Subsidiary Guarantors (Tables)

9 Months Ended

Sep. 30, 2017

Subsidiary Guarantors

Schedule of condensed consolidated balance sheets

Condensed Consolidating Balance Sheet

December 31, 2016

(In thousands)

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Assets
Current assets:
Cash and cash equivalents	$	17,568		—		14,042		—		31,610
Accounts receivable, net		28,442		—		1,240		—		29,682
Intercompany receivables		3,193		—		64,139		(67,332)		—
Accrued revenue		261,960		—		—		—		261,960
Derivative instruments		73,022		—		—		—		73,022
Other current assets		5,784		—		529		—		6,313
Total current assets		389,969		—		79,950		(67,332)		402,587
Property and equipment:
Natural gas properties, at cost (successful efforts method):
Unproved properties		2,331,173		—		—		—		2,331,173
Proved properties		9,726,957		—		—		(177,286)		9,549,671
Water handling and treatment systems		—		—		744,682		—		744,682
Gathering systems and facilities		17,929		—		1,705,839		—		1,723,768
Other property and equipment		41,231		—		—		—		41,231
		12,117,290		—		2,450,521		(177,286)		14,390,525
Less accumulated depletion, depreciation, and amortization		(2,109,136)		—		(254,642)		—		(2,363,778)
Property and equipment, net		10,008,154		—		2,195,879		(177,286)		12,026,747
Derivative instruments		1,731,063		—		—		—		1,731,063
Investments in subsidiaries		(420,429)		—		—		420,429		—
Contingent acquisition consideration		194,538		—		—		(194,538)		—
Investments in unconsolidated affiliates		—		—		68,299		—		68,299
Other assets, net		21,087		—		5,767		—		26,854
Total assets	$	11,924,382		—		2,349,895		(18,727)		14,255,550
Liabilities and Equity
Current liabilities:
Accounts payable	$	21,648		—		16,979		—		38,627
Intercompany payable		64,139		—		3,193		(67,332)		—
Accrued liabilities		332,162		—		61,641		—		393,803
Revenue distributions payable		163,989		—		—		—		163,989
Derivative instruments		203,635		—		—		—		203,635
Other current liabilities		17,134		—		200		—		17,334
Total current liabilities		802,707		—		82,013		(67,332)		817,388
Long-term liabilities:
Long-term debt		3,854,059		—		849,914		—		4,703,973
Deferred income tax liability		950,217		—		—		—		950,217
Contingent acquisition consideration		—		—		194,538		(194,538)		—
Derivative instruments		234		—		—		—		234
Other liabilities		54,540		—		620		—		55,160
Total liabilities		5,661,757		—		1,127,085		(261,870)		6,526,972
Equity:
Stockholders' equity:
Partners' capital		—		—		1,222,810		(1,222,810)		—
Common stock		3,149		—		—		—		3,149
Additional paid-in capital		5,299,481		—		—		—		5,299,481
Accumulated earnings		959,995		—		—		—		959,995
Total stockholders' equity		6,262,625		—		1,222,810		(1,222,810)		6,262,625
Noncontrolling interest in consolidated subsidiary		—		—		—		1,465,953		1,465,953
Total equity		6,262,625		—		1,222,810		243,143		7,728,578
Total liabilities and equity	$	11,924,382		—		2,349,895		(18,727)		14,255,550

Condensed Consolidating Balance Sheet

September 30, 2017

(In thousands)

