Rose Rock Midstream, L.P. Reports Fourth Quarter and Full Year 2013 Results

Rose Rock Midstream, L.P. Reports Fourth Quarter and Full Year 2013 Results

 Adjusted EBITDA Increased 73% Year-Over-Year; 2014 Adjusted EBITDA Guidance
                              $92 to $97 Million

TULSA, Okla., Feb. 27, 2014 (GLOBE NEWSWIRE) -- Rose Rock Midstream^®, L.P.
(NYSE:RRMS) today announced its financial results for the three months and
year ended December 31, 2013.

Rose Rock Midstream reported fourth quarter 2013 Adjusted EBITDA of $21.0
million, up 34% from the third quarter 2013 of $15.7 million, and more than
double the fourth quarter 2012 of $9.9 million. Adjusted EBITDA for the year
ended December 31, 2013, totaled $68.5 million, up 73% from $39.5 million for
the year ended December 31, 2012. Rose Rock's results improved over the
previous quarter of 2013 due to a $3.5 million increase in marketing as a
result of higher volumes along with a 15% increase in White Cliffs Pipeline
volumes.

"Rose Rock Midstream had a strong finish to the year, exceeding our previous
guidance range and delivering excellent results driven by growth," said Norm
Szydlowski, chief executive officer of Rose Rock Midstream's general partner.
"We are confident that our solid financial results, 15% increase in cash
distributions year-over-year and our continued focus on organic growth
projects and growth-oriented acquisitions are all steps in the right
direction. Looking to 2014, Rose Rock is ready to meet the increased demand
for midstream services with a strong balance sheet and plenty of room to
grow."

Adjusted gross margin was $35.6 million for the fourth quarter 2013, up 50%
from the third quarter 2013 of $23.8 million and 85% above fourth quarter 2012
Adjusted gross margin of $19.2 million. Adjusted gross margin and Adjusted
EBITDA, which are non-GAAP measures, are reconciled to their most directly
comparable GAAP measures below.

Fourth quarter 2013 net income totaled $7.5 million, compared to $9.4 million
for the third quarter 2013 and $4.6 million for the fourth quarter 2012. Net
income decreased from the prior quarter due to increased depreciation
primarily related to a revision of the estimated useful life of certain
pipeline segments.

Rose Rock Midstream's distributable cash flow for the three months ended
December 31, 2013 was $17.9 million. On January 23, 2014, Rose Rock Midstream
increased the partnership's quarterly cash distribution to $0.465 per unit
from $0.45 per unit, effective for the fourth quarter 2013, resulting in an
annualized distribution of $1.86 per unit. This is a 3.3% increase over the
third quarter 2013 and marks the eighth consecutive increase in the quarterly
cash distribution to RRMS limited partner unitholders. The distribution was
paid on February 14, 2014 to all unitholders of record on February 4, 2014.
Distributable cash flow, which is a non-GAAP measure, is reconciled to its
most directly comparable GAAP measure below.

Full Year 2013 Highlights

  *White Cliffs Pipeline Interest Acquisitions
    ― January 2013- Rose Rock acquired a one-third interest in SemCrude
    Pipeline, L.L.C., which owns a 51% interest in White Cliffs Pipeline, from
    SemGroup
    ― December 2013- Rose Rock acquired an additional one-third interest in
    SemCrude Pipeline, L.L.C.
  *Completed Two Acquisitions
    ― September 2013- Barcas Field Services acquisition
    ― November 2013- Tampa Pipeline acquisition
  *Rose Rock spent approximately $103 million on growth projects and
    acquisitions in 2013

2014 Adjusted EBITDA and Capex Guidance

Rose Rock Midstream anticipates 2014 Adjusted EBITDA of $92 million to $97
million, an increase of approximately 40% over 2013 results of $68.5 million.
The partnership also expects to deploy $75 million in capital investments in
2014, with 84% allocated to growth projects and a target distribution growth
rate in 2014 of 15% year-over-year.

