ANTERO RESOURCES Corp 10-Q

Item 1. Financial Statements (Unaudited) ​ 4 Item 2. ​ Management’s Discussion and Analysis of Financial Condition and Results of Operations ​ 38 Item 3. ​ Quantitative and Qualitative Disclosures about Market Risk ​ 58 Item 4. ​ Controls and Procedures ​ 60 ​ ​ ​ ​ ​ PART II—OTHER INFORMATION ​ 61 Item 1. ​ Legal Proceedings ​ 61 Item 1A. ​ Risk Factors ​ 61 Item 2. ​ Unregistered Sales of Equity Securities ​ 61 Item 6. ​ Exhibits ​ 62 SIGNATURES ​ 63 ​ ​ 1 Table of Contents CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS Some of the information in this Quarterly Report on Form 10-Q may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical fact included in this Quarterly Report on Form 10-Q, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. Words such as “may,” “assume,” “forecast,” “position,” “predict,” “strategy,” “expect,” “intend,” “plan,” “estimate,” “anticipate,” “believe,” “project,” “budget,” “potential,” or “continue,” and similar expressions are used to identify forward-looking statements, although not all forward-looking statements contain such identifying words. When considering these forward-looking statements, investors should keep in mind the risk factors and other cautionary statements in this Quarterly Report on Form 10-Q. These forward-looking statements are based on management’s current beliefs, based on currently available information, as to the outcome and timing of future events. Factors that could cause our actual results to differ materially from the results contemplated by such forward-looking statements include: ● our ability to execute our business strategy; ● our production and oil and gas reserves; ● our financial strategy, liquidity and capital required for our development program; ● our ability to obtain debt or equity financing on satisfactory terms to fund additional acquisitions, expansion projects, working capital requirements and the repayment or refinancing of indebtedness; ● natural gas, natural gas liquids (“NGLs”), and oil prices; ● impacts of world health events, including the coronavirus (“COVID-19”) pandemic; ● timing and amount of future production of natural gas, NGLs, and oil; ● our hedging strategy and results; ● our ability to meet minimum volume commitments and to utilize or monetize our firm transportation commitments; ● our future drilling plans; ● our projected well costs and cost savings initiatives, including with respect to water handling services provided by Antero Midstream Corporation; ● competition and government regulations; ● pending legal or environmental matters; ● marketing of natural gas, NGLs, and oil; ● leasehold or business acquisitions; ● costs of developing our properties; ● operations of Antero Midstream Corporation; ● general economic conditions; ● credit markets; ● uncertainty regarding our future operating results; and ● our other plans, objectives, expectations and intentions contained in this Quarterly Report on Form 10-Q. 2 Table of Contents We caution investors that these forward-looking statements are subject to all of the risks and uncertainties incidental to our business, most of which are difficult to predict and many of which are beyond our control. These risks include, but are not limited to, commodity price volatility, inflation, availability of drilling, completion, and production equipment and services, environmental risks, drilling and completion and other operating risks, marketing and transportation risks, regulatory changes, the uncertainty inherent in estimating natural gas, NGLs, and oil reserves and in projecting future rates of production, cash flows and access to capital, the timing of development expenditures, conflicts of interest among our stockholders, impacts of world health events (including the COVID-19 pandemic), cybersecurity risks and the other risks described or referenced under the heading “Item 1A. Risk Factors” herein, including the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Form 10-K”), which is on file with the Securities and Exchange Commission (“SEC”). Reserve engineering is a process of estimating underground accumulations of natural gas, NGLs, and oil that cannot be measured in an exact manner. The accuracy of any reserve estimate depends on the quality of available data, the interpretation of such data, and the price and cost assumptions made by reservoir engineers. In addition, the results of drilling, testing, and production activities, or changes in commodity prices, may justify revisions of estimates that were made previously. If significant, such revisions would change the schedule of any further production and development drilling. Accordingly, reserve estimates may differ significantly from the quantities of natural gas, NGLs, and oil that are ultimately recovered. Should one or more of the risks or uncertainties described or referenced in this Quarterly Report on Form 10-Q occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements, expressed or implied, included in this Quarterly Report on Form 10-Q are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q. ​ ​ 3 Table of Contents PART I—FINANCIAL INFORMATION ANTERO RESOURCES CORPORATION Condensed Consolidated Balance Sheets (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Unaudited) ​ ​ ​ December 31, ​ June 30, ​ ​ 2020 2021 ​ Assets ​ Current assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ — ​ ​ 4,541 ​ Accounts receivable ​ ​ 28,457 ​ ​ 36,145 ​ Accrued revenue ​ ​ 425,314 ​ ​ 493,740 ​ Derivative instruments ​ ​ 105,130 ​ ​ 1,056 ​ Other current assets ​ ​ 15,238 ​ ​ 14,958 ​ Total current assets ​ ​ 574,139 ​ ​ 550,440 ​ Property and equipment: ​ ​ ​ ​ ​ ​ ​ Oil and gas properties, at cost (successful efforts method): ​ ​ ​ ​ ​ ​ ​ Unproved properties ​ ​ 1,175,178 ​ ​ 1,076,562 ​ Proved properties ​ ​ 12,260,713 ​ ​ 12,479,785 ​ Gathering systems and facilities ​ ​ 5,802 ​ ​ 5,802 ​ Other property and equipment ​ ​ 74,361 ​ ​ 77,231 ​ ​ ​ ​ 13,516,054 ​ ​ 13,639,380 ​ Less accumulated depletion, depreciation, and amortization ​ ​ ( 3,869,116 ) ​ ​ ( 4,095,539 ) ​ Property and equipment, net ​ ​ 9,646,938 ​ ​ 9,543,841 ​ Operating leases right-of-use assets ​ ​ 2,613,603 ​ ​ 2,486,044 ​ Derivative instruments ​ ​ 47,293 ​ ​ 19,396 ​ Investment in unconsolidated affiliate ​ ​ 255,082 ​ ​ 237,668 ​ Other assets ​ ​ 13,790 ​ ​ 10,944 ​ Total assets ​ $ 13,150,845 ​ ​ 12,848,333 ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities and Equity ​ Current liabilities: ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 26,728 ​ ​ 39,612 ​ Accounts payable, related parties ​ ​ 69,860 ​ ​ 85,471 ​ Accrued liabilities ​ ​ 343,524 ​ ​ 433,050 ​ Revenue distributions payable ​ ​ 198,117 ​ ​ 267,926 ​ Derivative instruments ​ ​ 31,242 ​ ​ 733,994 ​ Short-term lease liabilities ​ ​ 266,024 ​ ​ 269,611 ​ Deferred revenue, VPP ​ ​ 45,257 ​ ​ 41,453 ​ Other current liabilities ​ ​ 2,302 ​ ​ 11,980 ​ Total current liabilities ​ ​ 983,054 ​ ​ 1,883,097 ​ Long-term liabilities: ​ ​ ​ ​ ​ ​ ​ Long-term debt ​ ​ 3,001,593 ​ ​ 2,415,163 ​ Deferred income tax liability ​ ​ 412,252 ​ ​ 214,292 ​ Derivative instruments ​ ​ 99,172 ​ ​ 204,525 ​ Long-term lease liabilities ​ ​ 2,348,785 ​ ​ 2,217,336 ​ Deferred revenue, VPP ​ ​ 156,024 ​ ​ 137,322 ​ Other liabilities ​ ​ 59,694 ​ ​ 58,184 ​ Total liabilities ​ ​ 7,060,574 ​ ​ 7,129,919 ​ Commitments and contingencies (Notes 13 and 14) ​ ​ ​ ​ ​ ​ ​ Equity: ​ ​ ​ ​ ​ ​ ​ Stockholders' equity: ​ ​ ​ ​ ​ ​ ​ Preferred stock, $ 0.01 par value; authorized - 50,000 shares; none issued ​ ​ — ​ ​ — ​ Common stock, $ 0.01 par value; authorized - 1,000,000 shares; 268,672 shares and 313,527 shares issued and outstanding as of December 31, 2020 and June 30, 2021, respectively ​ ​ 2,686 ​ ​ 3,135 ​ Additional paid-in capital ​ ​ 6,195,497 ​ ​ 6,363,774 ​ Accumulated deficit ​ ​ ( 430,478 ) ​ ​ ( 969,444 ) ​ Total stockholders' equity ​ ​ 5,767,705 ​ ​ 5,397,465 ​ Noncontrolling interests ​ ​ 322,566 ​ ​ 320,949 ​ Total equity ​ ​ 6,090,271 ​ ​ 5,718,414 ​ Total liabilities and equity ​ $ 13,150,845 ​ ​ 12,848,333 ​ ​ See accompanying notes to unaudited condensed consolidated financial statements. ​ ​ 4 Table of Contents ANTERO RESOURCES CORPORATION Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (In thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ ​ 2020 2021 Revenue and other: ​ ​ ​ ​ ​ ​ ​ Natural gas sales ​ $ 367,415 ​ ​ 626,520 ​ Natural gas liquids sales ​ ​ 212,197 ​ ​ 464,381 ​ Oil sales ​ ​ 8,322 ​ ​ 51,906 ​ Commodity derivative fair value losses ​ ​ ( 168,015 ) ​ ​ ( 831,840 ) ​ Marketing ​ ​ 64,285 ​ ​ 165,453 ​ Amortization of deferred revenue, VPP ​ ​ — ​ ​ 11,279 ​ Gain on sale of assets ​ ​ — ​ ​ 2,288 ​ Other income (loss) ​ ​ 707 ​ ​ ( 619 ) ​ Total revenue ​ ​ 484,911 ​ ​ 489,368 ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ Lease operating ​ ​ 24,742 ​ ​ 21,645 ​ Gathering, compression, processing, and transportation ​ ​ 631,845 ​ ​ 641,362 ​ Production and ad valorem taxes ​ ​ 19,992 ​ ​ 33,694 ​ Marketing ​ ​ 113,053 ​ ​ 198,994 ​ Exploration ​ ​ 231 ​ ​ 5,638 ​ Impairment of oil and gas properties ​ ​ 37,350 ​ ​ 9,303 ​ Depletion, depreciation, and amortization ​ ​ 214,035 ​ ​ 187,330 ​ Accretion of asset retirement obligations ​ ​ 1,111 ​ ​ 1,331 ​ General and administrative (including equity-based compensation expense of $ 7,973 and $ 4,249 in 2020 and 2021, respectively) ​ ​ 38,403 ​ ​ 32,177 ​ Contract termination and rig stacking ​ ​ 11,071 ​ ​ 844 ​ Total operating expenses ​ ​ 1,091,833 ​ ​ 1,132,318 ​ Operating loss ​ ​ ( 606,922 ) ​ ​ ( 642,950 ) ​ Other income (expense): ​ ​ ​ ​ ​ ​ ​ Equity in earnings of unconsolidated affiliate ​ ​ 20,228 ​ ​ 17,477 ​ Transaction expense ​ ​ ( 6,138 ) ​ ​ ( 185 ) ​ Interest expense, net ​ ​ ( 51,811 ) ​ ​ ( 49,963 ) ​ Gain (loss) on early extinguishment of debt ​ ​ 39,171 ​ ​ ( 23,065 ) ​ Loss on convertible note equitization ​ ​ — ​ ​ ( 11,731 ) ​ Total other income (expense) ​ ​ 1,450 ​ ​ ( 67,467 ) ​ Loss before income taxes ​ ​ ( 605,472 ) ​ ​ ( 710,417 ) ​ Provision for income tax benefit ​ ​ 142,404 ​ ​ 175,966 ​ Net loss and comprehensive loss including noncontrolling interests ​ ​ ( 463,068 ) ​ ​ ( 534,451 ) ​ Less: net income (loss) and comprehensive income (loss) attributable to noncontrolling interests ​ ​ 236 ​ ​ ( 10,984 ) ​ Net loss and comprehensive loss attributable to Antero Resources Corporation ​ $ ( 463,304 ) ​ ​ ( 523,467 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss per share—basic ​ $ ( 1.73 ) ​ ​ ( 1.70 ) ​ Loss per share—diluted ​ $ ( 1.73 ) ​ ​ ( 1.70 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of shares outstanding: ​ ​ ​ ​ ​ ​ ​ Basic ​ ​ 268,386 ​ ​ 307,879 ​ Diluted ​ ​ 268,386 ​ ​ 307,879 ​ ​ See accompanying notes to unaudited condensed consolidated financial statements. ​ 5 Table of Contents ANTERO RESOURCES CORPORATION Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (In thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ ​ 2020 2021 ​ Revenue and other: ​ ​ ​ ​ ​ ​ ​ Natural gas sales ​ $ 778,497 ​ ​ 1,346,889 ​ Natural gas liquids sales ​ ​ 469,870 ​ ​ 904,700 ​ Oil sales ​ ​ 43,968 ​ ​ 96,592 ​ Commodity derivative fair value gains (losses) ​ ​ 397,818 ​ ​ ( 1,009,596 ) ​ Marketing ​ ​ 110,358 ​ ​ 330,243 ​ Amortization of deferred revenue, VPP ​ ​ — ​ ​ 22,429 ​ Gain on sale of assets ​ ​ — ​ ​ 2,288 ​ Other income ​ ​ 1,505 ​ ​ 21 ​ Total revenue ​ ​ 1,802,016 ​ ​ 1,693,566 ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ Lease operating ​ ​ 50,386 ​ ​ 46,192 ​ Gathering, compression, processing, and transportation ​ ​ 1,220,469 ​ ​ 1,246,439 ​ Production and ad valorem taxes ​ ​ 45,691 ​ ​ 78,391 ​ Marketing ​ ​ 206,326 ​ ​ 361,071 ​ Exploration ​ ​ 441 ​ ​ 5,857 ​ Impairment of oil and gas properties ​ ​ 126,570 ​ ​ 43,365 ​ Depletion, depreciation, and amortization ​ ​ 413,712 ​ ​ 381,356 ​ Accretion of asset retirement obligations ​ ​ 2,215 ​ ​ 2,119 ​ General and administrative (including equity-based compensation expense of $ 11,302 and $ 9,891 in 2020 and 2021, respectively) ​ ​ 69,624 ​ ​ 76,251 ​ Contract termination and rig stacking ​ ​ 11,071 ​ ​ 935 ​ Total operating expenses ​ ​ 2,146,505 ​ ​ 2,241,976 ​ Operating loss ​ ​ ( 344,489 ) ​ ​ ( 548,410 ) ​ Other income (expense): ​ ​ ​ ​ ​ ​ ​ Interest expense, net ​ ​ ( 104,913 ) ​ ​ ( 92,706 ) ​ Equity in earnings (loss) of unconsolidated affiliate ​ ​ ( 107,827 ) ​ ​ 36,171 ​ Gain (loss) on early extinguishment of debt ​ ​ 119,732 ​ ​ ( 66,269 ) ​ Loss on convertible note equitizations ​ ​ — ​ ​ ( 50,777 ) ​ Impairment of equity method investment ​ ​ ( 610,632 ) ​ ​ — ​ Transaction expense ​ ​ ( 6,138 ) ​ ​ ( 2,476 ) ​ Total other expenses ​ ​ ( 709,778 ) ​ ​ ( 176,057 ) ​ Loss before income taxes ​ ​ ( 1,054,267 ) ​ ​ ( 724,467 ) ​ Provision for income tax benefit ​ ​ 252,389 ​ ​ 178,912 ​ Net loss and comprehensive loss including noncontrolling interests ​ ​ ( 801,878 ) ​ ​ ( 545,555 ) ​ Less: net income (loss) and comprehensive income (loss) attributable to noncontrolling interests ​ ​ 236 ​ ​ ( 6,589 ) ​ Net loss and comprehensive loss attributable to Antero Resources Corporation ​ $ ( 802,114 ) ​ ​ ( 538,966 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss per share—basic ​ $ ( 2.90 ) ​ ​ ( 1.78 ) ​ Loss per share—diluted ​ $ ( 2.90 ) ​ ​ ( 1.78 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of shares outstanding: ​ ​ ​ ​ ​ ​ ​ Basic ​ ​ 276,306 ​ ​ 302,343 ​ Diluted ​ ​ 276,306 ​ ​ 302,343 ​ ​ See accompanying notes to unaudited condensed consolidated financial statements. 