Virginia, (ii) Bison Midstream located in Mountrail and Burke counties, North Dakota, (iii) Polar andDivide primarily located in Williams and Divide counties, North Dakota, (iv) DFW Midstream primarily located in Tarrant County, Texas and (v)Grand River primarily located in Garfield, Mesa and Rio Blanco counties, Colorado and Uintah and Grand counties, Utah. For additional informationon our midstream assets and their capacities, see Item 1. Business.Our real property falls into two categories: (i) parcels that we own in fee and (ii) parcels in which our interest derives from leases, easements,rights-of-way, permits or licenses from landowners or governmental authorities, permitting the use of such land for our operations. Portions of theland on which our gathering systems and other major facilities are located are owned by us in fee title, and we believe that we have valid title tothese lands. The remainder of the land on which our major facilities are located are held by us pursuant to long-term leases or easements betweenus and the underlying fee owner, or permits with governmental authorities. We believe that we have valid leasehold estates or fee ownership insuch lands or valid permits with governmental authorities. We have no knowledge of any material challenge to the underlying fee title of anymaterial lease, easement, right-of-way, permit or license held by us or to our title to any material lease, easement, right-of-way, permit or license.We believe that we have satisfactory title to all of our material leases, easements, rights-of-way, permits and licenses with the exception of certainordinary course encumbrances and permits with governmental entities that have been applied for, but not yet issued.In addition, we lease various office space under operating leases to support our operations. Our headquarters are located in The Woodlands,Texas, and we have additional regional corporate offices in Denver, Colorado and Atlanta, Georgia.Item 3. Legal Proceedings.Although we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we are notcurrently a party to any significant legal or governmental proceedings. In addition,44Table of Contentswe are not aware of any significant legal or governmental proceedings contemplated to be brought against us, under the various environmentalprotection statutes to which we are subject, except as noted below.In each of January and June 2015, the U.S. Department of Justice issued a grand jury subpoena to Summit Investments, the Partnership and ourgeneral partner requesting certain materials related to an incident involving a produced water disposal pipeline owned by Meadowlark Midstreamthat resulted in a discharge of materials into the environment. On February 25, 2016, the Partnership agreed to acquire, among other things,substantially all of the issued and outstanding membership interests of Meadowlark Midstream from an indirect, wholly owned subsidiary ofSummit Investments in connection with the 2016 Drop Down. The 2016 Drop Down is expected to close in March 2016. See “Overview—RecentDevelopments—Drop Down Assets Contribution Agreement” in Item 1. Business for additional information regarding this transaction. While wecannot predict the ultimate outcome of this matter with certainty, we believe at this time that it is not likely that the Partnership or our generalpartner will be subject to any material liability as a result of any governmental proceeding related to the incident. The Contribution Agreementexecuted in connection with the 2016 Drop Down contains customary representations and warranties, and Summit Investments has agreed toindemnify the Partnership with respect to certain losses resulting from the breach of such representations and warranties.Item 4. Mine Safety Disclosures.Not applicable.45Table of ContentsPART IIItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of EquitySecurities.Our limited partner common units, ticker symbol "SMLP," trade on the New York Stock Exchange. As of February 16, 2016, there wereapproximately 8,375 common unitholders, including beneficial owners of common units held in street name.The following table shows the high and low price per common unit, as reported by the New York Stock Exchange for the periods indicated. Common unit price range Cash distributionpaid per commonunit High Low 4th Quarter 2015$21.18 $12.82 $0.5753rd Quarter 2015$33.74 $14.60 $0.5702nd Quarter 2015$36.82 $30.05 $0.5651st Quarter 2015$41.17 $30.31 $0.560 4th Quarter 2014$51.44 $32.30 $0.5403rd Quarter 2014$56.49 $46.50 $0.5202nd Quarter 2014$51.25 $40.53 $0.5001st Quarter 2014$43.98 $34.72 $0.480On January 21, 2016, the board of directors of our general partner declared a distribution of $0.575 per unit for the quarterly period endedDecember 31, 2015. The distribution, which totaled $41.0 million, was paid on February 12, 2016 to unitholders of record at the close of businesson February 5, 2016.Our Cash Distribution Policy and Restrictions on DistributionsGeneralOur Cash Distribution Policy. Our partnership agreement requires us to distribute all of our available cash quarterly. Our policy is to distribute toour unitholders an amount of cash each quarter that is equal to or greater than the minimum quarterly distribution stated in our partnershipagreement. Generally, our available cash is our (i) cash on hand at the end of a quarter after the payment of our expenses and the establishmentof cash reserves and (ii) cash on hand resulting from working capital borrowings made after the end of the quarter. Because we are not subject toan entity-level federal income tax, we have more cash to distribute to our unitholders than would be the case were we subject to federal incometax. For additional information, see Note 10 to the consolidated financial statements.Limitations on Cash Distributions and Our Ability to Change Our Cash Distribution Policy. There is no guarantee that our unitholders willreceive quarterly distributions from us. We do not have a legal obligation to pay the minimum quarterly distribution or any other distribution exceptto the extent we have available cash as defined in our partnership agreement. Our cash distribution policy may be changed at any time and issubject to certain restrictions, including the following:•Our cash distribution policy is subject to restrictions on distributions under our amended and restated revolving credit facility. Ouramended and restated revolving credit facility contains financial tests and covenants that we must satisfy. Should we be unable to satisfythese restrictions, we may be prohibited from making cash distributions notwithstanding our stated cash distribution policy.•Our general partner has the authority to establish cash reserves for the prudent conduct of our business and for future cash distributions toour unitholders, and the establishment or increase of those cash reserves could result in a reduction in cash distributions to you from thelevels we currently anticipate pursuant to our stated distribution policy. Any determination to establish cash reserves made by our generalpartner in good faith will be binding on our unitholders.46Table of Contents•Although our partnership agreement requires us to distribute all of our available cash, our partnership agreement, including the provisionsrequiring us to distribute all of our available cash, may be amended. Following the subordination period, which ended on February 16,2016, we can amend our partnership agreement with the consent of our general partner and the approval of a majority of the outstandingcommon units (including common units beneficially owned by Summit Investments). As of December 31, 2015, Summit Investments,which is the ultimate owner of our general partner, beneficially owned 5,444,731 common units and all of our 24,409,850 subordinatedunits, which converted to common units on a one-for-one basis on February 16, 2016. In addition, in connection with the PurchaseProgram, a subsidiary of Energy Capital Partners owned 2,184,186 common units as of February 16, 2016.•Even if our cash distribution policy is not modified or revoked, the amount of distributions we pay under our cash distribution policy andthe decision to make any distribution is determined by our general partner, taking into consideration the terms of our partnershipagreement.•Under Delaware law, we may not make a distribution if the distribution would cause our liabilities to exceed the fair value of our assets.•We may lack sufficient cash to pay distributions to our unitholders due to cash flow shortfalls attributable to a number of operational,commercial or other factors as well as increases in our operating or general and administrative expenses, principal and interest paymentson our debt, tax expenses, working capital requirements and anticipated cash needs. Our cash available for distribution to unitholders isdirectly impacted by our cash expenses necessary to run our business and will be reduced dollar-for-dollar to the extent such uses of cashincrease.•If and to the extent our cash available for distribution materially declines, we may elect to reduce our quarterly distribution rate to serviceor repay our debt or fund expansion capital expenditures.Our Minimum Quarterly DistributionOur partnership agreement has established an MQD of $0.40 per unit per quarter, or $1.60 per unit per year, to be paid no later than 45 days afterthe end of each fiscal quarter. Based on all of the units outstanding as of December 31, 2015, our aggregate quarterly MQD is $27.1 million andour aggregate annual MQD is $108.5 million.We pay our distributions on or about the 15th of each of February, May, August and November to holders of record on or about seven days prior tosuch distribution date. We make the distribution on the business day immediately preceding the indicated distribution date if the distribution datefalls on a holiday or non-business day.Our general partner is entitled to 2.0% of all distributions that we make prior to our liquidation. In the future, our general partner's 2.0% interest inthese distributions may be reduced if we issue additional units and our general partner does not contribute a proportionate amount of capital to usto maintain its 2.0% general partner interest.47Table of ContentsStock Performance TableThe following graph compares the cumulative total unitholder return on our common units since the IPO to the cumulative total return of the S&P500 Stock Index and the Alerian MLP Index ("AMZX") by assuming $100 was invested in each investment option as of September 28, 2012, thedate of the IPO. The Alerian MLP Index is a composite of the 50 most prominent energy master limited partnerships, or MLPs, and is calculatedusing a float-adjusted, capitalization-weighted methodology.Issuer Purchases of Equity SecuritiesWe made no repurchases of our common units during the quarter ended December 31, 2015.Sponsor Purchases of Equity SecuritiesThe table below presents common units which our Sponsor acquired through its affiliates, including Summit Investments, via open markettransactions during the three months ended December 31, 2015. (a) Total Number of CommonUnits Purchased (b) Average Price Paid PerCommon Unit (c) Total Number of CommonUnits Purchased as Part ofPublicly Announced Plans orPrograms (1) (d) Maximum Number (orApproximate Dollar Value) ofCommon Units That May YetBe Purchased Under thePlans or Programs (1)October 1 - 31, 2015— $— — $—November 1 - 30, 2015— $— — $—December 1 - 31, 2015296,114 $17.25 296,114 $94,886,798__________(1) In December 2015, Energy Capital Partners approved the Purchase Program.Equity Compensation PlansThe information relating to SMLP’s equity compensation plans required by Item 5 is included in Item 12. Security Ownership of Certain BeneficialOwners and Management and Related Stockholder Matters.Item 6. Selected Financial Data.The selected consolidated financial data presented as of and for the years ended December 31, 2015, 2014, 2013, 2012, and 2011 have beenderived from the consolidated financial statements of SMLP and its Predecessor.48Table of ContentsSMLP completed its IPO on October 3, 2012. For the year ended December 31, 2012, these financial statements include the Predecessor'sresults of operations through the date of SMLP's IPO.These financial statements reflect the results of operations of (i) Bison Midstream and Polar and Divide since February 16, 2013, (ii) MountaineerMidstream since June 22, 2013, (iii) Red Rock Gathering since October 23, 2012 and (iv) Legacy Grand River since October 27, 2011. SMLPrecognized its acquisitions of Polar and Divide (the "Polar and Divide Drop Down"), Bison Midstream (the "Bison Drop Down") and Red RockGathering (the "Red Rock Drop Down") at Summit Investments' historical cost because the acquisitions were executed by entities under commoncontrol. The excess of Summit Investments' net investment over the purchase price paid for a contributed subsidiary is recognized as an additionto partners' capital, while the excess of purchase price paid over net investment is recognized as a reduction to partners' capital. Due to thecommon control aspect, we account for drop downs on an “as-if pooled” basis for the periods during which common control existed.Due to the various asset acquisitions and the associated shift in business strategies relative to those of our Predecessor, SMLP's financialposition and results of operations may not be comparable to the historical financial position and results of operations of the Predecessor.The following table presents selected balance sheet and other data as of the date indicated. December 31, 2015 2014 2013 2012 2011 (In thousands, except per-unit amounts)Balance sheet data: Total assets$2,040,531 $2,293,721 $2,191,143 $1,280,939 $1,030,264Total long-term debt944,000 808,000 586,000 199,230 349,893Partners' capital984,242 1,351,721 1,493,087 1,030,248 n/aMembership interestsn/a n/a n/a n/a 640,818 Other data: Market price per common unit$18.73 $38.00 $36.65 $19.83 n/a__________n/a - Not applicable49Table of ContentsThe following table presents selected statement of operations data by entity for the periods indicated. Year ended December 31, 2015 2014 2013 2012 2011 (In thousands, except per-unit amounts)Statement of operations data: Total revenues$371,319 $372,703 $323,686 $174,423 $103,552Total costs and expenses (1)510,190 347,836 250,952 117,987 61,864Interest expense48,616 40,159 19,173 7,340 1,029Affiliated interest expense— — — 5,426 2,025Net (loss) income(186,809) (14,734) 52,837 42,997 37,951 (Loss) earnings per limited partner unit: Common unit – basic$(3.20) $(0.49) $0.86 $0.35 n/aCommon unit – diluted(3.20) (0.49) 0.86 0.35 n/aSubordinated unit – basic and diluted(2.88) (0.44) 0.79 0.35 n/a Other financial data: EBITDA (1)$(41,896) $114,345 $144,340 $93,302 $53,363Adjusted EBITDA210,445 204,907 165,324 105,946 56,803Capital expenditures118,107 220,820 182,978 77,296 78,248Acquisition capital expenditures (2)288,618 315,872 458,914 — 589,462Distributable cash flow153,373 150,318 128,457 90,947 50,980Distributions declared per unit (3)2.285 2.120 1.795 0.410 n/a__________n/a - Not applicable(1) Includes goodwill impairments of $248.9 million in 2015 and $54.2 million in 2014. See Note 6 to the consolidated financial statements.(2) Reflects consideration paid, including working capital and capital expenditure adjustments paid (received), to fund acquisitions and/or drop downs.(3) Represents distributions declared in respect of a given period. For example, for the year ended December 31, 2015, represents the distributions declaredin April 2015 for the first quarter of 2015, July 2015 for the second quarter of 2015, October 2015 for the third quarter of 2015 and January 2016 for the fourthquarter of 2015.For a detailed discussion of the data presented above, including information regarding our use of EBITDA, adjusted EBITDA and distributable cashflow as well as their reconciliations to net income and net cash flows provided by operating activities, see Item 7. Management's Discussion andAnalysis of Financial Condition and Results of Operations. The preceding tables should also be read in conjunction with the consolidated financialstatements and notes thereto.Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.MD&A is intended to inform the reader about matters affecting the financial condition and results of operations of SMLP and its subsidiaries. As aresult, the following discussion should be read in conjunction with the consolidated financial statements and notes thereto included in this report.Among other things, those consolidated financial statements and the related notes include more detailed information regarding the basis ofpresentation 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-LookingStatements. Actual results may differ materially from those contained in any forward-looking statements.This MD&A comprises the following sections:50Table of Contents•Overview•Trends and Outlook•How We Evaluate Our Operations•Results of Operations•Non-GAAP Financial Measures•Liquidity and Capital Resources•Critical Accounting Estimates•Forward-Looking StatementsOverviewWe are a growth-oriented limited partnership focused on developing, owning and operating midstream energy infrastructure assets that arestrategically located in the core producing areas of unconventional resource basins, primarily shale formations, in the continental United States.We conduct and report our operations in the midstream energy industry through four reportable segments:•the Marcellus Shale, which is served by Mountaineer Midstream;•the Williston Basin, which is served by Bison Midstream and Polar and Divide;•the Barnett Shale, which is served by DFW Midstream; and•the Piceance Basin, which is served by Grand River.Our results are driven primarily by the volumes that we gather, treat and/or process. We generate the majority of our revenue from the natural gasgathering, treating and processing services that we provide to our natural gas customers. Under the substantial majority of these agreements, weare paid a fixed fee based on the volumes we gather, treat and/or process. These agreements enhance the stability of our cash flows by providinga revenue stream that is not subject to direct commodity price risk.We also earn revenue from (i) crude oil and produced water gathering, (ii) the sale of physical natural gas and natural gas liquids ("NGLs")purchased under percentage-of-proceeds arrangements with certain of our customers on the Bison Midstream and Grand River gathering systems,(ii) the sale of natural gas we retain from our DFW Midstream customers and (iii) the sale of condensate we retain from our gathering services atGrand River. We can be exposed to commodity price risk from engaging in any of these additional activities with the exception of crude oil andproduced water gathering. We also have indirect exposure to changes in commodity prices in that persistent low commodity prices may cause ourcustomers to delay or cancel drilling and/or completion activities or temporarily shut-in production, which would reduce the volumes of natural gasand crude oil (and associated volumes of produced water) that we gather. If our customers cancel or delay drilling and/or completion activities ortemporarily shut-in production, our MVCs ensure that we will receive a certain amount of revenue from certain of our customers.51Table of ContentsThe following table presents certain consolidated financial data for the years ended December 31. Year ended December 31, 2015 2014 2013 (In thousands)Selected Financial Results: Net (loss) income$(186,809) $(14,734) $52,837EBITDA (1)(41,896) 114,345 144,340Adjusted EBITDA (1)210,445 204,907 165,324Distributable cash flow (1)153,373 150,318 128,457 Acquisitions of gathering systems (2)$288,618 $315,872 $458,914Capital expenditures (3)118,107 220,820 182,978 Proceeds from issuance of common units, net (4)$221,977 $197,806 $—Issuance of senior notes— 300,000 300,000Borrowings (repayments) under revolving credit facility, net136,000 (78,000) 86,770Distributions to unitholders152,074 122,224 90,196__________(1) See "Non-GAAP Financial Measures" herein for additional information on EBITDA, adjusted EBITDA and distributable cash flow as well as theirreconciliations to the most directly comparable GAAP financial measure.(2) Reflects consideration paid, including working capital and capital expenditure adjustments paid (received), for acquisitions and/or drop downs. Foradditional information, see Note 15 to the consolidated financial statements.(3) See "Liquidity and Capital Resources" herein for additional information on capital expenditures.(4) Reflects proceeds from underwritten primary offerings and does not include proceeds from units issued to affiliates to affect acquisitions or drop downs.Year ended December 31, 2015. After a slight pause mid-year 2015, commodity prices continued to decline in response to the global supplysurplus. As a result, several of the producers in our areas of operations announced plans to cancel, delay and/or reduce drilling plans which in turnnegatively impacted the margins that we earn, slowing the growth in net income and adjusted EBITDA. In addition to impacting the margins thatwe earn and net income, the goodwill that we had previously recognized in connection with our acquisitions of Polar and Divide and Grand Riverwas determined to be fully impaired, resulting in a write-off of $248.9 million.During 2015, we acquired Polar and Divide from a subsidiary of Summit Investments in a drop down transaction. We also began and/or completedsystem expansion projects on the Polar and Divide, Grand River and Bison Midstream systems.In May 2015, we completed an underwritten primary offering of common units and used the proceeds along with borrowings under our revolvingcredit facility to fund the Polar and Divide Drop Down. Distributions declared in respect of the fourth quarter of 2015 increased 2.7% overdistributions declared in respect of the fourth quarter of 2014.Year ended December 31, 2014. In the second half of 2014, commodity prices began to decline, negatively impacting producers in each of ourareas of operation. The impact of these declines were most evident in our North Dakota operations where our percentage of fee-based gatheringagreements is less than that of our other systems. In addition to impacting the margins that we earned, the goodwill that we had previouslyrecognized in connection with our acquisition of Bison Midstream was determined to be fully impaired, resulting in a write-off of $54.2 million.During 2014, we acquired Red Rock Gathering from a subsidiary of Summit Investments in a drop down transaction. We also completed severalsystem expansion projects across all systems.In March 2014, we completed an underwritten public offering of primary and secondary units and we also completed a secondary offering inSeptember 2014. We used the funds from the March 2014 primary offering to partially fund the Red Rock Drop Down. In July 2014, we also issuedsenior notes and used the proceeds to repay a portion of our outstanding revolving credit facility balance. Distributions declared in respect of thefourth quarter of 2014 increased 16.7% over distributions declared in respect of the fourth quarter of 2013.52Table of ContentsYear ended December 31, 2013. During 2013, we acquired Bison Midstream from a subsidiary of Summit Investments in a drop down transactionand Mountaineer Midstream in a third-party acquisition. We also completed several system expansion projects across all systems.In June 2013, we issued senior notes and common units to Summit Investments to fund the acquisitions of Bison Midstream and MountaineerMidstream. Distributions declared in respect of the fourth quarter of 2013 increased 17.1% over distributions declared in respect of the fourthquarter of 2012.For additional information, see Item 1. Business, the remainder of this MD&A and the notes to the consolidated financial statements includedherein.Trends and OutlookOur business has been, and we expect our future business to continue to be, affected by the following key trends:•Natural gas, NGL and crude oil supply and demand dynamics;•Growth in production from U.S. shale plays;•Capital markets activity and cost of capital;•Acquisitions from third parties; and•Shifts in operating costs and inflation.Our expectations are based on assumptions made by us and information currently available to us. To the extent our underlying assumptionsabout, or interpretations of, available information prove to be incorrect, our actual results may vary materially from our expected results.Natural gas, NGL and crude oil supply and demand dynamics. Natural gas continues to be a critical component of energy supply and demandin the United States. The price of natural gas has decreased, with the New York Mercantile Exchange, or NYMEX, natural gas futures price at$2.28 per MMBtu as of December 31, 2015 compared with $2.89 per MMBtu as of December 31, 2014 and $4.23 per MMBtu as of December 31,2013. Natural gas prices continue to trade at lower-than-average historical prices due in part to increased production, especially fromunconventional sources, such as natural gas shale plays. According to the U.S. Energy Information Administration (the "EIA"), average annualnatural gas production in the United States increased to 85.9 Bcf/d, or 55.9%, in 2014 from 55.1 Bcf/d in 2008. Over the same time period, naturalgas consumption increased only 15.0% to 73.1 Bcf/d. In response to lower natural gas prices, the number of active natural gas drilling rigs hasdeclined from approximately 1,350 in December 2008 to approximately 162 in December 2015, according to Baker Hughes.Lower natural gas prices in 2015 relative to 2014 and 2013 are also attributable to U.S. weather patterns that contributed to temperatures that were24% warmer than historical norms in the second half of 2015, which resulted in lower-than-normal overall consumption of natural gas. As a result,the amount of natural gas in storage in the continental United States increased to approximately 3.8 Tcf as of December 25, 2015, compared withapproximately 3.2 Tcf as of December 26, 2014, and a five-year historical December average of 3.5 Tcf. Additionally, a number of exploration andproduction companies made public announcements in 2015 regarding abnormally high production rates from natural gas wells targeting the UticaShale formation in Ohio, West Virginia and Pennsylvania, which has resulted in a recalibration of the market’s expectation for future natural gassupplies in the United States.We believe that over the near term, until the supply of natural gas has been reduced, weather patterns change, resulting in colder temperatures, orthe broader economy experiences more robust growth to stimulate higher demand, natural gas prices are likely to be constrained.Over the long term, we believe that the prospects for continued natural gas demand are favorable and will be driven primarily by population andeconomic growth, as well as the continued displacement of coal-fired electricity generation by natural gas-fired electricity generation. For example,according to the EIA, coal-fired power plants generated 39% of the electricity in the United States in 2014, compared with 48% in 2008. The EIAexpects this trend to continue, with coal-fired power plants representing 34% of total electricity generation by 2040.In April 2015, the EIA projected total annual domestic consumption of natural gas to increase from approximately 71.8 Bcf/d in 2013 toapproximately 81.4 Bcf/d in 2040. Consistent with the rise in consumption, the EIA projects that total domestic natural gas production will continueto grow through 2040 to 97.3 Bcf/d. The EIA also projects that the United States will be a net exporter of liquefied natural gas, or LNG, by 2017,with net U.S. exports of LNG projected to rise to 15.3 Bcf/d in 2040, compared with net imports of 4.1 Bcf/d in 2013. We believe that increasing53Table of Contentsconsumption of natural gas will continue to drive natural gas drilling and production over the long term throughout the United States.In addition, the Bison Midstream and Polar and Divide systems are directly affected by crude oil supply and demand dynamics. Crude oil has beenthe focus of a recent global supply surplus, with OPEC initially stating in November 2014 and throughout 2015 that it would not decreaseproduction levels, despite concerns of slowing global demand, particularly in historically high growth countries such as China. This, in conjunctionwith continued crude oil production growth from unconventional shale plays in the United States, and expected crude oil production growth incountries that have had limited production outputs of late, such as Iran, has played a significant role in the recent decline in crude oil prices, withNYMEX crude oil futures ending 2015 at $37.13 per barrel, compared to a high in June 2014 of $107.26 per barrel. In response to lower crude oilprices, the number of active crude oil drilling rigs has declined from a peak of 1,609 in October 2014 to 536 in December 2015, according to BakerHughes. For additional information, see the "Critical Accounting Estimates—Recognition and Impairment of Long-Lived Assets" section herein andNotes 4, 5 and 6 to the consolidated financial statements.Over the next several years, the EIA projects that domestic crude oil production will continue to increase from an average of 8.7 million Bbl/d in2014 to 10.6 million Bbl/d in 2020. While long-term estimates vary due to uncertainty regarding long-term crude oil price trends, the EIA still seescontinued growth in certain unconventional shale plays, with crude oil prices expected to remain high enough to support continued drilling andincreasing production in the Bakken Shale, Eagle Ford Shale, Permian Basin, and Niobrara Shale. Additionally, in December 2015, the UnitedStates lifted a ban that had previously prohibited crude oil exports. This repeal should, over time, enable the West Texas Intermediate ("WTI")crude oil price benchmark to become more competitive with other global crude oil price benchmarks, thus stimulating incremental domesticproduction.Growth in production from U.S. shale plays. Over the past several years, a fundamental shift in production has emerged with the growth ofnatural gas production from unconventional shale resources. While the EIA expects total dry natural gas production to grow 38.1% from 25.7 Tcf in2014 to 35.5 Tcf in 2040, it expects shale gas production to grow to 19.6 Tcf in 2040, representing 55% of total U.S. natural gas production. Mostof this increase is due to the emergence of unconventional natural gas plays and advances in technology that have allowed producers to extractsignificant volumes of natural gas from these plays at cost-advantaged per-unit economics when compared to most conventional plays.In recent years, producers have leased large acreage positions in the areas in which we operate and other unconventional resource plays. To helpfund their drilling programs in many of these areas, a number of producers have entered into joint venture arrangements with large internationaloperators, industrial manufacturers and private equity sponsors. These producers and their joint venture partners have committed significantcapital to the development of the Piceance Basin and the Barnett, Bakken and Marcellus shale plays and other unconventional resource plays,which we believe will support sustained drilling activity.As a result of the current low commodity price environment, many producers have announced reductions to their capital expenditure budgets bylimiting their drilling activities in lower performing resource plays or in lower tier areas within higher performing resource plays. In addition, the lowcommodity price environment has left a number of producers in financial distress, evidenced in part by the 31 U.S.-based exploration andproduction companies that filed for bankruptcy protection in 2015. Nevertheless, we believe producers will remain focused on deploying capital intheir highest quality resource plays, even in a low commodity price environment.Capital markets activity and cost of capital. After multiple years of near-record low interest rates, the credit markets reversed in 2015 andborrowing costs increased for virtually all crude oil and natural gas industry-related borrowers. Additionally, in December 2015, the Federal Reserveannounced that it would raise its benchmark federal-funds rate from near zero to a range between 0.25% and 0.50%, the first such increase since2006. The Federal Reserve also announced its intent to continue to raise interest rates gradually in the future, to the extent that economic growthcontinues. Capital markets conditions, including but not limited to higher borrowing costs, could affect our ability to access the debt capitalmarkets to the extent necessary to fund our future growth. In addition, interest rates on future credit facilities and debt offerings could be higherthan current levels, causing our financing costs to increase accordingly. Although this could limit our ability to raise debt capital on acceptableterms, we expect to remain competitive with respect to acquisitions and capital projects, as our competitors would face similar circumstances.Acquisitions from Third Parties. Our principal business strategy is to increase the amount of cash distributions we make to our unitholders overtime. Our ability to grow cash distributions depends, in part, on our ability to make acquisitions that increase the amount of cash generated fromour operations on a per-unit basis, along with other factors. Following the 2016 Drop Down, we intend to continue to pursue accretive acquisitionsof midstream assets54Table of Contentsfrom third parties. However, their size, timing and/or contribution to our results of operations cannot be reasonably estimated. Furthermore, thereare a number of risks and uncertainties that could cause our current expectations to change, including, but not limited to, (i) the ability to reachagreement on acceptable terms with third parties; (ii) prevailing conditions and outlook in the natural gas, crude oil and natural gas liquidsindustries and markets and (iii) our ability to obtain financing on acceptable terms from commercial banks, the capital markets or other sources.The acquisition component of our principal business strategy has required and will continue to require significant expenditures by us as well asaccess to external sources of financing from the debt and equity capital markets. Furthermore, as our Sponsor and Summit Investments are underno obligation to provide any direct or indirect financial assistance to us, we rely primarily on external financing sources, including commercial bankborrowings and the issuance of debt and equity securities, to fund our acquisitions and expansion capital expenditures. Any prospective third-partytransaction would be impacted by our ability to obtain financing on acceptable terms from the capital markets or other sources, among otherfactors.We expect to finance potential third-party acquisitions with equity offerings and borrowings under our revolving credit facility, initially. Longer-termfinancing is expected to be provided by the issuance of additional debt and equity securities. See the "Liquidity and Capital Resources—CapitalRequirements" section herein and Notes 8 and 10 to the consolidated financial statements for additional information.Shifts in operating costs and inflation. Throughout most of the last five years, high levels of crude oil and natural gas exploration, developmentand production activities across the United States resulted in increased competition for personnel and equipment as well as higher prices for labor,supplies, equipment and other services. Beginning in 2015, this dynamic began to shift as prices for crude oil and natural gas-related servicesdecreased as overall demand for these goods and services declined. While we expect lower service-related costs in the near term, we expect thatover the longer term, these costs will continue to have a high correlation the prevailing price of crude oil and natural gas.How We Evaluate Our OperationsWe conduct and report our operations in the midstream energy industry through four reportable segments:•the Marcellus Shale;•the Williston Basin;•the Barnett Shale; and•the Piceance Basin.Each of our reportable segments provides midstream services in a specific geographic area. Our reportable segments reflect the way in which weinternally report the financial information used to make decisions and allocate resources in connection with our operations. See Note 3 to theconsolidated financial statements for additional information.Our management uses a variety of financial and operational metrics to analyze our consolidated and segment performance. We view these metricsas important factors in evaluating our profitability and determining the amounts of cash distributions to pay to our unitholders. These metricsinclude:•throughput volume,•revenues,•operation and maintenance expenses,•EBITDA,•adjusted EBITDA and segment adjusted EBITDA, and•distributable cash flow.Throughput VolumeThe volume of (i) natural gas that we gather, treat and/or process and (ii) crude oil and produced water that we gather depends on the level ofproduction from natural gas or crude oil wells connected to our gathering systems. Aggregate production volumes are impacted by the overallamount of drilling and completion activity. Furthermore,55Table of Contentsbecause the production rate of natural gas and crude oil wells decline over time, production can only be maintained or increased by new drilling orother activity.As a result, we must continually obtain new supplies of production to maintain or increase the throughput volume on our systems. Our ability tomaintain 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; natural gas gathering rates are reported in millions of cubic feet per day ("MMcf/d"). Weaggregate crude oil and produced water gathering and report it in barrels; liquids gathering rates are reported in thousands of barrels per day("Mbbl/d").RevenuesOur revenues are primarily attributable to the volumes that we gather, treat and/or process and the rates we charge for those services. Asubstantial majority of our gathering and processing agreements are fee-based, which limits our direct commodity price exposure. We also havepercent-of-proceeds arrangements under which the gathering and processing revenues that we earn correlate directly with the fluctuating price ofnatural gas, condensate and NGLs. We report throughput rates for natural gas on a per thousand cubic feet ("Mcf") basis and throughput rates forliquids on a per barrel ("Bbl") basis.Many of our gathering and processing agreements contain MVCs pursuant to which our customers agree to ship or process a minimum volume ofproduction 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 support our revenues and serve to mitigate the financial impact associated with declining volumes.Operation and Maintenance ExpensesWe seek to maximize the profitability of our operations in part by minimizing, to the extent appropriate, expenses directly tied to operating ourassets. 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, theseexpenses are largely independent of volumes delivered through our gathering systems but may fluctuate depending on the activities performedduring a specific period.The majority of the compressors on our DFW Midstream system are electric driven and power costs are directly correlated to the run-time of thesecompressors, which depends directly on the volume of natural gas gathered. As part of our contracts with our DFW Midstream system customers,we physically retain a percentage of throughput volumes that we subsequently sell to offset the power costs we incur. With respect to theMountaineer Midstream, Bison Midstream and Grand River systems, we either (i) consume physical gas on the system to operate our gas-firedcompressors or (ii) charge our customers for the power costs we incur to operate our electric-drive compressors.EBITDA, Adjusted EBITDA, Segment Adjusted EBITDA and Distributable Cash FlowEBITDA, adjusted EBITDA, segment adjusted EBITDA and distributable cash flow are used as supplemental financial measures by ourmanagement and by external users of our financial statements such as investors, commercial banks, research analysts and others.EBITDA and adjusted EBITDA (including segment adjusted EBITDA) are used to assess:•the financial performance of our assets without regard to financing methods, capital structure or historical cost basis;56Table of Contents•the ability of our assets to generate cash sufficient to support our indebtedness and make cash distributions to our unitholders and generalpartner;•our operating performance and return on capital as compared to those of other companies in the midstream energy sector, without regardto financing or capital structure; and•the attractiveness of capital projects and acquisitions and the overall rates of return on alternative investment opportunities.In addition, adjusted EBITDA (including segment adjusted EBITDA) is used to assess:•the financial performance of our assets without regard to the impact of the timing of minimum volume commitments shortfall paymentsunder our gathering agreements or the timing of impairments or other noncash income or expense items.Distributable cash flow is used to assess:•the ability of our assets to generate cash sufficient to support our indebtedness and make future cash distributions to our unitholders; and•the attractiveness of capital projects and acquisitions and the overall rates of return on alternative investment opportunities.Items Affecting the Comparability of Our Financial ResultsOur historical results of operations may not be comparable to our future results of operations for the reasons described below:•The consolidated financial statements reflect the results of operations of Bison Midstream and Polar and Divide since February 16, 2013.We accounted for the drop down of these assets on an "as-if pooled" basis because the transactions were executed by entities undercommon control. The Polar and Divide system commenced operations in May 2013.•The consolidated financial statements reflect the results of operations of Mountaineer Midstream since June 22, 2013.For additional information, see the "Results of Operations" and "Non-GAAP Financial Measures" sections herein and the notes to the consolidatedfinancial statements. For information on impending accounting changes that are expected to materially impact our financial results reported infuture periods, see Note 2 to the consolidated financial statements.Results of OperationsOur financial results are recognized as follows:Gathering services and related fees. Revenue earned from the gathering, treating and processing services that we provide to our natural gas andcrude oil producer customers.Natural gas, NGLs and condensate sales. Revenue earned from (i) the sale of physical natural gas and natural gas liquids purchased underpercentage-of-proceeds arrangements with certain of our customers on the Bison Midstream and Grand River gathering systems, (ii) the sale ofnatural gas we retain from our DFW Midstream customers and (iii) the sale of condensate we retain from our gathering services at Grand River.Other revenues. Revenue earned primarily from (i) certain costs for which our Bison Midstream and Grand River customers have agreed toreimburse us and (ii) connection fees for customers of the Polar and Divide system.Cost of natural gas and NGLs. The cost of natural gas and NGLs represents the costs associated with the percent-of-proceeds arrangementsunder which we sell natural gas purchased from certain of our customers on the Bison Midstream and Grand River gathering systems.Operation and maintenance. Operation and maintenance primarily comprises direct labor costs, compression costs, ad valorem taxes, repair andnon-capitalized maintenance costs, integrity management costs, utilities and contract services. These items represent the most significant portionof our operation and maintenance expense. Other than utilities expense, these expenses are largely independent of variations in throughputvolumes but may fluctuate depending on the activities performed during a specific period. Operation and maintenance also includes ourprocurement of electricity to operate our electric-drive compression assets on the DFW Midstream system.57Table of ContentsGeneral and administrative. Expenses associated with our operations that are not specifically associated with the operation and maintenance ofa particular system or another cost and expense line item. These expenses largely reflect salaries, benefits and incentive compensation,professional fees, insurance and rent.Transaction costs. Financial and legal advisory costs associated with completed acquisitions.Depreciation and amortization. The amortization of our contract and right-of-way intangible assets and the depreciation of our property, plant andequipment.Other income or expense. Generally represents interest income but may also include other items of gain or loss.Interest expense. Interest expense associated with our revolving credit facility and senior notes.Income tax expense. Since we are structured as a partnership, we are generally not subject to federal and state income taxes, except the TexasMargin Tax, which is reflected herein.Consolidated Overview of the Years Ended December 31, 2015, 2014 and 2013The following table presents certain consolidated and operating data for the years ended December 31. Year ended December 31, Percentage Change 2015 2014 2013 2015 v. 2014 2014 v. 2013 (Dollars in thousands, except fee-rate data)Revenues: Gathering services and related fees$310,829 $255,211 $213,979 22 % 19 %Natural gas, NGLs and condensate sales42,079 97,094 88,185 (57)% 10 %Other revenues18,411 20,398 21,522 (10)% (5)%Total revenues371,319 372,703 323,686 — % 15 %Costs and expenses: Cost of natural gas and NGLs31,398 72,415 68,037 (57)% 6 %Operation and maintenance87,285 88,927 77,114 (2)% 15 %General and administrative36,544 38,269 32,273 (5)% 19 %Transaction costs790 730 2,841 8 % (74)%Depreciation and amortization96,189 87,349 70,574 10 % 24 %(Gain) loss on asset sales, net(172) 442 113 * *Long-lived asset impairment9,305 5,505 — * *Goodwill impairment248,851 54,199 — * *Total costs and expenses510,190 347,836 250,952 47 % 39 %Other income2 1,189 5 * *Interest expense(48,616) (40,159) (19,173) 21 % 109 %(Loss) income before income taxes(187,485) (14,103) 53,566 * *Income tax benefit (expense)676 (631) (729) * (13)%Net (loss) income$(186,809) $(14,734) $52,837 * * Operating Data: Aggregate average throughput – gas (MMcf/d)1,449 1,418 1,138 2 % 25 %Aggregate average throughput rate per Mcf – gas$0.46 $0.46 $0.50 — % (8)%Average throughput – liquids (Mbbl/d)55.0 33.6 10.9 64 % *Average throughput rate per Bbl – liquids$1.84 $1.64 $0.95 12 % 73 %__________* Not considered meaningfulVolumes – Gas. For the year ended December 31, 2015, our aggregate natural gas throughput volumes increased primarily reflecting an increasein volume throughput for Mountaineer Midstream, partially offset by volume throughput declines on Grand River.58Table of ContentsFor the year ended December 31, 2014, our aggregate natural gas throughput volumes increased largely reflecting the contribution fromMountaineer Midstream and Grand River. These production increases were partially offset by volume throughput declines on the DFW Midstreamand Legacy Grand River systems.Volumes – Liquids. Average daily throughput for crude oil and produced water increased during the years ended December 31, 2015 and 2014,primarily reflecting the continued development of the Polar and Divide system, new pad site connections and producers' ongoing drilling activity.Revenues. For the year ended December 31, 2015, total revenues decreased $1.4 million primarily reflecting:•the recognition in 2015 of previously deferred revenue at Grand River (see Note 7 to the consolidated financial statements).•an increase in gathering services and related fees for the Polar and Divide and Mountaineer Midstream systems.•an offset to revenues as a result of declines in natural gas, NGLs and condensate sales for Bison Midstream, Grand River and DFWMidstream.For the year ended December 31, 2014, total revenues increased $49.0 million, or 15%, primarily reflecting:•overall growth at Red Rock Gathering and Polar and Divide.•an increase in gathering services and related fees at Mountaineer Midstream due in large part to the partial year of ownership in 2013.•overall growth at Bison Midstream primarily due to higher volume throughput.•an overall decline in DFW Midstream revenues largely due to lower volume throughput.Gathering Services and Related Fees. The increase in gathering services and related fees during the year ended December 31, 2015 was primarilydriven by the recognition of previously deferred revenue noted above and higher volume throughput on the Polar and Divide and MountaineerMidstream systems.The aggregate average throughput rate for natural gas decreased to $0.46/Mcf during the year ended December 31, 2015, compared with$0.46/Mcf in the prior-year period primarily as a result of a larger proportion of gathering fee revenue from Mountaineer Midstream. The aggregateaverage throughput rate for crude oil and produced water increased to $1.84/Bbl during the year ended December 31, 2015, compared with$1.64/Bbl in the prior-year period primarily as a result of the effect of contract amendments in 2014 which increased gathering rates in connectionwith our commitment to further expand the Polar and Divide system.For the year ended December 31, 2014, gathering services and related fees increased primarily reflecting the proportionate contribution of highermargin volume throughput from certain customers and the first quarter 2014 commissioning of a natural gas processing plant at Grand River; theimpact of higher volume throughput on gathering services and related fees and higher gathering rates associated with contract amendments in2014 for Polar and Divide; and a full year of operations under SMLP's management as well as our build out of the Mountaineer Midstream system.These increases were partially offset by the continued natural decline in volumes and lack of producer drilling activity on the DFW Midstreamsystem.The aggregate average throughput rate for natural gas decreased to $0.46/Mcf during the year ended December 31, 2014, compared with$0.50/Mcf in the prior-year period largely as a result of a larger proportion of gathering fee revenue from Mountaineer Midstream, partially offset byan increase for Grand River due to a shift in volume mix. The aggregate average throughput rate for crude oil and produced water increased to$1.64/Bbl during the year ended December 31, 2014, compared with $0.95/Bbl in the prior-year period primarily as a result of the effect of 2014contract amendments noted above.Natural Gas, NGLs and Condensate Sales. The decrease in natural gas, NGLs and condensate sales for the years ended December 31, 2015 and2014 was primarily a result of the impact of declining commodity prices. Declining commodity prices negatively impacted our percent-of-proceedsarrangements at Bison Midstream and Grand River, our fuel retainage revenue at DFW Midstream and condensate revenue for Grand River.Costs and Expenses. Total costs and expenses increased $162.4 million, or 47%, for the year ended December 31, 2015 primarily reflecting:•the goodwill impairments recognized for Polar and Divide and Grand River.•a partial offset resulting from lower cost of natural gas and NGLs at Bison Midstream and Grand River.59Table of Contents•an increase in depreciation and amortization expense for all systems, except DFW Midstream.•a partial offset due to the impact of the 2014 goodwill and long-lived asset impairments.For the year ended December 31, 2014, total costs and expenses increased $96.9 million, or 39%, primarily reflecting:•the goodwill impairment recognized for Bison Midstream.•an increase in depreciation and amortization across our gathering systems.•an increase in cost of natural gas and NGLs for Bison Midstream and Grand River.•an increase in operation and maintenance expense as a result of the continued development of the Polar and Divide system.Cost of Natural Gas and NGLs. The decrease in cost of natural gas and NGLs for the year ended December 31, 2015 was largely driven bydeclining commodity prices and the associated impact on our percent-of-proceeds arrangements at Bison Midstream and Grand River. Theincrease in cost of natural gas and NGLs for the year ended December 31, 2014 was primarily attributable to an increase in volume throughput,partially offset by declining commodity prices.Operation and Maintenance. Operation and maintenance expense decreased during the year ended December 31, 2015 primarily reflecting adecline in electricity expense associated with DFW Midstream's electric-drive compression assets and a decline in pass-through electricityexpense for Grand River (revenue component is recognized in other revenues.) These decreases were partially offset by an increase in connectionfee pass-through expense for Polar and Divide as a result of system expansion (revenue component is recognized in other revenues), an increasein property taxes and an increase in compensation expense.Operation and maintenance expense increased during the year ended December 31, 2014 primarily as a result of a full year of operations for bothMountaineer Midstream and Polar and Divide as well as higher expenses at Bison Midstream, including an increase in pass-through electricityexpense (revenue component is recognized in other revenues).General and Administrative. General and administrative expense decreased during the year ended December 31, 2015 reflecting a decline inprofessional services, primarily the result of expenses incurred in 2014 in connection with our obligations under Section 404 of the Sarbanes-OxleyAct of 2002 and our adoption of Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of theTreadway Commission ("COSO 2013"). Expenses for salaries and benefits also declined due to a reduction in incentive compensation. Thesedecreases were partially offset by increases in unit-based compensation and rent expenses.General and administrative expense increased during the year ended December 31, 2014, largely as a result of an increase in salaries, benefitsand incentive compensation primarily due to increased head count, an increase in professional expenses associated with our obligations underSection 404 of the Sarbanes-Oxley Act of 2002 and our adoption of COSO 2013.Transaction Costs. Transaction costs recognized primarily relate to financial and legal advisory costs associated with the Polar and Divide DropDown in 2015, the Red Rock Drop Down in 2014 and the Bison Drop Down and the acquisition of Mountaineer Midstream in 2013.Depreciation and Amortization. The increase in depreciation and amortization expense during the years ended December 31, 2015 and 2014 waslargely driven by an increase in assets placed into service and an increase in contract amortization largely due to Grand River.Interest Expense. The increase in interest expense during the year ended December 31, 2015 was primarily driven by our July 2014 issuance of5.5% senior notes.The increase in interest expense during the year ended December 31, 2014 was primarily driven by our June 2013 issuance of 7.5% senior notes.60Table of ContentsSegment Overview of the Years Ended December 31, 2015, 2014 and 2013Marcellus Shale. Mountaineer Midstream, a natural gas gathering system, provides our midstream services for the Marcellus Shale reportablesegment. We acquired Mountaineer Midstream in June 2013. Volume throughput for the Marcellus Shale reportable segment follows. Marcellus Shale (1) Year ended December 31, Percentage Change 2015 2014 2013 (2) 2015 v. 2014 2014 v. 2013Operating Data: Average throughput (MMcf/d)478 382 87 25% *__________* Not considered meaningful(1) Contract terms related to throughput rate per MCF are excluded for confidentiality purposes.