Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 24, 2020 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-38075 | |
Entity Registrant Name | ANTERO MIDSTREAM CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 61-1748605 | |
Entity Address, Address Line One | 1615 Wynkoop Street | |
Entity Address, City or Town | Denver | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80202 | |
City Area Code | 303 | |
Local Phone Number | 357-7310 | |
Title of 12(b) Security | Common Stock, par value $0.01 | |
Trading Symbol | AM | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 476,597,058 | |
Entity Central Index Key | 0001623925 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 2,997 | $ 1,235 |
Accounts receivable - Antero Resources | 76,088 | 101,029 |
Accounts receivable - third party | 3,392 | 4,574 |
Income tax receivable | 17,547 | |
Other current assets | 645 | 1,720 |
Total current assets | 100,669 | 108,558 |
Property and equipment, net | 3,249,643 | 3,273,410 |
Investments in unconsolidated affiliates | 729,823 | 709,639 |
Deferred tax asset | 160,579 | 103,231 |
Customer relationships | 1,462,908 | 1,498,119 |
Goodwill | 575,461 | |
Other assets, net | 11,433 | 14,460 |
Total assets | 5,715,055 | 6,282,878 |
Current liabilities: | ||
Accounts payable - Antero Resources | 2,714 | 3,146 |
Accounts payable - third party | 19,822 | 6,645 |
Accrued liabilities | 72,284 | 104,188 |
Contingent acquisition consideration | 125,000 | |
Other current liabilities | 3,325 | 3,105 |
Total current liabilities | 98,145 | 242,084 |
Long-term liabilities: | ||
Long-term debt | 3,088,785 | 2,892,249 |
Other | 4,943 | 5,131 |
Total liabilities | 3,191,873 | 3,139,464 |
Partners' capital and Stockholders' Equity: | ||
Preferred stock | ||
Common stock, $0.01 par value; 2,000,000 authorized; 484,042 and 476,486 issued and outstanding at December 31, 2019 and June 30, 2020, respectively | 4,765 | 4,840 |
Additional paid-in capital | 3,164,474 | 3,480,139 |
Accumulated loss | (646,057) | (341,565) |
Total stockholders' equity | 2,523,182 | 3,143,414 |
Total liabilities and stockholders' equity | 5,715,055 | 6,282,878 |
Series A Preferred Stock | ||
Partners' capital and Stockholders' Equity: | ||
Preferred stock |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized shares | 100,000,000 | 100,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued | 476,486,000 | 484,042,000 |
Common stock, shares outstanding | 476,486,000 | 484,042,000 |
Series A Preferred Stock | ||
Preferred stock, authorized shares | 12,000 | 12,000 |
Preferred stock, shares issued | 10,000 | 10,000 |
Preferred stock, shares outstanding | 10,000 | 10,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue: | ||||
Amortization of customer relationships | $ (17,606) | $ (8,534) | $ (35,211) | $ (10,315) |
Total revenue | 219,736 | 255,618 | 463,444 | 309,726 |
Operating expenses: | ||||
Direct operating | 42,067 | 63,998 | 90,795 | 78,980 |
General and administrative (including $21,543 and $2,697 of equity-based compensation in 2019 and 2020, respectively) | 12,422 | 34,622 | 25,959 | 54,431 |
Facility idling | 2,475 | 11,153 | ||
Impairment of goodwill | 575,461 | |||
Impairment of property and equipment | 594 | 89,083 | 594 | |
Depreciation | 27,745 | 36,447 | 55,088 | 44,097 |
Accretion and change in fair value of contingent acquisition consideration | 2,297 | 3,346 | ||
Accretion of asset retirement obligations | 61 | 69 | 103 | 79 |
Loss on asset sale | 240 | 240 | ||
Total operating expenses | 85,010 | 138,027 | 847,882 | 181,527 |
Operating income (loss) | 134,726 | 117,591 | (384,438) | 128,199 |
Interest expense, net | (35,311) | (31,521) | (72,942) | (37,738) |
Equity in earnings of unconsolidated affiliates | 20,947 | 13,623 | 40,024 | 16,503 |
Income (loss) before income taxes | 120,362 | 99,693 | (417,356) | 106,964 |
Provision for income tax benefit (expense) | (31,921) | (30,419) | 112,864 | (28,042) |
Net income (loss) and comprehensive income (loss) | $ 88,441 | $ 69,274 | $ (304,492) | $ 78,922 |
Net income (loss) per share-basic and diluted | $ (0.63) | $ 0.21 | ||
Net income per share-basic (in dollars per share) | $ 0.19 | $ 0.14 | (0.63) | 0.21 |
Net income (loss) per share-diluted (in dollars per share) | $ 0.18 | $ 0.14 | $ (0.63) | $ 0.21 |
Weighted average common shares outstanding: | ||||
Basic | 476,836 | 506,816 | 479,969 | 381,045 |
Diluted | 478,837 | 507,767 | 479,969 | 382,026 |
Natural Gas, Gathering, Transportation, Marketing and Processing - Affiliate | ||||
Revenue: | ||||
Revenue | $ 173,991 | $ 168,925 | $ 337,120 | $ 202,459 |
Natural Gas Water Handling and Treatment - Affiliate | ||||
Revenue: | ||||
Revenue | $ 63,351 | 95,181 | $ 161,535 | 117,532 |
Natural Gas Water Handling and Treatment | ||||
Revenue: | ||||
Revenue | $ (46) | $ 50 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Condensed Consolidated Statements of Operations and Comprehensive Income | ||||
Equity-based compensation | $ 2,697 | $ 21,543 | $ 6,035 | $ 32,966 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Partners' Capital and Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Shareholders | Series B Unitholders | Common Stock | Additional Paid-in Capital | Accumulated Earnings | Total |
Balance at Dec. 31, 2018 | $ (41,969) | $ 72,830 | $ 30,861 | |||
Partner' Capital and Stockholders' Equity | ||||||
Distributions to unitholders | (30,543) | (3,720) | (34,263) | |||
Net (loss) and comprehensive (loss) pre-acquisition | (13,549) | (13,549) | ||||
Equity-based compensation pre-acquisition | 7,034 | 7,034 | ||||
Exchange of common shares for shares of common stock and cash consideration paid | 79,027 | (69,110) | $ 5,066 | $ 4,002,898 | 4,017,881 | |
Exchange of common shares for shares of common stock and cash consideration paid (in shares) | 506,641 | |||||
Equity-based compensation | 4,389 | 4,389 | ||||
Net income and comprehensive income post-acquisition | $ 23,197 | 23,197 | ||||
Balance at Mar. 31, 2019 | $ 5,066 | 4,007,287 | 23,197 | 4,035,550 | ||
Balance (shares) at Mar. 31, 2019 | 506,641 | |||||
Balance at Dec. 31, 2018 | $ (41,969) | $ 72,830 | 30,861 | |||
Partner' Capital and Stockholders' Equity | ||||||
Net income (loss) and comprehensive income (loss) | 78,922 | |||||
Balance at Jun. 30, 2019 | $ 5,068 | 3,874,820 | 92,471 | 3,972,359 | ||
Balance (shares) at Jun. 30, 2019 | 506,847 | |||||
Balance at Mar. 31, 2019 | $ 5,066 | 4,007,287 | 23,197 | 4,035,550 | ||
Balance (shares) at Mar. 31, 2019 | 506,641 | |||||
Partner' Capital and Stockholders' Equity | ||||||
Dividends to stockholders | (152,180) | (152,180) | ||||
Equity-based compensation | 21,543 | 21,543 | ||||
Issuance of common stock upon vesting of equity-based compensation awards, net of common stock withheld for income taxes | $ 2 | (1,830) | (1,828) | |||
Issuance of common stock upon vesting of equity-based compensation awards, net of common stock withheld for income taxes (in shares) | 206 | |||||
Net income (loss) and comprehensive income (loss) | 69,274 | 69,274 | ||||
Balance at Jun. 30, 2019 | $ 5,068 | 3,874,820 | 92,471 | 3,972,359 | ||
Balance (shares) at Jun. 30, 2019 | 506,847 | |||||
Balance at Dec. 31, 2019 | $ 4,840 | 3,480,139 | (341,565) | $ 3,143,414 | ||
Balance (shares) at Dec. 31, 2019 | 484,042 | 484,042 | ||||
Partner' Capital and Stockholders' Equity | ||||||
Dividends to stockholders | (149,014) | $ (149,014) | ||||
Equity-based compensation | 3,338 | 3,338 | ||||
Issuance of common stock upon vesting of equity-based compensation awards, net of common stock withheld for income taxes | (26) | (26) | ||||
Issuance of common stock upon vesting of equity-based compensation awards, net of common stock withheld for income taxes (in shares) | 43 | |||||
Repurchases and retirement of common stock | $ (46) | (15,778) | (15,824) | |||
Repurchases and retirement of common stock (in shares) | (4,700) | |||||
Net income (loss) and comprehensive income (loss) | (392,933) | (392,933) | ||||
Balance at Mar. 31, 2020 | $ 4,794 | 3,318,659 | (734,498) | 2,588,955 | ||
Balance (shares) at Mar. 31, 2020 | 479,385 | |||||
Balance at Dec. 31, 2019 | $ 4,840 | 3,480,139 | (341,565) | $ 3,143,414 | ||
Balance (shares) at Dec. 31, 2019 | 484,042 | 484,042 | ||||
Partner' Capital and Stockholders' Equity | ||||||
Net income (loss) and comprehensive income (loss) | $ (304,492) | |||||
Balance at Jun. 30, 2020 | $ 4,765 | 3,164,474 | (646,057) | $ 2,523,182 | ||
Balance (shares) at Jun. 30, 2020 | 476,486 | 476,486 | ||||
Balance at Mar. 31, 2020 | $ 4,794 | 3,318,659 | (734,498) | $ 2,588,955 | ||
Balance (shares) at Mar. 31, 2020 | 479,385 | |||||
Partner' Capital and Stockholders' Equity | ||||||
Dividends to stockholders | (147,656) | (147,656) | ||||
Equity-based compensation | 2,697 | 2,697 | ||||
Issuance of common stock upon vesting of equity-based compensation awards, net of common stock withheld for income taxes | $ 4 | (370) | (366) | |||
Issuance of common stock upon vesting of equity-based compensation awards, net of common stock withheld for income taxes (in shares) | 311 | |||||
Repurchases and retirement of common stock | $ (33) | (8,856) | (8,889) | |||
Repurchases and retirement of common stock (in shares) | (3,210) | |||||
Net income (loss) and comprehensive income (loss) | 88,441 | 88,441 | ||||
Balance at Jun. 30, 2020 | $ 4,765 | $ 3,164,474 | $ (646,057) | $ 2,523,182 | ||
Balance (shares) at Jun. 30, 2020 | 476,486 | 476,486 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | 6 Months Ended | 10 Months Ended | 12 Months Ended | ||||
Mar. 12, 2019 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2019 | |
Cash flows provided by (used in) operating activities: | |||||||||
Net income (loss) | $ 88,441 | $ (392,933) | $ 69,274 | $ (304,492) | $ 78,922 | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||
Distributions received from Antero Midstream Partners LP, prior to the Transactions | $ 43,492 | 43,492 | |||||||
Depreciation | 55,088 | 44,097 | |||||||
Payment of contingent consideration in excess of acquisition date fair value | (34,342) | ||||||||
Accretion and change in fair value of contingent acquisition consideration | 103 | 3,425 | |||||||
Impairment | 664,544 | 594 | |||||||
Deferred income tax benefit | (56,408) | 28,042 | |||||||
Equity-based compensation | 2,697 | $ 21,543 | 6,035 | 32,966 | |||||
Equity in earnings of unconsolidated affiliates | (20,947) | (13,623) | (40,024) | (16,503) | $ (51,315) | ||||
Distributions from unconsolidated affiliates | 41,828 | 23,860 | 64,320 | ||||||
Amortization of customer relationships | 17,606 | 8,534 | 35,211 | 10,315 | |||||
Amortization of deferred financing costs | 2,190 | 1,102 | |||||||
Settlement of asset retirement obligations | (601) | ||||||||
Loss on asset sale | 240 | 240 | |||||||
Changes in assets and liabilities: | |||||||||
Accounts receivable-Antero Resources | 24,941 | 38,414 | |||||||
Accounts receivable-third party | 1,089 | 9 | |||||||
Income tax receivable | (17,547) | ||||||||
Other current assets | 930 | (1,867) | |||||||
Accounts payable-Antero Resources | (432) | 973 | |||||||
Accounts payable-third party | 5,495 | (4,629) | |||||||
Income taxes payable | (15,370) | ||||||||
Accrued liabilities | (21,701) | (15,678) | |||||||
Net cash provided by operating activities | 362,147 | 252,164 | |||||||
Cash flows provided by (used in) investing activities: | |||||||||
Additions to gathering systems and facilities | (103,937) | (89,206) | |||||||
Additions to water handling systems | (19,477) | (51,984) | |||||||
Investments in unconsolidated affiliates | (21,988) | (103,409) | |||||||
Cash received on acquisition of Antero Midstream Partners LP | 619,532 | ||||||||
Cash consideration paid to Antero Midstream Partners LP unitholders | (598,709) | ||||||||
Cash received in asset sale | 123 | ||||||||
Change in other assets | 1,938 | 2,375 | |||||||
Net cash used in investing activities | (143,341) | (221,401) | |||||||
Cash flows provided by (used in) financing activities: | |||||||||
Distributions to unitholders and dividends to stockholders | (296,395) | (182,625) | |||||||
Distributions to Series B unitholders | (3,720) | ||||||||
Distributions to preferred shareholders | (275) | (98) | |||||||
Repurchases of common stock | (24,713) | ||||||||
Issuance of senior notes | 650,000 | ||||||||
Payments of deferred financing costs | (6,952) | ||||||||
Borrowings (repayments) on bank credit facilities, net | 195,500 | (480,500) | |||||||
Payment for contingent acquisition consideration | (90,658) | ||||||||
Employee tax withholding for settlement of equity compensation awards | (392) | (1,828) | |||||||
Other | (111) | (71) | |||||||
Net cash used in financing activities | (217,044) | (25,794) | |||||||
Net increase in cash and cash equivalents | 1,762 | 4,969 | |||||||
Cash and cash equivalents, beginning of period | $ 2,822 | $ 1,235 | $ 2,822 | 1,235 | 2,822 | $ 2,822 | |||
Cash and cash equivalents, end of period | $ 2,997 | $ 7,791 | 2,997 | 7,791 | $ 1,235 | $ 1,235 | |||
Supplemental disclosure of cash flow information: | |||||||||
Cash paid during the period for interest | 74,665 | 31,147 | |||||||
Cash refund received (paid) during the period for income taxes | 38,910 | (16,001) | |||||||
Increase (decrease) in accrued capital expenditures and accounts payable for property and equipment | $ (3,461) | $ 9,447 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2020 | |
Organization | |
Organization | (1 ) Organization Antero Midstream Corporation was originally formed as Antero Resources Midstream Management LLC in 2013 to become the general partner of Antero Midstream Partners LP (“Antero Midstream Partners”). On May 4, 2017, Antero Resources Midstream Management LLC converted from a limited liability company to a limited partnership under the laws of the State of Delaware and changed its name to Antero Midstream GP LP (“AMGP”) in connection with its initial public offering. On March 12, 2019, pursuant to the Simplification Agreement, dated as of October 9, 2018, by and among AMGP, Antero Midstream Partners and certain of their affiliates (the “Simplification Agreement”), (i) AMGP was converted from a limited partnership to a corporation under the laws of the State of Delaware and changed its name to Antero Midstream Corporation (the “Conversion”), (ii) an indirect, wholly owned subsidiary of Antero Midstream Corporation was merged with and into Antero Midstream Partners, with Antero Midstream Partners surviving the merger as an indirect, wholly owned subsidiary of Antero Midstream Corporation (the “Merger”), and (iii) Antero Midstream Corporation exchanged (the “Series B Exchange” and, together with the Conversion, the Merger and the other transactions pursuant to by the Simplification Agreement, the “Transactions”) each issued and outstanding Series B Unit (the “Series B Units”) representing a membership interest in Antero IDR Holdings LLC (“IDR Holdings”) for 176.0041 shares of its common stock, par value $0.01 per share (“AM common stock”) . As a result of the Transactions, Antero Midstream Partners became and is now a wholly owned subsidiary of Antero Midstream Corporation and former shareholders of AMGP, unitholders of Antero Midstream Partners, including Antero Resources Corporation (“Antero Resources”), and holders of Series B Units became owners of AM common stock. We are a growth-oriented midstream company formed to own, operate and develop midstream energy infrastructure primarily to service Antero Resources and its production and completion activity in the Appalachian Basin’s Marcellus Shale and Utica Shale located in West Virginia and Ohio. Our assets consist of gathering pipelines, compressor stations, interests in processing and fractionation plants, and water handling assets. The Company, through Antero Midstream Partners and its affiliates, provides midstream services to Antero Resources under long-term contracts. The Company’s corporate headquarters are located in Denver, Colorado. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | (2) Summary of Significant Accounting Policies (a) Basis of Presentation These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) applicable to interim financial information and should be read in the context of the Company’s December 31, 2019 consolidated financial statements and notes thereto for a more complete understanding of the Company’s operations, financial position, and accounting policies. The Company’s December 31, 2019 consolidated financial statements were included in the Company’s 2019 Annual Report on Form 10-K, which was filed with the SEC. These unaudited condensed consolidated financial statements of the Company 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 unaudited condensed consolidated financial statements include all adjustments (consisting of normal and recurring accruals) considered necessary to present fairly the Company’s financial position as of December 31, 2019 and June 30, 2020, the results of the Company’s operations for the three and six months ended June 30, 2019 and 2020, and its cash flows for the six months ended June 30, 2019 and 2020. The Company has no items of other comprehensive income (loss); therefore, net income (loss) is equal to comprehensive income (loss). Certain costs of doing business incurred and charged to the Company by Antero Resources have been reflected in the accompanying unaudited condensed consolidated financial statements. These costs include general and administrative expenses provided to the Company by Antero Resources in exchange for: ● business services, such as payroll, accounts payable and facilities management; ● corporate services, such as finance and accounting, legal, human resources, investor relations and public and regulatory policy; and ● employee compensation, including equity-based compensation. Transactions between the Company and Antero Resources have been identified in the unaudited condensed consolidated financial statements (see Note 6—Transactions with Affiliates). (b) Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include (i) for the period prior to March 13, 2019, the accounts of AMGP and its consolidated subsidiaries, which did not include Antero Midstream Partners and its subsidiaries, and (ii) for the period beginning on March 13, 2019, the accounts of Antero Midstream Corporation and its consolidated subsidiaries, including Antero Midstream Partners and its subsidiaries, which were acquired in the Transactions. See Note 3—Business Combination. All significant intercompany accounts and transactions have been eliminated in the Company’s unaudited condensed consolidated financial statements. (c) Revenue Recognition The Company, through Antero Midstream Partners and its affiliates, provides gathering, compression and water handling services under fee-based contracts primarily based on throughput or at cost plus a margin. Certain of these contracts contain operating leases of the Company’s assets under GAAP. Under these arrangements, the Company receives fees for gathering, compression services and water handling services. The revenue the Company earns from these arrangements is directly related to (i) in the case of natural gas gathering and compression, the volumes of metered natural gas that it gathers, compresses and delivers to natural gas compression sites or other transmission delivery points, (ii) in the case of fresh water services, the quantities of fresh water delivered to its customers for use in their well completion operations, (iii) in the case of wastewater treatment services performed by the