DENVER, Oct. 27, 2021 /PRNewswire/ -- Antero
Midstream Corporation (NYSE: AM) ("Antero Midstream" or
the "Company") today announced its third quarter 2021 financial and
operational results. The relevant unaudited condensed
consolidated financial statements are included in Antero
Midstream's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2021.
Third Quarter 2021 Earnings Highlights:
- Net income was $89 million, or
$0.19 per share, compared to
$0.22 per share in the prior year
quarter
- Adjusted Net Income was $103
million, or $0.22 per share,
compared to $0.25 per share in the
prior year quarter (non-GAAP measure)
- Adjusted EBITDA was $219
million, a 4% decrease compared to the prior year quarter
(non-GAAP measure)
- Capital expenditures were $81
million
- Net cash provided by operating activities was $185 million
- Free Cash Flow before dividends was $94 million and Free Cash Flow After Dividends
was $(13) million (non-GAAP
measure)
- Net debt to last twelve months Adjusted EBITDA was 3.6x
(non-GAAP measure)
- Placed in service Smithburg 1 processing plant, adding 200
MMcf/d of Joint Venture processing capacity
- Connected the 1,000th well to its integrated
gathering and compression system since inception
Recent Developments:
- Extended credit facility maturity from 2022 to 2026 and
elected to reduce commitments from $2.13
billion to $1.25
billion
- Published 2020 ESG report highlighting a focus on People,
Performance and Purpose
-
- Strong safety record with a Total Recordable Incident Rate
(TRIR) of 0.469, a 22% year-over-year reduction and a 62% reduction
since 2016
- Continued reduction in methane leak loss rate to 0.015%,
significantly below the ONE future industry goal of 1% and more
than 50% lower than the midstream industry peer average of
0.033%
- 84% of total wastewater was gathered, recycled and reused in
completions. 100% of fresh water used in completions was
transported by pipeline.
-
- In combination, this eliminated 32 million truck traffic
miles and avoided 14,000 metric tons of CO2e
- Aligned executive compensation with ESG performance and
established ESG Committee
- Reaffirmed 2025 environmental goals of a 100% reduction in
pipeline maintenance emissions and moved towards incorporating
elements of TCFD and SASB disclosure frameworks and standards into
reporting practices
Paul Rady, Chairman and CEO said,
"During the third quarter Antero Midstream continued to execute on
its business plan, placing in service the Smithburg 1 processing
plant adding 200 MMcf/d of incremental Joint Venture processing
capacity. In addition, Antero Midstream continued construction on
additional low pressure, compression and high pressure
infrastructure to support the expected throughput growth from the
Antero Resources and QL Capital Partners drilling partnership."
Mr. Rady further added, "We also recently published our 2020 ESG
report. The report highlights our commitment to the communities in
which we operate and our continued reductions in our methane leak
loss rate. In addition, the report highlights Antero Midstream's
unique positioning that directly impacts populations living in
energy poverty across the world. In 2020, Antero Midstream provided
integrated midstream services that allowed Antero Resources to ship
approximately one-third of its LPG exports to developing nations,
including the nations of Nigeria,
Peru and India, improving people's health, safety and
livelihood through the displacement of more expensive and more
carbon-intensive energy sources."
For a discussion of the non-GAAP financial measures including
Adjusted Net Income, Adjusted EBITDA, Free Cash Flow and Net Debt
please see "Non-GAAP Financial Measures."
Third Quarter 2021 Financial Results
Low pressure gathering volumes for the third quarter of 2021
averaged 2,880 MMcf/d, a 6% decrease as compared to the prior
year quarter. Compression volumes for the third quarter of
2021 averaged 2,734 MMcf/d, a 3% decrease as compared to the third
quarter of 2020. High pressure gathering volumes for the
third quarter of 2021 averaged 2,811 MMcf/d, a 7% decrease
compared to the third quarter of 2020. Gathering and compression
volumes were negatively impacted by approximately 100 MMcf/d due to
downtime at the Sherwood and Hopedale processing and fractionation
facilities during the quarter. Fresh water delivery volumes
averaged 91 MBbl/d during the quarter, an 18% decrease
compared to the third quarter of 2020.
