Summit Midstream Corporation ($SMC)

Good day, and thank you for standing by. Welcome to the Summit Midstream Corporation Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Randall Burton, Vice President of Finance and Treasurer. Please go ahead.

Thanks, operator, and good morning, everyone. If you don't already have a copy of our earnings release and presentation, please visit our website at www.summitmidstream.com, where you'll find it on the homepage, Events and Presentations section or Quarterly Results section. With me today to discuss our fourth quarter and full year 2025 financial and operating results is Heath Deneke, our President, Chief Executive Officer and Chairman; Bill Mault, our Chief Financial Officer; and Chris Tennant, our Chief Commercial Officer, along with other members of our senior management team. Before we start, I'd like to remind you that our discussion today may contain forward-looking statements. These statements may include, but are not limited to, our estimates of future volumes, operating expenses and capital expenditures. They may also include statements concerning anticipated cash flow, liquidity, business strategy and other plans and objectives for future operations. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can provide no assurance that such expectations will prove to be correct. Please see SMC's annual report on Form 10-K for the fiscal year ended December 31, 2025, which the company filed with the SEC on March 16, 2026, as well as our other SEC filings for a listing of factors that could cause actual results to differ materially from expected results. Please also note that on this call, we use the terms EBITDA, segment adjusted EBITDA, adjusted EBITDA, distributable cash flow and free cash flow. These are non-GAAP financial measures, and we have provided reconciliations to the most directly comparable GAAP measures in our most recent earnings release. And with that, I'll turn the call over to Heath.

Great. All right. Well, thanks, Randall, and good morning, everyone. I wanted to start this morning by introducing you to a new voice you'll hear on the call today. Chris Tennant, who joined Summit in February as our Chief Commercial Officer, is joining us. Chris brings more than 3 decades of experience across the oil, natural gas and NGL value chain, and he'll be leading our commercial organization going forward. Chris has hit the ground running since joining the team and is already making a strong impact across the organization. I'm excited to have him here and look forward to the contributions he'll make as we continue executing on Summit's growth strategy. Turning now to Slide 3. We're very pleased with the progress Summit made during the quarter and in the first couple of months of 2026. From a financial perspective, Summit generated approximately $58.6 million of adjusted EBITDA in the fourth quarter, along with $33.7 million of distributable cash flow and $17 million of free cash flow. Operationally, and despite the weakening of oil prices in the second half of 2025, we continue to see solid development activity across our systems with 7 rigs currently running behind our footprint and approximately 90 drilled but uncompleted wells. At this point, we have visibility to between 116 and 126 well connections in 2026, which is relatively modest compared to prior years. However, we could see more activity accelerate in the second half of the year as producers look to take advantage of the recent run-up in oil prices. On the commercial front, we made a tremendous amount of progress since our last update. Starting with the Double E Pipeline, we recently signed 2 11-plus year transportation agreements totaling 440 million per day of firm capacity. In addition, we received an affirmative FID notice on the previously announced Producers Midstream 2, 100 million a day agreement that we announced last year. In the aggregate, this represents more than 0.5 Bcf a day of new long-term take-or-pay agreements that we've executed over the past 6 months. With these new agreements and the corresponding step-up in committed take-or-pay volumes over the next several years, our Permian segment adjusted EBITDA is expected to grow from $34 million in 2025 to roughly $60 million by 2029. With these new contracts, Double E's existing mainline capacity is now generally fully subscribed. However, as Chris will get into further in the call, we have launched a binding open season to solicit additional customer commitments to support a mainline compression project that would expand the pipeline's capacity by approximately 50% or roughly $800 million a day. Additionally, we successfully refinanced the Double E cap structure with a new $440 million term loan facility, which enables an $85 million distribution back to Summit, which we intend to use to repay $45 million of accrued and unpaid dividends and reduce borrowings under the ABL. Bill will walk through the details of the transaction later in the call, but this transaction is a major win for the company as it increases our financial flexibility while allowing us to continue to execute on these high-return growth projects at Double E, including the Mainline compression project without straining Summit's corporate balance sheet. In addition, the repayment of the accrued and unpaid dividends on the Series A preferred stock further simplifies Summit's balance sheet and is also an important step towards enabling a sustainable return of capital program for our shareholders in the future. We're also very excited about the growth outlook in the Rockies segment as we continue to see development activity up in the Bakken shift towards our pipeline footprint in Williams and Divide counties. As Chris will cover later in the call, our Polar and Divide system is uniquely positioned to benefit from that shift as evidenced by a new long-term crude gathering agreement that we executed in the fourth quarter in Divide County. There's also a lot of positive momentum building up around our G&P system in the DJ Basin that we're excited about as well. I'm sure we'll be updating everyone on as we move throughout the rest of 2026. And finally, at the end of the call, I wanted to walk investors through a snapshot of Summit's strong and highly visible organic growth outlook that will be led by our Permian and Rockies segment. We're very excited about the commercial momentum we have around the business and the growing backlog of very attractive high-returning organic growth projects that we believe positions the company to achieve over $100 million of adjusted EBITDA growth by 2030. We believe we'll generate a tremendous amount of shareholder value in the coming years as we execute on these growth plans while we maintain our financial discipline and continued focus on improving the balance sheet. And with that, I'll turn the call over to Bill to walk through our financial results and guidance on Slide 4.

