DENVER, Aug. 2, 2017 /PRNewswire/ -- Antero Midstream
Partners LP (NYSE: AM) ("Antero Midstream" or the
"Partnership") and Antero Midstream GP LP (NYSE: AMGP)
("AMGP") today released their second quarter 2017 financial and
operational results. The relevant condensed consolidated
financial statements are included in Antero Midstream's and AMGP's
Quarterly Reports on Form 10-Q for the quarter ended
June 30, 2017, which have been filed
with the Securities and Exchange Commission.
Highlights Include:
- Net income increased by 75% to $87
million, or $0.39 per limited
partner unit compared to the prior year quarter
- Adjusted EBITDA increased by 59% to $139 million compared to the prior year
quarter
- Distribution per unit increased by 28% to $0.32 compared to the prior year quarter,
representing the 10th consecutive quarterly distribution
increase since the IPO in 2014
- Distributable cash flow increased by 41% to $110 million compared to prior year quarter,
resulting in DCF coverage of 1.5x
- Low pressure and high pressure gathering volumes increased
by 24% and 38%, respectively, compared to the prior year
quarter
- Compression volumes increased by 81% compared to the prior
year quarter
- First Joint Venture processing plant filled to capacity at
an average throughput of 216 MMcf/d for the second quarter
- Fresh water delivery volumes increased by 64% compared to
the prior year quarter
- Debt to trailing twelve months EBITDA was 1.9x with over
$1.2 billion of liquidity
- AMGP declared a $0.027 per
unit cash distribution, reflecting a pro-rated distribution for the
second quarter following the closing of the AMGP initial public
offering on May 9th,
2017
Recent Developments
Antero Midstream Distribution for the Second Quarter of
2017
The Board of Directors of Antero Midstream Partners GP LLC, the
general partner of Antero Midstream, declared a cash distribution
of $0.32 per unit for the second
quarter of 2017. The distribution represents a 28% increase
compared to the prior year quarter and a 7% increase
sequentially. The distribution is Antero Midstream's tenth
consecutive quarterly distribution increase since its initial
public offering in November 2014 and
will be payable on August 16, 2017 to
unitholders of record as of August 3,
2017.
Completion of AMGP Initial Public Offering
On May 9, 2017, AMGP announced the
closing of its initial public offering of 37,250,000 common shares
representing limited partner interests in AMGP previously held by
Antero Resources Investment LLC ("ARI"). Total gross proceeds
to ARI, before underwriters' fees and estimated expenses, were
approximately $875 million. No
proceeds were retained by AMGP.
AMGP 2017 Distribution Guidance and Long-term
Outlook
The Board of Directors of AMGP GP LLC, the general partner of
AMGP, declared a cash distribution of $0.027 per share for the second quarter of
2017. The distribution reflects a pro-rated distribution from
the closing of the AMGP initial public offering on May 9, 2017 through June
30, 2017. The distribution will be payable on August 23, 2017 to shareholders of record as of
August 3, 2017.
On June 15, 2017, AMGP announced
distribution guidance of $0.15 to
$0.17 for the year ended December 31,
2017, which includes the previously announced pro-rated
distribution of $0.027 for the second
quarter of 2017. AMGP is targeting distributions per share of
$0.43 to $0.46 for 2018, $0.70 to $0.76 for 2019, and $1.06 to $1.16 for 2020, driven by Antero
Midstream's compound annual distribution growth target per unit of
28% to 30% through 2020. AMGP's guidance and long-term
targets assume 1.0x DCF coverage and exclude the impact of any
future debt or equity offerings, acquisitions, or divestitures at
either Antero Midstream or AMGP.
Antero Midstream Second Quarter 2017 Financial
Results
Low pressure gathering volumes for the second quarter of 2017
averaged 1,683 MMcf/d, a 24% increase from the second quarter of
2016 and a 1% increase sequentially. Compression volumes for
the second quarter of 2017 averaged 1,192 MMcf/d, an 81% increase
from the second quarter of 2016 and a 16% increase
sequentially. High pressure gathering volumes for the second
quarter of 2017 averaged 1,734 MMcf/d, a 38% increase from the
second quarter of 2016 and a 10% increase sequentially. The
increase in gathering and compression volumes was driven by
production growth from Antero Resources in Antero Midstream's area
of dedication. In the second quarter of 2017, which was the
first full quarter of operations for the Antero Midstream / MPLX
joint venture (the "Joint Venture"), processing volumes averaged
216 MMcf/d and fractionation volumes averaged 4,039 Bbl/d.
Fresh water delivery volumes averaged 173 MBbl/d during the
quarter, a 64% increase compared to the prior year quarter and a
17% increase sequentially.
|
|
Three Months
Ended
June
30,
|
|
|
|
Average Daily
Volumes:
|
|
2016
|
|
2017
|
|
%
Change
|
|
Low Pressure Gathering
(MMcf/d)
|
|
1,353
|
|
1,683
|
|
24%
|
|
Compression
(MMcf/d)
|
|
658
|
|
1,192
|
|
81%
|
|
High Pressure
Gathering (MMcf/d)
|
|
1,253
|
|
1,734
|
|
38%
|
|
Joint Venture
Processing (MMcf/d)
|
|
—
|
|
216
|
|
*
|
|
Joint Venture
Fractionation (Bbl/d)
|
|
—
|
|
4,039
|
|
*
|
|
Fresh Water Delivery
(MBbl/d)
|
|
105
|
|
173
|
|
64%
|
|
For the three months ended June 30,
2017, the Partnership reported revenues of $194 million, comprised of $99 million from the Gathering and Processing
segment and $95 million from the
Water Handling and Treatment segment. Revenues increased 42%
compared to the prior year quarter, driven by growth in throughput
volumes and fresh water delivery volumes. Water Handling and
Treatment segment revenues include $36
million from wastewater handling and high rate water
transfer services provided to Antero Resources, which is billed at
cost plus 3%.
