DENVER, July 29, 2020 /PRNewswire/ -- Antero
Midstream Corporation (NYSE: AM) ("Antero Midstream" or
the "Company") today released its second quarter 2020 financial and
operating results. In addition, Antero Midstream announced a
reduction of its 2020 capital budget and increase in its Free Cash
Flow guidance. The relevant consolidated financial statements are
included in Antero Midstream's quarterly report on Form 10-Q
for the three months ended June 30,
2020.
Second Quarter 2020 Highlights:
- Net income was $88 million, or
$0.19 per share, a 36% increase
compared to the prior year quarter
- Adjusted Net Income was $106
million, or $0.22 per share, a
36% increase compared to the prior year quarter (non-GAAP
measure)
- Adjusted EBITDA was $201
million, a 2% decline compared to the prior year quarter
(non-GAAP measure)
- Distributable Cash Flow was $152
million, resulting in 1.0x DCF coverage on the previously
declared dividend of $0.3075 per
share (non-GAAP measure)
- Capital expenditures were $59
million, a 63% decrease compared to the prior year
quarter
- Free Cash Flow before return of capital and changes in
working capital was $108 million
compared to $15 million in the prior
year quarter (non-GAAP measure)
- Received $39 million of the
$55 million tax refund related to net
operating losses in prior tax years under the CARES Act; remaining
$16 million expected to be received
by year-end 2020
- Repurchased 3.2 million shares at an average price of
$2.77 per share for approximately
$8.9 million
- Total debt as of June 30, 2020
was $3.1 billion, unchanged from
March 31, 2020
Updated 2020 Capital Budget & Free Cash Flow
Guidance:
- Further decreased capital budget to a range of $200 to $215
million from the original budget of $300 to $325
million and previously revised budget of $215 to $240
million
-
- A 67% decrease compared to 2019 capital
expenditures
- Increased Free Cash Flow guidance (before return of capital
and changes in working capital) to $445 to $475
million from the original guidance of $375 to $425
million and previously revised guidance of $420 to $450
million
-
- Increase driven by capital budget reduction with no change
to previously provided Adjusted EBITDA guidance of $800 to $830
million
Paul Rady, Chairman and CEO said,
"Antero Midstream delivered a strong quarter with no material
volume curtailments due to the coordinated efforts and planning of
Antero Midstream and Antero Resources. As a result, Antero
Midstream's gathering and compression volumes increased 8%
year-over-year and 6% sequentially during the second quarter. We
are incredibly proud of all of our employees who have safely
delivered these results despite the ongoing uncertainty and
challenges surrounding the COVID-19 pandemic. This operational
excellence, combined with our continued reduction in capital
expenditures, resulted in Free Cash Flow of $108 million compared to $15 million the second quarter of 2019."
Mr. Rady further added, "Due to the just-in-time nature of our
capital investments with no long-term major capital projects,
Antero Midstream has been able to reduce its capital budget by over
$100 million in 2020. This has
in-turn improved our Free Cash Flow guidance by $60 million in 2020 compared to our original
guidance and allows Antero Midstream to maintain a strong balance
sheet with significant liquidity and financial flexibility."
For a discussion of the non-GAAP financial measures including
Adjusted EBITDA, Adjusted Net Income, Distributable Cash Flow, Free
Cash Flow and Net Debt, please see "Non-GAAP Financial
Measures."
Antero Resources Developments
On June 15, 2020, Antero Resources
announced the closing of a $402
million overriding royalty interest ("ORRI") transaction. In
addition, Antero Resources announced that in July of 2020 it
monetized excess 2021 natural gas hedges as a result of the ORRI
transaction for proceeds of approximately $29 million. Antero Resources disclosed that, pro
forma for the hedge monetization, it expects to be 100% hedged on
its 2021 natural gas production at a price of $2.77/MMBtu. The hedge monetization brings Antero
Resources' total asset sale proceeds to $531
million, inclusive of up to $102
million of contingent consideration relating to the ORRI
transaction that may be earned through 2021, compared to a stated
asset sale target of $750 million to
$1.0 billion. Since the commencement
of Antero Resources' debt repurchase program in the fourth quarter
of 2019, Antero Resources has repurchased $888 million of notional debt at a 19% weighted
average discount, reducing total indebtedness by $171 million and net interest expense by
$24 million on an annualized basis.
Antero Resources has stated that pro forma for the hedge
monetization, its liquidity position as of June 30, 2020 was approximately $1.0 billion and that the par value of its 2021
and 2022 maturities outstanding has been reduced from $1.0 billion and $1.1
billion at issuance to $503
million and $756 million,
respectively, each as of July 24,
2020.
COVID-19 Pandemic Developments
As a midstream energy company, Antero Midstream is recognized as
an essential business under various federal, state and local
regulations related to the COVID-19 pandemic. Antero
Midstream has continued to operate as permitted under these
regulations while taking steps to protect the health and safety of
its workers. Antero Midstream has implemented protocols to
reduce the risk of an outbreak within its field operations, and
these protocols have not reduced Antero Resources' production or
Antero Midstream's throughput in a significant manner. A
substantial portion of the Company's non-field level
employees continue to operate in remote work from home
arrangements, and Antero Midstream has been able to maintain a
consistent level of effectiveness through these arrangements,
including maintaining day-to-day operations, its financial
reporting systems and its internal control over financial
reporting. For more information, please see Antero Midstream's
Quarterly Report on Form 10-Q for the quarter ended June 30, 2020.
Updated Capital Budget and Free Cash Flow Guidance
Antero Midstream announced a reduction in its 2020 capital
budget to a range of $200 to
$215 million from the original budget
of $300 to $325 million and previously revised budget of
$215 to $240
million. The capital budget assumes a sequential reduction
in capital expenditures in the second half of 2020 as compared to
the first half of 2020 and contemplates a 2021 Antero Resources
development plan that maintains flat year-over-year net production.
As a result of the capital budget reduction, Antero Midstream is
increasing Free Cash Flow guidance (before return of capital and
changes in working capital) to $445
to $475 million from the original
guidance of $375 to $425 million and previously revised guidance of
$420 to $450
million. All guidance not discussed in this release,
including Antero Midstream's Net Loss, Adjusted Net Income,
Adjusted EBITDA and Distributable Cash Flow guidance, is unchanged
from previously stated guidance.
Second Quarter 2020 Financial Results
Low pressure gathering volumes for the second quarter of 2020
averaged 2,869 MMcf/d, an 8% increase as compared to the prior year
quarter. Low pressure gathering volumes were in excess of the
second quarter 2020 growth incentive fee threshold of 2,700 MMcf/d,
resulting in a $12 million rebate to
Antero Resources. Compression volumes for the second quarter of
2020 averaged 2,712 MMcf/d, a 13% increase as compared to the
second quarter of 2019. High pressure gathering volumes for
the second quarter of 2020 averaged 2,839 MMcf/d, an 8% increase
compared to the second quarter of 2019. Fresh water delivery
volumes averaged 102 MBbl/d during the quarter, a 16% decrease
compared to the second quarter of 2019.
Gross processing volumes from the 50/50 processing and
fractionation joint venture with MarkWest (a wholly owned
subsidiary of MPLX) (the "Joint Venture") averaged 1,404 MMcf/d for
the second quarter of 2020, a 42% increase compared to the prior
year quarter. Joint Venture processing capacity was 100%
utilized during the quarter. Gross Joint Venture
fractionation volumes averaged 33 MBbl/d, a 22% increase compared
to the prior year quarter.
|
|
Three Months
Ended
June
30,
|
|
|
Average Daily
Volumes:
|
|
2019
|
|
2020
|
|
%
Change
|
Low Pressure Gathering
(MMcf/d)
|
|
2,662
|
|
2,869
|
|
8%
|
Compression
(MMcf/d)
|
|
2,396
|
|
2,712
|
|
13%
|
High Pressure
Gathering (MMcf/d)
|
|
2,620
|
|
2,839
|
|
8%
|
Fresh Water Delivery
(MBbl/d)
|
|
122
|
|
102
|
|
(16)%
|
Gross Joint Venture
Processing (MMcf/d)
|
|
986
|
|
1,404
|
|
42%
|
Gross Joint Venture
Fractionation (MBbl/d)
|
|
27
|
|
33
|
|
22%
|
|
|
|
|
|
|
|
For the three months ended June 30,
2020, revenues were $220
million, comprised of $174
million from the Gathering and Processing segment and
$63 million from the Water Handling
segment, net of $18 million of
amortization of customer relationships. Water Handling revenues
include $26 million from wastewater
handling and high rate water transfer services.
Direct operating expenses for the Gathering and Processing and
Water Handling segments were $14
million and $28 million,
respectively, for a total of $42
million, compared to $64
million in total direct operating expenses in the prior year
quarter. Water Handling operating expenses include $26 million from wastewater handling and high
rate water transfer services. The decrease in direct operating
expenses was driven by lower per unit gathering and fresh water
delivery operating expenses as well as lower costs associated with
flowback and produced water. General and administrative expenses
excluding equity-based compensation were $10
million during the second quarter of 2020. Total
operating expenses included $3
million of equity compensation expense, and $28 million of depreciation.
Net income was $88 million, or
$0.19 per share, representing a 36%
increase compared to the prior year quarter. Net income
adjusted for amortization of customer relationships, or Adjusted
Net Income, was $106 million.
Adjusted Net Income per share was $0.22 per share, representing a 36% increase
compared to the prior year quarter. Adjusted EBITDA was
$201 million, a 2% decrease compared
to the prior year quarter. Antero Midstream only received two
monthly Joint Venture distributions during the quarter compared to
three monthly distributions received in prior quarters, resulting
in a $(7) million reduction in
Adjusted EBITDA. Adjusted EBITDA also included $2 million of Antero Clearwater Facility idling
costs during the second quarter. Cash interest paid was
$7 million. The increase in cash
reserved for bond interest during the quarter was $27 million. Maintenance capital expenditures
during the quarter totaled $15
million and distributable cash flow was $152 million. Based on the previously declared
dividend of $0.3075 per share, Antero
Midstream's Distributable Cash Flow coverage ratio was
approximately 1.0x.
