Subsidiary Guarantors (Tables)

6 Months Ended

Jun. 30, 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 affiliate		243,048		812,129		—		—		1,055,177
Investments in consolidated affiliate		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 (loss)		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
June 30, 2020
(In thousands)

	Parent		Guarantor		Non-Guarantor
	(Antero)		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Assets
Current assets:
Cash	$	(6,793)		—		6,793		—		—
Accounts receivable		57,013		—		—		—		57,013
Accounts receivable, related parties		—		365,255		12,523		(377,778)		—
Accrued revenue		249,201		—		5,662		—		254,863
Derivative instruments		521,459		—		—		—		521,459
Other current assets		8,942		—		—		—		8,942
Total current assets		829,822		365,255		24,978		(377,778)		842,277
Property and equipment:
Oil and gas properties, at cost (successful efforts method):
Unproved properties		1,231,051		—		46,425		—		1,277,476
Proved properties		11,168,728		—		820,574		—		11,989,302
Gathering systems and facilities		5,802		—		—		—		5,802
Other property and equipment		72,649		—		—		—		72,649
		12,478,230		—		866,999		—		13,345,229
Less accumulated depletion, depreciation, and amortization		(3,406,859)		—		(1,240)		—		(3,408,099)
Property and equipment, net		9,071,371		—		865,759		—		9,937,130
Operating leases right-of-use assets		2,562,945		—		—		—		2,562,945
Derivative instruments		103,514		—		—		—		103,514
Investment in unconsolidated affiliate		68,134		211,671		—		—		279,805
Investments in consolidated affiliates		795,965		—		—		(795,965)		—
Other assets		18,319		—		—		—		18,319
Total assets	$	13,450,070		576,926		890,737		(1,173,743)		13,743,990
Liabilities and Equity
Current liabilities:
Accounts payable	$	33,323		—		3,413		—		36,736
Accounts payable, related parties		447,284		—		3,869		(377,778)		73,375
Accrued liabilities		339,388		—		—		—		339,388
Revenue distributions payable		173,759		—		—		—		173,759
Derivative instruments		2,905		—		747		—		3,652
Short-term lease liabilities		230,499		—		—		—		230,499
Other current liabilities		6,831		—		—		—		6,831
Total current liabilities		1,233,989		—		8,029		(377,778)		864,240
Long-term liabilities:
Long-term debt		3,518,076		—		—		—		3,518,076
Deferred income tax liability		529,598		—		—		—		529,598
Derivative instruments		967		—		1,591		—		2,558
Long-term lease liabilities		2,334,227		—		—		—		2,334,227
Other liabilities		62,312		—		—		—		62,312
Total liabilities		7,679,169		—		9,620		(377,778)		7,311,011
Equity:
Stockholders' equity:
Common stock		2,684		—		879,070		(879,070)		2,684
Additional paid-in capital		4,970,105		1,341,780		—		(213,718)		6,098,167
Accumulated earnings (loss)		798,112		(764,854)		2,047		—		35,305
Total stockholders' equity		5,770,901		576,926		881,117		(1,092,788)		6,136,156
Noncontrolling interest		—		—		—		296,823		296,823
Total liabilities and equity	$	13,450,070		576,926		890,737		(1,173,743)		13,743,990

Condensed Consolidating Statement of Operations and Comprehensive Income

Three Months Ended June 30, 2019
(In thousands)

