DENVER, Feb. 12, 2020 /PRNewswire/ -- Antero Midstream
Corporation (NYSE: AM) ("Antero Midstream" or the
"Company") today released its fourth quarter and full year 2019
financial and operating results. In addition, Antero
Midstream announced its 2020 capital budget and guidance. The
relevant consolidated financial statements are included in Antero
Midstream's Annual Report on Form 10-K for the year ended
December 31, 2019.
Fourth Quarter 2019 Highlights Include:
- Net loss was $(144) million,
or $(0.29) per share
- Adjusted Net Income increased by 3% to $177 million compared to the pro forma prior year
quarter, or $0.35 per share (non-GAAP
measure)
- Adjusted EBITDA increased by 6% to $203 million compared to the pro forma prior year
quarter (non-GAAP measure)
- Distributable Cash Flow was $159
million, resulting in 1.1x DCF coverage on the $0.3075 per share declared dividend (non-GAAP
measure)
- Capital expenditures were $126
million, $29 million below the
midpoint of the revised capital budget
Full Year 2019 Highlights Include:
- Low pressure gathering and processing volumes increased by
23% and 70%, respectively, compared to the pro forma prior
year
- Capital expenditures were $646
million, flat year-over-year and approximately $130 million below the midpoint of the original
capital budget of $750 to
$800 million
- Net Debt to trailing twelve months pro forma Adjusted EBITDA
ratio was 3.5x at year-end (non-GAAP measure)
2020 Capital Budget and Guidance Highlights Include:
- Capital budget of $300 million
to $325 million, over a 50% reduction
compared to 2019 capital expenditures
-
- Includes $60 million of
maintenance capital at the midpoint of the range
- Forecasting net income of $345
million to $385 million and
Adjusted Net Income of $410 million
to $460 million
- Forecasting Adjusted EBITDA of $850
million to $900
million
- Forecasting Distributable Cash Flow of $625 million to $675
million, resulting in 1.1x annual DCF coverage on the
targeted annual dividend of $1.23 per
share
- Forecasting Free Cash Flow of $375
million to $425 million before
return of capital and changes in working capital (non-GAAP
measure)
- Financial guidance and capital budget supported by Antero
Resources' announced 2020 drilling and completion capital budget of
$1.15 billion, resulting in net
production growth guidance of 9% in 2020
Paul Rady, Chairman and CEO said,
"Antero Midstream's 2020 capital budget, which reflects a 52%
decrease compared to 2019, highlights the benefit of our
just-in-time capital investment philosophy. The integrated planning
efforts with Antero Resources and visibility into Antero Resources'
development plan allow us to be flexible and continue to focus on
capital discipline. The 2020 capital budget is focused primarily in
the Marcellus Shale, supporting Antero Resources' liquids-rich
development program on Antero Midstream dedicated acreage."
Mr. Rady further added, "Antero Resources today announced that
it expects its 2020 development plan to generate 9% year-over-year
net production growth. This net production growth supports
continued growth in gathering, compression, processing and
fractionation volumes for Antero Midstream."
For a discussion of the non-GAAP financial measures including
Adjusted EBITDA, Adjusted Net Income, Distributable Cash Flow and
Free Cash Flow presented on an actual and pro forma basis, as well
as Net Debt, please see "Non-GAAP Financial Measures."
Fourth Quarter 2019 Financial Results
The previously announced Simplification Transaction between
Antero Midstream GP LP ("AMGP") and Antero Midstream Partners LP
("Antero Midstream Partners") closed on March 12, 2019. GAAP financial results for
periods prior to the closing of the Simplification Transaction
reflect the financial results of AMGP. The financial and operating
results and comparisons for periods prior to the closing of the
Simplification Transaction that are discussed in this release are
based on the pro forma results of Antero Midstream Corporation as
if the transaction had occurred on January
1, 2018. Actual and pro forma financial statements can be
found in the back of this press release.
Low pressure gathering volumes for the fourth quarter of 2019
averaged 2,639 MMcf/d, a 1% increase as compared to the prior year
quarter. Compression volumes for the fourth quarter of 2019
averaged 2,414 MMcf/d, a 9% increase as compared to the fourth
quarter of 2018. High pressure gathering volumes for the
fourth quarter of 2019 averaged 2,613 MMcf/d, a 2% increase
compared to the fourth 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 148 MBbl/d
during the quarter, a 9% increase compared to the fourth 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 1,202 MMcf/d for
the fourth quarter of 2019, an increase of 51% compared to the
prior year quarter. Gross Joint Venture fractionation volumes
averaged 31 MBbl/d, a 63% increase compared to the prior year
quarter. Processing and fractionation capacity was 92% and 78%
utilized during the fourth quarter of 2019, respectively. 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
December
31,
|
|
Average Daily
Volumes:
|
|
2018(1)
|
|
2019
|
|
%
Change
|
Low Pressure Gathering
(MMcf/d)
|
|
2,602
|
|
2,639
|
|
1%
|
Compression
(MMcf/d)
|
|
2,215
|
|
2,414
|
|
9%
|
High Pressure
Gathering (MMcf/d)
|
|
2,569
|
|
2,613
|
|
2%
|
Fresh Water Delivery
(MBbl/d)
|
|
136
|
|
148
|
|
9%
|
Gross Joint Venture
Processing (MMcf/d)
|
|
796
|
|
1,202
|
|
51%
|
Gross Joint Venture
Fractionation (MBbl/d)
|
|
19
|
|
31
|
|
63%
|
|
1.
