DENVER, April 25, 2018 /PRNewswire/ -- Antero
Midstream Partners LP (NYSE: AM) ("Antero Midstream" or the
"Partnership") and Antero Midstream GP LP (NYSE: AMGP)
("AMGP") today released their first quarter 2018 financial and
operating 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
March 31, 2018, which have been filed
with the Securities and Exchange Commission.
Antero Midstream First Quarter 2018 Highlights
Include:
- Net income increased by 44% to $108
million compared to the prior year quarter, or $0.43 per limited partner unit
- Adjusted EBITDA increased by 35% to $161 million compared to the prior year
quarter
- Distributable Cash Flow increased by 43% to $130 million resulting in DCF coverage of
1.3x
- Distributions declared for the quarter were $0.39/unit, a 30% increase compared to the prior
year quarter and the Partnership's thirteenth consecutive
distribution increase since the November
2014 IPO
- Record low pressure gathering and compression volumes of
1,835 MMcf/d and 1,413 MMcf/d representing increases of 11% and
37%, respectively, compared to the prior year quarter
- Fresh water delivery volumes were 221 MBbl/d, a Partnership
record
- Placed Sherwood 9 into service in January 2018 bringing the Joint Venture's
processing capacity to 600 MMcf/d
- Placed two compressor stations into service adding 440
MMcf/d of incremental compression capacity
- Net debt to trailing twelve months Adjusted EBITDA of 2.3x
and $850 million of
liquidity
AMGP First Quarter 2018 Highlights Include:
- Net income increased by 117% to $13
million compared to the prior quarter, or $0.07 per common share
- Distributable Cash Flow increased by 43% to $20 million compared to the prior quarter, driven
by increased IDR cash flow and a reduction in the U.S. federal tax
rate
- Distributions declared for the quarter were $0.108/share, a 44% increase sequentially and the
third consecutive distribution increase since the May 2017 IPO
- No outstanding debt as of March 31,
2018
Commenting on the first quarter 2018 results and outlook for
Antero Midstream, Paul Rady,
Chairman and CEO said, "Antero Midstream reported record gathering,
compression and fresh water delivery volumes for the quarter driven
by the continued growth in production at Antero Resources.
These record volumes increased our Adjusted EBITDA by 35%
compared to last year, allowing us to raise distributions by 30%
while maintaining a strong balance sheet and coverage profile.
Importantly, the first quarter results generated significant
momentum towards achieving our long term Adjusted EBITDA,
distributable cash flow and distribution growth targets at AM and
AMGP."
For a discussion of the non-GAAP financial measures Adjusted
EBITDA, Distributable Cash Flow, and net debt please see "Non-GAAP
Financial Measures."
Antero Midstream First Quarter Financial Results
Low pressure gathering volumes for the first quarter of 2018
averaged 1,835 MMcf/d, an 11% increase as compared to the prior
year quarter and a Partnership record. Compression volumes
for the first quarter of 2018 averaged 1,413 MMcf/d, a 37% increase
as compared to the first quarter of 2017 and a Partnership
record. High pressure gathering volumes for the first quarter
of 2018 averaged 1,765 MMcf/d, a 12% increase over the first
quarter of 2017. 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 a record 221 MBbl/d during the quarter driven by
increased completion activity by Antero Resources. During the
quarter, Antero Midstream serviced 46 well completions with its
fresh water delivery system, a 35% increase compared to the prior
year quarter.
Gross processing volumes from our processing and fractionation
joint venture with MarkWest (a wholly-owned subsidiary of MPLX)
(the "Joint Venture") averaged 519 MMcf/d for the first quarter of
2018, an increase of 905% compared to the prior year quarter.
Gross Joint Venture fractionation volumes averaged 6,163 Bbl/d, a
754% increase compared to the prior year quarter. The increase in
processing and fractionation volumes is driven by an increase in
Antero Resources' rich gas and C3+ NGL volumes.
