Antero Midstream Corp

Previous wording

On February 13, 2024, our Board authorized a share repurchase program that allows us to repurchase up to $500 million of shares of our outstanding common stock. The shares may be repurchased from time to time in open market transactions, through privately negotiated transactions or by other means in accordance with federal securities laws. The timing, as well as the number and value of shares repurchased under the program, will be determined by us at our discretion and will depend on a variety of factors, including the market price of our common stock, general market and economic conditions and applicable legal requirements. The exact number of shares to be repurchased by us is not guaranteed and the program may be suspended, modified or discontinued at any time without prior notice. The 1% U.S. federal excise tax on certain repurchases of stock by publicly traded U.S. corporations enacted as part of the Inflation Reduction Act of 2022 applies to our share repurchase program. During the three and nine months ended September 30, 2024, we did not repurchase any shares under this program.

Current wording

During the three months ended March 31, 2025, we repurchased approximately 2 million shares of our common stock through our share repurchase program for a total cost of $29 million. As of March 31, 2025, we have approximately $443 million of capacity remaining under our share repurchase program. The shares may be repurchased from time to time in open market transactions, through privately negotiated transactions or by other means in accordance with federal securities laws. The timing, as well as the number and value of shares repurchased under the program, will be determined by us at our discretion and will depend on a variety of factors, including the market price of our common stock, general market and economic conditions and applicable legal requirements. The exact number of shares to be repurchased by us is not guaranteed and the program may be suspended, modified or discontinued at any time without prior notice.

Previous wording

Benchmark prices for natural gas decreased significantly, while benchmark prices for oil remained consistent and benchmark prices for NGLs increased during the nine months ended September 30, 2024 as compared to the same period of 2023. While substantially all of our revenues are based on fixed-fee contracts that are not directly impacted by changes in commodity prices, commodity price changes do impact the revenues and cash flows of Antero Resources, and Antero Resources’ drilling and development plan does have a direct impact on our gathering, compression and water handling services, revenues and cash flows. In the current economic environment, we expect that commodity prices for some or all of the commodities produced by Antero Resources could remain volatile. However, due to Antero Resources’ improved liquidity and leverage position as compared to historical levels, we do not expect to experience significant variability in our throughput volumes resulting from volatile commodity prices.

Current wording

Benchmark prices for natural gas and NGLs increased, while benchmark prices for oil decreased during the three months ended March 31, 2025 as compared to the same period of 2024. While substantially all of our revenues are based on fixed-fee contracts that are not directly impacted by changes in commodity prices, commodity price changes do impact the revenues and cash flows of Antero Resources, and Antero Resources’ drilling and development plan does have a direct impact on our gathering, compression and water handling services, revenues and cash flows. In the current economic environment, we expect that commodity prices for some or all of the commodities produced by Antero Resources could remain volatile. However, due to Antero Resources’ improved liquidity and leverage position as compared to historical levels, we do not expect to experience significant variability in our throughput volumes resulting from volatile commodity prices.

Previous wording

The economy experienced elevated inflation levels as a result of global supply and demand imbalances, where global demand outpaced supplies beginning in 2021 and continuing through the third quarter of 2024. For example, the Consumer Price Index (“CPI”) for all urban consumers increased 3.7% from September 2022 to September 2023 and an additional 2.4% from September 2023 to September 2024 as compared to the Federal Reserve’s stated goal of 2%. In order to manage the inflation risk present in the United States’ economy, the Federal Reserve utilized monetary policy in the form of interest rate increases beginning in March 2022 in an effort to bring the inflation rate in line with its stated goal of 2% on a long-term basis. Between March 2022 and July 2023, the Federal Reserve increased the federal funds interest rate by 5.25%. During the three months ended September 30, 2024, inflation rates began to approach the Federal Reserve’s stated goal of 2%, and the Federal Reserve decreased the federal funds rate by 0.5% in September 2024. While inflationary pressures in the United States’ economy have begun to subside, we continue to be impacted by the increased federal funds interest rate. See “—Results of Operations” for additional information.