Gross processing volumes from the Company's processing and
fractionation joint venture with MPLX ("Joint Venture") averaged
1,539 MMcf/d for the third quarter of 2021, a 4% increase compared
to the prior year quarter. The increase in processing volumes
was driven by placing the Smithburg 1 processing plant online
during the quarter. Gross Joint Venture fractionation volumes
averaged 37 MBbl/d, a 5% decrease compared to the prior year
quarter.
|
|
Three Months
Ended
September
30,
|
|
|
Average Daily
Volumes:
|
|
2020
|
|
2021
|
|
%
Change
|
|
Low Pressure Gathering
(MMcf/d)
|
|
3,051
|
|
2,880
|
|
(6)%
|
|
Compression
(MMcf/d)
|
|
2,821
|
|
2,734
|
|
(3)%
|
|
High Pressure
Gathering (MMcf/d)
|
|
3,008
|
|
2,811
|
|
(7)%
|
|
Fresh Water Delivery
(MBbl/d)
|
|
111
|
|
91
|
|
(18)%
|
|
Gross Joint Venture
Processing (MMcf/d)
|
|
1,484
|
|
1,539
|
|
4%
|
|
Gross Joint Venture
Fractionation (MBbl/d)
|
|
39
|
|
37
|
|
(5)%
|
|
For the three months ended September 30,
2021, revenues were $225
million, comprised of $189
million from the Gathering and Processing segment and
$54 million from the Water Handling segment, net of
$18 million of amortization of customer relationships.
Water Handling revenues included $21 million from wastewater
handling and high rate water transfer services.
Direct operating expenses for the Gathering and Processing and
Water Handling segments were $16 million and $23 million,
respectively, for a total of $39 million, compared to
$38 million in total direct operating expenses in the prior
year quarter. Water Handling operating expenses included
$19 million from wastewater handling and high rate water
transfer services. General and administrative expenses excluding
equity-based compensation were $12
million during the third quarter of 2021. Total
operating expenses during the third quarter of 2021 included
$3 million of equity-based
compensation expense and $27 million
of depreciation.
Net income was $89 million, or
$0.19 per share. Net income
adjusted for amortization of customer relationships and impairment
expense, net of tax effects of reconciling items, or Adjusted Net
Income, was $103 million. Adjusted Net Income per share was
$0.22 per share, a 12% decrease
compared to the prior year quarter.
The following table reconciles Net Income to Adjusted Net Income
(in thousands):
|
|
Three Months
Ended September
30,
|
|
|
|
2020
|
|
|
2021
|
|
Net
Income
|
|
$
|
105,507
|
|
|
89,327
|
|
Amortization of
customer relationships
|
|
|
17,800
|
|
|
17,668
|
|
Impairment
expense
|
|
|
947
|
|
|
203
|
|
Tax effect of
reconciling items(1)
|
|
|
(4,631)
|
|
|
(4,455)
|
|
Adjusted Net
Income
|
|
$
|
119,623
|
|
|
102,743
|
|
|
|
(1)
|
Statutory tax rate
was approximately 24.7% for 2020 and 24.9% for 2021.
|
Adjusted EBITDA was $219 million, a 4% decrease compared to
the prior year quarter. Interest expense was $45 million, a
29% increase compared to the prior year quarter, driven by the
issuances of senior notes due 2026 and 2029. Capital expenditures
were $81 million, a 120% increase compared to the prior year
quarter as Antero Midstream continued construction on growth
projects supporting the drilling partnership. Free Cash Flow
before dividends was $94 million, a 40% decrease compared to
the prior year quarter driven primarily by higher capital
expenditures during the quarter. Free Cash Flow after dividends was
a $13 million deficit compared to $11 million in the
prior year quarter.
