Antero Midstream Corp 10-Q for FY2022 Q1

Antero Midstream Corp (AM)

10-Q 2022-04-27 For: 2022-03-31

Added on April 08, 2026

About this 10-Q

Antero Midstream Corp filed this 10-Q on April 27, 2022, covering the quarter ended March 31, 2022 (FY2022 Q1).

Headline figures

Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $218.49M; down 2.5% from $224.12M a year earlier
Net income: $80.04M; down 4.1% from net income of $83.44M a year earlier
Diluted EPS: $0.17; unchanged from $0.17 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


Delaware		61-1748605
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

1615 Wynkoop Street Denver, Colorado		80202
(Address of principal executive offices)		(Zip Code)



Securities registered pursuant to section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01	AM	New York Stock Exchange


Large Accelerated Filer ⌧		Accelerated Filer ◻

Non-accelerated Filer ◻		Smaller Reporting Company ☐
Emerging Growth Company ☐


		Page
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS		1
PART I—FINANCIAL INFORMATION		3
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	31
Item 4.	Controls and Procedures	32
PART II—OTHER INFORMATION		33
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 6.	Exhibits	35
SIGNATURES		36


			(Unaudited)
	December 31,		March 31,
	2021		2022
Assets
Current assets:
Accounts receivable–Antero Resources	$	81,197		78,143
Accounts receivable–third party		747		328
Income tax receivable		940		940
Other current assets		920		879
Total current assets		83,804		80,290

Property and equipment, net		3,394,746		3,461,098
Investments in unconsolidated affiliates		696,009		688,111
Customer relationships		1,356,775		1,339,107
Other assets, net		12,667		11,988
Total assets	$	5,544,001		5,580,594

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable–Antero Resources	$	4,956		4,884
Accounts payable–third party		23,592		33,087
Accrued liabilities		80,838		97,022
Other current liabilities		4,623		4,136
Total current liabilities		114,009		139,129
Long-term liabilities:
Long-term debt		3,122,910		3,133,184
Deferred income tax liability		13,721		41,788
Other		6,663		6,539
Total liabilities		3,257,303		3,320,640

Stockholders' Equity:
Preferred stock, $0.01 par value: 100,000 authorized as of December 31, 2021 and March 31, 2022
Series A non-voting perpetual preferred stock; 12 designated and 10 issued and outstanding as of December 31, 2021 and March 31, 2022		—		—
Common stock, $0.01 par value; 2,000,000 authorized; 477,495 and 477,683 issued and outstanding as of December 31, 2021 and March 31, 2022, respectively		4,775		4,777
Additional paid-in capital		2,414,398		2,307,612
Accumulated deficit		(132,475)		(52,435)
Total stockholders' equity		2,286,698		2,259,954
Total liabilities and stockholders' equity	$	5,544,001		5,580,594


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Three Months Ended March 31,
	2021		2022
Revenue:
Gathering and compression–Antero Resources	$	185,161		182,443
Water handling–Antero Resources		56,603		53,321
Water handling–third party		25		395
Amortization of customer relationships		(17,668)		(17,668)
Total revenue		224,121		218,491
Operating expenses:
Direct operating		39,314		42,012
General and administrative (including $4,012 and $2,832 of equity-based compensation in 2021 and 2022, respectively)		17,930		17,931
Facility idling		1,179		1,148
Depreciation		26,850		28,300
Impairment of property and equipment		1,379		—
Accretion of asset retirement obligations		119		64
Loss (gain) on asset sale		3,763		(118)
Total operating expenses		90,534		89,337
Operating income		133,587		129,154
Other income (expense):
Interest expense, net		(42,866)		(44,279)
Equity in earnings of unconsolidated affiliates		20,744		23,232
Total other expense		(22,122)		(21,047)
Income before income taxes		111,465		108,107
Income tax expense		(28,024)		(28,067)
Net income and comprehensive income	$	83,441		80,040

Net income per share–basic	$	0.17		0.17
Net income per share–diluted	$	0.17		0.17

Weighted average common shares outstanding:
Basic		476,850		477,646
Diluted		479,272		480,173


							Additional
	Preferred		Common Stock				Paid-In		Accumulated		Total
	Stock		Shares		Amount		Capital		Deficit		Equity
Balance at December 31, 2020	$	—		476,639	$	4,766		2,877,612		(464,092)		2,418,286
Dividends to stockholders		—		—		—		(147,332)		—		(147,332)
Equity-based compensation		—		—		—		4,012		—		4,012
Issuance of common stock upon vesting of equity-based compensation awards, net of common stock withheld for income taxes		—		268		3		(1,544)		—		(1,541)
Net income and comprehensive income		—		—		—		—		83,441		83,441
Balance at March 31, 2021	$	—		476,907	$	4,769		2,732,748		(380,651)		2,356,866

