DENVER, Nov. 1, 2017 /PRNewswire/ -- Antero Midstream
Partners LP (NYSE: AM) ("Antero Midstream" or the
"Partnership") and Antero Midstream GP LP (NYSE: AMGP)
("AMGP") today released their third quarter 2017 financial and
operational results. The relevant condensed consolidated
financial statements are included in Antero Midstream's and AMGP's
Quarterly Reports on Form 10-Q for the quarter ended
September 30, 2017, which have been
filed with the Securities and Exchange Commission.
Antero Midstream Highlights Include:
- Net income increased by 15% to $81
million, or $0.33 per limited
partner unit compared to the prior year quarter
- Adjusted EBITDA increased by 16% to $128 million compared to the prior year
quarter
- Distribution per unit increased by 28% to $0.34 compared to the prior year quarter,
representing the eleventh consecutive quarterly distribution
increase since the IPO in 2014
- Distributable cash flow increased to $104 million, resulting in DCF coverage of
1.3x
- Debt to trailing twelve months EBITDA was 2.1x with over
$1.1 billion of liquidity
- Low pressure and high pressure gathering volumes increased
by 11% and 42%, respectively, compared to the prior year
quarter
- Compression volumes increased by 55% compared to the prior
year quarter
- Second Joint Venture processing plant, Sherwood 8, placed
online and fully utilized during the quarter
- Entered into a new $1.5
billion revolving credit facility extending maturity until
October 2022
Commenting on the outlook for Antero Midstream, Paul Rady, Chairman and CEO said, "Antero
Midstream continued to deliver on its organic growth strategy
supported by strong rates of return, high distribution coverage and
low leverage. This strategy supports Antero Midstream's 28% to 30%
long-term distribution growth targets and corresponding AMGP's
growth targets through 2020. As an example of our visible organic
growth strategy, the processing and fractionation Joint Venture
brought online Sherwood 8 and filled the 200 MMcf/d of capacity
almost immediately during the third quarter. This
"just-in-time" capital investment delivers strong rates of return
for Antero Midstream and builds momentum heading into 2018 where we
expect to generate free cash flow before distributions."
Mr. Rady further added, "We are also pleased to announce that
the Antero Clearwater advanced wastewater treatment facility is in
its final stages of commissioning and is expected to commence
commercial operations within the next few weeks. This
state-of-the-art facility will be the largest treatment facility
supporting oil and gas shale operations in the world and
demonstrates Antero's commitment to environmentally responsible and
sustainable development."
Recent Developments
New Antero Midstream Revolving Credit Facility
Antero Midstream has entered into a new $1.5 billion revolving credit facility with a
maturity of October 2022.
Additionally, the new revolving credit facility includes fall away
covenants that are triggered if and when Antero Midstream is
assigned an investment grade credit rating by the ratings
agencies. The credit facility is supported by a bank
syndicate, which is co-led by Wells Fargo Bank, N.A and JPMorgan
Chase Bank, N.A. The bank syndicate is comprised of 20 banks,
of which 18 were lenders in the prior facility.
Antero Midstream Distribution for the Third Quarter of
2017
The Board of Directors of Antero Midstream Partners GP LLC, the
general partner of Antero Midstream, declared a cash distribution
of $0.34 per unit ($1.36 per unit annualized) for the third quarter
of 2017. The distribution represents a 28% increase compared to the
prior year quarter and a 6% increase sequentially. The
distribution is Antero Midstream's eleventh consecutive quarterly
distribution increase since its initial public offering in
November 2014 and will be payable on
November 16, 2017 to unitholders of
record as of November 1, 2017.
AMGP Distribution for the Third Quarter of
2017
The Board of Directors of AMGP GP LLC, the general partner of
AMGP, declared a cash distribution of $0.059 per share ($0.236 per share annualized) for the third
quarter of 2017. The third quarter distribution represents
AMGP's first full quarterly distribution since its initial public
offering and will be payable on November 23,
2017 to shareholders of record as of November 1, 2017.
Antero Midstream Third Quarter 2017 Financial Results
Low pressure gathering volumes for the third quarter of 2017
averaged 1,586 MMcf/d, an 11% increase from the third quarter of
2016. Low pressure gathering volumes were negatively impacted
by approximately 90 MMcf/d due to a one-time prior period
adjustment. Compression volumes for the third quarter of 2017
averaged 1,207 MMcf/d, a 55% increase from the third quarter of
2016. High pressure gathering volumes for the third quarter
of 2017 averaged 1,918 MMcf/d, a 42% increase from the third
quarter of 2016. High pressure gathering volumes were in
excess of low pressure gathering volumes due to Antero Resources
Corporation ("Antero Resources") temporarily utilizing an Antero
Midstream owned high pressure line to avoid downstream pipeline
constraints. The 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 142 MBbl/d during the quarter, a 1% increase compared to
the prior year quarter. The freshwater delivery system serviced 27%
fewer completions as compared to the second quarter of 2017 due to
the expected quarter to quarter variance in the completion schedule
and movement of completion crews between pads.
Gross processing volumes from Antero Midstream's processing and
fractionation joint venture (the "Joint Venture") for the third
quarter of 2017 averaged 368 MMcf/d, an increase of 70% compared to
the second quarter of 2017. Joint Venture processing volumes
increased as the Joint Venture's second 200 MMcf/d processing
plant, Sherwood 8, was placed in service during the quarter.
