Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.19.1
Segment Information
 3 Months Ended
Mar. 31, 2019
Segment Information  
Segment Information

(17) Segment Information

See Note 2(h) to the unaudited condensed 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.  Effective March 13, 2019, the results of Antero Midstream Partners are no longer consolidated in Antero’s 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 unaudited condensed 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 of each segment.  General and administrative expenses were allocated to the gathering and processing and water handling and treatment segments 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 unaudited condensed consolidated financial statements.

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Exploration
and
production

    

Marketing

    

Antero Midstream Corporation

    

Elimination of
intersegment
transactions

    

Consolidated
total

 

Three months ended March 31, 2018:

 

 

 

 

 

 

 

 

 

 

 

 

Sales and revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Third-party

 

$

784,543

 

238,623

 

4,935

 

 —

 

1,028,101

 

Intersegment

 

 

5,875

 

 —

 

224,656

 

(230,531)

 

 —

 

Total

 

$

790,418

 

238,623

 

229,591

 

(230,531)

 

1,028,101

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating

 

$

31,262

 

 —

 

54,872

 

(59,412)

 

26,722

 

Gathering, compression, processing, and transportation

 

 

384,345

 

 —

 

11,368

 

(103,775)

 

291,938

 

Depletion, depreciation, and amortization

 

 

195,588

 

 —

 

32,656

 

 —

 

228,244

 

General and administrative

 

 

46,420

 

 —

 

14,455

 

(845)

 

60,030

 

Other

 

 

77,884

 

195,739

 

4,924

 

(3,874)

 

274,673

 

Total

 

 

735,499

 

195,739

 

118,275

 

(167,906)

 

881,607

 

Operating income

 

$

54,919

 

42,884

 

111,316

 

(62,625)

 

146,494

 

Equity in earnings of unconsolidated affiliates

 

$

 —

 

 —

 

7,862

 

 —

 

7,862

 

Segment assets

 

$

13,200,108

 

41,548

 

3,151,024

 

(969,831)

 

15,422,849

 

Capital expenditures for segment assets

 

$

472,767

 

 —

 

133,955

 

(60,759)

 

545,963

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Exploration
and
production

    

Marketing

    

Equity Method Investment in Antero Midstream Corporation

    

Elimination of

intersegment

transactions and

unconsolidated

affiliates

    

Consolidated
total

Three months ended March 31, 2019:

 

 

 

 

 

 

 

 

 

 

 

Sales and revenues:

 

 

 

 

 

 

 

 

 

 

 

Third-party

 

$

941,635

 

91,186

 

 4

 

 —

 

1,032,825

Intersegment

 

 

1,758

 

 —

 

54,104

 

(51,280)

 

4,582

Total

 

$

943,393

 

91,186

 

54,108

 

(51,280)

 

1,037,407

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Lease operating

 

$

42,969

 

 —

 

11,815

 

(13,052)

 

41,732

Gathering, compression, processing, and transportation

 

 

535,015

 

 —

 

2,935

 

(113,421)

 

424,529

Impairment of unproved properties

 

 

81,244

 

 —

 

 —

 

 —

 

81,244

Impairment of gathering systems and facilities

 

 

 —

 

 —

 

6,982

 

 —

 

6,982

Depletion, depreciation, and amortization

 

 

218,494

 

 —

 

7,650

 

14,057

 

240,201

General and administrative

 

 

49,908

 

 —

 

2,184

 

16,110

 

68,202

Other

 

 

44,137

 

163,084

 

1,291

 

(288)

 

208,224

Total

 

 

971,767

 

163,084

 

32,857

 

(96,594)

 

1,071,114

Operating income (loss)

 

$

(28,374)

 

(71,898)

 

21,251

 

45,314

 

(33,707)

Equity in earnings of unconsolidated affiliates

 

$

1,817

 

 —

 

2,880

 

9,384

 

14,081

Investments in unconsolidated affiliates

 

$

1,989,612

 

 —

 

1,153,943

 

(1,153,943)

 

1,989,612

Segment assets

 

$

17,263,369

 

25,361

 

6,660,325

 

(6,660,325)

 

17,288,730

Capital expenditures for segment assets

 

$

399,278

 

 —

 

16,005

 

56,650

 

471,933