	Parent		Guarantor		Non-Guarantor
	(Antero)		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Revenue and other:
Natural gas sales	$	553,372		—		—		—		553,372
Natural gas liquids sales		303,963		—		—		—		303,963
Oil sales		49,062		—		—		—		49,062
Commodity derivative fair value gains		328,427		—		—		—		328,427
Marketing		63,080		—		—		—		63,080
Other income		1,760		—		—		—		1,760
Total revenue and other		1,299,664		—		—		—		1,299,664
Operating expenses:
Lease operating		40,857		—		—		—		40,857
Gathering, compression, processing, and transportation		566,834		—		—		—		566,834
Production and ad valorem taxes		30,968		—		—		—		30,968
Marketing		137,539		—		—		—		137,539
Exploration		314		—		—		—		314
Impairment of oil and gas properties		130,999		—		—		—		130,999
Depletion, depreciation, and amortization		242,302		—		—		—		242,302
Loss on sale of assets		951		—		—		—		951
Accretion of asset retirement obligations		918		—		—		—		918
General and administrative		42,382		—		—		—		42,382
Contract termination and rig stacking		5,604		—		—		—		5,604
Total operating expenses		1,199,668		—		—		—		1,199,668
Operating income (loss)		99,996		—		—		—		99,996
Other income (expenses):
Equity in earnings of unconsolidated affiliates		4,410		9,175		—		—		13,585
Interest expense, net		(54,164)		—		—		—		(54,164)
Total other income (expenses)		(49,754)		9,175		—		—		(40,579)
Income before income taxes		50,242		9,175		—		—		59,417
Provision for income tax expense		(17,249)		—		—		—		(17,249)
Net income and comprehensive income attributable to Antero Resources Corporation	$	32,993		9,175		—		—		42,168

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Three Months Ended June 30, 2020
(In thousands)

	Parent		Guarantor		Non-Guarantor
	(Antero)		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Revenue and other:
Natural gas sales	$	363,975		—		3,440		—		367,415
Natural gas liquids sales		210,251		—		1,946		—		212,197
Oil sales		7,965		—		357		—		8,322
Commodity derivative fair value losses		(165,676)		—		(2,339)		—		(168,015)
Marketing		64,285		—		—		—		64,285
Other income		745		—		—		(38)		707
Total revenue and other		481,545		—		3,404		(38)		484,911
Operating expenses:
Lease operating		24,742		—		—		—		24,742
Gathering, compression, processing, and transportation		631,845		—		—		—		631,845
Production and ad valorem taxes		19,913		—		79		—		19,992
Marketing		113,053		—		—		—		113,053
Exploration		231		—		—		—		231
Impairment of oil and gas properties		37,350		—		—		—		37,350
Depletion, depreciation, and amortization		212,795		—		1,240		—		214,035
Accretion of asset retirement obligations		1,111		—		—		—		1,111
General and administrative		38,403		—		38		(38)		38,403
Contract termination and rig stacking		11,071		—		—		—		11,071
Total operating expenses		1,090,514		—		1,357		(38)		1,091,833
Operating income (loss)		(608,969)		—		2,047		—		(606,922)
Other income (expenses):
Equity in earnings of unconsolidated affiliates		355		19,873		—		—		20,228
Transaction expense		(6,138)		—		—		—		(6,138)
Interest expense, net		(51,811)		—		—		—		(51,811)
Gain on early extinguishment of debt		39,171		—		—		—		39,171
Total other income (expenses)		(18,423)		19,873		—		—		1,450
Income (loss) before income taxes		(627,392)		19,873		2,047		—		(605,472)
Provision for income tax benefit		142,404		—		—		—		142,404
Net income (loss) and comprehensive income (loss) including noncontrolling interests		(484,988)		19,873		2,047		—		(463,068)
Net income and comprehensive income attributable to noncontrolling interests		—						236		236
Net income (loss) and comprehensive income (loss) attributable to Antero Resources Corporation	$	(484,988)		19,873		2,047		(236)		(463,304)

Condensed Consolidating Statement of Operations and Comprehensive Income

Six Months Ended June 30, 2019
(In thousands)

