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What changed in Antero Midstream Corp's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Antero Midstream Corp's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+128 added−161 removedSource: 10-K (2024-02-14) vs 10-K (2023-02-15)

Top changes in Antero Midstream Corp's 2023 10-K

128 paragraphs added · 161 removed · 91 edited across 3 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe cannot, however, assure you that this insurance will be adequate to protect us from all material expenses related to potential future claims for personal and property damage or that these levels of insurance will be available in the future at economical prices. 38 ​ Table of Contents Veolia The Company is currently involved in a consolidated lawsuit with Veolia Water Technologies, Inc.
Biggest changeWe cannot, however, assure you that this insurance will be adequate to protect us from all material expenses related to potential future claims for personal and property damage or that these levels of insurance will be available in the future at economical prices. See Note 15—Contingencies to the consolidated financial statements for additional information.
Removed
(“Veolia”) relating to the Clearwater Facility. On March 13, 2020, Antero Treatment, a wholly owned subsidiary of the Company, filed suit against Veolia in the district court of Denver County, Colorado, asserting claims of fraud, breach of contract and other related claims.
Removed
Antero Treatment alleges that Veolia failed to meet its contractual obligations to design and build a “turnkey” wastewater disposal facility under a Design/Build Agreement dated August 18, 2015 (the “DBA”), and that Veolia fraudulently concealed certain miscalculations and design flaws during contract negotiations and continued to conceal and fraudulently misrepresent the impact of certain design changes post-execution of the DBA.
Removed
On March 13, 2020, Veolia filed a separate suit against the Company, Antero Resources, and certain of the Company’s wholly owned subsidiaries (collectively, the “Antero Defendants”) in Denver County, Colorado. In its lawsuit, Veolia asserted breach of contract and equitable claims against the Antero Defendants for alleged failures under the DBA.
Removed
Veolia’s suit was consolidated into the action filed by Antero Treatment. Veolia and the Antero Defendants each filed partial motions to dismiss and motions for summary judgment directed at certain claims asserted by the opposing party. A bench trial on the remaining claims was held from January 24 through February 10, 2022 and concluded on February 24, 2022.
Removed
At trial, Antero Treatment sought damages from Veolia of approximately $450 million, which represents the Company’s out-of-pocket costs associated with the Clearwater Facility project. In the alternative, Antero Treatment sought damages related to multiple breaches of the DBA, totaling approximately $370 million.
Removed
Also, at trial, Veolia sought monetary damages of approximately $118 million, including alleged delay and extra-contractual costs and a contract balance relating to an allegation that Antero Defendants improperly terminated the DBA.
Removed
On January 3, 2023, the Court found that Antero Treatment had prevailed on its claims for breach of contract and fraud, and awarded approximately $242 million in damages to Antero Treatment, plus pre- and post-judgment interest and reasonable costs and attorneys’ fees. The Court also found in Antero Defendants’ favor on all of Veolia’s affirmative claims.
Removed
On January 27, 2023 the Court entered judgment in favor of Antero Treatment in the amount of $309,183,975 in damages, which includes pre-judgment interest. Antero was also awarded costs and attorneys’ fees, the amount of which will be determined in separate proceedings. The judgment remains subject to appeal and applicable post-judgment proceedings.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeAs of December 31, 2022, there were dividends in the amount of $69 thousand accumulated in arrears on our Series A Preferred Stock.
Biggest changeAs of December 31, 2023, there were dividends in the amount of $68,750 accumulated in arrears on our Series A Preferred Stock. The amount and timing of future payment of cash dividends on our common stock, if any, is within the discretion of the Board and will depend on our earnings, capital requirements, financial condition and other relevant factors.
We believe the AMNA Index is meaningful because it is an independent, objective view of the performance of similarly-sized midstream energy companies. ​ 40 ​ Table of Contents ​ The information in this Form 10-K appearing under the heading “Stock Performance Graph” is being “furnished” pursuant to Item 2.01(e) of Regulation S-K under the Securities Act and shall not be deemed to be “soliciting material” or “filed” with the SEC or subject to Regulation 14A or 14C, other than as provided in Item 2.01(e) of Regulation S-K, or to the liabilities of Section 18 of the Exchange Act and shall not be deemed incorporated by reference into any filing under the Securities Act of the Exchange Act except to the extent that we specifically request that it be treated as such.
We believe the AMNA Index is meaningful because it is an independent, objective view of the performance of similarly-sized midstream energy companies. ​ The information in this Form 10-K appearing under the heading “Stock Performance Graph” is being “furnished” pursuant to Item 2.01(e) of Regulation S-K under the Securities Act and shall not be deemed to be “soliciting material” or “filed” with the SEC or subject to Regulation 14A or 14C, other than as provided in Item 2.01(e) of Regulation S-K, or to the liabilities of Section 18 of the Exchange Act and shall not be deemed incorporated by reference into any filing under the Securities Act of the Exchange Act except to the extent that we specifically request that it be treated as such.
Item 4. Mine Safety Disclosure s Not applicable. ​ ​ ​ 39 ​ Table of Contents PART II Item 5. Marke t for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common Stock We have one class of common equity outstanding, our common stock, par value $0.01 per share.
Item 4. Mine Safety Disclosure s Not applicable. ​ 42 ​ Table of Contents PART II Item 5. Marke t for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common Stock We have one class of common equity outstanding, our common stock, par value $0.01 per share.
Our common stock is listed on the New York Stock Exchange and traded under the symbol “AM.” On February 10, 2023, shares of our common stock were held by 40 holders of record. The number of holders does not include the holders for whom shares of our common stock are held in a “nominee” or “street” name.
Our common stock is listed on the New York Stock Exchange and traded under the symbol “AM.” On February 9, 2024, shares of our common stock were held by 43 holders of record. The number of holders does not include the holders for whom shares of our common stock are held in a “nominee” or “street” name.
Issuer Purchases of Equity Securities The following table sets forth our common stock share purchase activity for each period presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Approximate ​ ​ ​ ​ ​ ​ ​ Total Number of ​ Dollar Value of ​ ​ ​ Total Number ​ Average Price ​ Shares Purchased ​ Shares that May ​ ​ ​ of Shares ​ Paid per ​ as Part of Publicly ​ Yet be Purchased ​ Period ​ Purchased (1) ​ Share ​ Announced Plans (2) ​ Under the Plan ​ October 1, 2022 – October 31, 2022 ​ 11,812 ​ $ 9.79 ​ — ​ $ 149,767,409 ​ November 1, 2022 – November 30, 2022 ​ — ​ ​ — ​ — ​ ​ N/A ​ December 1, 2022 – December 31, 2022 ​ — ​ ​ — ​ — ​ ​ N/A ​ Total ​ 11,812 ​ $ 9.79 ​ — ​ $ 149,767,409 ​ (1) The total number of shares purchased represents shares of our common stock transferred to us in order to satisfy tax withholding obligations incurred upon the vesting of equity awards held by our employees.
Issuer Purchases of Equity Securities The following table sets forth our common stock share purchase activity for each period presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Approximate ​ ​ ​ ​ ​ ​ ​ Total Number of ​ Dollar Value of ​ ​ ​ Total Number ​ Average Price ​ Shares Purchased ​ Shares that May ​ ​ ​ of Shares ​ Paid per ​ as Part of Publicly ​ Yet be Purchased ​ Period ​ Purchased (1) ​ Share ​ Announced Plans ​ Under the Plan (2) ​ October 1, 2023 – October 31, 2023 ​ 11,560 ​ $ 12.47 ​ — ​ ​ — ​ November 1, 2023 – November 30, 2023 ​ — ​ ​ — ​ — ​ ​ — ​ December 1, 2023 – December 31, 2023 ​ — ​ ​ — ​ — ​ ​ — ​ Total ​ 11,560 ​ $ 12.47 ​ — ​ ​ ​ ​ (1) The total number of shares purchased represents shares of our common stock transferred to us in order to satisfy tax withholding obligations incurred upon the vesting of equity awards held by our employees.
