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, 2016 , 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, 2016 , 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, 2016 , 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, 2016 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Assets Current assets: Cash $ 37,011 $ 2,477 $ 169 $ — $ 39,657 Accounts receivable, net — 23,775 — — 23,775 Intercompany receivables 53,558 155,962 — (209,520 ) — Inventories — 15,969 8,343 (524 ) 23,788 Prepaid expenses and other current assets 422 6,270 121 — 6,813 Total current assets 90,991 204,453 8,633 (210,044 ) 94,033 Property, plant and equipment, net 11 170,950 111,254 — 282,215 Goodwill and intangible assets, net — 10,938 — — 10,938 Investment in consolidated affiliates 277,181 — 224,250 (501,431 ) — Other assets 1,109 6,264 — — 7,373 Total assets $ 369,292 $ 392,605 $ 344,137 $ (711,475 ) $ 394,559 Liabilities, Equity and Partners' Capital Current liabilities: Accounts payable $ 428 $ 6,964 $ 230 $ — $ 7,622 Intercompany payables — — 209,520 (209,520 ) — Accrued and other current liabilities 1,006 1,900 438 — 3,344 Due to sponsor (4 ) 1,101 (181 ) — 916 Current portion of long-term debt 2,000 917 — — 2,917 Total current liabilities 3,430 10,882 210,007 (209,520 ) 14,799 Long-term debt 188,166 4,074 — — 192,240 Asset retirement obligations — 2,008 5,235 — 7,243 Total liabilities 191,596 16,964 215,242 (209,520 ) 214,282 Equity and partners' capital: Partners' capital 177,696 375,641 126,314 (501,955 ) 177,696 Non-controlling interest — — 2,581 — 2,581 Total equity and partners' capital 177,696 375,641 128,895 (501,955 ) 180,277 Total liabilities, equity and partners' capital $ 369,292 $ 392,605 $ 344,137 $ (711,475 ) $ 394,559 Condensed Consolidating Balance Sheet As of December 31, 2015 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Assets Current assets: Cash $ 4,136 $ 5,077 $ 1,201 $ — $ 10,414 Accounts receivable, net — 39,292 2,185 — 41,477 Intercompany receivables 47,951 160,108 — (208,059 ) — Inventories — 19,180 9,159 (368 ) 27,971 Prepaid expenses and other current assets 57 4,282 165 — 4,504 Total current assets 52,144 227,939 12,710 (208,427 ) 84,366 Property, plant and equipment, net 14 164,500 111,941 — 276,455 Goodwill and intangible assets, net — 45,524 — — 45,524 Investment in consolidated affiliates 327,885 — 224,250 (552,135 ) — Other assets 1,553 7,377 — — 8,930 Total assets $ 381,596 $ 445,340 $ 348,901 $ (760,562 ) $ 415,275 Liabilities, Equity and Partners' Capital Current liabilities: Accounts payable $ 56 $ 9,941 $ 1,062 $ — $ 11,059 Intercompany payables — — 208,059 (208,059 ) — Accrued and other current liabilities 1,284 1,910 3,146 — 6,340 Due to sponsor 319 575 431 — 1,325 Current portion of long-term debt 2,000 1,258 — — 3,258 Total current liabilities 3,659 13,684 212,698 (208,059 ) 21,982 Long-term debt 241,117 5,666 — — 246,783 Asset retirement obligations — 1,935 5,131 — 7,066 Total liabilities 244,776 21,285 217,829 (208,059 ) 275,831 Equity and partners' capital: Partners' capital 136,820 424,055 128,448 (552,503 ) 136,820 Non-controlling interest — — 2,624 — 2,624 Total equity and partners' capital 136,820 424,055 131,072 (552,503 ) 139,444 Total liabilities, equity and partners' capital $ 381,596 $ 445,340 $ 348,901 $ (760,562 ) $ 415,275 Condensed Consolidating Statements of Operations For the Three Months Ended June 30, 2016 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Revenues $ — $ 42,444 $ 55 $ (4,070 ) $ 38,429 Cost of goods sold (including depreciation, depletion and amortization) — 43,716 382 (4,209 ) 39,889 Gross profit (loss) — (1,272 ) (327 ) 139 (1,460 ) Operating costs and expenses: General and administrative expenses 2,188 2,669 489 — 5,346 Impairments and other expenses — 95 7 — 102 Accretion of asset retirement obligations — 37 52 — 89 Loss from operations (2,188 ) (4,073 ) (875 ) 139 (6,997 ) Other income (expense): Loss from consolidated affiliates (5,006 ) — — 5,006 — Interest expense (3,697 ) (71 ) (146 ) — (3,914 ) Net loss (10,891 ) (4,144 ) (1,021 ) 5,145 (10,911 ) Loss attributable to non-controlling interest — — 20 — 20 Net loss attributable to Hi-Crush Partners LP $ (10,891 ) $ (4,144 ) $ (1,001 ) $ 5,145 $ (10,891 ) For the Six Months Ended June 30, 2016 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Revenues $ — $ 99,129 $ 1,400 $ (9,952 ) $ 90,577 Cost of goods sold (including depreciation, depletion and amortization) — 100,040 2,326 (9,797 ) 92,569 Gross profit (loss) — (911 ) (926 ) (155 ) (1,992 ) Operating costs and expenses: General and administrative expenses 4,528 13,480 941 — 18,949 Impairments and other expenses — 33,842 7 — 33,849 Accretion of asset retirement obligations — 73 104 — 177 Loss from operations (4,528 ) (48,306 ) (1,978 ) (155 ) (54,967 ) Other income (expense): Loss from consolidated affiliates (50,703 ) — — 50,703 — Interest expense (7,154 ) (108 ) (199 ) — (7,461 ) Net loss (62,385 ) (48,414 ) (2,177 ) 50,548 (62,428 ) Loss attributable to non-controlling interest — — 43 — 43 Net loss attributable to Hi-Crush Partners LP $ (62,385 ) $ (48,414 ) $ (2,134 ) $ 50,548 $ (62,385 ) Condensed Consolidating Statements of Operations For the 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 obligations — 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 For the 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 obligations — 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 35,135 36,555 8,355 (44,743 ) 35,302 Income attributable to non-controlling interest — — (167 ) — (167 ) Net income attributable to Hi-Crush Partners LP $ 35,135 $ 36,555 $ 8,188 $ (44,743 ) $ 35,135 Condensed Consolidating Statements of Cash Flows For the Six Months Ended June 30, 2016 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net cash provided by (used in) operating activities $ (14,683 ) $ 6,874 $ (2,802 ) $ 5,607 $ (5,004 ) Investing activities: Capital expenditures for property, plant and equipment — (11,342 ) (35 ) — (11,377 ) Net cash used in investing activities — (11,342 ) (35 ) — (11,377 ) Financing activities: Proceeds from equity issuance 101,186 — — — 101,186 Repayment of long-term debt (53,500 ) (1,934 ) — — (55,434 ) Advances from (to) parent, net — 3,802 1,805 (5,607 ) — Loan origination costs (128 ) — — — (128 ) Net cash provided by (used in) financing activities 47,558 1,868 1,805 (5,607 ) 45,624 Net increase (decrease) in cash 32,875 (2,600 ) (1,032 ) — 29,243 Cash: Beginning of period 4,136 5,077 1,201 — 10,414 End of period $ 37,011 $ 2,477 $ 169 $ — $ 39,657 For the 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 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 |