DENVER, May 1, 2019 /PRNewswire/ -- Antero
Midstream Corporation (NYSE: AM) ("Antero Midstream")
today released its first quarter 2019 financial and operating
results and announced a new financial policy. The relevant
condensed consolidated financial statements are included in Antero
Midstream's Quarterly Report on Form 10-Q for the quarter
ended March 31, 2019, which has been
filed with the Securities and Exchange Commission.
The previously announced simplification transaction between
Antero Midstream GP LP ("AMGP") and Antero Midstream Partners LP
("Antero Midstream Partners") closed on March 12, 2019. The GAAP financial results
discussed in this release include the results of AMGP for all
periods prior to March 12, 2019 and
the results of Antero Midstream Corporation, which consolidates the
operations of Antero Midstream Partners, beginning on March 13, 2019 through March 31, 2019. All pro forma financial results
discussed in this release reflect the applicable results as if the
simplification transaction closed on January
1, 2018 unless otherwise noted. For additional information
regarding our pro forma financial results for the quarters ended
March 31, 2019 and 2018, please see
the unaudited pro forma financial and operating data included
elsewhere in this release.
Antero Midstream Highlights Include:
- Net income was $10 million, or
$0.04 per share, which only includes
combined operations from March 13,
2019 to March 31,
2019
- Pro forma Adjusted Net Income increased by 64% to
$98 million compared to the prior
year quarter, or $0.19 per share
(non-GAAP measure)
- Pro forma Adjusted EBITDA increased by 26% to $202 million compared to the prior year quarter
(non-GAAP measure)
- Pro forma Distributable Cash Flow increased by 28% to
$166 million compared to the prior
year quarter (non-GAAP measure)
- Declared a dividend of $0.3025
per share ($1.21 per share
annualized), resulting in a year-over-year increase of 47% and 180%
for previous holders of Antero Midstream Partners and Antero
Midstream GP LP, respectively
- Net Debt to trailing twelve months pro forma Adjusted EBITDA
was 3.1x at the end of the quarter (non-GAAP measure)
- Closed simplification transaction between Antero Midstream
Partners and AMGP on March 12,
2019
- Announced financial policy targeting DCF coverage increasing
to 1.3x or higher over the long-term and high single digit growth
in return of capital to shareholders in 2020 through dividends and
potential opportunistic share repurchases
-
- Targeting long-term leverage in the low 3-times or below to
maintain balance sheet strength and flexibility
- Upsized $650 million senior
note offering and priced at 5.75% coupon with a 2027
maturity
- Elected to acquire 1/3 interest in Hopedale 4 fractionator,
increasing the 50/50 Joint Venture's fractionation capacity by 20
MBbl/d to 40 MBbl/d
Commenting on Antero Midstream, Paul
Rady, Chairman and CEO said, "The first quarter of
2019 marks an important inflection
point for Antero Midstream with the closing of the simplification
transaction. Our new corporate structure, including a board
comprised of a majority of independent directors, along with our
new financial policy detailed below, further strengthens our
position as a premier high growth Appalachian infrastructure
company. Looking ahead, we will continue to focus on delivering per
share cash flow growth through attractive mid-teens return on
invested capital, while maintaining a strong balance sheet and
appropriate return of capital to our shareholders."
Mr. Rady further added, "During the first quarter we continued
to invest in the 50/50 processing and fractionation Joint Venture
with the election to acquire 20 MBbl/d of new fractionation
capacity at the Hopedale 4 fractionation plant. The investment
doubles the Joint Venture's total fractionation capacity to 40
MBbl/d and complements the Joint Venture's 1.0 Bcf/d of processing
capacity, which was over 99% utilized in the first quarter. We
remain excited about the continued growth in the processing and
fractionation business and expect to place two additional 200
MMcf/d processing plants online in 2019 at the Sherwood processing
complex, which is already the largest processing complex in
North America. Further, the
Hopedale 5 fractionator is now under construction and will provide
the Joint Venture the opportunity to acquire an additional 27
MBbl/d of fractionation capacity."
For a discussion of the non-GAAP financial measures including
pro forma Adjusted EBITDA, pro forma Adjusted Net Income, pro forma
Distributable Cash Flow, and Net Debt please see "Non-GAAP
Financial Measures."
Antero Midstream Corporation Financial Policy
The newly formed Antero Midstream Board of Directors, comprised
of a majority of independent directors, will continue to evaluate
the most optimal way to maintain balance sheet strength and return
capital to shareholders through a combination of growing dividends
per share and potential opportunistic share repurchases in order to
maximize shareholder value. This financial policy will be
flexible and will take into account Antero Resources Corporation's
("Antero Resources") development plan including the commodity price
outlook as well as future funding needs for attractive organic and
third-party growth opportunities. This financial policy targets
Distributable Cash Flow ("DCF") coverage increasing to 1.3x or
higher over the long-term, leverage in the low 3x range or less,
and the ability to flex the balance sheet for accretive
transactions.
Antero Midstream's 2019 dividend guidance of $1.23 to $1.25 per
share and pro forma DCF coverage guidance of 1.1x to 1.2x remains
unchanged. Looking ahead to 2020, Antero Midstream is targeting DCF
coverage of approximately 1.2x and leverage in the low 3x range
with high single digit growth in return of capital to shareholders
as compared to 2019.
Based on Antero Midstream's previously disclosed 18% DCF
compound annual growth rate ("CAGR") outlook corresponding to a
$50/Bbl oil and $2.85/MMBtu gas price outlook for Antero
Resources, Antero Midstream expects to reach its leverage and DCF
coverage targets by year-end 2021. Increases in DCF growth towards
the 25% DCF CAGR scenario corresponding to a $60/Bbl oil and $3.15/MMBtu gas price outlook and any
corresponding growth increase for Antero Resources, will be
evaluated by the Board for further de-leveraging, DCF coverage
increases, and return of capital to shareholders.
2019 GAAP Net Income Guidance Update for Simplification
Closing
Antero Midstream is updating its 2019 GAAP net income guidance
to reflect the closing of the simplification transaction that
required certain GAAP purchase accounting adjustments. GAAP
purchase accounting required an increase in the book value of
Antero Midstream's assets to fair value and higher book
depreciation, in addition to other adjustments. Antero Midstream's
previously communicated GAAP net income guidance of $475 million to $525
million prior to the simplification is no longer applicable
and has been adjusted to a range of $305
million to $365 million. On a
pro forma basis, Antero Midstream's previously communicated
Adjusted EBITDA guidance of $870 to
$920 million, Distributable Cash Flow
guidance of $680 to $730 million, dividend guidance of $1.23 to $1.25 per
share and DCF coverage ratio guidance of 1.1x to 1.2x for 2019 are
unchanged. In addition, Antero Midstream expects to file a Current
Report on Form 8-K/A to update the previously filed pro forma
financials included in the Form 8-K filed on March 12, 2019.