	Parent		Guarantor		Non-Guarantor
	(Antero)		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Revenue and other:
Natural gas sales	$	1,210,638		—		—		—		1,210,638
Natural gas liquids sales		617,648		—		—		—		617,648
Oil sales		97,114		—		—		—		97,114
Commodity derivative fair value gains		251,059		—		—		—		251,059
Gathering, compression, water handling and treatment		—		—		218,360		(213,881)		4,479
Marketing		154,266		—		—		—		154,266
Other income		3,518		—		—		(1,651)		1,867
Total revenue and other		2,334,243		—		218,360		(215,532)		2,337,071
Operating expenses:
Lease operating		83,826		—		64,818		(66,055)		82,589
Gathering, compression, processing, and transportation		1,101,849		—		—		(110,486)		991,363
Production and ad valorem taxes		65,706		—		—		940		66,646
Marketing		300,623		—		—		—		300,623
Exploration		440		—		—		—		440
Impairment of oil and gas properties		212,243		—		—		—		212,243
Impairment of midstream assets		—		—		6,982		—		6,982
Depletion, depreciation, and amortization		460,796		—		21,707		—		482,503
Loss on sale of asset		951								951
Accretion of asset retirement obligations		1,831		—		63		—		1,894
General and administrative		92,290		—		18,793		(499)		110,584
Contract termination and rig stacking		13,964		—		—		—		13,964
Accretion of contingent acquisition consideration		—		—		1,928		(1,928)		—
Total operating expenses		2,334,519		—		114,291		(178,028)		2,270,782
Operating income (loss)		(276)		—		104,069		(37,504)		66,289
Other income (expenses):
Equity in earnings of unconsolidated affiliates		4,999		10,403		12,264		—		27,666
Interest expense, net		(109,299)		—		(16,815)		—		(126,114)
Equity in earnings of affiliates		15,021		—		—		(15,021)		—
Gain on deconsolidation of Antero Midstream Partners LP		1,205,705		200,337		—		—		1,406,042
Total other expenses		1,116,426		210,740		(4,551)		(15,021)		1,307,594
Income before income taxes		1,116,150		210,740		99,518		(52,525)		1,373,883
Provision for income tax expense		(305,959)		—		—		—		(305,959)
Net income and comprehensive income including noncontrolling interests		810,191		210,740		99,518		(52,525)		1,067,924
Net income and comprehensive income attributable to noncontrolling interests		—		—		—		46,993		46,993
Net income and comprehensive income attributable to Antero Resources Corporation	$	810,191		210,740		99,518		(99,518)		1,020,931

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)
Six Months Ended June 30, 2020
(In thousands)

	Parent		Guarantor		Non-Guarantor
	(Antero)		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Revenue and other:
Natural gas sales	$	775,057		—		3,440		—		778,497
Natural gas liquids sales		467,924		—		1,946		—		469,870
Oil sales		43,611		—		357		—		43,968
Commodity derivative fair value gains (losses)		400,157		—		(2,339)		—		397,818
Marketing		110,358		—		—		—		110,358
Other income		1,543		—		—		(38)		1,505
Total revenue and other		1,798,650		—		3,404		(38)		1,802,016
Operating expenses:
Lease operating		50,386		—		—		—		50,386
Gathering, compression, processing, and transportation		1,220,469		—		—		—		1,220,469
Production and ad valorem taxes		45,612		—		79		—		45,691
Marketing		206,326		—		—		—		206,326
Exploration		441		—		—		—		441
Impairment of oil and gas properties		126,570		—		—		—		126,570
Depletion, depreciation, and amortization		412,472		—		1,240		—		413,712
Accretion of asset retirement obligations		2,215		—		—		—		2,215
General and administrative		69,624		—		38		(38)		69,624
Contract termination and rig stacking		11,071		—		—		—		11,071
Total operating expenses		2,145,186		—		1,357		(38)		2,146,505
Operating income (loss)		(346,536)		—		2,047		—		(344,489)
Other income (expenses):
Equity in loss of unconsolidated affiliates		(39,957)		(67,870)		—		—		(107,827)
Impairment of equity investment		(143,849)		(466,783)		—		—		(610,632)
Transaction expense		(6,138)		—		—		—		(6,138)
Interest expense, net		(104,913)		—		—		—		(104,913)
Gain on early extinguishment of debt		119,732		—		—		—		119,732
Total other expenses		(175,125)		(534,653)		—		—		(709,778)
Income (loss) before income taxes		(521,661)		(534,653)		2,047		—		(1,054,267)
Provision for income tax benefit		252,389		—		—		—		252,389
Net income (loss) and comprehensive income (loss) including noncontrolling interests		(269,272)		(534,653)		2,047		—		(801,878)
Net income and comprehensive income attributable to noncontrolling interests		—		—		—		236		236
Net income (loss) and comprehensive income (loss) attributable to Antero Resources Corporation	$	(269,272)		(534,653)		2,047		(236)		(802,114)