The following table reconciles net income to Adjusted Net
Income, Adjusted EBITDA and Distributable Cash Flow as used in this
release (in thousands):
|
|
|
|
|
|
|
|
|
Three Months
Ended June
30,
|
|
|
|
2019
|
|
|
2020
|
Net
income
|
|
$
|
69,274
|
|
|
88,441
|
Amortization of
customer relationships
|
|
|
8,534
|
|
|
17,606
|
Impairment
expense
|
|
|
594
|
|
|
—
|
Adjusted Net
Income
|
|
|
78,402
|
|
|
106,047
|
|
|
|
|
|
|
|
Net
Income
|
|
|
69,274
|
|
|
88,441
|
Interest
expense
|
|
|
31,521
|
|
|
35,311
|
Provision for income
tax expense
|
|
|
30,419
|
|
|
31,921
|
Amortization of
customer relationships
|
|
|
8,534
|
|
|
17,606
|
Depreciation
expense
|
|
|
36,447
|
|
|
27,745
|
Impairment
expense
|
|
|
594
|
|
|
—
|
Accretion and change in
fair value of contingent acquisition consideration
|
|
|
2,366
|
|
|
61
|
Equity-based
compensation
|
|
|
21,543
|
|
|
2,697
|
Loss on asset
sale
|
|
|
—
|
|
|
240
|
Equity in earnings of
unconsolidated affiliates
|
|
|
(13,623)
|
|
|
(20,947)
|
Distributions from
unconsolidated affiliates
|
|
|
19,085
|
|
|
18,200
|
Adjusted
EBITDA
|
|
|
206,160
|
|
|
201,275
|
Interest
paid
|
|
|
(11,896)
|
|
|
(7,056)
|
Increase in cash
reserved for bond interest (1)
|
|
|
(18,390)
|
|
|
(27,422)
|
Maintenance capital
expenditures (2)
|
|
|
(17,909)
|
|
|
(14,907)
|
Employee tax
withholding for settlement of equity compensation awards
|
|
|
(1,827)
|
|
|
(366)
|
Distributable Cash
Flow
|
|
$
|
156,138
|
|
|
151,524
|
|
|
|
|
|
|
|
Total Aggregate
Dividends Declared
|
|
$
|
154,093
|
|
|
146,554
|
|
|
|
|
|
|
|
Distributable Cash
Flow Coverage Ratio
|
|
|
1.0x
|
|
|
1.0x
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
206,160
|
|
|
201,275
|
Interest
paid
|
|
|
(11,896)
|
|
|
(7,056)
|
Increase in cash
reserved for bond interest (1)
|
|
|
(18,390)
|
|
|
(27,422)
|
Total capital
expenditures
|
|
|
(160,378)
|
|
|
(59,001)
|
Free Cash Flow
(before return of capital and changes in working
capital)
|
|
$
|
15,496
|
|
|
107,796
|
|
|
|
|
|
|
|
|
|
|
1)
|
Cash reserved for
bond interest expense on Antero Midstream's senior notes
outstanding during the period that is paid on a semi-annual
basis.
|
2)
|
Maintenance capital
expenditures represent the portion of our estimated capital
expenditures associated with (i) the connection of new wells to our
gathering and processing systems that we believe will be necessary
to offset the natural production declines Antero Resources will
experience on all of its wells over time, and (ii) water delivery
to new wells necessary to maintain the average throughput volume on
our systems.
|
Gathering and Processing — During the
second quarter of 2020, Antero Midstream connected 44 wells to
its gathering system. In addition, Antero Midstream added 240
MMcf/d of compression capacity in the Marcellus during the quarter
bringing its total compression capacity to 3.1 Bcf/d. Antero
Midstream's compression capacity was approximately 91% utilized
during the quarter.
Water Handling— Antero Midstream's
Marcellus water delivery systems serviced 22 well completions
during the second quarter of 2020, a 12% decrease from the prior
year quarter.
Balance Sheet and Liquidity
As of June 30, 2020, Antero
Midstream had approximately $1.16
billion drawn on its $2.13
billion bank credit facility, resulting in approximately
$970 million of liquidity. Antero
Midstream's Net Debt to trailing twelve months pro forma Adjusted
EBITDA ("Leverage") was 3.7x as of June 30,
2020.
Capital Investments
Total capital expenditures including investments in the Joint
Venture were $59 million during the
second quarter of 2020. Gathering, compression, and water
infrastructure capital investments totaled $49 million and investments in unconsolidated
affiliates for the Joint Venture were $10
million. Of the $49 million
invested in gathering, compression, and water infrastructure,
$43 million was in gathering and
compression assets and $6 million was
in water the handling assets.
Michael Kennedy, CFO of Antero
Midstream, said, "The 63% year-over-year reduction in capital
expenditures highlights our just-in-time capital investment
philosophy that quickly adapts to changes in Antero Resources
development plan. This allowed Antero Midstream to generate
$108 million of Free Cash Flow before
return of capital and changes in working capital. Importantly,
after the $156 million of return of
capital to shareholders and $39
million tax reimbursement, Antero Midstream's Net Debt and
Leverage were flat quarter-over-quarter at $3.1 billion and 3.7x, respectively."
