Guarantor Financial Information | Guarantor Financial Information On April 25, 2014 , Rice Energy issued $900.0 million in aggregate principal amount of the 2022 Notes and on March 26, 2015 , Rice Energy 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, Rice Energy and the Company entered into a Debt Assumption Agreement dated as of October 19, 2016, pursuant to which the Company agreed to become the primary obligor of the Notes and certain entities acquired in the Vantage Acquisition became wholly-owned subsidiaries of the Company and guarantors of the Notes. Each of the guarantors is 100% owned by the Company. As of June 30, 2017 , Rice Energy held approximately 87.04% of the economic interest in the Company, with the remaining 12.96% membership interest collectively held by the Vantage Sellers. The Vantage Sellers have no voting rights with respect to their membership interest in the Company. The Vantage Sellers have a redemption right to cause the Company to redeem, from time to time, all or a portion of their common units. Each common unit will be redeemed for, at the Company’s option, a newly-issued share of common stock of Rice Energy or a cash payment equal to the volume-weighted average closing price of a share of Rice Energy’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 common units to the Company and the corresponding number of 1/1000ths of shares of Rice Energy preferred stock in respect of each redeemed common unit to the Company for cancellation. The Third A&R LLC Agreement of the Company requires that Rice Energy contribute cash or shares of its common stock to the Company in exchange for the Company’s common units equal to the number of the Company’s common units to be redeemed from the member. The Company will then distribute such cash or shares of the Rice Energy common stock to such Vantage Seller to complete the redemption. Upon the exercise of the redemption right, Rice Energy may, at its option, effect a direct exchange of the Company’s common units (and the corresponding shares of Rice Energy preferred stock (or fractions thereof) from the redeeming Vantage Seller. As a result, Rice Energy expects that over time it will have an increasing economic interest in the Company as the Vantage Sellers elect to exercise their redemption right. Moreover, any transfers of common units by the Vantage Sellers (other than permitted transfers to affiliates) must be approved by Rice Energy. Rice Energy intends to retain full voting and management control over the Company. 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, the guarantors and the non-guarantor subsidiaries. The principal elimination entries below eliminate investment in subsidiaries and certain intercompany balances and transactions. Condensed Consolidated Balance Sheet as of June 30, 2017 (in thousands) Rice Energy Operating LLC Guarantors Non-Guarantors Eliminations Consolidated Assets Current assets: Cash $ 108,731 $ (19,154 ) $ 52,193 $ — $ 141,770 Accounts receivable 1,804 315,469 22,025 — 339,298 Current receivable from parent 1,301 (46,051 ) 26,661 18,089 — Prepaid expenses, deposits and other 21 4,220 259 — 4,500 Derivative instruments 2,231 8,330 — — 10,561 Total current assets 114,088 262,814 101,138 18,089 496,129 Gas collateral account — 5,220 112 — 5,332 Investments in subsidiaries 4,882,206 725 — (4,882,931 ) — Property, plant and equipment, net — 5,114,594 1,391,138 (85,138 ) 6,420,594 Deferred financing costs, net 20,766 — 