Annual report pursuant to Section 13 and 15(d)

Condensed Consolidating Financial Information

v3.19.3.a.u2
Condensed Consolidating Financial Information
12 Months Ended
Dec. 31, 2019
Condensed Consolidating Financial Information  
Condensed Consolidating Financial Information

(19) Condensed Consolidating Financial Information

Each of the Company’s wholly owned subsidiaries has fully and unconditionally guaranteed Antero Resources’ senior notes. In the event a subsidiary guarantor is sold or disposed of (whether by merger, consolidation, the sale of a sufficient amount of its capital stock so that it no longer qualifies as a “Subsidiary” of the Company (as defined in the indentures governing the notes) or the sale of all or substantially all of its assets (other than by lease)) and whether or not the subsidiary guarantor is the surviving entity in such transaction to a person that is not the Company or a restricted subsidiary of the Company, such subsidiary guarantor will be released from its obligations under its subsidiary guarantee if the sale or other disposition does not violate the covenants set forth in the indentures governing the notes.

In addition, a subsidiary guarantor will be released from its obligations under the indentures and its guarantee, upon the release or discharge of the guarantee of other Indebtedness (as defined in the indentures governing the notes) that resulted in the creation of such guarantee, except a release or discharge by or as a result of payment under such guarantee; if the Company designates such subsidiary as an unrestricted subsidiary and such designation complies with the other applicable provisions of the indentures governing the notes or in connection with any covenant defeasance, legal defeasance or satisfaction and discharge of the notes.

The following Condensed Consolidating Balance Sheets at December 31, 2018 and 2019, and the related Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) and Condensed Consolidating Statements of Cash Flows for the years ended December 31, 2017, 2018 and 2019, present financial information for Antero Resources on a stand-alone basis (carrying its investment in subsidiaries using the equity method), financial information for the subsidiary guarantors, financial information for the non-guarantor subsidiaries, and the consolidation and elimination entries necessary to arrive at the information for the Company on a consolidated basis. The Company’s wholly owned subsidiaries are not restricted from making distributions to the Company.

Condensed Consolidating Balance Sheet

December 31, 2018

(In thousands)

Parent

Guarantor

Non-Guarantor

(Antero)

Subsidiaries

Subsidiaries

Eliminations

Consolidated

Assets

Current assets:

Accounts receivable, net

$

49,529

1,544

51,073

Intercompany receivables

383

115,378

(115,761)

Accrued revenue

474,827

474,827

Derivative instruments

245,263

245,263

Other current assets

13,937

21,513

35,450

Total current assets

783,939

138,435

(115,761)

806,613

Property and equipment:

Oil and gas properties, at cost (successful efforts method):

Unproved properties

1,767,600

1,767,600

Proved properties

13,306,585

(600,913)

12,705,672

Water handling and treatment systems

1,004,793

9,025

1,013,818

Gathering systems and facilities

17,825

2,452,883

2,470,708

Other property and equipment

65,770

72

65,842

15,157,780

3,457,748

(591,888)

18,023,640

Less accumulated depletion, depreciation, and amortization

(3,654,392)

(499,333)

(4,153,725)

Property and equipment, net

11,503,388

2,958,415

(591,888)

13,869,915

Derivative instruments

362,169

362,169

Investment in Antero Midstream Partners

(740,031)

740,031

Contingent acquisition consideration

114,995

(114,995)

Investments in unconsolidated affiliates

433,642

433,642

Other assets

31,200

15,925

47,125

Total assets

$

12,055,660

3,546,417

(82,613)

15,519,464

Liabilities and Equity

Current liabilities:

Accounts payable

$

44,917

21,372

66,289

Intercompany payable

111,620

4,141

(115,761)

Accrued liabilities

392,949

72,121

465,070

Revenue distributions payable

310,827

310,827

Derivative instruments

532

532

Short-term lease liabilities

2,459

2,459

Other current liabilities

2,162

2,052

4,149

8,363

Total current liabilities

865,466

99,686

(111,612)

853,540

Long-term liabilities:

Long-term debt

3,829,541

1,632,147

5,461,688

Deferred income tax liability

650,788

650,788

Contingent acquisition consideration

114,995

(114,995)

Long-term lease liabilities

2,873

2,873

Other liabilities

55,017

8,081

63,098

Total liabilities

5,403,685

1,854,909

(226,607)

7,031,987

Equity:

Stockholders' equity:

Partners' capital

1,691,508

(1,691,508)

Common stock

3,086

3,086

Additional paid-in capital

5,471,341

1,013,833

6,485,174

Accumulated earnings

1,177,548

1,177,548

Total stockholders' equity

6,651,975

1,691,508

(677,675)

