Condensed Consolidating Financial Information | Condensed Consolidating Financial Information The Partnership has filed a registration statement on Form S-3 to register, among other securities, debt securities. Each of the subsidiaries of the Partnership as of March 31, 2014 (other than Hi-Crush Finance Corp., whose sole purpose is to act as a co-issuer of any debt securities) was a 100% directly or indirectly owned subsidiary of the Partnership (the “guarantors”), will issue guarantees of the debt securities, if any of them issue guarantees, and such guarantees will be full and unconditional and will constitute the joint and several obligations of such guarantors. As of June 30, 2015, the guarantors were our sole subsidiaries, other than Hi-Crush Finance Corp., Hi-Crush Augusta Acquisition Co. LLC, Hi-Crush Canada Inc and Hi-Crush Canada Distribution Corp., which are our 100% owned subsidiaries, and Augusta, of which we own 98.0% of the common equity interests. As of June 30, 2015 , the Partnership had no assets or operations independent of its subsidiaries, and there were no significant restrictions upon the ability of the Partnership or any of its subsidiaries to obtain funds from its respective subsidiaries by dividend or loan. As of June 30, 2015 , none of the assets of our subsidiaries represented restricted net assets pursuant to Rule 4-08(e)(3) of Regulation S-X under the Securities Act. For the purpose of the following financial information, the Partnership's investments in its subsidiaries are presented in accordance with the equity method of accounting. The operations, cash flows and financial position of the co-issuer are not material and therefore have been included with the parent's financial information. Condensed consolidating financial information for the Partnership and its combined guarantor and combined non-guarantor subsidiaries is as follows for the dates and periods indicated. Condensed Consolidating Balance Sheet As of June 30, 2015 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Assets Current assets: Cash $ 1,051 $ 4,988 $ 884 $ — $ 6,923 Restricted cash — 691 — — 691 Accounts receivable, net — 50,079 3,061 — 53,140 Intercompany receivables 62,627 142,376 — (205,003 ) — Inventories — 18,187 10,141 (186 ) 28,142 Prepaid expenses and other current assets 366 3,532 73 — 3,971 Total current assets 64,044 219,853 14,159 (205,189 ) 92,867 Property, plant and equipment, net 18 154,293 112,218 — 266,529 Goodwill and intangible assets, net — 65,284 — — 65,284 Investment in consolidated affiliates 323,566 — 224,250 (547,816 ) — Other assets 6,927 4,754 — — 11,681 Total assets $ 394,555 $ 444,184 $ 350,627 $ (753,005 ) $ 436,361 Liabilities, Equity and Partners' Capital Current liabilities: Accounts payable $ 184 $ 7,885 $ 3,697 $ — $ 11,766 Intercompany payables — — 205,003 (205,003 ) — Accrued and other current liabilities 549 5,463 3,939 — 9,951 Due to sponsor 136 6,806 797 — 7,739 Current portion of long-term debt 2,000 — — — 2,000 Total current liabilities 2,869 20,154 213,436 (205,003 ) 31,456 Long-term debt 231,330 3,676 — — 235,006 Asset retirement obligation — 1,868 5,029 — 6,897 Total liabilities 234,199 25,698 218,465 (205,003 ) 273,359 Equity and partners' capital: Partners' capital 160,356 418,486 129,516 (548,002 ) 160,356 Non-controlling interest — — 2,646 — 2,646 Total equity and partners' capital 160,356 418,486 132,162 (548,002 ) 163,002 Total liabilities, equity and partners' capital $ 394,555 $ 444,184 $ 350,627 $ (753,005 ) $ 436,361 Condensed