Subsidiary Guarantors | Subsidiary Guarantors Linn Energy, LLC’s May 2019 senior notes, November 2019 senior notes, April 2020 senior notes, December 2020 second lien notes, February 2021 senior notes and September 2021 senior notes are guaranteed by all of the Company’s material subsidiaries, other than Berry Petroleum Company, LLC, which is an indirect 100% wholly owned subsidiary of the Company. The following condensed consolidating financial information presents the financial information of Linn Energy, LLC, the guarantor subsidiaries and the non-guarantor subsidiary in accordance with Securities and Exchange Commission (“SEC”) Regulation S-X Rule 3-10. The condensed consolidating financial information for the co-issuer, Linn Energy Finance Corp., is not presented as it has no assets, operations or cash flows. The financial information may not necessarily be indicative of the financial position or results of operations had the guarantor subsidiaries or non-guarantor subsidiary operated as independent entities. There are no restrictions on the Company’s ability to obtain cash dividends or other distributions of funds from the guarantor subsidiaries. CONDENSED CONSOLIDATING BALANCE SHEETS December 31, 2015 LINN Energy, LLC Guarantor Subsidiaries Non- Guarantor Subsidiary Eliminations Consolidated (in thousands) ASSETS Current assets: Cash and cash equivalents $ 1,073 $ 72 $ 1,023 $ — $ 2,168 Accounts receivable – trade, net — 170,503 46,053 — 216,556 Accounts receivable – affiliates 2,920,082 8,621 — (2,928,703 ) — Derivative instruments — 1,207,012 13,218 — 1,220,230 Other current assets 26,905 72,120 20,897 (1 ) 119,921 Total current assets 2,948,060 1,458,328 81,191 (2,928,704 ) 1,558,875 Noncurrent assets: Oil and natural gas properties (successful efforts method) — 13,110,094 5,011,061 — 18,121,155 Less accumulated depletion and amortization — (9,557,283 ) (1,596,165 ) 55,956 (11,097,492 ) — 3,552,811 3,414,896 55,956 7,023,663 Other property and equipment — 597,216 111,495 — 708,711 Less accumulated depreciation — (183,139 ) (12,522 ) — (195,661 ) — 414,077 98,973 — 513,050 Derivative instruments — 566,401 — — 566,401 Restricted cash — 7,004 250,359 — 257,363 Notes receivable – affiliates 175,100 — — (175,100 ) — Investments in consolidated subsidiaries 3,940,444 — — (3,940,444 ) — Other noncurrent assets 35,559 5,978 16,057 — 57,594 4,151,103 579,383 266,416 (4,115,544 ) 881,358 Total noncurrent assets 4,151,103 4,546,271 3,780,285 (4,059,588 ) 8,418,071 Total assets $ 7,099,163 $ 6,004,599 $ 3,861,476 $ (6,988,292 ) $ 9,976,946 LIABILITIES AND UNITHOLDERS’ CAPITAL (DEFICIT) Current liabilities: Accounts payable and accrued expenses $ 1,285 $ 336,962 $ 117,127 $ — $ 455,374 Accounts payable – affiliates — 2,920,082 8,621 (2,928,703 ) — Derivative instruments — — 2,241 — 2,241 Current portion of long-term debt 2,843,333 — 873,175 — 3,716,508 Other accrued liabilities 49,861 52,997 16,736 (1 ) 119,593 Total current liabilities 2,894,479 3,310,041 1,017,900 (2,928,704 ) 4,293,716 Noncurrent liabilities: Derivative instruments — 857 — — 857 Long-term debt, net 4,482,867 — 845,368 — 5,328,235 Notes payable – affiliates — 175,100 — (175,100 ) — Other noncurrent liabilities — 410,990 212,049 — 623,039 Total noncurrent liabilities 4,482,867 586,947 1,057,417 (175,100 ) 5,952,131 Unitholders’ capital (deficit): Units issued and outstanding 5,333,834 4,831,758 2,798,713 (7,621,189 ) 5,343,116 Accumulated deficit (5,612,017 ) (2,724,147 ) (1,012,554 ) 3,736,701 (5,612,017 ) (278,183 ) 2,107,611 1,786,159 (3,884,488 ) (268,901 ) Total liabilities and unitholders’ capital (deficit) $ 7,099,163 $ 6,004,599 $ 3,861,476 $ (6,988,292 ) $ 9,976,946 CONDENSED CONSOLIDATING BALANCE SHEETS December 31, 2014 LINN Energy, LLC Guarantor Subsidiaries Non- Guarantor Subsidiary Eliminations Consolidated (in thousands) ASSETS Current assets: Cash and cash equivalents $ 38 $ 185 $ 1,586 $ — $ 1,809 Accounts receivable – trade, net — 371,325 100,359 — 471,684 Accounts receivable – affiliates 4,028,890 13,205 — (4,042,095 ) — Derivative instruments — 1,033,448 43,694 — 1,077,142 Other current assets 18 96,678 59,259 — 155,955 Total current assets 4,028,946 1,514,841 204,898 (4,042,095 ) 1,706,590 Noncurrent assets: Oil and natural gas properties (successful efforts method) — 13,196,841 4,872,059 — 18,068,900 Less accumulated depletion and amortization — (4,342,675 ) (525,007 ) — (4,867,682 ) — 8,854,166 4,347,052 — 13,201,218 Other property and equipment — 553,150 115,999 — 669,149 Less accumulated depreciation — (135,830 ) (8,452 ) — (144,282 ) — 417,320 107,547 — 524,867 Derivative instruments — 848,097 — — 848,097 Restricted cash — 6,100 125 — 6,225 Notes receivable – affiliates 130,500 — — (130,500 ) — Advance to affiliate — — 293,627 (293,627 ) — Investments in consolidated subsidiaries 8,562,608 — — (8,562,608 ) — Other noncurrent assets 116,637 5,716 14,159 — 136,512 8,809,745 859,913 307,911 (8,986,735 ) 990,834 Total noncurrent assets 8,809,745 10,131,399 4,762,510 (8,986,735 ) 14,716,919 Total assets $ 12,838,691 $ 11,646,240 $ 4,967,408 $ (13,028,830 ) $ 16,423,509 LIABILITIES AND UNITHOLDERS’ CAPITAL Current liabilities: Accounts payable and accrued expenses $ 3,784 $ 581,880 $ 229,145 $ — $ 814,809 Accounts payable – affiliates — 4,028,890 13,205 (4,042,095 ) — Advance from affiliate — 293,627 — (293,627 ) — Other accrued liabilities 89,507 59,142 19,087 — 167,736 Total current liabilities 93,291 4,963,539 261,437 (4,335,722 ) 982,545 Noncurrent liabilities: Long-term debt, net 8,208,857 — 2,086,952 — 10,295,809 Notes payable – affiliates — 130,500 — (130,500 ) — Derivative instruments — 684 — — 684 Other noncurrent liabilities — 400,851 200,015 — 600,866 Total noncurrent liabilities 8,208,857 532,035 2,286,967 (130,500 ) 10,897,359 Unitholders’ capital: Units issued and outstanding 5,388,749 4,831,339 2,416,381 (7,240,658 ) 5,395,811 Accumulated income (deficit) (852,206 ) 1,319,327 2,623 (1,321,950 ) (852,206 ) 4,536,543 6,150,666 2,419,004 (8,562,608 ) 4,543,605 Total liabilities and unitholders’ capital $ 12,838,691 $ 11,646,240 $ 4,967,408 $ (13,028,830 ) $ 16,423,509 CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS For the Year Ended December 31, 2015 LINN Energy, LLC Guarantor Subsidiaries Non- Guarantor Subsidiary Eliminations Consolidated (in thousands) Revenues and other: Oil, natural gas and natural gas liquids sales $ — $ 1,151,240 $ 575,031 $ — $ 1,726,271 Gains on oil and natural gas derivatives — 1,027,014 29,175 — 1,056,189 Marketing revenues — 43,876 30,253 — 74,129 Other revenues — 19,550 7,195 — 26,745 — 2,241,680 641,654 — 2,883,334 Expenses: Lease operating expenses — 372,609 245,155 — 617,764 Transportation expenses — 167,561 52,160 — 219,721 Marketing expenses — 35,278 21,866 — 57,144 General and administrative expenses — 210,894 85,993 — 296,887 Exploration costs — 9,473 — — 9,473 Depreciation, depletion and amortization — 547,675 251,371 6,711 805,757 Impairment of long-lived assets — 5,024,944 853,810 (64,800 ) 5,813,954 Taxes, other than income taxes 2 111,300 70,593 — 181,895 Gains on sale of assets and other, net — (195,490 ) (1,919 ) — (197,409 ) 2 6,284,244 1,579,029 (58,089 ) 7,805,186 Other income and (expenses): Interest expense, net of amounts capitalized (463,168 ) 2,533 (85,818 ) — (546,453 ) Interest expense – affiliates — (12,123 ) — 12,123 — Interest income – affiliates 12,123 — — (12,123 ) — Gain on extinguishment of debt 708,050 — 11,209 — 719,259 Equity in losses from consolidated subsidiaries (5,002,695 ) — — 5,002,695 — Other, net (13,804 ) (161 ) (3,261 ) — (17,226 ) (4,759,494 ) (9,751 ) (77,870 ) 5,002,695 155,580 Loss before income taxes (4,759,496 ) (4,052,315 ) (1,015,245 ) 5,060,784 (4,766,272 ) Income tax expense (benefit) 315 (6,708 ) (68 ) — (6,461 ) Net loss $ (4,759,811 ) $ (4,045,607 ) $ (1,015,177 ) $ 5,060,784 $ (4,759,811 ) CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS For the Year Ended December 31, 2014 LINN Energy, LLC Guarantor Subsidiaries Non- Guarantor Subsidiary Eliminations Consolidated (in thousands) Revenues and other: Oil, natural gas and natural gas liquids sales $ — $ 2,312,137 $ 1,298,402 $ — $ 3,610,539 Gains on oil and natural gas derivatives — 1,127,395 78,784 — 1,206,179 Marketing revenues — 84,349 50,911 — 135,260 Other revenues — 28,133 3,192 — 31,325 — 3,552,014 1,431,289 — 4,983,303 Expenses: Lease operating expenses — 440,624 364,540 — 805,164 Transportation expenses — 165,489 41,842 — 207,331 Marketing expenses — 81,210 36,255 — 117,465 General and administrative expenses — 190,286 102,787 — 293,073 Exploration costs — 125,037 — — 125,037 Depreciation, depletion and amortization — 771,549 302,353 — 1,073,902 Impairment of long-lived assets — 2,050,387 253,362 — 2,303,749 Taxes, other than income taxes 40 169,655 97,708 — 267,403 (Gains) losses on sale of assets and other, net — (487,286 ) 120,786 — (366,500 ) 40 3,506,951 1,319,633 — 4,826,624 Other income and (expenses): Interest expense, net of amounts capitalized (480,259 ) (19,631 ) (87,948 ) — (587,838 ) Interest expense – affiliates — (7,954 ) — 7,954 — Interest income – affiliates 7,954 — — (7,954 ) — Equity in earnings from consolidated subsidiaries 28,397 — — (28,397 ) — Other, net (7,861 ) (7,309 ) (1,043 ) — (16,213 ) (451,769 ) (34,894 ) (88,991 ) (28,397 ) (604,051 ) Income (loss) before income taxes (451,809 ) 10,169 22,665 (28,397 ) (447,372 ) Income tax expense — 4,368 69 — 4,437 Net income (loss) $ (451,809 ) $ 5,801 $ 22,596 $ (28,397 ) $ (451,809 ) CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS For the Year Ended December 31, 2013 LINN Energy, LLC Guarantor Subsidiaries Non- Guarantor Subsidiary Eliminations Consolidated (in thousands) Revenues and other: Oil, natural gas and natural gas liquids sales $ — $ 2,022,916 $ 50,324 $ — $ 2,073,240 Gains (losses) on oil and natural gas derivatives — 182,906 (5,049 ) — 177,857 Marketing revenues — 52,328 1,843 — 54,171 Other revenues — 26,387 — — 26,387 — 2,284,537 47,118 — 2,331,655 Expenses: Lease operating expenses — 357,113 15,410 — 372,523 Transportation expenses — 125,864 2,576 — 128,440 Marketing expenses — 36,259 1,633 — 37,892 General and administrative expenses — 215,973 20,298 — 236,271 