Parent Guarantor

9 Months Ended

Sep. 30, 2019

Condensed Financial Information Disclosure [Abstract]

The condensed consolidating financial information as of and for the periods ended September 30, 2019 present the results of operations, financial position and cash flows of HighPoint Resources Corporation, or parent guarantor, HighPoint Operating Corporation (f/k/a Bill Barrett), or subsidiary issuer, and Fifth Pocket Production, LLC, a subsidiary guarantor (formed on August 1, 2019), as well as the consolidating adjustments necessary to present HighPoint Resources Corporation's results on a consolidated basis. The parent guarantor and the subsidiary guarantor, on a joint and several basis, fully and unconditionally guarantee the debt securities of the subsidiary issuer. The indentures governing those securities limit the ability of the subsidiary issuer and the subsidiary guarantor to pay dividends or otherwise provide funding to the parent guarantor.

Prior periods are presented under the structure of the Company prior to the formation of Fifth Pocket Production, 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 parent and the subsidiary operated as independent entities.

Condensed Consolidating Balance Sheets



	As of September 30, 2019
	Parent Guarantor		Subsidiary Issuer		Subsidiary Guarantor ⁽¹⁾		Intercompany Eliminations			Consolidated
	(in thousands)
Assets:
Cash and cash equivalents	$	—	$	19,568	$	—	$	—		$	19,568
Accounts receivable, net of allowance for doubtful accounts	—		59,427		—		—			59,427
Other current assets	—		40,802		—		—			40,802
Property and equipment, net	—		2,127,989		—		—			2,127,989
Investment in subsidiaries	1,129,563		—		—		(1,129,563		)	—
Noncurrent assets	—		15,841		—		—			15,841
Total assets	$	1,129,563	$	2,263,627	$	—	$	(1,129,563	)	$	2,263,627
Liabilities and Stockholders' Equity:
Accounts payable and other accrued liabilities	$	—	$	88,524	$	—	$	—		$	88,524
Other current liabilities	—		97,084		—		—			97,084
Long-term debt	—		793,530		—		—			793,530
Deferred income taxes	—		114,263		—		—			114,263
Other noncurrent liabilities	—		40,663		—		—			40,663
Stockholders' equity	1,129,563		1,129,563		—		(1,129,563		)	1,129,563
Total liabilities and stockholders' equity	$	1,129,563	$	2,263,627	$	—	$	(1,129,563	)	$	2,263,627


(1)	Subsidiary guarantor was formed on August 1, 2019 with an immaterial investment from the subsidiary issuer.



	As of December 31, 2018
	Parent Guarantor		Subsidiary Issuer		Intercompany Eliminations			Consolidated
	(in thousands)
Assets:
Cash and cash equivalents	$	—	$	32,774	$	—		$	32,774
Accounts receivable, net of allowance for doubtful accounts	—		72,943		—			72,943
Other current assets	—		84,064		—			84,064
Property and equipment, net	—		2,029,523		—			2,029,523
Investment in subsidiaries	1,212,098		—		(1,212,098		)	—
Noncurrent assets	—		33,156		—			33,156
Total assets	$	1,212,098	$	2,252,460	$	(1,212,098	)	$	2,252,460
Liabilities and Stockholders' Equity:
Accounts payable and other accrued liabilities	$	—	$	131,379	$	—		$	131,379
Other current liabilities	—		116,806		—			116,806
Long-term debt	—		617,387		—			617,387
Deferred income taxes	—		139,534		—			139,534
Other noncurrent liabilities	—		35,256		—			35,256
Stockholders' equity	1,212,098		1,212,098		(1,212,098		)	1,212,098
Total liabilities and stockholders' equity	$	1,212,098	$	2,252,460	$	(1,212,098	)	$	2,252,460