Current wording

The economy experienced elevated inflation levels as a result of global supply and demand imbalances, where global demand outpaced supplies beginning in 2021 and continuing through 2024. In order to manage the inflation risk present in the United States’ economy, the Federal Reserve utilized monetary policy in the form of interest rate increases beginning in March 2022 in an effort to bring the inflation rate in line with its stated goal of 2% on a long-term basis. Between March 2022 and July 2023, the Federal Reserve increased the federal funds interest rate by 5.25%. During the second half of 2024, inflation rates began to approach the Federal Reserve’s stated goal of 2%, and the Federal Reserve decreased the federal funds rate by

Previous wording

The economy also continues to be impacted by global events. These events have often caused global supply chain disruptions with additional pressure due to trade sanctions on Russia and other global trade restrictions, among others. However, neither our nor Antero Resources’ supply chain has experienced any significant interruptions due to such events.

Current wording

The economy also continues to be impacted by global events. These events have often caused global supply chain disruptions with additional pressure due to trade sanctions, tariffs and other global trade restrictions, among others. While neither our nor Antero Resources’ supply chain has experienced any significant interruptions due to such events, there can be no assurance that we will not experience interruptions in the future.

Previous wording

We have two reportable segments: (i) gathering and processing and (ii) water handling. The gathering and processing segment includes a network of gathering pipelines and compressor stations that collect and process production from Antero Resources’ wells in the Appalachian Basin, as well as equity in earnings from our investments in the Joint Venture and Stonewall. The Joint Venture and Stonewall provide processing and fractionation services and high-pressure gas gathering services, respectively, in the Appalachian Basin. The water handling segment includes (i) two independent systems that deliver water from sources including the Ohio River, local reservoirs and several regional waterways, and (ii) other fluid handling services, which include high rate transfer, wastewater transportation, disposal and blending.

Current wording

We have two reportable segments: (i) gathering and processing and (ii) water handling. The gathering and processing segment includes a network of gathering pipelines and compressor stations that collect and process production from Antero Resources’ wells in the Appalachian Basin, as well as equity in earnings from our investments in the Joint Venture and Stonewall. The Joint Venture and Stonewall provide processing and fractionation services and high-pressure gas gathering services, respectively, in the Appalachian Basin. The water handling segment includes (i) two independent systems that deliver water from sources including the Ohio River, local reservoirs and several regional waterways, and (ii) other fluid handling services, which include high rate transfer, wastewater transportation, disposal and blending. See Note 15—Reportable Segments to our unaudited condensed consolidated financial statements for additional information.

Previous wording

The operating results of our reportable segments are as follows:

Current wording

The operating results of our reportable segments were as follows:

Previous wording

Revenues. Total revenues increased by 2%, from $264 million for the three months ended September 30, 2023 to $270 million for the three months ended September 30, 2024. Total revenues included amortization of customer relationships of $18 million for the three months ended September 30, 2023 and 2024. Gathering and processing revenues increased by 10%, from $206 million for the three months ended September 30, 2023 to $226 million for the three months ended September 30, 2024. Water handling revenues decreased by 24%, from $58 million for the three months ended September 30, 2023 to $44 million for the three months ended September 30, 2024. These fluctuations primarily resulted from the following:

Current wording

Revenues. Total revenues increased by 4%, from $279 million for the three months ended March 31, 2024 to $291 million for the three months ended March 31, 2025. Total revenues included amortization of customer relationships of $18 million for each of the three months ended March 31, 2024 and 2025. Gathering and processing revenues increased by 5%, from $218 million for the three months ended March 31, 2024 to $229 million for the three months ended March 31, 2025. Water handling revenues increased by 3%, from $61 million for the three months ended March 31, 2024 to $62 million for the three months ended March 31, 2025. These fluctuations primarily resulted from the following:

Previous wording

Direct operating expenses. Direct operating expenses remained consistent at $52 million for the three months ended September 30, 2023 and 2024. Gathering and processing direct operating expenses increased by 4%, from $24 million for the three months ended September 30, 2023 to $25 million for the three months ended September 30, 2024 primarily due to our acquisition of two compressor stations and 48 miles of high pressure gathering lines during the second quarter of 2024. Water handling direct operating expenses decreased by 4%, from $28 million for the three months ended September 30, 2023 to $27 million for the three months ended September 30, 2024 primarily due to decreased fresh water delivery volumes during the three months ended September 30, 2024, partially offset by increased pipeline maintenance, repair and monitoring activities between periods.