Antero Midstream Pro Forma First Quarter Financial
Results
All non-GAAP and pro forma financial results discussed in this
section reflect the applicable results as if the simplification
transaction closed on January 1, 2018
unless otherwise noted. The pro forma information is for
illustrative purposes only. If this acquisition had occurred
in the past, operating results might have been materially different
from those presented in the pro forma financial information.
The pro forma financial information should not be relied upon as an
indication of operating results that Antero Midstream would have
achieved if this acquisition had taken place on January 1, 2018. In addition, future results may
vary significantly from the pro forma results reflected herein and
should not be relied upon as an indication of Antero Midstream's
future results. For more information, please see Antero Midstream's
Quarterly Report on Form 10-Q for the quarter ended March 31, 2019.
Low pressure gathering volumes for the first quarter of 2019
averaged 2,562 MMcf/d, a 40% increase as compared to the prior year
quarter. Compression volumes for the first quarter of 2019
averaged 2,255 MMcf/d, a 60% increase as compared to the first
quarter of 2018. High pressure gathering volumes for the
first quarter of 2019 averaged 2,498 MMcf/d, a 42% increase over
the first quarter of 2018. The year-over-year increase in
gathering and compression volumes was driven by production growth
from Antero Resources in Antero Midstream's area of
dedication. Fresh water delivery volumes averaged 153 MBbl/d
during the quarter, a 31% decrease compared to the first quarter of
2018, driven by a decrease in AR's completion activity. Antero
Midstream treated 24 MBbl/d of wastewater at the Antero Clearwater
Facility during the first quarter of 2019. The Antero
Clearwater Facility was placed into service during the second
quarter of 2018.
Gross processing volumes from the 50/50 processing and
fractionation joint venture with MarkWest (a wholly-owned
subsidiary of MPLX) (the "Joint Venture") averaged 996 MMcf/d for
the first quarter of 2019, an increase of 92% compared to the prior
year quarter. The five Sherwood Joint
Venture plants operated at over 99% utilization for the
quarter. Gross Joint Venture fractionation volumes averaged
22 MBbl/d, a 267% increase compared to the prior year quarter.
Fractionation volumes included volumes from Hopedale 4 following
the Joint Venture's election effective March
1, 2019 and the weighted average capacity was 83% utilized
during the quarter. The year-over-year increase in processing and
fractionation volumes is primarily driven by the increase in Antero
Resources' rich gas and C3+ NGL production volumes.
|
|
Three Months
Ended
March
31
|
|
|
Average Daily
Volumes:
|
|
2018
|
|
2019
|
|
%
Change
|
|
Low Pressure Gathering
(MMcf/d)
|
|
1,835
|
|
2,562
|
|
40%
|
|
Compression
(MMcf/d)
|
|
1,413
|
|
2,255
|
|
60%
|
|
High Pressure
Gathering (MMcf/d)
|
|
1,765
|
|
2,498
|
|
42%
|
|
Fresh Water Delivery
(MBbl/d)
|
|
221
|
|
153
|
|
(31)%
|
|
Clearwater Treatment
Volumes (MBbl/d)
|
|
—
|
|
24
|
|
—
|
|
Gross Joint Venture
Processing (MMcf/d)
|
|
519
|
|
996
|
|
92%
|
|
Gross Joint Venture
Fractionation (MBbl/d)
|
|
6
|
|
22
|
|
267%
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended March 31,
2019, pro forma revenues were $266
million, comprised of $158
million from the Gathering and Processing segment and
$116 million from the Water Handling
and Treatment segment, net of $8
million of amortization of customer contracts. Revenues
increased 20% compared to the prior year quarter, driven by growth
in gathering, compression, and Clearwater treatment volumes. Water
Handling and Treatment segment revenues include $10 million from wastewater treatment at the
Antero Clearwater Facility and $53
million from wastewater handling and high rate water
transfer services, which are billed at cost plus 3%.
Pro forma direct operating expenses for the Gathering and
Processing and Water Handling and Treatment segments were
$14 million and $66 million, respectively, for a total of
$80 million, compared to $67 million in total direct operating expenses in
the prior year quarter. Water Handling and Treatment direct
operating expenses include $7 million
from wastewater treatment at the Antero Clearwater Facility and
$51 million from wastewater handling
and high rate water transfer services, which are billed at cost
plus 3%. Pro forma general and administrative expenses
excluding equity-based compensation were $9
million during the first quarter of 2019. Total pro
forma operating expenses were $167
million, including $39 million
of depreciation, $7 million of
impairment and $3 million of
accretion of contingent acquisition consideration and asset
retirement obligations.
Pro forma net income was $82
million, or $0.16 per share.
Pro forma Adjusted Net Income was $98
million, or $0.19 per share,
representing a 64% increase compared to the prior year
quarter. Pro forma Adjusted EBITDA was $202 million, a 26% increase compared to the
prior year quarter. Pro forma Adjusted EBITDA for the quarter
included $17 million in combined
distributions from Stonewall Gathering LLC and the processing and
fractionation Joint Venture. Cash interest paid was
$26 million. The decrease in cash
reserved for bond interest during the quarter was $5 million. Maintenance capital expenditures
during the quarter totaled $16
million and pro forma Distributable Cash Flow was
$166 million, representing a 28%
increase over the prior year quarter. Based on the declared
dividend of $0.3025 per share, Antero
Midstream's pro forma DCF coverage ratio was 1.1x.
