| Reportable Segments |
(14) Reportable Segments
The Company’s operations, which are located in the United States, are organized into two reportable 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, as well as other fluid handling services, which includes high rate transfer, wastewater transportation, disposal and blending. See Note 6—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, 2020 and 2021:
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Three Months Ended September 30, 2020 |
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Gathering and |
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Water |
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Consolidated |
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(in thousands) |
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Processing |
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Handling |
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Unallocated (1) |
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Total |
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Revenues: |
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Revenue–Antero Resources |
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$ |
190,214 |
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|
61,001 |
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— |
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|
251,215 |
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Amortization of customer relationships |
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(9,342) |
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(8,458) |
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— |
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(17,800) |
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Total revenues |
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180,872 |
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|
52,543 |
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— |
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|
233,415 |
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Operating expenses: |
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Direct operating |
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|
16,078 |
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21,974 |
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— |
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38,052 |
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General and administrative |
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8,137 |
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|
3,100 |
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1,995 |
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|
13,232 |
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Facility idling |
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— |
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2,527 |
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— |
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|
2,527 |
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Impairment of property and equipment |
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|
947 |
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— |
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— |
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|
947 |
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Depreciation |
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14,900 |
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|
11,901 |
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— |
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|
26,801 |
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Accretion of asset retirement obligations |
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— |
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|
39 |
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— |
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|
39 |
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Total operating expenses |
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40,062 |
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39,541 |
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|
1,995 |
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|
81,598 |
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Operating income |
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$ |
140,810 |
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|
13,002 |
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(1,995) |
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|
151,817 |
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Equity in earnings of unconsolidated affiliates |
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$ |
23,173 |
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— |
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— |
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23,173 |
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Total assets |
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$ |
4,383,313 |
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1,146,687 |
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143,504 |
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5,673,504 |
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Additions to property and equipment |
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$ |
34,041 |
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|
7,810 |
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— |
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|
41,851 |
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| (1) |
Certain expenses that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis. |
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Three Months Ended September 30, 2021 |
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Gathering and |
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Water |
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Consolidated |
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(in thousands) |
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Processing |
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Handling |
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Unallocated (1) |
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Total |
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Revenues: |
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Revenue–Antero Resources |
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$ |
188,716 |
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|
53,511 |
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— |
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|
242,227 |
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Revenue–third-party |
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— |
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245 |
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— |
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|
245 |
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Amortization of customer relationships |
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(9,271) |
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(8,397) |
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— |
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(17,668) |
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Total revenues |
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179,445 |
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|
45,359 |
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— |
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|
224,804 |
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Operating expenses: |
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Direct operating |
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16,161 |
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|
23,338 |
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— |
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|
39,499 |
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General and administrative |
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|
9,076 |
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|
4,554 |
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|
1,180 |
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|
14,810 |
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Facility idling |
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— |
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|
870 |
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— |
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|
870 |
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Impairment of property and equipment |
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— |
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|
203 |
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— |
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|
203 |
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Depreciation |
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|
15,151 |
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|
12,336 |
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— |
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|
27,487 |
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Accretion of asset retirement obligations |
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— |
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|
114 |
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— |
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|
114 |
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Total operating expenses |
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40,388 |
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41,415 |
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|
1,180 |
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|
82,983 |
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Operating income |
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$ |
139,057 |
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|
3,944 |
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(1,180) |
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141,821 |
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Equity in earnings of unconsolidated affiliates |
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$ |
24,088 |
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— |
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— |
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|
24,088 |
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Total assets |
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$ |
4,416,828 |
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1,100,884 |
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15,921 |
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5,533,633 |
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Additions to property and equipment, net |
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$ |
69,069 |
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|
13,514 |
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— |
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|
82,583 |
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| (1) |