(2) For the period of SMLP's ownership in 2013, average throughput was 164 MMcf/d.The increase in volume throughput in 2015, compared to 2014, was primarily driven by the upstream connection of wells owned by MountaineerMidstream's anchor customer, Antero.The increase in volume throughput in 2014, compared with 2013, reflects the continuation of active drilling by Antero and the connection of newwells upstream of the Mountaineer Midstream system as well as the impact of new, upstream compressor stations commissioned by third parties,which contributed to volume throughput.We expect volumes on the Mountaineer Midstream system to increase throughout the second and third quarters of 2016 as Antero completes aportion of its deferred well inventory.Financial data for our Marcellus Shale reportable segment follows. Marcellus Shale Year ended December 31, Percentage Change 2015 2014 2013 2015 v. 2014 2014 v. 2013 (In thousands)Revenues: Gathering services and related fees$28,468 $22,694 $9,588 25 % 137%Total revenues28,468 22,694 9,588 25 % 137%Costs and expenses: Operation and maintenance4,886 4,560 2,447 7 % 86%General and administrative368 2,194 808 (83)% *Depreciation and amortization8,682 7,648 3,998 14 % 91%Total costs and expenses13,936 14,402 7,253 (3)% 99%Add: Depreciation and amortization8,682 7,648 3,998 Segment adjusted EBITDA$23,214 $15,940 $6,333 46 % *__________* Not considered meaningfulYear ended December 31, 2015. Segment adjusted EBITDA increased $7.3 million during 2015 reflecting:•the impact of an increase in volume throughput which translated into higher gathering services and related fees revenue.•minimum revenue commitment payments related to the Zinnia Loop project, beginning in the first quarter of 2015.•a decline in general and administrative expenses primarily as a result of our decision to discontinue allocating certain corporate generaland administrative expenses to our reportable segments beginning in the first quarter of 2015.•an increase in operation and maintenance primarily as a result of system expansion and the associated increase in volume throughput.61Table of ContentsDepreciation and amortization increased during 2015 largely as a result of commissioning the Zinnia Loop project late in the third quarter of 2014.Year ended December 31, 2014. Segment adjusted EBITDA increased $9.6 million during 2014 reflecting:•a full year of operations under SMLP's management as well as our build out of the Mountaineer Midstream system to keep pace withincreases in production from Antero as processing capacity at MPLX’s Sherwood Processing Complex increased.Depreciation and amortization increased during the year ended December 31, 2014 largely as a result of a full year of operations.Williston Basin. Bison Midstream and Polar and Divide provide our services for the Williston Basin reportable segment. Bison Midstream, anassociated natural gas gathering system, was acquired from a subsidiary of Summit Investments in June 2013. Polar and Divide, a crude oil andproduced water gathering system and transmission pipelines, was acquired from subsidiaries of Summit Investments in May 2015. Our resultsinclude activity for Bison Midstream and Polar and Divide since February 16, 2013, the date on which common control began.Operating data for our Williston Basin reportable segment follows. Williston Basin Year ended December 31, Percentage Change 2015 2014 2013 2015 v. 2014 2014 v. 2013Operating Data: Average throughput – natural gas (MMcf/d) (1)18 18 14 — % 29 %Average throughput rate per Mcf – gas$2.53 $3.46 $3.86 (27)% (10)%Average throughput (Mbbl/d) – liquids (2)55.0 33.6 10.9 64 % *Average throughput rate per Bbl – liquids$1.84 $1.64 $0.95 12 % 73 %__________* Not considered meaningful(1) For the year ended December 31, 2013. For the period of SMLP's ownership in 2013, average throughput was 16 MMcf/d.(2) For the year ended December 31, 2013. For the period of SMLP's ownership in 2013, average throughput was 12.5 Mbbl/d.Natural gas. Natural gas volume throughput was flat in 2015 compared with 2014 due to the offsetting effects of customers reducing their drillingactivities in response to continued declines in commodity prices and increases in gas-to-oil ratios on existing production.The increase in natural gas volume throughput in 2014 primarily reflects additional pad site connections and newly installed compression capacity,which improved system hydraulics.The declines in natural gas gathering rates in 2015 and 2014 were primarily a result of the impact of declining commodity prices on volumesassociated with a percent-of-proceeds contract.Liquids. The increase in liquids volume throughput in 2015 and 2014 reflect new pad site connections and ongoing drilling activity in Polar andDivide's service area.The increase in average throughput rate for liquids for 2015 and 2014 was primarily as a result of contract amendments in 2014 which increasedgathering rates in connection with our commitment to further expand the Polar and Divide system.62Table of ContentsFinancial data for our Williston Basin reportable segment follows. Williston Basin Year ended December 31, Percentage Change 2015 2014 2013 2015 v. 2014 2014 v. 2013 (In thousands)Revenues: Gathering services and related fees$50,233 $36,672 $21,132 37 % 74 %Natural gas, NGLs and condensate sales23,525 56,040 47,130 (58)% 19 %Other revenues12,129 11,759 13,239 3 % (11)%Total revenues85,887 104,471 81,501 (18)% 28 %Costs and expenses: Cost of natural gas and NGLs23,090 54,480 54,840 (58)% (1)%Operation and maintenance24,380 21,768 8,849 12 % 146 %General and administrative3,362 7,755 4,402 (57)% 76 %Depreciation and amortization26,280 22,491 16,669 17 % 35 %(Gain) loss on asset sales, net5 296 — * *Long-lived asset impairment7,554 — — * *Goodwill impairment203,373 54,199 — * *Total costs and expenses288,044 160,989 84,760 79 % 90 %Add: Depreciation and amortization26,280 22,491 16,669 Adjustments related to MVC shortfall payments11,870 10,743 3,600 Unit-based compensation85 340 340 Loss on asset sales5 296 — Long-lived asset impairment7,554 — — Goodwill impairment203,373 54,199 — Segment adjusted EBITDA$47,010 $31,551 $17,350 49 % 82 %__________* Not considered meaningfulYear ended December 31, 2015. Segment adjusted EBITDA increased $15.5 million during 2015 reflecting:•the impact of higher volume throughput on gathering services and related fees as well as other revenues generated by the Polar andDivide system.•higher gathering rates associated with amendments to liquids contracts in 2014.•the previously mentioned decision to discontinue allocating certain corporate general and administrative expenses to our reportablesegments.•the impact of declining commodity prices which negatively affect the margins we earn under percent-of-proceeds arrangements.•an increase in operation and maintenance expense largely as a result of system buildout on the Polar and Divide system.Depreciation and amortization increased during 2015 largely as a result of assets placed into service. During 2015, we identified certain events,facts and circumstances which indicated that certain of our property, plant and equipment was impaired; as such, we recognized a long-lived assetimpairment. The goodwill impairment recognized in 2015 relates to our determination that all of the goodwill associated with the Polar and Dividereporting unit had been impaired.Year ended December 31, 2014. Segment adjusted EBITDA increased $14.2 million during 2014 reflecting:•the impact of higher volume throughput on gathering services and related fees as well as other revenues generated by the Polar andDivide system.63Table of Contents•higher gathering rates associated with amendments to liquids contracts in 2014.•increased volumes under our percent-of-proceeds arrangements on the Bison Midstream system.•higher operating and maintenance expense to support volume growth across the systems.The increase in depreciation and amortization expense during 2014 was largely driven by an increase in assets placed into service and contractamortization. The goodwill impairment recognized in 2014 relates to our determination that all of the goodwill associated with the Bison Midstreamreporting unit had been impaired.For additional information, see the sections entitled "Non-GAAP Financial Measures—Non-GAAP reconciliations items to note," "CriticalAccounting Estimates—Recognition and Impairment of Long-Lived Assets" herein and Notes 2 and 6 to the consolidated financial statements.Barnett Shale. DFW Midstream, a natural gas gathering system, provides our midstream services for the Barnett Shale reportable segment. OnSeptember 30, 2014, DFW Midstream acquired certain natural gas gathering assets (the "Lonestar assets"). The Lonestar assets gather naturalgas under two long-term, fee-based gathering agreements.Operating data for our Barnett Shale reportable segment follows. Barnett Shale Year ended December 31, Percentage Change 2015 2014 2013 2015 v. 2014 2014 v. 2013Operating Data: Average throughput (MMcf/d)352 358 391 (2)% (8)%Average throughput rate per Mcf$0.62 $0.59 $0.59 5 % — %Volume throughput was flat in 2015 after declining in 2014. The 2015 year-over-year comparison reflects several offsetting effects related tocustomer drilling and completion activities, the contribution from the Lonestar assets beginning in the fourth quarter of 2014 and a lack of drillingactivity by DFW Midstream's anchor customer.For 2014, the decline in volume throughput reflected the impact of multiple customers temporarily shutting-in several large pad sites to drill orcomplete new wells as noted above. In addition, 2013 volume throughput benefited early in the year due to the first quarter 2013 commissioning ofan additional compressor which increased throughput capacity on the DFW Midstream system by 40 MMcf/d.The higher average throughput rate in 2015 is primarily the result of a shift in volume mix.Our customers have a number of wells that have been drilled and are in various stages of the completion process; many of which we expect tobegin producing before the third quarter of 2016. In addition, one of our customers recently moved a drilling rig back into our service area to drillnew wells which we expect will stimulate volume throughput in the second half of 2016.64Table of ContentsFinancial data for our Barnett Shale reportable segment follows. Barnett Shale Year ended December 31, Percentage Change 2015 2014 2013 2015 v. 2014 2014 v. 2013 (In thousands)Revenues: Gathering services and related fees$80,461 $79,976 $89,147 1 % (10)%Natural gas, NGLs and condensate sales6,700 13,448 17,190 (50)% (22)%Other revenues881 (423) (1,013) * *Total revenues88,042 93,001 105,324 (5)% (12)%Costs and expenses: Operation and maintenance25,823 29,438 31,784 (12)% (7)%General and administrative1,297 4,607 6,129 (72)% (25)%Depreciation and amortization15,606 15,657 13,929 — % 12 %Loss on asset sales13 — 113 * *Long-lived asset impairment531 5,505 — * *Total costs and expenses43,270 55,207 51,955 (22)% 6 %Add: Depreciation and amortization16,392 16,601 14,961 Adjustments related to MVC shortfall payments(2,182) 628 1,030 Loss on asset sales13 — 113 Long-lived asset impairment531 5,505 — Segment adjusted EBITDA$59,526 $60,528 $69,473 (2)% (13)%__________*Not considered meaningfulYear ended December 31, 2015. Segment adjusted EBITDA decreased $1.0 million during 2015 reflecting:•the impact of declining natural gas prices on the fuel retainage fee that is paid in-kind by certain of our customers to offset the costs weincur to operate DFW Midstream's electric-drive compression assets.•lower electricity expense which is reflected in operation and maintenance. We purchase a fixed quantity of power at a fixed heat ratebased on prevailing natural gas prices. As a result, the decline in natural gas prices translated into lower electricity expenses. This declinewas partially offset by an increase in compression expense.•the previously mentioned decision to discontinue allocating certain corporate general and administrative expenses to our reportablesegments.Depreciation and amortization increased during 2015 largely as a result of placing the Lonestar assets into service in September 2014.Year ended December 31, 2014. Segment adjusted EBITDA decreased $8.9 million during 2014 reflecting:•the impact of declining natural gas prices on the fuel retainage fee that is paid in-kind by certain of our customers to offset the costs weincur to operate DFW Midstream's electric-drive compression assets.•a decrease in gathering services and related fees due to lower volumes.Depreciation and amortization increased during 2014 largely as a result of placing the Lonestar assets into service in September 2014.Piceance Basin. Grand River, a natural gas gathering and processing system, provides our midstream services for the Piceance Basin reportablesegment. Red Rock Gathering became part of the Grand River system in connection with the Red Rock Drop Down in March 2014. As notedabove, our results include activity for Red Rock Gathering since October 23, 2012, the date on which common control began. For additionalinformation, see the notes to the65Table of Contentsconsolidated financial statements.Operating data for our Piceance Basin reportable segment follows. Piceance Basin Year ended December 31, Percentage Change 2015 2014 2013 2015 v. 2014 2014 v. 2013Operating Data: Average throughput (MMcf/d)602 660 646 (9)% 2%Average throughput rate per Mcf$0.53 $0.49 $0.40 8 % 23%Volume throughput during 2015 was favorably impacted by new pad site connections for WPX Energy, Inc. and Ursa Resources Group II as wellas the March 2014 start-up of a cryogenic processing plant servicing production from Black Hills Corporation. Volume throughput on the LegacyGrand River system declined in 2014 primarily as a result of Encana's continued suspension of drilling activities, which began in the fourth quarterof 2013.The aggregate average throughput rate increased during 2015 and 2014 largely as a result of a shift in volume throughput mix. Volume growth fromRed Rock Gathering's anchor customers continues to offset volume declines on the Legacy Grand River system and thereby has translated intohigher average gathering rates per Mcf.Financial data for our Piceance Basin reportable segment follows. Piceance Basin Year ended December 31, Percentage Change 2015 2014 2013 2015 v. 2014 2014 v. 2013 (Dollars in thousands, except fee-rate data)Revenues: Gathering services and related fees$151,667 $115,869 $94,112 31 % 23 %Natural gas, NGLs and condensate sales11,854 27,606 23,865 (57)% 16 %Other revenues5,401 9,062 9,296 (40)% (3)%Total revenues168,922 152,537 127,273 11 % 20 %Costs and expenses: Cost of natural gas and NGLs8,308 17,935 13,197 (54)% 36 %Operation and maintenance32,196 33,111 33,964 (3)% (3)%General and administrative2,361 8,732 11,566 (73)% (25)%Depreciation and amortization45,018 40,965 35,527 10 % 15 %(Gain) loss on asset sales(190) 146 — * *Long-lived asset impairment1,220 — — * *Goodwill impairment45,478 — — * *Total costs and expenses134,391 100,889 94,254 33 % 7 %Other income— 1,185 — * *Add: Depreciation and amortization45,018 40,965 35,527 Adjustments related to MVC shortfall payments(21,590) 15,194 12,395 Loss on asset sales24 146 — Long-lived asset impairment1,220 — — Goodwill impairment45,478 — — Less: Gain on asset sales214 — — Impact of purchase price adjustments— 1,185 — Segment adjusted EBITDA$104,467 $107,953 $80,941 (3)% 33 %__________* Not considered meaningful66Table of ContentsYear ended December 31, 2015. Segment adjusted EBITDA decreased $3.5 million during 2015 reflecting:•the impact of declining commodity prices which negatively impacted the margins that we earn from our percent-of-proceeds contracts.•lower gathering services revenue from our anchor customer.•the previously mentioned decision to discontinue allocating certain corporate general and administrative expenses to our reportablesegments.•an increase in anticipated MVC shortfall payments due to increasing rate and volume commitment provisions in certain gas gatheringagreements.Gathering services and related fees also reflect the recognition of revenue that had been previously deferred in connection with an MVCarrangement, which was determined to no longer be recoverable by the customer. Because we exclude the impacts of adjustments related to MVCshortfall payments from our definition of segment adjusted EBITDA, this metric was not impacted by the 2015 deferred revenue release. (See Note7 to the consolidated financial statements for additional information.) Other revenues and operation and maintenance also reflect the effect of adecrease in certain electricity expenses, which, due to their pass-through nature, have no impact on segment adjusted EBITDA. Depreciation andamortization increased during the year ended December 31, 2015 largely as a result of an increase in contract amortization for Grand River'sanchor customer and the March 2014 commissioning of a cryogenic processing plant. During 2015, we identified certain events, facts andcircumstances which indicated that certain of our property, plant and equipment was impaired; as such, we recognized a long-lived assetimpairment. The goodwill impairment recognized in 2015 relates to our determination that all of the goodwill associated with the Grand Riverreporting unit had been impaired.Year ended December 31, 2014. Segment adjusted EBITDA increased $27.0 million during 2014 reflecting:•higher gathering services and related fees, largely due to the proportionate contribution of higher margin volume throughput from certaincustomers and the first quarter 2014 commissioning of a natural gas processing plant.•an increase in anticipated MVC shortfall payments due to increasing rate and volume commitment provisions in certain gas gatheringagreements.•a decline in operation and maintenance.Other revenues and operation and maintenance also reflect the effect of a decrease in certain electricity expenses, which, due to their pass-through nature, have no impact on segment adjusted EBITDA. Depreciation and amortization increased during 2014 largely as a result an increasein contract amortization and assets placed into service on the Grand River system. Other income represents the write off of certain balances thathad been previously recognized in connection with the purchase accounting for the Legacy Grand River system.For additional information, see the sections entitled "Non-GAAP Financial Measures—Non-GAAP reconciliations items to note," "CriticalAccounting Estimates—Recognition and Impairment of Long-Lived Assets" herein and Notes 2, 6 and 15 to the consolidated financial statements.Corporate. Corporate represents those results that are not specifically attributable to a reportable segment or that have not been allocated to ourreportable segments, including certain general and administrative expense items, transaction costs and interest expense. Items to note follow. Corporate Year ended December 31, Percentage Change 2015 2014 2013 2015 v. 2014 2014 v. 2013 (In thousands)Costs and expenses: General and administrative$29,156 $15,031 $9,368 94% 60 %Transaction costs790 730 2,841 8% (74)%Interest expense48,616 40,159 19,173 21% 109 %67Table of ContentsGeneral and Administrative. The increase in general and administrative expense during the year ended December 31, 2015, largely reflects theimpact of our decision to discontinue allocating certain expenses, primarily salaries, benefits, incentive compensation and rent expense, to ouroperating segments.General and administrative expense increased during the year ended December 31, 2014, largely as a result of an increase in salaries, benefitsand incentive compensation primarily due to increased head count, an increase in professional expenses associated with our obligations underSection 404 of the Sarbanes-Oxley Act of 2002 and our adoption of COSO 2013.Transaction Costs. Transaction costs recognized primarily relate to financial and legal advisory costs associated with the Polar and Divide DropDown in 2015, the Red Rock Drop Down in 2014 and the Bison Drop Down and the acquisition of Mountaineer Midstream in 2013.Interest Expense. The increase in interest expense during the year ended December 31, 2015 was primarily driven by our July 2014 issuance of5.5% senior notes.The increase in interest expense during the year ended December 31, 2014 was primarily driven by our June 2013 issuance of 7.5% senior notes.Non-GAAP Financial MeasuresEBITDA, adjusted EBITDA and distributable cash flow are not financial measures presented in accordance with GAAP. We define EBITDA as netincome or loss, plus interest expense, income tax expense, and depreciation and amortization, less interest income and income tax benefit. Wedefine adjusted EBITDA as EBITDA plus adjustments related to MVC shortfall payments, impairments and other noncash expenses or losses,less other noncash income or gains. We define distributable cash flow as adjusted EBITDA plus cash interest received, less cash interest paid,senior notes interest adjustment, cash taxes paid and maintenance capital expenditures. We believe that the presentation of these non-GAAPfinancial measures provides useful information to investors in assessing our financial condition and results of operations.Net income or loss and net cash provided by operating activities are the GAAP financial measures most directly comparable to EBITDA, adjustedEBITDA and distributable cash flow. Our non-GAAP financial measures should not be considered as alternatives to the most directly comparableGAAP financial measure. Furthermore, each of these non-GAAP financial measures has limitations as an analytical tool because it excludessome but not all items that affect the most directly comparable GAAP financial measure. Some of these limitations include:•certain items excluded from EBITDA, adjusted EBITDA and distributable cash flow are significant components in understanding andassessing a company's financial performance, such as a company's cost of capital and tax structure;•EBITDA, adjusted EBITDA, and distributable cash flow do not reflect our cash expenditures or future requirements for capital expendituresor contractual commitments;•EBITDA, adjusted EBITDA, and distributable cash flow do not reflect changes in, or cash requirements for, our working capital needs;•although depreciation and amortization are noncash charges, the assets being depreciated and amortized will often have to be replaced inthe future, and EBITDA, adjusted EBITDA and distributable cash flow do not reflect any cash requirements for such replacements; and•our computations of EBITDA, adjusted EBITDA and distributable cash flow may not be comparable to other similarly titled measures ofother companies.We compensate for the limitations of EBITDA, adjusted EBITDA and distributable cash flows as analytical tools by reviewing the comparableGAAP financial measures, understanding the differences between the financial measures and incorporating these data points into our decision-making process.EBITDA, adjusted EBITDA or distributable cash flow should not be considered in isolation or as a substitute for analysis of our results as reportedunder GAAP. Because EBITDA, adjusted EBITDA and distributable cash flow may be defined differently by other companies in our industry, ourdefinitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishingtheir utility.68Table of ContentsNon-GAAP reconciliations items to note. The following items should be noted when reviewing our non-GAAP reconciliations:•Interest expense presented in the net income-basis non-GAAP reconciliation includes amortization of deferred loan costs while interestexpense presented in the cash flow-basis non-GAAP reconciliation is adjusted to exclude amortization of deferred loan costs. See theconsolidated statements of cash flows for additional information.•Depreciation and amortization includes the favorable and unfavorable gas gathering contract amortization expense reported in otherrevenues.•Adjustments related to MVC shortfall payments account for (i) the net increases or decreases in deferred revenue for MVC shortfallpayments and (ii) our inclusion of expected annual MVC shortfall payments. We include a proportional amount of these historical orexpected minimum volume commitment shortfall payments in each quarter prior to the quarter in which we actually receive the shortfallpayment. See Notes 2 and 3 to the consolidated financial statements for additional information.•Goodwill impairments recognized during 2015 and 2014 are discussed in the sections entitled "Results of Operations" and "CriticalAccounting Estimates—Recognition and Impairment of Long-Lived Assets" as well as Note 6 to the consolidated financial statements.•Long-lived asset impairments recognized during 2015 and 2014 are discussed in the sections entitled "Results of Operations" and "CriticalAccounting Estimates—Recognition and Impairment of Long-Lived Assets" as well as Note 4 to the consolidated financial statements.•The impact of purchase price adjustments reflects certain balances previously recognized in connection with the Predecessor's purchaseaccounting for the Legacy Grand River system that we wrote off during the fourth quarter of 2014. This write off was recognized in otherincome. See "Results of Operations—Piceance Basin" and Note 15 to the consolidated financial statements for additional information.•Senior notes interest adjustment represents the net of interest expense accrued and paid during the period. See "Liquidity and CapitalResources—Long-Term Debt" and Note 8 to the consolidated financial statements for additional information.•Maintenance capital expenditures 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.•As a result of accounting for our drop down transactions similar to a pooling of interests, EBITDA, adjusted EBITDA, and distributablecash flow reflect the historical operations, financial position and cash flows of contributed subsidiaries for the periods beginning with thedate that common control began and ending on the date that the respective drop down closed. See Notes 1 and 15 to the consolidatedfinancial statements for additional information.•EBITDA, adjusted EBITDA, distributable cash flow and net cash provided by operating activities include transaction costs. These unusualexpenses are settled in cash. For additional information, see "Results of Operations—Corporate" herein.69Table of ContentsNet Income-Basis Non-GAAP Reconciliation. The following table presents a reconciliation of net income to EBITDA, adjusted EBITDA anddistributable cash flow for the periods indicated. Year ended December 31, 2015 2014 2013 (In thousands)Reconciliation of net income to EBITDA, adjusted EBITDA and distributable cashflow: Net (loss) income$(186,809) $(14,734) $52,837Add: Interest expense48,616 40,159 19,173Income tax expense— 631 729Depreciation and amortization96,975 88,293 71,606Less: Interest income2 4 5Income tax benefit676 — —EBITDA$(41,896) $114,345 $144,340Add: Adjustments related to MVC shortfall payments(11,902) 26,565 17,025Unit-based compensation6,259 5,036 3,846Loss on asset sales42 442 113Long-lived asset impairment9,305 5,505 —Goodwill impairment248,851 54,199 —Less: Gain on asset sales214 — —Impact of purchase price adjustment— 1,185 —Adjusted EBITDA$210,445 $204,907 $165,324Add cash interest received2 4 5Less: Cash interest paid48,947 31,524 9,016Senior notes interest adjustment(1,421) 6,733 12,125Cash taxes paid— — 660Maintenance capital expenditures9,548 16,336 15,071Distributable cash flow$153,373 $150,318 $128,45770Table of ContentsCash Flow-Basis Non-GAAP Reconciliation. The following table presents a reconciliation of net cash provided by operating activities toEBITDA, adjusted EBITDA and distributable cash flow for the periods indicated. Year ended December 31, 2015 2014 2013 (In thousands)Reconciliation of net cash provided by operating activities to EBITDA, adjustedEBITDA and distributable cash flow: Net cash provided by operating activities$165,950 $154,997 $140,469Add: Interest expense, excluding deferred loan costs45,359 37,389 16,927Income tax expense— 631 729Impact of purchase price adjustments— 1,185 —Changes in operating assets and liabilities11,716 (14,671) (9,821)Gain on asset sales214 — —Less: Unit-based compensation6,259 5,036 3,846Interest income2 4 5Income tax benefit676 — — Loss on asset sales42 442 113Long-lived asset impairment9,305 5,505 —Goodwill impairment248,851 54,199 —EBITDA$(41,896) $114,345 $144,340Add: Adjustments related to MVC shortfall payments(11,902) 26,565 17,025Unit-based compensation6,259 5,036 3,846Loss on asset sales42 442 113Long-lived asset impairment9,305 5,505 —Goodwill impairment248,851 54,199 —Less: Gain on asset sales214 — —Impact of purchase price adjustment— 1,185 —Adjusted EBITDA$210,445 $204,907 $165,324Add cash interest received2 4 5Less: Cash interest paid48,947 31,524 9,016Senior notes interest adjustment(1,421) 6,733 12,125Cash taxes paid— — 660Maintenance capital expenditures9,548 16,336 15,071Distributable cash flow$153,373 $150,318 $128,457Liquidity and Capital ResourcesBased on the terms of our partnership agreement, we expect that we will distribute to our unitholders most of the cash generated by ouroperations. As a result, we expect to fund future capital expenditures from cash and cash equivalents on hand, cash flow generated from ouroperations, borrowings under our revolving credit facility and future issuances of equity and debt instruments.71Table of ContentsCapital Markets ActivityNovember 2013 Shelf Registration Statement. In October 2013, we filed a shelf registration statement with the SEC to register up to $1.2 billionof equity and debt securities in primary offerings as well as all of the 14,691,397 common units held by a subsidiary of Summit Investments inaccordance with our obligations under several registration rights agreements. In November 2013, the SEC declared our shelf registration statementeffective.In March 2014, we completed an underwritten public offering of 10,350,000 common units at a price of $38.75 per unit, of which 5,300,000common units were offered by the Partnership and 5,050,000 common units were offered by a subsidiary of Summit Investments. Concurrent withthe offering, our general partner made a capital contribution to maintain its 2% general partner interest. We used the proceeds from our primaryoffering of common units and the general partner capital contribution to fund a portion of the purchase of Red Rock Gathering.In September 2014, a subsidiary of Summit Investments completed an underwritten public offering of 4,347,826 SMLP common units. We did notreceive any proceeds from this offering.On May 13, 2015, we completed an underwritten public offering of 6,500,000 common units at a price of $30.75 per unit pursuant to an effectiveshelf registration statement on Form S-3 previously filed with the SEC (the "May 2015 Equity Offering"). On May 22, 2015, the underwritersexercised in full their option to purchase an additional 975,000 common units from us at a price of $30.75 per unit. Concurrent with bothtransactions, our general partner made a capital contribution to us to maintain its 2% general partner interest. We used the proceeds from the May13, 2015 transaction to partially fund the Polar and Divide Drop Down. We used $25.0 million of the $29.0 million proceeds from the exercise of theunderwriters' option to pay down our revolving credit facility. Following the May 2015 Equity Offering and the exercise of the underwriters' option,we can issue up to $464.8 million of debt and equity securities in primary offerings and 5,293,571 common units pursuant to this shelf registrationstatement.In June 2015, we executed an equity distribution agreement and filed a prospectus and a prospectus supplement with the SEC for the issuanceand sale from time to time of SMLP common units having an aggregate offering price of up to $150.0 million (the "June 2015 ATM Program").These sales will be made (i) pursuant to the terms of the equity distribution agreement between us and the sales agents named therein and (ii) bymeans of ordinary brokers' transactions at market prices, in block transactions or as otherwise agreed between us and the sales agents. Sales ofour common units may be made in negotiated transactions or transactions that are deemed to be "at-the-market offerings" as defined by SECRules. There were no transactions under the June 2015 ATM Program during the period from inception to December 31, 2015.July 2014 Shelf Registration Statement. In July 2014, we filed a registration statement with the SEC to issue an unlimited amount of debt andequity securities and shortly thereafter completed a public offering of $300.0 million aggregate principal 5.5% senior notes due 2022. We used theproceeds to repay a portion of the outstanding borrowings under our revolving credit facility.Private Offerings of Debt and Equity. In June 2013, we issued $300.0 million unregistered 7.5% senior unsecured notes and guarantees notesmaturing July 1, 2021 (the "7.5% senior notes") and used the net proceeds to partially fund the acquisition of Mountaineer Midstream. In March2014, the SEC declared our registration statement to exchange all of the unregistered 7.5% senior notes and guarantees for registered seniornotes and guarantees with substantially identical terms effective. In April 2014, the exchange period concluded with 100% of the unregisteredsenior notes being exchanged for registered notes.In June 2013, we issued common limited partner units and general partner interests to a subsidiary of Summit Investments to partially fund theBison Drop Down and the acquisition of Mountaineer Midstream.For additional information, see Notes 1, 8, 10 and 15 to the consolidated financial statements.DebtRevolving Credit Facility. We have a $700.0 million senior secured revolving credit facility. The revolving credit facility is secured by themembership interests of Summit Holdings and those of its subsidiaries. Substantially all of the assets of Summit Holdings and its subsidiaries arepledged as collateral under the revolving credit facility. The revolving credit facility, and Summit Holdings' obligations, are guaranteed by SMLPand each of its subsidiaries. As of December 31, 2015, the outstanding balance of the revolving credit facility was $344.0 million and the unusedportion totaled $356.0 million. As of December 31, 2015, we were in compliance with the covenants in the revolving credit facility. There were nodefaults or events of default during 2015.Senior Notes. In July 2014, Summit Holdings and its 100% owned finance subsidiary, Summit Midstream Finance Corp. ("Finance Corp.,"together with Summit Holdings, the "Co-Issuers") co-issued $300.0 million of 5.50% senior72Table of Contentsunsecured notes maturing August 15, 2022 (the "5.5% senior notes"). In June 2013, the Co-Issuers co-issued $300.0 million of 7.50% seniorunsecured notes maturing July 1, 2021 (the "7.5% senior notes"). The 7.5% senior notes were initially sold in reliance on Rule 144A andRegulation S under the Securities Act. Effective as of April 7, 2014, all of the holders of our 7.5% senior notes exchanged their unregistered 7.5%senior notes and the guarantees of those notes for identical registered notes and guarantees. There were no defaults or events of default during2014 on either series of senior notes.For additional information on our revolving credit facility and senior notes, see Note 8 to the consolidated financial statements.Cash FlowsThe components of the net change in cash and cash equivalents were as follows: Year ended December 31, 2015 2014 2013 (In thousands)Net cash provided by operating activities$165,950 $154,997 $140,469Net cash used in investing activities(406,402) (536,367) (592,393)Net cash provided by financing activities233,359 387,517 460,947Net change in cash and cash equivalents$(7,093) $6,147 $9,023Operating activities. Cash flows from operating activities increased by $11.0 million for the year ended December 31, 2015 primarily due to cashreceived as a result of MVCs. The impact of these cash receipts was largely offset by an increase in interest due to the 5.5% senior notes andother operating activities.Cash flows from operating activities increased by $14.5 million for the year ended December 31, 2014 largely due to cash received as a result ofMVCs.Investing activities. Cash flows used in investing activities for the year ended December 31, 2015 were related primarily to: (i) the Polar andDivide Drop Down, (ii) the ongoing expansion of compression capacity on the Bison Midstream system, (iii) ongoing expansion of the Polar andDivide system, including the Stampede Lateral and (iv) pipeline construction projects to connect new receipt points on the Grand River and BisonMidstream systems.Cash flows used in investing activities for the year ended December 31, 2014 primarily reflect the Partnership's acquisition of Red Rock Gatheringfrom a subsidiary of Summit Investments and build out of the Polar and Divide system. Additional expenditures for the year ended December 31,2014 primarily reflect construction of a processing plant on the Grand River system, projects to expand compression capacity on the BisonMidstream system, adding pipeline on the Mountaineer Midstream system, the February 2014 commissioning of a new natural gas treating facilityon the DFW Midstream system and the purchase of the Lonestar assets.Cash flows used in investing activities for the year ended December 31, 2013 were largely due to the acquisitions of Bison Midstream andMountaineer Midstream and construction of the Polar and Divide system. Additional expenditures in 2013 reflect the construction of seven miles ofnew gathering pipeline across the DFW Midstream system and the acquisition of previously leased compression assets on the Grand Riversystem. We also commissioned a new compressor unit on the DFW Midstream system in January 2013. Development activities also includedconstruction projects to connect new receipt points on the Bison Midstream and DFW Midstream systems and to expand compression capacity onthe Bison Midstream system. We also began construction on a new 150 gallon per minute natural gas treating facility on the DFW Midstreamsystem, which was commissioned in the first quarter of 2014.Financing activities. Details of cash flows provided by financing activities were as follows:Net cash used in financing activities for the year ended December 31, 2015 was primarily composed of the following:•Net proceeds from an offering of common units in May 2015, which were used to partially fund the Polar and Divide Drop Down;•Net borrowings under our revolving credit facility, including $92.5 million to partially fund the Polar and Divide Drop Down; and•Distributions declared and paid in 2015.73Table of ContentsNet cash provided by financing activities for the year ended December 31, 2014 was primarily composed of the following:•Proceeds from the 5.5% senior notes issuance, the net of which was used to pay down our revolving credit facility. We incurred loan costsof $5.1 million in connection with their issuance which will be amortized over the life of the notes;•Borrowings of $100.0 million under our revolving credit facility to partially fund the Red Rock Drop Down;•Net proceeds from an offering of common units in March 2014, which were used to partially fund the Red Rock Drop Down;•Distributions declared and paid in 2014; and•Cash advances to support the buildout of the Polar and Divide system.Net cash provided by financing activities for the year ended December 31, 2013 was primarily composed of the following:•Distributions declared and paid in 2013;•Borrowings under our revolving credit facility, of which $200.0 million was used to partially fund the Bison Drop Down and $110.0 millionwas used to partially fund the Mountaineer Acquisition;•Proceeds from the 7.5% senior notes issuance, the net of which was used to pay down our revolving credit facility. We incurred loan costsof $7.4 million in connection with the senior notes issuance which will be amortized over the life of the notes;•Payments of $294.2 million on our revolving credit facility, all of which was funded by the 7.5% senior notes issuance;•Issuance of $98.0 million of common units and $2.0 million of general partner interests to Summit Investments for cash to partially fundthe Mountaineer Acquisition; and•Cash advances to support the buildout of the Polar and Divide system.Contractual ObligationsThe table below summarizes our contractual obligations as of December 31, 2015: Total Less than 1 year 1-3 years 3-5 years More than 5years (In thousands)Long-term debt and interest payments (1)$1,229,089 $50,859 $444,730 $78,000 $655,500Purchase obligations (2)22,949 21,661 1,188 100 —Total contractual obligations$1,252,038 $72,520 $445,918 $78,100 $655,500__________(1) For the purpose of calculating future interest on the revolving credit facility, assumes no change in balance or rate from December 31, 2015. Includes a0.50% commitment fee on the unused portion of the revolving credit facility. See Note 8 to the consolidated financial statements for additional information.(2) Represents agreements to purchase goods or services that are enforceable and legally binding.Operating leases. A substantial majority of the operating leases that support our operations have been entered into by Summit Investments withthe associated rent expense allocated to us. Future minimum lease payments associated with operating leases in the Partnership's name areimmaterial. See Note 14 to the consolidated financial statements for additional information.74Table of ContentsCapital RequirementsThe table below summarizes our capital expenditures by reportable segment and in total for the years ended December 31. Year ended December 31, 2015 2014 2013 (In thousands)Capital expenditures: Marcellus Shale$1,306 $33,866 $1,822Williston Basin90,234 139,422 99,983Barnett Shale6,875 14,567 29,534Piceance Basin19,263 32,505 50,709Total reportable segment capital expenditures117,678 220,360 182,048Corporate429 460 930Total capital expenditures$118,107 $220,820 $182,978Our business is capital-intensive, requiring significant investment for the maintenance of existing gathering systems and the acquisition orconstruction and development of new gathering systems and other midstream assets and facilities. Our partnership agreement requires that wecategorize our capital expenditures as either:•maintenance capital expenditures, which are cash expenditures (including expenditures for the addition or improvement to, or thereplacement of, our capital assets or for the acquisition of existing, or the construction or development of new, capital assets) made tomaintain 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 increaseour operating income or operating capacity over the long term.For the year ended December 31, 2015, SMLP recorded total capital expenditures of $118.1 million, which included $9.5 million of maintenancecapital expenditures.We anticipate that we will continue to make significant expansion capital expenditures in the future. Consequently, our ability to develop andmaintain sources of funds to meet our capital requirements is critical to our ability to meet our growth objectives. We expect that our futureexpansion capital expenditures will be funded by borrowings under the revolving credit facility and the issuance of debt and equity instruments.We believe that our existing $700.0 million revolving credit facility, which had $356.0 million of available capacity at December 31, 2015, along withcommitments to increase its borrowing capacity by $550.0 million contingent upon and concurrent with the Initial Close of the 2016 Drop Down(see Note 8 to the consolidated financial statements), together with financial support from our Sponsor and/or access to the debt and equity capitalmarkets, will be adequate to finance our acquisition strategy for the foreseeable future without adversely impacting our liquidity or our ability tomake quarterly cash distributions to our unitholders.Distributions, Including IDRsBased on the terms of our partnership agreement, we expect to distribute most of the cash generated by our operations to our unitholders. Withrespect to our payment of IDRs to the general partner, we reached the second target distribution in connection with the distribution declared inrespect of the fourth quarter of 2013. We reached the third target distribution in connection with the distribution declared in respect of the secondquarter of 2014. For additional information, see "Our Cash Distribution Policy and Restrictions on Distributions" in Item 5. Market for Registrant’sCommon Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities and Note 10 to the consolidated financial statements.Credit and Counterparty Concentration RisksWe examine the creditworthiness of counterparties to whom we extend credit and manage our exposure to credit risk through credit analysis, creditapproval, credit limits and monitoring procedures, and for certain transactions, we may request letters of credit, prepayments or guarantees.75Table of ContentsGiven the current environment, certain of our customers may be temporarily unable to meet their current obligations. While this may causedisruption to cash flows, we believe that we are properly positioned to deal with the potential disruption because the vast majority of our gatheringassets are strategically positioned at the beginning of the midstream value chain. The majority of our infrastructure is connected directly to ourcustomer’s wellheads and pad sites, which means our gathering systems are typically the first third-party infrastructure through which ourcustomer’s commodities flow and, in many cases, the only way for our customers to get their production to market.We estimate the quarterly impact of expected MVC shortfall payments for inclusion in our calculation of adjusted EBITDA. As such, we haveexposure due to nonperformance under our MVC contracts whereby a customer, who was not meeting their MVCs, does not have the wherewithalto make its MVC shortfall payments when they become due. We typically receive payment for all prior-year MVC shortfall billings in the quarterimmediately following billing. Therefore, our exposure to risk of nonperformance is limited to and accumulates during the current year-to-datecontracted measurement period. The components of adjustments related to MVC shortfall payments by reportable segment for the year endedDecember 31, 2015 follow. Williston Basin BarnettShale PiceanceBasin Total (In thousands)Adjustments related to MVC shortfall payments: Net change in deferred revenue for MVC shortfall payments (1)$11,870 $(1,700) $(21,623) $(11,453)Expected MVC shortfall payments (2)— (482) 33 (449)Total adjustments related to MVC shortfall payments$11,870 $(2,182) $(21,590) $(11,902)__________(1) See Notes 3 and 7 for additional information on the changes in deferred revenue.