The Board also declared a cash dividend of $138 thousand on shares of our Series A Non-Voting Perpetual Preferred Stock, par value $0.01 (the “Series A Preferred Stock”), that was paid on February 14, 2023 in accordance with the terms of the Series A Preferred Stock, which are discussed in Note 12—Equity and Earnings Per Common Share to our consolidated financial statements.
The Board also declared a cash dividend of $137,500 on shares of our Series A Non-Voting Perpetual Preferred Stock, par value $0.01 (the “Series A Preferred Stock”), that was paid on February 14, 2024 in accordance with the terms of the Series A Preferred Stock, which are discussed in Note 12—Equity and Net Income Per Common Share to our consolidated financial statements.
In addition, as of February 10, 2023, Antero Resources and its subsidiaries owned 139,042,345 shares of our common stock, which represented a 29.1% interest in us.
In addition, as of February 9, 2024, Antero Resources and its subsidiaries owned 139,042,345 shares of our common stock, which represented a 29.0% interest in us.
The dividend was paid on February 8, 2023 to stockholders of record as of January 25, 2023.
The dividend was paid on February 7, 2024 to stockholders of record as of January 24, 2024.
Our share repurchase program will be subject to the new 1% excise tax on stock repurchases imposed under the IRA 2022 for all repurchases on or after January 1, 2023. ​ Dividends On January 11, 2023, the Board declared an aggregate cash dividend on the shares of our common stock of $0.2250 per share for the quarter ended December 31, 2022.
(2) As of December 31, 2023, we did not have an authorized share repurchase program. Dividends On January 10, 2024, the Board declared an aggregate cash dividend on the shares of our common stock of $0.2250 per share for the quarter ended December 31, 2023.
The amount and timing of future payment of cash dividends on our common stock, if any, is within the discretion of the Board and will depend on our earnings, capital requirements, financial condition and other relevant factors Stock Performance Graph The graph below shows the cumulative total shareholder return assuming the investment of $100 on December 31, 2017, in each of (i) our predecessor’s, AMGP, common shares through March 12, 2019 and our common stock thereafter (assuming reinvestment of dividends), (ii) the Standard & Poor’s 500 (“S&P 500”) Index and (iii) the Alerian Midstream Energy (“AMNA”) Index.
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. 43 ​ Table of Contents Stock Performance Graph The graph below shows the cumulative total shareholder return assuming the investment of $100 on December 31, 2018, in each of (i) our predecessor’s, Antero Midstream GP LP, common shares through March 12, 2019 and our common stock thereafter (assuming reinvestment of dividends), (ii) the Standard & Poor’s 500 (“S&P 500”) Index and (iii) the Alerian Midstream Energy (“AMNA”) Index.
Removed
(2) In August 2019, the Board authorized a $300 million share repurchase program, which was extended through June 30, 2023 during the first quarter of 2021 . During the three months ended December 31, 2022, we did not make any repurchases under this program.
Added
Share Repurchase Program On February 13, 2024, our Board of Directors 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.
Added
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.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

80 edited+35 added−61 removed45 unchanged
Biggest changeFor a discussion of this measure, including a reconciliation to its most directly comparable financial measure calculated and presented in accordance with GAAP, see “— Non-GAAP Financial Measures ”. ​ 46 ​ Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2022 ​ ​ ​ Gathering and ​ Water ​ ​ ​ Consolidated ​ (in thousands) Processing Handling Unallocated (1) Total ​ Revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue–Antero Resources ​ $ 791,265 ​ ​ 244,770 ​ ​ — ​ ​ 1,036,035 ​ Revenue–third-party ​ ​ — ​ ​ 2,622 ​ ​ — ​ ​ 2,622 ​ Gathering—low pressure fee rebate ​ ​ (48,000) ​ ​ — ​ ​ — ​ ​ (48,000) ​ Amortization of customer relationships ​ ​ (37,086) ​ ​ (33,586) ​ ​ — ​ ​ (70,672) ​ Total revenues ​ ​ 706,179 ​ ​ 213,806 ​ ​ — ​ ​ 919,985 ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Direct operating ​ ​ 75,889 ​ ​ 104,365 ​ ​ — ​ ​ 180,254 ​ General and administrative (excluding equity-based compensation) ​ ​ 24,578 ​ ​ 13,080 ​ ​ 4,813 ​ ​ 42,471 ​ Equity-based compensation ​ ​ 14,394 ​ ​ 4,415 ​ ​ 845 ​ ​ 19,654 ​ Facility idling ​ ​ — ​ ​ 4,166 ​ ​ — ​ ​ 4,166 ​ Depreciation ​ ​ 81,390 ​ ​ 50,372 ​ ​ — ​ ​ 131,762 ​ Impairment of property and equipment ​ ​ 1,130 ​ ​ 2,572 ​ ​ — ​ ​ 3,702 ​ Accretion of asset retirement obligations ​ ​ — ​ ​ 222 ​ ​ — ​ ​ 222 ​ Loss on settlement of asset retirement obligations ​ ​ — ​ ​ 539 ​ ​ — ​ ​ 539 ​ Gain on asset sale ​ ​ (2,120) ​ ​ (131) ​ ​ — ​ ​ (2,251) ​ Total operating expenses ​ ​ 195,261 ​ ​ 179,600 ​ ​ 5,658 ​ ​ 380,519 ​ Operating income ​ ​ 510,918 ​ ​ 34,206 ​ ​ (5,658) ​ ​ 539,466 ​ Other income (expense): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense, net ​ ​ — ​ ​ — ​ ​ (189,948) ​ ​ (189,948) ​ Equity in earnings of unconsolidated affiliates ​ ​ 94,218 ​ ​ — ​ ​ — ​ ​ 94,218 ​ Total other income (expense) ​ ​ 94,218 ​ ​ — ​ ​ (189,948) ​ ​ (95,730) ​ Income before income taxes ​ ​ 605,136 ​ ​ 34,206 ​ ​ (195,606) ​ ​ 443,736 ​ Income tax expense ​ ​ — ​ ​ — ​ ​ (117,494) ​ ​ (117,494) ​ Net income and comprehensive income ​ $ 605,136 ​ ​ 34,206 ​ ​ (313,100) ​ ​ 326,242 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted EBITDA (2) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 884,226 ​ (1) Corporate expenses that are not directly attributable to either the gathering and processing or water handling segments.