Direct operating expenses for the Gathering and Processing and
Water Handling and Treatment segments were $10 million and $42
million, respectively, for a total of $52 million compared to $43 million in direct operating expenses in the
prior year quarter. Water Handling and Treatment direct operating
expenses include $35 million from
produced water handling and high rate water transfer services.
General and administrative expenses including equity-based
compensation were $15 million, a
$2 million increase compared to the
second quarter of 2016. General and administrative expenses
excluding equity-based compensation were $8
million during the second quarter of 2017, a $1 million increase compared to the second
quarter of 2016. Total operating expenses were $101 million, including $30 million of depreciation and $4 million of accretion of contingent acquisition
consideration.
Net income for the second quarter of 2017 was $87 million, a 75% increase compared to the prior
year quarter. Net income per limited partner unit was $0.39 per unit, a 44% increase compared to the
prior year quarter. Adjusted EBITDA was $139
million, a 59% increase compared to the prior year quarter.
The increase in net income and Adjusted EBITDA is primarily driven
by increased throughput volumes and fresh water delivery volumes.
Adjusted EBITDA for the quarter included $6
million in distributions from Stonewall Gathering LLC
("Stonewall") and did not include distributions from the processing
and fractionation joint venture. Antero Midstream expects
distributions from Stonewall to be approximately $10 to $15 million and distributions from the
processing and fractionation joint venture to be approximately
$10 million in 2017, both in line
with previously provided guidance. Cash interest paid was
$2 million. Cash reserved for bond
interest during the quarter was $9
million and cash reserved for payment of income tax
withholding upon vesting of Antero Midstream equity-based
compensation awards was $2 million.
Maintenance capital expenditures during the quarter totaled
$16 million and distributable cash
flow was $110 million, resulting in a
DCF coverage ratio of 1.5x.
Commenting on the outlook for Antero Midstream, Paul Rady, Chairman and CEO said, "The second
quarter highlights the benefits of Antero Midstream's integrated
full value chain strategy, as Antero's advanced completions drove
record gathering, compression and fresh water delivery volumes for
Antero Midstream. Additionally, Antero Midstream's processing and
fractionation investment is beginning to build significant
momentum, as the Joint Venture's first processing plant, Sherwood
7, was fully utilized during the second quarter and we recently
placed on line the Joint Venture's second processing plant,
Sherwood 8, which is already fully utilized. The Joint
Venture's next plant, Sherwood 9 (200 MMcf/d), is expected to be in
service in January of 2018."
The following table reconciles net income to adjusted EBITDA and
distributable cash flow as used in this release (in thousands):
|
Three months
ended
|
June
30,
|
2016
|
|
2017
|
Net
income
|
$
|
49,912
|
|
$
|
87,175
|
Interest
expense
|
|
3,879
|
|
|
9,015
|
Depreciation
expense
|
|
24,140
|
|
|
30,512
|
Accretion of contingent
acquisition consideration
|
|
3,461
|
|
|
3,590
|
Equity-based
compensation
|
|
6,793
|
|
|
6,951
|
Equity in earnings of
unconsolidated affiliates
|
|
(484)
|
|
|
(3,623)
|
Distributions from
unconsolidated affiliates
|
|
—
|
|
|
5,820
|
Adjusted
EBITDA
|
$
|
87,701
|
|
$
|
139,440
|
Interest
paid
|
|
(4,264)
|
|
|
(2,308)
|
Cash reserved/paid for
bond interest (1)
|
|
—
|
|
|
(8,734)
|
Cash reserved for
payment of income tax withholding upon vesting of Antero Midstream
Partners LP equity-based compensation
awards(2)
|
|
(1,000)
|
|
|
(2,431)
|
Cash distribution to be
received from unconsolidated affiliate
|
|
778
|
|
|
—
|
Maintenance capital
expenditures(3)
|
|
(5,710)
|
|
|
(16,422)
|
Distributable cash
flow
|
$
|
77,505
|
|
$
|
109,545
|
|
|
|
|
|
|
Distributions
Declared to Antero Midstream Holders
|
|
|
|
|
|
Limited
Partners
|
$
|
44,044
|
|
$
|
59,695
|
Incentive distribution
rights
|
|
2,731
|
|
|
15,328
|
Total Aggregate
Distributions
|
$
|
46,775
|
|
$
|
75,023
|
|
|
|
|
|
|
DCF coverage
ratio
|
|
1.7x
|
|
|
1.5x
|
|
1) Cash reserved for
bond interest expense on Antero Midstream's 5.375% senior notes
outstanding during the period that is paid on a semi-annual basis
on March 15th and September 15th of each
year.
|
2) Estimate of
current period portion of expected cash payment for income tax
withholding attributable to vesting of Midstream LTIP equity-based
compensation awards to be paid in the fourth quarter.