|
|
Three Months
Ended
March
31,
|
|
|
Average Daily
Volumes:
|
|
2017
|
|
2018
|
|
%
Change
|
Low Pressure Gathering
(MMcf/d)
|
|
1,659
|
|
1,835
|
|
11%
|
Compression
(MMcf/d)
|
|
1,028
|
|
1,413
|
|
37%
|
High Pressure
Gathering (MMcf/d)
|
|
1,581
|
|
1,765
|
|
12%
|
Fresh Water Delivery
(MBbl/d)
|
|
148
|
|
221
|
|
49%
|
Gross Joint Venture
Processing (MMcf/d)
|
|
52
|
|
519
|
|
905%
|
Gross Joint Venture
Fractionation (Bbl/d)
|
|
722
|
|
6,163
|
|
754%
|
For the three months ended March 31,
2018, the Partnership reported revenues of $229 million, comprised of $108 million from the Gathering and Processing
segment and $121 million from the
Water Handling and Treatment segment. Revenues increased 31%
compared to the prior year quarter, driven by growth in throughput
and fresh water delivery volumes. Water Handling and Treatment
segment revenues include $46 million
from wastewater handling and high rate water transfer services
provided to Antero Resources, which are billed at cost plus
3%. The Partnership did not report revenues related to water
treatment at the Antero Clearwater Facility as ongoing
commissioning costs are credited to capital expenditures, net of
treatment fees charged to Antero Resources.
Direct operating expenses for the Gathering and Processing and
Water Handling and Treatment segments were $11 million and $56
million, respectively, for a total of $67 million compared to $48 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, in
line with the prior year quarter. General and administrative
expenses excluding equity-based compensation were $8 million during the first quarter of 2018, in
line with the first quarter of 2017. Total operating expenses
were $118 million, including
$32 million of depreciation and
$4 million of accretion of contingent
acquisition consideration and asset retirement obligations.
Net income for the first quarter of 2018 was $108 million, a 44% increase compared to the
prior year quarter. The increase in net income was driven by growth
in throughput and fresh water delivery volumes. Net income
per limited partner unit was $0.43
per unit, a 23% increase compared to the prior year quarter.
Adjusted EBITDA was $161 million, a
35% increase compared to the prior year quarter. Adjusted
EBITDA for the quarter included $7
million in combined distributions from Stonewall Gathering
LLC and the processing and fractionation Joint Venture. Cash
interest paid was $22 million. Cash
reserved for bond interest during the quarter increased
$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 $17 million.
Distributable Cash Flow was $130
million, a 43% increase over the prior year quarter,
resulting in a DCF coverage ratio of 1.3x.
The following table reconciles net income to Adjusted EBITDA and
Distributable Cash Flow as used in this release (in thousands):
|
Three months
ended
|
March
31,
|
2017
|
|
2018
|
Net
income
|
$
|
75,091
|
|
$
|
108,105
|
Interest
expense
|
|
8,836
|
|
|
11,297
|
Depreciation
expense
|
|
27,536
|
|
|
32,432
|
Accretion of contingent
acquisition consideration
|
|
3,526
|
|
|
3,874
|
Accretion of asset
retirement obligations
|
|
—
|
|
|
34
|
Equity-based
compensation
|
|
6,286
|
|
|
6,211
|
Equity in earnings of
unconsolidated affiliates
|
|
(2,231)
|
|
|
(7,862)
|
Distributions from
unconsolidated affiliates
|
|
—
|
|
|
7,085
|
Adjusted
EBITDA
|
|
119,044
|
|
|
161,176
|
Interest
paid
|
|
(19,668)
|
|
|
(22,348)
|
Decrease in cash
reserved for bond interest (1)
|
|
8,929
|
|
|
8,734
|
Income tax withholding
upon vesting of Antero Midstream Partners LP equity-based
compensation awards(2)
|
|
(1,500)
|
|
|
(1,500)
|
Maintenance capital
expenditures(3)
|
|
(15,903)
|
|
|
(16,488)
|
Distributable Cash
Flow
|
$
|
90,902
|
|
$
|
129,574
|
|
|
|
|
|
|
Distributions
Declared to Antero Midstream Holders
|
|
|
|
|
|
Limited
Partners
|
|
55,753
|
|
|
72,923
|
Incentive distribution
rights
|
|
11,553
|
|
|
28,453
|
Total Aggregate
Distributions
|
$
|
67,306
|
|
$
|
101,376
|
|
|
|
|
|
|
DCF coverage
ratio
|
|
1.35x
|
|
|
1.28x
|
|
|
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.
|
Gathering and Processing —
Antero Midstream placed in service its largest compressor
station to-date, adding an additional 240 MMcf/d of rich gas
compression in the Marcellus. Additionally, the Partnership placed
in service its second compressor station in the Utica Shale, adding
an additional 200 MMcf/d of capacity during the first quarter of
2018. Antero Midstream's total compression capacity at the end of
the first quarter of 2018 was 2.15 Bcf/d in the Marcellus and Utica
combined, with utilization averaging 73% for the quarter.
