Antero Midstream Announces Third Quarter 2021 Financial and Operational Results Image

Antero Midstream Announces Third Quarter 2021 Financial and Operational Results

DENVER, Oct. 27, 2021 /PRNewswire/ -- Antero Midstream Corporation (NYSE: AM) ("Antero Midstream" or the "Company") today announced its third quarter 2021 financial and operational results.  The relevant unaudited condensed consolidated financial statements are included in Antero Midstream's Quarterly Report on Form 10-Q for the quarter ended September 30, 2021.

Third Quarter 2021 Earnings Highlights:

  • Net income was $89 million, or $0.19 per share, compared to $0.22 per share in the prior year quarter
  • Adjusted Net Income was $103 million, or $0.22 per share, compared to $0.25 per share in the prior year quarter (non-GAAP measure)
  • Adjusted EBITDA was $219 million, a 4% decrease compared to the prior year quarter (non-GAAP measure)
  • Capital expenditures were $81 million
  • Net cash provided by operating activities was $185 million
  • Free Cash Flow before dividends was $94 million and Free Cash Flow After Dividends was $(13) million (non-GAAP measure)
  • Net debt to last twelve months Adjusted EBITDA was 3.6x (non-GAAP measure)
  • Placed in service Smithburg 1 processing plant, adding 200 MMcf/d of Joint Venture processing capacity
  • Connected the 1,000th well to its integrated gathering and compression system since inception

Recent Developments:

  • Extended credit facility maturity from 2022 to 2026 and elected to reduce commitments from $2.13 billion to $1.25 billion
  • Published 2020 ESG report highlighting a focus on People, Performance and Purpose
    • Strong safety record with a Total Recordable Incident Rate (TRIR) of 0.469, a 22% year-over-year reduction and a 62% reduction since 2016
    • Continued reduction in methane leak loss rate to 0.015%, significantly below the ONE future industry goal of 1% and more than 50% lower than the midstream industry peer average of 0.033%
    • 84% of total wastewater was gathered, recycled and reused in completions. 100% of fresh water used in completions was transported by pipeline.
      • In combination, this eliminated 32 million truck traffic miles and avoided 14,000 metric tons of CO2e
    • Aligned executive compensation with ESG performance and established ESG Committee
    • Reaffirmed 2025 environmental goals of a 100% reduction in pipeline maintenance emissions and moved towards incorporating elements of TCFD and SASB disclosure frameworks and standards into reporting practices

Paul Rady, Chairman and CEO said, "During the third quarter Antero Midstream continued to execute on its business plan, placing in service the Smithburg 1 processing plant adding 200 MMcf/d of incremental Joint Venture processing capacity. In addition, Antero Midstream continued construction on additional low pressure, compression and high pressure infrastructure to support the expected throughput growth from the Antero Resources and QL Capital Partners drilling partnership."

Mr. Rady further added, "We also recently published our 2020 ESG report. The report highlights our commitment to the communities in which we operate and our continued reductions in our methane leak loss rate. In addition, the report highlights Antero Midstream's unique positioning that directly impacts populations living in energy poverty across the world. For the last several years, Antero Midstream provided integrated midstream services that allowed Antero Resources to ship approximately one-third of its LPG exports to developing nations, including the nations of Nigeria, Peru and India, improving people's health, safety and livelihood through the displacement of more expensive and more carbon-intensive energy sources."

For a discussion of the non-GAAP financial measures including Adjusted Net Income, Adjusted EBITDA, Free Cash Flow and Net Debt please see "Non-GAAP Financial Measures."

Third Quarter 2021 Financial Results

Low pressure gathering volumes for the third quarter of 2021 averaged 2,880 MMcf/d, a 6% decrease as compared to the prior year quarter.  Compression volumes for the third quarter of 2021 averaged 2,734 MMcf/d, a 3% decrease as compared to the third quarter of 2020.  High pressure gathering volumes for the third quarter of 2021 averaged 2,811 MMcf/d, a 7% decrease compared to the third quarter of 2020. Gathering and compression volumes were negatively impacted by approximately 100 MMcf/d due to downtime at the Sherwood and Hopedale processing and fractionation facilities during the quarter. Fresh water delivery volumes averaged 91 MBbl/d during the quarter, an 18% decrease compared to the third quarter of 2020.