Thanks, Heath, and good morning, everyone. And before jumping to Slide 4, why don't we stay on Page 3. Summit reported fourth quarter adjusted EBITDA of $58.6 million, resulting in full year 2025 adjusted EBITDA of approximately $243 million. Capital expenditures totaled $19 million for the quarter and $89 million for the full year. With respect to Summit's balance sheet, we ended the year with net debt of approximately $930 million and approximately $890 million pro forma for the $40 million repayment of the ABL associated with the $85 million onetime distribution from the new Summit Permian Transmission term loan. This brings pro forma leverage to approximately 3.9x. Our available borrowing capacity at the end of the fourth quarter totaled approximately $387 million, which included roughly $1 million of undrawn letters of credit. Now on to the segments. The Rockies segment, which includes our DJ and Williston Basin systems, generated adjusted EBITDA of $27.8 million, a decrease of $1.2 million relative to third quarter, primarily driven by a decline in liquids volume due to natural production declines, partially offset by modest growth in natural gas volumes. Liquids volumes averaged approximately 66,000 barrels per day during the quarter, a decrease of roughly 6,000 barrels a day relative to the third quarter, primarily due to natural production declines and no new well connections. Natural gas volumes averaged approximately 160 million cubic feet per day, an increase of roughly 2 million cubic feet per day relative to third quarter as wells connected early in the year continued to ramp toward peak production. During the quarter, we connected 33 new wells in the DJ Basin, which we expect to reach peak production in the second quarter of 2026. We currently have 6 rigs running behind the system, including 4 in the Williston and 2 in the DJ and approximately 65 DUCs, which provides good visibility into expected development activity in 2026. The Permian Basin segment, which includes our 70% interest in the Double E Pipeline, reported adjusted EBITDA of $8.7 million, an increase of $0.1 million relative to the third quarter, primarily due to higher volume throughput on the pipeline. Volume throughput on Double E averaged 861 million cubic feet per day during the quarter. The Piceance segment reported adjusted EBITDA of $10 million, a decrease of $2.5 million relative to third quarter, primarily due to modest decline in volume throughput and certain deferred revenues recognized in the prior quarter. Finally, the Mid-Con segment reported adjusted EBITDA of $21.5 million, a decrease of approximately $2.1 million, primarily due to lower volume throughput from natural production declines across the Arkoma and Barnett systems. During the quarter, we connected 6 wells in the Arkoma and no new wells in the Barnett. Subsequent to quarter end, we connected an additional 6 wells in the Arkoma, and there is currently 1 rig running behind the Arkoma system and approximately 20 DUCs. Let me now turn to Page 4 and discuss our outlook for 2026. We are establishing 2026 adjusted EBITDA guidance of $225 million to $265 million and total capital expenditures of approximately $85 million to $105 million, which includes $35 million to $50 million in base business growth capital, approximately $15 million to $20 million of maintenance capital and approximately $35 million of contributions to the Double E joint venture. The $35 million of contributions to the Double E JV are expected to be fully funded through the new term loan facility we closed yesterday. The majority of the base business growth capital will be directed toward pad connections in the Rockies and Mid-Con regions, where we continue to see steady development activity behind our systems. Similar to previous years, our guidance range incorporates real-time feedback we are receiving from our customers regarding their development plans, and we actively track rigs and completion crews across our systems to ensure well connects remain on schedule. Just as a reminder of our risking methodology, if our producers hit their current turn-in-line dates and production targets, we would expect to be near the high end of our adjusted EBITDA guidance range. The midpoint of the range reflects modest risking applied to current drilling schedules, while the low end assumes additional delays in well connects expected later in the year, which could push some of that activity into 2027. Across our footprint today, we currently have 7 rigs running and approximately 90 DUCs behind our system, which provides line of sight to the 116 to 126 well connections expected in 2026. Approximately 80% of those expected well connections are crude oil-oriented wells with the remaining 20% natural gas oriented. Commodity price assumptions for this range assumes average crude oil prices in the mid-60s and natural gas price of approximately $3.40 per MMBtu. There's obviously been a lot of upside movement in crude oil prices over the past few weeks, which if sustained throughout the year, could lead to acceleration of activity from our customers and improvement in product margin associated with certain percentage of proceeds contracts in the DJ Basin. In the Rockies, we are currently expecting 90 to 100 well connects in 2026 with a fairly even split between the DJ and the Williston. This level of activity, along with the 33 wells connected in the fourth quarter will drive volume throughput growth in natural gas and liquids. Additionally, of the roughly 45 to 50 wells expected in the Williston, we will be gathering both crude and produced water for 9 of those wells, which we expect around a 3:1 produced water to crude oil ratio. Expected well connections in the DJ are a little bit lower in 2026 than historical average. This is primarily due to the recently announced acquisition of Verdad Resources, a key customer behind the system by Peoria Resources, a subsidiary of JAPEX Corp. Long term, we're excited about the acquisition and expect it to be a net positive to development. But as with all upstream consolidation, it has created some near-term delays in development. In the Mid-Con, we are expecting 26 wells to be connected to the system, including 9 in the Arkoma and 17 in the Barnett. In the Arkoma, all but 3 of those wells are already connected and flowing and in the Barnett, all 17 wells are currently in documentary. Our key customer in the Arkoma is evaluating additional development in late 2026 and early 2027, but we have not included that potential activity in our financial guidance until we get confirmation that they intend to drill and complete those wells. With the level of activity included in our financial guidance, we would expect volumes in the Mid-Con to be relatively flat year-over-year. In the Piceance, we are expecting no new well connects in 2026, which will result in continued decline in volume and EBITDA relative to 2025. Additionally, shortfall payments are expected to decline by approximately $4 million from $17 million in 2025 to approximately $13 million in 2026. As a reminder, MVCs and shortfall payments completely roll off in the third quarter of 2026. So 2027 will not have MVC shortfall payments in the Piceance. Shifting to the Permian. Year-over-year EBITDA growth is primarily driven by contractual step-ups in the long-term take-or-pay transportation agreements that fully ramped in November of 2025. Additionally, we expect 2 of the recently signed firm transportation agreements on Double E to begin service in the fourth quarter of 2026, which will provide some incremental EBITDA. I'll now turn the call over to Chris to discuss the commercial momentum we're seeing on Double E and expected growth in EBITDA associated with recently executed commercial contracts on Slide 5.

