Subsidiary Guarantors | 3 Months Ended |
Mar. 31, 2015 |
Subsidiary Guarantors | |
Subsidiary Guarantors | 10.Subsidiary Guarantors |
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On April 1, 2014, the Issuers sold $500.0 million in aggregate principal amount of the 2022 Notes. On February 23, 2015, the Issuers sold $250.0 million in aggregate principal amount of the 2023 Notes. |
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The 2022 Notes and the 2023 Notes are guaranteed on a senior unsecured basis by the Company and by all of JEH’s current subsidiaries (except Jones Energy Finance Corp. and two immaterial subsidiaries) and certain future subsidiaries, including any future subsidiaries that guarantee any indebtedness under the Revolver. Each subsidiary guarantor is 100% owned by JEH, and all guarantees are full, unconditional, and joint and several with all other subsidiary guarantees and the parent guarantee. Any subsidiaries of JEH other than the subsidiary guarantors and Jones Energy Finance Corp. are minor. |
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The Company is a holding company and has no independent assets or operations of its own. The Company is the sole managing member of JEH and is responsible for all operational, management and administrative decisions related to JEH’s business. In accordance with JEH’s limited liability company agreement, the Company may not be removed as the sole managing member of JEH. |
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As of March 31, 2015, the Company held approximately 40.9% of the economic interest in JEH, with the remaining 59.1% economic interest held by a group of investors that owned interests in JEH prior to the Company’s IPO (the “Existing Owners”). The Existing Owners have no voting rights with respect to their economic interest in JEH. |
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The Company has two classes of common stock, Class A common stock, which was sold to investors in the IPO, and Class B common stock. Pursuant to the Company’s certificate of incorporation, each share of Class A common stock is entitled to one vote per share, and the shares of Class A common stock are entitled to 100% of the economic interests in the Company. Each share of Class B common stock has no economic rights in the Company, but entitles its holder to one vote on all matters to be voted on by the Company’s stockholders generally. |
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In connection with a reorganization that occurred immediately prior to the IPO, each Existing Owner was issued a number of shares of Class B common stock that is equal to the number of JEH Units that such Existing Owner holds. Holders of the Company’s Class A common stock and Class B common stock generally vote together as a single class on all matters presented to the Company’s stockholders for their vote or approval. Accordingly, the Existing Owners collectively have a number of votes in the Company equal to the aggregate number of JEH Units that they hold. |
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The Existing Owners have the right, pursuant to the terms of an Exchange Agreement by and among the Company, JEH and each of the Existing Owners, to exchange their JEH Units (together with a corresponding number of shares of Class B common stock) for shares of Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications and other similar transactions. As a result, the Company expects that over time the Company will have an increasing economic interest in JEH as Class B common stock and JEH Units are exchanged for Class A common stock. Moreover, any transfers of JEH Units outside of the Exchange Agreement (other than permitted transfers to affiliates) must be approved by the Company. The Company intends to retain full voting and management control over JEH. |