6 Table of Contents ANTERO RESOURCES CORPORATION Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Stock ​ Paid-in ​ Earnings ​ Noncontrolling ​ Total ​ ​ Shares Amount Capital (Deficit) Interests Equity ​ Balances, December 31, 2019 ​ ​ 295,941 ​ $ 2,959 ​ ​ 6,130,365 ​ ​ 837,419 ​ ​ — ​ ​ 6,970,743 ​ Issuance of common stock upon vesting of equity-based compensation awards, net of shares withheld for income taxes ​ ​ 178 ​ ​ 2 ​ ​ ( 34 ) ​ ​ — ​ ​ — ​ ​ ( 32 ) ​ Repurchases and retirements of common stock ​ ​ ( 27,193 ) ​ ​ ( 272 ) ​ ​ ( 42,418 ) ​ ​ — ​ ​ — ​ ​ ( 42,690 ) ​ Equity-based compensation ​ ​ — ​ ​ — ​ ​ 3,329 ​ ​ — ​ ​ — ​ ​ 3,329 ​ Net loss and comprehensive loss ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 338,810 ) ​ ​ — ​ ​ ( 338,810 ) ​ Balances, March 31, 2020 ​ ​ 268,926 ​ ​ 2,689 ​ ​ 6,091,242 ​ ​ 498,609 ​ ​ — ​ ​ 6,592,540 ​ Issuance of common units in Martica Holdings, LLC ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 300,000 ​ ​ 300,000 ​ Issuance of common stock upon vesting of equity-based compensation awards, net of shares withheld for income taxes ​ ​ 464 ​ ​ 5 ​ ​ ( 305 ) ​ ​ — ​ ​ — ​ ​ ( 300 ) ​ Distributions to noncontrolling interest ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 3,413 ) ​ ​ ( 3,413 ) ​ Repurchases and retirements of common stock ​ ​ ( 1,000 ) ​ ​ ( 10 ) ​ ​ ( 743 ) ​ ​ — ​ ​ — ​ ​ ( 753 ) ​ Equity-based compensation ​ ​ — ​ ​ — ​ ​ 7,973 ​ ​ — ​ ​ — ​ ​ 7,973 ​ Net income (loss) and comprehensive income (loss) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 463,304 ) ​ ​ 236 ​ ​ ( 463,068 ) ​ Balances, June 30, 2020 ​ ​ 268,390 ​ $ 2,684 ​ ​ 6,098,167 ​ ​ 35,305 ​ ​ 296,823 ​ ​ 6,432,979 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balances, December 31, 2020 ​ ​ 268,672 ​ $ 2,686 ​ ​ 6,195,497 ​ ​ ( 430,478 ) ​ ​ 322,566 ​ ​ 6,090,271 ​ Issuance of common shares ​ ​ 31,388 ​ ​ 314 ​ ​ 238,551 ​ ​ — ​ ​ — ​ ​ 238,865 ​ Issuance of common units in Martica Holdings, LLC ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 51,000 ​ ​ 51,000 ​ Equity component of 2026 Convertible Notes, net ​ ​ — ​ ​ — ​ ​ ( 116,381 ) ​ ​ — ​ ​ — ​ ​ ( 116,381 ) ​ Issuance of common stock upon vesting of equity-based compensation awards, net of shares withheld for income taxes ​ ​ 1,130 ​ ​ 11 ​ ​ ( 5,656 ) ​ ​ — ​ ​ — ​ ​ ( 5,645 ) ​ Distributions to noncontrolling interest ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 24,699 ) ​ ​ ( 24,699 ) ​ Equity-based compensation ​ ​ — ​ ​ — ​ ​ 5,642 ​ ​ — ​ ​ — ​ ​ 5,642 ​ Net income (loss) and comprehensive income (loss) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 15,499 ) ​ ​ 4,395 ​ ​ ( 11,104 ) ​ Balances, March 31, 2021 ​ ​ 301,190 ​ ​ 3,011 ​ ​ 6,317,653 ​ ​ ( 445,977 ) ​ ​ 353,262 ​ ​ 6,227,949 ​ Issuance of common shares ​ ​ 11,588 ​ ​ 116 ​ ​ 125,262 ​ ​ — ​ ​ — ​ ​ 125,378 ​ Equity component of 2026 Convertible Notes, net ​ ​ — ​ ​ — ​ ​ ( 79,497 ) ​ ​ — ​ ​ — ​ ​ ( 79,497 ) ​ Issuance of common stock upon vesting of equity-based compensation awards, net of shares withheld for income taxes ​ ​ 749 ​ ​ 8 ​ ​ ( 3,893 ) ​ ​ — ​ ​ — ​ ​ ( 3,885 ) ​ Distributions to noncontrolling interest ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 21,329 ) ​ ​ ( 21,329 ) ​ Equity-based compensation ​ ​ — ​ ​ — ​ ​ 4,249 ​ ​ — ​ ​ — ​ ​ 4,249 ​ Net loss and comprehensive loss ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 523,467 ) ​ ​ ( 10,984 ) ​ ​ ( 534,451 ) ​ Balances, June 30, 2021 ​ ​ 313,527 ​ $ 3,135 ​ ​ 6,363,774 ​ ​ ( 969,444 ) ​ ​ 320,949 ​ ​ 5,718,414 ​ ​ See accompanying notes to unaudited condensed consolidated financial statements. ​ ​ ​ 7 Table of Contents ANTERO RESOURCES CORPORATION Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ ​ 2020 2021 Cash flows provided by (used in) operating activities: ​ ​ ​ ​ ​ ​ ​ Net loss including noncontrolling interests ​ $ ( 801,878 ) ​ ​ ( 545,555 ) ​ Adjustments to reconcile net loss to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ ​ Depletion, depreciation, amortization, and accretion ​ ​ 415,927 ​ ​ 383,475 ​ Impairments ​ ​ 737,202 ​ ​ 43,365 ​ Commodity derivative fair value losses (gains) ​ ​ ( 397,818 ) ​ ​ 1,009,596 ​ Gains (losses) on settled commodity derivatives ​ ​ 524,838 ​ ​ ( 64,951 ) ​ Payments for derivative monetizations ​ ​ — ​ ​ ( 4,569 ) ​ Gain on sale of assets ​ ​ — ​ ​ ( 2,288 ) ​ Equity-based compensation expense ​ ​ 11,302 ​ ​ 9,891 ​ Deferred income tax benefit ​ ​ ( 252,389 ) ​ ​ ( 178,912 ) ​ Equity in (earnings) loss of unconsolidated affiliate ​ ​ 107,827 ​ ​ ( 36,171 ) ​ Dividends of earnings from unconsolidated affiliate ​ ​ 85,511 ​ ​ 74,040 ​ Amortization of deferred revenue ​ ​ — ​ ​ ( 22,429 ) ​ Amortization of debt issuance costs, debt discount, debt premium and other ​ ​ 4,433 ​ ​ 7,877 ​ (Gain) loss on early extinguishment of debt ​ ​ ( 119,732 ) ​ ​ 66,269 ​ Loss on convertible note equitizations ​ ​ — ​ ​ 50,777 ​ Changes in current assets and liabilities: ​ ​ ​ ​ ​ ​ ​ Accounts receivable ​ ​ ( 27,329 ) ​ ​ ( 7,687 ) ​ Accrued revenue ​ ​ 63,023 ​ ​ ( 68,425 ) ​ Other current assets ​ ​ 789 ​ ​ 631 ​ Accounts payable including related parties ​ ​ ( 21,182 ) ​ ​ 6,681 ​ Accrued liabilities ​ ​ 15,722 ​ ​ 64,499 ​ Revenue distributions payable ​ ​ ( 29,560 ) ​ ​ 69,809 ​ Other current liabilities ​ ​ ( 46 ) ​ ​ 16,349 ​ Net cash provided by operating activities ​ ​ 316,640 ​ ​ 872,272 ​ Cash flows provided by (used in) investing activities: ​ ​ ​ ​ ​ ​ ​ Additions to unproved properties ​ ​ ( 21,672 ) ​ ​ ( 29,473 ) ​ Drilling and completion costs ​ ​ ( 552,227 ) ​ ​ ( 273,956 ) ​ Additions to other property and equipment ​ ​ ( 1,234 ) ​ ​ ( 2,320 ) ​ Settlement of water earnout ​ ​ 125,000 ​ ​ — ​ Proceeds from asset sales ​ ​ — ​ ​ 2,351 ​ Change in other liabilities ​ ​ — ​ ​ ( 77 ) ​ Change in other assets ​ ​ 525 ​ ​ 597 ​ Net cash used in investing activities ​ ​ ( 449,608 ) ​ ​ ( 302,878 ) ​ Cash flows provided by (used in) financing activities: ​ ​ ​ ​ ​ ​ ​ Repurchases of common stock ​ ​ ( 43,443 ) ​ ​ — ​ Issuance of senior notes ​ ​ — ​ ​ 1,800,000 ​ Repayment of senior notes ​ ​ ( 496,541 ) ​ ​ ( 1,234,698 ) ​ Borrowings (repayments) on bank credit facilities, net ​ ​ 374,000 ​ ​ ( 1,017,000 ) ​ Payment of debt issuance costs ​ ​ — ​ ​ ( 22,440 ) ​ Sale of noncontrolling interest ​ ​ 300,000 ​ ​ 51,000 ​ Distributions to noncontrolling interests in Martica Holdings LLC ​ ​ — ​ ​ ( 46,028 ) ​ Employee tax withholding for settlement of equity compensation awards ​ ​ ( 331 ) ​ ​ ( 9,530 ) ​ Convertible note equitizations ​ ​ — ​ ​ ( 85,648 ) ​ Other ​ ​ ( 717 ) ​ ​ ( 509 ) ​ Net cash provided by (used in) financing activities ​ ​ 132,968 ​ ​ ( 564,853 ) ​ Net increase in cash and cash equivalents ​ ​ — ​ ​ 4,541 ​ Cash and cash equivalents, beginning of period ​ ​ — ​ ​ — ​ Cash and cash equivalents, end of period ​ $ — ​ ​ 4,541 ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplemental disclosure of cash flow information: ​ ​ ​ ​ ​ ​ ​ Cash paid during the period for interest ​ $ 101,885 ​ ​ 58,126 ​ Increase (decrease) in accounts payable and accrued liabilities for additions to property and equipment ​ $ ( 61,305 ) ​ ​ 42,589 ​ ​ See accompanying notes to unaudited condensed consolidated financial statements. ​ 8 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements (1) Organization Antero Resources Corporation (individually referred to as “Antero” and together with its consolidated subsidiaries “Antero Resources,” or the “Company,”) is engaged in the development, production, exploration and acquisition of natural gas, NGLs, and oil properties in the Appalachian Basin in West Virginia and Ohio. The Company targets large, repeatable resource plays where horizontal drilling and advanced fracture stimulation technologies provide the means to economically develop and produce natural gas, NGLs, and oil from unconventional formations. The Company’s corporate headquarters is located in Denver, Colorado. ​ (2) Summary of Significant Accounting Policies (a) Basis of Presentation These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) applicable to interim financial information and should be read in the context of the Company’s December 31, 2020 consolidated financial statements and notes thereto for a more complete understanding of the Company’s operations, financial position, and accounting policies. The Company’s December 31, 2020 consolidated financial statements were included in Antero Resources’ 2020 Annual Report on Form 10-K, which was filed with the SEC. These unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information, and, accordingly, do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, these unaudited condensed consolidated financial statements include all adjustments (consisting of normal and recurring accruals) considered necessary to present fairly the Company’s financial position as of December 31, 2020 and June 30, 2021 and its results of operations for the three and six months ended June 30, 2020 and 2021 and cash flows for the six months ended June 30, 2020 and 2021. The Company has no items of other comprehensive income or loss; therefore, its net income or loss is equal to its comprehensive income or loss. Operating results for the period ended June 30, 2021 are not necessarily indicative of the results that may be expected for the full year because of the impact of fluctuations in prices received for natural gas, NGLs, and oil, natural production declines, the uncertainty of exploration and development drilling results, fluctuations in the fair value of derivative instruments, the impacts of COVID-19 and other factors. (b) Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of Antero Resources Corporation, its wholly owned subsidiaries, and its variable interest entity (“VIE”), Martica Holdings LLC, (“Martica”), for which the Company is the primary beneficiary. The noncontrolling interest reflected in the Company’s unaudited condensed consolidated financial statements for the three and six months ended June 30, 2020 and 2021 represents the Company’s interest in Martica owned by third parties. See Note 3—Transactions to the unaudited condensed consolidated financial statements for more information on Martica. (c) Cash and Cash Equivalents The Company considers all liquid investments purchased with an initial maturity of three months or less to be cash equivalents. The carrying value of cash and cash equivalents approximates fair value due to the short-term nature of these instruments. From time to time, the Company may be in the position of a “book overdraft” in which outstanding checks exceed cash and cash equivalents. The Company classifies book overdrafts in accounts payable and revenue distributions payable within its unaudited condensed consolidated balance sheets, and classifies the change in accounts payable associated with book overdrafts as an operating activity within its unaudited condensed consolidated statements of cash flows. As of December 31, 2020, the book overdrafts included within accounts payable and revenue distributions payable were $ 11 million and $ 15 million, respectively. (d) Earnings (Loss) Per Common Share Earnings (loss) per common share—basic for each period is computed by dividing net income (loss) attributable to Antero by the basic weighted average number of shares outstanding during the period. Earnings (loss) per common share—diluted for each period is computed after giving consideration to the potential dilution from outstanding equity awards and shares of common stock issuable upon conversion of the 2026 Convertible Notes (as defined below in Note 7—Long-Term Debt), calculated using the if-converted method. The Company includes restricted stock unit (“RSUs”) awards, performance share unit (“PSUs”) awards and stock 9 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements options in the calculation of diluted weighted average shares outstanding based on the number of common shares that would be issuable if the end of the period was also the end of the performance period required for the vesting of the awards. During periods in which the Company incurs a net loss, diluted weighted average shares outstanding are equal to basic weighted average shares outstanding because the effects of all equity awards and the 2026 Convertible Notes are anti-dilutive. The following is a reconciliation of the Company’s basic weighted average shares outstanding to diluted weighted average shares outstanding during the periods presented (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ Six Months Ended June 30, ​ ​ 2020 2021 2020 2021 ​ Basic weighted average number of shares outstanding ​ 268,386 ​ 307,879 ​ 276,306 ​ 302,343 ​ Add: Dilutive effect of RSUs ​ — ​ — ​ — ​ — ​ Add: Dilutive effect of outstanding stock options ​ — ​ — ​ — ​ — ​ Add: Dilutive effect of PSUs ​ — ​ — ​ — ​ — ​ Add: Dilutive effect of 2026 Convertible Notes ​ — ​ — ​ — ​ — ​ Diluted weighted average number of shares outstanding ​ 268,386 ​ 307,879 ​ 276,306 ​ 302,343 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of outstanding securities excluded from calculation of diluted earnings per common share (1) : ​ ​ ​ ​ ​ ​ ​ ​ ​ RSUs ​ 6,165 ​ 6,642 ​ 5,697 ​ 6,767 ​ Outstanding stock options ​ 454 ​ 380 ​ 454 ​ 404 ​ PSUs ​ 1,595 ​ 2,769 ​ 1,595 ​ 2,584 ​ 2026 Convertible Notes ​ — ​ 18,778 ​ — ​ 18,778 ​ (1) The potential dilutive effects of these awards were excluded from the computation of diluted earnings (loss) per common share because the inclusion of these awards would have been anti-dilutiv e. ​ (e) Income Taxes ​ The Company recognizes deferred tax assets and liabilities for temporary differences resulting from net operating loss carryforwards for income tax purposes and the differences between the financial statement and tax basis of assets and liabilities. The effect of changes in tax laws or tax rates is recognized in income during the period such changes are enacted. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. During the three months ended June 30, 2021, West Virginia enacted a new tax law that is effective January 1, 2022 on a prospective basis that is expected to reduce the Company’s net income or loss that is apportioned to West Virginia. As a result of this tax law change, the Company’s deferred income tax liability was reduced by $ 34 million as of June 30, 2021, which includes a $ 48 million increase in deferred tax assets, partially offset by a $ 14 million increase in valuation allowance. ​ (f) Recently Issued Accounting Standards Convertible Instruments In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which eliminates the cash conversion model in Accounting Standards Codification (“ASC”) 470-20, Debt with Conversion and Other Options , that require separate accounting for conversion features, and instead, allows the debt instrument and conversion features to be accounted for as a single debt instrument. The new standard becomes effective for the Company on January 1, 2022, and early adoption is permitted. The Company is evaluating the transition method it plans to use for adoption on January 1, 2022. However, the Company has utilized the modified retrospective approach to quantify the expected impact of this standard on its financial statements. Upon adoption of this new standard, the Company expects to reclassify between $ 15 million and $ 30 million, net of deferred income taxes and equity issuance costs, to long-term debt and deferred income tax liability, as applicable, from stockholders’ equity, which amount is subject to adjustment for any conversions or other transactions until adoption of this new standard. Additionally, 10 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements annual interest expense for the 2026 Convertible Notes will be based on an effective interest rate of 4.8 % as compared to 15.1 % for the three and six months ended June 30, 2021. T he Company does not believe that adoption of the standard will impact its operational strategies or development prospects. ​ Income Taxes ​ In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes . This ASU removes certain exceptions to the general principles in ASC 740, Income Taxes (“ASC 740”) and also simplifies portions of ASC 740 by clarifying and amending existing guidance. It is effective for interim and annual reporting periods after December 15, 2020. The Company adopted this ASU on January 1, 2021, and it did not have a material impact on the Company's unaudited condensed consolidated financial statements . ​ ​ (3) Transactions (a) Conveyance of Overriding Royalty Interest On June 15, 2020, the Company announced the consummation of a transaction with an affiliate of Sixth Street Partners, LLC (“Sixth