Thanks, Bill, and good morning, everyone. Over the past several months, we've made significant progress commercializing the remaining free flow capacity on the pipeline. With the recently executed transportation agreements, including the previously announced Producers Midstream contract, Double E has secured over 500 million cubic feet per day of new long-term take-or-pay commitments over the past 6 months. Upon full ramp of those agreements, Double E will have approximately 1.6 Bcf per day of firm take-or-pay contracts with a group of prominent primarily investment-grade shippers. These agreements also expand Double E's downstream connectivity with new and highly valued delivery points into the Transwestern Central Pool, The Hugh Brinson pipeline and a planned future connection with Desert Southwest Pipeline. These connections significantly increase the end market optionality available to our shippers and improves access to several important demand centers. Given the strong commercial momentum we've seen, the remaining free flow capacity on the pipeline is now effectively full, which has accelerated our efforts to pursue a mainline compression expansion. As Heath mentioned earlier, we recently launched a binding open season to solicit additional shipper commitments to support that project, which could expand Double E's capacity by approximately 50% from 1.6 Bcf per day to roughly 2.4 Bcf per day. Based on our currently contracted volumes, we expect the Permian segment adjusted EBITDA to reach approximately $60 million by 2029. Importantly, if we're successful in fully commercializing the planned expansion capacity, that EBITDA contribution could increase to approximately $90 million or more by 2030. Stepping back for a moment, we continue to see strong underlying fundamentals across the Delaware Basin. Producers are continuing to improve drilling efficiencies and extend lateral lengths, while processing capacity across West Texas and New Mexico continues to expand. As a result, demand for reliable residue gas takeaway remains strong, and we believe Double E is very well positioned as a critical transportation corridor connecting the Delaware Basin to multiple downstream markets. With that commercial update, I'll turn it back to Bill to walk through the recent Double E refinancing on Slide 6.