Condensed Consolidating Statements of Operations



	Three Months Ended September 30, 2019
	Parent Guarantor			Subsidiary Issuer			Subsidiary Guarantor ⁽¹⁾		Intercompany Eliminations			Consolidated
	(in thousands)
Operating and other revenues	$	—		$	121,282		$	—	$	—		$	121,282
Operating expenses	—			(108,686		)	—		—			(108,686		)
General and administrative	—			(11,048		)	—		—			(11,048		)
Merger transaction expense	—			(2,078		)	—		—			(2,078		)
Interest expense	—			(15,167		)	—		—			(15,167		)
Interest income and other income (expense)	—			31,141			—		—			31,141
Income (loss) before income taxes and equity in earnings (loss) of subsidiaries	—			15,444			—		—			15,444
(Provision for) benefit from income taxes	—			(4,330		)	—		—			(4,330		)
Equity in earnings (loss) of subsidiaries	11,114			—			—		(11,114		)	—
Net income (loss)	$	11,114		$	11,114		$	—	$	(11,114	)	$	11,114

	Nine Months Ended September 30, 2019
	Parent Guarantor			Subsidiary Issuer			Subsidiary Guarantor ⁽¹⁾		Intercompany Eliminations			Consolidated
	(in thousands)
Operating and other revenues	$	—		$	330,846		$	—	$	—		$	330,846
Operating expenses	—			(305,276		)	—		—			(305,276		)
General and administrative	—			(36,109		)	—		—			(36,109		)
Merger transaction expense	—			(4,492		)	—		—			(4,492		)
Interest expense	—			(43,227		)	—		—			(43,227		)
Interest income and other income (expense)	—			(54,038		)	—		—			(54,038		)
Income (loss) before income taxes and equity in earnings (loss) of subsidiaries	—			(112,296		)	—		—			(112,296		)
(Provision for) benefit from income taxes	—			25,271			—		—			25,271
Equity in earnings (loss) of subsidiaries	(87,025		)	—			—		87,025			—
Net income (loss)	$	(87,025	)	$	(87,025	)	$	—	$	87,025		$	(87,025	)


(1)	Subsidiary guarantor was formed on August 1, 2019 and did not generate any revenues or expenses for the three or nine months ended September 30, 2019.



	Three Months Ended September 30, 2018
	Parent Guarantor			Subsidiary Issuer			Intercompany Eliminations		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 Guarantor			Subsidiary Issuer			Intercompany Eliminations		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	)

Condensed Consolidating Statements of Cash Flows



	Nine Months Ended September 30, 2019
	Parent Guarantor		Subsidiary Issuer			Subsidiary Guarantor ⁽¹⁾		Intercompany Eliminations		Consolidated
	(in thousands)
Cash flows from operating activities	$	—	$	195,394		$	—	$	—	$	195,394
Cash flows from investing activities:
Additions to oil and gas properties, including acquisitions	—		(375,976		)	—		—		(375,976		)
Additions to furniture, fixtures and other	—		(3,958		)	—		—		(3,958		)
Proceeds from sale of properties	—		1,334			—		—		1,334
Other investing activities	—		(1,400		)	—				(1,400		)
Cash flows from financing activities:
Proceeds from debt	—		200,000			—		—		200,000
Principal payments on debt	—		(26,859		)	—		—		(26,859		)
Other financing activities	—		(1,741		)	—		—		(1,741		)
Change in cash and cash equivalents	—		(13,206		)	—		—		(13,206		)
Beginning cash and cash equivalents	—		32,774			—		—		32,774
Ending cash and cash equivalents	$	—	$	19,568		$	—	$	—	$	19,568


(1)	Subsidiary guarantor was formed on August 1, 2019 and did not generate any cash flows for nine months ended September 30, 2019.



	Nine Months Ended September 30, 2018
	Parent Guarantor		Subsidiary Issuer			Intercompany Eliminations		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		)
Payment of acquiree's debt associated with merger, net of cash acquired	—		(53,357		)	—		(53,357		)
Proceeds from sale of properties	—		(221		)	—		(221		)
Other investing activities	—		232			—		232
Cash flows from financing activities:
Principal payments on debt	—		(350		)	—		(350		)
Other financing activities	—		(4,745		)	—		(4,745		)
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