Subsidiary Guarantors (Tables)

3 Months Ended

Mar. 31, 2020

Subsidiary Guarantors

Schedule of condensed consolidating balance sheets

Condensed Consolidating Balance Sheet
December 31, 2019

(In thousands)

	Parent		Guarantor		Non-Guarantor
	(Antero)		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Assets
Current assets:
Accounts receivable, net	$	46,419		—		—		—		46,419
Accounts receivable, related parties		125,000		299,450		—		(299,450)		125,000
Accrued revenue		317,886		—		—		—		317,886
Derivative instruments		422,849		—		—		—		422,849
Other current assets		10,731		—		—		—		10,731
Total current assets		922,885		299,450		—		(299,450)		922,885
Property and equipment:
Oil and gas properties, at cost (successful efforts method):
Unproved properties		1,368,854		—		—		—		1,368,854
Proved properties		11,859,817		—		—		—		11,859,817
Gathering systems and facilities		5,802		—		—		—		5,802
Other property and equipment		71,895		—		—		—		71,895
		13,306,368		—		—		—		13,306,368
Less accumulated depletion, depreciation, and amortization		(3,327,629)		—		—		—		(3,327,629)
Property and equipment, net		9,978,739		—		—		—		9,978,739
Operating leases right-of-use assets		2,886,500		—		—		—		2,886,500
Derivative instruments		333,174		—		—		—		333,174
Investments in unconsolidated affiliates		243,048		812,129		—		—		1,055,177
Investments in consolidated affiliates		812,129		—		—		(812,129)		—
Other assets		21,094		—		—		—		21,094
Total assets	$	15,197,569		1,111,579		—		(1,111,579)		15,197,569
Liabilities and Equity
Current liabilities:
Accounts payable	$	14,498		—		—		—		14,498
Accounts payable, related parties		397,333		—		—		(299,450)		97,883
Accrued liabilities		400,850		—		—		—		400,850
Revenue distributions payable		207,988		—		—		—		207,988
Derivative instruments		6,721		—		—		—		6,721
Short-term lease liabilities		305,320		—		—		—		305,320
Other current liabilities		6,879		—		—		—		6,879
Total current liabilities		1,339,589		—		—		(299,450)		1,040,139
Long-term liabilities:
Long-term debt		3,758,868		—		—		—		3,758,868
Deferred income tax liability		781,987		—		—		—		781,987
Derivative instruments		3,519		—		—		—		3,519
Long-term lease liabilities		2,583,678		—		—		—		2,583,678
Other liabilities		58,635		—		—		—		58,635
Total liabilities		8,526,276		—		—		(299,450)		8,226,826
Equity:
Stockholders' equity:
Common stock		2,959		—		—		—		2,959
Additional paid-in capital		5,600,714		1,341,780		—		(812,129)		6,130,365
Accumulated earnings		1,067,620		(230,201)		—		—		837,419
Total stockholders' equity		6,671,293		1,111,579		—		(812,129)		6,970,743
Total liabilities and equity	$	15,197,569		1,111,579		—		(1,111,579)		15,197,569

Condensed Consolidating Balance Sheet
March 31, 2020
(In thousands)