The following table reconciles pro forma net income to pro forma
Adjusted Net Income, pro forma Adjusted EBITDA and pro forma
Distributable Cash Flow as used in this release (in thousands):
|
|
|
|
|
|
|
|
|
Three Months
Ended March
31,
|
|
|
|
2018
|
|
|
2019
|
Pro forma net
income
|
|
$
|
50,970
|
|
|
82,123
|
Amortization of
customer relationships
|
|
|
8,440
|
|
|
8,440
|
Impairment
expense
|
|
|
—
|
|
|
6,982
|
Pro forma Adjusted
Net Income
|
|
|
59,410
|
|
|
97,545
|
Interest
expense
|
|
|
16,738
|
|
|
22,861
|
Income tax
expense
|
|
|
18,810
|
|
|
21,781
|
Depreciation
expense
|
|
|
44,357
|
|
|
38,765
|
Accretion of contingent
acquisition consideration
|
|
|
3,874
|
|
|
2,977
|
Accretion of asset
retirement obligations
|
|
|
34
|
|
|
73
|
Equity-based
compensation
|
|
|
14,846
|
|
|
13,900
|
Equity in earnings of
unconsolidated affiliates
|
|
|
(4,903)
|
|
|
(12,809)
|
Distributions from
unconsolidated affiliates
|
|
|
7,085
|
|
|
17,380
|
Pro forma Adjusted
EBITDA
|
|
|
160,251
|
|
|
202,473
|
Interest
paid
|
|
|
(22,348)
|
|
|
(26,059)
|
Decrease in cash
reserved for bond interest (1)
|
|
|
8,734
|
|
|
5,205
|
Maintenance capital
expenditures (2)
|
|
|
(16,488)
|
|
|
(15,514)
|
Pro forma
Distributable Cash Flow
|
|
$
|
130,149
|
|
|
166,105
|
|
|
|
|
|
|
|
Distributions or
Dividends Declared to Antero Midstream Holders
|
|
|
|
|
|
|
Distributions to
Limited Partners
|
|
$
|
68,231
|
|
|
—
|
Distributions to
Incentive distribution rights
|
|
|
23,772
|
|
|
—
|
Dividends
|
|
|
—
|
|
|
151,572
|
Total Aggregate
Distributions and Dividends
|
|
$
|
92,003
|
|
|
151,572
|
|
|
|
|
|
|
|
Pro forma DCF
Coverage Ratio
|
|
|
1.4x
|
|
|
1.1x
|
|
|
1)
|
Cash reserved for
bond interest expense on Antero Midstream's senior notes
outstanding during the period that is paid on a semi-annual basis
on March 15th and September 15th of each
year.
|
2)
|
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.
|
Gathering and Processing —During the first
quarter, Antero Midstream connected 23 wells to its gathering
system and added 240 MMcf/d of compression capacity in the
Marcellus Shale. Antero Midstream's compression capacity was
approximately 85% utilized throughout the quarter. Antero Resources
is currently operating 4 drilling rigs on Antero Midstream
dedicated acreage. In addition, the Joint Venture elected to
acquire 20 MBbl/d of fractionation capacity at the Hopedale 4
fractionator. The acquisition brings the Joint Venture's total
fractionation capacity to 40 MBbl/d. The Joint Venture's processing
capacity is currently 1.0 Bcf/d, which was over 99% utilized in the
first quarter of 2019. The Joint Venture expects to place online
two more 200 MMcf/d processing plants at the Sherwood complex by
year-end 2019, consistent with the previously announced capital
budget.
Water Handling and Treatment — Antero
Midstream's Marcellus and Utica fresh water delivery systems
serviced 31 well completions during the first quarter of 2019, a
33% decrease from the prior year quarter. During the quarter Antero
Midstream treated an average of 24 MBbl/d of wastewater at the
Antero Clearwater Facility including planned downtime scheduled for
January 2019, in line with previous
expectations of 25 Bbl/d for the first quarter. In March and April,
the Antero Clearwater Facility treated volumes in excess of the 25
MBbl/d average during the first quarter and operations are on track
to achieve the previously communicated treatment volumes of
approximately 40 MBbl/d for the remainder of the year.
Balance Sheet and Liquidity
As of March 31, 2019, Antero
Midstream had approximately $1.1
billion drawn on its $2.0
billion bank credit facility, resulting in approximately
$900 million of liquidity.
Antero Midstream's Net Debt to trailing twelve months pro forma
Adjusted EBITDA was 3.1x as of March 31,
2019.
Commenting on Antero Midstream's growth and balance sheet,
Michael Kennedy, CFO of Antero
Midstream said, "Antero Midstream delivered another strong quarter
generating 26% and 28% year-over-year growth in pro forma Adjusted
EBITDA and pro forma distributable cash flow, respectively.
Importantly, our organic strategy and efficient capital investment
allowed us to pay out approximately $600
million for the cash consideration in the simplification
transaction while still maintaining a strong balance sheet with
leverage of 3.1x at quarter-end."
Mr. Kennedy further added, "Our outlook for 2020 and beyond
includes DCF coverage improvement, resulting in excess retained
cash flow to maintain a strong balance sheet, and growing return of
capital to shareholders."
Capital Investments
Total pro forma capital expenditures including investments in
the Joint Venture were $184 million
during the first quarter of 2019. Gathering, compression, and water
infrastructure capital investments totaled $93 million in the first quarter of 2019 as
compared to $128 million in the first
quarter of 2018. Capital invested in gathering systems and
related facilities was $56 million
and capital invested in water handling and treatment assets was
$37 million. Investments in
unconsolidated affiliates for the Joint Venture were $91 million during the quarter, including the
election for 20 MBbl/d of fractionation capacity at the Hopedale 4
fractionation plant. Antero Midstream's 2019 capital budget
for the Joint Venture of $200 million
included the Hopedale 4 election in the first quarter of 2019 and
does not include any additional fractionation plant elections
during 2019. Antero Midstream's total capital budget of
$750 to $800
million is currently trending towards the bottom end of the
guidance range.
Conference Call
A joint conference call for Antero Midstream is scheduled on
Thursday, May 2, 2019 at 10:00 am MT to discuss the financial and
operational 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 887-407-9126
(U.S.), or 201-493-6757 (International) and reference "Antero
Midstream".
Presentation
To access the live webcast and view the related earnings
conference call presentation, visit Antero Midstream's website at
www.anteromidstream.com. The webcast will be archived
for replay on Antero Midstream's website until Thursday, May 9, 2019 at 10:00 am MT. Information on Antero
Midstream's website does not constitute a portion of this press
release.
Non-GAAP Financial Measures and Definitions
Antero Midstream uses pro forma Adjusted EBITDA as an important
indicator of Antero Midstream's performance. Antero Midstream
defines pro forma Adjusted EBITDA as net income before interest
expense, provision for income taxes, impairment expense,
amortization of customer relationships, depreciation expense,
accretion, equity-based compensation expense, excluding equity in
earnings of unconsolidated affiliates, and including cash
distributions from unconsolidated affiliates.
Antero Midstream uses pro forma Adjusted EBITDA to assess:
- the financial performance of Antero Midstream's assets, without
regard to financing methods, capital structure or historical cost
basis;
- its operating performance and return on capital as compared to
other publicly traded Antero Midstream's in the midstream
energy sector, without regard to financing or capital structure;
and
- the viability of acquisitions and other capital expenditure
projects.