Gross processing volumes from the Company's processing and fractionation joint venture with MPLX ("Joint Venture") averaged 1,539 MMcf/d for the third quarter of 2021, a 4% increase compared to the prior year quarter.  The increase in processing volumes was driven by placing the Smithburg 1 processing plant online during the quarter. Gross Joint Venture fractionation volumes averaged 37 MBbl/d, a 5% decrease compared to the prior year quarter.

Three Months Ended

September 30,

Average Daily Volumes:

2020

2021

%
Change

Low Pressure Gathering (MMcf/d)

3,051

2,880

(6)%

Compression (MMcf/d)

2,821

2,734

(3)%

High Pressure Gathering (MMcf/d)

3,008

2,811

(7)%

Fresh Water Delivery (MBbl/d)

111

91

(18)%

Gross Joint Venture Processing (MMcf/d)

1,484

1,539

4%

Gross Joint Venture Fractionation (MBbl/d)

39

37

(5)%

For the three months ended September 30, 2021, revenues were $225 million, comprised of $189 million from the Gathering and Processing segment and $54 million from the Water Handling segment, net of $18 million of amortization of customer relationships.  Water Handling revenues included $21 million from wastewater handling and high rate water transfer services.

Direct operating expenses for the Gathering and Processing and Water Handling segments were $16 million and $23 million, respectively, for a total of $39 million, compared to $38 million in total direct operating expenses in the prior year quarter. Water Handling operating expenses included $19 million from wastewater handling and high rate water transfer services. General and administrative expenses excluding equity-based compensation were $12 million during the third quarter of 2021.  Total operating expenses during the third quarter of 2021 included $3 million of equity-based compensation expense and $27 million of depreciation.    

Net income was $89 million, or $0.19 per share.  Net income adjusted for amortization of customer relationships and impairment expense, net of tax effects of reconciling items, or Adjusted Net Income, was $103 million. Adjusted Net Income per share was $0.22 per share, a 12% decrease compared to the prior year quarter. 

The following table reconciles Net Income to Adjusted Net Income (in thousands):

Three Months Ended
September 30,

2020

2021

Net Income

$

105,507

89,327

Amortization of customer relationships

17,800

17,668

Impairment expense

947

203

Tax effect of reconciling items(1)

(4,631)

(4,455)

Adjusted Net Income

$

119,623

102,743

(1)

Statutory tax rate was approximately 24.7% for 2020 and 24.9% for 2021.

Adjusted EBITDA was $219 million, a 4% decrease compared to the prior year quarter. Interest expense was $45 million, a 29% increase compared to the prior year quarter, driven by the issuances of senior notes due 2026 and 2029. Capital expenditures were $81 million, a 120% increase compared to the prior year quarter as Antero Midstream continued construction on growth projects supporting the drilling partnership.  Free Cash Flow before dividends was $94 million, a 40% decrease compared to the prior year quarter driven primarily by higher capital expenditures during the quarter. Free Cash Flow after dividends was a $13 million deficit compared to $11 million in the prior year quarter.

The following table reconciles Net Income to Adjusted EBITDA and Free Cash Flow before and after dividends (in thousands):

Three Months Ended
September 30,

2020

2021

Net Income

$

105,507

89,327

Interest expense, net

34,501

44,544

Provision for income tax expense

34,982

32,038

Amortization of customer relationships

17,800

17,668

Depreciation expense

26,801

27,487

Impairment expense

947

203

Accretion of asset retirement obligations

39

114

Equity-based compensation

3,678

3,255

Equity in earnings of unconsolidated affiliates

(23,173)

(24,088)

Distributions from unconsolidated affiliates

27,485

28,930

Adjusted EBITDA

$

228,567

219,478

Interest expense

(34,501)

(44,544)

Total capital expenditures (accrual-based)

(36,808)

(80,873)

Free Cash Flow before dividends

$

157,258

94,061

Dividends declared (accrual-based)

(146,566)

(107,436)