Street”) relating to certain overriding royalty interests across the Company’s existing asset base (the “ORRIs”). In connection with the transaction, the Company contributed the ORRIs to Martica and Sixth Street contributed $ 300 million in cash (subject to customary adjustments) and agreed to contribute up to an additional $ 102 million in cash if certain production thresholds attributable to the ORRIs are achieved in the third quarter of 2020 and first quarter of 2021. All cash contributed by Sixth Street at the initial closing was distributed to the Company. The Company met the applicable production thresholds related to the third quarter of 2020 and first quarter of 2021 as of September 31, 2020 and March 31, 2021, respectively. The Company received a $ 51 million cash distribution during each of the fourth quarter of 2020 and the second quarter of 2021. The ORRIs include an overriding royalty interest of 1.25 % of the Company’s working interest in all of its proved operated developed properties in West Virginia and Ohio, subject to certain excluded wells (the “Initial PDP Override”), and an overriding royalty interest of 3.75 % of the Company’s working interest in all of its undeveloped properties in West Virginia and Ohio (the “Development Override”). Wells turned to sales after April 1, 2020 and prior to the later of (a) the date on which the Company turns to sales 2.2 million lateral feet (net to the Company’s interest) of horizontal wells burdened by the Development Override and (b) the earlier of (i) April 1, 2023 and (ii) the date on which the Company turns to sales 3.82 million lateral feet (net to the Company’s interest) of horizontal wells are subject to the Development Override. The ORRIs also include an additional overriding royalty interest of 2.00 % of the Company’s working interest in the properties underlying the Initial PDP Override (the “Incremental Override”). The Incremental Override (or a portion thereof, as applicable) may be re-conveyed to the Company (at the Company’s election) if certain production targets attributable to the ORRIs are achieved through March 31, 2023. Any portion of the Incremental Override that may not be re-conveyed to the Company based on the Company failing to achieve such production volumes through March 31, 2023 will remain with Martica. Prior to Sixth Street achieving an internal rate of return of 13 % and 1.5 x cash-on-cash return (the “Hurdle”), Sixth Street will receive all distributions in respect of the Initial PDP Override and the Development Override, and the Company will receive all distributions in respect of the Incremental Override, unless certain production targets are not achieved, in which case Sixth Street will receive some or all of the distributions in respect of the Incremental Override. Following Sixth Street achieving the Hurdle, the Company will receive 85 % of the distributions in respect of the ORRIs to which Sixth Street was entitled immediately prior to the Hurdle being achieved. The conveyance of the ORRIs from the Company to Martica was accounted for as a transaction between entities under common control. As a result, the contributed ORRIs have been recorded by Martica at their historical cost. (b) Volumetric Production Payment Transaction On August 10, 2020, the Company completed a volumetric production payment transaction and received net proceeds of approximately $ 216 million (the "VPP"). In connection with the VPP, the Company entered into a purchase and sale agreement, together with a conveyance agreement and production and marketing agreement, with J.P. Morgan Ventures Energy Corporation ("JPM-VEC") to convey, effective July 1, 2020, an overriding royalty interest in dry gas producing properties in West Virginia (the "VPP Properties") equal to 136,589,000 MMBtu over the expected seven-year term of the VPP. 11 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements The Company has accounted for the VPP as a conveyance under ASC 932, Extractive Activities—Oil and Gas (“ASC 932”), and the net proceeds were recorded as deferred revenue in the unaudited condensed consolidated balance sheet as of the transaction closing. Deferred revenue is recognized as volumes are delivered using the units-of-production method over the term of the VPP. Under the production and marketing agreement, Antero and its affiliates provide certain marketing services as JPM-VEC’s agent, and any income or expenses related to these services will be recorded as marketing revenue or marketing expenses as appropriate. Contemporaneously with the VPP, the Company executed a call option related to the production volumes associated with its retained interest in the VPP properties, which is collateralized by a mortgage on the VPP properties. Additionally, the production and marketing agreement contains an embedded put option related to the production volumes for the Company’s retained interest in the VPP properties, which has been bifurcated from the production and marketing arrangement and accounted for as a derivative instrument recorded at fair value. See Note 11—Derivative Instruments to the unaudited condensed consolidated financial statements for more information on the Company’s derivative instruments. (c) Drilling Partnership On February 17, 2021, Antero Resources announced the formation of a drilling partnership with QL Capital Partners (“QL”), an affiliate of Quantum Energy Partners, for the Company’s 2021 through 2024 drilling program. Under the terms of the arrangement, each year in which QL participates represents an annual tranche, and QL will be conveyed a working interest in any wells spud by Antero Resources during such tranche year. For 2021, Antero Resources and QL agreed to a capital budget for such annual tranche, and for each subsequent year through 2024, Antero Resources will propose a capital budget and estimated internal rate of return (“IRR”) for all wells to be spud during such year and, subject to the mutual agreement of the parties that the estimated IRR for the year exceeds a specified return, QL will be obligated to participate in such tranche. Antero Resources develops and manages the drilling program associated with each tranche, including the selection of wells. Additionally, for each annual tranche in which QL participates, Antero Resources and QL will enter into an assignment, bill of sale and conveyance pursuant to which QL will be conveyed a proportionate working interest percentage in each well spud in that year, which conveyance will not be subject to any reversion. Under the terms of the arrangement, QL will fund 20 % of development capital for wells spud in 2021 and is expected to fund between 15 % and 20 % of development capital for wells spud from 2022 through 2024, which funding amounts represent QL’s proportionate working interest in such wells. Additionally, Antero Resources may receive a carry in the form of a one-time payment from QL for each annual tranche if the IRR for such tranche exceeds certain specified returns, which will be determined no earlier than December 31 following the end of each tranche year. Capital costs in excess of, and cost savings below, a specified percentage of budgeted amounts for each annual tranche will be for Antero Resources’ account. Subject to the preceding sentence, for any wells included in a tranche, QL is obligated and responsible for its working interest share of costs and liabilities, and is entitled to its working interest share of revenues, associated with such wells for the life of such wells. If Antero Resources presents a capital budget for an annual tranche with an estimated IRR equal to or exceeding a specified return that QL in good faith believes is less than such specified return and QL elects not to participate, Antero Resources will not be obligated to offer QL the opportunity to participate in subsequent annual tranches. The Company has accounted for the drilling partnership as a conveyance under ASC 932 and such conveyances are recorded in the unaudited condensed consolidated financial statements as QL obtains its proportionate working interest in each well. No gain or loss was recognized for the interests conveyed during the three and six months ended June 30, 2021. 12 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements (4) Revenue (a) Disaggregation of Revenue The table set forth below presents revenue disaggregated by type and the reportable segment to which it relates (in thousands). See Note 16—Reportable Segments for more information on reportable segments. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ Six Months Ended June 30, ​ ​ ​ ​ 2020 2021 2020 2021 Reportable Segment ​ Revenues from contracts with customers: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Natural gas sales ​ $ 367,415 ​ ​ 626,520 ​ ​ 778,497 ​ ​ 1,346,889 ​ Exploration and production ​ Natural gas liquids sales (ethane) ​ ​ 26,644 ​ ​ 43,417 ​ ​ 53,440 ​ ​ 79,527 ​ Exploration and production ​ Natural gas liquids sales (C3+ NGLs) ​ ​ 185,553 ​ ​ 420,964 ​ ​ 416,430 ​ ​ 825,173 ​ Exploration and production ​ Oil sales ​ ​ 8,322 ​ ​ 51,906 ​ ​ 43,968 ​ ​ 96,592 ​ Exploration and production ​ Marketing ​ ​ 64,285 ​ ​ 165,453 ​ ​ 110,358 ​ ​ 330,243 ​ Marketing ​ Total revenue from contracts with customers ​ ​ 652,219 ​ ​ 1,308,260 ​ ​ 1,402,693 ​ ​ 2,678,424 ​ ​ ​ Income (loss) from derivatives, deferred revenue and other sources ​ ​ ( 167,308 ) ​ ​ ( 818,892 ) ​ ​ 399,323 ​ ​ ( 984,858 ) ​ ​ ​ Total revenue ​ $ 484,911 ​ ​ 489,368 ​ ​ 1,802,016 ​ ​ 1,693,566 ​ ​ ​ ​ (b) Transaction Price Allocated to Remaining Performance Obligations For the Company’s product sales that have a contract term greater than one year, the Company utilized the practical expedient in ASC 606, Revenue from Contracts with Customers (“ASC 606”), which does not require the disclosure of the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under the Company’s product sales contracts, each unit of product delivered to the customer represents a separate performance obligation; therefore, future volumes are wholly unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is not required. For the Company’s product sales that have a contract term of one year or less, the Company utilized the practical expedient in ASC 606, which does not require the disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less. (c) Contract Balances Under the Company’s sales contracts, the Company invoices customers after its performance obligations have been satisfied, at which point payment is unconditional. Accordingly, the Company’s contracts do not give rise to contract assets or liabilities. As of December 31, 2020 and June 30, 2021, the Company’s receivables from contracts with customers were $ 425 million and $ 494 million, respectively. (5) Equity Method Investment (a) Summary of Equity Method Investment As of June 30, 2021, Antero owned approximately 29.2 % of Antero Midstream Corporation’s common stock, which is reflected in Antero’s unaudited condensed consolidated financial statements using the equity method of accounting. 13 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements The following table sets forth a reconciliation of Antero’s investment in unconsolidated affiliate for the six months ended June 30, 2021 (in thousands): ​ ​ ​ ​ ​ Balance as of December 31, 2020 (1) ​ $ 255,082 ​ Equity in earnings of unconsolidated affiliate ​ ​ 36,171 ​ Dividends from unconsolidated affiliate ​ ​ ( 74,040 ) ​ Elimination of intercompany profit ​ ​ 20,455 ​ Balance as of June 30, 2021 (1) ​ $ 237,668 ​ (1) The Company’s investment in Antero Midstream Corporation as of December 31, 2020 and June 30, 2021 was $ 1.1 billion and $ 1.4 billion, respectively, based on the quoted market share price of Antero Midstream Corporation . (b) Summarized Financial Information of Antero Midstream Corporation The tables set forth below present summarized financial information of Antero Midstream Corporation (in thousands). Balance Sheet ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ June 30, ​ ​ 2020 2021 ​ Current assets ​ $ 93,931 ​ ​ 92,438 ​ Noncurrent assets ​ ​ 5,516,981 ​ ​ 5,448,304 ​ Total assets ​ $ 5,610,912 ​ ​ 5,540,742 ​ ​ ​ ​ ​ ​ ​ ​ ​ Current liabilities ​ $ 94,005 ​ ​ 117,837 ​ Noncurrent liabilities ​ ​ 3,098,621 ​ ​ 3,094,469 ​ Stockholders' equity ​ ​ 2,418,286 ​ ​ 2,328,436 ​ Total liabilities and stockholders' equity ​ $ 5,610,912 ​ ​ 5,540,742 ​ ​ Statement of Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ ​ 2020 2021 ​ Revenues ​ $ 463,444 ​ ​ 456,908 ​ Operating expenses ​ ​ 847,882 ​ ​ 171,922 ​ Income (loss) from operations ​ ​ ( 384,438 ) ​ ​ 284,986 ​ Net income (loss) ​ ​ ( 304,492 ) ​ ​ 163,664 ​ ​ ​ ​ (6) Accrued Liabilities Accrued liabilities as of December 31, 2020 and June 30, 2021 consisted of the following items (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ June 30, ​ ​ 2020 2021 ​ Capital expenditures ​ $ 32,372 ​ 43,532 ​ Gathering, compression, processing, and transportation expenses ​ ​ 152,724 ​ ​ 150,465 ​ Marketing expenses ​ ​ 68,193 ​ ​ 75,496 ​ Interest expense, net ​ 25,645 ​ 64,345 ​ Accrued production and ad valorem taxes ​ ​ 37,371 ​ ​ 34,404 ​ Derivative settlements payable ​ ​ 3,425 ​ ​ 29,720 ​ Other ​ 23,794 ​ 35,088 ​ Total accrued liabilities ​ $ 343,524 ​ 433,050 ​ ​ ​ ​ 14 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements (7) Long-Term Debt Long-term debt as of December 31, 2020 and June 30, 2021 consisted of the following items (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ June 30, ​ ​ 2020 2021 ​ Credit Facility (a) ​ $ 1,017,000 ​ ​ — ​ 5.125 % senior notes due 2022 (b) ​ ​ 660,516 ​ ​ — ​ 5.625 % senior notes due 2023 (c) ​ ​ 574,182 ​ ​ — ​ 5.00 % senior notes due 2025 (d) ​ ​ 590,000 ​ ​ 590,000 ​ 8.375 % senior notes due 2026 (e) ​ ​ — ​ ​ 500,000 ​ 7.625 % senior notes due 2029 (f) ​ ​ — ​ ​ 700,000 ​ 5.375 % senior notes due 2030 (g) ​ ​ — ​ ​ 600,000 ​ 4.25 % convertible senior notes due 2026 (h) ​ ​ 287,500 ​ ​ 81,570 ​ Total principal ​ ​ 3,129,198 ​ ​ 2,471,570 ​ Unamortized premium (discount), net ​ ​ ( 111,886 ) ​ ​ ( 29,782 ) ​ Unamortized debt issuance costs ​ ​ ( 15,719 ) ​ ​ ( 26,625 ) ​ Long-term debt ​ $ 3,001,593 ​ ​ 2,415,163 ​ ​ (a) Senior Secured Revolving Credit Facility Antero Resources has a senior secured revolving credit facility (the “Credit Facility”) with a consortium of bank lenders. Borrowings under the Credit Facility are subject to borrowing base limitations based on the collateral value of Antero Resources’ assets and are subject to regular semi-annual redeterminations. As of June 30, 2021, the borrowing base under the Credit Facility was $ 2.85 billion and lender commitments were $ 2.64 billion. The borrowing base was re-affirmed in the semi-annual redetermination in April 2021. The next redetermination of the borrowing base is scheduled to occur in October 2021. The Credit Facility is scheduled to mature on October 26, 2022. Antero Resources was in compliance with all of the financial covenants under the Credit Facility as of December 31, 2020 and June 30, 2021. As of June 30, 2021, Antero Resources did not have an outstanding