Biggest changeYear Ended December 31, 2022 Compared to Year Ended December 31, 2023 The operating results of our reportable segments were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2022 ​ ​ ​ Gathering and ​ Water ​ ​ ​ Consolidated ​ (in thousands) Processing Handling Unallocated (1) Total ​ Revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue–Antero Resources ​ $ 791,265 ​ ​ 244,770 ​ ​ — ​ ​ 1,036,035 ​ Revenue–third-party ​ ​ — ​ ​ 2,622 ​ ​ — ​ ​ 2,622 ​ Gathering—low pressure fee rebate ​ ​ (48,000) ​ ​ — ​ ​ — ​ ​ (48,000) ​ Amortization of customer relationships ​ ​ (37,086) ​ ​ (33,586) ​ ​ — ​ ​ (70,672) ​ Total revenues ​ ​ 706,179 ​ ​ 213,806 ​ ​ — ​ ​ 919,985 ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Direct operating ​ ​ 75,889 ​ ​ 104,365 ​ ​ — ​ ​ 180,254 ​ General and administrative (excluding equity-based compensation) ​ ​ 24,578 ​ ​ 13,080 ​ ​ 4,813 ​ ​ 42,471 ​ Equity-based compensation ​ ​ 14,394 ​ ​ 4,415 ​ ​ 845 ​ ​ 19,654 ​ Facility idling ​ ​ — ​ ​ 4,166 ​ ​ — ​ ​ 4,166 ​ Depreciation ​ ​ 81,390 ​ ​ 50,372 ​ ​ — ​ ​ 131,762 ​ Impairment of property and equipment ​ ​ 1,130 ​ ​ 2,572 ​ ​ — ​ ​ 3,702 ​ Accretion of asset retirement obligations ​ ​ — ​ ​ 222 ​ ​ — ​ ​ 222 ​ Loss on settlement of asset retirement obligations ​ ​ — ​ ​ 539 ​ ​ — ​ ​ 539 ​ Gain on asset sale ​ ​ (2,120) ​ ​ (131) ​ ​ — ​ ​ (2,251) ​ Total operating expenses ​ ​ 195,261 ​ ​ 179,600 ​ ​ 5,658 ​ ​ 380,519 ​ Operating income ​ ​ 510,918 ​ ​ 34,206 ​ ​ (5,658) ​ ​ 539,466 ​ Other income (expense): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense, net ​ ​ — ​ ​ — ​ ​ (189,948) ​ ​ (189,948) ​ Equity in earnings of unconsolidated affiliates ​ ​ 94,218 ​ ​ — ​ ​ — ​ ​ 94,218 ​ Total other income (expense) ​ ​ 94,218 ​ ​ — ​ ​ (189,948) ​ ​ (95,730) ​ Income before income taxes ​ ​ 605,136 ​ ​ 34,206 ​ ​ (195,606) ​ ​ 443,736 ​ Income tax expense ​ ​ — ​ ​ — ​ ​ (117,494) ​ ​ (117,494) ​ Net income and comprehensive income ​ $ 605,136 ​ ​ 34,206 ​ ​ (313,100) ​ ​ 326,242 ​ (1) Corporate expenses that are not directly attributable to either the gathering and processing or water handling segments. 48 ​ Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2023 ​ ​ ​ Gathering and ​ Water ​ ​ ​ Consolidated ​ (in thousands) Processing Handling Unallocated (1) Total ​ Revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue–Antero Resources ​ $ 893,862 ​ ​ 268,667 ​ ​ — ​ ​ 1,162,529 ​ Revenue–third-party ​ ​ — ​ ​ 1,414 ​ ​ — ​ ​ 1,414 ​ Gathering—low pressure fee rebate ​ ​ (51,500) ​ ​ — ​ ​ — ​ ​ (51,500) ​ Amortization of customer relationships ​ ​ (37,086) ​ ​ (33,586) ​ ​ — ​ ​ (70,672) ​ Total revenues ​ ​ 805,276 ​ ​ 236,495 ​ ​ — ​ ​ 1,041,771 ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Direct operating ​ ​ 95,507 ​ ​ 117,658 ​ ​ — ​ ​ 213,165 ​ General and administrative (excluding equity-based compensation) ​ ​ 22,532 ​ ​ 12,497 ​ ​ 4,433 ​ ​ 39,462 ​ Equity-based compensation ​ ​ 23,313 ​ ​ 7,362 ​ ​ 931 ​ ​ 31,606 ​ Facility idling ​ ​ — ​ ​ 2,459 ​ ​ — ​ ​ 2,459 ​ Depreciation ​ ​ 83,409 ​ ​ 52,650 ​ ​ — ​ ​ 136,059 ​ Impairment of property and equipment ​ ​ 133 ​ ​ 13 ​ ​ — ​ ​ 146 ​ Accretion of asset retirement obligations ​ ​ — ​ ​ 177 ​ ​ — ​ ​ 177 ​ Loss on settlement of asset retirement obligations ​ ​ — ​ ​ 805 ​ ​ — ​ ​ 805 ​ Loss (gain) on asset sale ​ ​ 6,039 ​ ​ (9) ​ ​ — ​ ​ 6,030 ​ Total operating expenses ​ ​ 230,933 ​ ​ 193,612 ​ ​ 5,364 ​ ​ 429,909 ​ Operating income ​ ​ 574,343 ​ ​ 42,883 ​ ​ (5,364) ​ ​ 611,862 ​ Other income (expense): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense, net ​ ​ — ​ ​ — ​ ​ (217,245) ​ ​ (217,245) ​ Equity in earnings of unconsolidated affiliates ​ ​ 105,456 ​ ​ — ​ ​ — ​ ​ 105,456 ​ Total other income (expense) ​ ​ 105,456 ​ ​ — ​ ​ (217,245) ​ ​ (111,789) ​ Income before income taxes ​ ​ 679,799 ​ ​ 42,883 ​ ​ (222,609) ​ ​ 500,073 ​ Income tax expense ​ ​ — ​ ​ — ​ ​ (128,287) ​ ​ (128,287) ​ Net income and comprehensive income ​ $ 679,799 ​ ​ 42,883 ​ ​ (350,896) ​ ​ 371,786 ​ (1) Corporate expenses that are not directly attributable to either the gathering and processing or water handling segments. ​ 49 ​ Table of Contents The operating data for Antero Midstream is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ Amount of ​ ​ ​ ​ ​ ​ ​ December 31, ​ Increase ​ Percentage ​ ​ 2022 2023 or Decrease Change ​ Operating Data: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gathering—low pressure (MMcf) ​ ​ 1,088,036 ​ ​ 1,202,510 ​ ​ 114,474 ​ ​ 11 % ​ Compression (MMcf) ​ ​ 1,034,052 ​ ​ 1,186,641 ​ ​ 152,589 ​ ​ 15 % ​ Gathering—high pressure (MMcf) ​ ​ 1,027,459 ​ ​ 1,068,292 ​ ​ 40,833 ​ ​ 4 % ​ Fresh water delivery (MBbl) ​ ​ 37,685 ​ ​ 39,072 ​ ​ 1,387 ​ ​ 4 % ​ Other fluid handling (MBbl) ​ ​ 19,059 ​ ​ 20,084 ​ ​ 1,025 ​ ​ 5 % ​ Wells serviced by fresh water delivery ​ ​ 76 ​ ​ 76 ​ ​ — ​ ​ * ​ ​ Gathering—low pressure (MMcf/d) ​ ​ 2,981 ​ ​ 3,295 ​ ​ 314 ​ ​ 11 % ​ Compression (MMcf/d) ​ ​ 2,833 ​ ​ 3,251 ​ ​ 418 ​ ​ 15 % ​ Gathering—high pressure (MMcf/d) ​ ​ 2,815 ​ ​ 2,927 ​ ​ 112 ​ ​ 4 % ​ Fresh water delivery (MBbl/d) ​ ​ 103 ​ ​ 107 ​ ​ 4 ​ ​ 4 % ​ Other fluid handling (MBbl/d) ​ ​ 52 ​ ​ 55 ​ ​ 3 ​ ​ 6 % ​ Average Realized Fees: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average gathering—low pressure fee ($/Mcf) ​ $ 0.34 ​ ​ 0.35 ​ ​ 0.01 ​ ​ 3 % ​ Average compression fee ($/Mcf) ​ $ 0.21 ​ ​ 0.21 ​ ​ — ​ ​ * ​ ​ Average gathering—high pressure fee ($/Mcf) ​ $ 0.21 ​ ​ 0.21 ​ ​ — ​ ​ * ​ ​ Average fresh water delivery fee ($/Bbl) ​ $ 4.07 ​ ​ 4.21 ​ ​ 0.14 ​ ​ 3 % ​ Joint Venture Operating Data: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Processing—Joint Venture (MMcf) ​ ​ 540,052 ​ ​ 581,785 ​ ​ 41,733 ​ ​ 8 % ​ Fractionation—Joint Venture (MBbl) ​ ​ 13,022 ​ ​ 14,135 ​ ​ 1,113 ​ ​ 9 % ​ Processing—Joint Venture (MMcf/d) ​ ​ 1,480 ​ ​ 1,594 ​ ​ 114 ​ ​ 8 % ​ Fractionation—Joint Venture (MBbl/d) ​ ​ 36 ​ ​ 39 ​ ​ 3 ​ ​ 8 % ​ * Not meaningful or applicable. ​ Revenues.
The difference between our financial statement income tax expense and our current U.S. federal income tax liability is primarily due to the differences in the tax and financial statement treatment of our investment in Antero Midstream Partners. We have recorded deferred income tax expense to the extent our deferred tax liabilities exceed our deferred tax assets.
The difference between our financial statement income tax expense and our current U.S. federal income tax liability is primarily due to the differences in the tax and financial statement treatment of our investment in Antero Midstream Partners. We have recorded deferred income tax expense to the extent our deferred income tax liabilities exceed our deferred income tax assets.
