DENVER, Aug. 1, 2018 /PRNewswire/ -- Antero
Midstream Partners LP (NYSE: AM) ("Antero Midstream" or the
"Partnership") and Antero Midstream GP LP (NYSE: AMGP)
("AMGP") today released their second 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
June 30, 2018, which have been filed
with the Securities and Exchange Commission.
Antero Midstream Second Quarter 2018 Highlights
Include:
- Net income increased by 26% to $109
million compared to the prior year quarter, or $0.41 per limited partner unit
- Adjusted EBITDA increased by 26% to $176 million compared to the prior year
quarter
- Distributable Cash Flow increased by 30% to $142 million compared to the prior year quarter,
resulting in DCF coverage of 1.3x
- Increased distribution for the 14th consecutive quarter,
achieving 30% growth on an annualized basis
- Record gathering, compression, fresh water delivery,
processing and fractionation volumes
- Net Debt to trailing twelve months Adjusted EBITDA of 2.3x
and $750 million of liquidity at
quarter-end
AMGP Second Quarter 2018 Highlights Include:
- Net income increased by $18
million to $14 million, or
$0.07 per common share, compared to
the prior year quarter
- Distributable Cash Flow increased by 294% to $23 million, compared to the prior year
quarter
- Distributions declared for the quarter were $0.125 per common share, a 165% increase compared
to the prior year full quarter
Commenting on the second quarter 2018 results, Paul Rady, Chairman and CEO said, "Antero
Midstream delivered another strong quarter with record gathering,
compression, processing and fractionation volumes. Additionally,
Antero Midstream reported record fresh water delivery volumes,
driven by Antero Resource's increase in completion stages per day.
Looking to the second half of 2018, we expect additional gathering
and compression volume growth as Antero expects to turn 65 to 75
wells to sales in the third quarter as compared to 51 wells placed
to sales in the first half of the year."
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 Second Quarter Financial Results
Low pressure gathering volumes for the second quarter of 2018
averaged 1,981 MMcf/d, an 18% increase as compared to the prior
year quarter. Compression volumes for the second quarter of
2018 averaged 1,558 MMcf/d, a 31% increase as compared to the
second quarter of 2017. High pressure gathering volumes for
the second quarter of 2018 averaged 1,932 MMcf/d, an 11% increase
over the second quarter of 2017. The increase in gathering
and compression volumes to Partnership record levels was driven by
production growth from Antero Resources in Antero Midstream's area
of dedication. Fresh water delivery volumes averaged a record
228 MBbl/d during the quarter, driven by increased completion
stages per day. Antero Midstream treated 8 Mbbl/d of wastewater at
the Antero Clearwater Facility during the second quarter.
Gross processing volumes from the processing and fractionation
joint venture with MarkWest (a wholly-owned subsidiary of MPLX)
(the "Joint Venture") averaged 571 MMcf/d for the second quarter of
2018, an increase of 164% compared to the prior year quarter.
Gross Joint Venture fractionation volumes averaged 10,046 Bbl/d, a
148% 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 production volumes.
|
Three Months
Ended
June
30,
|
|
|
Average Daily
Volumes:
|
2017
|
|
2018
|
|
%
Change
|
Low Pressure Gathering
(MMcf/d)
|
1,683
|
|
1,981
|
|
18%
|
Compression
(MMcf/d)
|
1,192
|
|
1,558
|
|
31%
|
High Pressure
Gathering (MMcf/d)
|
1,734
|
|
1,932
|
|
11%
|
Fresh Water Delivery
(MBbl/d)
|
173
|
|
228
|
|
32%
|
Clearwater Treatment
Volumes (MBbl/d)
|
—
|
|
8
|
|
*
|
Gross Joint Venture
Processing (MMcf/d)
|
216
|
|
571
|
|
164%
|
Gross Joint Venture
Fractionation (Bbl/d)
|
4,039
|
|
10,046
|
|
148%
|
For the three months ended June 30,
2018, the Partnership reported revenues of $251 million, comprised of $119 million from the Gathering and Processing
segment and $132 million from the
Water Handling and Treatment segment. Revenues increased 30%
compared to the prior year quarter, driven by growth in gathering,
compression and fresh water delivery volumes. Water Handling and
Treatment segment revenues include $3
million from wastewater treatment at the Antero Clearwater
Facility and $51 million from
wastewater handling and high rate water transfer services, which
are billed at cost plus 3%.