Pro forma Antero Midstream Corporation.
|
For the three months ended December 31,
2019, revenues were $239
million, comprised of $165
million from the Gathering and Processing segment and
$92 million from the Water Handling
segment, net of $17 million of
amortization of customer relationships. Water Handling revenues
include $38 million from wastewater
handling and high rate water transfer services.
Direct operating expenses for the Gathering and Processing and
Water Handling segments were $13
million and $42 million,
respectively, for a total of $55
million, compared to $92
million in total direct operating expenses in the prior year
quarter. Water Handling operating expenses include $37 million from wastewater handling and high
rate water transfer services. General and administrative expenses
excluding equity-based compensation were $13
million during the fourth quarter of 2019. Total
operating expenses included $20
million of equity compensation expense, $27 million of depreciation, and $3 million of accretion and change in fair value
of contingent acquisition consideration and asset retirement
obligations. In addition, Antero Midstream recorded a $297 million goodwill impairment expense
attributable to the goodwill allocated to the fresh water delivery
business as part of the Simplification Transaction.
Net loss was $(144) million, or
$(0.29) per share. Adjusted Net
Income was $177 million, or
$0.35 per share, representing a 3%
increase compared to the prior year quarter. Adjusted EBITDA
was $203 million, a 6% increase
compared to the prior year quarter. Adjusted EBITDA included
$10 million of Antero Clearwater
Facility idling costs during the fourth quarter. Cash
interest paid was $8 million. The
increase in cash reserved for bond interest during the quarter was
$27 million. Maintenance capital
expenditures during the quarter totaled $9
million and Distributable Cash Flow was $159 million. Based on the previously declared
dividend of $0.3075 per share, Antero
Midstream's Distributable Cash Flow coverage ratio was
approximately 1.1x.
The following table reconciles net income to Adjusted Net
Income, Adjusted EBITDA and Distributable Cash Flow as used in this
release (in thousands):
|
|
Three Months
Ended December
31,
|
|
|
|
2018
(1)
|
|
2019
|
Net
income
|
|
$
|
153,719
|
|
(144,559)
|
Amortization of
customer relationships
|
|
|
17,770
|
|
17,832
|
Impairment
expense
|
|
|
—
|
|
303,888
|
Adjusted Net
Income
|
|
|
171,489
|
|
177,161
|
Interest
expense
|
|
|
24,484
|
|
36,530
|
Provision for income
tax expense (benefit)
|
|
|
54,185
|
|
(68,240)
|
Depreciation
expense
|
|
|
26,626
|
|
26,969
|
Accretion and change in
fair value of contingent acquisition consideration
|
|
|
(104,826)
|
|
2,807
|
Equity-based
compensation
|
|
|
13,259
|
|
20,422
|
Equity in earnings of
unconsolidated affiliates
|
|
|
(10,913)
|
|
(16,334)
|
Distributions from
unconsolidated affiliates
|
|
|
16,755
|
|
21,750
|
Conflicts committee
legal & advisory fees
|
|
|
—
|
|
2,278
|
Adjusted
EBITDA
|
|
|
191,059
|
|
203,343
|
Interest
paid
|
|
|
(9,268)
|
|
(7,944)
|
Increase in cash
reserved for bond interest (2)
|
|
|
(8,734)
|
|
(27,422)
|
Maintenance capital
expenditures(3)
|
|
|
(7,988)
|
|
(8,898)
|
AMGP general and
administrative expenses
|
|
|
3,183
|
|
—
|
Income tax withholding
upon vesting of Antero Midstream Partners LP equity-based
compensation awards
|
|
|
(1,029)
|
|
(7)
|
Distributable Cash
Flow
|
|
$
|
167,223
|
|
159,072
|
|
|
|
|
|
|
Distributions or
Dividends Declared to Antero Midstream Holders
|
|
|
|
|
|
Distributions to
limited partners
|
|
$
|
88,045
|
|
—
|
Distributions to
incentive distribution rights and Series B unitholders
|
|
|
43,492
|
|
—
|
Dividends
|
|
|
—
|
|
148,856
|
Total Aggregate
Distributions and Dividends
|
|
$
|
131,537
|
|
148,856
|
|
|
|
|
|
|
Distributable Cash
Flow Coverage Ratio
|
|
|
1.3x
|
|
1.1x
|
|
|
1)
|
Three months ended
December 31, 2018 presented on a pro forma basis except for
distributions and dividends declared.
|
2)
|
Cash reserved for
bond interest expense on Antero Midstream's senior notes
outstanding during the period that is paid on a semi-annual
basis.
|
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.
|
Gathering and Processing — During the
fourth quarter of 2019, Antero Midstream connected 29 wells to
its gathering system and compression capacity was approximately 85%
utilized throughout the quarter. Antero Midstream added 120 MMcf/d
of additional compression capacity in the Marcellus Shale during
the fourth quarter of 2019 to support the anticipated growth in
Antero Resources' production. Antero Resources is currently
operating 4 drilling rigs and 4 completion crews on Antero
Midstream dedicated acreage. The Joint Venture recently placed the
Sherwood 12 and Sherwood 13 processing plants online, bringing the
Joint Venture's total processing capacity to 1.4 Bcf/d.
