Subsidiary Guarantors

9 Months Ended

Sep. 30, 2019

Condensed Financial Information Disclosure [Abstract]

Subsidiary Guarantors

Subsidiary Guarantors

The Guarantors have fully and unconditionally guaranteed the January 2022 Notes, the March 2023 Notes and the Senior Secured Credit Facility, subject to the Releases. In accordance with practices accepted by the SEC, Laredo has prepared condensed consolidating financial statements to quantify the balance sheets, results of operations and cash flows of such subsidiaries as subsidiary Guarantors. The following unaudited condensed consolidating (i) balance sheets as of September 30, 2019 and December 31, 2018, (ii) statements of operations for the three and nine months ended September 30, 2019 and 2018 and (iii) statements of cash flows for the nine months ended September 30, 2019 and 2018 present financial information for Laredo on a stand-alone basis (carrying any investment in subsidiaries under the equity method), financial information for the subsidiary Guarantors on a stand-alone basis and the consolidation and elimination entries necessary to arrive at the financial information for the Company on a condensed consolidated basis. Income taxes for LMS and for GCM are recorded on Laredo's balance sheets, statements of operations and statements of cash flows as they are disregarded entities for income tax purposes. Laredo and the Guarantors are not restricted from making intercompany distributions to each other.

Condensed consolidating balance sheet

September 30, 2019

(in thousands)	Laredo		Subsidiary Guarantors		Intercompany eliminations			Consolidated company
Accounts receivable, net	$	81,110	$	1,259	$	—		$	82,369
Other current assets	140,829		1,534		—			142,363
Oil and natural gas properties, net	1,831,852		9,006		(26,859		)	1,813,999
Midstream service assets, net	—		130,195		—			130,195
Other fixed assets, net	33,066		11		—			33,077
Investment in subsidiaries	138,374		—		(138,374		)	—
Other noncurrent assets, net	72,102		3,546		—			75,648
Total assets	$	2,297,333	$	145,551	$	(165,233	)	$	2,277,651
Accounts payable and accrued liabilities	$	49,493	$	4,115	$	—		$	53,608
Other current liabilities	91,709		500		—			92,209
Long-term debt, net	979,972		—		—			979,972
Other noncurrent liabilities	70,048		2,562		—			72,610
Total stockholders' equity	1,106,111		138,374		(165,233		)	1,079,252
Total liabilities and stockholders' equity	$	2,297,333	$	145,551	$	(165,233	)	$	2,277,651

Condensed consolidating balance sheet

December 31, 2018

(in thousands)	Laredo		Subsidiary Guarantors		Intercompany eliminations			Consolidated company
Accounts receivable, net	$	83,424	$	10,897	$	—		$	94,321
Other current assets	97,045		1,386		—			98,431
Oil and natural gas properties, net	2,043,009		9,113		(22,551		)	2,029,571
Midstream service assets, net	—		130,245		—			130,245
Other fixed assets, net	39,751		68		—			39,819
Investment in subsidiaries	128,380		—		(128,380		)	—
Other noncurrent assets, net	23,783		4,135		—			27,918
Total assets	$	2,415,392	$	155,844	$	(150,931	)	$	2,420,305
Accounts payable and accrued liabilities	$	54,167	$	15,337	$	—		$	69,504
Other current liabilities	121,297		9,664		—			130,961
Long-term debt, net	983,636		—		—			983,636
Other noncurrent liabilities	59,511		2,463		—			61,974
Total stockholders' equity	1,196,781		128,380		(150,931		)	1,174,230
Total liabilities and stockholders' equity	$	2,415,392	$	155,844	$	(150,931	)	$	2,420,305

Condensed consolidating statement of operations

For the three months ended September 30, 2019

(in thousands)	Laredo			Subsidiary Guarantors		Intercompany eliminations			Consolidated company
Total revenues	$	169,734		$	34,221	$	(10,386	)	$	193,569
Total costs and expenses	521,107			32,452		(9,551		)	544,008
Operating income (loss)	(351,373		)	1,769		(835		)	(350,439		)
Interest expense	(15,191		)	—		—			(15,191		)
Other non-operating income, net	100,303			333		(2,102		)	98,534
Income (loss) before income taxes	(266,261		)	2,102		(2,937		)	(267,096		)
Total income tax benefit	2,467			—		—			2,467
Net income (loss)	$	(263,794	)	$	2,102	$	(2,937	)	$	(264,629	)

