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 5. In connection with the closing of the Vantage Acquisition, the Company and Rice Energy Operating entered into a Debt Assumption Agreement dated as of October 19, 2016 pursuant to which Rice Energy Operating agreed to become a co-obligor of the Notes and certain entities acquired in the Vantage Acquisition became wholly-owned subsidiaries of Rice Energy Operating and guarantors of the Notes. Each of the guarantors is 100% owned by Rice Energy Operating. The Company is a holding company whose sole material asset is an equity interest in Rice Energy Operating. The Company is a member and the sole manager of Rice Energy Operating. Rice Energy owns an approximate 83.51% membership in Rice Energy Operating as of December 31, 2016. Rice Energy is responsible for all operational, management and administrative decisions related to Rice Energy Operating’s business. In accordance with the Third A&R LLC Agreement, the Company may not be removed as the sole manager of Rice Energy Operating so long as it continues to be a member of Rice Energy Operating. As of March 31, 2017 , the Company held approximately 84.36% of the economic interest in Rice Energy Operating, with the remaining 15.64% membership interest collectively held by the Vantage Sellers. The Vantage Sellers have no voting rights with respect to their membership interest in Rice Energy Operating. In connection with the closing of the Vantage Acquisition, the Company issued shares of preferred stock to the Vantage Sellers in an amount equal to 1/1000 of the number of REO Common Units they received at the closing of the Vantage Acquisition. Pursuant to the certificate of designation setting forth the terms, rights and obligations and preferences of the preferred stock, each 1/1000 share of preferred stock entitles the holder to one vote on all matters submitted to a vote of the holders of common stock. Accordingly, the Vantage Sellers collectively have a number of votes in the Company equal to the aggregate number of REO Common Units that they hold. The Vantage Sellers have a redemption right to cause Rice Energy Operating to redeem, from time to time, all or a portion of their Common Units. Each REO Common Unit will be redeemed for, at Rice Energy Operating’s option, a newly-issued share of common stock of the Company or a cash payment equal to the volume-weighted average closing price of a share of the Company’s common stock for the five trading days prior to and including the last full trading day immediately prior to the date that the member delivers a notice of redemption (subject to customary adjustments, including for stock splits, stock dividends and reclassifications). Upon the exercise of the redemption right, the redeeming member surrenders its REO Common Units to Rice Energy Operating and the corresponding number of 1/1000ths of shares of preferred stock in respect of each redeemed Common Unit to Rice Energy Operating for cancellation. The Third A&R LLC Agreement requires that the Company contribute cash or shares of its common stock to Rice Energy Operating in exchange for a number of REO Common Units equal to the number of Rice Energy Operating Common Units to be redeemed from the member. Rice Energy Operating will then distribute such cash or shares of the Company’s common stock to such Vantage Seller to complete the redemption. Upon the exercise of the redemption right, the Company may, at its option, effect a direct exchange of the REO Common Units (and the corresponding shares of preferred stock (or fractions thereof) from the redeeming Vantage Seller. As a result, the Company expects that over time it will have an increasing economic interest in Rice Energy Operating as the Vantage Sellers elect to exercise their redemption right. Moreover, any transfers of REO Common Units by the Vantage Sellers (other than permitted transfers to affiliates) must be approved by the Company. The Company intends to retain