Conference Call
A conference call for Antero Midstream is scheduled on
Thursday, July 30, 2020 at
10:00 am MT to discuss the financial
and operational results. A brief Q&A session for security
analysts will immediately follow the discussion of the results for
the quarter. To participate in the call, dial in 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 6,
2020 at 10:00 am MT at
877-660-6853 (U.S.) or 201-612-7415 (International) using the
conference ID: 13703839. 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 6, 2020 at 10:00 am
MT.
Non-GAAP Financial Measures and Definitions
Antero Midstream uses certain non-GAAP financial measures.
Antero Midstream defines Adjusted Net Income as net income plus
amortization of customer contracts and impairment expenses. Antero
Midstream uses Adjusted Net Income to assess the operating
performance of its assets. Antero Midstream defines Adjusted EBITDA
as net income before amortization of customer relationships,
impairment expense, interest expense, provision for income tax
expense, loss on asset sale, depreciation expense, accretion,
equity-based compensation expense, excluding equity in earnings of
unconsolidated affiliates, and including cash distributions from
unconsolidated affiliates.
Antero Midstream uses Adjusted EBITDA to assess:
- the financial performance of Antero Midstream's assets, without
regard to financing methods, capital structure or historical cost
basis;
- its operating performance and return on capital as compared to
other publicly traded companies in the midstream energy
sector, without regard to financing or capital structure; and
- the viability of acquisitions and other capital expenditure
projects.
Antero Midstream defines Free Cash Flow as Adjusted EBITDA less
interest paid, decrease in cash reserved for bond interest and
capital expenditures. Free Cash Flow is before dividend payments,
share repurchases and changes in working capital. Antero Midstream
uses Free Cash Flow as a performance metric to compare the cash
generating performance of Antero Midstream from period to
period.
Antero Midstream's defines Distributable Cash Flow as Adjusted
EBITDA less interest paid, increase in cash reserved for bond
interest, income tax withholding upon vesting of equity-based
compensation awards, and ongoing maintenance capital expenditures
paid. Antero Midstream uses Distributable Cash Flow as a
performance metric to compare the cash generating performance of
Antero Midstream from period to period and to compare the cash
generating performance for specific periods to the cash dividends
(if any) that are expected to be paid to shareholders.
Distributable Cash Flow does not reflect changes in working capital
balances.
Adjusted EBITDA, Adjusted Net Income, Free Cash Flow, and
Distributable Cash Flow are non-GAAP financial measures. The
GAAP measure most directly comparable to such measures is Net
Income. Such non-GAAP financial measures should not be
considered as alternatives to the GAAP measure of Net Income.
The presentations of such measures are not made in accordance with
GAAP and have important limitations as analytical tools because
they include some, but not all, items that affect Net Income.
You should not consider any or all such measures in isolation or as
a substitute for analyses of results as reported under GAAP.
Antero Midstream's definitions of such measures may not be
comparable to similarly titled measures of other companies.
Antero Midstream defines Net Debt as consolidated total debt
less cash and cash equivalents. Antero Midstream views Net
Debt as an important indicator in evaluating Antero Midstream's
financial leverage.
Antero Midstream has not included a reconciliation of Free Cash
Flow to the nearest GAAP financial measure for 2020 because it
cannot do so without unreasonable effort and any attempt to do so
would be inherently imprecise. Antero Midstream is able to forecast
the following reconciling items between such measures and Net
Income (in thousands):
|
Twelve Months
Ending
December 31,
2020
|
|
Low
|
|
High
|
|
Depreciation
expense
|
$
|
110
|
—
|
$
|
120
|
|
Equity-based
compensation expense