(2) As of December 31, 2015, accounts receivable included $40.2 million of total shortfall payment billings, of which $12.7 million related to shortfall billingsassociated with MVC arrangements that can be utilized to offset gathering fees in future periods.For additional information, see Notes 2, 3, 7 and 9 to the consolidated financial statements.Off-Balance Sheet ArrangementsWe had no off-balance sheet arrangements as of or during the year ended December 31, 2015.Critical Accounting EstimatesWe prepare our financial statements in accordance with GAAP. These principles are established by the Financial Accounting Standards Board. Weemploy methods, estimates and assumptions based on currently available information when recording transactions resulting from businessoperations. Our significant accounting policies are described in Note 2 to the consolidated financial statements.The estimates that we deem to be most critical to an understanding of our financial position and results of operations are those related todetermination of fair value and recognition of deferred revenue. The preparation and evaluation of these critical accounting estimates involve theuse of various assumptions developed from management's analyses and judgments. Subsequent experience or use of other methods, estimatesor assumptions could produce significantly different results. Our critical accounting estimates are as follows:Recognition and Impairment of Long-Lived AssetsOur long-lived assets include property, plant and equipment, our amortizing intangible assets and goodwill.Property, Plant and Equipment and Amortizing Intangible Assets. As of December 31, 2015, we had net property, plant and equipment with acarrying value of approximately $1.5 billion and net amortizing intangible assets with a carrying value of approximately $438.1 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 carryingvalue of the asset to its estimated fair value. We test assets for impairment when events or circumstances indicate that the carrying value of along-lived asset may not be recoverable as well as in connection with any goodwill impairment evaluations.76Table of ContentsWith respect to property, plant and equipment and our amortizing intangible assets, the carrying value of a long-lived asset is not recoverable if thecarrying value exceeds the sum of the undiscounted cash flows expected to result from the asset's use and eventual disposal. In this situation, werecognize an impairment loss equal to the amount by which the carrying value exceeds the asset's fair value. We determine fair value using anincome approach in which we discount the asset's expected future cash flows to reflect the risk associated with achieving the underlying cashflows. Any impairment determinations, including those recognized in 2015 and 2014 and disclosed in Note 4 to the consolidated financialstatements, involve significant assumptions and judgments. Differing assumptions regarding any of these inputs could have a significant effect onthe various valuations. As such, the fair value measurements utilized within these estimates are classified as non-recurring Level 3 measurementsin the fair value hierarchy because they are not observable from objective sources. Due to the volatility of the inputs used, we cannot predict thelikelihood of any future impairment.For additional information, see Notes 2, 4 and 5 to the consolidated financial statements.Goodwill. We evaluate goodwill for impairment annually on September 30 and whenever events or circumstances indicate that it is more likelythan not that the fair value of a reporting unit is less than its carrying value, including goodwill.2014 Impairment Evaluations. We performed our 2014 annual goodwill impairment analysis as of September 30 and concluded that none of ourgoodwill had been impaired.During the latter part of the fourth quarter of 2014, the declines in prices for natural gas, NGLs and crude oil accelerated, negatively impactingproducers in each of our areas of operation. As a result, we considered whether any of our goodwill could have been impaired. In connection withthis assessment, we concluded that a fourth quarter triggering event had occurred which required that we test the goodwill associated with ourPolar and Divide and Bison Midstream reporting units for impairment as of December 31, 2014. See Notes 2 and 6 for additional information.2015 Impairment Evaluations. We performed our 2015 annual goodwill impairment analysis as of September 30 and concluded that none of ourgoodwill had been impaired.During the latter part of the fourth quarter of 2015 and the early part of the first quarter of 2016, the declines in forward prices for natural gas, NGLsand crude oil accelerated significantly. As a result, the energy sector's public debt and equity market experienced increased volatility, particularlyfor comparable companies operating in the midstream services sector. Additionally, during this period, the values of our publicly traded equity anddebt instruments decreased as did those of comparable midstream companies. Due to (i) the increased market volatility, (ii) the decrease inmarket values of comparable companies, (iii) the continued trend of falling commodity prices and (iv) the finalization of our annual financial andoperating plans which took into account changes resulting from expected levels of drilling activity, we concluded that a triggering event occurredwhich required that we test the goodwill associated with our Grand River and Polar and Divide reporting units for impairment as of December 31,2014. See Notes 2 and 6 for additional information.Minimum Volume CommitmentsCertain of our gas gathering agreements provide for a monthly, quarterly or annual MVC from our customers. As of December 31, 2015, we hadMVCs totaling 1.2 Bcfe/d through 2020.Under these MVCs, our customers agree to ship and/or process a minimum volume of production on our gathering systems or to pay a minimummonetary amount over certain periods during the term of the MVC. A customer must make a shortfall payment to us at the end of the contractedmeasurement period if its actual throughput volumes are less than its MVC for that period. Certain customers are entitled to utilize shortfallpayments to offset gathering fees in one or more subsequent contracted measurement periods to the extent that such customer's throughputvolumes in a subsequent contracted measurement period exceed its MVC for that period.We recognize customer billings for obligations under their MVCs as revenue when the obligations are billable under the contract and the customerdoes not have the right to utilize shortfall payments to offset gathering fees in excess of its MVCs in subsequent periods.We billed $58.2 million of MVC shortfall payments to customers that did not meet their MVCs during 2015. For those customers that do not havecredit banking mechanisms in their gathering agreements, or have no ability to use MVC shortfall payments as credits, the MVC shortfallpayments from these customers are accounted for as gathering revenue in the period that they are earned. We recognized $39.5 million ofgathering revenue due to the credit bank expiration of previous MVC shortfall payments. Of the gathering revenue, $37.1 million is related to thedeferred revenue recognition associated with a certain Piceance Basin customer for which we determined that it77Table of Contentswould be remote that it could ship volumes in excess of its future MVC as an offset to future gathering fees. As such, the deferred revenueassociated with this customer, as reflected on the balance sheet, was recognized as revenue on the income statement.MVC shortfall payment adjustments in 2015 totaled $(0.4) million and included adjustments related to future anticipated shortfall payments fromcertain customers in the Piceance Basin, Williston Basin and Barnett Shale segments. The net impact of our MVC shortfall payment mechanismsincreased adjusted EBITDA by $57.7 million in 2015.The following table presents the impact of our MVC activity by reportable segment during the year ended December 31, 2015. Year ended December 31, 2015 MVC billings Gathering revenue Adjustmentsto MVC shortfallpayments Net impactto adjusted EBITDA (In thousands)Net change in deferred revenue: Williston Basin$11,897 $27 $11,870 $11,897Barnett Shale677 2,377 (1,700) 677Piceance Basin15,508 37,131 (21,623) 15,508Total change in deferred revenue$28,082 $39,535 $(11,453) $28,082 MVC shortfall payment adjustments: Marcellus Shale$3,237 $3,237 $— $3,237Williston Basin— — — —Barnett Shale1,142 1,142 (482) 660Piceance Basin25,704 25,704 33 25,737Total MVC shortfall payment adjustments$30,083 $30,083 $(449) $29,634 Total$58,165 $69,618 $(11,902) $57,716Deferred Revenue. We record customer billings for obligations under their MVCs as deferred revenue when the customer has the right to utilizeshortfall payments to offset gathering or processing fees in subsequent periods. We recognize deferred revenue under these arrangements inrevenue once all contingencies or potential performance obligations associated with the related volumes have either (i) been satisfied through thegathering or processing of future excess volumes of natural gas, or (ii) expired (or lapsed) through the passage of time pursuant to the terms of theapplicable natural gas gathering agreement. We also recognize deferred revenue when it is determined that a given amount of MVC shortfallpayments cannot be recovered by offsetting gathering or processing fees in subsequent contracted measurement periods. In making thisdetermination, we consider both quantitative and qualitative facts and circumstances, including, but not limited to, contract terms, capacity of theassociated pipeline or receipt point and/or expectations regarding future investment, drilling and production.We classify deferred revenue as a current liability for arrangements where the expiration of a customer's right to utilize shortfall payments is twelvemonths or less. We classify deferred revenue as noncurrent for arrangements where the expiration of the right to utilize shortfall payments and ourestimate of its potential utilization is more than 12 months. As of December 31, 2015, current deferred revenue totaled $0.7 million. Noncurrentdeferred revenue totaled $45.5 million at December 31, 2015 and represents amounts that provide these customers the ability to offset theirgathering fees, as determined by the MVC contract, to the extent that their throughput volumes exceed their MVC.Adjustments for MVC Shortfall Payments. Adjustments related to MVC shortfall payments account for:•the net increases or decreases in deferred revenue for MVC shortfall payments and•our inclusion of expected annual MVC shortfall payments. We include a proportional amount of these historical or expected MVC shortfallpayments in our calculation of segment adjusted EBITDA each quarter prior to the quarter in which we actually recognize the shortfallpayment. These adjustments have not been billed to our customers and are not recognized in our consolidated financial statements.78Table of ContentsWe estimate expected annual MVC shortfall payments based on assumptions including, but not limited to, contract terms, historical volumethroughput data and expectations regarding future investment, drilling and production.For additional information, see Notes 2, 3 and 7 to the consolidated financial statements and the "Results of Operations" and "Liquidity and CapitalResources—Credit and Counterparty Concentration Risks" sections herein.Forward-Looking StatementsInvestors are cautioned that certain statements contained in this report as well as in periodic press releases and certain oral statements made byour officials during our presentations are “forward-looking” statements. Forward-looking statements include, without limitation, any statement thatmay project, indicate or imply future results, events, performance or achievements, and may contain the words “expect,” “intend,” “plan,”“anticipate,” “estimate,” “believe,” “will be,” “will continue,” “will likely result,” and similar expressions, or future conditional verbs such as “may,”“will,” “should,” “would,” and “could.” In addition, any statement concerning future financial performance (including future revenues, earnings orgrowth rates), ongoing business strategies or prospects, and possible actions taken by us, Summit Investments or our Sponsor, are also forward-looking statements. These forward-looking statements involve external risks and uncertainties, including, but not limited to, those described inItem 1A. Risk Factors included in this report.Forward-looking statements are based on current expectations and projections about future events and are inherently subject to a variety of risksand uncertainties, many of which are beyond the control of our management team. All forward-looking statements in this report and subsequentwritten and oral forward-looking statements attributable to us, or to persons acting on our behalf, are expressly qualified in their entirety by thecautionary statements in this paragraph. These risks and uncertainties include, among others:•fluctuations in natural gas, NGLs and crude oil prices;•the extent and success of drilling efforts, as well as the extent and quality of natural gas and crude oil volumes produced within proximityof our assets;•failure or delays by our customers in achieving expected production in their natural gas, crude oil and produced water projects;•competitive conditions in our industry and their impact on our ability to connect hydrocarbon supplies to our gathering and processingassets or systems;•actions or inactions taken or non-performance by third parties, including suppliers, contractors, operators, processors, transporters andcustomers, including the inability or failure of our shipper customers to meet their financial obligations under our gathering agreements andour ability to enforce the terms and conditions of certain of our gathering agreements in the event of a bankruptcy of one or more of ourcustomers;•our ability to acquire any assets owned by third parties, which is subject to a number of factors, including prevailing conditions and outlookin the natural gas, NGL and crude oil industries and markets, and our ability to obtain financing on acceptable terms from the credit and/orcapital markets or other sources;•our ability to consummate acquisitions, successfully integrate the acquired businesses, realize any cost savings and other synergies fromany acquisition;•the ability to attract and retain key management personnel;•commercial bank and capital market conditions and the potential impact of changes or disruptions in the credit and/or capital markets;•changes in the availability and cost of capital, and the results of our financing efforts, including availability of funds in the credit and/orcapital markets;•restrictions placed on us by the agreements governing our debt instruments;•the availability, terms and cost of downstream transportation and processing services;•natural disasters, accidents, weather-related delays, casualty losses and other matters beyond our control;•operational risks and hazards inherent in the gathering, treating and/or processing of natural gas, crude oil and produced water;79Table of Contents•weather conditions and seasonal trends;•timely receipt of necessary government approvals and permits, our ability to control the costs of construction, including costs of materials,labor and rights-of-way and other factors that may impact our ability to complete projects within budget and on schedule;•the effects of existing and future laws and governmental regulations, including environmental, safety and climate change requirements;•the effects of litigation;•changes in general economic conditions; and•certain factors discussed elsewhere in this report.Developments in any of these areas could cause actual results to differ materially from those anticipated or projected or cause a significantreduction in the market price of our common units and senior notes.The foregoing list of risks and uncertainties may not contain all of the risks and uncertainties that could affect us. In addition, in light of these risksand uncertainties, the matters referred to in the forward-looking statements contained in this document may not in fact occur. Accordingly, unduereliance should not be placed on these statements. We undertake no obligation to publicly update or revise any forward-looking statements as aresult of new information, future events or otherwise, except as otherwise required by law.Item 7A. Quantitative and Qualitative Disclosures About Market Risk.Interest Rate RiskOur current interest rate risk exposure is largely related to our debt portfolio. As of December 31, 2015, we had $600.0 million of fixed-rate seniornotes and $344.0 million of variable rate debt (see Note 8 to the consolidated financial statements for additional information). While existing fixed-rate debt mitigates the downside impact of fluctuations in interest rates, future issuances of long-term debt could be impacted by increases ininterest rates, which could result in higher overall interest costs. In addition, the borrowings under our revolving credit facility, which have avariable interest rate, also expose us to the risk of increasing interest rates. For the year ended December 31, 2015, a hypothetical 1.0% increase(decrease) in interest rates would have increased (decreased) our interest expense by approximately $2.7 million assuming no changes in amountsdrawn or other variables under our revolving credit facility or senior notes.Commodity Price RiskWe currently generate a substantial majority of our revenues pursuant to primarily long-term and fee-based gas gathering agreements, many ofwhich include MVCs and areas of mutual interest. Our direct commodity price exposure relates to (i) our sale of physical natural gas we retain fromour DFW Midstream customers, (ii) our procurement of electricity to operate our electric-drive compression assets on the DFW Midstream system,(iii) the sale of condensate volumes that we retain on the Grand River system and (iv) the sale of processed natural gas and natural gas liquidspursuant to our percent-of-proceeds contracts with certain of our customers on the Bison Midstream and Grand River systems. Our gas gatheringagreements with our DFW Midstream customers permit us to retain a certain quantity of natural gas that we sell to offset the power costs we incurto operate our electric-drive compression assets. Our gas gathering agreements with our Grand River customers permit us to retain condensatevolumes from the Grand River system gathering lines. We manage our direct exposure to natural gas and power prices through the use of forwardpower purchase contracts with wholesale power providers that require us to purchase a fixed quantity of power at a fixed heat rate based onprevailing natural gas prices on the Waha Hub Index. Because we also sell our retainage gas at prices that are based on the Waha Hub Index, wehave effectively fixed the relationship between our compression electricity expense and natural gas sales. We do not enter into risk managementcontracts for speculative purposes.80Table of ContentsItem 8. Financial Statements and Supplementary Data.Report of Independent Registered Public Accounting Firm82Consolidated Balance Sheets as of December 31, 2015 and 201483Consolidated Statements of Operations for the years ended December 31, 2015, 2014, and 201384Consolidated Statements of Partners' Capital for the years ended December 31, 2015, 2014, and 201385Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014, and 201388Notes to Consolidated Financial Statements9081Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Board of Directors of Summit Midstream GP, LLC and the unitholders of Summit Midstream Partners, LPThe Woodlands, TexasWe have audited the accompanying consolidated balance sheets of Summit Midstream Partners, LP and subsidiaries (the “Partnership”) as ofDecember 31, 2015 and 2014, and the related consolidated statements of operations, partners’ capital and cash flows for each of the three yearsin the period ended December 31, 2015. These financial statements are the responsibility of the Partnership's management. Our responsibility is toexpress an opinion on these financial statements based on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide a reasonable basis for our opinion.In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Summit Midstream Partners,LP and subsidiaries as of December 31, 2015 and 2014, and the results of their operations and their cash flows for each of the three years in theperiod ended December 31, 2015, in conformity with accounting principles generally accepted in the United States of America.As discussed in Note 3 to the consolidated financial statements, the disclosures in the accompanying financial statements have beenretrospectively adjusted for a change in the composition of reportable segments.We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Partnership'sinternal control over financial reporting as of December 31, 2015, based on the criteria established in Internal Control - Integrated Framework (2013)issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2016 expressed anunqualified opinion on the Partnership's internal control over financial reporting./s/ Deloitte & Touche LLPAtlanta, GeorgiaFebruary 26, 201682Table of ContentsSUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS December 31, 2015 2014 (In thousands)Assets Current assets: Cash and cash equivalents$19,411 $26,504Accounts receivable84,022 89,201Other current assets3,210 3,517Total current assets106,643 119,222Property, plant and equipment, net1,463,802 1,414,350Intangible assets, net438,093 477,734Goodwill16,211 265,062Other noncurrent assets15,782 17,353Total assets$2,040,531 $2,293,721 Liabilities and Partners' Capital Current liabilities: Trade accounts payable$18,971 $24,855Due to affiliate1,149 2,711Deferred revenue677 2,377Ad valorem taxes payable9,890 9,118Accrued interest17,483 18,858Other current liabilities11,464 13,550Total current liabilities59,634 71,469Long-term debt944,000 808,000Deferred revenue45,486 55,239Other noncurrent liabilities7,169 7,292Total liabilities1,056,289 942,000Commitments and contingencies (Note 14) Common limited partner capital (42,063 units issued and outstanding at December 31, 2015 and 34,427units issued and outstanding at December 31, 2014)744,977 649,060Subordinated limited partner capital (24,410 units issued and outstanding at December 31, 2015 and 2014)213,631 293,153General partner interests (1,355 units issued and outstanding at December 31, 2015 and 1,201 unitsissued and outstanding at December 31, 2014)25,634 24,676Summit Investments' equity in contributed subsidiaries— 384,832Total partners' capital984,242 1,351,721Total liabilities and partners' capital$2,040,531 $2,293,721The accompanying notes are an integral part of these consolidated financial statements.83Table of ContentsSUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS Year ended December 31, 2015 2014 2013 (In thousands, except per-unit amounts)Revenues: Gathering services and related fees$310,829 $255,211 $213,979Natural gas, NGLs and condensate sales42,079 97,094 88,185Other revenues18,411 20,398 21,522Total revenues371,319 372,703 323,686Costs and expenses: Cost of natural gas and NGLs31,398 72,415 68,037Operation and maintenance87,285 88,927 77,114General and administrative36,544 38,269 32,273Transaction costs790 730 2,841Depreciation and amortization96,189 87,349 70,574(Gain) loss on asset sales, net(172) 442 113Long-lived asset impairment9,305 5,505 —Goodwill impairment248,851 54,199 —Total costs and expenses510,190 347,836 250,952Other income2 1,189 5Interest expense(48,616) (40,159) (19,173)(Loss) income before income taxes(187,485) (14,103) 53,566Income tax benefit (expense)676 (631) (729)Net (loss) income$(186,809) $(14,734) $52,837Less net income attributable to Summit Investments5,403 9,258 9,253Net (loss) income attributable to SMLP(192,212) (23,992) 43,584Less net (loss) income attributable to general partner, including IDRs3,398 3,125 1,035Net (loss) income attributable to limited partners$(195,610) $(27,117) $42,549 (Loss) earnings per limited partner unit: Common unit – basic$(3.20) $(0.49) $0.86Common unit – diluted$(3.20) $(0.49) $0.86Subordinated unit – basic and diluted$(2.88) $(0.44) $0.79 Weighted-average limited partner units outstanding: Common units – basic39,217 33,311 26,951Common units – diluted39,217 33,311 27,101Subordinated units – basic and diluted24,410 24,410 24,410The accompanying notes are an integral part of these consolidated financial statements.84Table of ContentsSUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL Partners' capital SummitInvestments'equity incontributedsubsidiaries Limited partners General partner Common Subordinated Total (In thousands)Partners' capital, January 1, 2013$418,856 $380,169 $20,222 $211,001 $1,030,248Net income22,311 20,238 1,035 9,253 52,837Distributions to unitholders(46,286) (42,107) (1,803) — (90,196)Unit-based compensation2,999 — — — 2,999Consolidation of Bison Midstream net assets— — — 303,168 303,168Contribution from Summit Investments to BisonMidstream— — — 2,229 2,229Purchase of Bison Midstream47,936 — 978 (248,914) (200,000)Contribution of net assets from Summit Investments inexcess of consideration paid for Bison Midstream28,558 26,846 1,131 (56,535) —Issuance of units in connection with the MountaineerAcquisition98,000 — 2,000 — 100,000Consolidation of Polar Midstream net assets— — — 216,105 216,105Class B membership interest unit-based compensation17 — — 830 847Repurchase of DFW Net Profits Interests(5,859) (5,859) (239) — (11,957)Cash advance from Summit Investments to contributedsubsidiaries, net— — — 72,745 72,745Capitalized interest allocated to contributed subsidiariesfrom Summit Investments— — — 2,046 2,046Expenses paid by Summit Investments on behalf ofcontributed subsidiaries— — — 11,964 11,964Capital expenditures paid by Summit Investments onbehalf of contributed subsidiaries— — — 52 52Partners' capital, December 31, 2013$566,532 $379,287 $23,324 $523,944 $1,493,08785Table of ContentsSUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL(continued) Partners' capital SummitInvestments'equity incontributedsubsidiaries Limited partners General partner Common Subordinated Total (In thousands)Partners' capital, December 31, 2013$566,532 $379,287 $23,324 $523,944 $1,493,087Net (loss) income(15,948) (11,169) 3,125 9,258 (14,734)Distributions to unitholders(67,658) (49,796) (4,770) — (122,224)Unit-based compensation4,696 — — — 4,696Tax withholdings on vested SMLP LTIP awards(656) — — — (656)Issuance of common units, net of offering costs197,806 — — — 197,806Contribution from general partner— — 4,235 — 4,235Purchase of Red Rock Gathering— — — (307,941) (307,941)Excess of purchase price over acquired carrying value ofRed Rock Gathering(37,910) (26,891) (1,323) 66,124 —Assets contributed to Red Rock Gathering from SummitInvestments2,426 1,722 85 — 4,233Cash advance from Summit Investments to contributedsubsidiaries, net— — — 81,421 81,421Expenses paid by Summit Investments on behalf ofcontributed subsidiaries— — — 10,483 10,483Capitalized interest allocated to contributed subsidiariesfrom Summit Investments— — — 606 606Capital expenditures paid by Summit Investments onbehalf of contributed subsidiaries— — — 597 597Class B membership interest unit-based compensation— — — 340 340Repurchase of SMLP LTIP units(228) — — — (228)Partners' capital, December 31, 2014$649,060 $293,153 $24,676 $384,832 $1,351,72186Table of ContentsSUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL(continued) Partners' capital SummitInvestments'equity incontributedsubsidiaries Limited partners General partner Common Subordinated Total (In thousands)Partners' capital, December 31, 2014$649,060 $293,153 $24,676 $384,832 $1,351,721Net (loss) income(123,817) (71,793) 3,398 5,403 (186,809)Distributions to unitholders(86,880) (55,410) (9,784) — (152,074)Unit-based compensation6,174 — — — 6,174Tax withholdings on vested SMLP LTIP awards(1,616) — — — (1,616)Issuance of common units, net of offering costs221,977 — — — 221,977Contribution from general partner— — 4,737 — 4,737Purchase of Polar and Divide— — — (285,677) (285,677)Excess of acquired carrying value over considerationpaid for Polar and Divide80,079 47,681 2,607 (130,367) —Cash advance from Summit Investments to contributedsubsidiaries, net— — — 21,719 21,719Expenses paid by Summit Investments on behalf ofcontributed subsidiaries— — — 3,084 3,084Capitalized interest allocated from Summit Investmentsto contributed subsidiaries— — — 921 921Class B membership interest unit-based compensation— — — 85 85Partners' capital, December 31, 2015$744,977 $213,631 $25,634 $— $984,242The accompanying notes are an integral part of these consolidated financial statements.87Table of ContentsSUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS Year ended December 31, 2015 2014 2013 (In thousands)Cash flows from operating activities: Net (loss) income$(186,809) $(14,734) $52,837Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization96,975 88,293 71,606Amortization of deferred loan costs3,257 2,770 2,246Unit-based compensation6,259 5,036 3,846(Gain) loss on asset sales, net(172) 442 113Long-lived asset impairment9,305 5,505 —Goodwill impairment248,851 54,199 —Purchase accounting adjustment— (1,185) —Changes in operating assets and liabilities: Accounts receivable5,180 (19,255) (20,490)Trade accounts payable(2,770) (684) (3,419)Due to affiliate1,377 (883) 1,427Change in deferred revenue(11,453) 26,378 16,685Ad valorem taxes payable772 743 (11)Accrued interest(1,375) 6,714 12,128Other, net(3,447) 1,658 3,501Net cash provided by operating activities165,950 154,997 140,469Cash flows from investing activities: Capital expenditures(118,107) (220,820) (182,978)Proceeds from asset sales323 325 585Acquisition of gathering systems— (10,872) (210,000)Acquisitions of gathering systems from affiliate(288,618) (305,000) (200,000)Net cash used in investing activities(406,402) (536,367) (592,393)88Table of ContentsSUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(continued) Year ended December 31, 2015 2014 2013 (In thousands)Cash flows from financing activities: Distributions to unitholders(152,074) (122,224) (90,196)Borrowings under revolving credit facility187,000 237,295 380,950Repayments under revolving credit facility(51,000) (315,295) (294,180)Deferred loan costs(277) (5,320) (10,608)Proceeds from issuance of common units, net221,977 197,806 —Contribution from general partner4,737 4,235 2,229Cash advance from Summit Investments to contributed subsidiaries, net21,719 81,421 72,745Expenses paid by Summit Investments on behalf of contributed subsidiaries3,084 10,483 11,964Issuance of senior notes— 300,000 300,000Repurchase of equity-based compensation awards— (228) (11,957)Issuance of units to affiliate in connection with the Mountaineer Acquisition— — 100,000Other, net(1,807) (656) —Net cash provided by financing activities233,359 387,517 460,947Net change in cash and cash equivalents(7,093) 6,147 9,023Cash and cash equivalents, beginning of period26,504 20,357 11,334Cash and cash equivalents, end of period$19,411 $26,504 $20,357 Supplemental cash flow disclosures: Cash interest paid$48,947 $31,524 $9,016Less capitalized interest3,137 3,778 6,255Interest paid (net of capitalized interest)$45,810 $27,746 $2,761 Cash paid for taxes$— $— $660 Noncash investing and financing activities: Capital expenditures in trade accounts payable (period-end accruals)$14,962 $18,076 $29,860Excess of acquired carrying value over consideration paid for Polar and Divide130,367 — —Capitalized interest allocated to contributed subsidiaries from Summit Investments921 606 2,046Capital expenditures paid by Summit Investments on behalf of contributed subsidiaries— 597 52Excess of consideration paid over acquired carrying value of Red Rock Gathering— (66,124) —Assets contributed to Red Rock Gathering from Summit Investments— 4,233 —Issuance of units to affiliate to partially fund the Bison Drop Down— — 48,914Contribution of net assets from Summit Investments in excess of consideration paid for BisonMidstream— — 56,535The accompanying notes are an integral part of these consolidated financial statements.89Table of ContentsSUMMIT MIDSTREAM PARTNERS, LP AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS1. ORGANIZATION, BUSINESS OPERATIONS AND PRESENTATION AND CONSOLIDATIONOrganization. Summit Midstream Partners, LP ("SMLP" or the "Partnership"), a Delaware limited partnership, was formed in May 2012 and beganoperations in October 2012 in connection with its initial public offering ("IPO") of common limited partner units. SMLP is a growth-oriented limitedpartnership focused on developing, owning and operating midstream energy infrastructure assets that are strategically located in the coreproducing areas of unconventional resource basins, primarily shale formations, in the continental United States. Our business activities areconducted through our subsidiary, Summit Midstream Holdings, LLC ("Summit Holdings"), a Delaware limited liability company, and itssubsidiaries. References to the "Partnership," "we," or "our," refer collectively to SMLP and its subsidiaries.Summit Midstream GP, LLC, a Delaware limited liability company (the "general partner"), manages our operations and activities. SummitMidstream Partners, LLC, a Delaware limited liability company ("Summit Investments"), is the ultimate owner of our general partner and has theright to appoint the entire board of directors of our general partner. Summit Investments is controlled by Energy Capital Partners II, LLC and itsparallel and co-investment funds (collectively, "Energy Capital Partners").In addition to its 2% general partner interest in SMLP (including the incentive distribution rights ("IDRs") in respect of SMLP), Summit Investmentshas direct and indirect ownership interests in our common and subordinated units. As of December 31, 2015, Summit Investments beneficiallyowned 5,444,731 SMLP common units and all of our subordinated units.Our operations are conducted through, and our operating assets are owned by, various wholly-owned operating subsidiaries. Neither SMLP nor itssubsidiaries have any employees. All of the personnel that conduct our business are employed by Summit Investments, but these individuals aresometimes referred to as our employees.Effective with the completion of its IPO, SMLP had a 100% ownership interest in Summit Holdings, which had a 100% ownership interest in bothDFW Midstream Services LLC ("DFW Midstream") and Grand River Gathering, LLC ("Grand River" or the "Legacy Grand River" system).On June 4, 2013, the Partnership acquired all of the membership interests of Bison Midstream, LLC ("Bison Midstream") from a subsidiary ofSummit Investments (the "Bison Drop Down"). As such, the Bison Drop Down was determined to be a transaction among entities under commoncontrol. Prior to the Bison Drop Down, on February 15, 2013, Summit Investments acquired Bear Tracker Energy, LLC ("BTE"), which wassubsequently renamed Meadowlark Midstream Company, LLC ("Meadowlark Midstream"). The net assets that comprise Bison Midstream werecarved out from Meadowlark Midstream in connection with the Bison Drop Down. Common control of Bison Midstream began in February 2013.On June 21, 2013, Mountaineer Midstream Company, LLC ("Mountaineer Midstream"), a newly formed, wholly owned subsidiary of the Partnership,acquired natural gas gathering pipeline and compression assets from an affiliate of MarkWest Energy Partners, L.P. ("MarkWest") (the"Mountaineer Acquisition"). In December 2013, Mountaineer Midstream was merged into DFW Midstream.On March 18, 2014, SMLP acquired all of the membership interests of Red Rock Gathering Company, LLC ("Red Rock Gathering") from asubsidiary of Summit Investments (the "Red Rock Drop Down"). As such, the Red Rock Drop Down was determined to be a transaction amongentities under common control. Common control of Red Rock Gathering began in October 2012. Concurrent with the closing of the Red Rock DropDown, SMLP contributed its interest in Red Rock Gathering to Grand River.On May 18, 2015, the Partnership acquired all of the membership interests of Polar Midstream, LLC ("Polar Midstream") and Epping TransmissionCompany, LLC ("Epping," and collectively with Polar Midstream, "Polar and Divide") from a subsidiary of Summit Investments (the "Polar andDivide Drop Down"). As such, the Polar and Divide Drop Down was determined to be a transaction among entities under common control. PolarMidstream's net assets were carved out of Meadowlark Midstream immediately prior to the Polar and Divide Drop Down. Concurrent with theclosing of the Polar and Divide Drop Down, Epping became a wholly owned subsidiary of Polar Midstream and SMLP contributed Polar Midstream(including Epping) to Bison Midstream. Common control began in (i) February 2013 for Polar Midstream and (ii) April 2014 for Epping.On February 25, 2016, Summit Midstream Partners, LP ("SMLP" or the "Partnership") and Summit Midstream Partners Holdings, LLC (“SMPHoldings”) entered into a contribution agreement (the "Contribution Agreement") pursuant to which SMP Holdings agreed to contribute to thePartnership substantially all of (i) the issued and90Table of Contentsoutstanding membership interests of Summit Midstream Utica, LLC, Meadowlark Midstream Company, LLC and Tioga Midstream, LLC(collectively, the "Contributed Entities"), each limited liability companies and indirect wholly owned subsidiaries of SMP Holdings and (ii) SMPHoldings’ 40.0% joint venture interest in each of Ohio Gathering Company, L.L.C. and Ohio Condensate Company, L.L.C. (collectively with theContributed Entities, the “2016 Drop Down Assets”)(the “2016 Drop Down”). The 2016 Drop Down is expected to close in March 2016 (the "InitialClose"), subject to customary closing conditions.Business Operations. We provide natural gas gathering, treating and processing services as well as crude oil and produced water gatheringservices pursuant to primarily long-term and fee-based agreements with our customers. Our results are driven primarily by the volumes of naturalgas that we gather, treat, compress and process as well as by the volumes of crude oil and produced water that we gather. Our gathering systemsand the unconventional resource basins in which they operate are as follows:•the Mountaineer Midstream system ("Mountaineer Midstream"), a natural gas gathering system located in the Appalachian Basin, whichincludes the Marcellus Shale formation in northern West Virginia;•Bison Midstream, an associated natural gas gathering system located in the Williston Basin, which includes the Bakken and Three Forksshale formations in northwestern North Dakota;•Polar and Divide, a crude oil and produced water gathering system and transmission pipelines located in the Williston Basin, whichincludes the Bakken and Three Forks shale formations in northwestern North Dakota;•DFW Midstream, a natural gas gathering system located in the Fort Worth Basin, which includes the Barnett Shale formation in north-central Texas; and•Grand River, a natural gas and natural gas liquids gathering and processing system located in the Piceance Basin, which includes theMesaverde formation and the Mancos and Niobrara shale formations in western Colorado and eastern Utah.Our operating subsidiaries, which are wholly owned by Summit Holdings, are: DFW Midstream (which includes Mountaineer Midstream); BisonMidstream (and its wholly owned subsidiaries Polar Midstream and Epping); and Grand River (and its wholly owned subsidiary Red RockGathering). All of our operating subsidiaries are focused on the development, construction and operation of natural gas gathering and processingsystems and crude oil and produced water gathering systems.Presentation and Consolidation. We prepare our consolidated financial statements in accordance with accounting principles generally acceptedin the United States of America ("GAAP"). These principles are established by the Financial Accounting Standards Board. We make estimatesand assumptions that affect the reported amounts of assets and liabilities at the balance sheet dates, including fair value measurements, thereported amounts of revenue and expense, and the disclosure of contingencies. Although management believes these estimates are reasonable,actual results could differ from its estimates.We conduct our operations in the midstream sector through four reportable segments:•the Marcellus Shale, which is served by Mountaineer Midstream;•the Williston Basin, which is served by Bison Midstream and Polar and Divide;•the Barnett Shale, which is served by DFW Midstream; and•the Piceance Basin, which is served by Grand River. Grand River is composed of the Legacy Grand River and Red Rock Gatheringsystems.Our reportable segments reflect the way in which we internally report the financial information used to make decisions and allocate resources inconnection with our operations.The consolidated financial statements include the assets, liabilities, and results of operations of SMLP and its wholly owned subsidiaries. Allintercompany transactions among the consolidated entities have been eliminated in consolidation. For the purposes of the consolidated financialstatements, SMLP's results of operations reflect the results of operations of: (i) DFW Midstream and Grand River for all periods presented, (ii)Bison Midstream and Polar and Divide since February 16, 2013 and (iii) Mountaineer Midstream since June 22, 2013. The financial position,results of operations and cash flows of Bison Midstream and Polar Midstream included herein have been derived from the accounting records ofMeadowlark Midstream on a carve-out basis (see Note 2). The carve-out allocations and estimates were based on methodologies thatmanagement believes are reasonable. The results91Table of Contentsreflected herein, however, may not reflect what Bison Midstream's or Polar Midstream’s financial position, results of operations or cash flowswould have been if either had been a stand-alone company.SMLP recognized its drop down acquisitions at Summit Investments' historical cost because the acquisitions were executed by entities undercommon control. The excess of Summit Investments' net investment over the purchase price paid for a contributed subsidiary is recognized as anaddition to partners' capital, while the excess of purchase price paid over net investment is recognized as a reduction to partners' capital. Due tothe common control aspect, we account for drop down transactions on an “as-if pooled” basis for the periods during which common control existed.Reclassifications. Certain reclassifications have been made to prior-year amounts to conform to current-year presentation. We combined thebalances associated with the unfavorable gas gathering contract with other noncurrent liabilities. These balance sheet changes had no impact on(i) total liabilities or (ii) total liabilities and partners' capital.We also evaluated our historical classification of (i) gathering fee revenue associated with certain Bison Midstream percent-of-proceeds contractsand (ii) certain pass-through expenses also for Bison Midstream. As a result of this evaluation, we determined that certain amounts that hadpreviously been recognized in cost of natural gas and NGLs would be more appropriately reflected as gathering services and related fees and otherrevenues to enhance reporting transparency. The impact of these reclassifications, which had no impact on net (loss) income, total partners'capital or segment adjusted EBITDA, follows. Year ended December 31, 2014 2013 (In thousands)Gathering services and related fees$15,616 $16,805Other revenues3,952 10,068Net impact on total revenues$19,568 $26,873 Cost of natural gas and NGLs$19,568 $26,873Net impact on cost of natural gas and NGLs and total costs and expenses$19,568 $26,873In the fourth quarter 2015, we began reporting all of our operations in North Dakota as one reportable segment, the Williston Basin reportablesegment. These presentation changes had no impact on total assets, total liabilities, total revenues, total costs and expenses, net income,partners' capital, cash flows or total segment adjusted EBITDA. See Note 3 for additional information on this change.2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESCash and Cash Equivalents. Cash and cash equivalents include temporary cash investments with original maturities of three months or less.Accounts Receivable. Accounts receivable relate to gathering and other services provided to our customers and other counterparties. Weevaluate the collectability of accounts receivable and the need for an allowance for doubtful accounts based on customer-specific facts andcircumstances. To the extent we doubt the collectability of a specific customer or counterparty receivable, we recognize an allowance for doubtfulaccounts.Other Current Assets. Other current assets primarily consist of the current portion of prepaid expenses that are charged to expense over theperiod of benefit or the life of the related contract.Property, Plant, and Equipment. We record property, plant, and equipment at historical cost of construction or fair value of the assets atacquisition. We capitalize expenditures that extend the useful life of an asset or enhance its productivity or efficiency from its original design overthe expected remaining period of use. For maintenance and repairs that do not add capacity or extend the useful life of an asset, we recognizeexpenditures as an expense as incurred. We capitalize project costs incurred during construction, including interest on funds borrowed to financethe construction of facilities, as construction in progress.92Table of ContentsWe record depreciation on a straight-line basis over an asset’s estimated useful life. We base our estimates for useful life on various factorsincluding age (in the case of acquired assets), manufacturing specifications, technological advances and historical data concerning useful lives ofsimilar assets. Estimates of useful lives follow. Useful lives(In years)Gathering and processing systems and related equipment30Other4-15Construction in progress is depreciated consistent with its applicable asset class once it is placed in service. Land and line fill are not depreciated.We base an asset’s carrying value on estimates, assumptions and judgments for useful life and salvage value. Upon sale, retirement or otherdisposal, we remove the carrying value of an asset and its accumulated depreciation from our balance sheet and recognize the related gain orloss, if any.Accrued capital expenditures are reflected in trade accounts payable.Asset Retirement Obligations. We record a liability for asset retirement obligations only if and when a future asset retirement obligation with adeterminable life is identified. For identified asset retirement obligations, we then evaluate whether the expected date and related costs ofretirement can be estimated. We have concluded that our gathering and processing assets have an indeterminate life because they are owned andwill operate for an indeterminate period when properly maintained. Because we did not have sufficient information to reasonably estimate theamount or timing of such obligations and we have no current plan to discontinue use of any significant assets, we did not provide for any assetretirement obligations as of December 31, 2015 or 2014.Amortizing Intangibles. Upon the acquisition of DFW Midstream, certain of its gas gathering contracts were deemed to have above-marketpricing structures while another was deemed to have pricing that was below market. We have recognized the above-market contracts as favorablegas gathering contracts. We have recognized the below-market contract as the unfavorable gas gathering contract and included it in othernoncurrent liabilities. We amortize these contracts on a units-of-production basis over the contract's estimated useful life. We define useful life asthe period over which the contract is expected to contribute to our future cash flows. These contracts have original terms ranging from 10 years to20 years. We recognize the amortization expense associated with these contracts in other revenues.We amortize all other gas gathering contracts, or contract intangibles, over the period of economic benefit based upon expected revenues over thelife of the contract. The useful life of these contracts ranges from 10 years to 25 years. We recognize the amortization expense associated withthese contracts in depreciation and amortization expense.We have rights-of-way associated with city easements and easements granted within existing rights-of-way. We amortize these intangible assetsover the shorter of the contractual term of the rights-of-way or the estimated useful life of the gathering system. The contractual terms of therights-of-way range from 20 years to 30 years. We recognize the amortization expense associated with rights-of-way assets in depreciation andamortization expense.Goodwill. Goodwill represents consideration paid in excess of the fair value of the net identifiable assets acquired in a business combination. Weevaluate goodwill for impairment annually on September 30. We also evaluate goodwill whenever events or circumstances indicate that it is morelikely than not that the fair value of a reporting unit is less than its carrying amount.We test goodwill for impairment using a two-step quantitative test. In the first step, we compare the fair value of the reporting unit to its carryingvalue, including goodwill. To estimate the fair value of the reporting units under step one, we utilize two valuation methodologies: the marketapproach and the income approach. Both of these approaches incorporate significant estimates and assumptions to calculate enterprise fair valuefor a reporting unit. The most significant estimates and assumptions inherent within these two valuation methodologies are: (i) determination of theweighted-average cost of capital; (ii) the selection of guideline public companies; (iii) market multiples; (iv) weighting of the income and marketapproaches; (v) growth rates; (vi) commodity prices; and (vi) the expected levels of throughput volume gathered. Changes in these and otherassumptions could materially affect the estimated amount of fair value for any of our reporting units.If the reporting unit’s fair value exceeds its carrying amount, we conclude that the goodwill of the reporting unit has not been impaired and nofurther work is performed.93Table of ContentsIf we determine that the reporting unit’s carrying value exceeds its fair value, we proceed to step two. In step two, we compare the carrying valueof the reporting unit to its implied fair value. Significant estimates and assumptions utilized in the determination of a reporting unit's implied fairvalue are based on a variety of factors specific to a given reporting unit's individual assets and liabilities as well as market and industryconsiderations. If we determine that the carrying amount of a reporting unit's goodwill exceeds its implied fair value, we recognize the excess ofthe carrying value over the implied fair value as an impairment loss.Other Noncurrent Assets. Other noncurrent assets primarily consist of external costs incurred in connection with the issuance of our senior notesand the closing of our revolving credit facility and related amendments. We capitalize and then amortize these deferred loan costs over the life ofthe respective debt instrument. We recognize amortization of deferred loan costs in interest expense.Impairment of Long-Lived Assets. We test assets for impairment when events or circumstances indicate that the carrying value of a long-livedasset may not be recoverable. The carrying value of a long-lived asset (except goodwill) is not recoverable if it exceeds the sum of theundiscounted cash flows expected to result from its use and eventual disposition. If we conclude that an asset's carrying value will not berecovered through future cash flows, we recognize an impairment loss on the long-lived asset equal to the amount by which the carrying valueexceeds its fair value. We determine fair value using either a market-based approach or an income-based approach. We discuss our policy forgoodwill impairment above.Derivative Contracts. We have commodity price exposure related to our sale of the physical natural gas we retain from our DFW Midstreamcustomers and our procurement of electricity to operate DFW Midstream's electric-drive compression assets. Our gas gathering agreements withour DFW Midstream customers permit us to retain a certain quantity of natural gas that we gather to offset the power costs we incur to operatethese electric-drive compression assets. We manage this direct exposure to natural gas and power prices through the use of forward powerpurchase contracts with wholesale power providers that require us to purchase a fixed quantity of power at a fixed heat rate based on prevailingnatural gas prices on the Waha Hub Index. Because we also sell our retainage gas at prices that are based on the Waha Hub Index, we haveeffectively fixed the relationship between our compression electricity expense and natural gas retainage sales.Accounting standards related to derivative instruments and hedging activities allow for normal purchase or sale elections and hedge accountingdesignations, which generally eliminate or defer the requirement for mark-to-market recognition in net income and thus reduce the volatility of netincome that can result from fluctuations in fair values. We have designated these contracts as normal under the normal purchase and saleexception under the accounting standards for derivatives. We do not enter into risk management contracts for speculative purposes.Fair Value of Financial Instruments. The fair-value-measurement standard under GAAP defines fair value as the price that would be received tosell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The standardcharacterizes inputs used in determining fair value according to a hierarchy that prioritizes those inputs based upon the degree to which the inputsare observable. The three levels of the fair value hierarchy are as follows:•Level 1. Inputs represent quoted prices in active markets for identical assets or liabilities;•Level 2. Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (forexample, quoted market prices for similar assets or liabilities in active markets or quoted market prices for identical assets or liabilities inmarkets not considered to be active, inputs other than quoted prices that are observable for the asset or liability, or market-corroboratedinputs); and•Level 3. Inputs that are not observable from objective sources, such as management’s internally developed assumptions used in pricingan asset or liability (for example, an internally developed present value of future cash flows model that underlies management's fair valuemeasurement).Commitments and Contingencies. We record accruals for loss contingencies when we determine that it is probable that a liability has beenincurred and that such economic loss can be reasonably estimated. Such determinations are subject to interpretations of current facts andcircumstances, forecasts of future events, and estimates of the financial impacts of such events.Revenue Recognition. We generate the majority of our revenue from the gathering, treating and processing services that we provide to ourcustomers. We also generate revenue from our marketing of natural gas, NGLs and condensate. We realize revenues by receiving fees from ourcustomers or by selling the residue natural gas, NGLs and condensate.94Table of ContentsWe recognize revenue earned from fee-based gathering, treating and processing services in gathering services and related fees revenue. We alsoearn revenue from the sale of physical natural gas purchased from our customers under percentage-of-proceeds arrangements. These revenuesare recognized in natural gas, NGLs and condensate sales with corresponding expense recognition for the producer's share of the proceeds in costof natural gas and NGLs. We sell substantially all of the natural gas that we retain from our DFW Midstream customers to offset the powerexpenses of the electric-driven compression on the DFW Midstream system. We also sell condensate retained from our gathering services atGrand River. Revenues from the retainage of natural gas and condensate are recognized in natural gas, NGLs and condensate sales; theassociated expense is included in operation and maintenance expense. Certain customers reimburse us for costs we incur on their behalf. Werecord costs incurred and reimbursed by our customers on a gross basis, with the revenue component recognized in other revenues.We recognize revenue when all of the following criteria are met: (i) persuasive evidence of an exchange arrangement exists, (ii) delivery hasoccurred or services have been rendered, (iii) the price is fixed or determinable, and (iv) collectability is reasonably assured.We provide gathering and/or processing services principally under contracts that contain one or more of the following arrangements:•Fee-based arrangements. Under fee-based arrangements, we receive a fee or fees for one or more of the following services (i) naturalgas gathering, treating, and/or processing and (ii) crude oil and/or produced water gathering.