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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report (Date of earliest event reported):
July 26, 2023
ANTERO MIDSTREAM CORPORATION
(Exact name of registrant as specified in
its charter)
Delaware |
|
001-38075 |
|
61-1748605 |
(State
or Other Jurisdiction
of Incorporation) |
|
(Commission File Number) |
|
(IRS Employer Identification Number) |
1615 Wynkoop Street
Denver, Colorado 80202
(Address of Principal Executive Offices)
(Zip Code)
Registrants Telephone Number, Including
Area Code (303) 357-7310
Check the appropriate box below if the Form 8-K filing
is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of
the Act:
Title
of each class |
|
Trading
symbol(s) |
|
Name
of each exchange on which
registered |
Common Stock, par value $0.01 Per Share |
|
AM |
|
New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging
growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of
the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth
company ¨
If an emerging
growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with
any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02 |
Results of Operations and Financial Condition |
On July 26,
2023, Antero Midstream Corporation issued a press release, a copy of which is attached hereto as Exhibit 99.1 and incorporated by
reference herein, announcing its financial and operational results for the quarter ended June 30, 2023.
The information
in this Current Report, including Exhibit 99.1, is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed
“filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
or otherwise subject to liabilities of that section, and is not incorporated by reference into any filing under the Securities Act of
1933, as amended, or the Exchange Act unless specifically identified therein as being incorporated therein by reference.
Item 9.01 |
Financial Statements and Exhibits. |
(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ANTERO MIDSTREAM CORPORATION |
| | |
| | |
| By: | /s/
Brendan E. Krueger |
| | Brendan E. Krueger |
| | Chief Financial
Officer, Vice President –Finance and Treasurer |
Dated: July 26, 2023
Exhibit 99.1
Antero Midstream Announces Second Quarter 2023
Financial and Operational Results
Denver,
Colorado, July 26, 2023—Antero Midstream Corporation (NYSE: AM) (“Antero Midstream” or the “Company”)
today announced its second quarter 2023 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 June 30, 2023.
Second Quarter 2023 Highlights:
| · | Gathering and compression volumes increased by 11% and 17%, respectively, compared to the prior year
quarter |
| · | Net Income was $87 million, or $0.18 per diluted share, a 6% per share increase compared to the prior
year quarter |
| · | Adjusted Net Income was $105 million, or $0.22 per diluted share, a 10% per share increase compared
to the prior year quarter (non-GAAP measure) |
| · | Adjusted EBITDA was $243 million, a 10% increase compared to the prior year quarter (non-GAAP measure) |
| · | Capital expenditures were $49 million, a 31% decrease compared to the prior year quarter |
| · | Free Cash Flow before dividends was $139 million, a 31% increase compared to the prior year quarter
(non-GAAP measure) |
| · | Free Cash Flow after dividends was $31 million compared to a $2 million deficit in the prior year quarter
(non-GAAP measure) |
Paul Rady, Chairman and CEO said, “Antero
Midstream delivered another strong quarter operationally and financially, driven by double-digit year-over-year throughput growth. This
resulted in 10% year-over-year Adjusted EBITDA growth, and more importantly, our fourth straight quarter of generating Free Cash Flow
after dividends.”
Brendan
Krueger, CFO of Antero Midstream, said “Year-to-date Antero Midstream has executed on its strategy to pay down absolute debt
and reduce leverage to 3.5x at the end of the second quarter. These second quarter results position us well to achieve our 2023 guidance
and continue our progress towards our leverage target of 3.0x or less in 2024.”
For
a discussion of the non-GAAP financial measures, including Adjusted EBITDA, Adjusted Net Income, Leverage, and Free Cash Flow before and
after dividends please see “Non-GAAP Financial Measures.”