Condensed consolidating statement of operations

For the three months ended September 30, 2018

(in thousands)	Laredo			Subsidiary Guarantors			Intercompany eliminations			Consolidated company
Total revenues	$	225,970		$	73,463		$	(19,687	)	$	279,746
Total costs and expenses	123,942			69,146			(17,752		)	175,336
Operating income	102,028			4,317			(1,935		)	104,410
Interest expense	(14,845		)	—			—			(14,845		)
Other non-operating expense, net	(28,811		)	(26		)	(4,291		)	(33,128		)
Income before income taxes	58,372			4,291			(6,226		)	56,437
Total income tax expense	(1,387		)	—			—			(1,387		)
Net income	$	56,985		$	4,291		$	(6,226	)	$	55,050

Condensed consolidating statement of operations

For the nine months ended September 30, 2019

(in thousands)	Laredo			Subsidiary Guarantors		Intercompany eliminations			Consolidated company
Total revenues	$	527,292		$	137,804	$	(45,937	)	$	619,159
Total costs and expenses	768,152			130,850		(41,629		)	857,373
Operating income (loss)	(240,860		)	6,954		(4,308		)	(238,214		)
Interest expense	(46,503		)	—		—			(46,503		)
Other non-operating income, net	190,121			718		(7,672		)	183,167
Income (loss) before income taxes	(97,242		)	7,672		(11,980		)	(101,550		)
Total income tax benefit	812			—		—			812
Net income (loss)	$	(96,430	)	$	7,672	$	(11,980	)	$	(100,738	)

Condensed consolidating statement of operations

For the nine months ended September 30, 2018

(in thousands)	Laredo			Subsidiary Guarantors			Intercompany eliminations			Consolidated company
Total revenues	$	632,419		$	312,784		$	(54,715	)	$	890,488
Total costs and expenses	345,232			302,143			(49,256		)	598,119
Operating income	287,187			10,641			(5,459		)	292,369
Interest expense	(42,787		)	—			—			(42,787		)
Other non-operating expense, net	(62,532		)	(1,307		)	(9,334		)	(73,173		)
Income before income taxes	181,868			9,334			(14,793		)	176,409
Total income tax expense	(1,387		)	—			—			(1,387		)
Net income	$	180,481		$	9,334		$	(14,793	)	$	175,022

Condensed consolidating statement of cash flows

For the nine months ended September 30, 2019

(in thousands)	Laredo			Subsidiary Guarantors			Intercompany eliminations			Consolidated company
Net cash provided by operating activities	$	370,191		$	4,349		$	(7,672	)	$	366,868
Net cash used in investing activities	(375,999		)	(4,349		)	7,672			(372,676		)
Net cash used in financing activities	(7,650		)	—			—			(7,650		)
Net decrease in cash and cash equivalents	(13,458		)	—			—			(13,458		)
Cash and cash equivalents, beginning of period	45,150			1			—			45,151
Cash and cash equivalents, end of period	$	31,692		$	1		$	—		$	31,693

Condensed consolidating statement of cash flows

For the nine months ended September 30, 2018

(in thousands)	Laredo			Subsidiary Guarantors			Intercompany eliminations			Consolidated company
Net cash provided by operating activities	$	402,065		$	15,797		$	(9,334	)	$	408,528
Net cash used in investing activities	(529,968		)	(15,797		)	9,334			(536,431		)
Net cash provided by financing activities	66,151			—			—			66,151
Net decrease in cash and cash equivalents	(61,752		)	—			—			(61,752		)
Cash and cash equivalents, beginning of period	112,158			1			—			112,159
Cash and cash equivalents, end of period	$	50,406		$	1		$	—		$	50,407