What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2022-02-16 compared with 2021-02-17 · 317 added, 314 removed, 984 unchanged (39% of the section changed)

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Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2021.

The effectiveness of our internal control over financial reporting as of December 31, 2020 has been audited by KPMG LLP, an independent registered public accounting firm which also audited our consolidated financial statements as of and for the year ended December 31, 2020, as stated in their report which appears on page F-2 in this Annual Report on Form 10-K.

The effectiveness of our internal control over financial reporting as of December 31, 2021 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which appears on page F-2 in this Annual Report on Form 10-K.

Other Information

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Principal Accountant Fees and Services

Our independent registered accounting firm is KPMG LLP , Denver, CO , Auditor Firm ID:

Pursuant to General Instruction G(3) to Form 10-K, we incorporate by reference into this Item the information to be disclosed in our definitive proxy statement for our 2022 Annual Meeting of Stockholders.

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001-38075) filed on March 12, 2019).

Indenture, dated as of September 13, 2016, by and among Antero Midstream Partners LP, Antero Midstream Finance Corporation, the subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to Antero Midstream Partners LP’s Current Report on Form 8-K (Commission File No.

001-36719) filed on September 13, 2016).

Form of 5.375% Senior Note due 2024 (incorporated by reference to Exhibit 4.2 to Antero Midstream Partners LP’s Current Report on Form 8-K (Commission File No.

001-36719) filed on September 13, 2016).

First Supplemental Indenture, dated as of January 17, 2017, among Antero Midstream Partners LP, Antero Midstream Finance Corporation, Antero Midstream Corporation, each of the other parties identified therein and Wells Fargo Bank, National Association, a national banking association to the indenture governing the 2024 Notes (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10-K (Commission File No.

001-38075) filed on February 12, 2020).

Second Supplemental Indenture, dated as of April 15, 2019, among Antero Midstream Partners LP, Antero Midstream Finance Corporation, Antero Midstream Corporation, each of the other parties identified therein and Wells Fargo Bank, National Association, a national banking association to the indenture governing the 2024 Notes (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K (Commission File No.

001-38075) filed on April 16, 2019).

Indenture, dated as of February 25, 2019, by and among Antero Midstream Partners LP, Antero Midstream Finance Corporation, the subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (Commission File No.

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001-38075) filed on February 12, 2020).

Indenture, dated June 8, 2021, by and among Antero Midstream Partners LP, Antero Midstream Finance Corporation, the guarantors party thereto and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (Commission File No.

001-38075) filed on June 8, 2021).

Form of 5.375% Senior Note due 2029 (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K (Commission File No.

001-38075) filed on June 8, 2021).

Second Amended and Restated Gathering and Compression Agreement, dated as of December 8, 2019, by and between Antero Resources Corporation and Antero Midstream LLC (incorporated by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K (Commission File No.

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001-38075) filed on February 12, 2020).

Amended and Restated Credit Agreement, by and among Antero Midstream Partners LP, the lenders party thereto, and Wells Fargo Bank, National Association, as Administrative Agent (incorporated by reference to Exhibit 10.1 to Antero Midstream Partners LP’s Quarterly Report on Form 10-Q (Commission File No.

001-36719) filed on November 1, 2017).

Second Amended and Restated Credit Facility, dated as of October 26, 2021, by and among Antero Midstream Partners LP, as Borrower, the lenders party thereto and Wells Fargo Bank, National Association., as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (Commission File No.

001-38075) filed on October 27, 2021).

Form of Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission File No.

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Subsidiaries of Antero Midstream Corporation.

List of Guarantor and Issuer Subsidiaries.

Consent of KPMG LLP.

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Section 1350).

Unaudited pro forma condensed combined financial statements of Antero Midstream Corporation (incorporated by reference to Exhibit 99.1 to the Company’s Annual Report on Form 10-K (Commission File No.

001-38075) filed on February 12, 2020).

The following financial information from this Form 10-K of Antero Midstream Corporation for the year ended December 31, 2021, formatted in iXBRL (Inline eXtensible Business Reporting Language):

(i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income (Loss), (iii) Consolidated Statements of Equity, (iv) Consolidated Statements of Cash Flows and (v) Notes to the Consolidated Financial Statements, tagged as blocks of text.

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Cover Page Interactive Data File (embedded within the Inline XBRL document).

The exhibits marked with the asterisk symbol (*) are filed or furnished with this Annual Report on Form 10-K.

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ANTERO MIDSTREAM CORPORATION

/s/ MICHAEL N.

Chief Financial Officer

/s/ BRENDAN E.

Chief Financial Officer, Vice President – Finance and Treasurer

February 16, 2022

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant in the capacities and on the dates indicated.

Chairman of the Board,

Director and Chief Executive Officer

Chairman of the Board, Director,

President and Chief Executive Officer

February 16, 2022

(principal executive officer)

/s/ MICHAEL N.

Chief Financial Officer,

/s/ BRENDAN E.

Vice President – Finance and Treasurer

February 16, 2022

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(principal accounting officer)

President, Director and Secretary

/s/ MICHAEL N.

Director and Senior Vice President – Finance

February 16, 2022

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We also have audited the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control –Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have audited the accompanying consolidated balance sheets of Antero Midstream Corporation and subsidiaries (the Company) as of December 31, 2019 and 2020, the related consolidated statements of operations and comprehensive income (loss), partners’ capital and stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2020, and the related notes (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2021, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2021, in conformity with U.S.

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A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

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Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Lease classification for ongoing modifications to the gathering and compression assets

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The evaluation of lease classification for these modified leases, including evaluating the economic life as a key estimate, requires significant judgment.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of an internal control over the Company’s process for identifying lease modifications and evaluating lease classification for those modifications, including the review and approval of the Company’s lease modifications and the Company’s evaluation of the lease classification.

The primary procedures we performed to address this critical audit matter included the following.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s process for identifying lease modifications and evaluating lease classification for those modifications, including controls related to the review and approval of the Company’s lease modifications and the Company’s evaluation of the lease classification.

We evaluated the Company’s accounting memoranda and documentation underlying the accounting conclusions reached, including application of relevant accounting guidance in regard to the modification accounting and subsequent lease classification.

We evaluated the economic life used in the Company’s determination of lease classification by comparing it to relevant industry publications.

We evaluated the economic life used in the determination of lease classification by comparing it to relevant industry publications.

We evaluated fixed assets that are placed in service for new minimum volume commitments which would require reassessment of the lease.

Impairment of Utica fresh water assets

As discussed in Note 8 to the consolidated financial statements, 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.

An impairment loss is recognized if the undiscounted future cash flow projections for the assets being assessed are less than their carrying value.

If the carrying values of the assets are deemed not recoverable, the carrying values are reduced to their estimated fair values based on discounted cash flows, which includes forecasted EBITDA and discount rate assumptions.

