AM 10-Q
Antero Midstream Corp (AM)
PartnersCapitalAbstract
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number:
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Securities registered pursuant to section 12(b) of the Act: | ||||
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Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Accelerated Filer ☐ | ||
Non-accelerated Filer ☐ | Smaller Reporting Company | |
Emerging Growth Company | ||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)
Number of shares of the registrant’s common stock outstanding as of April 24, 2026 (in thousands):
TABLE OF CONTENTS
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Some of the information in this Quarterly Report on Form 10-Q may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical fact, included in this Quarterly Report on Form 10-Q, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. Words such as “may,” “assume,” “forecast,” “position,” “predict,” “strategy,” “expect,” “intend,” “plan,” “estimate,” “anticipate,” “believe,” “project,” “budget,” “potential,” or “continue,” and similar expressions are used to identify forward-looking statements, although not all forward-looking statements contain such identifying words. When considering these forward-looking statements, investors should keep in mind the risk factors and other cautionary statements in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2025. These forward-looking statements are based on management’s current beliefs, based on currently available information, as to the outcome and timing of future events. Factors that could cause our actual results to differ materially from the results contemplated by such forward-looking statements include:
| ● | Antero Resources Corporation’s (“Antero Resources”) expected production and development plan; |
| ● | our ability to execute our business strategy; |
| ● | impacts to producer customers of insufficient storage capacity; |
| ● | our ability to obtain debt or equity financing on satisfactory terms to fund additional acquisitions, expansion projects, working capital requirements and the repayment or refinancing of indebtedness; |
| ● | natural gas, natural gas liquids (“NGLs”), and oil prices; |
| ● | our ability to realize the anticipated benefits of our investments in unconsolidated affiliates; |
| ● | our ability to execute our share repurchase and dividend programs; |
| ● | our ability to complete the construction of or purchase new gathering and compression, processing, water handling or other assets on schedule, at the budgeted cost or at all, and the ability of such assets to operate as designed or at expected levels; |
| ● | risks associated with the successful integration and future performance of the HG Acquisition (as defined in Note 3—Transactions to the unaudited condensed consolidated financial statements); |
| ● | costs of conducting our operations; |
| ● | impacts of geopolitical events, including the conflicts in Ukraine, Venezuela and in the Middle East, and world health events; |
| ● | actions taken by third-party producers, operators, processors and transporters; |
| ● | competition; |
| ● | government regulations and changes in laws; |
| ● | operating hazards, natural disasters, weather-related delays, casualty losses and other matters beyond our control; |
| ● | expectations regarding the amount and timing of litigation awards; |
| ● | pending legal or environmental matters; |
| ● | uncertainty regarding our future operating results; |
| ● | credit markets; |
| ● | our ability to achieve our greenhouse gas reduction targets and the costs associated therewith; |
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| ● | general economic conditions; and |
| ● | our other plans, objectives, expectations and intentions contained in this Quarterly Report on Form 10-Q. |
We caution investors that these forward-looking statements are subject to all of the risks and uncertainties incidental to our business, most of which are difficult to predict and many of which are beyond our control. These risks include, but are not limited to, commodity price volatility, inflation, supply chain or other disruptions, environmental risks, Antero Resources’ drilling and completion and other operating risks, regulatory changes or changes in law, 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, cybersecurity risks, the state of markets for, and availability of, verified quality carbon offsets and the other risks described or referenced under the heading “1A. Risk Factors” herein, including the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”), which is on file with the Securities and Exchange Commission (“SEC”).
Should one or more of the risks or uncertainties described or referenced in this Quarterly Report on Form 10-Q occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements.
All forward-looking statements, expressed or implied, included in this Quarterly Report on Form 10-Q are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.
Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q.
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PART I—FINANCIAL INFORMATION
ANTERO MIDSTREAM CORPORATION
Condensed Consolidated Balance Sheets
(In thousands, except per share amounts)
(Unaudited) | |||||||
December 31, | | March 31, | |||||
| 2025 | | 2026 |
| |||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | | — | ||||
Restricted cash | | — | |||||
Accounts receivable–Antero Resources | | | |||||
Accounts receivable–third party | | | |||||
Income tax receivable | | | |||||
Current assets held for sale | | — | |||||
Other current assets | | | |||||
Total current assets | | | |||||
Long-term assets: | |||||||
Property and equipment, net | | | |||||
Investments in unconsolidated affiliates | | | |||||
Customer relationships | | | |||||
Operating leases right-of-use assets | — | | |||||
Assets held for sale | | — | |||||
Other assets, net | | | |||||
Total assets | $ | | | ||||
Liabilities and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Accounts payable–Antero Resources | $ | | | ||||
Accounts payable–third party | | | |||||
Accrued liabilities | | | |||||
Short-term lease liabilities | — | | |||||
Current liabilities held for sale | | — | |||||
Other current liabilities | | | |||||
Total current liabilities | | | |||||
Long-term liabilities: | |||||||
Long-term debt | | | |||||
Deferred income tax liability, net | | | |||||
Long-term lease liabilities | — | | |||||
Liabilities held for sale | | — | |||||
Other | | | |||||
Total liabilities | | | |||||
Stockholders' equity: | |||||||
Preferred stock, $ | |||||||
Series A non-voting perpetual preferred stock; | |||||||
Common stock, $ | | | |||||
Additional paid-in capital | | | |||||
Retained earnings | | | |||||
Total stockholders' equity | | | |||||
Total liabilities and stockholders' equity | $ | | | ||||
See accompanying notes to unaudited condensed consolidated financial statements.
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ANTERO MIDSTREAM CORPORATION
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)
(In thousands, except per share amounts)
Three Months Ended March 31, | |||||||
| 2025 | | 2026 |
| |||
Revenue: | | | |||||
Gathering and compression–Antero Resources | $ | | | ||||
Gathering and compression–third party | — | | |||||
Water handling–Antero Resources | | | |||||
Water handling–third party | | | |||||
Amortization of customer relationships | ( | ( | |||||
Total revenue | | | |||||
Operating expenses: | |||||||
Direct operating | | | |||||
General and administrative (including $ | | | |||||
Facility idling | | | |||||
Depreciation | | | |||||
Impairment of property and equipment | | — | |||||
Gain on long-lived assets | — | ( | |||||
Other operating expense, net | | | |||||
Total operating expenses | | | |||||
Operating income | | | |||||
Other income (expense): | |||||||
Interest expense, net | ( | ( | |||||
Equity in earnings of unconsolidated affiliates | | | |||||
Transaction expense | — | ( | |||||
Total other expense | ( | ( | |||||
Income before income taxes | | | |||||
Income tax expense | ( | ( | |||||
Net income and comprehensive income | $ | | | ||||
Net income per common share–basic | $ | | | ||||
Net income per common share–diluted | $ | | | ||||
Weighted average common shares outstanding: | |||||||
Basic | | | |||||
Diluted | | | |||||
See accompanying notes to unaudited condensed consolidated financial statements.
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ANTERO MIDSTREAM CORPORATION
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)
(In thousands)
Additional | |||||||||||||||||||
Preferred | Common Stock | Paid-In | Retained | Total | |||||||||||||||
Stock | Shares | Amount | Capital | Earnings | Equity | ||||||||||||||
Balance at December 31, 2024 | | $ | — | | $ | | | | | ||||||||||
Dividends to stockholders | — | — | — | ( | ( | ( | |||||||||||||
Equity-based compensation | — | — | — | | — | | |||||||||||||
Issuance of common stock upon vesting of equity-based compensation awards, net of common stock withheld for income taxes | — | | | ( | — | ( | |||||||||||||
Repurchases and retirement of common stock | — | ( | ( | ( | ( | ( | |||||||||||||
Net income and comprehensive income | — | — | — | — | | | |||||||||||||
Balance at March 31, 2025 | $ | — | | | | | | ||||||||||||
Balance at December 31, 2025 | | $ | — | | $ | | | | | ||||||||||
Dividends to stockholders | — | — | — | ( | ( | ( | |||||||||||||
Equity-based compensation | — | — | — | | — | | |||||||||||||
Issuance of common stock upon vesting of equity-based compensation awards, net of common stock withheld for income taxes | — | | | ( | — | ( | |||||||||||||
Repurchases and retirement of common stock | — | ( | ( | ( | ( | ( | |||||||||||||
Net income and comprehensive income | — | — | — | — | | | |||||||||||||
Balance at March 31, 2026 | $ | — | | | | | | ||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
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ANTERO MIDSTREAM CORPORATION
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
Three Months Ended March 31, | |||||||
| 2025 | | 2026 |
| |||
Cash flows provided by (used in) operating activities: | | | | ||||
Net income | $ | | | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation | | | |||||
Impairment of property and equipment | | — | |||||
Deferred income tax expense | | | |||||
Equity-based compensation | | | |||||
Equity in earnings of unconsolidated affiliates | ( | ( | |||||
Distributions from unconsolidated affiliates | | | |||||
Amortization of customer relationships | | | |||||
Amortization of deferred financing costs | | | |||||
Settlement of asset retirement obligations | ( | ( | |||||
Gain on long-lived assets | — | ( | |||||
Other operating activities | | | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable–Antero Resources | ( | ( | |||||
Accounts receivable–third party | | ( | |||||
Other current assets | ( | ( | |||||
Accounts payable–Antero Resources | | | |||||
Accounts payable–third party | | | |||||
Income taxes payable | | — | |||||
Accrued liabilities | ( | | |||||
Net cash provided by operating activities | | | |||||
Cash flows provided by (used in) investing activities: | |||||||
Additions to gathering systems, facilities and other | ( | ( | |||||
Additions to water handling systems | ( | ( | |||||
Additional investments in unconsolidated affiliate | ( | ( | |||||
Acquisition of HG Midstream | — | ( | |||||
Proceeds from asset sales | | | |||||
Net cash used in investing activities | ( | ( | |||||
Cash flows provided by (used in) financing activities: | |||||||
Dividends to common stockholders | ( | ( | |||||
Dividends to preferred stockholders | ( | ( | |||||
Repurchases of common stock | ( | ( | |||||
Borrowings on Credit Facility | | | |||||
Repayments on Credit Facility | ( | ( | |||||
Payments of deferred financing costs | — | ( | |||||
Employee tax withholding for settlement of equity-based compensation awards | ( | ( | |||||
Payments on capital lease obligations | — | ( | |||||
Net cash provided by (used in) financing activities | ( | | |||||
Net decrease in cash, cash equivalents and restricted cash | ( | ||||||
Cash, cash equivalents and restricted cash, beginning of period | — | | |||||
Cash, cash equivalents and restricted cash, end of period | $ | | | ||||
Supplemental disclosure of cash flow information: | |||||||
Cash paid during the period for interest | | | |||||
Increase in accrued capital expenditures and accounts payable for property and equipment | | | |||||
Increase in accounts receivable–Antero Resources and accounts receivable–third party for the acquisition of HG Midstream | — | | |||||
Right-of-use assets obtained in exchange for new operating lease obligations | | | |||||
See accompanying notes to unaudited condensed consolidated financial statements.
