UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 5
to
SCHEDULE 13E-3
RULE 13e-3 TRANSACTION STATEMENT
(Under Section 13(e) of the Securities Exchange Act of 1934)
ANTERO MIDSTREAM PARTNERS LP
(Name of the Issuer)
Antero Midstream Partners GP LLC
Antero Midstream GP LP
AMGP GP LLC
Antero IDR Holdings LLC
Arkrose Midstream Preferred Co LLC
Arkrose Midstream Newco Inc.
Arkrose Midstream Merger Sub LLC
Antero Resources Corporation
Warburg Pincus Private Equity VIII, L.P.
Warburg Pincus Netherlands Private Equity VIII C.V. I
WP-WPVIII Investors, L.P.
Warburg Pincus Private Equity X O&G, L.P.
Warburg Pincus X Partners, L.P.
WP-WPVIII Investors GP L.P.
Warburg Pincus X, L.P.
Warburg Pincus X GP L.P.
WPP GP LLC
Warburg Pincus Partners, L.P.
Warburg Pincus Partners GP LLC
Warburg Pincus & Co.
Warburg Pincus LLC
Charles R. Kaye
Joseph P. Landy
Yorktown Energy Partners V, L.P.
Yorktown Energy Partners VI, L.P.
Yorktown Energy Partners VII, L.P.
Yorktown Energy Partners VIII, L.P.
Paul Rady
Mockingbird Investments LLC
Glen C. Warren, Jr.
Canton Investment Holdings LLC
(Name of Person(s) Filing Statement)
Common Units Representing Limited Partner Interests
(Title of Class of Securities)
03673L 103
(CUSIP Number of Class of Securities)
Glen C. Warren, Jr.
1615 Wynkoop Street
Denver, Colorado 80202
(303) 357-7310
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of the
Person(s) Filing Statement)
Copies to:
Douglas E. McWilliams
Lande A. Spottswood
Vinson & Elkins L.L.P.
1001 Fannin Street, Suite 2500
Houston, Texas 77002-6760
713-758-2222
This statement is filed in connection with (check the appropriate box):
(a) x The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities Exchange Act of 1934.
(b) x The filing of a registration statement under the Securities Act of 1933.
(c) o A tender offer.
(d) o None of the above.
Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: x
Check the following box if the filing is a final amendment reporting the results of the transaction: o
Calculation of Filing Fee
Transaction Valuation* |
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Amount of Filing Fee** |
$5,561,008,451.46 |
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$673,995 |
* Calculated solely for the purpose of determining the filing fee. The Transaction Value was calculated as follows: the product of (a) $29.73, the average of the high and low prices of the common units of Antero Midstream Partners LP (AM) as reported on the New York Stock Exchange on November 1, 2018 and (b) 187,050,402, the estimated maximum number of common units of AM that may be exchanged for the merger consideration in the merger of AM with a wholly owned subsidiary of Antero Midstream GP LP (AMGP).
** In accordance with Rule 0-11(c)(1), the filing fee was calculated by multiplying 0.0001212 by the Transaction Valuation.
x Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and date of its filing.
Amount Previously Paid: $673,995 |
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Filing Party: Antero Midstream GP LP |
Form or Registration No.: Form S-4 (Registration No. 333-228156) |
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Date Filed: November 5, 2018 |
INTRODUCTION
This Amendment No. 5 (this Amendment) to Rule 13e-3 Transaction Statement on Schedule 13E-3 (this Schedule) is being filed by: (1) (a) Antero Midstream Partners LP (AM), the issuer of common units representing limited partner interests in AM that are the subject of the Rule 13e-3 transaction, (b) Antero Midstream Partners GP LLC, the general partner of AM (AMP GP, and, together with AM, the AM Parties), (2) (a) Antero Midstream GP LP (AMGP), (b) AMGP GP LLC, the general partner of AMGP (AMGP GP), (c) Antero IDR Holdings LLC (IDR Holdings), (d) Arkrose Midstream Preferred Co LLC (Preferred Co), (e) Arkrose Midstream Newco Inc. (NewCo), (f) Arkrose Midstream Merger Sub LLC (Merger Sub, and together with AMGP, AMGP GP, IDR Holdings, Preferred Co and NewCo, the AMGP Parties), (3) Antero Resources Corporation (Antero Resources), (4) (a) Warburg Pincus Private Equity VIII, L.P. (WPPE), (b) Warburg Pincus Netherlands Private Equity VIII C.V. I (WPNPE), (c) WP-WPVIII Investors, L.P. (WPWP), (d) Warburg Pincus Private Equity X O&G, L.P.(WPPEX), (e) Warburg Pincus X Partners, L.P. (WPXP), (f) WP-WPVIII Investors GP L.P. (WPWP GP), (g) Warburg Pincus X, L.P. (WPX), (h) Warburg Pincus X GP L.P. (WPX GP), (i) WPP GP LLC (WPP GP), (j) Warburg Pincus Partners, L.P. (WPP LP), (k) Warburg Pincus Partners GP LLC (WPP GP LLC), (l) Warburg Pincus & Co. (WP), (m) Warburg Pincus LLC (WP LLC), (n) Charles R. Kaye, and (o) Joseph P. Landy (together with WPPE, WPNPE, WPWP, WPPEX, WPXP, WPWP GP, WPX, WPX GP, WPP GP, WPP LP, WPP GP LLC, WP, WP LLC and Mr. Kaye, Warburg), (5) (a) Yorktown Energy Partners V, L.P. (YEP V), (b) Yorktown Energy Partners VI, L.P. (YEP VI), (c) Yorktown Energy Partners VII, L.P. (YEP VII), and (d) Yorktown Energy Partners VIII, L.P. (YEP VII, and together with YEP V, YEP VI, YEP VII, and YEP VII, Yorktown, and together with Warburg, the Sponsor Holders), (6) Paul Rady, Mockingbird Investments LLC (Mockingbird), Glen C. Warren, Jr. and Canton Investment Holdings LLC (Canton, and together with Paul Rady, Mockingbird and Glen C. Warren, Jr., the Management Holders). This Schedule relates to the Simplification Agreement, dated as of October 9, 2018, by and among AMGP GP, AMGP, IDR Holdings, Preferred Co, NewCo, Merger Sub, AMP GP, and AM (the Simplification Agreement).
AMGP has filed with Securities and Exchange Commission a registration statement on Form S-4 (the Form S-4), which contains a joint proxy statement and a prospectus (the proxy statement/prospectus) and constitutes (i) a prospectus of AMGP under Section 5 of the Securities Act of 1933, as amended (the Securities Act), with respect to AMGP (or its successor entity) securities to be issued pursuant to the Simplification Agreement, (ii) a notice of meeting and a proxy statement of AMGP under Section 14(a) of the Securities Exchange Act of 1934, as amended (the Exchange Act), with respect to the special meeting of AMGP shareholders, at which AMGP shareholders will be asked to consider and vote on, among other matters, a proposal to approve the Simplification Agreement and the transactions contemplated thereby and (iii) a notice of meeting and a proxy statement of AM under Section 14(a) of the Exchange Act with respect to the special meeting of AM unitholders, at which AM unitholders will be asked to consider and vote on a proposal to approve the Simplification Agreement and the transactions contemplated thereby. A copy of the Form S-4 is attached hereto as Exhibit (a)(3) and a copy of the Simplification Agreement is attached as Annex A to the proxy statement/prospectus. All references in this Schedule to Items numbered 1001 to 1016 are references to Items contained in Regulation M-A under the Exchange Act.
The cross-references below are being supplied pursuant to General Instruction G to Schedule 13E-3 and show the location in the proxy statement/prospectus of the information required to be included in response to the items of Schedule 13E-3. The information contained in the proxy statement/prospectus, including all annexes thereto and documents incorporated by reference therein, is hereby expressly incorporated herein by reference. As of the date hereof, the proxy statement/prospectus is in preliminary form and is subject to completion. Terms used but not defined in this Schedule shall have the meanings given to them in the proxy statement/prospectus.
The Rule 13e-3 Transaction Statement on Schedule 13E-3 (together with the exhibits and annexes thereto and as amended and supplemented from time to time, the Schedule 13E-3), was originally filed with the Securities and Exchange Commission (the SEC) on November 5, 2018 by AMGP. Due to the large number of exhibits to be filed with the Schedule 13E-3, this Amendment is being filed to file electronically Exhibits (c)(76) through (c)(88) to Item 16 herein which were not filed with the original Schedule 13E-3. Unless set forth below, all previous Items of the Schedule 13E-3 are unchanged.
Item 16. Exhibits.
Regulation M-A Item 1016
(a)(1) |
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Letter to Common Unitholders of Antero Midstream Partners LP, incorporated herein by reference to the proxy statement/prospectus included in the Registration Statement on Form S-4 filed by Antero Midstream GP LP with the Securities and Exchange Commission on November 5, 2018. |
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(a)(2) |
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Notice of Special Meeting of Common Unitholders of Antero Midstream Partners LP, incorporated herein by reference to the proxy statement/prospectus included in the Registration Statement on Form S-4 filed by Antero Midstream GP LP with the Securities and Exchange Commission on November 5, 2018. |
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(a)(3) |
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Joint Proxy Statement/Prospectus of Antero Midstream Partners LP and Antero Midstream GP LP, incorporated herein by reference to the Registration Statement on Form S-4 filed by Antero Midstream GP LP with the Securities and Exchange Commission on November 5, 2018 |
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(b)(1) |
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Amended and Restated Credit Agreement, dated as of October 26, 2017, among Antero Midstream Partners LP and certain of its subsidiaries, certain lenders party thereto, Wells Fargo Bank, National Association, as administrative agent, l/c issuer and swingline lender and the other parties thereto (incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q filed on November 1, 2017). |
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(b)(2) |
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First Amendment and Joinder Agreement, dated as of October 31, 2018, among Antero Midstream Partners LP and certain of its subsidiaries, certain lenders party thereto, Wells Fargo Bank, National Association, as administrative agent, l/c issuer and swingline lender and the other parties thereto (incorporated by reference to Exhibit 10.5 to the proxy statement/prospectus included in the Registration Statement on Form S-4 filed by Antero Midstream GP LP with the Securities and Exchange Commission on November 5, 2018). |
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(c)(1) |
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Fairness Opinion of the AM Conflicts Committees Financial Advisor, dated October 8, 2018, incorporated herein by reference to the proxy statement/prospectus included in the Registration Statement on Form S-4 filed by Antero Midstream GP LP with the Securities and Exchange Commission on November 5, 2018. |
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(c)(2) |
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Fairness Opinion of the AMGP Conflicts Committees Financial Advisor, dated October 9, 2018, incorporated herein by reference to the proxy statement/prospectus included in the Registration Statement on Form S-4 filed by Antero Midstream GP LP with the Securities and Exchange Commission on November 5, 2018. |
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(c)(3) |
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Fairness Opinion of the AR Special Committees Financial Advisor, dated October 8, 2018, incorporated herein by reference to the proxy statement/prospectus included in the Registration Statement on Form S-4 filed by Antero Midstream GP LP with the Securities and Exchange Commission on November 5, 2018. |
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(c)(4)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated March 1, 2018. |
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(c)(5)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated March 22, 2018. |
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(c)(6)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated April 3, 2018. |
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(c)(7)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Board of Directors of AMGP GP LLC, dated April 7, 2018. |
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(c)(8)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated April 10, 2018. |
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(c)(9)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated April 10, 2018. |
(c)(10)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated April 18, 2018. |
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(c)(11)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated April 20, 2018. |
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(c)(12)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated April 20, 2018. |
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(c)(13)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated April 23, 2018. |
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(c)(14)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated May 1, 2018. |
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(c)(15)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated May 3, 2018. |
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(c)(16)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated May 8, 2018. |
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(c)(17)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated May 9, 2018. |
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(c)(18)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated May 11, 2018. |
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(c)(19)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated May 18, 2018. |
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(c)(20)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated May 22, 2018. |
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(c)(21)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated June 1, 2018. |
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(c)(22)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated June 6, 2018. |
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(c)(23)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated June 6, 2018. |
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(c)(24)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated June 20, 2018. |
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(c)(25)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated June 29, 2018. |
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(c)(26)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated July 18, 2018. |
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(c)(27)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated August 3, 2018. |
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(c)(28)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated August 11, 2018. |
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(c)(29)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated August 20, 2018. |
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(c)(30)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated August 21, 2018. |
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(c)(31)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated August 23, 2018. |
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(c)(32)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated August 27, 2018. |
(c)(33)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated August 30, 2018. |
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(c)(34)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated September 6, 2018. |
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(c)(35)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated September 13, 2018. |
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(c)(36)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated September 21, 2018. |
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(c)(37)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated September 24, 2018. |
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(c)(38)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated October 3, 2018. |
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(c)(39)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated October 6, 2018. |
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(c)(40)* |
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Presentation prepared by Goldman Sachs & Co. LLC to the Conflicts Committee of the Board of Directors of AMGP GP LLC, dated October 8, 2018. |
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(c)(41)* |
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Presentation prepared by Robert W. Baird & Co. Incorporated to the Special Committee of the Board of Directors of Antero Resources Corporation, dated March 22, 2018. |
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(c)(42)* |
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Presentation prepared by Robert W. Baird & Co. Incorporated to the Special Committee of the Board of Directors of Antero Resources Corporation, dated March 30, 2018. |
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(c)(43)* |
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Presentation prepared by Robert W. Baird & Co. Incorporated to the Special Committee of the Board of Directors of Antero Resources Corporation, dated April 10, 2018. |
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(c)(44)* |
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Presentation prepared by Robert W. Baird & Co. Incorporated to the Special Committee of the Board of Directors of Antero Resources Corporation, dated April 19, 2018. |
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(c)(45)* |
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Presentation prepared by Robert W. Baird & Co. Incorporated to the Special Committee of the Board of Directors of Antero Resources Corporation, dated June 12, 2018. |
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(c)(46)* |
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Presentation prepared by Robert W. Baird & Co. Incorporated to the Special Committee of the Board of Directors of Antero Resources Corporation, dated June 21, 2018. |
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(c)(47)* |
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Presentation prepared by Robert W. Baird & Co. Incorporated to the Special Committee of the Board of Directors of Antero Resources Corporation, dated July 3, 2018. |
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(c)(48)* |
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Presentation prepared by Robert W. Baird & Co. Incorporated to the Special Committee of the Board of Directors of Antero Resources Corporation, dated July 6, 2018. |
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(c)(49)* |
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Presentation prepared by Robert W. Baird & Co. Incorporated to the Special Committee of the Board of Directors of Antero Resources Corporation, dated July 8, 2018. |
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(c)(50)* |
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Presentation prepared by Robert W. Baird & Co. Incorporated to the Special Committee of the Board of Directors of Antero Resources Corporation, dated July 22, 2018. |
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(c)(51)* |
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Presentation prepared by Robert W. Baird & Co. Incorporated to the Special Committee of the Board of Directors of Antero Resources Corporation, dated August 1, 2018. |
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(c)(52)* |
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Presentation prepared by Robert W. Baird & Co. Incorporated to the Special Committee of the Board of Directors of Antero Resources Corporation, dated August 22, 2018. |
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(c)(53)* |
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Presentation prepared by Robert W. Baird & Co. Incorporated to the Special Committee of the Board of Directors of Antero Resources Corporation, dated August 28, 2018. |
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(c)(54)* |
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Presentation prepared by Robert W. Baird & Co. Incorporated to the Special Committee of the Board of Directors of Antero Resources Corporation, dated September 17, 2018. |
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(c)(55)* |
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Presentation prepared by Robert W. Baird & Co. Incorporated to the Special Committee of the Board of Directors of Antero Resources Corporation, dated September 23, 2018. |
(c)(56)* |
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Presentation prepared by Robert W. Baird & Co. Incorporated to the Special Committee of the Board of Directors of Antero Resources Corporation, dated October 1, 2018. |
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(c)(57)* |
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Presentation prepared by Robert W. Baird & Co. Incorporated to the Special Committee of the Board of Directors of Antero Resources Corporation, dated October 5, 2018. |
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(c)(58)* |
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Presentation prepared by Robert W. Baird & Co. Incorporated to the Special Committee of the Board of Directors of Antero Resources Corporation, dated October 6, 2018. |
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(c)(59)* |
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Presentation prepared by Robert W. Baird & Co. Incorporated to the Special Committee of the Board of Directors of Antero Resources Corporation, dated October 7, 2018. |
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(c)(60)* |
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Supplemental Presentation prepared by Robert W. Baird & Co. Incorporated to the Special Committee of the Board of Directors of Antero Resources Corporation, dated October 7, 2018. |
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(c)(61)* |
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Presentation prepared by Robert W. Baird & Co. Incorporated to the Special Committee of the Board of Directors of Antero Resources Corporation, dated October 8, 2018. |
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(c)(62)* |
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Presentation prepared by Morgan Stanley & Co. LLC to the Board of Directors of Antero Midstream Partners GP LLC, dated March 20, 2018. |
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(c)(63)* |
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Presentation prepared by Morgan Stanley & Co. LLC to the Board of Directors of Antero Midstream Partners GP LLC, dated August 9, 2018. |
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(c)(64)* |
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Joint Presentation prepared by J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC to the Board of Directors of Antero Resources Corporation, dated February 21, 2018. |
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(c)(65)* |
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Presentation prepared by J.P. Morgan Securities LLC to the Board of Directors of Antero Resources Corporation, dated March 22, 2018. |
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(c)(66)* |
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Presentation prepared by J.P. Morgan Securities LLC to the Board of Directors of Antero Resources Corporation, dated August 9, 2018. |
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(c)(67)* |
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Presentation prepared by Tudor Pickering Holt & Co. Advisors LLP to the Conflicts Committee of Antero Midstream Partners LP, dated June 17, 2018. |
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(c)(68)* |
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Presentation prepared by Tudor Pickering Holt & Co. Advisors LLP to the Conflicts Committee of Antero Midstream Partners LP, dated June 19, 2018. |
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(c)(69)* |
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Presentation prepared by Tudor Pickering Holt & Co. Advisors LLP to the Conflicts Committee of Antero Midstream Partners LP, dated June 20, 2018. |
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(c)(70)* |
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Presentation prepared by Tudor Pickering Holt & Co. Advisors LLP to the Conflicts Committee of Antero Midstream Partners LP, dated June 28, 2018. |
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(c)(71)* |
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Presentation prepared by Tudor Pickering Holt & Co. Advisors LLP to the Conflicts Committee of Antero Midstream Partners LP, dated June 30, 2018. |
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(c)(72)* |
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Presentation prepared by Tudor Pickering Holt & Co. Advisors LLP to the Conflicts Committee of Antero Midstream Partners LP, dated July 12, 2018. |
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(c)(73)* |
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Presentation prepared by Tudor Pickering Holt & Co. Advisors LLP to the Conflicts Committee of Antero Midstream Partners LP, dated July 14, 2018. |
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(c)(74)* |
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Presentation prepared by Tudor Pickering Holt & Co. Advisors LLP to the Conflicts Committee of Antero Midstream Partners LP, dated August 14, 2018. |
(c)(75)* |
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Presentation prepared by Tudor Pickering Holt & Co. Advisors LLP to the Conflicts Committee of Antero Midstream Partners LP, dated August 14-15, 2018. |
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(c)(76)** |
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Presentation prepared by Tudor Pickering Holt & Co. Advisors LLP to the Conflicts Committee of Antero Midstream Partners LP, dated August 26, 2018. |
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(c)(77)** |
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Presentation prepared by Tudor Pickering Holt & Co. Advisors LLP to the Conflicts Committee of Antero Midstream Partners LP, dated August 26, 2018. |
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(c)(78)** |
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Presentation prepared by Tudor Pickering Holt & Co. Advisors LLP to the Conflicts Committee of Antero Midstream Partners LP, dated August 31, 2018. |
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(c)(79)** |
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Presentation prepared by Tudor Pickering Holt & Co. Advisors LLP to the Conflicts Committee of Antero Midstream Partners LP, dated September 1, 2018. |
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(c)(80)** |
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Presentation prepared by Tudor Pickering Holt & Co. Advisors LLP to the Conflicts Committee of Antero Midstream Partners LP, dated September 2, 2018. |
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(c)(81)** |
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Presentation prepared by Tudor Pickering Holt & Co. Advisors LLP to the Conflicts Committee of Antero Midstream Partners LP, dated September 17, 2018. |
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(c)(82)** |
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Presentation prepared by Tudor Pickering Holt & Co. Advisors LLP to the Conflicts Committee of Antero Midstream Partners LP, dated September 20, 2018. |
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(c)(83)** |
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Presentation prepared by Tudor Pickering Holt & Co. Advisors LLP to the Conflicts Committee of Antero Midstream Partners LP, dated September 23, 2018. |
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(c)(84)** |
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Presentation prepared by Tudor Pickering Holt & Co. Advisors LLP to the Conflicts Committee of Antero Midstream Partners LP, dated September 28, 2018. |
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(c)(85)** |
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Presentation prepared by Tudor Pickering Holt & Co. Advisors LLP to the Conflicts Committee of Antero Midstream Partners LP, dated October 2, 2018. |
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(c)(86)** |
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Presentation prepared by Tudor Pickering Holt & Co. Advisors LLP to the Conflicts Committee of Antero Midstream Partners LP, dated October 6, 2018. |
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(c)(87)** |
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Presentation prepared by Tudor Pickering Holt & Co. Advisors LLP to the Conflicts Committee of Antero Midstream Partners LP, dated October 8, 2018. |
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(c)(88)** |
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Presentation prepared by Tudor Pickering Holt & Co. Advisors LLP to the Conflicts Committee of Antero Midstream Partners LP, dated October 8, 2018. |
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(c)(89)*** |
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Discussion Materials of Citigroup Global Markets Inc. for the Sponsor Holders, dated September 10, 2018. |
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(c)(90)*** |
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Discussion Materials of Citigroup Global Markets Inc. for the Sponsor Holders affiliated with Warburg Pincus LLC, dated September 12, 2018. |
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(c)(91)*** |
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Discussion Materials of Citigroup Global Markets Inc. for the Sponsor Holders, dated September 13, 2018. |
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(d)(1) |
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Simplification Agreement, dated as of October 9, 2018, by and among AMGP GP LLC, Antero Midstream GP LP, Antero IDR Holdings LLC, Arkrose Midstream Preferred Co LLC, Arkrose Midstream NewCo Inc., Arkrose Midstream Merger Sub LLC, Antero Midstream Partners GP LLC and Antero Midstream Partners LP., incorporated herein by reference to the proxy statement/prospectus included in the Registration Statement on Form S-4 filed by Antero Midstream GP LP with the Securities and Exchange Commission on November 5, 2018 |
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(f)(1) |
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Agreement of Limited Partnership, dated as of November 10, 2014, by and between Antero Resources Midstream Management LLC, as the General Partner, and Antero Resources Corporation, as the Organizational Limited Partner (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on November 17, 2014). |
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(f)(2)*** |
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Delaware Code Title 6 § 17-212. |
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(g) |
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None |
* Previously filed
** Filed herewith
*** To be filed by amendment
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Dated: November 5, 2018 |
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ANTERO MIDSTREAM PARTNERS LP | |
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By: Antero Midstream Partners GP LLC, its general partner | |
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By: |
/s/ Alvyn A. Schopp |
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Name: |
Alvyn A. Schopp |
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Title: |
Chief Administrative Officer, Regional Senior Vice President and Treasurer |
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Dated: November 5, 2018 |
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ANTERO MIDSTREAM PARTNERS GP LLC | |
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By: |
/s/ Alvyn A. Schopp |
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Name: |
Alvyn A. Schopp |
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Title: |
Chief Administrative Officer, Regional Senior Vice President and Treasurer |
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Dated: November 5, 2018 |
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ANTERO MIDSTREAM GP LP | |
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By: AMGP GP LLC, its general partner | |
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By: |
/s/ Alvyn A. Schopp |
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Name: |
Alvyn A. Schopp |
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Title: |
Chief Administrative Officer, Regional Senior Vice President and Treasurer |
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Dated: November 5, 2018 |
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AMGP GP LLC | |
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By: |
/s/ Alvyn A. Schopp |
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Name: |
Alvyn A. Schopp |
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Title: |
Chief Administrative Officer, Regional Senior Vice President and Treasurer |
Dated: November 5, 2018 |
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ANTERO IDR HOLDINGS LLC | ||
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By: |
Antero Midstream GP LP, its managing member | |
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By: |
AMGP GP LLC, its general partner | |
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By: |
/s/ Alvyn A. Schopp | |
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Name: |
Alvyn A. Schopp | |
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Title: |
Chief Administrative Officer, Regional Senior Vice President and Treasurer | |
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Dated: November 5, 2018 |
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ARKROSE MIDSTREAM PREFERRED CO LLC | ||
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By: |
Antero Midstream GP LP,its sole member | |
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By: |
AMGP GP LLC, its general partner | |
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By: |
/s/ Alvyn A. Schopp | |
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Name: |
Alvyn A. Schopp | |
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Title: |
Chief Administrative Officer, Regional Senior Vice President and Treasurer | |
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Dated: November 5, 2018 |
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ARKROSE MIDSTREAM NEWCO INC. | ||
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By: |
/s/ Alvyn A. Schopp | |
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Name: |
Alvyn A. Schopp | |
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Title: |
Chief Administrative Officer, Regional Senior Vice President and Treasurer | |
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Dated: November 5, 2018 |
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ARKROSE MIDSTREAM MERGER SUB LLC | ||
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By: |
Arkrose Midstream NewCo Inc., its sole member | |
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By: |
/s/ Alvyn A. Schopp | |
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Name: |
Alvyn A. Schopp | |
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Title: |
Chief Administrative Officer, Regional Senior Vice President and Treasurer | |
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Dated: November 5, 2018 |
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ANTERO RESOURCES CORPORATION | ||
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By: |
/s/ Alvyn A. Schopp | |
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Name: |
Alvyn A. Schopp | |
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Title: |
Chief Administrative Officer, Regional Senior Vice President and Treasurer | |
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Dated: November 5, 2018 |
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WARBURG PINCUS PRIVATE EQUITY VIII, L.P. | ||
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By: |
Warburg Pincus Partners, L.P., its general partner | |
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By: |
Warburg Pincus Partners GP LLC, its general partner | |
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By: |
Warburg Pincus & Co., its managing member | |
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By: |
/s/ Robert B. Knauss | |
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Name: |
Robert B. Knauss | |
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Title: |
Partner | |
Dated: November 5, 2018 |
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WARBURG PINCUS NETHERLANDS PRIVATE EQUITY VIII C.V. I | |
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By: |
Warburg Pincus Partners, L.P., its general partner |
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By: |
Warburg Pincus Partners GP LLC, its general partner |
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By: |
Warburg Pincus & Co., its managing member |
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By: |
/s/ Robert B. Knauss |
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Name: |
Robert B. Knauss |
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Title: |
Partner |
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Dated: November 5, 2018 |
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WP-WPVIII INVESTORS, L.P. | |
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By: |
WP-WPVIII Investors GP L.P., its general partner |
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By: |
WPP GP LLC, its general partner |
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By: |
Warburg Pincus Partners, L.P., its managing member |
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By: |
Warburg Pincus Partners GP LLC, its general partner |
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By: |
Warburg Pincus & Co., its managing member |
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By: |
/s/ Robert B. Knauss |
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Name: |
Robert B. Knauss |
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Title: |
Partner |
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Dated: November 5, 2018 |
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WARBURG PINCUS PRIVATE EQUITY X O&G, L.P. | |
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By: |
Warburg Pincus X, L.P., its general partner |
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By: |
Warburg Pincus X GP L.P., its general partner |
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By: |
WPP GP LLC, its general partner |
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By: |
Warburg Pincus Partners, L.P., its managing member |
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By: |
Warburg Pincus Partners GP LLC, its general partner |
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By: |
Warburg Pincus & Co., its managing member |
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By: |
/s/ Robert B. Knauss |
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Name: |
Robert B. Knauss |
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Title: |
Partner |
Dated: November 5, 2018 |
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WARBURG PINCUS X PARTNERS, L.P. | |
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By: |
Warburg Pincus X, L.P., its general partner |
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By: |
Warburg Pincus X GP L.P., its general partner |
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By: |
WPP GP LLC, its general partner |
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By: |
Warburg Pincus Partners, L.P., its managing member |
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By: |
Warburg Pincus Partners GP LLC, its general partner |
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By: |
Warburg Pincus & Co., its managing member |
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By: |
/s/ Robert B. Knauss |
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Name: |
Robert B. Knauss |
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Title: |
Partner |
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Dated: November 5, 2018 |
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WP-WPVIII INVESTORS, GP L.P. | |
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By: |
WPP GP LLC, its general partner |
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By: |
Warburg Pincus Partners, L.P., its managing member |
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By: |
Warburg Pincus Partners GP LLC, its general partner |
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By: |
Warburg Pincus & Co., its managing member |
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By: |
/s/ Robert B. Knauss |
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Name: |
Robert B. Knauss |
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Title: |
Partner |
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Dated: November 5, 2018 |
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WARBURG PINCUS X, L.P. | |
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By: |
Warburg Pincus X GP L.P., its general partner |
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By: |
WPP GP LLC, its general partner |
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By: |
Warburg Pincus Partners, L.P., its managing member |
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By: |
Warburg Pincus Partners GP LLC, its general partner |
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By: |
Warburg Pincus & Co., its managing member |
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By: |
/s/ Robert B. Knauss |
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Name: |
Robert B. Knauss |
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Title: |
Partner |
Dated: November 5, 2018 |
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WARBURG PINCUS X GP L.P. | ||
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By: |
WPP GP LLC, its general partner | |
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By: |
Warburg Pincus Partners, L.P., its managing member | |
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By: |
Warburg Pincus Partners GP LLC, its general partner | |
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By: |
Warburg Pincus & Co., its managing member | |
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By: |
/s/ Robert B. Knauss | |
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Name: |
Robert B. Knauss | |
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Title: |
Partner | |
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Dated: November 5, 2018 |
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WPP GP LLC | ||
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By: |
Warburg Pincus Partners, L.P., its managing member | |
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By: |
Warburg Pincus Partners GP LLC, its general partner | |
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By: |
Warburg Pincus & Co., its managing member | |
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By: |
/s/ Robert B. Knauss | |
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Name: |
Robert B. Knauss | |
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Title: |
Partner | |
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Dated: November 5, 2018 |
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WARBURG PINCUS PARTNERS, L.P. | ||
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By: |
Warburg Pincus Partners GP LLC, its general partner | |
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By: |
Warburg Pincus & Co., its managing member | |
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By: |
/s/ Robert B. Knauss | |
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Name: |
Robert B. Knauss | |
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Title: |
Partner | |
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Dated: November 5, 2018 |
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WARBURG PINCUS PARTNERS GP LLC | ||
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By: |
Warburg Pincus & Co., its managing member | |
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By: |
/s/ Robert B. Knauss | |
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Name: |
Robert B. Knauss | |
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Title: |
Partner | |
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Dated: November 5, 2018 |
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WARBURG PINCUS & CO. | ||
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By: |
/s/ Robert B. Knauss | |
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Name: |
Robert B. Knauss | |
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Title: |
Partner | |
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Dated: November 5, 2018 |
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WARBURG PINCUS LLC | ||
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By: |
/s/ Robert B. Knauss | |
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Name: |
Robert B. Knauss | |
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Title: |
Managing Director | |
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Dated: November 5, 2018 |
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CHARLES R. KAYE | ||
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By: |
/s/ Charles R. Kaye | |
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Name: |
Charles R. Kaye | |
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By: |
Robert B. Knauss, Attorney-in-Fact* | |
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Dated: November 5, 2018 |
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JOSEPH P. LANDY | ||
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By: |
/s/ Joseph P. Landy | |
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Name: |
Joseph P. Landy | |
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By: |
Robert B. Knauss, Attorney-in-Fact* | |
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Dated: November 5, 2018 |
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YORKTOWN ENERGY PARTNERS V, L.P. | ||
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By: |
Yorktown V Company LLC, its General Partner | |
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By: |
/s/ W. Howard Keenan, Jr. | |
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Name: |
W. Howard Keenan, Jr. | |
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Title: |
Member | |
* The Power of Attorney given by each of Mr. Kaye and Mr. Landy was previously filed with the SEC on July 12, 2016 as an exhibit to a beneficial ownership report on Schedule 13D filed by Warburg Pincus LLC with respect to WEX Inc. and is hereby incorporated by reference.
Dated: November 5, 2018 |
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YORKTOWN ENERGY PARTNERS VI, L.P. | ||
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By: |
Yorktown VI Company LP, its General Partner | |
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By: |
Yorktown VI Associates LLC, its General Partner | |
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By: |
/s/ W. Howard Keenan, Jr. | |
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Name: |
W. Howard Keenan, Jr. | |
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Title: |
Member | |
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Dated: November 5, 2018 |
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YORKTOWN ENERGY PARTNERS VII, L.P. | ||
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By: |
Yorktown VII Company LP, its General Partner | |
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By: |
Yorktown VII Associates LLC, its General Partner | |
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By: |
/s/ W. Howard Keenan, Jr. | |
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Name: |
W. Howard Keenan, Jr. | |
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Title: |
Member | |
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Dated: November 5, 2018 |
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YORKTOWN ENERGY PARTNERS VIII, L.P. | ||
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By: |
Yorktown VIII Company LP, its General Partner | |
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By: |
Yorktown VIII Associates LLC, its General Partner | |
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By: |
/s/ W. Howard Keenan, Jr. | |
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Name: |
W. Howard Keenan, Jr. | |
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Title: |
Member | |
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Dated: November 5, 2018 |
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By: |
/s/ Paul M. Rady | |
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Name: |
Paul M. Rady | |
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Dated: November 5, 2018 |
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MOCKINGBIRD INVESTMENTS LLC | ||
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By: |
/s/ Paul M. Rady | |
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Name: |
Paul M. Rady | |
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Title: |
Manager | |
Project Alpine Special Committee Materials August 26, 2018 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Table of Contents Antero Situation Overview I AM Financial Analysis II AMGP Financial Analysis III Analysis of Transaction IV Pro Forma Impact V AMGP Proposal A AM Proposal B Pro Forma Trading Analysis VI After-Tax Pro Forma Impact Supplemental Materials for AMGP Proposal VII After-Tax Pro Forma Impact Supplemental Materials for AM Proposal VIII After-Tax Distribution / Dividend Discount Analysis IX AMGP Proposal A AM Proposal B Appendix 2 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
I. Antero Situation Overview 3 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Prior vs. Current Since August 14, 2018 Special Committee Meeting Updated materials to reflect most recent AMGP and AM Proposals AMGP Proposal: 1.620x AMGP shares and $3.00 of cash consideration for each AM Unit (All-in exchange ratio of 1.775x) AM Proposal: 1.710x AMGP shares and $3.00 of cash consideration for each AM Unit (All-in exchange ratio of 1.865x) Updated materials for market prices at close 8/21/2018 4 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Summary of Proposal from AMGP AM Common Units would be exchanged for 1.620 AMGP shares and $3.00 per AM unit Represents a 11% premium to current spot XR as of August 21, 2018 Based on prices as of February 23, 2018, offer implies a 30% premium to AMs closing price and 17% premium to 30-day VWAP Based on prices as of July 20, 2018, implies a 13% premium to AMs 30-day VWAP Series B units will be exchanged for 18.5mm AMGP shares Implies ~$358mm valuation at market close as of August 21, 2018 Newly issued AMGP shares will not carryover vesting requirements Pro forma for transaction equity ownership breakdown as follows: AM Unitholders: ~59.8% AMGP Shareholders: ~36.6% Series B Unitholders: ~3.6% Streamlined Transaction Structure Single, publicly-traded midstream corporation Alignment of management incentives between AM unitholders, AMGP shareholders and Series B unitholders Improved Financial Performance Elimination of IDRs will reduce PF AMGPs cost of capital relative to SQ entity Elimination of Series B will increase cash available for distribution to PF equity owners Expected elimination of cash taxes payable by PF AMGP through 5-year forecast as a result of the tax basis step-up attributable to the Transaction and additional depreciation generated from capital investment Enhanced Trading Metrics PF AMGP will have larger float and greater liquidity Larger potential investor base given institutional investor preference for traditional C-corp structure New shares should, over time, be eligible for inclusion in major indices further expanding investor universe PF AMGP will be reestablished as a Delaware C-corp 9-member independent, Board of Directors with no more than 4 appointed by AR, the Sponsors or Management AR, the Sponsors, and Management agree to vote in support of independent directors nominated by the Nominations & Governance Committee 5 Governance AMGPs Original Stated Rationale for Transaction Pro Forma Ownership Splits Series B Valuation Exchange Ratio Proposal ComponentDescription CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Antero Entities Ownership Overview ($ in millions, unless otherwise noted) Organizational Structure Overview Sponsors Management Public Shareholders 72% A Units Management Public Unitholders Source: Company filings, FactSet as of 8/21/2018. (1) 50% of Series B remain unvested; remaining 50% will vest half on 12/31/2018 and half on 12/31/2019. All shares automatically vest upon the liquidation of IDR LLC. Value based on 6% of AMGP equity value above $2,000mm. (2) AR net debt consolidates for AM. 6 Sponsor/M anagenent Ownership AR AM AM GP - Series A AM GP - Series B(1) Total # Shares (000s) Value ($MM) % Outstanding # Units (000s) Value ($MM) % Outstanding # Shares (000s) Value ($MM) % Outstanding Units (000s) Value ($MM) % Outstanding Warburg Pinc us LLC 46,609 $844 14.7% - - - 55,110 $1,067 29.6% - - - Yorktown Partners LLC 12,905 $234 4.1% - - - 15,534 $301 8.3% - - - Total Aggregate Investm ent $1,911 $534 Total Sponsor 59,514 $1,077 18.8% - - - 70,644 $1,368 37.9% - - - $2,445 Paul Rady 16,350 $296 5.2% 303 $9 0.2% 19,997 $387 10.7% 48 $45 48.7% Glen Warren 10,823 $196 3.4% 207 $6 0.1% 14,931 $289 8.0% 32 $30 32.5% O ther 3 $0 0.0% 353 $11 0.2% 2,937 $57 1.6% 19 $18 18.9% $738 $522 $85 Total M anagement 29,787 $492 8.6% 863 $27 0.5% 37,865 $733 20.3% 99 $93 100.0% $1,345 TO TAL 89,301 $1,569 27.3% 863 $27 0.5% 108,509 $2,101 58.3% 99 $93 100.0% $3,790 B Units Management reholders 38% 19% 100%100% Series Antero IDR100% Series Holdings 9% Antero R esources (AR) (IDR LLC) Non-Econ100% IDRs GP 53% LP Antero Midstream Partners LP (AM) 47% LP Antero Midstream Partners GP LLC 20% Public Sha Antero Midstream GP LP (AMGP) 42% Metric AR AM AMGP Price (as of 8/21/2018) $18.10 $30.86 $19.36 Fully Dilluted Shares O/S 322 188 186 Market Equity Value 5,826 5,805 3,605 GP Equity Value - 3,605 - Total Equity Value 5,826 9,410 3,605 Net Debt(2) 5,274 1,400 (5) Series B Value - - 96 Total Enterprise Value $11,101 $10,811 $3,696 Value of AM Units Held $3,071 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Antero Midstream Timeline Relative Performance Since AM IPO (11/5/2014)(1,2) AM AM Peers AMGP AMGP Peers AR AMZ Notable Events Primary Issuance Secondary Issuance The Tax Cuts & 150% 125% 23% 100% (8%) (16%) (18%) 75% (47%) 50% (60%) 25% Nov-14 May-15 Nov-15 May-16 Nov-16 May-17 Nov-17 May-18 Source: Company filings, FactSet as of 8/21/2018. Note: AM peers include BPMP, CNXM, EQM, HESM, NBLX, PXSP, SHLX, WES, and VLP. AMGP peers include EQGP and WGP. Note: AM peer selection considered E&P sponsored MLPs and high-growth MLPs, categorized as such if current 2022E distribution growth CAGR is greater than 10%. (1) Indexed values reflect total return on investment. Distributions and dividends reinvested at current market price on date paid. (2) AM price performance indexed to IPO price of $25.00 and AMGP price performance indexed to IPO price of $23.50. 7 3/2018 tream Partners the formation l Committee 2/14/2018 SailingStone Capital files 13D disclosing 11% stake in Antero Resources 2/2 Antero Mids announces of Specia 11/5/2014 AM IPO 3/24/2016 AM prices offering of ~8MM common units (~$179MM) from AR 12/22/2017 Jobs Act is signed into law 9/6/2017 AM prices public offering of ~10MM common units (~$315MM) from AR 2/6/2017 AM prices public offering of ~6MM common units (~$198MM) CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Antero Midstream Timeline Relative Performance Since Committee Announcement (2/23/2018)(1) AM AM Peers AMGP AMGP Peers AM E&P Sponsored Peers AR AMZ 130% 120% 16% 11% 110% 8% 1% 100% (3%) (4%) (7%) 90% 80% Feb-18 Mar-18 Apr-18 May-18 May-18 Jun-18 Jul-18 Aug-18 Source: Company filings, FactSet as of 8/21/2018. Note: AM peers include BPMP, CNXM, EQM, HESM, NBLX, PXSP, SHLX, WES, and VLP. AM E&P Sponsored peers include CNXM, EQM, HESM, and NBLX. AMGP peers include EQGP and WGP. Note: AM peer selection considered E&P sponsored MLPs and high-growth MLPs, categorized as such if current 2022E distribution growth CAGR is greater than 10%. (1) Indexed values reflect total return on investment. Distributions and dividends reinvested at current market price on date paid. 8 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Antero Midstream Timeline Relative Performance Since Committee Announcement (2/23/2018)(1) AM CNXM EQ M HESM NBL X 130% 120% 16% 14% 12% 110% 100% (8%) (10%) 90% 80% 23-Feb-18 18-Mar-18 10-Apr-18 3-May-18 26-May-18 18-Jun-18 11-Jul-18 3-Aug-18 9 Source: Company filings, FactSet as of 8/21/2018. (1) Indexed values reflect total return on investment. Distributions and dividends reinvested at current market price on date paid. CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Historical XR & Distribution Since AMGP IPO (5/4/17) Comparison ($ in millions, unless otherwise noted) Historical AM/AMGP Exchange Ratio Contrac tual Valuation Yield-Based Valuation 2.20x 2.00x Adj. XR 1.80x 1.775x 1.707x (3) 1.594x 1.60x 1.40x 1.20x May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Antero Midstream Historical Distribution Split by Entity(1) AM AMGP Series B AM Distribution CAGR: 29% AMGP Distribution CAGR: 136% 1% 1% 2% 16% 1% 1% 19% 22% 24% Q1 '15 '17 '17 70% 7 / $0.18 $29 / $0.19 $36 / $0.21 $39 / $0.22 $41 / $0.24 $44 / $0.25 $47 / $0.27 $50 / $0.28 $56 / $0.30 $60 / $0.32 $63 / $0.34 $68 / $0.37 Q1-'15 - Q2$'015/ $0.00 - Q3 '15 $1 / $0.Q041'15 - $2Q/1$'106.01 - Q2$'136/ $0.02 Q3 '16 - $5 / $0Q.043'16 - $7Q/1 $'107.04 $0 Q2$'171 / $0.06 Q3 '17 $14 / $0Q.40'817 $18Q1/'1$80.10 $1 Q2$'1282 / $0.13 - - $1 $1 $1 AMGP(2) - - $0 $1 $2 $3 $5 $7 $11 $5 / $0.05 $11 / $0.06 $14 / $0.08 $20 / $0.11 $20 / $0.11 Source: Company filings, FactSet as of 8/21/2018. (1) (2) (3) AM CAGR is calculated from Q115 to Q118. AMGP CAGR is calculated from Q217 to Q118 based on initial post-IPO distribution grossed up for full quarter. AMGP attributable distribution per AM LP unit pre-IPO. AMGP CAFD & declared distribution post-IPO. Adjusted to reflect proposed Series B conversion, with AMGP share price calculated as (AMGP equity value + [(AMGP equity value - $2bn) x 6%])/(AMGP fully diluted shares outstanding + 18.5mm). Proposal % Premium / (Discount) calculated as premium / (discount) between current proposal (1.775x) and adjusted XR. 10 (4) AM LP$27 / $0.18 $29 / $0.19 $36 / $0.21 $39 / $0.22 $41 / $0.24 $44 / $0.25 $47 / $0.27 $50 / $0.28 $56 / $0.30 $60 / $0.32 $63 / $0.34 $68 / $0.37 $73 / $0.39 $71 / $0.42 Series B-- - - - - - $0 $1 $1 $1 $1 $2 $2 1% 1% 1% 1% 2% 2% 2% Q2 '15 100% Q3 100% '15 1% 99% Q4 2% '15 98% 4% Q1 '16 96% 6% Q2 94% '16 Q3 16% 19% 22% 24% 26% 28% 12% '16 87% Q2 9% 91% 77% Q4 '16 83% '17 74% Q1 80% Q3 '17 72% Q4 AMGP Proposal Spot XR Series B Conversion Units18.518.523.0 Adj. AM GP Share Pric e$18.08$18.79$19.36 Current AM Share Pric e$30.86$30.86$30.86 At 2/23/2018 Adjusted XR1.707x1.643x1.594x AM GP Units O utstanding Inc luding Series B204.7204.7508.9 Sample Adjusted XR Calculation AMGP Proposal % Period Spot X R Adj. X R(2) Premium / (Discount)(1) At Transac tion Contrac tual Valuation AM GP Shares O utstanding186.2186.2186.2 AM GP Units IssuedNANA299.8 AM GP Pric e$19.36$19.36$19.36 AMGP Proposal --1.775x --Current 1.594x 1.707x 4.0% 3-Month Average (Current) 1.622x 1.738x 2.1% 30-Day Average (Current) 1.648x 1.766x -0.5% 2/23/2018 1.380x 1.478x 20.1% 3-Month Average (at 2/23/2018) 1.484x 1.588x 11.7% 30-Day Average (at 2/23/2018) 1.444x 1.543x 15.0% Since AMGP IPO Average 1.567x 1.678x 5.8% AM GP M arket Value$3,605$3,605$9,408 2018E Series B CFNA$7NA 2018E YieldNA2.8%NA Series B Threshold$2,000 NA$2,000 Series B Redem ption Right6.0%NA6.0% Implied Series B Valuation$96$241$445 AM GP Equity Value Inc luding Series B$3,701$3,846$9,853 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Analyst Perspectives on Situation Price Target AM Current Price Median Price Target AR AMGP Raym$o1n8d.10J$a2m3.0e0s: 2-14-18 $19.$326 7 $23.50 $30.86 $38.00 Susquehanna Financial Group: 8-10-18 $27 Restricted: 8-17-18 $51 Raymond James: 8-2-18 $27 TD Securities: 8-2-18 ed:$225-14-18 JonesTrading: 8-3-18 MUFG Securities Ameri cas: 8-2-18 $26 Restricted: 8-8-18 25 Scotia Howard Weil: 8-21-18 25 Ladenburg Thalmann & Co: 8-2-18 Ladenburg Thalmann & Co: 2-14-18 Restricted: 8-17-18 $26 Tudor Pickering Holt & Co.: 4-3-18 4 MUFG Securities Ameri cas: 8-2-18 Stifel Nicolaus: 7-18-18 $23 Ladenburg Thalmann & Co: 8-2-18 4 Seaport Global Securities: 2-14-18 SunTrust Robinson Humphrey: 8-2-18 $23 Scotia Howard Weil: 8-21-18 Scotia Howard Weil: 8-21-18 4 MUFG Securities Ameri cas: 8-2-18 $23 MUFG Securities Ameri cas: 2-14-18Tudor Pickering Holt & Co.: 4-23-18 $29 Wolfe Research: 8-14-18 $23 Restricted: 7-9-18 Wells Fargo Securities: 8-8-18 Jefferies: 8-2-18 Raymond James: 8-3-18 Wells Fargo Sec t 2-16-18 $30 JonesTrading: 8-3-18 Raymond James: 8-2-18 Wells Fargo Securities: 8-3-18 Wells Fargo Securities: 8-8-18 t 2-28-18 Stifel Nicolaus: 8-2-18 Evercore ISI: 8-17-18 Morningstar Equi ty Research: 8-2-18 21 Tudor Pickering Holt & Co.: 4-23-18 Restricted: 5-16-18 34 BMO Capital Markets: 8-1T0-u1d8 or Pickering Ho &$C21o.: 3-9-18 $22 Restricted: 5-16-18 Restricted: 7-9-18 $33 Peters & Co. Limited: 8-20-18 $20 We see AM as well positioned to capitalize on AR growth, especially as the organic opportunity set appears deep with >3,300 economic drilling. We expect stout throughput volume growth to support distribution CAGR of 28-30% through 2020 with continued robust growth thereafter, all while maintaining solid coverage. Superior distribution growth, a strong B/S, and substantial coverage differentiate AM from peers, in our view. J.P. Morgan, 2/26/2018 While there are several$2pe3rmutations, weve analyzed two scenarios: (1) AM acquires AMGP and (2) AMGP acquires AM (our analysis assumes a 10% premium under each scenario). Regardless of which way the transaction g$o2e4s, we estimate the pro forma entity could grow its cash flows at a five-year CAGR of 19%, with better alignment to AR delivered better than expected 1Q1R8ersetsruiclttsed: 3-13-18 on stronger margins and a big gain on gas marketing for the quarter. While guidance would indicate the marketing gain is likely not repeatable, the companys upsStcroeatima HopoewraartdionWseil: 3-14-18 are getting incrementally more efficient driven by longer laterals and larger pads, and the company remains on track for 20% volume growth in 2018. : 3-19-18 AR. Restricted Jefferies, 5/01/2018 $24 Wells Fargo, 5/03/2018 11 Source: Broker research commentary. FactSet as of 8/21/2018. Note: TPH Research restricted on 4/17/18. $23 $2 8 $2 $2 $23 $23 $23 $22 $22 $26 $41 $40 $40 $40 $38 $38 $38 $35 $ Rest rict $ $ $2 $22 ie$2s2: $22 e$d22: uri Rest ric $ lt CONFIDENTIAL DRAFT SUBJECT TO CHANGE
II. AM Financial Analysis 12 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AM Selected Comparable Company Analysis Dist. Growth 2018E to 2020E CAGR Unit Price at 8/21/2018 Total Equity Market Value(1) Enterprise Value % Dist. to GP/IDRs Price (Yield) DCF / LP Unit EBITDA 2018E Coverage Company Current 2018E 2018E 2019E 2018E 2019E DCF / Unit DCF / Unit Source: FactSet as of 8/21/2018 and Wall Street research. (1) (2) (3) (4) Values GP and IDR cash flow at LP yield for MLPs with non-public GPs. Defined as high-growth MLP if current 2020E distribution growth CAGR is greater than 10%. Based on Wall Street consensus estimates as compiled by FactSet. Antero Midstream Partners LP announced on February 26, 2018 that its Board of Directors had formed a special committee, in conjunction with the formation of special committees at both Antero Resources and Antero Midstream GP, to evaluate potential measures and transactions that could involve Antero Midstream. Implied unit prices are calculated based on Management projections. 13 (5) LP Distribution / Unit Yield Range Implied Unit Price AM at Mgmt.AM at WSC Low Median High Low Median High 2018E Distribution$1.72$1.717.9%5.9%4.6% Yield $21.71$28.90$37.39 Metric Multiple Range Implied Unit Price(5) AM at Mgmt.AM at WSC Low Median High Low Median High 2018E LP$2.04$2.209.7x13.4x15.2x $19.74$27.38$31.07 2019E LP$2.74$2.698.0x12.0x13.7x $21.80$32.89$37.58 Metric Multiple Range Implied Unit Price (5) AM at Mgmt.AM at WSC Low Median High Low Median High 2018E EBITDA$730$71412.0x14.3x18.7x $19.39$28.20$45.25 2019E EBITDA$989$9368.3x11.2x12.7x $16.65$31.73$39.68 Mean $6,109 $8,061 15% 17% 5.8% 6.0% 13.4x 12.0x 14.9x 11.2x 1.31x Median $4,027 $5,202 15% 28% 5.6% 5.9% 13.4x 12.0x 14.3x 11.2x 1.23x Low $1,326 $1,940 5% 0% 4.5% 4.6% 9.7x 8.0x 12.0x 8.3x 1.03x High $13,691 $17,878 20% 38% 7.8% 7.9% 15.2x 13.7x 18.7x 12.7x 2.00x E&P Sponsored Mean $6,138 $8,263 14% 18% 6.4% 6.5% 11.9x 10.3x 13.9x 10.8x 1.30x E&P Sponsored Median $1,992 $3,354 15% 12% 6.6% 6.7% 11.8x 9.5x 14.3x 11.0x 1.13x Other High - Growth MLP Mean $6,071 $7,807 13% 24% 5.6% 5.8% 14.2x 12.5x 15.0x 11.5x 1.26x Other High - Growth MLP Median $5,647 $7,204 13% 30% 5.5% 5.8% 14.3x 12.4x 14.2x 11.5x 1.28x AM at WSC (3,4) $30.86 $9,507 $10,902 28% 30% 5.1% 5.5% 14.0x 11.5x 15.3x 11.7x 1.26x AM at Mgmt. Estimates $30.86 $9,507 $10,902 29% 30% 5.1% 5.6% 15.1x 11.3x 14.9x 11.0x 1.27x E&P Spon. Western Gas Partners, L.P. $50.85 $13,691 $17,878 5% 35% 7.5% 7.5% 9.7x 8.0x 14.8x 12.4x 1.09x CNX Midstream Partners LP 20.35 1,468 1,940 15% 12% 6.6% 6.7% 11.8x 8.8x 12.0x 8.3x 1.28x HG & E&P Spon.(2)` Hess Midstream Partners LP 23.76 1,326 3,354 15% 2% 5.6% 5.9% 15.2x 13.7x 13.6x 11.2x 1.13x Noble Midstream Partners LP 47.64 1,992 3,160 20% 5% 4.5% 4.6% 12.2x 11.6x 14.3x 10.9x 2.00x EQT Midstream Partners LP 55.83 12,214 14,984 15% 35% 7.8% 7.9% 10.4x 9.5x 14.9x 11.0x 1.03x Other High Growth MLP Shell Midstream Partners LP 23.40 7,267 9,206 12% 28% 6.2% 6.4% 14.5x 12.4x 15.4x 11.2x 1.10x BP Midstream Partners LP 20.59 2,302 2,607 14% 0% 5.2% 5.4% 14.6x 12.5x 18.7x 12.7x 1.23x Valero Energy Partners LP 39.52 4,027 5,202 15% 32% 5.6% 5.7% 13.4x 12.0x 12.9x 10.2x 1.40x Phillips 66 Partners LP 53.06 10,689 14,214 10% 38% 5.4% 5.8% 14.1x 13.1x 13.1x 11.8x 1.33x M K L Enterprise Value / I J Price / G H LP Distribution / Unit / F E D C B A CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Precedents | MLP Transactions Analysis 6/19/18 Cheniere Energy Inc. Cheniere Energy Partners LP Holdings 5,651 10.7x $5,526 10.4x $1,240 2.2% 0% No C-Corp Affiliate 3/26/18 Tall Grass Energy GP, LP Tallgrass Energy Partners, LP 8,361 12.0x 8,083 11.6x 1,686 0.6% 0% Yes C-Corp Affiliate 1/2/18 Archrock, Inc Archrock Partners, LP 2,438 9.6x 2,358 9.3x 607 23.4% 0% Yes C-Corp Affiliate 5/18/17 Energy Transfer Partners, LP PennTex Midstream Partners, LP 963 12.6x 873 11.4x 280 20.1% 100% Yes MLP Affiliate 4/3/17 World Point Terminals, Inc. World Point Terminals, LP 594 9.1x 570 8.8x 159 5.8% 100% Yes C-Corp Affiliate 1/27/17 Enbridge Energy Company Midcoast Energy Partners, LP 1,176 11.4x 1,194 11.6x 170 (8.6%) 100% Yes C-Corp Affiliate 10/24/16 American Midstream Partners LP JP Energy Partners LP 476 8.6x 476 8.6x 302 9.1% 0% No MLP 3rd Party 5/30/16 SemGroup Corp. Rose Rock Midstream 2,034 12.0x 2,034 12.0x 771 0.0% 0% Yes C-Corp Affiliate 8/1/16 Transocean, Inc Transocean Partners 1,202 3.5x 1,153 3.3x 259 20.8% 0% No C-Corp Affiliate 7/13/15 MPLX LP MarkWest Energy Partners, LP 22,360 22.8x 22,360 22.8x 16,612 36.3% 8% No MLP 3rd Party 4/6/15 Tesoro Logistics LP QEP Midstream Partners LP 1,145 7.5x 1,104 7.2x 394 8.6% 0% No MLP Affiliate 6/15/14 Williams Partners LP Access Midstream Partners LP 35,891 11.0x 35,891 11.0x 23,579 1.3% 0% No MLP Affiliate 11/12/14 Enterprise Products Partners LP Oiltanking Partners LP 4,289 23.0x 4,243 22.8x 1,392 1.7% 0% No MLP Affiliate 8/10/14 Kinder Morgan Inc. El Paso Pipeline Partners 13,677 11.9x 13,193 11.4x 5,421 15.4% 12% Yes C-Corp Affiliate 10/10/13 Regency Energy Partners LP PVR Partners LP 5,659 13.5x 5,659 13.5x 3,931 25.7% 1% No MLP 3rd Party 5/6/13 Inergy Midstream LP Crestwood Midstream Partners LP 2,643 14.6x 2,643 14.6x 1,661 14.5% 4% No MLP 3rd Party 2/23/11 Enterprise Products Partners Duncan Energy Partners LP 3,282 9.5x 2,973 8.6x 1,006 28.1% 0% No MLP Affiliate Mean 12,092 9.8x 11,802 9.6x 4,240 9.7% 37% Affiliate Mean 5,653 14.0x 5,642 14.0x 3,831 18.7% 22% Ov erall AMGP Proposal AM Proposal Source: Company filings, press releases, presentations and FactSet for pricing data. Represents precedent MLP transactions by affiliated and third party MLPs, Public GPs and C-Corps since 2011. Note: Considers transactions where target is an MLP. (1) (2) (3) (4) (5) Based on Wall Street research. Non-adjusted transaction TEV values affiliated and non-affiliated units at offer price. Adjusted transaction TEV value affiliated units at market price and non-affiliated units at offer price. Illustrative transaction value for PF AMGP at AMGP Proposal includes conversion of Series B units, AM existing debt, and the purchase of AM units outstanding. Excludes transaction fees. Premium to Series B implied current XR of 1.871. Illustrative transaction value for PF AMGP at AM Proposal includes conversion of Series B units, cash consideration to avoid share selling, AM existing debt, and the purchase of AM units outstanding. Excludes transaction fees. Assumes cash consideration of $3.00 per public unit outstanding. Premium to Series B implied current XR of 1.871. 14 C-Corp Buying MLP Median $4,375 10.6x $4,284 10.5x $1,078 8.8% 6% Median $4,289 10.7x $4,243 10.5x $1,240 8.6% 0% Mean 15,329 10.8x 15,121 10.6x 6,283 10.1% 25% 3rd Party Median $4,858 13.5x $4,858 13.5x $1,982 15.2% 4% Median $4,573 11.2x $4,550 11.2x $1,674 11.9% 0% Mean 12,768 11.7x 12,612 11.5x 5,634 12.4% 24% --Antero Midstream GP LP (4)Antero Midstream Partners LP $11,134 15.3x ---- --4.0% 5% Yes C-Corp Affiliate --Antero Midstream GP LP (5)Antero Midstream Partners LP 11,440 15.7x ---- --9.3% 5% Yes C-Corp Affiliate 1/29/13 Kinder Morgan Energy Partners LP Copano Energy LLC 4,858 14.9x 4,858 14.9x 3,911 23.5% 0% No MLP 3rd Party 8/27/13 Plains All American LP PAA Natural Gas Storage LP 2,531 20.1x 2,434 19.4x 755 8.5% 0% No MLP Affiliate 7/24/14 Breitburn Energy Partners QR Energy LP 2,856 9.4x 2,856 9.4x 1,811 17.5% 19% No MLP 3rd Party 8/10/14 Kinder Morgan Inc. Kinder Morgan Energy Partners 52,566 8.8x 52,351 8.8x 27,351 12.0% 12% Yes C-Corp Affiliate 10/13/14 Targa Resources Partners LP Atlas Pipeline Partners LP 6,002 17.5x 6,002 17.5x 3,866 15.0% 3% No MLP 3rd Party 1/26/15 Energy Transfer Partners, LP Regency Energy Partners LP 18,593 11.0x 18,593 11.0x 11,276 13.2% 1% No MLP Affiliate 5/6/15 Crestwood Equity Partners, LP Crestwood Midstream Partners 6,920 11.9x 6,901 11.9x 3,381 17.2% 0% No MLP Affiliate 10/26/15 Western Refining, Inc. Northern Tier Energy 5,286 11.8x 5,185 11.5x 1,982 11.7% 65% Yes C-Corp 3rd Party 11/3/15 Targa Resources Corp. Targa Resources Partners LP 12,229 10.6x 12,138 10.5x 6,672 18.4% 0% Yes C-Corp Affiliate 9/26/16 TranscanadaColumbia Pipeline Partners 3,464 4.9x 3,384 4.8x 915 11.1% 100% Yes C-Corp Affiliate 11/21/16 Sunoco Logistics Partners, LP Energy Transfer Partners, LP 54,455 9.7x 54,455 9.7x 21,965 (0.2%) 0% No MLP Affiliate 2/1/17 ONEOK, Inc ONEOK Partners, LP 23,654 12.0x 22,380 11.4x 9,309 25.8% 0% Yes C-Corp Affiliate 3/2/17 VTTI, B.V VTTI Energy Partners, LP 1,867 9.2x 1,842 9.1x 481 6.0% 100% Yes C-Corp Affiliate 8/29/17 Zenith Energy US, LP Arc Logistics Partners LP 736 12.9x 736 12.9x 407 15.2% 100% Yes MLP 3rd Party 2/7/18 Terra Nitrogen GP, Inc. Terra Nitrogen Co. LP 1,474 7.0x 1,432 6.8x $387 3.7% 100% Yes C-Corp Affiliate 5/17/18 Williams CompaniesWilliams Partners, LP 57,793 12.6x 56,013 12.2x 10,427 6.4% 0% Yes C-Corp Affiliate A B C D E F G H I J K L M Announcement Date Acquiror Target Transaction Value TEV / FY1 EBITDA(1,2) Adj. Transaction Value(1,3) Adj. TEV / FY1 EBITDA(1,3) Deal Value 1-Day Premium % Cash Taxable Transaction Buyer Type Transaction Type 8/1/18 Energy Transfer Equity, L.P. Energy Transfer Partners $66,981 8.9x 66,915 8.9x 27,179 11.2% 0% No MLP Affiliate CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AM DCF Analysis | AR Valuation Effective Date: 6/30/2018 Base Volumes Case Discounted Levered DCF Analysis Levered DCF Attributable to AM LP Unitholders Discounted Distribution Analysis Distributions Attributable to LP Unitholders 9.0x 10.5x 12.0x 8.0% 7.0% 6.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Levered DCF Analysis Supplemental Calculation Detail Discounted Distribution Analysis Supplemental Calculation Detail LP DCF per Unit $1.08 $2.74 $3.24 $3.75 $4.29 LP Distribution Per Unit $0.91 $2.21 $2.85 $3.42 $4.10 Disc ount Fac tor 0.976 0.909 0.826 0.751 Disc ount Fac tor 0.976 0.909 0.826 0.751 PV of LP DCF per Unit $1.05 $2.49 $2.67 $2.82 PV of LP Dist. per Unit $0.89 $2.01 $2.36 $2.57 Terminal M ultiple 10.5x Terminal Yield 7.0% Terminal Disc . Fac tor 0.716 Terminal Disc . Fac tor 0.716 15 Source: Management projections and FactSet as of 8/21/2018. Implied Terminal Value per Unit$41.94 Implied Value per Unit$49.76 Implied Terminal Value per Unit$32.24 Implied Value per Unit$41.27 Disc . LP Dist. Total$7.82 Disc . LP DCF Total$9.03 2H 2018E 2019E 2020E 2021E2022E 2H 2018E 2019E 2020E 2021E2022E $47.23 $52.82 $60.28 $44.52 $49.76 $56.75 $42.02 $46.94 $53.50 Discount Rate $38.81 $43.72 $48.64 $36.67 $41.27 $45.88 $34.68 $39.01 $43.33 Discount Rate 2022E Distribution Y ield 2022E DCF Multiple CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AM Illustrative AR Base Volumes Case Discounted Future Value AM Status Quo $59.16 $52.36 $51.83 $46.33 $46.08 $45.63 $40.58 $39.91 $35.28 $30.86 2019E 2020E 2021E 16 Source: Management projections and FactSet as of 8/21/2018. Note: Valuation based on annual distributions. Assumptions Management projections Valuation date as of 6/30/18 Future share price calculated at FY1 annual distributions divided by yield Discounted to 6/30/18 at 10% cost of equity Interim distributions discounted upon receipt to 6/30/18 6.0% 7.0% 8.0% Current Unit Price Yield CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AM DCF Analysis | AR Downside Valuation Effective Date: 6/30/2018 Volumes Case Discounted Levered DCF Analysis Levered DCF Attributable to AM LP Unitholders Discounted Distribution Analysis Distributions Attributable to LP Unitholders 9.0x 10.5x 12.0x 8.0% 7.0% 6.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Levered DCF Analysis Supplemental Calculation Detail Discounted Distribution Analysis Supplemental Calculation Detail LP DCF per Unit $1.01 $2.40 $3.02 $3.33 $3.76 LP Distribution Per Unit $0.86 $2.15 $2.58 $2.97 $3.42 Disc ount Fac tor 0.976 0.909 0.826 0.751 Disc ount Fac tor 0.976 0.909 0.826 0.751 PV of LP DCF per Unit $0.98 $2.19 $2.50 $2.50 PV of LP Dist. per Unit $0.84 $1.95 $2.13 $2.23 Terminal M ultiple 10.5x Terminal Yield 7.0% Terminal Disc . Fac tor 0.716 Terminal Disc . Fac tor 0.716 17 Source: Management projections and FactSet as of 8/21/2018. Implied Terminal Value per Unit$34.99 Implied Value per Unit$42.14 Implied Terminal Value per Unit$28.28 Implied Value per Unit$36.45 Disc . LP Dist. Total$7.15 Disc . LP DCF Total$8.17 2H 2018E 2019E 2020E 2021E2022E 2H 2018E 2019E 2020E 2021E2022E $34.30 $38.61 $42.91 $32.41 $36.45 $40.49 $30.66 $34.45 $38.25 Discount Rate $40.04 $44.71 $50.92 $37.76 $42.14 $47.97 $35.66 $39.76 $45.24 Discount Rate 2022E DCF Multiple 2022E Distribution Y ield CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AM Illustrative AR Downside Volumes Case Discounted Future Value AM Status Quo $49.98 $45.83 $43.86 $41.88 $39.98 $39.27 $36.29 $35.60 $32.11 $30.86 2019E 2020E 2021E 18 Source: Management projections and FactSet as of 8/21/2018. Note: Valuation based on annual distributions. Assumptions Management projections Valuation date as of 6/30/18 Future share price calculated at FY1 annual distributions divided by yield Discounted to 6/30/18 at 10% cost of equity Interim distributions discounted upon receipt to 6/30/18 6.0% 7.0% 8.0% Current Unit Price Yield CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Status Quo AM After Tax Cash Flow 7% Yield-Based Terminal Value BT LP Distribution Per Unit AT LP Distribution Per Unit Discount Factor PV of LP Dist. per Unit $4.10 $4.09 0.683 $2.79 $0.91 0.976 $0.89 $2.21 0.909 $2.01 $2.85 0.826 $2.35 $3.41 0.751 $2.56 Terminal Yield 6.0% Tax Calculation: Average Purchase Price Existing RoC $26.64 ($3.37) Beginning Tax Basis $23.27 Beg. Avg. Tax Basis / Unit Less: Distributions / Unit Plus: Net Income Allocated $23.27 (1.72) (1.07) $20.49 (2.21) (0.78) $17.50 (2.85) (0.66) $13.99 (3.42) (0.38) $10.19 (4.10) 0.05 Avg. EOY Basis / Unit $20.49 $17.50 $13.99 $10.19 $6.14 Implied Terminal Value per Unit Less: Basis at YE 2022E Less: PAL at YE 2022E $68.33 ($6.14) ($3.96) Gain Subject to Tax $58.24 Capital Gain Ordinary Gain $39.29 $18.94 Total Tax on Gain per Unit Tax on Ordinary Gain - 33.4% Tax on Capital Gain - 23.8% State Tax on Ordinary Income - 5.2% State Tax on Capital Gain - 5.2% $6.33 9.35 0.98 2.04 Total Effective Tax Rate After-Tax Future Value per Unit Terminal Disc. Factor 32.1% $49.63 0.651 19 Source: Management projections and FactSet as of 8/21/2018. Implied Present Value per Unit at 6% Terminal Yield $42.92 Implied Present Value per Unit at 7% Terminal Yield $38.41 Implied Present Value per Unit at 8% Terminal Yield $35.02 Total Tax on Gain $18.70 Total Gain $58.24 2018E 2019E 2020E 2021E 2022E Implied Terminal Future Value per Unit $68.33 Disc. LP Dist. Total $10.61 2H 2018E 2019E 2020E 2021E 2022E CONFIDENTIAL DRAFT SUBJECT TO CHANGE
III. AMGP Financial Analysis 20 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AMGP Selected Comparable Company Analysis GP EBITDA (2) CAFD (3) Unit Price at 8/21/2018 Total Entity Equity Value Total Entity TEV Implied GP Equity Value Implied GP TEV Price (Yield) (1) 2018E - 2022E Dist. CAGR Company Current 2018E 2018E 2019E 2018E 2019E EQT GP Holdings LP(6) $22.17 $6,706 $7,207 $5,488 $6,706 5.5% 5.5% 19.0x 15.4x 17.7x 14.3x 25.3% Western Gas Equity Partners, LP 35.54 7,782 9,024 5,232 7,779 6.6% 6.6% 17.6x 16.1x 15.2x 13.8x 11.1% CAFD With Series B Conversion Source: FactSet as of 8/21/2018 and Wall Street research. Note: Implied GP value calculated as the equity value of GP - equity value of the LP units held + net debt held by the GP. (1) (2) Total entity distribution yield calculated as GP distribution per unit / share over current GP unit / share price. Total entity enterprise value calculated as the equity value of GP + net debt held by the GP. GP EBITDA calculated as total distributions to the GP. For AMGP, EBITDA calculated as total distributions to IDR, LLC less Series B payments. Implied GP equity value calculated as GP share / unit price times GP shares outstanding. Cash available for distribution (CAFD) calculated as GP EBITDA less interest expense and maintenance capex. Antero Midstream Partners LP announced on February 26, 2018 that its Board of Directors had formed a special committee, in conjunction with the formation of special committees at both Antero Resources and Antero Midstream GP, to evaluate potential measures and transactions that could involve Antero Midstream. Implied share prices are calculated based on Management projections. EQGP Pro Forma for RMP acquisition announced April 2018. Total HoldCo Distributions with Series B Conversion calculated as HoldCo distributions with post-tax Series B payments added back in over (AMGP FD S/O + 18.5mm Series B converted units). (3) (4) (5) (6) (7) 21 Total HoldCo Distributions (7) Yield Range Implied Total Entity Share Price AMGP at Mgmt. Estimates AMGP at WSC Low Median High Low Median High 2018E Distribution $106 $105 6.6% 6.1% 5.5% Yield $7.78 $8.54 $9.47 Series B AMGP at Mgmt. Estimates AMGP at WSC Low Median High Low Median High 2019E $166 $177 13.8x 14.1x 14.3x $11.22 $11.42 $11.61 AMGP at Mgmt. Estimates AMGP at WSC Low Median High Low Median High With Series 2019E EBITDA $237 $235 15.4x 15.7x 16.1x B Conversion $17.82 $18.21 $18.59 Implied GP Share Pric(e5) Multiple Range Metric Implied Total Entity Share Price(5) Multiple Range Metric Series B Mean $7,244 $8,116 $5,360 $7,243 6.0% 6.1% 18.3x 15.7x 16.4x 14.1x 18.2% Median $7,244 $8,116 $5,360 $7,243 6.0% 6.1% 18.3x 15.7x 16.4x 14.1x 18.2% Low $6,706 $7,207 $5,232 $6,706 5.5% 5.5% 17.6x 15.4x 15.2x 13.8x 11.1% High $7,782 $9,024 $5,488 $7,779 6.6% 6.6% 19.0x 16.1x 17.7x 14.3x 25.3% AMGP at WSC(4) $19.36 $3,701 $3,701 $3,701 $3,696 2.6% 2.8% 36.9x 22.5x 36.9x 22.5x 58.2% AMGP at Mgmt Estimates $19.36 $3,701 $3,701 $3,701 $3,696 2.6% 2.8% 27.0x 16.5x 36.8x 22.3x 58.2% M K L Implied GP Equity Value / I J Total Entity Enterprise Value / G H Total Entity Distribution / Unit / F E D C B A CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AMGP DCF Analysis | AR Base Volumes Case AMGP with Series B Value Conversion | Valuation Effective Date: 6/30/2018 Discounted Levered DCF(1) Analysis Distributions Attributable to IDR, LLC | Before Series B Payments Discounted Distribution Analysis | Pre-Series B Payment AMGP Distributions | 1.0x Coverage | SQ AM Distribution Policy 14.0x 16.0x 18.0x 7.0% 5.5% 4.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Levered DCF(1) Analysis Supplemental Calculation Detail Discounted Distribution Analysis Supplemental Calculation Detail Adj. GP Dist. Per Share(2) Disc ount Fac tor HoldCo DCF $61 $178 $270 $352 $449 $0.30 $0.87 $1.32 $1.72 $2.20 Disc ount Fac tor 0.976 0.909 0.826 0.751 0.976 0.909 0.826 0.751 PV of GP FCF $60 $162 $223 $264 PV of GP Dist. per Share $0.29 $0.79 $1.09 $1.29 Terminal M ultiple 16.0x Terminal Yield 5.5% Terminal Disc . Fac tor 0.716 Terminal Disc . Fac tor 0.716 Less Net Debt / Corp. Adjustments (5) AM GP Shares O /S (Inc lusive of 18.5mm Series B Conversion Shares) 204.7 22 Source: Management projections and FactSet as of 8/21/2018. (1)AMGP discounted DCF defined as HoldCo DCF with Series B payments added back in. Discounted cost of equity at 10.0%. (2)Adj. GP distribution per share calculated as (AMGP DCF + Series B payment added back) / (fully diluted AMGP shares outstanding + 18.5mm converted Series B units). Implied Equity Value per Share $28.64 Implied Equity Value $5,863 Implied Terminal Value per Share $28.58 Implied Equity Value per Share $32.05 Implied Terminal Value Enterprise Value $5,858 Disc . Adj. Dist. Total $3.47 Disc . IDR Distribution Total $710 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E $27.54 $34.07 $45.50 $25.92 $32.05 $42.76 $24.43 $30.18 $40.24 Discount Rate $27.09 $30.44 $33.79 $25.50 $28.64 $31.79 $24.03 $26.98 $29.93 Discount Rate 2022E Distribution Y ield 2022E CAFD Multiple CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AMGP Illustrative AR Base Volumes Case Discounted Future Value AMGP Status Quo $44.70 $37.69 $33.45 $31.08 $28.01 $27.03 $22.90 $22.47 $18.23 $19.36 2019E 2020E 2021E 23 Source: Management projections and FactSet as of 8/21/2018. Note: Valuation based on annual distributions. Net of Series B value. Assumptions Management projections Valuation date as of 6/30/18 Future share price calculated at FY1 annual distributions divided by yield Discounted to 6/30/18 at 10% cost of equity Interim distributions discounted upon receipt to 6/30/18 4.0% 5.5% 7.0% Current Share Price Yield CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AMGP DCF Analysis | AR Downside Volumes Case AMGP with Series B Value Conversion | Valuation Effective Date: 6/30/2018 Discounted Levered DCF(1) Analysis Distributions Attributable to IDR, LLC | Before Series B Payments Discounted Distribution Analysis | Pre-Series B Payment AMGP Distributions | 1.0x Coverage | SQ AM Distribution Policy 14.0x 16.0x 18.0x 7.0% 5.5% 4.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Levered DCF(1) Analysis Supplemental Calculation Detail Discounted Distribution Analysis Supplemental Calculation Detail Adj. GP Dist. Per Share(2) Disc ount Fac tor HoldCo DCF $53 $169 $231 $287 $352 $0.26 $0.83 $1.13 $1.40 $1.72 Disc ount Fac tor 0.976 0.909 0.826 0.751 0.976 0.909 0.826 0.751 PV of GP FCF $52 $154 $191 $216 PV of GP Dist. per Share $0.26 $0.75 $0.93 $1.05 Terminal M ultiple 16.0x Terminal Yield 5.5% Terminal Disc . Fac tor 0.716 Terminal Disc . Fac tor 0.716 Less Net Debt / Corp. Adjustments (5) AM GP Shares O /S (Inc lusive of 18.5mm Series B Conversion Shares) 204.7 24 Source: Management projections and FactSet as of 8/21/2018. (1)AMGP discounted IDR distribution defined as HoldCo DCF with Series B payments added back in. Discounted cost of equity at 10.0%. (2)Adj. GP distribution per share calculated as (AMGP DCF + Series B payment added back) / (fully diluted AMGP shares outstanding + 18.5mm converted Series B units). Implied Equity Value per Share $22.71 Implied Equity Value $4,650 Implied Terminal Value per Share $22.38 Implied Equity Value per Share $25.38 Implied Terminal Value Enterprise Value $4,645 Disc . Adj. Dist. Total $3.00 Disc . IDR Distribution Total $613 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E $21.86 $26.97 $35.92 $20.58 $25.38 $33.77 $19.40 $23.90 $31.78 Discount Rate $21.51 $24.13 $26.76 $20.25 $22.71 $25.18 $19.10 $21.41 $23.72 Discount Rate 2022E Distribution Y ield 2022E CAFD Multiple CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AMGP Illustrative AR Downside Volumes Case Discounted Future Value AMGP Status Quo $35.28 $30.95 $26.71 $26.48 $23.04 $21.45 $19.70 $18.52 $15.69 $19.36 2019E 2020E 2021E 25 Source: Management projections and FactSet as of 8/21/2018. Note: Valuation based on annual distributions. Net of Series B value. Assumptions Management projections Valuation date as of 6/30/18 Future share price calculated at FY1 annual distributions divided by yield Discounted to 6/30/18 at 10% cost of equity Interim distributions discounted upon receipt to 6/30/18 4.0% 5.5% 7.0% Current Share Price Yield CONFIDENTIAL DRAFT SUBJECT TO CHANGE