7,665,808

Noncontrolling interests in consolidated subsidiary

821,669

821,669

Total equity

6,651,975

1,691,508

143,994

8,487,477

Total liabilities and equity

$

12,055,660

3,546,417

(82,613)

15,519,464

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 Statement of Operations and Comprehensive Income

Year Ended December 31, 2017

(In thousands)

Parent

Guarantor

Non-Guarantor

(Antero)

Subsidiaries

Subsidiaries

Eliminations

Consolidated

Revenue and other:

Natural gas sales

$

1,769,975

(691)

1,769,284

Natural gas liquids sales

 

870,441

 

870,441

Oil sales

108,195

108,195

Commodity derivative fair value gains

658,283

658,283

Gathering, compression, water handling and treatment

772,497

(759,777)

12,720

Marketing

258,045

258,045

Marketing derivative loss

(21,394)

(21,394)

Other income

16,667

(16,667)

Total revenue and other

3,660,212

772,497

(777,135)

3,655,574

Operating expenses:

Lease operating

93,758

189,702

(194,403)

89,057

Gathering, compression, processing, and transportation

1,441,129

39,147

(384,637)

1,095,639

Production and ad valorem taxes

90,832

3,689

94,521

Marketing

366,281

366,281

Exploration

8,538

8,538

Impairment of unproved properties

159,598

159,598

Impairment of gathering systems and facilities

23,431

23,431

Depletion, depreciation, and amortization

705,048

119,562

824,610

Accretion of asset retirement obligations

2,610

2,610

General and administrative

195,153

58,812

(2,769)

251,196

Change in fair value of contingent acquisition consideration

13,476

(13,476)

Total operating expenses

3,062,947

447,819

(595,285)

2,915,481

Operating income

597,265

324,678

(181,850)

740,093

Other income (expenses):

Equity in earnings of unconsolidated affiliates

20,194

20,194

Interest

(232,331)

(37,262)

892

(268,701)

Loss on early extinguishment of debt

(1,205)

(295)

(1,500)

Equity in earnings (loss) of Antero Midstream

(43,710)

43,710

Total other expenses

(277,246)

(17,363)

44,602

(250,007)

Income before income taxes

320,019

307,315

(137,248)

490,086

Provision for income tax benefit

295,051

295,051

Net income and comprehensive income including noncontrolling interests

615,070

307,315

(137,248)

785,137

Net income and comprehensive income attributable to noncontrolling interests

170,067

170,067

Net income and comprehensive income attributable to Antero Resources Corporation

$

615,070

307,315

(307,315)

615,070

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Year Ended December 31, 2018

(In thousands)

Parent
(Antero)

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminations

Consolidated

Revenue and other:

Natural gas sales

$

2,287,939

2,287,939

Natural gas liquids sales

 

1,177,777

 

 

 

 

1,177,777

Oil sales

187,178

187,178

Commodity derivative fair value losses

(87,594)

(87,594)

Gathering, compression, water handling and treatment

1,027,939

(1,006,595)

21,344

Marketing

458,901

458,901

Marketing derivative fair value gains

94,081

94,081

Gain on sale of assets

583

(583)

Other income

(87,217)

87,217

Total revenue and other

4,031,065

1,028,522

(919,961)

4,139,626

Operating expenses:

Lease operating

142,234

262,704

(268,785)

136,153

Gathering, compression, processing, and transportation

1,792,898

49,550

(503,090)

1,339,358

Production and ad valorem taxes

122,305

4,169

126,474

Marketing

686,055

686,055

Exploration

4,958

4,958

Impairment of oil and gas properties

549,437

549,437

Impairment of midstream assets

4,470

5,771

(583)

9,658

Depletion, depreciation, and amortization

842,452

130,013

972,465

Accretion of asset retirement obligations

2,684

135

2,819

General and administrative

181,305

61,629

(2,590)

240,344

Accretion of contingent acquisition consideration

(93,019)

93,019

Total operating expenses

4,328,798

420,952

(682,029)

4,067,721

Operating income (loss)

(297,733)

607,570

(237,932)

71,905

Other income (expenses):

Equity in earnings of unconsolidated affiliates

40,280

40,280

Interest expense, net

(224,977)

(61,906)

140

(286,743)

Equity in earnings (loss) of consolidated subsidiaries

(3,664)

3,664

Total other expenses

(228,641)

(21,626)

3,804

(246,463)

Income (loss) before income taxes

(526,374)

585,944

(234,128)

(174,558)

