Quarterly report pursuant to Section 13 or 15(d)

Leases (Tables)

Leases (Tables)

9 Months Ended

Sep. 30, 2022

Summary of supplemental balance sheet information related to leases

The Company’s lease assets and liabilities consisted of the following items (in thousands):


				(Unaudited)
		December 31,		September 30,
Leases	Balance Sheet Classification	2021		2022
Operating Leases
Operating lease right-of-use assets:
Processing plants	Operating lease right-of-use assets	$	1,739,550		1,906,419
Drilling rigs and completion services	Operating lease right-of-use assets		9,860		64,022
Gas gathering lines and compressor stations ⁽¹⁾	Operating lease right-of-use assets		1,634,928		1,523,233
Office space	Operating lease right-of-use assets		33,083		42,760
Vehicles	Operating lease right-of-use assets		2,009		1,074
Other office and field equipment	Operating lease right-of-use assets		482		4,068
Total operating lease right-of-use assets		$	3,419,912		3,541,576

Short-term operating lease obligation	Short-term lease liabilities	$	455,950		535,014
Long-term operating lease obligation	Long-term lease liabilities		2,963,962		3,006,562
Total operating lease obligation		$	3,419,912		3,541,576

Finance Leases
Finance lease right-of-use assets:
Vehicles	Other property and equipment	$	550		1,407
Total finance lease right-of-use assets ⁽²⁾		$	550		1,407

Short-term finance lease obligation	Short-term lease liabilities	$	397		333
Long-term finance lease obligation	Long-term lease liabilities		153		1,074
Total finance lease obligation		$	550		1,407

(1)	Gas gathering lines and compressor station leases includes $1.5 billion related to Antero Midstream as of December 31, 2021 and September 30, 2022. See “—Related party lease disclosure” for additional discussion.

(2)	Financing lease assets are recorded net of accumulated amortization of $2 million and $1 million as of December 31, 2021 and September 30, 2022, respectively.

Summary of costs associated with operating leases and finance leases

Costs associated with operating and finance leases were included in the unaudited condensed consolidated statement of operations and comprehensive loss (in thousands):


			Three Months Ended September 30,				Nine Months Ended September 30,
Cost	Classification	Location	2021		2022		2021		2022
Operating lease cost	Statement of operations	Gathering, compression, processing and transportation	$	386,033		378,246		1,147,985		1,109,422
Operating lease cost	Statement of operations	General and administrative		2,833		2,855		8,057		8,509
Operating lease cost	Statement of operations	Contract termination		3,369		12,000		4,213		12,000
Operating lease cost	Statement of operations	Lease operating		43		44		109		133
Operating lease cost	Balance sheet	Proved properties ⁽¹⁾		25,558		34,288		82,749		83,146
Total operating lease cost			$	417,836		427,433		1,243,113		1,213,210

Finance lease cost:
Amortization of right-of-use assets	Statement of operations	Depletion, depreciation and amortization	$	132		94		391		319
Interest on lease liabilities	Statement of operations	Interest expense		286		44		337		78
Total finance lease cost			$	418		138		728		397

Short-term lease payments			$	21,030		38,690		62,328		115,798

(1)	Capitalized costs related to drilling and completion activities.

Summary of supplemental cash flow information related to leases

The following table presents the Company’s supplemental cash flow information related to leases (in thousands):


	Nine Months Ended September 30,
	2021		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,042,684		1,067,786
Investing cash flows from operating leases		66,042		70,654
Financing cash flows from finance leases		692		441

Noncash activities:
Right-of-use assets obtained in exchange for new operating lease obligations		232,771		366,194
Increase to existing right-of-use assets and lease obligations from operating lease modifications, net ⁽¹⁾		345,066		119,290

(1)

During the nine months ended September 30, 2021, the weighted average discount rate for remeasured operating leases decreased from 14.4% as of December 31, 2020 to 5.5% as of September 30, 2021. During the nine months ended September 30, 2022, the weighted average discount rate for remeasured operating leases decreased from 5.6% as of December 31, 2021 to 5.2% as of September 30, 2022.

Summary of maturities of operating lease liabilities

The table below is a schedule of future minimum payments for operating and financing lease liabilities as of September 30, 2022 (in thousands):


	Operating Leases		Financing Leases		Total
Remainder of 2022	$	178,967		145		179,112
2023		706,880		510		707,390
2024		645,692		501		646,193
2025		585,209		459		585,668
2026		534,508		210		534,718
2027		442,252		—		442,252
Thereafter		1,203,662		—		1,203,662
Total lease payments		4,297,170		1,825		4,298,995
Less: imputed interest		(755,594)		(418)		(756,012)
Total	$	3,541,576		1,407		3,542,983

Summary of maturities of financing lease liabilities

The table below is a schedule of future minimum payments for operating and financing lease liabilities as of September 30, 2022 (in thousands):


	Operating Leases		Financing Leases		Total
Remainder of 2022	$	178,967		145		179,112
2023		706,880		510		707,390
2024		645,692		501		646,193
2025		585,209		459		585,668
2026		534,508		210		534,718
2027		442,252		—		442,252
Thereafter		1,203,662		—		1,203,662
Total lease payments		4,297,170		1,825		4,298,995
Less: imputed interest		(755,594)		(418)		(756,012)
Total	$	3,541,576		1,407		3,542,983

Summary of weighted-average remaining lease term and discount rate


					(Unaudited)
	December 31, 2021				September 30, 2022
	Operating Leases		Finance Leases		Operating Leases		Finance Leases
Weighted average remaining lease term	7.6 years		1.9 years		7.4 years		3.5 years
Weighted average discount rate	5.5	%	5.6	%	5.3	%	6.8	%