During the year ended December 31, 2020 the Company recorded an impairment related to its Utica fresh water assets of $89 million.

We identified the evaluation of the impairment of Utica fresh water assets as a critical audit matter.

There was a high degree of subjectivity in evaluating the key assumptions used to determine the fair value of the Utica fresh water assets.

The Company used a discounted cash flow model to determine the fair value of the Utica fresh water assets which included the key assumptions of forecasted EBITDA and the discount rate.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s process of estimating the fair value of Utica fresh water assets, including controls related to the selection of the key assumptions used to determine the fair value of the Utica fresh

water assets.

We evaluated the Company’s forecasted EBITDA by comparing it to the Company’s historical performance.

To assess the Company’s ability to forecast, we compared the Company’s historical EBITDA forecasts to actual results.

In addition, we involved valuation professionals with specialized skills and knowledge who assisted in:

● evaluating the approach used to value the Utica fresh water assets

● evaluating the Company’s discount rate applied in the valuation of the Utica fresh water assets by comparing the Company’s inputs to publicly available data for comparable entities

● testing the estimate of the Utica fresh water assets fair value using the Company’s cash flow assumptions and discount rate and comparing the results to the Company’s fair value estimate.

We have served as the Company’s auditor since 2016.

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Investments in unconsolidated affiliates

Deferred tax asset

Deferred income tax asset

Customer relationships

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Accrued liabilities

Contingent acquisition consideration

Other current liabilities

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Long-term debt

Deferred income tax liability

Total liabilities

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Preferred stock, $ 0.01 par value:

100,000 authorized as of both December 31, 2019 and 2020

100,000 authorized as of December 31, 2020 and 2021

Series A non-voting perpetual preferred stock;

12 designated and 10 issued and outstanding as of both December 31, 2019 and 2020

12 designated and 10 issued and outstanding as of December 31, 2020 and 2021

Common stock, $ 0.01 par value;

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Facility idling

Impairment of goodwill

Impairment of property and equipment

Impairment of goodwill

Impairment of customer relationships

Accretion and change in fair value of contingent acquisition consideration

Accretion of asset retirement obligations

Accretion and change in fair value of contingent acquisition consideration

Loss on asset sale

Total operating expenses

Operating loss

Operating income (loss)

Other income (expense):

Interest expense, net

Equity in earnings of unconsolidated affiliates

Loss on early extinguishment of debt

Total other expense

Income (loss) before income taxes

Provision for income tax benefit (expense)

Income tax benefit (expense)

Net income (loss) and comprehensive income (loss)

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Balance at December 31, 2018

Net income and comprehensive income

Equity-based compensation

Distributions to shareholders

Distributions to Series B unitholders

Vesting of Series B units

Balance at December 31, 2018

Distributions to unitholders

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Balance at December 31, 2020

Dividends to stockholders

Equity-based compensation

Issuance of common stock upon vesting of equity-based compensation awards, net of common stock withheld for income taxes

Net income and comprehensive income

Balance at December 31, 2021

See accompanying notes to consolidated financial statements.

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Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Distributions from Antero Midstream Partners LP, prior to the Transactions

Payment of contingent consideration in excess of acquisition date fair value

Accretion and change in fair value of contingent acquisition consideration

Deferred income taxes

Payment of contingent consideration in excess of acquisition date fair value

Deferred income tax expense (benefit)

Equity-based compensation

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Distributions from unconsolidated affiliates

Distributions from Antero Midstream Partners LP, prior to the Transactions

Amortization of customer relationships

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Loss on asset sale

Loss on early extinguishment of debt

Changes in assets and liabilities:

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Cash flows provided by (used in) financing activities:

Distributions to unitholders and dividends to stockholders

Dividends to stockholders

Dividends to preferred stockholders

Distributions to Series B unitholders

Distributions to preferred stockholders

Repurchases of common stock

Issuance of senior notes

Redemption of senior notes

Payments of deferred financing costs

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Cash received (paid) during the period for income taxes

Decrease in accrued capital expenditures and accounts payable for property and equipment

Increase (decrease) in accrued capital expenditures and accounts payable for property and equipment

See accompanying notes to consolidated financial statements.

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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.

Unless the context otherwise requires, references to the “Company” refer to (i) for the period prior to March 13, 2019, 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, Antero Midstream Corporation and its consolidated subsidiaries, including Antero Midstream Partners and its subsidiaries, including Antero Midstream LLC, Antero Water LLC (“Antero Water”), Antero Treatment LLC and Antero Midstream Finance Corporation (“Finance Corp”).

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, and holders of Series B Units became owners of AM common stock.

Unless the context otherwise requires, references to the “Company” or “Antero Midstream” refer to (i) for the period prior to March 13, 2019, 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, Antero Midstream Corporation and its consolidated subsidiaries, including Antero Midstream Partners and its subsidiaries, including Antero Midstream LLC, Antero Water LLC (“Antero Water”), Antero Treatment LLC and Antero Midstream Finance Corporation (“Finance Corp”).

Antero Midstream is 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.

The Company’s 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.

Antero Midstream provides midstream services to Antero Resources under long-term contracts.

The Company’s gathering and compression assets comprise of high and low pressure gathering pipelines, compressor stations and processing and fractionation plants that collect and process natural gas and NGLs from Antero Resources’ wells in the Appalachian Basin.

The Company’s water handling assets include two independent systems that deliver fresh water from sources including the Ohio River, local reservoirs and several regional waterways, which portions of these systems are also utilized to transport flowback and produced water.

The Company’s water handling assets include two independent systems that deliver water from sources including the Ohio River, local reservoirs and several regional waterways, which portions of these systems are also utilized to transport flowback and produced water.

The Company’s water treatment assets also include other flowback and produced water treatment facilities.

The Company, through Antero Midstream Partners, also has a 15 % equity interest in a gathering system of Stonewall Gas Gathering LLC (“Stonewall”) and a 50 % equity interest in a joint venture to develop processing and fractionation assets with MarkWest Energy Partners, L.P.

Antero Midstream also has a 15 % equity interest in a gathering system of Stonewall Gas Gathering LLC (“Stonewall”) and a 50 % equity interest in a joint venture to develop processing and fractionation assets with MarkWest Energy Partners, L.P.

(“MarkWest”), a wholly owned subsidiary of MPLX, LP (“MPLX”) (the “Joint Venture”).

See Note 16—Investments in Unconsolidated Affiliates.

The Company’s corporate headquarters are located in Denver, Colorado.

The Company’s corporate headquarters is located in Denver, Colorado.

(2) Summary of Significant Accounting Policies

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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.

The Company 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 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 3 % 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 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 other fluid handling services provided by third parties, the third-party costs the Company incurs plus 3 % or (v) in the case of other fluid handling services 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.