Second Quarter 2023 Financial Results
Low
pressure gathering volumes for the second quarter of 2023 averaged 3,304 MMcf/d, an 11% increase as compared to the prior year
quarter. Low pressure gathering volumes subject to the growth incentive fee were in excess of the threshold target of 2,900 MMcf/d, resulting
in a $12 million rebate to Antero Resources. Compression volumes for the second quarter of 2023 averaged 3,251 MMcf/d, a 17% increase
compared to the prior year quarter. High pressure gathering volumes averaged 2,922 MMcf/d, a 4% increase compared to the prior year quarter.
Fresh water delivery volumes averaged 105 MBbl/d during the quarter, a 5% decrease compared to the second quarter of 2022.
Gross
processing volumes from the processing and fractionation joint venture with MLPX, LP (“Joint Venture”) averaged 1,600
MMcf/d for the second quarter of 2023, a 10% increase compared to the prior year quarter. Joint Venture processing capacity was 100% utilized
during the quarter based on nameplate processing capacity of 1.6 Bcf/d. Gross Joint Venture fractionation volumes averaged 39 MBbl/d,
a 5% increase compared to the prior year quarter. Joint Venture fractionation capacity was 98% utilized during the quarter based on nameplate
fractionation capacity of 40 MBbl/d.
| |
Three Months Ended June 30, | | |
| |
Average Daily Volumes: | |
2022 | | |
2023 | | |
%
Change | |
Low Pressure Gathering (MMcf/d) | |
| 2,970 | | |
| 3,304 | | |
| 11 | % |
Compression (MMcf/d) | |
| 2,776 | | |
| 3,251 | | |
| 17 | % |
High Pressure Gathering (MMcf/d) | |
| 2,819 | | |
| 2,922 | | |
| 4 | % |
Fresh Water Delivery (MBbl/d) | |
| 110 | | |
| 105 | | |
| (5 | )% |
Gross Joint Venture Processing (MMcf/d) | |
| 1,458 | | |
| 1,600 | | |
| 10 | % |
Gross Joint Venture Fractionation (MBbl/d) | |
| 37 | | |
| 39 | | |
| 5 | % |
For
the three months ended June 30, 2023, revenues were $258 million, comprised of $202 million from the Gathering and Processing
segment and $56 million from the Water Handling segment, net of $18 million of amortization of customer relationships. Water Handling
revenues include $24 million from wastewater handling and high rate water transfer services.
Direct
operating expenses for the Gathering and Processing and Water Handling segments were $25 million and $28 million, respectively.
Water Handling operating expenses include $23 million from wastewater handling and high rate water transfer services. General and administrative
expenses excluding equity-based compensation were $10 million during the second quarter of 2023. Total operating expenses during the second
quarter of 2023 included $35 million of depreciation, $8 million of equity-based compensation expense, and a $6 million loss on asset
sale.
Net
Income was $87 million, or $0.18 per diluted share, a 6% per share increase compared to the prior year quarter. Net Income adjusted
for amortization of customer relationships, impairment of property and equipment, loss on settlement of asset retirement obligations and
loss (gain) on asset sale, net of tax effects of reconciling items, or Adjusted Net Income, was $105 million. Adjusted Net Income was
$0.22 per share, a 10% per share increase compared to the prior year quarter.