Water Handling— Antero Midstream's
Marcellus water delivery systems serviced 32 well completions
during the fourth quarter of 2019, a 7% increase from the prior
year quarter.
Balance Sheet and Liquidity
As of December 31, 2019, Antero
Midstream had approximately $960
million drawn on its $2.13
billion bank credit facility, resulting in approximately
$1.2 billion of liquidity.
Antero Midstream's Net Debt to trailing twelve months pro forma
Adjusted EBITDA was 3.5x as of December 31,
2019.
Capital Investments
Total capital expenditures including investments in the Joint
Venture were $126 million during the
fourth quarter of 2019. Gathering, compression, and water
infrastructure capital investments totaled $89 million and investments in unconsolidated
affiliates for the Joint Venture were $37
million during the quarter. Of the $89 million invested in gathering, compression,
and water infrastructure, $63 million
was invested in gathering and compression assets and $26 million was invested in water handling
assets.
2020 Guidance and Capital Budget
Today in a separate news release, Antero Resources announced its
2020 drilling and completion capital budget of $1.15 billion, which is forecast to generate net
production growth of approximately 9% over 2019 production.
Antero Resources has stated that it is more than 94% hedged on its
expected natural gas production in 2020 at a price of $2.87/MMbtu, or approximately 40% above current
NYMEX strip pricing. In addition, Antero Resources announced that
it expects its budget to be cash flow neutral in 2020 with leverage
to trend towards the mid 2-times range, assuming execution of its
previously announced asset sale program. Based on Antero Resources'
net production growth forecast, Antero Resources expects to achieve
all quarterly low pressure gathering targets under the recently
announced growth incentive fee program in 2020, which results in
$48 million of midstream fee
reductions from Antero Midstream that are included in Antero
Midstream's financial guidance. Antero Resources' release can be
found at www.anteroresources.com.
The following is a summary of Antero Midstream's 2020 guidance
($ in millions):
|
2020
|
Low
|
|
High
|
Capital
Expenditures
|
$
|
300
|
—
|
$
|
325
|
|
Net Income
|
|
410
|
—
|
|
460
|
|
Adjusted Net
Income
|
|
345
|
—
|
|
385
|
|
Adjusted
EBITDA
|
|
850
|
—
|
|
900
|
|
Distributable Cash
Flow
|
|
625
|
—
|
|
675
|
|
Free Cash Flow (before
return of capital and changes in working capital)
|
|
375
|
—
|
|
425
|
|
During 2020, Antero Midstream plans to expand its existing
Marcellus and Ohio Utica Shale gathering, compression and fresh
water delivery systems, and the processing capabilities of the
Joint Venture to accommodate Antero Resources' development
program. Antero Midstream has budgeted capital investments in
2020 of $300 million to $325 million, including $245 million to $260 in expansion capital and $55 million to $65
million in maintenance capital, respectively.
The capital budget includes approximately $200 million of investment in gathering and
compression infrastructure primarily in the Marcellus Shale in
West Virginia to support
production growth in the liquids-rich production areas.
Antero Midstream has budgeted an investment of $75 million for fresh water delivery and
wastewater blending and pipeline infrastructure to support Antero
Resources' development in Tyler
and Wetzel Counties, West
Virginia. Antero Midstream's capital budget also includes an
investment of $30 million for its 50%
interest in the Joint Venture, primarily for the continued
construction of the Smithburg
processing complex. Antero Midstream expects to fund all 2020
capital expenditures through cash flow from operations.
Michael Kennedy, CFO of Antero
Midstream, said, "As a result of the 52% year-over-year reduction
in capital expenditures combined with Adjusted EBITDA growth in
2020, Antero Midstream expects to generate significant free cash
flow and maintain a strong balance sheet with Net Debt to Adjusted
EBITDA in the mid 3-times range."
Conference Call
A conference call for Antero Midstream is scheduled on
Thursday, February 13, 2020 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 877-407-9126
(U.S.), or 201-493-6751 (International) and reference "Antero
Midstream". A telephone replay of the call will be available
until Thursday, February 20, 2020 at
10:00 am MT at 877-660-6853 (U.S.) or
201-612-7415 (International) using the conference ID: 13693464.
A simultaneous webcast of the call and presentation may be
accessed over the internet at www.anteromidstream.com. The
webcast will be archived for replay on Antero Midstream's website
until Thursday, February 20, 2020 at
10:00 am MT.
Presentation
An updated company presentation will be posted to Antero
Midstream's website. The presentation can be found at
www.anteromidstream.com on the homepage. Information on
Antero Midstream's website does not constitute a portion of, and is
not incorporated by reference into, this press release.
Pro Forma Information
The pro forma information presented herein is for illustrative
purposes only. If this Simplification Transaction 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 the Simplification Transaction had taken place on
January 1, 2018. In addition, future
results may vary significantly from the pro forma results reflected
in this release and should not be relied upon as an indication of
Antero Midstream's future results. For more information, please see
Antero Midstream's Annual Report on Form 10-K for the year ended
December 31, 2019.
