Antero Midstream (AM) 10-Q 2 Aug 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Jul. 27, 2017
Document and Entity Information
Entity Registrant Name	Antero Midstream GP LP
Entity Central Index Key	1,623,925
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	No
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		186,174,063
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q2

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Current assets:
Cash	$ 11,391	$ 9,609
Accounts receivable - related party	358	217
Total current assets	11,749	9,826
Investment in Antero Midstream Partners LP	15,328	7,543
Total assets	27,077	17,369
Current liabilities:
Accounts payable	347
Accrued liabilities	1,483	426
Taxes payable	3,584	6,674
Total current liabilities	5,414	7,100
Non-current liabilities:
Liability for equity-based compensation	2,723
Total liabilities	8,137	7,100
Partners' capital	18,940	10,269
Total liabilities and partners' capital	$ 27,077	$ 17,369

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands	2 Months Ended	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
Equity in earnings of Antero Midstream Partners LP		$ 15,328	$ 2,731	$ 26,881	$ 4,581
Total income		15,328	2,731	26,881	4,581
General and administrative expense		3,203	145	5,307	185
Equity-based compensation		9,631		17,954
Total expenses		12,834	145	23,261	185
Income before income taxes		2,494	2,586	3,620	4,396
Provision for income taxes		(5,755)	(1,036)	(10,180)	(1,738)
Net income (loss) and comprehensive income (loss)		$ (3,261)	$ 1,550	$ (6,560)	$ 2,658
Net loss attributable to Antero Midstream GP LP subsequent to IPO	$ (1,621)
Net loss per common share	$ (0.01)
Weighted average number of common shares outstanding (basic and diluted):	186,170

Condensed Consolidated Stateme4

Condensed Consolidated Statements of Partners' Capital - 6 months ended Jun. 30, 2017 - USD ($) $ in Thousands	Limited Partner (Common units)	Antero Resources Midstream Management LLC Members' Equity	Total
Balance at Dec. 31, 2016		$ 10,269	$ 10,269
Partners' Capital
Pre-IPO net loss and comprehensive loss		(4,939)	(4,939)
Pre-IPO equity-based compensation		10,237	10,237
Conversion to a limited partnership	$ 15,567	$ (15,567)
Post-IPO net loss and comprehensive loss	(1,621)		(1,621)
Post-IPO equity-based compensation	4,994		4,994
Balance at Jun. 30, 2017	$ 18,940		$ 18,940

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash flows provided by operating activities:
Net income (loss)	$ (6,560)	$ 2,658
Adjustment to reconcile net income (loss) to net cash provided by operating activities:
Equity in earnings of Antero Midstream Partners LP	(26,881)	(4,581)
Distributions received from Antero Midstream Partners LP	19,096	2,819
Equity-based compensation	17,954
Deferred income taxes		(368)
Changes in assets and liabilities:
Accounts receivable - related party	(141)	(201)
Accounts payable	347
Accrued liabilities	1,057	145
Income taxes payable	(3,090)	1,941
Net cash provided by operating activities	1,782	2,413
Net increase in cash	1,782	2,413
Cash, beginning of period	9,609	72
Cash, end of period	$ 11,391	$ 2,485