Earnings Conference Call

Rose Rock Midstream will host a joint conference call with SemGroup^®
Corporation (NYSE:SEMG) for investors tomorrow, February 28, 2013, at 11 a.m.
ET. 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
31052519. Interested parties may also listen to a simultaneous webcast of the
conference call by logging onto Rose Rock Midstream's Investor Relations
website at ir.rrmidstream.com. A replay of the webcast will also be available
for a year following the call at ir.rrmidstream.com on the Calendar of
Events-Past Events page. The fourth quarter 2013 earnings slide deck will be
posted under Presentations.

About Rose Rock Midstream

Rose Rock Midstream^®, L.P. (NYSE:RRMS) is a growth-oriented Delaware limited
partnership formed by SemGroup^® Corporation (NYSE:SEMG) to own, operate,
develop and acquire a diversified portfolio of midstream energy assets.
Headquartered in Tulsa, OK, Rose Rock Midstream provides crude oil gathering,
transportation, storage and marketing services with the majority of its assets
strategically located in or connected to the Cushing, Oklahoma crude oil
marketing hub.

Rose Rock uses its 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 website at
ir.rrmidstream.com, our Twitter account and LinkedIn account.

Non-GAAP Financial Measures

This Press Release and the accompanying schedules include 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. The accompanying schedules of
this Press Release provide reconciliations of these non-GAAP financial
measures to their most directly comparable financial measures calculated and
presented in accordance with generally accepted accounting principles in the
United States of America (GAAP). 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.

Forward-Looking Statements

Certain matters contained in this Press Release include "forward-looking
statements."

All statements, other than statements of historical fact, included in this
Press Release including the prospects of our industry, our anticipated
financial performance, including distributable cash flow, 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, insufficient
cash from operations following the establishment of cash reserves and payment
of fees and expenses to pay the minimum quarterly distribution; any sustained
reduction in demand for crude oil in markets served by our midstream assets;
our ability to obtain new sources of supply of crude oil; the amount of
collateral required to be posted from time to time in our transactions;
competition from other midstream energy companies; our ability to comply with
the covenants contained in and maintain certain financial ratios required by
our credit facility; our ability to access credit and capital markets; our
ability to renew or replace expiring storage contracts; the loss of or a
material nonpayment or nonperformance by any of our key customers; the overall
forward market for crude oil; the possibility that our hedging activities may
result in losses or may have a negative impact on our financial results;
weather and other natural phenomena; hazards or operating risks incidental to
the gathering, transporting or storing of crude oil; our failure to comply
with new or existing environmental laws or regulations; the possibility that
the construction or acquisition of new assets may not result in the
corresponding anticipated revenue increases; 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)
                                                                
                                                    December 31, December 31,
                                                     2013         2012
ASSETS                                                           
Current assets                                       $321,587   $250,617
Property, plant and equipment, net                   311,616      291,530
Equity method investment                             224,095      —
Other noncurrent assets, net                         39,949       2,579
Total assets                                         $897,247   $544,726
                                                                
LIABILITIES AND EQUITY                                           
Current liabilities                                  $293,031   $231,843
Long-term debt                                       245,088      4,562
Total liabilities                                    538,119      236,405
                                                                
Total Rose Rock Midstream, L.P. partners' capital    280,571      308,321
Noncontrolling interests in consolidated             78,557       —
subsidiaries
Total equity                                         359,128      308,321
Total liabilities and equity                         $897,247   $544,726



Condensed Consolidated Statements of Income
(in thousands, except per unit amounts, unaudited)
                                                              
