Reportable Segments

3 Months Ended

Mar. 31, 2022

Reportable Segments

Reportable Segments

(14) Reportable Segments

(a) Summary of Reportable Segments

The Company’s operations, which are located in the United States, are organized into two reportable segments: (i) gathering and processing and (ii) water handling. 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.

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 water from sources including the Ohio River, local reservoirs and several regional waterways. Portions of these water handling systems are also utilized to transport flowback and produced water. The water handling systems consist of permanent buried pipelines, surface pipelines and water storage facilities, as well as pumping stations, blending facilities and impoundments to transport water throughout the systems used to deliver water for Antero Resources’ well completions.

(b) Reportable Segments Financial Information

The summarized operating results of the Company’s reportable segments are as follows:

	Three Months Ended March 31, 2021
	Gathering and		Water				Consolidated
(in thousands)	Processing		Handling		Unallocated (1)		Total
Revenues:
Revenue–Antero Resources	$	185,161		56,603		—		241,764
Revenue–third-party		—		25		—		25
Amortization of customer relationships		(9,271)		(8,397)		—		(17,668)
Total revenues		175,890		48,231		—		224,121
Operating expenses:
Direct operating		17,236		22,078		—		39,314
General and administrative		8,649		7,680		1,601		17,930
Facility idling		—		1,179		—		1,179
Depreciation		14,713		12,137		—		26,850
Impairment of property and equipment		1,218		161		—		1,379
Accretion of asset retirement obligations		—		119		—		119
Loss on asset sale		3,763		—		—		3,763
Total operating expenses		45,579		43,354		1,601		90,534
Operating income	$	130,311		4,877		(1,601)		133,587
Equity in earnings of unconsolidated affiliates	$	20,744		—		—		20,744
Additions to property and equipment	$	15,059		13,330		—		28,389

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

	Three Months Ended March 31, 2022
	Gathering and		Water				Consolidated
(in thousands)	Processing		Handling		Unallocated (1)		Total
Revenues:
Revenue–Antero Resources	$	182,443		53,321		—		235,764
Revenue–third-party		—		395		—		395
Amortization of customer relationships		(9,271)		(8,397)		—		(17,668)
Total revenues		173,172		45,319		—		218,491
Operating expenses:
Direct operating		17,182		24,830		—		42,012
General and administrative		9,701		6,741		1,489		17,931
Facility idling		—		1,148		—		1,148
Depreciation		15,807		12,493		—		28,300
Accretion of asset retirement obligations		—		64		—		64
Gain on asset sale		(31)		(87)		—		(118)
Total operating expenses		42,659		45,189		1,489		89,337
Operating income	$	130,513		130		(1,489)		129,154
Equity in earnings of unconsolidated affiliates	$	23,232		—		—		23,232
Additions to property and equipment, net	$	70,734		13,533		—		84,267

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

The summarized total assets of the Company’s reportable segments are as follows:

			(Unaudited)
	December 31,		March 31,
(in thousands)	2021		2022
Gathering and Processing	$	4,450,939		4,496,300
Water Handling		1,092,122		1,083,335
Unallocated (1)		940		959
Total assets	$	5,544,001		5,580,594

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