The following table reconciles Net Income to Adjusted EBITDA and
Free Cash Flow before and after dividends (in thousands):
|
|
Three Months
Ended September
30,
|
|
|
|
2020
|
|
|
2021
|
|
Net
Income
|
|
$
|
105,507
|
|
|
89,327
|
|
Interest expense,
net
|
|
|
34,501
|
|
|
44,544
|
|
Provision for income
tax expense
|
|
|
34,982
|
|
|
32,038
|
|
Amortization of
customer relationships
|
|
|
17,800
|
|
|
17,668
|
|
Depreciation
expense
|
|
|
26,801
|
|
|
27,487
|
|
Impairment
expense
|
|
|
947
|
|
|
203
|
|
Accretion of asset
retirement obligations
|
|
|
39
|
|
|
114
|
|
Equity-based
compensation
|
|
|
3,678
|
|
|
3,255
|
|
Equity in earnings of
unconsolidated affiliates
|
|
|
(23,173)
|
|
|
(24,088)
|
|
Distributions from
unconsolidated affiliates
|
|
|
27,485
|
|
|
28,930
|
|
Adjusted
EBITDA
|
|
$
|
228,567
|
|
|
219,478
|
|
Interest
expense
|
|
|
(34,501)
|
|
|
(44,544)
|
|
Total capital
expenditures (accrual-based)
|
|
|
(36,808)
|
|
|
(80,873)
|
|
Free Cash Flow
before dividends
|
|
$
|
157,258
|
|
|
94,061
|
|
Dividends declared
(accrual-based)
|
|
|
(146,566)
|
|
|
(107,436)
|
|
Free Cash Flow
after dividends
|
|
$
|
10,692
|
|
|
(13,375)
|
|
The following table reconciles net cash provided by operating
activities to Free Cash Flow before and after dividends (in
thousands):
|
|
Three Months
Ended September
30,
|
|
|
|
2020
|
|
|
2021
|
|
Net cash provided
by operating activities
|
|
$
|
158,476
|
|
|
185,115
|
|
Amortization of
deferred financing costs
|
|
|
(1,109)
|
|
|
(1,419)
|
|
Settlement of asset
retirement obligations
|
|
|
916
|
|
|
212
|
|
Changes in working
capital
|
|
|
35,783
|
|
|
(8,974)
|
|
Total capital
expenditures (accrual-based)
|
|
|
(36,808)
|
|
|
(80,873)
|
|
Free Cash Flow
before dividends
|
|
$
|
157,258
|
|
|
94,061
|
|
Dividends declared
(accrual-based)
|
|
|
(146,566)
|
|
|
(107,436)
|
|
Free Cash Flow
after dividends
|
|
$
|
10,692
|
|
|
(13,375)
|
|
Third Quarter 2021 Operating Update
Gathering and Processing — During the third
quarter of 2021, Antero Midstream connected 18 wells to its
gathering system. The Company's 3.2 Bcf/d of compression capacity
was approximately 86% utilized during the quarter. During the third
quarter the Joint Venture placed in-service the Smithburg 1
processing plant, which added 200 MMcf/d of incremental processing
capacity. This expansion of processing capacity brings the Joint
Venture's total processing capacity to 1.6 Bcf/d. Joint
Venture processing capacity was approximately 96% utilized and
Joint Venture fractionation capacity was 93% utilized during the
quarter.
Water Handling— Antero Midstream's water
delivery systems serviced 18 well completions during the third
quarter of 2021, a 14% decrease from the prior year quarter, driven
by a reduction in completion activity by Antero Resources year over
year.
Credit Facility Extension, Balance Sheet and
Liquidity
On October 26th, 2021,
Antero Midstream extended its bank credit facility from 2022 to
2026 and elected to reduce its commitments from $2.13 billion to $1.25
billion. As of September 30,
2021, Antero Midstream had approximately $521 million drawn on its bank credit facility
and over $700 million of pro form
available borrowing capacity. Antero Midstream's Net Debt to
trailing twelve months Adjusted EBITDA ("Leverage") was 3.6x as of
September 30, 2021.
Brendan Krueger, CFO of Antero
Midstream, said, "Antero Midstream continued to enhance its
financial flexibility by extending its bank credit facility from
2022 to 2026, resulting in no senior note or bank debt maturities
until 2026 and beyond. In addition, we elected to reduce our
commitments from $2.13 billion to
$1.25 billion, which reflects the
Company's strong liquidity position today and visibility into our
long-term plan focused on generating free cash flow after dividends
and further reducing absolute debt and leverage."
Capital Investments
Total accrued capital expenditures including investments in the
Joint Venture were $81 million during the third quarter of
2021. Gathering, compression, and water infrastructure capital
investments totaled $80 million and investments in
unconsolidated affiliates for the Joint Venture were
$1 million. Of the $80 million invested in gathering,
compression, and water infrastructure, $69 million was in
gathering and compression assets and $11 million was in water
handling assets.
Conference Call
A conference call for Antero Midstream is scheduled on
Thursday, October 28, 2021 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 at
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, November 4,
2021 at 10:00 am MT at
877-660-6853 (U.S.) or 201-612-7415 (International) using the
conference ID: 13720354. 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 until Thursday,
November 4, 2021 at 10:00 am
MT.
2020 ESG Report
On October 5, 2021, Antero
Midstream published its 2020 ESG Report highlighting its focus on
People, Performance and Purpose. The report details Antero
Midstream's ongoing commitment to the communities in which it
operates, safe operations, environmental excellence and strong
governance. The full report is available at
www.anteromidstream.com
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 relationships and impairment expense, net
of tax effect of reconciling items. Antero Midstream uses Adjusted
Net Income to assess the operating performance of its assets.
