Guarantor Subsidiaries | Guarantor Subsidiaries The condensed consolidating financial information as of and for the periods ended September 30, 2018 presents the results of operations, financial position and cash flows of HighPoint Resources Corporation, or parent guarantor, and HighPoint Operating Corporation (f/k/a Bill Barrett), or subsidiary issuer, as well as the consolidating adjustments necessary to present HighPoint Resources Corporation's results on a consolidated basis. The parent guarantor fully and unconditionally guarantees the debt securities of the subsidiary issuer. The indentures governing those securities limit the ability of the subsidiary issuer to pay dividends or otherwise provide funding to the parent guarantor. In September 2018, Circle B Land Company LLC, a 100% owned subsidiary, merged into its parent company, HighPoint Operating Corporation. Prior periods are presented under the structure of the Company prior to the Merger and prior to the elimination of Circle B Land Company LLC. Circle B Land Company LLC and Aurora Gathering, LLC (both of which were 100% owned subsidiaries of the Company), on a joint and several basis, fully and unconditionally guaranteed the debt of Bill Barrett, the parent issuer. On December 29, 2017, the Company completed the sale of its remaining assets in the Uinta Basin, which included the equity of Aurora Gathering, LLC. For the purpose of the following financial information, investments in subsidiaries are reflected in accordance with the equity method of accounting. The financial information may not necessarily be indicative of results of operations, cash flows, or financial position had the subsidiaries operated as independent entities. Condensed Consolidating Balance Sheets As of September 30, 2018 Parent Subsidiary Intercompany Consolidated (in thousands) Assets: Cash and cash equivalents $ — $ 92,980 $ — $ 92,980 Accounts receivable, net of allowance for doubtful accounts — 68,035 — 68,035 Other current assets — 2,967 — 2,967 Property and equipment, net — 1,973,869 — 1,973,869 Intercompany receivable — — — — Investment in subsidiaries 987,797 — (987,797 ) — Noncurrent assets — 6,795 — 6,795 Total assets $ 987,797 $ 2,144,646 $ (987,797 ) $ 2,144,646 Liabilities and Stockholders' Equity: Accounts payable and other accrued liabilities $ — $ 147,590 $ — $ 147,590 Other current liabilities — 191,242 — 191,242 Long-term debt — 617,006 — 617,006 Deferred income taxes — 137,111 — 137,111 Other noncurrent liabilities — 63,900 — 63,900 Stockholders' equity 987,797 987,797 (987,797 ) 987,797 Total liabilities and stockholders' equity $ 987,797 $ 2,144,646 $ (987,797 ) $ 2,144,646 As of December 31, 2017 Parent Subsidiary Intercompany Consolidated (in thousands) Assets: Cash and cash equivalents $ 314,466 $ — $ — $ 314,466 Accounts receivable, net of allowance for doubtful accounts 51,415 — — 51,415 Other current assets 1,782 — — 1,782 Property and equipment, net 1,016,986 1,894 — 1,018,880 Intercompany receivable 854 — (854 ) — Investment in subsidiaries 1,040 — (1,040 ) — Noncurrent assets 4,163 — — 4,163 Total assets $ 1,390,706 $ 1,894 $ (1,894 ) $ 1,390,706 Liabilities and Stockholders' Equity: Accounts payable and other accrued liabilities $ 84,055 $ — $ — $ 84,055 Other current liabilities 64,879 — — 64,879 Intercompany payable — 854 (854 ) — Long-term debt 617,744 — — 617,744 Other noncurrent liabilities 25,474 — — 25,474 Stockholders' equity 598,554 1,040 (1,040 ) 598,554 Total liabilities and stockholders' equity $ 1,390,706 $ 1,894 $ (1,894 ) $ 1,390,706 Condensed Consolidating Statements of Operations Three Months Ended September 30, 2018 Parent Subsidiary Intercompany Consolidated (in thousands) Operating and other revenues $ — $ 131,126 $ — $ 131,126 Operating expenses — (83,172 ) — (83,172 ) General and administrative — (12,696 ) — (12,696 ) Merger transaction expense — (100 ) — (100 ) Interest expense — (13,165 ) — (13,165 ) Interest income and other income (expense) — (51,353 ) — (51,353 ) Income (loss) before income taxes and equity in earnings (loss) of subsidiaries — (29,360 ) — (29,360 ) (Provision for) benefit from income taxes — — — — Equity in earnings (loss) of subsidiaries (29,360 ) — 29,360 — Net income (loss) $ (29,360 ) $ (29,360 ) $ 29,360 $ (29,360 ) Nine Months Ended September 30, 2018 Parent Subsidiary Intercompany Consolidated (in thousands) Operating and other revenues $ — $ 322,334 $ — $ 322,334 Operating expenses — (217,042 ) — (217,042 ) General and administrative — (34,427 ) — (34,427 ) Merger transaction expense — (6,140 ) — (6,140 ) Interest expense — (39,348 ) — (39,348 ) Interest