Investor Presentations21.q4cdn.com/271408906/files/doc_presentations/... · Investor Presentation August 2016. Forward-looking Information ... SemGroup and Rose Rock Midstream use

Investor PresentationAugust 2016

Forward-looking InformationCertain matters contained in this presentation include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended,

and Section 21E of the Securities Exchange Act of 1934, as amended. We make these forward-looking statements in reliance on the safe harbor protections

provided under the Private Securities Litigation Reform Act of 1995.

All statements, other than statements of historical fact, included in this presentation including the prospects of our industry, our anticipated financial performance,

our anticipated annual dividend growth rate, management's plans and objectives for future operations, planned capital expenditures, business prospects, outcome

of regulatory proceedings, market conditions and other matters, may constitute forward-looking statements. Although we believe that the expectations reflected in

these forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct. These forward-looking statements are

subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in

these forward-looking statements. Factors that might cause actual results to differ include, but are not limited to, the closing, expected timing, and benefits of the

proposed transaction pursuant to which SemGroup Corporation (“SemGroup”) will acquire all of the outstanding common units of its subsidiary, Rose Rock

Midstream, L.P. (“Rose Rock”), not already owned by SemGroup; the ability of SemGroup to generate sufficient cash flow from operations to enable it to pay its debt

obligations and its current and expected dividends or to fund its other liquidity needs; insufficient cash from operations following the establishment of cash reserves

and payment of fees and expenses for Rose Rock to pay current, expected or minimum quarterly distributions; any sustained reduction in demand for, or supply of,

the petroleum products we gather, transport, process, market and store; the effect of our debt level on our future financial and operating flexibility, including our

ability to obtain additional capital on terms that are favorable to us; our ability to access the debt and equity markets, which will depend on general market conditions

and the credit ratings for our debt obligations and equity; the loss of, or a material nonpayment or nonperformance by, any of our key customers; the amount of cash

distributions, capital requirements and performance of our investments and joint ventures; the amount of collateral required to be posted from time to time in our

purchase, sale or derivative transactions; the impact of operational and developmental hazards and unforeseen interruptions; our ability to obtain new sources of

supply of petroleum products; competition from other midstream energy companies; our ability to comply with the covenants contained in our credit agreements and

the indentures governing our senior notes, including requirements under our credit agreements to maintain certain financial ratios; our ability to renew or replace

expiring storage, transportation and related contracts; the overall forward markets for crude oil, natural gas and natural gas liquids; the possibility that the

construction or acquisition of new assets may not result in the corresponding anticipated revenue increases; changes in currency exchange rates; weather and other

natural phenomena, including climate conditions; a cyber attack involving our information systems and related infrastructure, or that of our business associates; in

the case of SemGroup, the risks and uncertainties of doing business outside of the U.S., including political and economic instability and changes in local

governmental laws, regulations and policies; costs of, or changes in, laws and regulations and our failure to comply with new or existing laws or regulations,

particularly with regard to taxes, safety and protection of the environment; the possibility that our hedging activities may result in losses or may have a negative

impact on our financial results; general economic, market and business conditions; as well as other risk factors discussed from time to time in each of SemGroup’s

and Rose Rock’s documents and reports filed with the SEC.

Readers are cautioned not to place undue reliance on any forward-looking statements contained in this presentation which reflect management's opinions only as of

the date hereof. Except as required by law, we undertake no obligation to revise or publicly release the results of any revision to any forward-looking statements.

SemGroup and Rose Rock Midstream use their Investor Relations website and social media outlets as channels of distribution of material company information.

Such information is routinely posted and accessible on our Investor Relations websites at ir.semgroupcorp.com and ir.rrmidstream.com.

Both companies are present on Twitter and LinkedIn, follow us at the links below:

SemGroup Twitter and LinkedIn Rose Rock Midstream Twitter and LinkedIn

2

In connection with the proposed merger of SemGroup and Rose Rock, SemGroup filed a registration statement on Form S-4 with the Securities and Exchange

Commission (the "Commission") that includes a joint solicitation statement/prospectus and other relevant documents concerning the proposed transaction. YOU

ARE URGED TO READ THE JOINT SOLICITATION STATEMENT/PROSPECTUS AND THE OTHER RELEVANT DOCUMENTS FILED WITH THE

COMMISSION BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT SemGroup, Rose Rock AND THE PROPOSED TRANSACTION. The joint

solicitation statement/prospectus and the other documents filed with the Commission may be obtained free of charge at the Commission’s website, www.sec.gov.