IV. Analysis of Transaction 26 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Analysis at Various Exchange Ratios ($ in millions, unless otherwise noted) Comparable Metrics Trading Median Transaction Median (NTM) 14.3x 11.2x 11.2x 13.4x 12.0x 5.6% 5.9% Trading Median Transaction Median 14.3x 11.2x 11.2x 13.4x 12.0x 5.6% 5.9% Source: Company filings, and FactSet as for 8/21/2018. (1) (2) (3) (4) (5) Includes Series B conversion value of (AMGP equity value + [(AMGP equity value - $2bn) x 6%]). DCF attributable to the LP unitholders. Adjusted to reflect proposed Series B conversion, with AMGP share price calculated as (AMGP equity value + [(AMGP equity value - $2bn) x 6%])/(AMGP fully diluted shares outstanding + 18.5mm). AM Proposal: 1.710x XR and $3.00 cash consideration / unit. AMGP Proposal: 1.620x XR and $3.00 cash consideration / unit. 27 AR Downside Volumes Case AR Base Case K J D F I At Current Adjusted(3) At AMGP Proposal( 5 ) At AM Proposal(4) Exchange Ratio (At Current AMGP Sh. Price of $19.36) 1.700x 1.707x 1.750x 1.775x 1.800x 1.850x 1.865x Premium to Implied AM Unit Price (AMGP Share Price x Adj. Current XR) (0.4%) 0.0% 2.5% 4.0% 5.5% 8.4% 9.3% Implied AM Unit Price $30.74 $30.86 $31.64 $32.09 $32.55 $33.45 $33.72 Fully Diluted AM Units Outstanding 188.1 188.1 188.1 188.1 188.1 188.1 188.1 Implied Fully-Diluted AM Equity Value $5,782 $5,805 $5,952 $6,037 $6,122 $6,292 $6,343 AM Net Debt 1,400 AMGP Enterprise Value (Including Series B)(1) 3,696 1,400 3,696 1,400 3,696 1,400 3,696 1,400 1,400 3,696 3,696 1,400 3,696 Implied AM Enterprise Value(1) $10,879 $10,902 $11,049 $11,134 $11,219 $11,389 $11,440 Implied AMGP Equity Value AM Multiples: Statistic 2018E EBITDA $730 2019E EBITDA $989 2018E DCF(2) $385 2019E DCF(2) $516 Current Yield $1.66 2018E Yield $1.72 AM Statistic 2018E EBITDA $729 2019E EBITDA $851 2018E DCF(2) $384 2019E DCF(2) $452 Current Yield $1.66 2018E Yield $1.72 3,701 3,701 3,701 3,701 3,701 3,701 3,701 14.9x 11.0x 15.0x 11.2x 5.4% 5.6% 14.9x 11.0x 15.1x 11.3x 5.4% 5.6% 15.1x 11.2x 15.5x 11.5x 5.2% 5.4% 15.3x 11.3x 15.7x 11.7x 5.2% 5.3% 15.4x 15.6x 11.3x 11.5x 15.9x 16.4x 11.9x 12.2x 5.1% 5.0% 5.3% 5.1% 15.7x 11.6x 16.5x 12.3x 4.9% 5.1% 14.9x 12.8x 15.1x 12.8x 5.4% 5.6% 15.0x 12.8x 15.1x 12.8x 5.4% 5.6% 15.2x 13.0x 15.5x 13.2x 5.2% 5.4% 15.3x 13.1x 15.7x 13.4x 5.2% 5.3% 15.4x 15.6x 13.2x 13.4x 15.9x 16.4x 13.5x 13.9x 5.1% 5.0% 5.3% 5.1% 15.7x 13.4x 16.5x 14.0x 4.9% 5.1% C H G E B A CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Contribution Analysis | AR Base Case AMGP DCF Contribution Based On Actual Forecasted Taxes (Including on Series B Cash Flow) Contribution Analysis Implied Ownership Implied Exchange Ratio | Series B Adjusted(1,2) AM AMGP 2017A DCF 201 2018E DCF 201 2019E DCF 201 2020E DCF 202 2021E DCF 202 2022E DCF 202 2017A Distributions 2017A Distributions 5.364x 2018E Distributions 2018E Distributions 2019E Distributions 2019E Distributions 2020E Distributions 2020E Distributions 2021E Distributions 2021E Distributions 2022E Distributions 2022E Distributions Source: Management projections. FactSet as of 8/21/2018. Note: AM DCF calculated as LP Interest in EBITDA less interest expense, maintenance capex, and tax withholding reimbursements paid to AR. AMGP DCF calculated as IDR DCF from AM to IDR LLC less G&A and cash taxes plus post-tax Series B payments. Note: AM distributions calculated as distributions attributable to LP unitholders. AMGP distributions defined as distributions attributable to IDR, LLC less taxes paid on full distributions available to IDR, LLC less G&A. Note: Cash tax shield from Series B depreciation of ~$6mm per year. (1)Implied exchange ratios utilize adjusted AMGP share count of fully diluted AMGP shares outstanding + 18.5mm converted Series B units. (2)AM Proposal: 1.710x XR and $3.00 cash consideration / unit. AMGP Proposal: 1.620x XR and $3.00 cash consideration / unit. 28 76.1% 23.9% 70.7% 29.3% 66.6% 33.4% 65.8% 34.2% 65.0% 35.0% 64.5% 35.5% 82.9% 17.1% 75.8% 24.2% 71.4% 28.6% 68.3% 31.7% 66.6% 33.4% 65.3% 34.7% AMGP Proposal: 1.775x AM Proposal: 1.865x 7A DCF 8E DCF 9E DCF 0E DCF 1E DCF 2E DCF 3.193x 2.409x 1.994x 1.926x 1.858x 1.820x 3.140x 2.495x 2.151x 1.993x 1.878x CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Contribution Analysis | AR Downside Volumes Case AMGP DCF Contribution Based On Actual Forecasted Taxes (Including on Series B Cash Flow) Contribution Analysis Implied Ownership Implied Exchange Ratio | Series B Adjusted(1,2) AM AMGP 2017A DCF 2017A DCF 2018E DCF 201 2019E DCF 201 2020E DCF 202 2021E DCF 202 2022E DCF 202 2017A Distributions 2017A Distributions 5.364x 2018E Distributions 2018E Distributions 2019E Distributions 2019E Distributions 2020E Distributions 2020E Distributions 2021E Distributions 2021E Distributions 2022E Distributions 2022E Distributions Source: Management projections. FactSet as of 8/21/2018. Note: AM DCF calculated as LP Interest in EBITDA less interest expense, maintenance capex, and tax withholding reimbursements paid to AR. AMGP DCF calculated as IDR DCF from AM to IDR LLC less G&A and cash taxes plus post-tax Series B payments. Note: AM distributions calculated as distributions attributable to LP unitholders. AMGP distributions defined as distributions attributable to IDR, LLC less taxes paid on full distributions available to IDR, LLC less G&A. Note: Cash tax shield from Series B depreciation of ~$6mm per year. (1)Implied exchange ratios utilize adjusted AMGP share count of fully diluted AMGP shares outstanding + 18.5mm converted Series B units. (2)AM Proposal: 1.710x XR and $3.00 cash consideration / unit. AMGP Proposal: 1.620x XR and $3.00 cash consideration / unit. 29 76.1% 23.9% 70.7% 29.3% 69.0% 31.0% 66.2% 33.8% 65.7% 34.3% 65.0% 35.0% 82.9% 17.1% 75.8% 24.2% 71.8% 28.2% 69.4% 30.6% 67.8% 32.2% 66.6% 33.4% AMGP Proposal: 1.775x AM Proposal: 1.865x 8E DCF 9E DCF 0E DCF 1E DCF 2E DCF 3.193x 2.412x 2.227x 1.955x 1.915x 1.853x 3.140x 2.550x 2.264x 2.110x 1.993x CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Contribution Analysis | AR Base Case AMGP DCF Contribution Based On Theoretical Taxes On All Distributable Cash Flow Contribution Analysis Implied Ownership Implied Exchange Ratio | Series B Adjusted(1,2) AM AMGP 2017A DCF 201 2018E DCF 201 2019E DCF 201 2020E DCF 202 2021E DCF 202 2022E DCF 202 2017A Distributions 2017A Distributions 5.364x 2018 Distributions 2018 Distri 2019 Distributions 2019 Distri 2020 Distributions 2020 Distri 2021 Distributions 2021 Distri 2022 Distributions 2022 Distri Source: Management projections. FactSet as of 8/21/2018. Note: AM DCF calculated as LP Interest in EBITDA less interest expense, maintenance capex, and tax withholding reimbursements paid to AR. AMGP DCF calculated as IDR DCF less taxes on total IDR DCF less G&A expenses. AMGP distributions defined as distributions attributable to IDR, LLC less taxes paid on full distributions available to IDR, LLC less G&A. Note: Cash tax shield from Series B depreciation of ~$6mm per year. (1)Implied exchange ratios utilize adjusted AMGP share count of fully diluted AMGP shares outstanding + 18.5mm converted Series B units. (2)AM Proposal: 1.710x XR and $3.00 cash consideration / unit. AMGP Proposal: 1.620x XR and $3.00 cash consideration / unit. 30 78.6% 21.4% 72.6% 27.4% 68.7% 31.3% 67.1% 32.9% 65.9% 34.1% 65.0% 35.0% 82.9% 17.1% 75.8% 24.2% 71.4% 28.6% 68.3% 31.7% 66.6% 33.4% 65.3% 34.7% AMGP Proposal: 1.775x AM Proposal: 1.865x 7A DCF 8E DCF 9E DCF 0E DCF 1E DCF 2E DCF butions butions butions butions butions 3.670x 2.648x 2.192x 2.035x 1.931x 1.855x 3.140x 2.495x 2.151x 1.993x 1.878x CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Contribution Analysis | AR Downside Volumes Case AMGP DCF Contribution Based On Theoretical Taxes On All Distributable Cash Flow Contribution Analysis Implied Ownership Implied Exchange Ratio | Series B Adjusted(1,2) AM AMGP 2017A DCF 201 2018E DCF 2018E DCF 2019E DCF 2019E DCF 2020E DCF 2020E DCF 2021E DCF 2021E DCF 2022E DCF 2022E DCF 2017A Distributions 2017A Distributions 5.364x 2018 Distributions 2018 Distri 2019 Distributions 2019 Distri 2020 Distributions 2020 Distri 2021 Distributions 2021 Distri 2022 Distributions 2022 Distri Source: Management projections. FactSet as of 8/21/2018. Note: AM DCF calculated as LP Interest in EBITDA less interest expense, maintenance capex, and tax withholding reimbursements paid to AR. AMGP DCF calculated as IDR DCF less taxes on total IDR DCF less G&A expenses. AMGP distributions defined as distributions attributable to IDR, LLC less taxes paid on full distributions available to IDR, LLC less G&A. Note: Cash tax shield from Series B depreciation of ~$6mm per year. (1)Implied exchange ratios utilize adjusted AMGP share count of fully diluted AMGP shares outstanding + 18.5mm converted Series B units. (2)AM Proposal: 1.710x XR and $3.00 cash consideration / unit. AMGP Proposal: 1.620x XR and $3.00 cash consideration / unit. 31 78.6% 21.4% 72.6% 27.4% 70.2% 29.8% 67.7% 32.3% 66.8% 33.2% 65.9% 34.1% 82.9% 17.1% 75.8% 24.2% 71.8% 28.2% 69.4% 30.6% 67.8% 32.2% 66.6% 33.4% AMGP Proposal: 1.775x AM Proposal: 1.865x 7A DCF butions butions butions butions butions 3.670x 2.650x 2.359x 2.094x 2.012x 1.929x 3.140x 2.550x 2.264x 2.110x 1.993x CONFIDENTIAL DRAFT SUBJECT TO CHANGE
(1) Implied Exchange AM & AMGP Ratios AR Base Volumes Case 8.0% 1.436x 1.795x 8.0% 1.550x 2.189x 1.806x 1.714x 10.0% 1.441x 1.799x 10.0% 1.553x 2.189x 1.629x 1.549x 12.0% 1.446x 1.803x 12.0% 1.556x 2.190x 1.389x 1.324x AR Downside Volumes Case 8.0% 1.600x 1.995x 8.0% 1.657x 2.330x 1.923x 1.831x 10.0% 1.605x 1.999x 10.0% 1.660x 2.331x 1.736x 1.656x 12.0% 1.609x 2.003x 12.0% 1.663x 2.332x 1.481x 1.416x Source: Management projections. FactSet as of 8/21/2018. 32 Note: AM distributable cash flow defined as distributable cash flow attributable to AM LP unitholders. AMGP distributable cash flow defined as HoldCo DCF with pre-tax Series B payments added back in. AMGP share values based on Shares Outstanding including 18.5mm additional shares from Series B conversion. (1)Low AM to high AMGP and high AM to low AMGP implied unit and share prices compared to assess full range of potential exchange ratios. 2.046x 1.842x 1.568x 1.115x 1.118x 1.122x 1.282x 1.287x 1.293x Low Mid High Discount Rate Discount Rate YE 2019 YE 2020 YE 2021 Low MedHigh Low MedHigh Implied XR Implied XR PV of FSP at 10% Discount Rate PV of Future Share Price Discounted Distribution Approach Discounted Levered DCF Approach 1.936x 1.743x 1.483x 1.038x 1.041x 1.044x 1.148x 1.154x 1.159x Low Mid High Discount Rate Discount Rate YE 2019 YE 2020 YE 2021 Low MedHigh Low MedHigh PV of FSP at 10% Discount Rate Implied XR Implied XR PV of Future Share Price Discounted Distribution Approach Discounted Levered DCF Approach AMGP Proposal: 1.775x AM Proposal: 1.865x CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Premiums Paid Analysis | MLP Transactions 6/19/18 Cheniere Energy Partners LP Holdings Cheniere Energy Inc. 5,651 2.2% 10.7% 5/16/18 No (3.5%) 9.4% 3/26/18 Tallgrass Energy Partners, LP Tall Grass Energy GP, LP 8,361 0.6% (18.4%) 2/7/18 Yes 40.3% 21.7% 1/2/18 Archrock Partners, LP Archrock, Inc 2,438 23.4% 23.4% NA Yes 27.1% 5.6% 5/18/17 PennTex Midstream Partners, LP Energy Transfer Partners, LP 963 20.1% 17.8% 10/24/16 Yes 0.6% (4.4%) 4/3/17 World Point Terminals, LP World Point Terminals, Inc. 594 5.8% 5.8% NA Yes N/A (10.1%) 1/27/17 Midcoast Energy Partners, LP Enbridge Energy Company 1,176 (8.6%) (8.6%) NA Yes (19.1%) (14.4%) 10/24/16 JP Energy Partners LP American Midstream Partners 476 9.1% 9.1% NA No (60.9%) (7.5%) 8/1/16 Transocean Partners LLC Transocean Inc. 1,202 20.8% 20.8% NA No 14.3% (8.4%) 11/3/15 Targa Resources Partners LP Targa Resources Corp. 12,229 18.4% 18.4% NA Yes (7.3%) (13.0%) 7/13/15 MarkWest Energy Partners, LP MPLX LP 22,360 36.3% 36.3% NA No (44.8%) (27.4%) 4/6/15 QEP Midstream Partners LP Tesoro Logistics LP 1,145 8.6% (14.0%) 10/18/14 No (7.7%) (32.5%) 6/15/14 Access Midstream Partners LP Williams Partners LP 35,891 1.3% 1.3% NA No (23.1%) (42.2%) 11/12/14 Oiltanking Partners LP Enterprise Products Partners LP 4,289 1.7% (0.9%) 9/30/14 No (21.5%) (41.9%) 8/10/14 El Paso Pipeline Partners Kinder Morgan Inc. 13,677 15.4% 15.4% NA Yes (49.7%) (41.7%) 10/10/13 PVR Partners LP Regency Energy Partners LP 5,659 25.7% 25.7% NA No N/A (33.9%) 5/6/13 Crestwood Midstream Partners LP Inergy Midstream LP 2,643 14.5% 14.5% NA No N/A (35.7%) 2/23/11 Duncan Energy Partners LP Enterprise Products Partners 3,282 28.1% 28.1% NA No 35.5% (22.8%) Source: Company filings, press releases, presentations and FactSet for pricing data. Represents precedent MLP transactions by affiliated and third party MLPs, Public GPs and C-Corps since 2011. Note: Considers transactions where target is an MLP. Implied transaction premium to AM based on adjusted offer XR of 1.714x adjusted to reflect proposed Series B conversion, with AMGP share price calculated as (AMGP equity value + [(AMGP equity value - $2bn) x 6%])/(AMGP fully diluted shares outstanding + 18.5mm). 33 Median 12.0% 13.2% Mean 12.4% 11.5% Taxable Transactions Median 9.2% 11.9% Taxable Transactions Mean 10.3% 9.7% 1/29/13 Copano Energy LLC Kinder Morgan Energy Partners LP 4,858 23.5% 23.5% NA No N/A (32.0%) 8/27/13 PAA Natural Gas Storage LP Plains All American LP 2,531 8.5% 8.5% NA No (47.2%) (34.2%) 7/24/14 QR Energy LP Breitburn Energy Partners 2,856 17.5% 17.5% NA No N/A (44.8%) 8/10/14 Kinder Morgan Energy Partners Kinder Morgan Inc. 52,566 12.0% 12.0% NA Yes (49.7%) (41.7%) 10/13/14 Atlas Pipeline Partners LP Targa Resources Partners LP 6,002 15.0% 15.0% NA No N/A (40.5%) 1/26/15 Regency Energy Partners LP Energy Transfer Partners, LP 18,593 13.2% 13.2% NA No N/A (35.7%) 5/6/15 Crestwood Midstream Partners Crestwood Equity Partners, LP 6,920 17.2% 17.2% NA No (44.3%) (35.7%) 10/26/15 Northern Tier Energy Western Refining, Inc. 5,286 11.7% 11.7% NA Yes N/A (10.3%) 5/30/16 Rose Rock Midstream SemGroup Corp. 2,034 0.0% 0.0% NA Yes (12.2%) (3.7%) 9/26/16 Transcanada Columbia Pipeline Partners LP 3,464 11.1% 9.9% 3/16/16 Yes (7.8%) (7.1%) 11/21/16 Energy Transfer Partners, LP Sunoco Logistics Partners, LP 54,455 (0.2%) (0.2%) NA No (12.2%) (3.9%) 2/1/17 ONEOK Partners, LP ONEOK, Inc 23,654 25.8% 25.8% NA Yes 25.0% (11.9%) 3/2/17 VTTI Energy Partners, LP VTTI, B.V 1,867 6.0% 6.0% NA Yes N/A (12.2%) 8/29/17 Arc Logistics Partners LP Zenith Energy US, LP 736 15.2% 15.2% NA Yes N/A 6.4% 2/7/18 Terra Nitrogen Co. LP Terra Nitrogen GP, Inc. 1,474 3.7% 3.7% NA Yes N/A 3.0% 5/17/18 Williams Partners, LP Williams Companies 57,793 6.4% 16.5% 3/15/18 Yes 16.1% 9.5% Premium A B C D E F G H I J Announcement Date Target Acquiror Transaction Value 1-Day Premium Unaffected 1-Day Premium Unaffected Date Taxable Transaction Acquiror Performance Since Day Prior to Announcement AMZ Performance Since Day Prior to Announcement 8/1/18 Energy Transfer Partners, LP Energy Transfer Equity, L.P. $66,981 11.2% 11.2% NA No (0.5%) 4.2% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
V. Pro Forma Impact 34 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
A. AMGP Proposal 35 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Transaction Assumptions | Pre-Unitholder Tax Transaction Assumptions Sources & Uses At Proposed Transaction Transaction effective on 6/30/2018 To acquire AM, AMGP will convert into a C-Corp in a 100% stock transaction Base case assumes: AMGP Equity Issued $6,271 Purchase AM Units Outstanding $5,900 Each outstanding AM common unit exchanged for 1.620 AMGP shares and $3.00 cash per AM unit, for an all-equity equivalent exchange ratio of 1.775x All existing Series B units exchanged for 18.5mm AMGP shares (1) AM Debt Rolled to AMGP Balance Sheet 1,400 Conversion of Series B Units 358 Revolver Draw 564 Cash Consideration to Avoid Share Selling 564 Assumes Company provided pf coverage ratio to drive pf dividend policy Step-up depreciation due to Transaction Fees (2) 13 Capex allocated on a 5-20 year MACRs schedule depending on capex category Goodwill based on inside tax basis and 704(c) and 743(b) extrapolation provided by PwC AM Existing Debt 1,400 New capex financed by $500mm senior unsecured issuance in 2018, 2019, 2020, and 2022 at a 5.000% interest rate Series B Conversion AMGP Ownership Comparison at 1.620x XR At Transaction Proposed At Current AMGP SQ Units Outstanding 186.2 186.2 Implied XR AMGP Common Units Issued 1.620x 304.8 - Existing Public 15.4% Pre-Series B Fully Diluted Post-Transaction Share Count 186.2 491.0 Prior AM Public 28.1% 20-Day AMGP VWAP as of 08/21/2018 $19.08 $19.08 Mgmt. 7.3% Impled Pre-Series Market Cap ($mm) $3,552 $9,366 Sponsors 38.0% Existing Public 42.0% Series B 3.6% Series B Valuation Threshold ($mm) $2,000 NA Series B Conversion Rate 6.00% NA Sponsors 13.9% 2018E Series B Cash Flows NA NA Illustrative Yield NA NA AR 31.7% Mgmt. 20.0% Impled Post-Series Market Cap ($mm) $3,645 $9,718 % Shares Issued to AM % AMGP Shares Oustanding % Class B Shares Outstanding --97.4% 2.6% 59.8% 36.6% 3.6% Source: FactSet as of 8/21/2018. (1) Includes equity issued for Series B unit conversion into AMGP shares. (2) Provided by Management. 36 3.6% Series B share under AMGP proposal Implied Series B Valuation $93 $353 Post-Series B Fully Diluted Post-Transaction Share Count 191.1 509.5 AMGP Shares Issued for Series B Conversion 4.9 18.5 Pro Forma Status Quo AMGP Proposal Total Uses$8,236 Total Sources$8,236 Uses Sources CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Distributable Cash Flow Accretion / (Dilution) Pre Unitholder Tax | AM & AMGP | AR Base Case AM Accretion / (Dilution) - % At 1.775x Exchange Ratio 1.775 XR AMGP Accretion / (Dilution) - % At 1.0x AM Coverage 43.1% 1.620x XR 12.9% 12.9% 13.9% 9.9% 9.9% 13.9% 6.3% 6.3% 30.2% 0.3% 0.3% 5.1% 25.2% 4.3% 5.1% 4.3% 21.7% 11..99%% (1.2%) 17.8% (1.2%) (6.8%) 2H 2018E (6.8%) 2019E 2020E 2021E 2022E 2H 2$011.80E8 $1.00 $1.08 2$021.97E4 $2.71 $2.91 $230.2204E $3.30 $3.56 $32.70521E $3.91 $4.23 $4.229022E $4.51 $4.88 Status Quo AM: (1) $1.08 $2.74 $2.71 $3.24 $3.30 $3.75 $3.91 $4.29 $4.51 2H 2018E 2019E 2020E 2021E 2022E PF AMGP at 1.620x(:2) $1.00 Pro Forma AMGP: $0.59 $1.59 $1.94 $2.31 $2.66 Accretion / (Dilution) Analysis at Various XRs Accretion / (Dilution) Analysis at Various XRs 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E 1.775x 1.797x 1.820x 1.842x 1.865x Source: Management projections and FactSet as of 8/21/2018. (1) 1.620x represents implied XR at 1.620x equity XR and no cash consideration. (2) 1.775x represents implied XR at 1.620x equity XR and cash consideration of $3.00 / unit. Cash assumed to be used to purchase additional secondary shares. 37 43.1% 30.2% 25.2% 21.7% 17.8% 41.9% 29.1% 24.1% 20.7% 16.9% 40.8% 28.1% 23.1% 19.7% 15.9% 39.6% 27.0% 22.1% 18.8% 15.0% 38.5% 26.0% 21.1% 17.8% 14.1% Exchange Ratio Exchange Ratio 1.775x 0.3% 6.3% 9.9% 12.9% 13.9% 1.797x 1.820x 1.842x 1.865x 0.7% 6.7% 10.4% 13.4% 14.4% 1.1% 7.2% 10.9% 13.8% 14.9% 1.6% 7.6% 11.3% 14.3% 15.4% 2.0% 8.1% 11.8% 14.8% 15.9% Status Quo AMGP:$0.42$1.26$1.60$1.96$2.34 $ Acc / (Dil):$0.16$0.33$0.34$0.35$0.33 ($0.07)($0.03)$0.06$0.16$0.22 $0.00$0.17$0.32$0.48$0.60 PF AMGP at 1.775x: $1.08 $2.91 $3.56 $4.23 $4.88 $ Acc / (Dil):($0.07) ($0.03) $0.06 $0.16 $0.22 $ Acc / (Dil):$0.00 $0.17 $0.32 $0.48 $0.60 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Distribution Accretion / (Dilution) Pre Unitholder Tax | AM & AMGP | AR Base Case AM Accretion / (Dilution) - % At 1.775x Exchange Ratio AMGP Accretion / (Dilution) - % 50.6% 50.9% 29.4% 19.7% 12.8% 2H 2018E 2019E 2020E 2021E 2022E $0.82 $2.39 $3.09 $3.72 $4.47 Pro Forma AMGP: Accretion / (Dilution) Analysis at Various XRs Accretion / (Dilution) Analysis at Various XRs 2H 2018E 2019E 2020E 2021E 2022E 1.775x 1.775x 1.797x 1.797x 1.820x 1.820x 1.842x 1.842x 1.865x 1.865x 38 Source: Management projections and FactSet as of 8/21/2018. Note: 1.775x represents implied XR at 1.620x equity XR and cash consideration of $3.00 / unit. Cash assumed to be used to purchase additional secondary shares. 50.6% 50.9% 29.4% 19.7% 12.8% 49.3% 49.6% 28.3% 18.8% 11.9% 48.1% 48.4% 27.2% 17.8% 11.0% 46.9% 47.2% 26.2% 16.8% 10.1% 45.7% 46.0% 25.2% 15.9% 9.2% Exchange Ratio (9.7%) 8.1% 8.4% 8.7% 9.0% (9.3%) 8.5% 8.9% 9.2% 9.5% (8.9%) 9.0% 9.3% 9.7% 10.0% (8.5%) 9.4% 9.8% 10.1% 10.4% (8.1%) 9.9% 10.2% 10.6% 10.9% Exchange Ratio Status Quo AM: $ Acc / (Dil): PF AMGP Coverage: 1.313x 1.220x 1.152x 1.137x 1.093x Status Quo AMGP:$0.31 $0.89 $1.35 $1.75 $2.23 Pro Forma AMGP:$0.45 $1.30 $1.68 $2.03 $2.44 $ Acc / (Dil):$0.14 $0.42 $0.35 $0.29 $0.23 PF AMGP Coverage: 1.313x 1.220x 1.152x 1.137x 1.093x 8.1% 8.4% 8.7% 9.0% (9.7%) 2H 2018E 2019E 2020E 2021E 2022E $0.91 $2.21 $2.85 $3.42 $4.10 ($0.09) $0.18 $0.24 $0.30 $0.37 2H 2018E2019E2020E2021E2022E CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Distributable Cash Flow Accretion / (Dilution) Pre Unitholder Tax | AM & AMGP | AR Downside Volumes Case AM Accretion / (Dilution) - % At 1.775x Exchange Ratio AMGP Accretion / (Dilution) - % At 1.0x AM Coverage 9.1% 8.3% 48.2% 36.2% 2.9% 2.2% 26.7% 22.8% (1.8%) 10.2% 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E Pro Forma AMGP: $0.99 $2.47 $3.27 $3.63 $3.84 Accretion / (Dilution) Analysis at Various XRs Accretion / (Dilution) Analysis at Various XRs 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E 1.775x 1.775x 1.797x 1.797x 1.820x 1.820x 1.842x 1.842x 1.865x 1.865x 39 Source: Management projections and FactSet as of 8/21/2018. Note: 1.775x represents implied XR at 1.620x equity XR and cash consideration of $3.00 / unit. Cash assumed to be used to purchase additional secondary shares. 48.2% 36.2% 26.7% 22.8% 10.2% 46.9% 35.1% 25.7% 21.8% 9.9% 45.7% 34.0% 24.7% 20.9% 9.6% 44.6% 32.9% 23.7% 19.9% 9.3% 43.4% 31.8% 22.7% 19.0% 9.0% Exchange Ratio (1.8%) 2.9% 8.3% 9.1% 2.2% (1.4%) 3.4% 8.8% 9.6% 3.2% (1.0%) 3.8% 9.3% 10.0% 4.2% (0.6%) 4.3% 9.7% 10.5% 5.2% (0.2%) 4.7% 10.2% 11.0% 6.1% Exchange Ratio Status Quo AM:$1.01 $2.40 $3.02 $3.33 $3.76 $ Acc / (Dil):($0.02) $0.07 $0.25 $0.30 $0.08 Status Quo AM:$0.38$1.02$1.46$1.67$1.96 Pro Forma AMGP:$0.54$1.35$1.79$1.98$2.14 $ Acc / (Dil):$0.16$0.33$0.33$0.32$0.18 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Distribution Accretion / (Dilution) Pre Unitholder Tax | AM & AMGP | AR Downside Volumes Case AM Accretion / (Dilution) - % At 1.775x Exchange Ratio AMGP Accretion / (Dilution) - % 57.0% 38.7% 35.1% 10.1% 7.6% 25.8% 2.8% 13.2% (12.2%) (5.5%) 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E Accretion / (Dilution) Analysis at Various XRs Accretion / (Dilution) Analysis at Various XRs 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E 1.775x 1.775x 1.797x 1.797x 1.820x 1.820x 1.842x 1.842x 1.865x 1.865x 40 Source: Management projections and FactSet as of 8/21/2018. Note: 1.775x represents implied XR at 1.620x equity XR and cash consideration of $3.00 / unit. Cash assumed to be used to purchase additional secondary shares. 57.0% 35.1% 38.7% 25.8% 13.2% 55.7% 34.0% 37.6% 24.8% 12.9% 54.4% 32.9% 36.5% 23.8% 12.6% 53.2% 31.8% 35.4% 22.8% 12.3% 51.9% 30.8% 34.4% 21.9% 12.0% Exchange Ratio (12.2%) (5.5%) 10.1% 7.6% 2.8% (11.8%) (5.1%) 10.6% 8.1% 3.8% (11.4%) (4.6%) 11.1% 8.5% 4.8% (11.0%) (4.3%) 11.6% 9.0% 5.8% (10.7%) (3.9%) 12.1% 9.5% 6.8% Exchange Ratio Status Quo AM:$0.86 $2.15 $2.58 $2.97 $3.42 Pro Forma AMGP:$0.75$2.03$2.84$3.19$3.52 $ Acc / (Dil):($0.10)($0.12)$0.26$0.22$0.10 PF AMGP Coverage: 1.313x 1.220x 1.152x 1.137x 1.093x Status Quo AMGP:$0.27 $0.85 $1.15 $1.43 $1.75 Pro Forma AMGP:$0.42$1.14$1.60$1.80$1.98 $ Acc / (Dil):$0.15$0.30$0.45$0.37$0.23 PF AMGP Coverage: 1.313x 1.220x 1.152x 1.137x 1.093x CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Distribution Accretion / (Dilution) Pre Unitholder Tax | At Various PF AMGP Coverage Ratios & Exchange Ratios | AR Base Case 2H 2018E AM Accretion / (Dilution) - % 2019E AM Accretion / (Dilution) - % Adjusted XR Adjusted XR 1.775x 1.775x 1.797x 1.797x 1.820x 1.820x 1.842x 1.842x 1.865x 1.865x 41 Source: Management projections and FactSet as of 8/21/2018. Note: 1.775x represents implied XR at 1.620x equity XR and cash consideration of $3.00 / unit. Cash assumed to be used to purchase additional secondary shares. Exchange Ratio Exchange Ratio 1.000x1.150x Breakeven Coverage 1.186x Management Distribution Coverage 1.313x 1.450x 18.4%(9.7%) 19.0%3.5% 19.5%4.0% 20.0%4.4% 20.4%4.8% 0.0% 0.4% 0.9% 1.3% 1.7% (9.7%) (9.3%) (8.9%) (8.5%) (8.1%) (18.2%) (17.8%) (17.4%) (17.1%) (16.8%) Coverage Ratio 1.000x1.150x Management Distribution Coverage 1.220x 1.300x Breakeven Coverage 1.320x 31.2%14.5% 31.8%15.0% 32.4%15.4% 32.9%15.9% 33.5%16.4% 8.1% 8.5% 9.0% 9.4% 9.9% 1.5% 1.9% 2.4% 2.8% 9.9% 0.0% 0.4% 0.9% 1.3% 1.7% Coverage Ratio CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Growth Comparison at AMGP Pre Unitholder Tax | SQ AM, SQ AMGP, & PF AMGP Proposal AR Base Case AM $2.04 $2.74 $3.24 $3.75 $4.29 16% AM GP @ 1.0x AM Coverage $0.77 $1.26 $1.60 $1.96 $2.34 23% PF AM GP $1.22 $1.64 $2.00 $2.38 $2.75 19% AR Downside Volumes Case AM $2.04 $2.40 $3.02 $3.33 $3.76 16% AM GP @ 1.0x AM Coverage $0.77 $1.02 $1.46 $1.67 $1.96 24% PF AM GP $1.09 $1.39 $1.84 $2.05 $2.16 16% AR Base Case AM $1.72 $2.21 $2.85 $3.42 $4.10 23% AM GP $0.54 $0.89 $1.35 $1.75 $2.23 36% PF AM GP $0.93 $1.35 $1.74 $2.10 $2.52 23% AR Downside Volumes Case AM $1.72 $2.15 $2.58 $2.97 $3.42 17% AM GP $0.54 $0.85 $1.15 $1.43 $1.75 27% PF AM GP $0.85 $1.14 $1.60 $1.80 $1.98 20% Source: Management projections and FactSet as of 8/21/2018. Note: Coverage assumptions as provided by Management. PF AMGP coverage extrapolated based on fixed distributions provided for AR Base Case. SQ AM coverage for AR Base Case extrapolated based on fixed distributions provided for AR Base Case. SQ AM coverage for AR Downside Volumes base extrapolated based on fixed distributions provided for AR Downside Volumes Case. 42 SQ AM M gmt Dist Coverage (Base Case) 1.27x 1.31x 1.16x 1.11x 1.05x SQ AM M gmt Dist Coverage (AR Downside Volumes Case) 1.26x 1.16x 1.21x 1.14x 1.12x PF AM GP M anagement Dividend Coverage 1.31x 1.22x 1.15x 1.14x 1.09x 2018E 2019E 2020E 2021E 2022E 2019E - 2022E CAGR Distributions / Dividends per Unit / Share 2018E 2019E 2020E 2021E 2022E 2019E - 2022E CAGR DCF per Unit / Share CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Midstream Distribution Growth vs. Yield MLPs vs. C-Corps Non-Sponsored MLPs Midstream C-Corps Denotes MLPs without IDRs 16.0% 14.0% 12.0% 10.0% HEP ANDTXLP 8.0% EQM DCP ENBL WGP 6.0% VLP BP M MCPEQP 4.0% 2.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Distribution Growth (2018E-2022E) CAGR (%) 43 Sources: Company filings, FactSet estimates as of 8/21/2018 Note: Companies selected represent dividend/distribution paying midstream C-Corps and MLPs (both with and without IDRs). 2018E Yield (%) E&P Sponsored Other High Growth SM LP PF AMGP 2019E 2022E Distribution Growth CAGR (AR Downside Case) = ~20% PF AMGP 2019E 2022E Distribution Growth CAGR (AR Base Case) = ~23% ENLK EQG NBL P X KM I SEM G WES CNXM TRGP ENLC SHLX PSXPHESM M P TRP PAGPWM B AM GP AM y = 0.0769e-1.748x R² = 0.5969 y = 0.0769e-1.757x R² = 0.4466 4 of 7 E&P-sponsored MLPs (not including AM) are above the regression line that includes AMGP All C-Corps except TEGP are below the regression line that includes AMGP Excluding AMGP I ncluding AMGP CONFIDENTIAL DRAFT SUBJECT TO CHANGE
PF AMGP Selected Public Trading Comparables Midstream C-Corps & High Growth MLPs Dist. Growth DCF (2,3) Unit Price at 8/21/2018 Price (Yield) 2018E to EBITDA (1) Company Equity Value TEV Current 2018E 2020E CAGR 2018E 2019E 2018E 2019E 2018E Kinder Morgan Inc ONEOK, Inc. Plains All American Pipeline GP SemGroup Corporation Targa Resources Corp. The Williams Companies, Inc. $17.96 67.47 26.62 25.80 54.29 30.52 $39,635 27,735 7,537 2,028 12,080 37,082 $76,189 36,074 7,433 4,832 18,322 58,122 4.5% 4.9% 4.5% 7.3% 6.7% 4.5% 4.5% 4.8% 4.4% 7.4% 6.7% 5.3% 25% 11% 10% 5% 1% 6% 9.7x 15.6x 12.2x 10.9x 14.2x 18.4x 8.5x 15.1x 9.5x 8.1x 12.8x 17.6x 10.1x 15.1x 21.8x 12.2x 13.9x 23.4x 10.0x 14.2x 20.1x 10.5x 11.8x 22.0x 2.6x 1.3x 1.8x 1.5x 1.1x 1.3x CNX Midstream Partners LP EQT Midstream Partners LP Hess Midstream Partners LP Noble Midstream Partners LP BP Midstream Partners LP Shell Midstream Partners LP Valero Energy Partners LP $20.35 55.83 23.76 47.64 20.59 23.40 39.52 $1,468 12,214 1,326 1,992 2,302 7,267 4,027 $1,940 14,984 3,354 3,160 2,607 9,206 5,202 6.6% 7.8% 5.6% 4.5% 5.2% 6.2% 5.6% 6.7% 7.9% 5.9% 4.6% 5.4% 6.4% 5.7% 11.8x 10.4x 15.2x 12.2x 14.6x 14.5x 13.4x 8.8x 9.5x 13.7x 11.6x 12.5x 12.4x 12.0x 12.0x 14.9x 13.6x 14.3x 18.7x 15.4x 12.9x 8.3x 11.0x 11.2x 10.9x 12.7x 11.2x 10.2x 1.3x 1.0x 1.1x 2.0x 1.2x 1.1x 1.4x 15% 15% 15% 20% 14% 12% 15% Source: FactSet as of 8/21/2018 and Wall Street research. Note: Assumes AMGP share price of $19.34 for offer / AM Proposal metrics. (1) (2) (3) (4) For C-corps, CAGR calculated using Q4 2017 dividend annualized and 2020E dividend. Calculated as equity value to LP DCF. DCF calculated as EBITDA less interest expense and maintenance capital. Defined as high-growth MLP if current 2020E distribution growth CAGR is greater than 10%. 44 PF AMGP at AMGP Proposal $19.36 $9,739 $10,879 4.7% 4.9% 28% 15.4x 11.4x 13.9x 11.0x 1.2x PF AMGP at AM Proposal $19.36 $10,045 $11,440 5.3% 5.2% 29% 16.4x 12.1x 14.6x 11.6x 1.1x Mean $12,053 $18,571 5.7% 5.8% 13% 13.3x 11.7x 15.2x 12.6x 1.4x Median $7,267 $7,433 5.6% 5.7% 14% 13.4x 12.0x 14.3x 11.2x 1.3x Midstream C-Corp Mean $21,016 $33,495 5.4% 5.5% 10% 13.5x 11.9x 16.1x 14.7x 1.6x Midstream C-Corp Median $19,908 $27,198 4.7% 5.1% 8% 13.2x 11.1x 14.5x 13.0x 1.4x High-Growth MLP Mean $4,371 $5,779 5.9% 6.1% 15% 13.2x 11.5x 14.5x 10.8x 1.3x High-Growth MLP Median $2,302 $3,354 5.6% 5.9% 15% 13.4x 12.0x 14.3x 11.0x 1.2x High - Growth MLPs(4) Non-IDR Midstream C-Corps L Coverage J K Enterprise Value / H I Equity Value / G E F Distribution / Unit / D C B A CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Has / Gets Analysis | AR Base Case Pre Unitholder Tax | Valuation Effective Date: 6/30/2018 Discounted Levered DCF Analysis Discounted Levered DCF Analysis 9.0x 10.5x 12.0x 10.0x 12.0x 14.0x 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Distribution Analysis Discounted Distribution Analysis 8.0% 7.0% 6.0% 7.0% 6.0% 5.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Cash Flow | Unlevered FCF(2) | Discounted at WACC 11.0x 13.0x 15.0x 7.0% 8.5% 10.0% Source: Management projections and FactSet as of 8/21/2018. (1) Implied XR at 1.620x equity XR and cash consideration of $3.00 / unit. Cash consideration added to implied share price at 1.620x XR. (2) Unlevered free cash flow defined as PF AMGP EBITDA less cash taxes and capital expenditures. Implied equity value per share backs out implied AM Q2 2018 net debt per share. 45 $43.66 $50.70 $57.73 $41.60 $48.30 $55.00 $39.66 $46.05 $52.43 Discount Rate 2022E Terminal M ultiple $48.64 $55.21 $64.41 $45.96 $52.13 $60.76 $43.50 $49.29 $57.39 Discount Rate $47.23 $52.82 $60.28 $44.52 $49.76 $56.75 $42.02 $46.94 $53.50 Discount Rate 2022E Distribution Yield 2022E Distribution Yield $46.32 $53.13 $59.93 $43.88 $50.27 $56.65 $41.64 $47.63 $53.62 Discount Rate $38.81 $43.72 $48.64 $36.67 $41.27 $45.88 $34.68 $39.01 $43.33 Discount Rate 2022E DCF M ultiple 2022E DCF M ultiple XR Adjusted PF AMGP Implied Share Price |1.775x XR(1) Stand Alone AM Implied Unit Price CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Has / Gets Analysis | AR Downside Volumes Case Pre Unitholder Tax | Valuation Effective Date: 6/30/2018 Discounted Levered DCF Analysis Discounted Levered DCF Analysis 9.0x 10.5x 12.0x 10.0x 12.0x 14.0x 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Distribution Analysis Discounted Distribution Analysis 8.0% 7.0% 6.0% 7.0% 6.0% 5.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Cash Flow | Unlevered FCF(2) | Discounted at WACC 11.0x 13.0x 15.0x 7.0% 8.5% 10.0% Source: Management projections and FactSet as of 8/21/2018. (1) Implied XR at 1.620x equity XR and cash consideration of $3.00 / unit. Cash consideration added to implied share price at 1.620x XR. (2) Unlevered free cash flow defined as PF AMGP EBITDA less cash taxes and capital expenditures. Implied equity value per share backs out implied AM Q2 2018 net debt per share. 46 $36.76 $42.29 $47.83 $35.07 $40.34 $45.61 $33.48 $38.50 $43.52 Discount Rate 2022E Terminal M ultiple $39.31 $44.46 $51.68 $37.20 $42.03 $48.80 $35.25 $39.79 $46.14 Discount Rate $40.04 $44.71 $50.92 $37.76 $42.14 $47.97 $35.66 $39.76 $45.24 Discount Rate 2022E Distribution Yield 2022E Distribution Yield $37.95 $43.31 $48.66 $36.01 $41.03 $46.05 $34.21 $38.93 $43.64 Discount Rate $34.30 $38.61 $42.91 $32.41 $36.45 $40.49 $30.66 $34.45 $38.25 Discount Rate 2022E DCF M ultiple 2022E DCF M ultiple XR Adjusted PF AMGP Implied Share Price |1.775x XR(1) Stand Alone AM Implied Unit Price CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Has / Gets Analysis | AR Base Case Pre Unitholder Tax | Valuation Effective Date: 6/30/2018 Discounted Levered DCF Analysis Discounted Levered DCF Analysis 14.0x 16.0x 18.0x 10.0x 12.0x 14.0x 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Distribution Analysis Discounted Distribution Analysis 7.0% 5.5% 4.0% 7.0% 6.0% 5.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Cash Flow | Unlevered FCF(1) | Discounted at WACC 11.0x 13.0x 15.0x 7.0% 8.5% 10.0% Source: Management projections and FactSet as of 8/21/2018. (1) Unlevered free cash flow defined as PF AMGP EBITDA less cash taxes and capital expenditures. Implied equity value per share backs out implied AM Q2 2018 net debt per share. 47 $25.10 $29.44 $33.78 $23.83 $27.96 $32.10 $22.63 $26.57 $30.51 Discount Rate 2022E Terminal M ultiple $28.17 $32.23 $37.91 $26.52 $30.33 $35.65 $25.00 $28.57 $33.57 Discount Rate $27.54 $34.07 $45.50 $25.92 $32.05 $42.76 $24.43 $30.18 $40.24 Discount Rate 2022E Distribution Yield 2022E Distribution Yield $26.74 $30.94 $35.14 $25.24 $29.18 $33.12 $23.85 $27.55 $31.25 Discount Rate $27.09 $30.44 $33.79 $25.50 $28.64 $31.79 $24.03 $26.98 $29.93 Discount Rate 2022E DCF M ultiple 2022E CAFD M ultiple PF AMGP Implied Share Price Stand Alone AMGP Implied Share Price CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Has / Gets Analysis | AR Downside Volumes Case Pre Unitholder Tax | Valuation Effective Date: 6/30/2018 Discounted Levered DCF Analysis Discounted Levered DCF Analysis 14.0x 16.0x 18.0x 10.0x 12.0x 14.0x 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Distribution Analysis Discounted Distribution Analysis 7.0% 5.5% 4.0% 7.0% 6.0% 5.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Cash Flow | Unlevered FCF(1) | Discounted at WACC 11.0x 13.0x 15.0x 7.0% 8.5% 10.0% Source: Management projections and FactSet as of 8/21/2018. (1) Unlevered free cash flow defined as PF AMGP EBITDA less cash taxes and capital expenditures. Implied equity value per share backs out implied AM Q2 2018 net debt per share. 48 $20.84 $24.26 $27.67 $19.80 $23.05 $26.30 $18.81 $21.91 $25.01 Discount Rate 2022E Terminal M ultiple $22.41 $25.59 $30.05 $21.11 $24.09 $28.27 $19.91 $22.71 $26.63 Discount Rate $21.86 $26.97 $35.92 $20.58 $25.38 $33.77 $19.40 $23.90 $31.78 Discount Rate 2022E Distribution Yield 2022E Distribution Yield $21.57 $24.88 $28.19 $20.38 $23.48 $26.58 $19.27 $22.18 $25.09 Discount Rate $21.51 $24.13 $26.76 $20.25 $22.71 $25.18 $19.10 $21.41 $23.72 Discount Rate 2022E DCF M ultiple 2022E CAFD M ultiple PF AMGP Implied Share Price Stand Alone AMGP Implied Share Price CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Illustrative Discounted Future Value Pre Unitholder Tax | SQ AM & PF AMGP | AR Base Case & AR Downside Volumes Case PF AMGP | 1.775x XR Adjusted(1) | AR Base Case SQ AM | AR Base Case $52.42 $51.83 $46.08 $39.91 $35.28 2019E SQ AM | AR e Volumes Case $51.64 $41.25 $41.88 $37.56 $36.29 $39.27 $35.60 $32.11 2019E 2020E 2021E 2019E 2020E 2021E Source: Management projections and FactSet as of 8/21/2018. Note: Valuation based on annual distributions. (1) Implied XR at 1.620x equity XR and cash consideration of $3.00 / unit. 49 Assumptions Management projections | Valuation date as of 6/30/18 Future share price calculated at FY1 distributions divided by yield Discounted to 6/30/18 at 10% cost of equity Interim distributions discounted upon receipt to 6/30/18 $30.86 8.0% Current AM Unit Price 5.0% 6.0% 7.0% Yield $59.16 $52.36 $45.63 $46.33 $40.58 2020E 2021E $65.47 $58.69 $55.25 $49.34 $43.88 $47.95 $42.67 $37.78 2019E 2020E 2021E Downside Volumes Case $49.98 $45.83 6.0% $43.86 $39.98 7.0% PF AMGP | 1.775x XR Adjusted(1) | AR Downsid $54.00 $49.29 $43.42$45.61 $39.62 $35.51 Yield $30.86 5.0% 6.0% 7.0% Yield 6.0% 7.0% 8.0% Current AM Unit Price Yield CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Illustrative Discounted Future Value Pre Unitholder Tax | SQ AMGP & PF AMGP | AR Base Case & AR Downside Volumes Case SQ AMGP | AR Base Case $35.70 $31.08 $22.90 $18.23 2019E SQ AMGP | AR Downside Volumes Case $26.71 $19.70 $15.69 $21.87 2019E 50 Source: Management projections and FactSet as of 8/21/2018. Note: Valuation based on annual distributions. Assumptions Management projections | Valuation date as of 6/30/18 Future share price calculated at FY1 distributions divided by yield Discounted to 6/30/18 at 10% cost of equity Interim distributions discounted upon receipt to 6/30/18 5.0% 6.0% 7.0% Yield 5.0% 6.0% 7.0% Yield $44.70 $37.69 $33.45 $28.01 $27.03 $22.47 $19.36 4.0% 5.5% 7.0% PF AMGP | AR Base Case $42.01 $37.22 $32.80 $31.45 $27.53 $31.20 $27.33 $23.76 2019E 2020E 2021E 2020E 2021E PF AMGP | AR Downside Volumes Case $33.53 $32.15 $30.18 $28.57 $27.19 $25.33 $25.02 $23.65 2019E 2020E 2021E $35.28 $30.95 $26.48 $23.04 $21.45 $18.52 2020E 2021E 4.0% 5.5% 7.0% $19.36 Current AMGP Share Price Yield Current AMGP Share Price Yield CONFIDENTIAL DRAFT SUBJECT TO CHANGE
B. AM Proposal 51 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Transaction Assumptions AM Proposal Transaction Assumptions Sources & Uses at AM Proposal Transaction effective on 6/30/2018 To acquire AM, AMGP will convert into a C-Corp in a 100% stock transaction AM Proposal assumes: AMGP Equity Issued (1) $6,599 Purchase AM Units Outstanding $6,228 AM Debt Rolled to AMGP Balance Sheet 1,400 Conversion of Series B Units 358 Each outstanding AM common unit exchanged for 1.71 AMGP shares Cash consideration of $3.00 paid to all unitholders (including AR) to cover taxes paid by unitholders. Cash consideration financed by borrowings on the Companys revolving credit facility at a 3.00% interest rate All existing Series B units exchanged for 18.5mm AMGP shares Cash Consideration to Avoid Share Selling (2) Transaction Fees(3) Revolver Draw 564 564 13 AM Existing Debt 1,400 2H 2018E coverage adjusted to maintain SQ distribution per unit AMGP Ownership Comparison Existing Public 14.9% Mgmt. 7.1% Prior AM Public 28.7% Sponsors 38.0% Existing Public 42.0% Series B 3.5% Sponsors 13.4% AR 32.4% M gmt. 20.0% Source: FactSet as of 8/21/2018. (1) (2) Includes equity issued for Series B unit conversion into AMGP shares. Assumes Cash consideration per unit paid to cover transaction related taxes and avoid downward pressure on PF AMGP share prices from tax motivated liquidations. Provided by Management. Equity ownership does not reflect the gross up of the AM Proposal XR for the $3.00 cash consideration. 52 (3) (4) 3.5% Series B share under AM Proposal Pro Forma(4) Status Quo Total Uses $8,564 Total Sources $8,564 Uses Sources CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Distributable Cash Flow Accretion / (Dilution) At 1.710x Exchange Ratio and Various Cash Considerations | AR Base Case AM Accretion / (Dilution) - % AMGP Accretion / (Dilution) - % At 1.0x AM Coverage 38.4% At 1.710x XR 1.865x XR 1.710x XR and $3.00 Cash 14.7% 11.7% 15.8% 7.9% 6.1% 5.1% 25.8% 2.4% 1.9% 21.0% (1.0%) 17.7% 13.9% (6.6%) 15.8% 2021E 14.7% 5.1% 11.7% 2.4% 2H 2018E 1.9% 2019E 2020E 2022E 7.9% (1.0%) 6.1% 2H 2018E 2019E 2020E 2021E 2022E PF AMGP: $0.59 $1.59 $1.94 $2.30 $2.66 $1.08 $2.74 $3.24 $3.75 $4.29 $1.01 $2.71 $3.31 $3.94 $4.55 Accretion / (Dilution) Analysis at Various XRs Cash Accretion / (Dilution) Analysis at Various XRs Cash Implied XR at 1.710x Implied XR at 1.710x Consid. / Unit 2H 2018E 2019E 2020E 2021E 2022E Consid. / Unit 2H 2018E 2019E 2020E 2021E 2022E Cash Consideration - Taxes 53 Source: Management projections and FactSet as of 8/21/2018. Note: 1. 865x represents implied XR at 1.710x equity XR and cash consideration of $3.00 / unit. Cash assumed to be used to purchase additional secondary shares. Note: Cash Consideration Taxes scenario assumes cash proceeds are used to fund transaction-related tax obligations and are not factored into accretion/dilution analysis. $0.00 1.710x (4.9%) 0.8% 4.0% 6.5% 7.3% $3.00 1.710x (6.6%) (1.0%) 2.4% 5.1% 6.1% $3.00 1.865x 1.9% 7.9% 11.7% 14.7% 15.8% Cash Consideration / Implied XR $0.00 1.710x 40.9% 28.2% 22.8% 19.2% 15.2% $3.00 1.710x 38.4% 25.8% 21.0% 17.7% 13.9% $3.00 1.865x 38.4% 25.8% 21.0% 17.7% 13.9% Cash Consideration / Implied XR Status Quo AMGP: $0.42 $1.26 $1.60 $1.96 $2.34 $ Acc / (Dil):$0.16 $0.33 $0.34 $0.35 $0.33 Status Quo AM:(6.6%)$1.08 $2.74 $3.24 $3.75 $4.29 PF AMGP with $0:$1.01 $2.71 $3.31 $3.94 $4.55 PF AMGP with $3.20H0:2018$E1.10 2019E $2.96 2020E $3.61 2021E $4.302022E $4.96 $ Acc / (Dil):($0.07) ($0.03) $0.08 $0.19 $0.26 $ Acc / (Dil):$0.02 $0.22 $0.38 $0.55 $0.68 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Distribution Accretion / (Dilution) At 1.710x Exchange Ratio and Various Cash Considerations | AR Base Case AM Accretion / (Dilution) - % AMGP Accretion / (Dilution) - % At 1.710x XR 1.865x XR 1.710x XR and $3.00 Cash 73.0% 45.8% 25.0% 15.8% 9.1% 2019E 7.9% 2020E 11.7% 2.4% 14.7%2021E 5.1% 15.8% 2022E 6.1% 2H 2018E 2019E 2020E 2021E 2022E (1.0%) PF AMGP with $0: $0.91 $2.22 $2.88 $3.46 $4.17 $ Acc / (Dil): $201.09E1 202$00E.03 2021E$0.04 2022E $0.07 $2.71 $3.31 $3.94 $4.55 Accretion / (Dilution) Analysis at Various XRs Accretion / (Dilution) Analysis at Various XRs Cash Cash Consid. / Unit Implied XR at 1.710x 2018E 2019E 2020E 2021E 2022E Consid. / Unit 2H 2018E 2019E 2020E 2021E 2022E Source: Management projections and FactSet as of 8/21/2018. Cash Consideration - Taxes 54 Note: AMGP accretion / (dilution) based on SQ AM Management Coverage. Note: 1.865x represents implied XR at 1.710x equity XR and cash consideration of $3.00 / unit. Cash assumed to be used to purchase additional secondary shares. Note: Cash Consideration Taxes scenario assumes cash proceeds are used to fund transaction-related tax obligations and are not factored into accretion/dilution analysis. Cash Consideration / Implied XR $0.00 1.710x 76.2% 48.5% 27.0% 17.3% 10.4% $3.00 1.710x 73.0% 45.8% 25.0% 15.8% 9.1% $3.00 1.865x 73.0% 45.8% 25.0% 15.8% 9.1% Cash Consideration / Implied XR $0.00 1.8% 2.5% 2.5% 2.6% 2.7% $3.00 0.0% 0.6% 1.0% 1.3% 1.6% $3.00 9.1% 9.7% 10.1% 10.5% 10.8% Status Quo AM:$2.21 $2.85 $3.42 $4.10 PF AMGP with $3.00: $0.99 $2.42 $3.14 $3.78 $4.54 $ Acc / (Dil):$0.21 $0.29 $0.36 $0.44 PF AMGP Coverage:1.10$15.x08 1$.2.2704x $31..21452x $3.715.137x $4.29 1.093x Status Quo AMGP: $0.31 $0.89 $1.35 $1.75 $2.23 Pro Forma AMGP: $0.53 $1.30 $1.68 $2.03 $2.44 $ Acc / (Dil):$0.22 $0.41 $0.34 $0.28 $0.20 PF AMGP Coverage: 1.105x 1.220x 1.152x 1.137x 1.093x 9.1% 9.7% 10.1% 10.5% 10.8% 0.0% 0.6% 1.0% 1.3% 1.6% 2H 2018E 1.9% $0(.69.16%) $20H.020018E $0.08 $1.01 Implied XR 2H at 1.710x 1.710x 1.710x 1.865x CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Distributable Cash Flow Accretion / (Dilution) At 1.710x Exchange Ratio and Various Cash Considerations | AR Downside Volumes Case AM Accretion / (Dilution) - % AMGP Accretion / (Dilution) - % At 1.0x AM Coverage 42.5% At 1.710x XR 1.865x XR 1.710x XR and $3.00 Cash 10.9% 10.1% 30.8% 22.1% (2.7%) 18.4% (4.2%) 10.0% 11.72%020E 2.4% 2H 2018E 1.9% 270.91%9E (1.0%) 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E PF AMGP: $0.54 $1.34 $1.78 $1.98 $2.15 $1.08 $2.74 $3.24 $3.75 $4.29 Accretion / (Dilution) Analysis at Various XRs Accretion / (Dilution) Analysis at Various XRs Cash Cash Consid. / Unit Implied XR at 1.710x Consid. / Unit 2H 2018E 2019E 2020E 2021E 2022E Cash Consideration - Taxes 55 Source: Management projections and FactSet as of 8/21/2018. Note: 1.865x represents implied XR at 1.710x equity XR and cash consideration of $3.00 / unit. Cash assumed to be used to purchase additional secondary shares. Note: Cash Consideration Taxes scenario assumes cash proceeds are used to fund transaction-related tax obligations and are not factored into accretion/dilution analysis. $0.00 $3.00 $3.00 Cash Consideration / Implied XR $0.00 1.710x 40.9% 28.2% 22.8% 19.2% 15.2% $3.00 1.710x 38.4% 25.8% 21.0% 17.7% 13.9% $3.00 1.865x 38.4% 25.8% 21.0% 17.7% 13.9% Cash Consideration / Implied XR Status Quo AMGP: $0.38 $1.02 $1.46 $1.67 $1.96 $ Acc / (Dil):$0.16 $0.32 $0.32 $0.31 $0.19 Status Quo AM: PF AMGP with $0:$0.92 $2.30 $3.05 $3.39 $3.66 PF AMGP with $3.00: $12.H021018E 2$021.95E1 2020$E3.33 2021E $3.69 2022E $3.99 $ Acc / (Dil): $ Acc / (Dil): 4.5% 6.1% 0.9% 1.7% (0.3%) (8.5%) 14.7% 15.8% 5.1% 6.1% (6.6%) $1.01 $2.40 $3.02 $3.33 $3.76 ($0.09) ($0.10) $0.03 $0.06 ($0.10) ($0.00) $0.11 $0.31 $0.36 $0.23 $1.01 $2.71 $3.31 $3.94 $4.55 Implied XR 2H 2018E 2019E 2020E 2021E 2022E at 1.710x 1.710x (6.7%) (2.1%) 2.3% 2.6% (5.9%) 1.710x (8.5%) (4.2%) 0.9% 1.7% (2.7%) 1.865x (0.3%) 4.5% 10.1% 10.9% 6.1% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Distribution Accretion / (Dilution) At 1.710x Exchange Ratio and Various Cash Considerations | AR Downside Volumes Case AM Accretion / (Dilution) - % AMGP Accretion / (Dilution) - % At 1.710x XR 1.865x XR 1.710x XR and $3.00 Cash 80.4% 9.4% 0.3% 34.2% 30.5% 21.8% 12.0% (12.0%) 15.8% 2022E 6.1% 14.7%2021E 5.1% 2019E 7.9% (1.0%) 112.70%20E 2.4% 2H 2018E 2019E 2020E 2021E 2022E PF AMGP with $0: $0.83 $1.89 $2.65 $2.98 $3.35 $ Acc / (Dil): ($0.26) $0.07 $0.01 ($0.07) $2.71 $3.31 $3.94 $4.55 Accretion / (Dilution) Analysis at Various XRs Accretion / (Dilution) Analysis at Various XRs Cash Cash Consid. / Unit Implied XR at 1.710x Consid. / Unit 2H 2018E 2019E 2020E 2021E 2022E 2018E 2019E 2020E 2021E 2022E Source: Management projections and FactSet as of 8/21/2018. Cash Consideration - Taxes 56 Note: AMGP accretion / (dilution) based on SQ AM Management Coverage. Note: 1.865x represents implied XR at 1.710x equity XR and cash consideration of $3.00 / unit. Cash assumed to be used to purchase additional secondary shares. Note: Cash Consideration Taxes scenario assumes cash proceeds are used to fund transaction-related tax obligations and are not factored into accretion/dilution analysis. Cash Consideration / Implied XR $0.00 0.8%) (10.1%) 4.1% 1.2% (5.3%) $3.00 2.7%) (12.0%) 2.7% 0.3% (2.1%) $3.00 6.1% (4.0%) 12.0% 9.4% 6.8% $0.00 1.710x 84.0% 33.4% 36.1% 22.8% 8.3% $3.00 1.710x 80.4% 30.5% 34.2% 21.8% 12.0% $3.00 1.865x 80.4% 30.5% 34.2% 21.8% 12.0% Cash Consideration / Implied XR Status Quo AM:$2.15 $2.58 $2.97 $3.42 PF AMGP with $3.00: $20H.921018E $2201.09E6 202$02E.89 2021E$3.25 2022E $3.65 $ Acc / (Dil):($0.09) $0.31 $0.28 $0.23 PF AMGP Coverage:1.10$15.x08 1$.2.2704x $31..21452x $3.715.137x $4.29 1.093x Status Quo AMGP: $0.27 $0.85 $1.15 $1.43 $1.75 PF AMGP:$0.49 $1.10 $1.55 $1.74 $1.96 $ Acc / (Dil):$0.22 $0.26 $0.39 $0.31 $0.21 PF AMGP Coverage: 1.105x 1.220x 1.152x 1.137x 1.093x 12.0% 6.1% 6.8% 2.7% (2.7%) (4.0%) (2.1%) 2H 2018E 1.9% $0(.68.6%) ($0.02) $0.05 $1.01 Implied XR 2H at 1.710x 1.710x ( 1.710x ( 1.865x CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Growth Comparison SQ AM, SQ AMGP, & PF AMGP at AM Proposal AR Base Case AM $2.04 $2.74 $3.24 $3.75 $4.29 16% AM GP @ 1.0x AM Coverage $0.77 $1.26 $1.60 $1.96 $2.34 23% PF AM GP $1.18 $1.59 $1.94 $2.30 $2.66 19% AR Downside Volumes Case AM $2.04 $2.40 $3.02 $3.33 $3.76 16% AM GP @ 1.0x AM Coverage $0.77 $1.02 $1.46 $1.67 $1.96 24% PF AM GP $1.07 $1.35 $1.78 $1.98 $2.14 17% AR Base Case AM $1.72 $2.21 $2.85 $3.42 $4.10 23% AM GP $0.54 $0.89 $1.35 $1.75 $2.23 36% PF AM GP $1.06 $1.30 $1.68 $2.03 $2.44 23% AR Downside Volumes Case AM $1.72 $2.15 $2.58 $2.97 $3.42 17% AM GP $0.54 $0.85 $1.15 $1.43 $1.75 27% PF AM GP $0.98 $1.10 $1.55 $1.74 $1.96 21% Source: Management projections and FactSet as of 8/21/2018. Note: Coverage assumptions as provided by Management in 2019E+. 2018E coverage adjusted for dividend breakeven analysis. PF AMGP coverage extrapolated based on fixed distributions provided for AR Base Case. SQ AM coverage for AR Base Case extrapolated based on fixed distributions provided for AR Base Case. SQ AM coverage for AR Downside Volumes base extrapolated based on fixed distributions provided for AR Downside Volumes Case. 57 SQ AM M gmt Dist Coverage (Base Case) 1.27x 1.31x 1.16x 1.11x 1.05x SQ AM M gmt Dist Coverage (AR Downside Volumes Case) 1.26x 1.16x 1.21x 1.14x 1.12x PF AM GP M anagement Dividend Coverage 1.11x 1.22x 1.15x 1.14x 1.09x 2018E 2019E 2020E 2021E 2022E 2019E - 2022E CAGR Distributions / Dividends per Unit / Share 2018E 2019E 2020E 2021E 2022E 2019E - 2022E CAGR DCF per Unit / Share CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Has / Gets Analysis | For AM | AM Proposal AR Base Case Discounted Levered DCF Analysis Discounted Levered DCF Analysis 9.0x 10.5x 12.0x 10.0x 12.0x 14.0x 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Distribution Analysis Discounted Distribution Analysis 8.0% 7.0% 6.0% 7.0% 6.0% 5.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Cash Flow | Unlevered FCF(2) | Discounted at WACC 11.0x 13.0x 15.0x 7.0% 8.5% 10.0% Source: Management projections and FactSet as of 8/21/2018. Note: Utilizes adjusted PF AMGP Management coverage: implied distribution / dividend breakeven coverage ratio in 2018E and PF AMGP Management coverage in 2019E+. (1) Implied XR at 1.710x equity XR and cash consideration of $3.00 / unit. Cash consideration added to implied share price at 1.710x XR. (2) Unlevered free cash flow defined as PF AMGP EBITDA less cash taxes and capital expenditures. Implied equity value per share backs out implied AM Q2 2018 net debt per share. 58 $44.40 $51.58 $58.76 $42.30 $49.13 $55.97 $40.32 $46.84 $53.36 Discount Rate 2022E Terminal M ultiple $51.29 $58.23 $67.94 $48.47 $54.97 $64.08 $45.86 $51.97 $60.53 Discount Rate $47.23 $52.82 $60.28 $44.52 $49.76 $56.75 $42.02 $46.94 $53.50 Discount Rate 2022E Distribution Yield 2022E Distribution Yield $47.22 $54.17 $61.12 $44.74 $51.25 $57.77 $42.44 $48.56 $54.68 Discount Rate $38.81 $43.72 $48.64 $36.67 $41.27 $45.88 $34.68 $39.01 $43.33 Discount Rate 2022E DCF M ultiple 2022E DCF M ultiple XR Adjusted PF AMGP Implied Share Price |1.865x XR(1) Stand Alone AM Implied Unit Price CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Has / Gets Analysis For AM | AM Proposal | AR Downside Volumes Case Discounted Levered DCF Analysis Discounted Levered DCF Analysis 9.0x 10.5x 12.0x 10.0x 12.0x 14.0x 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Distribution Analysis Discounted Distribution Analysis 8.0% 7.0% 6.0% 7.0% 6.0% 5.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Cash Flow | Unlevered FCF(2) | Discounted at WACC 11.0x 13.0x 15.0x 7.0% 8.5% 10.0% Source: Management projections and FactSet as of 8/21/2018. Note: Utilizes adjusted PF AMGP Management coverage: implied distribution / dividend breakeven coverage ratio in 2018E and PF AMGP Management coverage in 2019E+. (1) Implied XR at 1.710x equity XR and cash consideration of $3.00 / unit. Cash consideration added to implied share price at 1.710x XR. (2) Unlevered free cash flow defined as PF AMGP EBITDA less cash taxes and capital expenditures. Implied equity value per share backs out implied AM Q2 2018 net debt per share. 59 $38.02 $43.80 $49.57 $36.27 $41.77 $47.27 $34.62 $39.86 $45.10 Discount Rate 2022E Terminal M ultiple $41.43 $46.87 $54.49 $39.21 $44.31 $51.45 $37.15 $41.94 $48.65 Discount Rate $40.04 $44.71 $50.92 $37.76 $42.14 $47.97 $35.66 $39.76 $45.24 Discount Rate 2022E Distribution Yield 2022E Distribution Yield $39.29 $44.88 $50.47 $37.27 $42.51 $47.75 $35.40 $40.32 $45.24 Discount Rate $34.30 $38.61 $42.91 $32.41 $36.45 $40.49 $30.66 $34.45 $38.25 Discount Rate 2022E DCF M ultiple 2022E DCF M ultiple XR Adjusted PF AMGP Implied Share Price |1.865x XR(1) Stand Alone AM Implied Unit Price CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Has / Gets Analysis | For AMGP | AM Proposal AR Base Case Discounted Levered DCF Analysis Discounted Levered DCF Analysis 14.0x 16.0x 18.0x 10.0x 12.0x 14.0x 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Distribution Analysis Discounted Distribution Analysis 7.0% 5.5% 4.0% 7.0% 6.0% 5.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Cash Flow | Unlevered FCF(1) | Discounted at WACC 11.0x 13.0x 15.0x 7.0% 8.5% 10.0% Source: Management projections and FactSet as of 8/21/2018. Note: Utilizes adjusted PF AMGP Management coverage: implied distribution / dividend breakeven coverage ratio in 2018E and PF AMGP Management coverage in 2019E+. (1) Unlevered free cash flow defined as PF AMGP EBITDA less cash taxes and capital expenditures. Implied equity value per share backs out implied AM Q2 2018 net debt per share. 60 $24.21 $28.41 $32.61 $22.98 $26.98 $30.98 $21.82 $25.64 $29.45 Discount Rate 2022E Terminal M ultiple $28.24 $32.30 $37.98 $26.59 $30.39 $35.72 $25.07 $28.64 $33.64 Discount Rate $27.54 $34.07 $45.50 $25.92 $32.05 $42.76 $24.43 $30.18 $40.24 Discount Rate 2022E Distribution Yield 2022E Distribution Yield $25.86 $29.92 $33.99 $24.41 $28.22 $32.03 $23.06 $26.64 $30.22 Discount Rate $27.09 $30.44 $33.79 $25.50 $28.64 $31.79 $24.03 $26.98 $29.93 Discount Rate 2022E DCF M ultiple 2022E CAFD M ultiple PF AMGP Implied Share Price Stand Alone AMGP Implied Share Price CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Has / Gets Analysis For AMGP | AM Proposal | AR Downside Volumes Case Discounted Levered DCF Analysis Discounted Levered DCF Analysis 14.0x 16.0x 18.0x 10.0x 12.0x 14.0x 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Distribution Analysis Discounted Distribution Analysis 7.0% 5.5% 4.0% 7.0% 6.0% 5.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Cash Flow | Unlevered FCF(1) | Discounted at WACC 11.0x 13.0x 15.0x 7.0% 8.5% 10.0% Source: Management projections and FactSet as of 8/21/2018. Note: Utilizes adjusted PF AMGP Management coverage: implied distribution / dividend breakeven coverage ratio in 2018E and PF AMGP Management coverage in 2019E+. (1) Unlevered free cash flow defined as PF AMGP EBITDA less cash taxes and capital expenditures. Implied equity value per share backs out implied AM Q2 2018 net debt per share. 61 $20.48 $23.86 $27.24 $19.46 $22.67 $25.89 $18.49 $21.55 $24.62 Discount Rate 2022E Terminal M ultiple $22.47 $25.66 $30.11 $21.17 $24.16 $28.33 $19.97 $22.77 $26.69 Discount Rate $21.86 $26.97 $35.92 $20.58 $25.38 $33.77 $19.40 $23.90 $31.78 Discount Rate 2022E Distribution Yield 2022E Distribution Yield $21.22 $24.49 $27.76 $20.04 $23.11 $26.17 $18.95 $21.83 $24.70 Discount Rate $21.51 $24.13 $26.76 $20.25 $22.71 $25.18 $19.10 $21.41 $23.72 Discount Rate 2022E DCF M ultiple 2022E CAFD M ultiple PF AMGP Implied Share Price Stand Alone AMGP Implied Share Price CONFIDENTIAL DRAFT SUBJECT TO CHANGE
VI. Pro Forma Trading Analysis 62 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Pro Forma Trading AM Share Price as of 8/21/2018: $30.86 Implied AM Ownership AM 2018E ($1.82) 5.90% PF Mkt Cap Weighted Y ield ($0.95) 4.80% AMGP 2018E ($0.61) 3.16% 6.00% 5.00% 4.00% 3.00% 60.6% $26.52 $26.98 $31.83 $33.15 $39.78 $50.34 $53.04 61.3% $27.31 $27.79 $32.78 $34.14 $40.97 $51.84 $54.63 62.0% $28.10 $28.59 $33.73 $35.13 $42.16 $53.34 $56.21 62.6% $28.90 $29.40 $34.68 $36.12 $43.34 $54.85 $57.79 63.3% $29.69 $30.20 $35.63 $37.11 $44.53 $56.35 $59.38 63.9% $30.48 $31.01 $36.58 $38.10 $45.72 $57.85 $60.96 61.1% $27.02 $27.49 $32.43 $33.78 $40.54 $51.29 $54.05 63.2% $29.53 $30.04 $35.43 $36.91 $44.29 $56.05 $59.06 63 Source: Company Management, FactSet as of 8/21/2018. Note: 2018E Dividend / Distribution Yields based on Annualized 2H 2018E dividends / distributions. Cash Adj. AMGP Proposal Cash Adj. XR at AM Proposal Current Adj. XR 1.865x 1.707x 1.925x 1.875x 1.825x 1.775x 1.725x 1.675x Exchange Ratio A I Exchange Ratio Adjusted Implied AM Unit Price 2H Annualized 2018E Dividend Y ield H G F E D C B CONFIDENTIAL DRAFT SUBJECT TO CHANGE
VII. After-Tax Pro Forma Impact Supplemental Materials for AMGP Proposal 64 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Transaction Tax Implications At AMGP Proposal Average Tax Basis Calculation(1) Average tax basis of $23.27 per unit for public AM unitholders as of YE 2017 Antero Resourc es Antero Resourc es - WaterARC Public Unitholders 90,841,730 8,028,605 94,757,401 $2.01 25.70 23.27 The average public AM unit holder would need to receive cash consideration of $3.13 per unit to avoid having to sell shares post-transaction to pay transaction related taxes Total Active Units 193,627,736 Cash Consideration Required to Avoid Share Selling AMGP Share Price Exchange Ratio Cash Consideration Offer Price $19.34 1.620x $3.00 $34.33 AMGP Share Price Exchange Ratio Cash Consideration Offer Price $19.34 1.620x $3.00 $34.33 AMGP Share Price Exchange Ratio Cash Consideration Offer Price $19.34 1.620x $3.00 $34.33 Detail of Gains (per Unit) Average Ordinary Gain Average Capital Gain Detail of Gains (per Unit) Average Ordinary Gain Average Capital Gain Detail of Gains (per Unit) Average Ordinary Gain Average Capital Gain $3.37 7.69 $4.83 9.00 $6.56 7.27 Average Assumed Passive Activity Loss (2) Tax on Gain (per Unit) Federal Ordinary Income Tax Rate Individual MLP Investor Deduction Rate Adjusted Ordinary Tax Rate ACA Tax Federal Tax Rate Federal Capital Gains Tax Rate Effective State Tax Rate(3) PAL Rate PAL Gain Deduction Average Assumed Passive Activity Loss (2) Tax on Gain (per Unit) Federal Ordinary Income Tax Rate Individual MLP Investor Deduction Rate Adjusted Ordinary Tax Rate ACA Tax Federal Tax Rate Federal Capital Gains Tax Rate Effective State Tax Rate(3) PAL Rate PAL Gain Deduction Assumed Passive Activity Loss (3) Tax on Gain (per Unit) Federal Ordinary Income Tax Rate Individual MLP Investor Deduction Rate Adjusted Ordinary Tax Rate ACA Tax Federal Tax Rate Federal Capital Gains Tax Rate Effective State Tax Rate(3) PAL Rate PAL Gain Deduction ($1.08) ($1.46) ($2.00) 37.0% 20.0% 29.6% 3.8% 33.4% 23.8% 5.2% 37.0% ($0.40) 37.0% 20.0% 29.6% 3.8% 33.4% 23.8% 5.2% 37.0% ($0.54) 37.0% 20.0% 29.6% 3.8% 33.4% 23.8% 5.2% 37.0% ($0.74) Tax on Ordinary Gain Effective Ordinary Gain Tax Rate Tax on Capital Gain Effective Capital Gain Tax Rate State Tax Ordinary Income(4) Effective Ordinary Gain Tax Rate State Tax Capital Gain(4) Effective Capital Gains Tax Rate $0.72 21.5% $1.83 23.8% $0.17 5.2% $0.40 5.2% Tax on Ordinary Gain Effective Ordinary Gain Tax Rate Tax on Capital Gain Effective Capital Gain Tax Rate State Tax Ordinary Income(4) Effective Ordinary Gain Tax Rate State Tax Capital Gain(4) Effective Capital Gains Tax Rate $1.07 22.3% $2.14 23.8% $0.25 5.2% $0.47 5.2% Tax on Ordinary Gain Effective Ordinary Gain Tax Rate Tax on Capital Gain Effective Capital Gain Tax Rate State Tax Ordinary Income(4) Effective Ordinary Gain Tax Rate State Tax Capital Gain(4) Effective Capital Gains Tax Rate $1.45 22.1% $1.73 23.8% $0.34 5.2% $0.38 5.2% Total Payable Effective Tax Rate 28.3% Total Effective Tax Rate 28.4% Total Payable Effective Tax Rate 28.2% Source: FactSet as of 8/21/2018 and Wall Street research. (1) (2) (3) (4) Provided by management. Assumed passive activity loss and tax on ordinary gain for IPO investor utilizes company provided estimates based on a per unit basis range of $19.00-$22.00.` Passive activity loss calculated to be $2.00 for an IPO investor. State tax rate determined by using a weighted average of 50 state income tax rates and median federal taxable income brackets for married and single filers. 65 Total Tax on Gain $3.90 Total Tax on Gain $3.93 Total Tax on Gain $3.13 Total Gain $13.82 Total Gain $13.83 Total Gain $11.06 Average EOY 2017 Tax Basis $20.51 Average EOY 2017 Tax Basis $20.51 Average EOY 2017 Tax Basis $23.27 IPO Investor - IPO Basis(1) For IPO Investor - Average Basis(1) Average Unitholder Average EOY 2017 Basis for Public Unitholders $23.27 Average EOY 2017 Basis for IPO Investors $20.51 Unitholder Active Units EOY 2017 Basis CONFIDENTIAL DRAFT SUBJECT TO CHANGE
After-Tax Distribution For Average Unitholder Calculation Detail for AMGP Proposal $391 $989 $1,222 $1,413 $1,642 EBITDA - Interest Expense EBITDA - Distributions from Unconsolidated Affiliates + Equity in Earnings of Unconsolidated Affiliates - Equity Based Compensation - Interest Expense - Depreciation of Goodwill and Current Assets - Additional Depreciation from Step Up in Basis - Capex Expense for Tangible Assets - Interest Expense Add-back $391 ($27) $27 ($23) (44) (375) (27) (133) 0 $989 ($88) $87 ($48) (107) (719) (179) (164) 0 $1,222 ($141) $119 ($41) (132) (653) (287) (176) 0 $1,413 ($168) $134 ($33) (150) (610) (281) (352) 0 $1,642 ($196) $157 ($35) (122) (597) (204) (352) 38 ($38) ($90) ($114) ($133) ($144) - IDR Distributions ($82) ($237) ($357) ($464) ($592) - Distributions from Unc onsolidated Affiliates ($27) ($88) ($141) ($168) ($196) + Equity in Earnings of Unc onsolidated Affiliates $27 $87 $119 $134 $157 - Equity Based Compensation ($23) ($48) ($41) ($33) ($35) Taxable Income Before NOLs ($211) ($229) ($89) ($46) $322 248 613 687 749 832 Taxable Income Before Tax Depreciation - NOLs applied from previous years $0 $0 $0 $0 ($258) O versubc ription 103% 103% 103% 103% 103% Taxable Income ($211) ($229) ($89) ($46) $64 AMGP Taxable Income + NOL Utilization - Payment of Income Taxes +/-Change in depreciation (MACRS vs ADS SL) + Tangible Asset Capex ($211) - - (8) 133 ($229) - - 32 164 ($89) - - 64 176 ($46) - - 16 352 $64 258 16 (35) 352 255 631 707 771 856 Taxable Income Before Tax Depreciation Tax Deprec iation (253) (588) (642) (648) (644) Net Income 2 42 65 123 213 Current Earnings & Profits Current Dist. from AMGP to Shareholders Qualified Dividend? Return of Capital(1) Qualified Dividend(2) Partial Return of Capital(3) Percentage RoC Percentage QD ($86) 324 RoC 324 - - 100% 0% ($32) 685 RoC 685 - - 100% 0% $151 887 Cum E&P - 151 736 83% 17% $322 1,067 Cum E&P - 322 746 70% 30% $623 1,283 Cum E&P - 623 660 51% 49% AM Shares Outstanding 188.1 188.1 188.1 188.1 188.1 Taxable Income / Unit (Net of PAL) $0.00 $0.00 $0.01 $0.02 $0.04 Average Tax Basis per Unit $23.27 $20.49 $17.50 $13.99 $10.19 Less: Return of Capital per Unit(1) Average EoY Basis per Unit ($2.78) ($2.99) ($3.51) ($3.80) ($4.05) $20.49 $17.50 $13.99 $10.19 $6.14 Income Tax Taxable Income / Unit (Net of PAL) $0.00 $0.00 $0.01 $0.02 $0.04 Tax Basis/Share - Return of Capital $19.36 ($0.64) $18.72 ($1.35) $17.38 ($1.44) $15.93 ($1.46) $14.47 ($1.30) Income Tax Rate 29.6% 29.6% 29.6% 29.6% 29.6% EoY Basis $18.72 $17.38 $15.93 $14.47 $13.17 Qualified Dividend Taxes $0.00 $0.00 $0.07 $0.15 $0.29 Tax / Unit $0.00 ($0.00) ($0.00) ($0.01) ($0.01) Implied Tax Rate -% -% 4% 7% 11% Exchange ratio 1.620x 1.620x 1.620x 1.620x 1.620x After-tax Distribution Dilution to AM Unitholder (17.6%) (1.4%) (5.0%) (7.7%) (11.7%) Source: Management projections and FactSet as of 8/21/2018. Note: 1.620x implied after-tax XR represents a 1.620x equity XR and cash consideration of $3.00 / unit. Cash assumed to be used to eliminate unitholder tax liability. 66 (1) (2) (3) Return of capital per share / unit calculated as the total distributions to holders when Current Earnings & Profits are less than 0. Qualified dividend calculated as equal to the lesser of Current Earnings & Profits or Distributions to Shareholder assuming Current Earnings & Profit is greater than 0. Partial Return of Capital is calculated as the difference between Distributions to Shareholders and Current Earnings & Profits assuming Qualified Dividends are applicable. PF After Tax AM Dividend XR Adjusted Share $0.75 $2.18 $2.71 $3.15 $3.61 After-Tax PF AMGP Dividend Per Share $0.46 $1.35 $1.67 $1.94 $2.23 After Tax AM Distibution Per LP Unit $0.91 $2.21 $2.85 $3.41 $4.09 Return of Capital Taxes $0.00 $0.00 $0.00 $0.00 $0.00 Before Tax PF AMGP Dividend Per Share $0.46 $1.35 $1.74 $2.10 $2.52 Total Tax per Share $-$- $0.07 $0.15 $0.29 Income Taxes / Unit $0.00 $0.00 $0.00 $0.01 $0.01 Before Tax AM Distibution Per LP Unit $0.91 $2.21 $2.85 $3.42 $4.10 Shares Outstanding 509.5 509.5 509.5 509.5 509.5 PF AMGP After-Tax Dividend Calculation 2H 2018E 2019E 2020E 2021E 2022E SQ AM After-Tax Distribution Calculation 2H 2018E 2019E 2020E 2021E 2022E CONFIDENTIAL DRAFT SUBJECT TO CHANGE
After-Tax Distribution Accretion / (Dilution) CONFIDENTIAL DRAFT AM & AMGP | For Average AM Unit Holder at AMGP Proposal | AR Base Case AM Accretion / (Dilution) - % At 1.620x Exchange Ratio AMGP Accretion / (Dilution) - % 98.0% (5.0%) (1.4%) (7.7%) 62.9% 97.6% (11.7%) 45.9% 31.0% (17.6%) 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E Pro Forma AMGP: $0.46 $1.35 $1.67 $1.94 $2.23 Accretion / (Dilution) Analysis at Various XRs Accretion / (Dilution) Analysis at Various XRs Implied After-Tax XR 2H 2018E 2019E 2020E 2021E 2022E Cash @ Offer 2H 2018E 2019E 2020E 2021E 2022E 1.620x $3.00 1.620x 1.643x $3.00 1.643x 1.665x $3.00 1.665x 1.688x $3.00 1.688x 1.710x $3.00 1.710x 67 Source: Management projections and FactSet as of 8/21/2018 Note: AMGP accretion / (dilution) based on SQ AM Management Coverage. After-tax distributions is distribution from entity less attributable qualified dividends and gains on capital taxes. Note: 1.620x implied after-tax XR represents a 1.620x equity XR and cash consideration of $3.00 / unit. Cash assumed to be used to eliminate unitholder tax liability. (17.6%) (1.4%) (5.0%) (7.7%) (11.7%) (17.1%) (0.8%) (4.3%) (7.1%) (11.2%) (16.7%) (0.3%) (3.7%) (6.4%) (10.7%) (16.2%) 0.3% (3.0%) (5.8%) (10.1%) (15.8%) 0.8% (2.3%) (5.2%) (9.6%) Exchange Ratio 97.6% 98.0% 62.9% 45.9% 31.0% 96.0% 96.4% 61.8% 44.9% 30.0% 94.4% 94.8% 60.7% 43.9% 29.0% 92.8% 93.2% 59.7% 42.9% 28.0% 91.2% 91.6% 58.7% 42.0% 27.0% Exchange Ratio PF AMGP Coverage1.313x1.220x1.152x1.137x1.093x PF AMGP Coverage 1.313x 1.220x 1.152x 1.137x 1.093x Status Quo AMGP: $0.23$0.68$1.03$1.33$1.70 $ Acc / (Dil):$0.23$0.67$0.64$0.61$0.53 Status Quo AM:$0.91 $2.21 $2.85 $3.41 $4.09 Pro Forma AMGP: $0.75$2.18$2.71$3.15$3.61 $ Acc / (Dil):($0.16)($0.03)($0.14)($0.26)($0.48) SUBJECT TO CHANGE
After-Tax Distribution Accretion / (Dilution) CONFIDENTIAL DRAFT AM & AMGP | For Average AM Unit Holder at AMGP Proposal | AR Downside Case AM Accretion / (Dilution) - % At 1.620x Exchange Ratio AMGP Accretion / (Dilution) - % (5.3%) 77.3% 71.4% 106.0% (9.8%) 51.3% (15.3%) 33.6% (19.8%) (13.7%) 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E Pro Forma AMGP: $0.42 $1.14 $1.51 $1.65 $1.78 Accretion / (Dilution) Analysis at Various XRs Accretion / (Dilution) Analysis at Various XRs Implied After-Tax XR Cash @ Offer 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E $3.00 1.620x 1.620x $3.00 1.643x 1.643x $3.00 1.665x 1.665x $3.00 1.688x 1.688x $3.00 1.710x 1.710x 68 Source: Management projections and FactSet as of 8/21/2018 Note: AMGP accretion / (dilution) based on SQ AM Management Coverage. After-tax distributions is distribution from entity less attributable qualified dividends and gains on capital taxes. Note: 1.620x implied after-tax XR represents a 1.620x equity XR and cash consideration of $3.00 / unit. Cash assumed to be used to eliminate unitholder tax liability. 106.0% 77.3% 71.4% 51.3% 33.6% 104.3% 75.8% 70.3% 50.4% 33.3% 102.6% 74.4% 69.3% 49.4% 33.0% 101.0% 73.0% 68.2% 48.5% 32.7% 99.4% 71.6% 67.2% 47.5% 32.4% Exchange Ratio (19.8%) (13.7%) (5.3%) (9.8%) (15.3%) (19.4%) (13.2%) (4.6%) (9.2%) (14.3%) (18.9%) (12.8%) (3.9%) (8.5%) (13.4%) (18.5%) (12.3%) (3.2%) (7.9%) (12.4%) (18.1%) (11.8%) (2.5%) (7.2%) (11.4%) Exchange Ratio PF AMGP Coverage 1.313x 1.220x 1.152x 1.137x 1.093x PF AMGP Coverage 1.313x 1.220x 1.152x 1.137x 1.093x Status Quo AMGP: $0.21 $0.64 $0.88 $1.09 $1.33 $ Acc / (Dil):$0.22 $0.50 $0.63 $0.56 $0.45 Status Quo AM:$0.86 $2.14 $2.58 $2.96 $3.41 Pro Forma AMGP: $0.69 $1.85 $2.44 $2.67 $2.89 $ Acc / (Dil):($0.17) ($0.29) ($0.14) ($0.29) ($0.52) SUBJECT TO CHANGE
After-Tax Distribution Accretion / (Dilution) For Average AM Unit Holder at AMGP Proposal at 1.0x Coverage for AM & PF AMGP | AR Base Case AM Accretion / (Dilution) - % At 1.620x Exchange Ratio AMGP Accretion / (Dilution) - % At 1.0x AM Coverage 70.1% (3.0%) (3.3%) 87.5% 57.4% 48.4% (3.0%) 35.9% (7.5%) (8.5%) 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E Pro Forma AMGP: $0.61 $1.63 $1.92 $2.21 $2.42 Accretion / (Dilution) Analysis at Various XRs Accretion / (Dilution) Analysis at Various XRs Implied After-Tax XR Cash @ Offer 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E $3.00 1.620x 1.620x $3.00 1.643x 1.643x $3.00 1.665x 1.665x $3.00 1.688x 1.688x $3.00 1.710x 1.710x 69 Source: Management projections and FactSet as of 8/21/2018 Note: After-tax distributions is distribution from entity less attributable qualified dividends and gains on capital taxes. Note: 1.620x implied after-tax XR represents a 1.620x equity XR and cash consideration of $3.00 / unit. Cash assumed to be used to eliminate unitholder tax liability. 87.5%70.1%57.4%48.4%35.9% 86.0%68.7%56.4%47.4%34.9% 84.5%67.3%55.3%46.3%33.8% 83.0%65.9%54.2%45.3%32.8% 81.5%64.6%53.2%44.3%31.8% Exchange Ratio (8.5%) (3.0%) (3.0%) (3.3%) (7.5%) (8.0%) (2.5%) (2.3%) (2.6%) (6.9%) (7.5%) (2.0%) (1.7%) (2.0%) (6.3%) (7.0%) (1.5%) (1.0%) (1.3%) (5.8%) (6.6%) (0.9%) (0.4%) (0.7%) (5.3%) Exchange Ratio PF AMGP Coverage1.000x1.000x1.000x1.000x1.000x PF AMGP Coverage 1.000x 1.000x 1.000x 1.000x 1.000x Status Quo AMGP: $0.32$0.96$1.22$1.49$1.78 $ Acc / (Dil):$0.28$0.67$0.70$0.72$0.64 Status Quo AM:$1.08 $2.73 $3.21 $3.71 $4.23 Pro Forma AMGP: $0.98 $2.65 $3.11 $3.59 $3.92 $ Acc / (Dil):($0.09) ($0.08) ($0.10) ($0.12) ($0.32) CONFIDENTIAL DRAFT SUBJECT TO CHANGE
After-Tax Distribution Accretion / (Dilution) For Average AM Unit Holder at AMGP Proposal at 1.0x Coverage for AM & PF AMGP | AR Downside Volumes Case AM Accretion / (Dilution) - % At 1.620x Exchange Ratio AMGP Accretion / (Dilution) - % At 1.0x AM Coverage 77.8% 94.1% 56.9% (6.1%) (7.5%) 48.2% (10.5%) (6.2%) 30.7% (14.6%) 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E Pro Forma AMGP: $0.56 $1.39 $1.74 $1.88 $1.96 Accretion / (Dilution) Analysis at Various XRs Accretion / (Dilution) Analysis at Various XRs Implied After-Tax XR Cash @ Offer 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E $3.00 1.620x 1.620x $3.00 1.643x 1.643x $3.00 1.665x 1.665x $3.00 1.688x 1.688x $3.00 1.710x 1.710x 70 Source: Management projections and FactSet as of 8/21/2018 Note: After-tax distributions is distribution from entity less attributable qualified dividends and gains on capital taxes. Note: 1.620x implied after-tax XR represents a 1.620x equity XR and cash consideration of $3.00 / unit. Cash assumed to be used to eliminate unitholder tax liability. 94.1%77.8%56.9%48.2%30.7% 92.5%76.3%55.9%47.2%30.4% 91.0%74.9%54.9%46.2%30.1% 89.4%73.5%53.9%45.3%29.8% 87.9%72.1%53.0%44.3%29.5% Exchange Ratio (10.5%) (6.2%) (6.1%) (7.5%) (14.6%) (10.0%) (5.7%) (5.4%) (6.9%) (13.6%) (9.5%) (5.2%) (4.8%) (6.2%) (12.6%) (9.0%) (4.7%) (4.1%) (5.6%) (11.6%) (8.5%) (4.2%) (3.4%) (4.9%) (10.7%) Exchange Ratio PF AMGP Coverage1.000x1.000x1.000x1.000x1.000x PF AMGP Coverage 1.000x 1.000x 1.000x 1.000x 1.000x Status Quo AMGP: $0.29$0.78$1.11$1.27$1.50 $ Acc / (Dil):$0.27$0.61$0.63$0.61$0.46 Status Quo AM:$1.01 $2.40 $3.00 $3.30 $3.71 Pro Forma AMGP: $0.90 $2.25 $2.82 $3.05 $3.17 $ Acc / (Dil):($0.11) ($0.15) ($0.18) ($0.25) ($0.54) CONFIDENTIAL DRAFT SUBJECT TO CHANGE
PF AMGP After Terminal Yield Value | Tax Cash Flow AMGP Proposal | Unadjusted Exchange Ratio At 1.620x Exchange Ratio Tax Basis at YE 2017 Taxes Incurred in Merger (Assumed Paid in 2020) Cash Received from Offer Stepped Up Basis Upon Close $23.27 0.00 0.00 $34.36 XR Adj. PF AMGP BT Dist. per Share % RoC % QD Return of Capital Qualified Dividends Project Tax Liability $0.75 100.0% 0.0% $1.03 $0.00 $0.00 $2.18 100.0% 0.0% $2.18 $0.00 $0.00 $2.82 83.0% 17.0% $2.34 $0.48 ($0.11) $3.39 69.9% 30.1% $2.37 $1.02 ($0.24) $4.08 51.5% 48.5% $2.10 $1.98 ($0.47) Terminal Yield Sale at 12/31/22 - Terminal FV per XR Adj. PF AMGP Share Less: Basis on Conversion Plus: Dividends Treated as Return of Capital 6.00% $68.00 ($34.36) $10.02 Gain on Sale Tax on Gain Tax Rate( 1) 29.0% $43.66 $12.65 Sale at 12/31/22 - Terminal FV per XR Adj. PF AMGP Share Less: Taxes on Gain $68.00 ($12.65) Net Proceeds $55.34 Total Net Cash Flow Total Cash In Flow Total Cash Out Flow - Tax on Dividends Total Cash Out Flow - Taxes in Merger $0.75 $0.75 $2.18 $2.18 $2.59 $2.71 $2.91 $3.15 $3.14 $3.61 $55.34 $68.00 $0.00 $0.00 ($0.11) ($0.24) ($0.47) ($12.65) $0.00 71 Source: Management projections and FactSet as of 8/21/2018. (1) Inclusive of Federal & State capital gains taxes. Discount Factor 0.976 0.909 0.826 0.751 0.683 0.651 Implied Present Value per Share $0.73 $1.98 $2.14 $2.18 $2.14 $36.03 XR Adj. PF AMGP Implied Present Value per Share $45.21 XR Adj. PF AMGP AT Dist. per Share $0.75 $2.18 $2.71 $3.15 $3.61 2H 2018E 2019E 2020E 2021E 2022E Terminal CONFIDENTIAL DRAFT SUBJECT TO CHANGE
After-Tax Dividend Distribution Analysis XR Adjusted Implied PV / Unit at Various 2022E Distribution Yield| At Management Coverage 8% 7% 6% $35.02 $38.41 $42.92 7% 6% 5% $40.72 $45.21 $51.50 $40.94 $45.45 $51.77 $41.17 $45.70 $52.04 $41.39 $45.94 $52.31 $41.61 $46.18 $52.58 $41.83 $46.42 $52.84 Source: Management projections and FactSet as of 8/21/2018. Note: Cash consideration is held constant at $3.00 per AM unit. Note: Tax calculations provided by Management. Ordinary gain tax rate for AM accounts for Federal ordinary income tax rate of 37%, individual MLP investor deduction rate of 20% and 3.8% ACA tax rate. Ordinary gain tax rate for PF AMGP accounts for Federal ordinary income tax rate of 37% and 3.8% ACA tax rate. Note: Assuming 10% discount. 72 Exchange Ratio 1.620x 1.638x 1.656x 1.674x 1.692x 1.710x PF AM GP 2022E Distribution Yield AM current price of $30.86 SQ AM 2022E Distribution Yield CONFIDENTIAL DRAFT SUBJECT TO CHANGE
VIII. After-Tax Pro Forma Impact Supplemental Materials for AM Proposal 73 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Transaction Tax Implications At AM Proposal Average Tax Basis Calculation(1) Average tax basis of $23.27 per unit for public AM unitholders as of YE 2017 Antero Resourc es Antero Resourc es - WaterARC Public Unitholders 90,841,730 8,028,605 94,757,401 $2.01 25.70 23.27 The average public AM unit holder would need to receive cash consideration of $3.63 per unit to avoid having to sell shares post-transaction to pay transaction related taxes Total Active Units 193,627,736 Cash Consideration Required to Avoid Share Selling AMGP Share Price Exchange Ratio Cash Consideration Offer Price $19.34 1.710x $3.00 $36.07 AMGP Share Price Exchange Ratio Cash Consideration Offer Price $19.34 1.710x $3.00 $36.07 AMGP Share Price Exchange Ratio Cash Consideration Offer Price $19.34 1.710x $3.00 $36.07 Detail of Gains (per Unit) Average Ordinary Gain Average Capital Gain Detail of Gains (per Unit) Average Ordinary Gain Average Capital Gain Detail of Gains (per Unit) Average Ordinary Gain Average Capital Gain $3.37 9.43 $4.83 10.74 $6.56 9.01 Average Assumed Passive Activity Loss (2) Tax on Gain (per Unit) Federal Ordinary Income Tax Rate Individual MLP Investor Deduction Rate Adjusted Ordinary Tax Rate ACA Tax Federal Tax Rate Federal Capital Gains Tax Rate Effective State Tax Rate(3) PAL Rate PAL Gain Deduction Average Assumed Passive Activity Loss (2) Tax on Gain (per Unit) Federal Ordinary Income Tax Rate Individual MLP Investor Deduction Rate Adjusted Ordinary Tax Rate ACA Tax Federal Tax Rate Federal Capital Gains Tax Rate Effective State Tax Rate(3) PAL Rate PAL Gain Deduction Assumed Passive Activity Loss (3) Tax on Gain (per Unit) Federal Ordinary Income Tax Rate Individual MLP Investor Deduction Rate Adjusted Ordinary Tax Rate ACA Tax Federal Tax Rate Federal Capital Gains Tax Rate Effective State Tax Rate(3) PAL Rate PAL Gain Deduction ($1.08) ($1.46) ($2.00) 37.0% 20.0% 29.6% 3.8% 33.4% 23.8% 5.2% 37.0% ($0.40) 37.0% 20.0% 29.6% 3.8% 33.4% 23.8% 5.2% 37.0% ($0.54) 37.0% 20.0% 29.6% 3.8% 33.4% 23.8% 5.2% 37.0% ($0.74) Tax on Ordinary Gain Effective Ordinary Gain Tax Rate Tax on Capital Gain Effective Capital Gain Tax Rate State Tax Ordinary Income(4) Effective Ordinary Gain Tax Rate State Tax Capital Gain(4) Effective Capital Gains Tax Rate $0.72 21.5% $2.25 23.8% $0.17 5.2% $0.49 5.2% Tax on Ordinary Gain Effective Ordinary Gain Tax Rate Tax on Capital Gain Effective Capital Gain Tax Rate State Tax Ordinary Income(4) Effective Ordinary Gain Tax Rate State Tax Capital Gain(4) Effective Capital Gains Tax Rate $1.07 22.3% $2.56 23.8% $0.25 5.2% $0.56 5.2% Tax on Ordinary Gain Effective Ordinary Gain Tax Rate Tax on Capital Gain Effective Capital Gain Tax Rate State Tax Ordinary Income(4) Effective Ordinary Gain Tax Rate State Tax Capital Gain(4) Effective Capital Gains Tax Rate $1.45 22.1% $2.14 23.8% $0.34 5.2% $0.47 5.2% Total Payable Effective Tax Rate 28.4% Total Effective Tax Rate 28.5% Total Payable Effective Tax Rate 28.3% Source: FactSet as of 8/21/2018 and Wall Street research. (1) (2) (3) (4) Provided by management. Assumed passive activity loss and tax on ordinary gain for IPO investor utilizes company provided estimates based on a per unit basis range of $19.00-$22.00. Passive activity loss calculated to be $2.00 for an IPO investor. State tax rate determined by using a weighted average of 50 state income tax rates and median federal taxable income brackets for married and single filers. 74 Total Tax on Gain $4.40 Total Tax on Gain $4.44 Total Tax on Gain $3.63 Total Gain $15.57 Total Gain $15.57 Total Gain $12.80 Average EOY 2017 Tax Basis $20.51 Average EOY 2017 Tax Basis $20.51 Average EOY 2017 Tax Basis $23.27 IPO Investor - IPO Basis(1) For IPO Investor - Average Basis(1) Average Unitholder Average EOY 2017 Basis for Public Unitholders $23.27 Average EOY 2017 Basis for IPO Investors $20.51 Unitholder Active Units EOY 2017 Basis CONFIDENTIAL DRAFT SUBJECT TO CHANGE
After-Tax Distribution For Average Unitholder Calculation Detail For AM Proposal $391 $989 $1,222 $1,413 $1,642 EBITDA - Interest Expense EBITDA - Distributions from Unconsolidated Affiliates + Equity in Earnings of Unconsolidated Affiliates - Equity Based Compensation - Interest Expense - Depreciation of Goodwill and Current Assets - Additional Depreciation from Step Up in Basis - Capex Expense for Tangible Assets - Interest Expense Add-back $391 ($27) $27 ($23) (44) (386) (27) (133) 0 $989 ($88) $87 ($48) (108) (742) (179) (164) 0 $1,222 ($141) $119 ($41) (133) (676) (287) (176) 0 $1,413 ($168) $134 ($33) (151) (633) (281) (352) 0 $1,642 ($196) $157 ($35) (115) (620) (204) (352) 46 ($38) ($90) ($114) ($133) ($144) - IDR Distributions ($82) ($237) ($357) ($464) ($592) - Distributions from Unc onsolidated Affiliates ($27) ($88) ($141) ($168) ($196) + Equity in Earnings of Unc onsolidated Affiliates $27 $87 $119 $134 $157 - Equity Based Compensation ($23) ($48) ($41) ($33) ($35) Taxable Income Before NOLs ($222) ($253) ($113) ($70) $315 248 613 687 749 832 Taxable Income Before Tax Depreciation - NOLs applied from previous years $0 $0 $0 $0 ($252) O versubc ription 103% 103% 103% 103% 103% Taxable Income ($222) ($253) ($113) ($70) $63 AMGP Taxable Income + NOL Utilization - Payment of Income Taxes +/-Change in depreciation (MACRS vs ADS SL) + Tangible Asset Capex ($222) - - (8) 133 ($253) - - 32 164 ($113) - - 64 176 ($70) - - 16 352 $63 252 16 (35) 352 255 631 707 771 856 Taxable Income Before Tax Depreciation Tax Deprec iation (253) (588) (642) (648) (644) Net Income 2 42 65 123 213 Current Earnings & Profits Current Dist. from AMGP to Shareholders Qualified Dividend? Return of Capital(1) Qualified Dividend(2) ($97) 369 RoC 369 - - 100% 0% ($56) 684 RoC 684 - - 100% 0% $127 886 Cum E&P - 127 759 86% 14% $297 1,066 Cum E&P - 297 769 72% 28% $615 1,282 Cum E&P - 615 667 52% 48% AM Shares Outstanding 188.1 188.1 188.1 188.1 188.1 Taxable Income / Unit (Net of PAL) $0.00 $0.00 $0.01 $0.02 $0.04 Average Tax Basis per Unit $23.27 $20.49 $17.50 $13.99 $10.19 Less: Return of Capital per Unit(1) Average EoY Basis per Unit ($2.78) ($2.99) ($3.51) ($3.80) ($4.05) (3) Partial Return of Capital Percentage RoC Percentage QD $20.49 $17.50 $13.99 $10.19 $6.14 Income Tax Taxable Income / Unit (Net of PAL) $0.00 $0.00 $0.01 $0.02 $0.04 Tax Basis/Share - Return of Capital $19.36 ($0.70) $18.66 ($1.30) $17.36 ($1.44) $15.92 ($1.46) $14.46 ($1.27) Income Tax Rate 29.6% 29.6% 29.6% 29.6% 29.6% EoY Basis $18.66 $17.36 $15.92 $14.46 $13.19 Qualified Dividend Taxes $0.00 $0.00 $0.06 $0.13 $0.28 Tax / Unit $0.00 ($0.00) ($0.00) ($0.01) ($0.01) Implied Tax Rate -% -% 3% 7% 11% Exchange ratio 1.710x 1.710x 1.710x 1.710x 1.710x After-tax Distribution Dilution to AM Unitholder 0.0% 0.6% (2.4%) (5.3%) (9.8%) Source: Management projections and FactSet as of 8/21/2018. 75 (1) (2) (3) Return of capital per share / unit calculated as the total distributions to holders when Current Earnings & Profits are less than 0. Qualified dividend calculated as equal to the lesser of Current Earnings & Profits or Distributions to Shareholder assuming Current Earnings & Profit is greater than 0. Partial Return of Capital is calculated as the difference between Distributions to Shareholders and Current Earnings & Profits assuming Qualified Dividends are applicable. PF After Tax AM Dividend XR Adjusted Share $0.91 $2.22 $2.78 $3.23 $3.69 After-Tax PF AMGP Dividend Per Share $0.53 $1.30 $1.63 $1.89 $2.16 After Tax AM Distibution Per LP Unit $0.91 $2.21 $2.85 $3.41 $4.09 Return of Capital Taxes $0.00 $0.00 $0.00 $0.00 $0.00 Before Tax PF AMGP Dividend Per Share $0.53 $1.30 $1.68 $2.03 $2.44 Total Tax per Share $-$- $0.06 $0.13 $0.28 Income Taxes / Unit $0.00 $0.00 $0.00 $0.01 $0.01 Before Tax AM Distibution Per LP Unit $0.91 $2.21 $2.85 $3.42 $4.10 Shares Outstanding 526.4 526.4 526.4 526.4 526.4 PF AMGP After-Tax Dividend Calculation 2H 2018E 2019E 2020E 2021E 2022E SQ AM After-Tax Distribution Calculation 2H 2018E 2019E 2020E 2021E 2022E CONFIDENTIAL DRAFT SUBJECT TO CHANGE