Thanks, Chris. Yesterday, Summit Permian Transmission entered into a new $440 million senior secured term loan facility maturing in March 2031, including $340 million funded at closing, a $50 million committed delayed draw facility to support expansion projects and a $50 million accordion feature for future growth opportunities. Proceeds from the facility were used to repay the existing Permian Transmission credit facility and the subsidiary preferred equity at Summit Permian Transmission Holdco, simplifying the capital structure and extending the maturity profile of the asset. The transaction also enabled an $85 million distribution back to Summit. And as Heath mentioned earlier, Summit intends to use those proceeds to repay approximately $45 million of accrued preferred dividends and reduce borrowings under the ABL by approximately $40 million. Beyond improving our leverage profile and strengthening the balance sheet, the new facility also provides the capital needed to fund the expected growth projects on Double E, including the recently announced plant connections and the potential mainline compression expansion project Chris mentioned. Overall, this transaction simplifies the capital structure, funds high-growth projects and positions Summit with greater financial flexibility moving forward. With the planned repayment of the Series A preferred stock accrued and unpaid dividends, Summit will have satisfied all conditions to allow it for a return of capital program to its common shareholders. And with that, I'll turn the call back to Chris to discuss our recent commercial success in the Williston Basin on Slide 7.

Thanks, Bill. In the fourth quarter, we executed a new 10-year crude oil gathering agreement with a producer in Divide County, North Dakota. The agreement includes a large area of dedication spanning more than 200,000 acres along our existing Polar and Divide systems and represents a meaningful expansion of dedicated acreage supporting our infrastructure in the region. This new customer is currently running 1 rig and executing on their development program. The first pad associated with this agreement, consisting of 4 3-mile laterals is expected to be turned in line in early 2026. More broadly, we continue to be encouraged by the innovation we're seeing from Williston Basin operators, particularly as they extend lateral lengths and improve drilling and completion efficiencies. These improvements are helping drive development activity in areas such as Northern Williams County and Southern Divide County, where Summit's systems are well positioned. This agreement expands both our dedicated acreage position and long-term development inventory, and we believe it positions us well to capture additional development across our footprint. Importantly, we are actively pursuing several additional commercial opportunities in the region and remain very encouraged by the level of engagement we're seeing from the operators. With that overview of the Williston activity, I'll turn the call back to Heath for some closing remarks.