Antero Midstream defines Adjusted EBITDA as net income plus
interest expense, provision for income tax expense, amortization of
customer relationships, depreciation expense, impairment expense,
accretion, equity-based compensation expense, excluding equity in
earnings of unconsolidated affiliates, plus 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 before dividends as
Adjusted EBITDA less interest expense and accrued capital
expenditures. Free Cash Flow after dividends is defined as Free
Cash Flow before dividends less dividends declared for the quarter.
Antero Midstream uses Free Cash Flow before and after dividends as
a performance metric to compare the cash generating performance of
Antero Midstream from period to period.
Adjusted EBITDA, Adjusted Net Income, and Free Cash Flow before
and after dividends are non-GAAP financial measures. The GAAP
measure most directly comparable to Adjusted EBITDA and Adjusted
Net Income is Net Income. The GAAP measure most directly comparable
to Free Cash Flow before and after dividends is cash flows provided
by (used in) operating activities. Such non-GAAP financial
measures should not be considered as alternatives to the GAAP
measures of Net Income and cash flows provided by (used in)
operating activities. 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 cash flows provided by (used in) operating
activities. 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.
The following table reconciles cash paid for capital
expenditures and accrued capital expenditures during the period (in
thousands):
|
|
Three Months
Ended September 30,
|
|
|
|
2020
|
|
|
2021
|
Capital
expenditures (as reported on a cash basis)
|
|
$
|
(44,665)
|
|
|
(83,687)
|
Change in accrued
capital costs
|
|
|
(7,857)
|
|
|
(2,814)
|
Capital
expenditures (accrual basis)
|
|
$
|
(36,808)
|
|
|
(80,873)
|
The following table reconciles consolidated total debt to
consolidated net debt, excluding debt premiums and issuance costs,
("Net Debt") as used in this release (in thousands):
|
|
June
30, 2021
|
|
September
30, 2021
|
Bank credit
facility
|
|
$
|
513,700
|
|
520,700
|
7.875% senior notes
due 2026
|
|
|
550,000
|
|
550,000
|
5.75% senior notes due
2027
|
|
|
650,000
|
|
650,000
|
5.75% senior notes due
2028
|
|
|
650,000
|
|
650,000
|
5.375% senior notes
due 2029
|
|
|
750,000
|
|
750,000
|
Consolidated total
debt
|
|
|
3,113,700
|
|
3,120,700
|
Cash and cash
equivalents
|
|
|
(678)
|
|
—
|
Consolidated net
debt
|
|
$
|
3,113,022
|
|
3,120,700
|
The following table reconciles net income to Adjusted EBITDA for
the last twelve months as used in this release (in thousands):
|
|
12 months
ended June 30,
2021
|
|
12 months
ended September 30,
2021
|
Net
Income
|
|
$
|
345,629
|
|
329,449
|
Interest expense,
net
|
|
|
160,436
|
|
170,479
|
Provision for income
tax expense
|
|
|
113,685
|
|
110,741
|
Amortization of
customer relationships
|
|
|
70,797
|
|
70,665
|
Depreciation
expense
|
|
|
107,171
|
|
107,857
|
Impairment
expense
|
|
|
10,475
|
|
9,731
|
Accretion of asset
retirement obligations
|
|
|
310
|
|
385
|
Equity-based
compensation
|
|
|
13,814
|
|
13,391
|
Equity in earnings of
unconsolidated affiliates
|
|
|
(88,665)
|
|
(89,580)
|
Distributions from
unconsolidated affiliates
|
|
|
115,215
|
|
116,660
|
Loss on asset
sale
|
|
|
6,317
|
|
6,317
|
Loss on early
extinguishment of debt
|
|
|
20,701
|
|
20,701
|
Adjusted
EBITDA
|
$
|
$
|
875,885
|
|
866,796
|
Antero Midstream Corporation is a Delaware corporation that owns, operates and
develops midstream gathering, compression, processing and
fractionation assets located in the Appalachian Basin, as well as
integrated water assets that primarily service Antero Resources
Corporation's properties.
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 statements regarding Antero Midstream's
ability to execute its business plan and return capital to its
stockholders, information regarding Antero Midstream's return of
capital policy, information regarding long-term financial and
operating outlooks for Antero Midstream and Antero Resources,
information regarding Antero Resources' expected future growth and
its ability to meet its drilling and development plan and
the participation level of Antero Resources' drilling partner and
the impact on demand for Antero Midstream's services as a result of
incremental production by Antero Resources, 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.
