SemGroup Corporation Reports First Quarter 2014 Results

SemGroup Corporation Reports First Quarter 2014 Results

      First Quarter Adjusted EBITDA Increased 16% Over Previous Quarter

               Dividend Increase of 9% Over Fourth Quarter 2013

TULSA, Okla., May 8, 2014 (GLOBE NEWSWIRE) -- SemGroup^® Corporation
(NYSE:SEMG) today announced its financial results for the three months ended
March 31, 2014.

SemGroup's adjusted earnings before interest, taxes, depreciation and
amortization (Adjusted EBITDA) was $67.3 million for the first quarter 2014,
compared to $57.8 million for the fourth quarter 2013 and $35.5 million for
the first quarter 2013, an increase of approximately 16% and 90%,
respectively. Adjusted EBITDA, which is a non-GAAP measure, is reconciled to
net income below.

"I am very pleased with the strong start to the year as evidenced by the 16%
increase in Adjusted EBITDA," said Carlin Conner, president and chief
executive officer of SemGroup. "During the quarter we completed several
strategic projects that are beginning to contribute to our financial growth,
including the Glass Mountain Pipeline and our Rose Valley gas processing plant
in Oklahoma. SemGroup remains focused on growing our business and I am very
excited to be part of the team."

First Quarter 2014 Adjusted EBITDA Highlights

Compared to the Fourth Quarter 2013

  *Crude increased $4.1 million
    – $3.8 million increase related to higher pipeline and trucking volumes
    – $2.6 million decrease in operating and G&A expenses
    – $2.6 million decrease in White Cliffs Pipeline due to a decrease in
    volumes
  *SemCAMS increased $2.1 million
    – $1.6 million capital fee revenue increase primarily related to new well
    tie-ins and lower downtime
    – $1.2 million increase due to non-recurring items
  *SemLogistics increased $1.2 million
    – Largely related to new gasoline storage contracts and increased storage
    rates

SemGroup reported revenues for first quarter 2014 of $498.9 million with net
income attributable to SemGroup of $13.6 million, or $0.29 per diluted share,
compared to revenues of $457.3 million with a net income attributable to
SemGroup of $3.3 million, or $0.08 per diluted share, for the fourth quarter
2013. For the first quarter 2013, revenues totaled $287.7 million with net
income attributable to SemGroup of $43.4 million, or $1.03 per diluted share.

Dividend

The SemGroup board of directors declared a quarterly cash dividend to common
shareholders of $0.24 per share, resulting in an annualized distribution of
$0.96 per share. This represents a 9% increase from the previous quarterly
dividend of $0.22 and a 26% increase over our initial dividend one year ago.
The dividend will be paid on May 29, 2014 to all common shareholders of record
on May 19, 2014.

2014 Guidance

SemGroup reaffirms 2014 consolidated Adjusted EBITDA of $245 million to $265
million, an increase of approximately 35% over 2013 results of $189 million.
The company is on track to spend $415 million in capital investments in 2014,
with more than 85% allocated to growth projects.

Earnings Conference Call

SemGroup will host a joint conference call with Rose Rock Midstream^®, L.P.
(NYSE:RRMS) for investors tomorrow, May 9, 2014, 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 27070053.
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 first quarter 2014 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 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.semgroupcorp.com, our Twitter account and LinkedIn account.

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
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 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, thereby diminishing its utility.
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, our anticipated annual dividend growth rate, 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, the factors
discussed above; our ability to comply with the covenants contained in the
instruments governing our indebtedness and to 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; 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)
                                                       
                                                       
                                         March 31, 2014 December 31, 2013
ASSETS                                                  
Current assets                            $566,708     $534,014
Property, plant and equipment, net        1,137,540      1,105,728
Goodwill and other intangible assets      233,724        236,859
Equity method investments                 593,538        565,124
Other noncurrent assets, net              29,884         28,889
Total assets                              $2,561,394   $2,470,614
LIABILITIES AND OWNERS' EQUITY                          
Current liabilities:                                    
Current portion of long-term debt         $38          $37
Other current liabilities                 520,696        499,177
Total current liabilities                 520,734        499,214
Long-term debt, excluding current portion 672,578        615,088
Other noncurrent liabilities              149,823        142,449
Total liabilities                         1,343,135      1,256,751
Total owners' equity                      1,218,259      1,213,863
Total liabilities and owners' equity      $2,561,394   $2,470,614


Condensed Consolidated Statements of Operations
(in thousands, except per share amounts, unaudited)
                                                               
