DENVER - Antero Midstream Corporation (NYSE: AM) ('Antero Midstream' or the 'Company') today released its first quarter 2020 financial and operating results.
In addition, Antero Midstream announced a revised 2020 capital budget and guidance. The relevant consolidated financial statements are included in Antero Midstream's quarterly report on Form 10-Q for the three months ended March 31, 2020.
First Quarter 2020 Highlights
Net loss was $(393) million, or $(0.81) per share, driven primarily by a non-cash goodwill impairment, compared to net income of $79 million for the prior year pro forma quarter
Adjusted net income increased by 11% to $109 million compared to the pro forma prior year quarter, or $0.23 per share (non-GAAP measure)
Adjusted EBITDA increased by 7% to $217 million compared to the pro forma prior year quarter (non-GAAP measure)
Distributable cash flow was $164 million, resulting in 1.1x DCF coverage on the previously declared dividend of $0.3075 per share (non-GAAP measure)
Capital expenditures were $80 million, a 56% decrease compared to the pro forma prior year quarter
Free cash flow before return of capital and changes in working capital was $99 million (non-GAAP measure)
Repurchased 4.7 million shares at an average price of $3.36 per share for approximately $15.8 million
Expect to receive a $55 million federal income tax refund in 2020 related to net operating losses in prior tax years under the CARES Act
Updated 2020 Capital Budget and Guidance:
Further decreased capital budget to a range of $215 to $240 million from the original budget of $300 to $325 million and previously revised budget of $250 to $275 million
A 65% decrease compared to 2019 capital expenditures
Decreased net income guidance to a net loss of $(140) to $(170) million from $345 to $385 million, driven primarily by the non-cash goodwill impairment recognized in the first quarter
Decreased Adjusted EBITDA guidance by 7% to $800 to $830 million from $850 to $900 million, primarily driven by a deferral of 20 well completions by Antero Resources into 2021
Increased free cash flow guidance (before return of capital and changes in working capital) by 9% from a range of $375 to $425 million to $420 to $450 million, driven by capital budget reductions
Paul Rady, Chairman and CEO, said, 'Antero Midstream announced further reductions to its capital budget that result in a 65% decrease year-over-year in capital expenditures. This significant reduction in capital investment highlights the visibility Antero Midstream has into Antero Resource's development plan and the flexibility to make just-in-time changes and efficiently deploy capital. This approach is expected to result in a mid-teens return on invested capital ('ROIC') target in 2020, a steady increase compared to the 2019 ROIC of 13%. This peer-leading ROIC is driven by Antero Midstream's high asset utilization rates, which averaged 89% and 95% for compression and processing capacity in the first quarter of 2020, respectively.'
Mr. Rady further added, 'Antero Resources announced an improvement in its financial and liquidity position through debt reduction during the first quarter of 2020 and a reduction in its full year 2020 capital budget that is expected to result in $175 million of free cash flow assuming current strip prices. These actions and the continued focus on operational savings result in over $1.0 billion of liquidity and further strengthens the financial profile of Antero Resources, which ultimately benefits Antero Midstream.'
COVID-19 Pandemic Developments
As a midstream energy company, Antero Midstream is recognized as an essential business under various Federal, State and Local regulations related to the COVID-19 pandemic and the communities in which it operates. Antero Midstream has continued to operate as permitted under these regulations, while taking steps to protect the health and safety of its workers. Antero Midstream has implemented protocols to reduce the risk of an outbreak within its field operations, and these protocols have not reduced throughput in a significant manner. A substantial portion of the Company's non-field level employees have transitioned to remote work from home arrangements, and have been able to maintain a consistent level of effectiveness, including maintaining day-to-day operations and decision making, financial reporting systems and internal control over financial reporting. To date, the Company has had no confirmed cases of COVID-19 within its employee base at any of its locations.
Antero Resources Recent Developments
In a separate press release, Antero Resources announced several initiatives to improve its financial profile and liquidity position. The discussion in this section reflects statements made by Antero Resources. First, Antero Resources announced that as a result of the recent spring borrowing base redetermination, the borrowing base under its revolving credit facility was approved at $2.85 billion. Lender commitments under the credit facility were unchanged at $2.64 billion. In addition, Antero Resources reduced its 2020 drilling and completion budget by 33% from an initial budget of $1.1 billion to $750 million. The reduction reflects continued drilling and completion efficiency improvements, service cost deflation and a deferral of 20 well completions into 2021. Lastly, Antero Resources continued its consistent hedging program during the quarter by adding approximately 688 MMbtu/d of natural gas hedges in 2022 at a weighted average price of $2.48/MMBtu since December 31, 2019. Antero Resources' release can be found at www.anteroresources.com. Information in Antero Resources' release does not constitute a portion of, and is not incorporated by reference into, this press release.
Contact:
Michael Kennedy
Tel: (303) 357-6782
Email: mkennedy@anteroresources.com
ANTERO MIDSTREAM CORPORATION 