The following table reconciles Net Income to Adjusted
Net Income (in thousands):
| |
Three Months Ended June 30, | |
| |
2022 | | |
2023 | |
Net Income | |
$ | 79,395 | | |
| 87,012 | |
Amortization of customer relationships | |
| 17,668 | | |
| 17,668 | |
Impairment of property and equipment | |
| 3,702 | | |
| — | |
Loss on settlement of asset retirement obligations | |
| 539 | | |
| 279 | |
Loss (gain) on asset sale | |
| (32 | ) | |
| 5,814 | |
Tax effect of reconciling items(1) | |
| (5,636 | ) | |
| (6,109 | ) |
Adjusted Net Income | |
$ | 95,636 | | |
| 104,664 | |
(1) | The statutory tax rates for the three months ended June 30, 2022 and 2023 were 25.8% and 25.7%, respectively. |
Adjusted
EBITDA was $243 million, a 10% increase compared to the prior year quarter. Interest expense was $55 million, a 22% increase compared
to the prior year quarter. Capital expenditures were $49 million, a 31% decrease compared to the prior year quarter. Free Cash Flow before
dividends was $139 million, a 31% increase compared to the prior year quarter. Free Cash Flow after dividends was $31 million compared
to a $2 million deficit 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 June 30, | |
| |
2022 | | |
2023 | |
Net Income | |
$ | 79,395 | | |
| 87,012 | |
Interest expense, net | |
| 45,426 | | |
| 55,388 | |
Income tax expense | |
| 26,399 | | |
| 29,095 | |
Depreciation expense | |
| 35,675 | | |
| 35,233 | |
Amortization of customer relationships | |
| 17,668 | | |
| 17,668 | |
Impairment of property and equipment | |
| 3,702 | | |
| — | |
Loss (gain) on asset sale | |
| (32 | ) | |
| 5,814 | |
Accretion of asset retirement obligations | |
| 64 | | |
| 44 | |
Loss on settlement of asset retirement obligations | |
| 539 | | |
| 279 | |
Equity-based compensation | |
| 5,641 | | |
| 8,499 | |
Equity in earnings of unconsolidated affiliates | |
| (22,824 | ) | |
| (25,972 | ) |
Distributions from unconsolidated affiliates | |
| 29,375 | | |
| 29,465 | |
Adjusted EBITDA | |
$ | 221,028 | | |
| 242,525 | |
Interest expense, net | |
| (45,426 | ) | |
| (55,388 | ) |
Capital expenditures (accrual-based) | |
| (70,201 | ) | |
| (48,584 | ) |
Free Cash Flow before dividends | |
$ | 105,401 | | |
| 138,553 | |
Dividends declared (accrual-based) | |
| (107,654 | ) | |
| (107,927 | ) |
Free Cash Flow after dividends | |
$ | (2,253 | ) | |
| 30,626 | |
The following table reconciles net cash provided by operating activities
to Free Cash Flow before and after dividends (in thousands):
| |
Three Months Ended June 30, | |
| |
2022 | | |
2023 | |
Net cash provided by operating activities | |
$ | 169,517 | | |
| 185,586 | |
Amortization of deferred financing costs | |
| (1,418 | ) | |
| (1,483 | ) |
Settlement of asset retirement obligations | |
| 461 | | |
| 537 | |
Changes in working capital | |
| 7,042 | | |
| 2,497 | |
Capital expenditures (accrual-based) | |
| (70,201 | ) | |
| (48,584 | ) |
Free Cash Flow before dividends | |
$ | 105,401 | | |
| 138,553 | |
Dividends declared (accrual-based) | |
| (107,654 | ) | |
| (107,927 | ) |
Free Cash Flow after dividends | |
$ | (2,253 | ) | |
| 30,626 | |
Second Quarter 2023 Operating Update
Gathering
and Processing — During the second quarter of 2023, Antero Midstream connected 26 wells to its gathering system.
Water
Handling— Antero Midstream’s water delivery systems serviced 23 well completions during the second quarter
of 2023.
Capital Investments
Accrued
capital expenditures were $49 million during the second quarter of 2023. The company invested $35 million in gathering and compression
and $14 million in water infrastructure primarily in the liquids-rich midstream corridor of the Marcellus Shale.
Conference Call
A
conference call is scheduled on Thursday, July 27, 2023 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. 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, August 3, 2023 at 10:00 am MT at 877-660-6853 (U.S.) or 201-612-7415 (International) using the conference ID: 13740087.
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, August 3, 2023 at 10:00 am MT.
Presentation
An updated presentation will be posted to the
Company's website before the conference call. The presentation can be found at www.anteromidstream.com on the homepage. Information on
the Company's website does not constitute a portion of, and is not incorporated by reference into this press release.