In addition, many of the standards and metrics used in
preparing this release and the ESG Report continue to evolve and
are based on management expectations and assumptions believed to be
reasonable at the time of preparation but should not be considered
guarantees. The standards and metrics used, and the expectations
and assumptions they are based on, have not been verified by any
third party. In addition, while we seek to align these disclosures
with the recommendations of various third-party frameworks, such as
the Task Force on Climate-Related Financial Disclosures, we cannot
guarantee strict adherence to these framework recommendations.
Additionally, our disclosures based on these frameworks may change
due to revisions in framework requirements, availability of
information, changes in our business or applicable governmental
policy, or other factors, some of which may be beyond our
control. With respect to its pipeline emissions goal, Antero
Midstream anticipates achieving a 100% reduction in pipeline
emissions by 2025 through operational efficiencies and the purchase
of carbon offsets.
Antero Midstream cautions you that these forward-looking
statements are subject to all of the risks and uncertainties
incident to our business, 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, environmental risks, Antero Resources' drilling and
completion and other operating risks, regulatory changes, the
uncertainty inherent in projecting Antero Resources' future rates
of production, cash flows and access to capital, the timing of
development expenditures, impacts of world health events, including
the COVID-19 pandemic, cybersecurity risk, 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, 2020.
This release and the ESG Report contain statements based on
hypothetical or severely adverse scenarios and assumptions, and
these statements should not necessarily be viewed as being
representative of current or actual risk or forecasts of expected
risk. While future events discussed in this release or the report
may be significant, any significance should not be read as
necessarily rising to the level of materiality of certain
disclosures included in Antero Midstream's SEC filings. These
scenarios cannot account for the entire realm of possible risks and
have been selected based on what we believe to be a reasonable
range of possible circumstances based on information currently
available to us and the reasonableness of assumptions inherent in
certain scenarios; however, our selection of scenarios may change
over time as circumstances change.
ANTERO MIDSTREAM
CORPORATION
|
Condensed
Consolidated Balance Sheets
|
(In
thousands)
|
|
|
|
|
|
(Unaudited)
|
|
|
|
December 31,
|
|
September 30,
|
|
|
|
2020
|
|
2021
|
|
Assets
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
640
|
|
|
—
|
|
Accounts
receivable–Antero Resources
|
|
|
73,722
|
|
|
85,152
|
|
Accounts
receivable–third party
|
|
|
839
|
|
|
857
|
|
Income tax
receivable
|
|
|
17,251
|
|
|
940
|
|
Other current
assets
|
|
|
1,479
|
|
|
541
|
|
Total current
assets
|
|
|
93,931
|
|
|
87,490
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
|
3,254,044
|
|
|
3,345,843
|
|
Investments in
unconsolidated affiliates
|
|
|
722,478
|
|
|
703,780
|
|
Deferred tax
asset
|
|
|
103,402
|
|
|
14,855
|
|
Customer
relationships
|
|
|
1,427,447
|
|
|
1,374,443
|
|
Other assets,
net
|
|
|
9,610
|
|
|
7,222
|
|
Total
assets
|
|
$
|
5,610,912
|
|
|
5,533,633
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable–Antero Resources
|
|
$
|