Antero Midstream's defines pro forma Distributable Cash Flow as
pro forma Adjusted EBITDA less interest paid, 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 Antero
Midstream from period to period and to compare the cash generating
performance for specific periods to the cash dividends (if any)
that are expected to be paid to shareholders. Distributable
Cash Flow does not reflect changes in working capital balances.
Pro forma Adjusted EBITDA and Distributable Cash Flow are
non-GAAP financial measures. The GAAP measure most directly
comparable to pro forma Adjusted EBITDA and pro forma Distributable
Cash Flow is Net Income. The non-GAAP financial measures of
pro forma Adjusted EBITDA and pro forma Distributable Cash Flow
should not be considered as alternatives to the GAAP measure of Net
Income. Pro forma Adjusted EBITDA and pro forma 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 pro
forma Adjusted EBITDA. You should not consider pro forma
Adjusted EBITDA and pro forma Distributable Cash Flow in isolation
or as a substitute for analyses of results as reported under
GAAP. Antero Midstream's definition of pro forma Adjusted
EBITDA and pro forma Distributable Cash Flow may not be comparable
to similarly titled measures of other companies.
Antero Midstream defines consolidated net debt as consolidated
total debt less cash and cash equivalents. Antero Midstream
views consolidated net debt as an important indicator in evaluating
Antero Midstream's financial leverage.
The following table reconciles consolidated total debt to
consolidated net debt ("Net Debt") as used in this release (in
thousands):
|
|
March 31,
2019
|
|
|
|
|
Bank credit
facility
|
|
$
|
1,100,000
|
5.375% senior notes
due 2024
|
|
|
652,600
|
5.75% senior notes
due 2027
|
|
|
653,250
|
Net unamortized debt
issuance costs
|
|
|
(15,858)
|
Consolidated total
debt
|
|
$
|
2,389,992
|
Cash and cash
equivalents
|
|
|
(1,968)
|
Consolidated net
debt
|
|
$
|
2,382,024
|
Antero Midstream defines Adjusted Net Income as net income plus
amortization of customer contracts and impairment. Antero Midstream
believes Adjusted Net Income is useful to investors in evaluating
operational trends and its performance relative to other midstream
companies. Adjusted Net Income is not a measure of financial
performance under GAAP and should not be considered in isolation or
as a substitute for net income as an indicator of financial
performance.
The following table reconciles pro forma net income to pro forma
Adjusted EBITDA for the twelve months ended March 31, 2019 as used in this release (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended March 31,
2019
|
|
Pro forma net
income
|
|
$
|
359,761
|
|
Amortization of
customer relationships
|
|
|
34,227
|
|
Impairment
expense
|
|
|
12,753
|
|
Pro forma Adjusted
Net Income
|
|
|
406,741
|
|
Interest
expense
|
|
|
89,917
|
|
Income tax
expense
|
|
|
112,775
|
|
Depreciation
expense
|
|
|
172,121
|
|
Accretion of contingent
acquisition consideration
|
|
|
(93,916)
|
|
Accretion of asset
retirement obligations
|
|
|
174
|
|
Equity-based
compensation
|
|
|
55,438
|
|
Equity in earnings of
unconsolidated affiliates
|
|
|
(36,184)
|
|
Distributions from
unconsolidated affiliates
|
|
|
56,710
|
|
Pro forma Adjusted
EBITDA
|
|
$
|
763,776
|
|
|
|
|
|
|
|
|
|
Antero Midstream Corporation is a Delaware corporation that owns, operates and
develops midstream gathering, compression, processing and
fractionation assets located in West
Virginia and Ohio, as well
as integrated water assets that primarily service Antero Resources
Corporation's properties. The Company's website is located at
www.anteromidstream.com.
This release includes "forward-looking statements."
Such forward-looking statements are subject to a number of risks
and uncertainties, many of which are not under Antero Midstream's
control. All statements, except for statements of historical
fact, made in this release regarding activities, events or
developments Antero Midstream expects, believes or anticipates will
or may occur in the future, such as Antero Midstream's ability
to execute its business plan, are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. All
forward-looking statements speak only as of the date of this
release. Although Antero Midstream believes that the plans,
intentions and expectations reflected in or suggested by the
forward-looking statements are reasonable, there is no assurance
that these plans, intentions or expectations will be
achieved. Therefore, actual outcomes and results could
materially differ from what is expressed, implied or forecast in
such statements. Antero Midstream expressly disclaims any
obligation to and does not intend to publicly update or revise any
forward-looking statements.
Antero Midstream cautions you that these forward-looking
statements are subject to all of the risks and uncertainties
incident to the exploration for and development, production,
gathering and sale of natural gas, NGLs and oil, most of which are
difficult to predict and many of which are beyond Antero
Midstream's control. These risks include, but are not limited
to, commodity price volatility, inflation, lack of availability of
drilling and production equipment and services, environmental
risks, drilling and other operating risks, regulatory changes, the
uncertainty inherent in estimating natural gas and oil reserves and
in projecting future rates of production, cash flow and access to
capital, the timing of development expenditures, and the other
risks described under the heading "Item 1A. Risk Factors" in
Antero Midstream's Annual Report on Form 10-K for the year ended
December 31, 2018 and Quarterly
Report on Form 10-Q for the quarter ended March 31, 2019
For more information, contact Michael
Kennedy – CFO of Antero Midstream at (303) 357-6782 or
mkennedy@anteroresources.com.