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ANTERO MIDSTREAM CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
(1) Organization
Antero Midstream Corporation together with its consolidated subsidiaries (the “Company” or “Antero Midstream”) is a growth-oriented midstream company formed to own, operate and develop midstream energy infrastructure primarily to service Antero Resources and its production and completion activity in the Appalachian Basin. The Company’s assets consist of gathering pipelines, centralized compressor stations, interests in processing and fractionation plants and water handling assets. Antero Midstream provides midstream services to Antero Resources under long-term contracts. The Company’s corporate headquarters is located in Denver, Colorado.
(2) Summary of Significant Accounting Policies
(a) | Basis of Presentation |
These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC applicable to interim financial information and should be read in the context of the Company’s December 31, 2025 consolidated financial statements and notes thereto for a more complete understanding of the Company’s operations, financial position, and accounting policies. The Company’s December 31, 2025 consolidated financial statements were included in the Company’s 2025 Form 10-K, which was filed with the SEC.
These unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information, and, accordingly, do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, these unaudited condensed consolidated financial statements include all adjustments (consisting of normal and recurring accruals) considered necessary to present fairly the Company’s financial position as of December 31, 2025 and March 31, 2026, and results of operations and cash flows for the three months ended March 31, 2025 and 2026. The Company has no items of other comprehensive income or loss; therefore, net income is equal to comprehensive income.
Certain costs of doing business incurred and charged to the Company by Antero Resources have been reflected in the accompanying unaudited condensed consolidated financial statements. These costs include general and administrative expenses provided to the Company by Antero Resources in exchange for:
| ● | business services, such as payroll, accounts payable and facilities management; |
| ● | corporate services, such as finance and accounting, legal, human resources, investor relations and public and regulatory policy; and |
| ● | employee compensation. |
Transactions between the Company and Antero Resources have been identified in the unaudited condensed consolidated financial statements (see Note 5—Transactions with Affiliates).
(b) | Principles of Consolidation |
The accompanying unaudited condensed consolidated financial statements include the accounts of Antero Midstream Corporation and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in the Company’s unaudited condensed consolidated financial statements.
(c) | Restricted Cash |
The Company classifies restricted cash as all cash that is legally or contractually restricted as to withdrawal or usage, including amounts deposited in escrow that are restricted from use. The Company’s restricted cash as of December 31, 2025 was classified as a current asset because the restriction on such cash was released on February 3, 2026 at the closing of the HG Acquisition (as defined in Note 3—Transactions).
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ANTERO MIDSTREAM CORPORATION
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(d) | Recently Issued Accounting Standard |
In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 is intended to improve the disclosure about certain operating expenses primarily through enhanced disclosure of cost of sales and selling, general and administrative expenses. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. ASU 2024-03 can be applied on either a prospective or a retrospective basis at the Company’s election. The Company is evaluating the impact that ASU 2024-03 will have on the financial statements and its plans for adoption, including its transition method and adoption date.
(3) Transactions
(a) HG Acquisition
On December 5, 2025, Antero Midstream Partners LP (“Antero Midstream Partners”), an indirect, wholly-owned subsidiary of the Company, entered into a definitive agreement to acquire
The HG Acquisition has been accounted for using the acquisition method of accounting with Antero Midstream Partners identified as the acquirer of HG Midstream. Due to the proximity of the HG Acquisition to March 31, 2026, the Company is still completing its analysis of the final purchase price allocation. The Company expects to complete the purchase price allocation during the 12-month period following the Closing Date. The table below summarizes the preliminary purchase price and estimated fair values of the assets acquired and liabilities assumed as of February 3, 2026. See Note 14—Fair Value Measurement for additional information on the fair value assumptions and hierarchy used in the HG Acquisition preliminary purchase price allocation.
Preliminary Purchase | ||||
(in thousands) | Price Allocation | |||
Total cash consideration | $ | | ||
Fair value of assets acquired: | ||||
Cash | $ | | ||
Accounts receivable – Antero Resources | | |||
Property and equipment, net | | |||
Customer relationships | | |||
Operating lease right-of-use asset | | |||
Other assets | | |||
Amount attributable to assets acquired | $ | | ||
Fair value of liabilities assumed: | ||||
Accrued liabilities | $ | | ||
Lease liabilities | | |||
Amount attributable to liabilities assumed | $ | | ||
The Company’s financial statements include $
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ANTERO MIDSTREAM CORPORATION
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
The following table summarizes amounts contributed by the assets acquired in the HG Acquisition to the Company’s unaudited condensed consolidated results of operations and comprehensive income upon transaction closing on February 3, 2026:
February 3, 2026 | ||||
(in thousands) | through March 31, 2026 | |||
Gathering and compression–Antero Resources | $ | | ||
Water handling–Antero Resources | | |||
Amortization of customer relationships | ( | |||
Total revenue | | |||
Net loss (1) | $ | ( | ||
| (1) | Net loss includes transaction expense of $ |
Pro forma condensed consolidated results of operations and comprehensive income are not presented because the HG Acquisition was not significant to the Company’s unaudited condensed consolidated financial statements.
(b) Utica Shale Divestiture
On December 5, 2025, certain wholly-owned subsidiaries of the Company entered into a purchase and sale agreement with
The Utica Shale Property and Equipment and its associated assets and liabilities were classified as held for sale as of December 31, 2025 on the Company’s consolidated balance sheet, which relate to both the Company’s gathering and processing and water handling reportable segments. The Utica Shale Divestiture does not qualify as a discontinued operation under FASB ASC Topic 205, Presentation of Financial Statements, as it does not represent a strategic shift that will have a major effect on the Company’s operations or financial results.
The cash consideration received for the Utica Shale Divestiture, less costs to sell, of approximately $
9
ANTERO MIDSTREAM CORPORATION
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
The carrying value of the Utica Shale Property and Equipment’s assets and liabilities held for sale were as follows:
(in thousands) | | December 31, 2025 | ||
Current assets: | ||||
Accounts receivable–Antero Resources | $ | | ||
Long-term assets: | ||||
Property and equipment, net | | |||
Other assets, net | | |||
Total assets | $ | | ||
Current liabilities: | ||||
Accounts payable–third party | $ | | ||
Accrued liabilities | | |||
Long-term liabilities: | ||||
Other long-term liabilities | | |||
Total liabilities | $ | | ||
(4) Intangibles
All customer relationships are subject to amortization and are amortized over a weighted average period of
(Unaudited) | |||||||
December 31, | March 31, | ||||||
(in thousands) | 2025 | | 2026 | ||||
Gross carrying value of customer relationships | $ | | | | |||
Accumulated amortization of customer relationships | ( | ( | |||||
Customer relationships | $ | | | ||||
Future amortization expense as of March 31, 2026 is as follows (in thousands):
Remainder of year ending December 31, 2026 | $ | | |||||
Year ending December 31, 2027 | | ||||||
Year ending December 31, 2028 | | ||||||
Year ending December 31, 2029 | | ||||||
Year ending December 31, 2030 | | ||||||
Thereafter | | ||||||
Total | $ | |
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ANTERO MIDSTREAM CORPORATION
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(5) Transactions with Affiliates
(a) | Revenues |
Substantially all revenues earned during the three months ended March 31, 2025 and 2026 were earned from Antero Resources, under various agreements for gathering and compression and water handling services. Revenues earned from gathering and compression services consist of lease income.
(b) | Accounts receivable—Antero Resources and Accounts payable—Antero Resources |
Accounts receivable—Antero Resources represents amounts due from Antero Resources, primarily related to gathering and compression services and water handling services and cash consideration for the HG Acquisition. Accounts payable—Antero Resources represents amounts due to Antero Resources for general and administrative and other costs.
(c) | Allocation of Costs Charged by Antero Resources |
The employees supporting the Company’s operations are concurrently employed by Antero Resources and the Company. Direct operating expense includes costs charged to the Company of $
(6) Revenue
All of the Company’s gathering and compression revenues are derived from operating lease agreements, and all of the Company’s water handling revenues are derived from service contracts with customers. The Company earned substantially all of its revenues from Antero Resources.
(a) | Gathering and Compression |
The Company’s gathering and compression service agreements with Antero Resources include: (i) the second amended and restated gathering and compression agreement dated December 8, 2019, including the updates agreed to in principle as it relates to the HG Acquisition (the “2019 gathering and compression agreement”), (ii) a gathering and compression agreement acquired with the Crestwood Equity Partners LP (“Crestwood”) assets (the “Marcellus gathering and compression agreement”), and (iii) a gathering and compression agreement acquired with the Summit Midstream Partners, LP (NYSE: SMLP) (“Summit”) assets (the “Mountaineer gathering and compression agreement”). The Company also had a compression agreement acquired with the EnLink Midstream LLC (NYSE: ENLC) (“EnLink”) assets that was divested at the closing of the Utica Shale Divestiture on February 23, 2026 (the “Utica compression agreement” and together with the 2019 gathering and compression agreement, the Marcellus gathering and compression agreement and the Mountaineer gathering and compression agreement, the “gathering and compression agreements”).