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The preparation of the 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, evaluating impairments of long-lived assets, goodwill and intangible assets, as well as the valuation of accrued liabilities and deferred and current income taxes, among others.

Although management believes these estimates are reasonable, actual results could differ from these estimates.

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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 water handling pipelines and facilities stated at historical cost less accumulated depreciation, amortization and impairment.

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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

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

basis, applying cost as a rate per-cubic yard.

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.

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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.

Asset retirement obligations are recorded for water impoundments and wastewater pits when an abandonment date is identified.

The Company records the fair value of its water impoundment and wastewater 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.

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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.

As of December 31, 2020, the Company has $ 5 million of asset retirement obligations it expects to settle within the next 12 months that are recorded in Other current liabilities on the consolidated balance sheet.

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.

As of December 31, 2020 and 2021, the Company has $ 5 million and $ 4 million, respectively, of asset retirement obligations it expects to settle within the next 12 months that are recorded in Other current liabilities on the consolidated balance sheets.

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.

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Forfeitures are accounted for as they occur by reversing the expense previously recognized for awards that were forfeited during the period.

See Note 12—Equity-Based Compensation.

See Note 12—Equity-Based Compensation and Cash Awards.

The Company recognizes deferred tax assets and liabilities for temporary differences resulting from net operating loss and charitable contribution carryforwards and the differences between the financial statement and tax basis of assets and liabilities.

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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 income tax benefit for the current year and $ 44 million of previously recognized deferred income tax benefit.

As of December 31, 2020, the Company had received $ 39 million of this refund.

As of December 31, 2021, the Company had received all of this refund.

Fair Value Measures

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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.

Recently Adopted Accounting Standard

In December 2019, the FASB issued ASU No.

2019-12, Simplifying the Accounting for Income Taxes .

This ASU removes certain exceptions to the general principles in ASC 740, Income Taxes (“ASC 740”) and also simplifies portions of ASC 740 by clarifying and amending existing guidance.

It is effective for interim and annual reporting periods after December 15, 2020.

The Company adopted this ASU on January 1, 2021, and it did not have a material impact on the Company’s consolidated financial statements.

(3) Business Combination

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Net assets acquired

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 as of the acquisition date.

All customer relationships are subject to amortization, which is recognized over a weighted-average period of 23 years for the

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

remaining economic life of the relationship as of the acquisition date.

The purchase price allocation resulted in the recognition of $ 575 million of goodwill in three reporting units within the Company’s gathering and processing segment and $ 340 million of goodwill in two reporting units within its water handling segment.

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See Note 5—Goodwill and Intangibles.

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

The Company’s financial statements include $ 6 million of acquisition-related costs associated with the Transactions for the year ended December 31, 2019.

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Additionally, during the year ended December 31, 2020, the Company determined that the carrying value of the landfill was no longer recoverable resulting in an impairment charge to property and equipment.

The following table shows the impairment charges for the years ended December 31, 2019 and 2020 related to the Clearwater Facility, which also reflect the final purchase price allocation of the Transactions (in thousands):

The following table shows the impairment charges related to the Clearwater Facility, which also reflect the final purchase price allocation of the Transactions:

Year Ended December 31,

(in thousands)

Impairment of property and equipment

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Total impairment expense

The Company incurred $ 11 million and $ 15 million in facility idling costs for the care and maintenance of the Clearwater Facility during the years ended December 31, 2019 and 2020, respectively.

The Company incurred $ 11 million, $ 15 million and $ 4 million in facility idling costs for the care and maintenance of the Clearwater Facility during the years ended December 31, 2019, 2020 and 2021, respectively.

(5) Goodwill and Intangibles

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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.

During the third quarter of 2019, the Company incurred impairment charges of $ 42 million to the goodwill associated with the Clearwater Facility, which is in the water handling segment.

See Note 4—Clearwater Facility Idling.

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This was primarily due to decreased water volumes driven by decreased drilling operations by Antero Resources.

There was no goodwill remaining in this segment after this impairment was incurred.

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 $ 575 million associated with its gathering and processing segment in the first quarter of 2020.

All customer relationships are subject to amortization and will be amortized over a weighted-average period of 21 years , which reflects the remaining economic life of the relationships as of December 31, 2020.

The changes in the carrying amount of customer relationships for the years ended December 31, 2019 and 2020 were as follows (in thousands):

As a result of this evaluation, the Company impaired all remaining goodwill of $ 575 million associated with its gathering and processing segment.

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

The changes in the carrying amount of goodwill by reportable segment were as follows:

Gathering and

(in thousands)

Goodwill as of December 31, 2018

Goodwill acquired (1)

Impairment of goodwill

Goodwill as of December 31, 2019

Impairment of goodwill

Goodwill as of December 31, 2020

(1) See Note 3—Business Combination.

Customer Relationships Intangibles

All customer relationships are subject to amortization and will be amortized over a weighted-average period of 20 years , which reflects the remaining economic life of the relationships as of December 31, 2021.

During the third quarter of 2019, the Company incurred impairment charges of $ 12 million to the customer relationships intangible asset associated with the Clearwater Facility, which is in the water handling segment.

See Note 4—Clearwater Facility Idling.

The changes in the carrying amount of customer relationships were as follows (in thousands):

Customer relationships as of December 31, 2018

5 unchanged sentences

Customer relationships as of December 31, 2020

Amortization of customer relationships

Customer relationships as of December 31, 2021

(1) See Note 3—Business Combination.

8 unchanged sentences

Revenues earned from gathering and processing services consists of lease income.

There were no such revenues earned by AMGP for the year ended December 31, 2018.

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

Accounts receivable–Antero Resources and Accounts payable–Antero Resources

3 unchanged sentences

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 $ 6 million and $ 7 million during the years ended December 31, 2019 and 2020, respectively.

Direct operating expense includes costs charged to the Company of $ 6 million, $ 7 million and $ 9 million during the years ended December 31, 2019, 2020 and 2021, 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.

There were no such charges to AMGP during the year ended December 31, 2018.

For the years ended December 31, 2019, 2020 and 2021, general and administrative expenses charged to the Company by Antero Resources were $ 33 million, $ 25 million and $ 32 million, respectively.

3 unchanged sentences

The Company reimburses Antero Resources directly for all general and administrative costs charged to it.

See Note 12—Equity-Based Compensation.

Revenue from Contracts with Customers

All of the Company’s revenues are derived from service contracts with customers and are recognized when the Company

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

satisfies a performance obligation by delivering a service to a customer.

The Company currently 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

See Note 12—Equity-Based Compensation and Cash Awards.

All of the Company’s gathering and compression revenues are derived from an operating lease agreement, and all of the Company’s water handling revenues are derived from service contracts with customers.

The Company currently earns substantially all of its revenues from Antero Resources.

Gathering and Compression

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.

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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.

For the year ended December 31, 2020, the company provided Antero Resources $ 48 million in rebates.

For years ended December 31, 2020 and 2021, Antero Resources earned $ 48 million and $ 12 million, respectively, in rebates.

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 180 th day prior to the anniversary of such effective date.

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.

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 annual CPI-based adjustments, or a cost of service fee, at the Company’s election when such assets are placed in-service.

In addition, the agreement stipulates that the Company receives a reimbursement for the actual cost of (i) electricity used at its compressor stations where the compression services are provided based on a compression fee and (ii) operating expenses for all services provided for a cost of service fee.

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.

2 unchanged sentences

When a modification to the gathering and compression agreement occurs, the Company reassesses the classification of this lease.

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.

All lease payments under the future Minimum Volume Commitments discussed below are considered to be in-substance fixed lease payments under the gathering and compression agreement.

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 180 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.

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 accounts for its lease and non-lease components as a single lease component as the lease

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

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 require Antero Resources to utilize or pay for 75 % of the 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.

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 gathering and compression agreement includes certain fixed fee provisions.

If and to the extent Antero Resources requests that the Company construct new low pressure lines, high pressure lines and/or compressor stations, the gathering and compression agreement contains options at the Company’s election for either (i) minimum volume commitments that require Antero Resources to utilize or pay for 75 % of the high pressure gathering capacity and 70 % of the compression capacity of such new construction for 10 years or (ii) a cost of service fee that allows the Company to earn a 13 % rate of return on such new construction over seven years , which election is made individually for each piece of equipment.

All lease payments under the minimum volume commitments and cost of service fees are considered to be in-substance fixed lease payments under the gathering and compression agreement.

The Company recognizes lease income from its minimum volume commitments and cost of service fees under its gathering and compression agreement on a straight-line basis.

Additional variable operating lease income is earned when volumes in excess of the minimum volume commitments are delivered under the contract.

The Company recognizes variable lease income 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.

Minimum volume commitments for high pressure gathering capacity and compression capacity are aggregated such that there is a single minimum volume commitment for the respective service each month.

The Company invoices the customer the month after each service is performed, and payment is due in the same month.

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 as of December 31, 2020 are as follows (in thousands):

Minimum future lease cash flows to be received by the Company under the gathering and compression agreement as of December 31, 2021 are as follows (in thousands):

Year ending December 31, 2022

3 unchanged sentences

Year ending December 31, 2026

Water Handling

Under the agreement, the Company receives a fixed fee for all fresh water deliveries by pipeline directly to the well site, subject to annual CPI-based adjustments.

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.

In addition, the Company also provides other fluid handling services.

These operations, along with the Company’s fresh water delivery systems, support well completion and production operations for Antero Resources.

These services are provided by the Company directly or through third-parties with which the Company contracts.

For other fluid handling services provided by third-parties, Antero Resources reimburses the Company’s third-party out-of-pocket costs plus a 3 %.

For other fluid handling services provided by the Company, the Company charges Antero Resources a cost of service fee .

The initial term of the water services agreement runs to 2035.

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, other fluid handling 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

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

due in the same month.

Transaction Price Allocated to Remaining Performance Obligations

The Company’s service contract with Antero Resources has 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 exempt from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less.

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.

Disaggregation of Revenue

In the following table, revenue is disaggregated by type of service and type of fee and is identified by the reportable segment to which such revenues relate.

For more information on reportable segments see Note 17—Reporting Segments.

For more information on reportable segments, see Note 17—Reportable Segments.

Year Ended December 31,

1 unchanged sentence

Reportable Segment

Revenue from contracts with customers

Type of service

23 unchanged sentences

Water Handling

Cost plus 3 %

Water Handling

7 unchanged sentences

(2) Fair value of customer contracts acquired as part of the Transactions discussed in Note 3—Business Combination.

Transaction Price Allocated to Remaining Performance Obligations

The majority of the Company’s service contracts have a term greater than one year.

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.

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.

As of December 31, 2020, the Company’s receivables with customers were $ 101 million and $ 74 million, respectively.

As of December 31, 2020 and 2021, the Company’s receivables from its contracts with customers and operating leases were $ 74 million and $ 81 million, respectively.

ANTERO MIDSTREAM CORPORATION

1 unchanged sentence

(8) Property and Equipment

The Company’s investment in property and equipment for the periods presented is as follows:

The Company’s investment in property and equipment is as follows:

(in thousands)

10 unchanged sentences

(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.

During the years ended December 31, 2019 and 2020, the Company recorded impairment expense of $ 409 million and $ 7 million, respectively, for the Clearwater Facility.

3 unchanged sentences

(9) Income Taxes

For the years ended December 31, 2018, 2019 and 2020, income tax expense consisted of the following:

Income tax expense (benefit) consisted of the following:

Year Ended December 31,

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Income tax expense differs from the amount that would be computed by applying the U.S.

statutory federal income tax rate of 21 % for the years ended December 31, 2018, 2019 and 2020, to income before taxes as a result of the following:

statutory federal income tax rate of 21 % to income before taxes as a result of the following:

Year Ended December 31,

3 unchanged sentences

Non-deductible equity-based compensation

Non-deductible IPO expenses

Charitable contributions

1 unchanged sentence

Total income tax expense (benefit)

Deferred income taxes reflect the impact of temporary differences between assets and liabilities for financial reporting purposes and such amounts as measured by tax laws.

The tax effect of the temporary differences giving rise to net deferred tax assets

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

Deferred income taxes reflect the impact of temporary differences between assets and liabilities for financial reporting purposes and such amounts as measured by tax laws.

The tax effect of the temporary differences giving rise to net deferred tax assets as follows:

(in thousands)

4 unchanged sentences

Charitable contributions

Total deferred tax assets

Valuation allowance

Net deferred tax assets

Total deferred tax asset

Deferred tax liabilities:

Net deferred tax liabilities

Net deferred tax assets (liabilities)

(1) Investment in Antero Midstream Partners includes $ 2 million of transaction costs associated with the Transactions.

See Note 3—Business Combination.

As of December 31, 2019 and 2020, the Company has a deferred tax asset in its Investment in Antero Midstream Partners of $ 31 million and $ 38 million, respectively.

At the time of the Transactions on March 12, 2019, the investment in Antero Midstream Partners was recorded at fair value for both GAAP and income tax purposes.

The GAAP versus tax treatment of activity occurring after the transaction, such as the treatment of impairments and differing recovery rates of the underlying assets, gave rise to the deferred tax asset.

Due to Antero Midstream Partners’ strong history of pre-tax earnings, the Company believes the benefits of this deferred tax asset will be realized.

Investment in Antero Midstream Partners

Total deferred tax liability

Net deferred tax asset (liability)

In assessing the realizability of all of the deferred tax assets, management considers whether some portion or all of the deferred tax assets will be realized based on a more-likely-than-not standard of judgment.

2 unchanged sentences

Based upon the projections of future taxable income over the periods in which the deferred tax assets are deductible, management believes that the Company will realize the benefits of these deductible differences and thus has not recorded a valuation allowance.

The calculation of the Company’s tax assets and liabilities involve uncertainties in the application of complex tax laws and regulations.

The Company gives financial statement recognition to those tax positions that it believes are more-likely-than-not to be sustained upon examination by the Internal Revenue Service or state revenue authorities.

As of December 31, 2020 and 2021, the Company did not have any uncertain tax positions.

As of December 31, 2021, the Company has U.S.

1 unchanged sentence

Tax years 2017 through 2021 remain open to examination by the U.S.

Internal Revenue Service.

Internal Revenue Service, and tax years 2017 through 2019 are currently under audit.

The Company to date has not been notified of any adjustments to its federal taxable income or associated tax liability for any year under audit.

The Company and its subsidiaries file tax returns with various state taxing authorities and those returns remain open to examination for tax years 2017 through 2021.

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

(10) Long-Term Debt

The Company’s long-term debt as of December 31, 2019 and 2020 was as follows:

The Company’s long-term debt is as follows:

(in thousands)

4 unchanged sentences

5.75 % senior notes due 2028 (e)

5.375 % senior notes due 2029 (f)

Total principal

2 unchanged sentences

Total long-term debt

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

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 $ 2.13 billion.

As of December 31, 2019, the Borrower had outstanding borrowings under the Credit Facility of $ 960 million with a weighted average interest rate of 3.15 % .

As of December 31, 2020, the Borrower had outstanding borrowings under the Credit Facility of $ 614 million with a weighted average interest rate of 1.66 % .

No letters of credit under the Credit Facility were outstanding as of December 31, 2019 and 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).

Credit Facility

On October 26, 2021, the Company entered into an amended and restated senior secured revolving credit facility, the New Credit Facility.

As of December 31, 2021, lender commitments under the New Credit Facility were $ 1.25 billion and matures on October 26, 2026;

provided that if on November 17, 2025 any of the 2026 Notes (as defined below) are outstanding, the New Credit Facility will mature on such date.

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 the Borrower’s organizational documents.

The Credit Facility permits distributions to the holders of the Borrower’s equity interests in accordance with the cash distribution policy, provided that no event of default exists or would be caused thereby, and only to the extent permitted by the Borrower’s organizational documents.

The Borrower was in compliance with all of the financial covenants under the Credit Facility as of December 31, 2020 and 2021.

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.

The Prior Credit Facility provides for borrowing under either the Base Rate or the Eurodollar Rate (as each term is defined in the Prior Credit Facility), and the New Credit Facility provides for borrowing under either Adjusted Term Secured Overnight Financing Rate (“SOFR”) or the Base Rate (as each term is defined in the New Credit Facility).

Principal amounts borrowed are payable on the maturity date with such borrowings bearing interest that is payable with respect to (i) base rate loans, quarterly and (ii) Eurodollar Rate Loans or SOFR Loans at the end of the applicable interest period if three months (or shorter, if applicable), or every three months if the applicable interest period is longer than three months.

Interest is payable at a variable rate based on (i) LIBOR or the base rate, determined by election at the time of borrowing, plus an applicable margin rate under the Prior Credit Facility or (ii) SOFR or the base rate, determined by election at the time of borrowing, plus an applicable margin rate under the New Credit Facility.

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 0.25 % to 0.375 % subject to certain exceptions based on the leverage ratio then in effect.

As of December 31, 2020, the Borrower had outstanding borrowings under the Prior Credit Facility of $ 614 million with a weighted average interest rate of 1.66 % .

As of December 31, 2021, the Borrower had outstanding borrowings under the New Credit Facility of $ 547 million with a weighted average interest rate of 1.81 % .

No letters of credit under the Credit Facility were outstanding as of December 31, 2020 and 2021.

5.375 % Senior Notes Due 2024

1 unchanged sentence

The 2024 Notes were recorded at their fair value of $ 652.6 million as of March 12, 2019, the closing date of the Transactions, and the related premium of $ 2.6 million will be amortized into interest expense over the life of the 2024 Notes.

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 102.688 % as of December 31, 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.

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

The Issuers redeemed all $ 650 million of the 2024 Notes at 102.688 % of par on June 8, 2021, and recognized a loss of $ 21 million on the early extinguishment of debt during the year ended December 31, 2021, which includes the write-off of all unamortized debt premium and issuance costs.

Interest on the 2024 Notes was payable on March 15 and September 15 of each year.

7.875 % Senior Notes Due 2026

6 unchanged sentences

At any time prior to May 15, 2023, Antero Midstream Partners may also redeem the 2026 Notes, in whole or in part, at a price equal to 100 % of the principal amount of the 2026 Notes plus a “make-whole” premium and accrued and unpaid interest.

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

at a price equal to 101 % of the principal amount of the 2026 Notes, plus accrued and unpaid interest.

If Antero Midstream Partners undergoes a change of control followed by a rating decline, the holders of the 2026 Notes will have the right to require Antero Midstream Partners to repurchase all or a portion of the 2026 Notes at a price equal to 101 % of the principal amount of the 2026 Notes, plus accrued and unpaid interest.

5.75 % Senior Notes Due 2027

16 unchanged sentences

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

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

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.

5.375 % Senior Notes Due 2029

On June 8, 2021, the Issuers issued $ 750 million in aggregate principal amount of 5.375 % senior notes due June 15, 2029 (the “2029 Notes”) at par.

The 2029 Notes are unsecured and effectively subordinated to the Credit Facility to the extent of the value of the collateral securing the Credit Facility.

The 2029 Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by Antero Midstream, Antero Midstream Partners’ wholly owned subsidiaries (other than Finance Corp) and certain of its future restricted subsidiaries.

Interest on the 2029 Notes is payable on June 15 and December 15 of each year.

Antero Midstream Partners may redeem all or part of the 2029 Notes at any time on or after June 15, 2024 at redemption prices ranging from 102.688 % on or after June 15, 2024 to 100.00 % on or after June 15, 2026.

In addition, prior to June 15, 2024, Antero Midstream Partners may redeem up to 35 % of the aggregate principal amount of the 2029 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 105.375 % of the principal amount of the 2029 Notes, plus accrued and unpaid interest.

At any time prior to June 15, 2024, Antero Midstream Partners may also redeem the 2029 Notes, in whole or in part, at a price equal to 100 % of the principal amount of the 2029 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 2029 Notes will have the right to require Antero Midstream Partners to repurchase all or a portion of the 2029 Notes at a price equal to 101 % of the principal amount of the 2029 Notes, plus accrued and unpaid interest.

