Condensed Consolidating Financial Information | 9 Months Ended |
Sep. 30, 2014 |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ' |
Condensed Consolidating Financial Information | ' |
Condensed Consolidating Financial Information |
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In October 2011, we issued and sold the 2019 Notes with an aggregate principal amount of $650.0 million (see Note 4). In connection with the spin-off, COO transferred all of its assets, operations and liabilities, including the 2019 Notes, to SSO, which has been reflected retrospectively in the condensed consolidating financial information. Pursuant to the Indenture governing the 2019 Notes, such notes are fully and unconditionally and jointly and severally guaranteed by SSO’s parent, SSE, and all of SSO’s material subsidiaries, other than SSF, which is a co-issuer of the 2019 Notes. Each of the subsidiary guarantors is 100% owned by SSO and there are no material subsidiaries of SSO other than the subsidiary guarantors. SSF and Western Wisconsin Sand Company, LLC are minor non-guarantor subsidiaries whose condensed consolidating financial information is included with the subsidiary guarantors. SSE and SSO have independent assets and operations. There are no significant restrictions on the ability of SSO or any subsidiary guarantor to obtain funds from its subsidiaries by dividend or loan. |
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Set forth below are condensed consolidating financial statements for SSE (“Parent”) and SSO (“Subsidiary Issuer”) on a stand-alone, unconsolidated basis, and its combined guarantor subsidiaries as of September 30, 2014 and December 31, 2013 and for the three and nine months ended September 30, 2014 and 2013. The financial information may not necessarily be indicative of results of operations, cash flows or financial position had the subsidiaries operated as independent entities. |
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CONDENSED CONSOLIDATING BALANCE SHEET |
AS OF SEPTEMBER 30, 2014 |
(in thousands) |
|
| | | | | | | | | | | | | | | | | | | |
| Parent | | Subsidiary Issuer | | Guarantor | | Eliminations | | Consolidated |
Subsidiaries |
Assets: | | | | | | | | | |
Current Assets: | | | | | | | | | |
Cash | $ | 89 | | | $ | 5,159 | | | $ | 85 | | | $ | — | | | $ | 5,333 | |
|
Accounts receivable | — | | | 747 | | | 497,695 | | | (735 | ) | | 497,707 | |
|
Inventory | — | | | — | | | 30,457 | | | — | | | 30,457 | |
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Deferred income tax asset | — | | | 2,091 | | | 6,029 | | | (208 | ) | | 7,912 | |
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Prepaid expenses and other | — | | | 9,606 | | | 12,782 | | | — | | | 22,388 | |
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Total Current Assets | 89 | | | 17,603 | | | 547,048 | | | (943 | ) | | 563,797 | |
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Property and Equipment: | | | | | | | | | |
Property and equipment, at cost | — | | | 12,454 | | | 2,678,032 | | | — | | | 2,690,486 | |
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Less: accumulated depreciation | — | | | (508 | ) | | (957,743 | ) | | — | | | (958,251 | ) |
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Property and equipment held for sale, net | — | | | — | | | 6,000 | | | — | | | 6,000 | |
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Total Property and Equipment, Net | — | | | 11,946 | | | 1,726,289 | | | — | | | 1,738,235 | |
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Other Assets: | | | | | | | | | |
Equity method investment | — | | | — | | | 7,684 | | | — | | | 7,684 | |
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Goodwill | — | | | — | | | 27,434 | | | — | | | 27,434 | |
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Intangible assets, net | — | | | — | | | 5,575 | | | — | | | 5,575 | |
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Deferred financing costs, net | 7,227 | | | 18,777 | | | — | | | — | | | 26,004 | |
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Other long-term assets | 5,649 | | | 20,379 | | | 5,630 | | | (24,873 | ) | | 6,785 | |