|
3) Maintenance
capital expenditures represent the portion of our estimated capital
expenditures associated with (i) the connection of new wells to our
gathering and processing systems that we believe will be necessary
to offset the natural production declines Antero Resources will
experience on all of its wells over time, and (ii) water delivery
to new wells necessary to maintain the average throughput volume on
our systems.
|
Commenting on Antero Midstream's quarterly results, Michael Kennedy, CFO of Antero Midstream said,
"Antero Midstream reported another strong quarter with operating
revenues and adjusted EBITDA increasing by 42% and 59% over the
prior year quarter, respectively. Importantly, the strong second
quarter results and peer leading distribution growth and DCF
coverage keep us on track to achieve our 2017 guidance. Antero
Midstream remains well capitalized, with debt to trailing twelve
months adjusted EBITDA of 1.9x and over $1.2 billion of liquidity."
Gathering and Processing — Current
compression capacity is approximately 1.4 Bcf/d in the Marcellus
and Utica combined and was over 83% utilized on average in the
second quarter. Additionally, Antero Midstream connected 28 wells
to its gathering system during the quarter. Antero Resources
is currently operating six drilling rigs on Antero Midstream
dedicated acreage.
Water Handling and Treatment — Antero
Midstream's Marcellus and Utica fresh water delivery systems
serviced 44 well completions during the second quarter of 2017, a
42% increase from the prior year quarter and 29% increase
sequentially. Antero Resources is currently operating five
completion crews on Antero Midstream dedicated acreage. During the
quarter, Antero Midstream continued construction on the Antero
Clearwater Facility, which is expected to be placed into service in
the fourth quarter of 2017 and have up to 60,000 Bbl/d of treating
capacity.
Balance Sheet and Liquidity
As of June 30, 2017, Antero
Midstream had $18 million in cash and
$305 million drawn on its
$1.5 billion bank credit facility,
resulting in approximately $1.2
billion of liquidity. Antero Midstream's net debt to
trailing twelve months adjusted EBITDA was 1.9x as of June 30, 2017. For a reconciliation of
consolidated net debt to consolidated total debt, the most
comparable GAAP measure, please read "Non-GAAP Financial
Measures."
Capital Investments
Capital expenditures, excluding investments in the processing
and fractionation joint venture, were $146
million in the second quarter of 2017 as compared to
$90 million in the second quarter of
2016. Capital invested in gathering systems and facilities
was $88 million and capital invested
in water handling and treatment assets was $58 million, including $46
million invested in the Antero Clearwater Facility.
Investments in unconsolidated affiliates for the processing and
fractionation joint venture were $31
million during the quarter.
AMGP Second Quarter 2017 Financial Results
AMGP's equity in earnings from Antero Midstream Partners, which
reflects the cash distributions from Antero Midstream, was
$15.3 million. Net loss for the
second quarter of 2017 was $3.3
million as compared to net income of $1.6 million for the prior year quarter.
AMGP's net loss and cash available for distribution for the three
months ending June 30, 2017 included
non-recurring and non-tax deductible general and administrative
expenses related to the AMGP initial public offering. These general
and administrative expenses are not included in the post-IPO
period, as presented below.
AMGP's cash distributions from Antero Midstream were
$8.5 million for the period following
the closing of the AMGP initial public offering on May 9, 2017 through June
30, 2017, net of $0.3 million
of cash distributions on Series B units. General and administrative
expenses and income taxes were $0.3
million and $3.2 million,
respectively, resulting in cash available for distribution of
$5.0 million.
The following table reconciles cash distributions from Antero
Midstream and AMGP cash distribution per common share as presented
in this release (in thousands):
|
|
Three months
ended
June 30, 2017
|
|
Post-IPO
Period
|
Cash distributions
from Antero Midstream Partners LP
|
$
|
15,328
|
|
$
|
8,784
|
Cash distributions to
AMGP
|
|
14,861
|
|
|
8,517
|
Cash distributions on
Series B units of IDR LLC
|
|
467
|
|
|
267
|
|
|
|
|
|
|
AMGP
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions to
AMGP
|
$
|
14,861
|
|
$
|
8,517
|
General and
administrative expenses
|
|
(3,203)
|
|
|
(300)
|
Provision for income
taxes
|
|
(5,755)
|
|
|
(3,248)
|
Cash available for
distribution
|
$
|
5,903
|
|
$
|
4,969
|
|
|
|
|
|
|
DCF Coverage
Ratio
|
|
—
|
|
|
1.0x
|
|
|
|
|
|
|
Common shares
outstanding
|
|
—
|
|
|
186,170
|
Cash distribution
per common share
|
$
|
—
|
|
$
|
0.027
|
Conference Call
A joint conference call for Antero Midstream and AMGP is
scheduled on Thursday, August 3, 2017
at 10:00 am MT to discuss the
quarterly results. A brief Q&A session for security
analysts will immediately follow the discussion of the results for
the quarter. To participate in the call, dial in at
1-888-347-8204 (U.S.), 1-855-669-9657 (Canada), or 1-412-902-4229 (International) and
reference "Antero Midstream". A telephone replay of the call
will be available until Friday, August 11,
2017 at 10:00 am MT at
1-844-512-2921 (U.S.) or 1-412-317-6671 (International) using the
passcode 10108843.