•Percent-of-proceeds arrangements. Under percent-of-proceeds arrangements, we generally purchase natural gas from producers at thewellhead, or other receipt points, gather the wellhead natural gas through our gathering system, treat the natural gas, process the naturalgas and/or sell the natural gas to a third party for processing. We then remit to our producers an agreed-upon percentage of the actualproceeds received from sales of the residue natural gas and NGLs. Certain of these arrangements may also result in returning all or aportion of the residue natural gas and/or the NGLs to the producer, in lieu of returning sales proceeds. The margins earned are directlyrelated to the volume of natural gas that flows through the system and the price at which we are able to sell the residue natural gas andNGLs.Certain of our gathering and processing agreements provide for a monthly, quarterly or annual minimum volume commitment ("MVC"). Under theseMVCs, our customers agree to ship and/or process a minimum volume of production on our gathering systems or to pay a minimum monetaryamount over certain periods during the term of the MVC. A customer must make a shortfall payment to us at the end of the contractedmeasurement period if its actual throughput volumes are less than its MVC for that period. Certain customers are entitled to utilize shortfallpayments to offset gathering fees in one or more subsequent contracted measurement periods to the extent that such customer's throughputvolumes in a subsequent contracted measurement period exceed its MVC for that contracted measurement period.We recognize customer billings for obligations under their MVCs as revenue when the obligations are billable under the contract and the customerdoes not have the right to utilize shortfall payments to offset gathering or processing fees in excess of its MVCs in subsequent periods.We record customer billings for obligations under their MVCs as deferred revenue when the customer has the right to utilize shortfall payments tooffset gathering or processing fees in subsequent periods. We recognize deferred revenue under these arrangements in revenue once allcontingencies or potential performance obligations associated with the related volumes have either (i) been satisfied through the gathering orprocessing of future excess volume throughput, or (ii) expired (or lapsed) through the passage of time pursuant to the terms of the applicablegathering or processing agreement. We also recognize deferred revenue when it is determined that a given amount of MVC shortfall paymentscannot be recovered by offsetting gathering or processing fees in subsequent contracted measurement periods. In making this determination, weconsider both quantitative and qualitative facts and circumstances, including, but not limited to, contract terms, capacity of the associated pipelineor receipt point and/or expectations regarding future investment, drilling and production.We classify deferred revenue as a current liability for arrangements where the expiration of a customer's right to utilize shortfall payments is 12months or less. We classify deferred revenue as noncurrent for arrangements where the expiration of the right to utilize shortfall payments and ourestimate of its potential utilization is more than 12 months.Unit-Based Compensation. For awards of unit-based compensation, we determine a grant date fair value and recognize the related compensationexpense in the statement of operations over the vesting period of the respective awards.95Table of ContentsIncome Taxes. As a partnership, we are generally not subject to federal and state income taxes, except as noted below. However, our unitholdersare individually responsible for paying federal and state income taxes on their share of our taxable income. Net income or loss for GAAP purposesmay differ significantly from taxable income reportable to our unitholders as a result of differences between the tax basis and the GAAP basis ofassets and liabilities and the taxable income allocation requirements under our partnership agreement.In general, legal entities that are chartered, organized or conducting business in the state of Texas are subject to a franchise tax (the "TexasMargin Tax"). The Texas Margin Tax has the characteristics of an income tax because it is determined by applying a tax rate to a tax base thatconsiders both revenues and expenses. Our financial statements reflect provisions for these tax obligations.In 2014, we elected to apply changes to the determination of cost of goods sold for the Texas Margin Tax which permits the use of accelerateddepreciation allowed for federal income tax purposes. As a result of this change, we recognized a a deferred tax liability. Other noncurrentliabilities included a deferred tax liability of $0.6 million and $1.3 million as of December 31, 2015 and 2014, respectively.Earnings Per Unit ("EPU"). We determine basic EPU by dividing the net income or loss that is attributed, in accordance with the net income andloss allocation provisions of our partnership agreement, to common and subordinated unitholders under the two-class method, after deducting (i)the general partner's 2% interest in net income or loss, (ii) any payment of IDRs and (iii) any net income or loss of contributed subsidiaries that isattributable to Summit Investments, by the weighted-average number of common and subordinated units outstanding. Diluted EPU reflects thepotential dilution that could occur if securities or other agreements to issue common units, such as unit-based compensation, were exercised,settled or converted into common units and included in the weighted-average number of units outstanding. When it is determined that potentialcommon units resulting from an award subject to performance or market conditions should be included in the diluted EPU calculation, the impact isreflected by applying the treasury stock method.Comprehensive Income. Comprehensive income is the same as net income (loss) for all periods presented.Environmental Matters. We are subject to various federal, state and local laws and regulations relating to the protection of the environment.Liabilities for loss contingencies, including environmental remediation costs, arising from claims, assessments, litigation, fines, and penalties andother sources are charged to expense when it is probable that a liability has been incurred and the amount of the assessment and/or remediationcan be reasonably estimated. We accrue for losses associated with environmental remediation obligations when such losses are probable andreasonably estimable. Such accruals are adjusted as further information develops or circumstances change. Recoveries of environmentalremediation costs from other parties or insurers are recorded as assets when their receipt is deemed probable.Carve-Out Entities. For drop down transactions involving entities that were carved out of other entities, the majority of the assets and liabilitiesallocated to the carve-out entity are specifically identified based on the original entity's existing divisional organization. Goodwill is allocated to thecarve-out entity based on initial purchase accounting estimates. Revenues and depreciation and amortization are specifically identified based onthe relationship of the carve-out entity to the original entity's existing divisional structure. Operation and maintenance and general andadministrative expenses are allocated to the carve-out entity based on volume throughput.Recent Accounting Pronouncements. Accounting standard setters frequently issue new or revised accounting rules. We review newpronouncements to determine the impact, if any, on our financial statements. There are currently no recent pronouncements that have been issuedthat we believe may materially affect our financial statements, except as noted below.In May 2014, the FASB released a joint revenue recognition standard, Accounting Standards Update ("ASU") No. 2014-09 Revenue FromContracts With Customers (Topic 606) ("ASU 2014-09"). Under ASU 2014-09, revenue will be recognized under a five-step model: (i) identify thecontract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transactionprice to performance obligations; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. In its original form, ASU2014-09 was effective for fiscal years, and interim periods within those years, beginning after December 15, 2016; early adoption was notpermitted. In July 2015, the FASB reaffirmed the guidance in its April 2015 proposed ASU that defers for one year the effective date of the ASU2014-09 for both public and nonpublic entities reporting under U.S. GAAP and allows early adoption as of the original effective date. We arecurrently in the process of evaluating the impact of this update.In April 2015, the FASB issued ASU No. 2015-03 Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt IssuanceCosts ("ASU 2015-03"). Under ASU 2015-03, entities that have historically presented96Table of Contentsdebt issuance costs as an asset, related to a recognized debt liability, will be required to present those costs as a direct deduction from thecarrying amount of that debt liability. This presentation will result in debt issuance cost being presented the same way debt discounts havehistorically been handled. In August 2015, the FASB amended ASU 2015-03 to address the presentation and subsequent measurement of debtissuance costs related to line of credit (“LOC”) arrangements. The amendment added a paragraph that states that the SEC staff would not objectto an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing deferred debt issuance costs ratably over theterm of a LOC arrangement, regardless of whether there are outstanding borrowings under that LOC arrangement. This new standard is effectivefor fiscal years, and interim periods within those years, beginning after December 15, 2015, and interim and annual periods thereafter. Earlyadoption is permitted. The adoption of this update will result in a reclassification from other noncurrent assets to long-term debt of the debtissuance costs associated with our senior notes. Debt issuance costs associated with our revolving credit facility will remain in other noncurrentassets. There will be no impact on interest expense, net income, earnings per unit or partners' capital.In September 2015, the FASB issued ASU No. 2015-16 Business Combinations (Topic 805): Simplifying the Accounting for Measurement-PeriodAdjustments (“ASU 2015-16”). Under ASU 2015-16, an acquirer would be required to recognize adjustments to provisional amounts that areidentified during the measurement period in the reporting period in which the adjustment amounts are determined. Further, the acquirer must recordin the financial statements for the same period, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, asa result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. Entities must alsopresent separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings byline item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of theacquisition date. This new standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, andinterim and annual periods thereafter. Early adoption is permitted. We are currently in the process of evaluating the impact of this update.In January 2016, the FASB issued ASU No. 2016-01 Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of FinancialAssets and Financial Liabilities (“ASU 2016-01”). Among other changes, the amendments in ASU 2016-01 supersede the guidance to classifyequity securities with readily determinable fair values into different categories and require equity securities to be measured at fair value withchanges in the fair value recognized through net income. They also simplify the impairment assessment of equity investments without readilydeterminable fair values and require use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes.Under ASU 2016-01, an entity will be required to present separately in other comprehensive income the portion of the total change in the fair valueof a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value inaccordance with the fair value option for financial instruments, to separately present financial assets and financial liabilities by measurementcategory and form of financial asset. ASU 2016-01 also clarifies that an entity should evaluate the need for a valuation allowance on a deferred taxasset related to available-for-sale securities in combination with the entity’s other deferred tax assets. This new standard is effective for fiscalyears, and interim periods within those years, beginning after December 31, 2017. Early adoption is permissible, but limited in application. Theadoption of this new update could impact the fair value we disclose for certain financial instruments but is not expected to impact amountsrecognized in the consolidated financial statements.3. SEGMENT INFORMATIONAs of December 31, 2015, our reportable segments are:•the Marcellus Shale, which is served by Mountaineer Midstream;•the Williston Basin, which is served by Bison Midstream and Polar and Divide;•the Barnett Shale, which is served by DFW Midstream; and•the Piceance Basin, which is served by Grand River.Each of our reportable segments provides midstream services in a specific geographic area. Our reportable segments reflect the way in which weinternally report the financial information used to make decisions and allocate resources in connection with our operations.In connection with the Polar and Divide Drop Down, we identified two reportable segments in the Williston Basin. For the second and third quartersof 2015, we reported the results of Bison Midstream in the Williston Basin – Gas97Table of Contentsreportable segment and those of Polar and Divide in the Williston Basin – Liquids reportable segment. In the fourth quarter of 2015, we changedhow we manage and evaluate our operations in North Dakota. Prior to the fourth quarter of 2015, Bison Midstream and Polar and Divide weremanaged separately and their financial results were evaluated separately. In the fourth quarter of 2015, we began managing our North Dakotaoperations under a single management team and began reporting their financial results on a combined basis. As a result, we no longer distinguishbetween liquids and gas in the Williston Basin and now have one reportable segment, the Williston Basin reportable segment, representing thoseoperations.Corporate represents those assets and liabilities and revenues and expenses that are not specifically attributable to a reportable segment, notindividually reportable, or that have not been allocated to our reportable segments. Beginning in the first quarter of 2015, we discontinued allocatingcertain general and administrative expenses, primarily salaries, benefits, incentive compensation and rent expense, to our operating segments.Assets by reportable segment follow. December 31, 2015 2014 2013 (In thousands)Assets: Marcellus Shale$233,116 $243,884 $214,379Williston Basin563,952 709,888 645,014Barnett Shale416,586 428,935 431,578Piceance Basin797,057 872,437 876,969Total reportable segment assets2,010,711 2,255,144 2,167,940Corporate29,820 38,577 23,203Total assets$2,040,531 $2,293,721 $2,191,143For information on the sale or impairment of long-lived assets, other than goodwill, see Note 4. For information on goodwill by reportable segment,including goodwill impairments, see Note 6.Revenues by reportable segment follow. Year ended December 31, 2015 2014 2013 (In thousands)Revenues: Marcellus Shale$28,468 $22,694 $9,588Williston Basin85,887 104,471 81,501Barnett Shale88,042 93,001 105,324Piceance Basin168,922 152,537 127,273Total reportable segment revenues and total revenues$371,319 $372,703 $323,686Counterparties accounting for more than 10% of total revenues were as follows: Year ended December 31, 2015 2014 2013Percentage of total revenues (1): Counterparty A - Piceance17% 19% 19%Counterparty B - Piceance16% * *Counterparty C - Barnett Shale* * 14%__________(1) Includes recognition of revenue that was previously deferred in connection with minimum volume commitments (see Notes 2 and 7).* Less than 10%98Table of ContentsDepreciation and amortization, including the amortization expense associated with our favorable and unfavorable gas gathering contracts asreported in other revenues, by reportable segment follows. Year ended December 31, 2015 2014 2013 (In thousands)Depreciation and amortization: Marcellus Shale$8,682 $7,648 $3,998Williston Basin26,280 22,491 16,669Barnett Shale16,392 16,601 14,961Piceance Basin45,018 40,965 35,527Total reportable segment depreciation and amortization96,372 87,705 71,155Corporate603 588 451Total depreciation and amortization$96,975 $88,293 $71,606Capital expenditures by reportable segment follow. Year ended December 31, 2015 2014 2013 (In thousands)Capital expenditures: Marcellus Shale$1,306 $33,866 $1,822Williston Basin90,234 139,422 99,983Barnett Shale6,875 14,567 29,534Piceance Basin19,263 32,505 50,709Total reportable segment capital expenditures117,678 220,360 182,048Corporate429 460 930Total capital expenditures$118,107 $220,820 $182,978We assess the performance of our reportable segments based on segment adjusted EBITDA. We define segment adjusted EBITDA as totalrevenues less total costs and expenses; plus (i) other income excluding interest income, (ii) depreciation and amortization, (iii) adjustments relatedto MVC shortfall payments, (iv) impairments and (v) other noncash expenses or losses, less other noncash income or gains.Segment adjusted EBITDA by reportable segment follows. Year ended December 31, 2015 2014 2013 (In thousands)Reportable segment adjusted EBITDA: Marcellus Shale$23,214 $15,940 $6,333Williston Basin47,010 31,551 17,350Barnett Shale59,526 60,528 69,473Piceance Basin104,467 107,953 80,941Total reportable segment adjusted EBITDA$234,217 $215,972 $174,09799Table of ContentsA reconciliation of (loss) income before income taxes to total reportable segment adjusted EBITDA follows. Year ended December 31, 2015 2014 2013 (In thousands)Reconciliation of Income (loss) Before Income Taxes to Segment Adjusted EBITDA: (Loss) income before income taxes$(187,485) $(14,103) $53,566Add: Allocated corporate expenses23,772 11,065 8,773Interest expense48,616 40,159 19,173Depreciation and amortization96,975 88,293 71,606Adjustments related to MVC shortfall payments(11,902) 26,565 17,025Unit-based compensation6,259 5,036 3,846Loss on asset sales42 442 113Long-lived asset impairment9,305 5,505 —Goodwill impairment248,851 54,199 —Less: Interest income2 4 5Gain on asset sales214 — —Impact of purchase price adjustment— 1,185 —Total reportable segment adjusted EBITDA$234,217 $215,972 $174,097Segment adjusted EBITDA excludes the effect of allocated corporate expenses, such as certain general and administrative expenses (includingcompensation-related expenses and professional services fees), transaction costs, interest expense and income tax expense.Adjustments related to MVC shortfall payments account for:•the net increases or decreases in deferred revenue for MVC shortfall payments and•our inclusion of expected annual MVC shortfall payments. We include a proportional amount of these historical or expected MVC shortfallpayments in each quarter prior to the quarter in which we actually recognize the shortfall payment. These adjustments have not been billedto our customers and are not recognized in our consolidated financial statements.Adjustments related to MVC shortfall payments by reportable segment follow. Year ended December 31, 2015 2014 2013 (In thousands)Adjustments related to MVC shortfall payments: Williston Basin$11,870 $10,743 $3,600Barnett Shale(2,182) 628 1,030Piceance Basin(21,590) 15,194 12,395Total adjustments related to MVC shortfall payments$(11,902) $26,565 $17,025100Table of Contents4. PROPERTY, PLANT, AND EQUIPMENT, NETDetails on property, plant, and equipment follow. December 31, 2015 2014 (In thousands)Gathering and processing systems and related equipment$1,574,916 $1,459,585Construction in progress25,484 37,604Land and line fill9,339 9,964Other30,935 28,871Total1,640,674 1,536,024Less accumulated depreciation176,872 121,674Property, plant, and equipment, net$1,463,802 $1,414,350During 2015 and 2014, we identified certain events, facts and circumstances which indicated that certain of our property, plant and equipmentcould be impaired. (There were no impairment indicators during 2013.) As such, we reviewed the assets that had been identified as potentiallyimpaired and estimated the fair value of the identified property, plant and equipment using a market-based approach. For the assets which had fairvalues below their carrying value, we recognized the following long-lived asset impairments, by segment. Year ended December 31, 2015 2014 2013 (In thousands)Long-lived asset impairment: Williston Basin$7,554 $— $—Barnett Shale531 5,505 —Piceance Basin1,220 — —Our impairment determinations, in the context of these reviews, involved significant assumptions and judgments. Differing assumptions regardingany of these inputs could have a significant effect on the various valuations. As such, the fair value measurements utilized within these estimatesare classified as non-recurring Level 3 measurements in the fair value hierarchy because they are not observable from objective sources. Due tothe volatility of the inputs used, we cannot predict the likelihood of any future impairment.During the fourth quarters of 2015 and 2014, we identified a need to evaluate the goodwill associated with certain of our gathering systems (seeNote 6). In connection with these evaluations, we also evaluated the related property, plant and equipment associated therewith for impairment andconcluded that no impairment was necessary.Depreciation expense and capitalized interest follow. Year ended December 31, 2015 2014 2013 (In thousands)Depreciation expense$55,685 $49,816 $37,313Capitalized interest3,137 3,778 6,255101Table of Contents5. AMORTIZING INTANGIBLE ASSETS AND UNFAVORABLE GAS GATHERING CONTRACTDetails regarding our intangible assets and the unfavorable gas gathering contract (included in other noncurrent liabilities), all of which are subjectto amortization, follow. December 31, 2015 Useful lives(In years) Gross carryingamount Accumulatedamortization Net (Dollars in thousands)Favorable gas gathering contracts18.7 $24,195 $(9,534) $14,661Contract intangibles12.5 426,464 (111,052) 315,412Rights-of-way25.2 125,922 (17,902) 108,020Total intangible assets $576,581 $(138,488) $438,093 Unfavorable gas gathering contract10.0 $10,962 $(6,077) $4,885 December 31, 2014 Useful lives(In years) Gross carryingamount Accumulatedamortization Net (Dollars in thousands)Favorable gas gathering contracts18.7 $24,195 $(8,056) $16,139Contract intangibles12.5 426,464 (75,713) 350,751Rights-of-way24.7 123,581 (12,737) 110,844Total intangible assets $574,240 $(96,506) $477,734 Unfavorable gas gathering contract10.0 $10,962 $(5,385) $5,577During the fourth quarters of 2015 and 2014, we identified a need to evaluate the goodwill associated with certain of our gathering systems (seeNote 6). In connection with these evaluations, we also evaluated the related intangible assets associated therewith for impairment and concludedthat no impairment was necessary.We recognized amortization expense in other revenues as follows: Year ended December 31, 2015 2014 2013 (In thousands)Amortization expense – favorable gas gathering contracts$(1,478) $(1,741) $(2,078)Amortization expense – unfavorable gas gathering contract692 797 1,046We recognized amortization expense in costs and expenses as follows: Year ended December 31, 2015 2014 2013 (In thousands)Amortization expense – contract intangibles$35,339 $32,554 $28,654Amortization expense – rights-of-way5,165 4,979 4,607102Table of ContentsThe estimated aggregate annual amortization expected to be recognized as of December 31, 2015 for each of the five succeeding fiscal yearsfollows. Intangible assets Unfavorable gasgathering contract (In thousands)2016$42,301 $924201741,152 1,047201840,606 1,035201940,852 1,045202043,498 8346. GOODWILLRecorded goodwill is related to the original acquisitions of the Grand River, Bison Midstream, Polar and Divide and Mountaineer Midstreamsystems. The assets acquired in the Polar and Divide Drop Down were carved out of Meadowlark Midstream. As such, we elected to apply thehistorical cost approach to determine the amount of goodwill to assign to the Polar and Divide reporting unit. Our procedures indicated that theremaining goodwill balance at Meadowlark Midstream was entirely attributable to the Polar and Divide reporting unit.A rollforward of goodwill by reportable segment and in total follows. Piceance Basin Williston Basin Marcellus Shale Total (In thousands)Goodwill, January 1, 2014$45,478 $257,572 $16,211 $319,261Goodwill impairment— (54,199) — (54,199)Goodwill, December 31, 201445,478 203,373 16,211 265,062Goodwill impairment(45,478) (203,373) — (248,851)Goodwill, December 31, 2015$— $— $16,211 $16,211Accumulated goodwill impairments by reportable segment for those reporting units that have previously recognized goodwill follow. December 31, 2015 2014 2013 (In thousands)Accumulated goodwill impairment: Piceance Basin$45,478 $— $—Williston Basin257,572 54,199 —Total accumulated goodwill impairment$303,050 $54,199 $—As discussed in Note 2, we evaluate goodwill for impairment annually on September 30 and whenever events or circumstances indicate that it ismore likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill.2014 Annual Impairment Evaluation. In September 2014, we performed our annual goodwill impairment testing as of September 30 using acombination of the income and market approaches. We determined that the fair value of the Grand River, Mountaineer Midstream and PolarMidstream reporting units substantially exceeded their carrying value, including goodwill. We also determined that the fair value of the BisonMidstream reporting unit exceeded its carrying value. However, it did not exceed its carrying value, including goodwill, by a substantial amount.Because the fair value of each reporting unit exceeded its carrying value, including goodwill, there were no associated impairments of goodwill inconnection with our 2014 annual goodwill impairment test.103Table of ContentsFourth Quarter 2014 Goodwill Impairment. During the latter part of the fourth quarter of 2014, the declines in prices for natural gas, NGLs and crudeoil accelerated, negatively impacting producers in each of our areas of operation. As a result, we considered whether the goodwill associated withour Grand River, Mountaineer Midstream, Polar Midstream and Bison Midstream reporting units could have been impaired. Our assessmentsrelated to Grand River and Mountaineer Midstream did not result in an indication that the associated goodwill had been impaired.Our assessment related to the Polar Midstream and Bison Midstream reporting units did result in an indication that the associated goodwill couldhave been impaired. We noted that both reporting units were impacted by the recent price declines. We also noted that a key Bison Midstreamcustomer announced that it was delaying its previously announced drilling plans which caused SMLP to reduce its forecasted volume assumption.The impact of these events increased the likelihood that the goodwill associated with the Polar Midstream and Bison Midstream reporting unitscould have been impaired. As such, we concluded that a triggering event occurred during the fourth quarter of 2014 requiring that we test thegoodwill associated with these reporting units for impairment.In connection therewith, we reperformed our step one analyses for each as of December 31, 2014. To estimate the fair value of the reporting units,we utilized two valuation methodologies: the market approach and the income approach.The results of our step one goodwill impairment testing indicated that the fair value of the Polar Midstream reporting unit exceeded its carryingvalue, including goodwill as of December 31, 2014. As a result, there was no associated impairment of goodwill in connection with the fourthquarter 2014 triggering event.The results of our step one goodwill impairment testing indicated that the fair value of the Bison Midstream reporting unit was below its carryingvalue, including goodwill as of December 31, 2014. As a result, we performed step two of the goodwill impairment test.To perform step two, we first determined the fair values of the identifiable assets and liabilities. Significant assumptions utilized in thedetermination of the fair value of each reporting unit's individual assets and liabilities included the determination of discount rate and contributoryasset charge utilized in our calculation of the fair value of our contract intangibles, expected levels of throughput volume and associated capitalexpenditures and commodity prices.In the first quarter of 2015, we finalized our calculations of the fair values of the identified assets and liabilities in step two of the December 31,2014 goodwill impairment testing for the Bison Midstream reporting unit. This process confirmed the preliminary goodwill impairment of $54.2million that was recognized as of December 31, 2014.2015 Annual Impairment Evaluation. We performed our annual goodwill impairment testing as of September 30, 2015 using a combination of theincome and market approaches. We determined that the fair value of the Grand River, Mountaineer Midstream and Polar Midstream reporting unitsexceeded their carrying value, including goodwill. Because the fair value of each reporting unit exceeded its carrying value, including goodwill,there were no associated impairments of goodwill in connection with our 2015 annual goodwill impairment test.Fourth Quarter 2015 Goodwill Impairments. During the latter part of the fourth quarter of 2015 and the early part of the first quarter of 2016, thedeclines in forward prices for natural gas, NGLs and crude oil accelerated significantly. As a result, the energy sector's public debt and equitymarket experienced increased volatility, particularly for comparable companies operating in the midstream services sector. Additionally, during thisperiod, the values of our publicly traded equity and debt instruments decreased as did those of comparable midstream companies.Due to (i) the increased market volatility, (ii) the decrease in market values of comparable companies, (iii) the continued trend of falling commodityprices and (iv) the finalization of our annual financial and operating plans which took into account changes resulting from expected levels of drillingactivity, we concluded that a triggering event occurred during the fourth quarter of 2015 requiring that we test the goodwill associated with ourGrand River and Polar and Divide reporting units. Our assessment related to Mountaineer Midstream did not result in an indication that a triggeringevent had occurred for Mountaineer Midstream.In connection therewith, we updated our step one analyses as of December 31, 2015. These updated analyses indicated that the carrying valuesfor Grand River and Polar and Divide exceeded their estimated fair values. As a result, we then performed step two of the goodwill impairment testfor both reporting units.To perform step two, we first determined the estimated fair values of the identifiable assets and liabilities. Significant assumptions utilized in thedetermination of the fair value of each reporting unit's individual assets and liabilities included the determination of discount rate taking intoconsideration company-specific risks and contributory asset charge utilized in our contract intangibles, expected levels of throughput volume andassociated capital expenditures.104Table of ContentsOur preliminary estimates of the fair values of the identified assets and liabilities calculated in step two indicated that all of the associated goodwillfor both reporting units had been impaired. As such, we recorded an estimated goodwill impairment of $45.5 million for Grand River and $203.4million for Polar and Divide. These amounts represent our estimate of impairment pending finalization of the fair value calculations. We expectfinalization to occur in the first quarter of 2016.Fair Value Measurement. Our impairment determinations, in the context of (i) our annual impairment evaluations and (ii) our other-than-annualimpairment evaluations involved significant assumptions and judgments, as discussed above. Differing assumptions regarding any of these inputscould have a significant effect on the various valuations. As such, the fair value measurements utilized within these models 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 theinputs used, we cannot predict the likelihood of any future impairment.7. DEFERRED REVENUEThe majority of our gas gathering agreements provide for a monthly, quarterly or annual MVC from our customers. The amount of the shortfallpayment is based on the difference between the actual throughput volume shipped or processed for the applicable period and the MVC for theapplicable period, multiplied by the applicable gathering or processing fee.Many of our gas gathering agreements contain provisions that can reduce or delay the cash flows that we expect to receive from our MVCs to theextent that a customer's actual throughput volumes are above or below its MVC for the applicable contracted measurement period. Theseprovisions include the following:•To the extent that a customer's throughput volumes are less than its MVC for the applicable period and the customer makes a shortfallpayment, it may be entitled to an offset in one or more subsequent periods to the extent that its throughput volumes in subsequent periodsexceed its MVC for those periods. In such a situation, we would not receive gathering fees on throughput in excess of that customer'sMVC (depending on the terms of the specific gas gathering agreement) to the extent that the customer had made a shortfall payment withrespect to one or more preceding measurement periods (as applicable).•To the extent that a customer's throughput volumes exceed its MVC in the applicable contracted measurement period, it may be entitledto apply the excess throughput against its aggregate MVC, thereby reducing the period for which its annual MVC applies. As a result ofthis mechanism, the weighted-average remaining period for which our MVCs apply will be less than the weighted-average of the originalstated contract terms of our MVCs.•To the extent that certain of our customers' throughput volumes exceed its MVC for the applicable period, there is a crediting mechanismthat allows the customer to build a bank of credits that it can utilize in the future to reduce shortfall payments owed in subsequent periods,subject to expiration if there is no shortfall in subsequent periods. The period over which this credit bank can be applied to future shortfallpayments varies, depending on the particular gas gathering agreement.A rollforward of current deferred revenue follows. Williston Basin BarnettShale PiceanceBasin Totalcurrent (In thousands)Current deferred revenue, January 1, 2014$— $1,555 $— $1,555Additions— 2,610 — 2,610Less revenue recognized— 1,788 — 1,788Current deferred revenue, December 31, 2014— 2,377 — 2,377Additions— 677 2,743 3,420Less revenue recognized— 2,377 2,743 5,120Current deferred revenue, December 31, 2015$— $677 $— $677105Table of ContentsA rollforward of noncurrent deferred revenue follows. Williston Basin BarnettShale PiceanceBasin Total noncurrent (In thousands)Noncurrent deferred revenue, January 1, 2014$6,389 $— $23,294 $29,683Additions10,743 — 14,813 25,556Noncurrent deferred revenue, December 31, 201417,132 — 38,107 55,239Additions11,897 — 12,765 24,662Less revenue recognized27 — 34,388 34,415Noncurrent deferred revenue, December 31, 2015$29,002 $— $16,484 $45,486__________(1) Noncurrent includes amounts recognized in connection with the Bison Drop Down.In September 2015, we determined that it would be remote for a certain Piceance Basin customer to ship volumes in excess of its MVC such thatit could recover certain previous MVC shortfall payments, which had been recorded as deferred revenue, as an offset to future gathering fees. Webased this determination on public statements by the customer regarding future drilling and investment plans in the area covered by the MVCcontract. Due to the remote nature of having to perform any services associated with the previously deferred gathering revenue, we evaluated (i)the terms of the customer contract, (ii) the capacity of the central receipt points for throughput volumes covered by the MVC contract and (iii) thesize of the area of mutual interest ("AMI"), including the number of drilling locations to determine what amount of previously deferred gatheringrevenue had met the criteria for revenue recognition. Our evaluation resulted in the recognition of $34.4 million of gathering services and relatedfees revenue that had been previously deferred with a corresponding reduction to deferred revenue. This represents recognition of amountsdeferred up to the September 2015 event triggering the conclusion that the associated shortfall payments should be recognized as revenue.As of December 31, 2015, accounts receivable included $12.7 million of shortfall billings related to MVC arrangements that can be utilized to offsetgathering fees in subsequent periods.8. DEBTDebt consisted of the following: December 31, 2015 2014 (In thousands)Summit Holdings variable rate senior secured revolving credit facility (2.93% at December 31, 2015 and2.67% at December 31, 2014) due November 2018$344,000 $208,000Summit Holdings 5.50% Senior unsecured notes due August 2022300,000 300,000Summit Holdings 7.50% Senior unsecured notes due July 2021300,000 300,000Total long-term debt$944,000 $808,000The aggregate amount of our debt maturities during each of the years after December 31, 2015 are as follows: Debt (In thousands)2016 $—2017 —2018 344,0002019 —2020 —Thereafter 600,000Total long-term debt $944,000106Table of ContentsRevolving Credit Facility. We have a senior secured revolving credit facility which allows for revolving loans, letters of credit and swingline loans(the "revolving credit facility"). The revolving credit facility has a $700.0 million borrowing capacity, matures in November 2018, and includes a$200.0 million accordion feature. It is secured by the membership interests of Summit Holdings and those of its subsidiaries. Substantially all ofSummit Holdings' and its subsidiaries' assets are pledged as collateral under the revolving credit facility. The revolving credit facility, and SummitHoldings' obligations, are guaranteed by SMLP and each of its subsidiaries.Borrowings under the revolving credit facility bear interest at the London Interbank Offered Rate ("LIBOR") or an Alternate Base Rate ("ABR") plusan applicable margin ranging from 0.75% to 1.75% for ABR borrowings and 1.75% to 2.75% for LIBOR borrowings, with the commitment feeranging from 0.30% to 0.50% in each case based on our relative leverage at the time of determination. At December 31, 2015, the applicablemargin under LIBOR borrowings was 2.50%, the interest rate was 2.93% and the unused portion of the revolving credit facility totaled $356.0million (subject to a commitment fee of 0.50%).The revolving credit agreement contains affirmative and negative covenants customary for credit facilities of its size and nature that, among otherthings, limit or restrict the ability to: (i) incur additional debt; (ii) make investments; (iii) engage in certain mergers, consolidations, acquisitions orsales of assets; (iv) enter into swap agreements and power purchase agreements; (v) enter into leases that would cumulatively obligate paymentsin excess of $30.0 million over any 12-month period; and (vi) prohibits the payment of distributions by Summit Holdings if a default then exists orwould result therefrom, and otherwise limits the amount of distributions Summit Holdings can make. In addition, the revolving credit facilityrequires Summit Holdings to maintain a ratio of consolidated trailing 12-month earnings before interest, income taxes, depreciation andamortization ("EBITDA," as defined in the credit agreement) to net interest expense of not less than 2.5 to 1.0 (as defined in the credit agreement)and a ratio of total net indebtedness to consolidated trailing 12-month EBITDA of not more than 5.0 to 1.0, or not more than 5.5 to 1.0 for up to 270days following certain acquisitions. Additionally, the total leverage ratio upper limit can be increased from 5.0 to 1.0 to 5.5 to 1.0 at our option,subject to the inclusion of a senior secured leverage ratio (senior secured net indebtedness to consolidated trailing 12-month EBITDA, as definedin the credit agreement) upper limit of 3.75 to 1.0.On February 25, 2016, we closed on an amendment to our revolving credit facility, which will become effective contingent upon and concurrentwith the Initial Close of the 2016 Drop Down (the "Contingent Amendment"). In connection with the Contingent Amendment, we have receivedcommitments to (i) increase the revolving credit facility's borrowing capacity from $700.0 million to $1.25 billion, (ii) include a new investmentbasket allowing the Co-Issuers (as defined below) to buy back up to $100.0 million of our outstanding senior unsecured notes and (iii) approvevarious amendments to facilitate the 2016 Drop Down. There will be no change to the pricing or the maturity date of the revolving credit facility inconnection with the Contingent Amendment.As of December 31, 2015, we were in compliance with the revolving credit facility's covenants. There were no defaults or events of default duringthe year ended December 31, 2015.Senior Notes. In July 2014, Summit Holdings and its 100% owned finance subsidiary, Summit Midstream Finance Corp. ("Finance Corp.,"together with Summit Holdings, the "Co-Issuers"), co-issued $300.0 million of 5.50% senior unsecured notes maturing August 15, 2022 (the "5.5%senior notes"). In June 2013, the Co-Issuers co-issued $300.0 million of 7.50% senior unsecured notes maturing July 1, 2021 (the "7.5% seniornotes").SMLP and all of its subsidiaries other than the Co-Issuers (the "Guarantors") have fully and unconditionally and jointly and severally guaranteedthe 5.5% senior notes and the 7.5% senior notes. SMLP has no independent assets or operations. Summit Holdings has no assets or operationsother than its ownership of its wholly owned subsidiaries and activities associated with its borrowings under the revolving credit facility, the 5.5%senior notes and the 7.5% senior notes. Finance Corp. has no independent assets or operations and was formed for the sole purpose of being aco-issuer of certain of Summit Holdings' indebtedness, including the 5.5% senior notes and the 7.5% senior notes. There are no significantrestrictions on the ability of SMLP or Summit Holdings to obtain funds from its subsidiaries by dividend or loan.5.5% Senior Notes. We will pay interest on the 5.5% senior notes semi-annually in cash in arrears on February 15 and August 15 of each year,commencing February 15, 2015. The 5.5% senior notes are senior, unsecured obligations and rank equally in right of payment with all of ourexisting and future senior obligations. The 5.5% senior notes are effectively subordinated in right of payment to all of our secured indebtedness, tothe extent of the collateral securing such indebtedness. We used the proceeds from the issuance of the 5.5% senior notes to repay a portion ofthe balance outstanding under our revolving credit facility.107Table of ContentsAt any time prior to August 15, 2017, the Co-Issuers may redeem up to 35% of the aggregate principal amount of the 5.5% senior notes at aredemption price of 105.500% of the principal amount of the 5.5% senior notes, plus accrued and unpaid interest, if any, to the redemption date,with an amount not greater than the net cash proceeds of certain equity offerings. On and after August 15, 2017, the Co-Issuers may redeem all orpart of the 5.5% senior notes at a redemption price of 104.125% (with the redemption premium declining ratably each year to 100.000% on andafter August 15, 2020), plus accrued and unpaid interest, if any. Debt issuance costs of $5.1 million, recognized in other noncurrent assets, arebeing amortized over the life of the senior notes.The 5.5% senior notes' indenture restricts SMLP’s and the Co-Issuers’ ability and the ability of certain of their subsidiaries to: (i) incur additionaldebt or issue preferred stock; (ii) make distributions, repurchase equity or redeem subordinated debt; (iii) make payments on subordinatedindebtedness; (iv) create liens or other encumbrances; (v) make investments, loans or other guarantees; (vi) sell or otherwise dispose of a portionof their assets; (vii) engage in transactions with affiliates; and (viii) make acquisitions or merge or consolidate with another entity. Thesecovenants are subject to a number of important exceptions and qualifications. At any time when the senior notes are rated investment grade byeach of Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Services and no default or event of default under the indenture hasoccurred and is continuing, many of these covenants will terminate.The 5.5% senior notes' indenture provides that each of the following is an event of default: (i) default for 30 days in the payment when due ofinterest on the 5.5% senior notes; (ii) default in the payment when due of the principal of, or premium, if any, on the 5.5% senior notes; (iii) failureby the Co-Issuers or SMLP to comply with certain covenants relating to mergers and consolidations, change of control or asset sales; (iv) failureby SMLP for 180 days after notice to comply with certain covenants relating to the filing of reports with the SEC; (v) failure by the Co-Issuers orSMLP for 30 days after notice to comply with any of the other agreements in the indenture; (vi) specified defaults under any mortgage, indenture orinstrument under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed by SMLP orany of its restricted subsidiaries (or the payment of which is guaranteed by SMLP or any of its restricted subsidiaries); (vii) failure by SMLP or anyof its restricted subsidiaries to pay certain final judgments aggregating in excess of $20.0 million; (viii) except as permitted by the indenture, anyguarantee of the senior notes shall cease for any reason to be in full force and effect or any guarantor, or any person acting on behalf of anyguarantor, shall deny or disaffirm its obligations under its guarantee of the senior notes; and (ix) certain events of bankruptcy, insolvency orreorganization described in the indenture. In the case of an event of default as described in the foregoing clause (ix), all outstanding 5.5% seniornotes will become due and payable immediately without further action or notice. If any other event of default occurs and is continuing, the trusteeor the holders of at least 25% in principal amount of the then outstanding 5.5% senior notes may declare all the 5.5% senior notes to be due andpayable immediately.As of December 31, 2015, we were in compliance with the covenants of the 5.5% senior notes and there were no defaults or events of defaultduring the year ended December 31, 2015.7.5% Senior Notes. The 7.5% senior notes were sold within the United States only to qualified institutional buyers in reliance on Rule 144A underthe Securities Act of 1933, as amended (the "Securities Act"), and outside the United States only to non-U.S. persons in reliance on Regulation Sunder the Securities Act.We pay interest on the 7.5% senior notes semi-annually in cash in arrears on January 1 and July 1 of each year. The 7.5% senior notes aresenior, unsecured obligations and rank equally in right of payment with all of our existing and future senior obligations. The 7.5% senior notes areeffectively subordinated in right of payment to all of our secured indebtedness, to the extent of the collateral securing such indebtedness. We usedthe proceeds from the issuance of the 7.5% senior notes to repay a portion of the balance outstanding under our revolving credit facility.Effective as of April 7, 2014, all of the holders of our 7.5% senior notes exchanged their unregistered senior notes and the guarantees of thosenotes for registered notes and guarantees. The terms of the registered senior notes are substantially identical to the terms of the unregisteredsenior notes, except that the transfer restrictions, registration rights and provisions for additional interest relating to the unregistered senior notesdo not apply to the registered senior notes.At any time prior to July 1, 2016, the Co-Issuers may redeem up to 35% of the aggregate principal amount of the 7.5% senior notes at aredemption price of 107.500% of the principal amount of the 7.5% senior notes, plus accrued and unpaid interest, if any, to the redemption date,with an amount not greater than the net cash proceeds of certain equity offerings. On and after July 1, 2016, the Co-Issuers may redeem all or partof the 7.5% senior notes at a redemption price of 105.625% (with the redemption premium declining ratably each year to 100.000% on and afterJuly 1, 2019), plus accrued and unpaid interest, if any. Debt issuance costs of $7.4 million, recognized in other noncurrent assets, are beingamortized over the life of the senior notes.108Table of ContentsThe 7.5% senior notes indenture restricts SMLP’s and the Co-Issuers’ ability and the ability of certain of their subsidiaries to: (i) incur additionaldebt or issue preferred stock; (ii) make distributions, repurchase equity or redeem subordinated debt; (iii) make payments on subordinatedindebtedness; (iv) create liens or other encumbrances; (v) make investments, loans or other guarantees; (vi) sell or otherwise dispose of a portionof their assets; (vii) engage in transactions with affiliates; and (viii) make acquisitions or merge or consolidate with another entity. Thesecovenants are subject to a number of important exceptions and qualifications. At any time when the senior notes are rated investment grade byeach of Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Services and no default or event of default under the indenture hasoccurred and is continuing, many of these covenants will terminate.The 7.5% senior notes indenture provides that each of the following is an event of default: (i) default for 30 days in the payment when due ofinterest on the 7.5% senior notes; (ii) default in the payment when due of the principal of, or premium, if any, on the 7.5% senior notes; (iii) failureby the Co-Issuers or SMLP to comply with certain covenants relating to mergers and consolidations, change of control or asset sales; (iv) failureby SMLP for 180 days after notice to comply with certain covenants relating to the filing of reports with the SEC; (v) failure by the Co-Issuers orSMLP for 30 days after notice to comply with any of the other agreements in the indenture; (vi) specified defaults under any mortgage, indenture orinstrument under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed by SMLP orany of its restricted subsidiaries (or the payment of which is guaranteed by SMLP or any of its restricted subsidiaries); (vii) failure by SMLP or anyof its restricted subsidiaries to pay certain final judgments aggregating in excess of $20.0 million; (viii) except as permitted by the indenture, anyguarantee of the senior notes shall cease for any reason to be in full force and effect or any guarantor, or any person acting on behalf of anyguarantor, shall deny or disaffirm its obligations under its guarantee of the 7.5% senior notes; and (ix) certain events of bankruptcy, insolvency orreorganization described in the indenture. In the case of an event of default as described in the foregoing clause (ix), all outstanding 7.5% seniornotes will become due and payable immediately without further action or notice. If any other event of default occurs and is continuing, the trusteeor the holders of at least 25% in principal amount of the then outstanding 7.5% senior notes may declare all the 7.5% senior notes to be due andpayable immediately.As of December 31, 2015, we were in compliance with the covenants for the 7.5% senior notes and there were no defaults or events of defaultduring the year ended December 31, 2015.9. FINANCIAL INSTRUMENTSConcentrations of Credit Risk. Financial instruments that potentially subject us to concentrations of credit risk consist of cash and accountsreceivable. We maintain our cash in bank deposit accounts that frequently exceed federally insured limits. We have not experienced any losses insuch accounts and do not believe we are exposed to any significant risk.Accounts receivable primarily comprise amounts due for the gathering, treating and processing services we provide to our customers and also thesale of natural gas liquids resulting from our processing services. This industry concentration has the potential to impact our overall exposure tocredit risk, either positively or negatively, in that our customers may be similarly affected by changes in economic, industry or other conditions.We monitor the creditworthiness of our counterparties and can require letters of credit for receivables from counterparties that are judged to havesubstandard credit, unless the credit risk can otherwise be mitigated. Our top five customers or counterparties accounted for 70% of totalaccounts receivable at December 31, 2015, compared with 62% as of December 31, 2014.Fair Value. The carrying amount of cash and cash equivalents, accounts receivable and accounts payable reported on the balance sheetapproximates fair value due to their short-term maturities.A summary of the estimated fair value of our debt financial instruments follows. December 31, 2015 December 31, 2014 Carryingvalue Estimatedfair value(Level 2) Carryingvalue Estimatedfair value(Level 2) (In thousands)Revolving credit facility$344,000 $344,000 $208,000 $208,0005.5% Senior notes300,000 224,000 300,000 281,7507.5% Senior notes300,000 257,000 300,000 306,750109Table of ContentsThe revolving credit facility’s carrying value on the balance sheet is its fair value due to its floating interest rate. The fair value for the senior notesis based on an average of nonbinding broker quotes as of December 31, 2015 and December 31, 2014. The use of different market assumptions orvaluation methodologies may have a material effect on the estimated fair value of the senior notes.10. PARTNERS' CAPITALA rollforward of the number of common limited partner, subordinated limited partner and general partner units follows. Common Subordinated General partner TotalUnits, January 1, 201324,412,427 24,409,850 996,320 49,818,597Units issued to a subsidiary of Summit Investments in connectionwith the Bison Drop Down1,553,849 — 31,711 1,585,560Units issued to a subsidiary of Summit Investments in connectionwith the Mountaineer Acquisition3,107,698 — 63,422 3,171,120Net units issued under SMLP LTIP5,892 — — 5,892Units, January 1, 201429,079,866 24,409,850 1,091,453 54,581,169Units issued in connection with the March Equity 2014 Offering5,300,000 — 108,337 5,408,337Net units issued under SMLP LTIP46,647 — 861 47,508Units, December 31, 201434,426,513 24,409,850 1,200,651 60,037,014Units issued in connection with the May 2015 Equity Offering7,475,000 — 152,551 7,627,551Net units issued under SMLP LTIP161,131 — 1,498 162,629Units, December 31, 201542,062,644 24,409,850 1,354,700 67,827,194Unit Offerings. In March 2014, we completed an underwritten public offering of 10,350,000 common units at a price of $38.75 per unit, of which5,300,000 common units were offered by the Partnership and 5,050,000 common units were offered by a subsidiary of Summit Investments,pursuant to an effective shelf registration statement on Form S-3 previously filed with the SEC. Concurrently, our general partner made a capitalcontribution to maintain its 2% general partner interest in SMLP. We used the proceeds from the primary offering and the general partner capitalcontribution to fund a portion of the purchase of Red Rock Gathering.In September 2014, a subsidiary of Summit Investments completed an underwritten public offering of 4,347,826 SMLP common units pursuant toan effective shelf registration statement on Form S-3 previously filed with the SEC. We did not receive any proceeds from this offering.In May 2015, we completed an underwritten public offering of 6,500,000 common units at a price of $30.75 per unit pursuant to an effective shelfregistration statement on Form S-3 previously filed with the SEC (the "May 2015 Equity Offering"). On May 22, 2015, the underwriters exercised infull their option to purchase an additional 975,000 common units from us at a price of $30.75 per unit. Concurrent with both transactions, ourgeneral partner made a capital contribution to us to maintain its 2% general partner interest.Subordination. The principal difference between our common units and subordinated units is that in any quarter during the subordination period,holders of the subordinated units are not entitled to receive any distribution of available cash until the common units have received the minimumquarterly distribution ("MQD," as defined below) plus any arrearages in the payment of the MQD from prior quarters. The subordination period endson the first business day after we have earned and paid at least $1.60 (the MQD on an annualized basis) on each outstanding common unit andsubordinated unit and the corresponding distribution on the general partner's 2.0% interest for each of three consecutive, non-overlapping four-quarter periods ending on or after December 31, 2015. The subordination period ended in conjunction with the February 2016 distribution paymentin respect of the fourth quarter of 2015 and the then-outstanding subordinated units converted to common units on a one-for-one basis.Summit Investments' Equity in Contributed Subsidiaries. Summit Investments' equity in contributed subsidiaries represents its position in thenet assets of Polar and Divide, Red Rock Gathering and Bison Midstream that have been acquired by SMLP. The balance also reflects net incomeattributable to Summit Investments for110Table of ContentsPolar and Divide, Red Rock Gathering and Bison Midstream for the periods beginning on their respective acquisition dates by Summit Investmentsand ending on the dates they were acquired by the Partnership. During the years ended December 31, 2015, 2014 and 2013, net income wasattributed to Summit Investments for:•Polar and Divide for the period from February 16, 2013 to May 18, 2015;•Red Rock Gathering for the period from January 1, 2013 to March 18, 2014; and•Bison Midstream for the period from February 16, 2013 to June 4, 2013.Although included in partners' capital, any net income attributable to Summit Investments is excluded from the calculation of EPU.Polar and Divide Drop Down. On May 18, 2015, we acquired 100% of the membership interests in Polar Midstream and Epping from a subsidiaryof Summit Investments. We paid total net cash consideration of $285.7 million in exchange for Summit Investments' $416.0 million net investmentin Polar Midstream and Epping, including customary working capital and capital expenditures adjustments (see Note 15 for additional information).We recognized a capital contribution from Summit Investments for the difference between cash consideration paid and Summit Investments' netinvestment in Polar Midstream and Epping.The calculation of the capital contribution and its allocation to partners' capital follow (dollars in thousands).Summit Investments' net investment in Polar Midstream and Epping $416,044Total net cash consideration paid to a subsidiary of Summit Investments 285,677Excess of acquired carrying value over consideration paid $130,367 Allocation of capital contribution: General partner interest$2,607 Common limited partner interest80,079 Subordinated limited partner interest47,681 Partners' capital contribution – excess of acquired carrying value over consideration paid $130,367Red Rock Drop Down. On March 18, 2014, we acquired 100% of the membership interests in Red Rock Gathering from a subsidiary of SummitInvestments. We paid total net cash consideration of $307.9 million (including working capital adjustments accrued in December 2014 and cashsettled in February 2015) in exchange for Summit Investments' $241.8 million net investment in Red Rock Gathering. As a result of the excess ofthe purchase price over acquired carrying value of Red Rock Gathering, SMLP recognized a capital distribution to Summit Investments.The calculation of the capital distribution and its allocation to partners' capital follow (dollars in thousands).Summit Investments' net investment in Red Rock Gathering $241,817Total net cash consideration paid to a