Consolidating Balance Sheet As of December 31, 2014 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Assets Current assets: Cash $ 308 $ 3,490 $ 848 $ — $ 4,646 Restricted cash — 691 — — 691 Accounts receivable, net — 71,504 10,613 — 82,117 Intercompany receivables 88,621 120,401 — (209,022 ) — Inventories — 18,828 6,521 (1,665 ) 23,684 Prepaid expenses and other current assets 277 3,802 2 — 4,081 Total current assets 89,206 218,716 17,984 (210,687 ) 115,219 Property, plant and equipment, net 23 136,240 105,062 — 241,325 Goodwill and intangible assets, net — 66,750 — — 66,750 Investment in consolidated affiliates 277,343 — 224,250 (501,593 ) — Other assets 7,511 5,315 — — 12,826 Total assets $ 374,083 $ 427,021 $ 347,296 $ (712,280 ) $ 436,120 Liabilities, Equity and Partners' Capital Current liabilities: Accounts payable $ 151 $ 21,401 $ 3,326 $ — $ 24,878 Intercompany payables — — 209,021 (209,021 ) — Accrued and other current liabilities 513 6,236 5,499 — 12,248 Due to sponsor 769 11,978 712 — 13,459 Current portion of long-term debt 2,000 — — — 2,000 Total current liabilities 3,433 39,615 218,558 (209,021 ) 52,585 Long-term debt 194,688 3,676 — — 198,364 Asset retirement obligation — 1,799 4,931 — 6,730 Total liabilities 198,121 45,090 223,489 (209,021 ) 257,679 Equity and partners' capital: Partners' capital 175,962 381,931 121,328 (503,259 ) 175,962 Non-controlling interest — — 2,479 — 2,479 Total equity and partners' capital 175,962 381,931 123,807 (503,259 ) 178,441 Total liabilities, equity and partners' capital $ 374,083 $ 427,021 $ 347,296 $ (712,280 ) $ 436,120 Condensed Consolidating Statements of Operations Three Months Ended June 30, 2015 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Revenues $ — $ 82,260 $ 8,346 $ (6,648 ) $ 83,958 Cost of goods sold (including depreciation, depletion and amortization) — 64,681 7,695 (8,678 ) 63,698 Gross profit — 17,579 651 2,030 20,260 Operating costs and expenses: General and administrative expenses 2,218 2,841 690 — 5,749 Accretion of asset retirement obligation — 34 50 — 84 Income (loss) from operations (2,218 ) 14,704 (89 ) 2,030 14,427 Other income (expense): Earnings from consolidated affiliates 16,643 — — (16,643 ) — Interest expense (2,975 ) (3 ) (1 ) — (2,979 ) Net income (loss) 11,450 14,701 (90 ) (14,613 ) 11,448 Loss attributable to non-controlling interest — — 2 — 2 Net income (loss) attributable to Hi-Crush Partners LP $ 11,450 $ 14,701 $ (88 ) $ (14,613 ) $ 11,450 Six Months Ended June 30, 2015 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Revenues $ — $ 176,427 $ 27,871 $ (18,229 ) $ 186,069 Cost of goods sold (including depreciation, depletion and amortization) — 133,971 18,075 (19,709 ) 132,337 Gross profit — 42,456 9,796 1,480 53,732 Operating costs and expenses: General and administrative expenses 4,855 5,804 1,308 — 11,967 Accretion of asset retirement obligation — 68 99 — 167 Income (loss) from operations (4,855 ) 36,584 8,389 1,480 41,598 Other income (expense): Earnings from consolidated affiliates 46,223 — — (46,223 ) — Interest expense (6,233 ) (29 ) (34 ) — (6,296 ) Net income (loss) 35,135 36,555 8,355 (44,743 ) 35,302 Income attributable to non-controlling interest — — (167 ) — (167 ) Net income (loss) attributable to Hi-Crush Partners LP $ 35,135 $ 36,555 $ 8,188 $ (44,743 ) $ 35,135 Condensed Consolidating Statements of Operations Three Months Ended June 30, 2014 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Revenues $ — $ 70,518 $ 23,195 $ (10,989 ) $ 82,724 Cost of goods sold (including