The amount of deferred tax assets considered realizable, however, could change as we generate taxable income or as estimates of future taxable income are reduced. See Note 7 — Income Taxes to our consolidated financial statements for a discussion of our deferred tax position and income tax expense.
The amount of deferred income tax assets considered realizable, however, could change as we generate taxable income or as estimates of future taxable income are reduced. See Note 7—Income Taxes to our consolidated financial statements for a discussion of our deferred income tax position and income tax expense.
SORF Loans bear interest at a rate per annum equal to the rate for SOFR rate loans for three or six months (the “Interest Period”) plus an applicable margin ranging from 150 to 250 basis points (subject to certain exceptions), depending on the leverage ratio then in effect.
SOFR Loans bear interest at a rate per annum equal to the rate for SOFR rate loans for three or six months (the “Interest Period”) plus an applicable margin ranging from 150 to 250 basis points (subject to certain exceptions), depending on the leverage ratio then in effect.
Senior Notes The following table summarizes the material terms of our senior unsecured notes as of December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 Notes ​ 2027 Notes ​ 2028 Notes ​ 2029 Notes ​ Outstanding principal (in thousands) ​ $ 550,000 ​ $ 650,000 ​ $ 650,000 ​ $ 750,000 ​ Interest rate ​ ​ 7.875 % ​ 5.75 % ​ 5.75 % ​ 5.375 % Maturity date ​ ​ May 15, 2026 ​ ​ March 1, 2027 ​ ​ January 15, 2028 ​ ​ June 15, 2029 ​ Interest payment dates ​ ​ May 15, Nov. 15 ​ ​ Mar. 1, Sept. 1 ​ ​ Jan. 15, July 15 ​ ​ Jun. 15, Dec. 15 ​ Make-whole redemption date (1) ​ ​ May 15, 2025 ​ ​ March 1, 2025 ​ ​ January 15, 2026 ​ ​ June 15, 2026 ​ (1) On or after these dates, we may redeem the applicable series of senior notes, in whole or in part, at a redemption price equal to 100% of the principal amount redeemed, together with accrued and unpaid interest up to the redemption date.
Senior Notes The following table summarizes the material terms of our senior unsecured notes as of December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 Notes ​ 2027 Notes ​ 2028 Notes ​ 2029 Notes ​ Outstanding principal (in thousands) ​ $ 550,000 ​ $ 650,000 ​ $ 650,000 ​ $ 750,000 ​ Interest rate ​ ​ 7.875 % ​ 5.75 % ​ 5.75 % ​ 5.375 % Maturity date ​ ​ May 15, 2026 ​ ​ March 1, 2027 ​ ​ January 15, 2028 ​ ​ June 15, 2029 ​ Interest payment dates ​ ​ May 15, Nov. 15 ​ ​ Mar. 1, Sept. 1 ​ ​ Jan. 15, July 15 ​ ​ Jun. 15, Dec. 15 ​ Make-whole redemption date (1) ​ ​ May 15, 2025 ​ ​ March 1, 2025 ​ ​ January 15, 2026 ​ ​ June 15, 2026 ​ (1) On or after these dates, we may redeem the applicable series of senior notes, in whole or in part, at a redemption price equal to 100% of the principal amount redeemed, together with accrued and unpaid interest up to the redemption date.
The Credit Facility also requires us to maintain the following financial ratios (subject to certain exceptions): ● a consolidated interest coverage ratio, which is the ratio of our consolidated EBITDA to its consolidated current interest charges of at least 2.5 to 1.0 at the end of each fiscal quarter; ● a consolidated total leverage ratio, which is the ratio of consolidated debt to consolidated EBITDA, of not more than 5.00 to 1.00 at the end of each fiscal quarter; provided that, at our election (the “Financial Covenant Election”), the consolidated total leverage ratio shall be no more than 5.25 to 1.0; and 52 ​ Table of Contents ● after a Financial Covenant Election, a consolidated senior secured leverage ratio covenant rather than the consolidated total leverage ratio covenant, which is the ratio of consolidated senior secured debt to consolidated EBITDA, of not more than 3.75 to 1.0.
The Credit Facility also requires us to maintain the following financial ratios (subject to certain exceptions): ● a consolidated interest coverage ratio, which is the ratio of our consolidated EBITDA to its consolidated current interest charges of at least 2.5 to 1.0 at the end of each fiscal quarter; ● a consolidated total leverage ratio, which is the ratio of consolidated debt to consolidated EBITDA, of not more than 5.00 to 1.00 at the end of each fiscal quarter; provided that, at our election (the “Financial Covenant Election”), the consolidated total leverage ratio shall be no more than 5.25 to 1.0; and ● after a Financial Covenant Election, a consolidated senior secured leverage ratio covenant rather than the consolidated total leverage ratio covenant, which is the ratio of consolidated senior secured debt to consolidated EBITDA, of not more than 3.75 to 1.0.
ITEM 6. Reserved ​ 41 ​ Table of Contents Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this report.
ITEM 6. Reserved ​ 44 ​ Table of Contents Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this report.
Management’s Discussion and Analysis of Financial Condition and Results of Operations —Capital Resources and Liquidity” in our Annual Report on Form 10-K for the year ended December 31, 2021 for a discussion of the cash flows for the year ended December 31, 2020 compared to the year ended December 31, 2021.
Management’s Discussion and Analysis of Financial Condition and Results of Operations —Capital Resources and Liquidity” in our Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of the cash flows for the year ended December 31, 2021 compared to the year ended December 31, 2022.
Our interest expense also includes amortization of deferred financing costs incurred in connection with our revolving credit facility and senior notes and amortization of senior notes premiums. See Note 8 — Long-Term Debt to our consolidated financial statements and “ —Capital Resources and Liquidity—Debt Agreements” for additional information on our debt agreements. ● Income tax expense .
Our interest expense also includes amortization of deferred financing costs incurred in connection with our revolving credit facility and senior notes and amortization of senior notes premiums. See Note 8—Long-Term Debt to our consolidated financial statements and “—Capital Resources and Liquidity—Debt Agreements” for additional information on our debt agreements. 47 ​ Table of Contents ● Income tax expense .
As a result, we may also defer a significant portion of our budgeted capital expenditures to achieve the desired balance between sources and uses of liquidity and prioritize capital projects that we believe have the highest expected 51 ​ Table of Contents returns and potential to generate consistent cash flows.
As a result, we may also defer a significant portion of our budgeted capital expenditures to achieve the desired balance between sources and uses of liquidity and prioritize capital projects that we believe have the highest expected returns and potential to generate consistent cash flows.
Our other fluid handling services include wastewater handling, blending and high-rate transfer services. For other fluid handling services provided by us, we charge Antero Resources a cost of service fee . For other fluid handling services provided by third-parties, we charge Antero Resources a fee based on our third-party out-of-pocket costs plus 3%.
Our other fluid handling services include wastewater handling, blending and high-rate transfer services. For other fluid handling 46 ​ Table of Contents services provided by us, we charge Antero Resources a cost of service fee . For other fluid handling services provided by third parties, we charge Antero Resources a fee based on our third-party out-of-pocket costs plus 3%.
We have a long-term water services agreement covering Antero Resources’ 553,000 gross acres in West Virginia and Ohio, with a right of first offer on all future areas of operation. The initial term of the water services agreement runs to 2035.
We have a long-term water services agreement covering Antero Resources’ approximately 570,000 gross acres in West Virginia and Ohio, with a right of first offer on all future areas of operation. The initial term of the water services agreement runs to 2035.
We expect that the combination of these capital resources will be adequate to meet our working capital requirements, capital expenditures program, expected quarterly cash dividends and share repurchases under our share repurchases program for at least the next 12 months.
We expect that the combination of these capital resources will be adequate to meet our working capital requirements, capital expenditures program and expected quarterly cash dividends for at least the next 12 months.
As of December 31, 2022, Antero Resources’ drilling inventory consisted of 1,819 gross identified potential horizontal well locations, substantially all of which were on acreage dedicated to us, providing us with significant opportunity for future capital investments as Antero Resources’ drilling program continues. See Note 5—Revenue to the consolidated financial statements for more information on our water services agreement.