Additionally, Antero Midstream connected 27 wells to its gathering
system during the quarter. Antero Resources is currently
operating six drilling rigs on Antero Midstream dedicated
acreage.
The Joint Venture brought online the Sherwood 9 processing
plant, its third 200 MMcf/d cryogenic processing plant, during the
quarter increasing the Joint Venture's total processing capacity to
600 MMcf/d. The Joint Venture plans to bring two more processing
plants online by the end of 2018, bringing the Joint Venture's
total processing capacity to 1.0 Bcf/d.
Water Handling and Treatment — Antero
Midstream's Marcellus and Utica fresh water delivery systems
serviced 46 well completions during the first quarter of 2018, a
35% increase from the prior year quarter. Antero Resources is
currently operating five completion crews on Antero Midstream
dedicated acreage. Antero Midstream continued the commissioning
process for the Antero Clearwater Facility during the first quarter
of 2018 and expects to place the facility into full commercial
service in the second quarter of 2018.
Balance Sheet and Liquidity
As of March 31, 2018, Antero
Midstream had $9 million in cash and
$660 million drawn on its
$1.5 billion bank credit facility,
resulting in $850 million of
liquidity. Antero Midstream's net debt to trailing twelve
months Adjusted EBITDA was 2.3x as of March
31, 2018. For a reconciliation of consolidated net
debt to consolidated total debt, the most comparable GAAP measure,
please read "Non-GAAP Financial Measures."
Commenting on Antero Midstream's balance sheet and liquidity,
Michael Kennedy, CFO of Antero
Midstream said, "Antero Midstream continues to maintain a strong
balance sheet with leverage of 2.3x and DCF coverage of 1.3x, in
line with our stated targets. Our attractive partnership-wide
rates of return and excess distributable cash flow have allowed us
to maintain this attractive leverage profile and deliver on our
organic project backlog."
Capital Investments
Capital expenditures, excluding investments in the processing
and fractionation joint venture, were $128
million in the first quarter of 2018 as compared to
$104 million in the first quarter of
2017. Capital invested in gathering systems and related
facilities was $94 million and
capital invested in water handling and treatment assets was
$34 million, including $19 million invested in the Antero Clearwater
Facility. Investments in unconsolidated affiliates for the
Joint Venture were $17 million during
the quarter.
AMGP First Quarter 2018 Financial Results
AMGP's equity in earnings from Antero Midstream Partners, which
reflects the cash distributions from Antero Midstream, was
$28 million for the first quarter of
2018. Net income for the quarter was $13 million. AMGP's cash distributions from
Antero Midstream were $27 million for
first quarter of 2018, net of $0.8
million and $0.4 million of
cash reserved and cash distributed to Series B units of IDR
Holdings LLC, respectively. General and administrative expenses
were $0.9 million, including
$0.5 million of accrued special
committee and legal advisory fees. The provision and reserve for
income taxes was $7 million,
resulting in cash available for distribution of $20 million. The increase in cash available for
distribution is driven by an increase in cash distributions from
Antero Midstream and the reduction in the U.S. federal tax
rate.
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
March 31, 2018
|
Cash distributions
from Antero Midstream Partners LP
|
|
$
|
28,453
|
Cash reserved for
distributions to Series B units of IDR LLC
|
|
|
(826)
|
Cash distribution to
Series B units of IDR LLC
|
|
|
(413)
|
Cash distributions to
Antero Midstream GP LP
|
|
$
|
27,214
|
General and
administrative expenses
|
|
|
(925)
|
Special committee legal
and advisory fees accrued in G&A
expense(1)
|
|
|
491
|
Provision and reserve
for income taxes
|
|
|
(6,659)
|
Cash available for
distribution
|
|
$
|
20,121
|
|
|
|
|
DCF coverage
ratio
|
|
|
1.0x
|
|
|
|
|
Common shares
outstanding
|
|
|
186,188
|
|
|
|
|
Cash distribution
per common share
|
|
$
|
0.108
|
|
|
1)
|
Represents
non-recurring accrued legal and advisory fees associated with the
ongoing special committee process as disclosed on February 26,
2018.
|
Conference Call
A joint conference call for Antero Midstream and AMGP is
scheduled on Thursday, April 26, 2018
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 Thursday, May 3,
2018 at 10:00 am MT at
1-844-512-2921 (U.S.) or 1-412-317-6671 (International) using the
passcode 10117427.