In addition, you may obtain free copies of the joint solicitation statement/prospectus and the other documents filed by SemGroup and Rose Rock with the

Commission by requesting them in writing from SemGroup Corporation, Two Warren Place, 6120 S. Yale Avenue, Suite 700, Tulsa, Oklahoma 74136-4216,

Attention: Investor Relations, or by telephone at (918) 524-8100, or from Rose Rock Midstream, L.P., Two Warren Place, 6120 S. Yale Avenue, Suite 700, Tulsa,

Oklahoma 74136-4216, Attention: Investor Relations, or by telephone at (918) 524-7700.

SemGroup and Rose Rock and their respective directors and executive officers may be deemed under the rules of the Commission to be participants (as defined in

Schedule 14A under the Exchange Act) in respect of the proposed transaction. Information about SemGroup’s directors and execu tive officers and their ownership

of SemGroup common stock is set forth in SemGroup’s proxy statement on Schedule 14A filed on April 13, 2016 with the Commission. Information about the

directors and executive officers and their ownership of RRMS common units representing limited partnership interests is set forth in Rose Rock’s Annual Report on

Form 10-K for the year ended December 31, 2015 filed on February 26, 2016 with the Commission. Information regarding the identity of the potential participants,

and their direct or indirect interests in the proposed transaction, by security holdings or otherwise, is contained in the joint solicitation statement/prospectus and

other materials filed by SemGroup with the Commission, as amended from time to time. Stockholders may obtain additional information about the interests of the

directors and executive officers in the proposed transaction by reading the joint solicitation statement/prospectus.

3

Where You Can Find Additional Information

Non-GAAP Financial Measures

SemGroup

Adjusted EBITDA and cash available for dividends are not U.S. generally accepted accounting principles (GAAP) measures and are not intended to be used in lieu

of GAAP presentation of net income (loss). Adjusted EBITDA and cash available for dividends are presented in this presentation because SemGroup believes they

provide additional information with respect to its performance. Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization,

adjusted for selected items that SemGroup believes impact the comparability of financial results between reporting periods. Although SemGroup presents selected

items that it considers in evaluating its performance, you should also be aware that the items presented do not represent all items that affect comparability

between the periods presented. Variations in SemGroup’s operating results are also caused by changes in volumes, prices, exchange rates, mechanical

interruptions and numerous other factors. These types of variances are not separately identified in this presentation. Cash available for dividends is based on

Adjusted EBITDA, as described above, adjusted to exclude the earnings of our subsidiary, Rose Rock Midstream, cash income taxes, cash interest expense and

maintenance capital expenditures and include cash distributions received from Rose Rock Midstream. Because all companies do not use identical calculations,

SemGroup’s presentations of Adjusted EBITDA and cash available for dividends may be different from similarly titled measures of other companies, thereby

diminishing their utility.

Rose Rock Midstream

This presentation includes the non-GAAP financial measures of Adjusted gross margin, Adjusted EBITDA and distributable cash flow, which may be used

periodically by management when discussing our financial results with investors and analysts. Adjusted gross margin, Adjusted EBITDA and distributable cash

flow are presented as management believes they provide additional information and metrics relative to the performance of our business.

Operating income (loss) is the GAAP measure most directly comparable to Adjusted gross margin, net income (loss) and cash provided by (used in) operating

activities are the GAAP measures most directly comparable to Adjusted EBITDA, and net income (loss) is the GAAP measure most directly comparable to

distributable cash flow. Our non-GAAP financial measures should not be considered as alternatives to the most directly comparable GAAP financial measures.

These non-GAAP financial measures have important limitations as analytical tools because they exclude some, but not all, items that affect the most directly

comparable GAAP financial measures. You should not consider Adjusted gross margin, Adjusted EBITDA or distributable cash flow in isolation or as substitutes

for analysis of our results as reported under GAAP. Because Adjusted gross margin, Adjusted EBITDA and distributable cash flow may be defined differently by

other companies in our industry, our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies,

thereby diminishing their utility.

Management compensates for the limitation of Adjusted gross margin, Adjusted EBITDA and distributable cash flow as analytical tools by reviewing the

comparable GAAP measures, understanding the differences between Adjusted gross margin, Adjusted EBITDA and distributable cash flow, on the one hand, and

operating income (loss), net income (loss) and net cash provided by (used in) operating activities, on the other hand, and incorporating this knowledge into its

decision-making processes. We believe that investors benefit from having access to the same financial measures that our management uses in evaluating our

operating results.