After-Tax Distribution Accretion / (Dilution) CONFIDENTIAL DRAFT AM & AMGP | For Average AM Unit Holder at AM Proposal | AR Base Case AM Accretion / (Dilution) - % At 1.710x Exchange Ratio AMGP Accretion / (Dilution) - % 127.0% 0.6% 0.0% (2.4%) 91.4% (5.3%) 58.5% 41.8% 26.9% (9.8 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E o Forma AMGP: $0.55 $1.34 $1.67 $1.94 $2.22 Accretion / (Dilution) Analysis at Various XRs Accretion / (Dilution) Analysis at Various XRs Implied After-Tax XR Cash @ Offer 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E 1.620x 1.643x 1.665x 1.688x 1.710x 76 Source: Management projections and FactSet as of 8/21/2018 Note: Assumes cash consideration is used to pay taxes. 134.6% 97.7% 62.7% 45.8% 30.8% 132.7% 96.1% 61.7% 44.8% 29.8% 130.8% 94.5% 60.6% 43.8% 28.8% 128.9% 92.9% 59.5% 42.8% 27.8% 127.0% 91.4% 58.5% 41.8% 26.9% Exchange Ratio Exchange Ratio $3.00 1.620x $3.00 1.643x $3.00 1.665x $3.00 1.688x (2.1%) (1.5%) (5.1%) (7.8%) (11.9%) (1.6%) (1.0%) (4.4%) (7.1%) (11.3%) (1.0%) (0.4%) (3.7%) (6.5%) (10.8%) (0.5%) 0.1% (3.1%) (5.9%) (10.3%) $3.00 1.710x 0.0% 0.6% (2.4%) (5.3%) ( %) Pr AM Proposal 9.8%) PF AMGP Coverage 1.105x 1.220x 1.152x 1.137x 1.093x PF AMGP Coverage 1.105x 1.220x 1.152x 1.137x 1.093x Status Quo AMGP: $0.23 $0.68 $1.03 $1.33 $1.70 $ Acc / (Dil):$0.32 $0.66 $0.64 $0.61 $0.52 Status Quo AM:$0.91 $2.21 $2.85 $3.41 $4.09 Pro Forma AMGP: $0.89 $2.18 $2.70 $3.15 $3.60 $ Acc / (Dil):($0.02) ($0.03) ($0.15) ($0.27) ($0.48) SUBJECT TO CHANGE
After-Tax Distribution Accretion / (Dilution) CONFIDENTIAL DRAFT AM & AMGP | For Average AM Unit Holder at AM Proposal | AR Downside Volumes Case AM Accretion / (Dilution) - % At 1.710x Exchange Ratio AMGP Accretion / (Dilution) - % 136.7% (2.7%) (2.5%) 71.3% 67.1% (7.3%) 47.4% 32.4% (11.4%) (12.0%) 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E o Forma AMGP: $0.50 $1.14 $1.51 $1.65 $1.78 Accretion / (Dilution) Analysis at Various XRs Accretion / (Dilution) Analysis at Various XRs Implied After-Tax XR Cash @ Offer 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E 1.620x 1.643x 1.665x 1.688x 1.710x 77 Source: Management projections and FactSet as of 8/21/2018 Note: Assumes cash consideration is used to pay taxes. 144.6% 77.0% 71.2% 51.2% 33.6% 142.6% 75.6% 70.2% 50.2% 33.3% 140.6% 74.1% 69.1% 49.3% 33.0% 138.6% 72.7% 68.1% 48.3% 32.7% 136.7% 71.3% 67.1% 47.4% 32.4% Exchange Ratio Exchange Ratio $3.00 1.620x $3.00 1.643x $3.00 1.665x $3.00 1.688x (4.8%) (13.8%) (5.4%) (9.9%) (15.3%) (4.3%) (13.4%) (4.7%) (9.2%) (14.3%) (3.8%) (12.9%) (3.9%) (8.6%) (13.4%) (3.2%) (12.4%) (3.2%) (7.9%) (12.4%) $3.00 1.710x (2.7%) (12.0%) (2.5%) (7.3%) (11.4%) Pr AM Proposal PF AMGP Coverage 1.105x 1.220x 1.152x 1.137x 1.093x PF AMGP Coverage 1.105x 1.220x 1.152x 1.137x 1.093x Status Quo AMGP: $0.21 $0.64 $0.88 $1.09 $1.33 $ Acc / (Dil):$0.30 $0.50 $0.63 $0.56 $0.45 Status Quo AM:$0.86 $2.14 $2.58 $2.96 $3.41 Pro Forma AMGP: $0.82 $1.85 $2.44 $2.67 $2.89 $ Acc / (Dil):($0.04) ($0.30) ($0.14) ($0.29) ($0.52) SUBJECT TO CHANGE
PF AMGP After Terminal Yield Value | Tax Cash Flow AM Proposal | Unadjusted Exchange Ratio At 1.710x Exchange Ratio Tax Basis at YE 2017 Taxes Incurred in Merger (Assumed Paid in 2020) Cash Received from Offer Stepped Up Basis Upon Close $23.27 0.00 0.00 $36.11 XR Adj. PF AMGP BT Dist. per Share % RoC % QD Return of Capital Qualified Dividends Project Tax Liability $0.91 100.0% 0.0% $1.20 $0.00 $0.00 $2.22 100.0% 0.0% $2.22 $0.00 $0.00 $2.88 85.7% 14.3% $2.47 $0.41 ($0.10) $3.46 72.1% 27.9% $2.50 $0.97 ($0.23) $4.17 52.0% 48.0% $2.17 $2.00 ($0.48) Terminal Yield Sale at 12/31/22 - Terminal FV per XR Adj. PF AMGP Share Less: Basis on Conversion Plus: Dividends Treated as Return of Capital 6.00% $69.42 ($36.11) $10.55 Gain on Sale Tax on Gain Tax Rate( 1) 29.0% $43.86 $12.72 Sale at 12/31/22 - Terminal FV per XR Adj. PF AMGP Share Less: Taxes on Gain $69.42 ($12.72) Net Proceeds $56.70 Total Net Cash Flow Total Cash In Flow Total Cash Out Flow - Tax on Dividends Total Cash Out Flow - Taxes in Merger $0.91 $0.91 $2.22 $2.22 $2.68 $2.78 $3.00 $3.23 $3.21 $3.69 $56.70 $69.42 $0.00 $0.00 ($0.10) ($0.23) ($0.48) ($12.72) $0.00 Implied SQ AM Present Value per Unit $38.41 Source: Management projections and FactSet as of 8/21/2018. Note: Cash Consideration assumed to be used to pay transaction related taxes. (1) Inclusive of Federal & State capital gains taxes. 78 Discount Factor 0.976 0.909 0.826 0.751 0.683 0.651 Implied Present Value per Share $0.89 $2.02 $2.22 $2.26 $2.20 $36.91 XR Adj. PF AMGP Implied Present Value per Share $46.49 XR Adj. PF AMGP AT Dist. per Share $0.91 $2.22 $2.78 $3.23 $3.69 2H 2018E 2019E 2020E 2021E 2022E Terminal CONFIDENTIAL DRAFT SUBJECT TO CHANGE
After-Tax Dividend Distribution Analysis XR Adjusted Implied PV / Unit at Various 2022E Distribution Yield $30.86 $35.02 $38.41 $42.92 $40.79 $45.28 $51.56 $41.02 $45.53 $51.84 $41.25 $45.77 $52.11 $41.47 $46.01 $52.38 $41.69 $46.25 $52.64 $41.91 $46.49 $52.91 Source: Management projections and FactSet as of 8/21/2018. Note: Cash consideration is held constant at $3.00 per AM unit. Note: Tax calculations provided by Management. Ordinary gain tax rate for AM accounts for Federal ordinary income tax rate of 37%, individual MLP investor deduction rate of 20% and 3.8% ACA tax rate. Ordinary gain tax rate for PF AMGP accounts for Federal ordinary income tax rate of 37% and 3.8% ACA tax rate. Assumes 10% discount rate. 79 Exchange Ratio 1.620x 1.638x 1.656x 1.674x 1.692x 1.710x PF AM GP 2022E Distribution Yield 7% 6% 5% AM current price of SQ AM 2022E Distribution Yield 8% 7% 6% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Certain TPH Relationships Relationship Disclosure TPH Investment Banking & Antero Midstream Partners, Antero Midstream Partners GP and Antero Resources In May 2017, TPH served as co-manager on Antero Midstream GPs $875 million initial public offering In October 2016, TPH served as financial advisor to Antero Resources on its $170 million sale of 17,000 net acres in southwest PA In June 2016, TPH served as a co-manager on Antero Resources $762 million follow-on equity offering In November 2014, TPH served as a co-manager on Antero Midstreams $1 billion initial public offering In May 2014, TPH served as a senior co-manager on Antero Resources $744 million follow-on equity offering In October 2013, TPH acted as senior co-manager on Antero Resources $1.57 billion initial public offering 80 TPH is a full service securities firm engaged in securities trading, brokerage and private equity and investment management activities as well as providing investment banking and other financial services. In the ordinary course of business, TPH and its affiliates, including Perella Weinberg Partners, may acquire, hold or sell, for their own accounts and the accounts of customers, equity, debt and other securities and financial instruments (including bank loans and other obligations) of AM, AMGP, AR, their affiliates, other prospective transaction participants and other companies that may be involved in the transactions, as well as provide investment banking and other financial services to such companies. TPH has in the past and may in the future provide financial advisory services to AM, AMGP, AR and other transaction participants. In addition, TPH, its affiliates and certain of their employees, including members of the team performing this engagement, as well as certain private equity and investment management funds associated or affiliated with TPH in which they may have financial interests, may from time-to-time acquire, hold or make direct or indirect investments in or otherwise finance a wide variety of companies, including the parties, other transaction participants and their respective affiliates. TPH merged with Perella Weinberg Partners (PWP) in November 2016 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Appendix 81 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Contribution Analysis | Status Quo AM & AMGP Supplemental Calculation | AR Base Case AMGP DCF Contribution Based On Actual Forecasted Taxes (Including on Series B Cash Flow) I DR DCF (-) Series B Payment (-) G&A Expenses (-) Cash Taxes (+) Tax Shield from Series B Depreciation $122 (2) (2) (16) --$206 (7) (2) (34) 6 $337 (12) (2) (56) 6 $430 (20) (2) (85) 6 $526 (26) (2) (111) 6 $628 (34) (2) (141) 6 Pre-Series B HoldCo DCF $102 $169 $272 $329 $393 $457 Seres B A djustment Add Back (1 - Tax Rate) of Series B to HoldCo DCF Tax Rate 2 25.3% 5 25.3% 9 25.3% 15 25.3% 19 25.3% 25 25.3% AMGP DCF Contribution Based On Theoretical Taxes On All Distributable Cash Flow I DR DCF (-) G&A Expenses Tax able Cash Flow (-) Cash Taxes (+) Tax Shield from Series B Depreciation $122 (2) $120 (30) --$206 (2) $204 (52) 6 $337 (2) $335 (85) 6 $430 (2) $428 (108) 6 $526 (2) $524 (133) 6 $628 (2) $626 (158) 6 Post-Tax Total IDR DCF $90 $158 $256 $326 $397 $473 Tax Rate 25.3% 25.3% 25.3% 25.3% 25.3% 25.3% 82 Source: Management projections. FactSet as of 8/21/2018. Implied X R 3.670x 2.648x 2.192x 2.035x 1.931x 1.855x AM DCF / LP Unit $1.61 $2.04 $2.74 $3.24 $3.75 $4.29 A MGP Contribution DCF $90 $158 $256 $326 $397 $473 A MGP Shares Outstanding (includes 18.5mm Series B) 204.7 204.7 204.7 204.7 204.7 204.7 DCF / Share $0.44 $0.77 $1.25 $1.59 $1.94 $2.31 2017A 2018E 2019E 2020E 2021E 2022E A MGP Shares Outstanding (includes 18.5mm Series B) 204.7 204.7 204.7 204.7 204.7 204.7 DCF / Share $0.50 $0.85 $1.37 $1.68 $2.02 $2.36 AM DCF / LP Unit $1.61 $2.04 $2.74 $3.24 $3.75 $4.29 Implied X R 3.193x 2.409x 1.994x 1.926x 1.858x 1.820x A MGP Contribution DCF $103 $174 $281 $344 $413 $482 2017A 2018E 2019E 2020E 2021E 2022E CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Contribution Analysis | Status Quo AM & AMGP Supplemental Calculation | AR Downside Volumes Case AMGP DCF Contribution Based On Actual Forecasted Taxes (Including on Series B Cash Flow) I DR DCF (-) Series B Payment (-) G&A Expenses (-) Cash Taxes (+) Tax Shield from Series B Depreciation $122 (2) (2) (16) --$205 (7) (2) (34) 6 $273 (12) (2) (53) 6 $389 (17) (2) (73) 6 $448 (21) (2) (90) 6 $529 (26) (2) (111) 6 Pre-Series B HoldCo DCF $102 $168 $212 $304 $340 $396 Seres B A djustment Add Back (1 - Tax Rate) of Series B to HoldCo DCF Tax Rate 2 25.3% 5 25.3% 9 25.3% 12 25.3% 16 25.3% 19 25.3% AMGP DCF Contribution Based On Theoretical Taxes On All Distributable Cash Flow I DR DCF (-) G&A Expenses Tax able Cash Flow (-) Cash Taxes (+) Tax Shield from Series B Depreciation $122 (2) $120 (30) --$205 (2) $203 (51) 6 $273 (2) $271 (69) 6 $389 (2) $387 (98) 6 $448 (2) $446 (113) 6 $529 (2) $527 (133) 6 Post-Tax Total IDR DCF $90 $158 $209 $295 $339 $399 Tax Rate 25.3% 25.3% 25.3% 25.3% 25.3% 25.3% 83 Source: Management projections. FactSet as of 8/21/2018. Implied X R 3.670x 2.650x 2.359x 2.094x 2.012x 1.928x AM DCF / LP Unit $1.61 $2.04 $2.40 $3.02 $3.33 $3.76 A MGP Contribution DCF $90 $158 $209 $295 $339 $399 A MGP Shares Outstanding (includes 18.5mm Series B) 204.7 204.7 204.7 204.7 204.7 204.7 DCF / Share $0.44 $0.77 $1.02 $1.44 $1.66 $1.95 2017A 2018E 2019E 2020E 2021E 2022E A MGP Shares Outstanding (includes 18.5mm Series B) 204.7 204.7 204.7 204.7 204.7 204.7 DCF / Share $0.50 $0.85 $1.08 $1.55 $1.74 $2.03 AM DCF / LP Unit $1.61 $2.04 $2.40 $3.02 $3.33 $3.76 Implied X R 3.193x 2.412x 2.227x 1.955x 1.915x 1.853x A MGP Contribution DCF $103 $173 $221 $316 $356 $415 2017A 2018E 2019E 2020E 2021E 2022E CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Contribution Analysis | Status Quo Supplemental Calculation | AR Base Case AM & AMGP AMGP Distribution per Share Calculation $70 (2) $144 (2) $237 (2) $357 (2) $464 (2) $592 (2) Total Distributions from LP Less: G&A Less: Taxes on Total Distributions (+) Tax Shield from Series B Depreciation Tax Rate (17) - 25.3% (36) 6 25.3% (59) 6 25.3% (90) 6 25.3% (117) 6 25.3% (150) 6 25.3% $51 $112 $181 $271 $351 $447 Post Tax, Post-G&A Distributions AMGP Shares Outstanding (+ 18.5 Series B Units) 204.7 204.7 204.7 204.7 204.7 204.7 AM Distribution per Unit Calculation Total LP Distributions LP Units $246 185.4 $323 188.1 $416 188.1 $536 188.1 $643 188.1 $771 188.1 84 Source: Management projections. FactSet as of 8/21/2018. Implied X R5.364x3.139x2.495x2.151x1.993x1.878x LP Dist. / Unit$1.33$1.72$2.21$2.85$3.42$4.10 2017A 2018E 2019E 2020E 2021E 2022E A MGP Distribution / Share$0.25$0.55$0.89$1.33$1.72$2.18 Tax able Distributions68142235355462590 2017A 2018E 2019E 2020E 2021E 2022E CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Contribution Analysis | Status Quo Supplemental Calculation | AR Downside Volumes Case AM & AMGP AMGP Distribution per Share Calculation $70 (2) $144 (2) $225 (2) $306 (2) $380 (2) $464 (2) Total Distributions from LP Less: G&A Less: Taxes on Total Distributions (+) Tax Shield from Series B Depreciation Tax Rate (17) - 25.3% (36) 6 25.3% (56) 6 25.3% (77) 6 25.3% (96) 6 25.3% (117) 6 25.3% $51 $112 $172 $233 $288 $351 Post Tax, Post-G&A Distributions AMGP Shares Outstanding (+ 18.5 Series B Units) 204.7 204.7 204.7 204.7 204.7 204.7 AM Distribution per Unit Calculation Total LP Distributions LP Units $246 185.4 $323 188.1 $404 188.1 $485 188.1 $559 188.1 $643 188.1 85 Source: Management projections. FactSet as of 8/21/2018. Implied X R5.364x3.139x2.549x2.263x2.110x1.993x LP Dist. / Unit$1.33$1.72$2.15$2.58$2.97$3.42 2017A 2018E 2019E 2020E 2021E 2022E A MGP Distribution / Share$0.25$0.55$0.84$1.14$1.41$1.72 Tax able Distributions68142223304378462 2017A 2018E 2019E 2020E 2021E 2022E CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Supplemental Calculation Detail | AMGP Proposal Pro Forma AMGP DCF Analyses | Exchange Ratio Adjusted Implied Equity Value | AR Base Case Levered DCF Analysis Supplemental Calculation Detail Discounted Distribution Analysis Supplemental Calculation Detail PF AM GP DCF per Share Disc ount Fac tor PV of PF AM GP DCF per Share $0.61 0.976 $0.59 $1.64 0.909 $1.49 $2.00 0.826 $1.66 $2.38 0.751 $1.79 $2.75 PF AM GP Dist. per Share Disc ount Fac tor PV of PF AM GP Dist.per Share $0.46 0.976 $0.45 $0.89 0.909 $0.81 $1.35 0.826 $1.11 $1.75 0.751 $1.31 $2.23 Terminal M ultiple Terminal Disc . Fac tor 12.0x 0.716 Terminal Yield Terminal Disc . Fac tor 6.0% 0.716 86 Source: Management projections and FactSet as of 8/21/2018. Implied Terminal Value per Share $23.65 Implied Equity Value per Share $29.18 XR Adj. AM Equity Value per Share $47.27 Implied Terminal Value per Share $26.64 Implied Equity Value per Share $30.33 XR Adj. AM Equity Value per Share $49.13 Disc . PF AM GP DCF Total $5.53 Disc . PF AM GP Dist. Total $3.69 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E CONFIDENTIAL DRAFT SUBJECT TO CHANGE
After-Tax Distribution For AMGP Shareholder Supplemental Calculation AM GP Taxable Inc ome (-) Less Inc ome Taxes $79 ($19) $226 ($56) $340 ($85) $440 ($111) $561 ($141) Current Earnings & Profits $59 $170 $255 $330 $420 Current Dist. from AM GP to Shareholders $57 $166 $251 $326 $416 Qualified Dividend QD QD QD QD QD (1) Full Return of Capital Amt (RoC) $0 $0 $0 $0 $0 (2) Qualified Dividend Partial RoC (3) $57 $0 $166 $0 $251 $0 $326 $0 $416 $0 Accumulated E&P Perc entage RoC Perc entage QD 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Shares O utstanding 186.2 186.2 186.2 186.2 186.2 Tax Basis / Share (-) Return of Capital $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 EOY Basis $0.00 $0.00 $0.00 $0.00 $0.00 RoC Taxes QD Taxes $0.00 $0.07 $0.00 $0.21 $0.00 $0.32 $0.00 $0.42 $0.00 $0.53 Im plied Tax Rate 23.8% 23.8% 23.8% 23.8% 23.8% Source: Management projections and FactSet as of 8/21/2018. (1) (2) (3) Return of capital per share / unit calculated as the total distributions to holders when Current Earnings & Profits are less than 0. Qualified dividend calculated as equal to the lesser of Current Earnings & Profits or Distributions from AMGP to Shareholders assuming Current Earnings & Profit is greater than 0. Partial Return of Capital is calculated as the difference between Distributions from AMGP to Shareholders and Current Earnings & Profits assuming Qualified Dividends are applicable. 87 ATAX AM GP Dist. Per Share $0.23 $0.68 $1.03 $1.33 $1.70 Total Tax per Share $0.07 $0.21 $0.32 $0.42 $0.53 BTAX AM GP Dist. Per Share $0.31 $0.89 $1.35 $1.75 $2.23 2H 2018E 2019E 2020E 2021E 2022E SQ AM GP After-Tax Distribution Calculation CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AM Wall Street Consensus Research Detail Janney Montgomery Scott 8/2/18 $714 $953 $1,197 - - $586 $797 $1,009 - - Wells Fargo Securities 5/24/18 $706 $936 $1,174 $1,382 $1,564 $576 $756 $937 $1,112 $1,276 Scotia Howard Weil 8/2/18 $724 $891 $1,056 - - - - - - - Ladenburg Thalmann & Co 8/2/18 $708 $931 - - - - - - - - Stifel Nicolaus 8/2/18 $710 $916 - - - $582 $768 - - - MUFG Securities Americas 8/2/18 $733 $952 - - - $598 $792 - - - Raymond James 8/2/18 $705 $925 - - - $585 $770 - - - 88 Source: Thomson One and FactSet as of 8/21/2018. Median $710 $931 $1,174 $1,382 $1,564 $583 $769 $937 $1,112 $1,276 Mean $714 $929 $1,142 $1,382 $1,564 $585 $771 $937 $1,112 $1,276 Report Date DCF 2018E 2019E 2020E 2021E 2022E EBITDA 2018E 2019E 2020E 2021E 2022E CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AM Wall Street Consensus Research Detail Janney Montgomery Scott 8/2/18 $1.71 $2.19 $2.79 - - - - - - - Wells Fargo Securities 5/24/18 $1.70 $2.18 $2.79 $3.13 $3.51 - - - - - Scotia Howard Weil 8/2/18 - - - - - - - - - - Ladenburg Thalmann & Co 8/2/18 - - - - - - - - - - Stifel Nicolaus 8/2/18 $1.72 $2.21 - - - - - - - - MUFG Securities Americas 8/2/18 $1.70 $2.18 - - - $2.08 $2.61 - - - Raymond James 8/2/18 $1.71 $2.19 - - - - - - - - 89 Source: Thomson One and FactSet as of 8/21/2018. Median $1.71 $2.18 $2.79 $3.13 $3.51 $2.08 $2.61 - - - Mean $1.71 $2.19 $2.79 $3.13 $3.51 $2.08 $2.61 - - - Report Date DCF per LP Unit 2018E 2019E 2020E 2021E 2022E Distributions per LP Unit 2018E 2019E 2020E 2021E 2022E CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Precedent Simplification Transactions 8/1/18 5/17/18 3/26/18 1/2/18 2/1/17 11/21/16 10/24/16 9/6/16 5/30/16 11/3/15 10/26/15 7/13/15 5/6/15 4/6/15 1/26/15 6/15/14 10/13/14 8/10/14 8/10/14 7/24/14 10/10/13 8/27/13 5/6/13 1/29/13 2/23/11 Energy Transfer Equity, L.P. Williams Companies Tall Grass Energy GP, LP Arc hroc k, Inc O NEO K, Inc Sunoc o Logistic s Partners, LP Americ an M idstream Partners LP Enbridge, Inc . SemGroup Corp. Targa Resourc es Corp. Western Refining, Inc . M PLX LP Crestwood Equity Partners, LP Tesoro Logistic s LP Energy Transfer Partners, LP Williams Partners LP Targa Resourc es Partners LP Kinder M organ Inc . Kinder M organ Inc . Breitburn Energy Partners Regenc y Energy Partners LP Plains All Americ an LP Inergy M idstream LP Kinder M organ Energy Partners LP Enterprise Produc ts Partners LP Energy Transfer Partners, LP Williams Partners, LP Tallgrass Energy Partners, LP Arc hroc k Partners, LP O NEO K Partners, LP Energy Transfer Partners, LP JP Energy Partners LP Spec tra Energy Rose Roc k M idstream Targa Resourc es Partners LP Northern Tier Energy M arkWest Energy Partners, LP Crestwood M idstream Partners QEP M idstream Partners LP Regenc y Energy Partners LP Ac c ess M idstream Partners LP Atlas Pipeline Partners LP Kinder M organ Energy Partners El Paso Pipeline Partners QR Energy LP PVR Partners LP PAA Natural Gas Storage LP Crestwood M idstream Partners LP Copano Energy LLC Dunc an Energy Partners LP $66,981 $57,793 $8,361 $2,438 $23,654 $54,455 $476 $46,980 $2,034 $12,229 $5,286 $22,360 $6,920 $1,145 $18,593 $35,891 $6,002 $52,566 $13,677 $2,856 $5,659 $2,531 $2,643 $4,858 $3,282 (8.7%) 8.8% 4.6% (11.8%) 2.8% (4.1%) 5.0% (0.8%) 12.9% (7.3%) 2.6% (13.6%) (2.0%) (16.0%) (14.8%) 11.8% (8.1%) (11.3%) (9.1%) 12.5% (0.5%) (5.9%) 5.5% (13.8%) 0.8% 3.6% 12.6% 8.8% 0.5% 7.1% 0.7% 5.0% 2.4% 10.2% (1.8%) 10.1% (10.9%) 3.1% (21.8%) (15.1%) 2.4% (14.2%) (6.7%) (4.8%) 16.3% (4.7%) 4.8% (0.7%) (23.3%) 1.3% 6.0% 14.4% 5.7% 5.7% 10.6% 2.1% --4.1% 7.4% 1.6% 0.0% (10.0%) 6.9% (16.2%) (8.1%) 2.7% (15.9%) (4.8%) 2.7% 34.0% (5.8%) 3.8% (5.6%) (20.3%) (1.5%) 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 35.4% 92.4% 100.0% 100.0% 98.8% 100.0% 96.7% 88.0% 88.0% 80.7% 99.0% 100.0% 96.2% 100.0% 100.0% ---- ---- ---- ---- ---- $17.50 $6.20 ---- $0.32 --$1.26 $10.77 $4.65 $4.29 $0.29 --$1.03 ---- 90 Source: Company filings, Wall Street Research Note: Accretion Dilution represents Target DCF pro forma for Acquirer Exchange Ratio (grossed up for cash consideration where applicable) AMGP ProposalAntero Midstream GP LPAntero Midstream Partners LP$11,134(3.1%)0.2%2.9%100.0%--AM ProposalAntero Midstream GP LPAntero Midstream Partners LP$11,440(1.7%)1.7%4.5%100.0%--M edian $6,461 (3.0%) 1.3% 2.4% 100.0% $2.77 M ean $17,897 (3.4%) (0.6%) 0.8% 95.2% $3.60 I Cash Consideration H % Equity Consideration G FY + 3 Ac c retion F FY + 2 Ac c retion E FY + 1 Ac c retion D Transac tion Value C Target B Ac quiror A Announc ement Date CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Selected Energy Precedent Transactions (USD in millions, except per unit (share) data) 4/26/2018 SJW Group California Water Service Group $1,879 20% 29% 2/5/2018 8point3 Energy Partners LP Capital Dynamics AG $2,654 (11%) (17%) 8/29/2017 Arc Logistics Partners LP Zenith Energy US LP $615 15% 13% 7/19/2017 Avista Corp Hydro One Ltd $5,282 24% 20% 1/25/2017 WGL Holdings Inc AltaGas Ltd $6,602 12% 13% 6/3/2016 Talen Energy Corp Riverstone Holdings LLC $5,045 17% 21% 2/1/2016 Questar Corp Dominion Resources Inc $6,088 23% 28% Fairfax Financial Holdings; Management; ACON Investments; Albright Capital Management 10/26/2015 APR Energy plc (66.1246%) $737 (2%) 159% 8/24/2015 AGL Resources Inc Southern Co $12,401 38% 40% Macquarie Group; Manulife Financial; British Columbia Investment Management 10/20/2014 Cleco Corp $4,709 15% 1% 4/30/2014 Pepco Holdings Inc Exelon Corp $12,107 20% 35% 11/19/2013 Coastal Energy Co Compania Espanola de Petroleos SA - CEPSA $2,182 28% 1% 4/8/2013 Lufkin Industries Inc General Electric Co $3,320 38% 30% 12/5/2012 McMoRan Exploration Co Freeport-McMoRan Copper & Gold Inc $2,430 74% 18% 10/17/2011 Brigham Exploration Co Statoil ASA $4,667 20% 19% 8/29/2011 Venoco Inc Private Investor (Timothy M. Marquez) $400 39% (2%) 6/23/2011 Central Vermont Public Service Corp Gas Metro $670 2% 51% 4/15/2011 Bronco Drilling Co Inc Chesapeake Energy Corp $324 6% 14% 8/9/2010 Superior Well Services Inc (92.4%) Nabors Industries Ltd $844 21% 26% 11/1/2009 Encore Acquisition Co Denbury Resources Inc $4,665 35% 36% 7/28/2008 EnergySouth Inc Sempra Energy $731 23% 24% Source: Dealogic as of 8/21/2018. Note: Excludes MLPs and transactions without publicly available premiums data. Based on deals involving U.S. targets with deal value greater than $250MM, target general industry group defined as oil & gas or utilities & energy, announce date since 2008, acquirer final stake > 90% and 100% cash consideration. (1) Niska units were trading at $1.21 / unit for a market capitalization of $50MM at the time of the transaction, net debt of $726MM and LTM EBITDA of ($25.4MM). 91 Median$2,98721%24% Mean4,31029%34% 9/15/2009Parallel Petroleum CorpApollo Global Management LLC$48211%66% 3/3/2010Southwest Water CoJP Morgan Asset Management; Water Asset Management$42756%84% 11/9/2010Atlas Energy IncChevron Corp$4,67237%42% 4/20/2011DPL IncAES Corp$4,6789%15% 7/15/2011Petrohawk Energy CorpBHP Billiton Ltd$15,10865%62% 9/12/2011Global Industries LtdTechnip SA$1,07355%129% 12/21/2011WCA Waste CorpMacquarie Infrastructure Partners II$53330%62% 1/7/2013EnergySolutions IncEnergy Capital Partners LLC$95721%34% 5/29/2013NV Energy IncBerkshire Hathaway Inc$10,42320%11% 12/11/2013UNS Energy CorpFortis Inc$4,34730%22% 9/29/2014Athlon Energy IncEnCana Corp$6,83425%26% 6/14/2015Niska Gas Storage Partners LLC(1)Brookfield Infrastructure Partners LP$985223%111% 9/4/2015TECO Energy IncEmera Inc$10,39131%27% 10/26/2015Piedmont Natural Gas Co IncDuke Energy Corp$6,57942%53% 2/9/2016Empire District Electric CoAlgonquin Power & Utilities Corp$2,37121%23% 8/22/2016CST Brands IncAlimentation Couche-Tard Inc$4,4092%7% 2/21/2017Delta Natural Gas Co IncPNG Companies LLC$26017%14% 8/18/2017Calpine CorpEnergy Capital Partners; Access Industries ; CPPIB$17,38913%8% 12/12/2017Fairmount Santrol Holdings IncSCR Sibelco NV$1,91814%23% 4/23/2018Vectren CorpCenterPoint Energy Inc$8,09410%15% Announcement Transaction Premium Date Target Acquiror Value ($MM) 1-Day 1-Month 5/23/2018Babcock & Wilcox Enterprises IncSteel Partners Holdings LP$72315%21% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AR Historical and Projected Taxes Assumptions AR Federal & State NOL Carryforwards NOL Other DTL Net DTL ~$3.0 billion of U.S. federal NOLs that expire at various dates from 2024 through 2037 $772 $45 Significant increase in NOLs due to expensing of IDCs in 2017 ahead of 80% utilization limitation imposed by 2017 JOBS tax reform ~$2.3 billion of state NOLs that expire at various dates from 2024 through 2037 Tax shields eliminate cash taxes entirely through 2021 ($1,911) 2015A 2013A 2014A 2016A 2017A Historical AR Tax Assets & Liabilities NOL Valuation Sensitivity(1) Federal State 2018 2023 2028 2033 2038 0% 5% 10% 15% 20% 2013A 2014A 2015A 2016A 2017A 92 Source: Management Projections, Company Filings. (1) NOL carryforward allocated straight line over utilization period. $1,000 $1,300 $1,100 $1,000 $1,400 $1,200 $1,500 $1,400 $3,000 $2,300 Discount Rate $728$728$728$728$728 $728$570$447$350$274 $728$452$280$174$108 $728$362$180$89$44 $728$292$117$47$19 Utilization Period $440 $439 $540 $529 $728 $522 $19 $495 $33 $450 ($10) $432 $7 ($348) ($795) ($1,371) ($950) ($780) ($787) ($1,234) ($1,479) ($1,552) CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Financial Projections 93 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Management Projections: AR Base Volumes Case AR ($ in millions, unless otherwise noted) Production Volumes (MMcfe/d) EBITDAX(1) Gas NGLs (excl. Ethane) Ethane Oil EBITDAX (Excl. Hedges) Income from Hedges LP Distributions from AM $2,728 5,194 105 8 $405 87 05 342 $338 $219 $282 2,253 $170 $585 261 56 1,847 261 40 $1,4$016,250 $1,250$464 173 $112 31 173 $135 $2 6 2016 2017 2018 2019 2020 2021 2022 2016A 2017A 2018E 2019E 2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Capital Expenditures Free Cash Flow(2) Free Cash Flow Cumulative FCF DrillingLeasehold Acquisition & Maintenance Acquisitions $2,112 $2,216 12 $1,615 $1,684 $1$,18,56460 ,660 $1,102 $519 9 $792 589 2016 2017 2018 20192020 2021 2022 2018A 2019A 2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management projections, Company Filings. (1) AM fully consolidated in SEC financial statement. (2) Free cash flow net of land maintenance capital. 94 $19 $500 $513 $273 $310 $588 $2,216 $1,854 $1,780 $1,850 ,1 $105$2 0 $2,00$72 $163 1,85 $1,780 $ $103 $1,747$ $163 $1 $1, 684$81 $1,699 $588 $238 $164 $149 $95 ,$51,1589 $238 1$,14,55211 $1,464 $164 $$11,,446542 Cumulative Free Cash Flow 2018E-2022E Base Case $1,615 Downside Pric ing Case $184 Downside Case $909 $2,305 $2, 72 $2,086$2,100 $2 $338 0 ,305 $35 $4 $ $2,288 $1,774 $1,7 $ $219 2,08 6$ $282 2,10 $37 $1,93$01 74 $224 $1,406 $170 $1,594$ 3 $112 4$01,283$ $1,003 $135 $1,140 $214 03 $901 $290 4,545 4,545 5,194 471 1 05 471 974 33,,994455 402 402 87 834 3,33,33030 342 7700 3,644 3,644 2022 771122 2,702 2,70256 282686 5599 3,222 3,222 2021 603 603 2,822 2,822 2020 1,8472,253 2,382 2,382 2019 465 105 40 7 419 1,92 1,920 2018 332 31 105 1,6 1,620 201 1,3 1,379 201 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Management Projections: AR AR Downside Pricing at Base Volumes Case ($ in millions, unless otherwise noted) Production Volumes (MMcfe/d) EBITDAX(1) GasNGLs (excl. Ethane) Ethane Oil EBITDAX (Excl. Hedges) Income from Hedges LP Distributions from AM 5,194 5,194 105 4,545 87 $2,728 $2,263 402 05 7700 $2,100 $405 6 $1,7 $219 $282 261 56 $170 261 40 $1,4$016,250 $1,250$464 173 1,847 40 $112 31 $135 31 3 $817 6 2016 2017 2018 2019 2020 2021 2022 2016A 2017A 2018E 2019E 2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Capital Expenditures Free Cash Flow(2) Free Cash Flow (Net of Land Maintenance Capex) Cumulative FCF DrillingLeasehold Acquisition & Maintenance Acquisitions $2,112 $2,216 12 $1,684 $1$,18,56460 ,660 9 $317 589 $182 $184 ($20) 2020E 2 2018A 2019A 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management projections, Company Filings. (1) AM fully consolidated in SEC financial statement. (2) Free cash flow net of land maintenance capital. 95 $19 $298 $297 ($115) $588 $2,216 $1,854 $1,780 $1,850 ,1 02 $105$2 0 $2,00$72 2 $163 1,85 2021 $1,780 202 $ $103 $1,747$ 0 $163 $1 2 $1, 20 684$81 $1,699 19 $588 $238 $164 $149 $95 ,$51,1589 018 $238 1$,14,55211 2017 $1,464 $164 $$11,,446542 2016 Cumulative Free Cash Flow 2018E-2022E Base Case $1,615 Downside Pric ing Case $184 Downside Case $909 $2,305 $1,886$2,08 $1,811$1,889 $1,774$338 $4 $ 74$219 $338 $1,406 $170 $282 $155 $2 $1,703 $851 $388 $128 $1 $1,422 $112 $1,003 $135 $1,140 $ $1,141 $214 03 $901 40$ $291 4,545 471 1 05 471 974 33,,994455 402 87 834 3,33,33030 334422 3,644 3,644 2022 771122 2,702 2,2532,70256 282686 5599 3,222 3,222 2021 603 603 2,822 2,822 2020 1,8472,253 2,382 2,382 2019 465 105 173 7 419 1,92 1,920 2018 332 105 1,6 1,620 201 1,3 1,379 201 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Management Projections: AR Downside Volumes Case AR ($ in millions, unless otherwise noted) Production Volumes (MMcfe/d) EBITDAX(1) Gas NGLs (excl. Ethane) Ethane Oil EBITDAX (Excl. Hedges)Income from HedgesLP Distributions from AM 5,194 4,505105 4,545 471 $2,728 89 $405 $2,305 $2,100 $2,086 $1,774 $1,786 $338 712 $1,77$41,669 $219 $282 $1,537 $1,520 2,253 $170 $201 261 56 1,847 261 40 $1,4$016,252 $1,250$464 173 $112 31 173 $135 $2 31 $1 3 6 2016 2017 2018 2019 2020 2021 2022 2016A 2017A 2018E 2019E 2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Capital Expenditures Free Cash Flow(2) Free Cash Flow (Net of Land Maintenance Capex) Cumulative FCF DrillingLeasehold Acquisition & Maintenance Acquisitions $2,216 12 $588 $909 $769 $608 $47 2016 2017 201820192020 2021 2022 2018A 2019A 2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management projections, Company Filings. (1) AM fully consolidated in SEC financial statement. (2) Free cash flow net of land maintenance capital. 96 $20 $589 $655 $588 $2,216 $1,854 $2,1 $163 $1$,18,56460 $1,850 $1,780 $238 $164 $1$61349 $1,660$1,6$814,443 $1,494 $238 1$,14,55211 $1,464 $164 $$11,,446542 $1,251 $1,179 $81 589 $1,362 $105 $2 $1,388 $103 9$ $1,148 $95 ,511 $1,084 Cumulative Free Cash Flow 2018E-2022E Base Case $1,615 Downside Pric ing Case $184 Downside Case $909 $1,406 $170 $326 $244 $285 $851 $ $112 $388 $155 $1,305 $1,003 $135 $1,140 $128 $1,107 $214 $ $905 03 $902 $616 $291 4,046 3,945402 87 452 3,605 3,330342 70 392 82 876 3,121 2,702286 59 331 58 834 756 648 2,70256 259 47 3,644 3,087 2022 3,222 2,816 2021 534 1,8472,253 2,822 2,568 2020 465 105 40 7 2,382 2,281 2019 419 1,92 1,920 2018 332 105 1,6 1,620 201 1,3 1,379 201 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Management Projections: AR Base Volumes Case AM ($ in millions, unless otherwise noted) Operations & EBITDA Low Pressure (Bcf/d) | Water Handling (MBbls/d) Capital Expenditures Gathering & Compression Water Handling Earn-out payment Stonewall MPLX JV Low Pressure Water Delivery Produced Water EBITDA $1,292 $491 $1,460 $925 $1,642 $1,081 $1, $1,642 413 $176 $1,413 $1,222 $1,222 $989 $989 $730 $730 7 $529 $404 $529 6 404 $81 5 $14 4 4 $220 6A 4 3.1 2.7 2018E 2019E 2020E 2.0121E 2022E 2016A 2017A 2016A 2017A 2018E 2019E 2020E 2021E 2022E 0.8 1.1 1.2 1.5 DCF20a17nA d Distrib20u18tEions per20U19nE it 2022E Distribution Breakdown 016A 2020E 2021E2018E 2022E CAGR LP DCF per Unit LP Distributions per Unit AM LPs AMGP (IDRs) Series B Uni ts $4.29 $3.75 $4.29 $3.24 $3.75 -% 1% 1% 2% 2% 2% 2% $2.74 $4.10 % $2.04 $3.42 $3.24 $2.21 $4.10 $1.61 $1.49 $2.85 $3.42 $2.76 $1.72 $1.33 $1.03 $2.07 $2.85 2019E 20$1.61 $1.49 16A2017A 2018$E2.21 2020E 2021E 2022E 8%/2$91%.72 27%/29%34%/29% 18%/29% 16%/20% 14%/20% Growth(1) $1.33 1.76x 1.33x 1.27x1.31x 1.16x 1.11x 1.05x Rat$io1(2.) 03 16A 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management Projections, Company Filings. Note: Operational volumes based on annual average volumes. (1) YoY growth of LP DCF per unit and LP distributions per unit respectively. (2) Coverage ratio calculated as total DCF over total distributions. 97 YoY Coverage Total LP DCF$353$299$385$516$609$705$807 Tota2l0L1P6A 2017A 2018E 2019E 2020E 2021E 2022E Distributions$269$246$323$416$536$643$771 8% - % 1 22% 7A 1% 29% 30% E 2% 34% 36% 2% 38% 39% 2% 40% 41% 2 2% 41% 42% 92% 20 78% 201 68% 69% 2018 63% 64% 2019E 59% 60% 2020E 57% 58% 2021E 55% 57% 022E 20% 24% 6 261 6.9 243 220 205 5. 178 4.7 1 154 4. 124 3.5 107 94 2.8 1 2.2 73 1.7 52 1.4 40 41 29 $266 7 $491 $214 $266 $164 $815 $1,108 $2 $6$41265 $125 $164 $86 $719 $169 $176 $684 $9$2430 $611 $124 $2 $44 $214 $125 $125 $110 $186 $349 $75 $169 $352 $416 2019E $3$2926 2 $188 .4 $381 2018E $349 2017A 20 $92 $322 2020E 22$E229 $222801 02$12E20 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Management Projections: AR Downside Volumes Case AM ($ in millions, unless otherwise noted) Operations & EBITDA Low Pressure (Bcf/d) | Water Handling (MBbls/d) Capital Expenditures Gathering & Compression Water Handling Earn-out payment Stonewall Wastewater MPLX JV Low Pressure Water Delivery Produced Water EBITDA $925 $925 $815 $1,642 $1,413 $719 $1,409 $1,222 $1,105 $1,229 $989 $851 $2 $729 $214 $730 7 $529 $404 $529 6 404 6 5 $14 4 E E 2021E $1942022E $19 2.2 4 3.1 2.7 2016A 2017A 2018E 2019E 2020E 2.0121E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E 0.8 1.1 1.2 1.5 DCF20a17nA d Distrib20u18tEions per20U19nE it 2022E Distribution Breakdown 016A 2020E 2021E2018E 2022E CAGR LP DCF per Unit LP Distributions per Unit AM LPs AMGP (IDRs) Series B Uni ts $4.29 $3.76 $3.33 -% 1% 1% 2% $3.02 $3.75 2% 2% 2% $2.40 $3.24 % $2.04 $3.42 $2.97$4.10 $1.61 $1.49 $2.58 $3.42 $2.76 $1.72 $2.15 $1.33 $1.03 $2.07 $2.85 2019E 20$1.61 $1.49 16A 2017A 2018$E2.21 2020E 2021E 2022E 64% Growth(1) $1.33 1.76x 1.33x 1.26x 1.16x 1.21x 1.14x 1.12x Rat$io1(2.) 03 16A 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management Projections, Company Filings. Note: Operational volumes based on annual average volumes. (1) YoY growth of LP DCF per unit and LP distributions per unit respectively. (2) Coverage ratio calculated as total DCF over total distributions. 98 YoY8%/2$91%.72 27%/29%18%/25%26%/20%10%/15%13%/15% Coverage Total LP DCF$353$299$384$452$568$627$708 Tota2l0L1P6A 2017A 2018E 2019E 2020E 2021E 2022E Distributions$269$246$323$404$485$559$643 8% - % 1 22% 7A 1% 29% 30% E 2% 34% 36% 2% 37% 39% 2% 38% 41% 2 2% 40% 42% 92% 20 78% 201 68% 69% 2018 63% 2019E 59% 61% 2020E 57% 60% 2021E 55% 58% 022E 16% 19% 62.192 4 178 189 172 154 154.4 124 3.8 1 3. 3.1 96 87 2.6 1 68 1.7 49 1.4 40 41 29 $491 0.00 7 $124 $491 $266 $266 $186 $646 $164 $14 $125 $176 $646 $125 $430 $124 $2 $214 $381 $169 $488 $506 $352 $349 $186 $75 $168 $178 $272 $188 .42016A 2018E $381 2017A $349 $682020 $926019 $260 $85 $228 $224 $168 $147 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Management Projections: AR Base Volumes Case AMGP ($ in millions, unless otherwise noted) IDR LLC, Series B Cash Flow, and Tax Observations AMGP Total Distributions 18 22 CAGR IDR LLC owns the 100% of the IDRs in AM and has two share classes SQ AM Distribution Policy SQ AM Fully Distributed $441$440 $36$9369 AMGP owns 100% of the Series A units Management owns 100% of the Series B units $415$416 $302 $302 Series B unitholders are entitled to receive up to 6% of the distributions from AM in excess of $7.5MM per quarter $237 $236 $326 $326 Remaining profits pass through AMGP via Series A shares $250 $251 $144 $144 Series B units scheduled to vest at a value of 6% of equity value above $2 billion in the event of a liquidation of IDR LLC AMGP currently pays corporate taxes of 21% and 4% at the federal and state taxes, respectively $86 $166 $52 $86 $101 $166 $48 $52$10 2016A $101 2017A2018E $48 2019E 2020E 2021E 2022E $10 2016A 2017A 2018E 2019E 2020E 2021E 2022E IDR LLC Cash Flow AMGP & Series B Unit Valuation(1,2,5) $592 Distributions to AMGP Taxes G&A Series B Reserved CF 2016A 2017A 2018E 2019E 2020E 2021E 2022E AM Distributions to IDR LLC $17 $70 $144 $237 $357 $464 $592 Series B Take --(2) (7) (12) (20) (26) (34) Cash Distributions to AMGP $17 $67 $137 $224 $338 $438 $559 G&A(3) (1) (1) (2) (2) (2) (2) (2) $85 Taxes (7) (7) (34) (56) (85) (111) (141) $2 CAFD to AMGP Shareholders $10 $59 $101 $166 $251 $326 $416 Illustrative Yield 3.3% 3.3% 3.3% 3.3% 3.3% 3.8% 5.0% $34$34 $11 $2 $1$00101 $$66 $ 2016A 2017A 2018E2019E2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management Projections, Company Filings. (1) (2) (3) (4) (5) Implied AMGP and Series B valuation from 2016A through 2020E based on 2018E yield. Implied AMGP and Series B valuation from 2021E forward based on yield vs growth regression analysis derived on slide 18. Excludes IPO related G&A. Series B valuation calculated as 6% of the valuation of AMGP less $2 billion. Illustrative yield based on regression analysis as presented on page 91. 99 AMGP Valuation $290 $1,788 $3,049 $5,029 $7,588 $8,532 $8,344 Series B Valuation(4) N/A N/A $63 $182 $335 $392 $381 $17 $ $2 $2 $464 $34 $141 $2 $357 $2 $111 $416 $2 $237 $2 $326 $251 $2 $144 $56 $166 $69 $2 $ 2 $1100 $4$848 32% 43% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Management Projections: AR Downside Volumes Case AMGP ($ in millions, unless otherwise noted) IDR LLC, Series B Cash Flow, and Tax Observations AMGP Total Distributions IDR LLC owns the 100% of the IDRs in AM and has two share classes SQ AM Distribution Policy SQ AM Fully Distributed $441 AMGP owns 100% of the Series A units Management owns 100% of the Series B units 18 22 CAGR $369 $371 $415 $302 Series B unitholders are entitled to receive up to 6% of the distributions from AM in excess of $7.5MM per quarter $314 $326 $237 $273 $326 Remaining profits pass through AMGP via Series A shares $250 $144 $192 $166 $266 Series B units scheduled to vest at a value of 6% of equity value above $2 billion in the event of a liquidation of IDR LLC AMGP currently pays corporate taxes of 21% and 4% at the federal and state taxes, respectively $86 $144 $101 $52 $215 $86 $48 $157 2019E $10 $52 2016A $10 2017A $48 $120018E 2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E IDR LLC Cash Flow AMGP & Series B Unit Valuation(1,2,5) Distributions to AMGP Taxes G&A Series B Reserved CF 2016A 2017A 2018E 2019E 2020E 2021E 2022E $2 AM Distributions to IDR LLC $17 $70 $144 $225 $306 $380 $464 $464 $2 Series B Take --(2) (7) (12) (17) (21) (26) Cash Distributions to AMGP $17 $67 $137 $213 $290 $359 $438 (3) (1) (1) (2) (2) (2) (2) (2) G&A Taxes (7) (7) (34) (53) (73) (90) (111) $2 $2 CAFD to AMGP Shareholders $10 $59 $101 $157 $215 $266 $326 $53 Illustrative Yield 3.3% 3.3% 3.3% 3.3% 3.3% 4.8% 5.7% $2 $34 165 $1 $2 $1 $17 $$66 $$1100 2016A 2017A 2018E 2019E2020E2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management Projections, Company Filings. (1) (2) (3) (4) (5) Implied AMGP and Series B valuation from 2016A through 2020E based on 2018E yield. Implied AMGP and Series B valuation from 2021E forward based on yield vs growth regression analysis derived on slide 18. Excludes IPO related G&A. Series B Valuation calculated as 6% of the valuation of AMGP less $2 billion. Illustrative yield based on regression analysis as presented on page 91. 100 AMGP Valuation $290 $1,788 $3,049 $4,769 $6,508 $5,512 $5,725 Series B Valuation(4) N/A N/A $63 $166 $270 $211 $224 $38$02 $2 $111 $306 $2$2 $90 $326 $225 $73 $266 $144 $56 $215 $157 $2 $69 $34 $ $1$01001 $$4488 34% 27% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AM Status Quo AR Base Volumes Case, AR Downside Volumes Case, and Wall Street Consensus ($ in millions, unless otherwise noted) Wall Street Consensus Mgmt. Projections at AR Base Case Mgmt. Projections at AR Downside Productio n Case 2019E 2022E CAGR Commentary EBITDA $4.29 $1,642 AM is covered by 14 analysts as compared to 22 for AR and 11 for AMGP $3.81 $1,413 $1,382 $1,564 $3.42 $1,222 $1,409 Median price target of $37.50 as of 8/21/2018 $1,192 $1,229 $989 $936 $1,105 $730 $714 $729 Average price target range of $33.00 - $51.00 as of 8/21/2018 $851 $529 2017A 2018E 2019E 2020E 2021E 2022E 2019E 2022E CAGR 2019E 2022E CAGR Distributable Cash Flow / LP Unit Distributions per Unit 1E $4.29 $4.10 $3.51 $3.42 $3.75 $3.76 16% $3.13 $2.85 $3.42 $3.33 $3.245 $2.97 $2.21 $2.20 $2.82 $2.58 $2.69 $2.74 $1.72 $1.72 $2.15 $3.02 $1.71 $2.20 $2.04 $2.40 $0.47 $1.61 $2.04 2017A 2018E 2019E 2020E 2021E 2022E 2017A 2018E 2019E 2020E 2021E 2022E 101 Source: Management Projections, Thomson One, FactSet as of 8/21/2018. 23% 17% 17% 16% 7% 18% 19% 18% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AMGP Status Quo AR Base Volumes Case, AR Downside Volumes Case, and Wall Street Consensus ($ in millions, unless otherwise noted) Wall Street Consensus Mgmt. Projections at AR Base Case Mgmt. Projections at AR Downside Productio n Case 2019E 2022E CAGR Commentary EBITDA $4.29 $559 AMGP is covered by 11 analysts as compared to 22 for AR and 14 for AM $3.81 $438 $3.42 $438 Median price target of $23.00 as of 8/21/2018 $338 $359 $290 $224 Average price target range of $22.00 - $27.00 as of 8/21/2018 $337 $137 $133 $213 $221 $137 $59 2017A 2018E 2019E 2020E 2021E 2022E 2019E 2022E CAGR 2019E 2022E CAGR Total Distributions to AMGP Shareholders Distributions per Share 1E $416 $2.23 $326 $1.75 $326 $1.75 $251 $266 $1.35 $1.43 $215 $1.15 $166 $0.89 $251 $1.35 $101 $0.54 $100 $0.54 $157 $165 $0.85 $0.89 $56 $0.30 $101 $0.54 2017A 2018E 2019E 2020E 2021E 2022E 2017A 2018E 2019E 2020E 2021E 2022E 102 Source: Management Projections, Thomson One, FactSet as of 8/21/2018. Note: WSC estimates available for AMGP through 2020E. 2017A distributions / share represents 4th quarter distribution annualized. 36% 27% 36% 27% 36% 27% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
PF AMGP Projections at AMGP Proposal AR Base Volumes Case & AR Downside Volumes Case ($ in millions, unless otherwise noted) ll Street Consensus EBITDA Mgmt. Projections at AR Base Case Mgmt. Projections at AR Downside Productio n Case FY 2018E EBITDA Distributable Cash Flow 2019E 2022E CAGR 2019E 2022E CAGR $4.29 $1,642 $1,440 $3.81 $3.$412,413 $1,214 $1,222 $1,021 $1,409 $989 $836 $1,103 $783 $1,229 $1,043 $1,105 $939 $620 730 729 $851 $710 $729 $568 2H 2018 2019E 2020E 2021E 2022E 2H 2018 2019E 2020E 2021E 2022E Distributable Cash Flow / Share Dividend / Share 2019E 2022E CAGR 1E 2019E 2022E CAGR $2.75 $2.52 $2.38 $2.10 $2.00 $1.74 $2.16 $1.64 $2.05 $1.98 $1.35 $1.84 $1.80 $1.22 $1.60 $0.93 $1.39 $1.14 $1.09 $0.85 2H 2018 2019E 2020E 2021E 2022E 2H 2018 2019E 2020E 2021E 2022E 103 Source: Management Projections, Thomson One, FactSet as of 8/21/2018. Note: Analysis based on fully diluted share count. 19% 16% 23% 20% 20% 16% 18% 18% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
PF AMGP Projections at AM Proposal AR Base Volumes Case & AR Downside Volumes Case ($ in millions, unless otherwise noted) ll Street Consensus EBITDA Mgmt. Projections at AR Base Case Mgmt. Projections at AR Downside Productio n Case FY 2018E EBITDA Distributable Cash Flow 2019E 2022E CAGR 2019E 2022E CAGR $4.29 $1,447 $1,642 $3.81 $3.$412,413 $1,213 $1,222 $1,020 $1,409 $989 $1,127 $783 $835 $1,229 $1,043 $1,105 $939 $619 730 729 $851 $709 $729 $567 2H 2018 2019E 2020E 2021E 2022E 2H 2018 2019E 2020E 2021E 2022E Distributable Cash Flow / Share Dividend / Share 2019E 2022E CAGR 1E 2019E 2022E CAGR $2.66 $2.44 $2.30 $2.03 $1.94 $1.68 $2.14 $1.59 $1.96 $1.98 $1.30 $1.78 $1.74 $1.18 $1.06 $1.55 $1.35 $1.10 $1.07 $0.98 2H 2018 2019E 2020E 2021E 2022E 2H 2018 2019E 2020E 2021E 2022E 104 Source: Management Projections, Thomson One, FactSet as of 8/21/2018. 19% 17% 23% 21% 20% 17% 18% 18% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Midstream Distribution Growth vs. Yield MLPs vs. C-Corps Non-Sponsored MLPs Midstream C-Corps Denotes MLPs without IDRs 16.0% 14.0% 12.0% 10.0% HEP ANDTXLP 8.0% EQM DCP ENBL WGP 6.0% VLP BP M MCPEQP 4.0% 2.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Distribution Growth (2018E-2022E) CAGR (%) 105 Sources: Company filings, FactSet estimates as of 8/21/2018 Note: Companies selected represent dividend/distribution paying midstream C-Corps and MLPs (both with and without IDRs). 2018E Yield (%) E&P Sponsored Other High Growth SM LP PF AMGP 2019E 2022E Distribution Growth CAGR (AR Downside Case) = ~20% PF AMGP 2019E 2022E Distribution Growth CAGR (AR Base Case) = ~23% ENLK EQG NBL P X KM I SEM G WES CNXM TRGP ENLC SHLX PSXPHESM M P TRP PAGPWM B AM GP AM y = 0.0769e-1.748x R² = 0.5969 y = 0.0769e-1.757x R² = 0.4466 4 of 7 E&P-sponsored MLPs (not including AM) are above the regression line that includes AMGP All C-Corps except TEGP are below the regression line that includes AMGP Excluding AMGP I ncluding AMGP CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Cost of Capital 106 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
SQ AM Peer Group Cost of Equity Analysis Comparable Public Company Yield-Based Cost of Equity Expected Total Return Expected Current - 2020E Distribution CAGR Long-Term Economic Growth Estimate Expected Growth(1) Company Current Yield Implied Total Return 4.0% 5.6% 6.6% 12.2% CNX M idstream Partners LP 14.9% 4.0% 5.7% 5.6% 11.3% Hess M idstream Partners LP 15.2% 4.0% 5.5% 5.2% 10.7% BP M idstream Partners LP 14.2% 4.0% 5.7% 5.6% 11.3% Valero Energy Partners LP 15.5% 4.0% 5.6% 7.8% 13.4% EQT M idstream Partners LP 14.8% Cost of Equity Sensitized Peer Total Return Cost of Equity Barra Beta Low High (2) Raw Beta 0.76 1.02 (3) Spot Risk-Free Rate 2.9% 2.9% Equity Risk Premium (4) 6.0% 6.0% Source: Bloomberg, Duff & Phelps, FactSet, Federal Reserve, Company filings as of 8/21/2018. (1) Weights Expected Current 2020E distribution growth estimates 15% and long-term economic growth estimate by 85% to arrive at a long-term distribution growth estimate. Barra beta as of 3/23/2018. Illustrative low and high range reflects a -/+ 15% range around Barra beta. 20-year treasury bond yield as of 8/21/18. Duff & Phelps historical arithmetic premium. (2) (3) (4) 107 Cost of Equity7.5%9.1% Cost of Equity 10.8% 11.8% M edian 14.9% 4.0% 5.6% 5.6% 11.3% M ean 14.6% 4.0% 5.6% 5.6% 11.2% Western Gas Partners, L.P. 5.5% 4.0% 4.2% 7.5% 11.7% Shell M idstream Partners LP 12.3% 4.0% 5.2% 6.2% 11.5% Noble M idstream Partners LP 20.0% 4.0% 6.4% 4.5% 10.9% Phillips 66 Partners LP 10.3% 4.0% 4.9% 5.4% 10.3% A B C D E F CONFIDENTIAL DRAFT SUBJECT TO CHANGE
SQ AMGP Peer Group Cost of Equity Analysis Comparable Public Company Yield-Based Cost of Equity Expected Total Return Expected Current - 2020E Distribution CAGR Long-Term Economic Growth Estimate Expected Growth(1) Company Current Yield Implied Total Return 4.0% 4.6% 6.6% 11.2% Western Gas Equity Partners, LP 8.2% Cost of Equity Sensitized Peer Total Return Cost of Equity Barra Beta Low High (2) Raw Beta 0.84 1.14 (3) Spot Risk-Free Rate 2.9% 2.9% Equity Risk Premium (4) 6.0% 6.0% Source: Bloomberg, Duff & Phelps, FactSet, Federal Reserve, Company filings as of 8/21/2018. (1) Weights Expected Current 2020E distribution growth estimates 15% and long-term economic growth estimate by 85% to arrive at a long-term distribution growth estimate. Barra beta as of 3/23/2018. Illustrative low and high range reflects a -/+ 15% range around Barra beta. 20-year treasury bond yield as of 8/21/18. Duff & Phelps historical arithmetic premium. (2) (3) (4) 108 Cost of Equity8.0%9.8% Cost of Equity 10.2% 11.2% M edian 8.4% 4.0% 4.7% 6.0% 10.7% M ean 8.4% 4.0% 4.7% 6.0% 10.7% EQT GP Holdings LP 8.6% 4.0% 4.7% 5.5% 10.2% A B C D E F CONFIDENTIAL DRAFT SUBJECT TO CHANGE
PF AMGP Peer Group WACC Analysis Expected Total Return 2018E - 2020E Dividend CAGR Long-Term Economic Growth Estimate (1) Company Expected Growth Current Yield Implied Total Return Kinder M organ Inc 4.0% 7.1% 9.9% 25.0% 2.8% 4.0% 4.9% 4.5% 9.4% Plains All Americ an Pipeline GP 9.9% 4.0% 3.5% 6.7% 10.2% Targa Resourc es Corp. 0.8% 4.0% 4.7% 5.5% 10.2% EQT GP Holdings LP 8.6% 4.0% 5.6% 6.6% 12.2% CNX M idstream Partners LP 14.9% 4.0% 5.7% 5.6% 11.3% Hess M idstream Partners LP 15.2% 4.0% 5.5% 5.2% 10.7% BP M idstream Partners LP 14.2% 4.0% 5.7% 5.6% 11.3% Valero Energy Partners LP 15.5% Source: Bloomberg, Duff & Phelps, FactSet, Federal Reserve, Company filings as of 8/21/2018. (1) Weights Expected Current 2020E distribution growth estimates 15% and long-term economic growth estimate by 85% to arrive at a long-term distribution growth estimate. 109 M edian 12.3% 4.0% 5.2% 5.6% 10.9% M ean 12.1% 4.0% 5.2% 5.5% 10.7% Shell M idstream Partners LP 12.3% 4.0% 5.2% 6.2% 11.5% Noble M idstream Partners LP 20.0% 4.0% 6.4% 4.5% 10.9% EQT M idstream Partners LP 14.8% 4.0% 5.6% 7.8% 13.4% Western Gas Equity Partners, LP 8.2% 4.0% 4.6% 6.6% 11.2% The Williams Companies, Inc . 6.3% 4.0% 4.3% 3.9% 8.3% SemGroup Corporation 5.1% 4.0% 4.2% 7.0% 11.1% ONEOK, Inc . 10.5% 4.0% 5.0% 4.4% 9.4% A B C D E F CONFIDENTIAL DRAFT SUBJECT TO CHANGE
PF AMGP Peer Group WACC Analysis (cont.) Cost of Equity Comparable Company Yield-Based Cost of Equity Barra Beta Low High Low High (2) Raw Beta 0.84 1.14 (3) Spot Risk-Free Rate 2.9% 2.9% Cost of Equity 10.4% 11.4% Equity Risk Premium (4) 6.0% 6.0% Market Value of Equity $9,788 $9,788 Cost of Capital PF Capital Structure Cost of Capital Optimal Capital Structure(5) Low High Low High Cost of Equity Cost of Debt 10.4% 3.4% 11.4% 4.9% Cost of Equity 10.4% 3.4% 11.4% 4.9% (1) Cost of Debt Market Value of Equity Total Debt $9,788 $1,420 $9,788 $1,420 Market Value of Equity Total Debt $9,788 $3,460 $9,788 $3,460 Source: Bloomberg, Duff & Phelps, FactSet, Federal Reserve, Company filings as of 8/21/2018. (1) (2) (3) (4) (5) Illustrative low and high range reflects a -/+ 100 bps range around after tax current 5.6% cost of debt at AM. Barra beta as of 3/23/2018. Illustrative low and high range reflects a -/+ 15% range around Barra beta. 20-year treasury bond yield as of 8/21/18. Duff & Phelps historical arithmetic premium. Optimal Capital Structure based on Total Debt of 3.5x 2019E EBITDA 110 Cost of Capital8.6%9.7% Cost of Equity9.5%10.6% Cost of Capital10.4%11.4% Cost of Equity8.0%9.8% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Additional Market Detail 111 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
IDENTIAL DRAFT JECT TFOocCusHArNeGaE Wet Gas Type Curve Area Overview Type Curve Map with AR BTU Lines and TPH TC Areas TPH Type Curve Areas(1) 1 SW Lean Wet Gas IRR: 46% Antero Type Curve Areas(1) Rich Gas BTU Range: 1,100-1,200 2019 Wells: 4 IRR(2): 30% Highly Rich Gas AR Inventory Overview(1) Inventory Highly-Rich Gas Cond. Highly-Rich Gas Rich Gas Condensate Dry Gas 14 106 3 19 3 30 101 13 2 9 33 96 5 17 9 57 59 33 8 8 55 68 31 8 3 285 527 512 152 155 Source: DrillingInfo, IHS, Company data. Antero assumptions based on Antero publicly disclosed information. Note: Marcellus wells with first production on or after 1/1/2015. IRRs for 12,000 laterals at strip as of 3/29/2018, unless otherwise noted. (1) TPH IRR assumes 40% ethane recovery; Antero IRR assumes ethane rejection. (2) IRR at strip as of 12/31/2017. 112 1,631 Total 145 155 160 165 165 Avg. Lateral Length 9,800 10,500 11,850 12,600 12,750 Remaining 2018E 2019E 2020E 2021E 2022E 2 SW Southern Rich Wet Gas IRR: 44% 3 SW Southern Gas Condensate IRR: 67% B BTU Range: 1,200-1,275 2019 Wells: 101 IRR: 47% Highly Rich Gas Condensate BTU Range: 1,275-1,350 2019 Wells: 30 IRR: 115% C AM Gathering Pipelines AM Water Delivery Pipelines 2 31 A B C A CONF SUB
Type Curve Summary Type Curve Plot TPH RWG TC Fit TPH GC TC Fit TPH Avg Gas AR TC Fit AR/TPH Bridge Gas TPH Avg Gas 12,000 Type Curve EUR, Gross Wellhead (MMcfe) Oil (Mbbl) Gas (MMcf) 10,890 85 10,380 9,413 226 8,059 18,668 146 17,795 16,137 387 13,816 23,185 84 22,679 23,946 211 22,679 9,000 EUR, Gross Sales (MMcfe) Oil (Mbbl) Gas (MMcf) NGL (Mbbl) % Liquids Cond Yield (bbl/MMcf) Cond Yield, Decline Period (Months) NGL Yield (bbl/MMcf) 14,004 85 8,823 779 37% 15-8 3 75 12,154 226 6,448 725 47% 55-25 12 90 24,006 146 15,125 1,335 37% 15-8 3 75 20,835 387 11,053 1,243 47% 55-25 12 90 30,215 84 21,545 1,361 29% 19-3 6 60 31,883 211 20,411 1,701 36% 130-5 6 75 6,000 3,000 Type Curve Parameters 0 24-Hr IP - Peak Rate, Gas (Mcf/d) Initial Decline (%/yr) B Factor Terminal Decline (%/yr) 5,500 - 8,000 59% 1.30 6% 4,000 - 7,000 63% 1.30 6% 9,400 - 13,700 59% 1.30 6% 6,900 - 12,000 63% 1.30 6% 19,420 61% 1.30 6% 19,420 61% 1.30 6% 0 1 2 3 4 5 Year Selected Observations Economic Assumptions TPH type well criteria D&C ($M) $6,400 $6,700 $10,100 $10,500 $11,400 $11,400 Operators: All Vintage Cut-Off: 2015+ Fixed LOE ($/well/mo) Variable LOE, Oil ($/bbl) Variable LOE, NGL ($/Mcf) Total All-In Gas LOE( 2) ($/Mcf) Variable LOE, Water ($/bbl) $2,800 $5.00 $6.80 $0.89 $4.68 $2,800 $5.00 $6.80 $0.89 $4.68 $2,800 $5.00 $6.80 $0.89 $4.68 $2,800 $5.00 $6.80 $0.89 $4.68 $1,353 - - $1.99 - $1,353 - - $1.99 - WV only reports data annually Proppant Cut-Off: 1,500+ lb/ft Stage Spacing Cut-Off: <200 ft Segregated by fluid window Differential, Oil ($/bbl) Differential, Gas ($/Mcf) Differential, NGL (% of Strip) BTU Factor( 3) (Btu/scf) Residual Shrink (%) ($7.50) ($0.60) 40% 1.083 85% ($7.50) ($0.60) 40% 1.083 80% ($7.50) ($0.60) 40% 1.083 85% ($7.50) ($0.60) 40% 1.083 80% ($6.00) $0.03 65% 1.000 95% ($6.00) $0.03 65% 1.000 90% A type curve similar to Anteros publicly disclosed curve can be observed by filtering the data to observe: Royalty (%) 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% Only AR operated wells 2016+ vintage cut-off All fluid windows Results NPV10 at Strip(4) ($MM) $4.0 $5.3 $8.0 $10.3 $9.8 $16.2 F & D ($/Mcfe) $0.54 $0.65 $0.49 $0.59 $0.44 $0.42 Source: DrillingInfo, IHS, Company data. Antero assumptions based on Antero publicly disclosed information. Note: TPH IB assumes 40% ethane recovery; Antero assumes ethane rejection. (1) (2) (3) (4) Assumes 100% AM water & processing fees. Antero Variable LOE is $1.99 / Mcfe (applied on total equivalent production) and includes midstream and transportation expenses. BTU uplift is included in the +$0.03 gas differential . Economics run at 5 year strip as of 3/29/2018. 113 Cumulative Gas Prod (MMcf) IRR at Strip(4) (%) 35% 53% 44% 67% 47% 115% Total Opex / Mcfe ($/Mcfe) $1.30 $1.32 $1.24 $1.25 $2.02 $2.02 D&C / ft ($M) $0.914 $0.957 $0.842 $0.875 $0.950 $0.950 Avg Lateral Length (ft) 7,000 7,000 12,000 12,000 12,000 12,000 EUR, Sales / 1k' (Bcfe) 2.00 1.74 2.00 1.74 2.52 2.66 EUR, WH / 1k' (Bcfe) 1.56 1.34 1.56 1.34 1.93 2.00 Bridging TPH curve to AR by changing well criteria as described below TPH IB Antero Disclosed( 1) S Rich Wet Gas S Gas Condensate S Rich Wet Gas 12K' S Gas Condensate 12K' Highly Rich Gas High Rih Gas Condensate CONFIDENTIAL DRAFT SUBJECT TO CHANGE
IRR Price Sensitivities Oil Price Sensitivity(1) Gas Price Sensitivity(2) 63% 102% $60 / bbl $2.90 / mmbtu $55 / bbl $2.75 / mmbtu $2.70 / mmbtu 27% ce sensitivities at AR Downside Pricing(3) Case Source: Antero assumptions based on Antero publicly disclosed information. Note: TPH IB assumes 40% ethane recovery; Antero assumes ethane rejection. (1) (2) (3) Holds Gas price flat at $2.80 / MMBtu. Holds Oil price flat at $50 / bbl. AR Downside Pricing Case applies $2.50 natural gas / $50 oil pricing to AR Base Volumes Case production. 114 64% 46% 43% 78% 51% 37% 36% $50 / bbl 59% 39% 29% 30% $45 / bbl $40 / bbl 42% 30% 23% 24% 29% 21% 17% 19% Indicates IRR pri 42% 33% 33% 56% 38% 28% 29% 54% 37% 26% $2.50 / mmbtu 45% 32% 21% 22% $2.30 / mmbtu 37% 27% 16% 17% TPH SW Southern Rich Wet GasTPH SW Southern Gas CondensateAR Highly Rich GasAR Highly Rich Gas Condensate CONFIDENTIAL DRAFT SUBJECT TO CHANGE
EUR / D&C Benchmarking EUR (Bcfe / 1,000) 2.9 2.7 2.5 D&C ($ / ft) $950 $950 115 Source: Company IR materials. Antero assumptions based on Antero publicly disclosed information. Highly Rich Gas Cond Highly Rich Gas $897 $893 $825 Median = $893 Highly Rich Gas Cond Highly Rich Gas .6 2.4 1 Median = 2.4 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Disclosure Statement Tudor, Pickering, Holt & Co. does not provide accounting, tax or legal advice. In addition, we mutually agree that, subject to applicable law, you (and your employees, representatives and other agents) may disclose any aspects of any potential transaction or structure described herein that are necessary to support any U.S. federal income tax benefits, and all materials of any kind (including tax opinions and other tax analyses) related to those benefits, with no limitations imposed by Tudor, Pickering, Holt & Co. About The Firm Tudor, Pickering, Holt & Co. is an integrated energy investment and merchant bank, providing high quality advice and services to institutional and corporate clients. Through the companys two broker-dealer units, Tudor, Pickering, Holt & Co. Securities, Inc. (TPHCSI) and Tudor Pickering Holt & Co Advisors LP (TPHCA), members FINRA, the company offers securities and investment banking services to the energy community. TPH Asset Management LP (TPHAM) is an SEC registered investment adviser that delivers a suite of energy investment strategies. TPH Partners Group LP is a relying advisor of TPHAM. Certain employees of TPHAM are also employees of TPHCSI. The information contained herein is confidential (except for information relating to United States tax issues) and may not be reproduced in whole or in part. Tudor, Pickering, Holt & Co. assumes no responsibility for independent verification of third-party information and has relied on such information being complete and accurate in all material respects. To the extent such information includes estimates and forecasts of future financial performance (including estimates of potential cost savings and synergies) prepared by, reviewed or discussed with the managements of your company and/ or other potential transaction participants or obtained from public sources, we have assumed that such estimates and forecasts have been reasonably prepared on bases reflecting the best currently available estimates and judgments of such managements (or, with respect to estimates and forecasts obtained from public sources, represent reasonable estimates). These materials were designed for use by specific persons familiar with the business and the affairs of your company and Tudor, Pickering, Holt & Co. materials. The firm, headquartered in Houston, Texas, has approximately 170 employees and offices in Calgary, Canada; Denver, Colorado; and New York, New York. Its affiliate, Tudor, Pickering Holt & Co. International, LLP, is located in London, England. Its Canadian affiliate, Tudor Pickering Holt & Co Securities Canada LP, is located in Calgary, Alberta. Contact Us Houston (Research, Sales and Trading): 713-333-2960 Houston (Investment Banking): 713-333-7100 Houston (Asset Management): 713-337-3999 Denver (Sales): 303-300-1900 Denver (Investment Banking): 303-300-1900 New York (Investment Banking): 212-610-1660 New York (Research, Sales): 212-610-1600 London: +011 44(0) 20 3008 6428 Calgary: 403-705-7830 Under no circumstances is this presentation to be used or considered as an offer to sell or a solicitation of any offer to buy, any security. Prior to making any trade, you should discuss with your professional tax, accounting, or regulatory advisers how such particular trade(s) affect you. This brief statement does not disclose all of the risks and other significant aspects of entering into any particular transaction. Tudor, Pickering, Holt & Co. International, LLP is authorized and regulated by the Financial Conduct Authority and is the United Kingdom affiliate of www.TPHco.com Tudor, Pickering, Holt & Co. Copyright 2018 Tudor, Pickering, Holt & Co. 116 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Project Alpine Special Committee Materials Series B Valuation August 26, 2018 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Series B Valuation SQ AMGP ($ & values in millions, unless otherwise noted) SQ AMGP & Series B Unit Valuation 2018E 2019E 2020E 2021E 2022E AM Distributions to IDR LLC Series B Take $144 (7) $237 (12) $357 (20) $464 (26) $592 (34) Cash Distributions to AMGP G&A Taxes $137 (2) (34) $224 (2) (56) $338 (2) (85) $438 (2) (111) $559 (2) (141) CAFD to AMGP Shareholders SQ AMGP Shares O/S Dividend per Share Illustrative Yield $101 186.2 $0.54 5.5% $166 186.2 $0.89 5.5% $251 186.2 $1.35 5.5% $326 186.2 $1.75 5.5% $416 186.2 $2.23 5.5% Illustrative SQ A MGP Share Price $9.83 $16.21 $24.46 $31.81 $40.58 Series B Valuation Sensitivities 2018E 2019E 2020E 2021E 2022E 2018E 2019E 2020E 2021E 2022E 2018E 2019E 2020E 2021E 2022E 7.0% 5.5% 4.0% 2.8% Source: FactSet as of 8/21/2018. (1) Represents public equity value before incorporation of Series B. (2) AMGP shares issued at current AMGP share price of $19.36. 2 NA 1.2 4.9 8.2 12.2 NA 3.2 7.9 12.2 17.2 1.6 6.7 13.2 19.0 26.0 5.0 12.2 21.6 30.0 39.9 N/A $22 $95 $159 $236 N/A $61 $153 $235 $333 $31 $129 $256 $369 $503 $96 $237 $418 $580 $773 $1,438 $2,372 $3,579 $4,655 $5,937 $1,831 $3,019 $4,556 $5,924 $7,557 $2,517 $4,151 $6,264 $8,146 $10,390 $3,605 $5,945 $8,971 $11,666 $14,880 SQ AMGP Yield A MGP Shares Issued( 2 ) Series B V aluation SQ A MGP V aluation(1) Series B ValuationN/A$61$153$235$333 AMGP Valuation$1,831$3,019$4,556$5,924$7,557 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Series B Valuation PF AMGP at AMGP Proposal (1.775x All-in XR) ($ & values in millions, unless otherwise noted) PF AMGP & Series B Unit Valuation (1) 2018E 2019E 2020E 2021E 2022E Total Dividends to Shareholders Dividends per Share Illustrative Yield $472 $0.93 6.0% $685 $1.35 6.0% $887 $1.74 6.0% $1,067 $2.10 6.0% $1,283 $2.52 6.0% Illustrative PF A MGP Share Price $15.44 $22.42 $29.01 $34.92 $41.97 PF AMGP Shares O/S Series B Ownership % 509.5 3.6% 509.5 3.6% 509.5 3.6% 509.5 3.6% 509.5 3.6% Series B Valuation Sensitivities (1) 2018E (1) 2018E (1) 2018E 2019E 2020E 2021E 2022E 2019E 2020E 2021E 2022E 2019E 2020E 2021E 2022E 7.0% 6.0% 5.0% Source: FactSet as of 8/21/2018. Note: AMGP proposal consideration consists of 1.620x XR and a cash consideration of $3.00 / unit. (1) 2018E total cash flow available for distribution represents 2H 2018 annualized. 3 18.5 18.5 18.5 18.5 18.5 18.5 18.5 18.5 18.5 18.5 18.5 18.5 18.5 18.5 18.5 $245 $356 $460 $554 $666 $286 $415 $537 $646 $777 $343 $498 $644 $775 $932 $6,741 $9,792 $12,669 $15,249 $18,329 $7,864 $11,424 $14,780 $17,790 $21,384 $9,437 $13,709 $17,736 $21,348 $25,661 PF AMGP Yield A MGP Shares Issued Series B V aluation PF A MGP V aluation Series B V aluation$286$415$537$646$777 PF A MGP V aluation$7,864$11,424$14,780$17,790$21,384 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Series B Restructuring Alternatives Financial operating performance metrics (level of 4 Allow optionholders to purchase shares at a strike price Flexibility on terms. Illustrative terms such as Type: call option to buy shares Term: 5 years Strike Price: at market upon issuance Style: American (exercisable at any point from issuance until expiration) Can be settled in cash or shares Earnouts more typical in private deals; contingent value rights (CVRs) allow earnout proceeds to be allocated to a broad group of shareholders Potential triggers include Operational events DCF) Share price performance Can be settled in cash or shares Standard structure for compensating management Can incentivize management; alignment for price appreciation Value will largely depend on share price performance Effective tool for aligning incentives Can structure with option for company to settle in equity or cash, which may allow minimization of equity dilution Will immediately and clearly crystalize potential value Considerations Description Options Earn-out / Contingent Value Right Potential structure to propose to Series B unitholders in exchange for the value negotiated above the contractually obligated level, currently estimated to be 4.96mm units (or ~$96mm) CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Series B Options Alternative Analysis ($ & values in millions, unless otherwise noted) Black-Scholes Valuation of AMGP Shares(1) Call Option Premiums at Various Strike Prices, ($/Option) $24.36 $21.86 $19.36 $16.86 $14.36 Stock AMGP Tenor (Years) 5 3 Strike Price $19.36 Vesting I mmediate 5 Volatility 26% Risk-free Rate 2.86% Calc ulated Pric e $4.43 7 Options Required to Cover Valuation Premium Calculation of Options Required to Make Series B Unitholders Whole for 18.5mm Consideration Series B Currently Negotiated AM GP Shares to be Issued 18.5 $24.36 $21.86 $19.36 $16.86 $14.36 AM GP Share Pric e $19.36 3 Current Contrac tual Value Inc remental Value Required Value of a 5-Year at the M arket O ption $96.3 $261.9 $4.43 5 7 Source: FactSet as of 8/21/2018. (1) Bloomberg discrete Black-Scholes option valuation software used for Series B Options Valuation. (2) 2018E Total Distributions to Shareholders represents 2H 2018 annualized. 5 O ptions Required at Current Strike & 5-Year Tenor 59.1 Currently Negotiated Value of Series B $358.2 142.8 102.3 74.2 54.7 41.3 93.9 74.4 59.1 47.1 37.7 73.9 61.6 51.2 42.6 35.4 Tenor Strik e Pric e $1.83 $2.56 $3.53 $4.78 $6.34 $2.79 $3.52 $4.43 $5.56 $6.94 $3.54 $4.25 $5.11 $6.15 $7.40 Tenor Strik e Pric e Value Component CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Series B Options Alternative Analysis (Cont.) SUBJECT TO CHANGE ($ in millions, unless otherwise noted) Shares Issued for Contractual Value of Series B + Option Exercise 2018E 2019E 2020E 2021E 2022E Dividends per Share(1) Total Distributions to Shareholders Illustrative Yield $0.95 $472 6.0% $1.38 $685 6.0% $1.79 $887 6.0% $2.15 $1,067 6.0% $2.59 $1,283 6.0% 2018E 2019E 2020E 2021E 2022E 3 5 7 PF A MGP Shares O/S (Inc . Series B) Series B Contractual Shares 495.9 4.97 495.9 4.97 495.9 4.97 495.9 4.97 495.9 4.97 FD Illustrative PF AMGP Share Price(2) Total Series B Ownership % in PF AMGP 2018E 2019E 2020E 2021E 2022E 2018E 2019E 2020E 2021E 2022E 3 5 7 3 5 7 Shares Issued for Options Exercise Using TSM(3) Value of Total Series B Consideration Over Time(4) 2018E 2019E 2020E 2021E 2022E 2018E 2019E 2020E 2021E 2022E 3 5 7 3 5 7 Source: FactSet as of 8/21/2018. (1) (2) (3) (4) Represents dividends per share prior to options being exercised. Includes the net dilution of shares issued for options exercised. Net dilution assumes options are exercised at the FD illustrative PF AMGP share price and proceeds from the $19.36 strike price used to buy back shares. Value of Series B consideration is based on the FD illustrative PF AMGP future share price and total shares issued for contractual value of Series B and options exercise each year. 6 0.010.523.731.6NA 0.08.619.225.530.9 0.07.516.822.327.0 Tenor $79 $350 $816 $1,234 NA $79 $307 $694 $1,041 $1,456 $79 $284 $628 $937 $1,306 Tenor Year Year $15.86$22.56$28.44$33.72NA $15.86$22.64$28.69$34.12$40.59 $15.86$22.69$28.82$34.33$40.89 Tenor 1.0% 3.1% 5.5% 6.9% NA 1.0% 2.7% 4.7% 5.9% 6.8% 1.0% 2.5% 4.3% 5.3% 6.1% Tenor FD Illustrative PF AM GP Share Price Total Series B % Ownership in PF AM GP PF A MGP V aluation $7,864 $11,424 $14,780 $17,790 $21,384 5.0 15.5 28.7 36.6 NA 5.0 13.5 24.2 30.5 35.9 5.0 12.5 21.8 27.3 31.9 Tenor Year CONFIDENTIAL DRAFT
Disclosure Statement Tudor, Pickering, Holt & Co. does not provide accounting, tax or legal advice. In addition, we mutually agree that, subject to applicable law, you (and your employees, representatives and other agents) may disclose any aspects of any potential transaction or structure described herein that are necessary to support any U.S. federal income tax benefits, and all materials of any kind (including tax opinions and other tax analyses) related to those benefits, with no limitations imposed by Tudor, Pickering, Holt & Co. About The Firm Tudor, Pickering, Holt & Co. is an integrated energy investment and merchant bank, providing high quality advice and services to institutional and corporate clients. Through the companys two broker-dealer units, Tudor, Pickering, Holt & Co. Securities, Inc. (TPHCSI) and Tudor Pickering Holt & Co Advisors LP (TPHCA), members FINRA, the company offers securities and investment banking services to the energy community. TPH Asset Management LP (TPHAM) is an SEC registered investment adviser that delivers a suite of energy investment strategies. TPH Partners Group LP is a relying advisor of TPHAM. Certain employees of TPHAM are also employees of TPHCSI. The information contained herein is confidential (except for information relating to United States tax issues) and may not be reproduced in whole or in part. Tudor, Pickering, Holt & Co. assumes no responsibility for independent verification of third-party information and has relied on such information being complete and accurate in all material respects. To the extent such information includes estimates and forecasts of future financial performance (including estimates of potential cost savings and synergies) prepared by, reviewed or discussed with the managements of your company and/ or other potential transaction participants or obtained from public sources, we have assumed that such estimates and forecasts have been reasonably prepared on bases reflecting the best currently available estimates and judgments of such managements (or, with respect to estimates and forecasts obtained from public sources, represent reasonable estimates). These materials were designed for use by specific persons familiar with the business and the affairs of your company and Tudor, Pickering, Holt & Co. materials. The firm, headquartered in Houston, Texas, has approximately 170 employees and offices in Calgary, Canada; Denver, Colorado; and New York, New York. Its affiliate, Tudor, Pickering Holt & Co. International, LLP, is located in London, England. Its Canadian affiliate, Tudor Pickering Holt & Co Securities Canada LP, is located in Calgary, Alberta. Contact Us Houston (Research, Sales and Trading): 713-333-2960 Houston (Investment Banking): 713-333-7100 Houston (Asset Management): 713-337-3999 Denver (Sales): 303-300-1900 Denver (Investment Banking): 303-300-1900 New York (Investment Banking): 212-610-1660 New York (Research, Sales): 212-610-1600 London: +011 44(0) 20 3008 6428 Calgary: 403-705-7830 Under no circumstances is this presentation to be used or considered as an offer to sell or a solicitation of any offer to buy, any security. Prior to making any trade, you should discuss with your professional tax, accounting, or regulatory advisers how such particular trade(s) affect you. This brief statement does not disclose all of the risks and other significant aspects of entering into any particular transaction. Tudor, Pickering, Holt & Co. International, LLP is authorized and regulated by the Financial Conduct Authority and is the United Kingdom affiliate of www.TPHco.com Tudor, Pickering, Holt & Co. Copyright 2018 Tudor, Pickering, Holt & Co. 7 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Project Alpine VWAP Exchange Ratio Analysis August 31, 2018 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
VWAP Exchange Ratio Analysis AM GP S/O 186.209 AM GP S/O 186.209 AM GP VWAP $18.76 AM GP VWAP $18.59 AM GP VWAP Equity Value $3,493 AM GP VWAP Equity Value $3,461 Series B Threshold $2,000 Series B Threshold $2,000 Redem ption Right 6.0% Redem ption Right 6.0% Series B M arket Value $90 Series B M arket Value $88 Series B Negotiated Shares 18.5 Series B Negotiated Shares 18.5 Fully Diluted AM GP VWAP $17.50 Fully Diluted AM GP VWAP $17.33 AM VWAP $31.60 AM VWAP $31.33 Premium 10.0% Premium 10.0% AM Share Pric e $29.74 AM GP Share Pric e $17.28 2 Spot XR 1.721x Source: Company filings, FactSet as of 8/30/2018. Current Spot X R Fully Diluted VWAP XR @ 10% Premium 1.988x Fully Diluted VWAP XR @ 10% Premium 1.986x Fully Diluted VWAP XR 1.808x Fully Diluted VWAP XR 1.806x AM GP VWAP Based Equity Value $3,549 AM GP VWAP Based Equity Value $3,582 20-Day VWAP Analysis 30-Day VWAP Analysis CONFIDENTIAL DRAFT SUBJECT TO CHANGE
VWAP Calculation Detail - AMGP 30-Day VWAP Calculation Detail 20-Day VWAP Calculation Detail 3 Source: Company filings, FactSet as of 8/30/2018. Volume Total Traded Date Price (000's) Value ($000's) Daily VWAP 8/3/2018 $18.50 417.8 8/6/2018 $18.89 380.8 8/7/2018 $18.85 252.3 8/8/2018 $19.01 412.0 8/9/2018 $19.19 403.1 8/10/2018 $19.34 639.5 8/13/2018 $19.01 333.9 8/14/2018 $19.10 394.8 8/15/2018 $18.61 356.4 8/16/2018 $18.72 302.7 8/17/2018 $18.88 541.7 8/20/2018 $19.09 1,111.8 8/21/2018 $19.36 1,570.5 8/22/2018 $19.47 687.0 8/23/2018 $18.75 776.4 8/24/2018 $18.35 590.1 8/27/2018 $18.05 618.5 8/28/2018 $17.67 1,223.7 8/29/2018 $17.26 1,040.0 8/30/2018 $17.28 690.9 $7,728.71 $18.64 $7,194.16 $18.83 $4,756.44 $18.84 $7,831.25 $18.93 $7,735.35 $19.38 $12,367.20 $19.08 $6,347.21 $19.04 $7,540.41 $19.10 $6,633.26 $18.72 $5,666.53 $18.72 $10,227.35 $18.82 $21,223.61 $18.97 $30,404.47 $19.24 $13,376.79 $19.36 $14,556.90 $18.89 $10,828.37 $18.32 $11,164.29 $18.05 $21,622.46 $17.75 $17,949.55 $17.30 $11,939.22 $17.28 20 Day VWAP $18.59 Volume Total Traded Date Price (000's) Value ($000's) Daily VWAP 7/20/2018 $19.24 306.3 7/23/2018 $19.22 359.5 7/24/2018 $19.06 170.7 7/25/2018 $19.40 877.0 7/26/2018 $19.50 264.4 7/27/2018 $19.11 317.2 7/30/2018 $19.26 263.7 7/31/2018 $19.22 188.5 8/1/2018 $19.22 420.2 8/2/2018 $19.04 813.4 8/3/2018 $18.50 417.8 8/6/2018 $18.89 380.8 8/7/2018 $18.85 252.3 8/8/2018 $19.01 412.0 8/9/2018 $19.19 403.1 8/10/2018 $19.34 639.5 8/13/2018 $19.01 333.9 8/14/2018 $19.10 394.8 8/15/2018 $18.61 356.4 8/16/2018 $18.72 302.7 8/17/2018 $18.88 541.7 8/20/2018 $19.09 1,111.8 8/21/2018 $19.36 1,570.5 8/22/2018 $19.47 687.0 8/23/2018 $18.75 776.4 8/24/2018 $18.35 590.1 8/27/2018 $18.05 618.5 8/28/2018 $17.67 1,223.7 8/29/2018 $17.26 1,040.0 8/30/2018 $17.28 690.9 $5,893.39 $19.35 $6,910.09 $19.18 $3,253.33 $19.11 $17,014.67 $19.46 $5,156.50 $19.51 $6,060.85 $19.33 $5,078.40 $19.18 $3,623.89 $19.26 $8,076.84 $19.24 $15,486.22 $19.20 $7,728.71 $18.64 $7,194.16 $18.83 $4,756.44 $18.84 $7,831.25 $18.93 $7,735.35 $19.38 $12,367.20 $19.08 $6,347.21 $19.04 $7,540.41 $19.10 $6,633.26 $18.72 $5,666.53 $18.72 $10,227.35 $18.82 $21,223.61 $18.97 $30,404.47 $19.24 $13,376.79 $19.36 $14,556.90 $18.89 $10,828.37 $18.32 $11,164.29 $18.05 $21,622.46 $17.75 $17,949.55 $17.30 $11,939.22 $17.28 30 Day VWAP $18.76 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
VWAP Calculation Detail - AM 30-Day VWAP Calculation Detail 20-Day VWAP Calculation Detail 4 Source: Company filings, FactSet as of 8/30/2018. Volume Total Traded Date Price (000's) Value ($000's) Daily VWAP 8/3/2018 $32.28 814.7 8/6/2018 $31.43 674.9 8/7/2018 $31.25 606.7 8/8/2018 $31.60 651.7 8/9/2018 $32.42 789.4 8/10/2018 $32.25 2,742.7 8/13/2018 $31.24 722.7 8/14/2018 $31.24 617.7 8/15/2018 $30.56 580.0 8/16/2018 $30.28 490.0 8/17/2018 $30.80 412.1 8/20/2018 $31.06 958.5 8/21/2018 $30.86 1,080.5 8/22/2018 $31.35 476.6 8/23/2018 $30.95 302.1 8/24/2018 $30.79 343.6 8/27/2018 $30.37 371.1 8/28/2018 $29.91 898.8 8/29/2018 $29.75 449.6 8/30/2018 $29.74 442.7 $26,299.26 $32.42 $21,213.40 $31.64 $18,960.31 $31.14 $20,592.49 $31.50 $25,593.00 $32.34 $88,451.08 $32.38 $22,575.74 $31.38 $19,295.45 $31.47 $17,724.71 $30.57 $14,835.69 $30.23 $12,692.65 $30.84 $29,769.80 $31.11 $33,345.59 $31.06 $14,941.82 $31.25 $9,351.05 $31.15 $10,579.84 $30.88 $11,268.97 $30.42 $26,882.63 $30.07 $13,374.50 $29.84 $13,165.69 $29.61 20 Day VWAP $31.33 Volume Total Traded Date Price (000's) Value ($000's) Daily VWAP 7/20/2018 $31.64 574.6 7/23/2018 $32.07 365.8 7/24/2018 $31.46 503.8 7/25/2018 $31.92 490.5 7/26/2018 $32.74 433.8 7/27/2018 $31.74 633.2 7/30/2018 $32.16 862.6 7/31/2018 $33.04 445.5 8/1/2018 $32.65 553.1 8/2/2018 $33.89 588.0 8/3/2018 $32.28 814.7 8/6/2018 $31.43 674.9 8/7/2018 $31.25 606.7 8/8/2018 $31.60 651.7 8/9/2018 $32.42 789.4 8/10/2018 $32.25 2,742.7 8/13/2018 $31.24 722.7 8/14/2018 $31.24 617.7 8/15/2018 $30.56 580.0 8/16/2018 $30.28 490.0 8/17/2018 $30.80 412.1 8/20/2018 $31.06 958.5 8/21/2018 $30.86 1,080.5 8/22/2018 $31.35 476.6 8/23/2018 $30.95 302.1 8/24/2018 $30.79 343.6 8/27/2018 $30.37 371.1 8/28/2018 $29.91 898.8 8/29/2018 $29.75 449.6 8/30/2018 $29.74 442.7 $18,179.30 $31.75 $11,730.05 $32.00 $15,848.64 $31.90 $15,658.23 $31.76 $14,202.74 $32.66 $20,097.99 $31.95 $27,740.77 $32.09 $14,718.30 $32.69 $18,060.28 $32.69 $19,927.76 $33.63 $26,299.26 $32.42 $21,213.40 $31.64 $18,960.31 $31.14 $20,592.49 $31.50 $25,593.00 $32.34 $88,451.08 $32.38 $22,575.74 $31.38 $19,295.45 $31.47 $17,724.71 $30.57 $14,835.69 $30.23 $12,692.65 $30.84 $29,769.80 $31.11 $33,345.59 $31.06 $14,941.82 $31.25 $9,351.05 $31.15 $10,579.84 $30.88 $11,268.97 $30.42 $26,882.63 $30.07 $13,374.50 $29.84 $13,165.69 $29.61 30 Day VWAP $31.60 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
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Series B Sensitivity Exchange Ratio Analysis All AM Unitholders 1 Source: Company management, FactSet as of 8/30/2018. Note: Based on AMGP share price of $17.28. Exchange Ratio XR Consideration to Unaffiliateds XR Consideration to AR Value of XR Consideration Incremental Value with XR Increase Total Implied Series B value Shares Issued to Series B Unitholders 1.775x$2,767$3,079$5,846-$32018.5 1.785x$2,782$3,096$5,879$33$28716.6 1.795x$2,798$3,114$5,911$33$25514.7 1.805x$2,813$3,131$5,944$33$22212.9 1.815x$2,828$3,148$5,976$33$19011.0 1.825x$2,844$3,165$6,009$33$1579.1 1.835x$2,859$3,182$6,041$33$1257.2 1.845x$2,874$3,200$6,074$33$925.3 1.855x$2,889$3,217$6,106$33$603.5 1.865x$2,905$3,234$6,139$33$271.6 1.875x$2,920$3,251$6,171$33N/AN/A 1.885x$2,935$3,269$6,204$33N/AN/A CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Series B Sensitivity Exchange Ratio Analysis Unaffiliated AM Unitholders 2 Source: Company management, FactSet as of 8/30/2018. Note: Based on AMGP share price of $17.28. Exchange Ratio XR Consideration to Unaffiliateds XR Consideration to AR Value of XR Consideration Incremental Value with XR Increase Total Implied Series B value Shares Issued to Series B Unitholders 1.775x$2,767$3,079$5,846-$32018.5 1.785x$2,782$3,079$5,862$15$30417.6 1.795x$2,798$3,079$5,877$15$28916.7 1.805x$2,813$3,079$5,892$15$27415.8 1.815x$2,828$3,079$5,907$15$25915.0 1.825x$2,844$3,079$5,923$15$24314.1 1.835x$2,859$3,079$5,938$15$22813.2 1.845x$2,874$3,079$5,953$15$21312.3 1.855x$2,889$3,079$5,969$15$19711.4 1.865x$2,905$3,079$5,984$15$18210.5 1.875x$2,920$3,079$5,999$15$1679.7 1.885x$2,935$3,079$6,014$15$1528.8 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Project Alpine Special Committee Materials September 2, 2018 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Table of Contents Antero Situation Overview I AM Financial Analysis II AMGP Financial Analysis III Analysis of Transaction IV Pro Forma Impact for AMGP Proposal V Pro Forma Trading Analysis VI After-Tax Pro Forma Impact Supplemental Materials for AMGP Proposal VII Appendix 2 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