Direct operating expenses for the Gathering and Processing, and
Water Handling and Treatment segments were $13 million and $63
million, respectively, for a total of $76 million, compared to $52 million in direct operating expenses in the
prior year quarter. Water Handling and Treatment direct operating
expenses include $49 million from
wastewater handling and high rate water transfer services.
General and administrative expenses including equity-based
compensation were $15 million, in
line with the prior year quarter. General and administrative
expenses excluding equity-based compensation were $10 million during the second quarter of 2018, a
23% increase compared to the second quarter of 2017. Total
operating expenses were $136 million,
including $36 million of
depreciation, $5 million of
impairment and $4 million of
accretion of contingent acquisition consideration and asset
retirement obligations.
Net income for the second quarter of 2018 was $109 million, a 26% increase compared to the
prior year quarter. Net income per limited partner unit was
$0.41 per unit, a 5% increase
compared to the prior year quarter. Adjusted EBITDA was
$176 million, a 26% increase compared
to the prior year quarter. Adjusted EBITDA for the quarter
included $11 million in combined
distributions from Stonewall Gathering LLC and the processing and
fractionation Joint Venture. Cash interest paid was
$6 million. Cash reserved for bond
interest during the quarter was $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 and Distributable Cash
Flow was $142 million, a 30% 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
June 30,
|
|
2017
|
|
2018
|
Net
income
|
$
|
87,175
|
|
|
109,466
|
Interest
expense
|
|
9,015
|
|
|
14,628
|
Impairment of property
and equipment expense
|
|
—
|
|
|
4,614
|
Depreciation
expense
|
|
30,512
|
|
|
36,433
|
Accretion of contingent
acquisition consideration
|
|
3,590
|
|
|
3,947
|
Accretion of asset
retirement obligations
|
|
—
|
|
|
34
|
Equity-based
compensation
|
|
6,951
|
|
|
5,867
|
Equity in earnings of
unconsolidated affiliates
|
|
(3,623)
|
|
|
(9,264)
|
Distributions from
unconsolidated affiliates
|
|
5,820
|
|
|
10,810
|
Gain on sale of assets
– Antero Resources
|
|
—
|
|
|
(583)
|
Adjusted
EBITDA
|
|
139,440
|
|
|
175,952
|
Interest
paid
|
|
(2,308)
|
|
|
(6,270)
|
Cash reserved for bond
interest (1)
|
|
(8,734)
|
|
|
(8,734)
|
Income tax withholding
upon vesting of Antero Midstream Partners LP equity-based
compensation awards (2)
|
|
(2,431)
|
|
|
(1,500)
|
Maintenance capital
expenditures (3)
|
|
(16,422)
|
|
|
(17,289)
|
Distributable Cash
Flow
|
$
|
109,545
|
|
|
142,159
|
|
|
|
|
|
|
Distributions
Declared to Antero Midstream Holders
|
|
|
|
|
|
Limited
Partners
|
$
|
59,695
|
|
|
77,624
|
Incentive distribution
rights
|
|
15,328
|
|
|
33,137
|
Total Aggregate
Distributions
|
$
|
75,023
|
|
|
110,761
|
|
|
|
|
|
|
DCF coverage
ratio
|
|
1.5x
|
|
|
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.
|
Gathering and Processing —During the second
quarter, Antero Midstream expanded one of its rich gas Marcellus
compressor stations by 80 MMcf/d. Including the 440 MMcf/d of
additions during the first quarter of 2018, Antero Midstream
has expanded its compression capacity by 520 MMcf/d year-to-date.
Antero Midstream's total compression capacity at the end of
the second quarter of 2018 was over 2.2 Bcf/d in the Marcellus and
Utica combined. Additionally, Antero Midstream connected 30
wells to its gathering system during the quarter. Antero
Resources is currently operating five drilling rigs on Antero
Midstream dedicated acreage.
The Joint Venture with MPLX continued construction on the
Sherwood 10 and 11 Processing Plants, which are expected to be
placed online by the end of the third quarter and fourth quarter of
2018, respectively. In addition, the Joint Venture commenced civil
construction on its new processing site, "Smithburg", during the
second quarter of 2018. The Smithburg Processing Site will
initially have a footprint capable of supporting 1.2 Bcf/d of
cryogenic processing facilities, or six 200 MMcf/d plants.
