Quarterly report pursuant to Section 13 or 15(d)

Reporting Segments

v3.20.2
Reporting Segments
9 Months Ended
Sep. 30, 2020
Reporting Segments  
Reporting Segments

(16) Reporting Segments

Prior to the closing of the Transactions, AMGP had no reporting segment results. Following the completion of the Transactions, the Company’s operations, which are located in the United States, are organized into two reporting segments: (i) gathering and processing and (ii) water handling.

Gathering and Processing

The gathering and processing segment includes a network of gathering pipelines and compressor stations that collect and process production from Antero Resources’ wells in West Virginia and Ohio. The gathering and processing segment also includes equity in earnings from the Company’s investments in the Joint Venture and Stonewall.

Water Handling

The Company’s water handling segment includes two independent systems that deliver fresh water from sources including the Ohio River, local reservoirs and several regional waterways. The water handling segment also includes the Clearwater Facility that was placed in service in 2018 and idled in September 2019 (See Note 4—Clearwater Facility Idling), as well as other fluid handling services, which includes high rate transfer, wastewater transportation, disposal and treatment. See Note 8—Property and Equipment.

These segments are monitored separately by management for performance and are consistent with internal financial reporting. These segments have been identified based on the differing products and services, regulatory environment and the expertise required for these operations. Management evaluates the performance of the Company’s business segments based on operating income. Interest expense is primarily managed and evaluated on a consolidated basis.

The summarized operating results and assets of the Company’s reportable segments were as follows for the three and nine months ended September 30, 2019 and 2020:

Gathering and

Water

Consolidated

(in thousands)

  

Processing

  

Handling

  

Unallocated (1)

  

Total

Three months ended September 30, 2019

Revenues:

Revenue–Antero Resources

$

175,719

96,939

272,658

Amortization of customer contracts

(16,363)

(12,500)

(28,863)

Total revenues

159,356

84,439

243,795

Operating expenses:

Direct operating

13,197

48,611

61,808

General and administrative (excluding equity-based compensation)

6,741

3,098

627

10,466

Facility idling

1,512

1,512

Equity-based compensation

1,348

450

18,331

20,129

Impairment of goodwill

43,759

43,759

Impairment of property and equipment

407,848

407,848

Impairment of customer relationships

5,871

5,871

Depreciation

11,709

12,751

24,460

Accretion and change in fair value of contingent acquisition consideration

1,977

1,977

Accretion of asset retirement obligations

54

54

Total expenses

32,995

525,931

18,958

577,884

Operating income (loss)

$

126,361

(441,492)

(18,958)

(334,089)

Equity in earnings of unconsolidated affiliates

$

18,478

18,478

Total assets

$

4,768,005

1,639,295

38,204

6,445,504

Additions to property and equipment

$

81,715

39,160

120,875

(1) Certain expenses that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis.

Gathering and

Water

Consolidated

(in thousands)

   

Processing

   

Handling

   

Unallocated (1)

  

Total

Three months ended September 30, 2020

Revenues:

Revenue–Antero Resources

$

190,214

61,001

251,215

Amortization of customer relationships

(9,342)

(8,458)

(17,800)

Total revenues

180,872

52,543

233,415

Operating expenses:

Direct operating

16,078

21,974

38,052

General and administrative (excluding equity-based compensation)

5,405

2,579

1,570

9,554

Facility idling

2,527

2,527

Equity-based compensation

2,732

521

425

3,678

Impairment of property and equipment

947

947

Depreciation

14,900

11,901

26,801

Accretion of asset retirement obligations

39

39

Total expenses

40,062

39,541

1,995

81,598

Operating income

$

140,810

13,002

(1,995)

151,817

Equity in earnings of unconsolidated affiliates

$

23,173

23,173

Total assets

$

4,383,313

1,146,687

143,504

5,673,504

Additions to property and equipment

$

34,041

7,810

41,851

(1) Certain expenses that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis.

Gathering and

Water

Consolidated

(in thousands)

    

Processing

    

Handling

    

Unallocated (1)

Total

Nine months ended September 30, 2019

    

    

    

   

Revenues:

Revenue–Antero Resources

$

378,178

214,471

592,649

Revenue–third-party

50

50

Amortization of customer relationships

(19,266)

(19,912)

(39,178)

Total revenues

358,912

194,609

553,521

Operating expenses:

Direct operating

28,509

112,279

140,788

General and administrative (excluding equity-based compensation)

15,096

7,630

9,205

31,931

Facility idling

1,512

1,512

Equity-based compensation

4,011

1,589

47,495

53,095

Impairment of goodwill

43,759

43,759

Impairment of property and equipment

592

407,850

408,442

Impairment of customer relationships

5,871

5,871

Depreciation

26,990

41,567

68,557

Accretion and change in fair value of contingent acquisition consideration

5,323

5,323

Accretion of asset retirement obligations

133

133

Total operating expenses

75,198

627,513

56,700

759,411

Operating income (loss)

$

283,714

(432,904)

(56,700)

(205,890)

Equity in earnings of unconsolidated affiliates

$

34,981

34,981

Total assets

$

4,768,005

1,639,295

38,204

6,445,504

Additions to property and equipment

$

170,921

91,144

262,065

(1) Certain expenses that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis.

Gathering and

Water

Consolidated

(in thousands)

    

Processing

    

Handling

    

Unallocated (1)

Total

Nine months ended September 30, 2020

Revenues:

Revenue–Antero Resources

$

527,334

222,536

749,870

Amortization of customer relationships

(27,819)

(25,192)

(53,011)

Total revenues

499,515

197,344

696,859

Operating expenses:

Direct operating

43,528

85,319

128,847

General and administrative (excluding equity-based compensation)

15,889

8,178

5,411

29,478

Facility idling

13,680

13,680

Equity-based compensation

7,531

1,507

675

9,713

Impairment of goodwill

575,461

575,461

Impairment of property and equipment

947

89,083

90,030

Depreciation

42,356

39,533

81,889

Accretion of asset retirement obligations

142

142

Loss on asset sale

240

240

Total operating expenses

685,712

237,682

6,086

929,480

Operating loss

$

(186,197)

(40,338)

(6,086)

(232,621)

Equity in earnings of unconsolidated affiliates

$

63,197

63,197

Total assets

$

4,383,313

1,146,687

143,504

5,673,504

Additions to property and equipment, net

$

137,978

27,287

165,265

(1) Certain expenses that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis.