Reporting Segments

6 Months Ended

Jun. 30, 2016

Reporting Segments

Reporting Segments

(10)Reporting Segments

The Partnership’s operations are located in the United States and are organized into two reporting segments: (1) gathering and compression and (2) water handling and treatment.

Gathering and Compression

The gathering and compression segment includes a network of gathering pipelines and compressor stations that collect natural gas, NGLs and oil from Antero’s wells in West Virginia and Ohio.

Water Handling and Treatment

The Partnership’s water handling and treatment segment includes two independent fresh water distribution systems that source and deliver fresh water from the Ohio River and several regional waterways, and other fluid handling services for well completion operations in Antero’s operating areas. These fresh water systems consist of permanent buried pipelines, surface pipelines and fresh water storage facilitates, as well as pumping stations and impoundments to transport the fresh water throughout the pipelines. Other fluid handling services consist of the disposal and treatment of waste water, including a waste water treatment facility, currently under construction, and high rate transfer of fresh water.

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. We evaluate the performance of the Partnership’s business segments based on operating income. Interest expense is primarily managed and evaluated on a consolidated basis.

Summarized financial information concerning the Partnership’s segments for the periods indicated is shown in the following table (in thousands):

			Water
	Gathering and		Handling and		Consolidated
	Compression		Treatment		Total
Three months ended June 30, 2015
Revenues:
Revenue - Antero	$	56,593	$	31,500	$	88,093
Operating expenses:
Direct operating		11,292		6,629		17,921
General and administrative (before equity-based compensation)		4,529		1,033		5,562
Equity-based compensation		5,388		1,209		6,597
Depreciation		15,091		6,162		21,253
Total expenses		36,300		15,033		51,333
Operating income	$	20,293	$	16,467	$	36,760
Total assets	$	1,392,898	$	416,909	$	1,809,807
Additions to property and equipment	$	74,061	$	11,950	$	86,011
Three months ended June 30, 2016
Revenues:
Revenue - Antero	$	71,715	$	64,893	$	136,608
Revenue - third-party		202		-		202
Total revenues		71,917		64,893		136,810
Operating expenses:
Direct operating		7,447		35,150		42,597
General and administrative (before equity-based compensation)		4,837		1,675		6,512
Equity-based compensation		5,301		1,492		6,793
Depreciation		16,964		7,176		24,140
Accretion of contingent acquisition consideration		-		3,461		3,461
Total expenses		34,549		48,954		83,503
Operating income	$	37,368	$	15,939	$	53,307
Total assets	$	1,583,246	$	569,624	$	2,152,870
Additions to property and equipment	$	48,283	$	41,589	$	89,872

			Water
	Gathering and		Handling and		Consolidated
	Compression		Treatment		Total
Six months ended June 30, 2015
Revenues:
Revenue - Antero	$	108,836	$	64,941	$	173,777
Revenue - third-party		—		151		151
Total revenues		108,836		65,092		173,928
Operating expenses:
Direct operating		22,981		14,241		37,222
General and administrative (before equity-based compensation)		9,407		2,295		11,702
Equity-based compensation		10,011		2,365		12,376
Depreciation		29,673		12,282		41,955
Total expenses		72,072		31,183		103,255
Operating income	$	36,764	$	33,909	$	70,673
Total assets	$	1,392,898	$	416,909	$	1,809,807
Additions to property and equipment	$	159,798	$	33,265	$	193,063
Six months ended June 30, 2016
Revenues:
Revenue - Antero	$	141,066	$	131,339	$	272,405
Revenue - third-party		477		—		477
Total revenues		141,543		131,339		272,882
Operating expenses:
Direct operating		15,066		76,672		91,738
General and administrative (before equity-based compensation)		9,785		3,846		13,631
Equity-based compensation		9,688		3,078		12,766
Depreciation		33,826		14,137		47,963
Accretion of contingent acquisition consideration		—		6,857		6,857
Total expenses		68,365		104,590		172,955
Operating income	$	73,178	$	26,749	$	99,927
Total assets	$	1,583,246	$	569,624	$	2,152,870
Additions to property and equipment	$	96,969	$	78,625	$	175,594