Importantly, the Smithburg processing site is strategically located
two miles west of the Sherwood Processing Facility and will connect
to major long-haul pipelines and NGL infrastructure.
Water Handling and Treatment — Antero
Midstream's Marcellus and Utica fresh water delivery systems
serviced 48 well completions during the second quarter of 2018, a
29% increase from the prior year quarter. Antero Resources
operated six completion crews on Antero Midstream dedicated acreage
in the second quarter of 2018 but expects to reduce its completion
crews to four in the second half of 2018.
During the second quarter of 2018, Antero Midstream placed in
service the Antero Clearwater Facility, which is the largest
advanced wastewater treatment facility for shale oil and gas
operations in the world. The Antero Clearwater Facility was
temporarily taken offline in June for maintenance and to install
additional pretreatment facilities to improve operations. The
facility was placed back into commercial service at the end of
July.
Balance Sheet and Liquidity
As of June 30, 2018, Antero
Midstream had $20 million in cash and
$770 million drawn on its
$1.5 billion bank credit facility,
resulting in $750 million of
liquidity. Antero Midstream's net debt to trailing twelve
months Adjusted EBITDA was 2.3x as of June
30, 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 distribution growth and balance
sheet, Michael Kennedy, CFO of
Antero Midstream said, "The success of Antero Midstream's organic
growth model is highlighted by the recent declaration of the
Partnership's fourteenth consecutive distribution increase
reflecting a 30% annualized growth rate since its IPO in 2014.
Importantly, Antero Midstream has delivered this peer-leading
growth while maintaining a DCF coverage ratio well in excess of its
initial coverage ratio targets in every quarter, demonstrating the
consistency of Antero's development plan and integrated midstream
strategy. Additionally, Antero Midstream continues to
maintain a strong balance sheet with leverage at 2.3x as of
June 30, 2018."
Capital Investments
Capital expenditures, excluding investments in the processing
and fractionation joint venture, were $128
million in the second quarter of 2018 as compared to
$147 million in the second quarter of
2017. Capital invested in gathering systems and related
facilities was $113 million and
capital invested in water handling and treatment assets was
$15 million, including $5 million invested in the Antero Clearwater
Facility. Investments in unconsolidated affiliates for the
Joint Venture were $39 million during
the quarter.
AMGP Second Quarter 2018 Financial Results
AMGP's equity in earnings from Antero Midstream, which reflects
the cash distributions from Antero Midstream, was $33 million for the second quarter of 2018.
Net income for the quarter was $14
million. AMGP's cash distributions from Antero
Midstream were $33 million, net of
$1.5 million of total cash reserved
and distributed to Series B units of Antero IDR Holdings LLC.
General and administrative expenses were $2.4 million, including $1.8 million of special committee and legal
advisory fees. The provision and reserve for income taxes was
$8 million, resulting in cash
available for distribution of $23
million. The 294% increase in cash available for
distribution from the second quarter of 2017 is driven by an
increase in cash distributions from Antero Midstream.
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 June 30,
2018
|
Cash distributions
from Antero Midstream Partners LP
|
$
|
33,137
|
Cash reserved for
distributions to unvested Series B units of IDR LLC
|
|
(1,011)
|
Cash distribution to
vested Series B units of IDR LLC
|
|
(506)
|
Cash distributions to
Antero Midstream GP LP
|
$
|
31,620
|
General and
administrative expenses
|
|
(2,398)
|
Interest
expense
|
|
(18)
|
Special committee legal
and advisory fees included in G&A
expense(1)
|
|
1,844
|
Provision and reserve
for income taxes
|
|
(7,777)
|
Cash available for
distribution
|
$
|
23,271
|
|
|
|
DCF coverage
ratio
|
|
1.0x
|
|
|
|
Common shares
outstanding
|
|
186,209
|
|
|
|
Cash distribution
per common share
|
$
|
0.125
|
|
|
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, August 2, 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, August 9,
2018 at 10:00 am MT at
1-844-512-2921 (U.S.) or 1-412-317-6671 (International) using the
passcode 10120012.