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
Thursday, May 3, 2018 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 and Definitions
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,
accretion of asset retirement obligations, 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 the Partnership'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 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.
"Segment Adjusted EBITDA" is also used by our management team
for various purposes, including as a measure of operating
performance and as a basis for strategic planning and forecasting.
Segment Adjusted EBITDA is a non-GAAP financial measure that we
define as operating income before equity-based compensation
expense, interest expense, depreciation expense, accretion,
excluding equity in earnings of unconsolidated affiliates, and
including cash distributions from unconsolidated affiliates.
Operating income represents net income before interest expense and
equity in earnings of unconsolidated affiliates, and is the most
directly comparable GAAP financial measure to Segment Adjusted
EBITDA because we do not account for interest expense on a segment
basis.
The Partnership defines consolidated net debt as consolidated
total debt less cash and cash equivalents. Antero Midstream views
consolidated net debt as an important indicator in evaluating the
Partnership's financial leverage.
The following table reconciles consolidated total debt to
consolidated net debt as used in this release (in thousands):
|
|
March
31,
|
|
|
2018
|
|
|
|
|
Bank credit
facility
|
|
$
|
660,000
|
5.375% AM senior
notes due 2024
|
|
|
650,000
|
Net unamortized debt
issuance costs
|
|
|
(8,720)
|
Consolidated total
debt
|
|
$
|
1,301,280
|
Cash and cash
equivalents
|
|
|
(8,714)
|
Consolidated net
debt
|
|
$
|
1,292,566
|
The following table reconciles net income to Adjusted EBITDA for
the twelve months ended March 31,
2018 as used in this release (in thousands):
|
|
Twelve Months
Ended
March
31,
|
|
|
2018
|
|
|
|
Net income
|
$
|
340,328
|
Interest expense
|
|
40,018
|
Impairment of property and
equipment expense
|
|
23,431
|
Depreciation
expense
|
|
124,458
|
Accretion of
contingent acquisition consideration
|
|
13,824
|
Accretion of asset
retirement obligations
|
|
34
|
Equity-based compensation
|
|
27,208
|
Equity in earnings of unconsolidated affiliate
|
|
(25,825)
|
Distributions from
unconsolidated affiliates
|
|
27,280
|
Adjusted
EBITDA
|
$
|
570,756
|
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, 2017.
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, 2017 and March 31,
2018
|
(Unaudited)
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
March
31,
|
|
|
|
2017
|
|
2018
|
|
Assets
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
8,363
|
|
|
8,714
|
|
Accounts
receivable–Antero Resources
|
|
|
110,182
|
|
|
111,001
|
|
Accounts
receivable–third party
|
|
|
1,170
|
|
|
1,245
|
|
Prepaid
expenses
|
|
|
670
|
|
|
1,157
|
|
Total
current assets
|
|
|
120,385
|
|
|
122,117
|
|
Property and
equipment, net
|
|
|
2,605,602
|
|
|
2,678,725
|
|
Investments in
unconsolidated affiliates
|
|
|
303,302
|
|
|
321,468
|
|
Other assets,
net
|
|
|
12,920
|
|
|
13,792
|
|
Total
assets
|
|
$
|
3,042,209
|
|
|
3,136,102
|
|
|
|
|
|
|
|
|
|
Liabilities and
Partners' Capital
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts payable–third