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Jones Energy, Inc. |
Condensed Consolidating Balance Sheet |
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March 31, 2015 |
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(in thousands of dollars) | | JEI (Parent) | | Issuers | | Guarantor | | Non- | | Eliminations | | Consolidated | |
Subsidiaries | Guarantor |
| Subsidiaries |
Assets | | | | | | | | | | | | | |
Current assets | | | | | | | | | | | | | |
Cash | | $ | 100 | | $ | 1,000 | | $ | 27,141 | | $ | 30 | | $ | — | | $ | 28,271 | |
Restricted cash | | — | | — | | 186 | | — | | — | | 186 | |
Accounts receivable, net | | | | | | | | | | | | | |
Oil and gas sales | | — | | — | | 32,098 | | — | | — | | 32,098 | |
Joint interest owners | | — | | — | | 25,024 | | — | | — | | 25,024 | |
Other | | — | | 12,552 | | 3,069 | | — | | — | | 15,621 | |
Commodity derivative assets | | — | | 121,083 | | — | | — | | — | | 121,083 | |
Other current assets | | 70 | | 421 | | 2,630 | | — | | — | | 3,121 | |
Intercompany receivable | | 12,174 | | 1,189,632 | | — | | — | | (1,201,806 | ) | — | |
Total current assets | | 12,344 | | 1,324,688 | | 90,148 | | 30 | | (1,201,806 | ) | 225,404 | |
Oil and gas properties, net, at cost under the successful efforts method | | — | | — | | 1,670,402 | | — | | — | | 1,670,402 | |
Other property, plant and equipment, net | | — | | — | | 3,032 | | 774 | | — | | 3,806 | |
Commodity derivative assets | | — | | 97,395 | | — | | — | | — | | 97,395 | |
Other assets | | — | | 20,507 | | 254 | | — | | — | | 20,761 | |
Deferred tax assets | | 221 | | — | | — | | — | | — | | 221 | |
Investment in subsidiaries | | 357,696 | | — | | — | | — | | (357,696 | ) | — | |
Total assets | | $ | 370,261 | | $ | 1,442,590 | | $ | 1,763,836 | | $ | 804 | | $ | (1,559,502 | ) | $ | 2,017,989 | |
Liabilities and Stockholders’ Equity | | | | | | | | | | | | | |
Current liabilities | | | | | | | | | | | | | |
Trade accounts payable | | $ | — | | $ | 473 | | $ | 60,991 | | $ | — | | $ | — | | $ | 61,464 | |
Oil and gas sales payable | | — | | — | | 56,073 | | — | | — | | 56,073 | |
Accrued liabilities | | — | | 19,257 | | 13,270 | | — | | — | | 32,527 | |
Deferred tax liabilities | | — | | 671 | | — | | — | | — | | 671 | |
Asset retirement obligations | | — | | — | | 3,211 | | — | | — | | 3,211 | |
Intercompany payable | | — | | — | | 1,324,841 | | 2,351 | | (1,327,192 | ) | — | |
Total current liabilities | | — | | 20,401 | | 1,458,386 | | 2,351 | | (1,327,192 | ) | 153,946 | |
Long-term debt | | — | | 90,000 | | — | | — | | — | | 90,000 | |
Senior notes | | — | | 736,644 | | — | | — | | — | | 736,644 | |
Deferred revenue | | — | | 12,852 | | — | | — | | — | | 12,852 | |
Commodity derivative liabilities | | — | | — | | — | | — | | — | | — | |
Asset retirement obligations | | — | | — | | 11,331 | | — | | — | | 11,331 | |
Liability under tax receivable agreement | | 3,248 | | — | | — | | — | | — | | 3,248 | |
Deferred tax liabilities | | 19,879 | | 8,643 | | — | | — | | — | | 28,522 | |
Total liabilities | | 23,127 | | 868,540 | | 1,469,717 | | 2,351 | | (1,327,192 | ) | 1,036,543 | |
Stockholders’ / members’ equity | | | | | | | | | | | | | |
Members’ equity | | — | | 574,050 | | 294,119 | | (1,547 | ) | (866,622 | ) | — | |
Class A common stock, $0.001 par value; 25,231,004 shares issued and 25,208,402 shares outstanding | | 25 | | — | | — | | — | | — | | 25 | |
