Segment Information

12 Months Ended

Dec. 31, 2019

(18) Segment Information

See Note 2(t) to the consolidated financial statements for a description of the Company’s determination of its reportable segments. Revenues from gathering and processing and water handling and treatment operations were primarily derived from intersegment transactions for services provided to the Company’s exploration and production operations prior to the closing of the Transactions. Through March 12, 2019, the results of Antero Midstream Partners were included in the consolidated financial statements of Antero Resources. Effective March 13, 2019, the results of Antero Midstream Partners are no longer consolidated in Antero Resources’ result; however, the Company’s segment disclosures include the results of our unconsolidated affiliates due to their significance to the Company’s operations. See Note 3 to the consolidated financial statements for further discussion on the Transactions. Marketing revenues are primarily derived from activities to purchase and sell third-party natural gas and NGLs and to market excess firm transportation capacity to third parties.

Operating segments are evaluated based on their contribution to consolidated results, which is primarily determined by the respective operating income (loss) of each segment. General and administrative expenses were allocated to the midstream segment based on the nature of the expenses and on a combination of the segments’ proportionate share of the Company’s consolidated property and equipment, capital expenditures, and labor costs, as applicable. General and administrative expenses related to the marketing segment are not allocated because they are immaterial. Other income, income taxes, and interest expense are primarily managed and evaluated on a consolidated basis. Intersegment sales were transacted at prices which approximate market. Accounting policies for each segment are the same as the Company’s accounting policies described in Note 2 to the consolidated financial statements.

The operating results and assets of the Company’s reportable segments were as follows for the years ended December 31, 2017, 2018 and 2019 (in thousands):


	Exploration						Elimination of
	and						intersegment		Consolidated
	production		Marketing		Midstream		transactions		total
Year ended December 31, 2017:
Sales and revenues:
Third-party	$	3,406,203		236,651		12,720		—		3,655,574
Intersegment		17,358		—		759,777		(777,135)		—
Total	$	3,423,561		236,651		772,497		(777,135)		3,655,574

Operating expenses:
Lease operating	$	93,758		—		189,702		(194,403)		89,057
Gathering, compression, processing, and transportation		1,441,129		—		39,147		(384,637)		1,095,639
Impairment of oil and gas properties		159,598		—		—		—		159,598
Impairment of midstream assets		—		—		23,431		—		23,431
Depletion, depreciation, and amortization		704,152		—		120,458		—		824,610
General and administrative		195,153		—		58,812		(2,769)		251,196
Other		101,980		366,281		17,165		(13,476)		471,950
Total		2,695,770		366,281		448,715		(595,285)		2,915,481
Operating income (loss)	$	727,791		(129,630)		323,782		(181,850)		740,093

Equity in earnings of unconsolidated affiliates	$	—		—		20,194		—		20,194
Segment assets	$	13,074,027		36,701		3,057,459		(906,697)		15,261,490
Capital expenditures for segment assets	$	1,859,481		—		540,719		(183,447)		2,216,753


	Exploration						Elimination of
	and						intersegment		Consolidated
	production		Marketing		Midstream		transactions		total
Year ended December 31, 2018:
Sales and revenues:
Third-party	$	3,565,300		552,982		21,344		—		4,139,626
Intersegment		(87,472)		—		1,007,178		(919,706)		—
Total	$	3,477,828		552,982		1,028,522		(919,706)		4,139,626

Operating expenses:
Lease operating	$	142,234		—		262,704		(268,785)		136,153
Gathering, compression, processing, and transportation		1,792,898		—		49,550		(503,090)		1,339,358
Impairment of oil and gas properties		549,437		—		—		—		549,437
Impairment of midstream assets		—		—		9,658		—		9,658
Depletion, depreciation, and amortization		841,645		—		130,820		—		972,465
General and administrative		181,305		—		61,629		(2,590)		240,344
Other		129,947		686,055		(88,715)		93,019		820,306
Total		3,637,466		686,055		425,646		(681,446)		4,067,721
Operating income (loss)	$	(159,638)		(133,073)		602,876		(238,260)		71,905

Equity in earnings of unconsolidated affiliates	$	—		—		40,280		—		40,280
Segment assets	$	12,986,945		34,499		3,542,862		(1,044,842)		15,519,464
Capital expenditures for segment assets	$	1,923,488		—		542,112		(255,014)		2,210,586


					Equity Method		Elimination of
					Investment in		intersegment
					Antero		transactions and
	Exploration				Midstream		unconsolidated		Consolidated
	and production		Marketing		Corporation		affiliates		total
Year ended December 31, 2019:
Sales and revenues:
Third-party	$	4,107,845		292,207		50		—		4,400,102
Intersegment		5,812		—		792,538		(789,762)		8,588
Total	$	4,113,657		292,207		792,588		(789,762)		4,408,690

Operating expenses:
Lease operating	$	146,990		—		162,376		(163,646)		145,720
Gathering, compression, processing, and transportation		2,257,099		—		41,013		(151,465)		2,146,647
Impairment of oil and gas properties		1,300,444		—		—		—		1,300,444
Impairment of midstream assets		—		—		776,832		(762,050)		14,782
Depletion, depreciation, and amortization		893,161		—		95,526		(73,820)		914,867
General and administrative		160,402		—		118,113		(99,819)		178,696
Other		143,762		549,814		12,093		(11,090)		694,579
Total		4,901,858		549,814		1,205,953		(1,261,890)		5,395,735
Operating income (loss)	$	(788,201)		(257,607)		(413,365)		472,128		(987,045)
Equity in earnings (loss) of unconsolidated affiliates	$	—		—		51,315		(194,531)		(143,216)
Investments in unconsolidated affiliates	$	—		—		709,639		345,538		1,055,177
Segment assets	$	14,121,523		20,869		6,282,878		(5,227,701)		15,197,569
Capital expenditures for segment assets	$	1,369,003		—		391,990		(338,838)		1,422,155