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, impairment of property
and equipment, loss on settlement of asset retirement obligations, and loss (gain) on asset sale, 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, net, income tax expense, depreciation expense, impairment of property and equipment, amortization
of customer relationships, loss on settlement of asset retirement obligations, loss (gain) on asset sale, accretion of asset retirement
obligations, and equity-based compensation expense, excluding equity in earnings of unconsolidated affiliates, plus 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, net and accrual-based capital expenditures. Capital expenditures include additions
to gathering systems and facilities, additions to water handling systems, and investments in unconsolidated affiliates. Capital expenditures
exclude acquisitions. Free Cash Flow after dividends is defined as Free Cash Flow before dividends less accrual-based 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 these measures is Net
Income. 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.
The following table reconciles cash paid for capital expenditures and
accrued capital expenditures during the period (in thousands):
| |
Three Months Ended June 30, | |
| |
2022 | | |
2023 | |
Capital expenditures (as reported on a cash basis) | |
$ | (77,767 | ) | |
| (42,044 | ) |
Change in accrued capital costs | |
| 7,566 | | |
| (6,540 | ) |
Capital expenditures (accrual basis) | |
$ | (70,201 | ) | |
| (48,584 | ) |
Antero Midstream defines Net Debt as consolidated
total debt, excluding unamortized debt premiums and debt issuance costs, less cash and cash equivalents. Antero Midstream views Net Debt
as an important indicator in evaluating Antero Midstream’s financial leverage. Antero Midstream defines leverage as Net Debt divided
by Adjusted EBITDA for the last twelve months. The GAAP measure most directly comparable to Net Debt is total debt, excluding unamortized
debt premiums and debt issuance costs.
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,
2023 | |
Bank credit facility | |
$ | 725,500 | |
7.875% senior notes due 2026 | |
| 550,000 | |
5.75% senior notes due 2027 | |
| 650,000 | |
5.75% senior notes due 2028 | |
| 650,000 | |
5.375% senior notes due 2029 | |
| 750,000 | |
Consolidated total debt | |
$ | 3,325,500 | |
Cash and cash equivalents | |
| — | |
Consolidated net debt | |
$ | 3,325,500 | |
The following table reconciles Net Income to Adjusted EBITDA for the
last twelve months as used in this release (in thousands):
| |
Twelve Months
Ended June 30, 2023 | |
Net Income | |
$ | 340,326 | |
Interest expense, net | |
| 210,255 | |
Income tax expense | |
| 123,793 | |
Depreciation expense | |
| 138,216 | |
Amortization of customer relationships | |
| 70,672 | |
Accretion of asset retirement obligations | |
| 182 | |
Equity-based compensation | |
| 26,007 | |
Equity in earnings of unconsolidated affiliates | |
| (98,590 | ) |
Distributions from unconsolidated affiliates | |
| 123,525 | |
Loss on settlement of asset retirement obligation | |
| 620 | |
Loss on asset sale | |
| 3,468 | |
Adjusted EBITDA | |
$ | 938,474 | |
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 our strategy, future operations, financial position, estimated revenues and losses, projected costs,
prospects, plans and objectives of management, Antero Midstream’s ability to realize the benefits of the Marcellus bolt-on acquisition,
including the anticipated capital avoidance and synergies, 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, the
impact on demand for Antero Midstream’s services as a result of incremental production by Antero Resources, and expectations regarding
the amount and timing of litigation awards 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 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,
supply chain or other disruptions, environmental risks, Antero Resources’ drilling and completion and other operating risks, regulatory
changes or changes in law, 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, cybersecurity risks, the state of markets for and
availability of verified quality carbon offsets 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, 2022 and Quarterly Report on Form 10-Q for the quarter
ended June 30, 2023.
For more information, contact Justin Agnew,
Director – Finance of Antero Midstream, at (303) 357-7269 or jagnew@anteroresources.com.