Free Cash Flow after dividends

$

10,692

(13,375)

The following table reconciles net cash provided by operating activities to Free Cash Flow before and after dividends (in thousands):

Three Months Ended
September 30,

2020

2021

Net cash provided by operating activities

$

158,476

185,115

Amortization of deferred financing costs

(1,109)

(1,419)

Settlement of asset retirement obligations

916

212

Changes in working capital

35,783

(8,974)

Total capital expenditures (accrual-based)

(36,808)

(80,873)

Free Cash Flow before dividends

$

157,258

94,061

Dividends declared (accrual-based)

(146,566)

(107,436)

Free Cash Flow after dividends

$

10,692

(13,375)

Third Quarter 2021 Operating Update

Gathering and Processing During the third quarter of 2021, Antero Midstream connected 18 wells to its gathering system. The Company's 3.2 Bcf/d of compression capacity was approximately 86% utilized during the quarter. During the third quarter the Joint Venture placed in-service the Smithburg 1 processing plant, which added 200 MMcf/d of incremental processing capacity. This expansion of processing capacity brings the Joint Venture's total processing capacity to 1.6 Bcf/d.  Joint Venture processing capacity was approximately 96% utilized and Joint Venture fractionation capacity was 93% utilized during the quarter.

Water HandlingAntero Midstream's water delivery systems serviced 18 well completions during the third quarter of 2021, a 14% decrease from the prior year quarter, driven by a reduction in completion activity by Antero Resources year over year.

Credit Facility Extension, Balance Sheet and Liquidity

On October 26th, 2021, Antero Midstream extended its bank credit facility from 2022 to 2026 and elected to reduce its commitments from $2.13 billion to $1.25 billion.  As of September 30, 2021, Antero Midstream had approximately $521 million drawn on its bank credit facility and over $700 million of pro form available borrowing capacity. Antero Midstream's Net Debt to trailing twelve months Adjusted EBITDA ("Leverage") was 3.6x as of September 30, 2021.

Brendan Krueger, CFO of Antero Midstream, said, "Antero Midstream continued to enhance its financial flexibility by extending its bank credit facility from 2022 to 2026, resulting in no senior note or bank debt maturities until 2026 and beyond.  In addition, we elected to reduce our commitments from $2.13 billion to $1.25 billion, which reflects the Company's strong liquidity position today and visibility into our long-term plan focused on generating free cash flow after dividends and further reducing absolute debt and leverage."

Capital Investments

Total accrued capital expenditures including investments in the Joint Venture were $81 million during the third quarter of 2021. Gathering, compression, and water infrastructure capital investments totaled $80 million and investments in unconsolidated affiliates for the Joint Venture were $1 million. Of the $80 million invested in gathering, compression, and water infrastructure, $69 million was in gathering and compression assets and $11 million was in water handling assets.   

Conference Call

A conference call for Antero Midstream is scheduled on Thursday, October 28, 2021 at 10:00 am MT to discuss the financial and operational results.  A brief Q&A session for security analysts will immediately follow the discussion of the results for the quarter.  To participate in the call, dial in at 877-407-9126 (U.S.), or 201-493-6751 (International) and reference "Antero Midstream".  A telephone replay of the call will be available until Thursday, November 4, 2021 at 10:00 am MT at 877-660-6853 (U.S.) or 201-612-7415 (International) using the conference ID: 13720354. To access the live webcast and view the related earnings conference call presentation, visit Antero Midstream's website at www.anteromidstream.com.  The webcast will be archived for replay until Thursday, November 4, 2021 at 10:00 am MT.

2020 ESG Report

On October 5, 2021, Antero Midstream published its 2020 ESG Report highlighting its focus on People, Performance and Purpose. The report details Antero Midstream's ongoing commitment to the communities in which it operates, safe operations, environmental excellence and strong governance.  The full report is available at www.anteromidstream.com

Non-GAAP Financial Measures and Definitions

Antero Midstream uses certain non-GAAP financial measures. Antero Midstream defines Adjusted Net Income as net income plus amortization of customer relationships and impairment expense, net of tax effect of reconciling items. Antero Midstream uses Adjusted Net Income to assess the operating performance of its assets. Antero Midstream defines Adjusted EBITDA as net income plus interest expense, provision for income tax expense, amortization of customer relationships, depreciation expense, impairment expense, accretion, equity-based compensation expense, excluding equity in earnings of unconsolidated affiliates, plus cash distributions from unconsolidated affiliates.

