Guarantor Financial Information | Guarantor Financial Information On April 25, 2014 , the Company issued $900.0 million in aggregate principal amount of the 2022 Notes and on March 26, 2015 , the Company issued $400.0 million in aggregate principal amount of the 2023 Notes. The obligations under the Notes are fully and unconditionally guaranteed by the Guarantors, subject to release provisions described in Note 4. The Company’s subsidiaries that constitute its Rice Midstream Holdings segment and Rice Midstream Partners segment are unrestricted subsidiaries under the indentures governing the Notes and consequently are not Guarantors. In accordance with positions established by the SEC, the following shows separate financial information with respect to the Company, the Guarantors and the non-guarantor subsidiaries. The principal elimination entries eliminate investment in subsidiaries and certain intercompany balances and transactions. Condensed Consolidated Balance Sheet as of June 30, 2016 (in thousands) Parent Guarantors Non-Guarantors Eliminations Consolidated Assets Current assets: Cash $ 440,038 $ 72,129 $ 53,347 $ — $ 565,514 Accounts receivable 57 160,692 14,774 — 175,523 Receivable from affiliates 18,476 — 13,557 (30,741 ) 1,292 Prepaid expenses and other assets 4,488 1,321 247 — 6,056 Derivative assets 1,816 29,904 — — 31,720 Total current assets 464,875 264,046 81,925 (30,741 ) 780,105 Investments in (advances from) subsidiaries 2,220,008 (210,947 ) — (2,009,061 ) — Gas collateral account — 3,995 112 — 4,107 Property, plant and equipment, net 34,040 2,554,321 975,914 (49,516 ) 3,514,759 Deferred financing costs, net 3,272 — 4,842 — 8,114 Goodwill — — 39,142 — 39,142 Intangible assets, net — — 45,349 — 45,349 Other non-current assets 2,811 12,491 1 — 15,303 Total assets $ 2,725,006 $ 2,623,906 $ 1,147,285 $ (2,089,318 ) $ 4,406,879 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 1,565 $ 9,947 $ 7,958 $ — $ 19,470 Royalties payables — 41,186 — — 41,186 Accrued capital expenditures — 60,141 19,221 — 79,362 Accrued interest 14,208 — 40 — 14,248 Leasehold payables — 8,295 — — 8,295 Payable to affiliate — 30,741 — (30,741 ) — Other accrued liabilities 24,356 32,030 14,578 — 70,964 Total current liabilities 40,129 182,340 41,797 (30,741 ) 233,525 Long-term liabilities: Long-term debt 1,277,684 — 25,000 — 1,302,684 Leasehold payable — 2,803 — — 2,803 Deferred tax (benefit) liabilities (125,174 ) 210,463 59,828 — 145,117 Other long-term liabilities 33,272 8,292 3,346 — 44,910 Total liabilities 1,225,911 403,898 129,971 (30,741 ) 1,729,039 Mezzanine equity: Redeemable noncontrolling interest — — 372,861 — 372,861 Stockholders’ equity before noncontrolling interest 1,499,095 2,220,008 (210,947 ) (2,058,577 ) 1,449,579 Noncontrolling interest — — 855,400 — 855,400 Total liabilities and stockholders’ equity $ 2,725,006 $ 2,623,906 $ 1,147,285 $ (2,089,318 ) $ 4,406,879 Condensed Consolidated Balance Sheet as of December 31, 2015 (in thousands) Parent Guarantors Non-Guarantors Eliminations Consolidated Assets Current assets: Cash $ 78,474 $ 57,800 $ 15,627 $ — $ 151,901 Accounts receivable 147 140,493 14,174 — 154,814 Receivable from affiliates 27,670 — 4,501 (32,171 ) — Prepaid expenses, deposits and other assets 4,377 817 294 — 5,488 Derivative instruments 47,262 139,698 — — 186,960 Total current assets 157,930 338,808 34,596 (32,171 ) 499,163 Investments in subsidiaries 2,378,293 113,268 — (2,491,561 ) — Gas collateral account — 3,995 82 — 4,077 Property, plant and equipment, net 21,442 2,382,878 865,043 (26,232 ) 3,243,131 Deferred financing costs, net 3,896 — 4,915 — 8,811 Goodwill — — 39,142 — 39,142 Intangible assets, net — — 46,159 — 46,159 Other non-current assets 32,590 76,025 — — 108,615 Total assets $ 2,594,151 $ 2,914,974 $ 989,937 $ (2,549,964 ) $ 3,949,098 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 4,178 $ 48,191 $ 31,184 $ — $ 83,553 Royalties payables — 40,572 — — 40,572 Accrued capital expenditures — 45,240 34,507 — 79,747 Leasehold payables — 17,338 — — 17,338 Other accrued liabilities 36,286 71,649 3,367 (32,171 ) 79,131 Total current liabilities 40,464 222,990 69,058 (32,171 ) 300,341 Long-term liabilities: Long-term debt 1,275,790 — 160,000 — 1,435,790 Leasehold payable — 6,289 — — 6,289 Deferred tax liabilities 47,667 299,741 19,911 (95,331 ) 271,988 Other long-term liabilities 19,432 7,661 3,129 — 30,222 Total liabilities 1,383,353 536,681 252,098 (127,502 ) 2,044,630 Stockholders’ equity before noncontrolling interest 1,210,798 2,378,293 113,268 (2,422,462 ) 1,279,897 Noncontrolling interest — — 624,571 — 624,571 Total liabilities and stockholders’ equity $ 2,594,151 $ 2,914,974 $ 989,937 $ (2,549,964 ) $ 3,949,098 Condensed Consolidated Statement of Operations for the Three Months Ended June 30, 2016 (in thousands) Parent Guarantors Non-Guarantors Eliminations Consolidated Operating revenues: Natural gas, oil and NGL sales $ — $ 122,312 $ — $ — $ 122,312 Gathering, compression and water distribution — — 58,420 (34,692 ) 23,728 Other revenue — 9,958 — — 9,958 Total operating revenues — 132,270 58,420 (34,692 ) 155,998 Operating expenses: Lease operating — 9,038 — — 9,038 Gathering, compression and transportation — 51,307 — (24,138 ) 27,169 Production taxes and impact fees — 2,659 — — 2,659 Exploration — 5,548 — — 5,548 Midstream operation and maintenance — — 4,602 (47 ) 4,555 Incentive unit income — 14,141 699 — 14,840 Acquisition expense — — 84 — 84 General and administrative — 18,413 10,859 — 29,272 Depreciation, depletion and amortization — 79,516 8,412 (3,176 ) 84,752 Amortization of intangible assets — — 403 — 403 Other expense — 11,096 361 — 11,457 Total operating expenses — 191,718 25,420 (27,361 ) 189,777 Operating (loss) income — (59,448 ) 33,000 (7,331 ) (33,779 ) Interest expense (22,853 ) (24 ) (1,925 ) — (24,802 ) Other income 558 1,991 — — 2,549 Gain on derivative instruments (75,167 ) (126,388 ) — — (201,555 ) Amortization of deferred financing costs (1,122 ) — (496 ) — (1,618 ) Equity income (loss) in affiliate (198,205 ) (50,201 ) — 248,406 — Income (loss) before income taxes (296,789 ) (234,070 ) 30,579 241,075 (259,205 ) Income tax benefit (expense) 120,496 32,689 (52,296 ) 19,607 120,496 Net income (loss) (176,293 ) (201,381 ) (21,717 ) 260,682 (138,709 ) Less: Net income attributable to the noncontrolling interests — — (17,977 ) — (17,977 ) Net income (loss) attributable to Rice Energy (176,293 ) (201,381 ) (39,694 ) 260,682 (156,686 ) Less: accretion and preferred dividends on redeemable noncontrolling interests — — (7,944 ) — (7,944 ) Net income (loss) attributable to Rice Energy Inc. common stockholders $ (176,293 ) $ (201,381 ) $ (47,638 ) $ 260,682 $ (164,630 ) Condensed Consolidated Statement of Operations for the Three Months Ended June 30, 2015 (in thousands) Parent Guarantors Non-Guarantors Eliminations Consolidated Operating revenues: Natural gas, oil and NGL sales $ — $ 100,890 $ — $ — $ 100,890 Gathering, compression and water distribution — — 34,812 (23,246 ) 11,566 Other revenue — 438 — — 438 Total operating revenues — 101,328 34,812 (23,246 ) 112,894 Operating expenses: Lease operating — 11,090 — — 11,090 Gathering, compression and transportation — 32,691 — (15,849 ) 16,842 Production taxes and impact fees — 1,694 — — 1,694 Exploration — 212 144 — 356 Midstream operation and maintenance — — 2,801 — 2,801 Incentive unit expense — 21,885 1,214 — 23,099 General and administrative — 19,127 5,510 — 24,637 Depreciation, depletion and amortization — 