Company prior to idling of the Clearwater Facility (as defined below) in September 2019, the quantities of wastewater treated for its customers, (iv) in the case of wastewater services provided by third parties, the third-party costs the Company incurs plus or (v) in the case of flowback and produced water treatment performed by the Company, a cost of service fee based on the costs incurred by the Company. The Company recognizes revenue when it satisfies a performance obligation by delivering a service to a customer or the use of leased assets to a customer. The Company includes lease revenue within revenues by service. See Note 7—Revenue. (d) Use of Estimates The preparation of the unaudited condensed consolidated financial statements and notes in conformity with GAAP requires that management formulate estimates and assumptions that affect revenues, expenses, assets, liabilities and the disclosure of contingent liabilities. Items subject to estimates and assumptions include the useful lives of property and equipment, the valuation of assets and liabilities acquired from Antero Midstream Partners, as well as the valuation of accrued liabilities, among others. Although management believes these estimates are reasonable, actual results could differ from these estimates. (e) Cash and Cash Equivalents The Company considers all liquid investments purchased with an initial maturity of three months or less to be cash equivalents. The carrying value of cash and cash equivalents approximates fair value due to the short-term nature of these instruments. (f) Property and Equipment Property and equipment primarily consists of gathering pipelines, compressor stations and the wastewater treatment facility and related landfill (collectively, the “Clearwater Facility”) previously used for the disposal of salt therefrom, other flowback and produced water treatment facilities, and fresh water delivery pipelines and facilities stated at historical cost less accumulated depreciation, amortization and impairment. The Company capitalizes construction-related direct labor and material costs. Maintenance and repair costs are expensed as incurred. Depreciation of property and equipment is computed using the straight-line method over the estimated useful lives and salvage values of assets. The depreciation of fixed assets recorded under operating lease agreements is included in depreciation expense. Uncertainties that may impact these estimates of useful lives include, among others, changes in laws and regulations relating to environmental matters, including air and water quality, restoration and abandonment requirements, economic conditions, and supply and demand for the Company’s services in the areas in which it operates. When assets are placed into service, management makes estimates with respect to useful lives and salvage values that management believes are reasonable. Amortization of landfill airspace consists of the amortization of landfill capital costs, including those that have been incurred and capitalized and estimated future costs for landfill development and construction, and the amortization of asset retirement costs arising from landfill final capping, closure, and post-closure obligations. Amortization expense is recorded on a units-of-consumption basis, applying cost as a rate per-cubic yard. The rate per-cubic yard is calculated by dividing each component of the amortizable basis of the landfill by the number of cubic yards needed to fill the corresponding asset’s airspace. Landfill capital costs and closure and post-closure asset retirement costs are generally incurred to support the operation of the landfill over its entire operating life and are, therefore, amortized on a per-cubic yard basis using a landfill’s total airspace capacity. Estimates of disposal capacity and future development costs are created using input from independent engineers and internal technical teams and are reviewed at least annually. The Company evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying values of the assets may not be recoverable. Generally, the basis for making such assessments is undiscounted future cash flow projections for the assets being assessed. If the carrying values of the assets are deemed not recoverable, the carrying values are reduced to the estimated fair values, which are based on discounted future cash flows using assumptions as to revenues, costs, and discount rates typical of third-party market participants, which is a Level 3 fair value measurement. The Company recognized an impairment with respect to the freshwater delivery system during the six months ended June 30, 2020. (g) Asset Retirement Obligations The Company’s asset retirement obligations include its obligation to close, maintain, and monitor landfill cells and support facilities. After the entire landfill reaches capacity and is certified closed, the Company must continue to maintain and monitor the landfill for a post-closure period, which generally extends for . The Company records the fair value of its landfill retirement obligations as a liability in the period in which the regulatory obligation to retire a specific asset is triggered. For the Company’s individual landfill cells, the required closure and post-closure obligations under the terms of its permits and its intended operation of the landfill cell are triggered and recorded when the cell is placed into service and salt is initially disposed in the landfill cell. The fair value is based on the total estimated costs to close the landfill cell and perform post-closure activities once the landfill cell has reached capacity and is no longer accepting salt. Retirement obligations are increased each year to reflect the passage of time by accreting the balance at the weighted average credit-adjusted risk-free rate that is used to calculate the recorded liability, with accretion charged to direct costs. Actual cash expenditures to perform closure and post-closure activities reduce the retirement obligation liabilities as incurred. After initial measurement, asset retirement obligations are adjusted at the end of each period to reflect changes, if any, in the estimated future cash flows underlying the obligation. Landfill retirement assets are capitalized as the related retirement obligations are incurred, and are amortized on a units-of-consumption basis as the disposal capacity is consumed. Asset retirement obligations are recorded for fresh water impoundments and waste water pits when an abandonment date is identified. The Company records the fair value of its freshwater impoundment and waste water pit retirement obligations as liabilities in the period in which the regulatory obligation to retire a specific asset is triggered. The fair value is based on the total reclamation costs of the assets. Retirement obligations are increased each year to reflect the passage of time by accreting the balance at the weighted average credit-adjusted risk-free rate that is used to calculate the recorded liability, with accretion charged to direct costs. Actual cash expenditures to perform remediation activities reduce the retirement obligation liabilities as incurred. After initial measurement, asset retirement obligations are adjusted at the end of each period to reflect changes, if any, in the estimated future cash flows underlying the obligation. Fresh water impoundments and wastewater pit retirement assets are capitalized as the related retirement obligations are incurred, and are amortized on a straight-line basis until reclamation. The Company is under no legal obligations, neither contractually nor under the doctrine of promissory estoppel, to restore or dismantle its gathering pipelines, compressor stations, water delivery pipelines, flowback and produced water facilities and the Clearwater Facility upon abandonment. See Note 4—Clearwater Facility Idling. (h) Equity-Based Compensation The Company’s unaudited condensed consolidated financial statements include equity-based compensation costs related to awards granted by its own plans, as in place before and after the Transactions, as well as costs allocated by Antero Resources for grants made prior to the Transactions. Costs allocated from Antero Resources are offset to additional paid in capital on the unaudited condensed consolidated balance sheet. See Note 6—Transactions with Affiliates for additional information regarding Antero Resources’ allocation of expenses to the Company. For awards granted under its own plan, the Company recognizes compensation cost related to all equity-based awards in the financial statements based on the estimated grant date fair value. The Company is to grant various types of equity-based compensation awards, including stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, dividend equivalent awards and other types of awards. The grant date fair values of such awards are determined based on the type of award and may utilize market prices on the date of grant, Black-Scholes option-pricing model, Monte Carlo simulations or other acceptable valuation methodologies, as appropriate for the type of equity-based award. Compensation cost is recognized ratably over the applicable vesting or service period. Forfeitures are accounted for as they occur by reversing the expense previously recognized for awards that were forfeited during the period. See Note 11—Equity-Based Compensation. (i) Income Taxes The Company recognizes deferred tax assets and liabilities for temporary differences resulting from net operating loss carryforwards for income tax purposes and the differences between the financial statement and tax basis of assets and liabilities. The effect of changes in tax laws or tax rates is recognized in income during the period such changes are enacted. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. The Company regularly reviews its tax positions in each significant taxing jurisdiction during the process of evaluating its tax provision. The Company makes adjustments to its 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. In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted. The CARES Act allows corporations with net operating losses (“NOLs”) incurred in 2018, 2019, and 2020 to carry back such NOLs to each of the five years preceding the year of the NOLs, beginning with the earliest year in which there was taxable income, and claim an income tax refund in the applicable carryback years. As a result of this NOLs carryback provision in the CARES Act, the Company was able to recognize an income tax refund receivable in March 2020 of $55 million, including $11 million in current income tax benefit and $44 million of previously recognized deferred income tax benefit. As of June 30, 2020, the Company had received $39 million of this refund. (j) Fair Value Measures The Financial Accounting Standards Board (the “FASB”) ASC Topic 820, Fair Value Measurements and Disclosures the Company estimates 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. The Company’s 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 indirectly. The carrying values on the unaudited condensed balance sheet of the Company’s cash and cash equivalents, accounts receivable—Antero Resources, accounts receivable—third party, other current assets, accounts payable—Antero Resources, accounts payable—third party, accrued liabilities and other current liabilities approximate fair values due to their short-term maturities. The assets and liabilities of Antero Midstream Partners were recorded at fair value as of the acquisition date, March 12, 2019 (see Note 3—Business Combination). Additionally, the Company uses certain fair valuation techniques in performing its goodwill impairment test described below and in determining the fair value of the freshwater delivery system, both of which were impaired in the first quarter of 2020. (k) Investments in Unconsolidated Affiliates The Company uses the equity method to account for its investments in companies if the investment provides the Company with the ability to exercise significant influence over, but not control of, the operating and financial policies of the investee. The Company’s unaudited condensed consolidated net income (loss) includes the Company’s proportionate share of the net income or loss of such companies. The Company’s judgment regarding the level of influence over each equity method investee includes considering key factors such as the Company’s ownership interest, representation on the board of directors and participation in policy-making decisions of the investee and material intercompany transactions. See Note 15—Investments in Unconsolidated Affiliates. (l) Business Combinations The Company recognizes and measures the assets acquired and liabilities assumed in a business combination based on their estimated fair values at the acquisition date, with any remaining difference recorded as goodwill. For acquisitions, management engages an independent valuation specialist, as applicable, to assist with the determination of fair value of the assets acquired, liabilities assumed, and goodwill, based on recognized business valuation methodologies. If the initial accounting for the business combination is incomplete by the end of the reporting period in which the acquisition occurs, an estimate will be recorded. Subsequent to the acquisition, and not later than one year from the acquisition date, the Company will record any material adjustments to the initial estimate based on new information obtained that would have existed as of the acquisition date. An adjustment that arises from information obtained that did not exist as of the date of the acquisition will be recorded in the period of the adjustment. Acquisition-related costs are expensed as incurred in connection with each business combination. See Note 3—Business Combination. (m) Goodwill and Intangible Assets Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired in the acquisition of a business. Goodwill is not amortized, but rather is tested for impairment annually in the fourth quarter and when events or changes in circumstances indicate that the fair value of a reporting unit with goodwill has been reduced below its carrying value. The impairment test requires allocating goodwill and other assets and liabilities to reporting units. The fair value of each reporting unit is determined and compared to the carrying value of the reporting unit. The fair value is calculated using the expected present value of future cash flows method. Significant assumptions used in the cash flow forecasts include future net operating margins, future volumes, discount rates and future capital requirements. If the fair value of the reporting unit is less than the carrying value, including goodwill, the excess of the book value over the fair value of goodwill is charged to net income as an impairment expense. Amortization of intangible assets with definite lives is calculated using the straight-line method, which is reflective of the benefit pattern in which the estimated economic benefit is expected to be received over the estimated useful life of the intangible asset. Intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the intangible asset may not be recoverable. If the sum of the expected undiscounted future cash flows related to the asset is less than the carrying amount of the asset, an impairment loss is recognized based on the fair value of the asset. See Note 4— and Note 5—Goodwill and Intangibles. (n ) Treasury Share Retirement The Company periodically retires treasury shares acquired through share repurchases and returns those shares to the status of authorized but unissued. When treasury shares are retired, the Company’s policy is to allocate the excess of the repurchase price over the par value of shares acquired first, to additional paid-in capital, and then, to accumulated earnings. The portion allocable to additional paid-in capital is determined by applying a percentage, determined by dividing the number of shares to be retired by the number of shares outstanding, to the balance of additional paid-in capital as of retirement . |
Business Combination
Business Combination | 6 Months Ended |
Jun. 30, 2020 | |
Business Combination | |
Business Combination | (3) Business Combination On March 12, 2019, AMGP and Antero Midstream Partners completed the Transactions. The Transactions have been accounted for using the acquisition method of accounting with Antero Midstream Corporation identified as the acquirer of Antero Midstream Partners. The components of the fair value of consideration transferred are as follows (in thousands): Fair value of shares of AM common stock issued (1) $ 4,017,881 Cash 598,709 Total fair value of consideration transferred $ 4,616,590 (1) The fair value of each share of AM common stock issued in connection with the Transactions was determined to be $12.54 , the closing price of AMGP common shares on March 12, 2019. The final purchase price allocation of the Transactions are summarized in the table below. The fair value of assets acquired and liabilities assumed at March 12, 2019, were as follows (in thousands): Cash and cash equivalents $ 619,532 Accounts receivable–Antero Resources 142,312 Accounts receivable–third party 117 Other current assets 1,150 Property and equipment, net 3,371,427 Investments in unconsolidated affiliates 568,285 Customer relationships 1,567,000 Other assets, net 42,887 Total assets acquired 6,312,710 Accounts payable–Antero Resources 3,316 Accounts payable–third party 30,674 Accrued liabilities 87,021 Other current liabilities 537 Long-term debt 2,364,935 Contingent acquisition consideration 116,924 Other liabilities 8,524 Total liabilities assumed 2,611,931 Net assets acquired, excluding goodwill 3,700,779 Goodwill 915,811 Net assets acquired $ 4,616,590 All customer relationships are subject to amortization, which is recognized over a weighted-average period of 23 years for the remaining economic life of the relationship. The purchase price allocation resulted in the recognition of $915 million of goodwill, including $575 million within the Company’s gathering and processing segment and $340 million of goodwill within its water handling segment. Substantially all of the goodwill is expected to be deductible for tax purposes. Goodwill represented the efficiencies realized with simplifying our corporate structure to own, operate and develop midstream energy infrastructure primarily to service Antero Resources. See Note 5—Goodwill and Intangibles. The Company’s unaudited condensed consolidated statement of operations for the six months ended June 30, 2019 include $6 million of acquisition-related costs associated with the Transactions. These costs were expensed as general and administrative costs. |
Clearwater Facility Idling
Clearwater Facility Idling | 6 Months Ended |
Jun. 30, 2020 | |
Clearwater Facility Idling | |
Clearwater Facility Idling | (4) Clearwater Facility Idling On September 18, 2019, the Company commenced a strategic evaluation of the Clearwater Facility, at which time such facility was idled. The Company expects the facility to continue to be idled for the foreseeable future. Accordingly, the Company performed an impairment analysis of the facility and determined: (i) to reduce the carrying value of the facility to its estimated salvage value, which included the land associated with the Clearwater Facility; (ii) the fair value of the goodwill assigned to the wastewater treatment reporting unit was less than its carrying value, resulting in an impairment charge to goodwill; and (iii) the customer relationships intangible asset was impaired. The following table shows the impairment charges for the year ended December 31, 2019 related to the Clearwater Facility (in thousands): Impairment of property and equipment $ 408,882 Impairment of goodwill 42,290 Impairment of customer relationships 11,871 Total impairment expense $ 463,043 The Company incurred $2.5 million and $11.2 million in facility idling costs for the care and maintenance of the Clearwater Facility during the three and six months ended June 30, 2020, respectively. |