	Parent		Guarantor		Non-Guarantor
	(Antero)		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Assets
Current assets:
Accounts receivable	$	91,944		—		—		—		91,944
Accounts receivable, related parties		—		332,353		—		(332,353)		—
Accrued revenue		201,320		—		—		—		201,320
Derivative instruments		816,444		—		—		—		816,444
Other current assets		10,313		—		—		—		10,313
Total current assets		1,120,021		332,353		—		(332,353)		1,120,021
Property and equipment:
Oil and gas properties, at cost (successful efforts method):
Unproved properties		1,289,770		—		—		—		1,289,770
Proved properties		12,154,162		—		—		—		12,154,162
Gathering systems and facilities		5,802		—		—		—		5,802
Other property and equipment		72,312		—		—		—		72,312
		13,522,046		—		—		—		13,522,046
Less accumulated depletion, depreciation, and amortization		(3,527,306)		—		—		—		(3,527,306)
Property and equipment, net		9,994,740		—		—		—		9,994,740
Operating leases right-of-use assets		2,814,539		—		—		—		2,814,539
Derivative instruments		284,461		—		—		—		284,461
Investments in unconsolidated affiliates		67,289		224,700		—		—		291,989
Investments in consolidated affiliates		224,700		—		—		(224,700)		—
Other assets		20,039		—		—		—		20,039
Total assets	$	14,525,789		557,053		—		(557,053)		14,525,789
Liabilities and Equity
Current liabilities:
Accounts payable	$	37,909		—		—		—		37,909
Accounts payable, related parties		421,247		—		—		(332,353)		88,894
Accrued liabilities		367,444		—		—		—		367,444
Revenue distributions payable		174,654		—		—		—		174,654
Short-term lease liabilities		295,658		—		—		—		295,658
Other current liabilities		7,315		—		—		—		7,315
Total current liabilities		1,304,227		—		—		(332,353)		971,874
Long-term liabilities:								—
Long-term debt		3,707,787		—		—		—		3,707,787
Deferred income tax liability		672,002		—		—		—		672,002
Derivative instruments		215		—		—		—		215
Long-term lease liabilities		2,520,939				—		—		2,520,939
Other liabilities		60,432		—		—		—		60,432
Total liabilities		8,265,602		—		—		(332,353)		7,933,249
Equity:
Stockholders' equity:								—
Common stock		2,689		—		—		—		2,689
Additional paid-in capital		4,974,162		1,341,780		—		(224,700)		6,091,242
Accumulated earnings		1,283,336		(784,727)		—		—		498,609
Total stockholders' equity		6,260,187		557,053		—		(224,700)		6,592,540
Total liabilities and equity	$	14,525,789		557,053		—		(557,053)		14,525,789

Schedule of condensed consolidating statement of operations and comprehensive income

Condensed Consolidating Statement of Operations and Comprehensive Income

Three Months Ended March 31, 2019
(In thousands)

	Parent		Guarantor		Non-Guarantor
	(Antero)		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Revenue and other:
Natural gas sales	$	657,266		—		—		—		657,266
Natural gas liquids sales		313,685		—		—		—		313,685
Oil sales		48,052		—		—		—		48,052
Commodity derivative fair value losses		(77,368)		—		—		—		(77,368)
Gathering, compression, water handling and treatment		—		—		218,360		(213,881)		4,479
Marketing		91,186		—		—		—		91,186
Other income		1,758		—		—		(1,651)		107
Total revenue and other		1,034,579		—		218,360		(215,532)		1,037,407
Operating expenses:
Lease operating		42,969		—		64,818		(66,055)		41,732
Gathering, compression, processing, and transportation		535,015		—		—		(110,486)		424,529
Production and ad valorem taxes		34,738		—		—		940		35,678
Marketing		163,084		—		—		—		163,084
Exploration		126		—		—		—		126
Impairment of oil and gas properties		81,244		—		—		—		81,244
Impairment of midstream assets		—		—		6,982		—		6,982
Depletion, depreciation, and amortization		218,494		—		21,707		—		240,201
Accretion of asset retirement obligations		913		—		63		—		976
General and administrative		49,908		—		18,793		(499)		68,202
Contract termination and rig stacking		8,360		—		—		—		8,360
Accretion of contingent acquisition consideration		—		—		1,928		(1,928)		—
Total operating expenses		1,134,851		—		114,291		(178,028)		1,071,114
Operating income (loss)		(100,272)		—		104,069		(37,504)		(33,707)
Other income (expenses):
Equity in earnings of unconsolidated affiliates		589		1,228		12,264		—		14,081
Equity in earnings of affiliates		15,021		—		—		(15,021)		—
Interest expense, net		(55,135)		—		(16,815)		—		(71,950)
Gain on deconsolidation of Antero Midstream Partners LP		1,205,705		200,337		—		—		1,406,042
Total other expenses		1,166,180		201,565		(4,551)		(15,021)		1,348,173
Income before income taxes		1,065,908		201,565		99,518		(52,525)		1,314,466
Provision for income tax expense		(288,710)		—		—		—		(288,710)
Net income and comprehensive income including noncontrolling interests		777,198		201,565		99,518		(52,525)		1,025,756
Net income and comprehensive income attributable to noncontrolling interests		—		—		—		46,993		46,993
Net income and comprehensive income attributable to Antero Resources Corporation	$	777,198		201,565		99,518		(99,518)		978,763