balance under the Credit Facility and had outstanding letters of credit of $ 742 million. As of December 31, 2020, Antero Resources had an outstanding balance under the Credit Facility of $ 1.0 billion, with a weighted average interest rate of 3.26 %, and outstanding letters of credit of $ 730 million. Commitment fees on the unused portion of the Credit Facility are due quarterly at rates ranging from 0.300 % to 0.375 % (subject to certain exceptions) of the unused portion based on utilization. ​ (b) 5.125 % Senior Notes Due 2022 On May 6, 2014, Antero Resources issued $ 600 million of 5.125 % senior notes due December 1, 2022 (the “2022 Notes”) at par . On September 18, 2014, Antero Resources issued an additional $ 500 million of the 2022 Notes at 100.5 % of par. The Company repurchased or otherwise redeemed all of the 2022 Notes between 2019 and the first quarter of 2021. The 2022 Notes were unsecured and effectively subordinated to the Credit Facility to the extent of the value of the collateral securing the Credit Facility. The 2022 Notes ranked pari passu to Antero Resources’ other outstanding senior notes. The 2022 Notes were guaranteed on a full and unconditional and joint and several senior unsecured basis by Antero Resources’ existing subsidiaries that guarantee the Credit Facility and certain of its future restricted subsidiaries. Interest on the 2022 Notes was payable on June 1 and December 1 of each year. See “—Debt Repurchase Program” below for further details on 2022 Notes repurchases. (c) 5.625 % Senior Notes Due 2023 On March 17, 2015, Antero Resources issued $ 750 million of 5.625 % senior notes due June 1, 2023 (the “2023 Notes”) at par . The Company repurchased or otherwise fully redeemed all of the 2023 Notes between 2020 and the second quarter of 2021. The 2023 Notes were unsecured and effectively subordinated to the Credit Facility to the extent of the value of the collateral securing the Credit Facility. The 2023 Notes ranked pari passu to Antero Resources’ other outstanding senior notes. The 2023 Notes were guaranteed on a full and unconditional and joint and several senior unsecured basis by Antero Resources’ existing subsidiaries that 15 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements guarantee the Credit Facility and certain of its future restricted subsidiaries. Interest on the 2023 Notes was payable on June 1 and December 1 of each year. See “—Debt Repurchase Program” below for further details on 2023 Notes repurchases and redemption. (d) 5.00 % Senior Notes Due 2025 On December 21, 2016, Antero Resources issued $ 600 million of 5.00 % senior notes due March 1, 2025 (the “2025 Notes”) at par . The Company repurchased $ 10 million of the 2025 Notes from time to time during 2020, and as of June 30, 2021, $ 590 million principal amount of the 2025 Notes remained outstanding. The 2025 Notes are unsecured and effectively subordinated to the Credit Facility to the extent of the value of the collateral securing the Credit Facility. The 2025 Notes rank pari passu to Antero Resources’ other outstanding senior notes. The 2025 Notes are guaranteed on a full and unconditional and joint and several senior unsecured basis by Antero Resources’ existing subsidiaries that guarantee the Credit Facility and certain of its future restricted subsidiaries. Interest on the 2025 Notes is payable on March 1 and September 1 of each year. Antero Resources may redeem all or part of the 2025 Notes at any time at redemption prices ranging from 102.5 % currently to 100.00 % on or after March 1, 2023. If Antero Resources undergoes a change of control followed by a rating decline, the holders of the 2025 Notes will have the right to require Antero Resources to repurchase all or a portion of the notes at a price equal to 101 % of the principal amount of the 2025 Notes, plus accrued and unpaid interest. (e) 8.375 % Senior Notes Due 2026 On January 4, 2021, Antero Resources issued $ 500 million of 8.375 % senior notes due July 15, 2026 (the “2026 Notes”) at par . The 2026 Notes are unsecured and effectively subordinated to the Credit Facility to the extent of the value of the collateral securing the Credit Facility. The 2026 Notes rank pari passu to Antero Resources’ other outstanding senior notes. The 2026 Notes are guaranteed on a full and unconditional and joint and several senior unsecured basis by Antero Resources’ existing subsidiaries that guarantee the Credit Facility and certain of its future restricted subsidiaries. Interest on the 2026 Notes is payable on January 15 and July 15 of each year. Antero Resources may redeem all or part of the 2026 Notes at any time on or after January 15, 2024 at redemption prices ranging from 104.188 % on or after January 15, 2024 to 100.00 % on or after January 15, 2026. In addition, on or before January 15, 2024, Antero Resources may redeem up to 35 % of the aggregate principal amount of the 2026 Notes, but in an amount not greater than the net cash proceeds of certain equity offerings, if certain conditions are met, at a redemption price of 108.375 % of the principal amount of the 2026 Notes, plus accrued and unpaid interest. At any time prior to January 15, 2024, Antero Resources may also redeem the 2026 Notes, in whole or in part, at a price equal to 100 % of the principal amount of the 2026 Notes plus a “make-whole” premium and accrued and unpaid interest. If Antero Resources undergoes a change of control followed by a rating decline, the holders of the 2026 Notes will have the right to require Antero Resources to repurchase all or a portion of the notes at a price equal to 101 % of the principal amount of the 2026 Notes, plus accrued and unpaid interest. (f) 7.625 % Senior Notes Due 2029 On January 26, 2021, Antero Resources issued $ 700 million of 7.625 % senior notes due February 1, 2029 (the “2029 Notes”) at par . The 2029 Notes are unsecured and effectively subordinated to the Credit Facility to the extent of the value of the collateral securing the Credit Facility. The 2029 Notes rank pari passu to Antero Resources’ other outstanding senior notes. The 2029 Notes are guaranteed on a full and unconditional and joint and several senior unsecured basis by Antero Resources’ existing subsidiaries that guarantee the Credit Facility and certain of its future restricted subsidiaries. Interest on the 2029 Notes is payable on February 1 and August 1 of each year. Antero Resources may redeem all or part of the 2029 Notes at any time on or after February 1, 2024 at redemption prices ranging from 103.813 % on or after February 1, 2024 to 100.00 % on or after February 1, 2027. In addition, on or before February 1, 2024, Antero Resources may redeem up to 35 % of the aggregate principal amount of the 2029 Notes, but in an amount not greater than the net cash proceeds of certain equity offerings, if certain conditions are met, at a redemption price of 107.625 % of the principal amount of the 2029 Notes, plus accrued and unpaid interest. At any time prior to February 1, 2024, Antero Resources may also redeem the 2029 Notes, in whole or in part, at a price equal to 100 % of the principal amount of the 2029 Notes plus a “make-whole” premium and accrued and unpaid interest. If Antero Resources undergoes a change of control followed by a rating decline, the holders of the 2029 Notes will have the right to require Antero Resources to repurchase all or a portion of the notes at a price equal to 101 % of the principal amount of the 2029 Notes, plus accrued and unpaid interest. ​ (g) 5.375 % Senior Notes Due 2030 On June 1, 2021, Antero Resources issued $ 600 million of 5.375 % senior notes due March 1, 2030 (the “2030 Notes”) at par . The 2030 Notes are unsecured and effectively subordinated to the Credit Facility to the extent of the value of the collateral securing the Credit Facility. The 2030 Notes rank pari passu to Antero Resources’ other outstanding senior notes. The 2030 Notes are 16 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements guaranteed on a full and unconditional and joint and several senior unsecured basis by Antero Resources’ existing subsidiaries that guarantee the Credit Facility and certain of its future restricted subsidiaries. Interest on the 2030 Notes is payable on March 1 and September 1 of each year. Antero Resources may redeem all or part of the 2030 Notes at any time on or after March 1, 2025 at redemption prices ranging from 102.688 % on or after March 1, 2025 to 100.00 % on or after March 1, 2028. In addition, on or before March 1, 2025, Antero Resources may redeem up to 35 % of the aggregate principal amount of the 2030 Notes, but in an amount not greater than the net cash proceeds of certain equity offerings, if certain conditions are met, at a redemption price of 105.375 % of the principal amount of the 2030 Notes, plus accrued and unpaid interest. At any time prior to March 1, 2025, Antero Resources may also redeem the 2030 Notes, in whole or in part, at a price equal to 100 % of the principal amount of the 2030 Notes plus a “make-whole” premium and accrued and unpaid interest. If Antero Resources undergoes a change of control followed by a rating decline, the holders of the 2030 Notes will have the right to require Antero Resources to repurchase all or a portion of the notes at a price equal to 101 % of the principal amount of the 2030 Notes, plus accrued and unpaid interest. ​ (h) 4.25% Convertible Senior Notes Due 2026 On August 21, 2020, Antero Resources issued $ 250 million in aggregate principal amount of 4.25 % convertible senior notes due 2026 (the “ 2026 Convertible Notes”). On September 2, 2020, Antero Resources issued an additional $ 37.5 million of the 2026 Convertible Notes. During the six months ended June 30, 2021, the Company completed the equitization transactions described below under “—Partial Equitizations of 2026 Convertible Notes,” that extinguished $ 206 million principal amount of the 2026 Convertible Notes, and as of June 30, 2021, $ 82 million principal amount of the 2026 Convertible Notes remained outstanding. The 2026 Convertible Notes were issued pursuant to an indenture and are senior, unsecured obligations of Antero Resources. The 2026 Convertible Notes bear interest at a fixed rate of 4.25 % per annum, payable semi-annually in arrears on March 1 and September 1 of each year, commencing on March 1, 2021. Proceeds from the issuance of the 2026 Convertible Notes totaled $ 278.5 million, net of initial purchasers’ fees and issuance cost of $ 9 million. Each capitalized term used in this subsection but not otherwise defined in this Quarterly Report on Form 10-Q has the meaning as set forth in the indenture governing the 2026 Convertible Notes. The initial conversion rate is 230.2026 shares of Antero Resources’ common stock per $1,000 principal amount of 2026 Convertible Notes, subject to adjustment upon the occurrence of specified events. As of June 30, 2021, the if-converted value of the 2026 Convertible Notes was $ 283 million, which exceeded the principal amount of the 2026 Convertible Notes by $ 201 million. The 2026 Convertible Notes will mature on September 1, 2026, unless earlier repurchased, redeemed or converted. Before May 1, 2026, note holders will have the right to convert their 2026 Convertible Notes only upon the occurrence of the following events: ● during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ending on September 30, 2020, if the Last Reported Sale Price per share of Antero Resources’ common stock exceeds 130 % of the Conversion Price for each of at least 20 Trading Days (whether or not consecutive) during the 30 consecutive Trading Days ending on, and including, the last Trading Day of the immediately preceding calendar quarter (the “Stock Price Condition”); ● during the five consecutive Business Days immediately after any 10 consecutive trading day period (such 10 consecutive Trading Day period, the “Measurement Period”) if the trading Price per $1,000 principal amount of 2026 Convertible Notes, as determined following a request by a noteholder in accordance with the procedures set forth below, for each trading day of the Measurement Period was less than 98 % of the product of the last reported sale price per share of common stock on such trading day and the conversion rate on such trading day; ● if Antero Resources calls any or all of the 2026 Convertible Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or ● upon the occurrence of certain specified corporate events as set forth in the indenture governing the 2026 Convertible Notes. From and after May 1, 2026, noteholders may convert their 2026 Convertible Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. Upon conversion, Antero Resources may satisfy its conversion obligation by paying and/or delivering, as the case may be, cash, shares of Antero Resources’ common stock or a combination of cash and shares of Antero Resources’ common stock, at Antero Resources’ election, in the manner and subject to the terms and conditions provided in the indenture governing the 2026 Convertible 17 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements Notes. The 2026 Convertible Notes have met the Stock Price Condition allowing holders of the 2026 Convertible Notes to exercise their conversion right as of June 30, 2021. The conversion rate is subject to adjustment under certain circumstances in accordance with the terms of the indenture governing the 2026 Convertible Notes. In addition, following certain corporate events, as described in the indenture governing the 2026 Convertible Notes, that occur prior to the maturity date, Antero Resources will increase the conversion rate for a holder who elects to convert its 2026 Convertible Notes in connection with such a corporate event. If certain corporate events that constitute a Fundamental Change occur, then noteholders may require Antero Resources to repurchase their 2026 Convertible Notes at a cash repurchase price equal to the principal amount of the 2026 Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. The definition of Fundamental Change includes certain business combination transactions involving Antero Resources and certain de-listing events with respect to Antero Resources’ common stock. Upon issuance, the Company separately accounted for the liability and equity components of the 2026 Convertible Notes. The liability component was recorded at the estimated fair value of a similar debt instrument without the conversion feature. The difference between the principal amount of the 2026 Convertible Notes and the estimated fair value of the liability component was recorded as a debt discount and will be amortized to interest expense, together with debt issuance costs, over the term of the 2026 Convertible Notes using the effective interest method, with an effective interest rate of 15.1 % per annum. As of the issuance date, the fair value of the 2026 Convertible Notes was estimated at $ 172 million, resulting in a debt discount at inception of $ 116 million. The equity component, representing the value of the conversion option, was computed by deducting the fair value of the liability component from the initial