I. Antero Situation Overview 3 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Prior vs. Current Since August 14, 2018 Special Committee Meeting Updated materials to reflect most recent AMGP and AM Proposals AMGP Proposal: 1.614x AMGP shares, $3.00 of cash consideration, and a special one-time distribution on the unaffiliated AM units of $0.415 (All-in exchange ratio of 1.797x) For post unitholder tax analysis, cash used to pay taxes and remaining cash assumed to be used to purchase additional secondary shares AM Proposal: 1.710x AMGP shares and $3.00 of cash consideration for each AM Unit (All-in exchange ratio of 1.884x) Cash consideration financed by term loan at 5.5% interest rate per company guidance Special distribution taxed as ordinary income Updated materials for market prices at close 8/30/2018 4 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Summary of Proposal from AMGP Each AM Common Unit to receive: 1.614 AMGP units $3.00 Cash Public unitholders to receive $0.415 special cash distribution at closing Represents a 4% premium to current spot XR as of August 30, 2018 Based on prices as of February 23, 2018, offer implies a 18% premium to AMs closing price and 6% premium to 30-day VWAP Based on prices as of August 30, 2018, implies a (1%) discount to AMs 30-day VWAP Series B units will be exchanged for 18.5mm AMGP shares Implies ~$320mm valuation at market close as of August 30, 2018 Newly issued AMGP shares will vest on the same schedule as Series B units Unvested new AMGP shares do not accrue dividends Pro forma for transaction equity ownership breakdown as follows: AM Unitholders: ~59.7% AMGP Shareholders: ~36.6% Series B Unitholders: ~3.6% Streamlined Transaction Structure Single, publicly-traded midstream corporation Alignment of management incentives between AM unitholders, AMGP shareholders and Series B unitholders Improved Financial Performance Elimination of IDRs will reduce PF AMGPs cost of capital relative to SQ entity Elimination of Series B will increase cash available for distribution to PF equity owners Expected elimination of cash taxes payable by PF AMGP through 5-year forecast as a result of the tax basis step-up attributable to the Transaction and additional depreciation generated from capital investment Enhanced Trading Metrics PF AMGP will have larger float and greater liquidity Larger potential investor base given institutional investor preference for traditional C-corp structure New shares should, over time, be eligible for inclusion in major indices further expanding investor universe PF AMGP will be reestablished as a Delaware C-corp 9-member independent, Board of Directors with no more than 4 appointed by AR, the Sponsors or Management AR, the Sponsors, and Management agree to vote in support of independent directors nominated by the Nominations & Governance Committee 5 Governance AMGPs Original Stated Rationale for Transaction Pro Forma Ownership Splits Series B Valuation Consideration Proposal ComponentDescription CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Antero Entities Ownership Overview ($ in millions, unless otherwise noted) Organizational Structure Overview Net Debt Sponsors Management Public Shareholders 72% A Units Management Public Unitholders Source: Company filings, FactSet as of 8/30/2018. (1) 50% of Series B remain unvested; remaining 50% will vest half on 12/31/2018 and half on 12/31/2019. All shares automatically vest upon the liquidation of IDR LLC. Value based on 6% of AMGP equity value above $2,000mm. (2) AR net debt consolidates for AM. 6 Sponsor/M anagenent Ownership AR AM AM GP - Series A AM GP - Series B(1) Total # Shares (000s) Value ($MM) % Outstanding # Units (000s) Value ($MM) % Outstanding # Shares (000s) Value ($MM) % Outstanding Units (000s) Value ($MM) % Outstanding Warburg Pinc us LLC 46,609 $880 14.7% - - - 55,110 $952 29.6% - - - Yorktown Partners LLC 12,905 $244 4.1% - - - 15,534 $268 8.3% - - - Total Aggregate Investm ent $1,832 $512 Total Sponsor 59,514 $1,123 18.8% - - - 70,644 $1,221 37.9% - - - $2,344 Paul Rady 16,350 $309 5.2% 303 $9 0.2% 19,997 $346 10.7% 48 $45 48.7% Glen Warren 10,823 $204 3.4% 207 $6 0.1% 14,931 $258 8.0% 32 $30 32.5% O ther 3 $0 0.0% 353 $10 0.2% 2,937 $51 1.6% 19 $18 18.9% $708 $499 $79 Total M anagement 29,787 $513 8.6% 863 $26 0.5% 37,865 $654 20.3% 99 $93 100.0% $1,286 TO TAL 89,301 $1,636 27.3% 863 $26 0.5% 108,509 $1,875 58.3% 99 $93 100.0% $3,630 B Units Management reholders 38% 19% 100%100% Series Antero IDR100% Series Holdings 9% Antero R esources (AR) (IDR LLC) Non-Econ100% IDRs GP 53% LP Antero Midstream Partners LP (AM) 47% LP Antero Midstream Partners GP LLC 20% Public Sha Antero Midstream GP LP (AMGP) 42% Metric AR AM AMGP Price (as of 8/30/2018) $18.87 $29.74 $17.28 Fully Dilluted Shares O/S 322 188 186 Market Equity Value 6,074 5,595 3,218 GP Equity Value - 3,218 - Total Equity Value 6,074 8,812 3,218 (2)5,274 1,400 (5) Series B Value - - 73 Total Enterprise Value $11,348 $10,213 $3,285 Value of AM Units Held $2,960 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Antero Midstream Timeline Relative Performance Since AM IPO (11/5/2014)(1,2) AM AM Peers AMGP AMGP Peers AR AMZ Notable Events Primary Issuance Secondary Issuance The Tax Cuts & 150% 125% 19% 100% (11%) (20%) 75% (26%) (43%) 50% 64%) 25% Nov-14 May-15 Nov-15 May-16 Nov-16 May-17 Nov-17 May-18 Source: Company filings, FactSet as of 8/30/2018. Note: AM peers include BPMP, CNXM, EQM, HESM, NBLX, PXSP, SHLX, WES, and VLP. AMGP peers include EQGP and WGP. Note: AM peer selection considered E&P sponsored MLPs and high-growth MLPs, categorized as such if current 2022E distribution growth CAGR is greater than 10%. (1) Indexed values reflect total return on investment. Distributions and dividends reinvested at current market price on date paid. (2) AM price performance indexed to IPO price of $25.00 and AMGP price performance indexed to IPO price of $23.50. 7 2/14/2018 SailingStone Capital files 13D disclosing 11% stake in Antero Resources ( 2/23/2018 Antero Midstream Partners announces the formation of Special Committee 11/5/2014 AM IPO 3/24/2016 AM prices offering of ~8MM common units (~$179MM) from AR 12/22/2017 Jobs Act is signed into law 9/6/2017 AM prices public offering of ~10MM common units (~$315MM) from AR 2/6/2017 AM prices public offering of ~6MM common units (~$198MM) CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Antero Midstream Timeline Relative Performance Since Committee Announcement (2/23/2018)(1) AM AM Peers AMGP AMGP Peers AM E&P Sponsored Peers AR AMZ 130% 120% 12% 110% 7% 6% 100% (0%) (6%) (10%) (12%) 90% 80% Feb-18 Mar-18 Apr-18 May-18 May-18 Jun-18 Jul-18 Aug-18 Aug-18 Source: Company filings, FactSet as of 8/30/2018. Note: AM peers include BPMP, CNXM, EQM, HESM, NBLX, PXSP, SHLX, WES, and VLP. AM E&P Sponsored peers include CNXM, EQM, HESM, and NBLX. AMGP peers include EQGP and WGP. Note: AM peer selection considered E&P sponsored MLPs and high-growth MLPs, categorized as such if current 2022E distribution growth CAGR is greater than 10%. (1) Indexed values reflect total return on investment. Distributions and dividends reinvested at current market price on date paid. 8 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Antero Midstream Timeline Relative Performance Since Committee Announcement (2/23/2018)(1) AM CNXM EQ M HESM NBL X 130% 120% 12% 11% 9% 110% 100% (8%) 90% (14%) 80% 23-Feb-18 18-Mar-18 10-Apr-18 3-May-18 26-May-18 18-Jun-18 11-Jul-18 3-Aug-18 26-Aug-18 9 Source: Company filings, FactSet as of 8/30/2018. (1) Indexed values reflect total return on investment. Distributions and dividends reinvested at current market price on date paid. CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Historical XR & Distribution Comparison Since AMGP IPO (5/4/17) | Based on Spot Prices ($ in millions, unless otherwise noted) Historical AM/AMGP Exchange Ratio Contrac tual Valuation Yield-Based Valuation 2.20x 2.00x Adj. AM GP Share Pric e $16.08 $16.90 $17.28 (2) 1.850x 1.797x 1.721x 1.80x 1.60x 1.40x 1.20x May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Antero Midstream Historical Distribution Split by Entity(3) AM AMGP Series B AM Distribution CAGR: 29% AMGP Distribution CAGR: 136% 1% 1% 2% 16% 1% 1% 19% 22% 24% Q1 '15 '17 '17 70% 7 / $0.18 $29 / $0.19 $36 / $0.21 $39 / $0.22 $41 / $0.24 $44 / $0.25 $47 / $0.27 $50 / $0.28 $56 / $0.30 $60 / $0.32 $63 / $0.34 $68 / $0.37 Q1-'15 - Q2$'015/ $0.00 - Q3 '15 $1 / $0.Q041'15 - $2Q/1$'106.01 - Q2$'136/ $0.02 Q3 '16 - $5 / $0Q.043'16 - $7Q/1 $'107.04 $0 Q2$'171 / $0.06 Q3 '17 $14 / $0Q.40'817 $18Q1/'1$80.10 $1 Q2$'1282 / $0.13 - - $1 $1 $1 AMGP(4) - - $0 $1 $2 $3 $5 $7 $11 $5 / $0.05 $11 / $0.06 $14 / $0.08 $20 / $0.11 $20 / $0.11 Source: Company filings, FactSet as of 8/30/2018. (1) (2) Proposal % Premium / (Discount) calculated as premium / (discount) between current proposal (1.775x) and adjusted XR. Adjusted to reflect proposed Series B conversion, with AMGP share price calculated as (AMGP equity value + [(AMGP equity value - $2bn) x 6%])/(AMGP fully diluted shares outstanding + 18.5mm). AM CAGR is calculated from Q115 to Q118. AMGP CAGR is calculated from Q217 to Q118 based on initial post-IPO distribution grossed up for full quarter. AMGP attributable distribution per AM LP unit pre-IPO. AMGP CAFD & declared distribution post-IPO. 10 (3) (4) AM LP$27 / $0.18 $29 / $0.19 $36 / $0.21 $39 / $0.22 $41 / $0.24 $44 / $0.25 $47 / $0.27 $50 / $0.28 $56 / $0.30 $60 / $0.32 $63 / $0.34 $68 / $0.37 $73 / $0.39 $71 / $0.42 Series B-- - - - - - $0 $1 $1 $1 $1 $2 $2 1% 1% 1% 1% 2% 2% 2% Q2 '15 100% Q3 100% '15 1% 99% Q4 2% '15 98% 4% Q1 '16 96% 6% Q2 94% '16 Q3 16% 19% 22% 24% 26% 28% 12% '16 87% Q2 9% 91% 77% Q4 '16 83% '17 74% Q1 80% Q3 '17 72% Q4 AMGP Proposal Spot XR Series B Conversion Units18.518.523.6 Adj. XR Current AM Share Pric e$29.74$29.74$29.74 At 2/23/2018 Adjusted XR1.850x1.760x1.721x AM GP Units O utstanding Inc luding Series B204.7204.7533.5 Sample Adjusted XR Calculation AMGP Proposal % Period Spot X R Adj. X R(2) Premium / (Discount)(1) At Transac tion Contrac tual Valuation AM GP Shares O utstanding186.2186.2186.2 AM GP Units IssuedNANA323.7 AM GP Pric e$17.28$17.28$17.28 AMGP Proposal --1.797x --Current 1.721x 1.850x (2.9%) 3-Month Average (Current) 1.632x 1.749x 2.7% 30-Day Average (Current) 1.668x 1.788x -0.5% 2/23/2018 1.380x 1.478x 21.5% 3-Month Average (at 2/23/2018) 1.484x 1.588x 13.1% 30-Day Average (at 2/23/2018) 1.444x 1.543x 16.4% Since AMGP IPO Average 1.569x 1.681x 6.9% AM GP M arket Value$3,218$3,218$8,810 2018E Series B CFNA$7NA 2018E YieldNA2.8%NA Series B Threshold$2,000 NA$2,000 Series B Redem ption Right6.0%NA6.0% Implied Series B Valuation$73$241$409 AM GP Equity Value Inc luding Series B$3,291$3,459$9,219 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
II. AM Financial Analysis 11 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AM Selected Comparable Company Analysis Dist. Growth 2018E to 2020E CAGR Unit Price at 8/30/2018 Total Equity Market Value(1) Enterprise Value % Dist. to GP/IDRs Price (Yield) DCF / LP Unit EBITDA 2018E Coverage Company Current 2018E 2018E 2019E 2018E 2019E DCF / Unit DCF / Unit Source: FactSet as of 8/30/2018 and Wall Street research. (1) (2) (3) (4) Values GP and IDR cash flow at LP yield for MLPs with non-public GPs. Defined as high-growth MLP if current 2020E distribution growth CAGR is greater than 10%. Based on Wall Street consensus estimates as compiled by FactSet. Antero Midstream Partners LP announced on February 26, 2018 that its Board of Directors had formed a special committee, in conjunction with the formation of special committees at both Antero Resources and Antero Midstream GP, to evaluate potential measures and transactions that could involve Antero Midstream. Implied unit prices are calculated based on Management projections. 12 (5) LP Distribution / Unit Yield Range Implied Unit Price AM at Mgmt.AM at WSC Low Median High Low Median High 2018E Distribution$1.72$1.717.8%6.2%4.9% Yield $22.06$27.70$34.99 Metric Multiple Range Implied Unit Price(5) AM at Mgmt.AM at WSC Low Median High Low Median High 2018E LP$2.04$2.199.4x12.4x14.7x $19.22$25.31$30.10 2019E LP$2.74$2.657.7x11.3x13.3x $21.23$30.95$36.41 Metric Multiple Range Implied Unit Price (5) AM at Mgmt.AM at WSC Low Median High Low Median High 2018E EBITDA$730$71411.7x13.7x18.1x $20.29$28.14$45.32 2019E EBITDA$989$9318.2x10.8x12.0x $18.02$32.02$38.33 Mean $5,893 $7,845 15% 17% 6.0% 6.2% 12.9x 11.5x 14.5x 10.6x 1.32x Median $3,709 $4,884 15% 28% 6.0% 6.2% 12.4x 11.3x 13.7x 10.8x 1.27x Low $1,285 $1,904 5% 0% 4.8% 4.9% 9.4x 7.7x 11.7x 8.2x 1.03x High $13,178 $17,364 20% 38% 7.7% 7.8% 14.7x 13.3x 18.1x 12.0x 2.00x E&P Sponsored Mean $5,943 $8,068 14% 18% 6.5% 6.7% 11.6x 10.1x 13.5x 10.5x 1.31x E&P Sponsored Median $1,864 $3,313 15% 12% 6.8% 6.9% 11.5x 9.8x 13.7x 10.8x 1.13x Other High - Growth MLP Mean $5,830 $7,566 13% 24% 5.9% 6.1% 13.5x 12.0x 14.5x 10.8x 1.27x Other High - Growth MLP Median $5,355 $6,911 13% 30% 5.8% 6.1% 13.7x 11.9x 13.9x 11.0x 1.30x AM at WSC (3,4)$29.74 $8,885 $10,281 28% 30% 5.2% 5.7% 13.6x 11.2x 14.4x 11.0x 1.25x AM at Mgmt. Estimates $29.74 $8,885 $10,281 29% 30% 5.2% 5.8% 14.6x 10.8x 14.1x 10.4x 1.27x E&P Spon. Western Gas Partners, L.P. $49.52 $13,178 $17,364 5% 35% 7.7% 7.7% 9.4x 7.7x 14.4x 12.0x 1.09x CNX Midstream Partners LP 19.85 1,431 1,904 15% 12% 6.8% 6.9% 11.5x 8.6x 11.7x 8.2x 1.29x HG & E&P Spon.(2)` Hess Midstream Partners LP 23.02 1,285 3,313 15% 2% 5.8% 6.1% 14.7x 13.3x 13.2x 10.8x 1.13x Noble Midstream Partners LP 44.58 1,864 3,032 20% 5% 4.8% 4.9% 11.8x 10.9x 13.7x 10.4x 2.00x EQT Midstream Partners LP 56.73 11,958 14,728 15% 35% 7.7% 7.8% 10.6x 9.8x 14.7x 10.8x 1.03x Other High Growth MLP Shell Midstream Partners LP 22.54 7,000 8,939 12% 28% 6.5% 6.6% 13.7x 11.7x 14.9x 10.9x 1.10x BP Midstream Partners LP 19.87 2,221 2,527 15% 0% 5.4% 5.6% 14.1x 12.0x 18.1x 11.2x 1.27x Valero Energy Partners LP 36.40 3,709 4,884 14% 32% 6.0% 6.2% 12.4x 11.3x 12.2x 9.7x 1.39x Phillips 66 Partners LP 51.57 10,389 13,914 10% 38% 5.5% 6.0% 13.7x 13.0x 12.9x 11.5x 1.33x M K L Enterprise Value / I J Price / G H LP Distribution / Unit / F E D C B A CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Precedents | MLP Transactions Analysis 6/19/18 Cheniere Energy Inc. Cheniere Energy Partners LP Holdings 5,651 10.7x $5,526 10.4x $1,240 2.2% 0% No C-Corp Affiliate 3/26/18 Tall Grass Energy GP, LP Tallgrass Energy Partners, LP 8,361 12.0x 8,083 11.6x 1,686 0.6% 0% Yes C-Corp Affiliate 1/2/18 Archrock, Inc Archrock Partners, LP 2,438 9.6x 2,358 9.3x 607 23.4% 0% Yes C-Corp Affiliate 5/18/17 Energy Transfer Partners, LP PennTex Midstream Partners, LP 963 12.6x 873 11.4x 280 20.1% 100% Yes MLP Affiliate 4/3/17 World Point Terminals, Inc. World Point Terminals, LP 594 9.1x 570 8.8x 159 5.8% 100% Yes C-Corp Affiliate 1/27/17 Enbridge Energy Company Midcoast Energy Partners, LP 1,176 11.4x 1,194 11.6x 170 (8.6%) 100% Yes C-Corp Affiliate 10/24/16 American Midstream Partners LP JP Energy Partners LP 476 8.6x 476 8.6x 302 9.1% 0% No MLP 3rd Party 5/30/16 SemGroup Corp. Rose Rock Midstream 2,034 12.0x 2,034 12.0x 771 0.0% 0% Yes C-Corp Affiliate 8/1/16 Transocean, Inc Transocean Partners 1,202 3.5x 1,153 3.3x 259 20.8% 0% No C-Corp Affiliate 7/13/15 MPLX LP MarkWest Energy Partners, LP 22,360 22.8x 22,360 22.8x 16,612 36.3% 8% No MLP 3rd Party 4/6/15 Tesoro Logistics LP QEP Midstream Partners LP 1,145 7.5x 1,104 7.2x 394 8.6% 0% No MLP Affiliate 6/15/14 Williams Partners LP Access Midstream Partners LP 35,891 11.0x 35,891 11.0x 23,579 1.3% 0% No MLP Affiliate 11/12/14 Enterprise Products Partners LP Oiltanking Partners LP 4,289 23.0x 4,243 22.8x 1,392 1.7% 0% No MLP Affiliate 8/10/14 Kinder Morgan Inc. El Paso Pipeline Partners 13,677 11.9x 13,193 11.4x 5,421 15.4% 12% Yes C-Corp Affiliate 10/10/13 Regency Energy Partners LP PVR Partners LP 5,659 13.5x 5,659 13.5x 3,931 25.7% 1% No MLP 3rd Party 5/6/13 Inergy Midstream LP Crestwood Midstream Partners LP 2,643 14.6x 2,643 14.6x 1,661 14.5% 4% No MLP 3rd Party 2/23/11 Enterprise Products Partners Duncan Energy Partners LP 3,282 9.5x 2,973 8.6x 1,006 28.1% 0% No MLP Affiliate Mean 12,092 9.8x 11,802 9.6x 4,240 9.7% 37% Mean 15,329 10.8x 15,121 10.6x 6,283 10.1% 25% Mean 5,653 14.0x 5,642 14.0x 3,831 18.7% 22% Mean 12,768 11.7x 12,612 11.5x 5,634 12.4% 24% --Antero Midstream GP LP Antero Midstream Partners LP $10,126 13.9x ---- --(2.9%) 6% Yes C-Corp Affiliate AMGP Proposal AM Proposal Source: Company filings, press releases, presentations and FactSet for pricing data. Represents precedent MLP transactions by affiliated and third party MLPs, Public GPs and C-Corps since 2011. Note: Considers transactions where target is an MLP. (1) (2) (3) (4) (5) Based on Wall Street research. Non-adjusted transaction TEV values affiliated and non-affiliated units at offer price. Adjusted transaction TEV value affiliated units at market price and non-affiliated units at offer price. Illustrative transaction value for PF AMGP at AMGP Proposal includes conversion of Series B units, AM existing debt, and the purchase of AM units outstanding. Excludes transaction fees. Premium to Series B implied current XR of 1.850. Illustrative transaction value for PF AMGP at AM Proposal includes conversion of Series B units, cash consideration to avoid share selling, AM existing debt, and the purchase of AM units outstanding. Excludes transaction fees. Assumes cash consideration of $3.00 per public unit outstanding. Premium to Series B implied current XR of 1.850. 13 C-Corp Buying MLP Median $4,375 10.6x $4,284 10.5x $1,078 8.8% 6% Affiliate Median $4,289 10.7x $4,243 10.5x $1,240 8.6% 0% 3rd Party Median $4,858 13.5x $4,858 13.5x $1,982 15.2% 4% Ov erall Median $4,573 11.2x $4,550 11.2x $1,674 11.9% 0% (4) (5) --Antero Midstream GP LP Antero Midstream Partners LP 10,382 14.2x ---- --1.8% 5% Yes C-Corp Affiliate 1/29/13 Kinder Morgan Energy Partners LP Copano Energy LLC 4,858 14.9x 4,858 14.9x 3,911 23.5% 0% No MLP 3rd Party 8/27/13 Plains All American LP PAA Natural Gas Storage LP 2,531 20.1x 2,434 19.4x 755 8.5% 0% No MLP Affiliate 7/24/14 Breitburn Energy Partners QR Energy LP 2,856 9.4x 2,856 9.4x 1,811 17.5% 19% No MLP 3rd Party 8/10/14 Kinder Morgan Inc. Kinder Morgan Energy Partners 52,566 8.8x 52,351 8.8x 27,351 12.0% 12% Yes C-Corp Affiliate 10/13/14 Targa Resources Partners LP Atlas Pipeline Partners LP 6,002 17.5x 6,002 17.5x 3,866 15.0% 3% No MLP 3rd Party 1/26/15 Energy Transfer Partners, LP Regency Energy Partners LP 18,593 11.0x 18,593 11.0x 11,276 13.2% 1% No MLP Affiliate 5/6/15 Crestwood Equity Partners, LP Crestwood Midstream Partners 6,920 11.9x 6,901 11.9x 3,381 17.2% 0% No MLP Affiliate 10/26/15 Western Refining, Inc. Northern Tier Energy 5,286 11.8x 5,185 11.5x 1,982 11.7% 65% Yes C-Corp 3rd Party 11/3/15 Targa Resources Corp. Targa Resources Partners LP 12,229 10.6x 12,138 10.5x 6,672 18.4% 0% Yes C-Corp Affiliate 9/26/16 TranscanadaColumbia Pipeline Partners 3,464 4.9x 3,384 4.8x 915 11.1% 100% Yes C-Corp Affiliate 11/21/16 Sunoco Logistics Partners, LP Energy Transfer Partners, LP 54,455 9.7x 54,455 9.7x 21,965 (0.2%) 0% No MLP Affiliate 2/1/17 ONEOK, Inc ONEOK Partners, LP 23,654 12.0x 22,380 11.4x 9,309 25.8% 0% Yes C-Corp Affiliate 3/2/17 VTTI, B.V VTTI Energy Partners, LP 1,867 9.2x 1,842 9.1x 481 6.0% 100% Yes C-Corp Affiliate 8/29/17 Zenith Energy US, LP Arc Logistics Partners LP 736 12.9x 736 12.9x 407 15.2% 100% Yes MLP 3rd Party 2/7/18 Terra Nitrogen GP, Inc. Terra Nitrogen Co. LP 1,474 7.0x 1,432 6.8x $387 3.7% 100% Yes C-Corp Affiliate 5/17/18 Williams CompaniesWilliams Partners, LP 57,793 12.6x 56,013 12.2x 10,427 6.4% 0% Yes C-Corp Affiliate A B C D E F G H I J K L M Announcement Date Acquiror Target Transaction Value TEV / FY1 EBITDA(1,2) Adj. Transaction Value(1,3) Adj. TEV / FY1 EBITDA(1,3) Deal Value 1-Day Premium % Cash Taxable Transaction Buyer Type Transaction Type 8/1/18 Energy Transfer Equity, L.P. Energy Transfer Partners $66,981 8.9x 66,915 8.9x 27,179 11.2% 0% No MLP Affiliate CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AM DCF Analysis | AR Valuation Effective Date: 6/30/2018 Base Volumes Case Discounted Levered DCF Analysis Levered DCF Attributable to AM LP Unitholders Discounted Distribution Analysis Distributions Attributable to LP Unitholders 9.0x 10.5x 12.0x 8.0% 7.0% 6.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Levered DCF Analysis Supplemental Calculation Detail Discounted Distribution Analysis Supplemental Calculation Detail LP DCF per Unit $1.08 $2.74 $3.24 $3.75 $4.29 LP Distribution Per Unit $0.91 $2.21 $2.85 $3.42 $4.10 Disc ount Fac tor 0.976 0.909 0.826 0.751 Disc ount Fac tor 0.976 0.909 0.826 0.751 PV of LP DCF per Unit $1.05 $2.49 $2.67 $2.82 PV of LP Dist. per Unit $0.89 $2.01 $2.36 $2.57 Terminal M ultiple 10.5x Terminal Yield 7.0% Terminal Disc . Fac tor 0.716 Terminal Disc . Fac tor 0.716 14 Source: Management projections and FactSet as of 8/30/2018. Implied Terminal Value per Unit$41.94 Implied Value per Unit$49.76 Implied Terminal Value per Unit$32.24 Implied Value per Unit$41.27 Disc . LP Dist. Total$7.82 Disc . LP DCF Total$9.03 2H 2018E 2019E 2020E 2021E2022E 2H 2018E 2019E 2020E 2021E2022E $47.23 $52.82 $60.28 $44.52 $49.76 $56.75 $42.02 $46.94 $53.50 Discount Rate $38.81 $43.72 $48.64 $36.67 $41.27 $45.88 $34.68 $39.01 $43.33 Discount Rate 2022E Distribution Y ield 2022E DCF Multiple CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AM Illustrative AR Base Volumes Case Discounted Future Value AM Status Quo $59.16 $52.36 $51.83 $46.33 $46.08 $45.63 $40.58 $39.91 $35.28 $29.74 2019E 2020E 2021E 15 Source: Management projections and FactSet as of 8/30/2018. Note: Valuation based on annual distributions. Assumptions Management projections Valuation date as of 6/30/18 Future share price calculated at FY1 annual distributions divided by yield Discounted to 6/30/18 at 10% cost of equity Interim distributions discounted upon receipt to 6/30/18 6.0% 7.0% 8.0% Current Unit Price Yield CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AM DCF Analysis | AR Downside Valuation Effective Date: 6/30/2018 Volumes Case Discounted Levered DCF Analysis Levered DCF Attributable to AM LP Unitholders Discounted Distribution Analysis Distributions Attributable to LP Unitholders 9.0x 10.5x 12.0x 8.0% 7.0% 6.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Levered DCF Analysis Supplemental Calculation Detail Discounted Distribution Analysis Supplemental Calculation Detail LP DCF per Unit $1.01 $2.40 $3.02 $3.33 $3.76 LP Distribution Per Unit $0.86 $2.15 $2.58 $2.97 $3.42 Disc ount Fac tor 0.976 0.909 0.826 0.751 Disc ount Fac tor 0.976 0.909 0.826 0.751 PV of LP DCF per Unit $0.98 $2.19 $2.50 $2.50 PV of LP Dist. per Unit $0.84 $1.95 $2.13 $2.23 Terminal M ultiple 10.5x Terminal Yield 7.0% Terminal Disc . Fac tor 0.716 Terminal Disc . Fac tor 0.716 16 Source: Management projections and FactSet as of 8/30/2018. Implied Terminal Value per Unit$34.99 Implied Value per Unit$42.14 Implied Terminal Value per Unit$28.28 Implied Value per Unit$36.45 Disc . LP Dist. Total$7.15 Disc . LP DCF Total$8.17 2H 2018E 2019E 2020E 2021E2022E 2H 2018E 2019E 2020E 2021E2022E $34.30 $38.61 $42.91 $32.41 $36.45 $40.49 $30.66 $34.45 $38.25 Discount Rate $40.04 $44.71 $50.92 $37.76 $42.14 $47.97 $35.66 $39.76 $45.24 Discount Rate 2022E DCF Multiple 2022E Distribution Y ield CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AM Illustrative AR Downside Volumes Case Discounted Future Value AM Status Quo $49.98 $45.83 $43.86 $41.88 $39.98 $39.27 $36.29 $35.60 $32.11 $29.74 2019E 2020E 2021E 17 Source: Management projections and FactSet as of 8/30/2018. Note: Valuation based on annual distributions. Assumptions Management projections Valuation date as of 6/30/18 Future share price calculated at FY1 annual distributions divided by yield Discounted to 6/30/18 at 10% cost of equity Interim distributions discounted upon receipt to 6/30/18 6.0% 7.0% 8.0% Current Unit Price Yield CONFIDENTIAL DRAFT SUBJECT TO CHANGE
SQ AM After Tax Distribution Discount Model CONFIDENTIAL DRAFT 7% Yield-Based Terminal Value BT LP Distribution Per Unit AT LP Distribution Per Unit Discount Factor PV of LP Dist. per Unit $4.10 $4.09 0.683 $2.79 $0.91 0.976 $0.89 $2.21 0.909 $2.01 $2.85 0.826 $2.35 $3.41 0.751 $2.56 Terminal Yield 7.0% Tax Calculation: Average Purchase Price Existing RoC $26.64 ($3.37) Beginning Tax Basis $23.27 Beg. Avg. Tax Basis / Unit Less: Distributions / Unit Plus: Net Income Allocated $23.27 (1.72) (1.07) $20.49 (2.21) (0.78) $17.50 (2.85) (0.66) $13.99 (3.42) (0.38) $10.19 (4.10) 0.05 Avg. EOY Basis / Unit $20.49 $17.50 $13.99 $10.19 $6.14 Implied Terminal Value per Unit Less: Basis at YE 2022E Less: PAL at YE 2022E $58.57 ($6.14) ($3.96) Gain Subject to Tax $48.47 Capital Gain Ordinary Gain $29.53 $18.94 Total Tax on Gain per Unit Tax on Ordinary Gain - 33.4% Tax on Capital Gain - 23.8% State Tax on Ordinary Income - 5.2% State Tax on Capital Gain - 5.2% $6.33 7.03 0.98 1.53 Total Effective Tax Rate After-Tax Future Value per Unit Terminal Disc. Factor 32.7% $42.70 0.651 18 Source: Management projections and FactSet as of 8/30/2018. Note: Assumes Unit sold on 12/31/2022. Implied Present Value per Unit at 6% Terminal Yield $42.92 Implied Present Value per Unit at 7% Terminal Yield $38.41 Implied Present Value per Unit at 8% Terminal Yield $35.02 Total Tax on Gain $15.87 Total Gain $48.47 2018E 2019E 2020E 2021E 2022E Implied Terminal Future Value per Unit $58.57 Disc. LP Dist. Total $10.61 2H 2018E 2019E 2020E 2021E 2022E SUBJECT TO CHANGE
III. AMGP Financial Analysis 19 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AMGP Selected Comparable Company Analysis GP EBITDA (2) CAFD (3) Unit Price at 8/30/2018 Total Entity Equity Value Total Entity TEV Implied GP Equity Value Implied GP TEV Price (Yield) (1) 2018E - 2022E Dist. CAGR Company Current 2018E 2018E 2019E 2018E 2019E EQT GP Holdings LP(6) $21.03 $6,361 $6,863 $5,124 $6,361 5.8% 5.8% 18.1x 14.7x 16.8x 13.6x 25.3% Western Gas Equity Partners, LP 33.90 7,422 8,665 4,939 7,420 6.9% 7.0% 16.9x 15.4x 14.5x 13.2x 11.1% CAFD With Series B Conversion Source: FactSet as of 8/30/2018 and Wall Street research. Note: Implied GP value calculated as the equity value of GP - equity value of the LP units held + net debt held by the GP. (1) (2) Total entity distribution yield calculated as GP distribution per unit / share over current GP unit / share price. Total entity enterprise value calculated as the equity value of GP + net debt held by the GP. GP EBITDA calculated as total distributions to the GP. For AMGP, EBITDA calculated as total distributions to IDR, LLC less Series B payments. Implied GP equity value calculated as GP share / unit price times GP shares outstanding. Cash available for distribution (CAFD) calculated as GP EBITDA less interest expense and maintenance capex. Antero Midstream Partners LP announced on February 26, 2018 that its Board of Directors had formed a special committee, in conjunction with the formation of special committees at both Antero Resources and Antero Midstream GP, to evaluate potential measures and transactions that could involve Antero Midstream. Implied share prices are calculated based on Management projections. EQGP Pro Forma for RMP acquisition announced April 2018. Total HoldCo Distributions with Series B Conversion calculated as HoldCo distributions with post-tax Series B payments added back in over (AMGP FD S/O + 18.5mm Series B converted units). (3) (4) (5) (6) (7) 20 Total HoldCo Distributions Yield Range Implied Total Ent(i7t)y Share Price AMGP at Mgmt. Estimates AMGP at WSC Low Median High Low Median High 2018E Distribution $106 $105 7.0% 6.4% 5.8% Yield $7.42 $8.13 $8.98 Series B AMGP at Mgmt. Estimates AMGP at WSC Low Median High Low Median High 2019E $166 $177 13.2x 13.4x 13.6x $10.72 $10.87 $11.03 AMGP at Mgmt. Estimates AMGP at WSC Low Median High Low Median High With Series 2019E EBITDA $237 $235 14.7x 15.0x 15.4x B Conversion $16.99 $17.42 $17.85 Implied GP Share Pric(e5) Multiple Range Metric Implied Total Entity Share Price(5) Multiple Range Metric Series B Mean $6,892 $7,764 $5,031 $6,891 6.3% 6.4% 17.5x 15.0x 15.6x 13.4x 18.2% Median $6,892 $7,764 $5,031 $6,891 6.3% 6.4% 17.5x 15.0x 15.6x 13.4x 18.2% Low $6,361 $6,863 $4,939 $6,361 5.8% 5.8% 16.9x 14.7x 14.5x 13.2x 11.1% High $7,422 $8,665 $5,124 $7,420 6.9% 7.0% 18.1x 15.4x 16.8x 13.6x 25.3% AMGP at WSC(4) $17.28 $3,291 $3,291 $3,291 $3,285 2.9% 3.1% 32.9x 20.0x 32.9x 20.0x 58.4% AMGP at Mgmt Estimates $17.28 $3,291 $3,291 $3,291 $3,285 2.9% 3.1% 24.0x 14.7x 32.7x 19.8x 58.4% M K L Implied GP Equity Value / I J Total Entity Enterprise Value / G H Total Entity Distribution / Unit / F E D C B A CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AMGP DCF Analysis | AR Base Volumes Case AMGP with Series B Value Conversion | Valuation Effective Date: 6/30/2018 Discounted Levered DCF(1) Analysis Distributions Attributable to IDR, LLC | Before Series B Payments Discounted Distribution Analysis | Pre-Series B Payment AMGP Distributions | 1.0x Coverage | SQ AM Distribution Policy 14.0x 16.0x 18.0x 7.0% 5.5% 4.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Levered DCF(1) Analysis Supplemental Calculation Detail Discounted Distribution Analysis Supplemental Calculation Detail Adj. GP Dist. Per Share(2) Disc ount Fac tor HoldCo DCF $61 $178 $270 $352 $449 $0.30 $0.87 $1.32 $1.72 $2.20 Disc ount Fac tor 0.976 0.909 0.826 0.751 0.976 0.909 0.826 0.751 PV of GP FCF $60 $162 $223 $264 PV of GP Dist. per Share $0.29 $0.79 $1.09 $1.29 Terminal M ultiple 16.0x Terminal Yield 5.5% Terminal Disc . Fac tor 0.716 Terminal Disc . Fac tor 0.716 Less Net Debt / Corp. Adjustments (5) AM GP Shares O /S (Inc lusive of 18.5mm Series B Conversion Shares) 204.7 21 Source: Management projections and FactSet as of 8/30/2018. (1)AMGP discounted DCF defined as HoldCo DCF with Series B payments added back in. Discounted cost of equity at 10.0%. (2)Adj. GP distribution per share calculated as (AMGP DCF + Series B payment added back) / (fully diluted AMGP shares outstanding + 18.5mm converted Series B units). Implied Equity Value per Share $28.64 Implied Equity Value $5,863 Implied Terminal Value per Share $28.58 Implied Equity Value per Share $32.05 Implied Terminal Value Enterprise Value $5,858 Disc . Adj. Dist. Total $3.47 Disc . IDR Distribution Total $710 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E $27.54 $34.07 $45.50 $25.92 $32.05 $42.76 $24.43 $30.18 $40.24 Discount Rate $27.09 $30.44 $33.79 $25.50 $28.64 $31.79 $24.03 $26.98 $29.93 Discount Rate 2022E Distribution Y ield 2022E CAFD Multiple CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AMGP Illustrative AR Base Volumes Case Discounted Future Value AMGP Status Quo $44.70 $37.69 $33.45 $31.08 $28.01 $27.03 $22.90 $22.47 $18.23 $17.28 2019E 2020E 2021E 22 Source: Management projections and FactSet as of 8/30/2018. Note: Valuation based on annual distributions. Net of Series B value. Assumptions Management projections Valuation date as of 6/30/18 Future share price calculated at FY1 annual distributions divided by yield Discounted to 6/30/18 at 10% cost of equity Interim distributions discounted upon receipt to 6/30/18 4.0% 5.5% 7.0% Current Share Price Yield CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AMGP DCF Analysis | AR Downside Volumes Case AMGP with Series B Value Conversion | Valuation Effective Date: 6/30/2018 Discounted Levered DCF(1) Analysis Distributions Attributable to IDR, LLC | Before Series B Payments Discounted Distribution Analysis | Pre-Series B Payment AMGP Distributions | 1.0x Coverage | SQ AM Distribution Policy 14.0x 16.0x 18.0x 7.0% 5.5% 4.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Levered DCF(1) Analysis Supplemental Calculation Detail Discounted Distribution Analysis Supplemental Calculation Detail Adj. GP Dist. Per Share(2) Disc ount Fac tor HoldCo DCF $53 $169 $231 $287 $352 $0.26 $0.83 $1.13 $1.40 $1.72 Disc ount Fac tor 0.976 0.909 0.826 0.751 0.976 0.909 0.826 0.751 PV of GP FCF $52 $154 $191 $216 PV of GP Dist. per Share $0.26 $0.75 $0.93 $1.05 Terminal M ultiple 16.0x Terminal Yield 5.5% Terminal Disc . Fac tor 0.716 Terminal Disc . Fac tor 0.716 Less Net Debt / Corp. Adjustments (5) AM GP Shares O /S (Inc lusive of 18.5mm Series B Conversion Shares) 204.7 23 Source: Management projections and FactSet as of 8/30/2018. (1)AMGP discounted IDR distribution defined as HoldCo DCF with Series B payments added back in. Discounted cost of equity at 10.0%. (2)Adj. GP distribution per share calculated as (AMGP DCF + Series B payment added back) / (fully diluted AMGP shares outstanding + 18.5mm converted Series B units). Implied Equity Value per Share $22.71 Implied Equity Value $4,650 Implied Terminal Value per Share $22.38 Implied Equity Value per Share $25.38 Implied Terminal Value Enterprise Value $4,645 Disc . Adj. Dist. Total $3.00 Disc . IDR Distribution Total $613 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E $21.86 $26.97 $35.92 $20.58 $25.38 $33.77 $19.40 $23.90 $31.78 Discount Rate $21.51 $24.13 $26.76 $20.25 $22.71 $25.18 $19.10 $21.41 $23.72 Discount Rate 2022E Distribution Y ield 2022E CAFD Multiple CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AMGP Illustrative AR Downside Volumes Case Discounted Future Value AMGP Status Quo $35.28 $30.95 $26.71 $26.48 $23.04 $21.45 $19.70 $18.52 $15.69 $17.28 2019E 2020E 2021E 24 Source: Management projections and FactSet as of 8/30/2018. Note: Valuation based on annual distributions. Net of Series B value. Assumptions Management projections Valuation date as of 6/30/18 Future share price calculated at FY1 annual distributions divided by yield Discounted to 6/30/18 at 10% cost of equity Interim distributions discounted upon receipt to 6/30/18 4.0% 5.5% 7.0% Current Share Price Yield CONFIDENTIAL DRAFT SUBJECT TO CHANGE
IV. Analysis of Transaction 25 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Analysis at Various Exchange Ratios ($ in millions, unless otherwise noted) Comparable Metrics Trading Median Transaction Median (NTM) 13.7x 11.2x 10.8x 12.4x 11.3x 6.0% 6.2% Trading Median Transaction Median 13.7x 11.2x 10.8x 12.4x 11.3x 6.0% 6.2% Source: Company filings, and FactSet as for 8/30/2018. (1) (2) (3) (4) (5) Includes Series B conversion value of (AMGP equity value + [(AMGP equity value - $2bn) x 6%]). DCF attributable to the LP unitholders. Adjusted to reflect proposed Series B conversion, with AMGP share price calculated as (AMGP equity value + [(AMGP equity value - $2bn) x 6%])/(AMGP fully diluted shares outstanding + 18.5mm). AM Proposal: 1.710x XR and $3.00 cash consideration / unit. AMGP Proposal: 1.614x XR and $3.415 cash consideration / unit (spot pricing). 26 AR Downside Volumes Case AR Base Case K J E H I At AMGP Proposal( 5 ) At Current Adjusted(3) At AM Proposal(4) Exchange Ratio (At Current AMGP Sh. Price of $17.28) 1.700x 1.750x 1.797x 1.800x 1.850x 1.850x 1.884x Premium to Implied AM Unit Price (AMGP Share Price x Adj. Current XR) (8.1%) (5.4%) (2.8%) (2.7%) (0.0%) 0.0% 1.8% Implied AM Unit Price $27.33 $28.13 $28.89 $28.94 $29.74 $29.74 $30.28 Fully Diluted AM Units Outstanding 188.1 188.1 188.1 188.1 188.1 188.1 188.1 Implied Fully-Diluted AM Equity Value $5,141 $5,292 $5,435 $5,443 $5,595 $5,595 $5,696 AM Net Debt 1,400 1,400 AMGP Enterprise Value (Including Series B)(1) 3,285 3,285 1,400 3,285 1,400 1,400 3,285 3,285 1,400 3,285 1,400 3,285 Implied AM Enterprise Value(1) $9,827 $9,978 $10,121 $10,129 $10,280 $10,281 $10,382 Implied AMGP Equity Value AM Multiples: Statistic 2018E EBITDA $730 2019E EBITDA $989 2018E DCF(2) $385 2019E DCF(2) $516 Current Yield $1.66 2018E Yield $1.72 AM Statistic 2018E EBITDA $729 2019E EBITDA $851 2018E DCF(2) $384 2019E DCF(2) $451 Current Yield $1.66 2018E Yield $2.04 3,291 3,291 3,291 3,291 3,291 3,291 3,291 13.5x 13.7x 9.9x 10.1x 13.4x 13.8x 10.0x 10.3x 6.1% 5.9% 6.3% 6.1% 13.9x 10.2x 14.1x 10.5x 5.7% 5.9% 13.9x 14.1x 10.2x 10.4x 14.2x 14.5x 10.6x 10.8x 5.7% 5.6% 5.9% 5.8% 14.1x 10.4x 14.6x 10.8x 5.6% 5.8% 14.2x 10.5x 14.8x 11.0x 5.5% 5.7% 13.5x 13.7x 11.5x 11.7x 13.4x 13.8x 11.4x 11.7x 6.1% 5.9% 7.5% 7.3% 13.9x 11.9x 14.2x 12.1x 5.7% 7.1% 13.9x 14.1x 11.9x 12.1x 14.2x 14.6x 12.1x 12.4x 5.7% 5.6% 7.1% 6.9% 14.1x 12.1x 14.6x 12.4x 5.6% 6.9% 14.2x 12.2x 14.8x 12.6x 5.5% 6.7% G F D C B A CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Contribution Analysis | AR Base Case AMGP DCF Contribution Based On Actual Forecasted Taxes (Including on Series B Cash Flow) Contribution Analysis Implied Ownership Implied Exchange Ratio | Series B Adjusted(1,2) AM AMGP 2017A DCF 2017A DCF 2018E DCF 2018E DCF 2019E DCF 2019E DCF 2020E DCF 2020E DCF 2021E DCF 2021E DCF 2022E DCF 2022E DCF 2017A Distributions 2017A Distributions 5.364x 2018E Distributions 2018E Distributions 2019E Distributions 2019E Distributions 2020E Distributions 2020E Distributions 2021E Distributions 2021E Distributions 2022E Distributions 2022E Distributions Source: Management projections. FactSet as of 8/30/2018. Note: AM DCF calculated as LP Interest in EBITDA less interest expense, maintenance capex, and tax withholding reimbursements paid to AR. AMGP DCF calculated as IDR DCF from AM to IDR LLC less G&A and cash taxes plus post-tax Series B payments. Note: AM distributions calculated as distributions attributable to LP unitholders. AMGP distributions defined as distributions attributable to IDR, LLC less taxes paid on full distributions available to IDR, LLC less G&A. Note: Cash tax shield from Series B depreciation of ~$6mm per year. (1)Implied exchange ratios utilize adjusted AMGP share count of fully diluted AMGP shares outstanding + 18.5mm converted Series B units. (2)AM Proposal: 1.710x XR and $3.00 cash consideration / unit. AMGP Proposal: 1.614x XR and $3.415 cash consideration / unit. 27 76.1% 23.9% 70.7% 29.3% 66.7% 33.3% 65.9% 34.1% 65.0% 35.0% 64.6% 35.4% 82.9% 17.1% 75.9% 24.1% 71.5% 28.5% 68.3% 31.7% 66.6% 33.4% 65.3% 34.7% AMGP Proposal: 1.797x AM Proposal: 1.884x 3.193x 2.418x 1.999x 1.930x 1.861x 1.823x 3.158x 2.503x 2.156x 1.996x 1.881x CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Contribution Analysis | AR Downside Volumes Case AMGP DCF Contribution Based On Actual Forecasted Taxes (Including on Series B Cash Flow) Contribution Analysis Implied Ownership Implied Exchange Ratio | Series B Adjusted(1,2) AM AMGP 2017A DCF 2017A DCF 2018E DCF 2018E DCF 2019E DCF 2019E DCF 2020E DCF 2020E DCF 2021E DCF 2021E DCF 2022E DCF 2022E DCF 2017A Distributions 2017A Distrib 5.364x 2018E Distributions 2018E Distributions 2019E Distributions 2019E Distributions 2020E Distributions 2020E Distributions 2021E Distributions 2021E Distributions 2022E Distributions 2022E Distributions Source: Management projections. FactSet as of 8/30/2018. Note: AM DCF calculated as LP Interest in EBITDA less interest expense, maintenance capex, and tax withholding reimbursements paid to AR. AMGP DCF calculated as IDR DCF from AM to IDR LLC less G&A and cash taxes plus post-tax Series B payments. Note: AM distributions calculated as distributions attributable to LP unitholders. AMGP distributions defined as distributions attributable to IDR, LLC less taxes paid on full distributions available to IDR, LLC less G&A. Note: Cash tax shield from Series B depreciation of ~$6mm per year. (1)Implied exchange ratios utilize adjusted AMGP share count of fully diluted AMGP shares outstanding + 18.5mm converted Series B units. (2)AM Proposal: 1.710x XR and $3.00 cash consideration / unit. AMGP Proposal: 1.614x XR and $3.415 cash consideration / unit. 28 76.1% 23.9% 70.8% 29.2% 69.1% 30.9% 66.2% 33.8% 65.7% 34.3% 65.0% 35.0% 82.9% 17.1% 75.9% 24.1% 71.9% 28.1% 69.4% 30.6% 67.9% 32.1% 66.6% 33.4% AMGP Proposal: 1.797x AM Proposal: 1.884x utions 3.193x 2.421x 2.234x 1.959x 1.919x 1.856x 3.158x 2.559x 2.270x 2.115x 1.996x CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Contribution Analysis | AR Base Case AMGP DCF Contribution Based On Theoretical Taxes On All Distributable Cash Flow Contribution Analysis Implied Ownership Implied Exchange Ratio | Series B Adjusted(1,2) AM AMGP 2017A DCF 2017A DCF 2018E DCF 2018E DCF 2019E DCF 2019E DCF 2020E DCF 2020E DCF 2021E DCF 2021E DCF 2022E DCF 2022E DCF 2017A Distributions 2017A Distributions 5.364x 2018 Distributions 2018 Distributions 2019 Distributions 2019 Distributions 2020 Distributions 2020 Distributions 2021 Distributions 2021 Distributions 2022 Distributions 2022 Distributions Source: Management projections. FactSet as of 8/30/2018. Note: AM DCF calculated as LP Interest in EBITDA less interest expense, maintenance capex, and tax withholding reimbursements paid to AR. AMGP DCF calculated as IDR DCF less taxes on total IDR DCF less G&A expenses. AMGP distributions defined as distributions attributable to IDR, LLC less taxes paid on full distributions available to IDR, LLC less G&A. Note: Cash tax shield from Series B depreciation of ~$6mm per year. (1)Implied exchange ratios utilize adjusted AMGP share count of fully diluted AMGP shares outstanding + 18.5mm converted Series B units. (2)AM Proposal: 1.710x XR and $3.00 cash consideration / unit. AMGP Proposal: 1.614x XR and $3.415 cash consideration / unit. 29 78.6% 21.4% 72.7% 27.3% 68.7% 31.3% 67.1% 32.9% 65.9% 34.1% 65.0% 35.0% 82.9% 17.1% 75.9% 24.1% 71.5% 28.5% 68.3% 31.7% 66.6% 33.4% 65.3% 34.7% AMGP Proposal: 1.797x AM Proposal: 1.884x 3.670x 2.659x 2.197x 2.039x 1.934x 1.857x 3.158x 2.503x 2.156x 1.996x 1.881x CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Contribution Analysis | AR Downside Volumes Case AMGP DCF Contribution Based On Theoretical Taxes On All Distributable Cash Flow Contribution Analysis Implied Ownership Implied Exchange Ratio | Series B Adjusted(1,2) AM AMGP 2017A DCF 2017A DCF 2018E DCF 2018E DCF 2019E DCF 2019E DCF 2020E DCF 2020E DCF 2021E DCF 2021E DCF 2022E DCF 2022E DCF 2017A Distributions 2017A Distributions 5.364x 2018 Distributions 2018 Distributions 2019 Distributions 2019 Distributions 2020 Distributions 2020 Distributions 2021 Distributions 2021 Distributions 2022 Distributions 2022 Distributions Source: Management projections. FactSet as of 8/30/2018. Note: AM DCF calculated as LP Interest in EBITDA less interest expense, maintenance capex, and tax withholding reimbursements paid to AR. AMGP DCF calculated as IDR DCF less taxes on total IDR DCF less G&A expenses. AMGP distributions defined as distributions attributable to IDR, LLC less taxes paid on full distributions available to IDR, LLC less G&A. Note: Cash tax shield from Series B depreciation of ~$6mm per year. (1)Implied exchange ratios utilize adjusted AMGP share count of fully diluted AMGP shares outstanding + 18.5mm converted Series B units. (2)AM Proposal: 1.710x XR and $3.00 cash consideration / unit. AMGP Proposal: 1.614x XR and $3.415 cash consideration / unit. 30 78.6% 21.4% 72.7% 27.3% 70.3% 29.7% 67.7% 32.3% 66.8% 33.2% 65.9% 34.1% 82.9% 17.1% 75.9% 24.1% 71.9% 28.1% 69.4% 30.6% 67.9% 32.1% 66.6% 33.4% AMGP Proposal: 1.797x AM Proposal: 1.884x 3.670x 2.661x 2.366x 2.099x 2.016x 1.932x 3.158x 2.559x 2.270x 2.115x 1.996x CONFIDENTIAL DRAFT SUBJECT TO CHANGE
(1) Implied Exchange AM & AMGP Ratios AR Base Volumes Case 8.0% 1.436x 1.795x 8.0% 1.550x 2.189x 1.806x 1.714x 10.0% 1.441x 1.799x 10.0% 1.553x 2.189x 1.629x 1.549x 12.0% 1.446x 1.803x 12.0% 1.556x 2.190x 1.389x 1.324x AR Downside Volumes Case 8.0% 1.600x 1.995x 8.0% 1.657x 2.330x 1.923x 1.831x 10.0% 1.605x 1.999x 10.0% 1.660x 2.331x 1.736x 1.656x 12.0% 1.609x 2.003x 12.0% 1.663x 2.332x 1.481x 1.416x Source: Management projections. FactSet as of 8/30/2018. 31 Note: AM distributable cash flow defined as distributable cash flow attributable to AM LP unitholders. AMGP distributable cash flow defined as HoldCo DCF with pre-tax Series B payments added back in. AMGP share values based on Shares Outstanding including 18.5mm additional shares from Series B conversion. (1)Low AM to high AMGP and high AM to low AMGP implied unit and share prices compared to assess full range of potential exchange ratios. 2.046x 1.842x 1.568x 1.115x 1.118x 1.122x 1.282x 1.287x 1.293x Low Mid High Discount Rate Discount Rate YE 2019 YE 2020 YE 2021 Low MedHigh Low MedHigh Implied XR Implied XR PV of FSP at 10% Discount Rate PV of Future Share Price Discounted Distribution Approach Discounted Levered DCF Approach 1.936x 1.743x 1.483x 1.038x 1.041x 1.044x 1.148x 1.154x 1.159x Low Mid High Discount Rate Discount Rate YE 2019 YE 2020 YE 2021 Low MedHigh Low MedHigh PV of FSP at 10% Discount Rate Implied XR Implied XR PV of Future Share Price Discounted Distribution Approach Discounted Levered DCF Approach AMGP Proposal: 1.797x AM Proposal: 1.884x CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Premiums Paid Analysis | MLP Transactions 6/19/18 Cheniere Energy Partners LP Holdings Cheniere Energy Inc. 5,651 2.2% 10.7% 5/16/18 No (3.5%) 9.4% 3/26/18 Tallgrass Energy Partners, LP Tall Grass Energy GP, LP 8,361 0.6% (18.4%) 2/7/18 Yes 40.3% 21.7% 1/2/18 Archrock Partners, LP Archrock, Inc 2,438 23.4% 23.4% NA Yes 27.1% 5.6% 5/18/17 PennTex Midstream Partners, LP Energy Transfer Partners, LP 963 20.1% 17.8% 10/24/16 Yes 0.6% (4.4%) 4/3/17 World Point Terminals, LP World Point Terminals, Inc. 594 5.8% 5.8% NA Yes N/A (10.1%) 1/27/17 Midcoast Energy Partners, LP Enbridge Energy Company 1,176 (8.6%) (8.6%) NA Yes (19.1%) (14.4%) 10/24/16 JP Energy Partners LP American Midstream Partners 476 9.1% 9.1% NA No (60.9%) (7.5%) 8/1/16 Transocean Partners LLC Transocean Inc. 1,202 20.8% 20.8% NA No 14.3% (8.4%) 11/3/15 Targa Resources Partners LP Targa Resources Corp. 12,229 18.4% 18.4% NA Yes (7.3%) (13.0%) 7/13/15 MarkWest Energy Partners, LP MPLX LP 22,360 36.3% 36.3% NA No (44.8%) (27.4%) 4/6/15 QEP Midstream Partners LP Tesoro Logistics LP 1,145 8.6% (14.0%) 10/18/14 No (7.7%) (32.5%) 6/15/14 Access Midstream Partners LP Williams Partners LP 35,891 1.3% 1.3% NA No (23.1%) (42.2%) 11/12/14 Oiltanking Partners LP Enterprise Products Partners LP 4,289 1.7% (0.9%) 9/30/14 No (21.5%) (41.9%) 8/10/14 El Paso Pipeline Partners Kinder Morgan Inc. 13,677 15.4% 15.4% NA Yes (49.7%) (41.7%) 10/10/13 PVR Partners LP Regency Energy Partners LP 5,659 25.7% 25.7% NA No N/A (33.9%) 5/6/13 Crestwood Midstream Partners LP Inergy Midstream LP 2,643 14.5% 14.5% NA No N/A (35.7%) 2/23/11 Duncan Energy Partners LP Enterprise Products Partners 3,282 28.1% 28.1% NA No 35.5% (22.8%) Source: Company filings, press releases, presentations and FactSet for pricing data. Represents precedent MLP transactions by affiliated and third party MLPs, Public GPs and C-Corps since 2011. Note: Considers transactions where target is an MLP. Implied transaction premium to AM based on adjusted offer XR of 1.714x adjusted to reflect proposed Series B conversion, with AMGP share price calculated as (AMGP equity value + [(AMGP equity value - $2bn) x 6%])/(AMGP fully diluted shares outstanding + 18.5mm). 32 Median 12.0% 13.2% Mean 12.4% 11.5% Taxable Transactions Median 9.2% 11.9% Taxable Transactions Mean 10.3% 9.7% 1/29/13 Copano Energy LLC Kinder Morgan Energy Partners LP 4,858 23.5% 23.5% NA No N/A (32.0%) 8/27/13 PAA Natural Gas Storage LP Plains All American LP 2,531 8.5% 8.5% NA No (47.2%) (34.2%) 7/24/14 QR Energy LP Breitburn Energy Partners 2,856 17.5% 17.5% NA No N/A (44.8%) 8/10/14 Kinder Morgan Energy Partners Kinder Morgan Inc. 52,566 12.0% 12.0% NA Yes (49.7%) (41.7%) 10/13/14 Atlas Pipeline Partners LP Targa Resources Partners LP 6,002 15.0% 15.0% NA No N/A (40.5%) 1/26/15 Regency Energy Partners LP Energy Transfer Partners, LP 18,593 13.2% 13.2% NA No N/A (35.7%) 5/6/15 Crestwood Midstream Partners Crestwood Equity Partners, LP 6,920 17.2% 17.2% NA No (44.3%) (35.7%) 10/26/15 Northern Tier Energy Western Refining, Inc. 5,286 11.7% 11.7% NA Yes N/A (10.3%) 5/30/16 Rose Rock Midstream SemGroup Corp. 2,034 0.0% 0.0% NA Yes (12.2%) (3.7%) 9/26/16 Transcanada Columbia Pipeline Partners LP 3,464 11.1% 9.9% 3/16/16 Yes (7.8%) (7.1%) 11/21/16 Energy Transfer Partners, LP Sunoco Logistics Partners, LP 54,455 (0.2%) (0.2%) NA No (12.2%) (3.9%) 2/1/17 ONEOK Partners, LP ONEOK, Inc 23,654 25.8% 25.8% NA Yes 25.0% (11.9%) 3/2/17 VTTI Energy Partners, LP VTTI, B.V 1,867 6.0% 6.0% NA Yes N/A (12.2%) 8/29/17 Arc Logistics Partners LP Zenith Energy US, LP 736 15.2% 15.2% NA Yes N/A 6.4% 2/7/18 Terra Nitrogen Co. LP Terra Nitrogen GP, Inc. 1,474 3.7% 3.7% NA Yes N/A 3.0% 5/17/18 Williams Partners, LP Williams Companies 57,793 6.4% 16.5% 3/15/18 Yes 16.1% 9.5% Premium A B C D E F G H I J Announcement Date Target Acquiror Transaction Value 1-Day Premium Unaffected 1-Day Premium Unaffected Date Taxable Transaction Acquiror Performance Since Day Prior to Announcement AMZ Performance Since Day Prior to Announcement 8/1/18 Energy Transfer Partners, LP Energy Transfer Equity, L.P. $66,981 11.2% 11.2% NA No (0.5%) 4.2% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
V. Pro Forma Impact for AMGP Proposal 33 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Transaction Assumptions | Pre-Unitholder Tax Transaction Assumptions Sources & Uses At Proposed Transaction Transaction effective on 6/30/2018 To acquire AM, AMGP will convert into a C-Corp in a 100% stock transaction Base case assumes: AMGP Equity Issued(1) $5,880 Purchase AM Units Outstanding $5,245 AM Debt Rolled to AMGP Balance Sheet 1,400 Conversion of Series B Units 320 Each outstanding AM common unit exchanged for 1.614 AMGP shares and $3.415 cash per AM unit, for an all-equity equivalent exchange ratio of 1.797x All existing Series B units exchanged for 18.5mm AMGP shares Revolver Draw 299 Cash Consideration - Affiliated Units 299 Cash Consideration - Non-Affiliated Units 302 Assumes Company provided pf coverage ratio to drive pf dividend policy Step-up depreciation due to (2) Transaction Fees 13 Capex allocated on a 5-20 year MACRs schedule depending on capex category Goodwill based on inside tax basis and 704(c) and 743(b) extrapolation provided by PwC AM Existing Debt 1,400 $650mm refinancing of revolver debt with 5.5% term loan issued on 9/30/2018 New capex financed by $500mm senior unsecured issuance in 2018, 2019, 2020, and 2022 at a 5.000% interest rate AMGP Ownership Comparison at 1.614x XR Series B Conversion At Transaction Proposed At Current AMGP SQ Units Outstanding 186.2 186.2 Implied XR AMGP Common Units Issued 1.614x 303.5 - Existing Public 15.4% Prior AM Public 28.1% Pre-Series B Fully Diluted Post-Transaction Share Count 186.2 489.8 20-Day AMGP VW AP as of 08/30/2018 $18.59 $18.59 Mgmt. 7.3% Sponsors 38.0% Impled Pre-Series Market Cap ($mm) $3,461 $9,103 Existing Public 42.0% Series B 3.6% Series B Valuation Threshold ($mm) Series B Conversion Rate 2018E Series B Cash Flows Illustrative Yield $2,000 6.00% NA NA NA NA NA NA Sponsors 13.9% AR 31.7% Mgmt. 20.0% Impled Post-Series Market Cap ($mm) $3,549 $9,447 % Shares Issued to AM % AMGP Shares Oustanding % Class B Shares Outstanding --97.5% 2.5% 59.7% 36.6% 3.6% Source: FactSet as of 8/30/2018. (1) Includes equity issued for Series B unit conversion into AMGP shares. (2) Provided by Management. 34 3.6% Series B share under AMGP proposal Implied Series B Valuation $88 $344 Post-Series B Fully Diluted Post-Transaction Share Count 190.9 508.3 AMGP Shares Issued for Series B Conversion 4.7 18.5 Pro Forma Status Quo AMGP Proposal Total Sources $7,579 Total Uses $7,579 Sources Uses CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Net Exchange Ratio Detail Gross Cash Consideration Net Cash Consideration Secondary Shares Purchased All-In XR Taxes Payable XR Equity Component Net After-Tax XR Proposal 1.821x $3.415 $2.41 $1.01 1.638x 0.058 1.696x 1.846x $3.415 $2.53 $0.89 1.662x 0.051 1.713x 1.870x $3.415 $2.65 $0.76 1.686x 0.044 1.730x Proposal XR (Exluding Spec ial Distribution) 1.775x Cash Consideration (Exc luding Spec ial Distribution) $3.00 AM GP 20-day VWAP $18.59 Cash Component of XR (0.161x) 35 Source: Management projections and FactSet as of 8/30/2018. Equity Component of XR1.614x Calculation of XR Equity Component AM 1.884x$3.000$2.61$0.391.710x0.0221.732x AMGP 1.797x$3.415$2.29$1.131.614x0.0651.679x G F E D C B A CONFIDENTIAL DRAFT SUBJECT TO CHANGE
All-In XR 1.797x ss Cash Consideration $3. SUBJECT TO CHANGE Taxes Payable ($2.29) At 1.797x Exchange Ratio 1.797 XR At 1.0x AM Coverage 40.0% 1.679x XR 13.7% 12.6% 12.6% 9.4% 9.4% 5.4% 5.4% 27.5% (0.6%) 6 % 23.0% 5.2% 1.1% (0.6%) 20.0% 2.2% (1.8%) (5.4%) 16.2% (10.8%) (1.6%) 2H 2018E 2019E 2020E 2021E (7.2%) $1.08 $2.74 $2.59 $2.89 $3.24 $3.75 2H 2018E $0.96 2019E 2020E $3.18 2021E$3.79 2022$E4.38 $1.07 $3.54 $4.22 2H 2018E 2019E 2020E 2021E 2022E $0.42 $0.60 $1.26 $1.61 $1.60 $1.97 $1.96 $2.35 $2.34 $2.71 Acc / (Dil): Accretion / (Dilution) Analysis at Various XRs Accretion / (Dilution) Analysis at Various XRs 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E 1.797x 1.821x 1.846x 1.870x 1.884x 36 Source: Management projections and FactSet as of 8/30/2018. (1)Pre Unitholder Tax; 1.797x represents implied XR at 1.614x equity XR and cash consideration of $3.415 / unit. Cash assumed to be used to purchase additional secondary shares. (2)Post - Unitholder Tax; 1.679x represents implied XR at 1.614x equity XR; cash used to pay taxes, with any excess cash assumed to be used to purchase additional secondary shares. Exchange Ratio 1.797x (0.6%) 5.4% 9.4% 12.6% 13.7% 1.821x 1.846x 1.870x (0.2%) 5.8% 9.9% 13.1% 14.3% 0.2% 6.3% 10.4% 13.6% 14.8% 0.7% 6.7% 10.9% 14.1% 15.3% 1.884x 0.5% 6.6% 10.7% 14.0% 15.1% 40.0% 27.5% 23.0% 20.0% 16.2% 38.8% 26.4% 21.9% 18.9% 15.2% 37.6% 25.2% 20.9% 17.9% 14.2% 36.4% 24.2% 19.8% 16.8% 13.2% 35.2% 23.1% 18.8% 15.8% 12.2% Exchange Ratio 13.7% .2 2.1% 2022E $4.29 $4.88 $ AM Proposal Status Quo AMGP: Pro Forma AMGP: $0.17$0.35$0.37$0.39$0.38 ($0.12)($0.15)($0.06)$0.04$0.09 Status Quo AM:$1.08 ($0.01) $2.74 $0.15$3.24 $0.31$3.75$0.47 $4.2$90.59 PF AMGP at 1.679x:$1.00 $2.70 $3.31 $3.94 $4.56 PF AMGP at 1.797x:$1.07 $2.89 $3.54 $4.22 $4.88 $ Acc / (Dil):($0.08) ($0.04) $0.07 $0.20 $0.27 $ Acc / (Dil):($0.01) $0.15 $0.30 $0.47 $0.59 Distributable Cash Flow Accretion / (Dilution) Pre Unitholder Tax(1,2) | AM & AMGP | AR Base Case GroCONFIDENTIAL DRAFT 415 Net Cash Consideration $1.13 XR Equity Component 1.614x Sec ondary Shares Purc hased 0.065 AM Accretion / (Dilution) - %AMGP Accretion / (Dilution) - % (1)(2) Net After-Tax XR 1.679x CONFIDENTIAL DRAFT SUBJECT TO CHANGE
All-I 97x CONFIDENTIAL DRAFT SUBJECT TO CHANGE AM Accretion / (Dilution) - % AMGP Accretion / (Dilution) - % (1) (2) 1.679x XR At 1.797x Exchange Ratio 1.797 XR 49.1% 1 64.6% 12.6% 10.3% 9.49%.9% 8.1% 5.4% 1.0% 29.5% 3.1% 2.6% 20.0% (0.60%.)0% 12.9% 2.1% (6.6%) 1.1% (1.8%) (5.4%) 2019E 2019E 2H 2018E 2019E 2020E 2021E 2022E (102.H8%20) 18E 2H 2018E 2020E 2020E 2021E 2021E 2 Pro Forma AMGP at 1.679x: $1.0$80.85 $2.$724.23 $3.$224.92 $3.$735.52 $ $ $ Pro Forma AMGP at 1.797x: $ Acc / (Dil): 0 $0 .96 $2 .59 $3 . 18 $3 . 79 . 38 $1.(0$70.06) .12) $2.$809.02 .15) $3.$504.07 .06) $4.$202.10 .04 .01) .15 0.31 0.47 Accretion / (Dilution) Analysis at Various XRs Accretion / (Dilution) Analysis at Various XRs 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E 1.797x 1.821x 1.846x 1.870x 1.884x 37 Source: Management projections and FactSet as of 8/30/2018. (1)Pre Unitholder Tax; 1.797x represents implied XR at 1.614x equity XR and cash consideration of $3.415 / unit. Cash assumed to be used to purchase additional secondary shares. (2)Post - Unitholder Tax; 1.679x represents implied XR at 1.614x equity XR; cash used to pay taxes, with any excess cash assumed to be used to purchase additional secondary shares. 64.6% 49.1% 29.5% 20.0% 12.9% 63.1% 47.8% 28.3% 18.9% 12.0% 61.7% 46.5% 27.2% 17.9% 11.0% 60.2% 45.2% 26.1% 16.9% 10.0% 58.8% 43.9% 25.0% 15.9% 9.1% Exchange Ratio Exchange Ratio 1.797x 0.0% 8.1% 9.9% 10.3% 10.5% 1.821x 1.846x 1.870x 0.4% 8.6% 10.3% 10.8% 11.0% 0.8% 9.1% 10.8% 11.3% 11.5% 1.2% 9.5% 11.3% 11.8% 12.0% 1.884x 1.1% 9.4% 11.2% 11.6% 11.9% 3.7% 10.5% 3.2% 2022E 022E 4.$249.23 4 4.$808.13 0.09 0.59 AM Proposal Status Quo AM:(1) $0.91 $2.21 $2.85 $3.42 $4.10 (2) $ .91 $2.39 $3.13 $3.77 $4.53 $ Acc / (Dil):($0 $0.00 ($0 $0.18 ($0 $0.28 $0$0.35 $ $0.43 PF AMGP Coverage:($0 1.205x $01.224x $ 1.131x $ 1.119x $ 1.076x Status Quo AMGP:$0.31 $0.89 $1.35 $1.75 $2.23 Pro Forma AMGP:$0.51 $1.33 $1.74 $2.10 $2.52 $ Acc / (Dil):$0.20 $0.44 $0.40 $0.35 $0.29 PF AMGP Coverage: 1.205x 1.224x 1.131x 1.119x 1.076x Distribution Accretion / (Dilution) Pre Unitholder Tax(1,2) | AM & AMGP | AR Base Case n XR 1.7 Gross Cash Consideration $3.415 Taxes Payable ($2.29) Net Cash Consideration $1.13 XR Equity Component 1.614x Sec ondary Shares Purc hased 0.065 Net After-Tax XR 1.679x CONFIDENTIAL DRAFT SUBJECT TO CHANGE
All-In XR 1.797x CONFIDENTIAL DRAFT ss Cash Consideration $3. Taxes Payable ($2.29) 44.7% (1) 1.797 XR (2) 1.679x XR 8.4% 1 7.4% 9.4% 12.6% 32.8% 5.4% 1.6% 24.1% (0.6%) (2.9%) (0 20.6% 2.1% 1.3% 1.1% 0.(31%.8%) (5.4%) (5.1%) 2019E 2019E $2.74 $2.59 (10.8%) (270 2022E $ $ 5.9% 2H 2018E (9.3%) 2H 2018E $1.08 $0.96 2020E 2020E $3.24 $3.18 2021E 2021E $3.75 $3.79 2H 2018E 2019E 2020E 2021E 2022E o Forma AMGP: $0.17 $0.34 $0.35 $0.34 $0.12 $ Acc / (Dil): ($0.03) $0.04 $0.22 $0.28 ($ Accretion / (Dilution) Analysis at Various XRs Accretion / (Dilution) Analysis at Various XRs 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E 1.797x 1.821x 1.846x 1.870x 1.884x 38 Source: Management projections and FactSet as of 8/30/2018. (1)Pre Unitholder Tax; 1.797x represents implied XR at 1.614x equity XR and cash consideration of $3.415 / unit. Cash assumed to be used to purchase additional secondary shares. (2)Post - Unitholder Tax; 1.679x represents implied XR at 1.614x equity XR; cash used to pay taxes, with any excess cash assumed to be used to purchase additional secondary shares. 44.7% 32.8% 24.1% 20.6% 5.9% 43.4% 31.6% 23.1% 19.5% 5.5% 42.1% 30.4% 22.0% 18.5% 5.0% 40.9% 29.3% 21.0% 17.5% 4.8% 39.7% 28.2% 20.0% 16.5% 4.5% Exchange Ratio Exchange Ratio 1.797x (2.9%) 1.6% 7.4% 8.4% (0.6%) 1.821x 1.846x 1.870x (2.5%) 2.1% 7.9% 8.9% 0.4% (2.1%) 2.5% 8.4% 9.4% 1.4% (1.7%) 3.0% 8.9% 9.9% 2.4% 1.884x (1.8%) 2.8% 8.8% 9.8% 2.8% 3.7% .6%) .212%E) 4.29 4.38 0.02) Pr AM Proposal Status Quo AM:$0.38$1.02$1.46$1.67$1.96 $ Acc / (Dil):$0.54$1.36$1.81$2.01$2.08 Status Quo AM:(1) $1.01$1.07 $2.4$02.89 $3.$032.54 $3$.43.322 $$34..7868 PF AMGP at 1.679x(:2) $0.91($0.12) $2.2($80.15) $3(.$003.06) $3$.03.704 $$30..409 PF AMGP at 1.797x:$0.98($0.01) $2.4$40.15 $3.$205.31 $3$.06.147 $$30..7549 $ Acc / (Dil):($0.09) ($0.12) $0.01 $0.04 ($0.27) Distributable Cash Flow Accretion / (Dilution) Pre Unitholder Tax(1,2) | AM & AMGP | AR Downside Volumes Case Gro SUBJECT TO CHANGE 415 Net Cash Consideration $1.13 XR Equity Component 1.614x Sec ondary Shares Purc hased 0.065 AM Accretion / (Dilution) - %AMGP Accretion / (Dilution) - % At 1.797x Exchange RatioAt 1.0x AM Coverage Net After-Tax XR 1.679x CONFIDENTIAL DRAFT SUBJECT TO CHANGE
All-In XR 1.797x CONFIDENTIAL DRAFT ss Cash Consideration $3. Taxes Payable ($2.29) AM Accretion / (Dilution) - % AMGP Accretion / (Dilution) - % (1) (2) 1.679x XR At 1.797x Exchange Ratio 1.797 XR 71.1% 1 11.2% 9.4% 3.9% 12.6% 38.4% 8.7% 33.0% 5.4% 25.6% 1.5% (0.6(3%.)0%) 10.5% (5.8%) (9.4%) 2.1% 1.1% (12.0%) (5.4%) 2019E 2019E (1.8%) 2H 2018E 2019E 2020E 2021E 2022E (102.H8%20) 18E 2H 2018E 2020E 2020E 2021E 2021E 2 (1) $0.86 $2.15 $2.58 $2.97 Status Quo AMGP: Pro Forma AMGP: Pro Forma AMGP at 1.679x: Pro Forma AMGP at 1.797x: $0.9$60.83 $2.$529.02 $3.$128.87 $3.$739.23 $ $ Acc / (Dil): ($0.03) ($0.12) $0.29 $0.26 ($0.12) ($0.15) ($0.06) $0.04 $ 1.205x 1.224x 1.131x 1.119x Accretion / (Dilution) Analysis at Various XRs Accretion / (Dilution) Analysis at Various XRs 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E 1.797x 1.821x 1.846x 1.870x 1.884x 39 Source: Management projections and FactSet as of 8/30/2018. (1)Pre Unitholder Tax; 1.797x represents implied XR at 1.614x equity XR and cash consideration of $3.415 / unit. Cash assumed to be used to purchase additional secondary shares. (2)Post - Unitholder Tax; 1.679x represents implied XR at 1.614x equity XR; cash used to pay taxes, with any excess cash assumed to be used to purchase additional secondary shares. 71.1% 33.0% 38.4% 25.6% 10.5% 69.6% 31.8% 37.2% 24.5% 10.1% 68.0% 30.6% 36.0% 23.4% 9.7% 66.5% 29.5% 34.9% 22.4% 9.3% 65.1% 28.3% 33.8% 21.4% 9.0% Exchange Ratio Exchange Ratio 1.797x (3.0%) (5.8%) 11.2% 8.7% 1.6% 1.821x 1.846x 1.870x (2.6%) (5.4%) 11.8% 9.2% 2.6% (2.2%) (5.0%) 12.3% 9.7% 3.6% (1.8%) (4.6%) 12.8% 10.2% 4.6% 1.884x (2.0%) (4.7%) 12.7% 10.1% 5.0% 3.7% 1.6% (5.1%) 2022E 022E $3.42 4.$338.47 $0.05 0.09 1.076x AM Proposal Status Quo AM: (2$)1.0$80.78 $2.$714.89 $3.$224.68 $3.$735.02 $4.$239.25 $ Acc / (Dil):$1.(0$70.08) $2(.$809.26) $3.$504.10 $4.$202.05 $4(.$808.17) PF AMGP Coverage:($0.01)$0.15$0.31$0.47$0.59 $0.27 $0.85 $1.15 $1.43 $1.75 $0.46 $1.12 $1.60 $1.80 $1.93 $ Acc / (Dil):$0.19 $0.28 $0.44 $0.37 $0.18 PF AMGP Coverage: 1.205x 1.224x 1.131x 1.119x 1.076x Distribution Accretion / (Dilution) Pre Unitholder Tax(1,2) | AM & AMGP | AR Downside Volumes Case Gro SUBJECT TO CHANGE 415 Net Cash Consideration $1.13 XR Equity Component 1.614x Sec ondary Shares Purc hased 0.065 Net After-Tax XR 1.679x CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Growth Comparison at AMGP Pre Unitholder Tax | SQ AM, SQ AMGP, & PF AMGP Proposal AR Base Case AM $2.04 $2.74 $3.24 $3.75 $4.29 16% AM GP @ 1.0x AM Coverage $0.77 $1.26 $1.60 $1.96 $2.34 23% PF AM GP $1.19 $1.61 $1.97 $2.35 $2.71 19% AR Downside Volumes Case AM $2.04 $2.40 $3.02 $3.33 $3.76 16% AM GP @ 1.0x AM Coverage $0.77 $1.02 $1.46 $1.67 $1.96 24% PF AM GP $1.07 $1.36 $1.81 $2.01 $2.08 15% AR Base Case AM $1.72 $2.21 $2.85 $3.42 $4.10 23% AM GP $0.54 $0.89 $1.35 $1.75 $2.23 36% PF AM GP $1.01 $1.33 $1.74 $2.10 $2.52 24% AR Downside Volumes Case AM $1.72 $2.15 $2.58 $2.97 $3.42 17% AM GP $0.54 $0.85 $1.15 $1.43 $1.75 27% PF AM GP $0.93 $1.12 $1.60 $1.80 $1.93 20% Source: Management projections and FactSet as of 8/30/2018. Note: Coverage assumptions as provided by Management. PF AMGP coverage extrapolated based on fixed distributions provided for AR Base Case. SQ AM coverage for AR Base Case extrapolated based on fixed distributions provided for AR Base Case. SQ AM coverage for AR Downside Volumes base extrapolated based on fixed distributions provided for AR Downside Volumes Case. 40 SQ AM M gmt Dist Coverage (Base Case) 1.27x 1.31x 1.16x 1.11x 1.05x SQ AM M gmt Dist Coverage (AR Downside Volumes Case) 1.26x 1.16x 1.21x 1.14x 1.12x PF AM GP M anagement Dividend Coverage 1.20x 1.22x 1.13x 1.12x 1.08x 2018E 2019E 2020E 2021E 2022E 2019E - 2022E CAGR Distributions / Dividends per Unit / Share 2018E 2019E 2020E 2021E 2022E 2019E - 2022E CAGR DCF per Unit / Share CONFIDENTIAL DRAFT SUBJECT TO CHANGE
PF AMGP Selected Public Trading Comparables Midstream C-Corps & High Growth MLPs Dist. Growth DCF (2,3) Unit Price at 8/30/2018 Price (Yield) 2018E to EBITDA (1) Company Equity Value TEV Current 2018E 2020E CAGR 2018E 2019E 2018E 2019E 2018E Kinder Morgan Inc ONEOK, Inc. Plains All American Pipeline GP SemGroup Corporation Targa Resources Corp. The Williams Companies, Inc. $17.78 66.45 26.09 25.80 55.30 29.68 $39,237 27,316 7,387 2,028 12,305 36,062 $75,791 35,654 7,283 4,832 18,547 57,102 4.5% 5.0% 4.6% 7.3% 6.6% 4.6% 4.5% 4.9% 4.6% 7.4% 6.6% 5.3% 25% 10% 10% 5% 1% 6% 9.7x 15.3x 11.9x 10.9x 14.4x 18.1x 8.4x 14.8x 9.3x 8.1x 13.0x 17.2x 10.0x 15.0x 21.4x 12.2x 14.0x 23.0x 9.9x 14.0x 19.7x 10.5x 12.0x 21.6x 2.6x 1.3x 1.8x 1.5x 1.1x 1.3x CNX Midstream Partners LP EQT Midstream Partners LP Hess Midstream Partners LP Noble Midstream Partners LP BP Midstream Partners LP Shell Midstream Partners LP Valero Energy Partners LP $19.85 56.73 23.02 44.58 19.87 22.54 36.40 $1,431 11,958 1,285 1,864 2,221 7,000 3,709 $1,904 14,728 3,313 3,032 2,527 8,939 4,884 6.8% 7.7% 5.8% 4.8% 5.4% 6.5% 6.0% 6.9% 7.8% 6.1% 4.9% 5.6% 6.6% 6.2% 11.5x 10.6x 14.7x 11.8x 14.1x 13.7x 12.4x 8.6x 9.8x 13.3x 10.9x 12.0x 11.7x 11.3x 11.7x 14.7x 13.2x 13.7x 18.1x 14.9x 12.2x 8.2x 10.8x 10.8x 10.4x 11.2x 10.9x 9.7x 1.3x 1.0x 1.1x 2.0x 1.3x 1.1x 1.4x 15% 15% 15% 20% 15% 12% 14% Source: FactSet as of 8/30/2018 and Wall Street research. Note: Assumes AMGP share price of $17.28 for offer / AM Proposal metrics. (1) (2) (3) (4) For C-corps, CAGR calculated using Q4 2017 dividend annualized and 2020E dividend. Calculated as equity value to LP DCF. DCF calculated as EBITDA less interest expense and maintenance capital. Defined as high-growth MLP if current 2020E distribution growth CAGR is greater than 10%. 41 PF AMGP at AMGP Proposal $17.28 $8,726 $10,121 5.7% 5.9% 28% 14.1x 10.5x 13.9x 10.2x 1.2x PF AMGP at AM Proposal $17.28 $8,987 $10,382 5.5% 5.7% 29% 14.8x 11.0x 14.2x 10.5x 1.2x Mean $11,831 $18,349 5.8% 6.0% 13% 13.0x 11.4x 14.9x 12.3x 1.4x Median $7,000 $7,283 5.8% 6.1% 14% 12.4x 11.3x 14.0x 10.8x 1.3x Midstream C-Corp Mean $20,723 $33,201 5.4% 5.5% 10% 13.4x 11.8x 15.9x 14.6x 1.6x Midstream C-Corp Median $19,811 $27,100 4.8% 5.1% 8% 13.2x 11.1x 14.5x 13.0x 1.4x High-Growth MLP Mean $4,210 $5,618 6.1% 6.3% 15% 12.7x 11.1x 14.1x 10.3x 1.3x High-Growth MLP Median $2,221 $3,313 6.0% 6.2% 15% 12.4x 11.3x 13.7x 10.8x 1.3x High - Growth MLPs(4) Non-IDR Midstream C-Corps L Coverage J K Enterprise Value / H I Equity Value / G E F Distribution / Unit / D C B A CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Has / Gets Analysis | AR Base Case AM Pre Unitholder Tax | Valuation Effective Date: 6/30/2018 Discounted Levered DCF Analysis Discounted Levered DCF Analysis 9.0x 10.5x 12.0x 10.0x 12.0x 14.0x 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Distribution Analysis Discounted Distribution Analysis 8.0% 7.0% 6.0% 7.0% 6.0% 5.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Cash Flow | Unlevered FCF(2) | Discounted at WACC 11.0x 13.0x 15.0x 7.0% 8.5% 10.0% Source: Management projections and FactSet as of 8/30/2018. (1) Implied XR at 1.614x equity XR and cash consideration of $3.415 / unit. Cash consideration added to implied share price at 1.614x XR. (2) Unlevered free cash flow defined as PF AMGP EBITDA less cash taxes and capital expenditures. Implied equity value per share backs out implied AM Q2 2018 net debt per share. 42 $43.40 $50.30 $57.21 $41.37 $47.95 $54.53 $39.46 $45.73 $52.00 Discount Rate 2022E Terminal M ultiple $48.94 $55.49 $64.65 $46.28 $52.42 $61.01 $43.82 $49.59 $57.66 Discount Rate $47.23 $52.82 $60.28 $44.52 $49.76 $56.75 $42.02 $46.94 $53.50 Discount Rate 2022E Distribution Yield 2022E Distribution Yield $45.93 $52.62 $59.30 $43.54 $49.81 $56.08 $41.33 $47.22 $53.11 Discount Rate $38.81 $43.72 $48.64 $36.67 $41.27 $45.88 $34.68 $39.01 $43.33 Discount Rate 2022E DCF M ultiple 2022E DCF M ultiple XR Adjusted PF AMGP Implied Share Price |1.797x XR(1) Stand Alone AM Implied Unit Price CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Has / Gets Analysis | AR Downside Volumes Case AM Pre Unitholder Tax | Valuation Effective Date: 6/30/2018 Discounted Levered DCF Analysis Discounted Levered DCF Analysis 9.0x 10.5x 12.0x 10.0x 12.0x 14.0x 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Distribution Analysis Discounted Distribution Analysis 8.0% 7.0% 6.0% 7.0% 6.0% 5.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Cash Flow | Unlevered FCF(2) | Discounted at WACC 11.0x 13.0x 15.0x 7.0% 8.5% 10.0% Source: Management projections and FactSet as of 8/30/2018. (1) Implied XR at 1.614x equity XR and cash consideration of $3.415 / unit. Cash consideration added to implied share price at 1.614x XR. (2) Unlevered free cash flow defined as PF AMGP EBITDA less cash taxes and capital expenditures. Implied equity value per share backs out implied AM Q2 2018 net debt per share. 43 $35.87 $41.17 $46.47 $34.24 $39.29 $44.33 $32.71 $37.52 $42.33 Discount Rate 2022E Terminal M ultiple $39.64 $44.77 $51.96 $37.54 $42.35 $49.09 $35.60 $40.12 $46.45 Discount Rate $40.04 $44.71 $50.92 $37.76 $42.14 $47.97 $35.66 $39.76 $45.24 Discount Rate 2022E Distribution Yield 2022E Distribution Yield $37.02 $42.15 $47.28 $35.15 $39.96 $44.77 $33.43 $37.94 $42.46 Discount Rate $34.30 $38.61 $42.91 $32.41 $36.45 $40.49 $30.66 $34.45 $38.25 Discount Rate 2022E DCF M ultiple 2022E DCF M ultiple XR Adjusted PF AMGP Implied Share Price |1.797x XR(1) Stand Alone AM Implied Unit Price CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Has / Gets Analysis | AR Base Case AMGP Pre Unitholder Tax | Valuation Effective Date: 6/30/2018 Discounted Levered DCF Analysis Discounted Levered DCF Analysis 14.0x 16.0x 18.0x 10.0x 12.0x 14.0x 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Distribution Analysis Discounted Distribution Analysis 7.0% 5.5% 4.0% 7.0% 6.0% 5.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Cash Flow | Unlevered FCF(1) | Discounted at WACC 11.0x 13.0x 15.0x 7.0% 8.5% 10.0% Source: Management projections and FactSet as of 8/30/2018. (1) Unlevered free cash flow defined as PF AMGP EBITDA less cash taxes and capital expenditures. Implied equity value per share backs out implied AM Q2 2018 net debt per share. 44 $24.78 $29.06 $33.34 $23.52 $27.60 $31.68 $22.34 $26.22 $30.11 Discount Rate 2022E Terminal M ultiple $28.21 $32.27 $37.95 $26.56 $30.37 $35.70 $25.04 $28.61 $33.62 Discount Rate $27.54 $34.07 $45.50 $25.92 $32.05 $42.76 $24.43 $30.18 $40.24 Discount Rate 2022E Distribution Yield 2022E Distribution Yield $26.35 $30.49 $34.64 $24.87 $28.75 $32.64 $23.50 $27.15 $30.79 Discount Rate $27.09 $30.44 $33.79 $25.50 $28.64 $31.79 $24.03 $26.98 $29.93 Discount Rate 2022E DCF M ultiple 2022E CAFD M ultiple PF AMGP Implied Share Price Stand Alone AMGP Implied Share Price CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Has / Gets Analysis | AR Downside Volumes Case AMGP Pre Unitholder Tax | Valuation Effective Date: 6/30/2018 Discounted Levered DCF Analysis Discounted Levered DCF Analysis 14.0x 16.0x 18.0x 10.0x 12.0x 14.0x 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Distribution Analysis Discounted Distribution Analysis 7.0% 5.5% 4.0% 7.0% 6.0% 5.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Cash Flow | Unlevered FCF(1) | Discounted at WACC 11.0x 13.0x 15.0x 7.0% 8.5% 10.0% Source: Management projections and FactSet as of 8/30/2018. (1) Unlevered free cash flow defined as PF AMGP EBITDA less cash taxes and capital expenditures. Implied equity value per share backs out implied AM Q2 2018 net debt per share. 45 $20.11 $23.40 $26.68 $19.11 $22.23 $25.36 $18.16 $21.14 $24.12 Discount Rate 2022E Terminal M ultiple $22.45 $25.63 $30.09 $21.15 $24.13 $28.31 $19.95 $22.75 $26.67 Discount Rate $21.86 $26.97 $35.92 $20.58 $25.38 $33.77 $19.40 $23.90 $31.78 Discount Rate 2022E Distribution Yield 2022E Distribution Yield $20.83 $24.00 $27.18 $19.67 $22.65 $25.63 $18.60 $21.40 $24.20 Discount Rate $21.51 $24.13 $26.76 $20.25 $22.71 $25.18 $19.10 $21.41 $23.72 Discount Rate 2022E DCF M ultiple 2022E CAFD M ultiple PF AMGP Implied Share Price Stand Alone AMGP Implied Share Price CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Illustrative Discounted Future Value Pre Unitholder Tax | SQ AM & PF AMGP | AR Base Case & AR Downside Volumes Case PF AMGP | 1.797x XR Adjusted(1) | AR Base Case SQ AM | AR Base Case $52.30 $51.83 $46.08 $39.91 $35.28 2019E SQ AM | AR e Volumes Case $41.88 $34.58 $36.29 $39.27 $35.60 $32.11 2019E 2020E 2021E 2019E 2020E 2021E Source: Management projections and FactSet as of 8/30/2018. Note: Valuation based on annual distributions. (1) Implied XR at 1.614x equity XR and cash consideration of $3.415 / unit. 46 Assumptions Management projections | Valuation date as of 6/30/18 Future share price calculated at FY1 distributions divided by yield Discounted to 6/30/18 at 10% cost of equity Interim distributions discounted upon receipt to 6/30/18 $29.74 8.0% Current AM Unit Price 5.0% 6.0% 7.0% Yield $59.16 $52.36 $45.63 $46.33 $40.58 2020E 2021E $65.33 $58.63 $55.14 $49.29 $43.78 $47.87 $42.63 $37.70 2019E 2020E 2021E Downside Volumes Case $49.98 $45.83 6.0% $39.98 $43.86 7.0% PF AMGP | 1.797x XR Adjusted(1) | AR Downsid $50.35 $50.66 $47.96 $42.36 $42.84 $40.15 $36.66 $37.26 Yield $29.74 5.0% 6.0% 7.0% Yield 6.0% 7.0% 8.0% Current AM Unit Price Yield CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Illustrative Discounted Future Value Pre Unitholder Tax | SQ AMGP & PF AMGP | AR Base Case & AR Downside Volumes Case SQ AMGP | AR Base Case PF AMGP | AR Base Case $44.70 $42.09 $37.33 $37.69 $35.78 $33.45 $32.86 $31.08 $31.55 $28.01 $27.03 $27.59 $22.90 $22.47 $31.27 $18.23 $27.42 $23.82 2019E 2020E 2021E 2019E 2020E 2021E SQ AMGP | AR Downside Volumes Case $35.28 PF AMGP | AR Downside Volumes Case $32.13 $30.15 $32.83 $30.95 $27.99 $26.71 $27.18 $26.48 $25.31 $23.04 $21.45 $19.70 $18.52 $15.69 $24.53 $23.65 $21.85 2019E 2020E 2021E 2019E 2020E 2021E 47 Source: Management projections and FactSet as of 8/30/2018. Note: Valuation based on annual distributions. Assumptions Management projections | Valuation date as of 6/30/18 Future share price calculated at FY1 distributions divided by yield Discounted to 6/30/18 at 10% cost of equity Interim distributions discounted upon receipt to 6/30/18 $17.28 4.0% 5.5% 7.0% Current AMGP Share Price Yield 5.0% 6.0% 7.0% Yield $17.28 5.0% 6.0% 7.0% Yield 4.0% 5.5% 7.0% Current AMGP Share Price Yield CONFIDENTIAL DRAFT SUBJECT TO CHANGE
VI. Pro Forma Trading Analysis 48 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Pro Forma Trading AM Share Price as of 8/30/2018: $29.74 Implied AM Ownership(1) AM 2018E ($1.82) 6.12% PF Mkt Cap Weighted Y ield ($0.95) 5.14% AMGP 2018E ($0.61) 3.54% 6.00% 5.00% 4.00% 59.7% $28.46 $27.90 $33.25 $34.15 $42.69 $48.21 59.8% $28.50 $27.94 $33.30 $34.20 $42.75 $48.28 60.1% $28.90 $28.33 $33.76 $34.68 $43.34 $48.95 60.5% $29.29 $28.72 $34.22 $35.15 $43.94 $49.62 61.0% $29.83 $29.24 $34.85 $35.79 $44.74 $50.53 Source: Company Management, FactSet as of 8/30/2018. Note: 2018E Dividend / Distribution Yields based on Annualized 2H 2018E dividends / distributions. (1) Assumes equity ownership based on exchange ratio net of cash credit. 49 Cash Adj. XR at AM Proposal Current Adj. XR Cash Adj. AMGP Proposal 1.884x 1.850x 1.825x 1.800x 1.797x Exchange Ratio A H Exchange Ratio Adjusted Implied AM Unit Price 2H Annualized 2018E Dividend Y ield G F E D C B CONFIDENTIAL DRAFT SUBJECT TO CHANGE
VII. After-Tax Pro Forma Impact Supplemental Materials for AMGP Proposal 50 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Transaction Tax Implications At AMGP Proposal Average Tax Basis Calculation(1) Average tax basis of $23.27 per unit for public AM unitholders as of YE 2017 Antero Resourc es Antero Resourc es - WaterARC Public Unitholders 90,841,730 8,028,605 94,757,401 $2.01 25.70 23.27 The average public AM unit holder would need to receive cash consideration of $2.29 per unit to avoid having to sell shares post-transaction to pay transaction related taxes Total Active Units 193,627,736 Cash Consideration Required to Avoid Share Selling AMGP Share Price Exchange Ratio Cash Consideration(5) Offer Price $17.28 1.614x $3.00 $30.90 AMGP Share Price Exchange Ratio Cash Consideration(5) Offer Price $17.28 1.614x $3.00 $30.90 AMGP Share Price Exchange Ratio Cash Consideration(5) Offer Price $17.28 1.614x $3.00 $30.90 Detail of Gains (per Unit) Average Ordinary Gain One-Time Dividend / Unit (Orindary Gain) Average Capital Gain Detail of Gains (per Unit) Average Ordinary Gain One-Time Dividend / Unit (Orindary Gain) Average Capital Gain Detail of Gains (per Unit) Average Ordinary Gain One-Time Dividend / Unit (Orindary Gain) Average Capital Gain $3.78 0.415 4.26 $4.83 0.415 5.56 $6.56 0.415 3.83 Average Assumed Passive Activity Loss (2) Tax on Gain (per Unit) Federal Ordinary Income Tax Rate Individual MLP Investor Deduction Rate Adjusted Ordinary Tax Rate ACA Tax Federal Tax Rate Federal Capital Gains Tax Rate Effective State Tax Rate(3) PAL Rate PAL Gain Deduction Average Assumed Passive Activity Loss (2) Tax on Gain (per Unit) Federal Ordinary Income Tax Rate Individual MLP Investor Deduction Rate Adjusted Ordinary Tax Rate ACA Tax Federal Tax Rate Federal Capital Gains Tax Rate Effective State Tax Rate(3) PAL Rate PAL Gain Deduction Assumed Passive Activity Loss (3) Tax on Gain (per Unit) Federal Ordinary Income Tax Rate Individual MLP Investor Deduction Rate Adjusted Ordinary Tax Rate ACA Tax Federal Tax Rate Federal Capital Gains Tax Rate Effective State Tax Rate(3) PAL Rate PAL Gain Deduction ($1.08) ($1.46) ($2.00) 37.0% 20.0% 29.6% 3.8% 33.4% 23.8% 5.2% 37.0% 20.0% 29.6% 3.8% 33.4% 23.8% 5.2% 37.0% 20.0% 29.6% 3.8% 33.4% 23.8% 5.2% 37.0% ($0.40) 37.0% ($0.54) 37.0% ($0.74) Tax on Ordinary Gain Effective Ordinary Gain Tax Rate Tax on Capital Gain Effective Capital Gain Tax Rate State Tax Ordinary Income(4) Effective Ordinary Gain Tax Rate State Tax Capital Gain(4) Effective Capital Gains Tax Rate $0.86 22.8% $1.01 23.8% $0.20 5.2% $0.22 5.2% Tax on Ordinary Gain Effective Ordinary Gain Tax Rate Tax on Capital Gain Effective Capital Gain Tax Rate State Tax Ordinary Income(4) Effective Ordinary Gain Tax Rate State Tax Capital Gain(4) Effective Capital Gains Tax Rate $1.21 25.1% $1.32 23.8% $0.27 5.6% $0.29 5.2% Tax on Ordinary Gain Effective Ordinary Gain Tax Rate Tax on Capital Gain Effective Capital Gain Tax Rate State Tax Ordinary Income(4) Effective Ordinary Gain Tax Rate State Tax Capital Gain(4) Effective Capital Gains Tax Rate $1.59 24.2% $0.91 23.8% $0.36 5.5% $0.20 5.2% Total Payable Effective Tax Rate 27.1% Total Effective Tax Rate 28.7% Total Payable Effective Tax Rate 29.5% Source: FactSet as of 8/30/2018 and Wall Street research. Note: Dividend of $0.415 / share added to ordinary gain. (1) (2) (3) (4) (5) Provided by management. Assumed passive activity loss and tax on ordinary gain for IPO investor utilizes company provided estimates based on a per unit basis range of $19.00-$22.00. Passive activity loss calculated to be $2.00 for an IPO investor. State tax rate determined by using a weighted average of 50 state income tax rates and median federal taxable income brackets for married and single filers. Cash consideration excludes special distribution of $0.415. 51 Total Tax on Gain $3.06 Total Tax on Gain $3.10 Total Tax on Gain $2.29 Total Gain $10.39 Total Gain $10.81 Total Gain $8.46 Average EOY 2017 Tax Basis $20.51 Average EOY 2017 Tax Basis $20.51 Average EOY 2017 Tax Basis $23.27 IPO Investor - IPO Basis(1) For IPO Investor - Average Basis(1) Average Unitholder Average EOY 2017 Basis for Public Unitholders $23.27 Average EOY 2017 Basis for IPO Investors $20.51 Unitholder Active Units EOY 2017 Basis CONFIDENTIAL DRAFT SUBJECT TO CHANGE
After-Tax Distribution For Average Unitholder Calculation Detail for AMGP Proposal $391 $989 $1,222 $1,413 $1,642 EBITDA - Interest Expense EBITDA - Distributions from Unconsolidated Affiliates + Equity in Earnings of Unconsolidated Affiliates - Equity Based Compensation - Interest Expense - Depreciation of Goodwill and Current Assets - Additional Depreciation from Step Up in Basis - Capex Expense for Tangible Assets - Interest Expense Add-back $391 ($27) $27 ($23) (52) (353) (27) (133) 0 $989 ($88) $87 ($48) (126) (676) (179) (164) 0 $1,222 ($141) $119 ($41) (152) (609) (287) (176) 0 $1,413 ($168) $134 ($33) (170) (567) (281) (352) 0 $1,642 ($196) $157 ($35) (135) (554) (204) (352) 46 ($38) ($90) ($114) ($133) ($144) - IDR Distributions ($82) ($237) ($357) ($464) ($592) - Distributions from Unc onsolidated Affiliates ($27) ($88) ($141) ($168) ($196) + Equity in Earnings of Unc onsolidated Affiliates $27 $87 $119 $134 $157 - Equity Based Compensation ($23) ($48) ($41) ($33) ($35) Taxable Income Before NOLs ($196) ($205) ($65) ($23) $360 248 613 687 749 832 Taxable Income Before Tax Depreciation - NOLs applied from previous years $0 $0 $0 $0 ($288) O versubc ription 103% 103% 103% 103% 103% Taxable Income ($196) ($205) ($65) ($23) $72 AMGP Taxable Income + NOL Utilization - Payment of Income Taxes +/-Change in depreciation (MACRS vs ADS SL) + Tangible Asset Capex ($196) - - (8) 133 ($205) - - 32 164 ($65) - - 64 176 ($23) - - 16 352 $72 288 18 (35) 352 255 631 707 771 856 Taxable Income Before Tax Depreciation Tax Deprec iation (253) (588) (642) (648) (644) Net Income 2 42 65 123 213 Current Earnings & Profits Current Dist. from AMGP to Shareholders Qualified Dividend? Return of Capital(1) Qualified Dividend(2) Partial Return of Capital(3) Percentage RoC Percentage QD ($72) 340 RoC 340 - - 100% 0% ($9) 668 RoC 668 - - 100% 0% $175 885 Cum E&P - 175 711 80% 20% $344 1,067 Cum E&P - 344 723 68% 32% $659 1,281 Cum E&P - 659 623 49% 51% AM Shares Outstanding 188.1 188.1 188.1 188.1 188.1 Taxable Income / Unit (Net of PAL) $0.00 $0.00 $0.01 $0.02 $0.04 Average Tax Basis per Unit $23.27 $20.49 $17.50 $13.99 $10.19 Less: Return of Capital per Unit(1) Average EoY Basis per Unit ($2.78) ($2.99) ($3.51) ($3.80) ($4.05) $20.49 $17.50 $13.99 $10.19 $6.14 Income Tax Taxable Income / Unit (Net of PAL) $0.00 $0.00 $0.01 $0.02 $0.04 Tax Basis/Share - Return of Capital $17.28 ($0.67) $16.61 ($1.31) $15.30 ($1.40) $13.90 ($1.42) $12.48 ($1.22) Income Tax Rate 29.6% 29.6% 29.6% 29.6% 29.6% EoY Basis $16.61 $15.30 $13.90 $12.48 $11.25 Qualified Dividend Taxes $0.00 $0.00 $0.08 $0.16 $0.31 Tax / Unit $0.00 ($0.00) ($0.00) ($0.01) ($0.01) Implied Tax Rate -% -% 5% 8% 12% Exchange ratio 1.679x 1.679x 1.679x 1.679x 1.679x After-tax Distribution Dilution to AM Unitholder ($/Unit) After-tax Distribution Dilution to AM Unitholder (%) ($0.06) (6.6%) $0.02 1.0% ($0.06) (2.1%) ($0.16) (4.7%) ($0.37) (9.1%) Source: Management projections and FactSet as of 8/30/2018. Note: 1.614x implied after-tax XR represents a 1.614x equity XR and cash consideration of $3.415 / unit. Cash assumed to be used to eliminate unitholder tax liability. 52 (1) (2) (3) Return of capital per share / unit calculated as the total distributions to holders when Current Earnings & Profits are less than 0. Qualified dividend calculated as equal to the lesser of Current Earnings & Profits or Distributions to Shareholder assuming Current Earnings & Profit is greater than 0. Partial Return of Capital is calculated as the difference between Distributions to Shareholders and Current Earnings & Profit s assuming Qualified Dividends are applicable. PF After Tax AM Dividend XR Adjusted Share $0.85 $2.23 $2.79 $3.25 $3.71 After-Tax PF AMGP Dividend Per Share $0.51 $1.33 $1.66 $1.94 $2.21 After Tax AM Distibution Per LP Unit $0.91 $2.21 $2.85 $3.41 $4.09 Return of Capital Taxes $0.00 $0.00 $0.00 $0.00 $0.00 Before Tax PF AMGP Dividend Per Share $0.51 $1.33 $1.74 $2.10 $2.52 Total Tax per Share $-$- $0.08 $0.16 $0.31 Income Taxes / Unit $0.00 $0.00 $0.00 $0.01 $0.01 Before Tax AM Distibution Per LP Unit $0.91 $2.21 $2.85 $3.42 $4.10 Shares Outstanding 508.3 508.3 508.3 508.3 508.3 PF AMGP After-Tax Calculation 2H 2018E 2019E 2020E 2021E 2022E SQ AM After-Tax Distribution Calculation 2H 2018E 2019E 2020E 2021E 2022E CONFIDENTIAL DRAFT SUBJECT TO CHANGE
After-Tax Distribution Accretion / (Dilution) CONFIDENTIAL DRAFT AM & AMGP | For Average AM Unit Holder at AMGP Proposal | AR Base Case AM Accretion / (Dilution) - % At 1.679x Exchange Ratio AMGP Accretion / (Dilution) - % 95.7% 116.0% 61.9% 45.4% 30.1% 2H 2018E 2019E 2020E 2021E 2022E Pro Forma AMGP: $0.51 $1.33 $1.66 $1.94 $2.21 Accretion / (Dilution) Analysis at Various XRs Accretion / (Dilution) Analysis at Various XRs Cash Consid. / Unit 2H 2018E 2019E 2020E 2021E 2022E 1.679x 1.696x 1.713x 1.730x 1.732x 53 Source: Management projections and FactSet as of 8/30/2018 Note: AMGP accretion / (dilution) based on SQ AM Management Coverage. After-tax distributions is distribution from entity less attributable qualified dividends and gains on capital taxes. Note: 1.679x implied after-tax XR represents a 1.614x equity XR and cash consideration of $3.415 / unit. Cash assumed to be used to eliminate unitholder tax liability. $3.415 $3.415 $3.415 $3.415 $3.000 Exchange Ratio 116.0% 95.7% 61.9% 45.4% 30.1% 114.1% 93.9% 60.7% 44.3% 29.0% 112.1% 92.2% 59.6% 43.2% 27.9% 110.3% 90.5% 58.4% 42.1% 26.9% 108.7% 89.1% 57.3% 41.1% 26.0% Exchange Ratio AMGP Coverage1.205x1.224x1.131x1.119x1.076x PF AMGP Coverage 1.205x 1.224x 1.131x 1.119x 1.076x Status Quo AMGP: $0.23$0.68$1.03$1.33$1.70 Acc / (Dil):$0.27$0.65$0.63$0.60$0.51 Status Quo AM:$0.91 $2.21 $2.85 $3.41 $4.09 Pro Forma AMGP:$0.85 $2.23 $2.79 $3.25 $3.71 $ Acc / (Dil): $ PF 1.0% (6.6%) (2.1%) (4.7%) (9.1%) 2H 2018E 2019E 2020E 2021E 2022E ($0.06) $0.02 ($0.06) ($0.16) ($0.37) AM Proposal Implied After-Tax2H 2018E2019E2020E2021E2022E XR 1.679x(6.6%)1.0%(2.1%)(4.7%)(9.1%) 1.696x(6.5%)1.2%(1.9%)(4.4%)(9.0%) 1.713x(6.4%)1.3%(1.6%)(4.2%)(8.8%) 1.730x(6.3%)1.4%(1.3%)(4.0%)(8.7%) 1.732x(6.9%)0.8%(1.9%)(4.5%)(9.2%) SUBJECT TO CHANGE
After-Tax Distribution Accretion / (Dilution) CONFIDENTIAL DRAFT AM & AMGP | For Average AM Unit Holder at AMGP Proposal | AR Downside Case AM Accretion / (Dilution) - % At 1.679x Exchange Ratio AMGP Accretion / (Dilution) - % 124.6% 74.5% 69.7% 50.1% (9.4%) 30.1% 2H 2018E 2019E 2020E 2021E 2022E Pro Forma AMGP: $0.46 $1.12 $1.49 $1.64 $1.73 Accretion / (Dilution) Analysis at Various XRs Accretion / (Dilution) Analysis at Various XRs Cash Consid. / Unit Implied 2H 2018E 2019E 2020E 2021E 2022E 1.679x 1.696x 1.713x 1.730x 1.732x 54 Source: Management projections and FactSet as of 8/30/2018 Note: AMGP accretion / (dilution) based on SQ AM Management Coverage. After-tax distributions is distribution from entity less attributable qualified dividends and gains on capital taxes. Note: 1.679x implied after-tax XR represents a 1.614x equity XR and cash consideration of $3.415 / unit. Cash assumed to be used to eliminate unitholder tax liability. 124.6% 74.5% 69.7% 50.1% 30.1% 122.5% 72.9% 68.6% 49.0% 29.7% 120.5% 71.4% 67.4% 48.0% 29.3% 118.6% 69.9% 66.3% 46.9% 28.9% 116.9% 68.7% 65.2% 45.9% 28.2% Exchange Ratio $3.415 $3.415 $3.415 $3.415 $3.000 Exchange Ratio AMGP Coverage 1.205x 1.224x 1.131x 1.119x 1.076x PF AMGP Coverage 1.205x 1.224x 1.131x 1.119x 1.076x Status Quo AMGP: $0.21 $0.64 $0.88 $1.09 $1.33 Acc / (Dil):$0.26 $0.48 $0.61 $0.55 $0.40 Status Quo AM:$0.86 $2.14 $2.58 $2.96 $3.41 Pro Forma AMGP:$0.78 $1.89 $2.51 $2.75 $2.91 $ Acc / (Dil): $ PF (2.8%) (7.3%) (14.6%) (12.0%) 2H 2018E 2019E 2020E 2021E 2022E ($0.08) ($0.26) ($0.07) ($0.22) ($0.50) AM Proposal After-Tax 2H 2018E 2019E 2020E 2021E 2022E XR 1.679x (9.4%) (12.0%) (2.8%) (7.3%) (14.6%) 1.696x (9.3%) (11.9%) (2.5%) (7.1%) (14.0%) 1.713x (9.2%) (11.8%) (2.2%) (6.8%) (13.4%) 1.730x (9.1%) (11.7%) (1.9%) (6.5%) (12.7%) 1.732x (9.7%) (12.2%) (2.4%) (7.0%) (13.1%) SUBJECT TO CHANGE
