AM - Earnings call transcript Q4 2018 | Antero Midstream Corporation

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Operator

Good day, and welcome to the Antero Midstream Partners LP Fourth Quarter and Year-End 2018 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I'd now like to turn the conference over to Michael Kennedy, CFO and Senior Vice President, Finance. Please go ahead.

Michael Kennedy

Thank you for joining us for Antero Midstream's fourth quarter 2018 investor conference call. minutes we'll the Q&A. open few highlights, and a then and it spend going financial through operating We'll up for would be site direct of to a separate where also the presentation provided today's I page that call. call home will we you have our during www.anteromidstream.com at to Web earnings or reviewed www.anteromidstreamgp.com, new like

from on what expressed, first management forecast Before a are reconciliations Today's uncertainties, we may and statements our release such call, to you Antero will the that, to or which call that such is the statements. forward-looking comparable Antero's remind judgments disclosures in financial will press are earnings start subject including of refer contain Midstream for measures. risks outcomes Please beyond our Antero future current important based AMGP like measures. comments, financial factors regarding differ regarding performance to GAAP during certain to and and our of are non-GAAP I Resources, also Actual Such implied many make materially would control. and statements. results impact number this most could Antero of measures,

today Antero Rady, of and are the and CEO and Chairman President of Resources Antero on me Warren, President Joining Midstream. Resources call Midstream; Antero CFO and Paul Glen and of Antero

four. to on the touch I simplification briefly Before on the wanted to timeline slide over turning number Paul, call transaction

unitholders. their On in each and XX, Xth, AM on stock are AMGP you shareholders a to agreement transaction. respective proxy acquire October aware, announced January statements mailed a As definitive to and cash AMGP AM and

telephone electronically cash for time. at March time p.m. registered Eastern and Xth the p.m. by holders, XX:XX X:XX a voting versus consideration stock is the is at Xth For for deadline Eastern deadline or March electing

of and to encourage the AMGP simplification AM shares respectively. unitholders should March All transaction the nominee, AM. unitholders I'll hold as March to shareholders transaction provided bank, XX. and common close the X outlook of units AMGP AMGP we are shareholders AM or of for the and the be through a follow call XXth entitled on to The over business shares on common we to new and AM our them. or shareholders that, expect January AM of remain you vote We broker, for meetings excited scheduled and all vote record very you With turn will AMGP the the and close special about Paul approve instructions of unitholders If other by to units

Paul Rady

comments Thanks, titled Mike. on Long-Term Outlook-AR. I'll my begin X slide number

oil XXXX. on targeting $XX based As of $XX $X.XX previously and CAGR target on XX% on production the oil through gas the is low growth disclosed, AR end commodity is end. high price This to $X.XX XX% scenarios a and gas range and

all markets. Importantly, to AR's production providing portfolio grow of priced in premium transportation and visibility the continue diverse firm and is access service, now to

ultimately plan AR New from Long-Term benefiting ahead, Slide to capital the growth X flexible completion Looking strength balance Resources cash new production DCF the targeting at AM outlook. same budgets flow development drilling maintain new a titled, will Antero maintain continue AM within illustrates growth Outlook sheet to and AM. number

range. just-in-time Because balance This end versus result the guidance de-levering scenarios represent and the growth to New growth growing targeting CapEx the mid-X of AM’s of million of times over capital consensus flexible left-hand or a XX% lines $XXX high end DCF AM The low in visibility in XX% into on XXXX number capital share the the slide illustrated DCF bar and per of dividends. outlook new total CAGR page is low the dividend orange. blue of X. both the $X.XX DCF supports investment, as just Cal return grey growth at of on through respectively. to XX The represents sheet ranges new side AM’s in

infrastructure. trunklines, As in growth and moderates you existing increasing results the dividends, retention growth including can This capital budget West de-levering leverages repurchases, Tyler the counties DCF Wetzel see share after moderating in flow budget Virginia, cash the to for freshwater available organic gathering relative investments CapEx. capital excess in capital for in growth major the and supporting as infrastructure XXXX AM and