Thanks, Chris. Let's turn to Page 8. So here, we've attempted on this slide to give investors a better sense of Summit's long-term growth trajectory and some key assumptions that support it. Starting with activity across our G&P segments, we are currently projecting total system well connects in 2026 to come in below the historical averages we've experienced in recent years. We believe this is primarily due to timing impacts brought on by some significant upstream consolidation that involved key customers in our Rockies segment and a recap that is underway in the Mid-Con segment. We also believe that the oil price dip below the $60 mark towards the end of last year and first part of 2026 also caused a temporary pause in second half activity, which is still reflected in our current guidance for the year. However, as we look forward with input from our customers, we expect activity levels to climb back up to at least the historical average levels we've experienced over the past 3 years, if not greater, in a low $60 oil and low to mid-$3 gas price environment. Given growing demand for natural gas and a tighter outlook on oil supply, we think this is a conservative but reasonable baseline assumption that has a lot of further upside potential, particularly in the 2028 to 2030 time frame. We should also point out that the outlook includes roughly an $18 million -- $18 million of MVC-related shortfall payments in the Piceance segment that roll off from 2025 to the second half of 2026 and conservatively also assumes no new well connects through 2030. Moving over to the top right section of the slide. As we've discussed, we expect Permian segment adjusted EBITDA to reach approximately $60 million by 2029 based on the new contracts we've already secured on Double E. If Chris and team are able to fully commercialize the capacity associated with the Double E mainline compression expansion, the Permian segment adjusted EBITDA contribution could grow up to over $90 million by 2030. Combining the Double E growth outlook, along with the Rockies and Mid-Con expected segment growth, we believe Summit's existing portfolio is very well positioned to add more than $100 million of organic EBITDA growth by 2030. Touching on the capital slide on the lower left-hand section of Page 8. We're forecasting total capital expenditures to trend above our normal $50 million to $70 million range as we execute on these high-returning capital investments in the Permian and Rockies segments in 2026 through '28. But we expect capital spending to normalize and transition back to primarily maintenance and well connect capital in the out years. Taken together, these drivers provide visibility towards very meaningful earnings growth and significant value creation for our shareholders. As I stated earlier, we're really excited about the growth outlook for the business, but I want to stress that we're also not taking our eyes off the ball by maintaining our financial discipline, continuing our focus on further strengthening the balance sheet, achieving our long-term 3.5x leverage target at SMC and enhancing shareholder returns with a return of capital program. They are all key components that we believe will maximize shareholder value as we execute the business plan. And so with that, operator, I think we're ready to open the call for questions.

[Operator Instructions]. Our first question comes from the line of Mark Reichman with NOBLE Capital Markets.

With new take-or-pay agreements announced, what level of additional commercial commitments is needed to move forward with the mainline compression expansion to 2.4 Bcf per day? And when would a final investment decision occur?

Yes. Thanks, Mark. And I'm going to let Chris Tennant, our new Chief Commercial Officer, take this one.

Mark, thank you for the question. This is a very attractive project for Double E Pipeline with an estimated sub-3x build multiple. We're very hopeful to close half this open capacity early in the open season, CapEx and rate depending. If we follow that cadence, we could see an FID decision as early as this summer.

And then would you discuss the capital needs between, say, 2026 and 2029 to achieve the $100 million of EBITDA growth by 2030?