proceeds of the 2026 Convertible Notes issuance. This equity component was recorded, net of deferred taxes and issuance costs, in additional paid-in capital within the unaudited condensed consolidated balance sheet and statement of stockholders’ equity and will not be remeasured as long as it continues to meet the conditions for equity classification. Transaction costs related to the 2026 Convertible Notes issuance were allocated to the liability and equity components based on their relative fair values. Issuance costs attributable to the liability component were recorded within debt issuance costs on the unaudited condensed consolidated balance sheet and are amortized over the term of the 2026 Convertible Notes using the effective interest method. Issuance costs attributable to the equity component were recorded as a charge to additional paid-in capital within the unaudited condensed consolidated balance sheet and statement of stockholders’ equity. Partial Equitizations of 2026 Convertible Notes On January 12, 2021, the Company completed a registered direct offering (the “January Share Offering”) of an aggregate of 31.4 million shares of its common stock at a price of $ 6.35 per share to certain holders of the 2026 Convertible Notes. The Company used the proceeds from the January Share Offering and approximately $ 63 million of borrowings under the Credit Facility to repurchase from such holders $ 150 million aggregate principal amount of the 2026 Convertible Notes in privately negotiated transactions (the “January Convertible Note Repurchase,” and, collectively with the January Share Offering, the “January Equitization Transactions”). The 2026 Convertible Notes have an initial conversion rate of 230.2026 shares of the Company’s common stock per $1,000 principal amount, and the January Equitization Transactions had the effect of increasing this conversion rate to 275.3525 shares of common stock per $1,000 principal amount. The Company accounted for this transaction as an inducement of the 2026 Convertible Notes, and as a result, the Company recorded a $ 39 million loss on convertible note equitization in the unaudited condensed consolidated statements of operations and comprehensive loss for the six months ended June 30, 2021 for the consideration paid in excess of the original terms of the 2026 Convertible Notes. Additionally, the January Equitization Transactions resulted in a loss on early extinguishment of debt of $ 41 million in the unaudited condensed consolidated statement of operations and comprehensive loss for the six months ended June 30, 2021. On May 13, 2021, the Company completed a registered direct offering (the “May Share Offering”) of an aggregate of 11.6 million shares of its common stock at a price of $ 11.01 per share to certain holders of the 2026 Convertible Notes. The Company used the proceeds from the May Share Offering and approximately $ 26 million of borrowings under the Credit Facility to repurchase from such holders $ 56 million aggregate principal amount of the 2026 Convertible Notes in privately negotiated transactions (the “May Convertible Note Repurchase,” and, collectively with the May Share Offering, the “May Equitization Transactions”). The 2026 Convertible Notes have an initial conversion rate of 230.2026 shares of the Company’s common stock per $1,000 principal amount, and the May Equitization Transactions had the effect of increasing this conversion rate to 245.2802 shares of common stock per $1,000 principal amount. The Company accounted for this transaction as an inducement of the 2026 Convertible Notes, and as a result, the Company recorded a $ 12 million loss on convertible note equitization in the unaudited condensed consolidated statements 18 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements of operations and comprehensive loss for the three and six months ended June 30, 2021 for the consideration paid in excess of the original terms of the 2026 Convertible Notes. Additionally, the May Equitization Transactions resulted in a loss on early extinguishment of debt of $ 21 million in the unaudited condensed consolidated statement of operations and comprehensive loss for the three and six months ended June 30, 2021. The 2026 Convertible Notes consist of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ June 30, ​ ​ ​ 2020 ​ 2021 ​ Liability component: ​ ​ ​ ​ ​ ​ ​ Principal ​ $ 287,500 ​ ​ 81,570 ​ Less: unamortized note discount ​ ​ ( 112,265 ) ​ ​ ( 29,782 ) ​ Less: unamortized debt issuance costs ​ ​ ( 5,852 ) ​ ​ ( 1,732 ) ​ Net carrying value ​ $ 169,383 ​ ​ 50,056 ​ Equity component (1) ​ $ 115,601 ​ ​ 32,779 ​ (1) As of December 31, 2020, the equity component attributable to the outstanding 2026 Convertible Notes was recorded in additional paid-in capital, net of $ 3 million of issuance costs and $ 28 million of deferred taxes. As of June 30, 2021, the equity component attributable to the outstanding 2026 Convertible Notes was recorded in additional paid-in capital net of $ 1 million of issuance costs and $ 8 million of deferred taxes. ​ Interest expense recognized on the 2026 Convertible Notes related to the stated interest rate, amortization of the debt discount and debt issuance costs totaled $ 2.8 million and $ 7.2 million for the three and six months ended June 30, 2021, respectively. (i) Debt Repurchase Program During the three and six months ended June 30, 2020, Antero Resources repurchased $ 236 million and $ 619 million, respectively, principal amount of debt at a weighted average discount of 17 % and 19 % , respectively. The Company recognized a gain of $ 39 million and $ 120 million for the three and six months ended June 30, 2020, respectively, on the early extinguishment of the debt repurchased. ​ During the first quarter of 2021, the Company redeemed the remaining $ 661 million of the 2022 Notes at par, plus accrued and unpaid interest, and as a result, the 2022 Notes were fully retired as of February 10, 2021. The Company redeemed the remaining $ 574 million of the 2023 Notes at par, plus accrued and unpaid interest, during the second quarter of 2021. The 2023 Notes were fully retired as of June 1, 2021. ​ (j) Subsequent Event On July 1, 2021, Antero Resources redeemed $ 175 million of the principal amount of its 2026 Notes at a redemption price of 108.375 % of the principal amount thereof, plus accrued and unpaid interest. Immediately following the redemption, there were $ 325 million aggregate principal amount of 2026 Notes outstanding. The $ 15 million premium to the principal amount redeemed along with the write-off of a proportional amount of unamortized debt issuance costs will be included in the Company’s loss on early debt extinguishment during the third quarter of 2021. ​ 19 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements (8) Asset Retirement Obligations The following table sets forth a reconciliation of the Company’s asset retirement obligations for the six months ended June 30, 2021 (in thousands): ​ ​ ​ ​ ​ Asset retirement obligations—December 31, 2020 $ 54,452 ​ Obligations incurred ​ 637 ​ Accretion expense ​ ​ 2,119 ​ Revisions to prior estimates ​ ​ ( 589 ) ​ Asset retirement obligations—June 30, 2021 ​ $ 56,619 ​ ​ Asset retirement obligations are included in other liabilities on the Company’s unaudited condensed consolidated balance sheets. ​ (9) Equity-Based Compensation and Cash Awards On June 17, 2020, Antero Resources’ stockholders approved the Antero Resources Corporation 2020 Long-Term Incentive Plan (the “2020 Plan”), which replaced the Antero Resources Corporation Long-Term Incentive Plan (the “2013 Plan”), and the 2020 Plan became effective as of such date. The 2020 Plan provides for grants of stock options (including incentive stock options), stock appreciation rights, restricted stock awards, RSU awards, vested stock awards, dividend equivalent awards, and other stock-based and cash awards. The terms and conditions of the awards granted are established by the Compensation Committee of Antero Resources’ Board of Directors. Employees, officers, non-employee directors and other service providers of the Company and its affiliates are eligible to receive awards under the 2020 Plan. No further awards will be granted under the 2013 Plan on or after June 17, 2020. The 2020 Plan provides for the reservation of 10,050,000 shares of the Company’s common stock, plus the number of certain shares that become available again for delivery from the 2013 Plan in accordance with the share recycling provisions described below. The share recycling provisions allow for all or any portion of an award (including an award granted under the 2013 Plan that was outstanding as of June 17, 2020) that expires or is cancelled, forfeited, exchanged, settled for cash, or otherwise terminated without actual delivery of the shares to be considered not delivered and thus available for new awards under the 2020 Plan. Further, any shares withheld or surrendered in payment of any taxes relating to awards that were outstanding under either the 2013 Plan as of June 17, 2020 or are granted under the 2020 Plan (other than stock options and stock appreciation rights) will again be available for new awards under the 2020 Plan. A total of 7,677,911 shares were available for future grant under the 2020 Plan as of June 30, 2021. Antero Midstream Partners LP’s (“Antero Midstream Partners”) general partner was authorized to grant up to 10,000,000 common units representing limited partner interests in Antero Midstream Partners under the Antero Midstream Partners LP Long-Term Incentive Plan (the “AMP Plan”) to non-employee directors of its general partner and certain officers, employees, and consultants of Antero Midstream Partners and its affiliates (which include Antero Resources). Antero Resources deconsolidated Antero Midstream Partners on March 12, 2019, and on such date each outstanding phantom unit award under the AMP Plan, was assumed by Antero Midstream Corporation and converted into 1.8926 RSUs (all such RSUs, the “Converted AM RSU Awards”) under the Antero Midstream Corporation Long Term Incentive Plan (the “AMC Plan”). Each RSU award under the AMC Plan represents a right to receive one share of Antero Midstream Corporation common stock. 20 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements The Company’s equity-based compensation expense, by type of award, was as follows for the three and six months ended June 30, 2020 and 2021 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ Six Months Ended June 30, ​ ​ 2020 ​ 2021 2020 ​ 2021 ​ RSU awards ​ $ 4,080 ​ ​ 3,392 ​ $ 5,958 ​ ​ 6,630 ​ PSU awards ​ ​ 2,631 ​ ​ 223 ​ ​ 3,553 ​ ​ 1,759 ​ Converted AM RSU Awards (1) ​ ​ 1,262 ​ ​ 284 ​ ​ 1,422 ​ ​ 802 ​ Equity awards issued to directors ​ ​ — ​ ​ 350 ​ ​ 369 ​ ​ 700 ​ Total expense ​ $ 7,973 ​ ​ 4,249 ​ $ 11,302 ​ ​ 9,891 ​ (1) Antero Resources recognized compensation expense for equity awards granted under both the 2013 Plan and the AMP Plan because the awards under the AMP Plan are accounted for as if they are distributed by Antero Midstream Partners to Antero Resources. Antero Resources allocates a portion of equity-based compensation expense related to grants prior to the deconsolidation of Antero Midstream Partners on March 12, 2019 to Antero Midstream Partners based on its proportionate share of Antero Resources’ labor costs. (a) Restricted Stock Unit Awards A summary of RSU award activity for the six months ended June 30, 2021 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ Average ​ ​ ​ Number of ​ Grant Date ​ ​ Shares Fair Value ​ Total awarded and unvested—December 31, 2020 ​ 8,432,397 ​ $ 4.06 ​ Granted ​ 1,425,168 ​ ​ 9.50 ​ Vested ​ ( 2,987,376 ) ​ ​ 4.58 ​ Forfeited ​ ( 255,284 ) ​ ​ 4.83 ​ Total awarded and unvested—June 30, 2021 ​ 6,614,905 ​ $ 4.96 ​ ​ As of June 30, 2021, there was approximately $ 28 million of unamortized equity-based compensation expense related to unvested RSUs. That expense is expected to be recognized over a weighted average period of approximately 2.7 years. (b) Performance Share Unit Awards PSU Awards Based on Absolute Total Shareholder Return (“TSR”) ​ In April 2021, the Company granted PSU awards to certain of its executive officers that vest based on Antero Resources’ absolute TSR determined as of the last day of each of three one-year performance periods ending on April 15, 2022, April 15, 2023, and April 15, 2024, and one cumulative three-year performance period ending on April 15, 2024, in each case, subject to the executive officer’s continued employment through April 15, 2024. The number of shares of common stock that may ultimately be earned following the end of the cumulative three-year performance period with respect to the TSR PSUs ranges from zero to 200 % of the target number of TSR PSUs originally granted. Expense related to these PSUs is recognized on a graded-vested basis over the term of each performance period. Forfeitures are accounted for as they occur by reversing the expense previously recognized for awards that were forfeited during the period. ​ PSU Awards Based on Leverage Ratio ​ In April 2021, the Company granted PSUs to certain of its executive officers that vest based on the Company’s total debt less cash and cash equivalents divided by the Company’s Adjusted EBITDAX (as defined and described in Item 2 below under “Non-GAAP Financial Measures”) determined as of the last day of each of three one-year performance periods ending on December 31, 2021, December 31, 2022, and December 31, 2023, in each case, subject to the executive officer’s continued employment through December 31, 2023 (“Leverage Ratio PSUs”). The number of shares of common stock that may ultimately be earned with respect to the Leverage Ratio PSUs ranges from zero to 200 % of the target number of Leverage Ratio PSUs originally granted. Expense related to the Leverage Ratio PSUs is recognized based on the number of shares of common stock that are expected to be issued at the end of 21 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements each measurement period, and such expense is reversed if the likelihood of achieving the performance condition becomes improbable. As of June 30, 2021, the likelihood of achieving the performance conditions related to the Leverage Ratio PSUs was probable. ​ A summary of PSU award activity for the six months ended June 30, 2021 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ Number of ​ Average Grant ​ ​ Units Date Fair Value ​ Total awarded and unvested—December 31, 2020 ​ 2,547,798 ​ $ 12.66 ​ Granted ​ 437,246 ​ ​ 10.36 ​ Forfeited ​ ( 67,000 ) ​ ​ 2.97 ​ Cancelled (unearned) ​ ( 1,112,639 ) ​ ​ 19.19 ​ Total awarded and unvested—June 30, 2021 ​ 1,805,405 ​ $ 8.44 ​ ​ The following table presents information regarding the weighted average fair values for market-based PSUs granted during the six months ended June 30, 2021, and the assumptions used to determine the fair values: ​ ​ ​ ​ ​ ​ ​ Dividend yield ​ ​ — % ​ Volatility ​ ​ 85 % ​ Risk-free interest rate ​ ​ 0.32 % ​ Weighted average fair value of awards granted—Absolute TSR ​ $ 11.99 ​ ​ ​ As of June 30, 2021, there was approximately $ 9 million of unamortized equity-based compensation expense related to unvested PSUs. That expense is expected to be recognized over a weighted average period of approximately 2.2 years. (c) Stock Options A summary of stock option activity for the six months ended June 30, 2021 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ Weighted ​ Average ​ ​ ​ ​ ​ ​ ​ Average ​ Remaining ​ Intrinsic ​ ​ ​ Stock ​ Exercise ​ Contractual ​ Value ​ ​ Options Price Life (in thousands) ​ Outstanding—December 31, 2020 ​ 432,461 ​ $ 50.64 ​ 4.1 ​ $ — ​ Granted ​ — ​ ​ — ​ ​ ​ ​ ​ ​ Exercised ​ — ​ ​ — ​ ​ ​ ​ ​ ​ Forfeited ​ — ​ ​ — ​ ​ ​ ​ ​ ​ Expired ​ ( 75,167 ) ​ ​ 50.00 ​ ​ ​ ​ ​ ​ Outstanding—June 30, 2021 ​ 357,294 ​ $ 50.78 ​ 3.5 ​ $ — ​ Vested—June 30, 2021 ​ 357,294 ​ $ 50.78 ​ 3.5 ​ $ — ​ Exercisable—June 30, 2021 ​ 357,294 ​ $ 50.78 ​ 3.5 ​ $ — ​ ​ Intrinsic values are based on the exercise price of the options and the closing price of Antero Resources’ common stock on the referenced dates. As of June 30, 2021, all stock options were fully vested resulting in no unamortized equity-based compensation expense. 