Gross Joint Venture fractionation volumes averaged 6,431 Bbl/d, a
59% increase sequentially, driven by increased C3+ NGL production
volumes processed by MPLX and the Joint Venture.
|
|
Three Months
Ended
September
30,
|
|
|
Average Daily
Volumes:
|
|
2016
|
|
2017
|
|
%
Change
|
Low Pressure Gathering
(MMcf/d)
|
|
1,431
|
|
1,586
|
|
11%
|
Compression
(MMcf/d)
|
|
777
|
|
1,207
|
|
55%
|
High Pressure
Gathering (MMcf/d)
|
|
1,351
|
|
1,918
|
|
42%
|
Fresh Water Delivery
(MBbl/d)
|
|
140
|
|
142
|
|
1%
|
Gross Joint Venture
Processing (MMcf/d)
|
|
—
|
|
368
|
|
*
|
Gross Joint Venture
Fractionation (Bbl/d)
|
|
—
|
|
6,431
|
|
*
|
|
|
|
|
|
|
*
|
Not applicable.
Antero Midstream has a 50% interest in the processing and
fractionation JV with MPLX
|
For the three months ended September 30,
2017, the Partnership reported revenues of $194 million, comprised of $101 million from the Gathering and Processing
segment and $93 million from the
Water Handling and Treatment segment. Revenues increased 29%
compared to the prior year quarter, driven by growth in throughput
volumes and fresh water delivery volumes. Water Handling and
Treatment segment revenues include $45
million from wastewater handling and high rate water
transfer services provided to Antero Resources, which is billed at
cost plus 3%.
Direct operating expenses for the Gathering and Processing and
Water Handling and Treatment segments were $11 million and $52
million, respectively, for a total of $63 million compared to $33 million in direct operating expenses in the
prior year quarter. Water Handling and Treatment direct operating
expenses include $44 million from
wastewater handling and high rate water transfer services.
General and administrative expenses including equity-based
compensation were $14 million, a
$1 million increase compared to the
third quarter of 2016. General and administrative expenses
excluding equity-based compensation were $7
million during the third quarter of 2017, in line with the
third quarter of 2016. Total operating expenses were
$111 million, including $31 million of depreciation and $3 million of accretion of contingent acquisition
consideration.
Net income for the third quarter of 2017 was $81 million, a 15% increase compared to the prior
year quarter. Net income per limited partner unit was $0.33 per unit, an 11% decrease compared to the
prior year quarter. Adjusted EBITDA was $128
million, a 16% increase compared to the prior year quarter.
The increase in net income and Adjusted EBITDA is primarily driven
by increased throughput volumes and fresh water delivery volumes.
Adjusted EBITDA for the quarter included $4
million in distributions from Stonewall Gathering LLC and
the processing and fractionation Joint Venture. Cash interest
paid was $21 million. Cash reserved
for bond interest during the quarter decreased $9 million and cash reserved for payment of
income tax withholding upon vesting of Antero Midstream
equity-based compensation awards was $2
million. Maintenance capital expenditures during the quarter
totaled $11 million and distributable
cash flow was $104 million, resulting
in a DCF coverage ratio of 1.3x. Distributable cash flow is a
non-GAAP financial measure. For a description of
distributable cash flow, please read "Non-GAAP Financial Measures,"
and for a reconciliation to its nearest GAAP measure, please see
the table below.
The following table reconciles net income to adjusted EBITDA and
distributable cash flow as used in this release (in thousands):
|
Three months
ended
|
September
30,
|
2016
|
|
2017
|
Net
income
|
$
|
70,524
|
|
$
|
80,893
|
Interest
expense
|
|
5,303
|
|
|
9,311
|
Depreciation
expense
|
|
26,136
|
|
|
30,556
|
Accretion of contingent
acquisition consideration
|
|
3,527
|
|
|
2,556
|
Equity-based
compensation
|
|
6,599
|
|
|
7,199
|
Equity in earnings of
unconsolidated affiliates
|
|
(1,544)
|
|
|
(7,033)
|
Distributions from
unconsolidated affiliates
|
|
—
|
|
|
4,300
|
Adjusted
EBITDA
|
$
|
110,545
|
|
$
|
127,782
|
Interest
paid
|
|
(4,043)
|
|
|
(20,554)
|
Decrease in cash
reserved for bond interest (1)
|
|
—
|
|
|
8,831
|
Cash reserved for
payment of income tax withholding upon vesting of Antero Midstream
Partners LP equity-based compensation
awards(2)
|
|
(1,000)
|
|
|
(1,500)
|
Cash distribution to be
received from unconsolidated affiliate
|
|
2,221
|
|
|
—
|
Maintenance capital
expenditures(3)
|
|
(4,638)
|
|
|
(10,771)
|
Distributable cash
flow
|
$
|
103,085
|
|
$
|
103,788
|
|
|
|
|
|
|
Distributions
Declared to Antero Midstream Holders
|
|
|
|
|
|
Limited
Partners
|
$
|
47,025
|
|
$
|
63,454
|
Incentive distribution
rights
|
|
4,820
|
|
|
19,067
|
Total Aggregate
Distributions
|
$
|
51,845
|
|
$
|
82,521
|
|
|
|
|
|
|
DCF coverage
ratio
|
|
2.0x
|
|
|
1.3x
|
|
|
1)
|
Cash reserved for
bond interest expense on Antero Midstream's 5.375% senior notes
outstanding during the period that is paid on a semi-annual basis
on March 15th and September 15th of each
year.
