Antero Midstream (AM) - 2024 Q1 - Quarterly Results

Financial and Operating Highlights Antero Midstream reported record Q1 2024 results, with Adjusted EBITDA up 10% to $265 million and leverage reduced to 3.1x Q1 2024 Key Metrics vs. Q1 2023 | Metric | Q1 2024 Value | YoY Change | | :--- | :--- | :--- | | Net Income per Diluted Share | $0.21 | +17% | | Adjusted Net Income per Diluted Share | $0.24 | +14% | | Adjusted EBITDA | $265 million | +10% | | Capital Expenditures | $30 million | -11% | | Free Cash Flow after dividends | $74 million | +62% | | Gathering Volumes | N/A | +4% | | Processing Volumes | N/A | +6% | - Leverage was reduced from 3.3x at year-end 2023 to 3.1x as of March 31, 2024, with the company expecting to achieve its 3.0x leverage target in 2024, positioning it for further return of capital to shareholders[2] - The company placed the Grays Peak compressor station into service with an initial capacity of 160 MMcf/d[2] First Quarter 2024 Financial Results Q1 2024 financial results reflect increased volumes, driving revenues to $279 million and Adjusted EBITDA to $265 million, with Free Cash Flow after dividends up 62% Operating Volumes Q1 2024 operating volumes showed broad growth in gathering, compression, processing, and fractionation, offset by a decline in fresh water delivery Average Daily Volumes | Volume Type | Q1 2023 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Low Pressure Gathering (MMcf/d) | 3,171 | 3,301 | 4% | | Compression (MMcf/d) | 3,137 | 3,260 | 4% | | High Pressure Gathering (MMcf/d) | 2,801 | 2,966 | 6% | | Fresh Water Delivery (MBbl/d) | 123 | 113 | (8)% | | Gross Joint Venture Processing (MMcf/d) | 1,508 | 1,602 | 6% | | Gross Joint Venture Fractionation (MBbl/d) | 36 | 40 | 11% | - The Joint Venture processing and fractionation capacity was 100% utilized during the quarter[4] Revenue and Expenses Q1 2024 total revenues increased to $279 million, driven by Gathering and Processing, with direct operating expenses decreasing to $54 million Q1 2024 Revenue and Expense Breakdown (in millions) | Item | Amount | | :--- | :--- | | Revenues | | | Gathering and Processing | $218 | | Water Handling | $61 | | Total Revenues | $279 | | Direct Operating Expenses | | | Gathering and Processing | $26 | | Water Handling | $28 | | Total Direct Operating Expenses | $54 | - General and administrative expenses, excluding equity-based compensation, were $12 million for the quarter[6] Profitability and Cash Flow Q1 2024 profitability improved with record Net Income, Adjusted EBITDA up 10% to $265 million, and Free Cash Flow after dividends increasing 62% Q1 Profitability and Cash Flow (in millions) | Metric | Q1 2023 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Income | $86.5 | $103.9 | +20% | | Adjusted Net Income | $99.7 | $117.1 | +17% | | Adjusted EBITDA | $241.8 | $265.3 | +10% | | Free Cash Flow before dividends | $153.6 | $182.3 | +19% | | Free Cash Flow after dividends | $45.6 | $74.0 | +62% | - Interest expense decreased by 2% to $53 million compared to the prior year quarter, due to lower average total debt[9] Operational and Corporate Updates Q1 operational updates include connecting 12 new wells, bringing the Grays Peak compressor station online, and $30 million in capital expenditures - Placed the Grays Peak compressor station into service with an initial capacity of 160 MMcf/d, utilizing relocated compressor units for approximately $15 million of capital savings[12] Q1 2024 Capital Investments (in millions) | Category | Investment | | :--- | :--- | | Gathering and Compression | $25 | | Water Infrastructure | $5 | | Total | $30 | - Announced a $4 million gift with Antero Resources to West Virginia University to support Petroleum and Natural Gas Engineering and help develop a new Master's Degree program in Petroleum Midstream Engineering, the first of its kind in the U.S[14] Non-GAAP Financial Measures This section defines and reconciles key non-GAAP financial measures, such as Adjusted Net Income, Adjusted EBITDA, Free Cash Flow, and Net Debt, used for performance and leverage assessment - Adjusted EBITDA is defined as Net Income adjusted for items such as interest, taxes, depreciation, amortization, equity-based compensation, and certain other non-cash or non-recurring items, plus distributions from unconsolidated affiliates[17] - Free Cash Flow before dividends is defined as Adjusted EBITDA less net interest expense and accrual-based capital expenditures[19] Net Debt and Leverage Calculation as of March 31, 2024 (in thousands) | Component | Amount | | :--- | :--- | | Consolidated total debt | $3,197,900 | | Less: Cash and cash equivalents | ($26,088) | | Consolidated net debt | $3,171,812 | | LTM Adjusted EBITDA | $1,012,756 | | Leverage Ratio (Net Debt / LTM Adj. EBITDA) | 3.1x | Financial Statements The unaudited condensed consolidated financial statements for Q1 2024 detail the company's financial position and performance, including the Balance Sheet, Statement of Operations, and Cash Flows Condensed Consolidated Balance Sheets As of March 31, 2024, Antero Midstream's balance sheet shows total assets of $5.75 billion, total liabilities of $3.60 billion, and stable stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2023 | Mar 31, 2024 | | :--- | :--- | :--- | | Total current assets | $91,128 | $133,688 | | Total assets | $5,737,618 | $5,749,241 | | Long-term debt | $3,213,216 | $3,174,873 | | Total liabilities | $3,585,887 | $3,598,862 | | Total stockholders' equity | $2,151,731 | $2,150,379 | Condensed Consolidated Statements of Operations Q1 2024 statements of operations show total revenue increased to $279.1 million, operating income grew to $166.3 million, and Net Income reached a record $103.9 million Q1 Statement of Operations Highlights (in thousands) | Account | Q1 2023 | Q1 2024 | | :--- | :--- | :--- | | Total revenue | $259,475 | $279,051 | | Total operating expenses | $111,130 | $112,800 | | Operating income | $148,345 | $166,251 | | Net income | $86,507 | $103,926 | | Net income per share–diluted | $0.18 | $0.21 | Selected Operating Data This section provides detailed Q1 operating volumes and average realized fees, highlighting YoY increases in most gathering and processing volumes, offset by a decline in fresh water delivery Q1 Average Realized Fees | Fee Type | Q1 2023 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Low pressure gathering ($/Mcf) | $0.35 | $0.36 | 3% | | High pressure gathering ($/Mcf) | $0.21 | $0.22 | 5% | | Fresh water delivery ($/Bbl) | $4.21 | $4.30 | 2% | Condensed Consolidated Results of Segment Operations In Q1 2024, the Gathering and Processing segment generated $154.0 million in operating income on $218.3 million revenue, serving as the primary driver of company profitability Q1 2024 Segment Results (in thousands) | Segment | Total Revenues | Operating Income | Net Income | | :--- | :--- | :--- | :--- | | Gathering and Processing | $218,322 | $154,025 | $181,555 | | Water Handling | $60,729 | $13,488 | $13,488 | Condensed Consolidated Statements of Cash Flows In Q1 2024, net cash from operating activities increased to $210.6 million, with cash used in investing and financing activities, ending the quarter with $26.1 million cash Q1 Statement of Cash Flows Highlights (in thousands) | Cash Flow Activity | Q1 2023 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $182,719 | $210,561 | | Net cash used in investing activities | ($42,151) | ($37,123) | | Net cash used in financing activities | ($140,568) | ($147,416) | | Cash and cash equivalents, end of period | $0 | $26,088 |