Business and Organization

Business and Organization	6 Months Ended
	Jun. 30, 2017
Business and Organization
Business and Organization	(1) Business and Organization Antero Midstream GP LP (“AMGP”) was originally formed as Antero Resources Midstream Management LLC (“ARMM”) in 2013, to become the general partner of Antero Midstream Partners LP (“Antero Midstream”), a master limited partnership that is publicly traded on the New York Stock Exchange (NYSE: AM). On May 4, 2017, ARMM converted from a Delaware limited liability company to a Delaware limited partnership and changed its name to Antero Midstream GP LP in connection with our initial public offering (“IPO”). Unless the context otherwise requires, references to “we” and “our” refer to: (i) for the period prior to May 4, 2017, ARMM, and (ii) beginning on May 4, 2017, Antero Midstream GP LP. We own 100% of the membership interests of Antero Midstream Partners GP LLC (“AMP GP”), which owns the non-economic general partner interest in Antero Midstream, and we own all of the Series A capital interests (“Series A Units”) in Antero IDR Holdings LLC (“IDR LLC”), which entity owns the incentive distribution rights (“IDRs”) in Antero Midstream. IDR LLC also has Series B profits interests (“Series B Units”) outstanding that entitle the holders to receive up to 6% of the distributions that Antero Midstream makes on the IDRs in excess of $7.5 million per quarter, subject to certain vesting conditions (see Note 3—Long-Term Incentive Plans). Our only income results from distributions made on the IDRs of Antero Midstream. IDRs entitle holders to receive cash distributions from Antero Midstream when distributions exceed certain target amounts (see Note 4 – Distributions from Antero Midstream). We are taxed as a corporation for U.S. federal income tax purposes and we refer to our outstanding limited partner interests as common shares. We are managed by our general partner, AMGP GP LLC (“AMGP GP”), who will establish the quarterly cash distribution for our shares payable to shareholders. AMGP GP has a board of directors appointed by certain members of Antero Resources Investment LLC (“Antero Investment”) the former member of ARMM. Following the completion of our IPO, certain of our directors and executive officers own AMGP common shares as well as Series B Units in IDR LLC. In addition, certain of our directors and executive officers own a portion of Antero Resources Corporation’s (“Antero Resources”) (NYSE: AR) common stock and Antero Midstream’s common units. We have an agreement with Antero Resources to provide general and administrative services to us for a fee of $ 0.5 million per year, subject to annual inflation adjustments. We also incur recurring direct expenses for the costs associated with being a publicly traded entity. IDR distributions earned by us through May 9, 2017 have been or will be distributed to Antero Investment for all periods prior to the IPO, net of any related liabilities including income taxes through that date and expenses of the IPO. Antero Midstream was formed by Antero Resources to own, operate and develop midstream energy assets to service Antero Resources’ oil and gas producing assets. Both Antero Midstream and Antero Resources’ assets are located in the Marcellus Shale and Utica Shale located in West Virginia and Ohio. Antero Midstream’s assets consist of gathering pipelines, compressor stations, and water handling and treatment systems, which provide midstream services to Antero Resources under long term, fixed fee contracts. The Partnership also has a 15% equity interest in the gathering system of Stonewall Gas Gathering LLC (“Stonewall”) and a 50% equity interest in a joint venture to develop processing and fractionation assets with MarkWest Energy Partners, L.P. (“MarkWest”). Our results of operations, financial position and cash flows are dependent on the results of operations, financial position and cash flows of Antero Midstream. As a result, these unaudited condensed consolidated financial statements should be read in conjunction with Antero Midstream’s audited combined consolidated financial statements and notes thereto presented in its Annual Report on Form 10-K for the year ended December 31, 2016, as well as Antero Midstream’s unaudited condensed consolidated financial statements presented in its Quarterly Report on Form 10-Q for the quarter ended June 30, 2017.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2017
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	(2) Summary of Significant Accounting Policies (a) Basis of Presentation These condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial information. The accompanying unaudited condensed financial statements of AMGP have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and, accordingly, do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, these statements include all adjustments (consisting of normal and recurring accruals) considered necessary for a fair presentation of our financial position as of December 31, 2016 and June 30, 2017, and our results of operations and cash flows for the three and six months ended June 30, 2016 and 2017. We have no items of other comprehensive income (loss); therefore, our net income (loss) is identical to our comprehensive income (loss). Operating results for the period ended June 30, 2017 are not necessarily indicative of the results that may be expected for the full year. As of the date these condensed consolidated financial statements were filed with the SEC, AMGP completed its evaluation of potential subsequent events for disclosure and no items requiring disclosure were identified other than as disclosed in Note 7 – Subsequent Events. (b) Principles of Consolidation The condensed consolidated financial statements include the accounts of Antero Midstream GP LP and its wholly-owned subsidiaries AMP GP and IDR LLC. (c) Investment in Antero Midstream We have determined that Antero Midstream is a variable interest entity (“VIE”) for which we are not the primary beneficiary and therefore do not consolidate. We have concluded that Antero Resources is the primary beneficiary of Antero Midstream and should consolidate its financial statements. Antero Resources is the primary beneficiary