income and other income (expense) — (126,580 ) — (126,580 ) Income (loss) before income taxes and equity in earnings (loss) of subsidiaries — (101,203 ) — (101,203 ) (Provision for) benefit from income taxes — — — — Equity in earnings (loss) of subsidiaries (101,203 ) — 101,203 — Net income (loss) $ (101,203 ) $ (101,203 ) $ 101,203 $ (101,203 ) Three Months Ended September 30, 2017 Parent Subsidiary Intercompany Consolidated (in thousands) Operating and other revenues $ 67,697 $ 168 $ — $ 67,865 Operating expenses (58,053 ) (156 ) — (58,209 ) General and administrative (12,496 ) — — (12,496 ) Interest expense (13,926 ) — — (13,926 ) Interest income and other income (expense) (12,076 ) — — (12,076 ) Income (loss) before income taxes and equity in earnings (loss) of subsidiaries (28,854 ) 12 — (28,842 ) (Provision for) benefit from income taxes — — — — Equity in earnings (loss) of subsidiaries 12 — (12 ) — Net income (loss) $ (28,842 ) $ 12 $ (12 ) $ (28,842 ) Nine Months Ended September 30, 2017 Parent Subsidiary Intercompany Eliminations Consolidated (in thousands) Operating and other revenues $ 169,041 $ 426 $ — $ 169,467 Operating expenses (167,363 ) (486 ) — (167,849 ) General and administrative (30,788 ) — — (30,788 ) Interest expense (44,014 ) — — (44,014 ) Interest income and other income (expense) 12,780 — — 12,780 Income (loss) before income taxes and equity in earnings (loss) of subsidiaries (60,344 ) (60 ) — (60,404 ) (Provision for) benefit from income taxes — — — — Equity in earnings (loss) of subsidiaries (60 ) — 60 — Net income (loss) $ (60,404 ) $ (60 ) $ 60 $ (60,404 ) Condensed Consolidating Statements of Comprehensive Income (Loss) Three Months Ended September 30, 2018 Parent Subsidiary Intercompany Consolidated (in thousands) Net income (loss) $ (29,360 ) $ (29,360 ) $ 29,360 $ (29,360 ) Other comprehensive loss — — — — Comprehensive income (loss) $ (29,360 ) $ (29,360 ) $ 29,360 $ (29,360 ) Nine Months Ended September 30, 2018 Parent Subsidiary Intercompany Consolidated (in thousands) Net income (loss) $ (101,203 ) $ (101,203 ) $ 101,203 $ (101,203 ) Other comprehensive loss — — — — Comprehensive income (loss) $ (101,203 ) $ (101,203 ) $ 101,203 $ (101,203 ) Three Months Ended September 30, 2017 Parent Subsidiary Intercompany Eliminations Consolidated (in thousands) Net income (loss) $ (28,842 ) $ 12 $ (12 ) $ (28,842 ) Other comprehensive loss — — — — Comprehensive income (loss) $ (28,842 ) $ 12 $ (12 ) $ (28,842 ) Nine Months Ended September 30, 2017 Parent Subsidiary Intercompany Consolidated (in thousands) Net income (loss) $ (60,404 ) $ (60 ) $ 60 $ (60,404 ) Other comprehensive loss — — — — Comprehensive income (loss) $ (60,404 ) $ (60 ) $ 60 $ (60,404 ) Condensed Consolidating Statements of Cash Flows Nine Months Ended September 30, 2018 Parent Subsidiary Intercompany Consolidated (in thousands) Cash flows from operating activities $ — $ 160,185 $ — $ 160,185 Cash flows from investing activities: Additions to oil and gas properties, including acquisitions — (322,614 ) — (322,614 ) Additions to furniture, fixtures and other — (616 ) — (616 ) Repayment of debt associated with merger, net of cash acquired — (53,357 ) — (53,357 ) Proceeds from sale of properties and other investing activities — 11 — 11 Intercompany transfers — — — — Cash flows from financing activities: Principal payments on debt — (350 ) — (350 ) Proceeds from sale of common stock, net of offering costs — 1 — 1 Intercompany transfers — — — — Other financing activities — (4,746 ) — (4,746 ) Change in cash and cash equivalents — (221,486 ) — (221,486 ) Beginning cash and cash equivalents — 314,466 — 314,466 Ending cash and cash equivalents $ — $ 92,980 $ — $ 92,980 Nine Months Ended September 30, 2017 Parent Subsidiary Intercompany Consolidated (in thousands) Cash flows from operating activities $ 95,009 $ 374 $ — $ 95,383 Cash flows from investing activities: Additions to oil and gas properties, including acquisitions (160,788 ) — — (160,788 ) Additions to furniture, fixtures and other (268 ) — — (268 ) Proceeds from sale of properties and other investing activities (712 ) — — (712 ) Intercompany transfers 374 — (374 ) — Cash flows from financing activities: Proceeds from debt 275,000 — — 275,000 Principal payments on debt (322,228 ) — — (322,228 ) Proceeds from sale of common stock, net of offering costs (298 ) — — (298 ) Intercompany transfers — (374 ) 374 — Other financing activities (6,045 ) — — (6,045 ) Change in cash and cash equivalents (119,956 ) — — (119,956 ) Beginning cash and cash equivalents 275,841 — — 275,841 Ending cash and cash equivalents $ 155,885 $ — $ — $ 155,885 |