Yes, Mark, this is Heath. So look, if you kind of set Double E aside, right, if you look at our historical capital, we kind of came out in the range between $50 million and $70 million between growth and maintenance. And we think that, that's likely to be kind of what we would spend on the G&P segment businesses throughout the 5-year forecast period. So really, the kind of the step-up is going to be oriented around Double E. And as Bill pointed out on the call earlier, that capital is largely going to be financed through the new term loan that we put in place at Double E. So think of it $50 million to $70 million for our general G&P segments per year. And for the next few years, we'll probably see a similar amount of capital for Double E, roughly in that $35 million a year, Mark, for the next 2 to 3 years.

Yes, Mark. And you can kind of read into the -- we sized the delayed draw and the accordion. There's about $100 million of incremental potential borrowings under that new term loan. So that should give you kind of a general sense if we're $30 million to $35 million a year for the next, call it, 2, 3 years, kind of utilizing that $100 million.

I see. That's very helpful. And then with respect to the 2026 guidance of 116 to 126 well connections, which basins and/or factors are most likely to drive upside or downside to that outlook? And how sensitive is it to changes in commodity prices?

Yes. No, great question, Mark. And so I'll start with a couple of stats, and then I'll give you some color on kind of upside, downside volatility. So to date, we've got 90 DUCs. So that represents a lion's share of that range of well connects already that are drilled but not completed. We also have 7 rigs running, 6 in the Rockies, 1 in the Mid-Con. So those rigs right now, think about them as basically drilling up -- starting to drill up for activity that I'd characterize more as like late second quarter, third quarter type well connects. So between the DUCs and the rigs, we've got a lot of confidence in that range. In the Mid-Con, as an example, we're only expecting 9 wells in the Arkoma as we sit here today. We only need 3 more to round out that 9. We've already had 6 that came online in the first quarter. And then in the Barnett, as an example, all 17 wells are DUCs. Those are slated to kind of come online in the June, July time frame and really just require completion crew to get out there to finish them up. So we spent a lot of time looking at that data when we established our guidance range so that we have confidence in kind of what we're putting out there. Now as it relates to kind of your upside, downside to the outlook, I'd tell you that this plan is based on a $65 kind of strip WTI and about $3.40 on Henry Hub. Strip today is $85 on crude and $3.70 on Henry Hub. In markets like this, historically, we have seen that this price indicator really incentivizes our customers to either accelerate development or try to bring on new well connects. So from an activity perspective, I kind of view we're in a period where more upside than downside from a commodity price perspective. And then lastly, as it relates to commodity price, as you know, in the DJ, we've got percentage of proceeds contracts. If you just run through current strip, so that [ $85 and $3.70 ], that's, call it, another anywhere from $5 million to $10 million of increased product margin that isn't reflected in our guidance range today. Obviously, there's a lot of uncertainty around what's going on in the Middle East. We thought it was prudent just to kind of keep our conservative assumption around strip. But I think that represents some pretty material upside for us this year based on what we're seeing right now.

Yes. Mark, just to add a little bit to that, too. I think when you think of the range itself, if you kind of accept the producer-driven forecast, which we've had like in 2025, we saw some slippage to the right on that, which is why we kind of came in lower. But when you think about 2026, I think just given the commodity price signals that -- and most of the customers we talk to are trying to accelerate that activity. So more likely that they'll hit their timing. If they hit their timing, that's generally going to push us to the higher end of the range. And then the other component, it's not like you can snap your fingers overnight and get new rigs and new completion crews under contract. But we do know that several folks that were planning wells already for the 2027 time frame are looking to see if they can bring those wells into the fourth quarter. That won't have as big of an impact for the year because you'll be talking probably just a few -- 2 to 3 months maybe of contribution, but it will be a good sign as you kind of get some momentum going into 2027 at a minimum.

And then just lastly, following the Double E refinancing and preferred dividend repayment, how are you thinking about the path and time line to reach the 3.5x leverage target? When could the company realistically consider reinstating common shareholder dividends? And would asset sales or joint ventures be part of the deleveraging strategy?