4

Positioned for Long-Term Value Creation

Strong balance sheet, sound business model, clear strategic growth plan

Visibility to incremental secure cash flow from Maurepas Pipeline in early 2017

Pursuing high-return organic growth around existing footprints and strategic acquisitions

Managing for “lower for longer” commodity price environment with focus on diversifying

for a more balanced midstream portfolio

Enhanced credit profile, dividend growth beyond 2016 and lower cost of capital to support

growth targets

5

Pro Forma SemGroup Positioned for Long-Term Success

Immediately accretive to SemGroup shareholders

Targeting pro forma 8% compound annual dividend growth rate and dividend coverage of

over 1.5x through 2018

Increased retained cash flows strengthens dividend growth outlook and provides

financial flexibility to execute on strategic growth plan

Strengthens outlook in a “lower for longer” environment

SemGroup expected to benefit from an improved cost of and access to capital

C-Corp structure expected to attract a broader universe of investors

Increased public float of SemGroup will raise trading liquidity

SemGroup will receive tax benefits from the asset step-up and, combined with current

NOLs, does not anticipate being a significant U.S. cash taxpayer through 2020(1)

Ownership of 100% of Rose Rock’s EBITDA

One public entity with simplified governance

Allows SemGroup to maintain expected leverage levels going forward; targeting leverage

of 4.5x or better

Expected to be viewed ratings positive by ratings agencies

No significant debt maturities until 2021

Improved Credit

Profile

Value Enhancing

& Stronger

Long-Term Growth

Outlook

Simplified

Structure

Improved Cost of

Capital and Capital

Markets Access

(1) Assumes projected accelerated tax depreciation for future capital expenditures and no significant acquisitions or

divestments during the forecast period

6

SemGroup Company Strengths

88% of total LTM gross margin from fixed-fee based cash flows

35% of total LTM gross margin secured by take-or-pay contracts

17%

65%

18%

30%

55%

15%

74%

14%

12%

19%

68%

13%

$0

$100

$200

$300

$400

$500

$600

2014 2015 LTM

($ in millions)

Take or Pay Fixed Fee (non TOP) POP/Marketing

64%

23%

13%

59%

30%

11%

53%

35%

12%

More than 70% of SemGroup's revenue is derived frominvestment grade counterparties

Investment Grade Non-Investment Grade

29%

71%

(1)

Stable Cash Flows Counterparty Strength(1)(2)

SemGroup derives a significant portion of its margin from fixed-fee contracted arrangements

with strong counterparties; SemGroup is well-positioned to drive future growth

(1) LTM June 30, 2016

(2) Counterparty ratings LTM June 30, 2016 excludes SemLogistics and SemMaterials Mexico

7

Illustrative Pro Forma Organizational Structure

SemGroup Status Quo SemGroup Pro Forma

GP &

IDRs +

20.7mm

LP units

16.3mm

units(1)

Rose Rock

Rose Rock

Unitholders

SemGroup

Shareholders

SemGroup

Rose Rock Operating

Subsidiaries

SemGroup Operating

Subsidiaries

100%

SemGroup

SemGroup

Shareholders

SemGroup Operating

Subsidiaries

Rose Rock and Rose

Rock Operating

Subsidiaries

Transaction simplifies SemGroup’s corporate structure

SemGroup

acquires

Rose Rock

public units

100%

(1) Includes unvested restricted units

8

Crude and Gas Assets in Key Growth Areas

9

Crude Business Overview

White Cliffs Pipeline – 51% ownership

DJ Basin to Cushing, OK

Two 527-mile, 12-inch pipelines

150,000 bpd current capacity

Expanding capacity to approximately 215,000 bpd

– Expected completion third quarter 2016

Wattenberg Oil Trunkline

75-mile, 12-inch pipeline and storage in DJ Basin

Transports Noble Energy production to White Cliffs

360,000 barrels of storage capacity

Platteville Truck Unloading Facility

30-lane truck unloading facility

Origin of White Cliffs Pipeline


Tampa Pipeline

16-mile, 12-inch pipeline from Platteville to Tampa, CO rail facility

DJ Basin

10

(1) Average remaining contract life as of 6/30/2016(2) Average Rate ($/bbl)(3) FERC Filing No. 4.2.0(4) Shipper receives credit for the committed volumes towards their uncommitted volume incentive rate

White Cliffs Pipeline Contract & Rate Structure

11

Committed Take or Pay Volumes

Origination Volumes (bpd) Rate ($/bbl)

Wtd. Avg.