Pursuant to the gathering and compression agreements, Antero Resources has dedicated substantially all of its current and future acreage in West Virginia, Ohio and Pennsylvania to the Company for gathering and compression services. The 2019 gathering and compression agreement, Marcellus gathering and compression agreement and Mountaineer gathering and compression agreement have initial terms through 2038, 2031 and 2026, respectively. Upon expiration of the Marcellus gathering and compression agreement and the Mountaineer gathering and compression agreement, the Company will continue to provide gathering and compression services under the 2019 gathering and compression agreement. The Company also has an option to gather and compress natural gas produced by Antero Resources on any additional undedicated acreage it acquires during the term of the 2019 gathering and compression agreement outside of West Virginia, Ohio and Pennsylvania on the same terms and conditions as the 2019 gathering and compression agreement. Upon completion of the initial contract term in 2038, the 2019 gathering and compression agreement will continue in effect from year to year until such time as the agreement
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ANTERO MIDSTREAM CORPORATION
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
is terminated, effective upon an anniversary of the effective date of the agreement, by notice from either the Company or Antero Resources to the other party on or before the
Under the gathering and compression agreements, the Company receives, where applicable, a gathering fee, a centralized compression fee and a high pressure gathering fee, substantially all of which are subject to annual Consumer Price Index (“CPI”)-based adjustments (or, in the case of the 2019 gathering and compression agreement, the option in certain cases to elect a cost of service fee when such assets are placed in-service). In addition, under the 2019 gathering and compression agreement, the Company receives a reimbursement for certain variable costs, such as electricity and operating expenses. In light of the nature and location of the assets and operations acquired in the HG Acquisition, the Company and Antero Resources agreed in principle to certain updates to, and intend to modify, their existing commercial arrangement to provide for on-pad compression with respect to certain wells. For on-pad compression services provided by third-party-owned equipment, Antero Resources will reimburse the Company’s third-party out-of-pocket costs plus
The Company determined that its gathering and compression agreements are operating leases as Antero Resources obtains substantially all of the economic benefit of the assets and has the right to direct the use of the assets. Each gathering and compression system is an identifiable asset, and consists of a network of assets that may include underground gathering pipelines, on-pad compression, centralized compression stations and/or high pressure pipelines, among other assets, that connect and deliver gas from specific well pads to a third-party pipeline, third-party processing plant or a Joint Venture processing plant. The Company has a compression system related to its EnLink assets that was an identifiable asset, and consisted of a network of assets that included centralized compressor stations that connected to underground high pressure pipelines that transported the gas to a third-party pipeline, third-party processing plant or a Joint Venture processing plant. The Company divested of this compression system in the Utica Shale Divestiture. Each set of assets in an agreement is considered to be a single lease due to the interrelated network of the assets required to provide services under each respective agreement. When a modification to an agreement occurs, the Company reassesses the classification of the lease. The Company accounts for its lease and non-lease components as a single lease component as the lease component is the predominant component. The non-lease components consist of operating, oversight and maintenance of the gathering systems, which are performed on time-elapsed measures.
The 2019 gathering and compression agreement, the Marcellus gathering and compression agreement and the Mountaineer gathering and compression agreement include certain fixed fee provisions. If and to the extent Antero Resources requests that the Company construct new gathering lines, centralized compressor stations and/or high pressure lines, the 2019 gathering and compression agreement contains options at the Company’s election for either (i) minimum volume commitments that require Antero Resources to utilize or pay for
The Company recognizes lease income from its minimum lease payments under its gathering and compression agreements on a straight-line basis. Additional variable operating lease income is earned when volumes in excess of the minimum commitments or fees are delivered under the contract. The Company recognizes variable lease income when (i) gathering volumes are delivered to a centralized compressor station, centralized compression volumes are delivered to a high pressure line and high pressure volumes are delivered to a processing plant or transmission pipeline, as applicable or (ii) on-pad compression volumes are delivered to a gathering line and gathering volumes are delivered to a processing plant or transmission pipeline, as applicable. Minimum volume commitments for the 2019 gathering and compression agreement are aggregated such that the agreement has a single minimum volume commitment for the respective service each year. The Mountaineer gathering and compression agreement minimum compression and gathering fees are not subject to aggregation
12
ANTERO MIDSTREAM CORPORATION
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
and are determined on a monthly basis for each centralized compressor station and gathering line, respectively, subject to such agreement. The Company invoices the customer the month after each service is performed, and payment is due in the same month. The Company is not party to any leases that have not commenced.
Minimum future lease cash flows to be received by the Company under the gathering and compression agreements as of March 31, 2026 are as follows (in thousands):
Remainder of year ending December 31, 2026 | $ | | ||
Year ending December 31, 2027 | | |||
Year ending December 31, 2028 | | |||
Year ending December 31, 2029 | | |||
Year ending December 31, 2030 | | |||
Thereafter | | |||
Total | $ | |
(b) | Water Handling |
The Company is party to a water services agreement with Antero Resources, whereby the Company provides certain water handling services to Antero Resources within an area of dedication in defined service areas in West Virginia. The initial term of the water services agreement runs to 2035. Upon completion of the initial term in 2035, the water services agreement will continue in effect from year to year until such time as the agreement is terminated, effective upon an anniversary of the effective date of the agreement, by notice from either the Company or Antero Resources to the other party on or before the
The Company satisfies its performance obligations and recognizes revenue when (i) the fresh water volumes have been delivered to the hydration unit of a specified well pad or (ii) other fluid handling services have been completed. The Company invoices the customer the month after water services are performed, and payment is due in the same month. For services contracted through third-party providers, the Company’s performance obligation is satisfied when the service to be performed by the third-party provider has been completed. The Company invoices the customer after the third-party provider billing is received, and payment is due in the same month.
Transaction Price Allocated to Remaining Performance Obligations
The Company’s water services agreement with Antero Resources has a term greater than one year. The Company is not required to disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under this contract, each unit of product delivered to the customer represents a separate performance obligation; therefore, future volumes are wholly unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is not required.
13
ANTERO MIDSTREAM CORPORATION
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
The Company also performs water services for third-party customers and such contracts are short-term in nature with a contract term of one year or less. Accordingly, the Company is exempt from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of
Contract Balances
Under the Company’s water service contracts, the Company invoices customers after the performance obligations have been satisfied, at which point payment is unconditional. Accordingly, the Company’s water service contracts do not give rise to contract assets or liabilities.
(c) | Disaggregation of Revenue |
In the following table, revenue is disaggregated by type of service and type of fee and is identified by the reportable segment to which such revenues relate. See Note 17—Reportable Segments for additional information.
Three Months Ended March 31, | |||||||
(in thousands) | | 2025 | 2026 |
| |||
Reportable segment / Type of service | |||||||
Gathering and Processing (1) | |||||||
Gathering | $ | | | ||||
Compression | | | |||||
High pressure gathering | | | |||||
Amortization of customer relationships | ( | ( | |||||
Water Handling | |||||||
Fresh water delivery | | | |||||
Other fluid handling | | | |||||
Amortization of customer relationships | ( | ( | |||||
Total | $ | | | ||||
Reportable segment / Type of contract | |||||||
Gathering and Processing (1) | |||||||
Per unit fixed fee | $ | | | ||||
Cost plus | — | | |||||
Amortization of customer relationships | ( | ( | |||||
Water Handling | |||||||
Per unit fixed fee | | | |||||
Cost plus | | | |||||
Cost of service fee | | | |||||
Amortization of customer relationships | ( | ( | |||||
Total | $ | | | ||||
| (1) | Revenue related to the gathering and processing segment is classified as lease income related to the gathering and compression systems. |
The Company’s receivables from its contracts with customers and operating leases as of December 31, 2025 and March 31, 2026, were $
14
ANTERO MIDSTREAM CORPORATION
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(7) Property and Equipment
Property and equipment, net consisted of the following items:
(Unaudited) | |||||||||
Estimated | December 31, | March 31, | |||||||
(in thousands) | | Useful Lives | | 2025 | | 2026 |
| ||
Land | | n/a | | $ | | | | ||
Gathering systems and facilities | | | |||||||
Permanent buried pipelines and equipment | | | |||||||
Surface pipelines and equipment | | | |||||||
Heavy trucks and equipment | | | |||||||
Above ground storage tanks | | | |||||||
Other assets | | | |||||||
Construction-in-progress | n/a |
| | | |||||
Total property and equipment | | | |||||||
Less accumulated depreciation | ( | ( | |||||||
Property and equipment, net | $ | | | ||||||
(1) | Gathering systems and facilities are recognized as a single-leased asset with |
(8) Accrued Liabilities
Accrued liabilities consisted of the following items:
(Unaudited) | |||||||
December 31, | | March 31, | |||||
(in thousands) | | 2025 | | 2026 |
| ||
Capital expenditures | $ | | | ||||
Operating expenses | | | |||||
Interest expense | | | |||||
Ad valorem taxes | | | |||||
Other | | | |||||
Total accrued liabilities | $ | | | ||||
(9) Long-Term Debt
Long-term debt consisted of the following items:
(Unaudited) | |||||||
December 31, | | March 31, | |||||
(in thousands) | 2025 | | 2026 | ||||
Credit Facility | | $ | — | | | ||
| | ||||||
| | ||||||
| | ||||||
| | ||||||
| | ||||||
Total principal | | | |||||
Unamortized debt issuance costs | ( | ( | |||||
Total long-term debt | $ | | | ||||
15
ANTERO MIDSTREAM CORPORATION
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(a) | Credit Facility |
On July 30, 2024, Antero Midstream Partners, as borrower (the “Borrower”), amended and restated its senior secured revolving credit facility with a syndicate of banks (as amended by the First Amendment thereto, dated as of December 11, 2025, the “Credit Facility”). The Credit Facility is guaranteed on a secured basis by Antero Midstream LLC, Antero Treatment LLC, Antero Water LLC and Antero Midstream Finance Corporation (“Finance Corp”).
Lender commitments under the Credit Facility were $
The Credit Facility contains negative and affirmative covenants applicable to the Borrower and its restricted subsidiaries customary for credit facilities of this type, including, among other things, limitations on: liens; indebtedness; investments; fundamental changes, such as mergers, consolidations, liquidations and dissolutions; the disposition of assets; transactions with affiliates that are not on arms’-length terms; prepayments and amendments of certain indebtedness; and swap and hedge transactions.