|
|
10
|
—
|
|
15
|
|
Interest
expense
|
|
150
|
—
|
|
160
|
|
Amortization of
customer relationships
|
|
70
|
—
|
|
75
|
|
Distributions from
unconsolidated affiliates
|
|
90
|
—
|
|
100
|
|
|
|
|
|
|
|
|
|
The following table reconciles consolidated total debt to
consolidated net debt ("Net Debt") as used in this release (in
thousands):
|
|
|
|
|
|
June 30,
2020
|
|
Bank credit
facility
|
|
$1,155,000
|
|
5.375% senior notes
due 2024
|
|
652,600
|
|
5.75% senior notes
due 2027
|
|
653,250
|
|
5.75% senior notes
due 2028
|
|
650,000
|
|
Net unamortized debt
issuance costs
|
|
(22,065)
|
|
Consolidated total
debt
|
|
$3,088,785
|
|
Cash and cash
equivalents
|
|
(2,997)
|
|
Consolidated net
debt
|
|
$3,085,788
|
|
|
|
|
|
|
|
The following table reconciles cash paid for capital
expenditures and accrued capital expenditures during the period (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30,
|
|
|
|
|
2019
|
|
2020
|
|
Capital expenditures
(as reported on a cash basis)
|
|
|
$
|
162,865
|
|
|
65,729
|
|
Change in accrued
capital costs
|
|
|
|
(2,487)
|
|
|
(6,728)
|
|
Capital
expenditures (accrual basis)
|
|
|
$
|
160,378
|
|
|
59,001
|
|
The following table reconciles net loss to Adjusted EBITDA for
the last twelve months as used in this release (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
12 months
ended June 30,
2020
|
Net
Loss
|
$
|
|
(735,903)
|
Amortization of
customer relationships
|
|
|
70,545
|
Impairment
expense
|
|
|
1,425,910
|
Interest
expense
|
|
|
145,606
|
Provision for income
tax benefit
|
|
|
(242,496)
|
Depreciation
expense
|
|
|
112,621
|
Accretion and change in
fair value of contingent acquisition consideration
|
|
|
4,941
|
Equity-based
compensation
|
|
|
46,586
|
Loss on asset
sale
|
|
|
240
|
Equity in earnings of
unconsolidated affiliates
|
|
|
(73,080)
|
Distributions from
unconsolidated affiliates
|
|
|
82,288
|
Conflicts committee
legal & advisory fees
|
|
|
2,278
|
Adjusted
EBITDA
|
$
|
|
839,536
|
|
|
|
|
|
|
|
|
Antero Midstream Corporation is a Delaware corporation that owns, operates and
develops midstream gathering, compression, processing and
fractionation assets located in West
Virginia and Ohio, as well
as integrated water assets that primarily service Antero Resources
Corporation's properties. The Company's website is located at
www.anteromidstream.com.
This release includes "forward-looking statements."
Such forward-looking statements are subject to a number of risks
and uncertainties, many of which are not under Antero Midstream's
control. All statements, except for statements of historical
fact, made in this release regarding activities, events or
developments Antero Midstream expects, believes or anticipates will
or may occur in the future, such as Antero Midstream's ability to
execute its business plan and return capital to its shareholders,
information regarding potential incremental flowback and produced
water services, information regarding long-term financial and
operating outlooks for Antero Midstream and Antero Resources and
information regarding Antero Resources' expected future growth and
its ability to meet its drilling and development plan are
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. All forward-looking statements speak only as of
the date of this release. Although Antero Midstream believes
that the plans, intentions and expectations reflected in or
suggested by the forward-looking statements are reasonable, there
is no assurance that these plans, intentions or expectations will
be achieved. Therefore, actual outcomes and results could
materially differ from what is expressed, implied or forecast in
such statements. Except as required by law, Antero Midstream
expressly disclaims any obligation to and does not intend to
publicly update or revise any forward-looking statements.
Antero Midstream cautions you that these forward-looking
statements are subject to all of the risks and uncertainties
incident to 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 events,
including the COVID-19 pandemic, potential shut-ins of production
by producers due to lack of downstream demand or storage