based on its power to direct the activities that most significantly impact Antero Midstream’s economic performance and its obligations to absorb losses or receive benefits of Antero Midstream that could be significant to it. Antero Resources owns approximately 58.4% of the outstanding limited partner interests in Antero Midstream and its officers and management group also act as management of Antero Midstream. Antero Midstream was formed to own, operate and develop midstream energy assets to service Antero Resources’ production under long term contracts as described herein. We do not own any limited partnership interests in Antero Midstream and have no capital interests in Antero Midstream. We have not provided and do not anticipate providing financial support to Antero Midstream. Antero Resources and Antero Midstream have contracts with 20 year initial terms and automatic renewal provisions, whereby Antero Resources has dedicated the gathering and compression rights, water delivery and handling services, and gas processing rights to Antero Midstream on a fee basis on all of its current and future acreage, excluding any pre-existing dedications or third-party commitments. The contracts call for Antero Resources to present, in advance, drilling and completion plans in order for Antero Midstream to put in place gathering and compression, water handling, and gas processing assets to service Antero Resources’ assets. The drilling and completion capital investment decisions made by Antero Resources controls the development and operation of all of Antero Midstream’s assets. Antero Resources therefore controls the activities that most significantly impact Antero Midstream’s economic performance. Because of these contractual obligations and the capital requirements related to these obligations, Antero Midstream has devoted and, for the foreseeable future, will devote substantially all of its resources to servicing Antero Resources’ operations and revenues from Antero Resources will provide substantially all of Antero Midstream’s financial support and therefore its ability to finance its operations. Because of the long term contractual commitment to support Antero Resources’ substantial growth plans, Antero Midstream will be practically and physically constrained from providing any substantive amount of services to third parties. Our ownership of the non-economic general partner interest in Antero Midstream provides us with significant influence over Antero Midstream, but not control over the decisions that most significantly impact the economic performance of Antero Midstream. Our ownership of IDRs of Antero Midstream entitles us to receive cash distributions from Antero Midstream when distributions exceed certain target amounts. The ownership of these interests and IDRs do not require us to provide financial support to Antero Midstream. We obtained these interests upon our formation for no consideration. Therefore, they have no cost basis and are classified as long term investments. Our share of Antero Midstream’s earnings as a result of our ownership of IDRs is accounted for using the equity method of accounting. We recognize distributions earned from Antero Midstream as “Equity in earnings of Antero Midstream Partners LP” on our statement of operations in the period in which they are earned and are allocated to our capital account. Our long term interest in IDRs on the balance sheet is recorded in “Investment in Antero Midstream Partners LP.” The ownership of the general partner interests and IDRs do not provide us with any claim to the assets of Antero Midstream other than the balance in our Antero Midstream capital account. IDRs are recognized as earned and increase our capital account and equity investment. When these distributions are paid to us they reduce our capital accounts and our equity investment in Antero Midstream. See Note 4—Distributions from Antero Midstream. (d) Use of Estimates The preparation of the condensed consolidated financial statements and notes in conformity with GAAP requires that management formulate estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. (e) Income Taxes We regularly review our tax positions in each significant taxing jurisdiction in the process of evaluating our tax provision. We make adjustments to our tax provision when: (i) facts and circumstances regarding a tax position change, causing a change in management’s judgment regarding that tax position; and/or (ii) a tax position is effectively settled with a tax authority at a differing amount. Equity-based compensation expense of $18.0 million and IPO costs of $5.0 million are not and will not be deductible for federal income tax purposes and, along with the effect of state taxes, account for the difference between the federal tax rate of 35% and the rate at which the income tax expense was provided for the six months ended June 30, 2017. (f) General and Administrative Expenses General and administrative costs incurred during 2016 and 2017 primarily relate to legal and other costs incurred in connection with our IPO. Post-IPO general and administrative expense consist primarily of management fees paid to Antero Resources, and other legal and administrative expenses. (g) Fair Value Measures The Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures , clarifies the definition of fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. This guidance also relates to all nonfinancial assets and liabilities that are not recognized or disclosed on a recurring basis (e.g., the initial recognition of asset retirement obligations and impairments of long ‑lived assets). The fair value is the price that we estimate would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy is used to prioritize inputs to valuation techniques used to estimate fair value. An asset or liability subject to the fair value requirements is categorized within the hierarchy based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The highest priority (Level 1) is given to unadjusted quoted market prices in active markets for identical assets or liabilities, and the lowest priority (Level 3) is given to unobservable inputs. Level 2 inputs are data, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indire ctly.

