| Reporting Segments |
(9) Reporting Segments
The Partnership’s operations are located in the United States and are organized into two reporting segments: (1) gathering and compression and (2) water handling.
Gathering and Compression
The gathering and compression segment includes a network of gathering pipelines and compressor stations that collect natural gas, NGLs and oil from Antero’s wells in the Marcellus Shale in West Virginia and the Utica Shale in Ohio.
Water Handling
The Partnership’s water handling segment includes two independent fresh water distribution systems that source and deliver fresh water from the Ohio River and several regional waterways for well completion operations in Antero’s operating areas. These systems consist of permanent buried pipelines, surface pipelines and fresh water storage facilitates, as well as pumping stations and impoundments to transport the fresh water throughout the pipelines. The water handling segment also includes a water treatment facility, currently under construction.
These segments are monitored separately by management for performance and are consistent with internal financial reporting. These segments have been identified based on the differing products and services, regulatory environment and the expertise required for these operations. We evaluate the performance of the Partnership’s business segments based on operating income. Interest expense is primarily managed and evaluated on a consolidated basis.
Summarized financial information concerning the Partnership’s segments for the periods indicated is shown in the following table (in thousands):
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Gathering and
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Water
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Consolidated
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Compression
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Handling
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Total
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Three months ended September 30, 2014
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Revenues:
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Revenue - affiliate
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$
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26,282
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$
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42,631
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$
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68,913
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Revenue - third-party
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-
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2,671
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2,671
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Total revenues
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$
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26,282
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$
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45,302
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$
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71,584
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Operating expenses:
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Direct operating
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3,525
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9,054
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12,579
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General and administrative (before equity-based compensation)
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3,956
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1,576
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5,532
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Equity-based compensation
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1,562
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549
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2,111
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Depreciation
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10,227
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4,390
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14,617
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Total
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$
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19,270
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$
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15,569
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$
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34,839
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Operating income
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$
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7,012
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$
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29,733
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$
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36,745
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Segment assets
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$
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1,071,273
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$
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396,692
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$
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1,467,965
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Capital expenditures for segment assets
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$
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162,482
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$
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53,305
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$
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215,787
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Three months ended September 30, 2015
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Revenues:
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Revenue - affiliate
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$
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59,220
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$
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21,819
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$
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81,039
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Revenue - third-party
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38
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627
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665
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Total revenues
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$
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59,258
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$
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22,446
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$
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81,704
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Operating expenses:
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Direct operating
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(3,164)
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4,773
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1,609
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General and administrative (before equity-based compensation)
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7,060
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1,498
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8,558
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Equity-based compensation
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4,205
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1,079
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5,284
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Depreciation
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15,076
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6,485
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21,561
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Total
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$
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23,177
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$
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13,835
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$
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37,012
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Operating income
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$
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36,081
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$
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8,611
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$
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44,692
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Segment assets
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$
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1,395,057
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$
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487,734
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$
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1,882,791
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Capital expenditures for segment assets
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$
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82,751
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$
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19,821
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$
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102,572
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Acquired water handling assets
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$
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-
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$
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28,560
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$
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28,560
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Gathering and
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Water
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Consolidated
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Compression
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Handling
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Total
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Nine months ended September 30, 2014
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Revenues:
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Revenue - affiliate
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$
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54,978
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$
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107,907
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$
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162,885
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Revenue - third-party
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-
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2,671
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2,671
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Total revenues
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$
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54,978
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$
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110,578
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$
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165,556
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Operating expenses:
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Direct operating
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6,661
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25,871
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32,532
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General and administrative (before equity-based compensation)
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9,710
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4,085
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13,795
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Equity-based compensation
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5,365
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2,027
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7,392
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Depreciation
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24,991
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10,748
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35,739
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Total
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$
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46,727
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$
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42,731
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$
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89,458
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Operating income
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$
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8,251
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$
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67,847
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$
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76,098
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Segment assets
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$
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1,071,273
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$
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396,692
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$
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1,467,965
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Capital expenditures for segment assets
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$
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428,036
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$
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159,097
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$
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587,133
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Nine months ended September 30, 2015
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Revenues:
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Revenue - affiliate
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$
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168,056
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$
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86,759
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$
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254,815
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Revenue - third-party
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38
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778
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816
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Total revenues
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$
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168,094
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$
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87,537
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$
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255,631
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Operating expenses:
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Direct operating
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19,817
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19,013
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38,830
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General and administrative (before equity-based compensation)
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16,467
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3,793
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20,260
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Equity-based compensation
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14,218
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3,445
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17,663
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Depreciation
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44,748
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18,767
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63,515
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Total
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$
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95,250
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$
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45,018
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$
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140,268
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Operating income
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$
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72,844
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$
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42,519
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$
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115,363
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Segment assets
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$
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1,395,057
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$
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487,734
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$
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1,882,791
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Capital expenditures for segment assets
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$
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282,826
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$
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53,086
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$
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335,912
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Acquired water handling assets
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$
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-
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$
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28,560
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$
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28,560
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