capacity, and the other risks described under the heading
"Item 1A. Risk Factors" in Antero Midstream's Annual Report on Form
10-K for the year ended December 31,
2019 and its subsequently filed Quarterly Reports on Form
10-Q.
ANTERO MIDSTREAM
CORPORATION Condensed
Consolidated Balance Sheets
December 31, 2019 and June 30, 2020
(In thousands)
|
|
|
|
|
(Unaudited)
|
|
|
|
December 31,
|
|
June 30,
|
|
|
|
2019
|
|
2020
|
|
Assets
|
Cash and cash
equivalents
|
|
$
|
1,235
|
|
|
2,997
|
|
Accounts
receivable–Antero Resources
|
|
|
101,029
|
|
|
76,088
|
|
Accounts
receivable–third party
|
|
|
4,574
|
|
|
3,392
|
|
Income tax
receivable
|
|
|
—
|
|
|
17,547
|
|
Other current
assets
|
|
|
1,720
|
|
|
645
|
|
Total current
assets
|
|
|
108,558
|
|
|
100,669
|
|
Property and
equipment, net
|
|
|
3,273,410
|
|
|
3,249,643
|
|
Investments in
unconsolidated affiliates
|
|
|
709,639
|
|
|
729,823
|
|
Deferred tax
asset
|
|
|
103,231
|
|
|
160,579
|
|
Customer
relationships
|
|
|
1,498,119
|
|
|
1,462,908
|
|
Goodwill
|
|
|
575,461
|
|
|
—
|
|
Other assets,
net
|
|
|
14,460
|
|
|
11,433
|
|
Total
assets
|
|
$
|
6,282,878
|
|
|
5,715,055
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable–Antero Resources
|
|
$
|
3,146
|
|
|
2,714
|
|
Accounts payable–third
party
|
|
|
6,645
|
|
|
19,822
|
|
Accrued
liabilities
|
|
|
104,188
|
|
|
72,284
|
|
Contingent acquisition
consideration
|
|
|
125,000
|
|
|
—
|
|
Other current
liabilities
|
|
|
3,105
|
|
|
3,325
|
|
Total current
liabilities
|
|
|
242,084
|
|
|
98,145
|
|
Long-term
liabilities:
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
2,892,249
|
|
|
3,088,785
|
|
Other
|
|
|
5,131
|
|
|
4,943
|
|
Total
liabilities
|
|
|
3,139,464
|
|
|
3,191,873
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
|
|
|
Preferred stock, $0.01
par value: 100,000 authorized at December 31, 2019 and June 30,
2020, respectively
|
|
|
|
|
|
|
|
Series A non-voting
perpetual preferred stock; 12 designated and 10 issued and
outstanding at both December 31, 2019 and June 30, 2020
|
|
|
—
|
|
|
—
|
|
Common stock, $0.01
par value; 2,000,000 authorized; 484,042 and 476,486 issued and
outstanding at December 31, 2019 and June 30, 2020,
respectively
|
|
|
4,840
|
|
|
4,765
|
|
Additional paid-in
capital
|
|
|
3,480,139
|
|
|
3,164,474
|
|
Accumulated
loss
|
|
|
(341,565)
|
|
|
(646,057)
|
|
Total stockholders'
equity
|
|
|
3,143,414
|
|
|
2,523,182
|
|
Total liabilities and
stockholders' equity
|
|
$
|
6,282,878
|
|
|
5,715,055
|
|
ANTERO MIDSTREAM
CORPORATION Condensed Consolidated Statements of Operations
and Comprehensive Income
Three Months Ended June 30, 2019 and 2020
(In thousands, except per share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
2019
|
|
2020
|
|
Revenue:
|
|
|
|
|
|
|
|
Gathering and
compression–Antero Resources
|
|
$
|
168,925
|
|
|
173,991
|
|
Water handling–Antero
Resources
|
|
|
95,181
|
|
|
63,351
|
|
Water handling and
treatment–third party
|
|
|
46
|
|
|
—
|
|
Amortization of
customer relationships
|
|
|
(8,534)
|
|
|
(17,606)
|
|
Total
revenue
|
|
|
255,618
|
|
|
219,736
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Direct
operating
|
|
|
63,998
|
|
|
42,067
|
|
General and
administrative (including $21,543 and $2,697 of equity-based
compensation in 2019 and 2020, respectively)
|
|
|
34,622
|
|
|
12,422
|
|
Facility
idling
|
|
|
—
|
|
|
2,475
|
|
Impairment of property
and equipment
|
|
|
594
|
|
|
—
|
|
Depreciation
|
|
|
36,447
|
|
|
27,745
|
|
Accretion and change
in fair value of contingent acquisition consideration
|
|
|
2,297
|
|
|
—
|
|
Accretion of asset
retirement obligations
|
|
|
69
|
|
|
61
|
|
Loss on asset
sale
|
|
|
—
|
|
|
240
|
|
Total operating
expenses
|
|
|
138,027
|
|
|
85,010
|
|
Operating
income
|
|
|
117,591
|
|
|
134,726
|
|
Interest expense,
net
|
|
|
(31,521)
|
|
|
(35,311)
|
|
Equity in earnings of
unconsolidated affiliates
|
|
|
13,623
|
|
|
20,947
|
|
Income before income
taxes
|
|
|
99,693
|
|
|
120,362
|
|
Provision for income
tax expense
|
|
|
(30,419)
|
|
|
(31,921)
|
|
Net income and
comprehensive income
|
|
$
|
69,274
|
|
|
88,441
|
|
|
|
|
|
|
|
|
|
Net income per
share–basic
|
|
$
|
0.14
|
|
|
