Antero Midstream and AMGP Report Third Quarter 2017 Financial and Operational Results
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, September
2016 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