As of December 31, 2023, Antero Resources’ drilling inventory consisted of 1,588 gross identified potential horizontal well locations, all of which were on acreage dedicated to us, providing us with significant opportunity for future capital investments as Antero Resources’ drilling program continues. See Note 5—Revenue to the consolidated financial statements for more information on our water services agreement.
Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2022.
Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2023.
Equity-based compensation includes (i) costs allocated to Antero Midstream by Antero Resources for grants made prior to March 12, 2019 pursuant to the Antero Resources Corporation Long-Term Incentive Plan and (ii) costs related to the Antero Midstream Corporation Long-Term Incentive Plan. 44 ​ Table of Contents ● Depreciation.
Equity-based compensation includes (i) costs allocated to Antero Midstream by Antero Resources for grants made prior to March 12, 2019 pursuant to the Antero Resources Corporation Long-Term Incentive Plan and (ii) costs related to the Antero Midstream Corporation Long-Term Incentive Plan. ● Depreciation.
In order to manage the inflation risk currently present in the United States’ economy, the Federal Reserve has utilized monetary policy in the form of interest rate increases in an effort to bring the inflation rate in line with its stated goal of 2% on a long-term basis.
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.
As of December 31, 2022, we had $782 million of borrowings and no letters of credit outstanding under the Credit Facility. We have a choice of borrowing at Adjusted Term SOFR or at the base rate.
As of December 31, 2023, we had $630 million of borrowings and no letters of credit outstanding under the Credit Facility. We have a choice of borrowing at Adjusted Term SOFR or at the base rate.
Impairment of property and equipment expense of $4 million for the year ended December 31, 2022 was primarily due to (i) a write-down of the Clearwater Facility related to the retirement obligation for the facility and (ii) cancelled projects. Loss (gain) on asset sale.
Impairment of property and equipment expense. Impairment of property and equipment expense of $4 million for the year ended December 31, 2022 was primarily due to (i) a write-down of the Clearwater Facility related to the retirement obligation for the facility and (ii) cancelled projects.
Management’s Discussion and Analysis of Financial Condition and Results of Operations —Results of Operations” in our 2021 Annual Report on Form 10-K for a discussion of the results of operations for the year ended December 31, 2020 compared to the year ended December 31, 2021.
Year Ended December 31, 2021 Compared to Year Ended December 31, 2022 See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations —Results of Operations” in our 2022 Annual Report on Form 10-K for a discussion of the results of operations for the year ended December 31, 2021 compared to the year ended December 31, 2022.
As of December 31, 2022, we had $782 million of borrowings and no letters of credit outstanding under the Credit Facility. A 1.0% increase in the Credit Facility interest rate would have resulted in an estimated $6 million increase in interest expense for the year ended December 31, 2022.
As of December 31, 2023, we had $630 million of borrowings and no letters of credit outstanding under the Credit Facility. A 1.0% increase in the Credit Facility interest rate would have resulted in an estimated $8 million increase in interest expense for the year ended December 31, 2023.
During the year ended December 31, 2022, we paid dividends of $0.90 per share, or a total of $433 million, to holders of our common stock, as applicable, and we paid $550 thousand of dividends on our Series A Preferred Stock.
During the year ended December 31, 2023, we paid dividends of $0.90 per share, or a total of $435 million, to holders of our common stock, as applicable, and we paid $550,000 of dividends on our Series A Preferred Stock.
The effectiveness of our internal control over financial reporting as of December 31, 2022 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which appears on page F-2 in this Annual Report on Form 10-K. Item 9B.
The effectiveness of our internal control over financial reporting as of December 31, 2023 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which appears on page F-2 in this Annual Report on Form 10-K. Item 9 B. Other Information None.
Our deferred tax assets result primarily from net operating loss carryforwards. As of December 31, 2022, we had approximately $415 million of U.S. federal NOL carryforwards, and approximately $478 million of state NOL carryforwards. The Company currently considers all of its deferred tax assets, except for those related to charitable contributions, realizable.
Our deferred income tax assets result primarily from net operating loss carryforwards. As of December 31, 2023, we had U.S. federal NOL carryforwards of $428 million and state NOL carryforwards of $496 million. The Company currently considers all of its deferred income tax assets, except for those related to charitable contributions, realizable.
General and administrative expenses (excluding equity-based compensation expense) decreased 16% , from $ 50 million for the year ended December 31, 2021 to $42 million for the year ended December 31, 2022 primarily due to (i) lower legal costs associated with the Veolia legal matter between periods and (ii) lower costs allocated to us from Antero Resources. Equity-based compensation expenses.
General and administrative expenses (excluding equity-based compensation expense) decreased 7% , from $ 42 million for the year ended December 31, 2022 to $39 million for the year ended December 31, 2023 primarily due to lower legal costs associated with the Veolia legal matter between periods and lower costs allocated to us from Antero Resources.
Net cash provided by operating activities was $710 million and $700 million for the years ended December 31, 2021 and 2022, respectively.
Net cash provided by operating activities was $700 million and $779 million for the years ended December 31, 2022 and 2023, respectively.
Financing Activities. Net cash used in financing activities was $477 million and $206 million for the years ended December 31, 2021 and 2022, respectively.
Net cash used in financing activities was $206 million and $596 million for the years ended December 31, 2022 and 2023, respectively.
We were in compliance with the applicable covenants and ratios as of December 31, 2022. See Note 8—Long-Term Debt to the consolidated financial statements for more information on our Credit Facility.
We were in compliance with the applicable covenants and ratios as of December 31, 2023. See Note 8—Long-Term Debt to the consolidated financial statements for more information.
Financial Statements and Supplementary Data The Report of Independent Registered Public Accounting Firm, Consolidated Financial Statements and supplementary financial data required for this Item are set forth beginning on page F-2 of this Annual Report on Form 10-K and are incorporated herein by reference. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable.
Financial Statements and Supplementary Data The Report of Independent Registered Public Accounting Firm, Consolidated Financial Statements and supplementary financial data required for this Item are set forth beginning on page F-2 of this Annual Report on Form 10-K and are incorporated herein by reference. Item 9.
Our water handling operations are substantially dependent upon the number of wells drilled and completed by Antero Resources, as well as Antero Resources’ production. As of December 31, 2022, Antero Resources had disclosed estimated net proved reserves of 17.8 Tcfe, of which 58% was natural gas, 41% were NGLs and 1% was oil.
Our water handling operations are substantially dependent upon the number of wells drilled and completed by Antero Resources, as well as Antero Resources’ production. As of December 31, 2023, Antero Resources had disclosed estimated net proved reserves of 18.1 Tcfe, of which 59% was natural gas, 40% were NGLs and 1% was oil.
If natural gas, NGLs and oil prices decline to levels below acceptable levels or costs increase to levels above acceptable levels, Antero Resources could choose to defer a significant portion of its budgeted capital expenditures until later periods.
Our capital budgets may be adjusted as business conditions warrant. If natural gas, NGLs and oil prices decline to levels below acceptable levels or costs increase to levels above acceptable levels, Antero Resources could choose to defer a significant portion of its budgeted capital expenditures until later periods.
Gain on asset sale of $2 million for the year ended December 31, 2022 primarily relates to (i) the sale of four compressor engines, (ii) reimbursement of certain cancelled projects and (iii) sale of miscellaneous equipment and excess pipe inventory. Interest expense.
Gain on asset sale of $2 million for the year ended December 31, 2022 was primarily due to (i) the sale of four compressor engines, (ii) reimbursement of certain cancelled project costs and (iii) sales of miscellaneous equipment and excess pipe inventory.
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 carrying values of assets and liabilities that are not readily apparent from other sources.
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 consolidated financial statements that are not readily apparent from other sources.
Prior to such date, we may, in certain circumstances, redeem the notes at a redemption price that includes an applicable premium as defined in the indentures to such notes. ​ See Note 8—Long-Term Debt to the consolidated financial statements for more information. Non-GAAP Financial Measures ​ We use Adjusted EBITDA as an important indicator of our performance.
Prior to such date, we may, in certain circumstances, redeem the notes at a redemption price that includes an applicable premium as defined in the indentures to such notes. ​ See Note 8—Long-Term Debt to the consolidated financial statements for more information.