12,508 — 33,274 Goodwill 384,431 — 494,580 — 879,011 Intangible assets, net — — 43,717 — 43,717 Derivative instruments 10,609 21,741 — — 32,350 Acquisition deposit — 18,033 — — 18,033 Other non-current assets — 45 — — 45 Total assets $ 5,412,100 $ 5,423,172 $ 2,043,193 $ (4,949,980 ) $ 7,928,485 Liabilities and stockholders’ equity Current liabilities: Current payable to parent $ 28,308 $ — $ — $ 18,089 $ 46,397 Accounts payable 200 11,043 12,215 — 23,458 Royalties payables — 104,091 — — 104,091 Accrued capital expenditures — 120,163 56,431 — 176,594 Leasehold payables — 19,538 — — 19,538 Derivative instruments 6,150 4,603 — — 10,753 Embedded derivative liability — — 15,417 — 15,417 Other accrued liabilities 16,583 53,446 16,957 — 86,986 Total current liabilities 51,241 312,884 101,020 18,089 483,234 Long-term liabilities: Long-term debt 1,281,279 — 318,500 — 1,599,779 Leasehold payable — 12,279 — — 12,279 Long-term payable to parent 1,018 — — — 1,018 Derivative liabilities 7,709 2,501 — — 10,210 Other long-term liabilities — 74,739 6,283 — 81,022 Total liabilities 1,341,247 402,403 425,803 18,089 2,187,542 Mezzanine equity: Redeemable noncontrolling interest — — 396,711 — 396,711 Unitholders’ capital before noncontrolling interest 4,070,853 5,020,769 (138,564 ) (4,968,069 ) 3,984,989 Noncontrolling interests in consolidated subsidiaries — — 1,359,243 — 1,359,243 Total liabilities and unitholders’ capital $ 5,412,100 $ 5,423,172 $ 2,043,193 $ (4,949,980 ) $ 7,928,485 Condensed Consolidated Balance Sheet as of December 31, 2016 (in thousands) Rice Energy Operating LLC Guarantors Non-Guarantors Eliminations Consolidated Assets Current assets: Cash $ 230,944 $ 164,522 $ 71,821 $ — $ 467,287 Accounts receivable — 201,122 16,549 919 218,590 Receivable from affiliate (3,060 ) — 12,441 (9,381 ) — Prepaid expenses, deposits and other — 2,213 194 — 2,407 Total current assets 227,884 367,857 101,005 (8,462 ) 688,284 Gas collateral account — 5,220 112 — 5,332 Investments in subsidiaries 4,738,088 6,101 — (4,744,189 ) — Property, plant and equipment, net — 4,947,518 1,203,047 (58,276 ) 6,092,289 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 — 11,435 — — 11,435 Long-term receivable from parent 18,847 — — — 18,847 Other non-current assets — 475 — — 475 Total assets $ 5,390,621 $ 5,338,606 $ 1,858,282 $ (4,810,927 ) $ 7,776,582 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ — $ 8,724 $ 8,595 $ — $ 17,319 Royalties payables — 87,098 — — 87,098 Payable to affiliate — 30,953 — (30,953 ) — Current payable to parent 72,056 — — 22,490 94,546 Accrued capital expenditures — 89,403 35,297 — 124,700 Leasehold payables — 22,869 — — 22,869 Derivative instruments 348 66,997 — — 67,345 Other accrued liabilities 15,933 53,998 16,451 — 86,382 Total current liabilities 88,337 360,042 60,343 (8,463 ) 500,259 Long-term liabilities: Long-term debt 1,279,481 — 243,000 — 1,522,481 Leasehold payable — 9,237 — — 9,237 Derivative instruments — 17,430 — — 17,430 Other long-term liabilities 720 66,228 5,541 — 72,489 Total liabilities 1,368,538 452,937 308,884 (8,463 ) 2,121,896 Mezzanine equity: Redeemable noncontrolling interest — — 382,525 — 382,525 Unitholders’ capital before noncontrolling interest 4,022,083 4,885,669 (147,581 ) (4,802,464 ) 3,957,707 Noncontrolling interests in consolidated subsidiaries — — 1,314,454 — 1,314,454 Total liabilities and unitholders’ capital $ 5,390,621 $ 5,338,606 $ 1,858,282 $ (4,810,927 ) $ 7,776,582 Condensed Consolidated