Antero Midstream (AM) Q4 2023 earnings summary

Executive summary

• FY 2023 adjusted EBITDA was $989.2 million, up 10% YoY; free cash flow was $587.0 million before dividends and $155.2 million after dividends.

• 2024 guidance targets higher adjusted EBITDA, lower capital spending, and year-end leverage of 3.0x or lower.

Financial highlights

• Q4 revenue was $260 million, operating income $156 million, and net income $100 million, or $0.21 per diluted share, up 24% YoY per share.

• Q4 adjusted net income was $114 million, or $0.24 per diluted share, up 20% YoY per share.

• Q4 adjusted EBITDA was $254 million, up 10% YoY; capital expenditures were $46 million, down 27%, and free cash flow after dividends was $48 million vs. $8 million.

• FY 2023 net income was $371.8 million; adjusted EBITDA was $989.2 million, at the high end of guidance, and capital expenditures were $185 million, at the lower end of guidance.

• 2024 guidance: net income $405–$445 million, adjusted net income $460–$500 million, and adjusted EBITDA $1,020–$1,060 million.

Outlook and guidance

• 2024 adjusted EBITDA guidance midpoint of $1.04 billion is up 5% YoY; capital expenditure guidance of $150–$170 million is down 14% at midpoint.

• 2024 free cash flow guidance is $670–$710 million before dividends and $235–$275 million after dividends, assuming $435 million of dividends, or $0.90 per share.

• Adjusted EBITDA growth drivers include expiry of the low-pressure gathering fee rebate, inflation adjustments to fixed fees, and flat-to-low-single-digit throughput growth.

• Guidance includes $130–$140 million of distributions from the MPLX joint venture and Stonewall Gathering; interest expense is forecast at $185–$195 million.

• Fresh water delivery is expected to service 52–57 wells with average lateral length of ~16,000 feet; 60%–65% of capital spending is expected in Q2 and Q3.