                                                               
                                           Three Months Ended
                                           March 31,             December 31,
                                           2014       2013       2013
Revenues                                    $498,883 $287,696 $457,328
Expenses:                                                       
Costs of products sold, exclusive of        385,113    212,369    339,468
depreciation and amortization shown below
Operating                                   50,778     40,771     60,772
General and administrative                  18,736     17,037     23,710
Depreciation and amortization               23,637     12,636     24,846
Gain on disposal of long-lived assets, net  (58)       (162)      (109)
Total expenses                              478,206    282,651    448,687
Earnings from equity method investments     14,962     17,345     12,788
Gain on issuance of common units by equity  8,127      —          26,873
method investee
Operating income                            43,766     22,390     48,302
Other expenses, net                         7,497      27,862     17,646
Income (loss) from continuing operations    36,269     (5,472)    30,656
before income taxes
Income tax expense (benefit)                16,526     (54,006)   24,051
Income from continuing operations           19,743     48,534     6,605
Income (loss) from discontinued operations, (5)        32         (6)
net of income taxes
Net income                                  19,738     48,566     6,599
Less: net income attributable to            6,150      5,143      3,319
noncontrolling interests
Net income attributable to SemGroup         $13,588  $43,423  $3,280
Corporation
Net income attributable to SemGroup         $13,588  $43,423  $3,280
Corporation
Other comprehensive income (loss), net of   (2,972)    (5,058)    2,752
income taxes
Comprehensive income attributable to        $10,616  $38,365  $6,032
SemGroup Corporation
Net income per common share:                                    
Basic                                       $0.32    $1.03    $0.08
Diluted                                     $0.29    $1.03    $0.08
Weighted average shares (thousands):                            
Basic                                       42,631     42,070     42,530
Diluted                                     43,761     42,346     42,888


Reconciliation of net income to Adjusted EBITDA:
(in thousands, unaudited)
                                                               
                                             Three Months Ended
                                             March 31,           December 31,
                                             2014      2013      2013
Net income                                    $19,738 $48,566 $6,599
Add: Interest expense                         9,227     2,396     9,171
Add: Income tax expense (benefit)             16,526    (54,006)  24,051
Add: Depreciation and amortization expense    23,637    12,636    24,846
EBITDA                                        69,128    9,592     64,667
Selected Non-Cash Items and Other Items       (1,846)   25,911    (6,869)
Impacting Comparability
Adjusted EBITDA                               $67,282 $35,503 $57,798
                                                               
                                                               
Selected Non-Cash Items and
Other Items Impacting Comparability
(in thousands, unaudited)
                                                               
                                             Three Months Ended
                                             March 31,           December 31,
                                             2014      2013      2013
Gain on disposal of long-lived assets, net    $ (58)    $ (162)   $ (109)
Loss (income) from discontinued operations,   5         (32)      6
net of income taxes
Foreign currency transaction loss (gain)      (683)     (167)     (660)
Remove NGL equity earnings including gain on  (11,718)  (6,916)   (26,168)
issuance of common units
NGL cash distribution                         5,341     4,272     4,952
Employee severance expense                    9         —         29
Unrealized loss (gain) on derivative          606       (468)     785
activities
Change in fair value of warrants              (980)     25,796    9,406
Depreciation and amortization included within 3,450     2,405     2,304
equity earnings
Bankruptcy related expenses                   216       —         567
Recovery of receivables written off at        (364)     —         —
emergence
Non-cash equity compensation                  2,330     1,183     2,019
Selected Non-Cash Items and Other Items       $ (1,846) $25,911 $ (6,869)
Impacting Comparability


2014 Adjusted EBITDA Guidance Reconciliation
                                                                
(in millions, unaudited)                  2014 Guidance^(1)
                                         Low                     High
Net income                                $ 79                    $ 93
Add: Interest expense                     46                      48
Add: Income tax expense                   6                       8
Add: Depreciation and amortization        86                      88
EBITDA                                    $ 217                   $ 237
Selected Non-Cash and Other Items         28                      28
Impacting Comparability
Adjusted EBITDA                           $ 245                   $ 265
                                                                
                                                                
Selected Non-Cash and Other Items                                
Impacting Comparability
Depreciation and amortization included                 18         
within equity earnings
Non-cash equity compensation                           10         
Selected Non-Cash and Other Items                      $ 28       
Impacting Comparability
                                                                
                                                                
(1) Guidance is on a cash basis for equity investments in NGL, includes fully
consolidated Rose Rock Midstream

CONTACT: Investor Relations:
         Alisa Perkins
         918-524-8081
         investor.relations@semgroupcorp.com
        
         Media:
         Kiley Roberson
         918-524-8594
         kroberson@semgroupcorp.com

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