|
2)
|
Estimate of current
period portion of expected cash payment for income tax withholding
attributable to vesting of Midstream LTIP equity-based compensation
awards to be paid in the fourth quarter.
|
3)
|
Maintenance capital
expenditures represent the portion of our estimated capital
expenditures associated with (i) the connection of new wells to our
gathering and processing systems that we believe will be necessary
to offset the natural production declines Antero Resources will
experience on all of its wells over time, and (ii) water delivery
to new wells necessary to maintain the average throughput volume on
our systems.
|
Commenting on Antero Midstream's outlook, Michael Kennedy, CFO of Antero Midstream said,
"Looking ahead to the fourth quarter, we anticipate a sequential
increase in throughput and water volumes given a planned increase
in Antero Resources' completion activity, which is consistent with
our 2017 guidance. This provides Antero Midstream with significant
momentum heading into 2018 to support top-tier distribution growth
and coverage. Additionally, AM's balance sheet strength and
attractive project returns allows us to internally fund our organic
opportunities while maintaining leverage in the low 2x range."
Gathering and Processing — Antero
Midstream added 160 MMcf/d of compression capacity during the
third quarter of 2017, bringing total compression capacity up to
1.6 Bcf/d in the Marcellus and Utica combined. Additionally,
Antero Midstream connected 25 wells to its gathering system during
the quarter. Antero Resources is currently operating six
drilling rigs on Antero Midstream dedicated acreage.
Water Handling and Treatment — Antero
Midstream's Marcellus and Utica fresh water delivery systems
serviced 32 well completions during the third quarter of 2017, a 9%
decrease from the prior year quarter and 27% decrease
sequentially. Antero Resources is currently operating four
completion crews on Antero Midstream dedicated acreage. During the
quarter, Antero Midstream began commissioning the Antero Clearwater
Facility and expects the facility to commence advanced wastewater
treatment operations in the fourth quarter of 2017.
Balance Sheet and Liquidity
As of September 30, 2017, Antero
Midstream had $2 million in cash and
$427 million drawn on its
$1.5 billion bank credit facility,
resulting in approximately $1.1
billion of liquidity. Antero Midstream's total debt
and net debt to trailing twelve months adjusted EBITDA was 2.1x as
of September 30, 2017. For a
reconciliation of consolidated net debt to consolidated total debt,
the most comparable GAAP measure, please read "Non-GAAP Financial
Measures."
Capital Investments
Capital expenditures, excluding investments in the processing
and fractionation joint venture, were $147
million in the third quarter of 2017 as compared to
$114 million in the third quarter of
2016. Capital invested in gathering systems and related
facilities was $99 million and
capital invested in water handling and treatment assets was
$48 million, including $33 million invested in the Antero Clearwater
Facility. Investments in unconsolidated affiliates for the
processing and fractionation joint venture were $26 million during the quarter.
AMGP Third Quarter 2017 Financial Results
AMGP's equity in earnings from Antero Midstream Partners, which
reflects the cash distributions from Antero Midstream, was
$19.1 million. Net income for
the third quarter of 2017 was $3.0
million as compared to net income of $2.8 million for the prior year
quarter.
AMGP's cash distributions from Antero Midstream were
$18.4 million for third quarter of
2017, net of $0.7 million of cash
reserved for distributions on Series B units. General and
administrative expenses were $0.6
million, provision for income taxes was $7.2 million, and reserve for tax benefit on
Series B unit distributions was $0.3
million, resulting in cash available for distribution of
$10.9 million.
The following table reconciles cash distributions from Antero
Midstream and AMGP cash distribution per common share as presented
in this release (in thousands):
|
|
Three Months
Ended
September 30, 2017
|
Cash distributions
from Antero Midstream Partners LP
|
|
$
|
19,067
|
Cash reserved for
distributions to Series B units of IDR LLC
|
|
|
(684)
|
Cash distributions to
Antero Midstream GP LP
|
|
$
|
18,383
|
General and
administrative expenses
|
|
|
(615)
|
Provision for income
taxes
|
|
|
(7,157)
|
Reserve for tax benefit
on Series B unit distributions
|
|
|
272
|
Distributable cash
flow
|
|
$
|
10,883
|
|
|
|
|
DCF coverage
ratio
|
|
|
1.0x
|
|
|
|
|
Common shares
outstanding
|
|
|
186,174
|
|
|
|
|
Cash distribution
per common share
|
|
$
|
0.059
|
Conference Call
A joint conference call for Antero Midstream and AMGP is
scheduled on Thursday, November 2,
2017 at 10:00 am MT to discuss
the quarterly results. A brief Q&A session for security
analysts will immediately follow the discussion of the results for
the quarter. To participate in the call, dial in at
1-888-347-8204 (U.S.), 1-855-669-9657 (Canada), or 1-412-902-4229 (International) and
reference "Antero Midstream". A telephone replay of the call
will be available until Friday, November 10,
2017 at 10:00 am MT at
1-844-512-2921 (U.S.) or 1-412-317-6671 (International) using the
passcode 10111892.
Presentation
To access the live webcast and view the related earnings
conference call presentation, visit Antero Midstream's website at
www.anteromidstream.com or AMGP's website at
www.anteromidstreamgp.com. The webcast will be archived for
replay on Antero Midstream's website and AMGP's website until
Friday, November 10, 2017 at
10:00 am MT. Information on
Antero Midstream's website and AMGP's website does not constitute a
portion of this press release.