Statement of Operations for the Three Months Ended June 30, 2017 (in thousands) Rice Energy Operating LLC Guarantors Non-Guarantors Eliminations Consolidated Operating revenues: Natural gas, oil and natural gas liquids (NGL) sales $ — $ 348,892 $ — $ — $ 348,892 Gathering, compression and water services — — 104,325 (66,260 ) 38,065 Other revenue — 11,350 — — 11,350 Total operating revenues — 360,242 104,325 (66,260 ) 398,307 Operating expenses: Lease operating — 17,740 — (95 ) 17,645 Gathering, compression and transportation — 85,915 — (46,784 ) 39,131 Production taxes and impact fees — 6,679 — — 6,679 Exploration — 7,106 — — 7,106 Midstream operation and maintenance — — 10,714 (2,366 ) 8,348 Incentive unit expense — 4,662 138 — 4,800 General and administrative — 25,652 13,574 — 39,226 Depreciation, depletion and amortization — 141,479 9,333 (4,908 ) 145,904 Acquisition expense — 1,356 1,052 — 2,408 Amortization of intangible assets — — 407 — 407 Other expense — 11,210 1,996 — 13,206 Total operating expenses — 301,799 37,214 (54,153 ) 284,860 Operating income (loss) — 58,443 67,111 (12,107 ) 113,447 Interest expense (23,897 ) 3 (3,375 ) — (27,269 ) Other income (expense) 201 (19 ) 91 — 273 Gain on derivative instruments 56,228 47,330 — — 103,558 Loss on embedded derivatives — — (15,417 ) — (15,417 ) Amortization of deferred financing costs (2,175 ) — (1,251 ) — (3,426 ) Equity in income (loss) in affiliate 106,857 1 — (106,858 ) — Net income 137,214 105,758 47,159 (118,965 ) 171,166 Less: net (income) attributable to noncontrolling interests — — (33,858 ) — (33,858 ) Net income attributable to Rice Energy Operating 137,214 105,758 13,301 (118,965 ) 137,308 Less: Preferred dividends and accretion of redeemable noncontrolling interests — — (20,656 ) — (20,656 ) Net income (loss) attributable to Rice Energy Operating common stockholders $ 137,214 $ 105,758 $ (7,355 ) $ (118,965 ) $ 116,652 Condensed Consolidated Statement of Operations for the Three Months Ended June 30, 2016 (in thousands) Rice Energy Operating LLC Guarantors Non-Guarantors Eliminations Consolidated Operating revenues: Natural gas, oil and natural gas liquids (NGL) sales $ — $ 122,312 $ — $ — $ 122,312 Gathering, compression and water services — — 58,419 (34,691 ) 23,728 Other revenue — 9,958 — — 9,958 Total operating revenues — 132,270 58,419 (34,691 ) 155,998 Operating expenses: Lease operating — 9,038 — — 9,038 Gathering, compression and transportation — 51,306 — (24,137 ) 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 expense — 14,141 699 — 14,840 General and administrative — 18,351 10,921 — 29,272 Depreciation, depletion and amortization — 79,515 8,412 (3,175 ) 84,752 Acquisition expense — — 84 — 84 Amortization of intangible assets — — 403 — 403 Other expense (income) — 11,096 361 — 11,457 Total operating expenses — 191,654 25,482 (27,359 ) 189,777 Operating (loss) income — (59,384 ) 32,937 (7,332 ) (33,779 ) Interest expense (22,853 ) (24 ) (1,925 ) — (24,802 ) Other income 558 1,991 — — 2,549 Loss on derivative instruments (75,167 ) (126,388 ) — — (201,555 ) Amortization of deferred financing costs (1,122 ) — (496 ) — (1,618 ) Equity in loss of joint ventures and subsidiaries (144,423 ) (61 ) — 144,484 — (Loss) income before income taxes (243,007 ) (183,866 ) 30,516 137,152 (259,205 ) Income tax benefit (expense) 87,807 84,985 (52,296 ) — 120,496 Net (loss) income (155,200 ) (98,881 ) (21,780 ) 137,152 (138,709 ) Less: net income attributable to noncontrolling interests — — (17,977 ) — (17,977 ) Net (loss) income attributable to Rice Energy Operating (155,200 ) (98,881 ) (39,757 ) 137,152 (156,686 ) Less: Preferred dividends and accretion of redeemable noncontrolling interests — — (7,944 ) — (7,944 ) Net loss attributable to Rice Energy Operating common unitholders $ (155,200 ) $ (98,881 ) $ (47,701 ) $ 137,152 $ (164,630 ) Condensed Consolidated Statement of Operations for the Six Months Ended June 30, 2017 (in thousands) Rice Energy Operating LLC Guarantors Non-Guarantors Eliminations Consolidated Operating revenues: Natural gas, oil and natural gas liquids (NGL) sales $ — $ 705,726 $ — $ — $ 705,726 Gathering, compression and water services — — 193,918 (125,510 ) 68,408 Other revenue — 17,979 — — 17,979 Total operating revenues — 723,705 193,918 (125,510 ) 792,113 Operating expenses: Lease operating — 40,389 — (95 ) 40,294 Gathering, compression and transportation — 167,810 — (89,253 ) 78,557 Production taxes and impact fees — 12,832 — — 12,832 Exploration — 11,118 — — 11,118 Midstream operation and maintenance — — 19,654 (4,656 ) 14,998 Incentive unit expense — 7,463 220 — 7,683 Impairment of natural gas properties — 92,355 — — 92,355 General and administrative — 48,867 24,183 — 73,050 Depreciation, depletion and amortization — 273,317 18,351 (8,886 ) 282,782 Acquisition expense — 1,563 1,052 — 2,615 Amortization of intangible assets — — 809 — 809 Other expense — 17,255 2,109 — 19,364 Total operating expenses — 672,969 66,378 (102,890 ) 636,457 Operating income (loss) — 50,736 127,540 (22,620 ) 155,656 Interest expense (47,789 ) 2 (6,505 ) — (54,292 ) Other income 97 220 136 — 453 Gain on derivative instruments 1,404 87,375 — — 88,779 Loss on embedded derivatives — — (15,417 ) — (15,417 ) Amortization of deferred financing costs (3,576 ) — (2,502 ) — (6,078 ) Equity in income (loss) of joint ventures and subsidiaries 157,178 3 — (157,181 ) — Income (loss) before income taxes 107,314 138,336 103,252 (179,801 ) 169,101 Income tax (expense) benefit — — — — — Net income (loss) 107,314 138,336 103,252 (179,801 ) 169,101 Less: net income attributable to noncontrolling interests — — (61,692 ) — (61,692 ) Net income (loss) attributable to Rice Energy Operating 107,314 138,336 41,560 (179,801 ) 107,409 Less: Preferred dividends and accretion of redeemable noncontrolling interests — — (28,988 ) — (28,988 ) Net income (loss) attributable to Rice Energy Operating common unitholders $ 107,314 $ 138,336 $ 12,572 $ (179,801 ) $ 78,421 Condensed Consolidated Statement of Operations for the Six Months Ended June 30, 2016 (in thousands) Rice Energy Operating LLC Guarantors Non-Guarantors Eliminations Consolidated Operating revenues: Natural gas, oil and natural gas liquids (NGL) sales $ — $ 234,754 $ — $ — $ 234,754 Gathering, compression and water services — — 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 expense — 37,012 1,970 — 38,982 Impairment of fixed assets — — 2,595 — 2,595 General and administrative — 34,786 19,359 — 54,145 Depreciation, depletion and amortization — 154,104 15,238 (5,405 ) 163,937 Acquisition expense — — 556 — 556 Amortization of intangible assets — — 811 — 811 Other expense — 15,499 149 — 15,648 Total operating expenses — 371,868 54,902 (49,661 ) 377,109 Operating (loss) income — (124,208 ) 68,712 (25,673 ) (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 in loss of joint ventures and subsidiaries (146,077 ) (3,029 ) — 149,106 — (Loss) income