Goodwill and Intangibles
Goodwill and Intangibles | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangibles | |
Goodwill and Intangibles | (5) Goodwill and Intangibles The Company evaluates goodwill for impairment annually during the fourth quarter and whenever events or changes in circumstances indicate it is more likely than not that the fair value of a reporting unit with goodwill is less than its carrying amount. Significant assumptions used to estimate the reporting units’ fair value include the discount rate as well as estimates of future cash flows, which are impacted primarily by commodity prices and producer customers’ development plans (which impact volumes and capital requirements). During the third quarter of 2019, the Company incurred impairment charges to the goodwill and customer relationships intangible asset associated with the Clearwater Facility, which is in the water handling segment. See Note 4—Clearwater Facility Idling. During the fourth quarter of 2019, the Company incurred impairment charges of $298 million to its fresh water delivery and services reporting unit, which is in the water handling segment. This was primarily due to decreased water volumes driven by decreased drilling and increased use of water blending operations by Antero Resources. There was During the first quarter of 2020, the Company performed an interim impairment analysis of the goodwill due to changes in Antero Resources’ drilling plans as a result of the decline in commodity prices. As a result of this evaluation, the Company impaired all remaining goodwill of All customer relationships are subject to amortization and are amortized over a weighted-average period of 23 years , which reflects the remaining economic life of the relationships. The changes in the carrying amount of customer relationships for the six months ended June 30, 2020 were as follows (in thousands): Customer relationships as of December 31, 2019 $ 1,498,119 Accumulated amortization (35,211) Customer relationships as of June 30, 2020 $ 1,462,908 Future amortization expense is as follows (in thousands): Remainder of year ending December 31, 2020 $ 35,463 Year ending December 31, 2021 70,672 Year ending December 31, 2022 70,672 Year ending December 31, 2023 70,672 Year ending December 31, 2024 70,672 Year ending December 31, 2025 70,672 Thereafter 1,074,085 Total $ 1,462,908 |
Transactions with Affiliates
Transactions with Affiliates | 6 Months Ended |
Jun. 30, 2020 | |
Transactions with Affiliates | |
Transactions with Affiliates | (6) Transactions with Affiliates (a) Revenues Substantially all revenues earned in the three and six months ended June 30, 2019 and 2020 were earned from Antero Resources, under various agreements for gathering and compression and water handling services. Revenues earned from gathering and processing services consists of lease income. (b) Accounts receivable—Antero Resources and Accounts payable—Antero Resources Accounts receivable—Antero Resources represents amounts due from Antero Resources, primarily related to gathering and compression services and water handling services. Accounts payable—Antero Resources represents amounts due to Antero Resources for general and administrative and other costs. (c) Allocation of Costs Charged by Antero Resources The employees supporting the Company’s operations are concurrently employed by Antero Resources and the Company. Direct operating expense includes costs charged to the Company of $1.9 million and $1.5 million during the three months ended June 30, 2019 and 2020, respectively, and $2.3 million and $3.5 million during the six months ended June 30, 2019 and 2020, respectively. These costs were for services provided by employees associated with the operation of the Company’s gathering lines, compressor stations, and water handling assets. General and administrative expense includes costs charged to the Company by Antero Resources of $11.8 million and $6.4 million during the three months ended June 30, 2019 and 2020, respectively, and $13.9 million and $12.8 million during the six months ended June 30, 2019 and 2020, respectively. These costs relate to: (i) various business services, including payroll processing, accounts payable processing and facilities management, (ii) various corporate services, including legal, accounting, treasury, information technology and human resources and (iii) compensation, including certain equity-based compensation. These expenses are charged to the Company based on (i) the nature of the expenses and are apportioned based on a combination of the Company’s proportionate share of gross property and equipment, capital expenditures and labor costs, as applicable, and (ii) an annual management services fee. The Company reimburses Antero Resources directly for all general and administrative costs charged to it. See Note 11—Equity-Based Compensation. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2020 | |
Revenue | |
Revenue | (7) Revenue (a) Revenue from Contracts with Customers All of the Company’s revenues are derived from service contracts with customers and are recognized when the Company satisfies a performance obligation by delivering a service to a customer. The Company derives substantially all of its revenues from Antero Resources. The following sets forth the nature, timing of satisfaction of performance obligations, and significant payment terms of the Company’s contracts with Antero Resources. Gathering and Compression Agreement Pursuant to the gathering and compression agreement with Antero Resources, Antero Resources has dedicated substantially all of its current and future acreage in West Virginia, Ohio and Pennsylvania to the Company for gathering and compression services except for acreage subject to third-party commitments or pre-existing dedications. The Company also has an option to gather and compress natural gas produced by Antero Resources on any additional acreage it acquires In December 2019, the Company and Antero Resources agreed to extend the initial term of the gathering and compression agreement to 2038 and established a growth incentive fee program whereby low pressure gathering fees will be reduced from 2020 through 2023 to the extent Antero Resources achieves certain volumetric targets at certain points during such time. Antero Resources achieved the volumetric targets the first and second quarters of 2020. For the three and six months ended June 30, 2020, the Company provided Antero Resources $12 million and $24 million in rebates, respectively. Upon completion of the initial contract term, the gathering and compression agreement will continue in effect from year to year until such time as the agreement is terminated, effective upon an anniversary of the effective date of the agreement, by either the Company or Antero Resources on or before the th Under the gathering and compression agreement, the Company receives a low pressure gathering fee, a high pressure gathering fee and a compression fee, in each case subject to CPI-based adjustments. In addition, the agreement stipulates that the Company receives a reimbursement for the actual cost of electricity used at its compressor stations. The Company determined that the gathering and compression agreement is an operating lease as Antero Resources obtains substantially all of the economic benefit of the asset and has the right to direct the use of the asset. The gathering system is an identifiable asset within the gathering and compression agreement, and it consists of The gathering system is considered a single lease due to the interrelated network of the assets. The Company accounts for its lease and non-lease components as a single lease component as the lease component is the predominant component. The non-lease components consist of operating, oversight and maintenance of the gathering system, which are performed on time-elapsed measures. The Company recognizes revenue when low pressure volumes are delivered to a compressor station, compression volumes are delivered to a high pressure line and high pressure volumes are delivered to a processing plant or transmission pipeline. The Company invoices the customer the month after each service is performed, and payment is due in the same month. Water Services Agreement The Company is party to a water services agreement with Antero Resources, whereby the Company provides certain water handling services to Antero Resources within an area of dedication in defined service areas in West Virginia and Ohio. Upon completion of the initial term in 2035, the water services agreement will continue in effect from year to year until such time as the agreement is terminated, effective upon an anniversary of the effective date of the agreement, by either the Company or Antero Resources on or before the th day prior to the anniversary of such effective date. Under the agreement, the Company receives a fixed fee per barrel for fresh water deliveries by pipeline directly to the well site. Additionally, the Company receives a fixed fee per barrel for fresh water delivered by truck to high-rate transfer facilities. For flowback and produced water blending services, the Company receives a cost of service fee based on the costs incurred by the Company. Antero Resources also agreed to pay the Company a fixed fee per barrel for wastewater treatment at the Clearwater Facility, which was idled in the third quarter of 2019 and which the Company expects will remain idled for the foreseeable future. All such fees under the agreement are subject to annual CPI-based adjustments and additional fees based on certain costs. Under the water services agreement, the Company may also contract with third parties to provide water services to Antero Resources. Antero Resources reimburses the Company for third-party out-of-pocket costs plus a 3% markup. The Company satisfies its performance obligations and recognizes revenue when the fresh water volumes have been delivered to the hydration unit of a specified well pad, flowback and produced water blending services have been completed, or prior to the idling of the Clearwater Facility in September 2019, when the wastewater volumes were delivered to the Clearwater Facility . The Company invoices the customer the month after water services are performed, and payment is due in the same month. For services contracted through third-party providers, the Company’s performance obligation is satisfied when the service to be performed by the third-party provider has been completed. The Company invoices the customer after the third-party provider billing is received, and payment is due in the same month. Minimum Volume Commitments The gathering and compression agreement includes certain minimum volume commitment provisions. If and to the extent Antero Resources requests that the Company construct new high pressure lines and compressor stations, the gathering and compression agreement contains minimum volume commitments that gathering capacity and 70% of the compression capacity of such new construction for 10 years . The Company recognizes lease income from its minimum volume commitments under its gathering and compression agreement on a straight-line basis and additional operating lease income is earned when excess volumes are delivered under the contract. The Company is not party to any leases that have not commenced. Minimum volume commitments for fresh water deliveries under the water services agreement concluded at December 31, 2019. Minimum revenue amounts under the gathering and compression minimum volume commitments are as follows (in thousands): Remainder of 2020 $ 80,262 Year ending December 31, 2021 235,901 Year ending December 31, 2022 235,901 Year ending December 31, 2023 235,901 Year ending December 31, 2024 236,547 Year ending December 31, 2025 222,858 Thereafter 499,138 Total $ 1,746,508 (b) Disaggregation of Revenue In the following table, revenue is disaggregated by type of service and type of fee. The table also identifies the reportable segment to which the disaggregated revenues relate. For more information on reportable segments, see Note 16—Reporting Segments. Three Months Ended June 30, Six Months Ended June 30, Segment to which (in thousands) 2019 2020 2019 2020 revenues relate Revenue from contracts with customers Type of service Gathering—low pressure $ 78,807 85,791 94,634 166,939 Gathering and Processing (1) Gathering—low pressure rebate — (12,000) — (24,000) Gathering and Processing (1) Gathering—high pressure 47,749 51,577 57,032 100,490 Gathering and Processing (1) Compression 42,369 48,623 50,793 93,691 Gathering and Processing (1) Fresh water delivery 43,429 36,900 54,204 102,718 Water Handling Wastewater treatment 12,011 — 14,441 — Water Handling Other fluid handling 39,787 26,451 48,937 58,817 Water Handling Amortization of customer relationships (2) (2,402) (9,239) (2,903) (18,477) Gathering and Processing Amortization of customer relationships (2) (6,132) (8,367) (7,412) (16,734) Water Handling Total $ 255,618 219,736 309,726 463,444 Type of contract Per Unit Fixed Fee $ 168,925 185,991 202,459 361,120 Gathering and Processing (1) Gathering—low pressure rebate — (12,000) — (24,000) Gathering and Processing (1) Per Unit Fixed Fee 55,440 36,900 68,645 102,718 Water Handling Cost plus 3% 39,787 23,742 48,937 54,687 Water Handling Cost of service fee — 2,709 — 4,130 Water Handling Amortization of customer relationships (2) (2,402) (9,239) (2,903) (18,477) Gathering and Processing Amortization of customer relationships (2) (6,132) (8,367) (7,412) (16,734) Water Handling Total $ 255,618 219,736 309,726 463,444 (1) Revenue related to the gathering and processing segment is classified as lease income related to the gathering system. (2) Fair value of customer contracts acquired as part of the Transactions discussed in Note 3—Business Combination. (c) Transaction Price Allocated to Remaining Performance Obligations The majority of the Company’s service contracts have a term greater than one year. As such, the Company is not required to disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under the Company’s service contracts, each unit of product delivered to the customer represents a separate performance obligation; therefore, future volumes are wholly unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is not required. The remainder of the Company’s service contracts, which relate to contracts with third parties, are short-term in nature with a contract term of one year or less. Accordingly, the Company is not required to disclose the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of (d) Contract Balances Under the Company’s service contracts, the Company invoices customers after its performance obligations have been satisfied, at which point payment is unconditional. Accordingly, the Company’s service contracts do not give rise to contract assets or liabilities. At December 31, 2019 and June 30, 2020, the Company’s receivables with customers were million, respectively. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2020 | |
Property and Equipment | |
Property and Equipment | (8) Property and Equipment The Company’s investment in property and equipment for the periods presented is as follows: Estimated December 31, June 30, (in thousands) useful lives 2019 2020 Land n/a $ 23,549 23,582 Gathering systems and facilities 40-50 years (1) 2,375,241 2,577,408 Permanent buried pipelines and equipment 7-20 years 602,230 537,173 Surface pipelines and equipment 1-7 years 48,594 42,919 Landfill n/a (2) 1,244 1,244 Heavy trucks and equipment 3-5 years 6,617 5,919 Above ground storage tanks 5-10 years 3,418 1,868 Construction-in-progress n/a 300,165 163,575 Total property and equipment 3,361,058 3,353,688 Less accumulated depreciation (87,648) (104,045) Property and equipment, net $ 3,273,410 3,249,643 (1) Gathering systems and facilities are recognized as a single-leased asset with no residual value. (2) Amortization of landfill costs is recorded over the life of the landfill on a units-of-consumption basis. Due to the decline in commodity prices and industry environment, the Company evaluated its assets for impairment during the first quarter of 2020. As a result of this evaluation, the Company recorded an impairment expense of |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2020 | |
Long-Term Debt. | |
