Antero Midstream Corporation · NYSE:AM
Antero Midstream — Antero Midstream Partners — Merger or Acquisition (February 2019)
19 slides from Antero Midstream's merger presentation, Feb 15, 2019
Slide 1: Legal Disclaimer
Legal Disclaimer No Offer or Solicitation This presentation includes a discussion of a proposed simplification transaction (the “Transaction”) between Antero Midstream Partners LP (“AM” or the “Partnership”) and Antero Midstream GP LP (“AMGP”). This presentation is for informational purposes only an
Slide 2: Legal Disclaimer (Continued)
Legal Disclaimer (Continued) Forward-Looking Statements: This presentation includes "forward-looking statements" within the meaning of federal securities laws. Such forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond AM and AMGP’s control. All stat
Slide 3: Simplification Transaction Timeline
Simplification Transaction Timeline 4 Midstream Simplification has been approved by the AM and AMGP Conflicts Committees and by the AR Special Committee Transaction Timeline October 9, 2018 Simplification transaction announced January 31, 2019 Proxy statements mailed to AM unitholders and AMGP share
Slide 4: Long-Term Outlook - AR
Long- Term Outlook - AR 5 All of Antero Resources’ contracted firm capacity is now in service, providing visible production growth and sales to diversified markets Antero Resources Firm Transportation Portfolio vs. Gross Gas Production (MMcf/d) Appalachia (M2/Dom South) – 625 MMcf/d TCO Pool – 690 M
Slide 5: Long-Term Outlook – New AM
Long-Term Outlook – New AM 6 18% Distributable Cash Flow CAGR Declining Leverage Profile to low to mid 2x Supports Previously Communicated Dividend Growth Targets $50 / $2.85 25% Distributable Cash Flow CAGR Declining Leverage Profile to low to mid 2x Supports Previously Communicated Dividend Growth
Slide 6: DCF Profile Supports Growing Return of Capital
DCF Profile Supports Growing Return of Capital 7 Distributable Cash Flow vs. Growth Capex ($MM) Antero Midstream’s distributable cash flow growth, self-funding business model, and leverage profile supports an increase in return of capital to shareholders 25% DCF CAGR Target Note: Distributable Cash
Slide 7: Capital Budget and Major Projects - 2019
Capital Budget and Major Projects - 2019 8 Capital Expenditures ($MM) Marcellus Project Map Processing & Fractionation Gathering & Compression Water Delivery & Treatment Capital Budget: $775MM 2019 organic capital budget fully funded with retained cash flow and credit facility borrowings no need for
Slide 8: Long Track Record Of Success
Long Track Record Of Success 9 Distributable Cash Flow(1): $53 MM $680 MM - $730 MM $67 MM $870 MM - $920 MM Adjusted EBITDA(1): +1,201% +1,235% New AM Dividend Per Share and DCF Coverage Since IPO IPO Year - 2014 2019 Guidance Adjusted EBITDA and Distributable Cash Flow are non-GAAP measures. For a
Slide 9: High Growth Year-Over-Year Midstream Throughput
High Growth Year-Over-Year Midstream Throughput 10 Marcellus Utica 52% YoY Fixed Fee: $0.32/Mcf Fixed Fee: $0.19/Mcf Fixed Fee: $3.78/Bbl Low Pressure Gathering (MMcf/d) Compression (MMcf/d) Processing Volumes (MMcf/d) Fresh Water Delivery (MBbl/d) 63% YoY (9%) YoY Record gathering, compression , pr
Slide 10: Organic Strategy Drives Attractive Return on Capital
Organic Strategy Drives Attractive Return on Capital 11 AM Return on Invested Capital (ROIC) Actual Consensus Source: FactSet consensus as of 02/12/19. Return on invested capital is a non-GAAP measure. For additional information regarding this measure, please see “Antero Midstream Non-GAAP Measures”
Slide 11: Highest DCF Growth Among Top Midstream Entities
Highest DCF Growth Among Top 20 Midstream Entities 12 New AM will be a unique midstream vehicle with scale, low leverage and high distributable cash flow growth all in a C-Corp structure C-Corp Leverage MLP ENBRIDGE KINDER MORGAN TRANSCANADA WILLIAMS ANTERO MIDSTREAM * * TARGA RESOURCES * PLAINS ALL
Slide 12: Highest DCF Growth Among Top Midstream Entities
A »> Highest DCF Growth Among Top 20 Midstreai New AM will be a unique midstream vehicle with scale, low leverage and high distributable cash flow growth all in a C-Corp structure C-Corp MLP Leverage %% Eliminated IDRs i ” ad (Simplified) 3-Year Distributable Cash Flow CAGR (2020-2022) TARGA RESOURC
Slide 13: Antero Capitalization – Pro forma as of 12/31/18
Antero Capitalization – Pro forma as of 12/31/18 14 Antero Midstream: Liquidity and Balance Sheet As of December 31, 2018 ($MM) Antero Midstream Antero Resources (Stand-alone) Antero Resources (Consolidated) Cash $0 $0 $0 Debt Revolving Credit Facility $990 $405 $1,395 5.375% Senior Notes Due 2021 $
Slide 14: Antero Midstream Non-GAAP Measures
Antero Midstream Non-GAAP Measures APPENDIX 15 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 15: Antero Midstream Non-GAAP Measures
Antero Midstream Non-GAAP Measures 16 The following table reconciles net income to Adjusted EBITDA for the twelve months ended December 31, 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 p
Slide 16: Adjusted EBITDA and DCF Reconciliation
Adjusted EBITDA and DCF Reconciliation 17 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 year. 2) E
Slide 17: Antero Midstream Non-GAAP Reconciliation
Antero Midstream Non-GAAP Reconciliation APPENDIX 18 The following reconciles net income to Adjusted EBITDA and Distributable Cash Flow: $ in Thousands 2014 G&C Only 2014 2015 2016 2017 Net income $ 16,832 $ 127,875 159,105 236,703 307,315 Interest expense, net 4,620 6,183 8,158 21,893 37,557 Impair
Slide 18: Antero Midstream Non-GAAP Measures
Antero Midstream Non-GAAP Measures APPENDIX 19 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 19: GAAP Measures
GAAP Measures A 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 Cash Flow should not be considered
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