After-Tax Distribution Accretion / (Dilution) For Average AM Unit Holder at AMGP Proposal at 1.0x Coverage for AM & PF AMGP | AR Base Case AM Accretion / (Dilution) - % At 1.679x Exchange Ratio AMGP Accretion / (Dilution) - % At 1.0x AM Coverage 68.7% 88.1% 53.9% 45.6% 33.2% 2H 2018E 2019E 2020E 2021E 2022E Pro Forma AMGP: $0.61 $1.62 $1.88 $2.17 $2.37 Accretion / (Dilution) Analysis at Various XRs Accretion / (Dilution) Analysis at Various XRs Cash Consid. / Unit 2H 2018E 2019E 2020E 2021E 2022E 1.679x 1.696x 1.713x 1.730x 1.732x 55 Source: Management projections and FactSet as of 8/30/2018 Note: After-tax distributions is distribution from entity less attributable qualified dividends and gains on capital taxes. Note: 1.679x implied after-tax XR represents a 1.614x equity XR and cash consideration of $3.415 / unit. Cash assumed to be used to eliminate unitholder tax liability. 88.1%68.7%53.9%45.6%33.2% 86.4%67.2%52.7%44.5%32.1% 84.8%65.7%51.6%43.4%31.0% 83.1%64.2%50.5%42.3%29.9% 81.7%63.0%49.4%41.3%29.0% Exchange Ratio $3.415 $3.415 $3.415 $3.415 $3.000 Exchange Ratio AMGP Coverage1.000x1.000x1.000x1.000x1.000x PF AMGP Coverage 1.000x 1.000x 1.000x 1.000x 1.000x Status Quo AMGP: $0.32$0.96$1.22$1.49$1.78 Acc / (Dil):$0.29$0.66$0.66$0.68$0.59 Status Quo AM:$1.08 $2.73 $3.21 $3.71 $4.23 Pro Forma AMGP:$1.02 $2.72 $3.15 $3.65 $3.98 $ Acc / (Dil): $ PF (4.9%) (0.4%) (1.8%) (1.7%) (6.0%) 2H 2018E 2019E 2020E 2021E 2022E ($0.05) ($0.01) ($0.06) ($0.06) ($0.25) Implied AM Proposal After-Tax 2H 2018E 2019E 2020E 2021E 2022E XR 1.679x (4.9%) (0.4%) (1.8%) (1.7%) (6.0%) 1.696x (4.8%) (0.2%) (1.5%) (1.4%) (5.8%) 1.713x (4.7%) (0.1%) (1.2%) (1.2%) (5.7%) 1.730x (4.6%) (0.0%) (1.0%) (0.9%) (5.5%) 1.732x (5.2%) (0.6%) (1.6%) (1.5%) (6.1%) CONFIDENTIAL DRAFT SUBJECT TO CHANGE
After-Tax Distribution Accretion / (Dilution) For Average AM Unit Holder at AMGP Proposal at 1.0x Coverage for AM & PF AMGP | AR Downside Volumes Case AM Accretion / (Dilution) - % At 1.679x Exchange Ratio AMGP Accretion / (Dilution) - % At 1.0x AM Coverage (4.0%) 75.6% (5.3%) (6.5%) (7.1%) 94.3% 52.7% 44.5% (1 25.2% 2H 2018E 2019E 2020E 2021E 2 2H 2018E 2019E 2020E 2021E 2022E Pro Forma AMGP: $0.56 $1.37 $1.69 $1.84 $1.87 Accretion / (Dilution) Analysis at Various XRs Accretion / (Dilution) Analysis at Various XRs Cash Consid. / Unit Implied After-Tax XR 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E 1.679x 1.696x 1.713x 1.730x 1.732x 56 Source: Management projections and FactSet as of 8/30/2018 Note: After-tax distributions is distribution from entity less attributable qualified dividends and gains on capital taxes. Note: 1.679x implied after-tax XR represents a 1.614x equity XR and cash consideration of $3.415 / unit. Cash assumed to be used to eliminate unitholder tax liability. 94.3%75.6%52.7%44.5%25.2% 92.6%74.0%51.6%43.5%24.9% 90.8%72.5%50.6%42.5%24.5% 89.1%71.0%49.5%41.5%24.1% 87.7%69.7%48.5%40.5%23.4% Exchange Ratio $3.415 1.679x (7.1%) (4.0%) (5.3%) (6.5%) (1 $3.415 1.696x $3.415 1.713x $3.415 1.730x (7.0%) (3.9%) (5.0%) (6.2%) (1 (6.9%) (3.8%) (4.7%) (6.0%) (1 (6.8%) (3.7%) (4.5%) (5.7%) (1 $3.000 1.732x (7.4%) (4.3%) (5.0%) (6.2%) (1 Exchange Ratio 5.2%) 022E AM Proposal 5.2%) 4.6%) 4.0%) 3.4%) 3.7%) PF AMGP Coverage1.000x1.000x1.000x1.000x1.000x PF AMGP Coverage 1.000x 1.000x 1.000x 1.000x 1.000x Status Quo AMGP: $0.29$0.78$1.11$1.27$1.50 $ Acc / (Dil):$0.27$0.59$0.58$0.57$0.38 Status Quo AM:$1.01 $2.40 $3.00 $3.30 $3.71 Pro Forma AMGP: $0.94 $2.30 $2.84 $3.08 $3.15 $ Acc / (Dil):($0.07) ($0.10) ($0.16) ($0.21) ($0.56) CONFIDENTIAL DRAFT SUBJECT TO CHANGE
PF AMGP After Tax Cash Flow 6% Terminal Yield Value | AMGP Proposal | Unadjusted Exchange Ratio At 1.679x Exchange Ratio Tax Basis at YE 2017 Taxes Incurred in Merger (Assumed Paid in 2020) Cash Received from Offer Stepped Up Basis Upon Close $23.27 0.00 0.00 $31.08 XR Adj. PF AMGP BT Dist. per Share % RoC % QD Return of Capital Qualified Dividends Project Tax Liability $0.85 100.0% 0.0% $1.12 $0.00 $0.00 $2.23 100.0% 0.0% $2.21 $0.00 $0.00 $2.92 80.3% 19.7% $2.35 $0.58 ($0.14) $3.52 67.7% 32.3% $2.39 $1.14 ($0.27) $4.23 48.6% 51.4% $2.06 $2.18 ($0.52) Terminal Yield Sale at 12/31/22 - Terminal FV per XR Adj. PF AMGP Share Less: Basis on Conversion Plus: Dividends Treated as Return of Capital 6.00% $70.53 ($31.08) $10.12 Gain on Sale Tax on Gain Tax Rate( 1) 29.0% $49.57 $14.37 Sale at 12/31/22 - Terminal FV per XR Adj. PF AMGP Share Less: Taxes on Gain $70.53 ($14.37) Net Proceeds $56.16 Total Net Cash Flow Total Cash In Flow Total Cash Out Flow - Tax on Dividends Total Cash Out Flow - Taxes in Merger $0.85 $0.85 $2.23 $2.23 $2.65 $2.79 $2.98 $3.25 $3.20 $3.71 $56.16 $70.53 $0.00 $0.00 ($0.14) ($0.27) ($0.52) ($14.37) $0.00 57 Source: Management projections and FactSet as of 8/30/2018. (1) Inclusive of Federal & State capital gains taxes. Discount Factor 0.976 0.909 0.826 0.751 0.683 0.651 Implied Present Value per Share $0.83 $2.03 $2.19 $2.24 $2.18 $36.56 XR Adj. PF AMGP Implied Present Value per Share $46.03 XR Adj. PF AMGP AT Dist. per Share $0.85 $2.23 $2.79 $3.25 $3.71 AM current price of $29.74 Cash consideration used to pay all taxes; any additional cash available assumed to purchase secondary shares 2H 2018E 2019E 2020E 2021E 2022E Terminal CONFIDENTIAL DRAFT SUBJECT TO CHANGE
After-Tax Dividend Distribution Analysis XR Adjusted Implied PV / Unit at Various 2022E Distribution Yield| At Implied AMGP Proposal Coverage $35.02 $38.41 $42.92 $41.38 $46.03 $52.56 $41.51 $46.17 $52.70 $41.64 $46.31 $52.85 $41.77 $46.45 $53.00 $41.60 $46.25 $52.75 Source: Management projections and FactSet as of 8/30/2018. Note: Cash consideration is held constant at $3.41 per AM unit. Note: Tax calculations provided by Management. Ordinary gain tax rate for AM accounts for Federal ordinary income tax rate of 37%, individual MLP investor deduction rate of 20% and 3.8% ACA tax rate. Ordinary gain tax rate for PF AMGP accounts for Federal ordinary income tax rate of 37% and 3.8% ACA tax rate. Note: Assuming 10% discount. 58 1.679x 1.696x 1.713x 1.730x 1.732x Exchange Ratio 7% 6% 5% PF AM GP 2022E Distribution Yield 8% 7% 6% SQ AM 2022E Distribution Yield AM current price of $29.74 Cash consideration used to pay all taxes; any additional cash available assumed to purchase secondary shares CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Certain TPH Relationships Relationship Disclosure TPH Investment Banking & Antero Midstream Partners, Antero Midstream Partners GP and Antero Resources In May 2017, TPH served as co-manager on Antero Midstream GPs $875 million initial public offering In October 2016, TPH served as financial advisor to Antero Resources on its $170 million sale of 17,000 net acres in southwest PA In June 2016, TPH served as a co-manager on Antero Resources $762 million follow-on equity offering In November 2014, TPH served as a co-manager on Antero Midstreams $1 billion initial public offering In May 2014, TPH served as a senior co-manager on Antero Resources $744 million follow-on equity offering In October 2013, TPH acted as senior co-manager on Antero Resources $1.57 billion initial public offering 59 TPH is a full service securities firm engaged in securities trading, brokerage and private equity and investment management activities as well as providing investment banking and other financial services. In the ordinary course of business, TPH and its affiliates, including Perella Weinberg Partners, may acquire, hold or sell, for their own accounts and the accounts of customers, equity, debt and other securities and financial instruments (including bank loans and other obligations) of AM, AMGP, AR, their affiliates, other prospective transaction participants and other companies that may be involved in the transactions, as well as provide investment banking and other financial services to such companies. TPH has in the past and may in the future provide financial advisory services to AM, AMGP, AR and other transaction participants. In addition, TPH, its affiliates and certain of their employees, including members of the team performing this engagement, as well as certain private equity and investment management funds associated or affiliated with TPH in which they may have financial interests, may from time-to-time acquire, hold or make direct or indirect investments in or otherwise finance a wide variety of companies, including the parties, other transaction participants and their respective affiliates. TPH merged with Perella Weinberg Partners (PWP) in November 2016 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Appendix 60 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Contribution Analysis | Status Quo AM & AMGP Supplemental Calculation | AR Base Case AMGP DCF Contribution Based On Actual Forecasted Taxes (Including on Series B Cash Flow) I DR DCF (-) Series B Payment (-) G&A Expenses (-) Cash Taxes (+) Tax Shield from Series B Depreciation $122 (2) (2) (16) --$206 (7) (2) (34) 6 $337 (12) (2) (56) 6 $430 (20) (2) (85) 6 $526 (26) (2) (111) 6 $628 (34) (2) (141) 6 Pre-Series B HoldCo DCF $102 $169 $272 $329 $393 $457 Seres B A djustment Add Back (1 - Tax Rate) of Series B to HoldCo DCF Tax Rate 2 25.3% 5 25.3% 9 25.3% 15 25.3% 19 25.3% 25 25.3% AMGP DCF Contribution Based On Theoretical Taxes On All Distributable Cash Flow I DR DCF (-) G&A Expenses Tax able Cash Flow (-) Cash Taxes (+) Tax Shield from Series B Depreciation $122 (2) $120 (30) --$206 (2) $204 (52) 6 $337 (2) $335 (85) 6 $430 (2) $428 (108) 6 $526 (2) $524 (133) 6 $628 (2) $626 (158) 6 Post-Tax Total IDR DCF $90 $158 $256 $326 $397 $473 Tax Rate 25.3% 25.3% 25.3% 25.3% 25.3% 25.3% 61 Source: Management projections. FactSet as of 8/30/2018. Implied X R 3.670x 2.648x 2.192x 2.035x 1.931x 1.855x AM DCF / LP Unit $1.61 $2.04 $2.74 $3.24 $3.75 $4.29 A MGP Contribution DCF $90 $158 $256 $326 $397 $473 A MGP Shares Outstanding (includes 18.5mm Series B) 204.7 204.7 204.7 204.7 204.7 204.7 DCF / Share $0.44 $0.77 $1.25 $1.59 $1.94 $2.31 2017A 2018E 2019E 2020E 2021E 2022E A MGP Shares Outstanding (includes 18.5mm Series B) 204.7 204.7 204.7 204.7 204.7 204.7 DCF / Share $0.50 $0.85 $1.37 $1.68 $2.02 $2.36 AM DCF / LP Unit $1.61 $2.04 $2.74 $3.24 $3.75 $4.29 Implied X R 3.193x 2.409x 1.994x 1.926x 1.858x 1.820x A MGP Contribution DCF $103 $174 $281 $344 $413 $482 2017A 2018E 2019E 2020E 2021E 2022E CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Contribution Analysis | Status Quo AM & AMGP Supplemental Calculation | AR Downside Volumes Case AMGP DCF Contribution Based On Actual Forecasted Taxes (Including on Series B Cash Flow) I DR DCF (-) Series B Payment (-) G&A Expenses (-) Cash Taxes (+) Tax Shield from Series B Depreciation $122 (2) (2) (16) --$205 (7) (2) (34) 6 $273 (12) (2) (53) 6 $389 (17) (2) (73) 6 $448 (21) (2) (90) 6 $529 (26) (2) (111) 6 Pre-Series B HoldCo DCF $102 $168 $212 $304 $340 $396 Seres B A djustment Add Back (1 - Tax Rate) of Series B to HoldCo DCF Tax Rate 2 25.3% 5 25.3% 9 25.3% 12 25.3% 16 25.3% 19 25.3% AMGP DCF Contribution Based On Theoretical Taxes On All Distributable Cash Flow I DR DCF (-) G&A Expenses Tax able Cash Flow (-) Cash Taxes (+) Tax Shield from Series B Depreciation $122 (2) $120 (30) --$205 (2) $203 (51) 6 $273 (2) $271 (69) 6 $389 (2) $387 (98) 6 $448 (2) $446 (113) 6 $529 (2) $527 (133) 6 Post-Tax Total IDR DCF $90 $158 $209 $295 $339 $399 Tax Rate 25.3% 25.3% 25.3% 25.3% 25.3% 25.3% 62 Source: Management projections. FactSet as of 8/30/2018. Implied X R 3.670x 2.650x 2.359x 2.094x 2.012x 1.928x AM DCF / LP Unit $1.61 $2.04 $2.40 $3.02 $3.33 $3.76 A MGP Contribution DCF $90 $158 $209 $295 $339 $399 A MGP Shares Outstanding (includes 18.5mm Series B) 204.7 204.7 204.7 204.7 204.7 204.7 DCF / Share $0.44 $0.77 $1.02 $1.44 $1.66 $1.95 2017A 2018E 2019E 2020E 2021E 2022E A MGP Shares Outstanding (includes 18.5mm Series B) 204.7 204.7 204.7 204.7 204.7 204.7 DCF / Share $0.50 $0.85 $1.08 $1.55 $1.74 $2.03 AM DCF / LP Unit $1.61 $2.04 $2.40 $3.02 $3.33 $3.76 Implied X R 3.193x 2.412x 2.227x 1.955x 1.915x 1.853x A MGP Contribution DCF $103 $173 $221 $316 $356 $415 2017A 2018E 2019E 2020E 2021E 2022E CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Contribution Analysis | Status Quo Supplemental Calculation | AR Base Case AM & AMGP AMGP Distribution per Share Calculation $70 (2) $144 (2) $237 (2) $357 (2) $464 (2) $592 (2) Total Distributions from LP Less: G&A Less: Taxes on Total Distributions (+) Tax Shield from Series B Depreciation Tax Rate (17) - 25.3% (36) 6 25.3% (59) 6 25.3% (90) 6 25.3% (117) 6 25.3% (150) 6 25.3% Post Tax, Post-G&A Distributions $51 $112 $181 $271 $351 $447 AMGP Shares Outstanding (+ 18.5 Series B Units) 204.7 204.7 204.7 204.7 204.7 204.7 AM Distribution per Unit Calculation Total LP Distributions LP Units $246 185.4 $323 188.1 $416 188.1 $536 188.1 $643 188.1 $771 188.1 63 Source: Management projections. FactSet as of 8/30/2018. Implied X R5.364x3.139x2.495x2.151x1.993x1.878x LP Dist. / Unit$1.33$1.72$2.21$2.85$3.42$4.10 2017A 2018E 2019E 2020E 2021E 2022E A MGP Distribution / Share$0.25$0.55$0.89$1.33$1.72$2.18 Tax able Distributions68142235355462590 2017A 2018E 2019E 2020E 2021E 2022E CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Contribution Analysis | Status Quo Supplemental Calculation | AR Downside Volumes Case AM & AMGP AMGP Distribution per Share Calculation $70 (2) $144 (2) $225 (2) $306 (2) $380 (2) $464 (2) Total Distributions from LP Less: G&A Less: Taxes on Total Distributions (+) Tax Shield from Series B Depreciation Tax Rate (17) - 25.3% (36) 6 25.3% (56) 6 25.3% (77) 6 25.3% (96) 6 25.3% (117) 6 25.3% Post Tax, Post-G&A Distributions $51 $112 $172 $233 $288 $351 AMGP Shares Outstanding (+ 18.5 Series B Units) 204.7 204.7 204.7 204.7 204.7 204.7 AM Distribution per Unit Calculation Total LP Distributions LP Units $246 185.4 $323 188.1 $404 188.1 $485 188.1 $559 188.1 $643 188.1 64 Source: Management projections. FactSet as of 8/30/2018. Implied X R5.364x3.139x2.549x2.263x2.110x1.993x LP Dist. / Unit$1.33$1.72$2.15$2.58$2.97$3.42 2017A 2018E 2019E 2020E 2021E 2022E A MGP Distribution / Share$0.25$0.55$0.84$1.14$1.41$1.72 Tax able Distributions68142223304378462 2017A 2018E 2019E 2020E 2021E 2022E CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Supplemental Calculation Detail | AMGP Proposal Pro Forma AMGP DCF Analyses | Exchange Ratio Adjusted Implied Equity Value | AR Base Case Levered DCF Analysis Supplemental Calculation Detail Discounted Distribution Analysis Supplemental Calculation Detail PF AM GP DCF per Share $0.61 $1.64 $2.00 $2.38 $2.75 PF AM GP Dist. per Share $0.46 $0.89 $1.35 $1.75 $2.23 Disc ount Fac tor PV of PF AM GP DCF per Share 0.976 $0.59 0.909 $1.49 0.826 $1.66 0.751 $1.79 Disc ount Fac tor PV of PF AM GP Dist.per Share 0.976 $0.45 0.909 $0.81 0.826 $1.11 0.751 $1.31 Terminal M ultiple Terminal Disc . Fac tor 12.0x 0.716 Terminal Yield Terminal Disc . Fac tor 6.0% 0.716 65 Source: Management projections and FactSet as of 8/30/2018. Implied Terminal Value per Share $23.65 Implied Equity Value per Share $29.18 XR Adj. AM Equity Value per Share $47.27 Implied Terminal Value per Share $26.64 Implied Equity Value per Share $30.33 XR Adj. AM Equity Value per Share $49.13 Disc . PF AM GP DCF Total $5.53 Disc . PF AM GP Dist. Total $3.69 2H 2018E 2019E 2020E 2021E 2022E 2H 2018E 2019E 2020E 2021E 2022E CONFIDENTIAL DRAFT SUBJECT TO CHANGE
After-Tax Distribution For AMGP Shareholder Supplemental Calculation AM GP Taxable Inc ome (-) Less Inc ome Taxes $79 ($19) $226 ($56) $340 ($85) $440 ($111) $561 ($141) Current Earnings & Profits $59 $170 $255 $330 $420 Current Dist. from AM GP to Shareholders $57 $166 $251 $326 $416 Qualified Dividend QD QD QD QD QD (1) Full Return of Capital Amt (RoC) $0 $0 $0 $0 $0 (2) Qualified Dividend Partial RoC (3) $57 $0 $166 $0 $251 $0 $326 $0 $416 $0 Accumulated E&P Perc entage RoC Perc entage QD 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% 0.0% 100.0% Shares O utstanding 186.2 186.2 186.2 186.2 186.2 Tax Basis / Share (-) Return of Capital $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 EOY Basis $0.00 $0.00 $0.00 $0.00 $0.00 RoC Taxes QD Taxes $0.00 $0.07 $0.00 $0.21 $0.00 $0.32 $0.00 $0.42 $0.00 $0.53 Im plied Tax Rate 23.8% 23.8% 23.8% 23.8% 23.8% Source: Management projections and FactSet as of 8/30/2018. (1) (2) (3) Return of capital per share / unit calculated as the total distributions to holders when Current Earnings & Profits are less than 0. Qualified dividend calculated as equal to the lesser of Current Earnings & Profits or Distributions from AMGP to Shareholders assuming Current Earnings & Profit is greater than 0. Partial Return of Capital is calculated as the difference between Distributions from AMGP to Shareholders and Current Earnings & Profits assuming Qualified Dividends are applicable. 66 ATAX AM GP Dist. Per Share $0.23 $0.68 $1.03 $1.33 $1.70 Total Tax per Share $0.07 $0.21 $0.32 $0.42 $0.53 BTAX AM GP Dist. Per Share $0.31 $0.89 $1.35 $1.75 $2.23 2H 2018E 2019E 2020E 2021E 2022E SQ AM GP After-Tax Distribution Calculation CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AM Wall Street Consensus Research Detail Janney Montgomery Scott 8/2/18 $714 $953 $1,197 - - $586 $797 $1,009 - - Wells Fargo Securities 5/24/18 $706 $936 $1,174 $1,382 $1,564 $576 $756 $937 $1,112 $1,276 Scotia Howard Weil 8/2/18 $724 $891 $1,056 - - - - - - - Ladenburg Thalmann & Co 8/2/18 $708 $931 - - - - - - - - Stifel Nicolaus 8/2/18 $710 $916 - - - $582 $768 - - - MUFG Securities Americas 8/2/18 $733 $952 - - - $598 $792 - - - Raymond James 8/2/18 $705 $925 - - - $585 $770 - - - 67 Source: Thomson One and FactSet as of 8/30/2018. Median $710 $931 $1,174 $1,382 $1,564 $583 $769 $937 $1,112 $1,276 Mean $714 $929 $1,142 $1,382 $1,564 $585 $771 $937 $1,112 $1,276 Report Date DCF 2018E 2019E 2020E 2021E 2022E EBITDA 2018E 2019E 2020E 2021E 2022E CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AM Wall Street Consensus Research Detail Janney Montgomery Scott 8/2/18 $1.71 $2.19 $2.79 - - - - - - - Wells Fargo Securities 5/24/18 $1.70 $2.18 $2.79 $3.13 $3.51 - - - - - Scotia Howard Weil 8/2/18 - - - - - - - - - - Ladenburg Thalmann & Co 8/2/18 - - - - - - - - - - Stifel Nicolaus 8/2/18 $1.72 $2.21 - - - - - - - - MUFG Securities Americas 8/2/18 $1.70 $2.18 - - - $2.08 $2.61 - - - Raymond James 8/2/18 $1.71 $2.19 - - - - - - - - 68 Source: Thomson One and FactSet as of 8/30/2018. Median $1.71 $2.18 $2.79 $3.13 $3.51 $2.08 $2.61 - - - Mean $1.71 $2.19 $2.79 $3.13 $3.51 $2.08 $2.61 - - - Report Date DCF per LP Unit 2018E 2019E 2020E 2021E 2022E Distributions per LP Unit 2018E 2019E 2020E 2021E 2022E CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Precedent Simplification Transactions 8/1/18 5/17/18 3/26/18 1/2/18 2/1/17 11/21/16 10/24/16 9/6/16 5/30/16 11/3/15 10/26/15 7/13/15 5/6/15 4/6/15 1/26/15 6/15/14 10/13/14 8/10/14 8/10/14 7/24/14 10/10/13 8/27/13 5/6/13 1/29/13 2/23/11 Energy Transfer Equity, L.P. Williams Companies Tall Grass Energy GP, LP Arc hroc k, Inc O NEO K, Inc Sunoc o Logistic s Partners, LP Americ an M idstream Partners LP Enbridge, Inc . SemGroup Corp. Targa Resourc es Corp. Western Refining, Inc . M PLX LP Crestwood Equity Partners, LP Tesoro Logistic s LP Energy Transfer Partners, LP Williams Partners LP Targa Resourc es Partners LP Kinder M organ Inc . Kinder M organ Inc . Breitburn Energy Partners Regenc y Energy Partners LP Plains All Americ an LP Inergy M idstream LP Kinder M organ Energy Partners LP Enterprise Produc ts Partners LP Energy Transfer Partners, LP Williams Partners, LP Tallgrass Energy Partners, LP Arc hroc k Partners, LP O NEO K Partners, LP Energy Transfer Partners, LP JP Energy Partners LP Spec tra Energy Rose Roc k M idstream Targa Resourc es Partners LP Northern Tier Energy M arkWest Energy Partners, LP Crestwood M idstream Partners QEP M idstream Partners LP Regenc y Energy Partners LP Ac c ess M idstream Partners LP Atlas Pipeline Partners LP Kinder M organ Energy Partners El Paso Pipeline Partners QR Energy LP PVR Partners LP PAA Natural Gas Storage LP Crestwood M idstream Partners LP Copano Energy LLC Dunc an Energy Partners LP $66,981 $57,793 $8,361 $2,438 $23,654 $54,455 $476 $46,980 $2,034 $12,229 $5,286 $22,360 $6,920 $1,145 $18,593 $35,891 $6,002 $52,566 $13,677 $2,856 $5,659 $2,531 $2,643 $4,858 $3,282 (8.7%) 8.8% 4.6% (11.8%) 2.8% (4.1%) 5.0% (0.8%) 12.9% (7.3%) 2.6% (13.6%) (2.0%) (16.0%) (14.8%) 11.8% (8.1%) (11.3%) (9.1%) 12.5% (0.5%) (5.9%) 5.5% (13.8%) 0.8% 3.6% 12.6% 8.8% 0.5% 7.1% 0.7% 5.0% 2.4% 10.2% (1.8%) 10.1% (10.9%) 3.1% (21.8%) (15.1%) 2.4% (14.2%) (6.7%) (4.8%) 16.3% (4.7%) 4.8% (0.7%) (23.3%) 1.3% 6.0% 14.4% 5.7% 5.7% 10.6% 2.1% --4.1% 7.4% 1.6% 0.0% (10.0%) 6.9% (16.2%) (8.1%) 2.7% (15.9%) (4.8%) 2.7% 34.0% (5.8%) 3.8% (5.6%) (20.3%) (1.5%) 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 35.4% 92.4% 100.0% 100.0% 98.8% 100.0% 96.7% 88.0% 88.0% 80.7% 99.0% 100.0% 96.2% 100.0% 100.0% ---- ---- ---- ---- ---- $17.50 $6.20 ---- $0.32 --$1.26 $10.77 $4.65 $4.29 $0.29 --$1.03 ---- 69 Source: Company filings, Wall Street Research Note: Accretion Dilution represents Target DCF pro forma for Acquirer Exchange Ratio (grossed up for cash consideration where applicable) M edian $6,461 (3.0%) 1.3% 2.4% 100.0% $2.77 M ean $17,897 (3.4%) (0.6%) 0.8% 95.2% $3.60 AMGP ProposalAntero Midstream GP LPAntero Midstream Partners LP$10,121(5.4%)(1.8%)1.1%100.0%--AM ProposalAntero Midstream GP LPAntero Midstream Partners LP$10,382(0.9%)2.5%5.2%100.0%--I Cash Consideration H % Equity Consideration G FY + 3 Ac c retion F FY + 2 Ac c retion E FY + 1 Ac c retion D Transac tion Value C Target B Ac quiror A Announc ement Date CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Selected Energy Precedent Transactions (USD in millions, except per unit (share) data) 4/26/2018 SJW Group California Water Service Group $1,879 20% 29% 2/5/2018 8point3 Energy Partners LP Capital Dynamics AG $2,654 (11%) (17%) 8/29/2017 Arc Logistics Partners LP Zenith Energy US LP $615 15% 13% 7/19/2017 Avista Corp Hydro One Ltd $5,282 24% 20% 1/25/2017 WGL Holdings Inc AltaGas Ltd $6,602 12% 13% 6/3/2016 Talen Energy Corp Riverstone Holdings LLC $5,045 17% 21% 2/1/2016 Questar Corp Dominion Resources Inc $6,088 23% 28% Fairfax Financial Holdings; Management; ACON Investments; Albright Capital Management 10/26/2015 APR Energy plc (66.1246%) $737 (2%) 159% 8/24/2015 AGL Resources Inc Southern Co $12,401 38% 40% Macquarie Group; Manulife Financial; British Columbia Investment Management 10/20/2014 Cleco Corp $4,709 15% 1% 4/30/2014 Pepco Holdings Inc Exelon Corp $12,107 20% 35% 11/19/2013 Coastal Energy Co Compania Espanola de Petroleos SA - CEPSA $2,182 28% 1% 4/8/2013 Lufkin Industries Inc General Electric Co $3,320 38% 30% 12/5/2012 McMoRan Exploration Co Freeport-McMoRan Copper & Gold Inc $2,430 74% 18% 10/17/2011 Brigham Exploration Co Statoil ASA $4,667 20% 19% 8/29/2011 Venoco Inc Private Investor (Timothy M. Marquez) $400 39% (2%) 6/23/2011 Central Vermont Public Service Corp Gas Metro $670 2% 51% 4/15/2011 Bronco Drilling Co Inc Chesapeake Energy Corp $324 6% 14% 8/9/2010 Superior Well Services Inc (92.4%) Nabors Industries Ltd $844 21% 26% 11/1/2009 Encore Acquisition Co Denbury Resources Inc $4,665 35% 36% 7/28/2008 EnergySouth Inc Sempra Energy $731 23% 24% Source: Dealogic as of 8/30/2018. Note: Excludes MLPs and transactions without publicly available premiums data. Based on deals involving U.S. targets with deal value greater than $250MM, target general industry group defined as oil & gas or utilities & energy, announce date since 2008, acquirer final stake > 90% and 100% cash consideration. (1) Niska units were trading at $1.21 / unit for a market capitalization of $50MM at the time of the transaction, net debt of $726MM and LTM EBITDA of ($25.4MM). 70 Median$2,98721%24% Mean4,31029%34% 9/15/2009Parallel Petroleum CorpApollo Global Management LLC$48211%66% 3/3/2010Southwest Water CoJP Morgan Asset Management; Water Asset Management$42756%84% 11/9/2010Atlas Energy IncChevron Corp$4,67237%42% 4/20/2011DPL IncAES Corp$4,6789%15% 7/15/2011Petrohawk Energy CorpBHP Billiton Ltd$15,10865%62% 9/12/2011Global Industries LtdTechnip SA$1,07355%129% 12/21/2011WCA Waste CorpMacquarie Infrastructure Partners II$53330%62% 1/7/2013EnergySolutions IncEnergy Capital Partners LLC$95721%34% 5/29/2013NV Energy IncBerkshire Hathaway Inc$10,42320%11% 12/11/2013UNS Energy CorpFortis Inc$4,34730%22% 9/29/2014Athlon Energy IncEnCana Corp$6,83425%26% 6/14/2015Niska Gas Storage Partners LLC(1)Brookfield Infrastructure Partners LP$985223%111% 9/4/2015TECO Energy IncEmera Inc$10,39131%27% 10/26/2015Piedmont Natural Gas Co IncDuke Energy Corp$6,57942%53% 2/9/2016Empire District Electric CoAlgonquin Power & Utilities Corp$2,37121%23% 8/22/2016CST Brands IncAlimentation Couche-Tard Inc$4,4092%7% 2/21/2017Delta Natural Gas Co IncPNG Companies LLC$26017%14% 8/18/2017Calpine CorpEnergy Capital Partners; Access Industries ; CPPIB$17,38913%8% 12/12/2017Fairmount Santrol Holdings IncSCR Sibelco NV$1,91814%23% 4/23/2018Vectren CorpCenterPoint Energy Inc$8,09410%15% Announcement Transaction Premium Date Target Acquiror Value ($MM) 1-Day 1-Month 5/23/2018Babcock & Wilcox Enterprises IncSteel Partners Holdings LP$72315%21% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AR Historical and Projected Taxes Assumptions AR Federal & State NOL Carryforwards NOL Other DTL Net DTL ~$3.0 billion of U.S. federal NOLs that expire at various dates from 2024 through 2037 $772 $45 Significant increase in NOLs due to expensing of IDCs in 2017 ahead of 80% utilization limitation imposed by 2017 JOBS tax reform ~$2.3 billion of state NOLs that expire at various dates from 2024 through 2037 Tax shields eliminate cash taxes entirely through 2021 ($1,911) 2015A 2013A 2014A 2016A 2017A Historical AR Tax Assets & Liabilities NOL Valuation Sensitivity(1) Federal State 2018 2023 2028 2033 2038 0% 5% 10% 15% 20% 2013A 2014A 2015A 2016A 2017A 71 Source: Management Projections, Company Filings. (1) NOL carryforward allocated straight line over utilization period. $1,000 $1,300 $1,100 $1,000 $1,400 $1,200 $1,500 $1,400 $3,000 $2,300 Discount Rate $728$728$728$728$728 $728$570$447$350$274 $728$452$280$174$108 $728$362$180$89$44 $728$292$117$47$19 Utilization Period $440 $439 $540 $529 $728 $522 $19 $495 $33 $450 ($10) $432 $7 ($348) ($795) ($1,371) ($950) ($780) ($787) ($1,234) ($1,479) ($1,552) CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Financial Projections 72 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Management Projections: AR Base Volumes Case AR ($ in millions, unless otherwise noted) Production Volumes (MMcfe/d) EBITDAX(1) Gas NGLs (excl. Ethane) Ethane Oil EBITDAX (Excl. Hedges) Income from Hedges LP Distributions from AM $2,728 5,194 105 8 $405 87 05 342 $338 $219 $282 2,253 $170 $585 261 56 1,847 261 40 $1,4$016,250 $1,250$464 173 $112 31 173 $135 $2 6 2016 2017 2018 2019 2020 2021 2022 2016A 2017A 2018E 2019E 2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Capital Expenditures Free Cash Flow(2) Free Cash Flow Cumulative FCF DrillingLeasehold Acquisition & Maintenance Acquisitions $2,112 $2,216 12 $1,615 $1,684 $1$,18,56460 ,660 $1,102 $519 9 $792 589 2016 2017 2018 20192020 2021 2022 2018A 2019A 2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management projections, Company Filings. (1) AM fully consolidated in SEC financial statement. (2) Free cash flow net of land maintenance capital. 73 $19 $500 $513 $273 $310 $588 $2,216 $1,854 $1,780 $1,850 ,1 $105$2 0 $2,00$72 $163 1,85 $1,780 $ $103 $1,747$ $163 $1 $1, 684$81 $1,699 $588 $238 $164 $149 $95 ,$51,1589 $238 1$,14,55211 $1,464 $164 $$11,,446542 Cumulative Free Cash Flow 2018E-2022E Base Case $1,615 Downside Pric ing Case $184 Downside Case $909 $2,305 $2, 72 $2,086$2,100 $2 $338 0 ,305 $35 $4 $ $2,288 $1,774 $1,7 $ $219 2,08 6$ $282 2,10 $37 $1,93$01 74 $224 $1,406 $170 $1,594$ 3 $112 4$01,283$ $1,003 $135 $1,140 $214 03 $901 $290 4,545 4,545 5,194 471 1 05 471 974 33,,994455 402 402 87 834 3,33,33030 342 7700 3,644 3,644 2022 771122 2,702 2,70256 282686 5599 3,222 3,222 2021 603 603 2,822 2,822 2020 1,8472,253 2,382 2,382 2019 465 105 40 7 419 1,92 1,920 2018 332 31 105 1,6 1,620 201 1,3 1,379 201 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Management Projections: AR Downside Pricing at Base Volumes Case AR ($ in millions, unless otherwise noted) Production Volumes (MMcfe/d) EBITDAX(1) GasNGLs (excl. Ethane) Ethane Oil EBITDAX (Excl. Hedges) Income from Hedges LP Distributions from AM 5,194 5,194 105 4,545 87 $2,728 $2,263 $405 402 7700 6 $2,100 $ $1,7 $219 $282 $170 261 56 261 40 $1,4$016,250 $1,250$464 173 1,847 40 $112 31 $135 31 $1,141 6 2016 2017 2018 2019 2020 2021 2022 2016A 2017A 2018E 2019E 2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Capital Expenditures Free Cash Flow(2) Free Cash Flow (Net of Land Maintenance Capex) Cumulative FCF DrillingLeasehold Acquisition & Maintenance Acquisitions $2,112 $2,216 12 $1,684 $1$,18,56460 ,660 9 $317 589 $182 $184 ($20) 2020E 2 2 2018A 2019A 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management projections, Company Filings. (1) AM fully consolidated in SEC financial statement. (2) Free cash flow net of land maintenance capital. 74 $19 $298 $297 ($115) $588 $2,216 $1,854 $1,780 $1,850 ,1 02 $105$2 0 $2,00$72 $163 1,85 2021 $1,780 202 $ $103 $1,747$ 0 $163 $1 2 $1, 20 684$81 $1,699 19 $588 $238 $164 $149 $95 ,$51,1589 018 $238 1$,14,55211 2017 $1,464 $164 $$11,,446542 2016 Cumulative Free Cash Flow 2018E-2022E Base Case $1,615 Downside Pric ing Case $184 Downside Case $909 $2,305 $1,886$2,08 $1,811$1,889 $1,774$338 $405 74$219 $338 $1,406 $170 $282 $155 $2 $1,703 $851 $388 $128 $1 $1,422 $112 $1,003 $135 $1,140 $ 3 $214 03 $901 40$ $817 $291 4,545 471 1 05 471 974 33,,994455 402 87 834 3,33,33030 334422 3,644 3,644 2022 771122 2,702 2,2532,70256 282686 5599 3,222 3,222 2021 603 603 2,822 2,822 2020 1,8472,253 2,382 2,382 2019 465 105 173 7 419 1,92 1,920 2018 332 105 1,6 1,620 201 1,3 1,379 201 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Management Projections: AR Downside Volumes Case AR ($ in millions, unless otherwise noted) Production Volumes (MMcfe/d) EBITDAX(1) Gas NGLs (excl. Ethane) Ethane Oil EBITDAX (Excl. Hedges)Income from HedgesLP Distributions from AM 5,194 4,505105 4,545 471 $2,728 89 $405 $2,305 $2,086 $2,100 $1,774 $1,786 $338 712 $1,77$41,669 $219 $282 $1,537 $1,520 2,253 $170 $201 261 56 1,847 261 40 $1,4$016,252 $1,250$464 173 $112 31 173 $135 $2 31 $1 3 6 2016 2017 2018 2019 2020 2021 2022 2016A 2017A 2018E 2019E 2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Capital Expenditures Free Cash Flow(2) Free Cash Flow (Net of Land Maintenance Capex) Cumulative FCF DrillingLeasehold Acquisition & Maintenance Acquisitions $2,216 12 $588 $909 $769 $608 $47 2016 2017 201820192020 2021 2022 2018A 2019A 2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management projections, Company Filings. (1) AM fully consolidated in SEC financial statement. (2) Free cash flow net of land maintenance capital. 75 $20 $589 $655 $588 $2,216 $1,854 $2,1 $163 $1$,18,56460 $1,850 $1,780 $238 $164 $1$61349 $1,660$1,6$814,443 $1,494 $238 1$,14,55211 $1,464 $164 $$11,,446542 $1,251 $1,179 $81 589 $1,362 $105 $2 $1,388 $103 9$ $1,148 $95 ,511 $1,084 Cumulative Free Cash Flow 2018E-2022E Base Case $1,615 Downside Pric ing Case $184 Downside Case $909 $1,406 $170 $326 $244 $285 $851 $ $112 $388 $155 $1,305 $1,003 $135 $1,140 $128 $1,107 $214 $ $905 03 $902 $616 $291 4,046 3,945402 87 452 3,605 3,330342 70 392 82 876 3,121 2,702286 59 331 58 834 756 648 2,70256 259 47 3,644 3,087 2022 3,222 2,816 2021 534 1,8472,253 2,822 2,568 2020 465 105 40 7 2,382 2,281 2019 419 1,92 1,920 2018 332 105 1,6 1,620 201 1,3 1,379 201 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Management Projections: AR Base Volumes Case AM ($ in millions, unless otherwise noted) Operations & EBITDA Low Pressure (Bcf/d) | Water Handling (MBbls/d) Capital Expenditures Gathering & Compression Water Handling Earn-out payment Stonewall MPLX JV Low Pressure Water Delivery Produced Water EBITDA $1,292 $491 $1,460 $925 $1,642 $1,081 $1,642 $1,413 $176 $1,413 $1,222 $1,222 $989 $989 $730 $730 7 $529 $404 $529 6 404 $81 5 $14 4 4 $220 6A 4 3.1 2.7 2018E 2019E 2020E 2.0121E 2022E 2016A 2017A 2016A 2017A 2018E 2019E 2020E 2021E 2022E 0.8 1.1 1.2 1.5 DCF20a17nA d Distrib20u18tEions per20U19nE it 2022E Distribution Breakdown 016A 2020E 2021E2018E 2022E CAGR LP DCF per Unit LP Distributions per Unit AM LPs AMGP (IDRs) Series B Uni ts $4.29 $3.75 $4.29 $3.24 $3.75 -% 1% 1% 2% 2% 2% 2% $2.74 $4.10 % $2.04 $3.42 $3.24 $4.10 $1.61 $1.49 $2.85 $3.42 $2.76 $2.21 $1.72 $1.$323.07 $1.03 $2.85 $1.61 $1.49 2016A 2017A 2018$E2.21 2019E 2020E 2021E 2022E Growth (1) $1.33 1.76x 1.33x 1.27x1.31x 1.16x 1.11x 1.05x Rat$io1(2.) 03 16A 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management Projections, Company Filings. Note: Operational volumes based on annual average volumes. (1) YoY growth of LP DCF per unit and LP distributions per unit respectively. (2) Coverage ratio calculated as total DCF over total distributions. 76 YoY8%/2$91%.72 27%/29%34%/29%18%/29%16%/20%14%/20% Coverage Total LP DCF$353$299$385$516$609$705$807 Tota2l0L1P6A 2017A 2018E 2019E 2020E 2021E 2022E Distributions$269$246$323$416$536$643$771 8% - % 1 22% 7A 1% 29% 30% E 2% 34% 36% 2% 38% 39% 2% 40% 41% 2 2% 41% 42% 92% 20 78% 201 68% 69% 2018 63% 64% 2019E 59% 60% 2020E 57% 58% 2021E 55% 57% 022E 20% 24% 6 261 6.9 243 220 205 5. 178 4.7 1 154 4. 124 3.5 107 94 2.8 1 2.2 73 1.7 52 1.4 40 41 29 $266 7 $491 $214 $266 $164 $815 $1,108 $2 $6$41265 $125 $164 $86 $719 $169 $176 $684 $9$2430 $611 $124 $2 $44 $214 $125 $125 $110 $186 $349 $75 $169 $352 $416 2019E $3$2926 2 $188 .4 $381 2018E $349 2017A 20 $92 $322 2020E 22$E229 $222801 02$12E20 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Management Projections: AR Downside Volumes Case AM ($ in millions, unless otherwise noted) Operations & EBITDA Low Pressure (Bcf/d) | Water Handling (MBbls/d) Capital Expenditures Gathering & Compression Water Handling Earn-out payment Stonewall Wastewater MPLX JV Low Pressure Water Delivery Produced Water EBITDA $925 $925 $815 $1,642 $1,413 $719 $1,409 $1,222 $1,105 $1,229 $989 $851 $2 $729 $214 $730 7 $529 $404 $529 6 404 6 5 $14 4 E E 2021E $1942022E $19 2.2 4 3.1 2.7 2016A 2017A 2018E 2019E 2020E 2.0121E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E 0.8 1.1 1.2 1.5 DCF20a17nA d Distrib20u18tEions per20U19nE it 2022E Distribution Breakdown 016A 2020E 2021E2018E 2022E CAGR LP DCF per Unit LP Distributions per Unit AM LPs AMGP (IDRs) Series B Uni ts $4.29 $3.76 $3.33 -% 1% 1% 2% $3.02 $3.75 2% 2% 2% $2.40 $3.24 % $2.04 $2.97$4.10 $3.42 $1.61 $1.49 $2.58 $3.42 $2.76 $2.15 $1.72 $1.$323.07 $1.03 $2.85 $1.61 $1.49 2016A 2017A 2018$E2.21 2019E 2020E 2021E 2022E 64% Growth (1) $1.33 1.76x 1.33x 1.26x1.16x 1.21x 1.14x 1.12x Rat$io1(2.) 03 16A 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management Projections, Company Filings. Note: Operational volumes based on annual average volumes. (1) YoY growth of LP DCF per unit and LP distributions per unit respectively. (2) Coverage ratio calculated as total DCF over total distributions. 77 YoY8%/2$91%.72 27%/29%18%/25%26%/20%10%/15%13%/15% Coverage Total LP DCF$353$299$384$452$568$627$708 Tota2l0L1P6A 2017A 2018E 2019E 2020E 2021E 2022E Distributions$269$246$323$404$485$559$643 8% - % 1 22% 7A 1% 29% 30% E 2% 34% 36% 2% 37% 39% 2% 38% 41% 2 2% 40% 42% 92% 20 78% 201 68% 69% 2018 63% 2019E 59% 61% 2020E 57% 60% 2021E 55% 58% 022E 16% 19% 62.192 4 178 189 172 154 154.4 3.8 1 124 3. 3.1 96 87 2.6 1 68 1.7 49 1.4 40 41 29 $491 0.00 7 $124 $491 $266 $266 $186 $646 $164 $14 $125 $176 $646 $125 $430 $124 $2 $214 $381 $169 $488 $506 $352 $349 $186 $75 $168 $178 $272 $188 .42016A 2018E $381 2017A $349 $682020 $926019 $260 $85 $228 $224 $168 $147 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Management Projections: AR Base Volumes Case AMGP ($ in millions, unless otherwise noted) IDR LLC, Series B Cash Flow, and Tax Observations AMGP Total Distributions 18 22 CAGR IDR LLC owns the 100% of the IDRs in AM and has two share classes SQ AM Distribution Policy SQ AM Fully Distributed $441$440 $36$9369 AMGP owns 100% of the Series A units Management owns 100% of the Series B units $415$416 $302 $302 Series B unitholders are entitled to receive up to 6% of the distributions from AM in excess of $7.5MM per quarter $237 $236 $326 $326 Remaining profits pass through AMGP via Series A shares $250 $251 $144 $144 Series B units scheduled to vest at a value of 6% of equity value above $2 billion in the event of a liquidation of IDR LLC AMGP currently pays corporate taxes of 21% and 4% at the federal and state taxes, respectively $86 $166 $52 $86 $101 $166 $48 $52$10 2016A $101 2017A2018E $48 2019E 2020E 2021E 2022E $10 2016A 2017A 2018E 2019E 2020E 2021E 2022E IDR LLC Cash Flow AMGP & Series B Unit Valuation(1,2,5) $592 Distributions to AMGP Taxes G&A Series B Reserved CF 2016A 2017A 2018E 2019E 2020E 2021E 2022E AM Distributions to IDR LLC $17 $70 $144 $237 $357 $464 $592 Series B Take --(2) (7) (12) (20) (26) (34) Cash Distributions to AMGP $17 $67 $137 $224 $338 $438 $559 G&A(3) (1) (1) (2) (2) (2) (2) (2) $85 Taxes (7) (7) (34) (56) (85) (111) (141) $2 CAFD to AMGP Shareholders $10 $59 $101 $166 $251 $326 $416 Illustrative Yield 3.3% 3.3% 3.3% 3.3% 3.3% 3.8% 5.0% $34$34 $11 $2 $1$00101 $$6 $ 2016A 2017A 2018E2019E2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management Projections, Company Filings. (1) (2) (3) (4) (5) Implied AMGP and Series B valuation from 2016A through 2020E based on 2018E yield. Implied AMGP and Series B valuation from 2021E forward based on yield vs growth regression analysis derived on slide 18. Excludes IPO related G&A. Series B valuation calculated as 6% of the valuation of AMGP less $2 billion. Illustrative yield based on regression analysis as presented on page 91. 78 AMGP Valuation $290 $1,788 $3,049 $5,029 $7,588 $8,532 $8,344 Series B Valuation(4) N/A N/A $63 $182 $335 $392 $381 $17 $ $2 $2 $464 $34 $141 $2 $357 $2 $111 $416 $2 $237 $2 $326 $251 $2 $144 $56 $166 $69 $2 $ 2 $1100 $4$848 32% 43% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Management Projections: AR Downside Volumes Case AMGP ($ in millions, unless otherwise noted) IDR LLC, Series B Cash Flow, and Tax Observations AMGP Total Distributions IDR LLC owns the 100% of the IDRs in AM and has two share classes SQ AM Distribution Policy SQ AM Fully Distributed $441 AMGP owns 100% of the Series A units Management owns 100% of the Series B units 18 22 CAGR $369 $371 $415 $302 Series B unitholders are entitled to receive up to 6% of the distributions from AM in excess of $7.5MM per quarter $314 $326 $237 $273 $326 Remaining profits pass through AMGP via Series A shares $250 $144 $192 $166 $266 Series B units scheduled to vest at a value of 6% of equity value above $2 billion in the event of a liquidation of IDR LLC AMGP currently pays corporate taxes of 21% and 4% at the federal and state taxes, respectively $86 $144 $101 $52 $215 $86 $48 $157 2019E $10 $52 2016A $10 2017A $48 $1200118E 2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E IDR LLC Cash Flow AMGP & Series B Unit Valuation(1,2,5) Distributions to AMGP Taxes G&A Series B Reserved CF 2016A 2017A 2018E 2019E 2020E 2021E 2022E $2 AM Distributions to IDR LLC $17 $70 $144 $225 $306 $380 $464 $464 $2 Series B Take --(2) (7) (12) (17) (21) (26) Cash Distributions to AMGP $17 $67 $137 $213 $290 $359 $438 (3) (1) (1) (2) (2) (2) (2) (2) G&A Taxes (7) (7) (34) (53) (73) (90) (111) $2 $2 CAFD to AMGP Shareholders $10 $59 $101 $157 $215 $266 $326 $53 Illustrative Yield 3.3% 3.3% 3.3% 3.3% 3.3% 4.8% 5.7% $34 165 $1 $2 $1 $17 $$66 $$1100 2016A 2017A 2018E 2019E2020E2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management Projections, Company Filings. (1) (2) (3) (4) (5) Implied AMGP and Series B valuation from 2016A through 2020E based on 2018E yield. Implied AMGP and Series B valuation from 2021E forward based on yield vs growth regression analysis derived on slide 18. Excludes IPO related G&A. Series B Valuation calculated as 6% of the valuation of AMGP less $2 billion. Illustrative yield based on regression analysis as presented on page 91. 79 AMGP Valuation $290 $1,788 $3,049 $4,769 $6,508 $5,512 $5,725 Series B Valuation(4) N/A N/A $63 $166 $270 $211 $224 $38$02 $2 $111 $306 $2$2 $90 $326 $225 $73 $266 $144 $56 $215 $157 $2 $69 $34 $2 $ $1$01001 $$4488 34% 27% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AM Status Quo AR Base Volumes Case, AR Downside Volumes Case, and Wall Street Consensus ($ in millions, unless otherwise noted) Wall Street Consensus Mgmt. Projections at AR Base Case Mgmt. Projections at AR Downside Productio n Case 2019E 2022E CAGR Commentary EBITDA $4.29 $1,642 AM is covered by 14 analysts as compared to 22 for AR and 11 for AMGP $3.81 $1,413 $1,382 $1,564 $3.42 $1,222 $1,409 Median price target of $38.00 as of 8/30/2018 $1,174 $1,229 $989 $931 $1,105 $730 $714 $729 Average price target range of $35.00 - $41.00 as of 8/30/2018 $851 $529 2017A 2018E 2019E 2020E 2021E 2022E 2019E 2022E CAGR 2019E 2022E CAGR Distributable Cash Flow / LP Unit Distributions per Unit 1E $4.29 $4.10 $3.51 $3.42 $3.75 $3.76 16% $3.13 $2.85 $3.42 $3.33 $2.97 $3.2147 $2.21 $2.20 $2.82 $2.58 $2.65 $1.72 $1.72 $2.74 $2.15 $3.02 $1.71 $2.19 $2.04 $2.40 $0.47 $1.61 $2.04 2017A 2018E 2019E 2020E 2021E 2022E 2017A 2018E 2019E 2020E 2021E 2022E 80 Source: Management Projections, Thomson One, FactSet as of 8/30/2018. 23% 17% 17% 16% 6% 18% 19% 18% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AMGP Status Quo AR Base Volumes Case, AR Downside Volumes Case, and Wall Street Consensus ($ in millions, unless otherwise noted) Wall Street Consensus Mgmt. Projections at AR Base Case Mgmt. Projections at AR Downside Productio n Case 2019E 2022E CAGR Commentary EBITDA $4.29 $559 AMGP is covered by 11 analysts as compared to 22 for AR and 14 for AM $3.81 $438 $3.42 $438 Median price target of $26.00 as of 8/30/2018 $338 $359 $290 $224 Average price target range of $23.00 - $27.00 as of 8/30/2018 $337 $137 $133 $213 $221 $137 $59 2017A 2018E 2019E 2020E 2021E 2022E 2019E 2022E CAGR 2019E 2022E CAGR Total Distributions to AMGP Shareholders Distributions per Share 1E $416 $2.23 $326 $1.75 $326 $1.75 $251 $266 $1.35 $1.43 $215 $1.15 $166 $0.89 $251 $1.35 $101 $0.54 $100 $0.54 $157 $165 $0.85 $0.89 $56 $0.30 $101 $0.54 2017A 2018E 2019E 2020E 2021E 2022E 2017A 2018E 2019E 2020E 2021E 2022E 81 Source: Management Projections, Thomson One, FactSet as of 8/30/2018. Note: WSC estimates available for AMGP through 2020E. 2017A distributions / share represents 4th quarter distribution annualized. 36% 27% 36% 27% 36% 27% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
PF AMGP Projections at AMGP Proposal AR Base Volumes Case & AR Downside Volumes Case ($ in millions, unless otherwise noted) ll Street Consensus EBITDA Mgmt. Projections at AR Base Case Mgmt. Projections at AR Downside Productio n Case FY 2018E EBITDA Distributable Cash Flow 2019E 2022E CAGR 2019E 2022E CAGR $4.29 $1,642 $1,425 $3.81 $3.$412,413 $1,194 $1,222 $1,001 $1,409 $989 $783 $817 $1,229 $1,058 $1,021 $1,105 $918 730 729 $605 $851 $691 $729 $553 2H 2018 2019E 2020E 2021E 2022E 2H 2018 2019E 2020E 2021E 2022E Distributable Cash Flow / Share Dividend / Share 2019E 2022E CAGR 1E 2019E 2022E CAGR $2.71 $2.52 $2.35 $2.10 $1.97 $1.74 $1.61 $2.08 $2.01 $1.93 $1.33 $1.80 $1.81 $1.19 $1.60 $1.01 $1.36 $1.12 $1.07 $0.93 2H 2018 2019E 2020E 2021E 2022E 2H 2018 2019E 2020E 2021E 2022E 82 Source: Management Projections, Thomson One, FactSet as of 8/30/2018. Note: Analysis based on fully diluted share count. 24% 20% 19% 15% 20% 15% 18% 18% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
PF AMGP Projections at AM Proposal AR Base Volumes Case & AR Downside Volumes Case ($ in millions, unless otherwise noted) ll Street Consensus EBITDA Mgmt. Projections at AR Base Case Mgmt. Projections at AR Downside Productio n Case FY 2018E EBITDA Distributable Cash Flow 2019E 2022E CAGR 2019E 2022E CAGR $4.29 $1,642 $1,431 $3.81 $3.$412,413 $1,195 $1,222 $1,002 $1,409 $989 $783 $818 $1,229 $1,078 $1,023 $1,105 $920 730 729 $606 $851 $692 $729 $554 2H 2018 2019E 2020E 2021E 2022E 2H 2018 2019E 2020E 2021E 2022E Distributable Cash Flow / Share Dividend / Share 2019E 2022E CAGR 1E 2019E 2022E CAGR $2.62 $2.44 $2.27 $2.03 $1.90 $1.68 $1.55 $2.05 $1.94 $1.90 $1.29 $1.74 $1.75 $1.15 $1.55 $0.98 $1.31 $1.09 $1.06 $0.89 2H 2018 2019E 2020E 2021E 2022E 2H 2018 2019E 2020E 2021E 2022E 83 Source: Management Projections, Thomson One, FactSet as of 8/30/2018. 24% 21% 19% 16% 21% 16% 18% 18% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Cost of Capital 84 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
SQ AM Peer Group Cost of Equity Analysis Comparable Public Company Yield-Based Cost of Equity Expected Total Return Expected Current - 2020E Distribution CAGR Long-Term Economic Growth Estimate Expected Growth(1) Company Current Yield Implied Total Return 4.0% 5.6% 6.8% 12.4% CNX M idstream Partners LP 14.9% 4.0% 5.7% 5.8% 11.5% Hess M idstream Partners LP 15.2% 4.0% 5.6% 5.4% 11.0% BP M idstream Partners LP 14.6% 4.0% 5.5% 6.0% 11.5% Valero Energy Partners LP 13.7% 4.0% 5.6% 7.7% 13.3% EQT M idstream Partners LP 14.7% Cost of Equity Sensitized Peer Total Return Cost of Equity Barra Beta Low High (2) Raw Beta 0.76 1.02 (3) Spot Risk-Free Rate 2.9% 2.9% Equity Risk Premium (4) 6.0% 6.0% Source: Bloomberg, Duff & Phelps, FactSet, Federal Reserve, Company filings as of 8/30/2018. (1) Weights Expected Current 2020E distribution growth estimates 15% and long-term economic growth estimate by 85% to arrive at a long-term distribution growth estimate. Barra beta as of 3/23/2018. Illustrative low and high range reflects a -/+ 15% range around Barra beta. 20-year treasury bond yield as of 8/21/18. Duff & Phelps historical arithmetic premium. (2) (3) (4) 85 Cost of Equity7.5%9.1% Cost of Equity 11.0% 12.0% M edian 14.6% 4.0% 5.6% 6.0% 11.5% M ean 14.5% 4.0% 5.6% 5.8% 11.4% Western Gas Partners, L.P. 5.5% 4.0% 4.2% 7.7% 11.9% Shell M idstream Partners LP 12.3% 4.0% 5.2% 6.5% 11.7% Noble M idstream Partners LP 20.1% 4.0% 6.4% 4.8% 11.2% Phillips 66 Partners LP 10.5% 4.0% 5.0% 5.5% 10.5% A B C D E F CONFIDENTIAL DRAFT SUBJECT TO CHANGE
SQ AMGP Peer Group Cost of Equity Analysis Comparable Public Company Yield-Based Cost of Equity Expected Total Return Expected Current - 2020E Distribution CAGR Long-Term Economic Growth Estimate Expected Growth(1) Company Current Yield Implied Total Return 4.0% 4.7% 6.9% 11.6% Western Gas Equity Partners, LP 8.6% Cost of Equity Sensitized Peer Total Return Cost of Equity Barra Beta Low High (2) Raw Beta 0.84 1.14 (3) Spot Risk-Free Rate 2.9% 2.9% Equity Risk Premium (4) 6.0% 6.0% Source: Bloomberg, Duff & Phelps, FactSet, Federal Reserve, Company filings as of 8/30/2018. (1) Weights Expected Current 2020E distribution growth estimates 15% and long-term economic growth estimate by 85% to arrive at a long-term distribution growth estimate. Barra beta as of 3/23/2018. Illustrative low and high range reflects a -/+ 15% range around Barra beta. 20-year treasury bond yield as of 8/21/18. Duff & Phelps historical arithmetic premium. (2) (3) (4) 86 Cost of Equity8.0%9.8% Cost of Equity 10.6% 11.6% M edian 8.8% 4.0% 4.7% 6.3% 11.1% M ean 8.8% 4.0% 4.7% 6.3% 11.1% EQT GP Holdings LP 9.0% 4.0% 4.8% 5.8% 10.6% A B C D E F CONFIDENTIAL DRAFT SUBJECT TO CHANGE
PF AMGP Peer Group WACC Analysis Expected Total Return 2018E - 2020E Dividend CAGR Long-Term Economic Growth Estimate (1) Company Expected Growth Current Yield Implied Total Return Kinder M organ Inc 4.0% 7.1% 10.0% 25.0% 2.8% 4.0% 4.9% 4.6% 9.5% Plains All Americ an Pipeline GP 9.9% 4.0% 3.5% 6.6% 10.1% Targa Resourc es Corp. 0.8% 4.0% 4.8% 5.8% 10.6% EQT GP Holdings LP 9.0% 4.0% 5.6% 6.8% 12.4% CNX M idstream Partners LP 14.9% 4.0% 5.7% 5.8% 11.5% Hess M idstream Partners LP 15.2% 4.0% 5.6% 5.4% 11.0% BP M idstream Partners LP 14.6% 4.0% 5.5% 6.0% 11.5% Valero Energy Partners LP 13.7% Source: Bloomberg, Duff & Phelps, FactSet, Federal Reserve, Company filings as of 8/30/2018. (1) Weights Expected Current 2020E distribution growth estimates 15% and long-term economic growth estimate by 85% to arrive at a long-term distribution growth estimate. 87 M edian 12.3% 4.0% 5.2% 5.8% 11.1% M ean 12.1% 4.0% 5.2% 5.7% 10.9% Shell M idstream Partners LP 12.3% 4.0% 5.2% 6.5% 11.7% Noble M idstream Partners LP 20.1% 4.0% 6.4% 4.8% 11.2% EQT M idstream Partners LP 14.7% 4.0% 5.6% 7.7% 13.3% Western Gas Equity Partners, LP 8.6% 4.0% 4.7% 6.9% 11.6% The Williams Companies, Inc . 6.4% 4.0% 4.4% 4.0% 8.4% SemGroup Corporation 5.1% 4.0% 4.2% 7.0% 11.1% ONEOK, Inc . 10.5% 4.0% 5.0% 4.5% 9.5% A B C D E F CONFIDENTIAL DRAFT SUBJECT TO CHANGE
PF AMGP Peer Group WACC Analysis (cont.) Cost of Equity Comparable Company Yield-Based Cost of Equity Barra Beta Low High Low High (2) Raw Beta 0.84 1.14 (3) Spot Risk-Free Rate 2.9% 2.9% Cost of Equity 10.6% 11.6% Equity Risk Premium (4) 6.0% 6.0% Market Value of Equity $8,737 $8,737 Cost of Capital PF Capital Structure Cost of Capital Optimal Capital Structure(5) Low High Low High Cost of Equity Cost of Debt 10.6% 3.4% 11.6% 4.9% Cost of Equity 10.6% 3.4% 11.6% 4.9% (1) Cost of Debt Market Value of Equity Total Debt $8,737 $1,420 $8,737 $1,420 Market Value of Equity Total Debt $8,737 $3,460 $8,737 $3,460 Source: Bloomberg, Duff & Phelps, FactSet, Federal Reserve, Company filings as of 8/30/2018. (1) (2) (3) (4) (5) Illustrative low and high range reflects a -/+ 100 bps range around after tax current 5.6% cost of debt at AM. Barra beta as of 3/23/2018. Illustrative low and high range reflects a -/+ 15% range around Barra beta. 20-year treasury bond yield as of 8/21/18. Duff & Phelps historical arithmetic premium. Optimal Capital Structure based on Total Debt of 3.5x 2019E EBITDA 88 Cost of Capital8.6%9.7% Cost of Equity9.6%10.7% Cost of Capital10.6%11.6% Cost of Equity8.0%9.8% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Additional Market Detail 89 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
IDENTIAL DRAFT BJECT TFoOcCusHArNeGaE Wet Gas Type Curve Area Overview Type Curve Map with AR BTU Lines and TPH TC Areas TPH Type Curve Areas(1) 1 SW Lean Wet Gas IRR: 46% Antero Type Curve Areas(1) Rich Gas BTU Range: 1,100-1,200 2019 Wells: 4 IRR(2): 30% Highly Rich Gas AR Inventory Overview(1) Inventory Highly-Rich Gas Cond. Highly-Rich Gas Rich Gas Condensate Dry Gas 14 106 3 19 3 30 101 13 2 9 33 96 5 17 9 57 59 33 8 8 55 68 31 8 3 285 527 512 152 155 Source: DrillingInfo, IHS, Company data. Antero assumptions based on Antero publicly disclosed information. Note: Marcellus wells with first production on or after 1/1/2015. IRRs for 12,000 laterals at strip as of 3/29/2018, unless otherwise noted. (1) TPH IRR assumes 40% ethane recovery; Antero IRR assumes ethane rejection. (2) IRR at strip as of 12/31/2017. 90 1,631 Total 145 155 160 165 165 Avg. Lateral Length 9,800 10,500 11,850 12,600 12,750 Remaining 2018E 2019E 2020E 2021E 2022E 2 SW Southern Rich Wet Gas IRR: 44% 3 SW Southern Gas Condensate IRR: 67% B BTU Range: 1,200-1,275 2019 Wells: 101 IRR: 47% Highly Rich Gas Condensate BTU Range: 1,275-1,350 2019 Wells: 30 IRR: 115% C AM Gathering Pipelines AM Water Delivery Pipelines 2 31 A B C A CONF SU
Type Curve Summary Type Curve Plot TPH RWG TC Fit TPH GC TC Fit TPH Avg Gas AR TC Fit AR/TPH Bridge Gas TPH Avg Gas 12,000 Type Curve EUR, Gross Wellhead (MMcfe) Oil (Mbbl) Gas (MMcf) 10,890 85 10,380 9,413 226 8,059 18,668 146 17,795 16,137 387 13,816 23,185 84 22,679 23,946 211 22,679 9,000 EUR, Gross Sales (MMcfe) Oil (Mbbl) Gas (MMcf) NGL (Mbbl) % Liquids Cond Yield (bbl/MMcf) Cond Yield, Decline Period (Months) NGL Yield (bbl/MMcf) 14,004 85 8,823 779 37% 15-8 3 75 12,154 226 6,448 725 47% 55-25 12 90 24,006 146 15,125 1,335 37% 15-8 3 75 20,835 387 11,053 1,243 47% 55-25 12 90 30,215 84 21,545 1,361 29% 19-3 6 60 31,883 211 20,411 1,701 36% 130-5 6 75 6,000 3,000 Type Curve Parameters 0 24-Hr IP - Peak Rate, Gas (Mcf/d) Initial Decline (%/yr) B Factor Terminal Decline (%/yr) 5,500 - 8,000 59% 1.30 6% 4,000 - 7,000 63% 1.30 6% 9,400 - 13,700 59% 1.30 6% 6,900 - 12,000 63% 1.30 6% 19,420 61% 1.30 6% 19,420 61% 1.30 6% 0 1 2 3 4 5 Year Selected Observations Economic Assumptions TPH type well criteria D&C ($M) $6,400 $6,700 $10,100 $10,500 $11,400 $11,400 Operators: All Vintage Cut-Off: 2015+ Fixed LOE ($/well/mo) Variable LOE, Oil ($/bbl) Variable LOE, NGL ($/Mcf) Total All-In Gas LOE( 2) ($/Mcf) Variable LOE, Water ($/bbl) $2,800 $5.00 $6.80 $0.89 $4.68 $2,800 $5.00 $6.80 $0.89 $4.68 $2,800 $5.00 $6.80 $0.89 $4.68 $2,800 $5.00 $6.80 $0.89 $4.68 $1,353 - - $1.99 - $1,353 - - $1.99 - WV only reports data annually Proppant Cut-Off: 1,500+ lb/ft Stage Spacing Cut-Off: <200 ft Segregated by fluid window Differential, Oil ($/bbl) Differential, Gas ($/Mcf) Differential, NGL (% of Strip) BTU Factor( 3) (Btu/scf) Residual Shrink (%) ($7.50) ($0.60) 40% 1.083 85% ($7.50) ($0.60) 40% 1.083 80% ($7.50) ($0.60) 40% 1.083 85% ($7.50) ($0.60) 40% 1.083 80% ($6.00) $0.03 65% 1.000 95% ($6.00) $0.03 65% 1.000 90% A type curve similar to Anteros publicly disclosed curve can be observed by filtering the data to observe: Royalty (%) 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% Only AR operated wells 2016+ vintage cut-off All fluid windows Results NPV10 at Strip(4) ($MM) $4.0 $5.3 $8.0 $10.3 $9.8 $16.2 F & D ($/Mcfe) $0.54 $0.65 $0.49 $0.59 $0.44 $0.42 Source: DrillingInfo, IHS, Company data. Antero assumptions based on Antero publicly disclosed information. Note: TPH IB assumes 40% ethane recovery; Antero assumes ethane rejection. (1) (2) (3) (4) Assumes 100% AM water & processing fees. Antero Variable LOE is $1.99 / Mcfe (applied on total equivalent production) and includes midstream and transportation expenses. BTU uplift is included in the +$0.03 gas differential . Economics run at 5 year strip as of 3/29/2018. 91 Cumulative Gas Prod (MMcf) IRR at Strip(4) (%) 35% 53% 44% 67% 47% 115% Total Opex / Mcfe ($/Mcfe) $1.30 $1.32 $1.24 $1.25 $2.02 $2.02 D&C / ft ($M) $0.914 $0.957 $0.842 $0.875 $0.950 $0.950 Avg Lateral Length (ft) 7,000 7,000 12,000 12,000 12,000 12,000 EUR, Sales / 1k' (Bcfe) 2.00 1.74 2.00 1.74 2.52 2.66 EUR, WH / 1k' (Bcfe) 1.56 1.34 1.56 1.34 1.93 2.00 Bridging TPH curve to AR by changing well criteria as described below TPH IB Antero Disclosed( 1) S Rich Wet Gas S Gas Condensate S Rich Wet Gas 12K' S Gas Condensate 12K' Highly Rich Gas High Rih Gas Condensate CONFIDENTIAL DRAFT SUBJECT TO CHANGE
IRR Price Sensitivities Oil Price Sensitivity(1) Gas Price Sensitivity(2) 63% 102% $60 / bbl $2.90 / mmbtu $55 / bbl $2.75 / mmbtu $2.70 / mmbtu 27% ice sensitivities at AR Downside Pricing(3) Case Source: Antero assumptions based on Antero publicly disclosed information. Note: TPH IB assumes 40% ethane recovery; Antero assumes ethane rejection. (1) (2) (3) Holds Gas price flat at $2.80 / MMBtu. Holds Oil price flat at $50 / bbl. AR Downside Pricing Case applies $2.50 natural gas / $50 oil pricing to AR Base Volumes Case production. 92 64% 46% 43% 78% 51% 37% 36% $50 / bbl 59% 39% 29% 30% $45 / bbl $40 / bbl 42% 30% 23% 24% 29% 21% 17% 19% Indicates IRR pr 42% 33% 33% 56% 38% 28% 29% 54% 37% 26% $2.50 / mmbtu 45% 32% 21% 22% $2.30 / mmbtu 37% 27% 16% 17% TPH SW Southern Rich Wet GasTPH SW Southern Gas CondensateAR Highly Rich GasAR Highly Rich Gas Condensate CONFIDENTIAL DRAFT SUBJECT TO CHANGE
EUR / D&C Benchmarking EUR (Bcfe / 1,000) 2.9 2.7 2.5 D&C ($ / ft) $950 $950 93 Source: Company IR materials. Antero assumptions based on Antero publicly disclosed information. Highly Rich Gas Cond Highly Rich Gas $897 $893 $825 Median = $893 Highly Rich Gas Cond Highly Rich Gas .6 2.4 1 Median = 2.4 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
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Project Alpine Supplemental Materials September 17, 2018 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Historical Exchange Ratio Analysis Since AMGP IPO (5/4/17) | Based on Spot Prices ($ in millions, unless otherwise noted) Historical AM/AMGP Exchange Ratio At Transac tion Contrac tual Valuation 186.2 328.5 Contrac tual Valuation Yield-Based Valuation (2) (3) AMGP Proposal --1.798x ---- AM GP Shares O utstanding AM GP Units Issued 186.2 NA 186.2 NA AMGP Proposal 2.20x Adj. XR 2.00x 1.878x 1.80x 1.798x (1) 1.747x 1.60x 1.40x 1.20x May-17 Jun-17Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18Jul-18 Aug-18Sep-18 Source: Company filings, FactSet as of 9/14/2018. (1) Adjusted to reflect proposed Series B conversion, with AMGP share price calculated as (AM GP equity value + [(AM GP equity valu e - $2bn) x 6%])/(AM GP fully diluted shares outstanding + 18.5mm) based on AM GP 20-Day VWAP on the day prior to transaction. Proposal % Premium / (Discount) calculated as premium / (discount) between current AM GP proposal (1.775x) based on AM GP 20 day VWAP and adjusted XR based on AM GP closing price on 9/14/2018. Proposal % Premium / (Discount) calculated as premium / (discount) between current AM proposal (1.85x) based on AM GP 20 day VWAP and adjusted XR based on AM GP closing price on 9/14/2018. 2 (2) (3) Spot XR AM GP Pric e$17.22$17.22$17.22 2018E Series B CFNA$7NA 2018E YieldNA2.8%NA Series B Threshold$2,000 NA$2,000 Series B Redem ption Right6.0%NA6.0% Implied Series B Valuation$72$241$412 Series B Conversion Units18.518.523.9 Adj. AM GP Share Pric e$16.02$16.84$17.22 Current AM Share Pric e$30.08$30.08$30.08 At 2/23/2018 Adjusted XR1.878x1.786x1.747x AM GP Units O utstanding Inc luding Series B204.7204.7538.6 AM GP Equity Value Inc luding Series B$3,279$3,447$9,275 AM GP M arket Value$3,206$3,206$8,863 AMGP Proposal %AM Proposal % PeriodSpot X R Adj. X R(1) Premium / (Discount) Premium / (Discount) - AM Proposal--1.850x----Adj. Current1.878x1.878x(4.3%)(1.5%) Current1.747x1.878x(4.3%)(1.5%) 3-Month Average (Current)1.654x1.774x1.3%4.3% 30-Day Average (Current)1.693x1.818x(1.1%)1.8% 2/23/20181.380x1.478x21.6%25.1% 3-Month Average (at 2/23/2018)1.484x1.588x13.2%16.5% 30-Day Average (at 2/23/2018)1.444x1.543x16.5%19.9% Since AMGP IPO Average1.575x1.687x6.6% 9.7% Sample Adjusted XR Calculation CONFIDENTIAL DRAFT SUBJECT TO CHANGE
20-Day VWAP Exchange Ratio Analysis AM VWAP $30.22 AM GP VWAP $17.88 M arket Implied XR 1.690x AM GP S/O (A) 186.2 AM GP VWAP Equity Value $3,329 Series B Threshold $2,000 Redem ption Right 6.0% Series B M arket Value $80 Series B Negotiated Shares (B) 18.5 Fully Diluted AM GP Shares O utstanding (A + B = C) 204.7 Fully Diluted AM GP VWAP $16.65 AM VWAP $30.22 3 Source: Company filings, FactSet as of 9/14/2018. Note: Series B market value based on AMGP share price calculated as (AMGP equity value + [(AMGP equity value - $2bn) x 6%])/(AMGP fully diluted shares outstanding + 18.5mm) based on AMGP 20-Day VWAP on the day prior to transaction. Fully Diluted VWAP XR1.815x AM GP VWAP Based Equity Value$3,409 20-Day VWAP Analysis CONFIDENTIAL DRAFT SUBJECT TO CHANGE
After-Tax Discounted Dividend / Distribution Analysis XR Adjusted Implied PV / Unit at Various 2022E Distribution Yield | 10% Equity Discount Rate AR Base Case 8% 7% 6% $35.02 $38.41 $42.92 Tax-Adjusted Equity Only XR All-In XR 7% 6% 5% AMGP Proposal AM Proposal AR Downside Volumes Case 8% 7% 6% $30.23 $33.06 $36.82 Tax-Adjusted Equity Only XR All-In XR 7% 6% 5% AMGP Proposal AM Proposal 4 Source: Management projections and FactSet as of 9/14/2018. Note: Cash consideration of $3.415 per AM unit. Tax calculations provided by Management. Ordinary gain tax rate for AM accoun ts for Federal ordinary income tax rate of 37%, individual MLP investor deduction rate of 20% and 3.8% ACA tax rate. Ordinary gain tax rate for PF AMGP accounts for Federal ordinary income tax rate of 37% and 3.8% ACA tax rate. Exchange Ratio 1.798x 1.674x 1.850x 1.711x $33.61 $37.17 $42.17 $34.11 $37.72 $42.78 PF AMGP 2022E Dividend Yield SQ AM 2022E Distribution Yield Exchange Ratio 1.798x 1.674x 1.850x 1.711x $41.32 $45.98 $52.50 $41.61 $46.28 $52.82 PF AMGP 2022E Dividend Yield SQ AM 2022E Distribution Yield AM current price of $30.08 Cash consideration used to pay all taxes; any additional cash available assumed to purchase secondary shares CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Appendix 5 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
VWAP Calculation Detail AM 20-Day VWAP Calculation Detail AMGP 20-Day VWAP Calculation Detail 8/17/2018 $30.80 412.1 8/17/2018 $18.88 541.7 8/20/2018 $31.06 958.5 8/20/2018 $19.09 1,111.8 8/21/2018 $30.86 1,080.5 8/21/2018 $19.36 1,570.5 8/22/2018 $31.35 476.6 8/22/2018 $19.47 687.0 8/23/2018 $30.95 302.1 8/23/2018 $18.75 776.4 8/24/2018 $30.79 343.6 8/24/2018 $18.35 590.1 8/27/2018 $30.37 371.1 8/27/2018 $18.05 618.5 8/28/2018 $29.91 898.8 8/28/2018 $17.67 1,223.7 8/29/2018 $29.75 449.6 8/29/2018 $17.26 1,040.0 8/30/2018 $29.74 442.7 8/30/2018 $17.28 690.9 8/31/2018 $29.27 591.1 8/31/2018 $16.89 800.0 9/4/2018 $29.57 674.1 9/4/2018 $17.05 489.4 9/5/2018 $29.77 490.1 9/5/2018 $16.88 670.5 9/6/2018 $29.52 507.8 9/6/2018 $16.52 346.0 9/7/2018 $29.51 582.2 9/7/2018 $16.73 386.7 9/10/2018 $29.94 404.4 9/10/2018 $16.75 380.2 9/11/2018 $29.99 389.2 9/11/2018 $17.14 670.2 9/12/2018 $30.18 1,261.3 9/12/2018 $17.58 808.2 9/13/2018 $30.71 506.6 9/13/2018 $17.61 546.4 9/14/2018 $30.08 550.8 9/14/2018 $17.22 871.6 6 Source: Company filings, FactSet as of 9/14/2018. $12,692.65 $30.84 $29,769.80 $31.11 $33,345.59 $31.06 $14,941.82 $31.25 $9,351.05 $31.15 $10,579.84 $30.88 $11,268.97 $30.42 $26,882.63 $30.07 $13,374.50 $29.84 $13,165.69 $29.61 $17,302.02 $29.24 $19,934.17 $29.49 $14,588.79 $29.59 $14,989.08 $29.58 $17,179.90 $29.49 $12,106.57 $29.93 $11,671.03 $29.99 $38,067.39 $30.14 $15,556.27 $30.38 $16,567.25 $30.04 20 Day VWAP $30.22 $10,227.35 $18.82 $21,223.61 $18.97 $30,404.47 $19.24 $13,376.79 $19.36 $14,556.90 $18.89 $10,828.37 $18.32 $11,164.29 $18.05 $21,622.46 $17.75 $17,949.55 $17.30 $11,939.22 $17.28 $13,512.76 $16.89 $8,344.36 $17.06 $11,318.51 $16.79 $5,715.47 $16.56 $6,469.74 $16.58 $6,368.05 $16.63 $11,487.02 $17.05 $14,207.35 $17.49 $9,622.40 $17.57 $15,008.40 $17.36 20 Day VWAP $17.88 Volume Total Traded Date Unit Price (000's) Value ($000's) Daily VWAP Volume Total Traded Date Share Price (000's) Value ($000's) Daily VWAP CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Exchange Ratio Calculation Detail Cash Component (W/O Special Dividend) XR Gross Cash Consideration (W Special Dividend) Proposal W/O Special Dividend Equity Component XR Equity Component XR Cash Component Net Excess Cash Consideration Equity Component XR Secondary Shares Net After-Tax XR All-In XR Taxes Payable (1) (2) XR Purchased AMGP Proposal 1.775x 0.168x 1.607x $3.415 1.607x 0.191x 1.798x ($2.26) $1.16 1.607x 0.067 1.674x AM Proposal - - - $3.415 1.659x 0.191x 1.850x ($2.52) $0.90 1.659x 0.052 1.711x 7 Source: Company filings, FactSet as of 9/14/2018. (1) Based on AMGP 20-day VWAP price. (2) Based on AMGP share price of $17.22 as of 9/14/2018 L K J I H G F E D C B A CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Disclosure Statement Tudor, Pickering, Holt & Co. does not provide accounting, tax or legal advice. In addition, we mutually agree that, subject to applicable law, you (and your employees, representatives and other agents) may disclose any aspects of any potential transaction or structure described herein that are necessary to support any U.S. federal income tax benefits, and all materials of any kind (including tax opinions and other tax analyses) related to those benefits, with no limitations imposed by Tudor, Pickering, Holt & Co. About The Firm Tudor, Pickering, Holt & Co. is an integrated energy investment and merchant bank, providing high quality advice and services to institutional and corporate clients. Through the companys two broker-dealer units, Tudor, Pickering, Holt & Co. Securities, Inc. (TPHCSI) and Tudor Pickering Holt & Co Advisors LP (TPHCA), members FINRA, the company offers securities and investment banking services to the energy community. TPH Asset Management LP (TPHAM) is an SEC registered investment adviser that delivers a suite of energy investment strategies. TPH Partners Group LP is a relying advisor of TPHAM. Certain employees of TPHAM are also employees of TPHCSI. The information contained herein is confidential (except for information relating to United States tax issues) and may not be reproduced in whole or in part. Tudor, Pickering, Holt & Co. assumes no responsibility for independent verification of third-party information and has relied on such information being complete and accurate in all material respects. To the extent such information includes estimates and forecasts of future financial performance (including estimates of potential cost savings and synergies) prepared by, reviewed or discussed with the managements of your company and/ or other potential transaction participants or obtained from public sources, we have assumed that such estimates and forecasts have been reasonably prepared on bases reflecting the best currently available estimates and judgments of such managements (or, with respect to estimates and forecasts obtained from public sources, represent reasonable estimates). These materials were designed for use by specific persons familiar with the business and the affairs of your company and Tudor, Pickering, Holt & Co. materials. The firm, headquartered in Houston, Texas, has approximately 170 employees and offices in Calgary, Canada; Denver, Colorado; and New York, New York. Its affiliate, Tudor, Pickering Holt & Co. International, LLP, is located in London, England. Its Canadian affiliate, Tudor Pickering Holt & Co Securities Canada LP, is located in Calgary, Alberta. Contact Us Houston (Research, Sales and Trading): 713-333-2960 Houston (Investment Banking): 713-333-7100 Houston (Asset Management): 713-337-3999 Denver (Sales): 303-300-1900 Denver (Investment Banking): 303-300-1900 New York (Investment Banking): 212-610-1660 New York (Research, Sales): 212-610-1600 London: +011 44(0) 20 3008 6428 Calgary: 403-705-7830 Under no circumstances is this presentation to be used or considered as an offer to sell or a solicitation of any offer to buy, any security. Prior to making any trade, you should discuss with your professional tax, accounting, or regulatory advisers how such particular trade(s) affect you. This brief statement does not disclose all of the risks and other significant aspects of entering into any particular transaction. Tudor, Pickering, Holt & Co. International, LLP is authorized and regulated by the Financial Conduct Authority and is the United Kingdom affiliate of www.TPHco.com Tudor, Pickering, Holt & Co. Copyright 2018 Tudor, Pickering, Holt & Co. 8 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Project Alpine Special Committee Materials September 20, 2018 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Analysis of Potential Transactions ($ in millions, unless otherwise noted) As of 9/12/18 As of 9/19/18 AMGP 20-Day VWAP(1) AMGP 20-Day VWAP(1) $18.01 $17.58 $30.18 $18.01 $17.58 $30.18 $18.01 $17.58 $30.18 $17.50 $16.98 $30.32 $17.50 $16.98 $30.32 $17.50 $16.98 $30.32 AMGP Market Price AM Market Price AMGP Market Price AM Market Price AM - Public Unitholders AM - Public Unitholders Equity XR Cash (Excl. Special Distribution) - $3.00 Equity + Cash (Excl. Special Distribution) XR Special Distribution ($) - $0.415 1.6084x 0.1665x(2) 1.7750x 0.0230x 1.6474x 0.1665x (2) 1.8140x 0.0230x (2) 1.6604x 0.1665x (2) 1.8270x 0.0230x (2) Equity XR Cash (Excl. Special Distribution) - $3.00 Equity + Cash (Excl. Special Distribution) XR Special Distribution ($) - $0.415 1.6028x 0.1715x(2) 1.7743x 0.0237x 1.6418x 0.1715x(2) 1.8133x 0.0237x(2) 1.6548x 0.1715x(2) 1.8263x 0.0237x(2) 1.7980x(2) 1.7167x 4.7% 1.8442x (2.5%) 1.7980x(2) 1.7856x 0.7% 1.9207x (6.4%) All-In XR 1.8370x 1.8500x All-In XR 1.8370x 1.8500x Market Exchange Ratio Premium /(Discount) Market Exchange Ratio - Series B Adjusted Premium /(Discount) 1.7167x 7.0% 1.8339x 0.2% 1.7167x 7.8% 1.8442x 0.3% Market Exchange Ratio Premium /(Discount) Market Exchange Ratio - Series B Adjusted Premium /(Discount) 1.7856x 2.9% 1.9099x (3.8%) 1.7856x 3.6% 1.9207x (3.7%) AM - AR Units AM - AR Units All-In XR 1.7750x 1.7866x 1.7750x All-In XR 1.7750x 1.7866x 1.7750x Implied Market Value Premium to Current AM Unit Price $31.20 3.4% $31.41 4.1% $31.20 3.4% Implied Market Value Premium to Current AM Unit Price $30.14 (0.6%) $30.34 0.1% $30.14 (0.6%) 2 Source: Company filings, and FactSet as of 9/19/2018. (1)VWAP calculated as follows ((Sum of Daily VWAP)*(Sum of Daily Traded Value)) / (Sum of Daily Traded Value). (2)All cash adjustments to XR calculations utilize 20-day VWAP AMGP pricing. Key Non-AR AM Comparison Statistics (vs. Citi Alternative) All-In XR (0.0390x) - 0.0130x Premium to Market (2.2%) - 0.7% Key Non-AR AM Comparison Statistics (vs. Citi Alternative) All-In XR (0.0390x) - 0.0130x Premium to Market (2.3%) - 0.8% Implied Market Value$30.53$31.19$31.41 Premium to Current AM Unit Price0.7%2.9%3.6% Implied Market Value$31.61$32.29$32.52 Premium to Current AM Unit Price4.7%7.0%7.8% Net / Gross X R Calculations Net / Gross X R Calculations AMGPCitiAM ProposalAlternativeProposal AMGPCitiAM ProposalAlternativeProposal CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Analysis of Potential Transactions (cont.) ($ in millions, unless otherwise noted) As of 9/12/18 As of 9/19/18 Existing AMGP Net Debt Existing AM Net Debt New Debt to Fund Cash Consideration (5) 1,400 601 (5) 1,400 642 (5) 1,400 601 Existing AMGP Net Debt Existing AM Net Debt New Debt to Fund Cash Consideration (5) 1,400 601 (5) 1,400 642 (5) 1,400 601 Total Net Debt(1) Total Net Debt(1) 1,997 2,038 1,997 1,997 2,038 1,997 SQ AMGP Shares Shares Issued to AM Public Shares Issued to AR Shares Issued to Series B 186.2 143.5 159.0 18.5 186.2 147.0 157.9 17.4 186.2 148.2 159.0 18.5 SQ AMGP Shares Shares Issued to AM Public Shares Issued to AR Shares Issued to Series B 186.2 143.0 158.5 18.5 186.2 146.5 157.3 17.4 186.2 147.7 158.5 18.5 Total Shares 507.3 508.5 511.9 Total Shares 506.3 507.4 510.9 Implied Equity Value Implied Equity Value SQ AMGP Shareholders AM Public Unitholders AR Series B Unitholders $3,093 2,384 2,641 307 $3,071 2,424 2,604 286 $3,065 2,439 2,618 304 SQ AMGP Shareholders AM Public Unitholders AR Series B Unitholders $3,065 2,355 2,610 305 $3,043 2,395 2,571 284 $3,037 2,409 2,586 302 Implied PF Market Value Implied PF Market Value $30.13 $29.72 $30.58 $29.75 $30.74 $29.47 $29.80 $29.39 $30.25 $29.42 $30.41 $29.16 AM Public Unitholders AR AM Public Unitholders AR As of 9/12/18 As of 9/19/18 AMGP Market Value Implied Series B Valuation AM Equity Value $3,274 76 5,677 $3,162 70 5,704 SQ AMGP Net Debt SQ AM Net Debt (5) 1,400 (5) 1,400 3 Source: Company filings, and FactSet as of 9/19/2018. (1)Cash and Debt balances as of 6/30/2018 Total Enterprise Value $10,423 $10,330 Total Equity Value $9,027 $8,935 Status Quo Enterprise Value Detail Implied Share Price$16.46$16.34$16.31 Implied Share Price$16.61$16.49$16.46 Total Equity Value$8,334$8,293$8,334 Total Equity Value$8,426$8,385$8,426 Total Enterprise Value$10,330$10,330$10,330 Total Enterprise Value$10,423$10,423$10,423 AMGPCitiAM ProposalAlternativeProposal AMGPCitiAM ProposalAlternativeProposal CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Disclosure Statement Tudor, Pickering, Holt & Co. does not provide accounting, tax or legal advice. In addition, we mutually agree that, subject to applicable law, you (and your employees, representatives and other agents) may disclose any aspects of any potential transaction or structure described herein that are necessary to support any U.S. federal income tax benefits, and all materials of any kind (including tax opinions and other tax analyses) related to those benefits, with no limitations imposed by Tudor, Pickering, Holt & Co. About The Firm Tudor, Pickering, Holt & Co. is an integrated energy investment and merchant bank, providing high quality advice and services to institutional and corporate clients. Through the companys two broker-dealer units, Tudor, Pickering, Holt & Co. Securities, Inc. (TPHCSI) and Tudor Pickering Holt & Co Advisors LP (TPHCA), members FINRA, the company offers securities and investment banking services to the energy community. TPH Asset Management LP (TPHAM) is an SEC registered investment adviser that delivers a suite of energy investment strategies. TPH Partners Group LP is a relying advisor of TPHAM. Certain employees of TPHAM are also employees of TPHCSI. The information contained herein is confidential (except for information relating to United States tax issues) and may not be reproduced in whole or in part. Tudor, Pickering, Holt & Co. assumes no responsibility for independent verification of third-party information and has relied on such information being complete and accurate in all material respects. To the extent such information includes estimates and forecasts of future financial performance (including estimates of potential cost savings and synergies) prepared by, reviewed or discussed with the managements of your company and/ or other potential transaction participants or obtained from public sources, we have assumed that such estimates and forecasts have been reasonably prepared on bases reflecting the best currently available estimates and judgments of such managements (or, with respect to estimates and forecasts obtained from public sources, represent reasonable estimates). These materials were designed for use by specific persons familiar with the business and the affairs of your company and Tudor, Pickering, Holt & Co. materials. The firm, headquartered in Houston, Texas, has approximately 170 employees and offices in Calgary, Canada; Denver, Colorado; and New York, New York. Its affiliate, Tudor, Pickering Holt & Co. International, LLP, is located in London, England. Its Canadian affiliate, Tudor Pickering Holt & Co Securities Canada LP, is located in Calgary, Alberta. Contact Us Houston (Research, Sales and Trading): 713-333-2960 Houston (Investment Banking): 713-333-7100 Houston (Asset Management): 713-337-3999 Denver (Sales): 303-300-1900 Denver (Investment Banking): 303-300-1900 New York (Investment Banking): 212-610-1660 New York (Research, Sales): 212-610-1600 London: +011 44(0) 20 3008 6428 Calgary: 403-705-7830 Under no circumstances is this presentation to be used or considered as an offer to sell or a solicitation of any offer to buy, any security. Prior to making any trade, you should discuss with your professional tax, accounting, or regulatory advisers how such particular trade(s) affect you. This brief statement does not disclose all of the risks and other significant aspects of entering into any particular transaction. Tudor, Pickering, Holt & Co. International, LLP is authorized and regulated by the Financial Conduct Authority and is the United Kingdom affiliate of www.TPHco.com Tudor, Pickering, Holt & Co. Copyright 2018 Tudor, Pickering, Holt & Co. 4 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Project Alpine Supplemental Materials September 23, 2018 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Prior vs. Current Since September 2, 2018 Special Committee Meeting Updated materials to reflect most recent AMGP Proposal, Citi Alternative and AM Proposal AMGP Proposal: 1.6350x AMGP shares, $3.00 cash consideration, and a special one-time distribution on AM units of $0.415 (All-in exchange ratio of 1.8328x) Citi Alternative: 1.6392x AMGP shares, $3.00 of cash consideration, and a special one-time distribution on AM units of $0.415 (All-in exchange ratio of 1.8370x) AM Proposal: 1.6522x AMGP shares and $3.00 of cash consideration, and a special one-time distribution on AM units of $0.415 (All-in exchange ratio of 1.8500x) Series B units exchanged for 17.354mm AMGP shares For post unitholder tax analysis, cash used to pay taxes and remaining cash assumed to be used to purchase additional secondary shares Updated materials for market prices at close 9/21/2018 Change in effective date to 12/31/2018 from 6/30/2018 Non-AR AM unitholders to receive 1.6350x AMGP shares $3.00 cash consideration $0.415 special distribution Implied all-in XR of 1.8328x(1) Non-AR AM unitholders to receive all-in XR of 1.8370x Inclusive of $3.00 cash consideration and $0.415 special dividend Non-AR AM unitholders to receive all-in XR of 1.8500x Inclusive of $3.00 cash consideration and $0.415 special dividend Non-AR AM Unitholders AR to receive 1.6023x AMGP shares $3.00 cash consideration All-in XR of 1.7760x(1) AR to receive all-in XR of 1.7866x Inclusive of $3.00 cash consideration and $0.415 special dividend AR to receive 1.6023x AMGP shares $3.00 cash consideration All-in XR of 1.7760x(1) AR 17.354mm AMGP Shares 17.354mm Shares 18.5mm AMGP shares; analysis run at 17.354mm Series B 2 Source: FactSet as of 9/21/2018. (1) As of 9/21/2018 based on a 20-VWAP pricing AMGP Proposal Citi Alternative AM Proposal CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Historical Exchange Ratio Analysis Since AMGP IPO (5/4/17) | Based on Spot Prices ($ in millions, unless otherwise noted) Historical AM/AMGP Exchange Ratio At Transac tion Contrac tual Valuation 186.2 325.7 $17.35 Contrac tual Valuation Yield-Based Valuation AM GP Shares O utstanding AM GP Units Issued AM GP Pric e 186.2 NA $17.35 186.2 NA $17.35 2.20x AMGP Proposal Series B Redem ption Right 6.0% NA 6.0% Spot XR 2.00x (1) 1.851x 1.833x 1.80x 1.732x 1.60x 1.40x 1.20x May-17 Jun-17Jul-17 Aug-17 Sep-17 Oct-17Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18Jun-18Jul-18Aug-18Sep-18 Source: Company filings, FactSet as of 9/21/2018. (1) Adjusted to reflect proposed Series B conversion, with AMGP share price calculated as (AMGP equity value + [(AMGP equity value - $2bn) x 6%])/(AMGP fully diluted shares outstanding + 17.354mm) based on AMGP 20-Day VWAP on the day prior to transaction. Proposal % Premium / (Discount) calculated as premium / (discount) between current AMGP proposal (1.8328x) based on AMGP 20 day VWAP and adjusted XR based on AMGP closing price on 9/21/2018. Proposal % Premium / (Discount) calculated as premium / (discount) between current AM proposal (1.850x) based on AMGP 20 day VWAP and adjusted XR based on AMGP closing price on 9/21/2018. 3 (2) (3) 2018E Series B CF NA $7 NA 2018E Yield NA 2.8% NA Series B Threshold $2,000 NA $2,000 Implied Series B Valuation $74 $241 $413 Series B Conversion Units 17.4 17.4 23.8 Adj. XR Adj. AM GP Share Pric e $16.23 $17.06 $17.35 Current AM Share Pric e $30.05 $30.05 $30.05 At 2/23/2018 Adjusted XR 1.851x 1.762x 1.732x AM GP Units O utstanding Inc luding Series B 203.6 203.6 535.7 AM GP Equity Value Inc luding Series B $3,304 $3,472 $9,295 AM GP M arket Value $3,231 $3,231 $8,882 AMGP Proposal %AM Proposal % Period Spot X R Adj. X R(1) Premium /Premium / (2)(3) (Discount) - (Discount) AMGP Proposal --1.833x ---- AM Proposal --1.850x ---- Adj. Current 1.851x 1.851x (1.0%) (0.1%) Current 1.732x 1.851x (1.0%) (0.1%) 3-Month Average (Current) 1.666x 1.777x 3.1% 4.1% 30-Day Average (Current) 1.708x 1.824x 0.5% 1.4% 2/23/2018 1.380x 1.470x 24.7% 25.8% 3-Month Average (at 2/23/2018) 1.484x 1.580x 16.0% 17.1% 30-Day Average (at 2/23/2018) 1.444x 1.535x 19.4% 20.5% Since AMGP IPO Average 1.577x 1.681x 9.0% 10.1% Sample Adjusted XR Calculation CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Analysis of Proposals / Alternatives ($ in millions, unless otherwise noted) As of 9/21/18 AMGP Proposal AMGP 20-Day VWAP(1) $17.27 $17.35 $30.05 $17.27 $17.35 $30.05 $17.27 $17.35 $30.05 $17.27 $17.35 $30.05 AMGP Market Price AM Market Price AM - Public Unitholders Equity XR Cash (Excl. Special Distribution) - $3.00 1.6350x 0.1737x 1.8087x 0.0240x 1.6392x 0.1737x 1.8130x 0.0240x 1.6522x 0.1737x 1.8260x 0.0240x 1.6522x 0.1737x 1.8260x 0.0240x (2) Equity + Cash (Excl. Special Distribution) XR Special Distribution ($) - $0.415 (2) All-In XR 1.8328x 1.8370x 1.8500x 1.8500x Market Exchange Ratio Premium /(Discount) Market Exchange Ratio - Series B Adjusted Premium /(Discount) 1.7320x 5.8% 1.8511x (1.0%) 1.7320x 6.1% 1.8511x (0.8%) 1.7320x 6.8% 1.8511x (0.1%) 1.7320x 6.8% 1.8615x (0.6%) AM - AR Units Equity XR Cash (Excl. Special Distribution) Equity + Cash (Excl. Special Distribution) XR Special Distribution ($) 1.6023x $3.00 1.7760x - 1.5888x $3.00 1.7626x $0.42 1.6023x $3.00 1.7760x - 1.6023x $3.00 1.7760x - All-In XR 1.7760x 1.7866x 1.7760x 1.7760x Implied Market Value Premium to Current AM Unit Price $30.81 2.5% $31.00 3.2% $30.81 2.5% $30.81 2.5% 4 Source: Company filings, and FactSet as of 9/21/2018. (1)VWAP calculated as follows ((Sum of Daily VWAP)*(Sum of Daily Traded Value)) / (Sum of Daily Traded Value). (2)All cash adjustments to XR calculations utilize 20-day VWAP AMGP pricing. Key Non-AR AM Comparison Statistics (vs. Citi Alternative) All-In XR(0.0042x)-0.0130x0.0130x Premium to Market(0.2%)-0.8%0.8% Implied Market Value $31.80 $31.87 $32.10 $32.10 Premium to Current AM Unit Price 5.8% 6.1% 6.8% 6.8% Net / Gross X R Calculations Citi AM Proposal - AM Proposal - Alternative Updated Series B Prior Series B CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Analysis of Proposals / Alternatives (cont.) ($ in millions, unless otherwise noted) As of 9/21/18 AMGP Proposal Existing AMGP Net Debt Existing AM Net Debt New Debt to Fund Cash Consideration (5) 1,400 601 (5) 1,400 642 (5) 1,400 601 (5) 1,400 601 Total Net Debt(1) 1,997 2,038 1,997 1,997 SQ AMGP Shares Shares Issued to AM Public Shares Issued to AR Shares Issued to Series B 186.2 145.9 158.4 17.4 186.2 146.3 157.1 17.4 186.2 147.5 158.4 17.4 186.2 147.5 158.4 18.5 Total Shares 507.9 506.9 509.4 510.6 (2) Implied Equity Value SQ AMGP Shareholders AM Public Unitholders AR Series B Unitholders $3,064 2,401 2,606 286 $3,054 2,400 2,577 285 $3,054 2,419 2,598 285 $3,047 2,413 2,593 303 Implied PF Market Value $30.31 $29.36 $30.30 $29.48 $30.52 $29.28 $30.45 $29.22 AM Public Unitholders AR As of 9/21/18 AMGP Market Value Implied Series B Valuation AMGP Equity Value AM Equity Value $3,231 74 3,305 5,653 SQ AMGP Net Debt SQ AM Net Debt (5) 1,400 5 Source: Company filings, and FactSet as of 9/21/2018. (1)Cash and Debt balances as of 6/30/2018. (2)Excludes cash consideration. Total Enterprise Value $10,353 Total Equity Value $8,958 Status Quo Enterprise Value Detail Implied Share Price $16.45 $16.40 $16.40 $16.37 Total Equity Value $8,356 $8,315 $8,356 $8,356 Total Enterprise Value $10,353 $10,353 $10,353 $10,353 Citi AM Proposal - AM Proposal - Alternative Updated Series B Prior Series B CONFIDENTIAL DRAFT SUBJECT TO CHANGE
20-Day VWAP Exchange Ratio Analysis AM VWAP $29.95 AM GP VWAP $17.27 M arket Implied XR 1.735x AM GP S/O (A) 186.2 AM GP VWAP Equity Value $3,215 Series B Threshold $2,000 Redem ption Right 6.0% Series B M arket Value $73 Series B Negotiated Shares (B) 17.4 Fully Diluted AM GP Shares O utstanding (A + B = C) 203.6 Fully Diluted AM GP VWAP $16.15 AM VWAP $29.95 6 Source: Company filings, FactSet as of 9/21/2018. Note: Series B market value based on AMGP share price calculated as (AMGP equity value + [(AMGP equity value - $2bn) x 6%])/(AMGP fully diluted shares outstanding + 17.354mm) based on AMGP 20-Day VWAP on the day prior to transaction. Fully Diluted VWAP XR1.854x AM GP VWAP Based Equity Value$3,288 20-Day VWAP Analysis CONFIDENTIAL DRAFT SUBJECT TO CHANGE
