| Emergence from Voluntary Reorganization under Chapter 11 of the Bankruptcy Code | Emergence from Voluntary Reorganization under Chapter 11 of the Bankruptcy Code On February 1, 2017, the Predecessor and certain subsidiaries (such subsidiaries, together with the Predecessor, the “Debtors”) filed voluntary petitions for relief (collectively, the “Bankruptcy Petitions” and, the cases commenced thereby, the “Chapter 11 Cases”) under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. The Chapter 11 Cases were administered under the caption “In re Vanguard Natural Resources, LLC, et al.” Prior to the filing of the Bankruptcy Petitions, on February 1, 2017, we entered into a restructuring support agreement (the “Initial RSA”). The Debtors entered into the Initial RSA with: (i) certain holders of the 7.875% Senior Notes due 2020 (the “Senior Notes due 2020”), constituting at the time of signing approximately 52% of such holders (the “Consenting 2020 Noteholders”); (ii) certain holders of the 8.375% Senior Notes due 2019 (the “Senior Notes due 2019,” and together with the Senior Notes due 2020, the “Senior Notes”), constituting at the time of signing approximately 10% of such holders (the “Consenting 2019 Noteholders” and, together with the Consenting 2020 Noteholders, the “Consenting Senior Noteholders”); and (iii) certain holders of the 7.0% Senior Secured Second Lien Notes due 2023 (the “Old Second Lien Notes” or “Senior Notes due 2023”), constituting at the time of signing approximately 92% of such holders (the “Consenting Second Lien Noteholders”). On June 6, 2017, certain lenders under the Predecessor’s Third Amended and Restated Credit Agreement, dated as of September 30, 2011 (as amended from time to time, the “Predecessor Credit Facility”), among them, Citibank, N.A., as administrative agent and Issuing Bank, (such lenders, the “Consenting RBL Lenders” and, together with the Consenting Senior Noteholders and Consenting Second Lien Noteholders, the “Restructuring Support Parties”), became parties to the amended Restructuring Support Agreement dated as of May 23, 2017. On July 18, 2017, the Bankruptcy Court entered the Order Confirming Debtors’ Modified Second Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (the “Confirmation Order”), which approved and confirmed the Debtors’ Modified Second Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (the “Final Plan”). The Final Plan provided for the reorganization of the Debtors as a going concern and significantly reduced the long-term debt and annual interest payments of the Successor. During the pendency of the Chapter 11 Cases, we operated our business as debtors-in-possession in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Debtors satisfied all conditions precedent under the Final Plan and emerged from bankruptcy on August 1, 2017. The Successor reorganized as a Delaware corporation named Vanguard Natural Resources, Inc. on the Effective Date. Pursuant to the Final Plan, each of the Predecessor’s equity securities outstanding immediately before the Effective Date (including any unvested restricted units held by employees or officers of the Debtor, or options and warrants to purchase such securities) have been cancelled and are of no further force or effect as of the Effective Date. Under the Final Plan, the Debtors’ new organizational documents became effective on the Effective Date. The Successor’s new organizational documents authorize the Successor to issue new equity, certain of which was issued to holders of allowed claims pursuant to the Final Plan on the Effective Date. In addition, on the Effective Date, the Successor entered into a registration rights agreement with certain equity holders. As of August 1, 2017, the Successor reserved for issuance 20.1 million outstanding shares of common stock, $0.001 par value. (“Common Stock”). Plan of Reorganization Upon emergence, pursuant to the terms of the Final Plan, the following significant transactions occurred: • The Predecessor transferred all of its membership interests in VNG, a Kentucky limited liability company and the Predecessor’s wholly owned first-tier subsidiary, to the Successor (formerly known as VNR Finance Corp.). VNG directly or indirectly owned all of the other subsidiaries of the Predecessor. As a result of the foregoing and certain other transactions, the Successor is no longer a subsidiary of the Predecessor and now owns all of the former subsidiaries of the Predecessor; • VNG, as borrower, entered into that certain Fourth Amended and Restated Credit Agreement dated as of August 1, 2017 (the “Successor Credit Facility”), by and among VNG as borrower, Citibank, N.A. as administrative agent (the “Administrative Agent”) and Issuing Bank, and the lenders party thereto (the “Lenders”). Pursuant to the Successor Credit Facility, the lenders party thereto agreed to provide VNG with an $850.0 million exit