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, August 9, 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 uses Adjusted EBITDA as an important indicator
of the Partnership's performance. Antero Midstream defines
Adjusted EBITDA as net income before interest expense, impairment
expense, gain on sale of assets, 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 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, gain on sale of
assets, impairment expense, accretion, excluding equity in earnings
of unconsolidated affiliates, and including cash distributions from
unconsolidated affiliates. Operating income 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 ("Net Debt") as used in this release (in
thousands):
|
June 30,
2018
|
|
|
|
Bank credit
facility
|
$
|
770,000
|
5.375% AM senior
notes due 2024
|
|
650,000
|
Net unamortized debt
issuance costs
|
|
(8,434)
|
Consolidated total
debt
|
$
|
1,411,566
|
Cash and cash
equivalents
|
|
(19,525)
|
Consolidated net
debt
|
$
|
1,392,041
|
The following table reconciles net income to Adjusted EBITDA for
the twelve months ended June 30, 2018
as used in this release (in thousands):
|
|
Twelve Months
Ended June 30,
2018
|
|
|
|
Net income
|
$
|
362,620
|
Interest expense
|
|
45,631
|
Impairment of property and equipment expense
|
|
28,045
|
Depreciation expense
|
|
130,379
|
Accretion of
contingent acquisition consideration
|
|
14,180
|
Accretion of asset
retirement obligations
|
|
68
|
Equity-based compensation
|
|
26,124
|
Equity in earnings of unconsolidated affiliate
|
|
(31,467)
|
Distributions from
unconsolidated affiliates
|
|
32,270
|
Gain on sale of asset
– Antero Resources
|
|
(583)
|
Adjusted
EBITDA
|
$
|
607,267
|
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 June 30,
2018
|
(Unaudited)
|
(In thousands)
|
|
|
December
31,
|
|
June
30,
|
|
2017
|
|
2018
|
Assets
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
8,363
|
|
|
19,525
|
Accounts
receivable–Antero Resources
|
|
110,182
|
|
|
114,072
|
Accounts
receivable–third party
|
|
1,170
|
|
|
12,222
|
Prepaid
expenses
|
|
670
|
|
|
539
|
Total current
assets
|
|
120,385
|
|
|
146,358
|
Property and
equipment, net
|
|
2,605,602
|
|
|
2,770,311
|
Investments in
unconsolidated affiliates
|
|
303,302
|
|
|
358,830
|
Other assets,
net
|
|
12,920
|
|
|
20,730
|
Total
assets
|
$
|
3,042,209
|
|
|
3,296,229
|
|
|
|
|
|
|
Liabilities and
Partners' Capital
|
Current
liabilities:
|
|
|
|
|
|
Accounts payable–Antero
Resources
|
$
|
6,459
|
|
|
3,856
|
Accounts payable–third
party
|
|
8,642
|
|
|
18,754
|
Accrued
liabilities
|
|
106,006
|
|
|
89,182
|
Other current
liabilities
|
|
209
|
|
|
213
|
Total current
liabilities
|
|
121,316
|
|
|
112,005
|
Long-term
liabilities:
|
|
|
|
|
|
Long-term
debt
|
|
1,196,000
|
|
|
1,411,566
|
Contingent acquisition
consideration
|
|
208,014
|
|
|
215,835
|
Asset retirement
obligations
|
|
—
|
|
|
3,114
|
Other
|
|
410
|
|
|
2,576
|
Total
liabilities
|
|
1,525,740
|
|
|
1,745,096
|
|
|
|
|
|
|
Partners'
capital:
|
|
|
|
|
|
Common unitholders -
public (88,059 units and 88,164 units issued and outstanding at
December 31, 2017 and June 30, 2018, respectively)
|
|
1,708,379
|
|
|
1,722,315
|
Common unitholder -