73,119 3,553 (532 ) 76,140 Amortization of intangible assets — — 408 — 408 Other expense — 1,159 839 — 1,998 Total operating expenses — 160,977 14,469 (16,381 ) 159,065 Operating (loss) income — (59,649 ) 20,343 (6,865 ) (46,171 ) Interest expense (22,381 ) (18 ) (960 ) — (23,359 ) Other income 261 774 — — 1,035 Gain on derivative instruments (4,866 ) 1,156 — — (3,710 ) Amortization of deferred financing costs (1,054 ) — (252 ) — (1,306 ) Equity (loss) income of joint ventures (62,845 ) 912 — 61,933 — (Loss) income before income taxes (90,885 ) (56,825 ) 19,131 55,068 (73,511 ) Income tax benefit (expense) 9,992 (6,020 ) (5,189 ) 11,209 9,992 Net (loss) income (80,893 ) (62,845 ) 13,942 66,277 (63,519 ) Less: Net income attributable to the noncontrolling interests — — (6,164 ) — (6,164 ) Net (loss) income attributable to Rice Energy $ (80,893 ) $ (62,845 ) $ 7,778 $ 66,277 $ (69,683 ) Condensed Consolidated Statement of Operations for the Six Months Ended June 30, 2016 (in thousands) Parent Guarantors Non-Guarantors Eliminations Consolidated Operating revenues: Natural gas, oil and NGL sales $ — $ 234,754 $ — $ — $ 234,754 Gathering, compression and water distribution — — 123,614 (75,334 ) 48,280 Other revenue — 12,906 — — 12,906 Total operating revenues — 247,660 123,614 (75,334 ) 295,940 Operating expenses: Lease operating — 20,109 — — 20,109 Gathering, compression and transportation — 99,510 — (44,209 ) 55,301 Production taxes and impact fees — 4,310 — — 4,310 Exploration — 6,538 — — 6,538 Midstream operation and maintenance — — 14,224 (47 ) 14,177 Incentive unit income — 37,012 1,970 — 38,982 Acquisition expense — — 556 — 556 Impairment of fixed assets — 2,595 — — 2,595 General and administrative — 34,854 19,291 — 54,145 Depreciation, depletion and amortization — 154,472 14,871 (5,406 ) 163,937 Amortization of intangible assets — — 811 — 811 Other expense — 15,499 149 — 15,648 Total operating expenses — 374,899 51,872 (49,662 ) 377,109 Operating (loss) income — (127,239 ) 71,742 (25,672 ) (81,169 ) Interest expense (45,616 ) (34 ) (3,673 ) — (49,323 ) Other income 748 2,013 1 — 2,762 Gain on derivative instruments (59,040 ) (72,336 ) — — (131,376 ) Amortization of deferred financing costs (2,287 ) — (882 ) — (3,169 ) Equity income (loss) in affiliate (185,508 ) (42,677 ) — 228,185 — Income (loss) before income taxes (291,703 ) (240,273 ) 67,188 202,513 (262,275 ) Income tax benefit (expense) 126,871 49,360 (39,918 ) (9,442 ) 126,871 Net income (loss) (164,832 ) (190,913 ) 27,270 193,071 (135,404 ) Less: Net income attributable to the noncontrolling interests — — (38,870 ) — (38,870 ) Net income (loss) attributable to Rice Energy (164,832 ) (190,913 ) (11,600 ) 193,071 (174,274 ) Less: accretion and preferred dividends on redeemable noncontrolling interests — — (11,402 ) — (11,402 ) Net income (loss) attributable to Rice Energy Inc. common stockholders $ (164,832 ) $ (190,913 ) $ (23,002 ) $ 193,071 $ (185,676 ) Condensed Consolidated Statement of Operations for the Six Months Ended June 30, 2015 (in thousands) Parent Guarantors Non-Guarantors Eliminations Consolidated Operating revenues: Natural gas, oil and NGL sales $ — $ 197,802 $ — $ — $ 197,802 Gathering, compression and water distribution — — 64,259 (42,892 ) 21,367 Other revenue — 3,264 — — 3,264 Total operating revenues — 201,066 64,259 (42,892 ) 222,433 Operating expenses: Lease operating — 22,681 — — 22,681 Gathering, compression and transportation — 60,367 — (29,105 ) 31,262 Production taxes and impact fees — 3,148 — — 3,148 Exploration — 951 144 — 1,095 Midstream operation and maintenance — — 6,132 — 6,132 Incentive unit expense — 44,383 2,174 — 46,557 General and administrative — 34,645 10,736 — 45,381 Depreciation, depletion and amortization — 