Reporting Segments

9 Months Ended

Sep. 30, 2016

Reporting Segments

Reporting Segments

(11)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 September 30, 2015
Revenues:
Revenue - Antero	$	59,220	$	21,819	$	81,039
Revenue - third-party		38		627		665
Total revenues		59,258		22,446		81,704
Operating expenses:
Direct operating		(3,164)		4,773		1,609
General and administrative		11,265		2,577		13,842
Depreciation		15,076		6,485		21,561
Total expenses		23,177		13,835		37,012
Operating income	$	36,081	$	8,611	$	44,692
Total assets	$	1,395,057	$	487,734	$	1,882,791
Additions to property and equipment	$	82,751	$	48,381	$	131,132
Three months ended September 30, 2016
Revenues:
Revenue - Antero	$	77,871	$	72,411	$	150,282
Revenue - third-party		193		-		193
Total revenues		78,064		72,411		150,475
Operating expenses:
Direct operating		4,692		28,521		33,213
General and administrative		10,281		3,035		13,316
Depreciation		18,298		7,838		26,136
Accretion of contingent acquisition consideration		-		3,527		3,527
Total expenses		33,271		42,921		76,192
Operating income	$	44,793	$	29,490	$	74,283
Total assets	$	1,653,292	$	562,995	$	2,216,287
Additions to property and equipment	$	55,800	$	58,730	$	114,530

			Water
	Gathering and		Handling and		Consolidated
	Compression		Treatment		Total
Nine months ended September 30, 2015
Revenues:
Revenue - Antero	$	168,056	$	86,759	$	254,815
Revenue - third-party		38		778		816
Total revenues		168,094		87,537		255,631
Operating expenses:
Direct operating		19,817		19,013		38,830
General and administrative		30,685		7,238		37,923
Depreciation		44,748		18,767		63,515
Total expenses		95,250		45,018		140,268
Operating income	$	72,844	$	42,519	$	115,363
Total assets	$	1,395,057	$	487,734	$	1,882,791
Additions to property and equipment	$	242,549	$	81,646	$	324,195
Nine months ended September 30, 2016
Revenues:
Revenue - Antero	$	218,938	$	203,750	$	422,688
Revenue - third-party		669		—		669
Total revenues		219,607		203,750		423,357
Operating expenses:
Direct operating		19,758		105,193		124,951
General and administrative		29,755		9,957		39,712
Depreciation		52,125		21,975		74,100
Accretion of contingent acquisition consideration		—		10,384		10,384
Total expenses		101,638		147,509		249,147
Operating income	$	117,969	$	56,241	$	174,210
Total assets	$	1,653,292	$	562,995	$	2,216,287
Additions to property and equipment	$	152,769	$	137,355	$	290,124