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Investments in subsidiaries and intercompany advances | 788,143 | | | 1,858,614 | | | — | | | (2,646,757 | ) | | — | |
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Total Other Assets | 801,019 | | | 1,897,770 | | | 46,323 | | | (2,671,630 | ) | | 73,482 | |
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Total Assets | $ | 801,108 | | | $ | 1,927,319 | | | $ | 2,319,660 | | | $ | (2,672,573 | ) | | $ | 2,375,514 | |
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Liabilities and Equity: | | | | | | | | | |
Current Liabilities: | | | | | | | | | |
Accounts payable | $ | — | | | $ | 8,323 | | | $ | 31,337 | | | $ | (735 | ) | | $ | 38,925 | |
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Current portion of long-term debt | — | | | 4,000 | | | — | | | — | | | 4,000 | |
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Other current liabilities | 10,514 | | | 37,098 | | | 249,646 | | | (208 | ) | | 297,050 | |
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Total Current Liabilities | 10,514 | | | 49,421 | | | 280,983 | | | (943 | ) | | 339,975 | |
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Long-Term Liabilities: | | | | | | | | | |
Deferred income tax liabilities | — | | | — | | | 178,871 | | | (24,873 | ) | | 153,998 | |
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Long-term debt, excluding current maturities | 500,000 | | | 1,088,600 | | | — | | | — | | | 1,588,600 | |
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Other long-term liabilities | — | | | 1,155 | | | 1,192 | | | — | | | 2,347 | |
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Total Long-Term Liabilities | 500,000 | | | 1,089,755 | | | 180,063 | | | (24,873 | ) | | 1,744,945 | |
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Total Equity | 290,594 | | | 788,143 | | | 1,858,614 | | | (2,646,757 | ) | | 290,594 | |
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Total Liabilities and Stockholders’/Owner’s Equity | $ | 801,108 | | | $ | 1,927,319 | | | $ | 2,319,660 | | | $ | (2,672,573 | ) | | $ | 2,375,514 | |
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CONDENSED CONSOLIDATING BALANCE SHEET |
AS OF DECEMBER 31, 2013 |
(in thousands) |
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| | | | | | | | | | | | | | | | | | | |
| Parent | | Subsidiary Issuer | | Guarantor | | Eliminations | | Consolidated |
Subsidiaries |
Assets: | | | | | | | | | |
Current Assets: | | | | | | | | | |
Cash | $ | — | | | $ | 1,615 | | | $ | 63 | | | $ | — | | | $ | 1,678 | |
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Accounts receivable | — | | | 1,142 | | | 374,297 | | | — | | | 375,439 | |
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Inventory | — | | | — | | | 45,035 | | | — | | | 45,035 | |
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Deferred income tax asset | — | | | — | | | 5,318 | | | — | | | 5,318 | |
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Prepaid expenses and other | — | | | 851 | | | 19,450 | | | — | | | 20,301 | |
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Total Current Assets | — | | | 3,608 | | | 444,163 | | | — | | | 447,771 | |
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Property and Equipment: | | | | | | | | | |
Property and equipment, at cost | — | | | 3,103 | | | 2,238,247 | | | — | | | 2,241,350 | |
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Less: accumulated depreciation | — | | | (133 | ) | | (773,149 | ) | | — | | | (773,282 | ) |
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Property and equipment held for sale, net | — | | | — | | | 29,408 | | | — | | | 29,408 | |
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Total Property and Equipment, Net | — | | | 2,970 | | | 1,494,506 | | | — | | | 1,497,476 | |
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Other Assets: | | | | | | | | | |
Equity method investment | — | | | — | | | 13,236 | | | — | | | 13,236 | |
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Goodwill | — | | | — | | | 42,447 | | | — | | | 42,447 | |
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Intangible assets, net | — | | | — | | | 7,429 | | | — | | | 7,429 | |