Non-GAAP Financial Measures
Antero Midstream views Adjusted EBITDA as an important indicator
of the Partnership's performance. Antero Midstream defines
Adjusted EBITDA as Net Income before interest expense, depreciation
expense, accretion of contingent acquisition consideration,
equity-based compensation expense, excluding equity in earnings of
unconsolidated affiliates, including cash distributions from
unconsolidated affiliates and gain on asset sale.
Antero Midstream uses Adjusted EBITDA to assess:
- the financial performance of the Partnership's assets, without
regard to financing methods in the case of Adjusted EBITDA, capital
structure or historical cost basis;
- its operating performance and return on capital as compared to
other publicly traded partnerships in the midstream energy sector,
without regard to financing or capital structure; and
- the viability of acquisitions and other capital expenditure
projects.
The Partnership defines Distributable Cash Flow as Adjusted
EBITDA less interest paid, income tax withholding payments and cash
reserved for payments of income tax withholding upon vesting of
equity-based compensation awards, cash reserved for bond interest
and ongoing maintenance capital expenditures paid. Antero
Midstream uses Distributable Cash Flow as a performance metric to
compare the cash generating performance of the Partnership from
period to period and to compare the cash generating performance for
specific periods to the cash distributions (if any) that are
expected to be paid to unitholders. Distributable Cash Flow
does not reflect changes in working capital balances.
Adjusted EBITDA and Distributable Cash Flow are non-GAAP
financial measures. The GAAP measure most directly comparable
to Adjusted EBITDA and Distributable Cash Flow is Net Income.
The non-GAAP financial measures of Adjusted EBITDA and
Distributable Cash Flow should not be considered as alternatives to
the GAAP measure of Net Income. Adjusted EBITDA and
Distributable Cash Flow are not presentations made in accordance
with GAAP and have important limitations as an analytical tool
because they include some, but not all, items that affect Net
Income and Adjusted EBITDA. You should not consider Adjusted
EBITDA and Distributable Cash Flow in isolation or as a substitute
for analyses of results as reported under GAAP. Antero
Midstream's definition of Adjusted EBITDA and Distributable Cash
Flow may not be comparable to similarly titled measures of other
partnerships.
The following table reconciles consolidated total debt to
consolidated net debt as used in this release (in thousands):
|
|
September
30,
|
|
|
2017
|
|
|
|
|
Bank credit
facility
|
|
$
|
427,000
|
5.375% AM senior
notes due 2024
|
|
|
650,000
|
Net unamortized debt
issuance costs
|
|
|
(9,278)
|
Consolidated total
debt
|
|
$
|
1,067,722
|
Cash and cash
equivalents
|
|
|
(2,495)
|
Consolidated net
debt
|
|
$
|
1,065,227
|
The following table reconciles net income to Adjusted EBITDA for
the twelve months ended September 30,
2017 as used in this release (in thousands):
|
|
Twelve Months
Ended
September
30,
|
|
|
2017
|
|
|
|
Net income
|
$
|
316,510
|
Interest expense
|
|
36,170
|
Depreciation expense
|
|
114,366
|
Accretion of
contingent acquisition consideration
|
|
15,777
|
Equity-based compensation
|
|
27,119
|
Equity in earnings of unconsolidated affiliate
|
|
(11,345)
|
Distributions from
unconsolidated affiliates
|
|
17,822
|
Gain on asset
sale
|
|
(3,859)
|
Adjusted
EBITDA
|
$
|
512,560
|
Antero Midstream is a limited partnership that owns, operates
and develops midstream gathering, compression, processing and
fractionation assets as well as integrated water assets that
primarily service Antero Resources Corporation's properties located
in West Virginia and Ohio. Holders of Antero Midstream common units
will receive a Schedule K-1 with respect to distributions received
on the common units.
AMGP is a Delaware limited
partnership that has elected to be classified as an entity taxable
as a corporation for U.S. federal income tax purposes.
Holders of AMGP common shares will receive a Form 1099 with respect
to distributions received on the common shares. AMGP owns the
general partner of Antero Midstream and indirectly owns the
incentive distribution rights in Antero Midstream.
This release includes "forward-looking statements" within the
meaning of federal securities laws. Such forward-looking
statements are subject to a number of risks and uncertainties, many
of which are beyond the Partnership's and AMGP's
control. All statements, other than historical facts included
in this release, are forward-looking statements. All
forward-looking statements speak only as of the date of this
release and are based upon a number of assumptions. Although
the Partnership and AMGP each believe that the plans, intentions
and expectations reflected in or suggested by the forward-looking
statements are reasonable, there is no assurance that the
assumptions underlying these forward-looking statements will be
accurate or the plans, intentions or expectations expressed herein
will be achieved. For example, future acquisitions,
dispositions or other strategic transactions may materially impact
the forecasted or targeted results described in this release.
Therefore, actual outcomes and results could materially differ from
what is expressed, implied or forecast in such statements.
Nothing in this release is intended to constitute guidance with
respect to Antero Resources.