3,862
|
|
|
3,157
|
|
Accounts payable–third
party
|
|
|
9,495
|
|
|
24,944
|
|
Accrued
liabilities
|
|
|
74,947
|
|
|
85,576
|
|
Other current
liabilities
|
|
|
5,701
|
|
|
5,013
|
|
Total current
liabilities
|
|
|
94,005
|
|
|
118,690
|
|
Long-term
liabilities:
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
3,091,626
|
|
|
3,095,560
|
|
Other
|
|
|
6,995
|
|
|
6,790
|
|
Total
liabilities
|
|
|
3,192,626
|
|
|
3,221,040
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
|
|
|
Preferred stock, $0.01
par value: 100,000 authorized as of December 31, 2020 and September
30, 2021
|
|
|
|
|
|
|
|
Series A non-voting
perpetual preferred stock; 12 designated and 10 issued and
outstanding as of December 31, 2020 and September 30,
2021
|
|
|
—
|
|
|
—
|
|
Common stock, $0.01
par value; 2,000,000 authorized; 476,639 and 477,460 issued and
outstanding as of December 31, 2020 and September 30, 2021,
respectively
|
|
|
4,766
|
|
|
4,775
|
|
Additional paid-in
capital
|
|
|
2,877,612
|
|
|
2,518,919
|
|
Accumulated
deficit
|
|
|
(464,092)
|
|
|
(211,101)
|
|
Total stockholders'
equity
|
|
|
2,418,286
|
|
|
2,312,593
|
|
Total liabilities and
stockholders' equity
|
|
$
|
5,610,912
|
|
|
5,533,633
|
|
ANTERO MIDSTREAM
CORPORATION
|
Condensed
Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
|
(In thousands, except
per share amounts)
|
|
|
|
Three Months Ended
September 30,
|
|
|
|
2020
|
|
2021
|
|
Revenue:
|
|
|
|
|
|
|
|
Gathering and
compression–Antero Resources
|
|
$
|
190,214
|
|
|
188,716
|
|
Water handling–Antero
Resources
|
|
|
61,001
|
|
|
53,511
|
|
Water handling–third
party
|
|
|
—
|
|
|
245
|
|
Amortization of
customer relationships
|
|
|
(17,800)
|
|
|
(17,668)
|
|
Total
revenue
|
|
|
233,415
|
|
|
224,804
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Direct
operating
|
|
|
38,052
|
|
|
39,499
|
|
General and
administrative (including $3,678 and $3,255 of equity-based
compensation in 2020 and 2021, respectively)
|
|
|
13,232
|
|
|
14,810
|
|
Facility
idling
|
|
|
2,527
|
|
|
870
|
|
Impairment of property
and equipment
|
|
|
947
|
|
|
203
|
|
Depreciation
|
|
|
26,801
|
|
|
27,487
|
|
Accretion of asset
retirement obligations
|
|
|
39
|
|
|
114
|
|
Total operating
expenses
|
|
|
81,598
|
|
|
82,983
|
|
Operating
income
|
|
|
151,817
|
|
|
141,821
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(34,501)
|
|
|
(44,544)
|
|
Equity in earnings of
unconsolidated affiliates
|
|
|
23,173
|
|
|
24,088
|
|
Total other
expense
|
|
|
(11,328)
|
|
|
(20,456)
|
|
Income before income
taxes
|
|
|
140,489
|
|
|
121,365
|
|
Provision for income
tax expense
|
|
|
(34,982)
|
|
|
(32,038)
|
|
Net income and
comprehensive income
|
|
$
|
105,507
|
|
|
89,327
|
|
|
|
|
|
|
|
|
|
Net income per
share–basic
|
|
$
|
0.22
|
|
|
0.19
|
|
Net income per
share–diluted
|
|
$
|
0.22
|
|
|
0.19
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
|
|
476,578
|
|
|
477,442
|
|
Diluted
|
|
|
478,694
|
|
|
479,695
|
|
ANTERO MIDSTREAM
CORPORATION
|
Selected Operating
Data (Unaudited)
|
|
|
|
Three Months
Ended
|
|
Amount
of
|
|
|
|
|
|
|
September 30,
|
|
Increase
|
|
Percentage
|
|
|
2020
|
|
2021
|
|
or
Decrease
|
|
Change
|
Operating
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gathering—low pressure
(MMcf)
|
|
|
280,688
|
|
|
264,999
|
|
|
(15,689)
|
|
|
(6)
|
%
|
Gathering—high
pressure (MMcf)
|
|
|
276,699
|
|
|
258,585
|
|
|
(18,114)
|
|
|
(7)
|
%
|
Compression
(MMcf)
|
|
|
259,523
|
|
|
251,555
|
|
|
(7,968)
|
|
|
(3)
|
%
|
Fresh water delivery
(MBbl)
|
|
|
10,202
|
|
|
