Reporting Segments

12 Months Ended

Dec. 31, 2019

(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.

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 (See Note 4—Clearwater Facility Impairment), 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.

The operating results and assets of the Company’s reportable segments were as follows for the year ended December 31, 2019 (in thousands):


	Gathering and		Water				Consolidated
	Processing		Handling		Unallocated ⁽¹⁾		Total
Year ended December 31, 2019
Revenues:
Revenue–Antero Resources	$	543,538		306,010		—		849,548
Revenue–third-party		—		50		—		50
Amortization of customer relationships		(29,850)		(27,160)		—		(57,010)
Total revenues		513,688		278,900		—		792,588

Operating expenses:
Direct operating		41,546		154,272		—		195,818
General and administrative (excluding equity-based compensation)		20,660		10,898		13,038		44,596
Facility idling		—		11,401		—		11,401
Equity-based compensation		5,561		2,130		65,826		73,517
Impairment of property and equipment		592		409,147		—		409,739
Impairment of goodwill		—		340,350		—		340,350
Impairment of customer relationships		—		11,871		—		11,871
Depreciation		39,652		55,874		—		95,526
Accretion and change in fair value of contingent acquisition consideration		—		8,076		—		8,076
Accretion of asset retirement obligations		—		187		—		187
Total expenses		108,011		1,004,206		78,864		1,191,081
Operating income (loss)	$	405,677		(725,306)		(78,864)		(398,493)

Equity in earnings of unconsolidated affiliates	$	51,315		—		—		51,315
Total assets	$	4,891,114		1,287,245		104,519		6,282,878
Additions to property and equipment, net	$	267,383		124,607		—		391,990

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