Non-GAAP Financial Measures and Definitions
Antero Midstream uses certain non-GAAP financial measures.
Antero Midstream defines Adjusted Net Income as net income plus
amortization of customer contracts and impairment expenses. Antero
Midstream uses Adjusted Net Income to assess the operating
performance of its assets. Antero Midstream defines Adjusted EBITDA
as net income before amortization of customer relationships,
impairment expense, interest expense, provision for income taxes
(benefit), depreciation expense, accretion, 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 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 companies in the midstream energy
sector, without regard to financing or capital structure; and
- the viability of acquisitions and other capital expenditure
projects.
Antero Midstream defines Free Cash Flow as Adjusted EBITDA less
interest expense less capital expenditures before dividend payments
or share repurchases. Antero Midstream uses Free Cash Flow as a
performance metric to compare the cash generating performance of
Antero Midstream from period to period. Free Cash Flow does
not reflect changes in working capital balances.
Antero Midstream's defines Distributable Cash Flow as Adjusted
EBITDA less interest paid, decrease in cash reserved for bond
interest, income tax withholding upon vesting of equity-based
compensation awards, AMGP general and administrative expenses, 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.
Adjusted EBITDA, Adjusted Net Income, Free Cash Flow and
Distributable Cash Flow are non-GAAP financial measures. The
GAAP measure most directly comparable to such measures is Net
Income. Such non-GAAP financial measures should not be
considered as alternatives to the GAAP measure of Net Income.
The presentations of such measures are not made in accordance with
GAAP and have important limitations as analytical tools because
they include some, but not all, items that affect Net Income and,
as applicable, Adjusted EBITDA. You should not consider any
or all such measures in isolation or as a substitute for analyses
of results as reported under GAAP. Antero Midstream's
definitions of such measures may not be comparable to similarly
titled measures of other companies.
Antero Midstream defines Net Debt as consolidated total debt
less cash and cash equivalents. Antero Midstream views Net
Debt as an important indicator in evaluating Antero Midstream's
financial leverage.
Antero Midstream has not included a reconciliation of Adjusted
EBITDA, Adjusted Net Income, Free Cash Flow or Distributable Cash
Flow to the nearest GAAP financial measure for 2020 because it
cannot do so without unreasonable effort and any attempt to do so
would be inherently imprecise. Antero Midstream is able to forecast
the following reconciling items between such measures and Net
Income (in thousands):
|
Twelve Months
Ending
December 31, 2020
|
Low
|
|
High
|
Depreciation
expense
|
$
|
110
|
—
|
$
|
120
|
Equity based
compensation expense
|
|
10
|
—
|
|
20
|
Interest
expense
|
|
160
|
—
|
|
170
|
Amortization of
customer relationships
|
|
65
|
—
|
|
75
|
Distributions from
unconsolidated affiliates
|
|
95
|
—
|
|
105
|
This press release also includes information about Antero
Resources' expected leverage, which is a non-GAAP financial
measure. For more information regarding this measure, please refer
to Antero Resources' press release dated February 12, 2020, which is available on Antero
Resources' website at www.anteroresources.com.
The following table reconciles consolidated total debt to
consolidated net debt ("Net Debt") as used in this release (in
thousands):
|
|
December 31,
2019
|
Bank credit
facility
|
|
$959,500
|
5.375% senior notes
due 2024
|
|
652,600
|
5.75% senior notes
due 2027
|
|
653,250
|
5.75% senior notes
due 2028
|
|
650,000
|
Net unamortized debt
issuance costs
|
|
(23,101)
|
Consolidated total
debt
|
|
$2,892,249
|
Cash and cash
equivalents
|
|
(1,235)
|
Consolidated net
debt
|
|
$2,891,014
|
The following table reconciles net income to Adjusted EBITDA for
the last twelve months as used in this release (in thousands):
|
|
12 months ended
December 31, 2019
|
Net
income
|
$
|
(285,076)
|
Amortization of
customer relationships
|
|
70,874
|
Impairment
expense
|
|
768,942
|
Adjusted Net
Income
|
|
554,740
|
Interest
expense
|
|
130,518
|
Provision for income
tax expense (benefit)
|
|
(79,120)
|
Depreciation
expense
|
|
120,363
|
Accretion and change in
fair value of contingent acquisition consideration
|
|
10,254
|
Equity-based
compensation
|
|
75,994
|
Equity in earnings of
unconsolidated affiliates
|
|
(62,394)
|
Distributions from
unconsolidated affiliates
|
|
76,925
|
Conflicts committee
legal & advisory fees
|
|
2,278
|
Adjusted
EBITDA
|
$
|
829,558
|
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 and return capital to its shareholders,
information regarding potential incremental flowback and produced
water services, information regarding long-term financial and
operating outlooks for Antero Midstream and Antero Resources and
information regarding Antero Resources' expected future growth and
its ability to meet its drilling and development 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. Except as required by law, 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, Antero Resources' expected future growth, Antero Resources'
ability to meet its drilling and development plan, commodity price
volatility, Antero Midstream's ability to execute its business
strategy, competition and governmental regulations, actions taken
by third party producers, operators, processors and transporters,
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,
2019.