On January 11, 2023, the Board declared a cash dividend on the shares of our common stock of $0.2250 per share for the quarter ended December 31, 2022 paid on February 8, 2023 to stockholders of record as of January 25, 2023.
On January 10, 2024, the Board declared a cash dividend on the shares of our common stock of $0.2250 per share for the quarter ended December 31, 2023. The dividend was paid on February 7, 2024 to stockholders of record as of January 24, 2024.
The term “market risk” refers to the risk of loss arising from adverse changes in commodity prices and interest rates. The disclosures are not meant to be precise indicators of expected future losses, but rather indicators of reasonably possible losses.
The term “market risk” refers to the risk of loss arising from adverse changes in commodity prices and interest rates. The disclosures are not meant to be precise indicators of expected future losses, but rather indicators of reasonably possible losses. This forward-looking information provides indicators of how we view and manage our ongoing market risk exposures.
Certain accounting policies involve judgments and uncertainties to such an extent that 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.
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.
Base rate loans bear interest at a rate per annum equal to the greatest of (i) the agent bank’s reference rate, (ii) the federal funds effective rate plus 50 basis points and (iii) the rate for one month SOFR Rate loans plus 100 basis points, plus an applicable margin ranging from 50 to 150 basis points (subject to certain exceptions) depending on the leverage ratio then in effect.
Base rate loans bear interest at a rate per annum equal to the greatest of (i) the agent bank’s reference rate, (ii) the federal funds effective rate plus 50 basis points and (iii) the rate for one month SOFR Rate loans plus 100 basis points, plus an applicable margin ranging from 50 to 150 basis points (subject to certain exceptions) depending on the leverage ratio then in effect. 53 ​ Table of Contents The Credit Facility is guaranteed by our subsidiaries and is secured by mortgages on substantially all of Antero Midstream Partners’ and its subsidiaries’ properties.
This forward-looking information provides indicators of how we view and manage our ongoing market risk exposures. 55 ​ Table of Contents Commodity Price Risk Our gathering and compression and water services agreements with Antero Resources provide for fixed-fee and cost of service fee structures, and we intend to continue to pursue additional fixed- fee or cost of service fee opportunities with Antero Resources and third parties in order to avoid direct commodity price exposure.
Commodity Price Risk Our gathering and compression and water services agreements with Antero Resources provide for fixed-fee and cost of service fee structures, and we intend to continue to pursue additional fixed- fee or cost of service fee opportunities with Antero Resources and third parties in order to avoid direct commodity price exposure.
Compression volumes increased primarily due to additional wells connected to our system since December 31, 2021 and 12 compressor stations that were acquired during the fourth quarter of 2022. ● High pressure gathering revenue increased $4 million period over period due to a 3% increase to the high pressure gathering rate as a result of the annual CPI-based adjustment partially offset by decreased throughput volumes of 10 Bcf, or 26 MMcf /d.
Compression volumes increased between periods primarily due to the 86 additional wells connected to our system since December 31, 2022 and 12 compressor stations and 253 wells that were connected to the assets we acquired during the fourth quarter of 2022. ● High pressure gathering revenue increased $15 million period over period primarily due to increased throughput volumes of 41 Bcf, or 112 MMcf /d, and an increased high pressure gathering rate as a result of an annual CPI-based adjustment.
Total revenues increased by $22 million, from $898 million for the year ended December 31, 2021, to $920 million for the year ended December 31, 2022. Amortization of customer relationships was $71 million during the years ended December 31, 2021 and 2022.
Total revenues increased by $122 million, from $920 million for the year ended December 31, 2022, to $1,042 million for the year ended December 31, 2023. Total revenues included amortization of customer relationships of $71 million during each of the years ended December 31, 2022 and 2023.
Direct operating expenses. Total direct operating expenses increased by 15% , from $ 157 million for the year ended December 31, 2021 to $180 million for the year ended December 31, 2022.
Direct operating expenses. Direct operating expenses increased by 18% , from $ 180 million for the year ended December 31, 2022 to $213 million for the year ended December 31, 2023.
Director s, Executive Officers, and Corporate Governance Pursuant to General Instruction G(3) to Form 10-K, we incorporate by reference into this Item the information to be disclosed in our definitive proxy statement for our 2023 Annual Meeting of Stockholders.
Item 9C. disclosure regarding foreign jurisdictions that prevent inspections Not applicable. 57 ​ Table of Contents PART III Item 10. Director s, Executive Officers, and Corporate Governance Pursuant to General Instruction G(3) to Form 10-K, we incorporate by reference into this Item the information to be disclosed in our definitive proxy statement for our 2024 Annual Meeting of Stockholders.
For example, the CPI for all urban consumers increased 8% from year ended December 31, 2021 to year ended December 31, 2022 as compared to the Federal Reserve’s stated goal of 2%. See “—Capital Resources and Liquidity—Capital Investment” for more information.
For example, CPI for all urban consumers increased 8% from the year ended December 31, 2021 to the year ended December 31, 2022 and an additional 4% from the year ended December 31, 2022 to the year ended December 31, 2023 as compared to the Federal Reserve’s stated goal of 2%.
However, to the extent Antero Resources maintains a maintenance capital program as it has done in recent years, we do not expect to experience substantial variability in our throughput volumes resulting from volatile commodity prices. 42 ​ Table of Contents Growth Incentive Fee Program with Antero Resources Our 2019 gathering and compression agreement with Antero Resources includes a growth incentive fee program whereby we agreed to provide quarterly fee rebates to Antero Resources through December 31, 2023, contingent upon Antero Resources achieving volumetric growth targets on low pressure gathering.
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. 45 ​ Table of Contents Growth Incentive Fee Program with Antero Resources Our 2019 gathering and compression agreement with Antero Resources included a growth incentive fee program whereby we agreed to provide quarterly fee rebates to Antero Resources through December 31, 2023, contingent upon Antero Resources achieving volumetric growth targets on low pressure gathering.
The Board also declared an aggregate cash dividend of $138 thousand on our Series A Preferred Stock that was paid on February 14, 2023. As of December 31, 2022, there were dividends in the amount of $69 thousand accumulated in arrears on our Series A Preferred Stock.
Our Board also declared a cash dividend of $137,500 on our Series A Preferred Stock that was paid on February 14, 2024 in accordance with their terms. As of December 31, 2023, there were dividends in the amount of $68,750 accumulated in arrears on our Series A Preferred Stock.
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, fractionation and high-pressure gas gathering services in the Appalachian Basin.
Results of Operations 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.
Gathering and processing revenues decreased by 1%, from $713 million for the year ended December 31, 2021 to $706 million for the year ended December 31, 2022. Water handling revenues increased by 15%, from $185 million for the year ended December 31, 2021 to $214 million for the year ended December 31, 2022.
Gathering and processing revenues increased by 14%, from $706 million for the year ended December 31, 2022 to $805 million for the year ended December 31, 2023. Water handling revenues increased by 11%, from $214 million for the year ended December 31, 2022 to $237 million for the year ended December 31, 2023.
Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2022 at a reasonable assurance level. 56 ​ Table of Contents Changes in Internal Control Over Financial Reporting There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Changes in Internal Control Over Financial Reporting There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Equity in earnings in unconsolidated affiliates increased by 4%, from $90 million for the year ended December 31, 2021 to $94 million for the year ended December 31, 2022 primarily due to higher Joint Venture earnings as a result of annual CPI-based adjustments for processing and fractionation fees, partially offset by lower processed volumes at the Joint Venture between periods.
Equity in earnings in unconsolidated affiliates increased by 12%, from $94 million for the year ended December 31, 2022 to $105 million for the year ended December 31, 2023 primarily due to increased processing and fractionation volumes and higher processing and fractionation fees as a result of annual CPI-based adjustments. 51 ​ Table of Contents Income tax expense.