party
|
|
$
|
8,642
|
|
|
7,376
|
|
Accounts payable–Antero
Resources
|
|
|
6,459
|
|
|
2,765
|
|
Accrued
liabilities
|
|
|
106,006
|
|
|
70,369
|
|
Other current
liabilities
|
|
|
209
|
|
|
228
|
|
Total
current liabilities
|
|
|
121,316
|
|
|
80,738
|
|
Long-term
liabilities:
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
1,196,000
|
|
|
1,301,280
|
|
Contingent acquisition
consideration
|
|
|
208,014
|
|
|
211,888
|
|
Asset retirement
obligations
|
|
|
—
|
|
|
3,080
|
|
Other
|
|
|
410
|
|
|
357
|
|
Total
liabilities
|
|
|
1,525,740
|
|
|
1,597,343
|
|
|
|
|
|
|
|
|
|
Partners'
capital:
|
|
|
|
|
|
|
|
Common unitholders -
public (88,059 units and 88,064 units issued and outstanding at
December 31, 2017 and March 31, 2018, respectively)
|
|
|
1,708,379
|
|
|
1,716,141
|
|
Common unitholder -
Antero Resources (98,870 units issued and outstanding at December
31, 2017 and March 31, 2018)
|
|
|
(215,682)
|
|
|
(205,835)
|
|
General
partner
|
|
|
23,772
|
|
|
28,453
|
|
Total partners'
capital
|
|
|
1,516,469
|
|
|
1,538,759
|
|
Total liabilities and
partners' capital
|
|
$
|
3,042,209
|
|
|
3,136,102
|
|
ANTERO MIDSTREAM
PARTNERS LP
|
Condensed
Consolidated Statements of Operations and Comprehensive
Income
|
Three Months Ended
March 31, 2017 and 2018
|
(Unaudited)
|
(In thousands, except
per unit amounts)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2017
|
|
2018
|
|
|
|
Revenue:
|
|
|
|
|
|
|
Gathering and
compression–Antero Resources
|
|
$
|
91,524
|
|
|
108,177
|
Water handling and
treatment–Antero Resources
|
|
|
83,110
|
|
|
120,889
|
Gathering and
compression–third party
|
|
|
135
|
|
|
—
|
Water handling and
treatment–third party
|
|
|
—
|
|
|
525
|
Total
revenue
|
|
|
174,769
|
|
|
229,591
|
Operating
expenses:
|
|
|
|
|
|
|
Direct
operating
|
|
|
47,554
|
|
|
67,256
|
General and
administrative (including $6,286 and $6,211 of equity-based
compensation in 2017 and 2018, respectively)
|
|
|
14,457
|
|
|
14,455
|
Depreciation
|
|
|
27,536
|
|
|
32,432
|
Accretion of contingent
acquisition consideration
|
|
|
3,526
|
|
|
3,874
|
Accretion of asset
retirement obligations
|
|
|
—
|
|
|
34
|
Total
operating expenses
|
|
|
93,073
|
|
|
118,051
|
Operating
income
|
|
|
81,696
|
|
|
111,540
|
Interest expense,
net
|
|
|
(8,836)
|
|
|
(11,297)
|
Equity in earnings of
unconsolidated affiliates
|
|
|
2,231
|
|
|
7,862
|
Net income and
comprehensive income
|
|
|
75,091
|
|
|
108,105
|
Net income attributable
to incentive distribution rights
|
|
|
(11,553)
|
|
|
(28,453)
|
Limited
partners' interest in net income
|
|
$
|
63,538
|
|
|
79,652
|
|
|
|
|
|
|
|
Net
income per limited partner unit - basic and diluted
|
|
$
|
0.35
|
|
|
0.43
|
|
|
|
|
|
|
|
Weighted
average limited partner units outstanding - basic
|
|
|
183,033
|
|
|
186,934
|
Weighted
average limited partner units outstanding - diluted
|
|
|
183,447
|
|
|
187,173
|
ANTERO MIDSTREAM
PARTNERS LP
|
Consolidated Results
of Segment Operations
|
Three Months Ended
March 31, 2017 and 2018
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Water
|
|
|
|
|
|
Gathering and
|
|
Handling
and
|
|
Consolidated
|
|
|
Processing
|
|
Treatment
|
|
Total
|
Three months ended
March 31, 2017
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Revenue - Antero
Resources
|
|
$
|
91,524
|
|
|
83,110
|
|
|
174,634
|
Revenue -
third-party
|
|
|
135