Presentation
To access the live webcast and view the related earnings
conference call presentation, visit Antero Midstream's website at
www.anteromidstream.com or AMGP's website at
www.anteromidstreamgp.com. The webcast will be archived for
replay on Antero Midstream's website and AMGP's website until
Friday, August 11, 2017 at
10:00 am MT. Information on
Antero Midstream's website and AMGP's website does not constitute a
portion of this press release.
Non-GAAP Financial Measures
Antero Midstream views Adjusted EBITDA as an important indicator
of the Partnership's performance. Antero Midstream defines
Adjusted EBITDA as Net Income before interest expense, depreciation
expense, accretion of contingent acquisition consideration,
equity-based compensation expense, excluding equity in earnings of
unconsolidated affiliates, and including cash distributions from
unconsolidated affiliates.
Antero Midstream uses Adjusted EBITDA to assess:
- the financial performance of the Partnership's assets, without
regard to financing methods in the case of Adjusted EBITDA, capital
structure or historical cost basis;
- its operating performance and return on capital as compared to
other publicly traded partnerships in the midstream energy sector,
without regard to financing or capital structure; and
- the viability of acquisitions and other capital expenditure
projects.
The Partnership defines Distributable Cash Flow as Adjusted
EBITDA less interest paid, income tax withholding payments and cash
reserved for payments of income tax withholding upon vesting of
equity-based compensation awards, cash reserved for bond interest
and ongoing maintenance capital expenditures paid. Antero
Midstream uses Distributable Cash Flow as a performance metric to
compare the cash generating performance of the Partnership from
period to period and to compare the cash generating performance for
specific periods to the cash distributions (if any) that are
expected to be paid to unitholders. Distributable Cash Flow
does not reflect changes in working capital balances.
Adjusted EBITDA and Distributable Cash Flow are non-GAAP
financial measures. The GAAP measure most directly comparable
to Adjusted EBITDA and Distributable Cash Flow is Net Income.
The non-GAAP financial measures of Adjusted EBITDA and
Distributable Cash Flow should not be considered as alternatives to
the GAAP measure of Net Income. Adjusted EBITDA and
Distributable Cash Flow are not presentations made in accordance
with GAAP and have important limitations as an analytical tool
because they include some, but not all, items that affect Net
Income and Adjusted EBITDA. You should not consider Adjusted
EBITDA and Distributable Cash Flow in isolation or as a substitute
for analyses of results as reported under GAAP. Antero
Midstream's definition of Adjusted EBITDA and Distributable Cash
Flow may not be comparable to similarly titled measures of other
partnerships.
The following table reconciles consolidated total debt to
consolidated net debt as used in this release (in thousands):
|
|
June
30,
|
|
|
2017
|
|
|
|
|
Bank credit
facility
|
|
$
|
305,000
|
5.375% AM senior
notes due 2024
|
|
|
650,000
|
Net unamortized debt
issuance costs
|
|
|
(9,551)
|
Consolidated total
debt
|
|
$
|
945,449
|
Cash and cash
equivalents
|
|
|
(17,533)
|
Consolidated net
debt
|
|
$
|
927,916
|
The following table reconciles net income to adjusted EBITDA for
the twelve months ended June 30, 2017
as used in this release (in thousands):
|
|
Twelve Months
Ended
June
30,
|
|
|
2017
|
|
|
|
Net income
|
$
|
306,141
|
Interest expense
|
|
32,162
|
Depreciation expense
|
|
109,946
|
Accretion of
contingent acquisition consideration
|
|
16,748
|
Equity-based compensation
|
|
26,520
|
Equity in earnings of unconsolidated affiliate
|
|
(5,855)
|
Distributions from
unconsolidated affiliates
|
|
13,522
|
Gain on asset
sale
|
|
(3,859)
|
Adjusted
EBITDA
|
$
|
495,325
|
Antero Midstream is a limited partnership that owns, operates
and develops midstream gathering, compression, processing and
fractionation assets as well as integrated water assets that
primarily service Antero Resources Corporation's properties located
in West Virginia and Ohio. Holders of Antero Midstream common units
will receive a Schedule K-1 with respect to distributions received
on the common units.
AMGP is a Delaware limited
partnership that has elected to be classified as an entity taxable
as a corporation for U.S. federal income tax purposes.
Holders of AMGP common shares will receive a Form 1099 with respect
to distributions received on the common shares. AMGP owns the
general partner of Antero Midstream and indirectly owns the
incentive distribution rights in Antero Midstream.
This release includes "forward-looking statements" within the
meaning of federal securities laws. Such forward-looking
statements are subject to a number of risks and uncertainties, many
of which are beyond the Partnership's and AMGP's
control. All statements, other than historical facts included
in this release, are forward-looking statements. All
forward-looking statements speak only as of the date of this
release and are based upon a number of assumptions. Although
the Partnership and AMGP each believe that the plans, intentions
and expectations reflected in or suggested by the forward-looking
statements are reasonable, there is no assurance that the
assumptions underlying these forward-looking statements will be
accurate or the plans, intentions or expectations expressed herein
will be achieved. For example, future acquisitions,
dispositions or other strategic transactions may materially impact
the forecasted or targeted results described in this release.
Therefore, actual outcomes and results could materially differ from
what is expressed, implied or forecast in such statements.
Nothing in this release is intended to constitute guidance with
respect to Antero Resources.