The Credit Facility permits distributions to the holders of the Borrower’s equity interests in accordance with the cash distribution policy, adopted by the board under the partnership agreement of the Borrower, provided that no event of default exists or would be caused thereby, and only to the extent permitted by the Borrower’s organizational documents.
The Credit Facility also requires the Borrower to maintain the following financial ratios:
| ● | other than during an Investment Grade Period (as defined in the Credit Facility) a consolidated interest coverage ratio, which is the ratio of Antero Midstream Partners’ consolidated EBITDA to its consolidated current interest charges of at least |
| ● | a consolidated total leverage ratio, which is the ratio of consolidated debt to consolidated EBITDA, of not more than |
| ● | after a Financial Covenant Election, a consolidated senior secured leverage ratio covenant in addition to the |
The Borrower was in compliance with all of the financial covenants under the Credit Facility as of December 31, 2025 and March 31, 2026.
The Credit Facility provides for borrowing under either the Adjusted Term Secured Overnight Financing Rate (“”) plus a
16
ANTERO MIDSTREAM CORPORATION
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
If the Borrower receives at least two Investment Grade Ratings (as defined in the Credit Facility), no default or event of default exists and the Borrower is in pro forma compliance with the Credit Facility’s financial covenants (subject to provision of the Credit Facility), the Borrower may elect to enter into an Investment Grade Period. During an Investment Grade Period, the interest margin is determined by reference to the Company’s corporate family rating, which for SOFR loans range from
As of December 31, 2025, the Borrower had
(b) |
On February 25, 2019, Antero Midstream Partners and its wholly owned subsidiary Finance Corp (the “Issuers”) issued $
(c) |
On June 28, 2019, the Issuers issued $
(d) |
On June 8, 2021, the Issuers issued $
(e) |
On January 16, 2024, the Issuers issued $
17
ANTERO MIDSTREAM CORPORATION
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
aggregate principal amount of the 2032 Notes with an amount of cash not greater than the net cash proceeds of certain equity offerings, if certain conditions are met, at a redemption price of
(f) |
On September 22, 2025, the Issuers issued $
(g) |
On December 23, 2025, the Issuers issued $
Antero Midstream Partners may also redeem all or a part of the 2034 Notes at any time on or after January 1, 2029 at the redemption prices ranging from
(h) | Senior Notes Guarantors |
The Company and each of the Company’s wholly owned subsidiaries (except for the Issuers) has fully and unconditionally guaranteed the 2028 Notes, 2029 Notes, 2032 Notes, 2033 Notes and 2034 Notes (collectively the “Senior Notes”). In the event a guarantor is sold or disposed of (whether by merger, consolidation, the sale of a sufficient amount of its capital stock so that it no longer qualifies as a Restricted Subsidiary (as defined in the applicable indenture governing the series of Senior Notes) of the Issuer or the sale of all or substantially all of its assets) and whether or not the guarantor is the surviving entity in such transaction to a person that is not an Issuer or a Restricted Subsidiary of an Issuer, such guarantor will be
18
ANTERO MIDSTREAM CORPORATION
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
released from its obligations under its guarantee if the sale or other disposition does not violate the covenants set forth in the indentures governing the applicable Senior Notes.
In addition, a guarantor will be released from its obligations under the applicable indenture and its guarantee (i) upon the release or discharge of the guarantee of other indebtedness under a credit facility that resulted in the creation of such guarantee, except a release or discharge by or as a result of payment under such guarantee, (ii) if the Issuers designate such subsidiary as an unrestricted subsidiary and such designation complies with the other applicable provisions of the indenture governing the applicable Senior Notes or (iii) in connection with any covenant defeasance, legal defeasance or satisfaction and discharge of the applicable Senior Notes.
During the three months ended March 31, 2025 and 2026, all of the Company’s assets and operations are attributable to the Issuers and its guarantors.
(10) Leases
The Company leases certain compressors and water handling equipment. Leases with an initial term of 12 months or less are considered short-term and are not recorded on the balance sheet. Instead, the short-term leases are recognized in expense on a straight-line basis over the lease term.
Most
The Company considers all contracts that have assets specified in the contract, either explicitly or implicitly, that the Company has substantially all of the capacity of the asset, and has the right to obtain substantially all of the economic benefits of that asset, without the lessor’s ability to have a substantive right to substitute that asset, as leased assets. For any contract deemed to include a leased asset, that asset is capitalized on the condensed consolidated balance sheet as a right-of-use asset and a corresponding lease liability is recorded at the present value of the known future minimum payments of the contract using a discount rate on the date of commencement. The leased asset classification is determined at the date of recording as either operating or financing, depending upon certain criteria of the contract.
The discount rate used for present value calculations is the discount rate implicit in the contract. If an implicit rate is not determinable, a collateralized incremental borrowing rate is used at the date of commencement. As new leases commence or previous leases are modified, the discount rate used in the present value calculation is the current period applicable discount rate.
The Company has made an accounting policy election to adopt the practical expedient for combining lease and non-lease components on an asset class basis. This expedient allows the Company to combine non-lease components such as real estate taxes, insurance, maintenance and other operating expenses associated with the leased premises with the lease component of a lease agreement on an asset class basis when the non-lease components of the agreement cannot be easily bifurcated from the lease payment. Currently, the Company is applying this expedient to its compressor and water handling equipment agreements.
19
ANTERO MIDSTREAM CORPORATION
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(a) | Maturities of Lease Liabilities |
The table below is a schedule of future minimum payments for operating and financing lease liabilities as of March 31, 2026:
(in thousands) | Operating Leases | Financing Leases | Total | |||||||
Remainder of 2026 | $ | | | | ||||||
2027 | | | | |||||||
2028 | | — | | |||||||
2029 | | — | | |||||||
2030 | | — | | |||||||
Thereafter | | — | | |||||||
Total lease payments | | | | |||||||
Less: imputed interest | ( | ( | ( | |||||||
Total | $ | | | | ||||||
(b) | Lease Term and Discount Rate |
(Unaudited) | ||||||||||
December 31, 2025 | March 31, 2026 | |||||||||
Operating Leases | Finance Leases | Operating Leases | Finance Leases | |||||||
Weighted average remaining lease term | years | * | years | years | ||||||
Weighted average discount rate | | % | * | | % | | % | |||
* | Not applicable |
(11) Equity-Based Compensation
(a) | Summary of Equity-Based Compensation |
The Company’s equity-based compensation includes costs related to its long term incentive plans. Antero Midstream’s equity-based compensation expense is included in general and administrative expenses, and recorded as a credit to additional paid-in capital.
On June 5, 2024, the Company’s stockholders approved the Amended and Restated Antero Midstream Corporation Long Term Incentive Plan (the “AM LTIP”). The AM LTIP provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), dividend equivalents, other stock-based awards, cash awards and substitute awards. The terms and conditions of the awards granted are established by the compensation committee of the Board. As of March 31, 2026, a total of
The Company’s equity-based compensation expense, by type of award, is as follows:
Three Months Ended March 31, | |||||||
(in thousands) | 2025 |
| 2026 | ||||
Restricted stock units | $ | | | ||||
Performance share units | | | |||||
Equity awards issued to directors | | | |||||
Total expense | $ | | | ||||
20
ANTERO MIDSTREAM CORPORATION
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(b) | Restricted Stock Unit Awards |
A summary of the RSU awards activity is as follows:
Weighted Average | ||||||
Number | Grant Date | |||||
| of Units | | Fair Value | |||
Total awarded and unvested—December 31, 2025 | | $ | | |||
Granted | | | ||||
Vested | ( | | ||||
Forfeited | ( | | ||||
Total awarded and unvested—March 31, 2026 | | $ | | |||
As of March 31, 2026, unamortized equity-based compensation expense of $
(c) | Performance Share Unit Awards |
Performance Share Unit Awards Based on Return on Invested Capital
In March 2023, the Company granted PSUs to certain of its employees and executive officers that vest based on the Company’s actual ROIC (as defined in the award agreement) over a
In March 2026, the Company granted PSUs to certain of its executive officers that vest based on the Company’s actual ROIC (as defined in the award agreement) over a
Summary Information for Performance Share Unit Awards
A summary of the PSU awards activity is as follows:
Weighted Average | ||||||
Number | Grant Date | |||||
| of Units | | Fair Value | |||
Total awarded and unvested—December 31, 2025 | | $ | | |||
Granted | | | ||||
Vested | ( | | ||||
Total awarded and unvested—March 31, 2026 | | $ | | |||
As of March 31, 2026, unamortized equity-based compensation expense of $
21
ANTERO MIDSTREAM CORPORATION
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(12) Cash Dividends
The Company paid cash dividends for the quarter indicated as follows (in thousands, except per share data):
Dividends |
| ||||||||||
Period | | Record Date | | Dividend Date | | Dividends | | per Share | |||
Q4 2024 | $ | | $ | ||||||||
* | | * | |||||||||
Q1 2025 | | ||||||||||
* | | * | |||||||||
Q2 2025 | | ||||||||||
* | | * | |||||||||
Q3 2025 | | ||||||||||
* | | * | |||||||||
Total 2025 | $ | | |||||||||
Q4 2025 | $ | | $ | ||||||||
* | | * | |||||||||
Total 2026 | $ | | |||||||||
* | Dividends are paid in accordance with the terms of the Series A Preferred Stock (as defined below) as discussed in Note 13—Equity and Net Income Per Common Share. |
On
The Board also declared a cash dividend of $
(13) Equity and Net Income Per Common Share
(a) | Preferred Stock |
The Board authorized
22
ANTERO MIDSTREAM CORPORATION
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(b) | Weighted Average Common Shares Outstanding |
The following is a reconciliation of the Company’s basic weighted average common shares outstanding to diluted weighted average common shares outstanding:
Three Months Ended March 31, | |||||||
(in thousands) | | 2025 |
| 2026 | |||
Basic weighted average number of common shares outstanding | | | |||||
Add: Dilutive effect of RSUs | | | |||||
Add: Dilutive effect of PSUs | | | |||||
Add: Dilutive effect of Series A Preferred Stock | | | |||||
Diluted weighted average number of common shares outstanding | | | |||||
There were
(c) | Net Income Per Common Share |
Net income per common share—basic for each period is computed by dividing the net income or loss attributable to the Company by the basic weighted average number of common shares outstanding during the period. Net income per common share—diluted for each period is computed after giving consideration to the potential dilution from outstanding equity-based awards, calculated using the treasury stock method. During periods in which the Company incurs a net loss, diluted weighted average common shares outstanding are equal to basic weighted average common shares outstanding because the effect of all equity-based awards is anti-dilutive.