Antero Midstream and AMGP caution you that these
forward-looking statements are subject to all of the risks and
uncertainties, most of which are difficult to predict and many of
which are beyond the Partnership's and AMGP's control, incident to
the gathering and processing and fresh water and waste water
treatment businesses. These risks include, but are not
limited to, Antero Resources' expected future growth, Antero
Resources' ability to meet its drilling and development plan,
commodity price volatility, ability to execute the Partnership's
business strategy, competition and government regulations, actions
taken by third-party producers, operators, processors and
transporters, inflation, environmental risks, drilling and
completion and other operating risks, regulatory changes, the
uncertainty inherent in projecting future rates of production, cash
flow and access to capital, the timing of development expenditures,
and the other risks described under "Risk Factors" in Antero
Midstream's Annual Report on Form 10-K for the year ended
December 31, 2016.
For more information, contact Michael
Kennedy – CFO of Antero Midstream and AMGP at (303) 357-6782
or mkennedy@anteroresources.com.
ANTERO MIDSTREAM
PARTNERS LP
Condensed
Consolidated Balance Sheets
December 31, 2016 and September
30, 2017
(Unaudited)
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2016
|
|
September 30,
2017
|
Assets
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
14,042
|
|
|
2,495
|
Accounts
receivable–Antero Resources
|
|
|
64,139
|
|
|
84,124
|
Accounts
receivable–third party
|
|
|
1,240
|
|
|
1,165
|
Prepaid
expenses
|
|
|
529
|
|
|
1,013
|
Total current
assets
|
|
|
79,950
|
|
|
88,797
|
Property and
equipment, net
|
|
|
2,195,879
|
|
|
2,508,204
|
Investment in
unconsolidated affiliates
|
|
|
68,299
|
|
|
287,842
|
Other assets,
net
|
|
|
5,767
|
|
|
10,548
|
Total
assets
|
|
$
|
2,349,895
|
|
|
2,895,391
|
|
Liabilities and
Partners' Capital
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
16,979
|
|
|
13,820
|
Accounts payable–Antero
Resources
|
|
|
3,193
|
|
|
4,050
|
Accrued
liabilities
|
|
|
61,641
|
|
|
70,532
|
Other current
liabilities
|
|
|
200
|
|
|
206
|
Total current
liabilities
|
|
|
82,013
|
|
|
88,608
|
Long-term
liabilities:
|
|
|
|
|
|
|
Long-term
debt
|
|
|
849,914
|
|
|
1,067,722
|
Contingent acquisition
consideration
|
|
|
194,538
|
|
|
204,210
|
Other
|
|
|
620
|
|
|
465
|
Total
liabilities
|
|
|
1,127,085
|
|
|
1,361,005
|
|
|
|
|
|
|
|
Partners'
capital:
|
|
|
|
|
|
|
Common unitholders -
public (70,020 units and 87,753 units issued and outstanding at
December 31, 2016 and September 30, 2017, respectively)
|
|
|
1,458,410
|
|
|
1,708,930
|
Common unitholder -
Antero Resources (32,929 units and 98,870 units issued and
outstanding at December 31, 2016 and September 30, 2017,
respectively)
|
|
|
26,820
|
|
|
(193,611)
|
Subordinated unitholder
- Antero Resources (75,941 issued and outstanding at December 31,
2016)
|
|
|
(269,963)
|
|
|
—
|
General
partner
|
|
|
7,543
|
|
|
19,067
|
Total partners'
capital
|
|
|
1,222,810
|
|
|
1,534,386
|
Total liabilities and
partners' capital
|
|
$
|
2,349,895
|
|
|
2,895,391
|
ANTERO MIDSTREAM
PARTNERS LP
Condensed
Consolidated Statements of Operations and Comprehensive
Income
Three Months Ended
September 30, 2016, and 2017
(Unaudited)
(In thousands, except
per unit amounts)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
2016
|
|
2017
|
|
|
|
Revenue:
|
|
|
|
|
|
|
Gathering and
compression–Antero Resources
|
|
$
|
77,871
|
|
|
100,518
|
Water handling and
treatment–Antero Resources
|
|
|
72,411
|
|
|
93,111
|
Gathering and
compression–third party
|
|
|
193
|
|
|
—
|
Total
revenue
|
|
|
150,475
|
|
|
193,629
|
Operating
expenses:
|
|
|
|
|
|
|
Direct
operating
|
|
|
33,213
|
|
|
63,030
|
General and
administrative (including $6,599 and $7,199 of equity-based
compensation in 2016 and 2017, respectively)
|
|
|
13,316
|
|
|
14,316
|
Depreciation
|
|
|
26,136
|
|
|
30,556
|
Accretion of contingent
acquisition consideration
|
|
|
3,527
|
|
|
2,556
|