Antero Midstream uses Adjusted EBITDA to assess:

  • the financial performance of Antero Midstream's assets, without regard to financing methods, capital structure or historical cost basis;
  • its operating performance and return on capital as compared to other publicly traded companies in the midstream energy sector, without regard to financing or capital structure; and
  • the viability of acquisitions and other capital expenditure projects.

Antero Midstream defines Free Cash Flow before dividends as Adjusted EBITDA less interest expense and accrued capital expenditures. Free Cash Flow after dividends is defined as Free Cash Flow before dividends less dividends declared for the quarter. Antero Midstream uses Free Cash Flow before and after dividends as a performance metric to compare the cash generating performance of Antero Midstream from period to period. 

Adjusted EBITDA, Adjusted Net Income, and Free Cash Flow before and after dividends are non-GAAP financial measures.  The GAAP measure most directly comparable to Adjusted EBITDA and Adjusted Net Income is Net Income. The GAAP measure most directly comparable to Free Cash Flow before and after dividends is cash flows provided by (used in) operating activities.  Such non-GAAP financial measures should not be considered as alternatives to the GAAP measures of Net Income and cash flows provided by (used in) operating activities.  The presentations of such measures are not made in accordance with GAAP and have important limitations as analytical tools because they include some, but not all, items that affect Net Income and cash flows provided by (used in) operating activities.  You should not consider any or all such measures in isolation or as a substitute for analyses of results as reported under GAAP.  Antero Midstream's definitions of such measures may not be comparable to similarly titled measures of other companies.

Antero Midstream defines Net Debt as consolidated total debt less cash and cash equivalents. Antero Midstream views Net Debt as an important indicator in evaluating Antero Midstream's financial leverage.

The following table reconciles cash paid for capital expenditures and accrued capital expenditures during the period (in thousands):

Three Months Ended September 30,

2020

2021

Capital expenditures (as reported on a cash basis)

$

(44,665)

(83,687)

Change in accrued capital costs

(7,857)

(2,814)

Capital expenditures (accrual basis)

$

(36,808)

(80,873)

The following table reconciles consolidated total debt to consolidated net debt, excluding debt premiums and issuance costs, ("Net Debt") as used in this release (in thousands):

June 30,
2021

September 30,
2021

Bank credit facility

$

513,700

520,700

7.875% senior notes due 2026

550,000

550,000

5.75% senior notes due 2027

650,000

650,000

5.75% senior notes due 2028

650,000

650,000

5.375% senior notes due 2029

750,000

750,000

Consolidated total debt

3,113,700

3,120,700

Cash and cash equivalents

(678)

Consolidated net debt

$

3,113,022

3,120,700

The following table reconciles net income to Adjusted EBITDA for the last twelve months as used in this release (in thousands):

12 months ended
June 30, 2021

12 months ended
September 30, 2021

Net Income

$

345,629

329,449

Interest expense, net

160,436

170,479

Provision for income tax expense

113,685

110,741

Amortization of customer relationships

70,797

70,665

Depreciation expense

107,171

107,857

Impairment expense

10,475

9,731

Accretion of asset retirement obligations

310

385

Equity-based compensation

13,814

13,391

Equity in earnings of unconsolidated affiliates

(88,665)

(89,580)

Distributions from unconsolidated affiliates

115,215

116,660

Loss on asset sale

6,317

6,317

Loss on early extinguishment of debt

20,701

20,701

Adjusted EBITDA

$

$

875,885

866,796

Antero Midstream Corporation is a Delaware corporation that owns, operates and develops midstream gathering, compression, processing and fractionation assets located in the Appalachian Basin, as well as integrated water assets that primarily service Antero Resources Corporation's properties.