Three Months Ended March 31, | |||||||
(in thousands, except per share amounts) | | 2025 |
| 2026 |
| ||
Net income | $ | | | ||||
Less preferred stock dividends | ( | ( | |||||
Net income available to common shareholders | $ | | | ||||
Net income per common share–basic | $ | | | ||||
Net income per common share–diluted | $ | | | ||||
Weighted average common shares outstanding–basic | | | |||||
Weighted average common shares outstanding–diluted | | | |||||
(14) Fair Value Measurement
(a) | Senior Unsecured Notes |
The fair value and carrying value of the Company’s Senior Notes is as follows:
(Unaudited) | |||||||||||||
December 31, 2025 | March 31, 2026 | ||||||||||||
(in thousands) | Fair Value (1) | Carrying Value (2) | Fair Value (1) | Carrying Value (2) | |||||||||
2028 Notes | $ | | | | |||||||||
2029 Notes | | | | ||||||||||
2032 Notes | | | | | |||||||||
2033 Notes | | | | | |||||||||
2034 Notes | | | | | |||||||||
Total | $ | | | | | ||||||||
| (1) | Fair values are based on Level 2 market data inputs. |
| (2) | Carrying values are presented net of unamortized debt issuance costs. |
23
ANTERO MIDSTREAM CORPORATION
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
(b) | Other Assets and Liabilities |
The carrying values on the condensed consolidated balance sheets of the Company’s cash and cash equivalents, restricted cash, accounts receivable—Antero Resources, accounts receivable—third party, other current assets, accounts payable—Antero Resources, accounts payable—third party, accrued liabilities and other current liabilities approximate fair values due to their short-term maturities. The carrying value of the amounts under the Credit Facility as of December 31, 2025 and March 31, 2026 approximated fair value because the variable interest rates are reflective of current market conditions.
(c) | HG Acquisition |
The HG Acquisition was accounted for under the acquisition method of accounting, and as such, the Company estimated the fair value of assets acquired and liabilities assumed as of February 3, 2026. See Note 3—Transactions.
The Company used a cost approach to estimate the fair value of property and equipment acquired based on inputs that are not observable in the market, whereby it is a Level 3 fair value measurement. The significant inputs to the property and equipment fair value include replacement cost of similar assets, adjusted for depreciation based on asset age and condition, economic and functional obsolescence, location, normal useful lives and capacity. The Company used a discounted cash flow technique, which is an income approach, to estimate the fair value of the customer relationships, whereby it is a Level 3 fair value measurement. The significant inputs to the customer relationships fair value include throughput and water handling volumes, estimated future service fees, capital expenditures, operating expenditures and a weighted-average cost of capital. The Company utilized a weighted average cost of capital for gathering and compression and water handling customer relationships of
(15) Investments in Unconsolidated Affiliates
The Company has a
The Company also has a
The Company’s net income includes its proportionate share of the net income of the Joint Venture and Stonewall. When the Company records its proportionate share of net income, it increases equity income in the unaudited condensed consolidated statements of operations and comprehensive income and the carrying value of that investment on its condensed consolidated balance sheet. When distributions on the Company’s proportionate share of net income are received, they are recorded as reductions to the carrying value of the investment on the unaudited condensed consolidated balance sheet and are classified as cash inflows from operating activities in accordance with the nature of the distribution approach under Financial Accounting Standards Board Accounting Standard Codification Topic 230, Statement of Cash Flows. The Company uses the equity method of accounting to account for its investments in the Joint Venture and Stonewall because it exercises significant influence, but not control, over the entities. The Company’s judgment regarding the level of influence over its equity investments includes considering key factors such as its ownership interest, representation on the applicable Board of Directors and participation in policy-making decisions of the Joint Venture and Stonewall.
24
ANTERO MIDSTREAM CORPORATION
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
The following table is a reconciliation of the Company’s investments in these unconsolidated affiliates:
Total Investment | ||||||||||
in Unconsolidated | ||||||||||
(in thousands) | | Joint Venture | | Stonewall | | Affiliates | ||||
Balance as of December 31, 2025 | $ | | | | ||||||
Additional investments | — | | | |||||||
Equity in earnings of unconsolidated affiliates (1) | | | | |||||||
Distributions from unconsolidated affiliates | ( | ( | ( | |||||||
Balance as of March 31, 2026 | $ | | | | ||||||
| (1) | As adjusted for the amortization of the difference between the cost of the equity investments in Stonewall and the Joint Venture and the amount of the underlying equity in the net assets of the Joint Venture and Stonewall as of March 12, 2019. |
(16) Contingencies
The Company is currently involved in a consolidated lawsuit with Veolia Water Technologies, Inc. (“Veolia”) relating to the Clearwater Facility.
On March 13, 2020, Antero Treatment LLC (“Antero Treatment”), a wholly owned subsidiary of the Company, filed suit against Veolia in the district court of Denver County, Colorado (the “Court”), asserting claims of fraud, breach of contract and other related claims. Antero Treatment alleges that Veolia failed to meet its contractual obligations to design and build a “turnkey” wastewater disposal facility under a Design/Build Agreement dated August 18, 2015 (the “DBA”), and that Veolia fraudulently concealed certain miscalculations and design flaws during contract negotiations and continued to conceal and fraudulently misrepresent the impact of certain design changes post-execution of the DBA. On March 13, 2020, Veolia filed a separate suit against the Company, Antero Resources, and certain of the Company’s wholly owned subsidiaries (collectively, the “Antero Defendants”) in Denver County, Colorado. In its lawsuit, Veolia asserted breach of contract and equitable claims against the Antero Defendants for alleged failures under the DBA. Veolia’s suit was consolidated into the action filed by Antero Treatment.
Veolia and the Antero Defendants each filed partial motions to dismiss and motions for summary judgment directed at certain claims asserted by the opposing party. A bench trial on the remaining claims was held from January 24 through February 10, 2022 and concluded on February 24, 2022. At trial, Antero Treatment sought damages from Veolia of $
On January 3, 2023, the Court found that Antero Treatment had prevailed on its claims for breach of contract and fraud, and awarded $
25
ANTERO MIDSTREAM CORPORATION
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
certiorari with respect to the December 19, 2024 decision by the Colorado Court of Appeals. Veolia and Antero Treatment have each submitted their principal merits briefs to the Colorado Supreme Court, and Veolia’s reply brief was submitted on March 5, 2026. Oral arguments have been scheduled for May 12, 2026.
(17) Reportable Segments
The Company’s operations, which are located in the United States, are organized into
The summarized operating results of the Company’s reportable segments are as follows:
Three Months Ended March 31, 2025 | |||||||||||||
Gathering and | Water | Consolidated | |||||||||||
(in thousands) | | Processing | | Handling | | Unallocated (1) | Total |
| |||||
Revenues: | |||||||||||||
Revenue–Antero Resources | $ | | | — | | ||||||||
Revenue–third-party | — | | — | | |||||||||
Amortization of customer relationships | ( | ( | — | ( | |||||||||
Total revenues | | | — | | |||||||||
Operating expenses: | |||||||||||||
Direct operating | | | — | | |||||||||
General and administrative (excluding equity-based compensation) | | | | | |||||||||
Equity-based compensation | | | | | |||||||||
Facility idling | — | | — | | |||||||||
Depreciation | | | — | | |||||||||
Impairment of property and equipment | — | | — | | |||||||||
Other (2) | — | | — | | |||||||||
Total operating expenses | | | | | |||||||||
Operating income | $ | | | ( | | ||||||||
Equity in earnings of unconsolidated affiliates | $ | | — | — | | ||||||||
Additions to property and equipment | $ | | | — | | ||||||||
| (1) | Certain expenses that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis. |
| (2) |
26
ANTERO MIDSTREAM CORPORATION
Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)
Three Months Ended March 31, 2026 | |||||||||||||
Gathering and | Water | Consolidated | |||||||||||
(in thousands) | | Processing | | Handling | | Unallocated (1) | Total |
| |||||
Revenues: | |||||||||||||
Revenue–Antero Resources | $ | | | — | | ||||||||
Revenue–third-party | | | — | | |||||||||
Amortization of customer relationships | ( | ( | — | ( | |||||||||
Total revenues | | | — | | |||||||||
Operating expenses: | |||||||||||||
Direct operating | | | — | | |||||||||
General and administrative (excluding equity-based compensation) | | | | | |||||||||
Equity-based compensation | | | | | |||||||||
Facility idling | — | | — | | |||||||||
Depreciation | | | — | | |||||||||
Loss (gain) on long-lived assets | ( | | — | ( | |||||||||
Other (2) | — | | — | | |||||||||
Total operating expenses | | | | | |||||||||
Operating income (loss) | $ | | ( | ( | | ||||||||
Equity in earnings of unconsolidated affiliates | $ | | — | — | | ||||||||
Additions to property and equipment | $ | | | — | | ||||||||
| (1) | Certain expenses that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis. |
| (2) |
The summarized assets of the Company’s reportable segments are as follows:
As of December 31, 2025 | |||||||||||||
Gathering and | Water | Consolidated | |||||||||||
(in thousands) | | Processing | | Handling | | Unallocated (1) | Total | ||||||
Investments in unconsolidated affiliates | $ | | — | — | | ||||||||
Total assets | | | | | |||||||||
| (1) | Certain assets that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis. |
(Unaudited) | |||||||||||||
As of March 31, 2026 | |||||||||||||
Gathering and | Water | Consolidated | |||||||||||
(in thousands) | | Processing | | Handling | | Unallocated (1) | Total | ||||||
Investments in unconsolidated affiliates | $ | | — | — | | ||||||||
Total assets | | | | | |||||||||
| (1) | Certain assets that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis. |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this report. The information provided below supplements, but does not form part of, our unaudited condensed consolidated financial statements. This discussion contains forward-looking statements that are based on the views and beliefs of our management, as well as assumptions and estimates made by our management. Actual results could differ materially from such forward-looking statements as a result of various risk factors, including those that may not be in the control of management. For further information on items that could impact our future operating performance or financial condition, see “Item 1A. Risk Factors” and the section entitled “Cautionary Statement Regarding Forward-Looking Statements.” We do not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law. In this section, references to “Antero Midstream,” “AM,” the “Company,” “we,” “us,” and “our” refer to Antero Midstream Corporation and its consolidated subsidiaries, unless otherwise indicated or the context otherwise requires.
