Intrinsic value of Antero Midstream Partners - AM

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$31.75

  Intrinsic Value

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  Value-price divergence*

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$31.75

 
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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of AM stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 5.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  51.42
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  586
  619
  957
  1,431
  2,076
  2,929
  4,026
  5,405
  7,096
  9,131
  11,534
  14,322
  17,510
  21,106
  25,112
  29,527
  34,347
  39,565
  45,172
  51,160
  57,519
  64,241
  71,319
  78,748
  86,524
  94,646
  103,116
  111,936
  121,113
  130,654
  140,572
Variable operating expenses, $m
 
  307
  475
  710
  1,030
  1,453
  1,997
  2,681
  3,520
  4,529
  5,721
  7,104
  8,685
  10,469
  12,456
  14,645
  17,036
  19,624
  22,405
  25,375
  28,529
  31,864
  35,374
  39,059
  42,916
  46,945
  51,145
  55,520
  60,072
  64,805
  69,724
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  328
  307
  475
  710
  1,030
  1,453
  1,997
  2,681
  3,520
  4,529
  5,721
  7,104
  8,685
  10,469
  12,456
  14,645
  17,036
  19,624
  22,405
  25,375
  28,529
  31,864
  35,374
  39,059
  42,916
  46,945
  51,145
  55,520
  60,072
  64,805
  69,724
Operating income, $m
  258
  312
  482
  721
  1,046
  1,476
  2,029
  2,724
  3,577
  4,602
  5,813
  7,218
  8,825
  10,637
  12,656
  14,882
  17,311
  19,941
  22,767
  25,785
  28,990
  32,378
  35,945
  39,689
  43,608
  47,702
  51,970
  56,416
  61,041
  65,850
  70,848
EBITDA, $m
  358
  451
  697
  1,042
  1,513
  2,134
  2,934
  3,938
  5,171
  6,653
  8,404
  10,436
  12,758
  15,378
  18,297
  21,514
  25,026
  28,828
  32,913
  37,276
  41,910
  46,807
  51,965
  57,377
  63,043
  68,961
  75,132
  81,559
  88,245
  95,197
  102,423
Interest expense (income), $m
  13
  22
  41
  68
  107
  159
  228
  317
  429
  567
  732
  927
  1,154
  1,413
  1,705
  2,031
  2,389
  2,781
  3,205
  3,661
  4,147
  4,664
  5,210
  5,785
  6,389
  7,020
  7,680
  8,368
  9,085
  9,831
  10,606
Earnings before tax, $m
  237
  290
  442
  653
  940
  1,317
  1,801
  2,406
  3,147
  4,035
  5,081
  6,291
  7,671
  9,224
  10,951
  12,851
  14,922
  17,160
  19,562
  22,124
  24,843
  27,714
  30,735
  33,904
  37,220
  40,681
  44,290
  48,047
  51,956
  56,019
  60,242
Tax expense, $m
  0
  78
  119
  176
  254
  356
  486
  650
  850
  1,090
  1,372
  1,699
  2,071
  2,491
  2,957
  3,470
  4,029
  4,633
  5,282
  5,974
  6,707
  7,483
  8,298
  9,154
  10,049
  10,984
  11,958
  12,973
  14,028
  15,125
  16,265
Net income, $m
  237
  212
  322
  477
  686
  961
  1,315
  1,757
  2,297
  2,946
  3,709
  4,592
  5,600
  6,734
  7,994
  9,381
  10,893
  12,527
  14,280
  16,151
  18,135
  20,231
  22,437
  24,750
  27,170
  29,697
  32,332
  35,074
  37,928
  40,894
  43,977