ANTERO MIDSTREAM
CORPORATION
|
Condensed
Consolidated Balance Sheets
|
December 31, 2018 and March 31,
2019
|
(Unaudited)
|
(In thousands, except
per share amounts)
|
|
|
|
|
|
|
|
|
|
|
December 31,
2018
|
|
March 31,
2019
|
|
Assets
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
2,822
|
|
|
1,968
|
|
Accounts
receivable–Antero Resources
|
|
|
—
|
|
|
110,980
|
|
Accounts
receivable–third party
|
|
|
—
|
|
|
256
|
|
Other current
assets
|
|
|
87
|
|
|
3,515
|
|
Total current
assets
|
|
|
2,909
|
|
|
116,719
|
|
Property and
equipment, net
|
|
|
—
|
|
|
3,659,677
|
|
Investments in
unconsolidated affiliates
|
|
|
43,492
|
|
|
1,153,943
|
|
Deferred tax
asset
|
|
|
1,304
|
|
|
3,681
|
|
Customer
relationships
|
|
|
—
|
|
|
556,218
|
|
Goodwill
|
|
|
—
|
|
|
1,135,266
|
|
Other assets,
net
|
|
|
—
|
|
|
42,923
|
|
Total
assets
|
|
$
|
47,705
|
|
|
6,668,427
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable–Antero Resources
|
|
$
|
731
|
|
|
3,603
|
|
Accounts payable–third
party
|
|
|
28
|
|
|
22,871
|
|
Accrued
liabilities
|
|
|
407
|
|
|
73,448
|
|
Asset retirement
obligations
|
|
|
—
|
|
|
1,925
|
|
Taxes
payable
|
|
|
15,678
|
|
|
15,678
|
|
Other current
liabilities
|
|
|
—
|
|
|
537
|
|
Total current
liabilities
|
|
|
16,844
|
|
|
118,062
|
|
Long-term
liabilities:
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
—
|
|
|
2,389,992
|
|
Contingent acquisition
consideration
|
|
|
—
|
|
|
117,972
|
|
Asset retirement
obligations
|
|
|
—
|
|
|
4,041
|
|
Other
|
|
|
—
|
|
|
2,810
|
|
Total
liabilities
|
|
|
16,844
|
|
|
2,632,877
|
|
|
|
|
|
|
|
|
|
Partners' Capital and
Stockholders' Equity:
|
|
|
|
|
|
|
|
Common
shareholders—186,219,438 shares issued and outstanding at December
31, 2018; none issued and outstanding at March 31, 2019
|
|
|
(41,969)
|
|
|
—
|
|
IDR LLC Series B units
(65,745 units vested at December 31, 2018; none issued and
outstanding at March 31, 2019)
|
|
|
72,830
|
|
|
—
|
|
Preferred stock, $0.01
par value: none authorized or issued at December 31, 2018;
100,000,000 authorized at March 31, 2019
|
|
|
—
|
|
|
—
|
|
Series A non-voting
perpetual preferred stock; none designated, issued or outstanding
at December 31, 2018; 12,000 designated and 10,000 issued and
outstanding at March 31, 2019
|
|
|
—
|
|
|
—
|
|
Common stock, $0.01
par value; none authorized, issued or outstanding at December 31,
2018; 2,000,000,000 authorized and 506,640,947 issued and
outstanding at March 31, 2019
|
|
|
—
|
|
|
5,066
|
|
Additional paid-in
capital
|
|
|
—
|
|
|
4,007,287
|
|
Accumulated
earnings
|
|
|
—
|
|
|
23,197
|
|
Total partners'
capital and stockholders' equity
|
|
|
30,861
|
|
|
4,035,550
|
|
Total liabilities and
partners' capital and stockholders' equity
|
|
$
|
47,705
|
|
|
6,668,427
|
|
ANTERO MIDSTREAM
CORPORATION
|
Condensed
Consolidated Statements of Operations and Comprehensive
Income
|
Three Months Ended
March 31, 2018 and 2019
|
(Unaudited)
|
(In thousands, except
per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2018
|
|
2019
|
|
Revenue:
|
|
|
|
|
|
|
|
Gathering and
compression–Antero Resources
|
|
$
|
—
|
|
|
33,534
|
|
Water handling and
treatment–Antero Resources
|
|
|
—
|
|
|
22,351
|
|
Water handling and
treatment–third party
|
|
|
—
|
|
|
4
|
|
Amortization of
customer relationships
|
|
|
—
|
|
|
(1,781)
|
|
Total
revenue
|
|
|
—
|
|
|
54,108
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Direct
operating
|
|
|
—
|
|
|
14,982
|
|
General and
administrative (including $8,635 and $11,423 of equity-based
compensation in 2018 and 2019, respectively)
|
|
|
9,560
|
|
|
19,809
|
|
Depreciation
|
|
|
—
|
|
|
7,650
|
|
Accretion and change
in fair value of contingent acquisition consideration
|
|
|
—
|
|
|
1,049
|
|
Accretion of asset
retirement obligations
|
|
|
—
|
|
|
10
|
|
Total operating
expenses
|
|
|
9,560
|
|
|
43,500
|
|
Operating income
(loss)
|
|
|
(9,560)
|
|
|
10,608
|
|
Interest expense,
net
|
|
|
—
|
|
|
(6,217)
|
|
Equity in earnings of
unconsolidated affiliates
|
|
|
28,453
|
|
|
2,880
|
|
Income before
taxes
|
|
|
18,893
|
|
|
7,271
|
|
Provision for income
tax benefit (expense)
|
|
|
(6,088)
|
|
|
2,377
|
|
Net income and
comprehensive income
|
|
|
12,805
|
|
|
9,648
|
|
Net income
attributable to vested Series B Units
|
|
|
(413)
|
|
|
—
|
|
Limited partners' and
common stockholders' interest in net income
|
|
$
|
12,392
|
|
|
9,648
|
|
|
|
|
|
|
|
|
|
Net income per
share–basic and diluted
|
|
$
|
0.07
|
|
|
0.04
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
|
|
186,188
|
|
|
253,877
|
|
Diluted
|
|
|
186,188
|
|
|
254,903
|
|
ANTERO MIDSTREAM
CORPORATION
|
Condensed
Consolidated Statements of Cash Flows
|
Three Months Ended
March 31, 2018 and 2019
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2018
|
|
2019
|
|
Cash flows provided
by (used in) operating activities:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
12,805
|
|
|
9,648
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Distributions received
from Antero Midstream Partners LP
|
|
|
23,772
|
|
|
43,492
|
|
Depreciation
|
|
|
—
|
|
|
7,650
|
|
Accretion and change
in fair value of contingent acquisition consideration
|
|
|
—
|
|
|
1,049
|
|
Accretion of asset
retirement obligations
|
|
|
—
|
|
|
10
|
|
Deferred income tax
benefit
|
|
|
—
|
|
|
(2,377)
|
|
Equity-based
compensation
|
|
|
8,635
|
|
|
11,423
|
|
Equity in earnings of
unconsolidated affiliates
|
|
|
(28,453)
|
|
|
(2,880)
|
|
Distributions from