senior secured reserve-based revolving credit facility (the “Revolving Loans”). The initial borrowing base available under the Successor Credit Facility as of the Effective Date was $850.0 million and the aggregate principal amount of Revolving Loans outstanding under the Successor Credit Facility as of the Effective Date was $730.0 million . The Successor Credit Facility also includes an additional $125.0 million senior secured term loan (the “Term Loan”). The holders of claims under the Predecessor Credit Facility received a full recovery, consisting of a cash pay down and their pro rata share of the Successor Credit Facility; The next borrowing base redetermination is scheduled for August of 2018; • The Successor issued approximately $80.7 million aggregate principal amount of new 9.0% Senior Secured Second Lien Notes due 2024 (the “New Notes” or “Senior Notes due 2024”) to certain eligible holders of their outstanding Old Second Lien Notes in full satisfaction of their claim of approximately $80.7 million related to the Old Second Lien Notes held by such holders; • The Predecessor’s Senior Notes were cancelled and the Consenting Senior Noteholders received their pro rata share of 3.38% (subject to dilution) of the Common Stock, in full and final satisfaction of their claims; • The Predecessor completed a rights offering backstopped by certain holders of our Senior Notes (the “Backstop Parties”) which generated $275.0 million of gross proceeds. The rights offering resulted in the issuance of Common Stock, representing approximately 89.92% of outstanding shares of Common Stock, to holders of claims arising under the Senior Notes and to the Backstop Parties; • The Successor entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with certain recipients of shares of its Common Stock distributed on the Effective Date that were parties to the Amended and Restated Backstop Commitment Agreement (including the Backstop Parties and certain of their affiliates and related funds), in accordance with the terms set forth in the Final Plan (collectively, the “Registration Rights Holders”). Pursuant to the Registration Rights Agreement, we agreed to, among other things, file a registration statement with the SEC within 90 days of the Effective Date covering the offer and resale of “Registrable Securities” (as defined in the Registration Rights Agreement); We filed the registration statement on October 30, 2017; • Additional shares of Common Stock, representing eleven percent of outstanding shares of Common Stock on a fully diluted basis, were authorized for issuance under the Vanguard Natural Resources, Inc. 2017 Management Incentive Plan (the “MIP”); • All outstanding Preferred Units (defined below) issued and outstanding immediately prior to the Effective Date were cancelled and the holders thereof received their pro rata shares of (i) 3% of outstanding shares of Common Stock and (ii) Preferred Unit Warrants (as defined below), in full and final satisfaction of their interests; • All common equity of the Predecessor issued and outstanding immediately prior to the Effective Date were cancelled and the holders of the common equity received Common Unit Warrants (as defined below), in full and final satisfaction of their interests; • The Successor entered into a warrant agreement (the “Warrant Agreement”) with American Stock Transfer & Trust Company, LLC, as warrant agent, pursuant to which the Successor issued (i) to electing holders of the Predecessor’s (A) 7.875% Series A Cumulative Redeemable Perpetual Preferred Units (“Series A Preferred Units”), (B) 7.625% Series B Cumulative Redeemable Perpetual Preferred Units (“Series B Preferred Units”), and (C) 7.75% Series C Cumulative Redeemable Perpetual Preferred Units (“Series C Preferred Units” and, together with the Series A Preferred Units and Series B Preferred Units, the “Preferred Units”), three and a half year warrants (the “Preferred Unit Warrants”), which will be exercisable to purchase up to 621,649 shares of the Common Stock as of the Effective Date; and (ii) to electing holders of the Predecessor’s common units representing limited liability company interests, three and a half year warrants (the “Common Unit Warrants” and, together with the Preferred Unit Warrants, the “Warrants”) which will be exercisable to purchase up to 640,876 shares of the Common Stock as of the Effective Date. The expiration date of the Warrants will be February 1, 2021. The strike price for the Preferred Unit Warrants is $44.25 , and the strike price for the Common Unit Warrants is $61.45 ; • By operation of the Final Plan and the Confirmation Order, the terms of the Predecessor’s board of directors expired as of the Effective Date. Our current board of directors (the “Board”) consists of seven members, including our and our Predecessor’s Chief Executive Officer. Our Chief Financial Officer was initially