Class B common stock, $0.001 par value; 36,422,660 shares issued and outstanding | | 37 | | — | | — | | — | | — | | 37 | |
Treasury stock, at cost; 22,602 shares | | (358 | ) | — | | — | | — | | — | | (358 | ) |
Additional paid-in-capital | | 306,292 | | — | | — | | — | | — | | 306,292 | |
Retained earnings | | 41,138 | | — | | — | | — | | — | | 41,138 | |
Stockholders’ equity | | 347,134 | | 574,050 | | 294,119 | | (1,547 | ) | (866,622 | ) | 347,134 | |
Non-controlling interest | | — | | — | | — | | — | | 634,312 | | 634,312 | |
Total stockholders’ equity | | 347,134 | | 574,050 | | 294,119 | | (1,547 | ) | (232,310 | ) | 981,446 | |
Total liabilities and stockholders’ equity | | $ | 370,261 | | $ | 1,442,590 | | $ | 1,763,836 | | $ | 804 | | $ | (1,559,502 | ) | $ | 2,017,989 | |
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Jones Energy, Inc. |
|
Condensed Consolidating Balance Sheet |
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March 31, 2014 |
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(in thousands of dollars) | | JEI (Parent) | | Issuers | | Guarantor | | Non- | | Eliminations | | Consolidated | |
Subsidiaries | Guarantor |
| Subsidiaries |
Assets | | | | | | | | | | | | | |
Current assets | | | | | | | | | | | | | |
Cash | | $ | 100 | | $ | 1,000 | | $ | 26,127 | | $ | 70 | | $ | — | | $ | 27,297 | |
Restricted cash | | — | | — | | 67 | | — | | — | | 67 | |
Accounts receivable, net | | | | | | | | | | | | | |
Oil and gas sales | | — | | — | | 80,500 | | — | | — | | 80,500 | |
Joint interest owners | | — | | — | | 58,895 | | — | | — | | 58,895 | |
Other | | — | | — | | 4,246 | | — | | — | | 4,246 | |
Commodity derivative assets | | — | | 4,168 | | — | | — | | — | | 4,168 | |
Other current assets | | — | | 313 | | 2,201 | | — | | — | | 2,514 | |
Intercompany receivable | | 668 | | 1,063,572 | | — | | — | | (1,064,240 | ) | — | |
Total current assets | | 768 | | 1,069,053 | | 172,036 | | 70 | | (1,064,240 | ) | 177,687 | |
Oil and gas properties, net, at cost under the successful efforts method | | — | | — | | 1,361,538 | | — | | — | | 1,361,538 | |
Other property, plant and equipment, net | | — | | — | | 2,607 | | 865 | | — | | 3,472 | |
Commodity derivative assets | | — | | 20,806 | | — | | — | | — | | 20,806 | |
Other assets | | — | | 13,867 | | 397 | | — | | — | | 14,264 | |
Deferred tax assets | | 783 | | — | | — | | — | | — | | 783 | |
Investment in subsidiaries | | 171,308 | | — | | — | | — | | (171,308 | ) | — | |
Total assets | | $ | 172,859 | | $ | 1,103,726 | | $ | 1,536,578 | | $ | 935 | | $ | (1,235,548 | ) | $ | 1,578,550 | |
Liabilities and Stockholders’ Equity | | | | | | | | | | | | | |
Current liabilities | | | | | | | | | | | | | |
Trade accounts payable | | $ | — | | $ | 725 | | $ | 126,061 | | $ | — | | $ | — | | $ | 126,786 | |
Oil and gas sales payable | | — | | — | | 82,979 | | — | | — | | 82,979 | |
Accrued liabilities | | — | | 4,507 | | 12,978 | | — | | — | | 17,485 | |
Commodity derivative liabilities | | — | | 11,830 | | — | | — | | — | | 11,830 | |
Asset retirement obligations | | — | | — | | 2,794 | | — | | — | | 2,794 | |
Intercompany payable | | — | | — | | 1,064,125 | | 2,300 | | (1,066,425 | ) | — | |
Total current liabilities | | — | | 17,062 | | 1,288,937 | | 2,300 | | (1,066,425 | ) | 241,874 | |
Long-term debt | | — | | 678,000 | | — | | — | | — | | 678,000 | |
Senior notes | | — | | — | | — | | — | | — | | — | |
Deferred revenue | | — | | 14,287 | | — | | — | | — | | 14,287 | |
Commodity derivative liabilities | | — | | 104 | | | | — | | — | | 104 | |