22 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements (d) Converted AM RSU Awards A summary of the Converted AM RSU Awards for the six months ended June 30, 2021 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ Average ​ ​ ​ Number of ​ Grant Date ​ ​ Units Fair Value ​ Total awarded and unvested—December 31, 2020 ​ 296,390 ​ $ 15.06 ​ Granted ​ — ​ ​ ​ ​ Vested ​ ( 190,066 ) ​ ​ 15.56 ​ Forfeited ​ ( 2,075 ) ​ ​ 13.25 ​ Total awarded and unvested—June 30, 2021 ​ 104,249 ​ $ 14.20 ​ ​ As of June 30, 2021, there was less than $ 1.0 million of unamortized equity-based compensation expense related to unvested Converted AM RSU Awards. Such expense is expected to be recognized over a weighted average period of 0.7 years, and the Company’s proportionate share will be allocated to it as it is recognized. (e) Cash Awards In January 2020, the Company granted cash awards of approximately $ 3.3 million to certain executives under the 2013 Plan, and compensation expense for these awards is recognized ratably over the vesting period for each of three tranches through January 20, 2023. In July 2020, the Company granted additional cash awards in the aggregate of $ 2.6 million to certain non-executive employees under the 2020 Plan that vest ratably over four years . As of June 30, 2021, the Company has recorded approximately $ 2.2 million in Other liabilities in the unaudited condensed consolidated balance sheet related to unvested cash awards. (10) Fair Value The carrying values of accounts receivable and accounts payable as of December 31, 2020 and June 30, 2021 approximated market values because of their short-term nature. The carrying values of the amounts outstanding under the Credit Facility as of December 31, 2020 and June 30, 2021 approximated fair value because the variable interest rates are reflective of current market conditions. The fair value and carrying value of the senior notes and 2026 Convertible Notes as of December 31, 2020 and June 30, 2021 as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ June 30, 2021 ​ ​ Fair Carrying Fair Carrying ​ ​ ​ Value (1) ​ Value (2) ​ Value (1) ​ Value (2) ​ 5.125 % senior notes due 2022 ​ $ 658,468 ​ ​ 658,400 ​ ​ — ​ ​ — ​ 5.625 % senior notes due 2023 ​ ​ 562,698 ​ ​ 571,370 ​ ​ — ​ ​ — ​ 5.00 % senior notes due 2025 ​ ​ 560,500 ​ ​ 585,440 ​ ​ 603,275 ​ ​ 585,938 ​ 8.375 % senior notes due 2026 ​ ​ — ​ ​ — ​ ​ 566,250 ​ ​ 494,463 ​ 7.625 % senior notes due 2029 ​ ​ — ​ ​ — ​ ​ 775,250 ​ ​ 691,361 ​ 5.375 % senior notes due 2030 ​ ​ — ​ ​ — ​ ​ 612,360 ​ ​ 593,345 ​ 4.25 % convertible senior notes due 2026 ​ ​ 430,963 ​ ​ 169,383 ​ ​ 291,384 ​ ​ 50,056 ​ Total ​ $ 2,212,629 ​ ​ 1,984,593 ​ ​ 2,848,519 ​ ​ 2,415,163 ​ (1) Fair values are based on Level 2 market data inputs. (2) Carrying values are presented net of unamortized debt issuance costs and debt discounts or premiums. ​ See Note 11—Derivative Instruments to the unaudited condensed consolidated financial statements for information regarding the fair value of derivative financial instruments. ​ 23 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements (11) Derivative Instruments The Company is exposed to certain risks relating to its ongoing business operations, and it uses derivative instruments to manage its commodity price risk. In addition, the Company periodically enters into contracts that contain embedded features that are required to be bifurcated and accounted for separately as derivatives. (a) Commodity Derivative Positions The Company periodically enters into natural gas, NGLs, and oil derivative contracts with counterparties to hedge the price risk associated with its production. These derivatives are not entered into for trading purposes. To the extent that changes occur in the market prices of natural gas, NGLs, and oil, the Company is exposed to market risk on these open contracts. This market risk exposure is generally offset by the change in market prices of natural gas, NGLs, and oil recognized upon the ultimate sale of the Company’s production. The Company was party to various fixed price commodity swap contracts that settled during the three and six months ended June 30, 2020 and 2021. The Company enters into these swap contracts when management believes that favorable future sales prices for the Company’s production can be secured. Under these swap agreements, when actual commodity prices upon settlement exceed the fixed price provided by the swap contracts, the Company pays the difference to the counterparty. When actual commodity prices upon settlement are less than the contractually provided fixed price, the Company receives the difference from the counterparty. In addition, the Company has entered into basis swap contracts in order to hedge the difference between the New York Mercantile Exchange (“NYMEX”) index price and a local index price. The Company’s derivative contracts have not been designated as hedges for accounting purposes; therefore, all gains and losses are recognized in the Company’s statements of operations. As of June 30, 2021, the Company’s fixed price natural gas, oil and NGL swap positions excluding Martica, the Company’s consolidated VIE, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ Average ​ Commodity / Settlement Period Index Contracted Volume Price Natural Gas ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ July-December 2021 ​ Henry Hub ​ 2,160,000 MMBtu/day ​ $ 2.77 /MMBtu ​ January-December 2022 ​ Henry Hub ​ 1,155,486 MMBtu/day ​ ​ 2.50 /MMBtu ​ January-December 2023 ​ Henry Hub ​ 43,000 MMBtu/day ​ ​ 2.37 /MMBtu ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Propane ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ July-October 2021 ​ Mont Belvieu Propane-OPIS TET ​ 45,650 Bbl/day ​ $ 31.30 /Bbl ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Butane ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ July-December 2021 ​ Mont Belvieu Butane-OPIS Non-TET ​ 5,825 Bbl/day ​ $ 34.07 /Bbl ​ July-December 2021 ​ Mont Belvieu Butane-OPIS TET ​ 2,900 Bbl/day ​ $ 31.68 /Bbl ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Natural Gasoline ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ July-December 2021 ​ Mont Belvieu Natural Gasoline-OPIS Non-TET ​ 8,875 Bbl/day ​ $ 50.36 /Bbl ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Isobutane ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ July-December 2021 ​ Mont Belvieu Isobutane-OPIS Non-TET ​ 5,150 Bbl/day ​ $ 35.25 /Bbl ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Oil ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ July-December 2021 ​ West Texas Intermediate ​ 3,000 Bbl/day ​ $ 55.16 /Bbl ​ ​ 24 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements In addition, the Company has a call option agreement, which entitles the holder the right, but not the obligation, to enter into a fixed price swap agreement on December 21, 2023 to purchase 427,500 MMBtu per day at a price of $ 2.77 per MMBtu for the year ending December 31, 2024. ​ As of June 30, 2021, the Company’s natural gas basis swap positions, which settle on the pricing index to basis differential of the Columbia Gas Transmission pipeline (“TCO”) to the NYMEX Henry Hub natural gas price were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ Commodity / Settlement Period ​ Index to Basis Differential Contracted Volume Hedged Differential ​ Natural Gas ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ July-December 2021 ​ NYMEX to TCO ​ 40,000 MMBtu/day ​ $ 0.414 /MMBtu ​ January-December 2022 ​ NYMEX to TCO ​ 60,000 MMBtu/day ​ ​ 0.515 /MMBtu ​ January-December 2023 ​ NYMEX to TCO ​ 50,000 MMBtu/day ​ ​ 0.525 /MMBtu ​ January-December 2024 ​ NYMEX to TCO ​ 50,000 MMBtu/day ​ ​ 0.530 /MMBtu ​ ​ The Company also entered into NGL derivative contracts, which establish a contractual price for the settlement month as a fixed percentage of the West Texas Intermediate Crude Oil index (“WTI”) price for the settlement month. When the percentage of the contractual price is above the contracted percentage, the Company pays the difference to the counterparty. When it is below the contracted percentage, the Company receives the difference from the counterparty. As of June 30, 2021, the Company had natural gas and NGL contracts that fix the Mont Belvieu index price for natural gasoline to percentages of WTI as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ Commodity / Settlement Period Index to Basis Differential Contracted Volume Payout Ratio ​ Gas Liquids ​ ​ ​ ​ ​ ​ ​ ​ ​ July-December 2021 ​ Mont Belvieu Natural Gasoline to WTI ​ 9,325 Bbl/day ​ 78 % ​ ​ 25 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements As of June 30, 2021, the Company’s fixed price natural gas, oil and NGL swap positions for Martica, the Company’s consolidated VIE, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ Average ​ Commodity / Settlement Period Index Contracted Volume Price ​ Natural Gas ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ July-December 2021 ​ Henry Hub ​ 47,119 MMBtu/day ​ $ 2.61 /MMBtu January-December 2022 ​ Henry Hub ​ 38,356 MMBtu/day ​ ​ 2.39 /MMBtu ​ January-December 2023 ​ Henry Hub ​ 35,616 MMBtu/day ​ ​ 2.35 /MMBtu ​ January-December 2024 ​ Henry Hub ​ 23,885 MMBtu/day ​ ​ 2.33 /MMBtu ​ January-March 2025 ​ Henry Hub ​ 18,021 MMBtu/day ​ ​ 2.53 /MMBtu ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ethane ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ July-December 2021 ​ Mont Belvieu Purity Ethane-OPIS ​ 1,025 Bbl/day ​ $ 7.01 /Bbl ​ January-March 2022 ​ Mont Belvieu Purity Ethane-OPIS ​ 521 Bbl/day ​ ​ 6.68 /Bbl ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Propane ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ July-December 2021 ​ Mont Belvieu Propane-OPIS Non-TET ​ 1,115 Bbl/day ​ $ 18.64 /Bbl ​ January-December 2022 ​ Mont Belvieu Propane-OPIS Non-TET ​ 934 Bbl/day ​ ​ 19.20 /Bbl ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Natural Gasoline ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ July-December 2021 ​ Mont Belvieu Natural Gasoline-OPIS Non-TET ​ 351 Bbl/day ​ $ 31.57 /Bbl ​ January-December 2022 ​ Mont Belvieu Natural Gasoline-OPIS Non-TET ​ 282 Bbl/day ​ ​ 34.37 /Bbl ​ January-December 2023 ​ Mont Belvieu Natural Gasoline-OPIS Non-TET ​ 247 Bbl/day ​ ​ 40.74 /Bbl ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Oil ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ July-December 2021 ​ West Texas Intermediate ​ 126 Bbl/day ​ $ 40.81 /Bbl ​ January-December 2022 ​ West Texas Intermediate ​ 112 Bbl/day ​ ​ 43.51 /Bbl ​ January-December 2023 ​ West Texas Intermediate ​ 99 Bbl/day ​ ​ 44.88 /Bbl ​ January-December 2024 ​ West Texas Intermediate ​ 43 Bbl/day ​ ​ 44.02 /Bbl ​ January-March 2025 ​ West Texas Intermediate ​ 39 Bbl/day ​ ​ 45.06 /Bbl ​ ​ (b) Embedded Derivatives The VPP includes an embedded put option tied to NYMEX pricing for the production volumes associated with the Company’s retained interest in the VPP properties of 100,340,000 MMBtu remaining through December 31, 2026 at a weighted average strike price of $ 2.58 per MMBtu. The embedded put option is not clearly and closely related to the host contract, and therefore, the Company bifurcated this derivative instrument and reflected it at fair value in the unaudited condensed consolidated financial statements. 26 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements (c) Summary The following table presents a summary of the fair values in thousands of the Company’s derivative instruments and where such values are recorded in the unaudited condensed consolidated balance sheets as of December 31, 2020 and June 30, 2021. None of the Company’s derivative instruments are designated as hedges for accounting purposes. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance Sheet ​ December 31, ​ June 30, ​ ​ Location 2020 ​ 2021 ​ Asset derivatives not designated as hedges for accounting purposes: ​ ​ ​ ​ ​ ​ ​ ​ ​ Commodity derivatives—current ​ Derivative instruments ​ $ 97,144 ​ ​ — ​ Embedded derivatives—current ​ Derivative instruments ​ ​ 7,986 ​ ​ 1,056 ​ Commodity derivatives—noncurrent ​ Derivative instruments ​ ​ 14,689 ​ ​ — ​ Embedded derivatives—noncurrent ​ Derivative instruments ​ ​ 32,604 ​ ​ 19,396 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total asset derivatives ​ ​ ​ ​ 152,423 ​ ​ 20,452 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liability derivatives not designated as hedges for accounting purposes: ​ ​ ​ ​ ​ ​ ​ ​ ​ Commodity derivatives—current (1) ​ Derivative instruments ​ ​ 31,242 ​ ​ 733,994 ​ Commodity derivatives—noncurrent (1) ​ Derivative instruments ​ ​ 99,172 ​ ​ 204,525 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liability derivatives ​ ​ ​ ​ 130,414 ​ ​ 938,519 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net derivatives assets (liabilities) ​ ​ ​ $ 22,009 ​ ​ ( 918,067 ) ​ (1) As of June 30, 2021 , approximately $ 50 million of commodity derivative liabilities, including $ 29 million of current commodity derivatives and $ 21 million of noncurrent commodity derivatives, are attributable to the Company’s consolidated VIE, Martica. As of December 31, 2020, approximately $ 14 million of commodity derivative liabilities, including $ 7 million of current commodity derivatives and $ 7 million of noncurrent commodity derivatives, are attributable to the Company’s consolidated VIE, Martica. The following table presents the gross values of recognized derivative assets and liabilities, the amounts offset under master netting arrangements with counterparties, and the resulting net amounts presented in the unaudited condensed consolidated balance sheets as of the dates presented, all at fair value (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ June 30, 2021 ​ ​ ​ ​ ​ ​ ​ Net Amounts of ​ ​ ​ ​ ​ Net Amounts of ​ ​ ​ Gross ​ Gross Amounts ​ Assets ​ Gross ​ Gross Amounts ​ Assets ​ ​ ​ Amounts on ​ Offset on ​ (Liabilities) on ​ Amounts on ​ Offset on ​ (Liabilities) on ​ ​ Balance Sheet Balance Sheet Balance Sheet Balance Sheet Balance Sheet Balance Sheet Commodity derivative assets ​ $ 181,375 ​ ​ ( 69,542 ) ​ ​ 111,833 ​ $ 29,803 ​ ​ ( 29,803 ) ​ ​ — ​ Embedded derivative assets ​ $ 40,590 ​ ​ — ​ ​ 40,590 ​ $ 20,452 ​ ​ — ​ ​ 20,452 ​ Commodity derivative liabilities ​ $ ( 199,956 ) ​ ​ 69,542 ​ ​ ( 130,414 ) ​ $ ( 968,322 ) ​ ​ 29,803 ​ ​ ( 938,519 ) ​ ​ 27 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements The following is a summary of derivative fair value gains and losses and where such values are recorded in the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2020 and 2021 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Statement of ​ ​ ​ ​ ​ ​ ​ Operations ​ Three Months Ended June 30, ​ Six Months Ended June 30, ​ ​ Location ​ 2020 ​ 2021 ​ 2020 ​ 2021 ​ Commodity derivative fair value gains (losses) (1) ​ Revenue ​ $ ( 168,015 ) ​ ​ ( 819,725 ) ​ $ 397,818 ​ ​ ( 989,692 ) ​ Embedded derivative fair value gains (losses) (1) ​ Revenue ​ $ — ​ ​ ( 12,115 ) ​ $ — ​ ​ ( 19,904 ) ​ (1) The fair value of derivative instruments was determined using Level 2 inputs . ​ ​ (12) Leases The Company leases certain office space, processing plants, drilling rigs and completion services, gas gathering lines, compressor stations, and other office and field equipment. Leases with an initial term of 12 months or less are considered short-term and are not recorded on the balance sheet. Instead, the short-term leases are recognized in expense on a straight-line basis over the lease term. Most leases include one or more options to renew, with renewal terms that can extend the lease from one to 20 years or more. The exercise of the lease renewal options is at the Company’s sole discretion. The depreciable lives of the leased assets are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Certain of the Company’s lease agreements include minimum payments based on a percentage of produced volumes over contractual levels and others include rental payments adjusted periodically for inflation. The Company considers all contracts that have assets specified in the contract, either explicitly or implicitly, that the Company has substantially all of the capacity of the asset, and has the right to obtain substantially all of the economic benefits of that asset, without the lessor’s ability to have a substantive right to substitute that asset, as leased assets. For any contract deemed to include a leased asset, that asset is capitalized on the balance sheet as a right-of-use asset and a corresponding lease liability is recorded at the present value of the known future minimum payments of the contract using a discount rate on the date of commencement. The leased asset classification is determined at the date of recording as either operating or financing, depending upon certain criteria of the contract. The discount rate used for present value calculations is the discount rate implicit in the contract. If an implicit rate is not determinable, a collateralized incremental borrowing rate is used at the date of commencement. As new leases commence or previous leases are modified the discount rate used in the present value calculation is the current period applicable discount rate. The Company has made an accounting policy election to adopt the practical expedient for combining lease and non-lease components on an asset class basis. This expedient allows the Company to combine non-lease components such as real estate taxes, insurance, maintenance, and other operating expenses associated with the leased premises with the lease component of a lease agreement on an asset class basis when the non-lease components of the agreement cannot be easily bifurcated from the lease payment. Currently, the Company is only applying this expedient to certain office space agreements. 28 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements (a) Supplemental Balance Sheet Information Related to Leases The Company’s lease assets and liabilities as of December 31, 2020 and June 30, 2021 consisted of the following items (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ June 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 ​ ​ 1,256,391 ​ Drilling rigs and completion services ​ Operating lease right-of-use assets ​ ​ 29,894 ​ ​ 20,264 ​ Gas gathering lines and compressor stations (1) ​ Operating lease right-of-use assets ​ ​ 1,241,090 ​ ​ 1,172,477 ​ Office space ​ Operating lease right-of-use assets ​ ​ 36,879 ​ ​ 35,012 ​ Vehicles ​ Operating lease right-of-use assets ​ ​ 2,704 ​ ​ 1,327 ​ Other office and field equipment ​ Operating lease right-of-use assets ​ ​ 746 ​ ​ 573 ​ Total operating lease right-of-use assets ​ ​ ​ $ 2,613,603 ​ ​ 2,486,044 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term operating lease obligation ​ Short-term lease liabilities ​ $ 265,178 ​ ​ 269,070 ​ Long-term operating lease obligation ​ Long-term lease liabilities ​ ​ 2,348,425 ​ ​ 2,216,974 ​ Total operating lease obligation ​ ​ ​ $ 2,613,603 ​ ​ 2,486,044 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Finance Leases ​ ​ ​ ​ ​ ​ ​ ​ ​ Finance lease right-of-use assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ Vehicles ​ Other property and equipment ​ $ 1,206 ​ ​ 903 ​ Total finance lease right-of-use assets (2) ​ ​ ​ $ 1,206 ​ ​ 903 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term finance lease obligation ​ Short-term lease liabilities ​ $ 845 ​ ​ 541 ​ Long-term finance lease obligation ​ Long-term lease liabilities ​ ​ 361 ​ ​ 362 ​ Total finance lease obligation ​ ​ ​ $ 1,206 ​ ​ 903 ​ (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 June 30, 2021, respectively. See “—Related party lease disclosure” for additional discussion. (2) Financing lease assets are recorded net of accumulated amortization of $ 3 million as of both December 31, 2020 and June 30, 2021. 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. ​ 29 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements (b) Supplemental Information Related to Leases Costs associated with operating leases were included in the unaudited condensed consolidated statement of operations and comprehensive loss for the three and six months ended June 30, 2020 and 2021 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ Six Months Ended June 30, ​ Cost Classification Location 2020 2021 2020 2021 ​ Operating lease cost ​ Statement of operations ​ Gathering, compression, processing, and transportation ​ $ 350,853 ​ ​ 385,022 ​ $ 703,496 ​ ​ 761,952 ​ Operating lease cost ​ Statement of operations ​ General and administrative ​ ​ 2,789 ​ ​ 2,736 ​ ​ 5,670 ​ ​ 5,224 ​ Operating lease cost ​ Statement of operations ​ Contract termination and rig stacking ​ ​ 5,841 ​ ​ 844 ​ ​ 5,841 ​ ​ 844 ​ Operating lease cost ​ Statement of operations ​ Lease operating ​ ​ — ​ ​ 44 ​ ​ — ​ ​ 66 ​ Operating lease cost ​ Balance sheet ​ Proved properties (1) ​ ​ 26,265 ​ ​ 28,432 ​ ​ 59,259 ​ ​ 57,191 ​ Total operating lease cost ​ ​ ​ ​ ​ $ 385,748 ​ ​ 417,078 ​ $ 774,266 ​ ​ 825,277 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Finance lease cost: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization of right-of-use assets ​ Statement of operations ​ Depletion, depreciation, and amortization ​ $ 414 ​ ​ 132 ​ $ 559 ​ ​ 259 ​ Total finance lease cost ​ ​ ​ ​ ​ $ 414 ​ ​ 132 ​ $ 559 ​ ​ 259 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term lease payments ​ ​ ​ ​ ​ $ 29,441 ​ ​ 24,456 ​ $ 92,158 ​ ​ 41,298 ​ (1) Capitalized costs related to drilling and completion activities. ​ (c) Supplemental Cash Flow Information Related to Leases The following is the Company’s supplemental cash flow information related to leases for the six months ended June 30, 2020 and 2021 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ ​ 2020 2021 ​ Cash paid for amounts included in the measurement of lease liabilities: ​ ​ ​ ​ ​ ​ ​ Operating cash flows from operating leases ​ $ 661,797 ​ ​ 716,582 ​ Investing cash flows from operating leases ​ ​ 63,279 ​ ​ 44,747 ​ Financing cash flows from finance leases ​ ​ 717 ​ ​ 509 ​ ​ ​ ​ ​ ​ ​ ​ ​ Noncash activities: ​ ​ ​ ​ ​ ​ ​ Right-of-use assets obtained in exchange for new operating lease obligations ​ $ 113,762 ​ ​ 6,849 ​ ​ 30 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements (d) Maturities of Lease Liabilities The table below is a schedule of future minimum payments for operating and financing lease liabilities as of June 30, 2021 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Leases ​ Financing Leases ​ Total ​ Remainder of 2021 ​ $ 306,812 ​ ​ 377 ​ ​ 307,189 ​ 2022 ​ ​ 579,918 ​ ​ 424 ​ ​ 580,342 ​ 2023 ​ ​ 574,333 ​ ​ 76 ​ ​ 574,409 ​ 2024 ​ ​ 565,566 ​ ​ 67 ​ ​ 565,633 ​ 2025 ​ ​ 493,563 ​ ​ 22 ​ ​ 493,585 ​ 2026 ​ ​ 442,971 ​ ​ — ​ ​ 442,971 ​ Thereafter ​ ​ 1,115,499 ​ ​ — ​ ​ 1,115,499 ​ Total lease payments ​ ​ 4,078,662 ​ ​ 966 ​ ​ 4,079,628 ​ Less: imputed interest ​ ​ ( 1,592,618 ) ​ ​ ( 63 ) ​ ​ ( 1,592,681 ) ​ Total ​ $ 2,486,044 ​ ​ 903 ​ ​ 2,486,947 ​ ​ (e) Lease Term and Discount Rate The following table sets forth the Company’s weighted average remaining lease term and discount rate as of December 31, 2020 and June 30, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ June 30, 2021 ​ ​ ​ ​ Operating Leases ​ Finance Leases ​ Operating Leases ​ Finance Leases ​ ​ Weighted average remaining lease term ​ 8.0 years ​ 1.5 years ​ 7.5 years ​ 2.0 years ​ ​ Weighted average discount rate ​ 13.7 % 6.2 % 13.8 % 5.5 % ​ ​ (f) Related Party Lease Disclosure The Company has a gathering and compression agreement with Antero Midstream Corporation, whereby Antero Midstream Corporation receives a low-pressure gathering fee per Mcf, a high-pressure gathering fee per Mcf and a compression fee per Mcf, in each case subject to annual adjustments based on the consumer price index. If and to the extent the Company requests that Antero Midstream Corporation construct new high pressure lines and compressor stations, the gathering and compression agreement contains minimum volume commitments that require Antero Resources to utilize or pay for 75 % of the high pressure gathering capacity and 70 % of the compression capacity of the requested capacity of such new construction for 10 years . In December 2019, the Company and Antero Midstream Corporation agreed to extend the initial term of the gathering and compression agreement to 2038 and established a growth incentive fee program whereby low pressure gathering fees will be reduced from 2020 through 2023 to the extent the Company achieves certain volumetric targets at certain points during such time. Upon completion of the initial contract term, the gathering and compression agreement will continue in effect from year to year until such time as the agreement is terminated, effective upon an anniversary of the effective date of the agreement, by either the Company or Antero Midstream Corporation on or before the 180 th day prior to the anniversary of such effective date. The Company achieved the volumetric targets during each of the first and second quarter of 2020, and Antero Midstream Corporation provided a rebate of $ 12 million and $ 24 million for the three and six months ended June 30, 2020, respectively. The Company did no t achieve the volumetric target during either the first or second quarters of 2021. ​ For the three and six months ended June 30, 2020, gathering and compression fees paid by Antero related to this agreement were $ 166 million and $ 321 million, respectively. For the three and six months ended June 30, 2021, gathering and compression fees paid by Antero related to this agreement were $ 184 million and $ 361 million, respectively. As of December 31, 2020 and June 30, 2021, $ 55 million and $ 66 million were included within Accounts payable, related parties, respectively, on the unaudited condensed consolidated balance sheets as due to Antero Midstream Corporation related to this agreement. ​ ​ 31 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements (13) Commitments The following table sets forth a schedule of future minimum payments for firm transportation, drilling rig and completion services, processing, gathering and compression, and office and equipment agreements, which include leases that have remaining lease terms in excess of one year as of June 30, 2021 (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Processing, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Firm ​ Gathering and ​ Land Payment ​ Operating and ​ Imputed Interest ​ ​ ​ ​ ​ Transportation ​ Compression ​ Obligations ​ Financing Leases ​ for Leases ​ ​ ​ ​ (a) (b) (c) (d) (d) Total Remainder of 2021 ​ $ 541,109 ​ ​ 27,403 ​ ​ 2,576 ​ ​ 138,486 ​ ​ 168,703 ​ ​ 878,277 ​ 2022 ​ ​ 1,042,280 ​ ​ 52,265 ​ ​ 400 ​ ​ 269,013 ​ ​ 311,329 ​ ​ 1,675,287 ​ 2023 ​ ​ 1,072,523 ​ ​ 59,140 ​ ​ — ​ ​ 300,301 ​ ​ 274,108 ​ ​ 1,706,072 ​ 2024 ​ ​ 1,045,442 ​ ​ 59,262 ​ ​ — ​ ​ 333,935 ​ ​ 231,698 ​ ​ 1,670,337 ​ 2025 ​ ​ 1,024,783 ​ ​ 47,960 ​ ​ — ​ ​ 306,723 ​ ​ 186,862 ​ ​ 1,566,328 ​ 2026 ​ ​ 1,018,812 ​ ​ 14,783 ​ ​ — ​ ​ 299,354 ​ ​ 143,617 ​ ​ 1,476,566 ​ Thereafter ​ ​ 6,033,138 ​ ​ 98,596 ​ ​ — ​ ​ 839,135 ​ ​ 276,364 ​ ​ 7,247,233 ​ Total ​ $ 11,778,087 ​ ​ 359,409 ​ ​ 2,976 ​ ​ 2,486,947 ​ ​ 1,592,681 ​ ​ 16,220,100 ​ ​ (a) Firm Transportation The Company has entered into firm transportation agreements with various pipelines in order to facilitate the delivery of its production to market. These contracts commit the Company to transport minimum daily natural gas or NGLs volumes at negotiated rates or pay for any deficiencies at specified reservation fee rates. The amounts in this table are based on the Company’s minimum daily volumes at the reservation fee rate. The values in the table represent the gross amounts that the Company is committed to pay; however, the Company will record in the unaudited condensed consolidated financial statements its proportionate share of costs based on its working interest. (b) Processing, Gathering, and Compression Service Commitments The Company has entered into various long- term gas processing, gathering and compression service agreements. Certain of these agreements were determined to be leases. The minimum payment obligations under the agreements that are not leases are presented in this column. The values in the table represent the gross amounts that the Company is committed to pay; however, the Company will record in the unaudited condensed consolidated financial statements its proportionate share of costs based on its working interest. (c) Land Payment Obligations The Company has entered into various land acquisition agreements. Certain of these agreements contain minimum payment obligations over various terms. The values in the table represent the minimum payments due under these arrangements. None of these agreements were determined to be leases. (d) Leases, including imputed interest The Company has obligations under contracts for services provided by drilling rigs and completion fleets, processing, gathering, and compression services agreements, and office and equipment leases. The values in the table represent the gross amounts that