                      Three Months Ended               Year Ended
                      December 31,          September  December 31,
                                             30,
                      2013       2012       2013       2013       2012
Revenues, including
revenues from                                                  
affiliates:
Product                $228,434 $140,344 $166,050 $702,028 $576,158
Service                23,607     11,386     15,781     64,498     44,318
Other                  —          —          —          —          (59)
Total revenues         252,041    151,730    181,831    766,526    620,417
Expenses, including
expenses from                                                  
affiliates:
Costs of products
sold, exclusive of     217,252    134,119    157,550    663,759    546,966
depreciation and
amortization
Operating              15,322     6,156      9,248      35,795     23,302
General and            5,326      3,253      3,146      15,287     12,083
administrative
Depreciation and       11,838     3,099      4,130      23,165     12,131
amortization
Total expenses         249,738    146,627    174,074    738,006    594,482
Earnings from equity   7,140      —          3,527      17,571     —
method investment
Operating income       9,443      5,103      11,284     46,091     25,935
Other expenses:                                                
Interest expense       1,979      505        1,873      8,100      1,912
Other expense (income) (2)        (3)        —          (14)       69
Total other expenses,  1,977      502        1,873      8,086      1,981
net
Net income             7,466      4,601      9,411      38,005     23,954
Less: net income
attributable to        1,256      —          —          1,256      —
noncontrolling
interests
Net income
attributable to Rose   $6,210   $4,601   $9,411   $36,749  $23,954
Rock Midstream, L.P.
Net income allocated   $368     $92      $315     $1,218   $479
to general partner
Net income allocated   $4,379   $2,254.5 $6,116   $22,701  $11,737.5
to common unitholders
Net income allocated
to subordinated        $2,023   $2,254.5 $3,083   $13,321  $11,737.5
unitholders
Net loss allocated to  $(560)   $—       $(103)    $(491)    $—
Class A unitholders
Earnings (loss) per                                            
limited partner unit:
Common unit (basic)    $0.26    $0.27    $0.45    $1.66    $1.40
Common unit (diluted)  $0.26    $0.27    $0.45    $1.66    $1.40
Subordinated unit      $0.24    $0.27    $0.37    $1.59    $1.40
(basic and diluted)
Class A unit (basic    $(0.38)   $—       $(0.08)   $(0.39)   $—
and diluted)
Basic weighted average
number of limited                                              
partner units
outstanding:
Common units           16,890     8,390      13,442     13,672     8,390
Subordinated units     8,390      8,390      8,390      8,390      8,390
Class A units          1,454      —          1,250      1,264      —
Diluted weighted
average number of                                              
limited partner units
outstanding:
Common units           16,934     8,411      13,479     13,708     8,406
Subordinated units     8,390      8,390      8,390      8,390      8,390
Class A units          1,454      —          1,250      1,264      —



Non-GAAP Reconciliations

(in thousands,         Three Months Ended               Year Ended
unaudited)
                      December 31,          September  December 31,
                                             30,
                      2013       2012       2013       2013        2012
Reconciliation of
operating income to                                             
Adjusted gross margin:
Operating income       $9,443   $5,103   $11,284  $46,091   $25,935
Add:                                                            
Operating expense      15,322     6,156      9,248      35,795      23,302
General and            5,326      3,253      3,146      15,287      12,083
administrative
Depreciation and       11,838     3,099      4,130      23,165      12,131
amortization
Less:                                                           
Earnings from equity   7,140      —          3,527      17,571      —
method investment
Unrealized gain (loss) (785)      (1,628)    464        974         (1,196)
on derivatives, net
Adjusted gross margin  $35,574  $19,239  $23,817  $101,793  $74,647
                                                               