Long-Term Incentive Plans

Long-Term Incentive Plans	6 Months Ended
	Jun. 30, 2017
Long-Term Incentive Plans
Long-Term Incentive Plans	(3) Long-Term Incentive Plans IDR LLC has 99,500 Series B Units authorized and outstanding that entitle the holders to receive up to 6% of the amount of the distributions that Antero Midstream makes on its IDRs in excess of $7.5 million per quarter, subject to certain vesting conditions. Series B Units issued to common law employees of AMGP, including officers of AMGP and Antero Resources employees who provide services directly to AMGP, are classified as equity awards. Series B Units issued to Antero Resources employees who are not common law employees of AMGP are classified as liability awards. IDR LLC granted 92,000 Series B Units that are equity classified awards and 8,000 Series B Units that are liability classified awards. During the second quarter of 2017, 500 Series B Units that were equity classified awards were forfeited. The Series B Units vest ratably over a three year period. The holders of vested Series B Units have the right to convert the units to common shares with a value equal to their pro rata share of up to 6% of any increase in our equity value in excess of $2.0 billion. In no event will the aggregate number of newly issued common shares exceed 6% of the total number of our issued and outstanding common shares. For equity classified awards, we recognize expense for the grant date fair value of the awards over the vesting period of the awards. Forfeitures are accounted for as they occur by reversing expense previously recognized for awards that were forfeited during the period. The grant date fair value of the Series B Unit awards was estimated using a Monte Carlo simulation using various assumptions including a floor equity value of $2.0 billion, expected volatility of 43% based on historical volatility of a peer group of publicly traded partnerships, a risk free rate of 2.45%, and expected IDR distributions based on internal estimates discounted based on a weighted average cost of capital assumption of 7.25%. Based on these assumptions, the estimated value of each Series B Unit was $999 when they were issued. For liability classified awards, we recognize expense for the fair value of the awards over the vesting period of the awards. Forfeitures are accounted for as they occur by reversing expense previously recognized for awards that were forfeited during the period. We update our assumptions each reporting period based on new developments and adjust such amounts to fair value based on revised assumptions, if applicable, over the vesting period. At June 30, 2017, the fair value of the Series B Unit awards was estimated using a Monte Carlo simulation using various assumptions including an equity value of $4.1 billion, expected volatility of 42% based on historical volatility of a peer group of publicly traded partnerships, a risk free rate of 2.28%, and expected IDR distributions based on internal estimates discounted based on a weighted average cost of capital assumption of 7.25%. Based on these assumptions, the estimated value of each Series B Unit at June 30, 2017 is $2,042. The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement within the fair value hierarchy. We recognized expense, of $9.6 million, of which $7.5 million is classified as equity awards and $2.1 million is classified as liability awards, during the three months ended June 30, 2017. We recognized expense of $18.0 million, of which $15.3 million is classified as equity awards and $2.7 million is classified as liability awards, during the six months ended June 30, 2017. As of June 30, 2017, there was $ 89.8 million of unamortized compensation expense related to nonvested Series B Units that is expected to be recognized over the next 2.5 years. On April 17, 2017, we also adopted the Antero Midstream GP LP Long-Term Incentive Plan (“2017 LTIP”), pursuant to which certain non-employee directors of our general partner and certain officers, employees and consultants of Antero Resources are eligible to receive awards representing equity interests in AMGP. An aggregate of 930,851 common shares may be delivered pursuant to awards under the 2017 LTIP, subject to customary adjustments. As of June 30, 2017, no awards had been made under the 2017 LTIP.

Distributions from Antero Midst

Distributions from Antero Midstream	6 Months Ended
	Jun. 30, 2017
Distributions from Antero Midstream
Distributions from Antero Midstream	(4) Distributions from Antero Midstream Antero Midstream’s partnership agreement provides for a target minimum quarterly distribution of $0.17 per unit for each quarter, or $0.68 per unit on an annualized basis. The partnership agreement generally provides that it distribute cash each quarter to the holders of the common units pro rata until each unit has received a distribution of $0.1955. If cash distributions to Antero Midstream’s unitholders exceed $0.1955 per common unit in any quarter, IDR LLC, as the holder of Antero Midstream’s IDRs, will receive distributions according to the following percentage allocations: Marginal Percentage Interest in Distributions Total Quarterly Distribution Antero Midstream Common Unitholders Holder of IDRs above $0.1955 up to $0.2125 85 % 15 % above $0.2125 up to $0.2550 75 % 25 % above $0.2550 50 % 50 % From the initial public offering of Antero Midstream in the fourth quarter of 2014 through June 30, 2017, distributions per common unit and distributions related to the IDRs were as follows: Quarter Distribution Date Antero Midstream Distribution Amount Income Attributable to IDRs Q4 2014 February 27, 2015 $ $ — Q1 2015 May 27, 2015 $ $ — Q2 2015 August 27, 2015 $ $ — Q3 2015 November 30, 2015 $ $ 295 Q4 2015 February 29, 2016 $ $ 969 Q1 2016 May 25, 2016 $ $ 1,850 Q2 2016 August 24, 2016 $ $ 2,731 Q3 2016 November 24, 2016 $ $ 4,820 Q4 2016 February 8, 2017 $ $ 7,543 Q1 2017 May 10, 2017 $ $ 11,553 Q2 2017 August 16, 2017 $ $ 15,328 IDR distributions paid by Antero Midstream relating to periods prior to May 9, 2017, the closing of our IPO, have been or will be distributed to Antero Investment.

