| Reportable Segments |
(16) Reportable Segments
Management evaluated how the Company is organized and managed and identified the following segments: (i) the exploration, development, and production of natural gas, NGLs, and oil; (ii) marketing and utilization of excess firm transportation capacity and (iii) midstream services through the Company’s equity method investment in Antero Midstream Corporation. All of the Company’s assets are located in the United States and substantially all of its production revenues are attributable to customers located
in the United States; however, some of the Company’s production revenues are attributable to customers who then transport the Company’s production to foreign countries for resale or consumption.
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—Summary of Significant Accounting Policies 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 September 30, 2020 and 2021 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2020 |
|
|
|
|
|
|
|
|
|
Equity Method |
|
Elimination of |
|
|
|
|
|
|
|
|
|
|
|
|
Investment in |
|
Intersegment |
|
|
|
|
|
|
Exploration |
|
|
|
|
Antero |
|
Transactions and |
|
|
|
|
|
|
and |
|
|
|
|
Midstream |
|
Unconsolidated |
|
Consolidated |
|
|
|
Production |
|
Marketing |
|
Corporation |
|
Affiliates |
|
Total |
|
Sales and revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-party |
|
$ |
288,419 |
|
|
91,497 |
|
|
— |
|
|
— |
|
|
379,916 |
|
Intersegment |
|
|
675 |
|
|
— |
|
|
233,415 |
|
|
(233,415) |
|
|
675 |
|
Total revenue |
|
$ |
289,094 |
|
|
91,497 |
|
|
233,415 |
|
|
(233,415) |
|
|
380,591 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating |
|
$ |
21,450 |
|
|
— |
|
|
— |
|
|
— |
|
|
21,450 |
|
Gathering, compression, processing, and transportation |
|
|
656,615 |
|
|
— |
|
|
38,052 |
|
|
(38,052) |
|
|
656,615 |
|
Impairment of oil and gas properties |
|
|
29,392 |
|
|
— |
|
|
— |
|
|
— |
|
|
29,392 |
|
Depletion, depreciation, and amortization |
|
|
238,418 |
|
|
— |
|
|
26,801 |
|
|
(26,801) |
|
|
238,418 |
|
General and administrative |
|
|
31,640 |
|
|
— |
|
|
13,232 |
|
|
(13,232) |
|
|
31,640 |
|
Other |
|
|
28,605 |
|
|
128,580 |
|
|
3,513 |
|
|
(3,513) |
|
|
157,185 |
|
Total operating expenses |
|
|
1,006,120 |
|
|
128,580 |
|
|
81,598 |
|
|
(81,598) |
|
|
1,134,700 |
|
Operating income (loss) |
|
$ |
(717,026) |
|
|
(37,083) |
|
|
151,817 |
|
|
(151,817) |
|
|
(754,109) |
|
Equity in earnings of unconsolidated affiliates |
|
$ |
24,419 |
|
|
— |
|
|
23,173 |
|
|
(23,173) |
|
|
24,419 |
|
Investments in unconsolidated affiliates |
|
$ |
272,926 |
|
|
— |
|
|
— |
|
|
— |
|
|
272,926 |
|
Segment assets |
|
$ |
13,349,739 |
|
|
— |
|
|
5,673,504 |
|
|
(5,673,504) |
|
|
13,349,739 |
|
Capital expenditures for segment assets |
|
$ |
151,269 |
|
|
— |
|
|
41,851 |
|
|
(41,851) |
|
|
151,269 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2021 |
|
|
|
|
|
|
|
Equity Method |
|
Elimination of |
|
|
|
|