0.19
|
|
Net income per
share–diluted
|
|
$
|
0.14
|
|
|
0.18
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
|
|
506,816
|
|
|
476,836
|
|
Diluted
|
|
|
507,767
|
|
|
478,837
|
|
ANTERO MIDSTREAM
CORPORATION Selected Operating Data
Three Months Ended June 30, 2019 and 2020
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Amount of
Increase
|
|
Percentage
|
|
|
2019
|
|
2020
|
|
or
Decrease
|
|
Change
|
Operating
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gathering—low pressure
(MMcf)
|
|
|
242,266
|
|
|
261,039
|
|
|
18,773
|
|
|
8
|
%
|
Gathering—high
pressure (MMcf)
|
|
|
238,406
|
|
|
258,380
|
|
|
19,974
|
|
|
8
|
%
|
Compression
(MMcf)
|
|
|
218,020
|
|
|
246,790
|
|
|
28,770
|
|
|
13
|
%
|
Fresh water delivery
(MBbl)
|
|
|
11,147
|
|
|
9,318
|
|
|
(1,829)
|
|
|
(16)
|
%
|
Treated water
(MBbl)
|
|
|
2,658
|
|
|
—
|
|
|
(2,658)
|
|
|
*
|
|
Other fluid handling
(MBbl)
|
|
|
5,086
|
|
|
5,433
|
|
|
347
|
|
|
7
|
%
|
Wells serviced by
fresh water delivery
|
|
|
25
|
|
|
22
|
|
|
(3)
|
|
|
(12)
|
%
|
Gathering—low pressure
(MMcf/d)
|
|
|
2,662
|
|
|
2,869
|
|
|
207
|
|
|
8
|
%
|
Gathering—high
pressure (MMcf/d)
|
|
|
2,620
|
|
|
2,839
|
|
|
219
|
|
|
8
|
%
|
Compression
(MMcf/d)
|
|
|
2,396
|
|
|
2,712
|
|
|
316
|
|
|
13
|
%
|
Fresh water delivery
(MBbl/d)
|
|
|
122
|
|
|
102
|
|
|
(20)
|
|
|
(16)
|
%
|
Treated water
(MBbl/d)
|
|
|
29
|
|
|
—
|
|
|
(29)
|
|
|
*
|
|
Other fluid handling
(MBbl/d)
|
|
|
56
|
|
|
60
|
|
|
4
|
|
|
7
|
%
|
Average realized
fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average gathering—low
pressure fee ($/Mcf)
|
|
$
|
0.33
|
|
|
0.33
|
|
|
—
|
|
|
—
|
%
|
Average gathering—high
pressure fee ($/Mcf)
|
|
$
|
0.20
|
|
|
0.20
|
|
|
—
|
|
|
—
|
%
|
Average compression
fee ($/Mcf)
|
|
$
|
0.19
|
|
|
0.20
|
|
|
0.01
|
|
|
5
|
%
|
Average fresh water
delivery fee ($/Bbl)
|
|
$
|
3.90
|
|
|
3.96
|
|
|
0.06
|
|
|
2
|
%
|
Average treatment fee
($/Bbl)
|
|
$
|
4.50
|
|
|
—
|
|
|
(4.50)
|
|
|
*
|
|
Joint Venture
Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Processing—Joint
Venture (MMcf)
|
|
|
89,770
|
|
|
127,791
|
|
|
38,021
|
|
|
42
|
%
|
Fractionation—Joint
Venture (MBbl)
|
|
|
2,470
|
|
|
3,014
|
|
|
544
|
|
|
22
|
%
|
Processing—Joint
Venture (MMcf/d)
|
|
|
986
|
|
|
1,404
|
|
|
418
|
|
|
42
|
%
|
Fractionation—Joint
Venture (MBbl/d)
|
|
|
27
|
|
|
33
|
|
|
6
|
|
|
22
|
%
|
|
* Not meaningful or
applicable.
|
ANTERO MIDSTREAM
CORPORATION Condensed Consolidated Results of Segment
Operations
Three Months Ended June 30, 2020
(Unaudited)
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gathering and
|
|
Water
|
|
|
|
Consolidated
|
|
|
|
Processing
|
|
Handling
|
|
Unallocated
|
|
Total
|
|
Three months ended
June 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue–Antero
Resources
|
|
$
|
185,991
|
|
|
63,351
|
|
|
—
|
|
|
249,342
|
|
Gathering—low pressure
rebate
|
|
|
(12,000)
|
|
|
—
|
|
|
—
|
|
|
(12,000)
|
|
Amortization of
customer relationships
|
|
|
(9,239)
|
|
|
(8,367)
|
|
|
—
|
|
|
(17,606)
|
|
Total
revenues
|
|
|
164,752
|
|
|
54,984
|
|
|
—
|
|
|
219,736
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
operating
|
|
|
14,059
|
|
|
28,008
|
|
|
—
|
|
|
42,067
|
|
General and
administrative (excluding equity-based compensation)
|
|
|
5,440
|
|
|
2,694
|
|
|
1,591
|
|
|
9,725
|
|
Facility
idling
|
|
|
—
|
|
|
2,475
|
|
|
—
|
|
|
2,475
|
|
Equity-based
compensation
|
|
|
2,266
|
|
|
431
|
|
|
—
|
|
|
2,697
|
|
Depreciation
|
|
|
14,406
|
|
|
13,339
|
|
|
—
|
|
|
27,745
|
|
Accretion of asset
retirement obligations
|
|
|
—
|
|
|
61
|
|
|
—
|
|
|
61
|
|
Loss on asset
sale
|
|
|
—
|
|
|
240
|
|
|
—
|
|
|
240
|
|
Total
expenses
|
|
|
36,171
|
|
|
47,248
|
|
|
1,591
|
|
|
85,010
|
|
Operating
income
|
|
|
128,581
|
|
|
7,736
|
|
|
(1,591)
|
|
|
134,726
|
|
Other income
(expenses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
—
|
|
|
—
|
|
|
(35,311)
|
|
|
(35,311)
|
|
Equity in earnings of
unconsolidated affiliates
|
|
|
20,947
|
|
|
—
|
|
|
—
|
|
|
20,947
|
|
Income before
taxes
|
|
|
149,528
|
|
|
7,736
|
|
|
(36,902)
|
|
|
120,362
|
|
Provision for income
tax expense
|
|
|
—
|
|
|
—
|
|
|
(31,921)
|
|
|