appointed as a director upon emergence and became our Chief Financial Officer as well, following the resignation of our Predecessor’s Chief Financial Officer; • Certain other priority or convenience class claims were paid in full in cash, reinstated or otherwise treated in a manner acceptable to the creditor claimholders; and • On the Effective Date, the Successor reserved for issuance 20,100,000 shares of Common Stock. Each of the foregoing percentages of equity in the Successor were as of August 1, 2017 and are subject to dilution from the exercise of the Warrants described above, the MIP discussed further in Note 10, “Stockholders’ Equity (Members’ Deficit),” and other future issuances of equity interests. See Note 5, “Debt,” and Note 10, “Stockholders’ Equity (Members’ Deficit),” for further information regarding the Predecessor and Successor’s debt and equity instruments. Listing on the OTCQX Market As a result of cancellation of the Predecessor’s units on the Effective Date, the units ceased to trade on the OTC Markets Group Inc.’s Pink marketplace. In September 2017, the Successor’s common stock was approved for trading on the OTCQX market under the symbol “VNRR.” Fresh-Start Accounting Upon the Company’s emergence from chapter 11 bankruptcy, the Company qualified for and applied fresh-start accounting in accordance with the provisions set forth in ASC 852 as (i) the Reorganization Value (as defined below) of the Company’s assets immediately prior to the date of confirmation was less than the post-petition liabilities and allowed claims, and (ii) the holders of the existing voting shares of the Predecessor entity received less than 50% of the voting shares of the emerging entity. Refer to Note 2 , “Emergence from Voluntary Reorganization under Chapter 11 of the Bankruptcy Code” for the terms of the Final Plan. Fresh-start accounting requires the Company to present its assets, liabilities, and equity as if it were a new entity upon emergence from bankruptcy. The new entity is referred to as “Successor” or “Successor Company.” However, the Company will continue to present financial information for any periods before application of fresh-start accounting for the Predecessor Company. The Predecessor and Successor companies lack comparability, as required in ASC Topic 205, Presentation of Financial Statements (ASC 205). ASC 205 states financial statements are required to be presented comparably from year to year, with any exceptions to comparability clearly disclosed. Therefore, “black-line” financial statements are presented to distinguish between the Predecessor and Successor companies. Adopting fresh-start accounting results in a new financial reporting entity with no beginning retained earnings or deficit as of the fresh-start reporting date. Upon the application of fresh-start accounting, the Company allocated the fair value of the Successor Company’s total assets (the “Reorganization Value”) to its individual assets based on their estimated fair values. The Reorganization Value is intended to represent the approximate amount a willing buyer would value the Company's assets immediately after the reorganization. Reorganization Value is derived from an estimate of Enterprise Value, or the fair value of the Company’s long-term debt and stockholders’ equity. The estimated Enterprise Value at the Effective Date was $1.425 billion as established in the Plan and approved by the bankruptcy court. The Enterprise Value was derived from an independent valuation using an asset based methodology of proved reserves, undeveloped acreage, and other financial information, considerations and projections, applying a combination of the income, cost and market approaches as of the Convenience Date. The Company’s principal assets are its oil and natural gas properties. Significant inputs used to determine the fair values of properties include estimates of: (i) reserves; (ii) future operating and development costs; (iii) future commodity prices; and (iv) a market-based weighted average cost of capital rate. These inputs require significant judgments and estimates by the Company’s management at the time of the valuation and are the most sensitive and subject to change. For purposes of estimating the fair value of the Company’s proved, probable and possible reserves, an income approach was used which estimated fair value based on the anticipated cash flows associated with the Company’s reserves, risked by reserve category and discounted using a weighted average cost of capital rate of 10.0% . The proved reserve locations were limited to wells expected to be drilled in the Company’s five -year development plan. Weighted average commodity prices utilized in the determination of the fair value of oil and natural gas properties were $67.20 per barrel of oil, $3.69 per million British thermal units (MMBtu) of natural gas and $24.59 per barrel of oil equivalent