ANTERO MIDSTREAM CORPORATION
Condensed Consolidated Balance Sheets
(In thousands, except per share
amounts)
| |
| | |
(Unaudited) | |
| |
December 31, | | |
June 30, | |
| |
2022 | | |
2023 | |
Assets |
Current assets: | |
| | | |
| | |
Accounts receivable–Antero Resources | |
$ | 86,152 | | |
| 91,621 | |
Accounts receivable–third party | |
| 575 | | |
| 550 | |
Income tax receivable | |
| 940 | | |
| 940 | |
Other current assets | |
| 1,326 | | |
| 795 | |
Total current assets | |
| 88,993 | | |
| 93,906 | |
| |
| | | |
| | |
Property and equipment, net | |
| 3,751,431 | | |
| 3,756,496 | |
Investments in unconsolidated affiliates | |
| 652,767 | | |
| 639,887 | |
Customer relationships | |
| 1,286,103 | | |
| 1,250,767 | |
Other assets, net | |
| 12,026 | | |
| 11,827 | |
Total assets | |
$ | 5,791,320 | | |
| 5,752,883 | |
| |
| | | |
| | |
Liabilities and Stockholders' Equity |
Current liabilities: | |
| | | |
| | |
Accounts payable–Antero Resources | |
$ | 5,436 | | |
| 2,921 | |
Accounts payable–third party | |
| 22,865 | | |
| 17,947 | |
Accrued liabilities | |
| 72,715 | | |
| 74,924 | |
Other current liabilities | |
| 1,061 | | |
| 817 | |
Total current liabilities | |
| 102,077 | | |
| 96,609 | |
Long-term liabilities: | |
| | | |
| | |
Long-term debt | |
| 3,361,282 | | |
| 3,306,667 | |
Deferred income tax liability | |
| 131,215 | | |
| 191,979 | |
Other | |
| 4,428 | | |
| 4,589 | |
Total liabilities | |
| 3,599,002 | | |
| 3,599,844 | |
| |
| | | |
| | |
Stockholders' equity: | |
| | | |
| | |
Preferred stock, $0.01 par value: 100,000 authorized as of December 31, 2022 and June 30, 2023 | |
| | | |
| | |
Series A non-voting perpetual preferred stock; 12 designated and 10 issued and outstanding as of December 31, 2022 and June 30, 2023 | |
| — | | |
| — | |
Common stock, $0.01 par value; 2,000,000 authorized; 478,497 and 479,656 issued and outstanding as of December 31, 2022 and June 30, 2023, respectively | |
| 4,785 | | |
| 4,797 | |
Additional paid-in capital | |
| 2,104,740 | | |
| 2,061,230 | |
Retained earnings | |
| 82,793 | | |
| 87,012 | |
Total stockholders' equity | |
| 2,192,318 | | |
| 2,153,039 | |
Total liabilities and stockholders' equity | |
$ | 5,791,320 | | |
| 5,752,883 | |
ANTERO MIDSTREAM CORPORATION
Condensed
Consolidated Statements of Operations and Comprehensive Income (Unaudited)
(In thousands, except per share amounts)
| |
Three Months Ended June 30, | |
| |
2022 | | |
2023 | |
Revenue: | |
| | |
| |
Gathering and compression–Antero Resources | |
$ | 184,071 | | |
| 211,068 | |
Water handling–Antero Resources | |
| 62,262 | | |
| 64,613 | |
Water handling–third party | |
| 242 | | |
| 274 | |
Amortization of customer relationships | |
| (17,668 | ) | |
| (17,668 | ) |
Total revenue | |
| 228,907 | | |
| 258,287 | |
Operating expenses: | |
| | | |
| | |
Direct operating | |
| 43,299 | | |
| 52,595 | |
General and administrative (including $5,641 and $8,499 of equity-based compensation in 2022 and 2023, respectively) | |
| 16,079 | | |
| 18,162 | |
Facility idling | |
| 1,185 | | |
| 637 | |
Depreciation | |
| 35,675 | | |
| 35,233 | |