Overview
We are a growth-oriented midstream energy company formed to own, operate and develop midstream energy assets. We believe that our strategically located assets and our relationship with Antero Resources have allowed us to become a leading midstream energy company serving the Appalachian Basin and present opportunities to expand our midstream services to other operators in the Appalachian Basin. Our assets consist of gathering pipelines, centralized compressor stations and interests in processing and fractionation plants that collect and process production from the Appalachian Basin in West Virginia and Ohio. Our assets also include an independent water handling system that delivers water from the Ohio River and several regional waterways. These water handling systems consist of permanent buried pipelines, surface pipelines and water storage facilities, as well as pumping stations, blending facilities and impoundments. Portions of these water handling systems are also utilized to transport flowback and produced water. These services are provided by us directly or through third-parties with which we contract.
Acquisition and Divestiture
HG Acquisition
On December 5, 2025, we entered into a definitive agreement to acquire 100% of the issued and outstanding equity interests of HG Midstream for cash consideration of $1.1 billion, subject to the terms and conditions thereof. The HG Acquisition included gathering pipelines and integrated water handling assets in the core of the Marcellus Shale in West Virginia. This acquisition closed on February 3, 2026. The Company’s condensed consolidated statement of operations for the three months ended March 31, 2026 included results of operations from the assets and operations acquired in the HG Acquisition from February 3, 2026 through March 31, 2026.
The HG Acquisition was funded with net proceeds of the 2034 Notes, borrowing under the Credit Facility and restricted cash. See Note 3—Transactions to our condensed consolidated financial statements for additional information. In light of the nature and location of the assets and operations acquired in the HG Acquisition, we and Antero Resources agreed in principle to certain updates to, and intend to modify, our existing commercial arrangements with Antero Resources to provide for on-pad compression with respect to certain wells and to provide certain water services. See Note 6—Revenue to our condensed consolidated financial statements for additional information.
Utica Shale Divestiture
On December 5, 2025, we entered into a purchase and sale agreement with the Buyer Parties to sell substantially all of our Utica Shale Property and Equipment in Ohio, for aggregate cash consideration of $400 million, subject to the terms and conditions thereof. The Utica Shale Property and Equipment included 118 miles of gathering pipelines, 0.7 Bcfe/d of compression capacity, 85 miles of water pipelines and 12 water impoundments with storage capacity of approximately 2 million barrels. The Utica Shale Divestiture closed on February 23, 2026. The net proceeds from the Utica Shale Divestiture were used for the repayment of long-term debt. See Note 3—Transactions to our condensed consolidated financial statements for additional information.
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Financing Highlights
Share Repurchase Program
Through our share repurchase program, during the three months ended March 31, 2026, we repurchased and retired approximately 1 million shares of our common stock for a total cost of $18 million. As of March 31, 2026, we have approximately $318 million of remaining capacity under our share repurchase program. The shares may be repurchased from time to time in open market transactions, through privately negotiated transactions or by other means in accordance with federal securities laws. The timing, as well as the number and value of shares repurchased under the program, will be determined by us at our discretion and will depend on a variety of factors, including the market price of our common stock, general market and economic conditions and applicable legal requirements. The exact number of shares to be repurchased by us is not guaranteed and the program may be suspended, modified or discontinued at any time without prior notice.
Market Conditions and Business Trends
Commodity Markets
Benchmark prices for natural gas increased significantly, while benchmark prices for oil remained relatively consistent and benchmark prices for C3+ NGLs and ethane decreased during the three months ended March 31, 2026 as compared to the same periods of 2025. While substantially all of our revenues are based on fixed-fee contracts that are not directly impacted by changes in commodity prices, commodity price changes do impact the revenues and cash flows of Antero Resources, and Antero Resources’ drilling and development plan does have a direct impact on our gathering, compression and water handling services, revenues and cash flows. In the current economic environment, we expect that commodity prices for some or all of the commodities produced by Antero Resources could remain volatile. However, due to Antero Resources’ increased scale, liquidity and leverage position as compared to historical levels together with Antero Resources’ increased commodity derivative portfolio, we do not expect to experience significant variability in our throughput volumes resulting from volatile commodity prices.
Economic Indicators
The economy experienced elevated inflation levels as a result of global supply and demand imbalances, where global demand outpaced supplies beginning in 2021 and continuing through 2026. During the second half of 2024, inflation rates began to approach the Federal Reserve’s stated goal of 2%, and the Federal Reserve decreased the federal funds rate by 1.75% in 2024 and 2025. Annual inflation rates have remained generally consistent at approximately 3% since 2023.
The economy also continues to be impacted by global events. These events have often caused global supply chain disruptions with additional pressure due to trade sanctions, tariffs, other global trade restrictions and conflicts, including those in the Middle East and Venezuela, among others. While neither our nor Antero Resources’ supply chain has experienced any significant interruptions due to such events, there can be no assurance that we will not experience interruptions in the future.
Inflationary pressures and supply chain disruptions could result in further increases to our operating and capital costs that are not fixed. However, our gathering and compression and water agreements provide for annual CPI-based adjustments that mitigate a portion of such inflationary pressures.
These economic variables are beyond our control and may adversely impact our business, financial condition, results of operations and future cash flows.
Results of Operations
We have two reportable segments: (i) gathering and processing and (ii) water handling. The gathering and processing segment includes a network of gathering pipelines and centralized compressor stations and on-pad compressors that collect and process production from Antero Resources’ wells in the Appalachian Basin, as well as equity in earnings from our investments in the Joint Venture and Stonewall. The Joint Venture and Stonewall provide processing and fractionation services and high-pressure gas gathering services, respectively, in the Appalachian Basin. The water handling segment includes (i) an independent system that delivers water from sources including the Ohio River, local reservoirs and several regional waterways, and (ii) other fluid handling services, which include high rate transfer, wastewater transportation, disposal and blending. See Note 17—Reportable Segments to our unaudited condensed consolidated financial statements for additional information.
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Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2026
The operating results of our reportable segments were as follows:
Three Months Ended March 31, 2025 | |||||||||||||
| Gathering and |
| Water |
|
| Consolidated | |||||||
(in thousands) | | Processing | | Handling | | Unallocated (1) | | Total | |||||
Revenues: | |||||||||||||
Revenue–Antero Resources | $ | 238,017 | 70,275 | — | 308,292 | ||||||||
Revenue–third-party | — | 505 | — | 505 | |||||||||
Amortization of customer relationships | (9,271) | (8,397) | — | (17,668) | |||||||||
Total revenues | 228,746 | 62,383 | — | 291,129 | |||||||||
Operating expenses: | |||||||||||||
Direct operating | 26,193 | 30,637 | — | 56,830 | |||||||||
General and administrative (excluding equity-based compensation) | 5,238 | 4,197 | 1,187 | 10,622 | |||||||||
Equity-based compensation | 7,883 | 4,245 | 274 | 12,402 | |||||||||
Facility idling | — | 443 | — | 443 | |||||||||
Depreciation | 19,031 | 13,717 | — | 32,748 | |||||||||
Impairment of property and equipment | — | 817 | — | 817 | |||||||||
Other operating expense, net | — | 44 | — | 44 | |||||||||
Total operating expenses | 58,345 | 54,100 | 1,461 | 113,906 | |||||||||
Operating income | 170,401 | 8,283 | (1,461) | 177,223 | |||||||||
Other income (expense): | |||||||||||||
Interest expense, net | — | — | (48,410) | (48,410) | |||||||||
Equity in earnings of unconsolidated affiliates | 28,020 | — | — | 28,020 | |||||||||
Total other income (expense) | 28,020 | — | (48,410) | (20,390) | |||||||||
Income before income taxes | 198,421 | 8,283 | (49,871) | 156,833 | |||||||||
Income tax expense | — | — | (36,096) | (36,096) | |||||||||
Net income and comprehensive income | $ | 198,421 | 8,283 | (85,967) | 120,737 | ||||||||
| (1) | Corporate expenses that are not directly attributable to either the gathering and processing or water handling segments. |
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Three Months Ended March 31, 2026 | |||||||||||||
Gathering and |
| Water |
|
| Consolidated | ||||||||
(in thousands) | | Processing | | Handling | | Unallocated (1) | | Total | |||||
Revenues: | |||||||||||||
Revenue–Antero Resources | $ | 261,999 | 72,816 | — | 334,815 | ||||||||
Revenue–third-party | 295 | 311 | — | 606 | |||||||||
Amortization of customer relationships | (12,384) | (8,826) | — | (21,210) | |||||||||
Total revenues | 249,910 | 64,301 | — | 314,211 | |||||||||
Operating expenses: | |||||||||||||
Direct operating | 30,030 | 40,667 | — | 70,697 | |||||||||
General and administrative (excluding equity-based compensation) | 7,226 | 3,281 | 1,261 | 11,768 | |||||||||
Equity-based compensation | 7,596 | 2,669 | 314 | 10,579 | |||||||||
Facility idling | — | 545 | — | 545 | |||||||||
Depreciation | 17,844 | 16,791 | — | 34,635 | |||||||||
Loss (gain) on long-lived assets | (3,229) | 571 | — | (2,658) | |||||||||
Other operating expense, net | — | 34 | — | 34 | |||||||||
Total operating expenses | 59,467 | 64,558 | 1,575 | 125,600 | |||||||||
Operating income (loss) | 190,443 | (257) | (1,575) | 188,611 | |||||||||
Other income (expense): | |||||||||||||
Interest expense, net | — | — | (54,029) | (54,029) | |||||||||
Equity in earnings of unconsolidated affiliates | 30,012 | — | — | 30,012 | |||||||||
Transaction expense | — | — | (8,689) | (8,689) | |||||||||
Total other income (expense) | 30,012 | — | (62,718) | (32,706) | |||||||||
Income (loss) before income taxes | 220,455 | (257) | (64,293) | 155,905 | |||||||||