After-Tax Discounted Dividend / Distribution Analysis XR Adjusted Implied PV / Unit at Various 2022E Distribution Yield | 10% Equity Discount Rate 8% 7% 6% $35.81 $39.36 $44.10 Tax-Adjusted Equity Only XR All-In XR 7% 6% 5% AMGP Proposal(1 (2) Citi Alternative AM Proposal(3) AR Downside Volumes Case 8% 7% 6% $30.84 $33.80 $37.75 Tax-Adjusted Equity Only XR All-In XR 7% 6% 5% (1 al (2) ve (3) l Source: Management projections and FactSet as of 9/21/2018. Note: Cash consideration of $3.415 per AM unit. Tax calculations provided by Management. Ordinary gain tax rate for AM accounts for Federal ordinary income tax rate of 37%, individual MLP investor deduction rate of 20% and 3.8% ACA tax rate. Ordinary gain tax rate for PF AMGP accounts for Federal ordinary income tax rate of 37% and 3.8% ACA tax rate. 7 (1) (2) (3) AMGP Proposal based on Non-AR Unitholders receiving 1.6350x AMGP shares + $3.415 cash consideration, AR receives 1.6023x + $3.000 cash consideration, and Series B receive 17.354mm AMGP shares Citi Alternative based on Non-AR Unitholders receiving 1.6392x AMGP shares + $3.415 cash consideration, AR receives 1.5888x + $3.415 cash consideration, and Series B receive 17.354mm AMGP shares AM Proposal based on Non-AR Unitholders receiving 1.6522x AMGP shares + $3.415 cash consideration, AR receives 1.6023x + $3.000 cash consideration, and Series B receive 17.354mm AMGP shares Exchange Ratio AMGP Propos Citi Alternati AM Proposa ) 1.8328x 1.6675x 1.8370x 1.6705x 1.8500x 1.6797x $35.08 $38.88 $44.20 $35.21 $39.02 $44.36 $35.25 $39.07 $44.41 PF AMGP 2022E Dividend Yield SQ AM 2022E Distribution Yield Exchange Ratio )1.8328x 1.6675x 1.8370x 1.6705x 1.8500x 1.6797x $43.24 $48.20 $55.14 $43.37 $48.35 $55.31 $43.43 $48.41 $55.38 PF AMGP 2022E Dividend Yield AM current price of $30.05 Cash consideration used to pay all taxes; any additional cash available assumed to purchase secondary shares For comparison purposes, AM Proposal assumes issuance of 17.354mm AMGP shares for Series B Unitholders AR Base Case SQ AM 2022E Distribution Yield CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Appendix 8 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
VWAP Calculation Detail AM 20-Day VWAP Calculation Detail AMGP 20-Day VWAP Calculation Detail 8/24/2018 $30.79 343.6 8/24/2018 $18.35 590.1 8/27/2018 $30.37 371.1 8/27/2018 $18.05 618.5 8/28/2018 $29.91 898.8 8/28/2018 $17.67 1,223.7 8/29/2018 $29.75 449.6 8/29/2018 $17.26 1,040.0 8/30/2018 $29.74 442.7 8/30/2018 $17.28 690.9 8/31/2018 $29.27 591.1 8/31/2018 $16.89 800.0 9/4/2018 $29.57 674.1 9/4/2018 $17.05 489.4 9/5/2018 $29.77 490.1 9/5/2018 $16.88 670.5 9/6/2018 $29.52 507.8 9/6/2018 $16.52 346.0 9/7/2018 $29.51 582.2 9/7/2018 $16.73 386.7 9/10/2018 $29.94 404.4 9/10/2018 $16.75 380.2 9/11/2018 $29.99 389.2 9/11/2018 $17.14 670.2 9/12/2018 $30.18 1,261.3 9/12/2018 $17.58 808.2 9/13/2018 $30.71 506.6 9/13/2018 $17.61 546.4 9/14/2018 $30.08 550.8 9/14/2018 $17.22 871.6 9/17/2018 $29.85 210.5 9/17/2018 $16.64 442.4 9/18/2018 $30.52 367.5 9/18/2018 $17.08 1,439.3 9/19/2018 $30.32 322.5 9/19/2018 $16.98 209.2 9/20/2018 $30.41 218.9 9/20/2018 $17.12 249.9 9/21/2018 $30.05 676.8 9/21/2018 $17.35 1,176.9 9 Source: Company filings, FactSet as of 9/21/2018. $10,579.84 $30.88 $11,268.97 $30.42 $26,882.63 $30.07 $13,374.50 $29.84 $13,165.69 $29.61 $17,302.02 $29.24 $19,934.17 $29.49 $14,588.79 $29.59 $14,989.08 $29.58 $17,179.90 $29.49 $12,106.57 $29.93 $11,671.03 $29.99 $38,067.39 $30.14 $15,556.27 $30.38 $16,567.25 $30.04 $6,282.77 $29.85 $11,216.62 $30.35 $9,778.50 $30.33 $6,658.15 $30.43 $20,337.90 $30.12 20 Day VWAP $29.95 $10,828.37 $18.32 $11,164.29 $18.05 $21,622.46 $17.75 $17,949.55 $17.30 $11,939.22 $17.28 $13,512.76 $16.89 $8,344.36 $17.06 $11,318.51 $16.79 $5,715.47 $16.56 $6,469.74 $16.58 $6,368.05 $16.63 $11,487.02 $17.05 $14,207.35 $17.49 $9,622.40 $17.57 $15,008.40 $17.36 $7,360.75 $16.92 $24,582.44 $17.05 $3,552.83 $17.04 $4,277.79 $17.05 $20,418.40 $17.29 20 Day VWAP $17.27 Volume Total Traded Date Unit Price (000's) Value ($000's) Daily VWAP Volume Total Traded Date Price (000's) Value ($000's) Daily VWAP CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Exchange Ratio Calculation Detail Cash Component (W/O Special Dividend) XR Gross Cash Consideration (W Special Dividend) Proposal W/O Special Dividend Equity Component XR Equity Component XR Cash Component XR(1) Net Excess Cash Consideration Equity Component XR Secondary Shares Purchased(2) Net After-Tax XR All-In XR Taxes Payable AMGP Proposal 1.6350x 0.174x 1.602x $3.415 1.6350x 0.1978x 1.8328x ($2.85) $0.56 1.6350x 0.032x 1.6675x Citi Alternative 1.6392x 0.174x 1.589x $3.415 1.6392x 0.1978x 1.8370x ($2.87) $0.54 1.6392x 0.031x 1.6705x AM Proposal - - - $3.415 1.6522x 0.1978x 1.8500x ($2.94) $0.48 1.6522x 0.027x 1.6797x 10 Source: Company filings, FactSet as of 9/21/2018. (1)Based on AMGP 20-day VWAP price. (2)Based on AMGP share price of $17.35 as of 9/21/2018 I H G F E D C B A C B A CONFIDENTIAL DRAFT SUBJECT TO CHANGE
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Project Alpine Transaction Consideration Characteristics September 28, 2018 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Situation Overview AM Special Committee evaluating potential mechanics to protect AM unitholders from potential downward trading of AMGP share price after executing a merger agreement Detailed overview of current proposed and alternative exchange ratio mechanics including: Fixed exchange ratio (floating value) Fixed value (floating exchange ratio) Collared bounds (on either value or exchange ratio, depending on base transaction structure) Other mechanics for potential consideration Contingent value rights / warrants. Precedent examples include: Kinder / El Paso 2011 consideration options for El Paso shareholders included warrants Energy Transfer / Williams CVR for decrease in value of ETC shares vs. ETE reference value as measured over ~2 year period following close Standalone termination / walk-away rights (i.e., effectively a 1-sided collar) 2 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
I. Transaction Characteristic Details 3 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Stock Consideration Mechanics Fixed Exchange Ratio | Current Proposed Structure Overview AM unitholders receive a fixed number of AMGP shares in exchange for each AM unit Example: AMGP Shares to be Issued to AM Unitholders(1) Assume AMGPs shares are trading at $16.87 per share and AM has equity value of $5.3 BN or $28.39 per unit with 188 MM units outstanding Illustrative all equity transaction: each unit of Non-AR held AM equity will be converted into 1.6350 shares of AMGP; each unit of AR held AM equity will be converted into 1.6023 shares of AMGP 345 335 325 Current AMGP 315 Offer XR: 1.6350x 305 295 285 $10.00 $12.50 $15.00 $17.50 $20.00 $22.50 $25.00 $27.50 $30.00 AMGP Share Price Mechanic Risks/Benefits Value to AM unitholders moves with AMGP stock price Pro forma accretion set at signing Value of Shares to be Issued to AM Unitholders $9,500 Considerations (Pros/Cons) Most common mechanic Focused on the intrinsic value split between two businesses instead of absolute price paid Does not protect AM from depreciation of AMGP stock price after announcement of a deal, but does provide exposure to potential upside in AMGP price between transaction announcement and close (alleviation of market uncertainty around process, positive reception to transaction, etc.) Cash component of currently contemplated transaction already provides AM unitholders a degree of fixed value structure Currently negotiated structure, which has been heavily negotiated $8,500 $7,500 $6,500 $5,500 $4,500 $3,500 Deviation from this mechanic potentially opens up valuation terms of the transaction (exchange ratio, cash consideration, etc.) $2,500 $10.00 $12.50 $15.00 $17.50 $20.00 $22.50 $25.00 $27.50 $30.00 AMGP Share Price 4 Source: FactSet as of 9/26/2018. Note: Assumes all equity transaction at offer based on Equity XR to Non-AR unitholders of 1.6350x and AR of 1.6023x. (1)Represents XR to Non-AR AM unitholders. Closing AMGPNo. of AMGPTotal $ Value of AMGP SharesExchange Ratio Stock PriceShares IssuedIssued $15.18 (-10%) 304.3 MM $4,620 MM 1.6350x $16.87 (at market) 304.3 MM $5,134 MM 1.6350x $18.56 (+10%) 304.3 MM $5,648 MM 1.6350x Non-AR AM XR 1.8534x 1.7997x 1.7460x 1.6923x 1.6385x 1.5848x 1.5311x CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Stock Consideration Mechanics Floating Exchange Ratio / Fixed Value Overview AM unitholders receive a number of AMGPs shares at close equal to a fixed value based upon a reference / average AMGP price Example: Assume AMGPs shares are trading at $16.87 per share and AM has equity value of $5.3 BN or $28.39 per unit with 188MM units outstanding Merger Agreement: Each outstanding unit of AM equity will be converted into the number of shares of AMGP stock determined by dividing $5.3 BN by the closing AMGP stock price AMGP Shares to be Issued to AM Unitholders(1) 600 500 400 300 Exchange Ratio(1) Price Shares Issued AMGP Shares 200 100 0 $10.00 $12.50 $15.00 $17.50 $20.00 $22.50 $25.00 $27.50 $30.00 Mechanic Risks/Benefits AM unitholders receive fixed value at closing Accretion and number of AMGP shares issued uncertain until closing Value of Shares to be Issued to AM Unitholders $9,500 Considerations (Pros/Cons) Pro Forma AMGP has theoretically unlimited potential for dilution if its share price falls Introduces uncertainty into transaction impossible to pinpoint accretion / dilution or pro forma dividend per share impact of transaction until the consideration is fixed (after signing, either close to or at the time of closing) $8,500 $7,500 $6,500 $5,500 Without a collar, there is no cap to define the potential range of outcomes when analyzing transaction $4,500 Unusual structure without collar or other protection mechanisms given these risks and unprecedented for similar transactions in the MLP sector $3,500 $2,500 $10.00 $12.50 $15.00 $17.50 $20.00 $22.50 $25.00 $27.50 $30.00 AMGP Share Price 5 Source: FactSet as of 9/26/2018. Note: Assumes all equity transaction at offer based on Equity XR to Non-AR unitholders of 1.6350x and AR of 1.6023x. (1)Represents XR to Non-AR AM unitholders. Closing AMGP StockNo. of AMGPTotal $ Value of $15.18 (-10%) 338.2 MM $5,134 MM 1.8170x $16.87 (at market) 304.3 MM $5,134 MM 1.6350x $18.56 (+10%) 276.6 MM $5,134 MM 1.4861x Non-AR AM XR 3.2234x 2.6861x 2.1489x 1.6117x 1.0745x 0.5372x CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Floating Consideration Overview Fixed Exchange Ratio / Floating Consideration with Collar Structure Overview Reflects 1.6350x exchange ratio that becomes subject to adjustment at +/-10% of current AMGP share price Additional features to potentially be negotiated would include: Exchange Ratio $15.18 $16.87 $18.56 1.8000x Walk-away right for AM below the minimum collar price of $15.18 Top-up provision for AMGP to have the right to increase the exchange ratio to maintain the minimum value consideration to AM unitholders t AMGP 1.6350x 1.7000x Mechanic Risks/Benefits 1.6000x Value to AM unitholders fluctuates within band, and becomes fixed outside band, subject to walk away Accretion is fixed at minimum level unless AMGP elects to increase XR at lower AMGP pricing levels 1.5000x 1.4000x Considerations (Pros/Cons) Frequently implemented as a two-sided collar (vs. just a floor on AMGP share price) Would be introduced to protect AM unitholders from receiving shares with significantly lower market value than at the time of transaction announcement, but would also cap the value upside from AMGP share price appreciation Often implemented with walkaway / top rights, which introduce transaction uncertainty into the market $14.68 $15.18 $15.75 $16.31 $16.87 $17.43 AMGP Share Price $17.99 $18.56 $19.06 Value per Unit to AM Unitholders $15.18 $16.87 $18.56 $32.00 Illustrative Share Issuance(1) $30.00 $28.00 $14.00 $15.18 $16.00 $17.00 $18.56 $19.00 $20.00 1.7732x 1.6350x 1.6350x 1.6350x 1.6350x 1.5969x 1.5170x 158.3 145.9 145.9 145.9 145.9 142.5 135.4 $26.00 $24.00 $14.68 $15.18 $15.75 $16.31 $16.87 $17.43 AMGP Share Price $17.99 $18.56 $19.06 6 Source: FactSet as of 9/26/2018. (1)Assumes that AMGP exercises top-up provision below the bottom bound of the collar AM Unit Consideration Exchange Ratio AM GP Share Price Exchange Ratio Shares Issued to Non-AR AM Unitholders Curren Offer XR: Current AMGP Share PriceCollar BoundariesAMGP Option to Increase XRAM Right to Close or Terminate CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Fixed Consideration Overview Fixed Consideration / Floating Exchange Ratio with Collar Structure Overview Reflects $27.58 fixed consideration subject to adjustment at +/-10% of current AMGP share price Additional features to potentially be negotiated would include: Exchange Ratio $15.18 $16.87 $18.56 1.9000x Walk-away right for AM below the maximum collar exchange ratio of 1.8167x Top-up provision for AMGP to have the right to continue to increase the exchange ratio to maintain the minimum value consideration to AM unitholders 1.8000x 1.7000x Mechanic Risks/Benefits Risks to AMGP, Potential Benefits to AM unitholders: 1.6000x Fixed value within band to AM unitholders, then floats with AMGP share price, subject to termination 1.5000x Risks to AM unitholders, Potential Benefits to AMGP: Uncertain pro forma accretion within band 1.4000x Considerations (Pros/Cons) Potential to test either end of a collar change in current AM / AMGP situation $14.62 $15.18 $15.75 $16.31 $16.87 $17.43 AMGP Share Price $17.99 $18.56 $18.96 Frequent for acquiror to experience price degradation given dilution risk introduced by the fixed value aspect of structure Given AMGP is currently trading on the low end of the range over the past few months, potential for AMGP price to rally, which would have a dilutive impact to AM unitholders as they would receive fewer shares as a result Value per Unit to AM Unitholders $15.18 $16.87 $18.56 $30.00 Illustrative Share Issuance(2) $29.00 At Current AMGP 1.6350x y XR: 58(1) $28.00 $14.00 $15.18 $16.00 $17.00 $18.56 $19.00 $20.00 1.9702x 1.8167x 1.7239x 1.6225x 1.4864x 1.4864x 1.4864x 175.8 162.1 153.9 144.8 132.7 132.7 132.7 $27.00 $26.00 $14.62 $15.18 $15.75 $16.31 $16.87 $17.43 AMGP Share Price $17.99 $18.56 $18.96 7 Source: FactSet as of 9/26/2018. (1)Assumes all equity transaction. Does not include $3.415 of cash consideration for each unaffiliated AM unit. (2)Assumes that AMGP exercises top-up provision below the bottom bound of the collar. AM Unit Consideration Exchange Ratio AM GP Share Price Exchange Ratio Shares Issued to Non-AR AM Unitholders Offer of equit $27. Current AMGP Share PriceCollar BoundariesAMGP Option to Increase XRAM Right to Close or Terminate CONFIDENTIAL DRAFT SUBJECT TO CHANGE
II. Supporting Data 8 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Incidence of Deal Protection Select Deals(1) (Fixed Value versus Fixed Exchange Deals) Summary Fixed Value Fixed Exchange Collar Fixed Value, 16 (8%) 23 22 21 20 19 12 12 11 10 1 1 1 Fixed Exchange, 192 (92%) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Deals by Consideration Type(2) Cash Stock Combo Combo, 383 (18%) tock, 305 (14%) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Cash, 1,488 (68%) Source: Simpson Thacher. Dealogic. (1) Select public deals. (2) Based on public deals over $500 MM of deal value with AM nationality in U.S. 9 42 28 28 229 32 33 43 S 198 34 32 31 50 38 20 50 27 28 21 152 26 139 135 142 22 25 30 115 109 109 30 89 71 0 1413 15 5 3 3 1 0 0 2 0 5 Cap / Collar 3 Cap / (1 FV, 2 FE) 3 Cap / Collar; 1 Walk-away 3 Cap / Collar 2 Cap / Collar 3 Cap / Collar (2 FV, 1 FE); 1 Walk-away CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Fixed Exchange Ratio / Floating Consideration within Collar Precedents Common stock, preferred stock, and cash Simon Property Group, I nc. Chelsea Property Group, I nc. $4,861 6/21/04 Unit Yes No Yes No Verizon Communications I nc. MCI I nc. 8,496 2/14/05 Common stock and cash Unit Yes No Yes No Pulte Homes I nc. Centex Corporation 3,106 9/4/09 Common stock --Yes Southwest Airlines Co. AirTran Holdings, I nc. 1,042 9/27/10 Common stock and cash Unit Yes No Yes No I nco Ltd. Falconbridge Ltd. 10,969 11/5/10 Common stock or cash Election, pro rata Yes No Yes No AT&T Time Warner 85,725 10/22/16 Common stock and cash --No Yes Yes No 10 A B C D E F G H I J Fix ed Deal V alueUnit vs. Elec tion,Ex c hange A c quirorTarget($ mill)Date A nn.ConsiderationA lloc ation Proc edureRatioFix ed V alueCap/ CollarW alk - aw ay CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Fixed Consideration / Floating Exchange Ratio within Collar Johnson & Johnson Guidant Corporation $25,856 12/15/04 Common stock and cash Unit No Yes Yes No MetLife I nc. Travelers Life & 11,695 1/31/05 Common stock and cash Unit No Yes Yes Yes NRG Energy, I nc. Texas Genco LLC 8,325 9/30/05 Common stock and cash Unit No Yes Yes No News Corp. Dow Jones & Co. I nc. 5,110 1/5/07 Common stock or cash Election, pro rata No Yes No No Berkshire Hathaway I nc. Burlington Northern Santa Fe 36,724 3/9/11 Common stock or cash Election, pro rata No Yes Yes No Common stock and/or cash Tyco I nternational Brinks Home Security 1,947 1/18/10 Election, pro rata No Yes Yes No AT&T I nc. T-Mobile USA, I nc. 39,000 3/20/11 Common stock and cash Unit No Yes Yes No Johnson & Johnson Synthes, I nc. 22,766 4/18/11 Common stock and cash Unit No Yes Yes No Common stock and/or The PNC Financial Services RBC Bank (USA) 3,450 6/20/11 cash, at the election of Unit No Yes Yes No Group, I nc. the acquir or Common stock and/or cash priceline.com I ncorporated KAYAK Software Corporation 1,806 8/12/11 Election, pro rata No Yes Yes No W.P. Carey I nc. Global I ncorporated 3,779 7/25/13 Common stock Unit No Yes Yes No Fidelity National Financial Lender Processing Services 3,207 5/28/13 Common Stock and cash Unit No Yes Yes Yes AT&T I nc. DirecTV I nc. 48,082 5/18/14 Common stock and cash Unit No Yes Yes No Dollar Tree, I nc. Family Dollar Stores, I nc. 8,529 7/28/14 Common stock and cash Unit No Yes Yes No GTECH S.p.A. I nternational Game 6,256 7/16/14 Common stock and cash Unit No Yes Yes No 11 A B C D E F G H I J Fix ed Deal V alue Unit vs. Elec tion, Ex c hange A c quiror Target ($ mill) Date A nn. Consideration A lloc ation Proc edure Ratio Fix ed V alue Cap/ Collar W alk - aw ay CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Disclosure Statement Tudor, Pickering, Holt & Co. does not provide accounting, tax or legal advice. In addition, we mutually agree that, subject to applicable law, you (and your employees, representatives and other agents) may disclose any aspects of any potential transaction or structure described herein that are necessary to support any U.S. federal income tax benefits, and all materials of any kind (including tax opinions and other tax analyses) related to those benefits, with no limitations imposed by Tudor, Pickering, Holt & Co. About The Firm Tudor, Pickering, Holt & Co. is an integrated energy investment and merchant bank, providing high quality advice and services to institutional and corporate clients. Through the companys two broker-dealer units, Tudor, Pickering, Holt & Co. Securities, Inc. (TPHCSI) and Tudor Pickering Holt & Co Advisors LP (TPHCA), members FINRA, the company offers securities and investment banking services to the energy community. TPH Asset Management LP (TPHAM) is an SEC registered investment adviser that delivers a suite of energy investment strategies. TPH Partners Group LP is a relying advisor of TPHAM. Certain employees of TPHAM are also employees of TPHCSI. The information contained herein is confidential (except for information relating to United States tax issues) and may not be reproduced in whole or in part. Tudor, Pickering, Holt & Co. assumes no responsibility for independent verification of third-party information and has relied on such information being complete and accurate in all material respects. To the extent such information includes estimates and forecasts of future financial performance (including estimates of potential cost savings and synergies) prepared by, reviewed or discussed with the managements of your company and/ or other potential transaction participants or obtained from public sources, we have assumed that such estimates and forecasts have been reasonably prepared on bases reflecting the best currently available estimates and judgments of such managements (or, with respect to estimates and forecasts obtained from public sources, represent reasonable estimates). These materials were designed for use by specific persons familiar with the business and the affairs of your company and Tudor, Pickering, Holt & Co. materials. The firm, headquartered in Houston, Texas, has approximately 170 employees and offices in Calgary, Canada; Denver, Colorado; and New York, New York. Its affiliate, Tudor, Pickering Holt & Co. International, LLP, is located in London, England. Its Canadian affiliate, Tudor Pickering Holt & Co Securities Canada LP, is located in Calgary, Alberta. Contact Us Houston (Research, Sales and Trading): 713-333-2960 Houston (Investment Banking): 713-333-7100 Houston (Asset Management): 713-337-3999 Denver (Sales): 303-300-1900 Denver (Investment Banking): 303-300-1900 New York (Investment Banking): 212-610-1660 New York (Research, Sales): 212-610-1600 London: +011 44(0) 20 3008 6428 Calgary: 403-705-7830 Under no circumstances is this presentation to be used or considered as an offer to sell or a solicitation of any offer to buy, any security. Prior to making any trade, you should discuss with your professional tax, accounting, or regulatory advisers how such particular trade(s) affect you. This brief statement does not disclose all of the risks and other significant aspects of entering into any particular transaction. Tudor, Pickering, Holt & Co. International, LLP is authorized and regulated by the Financial Conduct Authority and is the United Kingdom affiliate of www.TPHco.com Tudor, Pickering, Holt & Co. Copyright 2018 Tudor, Pickering, Holt & Co. 12 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Project Alpine Discussion Materials October 2, 2018 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Breakeven Coverage Analysis Breakeven Coverage Detail Exchange Ratio Calculation AM SQ Distribution / Unit $2.21 AM SQ Coverage 1.3068x Non-AR AM Breakeven 1.8087x XR (all-in XR excluding $0.415 special dividend) PF Distribution / Share to Non-AR AM Unitholders $2.21 Coverage 1.3312x 1.6350x Equity XR PF Distribution / Share to Non-AR AM Unitholders $2.21 Coverage 1.2033x Based on AR Breakeven Analysis 1.7760x All-In AR XR PF Distribution / Share to Non-AR AM Unitholders $2.25 Coverage 1.3074x 1.6023x AR Equity XR PF Distribution / Share to Non-AR AM Unitholders $2.26 Coverage 1.1794x 2 Source: Company filings, FactSet as of 9/21/2018. AM GP Proposal to AR Equity XR 1.6023x Cash Consideration $3.000 AM GP 20-Day VWAP (9/21/2018) $17.27 Cash Consideration Implied XR 0.1737x AM GP Proposal to AR All-In XR 1.7760x AM GP Proposal to Non-AR AM Equity XR 1.6350x Cash Consideration (Ex. Spec ial Distribution) $3.000 AM GP 20-Day VWAP (9/21/2018) $17.27 Cash Consideration Implied XR 0.1737x AM GP Proposal to Non-AR AM All-In XR (Ex. Special Div) 1.8087x 2019 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Disclosure Statement Tudor, Pickering, Holt & Co. does not provide accounting, tax or legal advice. In addition, we mutually agree that, subject to applicable law, you (and your employees, representatives and other agents) may disclose any aspects of any potential transaction or structure described herein that are necessary to support any U.S. federal income tax benefits, and all materials of any kind (including tax opinions and other tax analyses) related to those benefits, with no limitations imposed by Tudor, Pickering, Holt & Co. About The Firm Tudor, Pickering, Holt & Co. is an integrated energy investment and merchant bank, providing high quality advice and services to institutional and corporate clients. Through the companys two broker-dealer units, Tudor, Pickering, Holt & Co. Securities, Inc. (TPHCSI) and Tudor Pickering Holt & Co Advisors LP (TPHCA), members FINRA, the company offers securities and investment banking services to the energy community. TPH Asset Management LP (TPHAM) is an SEC registered investment adviser that delivers a suite of energy investment strategies. TPH Partners Group LP is a relying advisor of TPHAM. Certain employees of TPHAM are also employees of TPHCSI. The information contained herein is confidential (except for information relating to United States tax issues) and may not be reproduced in whole or in part. Tudor, Pickering, Holt & Co. assumes no responsibility for independent verification of third-party information and has relied on such information being complete and accurate in all material respects. To the extent such information includes estimates and forecasts of future financial performance (including estimates of potential cost savings and synergies) prepared by, reviewed or discussed with the managements of your company and/ or other potential transaction participants or obtained from public sources, we have assumed that such estimates and forecasts have been reasonably prepared on bases reflecting the best currently available estimates and judgments of such managements (or, with respect to estimates and forecasts obtained from public sources, represent reasonable estimates). These materials were designed for use by specific persons familiar with the business and the affairs of your company and Tudor, Pickering, Holt & Co. materials. The firm, headquartered in Houston, Texas, has approximately 170 employees and offices in Calgary, Canada; Denver, Colorado; and New York, New York. Its affiliate, Tudor, Pickering Holt & Co. International, LLP, is located in London, England. Its Canadian affiliate, Tudor Pickering Holt & Co Securities Canada LP, is located in Calgary, Alberta. Contact Us Houston (Research, Sales and Trading): 713-333-2960 Houston (Investment Banking): 713-333-7100 Houston (Asset Management): 713-337-3999 Denver (Sales): 303-300-1900 Denver (Investment Banking): 303-300-1900 New York (Investment Banking): 212-610-1660 New York (Research, Sales): 212-610-1600 London: +011 44(0) 20 3008 6428 Calgary: 403-705-7830 Under no circumstances is this presentation to be used or considered as an offer to sell or a solicitation of any offer to buy, any security. Prior to making any trade, you should discuss with your professional tax, accounting, or regulatory advisers how such particular trade(s) affect you. This brief statement does not disclose all of the risks and other significant aspects of entering into any particular transaction. Tudor, Pickering, Holt & Co. International, LLP is authorized and regulated by the Financial Conduct Authority and is the United Kingdom affiliate of www.TPHco.com Tudor, Pickering, Holt & Co. Copyright 2018 Tudor, Pickering, Holt & Co. 3 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Project Alpine Special Committee Materials October 6, 2018 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Table of Contents Antero Situation Overview I AM Financial Analysis II AMGP Financial Analysis III Analysis of Transaction IV Pro Forma Impact V Pro Forma Trading Analysis VI After-Tax Pro Forma Impact Supplemental Materials VII Appendix 2 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
I. Antero Situation Overview 3 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Prior vs. Current Since September 2, 2018 Special Committee Meeting Updated materials to reflect most recent AMGP Proposal: Non-AR AM Unitholders - 1.6350x AMGP shares, $3.00 cash consideration, and a special one-time distribution on AM units of $0.415 to the non-AR AM unitholders (All-in exchange ratio of 1.8333x)(1) AR AM Unitholders - 1.6023x AMGP shares, $3.00 cash consideration (All-in exchange ratio of 1.7765x)(1) Series B units exchanged for 17.354mm AMGP shares Addition of Tallgrass Energy, LP to pro forma comparable peer set Comparables multiples updated to 2019 and 2020 from 2018 and 2019 Adjusted status quo AMGP terminal multiple and yield ranges based on market changes Change in effective date to 12/31/2018 from 6/30/2018 AM tax basis rolled forward to YE 2018 from YE 2017 Hypothetical Trading Analysis based on 2019E dividends rather 2H 2018E Annualized dividends Updated equity in unconsolidated affiliates to exclude the book depreciation on the underlying JVs Has/gets analysis Prior DDM analysis driven by SQ distributions which has been corrected to reference PF dividends Corrected Unlevered FCF calculation Updated materials for market prices at close 10/3/2018 4 Source: FactSet as of 10/3/2018. (1) As of 10/3/2018 based on a 20-VWAP pricing CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Summary of Transaction Each Non-AR AM Common Unit to receive: 1.6350 AMGP shares $3.00 Cash $0.415 special cash distribution at closing For each common unit held, AR to receive: 1.6023 AMGP shares $3.00 Cash Series B units will be exchanged for 17.354mm AMGP shares Implies ~$301mm valuation at market close as of September 21, 2018 Newly issued AMGP shares will vest on the same schedule as Series B units Unvested new AMGP shares do not accrue dividends Pro forma for transaction equity ownership breakdown as follows: AM Unitholders: ~59.9% AMGP Shareholders: ~36.6% Series B Unitholders: ~3.4% Streamlined Transaction Structure Single, publicly-traded midstream corporation Alignment of management incentives between AM unitholders, AMGP shareholders and Series B unitholders Improved Financial Performance Elimination of IDRs will reduce PF AMGPs cost of capital relative to SQ entity Elimination of Series B will increase cash available for distribution to PF equity owners Expected elimination of cash taxes payable by PF AMGP through 5-year forecast as a result of the tax basis step-up attributable to the Transaction and additional depreciation generated from capital investment Enhanced Trading Metrics PF AMGP will have larger float and greater liquidity Larger potential investor base given institutional investor preference for traditional C-corp structure New shares should, over time, be eligible for inclusion in major indices further expanding investor universe PF AMGP will be reestablished as a Delaware C-corp 9-member independent, Board of Directors with no more than 4 appointed by AR, the Sponsors or Management AR, the Sponsors, and Management agree to vote in support of independent directors nominated by the Nominations & Governance Committee or in proportion to the votes cast by public stockholders 5 Governance AMGPs Original Stated Rationale for Transaction Pro Forma Ownership Splits Series B Valuation Proposal Premiums Spot AM Price 20-Day Average XR 20-Day Average Adj-XR Spot AMGP Price Spot XR Spot Adj-XR 2/23/2018 10/3/2018 Implied Offer Premiums 2/23/2018 10/3/2018 $26.49$29.44 1.4173x1.7321x 1.5068x1.8521x $19.19$17.58 1.3804x1.6746x 1.4702x1.7889x $32.16 1.8333x 1.8333x --1.8333x 1.8333x 21.4%9.2% 29.4%5.8% 21.7%(1.0%) ----32.8%9.5% 24.7%2.5% Consideration Proposal ComponentDescription CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Antero Entities Ownership Overview ($ in millions, unless otherwise noted) Organizational Structure Overview Net Debt Sponsors Management Public Shareholders 72% A Units Management Public Unitholders Source: Company filings, FactSet as of 10/3/2018. (1) 50% of Series B remain unvested; remaining 50% will vest half on 12/31/2018 and half on 12/31/2019. All shares automatically vest upon the liquidation of IDR LLC. Value based on 6% of AMGP equity value above $2,000mm. (2) AR net debt consolidates for AM. 6 Sponsor/M anagenent Ownership AR AM AM GP - Series A AM GP - Series B(1) Total # Shares (000s) Value ($MM) % Outstanding # Units (000s) Value ($MM) % Outstanding # Shares (000s) Value ($MM) % Outstanding Units (000s) Value ($MM) % Outstanding Warburg Pinc us LLC 46,609 $861 14.7% - - - 55,110 $969 29.6% - - - Yorktown Partners LLC 12,905 $238 4.1% - - - 15,534 $273 8.3% - - - Total Aggregate Investm ent $1,830 $511 Total Sponsor 59,514 $1,099 18.8% - - - 70,644 $1,242 37.9% - - - $2,341 Paul Rady 16,350 $302 5.2% 303 $9 0.2% 19,997 $352 10.7% 48 $45 48.7% Glen Warren 10,823 $200 3.4% 207 $6 0.1% 14,931 $262 8.0% 32 $30 32.5% O ther 3 $0 0.0% 353 $10 0.2% 2,937 $52 1.6% 19 $18 18.9% $708 $499 $80 Total M anagement 29,787 $502 8.6% 863 $25 0.5% 37,865 $666 20.3% 99 $93 100.0% $1,286 TO TAL 89,301 $1,601 27.3% 863 $25 0.5% 108,509 $1,908 58.3% 99 $93 100.0% $3,627 Holdings Management reholders 38% 19% 100%100% Series 100% Series Antero IDRB Units 9% Antero R esources (AR) (IDR LLC) Non-Econ100% IDRs GP 53% LP Antero Midstream Partners LP (AM) 47% LP Antero Midstream Partners GP LLC 20% Public Sha Antero Midstream GP LP (AMGP) 42% Metric AR AM AMGP Price (as of 10/3/2018) $18.47 $29.44 $17.58 Fully Dilluted Shares O/S 322 188 186 Market Equity Value 5,945 5,538 3,274 GP Equity Value - 3,274 - Total Equity Value 5,945 8,811 3,274 (2)5,274 1,400 (5) Series B Value - - 76 Total Enterprise Value $11,220 $10,212 $3,345 Value of AM Units Held $2,929 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Antero Midstream Timeline Relative Performance Since AM IPO (11/5/2014)(1,2) AM AM Peers AMGP AMGP Peers AR AMZ Notable Events Primary Issuance Secondary Issuance The Tax Cuts & 150% 125% 18% 100% (12%) (22%) (25%) 75% (43%) 50% (65%) 25% Nov-14 May-15 Nov-15 May-16 Nov-16 May-17 Nov-17 May-18 Source: Company filings, FactSet as of 10/3/2018. Note: AM peers include BPMP, CNXM, EQM, HESM, NBLX, PXSP, SHLX, WES, and VLP. AMGP peers include EQGP and WGP. Note: AM peer selection considered E&P sponsored MLPs and high-growth MLPs, categorized as such if current 2022E distribution growth CAGR is greater than 10%. (1) Indexed values reflect total return on investment. Distributions and dividends reinvested at current market price on date paid. (2) AM price performance indexed to IPO price of $25.00 and AMGP price performance indexed to IPO price of $23.50. 7 2/14/2018 SailingStone Capital files 13D disclosing 11% stake in Antero Resources 2/23/2018 Antero Midstream Partners announces the formation of Special Committee 11/5/2014 AM IPO 3/24/2016 AM prices offering of ~8MM common units (~$179MM) from AR 12/22/2017 Jobs Act is signed into law 9/6/2017 AM prices public offering of ~10MM common units (~$315MM) from AR 2/6/2017 AM prices public offering of ~6MM common units (~$198MM) CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Antero Midstream Timeline Relative Performance Since Committee Announcement (2/23/2018)(1) AM AM Peers AMGP AMGP Peers AM E&P Sponsored Peers AR AMZ 130% 120% 11% 110% 6% 6% 100% (3%) (8%) (10%) 90% (14%) 80% Feb-18 Mar-18 Apr-18 May-18 May-18 Jun-18 Jul-18 Aug-18 Aug-18 Sep-18 Source: Company filings, FactSet as of 10/3/2018. Note: AM peers include BPMP, CNXM, EQM, HESM, NBLX, PXSP, SHLX, WES, and VLP. AM E&P Sponsored peers include CNXM, EQM, HESM, and NBLX. AMGP peers include EQGP and WGP. Note: AM peer selection considered E&P sponsored MLPs and high-growth MLPs, categorized as such if current 2022E distribution growth CAGR is greater than 10%. (1) Indexed values reflect total return on investment. Distributions and dividends reinvested at current market price on date paid. 8 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Antero Midstream Timeline Relative Performance Since Committee Announcement (2/23/2018)(1) AM CNXM EQ M HESM NBL X 140% 130% 120% 11% 11% 7% 110% 100% 90% (15%) 80% (24%) 70% 60% 23-Feb-18 18-Mar-18 10-Apr-18 3-May-18 26-May-18 18-Jun-18 11-Jul-18 3-Aug-18 26-Aug-18 18-Sep-18 9 Source: Company filings, FactSet as of 10/3/2018. (1) Indexed values reflect total return on investment. Distributions and dividends reinvested at current market price on date paid. CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Historical Exchange Ratio Analysis Since AMGP IPO (5/4/17) | Based on Spot Prices ($ in millions, unless otherwise noted) Historical AM/AMGP Exchange Ratio At Transac tion Contrac tual Valuation 186.2 314.9 $17.58 Contrac tual Valuation Yield-Based Valuation Period Market X R Adj. X R (Discount) to Market (Discount) to Ad - AM GP Shares O utstanding AM GP Units Issued AM GP Pric e 186.2 NA $17.58 186.2 NA $17.58 2.20x 2018E Yield NA 2.8% NA AMGP Proposal Series B Redem ption Right 6.0% NA 6.0% Spot XR 2.00x 1.833x 1.80x (1) 1.789x 1.675x 1.60x 1.40x 1.20x May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Source: Company filings, FactSet as of 10/3/2018. 10 (1) Adjusted to reflect proposed Series B conversion, with AMGP share price calculated as (AMGP equity value + [(AMGP equity value - $2bn) x 6%])/(AMGP fully diluted shares outstanding + 17.354mm) based on AMGP 20-Day VWAP on the day prior to transaction. 2018E Series B CF NA $7 NA Series B Threshold $2,000 NA $2,000 Implied Series B Valuation $76 $241 $409 Series B Conversion Units 17.4 17.4 23.2 Adj. XR Adj. AM GP Share Pric e $16.46 $17.27 $17.58 Current AM Share Pric e $29.44 $29.44 $29.44 At 2/23/2018 Adjusted XR 1.789x 1.705x 1.675x AM GP Units O utstanding Inc luding Series B 203.6 203.6 524.4 AM GP Equity Value Inc luding Series B $3,350 $3,515 $9,218 AM GP M arket Value $3,273 $3,273 $8,810 % Premium /% Premium / (1)j. X R X R at Transactionat Transaction At Transaction--1.833x---- Current1.675x1.789x9.5%2.5% 3-Month Average (Current)1.678x1.790x9.3%2.4% 30-Day Average (Current)1.721x1.840x6.5%(0.4%) 2/23/20181.380x1.470x32.8%24.7% 3-Month Average (at 2/23/2018)1.484x1.580x23.5%16.1% 30-Day Average (at 2/23/2018)1.444x1.535x26.9%19.4% Since AMGP IPO Average1.580x1.683x16.0% 8.9% Sample Adjusted XR Calculation CONFIDENTIAL DRAFT SUBJECT TO CHANGE
II. AM Financial Analysis 11 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AM Selected Comparable Company Analysis Dist. Growth 2018E to 2020E CAGR Unit Price at 10/3/2018 Total Equity Market Value(1) Enterprise Value % Dist. to GP/IDRs Price (Yield) DCF / LP Unit EBITDA 2018E Coverage Company Current 2018E 2019E 2020E 2019E 2020E DCF / Unit DCF / Unit Source: FactSet as of 10/3/2018 and Wall Street research. (1) (2) (3) (4) Values GP and IDR cash flow at LP yield for MLPs with non-public GPs. Defined as high-growth MLP if current 2020E distribution growth CAGR is greater than 10%. Based on Wall Street consensus estimates as compiled by FactSet. Antero Midstream Partners LP announced on February 26, 2018 that its Board of Directors had formed a special committee, in conjunction with the formation of special committees at both Antero Resources and Antero Midstream GP, to evaluate potential measures and transactions that could involve Antero Midstream. Implied unit prices are calculated based on Management projections. 12 (5) LP Distribution / Unit Yield Range Implied Unit Price AM at Mgmt.AM at WSC Low Median High Low Median High 2018E Distribution$1.72$1.718.4%6.1%5.6% Yield $20.34$28.06$30.83 Metric Multiple Range Implied Unit Price(5) AM at Mgmt.AM at WSC Low Median High Low Median High 2019E LP$2.74$2.717.1x11.4x13.3x $19.52$31.09$36.56 2020E LP$3.24$3.177.2x10.6x12.6x $23.26$34.24$40.67 Metric Multiple Range Implied Unit Price (5) AM at Mgmt.AM at WSC Low Median High Low Median High 2019E EBITDA$989$9318.1x10.6x11.8x $17.09$30.44$36.79 2020E EBITDA$1,222$1,1526.7x8.7x10.6x $18.10$31.53$43.46 Mean $5,766 $7,720 13% 21% 6.5% 6.6% 10.8x 9.8x 10.4x 8.7x 1.30x Median $4,119 $5,293 14% 28% 6.0% 6.1% 11.4x 10.6x 10.6x 8.7x 1.29x Low $1,288 $1,877 6% 0% 5.4% 5.6% 8.4x 7.2x 8.1x 6.7x 1.03x High $12,280 $16,466 20% 38% 8.4% 8.4% 13.3x 12.6x 11.8x 10.6x 2.00x E&P Sponsored Mean $5,643 $7,774 14% 18% 7.0% 7.1% 9.8x 9.0x 10.0x 8.1x 1.32x E&P Sponsored Median $1,643 $3,346 15% 12% 6.9% 7.0% 9.2x 8.5x 10.5x 8.1x 1.19x Other High - Growth MLP Mean $5,920 $7,653 13% 24% 5.8% 6.0% 12.1x 11.4x 10.9x 9.5x 1.28x Other High - Growth MLP Median $5,462 $7,018 13% 30% 5.5% 5.8% 11.8x 11.2x 10.6x 9.5x 1.32x AM at WSC (3,4) $29.44 $8,888 $10,283 28% 30% 5.3% 5.8% 10.9x 9.3x 11.0x 8.9x 1.24x AM at Mgmt. Estimates $29.44 $8,888 $10,283 29% 31% 5.3% 5.8% 10.7x 9.1x 10.4x 8.4x 1.28x E&P Spon. Western Gas Partners, L.P. $45.43 $12,280 $16,466 6% 35% 8.4% 8.4% 9.2x 9.2x 11.4x 10.3x 1.09x CNX Midstream Partners LP 19.47 1,404 1,877 15% 12% 6.9% 7.0% 8.4x 7.2x 8.1x 6.7x 1.29x HG & E&P Spon.(2)` Hess Midstream Partners LP 23.07 1,288 3,346 15% 2% 6.0% 6.1% 12.6x 11.5x 10.5x 7.7x 1.19x Noble Midstream Partners LP 39.28 1,643 2,811 20% 5% 5.4% 5.6% 9.6x 7.3x 9.7x 6.8x 2.00x EQT Midstream Partners LP 52.96 11,601 14,371 14% 35% 8.2% 8.3% 9.2x 7.9x 10.5x 8.7x 1.03x Other High Growth MLP Shell Midstream Partners LP 21.91 6,804 8,743 12% 28% 6.7% 6.8% 11.4x 10.8x 10.6x 8.5x 1.10x BP Midstream Partners LP 19.35 2,082 2,375 15% 0% 5.6% 5.7% 11.7x 10.6x 10.6x 8.9x 1.31x Valero Energy Partners LP 40.42 4,119 5,293 14% 32% 5.4% 5.6% 11.9x 11.5x 10.6x 10.6x 1.39x Phillips 66 Partners LP 52.99 10,675 14,200 10% 38% 5.4% 5.8% 13.3x 12.6x 11.8x 10.1x 1.33x M K L Enterprise Value / I J Price / G H LP Distribution / Unit / F E D C B A CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Precedents | MLP Transactions Analysis 8/24/18 Enbridge Inc. Spectra Energy Partners, LP 27,810 12.0x 26,945 11.6x 3,276 5.7% 0% Yes C-Corp Affiliate 6/19/18 Cheniere Energy Inc. Cheniere Energy Partners LP Holdings 5,651 10.7x 5,526 10.4x 1,240 2.2% 0% No C-Corp Affiliate 3/26/18 Tall Grass Energy GP, LP Tallgrass Energy Partners, LP 8,361 12.0x 8,083 11.6x 1,686 0.6% 0% Yes C-Corp Affiliate 1/2/18 Archrock, Inc Archrock Partners, LP 2,438 9.6x 2,358 9.3x 607 23.4% 0% Yes C-Corp Affiliate 5/18/17 Energy Transfer Partners, LP PennTex Midstream Partners, LP 963 12.6x 873 11.4x 280 20.1% 100% Yes MLP Affiliate 4/3/17 World Point Terminals, Inc. World Point Terminals, LP 594 9.1x 570 8.8x 159 5.8% 100% Yes C-Corp Affiliate 1/27/17 Enbridge Energy Company Midcoast Energy Partners, LP 1,176 11.4x 1,194 11.6x 170 (8.6%) 100% Yes C-Corp Affiliate 10/24/16 American Midstream Partners LP JP Energy Partners LP 476 8.6x 476 8.6x 302 9.1% 0% No MLP 3rd Party 5/30/16 SemGroup Corp. Rose Rock Midstream 2,034 12.0x 2,034 12.0x 771 0.0% 0% Yes C-Corp Affiliate 8/1/16 Transocean, Inc Transocean Partners 1,202 3.5x 1,153 3.3x 259 20.8% 0% No C-Corp Affiliate 7/13/15 MPLX LP MarkWest Energy Partners, LP 22,360 22.8x 22,360 22.8x 16,612 36.3% 8% No MLP 3rd Party 4/6/15 Tesoro Logistics LP QEP Midstream Partners LP 1,145 7.5x 1,104 7.2x 394 8.6% 0% No MLP Affiliate 10/26/14 Williams Partners LP Access Midstream Partners LP 34,256 10.5x 34,256 10.5x 21,944 (0.2%) 0% No MLP Affiliate 11/12/14 Enterprise Products Partners LP Oiltanking Partners LP 4,289 23.0x 4,243 22.8x 1,392 1.7% 0% No MLP Affiliate 8/10/14 Kinder Morgan Inc. El Paso Pipeline Partners 13,677 11.9x 13,193 11.4x 5,421 15.4% 12% Yes C-Corp Affiliate 10/10/13 Regency Energy Partners LP PVR Partners LP 5,659 13.5x 5,659 13.5x 3,931 25.7% 1% No MLP 3rd Party 5/6/13 Inergy Midstream LP Crestwood Midstream Partners LP 2,643 14.6x 2,643 14.6x 1,661 14.5% 4% No MLP 3rd Party 2/23/11 Enterprise Products Partners Duncan Energy Partners LP 3,282 9.5x 2,973 8.6x 1,006 28.1% 0% No MLP Affiliate Mean 12,092 9.8x 11,802 9.6x 4,240 9.7% 37% Affiliate 3rd Party Overall Source: Company filings, press releases, presentations and FactSet for pricing data. Represents precedent MLP transactions by affiliated and third party MLPs, Public GPs and C-Corps since 2011. Note: Considers transactions where target is an MLP. (1) (2) (3) (4) Based on Wall Street research. Non-adjusted transaction TEV values affiliated and non-affiliated units at offer price. Adjusted transaction TEV value affiliated units at market price and non-affiliated units at offer price. Illustrative transaction value for PF AMGP at Transaction includes conversion of Series B units, AM existing debt, and the purchase of AM units outstanding. Excludes transaction fees. AM public unitholder premium to Series B implied current XR of 1.789x. 13 AMGP Proposal C-Corp Buying MLP Median $4,375 10.6x $4,284 10.5x $1,078 8.8% 6% Median $4,289 10.6x $4,243 10.5x $1,240 8.6% 0% Mean 15,264 10.8x 15,056 10.5x 6,217 10.1% 25% Median $4,858 13.5x $4,858 13.5x $1,982 15.2% 4% Mean 5,653 14.0x 5,642 14.0x 3,831 18.7% 22% Median $4,573 11.2x $4,550 11.2x $1,674 11.9% 0% Mean 12,720 11.6x 12,564 11.4x 5,586 12.4% 24% (4) Premium to Current Antero Midstream GP LP Antero Midstream Partners LP $11,165 11.3x ---- --9.5% 11% Yes C-Corp Affiliate Premium to Series B Adjusted Antero Midstream GP LP (4)Antero Midstream Partners LP 11,165 11.3x ---- --2.5% 11% Yes C-Corp Affiliate 1/29/13 Kinder Morgan Energy Partners LP Copano Energy LLC 4,858 14.9x 4,858 14.9x 3,911 23.5% 0% No MLP 3rd Party 8/27/13 Plains All American LP PAA Natural Gas Storage LP 2,531 20.1x 2,434 19.4x 755 8.5% 0% No MLP Affiliate 7/24/14 Breitburn Energy Partners QR Energy LP 2,856 9.4x 2,856 9.4x 1,811 17.5% 19% No MLP 3rd Party 8/10/14 Kinder Morgan Inc. Kinder Morgan Energy Partners 52,566 8.8x 52,351 8.8x 27,351 12.0% 12% Yes C-Corp Affiliate 10/13/14 Targa Resources Partners LP Atlas Pipeline Partners LP 6,002 17.5x 6,002 17.5x 3,866 15.0% 3% No MLP 3rd Party 1/26/15 Energy Transfer Partners, LP Regency Energy Partners LP 18,593 11.0x 18,593 11.0x 11,276 13.2% 1% No MLP Affiliate 5/6/15 Crestwood Equity Partners, LP Crestwood Midstream Partners 6,920 11.9x 6,901 11.9x 3,381 17.2% 0% No MLP Affiliate 10/26/15 Western Refining, Inc. Northern Tier Energy 5,286 11.8x 5,185 11.5x 1,982 11.7% 65% Yes C-Corp 3rd Party 11/3/15 Targa Resources Corp. Targa Resources Partners LP 12,229 10.6x 12,138 10.5x 6,672 18.4% 0% Yes C-Corp Affiliate 9/26/16 Transcanada Columbia Pipeline Partners 3,464 4.9x 3,384 4.8x 915 11.1% 100% Yes C-Corp Affiliate 11/21/16 Sunoco Logistics Partners, LP Energy Transfer Partners, LP 54,455 9.7x 54,455 9.7x 21,965 (0.2%) 0% No MLP Affiliate 2/1/17 ONEOK, Inc ONEOK Partners, LP 23,654 12.0x 22,380 11.4x 9,309 25.8% 0% Yes C-Corp Affiliate 3/2/17 VTTI, B.V VTTI Energy Partners, LP 1,867 9.2x 1,842 9.1x 481 6.0% 100% Yes C-Corp Affiliate 8/29/17 Zenith Energy US, LP Arc Logistics Partners LP 736 12.9x 736 12.9x 407 15.2% 100% Yes MLP 3rd Party 2/7/18 Terra Nitrogen GP, Inc. Terra Nitrogen Co. LP 1,474 7.0x 1,432 6.8x $387 3.7% 100% Yes C-Corp Affiliate 5/17/18 Williams Companies Williams Partners, LP 57,793 12.6x 56,013 12.2x 10,427 6.4% 0% Yes C-Corp Affiliate 8/1/18 Energy Transfer Equity, L.P. Energy Transfer Partners 66,981 8.9x 66,915 8.9x 27,179 11.2% 0% No MLP Affiliate A B C D E F G H I J K L M Announcement Date Acquiror Target Transaction Value TEV / FY1 EBITDA(1,2) Adj. Transaction Value(1,3) Adj. TEV / FY1 EBITDA(1,3) Deal Value 1-Day Premium % Cash Taxable Transaction Buyer Type Transaction Type 9/18/18 Enbridge Inc. Enbridge Energy Partners $15,562 10.0x $15,541 10.0x $2,742 2.1% 0% Yes C-Corp Affiliate CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AM DCF Analysis | AR Valuation Effective Date: 12/31/2018 Base Volumes Case Discounted Levered DCF Analysis Levered DCF Attributable to AM LP Unitholders Discounted Distribution Analysis Distributions Attributable to LP Unitholders 9.0x 10.5x 12.0x 8.0% 7.0% 6.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Levered DCF Analysis Supplemental Calculation Detail Discounted Distribution Analysis Supplemental Calculation Detail LP DCF per Unit $2.74 $3.24 $3.75 $4.29 LP Distribution Per Unit $2.21 $2.85 $3.42 $4.10 Disc ount Fac tor 0.954 0.867 0.788 Disc ount Fac tor 0.954 0.867 0.788 PV of LP DCF per Unit $2.61 $2.81 $2.96 PV of LP Dist. per Unit $2.11 $2.47 $2.70 Terminal M ultiple 10.5x Terminal Yield 7.0% Terminal Disc . Fac tor 0.751 Terminal Disc . Fac tor 0.751 14 Source: Management projections and FactSet as of 10/3/2018. Implied Terminal Value per Unit$44.01 Implied Value per Unit$51.28 Implied Terminal Value per Unit$33.84 Implied Value per Unit$42.22 Disc . LP Dist. Total$7.28 Disc . LP DCF Total$8.38 2019E 2020E 2021E2022E 2019E 2020E 2021E2022E $48.17 $53.99 $61.73 $45.78 $51.28 $58.62 $43.55 $48.76 $55.71 Discount Rate $39.27 $44.38 $49.49 $37.39 $42.22 $47.06 $35.63 $40.21 $44.79 Discount Rate 2022E Distribution Y ield 2022E DCF Multiple CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AM Illustrative AR Base Volumes Case Discounted Future Value AM Status Quo $61.14 $54.01 $53.45 $47.68 $47.42 $46.94 $41.65 $40.94 $36.09 $29.44 2019E 2020E 2021E 15 Source: Management projections and FactSet as of 10/3/2018. Note: Valuation based on annual distributions. Assumptions Management projections Valuation date as of 12/31/18 Future share price calculated at FY1 annual distributions divided by yield Discounted to 12/31/18 at 10% cost of equity Interim distributions discounted upon receipt to 12/31/18 6.0% 7.0% 8.0% Current Unit Price Yield CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AM DCF Analysis | AR Downside Valuation Effective Date: 12/31/2018 Volumes Case Discounted Levered DCF Analysis Levered DCF Attributable to AM LP Unitholders Discounted Distribution Analysis Distributions Attributable to LP Unitholders 9.0x 10.5x 12.0x 8.0% 7.0% 6.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Levered DCF Analysis Supplemental Calculation Detail Discounted Distribution Analysis Supplemental Calculation Detail LP DCF per Unit $2.40 $3.02 $3.33 $3.76 LP Distribution Per Unit $2.15 $2.58 $2.97 $3.42 Disc ount Fac tor 0.954 0.867 0.788 Disc ount Fac tor 0.954 0.867 0.788 PV of LP DCF per Unit $2.29 $2.62 $2.63 PV of LP Dist. per Unit $2.05 $2.24 $2.34 Terminal M ultiple 10.5x Terminal Yield 7.0% Terminal Disc . Fac tor 0.751 Terminal Disc . Fac tor 0.751 16 Source: Management projections and FactSet as of 10/3/2018. Implied Terminal Value per Unit$36.71 Implied Value per Unit$43.33 Implied Terminal Value per Unit$29.67 Implied Value per Unit$37.21 Disc . LP Dist. Total$6.62 Disc . LP DCF Total$7.54 2019E 2020E 2021E2022E 2019E 2020E 2021E2022E $34.63 $39.11 $43.59 $32.97 $37.21 $41.45 $31.43 $35.44 $39.46 Discount Rate $40.75 $45.60 $52.06 $38.74 $43.33 $49.45 $36.87 $41.22 $47.02 Discount Rate 2022E DCF Multiple 2022E Distribution Y ield CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AM Illustrative AR Downside Volumes Case Discounted Future Value AM Status Quo $51.56 $47.21 $45.14 $43.06 $41.07 $40.32 $37.20 $36.48 $32.81 $29.44 2019E 2020E 2021E 17 Source: Management projections and FactSet as of 10/3/2018. Note: Valuation based on annual distributions. Assumptions Management projections Valuation date as of 12/31/18 Future share price calculated at FY1 annual distributions divided by yield Discounted to 12/31/18 at 10% cost of equity Interim distributions discounted upon receipt to 12/31/18 6.0% 7.0% 8.0% Current Unit Price Yield CONFIDENTIAL DRAFT SUBJECT TO CHANGE
SQ AM After Tax Distribution Discount Model CONFIDENTIAL DRAFT 7% Yield-Based Terminal Value | AR Base Volumes Case BT LP Distribution Per Unit AT LP Distribution Per Unit Discount Factor PV of LP Dist. per Unit $4.10 $4.09 0.717 $2.93 $2.21 0.954 $2.11 $2.85 0.867 $2.47 $3.41 0.788 $2.69 Terminal Yield 7.0% Tax Calculation: Average Purchase Price Existing RoC $26.64 ($6.15) Beginning Tax Basis $20.49 Beg. Avg. Tax Basis / Unit Less: Distributions / Unit Plus: Net Income Allocated $20.49 (2.21) (0.78) $17.50 (2.85) (0.66) $13.99 (3.42) (0.38) $10.19 (4.10) 0.05 Avg. EOY Basis / Unit $17.50 $13.99 $10.19 $6.14 Implied Terminal Value per Unit Less: Basis at YE 2022E Less: PAL at YE 2022E $58.57 ($6.14) ($3.96) Gain Subject to Tax $48.47 Capital Gain Ordinary Gain $29.53 $18.94 Total Tax on Gain per Unit Tax on Ordinary Gain - 33.4% Tax on Capital Gain - 23.8% State Tax on Ordinary Income - 5.2% State Tax on Capital Gain - 5.2% $6.33 7.03 0.98 1.53 Total Effective Tax Rate After-Tax Future Value per Unit Terminal Disc. Factor 32.7% $42.70 0.683 18 Source: Management projections and FactSet as of 10/3/2018. Note: Assumes Unit sold on 12/31/2022. Implied Present Value per Unit at 6% Terminal Yield $44.10 Implied Present Value per Unit at 7% Terminal Yield $39.36 Implied Present Value per Unit at 8% Terminal Yield $35.81 Total Tax on Gain $15.87 Total Gain $48.47 2019E 2020E 2021E 2022E Implied Terminal Future Value per Unit $58.57 Disc. LP Dist. Total $10.20 2019E 2020E 2021E 2022E SUBJECT TO CHANGE
SQ AM After Tax Distribution Discount Model CONFIDENTIAL DRAFT 7% Yield-Based Terminal Value | AR Downside Volumes Case BT LP Distribution Per Unit AT LP Distribution Per Unit Discount Factor PV of LP Dist. per Unit $3.42 $3.41 0.717 $2.44 $2.14 0.954 $2.05 $2.58 0.867 $2.24 $2.96 0.788 $2.34 Terminal Yield 7.0% Tax Calculation: Average Purchase Price Existing RoC $26.64 ($6.15) Beginning Tax Basis $20.49 Beg. Avg. Tax Basis / Unit Less: Distributions / Unit Plus: Net Income Allocated $20.49 (2.15) (0.78) $17.57 (2.58) (0.66) $14.32 (2.97) (0.38) $10.97 (3.42) 0.05 Avg. EOY Basis / Unit $17.57 $14.32 $10.97 $7.61 Implied Terminal Value per Unit Less: Basis at YE 2022E Less: PAL at YE 2022E $48.86 ($7.61) ($3.96) Gain Subject to Tax $37.29 Capital Gain Ordinary Gain $18.35 $18.94 Total Tax on Gain per Unit Tax on Ordinary Gain - 33.4% Tax on Capital Gain - 23.8% State Tax on Ordinary Income - 5.2% State Tax on Capital Gain - 5.2% $6.33 4.37 0.98 0.95 Total Effective Tax Rate After-Tax Future Value per Unit Terminal Disc. Factor 33.9% $36.23 0.683 19 Source: Management projections and FactSet as of 10/3/2018. Note: Assumes Unit sold on 12/31/2022. Implied Present Value per Unit at 6% Terminal Yield $37.75 Implied Present Value per Unit at 7% Terminal Yield $33.80 Implied Present Value per Unit at 8% Terminal Yield $30.84 Total Tax on Gain $12.63 Total Gain $37.29 2019E 2020E 2021E 2022E Implied Terminal Future Value per Unit $48.86 Disc. LP Dist. Total $9.06 2019E 2020E 2021E 2022E SUBJECT TO CHANGE
III. AMGP Financial Analysis 20 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AMGP Selected Comparable Company Analysis Unit Price at 10/3/2018 Total Entity Equity Value Total Entity TEV Implied GP Equity Value Implied GP TEV Price (Yield)( 1) GP EBITDA( 2) CAFD( 3) 2018E - 2022E Dist. CAGR Company Current 2018E 2019E 2020E 2019E 2020E EQT GP Holdings LP(6) $21.08 $6,376 $6,878 $5,221 $6,376 5.8% 5.7% 14.7x 12.1x 13.7x 11.8x 25.5% Western Gas Equity Partners, LP 31.97 7,000 8,242 4,722 6,998 7.3% 7.4% 14.7x 12.8x 12.4x 10.9x 11.0% CAFD With Series B Conversion Source: FactSet as of 10/3/2018 and Wall Street research. Note: Implied GP value calculated as the equity value of GP - equity value of the LP units held + net debt held by the GP. (1) (2) Total entity distribution yield calculated as GP distribution per unit / share over current GP unit / share price. Total entity enterprise value calculated as the equity value of GP + net debt held by the GP. GP EBITDA calculated as total distributions to the GP. For AMGP, EBITDA calculated as total distributions to IDR, LLC less Series B payments. Implied GP equity value calculated as GP share / unit price times GP shares outstanding. Cash available for distribution (CAFD) calculated as GP EBITDA less interest expense and maintenance capex. Antero Midstream Partners LP announced on February 26, 2018 that its Board of Directors had formed a special committee, in conjunction with the formation of special committees at both Antero Resources and Antero Midstream GP, to evaluate potential measures and transactions that could involve Antero Midstream. Implied share prices are calculated based on Management projections. EQGP Pro Forma for RMP acquisition announced April 2018. Total HoldCo Distributions with Series B Conversion calculated as HoldCo distributions with post-tax Series B payments added back in over (AMGP FD S/O + 17.3mm Series B converted units). (3) (4) (5) (6) (7) 21 Total HoldCo Distributions Yield Range Implied Total Entity Share Price(7) AMGP at Mgmt. Estimates AMGP at WSC Low Median High Low Median High 2018E Distribution $106 $105 7.4% 6.6% 5.7% Yield $7.00 $7.88 $9.00 Series B AMGP at Mgmt. Estimates AMGP at WSC Low Median High Low Median High 2019E $166 $177 12.4x 13.0x 13.7x $10.08 $10.57 $11.07 AMGP at Mgmt. Estimates AMGP at WSC Low Median High Low Median High With Series 2019E EBITDA $237 $237 14.7x 14.7x 14.7x B Conversion $16.98 $17.02 $17.06 Implied GP Share Price (5) Multiple Range Metric Implied Total Entity Share Price(5) Multiple Range Metric Series B Mean $6,688 $7,560 $4,971 $6,687 6.5% 6.6% 14.7x 12.5x 13.0x 11.3x 18.2% Median $6,688 $7,560 $4,971 $6,687 6.5% 6.6% 14.7x 12.5x 13.0x 11.3x 18.2% Low $6,376 $6,878 $4,722 $6,376 5.8% 5.7% 14.7x 12.1x 12.4x 10.9x 11.0% High $7,000 $8,242 $5,221 $6,998 7.3% 7.4% 14.7x 12.8x 13.7x 11.8x 25.5% AMGP at WSC(4) $17.58 $3,350 $3,350 $3,350 $3,345 2.8% 3.1% 20.3x 14.7x 20.3x 14.1x 58.2% AMGP at Mgmt Estimates $17.58 $3,350 $3,350 $3,350 $3,345 2.8% 3.1% 14.9x 9.9x 20.2x 13.4x 58.2% M K L Implied GP Equity Value / I J Total Entity Enterprise Value / G H Total Entity Distribution / Unit / F E D C B A CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AMGP DCF Analysis | AR Base Volumes Case AMGP with Series B Value Conversion | Valuation Effective Date: 12/31/2018 Discounted Levered DCF(1) Analysis Distributions Attributable to IDR, LLC | Before Series B Payments Discounted Distribution Analysis | Pre-Series B Payment AMGP Distributions | 1.0x Coverage | SQ AM Distribution Policy 12.0x 14.0x 16.0x 7.0% 6.0% 5.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Levered DCF(1) Analysis Supplemental Calculation Detail Discounted Distribution Analysis Supplemental Calculation Detail Adj. GP Dist. Per Share(2) Disc ount Fac tor HoldCo DCF $178 $270 $352 $449 $0.88 $1.33 $1.73 $2.21 Disc ount Fac tor 0.954 0.867 0.788 0.954 0.867 0.788 PV of GP FCF $170 $234 $277 PV of GP Dist. per Share $0.84 $1.15 $1.36 Terminal M ultiple 14.0x Terminal Yield 6.0% Terminal Disc . Fac tor 0.751 Terminal Disc . Fac tor 0.751 Less Net Debt / Corp. Adjustments (5) AM GP Shares O /S (Inc lusive of 17.354mm Series B Conversion Shares) 203.6 22 Source: Management projections and FactSet as of 10/3/2018. (1)AMGP discounted DCF defined as HoldCo DCF with Series B payments added back in. Discounted cost of equity at 10.0%. (2)Adj. GP distribution per share calculated as (AMGP DCF + Series B payment added back) / (fully diluted AMGP shares outstanding + 17.354mm converted Series B units). Implied Equity Value per Share $26.59 Implied Equity Value $5,413 Implied Terminal Value per Share $27.64 Implied Equity Value per Share $30.99 Implied Terminal Value Enterprise Value $5,408 Disc . Adj. Dist. Total $3.35 Disc . IDR Distribution Total $682 2019E 2020E 2021E 2022E 2019E 2020E 2021E 2022E $28.48 $32.66 $38.50 $27.04 $30.99 $36.52 $25.69 $29.44 $34.67 Discount Rate $24.50 $28.01 $31.51 $23.28 $26.59 $29.91 $22.13 $25.27 $28.41 Discount Rate 2022E Distribution Y ield 2022E CAFD Multiple CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AMGP Illustrative AR Base Volumes Case Discounted Future Value AMGP Status Quo $38.15 $32.35 $31.96 $28.21 $26.97 $26.15 $23.40 $21.93 $18.92 $17.58 2019E 2020E 2021E 23 Source: Management projections and FactSet as of 10/3/2018. Note: Valuation based on annual distributions. Net of Series B value. Assumptions Management projections Valuation date as of 12/31/18 Future share price calculated at FY1 annual distributions divided by yield Discounted to 12/31/18 at 10% cost of equity Interim distributions discounted upon receipt to 12/31/18 5% 6% 7% Current Share Price Yield CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AMGP DCF Analysis | AR Downside Volumes Case AMGP with Series B Value Conversion | Valuation Effective Date: 12/31/2018 Discounted Levered DCF(1) Analysis Distributions Attributable to IDR, LLC | Before Series B Payments Discounted Distribution Analysis | Pre-Series B Payment AMGP Distributions | 1.0x Coverage | SQ AM Distribution Policy 12.0x 14.0x 16.0x 7.0% 6.0% 5.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Levered DCF(1) Analysis Supplemental Calculation Detail Discounted Distribution Analysis Supplemental Calculation Detail Adj. GP Dist. Per Share(2) Disc ount Fac tor HoldCo DCF $169 $231 $287 $352 $0.83 $1.14 $1.41 $1.73 Disc ount Fac tor 0.954 0.867 0.788 0.954 0.867 0.788 PV of GP FCF $161 $201 $227 PV of GP Dist. per Share $0.79 $0.99 $1.11 Terminal M ultiple 14.0x Terminal Yield 6.0% Terminal Disc . Fac tor 0.751 Terminal Disc . Fac tor 0.751 Less Net Debt / Corp. Adjustments (5) AM GP Shares O /S (Inc lusive of 17.354mm Series B Conversion Shares) 203.6 24 Source: Management projections and FactSet as of 10/3/2018. (1)AMGP discounted IDR distribution defined as HoldCo DCF with Series B payments added back in. Discounted cost of equity at 10.0%. (2)Adj. GP distribution per share calculated as (AMGP DCF + Series B payment added back) / (fully diluted AMGP shares outstanding + 17.354mm converted Series B units). Implied Equity Value per Share $21.10 Implied Equity Value $4,295 Implied Terminal Value per Share $21.64 Implied Equity Value per Share $24.53 Implied Terminal Value Enterprise Value $4,289 Disc . Adj. Dist. Total $2.89 Disc . IDR Distribution Total $589 2019E 2020E 2021E 2022E 2019E 2020E 2021E 2022E $22.58 $25.85 $30.42 $21.44 $24.53 $28.86 $20.38 $23.31 $27.41 Discount Rate $19.47 $22.21 $24.96 $18.50 $21.10 $23.70 $17.60 $20.06 $22.52 Discount Rate 2022E Distribution Y ield 2022E CAFD Multiple CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AMGP Illustrative AR Downside Volumes Case Discounted Future Value AMGP Status Quo $30.14 $26.26 $25.60 $22.48 $22.36 $22.18 $19.27 $18.87 $16.29 $17.58 2019E 2020E 2021E 25 Source: Management projections and FactSet as of 10/3/2018. Note: Valuation based on annual distributions. Net of Series B value. Assumptions Management projections Valuation date as of 12/31/18 Future share price calculated at FY1 annual distributions divided by yield Discounted to 12/31/18 at 10% cost of equity Interim distributions discounted upon receipt to 12/31/18 5% 6% 7% Current Share Price Yield CONFIDENTIAL DRAFT SUBJECT TO CHANGE
IV. Analysis of Transaction 26 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Analysis of Transaction ($ in millions, unless otherwise noted) AMGP 20-Day VWAP(1) $17.22 $17.58 $29.44 AMGP Market Price AM Market Price AM - Public Unitholders Equity XR Cash (Excl. Special Distribution) - $3.00 1.635x 0.174x 1.809x 0.024x (2) Equity + Cash (Excl. Special Distribution) XR Special Distribution ($) - $0.415 (2) All-In XR 1.833x Market Exchange Ratio Premium /(Discount) Market Exchange Ratio - Series B Adjusted Premium /(Discount) 1.675x 9.5% 1.789x 2.5% AM - AR Units Equity XR Cash (Excl. Special Distribution) Equity + Cash (Excl. Special Distribution) XR Special Distribution ($) 1.602x $3.00 1.777x - All-In XR 1.777x Implied Market Value Premium to Current AM Unit Price $31.17 5.9% 27 Source: Company filings, and FactSet as of 10/3/2018. (1)VWAP calculated as follows ((Sum of Daily VWAP)*(Sum of Daily Traded Value)) / (Sum of Daily Traded Value). (2)All cash adjustments to XR calculations utilize 20-day VWAP AMGP pricing. Implied Market Value $32.16 Premium to Current AM Unit Price 9.2% AMGP Proposal - X R Calculations CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Analysis of Transaction ($ in millions, unless otherwise noted) Comparable Metrics Trading Median Transaction Median (NTM) 10.6x 8.7x 11.2x 11.4x 10.6x 6.0% Trading Median Transaction Median (NTM) 10.6x 8.7x 11.2x 11.4x 10.6x 6.0% Source: Company filings, and FactSet as for 10/3/2018. 28 (1) (2) (3) Includes Series B units exchanged for 17.354mm AMGP shares DCF attributable to the LP unitholders. DCF multiples based on total all-in implied equity consideration for AM public and AR. Each Public AM Common Unit to receive: 1.6350 AMGP shares, $3.00 Cash, and $0.415 special cash distribution. For each common unit held, AR to receive: 1.6023 AMGP shares and $3.00 Cash. Volumes Case AR Downside AR Base Case E D C At AMGP Proposal(3) All-in Exchange Ratio to AR (At Current AMGP Sh. Price of $17.58) 1.7765x Premium to Implied AM Unit Price to AR (AMGP Share Price x All-in XR) 6.1% Implied AM Unit Price to AR $31.23 Fully Diluted AM Units Outstanding Owned by AR 98.9 Implied Fully-Diluted AM Equity Value Owned by AR $3,088 All-in Exchange Ratio to Public (At Current AMGP Sh. Price of $17.58) 1.8333x Premium to Implied AM Unit Price to Public (AMGP Share Price x All-in XR) 9.5% Implied AM Unit Price to Public $32.23 Fully Diluted AM Units Outstanding Owned by Public 89.2 Implied Fully-Diluted AM Equity Value Owned by Public $2,876 Total Implied Fully-Diluted AM Equity Value $5,964 AM Net Debt / (Cash) AMGP Net Debt / (Cash) Implied AMGP Equity Value(1) 1,628 ($5) $3,579 Implied AM Enterprise Value $11,165 AM Multiples: Statistic 2019E EBITDA $989 2020E EBITDA $1,222 2019E DCF(2) $515 2020E DCF(2) $609 Current Yield to Public $1.66 AM Statistic 2019E EBITDA $851 2020E EBITDA $1,105 2019E DCF(2) $451 2020E DCF(2) $568 Current Yield to Public $1.66 11.3x 9.1x 11.6x 9.8x 5.2% 13.1x 10.1x 13.2x 10.5x 5.2% B A CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Contribution Analysis | AR Base Case AMGP DCF Contribution Based On Actual Forecasted Taxes (Including on Series B Cash Flow) Contribution Analysis Implied Ownership Implied Exchange Ratio | Series B Adjusted(1,2) AM AMGP 2017A DCF 2017A DCF 2018E DCF 2018E DCF 2019E DCF 2019E DCF 2020E DCF 2020E DCF 2021E DCF 2021E DCF 2022E DCF 2022E DCF 2017A Distributions 2017A Distributions 5.334x 2018E Distributions 2018E Distributions 2019E Distributions 2019E Distributions 2020E Distributions 2020E Distributions 2021E Distributions 2021E Distributions 2022E Distributions 2022E Distributions Source: Management projections. FactSet as of 10/3/2018. Note: AM DCF calculated as LP Interest in EBITDA less interest expense, maintenance capex, and tax withholding reimbursements paid to AR. AMGP DCF calculated as IDR DCF from AM to IDR LLC less G&A and cash taxes plus post-tax Series B payments. Note: AM distributions calculated as distributions attributable to LP unitholders. AMGP distributions defined as distributions attributable to IDR, LLC less taxes paid on full distributions available to IDR, LLC less G&A. Note: Cash tax shield from Series B depreciation of ~$6mm per year. (1)Implied exchange ratios utilize adjusted AMGP share count of fully diluted AMGP shares outstanding + 17.354mm converted Series B units. (2)Transaction: 1.6350x XR and $3.415 cash consideration / unit. 29 76.0% 24.0% 70.4% 29.6% 66.6% 33.4% 65.7% 34.3% 64.9% 35.1% 64.5% 35.5% 82.9% 17.1% 75.9% 24.1% 71.4% 28.6% 68.2% 31.8% 66.5% 33.5% 65.2% 34.8% At Transaction: 1.8333x 3.175x 2.380x 1.992x 1.920x 1.851x 1.813x 3.147x 2.493x 2.146x 1.987x 1.872x CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Contribution Analysis | AR Downside Volumes Case AMGP DCF Contribution Based On Actual Forecasted Taxes (Including on Series B Cash Flow) Contribution Analysis Implied Ownership Implied Exchange Ratio | Series B Adjusted(1,2) AM AMGP 2017A DCF 2017A DCF 2018E DCF 2018E DCF 2019E DCF 2019E DCF 2020E DCF 2020E DCF 1.949x 2021E DCF 2021E DCF 2022E DCF 2022E DCF 2017A Distributions 2017A Distributions 5.334x 2018E Distributions 2018E Distributions 2019E Distributions 2019E Distributions 2020E Distributions 2020E Distributions 2021E Distributions 2021E Distributions 2022E Distributions 2022E Distributions Source: Management projections. FactSet as of 10/3/2018. Note: AM DCF calculated as LP Interest in EBITDA less interest expense, maintenance capex, and tax withholding reimbursements paid to AR. AMGP DCF calculated as IDR DCF from AM to IDR LLC less G&A and cash taxes plus post-tax Series B payments. Note: AM distributions calculated as distributions attributable to LP unitholders. AMGP distributions defined as distributions attributable to IDR, LLC less taxes paid on full distributions available to IDR, LLC less G&A. Note: Cash tax shield from Series B depreciation of ~$6mm per year. (1)Implied exchange ratios utilize adjusted AMGP share count of fully diluted AMGP shares outstanding + 17.354mm converted Series B units. (2)At Transaction: 1.6350x XR and $3.415 cash consideration / unit. 30 76.0% 24.0% 70.5% 29.5% 69.0% 31.0% 66.1% 33.9% 65.6% 34.4% 64.9% 35.1% 82.9% 17.1% 75.9% 24.1% 71.8% 28.2% 69.3% 30.7% 67.8% 32.2% 66.5% 33.5% At Transaction: 1.8333x 3.175x 2.385x 2.229x 1.909x 1.847x 3.147x 2.549x 2.260x 2.105x 1.987x CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Contribution Analysis | AR Base Case AMGP DCF Contribution Based On Theoretical Taxes On All Distributable Cash Flow Contribution Analysis Implied Ownership Implied Exchange Ratio | Series B Adjusted(1,2) AM AMGP 2017A DCF 2017A DCF 2018E DCF 2018E DCF 2019E DCF 2019E DCF 2020E DCF 2020E DCF 2021E DCF 2021E DCF 2022E DCF 2022E DCF 2017A Distributions 2017A Distributions 5.334x 2018 Distributions 2018 Distributions 2019 Distributions 2019 Distributions 2020 Distributions 2020 Distributions 2021 Distributions 2021 Distributions 2022 Distributions 2022 Distributions Source: Management projections. FactSet as of 10/3/2018. Note: AM DCF calculated as LP Interest in EBITDA less interest expense, maintenance capex, and tax withholding reimbursements paid to AR. AMGP DCF calculated as IDR DCF less taxes on total IDR DCF less G&A expenses. AMGP distributions defined as distributions attributable to IDR, LLC less taxes paid on full distributions available to IDR, LLC less G&A. Note: Cash tax shield from Series B depreciation of ~$6mm per year. (1)Implied exchange ratios utilize adjusted AMGP share count of fully diluted AMGP shares outstanding + 17.354mm converted Series B units. (2)At Transaction: 1.6350x XR and $3.415 cash consideration / unit. 31 78.5% 21.5% 72.4% 27.6% 68.6% 31.4% 67.0% 33.0% 65.8% 34.2% 64.9% 35.1% 82.9% 17.1% 75.9% 24.1% 71.4% 28.6% 68.2% 31.8% 66.5% 33.5% 65.2% 34.8% At Transaction: 1.8333x 3.649x 2.627x 2.189x 2.029x 1.924x 1.848x 3.147x 2.493x 2.146x 1.987x 1.872x CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Contribution Analysis | AR Downside Volumes Case AMGP DCF Contribution Based On Theoretical Taxes On All Distributable Cash Flow Contribution Analysis Implied Ownership Implied Exchange Ratio | Series B Adjusted(1,2) AM AMGP 2017A DCF 2017A DCF 2018E DCF 2018E DCF 2019E DCF 2019E DCF 2020E DCF 2020E DCF 2021E DCF 2021E DCF 2022E DCF 2022E DCF 2017A Distributions 2017A Distributions 5.334x 2018 Distributions 2018 Distributions 2019 Distributions 2019 Distributions 2020 Distributions 2020 Distributions 2021 Distributions 2021 Distributions 2022 Distributions 2022 Distributions Source: Management projections. FactSet as of 10/3/2018. Note: AM DCF calculated as LP Interest in EBITDA less interest expense, maintenance capex, and tax withholding reimbursements paid to AR. AMGP DCF calculated as IDR DCF less taxes on total IDR DCF less G&A expenses. AMGP distributions defined as distributions attributable to IDR, LLC less taxes paid on full distributions available to IDR, LLC less G&A. Note: Cash tax shield from Series B depreciation of ~$6mm per year. (1)Implied exchange ratios utilize adjusted AMGP share count of fully diluted AMGP shares outstanding + 17.354mm converted Series B units. (2)At Transaction: 1.6350x XR and $3.415 cash consideration / unit. 32 78.5% 21.5% 72.5% 27.5% 70.2% 29.8% 67.6% 32.4% 66.7% 33.3% 65.8% 34.2% 82.9% 17.1% 75.9% 24.1% 71.8% 28.2% 69.3% 30.7% 67.8% 32.2% 66.5% 33.5% At Transaction: 1.8333x 3.649x 2.631x 2.359x 2.089x 2.007x 1.922x 3.147x 2.549x 2.260x 2.105x 1.987x CONFIDENTIAL DRAFT SUBJECT TO CHANGE
(1) Implied Exchange AM & AMGP Ratios AR Base Volumes Case 8.0% 1.584x 2.019x 8.0% 1.653x 2.167x 1.780x 1.690x 10.0% 1.588x 2.022x 10.0% 1.655x 2.168x 1.741x 1.652x 12.0% 1.591x 2.024x 12.0% 1.657x 2.168x 1.690x 1.603x AR Downside Volumes Case 8.0% 1.760x 2.239x 8.0% 1.764x 2.306x 1.893x 1.804x 10.0% 1.764x 2.240x 10.0% 1.766x 2.306x 1.852x 1.763x 12.0% 1.767x 2.242x 12.0% 1.768x 2.306x 1.798x 1.710x Source: Management projections. FactSet as of 10/3/2018. 33 Note: AM distributable cash flow defined as distributable cash flow attributable to AM LP unitholders. AMGP distributable cash flow defined as HoldCo DCF with pre-tax Series B payments added back in. AMGP share values based on Shares Outstanding including 17.354mm additional shares from Series B conversion. (1)Low AM to high AMGP and high AM to low AMGP implied unit and share prices compared to assess full range of potential exchange ratios. 2.014x 1.972x 1.915x 1.340x 1.342x 1.345x 1.387x 1.391x 1.396x Low Mid High Discount Rate Discount Rate YE 2019 YE 2020 YE 2021 Low MedHigh Low MedHigh Implied XR Implied XR PV of FSP at 10% Discount Rate PV of Future Share Price Discounted Distribution Approach Discounted Levered DCF Approach 1.907x 1.867x 1.813x 1.251x 1.254x 1.256x 1.246x 1.250x 1.254x Low Mid High Discount Rate Discount Rate YE 2019 YE 2020 YE 2021 Low MedHigh Low MedHigh PV of FSP at 10% Discount Rate Implied XR Implied XR PV of Future Share Price Discounted Distribution Approach Discounted Levered DCF Approach At Transaction: 1.8333x CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Premiums Paid Analysis | MLP Transactions 8/24/18 Spectra Energy Partners, LP Enbridge Inc. 27,810 5.7% 19.4% 5/17/18 Yes (0.3%) 0.6% 6/19/18 Cheniere Energy Partners LP Holdings Cheniere Energy Inc. 5,651 2.2% 10.7% 5/16/18 No (3.5%) 9.4% 3/26/18 Tallgrass Energy Partners, LP Tall Grass Energy GP, LP 8,361 0.6% (18.4%) 2/7/18 Yes 40.3% 21.7% 1/2/18 Archrock Partners, LP Archrock, Inc 2,438 23.4% 23.4% NA Yes 27.1% 5.6% 5/18/17 PennTex Midstream Partners, LP Energy Transfer Partners, LP 963 20.1% 17.8% 10/24/16 Yes 0.6% (4.4%) 4/3/17 World Point Terminals, LP World Point Terminals, Inc. 594 5.8% 5.8% NA Yes N/A (10.1%) 1/27/17 Midcoast Energy Partners, LP Enbridge Energy Company 1,176 (8.6%) (8.6%) NA Yes (19.1%) (14.4%) 10/24/16 JP Energy Partners LP American Midstream Partners 476 9.1% 9.1% NA No (60.9%) (7.5%) 8/1/16 Transocean Partners LLC Transocean Inc. 1,202 20.8% 20.8% NA No 14.3% (8.4%) 11/3/15 Targa Resources Partners LP Targa Resources Corp. 12,229 18.4% 18.4% NA Yes (7.3%) (13.0%) 7/13/15 MarkWest Energy Partners, LP MPLX LP 22,360 36.3% 36.3% NA No (44.8%) (27.4%) 4/6/15 QEP Midstream Partners LP Tesoro Logistics LP 1,145 8.6% (14.0%) 10/18/14 No (7.7%) (32.5%) 10/26/14 Access Midstream Partners LP Williams Partners LP 34,256 (0.2%) (5.7%) 6/13/14 No (17.3%) (43.3%) 11/12/14 Oiltanking Partners LP Enterprise Products Partners LP 4,289 1.7% (0.9%) 9/30/14 No (21.5%) (41.9%) 8/10/14 El Paso Pipeline Partners Kinder Morgan Inc. 13,677 15.4% 15.4% NA Yes (49.7%) (41.7%) 10/10/13 PVR Partners LP Regency Energy Partners LP 5,659 25.7% 25.7% NA No N/A (33.9%) 5/6/13 Crestwood Midstream Partners LP Inergy Midstream LP 2,643 14.5% 14.5% NA No N/A (35.7%) 2/23/11 Duncan Energy Partners LP Enterprise Products Partners 3,282 28.1% 28.1% NA No 35.5% (22.8%) 34 Source: Company filings, press releases, presentations and FactSet for pricing data. Represents precedent MLP transactions by affiliated and third party MLPs, Public GPs and C-Corps since 2011. Note: Considers transactions where target is an MLP. Unaffected 1-Day premium for transaction as of 2/23/2018, prior to Special Committee formation announcement. Median 11.5% 12.6% Mean 11.9% 18.3% Taxable Transactions Median 6.2% 13.6% Taxable Transactions Mean 9.5% 10.3% At Transaction Premium to Current 9.5% 32.8% Premium to Series B Adjusted 2.5% 24.7% 1/29/13 Copano Energy LLC Kinder Morgan Energy Partners LP 4,858 23.5% 23.5% NA No N/A (32.0%) 8/27/13 PAA Natural Gas Storage LP Plains All American LP 2,531 8.5% 8.5% NA No (47.2%) (34.2%) 7/24/14 QR Energy LP Breitburn Energy Partners 2,856 17.5% 17.5% NA No N/A (44.8%) 8/10/14 Kinder Morgan Energy Partners Kinder Morgan Inc. 52,566 12.0% 12.0% NA Yes (49.7%) (41.7%) 10/13/14 Atlas Pipeline Partners LP Targa Resources Partners LP 6,002 15.0% 15.0% NA No N/A (40.5%) 1/26/15 Regency Energy Partners LP Energy Transfer Partners, LP 18,593 13.2% 13.2% NA No N/A (35.7%) 5/6/15 Crestwood Midstream Partners Crestwood Equity Partners, LP 6,920 17.2% 17.2% NA No (44.3%) (35.7%) 10/26/15 Northern Tier Energy Western Refining, Inc. 5,286 11.7% 11.7% NA Yes N/A (10.3%) 5/30/16 Rose Rock Midstream SemGroup Corp. 2,034 0.0% 0.0% NA Yes (12.2%) (3.7%) 9/26/16 Transcanada Columbia Pipeline Partners LP 3,464 11.1% 9.9% 3/16/16 Yes (7.8%) (7.1%) 11/21/16 Energy Transfer Partners, LP Sunoco Logistics Partners, LP 54,455 (0.2%) (0.2%) NA No (12.2%) (3.9%) 2/1/17 ONEOK Partners, LP ONEOK, Inc 23,654 25.8% 25.8% NA Yes 25.0% (11.9%) 3/2/17 VTTI Energy Partners, LP VTTI, B.V 1,867 6.0% 6.0% NA Yes N/A (12.2%) 8/29/17 Arc Logistics Partners LP Zenith Energy US, LP 736 15.2% 15.2% NA Yes N/A 6.4% 2/7/18 Terra Nitrogen Co. LP Terra Nitrogen GP, Inc. 1,474 3.7% 3.7% NA Yes N/A 3.0% 5/17/18 Williams Partners, LP Williams Companies 57,793 6.4% 16.5% 3/15/18 Yes 16.1% 9.5% 8/1/18 Energy Transfer Partners, LP Energy Transfer Equity, L.P. 66,981 11.2% 11.2% NA No (0.5%) 4.2% Premium A B C D E F G H I J Announcement Date Target Acquiror Transaction Value 1-Day Premium Unaffected 1-Day Premium Unaffected Date Taxable Transaction Acquiror Performance Since Day Prior to Announcement AMZ Performance Since Day Prior to Announcement 9/18/18 Enbridge Energy Partners Enbridge Inc. $15,562 2.1% 11.6% 5/17/18 Yes 4.7% 4.4% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
V. Pro Forma Impact for Transaction 35 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Transaction Assumptions | Pre-Unitholder Tax Transaction Assumptions Sources & Uses At Proposed Transaction Transaction effective on 12/31/2018 To acquire AM, AMGP will convert into a C-Corp in a 100% stock transaction Base case assumes: (1) AMGP Equity Issued $5,655 1,628 626 Purchase Non-Affiliated AM Units O/S Purchase Affiliated AM Units O/S Conversion of Series B Units Cash Consideration - Affiliated Units Cash Consideration - Non-Affiliated Units Transaction Fees(2) AM Existing Debt $2,565 $2,785 305 297 305 24 1,628 Each outstanding Public AM common unit exchanged for 1.6350 AMGP shares and $3.415 cash per AM unit, for an all-equity equivalent exchange ratio of 1.8333x Each outstanding AM common unit held at AR will be exchanged for 1.6023 AMGP shares and $3.00 cash per AM unit, for an all-equity equivalent exchange ratio of 1.7765x All existing Series B units exchanged for 17.354mm AMGP shares AM Debt Rolled to AMGP Balance Sheet Revolver Draw Assumes Company provided pf coverage ratio to drive pf dividend policy Step-up depreciation due to Capex allocated on a 5-20 year MACRs schedule depending on capex category Goodwill based on inside tax basis and 704(c) and 743(b) extrapolation provided by PwC $650mm refinancing of revolver debt with 5.5% term loan issued on 12/31/2018 New capex financed by $500mm senior unsecured issuance in 2018, 2019, 2020, and 2022 at a 5.000% interest rate AMGP Ownership Comparison Series B Conversion AMGP Proposal At Transaction Proposed At Current AMGP SQ Units Outstanding 186.2 186.2 AR Implied XR 1.6023x AM Implied XR 1.6350x Existing Public 15.0% AMGP Common Units Issued - 304.3 Prior AM Public 28.7% Pre-Series B Fully Diluted Post-Transaction Share Count 186.2 490.5 Mgmt. 7.7% 20-Day AMGP VW AP as of 10/03/2018 $17.22 $17.22 Sponsors 38.0% Existing Public 40.9% Series B 3.4% Impled Pre-Series Market Cap ($mm) $3,207 $8,447 Series B Valuation Threshold ($mm) $2,000 NA Sponsors 13.9% Series B Conversion Rate 6.00% NA AR 31.2% Impled Post-Series Market Cap ($mm) $3,279 $8,746 Mgmt. 21.1% % Shares Issued to AM % AMGP Shares Oustanding % Class B Shares Outstanding --97.8% 2.2% 59.9% 36.7% 3.4% Source: FactSet as of 10/3/2018. (1) Includes equity issued for Series B unit conversion into AMGP shares. (2) Provided by Management. 36 3.4% Series B share under Transaction Implied Series B Valuation $72 $299 Post-Series B Fully Diluted Post-Transaction Share Count 190.4 507.9 AMGP Shares Issued for Series B Conversion 4.204 17.354 Pro Forma Status Quo Total Uses$7,908 Total Sources$7,908 Uses Sources CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Exchange Ratio Calculation Detail I Gross Cash Consideration (W Special Dividend) Cash Component Secondary Shares Equity Component XR Net Excess Cash Consideration Equity Component XR Net After-Tax XR All-In XR Taxes Payable (1) (2) XR Purchased Transaction 37 Source: Company filings, FactSet as of 10/3/2018. (1)Based on AMGP 20-day VWAP price. (2)Based on AMGP share price of $17.58 as of 10/3/2018 At $3.4151.6350x0.1983x1.8333x($2.96)$0.451.6350x0.0259x1.6609x H G F E D C B A CONFIDENTIAL DRAFT SUBJECT TO CHANGE
xes Payable ($2.96) SUBJECT TO CHANGE et C a sh Consideration $0.45 Sec ondary Shares Purc hased 0.0259x AM Distributable Cash Flow Accretion / (Dilution) - % AMGP Distributable Cash Flow Accretion / (Dilution) - % At 1.0x AM Coverage At 1.8333x Exchange Ratio 1.8333x XR (1) (2) 1.6609x XR 29.8% 20.2% 19.7% 17.4% 16.6% 12.4% 15.8% 23.6% 9.5% 12.4% 21.6% 17.3% 6.3% 8.9% 5.7% 8.5% 1.8% (0.8%) 4.9% 2 1.8%8E H 201 2019E 2020E 2021E $3.14 $3.30 2021E 2022E $3.65 $3.96 2019E 2020E $1.07 $0.94 $2.65 $2.69 2019E 2020E 2021E 2022E Pro Forma AMGP: $1.63 $1.98 $2.38 $2.74 AM Distribution Accretion / (Dilution) - % At 1.8333x Exchange Ratio AMGP Distribution Accretion / (Dilution) - % 0.3% 0.2% 0.2% 0.2% 35.4% (9.3%) (9.2%) (9.2%) (9.1%) 15.8% 6.8% 2019E 2020E 2021E 2022E 0.5% 2019E 2020E 2021E 2022E (1) Pro Forma AMGP at 1.6609x: Pro Forma AMGP at 1.8333x: $2.01 $2.21 $2.59 $2.86 $3.10 $3.43 $3.73 $4.11 Pro Forma AMGP: $1.21 $1.56 $1.87 $2.24 PF AMGP Coverage: 1.355x 1.275x 1.276x 1.225x 38 Source: Management projections and FactSet as of 10/3/2018. (1)Pre Unitholder Tax; 1.8333x represents implied XR at 1.6350x equity XR and cash consideration of $3.415 / unit. Cash assumed to be used to purchase additional secondary shares. (2)Post - Unitholder Tax; 1.6609x represents implied XR at 1.6350x equity XR; cash used to pay taxes, with any excess cash assumed to be used to purchase additional secondary shares. SQ AM Coverage:1.305x 1.164x 1.112x 1.052x Status Quo AMGP:$0.89 $1.35 $1.75 $2.23 $ Acc / (Dil):$0.32 $0.21 $0.12 $0.01 PF AMGP Coverage:1.355x 1.275x 1.276x 1.225x Status Quo AM:$2.21 $2.85 $3.42 $4.10 (2) $ Acc / (Dil):($0.20) ($0.26) ($0.32) ($0.37) $ Acc / (Dil):$0.00 $0.01 $0.01 $0.01 Status Quo AMGP: $1.26 $1.60 $1.96 $2.33 $ Acc / (Dil):$0.37 $0.38 $0.42 $0.40 Status Quo AM:$2.74 $1.04 $3.24 $2.97 $3.75$3.64 $4$.42.937 PF AMGP at 1.6609x: $2.72 ($0.13) $3.30 $0.05 $3.96$0.15 $4$.05.631 PF AMGP at 1.8333x: $3.00 ($0.04) $3.64 $0.33 $4.37$0.50 $5$.00.472 $ Acc / (Dil):($0.02) $0.06 $0.21 $0.27 $ Acc / (Dil):$0.26 $0.40 $0.62 $0.75 Accretion / (Dilution) Pre Unitholder Tax(1,2) | AM & AMGP | AR Base Case All-In XR 1.8333x Gr Ta N oss CCasOh CNonFsIidDerEatNioTn IAL DRAF$3T.415 XR Equity Component 1.6350x Net After-Tax XR 1.6609x CONFIDENTIAL DRAFT SUBJECT TO CHANGE
PV Distribution Analysis | AR Base Case SQ AM Distribution/Unit PF AMGP Dividend/Share at Mgmt. Coverage PF AMGP Dividend at 1.6350x X R $2.21 $1.21 $1.97 $2.85 $1.56 $2.55 $3.42 $1.87 $3.06 $4.10 $2.24 $3.67 $0.42 PV Factor 1.00 0.95 0.87 0.79 0.72 SQ AM Distribution/Unit PF AMGP Dividend/Share at Mgmt. Coverage PF AMGP Dividend at 1.6464x X R $2.21 $1.21 $1.99 $2.85 $1.56 $2.56 $3.42 $1.87 $3.08 $4.10 $2.24 $3.69 $0.42 PV Factor 1.00 0.95 0.87 0.79 0.72 39 Source: Management, FactSet as of 10/3/2018. Note: Discount Factor based on 10% Cost of Equity. I mplied PF AMGP Present Value per Share$0.42 ($0.21) ($0.25) ($0.27) ($0.29) Cumulative PF AMGP Present Value per Share$0.42 $0.20 ($0.04) ($0.31) ($0.61) Net PF/SQ Distribution Cash Flows$0.42 ($0.22) ($0.29) ($0.34) ($0.41) 2019E2020E2021E2022E I mplied PF AMGP Present Value per Share$0.42 ($0.22) ($0.26) ($0.29) ($0.31) Cumulative PF AMGP Present Value per Share$0.42 $0.19($0.07)($0.36)($0.67) Net PF/SQ Distribution Cash Flows$0.42($0.24)($0.30) ($0.36) ($0.43) 2019E2020E2021E2022E CONFIDENTIAL DRAFT SUBJECT TO CHANGE