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
Three Months Ended March 31, 2020
(In thousands)

	Parent		Guarantor		Non-Guarantor
	(Antero)		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Revenue and other:
Natural gas sales	$	411,082		—		—		—		411,082
Natural gas liquids sales		257,673		—		—		—		257,673
Oil sales		35,646		—		—		—		35,646
Commodity derivative fair value gains		565,833		—		—		—		565,833
Marketing		46,073		—		—		—		46,073
Other income		798		—		—		—		798
Total revenue and other		1,317,105		—		—		—		1,317,105
Operating expenses:
Lease operating		25,644		—		—		—		25,644
Gathering, compression, processing, and transportation		588,624		—		—		—		588,624
Production and ad valorem taxes		25,699		—		—		—		25,699
Marketing		93,273		—		—		—		93,273
Exploration		210		—		—		—		210
Impairment of oil and gas properties		89,220		—		—		—		89,220
Depletion, depreciation, and amortization		199,677		—		—		—		199,677
Accretion of asset retirement obligations		1,104		—		—		—		1,104
General and administrative		31,221		—		—		—		31,221
Total operating expenses		1,054,672		—		—		—		1,054,672
Operating income		262,433		—		—		—		262,433
Other income (expenses):
Equity in earnings of unconsolidated affiliate		(40,312)		(87,743)		—		—		(128,055)
Impairment of equity investment		(143,849)		(466,783)		—		—		(610,632)
Interest expense, net		(53,102)		—		—		—		(53,102)
Gain on early extinguishment of debt		80,561		—		—		—		80,561
Total other expenses		(156,702)		(554,526)		—		—		(711,228)
Income (loss) before income taxes		105,731		(554,526)		—		—		(448,795)
Provision for income tax benefit		109,985		—		—		—		109,985
Net income (loss) and comprehensive income (loss)	$	215,716		(554,526)		—		—		(338,810)

Schedule of condensed consolidating statement of cash flows

Condensed Consolidating Statement of Cash Flows
Three Months Ended March 31, 2019
(In thousands)