Major Now let's move titled slide Projects. to and eight Capital on number Budget

budget $XXX on capital, budgeted including illustrated capital the the As of the AM page, and Virginia $XX of guidance Marcellus West liquids to midpoint chart investment the capital. compression of of in a growth support gathering infrastructure regime. left-hand side and in $XXX of investment expansion at the rich maintenance into million on in pie has production Shale The million million includes of $XXX range the approximately million primarily

gathering side the you includes the build the Virginia. On that right-hand of page, West significant trunklines counties in and the Tyler to into map, on Wetzel out can growth capital. see XXXX

the these AM Looking beyond feed deliver XXXX, processing trunklines trunklines directly leverage gas build low-pressure Smithburg and and lines plants. gathering Sherwood to the and into that will

infrastructure just-in-time that Importantly, AR's invested visibility Low-pressure of integration and investment I point also returns in as gas AM infrastructure based and the of constraints any benefits Antero's pipelines sizes a capital [ph] model. future in would production further between as illustrates meet half critical curtail and and capital is development not plan because and capital. resulting of Shale efficient all AM, on forecasts. does integration out AR gathering integrated to is AR appropriately result on development teens flexible and This the

in of has these on gathering pipelines, record County. Tyler right-hand of system. AM side, point delivery to including track trunklines and Moving capital on withdrawal infrastructure freshwater future a completions the additional investment the of to wells an associated and the record AM with Wetzel of shown an for as XXX% its map side well freshwater the AM track trunklines Similar on will a servicing onto leverage freshwater for expansion time, the $XXX service delivery page. budgeted million

the the additional two of day integrated a the of additional cubic Antero's includes processing model. MPLX processing of an joint plants election also XXXX includes adding XXXX. million joint the of X The million of example the adding $XXX for construction feet in benefits Another an day additional primarily barrels XXX for venture with originally Hopedale venture budget XX,XXX MPLX to participate XXXX The budget capacity capacity. plant, a budgeted fractionation we also that for

with the approximately for in completion Lastly, liquid the up that, Marcellus. summary, economic final XXXX focused on highly growth plan $XX the million budget Mike. on organic the the years turn deliver rich over visible Clearwater call the us milestone of Facility. over related our Antero next payments includes locations to sets In the With to to AR few I'll

Michael Kennedy

you, Thank Paul.

briefly like I'd of Am getting AR's my from Before comments, touch deconsolidating on a financial reporting into announcement AM a perspective. to

AR For those statements longer plans gap conference that AR on to closing that upon financial AM were consolidate able call, no of announced transaction. to it simplification into listen the its the

its has comments. to E&P in method enable interest our greatly So In basis. this the The its compare upon through efforts announcement accounting. view, a XX% impact will of AR and AR benefits believe rather investors AM in our New approximately coordinated But AR with businesses. of continue And equity no of transaction. and and more midstream on contrast the improve simplification still recording the and AM's on easily standalone we believe AM Paul disclosure of we own the transparency record closing model peers. in for the integrated New and mentioned to will between his this upstream

unit, Long consecutive Track nine to titled The increase on slide AM since beginning at IPO. XX% a an and announced sequentially. recently Record XXth $X.XX year-over-year distribution its on increase per AM a fourth moving of quarter distribution the increase was Now we Success, of AM X% distribution

times AM out XXXX, illustrated For a the coverage on continued AM the per $X.XX the of converted Antero we generating IPO had commodity full-year this or times target the DCF X.X X.X when coverage times. the $X.XX on excess its We're trend resiliency XXXX, the of DCF of unit well of as proud distribution performance Midstream X.X coverage business very New downturn. in share achievement to a of into model slide. through DCF in to

$X.XX depicted today's price. approximately share representing XXXX our As New share slide, for is on X% on dividend yield AM a guidance per

