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SemGroup Corporation Reports Fourth Quarter And Full Year 2012 Results

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, 2012 December 31, 2011
ASSETS    
Current assets  $ 520,003  $ 389,735
Property, plant and equipment, net 814,724 733,925
Goodwill and other intangible assets 17,469 18,403
Equity method investments 387,802 327,243
Other noncurrent assets, net 8,181 21,875
Total assets  $ 1,748,179  $ 1,491,181
LIABILITIES AND OWNERS' EQUITY    
Current liabilities:    
Current portion of long-term debt  $ 24  $ 26,058
Other current liabilities 374,320 270,453
Total current liabilities 374,344 296,511
Long-term debt, excluding current portion 206,062 83,277
Other noncurrent liabilities 146,245 132,728
Total liabilities 726,651 512,516
Total owners' equity 1,021,528 978,665
Total liabilities and owners' equity  $ 1,748,179  $ 1,491,181
 
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts, unaudited)
           
           
  Three Months Ended Year Ended
  December 31, September 30, December 31,
  2012 2011 2012 2012 2011
Revenues  $ 315,837  $ 330,159  $ 277,852  $ 1,237,497  $ 1,465,246
Expenses:          
Costs of products sold, exclusive of depreciation and amortization shown below  223,602  247,568  189,830  874,885  1,144,439
Operating  51,950  38,657  52,367  224,700  155,041
General and administrative  18,845  19,004  16,680  71,918  75,447
Depreciation and amortization  12,523  11,468  12,081  48,210  49,823
(Gain) loss on disposal or impairment of long-lived assets, net  (35)  437  (3,615)  (3,531)  301
Total expenses  306,885  317,134  267,343  1,216,182  1,425,051
Earnings from equity method investments  13,133  4,838  3,116  36,036  15,004
Operating income  22,085  17,863  13,625  57,351  55,199
Other expenses, net  5,567  13,822  11,701  30,471  45,149
Income from continuing operations before income taxes  16,518  4,041  1,924  26,880  10,050
Income tax (benefit) expense  (3,066)  (5,592)  2,092  (2,078)  (2,310)
Income (loss) from continuing operations  19,584  9,633  (168)  28,958  12,360
Income (loss) from discontinued operations, net of income taxes  3,392  (8,893)  (264)  2,939  (9,548)
Net income (loss)  22,976  740  (432)  31,897  2,812
Less: net income attributable to noncontrolling interests  1,882  435  2,336  9,797  435
Net income (loss) attributable to SemGroup Corporation  $ 21,094  $ 305  $ (2,768)  $ 22,100  $ 2,377
Net income (loss) attributable to SemGroup Corporation  $ 21,094  $ 305  $ (2,768)  $ 22,100  $ 2,377
Other comprehensive income (loss), net of income taxes  (2,354)  (3,525)  12,072  12,576  (14,990)
Comprehensive income (loss) attributable to SemGroup Corporation  $ 18,740  $ (3,220)  $ 9,304  $ 34,676  $ (12,613)
Net income (loss) per common share:          
Basic  $ 0.50  $ 0.01  $ (0.07)  $ 0.53  $ 0.06
Diluted  $ 0.50  $ 0.01  $ (0.07)  $ 0.52  $ (0.06)
Weighted average shares (thousands):          
Basic 41,960 41,698 41,949 41,939 41,640
Diluted 42,303 41,890 42,234 42,254 41,640
           
Reconciliation of net income to Adjusted EBITDA:
(in thousands, unaudited)
           
  Three Months Ended Year Ended
   December 31, September 30, December 31,
   2012 2011 2012 2012 2011
Net income (loss)  $ 22,976  $ 740  $ (432)  $ 31,897  $ 2,812
Add: Interest expense  1,139  10,817  1,992  8,902  60,138
Add: Income tax (benefit) expense  (3,066)  (5,592)  2,092  (2,078)  (2,310)
Add: Depreciation and amortization expense  12,523  11,468  12,081  48,210  49,823
EBITDA  33,572  17,433  15,733  86,931  110,463
Selected Non-Cash Items and Other Items Impacting Comparability  10,080  14,399  17,204  48,034  5,082
Adjusted EBITDA  $ 43,652  $ 31,832  $ 32,937  $ 134,965  $ 115,545
           
Selected Non-Cash Items and Other Items Impacting Comparability
(in thousands, unaudited)
           
           
    Three Months Ended   Year Ended 
    December 31,   September 30,   December 31, 
    2012  2011  2012   2012  2011
(Gain) loss on disposal or impairment of long-lived assets, net  $ (35)  $ 437  $ (3,615)  $ (3,531)  $ 301
Loss (income) from discontinued operations, net of income taxes (1)  (3,392)  8,893  264  (2,939)  9,548
Foreign currency transaction (gain) loss  (60)  (20)  355  298  (3,450)
Remove NGL equity (earnings) losses  (1,747)  —   6,905  403  — 
NGL cash distribution  4,155  —   2,090  9,218  — 
Employee severance expense  —   —   —   354  4,374
Unrealized (gain) loss on derivative activities  1,628  (4,720)  (554)  1,196  (14,114)
Change in fair value of warrants  4,227  3,246  9,544  21,310  (5,012)
Reversal of allowance on goods and services tax receivable  —   —   —   —   (4,144)
Depreciation and amortization included within equity earnings of White Cliffs  2,550  2,663  2,546  10,181  10,630
Defense costs  —   1,000  —   5,899  1,000
Recovery of receivable from AGE Refining  —   (1,792)  —   —   (2,692)
Recovery of receivables written off at emergence  1,082  —   (1,940)  (858)  — 
Non-cash equity compensation  1,672  4,692  1,609  6,503  8,641
Selected Non-Cash Items and Other Items Impacting Comparability  $ 10,080  $ 14,399  $ 17,204  $ 48,034  $ 5,082
           
(1) SemStream Arizona has been reported as a discontinued operation at December 31, 2012. Prior periods have been recast to conform with the current presentation.
 
2013 Adjusted EBITDA Guidance
(in millions, unaudited)
  Guidance (1)
  Low   High
Net income  $ 68.6    $ 72.1
Add: Interest expense  19.0    20.0
Add: Income tax expense  6.0    6.5
Add: Depreciation and amortization  55.0    60.0
EBITDA  $ 148.6    $ 158.6
Selected Non-Cash Items and Other Items Impacting Comparability  16.4    16.4
Adjusted EBITDA  $ 165.0    $ 175.0
Selected Non-Cash Items and Other Items Impacting Comparability      
Depreciation and amortization included within equity earnings    $ 10.1  
Non-cash equity compensation   6.3  
Selected Non-Cash Items and Other Items Impacting Comparability    $ 16.4  
       
(1) Guidance is on a cash basis for equity investments including NGL, White Cliffs Pipeline and Glass Mountain Pipeline and includes fully consolidated Rose Rock Midstream.
CONTACT: Investor Relations:
         Mary Catherine Ward
         918-524-8081
         investor.relations@semgroupcorp.com
         
         Media:
         Kiley Roberson
         918-524-8594
         kroberson@semgroupcorp.com

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