SemGroup Corporation Reports Third Quarter 2012 Results

SemGroup Corporation Reports Third Quarter 2012 Results

Third Quarter Adjusted EBITDA Increased 9% Over Previous Quarter; Capex
Guidance Increases 28%

TULSA, Okla., Nov. 8, 2012 (GLOBE NEWSWIRE) -- SemGroup^® Corporation
(NYSE:SEMG) ("SemGroup") today announced its financial results for the three
months ended September 30, 2012.

SemGroup's adjusted earnings before interest, taxes, depreciation and
amortization ("Adjusted EBITDA") was $32.9 million for the third quarter 2012,
compared to $30.3 million for the second quarter 2012 and $29.1 million for
the third quarter 2011. Key factors impacting our results, compared to the
second quarter 2012, included an increase in marketing and transportation
margin in our crude segment and a 4% increase in volumes at White Cliffs
Pipeline. Adjusted EBITDA, which is a non-GAAP measure, is defined and
reconciled to net income below.

Management is maintaining the company's 2012 Adjusted EBITDA guidance of $125
to $135 million. We continue to experience a strong performance in our crude
segment. However, we anticipate being at the lower end of our guidance range
due to low natural gas and natural gas liquids prices as well as ongoing
challenges in the European storage market throughout this year. The company is
increasing its capital expenditure guidance to $230 million for 2012, as a
result of an increased ownership of the Glass Mountain Pipeline and the
previously announced White Cliffs Pipeline expansion.

SemGroup reported revenues for third quarter 2012 of $277.9 million with net
loss attributable to SemGroup of $2.8 million, or loss of $0.07 per share,
compared to revenues of $331.1 million with net income attributable to
SemGroup of $5.1 million, or $0.12 per share for the second quarter 2012. For
the third quarter 2011, revenues totaled $391.5 million with net income of
$14.3 million, or $0.34 per share. Third quarter 2012 operating income
increased over the second quarter 2012 and the third quarter 2011. However,
net income was negatively affected by $16.4 million of non-cash items during
the current period. SemGroup recognized a non-cash expense of $9.5 million
related to a change in the fair value of warrants and a net loss from equity
earnings of NGL Energy Partners LP (NGL) of $6.9 million, primarily driven by
their seasonal business as well as one-time charges related to an acquisition
which were recorded by NGL in the quarter ending June 30, 2012.

Recent Developments

  *White Cliffs Pipeline completed a successful open season and received
    sufficient binding shipper commitments and necessary partner approvals to
    move forward with its expansion project which will allow the company to
    provide additional crude oil transportation service from Platteville,
    Colorado, to Cushing, Oklahoma.
  *We now own 50% of the previously announced Glass Mountain Pipeline. The
    pipeline project is on track and will have an initial capacity of
    approximately 140,000 barrels per day and 440,000 barrels of intermediate
    storage. We expect to have the pipeline up and running by the end of 2013.
  *On September 12, 2012, we signed a purchase and sale agreement to sell our
    SemStream Arizona Propane assets to J.P. Energy Partners, L.P.

"We continue to execute on our long-term strategic growth plans, focused on
infrastructure demands in the midcontinent," said Norm Szydlowski, president
and chief executive officer of SemGroup. "We're increasing our presence in our
key growth areas. As the demand for midstream services continues to grow, our
projects like the expansion of White Cliffs Pipeline, the previously announced
Glass Mountain Pipeline and the Wattenberg Oil Trunkline will help meet this
need," said Szydlowski.

Earnings Conference Call

SemGroup will host a conference call for investors tomorrow, November 9, 2012,
at 11 a.m. EST. The call can be accessed live over the telephone by dialing
877.359.3652, or for international callers, 720.545.0014. The pass code for
the call is 34165494. Interested parties may also listen to a simultaneous
webcast of the conference call by logging onto SemGroup's Investor Relations
website at ir.semgroupcorp.com. A replay of the webcast will also be available
for a year following the call at ir.semgroupcorp.com on the Calendar of
Events-Past Events page. The third quarter 2012 earnings slide deck will be
posted under Presentations.