subsidiary of Summit Investments 307,941Excess of consideration paid over acquired carrying value $(66,124) Allocation of capital distribution: General partner interest$(1,323) Common limited partner interest(37,910) Subordinated limited partner interest(26,891) Partners' capital distribution – excess of consideration paid over acquired carrying value $(66,124)Bison Drop Down. On June 4, 2013, a subsidiary of Summit Investments entered into a purchase and sale agreement with SMLP whereby SMLPacquired the Bison Gas Gathering system. In exchange for its $305.4 million net investment in Bison Midstream, SMLP paid Summit Investmentsand the general partner total cash and unit consideration of $248.9 million. As a result of the contribution of net assets in excess of consideration,SMLP recognized a capital contribution from Summit Investments.111Table of ContentsThe calculation of the capital contribution and its allocation to partners' capital follow (dollars in thousands).Summit Investments' net investment in Bison Midstream $305,449Aggregate cash paid to Summit Investments$200,000 Issuance of 1,553,849 SMLP common units to Summit Investments47,936 Issuance of 31,711 SMLP general partner units to the general partner978 Total consideration paid to a subsidiary of Summit Investments 248,914Excess of acquired carrying value over consideration paid $56,535 Allocation of capital contribution: General partner interest$1,131 Common limited partner interest28,558 Subordinated limited partner interest26,846 Partners' capital contribution – excess of acquired carrying value over consideration paid $56,535The number of units issued to Summit Investments and the general partner in connection with the Bison Drop Down was calculated based on anassumed equity issuance of $50.0 million and the five-day volume-weighted-average price as of June 3, 2013 of $31.53 per unit. The units werethen valued as of June 4, 2013 (the date of closing) using the June 4, 2013 closing price of SMLP's units of $30.85.The general partner interest allocation was calculated based on a 2% general partner interest in the contribution of assets in excess ofconsideration given by SMLP to Summit Investments. Common and subordinated limited partner interests allocations were calculated as theirrespective percentages of total limited partner capital applied to the balance of the contribution by Summit Investments after giving effect to thegeneral partner allocation.Mountaineer Acquisition. We completed the acquisition of Mountaineer Midstream on June 21, 2013. The purchase price of $210.0 million wasfunded with $110.0 million of borrowings under SMLP’s revolving credit facility and the issuance for cash of $100.0 million of SMLP common unitsand general partner interests to a subsidiary of Summit Investments and the general partner.The allocation and valuation of units issued to partially fund the Mountaineer Acquisition follow (dollars in thousands).Issuance of 3,107,698 SMLP common units to Summit Investments$98,000Issuance of 63,422 SMLP general partner units to the general partner2,000Issuance of units in connection with the Mountaineer Acquisition$100,000Pursuant to a unit purchase agreement, the number of units issued to Summit Investments and the general partner in connection with theMountaineer Acquisition was calculated based on an assumed equity issuance of $100.0 million and the five-day volume-weighted-average priceas of June 3, 2013 of $31.53 per unit.Cash Distribution PolicyOur cash distribution policy, as expressed in our partnership agreement, may not be modified or repealed without amending our partnershipagreement. Our partnership agreement requires that we distribute all of our available cash (as defined below) within 45 days after the end of eachquarter to unitholders of record on the applicable record date. Our policy is to distribute to our unitholders an amount of cash each quarter that isequal to or greater than the MQD stated in our partnership agreement.General Partner Interest. Our general partner is entitled to 2.0% of all distributions that we make prior to our liquidation. Our general partner hasthe right, but not the obligation, to contribute a proportionate amount of capital to us to maintain its current general partner interest. Our generalpartner's initial 2.0% interest in our distributions will be reduced if we issue additional units in the future and our general partner does not contributea proportionate amount of capital to us to maintain its 2.0% general partner interest.Minimum Quarterly Distribution. Our partnership agreement generally requires that we make a minimum quarterly distribution to the holders ofour common units and subordinated units of $0.40 per unit, or $1.60 on an annualized basis, to the extent we have sufficient cash from ouroperations after the establishment of cash reserves112Table of Contentsand the payment of costs and expenses, including reimbursements of expenses to our general partner. The amount of distributions paid under ourpolicy is subject to fluctuations based on the amount of cash we generate from our business and the decision to make any distribution isdetermined by our general partner, taking into consideration the terms of our partnership agreement.Definition of Available Cash. Available cash generally means, for any quarter, all cash on hand at the end of that quarter:•less the amount of cash reserves established by our general partner at the date of determination of available cash for that quarter to:•provide for the proper conduct of our business (including reserves for our future capital expenditures and anticipated future debt servicerequirements);•comply with applicable law, any of our debt instruments or other agreements; or•provide funds for distributions to our unitholders and to our general partner for any one or more of the next four quarters (provided that ourgeneral partner may not establish cash reserves for distributions unless it determines that the establishment of reserves will not preventus from distributing the minimum quarterly distribution on all common units and any cumulative arrearages on such common units for thecurrent quarter);•plus, if our general partner so determines, all or any portion of the cash on hand on the date of determination of available cash for the quarterresulting from working capital borrowings made subsequent to the end of such quarter.Cash Distributions Paid and Declared. We paid the following per-unit distributions during the years ended December 31: Year ended December 31, 2015 2014 2013Per-unit annual distributions to unitholders$2.270 $2.040 $1.725On January 21, 2016, the board of directors of our general partner declared a distribution of $0.575 per unit for the quarterly period endedDecember 31, 2015. This distribution, which totaled $41.0 million, was paid on February 12, 2016 to unitholders of record at the close of businesson February 5, 2016. As noted above, the payment of this distribution triggered the end of the subordination period and all of the then-outstandingsubordinated units converted to common units on a one-for-one basis on February 16, 2016.We allocated the February 2016 distribution in accordance with the third target distribution level (see "Incentive Distribution Rights—PercentageAllocations of Available Cash" below for additional information.)Incentive Distribution Rights. Our general partner also currently holds IDRs that entitle it to receive increasing percentage allocations, up to amaximum of 50.0% (as set forth in the chart below), of the cash we distribute from operating surplus in excess of $0.46 per unit per quarter. Themaximum distribution includes distributions paid to our general partner on its 2.0% general partner interest and assumes that our general partnermaintains its general partner interest at 2.0%. The maximum distribution does not include any distributions that our general partner may receive onany common or subordinated units that it owns.Percentage Allocations of Available Cash. The following table illustrates the percentage allocations of available cash between the unitholders andour general partner based on the specified target distribution levels. The amounts set forth in the column Marginal Percentage Interest inDistributions are the percentage interests of our general partner and the unitholders in any available cash we distribute up to and including thecorresponding amount in the column Total Quarterly Distribution Per Unit Target Amount. The percentage interests shown for our unitholders andour general partner for the minimum quarterly distribution are also applicable to quarterly distribution amounts that are less than the minimumquarterly distribution. The percentage interests set forth below for our general partner include its 2.0% general partner interest and assume that ourgeneral partner has contributed any additional capital necessary to maintain its 2.0% general partner interest, our general partner has nottransferred its IDRs and that there are no arrearages on common units.113Table of Contents Total quarterly distribution per unittarget amount Marginal percentage interest in distributions Unitholders General partnerMinimum quarterly distribution$0.40 98.0% 2.0%First target distribution$0.40 up to $0.46 98.0% 2.0%Second target distributionabove $0.46 up to $0.50 85.0% 15.0%Third target distributionabove $0.50 up to $0.60 75.0% 25.0%Thereafterabove $0.60 50.0% 50.0%We reached the second target distribution in connection with the distribution declared in respect of the fourth quarter of 2013. We reached the thirdtarget distribution in connection with the distribution declared in respect of the second quarter of 2014.Our payment of IDRs as reported in distributions to unitholders – general partner in the statement of partners' capital during the years endedDecember 31 follow. Year ended December 31, 2015 2014 2013 (In thousands)IDR payments$6,743 $2,326 $—Our general partner was not entitled to receive IDR payments prior to the distribution declared and paid in respect of the fourth quarter of 2013based on the amount of the distributions declared and paid per common and subordinated unit.For the purposes of calculating net income attributable to general partner, the financial impact of IDRs is recognized in respect of the quarter forwhich the distributions were declared. For the purposes of calculating distributions to unitholders in the statements of partners' capital and cashflows, IDR payments are recognized in the quarter in which they are paid.114Table of Contents11. EARNINGS PER UNITThe following table details the components of (loss) earnings per limited partner unit. Year ended December 31, 2015 2014 2013 (In thousands, except per-unit amounts)Numerator for basic and diluted EPU: Allocation of net (loss) income among limited partner interests: Net (loss) income attributable to common units$(125,437) $(16,324) $23,227Net (loss) income attributable to subordinated units(70,173) (10,793) 19,322Net (loss) income attributable to limited partners$(195,610) $(27,117) $42,549 Denominator for basic and diluted EPU: Weighted-average common units outstanding – basic39,217 33,311 26,951Effect of nonvested phantom units— — 150Weighted-average common units outstanding – diluted39,217 33,311 27,101 Weighted-average subordinated units outstanding – basic and diluted24,410 24,410 24,410 (Loss) earnings per limited partner unit: Common unit – basic$(3.20) $(0.49) $0.86Common unit – diluted$(3.20) $(0.49) $0.86Subordinated unit – basic and diluted$(2.88) $(0.44) $0.79During the years ended December 31, 2015 and 2014, we excluded 109,201 and 231,875 units, respectively, in our calculation of the effect ofnonvested phantom units because they were anti-dilutive. There were no anti-dilutive units during for the year ended December 31, 201312. UNIT-BASED COMPENSATIONSMLP Long-Term Incentive Plan. The SMLP Long-Term Incentive Plan (the "SMLP LTIP") provides for equity awards to eligible officers,employees, consultants and directors of our general partner and its affiliates, thereby linking the recipients' compensation directly to SMLP’sperformance. The SMLP LTIP is administered by our general partner's board of directors, though such administration function may be delegated toa committee appointed by the board. A total of 5.0 million common units was reserved for issuance pursuant to and in accordance with the SMLPLTIP. As of December 31, 2015, approximately 4.4 million common units remained available for future issuance.The SMLP LTIP provides for the granting, from time to time, of unit-based awards, including common units, restricted units, phantom units, unitoptions, unit appreciation rights, distribution equivalent rights, profits interest units and other unit-based awards. Grants are made at the discretionof the board of directors or compensation committee of our general partner. The administrator of the SMLP LTIP may make grants under theSMLP LTIP that contain such terms, consistent with the SMLP LTIP, as the administrator may determine are appropriate, including vestingconditions. The administrator of the SMLP LTIP may, in its discretion, base vesting on the grantee's completion of a period of service or upon theachievement of specified financial objectives or other criteria or upon a change of control (as defined in the SMLP LTIP) or as otherwise describedin an award agreement. Termination of employment prior to vesting will result in forfeiture of the awards, except in limited circumstances asdescribed in the plan documents. Units that are canceled or forfeited will be available for delivery pursuant to other awards.115Table of ContentsThe following table presents phantom and restricted unit activity: Units Weighted-averagegrant datefair valueNonvested phantom and restricted units, January 1, 2013131,558 $20.00Phantom and restricted units granted156,165 26.33Phantom units forfeited(4,041) 25.99Nonvested phantom and restricted units, December 31, 2013283,682 23.41Phantom units granted136,867 42.32Phantom and restricted units vested(61,917) 25.33Phantom units forfeited(22,430) 25.56Nonvested phantom units, December 31, 2014336,202 30.61Phantom units granted289,735 29.21Phantom units vested(229,497) 27.66Phantom units forfeited(16,529) 35.09Nonvested phantom units, December 31, 2015379,911 $31.13A phantom unit is a notional unit that entitles the grantee to receive a common unit upon the vesting of the phantom unit or on a deferred basisupon specified future dates or events or, in the discretion of the administrator, cash equal to the fair market value of a common unit. Distributionequivalent rights for each phantom unit provide for a lump sum cash amount equal to the accrued distributions from the grant date to be paid incash upon the vesting date. A restricted unit is a common limited partner unit that is subject to a restricted period during which the unit remainssubject to forfeiture.The phantom units granted in connection with the IPO vested on the third anniversary of the IPO. All other phantom units granted to date vestratably over a three-year period. Grant date fair value is determined based on the closing price of our common units on the date of grant multipliedby the number of phantom units awarded to the grantee. Holders of all phantom units granted to date are entitled to receive distribution equivalentrights for each phantom unit, providing for a lump sum cash amount equal to the accrued distributions from the grant date of the phantom units tobe paid in cash upon the vesting date. Upon vesting, phantom unit awards may be settled, at our discretion, in cash and/or common units, but thecurrent intention is to settle all phantom unit awards with common units. The restricted units granted in 2013 maintained the vesting provisions ofthe share-based compensation awards they replaced, each of which had an original vesting period of four years.As of December 31, 2015, the unrecognized unit-based compensation related to the SMLP LTIP was $5.5 million. Incremental unit-basedcompensation will be recorded over the remaining vesting period of approximately 1.17 years. Due to the limited and immaterial forfeiture historyassociated with the grants under the SMLP LTIP, no forfeitures were assumed in the determination of estimated compensation expense.Unit-based compensation recognized in general and administrative expense related to awards under the SMLP LTIP follows. Year ended December 31, 2015 2014 2013 (In thousands)SMLP LTIP unit-based compensation$6,174 $4,696 $2,999SMP Net Profits Interests. In connection with the formation of Summit Investments in 2009, up to 7.5% of total membership interests wereauthorized for issuance. SMP Net Profits Interests were granted through January 2012. Each grant vests ratably over five years and provides foraccelerated vesting in certain limited circumstances. Summit Investments valued the SMP Net Profits Interests utilizing an option pricing method,which modeled membership interests as call options on the underlying equity value of Summit Investments and considered the rights andpreferences of each class of equity to allocate a fair value to each class. Summit Investments retained the SMP Net Profits Interests and, assuch, they are not reflected in SMLP's financial statements subsequent to the IPO, except as noted below.116Table of ContentsDue to common control, we recognized the SMP Net Profits Interests' noncash compensation expense that had been allocated to the contributedsubsidiaries prior to their respective drop down date. Unit-based compensation recognized in general and administrative expense related to theSMP Net Profits Interests was as follows: Year ended December 31, 2015 2014 2013 (In thousands)SMP net profits interests unit-based compensation$85 $340 $830DFW Net Profits Interests. In connection with the formation of DFW Midstream in 2009, up to 5% of DFW Midstream's total membership interestswere authorized for issuance (the "DFW Net Profits Interests"). Grants were made in 2009 and 2010. Each grant vested ratably over four years andprovided for accelerated vesting in certain limited circumstances. The DFW Net Profits Interests were valued utilizing an option pricing method,which modeled membership interests as call options on the underlying equity value of DFW Midstream and considered the rights and preferencesof each class of equity to allocate a fair value to each class.Beginning in October 2012 and continuing into April 2013, we entered into a series of repurchases with the remaining seven holders of the then-outstanding DFW Net Profits Interests whereby we exchanged $12.2 million for their vested DFW Net Profits Interests and 7,393 SMLP restrictedunits for their unvested DFW Net Profits Interests. The repurchase prices were determined by valuing the vested and unvested net profits interestsin relation to the enterprise value of DFW Midstream and represented fair value at the dates of repurchase. Upon the conclusion of theserepurchase transactions, there were no remaining or outstanding DFW Net Profits Interests.13. RELATED-PARTY TRANSACTIONSAcquisitions. See Notes 1, 8 and 15 for disclosure of the Polar and Divide Drop Down, the Red Rock Drop Down, the Bison Drop Down and thefunding of those transactions.Reimbursement of Expenses from General Partner. Our general partner and its affiliates do not receive a management fee or othercompensation in connection with the management of our business, but will be reimbursed for expenses incurred on our behalf. Under ourpartnership agreement, we reimburse our general partner and its affiliates for certain expenses incurred on our behalf, including, without limitation,salary, bonus, incentive compensation and other amounts paid to our general partner's employees and executive officers who perform servicesnecessary to run our business. Our partnership agreement provides that our general partner will determine in good faith the expenses that areallocable to us. Due to affiliate on the consolidated balance sheet represents the payables to our general partner for expenses incurred by it andpaid on our behalf.Expenses incurred by the general partner and reimbursed by us under our partnership agreement were as follows: Year ended December 31, 2015 2014 2013 (In thousands)Operation and maintenance expense$21,537 $19,782 $14,323General and administrative expense21,116 22,370 18,662Expenses Incurred by Summit Investments. Prior to the Polar and Divide Drop Down, the Red Rock Drop Down and the Bison Drop Down,Summit Investments incurred:•certain support expenses and capital expenditures on behalf of the contributed subsidiaries. These transactions were settled periodicallythrough membership interests prior to the respective drop down;•interest expense that was related to capital projects for the contributed subsidiaries. As such, the associated interest expense wasallocated to the respective contributed subsidiary's capital projects as a noncash contribution and capitalized into the basis of the asset;and•SMP Net Profits Interests accounted for as compensatory awards. As such, the annual expense associated with the SMP Net Profits wasallocated to the respective contributed subsidiary and is reflected in general and administrative expenses in the statement of operations.117Table of Contents14. COMMITMENTS AND CONTINGENCIESOperating Leases. We and Summit Investments lease certain office space to support our operations. We have determined that our leases areoperating leases. We recognize total rent expense incurred or allocated to us in general and administrative expenses. Rent expense related tooperating leases, including rent expense incurred on our behalf and allocated to us, was as follows: Year ended December 31, 2015 2014 2013 (In thousands)Rent expense$1,990 $1,786 $1,495Future minimum lease payments for the Partnership's operating leases are immaterial.Environmental Matters. There are no material liabilities related to environmental remediation costs, arising from claims, assessments, litigation,fines, or penalties and other sources in the accompanying financial statements at December 31, 2015 or December 31, 2014. However, we canprovide no assurance that significant costs and liabilities will not be incurred in the future. We are currently not aware of any material contingentliabilities that exist with respect to environmental matters.Legal Proceedings. The Partnership is involved in various litigation and administrative proceedings arising in the normal course of business. Inthe opinion of management, any liabilities that may result from these claims or those arising in the normal course of business would notindividually or in the aggregate have a material adverse effect on the Partnership's financial position or results of operations.15. ACQUISITIONS AND DROP DOWN TRANSACTIONSPolar and Divide. On May 18, 2015, SMLP acquired the Polar and Divide system, a crude oil and produced water gathering system, includingunder-development transmission pipelines, located in North Dakota from a subsidiary of Summit Investments, subject to customary workingcapital and capital expenditures adjustments. We funded the initial combined purchase price of $290.0 million with (i) $92.5 million of borrowingsunder SMLP’s revolving credit facility and (ii) the issuance of $193.4 million of SMLP common units and $4.1 million of general partner interests toSMLP’s general partner in connection with the May 2015 Equity Offering. In July 2015, we received $4.3 million of cash from a subsidiary ofSummit Investments as payment in full for working capital and capital expenditure adjustments.Summit Investments accounted for its purchase of Meadowlark Midstream, the entity that Polar Midstream was carved out of, under theacquisition method of accounting, whereby the various gathering systems' identifiable tangible and intangible assets acquired and liabilitiesassumed were recorded based on their fair values as of initial acquisition on February 15, 2013. Their fair values were determined based uponassumptions related to future cash flows, discount rates, asset lives, and projected capital expenditures to complete the system. We recognizedthe acquisition of Polar Midstream at Summit Investments' historical cost of construction and fair value of assets and liabilities at acquisition,which reflected its fair value accounting for the acquisition of Meadowlark Midstream, due to common control.The fair values of the assets acquired and liabilities assumed as of February 15, 2013, were as follows (in thousands):Purchase price assigned to Polar Midstream $216,105Current assets$368 Property, plant, and equipment9,755 Other noncurrent assets7,201 Total assets acquired17,324 Current liabilities4,592 Total liabilities assumed$4,592 Net identifiable assets acquired 12,732Goodwill $203,373118Table of ContentsWe believe that the goodwill recorded represents the incremental value of future cash flow potential attributed to estimated future gatheringservices within the Williston Basin.Red Rock Gathering System. On March 18, 2014, SMLP acquired Red Rock Gathering, a natural gas gathering and processing system located inColorado and Utah, from a subsidiary of Summit Investments, subject to customary working capital adjustments. In October 2012, SummitInvestments acquired ETC Canyon Pipeline, LLC ("Canyon") and contributed the Canyon gathering and processing assets to Red Rock Gathering,a newly formed, wholly owned subsidiary of Summit Investments. The Partnership paid total cash consideration of $307.9 million, comprising$305.0 million at the date of acquisition and $2.9 million of working capital adjustments that were recognized in due to affiliate as of December 31,2014 and settled in February 2015. The acquisition of Red Rock Gathering was funded with the net proceeds from an offering of common units inMarch 2014, $100.0 million of borrowings under our revolving credit facility and cash on hand. Because of the common control aspects in the dropdown transaction, the Red Rock Gathering acquisition was deemed a transaction between entities under common control and, as such, wasaccounted for on an “as-if pooled” basis for all periods in which common control existed. SMLP’s financial results retrospectively include Red RockGathering’s financial results for all periods ending after October 23, 2012, the date Summit Investments acquired its interests, and before March18, 2014.In 2014, we identified and wrote off the balance associated with a working capital adjustment received after the purchase accounting measurementperiod closed for Summit Investments' acquisition of Red Rock Gathering. This write off was recognized as a $1.2 million increase to gatheringservices and other fees for the year ended December 31, 2014.Lonestar Assets. DFW Midstream completed the acquisition of certain natural gas gathering assets located in the Barnett Shale Play ("Lonestar")from Texas Energy Midstream, L.P. ("TEM") for $10.9 million on September 30, 2014. The Lonestar assets gather natural gas under two long-term,fee-based contracts. SMLP is accounting for the purchase under the acquisition method of accounting. As of September 30, 2014, we preliminarilyassigned the full purchase price to property, plant and equipment. During the fourth quarter of 2014, we received additional information from TEMand finalized the purchase price allocation.Bison Gas Gathering System. On February 15, 2013, Summit Investments acquired BTE. On June 4, 2013, a subsidiary of Summit Investmentsentered into a purchase and sale agreement with SMLP whereby SMLP acquired the Bison Gas Gathering system. The Bison Gas Gatheringsystem was carved out from Meadowlark Midstream and primarily gathers associated natural gas production from customers operating in Mountrailand Burke counties in North Dakota under long-term contracts ranging from five years to 15 years. The weighted-average life of the acquiredcontracts was 12 years upon acquisition.Summit Investments accounted for its purchase of BTE (the "BTE Transaction") under the acquisition method of accounting, whereby the variousgathering systems' identifiable tangible and intangible assets acquired and liabilities assumed were recorded based on their fair values as ofFebruary 15, 2013. The intangible assets that were acquired are composed of gas gathering agreement contract values and rights-of-wayeasements. Their fair values were determined based upon assumptions related to future cash flows, discount rates, asset lives, and projectedcapital expenditures to complete the system.Because the Bison Drop Down was executed between entities under common control, SMLP recognized the acquisition of the Bison GasGathering system at historical cost which reflected Summit Investments fair value accounting for the BTE Transaction. Furthermore, due to thecommon control aspect, the Bison Drop Down was accounted for by SMLP on an “as-if pooled” basis for all periods in which common controlexisted. Common control began on February 15, 2013 concurrent with the BTE Transaction.119Table of ContentsThe fair values of the assets acquired and liabilities assumed as of February 15, 2013, were as follows (in thousands):Purchase price assigned to Bison Gas Gathering system $303,168Current assets$5,705 Property, plant, and equipment85,477 Intangible assets164,502 Other noncurrent assets2,187 Total assets acquired257,871 Current liabilities6,112 Other noncurrent liabilities2,790 Total liabilities assumed$8,902 Net identifiable assets acquired 248,969Goodwill $54,199The Bison Drop Down closed on June 4, 2013. The total acquisition purchase price of $248.9 million was funded with $200.0 million of borrowingsunder SMLP’s revolving credit facility and the issuance of $47.9 million of SMLP common units to Summit Investments and $1.0 million of generalpartner interests to SMLP’s general partner. Summit Investments had a net investment in the Bison Gas Gathering system of $303.2 million andreceived total consideration of $248.9 million from SMLP. As a result, SMLP recognized a capital contribution from Summit Investments for thecontribution of net assets in excess of consideration paid.Mountaineer Midstream. We completed the Mountaineer Acquisition on June 21, 2013 for $210.0 million cash consideration. The MountaineerMidstream natural gas gathering and compression assets are located in the Appalachian Basin which includes the Marcellus Shale formationprimarily in Doddridge and Harrison counties in northern West Virginia. The Mountaineer Midstream system consists of newly constructed, high-pressure gas gathering pipelines, certain rights-of-way associated with the pipeline, and two compressor stations. The assets gather natural gasunder a long-term, fee-based contract with Antero Resources Corp. ("Antero"). The life of the acquired contract was 13 years upon acquisition.The Mountaineer Acquisition was funded with $110.0 million of borrowings under the Partnership's revolving credit agreement and the issuance of$100.0 million of common and general partner interests to a subsidiary of Summit Investments. For the year ended December 31, 2013, SMLPrecorded $9.6 million of revenue and $2.3 million of net income related to Mountaineer Midstream.SMLP accounted for the Mountaineer Acquisition under the acquisition method of accounting. As of June 30, 2013, we preliminarily assigned thefull $210.0 million purchase price to property plant and equipment. During the third quarter of 2013, we received additional information and, as aresult, preliminarily assigned $158.3 million of the purchase price to property, plant and equipment, $27.1 million to contract intangibles, $6.5million to rights-of-way and $18.1 million to goodwill. During the fourth quarter of 2013, we received additional information from the seller andfinalized the purchase price allocation.The final fair values of the assets acquired and liabilities assumed as of June 21, 2013, were as follows (in thousands):Purchase price assigned to Mountaineer Midstream $210,000Property, plant, and equipment$163,661 Gas gathering agreement contract intangibles24,019 Rights-of-way6,109 Total assets acquired193,789 Total liabilities assumed$— Net identifiable assets acquired 193,789Goodwill $16,211Subsequent Event. On February 25, 2016, the Partnership signed the Contribution Agreement to acquire the 2016 Drop Down Assets. Theseassets include certain natural gas, crude oil and produced water gathering systems120Table of Contentslocated in the Utica Shale, the Williston Basin and the Denver-Julesburg Basin as well as joint venture interests in a natural gas gathering systemand a condensate stabilization facility, both located in the Utica Shale.The consideration to be paid by the Partnership to SMP Holdings for the 2016 Drop Down Assets will consist of (i) a cash payment to SMPHoldings at Initial Close of $360.0 million (the “Initial Payment”) which will be funded with borrowings under the Partnership's revolving credit facilityand (ii) a deferred payment in 2020 (the “Deferred Payment”). The Deferred Payment will be equal to:•six-and-one-half (6.5) multiplied by the average adjusted EBITDA, as defined in the Contribution Agreement, of the 2016 Drop DownAssets for 2018 and 2019;•less the Initial Payment;•less all capital expenditures incurred for the 2016 Drop Down Assets between the Initial Close and December 31, 2019;•plus all adjusted EBITDA from the 2016 Drop Down Assets between the Initial Close and December 31, 2019. At the discretion of the board of directors of our general partner, the Deferred Payment can be paid in cash, SMLP common units or a combinationthereof. The present value of the Deferred Payment will be reflected as a liability on our balance sheet until paid. We currently expect that theDeferred Payment will be financed with a combination of (i) net proceeds from the sale of common units by us, (ii) the net proceeds from theissuance of senior unsecured debt by us, (iii) borrowings under our revolving credit facility and/or (iv) other internally generated sources of cash.Because of the common control aspects in a drop down transaction, the 2016 Drop Down is expected to be deemed a transaction between entitiesunder common control and, as such, will be accounted for on an “as if pooled” basis for all periods in which common control existed. Upon closingthe 2016 Drop Down on the Initial Close, SMLP’s financial results will retrospectively include the combined financial results of the 2016 Drop DownAssets for all common-control periods.Supplemental Disclosures – As-If Pooled Basis. As a result of accounting for our drop down transactions similar to a pooling of interests, ourhistorical financial statements and those of Polar Midstream, Red Rock Gathering and the Bison Gas Gathering system have been combined toreflect the historical operations, financial position and cash flows from the date common control began. Revenues and net income for thepreviously separate entities and the combined amounts, as presented in these consolidated financial statements follow. Year ended December 31, 2015 2014 2013 (In thousands)SMLP revenues$358,046 $338,941 $241,089Polar and Divide revenues (1)13,273 22,449 3,893Red Rock Gathering revenues (1) 11,313 50,114Bison Gas Gathering system revenues (1) 28,590Combined revenues$371,319 $372,703 $323,686 SMLP net (loss) income$(192,212) $(23,992) $43,584Polar and Divide net income (loss) (1)5,403 6,430 (467)Red Rock Gathering net income (1) 2,828 9,668Bison Gas Gathering system net income (1) 52Combined net (loss) income$(186,809) $(14,734) $52,837__________(1) Results are fully reflected in SMLP's revenues and net income on the date common control began, see Note 1.Unaudited Pro Forma Financial Information. The following unaudited pro forma financial information assumes that:•The acquisition of the Bison Gas Gathering system and Mountaineer Midstream occurred on January 1, 2012. The pro forma results forBison Midstream and Mountaineer Midstream were derived from revenues and net income in 2013.121Table of Contents•Pro forma net income for the year ended December 31, 2013 has been adjusted to remove the impact of $2.5 million of nonrecurringtransaction costs associated with the acquisitions of Bison Midstream and Mountaineer Midstream.•Pro forma adjustments in 2013 also reflect the impact of 4,661,547 common unit issuance and the general partner capital contribution tomaintain its 2% general partner interest to fund the acquisition of Bison Midstream and Mountaineer Midstream.•Pro forma adjustments in 2013 also reflect the impact of $310.0 million of incremental borrowings on our revolving credit facility for theBison Midstream and Mountaineer Midstream acquisitions and incremental depreciation and amortization expense associated with theacquired property, plant and equipment and contract intangibles as a result of the application of fair value accounting for Bison Midstream.•Pro forma adjustments for Polar and Divide are not required because the system was not in service prior to common control beginning inFebruary 2013.•The acquisition of the Lonestar assets is immaterial for pro forma purposes and as such has not been reflected below. Year endedDecember 31, 2013 (In thousands,except for per-unitamounts)Total Bison Midstream and Mountaineer Midstream revenues included in consolidated revenues$87,196Total Bison Midstream and Mountaineer Midstream net loss included in consolidated net income(457) Pro forma total revenues$335,837Pro forma net income46,904 Pro forma common EPU - basic and diluted$0.78Pro forma subordinated EPU - basic and diluted0.78The unaudited pro forma financial information presented above is not necessarily indicative of (i) what our financial position or results of operationswould have been if the acquisitions of Bison Midstream and Mountaineer Midstream had occurred on January 1, 2012, or (ii) what SMLP’s financialposition or results of operations will be for any future periods.122Table of Contents16. UNAUDITED QUARTERLY FINANCIAL DATASummarized information on the consolidated results of operations for each of the quarters during the two-year period ended December 31, 2015,follows. Quarter endedDecember 31,2015 Quarter endedSeptember 30,2015 Quarter endedJune 30,2015 Quarter endedMarch 31,2015 (In thousands, except per-unit amounts)Total revenues (1)$102,601 $106,557 $80,944 $81,217 Net (loss) income attributable to SMLP (2)(3)$(220,468) $23,604 $2,985 $1,667Less net (loss) income attributable to general partner, including IDRs(2,469) 2,408 1,891 1,568Net (loss) income attributable to limited partners$(217,999) $21,196 $1,094 $99 (Loss) earnings per limited partner unit: Common unit – basic$(3.28) $0.32 $0.05 $0.00Common unit – diluted$(3.28) $0.32 $0.05 $0.00Subordinated unit – basic and diluted$(3.28) $0.32 $(0.03) $0.00__________(1) Retrospectively adjusted for the impact of the Polar and Divide Drop Down and reclassification of certain revenues for Bison Midstream.(2) In the quarter ended December 31, 2015, net loss attributable to SMLP includes $248.9 million of goodwill impairments and $1.6 million of long-livedasset impairments.(3) In the quarter ended September 30, 2015, net income attributable to SMLP includes $7.7 million of long-lived asset impairments. Quarter endedDecember 31,2014 Quarter endedSeptember 30,2014 Quarter endedJune 30,2014 Quarter endedMarch 31,2014 (In thousands, except per-unit amounts)Total revenues (1)$108,230 $90,044 $90,649 $83,780 Net (loss) income attributable to SMLP (2)$(37,686) $6,113 $4,036 $3,545Less net (loss) income attributable to general partner, including IDRs689 1,204 801 431Net (loss) income attributable to limited partners$(38,375) $4,909 $3,235 $3,114 (Loss) earnings per limited partner unit: Common unit – basic$(0.65) $0.08 $0.05 $0.08Common unit – diluted$(0.65) $0.08 $0.05 $0.08Subordinated unit – basic and diluted$(0.65) $0.08 $0.05 $0.02__________(1) Retrospectively adjusted for the impact of the Polar and Divide Drop Down and reclassification of certain revenues for Bison Midstream.(2) In the quarter ended December 31, 2014, net loss attributable to SMLP includes $54.2 million of goodwill impairment and $5.5 million of long-lived assetimpairment.123Table of ContentsThe amounts for total revenues as originally filed on the respective 2015 and 2014 quarterly reports on Form 10-Q have been retrospectivelyadjusted for the impact of the Polar and Divide Drop Down and reclassification of certain revenues for Bison Midstream. There was no impact onnet income attributable to partners or EPU. A reconciliation of total revenues follows. Quarter endedSeptember 30,2015 Quarter endedJune 30,2015 Quarter endedMarch 31,2015 (In thousands)Total revenues as originally reported $103,249 $77,274 $68,579Bison revenue reclass 3,308 3,670 4,056Polar and Divide Drop Down — — 8,582Total revenues $106,557 $80,944 $81,217 Quarter endedSeptember 30,2014 Quarter endedJune 30,2014 Quarter endedMarch 31,2014 (In thousands)Total revenues as originally reported $79,030 $80,796 $76,202Bison revenue reclass 5,260 4,665 4,399Polar and Divide Drop Down 5,754 5,188 3,179Total revenues $90,044 $90,649 $83,780Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure Matters.There have been no changes in, or disagreements with, accountants on accounting and financial disclosure matters during the years endedDecember 31, 2015 and 2014.Item 9A. Controls and Procedures.Disclosure Controls and ProceduresWe maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that wefile or submit to the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), isrecorded, processed, summarized and reported within the time periods specified by the Commission’s rules and forms, and that information isaccumulated and communicated to the management of our general partner, including our general partner’s principal executive and principalfinancial officers (whom we refer to as the Certifying Officers), as appropriate to allow timely decisions regarding required disclosure. SMLP’smanagement, with the participation of the Chief Executive Officer and Chief Financial Officer of SMLP's general partner, has evaluated theeffectiveness of SMLP’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act)as of the end of the period covered by this annual report (the "Evaluation Date"). Based on such evaluation, the Chief Executive Officer and ChiefFinancial Officer of SMLP's general partner have concluded that, as of the Evaluation Date, SMLP’s disclosure controls and procedures areeffective.Changes in Internal Control Over Financial ReportingThere have not been any changes in SMLP’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f)under the Exchange Act) during the fourth fiscal quarter of 2015 that have materially affected, or are reasonably likely to materially affect, SMLP'sinternal control over financial reporting.124Table of ContentsManagement’s Annual Report On Internal Control Over Financial ReportingOur general partner is responsible for establishing and maintaining adequate internal control over financial reporting for the Partnership. With ourparticipation, an evaluation of the effectiveness of our internal control over financial reporting was conducted as of December 31, 2015, based onthe framework and criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations ofthe Treadway Commission. Based on this evaluation, management has concluded that our internal control over financial reporting was effective asof December 31, 2015. Our independent registered public accounting firm has issued an audit report on our internal control over financial reporting,included below of this report./s/ Steven J. NewbySteven J. NewbyPresident and Chief Executive Officer, Summit Midstream GP, LLC (thegeneral partner of SMLP) /s/ Matthew S. HarrisonMatthew S. HarrisonExective Vice President and Chief Financial Officer, Summit MidstreamGP, LLC (the general partner of SMLP)125Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Board of Directors of Summit Midstream GP, LLC and the unitholders of Summit Midstream Partners, LPThe Woodlands, TexasWe have audited the internal control over financial reporting of Summit Midstream Partners, LP and subsidiaries (the "Partnership") as ofDecember 31, 2015, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of SponsoringOrganizations of the Treadway Commission. The Partnership's management is responsible for maintaining effective internal control over financialreporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’sAnnual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Partnership's internal control overfinancial reporting based on our audit.We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting wasmaintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk thata material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, andperforming such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for ouropinion.A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive andprincipal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and otherpersonnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policiesand procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are beingmade only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on thefinancial statements.Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper managementoverride of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of anyevaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may becomeinadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.In our opinion, the Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015,based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of theTreadway Commission.We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidatedfinancial statements as of and for the year ended December 31, 2015 of the Partnership and our report dated February 26, 2016 expressed anunqualified opinion on those financial statements and included an explanatory paragraph related to the retrospective change in the Partnership’scomposition of reportable segments./s/ Deloitte & Touche LLPAtlanta, GeorgiaFebruary 26, 2016126Table of ContentsItem 9B. Other Information.On February 24, 2016, the board of directors of our general partner approved changes to the compensation arrangements of certain of the generalpartner’s named executive officers. Effective March 6, 2016, Mr. Newby’s annual base salary was increased to $575,000, Mr. Harrison’s annualbase salary was increased to $400,000, and Mr. Graves’ annual base salary was increased to $375,000. Also, Mr. Harrison’s, Mr. Degeyter’s, Mr.Graves’ and Mr. Mallett’s annual equity targets were increased from 125% to 150% of annual base salary, effective March 1, 2016.127Table of ContentsPART IIIItem 10. Directors, Executive Officers and Corporate Governance.Management of Summit Midstream Partners, LPWe are managed by the directors and executive officers of our general partner, Summit Midstream GP, LLC. Our general partner is not elected byour unitholders and will not be subject to re-election in the future. Summit Investments, which is controlled by Energy Capital Partners, owns andcontrols SMP Holdings, the sole owner of our general partner. SMP Holdings has the right to appoint the entire board of directors of our generalpartner, including our independent directors. All decisions of the board of directors of our general partner will require the affirmative vote of amajority of all of the directors constituting the board, provided that such majority includes at least a majority of the directors designated as an"Energy Capital Partner Designated Director" by Energy Capital Partners. The Energy Capital Partner Designated Directors are Thomas K. Lane,Christopher M. Leininger, Curtis A. Morgan, Scott A. Rogan and Jeffrey R. Spinner. Our unitholders are not entitled to directly or indirectlyparticipate in our management or operations. Our general partner is liable, as general partner, for all of our debts (to the extent not paid from ourassets), except for indebtedness or other obligations that are made specifically nonrecourse to it. Whenever possible, we intend to incurindebtedness that is nonrecourse to our general partner.Our general partner's limited liability company agreement provides that the board of directors of our general partner must obtain the approval ofmembers representing a majority interest in our general partner for certain actions affecting us. These include actions related to:•transactions with affiliates;•entering into any hedging transactions that are not in compliance with Financial Accounting Standard 133;•the voluntary liquidation, wind-up or dissolution of us or any of our subsidiaries;•making any election that would result in us being classified as other than a partnership or a disregarded entity for U.S. federal income taxpurposes;•filing or consenting to the filing of any bankruptcy, insolvency or reorganization petition for relief from debtors or protection from creditorsnaming us or any of our subsidiaries; and•effecting a material amendment to our general partner's limited liability company agreement.Currently, SMP Holdings is the sole member of our general partner.Committees of the Board of DirectorsThe board of directors of our general partner has an audit committee (the "Audit Committee"), a conflicts committee (the "Conflicts Committee")and a compensation committee (the "Compensation Committee") and may have such other committees as the board of directors shall determinefrom time to time.The table below shows the current membership of each standing board committee and indicates which directors are independent directors.Name AuditCommittee ConflictsCommittee Compensation Committee IndependentDirectorThomas K. Lane Chair NoChristopher M. Leininger NoCurtis A. Morgan NoSteven J. Newby NoJerry L. Peters Chair Member YesScott A. Rogan NoJeffrey R. Spinner Member NoSusan Tomasky Member Chair YesRobert M. Wohleber Member Member Member YesEach of the standing committees of the board of directors will have the composition and responsibilities described below.128Table of ContentsAudit Committee. Jerry L. Peters, Susan Tomasky and Robert M. Wohleber serve as the members of the Audit Committee. Mr. Peters serves asthe chair of our Audit Committee. In this role, Mr. Peters satisfies the SEC and New York Stock Exchange rules regarding independence andqualifies as an audit committee financial expert.The Audit Committee assists the board of directors in its oversight of the integrity of our financial statements and our compliance with legal andregulatory requirements and corporate policies and controls. The Audit Committee has the sole authority to retain and terminate our independentregistered public accounting firm, approve all auditing services and related fees and the terms thereof, and pre-approve any non-audit services tobe rendered by our independent registered public accounting firm. The Audit Committee is also responsible for confirming the independence andobjectivity of our independent registered public accounting firm. Our independent registered public accounting firm has unrestricted access to theAudit Committee.Our Audit Committee has adopted an audit committee charter, which is available on our website at www.summitmidstream.com.Conflicts Committee. At the direction of our general partner, our Conflicts Committee will review specific matters that may involve conflicts ofinterest in accordance with the terms of our partnership agreement. The Conflicts Committee will determine if the resolution of the conflict ofinterest is in the best interests of our partnership. There is no requirement that our general partner seek the approval of the Conflicts Committee forthe resolution of any conflict. The members of the Conflicts Committee may not be officers or employees of our general partner or directors,officers, or employees of any of its affiliates. They may not hold any ownership interest in our general partner or us and our subsidiaries other thancommon units and other awards that are granted under our incentive plans in place from time to time. Furthermore, the members of the ConflictsCommittee must meet the independence and experience standards established by the New York Stock Exchange and the Exchange Act to serveon an audit committee of a board of directors. Mr. Peters, Ms. Tomasky and Mr. Wohleber currently serve as the members of our ConflictsCommittee, with Ms. Tomasky serving as chair of the committee.Any matters approved by the Conflicts Committee in good faith will be conclusively deemed to be approved by all of our partners and not a breachby our general partner of any duties it may owe us or our unitholders. Any unitholder challenging any matter approved by the Conflicts Committeewill have the burden of proving that the members of the Conflicts Committee did not subjectively believe that the matter was in the best interestsof our partnership. Moreover, any acts taken or omitted to be taken in reliance upon the advice or opinions of experts such as legal counsel,accountants, appraisers, management consultants and investment bankers, where our general partner (or any members of the board of directors ofour general partner including any member of the Conflicts Committee) reasonably believes the advice or opinion to be within such person'sprofessional or expert competence, shall be conclusively presumed to have been taken or omitted in good faith.Compensation Committee. Mr. Lane, Mr. Spinner and Mr. Wohleber serve as the members of the Compensation Committee, with Mr. Laneserving as chair of the committee. The Compensation Committee provides oversight, administers and makes decisions regarding ourcompensation policies and plans. Although our common units are listed on the New York Stock Exchange, we have taken advantage of the“Limited Partnership” exemption to the New York Stock Exchange rule requiring listed companies to have an independent compensation committeewith a written charter.Directors and Executive OfficersDirectors are appointed for a term of one year and hold office until their successors have been elected or qualified or until the earlier of their death,resignation, removal or disqualification. Officers serve at the discretion of the board of directors of our general partner.129Table of ContentsThe following table shows information for the directors and executive officers of our general partner as of February 26, 2016.Name Age Position with Summit Midstream GP, LLCSteven J. Newby 43 President, Chief Executive Officer and DirectorMatthew S. Harrison 45 Executive Vice President and Chief Financial OfficerBrock M. Degeyter 39 Executive Vice President, General Counsel, Chief Compliance Officer and SecretaryBrad N. Graves 49 Executive Vice President, Corporate Development and Chief Commercial OfficerLeonard W. Mallett 59 Executive Vice President and Chief Operations OfficerThomas K. Lane 59 DirectorChristopher M. Leininger 47 DirectorCurtis A. Morgan 55 DirectorJerry L. Peters 58 DirectorScott A. Rogan 45 DirectorJeffrey R. Spinner 34 DirectorSusan Tomasky 62 DirectorRobert M. Wohleber 65 DirectorSteven J. Newby has been the President and Chief Executive Officer of our general partner since May 2012. Mr. Newby was a founding memberof Summit Investments and has been the President and Chief Executive Officer of Summit Investments since its formation in September 2009.Mr. Newby was a founding member of SunTrust Bank's Corporate Energy industry specialty group and ultimately became a Managing Director andHead of the Project Finance Group within SunTrust's