Low pressure gathering volumes increased between periods primarily due to 327 additional wells being connected to our system since December 31, 2021 , of which 253 wells are from our asset acquisitions that closed during the fourth quarter of 2022. ● Compression revenue increased $11 million period over period due to a 3% increase in the compression rate as a result of the annual CPI-based adjustment, as well as increased throughput volumes of 28 Bcf, or 76 MMcf/d and our asset acquisitions during the fourth quarter of 2022.
Low pressure gathering volumes increased between periods primarily due to 86 additional wells being connected to our system since December 31, 2022 and 253 wells that were connected to the assets we acquired during the fourth quarter of 2022. ● Compression revenue increased $37 million period over period due to increased throughput volumes of 153 Bcf, or 418 MMcf/d, and higher compression rates as a result of the annual CPI-based adjustments.
As of December 31, 2022, we did not have any off-balance sheet arrangements. ​ ​ 50 ​ Table of Contents Cash Flows The following table and discussion presents a summary of our net cash provided by (used in) operating activities, investing activities and financing activities for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ (in thousands) 2021 2022 ​ Net cash provided by operating activities ​ $ 709,752 ​ ​ 699,604 ​ Net cash used in investing activities ​ ​ (233,242) ​ ​ (493,826) ​ Net cash used in financing activities ​ ​ (477,150) ​ ​ (205,778) ​ Net decrease in cash and cash equivalents ​ $ (640) ​ ​ — ​ ​ Year Ended December 31, 2021 Compared to Year Ended December 31, 2022 Operating Activities.
As of December 31, 2023, we did not have any off-balance sheet arrangements. ​ Cash Flows The following table summarizes our cash flows for the years ended December 31, 2022 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ (in thousands) 2022 2023 ​ Net cash provided by operating activities ​ $ 699,604 ​ ​ 779,063 ​ Net cash used in investing activities ​ ​ (493,826) ​ ​ (183,206) ​ Net cash used in financing activities ​ ​ (205,778) ​ ​ (595,791) ​ Net increase in cash and cash equivalents ​ $ — ​ ​ 66 ​ ​ Year Ended December 31, 2022 Compared to Year Ended December 31, 2023 Operating Activities.
Gathering and processing direct operating expenses increased 15% from $ 66 million for the year ended December 31, 2021 to $76 million for the year ended December 31, 2022 primarily due to (i) higher throughput volumes between periods, (ii) 12 acquired compressors that came online during the fourth quarter of 2022 and (iii) higher chemical, fuel, labor and heavy maintenance expense.
Gathering and processing direct operating expenses increased 26% from $ 76 million for the year ended December 31, 2022 to $96 million for the year ended December 31, 2023 primarily due to 12 compressor stations that were acquired during the fourth quarter of 2022 and increased heavy maintenance expense between periods.
Equity-based compensation expenses increased by 45% from $14 million to $20 million for the years ended December 31, 2021 and 2022, respectively, primarily due to an increase in the annual equity awards granted during the year ended December 31, 2022 compared to prior years. Facility idling expenses.
Equity-based compensation expenses increased by 61% from $20 million for the year ended December 31, 2022 to $32 million for the year ended December 31, 2023 primarily due to an increase in the annual equity awards granted during the years ended December 31, 2022 and 2023 as compared to prior years, which were temporarily and significantly reduced during 2020 and supplemented by our cash awards program.
These fluctuations primarily resulted from the following: Gathering and Processing ● Low pressure gathering revenue decreased $22 million period over period primarily due to $36 million in higher fee rebates to Antero Resources during the year ended December 31, 2022, partially offset by a 3% increase in the low pressure gathering rate as a result of the annual CPI-based adjustment and by increased throughput volumes of 28 Bcf, or 76 MMcf/d.
These fluctuations primarily resulted from the following: Gathering and Processing ● Low pressure gathering revenue increased $47 million period over period primarily due to increased throughput volumes of 114 Bcf, or 314 MMcf/d, and higher low pressure gathering rates as a result of annual CPI-based adjustments, partially offset by higher fee rebates of $4 million between periods.
Significant assumptions used in the cash flow forecasts include future net operating margins, future volumes, discount rates and future capital requirements.
Significant assumptions used in the cash flow forecasts include future net operating margins, future volumes, discount rates and future capital requirements. Determination of depreciation expense requires judgment regarding the estimated useful lives and salvage values of property and equipment.
The increase in cash flows used in investing activities between periods was primarily due to (i) gathering systems and facilities asset acquisitions of $217 million during the year ended December 31, 2022, (ii) an increase in capital spending for expansion of our gathering systems of $41 million and (iii) an increase in capital spending for expansion of our water handling systems of $25 million, partially offset by a $17 million return of capital distribution from the Joint Venture for a processing plant held in inventory that was sold by the Joint Venture during 2022 and an increase in asset sale proceeds of $4 million between periods.
Net cash flows used in investing activities decreased by $311 million from $494 million for the year ended December 31, 2022 to $183 million for the year ended December 31, 2023 primarily due to decreased asset acquisitions of $217 million and capital spending for our gathering systems and facilities, water handling systems and other assets of $115 million, partially offset by decreased return of investment in the Joint Venture of $17 million and asset sale proceeds of $5 million during the year ended December 31, 2022.
In addition, there is a natural decline in production from existing wells that are connected to our gathering systems.
Our gathering and compression operations are substantially dependent upon natural gas production from Antero Resources’ upstream activity in its areas of operation. In addition, there is a natural decline in production from existing wells that are connected to our gathering systems.
We receive a low pressure gathering fee per Mcf, a compression fee per Mcf and a high-pressure gathering fee per Mcf, as applicable, substantially all of which are subject to annual CPI-based adjustments. Additionally, our gathering and compression agreements provide for certain minimum volume commitments for gathering and compression services that run to 2032.
Our gathering and processing revenues are driven by the volumes of natural gas we gather and compress. We receive a low pressure gathering fee per Mcf, a compression fee per Mcf and a high pressure gathering fee per Mcf, as applicable, substantially all of which are subject to annual CPI-based adjustments.
Water Handling ● Fresh water delivery revenue increased $16 million period over period primarily due to increased fresh water delivery volumes of 3 MMBbl , or 8 MBbl/d and a 3% increase to the fresh water delivery rate as a result of the annual CPI-based adjustment. ● Other fluid handling services revenue increased $13 million period over period primarily due to increased costs, partially due to inflationary pressures that impact our cost plus 3% and cost of service rates, and increased other fluid handling volumes of 2 MMBbl, or 6 MBbl/d.
Fresh water delivery volumes increased between periods due to higher well completions by Antero Resources. ● Other fluid handling services revenue increased $12 million period over period primarily due to increased costs, partially due to inflationary pressures that impact our cost plus 3% and cost of service rates during the year ended December 31, 2023, and higher other fluid handling volumes of 1 MMBbl, or 3 MBbl/d, between periods.
Pursuant to our long-term contracts with Antero Resources, we have secured long-term dedications covering substantially all of Antero Resources’ current and future acreage for gathering and compression services. Our gathering and compression operations are substantially dependent upon natural gas production from Antero Resources’ upstream activity in its areas of operation.
Additionally, our gathering and compression agreements provide for certain minimum volume commitments for gathering and compression services that run to 2032. Pursuant to our long-term contracts with Antero Resources, we have secured long-term dedications covering substantially all of Antero Resources’ current and future acreage for gathering and compression services.
Debt Agreements Credit Facility Antero Midstream Partners, as borrower (the “Borrower”), an indirect, wholly owned subsidiary of Antero Midstream Corporation, has a senior secured revolving credit facility with a consortium of banks. On October 26, 2021, we entered into an amended and restated senior secured revolving credit facility, the Credit Facility.
Additionally, we monitor our existing assets and look for opportunities to reuse or otherwise repurpose assets in an effort to optimize our capital efficiency. Debt Agreements Credit Facility Antero Midstream Partners, as borrower (the “Borrower”), an indirect, wholly owned subsidiary of Antero Midstream Corporation, has a senior secured revolving credit facility with a consortium of banks.
Water handling direct operating expenses increased by 15% , from $ 91 million for the year ended December 31, 2021 to $104 million for the year ended December 31, 2022 primarily due to increased water blending locations, trucking rates, labor costs and Utica fresh water deliveries between periods. General and administrative (excluding equity-based compensation) expenses.