Provision for income tax benefit

128,857

128,857

Net income (loss) and comprehensive income (loss) including noncontrolling interests

(397,517)

585,944

(234,128)

(45,701)

Net income and comprehensive income attributable to noncontrolling interests

351,816

351,816

Net income (loss) and comprehensive income (loss) attributable to Antero Resources Corporation

$

(397,517)

585,944

(585,944)

(397,517)

Condensed Consolidating Statement of Operations and Comprehensive Income (Loss)

Year Ended December 31, 2019

(In thousands)

Parent
(Antero)

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries

Eliminations

Consolidated

Revenue and other:

Natural gas sales

$

2,247,162

2,247,162

Natural gas liquids sales

 

1,219,162

1,219,162

Oil sales

177,549

177,549

Commodity derivative fair value gains

463,972

463,972

Gathering, compression, water handling and treatment

218,360

(213,882)

4,478

Marketing

292,207

292,207

Other income

5,810

(1,650)

4,160

Total revenue and other

4,405,862

218,360

(215,532)

4,408,690

Operating expenses:

Lease operating

146,957

64,818

(66,055)

145,720

Gathering, compression, processing, and transportation

2,257,133

(110,486)

2,146,647

Production and ad valorem taxes

124,202

940

125,142

Marketing

549,814

549,814

Exploration

884

884

Impairment of oil and gas properties

1,300,444

1,300,444

Impairment of midstream assets

7,800

6,982

14,782

Depletion, depreciation, and amortization

893,160

21,707

914,867

Loss on sale of assets

951

951

Accretion of asset retirement obligations

3,699

63

3,762

General and administrative

160,402

18,793

(499)

178,696

Contract termination and rig stacking

14,026

14,026

Accretion of contingent acquisition consideration

1,928

(1,928)

Total operating expenses

5,459,472

114,291

(178,028)

5,395,735

Operating income (loss)

(1,053,610)

104,069

(37,504)

(987,045)

Other income (expenses):

Water earnout

125,000

125,000

Equity in earnings (loss) of unconsolidated affiliates

(49,442)

(106,038)

12,264

(143,216)

Equity in earnings of affiliates

15,021

(15,021)

Loss on the sale of equity investment shares

(108,745)

(108,745)

Impairment of equity investments

(143,090)

(324,500)

(467,590)

Gain on deconsolidation of Antero Midstream Partners LP

1,205,705

200,337

1,406,042

Interest expense, net

(211,296)

(16,815)

(228,111)

Gain on early extinguishment of debt

36,419

36,419

Total other income (expenses)

869,572

(230,201)

(4,551)

(15,021)

619,799

Income before income taxes

(184,038)

(230,201)

99,518

(52,525)

(367,246)

Provision for income tax expense

74,110

74,110

Net income (loss) and comprehensive income (loss) including noncontrolling interests

(109,928)

(230,201)

99,518

(52,525)

(293,136)

Net income and comprehensive income attributable to noncontrolling interests

46,993

46,993

Net income and comprehensive income attributable to Antero Resources Corporation

$

(109,928)

(230,201)

99,518

(99,518)

(340,129)

Condensed Consolidating Statement of Cash Flows

Year Ended December 31, 2017

(In thousands)

Non-Guarantor

Subsidiaries

Parent

Guarantor

(Antero

(Antero)

Subsidiaries

Midstream)

Eliminations

Consolidated

Cash flows provided by (used in) operating activities:

Net income including noncontrolling interests

$

615,070

307,315

(137,248)

785,137

Adjustment to reconcile net income to net cash
provided by operating activities:

Depletion, depreciation, amortization, and accretion

707,658

119,562

827,220

Change in fair value of contingent acquisition consideration

(13,476)

13,476

Impairment of oil and gas properties

159,598

159,598

Impairment of midstream assets

23,431

23,431

Commodity derivative fair value gains

(658,283)

(658,283)

Gains on settled commodity derivatives

213,940

213,940

Proceeds from derivative monetizations

749,906

749,906

Marketing derivative losses

21,394

21,394

Deferred income tax benefit

(295,126)

(295,126)

Gain on sale of assets

Equity-based compensation expense

76,162

27,283

103,445

Loss on early extinguishment of debt

1,205

295

1,500

Equity in earnings of Antero Midstream

43,710

(43,710)

Equity in earnings of unconsolidated affiliates

(20,194)

(20,194)

Distributions of earnings from unconsolidated affiliates

20,195

20,195

Other

(4,500)

2,593

(1,907)

Distributions from subsidiaries

131,598

(131,598)

Changes in current assets and liabilities

87,466