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Leases (Tables)

3 Months Ended

Mar. 31, 2023

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,		March 31,
Leases	Balance Sheet Classification	2022		2023
Operating Leases
Operating lease right-of-use assets:
Processing plants	Operating lease right-of-use assets	$	1,849,116		1,791,025
Drilling rigs and completion services	Operating lease right-of-use assets		85,405		68,932
Gas gathering lines and compressor stations ⁽¹⁾	Operating lease right-of-use assets		1,463,756		1,497,721
Office space	Operating lease right-of-use assets		41,822		40,790
Vehicles	Operating lease right-of-use assets		756		434
Other office and field equipment	Operating lease right-of-use assets		3,476		3,092
Total operating lease right-of-use assets		$	3,444,331		3,401,994

Short-term operating lease obligation	Short-term lease liabilities	$	556,137		552,806
Long-term operating lease obligation	Long-term lease liabilities		2,888,194		2,849,188
Total operating lease obligation		$	3,444,331		3,401,994

Finance Leases
Finance lease right-of-use assets:
Vehicles	Other property and equipment	$	2,159		3,109
Total finance lease right-of-use assets ⁽²⁾		$	2,159		3,109

Short-term finance lease obligation	Short-term lease liabilities	$	499		726
Long-term finance lease obligation	Long-term lease liabilities		1,660		2,383
Total finance lease obligation		$	2,159		3,109

(1)	Gas gathering lines and compressor stations includes $1.4 billion and $1.5 billon related to Antero Midstream as of December 31, 2022 and March 31, 2023, respectively. See “—Related party lease disclosure” for additional discussion.

(2)	Financing lease assets are recorded net of accumulated amortization of $1 million as of December 31, 2022 and March 31, 2023.

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 March 31,
Cost	Classification	Location	2022		2023
Operating lease cost	Statement of operations	Gathering, compression, processing and transportation	$	365,834		381,283
Operating lease cost	Statement of operations	General and administrative		2,867		2,937
Operating lease cost	Statement of operations	Contract termination		—		1,122
Operating lease cost	Statement of operations	Lease operating		45		21
Operating lease cost	Balance sheet	Proved properties ⁽¹⁾		7,759		39,770
Total operating lease cost			$	376,505		425,133

Finance lease cost:
Amortization of right-of-use assets	Statement of operations	Depletion, depreciation and amortization	$	118		92
Interest on lease liabilities	Statement of operations	Interest expense		14		114
Total finance lease cost			$	132		206

Short-term lease payments			$	48,760		37,701

(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):


	Three Months Ended March 31,
	2022		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	305,841		315,665
Operating cash flows from finance leases		—		114
Investing cash flows from operating leases		6,037		32,880
Financing cash flows from finance leases		134		158

Noncash activities:
Right-of-use assets obtained in exchange for new operating lease obligations	$	5,321		51,208
Increase (decrease) to existing right-of-use assets and lease obligations from operating lease modifications, net ⁽¹⁾	$	(25,926)		40,130

(1)

During the three months ended March 31, 2022, the weighted average discount rate for remeasured operating leases decreased from 6.3% as of December 31, 2021 to 3.6% as of March 31, 2022. During the three months ended March 31, 2023, the weighted average discount rate for remeasured operating leases increased from 5.2% as of December 31, 2022 to 5.8% as of March 31, 2023.

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 March 31, 2023 (in thousands):


	Operating Leases		Financing Leases		Total
2023	$	561,359		891		562,250
2024		685,290		1,181		686,471
2025		609,654		1,139		610,793
2026		556,196		804		557,000
2027		457,972		38		458,010
Thereafter		1,252,713		—		1,252,713
Total lease payments		4,123,184		4,053		4,127,237
Less: imputed interest		(721,190)		(944)		(722,134)
Total	$	3,401,994		3,109		3,405,103

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 March 31, 2023 (in thousands):


	Operating Leases		Financing Leases		Total
2023	$	561,359		891		562,250
2024		685,290		1,181		686,471
2025		609,654		1,139		610,793
2026		556,196		804		557,000
2027		457,972		38		458,010
Thereafter		1,252,713		—		1,252,713
Total lease payments		4,123,184		4,053		4,127,237
Less: imputed interest		(721,190)		(944)		(722,134)
Total	$	3,401,994		3,109		3,405,103

Summary of weighted-average remaining lease term and discount rate


	December 31, 2022				March 31, 2023
	Operating Leases		Finance Leases		Operating Leases		Finance Leases
Weighted average remaining lease term	7.2 years		3.5 years		7.0 years		3.5 years
Weighted average discount rate	5.3	%	7.4	%	5.6	%	8.0	%