Related Party Transactions

Related Party Transactions	6 Months Ended
	Jun. 30, 2017
Related Party Transactions
Related Party Transactions	(5) Related Party Transactions Certain of AMGP’s shareholders, including members of its executive management group, own a significant interest in AMGP and, either through their representatives or directly, serve as members of the Board of Directors for Antero Resources and the Boards of Directors for the general partners of Antero Midstream and AMGP. These same groups or individuals own common shares in Antero Resources and limited partner interests Antero Midstream. AMGP’s executive management group also manages the operations and business affairs of Antero Resources and Antero Midstream. (a) Accounts receivable – related party Accounts receivable at December 31, 2016 and June 30, 2017 includes general and administrative expenses of $0.2 million and $0.4 million respectively, paid by AMGP on behalf of Antero Investment. (b) Accounts payable Accounts payable at December 31, 2016 and June 30, 2017 includes $0.3 million payable to Antero Resources for general and administrative expenses.

Summarized Financial Informatio

Summarized Financial Information for Antero Midstream	6 Months Ended
	Jun. 30, 2017
Summarized Financial Information for Antero Midstream
Summarized Financial Information for Antero Midstream	(6) Summarized Financial Information for Antero Midstream Summarized financial information for Antero Midstream, our investee accounted for using the equity method of accounting, is included in this note. The following tables present summarized income statement and balance sheet information for Antero Midstream (in thousands). Summarized Antero Midstream Income Statement Information Three Months Ended June 30, Six Months Ended June 30, 2016 2017 2016 2017 (in thousands) Revenues $ 136,810 193,766 272,882 368,536 Operating expenses 83,503 101,199 172,955 194,272 Operating income $ 53,307 92,567 99,927 174,264 Net income 49,912 87,175 92,829 162,267 Net income attributable to incentive distribution rights (2,731) (15,328) (4,581) (26,881) Limited partners' interest in net income $ 47,181 71,847 88,248 135,386 Summarized Antero Midstream Balance Sheet Information December 31, 2016 June 30, 2017 (in thousands) Current assets $ 79,950 98,126 Non-current assets $ 2,269,945 2,663,811 Current liabilities $ 82,013 95,366 Non-current liabilities $ 1,045,072 1,147,618 Partners' capital $ 1,222,810 1,518,953

Subsequent Events

Subsequent Events	6 Months Ended
	Jun. 30, 2017
Subsequent Events
Subsequent Events	(7) The board of directors of our general partner has declared a cash distribution of $0.027 per share for the quarter ended June 30, 2017. The distribution reflects pro-rated distribution for the quarter from the closing of our IPO on May 9, 2017 through June 30, 2017. The distribution will be payable on August 23, 2017 to shareholders of record as of August 3, 2017.