Total operating
expenses
|
|
|
76,192
|
|
|
110,458
|
Operating
income
|
|
|
74,283
|
|
|
83,171
|
Interest expense,
net
|
|
|
(5,303)
|
|
|
(9,311)
|
Equity in earnings of
unconsolidated affiliates
|
|
|
1,544
|
|
|
7,033
|
Net income and
comprehensive income
|
|
|
70,524
|
|
|
80,893
|
Net income attributable
to incentive distribution rights
|
|
|
(4,807)
|
|
|
(19,067)
|
Limited partners'
interest in net income
|
|
$
|
65,717
|
|
|
61,826
|
|
|
|
|
|
|
|
Net income per limited
partner unit - basic and diluted
|
|
$
|
0.37
|
|
|
0.33
|
|
|
|
|
|
|
|
Weighted average
limited partner units outstanding - basic
|
|
|
176,395
|
|
|
186,581
|
Weighted average
limited partner units outstanding - diluted
|
|
|
176,766
|
|
|
187,145
|
ANTERO MIDSTREAM
PARTNERS LP
Consolidated Results
of Segment Operations
Three Months Ended
September 30, 2016, and 2017
(Unaudited)
(In
thousands)
|
|
|
|
|
|
Water
|
|
|
|
|
|
Gathering and
|
|
Handling
and
|
|
Consolidated
|
|
|
Processing
|
|
Treatment
|
|
Total
|
Three months ended
September 30, 2016
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Revenue - Antero
Resources
|
|
$
|
77,871
|
|
|
72,411
|
|
|
150,282
|
Revenue -
third-party
|
|
|
193
|
|
|
—
|
|
|
193
|
Total
revenues
|
|
|
78,064
|
|
|
72,411
|
|
|
150,475
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Direct
operating
|
|
|
4,692
|
|
|
28,521
|
|
|
33,213
|
General and
administrative (before equity-based compensation)
|
|
|
5,068
|
|
|
1,649
|
|
|
6,717
|
Equity-based
compensation
|
|
|
5,213
|
|
|
1,386
|
|
|
6,599
|
Depreciation
|
|
|
18,298
|
|
|
7,838
|
|
|
26,136
|
Accretion of
contingent acquisition consideration
|
|
|
—
|
|
|
3,527
|
|
|
3,527
|
Total
expenses
|
|
|
33,271
|
|
|
42,921
|
|
|
76,192
|
Operating
income
|
|
$
|
44,793
|
|
|
29,490
|
|
|
74,283
|
|
|
|
|
|
|
|
|
|
|
Segment and
consolidated Adjusted EBITDA
|
|
$
|
68,304
|
|
|
42,241
|
|
|
110,545
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30, 2017
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Revenue - Antero
Resources
|
|
$
|
100,518
|
|
|
93,111
|
|
|
193,629
|
Revenue -
third-party
|
|
|
—
|
|
|
—
|
|
|
—
|
Total
revenues
|
|
|
100,518
|
|
|
93,111
|
|
|
193,629
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Direct
operating
|
|
|
10,560
|
|
|
52,470
|
|
|
63,030
|
General and
administrative (before equity-based compensation)
|
|
|
4,225
|
|
|
2,892
|
|
|
7,117
|
Equity-based
compensation
|
|
|
5,111
|
|
|
2,088
|
|
|
7,199
|
Depreciation
|
|
|
21,803
|
|
|
8,753
|
|
|
30,556
|
Accretion of
contingent acquisition consideration
|
|
|
—
|
|
|
2,556
|
|
|
2,556
|
Total
expenses
|
|
|
41,699
|
|
|
68,759
|
|
|
110,458
|
Operating
income
|
|
$
|
58,819
|
|
|
24,352
|
|
|
83,171
|
|
|
|
|
|
|
|
|
|
|
Segment and
consolidated Adjusted EBITDA
|
|
$
|
90,033
|
|
|
37,749
|
|
|
127,782
|
ANTERO MIDSTREAM
PARTNERS LP
Selected Operating
Data
Three Months Ended
September 30, 2016, and 2017
(Unaudited)
|
|
|
|
|
|
|
|
Amount
of
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Increase
|
|
Percentage
|
|
|
2016
|
|
2017
|
|
(Decrease)
|
|
Change
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Revenue - Antero
Resources
|
|
$
|
150,282
|
|
|
193,629
|
|
43,347
|
|
29
|
%
|
Revenue -
third-party
|
|
|
193
|
|
|
—
|
|
(193)
|
|
*
|
|
Total
revenue
|
|
|
150,475
|
|
|
193,629
|
|
43,154
|
|
29
|
%
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Direct
operating
|
|
|
33,213
|
|
|
63,030
|
|
29,817
|
|
90
|
%
|
General and
administrative (before equity-based compensation)
|
|
|
6,717
|
|
|
7,117
|
|
400
|
|
6
|
%
|
Equity-based
compensation
|
|
|
6,599
|
|
|
7,199
|
|
600
|
|
9
|
%
|
Depreciation
|
|
|
26,136
|
|
|
30,556
|
|
4,420
|
|
17
|
%
|
Accretion of contingent
acquisition consideration
|
|
|
3,527
|
|
|
2,556
|
|
(971)
|
|
(28)
|
%
|
Total operating
expenses
|
|
|
76,192
|
|
|
110,458
|
|
34,266
|
|
45
|
%
|
Operating
income
|
|
|
74,283
|
|
|
83,171
|
|
8,888
|
|
12
|
%
|
Interest
expense
|
|
|
(5,303)
|
|
|
(9,311)
|
|
(4,008)
|
|
76
|
%
|
Equity in earnings of
unconsolidated affiliates
|
|
|
1,544
|