For more information, contact Michael
Kennedy – CFO of Antero Midstream at (303) 357-6782 or
mkennedy@anteroresources.com.
ANTERO MIDSTREAM
CORPORATION
|
Consolidated Balance Sheets
|
December 31, 2018 and 2019
|
(In
thousands)
|
|
|
|
December
31,
|
|
|
2018
|
|
2019
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
2,822
|
|
1,235
|
Accounts
receivable–Antero Resources
|
|
|
—
|
|
101,029
|
Accounts
receivable–third party
|
|
|
—
|
|
4,574
|
Other current
assets
|
|
|
87
|
|
1,720
|
Total current
assets
|
|
|
2,909
|
|
108,558
|
Property and
equipment, net
|
|
|
—
|
|
3,273,410
|
Investments in
unconsolidated affiliates
|
|
|
43,492
|
|
709,639
|
Deferred tax
asset
|
|
|
1,304
|
|
103,231
|
Customer
relationships
|
|
|
—
|
|
1,498,119
|
Goodwill
|
|
|
—
|
|
575,461
|
Other assets,
net
|
|
|
—
|
|
14,460
|
Total
assets
|
|
$
|
47,705
|
|
6,282,878
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable–Antero Resources
|
|
$
|
731
|
|
3,146
|
Accounts payable–third
party
|
|
|
28
|
|
6,645
|
Accrued
liabilities
|
|
|
407
|
|
104,188
|
Contingent acquisition
consideration
|
|
|
—
|
|
125,000
|
Taxes
payable
|
|
|
15,678
|
|
—
|
Other current
liabilities
|
|
|
—
|
|
3,105
|
Total current
liabilities
|
|
|
16,844
|
|
242,084
|
Long-term
liabilities:
|
|
|
|
|
|
Long-term
debt
|
|
|
—
|
|
2,892,249
|
Other
|
|
|
—
|
|
5,131
|
Total
liabilities
|
|
|
16,844
|
|
3,139,464
|
|
|
|
|
|
|
Partners' Capital and
Stockholders' Equity:
|
|
|
|
|
|
Common
shareholders—186,219 shares issued and outstanding at December 31,
2018; none issued and outstanding at December 31, 2019
|
|
|
(41,969)
|
|
—
|
IDR LLC Series B units
(66 units vested at December 31, 2018; none issued and outstanding
at December 31, 2019)
|
|
|
72,830
|
|
—
|
Preferred stock, $0.01
par value: none authorized or issued at December 31, 2018; 100,000
authorized at December 31, 2019
|
|
|
|
|
|
Series A non-voting
perpetual preferred stock; none designated, issued or outstanding
at December 31, 2018; 12 designated and 10 issued and outstanding
at December 31, 2019
|
|
|
—
|
|
—
|
Common stock, $0.01
par value; none authorized, issued or outstanding at December 31,
2018; 2,000,000 authorized and 484,042 issued and outstanding at
December 31, 2019
|
|
|
—
|
|
4,840
|
Additional paid-in
capital
|
|
|
—
|
|
3,480,139
|
Accumulated
loss
|
|
|
—
|
|
(341,565)
|
Total partners'
capital and stockholders' equity
|
|
|
30,861
|
|
3,143,414
|
Total liabilities and
partners' capital and stockholders' equity
|
|
$
|
47,705
|
|
6,282,878
|
ANTERO MIDSTREAM
CORPORATION
|
Consolidated
Statements of Operations and Comprehensive Income
|
Three Months Ended
December 31, 2018 and 2019
|
(In thousands,
except per share amounts)
|
(Unaudited)
|
|
|
|
Three Months Ended
December 31,
|
|
|
2018
|
|
2019
|
Revenue:
|
|
|
|
|
|
|
Gathering and
compression–Antero Resources
|
|
$
|
—
|
|
|
165,360
|
Water handling and
treatment–Antero Resources
|
|
|
—
|
|
|
91,539
|
Amortization of
customer relationships
|
|
|
—
|
|
|
(17,832)
|
Total
revenue
|
|
|
—
|
|
|
239,067
|
Operating
expenses:
|
|
|
|
|
|
|
Direct
operating
|
|
|
—
|
|
|
55,030
|
General and
administrative (including $8,792 and $20,422 of equity-based
compensation in 2018 and 2019, respectively)
|
|
|
11,975
|
|
|
33,087
|
Facility
idling
|
|
|
—
|
|
|
9,889
|
Impairment of property
and equipment
|
|
|
—
|
|
|
1,297
|
Impairment of
goodwill
|
|
|
—
|
|
|
296,591
|
Impairment of customer
relationships
|
|
|
—
|
|
|
6,000
|
Depreciation
|
|
|
—
|
|
|
26,969
|
Accretion and change
in fair value of contingent acquisition consideration
|
|
|
—
|
|
|
2,753
|
Accretion of asset
retirement obligations
|
|
|
—
|
|
|
54
|
Total operating
expenses
|
|
|
11,975