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Deferred financing costs, net | — | | | 14,080 | | | — | | | — | | | 14,080 | |
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Other long-term assets | — | | | 54,958 | | | 4,454 | | | (54,958 | ) | | 4,454 | |
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Investments in subsidiaries and intercompany advances | 547,192 | | | 1,542,365 | | | — | | | (2,089,557 | ) | | — | |
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Total Other Assets | 547,192 | | | 1,611,403 | | | 67,566 | | | (2,144,515 | ) | | 81,646 | |
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Total Assets | $ | 547,192 | | | $ | 1,617,981 | | | $ | 2,006,235 | | | $ | (2,144,515 | ) | | $ | 2,026,893 | |
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Liabilities and Equity: | | | | | | | | | |
Current Liabilities: | | | | | | | | | |
Accounts payable | $ | — | | | $ | 2,889 | | | $ | 61,977 | | | $ | — | | | $ | 64,866 | |
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Other current liabilities | — | | | 11,669 | | | 198,454 | | | — | | | 210,123 | |
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Total Current Liabilities | — | | | 14,558 | | | 260,431 | | | — | | | 274,989 | |
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Long-Term Liabilities: | | | | | | | | | |
Deferred income tax liabilities | — | | | — | | | 200,705 | | | (54,958 | ) | | 145,747 | |
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Long-term debt | — | | | 1,055,000 | | | — | | | — | | | 1,055,000 | |
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Other long-term liabilities | — | | | 1,231 | | | 2,734 | | | — | | | 3,965 | |
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Total Long-Term Liabilities | — | | | 1,056,231 | | | 203,439 | | | (54,958 | ) | | 1,204,712 | |
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Total Equity | 547,192 | | | 547,192 | | | 1,542,365 | | | (2,089,557 | ) | | 547,192 | |
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Total Liabilities and Equity | $ | 547,192 | | | $ | 1,617,981 | | | $ | 2,006,235 | | | $ | (2,144,515 | ) | | $ | 2,026,893 | |
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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS |
THREE MONTHS ENDED SEPTEMBER 30, 2014 |
(in thousands) |
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| | | | | | | | | | | | | | | | | | | |
| Parent | | Subsidiary Issuer | | Guarantor | | Eliminations | | Consolidated |
Subsidiaries |
Revenues: | | | | | | | | | |
Revenues | $ | — | | | $ | 1,264 | | | $ | 526,754 | | | $ | (1,245 | ) | | $ | 526,773 | |
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Operating Expenses: | | | — | | | — | | | — | | | |
|
Operating costs | — | | | 1,037 | | | 392,344 | | | (1,243 | ) | | 392,138 | |
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Depreciation and amortization | — | | | 86 | | | 73,769 | | | — | | | 73,855 | |
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General and administrative | 148 | | | 32,149 | | | 426 | | | — | | | 32,723 | |
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Net losses on sales of property and equipment | — | | | 6 | | | 448 | | | — | | | 454 | |
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Impairments and other | — | | | — | | | 7,751 | | | — | | | 7,751 | |
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Total Operating Expenses | 148 | | | 33,278 | | | 474,738 | | | (1,243 | ) | | 506,921 | |
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Operating (Loss) Income | (148 | ) | | (32,014 | ) | | 52,016 | | | (2 | ) | | 19,852 | |
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Other (Expense) Income: | | | | | | | | | |
Interest expense | (8,358 | ) | | (15,248 | ) | | — | | | — | | | (23,606 | ) |
|
Loss and impairment from equity investees | — | | | — | | | (347 | ) | | — | | | (347 | ) |
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Other (expense) income | — | | | (284 | ) | | 150 | | | — | | | (134 | ) |
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Equity in net earnings (loss) of subsidiary | 2,669 | | | 32,387 | | | — | | | (35,056 | ) | | — | |