Long-Term Debt | (9) Long-Term Debt The Company’s long-term debt as of December 31, 2019 and June 30, 2020 was as follows at: (Unaudited) December 31, June 30, (in thousands) 2019 2020 Credit Facility (a) $ 959,500 1,155,000 5.375% senior notes due 2024 (b) 652,600 652,600 5.75% senior notes due 2027 (c) 653,250 653,250 5.75% senior notes due 2028 (d) 650,000 650,000 Net unamortized debt issuance costs (23,101) (22,065) Total long-term debt $ 2,892,249 3,088,785 (a) Antero Midstream Partners Revolving Credit Facility Antero Midstream Partners, an indirect, wholly owned subsidiary of Antero Midstream Corporation, as borrower (the “Borrower”), has a senior secured revolving credit facility (the “Credit Facility”) with a consortium of banks. Lender commitments under the Credit Facility are currently billion. At December 31, 2019, the Borrower had borrowings under the Credit Facility of %. At June 30, 2020, the Borrower had borrowings under the Credit Facility of %. 30, 2020. The maturity date of the facility is October 26, 2022. The Credit Facility includes fall away covenants and lower interest rates that are triggered if and when the Borrower is assigned an Investment Grade Rating (as defined in the Credit Facility). The Credit Facility contains certain covenants including restrictions on indebtedness, and requirements with respect to leverage and interest coverage ratios. The Credit Facility permits distributions to the holders of the Borrower’s equity interests in accordance with the cash distribution policy previously adopted by the board of directors of the general partner of the Borrower, provided that no event of default exists or would be caused thereby, and only to the extent permitted by our organizational documents. The Borrower was in compliance with all of the financial covenants under the Credit Facility as of December 31, 2019 and June 30, 2020. Principal amounts borrowed are payable on the maturity date with such borrowings bearing interest that is payable quarterly or, in the case of Eurodollar Rate Loans, at the end of the applicable interest period if shorter than six months. Interest is payable at a variable rate based on LIBOR or the base rate, determined by election at the time of borrowing, plus an applicable margin rate. Interest at the time of borrowing is determined with reference to the Borrower’s then-current leverage ratio subject to certain exceptions. Commitment fees on the unused portion of the Credit Facility are due quarterly at rates ranging from (b) 5.375% Senior Notes Due 2024 On September 13, 2016, Antero Midstream Partners and its wholly owned subsidiary, Finance Corp (together with Antero Midstream Partners, the “Issuers”), issued $650 million in aggregate principal amount of 5.375% senior notes due September 15, 2024 (the “2024 Notes”) at par. The 2024 Notes are unsecured and effectively subordinated to the Credit Facility to the extent of the value of the collateral securing the Credit Facility. The 2024 Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by Antero Midstream Corporation, Antero Midstream Partners’ wholly owned subsidiaries (other than Finance Corp) and certain of its future restricted subsidiaries. Interest on the 2024 Notes is payable on March 15 and September 15 of each year. Antero Midstream Partners may redeem all or part of the 2024 Notes at any time at redemption prices ranging from 104.031% as of June 30, 2020 to 100.00% on or after September 15, 2022. If Antero Midstream Partners undergoes a change of control followed by a rating decline, the holders of the 2024 Notes will have the right to require Antero Midstream Partners to repurchase all or a portion of the 2024 Notes at a price equal to 101% of the principal amount of the 2024 Notes, plus accrued and unpaid interest. (c) 5.75% Senior Notes Due 2027 On February 25, 2019, the Issuers issued $650 million in aggregate principal amount of 5.75% senior notes due March 1, 2027 (the “2027 Notes”) at par. The 2027 Notes are unsecured and effectively subordinated to the Credit Facility to the extent of the value of the collateral securing the Credit Facility. The 2027 Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by Antero Midstream Corporation, Antero Midstream Partners’ wholly owned subsidiaries (other than Finance Corp) and certain of its future restricted subsidiaries. Interest on the 2027 Notes is payable on March 1 and September 1 of each year. Antero Midstream Partners may redeem all or part of the 2027 Notes at any time on or after March 1, 2022 at redemption prices ranging from 102.875% on or after March 1, 2022 to 100.00% on or after March 1, 2025. In addition, prior to March 1, 2022, Antero Midstream Partners may redeem up to 35% of the aggregate principal amount of the 2027 Notes with an amount of cash not greater than the net cash proceeds of certain equity offerings, if certain conditions are met, at a redemption price of 105.75% of the principal amount of the 2027 Notes, plus accrued and unpaid interest. At any time prior to March 1, 2022, Antero Midstream Partners may also redeem the 2027 Notes, in whole or in part, at a price equal to 100% of the principal amount of the 2027 Notes plus a “make-whole” premium and accrued and unpaid interest. If Antero Midstream Partners undergoes a change of control followed by a rating decline, the holders of the 2027 Notes will have the right to require Antero Midstream Partners to repurchase all or a portion of the 2027 Notes at a price equal to 101% of the principal amount of the 2027 Notes, plus accrued and unpaid interest. (d) 5.75% Senior Notes Due 2028 On June 28, 2019, the Issuers issued $650 million in aggregate principal amount of 5.75% senior notes due January 15, 2028 (the “2028 Notes”) at par. The 2028 Notes are unsecured and effectively subordinated to the Credit Facility to the extent of the value of the collateral securing the Credit Facility. The 2028 Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by Antero Midstream Corporation, Antero Midstream Partners’ wholly owned subsidiaries (other than Finance Corp) and certain of its future restricted subsidiaries. Interest on the 2028 Notes is payable on January 15 and July 15 of each year. Antero Midstream Partners may redeem all or part of the 2028 Notes at any time on or after January 15, 2023 at redemption prices ranging from 102.875% on or after January 15, 2023 to 100.00% on or after January 15, 2026. In addition, prior to January 15, 2023, Antero Midstream Partners may redeem up to 35% of the aggregate principal amount of the 2028 Notes with an amount of cash not greater than the net cash proceeds of certain equity offerings, if certain conditions are met, at a redemption price of 105.75% of the principal amount of the 2028 Notes, plus accrued and unpaid interest. At any time prior to January 15, 2023, Antero Midstream Partners may also redeem the 2028 Notes, in whole or in part, at a price equal to 100% of the principal amount of the 2028 Notes plus a “make-whole” premium and accrued and unpaid interest. If Antero Midstream Partners undergoes a change of control followed by a rating decline, the holders of the 2028 Notes will have the right to require Antero Midstream Partners to repurchase all or a portion of the 2028 Notes at a price equal to 101% of the principal amount of the 2028 Notes, plus accrued and unpaid interest. |
Accrued Liabilities
Accrued Liabilities | 6 Months Ended |
Jun. 30, 2020 | |
Accrued Liabilities | |
Accrued Liabilities | (10) Accrued Liabilities Accrued liabilities as of December 31, 2019 and June 30, 2020 consisted of the following items: (Unaudited) December 31, June 30, (in thousands) 2019 2020 Capital expenditures $ 27,427 16,284 Operating expenses 24,980 9,839 Interest expense 44,440 40,524 Other 7,341 5,637 Total accrued liabilities $ 104,188 72,284 |
Equity-Based Compensation
Equity-Based Compensation | 6 Months Ended |
Jun. 30, 2020 | |
Equity-Based Compensation | |
Equity-Based Compensation | (11) Equity-Based Compensation The Company’s general and administrative expenses include equity-based compensation costs related to the Antero Midstream GP LP Long-Term Incentive Plan (“AMGP LTIP”) and the Series B Units prior to the Transactions. Equity-based compensation after the Transactions include (i) costs allocated to Antero Midstream Corporation by Antero Resources for grants made prior to the Transactions pursuant to the Antero Resources Corporation Long-Term Incentive Plan (the “AR LTIP”), (ii) costs related to the Antero Midstream Corporation Long-Term Incentive Plan (the “AM LTIP”) and (iii) the Exchanged B Units (as defined below). Antero Midstream Corporation’s portion of the equity-based compensation expense is included in general and administrative expenses, and recorded as a credit to the applicable classes of equity. Equity-based compensation expense allocated to Antero Midstream Corporation was 30, 2019. For the three and six months ended June 30, 2020, equity-based compensation allocated to Antero Midstream Corporation was million, respectively. For grants made prior to the Transactions, Antero Resources has total unamortized expense related to its various equity-based compensation plans that can be allocated to the Company of approximately 30, 2020, which includes grants made under the Antero Midstream Partners Long Term Incentive Plan (the “AMP LTIP”) prior to the Transactions, which were converted into awards under the AM LTIP. A portion of this will be allocated to Antero Midstream Partners as it is amortized over the remaining service period of the related awards. Antero Midstream Corporation does not reimburse Antero Resources for noncash equity compensation allocated to it for awards issued under the AR LTIP. Exchanged B Units Upon Closing of the Transactions, each Series B Unit, vested and unvested, was exchanged for 176.0041 shares of AM common stock (the “Series B Exchange”). A total of Series B Units then outstanding (the “Exchanged B Units”). The Company recognized 30, 2019. There were no forfeitures after the Series B Exchange was completed. AMGP LTIP The Company recognized expense of $0.2 million for the six months ended June 30, 2019. In connection with the Transactions, the AMGP LTIP was terminated on March 12, 2019. No expense was recognized for the three months ended June 30, 2019. AM LTIP The Company is authorized to grant up to 15,398,901 shares of AM common stock to employees and directors under the AM LTIP. The AM LTIP provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), dividend equivalents, other stock-based awards, cash awards and substitute awards. The terms and conditions of the awards granted are established by the compensation committee of the Board. As of June 30, 2020, a total of shares were available for future grant under the AM LTIP. For the three and six months ended June 30, 2020, the Company recognized expense of Restricted Stock Unit Awards A summary of the restricted stock unit awards activity during the six months ended June 30, 2020 is as follows: Weighted Average Aggregate Number of grant date intrinsic value units fair value (in thousands) Total AM LTIP RSUs awarded and unvested—December 31, 2019 1,275,990 $ 14.38 $ 9,685 Granted 985,269 $ 7.23 Vested (454,933) $ 13.63 Forfeited (47,367) $ 14.43 Total AM LTIP RSUs awarded and unvested—June 30, 2020 1,758,959 $ 10.45 $ 8,971 Intrinsic values are based on the closing price of the Company’s common shares on the referenced dates. At June 30, 2020, unamortized expense of years and the Company’s proportionate share will be allocated to it as it is recognized. Performance Share Unit Awards Based on Return on Invested Capital For the three and six months ended June 30, 2020, the Company recognized $78 thousand and $156 thousand, respectively, of expense related to performance share unit awards based on return of invested capital. For each of the three and six months ended June 30, 2019 As of June 30, 2020, there was $0.6 million of unamortized equity-based compensation expense related to unvested PSUs that is expected to be recognized over a weighted average period of 1.8 years. Cash Awards In January 2020, the Company granted cash awards of $2.2 million to certain executives under the AM LTIP that vest ratably over a period of up to three years . As of June 30, 2020, the Company has accrued $0.8 million in Other liabilities in the unaudited condensed consolidated balance sheet. |
Cash Distributions and Dividend
Cash Distributions and Dividends | 6 Months Ended |
Jun. 30, 2020 | |
Cash Distributions and Dividends | |
Cash Distributions and Dividends | (12) Cash Distributions and Dividends The following table details the amount of distributions and dividends paid with respect to the quarter indicated (in thousands, except per share data): Distributions/ Quarter Distributions/ Dividends and Year Record Date Distribution Date Dividends per share Q4 2018 February 1, 2019 February 21, 2019 $ 30,543 $ 0.164 Q1 2019 April 26, 2019 May 8, 2019 152,082 $ 0.3025 Q1 2019 May 15, 2019 May 15, 2019 98 * Q2 2019 July 26, 2019 August 7, 2019 154,146 $ 0.3075 Q2 2019 August 14, 2019 September 18, 2019 138 * Q3 2019 November 1, 2019 November 13, 2019 153,033 $ 0.3075 Q3 2019 November 14, 2019 November 14, 2019 138 * ** December 31, 2019 December 31, 2019 2,299 ** Total 2019 $ 492,477 Q4 2019 January 31, 2020 February 12, 2020 $ 148,876 $ 0.3075 * February 14, 2020 February 14, 2020 138 * Q1 2020 April 30, 2020 May 12, 2020 147,519 $ 0.3075 * May 15, 2020 May 15, 2020 137 * Total 2020 $ 296,670 * Dividends are paid in accordance with the terms of the Series A Preferred Stock as discussed in Note 13—Equity and Earnings Per Common Share. ** D istributions declared on unvested Series B Units prior to the closing date of the Transactions that were paid upon the vesting date to the holders of the Exchanged B Units. On July 15, 2020, the Board announced the declaration of a cash dividend on the shares of AM common stock of $0.3075 per share for the quarter ended June 30, 2020. The dividend will be payable on August 12, 2020 to stockholders of record as of July 30, 2020. The Board also declared a cash dividend of $138 thousand on the shares of Series A Preferred Stock of Antero Midstream Corporation to be paid on August 14, 2020 in accordance with the terms of the Series A Preferred Stock, which are discussed in Note 13—Equity and Earnings Per Common Share. As of June 30, 2020, there were dividends in the amount of thousand accumulated in arrears on the Company’s Series A Preferred Stock. |
Equity and Earnings Per Common
Equity and Earnings Per Common Share | 6 Months Ended |
Jun. 30, 2020 | |
Equity and Earnings Per Common Share | |
Equity and Earnings Per Common Share | (13) Equity and Earnings Per Common Share (a) Preferred Stock The Board authorized 100,000,000 shares of preferred stock in connection with the closing of the Transactions (see Note 3—Business Combination) on March 12, 2019, and issued 10,000 shares of preferred stock designated as "5.5% Series A Non-Voting Perpetual Preferred Stock" (the "Series A Preferred Stock"), to The Antero Foundation on that date. Dividends on the Series A Preferred Stock are cumulative from the date of original issue and payable in cash on the 45 th on (i) the liquidation preference per share of Series A Preferred Stock (as described below) and (ii) the amount of accrued and unpaid dividends for any prior dividend period on such share of Series A Preferred Stock, if any . At any time following the date of issue, in the event of a change of control, or at any time on or after March 12, 2029, the Company may redeem the Series A Preferred Stock at a price equal to per share, plus any accrued but unpaid dividends, and (ii) the fair market value of the Series A Preferred Stock. On or after March 12, 2029, the holder of each share of Series A Preferred Stock (other than The Antero Foundation) may convert such shares, at any time and from time to time, at the option of the holder into a number of shares of AM common stock equal to the conversion ratio in effect on the applicable conversion date, subject to certain limitations. The Series A Preferred Stock ranks senior to the AM common stock as to dividend rights, as well as with respect to rights upon liquidation, winding-up or dissolution of the Company. Holders of the Series A Preferred Stock do not have any voting rights in the Company, except as required by law, or any preemptive rights. (b) Weighted Average Shares Outstanding The following is a reconciliation of the Company’s basic weighted average shares outstanding to diluted weighted average shares outstanding during the periods presented: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2019 2020 2019 2020 Basic weighted average number of shares outstanding 506,816 476,836 381,045 479,969 Add: Dilutive effect of restricted stock units 78 40 108 — Add: Dilutive effect of Series A preferred stock 873 1,961 873 — Diluted weighted average number of shares outstanding 507,767 478,837 382,026 479,969 Weighted average number of outstanding equity awards excluded from calculation of diluted earnings per common share (1): Restricted stock units — — — 77 Preferred shares — — — 1,961 (1) The potential dilutive effects of these awards were excluded from the computation of earnings (loss) per common shares—assuming dilution because the inclusion of these awards would have been anti-dilutive. (c) Earnings Per Common Share Earnings per common share—basic for each period is computed by dividing net income (loss) attributable to Antero Midstream Corporation by the basic weighted average number of shares of AM common stock outstanding during the period. Earnings per common share—assuming dilution for each period is computed after giving consideration to the potential dilution from outstanding equity awards, calculated using the treasury stock method. During periods in which the Company incurs a net loss, diluted weighted average shares outstanding are equal to basic weighted average shares outstanding because the effect of all equity awards is anti-dilutive. Three Months Ended June 30, Six Months Ended June 30, (in thousands, except per share amounts) 2019 2020 2019 2020 Net income (loss) $ 69,274 88,441 78,922 (304,492) Less preferred stock dividends (139) (137) (168) (275) Net income (loss) available to common shareholders $ 69,135 88,304 78,754 (304,767) Net income (loss) per share–basic $ 0.14 0.19 0.21 (0.63) Net income (loss) per share–diluted $ 0.14 0.18 0.21 (0.63) Weighted average common shares outstanding–basic 506,816 476,836 381,045 479,969 Weighted average common shares outstanding–diluted 507,767 478,837 382,026 479,969 |
Fair Value Measurement
Fair Value Measurement | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Measurement | |
Fair Value Measurement | (14) Fair Value Measurement Business Combination As the Transactions were accounted for under the acquisition method of accounting, the Company estimated the fair value of assets acquired and liabilities assumed at March 12, 2019. See Note 3—Business Combination. In connection with the Transactions, the Company, among other things, issued shares of common stock valued at the closing market price of the common shares at the effective time of the Transactions, which was a Level 1 measurement. The Company used the discounted cash flow approach, which is an income statement technique, to estimate the fair value of the customer relationships and investments in unconsolidated affiliates using a weighted-average cost of capital of 14.1% as of March 12, 2019, which is based on significant inputs not observable in the market, and thus represents a Level 3 measurement within the fair value hierarchy. The Company also used this approach in combination with the cost approach to estimate the fair value of property and equipment whereby certain property and equipment was adjusted for recent purchases of similar items, economic and functional obsolescence, location, normal useful lives, and capacity (if applicable). To estimate the fair value of the long-term debt, the Company used Level 2 market data inputs. Goodwill The Company estimated the fair value of its assets in performing its goodwill analysis in the first quarter of 2020. The Company utilized a combination of approaches to discounted cash flow approach, comparable company method and the market value approach. The Company used a weighted-average cost of capital of Property and equipment The Company estimated the undiscounted future cash flow projections to assess its property and equipment for impairment. The carrying values of certain freshwater permanent buried pipelines and equipment and fresh water surface pipelines and equipment were deemed not recoverable. As a result, the carrying values have been reduced to the estimated fair values, which are based on discounted future cash flows using assumptions as to revenues, costs, and a discount rate typical of third-party market participants of Contingent Acquisition Consideration In connection with Antero Resources’ contribution of Antero Water and certain water handling assets to Antero Midstream Partners in September 2015 (the “Water Acquisition”), Antero Midstream Partners agreed to pay Antero Resources (a) $125 million in cash if Antero Midstream Partners delivered 176,295,000 barrels or more of fresh water during the period between January 1, 2017 and December 31, 2019 and (b) an additional $125 million in cash if Antero Midstream Partners delivers 219,200,000 barrels or more of fresh water during the period between January 1, 2018 and December 31, 2020. This contingent consideration liability is valued based on Level 3 inputs related to expected average volumes and weighted average cost of capital. In January 2020, Antero Midstream Partners paid Antero Resources $125 million and, as of June 30, 2020, no additional contingent acquisition consideration is expected to be earned. 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. Senior Unsecured Notes As of June 30, 2020 the fair value of the Company’s 2024 Notes, 2027 Notes and 2028 Notes was approximately $553 million, $520 million and $517 million, respectively, based on Level 2 market data inputs. Other Assets and Liabilities The carrying values of accounts receivable and accounts payable at December 31, 2019 and June 30, 2020 approximated fair value because of their short-term nature. The carrying value of the amounts under the Credit Facility at December 31, 2019 and June 30, 2020 approximated fair value because the variable interest rates are reflective of current market conditions. |