|
|
|
431,670
|
Operating
loss
|
|
|
(11,975)
|
|
|
(192,603)
|
Interest expense,
net
|
|
|
(54)
|
|
|
(36,530)
|
Equity in earnings of
unconsolidated affiliates
|
|
|
43,492
|
|
|
16,334
|
Income (loss) before
income taxes
|
|
|
31,463
|
|
|
(212,799)
|
Provision for income
tax benefit (expense)
|
|
|
(10,075)
|
|
|
68,240
|
Net income (loss) and
comprehensive income (loss)
|
|
$
|
21,388
|
|
|
(144,559)
|
|
|
|
|
|
|
|
Net income (loss) per
share–basic and diluted
|
|
$
|
0.09
|
|
|
(0.29)
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
Basic
|
|
|
186,218
|
|
|
500,043
|
Diluted
|
|
|
186,218
|
|
|
500,043
|
ANTERO MIDSTREAM
CORPORATION
|
Consolidated
Statements of Operations and Comprehensive Income
|
Years Ended December
31, 2017, 2018, and 2019
|
(In thousands,
except per share amounts)
|
|
|
Year Ended
December 31,
|
|
2017
|
|
2018
|
|
2019
|
Revenue:
|
|
|
|
|
|
|
|
|
Gathering and
compression–Antero Resources
|
$
|
—
|
|
|
—
|
|
|
543,538
|
Water handling–Antero
Resources
|
|
—
|
|
|
—
|
|
|
306,010
|
Water handling–third
party
|
|
—
|
|
|
—
|
|
|
50
|
Amortization of
customer relationships
|
|
—
|
|
|
—
|
|
|
(57,010)
|
Total
revenue
|
|
—
|
|
|
—
|
|
|
792,588
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Direct
operating
|
|
—
|
|
|
—
|
|
|
195,818
|
General and
administrative (including $34,933, $35,111 and $73,517 of
equity-based compensation in 2017, 2018 and 2019,
respectively)
|
|
41,134
|
|
|
43,851
|
|
|
118,113
|
Facility
idling
|
|
—
|
|
|
—
|
|
|
11,401
|
Impairment of property
and equipment
|
|
—
|
|
|
—
|
|
|
409,739
|
Impairment of
goodwill
|
|
—
|
|
|
—
|
|
|
340,350
|
Impairment of customer
relationships
|
|
—
|
|
|
—
|
|
|
11,871
|
Depreciation
|
|
—
|
|
|
—
|
|
|
95,526
|
Accretion and change
in fair value of contingent acquisition consideration
|
|
—
|
|
|
—
|
|
|
8,076
|
Accretion of asset
retirement obligations
|
|
—
|
|
|
—
|
|
|
187
|
Total operating
expenses
|
|
41,134
|
|
|
43,851
|
|
|
1,191,081
|
Operating
loss
|
|
(41,134)
|
|
|
(43,851)
|
|
|
(398,493)
|
Interest expense,
net
|
|
—
|
|
|
(136)
|
|
|
(110,402)
|
Equity in earnings of
unconsolidated affiliates
|
|
69,720
|
|
|
142,906
|
|
|
51,315
|
Income (loss) before
income taxes
|
|
28,586
|
|
|
98,919
|
|
|
(457,580)
|
Provision for income
tax benefit (expense)
|
|
(26,261)
|
|
|
(32,311)
|
|
|
102,466
|
Net income (loss) and
comprehensive income (loss)
|
$
|
2,325
|
|
|
66,608
|
|
|
(355,114)
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share–basic and diluted
|
$
|
0.03
|
|
|
0.33
|
|
|
(0.80)
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
186,176
|
|
|
186,203
|
|
|
442,640
|
Diluted
|
|
186,176
|
|
|
186,203
|
|
|
442,640
|
ANTERO MIDSTREAM
CORPORATION
|
Selected Operating
Data
|
Three Months Ended
December 31, 2018 and 2019
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount
of
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Increase
|
|
Percentage
|
|
|
2018(1)
|
|
2019
|
|
or
Decrease
|
|
Change
|
Operating
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gathering—low pressure
(MMcf)
|
|
|
239,392
|
|
|
242,785
|
|
|
3,393
|
|
|
1
|
%
|
Gathering—high
pressure (MMcf)
|
|
|
236,332
|
|
|
240,366
|
|
|
4,034
|
|
|
2
|
%
|
Compression
(MMcf)
|
|
|
203,740
|
|
|
222,050
|
|
|
18,310
|
|
|
9
|
%
|
Fresh water delivery
(MBbl)
|
|
|
12,514
|
|
|
13,602
|
|
|
1,088
|
|
|
9
|
%
|
Treated water
(MBbl)
|
|
|
782
|
|
|
—
|
|
|
(782)
|
|
|
*
|
|
Other fluid handling
(MBbl)
|
|
|
5,406
|
|
|
5,380
|
|
|
(26)
|
|
|
(1)
|
%
|
Wells serviced by
fresh water delivery
|
|
|
30
|
|
|
32
|
|
|
2
|
|
|
7
|
%
|
Gathering—low pressure
(MMcf/d)
|
|
|
2,602
|
|
|
2,639
|
|
|
37
|
|
|
1
|
%
|
Gathering—high
pressure (MMcf/d)