This release includes "forward-looking statements." Such forward-looking statements are subject to a number of risks and uncertainties, many of which are not under Antero Midstream's control. All statements, except for statements of historical fact, made in this release regarding activities, events or developments Antero Midstream expects, believes or anticipates will or may occur in the future, such as statements regarding Antero Midstream's ability to execute its business plan and return capital to its stockholders, information regarding Antero Midstream's return of capital policy, information regarding long-term financial and operating outlooks for Antero Midstream and Antero Resources, information regarding Antero Resources' expected future growth and its ability to meet its drilling and development plan and the participation level of Antero Resources' drilling partner and the impact on demand for Antero Midstream's services as a result of incremental production by Antero Resources, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All forward-looking statements speak only as of the date of this release. Although Antero Midstream believes that the plans, intentions and expectations reflected in or suggested by the forward-looking statements are reasonable, there is no assurance that these plans, intentions or expectations will be achieved. Therefore, actual outcomes and results could materially differ from what is expressed, implied or forecast in such statements. Except as required by law, Antero Midstream expressly disclaims any obligation to and does not intend to publicly update or revise any forward-looking statements.

In addition, many of the standards and metrics used in preparing this release and the ESG Report continue to evolve and are based on management expectations and assumptions believed to be reasonable at the time of preparation but should not be considered guarantees. The standards and metrics used, and the expectations and assumptions they are based on, have not been verified by any third party. In addition, while we seek to align these disclosures with the recommendations of various third-party frameworks, such as the Task Force on Climate-Related Financial Disclosures, we cannot guarantee strict adherence to these framework recommendations. Additionally, our disclosures based on these frameworks may change due to revisions in framework requirements, availability of information, changes in our business or applicable governmental policy, or other factors, some of which may be beyond our control.  The calculation of methane leak loss rate disclosed in this release conforms with ONE Future protocol, which is based on the EPA Greenhouse Gas Reporting Program.  With respect to its pipeline emissions goal, Antero Midstream anticipates achieving a 100% reduction in pipeline emissions by 2025 through operational efficiencies and the purchase of carbon offsets.

Antero Midstream cautions you that these forward-looking statements are subject to all of the risks and uncertainties incident to our business, most of which are difficult to predict and many of which are beyond Antero Midstream's control. These risks include, but are not limited to, commodity price volatility, inflation, environmental risks, Antero Resources' drilling and completion and other operating risks, regulatory changes, the uncertainty inherent in projecting Antero Resources' future rates of production, cash flows and access to capital, the timing of development expenditures, impacts of world health events, including the COVID-19 pandemic, cybersecurity risk, and the other risks described under the heading "Item 1A. Risk Factors" in Antero Midstream's Annual Report on Form 10-K for the year ended December 31, 2020.

This release and the ESG Report contain statements based on hypothetical or severely adverse scenarios and assumptions, and these statements should not necessarily be viewed as being representative of current or actual risk or forecasts of expected risk. While future events discussed in this release or the report may be significant, any significance should not be read as necessarily rising to the level of materiality of certain disclosures included in Antero Midstream's SEC filings. These scenarios cannot account for the entire realm of possible risks and have been selected based on what we believe to be a reasonable range of possible circumstances based on information currently available to us and the reasonableness of assumptions inherent in certain scenarios; however, our selection of scenarios may change over time as circumstances change.

ANTERO MIDSTREAM CORPORATION

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

December 31,

September 30,

2020

2021

Assets

Current assets:

Cash and cash equivalents

$

640

Accounts receivable–Antero Resources

73,722

85,152

Accounts receivable–third party

839

857

Income tax receivable

17,251

940

Other current assets

1,479

541

Total current assets

93,931

87,490

Property and equipment, net

3,254,044

3,345,843

Investments in unconsolidated affiliates

722,478

703,780

Deferred tax asset

103,402

14,855

Customer relationships

1,427,447

1,374,443

Other assets, net

9,610

7,222

Total assets

$

5,610,912

5,533,633

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable–Antero Resources

$

3,862

3,157

Accounts payable–third party

9,495

24,944

Accrued liabilities

74,947

85,576

Other current liabilities

5,701

5,013

Total current liabilities

94,005

118,690

Long-term liabilities:

Long-term debt

3,091,626

3,095,560

Other

6,995

6,790

Total liabilities

3,192,626

3,221,040

Stockholders' Equity:

Preferred stock, $0.01 par value: 100,000 authorized as of December 31, 2020 and September 30, 2021

Series A non-voting perpetual preferred stock; 12 designated and 10 issued and outstanding as of December 31, 2020 and September 30, 2021

Common stock, $0.01 par value; 2,000,000 authorized; 476,639 and 477,460 issued and outstanding as of December 31, 2020 and September 30, 2021, respectively

4,766

4,775

Additional paid-in capital

2,877,612

2,518,919

Accumulated deficit

(464,092)

(211,101)

Total stockholders' equity

2,418,286

2,312,593

Total liabilities and stockholders' equity

$

5,610,912

5,533,633

 

ANTERO MIDSTREAM CORPORATION

Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)

(In thousands, except per share amounts)

Three Months Ended September 30,

2020

2021

Revenue:

Gathering and compression–Antero Resources

$

190,214

188,716

Water handling–Antero Resources

61,001

53,511

Water handling–third party

245

Amortization of customer relationships

(17,800)

(17,668)

Total revenue

233,415

224,804

Operating expenses:

Direct operating

38,052

39,499

General and administrative (including $3,678 and $3,255 of equity-based compensation in 2020 and 2021, respectively)

13,232

14,810

Facility idling

2,527

870

Impairment of property and equipment

947

203

Depreciation

26,801

27,487

Accretion of asset retirement obligations

39

114

Total operating expenses

81,598

82,983

Operating income

151,817

141,821

Other income (expense):

Interest expense, net

(34,501)

(44,544)

Equity in earnings of unconsolidated affiliates

23,173

24,088

Total other expense

(11,328)

(20,456)

Income before income taxes

140,489

121,365

Provision for income tax expense

(34,982)

(32,038)

Net income and comprehensive income

$

105,507

89,327

Net income per share–basic

$

0.22

0.19

Net income per share–diluted

$

0.22

0.19

Weighted average common shares outstanding:

Basic

476,578

477,442

Diluted

478,694

479,695

 

ANTERO MIDSTREAM CORPORATION

Selected Operating Data (Unaudited)

Three Months Ended

Amount of

September 30,

 Increase

Percentage

2020

2021

or Decrease

Change

Operating Data:

Gathering—low pressure (MMcf)

280,688

264,999

(15,689)

(6)

%

Gathering—high pressure (MMcf)

276,699

258,585

(18,114)

(7)

%

Compression (MMcf)

259,523

251,555

(7,968)

(3)

%

Fresh water delivery (MBbl)

10,202

8,335

(1,867)

(18)

%

Other fluid handling (MBbl)

5,151

4,325

(826)

(16)

%

Wells serviced by fresh water delivery

21

18

(3)

(14)

%

Gathering—low pressure (MMcf/d)

3,051

2,880

(171)

(6)

%

Gathering—high pressure (MMcf/d)

3,008

2,811

(197)

(7)

%

Compression (MMcf/d)

2,821

2,734

(87)

(3)

%

Fresh water delivery (MBbl/d)

111

91

(20)

(18)

%

Other fluid handling (MBbl/d)

56

47

(9)

(16)

%

Average Realized Fees:

Average gathering—low pressure fee ($/Mcf)

$

0.33

0.33

*

Average gathering—high pressure fee ($/Mcf)

$

0.21

0.20

(0.01)

(5)

%

Average compression fee ($/Mcf)

$

0.20

0.20

*

Average fresh water delivery fee ($/Bbl)

$

3.96

3.96

*

Joint Venture Operating Data:

Processing—Joint Venture (MMcf)

136,555

141,580

5,025

4

%

Fractionation—Joint Venture (MBbl)

3,552

3,408

(144)

(4)

%

Processing—Joint Venture (MMcf/d)

1,484

1,539

55

4

%

Fractionation—Joint Venture (MBbl/d)

39

37

(2)

(5)

%

*

Not meaningful or applicable

 

ANTERO MIDSTREAM CORPORATION

Condensed Consolidated Results of Segment Operations (Unaudited)