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Total Other (Expense) Income | (5,689 | ) | | 16,855 | | | (197 | ) | | (35,056 | ) | | (24,087 | ) |
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(Loss) Income Before Income Taxes | (5,837 | ) | | (15,159 | ) | | 51,819 | | | (35,058 | ) | | (4,235 | ) |
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Income Tax (Benefit) Expense | (4,067 | ) | | (17,829 | ) | | 19,432 | | | (1 | ) | | (2,465 | ) |
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Net (Loss) Income | $ | (1,770 | ) | | $ | 2,670 | | | $ | 32,387 | | | $ | (35,057 | ) | | $ | (1,770 | ) |
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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS |
THREE MONTHS ENDED SEPTEMBER 30, 2013 |
(in thousands) |
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|
| | | | | | | | | | | | | | | | | | | |
| Parent | | Subsidiary Issuer | | Guarantor | | Eliminations | | Consolidated |
Subsidiaries |
Revenues: | | | | | | | | | |
Revenues | $ | — | | | $ | 2,176 | | | $ | 550,338 | | | $ | (2,111 | ) | | $ | 550,403 | |
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Operating Expenses: | | | | | | | | | |
Operating costs | — | | | 2,407 | | | 451,378 | | | (2,253 | ) | | 451,532 | |
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Depreciation and amortization | — | | | 9 | | | 72,974 | | | — | | | 72,983 | |
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General and administrative | — | | | 4,728 | | | 14,135 | | | — | | | 18,863 | |
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Net gains on sales of property and equipment | — | | | — | | | (265 | ) | | — | | | (265 | ) |
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Impairments | — | | | — | | | 23,626 | | | — | | | 23,626 | |
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Total Operating Expenses | — | | | 7,144 | | | 561,848 | | | (2,253 | ) | | 566,739 | |
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Operating (Loss) Income | — | | | (4,968 | ) | | (11,510 | ) | | 142 | | | (16,336 | ) |
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Other (Expense) Income: | | | | | | | | | |
Interest expense | — | | | (14,028 | ) | | — | | | — | | | (14,028 | ) |
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Income from equity investees | — | | | — | | | 262 | | | — | | | 262 | |
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Other income | — | | | — | | | 123 | | | — | | | 123 | |
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Equity in net loss of subsidiary | (18,571 | ) | | (5,643 | ) | | — | | | 24,214 | | | — | |
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Total Other (Expense) Income | (18,571 | ) | | (19,671 | ) | | 385 | | | 24,214 | | | (13,643 | ) |
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Loss Before Income Taxes | (18,571 | ) | | (24,639 | ) | | (11,125 | ) | | 24,356 | | | (29,979 | ) |
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Income Tax Expense (Benefit) | 113 | | | (5,955 | ) | | (5,369 | ) | | (84 | ) | | (11,295 | ) |
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Net Loss | $ | (18,684 | ) | | $ | (18,684 | ) | | $ | (5,756 | ) | | $ | 24,440 | | | $ | (18,684 | ) |
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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS |
NINE MONTHS ENDED SEPTEMBER 30, 2014 |
(in thousands) |
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| | | | | | | | | | | | | | | | | | | |
| Parent | | Subsidiary Issuer | | Guarantor | | Eliminations | | Consolidated |
Subsidiaries |
Revenues: | | | | | | | | | |
Revenues | $ | — | | | $ | 3,527 | | | $ | 1,585,885 | | | $ | (3,464 | ) | | $ | 1,585,948 | |
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Operating Expenses: | | | | | | | | | |
Operating costs | — | | | 4,644 | | | 1,208,359 | | | (4,691 | ) | | 1,208,312 | |
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Depreciation and amortization | — | | | 152 | | | 217,997 | | | — | | | 218,149 | |
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General and administrative | 148 | | | 44,366 | | | 28,463 | | | — | | | 72,977 | |