unconsolidated affiliates
|
|
|
—
|
|
|
4,775
|
|
Amortization of
customer relationships
|
|
|
—
|
|
|
1,781
|
|
Amortization of
deferred financing costs
|
|
|
—
|
|
|
251
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable–Antero Resources
|
|
|
—
|
|
|
31,331
|
|
Accounts
receivable–third party
|
|
|
—
|
|
|
(18)
|
|
Other current
assets
|
|
|
(155)
|
|
|
(2,361)
|
|
Accounts
payable–Antero Resources
|
|
|
(15)
|
|
|
(444)
|
|
Accounts payable–third
party
|
|
|
—
|
|
|
(1,454)
|
|
Accrued
liabilities
|
|
|
565
|
|
|
(32,289)
|
|
Income taxes
payable
|
|
|
6,088
|
|
|
—
|
|
Net cash provided by
operating activities
|
|
|
23,242
|
|
|
69,587
|
|
Cash flows provided
by (used in) investing activities:
|
|
|
|
|
|
|
|
Additions to gathering
systems and facilities
|
|
|
—
|
|
|
(7,677)
|
|
Additions to water
handling and treatment systems
|
|
|
—
|
|
|
(8,328)
|
|
Investments in
unconsolidated affiliates
|
|
|
—
|
|
|
(65,729)
|
|
Cash received on
acquisition of Antero Midstream Partners LP
|
|
|
—
|
|
|
619,532
|
|
Cash consideration
paid to Antero Midstream Partners LP unitholders
|
|
|
—
|
|
|
(598,709)
|
|
Change in other
assets
|
|
|
—
|
|
|
(267)
|
|
Net cash used in
investing activities
|
|
|
—
|
|
|
(61,178)
|
|
Cash flows provided
by (used in) financing activities:
|
|
|
|
|
|
|
|
Distributions to
shareholders
|
|
|
(13,964)
|
|
|
(30,543)
|
|
Distributions to
Series B unitholders
|
|
|
(783)
|
|
|
(3,720)
|
|
Borrowings on bank
credit facilities, net
|
|
|
—
|
|
|
25,000
|
|
Net cash used in
financing activities
|
|
|
(14,747)
|
|
|
(9,263)
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
|
8,495
|
|
|
(854)
|
|
Cash and cash
equivalents, beginning of period
|
|
|
5,987
|
|
|
2,822
|
|
Cash and cash
equivalents, end of period
|
|
$
|
14,482
|
|
|
1,968
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
|
|
|
Cash paid during the
period for interest
|
|
$
|
—
|
|
|
19,250
|
|
Increase in accrued
capital expenditures and accounts payable for property and
equipment
|
|
$
|
—
|
|
|
11,933
|
|
PRO
FORMA ANTERO MIDSTREAM CORPORATION
|
Unaudited Pro Forma
Condensed Consolidated Statements of Operations and Comprehensive
Income
|
Three Months Ended
March 31, 2018
|
(Unaudited)
|
(In thousands, except
per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro
Forma
|
|
|
|
Antero
|
|
Antero
|
|
|
|
|
Antero
|
|
|
|
Midstream
|
|
Midstream
|
|
Pro
Forma
|
|
Midstream
|
|
|
|
GP
LP
|
|
Partners
LP
|
|
Adjustments
|
|
Corporation
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
Antero Midstream Partners LP
|
|
$
|
28,453
|
|
|
—
|
|
|
(28,453)
|
|
|
—
|
|
Gathering and
compression–Antero Resources
|
|
|
—
|
|
|
108,177
|
|
|
—
|
|
|
108,177
|
|
Water handling and
treatment–Antero Resources
|
|
|
—
|
|
|
120,889
|
|
|
—
|
|
|
120,889
|
|
Water handling and
treatment–third party
|
|
|
—
|
|
|
525
|
|
|
—
|
|
|
525
|
|
Amortization of
customer relationships
|
|
|
—
|
|
|
—
|
|
|
(8,440)
|
|
|
(8,440)
|
|
Total
revenues
|
|
|
28,453
|
|
|
229,591
|
|
|
(36,893)
|
|
|
221,151
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
operating
|
|
|
—
|
|
|
67,256
|
|
|
—
|
|
|
67,256
|
|
General and
administrative (excluding equity-based compensation)
|
|
|
925
|
|
|
8,244
|
|
|
—
|
|
|
9,169
|
|
Equity-based
compensation
|
|
|
8,635
|
|
|
6,211
|
|
|
—
|
|
|
14,846
|
|
Depreciation
|
|
|
—
|
|
|
32,432
|
|
|
11,925
|
|
|
44,357
|
|
Accretion and change in
fair value of contingent acquisition consideration
|
|
|
—
|
|
|
3,874
|
|
|
—
|
|
|
3,874
|
|
Accretion of asset
retirement obligations
|
|
|
—
|
|
|
34
|
|
|
—
|
|
|
34
|
|
Total operating
expenses
|
|
|
9,560
|
|
|
118,051
|
|
|
11,925
|
|
|
139,536
|
|
Operating
income
|
|
|
18,893
|
|
|
111,540
|
|
|
(48,818)
|
|
|
81,615
|
|
Other income
(expenses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
—
|
|
|
(11,297)
|
|
|
(5,441)
|
|
|
(16,738)
|
|
Equity in earnings of
unconsolidated affiliates
|
|
|
—
|
|
|
7,862
|
|
|
(2,959)
|
|
|
4,903
|
|
Income before income
taxes
|
|
|
18,893
|
|
|
108,105
|
|
|
(57,218)
|
|
|
69,780
|
|
Provision for income
taxes (expense) benefit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
(6,088)
|
|
|
—
|
|
|
6,088
|
|
|
—
|
|
Deferred
|
|
|
—
|
|
|
—
|
|
|
(18,810)
|
|
|
(18,810)
|
|
Total income
taxes
|
|
|
(6,088)
|
|
|
—
|
|
|
(12,722)
|
|
|
(18,810)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to incentive distribution rights
|
|
|
—
|
|
|
(28,453)
|
|
|
28,453
|
|
|
—
|
|
Net income and
comprehensive income
|
|
|
12,805
|
|
|
79,652
|
|
|
(41,487)
|
|
|
50,970
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to vested Series B units
|
|
|
(413)
|
|
|
—
|
|
|
413
|
|
|
—
|
|
Net income
attributable to common shareholders or unitholders
|
|
$
|
12,392
|
|
|
79,652
|
|
|
(41,074)
|
|
|
50,970
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common
share or unit–basic
|
|
$
|
0.07
|
|
|
0.43
|
|
|
|
|
|
0.10
|
|
Net income per common
share or unit–diluted
|
|
$
|
0.07
|
|
|
0.43
|
|
|
|
|
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares or units outstanding–basic
|
|
|
186,188
|
|
|
186,934
|
|
|
314,655
|
|
|
500,843
|
|
Weighted average
number of common shares or units outstanding–diluted
|
|
|
186,188
|
|
|
187,173
|
|
|
321,544
|
|
|
507,732
|
|
PRO
FORMA ANTERO MIDSTREAM CORPORATION
|
Unaudited Pro Forma
Condensed Consolidated Statements of Operations and Comprehensive
Income
|
Three Months Ended
March 31, 2019
|
(Unaudited)