|
|
|
|
|
Investment in |
|
Intersegment |
|
|
|
|
|
Exploration |
|
|
|
Antero |
|
Transactions and |
|
|
|
|
|
and |
|
|
|
Midstream |
|
Unconsolidated |
|
Consolidated |
|
|
|
Production |
|
Marketing |
|
Corporation |
|
Affiliates |
|
Total |
|
Sales and revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-party |
|
$ |
301,207 |
|
|
232,685 |
|
|
242,472 |
|
|
(242,472) |
|
|
533,892 |
|
Intersegment |
|
|
530 |
|
|
— |
|
|
(17,668) |
|
|
17,668 |
|
|
530 |
|
Total revenue |
|
$ |
301,737 |
|
|
232,685 |
|
|
224,804 |
|
|
(224,804) |
|
|
534,422 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating |
|
$ |
25,363 |
|
|
— |
|
|
— |
|
|
— |
|
|
25,363 |
|
Gathering, compression, processing, and transportation |
|
|
628,225 |
|
|
— |
|
|
39,499 |
|
|
(39,499) |
|
|
628,225 |
|
Impairment of oil and gas properties |
|
|
26,253 |
|
|
— |
|
|
— |
|
|
— |
|
|
26,253 |
|
Depletion, depreciation, and amortization |
|
|
182,810 |
|
|
— |
|
|
27,487 |
|
|
(27,487) |
|
|
182,810 |
|
General and administrative |
|
|
32,442 |
|
|
— |
|
|
14,810 |
|
|
(14,810) |
|
|
32,442 |
|
Other |
|
|
56,652 |
|
|
266,751 |
|
|
1,187 |
|
|
(1,187) |
|
|
323,403 |
|
Total operating expenses |
|
|
951,745 |
|
|
266,751 |
|
|
82,983 |
|
|
(82,983) |
|
|
1,218,496 |
|
Operating income (loss) |
|
$ |
(650,008) |
|
|
(34,066) |
|
|
141,821 |
|
|
(141,821) |
|
|
(684,074) |
|
Equity in earnings of unconsolidated affiliates |
|
$ |
21,450 |
|
|
— |
|
|
24,088 |
|
|
(24,088) |
|
|
21,450 |
|
Investments in unconsolidated affiliates |
|
$ |
236,597 |
|
|
— |
|
|
703,780 |
|
|
(703,780) |
|
|
236,597 |
|
Segment assets |
|
$ |
13,375,515 |
|
|
96,023 |
|
|
5,533,633 |
|
|
(5,533,633) |
|
|
13,471,538 |
|
Capital expenditures for segment assets |
|
$ |
387,783 |
|
|
— |
|
|
82,583 |
|
|
(82,583) |
|
|
387,783 |
|
The operating results and assets of the Company’s reportable segments were as follows for the nine months ended September 30, 2020 and 2021 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2020 |
|
|
|
|
|
|
|
Equity Method |
|
Elimination of |
|
|
|
|
|
|
|
|
|
Investment in |
|
Intersegment |
|
|
|
|
|
Exploration |
|
|
|
Antero |
|
Transactions and |
|
|
|
|
|
and |
|
|
|
Midstream |
|
Unconsolidated |
|
Consolidated |
|
|
|
Production |
|
Marketing |
|
Corporation |
|
Affiliates |
|
Total |
|
Sales and revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-party |
|
$ |
1,978,572 |
|
|
201,855 |
|
|
— |
|
|
— |
|
|
2,180,427 |
|
Intersegment |
|
|
2,180 |
|
|
— |
|
|
696,859 |
|
|
(696,859) |
|
|
2,180 |
|
Total revenue |
|
$ |
1,980,752 |
|
|
201,855 |
|
|
696,859 |
|
|
(696,859) |
|
|
2,182,607 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating |
|
$ |
71,836 |
|
|
— |
|
|
— |
|
|
— |
|
|
71,836 |
|
Gathering, compression, processing, and transportation |
|
|
1,877,084 |
|
|
— |
|
|
128,847 |
|
|
(128,847) |
|
|
1,877,084 |
|
Impairment of oil and gas properties |
|
|
155,962 |
|
|
— |
|
|
— |
|
|
— |
|
|
155,962 |