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Net gains (losses) on sales of property and equipment | — | | | 6 | | | (7,538 | ) | | — | | | (7,532 | ) |
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Impairments and other | — | | | — | | | 30,731 | | | — | | | 30,731 | |
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Total Operating Expenses | 148 | | | 49,168 | | | 1,478,012 | | | (4,691 | ) | | 1,522,637 | |
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Operating (Loss) Income | (148 | ) | | (45,641 | ) | | 107,873 | | | 1,227 | | | 63,311 | |
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Other (Expense) Income: | | | | | | | | | |
Interest expense | (8,810 | ) | | (47,103 | ) | | — | | | — | | | (55,913 | ) |
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Loss and impairment from equity investees | — | | | — | | | (5,764 | ) | | — | | | (5,764 | ) |
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Other (expense) income | — | | | (136 | ) | | 759 | | | — | | | 623 | |
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Equity in net earnings of subsidiary | 6,104 | | | 63,374 | | | — | | | (69,478 | ) | | — | |
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Total Other (Expense) Income | (2,706 | ) | | 16,135 | | | (5,005 | ) | | (69,478 | ) | | (61,054 | ) |
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(Loss) Income Before Income Taxes | (2,854 | ) | | (29,506 | ) | | 102,868 | | | (68,251 | ) | | 2,257 | |
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Income Tax (Benefit) Expense | (4,238 | ) | | (34,849 | ) | | 39,494 | | | 466 | | | 873 | |
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Net Income | $ | 1,384 | | | $ | 5,343 | | | $ | 63,374 | | | $ | (68,717 | ) | | $ | 1,384 | |
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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS |
NINE MONTHS ENDED SEPTEMBER 30, 2013 |
(in thousands) |
|
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| | | | | | | | | | | | | | | | | | | |
| Parent | | Subsidiary Issuer | | Guarantor | | Eliminations | | Consolidated |
Subsidiaries |
Revenues: | | | | | | | | | |
Revenues | $ | — | | | $ | 6,191 | | | $ | 1,677,171 | | | $ | (6,008 | ) | | $ | 1,677,354 | |
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Operating Expenses: | | | | | | | | | |
Operating costs | — | | | 7,355 | | | 1,323,604 | | | (6,995 | ) | | 1,323,964 | |
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Depreciation and amortization | — | | | 16 | | | 215,568 | | | — | | | 215,584 | |
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General and administrative | — | | | 14,022 | | | 46,254 | | | — | | | 60,276 | |
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Net gains on sales of property and equipment | — | | | — | | | (1,636 | ) | | — | | | (1,636 | ) |
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Impairments and other | — | | | — | | | 30,367 | | | — | | | 30,367 | |
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Total Operating Expenses | — | | | 21,393 | | | 1,614,157 | | | (6,995 | ) | | 1,628,555 | |
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Operating (Loss) Income | — | | | (15,202 | ) | | 63,014 | | | 987 | | | 48,799 | |
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Other (Expense) Income: | | | | | | | | | |
Interest expense | — | | | (42,177 | ) | | — | | | — | | | (42,177 | ) |
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Loss from equity investees | — | | | — | | | (910 | ) | | — | | | (910 | ) |
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Other income | — | | | 4 | | | 580 | | | — | | | 584 | |
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Equity in net earnings of subsidiary | 3,337 | | | 38,418 | | | — | | | (41,755 | ) | | — | |
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Total Other Income (Expense) | 3,337 | | | (3,755 | ) | | (330 | ) | | (41,755 | ) | | (42,503 | ) |
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Income (Loss) Before Income Taxes | 3,337 | | | (18,957 | ) | | 62,684 | | | (40,768 | ) | | 6,296 | |
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Income Tax Expense (Benefit) | 612 | | | (21,682 | ) | | 24,878 | | | (237 | ) | | 3,571 | |