	Parent		Guarantor		Non-Guarantor
	(Antero)		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Cash flows provided by (used in) operating activities:
Net income including noncontrolling interests	$	777,198		201,565		99,518		(52,525)		1,025,756
Adjustments to reconcile net income to net cash provided by operating activities:
Depletion, depreciation, amortization, and accretion		219,407		—		21,770		—		241,177
Impairments		81,244		—		6,982		—		88,226
Commodity derivative fair value losses		77,368		—		—		—		77,368
Gains on settled commodity derivatives		97,092		—		—		—		97,092
Deferred income tax expense		287,854		—		—		—		287,854
Equity-based compensation expense		6,426		—		2,477		—		8,903
Equity in earnings of consolidated subsidiaries		(15,021)		—		—		15,021		—
Equity in earnings of unconsolidated affiliates		(589)		(1,228)		(12,264)		—		(14,081)
Distributions of earnings from unconsolidated affiliates		—		—		12,605		—		12,605
Gain on deconsolidation of Antero Midstream Partners LP		(1,205,705)		(200,337)		—		—		(1,406,042)
Distributions from Antero Midstream Partners LP		46,469		—		—		(46,469)		—
Other		10,331		—		750		—		11,081
Changes in current assets and liabilities		102,830		—		(10,573)		16,808		109,065
Net cash provided by operating activities		484,904		—		121,265		(67,165)		539,004
Cash flows provided by (used in) investing activities:
Additions to unproved properties		(27,463)		—		—		—		(27,463)
Drilling and completion costs		(389,252)		—		—		20,565		(368,687)
Additions to water handling and treatment systems		—		—		(24,547)		131		(24,416)
Additions to gathering systems and facilities		—		—		(48,239)		—		(48,239)
Additions to other property and equipment		(2,066)		—		(1,062)		—		(3,128)
Investments in unconsolidated affiliates		—		—		(25,020)		—		(25,020)
Proceeds from the Antero Midstream Partners LP Transactions		296,611		—		—		—		296,611
Change in other assets		(1,118)		—		(3,357)		—		(4,475)
Net cash used in investing activities		(123,288)		—		(102,225)		20,696		(204,817)
Cash flows provided by (used in) financing activities:
Issuance of senior notes		—		—		650,000		—		650,000
Borrowings (repayments) on bank credit facility, net		(360,379)		—		90,379		—		(270,000)
Payments of deferred financing costs		(791)		—		(7,468)		—		(8,259)
Distributions to noncontrolling interests in Antero Midstream Partners LP		—		—		(131,545)		46,469		(85,076)
Employee tax withholding for settlement of equity compensation awards		(450)		—		(29)		—		(479)
Other		4		—		(845)		—		(841)
Net cash provided by (used in) financing activities		(361,616)		—		600,492		46,469		285,345
Effect of deconsolidation of Antero Midstream Partners LP		—		—		(619,532)		—		(619,532)
Net increase (decrease) in cash and cash equivalents		—		—		—		—		—
Cash and cash equivalents, beginning of period		—		—		—		—		—
Cash and cash equivalents, end of period	$	—		—		—		—		—

Condensed Consolidating Statement of Cash Flows
Three Months Ended March 31, 2020

(In thousands)

	Parent		Guarantor		Non-Guarantor
	(Antero)		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Cash flows provided by (used in) operating activities:
Net income (loss) including noncontrolling interests	$	215,716		(554,526)		—		—		(338,810)
Adjustment to reconcile net income (loss) to net cash provided by operating activities:
Depletion, depreciation, amortization, and accretion		200,781		—		—		—		200,781
Impairment of oil and gas properties		89,220		—		—		—		89,220
Commodity derivative fair value gains		(565,833)		—		—		—		(565,833)
Gains on settled commodity derivatives		210,926		—		—		—		210,926
Equity-based compensation expense		3,329		—		—		—		3,329
Deferred income tax benefit		(109,985)		—		—		—		(109,985)
Gain on early extinguishment of debt		(80,561)		—		—		—		(80,561)
Equity in loss of unconsolidated affiliates		40,312		87,743		—		—		128,055
Impairment of equity investment		143,849		466,783		—		—		610,632
Distributions/dividends of earnings from unconsolidated affiliates		42,756		—		—		—		42,756
Other		2,440		—		—		—		2,440
Changes in current assets and liabilities		7,727		—		—		—		7,727
Net cash provided by operating activities		200,677		—		—		—		200,677
Cash flows provided by (used in) investing activities:
Additions to unproved properties		(10,357)		—		—		—		(10,357)
Drilling and completion costs		(300,483)		—		—		—		(300,483)
Additions to other property and equipment		(771)		—		—		—		(771)
Settlement of water earnout		125,000		—		—		—		125,000
Change in other assets		(70)		—		—		—		(70)
Net cash used in investing activities		(186,681)		—		—		—		(186,681)
Cash flows provided by (used in) financing activities:
Repurchases of common stock		(42,690)		—		—		—		(42,690)
Repayment of senior notes		(300,835)		—		—		—		(300,835)
Borrowings on bank credit facility, net		330,000		—		—		—		330,000
Employee tax withholding for settlement of equity compensation awards		(32)		—		—		—		(32)
Other		(439)		—		—		—		(439)
Net cash used in financing activities		(13,996)		—		—		—		(13,996)
Net increase in cash and cash equivalents		—		—		—		—		—
Cash and cash equivalents, beginning of period		—		—		—		—		—
Cash and cash equivalents, end of period	$	—		—		—		—		—