Impairment of property and equipment | |
| 3,702 | | |
| — | |
Accretion of asset retirement obligations | |
| 64 | | |
| 44 | |
Loss on settlement of asset retirement obligations | |
| 539 | | |
| 279 | |
Loss (gain) on asset sale | |
| (32 | ) | |
| 5,814 | |
Total operating expenses | |
| 100,511 | | |
| 112,764 | |
Operating income | |
| 128,396 | | |
| 145,523 | |
Other income (expense): | |
| | | |
| | |
Interest expense, net | |
| (45,426 | ) | |
| (55,388 | ) |
Equity in earnings of unconsolidated affiliates | |
| 22,824 | | |
| 25,972 | |
Total other expense | |
| (22,602 | ) | |
| (29,416 | ) |
Income before income taxes | |
| 105,794 | | |
| 116,107 | |
Income tax expense | |
| (26,399 | ) | |
| (29,095 | ) |
Net income and comprehensive income | |
$ | 79,395 | | |
| 87,012 | |
| |
| | | |
| | |
Net income per share–basic | |
$ | 0.17 | | |
| 0.18 | |
Net income per share–diluted | |
$ | 0.17 | | |
| 0.18 | |
| |
| | | |
| | |
Weighted average common shares outstanding: | |
| | | |
| | |
Basic | |
| 478,317 | | |
| 479,502 | |
Diluted | |
| 480,270 | | |
| 481,512 | |
ANTERO MIDSTREAM CORPORATION
Selected
Operating Data (Unaudited)
| |
Three Months Ended | | |
Amount of | | |
| |
| |
June 30, | | |
Increase | | |
Percentage | |
| |
2022 | | |
2023 | | |
or Decrease | | |
Change | |
Operating Data: | |
| | | |
| | | |
| | | |
| | |
Gathering—low pressure (MMcf) | |
| 270,302 | | |
| 300,706 | | |
| 30,404 | | |
| 11 | % |
Compression (MMcf) | |
| 252,644 | | |
| 295,801 | | |
| 43,157 | | |
| 17 | % |
Gathering—high pressure (MMcf) | |
| 256,537 | | |
| 265,890 | | |
| 9,353 | | |
| 4 | % |
Fresh water delivery (MBbl) | |
| 10,048 | | |
| 9,585 | | |
| (463 | ) | |
| (5 | )% |
Other fluid handling (MBbl) | |
| 4,128 | | |
| 4,953 | | |
| 825 | | |
| 20 | % |
Wells serviced by fresh water delivery | |
| 15 | | |
| 23 | | |
| 8 | | |
| 53 | % |
Gathering—low pressure (MMcf/d) | |
| 2,970 | | |
| 3,304 | | |
| 334 | | |
| 11 | % |
Compression (MMcf/d) | |
| 2,776 | | |
| 3,251 | | |
| 475 | | |
| 17 | % |
Gathering—high pressure (MMcf/d) | |
| 2,819 | | |
| 2,922 | | |
| 103 | | |
| 4 | % |
Fresh water delivery (MBbl/d) | |
| 110 | | |
| 105 | | |
| (5 | ) | |
| (5 | )% |
Other fluid handling (MBbl/d) | |
| 45 | | |
| 54 | | |
| 9 | | |
| 20 | % |
Average Realized Fees: | |
| | | |
| | | |
| | | |
| | |
Average gathering—low pressure fee ($/Mcf) | |
$ | 0.34 | | |
| 0.35 | | |
| 0.01 | | |
| 3 | % |
Average compression fee ($/Mcf) | |
$ | 0.21 | | |
| 0.21 | | |
| — | | |
| * | |
Average gathering—high pressure fee ($/Mcf) | |
$ | 0.21 | | |
| 0.21 | | |
| — | | |
| * | |
Average fresh water delivery fee ($/Bbl) | |
$ | 4.09 | | |
| 4.21 | | |
| 0.12 | | |
| 3 | % |
Joint Venture Operating Data: | |
| | | |
| | | |
| | | |
| | |
Processing—Joint Venture (MMcf) | |
| 132,664 | | |
| 145,645 | | |
| 12,981 | | |
| 10 | % |
Fractionation—Joint Venture (MBbl) | |
| 3,368 | | |
| 3,553 | | |
| 185 | | |
| 5 | % |
Processing—Joint Venture (MMcf/d) | |
| 1,458 | | |
| 1,600 | | |
| 142 | | |
| 10 | % |
Fractionation—Joint Venture (MBbl/d) | |
| 37 | | |
| 39 | | |
| 2 | | |
| 5 | % |
* Not meaningful or applicable.