Antero Resources is committed to pay; however, the Company will record in its financial statements its proportionate share of costs based on its working interests. Refer to Note 12—Leases to the unaudited condensed consolidated financial statements for more information on the Company’s operating and finance leases. ​ 32 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements (14) Contingencies Environmental In June 2018, the Company received a Notice of Violation (“NOV”) from the U.S. Environmental Protection Agency (“EPA”) Region III for alleged violations of the federal Clean Air Act and the West Virginia State Implementation Plan. The NOV alleges that combustion devices at these facilities did not meet applicable air permitting requirements. Separately, in June 2018, the Company received an information request from the EPA Region III pursuant to Section 114(a) of the Clean Air Act relating to the facilities that were inspected in September 2017 as well as additional Antero Resources facilities for the purpose of determining if the additional facilities have the same alleged compliance issues that were identified during the September 2017 inspections. Subsequently, the West Virginia Department of Environmental Protection (“WVDEP”) and the EPA Region V (covering Ohio facilities) each conducted its own inspections, and the Company has separately received NOVs from WVDEP and the EPA Region V related to similar issues being investigated by the EPA Region III. The Company continues to negotiate with the EPA and WVDEP to resolve the issues alleged in the NOVs and the information request. The Company’s operations at these facilities are not suspended, and management does not expect these matters to have a material adverse effect on the Company’s financial condition, results of operations, or cash flows. WGL The Company and Washington Gas Light Company and WGL Midstream, Inc. (collectively, “WGL”) were involved in multiple contractual disputes involving firm gas sales contracts executed June 20, 2014 (the “Contracts”) that the Company began delivering gas under in January 2016. In late 2015, WGL asserted that the natural gas index price specified in the Contracts was no longer appropriate and sought to invoke an alternative index clause in the Contracts. This dispute was referred to arbitration. In January 2017, the arbitration panel ruled in the Company’s favor and found that the natural gas index price specified in the Contracts should remain. In March of 2017, WGL filed a lawsuit against the Company in Colorado district court claiming that the Company breached contractual obligations by failing to deliver “TCO pool” gas, ultimately seeking damages of more than $ 40 million. Subsequently, after WGL failed to take certain volumes of gas required under the Contracts, the Company filed a separate lawsuit against WGL to recover damages that WGL refused to pay. These two lawsuits were consolidated and tried in June 2019. On June 20, 2019, the Company was awarded a jury verdict of approximately $ 96 million in damages against WGL. In addition, the jury rejected WGL’s claim against the Company, finding that the Company did not breach the Contracts. On December 10, 2020, the Colorado Court of Appeals affirmed the judgment of the trial court in favor of the Company. In February 2021, the Company and its royalty owners received a gross payment of approximately $ 107 million from WGL, which was in full satisfaction and discharge of the June 2019 judgment entered in favor of the Company. Other The Company is party to various other legal proceedings and claims in the ordinary course of its business, including, but not limited to, royalty claims. The Company believes that certain of these matters will be covered by insurance and that the outcome of other matters will not have a material adverse effect on the Company’s unaudited condensed consolidated financial position, results of operations, or cash flows. ​ (15) Related Parties Substantially all of Antero Midstream Corporation’s revenues were and are derived from transactions with Antero Resources. See Note 16—Reportable Segments to the unaudited condensed consolidated financial statements for the operating results of the Company’s reportable segments. ​ (16) Reportable Segments Management evaluated how the Company is organized and managed and identified the following segments: (i) the exploration, development, and production of natural gas, NGLs, and oil; (ii) marketing and utilization of excess firm transportation capacity and (iii) midstream services through the Company’s equity method investment in Antero Midstream Corporation. All of the Company’s assets are located in the United States and substantially all of its production revenues are attributable to customers located 33 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements in the United States; however, some of the Company’s production revenues are attributable to customers who then transport the Company’s production to foreign countries for resale or consumption. Operating segments are evaluated based on their contribution to consolidated results, which is primarily determined by the respective operating income (loss) of each segment. General and administrative expenses were allocated to the midstream segment based on the nature of the expenses and on a combination of the segments’ proportionate share of the Company’s consolidated property and equipment, capital expenditures, and labor costs, as applicable. General and administrative expenses related to the marketing segment are not allocated because they are immaterial. Other income, income taxes, and interest expense are primarily managed and evaluated on a consolidated basis. Intersegment sales were transacted at prices which approximate market. Accounting policies for each segment are the same as the Company’s accounting policies described in Note 2—Summary of Significant Accounting Policies to the unaudited condensed consolidated financial statements. The operating results and assets of the Company’s reportable segments were as follows for the three months ended June 30, 2020 and 2021 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, 2020 ​ ​ ​ Exploration ​ ​ ​ ​ ​ Elimination of ​ ​ ​ ​ ​ and ​ ​ ​ Midstream ​ Intersegment ​ Consolidated ​ ​ Production Marketing Services Transactions Total ​ Sales and revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Third-party ​ $ 419,919 ​ ​ 64,285 ​ ​ — ​ ​ — ​ ​ 484,204 ​ Intersegment ​ 707 ​ ​ — ​ ​ 219,736 ​ ​ ( 219,736 ) ​ ​ 707 ​ Total ​ $ 420,626 ​ ​ 64,285 ​ ​ 219,736 ​ ​ ( 219,736 ) ​ ​ 484,911 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Lease operating ​ $ 24,742 ​ ​ — ​ ​ — ​ ​ — ​ ​ 24,742 ​ Gathering, compression, processing, and transportation ​ ​ 631,845 ​ ​ — ​ ​ 42,067 ​ ​ ( 42,067 ) ​ ​ 631,845 ​ Impairment of oil and gas properties ​ ​ 37,350 ​ ​ — ​ ​ — ​ ​ — ​ ​ 37,350 ​ Depletion, depreciation, and amortization ​ ​ 214,035 ​ ​ — ​ ​ 27,745 ​ ​ ( 27,745 ) ​ ​ 214,035 ​ General and administrative ​ ​ 38,403 ​ ​ — ​ ​ 12,422 ​ ​ ( 12,422 ) ​ ​ 38,403 ​ Other ​ ​ 32,405 ​ ​ 113,053 ​ ​ 2,776 ​ ​ ( 2,776 ) ​ ​ 145,458 ​ Total ​ ​ 978,780 ​ ​ 113,053 ​ ​ 85,010 ​ ​ ( 85,010 ) ​ ​ 1,091,833 ​ Operating income (loss) ​ $ ( 558,154 ) ​ ​ ( 48,768 ) ​ ​ 134,726 ​ ​ ( 134,726 ) ​ ​ ( 606,922 ) ​ Equity in earnings of unconsolidated affiliates ​ $ 20,228 ​ ​ — ​ ​ 20,947 ​ ​ ( 20,947 ) ​ ​ 20,228 ​ Investments in unconsolidated affiliates ​ $ 279,805 ​ ​ — ​ ​ 729,823 ​ ​ ( 729,823 ) ​ ​ 279,805 ​ Segment assets ​ $ 13,711,749 ​ ​ 32,241 ​ ​ 5,715,055 ​ ​ ( 5,715,055 ) ​ ​ 13,743,990 ​ Capital expenditures for segment assets ​ $ 263,522 ​ ​ — ​ ​ 55,431 ​ ​ ( 55,431 ) ​ ​ 263,522 ​ ​ 34 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, 2021 ​ ​ ​ ​ ​ ​ ​ Equity Method ​ Elimination of ​ ​ ​ ​ ​ ​ ​ ​ ​ Investment in ​ Intersegment ​ ​ ​ ​ ​ Exploration ​ ​ ​ Antero ​ Transactions and ​ ​ ​ ​ ​ and ​ ​ ​ Midstream ​ Unconsolidated ​ Consolidated ​ ​ Production Marketing Corporation Affiliates Total ​ Sales and revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Third-party ​ $ 324,534 ​ ​ 165,453 ​ ​ 250,455 ​ ​ ( 250,455 ) ​ ​ 489,987 ​ Intersegment ​ ( 619 ) ​ ​ — ​ ​ ( 17,668 ) ​ ​ 17,668 ​ ​ ( 619 ) ​ Total ​ $ 323,915 ​ ​ 165,453 ​ ​ 232,787 ​ ​ ( 232,787 ) ​ ​ 489,368 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Lease operating ​ $ 21,645 ​ ​ — ​ ​ — ​ ​ — ​ ​ 21,645 ​ Gathering, compression, processing, and transportation ​ ​ 641,362 ​ ​ — ​ ​ 39,555 ​ ​ ( 39,555 ) ​ ​ 641,362 ​ Impairment of oil and gas properties ​ ​ 9,303 ​ ​ — ​ ​ — ​ ​ — ​ ​ 9,303 ​ Depletion, depreciation, and amortization ​ ​ 187,330 ​ ​ — ​ ​ 26,619 ​ ​ ( 26,619 ) ​ ​ 187,330 ​ General and administrative ​ ​ 32,177 ​ ​ — ​ ​ 14,251 ​ ​ ( 14,251 ) ​ ​ 32,177 ​ Other ​ ​ 41,507 ​ ​ 198,994 ​ ​ 963 ​ ​ ( 963 ) ​ ​ 240,501 ​ Total ​ ​ 933,324 ​ ​ 198,994 ​ ​ 81,388 ​ ​ ( 81,388 ) ​ ​ 1,132,318 ​ Operating income (loss) ​ $ ( 609,409 ) ​ ​ ( 33,541 ) ​ ​ 151,399 ​ ​ ( 151,399 ) ​ ​ ( 642,950 ) ​ Equity in earnings of unconsolidated affiliates ​ $ 17,477 ​ ​ — ​ ​ 21,515 ​ ​ ( 21,515 ) ​ ​ 17,477 ​ Investments in unconsolidated affiliates ​ $ 237,668 ​ ​ — ​ ​ 707,518 ​ ​ ( 707,518 ) ​ ​ 237,668 ​ Segment assets ​ $ 12,788,108 ​ ​ 60,225 ​ ​ 5,540,742 ​ ​ ( 5,540,742 ) ​ ​ 12,848,333 ​ Capital expenditures for segment assets ​ $ 182,591 ​ ​ — ​ ​ 45,976 ​ ​ ( 45,976 ) ​ ​ 182,591 ​ ​ The operating results and assets of the Company’s reportable segments were as follows for the six months ended June 30, 2020 and 2021 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, 2020 ​ ​ ​ ​ ​ ​ ​ Equity Method ​ Elimination of ​ ​ ​ ​ ​ ​ ​ ​ ​ Investment in ​ Intersegment ​ ​ ​ ​ ​ Exploration ​ ​ ​ Antero ​ Transactions and ​ ​ ​ ​ ​ and ​ ​ ​ Midstream ​ Unconsolidated ​ Consolidated ​ ​ Production Marketing Corporation Affiliates Total ​ Sales and revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Third-party ​ $ 1,690,153 ​ ​ 110,358 ​ ​ — ​ ​ — ​ ​ 1,800,511 ​ Intersegment ​ 1,505 ​ ​ — ​ ​ 463,444 ​ ​ ( 463,444 ) ​ ​ 1,505 ​ Total ​ $ 1,691,658 ​ ​ 110,358 ​ ​ 463,444 ​ ​ ( 463,444 ) ​ ​ 1,802,016 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Lease operating ​ $ 50,386 ​ ​ — ​ ​ — ​ ​ — ​ ​ 50,386 ​ Gathering, compression, processing, and transportation ​ ​ 1,220,469 ​ ​ — ​ ​ 90,795 ​ ​ ( 90,795 ) ​ ​ 1,220,469 ​ Impairment of oil and gas properties ​ ​ 126,570 ​ ​ — ​ ​ — ​ ​ — ​ ​ 126,570 ​ Impairment of midstream assets ​ ​ — ​ ​ — ​ ​ 664,544 ​ ​ ( 664,544 ) ​ ​ — ​ Depletion, depreciation, and amortization ​ ​ 413,712 ​ ​ — ​ ​ 55,088 ​ ​ ( 55,088 ) ​ ​ 413,712 ​ General and administrative ​ ​ 69,624 ​ ​ — ​ ​ 25,959 ​ ​ ( 25,959 ) ​ ​ 69,624 ​ Other ​ ​ 59,418 ​ ​ 206,326 ​ ​ 11,496 ​ ​ ( 11,496 ) ​ ​ 265,744 ​ Total ​ ​ 1,940,179 ​ ​ 206,326 ​ ​ 847,882 ​ ​ ( 847,882 ) ​ ​ 2,146,505 ​ Operating income (loss) ​ $ ( 248,521 ) ​ ​ ( 95,968 ) ​ ​ ( 384,438 ) ​ ​ 384,438 ​ ​ ( 344,489 ) ​ Equity in earnings (loss) of unconsolidated affiliates ​ $ ( 107,827 ) ​ ​ — ​ ​ 40,024 ​ ​ ( 40,024 ) ​ ​ ( 107,827 ) ​ Investments in unconsolidated affiliates ​ $ 279,805 ​ ​ — ​ ​ 729,823 ​ ​ ( 729,823 ) ​ ​ 279,805 ​ Segment assets ​ $ 13,711,749 ​ ​ 32,241 ​ ​ 5,715,055 ​ ​ ( 5,715,055 ) ​ ​ 13,743,990 ​ Capital expenditures for segment assets ​ $ 575,133 ​ ​ — ​ ​ 123,414 ​ ​ ( 123,414 ) ​ ​ 575,133 ​ ​ 35 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, 2021 ​ ​ ​ ​ ​ ​ ​ Equity Method ​ Elimination of ​ ​ ​ ​ ​ ​ ​ ​ ​ Investment in ​ Intersegment ​ ​ ​ ​ ​ Exploration ​ ​ ​ Antero ​ Transactions and ​ ​ ​ ​ ​ and ​ ​ ​ Midstream ​ Unconsolidated ​ Consolidated ​ ​ Production Marketing Corporation Affiliates Total ​ Sales and revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Third-party ​ $ 1,363,302 ​ ​ 330,243 ​ ​ — ​ ​ — ​ ​ 1,693,545 ​ Intersegment ​ 21 ​ ​ — ​ ​ 456,908 ​ ​ ( 456,908 ) ​ ​ 21 ​ Total ​ $ 1,363,323 ​ ​ 330,243 ​ ​ 456,908 ​ ​ ( 456,908 ) ​ ​ 1,693,566 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Lease operating ​ $ 46,192 ​ ​ — ​ ​ — ​ ​ — ​ ​ 46,192 ​ Gathering, compression, processing, and transportation ​ ​ 1,246,439 ​ ​ — ​ ​ 78,869 ​ ​ ( 78,869 ) ​ ​ 1,246,439 ​ Impairment of oil and gas properties ​ ​ 43,365 ​ ​ — ​ ​ — ​ ​ — ​ ​ 43,365 ​ Impairment of midstream assets ​ ​ — ​ ​ — ​ ​ 1,379 ​ ​ ( 1,379 ) ​ ​ — ​ Depletion, depreciation, and amortization ​ ​ 381,356 ​ ​ — ​ ​ 53,469 ​ ​ ( 53,469 ) ​ ​ 381,356 ​ General and administrative ​ ​ 76,251 ​ ​ — ​ ​ 32,181 ​ ​ ( 32,181 ) ​ ​ 76,251 ​ Other ​ ​ 87,302 ​ ​ 361,071 ​ ​ 6,024 ​ ​ ( 6,024 ) ​ ​ 448,373 ​ Total ​ ​ 1,880,905 ​ ​ 361,071 ​ ​ 171,922 ​ ​ ( 171,922 ) ​ ​ 2,241,976 ​ Operating income (loss) ​ $ ( 517,582 ) ​ ​ ( 30,828 ) ​ ​ 284,986 ​ ​ ( 284,986 ) ​ ​ ( 548,410 ) ​ Equity in earnings of unconsolidated affiliates ​ $ 36,171 ​ ​ — ​ ​ 42,259 ​ ​ ( 42,259 ) ​ ​ 36,171 ​ Investments in unconsolidated affiliates ​ $ 237,668 ​ ​ — ​ ​ 707,518 ​ ​ ( 707,518 ) ​ ​ 237,668 ​ Segment assets ​ $ 12,788,108 ​ ​ 60,225 ​ ​ 5,540,742 ​ ​ ( 5,540,742 ) ​ ​ 12,848,333 ​ Capital expenditures for segment assets ​ $ 305,749 ​ ​ — ​ ​ 74,365 ​ ​ ( 74,365 ) ​ ​ 305,749 ​ ​ ​ (17) Subsidiary Guarantors 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 Antero (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 Antero or a restricted subsidiary of Antero, 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 Antero 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 tables present summarized financial information of Antero and its guarantor subsidiaries (in thousands). The Company’s wholly owned subsidiaries are not restricted from making distributions to the Company. ​ 36 Table of Contents ANTERO RESOURCES CORPORATION Notes to Unaudited Condensed Consolidated Financial Statements ​ ​ ​ ​ ​ ​ ​ ​ Balance Sheet ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ June 30, 2021 ​ ​ ​ Parent (Antero) ​ Parent (Antero) ​ ​ and Guarantor Subsidiaries and Guarantor Subsidiaries ​ Accounts receivable, non-guarantor subsidiaries ​ $ — ​ ​ — ​ Accounts receivable, related parties ​ ​ — ​ ​ — ​ Other current assets ​ ​ 543,841 ​ ​ 515,013 ​ Total current assets ​ ​ 543,841 ​ ​ 515,013 ​ Noncurrent assets ​ ​ 11,783,502 ​ ​ 11,536,439 ​ Total assets ​ $ 12,327,343 ​ ​ 12,051,452 ​ ​ ​ ​ ​ ​ ​ ​ ​ Accounts payable, non-guarantor subsidiaries ​ $ — ​ ​ — ​ Accounts payable, related parties ​ ​ 69,860 ​ ​ 85,471 ​ Other current liabilities ​ ​ 906,348 ​ ​ 1,765,747 ​ Total current liabilities ​ ​ 976,208 ​ ​ 1,851,218 ​ Noncurrent liabilities ​ ​ 6,070,388 ​ ​ 5,226,192 ​ Total liabilities ​ $ 7,046,596 ​ ​ 7,077,410 ​ ​ ​ ​ ​ ​ ​ ​ ​ Statement of Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, 2021 ​ ​ ​ ​ ​ ​ Parent (Antero) ​ ​ ​ ​ and Guarantor Subsidiaries ​ Revenues ​ ​ ​ ​ $ 1,679,332 ​ Operating expenses ​ ​ ​ ​ ​ 2,221,153 ​ Loss from operations ​ ​ ​ ​ ​ ( 541,821 ) ​ Net loss and comprehensive loss including noncontrolling interests ​ ​ ​ ​ ​ ( 538,966 ) ​ Net loss and comprehensive loss attributable to Antero Resources Corporation ​ ​ ​ ​ $ ( 538,966 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 37 Table of Contents