Income tax expense | — | — | (37,639) | (37,639) | |||||||||
Net income (loss) and comprehensive income (loss) | $ | 220,455 | (257) | (101,932) | 118,266 | ||||||||
| (1) | Corporate expenses that are not directly attributable to either the gathering and processing or water handling segments. |
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The operating data for Antero Midstream is as follows:
Amount of | ||||||||||||||
Three Months Ended March 31, | Increase | Percentage | ||||||||||||
| 2025 | | 2026 | | or Decrease | | Change | |||||||
Operating Data: | ||||||||||||||
Gathering (MMcf) | 301,298 | 342,446 | 41,148 | 14 | % | |||||||||
Centralized compression (MMcf) | 299,718 | 303,328 | 3,610 | 1 | % | |||||||||
High pressure gathering (MMcf) | 279,579 | 281,950 | 2,371 | 1 | % | |||||||||
Fresh water delivery (MBbl)(1) | 9,415 | 7,506 | (1,909) | (20) | % | |||||||||
Other water handling (MBbl)(2) | 5,179 | 8,359 | 3,180 | 61 | % | |||||||||
Wells serviced by fresh water delivery | 28 | 26 | (2) | (7) | % | |||||||||
Gathering (MMcf/d) | 3,348 | 3,805 | 457 | 14 | % | |||||||||
Centralized compression (MMcf/d) | 3,330 | 3,370 | 40 | 1 | % | |||||||||
High pressure gathering (MMcf/d) | 3,106 | 3,133 | 27 | 1 | % | |||||||||
Fresh water delivery (MBbl/d)(1) | 105 | 83 | (22) | (21) | % | |||||||||
Other water handling (MBbl/d)(2) | 58 | 93 | 35 | 60 | % | |||||||||
Average Realized Fees(3): | ||||||||||||||
Gathering ($/Mcf) | $ | 0.36 | 0.37 | 0.01 | 3 | % | ||||||||
Centralized compression ($/Mcf) | $ | 0.22 | 0.22 | — | * | |||||||||
High pressure gathering ($/Mcf) | $ | 0.23 | 0.23 | — | * | |||||||||
Fresh water delivery ($/Bbl)(1) | $ | 4.38 | 4.44 | 0.06 | 1 | % | ||||||||
Joint Venture Operating Data: | ||||||||||||||
Processing (MMcf) | 148,523 | 153,722 | 5,199 | 4 | % | |||||||||
Fractionation (MBbl) | 3,600 | 3,600 | — | * | ||||||||||
Processing (MMcf/d) | 1,650 | 1,708 | 58 | 4 | % | |||||||||
Fractionation (MBbl/d) | 40 | 40 | — | * | ||||||||||
| * | Not meaningful or applicable. |
| (1) | Fresh water delivery includes fresh water charged at a fixed fee under our water services agreement with Antero Resources. |
| (2) | Other water handling includes fresh water charged at cost plus 3% for services provided to Antero Resources on its acreage acquired from HG Production and our other fluid handling services charged at cost plus 3% or cost of service. |
| (3) | The average realized fees for the three months ended March 31, 2026 include annual CPI-based adjustments of approximately 1.5%. |
Revenues. Total revenues increased by 8%, from $291 million for the three months ended March 31, 2025 to $314 million for the three months ended March 31, 2026. Total revenues included amortization of customer relationships of $18 million and $21 million for the three months ended March 31, 2025 and 2026, respectively. Gathering and processing revenues increased by 9%, from $229 million for the three months ended March 31, 2025 to $250 million for the three months ended March 31, 2026. Water handling revenues increased by 3%, from $62 million for the three months ended March 31, 2025 to $64 million for the three months ended March 31, 2026. These fluctuations primarily resulted from the following:
Gathering and Processing
| ● | Gathering revenue increased $17 million period over period primarily due to increased throughput volumes of 41 Bcf, or 457 MMcf/d, from the HG Acquisition and 72 wells that were connected to our system between periods, increased gathering rates as a result of annual CPI-based adjustments, partially offset by the Utica Shale Divestiture and natural production decline of the wells connected to our system between periods. |
| ● | Compression revenue increased $5 million period over period primarily due to on-pad compression cost plus 3% fees from the HG Acquisition of $4 million and increased centralized compression rates as a result of annual CPI-based adjustments, as well as increased throughput volumes to centralized compression of 4 Bcf, or 40 MMcf/d. Centralized compression volumes increased between periods primarily due to 72 wells that were connected to our system between periods, partially offset by the Utica Shale Divestiture and natural production decline of the wells connected to our system between periods. |
| ● | High pressure gathering revenue increased $2 million period over period primarily due to increased high pressure gathering rates as a result of annual CPI-based adjustments, as well as increased throughput volumes of 2 Bcf, or 27 MMcf/d, primarily due to 72 wells that were connected to our system between periods, partially offset by the Utica Shale Divestiture and natural production decline of the wells connected to our system between periods. |
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| ● | Amortization of customer relationships increased $3 million period over period due to a customer relationship intangible asset of approximately $555 million acquired in the HG Acquisition during the three months ended March 31, 2026. |
Water Handling
| ● | Fresh water delivery revenue decreased $8 million period over period primarily due to decreased fresh water delivery volumes of 2 MMBbl, or 22 MBbl/d, partially offset by an increase to the fresh water delivery rate as a result of the annual CPI-based adjustment. Water delivery volumes decreased between periods due to the timing of well completions by Antero Resources. |
| ● | Other water handling revenue increased $10 million period over period primarily due to higher other water handling volumes of 3 MMBbl, or 35 MBbl/d, as well as higher blending cost of service fees and increased costs for wastewater trucking and disposal volumes. Other water handling volumes increased between periods primarily due to 2 MMBbl of fresh water delivery volumes provided to Antero Resources on its acreage acquired from HG Production that are charged at cost plus 3% during the three months ended March 31, 2026. |
Direct operating expenses. Direct operating expenses increased by 24%, from $57 million for the three months ended March 31, 2025 to $71 million for the three months ended March 31, 2026. Gathering and processing direct operating expenses increased by 15% from $26 million for the three months ended March 31, 2025 to $30 million for the three months ended March 31, 2026 primarily due to increased gathering volumes between periods related to the HG Acquisition. Water handling direct operating expenses increased by 33%, from $31 million for the three months ended March 31, 2025 to $41 million for the three months ended March 31, 2026 primarily due to fresh water delivery volumes provided by Antero Resources on acreage it acquired from HG Production, increased wastewater trucking and disposal volumes between periods and increased blending costs between periods.
General and administrative (excluding equity-based compensation) expenses. General and administrative expenses (excluding equity-based compensation expense) remained relatively consistent at $11 million and $12 million for each of the three months ended March 31, 2025 and 2026, respectively.
Equity-based compensation expenses. Equity-based compensation expenses remained relatively consistent at $12 million and $11 million for the three months ended March 31, 2025 and 2026, respectively. Our equity-based awards vest over three or four year service periods. See Note 11—Equity-Based Compensation to the unaudited condensed consolidated financial statements for additional information.
Depreciation expense. Depreciation expense increased by 6%, from $33 million for the three months ended March 31, 2025 to $35 million for the three months ended March 31, 2026 primarily due to incremental depreciation expense of $3 million related to gathering and water pipelines acquired in the HG Acquisition and assets placed in service during the year, partially offset by lower depreciation as a result of the Utica Shale Divestiture between periods.
Loss (gain) on long-lived assets. There were no long-lived asset sales during the three months ended March 31, 2025. During the three months ended March 31, 2026, we recognized a gain on long-lived assets of $3 million related to the Utica Shale Divestiture. See Note 3—Transactions to our condensed consolidated financial statements for additional information.
Interest expense, net. Interest expense, net increased by 12%, from $48 million for the three months ended March 31, 2025 to $54 million for the three months ended March 31, 2026 primarily due to issuance of the 2033 Notes and 2034 Notes during the second half of 2025, partially offset by the redemption of the 2027 Notes, lower average daily Credit Facility borrowings and higher interest income on cash equivalents and restricted cash between periods. See Note 9—Long-Term Debt to our unaudited condensed consolidated financial statements for additional information.
Equity in earnings of unconsolidated affiliates. Equity in earnings of unconsolidated affiliates increased by 7%, from $28 million for the three months ended March 31, 2025 to $30 million for the three months ended March 31, 2026 primarily due to increased processing volumes and higher processing and fractionation fees as a result of annual CPI-based adjustments between periods.
Transaction expense. During the three months ended March 31, 2026, we incurred $9 million of transaction expense related to the HG Acquisition. There were no transaction expenses during the three months ended March 31, 2025. See Note 3—Transactions to our unaudited condensed consolidated financial statements for additional information.
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Income tax expense. Income tax expense increased by 4%, from $36 million for the three months ended March 31, 2025 to $38 million for the three months ended March 31, 2026, which reflects effective tax rates of approximately 23% and 24%, respectively. This income tax increase was primarily due to the effects of equity-based compensation expense between periods.
Capital Resources and Liquidity
Sources and Uses of Cash
Capital resources and liquidity are provided by operating cash flows, available borrowings under our Credit Facility and capital market transactions. See Note 9—Long-Term Debt to the unaudited condensed consolidated financial statements. We expect that the combination of these capital resources will be adequate to meet our working capital requirements, capital expenditures program and expected quarterly cash dividends for at least the next 12 months.
Our Board declared a cash dividend on the shares of our common stock of $0.225 per share for the quarter ended March 31, 2026. The dividend is payable on May 13, 2026 to stockholders of record as of April 29, 2026. Our Board also declared a cash dividend of $137,500 on the shares of Series A Preferred Stock that is payable on May 15, 2026 in accordance with their terms as discussed in Note 13—Equity and Net Income Per Common Share. As of March 31, 2026, there were dividends in the amount of $68,750 accumulated in arrears on our Series A Preferred Stock.
We expect our future cash requirements relating to working capital, capital expenditures, acquisitions and quarterly cash dividends to our stockholders will be funded from cash flows internally generated from our operations or borrowings under the Credit Facility.