depreciation, depletion and amortization) — 43,375 9,574 (9,090 ) 43,859 Gross profit — 27,143 13,621 (1,899 ) 38,865 Operating costs and expenses: General and administrative expenses 3,859 2,464 356 — 6,679 Accretion of asset retirement obligation — 34 32 — 66 Income (loss) from operations (3,859 ) 24,645 13,233 (1,899 ) 32,120 Other income (expense): Earnings from consolidated affiliates 35,689 — — (35,689 ) — Interest expense (2,289 ) (1 ) (25 ) — (2,315 ) Net income (loss) 29,541 24,644 13,208 (37,588 ) 29,805 Income attributable to non-controlling interest — — (264 ) — (264 ) Net income (loss) attributable to Hi-Crush Partners LP $ 29,541 $ 24,644 $ 12,944 $ (37,588 ) $ 29,541 Six Months Ended June 30, 2014 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Revenues $ — $ 128,752 $ 40,778 $ (16,228 ) $ 153,302 Cost of goods sold (including depreciation, depletion and amortization) — 84,653 18,864 (15,492 ) 88,025 Gross profit — 44,099 21,914 (736 ) 65,277 Operating costs and expenses: General and administrative expenses 6,167 5,747 1,190 — 13,104 Accretion of asset retirement obligation — 63 60 — 123 Income (loss) from operations (6,167 ) 38,289 20,664 (736 ) 52,050 Other income (expense): Earnings from consolidated affiliates 57,723 — — (57,723 ) — Interest expense (3,643 ) (20 ) (62 ) — (3,725 ) Net income (loss) 47,913 38,269 20,602 (58,459 ) 48,325 Income attributable to non-controlling interest — — (412 ) — (412 ) Net income (loss) attributable to Hi-Crush Partners LP $ 47,913 $ 38,269 $ 20,190 $ (58,459 ) $ 47,913 Condensed Consolidating Statements of Cash Flows Six Months Ended June 30, 2015 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net cash provided by operating activities $ 16,860 $ 47,556 $ 19,603 $ (25,992 ) $ 58,027 Investing activities: Capital expenditures for property, plant and equipment — (28,758 ) (10,875 ) — (39,633 ) Net cash used in investing activities — (28,758 ) (10,875 ) — (39,633 ) Financing activities: Proceeds from issuance of long-term debt 50,000 — — — 50,000 Repayment of long-term debt (13,500 ) — — — (13,500 ) Advances to parent, net — (17,300 ) (8,692 ) 25,992 — Loan origination costs (101 ) — — — (101 ) Distributions paid (52,516 ) — — — (52,516 ) Net cash provided by (used in) financing activities (16,117 ) (17,300 ) (8,692 ) 25,992 (16,117 ) Net increase in cash 743 1,498 36 — 2,277 Cash: Beginning of period 308 3,490 848 — 4,646 End of period $ 1,051 $ 4,988 $ 884 $ — $ 6,923 Six Months Ended June 30, 2014 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net cash provided by operating activities $ 43,484 $ 45,524 $ 17,075 $ (52,404 ) $ 53,679 Investing activities: Cash paid for acquisition of preferred interest in Hi-Crush Augusta LLC — — (224,250 ) — (224,250 ) Capital expenditures for property, plant and equipment — (3,753 ) (6,308 ) — (10,061 ) Net cash used in investing activities — (3,753 ) (230,558 ) — (234,311 ) Financing activities: Proceeds from equity issuance 170,828 — — — 170,828 Proceeds from issuance of long-term debt 198,000 — — — 198,000 Repayment of long-term debt (138,750 ) — — — (138,750 ) Advances to parent, net (224,250 ) (39,750 ) 220,250 43,750 — Loan origination costs (6,808 ) — — — (6,808 ) Distributions paid (32,118 ) — (8,654 ) 8,654 (32,118 ) Net cash provided by (used in) financing activities (33,098 ) (39,750 ) 211,596 52,404 191,152 Net increase (decrease) in cash 10,386 2,021 (1,887 ) — 10,520 Cash: Beginning of period 12,056 3,991 4,561 — 20,608 End of period $ 22,442 $ 6,012 $ 2,674 $ — $ 31,128 |