Three Months Ended September 30, 2021

Gathering and

Water

Consolidated

(in thousands)

Processing

Handling

Unallocated (1)

Total

Revenues:

Revenue–Antero Resources

$

188,716

53,511

242,227

Revenue–third-party

245

245

Amortization of customer relationships

(9,271)

(8,397)

(17,668)

Total revenues

179,445

45,359

224,804

Operating expenses:

Direct operating

16,161

23,338

39,499

General and administrative (excluding equity-based compensation)

6,533

4,069

953

11,555

Equity-based compensation

2,543

485

227

3,255

Facility idling

870

870

Impairment of property and equipment

203

203

Depreciation

15,151

12,336

27,487

Accretion of asset retirement obligations

114

114

Total operating expenses

40,388

41,415

1,180

82,983

Operating income

139,057

3,944

(1,180)

141,821

Other income (expense):

Interest expense, net

(44,544)

(44,544)

Equity in earnings of unconsolidated affiliates

24,088

24,088

Total other income (expense)

24,088

(44,544)

(20,456)

Income before income taxes

163,145

3,944

(45,724)

121,365

Provision for income tax expense

(32,038)

(32,038)

Net income and comprehensive income

$

163,145

3,944

(77,762)

89,327

Adjusted EBITDA

$

219,478

(1)

Corporate expenses that are not directly attributable to either the gathering and processing or water handling segments.

 

ANTERO MIDSTREAM CORPORATION

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

Nine Months Ended September 30,

2020

2021

Cash flows provided by (used in) operating activities:

Net income (loss)

$

(198,985)

252,991

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation

81,889

80,956

Payment of contingent consideration in excess of acquisition date fair value

(8,076)

Accretion of asset retirement obligations

142

347

Impairment

665,491

1,582

Deferred income tax expense (benefit)

(21,425)

88,547

Equity-based compensation

9,713

10,326

Equity in earnings of unconsolidated affiliates

(63,197)

(66,347)

Distributions from unconsolidated affiliates

69,313

87,115

Amortization of customer relationships

53,011

53,004

Amortization of deferred financing costs

3,299

4,152

Loss on early extinguishment of debt

20,701

Settlement of asset retirement obligations

(1,517)

(814)

Loss on asset sale

240

3,628

Changes in assets and liabilities:

Accounts receivable–Antero Resources

17,081

(11,429)

Accounts receivable–third party

1,139

594

Income tax receivable

(17,547)

16,311

Other current assets

1,036

810

Accounts payable–Antero Resources

(717)

(705)

Accounts payable–third party

6,239

11,058

Accrued liabilities

(50,240)

(7,337)

Net cash provided by operating activities

546,889

545,490

Cash flows provided by (used in) investing activities:

Additions to gathering systems and facilities

(137,978)

(120,727)

Additions to water handling systems

(27,287)

(36,221)

Investments in unconsolidated affiliates

(24,802)

(2,070)

Cash received in asset sale

123

1,653

Change in other assets

1,938

Net cash used in investing activities

(188,006)

(157,365)

Cash flows provided by (used in) financing activities:

Dividends to stockholders

(443,059)

(363,712)

Dividends to preferred stockholders

(413)

(413)

Repurchases of common stock

(24,713)

Issuance of senior notes

750,000

Redemption of senior notes

(667,472)

Payments of deferred financing costs

(9,449)

Borrowings (repayments) on bank credit facilities, net

228,000

(92,800)

Payment of contingent acquisition consideration

(116,924)

Employee tax withholding for settlement of equity compensation awards

(466)

(4,885)

Other

(150)

(34)

Net cash used in financing activities

(357,725)

(388,765)

Net increase (decrease) in cash and cash equivalents

1,158

(640)

Cash and cash equivalents, beginning of period

1,235

640

Cash and cash equivalents, end of period

$

2,393

Supplemental disclosure of cash flow information:

Cash paid during the period for interest

$

135,426

132,630

Cash received during the period for income taxes

$

38,910

16,913

Increase (decrease) in accrued capital expenditures and accounts payable for property and equipment

$

(11,318)

22,675

 

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SOURCE Antero Midstream Corporation