Certain expenses that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis. |
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Nine Months Ended September 30, 2020 |
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Gathering and |
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Water |
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Consolidated |
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(in thousands) |
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Processing |
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Handling |
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Unallocated (1) |
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Total |
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Revenues: |
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Revenue–Antero Resources |
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$ |
527,334 |
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|
222,536 |
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— |
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749,870 |
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Amortization of customer relationships |
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(27,819) |
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(25,192) |
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— |
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(53,011) |
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Total revenues |
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499,515 |
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|
197,344 |
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— |
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|
696,859 |
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Operating expenses: |
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Direct operating |
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43,528 |
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|
85,319 |
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— |
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|
128,847 |
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General and administrative |
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|
23,420 |
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|
9,685 |
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|
6,086 |
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|
39,191 |
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Facility idling |
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— |
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|
13,680 |
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— |
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13,680 |
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Impairment of goodwill |
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575,461 |
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— |
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— |
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|
575,461 |
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Impairment of property and equipment |
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|
947 |
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|
89,083 |
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— |
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|
90,030 |
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Depreciation |
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|
42,356 |
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|
39,533 |
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— |
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|
81,889 |
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Accretion of asset retirement obligations |
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— |
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|
142 |
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— |
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|
142 |
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Loss on asset sale |
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— |
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|
240 |
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— |
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|
240 |
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Total operating expenses |
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685,712 |
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|
237,682 |
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|
6,086 |
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|
929,480 |
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Operating loss |
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$ |
(186,197) |
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(40,338) |
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(6,086) |
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(232,621) |
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Equity in earnings of unconsolidated affiliates |
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$ |
63,197 |
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— |
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— |
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|
63,197 |
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Total assets |
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$ |
4,383,313 |
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1,146,687 |
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|
143,504 |
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|
5,673,504 |
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Additions to property and equipment |
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$ |
137,978 |
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|
27,287 |
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— |
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|
165,265 |
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| (1) |
Certain expenses that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis. |
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Nine Months Ended September 30, 2021 |
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Gathering and |
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Water |
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Consolidated |
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(in thousands) |
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Processing |
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Handling |
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Unallocated (1) |
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Total |
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Revenues: |
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Revenue–Antero Resources |
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$ |
566,544 |
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|
167,832 |
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— |
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|
734,376 |
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Revenue–third-party |
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— |
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|
340 |
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— |
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|
340 |
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Amortization of customer relationships |
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(27,813) |
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(25,191) |
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— |
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(53,004) |
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Total revenues |
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|
538,731 |
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|
142,981 |
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— |
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|
681,712 |
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Operating expenses: |
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Direct operating |
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|
50,409 |
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|
67,959 |
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— |
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|
118,368 |
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General and administrative |
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|
26,459 |
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|
17,107 |
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|
3,425 |
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|
46,991 |
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Facility idling |
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— |
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|
3,033 |
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— |
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|
3,033 |
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Impairment of property and equipment |
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|
1,218 |
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|
364 |
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— |
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|
1,582 |
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Depreciation |
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|
44,268 |
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|
36,688 |
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|
— |
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|
80,956 |
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Accretion of asset retirement obligations |
|
|
— |
|
|
347 |
|
|
— |
|
|
347 |
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Loss on asset sale |
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|
3,628 |
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|
— |
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|
— |
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|
3,628 |
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Total operating expenses |
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|
125,982 |
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|
125,498 |
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|
3,425 |
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|
254,905 |
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Operating income |
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$ |
412,749 |
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|
17,483 |
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(3,425) |
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|
426,807 |
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Equity in earnings of unconsolidated affiliates |
|
$ |
66,347 |
|
|
— |
|
|
— |
|
|
66,347 |
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Total assets |
|
$ |
4,416,828 |
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|
1,100,884 |
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|
15,921 |
|
|
5,533,633 |
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Additions to property and equipment, net |
|
$ |
120,727 |
|
|
36,221 |
|
|
— |
|
|
156,948 |
|
| (1) |
Certain expenses that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis. |
|