What changed in this filing

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Item 9A. Controls and Procedures

2023-02-15 compared with 2022-02-16 · 289 added, 382 removed, 919 unchanged (42% of the section changed)

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As required by Rule 13a-15(b) under the Exchange Act we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d- 15(e) under the Exchange Act) as of the end of the period covered by this annual report.

Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC.

Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2022 at a reasonable assurance level.

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Other Information

Amended and Restated Bylaws

On February 14, 2023, the Board approved an amendment and restatement of the Company’s bylaws (as amended and restated, the “A&R Bylaws”), effective as of such date.

Among other matters, the A&R Bylaws:

● revise procedures and disclosure requirements for the nomination of directors to address new Rule 14a-19 of the Exchange Act;

● make other minor administrative, modernizing, clarifying and conforming changes, including adding certain clarifying language to better conform the A&R Bylaws to the DGCL.

The foregoing summary of the amendments to the Company’s bylaws does not purport to be complete and is qualified in its entirety by reference to the complete text of the A&R Bylaws, a copy of which is filed as Exhibit 3.3 to this Annual Report on Form 10-K and is incorporated herein by reference.

disclosure regarding foreign jurisdictions that prevent inspections

Not applicable.

Director s, Executive Officers, and Corporate Governance

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

Bylaws of Antero Midstream Corporation, dated March 12, 2019 (incorporated by reference to Exhibit 3.4 to the Company’s Current Report on Form 8-K (Commission File No.

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

Amended and Restated Bylaws of Antero Midstream Corporation, dated February 14, 2023.

Certificate of Designations of Antero Midstream Corporation, dated March 12, 2019 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (Commission File No.

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

Indenture, dated as of November 10, 2020, 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.

(incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (Commission File No.

001-38075) filed on November 10, 2020)

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

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.

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).

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001-38075) filed on October 28, 2020).

Form of Performance Share Unit Grant Notice and Performance Share Unit Agreement under the Antero Midstream Corporation Long Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (Commission File No.

001-38075) filed on July 27, 2022).

Stockholders’ Agreement, dated as of October 9, 2018, by and among Antero Midstream GP LP, Arkrose Subsidiary Holdings LLC, Paul M.

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The following financial information from this Form 10-K of Antero Midstream Corporation for the year ended December 31, 2022, 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.

(i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income (Loss), (iii) Consolidated Statements of Stockholders’ 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 (embedded within the Inline XBRL document).

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(principal financial officer)

Vice President – Accounting and Chief Accounting Officer

Senior Vice President – Accounting and

Chief Accounting Officer

February 15, 2023

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February 15, 2023

HOWARD KEENAN, JR.

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February 15, 2023

February 16, 2022

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Audited Historical Consolidated Financial Statements as of December 31, 2020 and 2021 and for the Years Ended December 31, 2019, 2020 and 2021

Audited Consolidated Financial Statements as of December 31, 2021 and 2022 and for the Years Ended December 31, 2020, 2021 and 2022

Report of Independent Registered Public Accounting Firm

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Consolidated Statements of Operations and Comprehensive Income (Loss)

Consolidated Statements of Partners’ Capital and Stockholders’ Equity

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Cash Flows

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Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of Antero Midstream Corporation and subsidiaries (the Company) as of December 31, 2020 and 2021, 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, 2021, and the related notes (collectively, the consolidated financial statements).

We have audited the accompanying consolidated balance sheets of Antero Midstream Corporation and subsidiaries (the Company) as of December 31, 2021 and 2022, the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2022, 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, 2022, based on criteria established in Internal Control –Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

Critical Audit Matter

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:

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Lease classification for ongoing modifications to the gathering and compression assets

As discussed in Note 7 to the consolidated financial statements, the Company determined that the gathering and compression agreement with Antero Resources Corporation is an operating lease.

As discussed in Note 5 to the consolidated financial statements, the Company determined that the gathering and compression agreements with Antero Resources Corporation are operating leases.

The Company continues to expand its gathering and compression system to serve its customer and, as a result, the minimum volume commitments and the lease payments increase for the expanded system.

The increases in volume commitments and lease payments are modifications of the agreement that require evaluation of the lease classification.

The increases in volume commitments and lease payments are modifications of the agreements that require evaluation of the lease classification.

We identified the evaluation of lease classification for ongoing modifications to the gathering and compression assets as a critical audit matter.

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

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

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 design and tested the operating effectiveness of the 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.

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.

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Current assets:

Cash and cash equivalents

Accounts receivable–Antero Resources

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Investments in unconsolidated affiliates

Deferred income tax asset

Customer relationships

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Additional paid-in capital

Accumulated deficit

Retained earnings (accumulated deficit)

Total stockholders' equity

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Impairment of goodwill

Impairment of customer relationships

Accretion of asset retirement obligations

Accretion and change in fair value of contingent acquisition consideration

Loss on asset sale

Loss on settlement of asset retirement obligations

Loss (gain) on asset sale

Total operating expenses

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ANTERO MIDSTREAM CORPORATION

Consolidated Statements of Partners’ Capital and Stockholders’ Equity

Consolidated Statements of Stockholders’ Equity

(In thousands)

Retained Earnings

Balance at December 31, 2019

Distributions to unitholders

Net loss and comprehensive loss pre-acquisition

Equity-based compensation pre-acquisition

Exchange of common shares for shares of common stock and cash consideration paid

Issuance of Series A non-voting perpetual preferred stock

Dividends to stockholders

Equity-based compensation post-acquisition

Equity-based compensation

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

Repurchases and retirement of common stock

Net loss and comprehensive loss post-acquisition

Net loss and comprehensive loss

Balance at December 31, 2020

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

Repurchases and retirement of common stock

Net loss and comprehensive loss

Net income and comprehensive income

Balance at December 31, 2021

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

Accretion and change in fair value of contingent acquisition consideration

Accretion of asset retirement obligations

Payment of contingent consideration in excess of acquisition date fair value

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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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Settlement of asset retirement obligations

Loss on asset sale

Loss on settlement of asset retirement obligations

Loss (gain) on asset sale

Loss on early extinguishment of debt

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Accounts payable–third party

Income taxes payable

Accrued liabilities

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Investments in unconsolidated affiliates

Cash received on acquisition of Antero Midstream Partners LP

Cash consideration paid to Antero Midstream Partners LP unitholders

Return of investment in unconsolidated affiliate

Acquisition of gathering systems and facilities

Cash received in asset sale

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Dividends to preferred stockholders

Distributions to Series B unitholders

Repurchases of common stock

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Payments of deferred financing costs

Repayments on bank credit facilities, net

Borrowings (repayments) on bank credit facilities, net

Payment of contingent acquisition consideration

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Cash paid during the period for interest

Cash received (paid) during the period for income taxes

Cash received during the period for income taxes

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

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(1) Organization

Antero Midstream Corporation was originally formed as Antero Resources Midstream Management LLC in 2013 to become the general partner of Antero Midstream Partners LP (“Antero Midstream Partners”).

On May 4, 2017, Antero Resources Midstream Management LLC converted from a limited liability company to a limited partnership under the laws of the State of Delaware and changed its name to Antero Midstream GP LP (“AMGP”) in connection with its initial public offering.

On March 12, 2019, pursuant to the Simplification Agreement, dated as of October 9, 2018, by and among AMGP, Antero Midstream Partners and certain of their affiliates (the “Simplification Agreement”), (i) AMGP was converted from a limited partnership to a corporation under the laws of the State of Delaware and changed its name to Antero Midstream Corporation (the “Conversion”), (ii) an indirect, wholly owned subsidiary of Antero Midstream Corporation was merged with and into Antero Midstream Partners, with Antero Midstream Partners surviving the merger as an indirect, wholly owned subsidiary of Antero Midstream Corporation (the “Merger”) and (iii) Antero Midstream Corporation exchanged (the “Series B Exchange” and, together with the Conversion, the Merger and the other transactions pursuant to by the Simplification Agreement, the “Transactions”) each issued and outstanding Series B Unit (the “Series B Units”) representing a membership interest in Antero IDR Holdings LLC (“IDR Holdings”) for 176.0041 shares of its common stock, par value $ 0.01 per share (“AM common stock”) .

As a result of the Transactions, Antero Midstream Partners became and is now a wholly owned subsidiary of Antero Midstream Corporation and former shareholders of AMGP, unitholders of Antero Midstream Partners, including Antero Resources, 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.

Antero Midstream Corporation together with its consolidated subsidiaries (the “Company” or “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.

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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.

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”).

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

Antero Midstream also has a 50 % equity interest in the Joint Venture and a 15 % equity interest in a gathering system of Stonewall.

See Note 14—Investments in Unconsolidated Affiliates.

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Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).

The accompanying consolidated financial statements have been prepared in accordance with GAAP.

In the opinion of management, these consolidated financial statements include all adjustments (consisting of normal and recurring accruals) considered necessary to present fairly the Company’s financial position as of December 31, 2021 and 2022, and the results of the Company’s operations and its cash flows for the years ended December 31, 2020, 2021 and 2022.

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therefore, net income (loss) is equal to comprehensive income (loss).

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

Certain costs of doing business incurred and charged to the Company by Antero Resources have been reflected in the accompanying consolidated financial statements.

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Principles of Consolidation

The accompanying consolidated financial statements include (i) for the period prior to March 13, 2019, the accounts of AMGP and its consolidated subsidiaries, which did not include Antero Midstream Partners and its subsidiaries, and (ii) for the period beginning on March 13, 2019, the accounts of Antero Midstream Corporation and its consolidated subsidiaries, including Antero Midstream Partners and its subsidiaries, which were acquired in the Transactions.

See Note 3—Business Combination.

The accompanying consolidated financial statements include the accounts of Antero Midstream Corporation and its wholly owned subsidiaries.

All significant intercompany accounts and transactions have been eliminated in the Company’s consolidated financial statements.

Prior to the Transactions on March 12, 2019, AMGP had determined that Antero Midstream Partners was a variable interest entity (“VIE”) for which AMGP was not the primary beneficiary and therefore did not consolidate.

AMGP concluded that Antero Resources was the primary beneficiary of Antero Midstream Partners and Antero Resources consolidated its financial results.

Antero Resources was the primary beneficiary based on its power to direct the activities that most significantly impacted Antero Midstream Partners’ economic performance and its obligations to absorb losses or receive benefits of Antero Midstream Partners that would be significant to Antero Midstream Partners.

Antero Resources owned approximately 53 % of the outstanding limited partner interests in Antero Midstream Partners prior to the Transactions and its officers and management group also acted as management of Antero Midstream Partners.

AMGP did not own any limited partnership interests in Antero Midstream Partners and had no capital interests in Antero Midstream Partners.

AMGP did not provide financial support to Antero Midstream Partners.

AMGP’s ownership of the non-economic general partner interest in Antero Midstream Partners prior to the Transactions provided AMGP with significant influence over Antero Midstream Partners, but not control over the decisions that most significantly impacted the economic performance of Antero Midstream Partners.

AMGP’s indirect ownership of the IDRs of Antero Midstream Partners prior to the Transactions entitled AMGP to receive cash distributions from Antero Midstream Partners when distributions exceeded certain target amounts.

AMGP’s ownership of these interests prior to the Transactions did not require AMGP to provide financial support to Antero Midstream Partners.

AMGP obtained these interests upon its formation for no consideration.

Therefore, AMGP had no cost basis and classified its investment in Antero Midstream Partners as a long term investment.

Prior to the Transactions, AMGP’s share of Antero Midstream Partner’s earnings were 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 Antero Midstream Partners 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.

Investments in entities for which the Company exercises significant influence, but not control, are accounted for under the equity method.

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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 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 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 other fluid handling services provided by third parties, the third-party costs the Company incurs plus 3 % or (iv) 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.

Items subject to estimates and assumptions include the useful lives of property and equipment, 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 facilities;

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

Property and equipment primarily consists of (i) gathering pipelines, (ii) compressor stations, (iii) the wastewater treatment facility (the “Clearwater Facility”), (iv) other flowback and produced water facilities and (v) water handling pipelines and facilities stated at historical cost less accumulated depreciation, amortization and impairment.

The Company capitalizes construction-related direct labor and material costs.

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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

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

arising from landfill final capping, closure and post-closure obligations.

Amortization expense is recorded on a units-of-consumption basis, applying cost as a rate per-cubic yard.

The rate per-cubic yard is calculated by dividing each component of the amortizable basis of the landfill by the number of cubic yards needed to fill the corresponding asset’s airspace.

Landfill capital costs and closure and post-closure asset retirement costs are generally incurred to support the operation of the landfill over its entire operating life and are, therefore, amortized on a per-cubic yard basis using a landfill’s total airspace capacity.

Estimates of disposal capacity and future development costs are created using input from independent engineers and internal technical teams and are reviewed at least annually.

The Company evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying values of the assets may not be recoverable.

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If the carrying values of the assets are deemed not recoverable, the carrying values are reduced to the estimated fair values, which are based on discounted future cash flows using assumptions as to revenues, costs and discount rates typical of third-party market participants, which is a Level 3 fair value measurement.

The Company recognized an impairment with respect to the Clearwater Facility during the year ended December 31, 2019.

See Note 4—Clearwater Facility Idling.

The Company recognized a $ 90 million impairment with respect to the freshwater delivery system during the year ended December 31, 2020.

See Note 6— Property and Equipment for further information on property and equipment impairments.

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

During the year ended December 31, 2022, the Company acquired certain Marcellus gas gathering and compression assets and Utica compression assets.

These transactions were accounted for as asset acquisitions in accordance with FASB ASC Topic 805-50, Business Combinations, Related Issues (“ASC 805-50”).

Accordingly, the acquired assets were recorded based upon the cash consideration paid, with all value assigned to Property and equipment in the consolidated balance sheets.

See Note 6— Property and Equipment for further information on asset acquisitions.

Asset Retirement Obligations

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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.

During the year ended December 31, 2021, the Company commenced closure and reclamation operations on the landfill, and such closure and reclamation operations are currently ongoing as of December 31, 2022.

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

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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.

See Note 4—Clearwater Facility Idling.

The Company (i) 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 or (ii) intends to operate and maintain its assets as long as supply and demand for natural gas exists, which the Company expects to continue into the foreseeable future.

Litigation and Other Contingencies

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The ultimate amount of losses, if any, may differ from these estimates.

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

Any contingency that could result in a gain is recorded when realized.

The Company accrues losses associated with environmental obligations when such losses are probable and can be reasonably estimated.

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As of December 31, 2021 and 2022, the Company had not recorded any liabilities for litigation, environmental or other contingencies.

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

Equity-Based Compensation

The Company’s consolidated financial statements include equity-based compensation costs related to awards granted by its own plans, as in place before and after the Transactions, as well as costs allocated by Antero Resources for grants made prior to the Transactions.

The Company’s consolidated financial statements include equity-based compensation costs related to awards granted by its own plans, as in place before and after March 12, 2019, as well as costs allocated by Antero Resources for grants made prior to March 12, 2019.

Costs allocated from Antero Resources are offset to additional paid in capital on the consolidated balance sheet.

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In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted.

The CARES Act allows corporations with net operating losses (“NOLs”) incurred in 2018, 2019 and 2020 to carry back such NOLs to each of the five years preceding the year of the NOLs, beginning with the earliest year in which there was taxable income, and claim an income tax refund in the applicable carryback years.

As a result of this NOLs carryback provision in the CARES Act, the Company was able to recognize an income tax refund receivable in March 2020 of $ 55 million, including $ 11 million in income tax benefit for the current year and $ 44 million of previously recognized deferred income tax benefit.

The CARES Act allows corporations with NOL carryforwards incurred in 2018, 2019 and 2020 to carryback such NOL carryforwards to each of the five years preceding the year of the NOL carryforwards, beginning with the earliest year in which there was taxable income, and claim an income tax refund in the applicable carryback years.

As a result of this NOL carryforwards 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, 2021, the Company had received all of this refund.

Fair Value Measures

The Financial Accounting Standards Board (the “FASB”) ASC Topic 820, Fair Value Measurements and Disclosures , clarifies the definition of fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.

The FASB ASC Topic 820, Fair Value Measurements and Disclosures , clarifies the definition of fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.

This guidance also relates to all nonfinancial assets and liabilities that are not recognized or disclosed on a recurring basis (e.g., the initial recognition of asset retirement obligations and impairments of long- lived assets).

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The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

The highest priority (Level 1) is given to unadjusted quoted market prices in active markets for identical assets or liabilities, and the lowest priority (Level 3) is given

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

to unobservable inputs.

The highest priority (Level 1) is given to unadjusted quoted market prices in active markets for identical assets or liabilities, and the lowest priority (Level 3) is given to unobservable inputs.

Level 2 inputs are data, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly.

The carrying values on the consolidated balance sheet of the Company’s cash and cash equivalents, accounts receivable—Antero Resources, accounts receivable—third party, other current assets, accounts payable—Antero Resources, accounts payable—third party, accrued liabilities and, other current liabilities approximate fair values due to their short-term maturities.

The assets and liabilities of Antero Midstream Partners were recorded at fair value as of the acquisition date, March 12, 2019 (see Note 3—Business Combination).

Additionally, the Company uses certain valuation techniques in performing its annual goodwill impairment test described below and in determining the fair value of property and equipment, both of which were subject to impairment write downs during the years ended December 31, 2019 and 2020.

The Company uses certain valuation techniques in performing its annual goodwill impairment test described below and in determining the fair value of property and equipment.

See Note 13—Fair Value Measurement.

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

Investments in Unconsolidated Affiliates

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See Note 14—Investments in Unconsolidated Affiliates.

Business Combinations

The Company recognizes and measures the assets acquired and liabilities assumed in a business combination based on their estimated fair values at the acquisition date, with any remaining difference recorded as goodwill.

For acquisitions, management engages an independent valuation specialist, as applicable, to assist with the determination of fair value of the assets acquired, liabilities assumed and goodwill, based on recognized business valuation methodologies.

If the initial accounting for the business combination is incomplete by the end of the reporting period in which the acquisition occurs, an estimate will be recorded.

Subsequent to the acquisition, and not later than one year from the acquisition date, the Company will record any material adjustments to the initial estimate based on new information obtained that would have existed as of the acquisition date.

An adjustment that arises from information obtained that did not exist as of the date of the acquisition will be recorded in the period of the adjustment.

Acquisition-related costs are expensed as incurred in connection with each business combination.

See Note 3—Business Combination.

Goodwill and Intangible Assets

6 unchanged sentences

If the fair value of the reporting unit is less than the carrying value, including goodwill, the excess of the book value over the fair value of goodwill is charged to net income as an impairment expense.

As of March 31, 2020, the Company’s goodwill was fully impaired.

See Note 3—Goodwill and Intangibles.

Amortization of intangible assets with definite lives is calculated using the straight-line method, which is reflective of the benefit pattern in which the estimated economic benefit is expected to be received over the estimated useful life of the intangible asset.

1 unchanged sentence

If the sum of the expected undiscounted future cash flows related to the asset is less than the carrying amount of the asset, an impairment loss is recognized based on the fair value of the asset.

As of March 31, 2020, the Company’s goodwill was fully impaired.

See Note 4—Clearwater Facility Idling and Note 5—Goodwill and Intangibles.

(n) Dividends

Preferred and common dividends declared are recorded as a reduction of retained earnings to the extent that retained earnings were available at the close of the quarter prior to the dividend declaration date, with any excess recorded as a reduction of additional paid-in capital.

Treasury Share Retirement

The Company periodically retires treasury shares acquired through share repurchases and returns those shares to the status of

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

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 deficit.

The Company periodically retires treasury shares acquired through share repurchases and returns those shares to the status of authorized but unissued.

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.

5 unchanged sentences

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

On March 12, 2019, AMGP and Antero Midstream Partners completed the Transactions.

The Transactions have been accounted for using the acquisition method of accounting with Antero Midstream Corporation identified as the acquirer of Antero Midstream Partners.

The components of the fair value of consideration transferred are as follows (in thousands):

Fair value of shares of AM common stock issued (1)

Total fair value of consideration transferred

(1) The fair value of each share of AM common stock issued in connection with the Transactions was determined to be $ 12.54 , the closing price of AMGP common shares on March 12, 2019.

The final purchase price allocation of the Transactions are summarized in the table below.

The fair value of assets acquired and liabilities assumed at March 12, 2019 were as follows (in thousands):

Cash and cash equivalents

Accounts receivable–Antero Resources

Accounts receivable–third party

Other current assets

Property and equipment, net

Investments in unconsolidated affiliates

Customer relationships

Other assets, net

Total assets acquired

Accounts payable–Antero Resources

Accounts payable–third party

Accrued liabilities

Other current liabilities

Long-term debt

Contingent acquisition consideration

Other liabilities

Total liabilities assumed

Net assets acquired, excluding goodwill

Net assets acquired

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.

Substantially all of the goodwill is expected to be deductible for tax purposes.

Goodwill represented the efficiencies realized with simplifying the Company’s corporate structure to own, operate and develop midstream energy infrastructure primarily to service Antero Resources.

See Note 5—Goodwill and Intangibles.

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

These costs were expensed as general and administrative costs.

(4) Clearwater Facility Idling

On September 18, 2019, the Company commenced a strategic evaluation of the Clearwater Facility at which time, such facility was idled.

The Company expects the facility to be idled for the foreseeable future.

Accordingly, the Company performed an impairment analysis of the facility and determined:

(i) to reduce the carrying value of the facility to its estimated salvage value, which included the land associated with the Clearwater Facility;

(ii) the fair value of the goodwill assigned to the wastewater treatment reporting unit was less than its carrying value resulting in an impairment charge to goodwill;

and (iii) the customer relationships intangible asset was impaired.

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 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

Impairment of goodwill

Impairment of customer relationships

Total impairment expense

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.

(3) Goodwill and Intangibles

The Company evaluates goodwill for impairment annually during the fourth quarter and whenever events or changes in circumstances indicate it is more likely than not that the fair value of a reporting unit with goodwill is less than its carrying amount.

Significant assumptions used to estimate the reporting units’ fair value include the discount rate as well as estimates of future cash flows, which are impacted primarily by commodity prices and producer customers’ development plans (which impact volumes and capital requirements).

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

See Note 4—Clearwater Facility Idling.

During the fourth quarter of 2019, the Company incurred impairment charges of $ 298 million to its fresh water delivery and services reporting unit , which is in the water handling segment.

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

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.

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

capital requirements).

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

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

2 unchanged sentences

Goodwill as of December 31, 2019

Goodwill acquired (1)

Impairment of goodwill

Goodwill as of December 31, 2020

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 19 years , which reflects the remaining economic life of the relationships as of December 31, 2022.

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, 2019

Customer relationships acquired (1)

Amortization of customer relationships

Impairment of customer relationships

Customer relationships as of December 31, 2020

3 unchanged sentences

Customer relationships as of December 31, 2022

(1) See Note 3—Business Combination.

Future amortization expense is as follows (in thousands):

6 unchanged sentences

Substantially all revenues earned in the years ended December 31, 2020, 2021 and 2022 were earned from Antero Resources, under various agreements for gathering and compression and water handling services.

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

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

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

Accounts receivable—Antero Resources and Accounts payable—Antero Resources

2 unchanged sentences

Allocation of Costs Charged by Antero Resources

The employees supporting the Company’s operations are concurrently employed by Antero Resources and the Company.

The employees supporting the Company’s operations are concurrently employed by Antero Resources and the

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

Direct operating expense includes costs charged to the Company of $ 7 million, $ 9 million and $ 14 million during the years ended December 31, 2020, 2021 and 2022, respectively.

3 unchanged sentences

(i) various business services, including payroll processing, accounts payable processing and facilities management, (ii) various corporate services, including legal, accounting, treasury, information technology and human resources and (iii) compensation, including certain equity-based compensation.

These expenses are charged to the Company based on (i) the nature of the expenses and are apportioned based on a combination of the Company’s proportionate share of gross property and equipment, capital expenditures and labor costs, as applicable, and (ii) an annual management service fee.

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

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.

These expenses are charged to the Company based on the nature of the expenses and are apportioned based on a combination of the Company’s proportionate share of gross property and equipment, capital expenditures and labor costs, as applicable.

The Company reimburses Antero Resources directly for all general and administrative costs charged to it, except costs attributable to noncash equity-based compensation, see Note 10—Equity-Based Compensation and Cash Awards.

All of the Company’s gathering and compression revenues are derived from operating lease agreements, 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.

The Company also has an option to gather and compress natural gas produced by Antero Resources on any additional acreage it acquires during the term of the agreement outside of West Virginia, Ohio and Pennsylvania on the same terms and conditions.

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 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 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.

The gathering system is an identifiable asset within the gathering and compression agreement, and it consists of underground low pressure pipelines that generally connect and deliver gas from specific well pads to compressor stations to compress the gas before delivery to underground high pressure pipelines that transport the gas to a third-party pipeline or plant.

The gathering system is considered a single lease due to the interrelated network of the assets.

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

The Company’s gathering and compression service agreements with Antero Resources include:

(i) the 2019 gathering and compression agreement, (ii) Marcellus gathering and compression agreements and (iii) the Utica compression agreement.

See Note 6—Property and Equipment for additional information.

The 2019 gathering and compression agreement has an initial term through 2038, the Marcellus gathering and compression agreements expire between 2023 and 2031, and the Utica compression agreement has two dedicated areas that expire in 2024 and 2030.

Upon expiration of each of the Marcellus gathering and compression service agreements and the Utica compression agreement, the Company will continue to provide gathering and compression services under the 2019 gathering and compression agreement.

Pursuant to the gathering and compression agreements, 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.

The Company also has an option to gather and compress natural gas produced by Antero Resources on any additional acreage it acquires during the term of the 2019 gathering and compression agreement outside of West Virginia, Ohio and Pennsylvania on the same terms and conditions as the 2019 gathering compression agreement.

The 2019 gathering and compression agreement includes a growth incentive fee program whereby low pressure gathering fees will be reduced from 2020 through 2023 to the extent Antero Resources achieves certain quarterly volumetric targets during such time.

Antero Resources’ throughput on acquired assets is not considered in low pressure gathering volume targets.

For years ended December 31, 2020, 2021 and 2022, Antero Resources earned $ 48 million, $ 12 million and $ 48 million, respectively, in fee rebates.

Upon completion of the initial contract term in 2038, the 2019 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 agreements, the Company receives a low pressure gathering fee, a high pressure gathering fee and a compression fee, as applicable, substantially all of which are subject to annual CPI-based adjustments or a cost of service fee, as applicable, at the Company’s election when such assets are placed in-service.

In addition, the Company receives a reimbursement for certain variable costs, such as electricity and operating expenses.

The Company determined that its gathering and compression agreements are operating leases as Antero Resources obtains substantially all of the economic benefit of the asset and has the right to direct the use of the assets.

Each gathering and compression system is an identifiable asset, and consists of a network of assets that may include underground low pressure pipelines that connect and deliver gas from specific well pads to compressor stations to compress the gas before delivery to underground high pressure pipelines that transport the gas to a third-party pipeline, third-party plant or a Joint Venture plant.

Each compression system is an identifiable asset, and consists of a network of assets that include compressor stations that connect to underground high pressure pipelines that transport the gas to a third-party pipeline, third-party plant or a Joint Venture plant.

Each set of assets in an agreement are considered to be a single lease due to the interrelated network of the assets required to provide services under each respective agreement.

When a modification to an agreement occurs, the Company reassesses the classification of the 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 systems, which are performed on time-

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

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.

elapsed measures.

The gathering and compression agreements include 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 2019 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 placed in service.

In addition, the Marcellus gathering and compression agreements provide for a minimum volume commitment that requires Antero Resources to utilize or pay for 25 % of the capacity of new compressor station construction for 10 years .

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 agreements.

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

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

Minimum volume commitments are aggregated such that there is a single minimum volume commitment for the respective service each year for each agreement.

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 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):

Minimum future lease cash flows to be received by the Company under the gathering and compression agreements as of December 31, 2022 are as follows (in thousands):

Year ending December 31, 2023

5 unchanged sentences

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.

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

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 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.

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

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

1 unchanged sentence

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 .

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

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

The Company satisfies its performance obligations and recognizes revenue when (i) the fresh water volumes have been delivered to the hydration unit of a specified well pad or (ii) other fluid handling services have been completed .

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

The Company invoices the customer after the third-party provider billing is received, and payment is due in the same month.

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;

The Company’s water service agreement with Antero Resources has a term greater than one year.

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 contract, 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.

The Company also performs water services for third party customers, which contracts 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.

Under the Company’s water service contracts, the Company invoices customers after the performance obligations have been satisfied, at which point payment is unconditional.

Accordingly, the Company’s water service contracts do not give rise to contract assets or liabilities.

Disaggregation of Revenue

7 unchanged sentences

Gathering and Processing (1)

Gathering—low pressure rebate

Gathering—low pressure fee rebate

Gathering and Processing (1)

Gathering—high pressure

Gathering and Processing (1)

Gathering—high pressure

Gathering and Processing (1)

1 unchanged sentence

Water Handling

Wastewater treatment

Water Handling

Other fluid handling

7 unchanged sentences

Gathering and Processing (1)

Gathering—low pressure rebate

Gathering—low pressure fee rebate

Gathering and Processing (1)

10 unchanged sentences

(1) Revenue related to the gathering and processing segment is classified as lease income related to the gathering system.

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

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.

The Company’s receivables from its contracts with customers and operating leases as of December 31, 2021 and 2022 were $ 81 million and $ 86 million, respectively.

ANTERO MIDSTREAM CORPORATION

1 unchanged sentence

(6) Property and Equipment

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

(a) Summary of Property and Equipment

(in thousands)

10 unchanged sentences

(1) Gathering systems and facilities are recognized as a single-leased asset with no residual value.

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.

See Note 4—Clearwater Facility Idling to our consolidated financial statements for more information.

(b) Asset Acquisitions

On October 25, 2022, the Company acquired certain Marcellus gas gathering and compression assets from Crestwood for $ 205 million in cash, before closing adjustments.

These assets include 72 miles of dry gas gathering pipelines and nine compressor stations with approximately 700 MMcf/d of compression capacity.

The cash consideration for this asset acquisition was allocated to land and gathering systems and facilities, included in Property and equipment in the consolidated balance sheets, for $ 3 million and $ 202 million, respectively.

Additionally, on December 21, 2022, the Company acquired certain Utica compression assets from EnLink for $ 10 million in cash, before closing adjustments.

These assets include four compressor stations with approximately 380 MMcf/d of compression capacity.

The acquired compression assets are interconnected with the Company’s existing low pressure and high pressure gathering systems and service Antero Resources’ production.

The cash consideration for this asset acquisition was allocated to gathering systems and facilities included in Property and equipment in the consolidated balance sheets.

During the first quarter of 2020, the Company evaluated its assets for impairment due to the decline in the industry environment as a result of low commodity prices.

As a result of this evaluation, the Company recorded an impairment expense of $ 89 million, which included an $ 83 million impairment expense to its permanent buried pipelines and equipment and a $ 6 million impairment expense to its surface pipelines and equipment.

Additionally, during the year ended December 31, 2020, the Company determined that the carrying value of the landfill associated with the Clearwater Facility was no longer recoverable resulting in an impairment charge to property and equipment of $ 7 million.

(d) Clearwater Facility Idling

On September 18, 2019, the Company commenced a strategic evaluation of the Clearwater Facility at which time, such facility was idled.

The Company expects the facility to be idled for the foreseeable future, and as such, the Clearwater Facility was fully impaired at the time of idling.

The Company incurred $ 15 million, $ 4 million and $ 4 million in facility idling costs for the care and maintenance of the Clearwater Facility during the years ended December 31, 2020, 2021 and 2022, respectively.

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

(7) Income Taxes

10 unchanged sentences

Federal income tax expense (benefit)

State income tax expense (benefit), net of federal benefit

Non-deductible equity-based compensation

Charitable contributions

State income tax expense (benefit), net of federal effect

Equity-based compensation

Carryback of NOLs

Change in valuation allowance

Total income tax expense (benefit)

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:

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

(in thousands)

1 unchanged sentence

NOL carryforwards

Investment in Antero Midstream Partners

Equity-based compensation

1 unchanged sentence

Total deferred tax asset

Valuation allowance

Net deferred tax asset

Deferred tax liabilities:

1 unchanged sentence

Total deferred tax liability

Net deferred tax asset (liability)

Net deferred tax 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.

1 unchanged sentence

Management considers projected future taxable income and tax planning strategies in making this assessment.

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.

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 not realize the benefits of certain of these deductible differences and has recorded a valuation allowance of $ 3 million during the year ended December 31, 2022 related to charitable contributions.

The calculation of the Company’s tax assets and liabilities involves 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, 2021 and 2022, the Company did not have any uncertain tax positions.

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

As of December 31, 2022, the Company has U.S.

1 unchanged sentence

Tax years 2019 through 2022 remain open to examination by the U.S.

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

Internal Revenue Service, and tax year 2019 is 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 2018 through 2022.

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

(8) Long-Term Debt

2 unchanged sentences

Credit Facility (a)

5.375 % senior notes due 2024 (b)

7.875 % senior notes due 2026 (c)

7 unchanged sentences

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 with a consortium of banks, the 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.

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

As of December 31, 2022, the Credit Facility had lender commitments of $ 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 Credit Facility will mature on such date.

As of December 31, 2022, the Credit Facility had an available borrowing capacity of $ 468 million.

The Credit Facility contains certain covenants including restrictions on indebtedness, and requirements with respect to leverage and interest coverage ratios.

1 unchanged sentence

The Borrower was in compliance with all of the financial covenants under the Credit Facility as of December 31, 2021 and 2022.

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.

The Credit Facility in effect prior to October 26, 2021 provided for borrowing under either the Base Rate or the Eurodollar Rate (as each term is defined in the Credit Facility), and the Credit Facility in effect on and after October 26, 2021 provides for borrowing under either Adjusted Term SOFR or the Base Rate (as each term is defined in the 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) 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 was 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 under the Credit Facility agreement in effect prior to October 26, 2021.

Interest is payable at a variable rate based on SOFR or the base rate, determined by election at the time of borrowing, plus an applicable margin rate under the Credit Facility in effect on and after October 26, 2021.

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 % .

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

As of December 31, 2022, the Borrower had outstanding borrowings under the Credit Facility of $ 782 million with a weighted average interest rate of 6.17 % .

No letters of credit under the Credit Facility were outstanding as of December 31, 2021 and 2022.

5.375 % Senior Notes Due 2024

On September 13, 2016, Antero Midstream Partners and its wholly owned subsidiary, Finance Corp (together with Antero Midstream Partners, the “Issuers”), issued $ 650 million in aggregate principal amount of 5.375 % senior notes due September 15, 2024 (the “2024 Notes”) at par.

The 2024 Notes 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.

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.

5.375 % Senior Notes Due 2024

On September 13, 2016, Antero Midstream Partners and its wholly owned subsidiary Finance Corp (the “Issuers”), issued $ 650 million in aggregate principal amount of 5.375 % senior notes due September 15, 2024 (the “2024 Notes”) at par.

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

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 included 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.

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On February 25, 2019, the Issuers issued $ 650 million in aggregate principal amount of 5.75 % senior notes due March 1, 2027 (the “2027 Notes”) at par.

The 2027 Notes were recorded at their fair value of $ 653.3 million as of March 12, 2019, the closing date of the Transactions, and the related premium of $ 3.3 million will be amortized into interest expense over the life of the 2027 Notes.

The 2027 Notes were recorded at their fair value of $ 653.3 million as of March 12, 2019, and the related premium of $ 3.3 million will be amortized into interest expense over the life of the 2027 Notes.

The 2027 Notes are unsecured and effectively subordinated to the Credit Facility to the extent of the value of the collateral securing the Credit Facility.

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Interest on the 2027 Notes is payable on March 1 and September 1 of each year.

Antero Midstream Partners may redeem all or part of the 2027 Notes at any time on or after March 1, 2022 at redemption prices ranging from 102.875 % on or after March 1, 2022 to 100.00 % on or after March 1, 2025.

In addition, prior to March 1, 2022, Antero Midstream Partners may redeem up to 35 % of the aggregate principal amount of the 2027 Notes with an amount of cash not greater than the net cash proceeds of certain equity offerings, if certain conditions are met, at a redemption price of 105.75 % of the principal amount of the 2027 Notes, plus accrued and unpaid interest.

At any time prior to March 1, 2022, Antero Midstream Partners may also redeem the 2027 Notes, in whole or in part, at a price equal to 100 % of the principal amount of the 2027 Notes plus a “make-whole” premium and accrued and unpaid interest.

Antero Midstream Partners may redeem all or part of the 2027 Notes at any time on or after March 1, 2022 at redemption prices ranging from 102.875 % currently to 100 % on or after March 1, 2025.

If Antero Midstream Partners undergoes a change of control followed by a rating decline, the holders of the 2027 Notes will have the right to require Antero Midstream Partners to repurchase all or a portion of the 2027 Notes at a price equal to 101 % of the principal amount of the 2027 Notes, plus accrued and unpaid interest.

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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

If Antero Midstream Partners undergoes a change of control followed by a rating decline, the holders of the 2028 Notes will have the right to require Antero Midstream Partners to repurchase all or a portion of the

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.

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

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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.

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

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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, 2028 Notes and 2029 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 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.

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(a) Summary of Equity-Based Compensation

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”).

The Company’s equity-based compensation includes (i) costs allocated to Antero Midstream by Antero Resources for grants made prior to March 12, 2019 pursuant to the Antero Resources Corporation Long-Term Incentive Plan (the “AR LTIP”) and (ii) 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.

On December 31, 2018, 65,745 Series B Units were vested.

The holders of vested Series B Units had the right to convert the units to common shares with a value equal to their pro rata share of up to 6 % of any increase in AMGP’s equity value in excess of $ 2.0 billion.

Upon Closing of the Transactions, each Series B Unit, vested and unvested, was exchanged for 176.0041 shares of our common stock (the “Series B Exchange”).

A total of 17,353,999 shares of the Company’s common stock were issued in exchange for the 98,600 Series B Units then outstanding (the “Exchanged B Units”), which included 5,782,601 restricted shares of the Company’s common stock issued in exchange for the 32,855 unvested Series B Units.

The Company accounted for the Series B Exchange as a share-based payment modification under FASB ASC Topic 718, Stock Compensation .

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 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.

The unvested Exchanged B Units retained the same vesting conditions as the Series B Units and vested on December 31, 2019.

No awards were issued and outstanding as of December 31, 2019 and 2020.

Expenses related to Exchanged B Units 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.

Equity-based compensation expense allocated to Antero Midstream from Antero Resources was $ 5.2 million, $ 2.1 million and $ 0.4 million for the years ended December 31, 2020, 2021 and 2022, respectively, which includes expense related to the Converted AM RSU Awards (as defined below).

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 $ 1 million as of December 31, 2021, which includes the Converted AM RSU Awards.

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.

For grants made prior to March 12, 2019, Antero Resources has total unamortized expense related to its various equity-based compensation plans that can be allocated to the Company of less than $ 0.1 million as of December 31, 2022, which includes the Converted AM RSU Awards (as defined below).

The unamortized expense attributable to grants made prior to March 12, 2019 will be recorded during the first quarter of 2023.

A portion of this unamortized cost 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 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.

The AM LTIP provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents, other stock-based awards, cash awards and substitute awards.

The Company is authorized to grant up to 15,398,901 shares of AM common stock under the AM LTIP.

The AM LTIP provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), dividend equivalents, other stock-based awards, cash awards and substitute awards.

The terms and conditions of the awards granted are established by the compensation committee of the Board.

The Company is authorized to grant up to 15,398,901 shares of common stock to employees and directors under the AM LTIP.

As of December 31, 2022, a total of 7,420,368 shares were available for future grant under the AM LTIP.

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(in thousands)

Series B Units and Exchanged B Units

Stock options (1)

Restricted stock units (1)

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

The total fair value of the Company’s vested equity awards for the years ended December 31, 2020, 2021 and 2022 were $ 2 million, $ 12 million and $ 18 million, respectively.

(b) Restricted Stock Unit Awards

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 based on the closing price of the Company’s common stock on the date of the grant.

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.

The weighted average grant date fair value per share for RSUs granted during the years ended December 31, 2020, 2021 and 2022 were $ 6.32 , $ 8.71 and $ 11.28 , respectively.

The Company’s RSU awards include the unvested outstanding phantom units granted under the Antero Midstream Partners Long Term Incentive Plan that was assumed by the Company on March 12, 2019, 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

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

Partners to Antero Resources.

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

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

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Total AM LTIP RSUs awarded and unvested—December 31, 2022

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)

As of December 31, 2022, unamortized expense of $ 34 million related to the unvested RSUs is expected to be recognized over a weighted average period of approximately 2.2 years.

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.

2019 Performance Share Unit Awards

In 2019, the Company granted performance share units (“PSUs”) to certain of its employees and executive officers that 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 (“2019 ROIC PSUs”).

The number of shares of the Company’s common stock that could be earned with respect to the 2019 ROIC PSUs ranged from zero to 200 % of the target number of the 2019 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.

A summary of PSU activity is as follows:

Expense related to the 2019 ROIC PSUs was recognized based on the number of shares of the Company’s common stock that are expected to be issued at the end of the measurement period.

During the year ended December 31, 2022, the performance condition for the 2019 ROIC PSU’s was met at 200 % of target and 137,712 target 2019 ROIC PSU’s converted into 275,424 shares of the Company’s common stock.

As of December 31, 2022, there were no 2019 ROIC PSU’s outstanding.

2022 Performance Share Unit Awards

In April 2022, the Company granted PSUs to certain of its executive officers that vest based on the Company’s actual ROIC (as defined in the aware agreement) over a three-year period concluding on December 31, 2024 as compared to a targeted ROIC (“2022 ROIC PSUs”).

The number of shares of the Company’s common stock that can be earned with respect to the 2022 ROIC PSUs ranges from zero to 200 % of the target number of 2022 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 2022 ROIC PSUs is recognized based on the number of shares of the Company’s 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 2022 ROIC PSU awards was probable as of December 31, 2022.

A summary of the PSU awards activity is as follows:

Weighted Average

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As of December 31, 2022, there was $ 8 million of unamortized equity-based compensation expense related to unvested PSUs that is expected to be recognized over a weighted average period of 2.3 years.

(d) Cash Retention Awards

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

(d) Cash Awards

In January 2020, the Company granted cash awards of $ 2.2 million to certain executives under the AM LTIP that vest ratably over a period of up to three years .

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As of December 31, 2021 and 2022, the Company has accrued $ 1.1 million and $ 0.5 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

The following table details the amount of distributions and dividends paid with respect to the quarter indicated (in thousands, except per share data):

Distributions/

Distribution/

Distributions/

(11) Cash Dividends

The Company paid cash dividends for the quarter indicated as follows (in thousands, except per share data):

Dividend Date

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

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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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November 15, 2021

February 3, 2021

January 26, 2022

February 9, 2022

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November 14, 2022

Dividends are paid in accordance with the terms of the Series A Preferred Stock as discussed in Note 14—Equity and Earnings Per Common Share.

D istributions declared on unvested Series B Units prior to the closing date of the Transactions that were paid upon the vesting date to the holders of the Exchanged B Units

Dividends are paid in accordance with the terms of the Series A Preferred Stock (as defined below) as discussed in Note 12—Equity and Earnings Per Common Share.

On January 11, 2023, the Board announced the declaration of a cash dividend on the shares of AM common stock of $ 0.2250 per share for the quarter ended December 31, 2022.

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(a) Preferred Stock

The Board authorized 100,000,000 shares of preferred stock in connection with the closing of the Transactions (see Note 3—Business Combination) on March 12, 2019, and issued 10,000 shares of preferred stock designated as "

The Board authorized 100,000,000 shares of preferred stock on March 12, 2019, and issued 10,000 shares of preferred stock designated as "

5.5 % Series A Non-Voting Perpetual Preferred Stock"

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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—basic for each period is computed by dividing the net income or loss attributable to the Company 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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(13) Fair Value Measurement

Business Combination

As the Transactions were accounted for under the acquisition method of accounting, the Company estimated the fair value of assets acquired and liabilities assumed at March 12, 2019.

See Note 3—Business Combination.

In connection with the Transactions, the Company, among other things, issued shares of common stock valued at the closing market price of the common shares at the effective time of the Transactions, which was a Level 1 measurement.

The Company used the discounted cash flow approach, which is an income statement technique, to estimate the fair value of the customer relationships and investments in unconsolidated affiliates using a weighted-average cost of capital of 14.1 % as of March 12, 2019, which is based on significant inputs not observable in the market, and thus represents a Level 3 measurement within the fair value hierarchy.

The Company also used this approach in combination with the cost approach to estimate the fair value of property and equipment whereby certain property and equipment was adjusted for recent purchases of similar items, economic and functional obsolescence, location, normal useful lives and capacity (if applicable).

To estimate the fair value of the long-term debt, the Company used Level 2 market data inputs.

The Company estimated the fair value of its assets in performing its goodwill impairment analysis.

The Company utilized a combination of approaches to discounted cash flow approach, comparable company method and the market value approach.

The Company used a weighted-average cost of capital of 10.0 % and 18.0 % as of December 31, 2019 and March 31, 2020, respectively, which were based on significant inputs not observable in the market, and thus represents a Level 3 measurement within the fair value hierarchy.

Property and equipment

The Company utilized a combination of approaches to determine fair value that included a discounted cash flow approach, comparable company method and the market value approach.

The Company used a weighted-average cost of capital of 18.0 % as of March 31, 2020 which was based on significant inputs not observable in the market, and thus represents a Level 3 measurement within the fair value hierarchy.

(b) Property and Equipment

The Company estimated the undiscounted future cash flow projections to assess its property and equipment for impairment.

1 unchanged sentence

As a result, the carrying values have been reduced to the estimated fair values, which are based on discounted future cash flows using assumptions as to revenues, costs and a discount rate typical of third-party market participants of 19.0 % as of March 31, 2020, which is a Level 3 fair value measurement within the fair value hierarchy.

Contingent Acquisition Consideration

In connection with Antero Resources’ contribution of Antero Water and certain water handling assets to Antero Midstream Partners in September 2015 (the “Water Acquisition”), Antero Midstream Partners agreed to pay Antero Resources (a) $ 125 million in cash if Antero Midstream Partners delivered 176,295,000 barrels or more of fresh water during the period between January 1, 2017 and December 31, 2019 and (b) an additional $ 125 million in cash if Antero Midstream Partners 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 was valued based on Level 3 inputs related to expected average volumes and weighted average cost of capital.

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

In January 2020, Antero Midstream Partners paid Antero Resources $ 125 million and, as of December 31, 2020, no additional contingent acquisition consideration was earned.

Senior Unsecured Notes

(d) Senior Unsecured Notes

As of December 31, 2021 and 2022 the fair value and carrying value of the Company’s senior unsecured notes were as follows:

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(2) Carrying values are presented net of unamortized debt issuance costs and debt premiums.

Other Assets and Liabilities

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

(e) Other Assets and Liabilities

The carrying values of accounts receivable and accounts payable as of December 31, 2021 and 2022 approximated fair value because of their short-term nature.

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(14) Investments in Unconsolidated Affiliates

Summary of Investments in Unconsolidated Affiliates

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.

(a) Summary of Investments in Unconsolidated Affiliates

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

MarkWest operates the Joint Venture assets, which consist of processing plants in West Virginia and a one -third interest in two MarkWest fractionators in Ohio.

The Company also 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’s net income (loss) includes its proportionate share of the net income of the Joint Venture and Stonewall.

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

When distributions on the Company’s proportionate share of net income are received, they are recorded as reductions to the carrying value of the investment on the balance sheet and are classified as cash inflows from operating activities in accordance with the nature of the 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 distribution 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:

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Balance as of December 31, 2021

Additional investments

Equity in earnings of unconsolidated affiliates (1)

Distributions from unconsolidated affiliates

Return of investment in unconsolidated affiliate

Balance as of December 31, 2022

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.

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

(b) Summarized Financial Information of Unconsolidated Affiliates

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Net income attributable to unconsolidated affiliates

(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.

(15) Contingencies

The Company is currently involved in a consolidated lawsuit with Veolia Water Technologies, Inc.

(“Veolia”) relating to the Clearwater Facility.

On March 13, 2020, Antero Treatment, a wholly owned subsidiary of the Company, filed suit against Veolia in the district court of Denver County, Colorado, asserting claims of fraud, breach of contract and other related claims.

Antero Treatment alleges that Veolia failed to meet its contractual obligations to design and build a “turnkey” wastewater disposal facility under a Design/Build Agreement dated August 18, 2015 (the “DBA”), and that Veolia fraudulently concealed certain miscalculations and design flaws during contract negotiations and continued to conceal and fraudulently misrepresent the impact of certain design changes post-execution of the DBA.

On March 13, 2020, Veolia filed a separate suit against the Company, Antero Resources, and certain of the Company’s wholly owned subsidiaries (collectively, the “Antero Defendants”) in Denver County, Colorado.

In its lawsuit, Veolia asserted breach of contract and equitable claims against the Antero Defendants for alleged failures under the DBA.

Veolia’s suit was consolidated into the action filed by Antero Treatment.

Veolia and the Antero Defendants each filed partial motions to dismiss and motions for summary judgment directed at certain claims asserted by the opposing party.

A bench trial on the remaining claims was held from January 24 through February 10, 2022 and concluded on February 24, 2022.

At trial, Antero Treatment sought damages from Veolia of approximately $ 450 million, which represents the Company’s out-of-pocket costs associated with the Clearwater Facility project.

In the alternative, Antero Treatment sought damages related to multiple breaches of the DBA, totaling approximately $ 370 million.

Also at trial, Veolia sought monetary damages of approximately $ 118 million, including alleged delay and extra-contractual costs and a contract balance relating to an allegation that Antero Defendants improperly terminated the DBA.

On January 3, 2023, the Court found that Antero Treatment had prevailed on its claims for breach of contract and fraud, and awarded approximately $ 242 million in damages to Antero Treatment, plus pre- and post-judgment interest and reasonable costs and attorneys’ fees.

The Court also found in Antero Defendants’ favor on all of Veolia’s affirmative claims.

On January 27, 2023 the

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

Gathering and Processing

The gathering and processing segment includes a network of gathering pipelines and compressor stations that collect and process production from Antero Resources’ wells in West Virginia and Ohio.

The gathering and processing segment also includes equity in earnings from the Company’s investments in the Joint Venture and Stonewall.

Water Handling

The Company’s water handling segment includes two independent systems that deliver 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.

Court entered judgment in favor of Antero Treatment in the amount of $ 309,183,975 in damages, which includes pre-judgment interest.

Antero was also awarded costs and attorneys’ fees, the amount of which will be determined in separate proceedings.

The judgment remains subject to appeal and applicable post-judgment proceedings.

(16) Reportable Segments

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.

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.

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

Gathering and Processing

The gathering and processing segment includes a network of gathering pipelines and compressor stations that collect and process production from Antero Resources’ wells in West Virginia and Ohio.

The gathering and processing segment also includes equity in earnings from the Company’s investments in the Joint Venture and Stonewall.

Water Handling

The Company’s water handling segment includes two independent systems that deliver water from sources including the Ohio River, local reservoirs and several regional waterways.

Portions of these water handling systems are also utilized to transport flowback and produced water.

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

Year Ended December 31, 2020

3 unchanged sentences

Revenue–Antero Resources

Revenue–third-party

Amortization of customer relationships

6 unchanged sentences

Impairment of goodwill

Impairment of customer relationships

Accretion and change in fair value of contingent acquisition consideration

Accretion of asset retirement obligations

Loss on asset sale

Total operating expenses

Operating income (loss)

Operating loss

Equity in earnings of unconsolidated affiliates

8 unchanged sentences

Revenue–Antero Resources

Revenue–third-party

Amortization of customer relationships

5 unchanged sentences

Impairment of property and equipment

Impairment of goodwill

Accretion of asset retirement obligations

1 unchanged sentence

Total operating expenses

Operating loss

Operating income

Equity in earnings of unconsolidated affiliates

15 unchanged sentences

Accretion of asset retirement obligations

Loss on asset sale

Loss on settlement of asset retirement obligations

Gain on asset sale

Total operating expenses

3 unchanged sentences

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

ANTERO MIDSTREAM CORPORATION

Notes to Consolidated Financial Statements (Continued)

The summarized total assets of the Company’s reportable segments are as follows:

(in thousands)

Gathering and Processing

Water Handling

Unallocated (1)

Certain assets 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