(31,921)
|
|
Net income and
comprehensive income
|
|
$
|
149,528
|
|
|
7,736
|
|
|
(68,823)
|
|
|
88,441
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
$
|
201,275
|
|
ANTERO MIDSTREAM
CORPORATION Condensed Consolidated Statements of Cash
Flows
Six Months Ended June 30, 2019 and 2020
(In thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
2019
|
|
2020
|
|
Cash flows provided
by (used in) operating activities:
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
78,922
|
|
|
(304,492)
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Distributions from
Antero Midstream Partners LP, prior to the Transactions
|
|
|
43,492
|
|
|
—
|
|
Depreciation
|
|
|
44,097
|
|
|
55,088
|
|
Payment of contingent
consideration in excess of acquisition date fair value
|
|
|
—
|
|
|
(34,342)
|
|
Accretion and change
in fair value of contingent acquisition consideration
|
|
|
3,425
|
|
|
103
|
|
Impairment
|
|
|
594
|
|
|
664,544
|
|
Deferred income
taxes
|
|
|
28,042
|
|
|
(56,408)
|
|
Equity-based
compensation
|
|
|
32,966
|
|
|
6,035
|
|
Equity in earnings of
unconsolidated affiliates
|
|
|
(16,503)
|
|
|
(40,024)
|
|
Distributions from
unconsolidated affiliates
|
|
|
23,860
|
|
|
41,828
|
|
Amortization of
customer relationships
|
|
|
10,315
|
|
|
35,211
|
|
Amortization of
deferred financing costs
|
|
|
1,102
|
|
|
2,190
|
|
Settlement of asset
retirement obligations
|
|
|
—
|
|
|
(601)
|
|
Loss on asset
sale
|
|
|
—
|
|
|
240
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable–Antero Resources
|
|
|
38,414
|
|
|
24,941
|
|
Accounts
receivable–third party
|
|
|
9
|
|
|
1,089
|
|
Income tax
receivable
|
|
|
—
|
|
|
(17,547)
|
|
Other current
assets
|
|
|
(1,867)
|
|
|
930
|
|
Accounts
payable–Antero Resources
|
|
|
973
|
|
|
(432)
|
|
Accounts payable–third
party
|
|
|
(4,629)
|
|
|
5,495
|
|
Income taxes
payable
|
|
|
(15,370)
|
|
|
—
|
|
Accrued
liabilities
|
|
|
(15,678)
|
|
|
(21,701)
|
|
Net cash provided by
operating activities
|
|
|
252,164
|
|
|
362,147
|
|
Cash flows provided
by (used in) investing activities:
|
|
|
|
|
|
|
|
Additions to gathering
systems and facilities
|
|
|
(89,206)
|
|
|
(103,937)
|
|
Additions to water
handling systems
|
|
|
(51,984)
|
|
|
(19,477)
|
|
Investments in
unconsolidated affiliates
|
|
|
(103,409)
|
|
|
(21,988)
|
|
Cash received on
acquisition of Antero Midstream Partners LP
|
|
|
619,532
|
|
|
—
|
|
Cash consideration
paid to Antero Midstream Partners LP unitholders
|
|
|
(598,709)
|
|
|
—
|
|
Cash received in asset
sale
|
|
|
—
|
|
|
123
|
|
Change in other
assets
|
|
|
2,375
|
|
|
1,938
|
|
Net cash used in
investing activities
|
|
|
(221,401)
|
|
|
(143,341)
|
|
Cash flows provided
by (used in) financing activities:
|
|
|
|
|
|
|
|
Distributions to
unitholders and dividends to stockholders
|
|
|
(182,625)
|
|
|
(296,395)
|
|
Distributions to
Series B unitholders
|
|
|
(3,720)
|
|
|
—
|
|
Distributions to
preferred stockholders
|
|
|
(98)
|
|
|
(275)
|
|
Repurchases of common
stock
|
|
|
—
|
|
|
(24,713)
|
|
Issuance of senior
notes
|
|
|
650,000
|
|
|
—
|
|
Payments of deferred
financing costs
|
|
|
(6,952)
|
|
|
—
|
|
Borrowings
(repayments) on bank credit facilities, net
|
|
|
(480,500)
|
|
|
195,500
|
|
Payment for contingent
acquisition consideration
|
|
|
—
|
|
|
(90,658)
|
|
Employee tax
withholding for settlement of equity compensation awards
|
|
|
(1,828)
|
|
|
(392)
|
|
Other
|
|
|
(71)
|
|
|
(111)
|
|
Net cash used in
financing activities
|
|
|
(25,794)
|
|
|
(217,044)
|
|
Net increase in cash
and cash equivalents
|
|
|
4,969
|
|
|
1,762
|
|
Cash and cash
equivalents, beginning of period
|
|
|
2,822
|
|
|
1,235
|
|
Cash and cash
equivalents, end of period
|
|
$
|
7,791
|
|
|
2,997
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
|
|
|
Cash paid during the
period for interest
|
|
$
|
31,147
|
|
|
74,665
|
|
Cash refund received
(paid) during the period for income taxes
|
|
$
|
(16,001)
|
|
|
38,910
|
|
Increase (decrease) in
accrued capital expenditures and accounts payable for property and
equipment
|
|
$
|
9,447
|
|
|
(3,461)
|
|
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SOURCE Antero Midstream Corporation