8,335
|
|
|
(1,867)
|
|
|
(18)
|
%
|
Other fluid handling
(MBbl)
|
|
|
5,151
|
|
|
4,325
|
|
|
(826)
|
|
|
(16)
|
%
|
Wells serviced by
fresh water delivery
|
|
|
21
|
|
|
18
|
|
|
(3)
|
|
|
(14)
|
%
|
Gathering—low pressure
(MMcf/d)
|
|
|
3,051
|
|
|
2,880
|
|
|
(171)
|
|
|
(6)
|
%
|
Gathering—high
pressure (MMcf/d)
|
|
|
3,008
|
|
|
2,811
|
|
|
(197)
|
|
|
(7)
|
%
|
Compression
(MMcf/d)
|
|
|
2,821
|
|
|
2,734
|
|
|
(87)
|
|
|
(3)
|
%
|
Fresh water delivery
(MBbl/d)
|
|
|
111
|
|
|
91
|
|
|
(20)
|
|
|
(18)
|
%
|
Other fluid handling
(MBbl/d)
|
|
|
56
|
|
|
47
|
|
|
(9)
|
|
|
(16)
|
%
|
Average Realized
Fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average gathering—low
pressure fee ($/Mcf)
|
|
$
|
0.33
|
|
|
0.33
|
|
|
—
|
|
|
*
|
|
Average gathering—high
pressure fee ($/Mcf)
|
|
$
|
0.21
|
|
|
0.20
|
|
|
(0.01)
|
|
|
(5)
|
%
|
Average compression
fee ($/Mcf)
|
|
$
|
0.20
|
|
|
0.20
|
|
|
—
|
|
|
*
|
|
Average fresh water
delivery fee ($/Bbl)
|
|
$
|
3.96
|
|
|
3.96
|
|
|
—
|
|
|
*
|
|
Joint Venture
Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Processing—Joint
Venture (MMcf)
|
|
|
136,555
|
|
|
141,580
|
|
|
5,025
|
|
|
4
|
%
|
Fractionation—Joint
Venture (MBbl)
|
|
|
3,552
|
|
|
3,408
|
|
|
(144)
|
|
|
(4)
|
%
|
Processing—Joint
Venture (MMcf/d)
|
|
|
1,484
|
|
|
1,539
|
|
|
55
|
|
|
4
|
%
|
Fractionation—Joint
Venture (MBbl/d)
|
|
|
39
|
|
|
37
|
|
|
(2)
|
|
|
(5)
|
%
|
|
|
*
|
Not meaningful or
applicable
|
ANTERO MIDSTREAM
CORPORATION
|
Condensed
Consolidated Results of Segment Operations (Unaudited)
|
|
|
|
Three Months Ended
September 30, 2021
|
|
|
|
Gathering and
|
|
Water
|
|
|
|
Consolidated
|
|
(in
thousands)
|
|
Processing
|
|
Handling
|
|
Unallocated
(1)
|
|
Total
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue–Antero
Resources
|
|
$
|
188,716
|
|
|
53,511
|
|
|
—
|
|
|
242,227
|
|
Revenue–third-party
|
|
|
—
|
|
|
245
|
|
|
—
|
|
|
245
|
|
Amortization of
customer relationships
|
|
|
(9,271)
|
|
|
(8,397)
|
|
|
—
|
|
|
(17,668)
|
|
Total
revenues
|
|
|
179,445
|
|
|
45,359
|
|
|
—
|
|
|
224,804
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
operating
|
|
|
16,161
|
|
|
23,338
|
|
|
—
|
|
|
39,499
|
|
General and
administrative (excluding equity-based compensation)
|
|
|
6,533
|
|
|
4,069
|
|
|
953
|
|
|
11,555
|
|
Equity-based
compensation
|
|
|
2,543
|
|
|
485
|
|
|
227
|
|
|
3,255
|
|
Facility
idling
|
|
|
—
|
|
|
870
|
|
|
—
|
|
|
870
|
|
Impairment of property
and equipment
|
|
|
—
|
|
|
203
|
|
|
—
|
|
|
203
|
|
Depreciation
|
|
|
15,151
|
|
|
12,336
|
|
|
—
|
|
|
27,487
|
|
Accretion of asset
retirement obligations
|
|
|
—
|
|
|
114
|
|
|
—
|
|
|
114
|
|
Total operating
expenses
|
|
|
40,388
|
|
|
41,415
|
|
|
1,180
|
|
|
82,983
|
|
Operating
income
|
|
|
139,057
|
|
|
3,944
|
|
|
(1,180)
|
|
|
141,821
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
—
|
|
|
—
|
|
|
(44,544)
|
|
|
(44,544)
|
|
Equity in earnings of
unconsolidated affiliates
|
|
|
24,088
|
|
|
—
|
|
|
—
|
|
|
24,088
|
|
Total other income
(expense)
|
|
|
24,088
|
|
|
—
|
|
|
(44,544)
|
|
|
(20,456)
|
|
Income before income
taxes
|
|
|
163,145
|
|
|
3,944
|
|
|
(45,724)
|
|
|
121,365
|
|
Provision for income
tax expense
|
|
|
—
|
|
|
—
|
|
|
(32,038)
|
|
|
(32,038)
|
|
Net income and
comprehensive income
|
|
$
|
163,145
|
|
|
3,944
|
|
|
(77,762)
|
|
|
89,327
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
$
|
219,478
|
|
|
|
(1)
|
Corporate expenses
that are not directly attributable to either the gathering and
processing or water handling segments.