Schedule of condensed consolidating statement of operations and comprehensive income

	Parent		Guarantor		Non-Guarantor
	(Antero)		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Assets
Current assets:
Cash	$	(6,793)		—		6,793		—		—
Accounts receivable		57,013		—		—		—		57,013
Accounts receivable, related parties		—		365,255		12,523		(377,778)		—
Accrued revenue		249,201		—		5,662		—		254,863
Derivative instruments		521,459		—		—		—		521,459
Other current assets		8,942		—		—		—		8,942
Total current assets		829,822		365,255		24,978		(377,778)		842,277
Property and equipment:
Oil and gas properties, at cost (successful efforts method):
Unproved properties		1,231,051		—		46,425		—		1,277,476
Proved properties		11,168,728		—		820,574		—		11,989,302
Gathering systems and facilities		5,802		—		—		—		5,802
Other property and equipment		72,649		—		—		—		72,649
		12,478,230		—		866,999		—		13,345,229
Less accumulated depletion, depreciation, and amortization		(3,406,859)		—		(1,240)		—		(3,408,099)
Property and equipment, net		9,071,371		—		865,759		—		9,937,130
Operating leases right-of-use assets		2,562,945		—		—		—		2,562,945
Derivative instruments		103,514		—		—		—		103,514
Investment in unconsolidated affiliate		68,134		211,671		—		—		279,805
Investments in consolidated affiliates		795,965		—		—		(795,965)		—
Other assets		18,319		—		—		—		18,319
Total assets	$	13,450,070		576,926		890,737		(1,173,743)		13,743,990
Liabilities and Equity
Current liabilities:
Accounts payable	$	33,323		—		3,413		—		36,736
Accounts payable, related parties		447,284		—		3,869		(377,778)		73,375
Accrued liabilities		339,388		—		—		—		339,388
Revenue distributions payable		173,759		—		—		—		173,759
Derivative instruments		2,905		—		747		—		3,652
Short-term lease liabilities		230,499		—		—		—		230,499
Other current liabilities		6,831		—		—		—		6,831
Total current liabilities		1,233,989		—		8,029		(377,778)		864,240
Long-term liabilities:
Long-term debt		3,518,076		—		—		—		3,518,076
Deferred income tax liability		529,598		—		—		—		529,598
Derivative instruments		967		—		1,591		—		2,558
Long-term lease liabilities		2,334,227		—		—		—		2,334,227
Other liabilities		62,312		—		—		—		62,312
Total liabilities		7,679,169		—		9,620		(377,778)		7,311,011
Equity:
Stockholders' equity:
Common stock		2,684		—		879,070		(879,070)		2,684
Additional paid-in capital		4,970,105		1,341,780		—		(213,718)		6,098,167
Accumulated earnings (loss)		798,112		(764,854)		2,047		—		35,305
Total stockholders' equity		5,770,901		576,926		881,117		(1,092,788)		6,136,156
Noncontrolling interest		—		—		—		296,823		296,823
Total liabilities and equity	$	13,450,070		576,926		890,737		(1,173,743)		13,743,990