oss CCasOh CNonFsIidDerEatNioTn IAL DRAF$3T.415 et Cash Consideration $0.45 Sec ondary Shares Purc hased 0.0259x AM Distributable Cash Flow Accretion / (Dilution) - % AMGP Distributable Cash Flow Accretion / (Dilution) - % At 1.0x AM Coverage 35.3% At 1.8333x Exchange Ratio 1.8333x XR (1) (2) 1.6609x XR 20.2% 14.7% 19.7% 14.2% 10.8% 15.8% 25.3% 12.4% 24.3% 5.7% 19.5% 3.89.9%% 3.4%8.5% 0.4% 4.9% (4.2%) 2 1.8%8E H 201 2019E 2020E 2021E $3.14 $3.30 2021E 2022E $3.65 $3.96 2019E 2020E $1.07 $0.94 $2.65 $2.69 2019E 2020E 2021E 2022E Pro Forma AMGP: $1.38 $1.82 $2.07 $2.34 AM Distribution Accretion / (Dilution) - % At 1.8333x Exchange Ratio AMGP Distribution Accretion / (Dilution) - % 2.3% 1.9% 1.9% (1.7%) 36.0% (7.3%) (7.7%) (7.7%) 24.8% (11.0%) 15.3% 8.6% 2019E 2020E 2021E 2022E 2019E 2020E 2021E 2022E Pro Forma AMGP at 1.6609x: Pro Forma AMGP at 1.8333x: $1.91 $2.11 $2.39 $2.64 $2.74 $3.02 $3.16 $3.48 Pro Forma AMGP: $1.15 $1.44 $1.65 $1.90 40 Source: Management projections and FactSet as of 10/3/2018. (1)Pre Unitholder Tax; 1.8333x represents implied XR at 1.6350x equity XR and cash consideration of $3.415 / unit. Cash assumed to be used to purchase additional secondary shares. (2)Post - Unitholder Tax; 1.6609x represents implied XR at 1.6350x equity XR; cash used to pay taxes, with any excess cash assumed to be used to purchase additional secondary shares. SQ AM Coverage:1.152x 1.210x 1.145x 1.116x PF AMGP Coverage:1.203x 1.269x 1.258x 1.238x Status Quo AMGP:$0.85 $1.15 $1.43 $1.75 $ Acc / (Dil):$0.30 $0.29 $0.22 $0.15 PF AMGP Coverage:1.203x 1.269x 1.258x 1.238x Status Quo AM:(1)$2.15 $2.58 $2.97 $3.42 (2) $ Acc / (Dil):($0.24) ($0.19) ($0.23) ($0.26) $ Acc / (Dil):($0.04) $0.06 $0.05 $0.06 Status Quo AMGP: $1.02 $1.45 $1.66 $1.96 $ Acc / (Dil):$0.36 $0.37 $0.40 $0.38 Status Quo AM:$2.40 $1.04 $3.02 $2.97 $3.33$3.64 $3$.47.637 PF AMGP at 1.6609x: $2.30 ($0.13) $3.03 $0.05 $3.45$0.15 $3$.09.131 PF AMGP at 1.8333x: $2.54 ($0.04) $3.35 $0.33 $3.80$0.50 $4$.03.172 $ Acc / (Dil):($0.10) $0.01 $0.11 $0.15 $ Acc / (Dil):$0.14 $0.33 $0.47 $0.55 Accretion / (Dilution) Pre Unitholder Tax(1,2) | AM & AMGP | AR Downside Volumes Case All-In XR 1.8333x Gr Ta N xes PaSyUabBleJECT TO CHANG($E2.96) XR Equity Component 1.6350x Net After-Tax XR 1.6609x CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Growth Comparison at Transaction Pre Unitholder Tax | SQ AM, SQ AMGP, & PF AMGP AR Base Case AM $2.74 $3.24 $3.75 $4.29 16% AM GP @ 1.0x AM Coverage $1.26 $1.60 $1.96 $2.33 23% PF AM GP $1.64 $1.99 $2.39 $2.75 19% AR Downside Volumes Case AM $2.40 $3.02 $3.33 $3.76 16% AM GP @ 1.0x AM Coverage $1.02 $1.45 $1.66 $1.96 24% PF AM GP $1.38 $1.83 $2.08 $2.35 19% AR Base Case AM $2.21 $2.85 $3.42 $4.10 23% AM GP $0.89 $1.35 $1.75 $2.23 36% PF AM GP $1.21 $1.56 $1.87 $2.24 23% AR Downside Volumes Case AM $2.15 $2.58 $2.97 $3.42 17% AM GP $0.85 $1.15 $1.43 $1.75 27% PF AM GP $1.15 $1.44 $1.65 $1.90 18% Source: Management projections and FactSet as of 10/3/2018. Note: Coverage assumptions as provided by Management. PF AMGP coverage extrapolated based on fixed distributions provided for AR Base Case. SQ AM coverage for AR Base Case extrapolated based on fixed distributions provided for AR Base Case. SQ AM coverage for AR Downside Volumes base extrapolated based on fixed distributions provided for AR Downside Volumes Case. 41 SQ AM M gmt Dist Coverage (Base Case) 1.305x 1.164x 1.112x 1.052x SQ AM M gmt Dist Coverage (AR Downside Volumes Case) 1.152x 1.210x 1.145x 1.116x PF AM GP M gmt. Dividend Coverage (Base Case) 1.355x 1.275x 1.276x 1.225x PF AM GP M gmt. Dividend Coverage (AR Downside Volumes Case) 1.203x 1.269x 1.258x 1.238x 2019E 2020E 2021E 2022E 2019E - 2022E CAGR Distributions / Dividends per Unit / Share 2019E 2020E 2021E 2022E 2019E - 2022E CAGR DCF per Unit / Share CONFIDENTIAL DRAFT SUBJECT TO CHANGE
PF AMGP Selected Public Trading Comparables Midstream C-Corps & High Growth MLPs Dist. Growth 2018E to 2020E CAGR(1) Unit Price at 10/3/2018 Price (Yield) DCF(2,3) EBITDA Company Equity Value TEV Current 2018E 2019E 2020E 2019E 2020E 2019E Kinder Morgan Inc ONEOK, Inc. Plains All American Pipeline GP SemGroup Corporation Targa Resources Corp. The Williams Companies, Inc. Tallgrass Energy, LP $18.24 68.43 25.08 22.22 58.38 27.98 24.27 $40,253 28,130 7,101 1,747 13,346 33,997 6,806 $76,807 36,468 6,909 4,574 19,561 55,037 6,806 4.4% 4.8% 4.8% 8.5% 6.2% 4.9% 8.0% 4.4% 4.7% 4.8% 8.6% 6.2% 4.9% 8.2% 25% 11% 10% 5% 1% 12% 5% 9.1x 15.0x 8.8x 7.2x 14.1x 11.0x 7.2x 8.7x 14.1x 8.1x 6.5x 10.3x 10.5x 7.8x 10.1x 14.3x 19.3x 10.5x 12.5x 12.5x 7.2x 9.7x 12.5x 19.3x 10.1x 10.3x 12.5x 7.2x 2.6x 1.3x 1.8x 1.5x 1.1x 1.3x 0.0x CNX Midstream Partners LP EQT Midstream Partners LP Hess Midstream Partners LP Noble Midstream Partners LP BP Midstream Partners LP Shell Midstream Partners LP Valero Energy Partners LP $19.47 52.96 23.07 39.28 19.35 21.91 40.42 $1,404 11,601 1,288 1,643 2,082 6,804 4,119 $1,877 14,371 3,346 2,811 2,375 8,743 5,293 6.9% 8.2% 6.0% 5.4% 5.6% 6.7% 5.4% 7.0% 8.3% 6.1% 5.6% 5.7% 6.8% 5.6% 15% 14% 15% 20% 15% 12% 14% 11.3x 9.9x 14.2x 10.4x 13.7x 13.4x 12.8x 8.4x 9.2x 12.6x 9.6x 11.7x 11.4x 11.9x 11.5x 14.3x 12.8x 12.7x 16.7x 14.5x 13.4x 8.1x 10.5x 10.5x 9.7x 10.6x 10.6x 10.6x 1.3x 1.0x 1.2x 2.0x 1.3x 1.1x 1.4x Source: FactSet as of 10/3/2018 and Wall Street research. Note: Assumes AMGP share price of $17.35 for offer / AM Proposal metrics. (1) (2) (3) (4) For C-corps, CAGR calculated using Q4 2017 dividend annualized and 2020E dividend. Calculated as equity value to LP DCF. DCF calculated as EBITDA less interest expense and maintenance capital. Defined as high-growth MLP if current 2020E distribution growth CAGR is greater than 10%. 42 PF AMGP at AMGP Proposal$17.58$5,964$11,1655.2%5.3%28%11.6x9.8x11.3x9.1x1.4x Mean$11,809$18,3216.0%6.1%13%11.6x10.2x13.5x11.2x1.5x Median$6,804$6,9095.6%5.7%14%11.3x10.3x12.8x10.5x1.3x Midstream C-Corp Mean$20,762$33,2265.6%5.6%11%10.9x9.7x13.2x12.4x1.6x Midstream C-Corp Median$20,738$28,0144.8%4.8%10%10.0x9.5x12.5x11.4x1.4x High-Growth MLP Mean$4,134$5,5456.3%6.5%15%12.2x10.7x13.7x10.1x1.3x High-Growth MLP Median$2,082$3,3466.0%6.1%15%12.8x11.4x13.4x10.5x1.3x High - Growth MLPs(4) Non-IDR Midstream C-Corps L Coverage J K Enterprise Value / H I Equity Value / G E F Distribution / Unit / D C B A CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Has / Gets Analysis | AR Base Case AM Pre Unitholder Tax | Valuation Effective Date: 12/31/2018 Discounted Levered DCF Analysis Discounted Levered DCF Analysis 9.0x 10.5x 12.0x 10.0x 12.0x 14.0x 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Distribution Analysis Discounted Distribution Analysis 8.0% 7.0% 6.0% 7.0% 6.0% 5.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Cash Flow | Unlevered FCF(2) | Discounted at WACC 11.0x 13.0x 15.0x SQ AM Coverage 1.305x 1.164x 1.112x 1.052x 7.0% 8.5% 10.0% Source: Management projections and FactSet as of 10/3/2018. (1) Implied XR at 1.6350x equity XR and cash consideration of $3.415 / unit. Cash consideration added to implied share price at 1.6350x XR. (2) Unlevered free cash flow defined as PF AMGP EBITDA less cash taxes and capital expenditures. Implied equity value per share backs out implied AM Q4 2018 net debt per share. 43 PF AM GP Coverage 1.355x 1.275x 1.276x 1.225x $49.90 $58.53 $67.16 $47.84 $56.12 $64.40 $45.89 $53.83 $61.78 Discount Rate 2019E 2020E 2021E 2022E 2022E Terminal M ultiple SQ vs PF Distribution Coverage $51.70 $58.63 $68.33 $49.28 $55.84 $65.02 $47.03 $53.24 $61.94 Discount Rate $48.17 $53.99 $61.73 $45.78 $51.28 $58.62 $43.55 $48.76 $55.71 Discount Rate 2022E Distribution Yield 2022E Distribution Yield $47.75 $54.88 $62.01 $45.60 $52.35 $59.09 $43.59 $49.98 $56.37 Discount Rate $39.27 $44.38 $49.49 $37.39 $42.22 $47.06 $35.63 $40.21 $44.79 Discount Rate 2022E DCF M ultiple 2022E DCF M ultiple XR Adjusted PF AMGP Implied Share Price |1.8333x XR(1) Stand Alone AM Implied Unit Price CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Has / Gets Analysis | AR Downside Volumes Case AM Pre Unitholder Tax | Valuation Effective Date: 12/31/2018 Discounted Levered DCF Analysis Discounted Levered DCF Analysis 9.0x 10.5x 12.0x 10.0x 12.0x 14.0x 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Distribution Analysis Discounted Distribution Analysis 8.0% 7.0% 6.0% 7.0% 6.0% 5.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Cash Flow | Unlevered FCF(2) | Discounted at WACC 11.0x 13.0x 15.0x SQ AM Coverage 1.152x 1.210x 1.145x 1.116x 7.0% 8.5% 10.0% Source: Management projections and FactSet as of 10/3/2018. (1) Implied XR at 1.6350x equity XR and cash consideration of $3.415 / unit. Cash consideration added to implied share price at 1.6350x XR. (2) Unlevered free cash flow defined as PF AMGP EBITDA less cash taxes and capital expenditures. Implied equity value per share backs out implied AM Q4 2018 net debt per share. 44 PF AM GP Coverage 1.203x 1.269x 1.258x 1.238x $44.09 $51.50 $58.90 $42.30 $49.40 $56.50 $40.60 $47.42 $54.23 Discount Rate 2019E 2020E 2021E 2022E 2022E Terminal M ultiple SQ vs PF Distribution Coverage $44.78 $50.65 $58.87 $42.72 $48.28 $56.06 $40.80 $46.07 $53.44 Discount Rate $40.75 $45.60 $52.06 $38.74 $43.33 $49.45 $36.87 $41.22 $47.02 Discount Rate 2022E Distribution Yield 2022E Distribution Yield $41.59 $47.70 $53.81 $39.74 $45.52 $51.30 $38.01 $43.49 $48.96 Discount Rate $34.63 $39.11 $43.59 $32.97 $37.21 $41.45 $31.43 $35.44 $39.46 Discount Rate 2022E DCF M ultiple 2022E DCF M ultiple XR Adjusted PF AMGP Implied Share Price |1.8333x XR(1) Stand Alone AM Implied Unit Price CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Illustrative Discounted Future Value Pre Unitholder Tax | SQ AM & PF AMGP | AR Base Case & AR Downside Volumes Case PF AMGP | 1.8333x XR Adjusted(1) | AR Base Case SQ AM | AR Base Case $55.57 $50.09 $53.45 $47.42 $40.94 $36.09 2019E SQ AM | AR de Volumes $47.88 $43.06 $37.20 $39.18 $40.32 $36.59 $36.48 $32.81 2019E 2020E 2021E 2019E 2020E 2021E Source: Management projections and FactSet as of 10/3/2018. Note: Valuation based on annual distributions. (1) Implied XR at 1.6350x equity XR and cash consideration of $3.415 / unit. 45 Assumptions Management projections | Valuation date as of 12/31/18 Future share price calculated at FY1 distributions divided by yield Discounted to 12/31/18 at 10% cost of equity Interim distributions discounted upon receipt to 12/31/18 $29.44 Current AM Unit Price 5.0% 6.0% 7.0% Yield $61.14 $54.01 $46.94 $47.68 $41.65 2020E 2021E $65.21 $58.92 $53.15 $45.05 $48.69 $43.78 $39.27 2019E 2020E 2021E Downside Volumes Case $51.566.0% $47.21 $45.147.0% $41.07 8.0% PF AMGP | 1.8333x XR Adjusted(1) | AR Downsi Case$56.04 $52.55 $49.43 $44.75 $41.94 $42.04 Yield $29.44 5.0% 6.0% 7.0% Yield 6.0% 7.0% 8.0% Current AM Unit Price Yield CONFIDENTIAL DRAFT SUBJECT TO CHANGE
VI. Pro Forma Trading Analysis 46 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Pro Forma Trading AM Unit Price as of 10/3/2018: $29.44 Implied AM Ownership(1) AM 2019E ($2.21) 7.51% PF Mkt Cap Weighted Y ield ($1.21) 6.55% AMGP 2019E ($0.89) 5.07% 8.00% 6.00% 5.00% 59.9% $27.67 $29.49 $33.82 $36.90 $43.65 $44.27 Source: Company Management, FactSet as of 10/3/2018. Note: Implied AM unit price based on spot AMGP share price. (1) Assumes equity ownership based on exchange ratio net of cash credit. 47 Cash Adj. AMGP Proposal 1.833x Exchange Ratio A H Exchange Ratio Adjusted Implied AM Unit Price 2019E Dividend Y ield G F E D C B CONFIDENTIAL DRAFT SUBJECT TO CHANGE
VII. After-Tax Pro Forma Impact Supplemental Materials 48 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Transaction Tax Implications At Transaction Average Tax Basis Calculation(1) Average tax basis of $20.49 per unit for public AM unitholders as of YE 2018 Antero Resourc es Antero Resourc es - WaterARC Public Unitholders 90,841,730 8,028,605 94,757,401 $1.06 26.90 20.49 2017 YE Basis (+) 2018E Avg. Net Inc ome (-) 2018E Distributions $23.27 (1.07) 1.72 The average public AM unit holder would need to receive cash consideration of $2.96 per unit to avoid having to sell shares post-transaction to pay transaction related taxes Total Active Units 193,627,736 Cash Consideration Required to Avoid Share Selling AMGP Share Price Exchange Ratio Cash Consideration(5) Offer Price $17.58 1.6350x $3.00 $31.74 AMGP Share Price Exchange Ratio Cash Consideration(5) Offer Price $17.58 1.635x $3.00 $31.74 AMGP Share Price Exchange Ratio Cash Consideration(5) Offer Price $17.58 1.635x $3.00 $31.74 Detail of Gains (per Unit) Average Ordinary Gain One-Time Dividend / Unit (ordinary Gain) Average Capital Gain Detail of Gains (per Unit) Average Ordinary Gain One-Time Dividend / Unit (ordinary Gain) Average Capital Gain Detail of Gains (per Unit) Average Ordinary Gain One-Time Dividend / Unit (ordinary Gain) Average Capital Gain $3.37 0.415 7.89 $4.83 0.415 8.93 $6.56 0.415 4.68 Average Assumed Passive Activity Loss (2) Tax on Gain (per Unit) Federal Ordinary Income Tax Rate Individual MLP Investor Deduction Rate Adjusted Ordinary Tax Rate ACA Tax Federal Tax Rate Federal Capital Gains Tax Rate Effective State Tax Rate(3) PAL Rate PAL Gain Deduction Average Assumed Passive Activity Loss (2) Tax on Gain (per Unit) Federal Ordinary Income Tax Rate Individual MLP Investor Deduction Rate Adjusted Ordinary Tax Rate ACA Tax Federal Tax Rate Federal Capital Gains Tax Rate Effective State Tax Rate(3) PAL Rate PAL Gain Deduction Assumed Passive Activity Loss (3) Tax on Gain (per Unit) Federal Ordinary Income Tax Rate Individual MLP Investor Deduction Rate Adjusted Ordinary Tax Rate ACA Tax Federal Tax Rate Federal Capital Gains Tax Rate Effective State Tax Rate(3) PAL Rate PAL Gain Deduction ($2.12) ($2.42) ($2.00) 37.0% 20.0% 29.6% 3.8% 33.4% 23.8% 5.2% 37.0% 20.0% 29.6% 3.8% 33.4% 23.8% 5.2% 37.0% 20.0% 29.6% 3.8% 33.4% 23.8% 5.2% 37.0% ($0.79) 37.0% ($0.90) 37.0% ($0.74) Tax on Ordinary Gain Effective Ordinary Gain Tax Rate Tax on Capital Gain Effective Capital Gain Tax Rate State Tax Ordinary Income(4) Effective Ordinary Gain Tax Rate State Tax Capital Gain(4) Effective Capital Gains Tax Rate $0.48 14.2% $1.88 23.8% $0.20 5.8% $0.41 5.2% Tax on Ordinary Gain Effective Ordinary Gain Tax Rate Tax on Capital Gain Effective Capital Gain Tax Rate State Tax Ordinary Income(4) Effective Ordinary Gain Tax Rate State Tax Capital Gain(4) Effective Capital Gains Tax Rate $0.86 17.7% $2.13 23.8% $0.27 5.6% $0.46 5.2% Tax on Ordinary Gain Effective Ordinary Gain Tax Rate Tax on Capital Gain Effective Capital Gain Tax Rate State Tax Ordinary Income(4) Effective Ordinary Gain Tax Rate State Tax Capital Gain(4) Effective Capital Gains Tax Rate $1.45 22.1% $1.11 23.8% $0.34 5.2% $0.24 5.2% Total Payable Effective Tax Rate 25.4% Total Effective Tax Rate 27.0% Total Payable Effective Tax Rate 28.0% Source: FactSet as of 10/3/2018 and Wall Street research. Note: Dividend of $0.415 / share added to ordinary gain. (1) (2) (3) (4) (5) Provided by management. Assumed passive activity loss and tax on ordinary gain for IPO investor utilizes company provided estimates based on a per unit basis range of $19.00-$22.00. Passive activity loss calculated by Management to be $2.00 for an IPO investor. At Managements direction, state tax rate determined by using a weighted average of 50 state income tax rates and median federal taxable income brackets for married and single filers. Cash consideration excludes special distribution of $0.415. 49 Total Tax on Gain $3.15 Total Tax on Gain $3.72 Total Tax on Gain $2.96 Total Gain $11.24 Total Gain $13.76 Total Gain $11.67 Average EOY 2018 Tax Basis $17.98 Average EOY 2018 Tax Basis $17.98 Average EOY 2018 Tax Basis $20.49 IPO Investor - IPO Basis(1) For IPO Investor - Average Basis(1) Average Unitholder Average EOY 2018 Basis for Public Unitholders $20.49 Average EOY 2018 Basis for IPO Investors $17.98 2018E YE Basis$20.49 2018E YE Basis Unitholder Active Units EOY 2018 Basis CONFIDENTIAL DRAFT SUBJECT TO CHANGE
After-Tax Distribution For Average Unitholder Calculation Detail for Transaction $989 $1,222 $1,413 $1,642 EBITDA - Interest Expense EBITDA - Distributions from Unconsolidated Affiliates + Equity in Earnings of Unconsolidated Affiliates - Equity Based Compensation - Interest Expense - Depreciation of Goodwill and Current Assets - Additional Depreciation from Step Up in Basis - Capex Expense for Tangible Assets - Interest Expense Add-back $989 ($88) $72 ($48) (121) (761) (87) (164) 0 $1,222 ($141) $104 ($41) (145) (753) (221) (176) 0 $1,413 ($168) $120 ($33) (152) (666) (229) (377) 0 $1,642 ($196) $146 ($35) (125) (622) (160) (352) 42 ($92) ($114) ($132) ($143) - IDR Distributions ($237) ($357) ($464) ($592) - Distributions from Unc onsolidated Affiliates ($88) ($141) ($168) ($196) + Equity in Earnings of Unc onsolidated Affiliates $72 $104 $120 $146 - Equity Based Compensation ($48) ($41) ($33) ($35) Taxable Income Before NOLs ($208) ($151) ($92) $332 597 674 736 822 Taxable Income Before Tax Depreciation - NOLs applied from previous years $0 $0 $0 ($266) O versubc ription 103% 103% 103% 103% Taxable Income ($208) ($151) ($92) $66 AM GP Taxable Income + NOL Utilization - Payment of Income Taxes +/-Change in depreciation (M ACRS vs ADS SL) + Tangible Asset Capex ($208) - - 205 164 ($151) - - 222 176 ($92) - - 85 377 $66 266 17 (65) 352 614 693 758 846 Taxable Income Before Tax Depreciation Tax Deprec iation (588) (642) (648) (644) Net Income 26 51 109 202 Current Earnings & Profits Current Dist. from AM GP to Shareholders Qualified Dividend? Return of Capital(1) Qualified Dividend(2) Partial Return of Capital(3) Accumulated Earnings and Profits $161 606 Cum E&P - 161 445 $247 791 Cum E&P - 247 545 $370 949 Cum E&P - 370 579 $561 1,139 Cum E&P - 561 579 AM Shares Outstanding 188.1 188.1 188.1 188.1 Taxable Income / Unit (Net of PAL) $0.00 $0.01 $0.02 $0.04 Average Tax Basis per Unit $20.49 $17.50 $13.99 $10.19 Less: Return of Capital per Unit(1) Average EoY Basis per Unit ($2.99) ($3.51) ($3.80) ($4.05) $17.50 $13.99 $10.19 $6.14 Income Tax % RoC (Annual Average) % Qualified Dividend (Annual Average) Percentage RoC Percentage QD 18% 7% 73% 27% 17% 8% 69% 31% 15% 10% 61% 39% 13% 12% 51% 49% Taxable Income / Unit (Net of PAL) $0.00 $0.01 $0.02 $0.04 Income Tax Rate 29.6% 29.6% 29.6% 29.6% Tax Basis/Share - Return of Capital $17.58 ($0.89) $16.69 ($1.07) $15.62 ($1.14) $14.48 ($1.14) Tax / Unit ($0.00) ($0.00) ($0.01) ($0.01) EoY Basis $16.69 $15.62 $14.48 $13.34 Implied Tax Rate 6% 7% 9% 12% Exchange ratio 1.6609x 1.6609x 1.6609x 1.6609x After-tax Distribution Dilution to AM Unitholder ($/Unit) After-tax Distribution Dilution to AM Unitholder (%) ($0.33) (15.0%) ($0.45) (15.9%) ($0.60) (17.5%) ($0.80) (19.5%) Source: Management projections and FactSet as of 10/3/2018. Note: 1.6609x represents implied XR at 1.6350x equity XR; cash used to pay taxes, with any excess cash assumed to be used to purchase additional secondary shares. 50 (1) (2) (3) Return of capital per share / unit calculated as the total distributions to holders when Current Earnings & Profits are less than 0. Qualified dividend calculated as equal to the lesser of Current Earnings & Profits or Distributions to Shareholder assuming Current Earnings & Profit is greater than 0. Partial Return of Capital is calculated as the difference between Distributions to Shareholders and Current Earnings & Profits assuming Qualified Dividends are applicable. PF After Tax AM Dividend XR Adjusted Share $1.88 $2.40 $2.82 $3.29 After-Tax PF AMGP Dividend Per Share $1.13 $1.44 $1.70 $1.98 Return of Capital Taxes $0.00 $0.00 $0.00 $0.00 Qualified Dividend Taxes $0.08 $0.12 $0.17 $0.26 Before Tax PF AMGP Dividend Per Share $1.21 $1.56 $1.87 $2.24 Total Tax per Share $0.08 $0.12 $0.17 $0.26 After Tax AM Distibution Per LP Unit $2.21 $2.85 $3.41 $4.09 Shares Outstanding 502.1 507.9 507.9 507.9 Income Taxes / Unit $0.00 $0.00 $0.01 $0.01 Before Tax AM Distibution Per LP Unit $2.21 $2.85 $3.42 $4.10 2019E 2020E 2021E 2022E PF AMGP After-Tax Calculation 2019E 2020E 2021E 2022E SQ AM After-Tax Distribution Calculation CONFIDENTIAL DRAFT SUBJECT TO CHANGE
After-Tax Distribution Accretion / (Dilution) CONFIDENTIAL DRAFT AM & AMGP | For Average AM Unit Holder at Transaction AM Accretion / (Dilution) - % At 1.6609x Exchange Ratio & AR Base Case AMGP Accretion / (Dilution) - % At AR Base Case 66.5% 40.7% (19.5%) 27.2% 16.5% 2019E 2020E 2021E 2022E Pro Forma AMGP: $1.13 $1.44 $1.70 $1.98 AM AMGP Accretion / (Dilution) - % At AR Downside Case At 1.6609x Exchange Ratio & AR Downside Case 74.9% 53.0% (14.9%) 39.3% (17.4%) 27.2% 2019E 2020E 2021E 2022E Pro Forma AMGP: $1.13 $1.35 $1.52 $1.70 51 Source: Management projections and FactSet as of 10/3/2018 Note: AMGP accretion / (dilution) based on SQ AM Management Coverage. After-tax distributions is distribution from entity less attributable qualified dividends and gains on capital taxes. Note: 1.6609x represents implied XR at 1.6350x equity XR; cash used to pay taxes, with any excess cash assumed to be used to purchase additional secondary shares. PF AMGP Coverage:1.203x1.269x1.258x1.238x SQ AM Coverage:1.152x1.210x1.145x1.116x PF AMGP Coverage: 1.203x1.269x1.258x1.238x Status Quo AMGP:$0.64$0.88$1.09$1.33 $ Acc / (Dil):$0.48$0.47$0.43$0.36 Status Quo A Pro Forma AMGP:$1.87$2.23$2.52$2.82 $ Acc / (Dil):($0.27)($0.34)($0.44)($0.59) PF AMGP Coverage:1.355x1.275x1.276x1.225x Status Quo AMGP:$0.68$1.03$1.33$1.70 $ Acc / (Dil):$0.45$0.42$0.36$0.28 Status Quo A Pro Forma AMGP:$1.88$2.40$2.82$3.29 $ Acc / (Dil):($0.33)($0.45)($0.60)($0.80) SQ AM Coverage:1.305x1.164x1.112x1.052x PF AMGP Coverage: 1.355x1.275x1.276x1.225x (15.0%)(15.9%)(17.5%) 2019E2020E2021E2022E M:$2.21$2.85$3.41$4.09 Accretion / (Dilution) - % (12.7%)(13.3%) 2019E2020E2021E2022E M:$2.14$2.58$2.96$3.41 SUBJECT TO CHANGE
After-Tax Distribution Accretion / (Dilution) CONFIDENTIAL DRAFT For Average AM Unit Holder at Transaction at 1.0x Coverage for AM & PF AMGP AM Accretion / (Dilution) - % At 1.6609x Exchange Ratio & AR Base Case AMGP Accretion / (Dilution) - % At AR Base Case 62.1% 51.8% 46.4% 36.5% 2019E 2020E 2021E 2022E Pro Forma AMGP: $1.55 $1.85 $2.18 $2.43 AM AMGP Accretion / (Dilution) - % At AR Downside Case At 1.6609x Exchange Ratio & AR Downside Case 74.5% 55.2% (3.2%) 51.4% (4.9%) 40.5% (5.9%) 2020E 2021E 2022E 2019E 2020E 2021E 2022E Pro Forma AMGP: $1.35 $1.72 $1.92 $2.10 52 Source: Management projections and FactSet as of 10/3/2018 Note: AMGP accretion / (dilution) based on SQ AM Management Coverage. After-tax distributions is distribution from entity less attributable qualified dividends and gains on capital taxes. Note: 1.6609x represents implied XR at 1.6350x equity XR; cash used to pay taxes, with any excess cash assumed to be used to purchase additional secondary shares. PF AMGP Coverage:1.000x1.000x1.000x1.000x SQ AM Coverage:1.000x1.000x1.000x1.000x PF AMGP Coverage: 1.000x1.000x1.000x1.000x Status Quo AMGP:$0.77$1.11$1.27$1.49 $ Acc / (Dil):$0.58$0.61$0.65$0.61 Status Quo A$3.00$3.29$3.71 Pro Forma AMGP:$2.25$2.85$3.19$3.49 $ Acc / (Dil):($0.14)($0.15)($0.10)($0.22) PF AMGP Coverage:1.000x1.000x1.000x1.000x Status Quo AMGP:$0.96$1.22$1.49$1.78 $ Acc / (Dil):$0.59$0.63$0.69$0.65 Status Quo A Pro Forma AMGP:$2.58$3.07$3.62$4.03 $ Acc / (Dil):($0.15)($0.13)($0.08)($0.20) SQ AM Coverage:1.000x1.000x1.000x1.000x PF AMGP Coverage: 1.000x1.000x1.000x1.000x (2.2%) (5.4%)(4.2%)(4.8%) 2019E2020E2021E2022E M:$2.72$3.21$3.70$4.23 Accretion / (Dilution) - % (5.9%) 2019E M:$2.39 SUBJECT TO CHANGE
PF AMGP After Tax Cash Flow 6% Terminal Yield Value | Unadjusted Exchange Ratio | AR Base Case At 1.6609x Exchange Ratio Tax Basis at YE 2018 Taxes Incurred in Merger (Assumed Paid in 2020) Cash Received from Offer Stepped Up Basis Upon Close $20.49 0.00 0.00 $32.16 XR Adj. PF AMGP BT Dist. per Share % RoC % QD Return of Capital Qualified Dividends Project Tax Liability $2.01 73.5% 26.5% $1.47 $0.53 ($0.13) $2.59 68.8% 31.2% $1.80 $0.82 ($0.19) $3.10 61.0% 39.0% $1.92 $1.22 ($0.29) $3.73 50.8% 49.2% $1.91 $1.85 ($0.44) Terminal Yield Sale at 12/31/22 - Terminal FV per XR Adj. PF AMGP Share Less: Basis on Conversion Plus: Dividends Treated as Return of Capital 6.00% $62.09 ($32.16) $7.10 Gain on Sale Tax on Gain Tax Rate(1) 29.0% $37.04 $10.74 Sale at 12/31/22 - Terminal FV per XR Adj. PF AMGP Share Less: Taxes on Gain $62.09 ($10.74) Net Proceeds $51.35 Total Net Cash Flow Total Cash In Flow Total Cash Out Flow - Tax on Dividends Total Cash Out Flow - Taxes in Merger $1.75 $1.88 $2.20 $2.40 $2.53 $2.82 $2.85 $3.29 $51.35 $62.09 ($0.13) ($0.19) ($0.29) ($0.44) ($10.74) $0.00 53 Source: Management projections and FactSet as of 10/3/2018. (1) Inclusive of Federal & State capital gains taxes. Discount Factor 0.954 0.867 0.788 0.717 0.683 Implied Present Value per Share $1.67 $1.91 $1.99 $2.04 $35.08 XR Adj. PF AMGP Implied Present Value per Share $42.69 XR Adj. PF AMGP AT Dist. per Share $1.88 $2.40 $2.82 $3.29 AM current price of $29.44 Cash consideration used to pay all taxes; any additional cash available assumed to purchase secondary shares 2019E 2020E 2021E 2022E Terminal CONFIDENTIAL DRAFT SUBJECT TO CHANGE
PF AMGP After Tax Cash Flow 6% Terminal Yield Value | Unadjusted Exchange Ratio | Downside Case At 1.6609x Exchange Ratio Tax Basis at YE 2018 Taxes Incurred in Merger (Assumed Paid in 2020) Cash Received from Offer Stepped Up Basis Upon Close $20.49 0.00 0.00 $32.16 XR Adj. PF AMGP BT Dist. per Share % RoC % QD Return of Capital Qualified Dividends Project Tax Liability $1.91 91.6% 8.4% $1.75 $0.16 ($0.04) $2.39 72.4% 27.6% $1.75 $0.67 ($0.16) $2.74 66.6% 33.4% $1.85 $0.93 ($0.22) $3.16 54.7% 45.3% $1.75 $1.44 ($0.34) Terminal Yield Sale at 12/31/22 - Terminal FV per XR Adj. PF AMGP Share Less: Basis on Conversion Plus: Dividends Treated as Return of Capital 6.00% $52.59 ($32.16) $7.10 Gain on Sale Tax on Gain Tax Rate(1) 29.0% $27.53 $7.98 Sale at 12/31/22 - Terminal FV per XR Adj. PF AMGP Share Less: Taxes on Gain $52.59 ($7.98) Net Proceeds $44.61 Total Net Cash Flow Total Cash In Flow Total Cash Out Flow - Tax on Dividends Total Cash Out Flow - Taxes in Merger $1.83 $1.87 $2.08 $2.23 $2.30 $2.52 $2.48 $2.82 $44.61 $52.59 ($0.04) ($0.16) ($0.22) ($0.34) ($7.98) $0.00 54 Source: Management projections and FactSet as of 10/3/2018. (1) Inclusive of Federal & State capital gains taxes. Discount Factor 0.954 0.867 0.788 0.717 0.683 Implied Present Value per Share $1.75 $1.80 $1.82 $1.77 $30.47 XR Adj. PF AMGP Implied Present Value per Share $37.61 XR Adj. PF AMGP AT Dist. per Share $1.87 $2.23 $2.52 $2.82 AM current price of $29.44 Cash consideration used to pay all taxes; any additional cash available assumed to purchase secondary shares 2019E 2020E 2021E 2022E Terminal CONFIDENTIAL DRAFT SUBJECT TO CHANGE
After-Tax Discounted Dividend / Distribution Analysis XR Adjusted Implied PV / Unit at Various 2022E Distribution Yield | 10% Equity Discount Rate AR Base Case SQ AM Coverage 1.305x 1.164x 1.112x 1.052x 8% 7% 6% $35.81 $39.36 $44.10 Tax-Adjusted Equity Only XR All-In XR 7% 6% 5% (1 AMGP Proposal AR Downside Volumes Case SQ AM Coverage 1.152x 1.210x 1.145x 1.116x 8% 7% 6% $30.84 $33.80 $37.75 Tax-Adjusted Equity Only XR All-In XR 7% 6% 5% (1 AMGP Proposal Source: Management projections and FactSet as of 10/3/2018. Note: Cash consideration of $3.415 per AM unit. Tax calculations provided by Management. Ordinary gain tax rate for AM accounts for Federal ordinary income tax rate of 37%, individual MLP investor deduction rate of 20% and 3.8% ACA tax rate. Ordinary gain tax rate for PF AMGP accounts for Federal ordinary income tax rate of 37% and 3.8% ACA tax rate. (1)Transaction based on Non-AR Unitholders receiving 1.6350x AMGP shares + $3.415 cash consideration, AR receives 1.6023x + $3.000 cash consideration, and Series B receive 17.354mm AMGP shares 55 XR ) 1.8333x 1.6609x $33.97 $37.61 $42.72 PF AMGP 2022E Dividend Yield PF AM GP Coverage 1.203x 1.269x 1.258x 1.238x 2019E 2020E 2021E 2022E SQ AM 2022E Distribution Yield XR ) 1.8333x 1.6609x $38.39 $42.69 $48.72 PF AMGP 2022E Dividend Yield PF AM GP Coverage 1.355x 1.275x 1.276x 1.225x 2019E 2020E 2021E 2022E SQ AM 2022E Distribution Yield AM current price of $29.44 Cash consideration used to pay all taxes; any additional cash available assumed to purchase secondary shares For comparison purposes, AM Proposal assumes issuance of 17.354mm AMGP shares for Series B Unitholders CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Certain TPH Relationships Relationship Disclosure TPH Investment Banking & Antero Midstream Partners, Antero Midstream Partners GP and Antero Resources In May 2017, TPH served as co-manager on Antero Midstream GPs $875 million initial public offering In October 2016, TPH served as financial advisor to Antero Resources on its $170 million sale of 17,000 net acres in southwest PA In June 2016, TPH served as a co-manager on Antero Resources $762 million follow-on equity offering In November 2014, TPH served as a co-manager on Antero Midstreams $1 billion initial public offering In May 2014, TPH served as a senior co-manager on Antero Resources $744 million follow-on equity offering In October 2013, TPH acted as senior co-manager on Antero Resources $1.57 billion initial public offering 56 TPH is a full service securities firm engaged in securities trading, brokerage and private equity and investment management activities as well as providing investment banking and other financial services. In the ordinary course of business, TPH and its affiliates, including Perella Weinberg Partners, may acquire, hold or sell, for their own accounts and the accounts of customers, equity, debt and other securities and financial instruments (including bank loans and other obligations) of AM, AMGP, AR, their affiliates, other prospective transaction participants and other companies that may be involved in the transactions, as well as provide investment banking and other financial services to such companies. TPH has in the past and may in the future provide financial advisory services to AM, AMGP, AR and other transaction participants. In addition, TPH, its affiliates and certain of their employees, including members of the team performing this engagement, as well as certain private equity and investment management funds associated or affiliated with TPH in which they may have financial interests, may from time-to-time acquire, hold or make direct or indirect investments in or otherwise finance a wide variety of companies, including the parties, other transaction participants and their respective affiliates. TPH merged with Perella Weinberg Partners (PWP) in November 2016 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Appendix 57 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Supplemental Calculation Detail | At Transaction Pro Forma AMGP DCF Analyses | Exchange Ratio Adjusted Implied Equity Value | AR Base Case Levered DCF Analysis Supplemental Calculation Detail Discounted Distribution Analysis Supplemental Calculation Detail PF AM GP DCF per Share Disc ount Fac tor PV of PF AM GP DCF per Share $1.64 0.954 $1.56 $1.99 0.867 $1.72 $2.39 0.788 $1.88 $2.75 PF AM GP Dist. per Share Disc ount Fac tor PV of PF AM GP Dist.per Share $1.21 0.954 $1.15 $1.56 0.867 $1.35 $1.87 0.788 $1.47 $2.24 Terminal M ultiple Terminal Disc . Fac tor 12.0x 0.751 Terminal Yield Terminal Disc . Fac tor 6.0% 0.751 58 Source: Management projections and FactSet as of 10/3/2018. Implied Terminal Value per Share $24.76 Implied Equity Value per Share $29.93 XR Adj. AM Equity Value per Share $48.93 Implied Terminal Value per Share $28.09 Implied Equity Value per Share $32.06 XR Adj. AM Equity Value per Share $52.42 Disc . PF AM GP DCF Total $5.16 Disc . PF AM GP Dist. Total $3.98 2019E 2020E 2021E 2022E 2019E 2020E 2021E 2022E CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Precedent Simplification Transactions 8/1/18 5/17/18 3/26/18 1/2/18 2/1/17 11/21/16 10/24/16 9/6/16 5/30/16 11/3/15 10/26/15 7/13/15 5/6/15 4/6/15 1/26/15 6/15/14 10/13/14 8/10/14 8/10/14 7/24/14 10/10/13 8/27/13 5/6/13 1/29/13 2/23/11 Energy Transfer Equity, L.P. Williams Companies Tall Grass Energy GP, LP Arc hroc k, Inc O NEO K, Inc Sunoc o Logistic s Partners, LP Americ an M idstream Partners LP Enbridge, Inc . SemGroup Corp. Targa Resourc es Corp. Western Refining, Inc . M PLX LP Crestwood Equity Partners, LP Tesoro Logistic s LP Energy Transfer Partners, LP Williams Partners LP Targa Resourc es Partners LP Kinder M organ Inc . Kinder M organ Inc . Breitburn Energy Partners Regenc y Energy Partners LP Plains All Americ an LP Inergy M idstream LP Kinder M organ Energy Partners LP Enterprise Produc ts Partners LP Energy Transfer Partners, LP Williams Partners, LP Tallgrass Energy Partners, LP Arc hroc k Partners, LP O NEO K Partners, LP Energy Transfer Partners, LP JP Energy Partners LP Spec tra Energy Rose Roc k M idstream Targa Resourc es Partners LP Northern Tier Energy M arkWest Energy Partners, LP Crestwood M idstream Partners QEP M idstream Partners LP Regenc y Energy Partners LP Ac c ess M idstream Partners LP Atlas Pipeline Partners LP Kinder M organ Energy Partners El Paso Pipeline Partners QR Energy LP PVR Partners LP PAA Natural Gas Storage LP Crestwood M idstream Partners LP Copano Energy LLC Dunc an Energy Partners LP $66,981 $57,793 $8,361 $2,438 $23,654 $54,455 $476 $46,980 $2,034 $12,229 $5,286 $22,360 $6,920 $1,145 $18,593 $35,891 $6,002 $52,566 $13,677 $2,856 $5,659 $2,531 $2,643 $4,858 $3,282 (8.7%) 8.8% 4.6% (11.8%) 2.8% (4.1%) 5.0% (0.8%) 12.9% (7.3%) 2.6% (13.6%) (2.0%) (16.0%) (14.8%) 11.8% (8.1%) (11.3%) (9.1%) 12.5% (0.5%) (5.9%) 5.5% (13.8%) 0.8% 3.6% 12.6% 8.8% 0.5% 7.1% 0.7% 5.0% 2.4% 10.2% (1.8%) 10.1% (10.9%) 3.1% (21.8%) (15.1%) 2.4% (14.2%) (6.7%) (4.8%) 16.3% (4.7%) 4.8% (0.7%) (23.3%) 1.3% 6.0% 14.4% 5.7% 5.7% 10.6% 2.1% --4.1% 7.4% 1.6% 0.0% (10.0%) 6.9% (16.2%) (8.1%) 2.7% (15.9%) (4.8%) 2.7% 34.0% (5.8%) 3.8% (5.6%) (20.3%) (1.5%) 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 35.4% 92.4% 100.0% 100.0% 98.8% 100.0% 96.7% 88.0% 88.0% 80.7% 99.0% 100.0% 96.2% 100.0% 100.0% ---- ---- ---- ---- ---- $17.50 $6.20 ---- $0.32 --$1.26 $10.77 $4.65 $4.29 $0.29 --$1.03 ---- 59 Source: Company filings, Wall Street Research Note: Accretion Dilution represents Target DCF pro forma for Acquirer Exchange Ratio (grossed up for cash consideration where applicable). (1)Accretion / (dilution) at AR Base Case assuming grossed up by 1.8333x XR. M edian $6,461 (3.0%) 1.3% 2.4% 100.0% $2.77 M ean $17,897 (3.4%) (0.6%) 0.8% 95.2% $3.60 At Transaction(1)Antero Midstream GP LP Antero Midstream Partners LP $10,751 9.5% 12.4% 16.6% 94.4% --I Cash Consideration H % Equity Consideration G FY + 3 Ac c retion F FY + 2 Ac c retion E FY + 1 Ac c retion D Transac tion Value C Target B Ac quiror A Announc ement Date CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Selected Energy Precedent Transactions (USD in millions, except per unit (share) data) 4/26/2018 SJW Group California Water Service Group $1,879 20% 29% 2/5/2018 8point3 Energy Partners LP Capital Dynamics AG $2,654 (11%) (17%) 8/29/2017 Arc Logistics Partners LP Zenith Energy US LP $615 15% 13% 7/19/2017 Avista Corp Hydro One Ltd $5,282 24% 20% 1/25/2017 WGL Holdings Inc AltaGas Ltd $6,602 12% 13% 6/3/2016 Talen Energy Corp Riverstone Holdings LLC $5,045 17% 21% 2/1/2016 Questar Corp Dominion Resources Inc $6,088 23% 28% Fairfax Financial Holdings; Management; ACON Investments; Albright Capital Management 10/26/2015 APR Energy plc (66.1246%) $737 (2%) 159% 8/24/2015 AGL Resources Inc Southern Co $12,401 38% 40% Macquarie Group; Manulife Financial; British Columbia Investment Management 10/20/2014 Cleco Corp $4,709 15% 1% 4/30/2014 Pepco Holdings Inc Exelon Corp $12,107 20% 35% 11/19/2013 Coastal Energy Co Compania Espanola de Petroleos SA - CEPSA $2,182 28% 1% 4/8/2013 Lufkin Industries Inc General Electric Co $3,320 38% 30% 12/5/2012 McMoRan Exploration Co Freeport-McMoRan Copper & Gold Inc $2,430 74% 18% 10/17/2011 Brigham Exploration Co Statoil ASA $4,667 20% 19% 8/29/2011 Venoco Inc Private Investor (Timothy M. Marquez) $400 39% (2%) 6/23/2011 Central Vermont Public Service Corp Gas Metro $670 2% 51% 4/15/2011 Bronco Drilling Co Inc Chesapeake Energy Corp $324 6% 14% 8/9/2010 Superior Well Services Inc (92.4%) Nabors Industries Ltd $844 21% 26% 11/1/2009 Encore Acquisition Co Denbury Resources Inc $4,665 35% 36% 7/28/2008 EnergySouth Inc Sempra Energy $731 23% 24% Source: Dealogic as of 10/3/2018. Note: Excludes MLPs and transactions without publicly available premiums data. Based on deals involving U.S. targets with deal value greater than $250MM, target general industry group defined as oil & gas or utilities & energy, announce date since 2008, acquirer final stake > 90% and 100% cash consideration. (1) Niska units were trading at $1.21 / unit for a market capitalization of $50MM at the time of the transaction, net debt of $726MM and LTM EBITDA of ($25.4MM). 60 Median$2,98721%24% Mean4,31029%34% 9/15/2009Parallel Petroleum CorpApollo Global Management LLC$48211%66% 3/3/2010Southwest Water CoJP Morgan Asset Management; Water Asset Management$42756%84% 11/9/2010Atlas Energy IncChevron Corp$4,67237%42% 4/20/2011DPL IncAES Corp$4,6789%15% 7/15/2011Petrohawk Energy CorpBHP Billiton Ltd$15,10865%62% 9/12/2011Global Industries LtdTechnip SA$1,07355%129% 12/21/2011WCA Waste CorpMacquarie Infrastructure Partners II$53330%62% 1/7/2013EnergySolutions IncEnergy Capital Partners LLC$95721%34% 5/29/2013NV Energy IncBerkshire Hathaway Inc$10,42320%11% 12/11/2013UNS Energy CorpFortis Inc$4,34730%22% 9/29/2014Athlon Energy IncEnCana Corp$6,83425%26% 6/14/2015Niska Gas Storage Partners LLC(1)Brookfield Infrastructure Partners LP$985223%111% 9/4/2015TECO Energy IncEmera Inc$10,39131%27% 10/26/2015Piedmont Natural Gas Co IncDuke Energy Corp$6,57942%53% 2/9/2016Empire District Electric CoAlgonquin Power & Utilities Corp$2,37121%23% 8/22/2016CST Brands IncAlimentation Couche-Tard Inc$4,4092%7% 2/21/2017Delta Natural Gas Co IncPNG Companies LLC$26017%14% 8/18/2017Calpine CorpEnergy Capital Partners; Access Industries ; CPPIB$17,38913%8% 12/12/2017Fairmount Santrol Holdings IncSCR Sibelco NV$1,91814%23% 4/23/2018Vectren CorpCenterPoint Energy Inc$8,09410%15% Announcement Transaction Premium Date Target Acquiror Value ($MM) 1-Day 1-Month 5/23/2018Babcock & Wilcox Enterprises IncSteel Partners Holdings LP$72315%21% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Financial Projections 61 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Management Projections: AR Base Volumes Case AR ($ in millions, unless otherwise noted) Production Volumes (MMcfe/d) EBITDAX(1) Gas NGLs (excl. Ethane) Ethane Oil EBITDAX (Excl. Hedges) Income from Hedges LP Distributions from AM $2,728 5,194 105 8 $405 87 05 342 $338 $219 $282 2,253 $170 $585 261 56 1,847 261 40 $1,4$016,250 $1,250$464 173 $112 31 173 $135 $2 6 2016 2017 2018 2019 2020 2021 2022 2016A 2017A 2018E 2019E 2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Capital Expenditures Free Cash Flow(2) Free Cash Flow Cumulative FCF DrillingLeasehold Acquisition & Maintenance Acquisitions $2,112 $2,216 12 $1,615 $1,684 $1$,18,56460 ,660 $1,102 $519 9 $792 589 2016 2017 2018 20192020 2021 2022 2018A 2019A 2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management projections, Company Filings. (1) AM fully consolidated in SEC financial statement. (2) Free cash flow net of land maintenance capital. 62 $19 $500 $513 $273 $310 $588 $2,216 $1,854 $1,780 $1,850 ,1 $105$2 0 $2,00$72 $163 1,85 $1,780 $ $103 $1,747$ $163 $1 $1, 684$81 $1,699 $588 $238 $164 $149 $95 ,$51,1589 $238 1$,14,55211 $1,464 $164 $$11,,446542 Cumulative Free Cash Flow 2018E-2022E Base Case $1,615 Downside Pric ing Case $184 Downside Case $909 $2,305 $2, 72 $2,086$2,100 $2 $338 0 ,305 $35 $4 $ $2,288 $1,774 $1,7 $ $219 2,08 6$ $282 2,10 $37 $1,93$01 74 $224 $1,406 $170 $1,594$ 3 $112 4$01,283$ $1,003 $135 $1,140 $214 03 $901 $290 4,545 4,545 5,194 471 1 05 471 974 33,,994455 402 402 87 834 3,33,33030 342 7700 3,644 3,644 2022 771122 2,702 2,70256 282686 5599 3,222 3,222 2021 603 603 2,822 2,822 2020 1,8472,253 2,382 2,382 2019 465 105 40 7 419 1,92 1,920 2018 332 31 105 1,6 1,620 201 1,3 1,379 201 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Management Projections: AR AR Downside Pricing at Base Volumes Case ($ in millions, unless otherwise noted) Production Volumes (MMcfe/d) EBITDAX(1) GasNGLs (excl. Ethane) Ethane Oil EBITDAX (Excl. Hedges) Income from Hedges LP Distributions from AM 5,194 5,194 105 4,545 87 $2,728 $2,263 402 05 7700 $2,100 $405 6 $1,7 $219 $282 261 56 $170 261 40 $1,4$016,250 $1,250$464 173 1,847 40 $112 31 $135 31 3 $817 6 2016 2017 2018 2019 2020 2021 2022 2016A 2017A 2018E 2019E 2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Capital Expenditures Free Cash Flow(2) Free Cash Flow (Net of Land Maintenance Capex) Cumulative FCF DrillingLeasehold Acquisition & Maintenance Acquisitions $2,112 $2,216 12 $1,684 $1$,18,56460 ,660 9 $317 589 $182 $184 ($20) 2020E 2 2018A 2019A 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management projections, Company Filings. (1) AM fully consolidated in SEC financial statement. (2) Free cash flow net of land maintenance capital. 63 $19 $298 $297 ($115) $588 $2,216 $1,854 $1,780 $1,850 ,1 02 $105$2 0 $2,00$72 2 $163 1,85 2021 $1,780 202 $ $103 $1,747$ 0 $163 $1 2 $1, 20 684$81 $1,699 19 $588 $238 $164 $149 $95 ,$51,1589 018 $238 1$,14,55211 2017 $1,464 $164 $$11,,446542 2016 Cumulative Free Cash Flow 2018E-2022E Base Case $1,615 Downside Pric ing Case $184 Downside Case $909 $2,305 $1,886$2,08 $1,811$1,889 $1,774$338 $4 $ 74$219 $338 $1,406 $170 $282 $155 $2 $1,703 $851 $388 $128 $1 $1,422 $112 $1,003 $135 $1,140 $ $1,141 $214 03 $901 40$ $291 4,545 471 1 05 471 974 33,,994455 402 87 834 3,33,33030 334422 3,644 3,644 2022 771122 2,702 2,2532,70256 282686 5599 3,222 3,222 2021 603 603 2,822 2,822 2020 1,8472,253 2,382 2,382 2019 465 105 173 7 419 1,92 1,920 2018 332 105 1,6 1,620 201 1,3 1,379 201 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Management Projections: AR Downside Volumes Case AR ($ in millions, unless otherwise noted) Production Volumes (MMcfe/d) EBITDAX(1) Gas NGLs (excl. Ethane) Ethane Oil EBITDAX (Excl. Hedges)Income from HedgesLP Distributions from AM 5,194 4,505105 4,545 471 $2,728 89 $405 $2,305 $2,100 $2,086 $1,774 $1,786 $338 712 $1,77$41,669 $219 $282 $1,537 $1,520 2,253 $170 $201 261 56 1,847 261 40 $1,4$016,252 $1,250$464 173 $112 31 173 $135 $2 31 $1 3 6 2016 2017 2018 2019 2020 2021 2022 2016A 2017A 2018E 2019E 2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Capital Expenditures Free Cash Flow(2) Free Cash Flow (Net of Land Maintenance Capex) Cumulative FCF DrillingLeasehold Acquisition & Maintenance Acquisitions $2,216 12 $588 $909 $769 $608 $47 2016 2017 201820192020 2021 2022 2018A 2019A 2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management projections, Company Filings. (1) AM fully consolidated in SEC financial statement. (2) Free cash flow net of land maintenance capital. 64 $20 $589 $655 $588 $2,216 $1,854 $2,1 $163 $1$,18,56460 $1,850 $1,780 $238 $164 $1$61349 $1,660$1,6$814,443 $1,494 $238 1$,14,55211 $1,464 $164 $$11,,446542 $1,251 $1,179 $81 589 $1,362 $105 $2 $1,388 $103 9$ $1,148 $95 ,511 $1,084 Cumulative Free Cash Flow 2018E-2022E Base Case $1,615 Downside Pric ing Case $184 Downside Case $909 $1,406 $170 $326 $244 $285 $851 $ $112 $388 $155 $1,305 $1,003 $135 $1,140 $128 $1,107 $214 $ $905 03 $902 $616 $291 4,046 3,945402 87 452 3,605 3,330342 70 392 82 876 3,121 2,702286 59 331 58 834 756 648 2,70256 259 47 3,644 3,087 2022 3,222 2,816 2021 534 1,8472,253 2,822 2,568 2020 465 105 40 7 2,382 2,281 2019 419 1,92 1,920 2018 332 105 1,6 1,620 201 1,3 1,379 201 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Management Projections: AR Base Volumes Case AM ($ in millions, unless otherwise noted) Operations & EBITDA Low Pressure (Bcf/d) | Water Handling (MBbls/d) Capital Expenditures Gathering & Compression Water Handling Earn-out payment Stonewall MPLX JV Low Pressure Water Delivery Produced Water EBITDA $1,292 $491 $1,460 $925 $1,642 $1,081 $1, $1,642 413 $176 $1,413 $1,222 $1,222 $989 $989 $730 $730 7 $529 $404 $529 6 404 $81 5 $14 4 4 $220 6A 4 3.1 2.7 2018E 2019E 2020E 2.0121E 2022E 2016A 2017A 2016A 2017A 2018E 2019E 2020E 2021E 2022E 0.8 1.1 1.2 1.5 DCF20a17nA d Distrib20u18tEions per20U19nE it 2022E Distribution Breakdown 016A 2020E 2021E2018E 2022E CAGR LP DCF per Unit LP Distributions per Unit AM LPs AMGP (IDRs) Series B Uni ts $4.29 $3.75 $4.29 $3.24 $3.75 -% 1% 1% 2% 2% 2% 2% $2.74 $4.10 % $2.06 $3.42 $3.24 $2.21 $4.10 $1.61 $1.49 $2.85 $3.42 $2.76 $1.72 $1.33 $1.03 $2.07 $2.85 2019E 20$1.61 $1.49 16A2017A 2018$E2.21 2020E 2021E 2022E 8%/2$91%.72 28%/29%33%/29% 18%/29% 16%/20% 14%/20% Growth(1) $1.33 1.76x 1.33x 1.28x1.31x 1.16x 1.11x 1.05x Rat$io1(2.) 03 16A 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management Projections, Company Filings. Note: Operational volumes based on annual average volumes. (1) YoY growth of LP DCF per unit and LP distributions per unit respectively. (2) Coverage ratio calculated as total DCF over total distributions. 65 YoY Coverage Total LP DCF$353$299$388$515$609$705$807 Tota2l0L1P6A 2017A 2018E 2019E 2020E 2021E 2022E Distributions$269$246$323$416$536$643$771 8% - % 1 22% 7A 1% 29% 30% E 2% 34% 36% 2% 38% 39% 2% 40% 41% 2 2% 41% 42% 92% 20 78% 201 68% 69% 2018 63% 64% 2019E 59% 60% 2020E 57% 58% 2021E 55% 57% 022E 20% 24% 6 261 6.9 243 220 205 5. 178 4.7 1 154 4. 124 3.5 107 94 2.8 1 2.2 73 1.7 52 1.4 40 41 29 $266 7 $491 $214 $266 $164 $815 $1,108 $2 $6$41265 $125 $164 $86 $719 $169 $176 $684 $9$2430 $611 $124 $2 $44 $214 $125 $125 $110 $186 $349 $75 $169 $352 $416 2019E $3$2926 2 $188 .4 $381 2018E $349 2017A 20 $92 $322 2020E 22$E229 $222801 02$12E20 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Management Projections: AR Downside Volumes Case AM ($ in millions, unless otherwise noted) Operations & EBITDA Low Pressure (Bcf/d) | Water Handling (MBbls/d) Capital Expenditures Gathering & Compression Water Handling Earn-out payment Stonewall Wastewater MPLX JV Low Pressure Water Delivery Produced Water EBITDA $925 $925 $815 $1,642 $1,413 $719 $1,409 $1,222 $1,105 $1,229 $989 $851 $2 $729 $214 $730 7 $529 $404 $529 6 404 6 5 $14 4 E E 2021E $1942022E $19 2.2 4 3.1 2.7 2016A 2017A 2018E 2019E 2020E 2.0121E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E 0.8 1.1 1.2 1.5 DCF20a17nA d Distrib20u18tEions per20U19nE it 2022E Distribution Breakdown 016A 2020E 2021E2018E 2022E CAGR LP DCF per Unit LP Distributions per Unit AM LPs AMGP (IDRs) Series B Uni ts $4.29 $3.76 $3.33 -% 1% 1% 2% $3.02 $3.75 2% 2% 2% $2.40 $3.24 % $2.06 $3.42 $2.97$4.10 $1.61 $1.49 $2.58 $3.42 $2.76 $1.72 $2.15 $1.33 $1.03 $2.07 $2.85 2019E 20$1.61 $1.49 16A 2017A 2018$E2.21 2020E 2021E 2022E 64% Growth(1) $1.33 1.76x 1.33x 1.28x 1.15x 1.21x 1.15x 1.12x Rat$io1(2.) 03 16A 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management Projections, Company Filings. Note: Operational volumes based on annual average volumes. (1) YoY growth of LP DCF per unit and LP distributions per unit respectively. (2) Coverage ratio calculated as total DCF over total distributions. 66 YoY8%/2$91%.72 28%/29%16%/25%26%/20%10%/15%13%/15% Coverage Total LP DCF$353$299$388$451$568$627$708 Tota2l0L1P6A 2017A 2018E 2019E 2020E 2021E 2022E Distributions$269$246$323$403$485$559$643 8% - % 1 22% 7A 1% 29% 30% E 2% 34% 36% 2% 37% 39% 2% 38% 41% 2 2% 40% 42% 92% 20 78% 201 68% 69% 2018 63% 2019E 59% 61% 2020E 57% 60% 2021E 55% 58% 022E 16% 19% 62.192 4 178 189 172 154 154.4 124 3.8 1 3. 3.1 96 87 2.6 1 68 1.7 49 1.4 40 41 29 $491 0.00 7 $124 $491 $266 $266 $186 $646 $164 $14 $125 $176 $646 $125 $430 $124 $2 $214 $381 $169 $488 $506 $352 $349 $186 $75 $168 $178 $272 $188 .42016A 2018E $381 2017A $349 $682020 $926019 $260 $85 $228 $224 $168 $147 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Management Projections: AR Base Volumes Case AMGP ($ in millions, unless otherwise noted) IDR LLC, Series B Cash Flow, and Tax Observations AMGP Total Distributions 18 22 CAGR IDR LLC owns the 100% of the IDRs in AM and has two share classes SQ AM Distribution Policy SQ AM Fully Distributed $441$441 $36$9369 AMGP owns 100% of the Series A units Management owns 100% of the Series B units $415$416 $302 $302 Series B unitholders are entitled to receive up to 6% of the distributions from AM in excess of $7.5MM per quarter $237 $236 $326 $326 Remaining profits pass through AMGP via Series A shares $250 $251 $144 $147 Series B units scheduled to vest at a value of 6% of equity value above $2 billion in the event of a liquidation of IDR LLC AMGP currently pays corporate taxes of 21% and 4% at the federal and state taxes, respectively $86 $166 $52 $86 $101 $166 $48 $52$10 2016A $101 2017A2018E $48 2019E 2020E 2021E 2022E $10 2016A 2017A 2018E 2019E 2020E 2021E 2022E IDR LLC Cash Flow AMGP & Series B Unit Valuation(1,2,5) $592 Distributions to AMGP Taxes G&A Series B Reserved CF 2016A 2017A 2018E 2019E 2020E 2021E 2022E AM Distributions to IDR LLC $17 $70 $144 $237 $357 $464 $592 Series B Take --(2) (7) (12) (20) (26) (34) Cash Distributions to AMGP $17 $67 $137 $224 $338 $438 $559 G&A(3) (1) (1) (2) (2) (2) (2) (2) $85 Taxes (7) (7) (34) (56) (85) (111) (141) $2 CAFD to AMGP Shareholders $10 $59 $101 $166 $251 $326 $416 Illustrative Yield 3.3% 3.3% 3.3% 3.3% 3.3% 3.8% 5.0% $34$34 $11 $2 $1$00101 $$66 $ 2016A 2017A 2018E2019E2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management Projections, Company Filings. (1) (2) (3) (4) (5) Implied AMGP and Series B valuation from 2016A through 2020E based on 2018E yield. Implied AMGP and Series B valuation from 2021E forward based on yield vs growth regression analysis derived on slide 18. Excludes IPO related G&A. Series B valuation calculated as 6% of the valuation of AMGP less $2 billion. Illustrative yield based on regression analysis as presented on page 91. 67 AMGP Valuation $290 $1,788 $3,049 $5,028 $7,587 $8,531 $8,343 Series B Valuation(4) N/A N/A $63 $182 $335 $392 $381 $17 $ $2 $2 $464 $34 $141 $2 $357 $2 $111 $416 $2 $237 $2 $326 $251 $2 $144 $56 $166 $69 $2 $ 2 $1100 $4$848 32% 43% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Management Projections: AR Downside Volumes Case AMGP ($ in millions, unless otherwise noted) IDR LLC, Series B Cash Flow, and Tax Observations AMGP Total Distributions IDR LLC owns the 100% of the IDRs in AM and has two share classes SQ AM Distribution Policy SQ AM Fully Distributed $441 AMGP owns 100% of the Series A units Management owns 100% of the Series B units 18 22 CAGR $369 $371 $415 $302 Series B unitholders are entitled to receive up to 6% of the distributions from AM in excess of $7.5MM per quarter $314 $326 $237 $273 $326 Remaining profits pass through AMGP via Series A shares $250 $144 $191 $166 $266 Series B units scheduled to vest at a value of 6% of equity value above $2 billion in the event of a liquidation of IDR LLC AMGP currently pays corporate taxes of 21% and 4% at the federal and state taxes, respectively $86 $146 $101 $52 $215 $86 $48 $157 2019E $10 $52 2016A $10 2017A $48 $120018E 2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E IDR LLC Cash Flow AMGP & Series B Unit Valuation(1,2,5) Distributions to AMGP Taxes G&A Series B Reserved CF 2016A 2017A 2018E 2019E 2020E 2021E 2022E $2 AM Distributions to IDR LLC $17 $70 $144 $225 $306 $380 $464 $464 $2 Series B Take --(2) (7) (12) (17) (21) (26) Cash Distributions to AMGP $17 $67 $137 $213 $290 $359 $438 (3) (1) (1) (2) (2) (2) (2) (2) G&A Taxes (7) (7) (34) (53) (73) (90) (111) $2 $2 CAFD to AMGP Shareholders $10 $59 $101 $157 $215 $266 $326 $53 Illustrative Yield 3.3% 3.3% 3.3% 3.3% 3.3% 4.8% 5.7% $2 $34 165 $1 $2 $1 $17 $$66 $$1100 2016A 2017A 2018E 2019E2020E2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management Projections, Company Filings. (1) (2) (3) (4) Implied AMGP and Series B valuation from 2016A through 2020E based on 2018E yield. Implied AMGP and Series B valuation from 2021E forward based on yield vs growth regression analysis derived on slide 18. Excludes IPO related G&A. Series B Valuation calculated as 6% of the valuation of AMGP less $2 billion. 68 AMGP Valuation $290 $1,788 $3,049 $4,768 $6,508 $5,511 $5,725 Series B Valuation(4) N/A N/A $63 $166 $270 $211 $223 $38$02 $2 $111 $306 $2$2 $90 $326 $225 $73 $266 $144 $56 $215 $157 $2 $69 $34 $ $1$01001 $$4488 34% 27% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AM Status Quo AR Base Volumes Case, AR Downside Volumes Case, and Wall Street Consensus ($ in millions, unless otherwise noted) Wall Street Consensus Mgmt. Projections at AR Base Case Mgmt. Projections at AR Downside Productio n Case 2019E 2022E CAGR Commentary EBITDA $4.29 $1,642 AM is covered by 14 analysts as compared to 22 for AR and 12 for AMGP $3.81 $1,413 $1,382 $1,564 $3.42 $1,222 $1,409 Median price target of $37.50 as of 10/3/2018 $1,152 $989 $1,229 $931 $1,105 $730 $709 $729 Average price target range of $33.00 - $51.00 as of 10/3/2018 $851 $529 2017A 2018E 2019E 2020E 2021E 2022E 2019E 2022E CAGR 2019E 2022E CAGR Distributable Cash Flow / LP Unit Distributions per Unit 1E $4.29 $4.10 $3.51 $3.42 $3.75 $3.76 16% $3.13 $2.85 $3.42 $3.33 $2.97 $3.174 $2.21 $2.21 $2.71 $2.74 $2.82 $2.58 $1.72 $1.72 $2.15 $3.02 $1.71 $2.20 $2.06 $2.40 $0.47 $2.06 $1.61 2017A 2018E 2019E 2020E 2021E 2022E 2017A 2018E 2019E 2020E 2021E 2022E 69 Source: Management Projections, Thomson One, FactSet as of 10/3/2018. 23% 17% 17% 16% 5% 18% 19% 18% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
AMGP Status Quo AR Base Volumes Case, AR Downside Volumes Case, and Wall Street Consensus ($ in millions, unless otherwise noted) Wall Street Consensus Mgmt. Projections at AR Base Case Mgmt. Projections at AR Downside Productio n Case 2019E 2022E CAGR Commentary EBITDA $4.29 $559 AMGP is covered by 12 analysts as compared to 22 for AR and 14 for AM $3.81 $438 $3.42 $438 $458 Median price target of $23.00 as of 10/3/2018 $338 $359 $290 $390 $224 Average price target range of $19.00 - $27.00 as of 10/3/2018 $334 $137 $133 $213 $224 $137 $59 2017A 2018E 2019E 2020E 2021E 2022E 2019E 2022E CAGR 2019E 2022E CAGR Total Distributions to AMGP Shareholders Distributions per Share 1E $416 $2.23 $326 $1.75 $326 $1.75 $251 $266 $1.35 $1.43 $215 $1.15 $166 $0.89 $250 $1.34 $101 $0.54 $100 $0.54 $157 $165 $0.85 $0.89 $56 $0.30 $101 $0.54 2017A 2018E 2019E 2020E 2021E 2022E 2017A 2018E 2019E 2020E 2021E 2022E 70 Source: Management Projections, Thomson One, FactSet as of 10/3/2018. Note: WSC estimates available for AMGP through 2020E. 2017A distributions / share represents 4th quarter distribution annualized. 36% 27% 36% 27% 36% 27% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
PF AMGP Projections at Transaction AR Base Volumes Case & AR Downside Volumes Case ($ in millions, unless otherwise noted) ll Street Consensus EBITDA Mgmt. Projections at AR Base Case Mgmt. Projections at AR Downside Productio n Case Distributable Cash Flow 2019E 2022E CAGR 2019E 2022E CAGR $4.29 $1,642 $1,395 $3.81 $1,4$133.42 $1,212 $1,222 $1,008 $1,409 $1,195 $989 $822 $1,229 $1,054 $1,105 $928 $851 $695 2019E 2020E 2021E 2022E 2019E 2020E 2021E 2022E Distributable Cash Flow / Share Dividend / Share 2019E 2022E CAGR 1E 2019E 2022E CAGR $2.75 $2.24 $2.39 $1.87 $1.99 $1.56 $2.35 $1.90 $1.64 $2.08 $1.65 $1.21 $1.83 $1.44 $1.15 $1.38 2019E 2020E 2021E 2022E 2019E 2020E 2021E 2022E 71 Source: Management Projections, Thomson One, FactSet as of 10/3/2018. Note: Analysis based on fully diluted share count. 19% 19% 23% 18% 19% 20% 18% 18% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
Cost of Capital 72 CONFIDENTIAL DRAFT SUBJECT TO CHANGE
SQ AM Peer Group Cost of Equity Analysis Comparable Public Company Yield-Based Cost of Equity Expected Total Return Expected Current - 2020E Distribution CAGR Long-Term Economic Growth Estimate Expected Growth(1) Company Current Yield Implied Total Return 4.0% 5.6% 6.9% 12.5% CNX M idstream Partners LP 14.9% 4.0% 5.7% 6.0% 11.7% Hess M idstream Partners LP 15.2% 4.0% 5.6% 5.6% 11.2% BP M idstream Partners LP 14.7% 4.0% 5.5% 5.4% 10.9% Valero Energy Partners LP 13.7% 4.0% 5.6% 8.2% 13.8% EQT M idstream Partners LP 14.3% Cost of Equity Sensitized Peer Total Return Cost of Equity Barra Beta Low High (2) Raw Beta 0.86 1.16 (3) Spot Risk-Free Rate 3.1% 3.1% Equity Risk Premium (4) 6.0% 6.0% Source: Bloomberg, Duff & Phelps, FactSet, Federal Reserve, Company filings as of 10/3/2018. (1) Weights Expected Current 2020E distribution growth estimates 15% and long-term economic growth estimate by 85% to arrive at a long-term distribution growth estimate. Barra beta as of 3/23/2018. Illustrative low and high range reflects a -/+ 15% range around Barra beta. 20-year treasury bond yield as of 9/21/18. Duff & Phelps historical arithmetic premium. (2) (3) (4) 73 Cost of Equity8.3%10.1% Cost of Equity 11.2% 12.2% M edian 14.7% 4.0% 5.6% 6.0% 11.7% M ean 14.4% 4.0% 5.6% 5.9% 11.5% Western Gas Partners, L.P. 6.1% 4.0% 4.3% 8.4% 12.7% Shell M idstream Partners LP 11.6% 4.0% 5.1% 6.7% 11.8% Noble M idstream Partners LP 20.1% 4.0% 6.4% 5.4% 11.9% Phillips 66 Partners LP 10.5% 4.0% 5.0% 5.4% 10.4% A B C D E F CONFIDENTIAL DRAFT SUBJECT TO CHANGE
SQ AMGP Peer Group Cost of Equity Analysis Comparable Public Company Yield-Based Cost of Equity Expected Total Return Expected Current - 2020E Distribution CAGR Long-Term Economic Growth Estimate Expected Growth(1) Company Current Yield Implied Total Return 4.0% 4.8% 7.3% 12.1% Western Gas Equity Partners, LP 9.1% Cost of Equity Sensitized Peer Total Return Cost of Equity Barra Beta Low High (2) Raw Beta 0.70 0.95 (3) Spot Risk-Free Rate 3.1% 3.1% Equity Risk Premium (4) 6.0% 6.0% Source: Bloomberg, Duff & Phelps, FactSet, Federal Reserve, Company filings as of 10/3/2018. (1) Weights Expected Current 2020E distribution growth estimates 15% and long-term economic growth estimate by 85% to arrive at a long-term distribution growth estimate. Barra beta as of 3/23/2018. Illustrative low and high range reflects a -/+ 15% range around Barra beta. 20-year treasury bond yield as of 9/21/18. Duff & Phelps historical arithmetic premium. (2) (3) (4) 74 Cost of Equity7.4%8.9% Cost of Equity 10.8% 11.8% M edian 9.1% 4.0% 4.8% 6.5% 11.3% M ean 9.1% 4.0% 4.8% 6.5% 11.3% EQT GP Holdings LP 9.0% 4.0% 4.8% 5.8% 10.6% A B C D E F CONFIDENTIAL DRAFT SUBJECT TO CHANGE
PF AMGP Peer Group WACC Analysis Expected Total Return 2018E - 2020E Dividend CAGR Long-Term Economic Growth Estimate (1) Company Expected Growth Current Yield Implied Total Return Kinder M organ Inc 4.0% 7.1% 9.9% 25.0% 2.7% 4.0% 4.9% 4.8% 9.6% Plains All Americ an Pipeline GP 9.7% 4.0% 3.6% 6.2% 9.8% Targa Resourc es Corp. 1.4% 4.0% 4.8% 5.8% 10.6% EQT GP Holdings LP 9.0% 4.0% 5.6% 6.9% 12.5% CNX M idstream Partners LP 14.9% 4.0% 5.7% 6.0% 11.7% Hess M idstream Partners LP 15.2% 4.0% 5.6% 5.6% 11.2% BP M idstream Partners LP 14.7% 4.0% 5.5% 5.4% 10.9% Valero Energy Partners LP 13.7% Source: Bloomberg, Duff & Phelps, FactSet, Federal Reserve, Company filings as of 10/3/2018. (1) Weights Expected Current 2020E distribution growth estimates 15% and long-term economic growth estimate by 85% to arrive at a long-term distribution growth estimate. 75 M edian 12.0% 4.0% 5.2% 5.8% 11.2% M ean 12.4% 4.0% 5.3% 5.9% 11.1% Shell M idstream Partners LP 11.6% 4.0% 5.1% 6.7% 11.8% Noble M idstream Partners LP 20.1% 4.0% 6.4% 5.4% 11.9% EQT M idstream Partners LP 14.3% 4.0% 5.6% 8.2% 13.8% Western Gas Equity Partners, LP 9.1% 4.0% 4.8% 7.3% 12.1% The Williams Companies, Inc . 12.0% 4.0% 5.2% 4.3% 9.5% SemGroup Corporation 4.9% 4.0% 4.1% 8.1% 12.2% ONEOK, Inc . 10.5% 4.0% 5.0% 4.4% 9.3% A B C D E F CONFIDENTIAL DRAFT SUBJECT TO CHANGE
PF AMGP Peer Group WACC Analysis (cont.) Cost of Equity Comparable Company Yield-Based Cost of Equity Barra Beta Low High Low High (2) Raw Beta 0.84 1.14 (3) Spot Risk-Free Rate 3.1% 3.1% Cost of Equity 10.7% 11.7% Equity Risk Premium (4) 6.0% 6.0% Market Value of Equity $8,888 $8,888 Cost of Capital PF Capital Structure Cost of Capital Optimal Capital Structure(5) Low High Low High Cost of Equity Cost of Debt 10.7% 3.4% 11.7% 4.9% Cost of Equity 10.7% 3.4% 11.7% 4.9% (1) Cost of Debt Market Value of Equity Total Debt $8,888 $3,460 $8,888 $3,460 Market Value of Equity Total Debt $8,888 $1,420 $8,888 $1,420 Source: Bloomberg, Duff & Phelps, FactSet, Federal Reserve, Company filings as of 10/3/2018. (1) (2) (3) (4) (5) Illustrative low and high range reflects a -/+ 100 bps range around after tax current 5.6% cost of debt at AM. Barra beta as of 3/23/2018. Illustrative low and high range reflects a -/+ 15% range around Barra beta. 20-year treasury bond yield as of 9/21/18. Duff & Phelps historical arithmetic premium. Optimal Capital Structure based on Total Debt of 3.5x 2019E EBITDA 76 Cost of Equity9.7%10.8% Cost of Capital8.7%9.8% Cost of Capital10.7%11.7% Cost of Equity8.2%10.0% CONFIDENTIAL DRAFT SUBJECT TO CHANGE
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Table of Contents Antero Situation Overview I AM Financial Analysis II AMGP Financial Analysis III Analysis of Transaction IV Pro Forma Impact V Supplemental Materials VII Appendix 2 CONFIDENTIAL
I. Antero Situation Overview 3 CONFIDENTIAL
Summary of Project Alpine Transaction Each Non-AR AM Common Unit to receive: 1.6350 AMGP shares Spot AM Price Spot AMGP Price Spot XR $3.415 Cash For each common unit held, AR to receive: 1.6023 AMGP shares $3.00 Cash (2) Series B units will be exchanged for 17.354mm AMGP shares (total pro forma AMGP shares of 508.1mm) Implies ~$304mm valuation at market close as of October 5, 2018 Newly issued AMGP shares will vest on the same schedule as Series B units Unvested new AMGP shares do not accrue dividends PF AMGP will be reestablished as a Delaware C-corp 9-member independent, Board of Directors with no more than 4 appointed by AR, the Sponsors or Management AR, the Sponsors, and Management agree to vote in support of independent directors nominated by the Nominations & Governance Committee or in proportion to the votes cast by public stockholders 4 Source: Company filings, FactSet as of 10/5/2018. (1)Premium to unaffected date of 2/23/2018 prior to Special Committee formation announcement on 2/26/2018. (2)Fully diluted share count including full Series B vesting of 17.354mm shares. Governance Pro Forma Ownership AM Unitholders: ~59.9% Series B Elimination 2/23/2018 10/5/2018 Offer 2/23/2018 10/5/2018 $26.49$29.74 $19.19$17.51 1.3804x1.6985x $32.04 --1.8326x 21.0%7.7% ----(1) 32.8%7.9% Transaction Premiums Implied Premiums Consideration Proposal ComponentDescription CONFIDENTIAL
Antero Entities Ownership Overview ($ in millions, unless otherwise noted) Organizational Structure Overview Net Debt Sponsors Management Public Shareholders 72% A Units Management Public Unitholders Source: Company filings, FactSet as of 10/5/2018. (1)2/3 remain unvested, with 50% of those (1/3 of total) vesting 12/31/18 and the final 50% of those (1/3 of total) vesting 12/31/19. Value based on 6% of AMGP equity value above $2,000mm. (2)AR net debt consolidates AM. 5 Sponsor/M anagenent Ownership AR AM AM GP - Series A AM GP - Series B(1) Total # Shares (000s) Value ($MM) % Outstanding # Units (000s) Value ($MM) % Outstanding # Shares (000s) Value ($MM) % Outstanding Units (000s) Value ($MM) % Outstanding Warburg Pinc us LLC 46,609 $866 14.7% - - - 55,110 $965 29.6% - - - Yorktown Partners LLC 12,905 $240 4.1% - - - 15,534 $272 8.3% - - - Total Aggregate Investm ent $1,831 $512 Total Sponsor 59,514 $1,106 18.8% - - - 70,644 $1,237 37.9% - - - $2,343 Paul Rady 16,350 $304 5.2% 303 $9 0.2% 19,997 $350 10.7% 48 $45 48.7% Glen Warren 10,823 $201 3.4% 207 $6 0.1% 14,931 $261 8.0% 32 $30 32.5% O ther 3 $0 0.0% 353 $10 0.2% 2,937 $51 1.6% 19 $18 18.9% $708 $499 $80 Total M anagement 29,787 $505 8.6% 863 $26 0.5% 37,865 $663 20.3% 99 $93 100.0% $1,287 TO TAL 89,301 $1,611 27.3% 863 $26 0.5% 108,509 $1,900 58.3% 99 $93 100.0% $3,630 Holdings Management reholders 38% 19% 100%100% Series 100% Series Antero IDRB Units 9% Antero R esources (AR) (IDR LLC) Non-Econ100% IDRs GP 53% LP Antero Midstream Partners LP (AM) 47% LP Antero Midstream Partners GP LLC 20% Public Sha Antero Midstream GP LP (AMGP) 42% Metric AR AM AMGP Price (as of 10/5/2018) $18.58 $29.74 $17.51 Fully Dilluted Shares O/S 322 188 186 Market Equity Value 5,981 5,594 3,261 GP Equity Value - 3,261 - Total Equity Value 5,981 8,855 3,261 (2)5,274 1,400 (5) Series B Value - - 76 Total Enterprise Value $11,255 $10,255 $3,331 Value of AM Units Held $2,959 CONFIDENTIAL
Antero Midstream Timeline Relative Performance Since Committee Announcement (2/23/2018)(1) AM AM Peers AMGP AMGP Peers AM E&P Sponsored Peers AR AMZ 130% 120% 12% 110% 6% 5% 100% (2%) (9%) (10%) 90% (13%) 80% Feb-18 Mar-18 Apr-18 May-18 May-18 Jun-18 Jul-18 Aug-18 Aug-18 Sep-18 Source: Company filings, FactSet as of 10/5/2018. Note: AM peers include BPMP, CNXM, EQM, HESM, NBLX, PXSP, SHLX, WES, and VLP. AM E&P Sponsored peers include CNXM, EQM, HESM, and NBLX. AMGP peers include EQGP and WGP. Note: AM peer selection considered E&P sponsored MLPs and high-growth MLPs, categorized as such if current 2022E distribution growth CAGR is greater than 10%. (1)Indexed values reflect total return on investment. Distributions and dividends reinvested at current market price on date paid. 6 CONFIDENTIAL
Historical Exchange Ratio Analysis Since AMGP IPO (5/4/17) | Based on Spot Prices ($ in millions, unless otherwise noted) Historical AM/AMGP Exchange Ratio 2.20x 2.00x 1.8326x 1.80x 1.6985x 1.60x 1.40x 1.20x May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 7 Source: Company filings, FactSet as of 10/5/2018. AMGP Proposal Spot XR At 2/23/2018 Period Market X R % Premium / (Discount) to Market X R at Transaction At Transaction 1.8326x --Current 1.6985x 7.-9% 3-Month Average (Current) 1.6816x 9.0% 30-Day Average (Current) 1.7254x 6.2% 2/23/2018 1.3804x 32.8% 3-Month Average (at 2/23/2018) 1.4842x 23.5% 30-Day Average (at 2/23/2018) 1.4443x 26.9% Since AMGP IPO Average 1.5804x 16.0% CONFIDENTIAL
II. AM Financial Analysis 8 CONFIDENTIAL
AM Selected Comparable Company Analysis Dist. Growth 2018E to 2020E CAGR Unit Price at 10/5/2018 Total Equity Market Value(1) Enterprise Value % Dist. to GP/IDRs Price (Yield) DCF / LP Unit EBITDA 2018E Coverage Company Current 2018E 2019E 2020E 2019E 2020E DCF / Unit DCF / Unit Source: FactSet as of 10/5/2018 and Wall Street research. (1) (2) (3) (4) Values GP and IDR cash flow at LP yield for MLPs with non-public GPs. Defined as high-growth MLP if current 2020E distribution growth CAGR is greater than 10%. Based on Wall Street consensus estimates as compiled by FactSet. Antero Midstream Partners LP announced on February 26, 2018 that its Board of Directors had formed a special committee, in conjunction with the formation of special committees at both Antero Resources and Antero Midstream GP, to evaluate potential measures and transactions that could involve Antero Midstream. Implied unit prices are calculated based on Management projections. 9 (5) LP Distribution / Unit Yield Range Implied Unit Price AM at Mgmt.AM at WSC Low Median High Low Median High 2018E Distribution$1.72$1.718.4%6.2%5.4% Yield $20.48$27.83$31.68 Metric Multiple Range Implied Unit Price(5) AM at Mgmt.AM at WSC Low Median High Low Median High 2019E LP$2.73$2.718.6x11.3x13.3x $23.53$31.00$36.38 2020E LP$3.22$3.177.3x9.3x12.5x $23.69$29.83$40.39 Metric Multiple Range Implied Unit Price (5) AM at Mgmt.AM at WSC Low Median High Low Median High 2019E EBITDA$989$9318.1x10.6x11.8x $17.36$30.37$36.75 2020E EBITDA$1,222$1,1526.8x8.8x10.5x $18.92$31.73$43.01 Mean $5,786 $7,740 13% 21% 6.4% 6.6% 10.8x 9.7x 10.5x 8.7x 1.30x Median $4,078 $5,253 14% 28% 6.0% 6.2% 11.3x 9.3x 10.6x 8.8x 1.29x Low $1,277 $1,909 6% 0% 5.3% 5.4% 8.6x 7.3x 8.1x 6.8x 1.02x High $12,430 $16,616 20% 38% 8.3% 8.4% 13.3x 12.5x 11.8x 10.5x 2.00x E&P Sponsored Mean $5,693 $7,824 14% 18% 6.9% 7.0% 9.9x 9.0x 10.1x 8.1x 1.32x E&P Sponsored Median $1,688 $3,336 15% 12% 6.7% 6.9% 9.2x 8.6x 10.4x 8.1x 1.19x Other High - Growth MLP Mean $5,902 $7,635 13% 24% 5.8% 6.0% 12.0x 11.0x 10.9x 9.5x 1.28x Other High - Growth MLP Median $5,440 $6,996 13% 30% 5.6% 5.8% 11.6x 11.1x 10.7x 9.5x 1.32x AM at WSC (3,4) $29.74 $8,930 $10,325 28% 30% 5.2% 5.7% 11.0x 9.4x 11.1x 9.0x 1.24x AM at Mgmt. Estimates $29.74 $8,930 $10,325 29% 31% 5.2% 5.8% 10.9x 9.2x 10.4x 8.4x 1.28x E&P Spon. Western Gas Partners, L.P. $45.80 $12,430 $16,616 6% 35% 8.3% 8.4% 9.2x 9.2x 11.5x 10.3x 1.09x CNX Midstream Partners LP 19.92 1,436 1,909 15% 12% 6.7% 6.9% 8.6x 7.3x 8.1x 6.8x 1.29x HG & E&P Spon.(2)` Hess Midstream Partners LP 22.88 1,277 3,336 15% 2% 6.0% 6.2% 12.5x 11.4x 10.4x 7.6x 1.19x Noble Midstream Partners LP 40.36 1,688 2,856 20% 5% 5.3% 5.4% 9.9x 7.5x 9.8x 6.9x 2.00x EQT Midstream Partners LP 52.67 11,633 14,403 14% 35% 8.3% 8.4% 9.1x 7.9x 10.6x 8.8x 1.02x Other High Growth MLP Shell Midstream Partners LP 21.90 6,801 8,740 12% 28% 6.7% 6.8% 11.3x 10.8x 10.6x 8.5x 1.10x BP Midstream Partners LP 19.32 2,079 2,372 15% 0% 5.6% 5.7% 11.5x 9.3x 10.8x 8.9x 1.31x Valero Energy Partners LP 40.02 4,078 5,253 14% 32% 5.5% 5.6% 11.8x 11.4x 10.5x 10.5x 1.39x Phillips 66 Partners LP 52.86 10,648 14,173 10% 38% 5.4% 5.8% 13.3x 12.5x 11.8x 10.1x 1.33x M K L Enterprise Value / I J Price / G H LP Distribution / Unit / F E D C B A CONFIDENTIAL
Precedents | MLP Transactions Analysis 8/24/18 Enbridge Inc. Spectra Energy Partners, LP 27,810 12.0x 26,945 11.6x 3,276 5.7% 0% Yes C-Corp Affiliate 6/19/18 Cheniere Energy Inc. Cheniere Energy Partners LP Holdings 5,651 10.7x 5,526 10.4x 1,240 2.2% 0% No C-Corp Affiliate 3/26/18 Tall Grass Energy GP, LP Tallgrass Energy Partners, LP 8,361 12.0x 8,083 11.6x 1,686 0.6% 0% Yes C-Corp Affiliate 1/2/18 Archrock, Inc Archrock Partners, LP 2,438 9.6x 2,358 9.3x 607 23.4% 0% Yes C-Corp Affiliate 5/18/17 Energy Transfer Partners, LP PennTex Midstream Partners, LP 963 12.6x 873 11.4x 280 20.1% 100% Yes MLP Affiliate 4/3/17 World Point Terminals, Inc. World Point Terminals, LP 594 9.1x 570 8.8x 159 5.8% 100% Yes C-Corp Affiliate 1/27/17 Enbridge Energy Company Midcoast Energy Partners, LP 1,176 11.4x 1,194 11.6x 170 (8.6%) 100% Yes C-Corp Affiliate 10/24/16 American Midstream Partners LP JP Energy Partners LP 476 8.6x 476 8.6x 302 9.1% 0% No MLP 3rd Party 5/30/16 SemGroup Corp. Rose Rock Midstream 2,034 12.0x 2,034 12.0x 771 0.0% 0% Yes C-Corp Affiliate 8/1/16 Transocean, Inc Transocean Partners 1,202 3.5x 1,153 3.3x 259 20.8% 0% No C-Corp Affiliate 7/13/15 MPLX LP MarkWest Energy Partners, LP 22,360 22.8x 22,360 22.8x 16,612 36.3% 8% No MLP 3rd Party 4/6/15 Tesoro Logistics LP QEP Midstream Partners LP 1,145 7.5x 1,104 7.2x 394 8.6% 0% No MLP Affiliate 10/26/14 Williams Partners LP Access Midstream Partners LP 34,256 10.5x 34,256 10.5x 21,944 (0.2%) 0% No MLP Affiliate 11/12/14 Enterprise Products Partners LP Oiltanking Partners LP 4,289 23.0x 4,243 22.8x 1,392 1.7% 0% No MLP Affiliate 8/10/14 Kinder Morgan Inc. El Paso Pipeline Partners 13,677 11.9x 13,193 11.4x 5,421 15.4% 12% Yes C-Corp Affiliate 10/10/13 Regency Energy Partners LP PVR Partners LP 5,659 13.5x 5,659 13.5x 3,931 25.7% 1% No MLP 3rd Party 5/6/13 Inergy Midstream LP Crestwood Midstream Partners LP 2,643 14.6x 2,643 14.6x 1,661 14.5% 4% No MLP 3rd Party 2/23/11 Enterprise Products Partners Duncan Energy Partners LP 3,282 9.5x 2,973 8.6x 1,006 28.1% 0% No MLP Affiliate Mean 12,092 9.8x 11,802 9.6x 4,240 9.7% 37% Mean 15,264 10.8x 15,056 10.5x 6,217 10.1% 25% Mean 5,653 14.0x 5,642 14.0x 3,831 18.7% 22% Mean 12,720 11.6x 12,564 11.4x 5,586 12.4% 24% Source: Company filings, press releases, presentations and FactSet for pricing data. Represents precedent MLP transactions by affiliated and third party MLPs, Public GPs and C-Corps since 2011. Note: Considers transactions where target is an MLP. (1) (2) (3) (4) Based on Wall Street research. Non-adjusted transaction TEV values affiliated and non-affiliated units at offer price. Adjusted transaction TEV value affiliated units at market price and non-affiliated units at offer price. Illustrative transaction value for PF AMGP at Transaction includes conversion of Series B units, AM existing debt, and the purchase of AM units outstanding. Excludes transaction fees. AM public unitholder premium to Series B implied current XR of 1.8147x. 10 C-Corp Buying MLP Median $4,375 10.6x $4,284 10.5x $1,078 8.8% 6% Affiliate Median $4,289 10.6x $4,243 10.5x $1,240 8.6% 0% 3rd Party Median $4,858 13.5x $4,858 13.5x $1,982 15.2% 4% Overall Median $4,573 11.2x $4,550 11.2x $1,674 11.9% 0% At Transaction Premium to Current Antero Midstream GP LP (4)Antero Midstream Partners LP $11,144 11.3x ---- --7.9% 5% Yes C-Corp Affiliate 1/29/13 Kinder Morgan Energy Partners LP Copano Energy LLC 4,858 14.9x 4,858 14.9x 3,911 23.5% 0% No MLP 3rd Party 8/27/13 Plains All American LP PAA Natural Gas Storage LP 2,531 20.1x 2,434 19.4x 755 8.5% 0% No MLP Affiliate 7/24/14 Breitburn Energy Partners QR Energy LP 2,856 9.4x 2,856 9.4x 1,811 17.5% 19% No MLP 3rd Party 8/10/14 Kinder Morgan Inc. Kinder Morgan Energy Partners 52,566 8.8x 52,351 8.8x 27,351 12.0% 12% Yes C-Corp Affiliate 10/13/14 Targa Resources Partners LP Atlas Pipeline Partners LP 6,002 17.5x 6,002 17.5x 3,866 15.0% 3% No MLP 3rd Party 1/26/15 Energy Transfer Partners, LP Regency Energy Partners LP 18,593 11.0x 18,593 11.0x 11,276 13.2% 1% No MLP Affiliate 5/6/15 Crestwood Equity Partners, LP Crestwood Midstream Partners 6,920 11.9x 6,901 11.9x 3,381 17.2% 0% No MLP Affiliate 10/26/15 Western Refining, Inc. Northern Tier Energy 5,286 11.8x 5,185 11.5x 1,982 11.7% 65% Yes C-Corp 3rd Party 11/3/15 Targa Resources Corp. Targa Resources Partners LP 12,229 10.6x 12,138 10.5x 6,672 18.4% 0% Yes C-Corp Affiliate 9/26/16 Transcanada Columbia Pipeline Partners 3,464 4.9x 3,384 4.8x 915 11.1% 100% Yes C-Corp Affiliate 11/21/16 Sunoco Logistics Partners, LP Energy Transfer Partners, LP 54,455 9.7x 54,455 9.7x 21,965 (0.2%) 0% No MLP Affiliate 2/1/17 ONEOK, Inc ONEOK Partners, LP 23,654 12.0x 22,380 11.4x 9,309 25.8% 0% Yes C-Corp Affiliate 3/2/17 VTTI, B.V VTTI Energy Partners, LP 1,867 9.2x 1,842 9.1x 481 6.0% 100% Yes C-Corp Affiliate 8/29/17 Zenith Energy US, LP Arc Logistics Partners LP 736 12.9x 736 12.9x 407 15.2% 100% Yes MLP 3rd Party 2/7/18 Terra Nitrogen GP, Inc. Terra Nitrogen Co. LP 1,474 7.0x 1,432 6.8x $387 3.7% 100% Yes C-Corp Affiliate 5/17/18 Williams Companies Williams Partners, LP 57,793 12.6x 56,013 12.2x 10,427 6.4% 0% Yes C-Corp Affiliate 8/1/18 Energy Transfer Equity, L.P. Energy Transfer Partners 66,981 8.9x 66,915 8.9x 27,179 11.2% 0% No MLP Affiliate A B C D E F G H I J K L M Announcement Date Acquiror Target Transaction Value TEV / FY1 EBITDA(1,2) Adj. Transaction Value(1,3) Adj. TEV / FY1 EBITDA(1,3) Deal Value 1-Day Premium % Cash Taxable Transaction Buyer Type Transaction Type 9/18/18 Enbridge Inc. Enbridge Energy Partners $15,562 10.0x $15,541 10.0x $2,742 2.1% 0% Yes C-Corp Affiliate CONFIDENTIAL
AM DCF Analysis | AR Valuation Effective Date: 12/31/2018 Base Volumes Case Discounted Levered DCF Analysis Levered DCF Attributable to AM LP Unitholders Discounted Distribution Analysis Distributions Attributable to LP Unitholders 9.0x 10.5x 12.0x 8.0% 7.0% 6.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Levered DCF Analysis Supplemental Calculation Detail Discounted Distribution Analysis Supplemental Calculation Detail LP DCF per Unit $2.73 $3.22 $3.72 $4.26 LP Distribution Per Unit $2.21 $2.85 $3.42 $4.10 Disc ount Fac tor 0.954 0.867 0.788 Disc ount Fac tor 0.954 0.867 0.788 PV of LP DCF per Unit $2.61 $2.80 $2.93 PV of LP Dist. per Unit $2.11 $2.47 $2.70 Terminal M ultiple 10.5x Terminal Yield 7.0% Terminal Disc . Fac tor 0.751 Terminal Disc . Fac tor 0.751 11 Source: Management projections and FactSet as of 10/5/2018. Implied Terminal Value per Unit$44.01 Implied Value per Unit$51.28 Implied Terminal Value per Unit$33.63 Implied Value per Unit$41.97 Disc . LP Dist. Total$7.28 Disc . LP DCF Total$8.34 2019E 2020E 2021E2022E 2019E 2020E 2021E2022E $48.17 $53.99 $61.73 $45.78 $51.28 $58.62 $43.55 $48.76 $55.71 Discount Rate $39.03 $44.11 $49.18 $37.16 $41.97 $46.77 $35.42 $39.97 $44.52 Discount Rate 2022E Distribution Y ield 2022E DCF Multiple CONFIDENTIAL
AM Illustrative AR Base Volumes Case Discounted Future Value AM Status Quo $61.14 $54.01 $53.45 $47.68 $47.42 $46.94 $41.65 $40.94 $36.09 $29.74 2019E 2020E 2021E 12 Source: Management projections and FactSet as of 10/5/2018. Note: Valuation based on annual distributions. Assumptions Management projections Valuation date as of 12/31/18 Future share price calculated at FY1 annual distributions divided by yield Discounted to 12/31/18 at 10% cost of equity Interim distributions discounted upon receipt to 12/31/18 6.0% 7.0% 8.0% Current Unit Price Yield CONFIDENTIAL
AM DCF Analysis | AR Downside Valuation Effective Date: 12/31/2018 Volumes Case Discounted Levered DCF Analysis Levered DCF Attributable to AM LP Unitholders Discounted Distribution Analysis Distributions Attributable to LP Unitholders 9.0x 10.5x 12.0x 8.0% 7.0% 6.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Levered DCF Analysis Supplemental Calculation Detail Discounted Distribution Analysis Supplemental Calculation Detail LP DCF per Unit $2.39 $3.01 $3.32 $3.75 LP Distribution Per Unit $2.15 $2.58 $2.97 $3.42 Disc ount Fac tor 0.954 0.867 0.788 Disc ount Fac tor 0.954 0.867 0.788 PV of LP DCF per Unit $2.28 $2.61 $2.62 PV of LP Dist. per Unit $2.05 $2.24 $2.34 Terminal M ultiple 10.5x Terminal Yield 7.0% Terminal Disc . Fac tor 0.751 Terminal Disc . Fac tor 0.751 13 Source: Management projections and FactSet as of 10/5/2018. Implied Terminal Value per Unit$36.71 Implied Value per Unit$43.33 Implied Terminal Value per Unit$29.62 Implied Value per Unit$37.13 Disc . LP Dist. Total$6.62 Disc . LP DCF Total$7.52 2019E 2020E 2021E2022E 2019E 2020E 2021E2022E $34.56 $39.03 $43.50 $32.90 $37.13 $41.36 $31.36 $35.37 $39.38 Discount Rate $40.75 $45.60 $52.06 $38.74 $43.33 $49.45 $36.87 $41.22 $47.02 Discount Rate 2022E DCF Multiple 2022E Distribution Y ield CONFIDENTIAL
AM Illustrative AR Downside Volumes Case Discounted Future Value AM Status Quo $51.56 $47.21 $45.14 $43.06 $41.07 $40.32 $37.20 $36.48 $32.81 $29.74 2019E 2020E 2021E 14 Source: Management projections and FactSet as of 10/5/2018. Note: Valuation based on annual distributions. Assumptions Management projections Valuation date as of 12/31/18 Future share price calculated at FY1 annual distributions divided by yield Discounted to 12/31/18 at 10% cost of equity Interim distributions discounted upon receipt to 12/31/18 6.0% 7.0% 8.0% Current Unit Price Yield CONFIDENTIAL
III. AMGP Financial Analysis 15 CONFIDENTIAL
AMGP Selected Comparable Company Analysis Unit Price at 10/5/2018 Total Entity Equity Value Total Entity TEV Implied GP Equity Value Implied GP TEV Price (Yield)( 1) GP EBITDA( 2) CAFD( 3) 2018E - 2022E Dist. CAGR Company Current 2018E 2019E 2020E 2019E 2020E EQT GP Holdings LP(6) $21.28 $6,437 $6,938 $5,288 $6,436 5.8% 5.7% 14.9x 12.2x 13.8x 11.9x 25.5% Western Gas Equity Partners, LP 32.46 7,107 8,350 4,810 7,105 7.2% 7.3% 14.9x 12.9x 12.6x 11.1x 11.2% CAFD With Series B Conversion Source: FactSet as of 10/5/2018 and Wall Street research. Note: Implied GP value calculated as the equity value of GP - equity value of the LP units held + net debt held by the GP. (1) (2) Total entity distribution yield calculated as GP distribution per unit / share over current GP unit / share price. Total entity enterprise value calculated as the equity value of GP + net debt held by the GP. GP EBITDA calculated as total distributions to the GP. For AMGP, EBITDA calculated as total distributions to IDR, LLC less Series B payments. Implied GP equity value calculated as GP share / unit price times GP shares outstanding. Cash available for distribution (CAFD) calculated as GP EBITDA less interest expense and maintenance capex. Antero Midstream Partners LP announced on February 26, 2018 that its Board of Directors had formed a special committee, in conjunction with the formation of special committees at both Antero Resources and Antero Midstream GP, to evaluate potential measures and transactions that could involve Antero Midstream. Implied share prices are calculated based on Management projections. EQGP Pro Forma for RMP acquisition announced April 2018. Total HoldCo Distributions with Series B Conversion calculated as HoldCo distributions with post-tax Series B payments added back in over (AMGP FD S/O + 17.3mm Series B converted units). (3) (4) (5) (6) (7) 16 Total HoldCo Distributions Yield Range Implied Total Entity Share Price(7) AMGP at Mgmt. Estimates AMGP at WSC Low Median High Low Median High 2018E Distribution $106 $105 7.3% 6.5% 5.7% Yield $7.15 $8.02 $9.14 Series B AMGP at Mgmt. Estimates AMGP at WSC Low Median High Low Median High 2019E $166 $177 12.6x 13.2x 13.8x $10.29 $10.76 $11.24 AMGP at Mgmt. Estimates AMGP at WSC Low Median High Low Median High With Series 2019E EBITDA $237 $237 14.9x 14.9x 14.9x B Conversion $17.30 $17.30 $17.30 Implied GP Share Price (5) Multiple Range Metric Implied Total Entity Share Price(5) Multiple Range Metric Series B Mean $6,772 $7,644 $5,049 $6,771 6.5% 6.5% 14.9x 12.6x 13.2x 11.5x 18.3% Median $6,772 $7,644 $5,049 $6,771 6.5% 6.5% 14.9x 12.6x 13.2x 11.5x 18.3% Low $6,437 $6,938 $4,810 $6,436 5.8% 5.7% 14.9x 12.2x 12.6x 11.1x 11.2% High $7,107 $8,350 $5,288 $7,105 7.2% 7.3% 14.9x 12.9x 13.8x 11.9x 25.5% AMGP at WSC(4) $17.51 $3,336 $3,336 $3,336 $3,331 2.9% 3.1% 20.2x 14.7x 20.2x 14.1x 58.2% AMGP at Mgmt Estimates $17.51 $3,336 $3,336 $3,336 $3,331 2.9% 3.1% 14.9x 9.9x 20.1x 13.3x 58.2% M K L Implied GP Equity Value / I J Total Entity Enterprise Value / G H Total Entity Distribution / Unit / F E D C B A CONFIDENTIAL
AMGP DCF Analysis | AR Base Volumes Case AMGP with Series B Value Conversion | Valuation Effective Date: 12/31/2018 Discounted Levered DCF(1) Analysis Distributions Attributable to IDR, LLC | Before Series B Payments Discounted Distribution Analysis | Pre-Series B Payment AMGP Distributions | 1.0x Coverage | SQ AM Distribution Policy 12.0x 14.0x 16.0x 7.0% 6.0% 5.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Levered DCF(1) Analysis Supplemental Calculation Detail Discounted Distribution Analysis Supplemental Calculation Detail Adj. GP Dist. Per Share(2) Disc ount Fac tor HoldCo DCF $178 $270 $352 $449 $0.88 $1.33 $1.73 $2.21 Disc ount Fac tor 0.954 0.867 0.788 0.954 0.867 0.788 PV of GP FCF $170 $234 $277 PV of GP Dist. per Share $0.84 $1.15 $1.36 Terminal M ultiple 14.0x Terminal Yield 6.0% Terminal Disc . Fac tor 0.751 Terminal Disc . Fac tor 0.751 AM GP Shares O /S (Inc lusive of 17.354mm Series B Conversion Shares) 203.6 17 Source: Management projections and FactSet as of 10/5/2018. (1)AMGP discounted DCF defined as HoldCo DCF with Series B payments added back in. Discounted cost of equity at 10.0%. (2)Adj. GP distribution per share calculated as (AMGP DCF + Series B payment added back) / (fully diluted AMGP shares outstanding + 17.354mm converted Series B units). Implied Equity Value per Share $26.57 Implied Terminal Value per Share $27.64 Implied Equity Value per Share $30.99 Implied Equity Value $5,408 Disc . Adj. Dist. Total $3.35 Disc . IDR Distribution Total $682 2019E 2020E 2021E 2022E 2019E 2020E 2021E 2022E $28.48 $32.66 $38.50 $27.04 $30.99 $36.52 $25.69 $29.44 $34.67 Discount Rate $24.48 $27.98 $31.49 $23.25 $26.57 $29.88 $22.10 $25.25 $28.39 Discount Rate 2022E Distribution Y ield 2022E CAFD Multiple CONFIDENTIAL
AMGP Illustrative AR Base Volumes Case Discounted Future Value AMGP Status Quo $38.15 $32.35 $31.96 $28.21 $26.97 $26.15 $23.40 $21.93 $18.92 $17.51 2019E 2020E 2021E 18 Source: Management projections and FactSet as of 10/5/2018. Note: Valuation based on annual distributions. Net of Series B value. Assumptions Management projections Valuation date as of 12/31/18 Future share price calculated at FY1 annual distributions divided by yield Discounted to 12/31/18 at 10% cost of equity Interim distributions discounted upon receipt to 12/31/18 5% 6% 7% Current Share Price Yield CONFIDENTIAL