|
|
7,033
|
|
5,489
|
|
356
|
%
|
Net income
|
|
$
|
70,524
|
|
|
80,893
|
|
10,369
|
|
15
|
%
|
Adjusted
EBITDA
|
|
$
|
110,545
|
|
|
127,782
|
|
17,237
|
|
16
|
%
|
Operating
Data:
|
|
|
|
|
|
|
|
|
|
|
|
Gathering—low pressure
(MMcf)
|
|
|
131,625
|
|
|
145,898
|
|
14,273
|
|
11
|
%
|
Gathering—high pressure
(MMcf)
|
|
|
124,266
|
|
|
176,471
|
|
52,205
|
|
42
|
%
|
Compression
(MMcf)
|
|
|
71,470
|
|
|
111,070
|
|
39,600
|
|
55
|
%
|
Condensate gathering
(MBbl)
|
|
|
48
|
|
|
—
|
|
(48)
|
|
*
|
|
Processing - Joint
Venture (MMcf)
|
|
|
—
|
|
|
33,841
|
|
33,841
|
|
*
|
|
Fractionation - Joint
Venture (MBbl)
|
|
|
—
|
|
|
592
|
|
592
|
|
*
|
|
Fresh water delivery
(MBbl)
|
|
|
12,895
|
|
|
13,022
|
|
127
|
|
1
|
%
|
Wastewater handling
(MBbl)
|
|
|
2,577
|
|
|
3,723
|
|
1,146
|
|
44
|
%
|
Wells serviced by fresh
water delivery
|
|
|
35
|
|
|
32
|
|
(3)
|
|
(9)
|
%
|
Gathering—low pressure
(MMcf/d)
|
|
|
1,431
|
|
|
1,586
|
|
155
|
|
11
|
%
|
Gathering—high pressure
(MMcf/d)
|
|
|
1,351
|
|
|
1,918
|
|
567
|
|
42
|
%
|
Compression
(MMcf/d)
|
|
|
777
|
|
|
1,207
|
|
430
|
|
55
|
%
|
Condensate gathering
(MBbl/d)
|
|
|
1
|
|
|
—
|
|
(1)
|
|
*
|
|
Processing - Joint
Venture (MMcf/d)
|
|
|
—
|
|
|
368
|
|
368
|
|
*
|
|
Fractionation - Joint
Venture (MBbl/d)
|
|
|
—
|
|
|
6
|
|
6
|
|
*
|
|
Fresh water delivery
(MBbl/d)
|
|
|
140
|
|
|
142
|
|
2
|
|
1
|
%
|
Wastewater handling
(MBbl/d)
|
|
|
28
|
|
|
40
|
|
12
|
|
44
|
%
|
Average realized
fees:
|
|
|
|
|
|
|
|
|
|
|
|
Average gathering—low
pressure fee ($/Mcf)
|
|
$
|
0.31
|
|
|
0.32
|
|
0.01
|
|
3
|
%
|
Average gathering—high
pressure fee ($/Mcf)
|
|
$
|
0.19
|
|
|
0.19
|
|
—
|
|
—
|
|
Average compression fee
($/Mcf)
|
|
$
|
0.19
|
|
|
0.19
|
|
—
|
|
—
|
|
Average
gathering—condensate fee ($/Bbl)
|
|
$
|
4.17
|
|
|
—
|
|
(4.17)
|
|
*
|
|
Average fresh water
delivery fee ($/Bbl)
|
|
$
|
3.68
|
|
|
3.71
|
|
0.03
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Not meaningful or
applicable.
|
ANTERO MIDSTREAM
PARTNERS LP
Consolidated
Statements of Cash Flows
Nine Months Ended
September 30, 2016, and 2017
(Unaudited)
|
|
|
|
|
|
|
|
Nine Months
Ended September 30,
|
|
2016
|
|
2017
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net income
|
$
|
163,352
|
|
|
243,160
|
Adjustment to reconcile
net income to net cash provided by operating activities:
|
|
|
|
|
|
Depreciation
|
|
74,100
|
|
|
88,604
|
Accretion of
contingent acquisition consideration
|
|
10,384
|
|
|
9,672
|
Equity-based
compensation
|
|
19,366
|
|
|
20,436
|
Equity in earnings of
unconsolidated affiliates
|
|
(2,027)
|
|
|
(12,887)
|
Distributions from
unconsolidated affiliates
|
|
—
|
|
|
10,120
|
Amortization of
deferred financing costs
|
|
1,185
|
|
|
1,906
|
Changes in assets and
liabilities:
|
|
|
|
|
|
Accounts
receivable–Antero Resources
|
|
7,314
|
|
|
(19,985)
|
Accounts
receivable–third party
|
|
1,464
|
|
|
75
|
Prepaid
expenses
|
|
(53)
|
|
|
(484)
|
Accounts
payable
|
|
1,467
|
|
|
1,181
|
Accounts
payable–Antero Resources
|
|
99
|
|
|
857
|
Accrued
liabilities
|
|
(17,516)
|
|
|
1,612
|
Net cash provided by
operating activities
|
|
259,135
|
|
|
344,267
|
Cash flows used in
investing activities:
|
|
|
|
|
|
Additions to gathering
systems and facilities
|
|
(152,769)
|
|
|
(254,619)
|
Additions to water
handling and treatment systems
|
|
(137,355)
|
|
|
(143,470)
|
Investment in
unconsolidated affiliates
|
|
(45,044)
|
|
|
(216,776)
|
Change in other
assets
|
|
(2,409)
|
|
|
(5,877)
|
Net cash used in
investing activities
|
|
(337,577)
|
|
|
(620,742)
|
Cash flows provided
by financing activities:
|
|
|
|
|
|
Distributions to
unitholders
|
|
(129,752)
|
|
|
(200,037)
|
Issuance of senior
notes
|
|
650,000
|
|
|
—
|
Borrowings
(repayments) on bank credit facilities, net
|
|
(450,000)
|
|
|
217,000
|
Issuance of common
units, net of offering costs
|
|
19,605
|
|
|
248,949
|
Payments of deferred
financing costs
|
|
(8,940)
|
|
|
—
|
Employee tax
withholding for settlement of equity compensation awards
|
|
—
|
|
|
(932)
|
Other
|
|
(133)
|
|
|
(52)
|
Net cash provided by