ANTERO MIDSTREAM CORPORATION
Condensed Consolidated Results of Segment Operations
(Unaudited)
(In thousands)
| |
Three Months Ended June 30, 2023 | |
| |
Gathering and | | |
Water | | |
| | |
Consolidated | |
| |
Processing | | |
Handling | | |
Unallocated | | |
Total | |
Revenues: | |
| | |
| | |
| | |
| |
Revenue–Antero Resources | |
$ | 223,068 | | |
| 64,613 | | |
| — | | |
| 287,681 | |
Revenue–third-party | |
| — | | |
| 274 | | |
| — | | |
| 274 | |
Gathering—low pressure fee rebate | |
| (12,000 | ) | |
| — | | |
| — | | |
| (12,000 | ) |
Amortization of customer relationships | |
| (9,272 | ) | |
| (8,396 | ) | |
| — | | |
| (17,668 | ) |
Total revenues | |
| 201,796 | | |
| 56,491 | | |
| — | | |
| 258,287 | |
Operating expenses: | |
| | | |
| | | |
| | | |
| | |
Direct operating | |
| 25,154 | | |
| 27,441 | | |
| — | | |
| 52,595 | |
General and administrative (excluding equity-based compensation) | |
| 5,126 | | |
| 2,832 | | |
| 1,705 | | |
| 9,663 | |
Equity-based compensation | |
| 6,244 | | |
| 2,029 | | |
| 226 | | |
| 8,499 | |
Facility idling | |
| — | | |
| 637 | | |
| — | | |
| 637 | |
Depreciation | |
| 22,196 | | |
| 13,037 | | |
| — | | |
| 35,233 | |
Accretion of asset retirement obligations | |
| — | | |
| 44 | | |
| — | | |
| 44 | |
Loss on settlement of asset retirement obligations | |
| — | | |
| 279 | | |
| — | | |
| 279 | |
Loss on asset sale | |
| 5,814 | | |
| — | | |
| — | | |
| 5,814 | |
Total operating expenses | |
| 64,534 | | |
| 46,299 | | |
| 1,931 | | |
| 112,764 | |
Operating income | |
| 137,262 | | |
| 10,192 | | |
| (1,931 | ) | |
| 145,523 | |
Other income (expense): | |
| | | |
| | | |
| | | |
| | |
Interest expense, net | |
| — | | |
| — | | |
| (55,388 | ) | |
| (55,388 | ) |
Equity in earnings of unconsolidated affiliates | |
| 25,972 | | |
| — | | |
| — | | |
| 25,972 | |
Total other income (expense) | |
| 25,972 | | |
| — | | |
| (55,388 | ) | |
| (29,416 | ) |
Income before income taxes | |
| 163,234 | | |
| 10,192 | | |
| (57,319 | ) | |
| 116,107 | |
Income tax expense | |
| — | | |
| — | | |
| (29,095 | ) | |
| (29,095 | ) |
Net income and comprehensive income | |
$ | 163,234 | | |
| 10,192 | | |
| (86,414 | ) | |
| 87,012 | |
| |
| | | |
| | | |
| | | |
| | |
Adjusted EBITDA | |
| | | |
| | | |
| | | |
$ | 242,525 | |
ANTERO MIDSTREAM CORPORATION
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
| |
Six Months Ended June 30, | |
| |
2022 | | |
2023 | |
Cash flows provided by (used in) operating activities: | |
| | | |
| | |
Net income | |
$ | 159,435 | | |
| 173,519 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |
| | | |
| | |
Depreciation | |
| 63,975 | | |
| 70,429 | |
Accretion of asset retirement obligations | |
| 128 | | |
| 88 | |
Impairment of property and equipment | |
| 3,702 | | |
| — | |