AMGP DCF Analysis | AR Downside Volumes Case AMGP with Series B Value Conversion | Valuation Effective Date: 12/31/2018 Discounted Levered DCF(1) Analysis Distributions Attributable to IDR, LLC | Before Series B Payments Discounted Distribution Analysis | Pre-Series B Payment AMGP Distributions | 1.0x Coverage | SQ AM Distribution Policy 12.0x 14.0x 16.0x 7.0% 6.0% 5.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Levered DCF(1) Analysis Supplemental Calculation Detail Discounted Distribution Analysis Supplemental Calculation Detail Adj. GP Dist. Per Share(2) Disc ount Fac tor HoldCo DCF $169 $231 $287 $352 $0.83 $1.14 $1.41 $1.73 Disc ount Fac tor 0.954 0.867 0.788 0.954 0.867 0.788 PV of GP FCF $161 $201 $227 PV of GP Dist. per Share $0.79 $0.99 $1.11 Terminal M ultiple 14.0x Terminal Yield 6.0% Terminal Disc . Fac tor 0.751 Terminal Disc . Fac tor 0.751 AM GP Shares O /S (Inc lusive of 17.354mm Series B Conversion Shares) 203.6 19 Source: Management projections and FactSet as of 10/5/2018. (1)AMGP discounted IDR distribution defined as HoldCo DCF with Series B payments added back in. Discounted cost of equity at 10.0%. (2)Adj. GP distribution per share calculated as (AMGP DCF + Series B payment added back) / (fully diluted AMGP shares outstanding + 17.354mm converted Series B units). Implied Equity Value per Share $21.07 Implied Terminal Value per Share $21.64 Implied Equity Value per Share $24.53 Implied Equity Value $4,289 Disc . Adj. Dist. Total $2.89 Disc . IDR Distribution Total $589 2019E 2020E 2021E 2022E 2019E 2020E 2021E 2022E $22.58 $25.85 $30.42 $21.44 $24.53 $28.86 $20.38 $23.31 $27.41 Discount Rate $19.44 $22.19 $24.93 $18.47 $21.07 $23.67 $17.57 $20.03 $22.49 Discount Rate 2022E Distribution Y ield 2022E CAFD Multiple CONFIDENTIAL
AMGP Illustrative AR Downside Volumes Case Discounted Future Value AMGP Status Quo $30.14 $26.26 $25.60 $22.48 $22.36 $22.18 $19.27 $18.87 $16.29 $17.51 2019E 2020E 2021E 20 Source: Management projections and FactSet as of 10/5/2018. Note: Valuation based on annual distributions. Net of Series B value. Assumptions Management projections Valuation date as of 12/31/18 Future share price calculated at FY1 annual distributions divided by yield Discounted to 12/31/18 at 10% cost of equity Interim distributions discounted upon receipt to 12/31/18 5% 6% 7% Current Share Price Yield CONFIDENTIAL
IV. Analysis of Transaction 21 CONFIDENTIAL
Analysis at Transaction Value ($ in millions, unless otherwise noted) At Transaction(3) Fully Diluted AM Units Outstanding Owned by Public 88.2 AM Net Debt / (Cash) AMGP Net Debt / (Cash) Implied AMGP Equity Value(1) 1,642 - $3,564 Comparable Metrics AM Statistic Trading Median Transaction Median (NTM) Multiples: 2019E EBITDA 2020E EBITDA $989 $1,222 11.3x 9.1x 10.6x 8.8x 11.2x 2019E DCF(2) 2020E DCF(2) Current Yield to Public $514 $606 11.6x 9.8x 11.3x 9.3x $1.66 5.2% 6.0% AM Statistic Trading Median Transaction Median (NTM) 2019E EBITDA 2020E EBITDA $851 $1,105 13.1x 10.1x 10.6x 8.8x 11.2x 2019E DCF(2) 2020E DCF(2) Current Yield to Public $450 $567 13.2x 10.5x 11.3x 9.3x $1.66 5.2% 6.0% Source: Company filings, and FactSet as for 10/5/2018. 22 (1) (2) (3) Includes Series B units exchanged for 17.354mm AMGP shares DCF attributable to the LP unitholders. DCF multiples based on total all-in implied equity consideration for AM public and AR. Each Public AM Common Unit to receive: 1.6350 AMGP shares, $3.415 Cash. For each common unit held, AR to receive: 1.6023 AMGP shares and $3.00 Cash. Volumes Case AR Downside AR Base Case Implied AM Enterprise Value $11,144 Implied Fully-Diluted AM Equity Value Owned by Public $2,829 Total Implied Fully-Diluted AM Equity Value $5,938 All-in Exchange Ratio to Public (At Current AMGP Sh. Price of $17.51) 1.8326x Premium to Implied AM Unit Price to Public (AMGP Share Price x All-in XR) 7.9% Implied AM Unit Price to Public $32.09 E D C B A CONFIDENTIAL
Contribution Analysis | AR Base Case AMGP DCF Contribution Based On Actual Forecasted Taxes (Including on Series B Cash Flow) Contribution Analysis Implied Ownership Implied Exchange Ratio | Series B Adjusted(1,2) AM AMGP 2017A DCF 2017A DCF 2018E DCF 2018E DCF 2019E DCF 2019E DCF 2020E DCF 2020E DCF 2021E DCF 2021E DCF 2022E DCF 2022E DCF 2017A Distributions 2017A Distributions 5.334x 2018E Distributions 2018E Distributions 2019E Distributions 2019E Distributions 2020E Distributions 2020E Distributions 2021E Distributions 2021E Distributions 2022E Distributions 2022E Distributions Source: Management projections. FactSet as of 10/5/2018. Note: AM DCF calculated as LP Interest in EBITDA less interest expense, maintenance capex, and tax withholding reimbursements paid to AR. AMGP DCF calculated as IDR DCF from AM to IDR LLC less G&A and cash taxes plus post-tax Series B payments. Note: AM distributions calculated as distributions attributable to LP unitholders. AMGP distributions defined as distributions attributable to IDR, LLC less taxes paid on full distributions available to IDR, LLC less G&A. Note: Cash tax shield from Series B depreciation of ~$6mm per year. (1)Implied exchange ratios utilize adjusted AMGP share count of fully diluted AMGP shares outstanding + 17.354mm converted Series B units. (2)At Transaction: 1.6350x XR and $3.415 cash consideration / unit. 23 76.0% 24.0% 70.4% 29.6% 66.6% 33.4% 65.8% 34.2% 65.0% 35.0% 64.6% 35.4% 82.9% 17.1% 75.9% 24.1% 71.4% 28.6% 68.2% 31.8% 66.5% 33.5% 65.2% 34.8% At Transaction: 1.8326x 3.175x 2.381x 1.996x 1.926x 1.860x 1.821x 3.148x 2.493x 2.146x 1.987x 1.872x CONFIDENTIAL
Contribution Analysis | AR Downside Volumes Case AMGP DCF Contribution Based On Actual Forecasted Taxes (Including on Series B Cash Flow) Contribution Analysis Implied Ownership Implied Exchange Ratio | Series B Adjusted(1,2) AM AMGP 2017A DCF 2017A DCF 2018E DCF 2018E DCF 2019E DCF 2019E DCF 2020E DCF 2020E DCF 1.954x 2021E DCF 2021E DCF 2022E DCF 2022E DCF 2017A Distributions 2017A Distributions 5.334x 2018E Distributions 2018E Distributions 2019E Distributions 2019E Distributions 2020E Distributions 2020E Distributions 2021E Distributions 2021E Distributions 2022E Distributions 2022E Distributions Source: Management projections. FactSet as of 10/5/2018. Note: AM DCF calculated as LP Interest in EBITDA less interest expense, maintenance capex, and tax withholding reimbursements paid to AR. AMGP DCF calculated as IDR DCF from AM to IDR LLC less G&A and cash taxes plus post-tax Series B payments. Note: AM distributions calculated as distributions attributable to LP unitholders. AMGP distributions defined as distributions attributable to IDR, LLC less taxes paid on full distributions available to IDR, LLC less G&A. Note: Cash tax shield from Series B depreciation of ~$6mm per year. (1)Implied exchange ratios utilize adjusted AMGP share count of fully diluted AMGP shares outstanding + 17.354mm converted Series B units. (2)At Transaction: 1.6350x XR and $3.415 cash consideration / unit. 24 76.0% 24.0% 70.5% 29.5% 69.1% 30.9% 66.1% 33.9% 65.7% 34.3% 64.9% 35.1% 82.9% 17.1% 75.9% 24.1% 71.8% 28.2% 69.3% 30.7% 67.8% 32.2% 66.5% 33.5% At Transaction: 1.8326x 3.175x 2.386x 2.235x 1.913x 1.849x 3.148x 2.549x 2.260x 2.105x 1.987x CONFIDENTIAL
Ratios(1) Implied Exchange AM & AMGP AR Base Volumes Case 8.0% 1.576x 2.009x 8.0% 1.653x 2.167x 1.780x 1.690x 10.0% 1.580x 2.012x 10.0% 1.655x 2.168x 1.741x 1.652x 12.0% 1.583x 2.014x 12.0% 1.657x 2.168x 1.690x 1.603x AR Downside Volumes Case 8.0% 1.759x 2.237x 8.0% 1.764x 2.306x 1.893x 1.804x 10.0% 1.762x 2.239x 10.0% 1.766x 2.306x 1.852x 1.763x 12.0% 1.766x 2.241x 12.0% 1.768x 2.306x 1.798x 1.710x Source: Management projections. FactSet as of 10/5/2018. 25 Note: AM distributable cash flow defined as distributable cash flow attributable to AM LP unitholders. AMGP distributable cash flow defined as HoldCo DCF with pre-tax Series B payments added back in. AMGP share values based on Shares Outstanding including 17.354mm additional shares from Series B conversion. (1)Low AM to high AMGP and high AM to low AMGP implied unit and share prices compared to assess full range of potential exchange ratios. 2.014x 1.972x 1.915x 1.340x 1.342x 1.345x 1.386x 1.390x 1.394x Low Mid High Discount Rate Discount Rate YE 2019 YE 2020 YE 2021 Low MedHigh Low MedHigh Implied XR Implied XR PV of FSP at 10% Discount Rate PV of Future Share Price Discounted Distribution Approach Discounted Levered DCF Approach 1.907x 1.867x 1.813x 1.251x 1.254x 1.256x 1.240x 1.244x 1.248x Low Mid High Discount Rate Discount Rate YE 2019 YE 2020 YE 2021 Low MedHigh Low MedHigh PV of FSP at 10% Discount Rate Implied XR Implied XR PV of Future Share Price Discounted Distribution Approach Discounted Levered DCF Approach At Transaction: 1.8326x CONFIDENTIAL
Premiums Paid Analysis | MLP Transactions 8/24/18 Spectra Energy Partners, LP Enbridge Inc. 27,810 5.7% 19.4% 5/17/18 Yes (0.3%) 0.6% 6/19/18 Cheniere Energy Partners LP Holdings Cheniere Energy Inc. 5,651 2.2% 10.7% 5/16/18 No (3.5%) 9.4% 3/26/18 Tallgrass Energy Partners, LP Tall Grass Energy GP, LP 8,361 0.6% (18.4%) 2/7/18 Yes 40.3% 21.7% 1/2/18 Archrock Partners, LP Archrock, Inc 2,438 23.4% 23.4% NA Yes 27.1% 5.6% 5/18/17 PennTex Midstream Partners, LP Energy Transfer Partners, LP 963 20.1% 17.8% 10/24/16 Yes 0.6% (4.4%) 4/3/17 World Point Terminals, LP World Point Terminals, Inc. 594 5.8% 5.8% NA Yes N/A (10.1%) 1/27/17 Midcoast Energy Partners, LP Enbridge Energy Company 1,176 (8.6%) (8.6%) NA Yes (19.1%) (14.4%) 10/24/16 JP Energy Partners LP American Midstream Partners 476 9.1% 9.1% NA No (60.9%) (7.5%) 8/1/16 Transocean Partners LLC Transocean Inc. 1,202 20.8% 20.8% NA No 14.3% (8.4%) 11/3/15 Targa Resources Partners LP Targa Resources Corp. 12,229 18.4% 18.4% NA Yes (7.3%) (13.0%) 7/13/15 MarkWest Energy Partners, LP MPLX LP 22,360 36.3% 36.3% NA No (44.8%) (27.4%) 4/6/15 QEP Midstream Partners LP Tesoro Logistics LP 1,145 8.6% (14.0%) 10/18/14 No (7.7%) (32.5%) 10/26/14 Access Midstream Partners LP Williams Partners LP 34,256 (0.2%) (5.7%) 6/13/14 No (17.3%) (43.3%) 11/12/14 Oiltanking Partners LP Enterprise Products Partners LP 4,289 1.7% (0.9%) 9/30/14 No (21.5%) (41.9%) 8/10/14 El Paso Pipeline Partners Kinder Morgan Inc. 13,677 15.4% 15.4% NA Yes (49.7%) (41.7%) 10/10/13 PVR Partners LP Regency Energy Partners LP 5,659 25.7% 25.7% NA No N/A (33.9%) 5/6/13 Crestwood Midstream Partners LP Inergy Midstream LP 2,643 14.5% 14.5% NA No N/A (35.7%) 2/23/11 Duncan Energy Partners LP Enterprise Products Partners 3,282 28.1% 28.1% NA No 35.5% (22.8%) 26 Source: Company filings, press releases, presentations and FactSet for pricing data. Represents precedent MLP transactions by affiliated and third party MLPs, Public GPs and C-Corps since 2011. Note: Considers transactions where target is an MLP. Unaffected 1-Day premium for transaction as of 2/23/2018, prior to Special Committee formation announcement. Median 11.5% 12.6% Mean 11.9% 18.3% Taxable Transactions Median 6.2% 13.6% Taxable Transactions Mean 9.5% 10.3% At Transaction Premium to Current 7.9% 32.8% 1/29/13 Copano Energy LLC Kinder Morgan Energy Partners LP 4,858 23.5% 23.5% NA No N/A (32.0%) 8/27/13 PAA Natural Gas Storage LP Plains All American LP 2,531 8.5% 8.5% NA No (47.2%) (34.2%) 7/24/14 QR Energy LP Breitburn Energy Partners 2,856 17.5% 17.5% NA No N/A (44.8%) 8/10/14 Kinder Morgan Energy Partners Kinder Morgan Inc. 52,566 12.0% 12.0% NA Yes (49.7%) (41.7%) 10/13/14 Atlas Pipeline Partners LP Targa Resources Partners LP 6,002 15.0% 15.0% NA No N/A (40.5%) 1/26/15 Regency Energy Partners LP Energy Transfer Partners, LP 18,593 13.2% 13.2% NA No N/A (35.7%) 5/6/15 Crestwood Midstream Partners Crestwood Equity Partners, LP 6,920 17.2% 17.2% NA No (44.3%) (35.7%) 10/26/15 Northern Tier Energy Western Refining, Inc. 5,286 11.7% 11.7% NA Yes N/A (10.3%) 5/30/16 Rose Rock Midstream SemGroup Corp. 2,034 0.0% 0.0% NA Yes (12.2%) (3.7%) 9/26/16 Transcanada Columbia Pipeline Partners LP 3,464 11.1% 9.9% 3/16/16 Yes (7.8%) (7.1%) 11/21/16 Energy Transfer Partners, LP Sunoco Logistics Partners, LP 54,455 (0.2%) (0.2%) NA No (12.2%) (3.9%) 2/1/17 ONEOK Partners, LP ONEOK, Inc 23,654 25.8% 25.8% NA Yes 25.0% (11.9%) 3/2/17 VTTI Energy Partners, LP VTTI, B.V 1,867 6.0% 6.0% NA Yes N/A (12.2%) 8/29/17 Arc Logistics Partners LP Zenith Energy US, LP 736 15.2% 15.2% NA Yes N/A 6.4% 2/7/18 Terra Nitrogen Co. LP Terra Nitrogen GP, Inc. 1,474 3.7% 3.7% NA Yes N/A 3.0% 5/17/18 Williams Partners, LP Williams Companies 57,793 6.4% 16.5% 3/15/18 Yes 16.1% 9.5% 8/1/18 Energy Transfer Partners, LP Energy Transfer Equity, L.P. 66,981 11.2% 11.2% NA No (0.5%) 4.2% Premium A B C D E F G H I J Announcement Date Target Acquiror Transaction Value 1-Day Premium Unaffected 1-Day Premium Unaffected Date Taxable Transaction Acquiror Performance Since Day Prior to Announcement AMZ Performance Since Day Prior to Announcement 9/18/18 Enbridge Energy Partners Enbridge Inc. $15,562 2.1% 11.6% 5/17/18 Yes 4.7% 4.4% CONFIDENTIAL
V. Pro Forma Impact for Transaction 27 CONFIDENTIAL
Transaction Assumptions Transaction Assumptions Sources & Uses At Proposed Transaction Transaction effective on 12/31/2018 AMGP Equity Issued (1) AM Debt Rolled to AMGP Balance Sheet Revolver Draw $5,632 1,642 622 Purchase Non-Affiliated AM Units O/S Purchase Affiliated AM Units O/S Conversion of Series B Units Cash Consideration - Affiliated Units Cash Consideration - Non-Affiliated Units Transaction Fees(2) AM Existing Debt $2,554 $2,774 304 297 301 24 1,642 To acquire AM, AMGP will convert into a C-Corp in a 100% stock transaction Base case assumes: Each outstanding Public AM common unit exchanged for 1.6350 AMGP shares and $3.415 cash per AM unit, for an all-equity equivalent exchange ratio of 1.8326x Each outstanding AM common unit held at AR will be AMGP Ownership Comparison exchanged for 1.6023 AMGP shares and $3.00 cash per AM unit, for an all-equity equivalent exchange ratio of 1.7759x All existing Series B units exchanged for 17.354mm AMGP shares Assumes Company provided pf coverage ratio to drive pf dividend policy Existing Public 15.0% Prior AM Public 28.8% Step-up depreciation due to Mgmt. 11.2% Sponsors 38.0% Existing Public 40.9% Capex allocated on a 5-20 year MACRs schedule depending on capex category Sponsors 13.9% Goodwill based on inside tax basis and 704(c) and 743(b) extrapolation provided by PwC AR 31.2% Mgmt. 21.1% $650mm refinancing of revolver debt with 5.5% term loan issued on 12/31/2018 New capex financed by $500mm senior unsecured issuance in 2019, 2020, and 2022 at a 5.000% interest rate 28 Source: FactSet as of 10/5/2018. (1)Includes equity issued for Series B unit conversion into AMGP shares. (2)Provided by Management. 3.4% Series B share under Transaction Pro Forma Status Quo Total Uses$7,897 Total Sources$7,897 Uses Sources CONFIDENTIAL
Accretion / (Dilution) Pre Unitholder Tax(1,2) | AM & AMGP | AR Base Case AM Distributable Cash Flow Accretion / (Dilution) - % AMGP Distributable Cash Flow Accretion / (Dilution) - % At 1.0x AM Coverage 31.0% At 1.8326x Exchange Ratio (1) 1.8326x XR 17.8% 17.2% 16.4% 17.0% 25.2% 23.8% 12.7% 12.2% 9.7% 9.4% 19.0% 2H 2018E 2019E 2020E 2021E $1.10 $0.98 $2.74 $2.72 $3.24 $3.30 $3.75 $3.97 $4.36 $0.22 $0.61 2019$E1.08 2$03.2000E $3.623021E $0.06 $0.40 2022E 2019E 2020E 2021E 2022E ($0.12) ($0.02) ($0.02) $0.26 Pro Forma AMGP: $1.64 $1.98 $2.38 $2.74 AM Distribution Accretion / (Dilution) - % At 1.8326x Exchange Ratio AMGP Distribution Accretion / (Dilution) - % 39.5% 3.2% 3.2% 3.2% 3.3% 19.3% 10.1% 3.5% 2019E 2020E 2021E 2022E 2019E 2020E 2021E 2022E Pro Forma AMGP: $1.24 $1.60 $1.93 $2.31 29 Source: Management projections and FactSet as of 10/5/2018. (1)Pre Unitholder Tax; 1.8326x represents implied XR at 1.6350x equity XR and cash consideration of $3.415 / unit. SQ AM Coverage:1.301x1.158x1.103x1.045x PF AMGP Coverage:1.315x1.236x1.237x1.186x Status Quo AMGP:$0.89 $1.35 $1.75 $2.23 $ Acc / (Dil):$0.35 $0.26 $0.18 $0.08 PF AMGP Coverage:1.315x 1.236x 1.237x 1.186x Status Quo AM:(1) $2.21$2.85$3.42$4.10 Pro Forma AMGP at 1.8326x:$2.28$2.94$3.53$4.23 $ Acc / (Dil):$0.07$0.09$0.11$0.13 Status Quo AMGP: $1.25 $1.58 $1.92 $2.30 $ Acc / (Dil):$0.39 $0.40 $0.46 $0.44 Status Quo AM:(1) $2.73 $3.22 $3.72 $4.26 PF AMGP at 1.8326x: $3.00 $3.63 $4.36 $5.02 $ Acc / (Dil):$0.27 $0.41 $0.64 $0.76 CONFIDENTIAL
Accretion / (Dilution) Pre Unitholder Tax(1,2) | AM & AMGP | AR Downside Volumes Case AM Distributable Cash Flow Accretion / (Dilution) - % AMGP Distributable Cash Flow Accretion / (Dilution) - % At 1.0x AM Coverage 36.8% At 1.8326x Exchange Ratio 1.8326x XR 17.0% 16.41%4.4% 14.8% 26.7% 26.0% 121..21%% 9.4% 20.9% 5.9% 2H 2018E 2019E 2020E 2021E $1.10 $0.98 $2.74 $2.72 $3.24 $3.30 $3.75 $3.97 $4.36 $0.22 $0.61 2019$E1.08 2$03.2000E $3.623021E $0.06 $0.40 2022E 2019E 2020E 2021E 2022E ($0.12) ($0.02) ($0.02) $0.26 PF AMGP at 1.8326x: $2.53 $3.35 $3.80 $4.31 AM Distribution Accretion / (Dilution) - % At 1.8326x Exchange Ratio AMGP Distribution Accretion / (Dilution) - % 36.0% 2.3% 1.8% 1.8% 24.8% (1.7%) 15.3% 8.6% 2019E 2020E 2021E 2022E 2019E 2020E 2021E 2022E Pro Forma AMGP: $1.15 $1.44 $1.65 $1.90 30 Source: Management projections and FactSet as of 10/5/2018. (1)Pre Unitholder Tax; 1.8326x represents implied XR at 1.6350x equity XR and cash consideration of $3.415 / unit. SQ AM Coverage:1.149x1.206x1.142x1.114x PF AMGP Coverage:1.203x1.268x1.257x1.238x Status Quo AMGP:$0.85 $1.15 $1.43 $1.75 $ Acc / (Dil):$0.30 $0.29 $0.22 $0.15 PF AMGP Coverage:1.203x 1.268x 1.257x 1.238x Status Quo AM:(1) $2.15$2.58$2.97$3.42 Pro Forma AMGP at 1.8326x:$2.11$2.64$3.02$3.48 $ Acc / (Dil):($0.04)$0.06$0.05$0.06 Status Quo AM:(1) $2.39 $3.01 $3.32 $3.75 $ Acc / (Dil):$0.14 $0.33 $0.48 $0.56 Status Quo AMGP: $1.01 $1.44 $1.65 $1.94 Pro Forma AMGP: $1.38 $1.83 $2.07 $2.35 $ Acc / (Dil):$0.37 $0.39 $0.43 $0.41 CONFIDENTIAL
Growth Comparison at Transaction Pre Unitholder Tax | SQ AM, SQ AMGP, & PF AMGP AR Base Case AM $2.73 $3.22 $3.72 $4.26 16% AM GP @ 1.0x AM Coverage $1.25 $1.58 $1.92 $2.30 23% PF AM GP $1.64 $1.98 $2.38 $2.74 19% AR Downside Volumes Case AM $2.39 $3.01 $3.32 $3.75 16% AM GP @ 1.0x AM Coverage $1.01 $1.44 $1.65 $1.94 24% PF AM GP $1.38 $1.83 $2.07 $2.35 19% AR Base Case AM $2.21 $2.85 $3.42 $4.10 23% AM GP $0.89 $1.35 $1.75 $2.23 36% PF AM GP $1.24 $1.60 $1.93 $2.31 23% AR Downside Volumes Case AM $2.15 $2.58 $2.97 $3.42 17% AM GP $0.85 $1.15 $1.43 $1.75 27% PF AM GP $1.15 $1.44 $1.65 $1.90 18% Source: Management projections and FactSet as of 10/5/2018. Note: Coverage assumptions as provided by Management. PF AMGP coverage extrapolated based on fixed distributions provided for AR Base Case. SQ AM coverage for AR Base Case extrapolated based on fixed distributions provided for AR Base Case. SQ AM coverage for AR Downside Volumes base extrapolated based on fixed distributions provided for AR Downside Volumes Case. 31 SQ AM M gmt Dist Coverage (Base Case) 1.301x 1.158x 1.103x 1.045x SQ AM M gmt Dist Coverage (AR Downside Volumes Case) 1.149x 1.206x 1.142x 1.114x PF AM GP M gmt. Dividend Coverage (Base Case) 1.315x 1.236x 1.237x 1.186x PF AM GP M gmt. Dividend Coverage (AR Downside Volumes Case) 1.203x 1.268x 1.257x 1.238x 2019E 2020E 2021E 2022E 2019E - 2022E CAGR Distributions / Dividends per Unit / Share 2019E 2020E 2021E 2022E 2019E - 2022E CAGR DCF per Unit / Share CONFIDENTIAL
PF AMGP Selected Public Trading Comparables Midstream C-Corps & High Growth MLPs Dist. Growth 2018E to 2020E CAGR(1) Unit Price at 10/5/2018 Price (Yield) DCF(2,3) EBITDA Company Equity Value TEV Current 2018E 2019E 2020E 2019E 2020E 2019E Kinder Morgan Inc ONEOK, Inc. Plains All American Pipeline GP SemGroup Corporation Targa Resources Corp. The Williams Companies, Inc. Tallgrass Energy, LP $18.06 68.61 24.95 22.00 58.51 27.62 23.91 $39,855 28,204 7,064 1,730 13,375 33,559 6,705 $76,409 36,542 6,872 4,556 19,591 54,599 6,705 4.4% 4.8% 4.8% 8.6% 6.2% 4.9% 8.2% 4.4% 4.7% 4.8% 8.7% 6.2% 4.9% 8.4% 25% 11% 10% 5% 1% 12% 5% 9.0x 15.3x 8.7x 7.1x 14.1x 10.9x 7.1x 8.6x 13.8x 8.1x 6.4x 10.3x 10.4x 7.7x 10.0x 14.3x 19.2x 10.5x 12.5x 12.4x 7.1x 9.7x 12.4x 19.2x 10.1x 10.3x 12.4x 7.1x 2.6x 1.3x 1.8x 1.5x 1.1x 1.3x 0.0x CNX Midstream Partners LP EQT Midstream Partners LP Hess Midstream Partners LP Noble Midstream Partners LP BP Midstream Partners LP Shell Midstream Partners LP Valero Energy Partners LP $19.92 52.67 22.88 40.36 19.32 21.90 40.02 $1,436 11,633 1,277 1,688 2,079 6,801 4,078 $1,909 14,403 3,336 2,856 2,372 8,740 5,253 6.7% 8.3% 6.0% 5.3% 5.6% 6.7% 5.5% 6.9% 8.4% 6.2% 5.4% 5.7% 6.8% 5.6% 15% 14% 15% 20% 15% 12% 14% 11.5x 9.8x 14.1x 10.7x 13.8x 13.4x 12.6x 8.6x 9.1x 12.5x 9.9x 11.5x 11.3x 11.8x 11.6x 14.3x 12.7x 12.9x 16.3x 14.5x 13.3x 8.1x 10.6x 10.4x 9.8x 10.8x 10.6x 10.5x 1.3x 1.0x 1.2x 2.0x 1.3x 1.1x 1.4x Source: FactSet as of 10/5/2018 and Wall Street research. Note: Assumes AMGP share price of $17.58 for offer / AM Proposal metrics. (1) (2) (3) (4) For C-corps, CAGR calculated using Q4 2017 dividend annualized and 2020E dividend. Calculated as equity value to LP DCF. DCF calculated as EBITDA less interest expense and maintenance capital. Defined as high-growth MLP if current 2020E distribution growth CAGR is greater than 10%. 32 PF AMGP at Transaction$17.58$5,938$11,1445.2%5.3%28%11.6x9.8x11.3x9.1x1.3x Mean$11,752$18,2646.0%6.1%13%11.6x10.2x13.4x11.1x1.4x Median$6,801$6,8725.6%5.7%14%11.5x10.3x12.9x10.5x1.3x Midstream C-Corp Mean$20,631$33,0955.6%5.6%11%10.9x9.6x13.1x12.3x1.6x Midstream C-Corp Median$20,790$28,0664.9%4.9%10%9.9x9.5x12.5x11.4x1.4x High-Growth MLP Mean$4,142$5,5536.3%6.4%15%12.3x10.7x13.7x10.1x1.3x High-Growth MLP Median$2,079$3,3366.0%6.2%15%12.6x11.3x13.3x10.5x1.3x High - Growth MLPs(4) Non-IDR Midstream C-Corps L Coverage J K Enterprise Value / H I Equity Value / G E F Distribution / Unit / D C B A CONFIDENTIAL
Has / Gets Analysis | AR Base Case AM Pre Unitholder Tax | Valuation Effective Date: 12/31/2018 Discounted Levered DCF Analysis Discounted Levered DCF Analysis 9.0x 10.5x 12.0x 10.0x 12.0x 14.0x 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Distribution Analysis Discounted Distribution Analysis 8.0% 7.0% 6.0% 7.0% 6.0% 5.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Cash Flow | Unlevered FCF(2) | Discounted at WACC 11.0x 13.0x 15.0x SQ AM Coverage 1.301x 1.158x 1.103x 1.045x 7.0% 8.5% 10.0% 33 Source: Management projections and FactSet as of 10/5/2018. (1)Implied XR at 1.6350x equity XR and cash consideration of $3.415 / unit. Cash consideration added to implied share price at 1.6350x XR. (2)Unlevered free cash flow defined as PF AMGP EBITDA less cash taxes and capital expenditures. Implied equity value per share backs out implied AM Q4 2018 net debt per share. PF AM GP Coverage 1.315x 1.236x 1.237x 1.186x $49.83 $58.46 $67.09 $47.77 $56.05 $64.32 $45.83 $53.77 $61.71 Discount Rate 2019E 2020E 2021E 2022E 2022E Terminal M ultiple SQ vs PF Distribution Coverage $53.16 $60.30 $70.30 $50.66 $57.42 $66.89 $48.34 $54.75 $63.71 Discount Rate $48.17 $53.99 $61.73 $45.78 $51.28 $58.62 $43.55 $48.76 $55.71 Discount Rate 2022E Distribution Yield 2022E Distribution Yield $47.65 $54.77 $61.88 $45.50 $52.24 $58.97 $43.50 $49.88 $56.26 Discount Rate $39.03 $44.11 $49.18 $37.16 $41.97 $46.77 $35.42 $39.97 $44.52 Discount Rate 2022E DCF M ultiple 2022E DCF M ultiple XR Adjusted PF AMGP Implied Share Price |1.8326x XR(1) Stand Alone AM Implied Unit Price CONFIDENTIAL
Has / Gets Analysis | AR Downside Volumes Case AM Pre Unitholder Tax | Valuation Effective Date: 12/31/2018 Discounted Levered DCF Analysis Discounted Levered DCF Analysis 9.0x 10.5x 12.0x 10.0x 12.0x 14.0x 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Distribution Analysis Discounted Distribution Analysis 8.0% 7.0% 6.0% 7.0% 6.0% 5.0% 8.0% 8.0% 10.0% 10.0% 12.0% 12.0% Discounted Cash Flow | Unlevered FCF(2) | Discounted at WACC 11.0x 13.0x 15.0x SQ AM Coverage 1.149x 1.206x 1.142x 1.114x 7.0% 8.5% 10.0% 34 Source: Management projections and FactSet as of 10/5/2018. (1)Implied XR at 1.6350x equity XR and cash consideration of $3.415 / unit. Cash consideration added to implied share price at 1.6350x XR. (2)Unlevered free cash flow defined as PF AMGP EBITDA less cash taxes and capital expenditures. Implied equity value per share backs out implied AM Q4 2018 net debt per share. PF AM GP Coverage 1.203x 1.268x 1.257x 1.238x $44.03 $51.43 $58.83 $42.23 $49.33 $56.43 $40.54 $47.35 $54.16 Discount Rate 2019E 2020E 2021E 2022E 2022E Terminal M ultiple SQ vs PF Distribution Coverage $44.78 $50.65 $58.87 $42.72 $48.28 $56.06 $40.80 $46.07 $53.44 Discount Rate $40.75 $45.60 $52.06 $38.74 $43.33 $49.45 $36.87 $41.22 $47.02 Discount Rate 2022E Distribution Yield 2022E Distribution Yield $41.58 $47.68 $53.79 $39.73 $45.50 $51.28 $38.00 $43.47 $48.95 Discount Rate $34.56 $39.03 $43.50 $32.90 $37.13 $41.36 $31.36 $35.37 $39.38 Discount Rate 2022E DCF M ultiple 2022E DCF M ultiple XR Adjusted PF AMGP Implied Share Price |1.8326x XR(1) Stand Alone AM Implied Unit Price CONFIDENTIAL
Illustrative Discounted Future Value Pre Unitholder Tax | SQ AM & PF AMGP | AR Base Case & AR Downside Volumes Case PF AMGP | 1.8326x XR Adjusted(1) | AR Base Case SQ AM | AR Base Case $54.65 $53.45 $47.42 $40.94 $36.09 2019E SQ AM | AR de Volumes $47.88 $43.06 $37.20 $39.18 $40.32 $36.59 $36.48 $32.81 2019E 2020E 2021E 2019E 2020E 2021E 35 Source: Management projections and FactSet as of 10/5/2018. Note: Valuation based on annual distributions. (1)Implied XR at 1.6350x equity XR and cash consideration of $3.415 / unit. Assumptions Management projections | Valuation date as of 12/31/18 Future share price calculated at FY1 distributions divided by yield Discounted to 12/31/18 at 10% cost of equity Interim distributions discounted upon receipt to 12/31/18 $29.74 Current AM Unit Price 5.0% 6.0% 7.0% Yield $61.14 $54.01 $46.94 $47.68 $41.65 2020E 2021E $67.08 $60.60 $57.15 $51.50 $46.31 $50.06 $45.00 $40.35 2019E 2020E 2021E Downside Volumes Case $51.566.0% $47.21 $45.147.0% $41.07 8.0% PF AMGP | 1.8326x XR Adjusted(1) | AR Downsi Case$56.04 $52.55 $49.43 $44.75 $41.94 $42.04 Yield $29.74 5.0% 6.0% 7.0% Yield 6.0% 7.0% 8.0% Current AM Unit Price Yield CONFIDENTIAL
VII. Supplemental Materials 36 CONFIDENTIAL
SQ AM After Tax Distribution Discount Model CONFIDENTIAL 7% Yield-Based Terminal Value | AR Base Volumes Case BT LP Distribution Per Unit AT LP Distribution Per Unit Discount Factor PV of LP Dist. per Unit $4.10 $4.09 0.717 $2.93 $2.21 0.954 $2.11 $2.85 0.867 $2.47 $3.41 0.788 $2.69 Terminal Yield 7.0% Tax Calculation: Average Purchase Price Existing RoC $26.64 ($6.15) Beginning Tax Basis $20.49 Beg. Avg. Tax Basis / Unit Less: Distributions / Unit Plus: Net Income Allocated $20.49 (2.21) (0.78) $17.50 (2.85) (0.66) $13.99 (3.42) (0.38) $10.19 (4.10) 0.05 Avg. EOY Basis / Unit $17.50 $13.99 $10.19 $6.14 Implied Terminal Value per Unit Less: Basis at YE 2022E Less: PAL at YE 2022E $58.57 ($6.14) ($3.96) Gain Subject to Tax $48.47 Capital Gain Ordinary Gain $29.53 $18.94 Total Tax on Gain per Unit Tax on Ordinary Gain - 33.4% Tax on Capital Gain - 23.8% State Tax on Ordinary Income - 5.2% State Tax on Capital Gain - 5.2% $6.33 7.03 0.98 1.53 Total Effective Tax Rate After-Tax Future Value per Unit Terminal Disc. Factor 32.7% $42.70 0.683 37 Source: Management projections and FactSet as of 10/5/2018. Note: Assumes Unit sold on 12/31/2022. Implied Present Value per Unit at 6% Terminal Yield $44.10 Implied Present Value per Unit at 7% Terminal Yield $39.36 Implied Present Value per Unit at 8% Terminal Yield $35.81 Total Tax on Gain $15.87 Total Gain $48.47 2019E 2020E 2021E 2022E Implied Terminal Future Value per Unit $58.57 Disc. LP Dist. Total $10.20 2019E 2020E 2021E 2022E
SQ AM After Tax Distribution Discount Model CONFIDENTIAL 7% Yield-Based Terminal Value | AR Downside Volumes Case BT LP Distribution Per Unit AT LP Distribution Per Unit Discount Factor PV of LP Dist. per Unit $3.42 $3.41 0.717 $2.44 $2.14 0.954 $2.05 $2.58 0.867 $2.24 $2.96 0.788 $2.34 Terminal Yield 7.0% Tax Calculation: Average Purchase Price Existing RoC $26.64 ($6.15) Beginning Tax Basis $20.49 Beg. Avg. Tax Basis / Unit Less: Distributions / Unit Plus: Net Income Allocated $20.49 (2.15) (0.78) $17.57 (2.58) (0.66) $14.32 (2.97) (0.38) $10.97 (3.42) 0.05 Avg. EOY Basis / Unit $17.57 $14.32 $10.97 $7.61 Implied Terminal Value per Unit Less: Basis at YE 2022E Less: PAL at YE 2022E $48.86 ($7.61) ($3.96) Gain Subject to Tax $37.29 Capital Gain Ordinary Gain $18.35 $18.94 Total Tax on Gain per Unit Tax on Ordinary Gain - 33.4% Tax on Capital Gain - 23.8% State Tax on Ordinary Income - 5.2% State Tax on Capital Gain - 5.2% $6.33 4.37 0.98 0.95 Total Effective Tax Rate After-Tax Future Value per Unit Terminal Disc. Factor 33.9% $36.23 0.683 38 Source: Management projections and FactSet as of 10/5/2018. Note: Assumes Unit sold on 12/31/2022. Implied Present Value per Unit at 6% Terminal Yield $37.75 Implied Present Value per Unit at 7% Terminal Yield $33.80 Implied Present Value per Unit at 8% Terminal Yield $30.84 Total Tax on Gain $12.63 Total Gain $37.29 2019E 2020E 2021E 2022E Implied Terminal Future Value per Unit $48.86 Disc. LP Dist. Total $9.06 2019E 2020E 2021E 2022E
PF AMGP After Tax Cash Flow 6% Terminal Yield Value | Unadjusted Exchange Ratio | AR Base Case At 1.6651x Exchange Ratio Tax Basis at YE 2018 Taxes Incurred in Merger (Assumed Paid in 2020) Cash Received from Offer Stepped Up Basis Upon Close $20.49 0.00 0.00 $32.04 XR Adj. PF AMGP BT Dist. per Share % RoC % QD Return of Capital Qualified Dividends Project Tax Liability $2.07 74.3% 25.7% $1.54 $0.53 ($0.13) $2.67 69.9% 30.1% $1.89 $0.81 ($0.19) $3.21 62.3% 37.7% $2.02 $1.22 ($0.29) $3.85 52.3% 47.7% $2.03 $1.86 ($0.44) Terminal Yield Sale at 12/31/22 - Terminal FV per XR Adj. PF AMGP Share Less: Basis on Conversion Plus: Dividends Treated as Return of Capital 6.00% $64.13 ($32.04) $7.48 Gain on Sale Tax on Gain Tax Rate(1) 29.0% $39.57 $11.47 Sale at 12/31/22 - Terminal FV per XR Adj. PF AMGP Share Less: Taxes on Gain $64.13 ($11.47) Net Proceeds $52.66 Total Net Cash Flow Total Cash In Flow Total Cash Out Flow - Tax on Dividends Total Cash Out Flow - Taxes in Merger $1.82 $1.94 $2.29 $2.48 $2.63 $2.92 $2.97 $3.41 $52.66 $64.13 ($0.13) ($0.19) ($0.29) ($0.44) ($11.47) $0.00 39 Source: Management projections and FactSet as of 10/5/2018. (1)Inclusive of Federal & State capital gains taxes. Discount Factor 0.954 0.867 0.788 0.717 0.683 Implied Present Value per Share $1.73 $1.98 $2.07 $2.13 $35.97 XR Adj. PF AMGP Implied Present Value per Share $43.89 XR Adj. PF AMGP AT Dist. per Share $1.94 $2.48 $2.92 $3.41 AM current price of $29.74 Cash consideration used to pay all taxes for an average public AM unitholder; any additional cash available assumed to purchase secondary shares 2019E 2020E 2021E 2022E Terminal CONFIDENTIAL
PF AMGP After Tax Cash Flow 6% Terminal Yield Value | Unadjusted Exchange Ratio | Downside Case At 1.6651x Exchange Ratio Tax Basis at YE 2018 Taxes Incurred in Merger (Assumed Paid in 2020) Cash Received from Offer Stepped Up Basis Upon Close $20.49 0.00 0.00 $32.04 XR Adj. PF AMGP BT Dist. per Share % RoC % QD Return of Capital Qualified Dividends Project Tax Liability $1.91 91.6% 8.4% $1.75 $0.16 ($0.04) $2.40 72.4% 27.6% $1.76 $0.67 ($0.16) $2.75 66.6% 33.4% $1.85 $0.93 ($0.22) $3.16 54.8% 45.2% $1.75 $1.45 ($0.34) Terminal Yield Sale at 12/31/22 - Terminal FV per XR Adj. PF AMGP Share Less: Basis on Conversion Plus: Dividends Treated as Return of Capital 6.00% $52.73 ($32.04) $7.12 Gain on Sale Tax on Gain Tax Rate(1) 29.0% $27.80 $8.06 Sale at 12/31/22 - Terminal FV per XR Adj. PF AMGP Share Less: Taxes on Gain $52.73 ($8.06) Net Proceeds $44.67 Total Net Cash Flow Total Cash In Flow Total Cash Out Flow - Tax on Dividends Total Cash Out Flow - Taxes in Merger $1.84 $1.88 $2.08 $2.24 $2.31 $2.53 $2.48 $2.82 $44.67 $52.73 ($0.04) ($0.16) ($0.22) ($0.34) ($8.06) $0.00 40 Source: Management projections and FactSet as of 10/5/2018. (1)Inclusive of Federal & State capital gains taxes. Discount Factor 0.954 0.867 0.788 0.717 0.683 Implied Present Value per Share $1.75 $1.81 $1.82 $1.78 $30.51 XR Adj. PF AMGP Implied Present Value per Share $37.67 XR Adj. PF AMGP AT Dist. per Share $1.88 $2.24 $2.53 $2.82 AM current price of $29.74 Cash consideration used to pay all taxes for an average public AM unitholder; any additional cash available assumed to purchase secondary shares 2019E 2020E 2021E 2022E Terminal CONFIDENTIAL
After-Tax Discounted Dividend / Distribution Analysis XR Adjusted Implied PV / Unit at Various 2022E Distribution Yield | 10% Equity Discount Rate AR Base Case SQ AM Coverage 1.301x 1.158x 1.103x 1.045x 8% 7% 6% $35.81 $39.36 $44.10 Tax-Adjusted Equity Only XR All-In XR 7% 6% 5% (1 AMGP Proposal AR Downside Volumes Case SQ AM Coverage 1.149x 1.206x 1.142x 1.114x 8% 7% 6% $30.84 $33.80 $37.75 Tax-Adjusted Equity Only XR All-In XR 7% 6% 5% (1 AMGP Proposal Source: Management projections and FactSet as of 10/5/2018. Note: Cash consideration of $3.415 per AM unit. Tax calculations provided by Management. Ordinary gain tax rate for AM accounts for Federal ordinary income tax rate of 37%, individual MLP investor deduction rate of 20% and 3.8% ACA tax rate. Ordinary gain tax rate for PF AMGP accounts for Federal ordinary income tax rate of 37% and 3.8% ACA tax rate. (1)Transaction based on Non-AR Unitholders receiving 1.6350x AMGP shares + $3.415 cash consideration, AR receives 1.6023x + $3.000 cash consideration, and Series B receive 17.354mm AMGP shares 41 XR ) 1.8326x 1.6651x $34.02 $37.67 $42.79 PF AMGP 2022E Dividend Yield PF AM GP Coverage 1.203x 1.268x 1.257x 1.238x 2019E 2020E 2021E 2022E SQ AM 2022E Distribution Yield XR ) 1.8326x 1.6651x $39.45 $43.89 $50.11 PF AMGP 2022E Dividend Yield PF AM GP Coverage 1.315x 1.236x 1.237x 1.186x 2019E 2020E 2021E 2022E SQ AM 2022E Distribution Yield AM current price of $29.74 Cash consideration used to pay all taxesfor an average public AM unitholder; any additional cash available assumed to purchase secondary shares For comparison purposes, AM Proposal assumes issuance of 17.354mm AMGP shares for Series B Unitholders CONFIDENTIAL
Certain TPH Relationships Relationship Disclosure TPH Investment Banking & Antero Midstream Partners, Antero Midstream Partners GP and Antero Resources In May 2017, TPH served as co-manager on Antero Midstream GPs $875 million initial public offering In October 2016, TPH served as financial advisor to Antero Resources on its $170 million sale of 17,000 net acres in southwest PA In June 2016, TPH served as a co-manager on Antero Resources $762 million follow-on equity offering In November 2014, TPH served as a co-manager on Antero Midstreams $1 billion initial public offering In May 2014, TPH served as a senior co-manager on Antero Resources $744 million follow-on equity offering In October 2013, TPH acted as senior co-manager on Antero Resources $1.57 billion initial public offering 42 TPH is a full service securities firm engaged in securities trading, brokerage and private equity and investment management activities as well as providing investment banking and other financial services. In the ordinary course of business, TPH and its affiliates, including Perella Weinberg Partners, may acquire, hold or sell, for their own accounts and the accounts of customers, equity, debt and other securities and financial instruments (including bank loans and other obligations) of AM, AMGP, AR, their affiliates, other prospective transaction participants and other companies that may be involved in the transactions, as well as provide investment banking and other financial services to such companies. TPH has in the past and may in the future provide financial advisory services to AM, AMGP, AR and other transaction participants. In addition, TPH, its affiliates and certain of their employees, including members of the team performing this engagement, as well as certain private equity and investment management funds associated or affiliated with TPH in which they may have financial interests, may from time-to-time acquire, hold or make direct or indirect investments in or otherwise finance a wide variety of companies, including the parties, other transaction participants and their respective affiliates. TPH merged with Perella Weinberg Partners (PWP) in November 2016 CONFIDENTIAL
Appendix 43 CONFIDENTIAL
Financial Projections 44 CONFIDENTIAL
Management Projections: AR Base Volumes Case AR ($ in millions, unless otherwise noted) Production Volumes (MMcfe/d) EBITDAX(1) Gas NGLs (excl. Ethane) Ethane Oil EBITDAX (Excl. Hedges) Income from Hedges LP Distributions from AM $2,728 5,194 105 8 $405 87 05 342 $338 $219 $282 2,253 $170 $585 261 56 1,847 261 40 $1,4$016,250 $1,250$464 173 $112 31 173 $135 $2 6 2016 2017 2018 2019 2020 2021 2022 2016A 2017A 2018E 2019E 2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Capital Expenditures Free Cash Flow(2) Free Cash Flow Cumulative FCF DrillingLeasehold Acquisition & Maintenance Acquisitions $2,112 $2,216 12 $1,615 $1,684 $1$,18,56460 ,660 $1,102 $519 9 $792 589 2016 2017 2018 20192020 2021 2022 2018A 2019A 2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management projections, Company Filings. (1) AM fully consolidated in SEC financial statement. (2) Free cash flow net of land maintenance capital. 45 $19 $500 $513 $273 $310 $588 $2,216 $1,854 $1,780 $1,850 ,1 $105$2 0 $2,00$72 $163 1,85 $1,780 $ $103 $1,747$ $163 $1 $1, 684$81 $1,699 $588 $238 $164 $149 $95 ,$51,1589 $238 1$,14,55211 $1,464 $164 $$11,,446542 Cumulative Free Cash Flow 2018E-2022E Base Case $1,615 Downside Pric ing Case $184 Downside Case $909 $2,305 $2, 72 $2,086$2,100 $2 $338 0 ,305 $35 $4 $ $2,288 $1,774 $1,7 $ $219 2,08 6$ $282 2,10 $37 $1,93$01 74 $224 $1,406 $170 $1,594$ 3 $112 4$01,283$ $1,003 $135 $1,140 $214 03 $901 $290 4,545 4,545 5,194 471 1 05 471 974 33,,994455 402 402 87 834 3,33,33030 342 7700 3,644 3,644 2022 771122 2,702 2,70256 282686 5599 3,222 3,222 2021 603 603 2,822 2,822 2020 1,8472,253 2,382 2,382 2019 465 105 40 7 419 1,92 1,920 2018 332 31 105 1,6 1,620 201 1,3 1,379 201 CONFIDENTIAL
Management Projections: AR AR Downside Pricing at Base Volumes Case ($ in millions, unless otherwise noted) Production Volumes (MMcfe/d) EBITDAX(1) GasNGLs (excl. Ethane) Ethane Oil EBITDAX (Excl. Hedges) Income from Hedges LP Distributions from AM 5,194 5,194 105 4,545 87 $2,728 $2,263 402 05 7700 $2,100 $405 6 $1,7 $219 $282 261 56 $170 261 40 $1,4$016,250 $1,250$464 173 1,847 40 $112 31 $135 31 3 $817 6 2016 2017 2018 2019 2020 2021 2022 2016A 2017A 2018E 2019E 2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Capital Expenditures Free Cash Flow(2) Free Cash Flow (Net of Land Maintenance Capex) Cumulative FCF DrillingLeasehold Acquisition & Maintenance Acquisitions $2,112 $2,216 12 $1,684 $1$,18,56460 ,660 9 $317 589 $182 $184 ($20) 2020E 2 2018A 2019A 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management projections, Company Filings. (1) AM fully consolidated in SEC financial statement. (2) Free cash flow net of land maintenance capital. 46 $19 $298 $297 ($115) $588 $2,216 $1,854 $1,780 $1,850 ,1 02 $105$2 0 $2,00$72 2 $163 1,85 2021 $1,780 202 $ $103 $1,747$ 0 $163 $1 2 $1, 20 684$81 $1,699 19 $588 $238 $164 $149 $95 ,$51,1589 018 $238 1$,14,55211 2017 $1,464 $164 $$11,,446542 2016 Cumulative Free Cash Flow 2018E-2022E Base Case $1,615 Downside Pric ing Case $184 Downside Case $909 $2,305 $1,886$2,08 $1,811$1,889 $1,774$338 $4 $ 74$219 $338 $1,406 $170 $282 $155 $2 $1,703 $851 $388 $128 $1 $1,422 $112 $1,003 $135 $1,140 $ $1,141 $214 03 $901 40$ $291 4,545 471 1 05 471 974 33,,994455 402 87 834 3,33,33030 334422 3,644 3,644 2022 771122 2,702 2,2532,70256 282686 5599 3,222 3,222 2021 603 603 2,822 2,822 2020 1,8472,253 2,382 2,382 2019 465 105 173 7 419 1,92 1,920 2018 332 105 1,6 1,620 201 1,3 1,379 201 CONFIDENTIAL
Management Projections: AR Downside Volumes Case AR ($ in millions, unless otherwise noted) Production Volumes (MMcfe/d) EBITDAX(1) Gas NGLs (excl. Ethane) Ethane Oil EBITDAX (Excl. Hedges)Income from HedgesLP Distributions from AM 5,194 4,505105 4,545 471 $2,728 89 $405 $2,305 $2,100 $2,086 $1,774 $1,786 $338 712 $1,77$41,669 $219 $282 $1,537 $1,520 2,253 $170 $201 261 56 1,847 261 40 $1,4$016,252 $1,250$464 173 $112 31 173 $135 $2 31 $1 3 6 2016 2017 2018 2019 2020 2021 2022 2016A 2017A 2018E 2019E 2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Capital Expenditures Free Cash Flow(2) Free Cash Flow (Net of Land Maintenance Capex) Cumulative FCF DrillingLeasehold Acquisition & Maintenance Acquisitions $2,216 12 $588 $909 $769 $608 $47 2016 2017 201820192020 2021 2022 2018A 2019A 2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management projections, Company Filings. (1) AM fully consolidated in SEC financial statement. (2) Free cash flow net of land maintenance capital. 47 $20 $589 $655 $588 $2,216 $1,854 $2,1 $163 $1$,18,56460 $1,850 $1,780 $238 $164 $1$61349 $1,660$1,6$814,443 $1,494 $238 1$,14,55211 $1,464 $164 $$11,,446542 $1,251 $1,179 $81 589 $1,362 $105 $2 $1,388 $103 9$ $1,148 $95 ,511 $1,084 Cumulative Free Cash Flow 2018E-2022E Base Case $1,615 Downside Pric ing Case $184 Downside Case $909 $1,406 $170 $326 $244 $285 $851 $ $112 $388 $155 $1,305 $1,003 $135 $1,140 $128 $1,107 $214 $ $905 03 $902 $616 $291 4,046 3,945402 87 452 3,605 3,330342 70 392 82 876 3,121 2,702286 59 331 58 834 756 648 2,70256 259 47 3,644 3,087 2022 3,222 2,816 2021 534 1,8472,253 2,822 2,568 2020 465 105 40 7 2,382 2,281 2019 419 1,92 1,920 2018 332 105 1,6 1,620 201 1,3 1,379 201 CONFIDENTIAL
Management Projections: AR Base Volumes Case AM ($ in millions, unless otherwise noted) Operations & EBITDA Low Pressure (Bcf/d) | Water Handling (MBbls/d) Capital Expenditures Gathering & Compression Water Handling Earn-out payment Stonewall MPLX JV Low Pressure Water Delivery Produced Water EBITDA $1,292 $491 $1,460 $925 $1,642 $1,081 $1, $1,642 413 $176 $1,413 $1,222 $1,222 $989 $989 $730 $730 7 $529 $404 $529 6 404 $81 5 $14 4 4 $220 6A 4 3.1 2.7 2018E 2019E 2020E 2.0121E 2022E 2016A 2017A 2016A 2017A 2018E 2019E 2020E 2021E 2022E 0.8 1.1 1.2 1.5 DCF20a17nA d Distrib20u18tEions per20U19nE it 2022E Distribution Breakdown 016A 2020E 2021E2018E 2022E CAGR LP DCF per Unit LP Distributions per Unit AM LPs AMGP (IDRs) Series B Uni ts $4.26 $3.72 $4.29 $3.22 $3.75 -% 1% 1% 2% 2% 2% 2% $2.73 $3.24 $2.21 $4.10 % $2.06 $3.42 $4.10 $1.61 $1.49 $2.85 $3.42 $2.76 $1.72 $1.33 $1.03 $2.07 $2.85 2019E 20$1.61 $1.49 16A2017A 2018$E2.21 2020E 2021E 2022E 8%/2$91%.72 28%/29%32%/29% 18%/29% 15%/20% 15%/20% Growth(1) $1.33 1.76x 1.33x 1.28x1.30x 1.16x 1.10x 1.04x Rat$io1(2.) 03 16A 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management Projections, Company Filings. Note: Operational volumes based on annual average volumes. (1) YoY growth of LP DCF per unit and LP distributions per unit respectively. (2) Coverage ratio calculated as total DCF over total distributions. 48 YoY Coverage Total LP DCF$353$299$388$514$606$700$802 Tota2l0L1P6A 2017A 2018E 2019E 2020E 2021E 2022E Distributions$269$246$323$416$536$643$771 8% - % 1 22% 7A 1% 29% 30% E 2% 34% 36% 2% 38% 39% 2% 40% 41% 2 2% 41% 42% 92% 20 78% 201 68% 69% 2018 63% 64% 2019E 59% 60% 2020E 57% 58% 2021E 55% 57% 022E 20% 24% 6 261 6.9 243 220 205 5. 178 4.7 1 154 4. 124 3.5 107 94 2.8 1 2.2 73 1.7 52 1.4 40 41 29 $266 7 $491 $214 $266 $164 $815 $1,108 $2 $6$41265 $125 $164 $86 $719 $169 $176 $684 $9$2430 $611 $124 $2 $44 $214 $125 $125 $110 $186 $349 $75 $169 $352 $416 2019E $3$2926 2 $188 .4 $381 2018E $349 2017A 20 $92 $322 2020E 22$E229 $222801 02$12E20 CONFIDENTIAL
Management Projections: AR Downside Volumes Case AM ($ in millions, unless otherwise noted) Operations & EBITDA Low Pressure (Bcf/d) | Water Handling (MBbls/d) Capital Expenditures Gathering & Compression Water Handling Earn-out payment Stonewall Wastewater MPLX JV Low Pressure Water Delivery Produced Water EBITDA $925 $925 $815 $1,642 $1,413 $719 $1,409 $1,222 $1,105 $1,229 $989 $851 $2 $729 $214 $730 7 $529 $404 $529 6 404 6 5 $14 4 $682020E 2021E $1942022E $19 2.2 4 3.1 2.7 2016A 2017A 2018E 2019E 2020E 2.0121E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E 0.8 1.1 1.2 1.5 DCF20a17nA d Distrib20u18tEions per20U19nE it 2022E Distribution Breakdown 016A 2020E 2021E2018E 2022E CAGR LP DCF per Unit LP Distributions per Unit AM LPs AMGP (IDRs) Series B Uni ts $4.29 $3.75 $3.32 -% 1% 1% 2% $3.01 $3.75 2% 2% 2% $2.39 $3.24 % $2.06 $3.42 $2.97$4.10 $1.61 $1.49 $2.58 $3.42 $2.76 $1.72 $2.15 $1.33 $1.03 $2.07 $2.85 2019E 20$1.61 $1.49 16A 2017A 2018$E2.21 2020E 2021E 2022E 64% Growth(1) $1.33 1.76x 1.33x 1.28x 1.15x 1.21x 1.14x 1.11x Rat$io1(2.) 03 16A 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management Projections, Company Filings. Note: Operational volumes based on annual average volumes. (1) YoY growth of LP DCF per unit and LP distributions per unit respectively. (2) Coverage ratio calculated as total DCF over total distributions. 49 YoY8%/2$91%.72 28%/29%16%/25%26%/20%10%/15%13%/15% Coverage Total LP DCF$353$299$387$450$567$625$706 Tota2l0L1P6A 2017A 2018E 2019E 2020E 2021E 2022E Distributions$269$246$323$403$485$559$643 8% - % 1 22% 7A 1% 29% 30% E 2% 34% 36% 2% 37% 39% 2% 38% 41% 2 2% 40% 42% 92% 20 78% 201 68% 69% 2018 63% 2019E 59% 61% 2020E 57% 60% 2021E 55% 58% 022E 16% 19% 62.192 4 178 189 172 154 154.4 124 3.8 1 3. 3.1 96 87 2.6 1 68 1.7 49 1.4 40 41 29 $491 0.00 7 $124 $491 $266 $266 $186 $646 $164 $14 $125 $176 $646 $125 $430 $124 $2 $214 $381 $488 $506 $169 $352 $1$83649 $75 $168 E $178 $272 $188 .42016A 2018E $381 2017A $349 $926019 $260 $85 $228 $224 $168 $147 CONFIDENTIAL
Management Projections: AR Base Volumes Case AMGP ($ in millions, unless otherwise noted) IDR LLC, Series B Cash Flow, and Tax Observations AMGP Total Distributions 18 22 CAGR IDR LLC owns the 100% of the IDRs in AM and has two share classes SQ AM Distribution Policy SQ AM Fully Distributed $441$437 $36$9366 AMGP owns 100% of the Series A units Management owns 100% of the Series B units $415$416 $302 $300 Series B unitholders are entitled to receive up to 6% of the distributions from AM in excess of $7.5MM per quarter $237 $235 $326 $326 Remaining profits pass through AMGP via Series A shares $250 $251 $144 $147 Series B units scheduled to vest at a value of 6% of equity value above $2 billion in the event of a liquidation of IDR LLC AMGP currently pays corporate taxes of 21% and 4% at the federal and state taxes, respectively $86 $166 $52 $86 $101 $166 $48 $52$10 2016A $101 2017A2018E $48 2019E 2020E 2021E 2022E $10 2016A 2017A 2018E 2019E 2020E 2021E 2022E IDR LLC Cash Flow AMGP & Series B Unit Valuation(1,2,5) $592 Distributions to AMGP Taxes G&A Series B Reserved CF 2016A 2017A 2018E 2019E 2020E 2021E 2022E AM Distributions to IDR LLC $17 $70 $144 $237 $357 $464 $592 Series B Take --(2) (7) (12) (20) (26) (34) Cash Distributions to AMGP $17 $67 $137 $224 $338 $438 $559 G&A(3) (1) (1) (2) (2) (2) (2) (2) $85 Taxes (7) (7) (34) (56) (85) (111) (141) $2 CAFD to AMGP Shareholders $10 $59 $101 $166 $251 $326 $416 Illustrative Yield 3.3% 3.3% 3.3% 3.3% 3.3% 3.8% 5.0% $34$34 $11 $2 $1$00101 $$66 $ 2016A 2017A 2018E2019E2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management Projections, Company Filings. (1) (2) (3) (4) (5) Implied AMGP and Series B valuation from 2016A through 2020E based on 2018E yield. Implied AMGP and Series B valuation from 2021E forward based on yield vs growth regression analysis. Excludes IPO related G&A. Series B valuation calculated as 6% of the valuation of AMGP less $2 billion. Illustrative yield based on regression analysis. 50 AMGP Valuation $290 $1,788 $3,049 $5,028 $7,587 $8,531 $8,343 Series B Valuation(4) N/A N/A $63 $182 $335 $392 $381 $17 $ $2 $2 $464 $34 $141 $2 $357 $2 $111 $416 $2 $237 $2 $326 $251 $2 $144 $56 $166 $69 $2 $ 2 $1100 $4$848 31% 43% CONFIDENTIAL
Management Projections: AR Downside Volumes Case AMGP ($ in millions, unless otherwise noted) IDR LLC, Series B Cash Flow, and Tax Observations AMGP Total Distributions IDR LLC owns the 100% of the IDRs in AM and has two share classes SQ AM Distribution Policy SQ AM Fully Distributed $441 AMGP owns 100% of the Series A units Management owns 100% of the Series B units 18 22 CAGR $369 $370 $415 $302 Series B unitholders are entitled to receive up to 6% of the distributions from AM in excess of $7.5MM per quarter $313 $326 $237 $272 $326 Remaining profits pass through AMGP via Series A shares $250 $144 $190 $166 $266 Series B units scheduled to vest at a value of 6% of equity value above $2 billion in the event of a liquidation of IDR LLC AMGP currently pays corporate taxes of 21% and 4% at the federal and state taxes, respectively $86 $146 $101 $52 $215 $86 $48 $157 2019E $10 $52 2016A $10 2017A $48 $120018E 2020E 2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E IDR LLC Cash Flow AMGP & Series B Unit Valuation(1,2,5) Distributions to AMGP Taxes G&A Series B Reserved CF 2016A 2017A 2018E 2019E 2020E 2021E 2022E $2 AM Distributions to IDR LLC $17 $70 $144 $225 $306 $380 $464 $464 $2 Series B Take --(2) (7) (12) (17) (21) (26) Cash Distributions to AMGP $17 $67 $137 $213 $290 $359 $438 (3) (1) (1) (2) (2) (2) (2) (2) G&A Taxes (7) (7) (34) (53) (73) (90) (111) $2 $2 CAFD to AMGP Shareholders $10 $59 $101 $157 $215 $266 $326 $53 Illustrative Yield 3.3% 3.3% 3.3% 3.3% 3.3% 4.8% 5.7% $2 $34 165 $1 $2 $1 $17 $$66 $$1100 2016A 2017A 2018E 2019E2020E2021E 2022E 2016A 2017A 2018E 2019E 2020E 2021E 2022E Source: Management Projections, Company Filings. (1) (2) (3) (4) Implied AMGP and Series B valuation from 2016A through 2020E based on 2018E yield. Implied AMGP and Series B valuation from 2021E forward based on yield vs growth regression analysis derived on slide 18. Excludes IPO related G&A. Series B Valuation calculated as 6% of the valuation of AMGP less $2 billion. 51 AMGP Valuation $290 $1,788 $3,049 $4,768 $6,508 $5,511 $5,725 Series B Valuation(4) N/A N/A $63 $166 $270 $211 $223 $38$02 $2 $111 $306 $2$2 $90 $326 $225 $73 $266 $144 $56 $215 $157 $2 $69 $34 $ $1$01001 $$4488 34% 26% CONFIDENTIAL
AM Status Quo AR Base Volumes Case, AR Downside Volumes Case, and Wall Street Consensus ($ in millions, unless otherwise noted) Wall Street Consensus Mgmt. Projections at AR Base Case Mgmt. Projections at AR Downside Productio n Case 2019E 2022E CAGR Commentary EBITDA $4.29 $1,642 AM is covered by 14 analysts as compared to 22 for AR and 12 for AMGP $3.81 $1,413 $1,382 $1,564 $3.42 $1,222 $1,409 Median price target of $37.50 as of 10/5/2018 $1,152 $989 $1,229 $931 $1,105 $730 $709 $729 Average price target range of $33.00 - $51.00 as of 10/5/2018 $851 $529 2017A 2018E 2019E 2020E 2021E 2022E 2019E 2022E CAGR 2019E 2022E CAGR Distributable Cash Flow / LP Unit Distributions per Unit 1E $4.26 $4.10 $3.51 $3.42 $3.72 $3.75 $3.13 $2.85 $3.42 $3.22 $3.17 $3.32 $2.97 $2.21 $2.21 $2.71 $2.73 $2.82 $2.58 $1.72 $1.72 $2.15 $3.01 $1.33 $1.71 $2.20 $2.06 $2.39 $2.06 $1.61 2017A 2018E 2019E 2020E 2021E 2022E 2017A 2018E 2019E 2020E 2021E 2022E 52 Source: Management Projections, Thomson One, FactSet as of 10/5/2018. 23% 17% 17% 16% 5% 16% 18% 19% 18% CONFIDENTIAL
AMGP Status Quo AR Base Volumes Case, AR Downside Volumes Case, and Wall Street Consensus ($ in millions, unless otherwise noted) Wall Street Consensus Mgmt. Projections at AR Base Case Mgmt. Projections at AR Downside Productio n Case 2019E 2022E CAGR Commentary EBITDA $4.29 $559 AMGP is covered by 12 analysts as compared to 22 for AR and 14 for AM $3.81 $438 $3.42 $458 $438 $390 Median price target of $23.00 as of 10/5/2018 $338 $290 $359 $224 Average price target range of $19.00 - $27.00 as of 10/5/2018 $334 $137 $133 $213 $224 $137 $59 2017A 2018E 2019E 2020E 2021E 2022E 2019E 2022E CAGR 2019E 2022E CAGR Total Distributions to AMGP Shareholders Distributions per Share 1E $416 $2.23 $326 $1.75 $326 $1.75 $251 $266 $1.35 $1.43 $215 $1.15 $166 $0.89 $250 $1.34 $101 $0.54 $100 $0.54 $157 $165 $0.85 $0.89 $56 $0.30 $101 $0.54 2017A 2018E 2019E 2020E 2021E 2022E 2017A 2018E 2019E 2020E 2021E 2022E 53 Source: Management Projections, Thomson One, FactSet as of 10/5/2018. Note: WSC estimates available for AMGP through 2020E. 2017A distributions / share represents 4th quarter distribution annualized. 36% 27% 36% 27% 36% 27% CONFIDENTIAL
PF AMGP Projections at Transaction AR Base Volumes Case & AR Downside Volumes Case ($ in millions, unless otherwise noted) ll Street Consensus EBITDA Mgmt. Projections at AR Base Case Mgmt. Projections at AR Downside Productio n Case Distributable Cash Flow 2019E 2022E CAGR 2019E 2022E CAGR $4.29 $1,642 $1,392 $3.81 $1,4$133.42 $1,210 $1,222 $1,008 $1,409 $1,195 $989 $822 $1,229 $1,054 $1,105 $928 $851 $695 2019E 2020E 2021E 2022E 2019E 2020E 2021E 2022E Distributable Cash Flow / Share Dividend / Share 2019E 2022E CAGR 1E 2019E 2022E CAGR $2.31 $2.74 $2.38 $1.93 $1.98 $1.60 $2.35 $1.90 $1.64 $2.07 $1.24 $1.65 $1.83 $1.44 $1.15 $1.38 2019E 2020E 2021E 2022E 2019E 2020E 2021E 2022E 54 Source: Management Projections Note: Analysis based on fully diluted share count. 19% 19% 23% 18% 19% 20% 18% 18% CONFIDENTIAL
Cost of Capital 55 CONFIDENTIAL
SQ AM Peer Group Cost of Equity Analysis Comparable Public Company Yield-Based Cost of Equity Expected Total Return Expected Current - 2020E Distribution CAGR Long-Term Economic Growth Estimate Expected Growth(1) Company Current Yield Implied Total Return 4.0% 5.6% 6.7% 12.4% CNX M idstream Partners LP 14.9% 4.0% 5.7% 6.0% 11.7% Hess M idstream Partners LP 15.2% 4.0% 5.7% 5.6% 11.3% BP M idstream Partners LP 15.1% 4.0% 5.5% 5.5% 10.9% Valero Energy Partners LP 13.7% 4.0% 5.6% 8.3% 13.8% EQT M idstream Partners LP 14.3% Cost of Equity Sensitized Peer Total Return Cost of Equity Barra Beta Low High (2) Raw Beta 0.86 1.16 (3) Spot Risk-Free Rate 3.3% 3.3% Equity Risk Premium (4) 6.0% 6.0% Source: Bloomberg, Duff & Phelps, FactSet, Federal Reserve, Company filings as of 10/5/2018. (1) Weights Expected Current 2020E distribution growth estimates 15% and long-term economic growth estimate by 85% to arrive at a long-term distribution growth estimate. Barra beta as of 8/31/2018. Illustrative low and high range reflects a -/+ 15% range around Barra beta. 20-year treasury bond yield as of 10/5/18. Duff & Phelps historical arithmetic premium. (2) (3) (4) 56 Cost of Equity8.5%10.3% Cost of Equity 11.2% 12.2% M edian 14.9% 4.0% 5.6% 6.0% 11.7% M ean 14.4% 4.0% 5.6% 5.9% 11.5% Western Gas Partners, L.P. 6.1% 4.0% 4.3% 8.3% 12.6% Shell M idstream Partners LP 11.6% 4.0% 5.1% 6.7% 11.8% Noble M idstream Partners LP 20.1% 4.0% 6.4% 5.3% 11.7% Phillips 66 Partners LP 10.5% 4.0% 5.0% 5.4% 10.4% A B C D E F CONFIDENTIAL
SQ AMGP Peer Group Cost of Equity Analysis Comparable Public Company Yield-Based Cost of Equity Expected Total Return Expected Current - 2020E Distribution CAGR Long-Term Economic Growth Estimate Expected Growth(1) Company Current Yield Implied Total Return 4.0% 4.7% 7.2% 11.9% Western Gas Equity Partners, LP 9.0% Cost of Equity Sensitized Peer Total Return Cost of Equity Barra Beta Low High (2) Raw Beta 0.70 0.95 (3) Spot Risk-Free Rate 3.3% 3.3% Equity Risk Premium (4) 6.0% 6.0% Source: Bloomberg, Duff & Phelps, FactSet, Federal Reserve, Company filings as of 10/5/2018. (1) Weights Expected Current 2020E distribution growth estimates 15% and long-term economic growth estimate by 85% to arrive at a long-term distribution growth estimate. Barra beta as of 8/31/2018. Illustrative low and high range reflects a -/+ 15% range around Barra beta. 20-year treasury bond yield as of 10/5/18. Duff & Phelps historical arithmetic premium. (2) (3) (4) 57 Cost of Equity7.6%9.1% Cost of Equity 10.7% 11.7% M edian 9.0% 4.0% 4.7% 6.5% 11.2% M ean 9.0% 4.0% 4.7% 6.5% 11.2% EQT GP Holdings LP 9.0% 4.0% 4.7% 5.8% 10.5% A B C D E F CONFIDENTIAL
PF AMGP Peer Group WACC Analysis Expected Total Return 2018E - 2020E Dividend CAGR Long-Term Economic Growth Estimate (1) Company Expected Growth Current Yield Implied Total Return Kinder M organ Inc 4.0% 7.1% 9.9% 25.0% 2.8% 4.0% 4.9% 4.8% 9.7% Plains All Americ an Pipeline GP 9.7% 4.0% 3.6% 6.2% 9.8% Targa Resourc es Corp. 1.1% 4.0% 4.7% 5.8% 10.5% EQT GP Holdings LP 9.0% 4.0% 5.6% 6.7% 12.4% CNX M idstream Partners LP 14.9% 4.0% 5.7% 6.0% 11.7% Hess M idstream Partners LP 15.2% 4.0% 5.7% 5.6% 11.3% BP M idstream Partners LP 15.1% 4.0% 5.5% 5.5% 10.9% Valero Energy Partners LP 13.7% Source: Bloomberg, Duff & Phelps, FactSet, Federal Reserve, Company filings as of 10/5/2018. (1) Weights Expected Current 2020E distribution growth estimates 15% and long-term economic growth estimate by 85% to arrive at a long-term distribution growth estimate. 58 M edian 12.0% 4.0% 5.2% 5.8% 11.3% M ean 12.4% 4.0% 5.3% 5.9% 11.1% Shell M idstream Partners LP 11.6% 4.0% 5.1% 6.7% 11.8% Noble M idstream Partners LP 20.1% 4.0% 6.4% 5.3% 11.7% EQT M idstream Partners LP 14.3% 4.0% 5.6% 8.3% 13.8% Western Gas Equity Partners, LP 9.0% 4.0% 4.7% 7.2% 11.9% The Williams Companies, Inc . 12.0% 4.0% 5.2% 4.3% 9.5% SemGroup Corporation 4.9% 4.0% 4.1% 8.2% 12.3% ONEOK, Inc . 10.5% 4.0% 5.0% 4.3% 9.3% A B C D E F CONFIDENTIAL
PF AMGP Peer Group WACC Analysis (cont.) Cost of Equity Comparable Company Yield-Based Cost of Equity Barra Beta Low High Low High (2) Raw Beta 0.84 1.14 (3) Spot Risk-Free Rate 3.3% 3.3% Cost of Equity 10.8% 11.8% Equity Risk Premium (4) 6.0% 6.0% Market Value of Equity $8,853 $8,853 Cost of Capital PF Capital Structure Cost of Capital Optimal Capital Structure(5) Low High Low High Cost of Equity Cost of Debt 10.8% 3.4% 11.8% 4.9% Cost of Equity 10.8% 3.4% 11.8% 4.9% (1) Cost of Debt Market Value of Equity Total Debt $8,853 $3,460 $8,853 $3,460 Market Value of Equity Total Debt $8,853 $1,420 $8,853 $1,420 Source: Bloomberg, Duff & Phelps, FactSet, Federal Reserve, Company filings as of 10/5/2018. (1) (2) (3) (4) (5) Illustrative low and high range reflects a -/+ 100 bps range around after tax current 5.6% cost of debt at AM. Barra beta as of 8/31/2018. Illustrative low and high range reflects a -/+ 15% range around Barra beta. 20-year treasury bond yield as of 9/21/18. Duff & Phelps historical arithmetic premium. Optimal Capital Structure based on Total Debt of 3.5x 2019E EBITDA 59 Cost of Equity9.8%10.9% Cost of Capital8.7%9.9% Cost of Capital10.8%11.8% Cost of Equity8.4%10.2% CONFIDENTIAL
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Prior vs. Current Since October 6, 2018 Special Committee Meeting Updated Status Quo AM revolver interest calculation to utilize company-provided LIBOR forecast instead of flat LIBOR forecast Updated Pro Forma model to reflect final deal terms AM unaffiliated special distribution of $0.415 incorporated into base cash consideration to total $3.415 AM phantom units converted into restricted stock unit or similar AMGP award under the AMGP LTIP based on an all equity consideration 2 Source: FactSet as of 10/5/2018. (1) As of 10/5/2018 based on a 20-VWAP pricing CONFIDENTIAL
Historical Exchange Ratio Analysis Since AMGP IPO (5/4/17) | Based on Spot Prices ($ in millions, unless otherwise noted) Historical AM/AMGP Exchange Ratio At Transac tion Contrac tual Valuation 186.2 319.5 $17.51 Contrac tual Valuation Yield-Based Valuation - AM GP Shares O utstanding AM GP Units Issued AM GP Pric e 186.2 NA $17.51 186.2 NA $17.51 2.20x Implied Series B Valuation $76 $241 $411 Series B Conversion Units 17.4 17.4 23.5 2.00x Adj. AM GP Share Pric e $16.39 $17.20 $17.51 1.8326x (1) 1.8147x 1.80x 1.6985x 1.60x 1.40x 1.20x May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 3 Source: Company filings, FactSet as of 10/5/2018. (1) Adjusted to reflect proposed Series B conversion, with AMGP share price calculated as (AMGP equity value + [(AMGP equity value - $2bn) x 6%])/(AMGP fully diluted shares outstanding + 17.354mm) based on AMGP 20-Day VWAP on the day prior to transaction. 2018E Series B CF NA $7 NA 2018E Yield NA 2.8% NA Series B Threshold $2,000 NA $2,000 AMGP Proposal Series B Redem ption Right 6.0% NA 6.0% Spot XR Adj. XR Current AM Share Pric e $29.74 $29.74 $29.74 At 2/23/2018 Adjusted XR 1.8147x 1.7289x 1.6985x AM GP Units O utstanding Inc luding Series B 203.6 203.6 529.2 AM GP Equity Value Inc luding Series B $3,336 $3,502 $9,266 AM GP M arket Value $3,261 $3,261 $8,855 % Premium /% Premium / PeriodMarket X R Adj. X R(1)(Discount) to Market (Discount) to Adj. X R X R at Transactionat Transaction At Transaction--1.8326x---- Current1.6985x1.8147x7.9%1.0% 3-Month Average (Current)1.6816x1.7944x9.0%2.1% 30-Day Average (Current)1.7254x1.8446x6.2%(0.7%) 2/23/20181.3804x1.4702x32.8%24.6% 3-Month Average (at 2/23/2018) 1.4842x1.5795x23.5%16.0% 30-Day Average (at 2/23/2018)1.4443x1.5348x26.9%19.4% Since AMGP IPO Average1.5804x1.6840x16.0% 8.8% Sample Adjusted XR Calculation CONFIDENTIAL
Exchange Ratio Calculation Detail Gross Cash Consideration (W Special Dividend) Cash Component Secondary Shares Equity Component XR Net Excess Cash Consideration Equity Component XR Net After-Tax XR All-In XR Taxes Payable (1) (2) XR Purchased Transaction 4 Source: Company filings, FactSet as of 10/5/2018. (1)Based on AMGP 20-day VWAP price. (2)Based on AMGP share price of $17.51 as of 10/5/2018 At $3.415 1.6350x 0.1976x 1.8326x ($2.89) $0.53 1.6350x 0.0301x 1.6651x I H G F E D C B A CONFIDENTIAL
$3.415 ($2.89) $0.53 onsideration xes Payable et Cash Consideration Sec ondary Shares Purc hased 0.0301x AM Distributable Cash Flow Accretion / (Dilution) - % AMGP Distributable Cash Flow Accretion / (Dilution) - % At 1.0x AM Coverage 31.0% At 1.8326x Exchange Ratio 1.8326x XR (1) (2) 1.6651x XR 17.187%.0% 17.2%16.4% 25.2% 12.7% 23.8% 12.2% 9.7% 9.4% 19.0% 7.0% 6.4% 6.5% 5.8% 2.4% (0.3%) 2.0% (0.6%) 2H 2018E 2019E 2020E 2021E $3.24 2021E 2022E $3.75 2019E 2020E $1.10 $2.74 2019E 2020E 2021E 2022E 2$3.63 6 4 .$246.36 .02 .30 $1.08 $3.00 Pro Forma AMGP: $1.64 $1.98 $2.38 $2.74 AM Distribution Accretion / (Dilution) - % At 1.8326x Exchange Ratio AMGP Distribution Accretion / (Dilution) - % 3.2% 3.2% 3.2% 3.3% 39.5% (6.3%) (6.2%) (6.2%) (6.1%) 19.3% 10.1% 3.5% 2019E 2020E 2021E 2022E 2019E 2020E 2021E 2022E (1) Pro Forma AMGP at 1.6651x: Pro Forma AMGP at 1.8326x: $2.07 $2.28 $2.67 $2.94 $3.21 $3.53 $3.85 $4.23 Pro Forma AMGP: $1.24 $1.60 $1.93 $2.31 PF AMGP Coverage: 1.315x 1.236x 1.237x 1.186x 5 Source: Management projections and FactSet as of 10/5/2018. (1)Pre Unitholder Tax; 1.8326x represents implied XR at 1.6350x equity XR and cash consideration of $3.415 / unit. Cash assumed to be used to purchase additional secondary shares. (2)Post - Unitholder Tax; 1.6651x represents implied XR at 1.6350x equity XR; cash used to pay taxes, with any excess cash assumed to be used to purchase additional secondary shares. SQ AM Coverage:1.301x 1.158x 1.103x 1.045x Status Quo AMGP:$0.89 $1.35 $1.75 $2.23 $ Acc / (Dil):$0.35 $0.26 $0.18 $0.08 PF AMGP Coverage:1.315x 1.236x 1.237x 1.186x Status Quo AM:$2.21 $2.85 $3.42 $4.10 (2) $ Acc / (Dil):($0.14) ($0.18) ($0.21) ($0.25) $ Acc / (Dil):$0.07 $0.09 $0.11 $0.13 Status Quo AMGP: $1.25 $1.58 $1.92 $2.30 $ Acc / (Dil):$0.39 $0.40 $0.46 $0.44 Status Quo AM:$2.73 $0.98$3.22 $2.72$3.7 $3.30$4 $3.97 PF AMGP at 1.6651x: $2.72 $3.30 $3.97 $4.56 PF AMGP at 1.8326x: $3.00 ($0.12)$3.63 ($0.02)$4.3 $0.06$5 $0.22 $ Acc / (Dil):($0.01) ($0.02)$0.08 $0.26$0.2 $0.40$0 $0.61 $ Acc / (Dil):$0.27 $0.41 $0.64 $0.76 Accretion / (Dilution) Pre Unitholder Tax(1,2) | AM & AMGP | AR Base Case All-In XR 1.8326x Gr Ta N oss Cash C CONFIDENTIAL XR Equity Component 1.6350x Net After-Tax XR 1.6651x CONFIDENTIAL
$3.415 ($2.89) $0.53 onsideration xes Payable et Cash Consideration Sec ondary Shares Purc hased 0.0301x AM Distributable Cash Flow Accretion / (Dilution) - % AMGP Distributable Cash Flow Accretion / (Dilution) - % At 1.0x AM Coverage 36.8% At 1.8326x Exchange Ratio 1.8326x XR (1) (2) 1.6651x XR 17.0% 14.4%16.4% 14.8% 11.1% 12.2% 26.7% 26.0% 9.4% 5.9% 20.9% 4.36%.4% 3.9%5.8% 0.9% 2.0% (3.8%) (0.6%) 2H 2018E 2019E 2020E 2021E $3.24 2021E 2022E $3.75 2019E 2020E $1.10 $2.74 2019E 2020E 2021E 2022E $1.08 $3.00 $3.63 $4.36 Pro Forma AMGP: $1.38 $1.83 $2.07 $2.35 AM Distribution Accretion / (Dilution) - % At 1.8326x Exchange Ratio AMGP Distribution Accretion / (Dilution) - % 2.3% 1.8% 1.8% (1.7%) 36.0% (7.1%) (7.5%) (7.5%) 24.8% (10.7%) 15.3% 8.6% 2019E 2020E 2021E 2022E 2019E 2020E 2021E 2022E Pro Forma AMGP at 1.6651x: Pro Forma AMGP at 1.8326x: $1.91 $2.11 $2.40 $2.64 $2.75 $3.02 $3.16 $3.48 Pro Forma AMGP: $1.15 $1.44 $1.65 $1.90 6 Source: Management projections and FactSet as of 10/5/2018. (1)Pre Unitholder Tax; 1.8326x represents implied XR at 1.6350x equity XR and cash consideration of $3.415 / unit. Cash assumed to be used to purchase additional secondary shares. (2)Post - Unitholder Tax; 1.6651x represents implied XR at 1.6350x equity XR; cash used to pay taxes, with any excess cash assumed to be used to purchase additional secondary shares. SQ AM Coverage:1.149x 1.206x 1.142x 1.114x PF AMGP Coverage:1.203x 1.268x 1.257x 1.238x Status Quo AMGP:$0.85 $1.15 $1.43 $1.75 $ Acc / (Dil):$0.30 $0.29 $0.22 $0.15 PF AMGP Coverage:1.203x 1.268x 1.257x 1.238x Status Quo AM:(1)$2.15 $2.58 $2.97 $3.42 (2) $ Acc / (Dil):($0.23) ($0.18) ($0.22) ($0.26) $ Acc / (Dil):($0.04) $0.06 $0.05 $0.06 Status Quo AMGP: $1.01 $1.44 $1.65 $1.94 $ Acc / (Dil):$0.37 $0.39 $0.43 $0.41 $3.30$3.97 Status Quo AM:$2.39 $0.98$3.01 $2.72$3.32 $3.75 PF AMGP at 1.6651x: $2.30 ($0.12)$3.04 ($0.02)$3.45$0.06 $3.$902.22 PF AMGP at 1.8326x: $2.53 ($0.02)$3.35 $0.26$3.80$0.40 $4.$301.61 $ Acc / (Dil):($0.09) $0.03 $0.13 $0.16 $ Acc / (Dil):$0.14 $0.33 $0.48 $0.56 Accretion / (Dilution) Pre Unitholder Tax(1,2) | AM & AMGP | AR Downside Volumes Case All-In XR 1.8326x Gr Ta N oss Cash C CONFIDENTIAL XR Equity Component 1.6350x Net After-Tax XR 1.6651x CONFIDENTIAL
Transaction Tax Implications At Transaction Average Tax Basis Calculation(1) Average tax basis of $20.49 per unit for public AM unitholders as of YE 2018 Antero Resourc es Antero Resourc es - WaterARC Public Unitholders 90,841,730 8,028,605 94,757,401 $1.06 26.90 20.49 2017 YE Basis (+) 2018E Avg. Net Inc ome (-) 2018E Distributions $23.27 (1.07) 1.72 The average public AM unit holder would need to receive cash consideration of $2.89 per unit to avoid having to sell shares post-transaction to pay transaction related taxes Total Active Units 193,627,736 Cash Consideration Required to Avoid Share Selling AMGP Share Price Exchange Ratio Cash Consideration(5) Offer Price $17.51 1.6350x $3.415 $32.04 AMGP Share Price Exchange Ratio Cash Consideration(5) Offer Price $17.51 1.6350x $3.415 $32.04 AMGP Share Price Exchange Ratio Cash Consideration(5) Offer Price $17.51 1.6350x $3.415 $32.04 Detail of Gains (per Unit) Average Ordinary Gain Average Capital Gain Detail of Gains (per Unit) Average Ordinary Gain Average Capital Gain Detail of Gains (per Unit) Average Ordinary Gain Average Capital Gain $3.37 8.19 $4.83 9.23 $6.56 4.98 Average Assumed Passive Activity Loss (2) Tax on Gain (per Unit) Federal Ordinary Income Tax Rate Individual MLP Investor Deduction Rate Adjusted Ordinary Tax Rate ACA Tax Federal Tax Rate Federal Capital Gains Tax Rate Effective State Tax Rate(3) PAL Rate PAL Gain Deduction Tax on Ordinary Gain Effective Ordinary Gain Tax Rate Tax on Capital Gain Effective Capital Gain Tax Rate State Tax Ordinary Income(4) Effective Ordinary Gain Tax Rate State Tax Capital Gain(4) Effective Capital Gains Tax Rate Average Assumed Passive Activity Loss (2) Tax on Gain (per Unit) Federal Ordinary Income Tax Rate Individual MLP Investor Deduction Rate Adjusted Ordinary Tax Rate ACA Tax Federal Tax Rate Federal Capital Gains Tax Rate Effective State Tax Rate(3) PAL Rate PAL Gain Deduction Tax on Ordinary Gain Effective Ordinary Gain Tax Rate Tax on Capital Gain Effective Capital Gain Tax Rate State Tax Ordinary Income(4) Effective Ordinary Gain Tax Rate State Tax Capital Gain(4) Effective Capital Gains Tax Rate Assumed Passive Activity Loss (3) Tax on Gain (per Unit) Federal Ordinary Income Tax Rate Individual MLP Investor Deduction Rate Adjusted Ordinary Tax Rate ACA Tax Federal Tax Rate Federal Capital Gains Tax Rate Effective State Tax Rate(3) PAL Rate PAL Gain Deduction Tax on Ordinary Gain Effective Ordinary Gain Tax Rate Tax on Capital Gain Effective Capital Gain Tax Rate State Tax Ordinary Income(4) Effective Ordinary Gain Tax Rate State Tax Capital Gain(4) Effective Capital Gains Tax Rate ($2.12) ($2.42) ($2.00) 37.0% 20.0% 29.6% 3.8% 33.4% 23.8% 5.2% 37.0% 20.0% 29.6% 3.8% 33.4% 23.8% 5.2% 37.0% 20.0% 29.6% 3.8% 33.4% 23.8% 5.2% 37.0% ($0.79) $0.34 10.1% $1.95 23.8% $0.17 5.2% $0.42 5.2% 37.0% ($0.90) $0.72 14.8% $2.20 23.8% $0.25 5.2% $0.48 5.2% 37.0% ($0.74) $1.45 22.1% $1.19 23.8% $0.34 5.2% $0.26 5.2% Total Payable Effective Tax Rate 25.0% Total Effective Tax Rate 25.9% Total Payable Effective Tax Rate 28.0% Source: FactSet as of 10/5/2018 and Wall Street research. Note: Dividend of $0.415 / share added to ordinary gain. (1) (2) (3) (4) Provided by management. Assumed passive activity loss and tax on ordinary gain for IPO investor utilizes company provided estimates based on a per unit basis range of $19.00-$22.00. Passive activity loss calculated by Management to be $2.00 for an IPO investor. At Managements direction, state tax rate determined by using a weighted average of 50 state income tax rates and median federal taxable income brackets for married and single filers. 7 Total Tax on Gain $3.23 Total Tax on Gain $3.64 Total Tax on Gain $2.89 Total Gain $11.54 Total Gain $14.06 Total Gain $11.55 Average EOY 2018 Tax Basis $17.98 Average EOY 2018 Tax Basis $17.98 Average EOY 2018 Tax Basis $20.49 IPO Investor - IPO Basis(1) For IPO Investor - Average Basis(1) Average Unitholder Average EOY 2018 Basis for Public Unitholders $20.49 Average EOY 2018 Basis for IPO Investors $17.98 2018E YE Basis$20.49 2018E YE Basis Unitholder Active Units EOY 2018 Basis CONFIDENTIAL
After-Tax Distribution For Average Unitholder Calculation Detail for Transaction $989 $1,222 $1,413 $1,642 EBITDA - Interest Expense EBITDA - Distributions from Unconsolidated Affiliates + Equity in Earnings of Unconsolidated Affiliates - Equity Based Compensation - Interest Expense - Depreciation of Goodwill and Current Assets - Additional Depreciation from Step Up in Basis - Capex Expense for Tangible Assets - Interest Expense Add-back $989 ($88) $72 ($48) (122) (761) (87) (164) 0 $1,222 ($141) $104 ($41) (146) (753) (221) (176) 0 $1,413 ($168) $120 ($33) (154) (666) (229) (377) 0 $1,642 ($196) $146 ($35) (125) (622) (160) (352) 44 ($94) ($119) ($142) ($153) - IDR Distributions ($237) ($357) ($464) ($592) - Distributions from Unc onsolidated Affiliates ($88) ($141) ($168) ($196) + Equity in Earnings of Unc onsolidated Affiliates $72 $104 $120 $146 - Equity Based Compensation ($48) ($41) ($33) ($35) Taxable Income Before NOLs ($208) ($152) ($94) $335 594 668 726 812 Taxable Income Before Tax Depreciation - NOLs applied from previous years $0 $0 $0 ($268) O versubc ription 103% 103% 103% 103% Taxable Income ($208) ($152) ($94) $67 AM GP Taxable Income + NOL Utilization - Payment of Income Taxes +/-Change in depreciation (M ACRS vs ADS SL) + Tangible Asset Capex ($208) - - 205 164 ($152) - - 222 176 ($94) - - 85 377 $67 268 17 (65) 352 612 688 747 835 Taxable Income Before Tax Depreciation Tax Deprec iation (588) (642) (648) (644) Net Income 23 46 99 192 Current Earnings & Profits Current Dist. from AM GP to Shareholders Qualified Dividend? Return of Capital(1) Qualified Dividend(2) Partial Return of Capital(3) Accumulated Earnings and Profits $161 625 Cum E&P - 161 464 $246 815 Cum E&P - 246 570 $369 978 Cum E&P - 369 610 $560 1,174 Cum E&P - 560 614 AM Shares Outstanding 188.1 188.1 188.1 188.1 Taxable Income / Unit (Net of PAL) $0.00 $0.01 $0.02 $0.04 Average Tax Basis per Unit $20.49 $17.50 $13.99 $10.19 Less: Return of Capital per Unit(1) Average EoY Basis per Unit ($2.99) ($3.51) ($3.80) ($4.05) $17.50 $13.99 $10.19 $6.14 Income Tax % RoC (Annual Average) % Qualified Dividend (Annual Average) Percentage RoC Percentage QD 19% 6% 74% 26% 17% 8% 70% 30% 16% 9% 62% 38% 13% 12% 52% 48% Taxable Income / Unit (Net of PAL) $0.00 $0.01 $0.02 $0.04 Income Tax Rate 29.6% 29.6% 29.6% 29.6% Tax Basis/Share - Return of Capital $17.51 ($0.92) $16.59 ($1.12) $15.46 ($1.20) $14.26 ($1.21) Tax / Unit ($0.00) ($0.00) ($0.01) ($0.01) EoY Basis $16.59 $15.46 $14.26 $13.06 Implied Tax Rate 6% 7% 9% 11% Exchange ratio 1.6651x 1.6651x 1.6651x 1.6651x After-tax Distribution Dilution to AM Unitholder ($/Unit) After-tax Distribution Dilution to AM Unitholder (%) ($0.27) (12.0%) ($0.37) (12.9%) ($0.49) (14.5%) ($0.68) (16.6%) Source: Management projections and FactSet as of 10/5/2018. Note: 1.6651x represents implied XR at 1.6350x equity XR; cash used to pay taxes, with any excess cash assumed to be used to purchase additional secondary shares. 8 (1) (2) (3) Return of capital per share / unit calculated as the total distributions to holders when Current Earnings & Profits are less than 0. Qualified dividend calculated as equal to the lesser of Current Earnings & Profits or Distributions to Shareholder assuming Current Earnings & Profit is greater than 0. Partial Return of Capital is calculated as the difference between Distributions to Shareholders and Current Earnings & Profits assuming Qualified Dividends are applicable. PF After Tax AM Dividend XR Adjusted Share $1.94 $2.48 $2.92 $3.41 After-Tax PF AMGP Dividend Per Share $1.17 $1.49 $1.75 $2.05 Return of Capital Taxes $0.00 $0.00 $0.00 $0.00 Qualified Dividend Taxes $0.08 $0.12 $0.17 $0.26 Before Tax PF AMGP Dividend Per Share $1.24 $1.60 $1.93 $2.31 Total Tax per Share $0.08 $0.12 $0.17 $0.26 After Tax AM Distibution Per LP Unit $2.21 $2.85 $3.41 $4.09 Shares Outstanding 502.3 508.1 508.1 508.1 Income Taxes / Unit $0.00 $0.00 $0.01 $0.01 Before Tax AM Distibution Per LP Unit $2.21 $2.85 $3.42 $4.10 2019E 2020E 2021E 2022E PF AMGP After-Tax Calculation 2019E 2020E 2021E 2022E SQ AM After-Tax Distribution Calculation CONFIDENTIAL
After-Tax Distribution Accretion / (Dilution) CONFIDENTIAL AM & AMGP | For Average AM Unit Holder at Transaction AM Accretion / (Dilution) - % At 1.6651x Exchange Ratio & AR Base Case AMGP Accretion / (Dilution) - % At AR Base Case 71.9% 45.3% 31.5% 20.5% 2019E 2020E 2021E 2022E Pro Forma AMGP: $1.17 $1.49 $1.75 $2.05 AM AMGP Accretion / (Dilution) - % At AR Downside Case At 1.6651x Exchange Ratio & AR Downside Case 74.9% 53.0% (14.7%) 39.3% (17.2%) 27.2% 2019E 2020E 2021E 2022E Pro Forma AMGP: $1.13 $1.35 $1.52 $1.70 9 Source: Management projections and FactSet as of 10/5/2018 Note: AMGP accretion / (dilution) based on SQ AM Management Coverage. After-tax distributions is distribution from entity less attributable qualified dividends and gains on capital taxes. Note: 1.6651x represents implied XR at 1.6350x equity XR; cash used to pay taxes, with any excess cash assumed to be used to purchase additional secondary shares. PF AMGP Coverage:1.203x1.268x1.257x1.238x SQ AM Coverage:1.149x1.206x1.142x1.114x PF AMGP Coverage: 1.203x1.268x1.257x1.238x Status Quo AMGP:$0.64$0.88$1.09$1.33 $ Acc / (Dil):$0.48$0.47$0.43$0.36 Status Quo A Pro Forma AMGP:$1.88$2.24$2.53$2.82 $ Acc / (Dil):($0.27)($0.34)($0.43)($0.59) PF AMGP Coverage:1.315x1.236x1.237x1.186x Status Quo AMGP:$0.68$1.03$1.33$1.70 $ Acc / (Dil):$0.49$0.46$0.42$0.35 Status Quo A Pro Forma AMGP:$1.94$2.48$2.92$3.41 $ Acc / (Dil):($0.27)($0.37)($0.49)($0.68) SQ AM Coverage:1.301x1.158x1.103x1.045x PF AMGP Coverage: 1.315x1.236x1.237x1.186x (12.0%)(12.9%)(14.5%) (16.6%) 2019E2020E2021E2022E M:$2.21$2.85$3.41$4.09 Accretion / (Dilution) - % (12.5%)(13.1%) 2019E2020E2021E2022E M:$2.14$2.58$2.96$3.41
After-Tax Distribution Accretion / (Dilution) CONFIDENTIAL For Average AM Unit Holder at Transaction at 1.0x Coverage for AM & PF AMGP AM Accretion / (Dilution) - % At 1.6651x Exchange Ratio & AR Base Case AMGP Accretion / (Dilution) - % At AR Base Case 62.9% 53.2% 48.7% 38.2% (4.9%) 2019E 2020E 2021E 2022E Pro Forma AMGP: $1.55 $1.85 $2.18 $2.43 AM AMGP Accretion / (Dilution) - % At AR Downside Case At 1.6651x Exchange Ratio & AR Downside Case 75.5% 56.3% 53.0% (4.2%) 41.7% (5.1%) 2020E 2021E 2022E 2019E 2020E 2021E 2022E Pro Forma AMGP: $1.35 $1.72 $1.92 $2.10 10 Source: Management projections and FactSet as of 10/5/2018 Note: AMGP accretion / (dilution) based on SQ AM Management Coverage. After-tax distributions is distribution from entity less attributable qualified dividends and gains on capital taxes. Note: 1.6651x represents implied XR at 1.6350x equity XR; cash used to pay taxes, with any excess cash assumed to be used to purchase additional secondary shares. PF AMGP Coverage:1.000x1.000x1.000x1.000x SQ AM Coverage:1.000x1.000x1.000x1.000x PF AMGP Coverage: 1.000x1.000x1.000x1.000x Status Quo AMGP:$0.77$1.10$1.25$1.48 $ Acc / (Dil):$0.58$0.62$0.66$0.62 Status Quo A$2.98$3.27$3.68 Pro Forma AMGP:$2.25$2.86$3.20$3.50 $ Acc / (Dil):($0.13)($0.12)($0.07)($0.19) PF AMGP Coverage:1.000x1.000x1.000x1.000x Status Quo AMGP:$0.95$1.21$1.47$1.75 $ Acc / (Dil):$0.60$0.64$0.71$0.67 Status Quo A Pro Forma AMGP:$2.58$3.08$3.63$4.04 $ Acc / (Dil):($0.13)($0.11)($0.03)($0.15) SQ AM Coverage:1.000x1.000x1.000x1.000x PF AMGP Coverage: 1.000x1.000x1.000x1.000x (0.8%) (3.3%)(3.6%) 2019E2020E2021E2022E M:$2.71$3.18$3.66$4.19 Accretion / (Dilution) - % (2.2%) (5.3%) 2019E M:$2.38
Precedent Simplification Transactions 8/1/18 5/17/18 3/26/18 1/2/18 2/1/17 11/21/16 10/24/16 9/6/16 5/30/16 11/3/15 10/26/15 7/13/15 5/6/15 4/6/15 1/26/15 6/15/14 10/13/14 8/10/14 8/10/14 7/24/14 10/10/13 8/27/13 5/6/13 1/29/13 2/23/11 Energy Transfer Equity, L.P. Williams Companies Tall Grass Energy GP, LP Arc hroc k, Inc O NEO K, Inc Sunoc o Logistic s Partners, LP Americ an M idstream Partners LP Enbridge, Inc . SemGroup Corp. Targa Resourc es Corp. Western Refining, Inc . M PLX LP Crestwood Equity Partners, LP Tesoro Logistic s LP Energy Transfer Partners, LP Williams Partners LP Targa Resourc es Partners LP Kinder M organ Inc . Kinder M organ Inc . Breitburn Energy Partners Regenc y Energy Partners LP Plains All Americ an LP Inergy M idstream LP Kinder M organ Energy Partners LP Enterprise Produc ts Partners LP Energy Transfer Partners, LP Williams Partners, LP Tallgrass Energy Partners, LP Arc hroc k Partners, LP O NEO K Partners, LP Energy Transfer Partners, LP JP Energy Partners LP Spec tra Energy Rose Roc k M idstream Targa Resourc es Partners LP Northern Tier Energy M arkWest Energy Partners, LP Crestwood M idstream Partners QEP M idstream Partners LP Regenc y Energy Partners LP Ac c ess M idstream Partners LP Atlas Pipeline Partners LP Kinder M organ Energy Partners El Paso Pipeline Partners QR Energy LP PVR Partners LP PAA Natural Gas Storage LP Crestwood M idstream Partners LP Copano Energy LLC Dunc an Energy Partners LP $66,981 $57,793 $8,361 $2,438 $23,654 $54,455 $476 $46,980 $2,034 $12,229 $5,286 $22,360 $6,920 $1,145 $18,593 $35,891 $6,002 $52,566 $13,677 $2,856 $5,659 $2,531 $2,643 $4,858 $3,282 (8.7%) 8.8% 4.6% (11.8%) 2.8% (4.1%) 5.0% (0.8%) 12.9% (7.3%) 2.6% (13.6%) (2.0%) (16.0%) (14.8%) 11.8% (8.1%) (11.3%) (9.1%) 12.5% (0.5%) (5.9%) 5.5% (13.8%) 0.8% 3.6% 12.6% 8.8% 0.5% 7.1% 0.7% 5.0% 2.4% 10.2% (1.8%) 10.1% (10.9%) 3.1% (21.8%) (15.1%) 2.4% (14.2%) (6.7%) (4.8%) 16.3% (4.7%) 4.8% (0.7%) (23.3%) 1.3% 6.0% 14.4% 5.7% 5.7% 10.6% 2.1% --4.1% 7.4% 1.6% 0.0% (10.0%) 6.9% (16.2%) (8.1%) 2.7% (15.9%) (4.8%) 2.7% 34.0% (5.8%) 3.8% (5.6%) (20.3%) (1.5%) 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 35.4% 92.4% 100.0% 100.0% 98.8% 100.0% 96.7% 88.0% 88.0% 80.7% 99.0% 100.0% 96.2% 100.0% 100.0% ---- ---- ---- ---- ---- $17.50 $6.20 ---- $0.32 --$1.26 $10.77 $4.65 $4.29 $0.29 --$1.03 ---- Source: Company filings, Wall Street Research Note: Accretion Dilution represents Target DCF pro forma for Acquirer Exchange Ratio (grossed up for cash consideration where applicable). (1)Accretion / (dilution) at AR Base Case assuming grossed up by 1.8326x XR. (2)Cash consideration for Public AM unitholders. 11 M edian $6,461 (3.0%) 1.3% 2.4% 100.0% $2.77 M ean $17,897 (3.4%) (0.6%) 0.8% 95.2% $3.60 At Transaction(1)Antero Midstream GP LP Antero Midstream Partners LP $11,144 9.7% 12.7% 17.2% 94.6% $3.42(2) I Cash Consideration H % Equity Consideration G FY + 3 Ac c retion F FY + 2 Ac c retion E FY + 1 Ac c retion D Transac tion Value C Target B Ac quiror A Announc ement Date CONFIDENTIAL
Disclosure Statement Tudor, Pickering, Holt & Co. does not provide accounting, tax or legal advice. In addition, we mutually agree that, subject to applicable law, you (and your employees, representatives and other agents) may disclose any aspects of any potential transaction or structure described herein that are necessary to support any U.S. federal income tax benefits, and all materials of any kind (including tax opinions and other tax analyses) related to those benefits, with no limitations imposed by Tudor, Pickering, Holt & Co. About The Firm Tudor, Pickering, Holt & Co. is an integrated energy investment and merchant bank, providing high quality advice and services to institutional and corporate clients. Through the companys two broker-dealer units, Tudor, Pickering, Holt & Co. Securities, Inc. (TPHCSI) and Tudor Pickering Holt & Co Advisors LP (TPHCA), members FINRA, together with affiliates in the United Kingdom and Canada, the company offers securities and investment banking services to the energy community. Perella Weinberg Partners Capital Management LP is an SEC registered investment adviser that delivers a suite of energy investment strategies. The information contained herein is confidential (except for information relating to United States tax issues) and may not be reproduced in whole or in part. Tudor, Pickering, Holt & Co. assumes no responsibility for independent verification of third-party information and has relied on such information being complete and accurate in all material respects. To the extent such information includes estimates and forecasts of future financial performance (including estimates of potential cost savings and synergies) prepared by, reviewed or discussed with the managements of your company and/ or other potential transaction participants or obtained from public sources, we have assumed that such estimates and forecasts have been reasonably prepared on bases reflecting the best currently available estimates and judgments of such managements (or, with respect to estimates and forecasts obtained from public sources, represent reasonable estimates). These materials were designed for use by specific persons familiar with the business and the affairs of your company for use in a specific context and were not prepared with a view to public disclosure or to conform with any disclosure standards under any state, federal or international securities laws or other laws, rules or regulations. The firm, headquartered in Houston, Texas, has approximately 170 employees and offices in Calgary, Canada; Denver, Colorado; New York, New York; and London, England. Contact Us Houston (Research, Sales and Trading): 713-333-2960 Houston (Investment Banking): 713-333-7100 Houston (Asset Management): 713-337-3999 Denver (Sales): 303-300-1900 Denver (Investment Banking): 303-300-1900 New York (Investment Banking): 212-610-1660 New York (Research, Sales): 212-610-1600 London: +011 44(0) 20 7268 2800 Calgary: 403-705-7830 Under no circumstances is this presentation to be used or considered as an offer to sell or a solicitation of any offer to buy, any security. Prior to making any trade, you should discuss with your professional tax, accounting, or regulatory advisers how such particular trade(s) affect you. This brief statement does not disclose all of the risks and other significant aspects of entering into any particular transaction. www.TPHco.com Tudor, Pickering, Holt & Co. operates in the United Kingdom under the trading name Perella Weinberg Partners UK LLP (authorized and regulated by the Financial Conduct Authority), and in Canada through its affiliate, Tudor, Pickering, Holt & Co. Securities Canada, ULC, located in Calgary, Alberta. Copyright 2018 Tudor, Pickering, Holt & Co. 12 CONFIDENTIAL
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