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Assets
Current assets:
Cash and cash equivalents	$	21,199		—		2,495		—		23,694
Accounts receivable, net		42,689		—		1,165		—		43,854
Intercompany receivables		4,050		—		84,124		(88,174)		—
Accrued revenue		233,585		—		—		—		233,585
Derivative instruments		299,796		—		—		—		299,796
Other current assets		9,011		—		1,013		—		10,024
Total current assets		610,330		—		88,797		(88,174)		610,953
Property and equipment:
Natural gas properties, at cost (successful efforts method):
Unproved properties		2,305,749		—		—		—		2,305,749
Proved properties		11,093,749		—		—		(314,706)		10,779,043
Water handling and treatment systems		—		—		891,869		—		891,869
Gathering systems and facilities		17,929		—		1,959,581		—		1,977,510
Other property and equipment		54,571		—		—		—		54,571
		13,471,998		—		2,851,450		(314,706)		16,008,742
Less accumulated depletion, depreciation, and amortization		(2,630,298)		—		(343,246)		—		(2,973,544)
Property and equipment, net		10,841,700		—		2,508,204		(314,706)		13,035,198
Derivative instruments		876,293		—		—		—		876,293
Investments in subsidiaries		488,089		—		—		(488,089)		—
Contingent acquisition consideration		204,210		—		—		(204,210)		—
Investments in unconsolidated affiliates		—		—		287,842		—		287,842
Other assets, net		28,380		—		10,548		—		38,928
Total assets	$	13,049,002		—		2,895,391		(1,095,179)		14,849,214
Liabilities and Equity
Current liabilities:
Accounts payable	$	33,637		—		13,820		—		47,457
Intercompany payable		84,124		—		4,050		(88,174)		—
Accrued liabilities		359,164		—		70,532		—		429,696
Revenue distributions payable		220,971		—		—		—		220,971
Derivative instruments		4,285		—		—		—		4,285
Other current liabilities		15,061		—		206		—		15,267
Total current liabilities		717,242		—		88,608		(88,174)		717,676
Long-term liabilities:
Long-term debt		3,442,799		—		1,067,722		—		4,510,521
Deferred income tax liability		1,180,564		—		—		—		1,180,564
Contingent acquisition consideration		—		—		204,210		(204,210)		—
Derivative instruments		427		—		—		—		427
Other liabilities		52,299		—		465		—		52,764
Total liabilities		5,393,331		—		1,361,005		(292,384)		6,461,952
Equity:
Stockholders' equity:
Partners' capital		—		—		1,534,386		(1,534,386)		—
Common stock		3,155		—		—		—		3,155
Additional paid-in capital		6,564,320		—		—		—		6,564,320
Accumulated earnings		1,088,196		—		—		—		1,088,196
Total stockholders' equity		7,655,671		—		1,534,386		(1,534,386)		7,655,671
Noncontrolling interests in consolidated subsidiary		—		—		—		731,591		731,591
Total equity		7,655,671		—		1,534,386		(802,795)		8,387,262
Total liabilities and equity	$	13,049,002		—		2,895,391		(1,095,179)		14,849,214

Schedule of condensed consolidated statement of operations and comprehensive income (loss)

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Three Months Ended September 30, 2016

(In thousands)

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Revenue:
Natural gas sales	$	364,373		—		—		—		364,373
Natural gas liquids sales		106,958		—		—		—		106,958
Oil sales		14,793		—		—		—		14,793
Gathering, compression, water handling and treatment		—		—		150,475		(147,506)		2,969
Marketing		97,076		—		—		—		97,076
Commodity derivative fair value gains		530,334		—		—		—		530,334
Other income		3,990		—		—		(3,990)		—
Total revenue		1,117,524		—		150,475		(151,496)		1,116,503
Operating expenses:
Lease operating		13,710		—		28,978		(28,834)		13,854
Gathering, compression, processing, and transportation		303,753		—		6,400		(75,238)		234,915
Production and ad valorem taxes		17,719		—		(2,165)		—		15,554
Marketing		114,611		—		—		—		114,611
Exploration		1,166		—		—		—		1,166
Impairment of unproved properties		11,753		—		—		—		11,753
Depletion, depreciation, and amortization		172,976		—		26,137		—		199,113
Accretion of asset retirement obligations		628		—		—		—		628
General and administrative		44,637		—		13,315		(375)		57,577
Accretion of contingent acquisition consideration		—		—		3,527		(3,527)		—
Total operating expenses		680,953		—		76,192		(107,974)		649,171
Operating income		436,571		—		74,283		(43,522)		467,332
Other income (expenses):
Equity in earnings of unconsolidated affiliates		—		—		1,543		—		1,543
Interest		(54,631)		—		(5,303)		179		(59,755)
Equity in net income of subsidiaries		(2,761)		—		—		2,761		—
Total other expenses		(57,392)		—		(3,760)		2,940		(58,212)
Income before income taxes		379,179		—		70,523		(40,582)		409,120
Provision for income tax expense		(140,924)		—		—		—		(140,924)
Net income and comprehensive income including noncontrolling interests		238,255		—		70,523		(40,582)		268,196
Net income and comprehensive income attributable to noncontrolling interests		—		—		—		29,941		29,941
Net income and comprehensive income attributable to Antero Resources Corporation	$	238,255		—		70,523		(70,523)		238,255