Antero Midstream and AMGP caution you that these
forward-looking statements are subject to all of the risks and
uncertainties, most of which are difficult to predict and many of
which are beyond the Partnership's and AMGP's control, incident to
the gathering and processing and fresh water and waste water
treatment businesses. These risks include, but are not
limited to, Antero Resources' expected future growth, Antero
Resources' ability to meet its drilling and development plan,
commodity price volatility, ability to execute the Partnership's
business strategy, competition and government regulations, actions
taken by third-party producers, operators, processors and
transporters, inflation, environmental risks, drilling and
completion and other operating risks, regulatory changes, the
uncertainty inherent in projecting future rates of production, cash
flow and access to capital, the timing of development expenditures,
and the other risks described under "Risk Factors" in Antero
Midstream's Annual Report on Form 10-K for the year ended
December 31, 2016.
For more information, contact Michael
Kennedy – CFO of Antero Midstream and AMGP at (303) 357-6782
or mkennedy@anteroresources.com.
ANTERO MIDSTREAM
PARTNERS LP
|
|
Condensed
Consolidated Balance Sheets
|
December 31, 2016 and June 30,
2017
|
(Unaudited)
|
(In thousands)
|
|
|
|
|
|
|
|
December 31,
2016
|
|
June 30,
2017
|
Assets
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
14,042
|
|
|
17,533
|
Accounts
receivable–Antero Resources
|
|
|
64,139
|
|
|
79,062
|
Accounts
receivable–third party
|
|
|
1,240
|
|
|
1,237
|
Prepaid
expenses
|
|
|
529
|
|
|
294
|
Total current
assets
|
|
|
79,950
|
|
|
98,126
|
Property and
equipment, net
|
|
|
2,195,879
|
|
|
2,394,276
|
Investment in
unconsolidated affiliates
|
|
|
68,299
|
|
|
259,697
|
Other assets,
net
|
|
|
5,767
|
|
|
9,838
|
Total
assets
|
|
$
|
2,349,895
|
|
|
2,761,937
|
Liabilities and
Partners' Capital
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
16,979
|
|
|
15,077
|
Accounts payable–Antero
Resources
|
|
|
3,193
|
|
|
2,989
|
Accrued
liabilities
|
|
|
61,641
|
|
|
77,096
|
Other current
liabilities
|
|
|
200
|
|
|
204
|
Total current
liabilities
|
|
|
82,013
|
|
|
95,366
|
Long-term
liabilities:
|
|
|
|
|
|
|
Long-term
debt
|
|
|
849,914
|
|
|
945,449
|
Contingent acquisition
consideration
|
|
|
194,538
|
|
|
201,654
|
Other
|
|
|
620
|
|
|
515
|
Total
liabilities
|
|
|
1,127,085
|
|
|
1,242,984
|
|
|
|
|
|
|
|
Partners'
capital:
|
|
|
|
|
|
|
Common unitholders -
public (70,020 units and 77,672 units issued and outstanding at
December 31, 2016 and June 30, 2017, respectively)
|
|
|
1,458,410
|
|
|
1,722,808
|
Common unitholder -
Antero Resources (32,929 units and 108,870 units issued and
outstanding at December 31, 2016 and June 30, 2017,
respectively)
|
|
|
26,820
|
|
|
(219,183)
|
Subordinated unitholder
- Antero Resources (75,941 issued and outstanding at December 31,
2016)
|
|
|
(269,963)
|
|
|
—
|
General
partner
|
|
|
7,543
|
|
|
15,328
|
Total partners'
capital
|
|
|
1,222,810
|
|
|
1,518,953
|
Total
liabilities and partners' capital
|
|
$
|
2,349,895
|
|
|
2,761,937
|
ANTERO MIDSTREAM
PARTNERS LP
|
Condensed
Consolidated Statements of Operations and Comprehensive
Income
|
Three Months Ended
June 30, 2016, and 2017
|
(Unaudited)
|
(In thousands, except
per unit amounts)
|
|
|
|
Three Months Ended
June 30,
|
|
|
2016
|
|
2017
|
|
|
|
Revenue:
|
|
|
|
|
|
|
Gathering and
compression–Antero Resources
|
|
$
|
71,715
|
|
|
98,633
|
Water handling and
treatment–Antero Resources
|
|
|
64,893
|
|
|
95,004
|
Gathering and
compression–third party
|
|
|
202
|
|
|
129
|
Total
revenue
|
|
|
136,810
|
|
|
193,766
|
Operating
expenses:
|
|
|
|
|
|
|
Direct
operating
|
|
|
42,597
|
|
|
52,308
|
General and
administrative (including $6,793 and $6,951 of
equity-based
compensation
in 2016 and 2017, respectively)
|
|
|
13,305
|
|
|
14,789
|
Depreciation
|
|
|
24,140
|
|
|
30,512
|
Accretion of contingent