Antero Resources (98,870 units issued and outstanding at December
31, 2017 and June 30, 2018)
|
|
(215,682)
|
|
|
(204,319)
|
General
partner
|
|
23,772
|
|
|
33,137
|
Total partners'
capital
|
|
1,516,469
|
|
|
1,551,133
|
Total liabilities and
partners' capital
|
$
|
3,042,209
|
|
|
3,296,229
|
ANTERO MIDSTREAM
PARTNERS LP
|
Condensed
Consolidated Statements of Operations and Comprehensive
Income
|
Three Months Ended
June 30, 2017 and 2018
|
(Unaudited)
|
(In thousands, except
per unit amounts)
|
|
|
Three Months Ended
June 30,
|
|
2017
|
|
2018
|
Revenue:
|
|
|
|
|
|
Gathering and
compression–Antero Resources
|
$
|
98,633
|
|
|
118,136
|
Water handling and
treatment–Antero Resources
|
|
95,004
|
|
|
132,231
|
Gathering and
compression–third party
|
|
129
|
|
|
—
|
Water handling and
treatment–third party
|
|
—
|
|
|
25
|
Gain on sale of assets
– Antero Resources
|
|
—
|
|
|
583
|
Total
revenue
|
|
193,766
|
|
|
250,975
|
Operating
expenses:
|
|
|
|
|
|
Direct
operating
|
|
52,308
|
|
|
75,623
|
General and
administrative (including $6,951 and $5,867 of equity-based
compensation in 2017 and 2018, respectively)
|
|
14,789
|
|
|
15,494
|
Impairment of property
and equipment
|
|
—
|
|
|
4,614
|
Depreciation
|
|
30,512
|
|
|
36,433
|
Accretion of contingent
acquisition consideration
|
|
3,590
|
|
|
3,947
|
Accretion of asset
retirement obligations
|
|
—
|
|
|
34
|
Total operating
expenses
|
|
101,199
|
|
|
136,145
|
Operating
income
|
|
92,567
|
|
|
114,830
|
Interest expense,
net
|
|
(9,015)
|
|
|
(14,628)
|
Equity in earnings of
unconsolidated affiliates
|
|
3,623
|
|
|
9,264
|
Net income and
comprehensive income
|
|
87,175
|
|
|
109,466
|
Net income attributable
to incentive distribution rights
|
|
(15,328)
|
|
|
(33,145)
|
Limited partners'
interest in net income
|
$
|
71,847
|
|
|
76,321
|
|
|
|
|
|
|
Net income per limited
partner unit - basic and diluted
|
$
|
0.39
|
|
|
0.41
|
|
|
|
|
|
|
Weighted average
limited partner units outstanding - basic
|
|
186,065
|
|
|
187,018
|
Weighted average
limited partner units outstanding - diluted
|
|
186,533
|
|
|
187,318
|
ANTERO MIDSTREAM
PARTNERS LP
|
Condensed
Consolidated Results of Segment Operations
|
Three Months Ended
June 30, 2017 and 2018
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
Water
|
|
|
|
|
Gathering and
|
|
Handling
and
|
|
Consolidated
|
|
Processing
|
|
Treatment
|
|
Total
|
Three months ended
June 30, 2017
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Revenue - Antero
Resources
|
$
|
98,633
|
|
|
95,004
|
|
|
193,637
|
Revenue -
third-party
|
|
129
|
|
|
-
|
|
|
129
|
Total
revenues
|
|
98,762
|
|
|
95,004
|
|
|
193,766
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Direct
operating
|
|
9,922
|
|
|
42,386
|
|
|
52,308
|
General and
administrative (before equity-based compensation)
|
|
5,468
|
|
|
2,370
|
|
|
7,838
|
Equity-based
compensation
|
|
5,237
|
|
|
1,714
|
|
|
6,951
|
Depreciation
|
|
22,271
|
|
|
8,241
|
|
|
30,512
|
Accretion of
contingent acquisition consideration
|
|
-
|
|
|
3,590
|
|
|
3,590
|
Total
expenses
|
|
42,898
|
|
|
58,301
|
|
|
101,199
|
Operating
income
|
$
|
55,864
|
|
|
36,703
|
|
|
92,567
|
|
|
|
|
|
|
|
|
|
Segment and
consolidated Adjusted EBITDA
|
$
|
89,192
|
|
|
50,248
|
|
|
139,440