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Three Months Ended September 30, 2017

(In thousands)

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Revenue:
Natural gas sales	$	409,141		—		—		—		409,141
Natural gas liquids sales		224,533		—		—		—		224,533
Oil sales		26,527		—		—		—		26,527
Gathering, compression, water handling and treatment		—		—		193,629		(190,760)		2,869
Marketing		50,767		—		—		—		50,767
Commodity derivative fair value losses		(65,957)		—		—		—		(65,957)
Other income		3,070		—		—		(3,070)		—
Total revenue		648,081		—		193,629		(193,830)		647,880
Operating expenses:
Lease operating		24,060		—		51,569		(52,138)		23,491
Gathering, compression, processing, and transportation		369,538		—		10,468		(97,872)		282,134
Production and ad valorem taxes		22,002		—		993		—		22,995
Marketing		78,884		—		—		—		78,884
Exploration		1,599		—		—		—		1,599
Impairment of unproved properties		41,000		—		—		—		41,000
Depletion, depreciation, and amortization		176,412		—		30,556		—		206,968
Accretion of asset retirement obligations		658		—		—		—		658
General and administrative		48,289		—		14,316		(402)		62,203
Accretion of contingent acquisition consideration		—		—		2,556		(2,556)		—
Total operating expenses		762,442		—		110,458		(152,968)		719,932
Operating income (loss)		(114,361)		—		83,171		(40,862)		(72,052)
Other income (expenses):
Equity in earnings of unconsolidated affiliates		—		—		7,033		—		7,033
Interest		(60,906)		—		(9,311)		158		(70,059)
Equity in net income (loss) of subsidiaries		(4,874)		—		—		4,874		—
Total other expenses		(65,780)		—		(2,278)		5,032		(63,026)
Income (loss) before income taxes		(180,141)		—		80,893		(35,830)		(135,078)
Provision for income tax benefit		45,078		—		—		—		45,078
Net income (loss) and comprehensive income (loss) including noncontrolling interests		(135,063)		—		80,893		(35,830)		(90,000)
Net income and comprehensive income attributable to noncontrolling interests		—		—		—		45,063		45,063
Net income (loss) and comprehensive income (loss) attributable to Antero Resources Corporation	$	(135,063)		—		80,893		(80,893)		(135,063)

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Nine Months Ended September 30, 2016

(In thousands)