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  14
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  2,350
  3,159
  4,881
  7,299
  10,591
  14,943
  20,543
  27,574
  36,207
  46,589
  58,846
  73,073
  89,339
  107,683
  128,122
  150,649
  175,241
  201,862
  230,471
  261,021
  293,465
  327,761
  363,874
  401,776
  441,450
  482,889
  526,100
  571,101
  617,921
  666,603
  717,202
Adjusted assets (=assets-cash), $m
  2,336
  3,159
  4,881
  7,299
  10,591
  14,943
  20,543
  27,574
  36,207
  46,589
  58,846
  73,073
  89,339
  107,683
  128,122
  150,649
  175,241
  201,862
  230,471
  261,021
  293,465
  327,761
  363,874
  401,776
  441,450
  482,889
  526,100
  571,101
  617,921
  666,603
  717,202
Revenue / Adjusted assets
  0.251
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
Average production assets, $m
  2,045
  2,740
  4,233
  6,331
  9,186
  12,960
  17,817
  23,915
  31,402
  40,407
  51,037
  63,376
  77,484
  93,394
  111,120
  130,658
  151,986
  175,075
  199,888
  226,383
  254,522
  284,267
  315,588
  348,460
  382,869
  418,810
  456,287
  495,316
  535,923
  578,145
  622,030
Working capital, $m
  -2
  -50
  -77
  -114
  -166
  -234
  -322
  -432
  -568
  -731
  -923
  -1,146
  -1,401
  -1,688
  -2,009
  -2,362
  -2,748
  -3,165
  -3,614
  -4,093
  -4,602
  -5,139
  -5,706
  -6,300
  -6,922
  -7,572
  -8,249
  -8,955
  -9,689
  -10,452
  -11,246
Total debt, $m
  850
  1,160
  1,944
  3,044
  4,542
  6,522
  9,070
  12,269
  16,197
  20,921
  26,498
  32,971
  40,372
  48,719
  58,018
  68,268
  79,457
  91,570
  104,587
  118,487
  133,249
  148,854
  165,286
  182,531
  200,583
  219,438
  239,099
  259,574
  280,877
  303,028
  326,050
Total liabilities, $m
  1,127
  1,437
  2,221
  3,321
  4,819
  6,799
  9,347
  12,546
  16,474
  21,198
  26,775
  33,248
  40,649
  48,996
  58,295
  68,545
  79,734
  91,847
  104,864
  118,764
  133,526
  149,131
  165,563
  182,808
  200,860
  219,715
  239,376
  259,851
  281,154
  303,305
  326,327
Total equity, $m
  1,223
  1,722
  2,660
  3,978
  5,772
  8,144
  11,196
  15,028
  19,733
  25,391
  32,071
  39,825
  48,690
  58,687
  69,826
  82,104
  95,506
  110,015
  125,607
  142,256
  159,938
  178,630
  198,311
  218,968
  240,590
  263,175
  286,725
  311,250
  336,767
  363,299
  390,875
Total liabilities and equity, $m
  2,350
  3,159
  4,881
  7,299
  10,591
  14,943
  20,543
  27,574
  36,207
  46,589
  58,846
  73,073
  89,339
  107,683
  128,121
  150,649
  175,240
  201,862
  230,471
  261,020
  293,464
  327,761
  363,874
  401,776
  441,450
  482,890
  526,101
  571,101
  617,921
  666,604
  717,202
Debt-to-equity ratio
  0.695
  0.670
  0.730
  0.770
  0.790
  0.800
  0.810
  0.820
  0.820
  0.820
  0.830
  0.830
  0.830
  0.830
  0.830
  0.830
  0.830
  0.830
  0.830
  0.830
  0.830
  0.830
  0.830
  0.830
  0.830
  0.830
  0.830
  0.830
  0.830
  0.830
  0.830
Adjusted equity ratio
  0.518
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  237
  212
  322
  477
  686
  961
  1,315
  1,757
  2,297
  2,946
  3,709
  4,592
  5,600
  6,734
  7,994
  9,381
  10,893
  12,527
  14,280
  16,151
  18,135
  20,231
  22,437
  24,750
  27,170
  29,697
  32,332
  35,074
  37,928
  40,894
  43,977
Depreciation, amort., depletion, $m
  100
  139
  215
  321
  466
  658
  904
  1,214
  1,594
  2,051
  2,591
  3,217
  3,933
  4,741
  5,641
  6,632
  7,715
  8,887
  10,147
  11,492
  12,920
  14,430
  16,020
  17,688
  19,435
  21,259
  23,162
  25,143
  27,204
  29,347
  31,575