Summary of Significant Accoun13

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2017
Summary of Significant Accounting Policies
Basis of Presentation	(a) Basis of Presentation These condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial information. The accompanying unaudited condensed financial statements of AMGP have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and, accordingly, do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, these statements include all adjustments (consisting of normal and recurring accruals) considered necessary for a fair presentation of our financial position as of December 31, 2016 and June 30, 2017, and our results of operations and cash flows for the three and six months ended June 30, 2016 and 2017. We have no items of other comprehensive income (loss); therefore, our net income (loss) is identical to our comprehensive income (loss). Operating results for the period ended June 30, 2017 are not necessarily indicative of the results that may be expected for the full year. As of the date these condensed consolidated financial statements were filed with the SEC, AMGP completed its evaluation of potential subsequent events for disclosure and no items requiring disclosure were identified other than as disclosed in Note 7 – Subsequent Events.
Principles of Consolidation	(b) Principles of Consolidation The condensed consolidated financial statements include the accounts of Antero Midstream GP LP and its wholly-owned subsidiaries AMP GP and IDR LLC.
Investment in Antero Midstream	(c) Investment in Antero Midstream We have determined that Antero Midstream is a variable interest entity (“VIE”) for which we are not the primary beneficiary and therefore do not consolidate. We have concluded that Antero Resources is the primary beneficiary of Antero Midstream and should consolidate its financial statements. Antero Resources is the primary beneficiary based on its power to direct the activities that most significantly impact Antero Midstream’s economic performance and its obligations to absorb losses or receive benefits of Antero Midstream that could be significant to it. Antero Resources owns approximately 58.4% of the outstanding limited partner interests in Antero Midstream and its officers and management group also act as management of Antero Midstream. Antero Midstream was formed to own, operate and develop midstream energy assets to service Antero Resources’ production under long term contracts as described herein. We do not own any limited partnership interests in Antero Midstream and have no capital interests in Antero Midstream. We have not provided and do not anticipate providing financial support to Antero Midstream. Antero Resources and Antero Midstream have contracts with 20 year initial terms and automatic renewal provisions, whereby Antero Resources has dedicated the gathering and compression rights, water delivery and handling services, and gas processing rights to Antero Midstream on a fee basis on all of its current and future acreage, excluding any pre-existing dedications or third-party commitments. The contracts call for Antero Resources to present, in advance, drilling and completion plans in order for Antero Midstream to put in place gathering and compression, water handling, and gas processing assets to service Antero Resources’ assets. The drilling and completion capital investment decisions made by Antero Resources controls the development and operation of all of Antero Midstream’s assets. Antero Resources therefore controls the activities that most significantly impact Antero Midstream’s economic performance. Because of these contractual obligations and the capital requirements related to these obligations, Antero Midstream has devoted and, for the foreseeable future, will devote substantially all of its resources to servicing Antero Resources’ operations and revenues from Antero Resources will provide substantially all of Antero Midstream’s financial support and therefore its ability to finance its operations. Because of the long term contractual commitment to support Antero Resources’ substantial growth plans, Antero Midstream will be practically and physically constrained from providing any substantive amount of services to third parties. Our ownership of the non-economic general partner interest in Antero Midstream provides us with significant influence over Antero Midstream, but not control over the decisions that most significantly impact the economic performance of Antero Midstream. Our ownership of IDRs of Antero Midstream entitles us to receive cash distributions from Antero Midstream when distributions exceed certain target amounts. The ownership of these interests and IDRs do not require us to provide financial support to Antero Midstream. We obtained these interests upon our formation for no consideration. Therefore, they have no cost basis and are classified as long term investments. Our share of Antero Midstream’s earnings as a result of our ownership of IDRs is accounted for using the equity method of accounting. We recognize distributions earned from Antero Midstream as “Equity in earnings of Antero Midstream Partners LP” on our statement of operations in the period in which they are earned and are allocated to our capital account. Our long term interest in IDRs on the balance sheet is recorded in “Investment in Antero Midstream Partners LP.” The ownership of the general partner interests and IDRs do not provide us with any claim to the assets of Antero Midstream other than the balance in our Antero Midstream capital account. IDRs are recognized as earned and increase our capital account and equity investment. When these distributions are paid to us they reduce our capital accounts and our equity investment in Antero Midstream. See Note 4—Distributions from Antero Midstream.
Use of Estimates	(d) Use of Estimates The preparation of the condensed consolidated financial statements and notes in conformity with GAAP requires that management formulate estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
Income Taxes	(e) Income Taxes We regularly review our tax positions in each significant taxing jurisdiction in the process of evaluating our tax provision. We make adjustments to our tax provision when: (i) facts and circumstances regarding a tax position change, causing a change in management’s judgment regarding that tax position; and/or (ii) a tax position is effectively settled with a tax authority at a differing amount.
General and Administrative Expenses	(f) General and Administrative Expenses General and administrative costs incurred during 2016 and 2017 primarily relate to legal and other costs incurred in connection with our IPO. Post-IPO general and administrative expense consist primarily of management fees paid to Antero Resources, and other legal and administrative expenses.
Fair Value Measures	(g) Fair Value Measures The Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures , clarifies the definition of fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. This guidance also relates to all nonfinancial assets and liabilities that are not recognized or disclosed on a recurring basis (e.g., the initial recognition of asset retirement obligations and impairments of long ‑lived assets). The fair value is the price that we estimate would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy is used to prioritize inputs to valuation techniques used to estimate fair value. An asset or liability subject to the fair value requirements is categorized within the hierarchy based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The highest priority (Level 1) is given to unadjusted quoted market prices in active markets for identical assets or liabilities, and the lowest priority (Level 3) is given to unobservable inputs. Level 2 inputs are data, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indire ctly.

Distributions from Antero Mid14

Distributions from Antero Midstream (Tables)	6 Months Ended
	Jun. 30, 2017
Distributions from Antero Midstream
Summary of percentage allocations for distributions	Marginal Percentage Interest in Distributions Total Quarterly Distribution Antero Midstream Common Unitholders Holder of IDRs above $0.1955 up to $0.2125 85 % 15 % above $0.2125 up to $0.2550 75 % 25 % above $0.2550 50 % 50 %
Summary of quarterly cash distribution to partners	Quarter Distribution Date Antero Midstream Distribution Amount Income Attributable to IDRs Q4 2014 February 27, 2015 $ $ — Q1 2015 May 27, 2015 $ $ — Q2 2015 August 27, 2015 $ $ — Q3 2015 November 30, 2015 $ $ 295 Q4 2015 February 29, 2016 $ $ 969 Q1 2016 May 25, 2016 $ $ 1,850 Q2 2016 August 24, 2016 $ $ 2,731 Q3 2016 November 24, 2016 $ $ 4,820 Q4 2016 February 8, 2017 $ $ 7,543 Q1 2017 May 10, 2017 $ $ 11,553 Q2 2017 August 16, 2017 $ $ 15,328