Investments in Unconsolidated A
Investments in Unconsolidated Affiliates | 6 Months Ended |
Jun. 30, 2020 | |
Investments in Unconsolidated Affiliates | |
Investments in Unconsolidated Affiliates | (15) Investments in Unconsolidated Affiliates Investment in Antero Midstream Partners Prior to the closing of the Transactions, AMGP did not consolidate Antero Midstream Partners, and AMGP’s share of Antero Midstream Partners’ earnings as a result of AMGP’s ownership of the IDRs was accounted for using the equity method of accounting. AMGP recognized distributions earned from Antero Midstream Partners as “Equity in earnings of unconsolidated affiliates” on its statement of operations in the period in which they were earned and were allocated to AMGP’s capital account. AMGP’s long-term interest in the IDRs on the balance sheet was recorded in “Investment in unconsolidated affiliates.” The ownership of the general partner interests and IDRs did not provide AMGP with any claim to the assets of AMGP other than the balance in its Antero Midstream Partners capital account. Income related to the IDRs was recognized as earned and increased AMGP’s capital account and equity investment. When these distributions were paid to AMGP, they reduced its capital account and its equity investment in Antero Midstream Partners. As a result of the Transactions, Antero Midstream Corporation assumed financial control of Antero Midstream Partners and Antero Midstream Partners is now consolidated (see Note 3—Business Combination). Investment in Stonewall and MarkWest Joint Venture The Company has a 15% equity interest in a gathering system of Stonewall Gas Gathering LLC (“Stonewall”), which operates a 67-mile pipeline on which Antero Resources is an anchor shipper. The Company has a 50% equity interest in the joint venture (the “Joint Venture”) to develop processing and fractionation assets with MarkWest Energy Partners, L.P. (“MarkWest”), a wholly owned subsidiary of MPLX, LP. The Joint Venture was formed to develop processing and fractionation assets in Appalachia. MarkWest operates the Joint Venture assets, which consist of processing plants in West Virginia and a one The Company’s net income (loss) includes its proportionate share of the net income of the Joint Venture and Stonewall. When the Company records its proportionate share of net income, it increases equity income in the unaudited condensed consolidated statements of operations and comprehensive income and the carrying value of that investment on its balance sheet. When distributions on the Company’s proportionate share of net income are received, they are recorded as reductions to the carrying value of the investment on the balance sheet and are classified as cash inflows from operating activities in accordance with the nature of the distribution approach under ASC 230. The Company uses the equity method of accounting to account for its investments in Stonewall and the Joint Venture because it exercises significant influence, but not control, over the entities. The Company’s judgment regarding the level of influence over its equity investments includes considering key factors such as its ownership interest, representation on the applicable board of directors and participation in policy-making decisions of Stonewall and the Joint Venture. The following table is a reconciliation of the Company’s investments in these unconsolidated affiliates: Antero Total Investment Midstream MarkWest in Unconsolidated (in thousands) Partners LP Stonewall Joint Venture Affiliates Balance at December 31, 2018 $ 43,492 — — 43,492 Distributions from unconsolidated affiliates (43,492) — — (43,492) Balance at March 12, 2019 — — — — Investments in unconsolidated affiliates acquired from Antero Midstream Partners — 142,071 426,214 568,285 Additional Investments — — 154,359 154,359 Equity in net income of unconsolidated affiliates (1) — 4,117 47,198 51,315 Distributions from unconsolidated affiliates — (5,730) (58,590) (64,320) Balance at December 31, 2019 — 140,458 569,181 709,639 Additional investments — — 21,988 21,988 Equity in net income of unconsolidated affiliates (1) — 3,160 36,864 40,024 Distributions from unconsolidated affiliates — (4,485) (37,343) (41,828) Balance at June 30, 2020 $ — 139,133 590,690 729,823 (1) As adjusted for the amortization of the difference between the cost of the equity investments in Stonewall and the Joint Venture and the amount of the underlying equity in the net assets of Stonewall and the Joint Venture as of the date of the Transactions. |
Reporting Segments
Reporting Segments | 6 Months Ended |
Jun. 30, 2020 | |
Reporting Segments | |
Reporting Segments | (16) Reporting Segments Prior to the closing of the Transactions, AMGP had no reporting segment results. Following the completion of the Transactions, the Company’s operations, which are located in the United States, are organized into 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 fresh water from sources including the Ohio River, local reservoirs and several regional waterways. The water handling segment also includes the Clearwater Facility that was placed in service in 2018 and idled in September 2019 (See Note 4—Clearwater Facility Idling), as well as other fluid handling services, which includes high rate transfer, wastewater transportation, disposal and treatment. See Note 8—Property and Equipment. 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. The summarized operating results and assets of the Company’s reportable segments were as follows for the three and six months ended June 30, 2019 and 2020: Gathering and Water Consolidated (in thousands) Processing Handling Unallocated (1) Total Three months ended June 30, 2019 Revenues: Revenue–Antero Resources $ 168,925 95,181 — 264,106 Revenue–third-party — 46 — 46 Amortization of customer contracts (2,402) (6,132) — (8,534) Total revenues 166,523 89,095 — 255,618 Operating expenses: Direct operating 12,377 51,621 — 63,998 General and administrative (excluding equity-based compensation) 7,335 3,958 1,786 13,079 Equity-based compensation 2,286 926 18,331 21,543 Impairment of property and equipment 592 2 — 594 Depreciation 12,721 23,726 — 36,447 Accretion and change in fair value of contingent acquisition consideration — 2,297 — 2,297 Accretion of asset retirement obligations — 69 — 69 Total expenses 35,311 82,599 20,117 138,027 Operating income $ 131,212 6,496 (20,117) 117,591 Equity in earnings of unconsolidated affiliates $ 13,623 — — 13,623 Total assets $ 4,916,854 1,844,385 7,770 6,769,009 Additions to property and equipment $ 81,529 43,656 — 125,185 (1) Certain expenses that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis. Gathering and Water Consolidated (in thousands) Processing Handling Unallocated (1) Total Three months ended June 30, 2020 Revenues: Revenue–Antero Resources $ 173,991 63,351 — 237,342 Amortization of customer relationships (9,239) (8,367) — (17,606) Total revenues 164,752 54,984 — 219,736 Operating expenses: Direct operating 14,059 28,008 — 42,067 General and administrative (excluding equity-based compensation) 5,440 2,694 1,591 9,725 Facility idling — 2,475 — 2,475 Equity-based compensation 2,266 431 — 2,697 Depreciation 14,406 13,339 — 27,745 Accretion of asset retirement obligations — 61 — 61 Loss on asset sale — 240 — 240 Total expenses 36,171 47,248 1,591 85,010 Operating income $ 128,581 7,736 (1,591) 134,726 Equity in earnings of unconsolidated affiliates $ 20,947 — — 20,947 Total assets $ 4,387,102 1,149,355 178,598 5,715,055 Additions to property and equipment $ 49,278 6,153 — 55,431 (1) Certain expenses that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis. Gathering and Water Consolidated (in thousands) Processing Handling Unallocated (1) Total Six months ended June 30, 2019 Revenues: Revenue–Antero Resources $ 202,459 117,532 — 319,991 Revenue–third-party — 50 — 50 Amortization of customer relationships (2,903) (7,412) — (10,315) Total revenues 199,556 110,170 — 309,726 Operating expenses: Direct operating 15,312 63,668 — 78,980 General and administrative (excluding equity-based compensation) 8,355 4,532 8,578 21,465 Equity-based compensation 2,663 1,139 29,164 32,966 Impairment of property and equipment 592 2 — 594 Depreciation 15,281 28,816 — 44,097 Accretion and change in fair value of contingent acquisition consideration — 3,346 — 3,346 Accretion of asset retirement obligations — 79 — 79 Total operating expenses 42,203 101,582 37,742 181,527 Operating income $ 157,353 8,588 (37,742) 128,199 Equity in earnings of unconsolidated affiliates $ 16,503 — — 16,503 Total assets $ 4,916,854 1,844,385 7,770 6,769,009 Additions to property and equipment $ 89,206 51,984 — 141,190 (1) Certain expenses that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis. Gathering and Water Consolidated (in thousands) Processing Handling Unallocated (1) Total Six months ended June 30, 2020 Revenues: Revenue–Antero Resources $ 337,120 161,535 — 498,655 Amortization of customer relationships (18,477) (16,734) — (35,211) Total revenues 318,643 144,801 — 463,444 Operating expenses: Direct operating 27,450 63,345 — 90,795 General and administrative (excluding equity-based compensation) 10,484 5,599 3,841 19,924 Facility idling — 11,153 — 11,153 Impairment of goodwill 575,461 — — 575,461 Impairment of property and equipment — 89,083 — 89,083 Equity-based compensation 4,799 986 250 6,035 Depreciation 27,456 27,632 — 55,088 Accretion of asset retirement obligations — 103 — 103 Loss on asset sale — 240 — 240 Total operating expenses 645,650 198,141 4,091 847,882 Operating loss $ (327,007) (53,340) (4,091) (384,438) Equity in earnings of unconsolidated affiliates $ 40,024 — — 40,024 Total assets $ 4,387,102 1,149,355 178,598 5,715,055 Additions to property and equipment, net $ 103,937 19,477 — 123,414 (1) Certain expenses that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | (a) Basis of Presentation These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) applicable to interim financial information and should be read in the context of the Company’s December 31, 2019 consolidated financial statements and notes thereto for a more complete understanding of the Company’s operations, financial position, and accounting policies. The Company’s December 31, 2019 consolidated financial statements were included in the Company’s 2019 Annual Report on Form 10-K, which was filed with the SEC. These unaudited condensed consolidated financial statements of the Company 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 unaudited condensed consolidated financial statements include all adjustments (consisting of normal and recurring accruals) considered necessary to present fairly the Company’s financial position as of December 31, 2019 and June 30, 2020, the results of the Company’s operations for the three and six months ended June 30, 2019 and 2020, and its cash flows for the six months ended June 30, 2019 and 2020. The Company has no items of other comprehensive income (loss); therefore, net income (loss) is equal to comprehensive income (loss). Certain costs of doing business incurred and charged to the Company by Antero Resources have been reflected in the accompanying unaudited condensed consolidated financial statements. These costs include general and administrative expenses provided to the Company by Antero Resources in exchange for: ● business services, such as payroll, accounts payable and facilities management; ● corporate services, such as finance and accounting, legal, human resources, investor relations and public and regulatory policy; and ● employee compensation, including equity-based compensation. Transactions between the Company and Antero Resources have been identified in the unaudited condensed consolidated financial statements (see Note 6—Transactions with Affiliates). |
Principles of Consolidation | (b) Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include (i) for the period prior to March 13, 2019, the accounts of AMGP and its consolidated subsidiaries, which did not include Antero Midstream Partners and its subsidiaries, and (ii) for the period beginning on March 13, 2019, the accounts of Antero Midstream Corporation and its consolidated subsidiaries, including Antero Midstream Partners and its subsidiaries, which were acquired in the Transactions. See Note 3—Business Combination. All significant intercompany accounts and transactions have been eliminated in the Company’s unaudited condensed consolidated financial statements. |
Revenue Recognition | (c) Revenue Recognition The Company, through Antero Midstream Partners and its affiliates, provides gathering, compression and water handling services under fee-based contracts primarily based on throughput or at cost plus a margin. Certain of these contracts contain operating leases of the Company’s assets under GAAP. Under these arrangements, the Company receives fees for gathering, compression services and water handling services. The revenue the Company earns from these arrangements is directly related to (i) in the case of natural gas gathering and compression, the volumes of metered natural gas that it gathers, compresses and delivers to natural gas compression sites or other transmission delivery points, (ii) in the case of fresh water services, the quantities of fresh water delivered to its customers for use in their well completion operations, (iii) in the case of wastewater treatment services performed by the Company prior to idling of the Clearwater Facility (as defined below) in September 2019, the quantities of wastewater treated for its customers, (iv) in the case of wastewater services provided by third parties, the third-party costs the Company incurs plus or (v) in the case of flowback and produced water treatment performed by the Company, a cost of service fee based on the costs incurred by the Company. The Company recognizes revenue when it satisfies a performance obligation by delivering a service to a customer or the use of leased assets to a customer. The Company includes lease revenue within revenues by service. See Note 7—Revenue. |
Use of Estimates | (d) Use of Estimates The preparation of the unaudited condensed consolidated financial statements and notes in conformity with GAAP requires that management formulate estimates and assumptions that affect revenues, expenses, assets, liabilities and the disclosure of contingent liabilities. Items subject to estimates and assumptions include the useful lives of property and equipment, the valuation of assets and liabilities acquired from Antero Midstream Partners, as well as the valuation of accrued liabilities, among others. Although management believes these estimates are reasonable, actual results could differ from these estimates. |
Cash and Cash Equivalents | (e) Cash and Cash Equivalents The Company considers all liquid investments purchased with an initial maturity of three months or less to be cash equivalents. The carrying value of cash and cash equivalents approximates fair value due to the short-term nature of these instruments. |
Property and Equipment | (f) Property and Equipment Property and equipment primarily consists of gathering pipelines, compressor stations and the wastewater treatment facility and related landfill (collectively, the “Clearwater Facility”) previously used for the disposal of salt therefrom, other flowback and produced water treatment facilities, and fresh water delivery pipelines and facilities stated at historical cost less accumulated depreciation, amortization and impairment. The Company capitalizes construction-related direct labor and material costs. Maintenance and repair costs are expensed as incurred. Depreciation of property and equipment is computed using the straight-line method over the estimated useful lives and salvage values of assets. The depreciation of fixed assets recorded under operating lease agreements is included in depreciation expense. Uncertainties that may impact these estimates of useful lives include, among others, changes in laws and regulations relating to environmental matters, including air and water quality, restoration and abandonment requirements, economic conditions, and supply and demand for the Company’s services in the areas in which it operates. When assets are placed into service, management makes estimates with respect to useful lives and salvage values that management believes are reasonable. Amortization of landfill airspace consists of the amortization of landfill capital costs, including those that have been incurred and capitalized and estimated future costs for landfill development and construction, and the amortization of asset retirement costs arising from landfill final capping, closure, and post-closure obligations. Amortization expense is recorded on a units-of-consumption basis, applying cost as a rate per-cubic yard. The rate per-cubic yard is calculated by dividing each component of the amortizable basis of the landfill by the number of cubic yards needed to fill the corresponding asset’s airspace. Landfill capital costs and closure and post-closure asset retirement costs are generally incurred to support the operation of the landfill over its entire operating life and are, therefore, amortized on a per-cubic yard basis using a landfill’s total airspace capacity. Estimates of disposal capacity and future development costs are created using input from independent engineers and internal technical teams and are reviewed at least annually. The Company evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying values of the assets may not be recoverable. Generally, the basis for making such assessments is undiscounted future cash flow projections for the assets being assessed. If the carrying values of the assets are deemed not recoverable, the carrying values are reduced to the estimated fair values, which are based on discounted future cash flows using assumptions as to revenues, costs, and discount rates typical of third-party market participants, which is a Level 3 fair value measurement. The Company recognized an impairment with respect to the freshwater delivery system during the six months ended June 30, 2020. |
