PARTNERS' CAPITAL AND MEZZANINE CAPITAL

6 Months Ended

Jun. 30, 2024

10. PARTNERS' CAPITAL AND MEZZANINE CAPITAL

Common Units. An update on the number of common units is as follows for the period from December 31, 2023 to June 30, 2024.


			Common Units
Units, December 31, 2023			10,376,189

Common units issued for SMLP LTIP, net			272,496
Units, June 30, 2024			10,648,685

Series A Preferred Units. As of June 30, 2024, the Partnership had 65,508 Series A Preferred Units outstanding and $39.6 million of accrued and unpaid distributions on its Series A Preferred Units.

Subsidiary Series A Preferred Units. The Partnership records its Subsidiary Series A Preferred Units at fair value upon issuance, net of issuance costs, and subsequently records an effective interest method accretion amount each reporting period to

accrete the carrying value to a most probable redemption value that is based on a predetermined internal rate of return measure. Net income (loss) attributable to common limited partners includes adjustments for PIK distributions and redemption accretion.

As of June 30, 2024, the Partnership had 93,039 Subsidiary Series A Preferred Units issued and outstanding.

If the Subsidiary Series A Preferred Units were redeemed on June 30, 2024, the redemption amount would be $128.8 million when considering the applicable multiple of invested capital metric and make-whole amount provisions contained in the Amended and Restated Limited Liability Company Agreement of Permian Holdco.

The following table shows the change in the Partnership’s Subsidiary Series A Preferred Unit balance from January 1, 2024 to June 30, 2024, net of $1.4 million and $1.7 million of unamortized issuance costs at June 30, 2024 and December 31, 2023, respectively:


	(In thousands)
Balance at December 31, 2023	$	124,652
Redemption accretion, net of issuance cost amortization	7,636
Cash distribution (includes a $1.6 million distribution payable as of June 30, 2024)	(3,256)
Balance at June 30, 2024	$	129,032

Cash Distribution Policy. The Partnership suspended its cash distributions to holders of its common units and Series A Preferred Units, commencing with respect to the quarter ended March 31, 2020. Upon the resumption of distributions, the Partnership Agreement would have required that it distribute all available cash, subject to reserves established by its General Partner, within 45 days after the end of each quarter to unitholders of record on the applicable record date. The amount of distributions paid under this policy was subject to fluctuations based on the amount of cash the Partnership generated from its business and the decision to make any distribution was determined by the General Partner, taking into consideration the terms of the Partnership Agreement. There were no distributions paid during the three and six months ended June 30, 2024 or during the twelve months ended December 31, 2023. In connection with the consummation of the Corporate Reorganization (as defined herein), the Partnership Agreement was amended to, among other things, reflect that all of the issued and outstanding limited partnership interests of the Partnership are held by Summit Midstream Corporation. For information on the Corporate Reorganization, see Note 16 – Subsequent Events.