Summarized Financial Informat15

Summarized Financial Information for Antero Midstream (Tables)	6 Months Ended
	Jun. 30, 2017
Summarized Financial Information for Antero Midstream
Schedule of summarized income statement and balance sheet information for Antero Midstream	The following tables present summarized income statement and balance sheet information for Antero Midstream (in thousands). Summarized Antero Midstream Income Statement Information Three Months Ended June 30, Six Months Ended June 30, 2016 2017 2016 2017 (in thousands) Revenues $ 136,810 193,766 272,882 368,536 Operating expenses 83,503 101,199 172,955 194,272 Operating income $ 53,307 92,567 99,927 174,264 Net income 49,912 87,175 92,829 162,267 Net income attributable to incentive distribution rights (2,731) (15,328) (4,581) (26,881) Limited partners' interest in net income $ 47,181 71,847 88,248 135,386 Summarized Antero Midstream Balance Sheet Information December 31, 2016 June 30, 2017 (in thousands) Current assets $ 79,950 98,126 Non-current assets $ 2,269,945 2,663,811 Current liabilities $ 82,013 95,366 Non-current liabilities $ 1,045,072 1,147,618 Partners' capital $ 1,222,810 1,518,953

Business and Organization (Deta

Business and Organization (Details) $ in Millions	6 Months Ended
	Jun. 30, 2017USD ($)
Antero Midstream Partners GP LLC
Business and Organization
Capital interest (as a percent)	100.00%
IDR LLC
Business and Organization
Percentage of amount of quarterly distribution in excess of threshold limit	6.00%
Threshold limit for quarterly distribution	$ 7.5
Antero Resources
Business and Organization
General and administrative fee	$ 0.5
Stonewall Gas Gathering LLC
Business and Organization
Equity Method Investment, Ownership Percentage	15.00%
MarkWest Energy Partners, L.P.
Business and Organization
Capital interest (as a percent)	50.00%

Summary of Significant Accoun17

Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2017	Dec. 31, 2016
Significant Accounting Policies
Partners' capital	$ 18,940	$ 18,940	$ 10,269
Income taxes
Equity-based compensation	9,631	17,954
IPO costs		$ 5,000
Statutory U.S. Federal tax rate (as a percent)		35.00%
Antero Midstream
Significant Accounting Policies
Partners' capital	0	$ 0
Consideration paid		0
Cost basis of interests	$ 0	$ 0
Antero Resources | Antero Midstream
Significant Accounting Policies
Ownership percentage	58.40%	58.40%
Contract term		20 years

Long-Term Incentive Plan (Detai

Long-Term Incentive Plan (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2017	Apr. 17, 2017
2017 LTIP
Aggregate disclosure
Number of common shares may be delivered pursuant to awards, subject to customary adjustments			930,851
Awards granted	0
IDR LLC
Long-Term Incentive Plan
Percentage of amount of quarterly distribution in excess of threshold limit		6.00%
Threshold limit for quarterly distribution		$ 7.5
IDR LLC | Series B unit awards
Long-Term Incentive Plan
Authorized units	99,500	99,500
Outstanding units	99,500	99,500
Threshold limit for quarterly distribution		$ 7.5
Threshold limit for conversion of units to common shares	$ 2,000	$ 2,000
Assumptions:
Vesting period		3 years
Aggregate disclosure
Expense recognized	9.6	$ 18
Unamortized compensation expense related to nonvested Series B units	89.8	$ 89.8
Weighted average period for recognizing unrecognized stock-based compensation expense		2 years 6 months
IDR LLC | Series B unit awards | Maximum
Long-Term Incentive Plan
Percentage of amount of quarterly distribution in excess of threshold limit		6.00%
Percentage of amount of equity value in excess of threshold limit for conversion of units to common shares		6.00%
Percentage of newly issued common shares to the total number of issued and outstanding common shares allowed		6.00%
IDR LLC | Series B Unit Awards classified as equity
Assumptions:
Floor equity value	2,000	$ 2,000
Expected volatility (as a percent)		43.00%
Risk free rate (as a percent)		2.45%
Weighted average cost of capital (as a percent)		7.25%
Estimated value (in dollars per unit)		$ 999
Aggregate disclosure
Expense recognized	$ 7.5	$ 15.3
Awards granted		92,000
Awards forfeited	500
IDR LLC | Series B Unit Awards classified as liability
Assumptions:
Floor equity value	$ 4,100	$ 4,100
Expected volatility (as a percent)		42.00%
Risk free rate (as a percent)		2.28%
Weighted average cost of capital (as a percent)		7.25%
Estimated value (in dollars per unit)		$ 2,042
Aggregate disclosure
Expense recognized	$ 2.1	$ 2.7
Awards granted		8,000