Water handling direct operating expenses increased by 13% , from $ 104 million for the year ended December 31, 2022 to $117 million for the year ended December 31, 2023 primarily due to higher wastewater trucking expenses, an increased number of locations connected to our water blending system and higher fresh water volumes between periods.
If the carrying values of the assets are deemed not recoverable, the carrying values are reduced to the estimated fair values, which are calculated using the expected present value of future cash flows method. Significant assumptions used in the cash flow forecasts include future net operating margins, future volumes, discount rates and future capital requirements.
Generally, the basis for making such assessments is undiscounted future cash flow projections for the assets being assessed. If the carrying values of the assets are deemed not recoverable, the carrying values are reduced to the estimated fair values, which are calculated using the expected present value of future cash flows method.
Loss on asset sale of $4 million for the year ended December 31, 2021 primarily relates to the sale of excess pipe inventory.
Loss on asset sale of $6 million for the year ended December 31, 2023 was primarily due to sales of miscellaneous equipment. Interest expense.
Sources of Our Revenues The following items are the primary components of our revenues: ● Gathering and Processing. Our low pressure gathering, compression and high pressure gathering services support production operations for Antero Resources. Our gathering and processing revenues are driven by the volumes of 43 ​ Table of Contents natural gas we gather and compress.
These economic variables are beyond our control and may adversely impact our business, financial condition, results of operations and future cash flows. Sources of Our Revenues The following items are the primary components of our revenues: ● Gathering and Processing. Our low pressure gathering, compression and high pressure gathering services support production operations for Antero Resources.
The global economy also continues to be impacted by the effects of the COVID-19 pandemic and global events, among other factors. 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.
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.
Market Conditions and Business Trends Commodity Markets Prices for natural gas, NGLs and oil increased significantly during the year ended December 31, 2022 as compared to the year ended December 31, 2021.
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. Market Conditions and Business Trends Commodity Markets Prices for natural gas, NGLs and oil decreased significantly during the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Overview We are a growth-oriented midstream energy company formed to own, operate and develop midstream energy assets to primarily service Antero Resources’ production and completion activity.
Risk Factors.” and the section entitled “Cautionary Statement Regarding Forward-Looking Statements.” We do not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law. ​ Overview We are a growth-oriented midstream energy company formed to own, operate and develop midstream energy assets to primarily service Antero Resources’ production and completion activity.
Net cash used in financing activities for the year ended December 31, 2022 included net borrowings of $235 million on our Credit Facility and total dividends to our common stockholders and preferred stockholders of $433 million Year Ended December 31, 2020 Compared to Year Ended December 31, 2021 See “Item 7.
The increase in cash flows used in financing activities between periods was primarily due to net repayments on our Credit Facility of $152 million during the year ended December 31, 2023, as compared to net borrowings on our Credit Facility of $235 million during the year ended December 31, 2022.
Facility idling expenses remained consistent at $4 million for each of the years ended December 31, 2021 and 2022. Depreciation expense. Total depreciation expense increased by 21% from $109 million for the year ended December 31, 2021 to $132 million for the year ended December 31, 2022.
Depreciation expense increased by 3% from $132 million for the year ended December 31, 2022 to $136 million for the year ended December 31, 2023.
New Accounting Pronouncements See Note 2—Summary of Significant Accounting Policies to our consolidated financial statements for information on new accounting pronouncements. Item 7A. Quantitative and Qualitative Disclosures About Market Risk The primary objective of the following information is to provide forward- looking quantitative and qualitative information about our potential exposure to market risk.
These assumptions affect deferred income tax liability and income tax expense and, if changed, could have a material effect on the Company's financial position and results of operations. Item 7A. Quantitative and Qualitative Disclosures About Market Risk The primary objective of the following information is to provide forward- looking quantitative and qualitative information about our potential exposure to market risk.
Interest expense increased by 8%, from $175 million for the year ended December 31, 2021 to $190 million for the year ended December 31, 2022 primarily due to (i) the issuance of $750 million of 5.375% senior notes due June 15, 2029 (the “2029 Notes”) on June 8, 2021, (ii) increased interest rates on our Credit Facility due to higher benchmark rates during the year ended December 31, 2022, and (iii) increased borrowings on our Credit Facility due to our asset acquisitions, partially offset by the redemption of all $650 million of the 2024 Notes on June 8, 2021. 49 ​ Table of Contents Equity in earnings of unconsolidated affiliates.
Interest expense increased by 14%, from $190 million for the year ended December 31, 2022 to $217 million for the year ended December 31, 2023 primarily due to increased interest rates on our Credit Facility due to higher benchmark rates during the year ended December 31, 2023 and higher average borrowings on our Credit Facility between periods as a result of our asset acquisitions during the fourth quarter of 2022.
We evaluate our long-lived assets for impairment when events or changes in circumstances indicate that the related carrying values of the assets may not be recoverable. Generally, the basis for making such assessments is undiscounted future cash flow projections for the assets being assessed.
Actual results may differ from these estimates and assumptions used in preparation of our financial statements. Property and Equipment Property and equipment primarily consists of gathering pipelines, compressor stations and the water handling assets. We evaluate our long-lived assets for impairment when events or changes in circumstances indicate that the related carrying values of the assets may not be recoverable.
There was no loss on early extinguishment of debt for the year ended December 31, 2022. Income tax expense. Income tax expense remained consistent for the years ended December 31, 2021 and 2022 at $117 million, which reflects effective tax rates of 26.1% and 26.5%, respectively. Net income.
Income tax expense increased by 9% from $117 million for the year ended December 31, 2022 to $128 million for the year ended December 31, 2023, which reflects effective tax rates of 26.5% and 25.7%, respectively. This income tax expense increase was primarily due to higher pre-tax income between periods.
The decrease in net cash provided by operating activities between periods was primarily the due to (i) $16 million in income tax refunds received during the year ended December 31, 2021 from certain net operating loss carryback provisions included in the Coronavirus Aid, Relief, and Economic Security Act that was enacted in March 2020, (ii) higher direct operating costs, (iii) lower gathering and processing revenues, (iv) higher asset retirement obligation settlement costs and (v) higher interest expense payments, partially offset by higher water handling revenues and lower general and administrative costs, excluding equity-based compensation.
The increase in cash flows provided by operations between periods was primarily due to (i) higher revenues in the gathering and processing and water handling segments, (ii) higher distributions from unconsolidated affiliates and (iii) a $10 million tax refund received during the year ended December 31, 2023, partially offset by higher direct operating and interest expenses and changes in working capital between periods.
Antero Resources earned $12 million in fee rebates during the year ended December 31, 2021 by achieving the quarterly volumetric target during the fourth quarter of 2021. Economic Indicators The economy is experiencing elevated inflation levels as a result of global supply and demand imbalances, where global demand continues to outpace current supplies.
Economic Indicators 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 2023.
However, neither our nor Antero Resources’ supply chain has experienced any significant interruptions due to the COVID-19 pandemic or global supply and demand imbalances. Inflationary pressures and supply chain disruptions could result in further increases to our operating and capital costs that are not fixed.
Inflationary pressures and supply chain disruptions could result in further increases to our operating and capital costs that are not fixed. However, our gathering and compression and water agreements provide for annual CPI-based adjustments that mitigate a portion of such inflationary pressures.
This increase is primarily due to (i) $16 million for a phased early retirement of an underutilized compressor station, (ii) $6 million related to gathering and processing system assets placed in service during 2022 and (iii) $1 million for our asset acquisitions during the fourth quarter of 2022.
This increase was primarily due to $4 million for our assets acquired during the fourth quarter of 2022 and $3 million related to assets placed in service between periods, partially offset by $3 million of lower expense related to our program to repurpose underutilized compressor units to expand existing or construct new compressor stations between periods.
The high pressure gathering volumes decreased period over period primarily as a result of higher production from Antero Resources that was subject to a third-party high pressure gathering acreage dedication, partially offset by 74 new wells connected to our high pressure system since December 31, 2021.
The high pressure gathering volumes increased period over period primarily due to 86 additional wells being connected to our high pressure system since December 31, 2022.

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