Balance at December 31, 2021	$	—		477,495	$	4,775		2,414,398		(132,475)		2,286,698
Dividends to stockholders		—		—		—		(108,287)		—		(108,287)
Equity-based compensation		—		—		—		2,832		—		2,832
Issuance of common stock upon vesting of equity-based compensation awards, net of common stock withheld for income taxes		—		188		2		(1,331)		—		(1,329)
Net income and comprehensive income		—		—		—		—		80,040		80,040
Balance at March 31, 2022	$	—		477,683	$	4,777		2,307,612		(52,435)		2,259,954


Customer relationships as of December 31, 2021	$	1,356,775
Amortization of customer relationships		(17,668)
Customer relationships as of March 31, 2022	$	1,339,107


Remainder of year ending December 31, 2022	$	53,004
Year ending December 31, 2023		70,672
Year ending December 31, 2024		70,672
Year ending December 31, 2025		70,672
Year ending December 31, 2026		70,672
Thereafter		1,003,415
Total	$	1,339,107


Remainder of year ending December 31, 2022	$	194,146
Year ending December 31, 2023		281,779
Year ending December 31, 2024		282,551
Year ending December 31, 2025		268,299
Year ending December 31, 2026		254,886
Thereafter		472,024
Total	$	1,753,685


	Three Months Ended March 31,
(in thousands)	2021		2022		Reportable Segment
Type of service
Gathering—low pressure	$	86,306		89,437	Gathering and Processing ⁽¹⁾
Gathering—low pressure rebate		—		(12,000)	Gathering and Processing ⁽¹⁾
Compression		48,137		51,612	Gathering and Processing ⁽¹⁾
Gathering—high pressure		50,718		53,394	Gathering and Processing ⁽¹⁾
Fresh water delivery		37,358		32,044	Water Handling
Other fluid handling		19,270		21,672	Water Handling
Amortization of customer relationships		(9,271)		(9,271)	Gathering and Processing
Amortization of customer relationships		(8,397)		(8,397)	Water Handling
Total	$	224,121		218,491

Type of contract
Per Unit Fixed Fee	$	185,161		194,443	Gathering and Processing ⁽¹⁾
Gathering—low pressure rebate		—		(12,000)	Gathering and Processing ⁽¹⁾
Per Unit Fixed Fee		37,358		32,439	Water Handling
Cost plus 3%		15,350		15,638	Water Handling
Cost of service fee		3,920		5,639	Water Handling
Amortization of customer relationships		(9,271)		(9,271)	Gathering and Processing
Amortization of customer relationships		(8,397)		(8,397)	Water Handling
Total	$	224,121		218,491


				(Unaudited)
	Estimated	December 31,		March 31,
(in thousands)	Useful Lives	2021		2022
Land	n/a	$	23,369		26,682
Gathering systems and facilities	40-50 years ⁽¹⁾		2,817,918		2,847,444
Permanent buried pipelines and equipment	7-20 years		582,481		584,702
Surface pipelines and equipment	1-7 years		54,542		59,681
Heavy trucks and equipment	3-5 years		5,157		5,157
Above ground storage tanks	5-10 years		2,946		2,953
Construction-in-progress	n/a		174,271		228,717
Total property and equipment			3,660,684		3,755,336
Less accumulated depreciation			(265,938)		(294,238)
Property and equipment, net		$	3,394,746		3,461,098


		Weighted Average
	Number	Grant Date
	of Units	Fair Value
Total AM LTIP RSUs awarded and unvested—December 31, 2021	3,573,377	$	8.11
Granted	—		—
Vested	(297,353)		7.43
Forfeited	—		—
Total AM LTIP RSUs awarded and unvested—March 31, 2022	3,276,024	$	8.18


	Three Months Ended March 31,
	2021		2022
Cash flows provided by (used in) operating activities:
Net income	$	83,441		80,040
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		26,850		28,300
Accretion		119		64
Impairment		1,379		—
Deferred income tax expense		28,024		28,067
Equity-based compensation		4,012		2,832
Equity in earnings of unconsolidated affiliates		(20,744)		(23,232)
Distributions from unconsolidated affiliates		31,910		31,130
Amortization of customer relationships		17,668		17,668
Amortization of deferred financing costs		1,388		1,410
Settlement of asset retirement obligations		(408)		(455)
Loss (gain) on asset sale		3,763		(118)