financing activities
|
|
80,780
|
|
|
264,928
|
Net increase
(decrease) in cash and cash equivalents
|
|
2,338
|
|
|
(11,547)
|
Cash and cash
equivalents, beginning of period
|
|
6,883
|
|
|
14,042
|
Cash and cash
equivalents, end of period
|
$
|
9,221
|
|
|
2,495
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
|
Cash paid during the
period for interest
|
$
|
11,751
|
|
|
42,530
|
Supplemental
disclosure of noncash investing activities:
|
|
|
|
|
|
Increase (decrease) in
accrued capital expenditures and accounts payable for property and
equipment
|
$
|
(21,971)
|
|
|
2,936
|
Antero Midstream
GP LP
Condensed
Consolidated Balance Sheets
December 31, 2016 and September
30, 2017
(Unaudited)
(In thousands)
|
|
|
|
December 31,
2016
|
|
September 30,
2017
|
|
Assets
|
Current
assets:
|
|
|
|
|
|
|
Cash
|
|
$
|
9,609
|
|
|
2,419
|
Accounts receivable -
related party
|
|
|
217
|
|
|
—
|
Prepaid
expenses
|
|
|
—
|
|
|
49
|
Total current
assets
|
|
|
9,826
|
|
|
2,468
|
Investment in Antero
Midstream Partners LP
|
|
|
7,543
|
|
|
19,067
|
Total
assets
|
|
$
|
17,369
|
|
|
21,535
|
|
|
|
|
|
|
|
Liabilities and
Partners' Capital
|
Current
liabilities:
|
|
|
|
|
|
|
Accrued
liabilities
|
|
|
426
|
|
|
611
|
Income taxes
payable
|
|
|
6,674
|
|
|
8,900
|
Total current
liabilities
|
|
|
7,100
|
|
|
9,511
|
Liability for
equity-based compensation
|
|
|
—
|
|
|
3,344
|
Total
liabilities
|
|
|
7,100
|
|
|
12,855
|
Partners'
capital
|
|
|
10,269
|
|
|
8,680
|
Total liabilities and
partners' capital
|
|
$
|
17,369
|
|
|
21,535
|
Antero Midstream
GP LP
Condensed
Consolidated Statements of Operations and Comprehensive Income
(Loss)
Three Months
Ended September 30, 2016 and 2017
(Unaudited)
(In thousands, except
per share amounts)
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
2016
|
|
2017
|
Equity in earnings of
Antero Midstream Partners LP
|
$
|
4,807
|
|
|
19,067
|
Total income
|
|
4,807
|
|
|
19,067
|
General and
administrative expense
|
|
205
|
|
|
615
|
Equity-based
compensation
|
|
—
|
|
|
8,317
|
Total
expenses
|
|
205
|
|
|
8,932
|
Income before income
taxes
|
|
4,602
|
|
|
10,135
|
Provision for income
taxes
|
|
(1,825)
|
|
|
(7,157)
|
Net income and
comprehensive income
|
$
|
2,777
|
|
|
2,978
|
|
|
|
|
|
|
Net income per common
share - basic and diluted
|
|
|
|
$
|
0.02
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding - basic
|
|
|
|
|
186,173
|
Weighted average
number of common shares outstanding - diluted
|
|
|
|
|
191,175
|
Antero Midstream
GP LP
Condensed
Consolidated Statements of Cash Flows
Nine Months
Ended September 30, 2016 and 2017
(Unaudited)
(In
thousands)
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
2016
|
|
2017
|
Cash flows provided
by operating activities:
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
5,435
|
|
|
(3,582)
|
Adjustment to reconcile
net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
Equity in earnings of
Antero Midstream Partners LP
|
|
|
(9,388)
|
|
|
(45,948)
|
Distributions received
from Antero Midstream Partners LP
|
|
|
5,550
|
|
|
34,424
|
Equity-based
compensation
|
|
|
—
|
|
|
26,271
|
Deferred income
taxes
|
|
|
(368)
|
|
|
—
|
Changes in current
assets and liabilities:
|
|
|
|
|
|
|
Accounts receivable -
related party
|
|
|
(202)
|
|
|
—
|
Prepaid
expenses
|
|
|
—
|
|
|
(49)
|
Accounts
payable
|
|
|
—
|
|
|
—
|
Accrued
liabilities
|
|
|
350
|
|
|
185
|
Income taxes
payable
|
|
|
3,741
|
|
|
2,226
|
Net cash provided by
operating activities
|
|
|
5,118
|
|
|
13,527
|
Cash flows used in
investing activities
|
|
|
—
|
|
|
—
|
Cash flows used in
financing activities
|
|
|
|
|
|
|
Distributions to Antero
Resources Investment LLC
|
|
|
—
|
|
|
(15,691)
|
Distributions to
shareholders
|
|
|
—
|
|
|
(5,026)
|
Net cash used in
financing activities
|
|
|
—
|
|
|
(20,717)
|
Net increase
(decrease) in cash
|
|
|
5,118
|
|
|
(7,190)
|
Cash, beginning of
period
|
|
|
72
|
|
|
9,609
|
Cash, end of
period
|
|
$
|
5,190
|
|
|
2,419
|
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SOURCE Antero Midstream Partners LP; Antero Midstream GP LP