Exploration costs — 5,251 — — 5,251 Depreciation, depletion and amortization — 818,466 10,845 — 829,311 Impairment of long-lived assets — 828,317 — — 828,317 Taxes, other than income taxes — 136,501 2,130 — 138,631 Losses on sale of assets and other, net 724 2,705 10,208 — 13,637 724 2,526,449 63,100 — 2,590,273 Other income and (expenses): Interest expense, net of amounts capitalized (415,670 ) (1,504 ) (3,963 ) — (421,137 ) Interest expense – affiliates — (5,543 ) — 5,543 — Interest income – affiliates 5,543 — — (5,543 ) — Loss on extinguishment of debt (5,304 ) — — — (5,304 ) Equity in losses from consolidated subsidiaries (266,899 ) — — 266,899 — Other, net (8,283 ) (166 ) (28 ) — (8,477 ) (690,613 ) (7,213 ) (3,991 ) 266,899 (434,918 ) Loss before income taxes (691,337 ) (249,125 ) (19,973 ) 266,899 (693,536 ) Income tax benefit — (2,199 ) — — (2,199 ) Net loss $ (691,337 ) $ (246,926 ) $ (19,973 ) $ 266,899 $ (691,337 ) CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Year Ended December 31, 2015 LINN Energy, LLC Guarantor Subsidiaries Non- Guarantor Subsidiary Eliminations Consolidated (in thousands) Cash flow from operating activities: Net loss $ (4,759,811 ) $ (4,045,607 ) $ (1,015,177 ) $ 5,060,784 $ (4,759,811 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation, depletion and amortization — 547,675 251,371 6,711 805,757 Impairment of long-lived assets — 5,024,944 853,810 (64,800 ) 5,813,954 Unit-based compensation expenses — 56,136 — — 56,136 Gain on extinguishment of debt (708,050 ) — (11,209 ) — (719,259 ) Amortization and write-off of deferred financing fees 30,993 — 3,750 — 34,743 Gains on sale of assets and other, net — (188,200 ) (961 ) — (189,161 ) Equity in losses from consolidated subsidiaries 5,002,695 — — (5,002,695 ) — Deferred income taxes — 4,606 (68 ) — 4,538 Derivatives activities: Total gains — (1,027,014 ) (36,068 ) — (1,063,082 ) Cash settlements — 1,130,640 68,770 — 1,199,410 Cash settlements on canceled derivatives — 4,679 — — 4,679 Changes in assets and liabilities: Decrease in accounts receivable – trade, net — 207,300 59,941 — 267,241 Decrease in accounts receivable – affiliates 1,167,823 4,584 — (1,172,407 ) — (Increase) decrease in other assets — (9,142 ) 18,724 — 9,582 Decrease in accounts payable and accrued expenses (14 ) (98,209 ) (58,171 ) — (156,394 ) Decrease in accounts payable and accrued expenses – affiliates — (1,167,823 ) (4,584 ) 1,172,407 — Decrease in other liabilities (39,646 ) (11,620 ) (7,610 ) — (58,876 ) Net cash provided by operating activities 693,990 432,949 122,518 — 1,249,457 Cash flow from investing activities: Development of oil and natural gas properties — (576,256 ) (32,633 ) — (608,889 ) Purchases of other property and equipment — (48,967 ) (17,741 ) — (66,708 ) Investment in affiliates (132,332 ) — — 132,332 — Change in notes receivable with affiliate (44,600 ) — — 44,600 — Settlement of advance to affiliate — — 129,217 (129,217 ) — Proceeds from sale of properties and equipment and other (3,430 ) 349,200 22,525 — 368,295 Net cash provided by (used in) investing activities (180,362 ) (276,023 ) 101,368 47,715 (307,302 ) LINN Energy, LLC Guarantor Subsidiaries Non- Guarantor Subsidiary Eliminations Consolidated (in thousands) Cash flow from financing activities: Proceeds from sale of units 233,427 — — — 233,427 Proceeds from borrowings 1,445,000 — — — 1,445,000 Repayments of debt (1,828,461 ) — (355,418 ) — (2,183,879 ) Distributions to unitholders (323,878 ) — — — (323,878 ) Financing fees and offering costs (26,678 ) — (1,377 ) — (28,055 ) Change in note payable with affiliate — 44,600 — (44,600 ) — Settlement of advance from affiliate — (129,217 ) — 129,217 — Capital contributions – affiliates — — 132,332 (132,332 ) — Excess tax benefit from unit-based compensation (9,467 ) — — — (9,467 ) Other (2,536 ) (72,422 ) 14 — (74,944 ) Net cash used in financing activities (512,593 ) (157,039 ) (224,449 ) (47,715 ) (941,796 ) Net increase (decrease) in cash and cash equivalents 1,035 (113 ) (563 ) — 359 Cash and cash equivalents: Beginning 38 185 1,586 — 1,809 Ending $ 1,073 $ 72 $ 1,023 $ — $ 2,168 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Year Ended December 31, 2014 LINN Energy, LLC Guarantor Subsidiaries Non- Guarantor Subsidiary Eliminations Consolidated (in thousands) Cash flow from operating activities: Net income (loss) $ (451,809 ) $ 5,801 $ 22,596 $ (28,397 ) $ (451,809 ) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation, depletion and amortization — 771,549 302,353 — 1,073,902 Impairment of long-lived assets — 2,050,387 253,362 — 2,303,749 Unit-based compensation expenses — 53,284 — — 53,284 Amortization and write-off of deferred financing fees 38,785 17,054 (4,913 ) — 50,926 (Gains) losses on sale of assets and other, net — (372,945 ) 111,374 — (261,571 ) Equity in earnings from consolidated subsidiaries (28,397 ) — — 28,397 — Deferred income taxes — 3,874 69 — 3,943 Derivatives activities: Total gains — (1,127,395 ) (78,784 ) — (1,206,179 ) Cash settlements — 88,776 6,738 — 95,514 Cash settlements on canceled derivatives — — 12,281 — 12,281 Changes in assets and liabilities: (Increase) decrease in accounts receivable – trade, net — (11,419 ) 16,483 — 5,064 Decrease in accounts receivable – affiliates 257,485 16,950 — (274,435 ) — (Increase) decrease in other assets 312 (2,187 ) (15,949 ) — (17,824 ) Increase in accounts payable and accrued expenses — 99,003 26 — 99,029 Decrease in accounts payable and accrued expenses – affiliates — (270,690 ) (3,745 ) 274,435 — Increase (decrease) in other liabilities 14,465 (24,473 ) (38,411 ) — (48,419 ) Net cash provided by (used in) operating activities (169,159 ) 1,297,569 583,480 — 1,711,890 Cash flow from investing activities: Acquisition of oil and natural gas properties and joint-venture funding, net of cash acquired — (2,475,315 ) (3,937 ) — (2,479,252 ) Development of oil and natural gas properties — (1,061,395 ) (508,482 ) — (1,569,877 ) Purchases of other property and equipment — (63,070 ) (11,470 ) — (74,540 ) Investment in affiliates (100,921 ) — — 100,921 — Change in notes receivable with affiliate (44,300 ) — — 44,300 — Proceeds from sale of properties and equipment and other (14,117 ) 2,210,015 7,667 — 2,203,565 Net cash used in investing activities (159,338 ) (1,389,765 ) (516,222 ) 145,221 (1,920,104 ) LINN Energy, LLC Guarantor Subsidiaries Non- Guarantor Subsidiary Eliminations Consolidated (in thousands) Cash flow from financing activities: Proceeds from borrowings 4,640,024 1,300,000 — — 5,940,024 Repayments of debt (3,305,000 ) (1,300,000 ) (206,124 ) — (4,811,124 ) Distributions to unitholders (962,048 ) — — — (962,048 ) Financing fees and offering costs (59,048 ) — (10,646 ) — (69,694 ) Change in note payable with affiliate — 44,300 — (44,300 ) — Capital contribution – affiliates — — 100,921 (100,921 ) — Excess tax benefit from unit-based compensation 810 (44 ) — — 766 Other 13,745 47,047 (864 ) — 59,928 Net cash provided by (used in) financing activities 328,483 91,303 (116,713 ) (145,221 ) 157,852 Net decrease in cash and cash equivalents (14 ) (893 ) (49,455 ) — (50,362 ) Cash and cash equivalents: Beginning 52 1,078 51,041 — 52,171 Ending $ 38 $ 185 $ 1,586 $ — $ 1,809 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Year Ended December 31, 2013 LINN Energy, LLC Guarantor Subsidiaries Non- Guarantor Subsidiary Eliminations Consolidated (in thousands) Cash flow from operating activities: Net loss $ (691,337 ) $ (246,926 ) $ (19,973 ) $ 266,899 $ (691,337 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation, depletion and amortization — 818,466 10,845 — 829,311 Impairment of long-lived assets — 828,317 — — 828,317 Unit-based compensation expenses — 42,703 — — 42,703 Loss on extinguishment of debt 5,304 — — — 5,304 Amortization and write-off of deferred financing fees 22,122 — (615 ) — 21,507 Losses on sale of assets and other, net — 37,232 — — 37,232 Equity in losses from consolidated subsidiaries 266,899 — — (266,899 ) — Deferred income taxes — (2,541 ) — — (2,541 ) Derivatives activities: Total (gains) losses — (182,906 ) 5,049 — (177,857 ) Cash settlements — 248,862 — — 248,862 Changes in assets and liabilities: Decrease in accounts receivable – trade, net — 17,754 71,434 — 89,188 Increase in accounts receivable – affiliates (120,967 ) (16,950 ) — 137,917 — (Increase) decrease in other assets (330 ) 5,896 10,613 — 16,179 Increase (decrease) in accounts payable and accrued expenses 178 (52,143 ) (25,028 ) — (76,993 ) Increase in accounts payable and accrued expenses – affiliates — 120,967 16,950 (137,917 ) — Increase (decrease) in other liabilities 2,092 6,842 (12,597 ) — (3,663 ) Net cash provided by (used in) operating activities (516,039 ) 1,625,573 56,678 — 1,166,212 Cash flow from investing activities: Acquisition of oil and natural gas properties and joint-venture funding, net of cash acquired — (730,326 ) 451,113 — (279,213 ) Development of oil and natural gas properties — (1,060,547 ) (17,478 ) — (1,078,025 ) Purchases of other property and equipment — (92,352 ) — — (92,352 ) Investment in affiliates 435,000 — — (435,000 ) — Change in notes receivable with affiliate (26,700 ) — — 26,700 — Proceeds from sale of properties and equipment and other (22,039 ) 218,312 — — 196,273 Net cash provided by (used in) investing activities 386,261 (1,664,913 ) 433,635 (408,300 ) (1,253,317 ) LINN Energy, LLC Guarantor Subsidiaries Non- Guarantor Subsidiary Eliminations Consolidated (in thousands) Cash flow from financing activities: Proceeds from borrowings 2,230,000 — — — 2,230,000 Repayments of debt (1,404,898 ) — — — (1,404,898 ) Distributions to unitholders (682,241 ) — — — (682,241 ) Financing fees and offering costs (16,033 ) — — — (16,033 ) Change in note payable with affiliate — 26,700 — (26,700 ) — Capital contribution – affiliates — — (435,000 ) 435,000 — Excess tax benefit from unit-based compensation — 160 — — 160 Other 2,895 12,422 (4,272 ) — 11,045 Net cash provided by (used in) financing activities 129,723 39,282 (439,272 ) 408,300 138,033 Net increase (decrease) in cash and cash equivalents (55 ) (58 ) 51,041 — 50,928 Cash and cash equivalents: Beginning 107 1,136 — — 1,243 Ending $ 52 $ 1,078 $ 51,041 $ — $ 52,171 |