Capital Markets division. In 2007, Mr. Newby joined ING Investment Management to managea $300 million proprietary fund focused on the private and public investment in the energy infrastructure space. Mr. Newby is a graduate of theUniversity of North Carolina at Chapel Hill with a B.S. in Business Administration with a concentration in Finance.Matthew S. Harrison has been the Executive Vice President and Chief Financial Officer of our general partner since March 2015 and was SeniorVice President and Chief Financial Officer of our general partner from May 2012 to March 2015. Prior to joining our general partner, Mr. Harrisonwas the Senior Vice President and Chief Financial Officer of Summit Investments since September 2011. Mr. Harrison joined Summit Investmentsfrom Hiland Partners, LP, where he served as Executive Vice President and Chief Financial Officer, Secretary and Director from February 2008 toSeptember 2011. Prior to joining Hiland, Mr. Harrison was a Director in the Energy & Power Merger & Acquisitions group at Wachovia CapitalMarkets from October 2007 to February 2008 and a Director in the Mergers & Acquisitions group at A.G. Edwards & Sons, Inc. from July 1999 toOctober 2007. Mr. Harrison was a Senior Accountant for Price Waterhouse for five years. Mr. Harrison received an MBA from NorthwesternUniversity–Kellogg Graduate School of Management in 1999 and a B.S. in Accounting from the University of Tennessee in 1992.Brock M. Degeyter has been the Executive Vice President, General Counsel, Chief Compliance Officer and Secretary of our general partner sinceMarch 2015. Previously, he served as Senior Vice President and General Counsel from May 2012 until March 2015. Mr. Degeyter has been theChief Compliance Officer of our general partner since January 2014. Mr. Degeyter joined Summit Investments in January 2012 as Senior VicePresident and General Counsel. Prior to joining Summit Investments, Mr. Degeyter worked in the corporate legal department for Energy FutureHoldings (formerly TXU Corp.) from January 2007 through December 2011 where he served as Director of Corporate Governance and SeniorCounsel. Prior to joining Energy Future Holdings, Mr. Degeyter was engaged in private practice with the firm of Correro Fishman Haygood PhelpsWalmsley & Casteix LLP from May 2002 through December 2006. Mr. Degeyter is licensed to practice law in the states of Texas and Louisiana.Mr. Degeyter received a B.A. in Political Science from Louisiana State University and a J.D. from Loyola University College of Law in NewOrleans.Brad N. Graves has been the Executive Vice President, Corporate Development and Chief Commercial Officer of our general partner since March2015. Previously, he served as Senior Vice President of Corporate Development from May 2012 until March 2015. In March 2013, he waspromoted to Chief Commercial Officer. Prior to joining our130Table of Contentsgeneral partner, Mr. Graves was the Senior Vice President of Corporate Development of Summit Investments since April 2010. He was previouslya Partner with Crestwood Midstream Partners, LLC from February 2008 until March 2010. Mr. Graves served as Executive Vice President—Business Development of Genesis Energy, LP from August 2006 until November 2007. He also served as Vice President—Offshore Commercialfor Enterprise Products Partners L.P. ("Enterprise") from 2004 until August 2006. Prior to 2004, Mr. Graves served in a variety of commercial rolesat Enterprise and GulfTerra Energy Partners, LP ("GulfTerra"), prior to its merger with Enterprise. In his roles with Enterprise and GulfTerra, Mr.Graves participated in numerous greenfield projects developed in the Gulf of Mexico. Mr. Graves earned a B.B.A. in Accounting from Texas A&MUniversity in 1989 and an MBA in Marketing and Finance from the University of Saint Thomas in 1994.Leonard W. Mallett has been Executive Vice President and Chief Operations Officer of our general partner since December 2015. Prior to joiningour general partner, Mr. Mallett served as Senior Vice President of Engineering for Enterprise, where he was responsible for the engineering,project management, sourcing and technical support functions supporting all of Enterprise’s pipeline and related plants. Mr. Mallett began hiscareer with TEPPCO as a Project Engineer and spent the next three decades working with TEPPCO and successor entities in various engineering,transportation, and operations roles. At the end of 2006, Enterprise bought TEPPCO’s General Partner from Duke Energy Field Services, at whichtime Mr. Mallett was serving as SVP of Operations for TEPPCO. Post-merger, Mr. Mallett was named SVP-Environmental, Health and Safety. Mr.Mallett holds a Bachelor of Science in Mechanical Engineering from Prairie View A&M University and a Master of Business Administration fromHouston Baptist University.Thomas K. Lane has served as a director of our general partner since May 2012 and was appointed to the board in connection with his affiliationwith Energy Capital Partners, which controls Summit Investments, the sole owner of SMP Holdings, the entity that owns and controls our generalpartner. Additionally, Mr. Lane serves as the chair of the Compensation Committee of our general partner. Mr. Lane has been a partner of EnergyCapital Partners since 2005. Prior to joining Energy Capital Partners, Mr. Lane worked for 17 years in the Investment Banking Division at GoldmanSachs. As a Managing Director at Goldman Sachs, Mr. Lane had senior-level coverage responsibility for electric and gas utilities, independentpower companies and merchant energy companies throughout the United States. Mr. Lane received a B.A. in economics from Wheaton Collegeand an MBA from the University of Chicago. Mr. Lane was selected to serve as a director on the board due to his affiliation with Energy CapitalPartners, his knowledge of the energy industry and his financial and business expertise.Christopher M. Leininger has served as a director of our general partner since August 2013 and was appointed to the board in connection withhis affiliation with Energy Capital Partners. Mr. Leininger has been Deputy General Counsel at Energy Capital Partners since 2006. Prior to joiningEnergy Capital Partners, Mr. Leininger was an associate at the law firm of Latham & Watkins LLP and a member of its Finance department. Mr.Leininger serves on the boards of EnergySolutions, Inc. and PLH Group, Inc. Mr. Leininger received a B.A. in History and Political Science fromthe University of San Diego and a J.D. from the University of Virginia School of Law. Mr. Leininger was selected to serve as a director on theboard due to his affiliation with Energy Capital Partners, his knowledge of the energy industry and his financial and business expertise.Curtis A. Morgan has served as a director of our general partner since May 2012 and was appointed to the board in connection with his affiliationwith Energy Capital Partners, which controls our general partner. Mr. Morgan has been an Operating Partner of Energy Capital Partners sinceOctober 2015. Prior to rejoining Energy Capital Partners (where he previously served as an Operating Partner from May 2009 to May 2010), heserved as the President and Chief Executive Officer of EquiPower Resources Corp. from May 2010 to April 2015. Mr. Morgan formerly served asPresident and Chief Executive Officer of FirstLight Power Enterprises from November 2006 to April 2009. Mr. Morgan has also held leadershippositions at NRG Energy, Mirant Corporation and Reliant Energy. Mr. Morgan received a B.A. in Accounting from Western Illinois University andan MBA in Finance and Economics from the University of Chicago. He is a Certified Public Accountant. We believe that Mr. Morgan's extensiveexecutive, financial and operational experience bring important and necessary skills to the board of directors.Jerry L. Peters has served as a director of our general partner since September 2012. Additionally, Mr. Peters served as the chair of the ConflictsCommittee of our general partner until Ms. Tomasky's appointment to the role in November 2012 and serves as the chair and financial expert ofthe Audit Committee of our general partner. Mr. Peters has served as the Chief Financial Officer of Green Plains Inc., a publicly-traded vertically-integrated ethanol producer, since May 2007. In 2015, Mr. Peters was appointed Chief Financial Officer and director of the general partner of GreenPlains Partners, LP, a publicly traded partnership engaged in fuel storage and transportation services (and collectively with Green Plains Inc.,"Green Plains"). Prior to joining Green Plains, Mr. Peters served as Senior Vice President—Chief Accounting Officer for ONEOK Partners fromMay 2006 to April 2007, as Chief Financial Officer of ONEOK Partners, L.P. from July 1994 to May 2006, and in various senior management rolesof131Table of ContentsONEOK Partners, L.P. from 1985 to May 2006. Prior to joining ONEOK Partners, Mr. Peters was employed by KPMG LLP as a certified publicaccountant from 1980 to 1985. Mr. Peters received an MBA from Creighton University with an emphasis in finance and a B.S. in BusinessAdministration from the University of Nebraska Lincoln. We believe that Mr. Peters' extensive executive, financial and operational experience bringimportant and necessary skills to the board of directors.Scott A. Rogan has served as a director of our general partner since February 2014 and was appointed to the board in connection with hisaffiliation with Energy Capital Partners. Mr. Rogan joined Energy Capital Partners as a principal in February 2014. Prior to joining Energy CapitalPartners, and for the past five years, Mr. Rogan was employed by Barclays Capital ("Barclays") as a Managing Director working in the investmentbanking division of the natural resources group. Prior to its merger with Barclays in 2008, Mr. Rogan worked for over 10 years in investmentbanking for Lehman Brothers. Mr. Rogan received a bachelor’s degree in business administration and a master’s degree in professional accountingfrom the University of Texas at Austin as well as a master’s degree in business administration from the University of Chicago. Mr. Rogan wasselected to serve as a director on the board due to his affiliation with Energy Capital Partners, his knowledge of the energy industry and hisfinancial and business expertise.Jeffrey R. Spinner has served as a director of our general partner since November 2012 and was appointed to the board in connection with hisaffiliation with Energy Capital Partners. Mr. Spinner has been an investment professional at Energy Capital Partners since 2006. Prior to joiningEnergy Capital Partners, Mr. Spinner worked in the Natural Resources Investment Banking Group at Banc of America Securities. Mr. Spinnerreceived a B.S. in Economics from Duke University. Mr. Spinner was selected to serve as a director on the board due to his affiliation with EnergyCapital Partners, his knowledge of the energy industry and his financial and business expertise.Susan Tomasky has served as a director of our general partner since November 2012. Additionally, Ms. Tomasky serves as the chair of theConflicts Committee of our general partner. Ms. Tomasky was a senior executive for 13 years at American Electric Power, one of the nation’slargest electric utilities, serving from 2009 to 2011 as President of the company’s transmission business, from 2007 through 2008 as ExecutiveVice President for Shared Services, from 2001 until 2007 as Executive Vice President and Chief Financial Officer, and from 1998 until 2001 asGeneral Counsel. Ms. Tomasky currently serves as Lead Independent Director of Tesoro Corp. and as a director of Public Service EnterpriseGroup – both public companies. Ms. Tomasky holds a juris doctorate degree from George Washington University National Law Center, andreceived her undergraduate degree from University of Kentucky in Lexington. Ms. Tomasky's extensive executive, financial, legal and regulatoryexperience bring important and necessary skills to the board of directors.Robert M. Wohleber has served as a director of our general partner since August 2013. Mr. Wohleber served as Senior Vice President and ChiefFinancial Officer of Kerr-McGee Corporation, an oil and gas exploration and production company, from December 1999 to August 2006. From 1996to 1998, he served as Senior Vice President and Chief Financial Officer of Freeport-McMoran, Inc., one of the largest phosphate fertilizerproducers in the United States. He holds a B.B.A. from the University of Notre Dame and an M.B.A. from the University of Pittsburgh. Mr.Wohleber's extensive executive and financial experience in the oil and gas industry bring important and necessary skills to the board of directors.Code of EthicsThe board of directors of our general partner has adopted a Code of Business Conduct and Ethics which sets forth SMLP’s policy with respect tobusiness ethics and conflicts of interest. The Code of Business Conduct and Ethics is intended to ensure that the employees, officers anddirectors of SMLP conduct business with the highest standards of integrity and in compliance with all applicable laws and regulations. It applies tothe employees, officers and directors of SMLP, including its principal executive officer, principal financial officer and principal accounting officer orcontroller, or persons performing similar functions (the "Senior Financial Officers"). The Code of Business Conduct and Ethics also incorporatesexpectations of the Senior Financial Officers that enable us to provide accurate and timely disclosure in our filings with the SEC and other publiccommunications. The Code of Business Conduct and Ethics is publicly available on our website under the "Corporate Governance" subsection ofthe Investors section at www.summitmidstream.com and is also available free of charge on request to the Secretary at the Dallas office addressgiven under the "Contact" section on our website.Corporate Governance GuidelinesOur Corporate Governance Guidelines, which are available on our website under the “Corporate Governance” subsection of the “Investors” sectionat www.summitmidstream.com, provide that (i) Jerry L. Peters, as the chairman of our Audit Committee, shall preside over any executivesessions, and (ii) interested parties may communicate132Table of Contentsdirectly with our independent directors by submitting a specially marked envelope to the Secretary of our general partner.Section 16(a) Beneficial Ownership Reporting ComplianceSection 16(a) of the Exchange Act requires SMLP's directors and executive officers, and persons who own more than 10% of a registered class ofour securities, to file with the SEC initial reports of ownership and reports of changes in ownership of SMLP's common units and other equitysecurities. Based on our records, we believe that all directors, executive officers and persons who own more than 10% of our common units havecomplied with the reporting requirements of Section 16(a).Item 11. Executive Compensation.This Compensation Discussion and Analysis (“CD&A”) provides information regarding the compensation of our named executive officers (“NEOs”)as reported in the Summary Compensation Table and other tables in this document. In this CD&A, we review the compensation decisions andrationale for those decisions relating to our principal executive officer, principal financial officer, our next three most highly compensated executiveofficers, and, pursuant to SEC regulations requiring such disclosure, one former executive officer.The following describes the material components of our executive compensation program for the following individuals, who are referred to as the"Named Executive Officers" or “NEOs”:•Steven J. Newby, President and Chief Executive Officer•Matthew S. Harrison, Executive Vice President and Chief Financial Officer•Brock M. Degeyter, Executive Vice President, General Counsel, Chief Compliance Officer and Secretary•Brad N. Graves, Executive Vice President and Chief Commercial Officer•Leonard W. Mallett, Executive Vice President and Chief Operations Officer (Mr. Mallett's employment commenced on December 1, 2015)•Rene L. Casadaban, former Senior Vice President and Chief Operating Officer (Mr. Casadaban's employment terminated on September30, 2015)The NEOs are employees of Summit Investments and executive officers of our general partner. The NEOs split their working time betweenSMLP's business and their responsibilities for Summit Investments and its affiliates other than us. Under the terms of our partnership agreement,our general partner determines the portion of the NEOs' compensation that is allocated to us. The Compensation Committee of the board ofdirectors of our general partner (the “Board”) provides oversight, administers and makes decisions regarding our compensation policies and plans.Compensation Philosophy and ObjectivesWe seek to provide reasonable and competitive rewards to executives through compensation and benefit programs structured to:•Attract and retain outstanding talent•Drive achievement of short-term and long-term goals•Reward successful execution of objectives•Reinforce company culture and leadership competencies•Align executives with the interests of our unitholdersWe employ a pay-for-performance philosophy when designing executive compensation opportunities. Thus, a portion of an executive’s targetcompensation should be performance based through linkage to the achievement of financial and other measures deemed to be drivers in thecreation of unitholder value. While the Compensation Committee does not set a specific target allocation among the elements of total directcompensation, most of the compensation opportunity available to each of our NEOs is, by design, contingent on the Partnership’s annual andlong-term performance.133Table of ContentsCompensation of Named Executive OfficersThe Compensation Committee establishes the target total direct compensation of our executives and administers other benefit programs. TheCompensation Committee engaged BDO USA, L.L.P. as its independent compensation consultant (the "Compensation Consultant"). TheCompensation Consultant provides the Compensation Committee with data, analysis and advice on the structure and level of executivecompensation. The Compensation Consultant participates in Compensation Committee meetings and executive sessions of the CompensationCommittee meetings as requested. The Compensation Consultant may work with our management on various matters for which the CompensationCommittee is responsible. However, the Compensation Committee, not management, directs the activities of the Compensation Consultant. Weconsider the Compensation Consultant to be independent of the Partnership according to current NYSE listing requirements and SEC guidance.Partnership management, in consultation with the Compensation Committee chair and the Compensation Consultant, prepares materials for theCompensation Committee relevant to matters under consideration by the Compensation Committee, including market data provided by theCompensation Consultant and recommendations of our Chief Executive Officer (the "CEO") regarding compensation of the other executives. TheCompensation Committee works directly with the Compensation Consultant on our CEO’s compensation as required.Based on market data which we use as a reference, we believe compensation of our NEOs is reasonably competitive with opportunities availableto officers holding similar positions at other comparable midstream companies. We seek to set compensation levels for each component of totaldirect compensation based on our assessment of market practices at or near the median. The Compensation Committee adjusts targetcompensation for each NEO above or below the median, taking into consideration experience, performance, internal equity and other relevantcircumstances.During the Compensation Committee’s annual review of executive compensation, the Compensation Consultant provided the CompensationCommittee with an analysis of positions comparable to the NEOs at peer companies. To develop these exhibits, information from peer companypublic filings was compiled, including public company proxy statements and annual reports on Form 10-K. The peer group used for 2015 executivecompensation consisted of fifteen publicly traded midstream partnerships and limited liability companies with whom we compete for executivetalent.The peer group comprised the following companies:Access Midstream Partners, L.P. Markwest Energy Partners, L.P.American Midstream Partners, L.P. MidCoast Energy Partners, L.P.Boardwalk Pipeline Partners, L.P. Niska Gas Storage Partners LLCCrestwood Equity Partners L.P. NuStar Energy L.P.DCP Midstream Partners, L.P. Regency Energy Partners L.P.Enable Midstream Partners, L.P. Southcross Energy Partners, L.P.EnLink Midstream Partners, LP Targa Resources Partners, L.P.Genesis Energy, L.P. The compensation analysis encompassed the primary components of total direct compensation, including annual base salary, annual short-termincentive and long-term incentive awards for the NEOs of these peer group companies. The Compensation Committee considered the informationprovided to ascertain whether the compensation of our NEOs is aligned with our compensation philosophy and competitive with the compensationfor executive officers of the peer group companies. The Compensation Committee reviewed the compensation analysis to confirm that ourcompensation programs were supporting a competitive total compensation approach that emphasizes incentive-based compensation andappropriately rewards achievement of our objectives. For 2015, the target total direct compensation for the NEOs as set by the CompensationCommittee is summarized below. Each element is further discussed in this CD&A.134Table of ContentsName and Principal Position BaseSalary ($) 2015 TargetAnnual Bonus:Percent of BaseSalary (%) 2015 Target LTIPAward: % of BaseSalary (%) 2015 LTIP TargetAward Value ($) 2015 Target TotalDirectCompensation ($)Steven J. NewbyPresident and Chief Executive Officer 475,000 150 250 1,187,500 2,375,000Matthew S. HarrisonExecutive Vice President and Chief FinancialOfficer 340,000 100 125 425,000 1,105,000Brock M. DegeyterExecutive Vice President, General Counsel, ChiefCompliance Officer and Secretary 305,000 100 125 381,250 991,250Brad N. GravesExecutive Vice President, Corporate Developmentand Chief Commercial Officer 325,000 100 125 406,250 1,056,250Leonard W. Mallett (1)Executive Vice President and Chief OperationsOfficer 350,000 N/A N/A N/A N/ARene L. Casadaban (2)Senior Vice President and Chief Operating Officer 305,000 75 125 381,250 915,000__________(1) Mr. Mallett received $29,167 in base salary for 2015, equal to approximately one twelfth of his annual base salary. In lieu of a target LTIP award based ona percentage of base salary, Mr. Mallett’s employment agreement entitled him to a grant of LTIP units equal in value to $1.6 million, which he was granted onDecember 1, 2015.(2) As more fully set forth in the Summary Compensation Table below, pursuant to his severance agreement executed on September 30, 2015, Mr.Casadaban is not entitled to receive any portion of his 2015 target annual bonus. Instead, consistent with the terms of his employment and severanceagreements, Mr. Casadaban received the sum of his 2015 base salary and his 2014 bonus, plus additional amounts related to continuation of health benefitsfor a 12-month period. In total, Mr. Casadaban will receive $539,992 (less applicable tax withholdings and other deductions) in 12 monthly installmentsbeginning on the effective date of his severance agreement, in connection with the termination of his employment.Components of Executive CompensationThe primary elements of compensation for the NEOs are base salary, annual incentive compensation and long-term equity-based compensationawards. The NEOs also receive certain retirement, health, welfare and additional benefits.Base Salary. The base salaries for our NEOs are reviewed annually by the Compensation Committee. Base salaries for our NEOs have generallybeen set at levels deemed necessary to attract and retain individuals with superior talent. Due to external market conditions in 2015, the NEOs didnot receive a base salary increase in 2015. In connection with his amended and restated employment agreement dated February 1, 2016, Mr.Degeyter’s base salary increased to $350,000 per year.135Table of ContentsThe base salaries of our NEOs, a portion of which are allocated to and reimbursed by the Partnership, are set forth in the following table:Name and Principal Position 2015 BaseSalary ($) Steven J. NewbyPresident and Chief Executive Officer 475,000 Matthew S. HarrisonExecutive Vice President and Chief Financial Officer 340,000 Brock M. DegeyterExecutive Vice President, General Counsel, Chief Compliance Officer and Secretary 305,000(1)Brad N. GravesExecutive Vice President, Corporate Development and Chief Commercial Officer 325,000 Leonard W. MallettExecutive Vice President and Chief Operations Officer 350,000 Rene L. CasadabanSenior Vice President and Chief Operating Officer 305,000 ___________(1) Salary adjusted from $305,000 to $350,000 in February 2016.Annual Incentive Compensation. We provide an annual incentive bonus (“annual bonus”) to drive the achievement of key business results and torecognize NEOs based on their contributions to those results. The annual bonus plan is a cash-based incentive plan. Incentive amounts areintended to provide total cash compensation near the market range for executive officers in comparable positions when target performance isachieved. Annual bonus compensation levels are set above or below the market range to reflect actual performance results as appropriate whenperformance is greater or less than expectations. Annual bonus payouts may range from 0% to 200% of the target opportunity and may beadjusted at the discretion of the Compensation Committee.In March 2015, the Compensation Committee established the 2015 annual bonus plan target opportunities as a percentage of base salary for ourNEOs. The 2015 targets increased to 100% from 75% for Messrs. Harrison, Graves, and Degeyter from the previous year. Mr. Newby's 2015target increased to 150% from 100%. Mr. Mallett’s 2015 bonus was prescribed by his employment agreement.Name and Principal Position (1) 2015 TargetAnnual Bonus:Percent of BaseSalary (%) 2015 TargetBonus: DollarValue ($)Steven J. NewbyPresident and Chief Executive Officer 150 712,500Matthew S. HarrisonExecutive Vice President and Chief Financial Officer 100 340,000Brock M. DegeyterExecutive Vice President, General Counsel, Chief Compliance Officer and Secretary 100 305,000Brad N. GravesExecutive Vice President, Corporate Development and Chief Commercial Officer 100 325,000Leonard W. Mallett (2)Executive Vice President and Chief Operations Officer N/A N/A___________(1) This table omits Mr. Casadaban, whose employment terminated on September 30, 2015. Although the Compensation Committee established a 2015target annual bonus for Mr. Casadaban, pursuant to his severance agreement, Mr. Casadaban is not entitled to receive a 2015 annual bonus.(2) The Compensation Committee did not set a target annual bonus for Mr. Mallett, whose employment commenced on December 1, 2015.In 2015, quantitative factors, as reflected in the corporate scorecard applicable to the senior leadership team (the "SLT Scorecard") determined atleast one-half of the annual bonus for Messrs. Harrison, Degeyter and Graves while their respective business unit scorecards accounted for theremainder (the bonus amounts determined based on these scorecards were subject to further adjustments as explained below). For Mr. Newby, theSLT Scorecard determined his entire annual bonus for 2015, subject to further adjustments as explained below. The SLT Scorecard136Table of Contentscontained four factors, each of which are considered by the Board and management as key indicators of the successful execution of our businessplan. Those factors included corporate growth, adjusted EBITDA, distributable cash flow per unit and health, safety, environmental, and regulatorygoals. Some factors are for all companies owned by Summit Investments, while other factors are related only to the Partnership.In February 2016, the Compensation Committee and the Board reviewed the SLT Scorecards for 2015 and determined the level of achievement ofeach key factor. While we achieved less than our adjusted EBITDA target, our distributable cash flow per unit target, and our corporate growthtarget, we exceeded our health, safety, environmental, and regulatory goals. These results yielded a calculated SLT Scorecard result of 73% oftarget for the portion of their annual bonuses based on SLT Scorecard results.In addition to corporate and business unit results reported on scorecards, additional considerations are applied at the discretion of the CEO, theCompensation Committee, or the Board that may affect the amount of the actual bonus earned. Those considerations include judgments regardingoverall company performance and business events, industry climate and performance, demonstrated leadership capabilities, and progress onstrategic initiatives. For 2015, the Compensation Committee and the Board determined that due to macroeconomic changes beyond our control,plus cost savings realized through tight budget control, additional annual bonus consideration would be provided.Mr. Newby’s annual bonus payout was $535,000, which is 75% of his target annual bonus for 2015.Mr. Harrison’s annual bonus payout reflects consideration for the combined performance results of the enterprise technology, finance, andaccounting business units. The total amount awarded to Mr. Harrison reflects 75% of his target annual bonus in 2015, or $255,000.Mr. Degeyter’s annual bonus payout reflects consideration for the performance results of the legal, health, safety, environmental and regulatorybusiness units. The total amount awarded to Mr. Degeyter reflects 80% of his target annual bonus in 2015, or $245,000.Mr. Graves’ annual bonus payout reflects consideration for performance results of the corporate development business unit. The total amountawarded to Mr. Graves reflects 72% of his target annual bonus in 2015, or $235,000.Pursuant to his employment agreement, Mr. Mallett will receive a $350,000 cash bonus in March 2016, contingent upon his current employment asof the payment date.Mr. Casadaban’s employment and severance agreements did not entitle him to receive any portion of his 2015 target annual bonus. Rather, Mr.Casadaban received a severance payment equal to the sum of his 2015 base salary and 2014 annual bonus, plus additional amounts related to thecontinuation of health benefits.Only a portion of the NEOs' annual bonus amounts are allocated to and reimbursed by the Partnership. For a discussion of the cost allocationmethodology, please refer to "Reimbursement of Expenses from General Partner" in Item 13. Certain Relationships and Related Transactions, andDirector Independence. Based on the foregoing discussion, the annual bonus awards to be paid in March 2016 to our NEOs for 2015 performanceare as follows:Name and Principal Position (1) 2015 Annual BonusPayout ($)Steven J. NewbyPresident and Chief Executive Officer 535,000Matthew S. HarrisonExecutive Vice President and Chief Financial Officer 255,000Brock M. DegeyterExecutive Vice President, General Counsel, Chief Compliance Officer and Secretary 245,000Brad N. GravesExecutive Vice President, Corporate Development and Chief Commercial Officer 235,000Leonard W. Mallett (2)Executive Vice President and Chief Operations Officer 350,000___________(1) This table omits Mr. Casadaban, whose employment terminated on September 30, 2015. Pursuant to his severance agreement, Mr. Casadaban is notentitled to receive a 2015 annual bonus.(2) Represents a one-time cash bonus pursuant to the terms of Mr. Mallett’s employment agreement, payable in March 2016, and contingent upon hisemployment on the payment date.137Table of ContentsLong-Term Equity-Based Compensation Awards. Our general partner approved the SMLP LTIP pursuant to which eligible officers (including theNEOs), employees, consultants and directors of our general partner and its affiliates are eligible to receive awards with respect to our equityinterests, thereby linking the recipients' compensation directly to SMLP's performance. The SMLP LTIP provides for the grant, from time to time atthe discretion of the Board or Compensation Committee of our general partner, of unit awards, restricted units, phantom units, unit options, unitappreciation rights, distribution equivalent rights, profits interest units and other unit-based awards.The SMLP LTIP is designed to promote our interests, as well as the interests of our unitholders, by rewarding eligible officers, employees,consultants and directors for delivering desired performance results, as well as by strengthening our ability to attract, retain and motivate qualifiedindividuals to serve as directors, consultants and employees.SMLP LTIP award guidelines for NEOs were determined using the Compensation Consultant's analysis for individuals in comparable positions andan analysis of the scope of their roles and duties. These guidelines set an annual equity award target in the amount of 125% of base salary foreach of our NEOs other than Mr. Newby, whose targeted annual equity award is 250% of his base salary.Effective March 15, 2015, based on the recommendation of the Compensation Committee, the Board approved a grant of phantom units to theNEOs. The underlying phantom units vest ratably over a three-year period. Holders of phantom units are entitled to distribution equivalent rights foreach phantom unit, providing for a lump sum payment equal to the accrued distributions from the grant date of the phantom units to be paid incash upon the vesting date. The Compensation Committee selected equity awards that vest contingent on continued service to foster increasedunit ownership by the NEOs and as a retention incentive for continued employment with the Partnership.All SMLP LTIP grants to our NEOs are subject to accelerated vesting on the occurrence of any of the following events: (i) a termination of theNEO's employment other than for cause, (ii) a termination of the NEO's employment by the officer for good reason (as defined in the NEO'semployment agreement), (iii) a termination of the NEO's employment by reason of the NEO's death or disability or (iv) a Change in Control (asdefined in the applicable award agreement).To calculate the number of phantom units granted to each NEO, the Compensation Committee determined the dollar amount of the long-termincentive compensation award, and then granted the number of phantom units that had a fair market value equal to that amount on the date ofgrant. Phantom unit awards granted in March 2015 were as follows:Name and Principal Position 2015 TargetSMLP LTIP Award: %ofBase Salary (%) 2015Phantom UnitsAwarded (#) 2015 SMLP LTIPAward Value ($)Steven J. NewbyPresident and Chief Executive Officer 250 56,718 1,925,000Matthew S. HarrisonExecutive Vice President and Chief Financial Officer 125 18,563 630,000Brock M. DegeyterExecutive Vice President, General Counsel, Chief Compliance Officer and Secretary 125 18,533 629,000Brad N. GravesExecutive Vice President, Corporate Development and Chief Commercial Officer 125 18,047 612,500Leonard W. Mallett (1)Executive Vice President and Chief Operations Officer N/A 85,976 1,600,000Rene L. CasadabanSenior Vice President and Chief Operating Officer 125 17,502 594,000___________(1) In connection with the commencement of his employment, and pursuant to his employment agreement, Mr. Mallett was granted an award of 85,976 LTIPunits on December 1, 2015, with a market value of $1.6 million.Retirement, Health and Welfare and Additional Benefits. The NEOs are eligible to participate in such employee benefit plans and programs aswe offer to our employees, subject to the terms and eligibility requirements of those plans.138Table of Contents401(k) Plan. The NEOs are eligible to participate in a tax qualified 401(k) defined contribution plan to the same extent as all of our otheremployees. In 2015, we made a fully vested matching contribution on behalf of each of the 401(k) plan's participants up to 5% of such participant'seligible salary for the year.Health Savings Account ("HSA") Program. The NEOs are eligible to participate in a tax qualified health savings account (“HSA”) if they areenrolled in the available high-deductible health plan. The HSA is a tax-free savings account owned by an individual and can be used to pay forcurrent or future qualified medical expenses. Participants determine how much to contribute, when and how to spend the money on eligible medicalexpenses, and how to invest the balance. The balance remains in the account and is not subject to forfeiture. The Partnership makes annualcontributions to all HSA-eligible employees who enroll in an HSA. In 2015, Summit Investments made tax-free HSA contributions of $1,500 toeach NEO, except Mr. Mallett.Deferred Compensation Plan. Effective July 1, 2013, the Board approved a Deferred Compensation Plan (the “DCP”), which is a definedcontribution supplemental executive retirement plan established to attract and retain key employees and directors by providing participants with anopportunity to defer receipt of a portion of their salary, bonus, and other specified compensation. The DCP is an unfunded, nonqualified plan thatprovides each participant in the plan with benefits based on the participant’s notional account balance at the time of retirement or termination.Each participant allocates deferrals among designated mutual fund investments to serve as indices for the purpose of determining notionalinvestment gains and losses to each participant’s account.Deferrals of SMLP LTIP grants and other equity-based awards are allocated to the Summit Midstream Partners, LP Unit Fund (the “Unit Fund”).The Unit Fund consists of notional common units in SMLP, with each unit approximating the value of one common unit of SMLP. The distributionequivalent rights associated with any SMLP LTIP grant may be allocated to any available investment option, other than the Unit Fund. Messrs.Newby, Harrison and Graves made a DCP deferral election for 2015.The DCP is filed as Exhibit 10.1 to the Partnership’s Current Report on Form 8-K filed on July 3, 2013.Tax Preparation and Advisory Services. Pursuant to the terms of their employment agreements, all NEOs are entitled to reimbursement for taxpreparation and advisory services expenses of up to $12,000 per year. Expenditures for these additional benefits are disclosed by individual infootnote 5 to the Summary Compensation Table.Employment and Severance Arrangements. Our NEOs each have employment agreements with Summit Investments. Elements of the NEOs’total direct compensation are subject to periodic review and may be adjusted accordingly by the Compensation Committee.Mr. Newby’s employment agreement, which was amended and restated on July 20, 2015 and took effect on August 13, 2015, has an initial term oftwo years, and is then automatically extended for successive one-year periods, unless either party gives notice of non-extension to the other nolater than 30 days prior to the expiration of the then-applicable term. Mr. Newby’s employment agreement provides for an annual base salary of$475,000, and a performance-based bonus ranging from 0% to 300% of base salary, with a target of 150% of base salary. Mr. Newby is entitled toreceive a prorated annual bonus (based on target) if his employment is terminated by Mr. Newby with good reason, or by the Company withoutcause or as a result of a non-extension of the term, or due to death or disability. In addition, Mr. Newby’s employment agreement also provides forreimbursement of certain business expenses incurred in connection with his employment, including company-paid tax preparation and advisoryservices of up to $12,000 per year.Mr. Newby’s employment agreement provides for a cash severance payment upon a termination resulting from a non-extension of the term by theCompany, by the Company without cause or by Mr. Newby for good reason, which is defined generally as the officer's termination of employmentwithin two years after the occurrence of (i) a material diminution in Mr. Newby’s authority, duties or responsibilities, (ii) a material diminution in Mr.Newby’s base salary, target bonus (as a percentage of base salary) or annual bonus range (as a percentage of base salary), (iii) a material changein the geographic location at which the officer must perform his services under the agreement (iv) a change in Mr. Newby’s reporting relationshipresulting in Mr. Newby no longer reporting directly to the board of directors of the Company or the general partner or (v) any other action or inactionthat constitutes a material breach of the employment agreement by the Company (each a "Qualifying Termination"). In the event of a QualifyingTermination, Mr. Newby’s severance payment will be equal to two and one-half times the sum of his annual base salary and his annual bonuspayable in respect of the immediately preceding year.Following any termination of employment other than one resulting from non-extension of the term, his employment agreement provides that Mr.Newby will be subject to a post-termination non-competition covenant through the severance period, and, following any termination of employment,Mr. Newby will be subject to a one-year post-139Table of Contentstermination non-solicitation covenant. If Mr. Newby’s employment terminates as a result of his non-extension of the term, the Company maychoose to subject him to a non-competition covenant for up to one year post-termination. If the Company exercises this “noncompete option”, thenMr. Newby would be entitled to a severance payment in an amount equal to the sum of his annual base salary and annual bonus payable inrespect of the preceding year, multiplied by a fraction, the numerator of which is equal to the number of days from the date of termination throughthe expiration of the restricted period (as elected by the Company) and the denominator of which is 365. In this case, the severance payment willbe payable in equal installments over the restricted period. Following any termination of employment, the Company has agreed to pay the out-of-pocket premium cost to continue Mr. Newby’s medical and dental coverage for a period not to exceed 18 months, with such coverage terminatingif any new employer provides benefits coverage.Mr. Newby’s employment agreement also provides that all equity awards granted to Mr. Newby under the LTIP and held by him as of immediatelyprior to a change in control of us will become fully vested immediately prior to the change in control.Mr. Newby’s employment agreement provides that, if any portion of the payments or benefits provided to Mr. Newby would be subject to theexcise tax imposed in connection with Section 4999 of the Internal Revenue Code, then the payments and benefits will be reduced if suchreduction would result in a greater after-tax payment to Mr. Newby.Mr. Harrison’s employment agreement, which was amended and restated on October 16, 2015, has an initial term that expires on March 1, 2017,and is then automatically extended for successive one-year periods, unless either party gives notice of non-extension to the other no later than 30days prior to the expiration of the then-applicable term. Mr. Harrison’s employment agreement provides for an annual base salary of $340,000, anda performance-based bonus ranging from 0% to 200% of base salary, with a target of 100% of base salary. Mr. Harrison is entitled to receive aprorated annual bonus (based on target) if his employment is terminated by Mr. Harrison with good reason, or by the Company without cause or asa result of a non-extension of the term, or due to death or disability. In addition, Mr. Harrison’s employment agreement also provides forreimbursement of certain business expenses incurred in connection with his employment, including company-paid tax preparation and advisoryservices of up to $12,000 per year.Mr. Harrison’s employment agreement provides for a cash severance payment upon a termination resulting from a non-extension of the term bythe Company, by the Company without cause or by Mr. Harrison for good reason, which is defined generally as the officer's termination ofemployment within two years after the occurrence of (i) a material diminution in Mr. Harrison’s authority, duties or responsibilities, (ii) a materialdiminution in Mr. Harrison’s base salary, target bonus (as a percentage of base salary) or annual bonus range (as a percentage of base salary), (iii)a material change in the geographic location at which the officer must perform his services under the agreement or (iv) any other action or inactionthat constitutes a material breach of the employment agreement by the Company (each a "Qualifying Termination"). In the event of a QualifyingTermination, Mr. Harrison’s severance payment will be equal to one and one-half times the sum of his annual base salary and his annual bonuspayable in respect of the immediately preceding year.Following any termination of employment other than one resulting from non-extension of the term, his employment agreement provides that Mr.Harrison will be subject to a post-termination non-competition covenant through the severance period, and, following any termination ofemployment, Mr. Harrison will be subject to a one-year post-termination non-solicitation covenant. If Mr. Harrison’s employment terminates as aresult of his non-extension of the term, the Company may choose to subject him to a non-competition covenant for up to one year post-termination. If the Company exercises this “noncompete option”, then Mr. Harrison would be entitled to a severance payment in an amount equal tothe sum of his annual base salary and annual bonus payable in respect of the preceding year, multiplied by a fraction, the numerator of which isequal to the number of days from the date of termination through the expiration of the restricted period (as elected by the Company) and thedenominator of which is 365. In this case, the severance payment will be payable in equal installments over the restricted period. Following anytermination of employment, the Company has agreed to pay the out-of-pocket premium cost to continue Mr. Harrison’s medical and dentalcoverage for a period not to exceed 18 months, with such coverage terminating if any new employer provides benefits coverage.Mr. Harrison’s employment agreement also provides that all equity awards granted to Mr. Harrison under the LTIP and held by him as ofimmediately prior to a change in control of us will become fully vested immediately prior to the change in control.Mr. Harrison’s employment agreement provides that, if any portion of the payments or benefits provided to Mr. Harrison would be subject to theexcise tax imposed in connection with Section 4999 of the Internal Revenue Code,140Table of Contentsthen the payments and benefits will be reduced if such reduction would result in a greater after-tax payment to Mr. Harrison.Mr. Degeyter's employment agreement, which was amended and restated as of February 1, 2016, is substantially similar to Mr. Harrison'semployment agreement, except that (i) it provides for an annual base salary of $350,000 and (ii) it has an initial term that expires on March 1,2018.Mr. Graves’ employment agreement, which was amended and restated on March 1, 2015, has an initial term of two years, and is thenautomatically extended for successive one-year periods, unless either party gives notice of non-extension to the other no later than 90 days priorto the expiration of the then-applicable term. Mr. Graves’ employment agreement provides for an annual base salary of $325,000, and aperformance-based bonus ranging from 0% to 200% of base salary, with a target of 100% of base salary. Mr. Graves is entitled to receive aprorated annual bonus (based on target) if his employment is terminated by the Company without cause or due to death or disability. Although Mr.Graves’ employment agreement only provides for reimbursement of tax preparation expenses in the amount of $10,000 per year, we have agreedto increase the reimbursement amount to $12,000.Mr. Graves’ employment agreement provides for a cash severance payment upon a termination by the Company without cause or by Mr. Gravesfor good reason, which is defined generally as the officer’s termination of employment within two years after the occurrence of (i) a materialdiminution in the named executive officer’s authority, duties or responsibilities, (ii) a material diminution in the officer’s base compensation, (iii) amaterial change in the geographic location at which the officer must perform his services under the agreement or (iv) any other action or inactionthat constitutes a material breach of the employment agreement by the Company (each a “Qualifying Termination”). In the event of a QualifyingTermination other than in the period beginning six months prior to a change in control of the Company and ending on the 12-month anniversary ofsuch a change in control, Mr. Graves’ severance payment will be equal to the sum of his annual base salary and his annual bonus payable inrespect of the immediately preceding year. If a Qualifying Termination occurs during the period beginning six months prior to a change in controland ending on the 12-month anniversary of such a change in control, Mr. Graves’ severance payment will increase to one and one-half times thesum of his annual base salary and the immediately preceding year’s bonus.Following any termination of employment other than one resulting from non-extension of the term, his employment agreement provides that Mr.Graves will be subject to a post-termination non-competition covenant through the severance period, and, following any termination of employment,Mr. Graves will be subject to a one-year post-termination non-solicitation covenant. If Mr. Graves’ employment is terminated due to non-extensionof the term, the Company may choose to subject him to a non-competition covenant for up to one year post-termination. If the Company exercisesthis “noncompete option”, then Mr. Graves would be entitled to a severance payment in an amount equal to the sum of his annual base salary andannual bonus payable in respect of the preceding year, multiplied by a fraction, the numerator of which is equal to the number of days from thedate of termination through the expiration of the restricted period (as elected by the Company) and the denominator of which is 365. In this case,the severance payment will be payable in equal installments over the restricted period. Following any termination of employment, the Companyhas agreed to pay the out-of-pocket premium cost to continue Mr. Graves’ medical and dental coverage for a period not to exceed 18 months, withsuch coverage terminating if any new employer provides benefits coverage.Mr. Graves’ employment agreement also provides that all equity awards granted to Mr. Graves under the LTIP and held by him as of immediatelyprior to a change in control of us will become fully vested immediately prior to the change in control.Mr. Graves’ employment agreement provides that, if any portion of the payments or benefits provided to Mr. Graves would be subject to the excisetax imposed in connection with Section 4999 of the Internal Revenue Code, then the payments and benefits will be reduced if such reduction wouldresult in a greater after-tax payment to Mr. Graves.Mr. Mallett’s employment agreement, which was entered into on December 1, 2015, has an initial term that expires on December 1, 2017, and isthen automatically extended for successive one-year periods, unless either party gives notice of non-extension to the other no later than 30 daysprior to the expiration of the then-applicable term. Mr. Mallett’s employment agreement provides for an annual base salary of $350,000, and aperformance-based bonus ranging from 0% to 200% of base salary, with a target of 100% of base salary. Mr. Mallett is entitled to receive aprorated annual bonus (based on target) if his employment is terminated by Mr. Mallett with good reason, or by the Company without cause or as aresult of a non-extension of the term, or due to death or disability. In addition, Mr. Mallett’s employment agreement also provides forreimbursement of certain business expenses incurred in connection with his employment, including company-paid tax preparation and advisoryservices of up to $12,000 per year.141Table of ContentsMr. Mallett’s employment agreement provides for a cash severance payment upon a termination resulting from a non-extension of the term by theCompany, by the Company without cause or by Mr. Mallett for good reason, which is defined generally as the officer's termination of employmentwithin two years after the occurrence of (i) a material diminution in Mr. Mallett’s authority, duties or responsibilities, (ii) a material diminution in Mr.Mallett’s base salary, target bonus (as a percentage of base salary) or annual bonus range (as a percentage of base salary), (iii) a material changein the geographic location at which the officer must perform his services under the agreement or (iv) any other action or inaction that constitutes amaterial breach of the employment agreement by the Company (each a "Qualifying Termination"). In the event of a Qualifying Termination, Mr.Mallett’s severance payment will be equal to one and one-half times the sum of his annual base salary and his annual bonus payable in respect ofthe immediately preceding year.Following any termination of employment other than one resulting from non-extension of the term, his employment agreement provides that Mr.Mallett will be subject to a post-termination non-competition covenant through the severance period, and, following any termination of employment,Mr. Mallett will be subject to a one-year post-termination non-solicitation covenant. If Mr. Mallett’s employment terminates as a result of his non-extension of the term, the Company may choose to subject him to a non-competition covenant for up to one year post-termination. If the Companyexercises this “noncompete option”, then Mr. Mallett would be entitled to a severance payment in an amount equal to the sum of his annual basesalary and annual bonus payable in respect of the preceding year, multiplied by a fraction, the numerator of which is equal to the number of daysfrom the date of termination through the expiration of the restricted period (as elected by the Company) and the denominator of which is 365. Inthis case, the severance payment will be payable in equal installments over the restricted period. Following any termination of employment, theCompany has agreed to pay the out-of-pocket premium cost to continue Mr. Mallett’s medical and dental coverage for a period not to exceed 18months, with such coverage terminating if any new employer provides benefits coverage.Mr. Mallett’s employment agreement also provides that all equity awards granted to him under SMLP's long-term incentive plan and held by him asof immediately prior to a change in control of us will become fully vested immediately prior to the change in control.Mr. Mallett’s employment agreement provides that, if any portion of the payments or benefits provided to Mr. Mallett would be subject to theexcise tax imposed in connection with Section 4999 of the Internal Revenue Code, then the payments and benefits will be reduced if suchreduction would result in a greater after-tax payment to Mr. Mallett.Additionally, as an inducement to accept the position of Chief Operations Officer of the Company, on December 1, 2015, received a one-time grantof phantom units valued at $1,600,000, pursuant to a standalone phantom unit award agreement (the "Award Agreement"). Subject to the termsand conditions of the Award Agreement, the underlying phantom units will vest ratably over a three-year period, and are entitled to distributionequivalent rights for each phantom unit, providing for a lump sum payment equal to the accrued distributions from the grant date of the phantomunits to be paid in cash upon the vesting date. Furthermore, the phantom units will be subject to accelerated vesting on the occurrence of any ofthe following events: (i) a termination of the Mr. Mallett’s employment other than for cause, (ii) a termination of employment by Mr. Mallett for goodreason (as that term is defined in the employment agreement), (iii) a termination of Mr. Mallett’s employment by reason of death or disability or (iv)a Change in Control (as defined in the Award Agreement). Furthermore, provided that Mr. Mallett remains continuously employed by the Companythrough March of 2016, he will be entitled to receive an annual cash bonus in the amount of $350,000 and an additional grant of phantom unitsvalued at $600,000.Risk Assessment Relative to Compensation Programs. The Compensation Committee manages risk as it relates to our compensation plans,programs and structure (collectively, our “compensation practices”). The Compensation Committee meets with management to review whether anyaspect of our compensation practices create incentives for our employees to take inappropriate risks that could materially adversely affect thePartnership. Accordingly, we believe that the compensation practices for our NEOs and other employees are appropriately structured and do notpose a material risk to the Partnership. We believe these compensation practices are designed and implemented in a manner that does notpromote excessive risk-taking that could damage the value of the Partnership or provide compensatory rewards for inappropriate decisions orbehavior.Compensation Committee Report. The Compensation Committee has reviewed and discussed this CD&A with our management and, based onsuch review and discussion, has recommended to the Board that the CD&A be included in the Annual Report on Form 10-K.142Table of ContentsSummary Compensation Table for 2015, 2014, and 2013The following table sets forth certain information with respect to the compensation paid to our NEOs for the years ended December 31, 2015, 2014and 2013 and allocated to us by our general partner. Under the terms of our partnership agreement, our general partner determines the portion ofthe NEOs' compensation that is allocated to us. For a discussion of the cost allocation methodology, please refer to "Agreements with Affiliates—Reimbursement of Expenses from General Partner" in Item 13. Certain Relationships and Related Transactions, and Director Independence.Name and Principal Position Year Salary ($) (1) Bonus ($) (2) Equity Awards($) (3) Non-EquityIncentive PlanCompen-sation($)(4) All OtherCompen-sation ($) (5) Total ($)Steven J. NewbyPresident and Chief ExecutiveOfficer 2015 237,500 — 1,925,000 20,619 2,183,119 2014 237,500 — 1,200,000 237,500 16,490 1,691,490 2013 280,000 — 900,000 332,500 12,845 1,525,345Matthew S. HarrisonExecutive Vice President andChief Financial Officer 2015 251,600 — 630,000 25,336 906,936 2014 238,000 — 625,000 185,500 21,965 1,070,465 2013 261,907 — 400,000 225,250 42,251 929,408Brock M. DegeyterExecutive Vice President,General Counsel, ChiefCompliance Officer andSecretary 2015 173,850 — 629,000 19,450 822,300 2014 213,500 — 600,000 171,500 21,965 1,006,965 2013 225,250 63,750 375,000 208,250 13,388 885,638Brad N. GravesExecutive Vice President,Corporate Development andChief Commercial Officer (6) 2015 97,500 — 612,500 12,071 722,071 2014 227,500 — 650,000 171,500 21,695 1,070,695 2013 — — — — — —Leonard W. MallettExecutive Vice President andChief Operations Officer (7) 2015 20,417 — 1,600,000 — — 1,620,417 2014 — — — — — — 2013 — — — — — —Rene L. CasadabanSenior Vice President and ChiefOperating Officer (8) 2015 213,500 — 594,000 — 19,594 827,094 2014 183,000 — 550,000 129,000 18,727 880,727 2013 — — — — — —___________(1) Amounts shown represent the portion of the NEO's base salary allocated to SMLP.