Deferred income tax expense | |
| 54,466 | | |
| 60,765 | |
Equity-based compensation | |
| 8,473 | | |
| 14,826 | |
Equity in earnings of unconsolidated affiliates | |
| (46,056 | ) | |
| (50,428 | ) |
Distributions from unconsolidated affiliates | |
| 60,505 | | |
| 63,570 | |
Amortization of customer relationships | |
| 35,336 | | |
| 35,336 | |
Amortization of deferred financing costs | |
| 2,828 | | |
| 2,957 | |
Settlement of asset retirement obligations | |
| (916 | ) | |
| (695 | ) |
Loss on settlement of asset retirement obligations | |
| 539 | | |
| 620 | |
Loss (gain) on asset sale | |
| (150 | ) | |
| 5,569 | |
Changes in assets and liabilities: | |
| | | |
| | |
Accounts receivable–Antero Resources | |
| 6,099 | | |
| (5,470 | ) |
Accounts receivable–third party | |
| 517 | | |
| 481 | |
Other current assets | |
| 158 | | |
| (800 | ) |
Accounts payable–Antero Resources | |
| (2,427 | ) | |
| (2,515 | ) |
Accounts payable–third party | |
| 9,480 | | |
| (889 | ) |
Accrued liabilities | |
| (1,911 | ) | |
| 942 | |
Net cash provided by operating activities | |
| 354,181 | | |
| 368,305 | |
Cash flows provided by (used in) investing activities: | |
| | | |
| | |
Additions to gathering systems and facilities | |
| (131,665 | ) | |
| (59,156 | ) |
Additions to water handling systems | |
| (30,369 | ) | |
| (25,583 | ) |
Investments in unconsolidated affiliates | |
| — | | |
| (262 | ) |
Acquisition of gathering systems and facilities | |
| — | | |
| (266 | ) |
Cash received in asset sales | |
| 147 | | |
| 1,071 | |
Change in other assets | |
| — | | |
| (15 | ) |
Change in other liabilities | |
| (805 | ) | |
| — | |
Net cash used in investing activities | |
| (162,692 | ) | |
| (84,211 | ) |
Cash flows provided by (used in) financing activities: | |
| | | |
| | |
Dividends to common stockholders | |
| (217,445 | ) | |
| (218,971 | ) |
Dividends to preferred stockholders | |
| (275 | ) | |
| (275 | ) |
Payments of deferred financing costs | |
| (302 | ) | |
| — | |
Borrowings (repayments) on bank credit facilities, net | |
| 33,300 | | |
| (56,500 | ) |
Employee tax withholding for settlement of equity compensation awards | |
| (6,767 | ) | |
| (8,348 | ) |
Net cash used in financing activities | |
| (191,489 | ) | |
| (284,094 | ) |
Net increase in cash and cash equivalents | |
| — | | |
| — | |
Cash and cash equivalents, beginning of period | |
| — | | |
| — | |
Cash and cash equivalents, end of period | |
$ | — | | |
| — | |
| |
| | | |
| | |
Supplemental disclosure of cash flow information: | |
| | | |
| | |
Cash paid during the period for interest | |
$ | 86,688 | | |
| 107,607 | |
Increase (decrease) in accrued capital expenditures and accounts payable for property and equipment | |
$ | 2,822 | | |
| (2,814 | ) |
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