Antero Midstream Corporation · NYSE:AM
Antero Midstream — Antero Midstream Partners — Merger or Acquisition (November 2018)
17 slides from Antero Midstream's merger presentation, Nov 1, 2018
Slide 1: Legal Disclaimer
Legal Disclaimer No Offer or Solicitation This presentation discusses a previously announced proposed business combination transaction between Antero Midstream Partners LP (“Antero Midstream”) and Antero Midstream GP LP (“AMGP”). This presentation is for informational purposes only and does not cons
Slide 2: Simplification Transaction Highlights
Simplification Transaction Highlights 3 1 2 Simplifies midstream structure and aligns all Antero equity holders C-Corp structure without IDRs is the increasingly preferred structure by investors Broadens potential investor base and creates opportunity for inclusion in major equity indices Tax effici
Slide 3: Antero's Proven Integrated Strategy
Antero’s Proven Integrated Strategy 4 Integrated Strategy Benefits Integrated Structure 27% 73% 31% Public Public Sponsors/ Management Sponsors/ Management 25% 44% New AM Unparalleled visibility into long-term development Ownership and control of midstream critical to sustainable long-term developme
Slide 4: AR: Consistent Leader in Realizations and Margins
AR: Consistent Leader in Realizations and Margins 5 All-in Pricing Realizations ($/Mcfe) Standalone E&P EBITDAX Margins ($/Mcfe) AR’s strategy has resulted in peer-leading price realizations and EBITDAX margins for over 5 years Sustainable and consistent margins and resource development through pric
Slide 5: Geographic & Infrastructure NGL Advantaged
Geographic & Infrastructure NGL Advantaged 6 Mid-Continent Appalachia 31 Permian Rockies Bakken/Williston Mariner East TEPPCO Exports to International Markets Mont Belvieu Conway Appalachia In-basin fractionation Transport marketable purity products out-of-basin Sufficient fractionation capacity Fix
Slide 6: AM Track Record of Delivering Per Unit Growth
AM Track Record of Delivering Per Unit Growth 7 AM DPU and DCF Per Unit Growth Since IPO 15th consecutive distribution increases since IPO resulting in 159% growth since IPO DCF per unit CAGR of 30%+ DCF Coverage 25%+ above 1.1x – 1.2x target 29% Distribution CAGR Since IPO IPO DCF Coverage Target:
Slide 7: High Growth Year-Over-Year Midstream Throughput
High Growth Year-Over-Year Midstream Throughput 8 Marcellus Utica 37% YoY Fixed Fee: $0.32/Mcf Fixed Fee: $0.19/Mcf Fixed Fee: $3.71/Bbl Low Pressure Gathering (MMcf/d) Compression (MMcf/d) Processing Volumes (MMcf/d) Fresh Water Delivery (MBbl/d) 45% YoY 37% YoY All record volumes during the third
Slide 8: Best in Class Midstream Vehicle
Best in Class Midstream Vehicle 9 Simplification “checks all the boxes” for midstream investors Attribute 1099 Tax Form No IDRs Self-funding Model Reasonable Leverage Visible Growth Capital Efficiency Strong DCF Coverage Sufficient Liquidity Elected Board Tax Shield C-corp for tax and governance pur
Slide 9: Highest Dividend Growth Among Top Midstream
Highest Dividend Growth Among Top 20 Midstream 10 New AM will be a unique midstream vehicle with scale, low leverage and high distribution growth all in a C-corp structure C-CORP Leverage MLP ENBRIDGE ONEOK KINDER MORGAN TRANSCANADA WILLIAMS ANTERO MIDSTREAM * * * * * * * TARGA RESOURCES * * PLAINS
Slide 10: Yield vs. Growth Correlation Implies Attractive Value
Yield vs. Growth Correlation Implies Attractive Value 11 Source: FactSet. Prices as of 10/31/2018. Yield vs. Dividend/Distribution Growth (2018 – 2021) New AM dividend targets imply 5.0% yield ($25/share) based on 2018 – 2021 dividend growth of 27% Antero Midstream Corporation’s dividend growth prof
Slide 11: Antero Midstream Corporation's dividend growth profile supports a premium valuation
Antero Midstream Corporation’s dividend growth profile supports a premium valuation based on comparable C-corps and entities that eliminated IDRs SEMG =) TGE, 8.0% + Bint uel 6.0% + Current Yield (%) 4.0% + 2.0% 0.0% 0.0% 10.0% ENLC Valuation (i.e. yield) highly correlated to distribution growth, ex
Slide 12: Antero Midstream Non-GAAP Measures
Antero Midstream Non-GAAP Measures APPENDIX 13 Non-GAAP Financial Measures and Definitions Antero Midstream views Adjusted EBITDA as an important indicator of the Partnership’s performance. Antero Midstream defines Adjusted EBITDA as Net Income before interest expense, depreciation expense, impairme
Slide 13: Antero Midstream Non-GAAP Measures
Antero Midstream Non-GAAP Measures APPENDIX 14 The GAAP financial measure nearest to Adjusted Operating Cash Flow is cash flow from operating activities as reported in Antero Midstream’s consolidated financial statements. Management believes that Adjusted Operating Cash Flow is a useful indicator of
Slide 14: Antero Midstream Non-GAAP Measures
Antero Midstream Non-GAAP Measures APPENDIX 15 Adjusted EBITDA and Distributable Cash Flow are non-GAAP financial measures. The GAAP measure most directly comparable to Adjusted EBITDA and Distributable Cash Flow is Net Income. The non-GAAP financial measures of Adjusted EBITDA and Distributable Cas
Slide 15: Adjusted EBITDA and DCF Reconciliation
Adjusted EBITDA and DCF Reconciliation APPENDIX 16 Adjusted EBITDA and DCF Reconciliation ($ in thousands) 1) Cash reserved for bond interest expense on Antero Midstream’s 5.375% senior notes outstanding during the period that is paid on a semi-annual basis on March 15th and September 15th of each y
Slide 16: Antero Midstream Non-GAAP Measures
Antero Midstream Non-GAAP Measures 17 The following table reconciles net income to Adjusted EBITDA for the twelve months ended September 30, 2018 as used in this presentation (in thousands): The following table reconciles consolidated total debt to consolidated net debt (“Net Debt”) as used in this
Slide 17: Midstream Non-GAAP Measures
Midstream Non-GAAP Measures The following table reconciles consolidated total debt to consolidated net debt ("Net Debt") as used in this presentation (in thousands): ‘September 30, 2018 Bank credit facility s 875,000 5.375% AM senior notes due 2024 650,000 Net unamortized debt issuance costs 146) Co
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