acquisition consideration
|
|
|
3,461
|
|
|
3,590
|
Total operating
expenses
|
|
|
83,503
|
|
|
101,199
|
Operating
income
|
|
|
53,307
|
|
|
92,567
|
Interest expense,
net
|
|
|
(3,879)
|
|
|
(9,015)
|
Equity in earnings of
unconsolidated affiliates
|
|
|
484
|
|
|
3,623
|
Net income and
comprehensive income
|
|
|
49,912
|
|
|
87,175
|
Net income attributable
to incentive distribution rights
|
|
|
(2,731)
|
|
|
(15,328)
|
Limited
partners' interest in net income
|
|
$
|
47,181
|
|
|
71,847
|
|
|
|
|
|
|
|
Net income per
limited partner unit - basic and diluted
|
|
$
|
0.27
|
|
|
0.39
|
|
|
|
|
|
|
|
Weighted
average limited partner units outstanding - basic
|
|
|
176,172
|
|
|
186,065
|
Weighted
average limited partner units outstanding - diluted
|
|
|
176,226
|
|
|
186,533
|
ANTERO MIDSTREAM
PARTNERS LP
|
Consolidated Results
of Segment Operations
|
Three Months Ended
June 30, 2016, and 2017
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
Water
|
|
|
|
|
|
Gathering and
|
|
Handling
and
|
|
Consolidated
|
|
|
Processing
|
|
Treatment
|
|
Total
|
Three months ended
June 30, 2016
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Revenue - Antero
Resources
|
|
$
|
71,715
|
|
|
64,893
|
|
|
136,608
|
Revenue -
third-party
|
|
|
202
|
|
|
—
|
|
|
202
|
Total
revenues
|
|
|
71,917
|
|
|
64,893
|
|
|
136,810
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Direct
operating
|
|
|
7,447
|
|
|
35,150
|
|
|
42,597
|
General and
administrative (before equity-based compensation)
|
|
|
4,837
|
|
|
1,675
|
|
|
6,512
|
Equity-based
compensation
|
|
|
5,301
|
|
|
1,492
|
|
|
6,793
|
Depreciation
|
|
|
16,964
|
|
|
7,176
|
|
|
24,140
|
Accretion of
contingent acquisition consideration
|
|
|
—
|
|
|
3,461
|
|
|
3,461
|
Total
expenses
|
|
|
34,549
|
|
|
48,954
|
|
|
83,503
|
Operating
income
|
|
$
|
37,368
|
|
|
15,939
|
|
|
53,307
|
|
|
|
|
|
|
|
|
|
|
Segment and
consolidated Adjusted EBITDA
|
|
$
|
59,633
|
|
|
28,068
|
|
|
87,701
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30, 2017
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Revenue - Antero
Resources
|
|
$
|
98,633
|
|
|
95,004
|
|
|
193,637
|
Revenue -
third-party
|
|
|
129
|
|
|
—
|
|
|
129
|
Total
revenues
|
|
|
98,762
|
|
|
95,004
|
|
|
193,766
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Direct
operating
|
|
|
9,922
|
|
|
42,386
|
|
|
52,308
|
General and
administrative (before equity-based compensation)
|
|
|
5,468
|
|
|
2,370
|
|
|
7,838
|
Equity-based
compensation
|
|
|
5,237
|
|
|
1,714
|
|
|
6,951
|
Depreciation
|
|
|
22,271
|
|
|
8,241
|
|
|
30,512
|
Accretion of
contingent acquisition consideration
|
|
|
—
|
|
|
3,590
|
|
|
3,590
|
Total
expenses
|
|
|
42,898
|
|
|
58,301
|
|
|
101,199
|
Operating
income
|
|
$
|
55,864
|
|
|
36,703
|
|
|
92,567
|
|
|
|
|
|
|
|
|
|
|
Segment and
consolidated Adjusted EBITDA
|
|
$
|
89,192
|
|
|
50,248
|
|
|
139,440
|
ANTERO MIDSTREAM
PARTNERS LP
|
Selected Operating
Data
|
Three Months Ended
June 30, 2016, and 2017
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Amount
of
Increase
(Decrease)
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Percentage
|
|
|
2016
|
|
2017
|
|
|
Change
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue - Antero
Resources
|
|
$
|
136,608
|
|
|
193,637
|
|
|
57,029
|
|
42
|
%
|
Revenue -
third-party
|
|
|
202
|
|
|
129
|
|
|
(73)
|
|
(36)
|
%
|
Total
revenue
|
|
|
136,810
|
|
|
193,766
|
|
|
56,956
|
|
42
|
%
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
operating
|
|
|
42,597
|
|
|
52,308
|
|
|
9,711
|
|
23
|
%
|
General and
administrative (before equity-based compensation)
|
|
|
6,512
|
|
|
7,838
|
|
|
1,326
|
|
20
|
%
|
Equity-based
compensation
|
|
|
6,793
|
|
|
6,951
|
|
|
158
|
|
2
|
%
|
Depreciation
|
|
|
24,140
|
|
|
30,512
|
|
|
6,372
|
|
26
|
%
|
Accretion of contingent
acquisition consideration
|
|
|
3,461
|
|
|
3,590
|
|
|
129
|
|
4
|
%
|
Total operating
expenses
|
|
|
83,503
|
|
|
101,199
|
|
|
17,696
|
|
21
|
%
|
Operating
income
|
|
|
53,307
|
|
|
