Antero Resources Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Equity Method Investments

Equity Method Investments

3 Months Ended

Mar. 31, 2019

(5)Equity Method Investments

At March 13, 2019 and at March 31, 2019, Antero owned approximately 31.3% of Antero Midstream Corporation’s common stock, which is reflected in Antero’s consolidated financial statements using the equity method of accounting. See Note 3 to the unaudited condensed consolidated financial statements for further discussion on the Transactions.

Prior to March 13, 2019, our consolidated results included two equity method investments held by Antero Midstream Partners: a 15% equity interest in Stonewall Gas Gathering LLC (“Stonewall”), which operates a regional gathering pipeline on which Antero is an anchor shipper, and a 50% interest in the joint venture entered into on February 6, 2017 between Antero Midstream Partners and MarkWest Energy Partners, L.P. (“MarkWest”), a wholly owned subsidiary of MPLX, LP, to develop processing and fractionation assets in Appalachia (the “Joint Venture”). Effective March 13, 2019, the equity in earnings of these investments are accounted for in the equity in earnings of Antero Midstream Corporation.

The following table is a reconciliation of investments in unconsolidated affiliates for the three months ended March 31, 2019 (in thousands):


	Stonewall (1)		MarkWest Joint Venture		Antero Midstream Corporation (2)		Total
Balance at December 31, 2018	$	68,103		365,539		—		433,642
Investments (3)		—		25,020		—		25,020
Equity in net income of unconsolidated affiliates		1,894		10,370		1,817		14,081
Distributions from unconsolidated affiliates		(3,000)		(9,605)		—		(12,605)
Effects of deconsolidation (4)		(66,997)		(391,324)		1,987,795		1,529,474
Balance at March 31, 2019	$	—		—		1,989,612		1,989,612

⁽¹⁾

Distributions are net of operating and capital requirements retained by Stonewall.

⁽²⁾

As adjusted for the amortization of the difference between the cost of the equity investment in Antero Midstream Partners and the amount of underlying equity in the net assets of Antero Midstream Partners as of the date of deconsolidation.

⁽³⁾

Investments in the Joint Venture during the three months ended March 31, 2019 relate to capital contributions for construction of additional processing facilities.

⁽⁴⁾

Effective March 13, 2019, the equity in earnings of Stonewall and the Joint Venture are accounted for in the equity in earnings of Antero Midstream Corporation.

Summarized Financial Information of Antero Midstream Corporation

The following tables present summarized financial information of Antero Midstream Corporation. Summarized financial information is presented from March 13, 2019.

Balance Sheet


(in thousands)	March 31, 2019
Current assets	$	116,719
Noncurrent assets		6,551,708
Total assets	$	6,668,427

Current liabilities	$	118,062
Noncurrent liabilities		2,514,815
Stockholders' equity		4,035,550
Total liabilities and equity	$	6,668,427

Statement of Operations


	For the period
		March 13, 2019 through
(in thousands)	March 31, 2019
Revenues	$	54,108
Operating expenses		30,029
Income from operations		24,079
Net income attributable to the equity method investments		23,197