About SemGroup

Based in Tulsa, OK, SemGroup^® Corporation (NYSE:SEMG) is a publicly traded
midstream service company providing the energy industry the means to move
products from the wellhead to the wholesale marketplace. SemGroup provides
diversified services for end-users and consumers of crude oil, natural gas,
natural gas liquids, refined products and asphalt. Services include
purchasing, selling, processing, transporting, terminalling and storing
energy.

SemGroup^®, SemGas^®, SemMaterialsMèxico^MR, SemStream^® and White Cliffs
Pipeline^® are registered trademarks of SemGroup Corporation.

The SemGroup Corporation logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=14815

Non-GAAP Financial Measures

Adjusted EBITDA is not a generally accepted accounting principles (GAAP)
measure and is not intended to be used in lieu of a GAAP presentation of net
income/loss. Adjusted EBITDA is presented in this Press Release because
SemGroup believes it provides additional information with respect to its
financial performance and its ability to meet future debt service, capital
expenditures and working capital requirements. 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 Press Release. Because all companies do not use
identical calculations, SemGroup's presentation of Adjusted EBITDA may be
different from similarly titled measures of other companies. Reconciliations
of net income (loss) to Adjusted EBITDA for the periods presented are included
in the tables at the end of this Press Release.

Forward-Looking Statements

Certain matters contained in this Press Release 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
Press Release including the prospects of our industry, our anticipated
financial performance, NGL Energy Partners LP (NYSE:NGL) anticipated financial
performance, management's plans and objectives for future operations, 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, our ability to comply with the covenants contained in and maintain certain
financial ratios required by our credit facilities; NGL's operations, which we
do not control; the ability of our subsidiary, Rose Rock Midstream L.P.
(NYSE:RRMS), to make minimum quarterly distributions; the possibility that our
hedging activities may result in losses or may have a negative impact on our
financial results; any sustained reduction in demand for the petroleum
products we gather, transport, process and store; our ability to obtain new
sources of supply of petroleum products; our failure to comply with new or
existing environmental laws or regulations or cross border laws or
regulations; the possibility that the construction or acquisition of new
assets may not result in the corresponding anticipated revenue increases; any
future impairment to goodwill resulting from the loss of customers or
business; changes in currency exchange rates; and 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,
as well as other risk factors discussed from time to time in each of our
documents and reports filed with the SEC.

Readers are cautioned not to place undue reliance on any forward-looking
statements contained in this Press Release, 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.

Condensed Consolidated Balance Sheets
(in thousands, unaudited)
                                                      
                                         September30, December31,
                                          2012          2011
ASSETS                                                 
Current assets                            $496,431    $389,735
Property, plant and equipment, net        800,231       733,925
Goodwill and other intangible assets      18,137        18,403
Equity method investments                 378,522       327,243
Other noncurrent assets, net              17,744        21,875
Total assets                              $1,711,065  $1,491,181
LIABILITIES AND OWNERS' EQUITY                         
Current liabilities:                                   
Current portion of long-term debt         $2,096      $26,058
Other current liabilities                 364,443       270,453
Total current liabilities                 366,539       296,511
Long-term debt, excluding current portion 189,569       83,277
Other noncurrent liabilities              153,605       132,728
Total liabilities                         709,713       512,516
Total owners' equity                      1,001,352     978,665
Total liabilities and owners' equity      $1,711,065  $1,491,181



Condensed Consolidated Statements of Operations
(in thousands, except per share amounts, unaudited)
                                                                