Asset Retirement Obligations | (g) Asset Retirement Obligations The Company’s asset retirement obligations include its obligation to close, maintain, and monitor landfill cells and support facilities. After the entire landfill reaches capacity and is certified closed, the Company must continue to maintain and monitor the landfill for a post-closure period, which generally extends for . The Company records the fair value of its landfill retirement obligations as a liability in the period in which the regulatory obligation to retire a specific asset is triggered. For the Company’s individual landfill cells, the required closure and post-closure obligations under the terms of its permits and its intended operation of the landfill cell are triggered and recorded when the cell is placed into service and salt is initially disposed in the landfill cell. The fair value is based on the total estimated costs to close the landfill cell and perform post-closure activities once the landfill cell has reached capacity and is no longer accepting salt. Retirement obligations are increased each year to reflect the passage of time by accreting the balance at the weighted average credit-adjusted risk-free rate that is used to calculate the recorded liability, with accretion charged to direct costs. Actual cash expenditures to perform closure and post-closure activities reduce the retirement obligation liabilities as incurred. After initial measurement, asset retirement obligations are adjusted at the end of each period to reflect changes, if any, in the estimated future cash flows underlying the obligation. Landfill retirement assets are capitalized as the related retirement obligations are incurred, and are amortized on a units-of-consumption basis as the disposal capacity is consumed. Asset retirement obligations are recorded for fresh water impoundments and waste water pits when an abandonment date is identified. The Company records the fair value of its freshwater impoundment and waste water pit retirement obligations as liabilities in the period in which the regulatory obligation to retire a specific asset is triggered. The fair value is based on the total reclamation costs of the assets. Retirement obligations are increased each year to reflect the passage of time by accreting the balance at the weighted average credit-adjusted risk-free rate that is used to calculate the recorded liability, with accretion charged to direct costs. Actual cash expenditures to perform remediation activities reduce the retirement obligation liabilities as incurred. After initial measurement, asset retirement obligations are adjusted at the end of each period to reflect changes, if any, in the estimated future cash flows underlying the obligation. Fresh water impoundments and wastewater pit retirement assets are capitalized as the related retirement obligations are incurred, and are amortized on a straight-line basis until reclamation. The Company is under no legal obligations, neither contractually nor under the doctrine of promissory estoppel, to restore or dismantle its gathering pipelines, compressor stations, water delivery pipelines, flowback and produced water facilities and the Clearwater Facility upon abandonment. See Note 4—Clearwater Facility Idling. |
Equity-Based Compensation | (h) Equity-Based Compensation The Company’s unaudited condensed consolidated financial statements include equity-based compensation costs related to awards granted by its own plans, as in place before and after the Transactions, as well as costs allocated by Antero Resources for grants made prior to the Transactions. Costs allocated from Antero Resources are offset to additional paid in capital on the unaudited condensed consolidated balance sheet. See Note 6—Transactions with Affiliates for additional information regarding Antero Resources’ allocation of expenses to the Company. For awards granted under its own plan, the Company recognizes compensation cost related to all equity-based awards in the financial statements based on the estimated grant date fair value. The Company is to grant various types of equity-based compensation awards, including stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, dividend equivalent awards and other types of awards. The grant date fair values of such awards are determined based on the type of award and may utilize market prices on the date of grant, Black-Scholes option-pricing model, Monte Carlo simulations or other acceptable valuation methodologies, as appropriate for the type of equity-based award. Compensation cost is recognized ratably over the applicable vesting or service period. Forfeitures are accounted for as they occur by reversing the expense previously recognized for awards that were forfeited during the period. See Note 11—Equity-Based Compensation. |
Income Taxes | (i) Income Taxes The Company recognizes deferred tax assets and liabilities for temporary differences resulting from net operating loss carryforwards for income tax purposes and the differences between the financial statement and tax basis of assets and liabilities. The effect of changes in tax laws or tax rates is recognized in income during the period such changes are enacted. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. The Company regularly reviews its tax positions in each significant taxing jurisdiction during the process of evaluating its tax provision. The Company makes adjustments to its 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. In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted. The CARES Act allows corporations with net operating losses (“NOLs”) incurred in 2018, 2019, and 2020 to carry back such NOLs to each of the five years preceding the year of the NOLs, beginning with the earliest year in which there was taxable income, and claim an income tax refund in the applicable carryback years. As a result of this NOLs carryback provision in the CARES Act, the Company was able to recognize an income tax refund receivable in March 2020 of $55 million, including $11 million in current income tax benefit and $44 million of previously recognized deferred income tax benefit. As of June 30, 2020, the Company had received $39 million of this refund. |
Fair Value Measures | (j) Fair Value Measures The Financial Accounting Standards Board (the “FASB”) ASC Topic 820, Fair Value Measurements and Disclosures the Company estimates 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. The Company’s 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 indirectly. The carrying values on the unaudited condensed balance sheet of the Company’s cash and cash equivalents, accounts receivable—Antero Resources, accounts receivable—third party, other current assets, accounts payable—Antero Resources, accounts payable—third party, accrued liabilities and other current liabilities approximate fair values due to their short-term maturities. The assets and liabilities of Antero Midstream Partners were recorded at fair value as of the acquisition date, March 12, 2019 (see Note 3—Business Combination). Additionally, the Company uses certain fair valuation techniques in performing its goodwill impairment test described below and in determining the fair value of the freshwater delivery system, both of which were impaired in the first quarter of 2020. |
Investments in Unconsolidated Affiliates | (k) Investments in Unconsolidated Affiliates The Company uses the equity method to account for its investments in companies if the investment provides the Company with the ability to exercise significant influence over, but not control of, the operating and financial policies of the investee. The Company’s unaudited condensed consolidated net income (loss) includes the Company’s proportionate share of the net income or loss of such companies. The Company’s judgment regarding the level of influence over each equity method investee includes considering key factors such as the Company’s ownership interest, representation on the board of directors and participation in policy-making decisions of the investee and material intercompany transactions. See Note 15—Investments in Unconsolidated Affiliates. |
Business Combinations | (l) Business Combinations The Company recognizes and measures the assets acquired and liabilities assumed in a business combination based on their estimated fair values at the acquisition date, with any remaining difference recorded as goodwill. For acquisitions, management engages an independent valuation specialist, as applicable, to assist with the determination of fair value of the assets acquired, liabilities assumed, and goodwill, based on recognized business valuation methodologies. If the initial accounting for the business combination is incomplete by the end of the reporting period in which the acquisition occurs, an estimate will be recorded. Subsequent to the acquisition, and not later than one year from the acquisition date, the Company will record any material adjustments to the initial estimate based on new information obtained that would have existed as of the acquisition date. An adjustment that arises from information obtained that did not exist as of the date of the acquisition will be recorded in the period of the adjustment. Acquisition-related costs are expensed as incurred in connection with each business combination. See Note 3—Business Combination. |
Goodwill and Intangible Assets | (m) Goodwill and Intangible Assets Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired in the acquisition of a business. Goodwill is not amortized, but rather is tested for impairment annually in the fourth quarter and when events or changes in circumstances indicate that the fair value of a reporting unit with goodwill has been reduced below its carrying value. The impairment test requires allocating goodwill and other assets and liabilities to reporting units. The fair value of each reporting unit is determined and compared to the carrying value of the reporting unit. The fair value is calculated using the expected present value of future cash flows method. Significant assumptions used in the cash flow forecasts include future net operating margins, future volumes, discount rates and future capital requirements. If the fair value of the reporting unit is less than the carrying value, including goodwill, the excess of the book value over the fair value of goodwill is charged to net income as an impairment expense. Amortization of intangible assets with definite lives is calculated using the straight-line method, which is reflective of the benefit pattern in which the estimated economic benefit is expected to be received over the estimated useful life of the intangible asset. Intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the intangible asset may not be recoverable. If the sum of the expected undiscounted future cash flows related to the asset is less than the carrying amount of the asset, an impairment loss is recognized based on the fair value of the asset. See Note 4— and Note 5—Goodwill and Intangibles. |
Treasury Share Retirement | (n ) Treasury Share Retirement The Company periodically retires treasury shares acquired through share repurchases and returns those shares to the status of authorized but unissued. When treasury shares are retired, the Company’s policy is to allocate the excess of the repurchase price over the par value of shares acquired first, to additional paid-in capital, and then, to accumulated earnings. The portion allocable to additional paid-in capital is determined by applying a percentage, determined by dividing the number of shares to be retired by the number of shares outstanding, to the balance of additional paid-in capital as of retirement . |
Business Combination (Tables)
Business Combination (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Business Combination | |
Schedule of components of fair value of consideration transferred | The components of the fair value of consideration transferred are as follows (in thousands): Fair value of shares of AM common stock issued (1) $ 4,017,881 Cash 598,709 Total fair value of consideration transferred $ 4,616,590 (1) The fair value of each share of AM common stock issued in connection with the Transactions was determined to be $12.54 , the closing price of AMGP common shares on March 12, 2019. |
Schedule of estimated fair value of assets acquired and liabilities assumed | The final purchase price allocation of the Transactions are summarized in the table below. The fair value of assets acquired and liabilities assumed at March 12, 2019, were as follows (in thousands): Cash and cash equivalents $ 619,532 Accounts receivable–Antero Resources 142,312 Accounts receivable–third party 117 Other current assets 1,150 Property and equipment, net 3,371,427 Investments in unconsolidated affiliates 568,285 Customer relationships 1,567,000 Other assets, net 42,887 Total assets acquired 6,312,710 Accounts payable–Antero Resources 3,316 Accounts payable–third party 30,674 Accrued liabilities 87,021 Other current liabilities 537 Long-term debt 2,364,935 Contingent acquisition consideration 116,924 Other liabilities 8,524 Total liabilities assumed 2,611,931 Net assets acquired, excluding goodwill 3,700,779 Goodwill 915,811 Net assets acquired $ 4,616,590 |
Clearwater Facility Idling (Tab
Clearwater Facility Idling (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Clearwater Facility Idling | |
Schedule of Clearwater Facility impairment | Impairment of property and equipment $ 408,882 Impairment of goodwill 42,290 Impairment of customer relationships 11,871 Total impairment expense $ 463,043 |
Goodwill and Intangibles (Table
Goodwill and Intangibles (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangibles | |
Schedule of Finite-Lived Intangible Assets | The changes in the carrying amount of customer relationships for the six months ended June 30, 2020 were as follows (in thousands): Customer relationships as of December 31, 2019 $ 1,498,119 Accumulated amortization (35,211) Customer relationships as of June 30, 2020 $ 1,462,908 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Future amortization expense is as follows (in thousands): Remainder of year ending December 31, 2020 $ 35,463 Year ending December 31, 2021 70,672 Year ending December 31, 2022 70,672 Year ending December 31, 2023 70,672 Year ending December 31, 2024 70,672 Year ending December 31, 2025 70,672 Thereafter 1,074,085 Total $ 1,462,908 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue | |
Schedule of minimum revenue amounts under the minimum volume commitments | Minimum revenue amounts under the gathering and compression minimum volume commitments are as follows (in thousands): Remainder of 2020 $ 80,262 Year ending December 31, 2021 235,901 Year ending December 31, 2022 235,901 Year ending December 31, 2023 235,901 Year ending December 31, 2024 236,547 Year ending December 31, 2025 222,858 Thereafter 499,138 Total $ 1,746,508 |
Schedule of disaggregation of revenue | Three Months Ended June 30, Six Months Ended June 30, Segment to which (in thousands) 2019 2020 2019 2020 revenues relate Revenue from contracts with customers Type of service Gathering—low pressure $ 78,807 85,791 94,634 166,939 Gathering and Processing (1) Gathering—low pressure rebate — (12,000) — (24,000) Gathering and Processing (1) Gathering—high pressure 47,749 51,577 57,032 100,490 Gathering and Processing (1) Compression 42,369 48,623 50,793 93,691 Gathering and Processing (1) Fresh water delivery 43,429 36,900 54,204 102,718 Water Handling Wastewater treatment 12,011 — 14,441 — Water Handling Other fluid handling 39,787 26,451 48,937 58,817 Water Handling Amortization of customer relationships (2) (2,402) (9,239) (2,903) (18,477) Gathering and Processing Amortization of customer relationships (2) (6,132) (8,367) (7,412) (16,734) Water Handling Total $ 255,618 219,736 309,726 463,444 Type of contract Per Unit Fixed Fee $ 168,925 185,991 202,459 361,120 Gathering and Processing (1) Gathering—low pressure rebate — (12,000) — (24,000) Gathering and Processing (1) Per Unit Fixed Fee 55,440 36,900 68,645 102,718 Water Handling Cost plus 3% 39,787 23,742 48,937 54,687 Water Handling Cost of service fee — 2,709 — 4,130 Water Handling Amortization of customer relationships (2) (2,402) (9,239) (2,903) (18,477) Gathering and Processing Amortization of customer relationships (2) (6,132) (8,367) (7,412) (16,734) Water Handling Total $ 255,618 219,736 309,726 463,444 (1) Revenue related to the gathering and processing segment is classified as lease income related to the gathering system. (2) Fair value of customer contracts acquired as part of the Transactions discussed in Note 3—Business Combination. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Property and Equipment | |
Schedule of investment in property and equipment | Estimated December 31, June 30, (in thousands) useful lives 2019 2020 Land n/a $ 23,549 23,582 Gathering systems and facilities 40-50 years (1) 2,375,241 2,577,408 Permanent buried pipelines and equipment 7-20 years 602,230 537,173 Surface pipelines and equipment 1-7 years 48,594 42,919 Landfill n/a (2) 1,244 1,244 Heavy trucks and equipment 3-5 years 6,617 5,919 Above ground storage tanks 5-10 years 3,418 1,868 Construction-in-progress n/a 300,165 163,575 Total property and equipment 3,361,058 3,353,688 Less accumulated depreciation (87,648) (104,045) Property and equipment, net $ 3,273,410 3,249,643 (1) Gathering systems and facilities are recognized as a single-leased asset with no residual value. (2) Amortization of landfill costs is recorded over the life of the landfill on a units-of-consumption basis. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Long-Term Debt. | |
Schedule of long-term debt | (Unaudited) December 31, June 30, (in thousands) 2019 2020 Credit Facility (a) $ 959,500 1,155,000 5.375% senior notes due 2024 (b) 652,600 652,600 5.75% senior notes due 2027 (c) 653,250 653,250 5.75% senior notes due 2028 (d) 650,000 650,000 Net unamortized debt issuance costs (23,101) (22,065) Total long-term debt $ 2,892,249 3,088,785 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accrued Liabilities | |
Schedule of accrued liabilities | Accrued liabilities as of December 31, 2019 and June 30, 2020 consisted of the following items: (Unaudited) December 31, June 30, (in thousands) 2019 2020 Capital expenditures $ 27,427 16,284 Operating expenses 24,980 9,839 Interest expense 44,440 40,524 Other 7,341 5,637 Total accrued liabilities $ 104,188 72,284 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity-Based Compensation | |
Summary of restricted stock unit awards activity | Weighted Average Aggregate Number of grant date intrinsic value units fair value (in thousands) Total AM LTIP RSUs awarded and unvested—December 31, 2019 1,275,990 $ 14.38 $ 9,685 Granted 985,269 $ 7.23 Vested (454,933) $ 13.63 Forfeited (47,367) $ 14.43 Total AM LTIP RSUs awarded and unvested—June 30, 2020 1,758,959 $ 10.45 $ 8,971 |
Cash Distributions and Divide_2
Cash Distributions and Dividends (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Cash Distributions and Dividends | |
Schedule of quarterly distributions and dividends paid | The following table details the amount of distributions and dividends paid with respect to the quarter indicated (in thousands, except per share data): Distributions/ Quarter Distributions/ Dividends and Year Record Date Distribution Date Dividends per share Q4 2018 February 1, 2019 February 21, 2019 $ 30,543 $ 0.164 Q1 2019 April 26, 2019 May 8, 2019 152,082 $ 0.3025 Q1 2019 May 15, 2019 May 15, 2019 98 * Q2 2019 July 26, 2019 August 7, 2019 154,146 $ 0.3075 Q2 2019 August 14, 2019 September 18, 2019 138 * Q3 2019 November 1, 2019 November 13, 2019 153,033 $ 0.3075 Q3 2019 November 14, 2019 November 14, 2019 138 * ** December 31, 2019 December 31, 2019 2,299 ** Total 2019 $ 492,477 Q4 2019 January 31, 2020 February 12, 2020 $ 148,876 $ 0.3075 * February 14, 2020 February 14, 2020 138 * Q1 2020 April 30, 2020 May 12, 2020 147,519 $ 0.3075 * May 15, 2020 May 15, 2020 137 * Total 2020 $ 296,670 * Dividends are paid in accordance with the terms of the Series A Preferred Stock as discussed in Note 13—Equity and Earnings Per Common Share. ** D istributions declared on unvested Series B Units prior to the closing date of the Transactions that were paid upon the vesting date to the holders of the Exchanged B Units. |
Equity and Earnings Per Commo_2
Equity and Earnings Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity and Earnings Per Common Share | |