(2) The amount shown in 2013 relates to the portion of Mr. Degeyter's signing bonus allocated to SMLP. The signing bonus for Mr. Degeyter was provided forin his initial employment agreement and paid by Summit Investments.(3) Amounts shown reflect the grant date fair value of the phantom unit awards granted to the NEOs in March 2014 and March 2013, respectively, inaccordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation ("FASB ASCTopic 718"). For the assumptions made in valuing these awards, See Note 12 to the consolidated financial statements. For additional information, pleaserefer to "Components of Executive Compensation—Long-Term Equity-Based Compensation Awards" above.(4) Amounts shown represent the incentive bonus earned under our annual incentive bonus program in the fiscal year indicated but paid in the followingfiscal year. The amounts shown represent that portion of the NEO's annual bonus that has been allocated to SMLP.(5) The table below presents the components of "All Other Compensation" allocated to SMLP for each NEO for the fiscal year ended December 31, 2015. Foradditional information, please see "Components of Executive Compensation—Retirement, Health and Welfare and Additional Benefits" above.143Table of Contents(6) Compensation information is not provided for fiscal year 2013 for the executive officers who were not NEOs in fiscal year 2013.(7) Mr. Mallett's employment commenced on December 1, 2015.(8) Mr. Casadaban's employment terminated on September 30, 2015.All Other Compensation. The following table sets forth information concerning all other compensation paid to our NEOs in fiscal 2015.Name (1) Medical InsurancePremium ($) Individual TaxPreparation andAnnual MedicalExamination ($) Health SavingsAccount (HSA)EmployerContributions ($) 401(k) PlanEmployerContributions ($) Total ($)Steven J. Newby 7,744 5,500 750 6,625 20,619Matthew S. Harrison 11,461 2,960 1,110 9,805 25,336Brock M. Degeyter 8,828 2,214 855 7,553 19,450Brad N. Graves 4,646 3,000 450 3,975 12,071Rene L. Casadaban 8,131 1,400 788 9,275 19,594___________(1) Due to Mr. Mallett's employment commencing on December 1, 2015, he received no other compensation in fiscal 2015.Grants of Plan-Based Awards in 2015. The following table sets forth information concerning annual incentive awards and phantom unit awardsgranted to our NEOs in fiscal 2015. Estimated Possible Payouts Under Non-Equity IncentivePlan Awards (1) All Other StockAwards: Numberof Shares ofStocks or Units(2) Grant Date FairValue of Stockand OptionsAwards (3)Name Grant Date Threshold ($) Target ($) Maximum ($) (#) ($)Steven J. Newby N/A N/A 475,000 712,500 3/15/2015 56,718 1,925,000Matthew S. Harrison N/A N/A 255,000 382,500 3/15/2015 14,776 625,000Brock M. Degeyter N/A N/A 228,750 343,125 3/15/2015 14,185 600,000Brad N. Graves N/A N/A 243,750 365,625 3/15/2015 15,367 650,000Leonard W. Mallett (4) N/A N/A N/A N/A 12/1/15 85,976 1,600,000Rene L. Casadaban (5) N/A N/A 228,750 343,125 3/15/2015 13,003 594,000___________(1) Represents annual incentive opportunities that may be awarded pursuant to our annual incentive program for the year ended December 31, 2015 withpayment contingent upon our achievement of pre-established performance goals. For additional information, please see "Components of ExecutiveCompensation—Annual Incentive Compensation" above.(2) Represents grants of phantom units with distribution equivalent rights under the SMLP LTIP. For additional information, please see "Components ofExecutive Compensation—Long-Term Equity-Based Compensation Awards" above.(3) Amounts shown represent the fair value of the award on the date of the grant, in accordance with FASB ASC Topic 718. For the assumptions made invaluing these awards, see Note 12 to the consolidated financial statements.(4) The Compensation Committee did not set a target annual bonus for Mr. Mallett, whose employment commenced on December 1, 2015.(5) Pursuant to the terms of the SMLP LTIP, Mr. Casadaban’s unvested LTIP units vested immediately upon the termination of his employment on September30, 2015. For additional information, please refer to "Components of Executive Compensation-Long-Term Equity-Based Compensation Awards" above.Narrative Disclosure to the Summary Compensation Table and Grants of the Plan-Based Awards Table. A description of material factorsnecessary to understand the information disclosed in the tables above with respect to144Table of Contentssalaries, bonuses, equity awards, non-equity incentive plan compensation and all other compensation can be found in the CD&A that precedesthese tables.Outstanding Equity Awards at December 31, 2015. The following table presents information regarding the outstanding equity awards held by ourNEOs at December 31, 2015. Unit AwardsName (1) Grant Date Number of Unearned PhantomUnits That Have Not Vested (#)(2) Market Value of UnearnedPhantom Units That Have NotVested ($) (3)Steven J. Newby 3/15/2015 56,718 1,062,328 3/15/2014 18,912 354,222 3/15/2013 11,543 216,200Matthew S. Harrison 3/15/2015 18,563 347,685 3/15/2014 9,850 184,490 3/15/2013 5,129 96,066Brock M. Degeyter 3/15/2015 18,533 347,123 3/15/2014 9,456 177,110 3/15/2013 4,809 90,073Brad N. Graves 3/15/2015 18,047 338,020 3/15/2014 10,244 191,870 3/15/2013 4,809 90,073Leonard W. Mallett 12/1/2015 85,976 1,610,330___________(1) Mr. Casadaban has no outstanding, unvested phantom units as of December 31, 2015. Mr. Casadaban’s then-outstanding, unvested phantom unitsvested upon the termination of his employment on September 30, 2015.(2) Phantom units granted to the NEOs vest ratably over a three-year period with the first tranche scheduled to vest on the first anniversary of the grant date,subject to continued employment, and accelerated vesting as provided in the applicable award agreement. The NEOs also receive distribution equivalentrights for each phantom unit, providing for a lump sum payment equal to the accrued distributions from the grant date of the phantom units to be paid in cashupon the vesting date.(3) Amounts were calculated using the closing price of SMLP's publicly traded common units on December 31, 2015.Phantom Units Vested. The following table represents information regarding the vesting of phantom units during the year ended December 31,2015 with respect to our NEOs. Phantom Unit AwardsName (1) Number of PhantomUnits Vested (#) Value Realized on Vesting($) (2)Steven J. Newby 38,500 1,006,040Matthew S. Harrison 24,807 588,511Brock M. Degeyter 22,039 533,254Brad N. Graves 18,683 483,776Rene L. Casadaban 46,950 869,810___________(1) Mr. Mallett's employment commenced on December 1, 2015. None of his phantom units vested during the year ended December 31, 2015.(2) Amounts represent the value of the phantom units that vested on March 15, 2015, September 28, 2015, and, with respect to Mr. Casadaban in connectionwith the termination of his employment, on September 30, 2015, plus the distribution equivalent rights earned in tandem. The value of the phantom units thatvested on March 15, 2015 was calculated using the closing price of SMLP's publicly traded common units as of March 13, 2015, the trading day immediatelyprior to vesting. The value of the units that vested on September 28, 2015 was calculated using the closing price on September 25, 2015, the trading dayimmediately prior to vesting. With respect to Mr. Casadaban, 30,017 units vested on September 30, 2015. Their value was calculated using the closing priceon September 29, 2015, the trading day immediately prior to vesting.145Table of ContentsPension Benefits. Currently, our general partner does not sponsor or maintain a pension or defined benefit program for our NEOs. This policy maychange in the future.Nonqualified Deferred Compensation Table for 2015. The following table represents information regarding the nonqualified deferredcompensation of our NEOs for the year ended December 31, 2015.Name ExecutiveContributions inLast Fiscal Year ($)(1) RegistrantContributions inLast Fiscal Year ($) AggregateEarnings in LastFiscal Year ($) AggregateWithdrawals/Distributions($) Aggregate Balanceat Last Fiscal Year-End ($)Steven J. Newby 631,621 — (36,950) — 594,670Matthew S. Harrison 315,945 — 50,456 — 366,401Brad N. Graves 148,443 — (1,429) — 214,447___________(1) Amount is included in the "Summary Compensation Table" for the year 2015. For additional information, see "Components of Executive Compensation—Retirement, Health and Welfare and Additional Benefits" above.Potential Payments upon Termination or Change in Control. The following table sets forth information concerning potential amounts payable tothe NEOs upon termination of employment under various circumstances, and upon a change in control, if such event took place on December 31,2015.Name andPrincipalPosition (1) Triggering Event Salary ($) Bonus ($) Pro-Rata Bonus($) Health Benefits($) Acceleration ofUnvested Equity($) (2) Total ($)Steven J.NewbyPresident andChiefExecutiveOfficer (3) Termination byReason of Death orDisability — — 712,500 25,187 1,632,769 2,370,456 Termination WithoutCause 1,187,500 1,187,500 712,500 25,187 1,632,769 4,745,456 Resignation for GoodReason 1,187,500 1,187,500 712,500 25,187 1,632,769 4,745,456 Nonextension of Termby Company 1,187,500 1,187,500 712,500 25,187 — 3,112,687 Nonextension of Termby Executive,Company ExercisesNoncompete 475,000 475,000 — 25,187 — 975,187 Change in Control (4) — — — — 1,632,769 1,632,769Matthew S.HarrisonExecutive VicePresident andChief FinancialOfficer (5) Termination byReason of Death orDisability — — 340,000 25,187 628,279 993,466 Termination WithoutCause 510,000 405,000 340,000 25,187 628,279 1,908,466 Resignation for GoodReason 510,000 405,000 340,000 25,187 628,279 1,908,466 Nonextension of Termby Company 510,000 405,000 340,000 25,187 — 1,280,187 Nonextension of Termby Executive,Company ExercisesNoncompete 340,000 270,000 — 25,187 — 635,187 Change in Control (4) — — — — 628,279 628,279146Table of ContentsBrock M.DegeyterExecutive VicePresident,GeneralCounsel, ChiefComplianceOfficer andSecretary (6) Termination byReason of Death orDisability — — 305,000 25,187 614,325 944,512 Termination WithoutCause 305,000 260,000 305,000 25,187 614,325 1,509,512 Resignation for GoodReason 305,000 260,000 — 25,187 614,325 1,204,512 Termination WithoutCause during ChangeIn Control Period 457,500 390,000 305,000 25,187 614,325 1,792,012 Resignation for GoodReason during Changein Control Period 457,500 390,000 — 25,187 614,325 1,487,012 Change in Control (4) — — — — 614,325 614,325 Nonextension of Term,Company ExercisesNoncompete 305,000 260,000 — 25,187 — 590,187Brad N. GravesExecutive VicePresident,CorporateDevelopmentand ChiefCommercialOfficer (7) Termination byReason of Death orDisability — — 325,000 25,187 620,019 970,206 Termination WithoutCause 325,000 265,000 325,000 25,187 620,019 1,560,206 Resignation for GoodReason 325,000 265,000 — 25,187 620,019 1,235,206 Termination WithoutCause during ChangeIn Control Period 487,500 397,500 325,000 25,187 620,019 1,855,206 Resignation for GoodReason during Changein Control Period 487,500 397,500 — 25,187 620,019 1,530,206 Change in Control (4) — — — — 620,019 620,019 Nonextension of Term,Company ExercisesNoncompete 325,000 265,000 — 25,187 — 615,187Leonard W.MallettExecutive VicePresident andChiefOperationsOfficer (8) Termination byReason of Death orDisability — — 350,000 25,187 1,610,330 1,985,517 Termination WithoutCause 525,000 — 350,000 25,187 1,610,330 2,510,517 Resignation for GoodReason 525,000 — 350,000 25,187 1,610,330 2,510,517 Nonextension of Termby Company 525,000 — 350,000 25,187 — 900,187 Change in Control (4) — — — — 1,610,330 1,610,330147Table of Contents Nonextension of Termby Executive,Company ExercisesNoncompete 350,000 — — 25,187 — 375,187___________(1) This table omits Mr. Casadaban, whose employment terminated on September 30, 2015.(2) Amounts represent the value of the phantom units that vest upon the occurrence of a triggering event plus the earned dividend equivalent rights that vestin tandem. The value of the phantom units was calculated using the closing price of SMLP's publicly traded common units on December 31, 2015.(3) Mr. Newby's employment agreement provides that upon termination of employment resulting from a non-extension of the term by Summit Investments,termination by Summit Investments without cause, or by Mr. Newby’s resignation for good reason (each a "Qualifying Termination"), Mr. Newby's severancepayment will be equal to two and one-half times the sum of his annual base salary and his annual bonus payable in respect of the immediately precedingyear. Mr. Newby is also entitled to receive a prorated annual bonus (based on target) if his employment is terminated as a result of a Qualifying Termination. IfSummit Investments exercises the “noncompete option” after Mr. Newby elects not to extend the term, then Mr. Newby is entitled to a severance payment inan amount equal to the sum of his annual base salary and annual bonus payable in respect of the preceding year, multiplied by a fraction, the numerator ofwhich is equal to the number of days from the date of termination through the expiration of the restricted period (as elected by Summit Investments) and thedenominator of which is 365. Any unvested equity awards granted to Mr. Newby will immediately vest upon a Qualifying Termination, termination by reason ofdeath or disability, or a change in control. If any portion of the payments or benefits provided to Mr. Newby in connection with a change in control becomesubject to the excise tax under Section 4999 of the Internal Revenue Code, then the payments and benefits will be reduced to the extent such reductionwould result in a greater after-tax benefit to Mr. Newby. Following any termination of employment, Summit Investments has agreed to pay the out-of-pocketpremium cost to continue Mr. Newby’s medical and dental coverage for a period not to exceed 18 months, with such coverage terminating if any newemployer provides benefits coverage. Mr. Newby also had an aggregate balance of $594,670 under the DCP as of December 31, 2015, which will bedistributed upon a qualifying triggering event. For additional information, see "Summary Compensation Table for 2015, 2014 and 2013—NonqualifiedDeferred Compensation Table for 2015" above.(4) Single-trigger event without a qualifying termination of employment.(5) Mr. Harrison’s employment agreement provides that upon termination of employment resulting from a non-extension of the term by Summit Investments,by Summit Investments without cause, or by Mr. Harrison’s resignation for good reason (each a "Qualifying Termination"), Mr. Harrison’s severance paymentwill be equal to two and one-half times the sum of his annual base salary and his annual bonus payable in respect of the immediately preceding year. Mr.Harrison is also entitled to receive a prorated annual bonus (based on target) if his employment is terminated as a result of a Qualifying Termination or due todeath or disability. If Summit Investments exercises the “noncompete option” after Mr. Harrison elects not to extend the term, then Mr. Harrison is entitled to aseverance payment in an amount equal to the sum of his annual base salary and annual bonus payable in respect of the preceding year, multiplied by afraction, the numerator of which is equal to the number of days from the date of termination through the expiration of the restricted period (as elected bySummit Investments) and the denominator of which is 365. Any unvested equity awards granted to Mr. Harrison will immediately vest upon a QualifyingTermination, termination by reason of death or disability, or a change in control. If any portion of the payments or benefits provided to Mr. Harrison would besubject to the excise tax under Section 4999 of the Internal Revenue Code, then the payments and benefits will be reduced to the extent such reductionwould result in a greater after-tax payment to Mr. Harrison. Following any termination of employment, Summit Investments has agreed to pay the out-of-pocketpremium cost to continue Mr. Harrison’s medical and dental coverage for a period not to exceed 18 months, with such coverage terminating if any newemployer provides benefits coverage. Mr. Harrison also had an aggregate balance of $366,401 under the DCP as of December 31, 2015, which will bedistributed upon a qualifying triggering event. For additional information, see "Summary Compensation Table for 2015, 2014 and 2013-NonqualifiedDeferred Compensation Table for 2015" above.(7) Mr. Degeyter's employment agreement in effect as of December 31, 2015 provided that upon termination of employment by Summit Investments withoutcause or Mr. Degeyter's resignation for good reason (each a "Qualifying Termination"), Mr. Degeyter's severance payment would have been equal to the sumof his annual base salary and his annual bonus payable in respect of the immediately preceding year. (Mr. Degeyter’s employment agreement was amendedand restated effective February 1, 2016.) If a Qualifying Termination had occurred within the change in control period beginning six months prior to andending on the 12-month anniversary of the change in control, Mr. Degeyter's severance payment would have increased to one and one-half times the sum ofhis annual base salary and his annual bonus payable in respect of the immediately preceding year. Mr. Degeyter would also have been entitled to receive aprorated annual bonus (based on target) if his employment had been terminated by Summit Investments without cause or due to death or disability. If SummitInvestments were to have exercised the “noncompete option” after either Summit Investments or Mr. Degeyter elected not to extend the term, then Mr.Degeyter would have been entitled to a severance payment in an amount equal to the sum of his annual base salary and annual bonus payable in respect ofthe preceding year, multiplied by a fraction, the numerator of which is equal to the number of days from the date of termination through the expiration of therestricted period (as elected by Summit Investments) and the denominator of which is 365. Any unvested equity awards granted to Mr. Degeyter would haveimmediately vested upon a Qualifying Termination, termination as a result of a non-extension of the term by Summit Investments, termination by reason ofdeath or disability, or a change in control. If any portion of the payments or benefits provided to Mr. Degeyter in connection with a change in control becamesubject to the excise tax under Section 4999 of the Internal Revenue Code, then the payments and148Table of Contentsbenefits would have been reduced to the extent such reduction would result in a greater after-tax benefit to Mr. Degeyter. Mr. Degeyter's employmentagreement also provided that following any termination of employment by Summit Investments without cause or by Mr. Degeyter for good reason, Mr.Degeyter would have been entitled to the excess of the out-of-pocket premium cost over such costs for active employees to continue his medical and dentalcoverage for a period not to exceed 18 months, with such coverage terminating if any new employer provided benefits coverage.(5) Mr. Graves' employment agreement provides that upon termination of employment by Summit Investments without cause or Mr. Graves' resignation forgood reason (each a "Qualifying Termination"), Mr. Graves' severance payment will be equal to the sum of his annual base salary and his annual bonuspayable in respect of the immediately preceding year. If a Qualifying Termination occurs within the change in control period beginning six months prior to andending on the 12-month anniversary of the change in control, Mr. Graves’ severance payment will increase to one and one-half times the sum of his annualbase salary and his annual bonus payable in respect of the immediately preceding year. Mr. Graves is also entitled to receive a prorated annual bonus(based on target) if his employment is terminated by Summit Investments without cause or due to death or disability. If Summit Investments exercises the“noncompete option” after either Summit Investments or Mr. Graves elects not to extend the term, then Mr. Graves is entitled to a severance payment in anamount equal to the sum of his annual base salary and annual bonus payable in respect of the preceding year, multiplied by a fraction, the numerator ofwhich is equal to the number of days from the date of termination through the expiration of the restricted period (as elected by Summit Investments) and thedenominator of which is 365. Any unvested equity awards granted to Mr. Graves will immediately vest upon a Qualifying Termination, termination as a resultof a non-extension of the term by Summit Investments, termination by reason of death or disability, or a change in control. If any portion of the payments orbenefits provided to Mr. Graves in connection with a change in control become subject to the excise tax under Section 4999 of the Internal Revenue Code,then the payments and benefits will be reduced to the extent such reduction would result in a greater after-tax benefit to Mr. Graves. Following any terminationof employment, Summit Investments has agreed to pay the out-of-pocket premium cost to continue Mr. Graves’ medical and dental coverage for a period notto exceed 18 months, with such coverage terminating if any new employer provides benefits coverage. Mr. Graves also had an aggregate balance of$214,447 under the DCP as of December 31, 2015, which will be distributed upon a qualifying triggering event. For additional information, see "SummaryCompensation Table for 2015, 2014 and 2013-Nonqualified Deferred Compensation Table for 2015" above.(6) Mr. Mallett’s employment agreement provides that upon termination of employment resulting from a non-extension of the term by Summit Investments, bySummit Investments without cause, or Mr. Mallett’s resignation for good reason (each a "Qualifying Termination"), Mr. Mallett’s severance payment will beequal to one and one half times the sum of his annual base salary and his annual bonus payable in respect of the immediately preceding year. Mr. Mallett isalso entitled to receive a prorated annual bonus (based on target) if his employment is terminated as a result of a Qualifying Termination or due to death ordisability. If Company exercises the “noncompete option” after Mr. Mallett elects not to extend the term, then Mr. Mallett is entitled to a severance payment inan amount equal to the sum of his annual base salary and annual bonus payable in respect of the preceding year, multiplied by a fraction, the numerator ofwhich is equal to the number of days from the date of termination through the expiration of the restricted period (as elected by the Company) and thedenominator of which is 365. Any unvested equity awards granted to Mr. Mallett will immediately vest upon a Qualifying Termination, termination by reason ofdeath or disability, or a change in control. If any portion of the payments or benefits provided to Mr. Mallett would be subject to the excise tax under Section4999 of the Internal Revenue Code, then the payments and benefits will be reduced to the extent such reduction would result in a greater after-tax payment toMr. Mallett. Following any termination of employment, the Company has agreed to pay the out-of-pocket premium cost to continue Mr. Mallett’s medical anddental coverage for a period not to exceed 18 months, with such coverage terminating if any new employer provides benefits coverage.Compensation Committee ReportThe Compensation Committee provides oversight, administers and makes decisions regarding our compensation policies and plans. Additionally,the Compensation Committee generally reviews and discusses the Compensation Discussion and Analysis with senior management of our generalpartner as a part of our governance practices. Based on this review and discussion, the Compensation Committee has recommended to the boardof directors of our general partner that the Compensation Discussion and Analysis be included in this report for filing with the SEC.Members of the Compensation Committee of Summit Midstream GP, LLCThomas K. Lane Jeffrey R. Spinner Robert M. WohleberDirector CompensationIn March 2015, under the director compensation plan, Mr. Morgan and the independent directors, which include Mr. Peters, Ms. Tomasky and Mr.Wohleber, each received the following:•an annual cash retainer of $70,000, and•an annual award of common units with a grant date fair value of approximately $80,000.In addition, under the director compensation plan, the independent directors receive the following for their respective service on our Board'scommittees:•the chairman of the Audit Committee receives an additional annual retainer of $15,000;149Table of Contents•the chairman of the Conflicts Committee receives an additional annual retainer of $10,000;•each independent member of any committee (other than the chairman) received an additional annual retainer of $5,000; and•in connection with the Polar and Divide Drop Down, in May 2015, we paid the members, other than the chairman, of the ConflictsCommittee fees of $10,000 and the chairman of the Conflicts Committee fees of $15,000 each for the increased time and effort that theyexpended in connection with their service on the Conflicts Committee, which reviewed the transaction for fairness to the Partnership andits unitholders.Board members are reconsidered for appointment on the one-year anniversary of their most recent appointment.We reimburse all directors, except for employees of Energy Capital Partners for travel and other related expenses in connection with attendingboard and committee meetings and board-related activities. We do not compensate employees of the Partnership or Energy Capital Partners fortheir services as directors.The following table shows the compensation paid, including amounts deferred, under our director compensation plan in 2015.Name Fees earned or paidin cash ($) Other fees ($) Unit awards (1) ($) Compensationdeferred ($) Total ($)Thomas K. Lane — — — — —Christopher M. Leininger — — — — —Curtis A. Morgan 70,000 — 80,000 — 150,000Steven J. Newby — — — — —Jerry L. Peters 70,000 20,000 80,000 — 170,000Jeffrey R. Spinner — — — — —Susan Tomasky 70,000 15,000 80,000 — 165,000Robert M. Wohleber 70,000 15,000 80,000 — 165,000___________(1) Amount shown represents the grant date fair value of the unit awards as determined in accordance with FASB ASC Topic 718. These unit awards werefully vested on the date of grant.Compensation Committee Interlocks and Insider ParticipationOur Compensation Committee, consists of Mr. Lane, Mr. Spinner and Mr. Wohleber. Although our common units are listed on the New York StockExchange, we have taken advantage of the “Limited Partnership” exemption to the New York Stock Exchange rule requiring listed companies tohave an independent compensation committee with a written charter. During 2015, no member of the Compensation Committee was an executiveofficer of another entity on whose compensation committee or board of directors any executive officer of Summit Investments (and in connectiontherewith, SMLP) served. During 2015, no director was an executive officer of another entity on whose compensation committee any executiveofficer of Summit Investments (and in connection therewith, SMLP) served.Mr. Newby, who serves as the President and Chief Executive Officer of our general partner, participates in his capacity as a director in thedeliberations of the board of directors concerning named executive officer compensation, and makes recommendations to the CompensationCommittee regarding named executive officer compensation but abstains from any decisions regarding his compensation. Also, Mr. Lane and Mr.Spinner were selected to serve on the Compensation Committee due to their affiliations with Energy Capital Partners, which controls our generalpartner.Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.The following table sets forth certain information regarding the beneficial ownership of our common units of:•each person who is known to us to beneficially own 5% or more of such units to be outstanding (based solely on Schedules 13D and 13Gfiled with the SEC subsequent to December 31, 2015 and prior to February 17, 2016);•our general partner;•each of the directors and NEOs of our general partner; and150Table of Contents•all of the directors and NEOs of our general partner as a group.All information with respect to beneficial ownership has been furnished by the respective directors, officers or 5% or more unitholders as the casemay be. The amounts and percentage of units beneficially owned are reported on the basis of regulations of the SEC governing the determinationof beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a beneficial owner of a security if that person has orshares voting power, which includes the power to vote or to direct the voting of such security, or investment power, which includes the power todispose of or to direct the disposition of such security.In computing the number of common units beneficially owned by a person and the percentage ownership of that person, common units that aperson has the right to acquire upon the vesting of phantom units where the units are issuable within 60 days of February 16, 2016, if any, aredeemed outstanding, but are not deemed outstanding for computing the percentage ownership of any other person. The percentage of unitsbeneficially owned is based on a total of 66,472,494 common limited partner units outstanding as of February 16, 2016.Except as indicated by footnote, the persons named in the following table have sole voting and investment power with respect to all units shownas beneficially owned by them, subject to community property laws where applicable.Name Of Beneficial Owner Common UnitsBeneficiallyOwned Percentage ofCommon UnitsBeneficially OwnedSummit Midstream Partners, LLC (1) (2) (3) 29,854,581 44.9%SMP Holdings (2) (3) (4) 29,703,421 44.7%Energy Capital Partners II, LLC (1) (3) (5) (6) 32,038,767 48.2%SMLP Holdings, LLC (5) (6) 2,184,186 3.3%HMI Capital, LLC (7) 3,846,500 5.8%OppenheimerFunds, Inc. (8) 3,526,742 5.3%Steven J. Newby (2) (10) (11) 34,502 *Matthew S. Harrison (2) (10) (11) 23,545 *Brock M. Degeyter (2) (10) 34,742 *Brad N. Graves (2) (10) (11) 30,666 *Leonard W. Mallett (2) — *Thomas K. Lane (9) (12) 40,000 *Christopher M. Leininger (5) — *Curtis A. Morgan (11) 6,960 *Jerry L. Peters (2) 7,433 *Scott A. Rogan (13) — *Jeffrey R. Spinner (13) — *Susan Tomasky (2) 7,510 *Robert M. Wohleber (2) 4,933 *All directors and executive officers as a group (consisting of 13 persons) 190,291 *________* An asterisk indicates that the person or entity owns less than one percent.(1) Summit Investments owns 100% of SMP Holdings, the entity that owns 100% of our general partner. Energy Capital Partners II, LLC ("ECP II") and itsparallel and co-investment funds (the "ECP Funds" and together with ECP II, "ECP") hold in the aggregate, 100.0% of the Class A membership interests inSummit Investments, the sole owner of SMP Holdings. ECP II is the general partner of the general partner of each of the ECP Funds that holds membershipinterests in Summit Investments and has voting and investment control over the securities held thereby. Accordingly, ECP may be deemed to indirectlybeneficially own all of the common units held by Summit Investments and SMP Holdings as of February 16, 2016.(2) The address for this person or entity is 1790 Hughes Landing Blvd., Suite 500, The Woodlands, Texas 77380.(3) Because of its ownership interest in Summit Investments, ECP is entitled to elect five directors of Summit Investments. In addition, Mr. Lane (who is apartner of Energy Capital Partners), Mr. Leininger (who is managing director and deputy general counsel of Energy Capital Partners), Mr. Morgan (who is anoperating partner of Energy Capital Partners), Mr. Rogan (who is a principal of Energy Capital Partners) and Mr. Spinner (who is a principal of Energy CapitalPartners) are each directors of our general partner. Neither Mr. Lane, Mr. Leininger, Mr. Morgan, Mr. Rogan nor Mr. Spinner are deemed to beneficially own,and they disclaim beneficial ownership of, any common units held by our general partner, Summit Investments or SMP Holdings.151Table of Contents(4) SMP Holdings owns 100% of our general partner and 44.7% of our outstanding common units. Given its ownership interest in Summit Investments, ECPmay be deemed to indirectly beneficially own all of the common units held by SMP Holdings as of February 16, 2016.(5) The address for this person or entity is 11943 El Camino Real, Suite 220, San Diego, California 92130.(6) Energy Capital Partners II, LP and certain of its parallel funds (collectively, the "SMLP Holdings Owners") collectively hold all of the membership interestsin SMLP Holdings, LLC ("SMLP Holdings"). ECP II indirectly controls the SMLP Holdings Owners. Accordingly, ECP II and the SMLP Holdings Owners maybe deemed to indirectly beneficially own all of the common units held by SMLP Holdings.(7) The address for this person or entity is One Maritime Plaza, Suite 2020, San Francisco, California 94111.(8) The address for this person or entity is Two World Financial Center, 225 Liberty Street, New York, New York 10281.(9) The address for this person or entity is 51 John F. Kennedy Parkway, Suite 200, Short Hills, New Jersey 07078.(10) Includes common units which the individuals have the right to acquire upon vesting of phantom units, where the units are issuable as of February 16,2016 or within 60 days thereafter. Such units are deemed to be outstanding in calculating the percentage ownership of such individual (and all directors andofficers as a group), but are not deemed to be outstanding as to any other person.(11) Excludes vested units for which receipt has been deferred into our Deferred Compensation Plan.(12) Includes 20,000 common units held by Lane Ventures LLC ("Lane Ventures"). Two of Mr. Lane's estate planning trusts collectively own a majority of themembership interests in Lane Ventures and as a result, Mr. Lane may be deemed to indirectly beneficially own the common units held by Lane Ventures.(13) The address for this person or entity is 1000 Louisiana, Suite 5200, Houston, Texas 77002.Securities Authorized for Issuance Under Equity Compensation PlansThe following table provides information as of December 31, 2015 with respect to the Partnership's common units that may be issued under the2012 Long-Term Incentive Plan.Plan category Number of securities to beissued upon exercise ofoutstanding options,warrants and rights(a) (1) Weighted-average exerciseprice of outstanding options,warrants and rights(b) Number of securitiesremaining available for futureissuance under equitycompensation plans(excluding securitiesreflected in column (a))(c)Equity compensation plans approved by security holders 379,911 n/a 4,351,120Equity compensation plans not approved by securityholders n/a n/a n/aTotal 379,911 n/a 4,351,120__________(1) Amount shown represents phantom unit awards outstanding under the SMLP LTIP at December 31, 2015. The awards are expected to be settled incommon units upon the applicable vesting date and are not subject to an exercise price.2012 SMLP Long-Term Incentive Plan. In connection with the IPO, our general partner approved the SMLP LTIP, pursuant to which eligibleofficers, employees, consultants and directors of our general partner and its affiliates are eligible to receive awards with respect to our equityinterests. The SMLP LTIP is designed to promote our interests, as well as the interests of our unitholders, by rewarding eligible officers,employees, consultants and directors for delivering desired performance results, as well as by strengthening our ability to attract, retain andmotivate qualified individuals to serve as directors, consultants and employees. A total of 5,000,000 common units was reserved for issuance,pursuant to and in accordance with the SMLP LTIP.The SMLP LTIP is administered by our general partner's board of directors. The SMLP LTIP provides for the grant, from time to time at thediscretion of the board of directors, of unit awards, restricted units, phantom units, unit options, unit appreciation rights, distribution equivalentrights, profits interest units and other unit-based awards. Units that are canceled or forfeited are available for delivery pursuant to other awards.Common units to be delivered with respect to awards may be newly issued units, common units acquired by us or our general partner in the openmarket, common units already owned by our general partner or us, common units acquired by our general partner directly from us or any otherperson or any combination of the foregoing.The general partner's board of directors, at its discretion, may terminate the SMLP LTIP at any time with respect to the common units for which agrant has not previously been made. The SMLP LTIP will automatically terminate on the 10th anniversary of the date it was initially adopted by ourgeneral partner. The general partner's board of directors also has the right to alter or amend the SMLP LTIP or any part of it from time to time or toamend any outstanding award made under the SMLP LTIP, provided that no change in any outstanding award may be made that would materiallyimpair the rights of the participant without the consent of the affected participant.152Table of ContentsItem 13. Certain Relationships and Related Transactions, and Director Independence.Of the 42,062,644 common units outstanding at December 31, 2015, Summit Investments and a subsidiary owned 5,444,731 common units andall of our 24,409,850 subordinated units, which converted to common units on a one-for-one basis on February 16, 2016. In addition, SMP Holdingsowns and controls our general partner, which owns all of our IDRs and a 2% general partner interest represented by 1,354,700 general partnerunits.Distributions and Payments to our General Partner and its AffiliatesThe following summarizes the distributions and payments to be made by us to our general partner and its affiliates in connection with our ongoingoperations and our liquidation. These distributions and payments were determined by and among affiliated entities and, consequently, are not theresult of arm's-length negotiations.Operational StageDistributions of available cash to our general partner and its affiliates. Unless distributions exceed the minimum quarterly distribution, wemake cash distributions 98.0% to our unitholders pro rata and 2.0% to our general partner, assuming it makes any capital contributions necessaryto maintain its 2.0% interest in us. In addition, if distributions exceed the minimum quarterly distribution and other higher target distribution levels,our general partner, by virtue of its IDRs, is entitled to increasing percentages of the distributions, up to 50.0% of the distributions above thehighest target distribution level. For additional information, see Note 10 to the consolidated financial statements.For the year ended December 31, 2015, our general partner received distributions of approximately $9.8 million on its 2.0% general partner interestand IDRs and a subsidiary of Summit Investments received distributions of approximately $67.4 million on its common and subordinated units.Payments to our general partner and its affiliates. See "Agreements with Affiliates—Reimbursement of Expenses from General Partner" below.Withdrawal or removal of our general partner. If our general partner withdraws or is removed, its general partner interest and its IDRs will eitherbe sold to the new general partner for cash or converted into common units, in each case for an amount equal to the fair market value of thoseinterests.Liquidation StageUpon our liquidation, our partners, including our general partner, will be entitled to receive liquidating distributions according to their particularcapital account balances.Agreements with AffiliatesWe have various agreements with certain of our affiliates, as described below. These agreements have been negotiated among affiliated partiesand, consequently, are not the result of arm's-length negotiations.Reimbursement of Expenses from General Partner. Under our partnership agreement, we reimburse our general partner and its affiliates forcertain expenses incurred on our behalf, including, without limitation, salary, bonus, incentive compensation and other amounts paid to our generalpartner's employees and executive officers who perform services necessary to run our business. Our partnership agreement provides that ourgeneral partner will determine in good faith the expenses that are allocable to us. Operation and maintenance expenses incurred by the generalpartner and reimbursed by us under our partnership agreement were $21.5 million in 2015. General and administrative expenses incurred by thegeneral partner and reimbursed by us under our partnership agreement were $21.1 million in 2015. As of December 31, 2015, we had a payable of$1.1 million to the general partner for expenses that were paid on our behalf.Expense Allocations. During the period from January 1, 2015 to May 18, 2015, Summit Investments incurred interest expense which was relatedto capital projects at Polar and Divide. As such, the associated interest expense was allocated to Polar and Divide as a noncash contribution andcapitalized into the basis of the asset.Certain of Summit Investments’ current and former employees received Class B membership interests, classified as net profits interests, inSummit Investments (the “Net Profits Interests”). The Net Profits Interests participate in distributions upon time vesting and the achievement ofcertain distribution targets to Class A members or higher priority vested Net Profits Interests. The Net Profits Interests were accounted for ascompensatory awards.153Table of ContentsExpenses Paid by Summit Investments on Behalf of Polar and Divide. Prior to the Polar and Divide Drop Down, Summit Investments incurredcertain support expenses and capital expenditures on behalf of Polar and Divide during the year ended December 31, 2015. These transactionswere settled periodically through membership interests prior to the Polar and Divide Drop Down.Review, Approval and Ratification of Related-Person TransactionsThe board of directors of our general partner has a policy for the identification, review and approval of certain related person transactions. Thepolicy provides for the review and (as appropriate) approval by the Conflicts Committee of SMLP's general partner of transactions between SMLPand its subsidiaries, on the one hand, and related persons (as that term is defined in SEC rules), on the other hand. Pursuant to the policy, theGeneral Counsel of SMLP's general partner is charged with primary responsibility for determining whether, based on the facts and circumstances,a proposed transaction is a related person transaction.For purposes of the policy, a "related person" is any director or executive officer of SMLP's general partner, any nominee for director, anyunitholder known to SMLP to be the beneficial owner of more than 5% of any class of the SMLP's common units, and any immediate familymember, affiliate or controlled subsidiary of any such person. A "related person transaction" is generally a transaction in which SMLP is, orSMLP's general partner or any of SMLP's subsidiaries is, a participant, where the amount involved exceeds $120,000, and a related person has adirect or indirect material interest. Transactions resolved under the conflicts provision of the partnership agreement are not required to be reviewedor approved under the policy.If, after weighing all of the facts and circumstances, the general counsel of SMLP's general partner determines that a proposed transaction is arelated person transaction that requires review or approval and the transaction meets certain monetary thresholds or involves certain relatedpersons, management must present the proposed transaction to the Conflicts Committee for advance approval. If the transaction does not meetthe designated monetary threshold or involve certain related persons, management presents the transaction(s) to the Committee for their review ona quarterly basis.The policy described above was adopted by the board of directors of our general partner on March 7, 2013, and as a result the transactionsdescribed in "Agreements with Affiliates" above were not reviewed under such policy.Director IndependenceAlthough most companies listed on the New York Stock Exchange are required to have a majority of independent directors serving on the board ofdirectors of the listed company, the New York Stock Exchange does not require a listed limited partnership like us to have, and we do not intend tohave, a majority of independent directors on the board of directors of our general partner.Item 14. Principal Accounting Fees and Services.Audit Fees. Our audit committee has ratified Deloitte & Touche LLP, Independent Registered Public Accounting Firm, to audit the books, recordsand accounts of SMLP for the year ended December 31, 2015. The fees billed by Deloitte & Touche LLP for the audit of consolidated financialstatements and other services rendered for the years ended December 31, 2015 and 2014 follow. Year ended December 31, 2015 2014Audit fees (1)$2,132,740 $2,131,464Audit-related fees (2)— 322,572Tax fees (3)801,298 447,614All other fees— —Total$2,934,038 $2,901,650__________(1) Audit fees are fees billed by Deloitte & Touche LLP for professional services for the audit and quarterly reviews of the Partnership’s consolidated financialstatements, review of other SEC filings, including registration statements, and issuance of comfort letters and consents.(2) Audit-related fees are fees billed by Deloitte & Touche LLP for assurance and related services related to consultations and audits performed in connectionwith acquisitions and assistance with the implementation of Section 404 of the Sarbanes-Oxley Act.154Table of Contents(3) Tax fees are billed by Deloitte Tax LLP for tax compliance services, including the preparation of state, federal and Schedule K-1 tax filings and other taxplanning and advisory services.Pre-approval Policy. Pursuant to its charter, the Audit Committee is responsible for the appointment, compensation, retention and oversight ofSMLP's independent auditor (including resolution of disagreements between management and the independent auditor regarding financialreporting). The Audit Committee shall have sole authority to pre-approve all audit, audit-related and permitted non-audit engagements with theindependent auditor, including the fees and other terms of such engagements. The independent auditor shall report directly to the Audit Committee.The Audit Committee may consult with management but may not delegate these responsibilities to management.155Table of ContentsPART IVItem 15. Exhibits, Financial Statement Schedules.(a)(1) Financial StatementsIncluded in Part II, Item 8, of this report:Summit Midstream Partners, LP and Subsidiaries:Report of Independent Registered Public Accounting Firm82Consolidated Balance Sheets as of December 31, 2015 and 201483Consolidated Statements of Operations for the years ended December 31, 2015, 2014, and 201384Consolidated Statements of Partners' Capital for the years ended December 31, 2015, 2014, and 201385Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014, and 201388Notes to Consolidated Financial Statements90(2) Financial Statement SchedulesAll schedules are omitted because the required information is inapplicable or the information is presented in the financial statements or the notesthereto.(3) Exhibit IndexAn “Exhibit Index” has been filed as part of this Report included below and is incorporated herein by this reference.Schedules other than those listed above are omitted because they are not required, are not material, are not applicable, or the required informationis shown in the financial statements or notes thereto.In reviewing the agreements included as exhibits to this annual report, please remember they are included to provide information regarding theirterms and are not intended to provide any other factual or disclosure information about us or the other parties to the agreements. The agreementscontain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been madesolely for the benefit of the other parties to the applicable agreement and:•should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties ifthose statements prove to be inaccurate;•have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, whichdisclosures are not necessarily reflected in the agreement;•may apply standards of materiality in a way that is different from what may be viewed as material by others; and•were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and aresubject to more recent developments.Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time.