Asset retirement obligations | | — | | — | | 8,632 | | — | | — | | 8,632 | |
Liability under tax receivable agreement | | — | | — | | — | | — | | — | | — | |
Deferred tax liabilities | | — | | 3,365 | | — | | — | | — | | 3,365 | |
Total liabilities | | — | | 712,818 | | 1,297,569 | | 2,300 | | (1,066,425 | ) | 946,262 | |
Stockholders’ / members’ equity | | | | | | | | | | | | | |
Members’ equity | | — | | 390,908 | | 239,009 | | (1,365 | ) | (628,552 | ) | — | |
Class A common stock, $0.001 par value; 12,526,580 shares issued and outstanding | | 13 | | — | | — | | — | | — | | 13 | |
Class B common stock, $0.001 par value; 36,836,333 shares issued and outstanding | | 37 | | — | | — | | — | | — | | 37 | |
| | | | | | | | | | | | | |
Additional paid-in-capital | | 173,626 | | — | | — | | — | | — | | 173,626 | |
Retained earnings | | (817 | ) | — | | — | | — | | — | | (817 | ) |
Stockholders’ equity | | 172,859 | | 390,908 | | 239,009 | | (1,365 | ) | (628,552 | ) | 172,859 | |
Non-controlling interest | | — | | — | | — | | — | | 459,429 | | 459,429 | |
Total stockholders’ equity | | 172,859 | | 390,908 | | 239,009 | | (1,365 | ) | (169,123 | ) | 632,288 | |
Total liabilities and stockholders’ equity | | $ | 172,859 | | $ | 1,103,726 | | $ | 1,536,578 | | $ | 935 | | $ | (1,235,548 | ) | $ | 1,578,550 | |
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Jones Energy, Inc. |
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Condensed Consolidating Statement of Operations and Comprehensive Income |
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Three Months Ended March 31, 2015 |
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(in thousands) | | JEI (Parent) | | Issuers | | Guarantor | | Non- | | Eliminations | | Consolidated | |
Subsidiaries | Guarantor |
| Subsidiaries |
Operating revenues | | | | | | | | | | | | | |
Oil and gas sales | | $ | — | | $ | — | | $ | 57,234 | | $ | — | | $ | — | | $ | 57,234 | |
Other revenues | | — | | 525 | | 337 | | — | | — | | 862 | |
Total operating revenues | | — | | 525 | | 57,571 | | — | | — | | 58,096 | |
Operating costs and expenses | | | | | | | | | | | | | |
Lease operating | | — | | — | | 12,262 | | — | | — | | 12,262 | |
Production and ad valorem taxes | | — | | — | | 3,708 | | — | | — | | 3,708 | |
Exploration | | — | | — | | 164 | | — | | — | | 164 | |
Depletion, depreciation and amortization | | — | | — | | 52,060 | | 23 | | — | | 52,083 | |
Accretion of ARO liability | | — | | — | | 194 | | — | | — | | 194 | |
General and administrative (including non-cash compensation expense) | | — | | 2,827 | | 5,661 | | 23 | | — | | 8,511 | |
Other operating | | — | | — | | 3,012 | | — | | — | | 3,012 | |
Total operating expenses | | — | | 2,827 | | 77,061 | | 46 | | — | | 79,934 | |
Operating income | | — | | (2,302 | ) | (19,490 | ) | (46 | ) | — | | (21,838 | ) |
Other income (expense) | | | | | | | | | | | | | |
Interest expense | | — | | (13,684 | ) | (445 | ) | — | | — | | (14,129 | ) |
Net gain on commodity derivatives | | — | | 46,306 | | — | | — | | — | | 46,306 | |
Other income (expense) | | — | | (2,273 | ) | (26 | ) | — | | — | | (2,299 | ) |
Other income (expense), net | | — | | 30,349 | | (471 | ) | — | | — | | 29,878 | |
Income (loss) before income tax | | — | | 28,047 | | (19,961 | ) | (46 | ) | — | | 8,040 | |
Equity interest in income | | 2,629 | | — | | — | | — | | (2,629 | ) | — | |
Income tax provision | | 441 | | 1,903 | | — | | — | | — | | 2,344 | |
Net income (loss) | | $ | 2,188 | | $ | 26,144 | | $ | (19,961 | ) | $ | (46 | ) | $ | (2,629 | ) | $ | 5,696 | |
Net income attributable to non-controlling interests | | — | | — | | — | | — | | 3,508 | | 3,508 | |