Senior Notes Guarantors

The Company and each of the Company’s wholly owned subsidiaries (except for the Issuers) has fully and unconditionally guaranteed the 2024 Notes, 2026 Notes, 2027 Notes and 2028 Notes (collectively the “Senior Notes”).

The Company and each of the Company’s wholly owned subsidiaries (except for the Issuers) has fully and unconditionally guaranteed the 2024 Notes, 2026 Notes, 2027 Notes, 2028 Notes and 2029 Notes (collectively the “Senior Notes”).

In the event a guarantor is sold or disposed of (whether by merger, consolidation, the sale of a sufficient amount of its capital stock so that it no longer qualifies as a Restricted Subsidiary (as defined in the applicable indenture governing the series of Senior Notes) of the Issuer or the sale of all or substantially all of its assets) and whether or not the guarantor is the surviving entity in such transaction to a person that is not an Issuer or a Restricted Subsidiary of an Issuer, such guarantor will be released from its obligations under its guarantee if the sale or other disposition does not violate the covenants set forth in the indentures governing the applicable Senior Notes.

1 unchanged sentence

if the Issuers designate such subsidiary as an unrestricted subsidiary and such designation complies with the other applicable provisions of the indenture governing the applicable Senior Notes or in connection with any covenant defeasance, legal defeasance or satisfaction and discharge of the applicable Senior Notes.

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

During the years ended December 31, 2019, 2020 and 2021, all of the Company’s assets and operations are attributable to the Issuers and its guarantors.

(11) Accrued Liabilities

Accrued liabilities as of December 31, 2019 and 2020 consisted of the following items:

Accrued liabilities consisted of the following items:

(in thousands)

2 unchanged sentences

Interest expense

Production taxes

Ad valorem taxes

Total accrued liabilities

(12) Equity-Based Compensation and Retention Awards

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

(12) Equity-Based Compensation and Cash Awards

(a) Summary of 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).

The Company’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 Partners was $ 4.9 million for the period from March 13, 2019 to December 31, 2019 and $ 5.2 million for the year ended December 31, 2020.

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 $ 8 million as of December 31, 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.

The Company does not reimburse Antero Resources for noncash equity compensation allocated to it for awards issued under the AR LTIP.

Exchanged B Units

The Company’s equity-based compensation prior to the Transactions includes costs related to (i) the Antero Midstream GP LP Long-Term Incentive Plan (“AMGP LTIP”) and (ii) the Series B Units.

The Company’s equity-based compensation after the Transactions includes (i) costs related to the Exchanged B Units (as defined below), (ii) costs allocated to Antero Midstream by Antero Resources for grants made prior to the Transactions pursuant to the Antero Resources Corporation Long-Term Incentive Plan (the “AR LTIP”) and (iii) costs related to the Antero Midstream Corporation Long-Term Incentive Plan (the “AM LTIP”).

Antero Midstream’s equity-based compensation expense is included in general and administrative expenses, and recorded as a credit to the applicable classes of equity.

On April 17, 2017, Antero Midstream GP LP adopted the AMGP LTIP pursuant to which certain non-employee directors of Antero Midstream GP LP’s general partner and certain officers, employees and consultants of Antero Resources were eligible to receive awards representing equity interests in Antero Midstream GP LP.

Expenses related to these awards were recognized on a straight-line basis over the requisite service period of the entire award.

Forfeitures were accounted for as they occurred by reversing the expense previously recognized for awards that were forfeited during the period.

In connection with the Transactions, the AMGP LTIP was terminated on March 12, 2019.

Series B Units and Exchanged B Units

As of December 31, 2018, IDR Holdings had 98,600 Series B Units authorized and outstanding that entitled the holders to receive up to 6 % of the amount of the distributions that Antero Midstream Partners made on its incentive distribution rights (“IDRs”) in excess of $ 7.5 million per quarter, subject to certain vesting conditions.

5 unchanged sentences

On March 12, 2019, which is the modification date, the Company determined the estimated fair value of the unvested Series B Unit awards using a Monte Carlo simulation using various assumptions including a floor equity value of $ 2.0 billion, expected volatility of 40 % based on historical volatility of a peer group of publicly traded partnerships, a risk free rate of 2.51 % and expected IDR distributions based on internal estimates discounted based on a weighted average cost of capital assumption of 7.25 %.

Based on these assumptions, the estimated value of each Series B Unit was $ 1,257 when exchanged for shares of the

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

Company’s common stock.

Based on these assumptions, the estimated value of each Series B Unit was $ 1,257 when exchanged for shares of the Company’s common stock.

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.

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Forfeitures were accounted for as they occur by reversing the expense previously recognized for awards that were forfeited during the period.

The Company recognized $ 66 million of equity-based compensation expense related to the Series B awards, including the Series B Units prior to the Closing of the Transactions and the Exchanged B Units following the Closing of the Transactions, for the year ended December 31, 2019.

For the year ended December 31, 2018, the Company recognized $ 34 million of equity-based compensation expense related to the Series B Units.

For the years ended December 31, 2018 and 2019, the Company recognized expense of $ 0.7 million and $ 0.2 million, respectively, related to these awards.

Expenses related to these awards were recognized on a straight-line basis over the requisite service period of the entire award.

Forfeitures were accounted for as they occur by reversing the expense previously recognized for awards that were forfeited during the period.

In connection with the Transactions, the AMGP LTIP was terminated on March 12, 2019.

No expense was recognized for the year ended December 31, 2020.

Equity-based compensation expense allocated to Antero Midstream from Antero Resources was $ 5 million, $ 5 million and $ 2 million for the years ended December 31, 2019, 2020 and 2021, respectively, which includes expense related to the Converted AM RSU Awards (as defined below).

A portion of this will be allocated to Antero Midstream as it is amortized over the remaining service period of the related awards.

The Company does not reimburse Antero Resources for noncash equity compensation

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

allocated to it for awards issued under the AR LTIP.

Effective March, 12, 2019, the Board of Directors of Antero Midstream Corporation (the “Board”) adopted the AM LTIP under which awards may be granted to employees, directors and other service providers of the Company and its affiliates.

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As of December 31, 2021, a total of 10,049,306 shares were available for future grant under the AM LTIP.

For the years ended December 31, 2019 and 2020, the Company recognized expense of $ 2.7 million and $ 7.6 million, respectively, related to these awards.

Expenses related to restricted stock units (“RSUs”) are recognized on a straight-line basis over the requisite service period of the entire award.

Forfeitures are accounted for as they occur by reversing the expense previously recognized for awards that were forfeited during the period.

The Company’s equity-based compensation expense, by type of award, is as follows:

Year Ended December 31,

(in thousands)

Series B Units and Exchanged B Units

Stock options (1)

Restricted stock units (1)

Performance share units (1)

Equity awards issued to directors

Total expense

(1) Amounts include equity-based compensation expense allocated to the Company by Antero Resources.