Distributions from Antero Mid19

Distributions from Antero Midstream (Details) $ / shares in Units, $ in Thousands	Aug. 03, 2017$ / shares	Jun. 30, 2017USD ($)$ / shares	Mar. 31, 2017USD ($)$ / shares	Dec. 31, 2016USD ($)$ / shares	Sep. 30, 2016USD ($)$ / shares	Jun. 30, 2016USD ($)$ / shares	Mar. 31, 2016USD ($)$ / shares	Dec. 31, 2015USD ($)$ / shares	Sep. 30, 2015USD ($)$ / shares	Jun. 30, 2015$ / shares	Mar. 31, 2015$ / shares	Dec. 31, 2014$ / shares	Jun. 30, 2017$ / shares$ / item
Partnership equity and distributions
Minimum quarterly cash distribution (per unit)													0.17
Annual cash distribution (per unit)													0.68
Minimum cash distributions to trigger unitholder and general partner distributions | $ / shares													$ 0.1955
Subsequent event
Partnership equity and distributions
Cash distribution declared and paid | $ / shares	$ 0.027
General Partner
Partnership equity and distributions
Total Distribution | $		$ 15,328	$ 11,553	$ 7,543	$ 4,820	$ 2,731	$ 1,850	$ 969	$ 295
Common Unit and Subordinated Unit
Partnership equity and distributions
Cash distribution declared and paid | $ / shares		$ 0.3200	$ 0.3000	$ 0.2800	$ 0.2650	$ 0.2500	$ 0.2350	$ 0.2200	$ 0.2050	$ 0.1900	$ 0.1800	$ 0.0943
Above $0.1955 up to $0.2125
Partnership equity and distributions
Unitholders marginal percentage interest in distribution													85.00%
General Partners marginal percentage interest in distribution													15.00%
Above $0.2125 up to $0.2550
Partnership equity and distributions
Unitholders marginal percentage interest in distribution													75.00%
General Partners marginal percentage interest in distribution													25.00%
$0.2550
Partnership equity and distributions
Pro rata cash distribution to the holders of common and subordinate units													0.2550
Unitholders marginal percentage interest in distribution													50.00%
General Partners marginal percentage interest in distribution													50.00%
Minimum | Above $0.1955 up to $0.2125
Partnership equity and distributions
Pro rata cash distribution to the holders of common and subordinate units													0.1955
Minimum | Above $0.2125 up to $0.2550
Partnership equity and distributions
Pro rata cash distribution to the holders of common and subordinate units													0.2125
Maximum | Above $0.1955 up to $0.2125
Partnership equity and distributions
Pro rata cash distribution to the holders of common and subordinate units													0.2125
Maximum | Above $0.2125 up to $0.2550
Partnership equity and distributions
Pro rata cash distribution to the holders of common and subordinate units													0.2550

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Allocation of costs
General and administrative expense	$ 0.4	$ 0.2
Payable to related party	$ 0.3	$ 0.3

Summarized Financial Informat21

Summarized Financial Information for Antero Midstream (Details) - Antero Midstream - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Summarized Income Statement Information
Revenues	$ 193,766	$ 136,810	$ 368,536	$ 272,882
Operating expenses	101,199	83,503	194,272	172,955
Operating income	92,567	53,307	174,264	99,927
Net income	87,175	49,912	162,267	92,829
Net income attributable to incentive distribution rights	(15,328)	(2,731)	(26,881)	(4,581)
Limited partners' interest in net income	71,847	$ 47,181	135,386	$ 88,248
Summarized Balance Sheet Information
Current assets	98,126		98,126		$ 79,950
Non-current assets	2,663,811		2,663,811		2,269,945
Current liabilities	95,366		95,366		82,013
Non-current liabilities	1,147,618		1,147,618		1,045,072
Partners' capital	$ 1,518,953		$ 1,518,953		$ 1,222,810

Subsequent Events (Details)

Subsequent Events (Details)	Aug. 03, 2017$ / shares
Subsequent event
Subsequent events
Cash distributions declared (in dollars per share)	$ 0.027