Annual report pursuant to Section 13 and 15(d)

Goodwill and Intangibles

v3.20.4
Goodwill and Intangibles
12 Months Ended
Dec. 31, 2020
Goodwill and Intangibles  
Goodwill and Intangibles

(5)  Goodwill and Intangibles

The Company evaluates goodwill for impairment annually during the fourth quarter and whenever events or changes in circumstances indicate it is more likely than not that the fair value of a reporting unit with goodwill is less than its carrying amount. Significant assumptions used to estimate the reporting units’ fair value include the discount rate as well as estimates of future cash flows, which are impacted primarily by commodity prices and producer customers’ development plans (which impact volumes and capital requirements).

During the third quarter of 2019, the Company incurred impairment charges to the goodwill and customer relationships intangible asset associated with the Clearwater Facility, which is in the water handling segment. See Note 4—Clearwater Facility Idling.

During the fourth quarter of 2019, the Company incurred impairment charges of $298 million to its fresh water delivery and services reporting unit, which is in the water handling segment. This was primarily due to decreased water volumes driven by decreased drilling operations by Antero Resources. There was no goodwill remaining in this segment after this impairment was incurred.

During the first quarter of 2020, the Company performed an interim impairment analysis of the goodwill due to changes in Antero Resources’ drilling plans as a result of the decline in commodity prices. As a result of this evaluation, the Company impaired all remaining goodwill of $575 million associated with its gathering and processing segment in the first quarter of 2020.

All customer relationships are subject to amortization and will be amortized over a weighted-average period of 21 years, which reflects the remaining economic life of the relationships as of December 31, 2020. The changes in the carrying amount of customer relationships for the years ended December 31, 2019 and 2020 were as follows (in thousands):

Customer relationships as of December 31, 2018

    

$

Customer relationships acquired(1)

1,567,000

Amortization of customer relationships

(57,010)

Impairment of customer relationships

(11,871)

Customer relationships as of December 31, 2019

1,498,119

Amortization of customer relationships

(70,672)

Customer relationships as of December 31, 2020

$

1,427,447

(1) See Note 3—Business Combination.

Future amortization expense is as follows (in thousands):

Year ending December 31, 2021

$

70,672

Year ending December 31, 2022

70,672

Year ending December 31, 2023

70,672

Year ending December 31, 2024

70,672

Year ending December 31, 2025

70,672

Thereafter

1,074,087

Total

$

1,427,447