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Net Income | $ | 2,725 | | | $ | 2,725 | | | $ | 37,806 | | | $ | (40,531 | ) | | $ | 2,725 | |
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CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS |
NINE MONTHS ENDED SEPTEMBER 30, 2014 |
(in thousands) |
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| | | | | | | | | | | | | | | | | | | |
| Parent | | Subsidiary Issuer | | Guarantor | | Eliminations | | Consolidated |
Subsidiaries |
Cash Flows From Operating Activities: | $ | 60,339 | | | $ | (14,288 | ) | | $ | 207,622 | | | $ | (101,627 | ) | | $ | 152,046 | |
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Cash Flows From Investing Activities: | | | | | | | | | |
Additions to property and equipment | — | | | (9,351 | ) | | (304,090 | ) | | — | | | (313,441 | ) |
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Proceeds from sale of assets | — | | | — | | | 68,537 | | | — | | | 68,537 | |
|
Additions to investments and other | (127,999 | ) | | (70,422 | ) | | (150 | ) | | 198,421 | | | (150 | ) |
|
Cash used in investing activities | (127,999 | ) | | (79,773 | ) | | (235,703 | ) | | 198,421 | | | (245,054 | ) |
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Cash Flows From Financing Activities: | | | | | | | | | |
Distributions to Chesapeake | (421,920 | ) | | — | | | — | | | — | | | (421,920 | ) |
|
Contributions from affiliates | — | | | 68,691 | | | 28,103 | | | (96,794 | ) | | — | |
|
Proceeds from issuance of senior notes, net of offering costs | 493,825 | | | — | | | — | | | — | | | 493,825 | |
|
Proceeds from issuance of term loan, net of issuance costs | — | | | 393,879 | | | — | | | — | | | 393,879 | |
|
Payments on term loan | — | | | (1,000 | ) | | — | | | — | | | (1,000 | ) |
|
Deferred financing costs | (981 | ) | | (2,565 | ) | | — | | | — | | | (3,546 | ) |
|
Borrowings from revolving credit facility | — | | | 930,900 | | | — | | | — | | | 930,900 | |
|
Payments on revolving credit facility | — | | | (1,292,300 | ) | | — | | | — | | | (1,292,300 | ) |
|
Other | (3,175 | ) | | — | | | — | | | — | | | (3,175 | ) |
|
Net cash provided by financing activities | 67,749 | | | 97,605 | | | 28,103 | | | (96,794 | ) | | 96,663 | |
|
Net increase (decrease) in cash | 89 | | | 3,544 | | | 22 | | | — | | | 3,655 | |
|
Cash, beginning of period | — | | | 1,615 | | | 63 | | | — | | | 1,678 | |
|
Cash, end of period | $ | 89 | | | $ | 5,159 | | | $ | 85 | | | $ | — | | | $ | 5,333 | |
|
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CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS |
NINE MONTHS ENDED SEPTEMBER 30, 2013 |
(in thousands) |
|
|
| | | | | | | | | | | | | | | | | | | |
| | | Subsidiary Issuer | | Guarantor | | |
| Parent | | | Subsidiaries | | Eliminations | | Consolidated |
Cash Flows From Operating Activities: | $ | — | | | $ | 136,741 | | | $ | 317,177 | | | $ | (177,343 | ) | | $ | 276,575 | |
|
Cash Flows From Investing Activities: | | | | | | | | | |
Additions to property and equipment | — | | | (3,065 | ) | | (171,259 | ) | | — | | | (174,324 | ) |
|
Proceeds from sale of assets | — | | | — | | | 42,955 | | | — | | | 42,955 | |
|
Proceeds from sale of investment | — | | | — | | | 2,790 | | | — | | | 2,790 | |
|
Other | — | | | — | | | (387 | ) | | — | | | (387 | ) |
|
Cash used in investing activities | — | | | (3,065 | ) | | (125,901 | ) | | — | | | (128,966 | ) |
|
Cash Flows From Financing Activities: | | | | | | | | | |
Distributions to affiliates | — | | | — | | | (191,604 | ) | | 177,343 | | | (14,261 | ) |
|
Borrowings from revolving credit facility | — | | | 824,600 | | | — | | | — | | | 824,600 | |
|
Payments on revolving credit facility | — | | | (957,300 | ) | | — | | | — | | | (957,300 | ) |
|
Other | — | | | 470 | | | — | | | — | | | 470 | |
|
Net cash used in financing activities | — | | | (132,230 | ) | | (191,604 | ) | | 177,343 | | | (146,491 | ) |
|
Net increase (decrease) in cash | — | | | 1,446 | | | (328 | ) | | — | | | 1,118 | |
|
Cash, beginning of period | — | | | 863 | | | 364 | | | — | | | 1,227 | |
|
Cash, end of period | $ | — | | | $ | 2,309 | | | $ | 36 | | | $ | — | | | $ | 2,345 | |
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