v3.26.1
EQUITY AND MEZZANINE EQUITY
 3 Months Ended
Mar. 31, 2026
Equity [Abstract]  
EQUITY AND MEZZANINE EQUITY
10. EQUITY AND MEZZANINE EQUITY
Common Stock. An update on the number of shares of common stock follows for the period from December 31, 2025 to March 31, 2026:
Shares of Common Stock
Shares, December 31, 202512,262,320 
Shares issued for SMC LTIP, net200,615 
Related party shares issued for cash1,351,351 
Shares, March 31, 202613,814,286 
Related Party Shares Issued for Cash. On March 31, 2026, pursuant to a Securities Purchase Agreement (the “Purchase Agreement”), by and among the Company, SMLP, and Tall Oak Parent, and solely for purposes of modifying certain existing registration rights as detailed in the Purchase Agreement, Connect Midstream, LLC, a Delaware limited liability company, the Company issued and sold to Tall Oak Parent 1,351,351 shares of common stock of the Company in exchange for $41.5 million of cash proceeds, net of $0.5 million of issuance costs. The shares were issued at a price of $31.08 per share, which represented the “Minimum Price” in accordance with NYSE regulations. The shares are subject to a 6-month lock up period and other terms and conditions.
Class B Common Stock. In the Tall Oak Acquisition, the Company issued shares of non-economic Class B Common Stock to Tall Oak Parent. Shares of Class B Common Stock have Company voting rights and are exchangeable along with the associated Partnership Common Units for shares of our common stock at the election of the holder for no additional consideration.
An update on the number of shares of Class B Common Stock follows for the period from December 31, 2025 to March 31, 2026.
Shares of
Class B Common Stock
Shares, December 31, 20256,524,467 
2026 activity— 
Shares, March 31, 20266,524,467 
Series A Preferred Stock. The Series A Preferred Stock ranks senior to (i) shares of common stock and Class B Common Stock and (ii) each other class or series of company interests or other equity securities in the Company that may be established in the future that expressly ranks junior to the Series A Preferred Stock as to the payment of dividends and amounts payable upon a liquidation event. The Series A Preferred Stock ranks equal in all respects with each class or series of company interests or other equity securities in the Company that may be established in the future that is not expressly made senior or subordinated to the Series A Preferred Stock as to the payment of dividends and amounts payable on a liquidation event. The Series A Preferred Stock ranks junior to (i) all of the Company’s existing and future indebtedness and other liabilities with respect to assets available to satisfy claims against the Company and (ii) each other class or series of company interests or other equity securities in the Company established in the future that is expressly made senior to the Series A Preferred Stock as to the payment of dividends and amounts payable upon a liquidation event.
Dividends on the Series A Preferred Stock are cumulative and compounding and are payable quarterly in arrears on the 15th day of March, June, September and December of each year (each, a “Dividend Payment Date”) to holders of record as of the close of business on the first business day of the month of the applicable Dividend Payment Date, in each case, when, as, and if declared by the Board of Directors out of legally available funds for such purpose. The dividend rate for the Series A Preferred Stock is equal to the three-month SOFR plus a spread of 7.69%. The floating rate established on March 15, 2026 for the period ended June 30, 2026 was 11.4%.
The board of directors of Summit Midstream Corporation reinstated cash dividends on its Series A Preferred Stock beginning on March 14, 2025. During the three month periods ended March 31, 2026 and 2025, cash dividend payments totaling $49.4 million and $3.4 million were paid, respectively. The cash dividend payment for the quarterly period ended March 31, 2026 includes a payment of $46.3 million for accrued and unpaid dividends owed from March 15, 2020 to December 14, 2024.
As of March 31, 2026 and December 31, 2025, the Company had 65,508 shares of Series A Preferred Stock outstanding.
Partnership Common Units. In the Tall Oak Acquisition, SMLP issued Partnership Common Units to Tall Oak Parent. Such Partnership Common Units are exchangeable along with the associated shares of Class B Common Stock for shares of SMC common stock at the election of the holder for no additional consideration.