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Revenue and other:
Natural gas sales	$	848,936		—		—		—		848,936
Natural gas liquids sales		274,736		—		—		—		274,736
Oil sales		41,712		—		—		—		41,712
Gathering, compression, water handling and treatment		—		—		423,357		(413,250)		10,107
Marketing		287,194		—		—		—		287,194
Commodity derivative fair value gains		125,624		—		—		—		125,624
Other income		11,714		—		—		(11,714)		—
Total revenue and other		1,589,916		—		423,357		(424,964)		1,588,309
Operating expenses:
Lease operating		37,299		—		104,009		(104,118)		37,190
Gathering, compression, processing, and transportation		838,936		—		20,567		(209,790)		649,713
Production and ad valorem taxes		51,921		—		375		—		52,296
Marketing		378,521		—		—		—		378,521
Exploration		3,289		—		—		—		3,289
Impairment of unproved properties		47,223		—		—		—		47,223
Depletion, depreciation, and amortization		513,957		—		74,100		—		588,057
Accretion of asset retirement obligations		1,846		—		—		—		1,846
General and administrative		135,356		—		39,712		(1,102)		173,966
Accretion of contingent acquisition consideration		—		—		10,384		(10,384)		—
Total operating expenses		2,008,348		—		249,147		(325,394)		1,932,101
Operating income (loss)		(418,432)		—		174,210		(99,570)		(343,792)
Other income (expenses):
Equity in earnings of unconsolidated affiliates		—		—		2,027		—		2,027
Interest		(173,364)		—		(12,885)		615		(185,634)
Equity in net income of subsidiaries		(2,003)		—		—		2,003		—
Total other expenses		(175,367)		—		(10,858)		2,618		(183,607)
Income (loss) before income taxes		(593,799)		—		163,352		(96,952)		(527,399)
Provision for income tax benefit		230,755		—		—		—		230,755
Net income (loss) and comprehensive income (loss) including noncontrolling interests		(363,044)		—		163,352		(96,952)		(296,644)
Net income and comprehensive income attributable to noncontrolling interests		—		—		—		66,400		66,400
Net income (loss) and comprehensive income (loss) attributable to Antero Resources Corporation	$	(363,044)		—		163,352		(163,352)		(363,044)

Condensed Consolidating Statement of Operations and Comprehensive Income

Nine Months Ended September 30, 2017

(In thousands)

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Revenue and other:
Natural gas sales	$	1,330,062		—		—		—		1,330,062
Natural gas liquids sales		590,004		—		—		—		590,004
Oil sales		79,999		—		—		—		79,999
Gathering, compression, water handling and treatment		—		—		562,165		(553,500)		8,665
Marketing		166,659		—		—		—		166,659
Commodity derivative fair value gains		458,459		—		—		—		458,459
Other income		11,421		—		—		(11,421)		—
Total revenue and other		2,636,604		—		562,165		(564,921)		2,633,848
Operating expenses:
Lease operating		56,991		—		131,635		(132,592)		56,034
Gathering, compression, processing, and transportation		1,070,522		—		28,492		(283,304)		815,710
Production and ad valorem taxes		67,576		—		2,765		—		70,341
Marketing		246,298		—		—		—		246,298
Exploration		5,510		—		—		—		5,510
Impairment of unproved properties		83,098		—		—		—		83,098
Depletion, depreciation, and amortization		522,275		—		88,604		—		610,879
Accretion of asset retirement obligations		1,944		—		—		—		1,944
General and administrative		148,876		—		43,562		(1,438)		191,000
Accretion of contingent acquisition consideration		—		—		9,672		(9,672)		—
Total operating expenses		2,203,090		—		304,730		(427,006)		2,080,814
Operating income		433,514		—		257,435		(137,915)		553,034
Other income (expenses):
Equity in earnings of unconsolidated affiliates		—		—		12,887		—		12,887
Interest		(178,644)		—		(27,162)		495		(205,311)
Equity in net income of subsidiaries		(21,582)		—		—		21,582		—
Total other expenses		(200,226)		—		(14,275)		22,077		(192,424)
Income before income taxes		233,288		—		243,160		(115,838)		360,610
Provision for income tax expense		(105,087)		—		—		—		(105,087)
Net income and comprehensive income including noncontrolling interests		128,201		—		243,160		(115,838)		255,523
Net income and comprehensive income attributable to noncontrolling interests		—		—		—		127,322		127,322
Net income and comprehensive income attributable to Antero Resources Corporation	$	128,201		—		243,160		(243,160)		128,201

Schedule of condensed consolidated statement of cash flows

Condensed Consolidating Statement of Cash Flows

Nine Months Ended September 30, 2016

(In thousands)