|
|
|
—
|
|
|
135
|
Total
revenues
|
|
|
91,659
|
|
|
83,110
|
|
|
174,769
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Direct
operating
|
|
|
8,114
|
|
|
39,440
|
|
|
47,554
|
General and
administrative (before equity-based compensation)
|
|
|
5,549
|
|
|
2,622
|
|
|
8,171
|
Equity-based
compensation
|
|
|
4,589
|
|
|
1,697
|
|
|
6,286
|
Depreciation
|
|
|
19,700
|
|
|
7,836
|
|
|
27,536
|
Accretion of
contingent acquisition consideration
|
|
|
—
|
|
|
3,526
|
|
|
3,526
|
Total
expenses
|
|
|
37,952
|
|
|
55,121
|
|
|
93,073
|
Operating
income
|
|
$
|
53,707
|
|
|
27,989
|
|
|
81,696
|
|
|
|
|
|
|
|
|
|
|
Segment and
consolidated Adjusted EBITDA
|
|
$
|
77,996
|
|
|
41,048
|
|
|
119,044
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31, 2018
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Revenue - Antero
Resources
|
|
$
|
108,177
|
|
|
120,889
|
|
|
229,066
|
Revenue -
third-party
|
|
|
—
|
|
|
525.00
|
|
|
525.00
|
Total
revenues
|
|
|
108,177
|
|
|
121,414
|
|
|
229,591
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Direct
operating
|
|
|
11,382
|
|
|
55,874
|
|
|
67,256
|
General and
administrative (before equity-based compensation)
|
|
|
5,704
|
|
|
2,540
|
|
|
8,244
|
Equity-based
compensation
|
|
|
4,658
|
|
|
1,553
|
|
|
6,211
|
Depreciation
|
|
|
23,414
|
|
|
9,018
|
|
|
32,432
|
Accretion of
contingent acquisition consideration
|
|
|
—
|
|
|
3,874
|
|
|
3,874
|
Accretion of asset
retirement obligations
|
|
|
—
|
|
|
34
|
|
|
34
|
Total
expenses
|
|
|
45,158
|
|
|
72,893
|
|
|
118,051
|
Operating
income
|
|
$
|
63,019
|
|
|
48,521
|
|
|
111,540
|
|
|
|
|
|
|
|
|
|
|
Segment and
consolidated Adjusted EBITDA
|
|
$
|
98,176
|
|
|
63,000
|
|
|
161,176
|
ANTERO MIDSTREAM
PARTNERS LP
|
Selected Operating
Data
|
Three Months Ended
March 31, 2017 and 2018
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
Amount
of
Increase
|
|
Percentage
|
|
|
2017
|
|
2018
|
|
(Decrease)
|
|
Change
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue - Antero
Resources
|
|
$
|
174,634
|
|
|
229,066
|
|
|
54,432
|
|
31
|
%
|
Revenue -
third-party
|
|
|
135
|
|
|
525
|
|
|
390
|
|
289
|
%
|
Total
revenue
|
|
|
174,769
|
|
|
229,591
|
|
|
54,822
|
|
31
|
%
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
operating
|
|
|
47,554
|
|
|
67,256
|
|
|
19,702
|
|
41
|
%
|
General and
administrative (before equity-based compensation)
|
|
|
8,171
|
|
|
8,244
|
|
|
73
|
|
1
|
%
|
Equity-based
compensation
|
|
|
6,286
|
|
|
6,211
|
|
|
(75)
|
|
(1)
|
%
|
Depreciation
|
|
|
27,536
|
|
|
32,432
|
|
|
4,896
|
|
18
|
%
|
Accretion of contingent
acquisition consideration
|
|
|
3,526
|
|
|
3,874
|
|
|
348
|
|
10
|
%
|
Accretion of asset
retirement obligations
|
|
|
—
|
|
|
34
|
|
|
34
|
|
*
|
|
Total operating
expenses
|
|
|
93,073
|
|
|
118,051
|
|
|
24,978
|
|
27
|
%
|
Operating
income
|
|
|
81,696
|
|
|
111,540
|
|
|
29,844
|
|
37
|
%
|
Interest
expense
|
|
|
(8,836)
|
|
|
(11,297)
|
|
|
(2,461)
|
|
28
|
%
|
Equity in earnings of
unconsolidated affiliates
|
|
|
2,231
|
|
|
7,862
|
|
|
5,631
|
|
252
|
%
|
Net
income
|
|
$
|
75,091
|
|
|
108,105
|
|
|
33,014
|
|
44
|
%
|
Adjusted
EBITDA
|
|
$
|
119,044
|
|
|
161,176
|
|
|
42,132
|
|
35
|
%
|
Operating
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Gathering—low pressure
(MMcf)
|
|
|
149,268
|
|
|
165,192
|
|
|
15,924
|
|
11
|
%
|
Gathering—high pressure