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30, 2018
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Revenue - Antero
Resources
|
$
|
118,136
|
|
|
132,231
|
|
|
250,367
|
Revenue -
third-party
|
|
-
|
|
|
25
|
|
|
25
|
Gain on sales of
assets – Antero Resources
|
|
583
|
|
|
-
|
|
|
583
|
Total
revenues
|
|
118,719
|
|
|
132,256
|
|
|
250,975
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Direct
operating
|
|
12,405
|
|
|
63,218
|
|
|
75,623
|
General and
administrative (before equity-based compensation)
|
|
7,240
|
|
|
2,387
|
|
|
9,627
|
Equity-based
compensation
|
|
4,754
|
|
|
1,113
|
|
|
5,867
|
Impairment of property
and equipment
|
|
4,614
|
|
|
-
|
|
|
4,614
|
Depreciation
|
|
24,258
|
|
|
12,175
|
|
|
36,433
|
Accretion of
contingent acquisition consideration
|
|
-
|
|
|
3,947
|
|
|
3,947
|
Accretion of asset
retirement obligations
|
|
-
|
|
|
34
|
|
|
34
|
Total
expenses
|
|
53,271
|
|
|
82,874
|
|
|
136,145
|
Operating
income
|
$
|
65,448
|
|
|
49,382
|
|
|
114,830
|
|
|
|
|
|
|
|
|
|
Segment and
consolidated Adjusted EBITDA
|
$
|
109,301
|
|
|
66,651
|
|
|
175,952
|
ANTERO MIDSTREAM
PARTNERS LP
|
Selected Operating
Data
|
Three Months Ended
June 30, 2017 and 2018
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
Amount
of
|
|
|
|
|
Three Months Ended
June 30,
|
|
Increase
|
|
Percentage
|
|
2017
|
|
2018
|
|
(Decrease)
|
|
Change
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Revenue - Antero
Resources
|
$
|
193,637
|
|
|
250,367
|
|
|
56,730
|
|
29
|
%
|
Revenue -
third-party
|
|
129
|
|
|
25
|
|
|
(104)
|
|
(81)
|
%
|
Gain on sale of assets
– Antero Resources
|
|
—
|
|
|
583
|
|
|
583
|
|
*
|
%
|
Total
revenue
|
|
193,766
|
|
|
250,975
|
|
|
57,209
|
|
30
|
%
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Direct
operating
|
|
52,308
|
|
|
75,623
|
|
|
23,315
|
|
45
|
%
|
General and
administrative (before equity-based compensation)
|
|
7,838
|
|
|
9,627
|
|
|
1,789
|
|
23
|
%
|
Equity-based
compensation
|
|
6,951
|
|
|
5,867
|
|
|
(1,084)
|
|
(16)
|
%
|
Impairment of property
and equipment
|
|
—
|
|
|
4,614
|
|
|
4,614
|
|
*
|
|
Depreciation
|
|
30,512
|
|
|
36,433
|
|
|
5,921
|
|
19
|
%
|
Accretion of contingent
acquisition consideration
|
|
3,590
|
|
|
3,947
|
|
|
357
|
|
10
|
%
|
Accretion of asset
retirement obligations
|
|
—
|
|
|
34
|
|
|
34
|
|
*
|
|
Total operating
expenses
|
|
101,199
|
|
|
136,145
|
|
|
34,946
|
|
35
|
%
|
Operating
income
|
|
92,567
|
|
|
114,830
|
|
|
22,263
|
|
24
|
%
|
Interest
expense
|
|
(9,015)
|
|
|
(14,628)
|
|
|
5,613
|
|
62
|
%
|
Equity in earnings of
unconsolidated affiliates
|
|
3,623
|
|
|
9,264
|
|
|
5,641
|
|
156
|
%
|
Net income
|
$
|
87,175
|
|
|
109,466
|
|
|
22,291
|
|
26
|
%
|
Adjusted
EBITDA
|
$
|
139,440
|
|
|
175,952
|
|
|
36,512
|
|
26
|
%
|
Operating
Data:
|
|
|
|
|
|
|
|
|
|
|
|
Gathering—low pressure
(MMcf)
|
|
153,180
|
|
|
180,268
|
|
|
27,088
|
|
18
|
%
|
Gathering—high pressure
(MMcf)
|
|
157,806
|
|
|
175,818
|
|
|
18,012
|
|
11
|
%
|
Compression
(MMcf)
|
|
108,451
|
|
|
141,819
|
|
|
33,368
|
|
31
|
%
|
Fresh water delivery
(MBbl)
|
|
15,761
|
|
|
20,766
|
|
|
5,005
|
|
32
|
%
|
Treated water
(MBbl)
|
|
—
|
|
|
700
|
|
|
700
|
|
*
|
|
Other fluid handling
(MBbl)
|
|
3,400
|
|
|
4,382
|
|
|
982