full voting and management control over Rice Energy Operating. The Company’s subsidiaries that comprise 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, Rice Energy Operating and the guarantors and the non-guarantor subsidiaries. Separate financial statements for Rice Energy Operating will be provided in Rice Energy Operating’s Quarterly Report on Form 10-Q for the three months ended March 31, 2017. The principal elimination entries below eliminate investment in subsidiaries and certain intercompany balances and transactions. Condensed Consolidated Balance Sheet as of March 31, 2017 (in thousands) Rice Energy Inc. Rice Energy Operating LLC Guarantors Non-Guarantors Eliminations Consolidated Assets Current assets: Cash $ 1,677 $ 95,838 $ 289,346 $ 44,095 $ — $ 430,956 Accounts receivable 247 — 224,448 15,453 — 240,148 Receivable from affiliates 16,263 (1,637 ) (28,851 ) 14,225 — — Prepaid expenses and other assets 6,432 9 1,885 260 — 8,586 Total current assets 24,619 94,210 486,828 74,033 — 679,690 Investments in (advances from) subsidiaries 3,286,803 4,900,055 725 — (8,187,583 ) — Gas collateral account — — 5,220 112 5,332 Property, plant and equipment, net 24,672 — 4,974,820 1,307,249 (73,029 ) 6,233,712 Deferred financing costs, net — 20,855 — 13,758 — 34,613 Goodwill — 384,431 — 494,580 — 879,011 Intangible assets, net — 44,124 — 44,124 Other non-current assets 859 — 475 — — 1,334 Derivative assets — 37,453 35,534 — — 72,987 Total assets $ 3,336,953 $ 5,437,004 $ 5,503,602 $ 1,933,856 $ (8,260,612 ) $ 7,950,803 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 1,054 $ (2,065 ) $ 35,242 $ 16,282 $ — $ 50,513 Royalties payables — — 125,054 — — 125,054 Accrued capital expenditures — — 100,264 47,913 — 148,177 Accrued interest — 35,521 — 330 — 35,851 Leasehold payables — — 18,318 — — 18,318 Derivative Instruments 115,625 64,520 180,145 Other accrued liabilities 44,381 1,378 46,884 14,858 — 107,501 Total current liabilities 45,435 150,459 390,282 79,383 — 665,559 Long-term liabilities: Long-term debt — 1,280,380 — 263,000 — 1,543,380 Leasehold payable — — 12,518 — — 12,518 Deferred tax (benefit) liabilities 364,612 — — — — 364,612 Derivative instruments — 21,105 — — — 21,105 Other long-term liabilities 8,853 1 70,201 5,968 — 85,023 Total liabilities 418,900 1,451,945 473,001 348,351 — 2,692,197 Mezzanine equity: Redeemable noncontrolling interest — — — 383,233 — 383,233 Stockholders’ equity before noncontrolling interest 2,975,561 3,286,803 5,030,601 (130,546 ) (8,260,612 ) 2,901,807 Noncontrolling interest (57,508 ) 698,256 — 1,332,818 — 1,973,566 Total liabilities and stockholders’ equity $ 3,336,953 $ 5,437,004 $ 5,503,602 $ 1,933,856 $ (8,260,612 ) $ 7,950,803 Condensed Consolidated Balance Sheet as of December 31, 2016 (in thousands) Rice Energy Inc. Rice Energy Operating LLC Guarantors Non-Guarantors Eliminations Consolidated Assets Current assets: Cash $ 2,756 $ 230,944 $ 164,522 $ 71,821 $ — $ 470,043 Accounts receivable 22,525 — 201,122 28,990 (34,012 ) 218,625 Prepaid expenses, deposits and other 2,651 — 2,214 194 — 5,059 Derivative instruments — 689 — — — 689 Total current assets 27,932 231,633 367,858 101,005 (34,012 ) 694,416 Gas collateral account — — 5,220 112 — 5,332 Investments in subsidiaries 2,928,250 4,406,023 6,101 — (7,340,374 ) — Property, plant and equipment, net 25,622 — 4,947,518 1,203,047 (58,275 ) 6,117,912 Deferred financing costs, net — 21,372 — 15,012 — 36,384 Goodwill — 384,430 — 494,581 — 879,011 Intangible assets, net — — — 44,525 — 44,525 Derivative instruments 138 27,894 11,296 — — 39,328 Other non-current assets — — 614 — — 614 Total assets $ 2,981,942 $ 5,071,352 $ 5,338,607 $ 1,858,282 $ (7,432,661 ) $ 7,817,522 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 926 $ — $ 8,724 $ 8,594 $ — $ 18,244 Royalties payables — — 87,098 — — 87,098 Accrued capital expenditures — — 89,403 35,297 — 124,700 Leasehold payables — — 22,869 — — 22,869 Derivative instruments — 72,391 66,997 — — 139,388 Other accrued liabilities 54,064 18,994 84,950 16,451 (34,012 ) 140,447 Total current liabilities 54,990 91,385 360,041 60,342 (34,012 ) 532,746 Long-term liabilities: Long-term debt — 1,279,481 — 243,000 — 1,522,481 Leasehold payable — — 9,237 — — 9,237 Deferred tax liabilities — 26,561 209,276 122,789 — 358,626 Derivative instruments — 9,766 16,711 — — 26,477 Other long-term liabilities 8,858 — 66,949 5,541 — 81,348 Total liabilities 63,848 1,407,193 662,214 431,672 (34,012 ) 2,530,915 Mezzanine equity: Redeemable noncontrolling interest — — — 382,525 — 382,525 Stockholders’ equity before noncontrolling interest 2,972,578 2,928,250 4,676,393 (270,370 ) (7,398,649 ) 2,908,202 Noncontrolling interests in consolidated subsidiaries (54,484 ) 735,909 — 1,314,455 — 1,995,880 Total liabilities and stockholders’ equity $ 2,981,942 $ 5,071,352 $ 5,338,607 $ 1,858,282 $ (7,432,661 ) $ 7,817,522 Condensed Consolidated Statement of Operations for the Three Months Ended March 31, 2017 (in thousands) Rice Energy Inc. Rice Energy Operating LLC Guarantors Non-Guarantors Eliminations Consolidated Operating revenues: Natural gas, oil and NGL sales $ — $ — $ 356,834 $ — $ — $ 356,834 Gathering, compression and water distribution — — 89,593 (59,250 ) 30,343 Other revenue — — 6,629 — — 6,629 Total operating revenues — — 363,463 89,593 (59,250 ) 393,806 Operating expenses: Lease operating — — 22,649 — — 22,649 Gathering, compression and transportation — — 81,895 — (42,469 ) 39,426 Production taxes and impact fees — — 6,153 — — 6,153 Exploration — — 4,012 — — 4,012 Midstream operation and maintenance — — — 8,940 (2,290 ) 6,650 Incentive unit income — — 2,801 82 — 2,883 Acquisition expense — — 207 — — 207 Impairment of Gas Properties 92,355 92,355 General and administrative — — 23,215 10,609 — 33,824 Depreciation, depletion and amortization — — 131,838 9,018 (3,978 ) 136,878 Amortization of intangible assets — — — 402 — 402 Other expense — — 6,045 113 — 6,158 Total operating expenses — — 371,170 29,164 (48,737 ) 351,597 Operating (loss) income — — (7,707 ) 60,429 (10,513 ) 42,209 Interest expense — (23,892 ) (1 ) (3,130 ) — (27,023 ) Other (loss) income — (104 ) 239 45 — 180 Gain on derivative instruments — (54,824 ) 40,045 — — (14,779 ) Amortization of deferred financing costs — (1,401 ) — (1,251 ) — (2,652 ) Equity (loss) income in affiliate (29,900 ) 50,321 2 — (20,423 ) — Income before income taxes (29,900 ) (29,900 ) 32,578 56,093 (30,936 ) (2,065 ) Income tax (expense) benefit 576 — — — — 576 Net (loss) income (29,324 ) (29,900 ) 32,578 56,093 (30,936 ) (1,489 ) Less: Net income attributable to the noncontrolling interests 3,025 — — (27,834 ) — (24,809 ) Net (loss) income attributable to Rice Energy (26,299 ) (29,900 ) 32,578 28,259 (30,936 ) (26,298 ) Less: accretion and preferred dividends on redeemable noncontrolling interests — — — (8,332 ) — (8,332 ) Net (loss) income attributable to Rice Energy Inc. common stockholders $ (26,299 ) $ (29,900 ) $ 32,578 $ 19,927 $ (30,936 ) $ (34,630 ) Condensed Consolidated Statement of Operations for the Three Months Ended March 31, 2016 (in thousands) Rice Energy Inc. Rice Energy Operating LLC Guarantors Non-Guarantors Eliminations Consolidated Operating revenues: Natural gas, oil and NGL sales $ — $ — $ 112,442 $ — $ — $ 112,442 Gathering, compression and water distribution — — — 65,195 (40,643 ) 24,552 Other revenue — — 2,948 — — 2,948 Total operating revenues — — 115,390 65,195 (40,643 ) 139,942 Operating expenses: Lease operating — — 11,071 — — 11,071 Gathering, compression and transportation — — 48,204 — (20,072 ) 28,132 Production taxes and impact fees — — 1,651 — — 1,651 Impairment of fixed assets — — — 2,595 — 2,595 Exploration — — 990 — — 990 Midstream operation and maintenance — — — 9,622 — 9,622 Incentive unit income — — 22,871 1,271 — 24,142 Acquisition expense — — — 472 — 472 General and administrative — — 16,435 8,438 — 24,873 Depreciation, depletion and amortization — — 