|
(In thousands, except
per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro
Forma
|
|
|
|
Antero
|
|
Antero
|
|
|
|
|
Antero
|
|
|
|
Midstream
|
|
Midstream
|
|
Pro
Forma
|
|
Midstream
|
|
|
|
Corporation
|
|
Partners
LP
|
|
Adjustments
|
|
Corporation
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
Antero Midstream Partners LP
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Gathering and
compression–Antero Resources
|
|
|
33,534
|
|
|
124,773
|
|
|
—
|
|
|
158,307
|
|
Water handling and
treatment–Antero Resources
|
|
|
22,351
|
|
|
93,537
|
|
|
—
|
|
|
115,888
|
|
Water handling and
treatment–third party
|
|
|
4
|
|
|
51
|
|
|
—
|
|
|
55
|
|
Amortization of
customer relationships
|
|
|
(1,781)
|
|
|
—
|
|
|
(6,659)
|
|
|
(8,440)
|
|
Total
revenues
|
|
|
54,108
|
|
|
218,361
|
|
|
(6,659)
|
|
|
265,810
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
operating
|
|
|
14,982
|
|
|
64,818
|
|
|
—
|
|
|
79,800
|
|
General and
administrative (excluding equity-based compensation)
|
|
|
8,386
|
|
|
16,316
|
|
|
(15,345)
|
|
|
9,357
|
|
Equity-based
compensation
|
|
|
11,423
|
|
|
2,477
|
|
|
—
|
|
|
13,900
|
|
Impairment of property
and equipment
|
|
|
—
|
|
|
6,982
|
|
|
—
|
|
|
6,982
|
|
Depreciation
|
|
|
7,650
|
|
|
21,707
|
|
|
9,408
|
|
|
38,765
|
|
Accretion and change
in fair value of contingent acquisition consideration
|
|
|
1,049
|
|
|
1,928
|
|
|
—
|
|
|
2,977
|
|
Accretion of asset
retirement obligations
|
|
|
10
|
|
|
63
|
|
|
—
|
|
|
73
|
|
Total operating
expenses
|
|
|
43,500
|
|
|
114,291
|
|
|
(5,937)
|
|
|
151,854
|
|
Operating
income
|
|
|
10,608
|
|
|
104,070
|
|
|
(722)
|
|
|
113,956
|
|
Other income
(expenses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(6,217)
|
|
|
(16,815)
|
|
|
171
|
|
|
(22,861)
|
|
Equity in earnings of
unconsolidated affiliates
|
|
|
2,880
|
|
|
12,264
|
|
|
(2,335)
|
|
|
12,809
|
|
Income before income
taxes
|
|
|
7,271
|
|
|
99,519
|
|
|
(2,886)
|
|
|
103,904
|
|
Provision for income
taxes (expense) benefit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Deferred
|
|
|
2,377
|
|
|
—
|
|
|
(24,158)
|
|
|
(21,781)
|
|
Total income
taxes
|
|
|
2,377
|
|
|
—
|
|
|
(24,158)
|
|
|
(21,781)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to incentive distribution rights
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net income and
comprehensive income
|
|
|
9,648
|
|
|
99,519
|
|
|
(27,044)
|
|
|
82,123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to vested Series B units
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net income
attributable to common shareholders or unitholders
|
|
$
|
9,648
|
|
|
99,519
|
|
|
(27,044)
|
|
|
82,123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common
share or unit–basic
|
|
$
|
0.04
|
|
|
|
|
|
|
|
|
0.16
|
|
Net income per common
share or unit–diluted
|
|
$
|
0.04
|
|
|
|
|
|
|
|
|
0.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares or units outstanding–basic
|
|
|
253,877
|
|
|
|
|
|
246,966
|
|
|
500,843
|
|
Weighted average
number of common shares or units outstanding–diluted
|
|
|
254,903
|
|
|
|
|
|
252,829
|
|
|
507,732
|
|
PRO
FORMA ANTERO MIDSTREAM CORPORATION
|
Selected Operating
Data
|
Three Months Ended
March 31, 2018 and 2019
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount
of
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
Increase
|
|
Percentage
|
|
|
2018
|
|
2019
|
|
|
or
Decrease
|
|
Change
|
Pro Forma Operating
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gathering—low pressure
(MMcf)
|
|
|
165,192
|
|
|
230,540
|
|
|
65,348
|
|
|
40
|
%
|
Gathering—high
pressure (MMcf)
|
|
|
158,862
|
|
|
224,786
|
|
|
65,924
|
|
|
41
|
%
|
Compression
(MMcf)
|
|
|
127,195
|
|
|
202,938
|
|
|
75,743
|
|
|
60
|
%
|
Fresh water delivery
(MBbl)
|
|
|
19,915
|
|
|
13,732
|
|
|
(6,183)
|
|
|
(31)
|
%
|
Treated water
(MBbl)
|
|
|
—
|
|
|
2,147
|
|
|
2,147
|
|
|
*
|
|
Other fluid handling
(MBbl)
|
|
|
3,979
|
|
|
5,066
|
|
|
1,087
|
|
|
27
|
%
|
Wells serviced by
fresh water delivery
|
|
|
46
|
|
|
31
|
|
|
(15)
|
|
|
(33)
|
%
|
Gathering—low pressure
(MMcf/d)
|
|
|
1,835
|
|
|
2,562
|
|
|
727
|
|
|
40
|
%
|
Gathering—high
pressure (MMcf/d)
|
|
|
1,765
|
|
|
2,498
|
|
|
733
|
|
|
42
|
%
|
Compression
(MMcf/d)
|
|
|
1,413
|
|
|
2,255
|
|
|
842
|
|
|
60
|
%
|
Fresh water delivery
(MBbl/d)
|
|
|
221
|
|
|
153
|
|
|
(68)
|
|
|
(31)
|
%
|
Treated water
(MBbl/d)
|
|
|
—
|
|
|
24
|
|
|
24
|
|
|
*
|
|
Other fluid handling
(MBbl/d)
|
|
|
44
|
|
|
56
|
|
|
12
|
|
|
27
|
%
|
Average realized
fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average gathering—low
pressure fee ($/Mcf)
|
|
$
|
0.32
|
|
|
0.33
|
|
|
0.01
|
|
|
3
|
%
|
Average gathering—high
pressure fee ($/Mcf)
|
|
$
|
0.19
|
|
|
0.20
|
|
|
0.01
|
|
|
5
|
%
|
Average compression
fee ($/Mcf)
|
|
$
|
0.19
|
|
|
0.19
|
|
|
—
|
|
|
—
|
%
|
Average fresh water
delivery fee ($/Bbl)
|
|
$
|
3.78
|
|
|
3.89
|
|
|
0.11
|
|
|
3
|
%
|
Average treatment fee
($/Bbl)
|
|
$
|
—
|
|
|
4.48
|
|
|
4.48
|
|
|
*
|
|
Joint Venture
Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Processing—Joint
Venture (MMcf)
|
|
|
46,726
|
|
|
89,652
|
|
|
42,926
|
|
|
92
|
%
|
Fractionation—Joint
Venture (MBbl)
|
|
|
555
|
|
|
1,981
|
|
|
1,426
|
|
|
257
|
%
|
Processing—Joint
Venture (MMcf/d)
|
|
|
519
|
|
|
996
|
|
|
477
|
|
|
92
|
%
|
Fractionation—Joint
Venture (MBbl/d)
|
|
|
6
|
|
|
22
|
|
|
16
|
|
|
267
|
%
|
______________________
|
* Not meaningful or
applicable.
