Reporting Segments

9 Months Ended

Sep. 30, 2019

Reporting Segments

Reporting Segments

(17) 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: (1) gathering and processing and (2) water handling and treatment.

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 and Treatment

The Company’s water handling and treatment segment includes two independent systems that deliver fresh water from sources including the Ohio River, local reservoirs as well as several regional waterways. The water handling and treatment 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 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.

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

			Water
	Gathering and		Handling and				Consolidated
	Processing		Treatment		Unallocated (1)		Total
Three months ended September 30, 2019
Revenues:
Revenue–Antero Resources	$	175,719		96,939		—		272,658
Amortization of customer relationships		(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 property and equipment		—		407,848		—		407,848
Impairment of goodwill		—		43,759		—		43,759
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	$	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 and treatment are managed and evaluated on a consolidated basis.

			Water
	Gathering and		Handling and				Consolidated
	Processing		Treatment		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 property and equipment		592		407,850		—		408,442
Impairment of goodwill		—		43,759		—		43,759
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 expenses		75,198		627,513		56,700		759,411
Operating income	$	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, net	$	170,921		91,144		—		262,065

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