74,589 6,826 (2,230 ) 79,185 Amortization of intangible assets — — — 408 — 408 Other expense — — 4,403 (212 ) — 4,191 Total operating expenses — — 180,214 29,420 (22,302 ) 187,332 Operating (loss) income — — (64,824 ) 35,775 (18,341 ) (47,390 ) Interest expense — (22,763 ) (10 ) (1,748 ) — (24,521 ) Other (loss) income — 191 22 1 — 214 Gain on derivative instruments — 16,127 54,052 — — 70,179 Amortization of deferred financing costs — (1,166 ) — (386 ) — (1,552 ) Equity (loss) income in affiliate (19,561 ) (1,654 ) (2,968 ) — 24,183 — Income before income taxes (19,561 ) (9,265 ) (13,728 ) 33,642 5,842 (3,070 ) Income tax (expense) benefit — (10,296 ) 4,293 12,378 — 6,375 Net (loss) income — (19,561 ) (9,435 ) 46,020 5,842 3,305 Less: Net income attributable to the noncontrolling interests — — — (20,893 ) — (20,893 ) Net (loss) income attributable to Rice Energy — (19,561 ) (9,435 ) 25,127 5,842 (17,588 ) Less: accretion and preferred dividends on redeemable noncontrolling interests — — — (3,458 ) — (3,458 ) Net (loss) income attributable to Rice Energy Inc. common stockholders $ — $ (19,561 ) $ (9,435 ) $ 21,669 $ 5,842 $ (21,046 ) Condensed Statement of Cash Flows for the Three Months Ended March 31, 2017 (in thousands) Rice Energy Inc. Rice Energy Operating LLC Guarantors Non-Guarantors Eliminations Consolidated Net cash provided by (used in) operating activities $ (7,901 ) $ (10,939 ) $ 232,924 $ 68,192 $ (14,668 ) $ 267,608 Capital expenditures for property and equipment (108 ) — (225,652 ) (90,937 ) 18,734 (297,963 ) Capital expenditures for acquisitions — — — (3,671 ) — (3,671 ) Investment in subsidiaries 13,444 (109,419 ) 4,066 — 91,909 — Net cash used in investing activities 13,336 (109,419 ) (221,586 ) (94,608 ) 110,643 (301,634 ) Proceeds from borrowings — — — 20,000 — 20,000 Repayments of debt obligations (313 ) — — — — (313 ) Debt issuance costs — (79 ) — (2 ) — (81 ) Distributions to the Partnership's public unitholders — — — (19,083 ) — (19,083 ) Tax distribution to Vantage Sellers — (1,225 ) — — — (1,225 ) Contribution to Strike Force Midstream by Gulfport Midstream — — — 9,614 — 9,614 Preferred dividends to redeemable noncontrolling interest holders — — — (7,772 ) — (7,772 ) Employee tax withholding for settlement of stock compensation award vestings (6,201 ) — — — — (6,201 ) Contributions from parent — (13,444 ) 113,486 (4,067 ) (95,975 ) — Net cash provided by financing activities (6,514 ) (14,748 ) 113,486 (1,310 ) (95,975 ) (5,061 ) Increase (decrease) in cash (1,079 ) (135,106 ) 124,824 (27,726 ) — (39,087 ) Cash, beginning of year 2,756 230,944 164,522 71,821 — 470,043 Cash, end of period $ 1,677 $ 95,838 $ 289,346 $ 44,095 $ — $ 430,956 Condensed Statement of Cash Flows for the Three Months Ended March 31, 2016 (in thousands) Rice Energy Inc. Rice Energy Operating LLC Guarantors Non-Guarantors Eliminations Consolidated Net cash provided by (used in) operating activities $ 25,610 $ (6,105 ) $ 89,713 $ 38,491 $ (20,571 ) $ 127,138 Capital expenditures for property and equipment (11,193 ) — (224,481 ) (74,616 ) 20,571 (289,719 ) Capital expenditures for acquisitions — — — (7,700 ) — (7,700 ) Investment in subsidiaries 139,958 146,063 — — (286,021 ) — Net cash used in investing activities 128,765 146,063 (224,481 ) (82,316 ) (265,450 ) (297,419 ) Proceeds from borrowings — — — 90,000 — 90,000 Repayments of debt obligations (317 ) — — (81,000 ) — (81,317 ) Debt issuance costs (209 ) — — (670 ) — (879 ) Distributions to the Partnership's public unitholders — — — (8,284 ) — (8,284 ) Proceeds from issuance of non-controlling redeemable interest — — — 373,942 — 373,942 Contributions from parent — (139,958 ) 149,215 (295,278 ) 286,021 — Net cash provided by financing activities (526 ) (139,958 ) 149,215 78,710 286,021 373,462 Increase (decrease) in cash 153,849 — 14,447 34,885 — 203,181 Cash, beginning of year 78,473 2 57,798 15,627 — 151,901 Cash, end of period $ 232,322 $ 2 $ 72,245 $ 50,512 $ — $ 355,082 |