(b) Exhibit IndexExhibit number Description3.1 First Amended and Restated Agreement of Limited Partnership of Summit Midstream Partners, LP, dated as of October3, 2012 (Incorporated herein by reference to Exhibit 3.1 to SMLP's Current Report on Form 8-K dated October 4, 2012(Commission File No. 001-35666))3.2 Amended and Restated Limited Liability Company Agreement of Summit Midstream GP, LLC, dated as of October 3,2012 (Incorporated herein by reference to Exhibit 3.2 to SMLP's Current Report on Form 8-K dated October 4, 2012(Commission File No. 001-35666))3.3 Certificate of Limited Partnership of Summit Midstream Partners, LP (Incorporated herein by reference to Exhibit 3.1 toSMLP's Form S-1 Registration Statement dated August 21, 2012 (Commission File No. 333-183466))156Table of Contents3.4 Certificate of Formation of Summit Midstream GP, LLC (Incorporated herein by reference to Exhibit 3.4 to SMLP's FormS-1 Registration Statement dated August 21, 2012 (Commission File No. 333-183466))4.1 Investor Rights Agreement, dated as of October 3, 2012, by and among EFS-S, LLC, Summit Midstream GP, LLC andSummit Midstream Partners, LLC (Incorporated herein by reference to Exhibit 4.1 to SMLP's Current Report on Form 8-Kdated October 4, 2012 (Commission File No. 001-35666))10.1 Unit Purchase Agreement, dated as of June 4, 2013, by and between, Summit Midstream Partners, LP and SummitMidstream Partners Holdings, LLC (Incorporated herein by reference to Exhibit 10.3 to SMLP's Current Report on Form8-K dated June 5, 2013 (Commission File No. 001-35666))10.2 Purchase Agreement, dated as of June 12, 2013, by and among Summit Midstream Holdings, LLC, Summit MidstreamFinance Corp., Summit Midstream GP, LLC, the Guarantors named therein and the Initial Purchasers named therein(Incorporated herein by reference to Exhibit 1.1 to SMLP's Current Report on Form 8-K dated June 17, 2013(Commission File No. 001-35666))10.3 Indenture, dated as of June 17, 2013, by and among Summit Midstream Holdings, LLC, Summit Midstream FinanceCorp., the Guarantors party thereto and U.S. Bank National Association (including form of the 7½% senior notes due2021) (Incorporated herein by reference to Exhibit 4.1 to SMLP's Current Report on Form 8-K dated June 17, 2013(Commission File No. 001-35666))10.4 Registration Rights Agreement, dated as of June 17, 2013, by and among Summit Midstream Holdings, LLC, SummitMidstream Finance Corp., the Guarantors named therein and the Initial Purchasers named therein (Incorporated hereinby reference to Exhibit 4.2 to SMLP's Current Report on Form 8-K dated June 17, 2013 (Commission File No. 001-35666))10.5 Joinder Agreement, dated as of June 4, 2013, by and among Summit Midstream Holdings, LLC, The Royal Bank ofScotland plc, as Administrative Agent, and the lenders party thereto (Incorporated herein by reference to Exhibit 10.2 toSMLP's Current Report on Form 8-K dated June 5, 2013 (Commission File No. 001-35666))10.6 Second Amended and Restated Credit Agreement dated as of November 1, 2013 (Incorporated herein by reference toExhibit 10.6 to SMLP's 2013 Annual Report on Form 10-K dated March 10, 2014 (Commission File No. 001-35666))10.7 Amended and Restated Guarantee and Collateral Agreement dated as of November 1, 2013 (Incorporated herein byreference to Exhibit 10.7 to SMLP's 2013 Annual Report on Form 10-K dated March 10, 2014 (Commission File No. 001-35666))10.8 First Amendment to the Second Amended and Restated Credit Agreement and Amended and Restated Guarantee andCollateral Agreement dated as of October 15, 2015 by and between Summit Midstream Holdings, LLC, each of theguarantors parties thereto, Wells Fargo Bank, National Association and the Lenders party thereto.10.9 Base Indenture, dated as of July 15, 2014, by and among Summit Midstream Holdings, LLC, Summit MidstreamFinance Corp. and U.S. Bank National Association (Incorporated herein by reference to Exhibit 4.1 to SMLP's CurrentReport on Form 8-K dated July 15, 2014 (Commission File No. 001-35666))10.10 First Supplemental Indenture, dated as of July 15, 2014, by and among Summit Midstream Holdings, LLC, SummitMidstream Finance Corp., the Guarantors party thereto and U.S. Bank National Association (including form of the 5½%senior notes due 2022) (Incorporated herein by reference to Exhibit 4.2 to SMLP's Current Report on Form 8-K datedJuly 15, 2014 (Commission File No. 001-35666))10.11 Equity Distribution Agreement, dated June 12, 2015, among the Partnership, the General Partner, the OperatingCompany, Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and RBC Capital Markets, LLC. (Incorporatedherein by reference to Exhibit 1.1 to SMLP's Current Report on Form 8-K dated June 12, 2015 (Commission File No.001-35666))10.12 Contribution, Conveyance and Assumption Agreement, dated as of October 3, 2012, by and among Summit MidstreamGP, LLC, Summit Midstream Partners, LP, Summit Midstream Holdings, LLC and Summit Midstream Partners, LLC(Incorporated herein by reference to Exhibit 10.1 to SMLP's Current Report on Form 8-K dated October 4, 2012(Commission File No. 001-35666))10.13 Contribution, Conveyance and Assumption Agreement, dated as of June 4, 2013, by and among Summit MidstreamPartners Holdings, LLC, Bison Midstream, LLC and Summit Midstream Partners, LP (Incorporated herein by reference toExhibit 10.1 to SMLP's Current Report on Form 8-K dated June 5, 2013 (Commission File No. 001-35666))157Table of Contents10.14†Purchase and Sale Agreement dated as of June 4, 2013 by and between MarkWest Liberty Midstream & Resources,L.L.C. and Summit Midstream Partners, LP (Incorporated herein by reference to Exhibit 10.3 to SMLP's Amendment No.1 to its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013 dated October 4, 2013 (CommissionFile No. 333-183466))10.15 Purchase and Sale Agreement among Summit Midstream Partners Holdings, LLC, Red Rock Gathering Company, LLCand Summit Midstream Partners, LP dated as of March 8, 2014 (Incorporated herein by reference to Exhibit 10.1 toSMLP's Current Report on Form 8-K filed March 10, 2014 (Commission File No. 001-35666))10.16 Contribution Agreement among Summit Midstream Partners Holdings, LLC, Polar Midstream, LLC, Epping TransmissionCompany, LLC and Summit Midstream Partners, LP dated as of May 6, 2015 (Incorporated herein by reference toExhibit 10.1 to SMLP's Current Report on Form 8-K dated May 6, 2015 (Commission File No. 001-35666))10.17†Amended and Restated Natural Gas Gathering Agreement, dated August 1, 2010, by and between DFW MidstreamServices LLC, Chesapeake Energy Marketing, Inc., and Chesapeake Exploration, LLC (Incorporated herein by referenceto Exhibit 10.6 to SMLP's Amendment No. 1 to its Form S-1 Registration Statement dated September 14, 2012(Commission File No. 333-183466))10.18†Amended and Restated Natural Gas Gathering Agreement, dated December 1, 2011, by and between DFW MidstreamServices LLC and Carrizo Oil & Gas, Inc. (Incorporated herein by reference to Exhibit 10.7 to SMLP's Amendment No. 1to its Form S-1 Registration Statement dated September 14, 2012 (Commission File No. 333-183466))10.19†Second Amended and Restated Gas Gathering Agreement, dated November 1, 2010, by and between WillamsProduction RMT Company LLC and Encana Oil & Gas (USA) Inc. (Incorporated herein by reference to Exhibit 10.8 toSMLP's Amendment No. 1 to its Form S-1 Registration Statement dated September 14, 2012 (Commission File No. 333-183466))10.20†Future Development Gas Gathering Agreement, dated October 1, 2011, by and between Encana Oil & Gas (USA) Inc.,Grand River Gathering, LLC, and Summit Midstream Partners, LLC (Incorporated herein by reference to Exhibit 10.9 toSMLP's Amendment No. 1 to its Form S-1 Registration Statement dated September 14, 2012 (Commission File No. 333-183466))10.21†Mamm Creek Gas Gathering Agreement, dated October 1, 2011, by and between Encana Oil & Gas (USA) Inc., GrandRiver Gathering, LLC, and Summit Midstream Partners, LLC (Incorporated herein by reference to Exhibit 10.10 toSMLP's Amendment No. 1 to its Form S-1 Registration Statement dated September 14, 2012 (Commission File No. 333-183466))10.22†Gas Purchase Agreement dated as of December 20, 2010 by and between Bear Tracker Energy, LLC., and EOGResources, Inc. (Incorporated herein by reference to Exhibit 10.1 to SMLP's Amendment No. 1 to its Quarterly Report onForm 10-Q for the quarterly period ended June 30, 2013 dated October 4, 2013 (Commission File No. 333-183466))10.23†Amended and Restated Gas Gathering and Compression Agreement dated as of November 4, 2013 by and betweenMountaineer Midstream Company, LLC and Antero Resources Corporation (Incorporated herein by reference to Exhibit10.16 to SMLP's 2013 Annual Report on Form 10-K dated March 10, 2014 (Commission File No. 001-35666))10.24*Second Amended and Restated Employment Agreement, dated July 20, 2015, and effective August 13, 2015, by andbetween Summit Midstream Partners, LLC and Steve Newby (Incorporated herein by reference to Exhibit 10.1 to SMLP'sForm 8-K dated July 24, 2015 (Commission File No. 001-35666))10.25*Second Amended and Restated Employment Agreement, dated October 16, 2015, by and between Summit MidstreamPartners, LLC and Matthew Harrison (Incorporated herein by reference to Exhibit 10.1 to SMLP's Current Report on Form8-K dated October 20, 2015 (Commission File No. 001-35666))10.26*Employment Agreement, dated January 18, 2014, by and between Summit Midstream Partners, LLC and Brock M.Degeyter (Incorporated herein by reference to Exhibit 10.1 to SMLP's Current Report on Form 8-K dated January 23,2014 (Commission File No. 333-183466))10.27*Amended and Restated Employment Agreement, dated March 1, 2015, by and between Summit Midstream Partners,LLC and Brad N. Graves (Incorporated herein by reference to Exhibit 10.1 to SMLP's Current Report on Form 8-K datedMarch 4, 2015 (Commission File No. 001-35666))10.28*Employment Agreement, effective December 1, 2015, by and between Summit Midstream Partners, LLC and LeonardMallett (Incorporated herein by reference to Exhibit 10.1 to SMLP's Current Report on Form 8-K filed November 17, 2015(Commission File No. 001-35666))158Table of Contents10.29*Summit Midstream Partners, LP 2012 Long-Term Incentive Plan (Incorporated herein by reference to Exhibit 10.2 toSMLP's Current Report on Form 8-K dated October 4, 2012 (Commission File No. 001-35666))10.30 Summit Midstream Partners, LP 2012 Long-Term Incentive Plan Phantom Unit Agreement (Incorporated herein byreference to Exhibit 10.1 to SMLP's Current Report on Form 8-K dated March 17, 2014 (Commission File No. 001-35666))10.31 Form of Director Unit Award Agreement (Incorporated herein by reference to Exhibit 10.3 to SMLP's Current Report onForm 8-K dated October 4, 2012 (Commission File No. 001-35666))10.32*Award Agreement by and between Summit Midstream GP, LLC, Summit Midstream Partners, LP and Leonard Mallett(Incorporated herein by reference to Exhibit 10.2 to SMLP's Current Report on Form 8-K filed November 17, 2015(Commission File No. 001-35666))10.33 Summit Midstream Partners, LLC Deferred Compensation Plan dated as of July 1, 2013 (Incorporated herein byreference to Exhibit 4.3 to SMLP's Form S-8 Registration Statement dated June 28, 2013 (Commission File No. 333-189684))12.1 Ratio of Earnings to Fixed Charges21.1 List of Subsidiaries23.1 Consent of Deloitte & Touche LLP31.1 Rule 13a-14(a)/15d-14(a) Certification, executed by Steven J. Newby, President, Chief Executive Officer and Director31.2 Rule 13a-14(a)/15d-14(a) Certification, executed by Matthew S. Harrison, Executive Vice President and Chief FinancialOfficer32.1 Certifications required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the UnitedStates Code (18 U.S.C. 1350), executed by Steven J. Newby, President, Chief Executive Officer and Director, andMatthew S. Harrison, Executive Vice President and Chief Financial Officer101.INS**XBRL Instance Document (1)101.SCH**XBRL Taxonomy Extension Schema101.CAL**XBRL Taxonomy Extension Calculation Linkbase101.DEF**XBRL Taxonomy Extension Definition Linkbase101.LAB**XBRL Taxonomy Extension Label Linkbase101.PRE**XBRL Taxonomy Extension Presentation Linkbase* Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 15(b) of this report† Certain portions have been omitted pursuant to a confidential treatment request. Omitted information has been filed separately with the SEC.** Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statementor prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of theSecurities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections. The financial informationcontained in the XBRL(eXtensible Business Reporting Language)-related documents is unaudited and unreviewed.(1) Includes the following materials contained in this Annual Report on Form 10-K for the year ended December 31, 2015, formatted in XBRL: (i)Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Partners' Capital, (iv) ConsolidatedStatements of Cash Flows, and (v) Notes to Consolidated Financial Statements.(c) Financial Statement SchedulesNot applicable.159Table of ContentsSIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signedon its behalf by the undersigned thereunto duly authorized. Summit Midstream Partners, LP (Registrant) By: Summit Midstream GP, LLC (its general partner) February 26, 2016/s/ Matthew S. Harrison Matthew S. Harrison, Executive Vice President and Chief Financial Officer(Principal Financial and Accounting Officer)Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of theregistrant and in the capacities and on the dates indicated.Signature Title Date/s/ Steven J. Newby Director, President and Chief Executive Officer (PrincipalExecutive Officer) February 26, 2016Steven J. Newby /s/ Matthew S. Harrison Executive Vice President and Chief Financial Officer(Principal Financial and Accounting Officer) February 26, 2016Matthew S. Harrison /s/ Thomas K. Lane Director February 26, 2016Thomas K. Lane /s/ Christopher M. Leininger Director February 26, 2016Christopher M. Leininger /s/ Curtis A. Morgan Director February 26, 2016Curtis A. Morgan /s/ Jerry L. Peters Director February 26, 2016Jerry L. Peters /s/ Scott A. Rogan Director February 26, 2016Scott A. Rogan /s/ Jeffrey R. Spinner Director February 26, 2016Jeffrey R. Spinner /s/ Susan Tomasky Director February 26, 2016Susan Tomasky /s/ Robert M. Wohleber Director February 26, 2016Robert M. Wohleber 160Exhibit 10.8 Execution Version FIRST AMENDMENT TOSECOND AMENDED AND RESTATED CREDIT AGREEMENT ANDAMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT AND AMENDED AND RESTATEDGUARANTEE AND COLLATERAL AGREEMENT (this “Amendment”), dated as of October 15, 2015, is made by and between SUMMIT MIDSTREAMHOLDINGS, LLC, a limited liability company organized under the laws of Delaware (the “Borrower”), each of the Guarantors party hereto (the“Guarantors”), WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent (in such capacity, together with its successors in suchcapacity, the “Administrative Agent”) and collateral agent (in such capacity, together with its successors in such capacity, the “Collateral Agent”) under thehereinafter-defined Credit Agreement, and the Lenders party hereto. W I T N E S S E T H: WHEREAS, the Borrower, the Administrative Agent (as successor in interest to The Royal Bank of Scotland plc) and the lenders from time to timeparty thereto (the “Lenders”) have entered into a Second Amended and Restated Credit Agreement dated as of November 1, 2013 (as amended, restated,supplemented or otherwise modified from time to time, the “Credit Agreement”); WHEREAS, in connection with the Credit Agreement, the Borrower, the Guarantors and the Collateral Agent have entered into an Amended andRestated Guarantee and Collateral Agreement dated as of November 1, 2013 (as amended, restated, supplemented or otherwise modified from time to time,the “Collateral Agreement”); NOW, THEREFORE, in consideration of the premises and the mutual agreements, representations and warranties herein set forth, and for other goodand valuable consideration, the receipt and sufficiency of which are acknowledged, the Borrower, the Guarantors, the Administrative Agent and theundersigned Required Lenders do hereby agree as follows: 1. Amendments to Credit Agreement. (a) Section 1.02 of the Credit Agreement is hereby amended as follows: (i) Each of the following definitions are amended and restated in their entirety as follows: “Acquisition Period” shall mean a period elected by the Borrower, with each such election to be exercised by the Borrowerdelivering written notice thereof to the Administrative Agent (who shall thereafter promptly notify the Lenders), (x) commencingwith the funding of the purchase price for any Permitted Business Acquisition hereunder and ending on the earlier of (a) the datethat is 270 days after the date of such funding, and (b) the Borrower’s election to terminate such Acquisition Period, such electionto be  exercised by the Borrower delivering notice thereof to the Administrative Agent (who shall thereafter promptly notify theLenders); and (y) commencing upon the Borrower’s election on or after the date of the acquisition of Equity Interests in any one ormore Ohio Joint Ventures, the aggregate cost of which exceeds $25,000,000, and ending on the earlier of (a) the date that is 270days after the date of such election, and (b) the Borrower’s election to terminate such Acquisition Period, such election to beexercised by the Borrower delivering notice thereof to the Administrative Agent (who shall thereafter promptly notify theLenders); provided, that, (i) once any Acquisition Period is in effect, the next Acquisition Period may not commence until thetermination of such Acquisition Period then in effect and (ii) after giving effect to the termination of such Acquisition Period ineffect, the Borrower shall be in compliance, on a Pro Forma Basis, with the Financial Performance Covenants and no Event ofDefault shall have occurred and be continuing. “Agreement” shall mean this Credit Agreement, as the same may from time to time be amended, modified, supplemented orrestated, including, without limitation, by the First Amendment. “Consolidated Debt” at any date shall mean (without duplication) all Indebtedness consisting of Capital Lease Obligations,Indebtedness for borrowed money (other than letters of credit and performance bonds to the extent undrawn), Indebtednessconsisting of Letters of Credit issued at the request of a Loan Party on the behalf of an entity that is neither a Loan Party nor aRestricted Subsidiary and Indebtedness in respect of the deferred purchase price of property or services of the Borrower and theRestricted Subsidiaries determined on a consolidated basis on such date. “Consolidated Net Income” shall mean, for any period, the aggregate of the Net Income of the Borrower, the RestrictedSubsidiaries and the Included Entities for such period determined on a consolidated basis; provided, that (a) any net after-tax extraordinary, unusual or nonrecurring gains or losses (less all fees and expenses related thereto) orincome or expenses or charges (including, without limitation, any pension expense, casualty losses, severance expenses, facilityclosure expenses, system establishment costs, mobilization expenses that are not reimbursed and other restructuring expenses,benefit plan curtailment expenses, bankruptcy reorganization claims, settlement and related expenses and fees, expenses orcharges related to any offering of Equity Interests of the Borrower, any Restricted Subsidiary or any Included Entity, anyInvestment, 2 acquisition or Indebtedness permitted to be incurred hereunder (in each case, whether or not successful), including all fees,expenses, charges and change of control payments related to the Transaction), in each case, shall be excluded; provided, that, withrespect to each unusual or nonrecurring item, the Borrower shall have delivered to the Administrative Agent a certificate executedby a Financial Officer specifying and quantifying such item and stating that such item is an unusual or nonrecurring item, (b) any net after-tax income or loss from discontinued operations and any net after-tax gain or loss on disposal ofdiscontinued operations shall be excluded, (c) any net after-tax gain or loss (including the effect of all fees and expenses or charges relating thereto) attributable tobusiness dispositions or asset dispositions other than in the ordinary course of business (as determined in good faith by the boardof directors (or equivalent governing body) of the General Partner) shall be excluded, (d) any net after-tax income or loss (including the effect of all fees and expenses or charges relating thereto) attributable tothe refinancing, modification of or early extinguishment of indebtedness (including any net after-tax income or loss attributable toobligations under Swap Agreements) shall be excluded, (e) Consolidated Net Income for such period of the Borrower shall be increased to the extent of the amount of cash dividendsor cash distributions or other payments paid in cash (or to the extent converted into cash) to the Borrower or a RestrictedSubsidiary thereof in respect of such period to the extent that such cash dividends or cash distributions or other payments paid incash do not exceed the Borrower’s proportional share in the EBITDA of such Person (calculated based on Borrower’s and anyRestricted Subsidiary’s aggregate percentage ownership of the total outstanding Equity Interests of such Person) for (1) any suchperiod ending on or prior to September 30, 2018, from any Person that is not (i) a Restricted Subsidiary, (ii) an Ohio Joint Ventureor (iii) an Included Entity, or that is accounted for by the equity method of accounting and (2) any such period ending afterSeptember 30, 2018, from any Person that is not (i) a Restricted Subsidiary or (ii) an Included Entity, or that is accounted for by theequity method of accounting; (f) the Net Income for such period of any Included Entity shall be an amount equal to the product of the Net Income of such 3 Included Entity for such period multiplied by the Borrower’s or any Restricted Subsidiary’s percentage ownership of the totaloutstanding Equity Interests of such Included Entity, (g) Consolidated Net Income for such period shall not include the cumulative effect of a change in accounting principlesduring such period, (h) any noncash charges from the application of the purchase method of accounting in connection with the Transactions orany future acquisition, to the extent such charges are deducted in computing such Consolidated Net Income, shall be excluded, (i) accruals and reserves that are established within twelve months after the Restatement Date and that are so required to beestablished in accordance with GAAP shall be excluded, (j) any noncash expenses (including, without limitation, writedowns and impairment of property, plant, equipment, goodwilland intangibles and other long-lived assets), any noncash gains or losses on interest rate and foreign currency derivatives and anyforeign currency transaction gains or losses and any foreign currency exchange translation gains or losses that arise onconsolidation of integrated operations shall be excluded, and (k) Consolidated Net Income for such period shall be increased to the extent of any increase in the amount of deferredrevenue for such period (as compared with the preceding period), and decreased to the extent of any decrease in the amount ofdeferred revenue for such period (as compared with the preceding period). “EBITDA” shall mean, with respect to the Borrower, the Restricted Subsidiaries and the Included Entities on a consolidated basisfor any period, the Consolidated Net Income of such Persons for such period plus (a) the sum of (in each case without duplicationand to the extent the respective amounts described in subclauses (i) through (xii) of this clause (a) reduced such Consolidated NetIncome for the respective period for which EBITDA is being determined (but excluding any noncash item to the extent itrepresents an accrual or reserve for a potential cash charge in any future period or amortization of a prepaid cash item that was paidin a prior period)): (i) provision for Taxes based on income, profits, losses or capital of such Persons for such period (adjusted for the tax effectof all adjustments made to Consolidated Net Income), 4 (ii) Interest Expense of such Persons for such period (net of interest income of such Persons for such period) and to the extentnot reflected in Interest Expense, costs of surety bonds in connection with financing activities, (iii) depreciation, amortization (including, without limitation, amortization of intangibles and deferred financing fees) andother noncash expenses (including, without limitation write-downs and impairment of property, plant, equipment, goodwill andintangibles and other long-lived assets and the impact of purchase accounting on such Persons for such period), (iv) the amount of any restructuring charges (which, for the avoidance of doubt, shall include retention, severance, systemsestablishment cost or excess pension, other post-employment benefits, curtailment or other excess charges); provided, that withrespect to each such restructuring charge, the Borrower shall have delivered to the Administrative Agent a Responsible Officer’scertificate specifying and quantifying such expense or charge and stating that such expense or charge is a restructuring charge, (v) any other noncash charges, (vi) equity earnings or losses in Affiliates unless funds have been disbursed to such Affiliates by such Persons, (vii) other nonoperating expenses, (viii) the minority interest expense consisting of subsidiary income attributable to minority equity interests of third parties inany Subsidiary of the Borrower that is not a Subsidiary Loan Party or an Included Entity in such period or any prior period, exceptto the extent of dividends declared or paid on Equity Interests held by third parties, (ix) costs of reporting and compliance requirements pursuant to the Sarbanes-Oxley Act of 2002 and under similar legislationof any other jurisdiction, (x) accretion of asset retirement obligations in accordance with SFAS No. 143, Accounting for Asset Retirement Obligationsand under similar requirements for any other jurisdiction, (xi) extraordinary losses and unusual or nonrecurring cash charges, severance, relocation costs and curtailments ormodifications to pension and post-retirement employee benefit plans, 5 (xii) restructuring costs related to (A) acquisitions after the date hereof permitted under the terms hereof and (B) closure orconsolidation of facilities, and (xiii) to the extent applicable and solely for the purpose of determining compliance with the Financial Performance Covenantsand not for any other purpose for which EBITDA is calculated under this Agreement, any Specified Equity Contribution solely tothe extent permitted to be included in this calculation pursuant to the definition of “Specified Equity Contribution”; minus (b) to the extent such amounts increased such Consolidated Net Income for the respective period for which EBITDA is beingdetermined, noncash items increasing Consolidated Net Income for such period (but excluding any such items which represent thereversal in such period of any accrual of, or cash reserve for, anticipated cash charges in any prior period where such accrual orreserve is no longer required); provided that EBITDA for any period may include, at the Borrower’s option, Material ProjectEBITDA Adjustments for such period. Notwithstanding anything herein to the contrary, the sum of (A) all Material Project EBITDA Adjustments for any period, (B) allEBITDA for such period that is attributable to Included Entities and (C) all payments described in clause (e) of the definition of“Consolidated Net Income” included in EBITDA for such period, shall not exceed 20% of Unadjusted EBITDA for such period. For each calculation period ending on or prior to September 30, 2018, EBITDA of the Borrower shall be increased by an amountequal to (a) the product of (A) the aggregate percentage of Equity Interests held by the Borrower and the Restricted Subsidiaries ineach Ohio Joint Venture multiplied by (B) such Ohio Joint Venture’s EBITDA, calculated as if it were a Restricted Subsidiary;provided, that at all times in the relevant calculation period, (x) the Ohio Joint Ventures do not at any time incur or have, in theaggregate, greater than U.S.$5 million of indebtedness for borrowed money or material Liens outside of the ordinary course ofbusiness, (y) the Equity Interests of the Ohio Joint Ventures that are not owned by the Borrower or a Restricted Subsidiary have nopreferential rights to dividends or other distributions over the Equity Interests owned by the Borrower or a Restricted Subsidiaryand (z) the Borrower’s and each applicable Restricted Subsidiary’s Equity Interests in the Ohio Joint Ventures are pledged inaccordance with the Collateral and Guarantee Requirements. 6 “Excluded Assets” shall mean (a) Equity Interests in any Person (other than (i) the Borrower, any Subsidiary Loan Party, anyWholly Owned Subsidiary or any Included Entity and (ii) the Ohio Joint Ventures, to the extent owned by a Loan Party) to theextent not permitted to be pledged by the terms of such Person’s constitutional or joint venture documents (and, to the extent anysuch prohibition or limitation is removed or the applicable Person has obtained any required consents to eliminate or waive anysuch restrictions, such Equity Interests shall cease to be Excluded Assets), (b) Equity Interests constituting an amount greater than65% of the voting Equity Interests of any Foreign Subsidiary or any Domestic Subsidiary substantially all of which Subsidiary’sassets consist of the Equity Interest in “controlled foreign corporations” under Section 957 of the Code, (c) Equity Interests orother assets that are held directly by a Foreign Subsidiary and (d) any “intent to use” applications for trademark or service markregistrations filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. §1051, unless and until an “Amendment to Allege Use” ora “Statement of Use” under Section 1(c) or Section 1(d) of the Lanham Act has been filed, solely to the extent that such a grant of asecurity interest therein prior to such filing would impair the validity or enforceability of any registration that issues from such“intent to use” application. “Lien” shall mean, with respect to any Property, (a) any mortgage, deed of trust, lien, hypothecation, pledge, encumbrance, chargeor security interest in or on such asset, (b) any arrangement to provide priority or preference, (c) any financing statement filed inany jurisdiction in the nature of or evidencing a security interest or any other similar notice of lien under any similar notice orrecording statute of any Governmental Authority, including any easement, right or way or other encumbrance on any RealProperty, including any portion of or all of the Gathering System, in each of the foregoing cases described in clauses (a), (b) and (c)whether voluntary or involuntary or imposed by law, and any agreement to give any of the foregoing; (d) the interest of a vendoror a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease havingsubstantially the same economic effect as any of the foregoing) relating to such Property and (e) in the case of securities (other thansecurities representing an interest in a joint venture that is not a Subsidiary of the Borrower), any purchase option, call or similarright of a third party with respect to such securities. “Material Contracts” shall mean, collectively, (a) each Gathering Agreement, (b) each Ohio Joint Venture’s articles or certificateof formation or the limited liability company agreement, and (c) any 7 contract or other arrangement, whether written or oral, to which the Borrower or any Subsidiary Loan Party is a party as to which(individually or together with all contracts that have been terminated, cancelled or not renewed or are reasonably expected to bebreached, not performed, cancelled or not renewed as of any date of determination) the breach, nonperformance, cancellation orfailure to renew by any party thereto could reasonably be expected to have a Material Adverse Effect, each as amended, restated,supplemented or otherwise modified as permitted hereunder, and whether such contract or arrangement exists as of the RestatementDate or is entered into thereafter. “Revolving L/C Commitment” shall mean, with respect to each Issuing Bank, the commitment of such Issuing Bank to issueLetters of Credit pursuant to Section 2.05, as such commitment may be (a) ratably reduced from time to time upon any reduction inthe Revolving Facility Commitments pursuant to Section 2.08, (b) reduced or increased from time to time pursuant to assignmentsby or to such Issuing Bank under Section 9.04 and (c) otherwise modified as permitted by this Agreement. The amount of eachIssuing Bank’s Revolving L/C Commitment as of the Restatement Date is set forth in Schedule 2.01, or in the Assignment andAcceptance pursuant to which any Lender that becomes an Issuing Bank shall have assumed its Revolving L/C Commitment, asapplicable. Notwithstanding anything herein to the contrary, the aggregate amount of the Revolving L/C Commitment of theIssuing Banks shall not exceed U.S.$40.0 million. “Unadjusted EBITDA” shall mean, for any period, the EBITDA for such period, determined without including any MaterialProject EBITDA Adjustments, any EBITDA attributable to an Included Entity, any EBITDA attributable to any Ohio Joint Ventureor any EBITDA attributable to any payment described in clause (e) of the definition of “Consolidated Net Income”, in each casefor such period. (ii) By adding the following defined terms in appropriate alphabetical order: “First Amendment” shall mean that certain First Amendment to Second Amended and Restated Credit Agreement and Amendedand Restated Guarantee and Collateral Agreement dated as of October 15, 2015, by and among the Borrower, the Subsidiary LoanParties, the MLP Entity, the Administrative Agent, the Collateral Agent and the Lenders party thereto. 8 “First Amendment Effective Date” shall mean first date on which conditions specified in Section 3 of the First Amendmenthaving been satisfied. “Ohio Joint Ventures” shall mean, collectively, Ohio Gathering Company, L.L.C. and Ohio Condensate Company, L.L.C., andeach individually, an “Ohio Joint Venture”. (b) The proviso in Section 3.11 of the Credit Agreement is hereby amended and restated in its entirely as follows: “provided, that, with respect to this clause (d), except as otherwise expressly permitted by Section 6.04 of this Agreement, in no case shall an entitythat is not a Loan Party or a Restricted Subsidiary have a Letter of Credit issued on its behalf.” (c) Section 5.04(e) of the Credit Agreement is hereby amended and restated in its entirety as follows: “(e)(i) upon the consummation of any Permitted Business Acquisition, any Investment in a joint venture (including an Ohio Joint Venture)permitted by Section 6.04, the acquisition of any Restricted Subsidiaries or any Person becoming a Restricted Subsidiaries in each case if theaggregate consideration for such transaction exceeds U.S.$25.0 million, or upon the reasonable request of the Administrative Agent (but not, in thecase of such request, more often than annually), an updated Perfection Certificate (or, to the extent such request relates to specified informationcontained in the Perfection Certificate, such information) reflecting all changes since the date of the information most recently received regardingsuch entity, pursuant to Section 4.02(e), this paragraph (e) or Section 5.10(f) and (ii) on or before the first day of any Acquisition Period, a certificateof a Responsible Officer certifying (A) in the case of an Acquisition Period described in clause (x) of the definition of “Acquisition Period,”compliance with the requirements of the definition of “Permitted Business Acquisition”, setting forth calculations demonstrating compliance withthe Financial Performance Covenants and stating the consideration paid in connection with such acquisition, or (B) in the case of an AcquisitionPeriod described in clause (y) of the definition of “Acquisition Period,” compliance with the requirements of either Section 6.04(q) or 6.04(r), asapplicable, setting forth calculations demonstrating compliance with the Financial Performance Covenants and stating the consideration paid inconnection with such Investment;” (d) Section 6.01(p) of the Credit Agreement is hereby amended and restated in its entirety as follows: “(p) Guarantees of Indebtedness of Unrestricted Subsidiaries and other Persons that are not Loan Parties or Restricted Subsidiariesto the extent that Investments are permitted under Sections 6.04(a)(i), 6.04(i) or 6.04(k);” 9 (e) Section 6.04 of the Credit Agreement is hereby amended by (i) deleting the word “and” at the end of paragraph (o) thereof, (ii) amendingand restating paragraph (p) thereof as follows and (iii) adding the following new paragraphs (q) and (r) to the end thereof: “(p) Investments in joint ventures in an aggregate amount not to exceed U.S.$100.0 million; provided that both immediatelybefore and after giving effect thereto: (i) no Default or Event of Default shall have occurred and be continuing or would resulttherefrom and (ii) the Borrower and its Restricted Subsidiaries shall be in compliance, on a Pro Forma Basis after giving effect tosuch Investment with the Financial Performance Covenants, each recomputed as at the last day of the most recently ended fiscalquarter of the Borrower and its Restricted Subsidiaries; (q) Investments in the Ohio Joint Ventures constituting (i) the purchase of Equity Interests in the Ohio Joint Ventures ownedon the First Amendment Effective Date by Summit Midstream Partners Holdings, LLC, including any options to acquire futureEquity Interests, and (ii) the exercise of any options acquired pursuant to clause (i) hereof; provided, in each case, that bothimmediately before and after giving effect thereto: (A) no Default or Event of Default shall have occurred and be continuing orwould result therefrom and (B) the Borrower and its Restricted Subsidiaries shall be in compliance, on a Pro Forma Basis aftergiving effect to such Investment with the Financial Performance Covenants, each recomputed as at the last day of the most recentlyended fiscal quarter of the Borrower and its Restricted Subsidiaries; and (r) Investments in the Ohio Joint Ventures constituting (i) purchases of additional Equity Interests in the Ohio Joint Venturesfrom holders of Equity Interests in the Ohio Joint Ventures (other than Summit Midstream Partners Holdings, LLC) and (ii)investments in response to capital calls in respect of the Ohio Joint Ventures that maintain the Borrower’s then existing ownershippercentage therein; provided, in each case, that immediately before such Investment and after giving effect thereto, both (A)Liquidity is greater than U.S.$20.0 million, (B) the Borrower shall be in compliance, on a Pro Forma Basis, with the FinancialPerformance Covenants, each recomputed as at the last day of the most recently ended fiscal quarter of the Borrower and itsRestricted Subsidiaries and (C) no Default or Event of Default shall have occurred and be continuing or would result therefrom.” 2. Amendments to Collateral Agreement. 10 (a) Section 3.01(a) of the Collateral Agreement is hereby amended and restated in its entirety as follows: (a)(i) all Equity Interests owned by it and issued by the Borrower, a Subsidiary Loan Party or an Included Entity as of theRestatement Date or by an Ohio Joint Venture as of the First Amendment Effective Date; (ii) any other Equity Interests owned inthe future by such Pledgor and issued by the Borrower, a Subsidiary Loan Party, an Included Entity or an Ohio Joint Venture; (iii)any certificates or other instruments representing all such Equity Interests, if any; (iv) all rights in, to and under each limitedliability operating agreement, limited liability company agreement, bylaws and each other organizational document of eachPledged Interests Issuer; and (v) to the extent any Pledged Interest Issuer is a limited liability company or a limited partnership, asa member or partner, as applicable, of such Pledged Interest Issuer (collectively, each subpart of clause (a), the “Pledged Stock”);provided that Pledged Stock shall include the interests listed on Schedule I; (b) Section 3.03(e) of the Collateral Agreement is hereby amended and restated in its entirety as follows: (e) except for restrictions and limitations imposed by the Loan Documents, listed on Schedule 3.07(e) of the CreditAgreement or otherwise permitted to exist pursuant to the terms of the Credit Agreement, and to the extent applicable, laws of anyapplicable Foreign Jurisdiction with respect to Pledged Collateral pledged after the Restatement Date and securities lawsgenerally, (i) the Pledged Collateral (other than Pledged Collateral consisting of Equity Interests in any Ohio Joint Venture) is andwill continue to be freely transferable and assignable and (ii) none of the Pledged Collateral (other than Pledged Collateralconsisting of Equity Interests in any Ohio Joint Venture) is or will be subject to any option, right of first refusal, shareholdersagreement, charter or by-law provisions or contractual restriction of any nature that might prohibit, impair, delay or otherwiseaffect the pledge of such Pledged Collateral hereunder, the sale or disposition thereof pursuant hereto or the exercise by theCollateral Agent of rights and remedies hereunder; 3. Conditions Precedent. This Amendment shall become effective as of the First Amendment Effective Date provided that the AdministrativeAgent shall have received from the Required Lenders and each other party hereto counterparts (in such number as may be requested by the AdministrativeAgent) of this Amendment signed on behalf of such party. The Administrative Agent shall notify the Borrower and the Lenders of the First AmendmentEffective Date, and such notice shall be conclusive and binding. 11 4. Representations and Warranties. Each Loan Party represents and warrants to the Administrative Agent and each of the Lenders that: (a) all of the representations and warranties contained in the Credit Agreement and the other Loan Documents are true andcorrect in all material respects (except for any representation and warranty that is qualified by materiality or Material Adverse Effect, whichsuch representation and warranty shall be true and correct in all respects) on and as of the First Amendment Effective Date except to theextent that such representations and warranties expressly relate solely to an earlier date in which case they shall have been true and correctin all material respects as of such earlier date, except that the representations and warranties contained in Section 3.05 of the CreditAgreement shall be deemed to refer to the most recent financial statements furnished pursuant to Sections 5.04(a) and (b) of the CreditAgreement, respectively; (b) no Default or Event of Default has occurred and is continuing as of the First Amendment Effective Date under any LoanDocument; (c) this Amendment is within such Loan Party’s organizational powers and has been duly authorized by all necessaryorganizational action on the part of such Loan Party; (d) this Amendment has been duly executed and delivered by each Loan Party and constitutes a legal, valid and bindingobligation of each Loan Party, enforceable against such Loan Party in accordance with its terms, subject to applicable laws affectingcreditors’ rights generally and subject to (i) the effects of bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance orother laws affecting creditors’ rights generally, (ii) general principles of equity (regardless of whether such enforceability is considered in aproceeding in equity or at law) and (iii) implied covenants of good faith and fair dealing; and (e) this Amendment will not violate any applicable law in any material respect, will not violate or result in a default orrequire any consent or approval under any indenture, agreement or other instrument binding upon any Loan Party or its property, or giverise to a right thereunder to require any payment to be made by any Loan Party, except for violations, defaults or the creation of such rightsthat could not reasonably be expected to result in a Material Adverse Effect. 5. Ratification. Except as expressly amended hereby, the Loan Documents shall remain in full force and effect. The Credit Agreement and theCollateral Agreement, each as hereby amended, and all rights and powers created thereby or thereunder and under the other Loan Documents are in allrespects ratified and confirmed and remain in full force and effect. 6. Definitions and References. Any term used in this Amendment that is defined in the Credit Agreement shall have the meaning thereinascribed to it. The terms “Agreement” and “Credit Agreement” as used in the Loan Documents or any other instrument, document or writing furnished to theAdministrative Agent, the Collateral Agent or the Lenders by the 12 Borrower and referring to the Credit Agreement shall mean the Credit Agreement as hereby amended. The terms “Agreement” and “Collateral Agreement” asused in the Loan Documents or any other instrument, document or writing furnished to the Administrative Agent, the Collateral Agent or the Lenders by theBorrower or any Guarantor and referring to the Collateral Agreement shall mean the Collateral Agreement as hereby amended. 7. Miscellaneous. This Amendment (a) shall be binding upon and inure to the benefit of the Borrower, the Guarantors, the AdministrativeAgent, the Collateral Agent and the Lenders and their respective successors and assigns (provided, however, no party may assign its rights hereunder exceptin accordance with the Credit Agreement); (b) may be modified or amended only in accordance with the Credit Agreement; (c) may be executed in severalcounterparts, and by the parties hereto on separate counterparts, and each counterpart, when so executed and delivered, shall constitute an originalagreement, and all such separate counterparts shall constitute but one and the same agreement; and (d) TOGETHER WITH THE OTHER LOANDOCUMENTS, EMBODIES THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES WITH RESPECT TO THESUBJECT MATTER HEREOF AND SUPERSEDES ALL PRIOR AGREEMENTS, CONSENTS AND UNDERSTANDINGS RELATING TO SUCHSUBJECT MATTER. Delivery of an executed counterpart of a signature page to this Amendment by telecopy or as an attachment to an email shall beeffective as delivery of a manually executed counterpart of this Amendment. 8. Loan Document. The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as awaiver of any right, power or remedy of any Lender, the Administrative Agent or the Collateral Agent under any of the Loan Documents, nor constitute awaiver of any provision of any of the Loan Documents. On and after the effectiveness of this Amendment, this Amendment shall for all purposes constitute aLoan Document. 9. Governing Law. This Amendment shall be governed by, and construed in accordance with, the law of the State of New York. [Signature Pages Follow] 13 The parties hereto have caused this Amendment to be duly executed as of the day and year first above written. BORROWER: SUMMIT MIDSTREAM HOLDINGS, LLC By:/s/ Matthew S. HarrisonName:Matthew S. HarrisonTitle: Executive Vice President GUARANTORS: SUMMIT MIDSTREAM PARTNERS, LP By:SUMMIT MIDSTREAM GP, LLC, its general partner By:/s/ Matthew S. HarrisonName:Matthew S. HarrisonTitle: Executive Vice President DFW MIDSTREAM SERVICES LLCSUMMIT MIDSTREAM FINANCE CORP.GRAND RIVER GATHERING, LLCRED ROCK GATHERING COMPANY, LLCBISON MIDSTREAM, LLCPOLAR MIDSTREAM, LLCEPPING TRANSMISSION COMPANY, LLC By:/s/ Matthew S. HarrisonName:Matthew S. HarrisonTitle: Executive Vice President Signature Pages — SMLP First Amendment  WELLS FARGO BANK, NATIONALASSOCIATION, as Administrative Agent, Collateral Agent and aLender By:/s/ Alan W. WrayName:Alan W. WrayTitle:Managing Director Signature Pages — SMLP First Amendment  LENDERS: ROYAL BANK OF CANADA By:/s/ Jason S. YorkName:Jason S. YorkTitle:Authorized Signatory Signature Pages — SMLP First Amendment  BANK OF AMERICA, N.A. By:/s/ Michael ClayborneName:Michael ClayborneTitle:Vice President Signature Pages — SMLP First Amendment  DEUTSCHE BANK AG NEW YORK BRANCH By:/s/ Dusan LazarovName:Dusan LazarovTitle:Director By:/s/ Michael ShannonName:Michael ShannonTitle:Vice President Signature Pages — SMLP First Amendment  BMO HARRIS FINANCING, INC. By:/s/ Kevin UtseyName:Kevin UtseyTitle:Director Signature Pages — SMLP First Amendment  ING CAPITAL LLC By:/s/ Hans BeekmansName:Hans BeekmansTitle:Director By:/s/ Subha PasumartiName:Subha PasumartiTitle:Managing Director Signature Pages — SMLP First Amendment  SUMITOMO MITSUI BANKING CORPORATION By:/s/ David KeeName:David KeeTitle:Managing Director Signature Pages — SMLP First Amendment  CAPITAL ONE, NATIONAL ASSOCIATION By:/s/ Christopher KunaName:Christopher KunaTitle:Vice President Signature Pages — SMLP First Amendment  COMPASS BANK By:/s/ Gabriela AlbinoName:Gabriela AlbinoTitle:Vice President Signature Pages — SMLP First Amendment  AMEGY BANK NATIONAL ASSOCIATION By:/s/ Jill McSorleyName:Jill McSorleyTitle:Senior Vice President Signature Pages — SMLP First Amendment  REGIONS BANK By:/s/ David ValentineName:David ValentineTitle:Senior Vice President Signature Pages — SMLP First Amendment  CITIBANK, N.A. By:/s/ Tom BenavidesName:Tom BenavidesTitle:Director Signature Pages — SMLP First Amendment  CREDIT AGRICOLE CORPORATE & INVESTMENT BANK By:/s/ Dixon SchultzName:Dixon SchultzTitle:Managing Director By:/s/ Michael WillisName:Michael WillisTitle:Managing Director Signature Pages — SMLP First Amendment  BARCLAYS BANK PLC By:/s/ Luke SymeName:Luke SymeTitle:Assistant Vice President Signature Pages — SMLP First Amendment  BRANCH BANKING & TRUST COMPANY By:/s/ Ryan AmanName:Ryan AmanTitle:Vice President Signature Pages — SMLP First Amendment  MORGAN STANLEY BANK, N.A. By:/s/ Dmitriy BarskiyName:DMITRIY BARSKIYTitle:Authorized Signatory Signature Pages — SMLP First Amendment  GOLDMAN SACHS BANK USA By:/s/ Michelle LatzoniName:Michelle LatzoniTitle:Authorized Signatory Signature Pages — SMLP First Amendment  CADENCE BANK, N.A. By:/s/ David AndersonName:David AndersonTitle:Senior Vice President Signature Pages — SMLP First Amendment  MIDFIRST BANK By:Name:Title: By:Name:Title: Signature Pages — SMLP First Amendment  PNC BANK, NATIONAL ASSOCIATION By:Name:Title: Signature Pages — SMLP First Amendment  COMERICA BANK By:/s/ John S. LesikarName:John S. LesikarTitle:Sr. Vice President Signature Pages — SMLP First Amendment  TORONTO DOMINION (TEXAS) LLC By:/s/ Rayan KarimName:Rayan KarimTitle:Authorized Signatory Signature Pages — SMLP First Amendment EXHIBIT 12.1SUMMIT MIDSTREAM PARTNERS, LPRATIO OF EARNINGS TO FIXED CHARGESThe following table sets forth our ratio of earnings to fixed charges for the periods indicated on a consolidated historical basis. For purposes ofcomputing the ratio of earnings to fixed charges, "earnings" are defined as income before taxes plus fixed charges less capitalized interest. "Fixedcharges" consist of interest expensed and capitalized, amortization of deferred loan costs and an estimate of interest within rent expense. Year ended December 31, 2015 (1) 2014 (2) 2013 2012 2011 (Dollars in thousands)Earnings: (Loss) income before income taxes$(187,485) $(14,103) $53,566 $43,679 $38,646Add (deduct): Fixed charges52,416 44,532 25,926 15,794 6,579Capitalized interest(3,137) (3,778) (6,255) (2,784) (3,362)Total earnings$(138,206) $26,651 $73,237 $56,689 $41,863Fixed Charges: Interest expense$48,616 $40,159 $19,173 $12,766 $3,054Capitalized interest3,137 3,778 6,255 2,784 3,362Estimate of interest within rent expense663 595 498 244 163Total fixed charges$52,416 $44,532 $25,926 $15,794 $6,579 Ratio of earnings to fixed charges— 0.60 2.82 3.59 6.36__________(1) The ratio of earnings to fixed charges was negative for the year ended December 31, 2015. To achieve a ratio of earnings to fixed charges of 1:1, wewould have had to generate an additional $190.6 million of earnings for the year ended December 31, 2015. Loss before income taxes for the year endedDecember 31, 2015 included $248.9 million of goodwill impairments.(2) The ratio of earnings to fixed charges was less than 1:1 for the year ended December 31, 2014. To achieve a ratio of earnings to fixed charges of 1:1, wewould have had to generate an additional $17.9 million of earnings for the year ended December 31, 2014. Loss before income taxes for the year endedDecember 31, 2014 included $54.2 million of goodwill impairment.EX12.1-1EXHIBIT 21.1SUMMIT MIDSTREAM PARTNERS, LPLIST OF SUBSIDIARIESName State or other jurisdiction of incorporation or organizationSummit Midstream Holdings, LLC DelawareGrand River Gathering, LLC DelawareDFW Midstream Services LLC DelawareBison Midstream, LLC DelawareSummit Midstream Finance Corp. DelawareRed Rock Gathering Company, LLC DelawarePolar Midstream, LLC DelawareEpping Transmission Company, LLC DelawareEX 21.1-1EXHIBIT 23.1CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe consent to the incorporation by reference in Registration Statement Nos. 333-197311 and 333-191493 on Form S-3 and Nos. 333-184214 and333-189684 on Form S-8 of our report dated February 26, 2016, relating to the consolidated financial statements of Summit Midstream Partners,LP and subsidiaries (the “Partnership”) (which report expresses an unqualified opinion and includes an explanatory paragraph regarding theretrospective change in the Partnership's composition of reportable segments), and the effectiveness of the Partnership's internal control overfinancial reporting, appearing in this Annual Report on Form 10-K of the Partnership for the year ended December 31, 2015./s/ Deloitte & Touche LLPAtlanta, GeorgiaFebruary 26, 2016EX 23.1-1EXHIBIT 31.1CERTIFICATIONSI, Steven J. Newby, certify that:1. I have reviewed this annual report on Form 10-K of Summit Midstream Partners, LP;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary tomake the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periodcovered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respectsthe financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as definedin Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and15d-15(f)) for the registrant and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us byothers within those entities, particularly during the period in which this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's mostrecent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant's internal control over financial reporting; and5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internalcontrol over financial reporting.Date:February 26, 2016 /s/ Steven J. Newby Steven J. Newby President, Chief Executive Officer and Director ofSummit Midstream GP, LLC (the general partner ofSummit Midstream Partners, LP)Ex 31.1-1EXHIBIT 31.2CERTIFICATIONSI, Matthew S. Harrison, certify that:1. I have reviewed this annual report on Form 10-K of Summit Midstream Partners, LP;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary tomake the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periodcovered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respectsthe financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as definedin Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and15d-15(f)) for the registrant and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us byothers within those entities, particularly during the period in which this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's mostrecent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant's internal control over financial reporting; and5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internalcontrol over financial reporting.Date:February 26, 2016 /s/ Matthew S. Harrison Matthew S. Harrison Executive Vice President and Chief Financial Officerof Summit Midstream GP, LLC (the general partner ofSummit Midstream Partners, LP)Ex 31.2-1EXHIBIT 32.1CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the annual report on Form 10-K of Summit Midstream Partners, LP (the “Registrant”) for the annual period ended December 31,2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Steven J. Newby, as President,Chief Executive Officer and Director of Summit Midstream GP, LLC, the general partner of the Registrant, and Matthew S. Harrison, as ExecutiveVice President and Chief Financial Officer of Summit Midstream GP, LLC, the general partner of the Registrant, each hereby certify, pursuant to18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results ofoperations of the Registrant. /s/ Steven J. NewbyName: Steven J. NewbyTitle: President, Chief Executive Officer and Director of Summit Midstream GP, LLC (the generalpartner of Summit Midstream Partners, LP)Date: February 26, 2016 /s/ Matthew S. HarrisonName: Matthew S. HarrisonTitle: Executive Vice President and Chief Financial Officer of Summit Midstream GP, LLC (thegeneral partner of Summit Midstream Partners, LP)Date: February 26, 2016Ex 32.1-1

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