Changes in assets and liabilities:
Accounts receivable–Antero Resources		(15,051)		3,054
Accounts receivable–third party		808		460
Income tax receivable		16,311		—
Other current assets		593		118
Accounts payable–Antero Resources		(935)		230
Accounts payable–third party		4,786		13,762
Accrued liabilities		(18,213)		1,334
Net cash provided by operating activities		165,701		184,664
Cash flows provided by (used in) investing activities:
Additions to gathering systems and facilities		(15,059)		(70,734)
Additions to water handling systems		(13,330)		(13,533)
Investments in unconsolidated affiliates		(757)		—
Cash received in asset sale		1,493		121
Net cash used in investing activities		(27,653)		(84,146)
Cash flows provided by (used in) financing activities:
Dividends to stockholders		(147,194)		(108,149)
Dividends to preferred stockholders		(138)		(138)
Payments of deferred financing costs		(543)		(302)
Borrowings on bank credit facilities, net		11,000		9,400
Employee tax withholding for settlement of equity compensation awards		(1,541)		(1,329)
Other		(11)		—


					Dividends
Period	Record Date	Dividend Date	Dividends		per Share
Q4 2020	February 3, 2021	February 11, 2021	$	147,194	$	0.3075
*	February 16, 2021	February 16, 2021		138		*
Q1 2021	April 28, 2021	May 12, 2021		108,799		0.2250
*	May 17, 2021	May 17, 2021		137		*
Q2 2021	July 28, 2021	August 11, 2021		107,719		0.2250
*	August 16, 2021	August 16, 2021		138		*
Q3 2021	October 27, 2021	November 10, 2021		107,459		0.2250
*	November 15, 2021	November 15, 2021		137		*
	Total 2021		$	471,721

Q4 2021	January 26, 2022	February 9, 2022	$	108,149	$	0.2250
*	February 14, 2022	February 14, 2022		138		*
	Total 2022		$	108,287


	Three Months Ended March 31,
(in thousands, except per share amounts)	2021		2022
Net income	$	83,441		80,040
Less preferred stock dividends		(138)		(138)
Net income available to common shareholders	$	83,303		79,902

Net income per share–basic	$	0.17		0.17
Net income per share–diluted	$	0.17		0.17

Weighted average common shares outstanding–basic		476,850		477,646
Weighted average common shares outstanding–diluted		479,272		480,173


					(Unaudited)
	December 31, 2021				March 31, 2022
(in thousands)	Fair Value ⁽¹⁾		Carrying Value ⁽²⁾		Fair Value ⁽¹⁾		Carrying Value ⁽²⁾
2026 Notes	$	604,450		544,294		593,945		544,568
2027 Notes		672,750		645,970		660,530		646,125
2028 Notes		680,225		643,902		662,155		644,117
2029 Notes		783,750		741,544		746,250		741,774
Total	$	2,741,175		2,575,710		2,662,880		2,576,584


					Total Investment
			MarkWest		in Unconsolidated
(in thousands)	Stonewall			Joint Venture	Affiliates
Balance as of December 31, 2021	$	130,572		565,437		696,009
Equity in earnings of unconsolidated affiliates ⁽¹⁾		1,311		21,921		23,232
Distributions from unconsolidated affiliates		(3,000)		(28,130)		(31,130)
Balance as of March 31, 2022	$	128,883		559,228		688,111


	Three Months Ended March 31, 2021
	Gathering and		Water				Consolidated
(in thousands)	Processing		Handling		Unallocated ⁽¹⁾		Total
Revenues:
Revenue–Antero Resources	$	185,161		56,603		—		241,764
Revenue–third-party		—		25		—		25
Amortization of customer relationships		(9,271)		(8,397)		—		(17,668)
Total revenues		175,890		48,231		—		224,121
Operating expenses:
Direct operating		17,236		22,078		—		39,314
General and administrative		8,649		7,680		1,601		17,930
Facility idling		—		1,179		—		1,179
Depreciation		14,713		12,137		—		26,850
Impairment of property and equipment		1,218		161		—		1,379
Accretion of asset retirement obligations		—		119		—		119
Loss on asset sale		3,763		—		—		3,763
Total operating expenses		45,579		43,354		1,601		90,534
Operating income	$	130,311		4,877		(1,601)		133,587

Equity in earnings of unconsolidated affiliates	$	20,744		—		—		20,744
Additions to property and equipment	$	15,059		13,330		—		28,389