|
ANTERO MIDSTREAM
CORPORATION
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
(In
thousands)
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2020
|
|
2021
|
|
Cash flows provided
by (used in) operating activities:
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
(198,985)
|
|
|
252,991
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation
|
|
|
81,889
|
|
|
80,956
|
|
Payment of contingent
consideration in excess of acquisition date fair value
|
|
|
(8,076)
|
|
|
—
|
|
Accretion of asset
retirement obligations
|
|
|
142
|
|
|
347
|
|
Impairment
|
|
|
665,491
|
|
|
1,582
|
|
Deferred income tax
expense (benefit)
|
|
|
(21,425)
|
|
|
88,547
|
|
Equity-based
compensation
|
|
|
9,713
|
|
|
10,326
|
|
Equity in earnings of
unconsolidated affiliates
|
|
|
(63,197)
|
|
|
(66,347)
|
|
Distributions from
unconsolidated affiliates
|
|
|
69,313
|
|
|
87,115
|
|
Amortization of
customer relationships
|
|
|
53,011
|
|
|
53,004
|
|
Amortization of
deferred financing costs
|
|
|
3,299
|
|
|
4,152
|
|
Loss on early
extinguishment of debt
|
|
|
—
|
|
|
20,701
|
|
Settlement of asset
retirement obligations
|
|
|
(1,517)
|
|
|
(814)
|
|
Loss on asset
sale
|
|
|
240
|
|
|
3,628
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable–Antero Resources
|
|
|
17,081
|
|
|
(11,429)
|
|
Accounts
receivable–third party
|
|
|
1,139
|
|
|
594
|
|
Income tax
receivable
|
|
|
(17,547)
|
|
|
16,311
|
|
Other current
assets
|
|
|
1,036
|
|
|
810
|
|
Accounts
payable–Antero Resources
|
|
|
(717)
|
|
|
(705)
|
|
Accounts payable–third
party
|
|
|
6,239
|
|
|
11,058
|
|
Accrued
liabilities
|
|
|
(50,240)
|
|
|
(7,337)
|
|
Net cash provided by
operating activities
|
|
|
546,889
|
|
|
545,490
|
|
Cash flows provided
by (used in) investing activities:
|
|
|
|
|
|
|
|
Additions to gathering
systems and facilities
|
|
|
(137,978)
|
|
|
(120,727)
|
|
Additions to water
handling systems
|
|
|
(27,287)
|
|
|
(36,221)
|
|
Investments in
unconsolidated affiliates
|
|
|
(24,802)
|
|
|
(2,070)
|
|
Cash received in asset
sale
|
|
|
123
|
|
|
1,653
|
|
Change in other
assets
|
|
|
1,938
|
|
|
—
|
|
Net cash used in
investing activities
|
|
|
(188,006)
|
|
|
(157,365)
|
|
Cash flows provided
by (used in) financing activities:
|
|
|
|
|
|
|
|
Dividends to
stockholders
|
|
|
(443,059)
|
|
|
(363,712)
|
|
Dividends to preferred
stockholders
|
|
|
(413)
|
|
|
(413)
|
|
Repurchases of common
stock
|
|
|
(24,713)
|
|
|
—
|
|
Issuance of senior
notes
|
|
|
—
|
|
|
750,000
|
|
Redemption of senior
notes
|
|
|
—
|
|
|
(667,472)
|
|
Payments of deferred
financing costs
|
|
|
—
|
|
|
(9,449)
|
|
Borrowings
(repayments) on bank credit facilities, net
|
|
|
228,000
|
|
|
(92,800)
|
|
Payment of contingent
acquisition consideration
|
|
|
(116,924)
|
|
|
—
|
|
Employee tax
withholding for settlement of equity compensation awards
|
|
|
(466)
|
|
|
(4,885)
|
|
Other
|
|
|
(150)
|
|
|
(34)
|
|
Net cash used in
financing activities
|
|
|
(357,725)
|
|
|
(388,765)
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
|
1,158
|
|
|
(640)
|
|
Cash and cash
equivalents, beginning of period
|
|
|
1,235
|
|
|
640
|
|
Cash and cash
equivalents, end of period
|
|
$
|
2,393
|
|
|
—
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
|
|
|
Cash paid during the
period for interest
|
|
$
|
135,426
|
|
|
132,630
|
|
Cash received during
the period for income taxes
|
|
$
|
38,910
|
|
|
16,913
|
|
Increase (decrease) in
accrued capital expenditures and accounts payable for property and
equipment
|
|
$
|
(11,318)
|
|
|
22,675
|
|
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SOURCE Antero Midstream Corporation