|
|
|
2,569
|
|
|
2,613
|
|
|
44
|
|
|
2
|
%
|
Compression
(MMcf/d)
|
|
|
2,215
|
|
|
2,414
|
|
|
199
|
|
|
9
|
%
|
Fresh water delivery
(MBbl/d)
|
|
|
136
|
|
|
148
|
|
|
12
|
|
|
9
|
%
|
Treated water
(MBbl/d)
|
|
|
9
|
|
|
—
|
|
|
(9)
|
|
|
*
|
|
Other fluid handling
(MBbl/d)
|
|
|
59
|
|
|
58
|
|
|
(1)
|
|
|
(2)
|
%
|
Average realized
fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average gathering—low
pressure fee ($/Mcf)
|
|
$
|
0.32
|
|
|
0.33
|
|
|
0.01
|
|
|
3
|
%
|
Average gathering—high
pressure fee ($/Mcf)
|
|
$
|
0.19
|
|
|
0.18
|
|
|
(0.01)
|
|
|
(5)
|
%
|
Average compression
fee ($/Mcf)
|
|
$
|
0.19
|
|
|
0.20
|
|
|
0.01
|
|
|
5
|
%
|
Average fresh water
delivery fee ($/Bbl)
|
|
$
|
3.78
|
|
|
3.90
|
|
|
0.12
|
|
|
3
|
%
|
Average treatment fee
($/Bbl)
|
|
$
|
4.64
|
|
|
—
|
|
|
(4.64)
|
|
|
*
|
|
Joint Venture
Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Processing—Joint
Venture (MMcf)
|
|
|
73,260
|
|
|
110,647
|
|
|
37,387
|
|
|
51
|
%
|
Fractionation—Joint
Venture (MBbl)
|
|
|
1,718
|
|
|
2,871
|
|
|
1,153
|
|
|
67
|
%
|
Processing—Joint
Venture (MMcf/d)
|
|
|
796
|
|
|
1,202
|
|
|
406
|
|
|
51
|
%
|
Fractionation—Joint
Venture (MBbl/d)
|
|
|
19
|
|
|
31
|
|
|
12
|
|
|
63
|
%
|
|
1)
Three months ended December 31, 2018 are presented on a pro
forma basis
|
|
* Not meaningful or
applicable.
|
ANTERO MIDSTREAM
CORPORATION
|
Consolidated Results
of Segment Operations
|
Three Months Ended
December 31, 2019
|
(Unaudited)
|
(In
thousands)
|
|
|
|
Gathering and
|
|
Water
|
|
Pro
Forma
|
|
|
|
Consolidated
|
|
|
Processing
|
|
Handling
|
|
Adjustments
|
|
Unallocated
|
|
Total
|
Three months ended
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue–Antero
Resources
|
|
$
|
165,360
|
|
|
91,539
|
|
|
—
|
|
|
—
|
|
|
256,899
|
Amortization of
customer relationships
|
|
|
(10,584)
|
|
|
(7,248)
|
|
|
—
|
|
|
—
|
|
|
(17,832)
|
Total
revenues
|
|
|
154,776
|
|
|
84,291
|
|
|
—
|
|
|
—
|
|
|
239,067
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
operating
|
|
|
13,037
|
|
|
41,993
|
|
|
—
|
|
|
—
|
|
|
55,030
|
General and
administrative (excluding equity-based compensation)
|
|
|
5,564
|
|
|
3,268
|
|
|
—
|
|
|
3,833
|
|
|
12,665
|
Facility
idling
|
|
|
—
|
|
|
9,889
|
|
|
—
|
|
|
—
|
|
|
9,889
|
Equity-based
compensation
|
|
|
1,550
|
|
|
541
|
|
|
—
|
|
|
18,331
|
|
|
20,422
|
Impairment of property
and equipment
|
|
|
—
|
|
|
1,297
|
|
|
—
|
|
|
—
|
|
|
1,297
|
Impairment of
goodwill
|
|
|
—
|
|
|
296,591
|
|
|
—
|
|
|
—
|
|
|
296,591
|
Impairment of customer
relationships
|
|
|
—
|
|
|
6,000
|
|
|
—
|
|
|
—
|
|
|
6,000
|
Depreciation
|
|
|
12,662
|
|
|
14,307
|
|
|
—
|
|
|
—
|
|
|
26,969
|
Accretion and change
in fair value of contingent acquisition consideration
|
|
|
—
|
|
|
2,753
|
|
|
—
|
|
|
—
|
|
|
2,753
|
Accretion of asset
retirement obligations
|
|
|
—
|
|
|
54
|
|
|
—
|
|
|
—
|
|
|
54
|
Total
expenses
|
|
|
32,822
|
|
|
376,684
|
|
|
—
|
|
|
22,164
|
|
|
431,670
|
Operating
income
|
|
|
121,954
|
|
|
(292,393)
|
|
|
—
|
|
|
(22,164)
|
|
|
(192,603)
|
Other income
(expenses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(36,530)
|
|
|
(36,530)
|
Equity in earnings of
unconsolidated affiliates
|
|
|
16,334
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,334
|
Income (loss) before
taxes
|
|
|
138,288
|
|
|
(292,393)
|
|
|
—
|
|
|
(58,694)
|
|
|
(212,799)
|
Provision for income
tax benefit
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68,240
|
|
|
68,240
|
Net income (loss) and
comprehensive income (loss)
|
|
$
|
138,288
|
|
|
(292,393)
|
|
|
—
|
|
|
9,546
|
|
|
(144,559)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
203,343
|
ANTERO MIDSTREAM
CORPORATION
|
Consolidated