|
|
29
|
%
|
Wells serviced by fresh
water delivery
|
|
44
|
|
|
48
|
|
|
4
|
|
9
|
%
|
Gathering—low pressure
(MMcf/d)
|
|
1,683
|
|
|
1,981
|
|
|
298
|
|
18
|
%
|
Gathering—high pressure
(MMcf/d)
|
|
1,734
|
|
|
1,932
|
|
|
198
|
|
11
|
%
|
Compression
(MMcf/d)
|
|
1,192
|
|
|
1,558
|
|
|
366
|
|
31
|
%
|
Fresh water delivery
(MBbl/d)
|
|
173
|
|
|
228
|
|
|
55
|
|
32
|
%
|
Treated water
(MBbl/d)
|
|
—
|
|
|
8
|
|
|
8
|
|
*
|
|
Other fluid handling
(MBbl/d)
|
|
37
|
|
|
48
|
|
|
11
|
|
29
|
%
|
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)
|
$
|
3.72
|
|
|
3.78
|
|
|
0.06
|
|
2
|
%
|
Average treated water
fee ($/Bbl)
|
$
|
—
|
|
|
4.11
|
|
|
4.11
|
|
*
|
|
Joint Venture
Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
Processing - Joint
Venture (MMcf)
|
|
19,662
|
|
|
51,921
|
|
|
32,259
|
|
164
|
%
|
Fractionation - Joint
Venture (MBbl)
|
|
368
|
|
|
914
|
|
|
546
|
|
148
|
%
|
Processing - Joint
Venture (MMcf/d)
|
|
216
|
|
|
571
|
|
|
355
|
|
164
|
%
|
Fractionation - Joint
Venture (MBbl/d)
|
|
4
|
|
|
10
|
|
|
6
|
|
148
|
%
|
___________________________
|
*
|
Not meaningful or
applicable.
|
ANTERO MIDSTREAM
PARTNERS LP
|
Condensed
Consolidated Statements of Cash Flows
|
Six Months Ended June
30, 2017 and 2018
|
(Unaudited)
|
(In
thousands)
|
|
|
Six Months Ended
June 30,
|
|
2017
|
|
2018
|
Cash flows provided
by (used in) operating activities:
|
|
|
|
|
|
Net income
|
$
|
162,267
|
|
|
217,571
|
Adjustment to reconcile
net income to net cash provided by operating activities:
|
|
|
|
|
|
Depreciation
|
|
58,048
|
|
|
68,865
|
Accretion of
contingent acquisition consideration
|
|
7,116
|
|
|
7,821
|
Accretion of asset
retirement obligations
|
|
—
|
|
|
68
|
Impairment of property
and equipment
|
|
—
|
|
|
4,614
|
Equity-based
compensation
|
|
13,237
|
|
|
12,078
|
Equity in earnings of
unconsolidated affiliates
|
|
(5,854)
|
|
|
(17,126)
|
Distributions from
unconsolidated affiliates
|
|
5,820
|
|
|
17,895
|
Amortization of
deferred financing costs
|
|
1,267
|
|
|
1,385
|
Gain on sale of assets
– Antero Resources
|
|
—
|
|
|
(583)
|
Changes in assets and
liabilities:
|
|
|
|
|
|
Accounts
receivable–Antero Resources
|
|
(14,923)
|
|
|
(2,147)
|
Accounts
receivable–third party
|
|
3
|
|
|
(36)
|
Prepaid
expenses
|
|
235
|
|
|
131
|
Accounts
payable–Antero Resources
|
|
(204)
|
|
|
(1,912)
|
Accounts payable–third
party
|
|
(523)
|
|
|
1,856
|
Accrued
liabilities
|
|
8,449
|
|
|
1,951
|
Net cash provided by
operating activities
|
|
234,938
|
|
|
312,431
|
Cash flows used in
investing activities:
|
|
|
|
|
|
Additions to gathering
systems and facilities
|
|
(155,365)
|
|
|
(206,753)
|
Additions to water
handling and treatment systems
|
|
(95,451)
|
|
|
(49,054)
|
Investments in
unconsolidated affiliates
|
|
(191,364)
|
|
|
(56,297)
|
Change in other
assets
|
|
(4,804)
|
|
|
(9,077)
|
Net cash used in
investing activities
|
|
(446,984)
|
|
|
(321,181)
|
Cash flows provided
by (used in) financing activities:
|
|
|
|
|
|
Distributions to
unitholders
|
|
(125,014)
|
|
|
(193,670)
|
Borrowings on bank
credit facilities, net
|
|
95,000
|
|
|
215,000
|
Issuance of common
units, net of offering costs
|
|
246,585
|
|
|
—
|
Employee tax
withholding for settlement of equity compensation awards