Net income attributable to controlling interests | | $ | 2,188 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 2,188 | |
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Jones Energy, Inc. |
|
Condensed Consolidating Statement of Operations and Comprehensive Income |
|
Three Months Ended March 31, 2014 |
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(in thousands) | | JEI (Parent) | | Issuers | | Guarantor | | Non- | | Eliminations | | Consolidated | |
Subsidiaries | Guarantor |
| Subsidiaries |
Operating revenues | | | | | | | | | | | | | |
Oil and gas sales | | $ | — | | $ | — | | $ | 97,867 | | $ | — | | $ | — | | $ | 97,867 | |
Other revenues | | — | | 244 | | 133 | | — | | — | | 377 | |
Total operating revenues | | — | | 244 | | 98,000 | | — | | — | | 98,244 | |
Operating costs and expenses | | | | | | | | | | | | | |
Lease operating | | — | | — | | 8,344 | | — | | — | | 8,344 | |
Production and ad valorem taxes | | — | | — | | 6,432 | | — | | — | | 6,432 | |
Exploration | | — | | — | | 2,821 | | — | | — | | 2,821 | |
Depletion, depreciation and amortization | | — | | — | | 41,177 | | 23 | | — | | 41,200 | |
Accretion of ARO liability | | — | | — | | 170 | | — | | — | | 170 | |
General and administrative (including non-cash compensation expense) | | — | | 1,616 | | 3,622 | | 22 | | — | | 5,260 | |
Total operating expenses | | — | | 1,616 | | 62,566 | | 45 | | — | | 64,227 | |
Operating income | | — | | (1,372 | ) | 35,434 | | (45 | ) | — | | 34,017 | |
Other income (expense) | | | | | | | | | | | | | |
Interest expense | | — | | (7,992 | ) | (51 | ) | — | | — | | (8,043 | ) |
Net gain on commodity derivatives | | — | | (17,250 | ) | — | | — | | — | | (17,250 | ) |
Other income (expense) | | — | | — | | 65 | | — | | — | | 65 | |
Other income (expense), net | | — | | (25,242 | ) | 14 | | — | | — | | (25,228 | ) |
Income (loss) before income tax | | — | | (26,614 | ) | 35,448 | | (45 | ) | — | | 8,789 | |
Equity interest in income | | 2,227 | | — | | — | | — | | (2,227 | ) | — | |
Income tax provision | | 858 | | 223 | | — | | — | | — | | 1,081 | |
Net income (loss) | | $ | 1,369 | | $ | (26,837 | ) | $ | 35,448 | | $ | (45 | ) | $ | (2,227 | ) | $ | 7,708 | |
Net income attributable to non-controlling interests | | — | | — | | — | | — | | 6,339 | | 6,339 | |
Net income attributable to controlling interests | | $ | 1,369 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 1,369 | |
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Jones Energy, Inc. |
|
Condensed Consolidating Statement of Cash Flows |
|
Three Months Ended March 31, 2015 |
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(in thousands of dollars) | | JEI (Parent) | | Issuers | | Guarantor | | Non- | | Eliminations | | Consolidated | |
Subsidiaries | Guarantor |
| Subsidiaries |
Cash flows from operating activities | | | | | | | | | | | | | |
Net income (loss) | | $ | 2,188 | | $ | 26,144 | | $ | (19,961 | ) | $ | (46 | ) | $ | (2,629 | ) | $ | 5,696 | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities | | (125,389 | ) | (23,757 | ) | 185,866 | | 46 | | 2,629 | | 39,395 | |
Net cash (used in) / provided by operations | | (123,201 | ) | 2,387 | | 165,905 | | — | | — | | 45,091 | |
Cash flows from investing activities | | | | | | | | | | | | | |
Additions to oil and gas properties | | — | | — | | (151,104 | ) | — | | — | | (151,104 | ) |
Net adjustments to purchase price of properties acquired | | — | | — | | — | | — | | — | | — | |
Proceeds from sales of assets | | — | | — | | 3 | | — | | — | | 3 | |
