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Founder & CEO Message To Our Stakeholders

As one of the leading North American midstream infrastructure companies, we play a vital role in transporting the low-emission hydrocarbons needed to power our economy and heat our communities. Our relentless focus on people and performance has allowed us to successfully navigate the ever-changing economy while continuing to deliver stakeholder value.

By prioritizing the health and well-being of our employees and communities, we maintained our high standards of operations during a challenging year. We celebrate and honor the dedication of our talented employees who recognize that the work we do, and the energy we deliver, is essential to support daily life, rebuild economies and drive improved quality of life around the globe.

Our team consistently responds with flexibility, grit and determination to continue our operations safely and without interruption. We credit this performance to our employees’ skills and perseverance, and our entrepreneurial culture where employees have ownership of company performance.

This dedication was also felt through our West Virginia and Ohio communities. We recognize the need to support our neighbors as many experienced increased struggles in 2020. With the launch of the Antero Foundation in 2020, we were able to make substantial donations to support hunger relief efforts and vulnerable families through the United Way and other community organizations.

PEOPLE ARE OUR PURPOSE

Our work creates well-paying jobs, invests in infrastructure and improves community resources. We build long-term relationships with our neighbors, recognizing that we are dedicated to Appalachia for years to come. From providing more than $6 million in payments to landowners to investing more than $18 million in road improvements in 2020 alone, partnering with the people of Appalachia has been part of our operations since our start. We will continue to make a difference by respecting the area’s people and land for generations to come.

Despite all of the changes in our daily lives, our corporate strategy remains constant. Antero Midstream continues to focus on operating expense and capital efficiencies, specifically matching our infrastructure capacity with production volumes. This proven strategy allows us to minimize waste from excess infrastructure and maintain high asset utilization rates across our portfolio. The result is consistent mid-teens returns on invested capital, an increase in free cash flow from last year and, most importantly, a concentrated footprint to limit our environmental and community impact.

Providing integrated midstream services not only supports our bottom line but fulfills our purpose of positively impacting people with the energy we transport. According to the World Bank, 2.8 billion people are without access to clean cooking fuels and nearly 800 million people do not have electricity. Energy poverty is a global crisis that can be solved. As a critical infrastructure provider that links reliable energy supply and demand, we play a significant role in distributing the energy our world needs. Natural gas and natural gas liquids (NGLs) are reliable, accessible, affordable and safer to serve our most vulnerable populations.

AN OPERATOR OF CHOICE, A CULTURE OF CONTINUOUS IMPROVEMENT

We are a midstream operator and employer of choice with a culture of continuous improvement for our stakeholders. Innovation, collaboration and a drive to do better enabled us to improve our safety record in 2020 — a record that was already one of the lowest lost time incident rates in the industry.

In addition, we recycled and reused more than 84% of the produced and flowback water delivered to us for disposal in 2020. And, our transition from a Master Limited Partnership (MLP) to a C-Corp in 2019, and formation of a majority independent Board of Directors, highlights our commitment to enhanced governance and shareholder rights.

Our ESG Board Committee — a group of dedicated leaders who collaborate with our executives on ESG trends, issues and concerns — is deeply committed to ensuring that we are at the forefront of ESG opportunities. This committee was integral in developing our 2025 goals and will continue to be essential in influencing executive compensation. We are grateful for the expertise these committee members share with our management team and the perspectives they provide to strengthen our company.

OUR ROLE IN A LOW-CARBON FUTURE

Delivering energy to drive a recovering global economy is a responsibility that we take seriously. We recognize our role in providing the infrastructure that supports a low-carbon future. Natural gas, as the least greenhouse gas (GHG) intensive hydrocarbon — is key to the energy transition and to addressing climate change risks. As natural gas replaces coal in power generation both in the U.S. and across the world, we experience a reduction in global emissions and demonstrate progress in meeting ambitious global climate goals.

We are committed to lowering GHG emissions across our assets — a commitment that aligns well with our strategy of having a limited operational footprint that allows for efficient expansion. Having this infrastructure ready enabled our partner, Antero Resources, to eliminate routine flaring, a common source of emissions across the oil and natural gas sector.

To further encourage emissions reduction practices and advance our track record of industry-leading environmental results, we also set aggressive ESG targets to accomplish by 2025.

 Our fresh water delivery system — the largest in Appalachia — supports our 2025 goals by reducing truck traffic and the related tailpipe emissions in our communities each year. In 2020, our water pipelines eliminated 32 million miles of truck traffic from community roads, avoiding approximately 14,000 metric tons of carbon dioxide emissions.

We have also expanded our ESG reporting to include the new Energy Infrastructure Council/GPA Midstream ESG Reporting Template and a climate-risk analysis, as recommended in the Task Force on Climate-Related Disclosures (TCFD) framework. By increasing our transparency around climate risk, we inform our stakeholders about how climate change could impact our business while reiterating our emissions reduction strategies and the benefits of natural gas for a low-carbon future.

A LEGACY OF RESPONSIBLE OPERATIONS

Natural gas is key to the energy transition and critical to delivering low-carbon, affordable fuel to rebuild the global economy. It is with pride, gratitude and hard work that we support this powerful mission with our performance every day. But bigger than the daily operations of midstream services are the people we impact. These lives — made better because of our work — will be our enduring legacy. Thank you to our employees, directors, partners and stakeholders for supporting our success and creating a legacy of responsible operations.

Paul M. Rady Signature

PAUL M. RADY
Chairman and CEO
Co-Founder