Look, Mark, what I would say is, I mean, if you just look at the, for example, the high end of the range, right? If we hit the $265 mark, we think our leverage will be roughly 3.6x. So I don't think it's out of the question for us to consider a dividend policy over the next 12 months, right? It's highly going to depend on this year and kind of where we end up from an overall leverage perspective. But as you pointed out, the arrears are paid off. So I mean, there's -- that's a major step to kind of get out of the way. And I think as soon as we feel comfortable that we're getting to our target and are able to sustain that leverage target, that's when you're going to see us want to turn on a dividend. Your question around asset sales or JV part of the deleveraging strategy. I would say I don't think that those things are going to drive our deleveraging strategy. I think we're going to see that leverage kind of come down as we kind of execute our base plan. But we're very opportunistic. I mean we've -- obviously, we've done quite a bit of M&A, both on the sell side and the buy side to optimize the portfolio. So I think when we think about JVs and growth, I think that's where -- those are more likely going to be the triggers to -- on the M&A front.

Our next question comes from the line of Gregg Brody with Bank of America.

Just thinking -- congrats on the Permian contract and the opportunity is exciting there. Just thinking about longer term, I know in the past, you've talked about folding the Permian asset into the company. Obviously, this opportunity allows you to delay that. And just curious if you think about in terms of allocating capital, do you think about contributing capital into the JV to potentially reduce leverage and maybe collapse the unrestricted sub and restricted group? Or how are you thinking about that?

Yes, Gregg, great question. And look, we've talked a lot about that over the years. A couple of things. One, our high-yield bonds, they mature in '29. So I think it's reasonable to expect that sometime in '28, a year or so in advance of that maturity, we would look to refinance that bond. One thing that we were successful in getting under this new term loan is really a supportive kind of call protection structure. So it's non-call 1, then it steps down to 102 in year 2, 101 in year 3 and par thereafter. So if we're executing a refi and you get some of this EBITDA growth on these commercial contracts, we can really kind of clean up that term loan and refinance it alongside our bonds in '28 without a bunch of leakage. So that was an important deal point for us when we were negotiating this transaction. And then, Gregg, as you know, right, like when you're in a high growth, a decent amount of capital spend that really takes 12 to 24 months for that EBITDA to show up. This type of financing is actually a pretty attractive solution just to maintain a delevering profile up at Summit Corporate while we're executing on this growth.

Yes, that makes sense. Maybe just -- you touched the question on M&A. It was asked, but I just -- maybe just a little bit more color around the opportunity set today and the activity level we could see over the next year.

Yes. Yes. So Gregg, I would say this. I mean we focused on today's call about the $100 million of organic growth really to just kind of set the baseline for what's in the plan today, right, where we think this company will go with the existing portfolio, and we're not dependent on M&A to achieve that. I think -- but one of the key things that we think is important for Summit and our investors is that the business needs to continue to scale up. I think if we can scale up and kind of keep the balance sheet in good shape, we think that's going to dramatically improve the investability of the company. There will be more institutional type investors that would come into the stock and just kind of creates more room, if you will, for investors to come in and invest in Summit. So I think we do think and we are actively working on opportunities around our portfolio that we can either bolt on synergistic assets and continue to do kind of like what we've done in the past, which is look for assets that are high free cash flow generating that we can buy in at a really attractive valuation and fold it into the portfolio.

Yes. And Gregg, I'd tell you that, as you know, we spent a lot of time getting this balance sheet to where it is today. As we evaluate M&A, we've been very disciplined, looking for things that are at a minimum, leverage neutral and value accretive and also have focused on high free cash flowing businesses, as Heath mentioned, I don't think you're going to see us really veer off that kind of methodology as we evaluate potential acquisitions.

That concludes the question-and-answer session. Thank you all for your participation on today's call. This does conclude the conference. You may now disconnect.