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Leases (Tables)

3 Months Ended

Mar. 31, 2024

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		2023			2024
Operating Leases
Operating lease right-of-use assets:
Processing plants		Operating lease right-of-use assets		$	1,611,903			1,550,542
Drilling rigs and completion services		Operating lease right-of-use assets			32,187			24,567
Gas gathering lines and compressor stations ⁽¹⁾		Operating lease right-of-use assets			1,283,668			1,320,473
Office space		Operating lease right-of-use assets			37,706			36,592
Other office and field equipment		Operating lease right-of-use assets			416			327
Total operating lease right-of-use assets				$	2,965,880			2,932,501
Operating lease liabilities:
Short-term operating lease liabilities		Short-term lease liabilities		$	538,954			534,463
Long-term operating lease liabilities		Long-term lease liabilities			2,425,785			2,396,916
Total operating lease liabilities				$	2,964,739			2,931,379

Finance Leases
Finance lease right-of-use assets:
Vehicles		Other property and equipment		$	3,771			3,512
Total finance lease right-of-use assets ⁽²⁾				$	3,771			3,512
Finance lease liabilities:
Short-term finance lease liabilities		Short-term lease liabilities		$	1,106			1,154
Long-term finance lease liabilities		Long-term lease liabilities			2,665			2,358
Total finance lease liabilities				$	3,771			3,512

(1)	Gas gathering lines and compressor stations includes $1.3 billion related to Antero Midstream as of December 31, 2023 and March 31, 2024. See “—Related party lease disclosure” for additional discussion.

(2)	Financing lease assets are recorded net of accumulated amortization of $1 million and $2 million as of December 31, 2023 and March 31, 2024, respectively.

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 income (in thousands):


						Three Months Ended March 31,
Cost		Classification		Location		2023			2024
Operating lease cost		Statement of operations		Gathering, compression, processing and transportation		$	381,283			422,068
Operating lease cost		Statement of operations		General and administrative			2,937			3,083
Operating lease cost		Statement of operations		Contract termination			1,122			—
Operating lease cost		Statement of operations		Lease operating			21			21
Operating lease cost		Balance sheet		Proved properties ⁽¹⁾			39,770			33,412
Total operating lease cost						$	425,133			458,584

Finance lease cost:
Amortization of right-of-use assets		Statement of operations		Depletion, depreciation and amortization		$	92			430
Interest on lease liabilities		Statement of operations		Interest expense			114			148
Total finance lease cost						$	206			578

Short-term lease payments						$	37,701			29,443

(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,
		2023			2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases		$	315,665			350,925
Operating cash flows from finance leases			114			148
Investing cash flows from operating leases			32,880			27,976
Financing cash flows from finance leases			158			259

Noncash activities:
Right-of-use assets obtained in exchange for new operating lease obligations		$	51,208			97,137
Increase to existing right-of-use assets and lease obligations from operating lease modifications, net ⁽¹⁾		$	40,130			4,511

(1)

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. During the three months ended March 31, 2024, the weighted average discount rate for remeasured operating leases decreased from 6.5% as of December 31, 2023 to 5.9% as of March 31, 2024.

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, 2024 (in thousands):


		Operating Leases			Financing Leases			Total
Remainder of 2024		$	529,813			1,221			531,034
2025			617,055			1,585			618,640
2026			564,617			1,229			565,846
2027			465,509			197			465,706
2028			388,720			23			388,743
Thereafter			943,220			10			943,230
Total lease payments			3,508,934			4,265			3,513,199
Less: imputed interest			(577,555)			(753)			(578,308)
Total		$	2,931,379			3,512			2,934,891

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, 2024 (in thousands):


		Operating Leases			Financing Leases			Total
Remainder of 2024		$	529,813			1,221			531,034
2025			617,055			1,585			618,640
2026			564,617			1,229			565,846
2027			465,509			197			465,706
2028			388,720			23			388,743
Thereafter			943,220			10			943,230
Total lease payments			3,508,934			4,265			3,513,199
Less: imputed interest			(577,555)			(753)			(578,308)
Total		$	2,931,379			3,512			2,934,891

Summary of weighted-average remaining lease term and discount rate


		December 31, 2023				March 31, 2024
		Operating Leases		Finance Leases		Operating Leases		Finance Leases
Weighted average remaining lease term		6.5 years		3.0 years		6.5 years		2.7 years
Weighted average discount rate		5.9	%	8.3	%	5.7	%	8.3	%