(MMcf)
|
|
|
142,313
|
|
|
158,862
|
|
|
16,549
|
|
12
|
%
|
Compression
(MMcf)
|
|
|
92,521
|
|
|
127,195
|
|
|
34,674
|
|
37
|
%
|
Condensate gathering
(MBbl)
|
|
|
15
|
|
|
—
|
|
|
(15)
|
|
*
|
|
Fresh water delivery
(MBbl)
|
|
|
13,363
|
|
|
19,915
|
|
|
6,552
|
|
49
|
%
|
Other fluid handling
(MBbl)
|
|
|
3,199
|
|
|
3,979
|
|
|
780
|
|
24
|
%
|
Wells serviced by fresh
water delivery
|
|
|
34
|
|
|
46
|
|
|
12
|
|
35
|
%
|
Gathering—low pressure
(MMcf/d)
|
|
|
1,659
|
|
|
1,835
|
|
|
176
|
|
11
|
%
|
Gathering—high pressure
(MMcf/d)
|
|
|
1,581
|
|
|
1,765
|
|
|
184
|
|
12
|
%
|
Compression
(MMcf/d)
|
|
|
1,028
|
|
|
1,413
|
|
|
385
|
|
37
|
%
|
Fresh water delivery
(MBbl/d)
|
|
|
148
|
|
|
221
|
|
|
73
|
|
49
|
%
|
Other fluid handling
(MBbl/d)
|
|
|
36
|
|
|
44
|
|
|
8
|
|
24
|
%
|
Average realized
fees:
|
|
|
|
|
|
|
|
|
|
|
|
|
Average gathering—low
pressure fee ($/Mcf)
|
|
$
|
0.32
|
|
|
0.32
|
|
|
—
|
|
*
|
|
Average gathering—high
pressure fee ($/Mcf)
|
|
$
|
0.19
|
|
|
0.19
|
|
|
—
|
|
*
|
|
Average compression fee
($/Mcf)
|
|
$
|
0.19
|
|
|
0.19
|
|
|
—
|
|
*
|
|
Average fresh water
delivery fee ($/Bbl)
|
|
$
|
3.71
|
|
|
3.78
|
|
|
0.07
|
|
2
|
%
|
Joint Venture
Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Processing - Joint
Venture (MMcf)
|
|
|
4,649
|
|
|
46,726
|
|
|
42,077
|
|
905
|
%
|
Fractionation - Joint
Venture (MBbl)
|
|
|
65
|
|
|
557
|
|
|
490
|
|
754
|
%
|
Processing - Joint
Venture (MMcf/d)
|
|
|
52
|
|
|
519
|
|
|
467
|
|
905
|
%
|
Fractionation - Joint
Venture (MBbl/d)
|
|
|
1
|
|
|
6
|
|
|
5
|
|
754
|
%
|
*
Not meaningful or applicable.
|
|
|
|
|
|
|
|
|
|
ANTERO MIDSTREAM
PARTNERS LP
|
Condensed
Consolidated Statements of Cash Flows
|
Three Months Ended
March 31, 2017 and 2018
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2017
|
|
2018
|
Cash flows provided
by (used in) operating activities:
|
|
|
|
|
|
Net income
|
$
|
75,091
|
|
|
108,105
|
Adjustment to reconcile
net income to net cash provided by operating activities:
|
|
|
|
|
|
Depreciation
|
|
27,536
|
|
|
32,432
|
Accretion of
contingent acquisition consideration
|
|
3,526
|
|
|
3,874
|
Accretion of
asset retirement obligations
|
|
—
|
|
|
34
|
Equity-based
compensation
|
|
6,286
|
|
|
6,211
|
Equity in
earnings of unconsolidated affiliates
|
|
(2,231)
|
|
|
(7,862)
|
Distributions
from unconsolidated affiliates
|
|
—
|
|
|
7,085
|
Amortization of
deferred financing costs
|
|
631
|
|
|
690
|
Changes in
assets and liabilities:
|
|
|
|
|
|
Accounts
receivable–Antero Resources
|
|
(7,361)
|
|
|
(2,715)
|
Accounts
receivable–third party
|
|
40
|
|
|
—
|
Prepaid
expenses
|
|
31
|
|
|
(487)
|
Accounts
payable–third party
|
|
2,504
|
|
|
(3,043)
|
Accounts
payable–Antero Resources
|
|
(765)
|
|
|
(3,380)
|
Accrued
liabilities
|
|
(5,540)
|
|
|
(6,894)
|
Net cash
provided by operating activities
|
|
99,748
|
|
|
134,050
|
Cash flows used in
investing activities:
|
|
|
|
|
|
Additions
to gathering systems and facilities
|
|
(66,559)
|
|
|
(93,774)
|
Additions
to water handling and treatment systems
|
|
(36,954)
|
|
|
(34,197)
|
Investments in unconsolidated affiliates
|
|
(159,889)
|
|
|
(17,389)
|
Change in
other assets
|
|
(5,874)
|
|
|
(1,284)
|
Net cash
used in investing activities
|
|
(269,276)
|
|
|
(146,644)
|
Cash flows provided
by (used in) financing activities:
|
|
|
|
|
|
Distributions to unitholders
|
|
(57,633)