Funds from operations, $m
  373
  351
  537
  798
  1,152
  1,619
  2,219
  2,971
  3,891
  4,997
  6,300
  7,810
  9,533
  11,475
  13,635
  16,014
  18,608
  21,414
  24,427
  27,642
  31,055
  34,661
  38,456
  42,438
  46,605
  50,957
  55,493
  60,217
  65,132
  70,241
  75,552
Change in working capital, $m
  -6
  -19
  -27
  -38
  -52
  -68
  -88
  -110
  -135
  -163
  -192
  -223
  -255
  -288
  -320
  -353
  -386
  -417
  -449
  -479
  -509
  -538
  -566
  -594
  -622
  -650
  -678
  -706
  -734
  -763
  -793
Cash from operations, $m
  379
  550
  564
  836
  1,204
  1,688
  2,307
  3,081
  4,027
  5,160
  6,492
  8,033
  9,788
  11,762
  13,955
  16,367
  18,993
  21,831
  24,875
  28,121
  31,564
  35,199
  39,023
  43,033
  47,227
  51,607
  56,171
  60,923
  65,866
  71,005
  76,345
Maintenance CAPEX, $m
  0
  -87
  -139
  -215
  -321
  -466
  -658
  -904
  -1,214
  -1,594
  -2,051
  -2,591
  -3,217
  -3,933
  -4,741
  -5,641
  -6,632
  -7,715
  -8,887
  -10,147
  -11,492
  -12,920
  -14,430
  -16,020
  -17,688
  -19,435
  -21,259
  -23,162
  -25,143
  -27,204
  -29,347
New CAPEX, $m
  -416
  -1,027
  -1,493
  -2,098
  -2,855
  -3,774
  -4,857
  -6,098
  -7,487
  -9,005
  -10,630
  -12,339
  -14,107
  -15,910
  -17,726
  -19,537
  -21,329
  -23,089
  -24,812
  -26,496
  -28,139
  -29,745
  -31,321
  -32,872
  -34,409
  -35,941
  -37,477
  -39,029
  -40,607
  -42,222
  -43,885
Cash from investing activities, $m
  -478
  -1,114
  -1,632
  -2,313
  -3,176
  -4,240
  -5,515
  -7,002
  -8,701
  -10,599
  -12,681
  -14,930
  -17,324
  -19,843
  -22,467
  -25,178
  -27,961
  -30,804
  -33,699
  -36,643
  -39,631
  -42,665
  -45,751
  -48,892
  -52,097
  -55,376
  -58,736
  -62,191
  -65,750
  -69,426
  -73,232
Free cash flow, $m
  -99
  -564
  -1,068
  -1,476
  -1,972
  -2,553
  -3,208
  -3,922
  -4,674
  -5,439
  -6,189
  -6,897
  -7,536
  -8,081
  -8,512
  -8,811
  -8,968
  -8,973
  -8,824
  -8,521
  -8,067
  -7,466
  -6,728
  -5,859
  -4,870
  -3,769
  -2,565
  -1,268
  116
  1,578
  3,113
Issuance/(repayment) of debt, $m
  230
  540
  783
  1,100
  1,498
  1,980
  2,548
  3,199
  3,928
  4,724
  5,577
  6,473
  7,401
  8,347
  9,300
  10,250
  11,189
  12,113
  13,017
  13,900
  14,762
  15,605
  16,431
  17,245
  18,052
  18,855
  19,661
  20,475
  21,303
  22,150
  23,023
Issuance/(repurchase) of shares, $m
  65
  663
  1,223
  1,694
  2,269
  2,944
  3,712
  4,555
  5,451
  6,373
  7,293
  8,178
  9,000
  9,732
  10,351
  10,839
  11,181
  11,369
  11,399
  11,270
  10,987
  10,553
  9,978
  9,271
  8,441
  7,499
  6,454
  5,318
  4,098
  2,803
  1,441
Cash from financing (excl. dividends), $m  
  289
  1,203
  2,006
  2,794
  3,767
  4,924
  6,260
  7,754
  9,379
  11,097
  12,870
  14,651
  16,401
  18,079
  19,651
  21,089
  22,370
  23,482
  24,416
  25,170
  25,749
  26,158
  26,409
  26,516
  26,493
  26,354
  26,115
  25,793
  25,401
  24,953
  24,464
Total cash flow (excl. dividends), $m
  189
  -24
  -285
  -376
  -475
  -573
  -660
  -723
  -746
  -715
  -613
  -424
  -135
  266
  788
  1,438
  2,222
  3,140
  4,193
  5,379
  6,695
  8,138
  9,703
  11,386
  13,182
  15,086
  17,096
  19,208
  21,419
  23,729
  26,136
Retained Cash Flow (-), $m
  -140
  -646
  -938
  -1,318
  -1,794
  -2,372
  -3,052
  -3,832
  -4,705
  -5,658
  -6,680
  -7,754
  -8,865
  -9,998
  -11,139
  -12,277
  -13,403
  -14,509
  -15,592
  -16,649
  -17,682
  -18,692
  -19,682
  -20,657
  -21,622
  -22,585
  -23,550
  -24,525
  -25,517
  -26,532
  -27,576
Prev. year cash balance distribution, $m
 