Schedule of weighted average shares outstanding | Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2019 2020 2019 2020 Basic weighted average number of shares outstanding 506,816 476,836 381,045 479,969 Add: Dilutive effect of restricted stock units 78 40 108 — Add: Dilutive effect of Series A preferred stock 873 1,961 873 — Diluted weighted average number of shares outstanding 507,767 478,837 382,026 479,969 Weighted average number of outstanding equity awards excluded from calculation of diluted earnings per common share (1): Restricted stock units — — — 77 Preferred shares — — — 1,961 (1) The potential dilutive effects of these awards were excluded from the computation of earnings (loss) per common shares—assuming dilution because the inclusion of these awards would have been anti-dilutive. |
Schedule of earnings per common share | Three Months Ended June 30, Six Months Ended June 30, (in thousands, except per share amounts) 2019 2020 2019 2020 Net income (loss) $ 69,274 88,441 78,922 (304,492) Less preferred stock dividends (139) (137) (168) (275) Net income (loss) available to common shareholders $ 69,135 88,304 78,754 (304,767) Net income (loss) per share–basic $ 0.14 0.19 0.21 (0.63) Net income (loss) per share–diluted $ 0.14 0.18 0.21 (0.63) Weighted average common shares outstanding–basic 506,816 476,836 381,045 479,969 Weighted average common shares outstanding–diluted 507,767 478,837 382,026 479,969 |
Investments in Unconsolidated_2
Investments in Unconsolidated Affiliates (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Investments in Unconsolidated Affiliates | |
Schedule of reconciliation of investments in unconsolidated affiliates | Antero Total Investment Midstream MarkWest in Unconsolidated (in thousands) Partners LP Stonewall Joint Venture Affiliates Balance at December 31, 2018 $ 43,492 — — 43,492 Distributions from unconsolidated affiliates (43,492) — — (43,492) Balance at March 12, 2019 — — — — Investments in unconsolidated affiliates acquired from Antero Midstream Partners — 142,071 426,214 568,285 Additional Investments — — 154,359 154,359 Equity in net income of unconsolidated affiliates (1) — 4,117 47,198 51,315 Distributions from unconsolidated affiliates — (5,730) (58,590) (64,320) Balance at December 31, 2019 — 140,458 569,181 709,639 Additional investments — — 21,988 21,988 Equity in net income of unconsolidated affiliates (1) — 3,160 36,864 40,024 Distributions from unconsolidated affiliates — (4,485) (37,343) (41,828) Balance at June 30, 2020 $ — 139,133 590,690 729,823 (1) As adjusted for the amortization of the difference between the cost of the equity investments in Stonewall and the Joint Venture and the amount of the underlying equity in the net assets of Stonewall and the Joint Venture as of the date of the Transactions. |
Reporting Segments (Tables)
Reporting Segments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Reporting Segments | |
Schedule of operating results and assets of the Company's reportable segments | Gathering and Water Consolidated (in thousands) Processing Handling Unallocated (1) Total Three months ended June 30, 2019 Revenues: Revenue–Antero Resources $ 168,925 95,181 — 264,106 Revenue–third-party — 46 — 46 Amortization of customer contracts (2,402) (6,132) — (8,534) Total revenues 166,523 89,095 — 255,618 Operating expenses: Direct operating 12,377 51,621 — 63,998 General and administrative (excluding equity-based compensation) 7,335 3,958 1,786 13,079 Equity-based compensation 2,286 926 18,331 21,543 Impairment of property and equipment 592 2 — 594 Depreciation 12,721 23,726 — 36,447 Accretion and change in fair value of contingent acquisition consideration — 2,297 — 2,297 Accretion of asset retirement obligations — 69 — 69 Total expenses 35,311 82,599 20,117 138,027 Operating income $ 131,212 6,496 (20,117) 117,591 Equity in earnings of unconsolidated affiliates $ 13,623 — — 13,623 Total assets $ 4,916,854 1,844,385 7,770 6,769,009 Additions to property and equipment $ 81,529 43,656 — 125,185 (1) Certain expenses that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis. Gathering and Water Consolidated (in thousands) Processing Handling Unallocated (1) Total Three months ended June 30, 2020 Revenues: Revenue–Antero Resources $ 173,991 63,351 — 237,342 Amortization of customer relationships (9,239) (8,367) — (17,606) Total revenues 164,752 54,984 — 219,736 Operating expenses: Direct operating 14,059 28,008 — 42,067 General and administrative (excluding equity-based compensation) 5,440 2,694 1,591 9,725 Facility idling — 2,475 — 2,475 Equity-based compensation 2,266 431 — 2,697 Depreciation 14,406 13,339 — 27,745 Accretion of asset retirement obligations — 61 — 61 Loss on asset sale — 240 — 240 Total expenses 36,171 47,248 1,591 85,010 Operating income $ 128,581 7,736 (1,591) 134,726 Equity in earnings of unconsolidated affiliates $ 20,947 — — 20,947 Total assets $ 4,387,102 1,149,355 178,598 5,715,055 Additions to property and equipment $ 49,278 6,153 — 55,431 (1) Certain expenses that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis. Gathering and Water Consolidated (in thousands) Processing Handling Unallocated (1) Total Six months ended June 30, 2019 Revenues: Revenue–Antero Resources $ 202,459 117,532 — 319,991 Revenue–third-party — 50 — 50 Amortization of customer relationships (2,903) (7,412) — (10,315) Total revenues 199,556 110,170 — 309,726 Operating expenses: Direct operating 15,312 63,668 — 78,980 General and administrative (excluding equity-based compensation) 8,355 4,532 8,578 21,465 Equity-based compensation 2,663 1,139 29,164 32,966 Impairment of property and equipment 592 2 — 594 Depreciation 15,281 28,816 — 44,097 Accretion and change in fair value of contingent acquisition consideration — 3,346 — 3,346 Accretion of asset retirement obligations — 79 — 79 Total operating expenses 42,203 101,582 37,742 181,527 Operating income $ 157,353 8,588 (37,742) 128,199 Equity in earnings of unconsolidated affiliates $ 16,503 — — 16,503 Total assets $ 4,916,854 1,844,385 7,770 6,769,009 Additions to property and equipment $ 89,206 51,984 — 141,190 (1) Certain expenses that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis. Gathering and Water Consolidated (in thousands) Processing Handling Unallocated (1) Total Six months ended June 30, 2020 Revenues: Revenue–Antero Resources $ 337,120 161,535 — 498,655 Amortization of customer relationships (18,477) (16,734) — (35,211) Total revenues 318,643 144,801 — 463,444 Operating expenses: Direct operating 27,450 63,345 — 90,795 General and administrative (excluding equity-based compensation) 10,484 5,599 3,841 19,924 Facility idling — 11,153 — 11,153 Impairment of goodwill 575,461 — — 575,461 Impairment of property and equipment — 89,083 — 89,083 Equity-based compensation 4,799 986 250 6,035 Depreciation 27,456 27,632 — 55,088 Accretion of asset retirement obligations — 103 — 103 Loss on asset sale — 240 — 240 Total operating expenses 645,650 198,141 4,091 847,882 Operating loss $ (327,007) (53,340) (4,091) (384,438) Equity in earnings of unconsolidated affiliates $ 40,024 — — 40,024 Total assets $ 4,387,102 1,149,355 178,598 5,715,055 Additions to property and equipment, net $ 103,937 19,477 — 123,414 (1) Certain expenses that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis . |
Organization (Details)
Organization (Details) - $ / shares | Mar. 12, 2019 | Jun. 30, 2020 | Dec. 31, 2019 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Series B Unit, Vested and Unvested | |||
Shares exchange ratio | 176.0041 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Mar. 31, 2020 | Jun. 30, 2020 | |
Principles of Consolidation | ||
Third party out of pocket costs reimbursement (as a percent) | 3.00% | |
Asset Retirement Obligations | ||
Post-closure period for landfill to maintain and monitor | 30 years | |
Income taxes | ||
Income tax refund receivable as a result of the CARES Act | $ 55 | |
Current income tax benefit | 11 | |
Previously recognized deferred income tax benefit | $ 44 | |
Income tax refund received | $ 39 |
Business Combination - Fair Val
Business Combination - Fair Value of Consideration Transferred (Details) $ / shares in Units, $ in Thousands | Mar. 12, 2019USD ($)$ / shares |
Components of the fair value of consideration transferred | |
Share price (in dollars per share) | $ / shares | $ 12.54 |
Antero Midstream Partners | |
Components of the fair value of consideration transferred | |
Fair value of shares of AMC common stock issued(1) | $ 4,017,881 |
Cash | 598,709 |
Total fair value of consideration transferred | $ 4,616,590 |
Business Combination - Estimate
Business Combination - Estimated Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Mar. 12, 2019 | Jun. 30, 2019 | Dec. 31, 2019 |
Estimated fair value of assets acquired and liabilities assumed | |||
Goodwill | $ 575,461 | ||
Antero Midstream Partners | |||
Estimated fair value of assets acquired and liabilities assumed | |||
Cash and cash equivalents | $ 619,532 | ||
Other current assets | 1,150 | ||
Property and equipment, net | 3,371,427 | ||
Investments in unconsolidated affiliates | 568,285 | ||
Customer relationships | 1,567,000 | ||
Other assets, net | 42,887 | ||
Total assets acquired | 6,312,710 | ||
Accrued liabilities | 87,021 | ||
Other current liabilities | 537 | ||
Long-term debt | 2,364,935 | ||
Contingent acquisition consideration | 116,924 | ||
Other liabilities | 8,524 | ||
Total liabilities assumed | 2,611,931 | ||
Net assets acquired, excluding goodwill | 3,700,779 | ||
Goodwill | 915,811 | ||
Net assets acquired | $ 4,616,590 | ||
Acquisition-related costs | $ 6,000 | ||
Weighted average amortization period | 23 years | ||
Goodwill | $ 915,000 | ||
Antero Midstream Partners | Antero Resources | |||
Estimated fair value of assets acquired and liabilities assumed | |||
Accounts receivable | 142,312 | ||
Accounts payable | 3,316 | ||
Antero Midstream Partners | Third Party | |||
Estimated fair value of assets acquired and liabilities assumed | |||
Accounts receivable | 117 | ||
Accounts payable | 30,674 | ||
Gathering And Processing | Antero Midstream Partners | |||
Estimated fair value of assets acquired and liabilities assumed | |||
Goodwill | 575,000 | ||
Water Handling | Antero Midstream Partners | |||
Estimated fair value of assets acquired and liabilities assumed | |||
Goodwill | $ 340,000 |
Clearwater Facility Idling (Det
Clearwater Facility Idling (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Clearwater Facility Impairment | |||||
Impairment of property and equipment | $ 594 | $ 89,083 | $ 594 | ||
Impairment of goodwill | 575,461 | ||||
Total impairment expense | 664,544 | $ 594 | |||
Facility idling | $ 2,475 | 11,153 | |||
Clearwater Facility | |||||
Clearwater Facility Impairment | |||||
Impairment of property and equipment | $ 408,882 | ||||
Impairment of goodwill | 42,290 | ||||
Impairment charge | 11,871 | ||||
Total impairment expense | $ 463,043 | ||||
Facility idling | $ 2,500 | $ 11,200 |
Goodwill and Intangibles (Detai
Goodwill and Intangibles (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | |
Goodwill | |||
Goodwill | $ 575,461 | ||
Impairment of goodwill | $ (575,461) | ||
Gathering And Processing | |||
Goodwill | |||
Impairment of goodwill | $ 575,000 | ||
Water Handling | |||
Goodwill | |||
Goodwill | 0 | ||
Impairment of goodwill | $ 298,000 |
Goodwill and Intangibles - Cust
Goodwill and Intangibles - Customer Relationships (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Finite lived intangible assets rollforward | ||||
Customer relationships beginning of period | $ 1,498,119 | |||
Amortization of customer relationships | $ (17,606) | $ (8,534) | (35,211) | $ (10,315) |
Customer relationships end of period | 1,462,908 | $ 1,462,908 | ||
Customer relationships | ||||
Finite lived intangible assets | ||||
Amortization period | 23 years | |||
Finite lived intangible assets rollforward | ||||
Customer relationships beginning of period | $ 1,498,119 | |||
Amortization of customer relationships | (35,211) | |||
Customer relationships end of period | $ 1,462,908 | $ 1,462,908 |
Goodwill and Intangibles - Futu
Goodwill and Intangibles - Future amortization expense (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Future amortization expense | ||
Total | $ 1,462,908 | $ 1,498,119 |
Customer relationships | ||
Future amortization expense | ||
Remainder of year ending December 31, 2020 | 35,463 | |
Year ending December 31, 2021 | 70,672 | |
Year ending December 31, 2022 | 70,672 | |
Year ending December 31, 2023 | 70,672 | |
Year ending December 31, 2024 | 70,672 | |
Year ending December 31, 2025 | 70,672 | |
Thereafter | 1,074,085 | |
Total | $ 1,462,908 | $ 1,498,119 |
Transactions with Affiliates (D
Transactions with Affiliates (Details) - Antero Resources - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Allocation of costs | ||||
Direct labor expenses | $ 1.5 | $ 1.9 | $ 3.5 | $ 2.3 |
General and administrative expense | $ 6.4 | $ 11.8 | $ 12.8 | $ 13.9 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | |
Agreements | ||
Third party out of pocket costs reimbursement (as a percent) | 3.00% | |
Gathering And Compression Agreement | ||
Agreements | ||
Notice period | 180 days | |
Rebate issued | $ 12 | $ 24 |
Water Services Agreement | ||
Agreements | ||
Notice period | 180 days | |
Third party out of pocket costs reimbursement (as a percent) | 3.00% |
Revenue - Minimum Volume Commit
Revenue - Minimum Volume Commitments (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Gathering And Compression Agreement | |
Minimum revenue amounts under the minimum volume commitments | |
Minimum volume commitment that require Antero to pay for high pressure lines | 75.00% |
Minimum volume commitment that require Antero to pay for compressor stations | 70.00% |
Term of new construction | 10 years |
Minimum revenue amounts | $ 1,746,508 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01 | |
Minimum revenue amounts under the minimum volume commitments | |
Expected timing of satisfaction period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01 | Gathering And Compression Agreement | |
Minimum revenue amounts under the minimum volume commitments | |
Minimum revenue amounts | $ 80,262 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Minimum revenue amounts under the minimum volume commitments | |
Expected timing of satisfaction period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Gathering And Compression Agreement | |
Minimum revenue amounts under the minimum volume commitments | |
Minimum revenue amounts | $ 235,901 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Minimum revenue amounts under the minimum volume commitments | |
Expected timing of satisfaction period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Gathering And Compression Agreement | |
Minimum revenue amounts under the minimum volume commitments | |
Minimum revenue amounts | $ 235,901 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Minimum revenue amounts under the minimum volume commitments | |
Expected timing of satisfaction period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Gathering And Compression Agreement | |
Minimum revenue amounts under the minimum volume commitments | |
Minimum revenue amounts | $ 236,547 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Minimum revenue amounts under the minimum volume commitments | |
Expected timing of satisfaction period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Gathering And Compression Agreement | |
Minimum revenue amounts under the minimum volume commitments | |
Minimum revenue amounts | $ 222,858 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Minimum revenue amounts under the minimum volume commitments | |
Expected timing of satisfaction period | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | Gathering And Compression Agreement | |
Minimum revenue amounts under the minimum volume commitments | |
Minimum revenue amounts | $ 499,138 |
Revenue - Disaggregation (Detai
Revenue - Disaggregation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue | ||||
Amortization of customer relationships | $ (17,606) | $ (8,534) | $ (35,211) | $ (10,315) |
Gain on sale of assets-third party | (240) | (240) | ||
Total revenue | 219,736 | 255,618 | 463,444 | 309,726 |
Gathering And Processing | ||||
Disaggregation of Revenue | ||||
Amortization of customer relationships | (9,239) | (2,402) | (18,477) | (2,903) |
Water Handling | ||||
Disaggregation of Revenue | ||||
Amortization of customer relationships | (8,367) | (6,132) | (16,734) | (7,412) |
Fixed Fee | Gathering And Processing | ||||
Disaggregation of Revenue | ||||
Revenue | 185,991 | 168,925 | 361,120 | 202,459 |
Fixed Fee | Water Handling | ||||
Disaggregation of Revenue | ||||
Revenue | 36,900 | 55,440 | 102,718 | 68,645 |
Cost plus 3% | Water Handling | ||||
Disaggregation of Revenue | ||||
Revenue | 23,742 | 39,787 | 54,687 | 48,937 |
Cost of service fee | Water Handling | ||||
Disaggregation of Revenue | ||||
Revenue | 2,709 | 4,130 | ||
Gathering-low pressure | Gathering And Processing | ||||
Disaggregation of Revenue | ||||
Revenue | 85,791 | 78,807 | 166,939 | 94,634 |
Gathering-low pressure rebate | Gathering And Processing | ||||
Disaggregation of Revenue | ||||
Revenue | (12,000) | (24,000) | ||
Gathering-high pressure | Gathering And Processing | ||||
Disaggregation of Revenue | ||||
Revenue | 51,577 | 47,749 | 100,490 | 57,032 |
Compression | Gathering And Processing | ||||
Disaggregation of Revenue | ||||
Revenue | 48,623 | 42,369 | 93,691 | 50,793 |
Fresh water delivery | Water Handling | ||||
Disaggregation of Revenue | ||||
Revenue | 36,900 | 43,429 | 102,718 | 54,204 |
Wastewater treatment | Water Handling | ||||
Disaggregation of Revenue | ||||
Revenue | 12,011 | 14,441 | ||
Other fluid handling | Water Handling | ||||
Disaggregation of Revenue | ||||
Revenue | $ 26,451 | $ 39,787 | $ 58,817 | $ 48,937 |
Revenue - Transaction Price All
Revenue - Transaction Price Allocation and Contract Balances (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Revenue | ||
Original expected duration | true | |
Receivables with customers | $ 76 | $ 101 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Property and Equipment | |||
Total property and equipment | $ 3,353,688 | $ 3,361,058 | |
Less accumulated depreciation | (104,045) | (87,648) | |
Property and equipment, net | 3,249,643 | 3,273,410 | |
Impairment of long-lived assets | $ 89,000 | ||
Land | |||
Property and Equipment | |||
Total property and equipment | 23,582 | 23,549 | |
Gathering systems and facilities | |||
Property and Equipment | |||
Total property and equipment | 2,577,408 | 2,375,241 | |
Residual value | $ 0 | ||
Gathering systems and facilities | Minimum | |||
Property and Equipment | |||
Estimated useful lives | 40 years | ||
Gathering systems and facilities | Maximum | |||
Property and Equipment | |||
Estimated useful lives | 50 years | ||
Permanent buried pipelines and equipment | |||
Property and Equipment | |||
Total property and equipment | $ 537,173 | 602,230 | |
Impairment of long-lived assets | 83,000 | ||
Permanent buried pipelines and equipment | Minimum | |||
Property and Equipment | |||
Estimated useful lives | 7 years | ||
Permanent buried pipelines and equipment | Maximum | |||
Property and Equipment | |||
Estimated useful lives | 20 years | ||
Surface pipelines and equipment | |||
Property and Equipment | |||
Total property and equipment | $ 42,919 | 48,594 | |
Impairment of long-lived assets | $ 6,000 | ||
Surface pipelines and equipment | Minimum | |||
Property and Equipment | |||
Estimated useful lives | 1 year | ||
Surface pipelines and equipment | Maximum | |||
Property and Equipment | |||