of natural gas liquids, after adjustment for transportation fees, quality differentials and regional price differentials. Base pricing was derived from an average of forward strip prices and analysts’ estimated prices. In estimating the fair value of the Company's unproved acreage that was not included in the valuation of probable and possible reserves, a market approach was used in which a review of recent transactions involving properties in the same geographical location indicated the fair value of the Company's unproved acreage from a market participant perspective. See further discussion below under “Fresh-Start Adjustments” for the specific assumptions used in the valuation of the Company's various other assets. Although the Company believes the assumptions and estimates used to develop Enterprise Value and Reorganization Value are reasonable and appropriate, different assumptions and estimates could materially impact the analysis and resulting conclusions. The assumptions used in estimating these values are inherently uncertain and require judgment. The following table reconciles the Company’s Enterprise Value to the estimated fair value of the Successor’s common stock as of July 31, 2017 (in thousands): July 31, 2017 Enterprise Value $ 1,425,000 Plus: Cash and cash equivalents 27,610 Less: Debt (943,392 ) Total stockholders' equity 509,217 Less: Fair value of warrants (11,734 ) Less: Fair value of non-controlling interest (2,274 ) Fair Value of Successor common stock $ 495,209 The following table reconciles the Company’s Debt as of July 31, 2017 (in thousands): July 31, 2017 Successor Credit Facility $ 730,000 Successor Term Loan 125,000 Senior Notes due 2024 80,722 Lease Financing Obligation, net of current portion 12,464 Current portion of Lease Financing Obligation 4,647 Total Fair value of debt 952,833 Successor Credit Facility fees and debt issuance costs (9,441 ) Total Debt $ 943,392 The following table reconciles the Company’s Enterprise Value to its Reorganization Value as of July 31, 2017 (in thousands): July 31, 2017 Enterprise Value $ 1,425,000 Plus: Cash and cash equivalents 27,610 Plus: Current liabilities, excluding current portion of Lease Financing Obligation 147,552 Plus: Other noncurrent liabilities 15,589 Plus: Long-term asset retirement obligation 136,769 Reorganization Value of Successor assets $ 1,752,520 Condensed Consolidated Balance Sheet The following illustrates the effects on the Company’s unaudited condensed consolidated balance sheet due to the reorganization and fresh-start accounting adjustments. The explanatory notes following the table below provide further details on the adjustments, including the Company’s assumptions and methods used to determine fair value for its assets and liabilities. As of July 31, 2017 (in thousands) Predecessor Reorganization Adjustments (1) Fresh-Start Adjustments Successor Assets Current assets Cash and cash equivalents $ 68,933 $ (41,323 ) (2) $ — $ 27,610 Trade accounts receivable, net 64,253 (155 ) (3) (8,231 ) (15) 55,867 Derivative assets 3,236 — — 3,236 Restricted cash 102,556 (74,101 ) (4) — 28,455 Other current assets 4,430 (394 ) (5) 416 (16) 4,452 Total current assets 243,408 (115,973 ) (7,815 ) 119,620 Oil and natural gas properties, at cost 4,635,867 — (3,029,173 ) (17) 1,606,694 Accumulated depletion (3,916,889 ) — 3,916,889 (17) — Oil and natural gas properties 718,978 — 887,716 1,606,694 Other assets Goodwill 253,370 — (253,370 ) (18) — Other assets 44,315 — (18,109 ) (19)(20) 26,206 Total assets $ 1,260,071 $ (115,973 ) $ 608,422 $ 1,752,520 Liabilities and equity (deficit) Current liabilities Accounts payable: Trade $ 8,444 $ 9,978 (6) $ — $ 18,422 Accrued liabilities: Lease operating 13,199 — — 13,199 Development capital 8,928 — — 8,928 Interest 8,478 (8,478 ) (7) — — Production and other taxes 23,494 — — 23,494 Other 20,933 12,297 (8) — 33,230 Derivative liabilities 12,987 — — 12,987 Oil and natural gas revenue payable 36,087 — (7,808 ) (15) 28,279 Long-term debt classified as current 1,300,971 (1,300,971 ) (9) — — Other 14,246 (382 ) (10) (203 ) (21) 13,661 Total current liabilities 1,447,767 (1,287,556 ) (8,011 ) 152,200 Long-term debt, net of current portion 12,647 926,281 (11) (183 ) (22) 938,745 Derivative liabilities 15,143 — — 15,143 Asset retirement obligations, net of current portion 260,089 — (123,320 ) (23) 136,769 Other long-term liabilities 37,683 — (37,237 ) (24) 446 Total liabilities not subject to compromise 1,773,329 (361,275 ) (168,751 ) 1,243,303 Liabilities subject to compromise 479,911 (479,911 ) (12) — — Total Liabilities 2,253,240 (841,186 ) (168,751 ) 1,243,303 As of July 31, 2017 Predecessor Reorganization Adjustments (1) Fresh-Start Adjustments Successor Stockholders’ equity/Members’ (deficit) (Note 9) Preferred units (Predecessor) 335,444 (335,444 ) (13) — — Common units (Predecessor) (1,342,849 ) 763,217 (13) 