Antero Midstream (US:AM)2025-07-30 20:16PART I—FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (Unaudited) Presents Antero Midstream's unaudited condensed consolidated financial statements, including balance sheets, income statements, cash flows, and detailed notes Condensed Consolidated Balance Sheets Total assets slightly decreased to $5.73 billion as of June 30, 2025, with stable liabilities and a slight decrease in equity Condensed Consolidated Balance Sheet Highlights (Unaudited) | (In thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $114,477 | $118,064 | | Property and equipment, net | $3,892,547 | $3,881,621 | | Total assets | $5,727,002 | $5,761,748 | | Total current liabilities | $111,168 | $100,612 | | Long-term debt | $3,023,800 | $3,116,958 | | Total liabilities | $3,639,613 | $3,646,577 | | Total stockholders' equity | $2,087,389 | $2,115,171 | Condensed Consolidated Statements of Operations and Comprehensive Income Net income significantly increased to $124.5 million in Q2 2025 and $245.3 million year-to-date, driving diluted EPS growth Q2 Performance Comparison (Unaudited) | (In thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total revenue | $305,472 | $269,795 | | Operating income | $186,444 | $152,753 | | Net income | $124,513 | $86,037 | | Net income per share–diluted | $0.26 | $0.18 | Year-to-Date Performance Comparison (Unaudited) | (In thousands, except per share) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total revenue | $596,601 | $548,846 | | Operating income | $363,667 | $319,004 | | Net income | $245,250 | $189,963 | | Net income per share–diluted | $0.51 | $0.39 | Condensed Consolidated Statements of Cash Flows Net cash from operating activities increased to $464.1 million, while cash used in investing decreased and financing increased due to repurchases Cash Flow Summary (Unaudited) | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $464,125 | $426,367 | | Net cash used in investing activities | ($72,334) | ($148,422) | | Net cash used in financing activities | ($391,791) | ($278,011) | Notes to Unaudited Condensed Consolidated Financial Statements Provides detailed explanations of accounting policies, revenue recognition, debt, segment performance, and the Veolia legal contingency - Substantially all revenues are earned from Antero Resources under long-term agreements for gathering, compression, and water handling services, with gathering and compression revenues treated as operating leases3841 - On May 1, 2024, the Company acquired Marcellus gas gathering and compression assets from Summit for $70 million in cash60 - During Q1 and Q2 2024, the company fully redeemed its 7.875% senior notes due 2026, recognizing a loss on early debt extinguishment of $14 million72 - In a lawsuit against Veolia Water Technologies, a court awarded Antero Treatment $242 million in damages plus interest and fees, finding Veolia breached its contract and committed fraud, with the judgment amended to $280 million including pre-judgment interest, and Veolia's appeal is pending105106 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses performance, revenue growth from throughput and CPI adjustments, market conditions, capital expenditures, and liquidity, including share repurchases - During the first six months of 2025, the company repurchased approximately 3 million shares for $45 million, with $426 million remaining under its share repurchase program121 - The company's revised 2025 capital budget is set at $170 million to $190 million to support Antero Resources' maintenance capital program169 Year-over-Year Revenue and Net Income Comparison | (In millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $597 | $549 | +9% | | Net Income | $245 | $190 | +29% | Results of Operations Details operating results for Q2 and six-month periods, showing revenue growth driven by increased throughput volumes and CPI-based fee adjustments Q2 2025 vs Q2 2024 Throughput Volume Changes | Operating Data | Q2 2025 (Avg Daily) | Q2 2024 (Avg Daily) | % Change | | :--- | :--- | :--- | :--- | | Low pressure gathering (MMcf/d) | 3,460 | 3,258 | +6% | | High pressure gathering (MMcf/d) | 3,221 | 2,994 | +8% | | Fresh water delivery (MBbl/d) | 98 | 81 | +21% | - Q2 2025 revenue growth was driven by increased throughput from 72 additional wells connected since June 30, 2024, and annual CPI-based rate adjustments of approximately 1.6%133134 - For the six months ended June 30, 2025, direct operating expenses increased 9% to $120 million, primarily due to a 17% increase in water handling costs related to higher wastewater trucking, disposal, and blending activities153 Capital Resources and Liquidity Liquidity is driven by operating cash flow and credit facility, with increased operating cash flow and significant cash used for financing activities including share repurchases Six-Month Cash Flow Comparison (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Operating Activities | $464,125 | $426,367 | | Investing Activities | ($72,334) | ($148,422) | | Financing Activities | ($391,791) | ($278,011) | - The Board declared a cash dividend of $0.2250 per common share for Q2 2025, payable on August 6, 2025163 Capital Expenditures (in thousands) | | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Gathering systems and facilities | $45,913 | $65,914 | | Water handling systems | $31,144 | $15,134 | | Total Capital Expenditures | $82,135 | $81,048 | Item 3. Quantitative and Qualitative Disclosures about Market Risk Outlines market risks including minimal direct commodity price exposure, interest rate risk from floating-rate debt, and significant credit risk from customer concentration - The company has minimal direct commodity price exposure due to fixed-fee and cost-of-service fee structures in its contracts174 - As of June 30, 2025, the company had $389 million of floating-rate debt outstanding, where a hypothetical 1.0% increase in interest rates would have increased interest expense by an estimated $3 million for the first six months of 2025175 - The company is highly dependent on Antero Resources as its primary customer, creating significant credit and counterparty risk176 Item 4. Controls and Procedures Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of June 30, 2025178 - There were no changes in internal control over financial reporting during Q2 2025 that materially affected, or are reasonably likely to materially affect, internal controls179 PART II—OTHER INFORMATION Item 1. Legal Proceedings The company is subject to various legal proceedings typical for its business, with details provided in Note 14 - The company is involved in various legal proceedings typical for its business182 - For detailed information on contingencies, the report directs readers to Note 14 of the unaudited condensed consolidated financial statements184 Item 1A. Risk Factors Confirms no material changes to the risk factors previously disclosed in the company's 2024 Annual Report on Form 10-K - There have been no material changes to the risk factors described in the 2024 Form 10-K185 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Details Q2 2025 share repurchase activities, with approximately 993,000 shares repurchased under the $500 million program Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased as Part of Plan | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 794,407 | $16.70 | | May 2025 | 195,666 | $17.70 | | June 2025 | 2,800 | $18.05 | | Total Q2 | 992,873 | $16.84 (weighted avg) | - The Board authorized a $500 million share repurchase program in February 2024, with approximately $426 million remaining available for repurchases as of June 30, 2025186187 Item 5. Other Information No other information is required to be disclosed in this item for the reporting period - None188 Item 6. Exhibits Lists all exhibits filed with the Form 10-Q, including CEO and CFO certifications and iXBRL financial statements - The filing includes CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act190