Reconciliation of net
income to Adjusted                                              
EBITDA:
Net income             $7,466   $4,601   $9,411   $38,005   $23,954
Add:                                                            
Interest expense       1,979      505        1,873      8,100       1,912
Depreciation and       11,838     3,099      4,130      23,165      12,131
amortization
Distributions from
equity method          5,861      —          4,078      16,999      —
investment
Non-cash equity        228        90         223        806         308
compensation
Gain on disposal of    (31)       (57)       —          (31)        (1)
long-lived assets, net
Less:                                                           
Earnings from equity   7,140      —          3,527      17,571      —
method investment
Impact from derivative                                          
instruments:
Total gain (loss) on   837        491        (1,653)    (1,593)     149
derivatives, net
Total realized (gain)
loss (cash flow) on    (1,622)    (2,119)    2,117      2,567       (1,345)
derivatives, net
Non-cash unrealized
gain (loss) on         (785)      (1,628)    464        974         (1,196)
derivatives, net
Adjusted EBITDA        $20,986  $9,866   $15,724  $68,499   $39,500
                                                               
Reconciliation of net
cash provided by (used
in) operating                                                   
activities to Adjusted
EBITDA:
Net cash provided by
(used in) operating    $50,360  $(428)    $(1,194)  $72,475   $35,097
activities
Less:                                                           
Changes in operating
assets and             30,466     (9,887)    (14,726)   11,265      (2,850)
liabilities, net
Add:                                                            
Interest expense,
excluding amortization 1,799      407        1,641      7,289       1,553
of debt issuance costs
Distributions in
excess of equity in    (707)      —          551        —           —
earnings of affiliates
Adjusted EBITDA        $20,986  $9,866   $15,724  $68,499   $39,500
                                                               
Reconciliation of net
income to                                                       
distributable cash
flow:
Net income             $7,466   $4,601   $9,411   $38,005   $23,954
Add:                                                            
Interest expense       1,979      505        1,873      8,100       1,912
Depreciation and       11,838     3,099      4,130      23,165      12,131
amortization
EBITDA                 21,283     8,205      15,414     69,270      37,997
Add:                                                            
Gain on disposal of    (31)       (57)       —          (31)        (1)
long-lived assets, net
Distribution from
equity method          5,861      —          4,078      16,999      —
investment
Non-cash equity        228        90         223        806         308
compensation
Less:                                                           
Earnings from equity   7,140      —          3,527      17,571      —
method investment
Unrealized gain (loss) (785)      (1,628)    464        974         (1,196)
on derivatives, net
Adjusted EBITDA        $20,986  $9,866   $15,724  $68,499   $39,500
Less:                                                           
Cash interest expense  1,865      406        1,641      7,355       1,551
Maintenance capital    1,174      1,633      1,057      4,813       4,239
expenditures
Distributable cash     $17,947  $7,827   $13,026  $56,331   $33,710
flow
                                                               
Distribution declared  $12,841  $8,331   $11,624  $42,586   $27,979
                       ^(1)
                                                               
Distribution coverage  1.40 x     0.94 x     1.12 x     1.32 x      1.20 x
ratio
                                                               
(1) The distribution declared January 23, 2014 represents $0.465 per unit, or
$1.86 per unit on an annualized basis. This is a 3.3% increase over the prior
quarter.



2014 RRMS Adjusted EBITDA Guidance Reconciliation
                                                                
(millions, unaudited)
                                                    Low          High
Net income                                           $64        $67
Add: Interest expense                                13           15
Add: Depreciation and amortization                   22           22
EBITDA                                               $99        $104
Non-Cash Adjustments and Other Adjustments           (7)         (7)
Adjusted EBITDA                                      $92        $97
                                                                
                                                                
Non-Cash and Other Adjustments                                   
Earnings from equity method investment               $(44)       $(48)
Distributions from equity method investment^(1)      36           40
Non-cash equity compensation                         1            1
Non-Cash and Other Adjustments                       $(7)        $(7)
                                                                
(1) Distributions from equity method investment includes only the cash
distributions from
White Cliffs attributable to Rose Rock and excludes the distributions
attributable to noncontrolling
interest from Adjusted EBITDA.

CONTACT: Investor Relations:
         Alisa Perkins
         918-524-8081
         roserockir@rrmidstream.com
        
         Media:
         Kiley Roberson
         918-524-8594
         kroberson@rrmidstream.com

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