Reportable Segments

6 Months Ended

Jun. 30, 2023

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 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 June 30, 2022
	Gathering and		Water				Consolidated
(in thousands)	Processing		Handling		Unallocated (1)		Total
Revenues:
Revenue–Antero Resources	$	184,071		62,262		—		246,333
Revenue–third-party		—		242		—		242
Amortization of customer relationships		(9,272)		(8,396)		—		(17,668)
Total revenues		174,799		54,108		—		228,907
Operating expenses:
Direct operating		19,343		23,956		—		43,299
General and administrative		10,490		3,849		1,740		16,079
Facility idling		—		1,185		—		1,185
Depreciation		22,854		12,821		—		35,675
Impairment of property and equipment		1,130		2,572		—		3,702
Accretion of asset retirement obligations		—		64		—		64
Loss on settlement of asset retirement obligations		—		539		—		539
Gain on asset sale		(32)		—		—		(32)
Total operating expenses		53,785		44,986		1,740		100,511
Operating income	$	121,014		9,122		(1,740)		128,396
Equity in earnings of unconsolidated affiliates	$	22,824		—		—		22,824
Additions to property and equipment	$	60,931		16,836		—		77,767

(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 June 30, 2023
	Gathering and		Water				Consolidated
(in thousands)	Processing		Handling		Unallocated (1)		Total
Revenues:
Revenue–Antero Resources	$	211,068		64,613		—		275,681
Revenue–third-party		—		274		—		274
Amortization of customer relationships		(9,272)		(8,396)		—		(17,668)
Total revenues		201,796		56,491		—		258,287
Operating expenses:
Direct operating		25,154		27,441		—		52,595
General and administrative		11,370		4,861		1,931		18,162
Facility idling		—		637		—		637
Depreciation		22,196		13,037		—		35,233
Accretion of asset retirement obligations		—		44		—		44
Loss on settlement of asset retirement obligations		—		279		—		279
Loss on asset sale		5,814		—		—		5,814
Total operating expenses		64,534		46,299		1,931		112,764
Operating income	$	137,262		10,192		(1,931)		145,523
Equity in earnings of unconsolidated affiliates	$	25,972		—		—		25,972
Additions to property and equipment, net	$	29,959		11,823		—		41,782

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

	Six Months Ended June 30, 2022
	Gathering and		Water				Consolidated
(in thousands)	Processing		Handling		Unallocated (1)		Total
Revenues:
Revenue–Antero Resources	$	366,514		115,583		—		482,097
Revenue–third-party		—		637		—		637
Amortization of customer relationships		(18,543)		(16,793)		—		(35,336)
Total revenues		347,971		99,427		—		447,398
Operating expenses:
Direct operating		36,525		48,786		—		85,311
General and administrative		20,191		10,590		3,229		34,010
Facility idling		—		2,333		—		2,333
Depreciation		38,661		25,314		—		63,975
Impairment of property and equipment		1,130		2,572		—		3,702
Accretion of asset retirement obligations		—		128		—		128
Loss on settlement of asset retirement obligations		—		539		—		539
Gain on asset sale		(63)		(87)		—		(150)
Total operating expenses		96,444		90,175		3,229		189,848
Operating income	$	251,527		9,252		(3,229)		257,550
Equity in earnings of unconsolidated affiliates	$	46,056		—		—		46,056
Additions to property and equipment	$	131,665		30,369		—		162,034

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

	Six Months Ended June 30, 2023
	Gathering and		Water				Consolidated
(in thousands)	Processing		Handling		Unallocated (1)		Total
Revenues:
Revenue–Antero Resources	$	410,644		141,908		—		552,552
Revenue–third-party		—		546		—		546
Amortization of customer relationships		(18,543)		(16,793)		—		(35,336)
Total revenues		392,101		125,661		—		517,762
Operating expenses:
Direct operating		49,272		61,196		—		110,468
General and administrative		21,550		11,069		2,890		35,509
Facility idling		—		1,211		—		1,211
Depreciation		44,259		26,170		—		70,429
Accretion of asset retirement obligations		—		88		—		88
Loss on settlement of asset retirement obligations		—		620		—		620
Loss (gain) on asset sale		5,572		(3)		—		5,569
Total operating expenses		120,653		100,351		2,890		223,894
Operating income	$	271,448		25,310		(2,890)		293,868
Equity in earnings of unconsolidated affiliates	$	50,428		—		—		50,428
Additions to property and equipment, net	$	59,156		25,583		—		84,739

(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,		June 30,
(in thousands)	2022		2023
Gathering and Processing	$	4,711,069		4,686,552
Water Handling		1,079,297		1,065,123
Unallocated (1)		954		1,208
Total assets	$	5,791,320		5,752,883

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