|
|
|
(92,003)
|
Borrowings (repayments) on bank credit facilities, net
|
|
(10,000)
|
|
|
105,000
|
Issuance
of common units, net of offering costs
|
|
223,119
|
|
|
—
|
Employee
tax withholding for settlement of equity compensation
awards
|
|
—
|
|
|
(18)
|
Other
|
|
—
|
|
|
(34)
|
Net cash
provided by financing activities
|
|
155,486
|
|
|
12,945
|
Net
increase (decrease) in cash and cash equivalents
|
|
(14,042)
|
|
|
351
|
Cash and cash
equivalents, beginning of period
|
|
14,042
|
|
|
8,363
|
Cash and cash
equivalents, end of period
|
$
|
—
|
|
|
8,714
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
|
Cash paid
during the period for interest
|
$
|
19,668
|
|
|
22,348
|
Supplemental
disclosure of noncash investing activities:
|
|
|
|
|
|
Increase
(decrease) in accrued capital expenditures and accounts payable for
property and equipment
|
$
|
14,989
|
|
|
(27,284)
|
Antero Midstream
GP LP
|
Condensed
Consolidated Balance Sheets
|
December 31, 2017 and March 31,
2018
|
(Unaudited)
|
(In thousands, except number of shares and
units)
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
March
31,
|
|
|
2017
|
|
2018
|
Assets
|
Current
assets:
|
|
|
|
|
|
|
Cash
|
|
$
|
5,987
|
|
|
14,482
|
Prepaid
expenses
|
|
|
—
|
|
|
155
|
Total current
assets
|
|
|
5,987
|
|
|
14,637
|
Investment in Antero
Midstream Partners LP
|
|
|
23,772
|
|
|
28,453
|
Total
assets
|
|
$
|
29,759
|
|
|
43,090
|
|
|
|
|
|
|
|
Liabilities and
Partners' Capital
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
|
293
|
|
|
843
|
Income taxes
payable
|
|
|
13,858
|
|
|
19,946
|
Total current
liabilities
|
|
|
14,151
|
|
|
20,789
|
Non-current
liability:
|
|
|
|
|
|
|
Liability for
equity-based compensation
|
|
|
—
|
|
|
858
|
Total
liabilities
|
|
|
14,151
|
|
|
21,647
|
Partners'
capital:
|
|
|
|
|
|
|
Common shareholders -
public (186,181,975 shares and 186,189,699 shares issued and
outstanding at December 31, 2017 and March 31, 2018,
respectively)
|
|
|
(19,866)
|
|
|
(13,661)
|
IDR LLC Series B units
(32,875 units vested at December 31, 2017 and March 31,
2018)
|
|
|
35,474
|
|
|
35,104
|
Total partners' capital
|
|
|
15,608
|
|
|
21,443
|
Total liabilities and
partners' capital
|
|
$
|
29,759
|
|
|
43,090
|
Antero Midstream
GP LP
|
Condensed
Consolidated Statements of Operations and Comprehensive
Income
|
Three Months
Ended March 31, 2017 and 2018
|
(Unaudited)
|
(In thousands,
except per share amounts)
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2017
|
|
2018
|
Equity in earnings of
Antero Midstream Partners LP
|
$
|
11,553
|
|
|
28,453
|
Total income
|
|
11,553
|
|
|
28,453
|
General and
administrative expense
|
|
2,104
|
|
|
925
|
Equity-based
compensation
|
|
8,323
|
|
|
8,635
|
Total
expenses
|
|
10,427
|
|
|
9,560
|
Income
before income taxes
|
|
1,126
|
|
|
18,893
|
Provision for income
taxes
|
|
(4,425)
|
|
|
(6,088)
|
Net income (loss) and
comprehensive income (loss)
|
$
|
(3,299)
|
|
|
12,805
|
Net income attributable
to Series B units
|
|
|
|
|
(413)
|
Net
income attributable to common shareholders
|
|
|
|
$
|
12,392
|
|
|
|
|
|
|
Net
income per common share - basic and diluted
|
|
|
|
$
|
0.07
|
|
|
|
|
|
|
Weighted
average number of common shares outstanding - basic and
diluted
|
|
|
|
|
186,188
|
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SOURCE Antero Midstream Partners LP; Antero Midstream GP LP