Schedule of condensed consolidating statement of cash flows

Condensed Consolidating Statement of Cash Flows
Six Months Ended June 30, 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	$	810,191		210,740		99,518		(52,525)		1,067,924
Adjustments to reconcile net income to net cash provided by operating activities:		—
Depletion, depreciation, amortization, and accretion		462,627		—		21,770		—		484,397
Impairments		212,243		—		6,982		—		219,225
Commodity derivative fair value gains		(251,059)		—		—		—		(251,059)
Gains on settled commodity derivatives		141,791		—		—		—		141,791
Deferred income tax expense		304,963		—		—		—		304,963
Loss on sale of assets		951		—		—		—		951
Equity-based compensation expense		12,975		—		2,477		—		15,452
Equity in earnings of affiliates		(15,021)		—		—		15,021		—
Equity in earnings of unconsolidated affiliates		(4,999)		(10,403)		(12,264)		—		(27,666)
Distributions/dividends of earnings from unconsolidated affiliates		47,922		—		12,605		—		60,527
Gain on deconsolidation of Antero Midstream Partners LP		(1,205,705)		(200,337)		—		—		(1,406,042)
Distributions from Antero Midstream Partners LP		94,391		—		—		(94,391)		—
Other		(43,002)		—		750		47,922		5,670
Changes in current assets and liabilities		134,740		—		(10,573)		16,808		140,975
Net cash provided by operating activities		703,008		—		121,265		(67,165)		757,108
Cash flows provided by (used in) investing activities:
Additions to unproved properties		(56,814)		—		—		—		(56,814)
Drilling and completion costs		(700,653)		—		—		20,565		(680,088)
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		(3,567)		—		(1,062)		—		(4,629)
Investments in unconsolidated affiliates		—		—		(25,020)		—		(25,020)
Proceeds from the Antero Midstream Partners LP Transactions		296,611		—		—		—		296,611
Change in other assets		(1,617)		—		(3,357)		—		(4,974)
Proceeds from sale of assets		1,983								1,983
Net cash used in investing activities		(464,057)		—		(102,225)		20,696		(545,586)
Cash flows provided by (used in) financing activities:
Issuance of senior notes		—		—		650,000		—		650,000
Borrowings (repayments) on bank credit facility, net		(235,379)		—		90,379		—		(145,000)
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		(2,266)		—		(29)		—		(2,295)
Other		(515)		—		(845)		—		(1,360)
Net cash provided by (used in) financing activities		(238,951)		—		600,492		46,469		408,010
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
Six Months Ended June 30, 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	$	(269,272)		(534,653)		2,047		—		(801,878)
Adjustment to reconcile net income (loss) to net cash provided by operating activities:
Depletion, depreciation, amortization, and accretion		414,687		—		1,240		—		415,927
Impairment of oil and gas properties		126,570		—		—		—		126,570
Commodity derivative fair value (gains) losses		(400,157)		—		2,339		—		(397,818)
Gains on settled commodity derivatives		524,838		—		—		—		524,838
Equity-based compensation expense		11,302		—		—		—		11,302
Deferred income tax benefit		(252,389)		—		—		—		(252,389)
Gain on early extinguishment of debt		(119,732)		—		—		—		(119,732)
Equity in loss of unconsolidated affiliates		39,957		67,870		—		—		107,827
Impairment of equity investment		143,849		466,783		—		—		610,632
Distributions/dividends of earnings from unconsolidated affiliates		85,511		—		—		—		85,511
Other		4,433		—		—		—		4,433
Changes in current assets and liabilities		7,043		—		(5,626)		—		1,417
Net cash provided by operating activities		316,640		—		—		—		316,640
Cash flows provided by (used in) investing activities:
Additions to unproved properties		(21,672)		—		—		—		(21,672)
Drilling and completion costs		(552,227)		—		—		—		(552,227)
Additions to other property and equipment		(1,234)		—		—		—		(1,234)
Settlement of water earnout		125,000		—		—		—		125,000
Change in other assets		525		—		—		—		525
Net cash used in investing activities		(449,608)		—		—		—		(449,608)
Cash flows provided by (used in) financing activities:
Repurchases of common stock		(43,443)		—		—		—		(43,443)
Repayment of senior notes		(496,541)		—		—		—		(496,541)
Borrowings on bank credit facility, net		374,000		—		—		—		374,000
Sale (purchase) noncontrolling interests		(6,793)		—		306,793		—		300,000
(Distributions) proceeds to interest holders		300,000		—		(300,000)		—		—
Employee tax withholding for settlement of equity compensation awards		(331)		—		—		—		(331)
Other		(717)		—		—		—		(717)
Net cash provided by financing activities		126,175		—		6,793		—		132,968
Net increase in cash and cash equivalents		(6,793)		—		6,793		—		—
Cash and cash equivalents, beginning of period		—		—		—		—		—
Cash and cash equivalents, end of period	$	(6,793)		—		6,793		—		—