132,256 6,997 (532 ) 138,721 Amortization of intangible assets — — 816 — 816 Other expense — 3,050 839 — 3,889 Total operating expenses — 301,481 27,838 (29,637 ) 299,682 Operating (loss) income — (100,415 ) 36,421 (13,255 ) (77,249 ) Interest expense (37,806 ) (50 ) (1,632 ) — (39,488 ) Other income 355 832 9 — 1,196 Gain on derivative instruments 9,099 48,558 — — 57,657 Amortization of deferred financing costs (1,906 ) — (503 ) — (2,409 ) Equity (loss) income of joint ventures (69,570 ) 60 — 69,510 — (Loss) income before income taxes (99,828 ) (51,015 ) 34,295 56,255 (60,293 ) Income tax benefit (expense) 1,462 (18,555 ) (10,279 ) 28,834 1,462 Net (loss) income (98,366 ) (69,570 ) 24,016 85,089 (58,831 ) Less: Net income attributable to the noncontrolling interests — — (10,699 ) — (10,699 ) Net (loss) income attributable to Rice Energy $ (98,366 ) $ (69,570 ) $ 13,317 $ 85,089 $ (69,530 ) Condensed Consolidated Statement of Cash Flows for the Six Months Ended June 30, 2016 (in thousands) Parent Guarantors Non-Guarantors Eliminations Consolidated Net cash provided by (used in) operating activities $ (4,435 ) $ 155,442 $ 82,964 $ (31,077 ) $ 202,894 Capital expenditures for property and equipment (8,045 ) (378,275 ) (129,286 ) 31,077 (484,529 ) Acquisition of midstream assets — — (7,744 ) — (7,744 ) Investment in subsidiaries 62,838 300,000 — (362,838 ) — Net cash provided by (used in) investing activities 54,793 (78,275 ) (137,030 ) (331,761 ) (492,273 ) Proceeds from borrowings — — 120,000 — 120,000 Repayments of debt obligations (690 ) — (255,000 ) — (255,690 ) Debt issuance costs 32 — (701 ) — (669 ) Shares of common stock issued in April 2016 offering, net of offering costs 311,764 — — — 311,764 Common units issued in the Partnership's June 2016 offering, net of offering costs — — 164,150 — 164,150 Common units issued in the Partnership's ATM program, net of offering costs — — 15,782 — 15,782 Distributions to the Partnership’s public unitholders — — (17,636 ) — (17,636 ) Proceeds from issuance of mezzanine equity, net of offering costs — — 368,767 — 368,767 Preferred dividends to mezzanine equity holders — — (3,576 ) — (3,576 ) Proceeds from conversion of warrants 100 — — — 100 Parent distributions, net — (62,838 ) (300,000 ) 362,838 — Net cash (used in) provided by financing activities 311,206 (62,838 ) 91,786 362,838 702,992 Net increase in cash 361,564 14,329 37,720 — 413,613 Cash, beginning of year 78,474 57,800 15,627 — 151,901 Cash, end of period $ 440,038 $ 72,129 $ 53,347 $ — $ 565,514 Condensed Consolidated Statement of Cash Flows for the Six Months Ended June 30, 2015 (in thousands) Parent Guarantors Non-Guarantors Eliminations Consolidated Net cash (used in) provided by operating activities $ (70,784 ) $ 182,183 $ 7,321 $ (13,787 ) $ 104,933 Capital expenditures for property and equipment (1,341 ) (451,301 ) (183,942 ) 13,787 (622,797 ) Proceeds from sale of interest in gas properties — 10,201 — — 10,201 Investment in subsidiaries (335,385 ) (28,973 ) — 364,358 — Net cash (used in) provided by investing activities (336,726 ) (470,073 ) (183,942 ) 378,145 (612,596 ) Proceeds from borrowings 411,932 — 127,000 — 538,932 Repayments of debt obligations (15,394 ) (697 ) — — (16,091 ) Debt issuance costs (8,505 ) — (21 ) — (8,526 ) Offering costs related to the Partnership’s IPO — — (129 ) — (129 ) Distributions to the Partnership’s public unitholders — — (5,977 ) — (5,977 ) Parent distributions, net — 335,385 28,973 (364,358 ) — Net cash provided by (used in) financing activities 388,033 334,688 149,846 (364,358 ) 508,209 Net (decrease) increase in cash (19,477 ) 46,798 (26,775 ) — 546 Cash, beginning of year 181,835 41,934 32,361 — 256,130 Cash, end of period $ 162,358 $ 88,732 $ 5,586 $ — $ 256,676 |