before income taxes (252,272 ) (197,594 ) 64,158 123,433 (262,275 ) Income tax benefit (expense) 77,511 89,278 (39,918 ) — 126,871 Net (loss) income (174,761 ) (108,316 ) 24,240 123,433 (135,404 ) Less: net income attributable to noncontrolling interests — — (38,870 ) — (38,870 ) Net loss attributable to Rice Energy Operating (174,761 ) (108,316 ) (14,630 ) 123,433 (174,274 ) Less: Preferred dividends and accretion of redeemable noncontrolling interests — — (11,402 ) — (11,402 ) Net loss attributable to Rice Energy Operating common unitholders $ (174,761 ) $ (108,316 ) $ (26,032 ) $ 123,433 $ (185,676 ) Condensed Statement of Cash Flows for the Six Months Ended June 30, 2017 (in thousands) Rice Energy Operating LLC Guarantors Non-Guarantors Eliminations Consolidated Net cash provided by operating activities $ 63,397 $ 270,126 $ 122,833 $ (31,506 ) $ 424,850 Capital expenditures for property and equipment — (491,768 ) (181,818 ) 31,506 (642,080 ) Acquisitions — — (3,671 ) — (3,671 ) Acquisition deposit — (18,033 ) — — (18,033 ) Investment in subsidiaries (55,999 ) — — 55,999 — Net cash used in investing activities (55,999 ) (509,801 ) (185,489 ) 87,505 (663,784 ) Proceeds from borrowings — — 75,500 — 75,500 Debt issuance costs (1,359 ) — (40 ) — (1,399 ) Distributions to the Partnership's public unitholders (1,225 ) — (38,977 ) — (40,202 ) Net contribution to Strike Force Midstream by Gulfport Midstream — — 21,815 — 21,815 Preferred dividends on Series B Units — — (15,270 ) — (15,270 ) Distributions (to) from parent (127,027 ) 55,999 — (55,999 ) (127,027 ) Net cash (used in) provided by financing activities (129,611 ) 55,999 43,028 (55,999 ) (86,583 ) Decrease in cash and cash equivalents (122,213 ) (183,676 ) (19,628 ) — (325,517 ) Cash and cash equivalents, beginning of year 230,944 164,522 71,821 — 467,287 Cash and cash equivalents, end of year $ 108,731 $ (19,154 ) $ 52,193 $ — $ 141,770 Condensed Statement of Cash Flows for the Six Months Ended June 30, 2016 (in thousands) Rice Energy Operating LLC Guarantors Non-Guarantors Eliminations Consolidated Net cash (used in) provided by operating activities $ (19,250 ) $ 158,473 $ 79,935 $ (31,077 ) $ 188,081 Capital expenditures for property and equipment — (371,067 ) (129,285 ) 31,077 (469,275 ) Investment in subsidiaries 70,047 — — (70,047 ) — Other acquisitions — — (7,744 ) — (7,744 ) Net cash provided by (used in) investing activities 70,047 (371,067 ) (137,029 ) (38,970 ) (477,019 ) Proceeds from borrowings — — 120,000 — 120,000 Repayments of debt obligations — — (255,000 ) — (255,000 ) Distributions to the Partnership’s public unitholders — — (17,636 ) — (17,636 ) RMP common units issued in the Partnership’s June 2016 offering, net of offering costs — — 164,074 — 164,074 Proceeds from issuance of redeemable noncontrolling interests, net of offering costs — — 368,767 — 368,767 RMP common units issued in the Partnership’s ATM program, net of offering costs — — 15,782 — 15,782 Additions to deferred financing costs — — (626 ) — (626 ) Preferred dividends on Series B Units — — (3,576 ) — (3,576 ) Distributions (to) from parent (50,798 ) 224,627 (294,674 ) 70,047 (50,798 ) Net cash (used in) provided by financing activities (50,798 ) 224,627 97,111 70,047 340,987 Increase (decrease) in cash and cash equivalents (1 ) 12,033 40,017 — 52,049 Cash and cash equivalents, beginning of year 2 57,799 15,627 — 73,428 Cash and cash equivalents, end of year $ 1 $ 69,832 $ 55,644 $ — $ 125,477 |