92,567
|
|
|
39,260
|
|
74
|
%
|
Interest
expense
|
|
|
(3,879)
|
|
|
(9,015)
|
|
|
(5,136)
|
|
132
|
%
|
Equity in earnings of
unconsolidated affiliates
|
|
|
484
|
|
|
3,623
|
|
|
3,139
|
|
649
|
%
|
Net income
|
|
$
|
49,912
|
|
|
87,175
|
|
|
37,263
|
|
75
|
%
|
Adjusted
EBITDA
|
|
$
|
87,701
|
|
|
139,440
|
|
|
51,739
|
|
59
|
%
|
Operating
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Gathering—low pressure
(MMcf)
|
|
|
123,116
|
|
|
153,180
|
|
|
30,064
|
|
24
|
%
|
Gathering—high pressure
(MMcf)
|
|
|
114,013
|
|
|
157,806
|
|
|
43,793
|
|
38
|
%
|
Compression
(MMcf)
|
|
|
59,834
|
|
|
108,451
|
|
|
48,617
|
|
81
|
%
|
Condensate gathering
(MBbl)
|
|
|
180
|
|
|
*
|
|
|
*
|
|
*
|
|
Processing - Joint
Venture (Mcf)
|
|
|
—
|
|
|
19,662
|
|
|
*
|
|
*
|
|
Fractionation - Joint
Venture (Bbl)
|
|
|
—
|
|
|
368
|
|
|
*
|
|
*
|
|
Fresh water delivery
(MBbl)
|
|
|
9,589
|
|
|
15,761
|
|
|
6,172
|
|
64
|
%
|
Wastewater handling
(MBbl)
|
|
|
2,740
|
|
|
3,400
|
|
|
660
|
|
24
|
%
|
Wells serviced by fresh
water delivery
|
|
|
31
|
|
|
44
|
|
|
13
|
|
42
|
%
|
Gathering—low pressure
(MMcf/d)
|
|
|
1,353
|
|
|
1,683
|
|
|
330
|
|
24
|
%
|
Gathering—high pressure
(MMcf/d)
|
|
|
1,253
|
|
|
1,734
|
|
|
481
|
|
38
|
%
|
Compression
(MMcf/d)
|
|
|
658
|
|
|
1,192
|
|
|
534
|
|
81
|
%
|
Condensate gathering
(MBbl/d)
|
|
|
2
|
|
|
*
|
|
|
*
|
|
*
|
|
Processing - Joint
Venture (MMcf/d)
|
|
|
—
|
|
|
216
|
|
|
*
|
|
*
|
|
Fractionation - Joint
Venture (Bbl/d)
|
|
|
—
|
|
|
4
|
|
|
*
|
|
*
|
|
Fresh water delivery
(MBbl/d)
|
|
|
105
|
|
|
173
|
|
|
68
|
|
64
|
%
|
Wastewater handling
(MBbl/d)
|
|
|
30
|
|
|
37
|
|
|
7
|
|
24
|
%
|
Average realized
fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
Average gathering—low
pressure fee ($/Mcf)
|
|
$
|
0.31
|
|
|
0.32
|
|
|
0.01
|
|
3
|
%
|
Average gathering—high
pressure fee ($/Mcf)
|
|
$
|
0.19
|
|
|
0.19
|
|
|
—
|
|
—
|
|
Average compression fee
($/Mcf)
|
|
$
|
0.19
|
|
|
0.19
|
|
|
—
|
|
—
|
|
Average
gathering—condensate fee ($/Bbl)
|
|
$
|
4.17
|
|
|
—
|
|
|
(4.17)
|
|
(100)
|
%
|
Average fresh water
delivery fee - Antero Resources($/Bbl)
|
|
$
|
3.68
|
|
|
3.72
|
|
|
0.04
|
|
1
|
%
|
|
* Not meaningful or
applicable.
|
ANTERO MIDSTREAM
PARTNERS LP
|
Consolidated
Statements of Cash Flows
|
Six Months Ended June
30, 2016, and 2017
|
(Unaudited)
|
|
|
|
|
|
|
|
Six months
ended June 30,
|
|
2016
|
|
2017
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net income
|
$
|
92,829
|
|
|
162,267
|
Adjustment to reconcile
net income to net cash provided by operating activities:
|
|
|
|
|
|
Depreciation
|
|
47,963
|
|
|
58,048
|
Accretion of
contingent acquisition consideration
|
|
6,857
|
|
|
7,116
|
Equity-based
compensation
|
|
12,766
|
|
|
13,237
|
Equity in
earnings of unconsolidated affiliates
|
|
(484)
|
|
|
(5,854)
|
Distributions
from unconsolidated affiliates
|
|
—
|
|
|
5,820
|
Amortization of
deferred financing costs
|
|
726
|
|
|
1,267
|
Changes in
assets and liabilities:
|
|
|
|
|
|
Accounts
receivable–Antero Resources
|
|
10,918
|
|
|
(14,923)
|
Accounts
receivable–third party
|
|
1,448
|
|
|
3
|
Prepaid
expenses
|
|
(106)
|
|
|
235
|
Accounts
payable
|
|
4,515
|
|
|
(523)
|
Accounts
payable–Antero Resources
|
|
4
|
|
|
(204)
|
Accrued
liabilities
|
|
(8,837)
|
|
|
8,449
|
Net cash
provided by operating activities
|
|
168,599
|
|
|
234,938
|
Cash flows used in
investing activities:
|
|
|
|
|
|
Additions to gathering
systems and facilities
|
|
(96,969)
|
|
|
(155,365)
|
Additions to water
handling and treatment systems
|
|
(78,625)
|
|
|
(95,451)
|
Investment in
unconsolidated affiliates
|
|
(45,044)
|
|
|
(191,364)
|
Change in other
assets
|
|
(3,090)
|
|
|
(4,804)
|
Net cash used in
investing activities
|
|
(223,728)
|
|
|
(446,984)
|
Cash flows provided
by financing activities:
|
|
|
|
|
|
Distributions to
unitholders
|
|
(82,977)
|
|
|
(125,014)
|
Borrowings on bank
credit facilities, net
|
|
140,000
|
|
|
95,000
|
Issuance of common
units, net of offering costs
|