  7
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Discount rate, %
 
  5.40
  5.67
  5.95
  6.25
  6.56
  6.89
  7.24
  7.60
  7.98
  8.38
  8.80
  9.24
  9.70
  10.18
  10.69
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.04
  15.80
  16.59
  17.42
  18.29
  19.20
  20.16
  21.17
  22.23
PV of cash for distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  89.7
  79.2
  70.8
  63.9
  58.4
  53.8
  50.0
  46.8
  44.2
  41.9
  40.0
  38.4
  37.0
  35.8
  34.8
  34.0
  33.2
  32.6
  32.0
  31.6
  31.2
  30.9
  30.6
  30.4
  30.2
  30.1
  30.0
  29.9
  29.9
  29.8

Antero Midstream Partners LP owns, operates, and develops midstream energy assets. Its assets include 8-, 12-, 16-, and 20-inch high and low pressure gathering pipelines and compressor stations that collect natural gas, and oil and condensate from wells in the Marcellus Shale in West Virginia and the Utica Shale in Ohio, as well as water handling and treatment assets. As of December 31, 2015, the company’s Marcellus and Utica Shale gathering systems comprised 182 miles and 110 miles of pipelines; and water handling systems had 184 miles and 75 miles of pipelines. Antero Resources Midstream Management LLC serves as the general partner of the company. The company was founded in 2013 and is headquartered in Denver, Colorado. Antero Midstream Partners LP operates as a subsidiary of Antero Resources Corporation.

FINANCIAL RATIOS  of  Antero Midstream Partners (AM)

Valuation Ratios
P/E Ratio 24
Price to Sales 9.7
Price to Book 4.6
Price to Tangible Book
Price to Cash Flow 15
Price to Free Cash Flow -153.5
Growth Rates
Sales Growth Rate 51.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -8.2%
Cap. Spend. - 3 Yr. Gr. Rate -6.8%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 69.5%
Total Debt to Equity 69.5%
Interest Coverage 19
Management Effectiveness
Return On Assets 11.5%
Ret/ On Assets - 3 Yr. Avg. 10.5%
Return On Total Capital 12.6%
Ret/ On T. Cap. - 3 Yr. Avg. 11%
Return On Equity 20.6%
Return On Equity - 3 Yr. Avg. 14.7%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 72.5%
Gross Margin - 3 Yr. Avg. 77.9%
EBITDA Margin 59.7%
EBITDA Margin - 3 Yr. Avg. 65.2%
Operating Margin 44%
Oper. Margin - 3 Yr. Avg. 45.9%
Pre-Tax Margin 40.4%
Pre-Tax Margin - 3 Yr. Avg. 43.2%
Net Profit Margin 40.4%
Net Profit Margin - 3 Yr. Avg. 43.2%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 76.8%

AM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AM stock intrinsic value calculation we used $387 million for the last fiscal year's total revenue generated by Antero Midstream Partners. The default revenue input number comes from 2016 income statement of Antero Midstream Partners. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our AM stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 5.4%, whose default value for AM is calculated based on our internal credit rating of Antero Midstream Partners, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Antero Midstream Partners.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of AM stock the variable cost ratio is equal to 49.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for AM stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Antero Midstream Partners.

Corporate tax rate of 27% is the nominal tax rate for Antero Midstream Partners. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the AM stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for AM are equal to 442.5%.

Life of production assets of 19.7 years is the average useful life of capital assets used in Antero Midstream Partners operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for AM is equal to -8%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1083 million for Antero Midstream Partners - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 182.599 million for Antero Midstream Partners is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Antero Midstream Partners at the current share price and the inputted number of shares is $5.8 billion.


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COMPANY NEWS

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▶ Can 154% Growth And 3.6% Dividend Pump Up This Energy Stock?   [May-19-17 04:15PM  Investor's Business Daily]
▶ Antero Midstream Partners posts 1Q profit   [May-08-17 04:59PM  Associated Press]
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▶ Antero Midstream GP LP Launches Initial Public Offering   [Apr-24-17 06:15AM  PR Newswire]
▶ Will Trump's America First Energy Plan Pump Up This IPO Leader?   [Mar-16-17 02:21PM  Investor's Business Daily]
▶ Antero Midstream Investor Access to 2016 10-K   [Mar-10-17 04:15PM  PR Newswire]
Stock chart of AM Financial statements of AM Annual reports of AM
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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