Reportable Segments

3 Months Ended

Mar. 31, 2024

Reportable Segments

Reportable Segments

(15) 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 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, 2023
	Gathering and		Water				Consolidated
(in thousands)	Processing		Handling		Unallocated (1)		Total
Revenues:
Revenue–Antero Resources	$	199,576		77,295		—		276,871
Revenue–third-party		—		272		—		272
Amortization of customer relationships		(9,271)		(8,397)		—		(17,668)
Total revenues		190,305		69,170		—		259,475
Operating expenses:
Direct operating		24,118		33,755		—		57,873
General and administrative		10,180		6,208		959		17,347
Facility idling		—		574		—		574
Depreciation		22,063		13,133		—		35,196
Accretion of asset retirement obligations		—		44		—		44
Loss on settlement of asset retirement obligations		—		341		—		341
Gain on asset sale		(242)		(3)		—		(245)
Total operating expenses		56,119		54,052		959		111,130
Operating income	$	134,186		15,118		(959)		148,345
Equity in earnings of unconsolidated affiliates	$	24,456		—		—		24,456
Additions to property and equipment	$	29,197		13,760		—		42,957

(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, 2024
	Gathering and		Water				Consolidated
(in thousands)	Processing		Handling		Unallocated (1)		Total
Revenues:
Revenue–Antero Resources	$	227,593		68,455		—		296,048
Revenue–third-party		—		671		—		671
Amortization of customer relationships		(9,271)		(8,397)		—		(17,668)
Total revenues		218,322		60,729		—		279,051
Operating expenses:
Direct operating		26,143		27,775		—		53,918
General and administrative		14,733		5,226		1,262		21,221
Facility idling		—		522		—		522
Depreciation		23,421		13,674		—		37,095
Accretion of asset retirement obligations		—		44		—		44
Total operating expenses		64,297		47,241		1,262		112,800
Operating income	$	154,025		13,488		(1,262)		166,251
Equity in earnings of unconsolidated affiliates	$	27,530		—		—		27,530
Additions to property and equipment	$	27,723		7,350		—		35,073

(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)	2023		2024
Gathering and Processing	$	4,691,827		4,718,671
Water Handling		1,045,725		1,030,097
Unallocated (1)		66		473
Total assets	$	5,737,618		5,749,241

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