	Three Months Ended March 31, 2022
	Gathering and		Water				Consolidated
(in thousands)	Processing		Handling		Unallocated ⁽¹⁾		Total
Revenues:
Revenue–Antero Resources	$	182,443		53,321		—		235,764
Revenue–third-party		—		395		—		395
Amortization of customer relationships		(9,271)		(8,397)		—		(17,668)
Total revenues		173,172		45,319		—		218,491
Operating expenses:
Direct operating		17,182		24,830		—		42,012
General and administrative		9,701		6,741		1,489		17,931
Facility idling		—		1,148		—		1,148
Depreciation		15,807		12,493		—		28,300
Accretion of asset retirement obligations		—		64		—		64
Gain on asset sale		(31)		(87)		—		(118)
Total operating expenses		42,659		45,189		1,489		89,337
Operating income	$	130,513		130		(1,489)		129,154

Equity in earnings of unconsolidated affiliates	$	23,232		—		—		23,232
Additions to property and equipment, net	$	70,734		13,533		—		84,267


	Low Pressure Gathering	Quarterly Fee
	Volume Growth Incentive	Reduction
	Targets (MMcf/d)	(in millions)
Threshold 1	>2,900 and <3,150	$12.0
Threshold 2	>3,150 and <3,400	$15.5
Threshold 3	>3,400	$19.0


	Three Months Ended				Amount of
	March 31,				Increase		Percentage
	2021		2022		or Decrease		Change
Operating Data:
Gathering—low pressure (MMcf)		256,802		263,727		6,925		3	%
Compression (MMcf)		243,562		253,474		9,912		4	%
Gathering—high pressure (MMcf)		253,091		259,042		5,951		2	%
Fresh water delivery (MBbl)		9,400		7,874		(1,526)		(16)	%
Other fluid handling (MBbl)		3,951		4,203		252		6	%
Wells serviced by fresh water delivery		24		21		(3)		(13)	%
Gathering—low pressure (MMcf/d)		2,853		2,930		77		3	%
Compression (MMcf/d)		2,706		2,816		110		4	%
Gathering—high pressure (MMcf/d)		2,812		2,878		66		2	%
Fresh water delivery (MBbl/d)		104		87		(17)		(16)	%
Other fluid handling (MBbl/d)		44		47		3		7	%
Average Realized Fees:
Average gathering—low pressure fee ($/Mcf)	$	0.33		0.34		0.01		3	%
Average compression fee ($/Mcf)	$	0.20		0.21		0.01		3	%
Average gathering—high pressure fee ($/Mcf)	$	0.20		0.21		0.01		3	%
Average fresh water delivery fee ($/Bbl)	$	3.97		4.07		0.10		3	%
Joint Venture Operating Data:
Processing—Joint Venture (MMcf)		128,538		136,242		7,704		6	%
Fractionation—Joint Venture (MBbl)		3,431		3,077		(354)		(10)	%
Processing—Joint Venture (MMcf/d)		1,428		1,514		86		6	%
Fractionation—Joint Venture (MBbl/d)		38		34		(4)		(11)	%


					Approximate
				Total Number of	Dollar Value of
	Total Number	Average Price		Shares Purchased	Shares that May
	of Shares	Paid per		as Part of Publicly	Yet be Purchased
Period	Purchased ⁽¹⁾	Share		Announced Plans ⁽²⁾	Under the Plan
January 1, 2022 – January 31, 2022	132,041	$	10.07	—	$	149,767,409
February 1, 2022 – February 28, 2022	—		—	—		N/A
March 1, 2022 – March 31, 2022	—		—	—		N/A
Total	132,041	$	10.07	—	$	149,767,409


Exhibit Number		Description of Exhibit
3.1		Certificate of Conversion of Antero Midstream Corporation, dated March 12, 2019 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (Commission File No. 001-38075) filed on March 12, 2019).
3.2		Certificate of Incorporation of Antero Midstream Corporation, dated March 12, 2019 (incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K (Commission File No. 001-38075) filed on March 12, 2019).
3.3		Bylaws of Antero Midstream Corporation, dated March 12, 2019 (incorporated by reference to Exhibit 3.4 to the Company’s Current Report on Form 8-K (Commission File No. 001-38075) filed on March 12, 2019).
3.4		Certificate of Designations of Antero Midstream Corporation, dated March 12, 2019 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (Commission File No. 001-38075) filed on March 12, 2019).
31.1	*	Certification of the Company’s Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 7241).
31.2	*	Certification of the Company’s Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 7241).
32.1	*	Certification of the Company’s Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).
32.2	*	Certification of the Company’s Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).
101	*	The following financial information from this Quarterly Report on Form 10-Q of Antero Midstream Corporation for the quarter ended March 31, 2022, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), (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).



ANTERO MIDSTREAM CORPORATION

By:	/s/ Brendan E. Krueger
	BRENDAN E. KRUEGER
	Chief Financial Officer, Treasurer and Vice President of Finance

Date:	April 27, 2022


Date: April 27, 2022

/s/ Paul M. Rady
Paul M. Rady
President and Chief Executive Officer