579,632 (25) — Class B units (Predecessor) 7,615 (7,615 ) (13) — — Common stock (Successor) — 20 (14) — 20 Additional paid-in capital (Successor) — 305,035 (14) 201,888 (25) 506,923 Total VNR stockholders' equity/ members’ (deficit) (999,790 ) 725,213 781,520 506,943 Non-controlling interest in subsidiary 6,621 — (4,347 ) (26) 2,274 Total stockholders' equity/members’ (deficit) (993,169 ) 725,213 777,173 509,217 Total liabilities and equity (deficit) $ 1,260,071 $ (115,973 ) $ 608,422 $ 1,752,520 Reorganization Adjustments: 1) Represent amounts recorded as of the Convenience Date for the implementation of the Final Plan, including, among other items, settlement of the Predecessor’s liabilities subject to compromise, repayment of certain of the Predecessor’s debt, cancellation of the Predecessor’s equity, issuances of the Successor’s common stock and equity warrants, proceeds received from the Successor’s rights offering and issuance of the Successor’s debt. 2) Changes in cash and cash equivalents included the following (in thousands): Proceeds from equity investment from holders of Old Second Lien Notes $ 19,250 Proceeds from rights offering 255,750 Borrowings under the Successor's Term Loan 125,000 Removal of restriction on cash balance 102,556 Payment of holders of claims under the Predecessor Credit Facility (500,266 ) Payment of interest and fees under the Predecessor Credit Facility (3,390 ) Payment of Successor Credit Facility fees (9,300 ) Payment of professional fees (2,468 ) Funding of the general unsecured claims cash distribution pools (6,750 ) Funding of the professional fees escrow account (21,705 ) Changes in cash and cash equivalents $ (41,323 ) 3) Reflects the write-off of lease incentive costs due to the rejection of the related lease contract. 4) Net change to restricted cash includes the following: Removal of restriction on cash balance $ (102,556 ) Funding of the general unsecured claims cash distribution pools 6,750 Funding of the professional fees escrow account 21,705 $ (74,101 ) 5) Primarily reflects the write-off of the Predecessor’s equity offering costs. 6) Reflects reinstatement of payables for the general unsecured claims and trade claims cash distribution pool. 7) Reflects payment of accrued interest related to Predecessor Credit Facility and Predecessor debtor-in-possession credit facility of $3.4 million and the capitalization of approximately $5.1 million accrued interest on the Old Second Lien Notes into the principal amount of the Senior Notes due 2024. 8) Net increase in other accrued expenses reflect (in thousands): Recognition of payables for the professional fees escrow account $ 12,627 Write-off of accrued non cash compensation related to Phantom Units granted (330 ) Net increase in accounts payable and accrued expenses $ 12,297 9) Reflects the repayment of outstanding borrowings under the Predecessor Credit Facility of approximately $500.3 million and the conversion of the remaining outstanding debt to Successor Credit Facility and the Senior Notes due 2024 to Long-Term Debt, net of the write-off of deferred financing fees. 10) Reflects the write-off of deferred rent due to the rejection of the related lease contract. 11) Reflects $855.0 million of outstanding borrowings under the Successor Credit Facility, which includes a $730.0 million revolving loan and a $125.0 million Term Loan. The adjustment also reflects the issuance of Senior Notes due 2024 of $80.7 million . The amounts are presented net of capitalized deferred financing fees related to each debt. 12) Settlement of Liabilities subject to compromise and the resulting net gain were determined as follows (in thousands): Accounts payable and accrued expenses $ 36,224 Accrued interest payable 10,737 Debt 432,950 Total liabilities subject to compromise 479,911 Reinstatement of liability for the general unsecured claims (4,978 ) Reinstatement of liability for settlement of an unsecured claim (5,000 ) Issuance of common shares to holders of general unsecured claims (1,089 ) Issuance of common shares to holders of Senior Notes claims (16,715 ) Gain on settlement of liabilities subject to compromise $ 452,129 13) Net change in Predecessor common units reflects (in thousands): Recognition of gain on settlement of liabilities subject to compromise $ 452,129 Cancellation of Predecessor Preferred units 335,444 Cancellation of Predecessor Class B units 7,615 Write-off of deferred financing costs and debt discounts (4,917 ) Recognition of professional and success fees (14,968 ) Fair value of warrants issued to Predecessor unitholders (11,734 ) Fair value of shares issued to Predecessor unitholders (517 ) Terminated contracts 165 Net change in Predecessor Common units $ 763,217 14) Net change in Successor equity reflects net increase in capital accounts as follows (in thousands): Issuance of common stock to general unsecured creditors $ 1,089 Issuance of common stock to holders of Senior Notes claims 16,715 Issuance of common stock to Predecessor preferred unitholders 517 Issuance of common stock for the second lien equity investment 19,250 Issuance of common stock pursuant to the rights offering 255,750 Issuance of warrants 11,734 Change in additional paid-in capital 305,055 Par value of common stock (20 ) Net increase in capital accounts $ 305,035 See Note 10 , “Stockholders’ Equity (Members’ Deficit)” for additional information on the issuances of the Successor’s equity. Fresh-Start Adjustments: 15) Reflects a change in accounting policy from the entitlements method for natural gas production imbalances in accordance with the adoption of ASC 606. 