Quarterly report pursuant to Section 13 or 15(d)

Leases (Tables)

v3.21.2
Leases (Tables)
9 Months Ended
Sep. 30, 2021
Leases  
Summary of supplemental balance sheet information related to leases

The Company’s lease assets and liabilities as of December 31, 2020 and September 30, 2021 consisted of the following items (in thousands):

December 31,

September 30,

Leases

 

Balance Sheet Classification

 

2020

 

2021

Operating Leases

Operating lease right-of-use assets:

Processing plants

Operating lease right-of-use assets

$

1,302,290

1,786,321

Drilling rigs and completion services

Operating lease right-of-use assets

29,894

10,812

Gas gathering lines and compressor stations (1)

Operating lease right-of-use assets

1,241,090

1,136,859

Office space

Operating lease right-of-use assets

36,879

34,032

Vehicles

Operating lease right-of-use assets

2,704

1,023

Other office and field equipment

Operating lease right-of-use assets

746

595

Total operating lease right-of-use assets

$

2,613,603

2,969,642

Short-term operating lease obligation

Short-term lease liabilities

$

265,178

352,939

Long-term operating lease obligation

Long-term lease liabilities

2,348,425

2,616,703

Total operating lease obligation

$

2,613,603

2,969,642

Finance Leases

Finance lease right-of-use assets:

Vehicles

Other property and equipment

$

1,206

717

Total finance lease right-of-use assets (2)

$

1,206

717

Short-term finance lease obligation

Short-term lease liabilities

$

845

531

Long-term finance lease obligation

Long-term lease liabilities

361

186

Total finance lease obligation

$

1,206

717

(1) Gas gathering lines and compressor stations leases includes $1.1 billion and $1.0 billion related to Antero Midstream Corporation as of December 31, 2020 and September 30, 2021. See “—Related party lease disclosure” for additional discussion.
(2) Financing lease assets are recorded net of accumulated amortization of $3 million and $2 million as of December 31, 2020 and September 30, 2021, respectively. The processing plants, gathering lines and compressor stations that are classified as lease liabilities are classified as such under ASC 842, Leases, because Antero is the sole customer of the assets and because Antero makes the decisions that most impact the economic performance of the assets.
Summary of costs associated with operating leases and finance leases

Costs associated with operating leases and finance leases were included in the unaudited condensed consolidated statement of operations and comprehensive loss for the three and nine months ended September 30, 2020 and 2021 (in thousands):

Three Months Ended

Nine Months Ended

September 30,

September 30,

Cost

 

Classification

 

Location

 

2020

 

2021

 

2020

 

2021

Operating lease cost

Statement of operations

Gathering, compression, processing, and transportation

$

350,853

386,033

$

1,112,502

1,147,985

Operating lease cost

Statement of operations

General and administrative

2,789

2,833

8,639

8,057

Operating lease cost

Statement of operations

Contract termination and rig stacking

5,841

3,369

6,387

4,213

Operating lease cost

Statement of operations

Lease operating

43

109

Operating lease cost

Balance sheet

Proved properties (1)

31,822

25,558

91,081

82,749

Total operating lease cost

$

391,305

417,836

$

1,218,609

1,243,113

Finance lease cost:

Amortization of right-of-use assets

Statement of operations

Depletion, depreciation, and amortization

$

168

132

$

727

391

Total finance lease cost

$

168

132

$

727

391

Short-term lease payments

$

15,871

21,030

$

108,029

62,328

(1) Capitalized costs related to drilling and completion activities.
Summary of supplemental cash flow information related to leases

The following is the Company’s supplemental cash flow information related to leases for the nine months ended September 30, 2020 and 2021 (in thousands):

Nine Months Ended September 30,

 

2020

 

2021

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

$

1,147,489

1,042,684

Investing cash flows from operating leases

88,229

66,042

Financing cash flows from finance leases

1,004

692

Noncash activities:

Right-of-use assets obtained in exchange for new operating lease obligations

$

178,348

232,771

Increase (decrease) to existing right-of-use assets and lease obligations from operating lease modifications, net (1)

$

(174,880)

345,066

(1) During the nine months ended September 30, 2020, the weighted average discount rate for remeasured operating leases increased from 10.0% as of December 31, 2019 to 14.4% as of September 30, 2020. During the nine months ended September 30, 2021, the weighted average discount rate for remeasured operating leases decreased from 14.4% as of December 31, 2020 to 5.5% as of September 30, 2021.
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, 2021 (in thousands):

Operating Leases

Financing Leases

Total

Remainder of 2021

$

158,056

174

158,230

2022

601,512

424

601,936

2023

595,852

76

595,928

2024

587,016

67

587,083

2025

514,963

22

514,985

2026

464,262

464,262

Thereafter

1,260,244

1,260,244

Total lease payments

4,181,905

763

4,182,668

Less: imputed interest

(1,212,263)

(46)

(1,212,309)

Total

$

2,969,642

717

2,970,359

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, 2021 (in thousands):

Operating Leases

Financing Leases

Total

Remainder of 2021

$

158,056

174

158,230

2022

601,512

424

601,936

2023

595,852

76

595,928

2024

587,016

67

587,083

2025

514,963

22

514,985

2026

464,262

464,262

Thereafter

1,260,244

1,260,244

Total lease payments

4,181,905

763

4,182,668

Less: imputed interest

(1,212,263)

(46)

(1,212,309)

Total

$

2,969,642

717

2,970,359

Summary of weighted-average remaining lease term and discount rate

December 31, 2020

September 30, 2021

Operating Leases

Finance Leases

Operating Leases

Finance Leases

Weighted average remaining lease term

8.0 years

1.5 years

7.8 years

1.9 years

Weighted average discount rate

13.7

%

6.2

%

9.1

%

5.7

%