Estimated useful lives | 7 years | ||
Landfill | |||
Property and Equipment | |||
Total property and equipment | $ 1,244 | 1,244 | |
Heavy trucks and equipment | |||
Property and Equipment | |||
Total property and equipment | $ 5,919 | 6,617 | |
Heavy trucks and equipment | Minimum | |||
Property and Equipment | |||
Estimated useful lives | 3 years | ||
Heavy trucks and equipment | Maximum | |||
Property and Equipment | |||
Estimated useful lives | 5 years | ||
Above ground storage tanks | |||
Property and Equipment | |||
Total property and equipment | $ 1,868 | 3,418 | |
Above ground storage tanks | Minimum | |||
Property and Equipment | |||
Estimated useful lives | 5 years | ||
Above ground storage tanks | Maximum | |||
Property and Equipment | |||
Estimated useful lives | 10 years | ||
Construction-in-progress | |||
Property and Equipment | |||
Total property and equipment | $ 163,575 | $ 300,165 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) | Jun. 28, 2019 | Feb. 25, 2019 | Sep. 13, 2016 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 03, 2016 |
Long-term debt | ||||||
Net unamortized debt issuance costs | $ (22,065,000) | $ (23,101,000) | ||||
Total long-term debt | 3,088,785,000 | 2,892,249,000 | ||||
New revolving credit facility | ||||||
Long-term debt | ||||||
Long-term debt | 1,155,000,000 | 959,500,000 | ||||
New revolving credit facility | Antero Midstream Partners | ||||||
Long-term debt | ||||||
Long-term debt | 1,200,000,000 | 960,000,000 | ||||
Maximum borrowing capacity | 2,130,000,000 | |||||
Outstanding balance | $ 0 | $ 0 | ||||
Weighted average interest rate (as a percent) | 1.69% | 3.15% | ||||
New revolving credit facility | Not Investment Grade Period | Minimum | ||||||
Long-term debt | ||||||
Commitment fees on the unused portion (as a percent) | 0.25% | |||||
New revolving credit facility | Not Investment Grade Period | Maximum | ||||||
Long-term debt | ||||||
Commitment fees on the unused portion (as a percent) | 0.375% | |||||
5.375% Senior Notes due 2024 | ||||||
Long-term debt | ||||||
Long-term debt | $ 652,600,000 | $ 652,600,000 | ||||
5.375% Senior Notes due 2024 | Finance Corp and together with Antero Midstream Partners | ||||||
Long-term debt | ||||||
Face amount | $ 650,000,000 | |||||
Interest rate (as a percent) | 5.375% | 5.375% | 5.375% | |||
Debt instrument redemption percentage upon change of control | 101.00% | |||||
5.375% Senior Notes due 2024 | Redemption period one | Finance Corp and together with Antero Midstream Partners | ||||||
Long-term debt | ||||||
Debt instrument redemption percentage | 104.031% | |||||
5.375% Senior Notes due 2024 | Redemption period two | Finance Corp and together with Antero Midstream Partners | ||||||
Long-term debt | ||||||
Debt instrument redemption percentage | 100.00% | |||||
5.75% Senior Notes Due 2027 | ||||||
Long-term debt | ||||||
Long-term debt | $ 653,250,000 | $ 653,250,000 | ||||
Face amount | $ 650,000,000 | |||||
Interest rate (as a percent) | 5.75% | 5.75% | 5.75% | |||
Debt instrument redemption percentage upon change of control | 101.00% | |||||
5.75% Senior Notes Due 2027 | Maximum | ||||||
Long-term debt | ||||||
Percent of aggregate principal amount that can be redeemed | 35.00% | |||||
5.75% Senior Notes Due 2027 | Redemption period one | ||||||
Long-term debt | ||||||
Debt instrument redemption percentage | 102.875% | |||||
5.75% Senior Notes Due 2027 | Redemption period two | ||||||
Long-term debt | ||||||
Debt instrument redemption percentage | 100.00% | |||||
5.75% Senior Notes Due 2027 | Redemption period three | ||||||
Long-term debt | ||||||
Debt instrument redemption percentage | 105.75% | |||||
Debt instrument redemption percentage with payment of premium and interest | 100.00% | |||||
5.75% Senior Notes Due 2028 | ||||||
Long-term debt | ||||||
Long-term debt | $ 650,000,000 | $ 650,000,000 | ||||
Face amount | $ 650,000,000 | |||||
Interest rate (as a percent) | 5.75% | 5.75% | 5.75% | |||
Debt instrument redemption percentage upon change of control | 101.00% | |||||
5.75% Senior Notes Due 2028 | Maximum | ||||||
Long-term debt | ||||||
Percent of aggregate principal amount that can be redeemed | 35.00% | |||||
5.75% Senior Notes Due 2028 | Redemption period one | ||||||
Long-term debt | ||||||
Debt instrument redemption percentage | 102.875% | |||||
5.75% Senior Notes Due 2028 | Redemption period two | ||||||
Long-term debt | ||||||
Debt instrument redemption percentage | 100.00% | |||||
5.75% Senior Notes Due 2028 | Redemption period three | ||||||
Long-term debt | ||||||
Debt instrument redemption percentage | 105.75% | |||||
Debt instrument redemption percentage with payment of premium and interest | 100.00% |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accrued Liabilities | ||
Capital expenditures | $ 16,284 | $ 27,427 |
Operating expenses | 9,839 | 24,980 |
Interest expense | 40,524 | 44,440 |
Other | 5,637 | 7,341 |
Total accrued liabilities | $ 72,284 | $ 104,188 |
Equity Based Compensation (Deta
Equity Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 12, 2019 | Jan. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 |
Additional disclosures | |||||||
Expense recognized | $ 2,697 | $ 21,543 | $ 6,035 | $ 32,966 | |||
Antero Midstream Partners | |||||||
Additional disclosures | |||||||
Expense recognized | 1,300 | $ 2,800 | 3,200 | ||||
Antero Resources | |||||||
Additional disclosures | |||||||
Unamortized expense | 15,000 | 15,000 | |||||
Midstream LTIP | |||||||
Additional disclosures | |||||||
Unamortized expense | $ 15,000 | $ 15,000 | |||||
Weighted average period for recognizing unrecognized stock-based compensation expense | 2 years 1 month 6 days | ||||||
2017 AMGP LTIP | |||||||
Additional disclosures | |||||||
Expense recognized | 0 | 200 | |||||
AM LTIP | |||||||
Number of units | |||||||
Total awarded and unvested at the beginning of the period (in shares) | 1,275,990 | 1,275,990 | |||||
Granted (in shares) | 985,269 | ||||||
Vested (in shares) | (454,933) | ||||||
Forfeited (in shares) | (47,367) | ||||||
Total awarded and unvested at the end of the period (in shares) | 1,758,959 | 1,758,959 | |||||
Weighted average grant date fair value | |||||||
Total awarded and unvested at the beginning of the period (in dollars per unit) | $ 14.38 | $ 14.38 | |||||
Granted (in dollars per unit) | 7.23 | ||||||
Vested (in dollars per unit) | 13.63 | ||||||
Forfeited (in dollars per unit) | 14.43 | ||||||
Total awarded and unvested at the end of the period (in dollars per unit) | $ 10.45 | $ 10.45 | |||||
Aggregate intrinsic value | |||||||
Total awarded and unvested at the beginning of the period | $ 9,685 | $ 9,685 | |||||
Total awarded and unvested at the end of the period | $ 8,971 | 8,971 | |||||
Additional disclosures | |||||||
Expense recognized | $ 1,300 | $ 2,700 | |||||
Number of stock-based compensation awards authorized | 15,398,901 | ||||||
Number of shares available for future grant under the Plan | 12,840,630 | 12,840,630 | |||||
Cash awards granted | $ 2,200 | ||||||
Vesting period for cash awards | 3 years | ||||||
Cash awards accrued in other liabilities | $ 800 | $ 800 | |||||
Series B Unit, Vested and Unvested | |||||||
Additional disclosures | |||||||
Shares exchange ratio | 176.0041 | ||||||
Exchanged B Units | |||||||
Additional disclosures | |||||||
Expense recognized | 18,000 | 29,000 | |||||
Shares exchanged | 17,353,999 | ||||||
Common stock issued in exchange | 98,600 | ||||||
ROIC PSUs | |||||||
Additional disclosures | |||||||
Expense recognized | 78 | $ 163 | 156 | $ 163 | |||
Unamortized expense | $ 600 | $ 600 | |||||
Weighted average period for recognizing unrecognized stock-based compensation expense | 1 year 9 months 18 days |
Cash Distribution and Dividends
Cash Distribution and Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 15, 2020 | May 15, 2020 | May 12, 2020 | Feb. 14, 2020 | Feb. 12, 2020 | Dec. 31, 2019 | Nov. 14, 2019 | Nov. 13, 2019 | Sep. 18, 2019 | Aug. 07, 2019 | May 15, 2019 | May 08, 2019 | Feb. 21, 2019 | Jun. 30, 2020 | Dec. 31, 2019 |
Partnership equity and distributions | |||||||||||||||
Cash dividends declared per common share | $ 0.3075 | ||||||||||||||
Common shareholders | |||||||||||||||
Partnership equity and distributions | |||||||||||||||
Distributions | $ 137 | $ 147,519 | $ 138 | $ 148,876 | $ 2,299 | $ 138 | $ 153,033 | $ 154,146 | $ 98 | $ 152,082 | $ 30,543 | $ 296,670 | $ 492,477 | ||
Distributions per share (in dollars per share) | $ 0.3075 | $ 0.3075 | $ 0.3075 | $ 0.3075 | $ 0.3025 | $ 0.164 | |||||||||
Antero Midstream GP LP | Common shareholders | |||||||||||||||
Partnership equity and distributions | |||||||||||||||
Distributions | $ 138 | ||||||||||||||
Series A Preferred Stock | |||||||||||||||
Partnership equity and distributions | |||||||||||||||
Cash dividend declared | $ 138 | ||||||||||||||
Dividends in arrears | $ 69 |
Equity and Earnings Per Commo_3
Equity and Earnings Per Common Share (Details) - $ / shares | Mar. 12, 2019 | Jun. 30, 2020 | Dec. 31, 2019 |
Number of shares authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Series A Preferred Stock | |||
Shares issued for acquisition | 10,000 | ||
Preferred stock dividend rate | 5.50% | ||
Redemption price per share | $ 1,000 |
Equity and Earnings Per Commo_4
Equity and Earnings Per Common Share - Weighted Average Shares Outstanding (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Weighted average common shares outstanding-basic | 476,836 | 506,816 | 479,969 | 381,045 |
Add: Dilutive effect of restrictive stock units | 40 | 78 | 108 | |
Add: Dilutive effect of Series A preferred stock | 1,961 | 873 | 873 | |
Diluted weighted average number of shares outstanding | 478,837 | 507,767 | 479,969 | 382,026 |
Restricted unit awards | ||||
Antidilutive securities excluded from computation of earnings per share | 77 | |||
Preferred shares | ||||
Antidilutive securities excluded from computation of earnings per share | 1,961 |
Equity and Earnings Per Commo_5
Equity and Earnings Per Common Share - Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Equity and Earnings Per Common Share | |||||
Net income (loss) | $ 88,441 | $ (392,933) | $ 69,274 | $ (304,492) | $ 78,922 |
Less preferred stock dividends | (137) | (139) | (275) | (168) | |
Net income (loss) available to common shareholders | $ 88,304 | $ 69,135 | $ (304,767) | $ 78,754 | |
Net income (loss) per share-basic (in dollars per share) | $ 0.19 | $ 0.14 | $ (0.63) | $ 0.21 | |
Net income (loss) per share-diluted (in dollars per share) | $ 0.18 | $ 0.14 | $ (0.63) | $ 0.21 | |
Weighted average common shares outstanding-basic | 476,836 | 506,816 | 479,969 | 381,045 | |
Weighted average common shares outstanding-diluted | 478,837 | 507,767 | 479,969 | 382,026 |
Fair Value Measurement (Details
Fair Value Measurement (Details) $ in Millions | 1 Months Ended | ||||
Sep. 30, 2015USD ($)bbl | Jun. 30, 2020USD ($) | Mar. 31, 2020 | Jan. 31, 2020USD ($) | Mar. 12, 2019 | |
Level 2 | 5.375% Senior Notes due 2024 | |||||
Fair value measurement | |||||
Debt instrument fair value | $ 553 | ||||
Level 2 | 5.75% Senior Notes Due 2027 | |||||
Fair value measurement | |||||
Debt instrument fair value | 520 | ||||
Level 2 | 5.75% Senior Notes Due 2028 | |||||
Fair value measurement | |||||
Debt instrument fair value | $ 517 | ||||
Recurring | Discount rate | Third-party market participants | |||||
Fair value measurement | |||||
Property and Equipment discount rate | 0.190 | ||||
Weighted Average | Recurring | Discounted cash flow | Level 3 | |||||
Fair value measurement | |||||
Business comnination cost of capital | 0.141 | ||||
Weighted Average | Recurring | Discounted cash flow, comparable company and market value | Level 3 | |||||
Fair value measurement | |||||
Goodwill cost of capital | 0.180 | ||||
Contingent Consideration Period One | |||||
Fair value measurement | |||||
Contingent consideration | $ 125 | $ 125 | |||
Threshold number of barrels of water to trigger contingent consideration payment | bbl | 176,295,000 | ||||
Contribution Agreement | Contingent Consideration Period Two | |||||
Fair value measurement | |||||
Contingent consideration | $ 125 | ||||
Threshold number of barrels of water to trigger contingent consideration payment | bbl | 219,200,000 |
Investments in Unconsolidated_3
Investments in Unconsolidated Affiliates (Details) $ in Thousands | 2 Months Ended | 3 Months Ended | 6 Months Ended | 10 Months Ended | ||
Mar. 12, 2019USD ($) | Jun. 30, 2020USD ($)itemmi | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)itemmi | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Investments in unconsolidated affiliates | ||||||
Balance at beginning of period | $ 43,492 | $ 709,639 | $ 43,492 | |||
Distributions from unconsolidated affiliates | (43,492) | (43,492) | ||||
Investments in unconsolidated affiliates acquired from Antero Midstream Partners | $ 568,285 | |||||
Additional investments | 21,988 | (154,359) | ||||
Equity in net income of unconsolidated affiliates | $ 20,947 | $ 13,623 | 40,024 | 16,503 | 51,315 | |
Distributions from unconsolidated affiliates | (41,828) | (23,860) | (64,320) | |||
Balance at end of period | $ 729,823 | $ 729,823 | 709,639 | |||
Antero Midstream Partners LP | ||||||
Investments in unconsolidated affiliates | ||||||
Balance at beginning of period | 43,492 | $ 43,492 | ||||
Distributions from unconsolidated affiliates | $ (43,492) | |||||
Stonewall | ||||||
Equity Method Investments | ||||||
Ownership percentage | 15.00% | 15.00% | ||||
Number of miles of pipeline | mi | 67 | 67 | ||||
Investments in unconsolidated affiliates | ||||||
Balance at beginning of period | $ 140,458 | |||||
Investments in unconsolidated affiliates acquired from Antero Midstream Partners | 142,071 | |||||
Equity in net income of unconsolidated affiliates | 3,160 | 4,117 | ||||
Distributions from unconsolidated affiliates | (4,485) | (5,730) | ||||
Balance at end of period | $ 139,133 | $ 139,133 | 140,458 | |||
MarkWest Joint venture | ||||||
Equity Method Investments | ||||||
Ownership percentage | 50.00% | 50.00% | ||||
Percentage of interest held by joint venture in third party fractionator in Ohio | 33.33% | |||||
Number of fractionators | item | 2 | 2 | ||||
Investments in unconsolidated affiliates | ||||||
Balance at beginning of period | $ 569,181 | |||||
Investments in unconsolidated affiliates acquired from Antero Midstream Partners | 426,214 | |||||
Additional investments | 21,988 | (154,359) | ||||
Equity in net income of unconsolidated affiliates | 36,864 | 47,198 | ||||
Distributions from unconsolidated affiliates | (37,343) | (58,590) | ||||
Balance at end of period | $ 590,690 | $ 590,690 | $ 569,181 |
Reporting Segments (Details)
Reporting Segments (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 10 Months Ended | ||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)segmentitem | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Reporting Segments | |||||
Number of reportable segments | segment | 2 | ||||
Revenues: | |||||
Amortization of customer relationships | $ (17,606) | $ (8,534) | $ (35,211) | $ (10,315) | |
Gain on sale of assets-third party | (240) | (240) | |||
Total revenue | 219,736 | 255,618 | 463,444 | 309,726 | |
Operating expenses: | |||||
Direct operating | 42,067 | 63,998 | 90,795 | 78,980 | |
General and administrative (excluding equity-based compensation) | 9,725 | 13,079 | 19,924 | 21,465 | |
Facility idling | 2,475 | 11,153 | |||
Equity-based compensation | 2,697 | 21,543 | 6,035 | 32,966 | |
Impairment of property and equipment | 594 | 89,083 | 594 | ||
Impairment of goodwill | 575,461 | ||||
Depreciation | 27,745 | 36,447 | 55,088 | 44,097 | |
Accretion and change in fair value of contingent acquisition consideration | 2,297 | 3,346 | |||
Accretion of asset retirement obligations | 61 | 69 | 103 | 79 | |
Loss on asset sale | 240 | 240 | |||
Total operating expenses | 85,010 | 138,027 | 847,882 | 181,527 | |
Operating income (loss) | 134,726 | 117,591 | (384,438) | 128,199 | |
Equity in earnings of unconsolidated affiliates | 20,947 | 13,623 | 40,024 | 16,503 | $ 51,315 |
Total assets | 5,715,055 | 6,769,009 | 5,715,055 | 6,769,009 | $ 6,282,878 |
Additions to property and equipment | 55,431 | 125,185 | 123,414 | 141,190 | |
Antero Resources | |||||
Revenues: | |||||
Revenue | 237,342 | 264,106 | 498,655 | 319,991 | |
Third party | |||||
Revenues: | |||||
Revenue | 46 | 50 | |||
Gathering And Processing | |||||
Revenues: | |||||
Amortization of customer relationships | (9,239) | (2,402) | $ (18,477) | (2,903) | |
Water Handling | |||||
Reporting Segments | |||||
Number of independent fresh water systems | item | 2 | ||||
Revenues: | |||||
Amortization of customer relationships | (8,367) | (6,132) | $ (16,734) | (7,412) | |
Operating Segments | Gathering And Processing | |||||
Revenues: | |||||
Amortization of customer relationships | (9,239) | (2,402) | (18,477) | (2,903) | |
Total revenue | 164,752 | 166,523 | 318,643 | 199,556 | |
Operating expenses: | |||||
Direct operating | 14,059 | 12,377 | 27,450 | 15,312 | |
General and administrative (excluding equity-based compensation) | 5,440 | 7,335 | 10,484 | 8,355 | |
Equity-based compensation | 2,266 | 2,286 | 4,799 | 2,663 | |
Impairment of property and equipment | 592 | 592 | |||
Impairment of goodwill | 575,461 | ||||
Depreciation | 14,406 | 12,721 | 27,456 | 15,281 | |
Total operating expenses | 36,171 | 35,311 | 645,650 | 42,203 | |
Operating income (loss) | 128,581 | 131,212 | (327,007) | 157,353 | |
Equity in earnings of unconsolidated affiliates | 20,947 | 13,623 | 40,024 | 16,503 | |
Total assets | 4,387,102 | 4,916,854 | 4,387,102 | 4,916,854 | |
Additions to property and equipment | 49,278 | 81,529 | 103,937 | 89,206 | |
Operating Segments | Gathering And Processing | Antero Resources | |||||
Revenues: | |||||
Revenue | 173,991 | 168,925 | 337,120 | 202,459 | |
Operating Segments | Water Handling | |||||
Revenues: | |||||
Amortization of customer relationships | (8,367) | (6,132) | (16,734) | (7,412) | |
Gain on sale of assets-third party | (240) | (240) | |||
Total revenue | 54,984 | 89,095 | 144,801 | 110,170 | |
Operating expenses: | |||||
Direct operating | 28,008 | 51,621 | 63,345 | 63,668 | |
General and administrative (excluding equity-based compensation) | 2,694 | 3,958 | 5,599 | 4,532 | |
Facility idling | 2,475 | 11,153 | |||
Equity-based compensation | 431 | 926 | 986 | 1,139 | |
Impairment of property and equipment | 2 | 89,083 | 2 | ||
Depreciation | 13,339 | 23,726 | 27,632 | 28,816 | |
Accretion and change in fair value of contingent acquisition consideration | 2,297 | 3,346 | |||
Accretion of asset retirement obligations | 61 | 69 | 103 | 79 | |
Loss on asset sale | 240 | 240 | |||
Total operating expenses | 47,248 | 82,599 | 198,141 | 101,582 | |
Operating income (loss) | 7,736 | 6,496 | (53,340) | 8,588 | |
Total assets | 1,149,355 | 1,844,385 | 1,149,355 | 1,844,385 | |
Additions to property and equipment | 6,153 | 43,656 | 19,477 | 51,984 | |
Operating Segments | Water Handling | Antero Resources | |||||
Revenues: | |||||
Revenue | 63,351 | 95,181 | 161,535 | 117,532 | |
Operating Segments | Water Handling | Third party | |||||
Revenues: | |||||
Revenue | 46 | 50 | |||
Unallocated | |||||
Operating expenses: | |||||
General and administrative (excluding equity-based compensation) | 1,591 | 1,786 | 3,841 | 8,578 | |
Equity-based compensation | 18,331 | 250 | 29,164 | ||
Total operating expenses | 1,591 | 20,117 | 4,091 | 37,742 | |
Operating income (loss) | (1,591) | (20,117) | (4,091) | (37,742) | |
Total assets | $ 178,598 | $ 7,770 | $ 178,598 | $ 7,770 |