Statements of Cash Flows
|
Years Ended December
31, 2017, 2018 and 2019
|
(In
thousands)
|
|
|
|
Year Ended
December 31,
|
|
|
2017
|
|
2018
|
|
2019
|
Cash flows provided
by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
2,325
|
|
|
66,608
|
|
|
(355,114)
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Distributions from
Antero Midstream Partners LP, prior to the Transactions
|
|
|
53,491
|
|
|
123,186
|
|
|
43,492
|
Depreciation
|
|
|
—
|
|
|
—
|
|
|
95,526
|
Accretion and change
in fair value of contingent acquisition consideration
|
|
|
—
|
|
|
—
|
|
|
8,263
|
Impairment
|
|
|
—
|
|
|
—
|
|
|
761,960
|
Deferred income tax
benefit
|
|
|
—
|
|
|
(1,304)
|
|
|
(101,927)
|
Equity-based
compensation
|
|
|
34,933
|
|
|
35,111
|
|
|
73,517
|
Equity in earnings of
unconsolidated affiliates
|
|
|
(69,720)
|
|
|
(142,906)
|
|
|
(51,315)
|
Distributions from
unconsolidated affiliates
|
|
|
—
|
|
|
—
|
|
|
64,320
|
Amortization of
customer relationships
|
|
|
—
|
|
|
—
|
|
|
57,010
|
Amortization of
deferred financing costs
|
|
|
—
|
|
|
148
|
|
|
3,183
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts
receivable–Antero Resources
|
|
|
—
|
|
|
—
|
|
|
42,484
|
Accounts
receivable–third party
|
|
|
—
|
|
|
—
|
|
|
185
|
Other current
assets
|
|
|
—
|
|
|
(5)
|
|
|
(335)
|
Accounts
payable–Antero Resources
|
|
|
57
|
|
|
674
|
|
|
(2,103)
|
Accounts payable–third
party
|
|
|
—
|
|
|
28
|
|
|
(9,762)
|
Accrued
liabilities
|
|
|
(190)
|
|
|
171
|
|
|
8,681
|
Income taxes
payable
|
|
|
7,184
|
|
|
1,820
|
|
|
(15,678)
|
Net cash provided by
operating activities
|
|
|
28,080
|
|
|
83,531
|
|
|
622,387
|
Cash flows used in
investing activities:
|
|
|
|
|
|
|
|
|
|
Additions to gathering
systems and facilities
|
|
|
—
|
|
|
—
|
|
|
(267,383)
|
Additions to water
handling systems
|
|
|
—
|
|
|
—
|
|
|
(124,607)
|
Investments in
unconsolidated affiliates
|
|
|
—
|
|
|
—
|
|
|
(154,359)
|
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
|
|
|
—
|
|
|
—
|
|
|
901
|
Change in other
liabilities
|
|
|
—
|
|
|
—
|
|
|
(1,050)
|
Net cash used in
investing activities
|
|
|
—
|
|
|
—
|
|
|
(525,675)
|
Cash flows provided
by (used in) financing activities:
|
|
|
|
|
|
|
|
|
|
Distributions to
Antero Resources Investment LLC
|
|
|
(15,691)
|
|
|
—
|
|
|
—
|
Distributions to
unitholders and dividends to stockholders
|
|
|
(16,011)
|
|
|
(84,166)
|
|
|
(492,103)
|
Distributions to
Series B unitholders
|
|
|
—
|
|
|
(2,300)
|
|
|
(3,720)
|
Distributions to
preferred stockholders
|
|
|
—
|
|
|
—
|
|
|
(374)
|
Repurchases of common
stock
|
|
|
—
|
|
|
—
|
|
|
(125,519)
|
Issuance of senior
notes
|
|
|
—
|
|
|
—
|
|
|
650,000
|
Payments of deferred
financing costs
|
|
|
—
|
|
|
(230)
|
|
|
(8,894)
|
Payments on bank
credit facilities, net
|
|
|
—
|
|
|
—
|
|
|
(115,500)
|
Employee tax
withholding for settlement of equity compensation awards
|
|
|
—
|
|
|
—
|
|
|
(2,015)
|
Other
|
|
|
—
|
|
|
—
|
|
|
(174)
|
Net cash used in
financing activities
|
|
|
(31,702)
|
|
|
(86,696)
|
|
|
(98,299)
|
Net decrease in cash
and cash equivalents
|
|
|
(3,622)
|
|
|
(3,165)
|
|
|
(1,587)
|
Cash and cash
equivalents, beginning of period
|
|
|
9,609
|
|
|
5,987
|
|
|
2,822
|
Cash and cash
equivalents, end of period
|
|
$
|
5,987
|
|
|
2,822
|
|
|
1,235
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
Cash paid during the
period for interest
|
|
$
|
—
|
|
|
3
|
|
|
83,016
|
Cash paid during the
period for income taxes
|
|
$
|
19,077
|
|
|
31,795
|
|
|
16,079
|
Decrease in accrued
capital expenditures and accounts payable for property and
equipment
|
|
$
|
—
|
|
|
—
|
|
|
(6,215)
|
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SOURCE Antero Midstream Corporation