16) Reflects fair value adjustment for oil inventory. 17) Reflects the adjustments to oil and natural gas properties, based on the methodology discussed above, and the elimination of accumulated depletion. The following table summarizes the components of oil and natural gas properties as of the Convenience Date (in thousands): Successor Predecessor Fair Value Historical Book Value Proved properties $ 1,511,083 $ 4,635,867 Unproved properties 95,611 — 1,606,694 4,635,867 Less: accumulated depletion and amortization — (3,916,889 ) $ 1,606,694 $ 718,978 18) Reflects the write-off of Predecessor goodwill. 19) Reflects a decrease of other property and equipment and the elimination of accumulated depreciation. The following table summarizes the components of other property and equipment as of the Convenience Date (in thousands): Successor Predecessor Fair Value Historical Book Value Gas gathering assets $ 4,196 $ 19,942 Office equipment and furniture 574 5,847 Buildings and leasehold improvements 57 836 Vehicles 1,311 1,549 6,138 28,174 Less: accumulated depreciation — (13,657 ) $ 6,138 $ 14,517 In estimating the fair value of other property and equipment, the Company used a combination of cost and market approaches. A cost approach was used to value the Company’s other operating assets, based on current replacement costs of the assets less depreciation based on the estimated economic useful lives of the assets and age of the assets. A market approach was used to value the Company’s vehicles, using recent transactions of similar assets to determine the fair value from a market participant perspective. 20) Reflects an adjustment for the intangible asset related to the Company’s nickel gas contract of $5.6 million and the write-off of deferred tax asset of $4.1 million . 21) Reflects the adjustment of current portion of financing obligation to fair value and write-off of deferred rent. 22) Reflects the adjustment of long-term portion of financing obligation to fair value. 23) Primarily reflects the fair value adjustment of asset retirement obligations (“ARO”) to fair value of approximately $145.2 million , of which $136.8 million is reflected as long-term ARO and $8.4 million of current ARO shown in other current liabilities. The fair value of asset retirement obligations was estimated using valuation techniques that convert future cash flows to a single discounted amount. Significant inputs to the valuation include estimates of: (i) plug and abandon costs per well based on existing regulatory requirements; (ii) remaining life per well; (iii) future inflation factors; and (iv) a credit-adjusted risk-free interest rate. Refer to Note 8, “ Asset Retirement Obligations” for further details of the Company's asset retirement obligations. 24) Reflects the write-off of deferred tax liabilities. 25) Reflects the cumulative impact of the fresh-start accounting adjustments discussed above and the elimination of Common units (Predecessor). 26) Reflects the fair value adjustment to the Potato Hills gas gathering assets on the non-controlling interest. Reorganization Items Reorganization items represent (i) expenses or income incurred subsequent to the Petition Date as a direct result of the Final Plan, (ii) gains or losses from liabilities settled, and (iii) fresh-start accounting adjustments and are recorded in “Reorganization items” in the Company’s unaudited consolidated statements of operations. The following table summarizes the net reorganization items (in thousands): Predecessor Seven Months Ended July 31, 2017 Gain on settlement of Liabilities subject to compromise $ 452,129 Fresh-start accounting adjustments 781,520 Issuance of common shares and warrants (214,140 ) Legal and other professional fees (58,482 ) Recognition of additional unsecured claims (31,346 ) Write-off of deferred financing costs and debt discounts (21,361 ) Terminated contracts 165 Reorganization items $ 908,485 Reorganization costs incurred subsequent to the Emergence Date of $0.9 million are recorded in the selling, general and administrative expenses line item in the Company’s unaudited consolidated statements of operations for the two months ended September 30, 2017. |