Current wording

Direct operating expenses. Direct operating expenses increased by 5%, from $54 million for the three months ended March 31, 2024 to $57 million for the three months ended March 31, 2025. Gathering and processing direct operating expenses remained consistent at $26 million for each of the three months ended March 31, 2024 and 2025. Water handling direct operating expenses increased by 10%, from $28 million for the three months ended March 31, 2024 to $31 million for the three months ended March 31, 2025 primarily due to increased blending volumes and costs and higher wastewater handling costs between periods.

Previous wording

*General and administrative (excluding equity-based compensation) expenses.*General and administrative expenses (excluding equity-based compensation expense) increased by 18% from $9 million for the three months ended September 30, 2023 to $11 million for the three months ended September 30, 2024 primarily due to higher costs allocated to us from Antero Resources.

Current wording

*General and administrative (excluding equity-based compensation) expenses.*General and administrative expenses (excluding equity-based compensation expense) remained relatively consistent at $12 million and $11 million for the three months ended March 31, 2024 and 2025, respectively.

Previous wording

*Equity-based compensation expenses.*Equity-based compensation expenses increased from $8 million for the three months ended September 30, 2023 to $12 million for the three months ended September 30, 2024 primarily due to annual equity-based awards granted during the first quarter of 2024. Our equity-based awards vest over three or four year service periods. See Note 9—Equity-Based Compensation to the unaudited condensed consolidated financial statements for additional information.

Current wording

*Equity-based compensation expenses.*Equity-based compensation expenses increased by 33%, from $9 million for the three months ended March 31, 2024 to $12 million for the three months ended March 31, 2025 primarily due to annual equity-based awards granted during the first quarters of 2024 and 2025. Our equity-based awards vest over three or four year service periods. See Note 9—Equity-Based Compensation to the unaudited condensed consolidated financial statements for additional information.

Previous wording

Depreciation expense. Depreciation expense increased by 6%, from $101 million for the nine months ended September 30, 2023 to $107 million for the nine months ended September 30, 2024. This increase was primarily due to $3 million related to assets placed in service, $2 million of higher expense related to our program to repurpose underutilized compressor units to expand existing or construct new compressor stations during the nine months ended September 30, 2024 and $1 million for our assets acquired during the second quarter of 2024.

Current wording

Depreciation expense. Depreciation expense decreased by 12%, from $37 million for the three months ended March 31, 2024 to $33 million for the three months ended March 31, 2025. This decrease was primarily due to lower depreciation expense of $5 million related to our program to repurpose underutilized compressor units to expand existing or construct new compressor stations, partially offset by depreciation expense of $1 million related to assets placed in service between periods.

Previous wording

Interest expense. Interest expense decreased by 6%, from $55 million for the three months ended September 30, 2023 to $52 million for the three months ended September 30, 2024 primarily due to lower Credit Facility borrowings between periods and lower interest expense on our Senior Notes due to the repurchase and redemption of the $550 million principal amount of the 2026 Notes during the first and second quarters of 2024, partially offset by the issuance of $600 million principal amount of 2032 Notes during the first quarter of 2024.

Current wording

Interest expense. Interest expense decreased by 9%, from $53 million for the three months ended March 31, 2024 to $48 million for the three months ended March 31, 2025 primarily due to lower interest expense for our 2026 Senior Notes that were fully retired during the second quarter of 2024 and lower rates on our Credit Facility borrowings, partially offset by higher Credit Facility borrowings between periods. See Note 7—Long-Term Debt to our unaudited condensed consolidated financial statements for additional information.

Previous wording

Equity in earnings of unconsolidated affiliates. Equity in earnings of unconsolidated affiliates remained relatively consistent at $27 million and $28 million for the three months ended September 30, 2023 and 2024, respectively.

Current wording

Equity in earnings of unconsolidated affiliates. Equity in earnings of unconsolidated affiliates remained consistent at $28 million for each of the three months ended March 31, 2024 and 2025.

Previous wording

Income tax expense. Income tax expense remained relatively consistent for the three months ended September 30, 2023 and 2024 at $37 million and $38 million, respectively, which reflects effective tax rates of 27.3% and 27.7%, respectively.

Current wording

Income tax expense. Income tax expense remained consistent at $36 million for each of the three months ended March 31, 2024 and 2025, which reflects effective tax rates of 26.0% and 23.0%, respectively. The decrease in the effective tax rate between periods is primarily due to higher equity-based compensation expenses.