(b) Restricted Stock Unit Awards

As part of the Transactions, each of the unvested outstanding phantom units granted under the AMP LTIP was assumed by the Company and converted into 1.8926 RSUs under the AM LTIP representing a right to receive shares of the Company’s common stock for each converted phantom unit.

As part of the Transactions, each of the unvested outstanding phantom units granted under the Antero Midstream Partners Long Term Incentive Plan was assumed by the Company and converted into 1.8926 RSUs under the AM LTIP representing a right to receive shares of the Company’s common stock for each converted phantom unit (all such RSUs, the “Converted AM RSU Awards”).

The Converted AM RSU Awards are accounted for as if they are distributed by Antero Midstream Partners to Antero Resources.

Therefore, the expense related to the Converted AM RSU Awards is subject to allocation by Antero Resources.

RSU awards vest subject to the satisfaction of service requirements.

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Forfeitures are accounted for as they occur by reversing the expense previously recognized for awards that were forfeited during the period.

The grant date fair values of these awards are determined based on the closing price of the Company’s common stock on the date of the grant.

Summary Information for Restricted Stock Unit Awards

A summary of the RSU awards activity during the year ended December 31, 2020 is as follows:

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

Intrinsic Value

(in thousands)

The grant date fair values of these awards are based on the closing price of the Company’s common stock on the date of the grant.

A summary of the RSU awards activity, which includes the Converted AM RSU Awards, is as follows:

Weighted Average

Total AM LTIP RSUs awarded and unvested—December 31, 2020

( 1,293,498 )

Total AM LTIP RSUs awarded and unvested—December 31, 2021

Intrinsic values are based on the closing price of the Company’s common shares on the referenced dates.

As of December 31, 2020, unamortized expense of $ 19 million related to the unvested RSUs is expected to be recognized over a weighted average period of approximately 2.4 years and the Company’s proportionate share will be allocated to it as it is recognized.

As of December 31, 2021, unamortized expense of $ 21.1 million related to the unvested RSUs, which includes $ 0.3 million related to the Converted AM RSU Awards, is expected to be recognized over a weighted average period of approximately 2.7 years.

The Company’s proportionate share of the Converted AM RSU Awards will be allocated to it as it is recognized.

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

Performance Share Unit Awards Based on Return on Invested Capital (“ROIC”)

In 2019, the Company granted performance share units (“PSUs”) to certain of its employees and executive officers, a portion of which vest based on the Company’s actual ROIC (as defined in the award agreement) over a three-year period as compared to a targeted ROIC (“ROIC PSUs”).

In 2019, the Company granted performance share units (“PSUs”) to certain of its employees and executive officers, a portion of which vest based on the Company’s actual return on invested capital (“ROIC”) (as defined in the award agreement) over a three-year period as compared to a targeted ROIC (“ROIC PSUs”).

The number of shares of common stock that may ultimately be earned with respect to the ROIC PSUs ranges from zero to 200 % of the target number of ROIC PSUs originally granted.

The grant date fair value of these awards was based on the closing price of the Company’s common stock on the date of the grant, assuming target achievement of the performance condition.

Expense related to the ROIC PSUs is recognized based on the number of shares of common stock that are expected to be issued at the end of the measurement period, and such expense is reversed if the likelihood of achieving the performance condition decreases.

The likelihood of achieving the performance conditions related to ROIC PSU awards outstanding was probable for the years ended December 31, 2019, 2020 and 2021.

On December 17, 2019, the compensation committee of the Board modified the terms for the ROIC PSU agreement.

Accordingly, the Company accounted for the amended agreement as a share-based payment modification under ASC 718, Stock Compensation and revalued the awards as of the modification date.

Expense for the awards are recognized on a straight-line basis over the requisite service period of the entire award.

In 2019 and 2020, the likelihood of achieving the performance conditions related to ROIC PSU awards outstanding was probable and, therefore, for the years ended December 31, 2019 and 2020, the Company recognized expense of $ 0.2 million and $ 0.3 million, respectively .

Summary Information for Performance Share Unit Awards

A summary of PSU activity for the year ended December 31, 2020 is as follows:

Total awarded and unvested—December 31, 2019

Total awarded and unvested—December 31, 2020

A summary of PSU activity is as follows:

Weighted Average

Total AM LTIP PSUs awarded and unvested—December 31, 2020

Total AM LTIP PSUs awarded and unvested—December 31, 2021

As of December 31, 2021, there was $ 0.1 million of unamortized equity-based compensation expense related to unvested PSUs that is expected to be recognized over a weighted average period of 0.3 years.

(d) Cash Retention Awards

In January 2020, the Company granted cash awards of $ 2.2 million to certain executives under the AM LTIP that vest ratably

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

over a period of up to three years .

In January 2020, the Company granted cash awards of $ 2 million to certain executives under the AM LTIP that vest ratably over a period of up to three years .

In July 2020, the Company granted additional cash awards of $ 1 million to certain non-executive employees under the AM LTIP that vest ratably over a period of four years .

The compensation expense for these awards is recognized ratably over the applicable vesting period.

As of December 31, 2020, the Company has accrued $ 1.8 million in other liabilities in the consolidated balance sheet related to cash awards.

As of December 31, 2020 and 2021, the Company has accrued $ 2 million and $ 1 million, respectively, in other liabilities in the consolidated balance sheet related to unvested cash awards.

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

(13) Cash Distributions and Dividends

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Distributions/

Distribution/

Distributions/

Distribution Date

Dividend Date

February 1, 2019

February 21, 2019

April 26, 2019

July 26, 2019

August 7, 2019

August 14, 2019

September 18, 2019

November 1, 2019

November 13, 2019

November 14, 2019

December 31, 2019

January 31, 2020

February 12, 2020

February 14, 2020

April 30, 2020

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August 14, 2020

September 18, 2019

November 1, 2019

August 14, 2020

October 29, 2020

November 12, 2020

1 unchanged sentence

November 16, 2020

December 31, 2019

January 31, 2020

February 3, 2021

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February 16, 2021

April 28, 2021

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On January 12, 2022, the Board announced the declaration of a cash dividend on the shares of AM common stock of $ 0.225 per share for the quarter ended December 31, 2021.

The dividend will be payable on February 11, 2021 to stockholders of record as of February 3, 2021.

The dividend was paid on February 9, 2022 to stockholders of record as of January 26, 2022.

The Company pays dividends (i) out of surplus or (ii) if there is no surplus, out of the net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year, as provided under Delaware law.

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 February 16, 2021 in accordance with the terms of the Series A Preferred Stock, which are discussed in Note 14—Equity and Earnings Per Common Share.

