Leases (Tables)

9 Months Ended

Sep. 30, 2023

Leases

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	2022		2023
Operating Leases
Operating lease right-of-use assets:
Processing plants	Operating lease right-of-use assets	$	1,849,116		1,672,429
Drilling rigs and completion services	Operating lease right-of-use assets		85,405		45,406
Gas gathering lines and compressor stations (1)	Operating lease right-of-use assets		1,463,756		1,371,508
Office space	Operating lease right-of-use assets		41,822		38,736
Vehicles	Operating lease right-of-use assets		756		—
Other office and field equipment	Operating lease right-of-use assets		3,476		505
Total operating lease right-of-use assets		$	3,444,331		3,128,584
Operating lease liabilities:
Short-term operating lease liabilities	Short-term lease liabilities	$	556,137		550,028
Long-term operating lease liabilities	Long-term lease liabilities		2,888,194		2,578,556
Total operating lease liabilities		$	3,444,331		3,128,584
Finance Leases
Finance lease right-of-use assets:
Vehicles	Other property and equipment	$	2,159		3,776
Total finance lease right-of-use assets (2)		$	2,159		3,776
Finance lease liabilities:
Short-term finance lease liabilities	Short-term lease liabilities	$	499		1,009
Long-term finance lease liabilities	Long-term lease liabilities		1,660		2,767
Total finance lease liabilities		$	2,159		3,776

(1) Gas gathering lines and compressor stations includes $1.4 billion and $1.3 billion related to Antero Midstream as of December 31, 2022 and September 30, 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 September 30, 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 September 30,				Nine Months Ended September 30,
Cost	Classification	Location	2022		2023		2022		2023
Operating lease cost	Statement of operations	Gathering, compression, processing and transportation	$	378,246		418,005		1,109,422		1,206,733
Operating lease cost	Statement of operations	General and administrative		2,855		3,105		8,509		9,072
Operating lease cost	Statement of operations	Contract termination		12,000		297		12,000		4,227
Operating lease cost	Statement of operations	Lease operating		44		21		133		63
Operating lease cost	Balance sheet	Proved properties (1)		34,288		40,543		83,146		111,915
Total operating lease cost			$	427,433		461,971		1,213,210		1,332,010
Finance lease cost:
Amortization of right-of-use assets	Statement of operations	Depletion, depreciation and amortization	$	94		464		319		1,102
Interest on lease liabilities	Statement of operations	Interest expense		44		165		78		441
Total finance lease cost			$	138		629		397		1,543
Short-term lease payments			$	38,690		31,324		115,798		103,732

(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,
	2022		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,067,786		1,023,385
Operating cash flows from finance leases		—		441
Investing cash flows from operating leases		70,654		95,480
Financing cash flows from finance leases		441		580
Noncash activities:
Right-of-use assets obtained in exchange for new operating lease obligations	$	366,194		80,969
Increase to existing right-of-use assets and lease obligations from operating lease modifications, net (1)	$	119,290		12,640

(1) 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. During the nine months ended September 30, 2023, the weighted average discount rate for remeasured operating leases increased from 5.1% as of December 31, 2022 to 5.8% as of September 30, 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 September 30, 2023 (in thousands):

	Operating Leases		Financing Leases		Total
Remainder of 2023	$	178,611		386		178,997
2024		703,136		1,546		704,682
2025		609,747		1,504		611,251
2026		556,196		1,148		557,344
2027		457,972		128		458,100
Thereafter		1,252,713		33		1,252,746
Total lease payments		3,758,375		4,745		3,763,120
Less: imputed interest		(629,791)		(969)		(630,760)
Total	$	3,128,584		3,776		3,132,360

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, 2023 (in thousands):

	Operating Leases		Financing Leases		Total
Remainder of 2023	$	178,611		386		178,997
2024		703,136		1,546		704,682
2025		609,747		1,504		611,251
2026		556,196		1,148		557,344
2027		457,972		128		458,100
Thereafter		1,252,713		33		1,252,746
Total lease payments		3,758,375		4,745		3,763,120
Less: imputed interest		(629,791)		(969)		(630,760)
Total	$	3,128,584		3,776		3,132,360

Summary of weighted-average remaining lease term and discount rate

	December 31, 2022				September 30, 2023
	Operating Leases		Finance Leases		Operating Leases		Finance Leases
Weighted average remaining lease term	7.2 years		3.5 years		6.7 years		3.2 years
Weighted average discount rate	5.3	%	7.4	%	5.6	%	8.2	%