Acquisition of other property, plant and equipment | | — | | — | | (62 | ) | — | | — | | (62 | ) |
Current period settlements of matured derivative contracts | | — | | 32,611 | | — | | — | | — | | 32,611 | |
Change in restricted cash | | — | | — | | (37 | ) | — | | — | | (37 | ) |
Net cash (used in) / provided by investing | | — | | 32,611 | | (151,200 | ) | — | | — | | (118,589 | ) |
Cash flows from financing activities | | | | | | | | | | | | | |
Proceeds from issuance of long-term debt | | — | | 65,000 | | — | | — | | — | | 65,000 | |
Repayment under long-term debt | | — | | (335,000 | ) | — | | — | | — | | (335,000 | ) |
Proceeds from senior notes | | — | | 236,475 | | — | | — | | — | | 236,475 | |
Payment of debt issuance costs | | — | | (1,473 | ) | — | | — | | — | | (1,473 | ) |
Proceeds from sale of common stock, net of expense | | 123,201 | | — | | — | | — | | — | | 123,201 | |
Purchase of treasury stock | | — | | — | | — | | — | | — | | — | |
Net cash (used in) / provided by financing | | 123,201 | | (34,998 | ) | — | | — | | — | | 88,203 | |
Net increase (decrease) in cash | | — | | — | | 14,705 | | — | | — | | 14,705 | |
Cash | | | | | | | | | | | | | |
Beginning of period | | 100 | | 1,000 | | 12,436 | | 30 | | — | | 13,566 | |
End of period | | $ | 100 | | $ | 1,000 | | $ | 27,141 | | $ | 30 | | $ | — | | $ | 28,271 | |
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Jones Energy, Inc. |
|
Condensed Consolidating Statement of Cash Flows |
|
Three Months Ended March 31, 2014 |
|
(in thousands of dollars) | | JEI (Parent) | | Issuers | | Guarantor | | Non- | | Eliminations | | Consolidated | |
Subsidiaries | Guarantor |
| Subsidiaries |
Cash flows from operating activities | | | | | | | | | | | | | |
Net income (loss) | | $ | 1,369 | | $ | (26,837 | ) | $ | 35,448 | | $ | (45 | ) | $ | (2,227 | ) | $ | 7,708 | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities | | (1,369 | ) | 6,995 | | 44,602 | | 45 | | 2,227 | | 52,500 | |
Net cash (used in) / provided by operations | | — | | (19,842 | ) | 80,050 | | — | | — | | 60,208 | |
Cash flows from investing activities | | | | | | | | | | | | | |
Additions to oil and gas properties | | — | | — | | (85,028 | ) | — | | — | | (85,028 | ) |
Net adjustments to purchase price of properties acquired | | — | | — | | 13,681 | | — | | — | | 13,681 | |
Proceeds from sales of assets | | — | | — | | 66 | | — | | — | | 66 | |
Acquisition of other property, plant and equipment | | — | | — | | (270 | ) | — | | — | | (270 | ) |
Current period settlements of matured derivative contracts | | — | | (4,663 | ) | — | | — | | — | | (4,663 | ) |
Change in restricted cash | | — | | — | | (22 | ) | — | | — | | (22 | ) |
Net cash (used in) / provided by investing | | — | | (4,663 | ) | (71,573 | ) | — | | — | | (76,236 | ) |
Cash flows from financing activities | | | | | | | | | | | | | |
Proceeds from issuance of long-term debt | | — | | 20,000 | | — | | — | | — | | 20,000 | |
Repayment under long-term debt | | — | | — | | — | | — | | — | | — | |
Proceeds from senior notes | | — | | — | | — | | — | | — | | — | |
Payment of debt issuance costs | | — | | (495 | ) | — | | — | | — | | (495 | ) |
Purchase of treasury stock | | — | | — | | — | | — | | — | | — | |
Net cash (used in) / provided by financing | | — | | 19,505 | | — | | — | | — | | 19,505 | |
Net increase (decrease) in cash | | — | | (5,000 | ) | 8,477 | | — | | — | | 3,477 | |
Cash | | | | | | | | | | | | | |
Beginning of period | | 100 | | 6,000 | | 17,650 | | 70 | | — | | 23,820 | |
End of period | | $ | 100 | | $ | 1,000 | | $ | 26,127 | | $ | 70 | | $ | — | | $ | 27,297 | |
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