Previous wording

The following table summarizes our cash flows for the nine months ended September 30, 2023 and 2024:

Current wording

The following table summarizes our cash flows for the three months ended March 31, 2024 and 2025:

Previous wording

Investing activities. Net cash flows used in investing activities was $130 million and $203 million for the nine months ended September 30, 2023 and 2024, respectively. The increase in cash flows used in investing activities between periods was primarily due to our acquisition of gathering and compression assets during the second quarter of 2024 of $70 million, before closing adjustments, and increased capital spending for our gathering and processing systems of $20 million as a result of increased compression station and high pressure line capital projects between periods, partially offset by decreased capital spending for our water handling systems of $16 million primarily as a result of fewer capital projects between periods.

Current wording

Investing activities. Net cash flows used in investing activities was $37 million and $32 million for the three months ended March 31, 2024 and 2025, respectively. The decrease in cash flows used in investing activities between periods was primarily due to lower capital spending and acquisitions related to our gathering systems and facilities of $8 million, partially offset by additional investment in Stonewall of $2 million and higher capital spending on our water handling systems of $1 million between periods.

Previous wording

Financing activities. Net cash used in financing activities was $441 million and $408 million for the nine months ended September 30, 2023 and 2024, respectively. The decrease in cash flows used in financing activities between periods was primarily due to the issuance of the 2032 Notes of $600 million and lower net repayments on our Credit Facility of $15 million, partially offset by our repurchases and redemption of the 2026 Notes of $561 million, deferred financing costs payments on our 2032 Senior Notes and New Credit Facility of $13 million and higher tax withholdings for the settlement of equity-based compensation awards of $6 million between periods.

Current wording

Financing activities. Net cash used in financing activities was $147 million and $167 million for the three months ended March 31, 2024 and 2025, respectively. The increase in cash flows used in financing activities between periods was primarily due to higher common stock repurchases of $29 million, payments of employee tax withholdings for the settlement of equity-based compensation awards of $18 million and dividends to common stockholders of $5 million between periods, partially offset by refinancing of our Credit Facility borrowings with the issuance of our 2032 Senior Notes during the first quarter of 2024.

Previous wording

On February 14, 2024, we announced a capital budget with a range of $150 million to $170 million. This capital budget supports Antero Resources’ maintenance capital program for 2024. Our capital budget may be adjusted as business conditions warrant. Additionally, we monitor our existing assets and look for opportunities to reuse or otherwise repurpose assets in an effort to optimize our capital efficiency.

Current wording

On February 12, 2025, we announced a capital budget with a range of $170 million to $200 million. This capital budget supports Antero Resources’ maintenance capital program for 2025. Our capital budget may be adjusted as business conditions warrant. Additionally, we monitor our existing assets and look for opportunities to reuse or otherwise repurpose assets in an effort to optimize our capital efficiency.

Previous wording

See Note 7—Long-Term Debt to the unaudited condensed consolidated financial statements and to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2023 Form 10-K for information on our debt agreements.

Current wording

See Note 7—Long-Term Debt to the unaudited condensed consolidated financial statements and to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2024 Form 10-K for additional information.

Previous wording

The discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with GAAP. Any new accounting policies or updates to existing accounting policies as a result of recently adopted accounting standards have been included in Note 2—Summary of Significant Accounting Policies to our unaudited condensed consolidated financial statements. The preparation of our unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent liabilities. Accounting estimates and assumptions are considered to be critical if there is reasonable likelihood that materially different amounts could have been reported under different conditions, or if different assumptions had been used. We evaluate our estimates and assumptions on a regular basis. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the reported amounts in our unaudited condensed consolidated financial statements that are not readily apparent from other sources. Actual results may differ from these estimates and assumptions used in preparation of our unaudited condensed consolidated financial statements. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the 2023 Form 10-K for information on our critical accounting estimates.

Current wording

The discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with GAAP. Any new accounting policies or updates to existing accounting policies as a result of recently adopted accounting standards have been included in Note 2—Summary of Significant Accounting Policies to our unaudited condensed consolidated financial statements. The preparation of our unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent liabilities. Accounting estimates and assumptions are considered to be critical if there is reasonable likelihood that materially different amounts could have been reported under different conditions, or if different assumptions had been used. We evaluate our estimates and assumptions on a regular basis. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the reported amounts in our unaudited condensed consolidated financial statements that are not readily apparent from other sources. Actual results may differ from these estimates and assumptions used in preparation of our unaudited condensed consolidated financial statements. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the 2024 Form 10-K for additional information.