|
PRO
FORMA ANTERO MIDSTREAM CORPORATION
|
Condensed
Consolidated Results of Segment Operations
|
Three Months Ended
March 31, 2018 and 2019
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Water
|
|
|
|
|
|
Pro
Forma
|
|
|
|
Gathering and
|
|
Handling
and
|
|
Pro
Forma
|
|
|
|
Consolidated
|
|
|
|
Processing
|
|
Treatment
|
|
Adjustments
|
|
Unallocated
(1)
|
|
Total
|
|
Three months ended
March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue–Antero
Resources
|
|
$
|
108,177
|
|
|
120,889
|
|
|
—
|
|
|
—
|
|
|
229,066
|
|
Revenue–third-party
|
|
|
—
|
|
|
525
|
|
|
—
|
|
|
—
|
|
|
525
|
|
Amortization of
customer contracts
|
|
|
—
|
|
|
—
|
|
|
(8,440)
|
|
|
—
|
|
|
(8,440)
|
|
Total
revenues
|
|
|
108,177
|
|
|
121,414
|
|
|
(8,440)
|
|
|
—
|
|
|
221,151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
operating
|
|
|
11,382
|
|
|
55,874
|
|
|
—
|
|
|
—
|
|
|
67,256
|
|
General and
administrative (excluding equity-based compensation)
|
|
|
5,704
|
|
|
2,540
|
|
|
—
|
|
|
925
|
|
|
9,169
|
|
Equity-based
compensation
|
|
|
4,658
|
|
|
1,553
|
|
|
—
|
|
|
8,635
|
|
|
14,846
|
|
Depreciation
|
|
|
23,414
|
|
|
9,018
|
|
|
11,925
|
|
|
—
|
|
|
44,357
|
|
Accretion and change
in fair value of contingent acquisition consideration
|
|
|
—
|
|
|
3,874
|
|
|
—
|
|
|
—
|
|
|
3,874
|
|
Accretion of asset
retirement obligations
|
|
|
—
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|
34
|
|
Total
expenses
|
|
|
45,158
|
|
|
72,893
|
|
|
11,925
|
|
|
9,560
|
|
|
139,536
|
|
Operating
income
|
|
$
|
63,019
|
|
|
48,521
|
|
|
(20,365)
|
|
|
(9,560)
|
|
|
81,615
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
$
|
(14,394)
|
|
|
3,097
|
|
|
(5,441)
|
|
|
—
|
|
$
|
(16,738)
|
|
Equity in earnings of
unconsolidated affiliates
|
|
$
|
7,862
|
|
|
—
|
|
|
(2,959)
|
|
|
—
|
|
$
|
4,903
|
|
Pro Forma Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
160,251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue–Antero
Resources
|
|
$
|
158,307
|
|
|
115,888
|
|
|
—
|
|
|
—
|
|
|
274,195
|
|
Revenue–third-party
|
|
|
—
|
|
|
55
|
|
|
—
|
|
|
—
|
|
|
55
|
|
Amortization of
customer contracts
|
|
|
—
|
|
|
—
|
|
|
(8,440)
|
|
|
—
|
|
|
(8,440)
|
|
Total
revenues
|
|
|
158,307
|
|
|
115,943
|
|
|
(8,440)
|
|
|
—
|
|
|
265,810
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
operating
|
|
|
14,108
|
|
|
65,692
|
|
|
—
|
|
|
—
|
|
|
79,800
|
|
General and
administrative (excluding equity-based compensation)
|
|
|
10,912
|
|
|
6,998
|
|
|
(15,345)
|
|
|
6,792
|
|
|
9,357
|
|
Equity-based
compensation
|
|
|
1,963
|
|
|
1,104
|
|
|
—
|
|
|
10,833
|
|
|
13,900
|
|
Impairment of property
and equipment
|
|
|
6,590
|
|
|
392
|
|
|
—
|
|
|
—
|
|
|
6,982
|
|
Depreciation
|
|
|
10,882
|
|
|
18,475
|
|
|
9,408
|
|
|
—
|
|
|
38,765
|
|
Accretion and change
in fair value of contingent acquisition consideration
|
|
|
—
|
|
|
2,977
|
|
|
—
|
|
|
—
|
|
|
2,977
|
|
Accretion of asset
retirement obligations
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
—
|
|
|
73
|
|
Total
expenses
|
|
|
44,455
|
|
|
95,711
|
|
|
(5,937)
|
|
|
17,625
|
|
|
151,854
|
|
Operating
income
|
|
$
|
113,852
|
|
|
20,232
|
|
|
(2,503)
|
|
|
(17,625)
|
|
|
113,956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
$
|
(23,000)
|
|
|
—
|
|
|
171
|
|
|
(32)
|
|
|
(22,861)
|
|
Equity in earnings of
unconsolidated affiliates
|
|
$
|
15,144
|
|
|
—
|
|
|
(2,335)
|
|
|
—
|
|
|
12,809
|
|
Pro Forma Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
202,473
|
|
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SOURCE Antero Midstream Corporation