|
Impairment of midstream assets |
|
|
— |
|
|
— |
|
|
665,491 |
|
|
(665,491) |
|
|
— |
|
Depletion, depreciation, and amortization |
|
|
652,130 |
|
|
— |
|
|
81,889 |
|
|
(81,889) |
|
|
652,130 |
|
General and administrative |
|
|
101,264 |
|
|
— |
|
|
39,191 |
|
|
(39,191) |
|
|
101,264 |
|
Other |
|
|
88,023 |
|
|
334,906 |
|
|
14,062 |
|
|
(14,062) |
|
|
422,929 |
|
Total operating expenses |
|
|
2,946,299 |
|
|
334,906 |
|
|
929,480 |
|
|
(929,480) |
|
|
3,281,205 |
|
Operating loss |
|
$ |
(965,547) |
|
|
(133,051) |
|
|
(232,621) |
|
|
232,621 |
|
|
(1,098,598) |
|
Equity in earnings (loss) of unconsolidated affiliates |
|
$ |
(83,408) |
|
|
— |
|
|
63,197 |
|
|
(63,197) |
|
|
(83,408) |
|
Investments in unconsolidated affiliates |
|
$ |
272,926 |
|
|
— |
|
|
— |
|
|
— |
|
|
272,926 |
|
Segment assets |
|
$ |
13,349,739 |
|
|
— |
|
|
5,673,504 |
|
|
(5,673,504) |
|
|
13,349,739 |
|
Capital expenditures for segment assets |
|
$ |
726,402 |
|
|
— |
|
|
165,265 |
|
|
(165,265) |
|
|
726,402 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2021 |
|
|
|
|
|
|
|
Equity Method |
|
Elimination of |
|
|
|
|
|
|
|
|
|
Investment in |
|
Intersegment |
|
|
|
|
|
Exploration |
|
|
|
Antero |
|
Transactions and |
|
|
|
|
|
and |
|
|
|
Midstream |
|
Unconsolidated |
|
Consolidated |
|
|
|
Production |
|
Marketing |
|
Corporation |
|
Affiliates |
|
Total |
|
Sales and revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-party |
|
$ |
1,664,509 |
|
|
562,928 |
|
|
— |
|
|
— |
|
|
2,227,437 |
|
Intersegment |
|
|
551 |
|
|
— |
|
|
681,712 |
|
|
(681,712) |
|
|
551 |
|
Total revenue |
|
$ |
1,665,060 |
|
|
562,928 |
|
|
681,712 |
|
|
(681,712) |
|
|
2,227,988 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating |
|
$ |
71,555 |
|
|
— |
|
|
— |
|
|
— |
|
|
71,555 |
|
Gathering, compression, processing, and transportation |
|
|
1,874,664 |
|
|
— |
|
|
118,368 |
|
|
(118,368) |
|
|
1,874,664 |
|
Impairment of oil and gas properties |
|
|
69,618 |
|
|
— |
|
|
— |
|
|
— |
|
|
69,618 |
|
Depletion, depreciation, and amortization |
|
|
564,166 |
|
|
— |
|
|
80,956 |
|
|
(80,956) |
|
|
564,166 |
|
General and administrative |
|
|
108,693 |
|
|
— |
|
|
46,991 |
|
|
(46,991) |
|
|
108,693 |
|
Other |
|
|
143,954 |
|
|
627,822 |
|
|
8,590 |
|
|
(8,590) |
|
|
771,776 |
|
Total operating expenses |
|
|
2,832,650 |
|
|
627,822 |
|
|
254,905 |
|
|
(254,905) |
|
|
3,460,472 |
|
Operating income (loss) |
|
$ |
(1,167,590) |
|
|
(64,894) |
|
|
426,807 |
|
|
(426,807) |
|
|
(1,232,484) |
|
Equity in earnings of unconsolidated affiliates |
|
$ |
57,621 |
|
|
— |
|
|
66,347 |
|
|
(66,347) |
|
|
57,621 |
|
Investments in unconsolidated affiliates |
|
$ |
236,597 |
|
|
— |
|
|
703,780 |
|
|
(703,780) |
|
|
236,597 |
|
Segment assets |
|
$ |
13,375,515 |
|
|
96,023 |
|
|
5,533,633 |
|
|
(5,533,633) |
|
|
13,471,538 |
|
Capital expenditures for segment assets |
|
$ |
510,941 |
|
|
— |
|
|
156,948 |
|
|
(156,948) |
|
|
510,941 |
|
|