Now let's quarter beginning results year-over-year slide growth high operational the titled move XX, midstream fourth to throughput. with on

compared Joint volumes volumes year from per nearly day delivery over XX% quarter. fourth prior increase which the XX% Compression XXX% Bcf quarter. quarter. and X.X the the to day, venture prior the barrels All during of volumes of the increase top left processing for low million XX,XXX our gathering fractionation Pressure quarter. the year Starting a venture capacity XXX,XXX X.X per reduction compression gross growth the the during average prior in Joint with highs XXX in completion the XX% per fourth fourth a processing XX% third and activities by were the earnings quarter AM averaged quarter per fractionation nearly gathering Compression were increase during represented prior utilized expected quarter. decline a in on quarter. day, compared day, and call. communicated X% Bcf AR volumes volumes the over a at decrease of prior record Freshwater page, per day averaged increase volumes barrels to to represents was the quarter, quarter XXXX. portion driven a This as

per as growth day compression XX,XXX capacity capacity we per by per XXXX, and XXX day. XXX of ahead we barrels day processing fractionation Looking cumulative by million continued million increased capacity by JV expect

the million, increase resulting driven fourth income flow financial a The to coverage throughput adjusted volumes. results, cash the on Moving Distributable increased to for EBITDA compared DCF was adjusted of $XXX times. EBITDA million, healthy increase ratio was a $XXX quarter year quarter was XX% the primarily quarter. X.X in prior by in fourth for

adjusted $XXX of also times. coverage For distributed DCF XXXX EBITDA, X.X million cash $XXX the flow resulting were million full-year and in and respectively,

guidance growth EBITDA, within all adjusted ranges. our DCF Our coverage DCF XXXX were distribution and

and fourth During million $XX $XXX invested infrastructure water Midstream gathering million infrastructure. in handling quarter, the Antero in

processing during joint the million to addition the and gathering venture the fourth invested quarter. In AM fractionation $XX water in

balance of billion million XXXX of in EBITDA and revolving credit to times. had liquidity facility X.X on net it's ratio debt Moving December the Midstream $XXX $X and liquidity sheet billion $X strong resulting XX, as and to in Antero LTM a

and discipline slide direct results Next, Strategy titled record Return capital Drives investment. throughput our to XX, volumes Organic to on Capital, discuss Attractive of you I'll

I'll As to continue on a has invested the teens where an finish my track the avoiding to the a been a of and growth projects markets generate right-hand expect on focus drives will side return continues on closing given or focus the the AR strategy recent in XXXX. into years. of invested page, AM volumetric the an we focusing high AM. Midstream for generated next transition deliver in and ROIC date capital be AM Organic Antero acquisition returns the depicted simplification the New New to or competitive to on on always ROIC XX% and with announcement we on comments transaction. the expected of few outlook results capital the as

Growth Entities. depicted titled As Top slide XX, Highest Midstream Among on XX DCF

XX In that eliminated IDRs. of by is indicates distribution XXXX. Of one and peer the to XXXX be CAGR midstream AM its that New growth asterix C-Corps to red at will at XX% the chart highest infrastructure market expected to DCF AM that XX the top structured New from have midpoint among font the the of top midstream are C-Corps companies capitalization. companies the range companies group, XX% indicate

and and strong a appeal. simplified summary, the with balance take With no class low leverage, overtime. In a sheet will are with best we growth, have DCF addition, low IDR ready be in leverage a three broad AM declining structure proforma In pure times Corporation Midstream New leading New will questions. market governance range operator, that C-Corp AM to

Operator

begin now are time. questions the this [Operator will Instructions] session. no We at There question-and-answer

Michael Kennedy

any today. are Well, thank to please reach to free out feel questions, joining for us. us. everyone And us joining you Great. for again If thanks there

Operator

concluded. The Thank for attending conference has you now today's presentation.

great now may day. disconnect a Have your You lines.

Antero Midstream (AM) 14 Feb 192018 Q4 Earnings call transcript