|
—
|
|
|
246,585
|
Employee tax
withholding for settlement of equity compensation awards
|
|
—
|
|
|
(932)
|
Other
|
|
(93)
|
|
|
(102)
|
Net cash provided by
financing activities
|
|
56,930
|
|
|
215,537
|
Net increase in cash
and cash equivalents
|
|
1,801
|
|
|
3,491
|
Cash and cash
equivalents, beginning of period
|
|
6,883
|
|
|
14,042
|
Cash and cash
equivalents, end of period
|
$
|
8,684
|
|
|
17,533
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
|
Cash paid during the
period for interest
|
$
|
7,708
|
|
|
21,976
|
Supplemental
disclosure of noncash investing activities:
|
|
|
|
|
|
Increase in accrued
capital expenditures and accounts payable for property and
equipment
|
$
|
7,770
|
|
|
5,627
|
Antero Midstream
GP LP
|
Condensed
Consolidated Balance Sheets
|
December 31, 2016 and June 30,
2017
|
(Unaudited)
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
December 31,
2016
|
|
June 30,
2017
|
Assets
|
Current
assets:
|
|
|
|
|
|
|
Cash
|
|
$
|
9,609
|
|
|
11,391
|
Accounts receivable -
related party
|
|
|
217
|
|
|
358
|
Total current
assets
|
|
|
9,826
|
|
|
11,749
|
Investment in Antero
Midstream Partners LP
|
|
|
7,543
|
|
|
15,328
|
Total
assets
|
|
$
|
17,369
|
|
|
27,077
|
|
|
|
|
|
|
|
Liabilities and
Partners' Capital
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
—
|
|
|
347
|
Accrued
liabilities
|
|
|
426
|
|
|
1,483
|
Income taxes
payable
|
|
|
6,674
|
|
|
3,584
|
Total current
liabilities
|
|
|
7,100
|
|
|
5,414
|
Liability for
equity-based compensation
|
|
|
—
|
|
|
2,723
|
Total
liabilities
|
|
|
7,100
|
|
|
8,137
|
Partners'
capital
|
|
|
10,269
|
|
|
18,940
|
Total liabilities and
partners' capital
|
|
$
|
17,369
|
|
|
27,077
|
Antero Midstream
GP LP
|
Condensed
Consolidated Statements of Operations and Comprehensive Income
(Loss)
|
Three Months
Ended June 30, 2016 and 2017
|
(Unaudited)
|
(In thousands, except
per share amounts)
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
2016
|
|
2017
|
Equity in earnings of
Antero Midstream Partners LP
|
$
|
2,731
|
|
|
15,328
|
Total income
|
|
2,731
|
|
|
15,328
|
General and
administrative expense
|
|
145
|
|
|
3,203
|
Equity-based
compensation
|
|
—
|
|
|
9,631
|
Total
expenses
|
|
145
|
|
|
12,834
|
Income before
income taxes
|
|
2,586
|
|
|
2,494
|
Provision for income
taxes
|
|
(1,036)
|
|
|
(5,755)
|
Net income (loss) and
comprehensive income (loss)
|
$
|
1,550
|
|
|
(3,261)
|
|
|
|
|
|
|
Net loss attributable
to Antero Midstream GP LP subsequent to IPO
|
|
|
|
$
|
(1,621)
|
|
|
|
|
|
|
Net loss per common
share
|
|
|
|
$
|
(0.01)
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding (basic and diluted):
|
|
|
|
|
186,170
|
Antero Midstream
GP LP
|
Condensed
Consolidated Statements of Cash Flows
|
Six Months Ended
June 30, 2016 and 2017
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
2016
|
|
2017
|
Cash flows provided
by operating activities:
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
2,658
|
|
|
(6,560)
|
Adjustment to reconcile
net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
Equity in
earnings of Antero Midstream Partners LP
|
|
|
(4,581)
|
|
|
(26,881)
|
Distributions
received from Antero Midstream Partners LP
|
|
|
2,819
|
|
|
19,096
|
Equity-based
compensation
|
|
|
—
|
|
|
17,954
|
Deferred income
taxes
|
|
|
(368)
|
|
|
—
|
Changes in current
assets and liabilities:
|
|
|
|
|
|
—
|
Accounts
receivable - related party
|
|
|
(201)
|
|
|
(141)
|
Accounts
payable
|
|
|
—
|
|
|
347
|
Accrued
liabilities
|
|
|
145
|
|
|
1,057
|
Income taxes
payable
|
|
|
1,941
|
|
|
(3,090)
|
Net cash
provided by operating activities
|
|
|
2,413
|
|
|
1,782
|
Cash flows used in
investing activities
|
|
|
—
|
|
|
—
|
Cash flows used in
financing activities
|
|
|
—
|
|
|
—
|
Net increase in
cash
|
|
|
2,413
|
|
|
1,782
|
Cash, beginning of
period
|
|
|
72
|
|
|
9,609
|
Cash, end of
period
|
|
$
|
2,485
|
|
|
11,391
|
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SOURCE Antero Midstream; Antero Midstream GP LP