|
|
(932)
|
|
|
(1,318)
|
Other
|
|
(102)
|
|
|
(100)
|
Net cash provided by
financing activities
|
|
215,537
|
|
|
19,912
|
Net increase in cash
and cash equivalents
|
|
3,491
|
|
|
11,162
|
Cash and cash
equivalents, beginning of period
|
|
14,042
|
|
|
8,363
|
Cash and cash
equivalents, end of period
|
$
|
17,533
|
|
|
19,525
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
|
Cash paid during the
period for interest
|
$
|
21,976
|
|
|
28,618
|
Increase (decrease) in
accrued capital expenditures and accounts payable for property and
equipment
|
$
|
5,627
|
|
|
( 11,209)
|
Antero Midstream
GP LP
|
Condensed
Consolidated Balance Sheets
|
December 31, 2017 and June 30,
2018
|
(Unaudited)
|
(In thousands,
except number of shares and units)
|
|
|
December 31,
|
|
June 30,
|
|
2017
|
|
2018
|
Assets
|
Current
assets:
|
|
|
|
|
|
Cash
|
$
|
5,987
|
|
|
5,300
|
Prepaid
expenses
|
|
—
|
|
|
867
|
Deferred financing
costs
|
|
—
|
|
|
104
|
Total current
assets
|
|
5,987
|
|
|
6,271
|
Investment in Antero
Midstream Partners LP
|
|
23,772
|
|
|
33,137
|
Total
assets
|
$
|
29,759
|
|
|
39,408
|
|
|
|
|
|
|
Liabilities and
Partners' Capital
|
Current
liabilities:
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
293
|
|
|
823
|
Income taxes
payable
|
|
13,858
|
|
|
13,310
|
Total current
liabilities
|
|
14,151
|
|
|
14,133
|
Non-current
liability:
|
|
|
|
|
|
Liability for
equity-based compensation
|
|
—
|
|
|
2,191
|
Total
liabilities
|
|
14,151
|
|
|
16,324
|
Partners'
capital:
|
|
|
|
|
|
Common shareholders -
public (186,181,975 shares and 186,199,995 shares issued and
outstanding at December 31, 2017 and June 30, 2018,
respectively)
|
|
(19,866)
|
|
|
(12,112)
|
IDR LLC Series B units
(32,875 units vested at December 31, 2017 and June 30,
2018)
|
|
35,474
|
|
|
35,196
|
Total partners'
capital
|
|
15,608
|
|
|
23,084
|
Total liabilities and
partners' capital
|
$
|
29,759
|
|
|
39,408
|
Antero Midstream
GP LP
|
Condensed
Consolidated Statements of Operations and Comprehensive
Income
|
Three Months
Ended June 30, 2017 and 2018
|
(Unaudited)
|
(In thousands, except
per share amounts)
|
|
|
Three Months Ended
June 30,
|
|
2017
|
|
2018
|
Equity in earnings of
Antero Midstream Partners LP
|
$
|
15,328
|
|
|
33,145
|
Total income
|
|
15,328
|
|
|
33,145
|
General and
administrative expense
|
|
3,203
|
|
|
2,398
|
Equity-based
compensation
|
|
9,631
|
|
|
9,111
|
Total operating
expenses
|
|
12,834
|
|
|
11,509
|
Operating
income
|
|
2,494
|
|
|
21,636
|
Interest Expense,
net
|
|
—
|
|
|
18
|
Income before income
taxes
|
|
2,494
|
|
|
21,618
|
Provision for income
taxes
|
|
(5,755)
|
|
|
(7,231)
|
Net income (loss) and
comprehensive income (loss)
|
|
(3,261)
|
|
|
14,387
|
Net income attributable
to vested Series B units
|
|
—
|
|
|
(506)
|
Pre-IPO net income
attributed to parent
|
|
1,640
|
|
|
—
|
Net income (loss)
attributable to common shareholders
|
$
|
(1,621)
|
|
|
13,881
|
|
|
|
|
|
|
Net income (loss) per
common share - basic and diluted
|
$
|
(0.01)
|
|
|
0.07
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding - basic and diluted
|
|
186,170
|
|
|
186,199
|
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SOURCE Antero Midstream Partners LP; Antero Midstream GP LP