An update on the number of Partnership Common Units for the period from December 31, 2025 to March 31, 2026 follow:
Partnership Common Units owned by Tall Oak ParentPartnership Common Units Owned by the CompanyTotal Partnership Common Units
Units, December 31, 20256,524,467 12,262,320 18,786,787 
Units issued for SMC LTIP, net— 200,615 200,615 
Related party units issued for cash— 1,351,351 1,351,351 
Units, March 31, 20266,524,467 13,814,286 20,338,753 
Subsidiary Series A Preferred Units. Until March 2026, Summit Permian Transmission Holdco, LLC (“Permian Holdco”) had Series A Fixed Rate Cumulative Redeemable Preferred Units (“Subsidiary Series A Preferred Units”) that ranked senior to each other class or series of limited liability company interests or other equity securities in Permian Holdco that may be established in the future that expressly ranks junior to the Subsidiary Series A Preferred Units as to the payment of distributions and amounts payable upon a liquidation event. The Subsidiary Series A Preferred Units ranked equal in all respects with each class or series of limited liability company interests or other equity securities in Permian Holdco that may be established in the future that is not expressly made senior or subordinated to the Subsidiary Series A Preferred Units as to the payment of distributions and amounts payable on a liquidation event. The Subsidiary Series A Preferred Units ranked junior to (i) all of Permian Holdco’s or a subsidiary of Permian Holdco’s future indebtedness and other liabilities with respect to assets available to satisfy claims against Permian Holdco and (ii) each other class or series of limited liability company interests or other equity securities in Permian Holdco established in the future that is expressly made senior to the Subsidiary Series A Preferred Units as to the payment of distributions and amounts payable upon a liquidation event. Income is allocated to the Subsidiary Series A Preferred Units in an amount equal to the earned distributions for the respective reporting period.
In March 2026, the Company redeemed in full, all outstanding Subsidiary Series A Preferred Units. The following table shows the change in the Company’s Subsidiary Series A Preferred Unit balance from December 31, 2025 to March 31, 2026, net of $0.6 million of unamortized issuance costs as of December 31, 2025:
(In thousands)
Balance, December 31, 2025$141,296 
Redemption accretion, net of issuance cost amortization1,930 
Cash distribution and redemption(143,226)
Balance, March 31, 2026$— 
Noncontrolling interest. Noncontrolling interest represents the portion of net assets in the Company’s consolidated subsidiaries that are not wholly owned by the Company. The Company’s noncontrolling interest is recorded at carrying value and is reported as a component of equity on the condensed consolidated balance sheet. As of March 31, 2026, the Company’s noncontrolling interest is approximately 32.1% of the net assets of SMLP. The noncontrolling interest will be adjusted in the future for (i) any net income or loss generated by SMLP, and (ii) any equity shifts resulting from the issuance of common stock in connection with the SMC LTIP, or certain changes to SMLP’s capital accounts.
The following table shows the changes in noncontrolling interest during the periods presented:
Noncontrolling
Interest
(In thousands)
Balance, December 31, 2025$400,376 
Net loss(2,914)
Equity shift(78,286)
Balance as of March 31, 2026$319,176 
Equity shift - Change in Ownership of Consolidated Subsidiary. During the three months ended March 31, 2026, the Company had an equity shift and its noncontrolling interest was reduced by $78.3 million. During the three months ended March 31, 2026, the Company increased its ownership of SMLP as a result of certain Partnership Common Unit issuances resulting from SMC LTIP vesting events and the Company’s related party share issuance. These equity issuances increased the Company’s ownership percentage of SMLP and decreased the ownership percentage of SMLP held by the noncontrolling interest owner.
Dividend Policy. In March 2020, SMLP suspended 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 consummation of the Corporate Reorganization, all accumulated and unpaid distributions on the Series A Preferred Units were deemed by the Series A Certificate of Designation to be Series A Unpaid Cash Dividends (as defined in the Series A Certificate of Designation) per share of Series A Preferred Stock, and any rights to accumulated and unpaid distributions on such Series A Preferred Units were discharged. Because the Series A Preferred Stock ranks senior to the Company’s common stock with respect to dividend rights, any accrued dividends on the Series A Preferred Stock must first be paid prior to the initiation of dividends to holders of the Company’s common stock. As mentioned above, during the quarter ended March 31, 2025, the Company resumed distributions on its Series A Preferred Stock. Further, in March 2026, the Company repaid all accrued and unpaid dividends on its Series A Preferred Stock, including the $46.3 million for accrued and unpaid dividends owed from March 15, 2020 to December 14, 2024.
Absent a material change to the Company’s business, the Company does not expect to pay dividends to holders of the Company’s common stock in the foreseeable future. Any future dividend payments will depend on the Company’s financial condition, market conditions and other matters deemed relevant by the Board of Directors. Additionally, the Company’s ability to pay dividends is subject to restrictions on dividends under the Amended and Restated ABL Facility, Series A Preferred Stock and the indenture governing the 2029 Senior Notes.