As of March 31, 2026, we did not have any off-balance sheet arrangements.
Cash Flows
The following table summarizes our cash flows for the three months ended March 31, 2025 and 2026:
Three Months Ended March 31, | |||||||
(in thousands) | | 2025 | | 2026 | |||
Net cash provided by operating activities | $ | 198,942 | 238,624 | ||||
Net cash used in investing activities | (32,271) | (780,771) | |||||
Net cash provided by (used in) financing activities | (166,671) | 279,212 | |||||
Net decrease in cash, cash equivalents and restricted cash | $ | — | (262,935) | ||||
Operating activities. Net cash provided by operating activities was $199 million and $239 million for the three months ended March 31, 2025 and 2026, respectively. This increase in cash flows provided by operating activities between periods was primarily the result of lower cash used for working capital, increased gathering and processing and water handling revenues during the three months ended March 31, 2026, partially offset by increased gathering and processing and water handling direct operating expenses between periods.
Investing activities. Net cash flows used in investing activities was $32 million and $781 million for the three months ended March 31, 2025 and 2026, respectively. The increase in cash flows used in investing activities between periods was primarily due to cash paid for the HG Acquisition of $1.1 billion during the three months ended March 31, 2026, as well as increased capital spending for water handling systems of $10 million, partially offset by proceeds from the Utica Shale Divestiture of $379 million during the three months ended March 31, 2026.
Financing activities. Net cash used in financing activities was $167 million for the three months ended March 31, 2025 and net cash provided by financing activities was $279 million for the three months ended March 31, 2026, respectively. The increase in cash flows provided by financing activities between periods was primarily due to the increase in net borrowings on our Credit Facility of $449 million and lower share repurchases of $11 million between periods, partially offset by higher payments for employee tax withholding for settlement of equity-based compensation awards of $14 million.
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2026 Capital Investment
On February 11, 2026, we announced our 2026 capital budget with a range of $190 million to $220 million. This capital budget supports Antero Resources’ capital program for 2026. Our capital budget may be adjusted as business conditions warrant. Additionally, we monitor our existing assets and look for opportunities to reuse or otherwise repurpose assets in an effort to optimize our capital efficiency.
Our capital expenditures were as follows:
Three Months Ended March 31, | |||||||
(in thousands) |
| 2025 | 2026 | ||||
Gathering systems and facilities | $ | 23,753 | 26,102 | ||||
Water handling systems | 11,787 | 14,950 | |||||
Investments in unconsolidated affiliates | 1,748 | 900 | |||||
Total capital expenditures | $ | 37,288 | 41,952 | ||||
Debt Agreements
See Note 9—Long-Term Debt to the unaudited condensed consolidated financial statements and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2025 Form 10-K for additional information.
Critical Accounting Estimates
The discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with GAAP. Any new accounting policies or updates to existing accounting policies as a result of recently adopted accounting standards have been included in Note 2—Summary of Significant Accounting Policies to our unaudited condensed consolidated financial statements. The preparation of our unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent liabilities. Accounting estimates and assumptions are considered to be critical if there is reasonable likelihood that materially different amounts could have been reported under different conditions, or if different assumptions had been used. We evaluate our estimates and assumptions on a regular basis. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the reported amounts in our unaudited condensed consolidated financial statements that are not readily apparent from other sources. Actual results may differ from these estimates and assumptions used in preparation of our unaudited condensed consolidated financial statements. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the 2025 Form 10-K for additional information.
Business Combinations
We recognize and measure the assets acquired and liabilities assumed in a business combination based on their estimated fair values at the acquisition date, with any remaining difference recorded as goodwill. For acquisitions, management engages an independent valuation specialist to assist with the determination of fair value of the assets acquired, liabilities assumed, and goodwill, based on recognized valuation methodologies, including but not limited to cost and income approaches as circumstances warrant. If the initial accounting for the business combination is incomplete by the end of the reporting period in which the acquisition occurs, an estimate will be recorded. Subsequent to the acquisition, and not later than one year from the acquisition date, we will record any material adjustments to the initial estimate based on new information obtained that would have existed as of the acquisition date. An adjustment that arises from information obtained that did not exist as of the date of the acquisition will be recorded in the period of the adjustment.
The valuation of the assets acquired and liabilities assumed in a business combination requires significant judgment about future events, economic and functional obsolescence, capacity and useful lives, among others, and such fair value approaches may rely on significant inputs that are not observable in the market. These assumptions affect the fair value of assets acquired and liabilities assumed and, if changed, could have a material effect on the Company’s financial position or results of operations. See Note 3—Transactions and Note 14—Fair Value Measurement to our condensed consolidated financial statements for additional information.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The primary objective of the following information is to provide forward-looking quantitative and qualitative information about our potential exposure to market risk. The term “market risk” refers to the risk of loss arising from adverse changes in commodity prices and interest rates. The disclosures are not meant to be precise indicators of expected future losses, but rather indicators of reasonably possible losses. This forward-looking information provides indicators of how we view and manage our ongoing market risk exposures.
Commodity Price Risk
Our gathering and compression and water services agreements with Antero Resources provide for fixed-fee and cost of service fee structures, and we intend to continue to pursue additional fixed-fee or cost of service fee opportunities with Antero Resources and third parties in order to avoid direct commodity price exposure. However, to the extent that our future contractual arrangements with Antero Resources or third parties do not provide for fixed-fee or cost of service fee structures, we may become subject to commodity price risk. We are subject to commodity price risks to the extent that they impact Antero Resources’ development program and production and therefore our gathering, compression, and water handling volumes. We cannot predict to what extent our business would be impacted by lower commodity prices and any resulting impact on Antero Resources’ operations.
Interest Rate Risk
Our primary exposure to interest rate risk results from outstanding borrowings under the Credit Facility, which has a floating interest rate. We do not currently, but may in the future, hedge the interest on portions of our borrowings under the Credit Facility from time-to-time in order to manage risks associated with floating interest rates. As of March 31, 2026, we had $442 million of borrowings and no letters of credit outstanding under the Credit Facility. A 1.0% increase in the Credit Facility interest rate would have resulted in an estimated $1 million increase in interest expense for the three months ended March 31, 2026.
Credit Risk
We are dependent on Antero Resources as our primary customer, and we expect to derive substantially all of our revenues from Antero Resources for the foreseeable future. As a result, any event, whether in our area of operations or otherwise, that adversely affects Antero Resources’ production, drilling schedule, financial condition, leverage, market reputation, liquidity, results of operations or cash flows may adversely affect our revenues and operating results.
Further, we are subject to the risk of non-payment or non-performance by Antero Resources, including with respect to our gathering and compression and water handling services agreements. We cannot predict the extent to which Antero Resources’ business would be impacted if conditions in the energy industry were to deteriorate, nor can we estimate the impact such conditions would have on Antero Resources’ ability to execute its drilling and development program or to perform under our agreements. Any material non-payment or non-performance by Antero Resources could adversely affect our revenues and operating results and our ability to return capital to stockholders.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15(b) under the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of March 31, 2026 at a reasonable assurance level.
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Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
Our operations are subject to a variety of risks and disputes normally incident to our business. As a result, we may, at any given time, be a defendant in various legal proceedings and litigation arising in the ordinary course of business.
We maintain insurance policies with insurers in amounts and with coverage and deductibles that we, with the advice of our insurance advisors and brokers, believe are reasonable and prudent. We cannot, however, assure you that this insurance will be adequate to protect us from all material expenses related to potential future claims for personal and property damage or that these levels of insurance will be available in the future at economical prices.
See Note 16—Contingencies to the unaudited condensed consolidated financial statements for additional information.
Item 1A. Risk Factors.
We are subject to certain risks and hazards due to the nature of the business activities we conduct. For a discussion of these risks, see “Item 1A. Risk Factors” in the 2025 Form 10-K. There have been no material changes to the risks described in such report. We may experience additional risks and uncertainties not currently known to us. Furthermore, as a result of developments occurring in the future, conditions that we currently deem to be immaterial may also materially and adversely affect us.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Issuer Purchases of Equity Securities
The following table sets forth our common stock share purchase activity for each period presented:
Approximate | |||||||||||
Dollar Value of | |||||||||||
Total Number of | Shares that May | ||||||||||
Total Number | Average Price | Shares Purchased | Yet be Purchased | ||||||||
| of Shares | Paid per | as Part of Publicly | Under the Plan |
| ||||||
Period |
| Purchased(1) | Share | Announced Plans | ($ in thousands)(2) |
| |||||
January 1, 2026 – January 31, 2026 | 870,800 | $ | 17.88 | 867,194 | $ | 320,820 | |||||
February 1, 2026 – February 28, 2026 | 587,090 | 21.32 | 134,349 | 318,315 | |||||||
March 1, 2026 – March 31, 2026 | 977,683 | 22.97 | — | 318,315 | |||||||
Total | 2,435,573 | $ | 20.75 | 1,001,543 | |||||||
| (1) | The total number of shares purchased includes shares of our common stock transferred to us in order to satisfy tax withholding obligations incurred upon the vesting of equity-based awards held by our employees. |
| (2) | In February 2024, the Board authorized a $500 million share repurchase program. |
Not applicable.
Item
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Item 6. Exhibits
Exhibit Number | Description of Exhibit | |
3.1 | ||
3.2 | ||
3.3 | ||
3.4 | ||
3.5 | ||
31.1 | * | |
31.2 | * | |
32.1 | * | |
32.2 | * | |
101 | * | The following financial information from this Quarterly Report on Form 10-Q of Antero Midstream Corporation for the quarter ended March 31, 2026, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations and Comprehensive Income, (iii) Condensed Consolidated Statements of Stockholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows and (v) Notes to the Unaudited Condensed Consolidated Financial Statements, tagged as blocks of text. |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
The exhibits marked with the asterisk symbol (*) are filed or furnished with this Quarterly Report on Form 10-Q.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
ANTERO MIDSTREAM CORPORATION | |
By: | /s/ Justin J. Agnew |
Justin J. Agnew | |
Chief Financial Officer and Vice President—Finance | |
Date: | April 29, 2026 |
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