                        Three Months Ended               Nine Months Ended
                        September 30,         June 30,   September 30,
                        2012       2011       2012       2012       2011
Revenues                 $277,852 $391,522 $331,113 $921,660 $
                                                                     1,135,087
Expenses:                                                        
Costs of products sold,
exclusive of             189,830    313,490    219,282    651,283    896,871
depreciation and
amortization shown below
Operating                52,367     41,772     82,378     172,750    116,384
General and              16,680     16,883     16,563     53,073     56,443
administrative
Depreciation and         12,081     12,894     11,881     35,687     38,355
amortization
Loss (gain) on disposal
or impairment of         (3,615)    —          119        (3,496)    (136)
long-lived assets, net
Total expenses           267,343    385,039    330,223    909,297    1,107,917
Earnings from equity     3,116      4,016      12,289     22,903     10,166
method investments
Operating income         13,625     10,499     13,179     35,266     37,336
Other expenses (income), 11,701     (5,834)    5,587      24,904     31,327
net
Income from continuing
operations before income 1,924      16,333     7,592      10,362     6,009
taxes
Income tax (benefit)     2,091      1,308      (93)       985        3,202
expense
Income (loss) from       (167)      15,025     7,685      9,377      2,807
continuing operations
Loss from discontinued
operations, net of       (265)      (686)      (442)      (456)      (735)
income taxes
Net income (loss)        (432)      14,339     7,243      8,921      2,072
Less: net income
attributable to          2,336      —          2,096      7,915      —
noncontrolling interests
Net income (loss)
attributable to SemGroup $(2,768)  $14,339  $5,147   $1,006   $2,072
Corporation
Net income (loss)
attributable to SemGroup $(2,768)  $14,339  $5,147   $1,006   $2,072
Corporation
Other comprehensive
income (loss), net of    12,072     (18,103)   (9,897)    14,930     (11,465)
income taxes
Comprehensive income
(loss) attributable to   $9,304   $(3,764)  $(4,750)  $15,936  $(9,393)
SemGroup Corporation
Net income (loss)
attributable to SemGroup                                         
Corporation per common
share:
Basic                    $(0.07)   $0.34    $0.12    $0.02    $0.05
Diluted                  $(0.07)   $0.34    $0.12    $0.02    $(0.15)
Weighted average shares                                          
(thousands):
Basic                    41,949     41,642     41,934     41,930     41,621
Diluted                  42,234     41,958     42,133     42,182     41,621

                                                                
                                                                
Reconciliation of net                                            
income to Adjusted EBITDA:
(in thousands, unaudited)                                        
                                                                
                           Three Months Ended             Nine Months Ended
                          September 30,        June 30,  September 30,
                          2012      2011       2012      2012      2011
Net income (loss)           $(432)  $14,339  $7,243  $8,921  $2,072
Add: Interest expense       1,992     6,013      2,112     7,763     49,321
Add: Income tax (benefit)   2,091     1,308      (93)      985       3,202
expense
Add: Depreciation and       12,081    12,894     11,881    35,687    38,355
amortization expense
EBITDA                      15,732    34,554     21,143    53,356    92,950
Selected Non-Cash Items and
Other Items Impacting       17,205    (5,426)    9,121     37,957    (9,237)
Comparability
Adjusted EBITDA             $32,937 $29,128  $30,264 $91,313 $83,713
                                                                
                                                                
Selected Non-Cash Items and                                      
Other Items Impacting                                            
Comparability
(in thousands, unaudited)                                        
                                                                