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Net cash provided by operating activities	$	745,517		—		259,135		(98,955)		905,697
Cash flows used in investing activities:
Additions to proved properties		(64,789)		—		—		—		(64,789)
Additions to unproved properties		(559,572)		—		—		—		(559,572)
Drilling and completion costs		(1,108,806)		—		—		98,955		(1,009,851)
Additions to water handling and treatment systems		—		—		(137,355)		—		(137,355)
Additions to gathering systems and facilities		(1,367)		—		(152,769)		—		(154,136)
Additions to other property and equipment		(1,747)		—		—		—		(1,747)
Investments in unconsolidated affiliates		—		—		(45,044)		—		(45,044)
Change in other assets		236		—		(2,409)		—		(2,173)
Distributions from non-guarantor subsidiary		78,514		—		—		(78,514)		—
Net cash used in investing activities		(1,657,531)		—		(337,577)		20,441		(1,974,667)
Cash flows provided by financing activities:
Issuance of common stock		837,414		—		—		—		837,414
Issuance of common units by Antero Midstream Partners LP		—		—		19,605		—		19,605
Sale of common units in Antero Midstream Partners LP by Antero Resources Corporation		178,000		—		—		—		178,000
Issuance of senior notes		—		—		650,000		—		650,000
Repayments on bank credit facility, net		(102,000)		—		(450,000)		—		(552,000)
Payments of deferred financing costs		(89)		—		(8,940)		—		(9,029)
Distributions		—		—		(129,752)		78,514		(51,238)
Employee tax withholding for settlement of equity compensation awards		(4,859)		—		(17)		—		(4,876)
Other		(3,751)		—		(116)		—		(3,867)
Net cash provided by financing activities		904,715		—		80,780		78,514		1,064,009
Net increase (decrease) in cash and cash equivalents		(7,299)		—		2,338		—		(4,961)
Cash and cash equivalents, beginning of period		16,590		—		6,883		—		23,473
Cash and cash equivalents, end of period	$	9,291		—		9,221		—		18,512

Condensed Consolidating Statement of Cash Flows

Nine Months Ended September 30, 2017

(In thousands)

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Consolidated
Net cash provided by operating activities	$	1,485,961		—		344,267		(137,420)		1,692,808
Cash flows used in investing activities:
Additions to proved properties		(179,318)		—		—		—		(179,318)
Additions to unproved properties		(182,207)		—		—		—		(182,207)
Drilling and completion costs		(1,083,928)		—		—		137,420		(946,508)
Additions to water handling and treatment systems		—		—		(143,470)		—		(143,470)
Additions to gathering systems and facilities		—		—		(254,619)		—		(254,619)
Additions to other property and equipment		(11,417)		—		—		—		(11,417)
Investments in unconsolidated affiliates		—		—		(216,776)		—		(216,776)
Change in other assets		(10,271)		—		(5,877)		—		(16,148)
Net distributions from subsidiaries		97,984		—		—		(97,984)		—
Other		2,156		—		—		—		2,156
Net cash used in investing activities		(1,367,001)		—		(620,742)		39,436		(1,948,307)
Cash flows provided by (used in) financing activities:
Issuance of common units by Antero Midstream Partners LP		—		—		248,949		—		248,949
Sale of common units in Antero Midstream Partners LP by Antero Resources Corporation		311,100		—		—		—		311,100
Borrowings (repayments) on bank credit facility, net		(415,000)		—		217,000		—		(198,000)
Distributions		—		—		(200,037)		97,984		(102,053)
Employee tax withholding for settlement of equity compensation awards		(7,568)		—		(932)		—		(8,500)
Other		(3,861)		—		(52)		—		(3,913)
Net cash provided by (used in) financing activities		(115,329)		—		264,928		97,984		247,583
Net increase (decrease) in cash and cash equivalents		3,631		—		(11,547)		—		(7,916)
Cash and cash equivalents, beginning of period		17,568		—		14,042		—		31,610
Cash and cash equivalents, end of period	$	21,199		—		2,495		—		23,694