Remaining

Contract Life(1)

Platteville, CO 72,000 $5.20 ~ 3.5 years

Healy, KS 5,000 $2.09 ~ 5.1 years

77,000 $5.00(2) ~ 3.7 years

Uncommitted Volumes(3)

Volumes (bpd) Incentive Rate ($/bbl)

0 – 9,999 $4.90

10,000 – 19,999 $4.65

20,000 – 29,999 $4.40

30,000 – 39,999 $4.15

40,000 – 49,999 $3.90

50,000 and up $3.65

Shipper Example - 1 Month51,000 bpd shipped during the month, 10,000 of those barrels are committed volumes

Below is an example the shipper’s tariff structure

Total Volumes

(bpd)Rate ($/bbl)

Committed

Volumes10,000 $5.20

Uncommitted

Volumes41,000 $3.65(4)

51,000 $4.43(2)

All Uncommitted Volumes Shipped At Lowest Applicable Incentive Rate

Crude Business Overview

Cushing Storage

7.6 million barrels of storage

82% under long-term fixed fee contracts with first

expiration 2017

2016 average storage rate of $0.34 per month

Connectivity to all major inbound/outbound pipelines

Kansas/Oklahoma System

390-mile gathering and transportation pipeline system

Connects to third-party pipelines, Kansas and

Oklahoma refineries and Cushing terminal

More than 630,000 barrels of storage capacity

Oklahoma/Kansas Assets

Field Services

Crude Oil Trucking Fleet

Fleet of more than 270 crude oil transport trucks

Servicing the Bakken, DJ/Niobrara, Eagle Ford,

Granite Wash, Mississippi Lime, Permian and Utica

plays

12

Glass Mountain Pipeline – 50% ownership

215-mile pipeline

140,000 bpd current capacity

Two laterals – Granite Wash and Mississippi Lime Play join

and terminate in Cushing


Isabel Pipeline

48 mile, 8-inch crude oil pipeline from Isabel Junction, KS

to Alva, OK

Connects Kansas barrels to Glass Mountain Pipeline

2015 2016

Crude Key Performance Metrics

(1) Weighted average term of storage contracts(2) Prior period volumes recast to include intersegment volumes for comparability(3) Volumes on pipelines 100% owned by RRMS(4) Reflects 100% throughput on Joint Venture pipelines

Transportation Volumes(Thousand Barrels per Day)

Supply and Logistics Volumes(2)

(Thousand Barrels per Day)

Facilities - Cushing Storage 7.6 million Barrels Capacity

Joint Venture Transportation Volumes(Thousand Barrels per Day)(4)

n Third-party contracted(1) n Operational / Marketing n Uncontracted

n White Cliffs Pipeline n Glass Mountain Pipeline

0.7

2015 2016

2015 2016

187.9

212.3 201.0 201.1 196.2

n Pipelines(3)n Field Services

197.6

13

SemGas Areas of Operation Northern Oklahoma Average Processed Volume (mmcf/d)

Located in liquids rich oil plays

Five processing facilities - 595 mmcf/d of current capacity

1,000 miles of gathering lines

Inventory of drilled but uncompleted wells to support production volumes

SemGas Natural Gas Business

14

2015 2016

SemCAMS Natural Gas Business

SemCAMS Areas of OperationAverage Throughput Volume (mmcf/d)

Located in:

– Western Canadian Sedimentary Basin – sour gas

– Montney – liquids rich sour gas

– Duvernay – liquids rich sweet gas

600 miles of transport and gathering lines

Strong incumbent position to serve industry’s growing

infrastructure needs

15

384.7394.4 385.3348.0 373.4

2015 2016

Capacity n K3 Plant n KA Plant

304.1

Maurepas Pipeline Overview

Project Construct, own and operate three pipelines for Motiva Enterprises, LLC in St. James, LA connecting Motiva's refineries

– 24-inch, 34 mile crude oil pipeline connected to LOCAP, crossing the Mississippi River and terminating at Motiva's Norco refinery;

– 12-inch, 35 mile intermediates pipeline between Motiva's Norco and Convent refineries;

– 6-inch, 35 mile intermediates pipeline between Motiva's Norco and Convent refineries

This pipeline project is supported by multi-decade transportation agreements with Motiva and is part of an overall refinery

optimization project

Strategic Rationale First step in establishing a SemGroup presence in US Gulf Coast crude markets and it provides a more balanced risk

profile through geographic diversity, new customer base and potential for product expansion

Platform for future participation in the build-out of infrastructure in the Gulf Coast

Accomplishes strategic goal of becoming more refinery facing

Project Progress Construction has begun on all fronts

Expected to be operational in early 2017

16

Maurepas Pipeline Construction

17

Maurepas Pipeline Area Map

18

2016 Capital Expenditure Guidance

2016 Capital Expenditures – $455 million

n Maurepas Pipeline

n Rose Rock Midstream(1)

n Natural Gas

n Other Growth Projects

n Maintenance

$325

10%

72%

1%

12%

$45

$5

$55

Key Committed Projects

Crude Projects- Maurepas Pipeline (expected completion early 2017): $325 million

- Isabel Pipeline (completed March 2016): $9 million

Natural Gas Projects- Northern OK well connects & compression: $15 million

- KA Plant Projects: $18 million

- Wapiti Pipeline Expansion (expected completion 3Q 2016): $9 million

Maintenance Capital- SemGroup: $45 million

- Rose Rock: $10 million

Focus to complete projects already in progress and maintain existing assets

Prudent organic capital investments at attractive EBITDA

multiples

$255%

(1) Includes investments in Glass Mountain Pipeline and White Cliffs Pipeline

19

Second Quarter 2016 Adjusted EBITDA(1)

(1) Non-GAAP Financial Data Reconciliations are included in the Appendix to this presentation

(2) SemGroup includes fully consolidated Rose Rock Midstream

(3) Rose Rock Transportation segment adjusted EBITDA includes equity method investments on a cash basis

Segment Adjusted EBITDA

(in millions, unaudited) 2Q 2016 1Q 2016

Crude - Transportation $27.1 $32.0

Crude - Facilities 9.4 9.6

Crude - Supply and Logistics 10.1 9.3

SemGas 12.5 12.4

SemCAMS 9.3 10.3

SemLogistics 2.2 2.8

SemMaterials Mexico 2.6 2.6

Corporate and Other (5.6) (1.3)

SemGroup(2) $67.6 $77.7

Transportation(3) $27.8 $31.8

Facilities 9.4 9.6

Supply and Logistics 10.1 9.3

Corporate and Other (2.4) (1.7)

Rose Rock Midstream $44.9 $49.0

20

Leverage & Liquidity

SemGroup(1) Rose Rock

(in millions, unaudited) June 30, 2016 June 30, 2016

$500 million revolver - 2018

$585 million revolver - 2018 $41.0

7.500% Senior unsecured notes - 2021 $300.0

5.625% Senior unsecured notes - 2022 400.0

5.625% Senior unsecured notes - 2023 350.0

Total consolidated debt $300.0 $791.0

Compliance leverage ratio(2) 0.4x 4.2x

Target leverage 3.0x 4.5x

Liquidity:

Cash and cash equivalents(3) $226.5 $7.9

Revolver availability(4) 494.0 506.3

Total liquidity $720.5 $514.2

(1) SemGroup stand-alone basis

(2) Calculated per revolving credit agreement definitions; maximum total leverage covenant of 5.5x

(3) SemGroup cash excludes Rose Rock and SemMaterials Mexico

(4) Revolver availability excludes outstanding letters of credit

$1.2 Billion of Combined Liquidity

21

SemGroup’s Fee-based Business Model

Margin Descriptions

Fixed Fee– Storage fees

– Transportation fees

– Unloading fees

– Gathering and processing fees

Variable Fee

– Gas processing – percent of

proceeds

Marketing

– Back-to-back marketing and

blending transactions

(1) LTM June 30, 2016

Fixed Fee Variable Fee Marketing

SemGas 75% 25%

SemCAMS 100%

SemLogistics 100%

SemMaterials Mexico 100%

White Cliffs Pipeline 100%

Rose Rock Midstream 84% 16%

Margin Contribution(1)

n Fixed Fee n Variable Fee n Marketing

88%

7%

5%

22

23

A Look Ahead

Strong Balance

Sheet

High Return Growth

Projects & Strategic

Acquisitions

Focus on Portfolio

Balance and Secure

Cash Flows

Dividend Growth

Beyond 2016

APPENDIX

SemGroup Non-GAAP Adjusted EBITDA Calculation

(in thousands, unaudited) Three Months Ended Six Months Ended

June 30, March 31, June 30,

Reconciliation of net income to Adjusted EBITDA: 2016 2015 2016 2016 2015

Net income (loss) $ 9,931 $ 28,433 $ (6,248) $ 3,683 $ 34,209

Add: Interest expense 18,875 16,822 18,935 37,810 31,413

Add: Income tax expense (benefit) 4,658 14,861 (21,407) (16,749) 19,603

Add: Depreciation and amortization expense 25,048 24,674 24,047 49,095 48,408

EBITDA 58,512 84,790 15,327 73,839 133,633

Selected Non-Cash Items and Other Items Impacting Comparability 9,121 (4,764) 62,340 71,461 16,375

Adjusted EBITDA $ 67,633 $ 80,026 $ 77,667 $ 145,300 $ 150,008

Selected Non-Cash Items andOther Items Impacting Comparability

Loss on disposal or impairment, net $ 1,685 $ 1,372 $ 13,307 $ 14,992 $ 2,430

Loss from discontinued operations, net of income taxes 2 2 2 4 2

Foreign currency transaction (gain) loss 1,543 (295) 1,469 3,012 (814)

Remove NGL equity losses (earnings) including loss (gain) on issuance of common units — (12,117) (2,191) (2,191) (11,812)

Remove loss (gain) on sale or impairment of NGL units (9,120) (6,623) 39,764 30,644 (14,517)

NGL cash distribution — 4,468 4,873 4,873 9,483

M&A transaction related costs — — — — 10,000

Inventory valuation adjustments — 48 — — 1,235

Employee severance and relocation expense 836 21 259 1,095 21

Unrealized loss (gain) on derivative activities 4,477 (1,415) (4,548) (71) 1,230

Depreciation and amortization included within equity earnings 7,138 6,346 6,539 13,677 12,722

Bankruptcy related expenses — 2 — — 191

Non-cash equity compensation 2,560 3,427 2,866 5,426 6,204

Selected Non-Cash items andOther Items Impacting Comparability $ 9,121 $ (4,764) $ 62,340 $ 71,461 $ 16,375

25

SemGroup Non-GAAP Financial Data Reconciliations



2016 2015 2016 2016 2015

Net income $ 11,797 $ 10,844 $ 19,296 $ 31,093 $ 26,594

Add: Interest expense 193 101 264 457 257


EBITDA 18,161 19,983 25,419 43,580 44,507

Selected Non-Cash Items and Other Items Impacting Comparability 8,954 6,324 6,606 15,560 12,855

Adjusted EBITDA $ 27,115 $ 26,307 $ 32,025 $ 59,140 $ 57,362

Selected Non-Cash Items and Other Items Impacting Comparability

Loss (gain) on disposal or impairment, net $ 1,714 $ (22) $ 67 $ 1,781 $ 133

Employee severance and relocation expense 102 — — 102 —

Depreciation and amortization included withinequity earnings 7,138 6,346 6,539 13,677 12,722

Selected Non-Cash items andOther Items Impacting Comparability $ 8,954 $ 6,324 $ 6,606 $ 15,560 $ 12,855

26

Crude - Transportation Segment




2016 2015 2016 2016 2015

Net income $ 7,450 $ 6,557 $ 7,703 $ 15,153 $ 13,590


EBITDA 9,371 7,963 9,587 18,958 16,365

Selected Non-Cash Items and Other Items Impacting Comparability 4 — — 4 —

Adjusted EBITDA $ 9,375 $ 7,963 $ 9,587 $ 18,962 $ 16,365


Employee severance expense $ 4 $ — $ — $ 4 $ —

Selected Non-Cash items andOther Items Impacting Comparability $ 4 $ — $ — $ 4 $ —

27

Crude - Facilities Segment




2016 2015 2016 2016 2015

Net income $ 5,370 $ 12,241 $ 13,461 $ 18,831 $ 14,753


Add: Depreciation and amortization expense 40 40 40 80 79

EBITDA 5,592 12,393 13,641 19,233 15,043

Selected Non-Cash Items and Other Items Impacting Comparability 4,477 (1,346) (4,321) 156 2,369

Adjusted EBITDA $ 10,069 $ 11,047 $ 9,320 $ 19,389 $ 17,412


Loss (gain) on disposal or impairment, net $ — $ — $ 227 $ 227 $ (3)

Employee severance expense — 21 — — 21

Unrealized loss (gain) on derivative activities 4,477 (1,415) (4,548) (71) 1,116

Inventory valuation adjustments — 48 — — 1,235

Selected Non-Cash items andOther Items Impacting Comparability $ 4,477 $ (1,346) $ (4,321) $ 156 $ 2,369

28

Crude - Supply and Logistics Segment




2016 2015 2016 2016 2015

Net income (loss) $ (321) $ 7,043 $ (13,469) $ (13,790) $ 11,934



EBITDA 12,304 17,671 (992) 11,312 32,551

Selected Non-Cash Items and Other Items Impacting Comparability 256 1,778 13,391 13,647 1,978

Adjusted EBITDA $ 12,560 $ 19,449 $ 12,399 $ 24,959 $ 34,529


Loss (gain) on disposal or impairment, net $ (1) $ 1,450 $ 13,052 $ 13,051 $ 1,449

Employee severance expense 13 — — 13 —

Non-cash equity compensation 244 328 339 583 529

Selected Non-Cash items andOther Items Impacting Comparability $ 256 $ 1,778 $ 13,391 $ 13,647 $ 1,978

29

SemGas Segment




2016 2015 2016 2016 2015

Net income $ 2,021 $ 915 $ 2,756 $ 4,777 $ 2,114


Add: Income tax expense 451 616 965 1,416 1,167


EBITDA 9,001 7,835 9,898 18,899 15,763

Selected Non-Cash Items and Other Items Impacting Comparability 381 697 383 764 1,121

Adjusted EBITDA $ 9,382 $ 8,532 $ 10,281 $ 19,663 $ 16,884


Foreign currency transaction (gain) loss $ (1) $ 145 $ 6 $ 5 $ 101

Non-cash equity compensation 382 552 377 759 1,020

Selected Non-Cash items andOther Items Impacting Comparability $ 381 $ 697 $ 383 $ 764 $ 1,121

30

SemCAMS Segment




2016 2015 2016 2016 2015

Net income (loss) $ (1,447) $ 103 $ (246) $ (1,693) $ (1,823)


Add: Income tax expense (benefit) (273) 167 59 (214) (202)


EBITDA 616 2,867 2,149 2,765 3,077

Selected Non-Cash Items and Other Items Impacting Comparability 1,562 (674) 687 2,249 131

Adjusted EBITDA $ 2,178 $ 2,193 $ 2,836 $ 5,014 $ 3,208


Foreign currency transaction loss (gain) $ 1,391 $ (873) $ 510 $ 1,901 $ (222)


Selected Non-Cash items andOther Items Impacting Comparability $ 1,562 $ (674) $ 687 $ 2,249 $ 131

31

SemLogistics Segment




2016 2015 2016 2016 2015

Net income $ 1,187 $ 3,199 $ 696 $ 1,883 $ 6,210

Add: Interest expense — 2 — — 2

Add: Income tax expense 194 764 607 801 1,754

Add: Depreciation and amortization expense 949 1,037 941 1,890 2,090

EBITDA 2,330 5,002 2,244 4,574 10,056

Selected Non-Cash Items and Other Items Impacting Comparability 244 260 370 614 479

Adjusted EBITDA $ 2,574 $ 5,262 $ 2,614 $ 5,188 $ 10,535


Gain on disposal of long-lived assets, net $ (28) $ — $ (39) $ (67) $ (19)

Foreign currency transaction loss 153 94 256 409 225


Selected Non-Cash items andOther Items Impacting Comparability $ 244 $ 260 $ 370 $ 614 $ 479

32

SemMaterials México Segment




2016 2015 2016 2016 2015

Net loss $ (16,126) $ (12,469) $ (36,445) $ (52,571) $ (39,163)


Add: Income tax expense (benefit) 4,286 13,314 (23,038) (18,752) 16,884

Add: Depreciation and amortization expense 496 453 490 986 864

EBITDA 1,137 11,076 (46,619) (45,482) (3,729)

Selected Non-Cash Items and Other Items Impacting Comparability (6,757) (11,803) 45,224 38,467 (2,558)

Adjusted EBITDA $ (5,620) $ (727) $ (1,395) $ (7,015) $ (6,287)


Loss (gain) on disposal or impairment, net $ — $ (56) $ — $ — $ 870

Loss from discontinued operations, net of income taxes 2 2 2 4 2

Foreign currency transaction (gain) loss — 339 697 697 (918)

Remove NGL equity earnings including gain on issuance of common units — (12,117) (2,191) (2,191) (11,812)

Remove loss (gain) on impairment or sale of NGL units (9,120) (6,623) 39,764 30,644 (14,517)

NGL cash distribution — 4,468 4,873 4,873 9,483

M&A transaction related costs — — — — 10,000

Employee severance and relocation expense 717 — 259 976 —

Unrealized loss on derivative activities — — — — 114

Bankruptcy related expenses — 2 — 191

Non-cash equity compensation 1,644 2,182 1,820 3,464 4,029

Selected Non-Cash items andOther Items Impacting Comparability $ (6,757) $ (11,803) $ 45,224 $ 38,467 $ (2,558)

33

Corporate & Other Segment

Rose Rock Midstream Non-GAAP Financial Data Reconciliations



2016 2015 2016 2016 2015

Reconciliation of operating income to Adjusted gross margin:

Operating income $ 22,356 $ 27,260 $ 38,905 $ 61,261 $ 49,866

Add:

Operating expense 19,726 23,678 21,407 41,133 44,477

General and administrative expense 5,428 6,329 4,900 10,328 11,949

Depreciation and amortization expense 8,235 10,608 7,893 16,128 20,751

Loss (gain) on disposal or impairment, net 1,714 (22) 294 2,008 130

Less:

Earnings from equity method investments 17,078 17,683 20,839 37,917 38,547

Non-cash unrealized gain (loss) on derivatives, net (4,477) 1,415 4,548 71 (1,116)

Adjusted gross margin $ 44,858 $ 48,755 $ 48,012 $ 92,870 $ 89,742

Reconciliation of net income to Adjusted EBITDA:

Net income $ 9,922 $ 17,068 $ 26,468 $ 36,390 $ 31,668

Add:

Interest expense 12,434 10,197 12,437 24,871 18,203


Cash distributions from equity method investments 24,782 25,560 26,913 51,695 51,625

Inventory valuation adjustment — 48 — — 1,235

Provision for uncollectible accounts receivable — — 38 38 —



Less:


Impact from derivative instruments: —

Total gain (loss) on derivatives, net (7,127) (2,202) 3,354 (3,773) (2,846)

Total realized gain (loss) (cash flow) on derivatives, net 2,650 3,617 1,194 3,844 1,730


Adjusted EBITDA $ 44,852 $ 44,718 $ 49,021 $ 93,873 $ 86,836

34




2016 2015 2016 2016 2015

Reconciliation of net cash provided by operating activities to Adjusted EBITDA:

Net cash provided by operating activities $ 14,080 $ 26,941 $ 14,530 $ 28,610 $ 19,871

Less:

Changes in operating assets and liabilities, net (11,462) (386) (16,811) (28,273) (36,894)

Add:

Interest expense, excluding amortization of debt issuance costs 11,606 9,515 11,606 23,212 16,994

Distributions from equity method investments in excess of equity in earnings 7,704 7,876 6,074 13,778 13,077

Adjusted EBITDA $ 44,852 $ 44,718 $ 49,021 $ 93,873 $ 86,836

35

Transportation Segment




2016 2015 2016 2016 2015



Add:





Less:




Net income $ 12,057 $ 10,845 $ 19,469 $ 31,526 $ 26,595

Add:

Interest expense 193 101 264 457 257


Cash distributions from equity method investments 24,782 25,560 26,913 51,695 51,625

Provision for uncollectible accounts receivable — — 38 38 —


Less:


Adjusted EBITDA $ 27,839 $ 27,839 $ 31,771 $ 59,610 $ 57,719

36

Facilities Segment


(in thousands, unaudited)Three Months Ended Six Months Ended


2016 2015 2016 2016 2015



Add:




Gain on disposal or impairment, net — — — — (34)



Net income $ 7,450 $ 6,557 $ 7,703 $ 15,153 $ 13,590

Add:


Adjusted EBITDA $ 9,371 $ 7,963 $ 9,587 $ 18,958 $ 16,365

37

Supply and Logistics Segment




2016 2015 2016 2016 2015



Add:

Operating expense 689 155 838 1,527 348

General and administrative expense 503 233 566 1,069 396

Depreciation and amortization expense 40 40 40 80 79

Loss (gain) on disposal or impairment, net — — 227 227 (3)

Less:




Net income $ 5,370 $ 12,241 $ 13,461 $ 18,831 $ 14,753

Add:

Interest expense 182 112 140 322 211


Inventory valuation adjustment — 48 — — 1,235

Loss (gain) on disposal or impairment, net — — 227 227 (3)

Less:

Impact from derivative instruments:

Total gain (loss) on derivatives, net (7,127) (2,202) 3,354 (3,773) (2,846)

Total realized gain (loss) (cash flow) on derivatives, net 2,650 3,617 1,194 3,844 1,730


Adjusted EBITDA $ 10,069 $ 11,026 $ 9,320 $ 19,389 $ 17,391

38

Corporate and Other Segment




2016 2015 2016 2016 2015


Operating loss $ (2,896) $ (2,596) $ (2,132) $ (5,028) $ (5,540)

Add:

Operating expense (1) (2) — (1) 5



Adjusted gross margin $ — $ — $ — $ — $ —


Net loss $ (14,955) $ (12,575) $ (14,165) $ (29,120) $ (23,270)

Add:

Interest expense 12,059 9,984 12,033 24,092 17,735



Adjusted EBITDA $ (2,427) $ (2,110) $ (1,657) $ (4,084) $ (4,639)

39

Documents

Investor Presentations21.q4cdn.com/271408906/files/doc_presentations/... · Investor Presentation August 2016. Forward-looking Information ... SemGroup and Rose Rock Midstream use