                          Three Months Ended             Nine Months Ended
                          September 30,        June 30,  September 30,
                          2012      2011       2012      2012      2011
Loss (gain) on disposal or
impairment of long-lived    $(3,615) $--      $119    $(3,496) $(136)
assets
Loss (income) from          265       686        442       456       735
discontinued operations
Foreign currency            355       (2,874)    (34)      358       (3,430)
transaction (gain) loss
Remove NGL equity earnings  6,905     —          (3,828)   2,150     —
NGL cash distribution       2,090     —          1,812     5,063     —
Employee severance expense  —         —          (27)      354       4,374
Unrealized (gain) loss on   (554)     (2,301)    (24)      (432)     (9,394)
derivative activities
Change in fair value of     9,544     (4,684)    3,552     17,083    (8,258)
warrants
Reversal of allowance on
goods and services tax      —         —          —         —         (4,144)
receivable
Depreciation and
amortization included       2,546     2,659      2,543     7,630     7,967
within equity earnings of
White Cliffs
Defense costs               —         —          2,899     5,899     —
Allowance on (recovery of)
receivable from AGE         —         (300)      —         —         (900)
Refining
Recovery of income tax
receivable written off at   (1,940)   —          —         (1,940)   —
emergence
Non-cash equity             1,609     1,388      1,667     4,832     3,949
compensation
Selected Non-Cash Items and
Other Items Impacting       $17,205 $(5,426)  $9,121  $37,957 $(9,237)
Comparability
                                                                
                                                                
Reconciliation of net cash                                       
provided by (used in)
operating activities to                                          
Adjusted EBITDA
(in thousands, unaudited)                                        
                                                                
                          Three Months Ended             Nine Months Ended
                          September 30,        June 30,  September 30,
                           2012      2011       2012      2012      2011
Net cash provided by (used  $27,606 $(78,831) $25,494 $51,758 $(8,234)
in) operating activities
Add:                                                             
Amortization and write down (323)     (694)      (311)     (2,078)   (23,235)
of debt issuance costs
Deferred tax benefit        1,455     8,501      624       3,738     4,019
(expense)
Provision for uncollectible 1,460     204        (562)     828       5,340
accounts receivable
Changes in operating assets (16,481)  94,667     (6,247)   (5,790)   54,726
and liabilities
Income tax expense          2,091     1,308      (93)      985       3,202
(benefit)
Loss (income) from          265       686        442       456       735
discontinued operations
NGL distribution in excess  4,831     —          233       5,064     —
of equity earnings
Change in fair value of     9,544     (4,684)    3,552     17,083    (8,258)
warrants
Reversal of allowance on
goods and services tax      —         —          —         —         (4,144)
receivable
Depreciation and
amortization included       2,546     2,659      2,543     7,630     7,967
within equity in earnings
of White Cliffs
Depreciation and
amortization in historical  (109)     (401)      (395)     (437)     (1,200)
results of discontinued
operations
Defense costs               —         —          2,899     5,899     —
Allowance on (recovery of)
receivable from AGE         —         (300)      —         —         (900)
Refining
Recovery of income tax
receivable written off at   (1,940)   —          —         (1,940)   —
emergence
Employee severance expense  —         —          (27)      354       4,374
Interest expense            1,992     6,013      2,112     7,763     49,321
Adjusted EBITDA             $32,937 $29,128  $30,264 $91,313 $83,713



2012 Adjusted EBITDA Guidance Reconciliation*
                                                                
                                                                
(in millions, unaudited)                            Low           High
Net income                                          $16.5       $26.3
Add: Interest expense                               10.0         9.7
Add: Income tax expense                             8.4           8.9
Add: Depreciation and amortization                  51.5          51.5
EBITDA                                              $86.4       $96.4
Selected Non-Cash Items and Other Items Impacting   38.6          38.6
Comparability
Adjusted EBITDA                                     $125.0      $135.0
                                                                
                                                                
* Guidance is on a cash basis for NGL and White Cliffs Pipeline and includes
fully consolidated Rose Rock Midstream
                                                                
                                                                
Selected Non-Cash Items and Other Items Impacting Comparability
Change in fair value of warrants                                 $17.1
Depreciation and amortization included within                    9.5
equity in earnings of White Cliffs
Defense costs                                                    5.9
Non-cash equity compensation                                     6.1
Selected Non-Cash Items and Other Items Impacting                $38.6
Comparability

CONTACT: Investor Relations:
         Alisa Perkins
         918-524-8081
         investor.relations@semgroupcorp.com
        
         Media:
         Liz Barclay
         918-524-8158
         lbarclay@semgroupcorp.com

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