The Board also declared a cash dividend of $ 138 thousand on the shares of Series A Preferred Stock of Antero Midstream Corporation that was paid on February 14, 2022 in accordance with the terms of the Series A Preferred Stock, which are discussed in Note 14—Equity and Earnings Per Common Share.

As of December 31, 2021, there were dividends in the amount of $ 69 thousand accumulated in arrears on the Company’s Series A Preferred Stock.

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(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:

The following is a reconciliation of the Company’s basic weighted average shares outstanding to diluted weighted average shares outstanding:

Year Ended December 31,

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Dilutive effect of RSUs

Dilutive effect of PSUs

Dilutive effect of Series A Preferred Stock

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Weighted average number of outstanding equity awards excluded from calculation of diluted earnings per common share (1):

Series B Units

Preferred shares

Series A Preferred Shares

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.

Earnings per common share—basic for (i) the year ended December 31, 2018 is computed by dividing net income attributable to AMGP by the basic weighted average number of common shares representing limited partner interest in AMGP outstanding during the period and (ii) the years ended December 31, 2019 and 2020 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—basic is computed by dividing net income (loss) attributable to Antero Midstream by the basic weighted average number of shares 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.

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Net income (loss)

Less net income attributable to Series B Units

Less preferred stock dividends

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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 delivered 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.

This contingent consideration liability was valued based on Level 3 inputs related to expected average volumes and weighted average cost of capital.

ANTERO MIDSTREAM CORPORATION

13 unchanged sentences

Other Assets and Liabilities

The carrying values of accounts receivable and accounts payable at December 31, 2019 and 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 2020 approximated fair value because the variable interest rates are reflective of current market conditions.

The carrying values of accounts receivable and accounts payable as of December 31, 2020 and 2021 approximated fair value because of their short-term nature.

The carrying value of the amounts under the Credit Facility as of December 31, 2020 and 2021 approximated fair value because the variable interest rates are reflective of current market conditions.

(16) Investments in Unconsolidated Affiliates

Summary of 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, 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 to develop processing and fractionation assets with MarkWest, a wholly owned subsidiary of MPLX, LP.

The Company has a 50 % equity interest in the Joint Venture to develop processing and fractionation assets with MarkWest, a wholly owned subsidiary of MPLX.

The Joint Venture was formed to develop processing and fractionation assets in Appalachia.

2 unchanged sentences

When the Company records its proportionate share of net income, it increases equity income in the consolidated statements of operations and comprehensive income and the carrying value of that investment on its balance sheet.

When distributions on the

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

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 approach under FASB ASC Topic 230, Statement of Cash Flows .

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 approach under FASB ASC Topic 230, Statement of Cash Flows .

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.

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

The following table is a reconciliation of the Company’s investments in these unconsolidated affiliates:

3 unchanged sentences

Joint Venture

Balance at December 31, 2018

Distributions from unconsolidated affiliates

Balance at March 12, 2019

Investments in unconsolidated affiliates acquired from Antero Midstream Partners

Balance as of December 31, 2019

Additional investments

1 unchanged sentence

Distributions from unconsolidated affiliates

Balance at December 31, 2019

Balance as of December 31, 2020

Additional investments

1 unchanged sentence

Distributions from unconsolidated affiliates

Balance at December 31, 2020

Balance as of December 31, 2021

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 closing date of the Transaction.

10 unchanged sentences

Total liabilities and partners' capital

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

Statements of Combined Operations

5 unchanged sentences

Net income attributable to unconsolidated affiliates

(17) 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 two reporting segments:

(17) Reportable Segments

Prior to the closing of the Transactions, the Company had no reportable segment results.

Following the completion of the Transactions, the Company’s operations, which are located in the United States, are organized into two reportable segments:

(i) gathering and processing and (ii) water handling.

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

Gathering and Processing

2 unchanged sentences

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.

The Company’s water handling segment includes two independent systems that deliver water from sources including the Ohio River, local reservoirs and several regional waterways, which portions of these systems are also utilized to transport flowback and produced water.

The water handling systems consist of permanent buried pipelines, surface pipelines and water storage facilities, as well as pumping stations, blending facilities and impoundments to transport water throughout the systems used to deliver water to Antero Resources’ well completions.

In addition, 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.

See Note 8—Property and Equipment for additional information.

These segments are monitored separately by management for performance and are consistent with internal financial reporting.

2 unchanged sentences

Interest expense is primarily managed and evaluated on a consolidated basis.

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

The summarized operating results and assets of the Company’s reportable segments were as follows for the year ended December 31, 2019 and 2020 (in thousands):

The summarized operating results and assets of the Company’s reportable segments are as follows:

Year Ended December 31, 2019

Gathering and

1 unchanged sentence

Unallocated (1)

Year ended December 31, 2019

Revenue–Antero Resources

4 unchanged sentences

Direct operating

General and administrative (excluding equity-based compensation)

Equity-based compensation

General and administrative

Facility idling

Impairment of goodwill

Impairment of property and equipment

Impairment of goodwill

Impairment of customer relationships

8 unchanged sentences

Notes to Consolidated Financial Statements (Continued)

Year Ended December 31, 2020

Gathering and

1 unchanged sentence

Unallocated (1)

Year ended December 31, 2020

Revenue–Antero Resources

3 unchanged sentences

Direct operating

General and administrative (excluding equity-based compensation)

Equity-based compensation

General and administrative

Facility idling

Impairment of goodwill

Impairment of property and equipment

Impairment of goodwill

Accretion of asset retirement obligations

3 unchanged sentences

Equity in earnings of unconsolidated affiliates

Additions to property and equipment, net

Additions to property and equipment

Certain expenses that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis.

(18) Quarterly Financial Information (Unaudited)

The Company’s quarterly consolidated unaudited financial information for the years ended December 31, 2019 and 2020 is summarized in the table below (in thousands, except per share data):

Year Ended December 31, 2021

Total operating revenues

Total operating expenses

Operating income (loss)

Net income (loss) and comprehensive income (loss)

Net income (loss) per common share–basic

Net income (loss) per common share–diluted

Year ended December 31, 2020

Total operating revenues

Gathering and

(in thousands)

Unallocated (1)

Revenue–Antero Resources

Revenue–third-party

Amortization of customer relationships

Total revenues

Operating expenses:

Direct operating

General and administrative

Facility idling

Impairment of property and equipment

Accretion of asset retirement obligations

Loss on asset sale

Total operating expenses

Operating income (loss)

Net income (loss) and comprehensive income (loss)

Net income (loss) per common share–basic

Net income (loss) per common share–diluted

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

Operating income

Equity in earnings of unconsolidated affiliates

Additions to property and equipment, net

Certain expenses that are not directly attributable to gathering and processing and water handling are managed and evaluated on a consolidated basis.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures