SemGroup Corporation 1st Quarter 2011 Financial Results. May 16, 2011

Transcription

1 SemGroup Corporation 1st Quarter 2011 Financial Results May 16, 2011

2 Forward-looking Information Certain 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 All statements, other than statements of historical fact, included in this presentation regarding the prospects of our industry, our 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; 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 our documents and reports that we file 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. 2

3 Non-GAAP Financial Measures Adjusted EBITDA is presented in this presentation for certain periods in 2011 and 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 presentation 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 presentation. Because all companies do not use identical calculations, SemGroup s presentation of Adjusted EBITDA may be different from similarly titled measures of other companies. 3

4 First Quarter Highlights Higher Operating Income from SemCrude, SemCAMS and SemGas offset by declines in SemLogistics and SemStream Unusual and extreme year-over-year comparison and less favorable price curves contributed to lower margins in SemStream Expanding operations to capture additional growth and earnings Launched refinancing efforts to reduce cost and increase flexibility 4

5 Operations

6 First Quarter Operations Review Positioned SemGroup for future growth Announced SemGas Eagle Energy project deploying Cryogenic Unit to our Hopeton, OK processing facility third quarter 2011 Completed SemMaterials México Silao plant in first quarter 2011 Announced plans to build an additional 1.95 million barrels of storage at Cushing, OK facility expected completion over the course of

7 First Quarter Operations Review (cont.) Initiated White Cliffs Pipeline capacity expansion to 50,000 barrels per day third quarter 2011 Continued SemLogistics Refurbishment Program - progressing on schedule Commenced realignment of SemCAMS 7

8 Fee-based Business Model Fee for service Throughput and processing fees (fixed fee) Service, storage and terminalling fees (fixed fee) Pipeline tariffs (fixed fee) Percent of proceeds, percent of index (variable fee) Marketing activities Asset-based marketing activity Optimize assets and serve customers 9% 10% Gross Margins* 81% Fee Fixed Fee Variable Marketing Based Marketing activity is governed by our Comprehensive Risk Management Policy *First Quarter

9 2011 Priorities Priority Operate without incidents Continue growth around our asset base Continue improving relationships with customers and vendors Execute operational strategies within each business unit Refinance revolver and term loan Complete review of possible MLP structure Progress On Target On Track Making Progress On Track On track Nearing Completion 9

10 Financial Highlights

11 SemGroup 1st Quarter Results (dollars in thousands, excluding EPS) 1st Quarter st Quarter 2010 As reported Net income (loss) $ 32 $ 9,096 Net Income per share - diluted $ 0.00 $ 0.20 EBITDA (1) $ 26,315 $ 49,299 Selected items impacting comparability 147 3,867 Adjusted EBITDA (1) $ 26,462 $ 53,166 (1) Non-GAAP Financial Data Reconciliations are included in the Appendix to this presentation Key Performance Drivers Flat propane prices and lower demand significantly impacted margins Lengthening storage contracts resulted in lower monthly lease rates Higher volumes in our transportation systems Higher crude oil marketing margins Lower utilization in SemLogistics storage facility Decrease in White Cliffs Pipeline ownership and related Deconsolidation $ % $ % $2.46 8% $0.36 1% $ % Adjusted EBITDA* $ in Millions $ % SemCrude SemStream SemCAMS SemGas * Excludes SemGroup Corporate and SemCanada Crude SemLogistics SemMaterials Mexico 11

12 SemCrude 1st Quarter Results 1st Quarter st Quarter 2010 (dollars in millions) As reported Operating income $ 10.2 $ 6.0 (1) EBITDA (1) $ 12.8 $ 14.7 Selected items impacting comparability Adjusted EBITDA (1) $ 13.9 $ 16.3 Non-GAAP Financial Data Reconciliations are included in the Appendix to this presentation KS/OK Gathering System (Thousands Barrels per Day) Q 2 Q 3 Q 4 Q 1 Q Key Drivers Partial sale and deconsolidation of White Cliffs Pipeline impact on comparability Results in approximately $5 million reduction Higher White Cliffs volumes Up 14% vs. prior year Increased Cushing storage volume and contract tenor Offset by lower monthly rates Higher Kansas/Oklahoma volumes Operational Highlights Cushing Storage Average leased capacity (million barrels) 4.45 Average utilization 95% Average contract tenor (years) 5 Weighted average storage rate $0.40 Transportation Volumes White Cliffs Pipeline (thousand barrels per day) 27.8 Kansas/Oklahoma Gathering (thousand barrels per day) 31.4 Crude Oil Marketing Trending downward due to lost volumes North Dakota (thousand barrels per day) 6.5 Expect return to full utilization later in year 12

13 SemStream 1st Quarter Results 1st Quarter st Quarter 2010 (dollars in millions) As reported Operating income $ 3.1 $ 15.5 (1) EBITDA (1) $ 4.8 $ 18.3 Selected items impacting comparability (2.3) 4.0 Adjusted EBITDA (1) $ 2.5 $ 22.3 Non-GAAP Financial Data Reconciliations are included in the Appendix to this presentation Volume Shipped (Million Gallons) Q 2 Q 3 Q 4 Q 1 Q Key Drivers Narrowing time-spreads during second half 2010 resulted in delayed purchases and lower inventory builds Unit margins shrank by 70% compared to the year-earlier period Lack of unhedged inventory in first quarter 2011 resulted in missed opportunity to capture recent price rebound Loss of refinery grade butane contract Operational Highlights Source: Energy Information Administration (EIA) Lower demand during second half 2010 resulted in a flattened price curve Began the quarter with 23% lower inventory than the year-earlier period 13

14 SemGas 1 st Quarter Results 1st Quarter st Quarter 2010 (dollars in millions) As reported Operating income $ 1.7 $ 0.9 (1) EBITDA (1) $ 3.1 $ 2.2 Selected items impacting comparability Adjusted EBITDA (1) $ 3.2 $ 2.4 Non-GAAP Financial Data Reconciliations are included in the Appendix to this presentation Gas Processing Volumes (Million Cubic Feet per Day) Q 2 Q 3 Q 4 Q 1 Q Key Drivers Increased drilling activity in the Mississippi Zone and Hunton Formations Strong NGL prices support focus on liquids recovery Initiated deployment of cryogenic unit to increase capacity and enhance liquids recoveries Higher utilization rates were partly offset by natural gas price declines Operational Highlights Hopeton utilization averaged 77% during first quarter, compared to 55% in the earlier period Overall utilization up to 65% from 57% in the first quarter 2010 Nash, OK volumes up 20% versus year earlier Initiated debottlenecking activities of the Nash plant in Oklahoma Targeting total capacity at 78 million cubic feet per day by third quarter

15 SemCAMS 1 st Quarter Results 1st Quarter st Quarter 2010 (dollars in millions) As reported Operating income $ 2.4 $ 2.2 (1) EBITDA (1) $ 4.9 $ 6.6 Selected items impacting comparability (0.1) (1.3) Adjusted EBITDA (1) $ 4.8 $ 5.3 Non-GAAP Financial Data Reconciliations are included in the Appendix to this presentation Average Plant Utilization (Percent Utilization) Q 2 Q 3 Q 4 Q 1 Q Key Drivers Unplanned K3 shutdown March 10 April 7, 2011 $1.5 million estimated impact (first quarter 2011) Plant shutdown again on May 4 th Continuing to work on solution Initiated SemCAMS restructuring to reduce costs Higher one-time operating expenses Operational Highlights Current utilization down 16% versus year earlier Financial impact from K3 outage is estimated at $75,000 - $85,000 per day 15

16 SemLogistics 1st Quarter Results 1st Quarter st Quarter 2010 (dollars in millions) As reported Operating income $ 2.0 $ 4.3 (1) EBITDA (1) $ 4.4 $ 6.2 Selected items impacting comparability Adjusted EBITDA (1) $ 4.4 $ 6.4 Non-GAAP Financial Data Reconciliations are included in the Appendix to this presentation Key Drivers High crude prices and flat to backwardated markets contributed to lower utilization rates Due to the 2008/2009 restructuring, most contracts are scheduled to renew in 2011 Expect to see additional drop in utilization in second and third quarter, before returning to historical levels toward year-end Average Storage Utilization * (Percent Utilization) Operational Highlights Average storage utilization for quarter 83% As of March 31, 2011 Utilization rate is at 71% Integrated oil companies taking a wait and see approach to renewals 83 1 Q 2 Q 3 Q 4 Q 1 Q * Based on available capacity 16

17 SemMaterials México 1 st Quarter Results 1st Quarter st Quarter 2010 (dollars in millions) As reported Operating income (loss) $ (1.4) $ (1.3) (1) EBITDA (1) $ 0.5 $ 0.3 Selected items impacting comparability (0.1) - Adjusted EBITDA (1) $ 0.4 $ 0.3 Non-GAAP Financial Data Reconciliations are included in the Appendix to this presentation Short Tons Sold 97,815 87,877 57,129 75,320 65,118 1 Q 2 Q 3 Q 4 Q 1 Q Key Drivers Volumes up by 54% versus year earlier due to increase market share and higher demand Margins narrowed due to higher raw materials prices Higher bad debt expense due to account review Non-routine increase of approximately $1 million Operational Highlights Sold 88,000 short tons of asphalt Government bid contracts up versus prior year Average market share approximately 18% 17

18 2011 Capital Expenditure Guidance 1st Quarter 2011 Capital Expenditures $10 Million 2011 Capital Program Approximately $80 Million $3 30% $1 10% $6 60% Growth Maintenance Refurbishment $23 29% $5 6% $52 65% Growth Maintenance Refurbishment Significant Growth Capital Projects $ in Millions SemCrude Cushing expansion (various projects) $18.2 SemGas increase Hopeton capacity $3.4 SemGas well connections (various) $7.0 SemCAMS well connections (various) $2.0 SemCrude Healy, KS Connection to White Cliffs Pipeline $1.1 White Cliffs Pipeline expansion to 50,000 barrels per day - $0.5 18

19 Capitalization & Liquidity March 31, 2011 Capitalization $ Millions Debt: Term loan $ SemLogistics term loan 24.0 OID fees and capital leases 6.5 SemMaterials México debt 4.7 Total debt $ Equity Shareholders' equity Total Capitalization $ 1,207.2 Credit Metrics and Liquidity: Debt / Capitalization* 28% Debt / Adjusted EBITDA** 2.7x Liquidity Cash and cash equivalents $ Revolver availability - US (1) Revolver availability - UK (2) 24.0 Total Liquidity $ * Capitalization represents total debt plus shareholders equity **Twelve months trailing EBITDA (1) Cash borrowings limited to $150 million; availability can be utilized to post letters of credit (2) SemLogistics revolving credit facility 19

20 Refinancing Proposed Structure: SemGroup is seeking $650 million in Senior Secured Credit Facilities $350 million 5-year revolving credit facility $100 million 5-year Term Loan A $200 million 5-year Term Loan B Senior Secured Credit Facilities will replace debt facilities put in place when SemGroup emerged from bankruptcy in 2009 Refinancing Goals: Reduce annual interest expense by approximately 50% Substantially improve financial flexibility and available liquidity Extend debt maturities Facilitate commodity price risk management activity with lenders Anticipate closing in second quarter

21 Corporate Structure - MLP Continuing due diligence assessment Preliminary indications that a drop-down MLP strategy would add shareholder value Next steps Complete due diligence activity Review management recommendations with the Board of Directors Announce strategy to investors Execution/implementation 21

22 Final Comments Unusual and extreme year-over-year comparison and backwardated price curves impacted Q1 Results do not change previous guidance $120-$140 million Adjusted EBITDA $80 million capital expenditures Strengthening balance sheet while improving financial flexibility and reducing interest expense SemGroup: Right time, right assets, right people to build shareholder value 22

23 Questions? SemGroup, SemCrude, SemGas, SemStream, SemMaterials México MR and White Cliffs Pipeline are registered trademarks of SemGroup Corporation.

24 Appendix

25 Consolidated Balance Sheets (dollars in thousands, unaudited, condensed) March 31, December 31, ASSET S Current assets $ 540,640 $ 563,091 Property, plant and equipment, net 789, ,815 Goodwill and other intangible assets 141, ,087 Investment in White Cliffs 150, ,020 Other noncurrent assets, net 27,153 30,175 Total assets $ 1,648,816 $ 1,667,188 LIABILIT IES AND OWNERS' EQUIT Y Current liabilities: Current portion of long-term debt $ 4,699 $ 12 Other current liabilities 287, ,784 Total current liabilities 292, ,796 Long-term debt, excluding current portion 339, ,431 Other noncurrent liabilities 154, ,893 Total liabilities 785, ,120 Total owners' equity 863, ,068 Total liabilities and owners' equity $ 1,648,816 $ 1,667,188 25

26 Consolidated Statements of Operations (dollars in thousands, except per share amounts, unaudited, condensed) Three Months Ended March 31, Revenues $ 406,954 $ 476,006 Expenses: Costs of products sold, exclusive of depreciation and amortization shown below 323, ,416 Operating 36,201 32,807 General and administrative 21,582 27,264 Depreciation and amortization 13,002 19,966 Loss (gain) on disposal or impairment of long-lived assets, net (64) 20 Total expenses 394, ,473 Equity in earnings of White Cliffs 2,064 - Operating income 14,298 24,533 Other expenses, net 14,599 15,015 Income (loss) from continuing operations before income taxes (301) 9,518 Income tax expense (benefit) (324) 843 Income from continuing operations 23 8,675 Income from discontinued operations, net of income taxes Net income 32 9,157 Less: net income attributable to noncontrolling interests - 61 Net income attributable to SemGroup Corporation $ 32 $ 9,096 Net income attributable to SemGroup Corporation $ 32 $ 9,096 Other comprehensive income (loss), net of income taxes 6,973 (260) Comprehensive income attributable to SemGroup Corporation $ 7,005 $ 8,836 Net income attributable to SemGroup Corporation per common share Basic $ 0.00 $ 0.22 Diluted $ 0.00 $

27 Operating Income by Business Unit (dollars in thousands, unaudited) Operating income (loss) - T hree Months Ended March 31, SemCrude $ 10,151 $ 5,957 SemStream 3,132 15,522 SemGas 1, SemCAMS 2,376 2,215 SemLogistics 2,044 4,288 SemMaterials México (1,405) (1,274) Other and eliminations (3,684) (3,058) Total operating income (loss) $ 14,298 $ 24,533 27

28 Crude Business Financial Highlights SemCrude (dollars in thousands, unaudited) Three Months Ended March 31 SemCrude Revenues $ 83,791 $ 64,892 Expenses: Costs of products sold, exclusive of depreciation and amortization shown below 66,000 38,510 Operating 4,662 6,444 General and administrative 2,357 5,901 Depreciation and amortization 2,683 8,037 Loss (gain) on disposal or impairment of long-lived assets 2 43 Total expenses 75,704 58,935 Equity in earnings of White Cliffs 2,064 - Operating income (loss) $ 10,151 $ 5,957 28

29 Natural Gas & Natural Gas Liquids Business Financial Highlights SemStream, SemGas and SemCAMS (dollars in thousands, unaudited) T hree Months Ended March 31 SemStream Revenues $ 235,940 $ 257,951 Expenses: Costs of products sold, exclusive of depreciation and amortization shown below 225, ,514 Operating 2,784 2,432 General and administrative 2,727 3,911 Depreciation and amortization 1,688 1,595 Loss (gain) on disposal or impairment of long-lived assets (3) (23) Total expenses 232, ,429 Operating income (loss) $ 3,132 $ 15,522 SemGas Revenues $ 20,971 $ 21,266 Expenses: Costs of products sold, exclusive of depreciation and amortization shown below 14,191 14,895 Operating 1,840 1,194 General and administrative 1,827 2,993 Depreciation and amortization 1,429 1,301 Loss (gain) on disposal or impairment of long-lived assets - - Total expenses 19,287 20,383 Operating income (loss) $ 1,684 $ 883 SemCAMS Revenues $ 34,757 $ 30,506 Expenses: Costs of products sold, exclusive of depreciation and amortization shown below 10 3 Operating 22,904 19,063 General and administrative 6,911 6,530 Depreciation and amortization 2,556 2,695 Loss (gain) on disposal or impairment of long-lived assets - - Total expenses 32,381 28,291 Operating income (loss) $ 2,376 $ 2,215 29

30 Product Business Financial Highlights SemLogistics and SemMaterials México (dollars in thousands, unaudited) Three Months Ended March SemLogistics Revenues $ 7,981 $ 9,785 Expenses: Costs of products sold, exclusive of depreciation and amortization shown below - - Operating 1,825 2,059 General and administrative 1,832 1,474 Depreciation and amortization 2,280 1,964 Loss (gain) on disposal or impairment of long-lived assets - - Total expenses 5,937 5,497 Operating income (loss) $ 2,044 $ 4,288 SemMaterials México Revenues $ 44,730 $ 27,040 Expenses: Costs of products sold, exclusive of depreciation and amortization shown below 39,638 22,802 Operating 2, General and administrative 2,795 3,024 Depreciation and amortization 1,632 1,556 Loss (gain) on disposal or impairment of long-lived assets (63) - Total expenses 46,135 28,314 Operating income (loss) $ (1,405) $ (1,274) 30

31 Non-GAAP Financial Data Reconciliations Net income to earnings before interest, taxes, depreciation and amortization ("EBITDA") and excluding selected items impacting comparability ("Adjusted EBITDA") reconciliations (dollars in thousands, unaudited) Three Months Ended March 31, Net income attributable to SemGroup Corporation $ 32 $ 9,096 Add: Interest expense 13,605 19,394 Add: Income tax expense (benefit) (324) 843 Add: Depreciation and amortization expense 13,002 19,966 EBIT DA 26,315 49,299 Selected items impacting comparability 147 3,867 Adjusted EBITDA $ 26,462 $ 53,166 31

32 Selected Items Impacting Comparability (dollars in thousands, unaudited) Three Months Ended March 31, Loss (gain) on disposal or impairment of long-lived assets $ (64) $ 20 Loss (income) from discontinued operations (9) (482) Foreign currency transaction (gain)/loss (477) (1,569) Employee severance expense 4,243 - Impact of change in basis of NGL inventory in fresh-start reporting - 26,583 Unrealized (gain)/loss on derivative activities (4,226) (22,662) Change in fair value of warrants 1,220 (741) Reversal of allowance on goods and services tax receivable (4,144) - Depreciation and amortization included within equity in earnings of White Cliffs 2,654 - Allowance on (recovery of) receivable from AGE Refining (300) 1,104 Restricted stock expense 1,250 1,614 Selected items impacting comparability $ 147 $ 3,867 32

33 Adjusted EBITDA Summary (dollars in thousands, unaudited) Three Months Ended March 31, $ Change % Change SemCrude $ 13,880 $ 16,282 $ (2,402) -15% SemStream 2,463 22,329 (19,866) -89% SemGas 3,240 2, % SemCAMS 4,819 5,280 (461) -9% SemLogistics 4,431 6,399 (1,968) -31% SemMexico % Corp and Other (2,728) 151 (2,879) -1907% Adjusted EBIT DA $ 26,462 $ 53,166 $ (26,704) -50% 33

34 SemGroup Corporate & Other Adjusted EBITDA Calculation (dollars in thousands, unaudited) Three Months Ended March 31, Net income (loss) attributable to SemGroup Corporation $ (9,589) $ (2,600) Add: Interest expense 3,550 3,090 Add: Depreciation and amortization expense 1,032 (2,265) Add: Depreciation and amortization 734 2,818 EBITDA (4,273) 1,043 Selected items impacting comparability 1,545 (892) Adjusted EBITDA $ (2,728) $ 151 Selected Items Impacting Comparability Loss (gain) on disposal or impairment of long-lived assets $ - $ - Loss (income) from discontinued operations (16) (528) Foreign currency transaction (gain)/loss (270) 112 Employee severance expense Impact of change in basis of NGL inventory in fresh-start reporting - - Unrealized (gain)/loss on derivative activities (80) 57 Change in fair value of warrants 1,220 (741) Reversal of allowance on goods and services tax receivable - - Depreciation and amortization included within equity in earnings of White Cliffs - - Allowance on (recovery of) receivable from AGE Refining - - Restricted stock expense Selected items impacting comparability $ 1,545 $ (892) 34

35 SemCrude Adjusted EBITDA Calculation (dollars in thousands, unaudited) Net income (loss) attributable to SemGroup Corporation $ 10,182 $ (1,227) Add: Interest expense (31) 7,850 Add: Income tax expense (benefit) - - Add: Depreciation and amortization expense 2,683 8,037 EBIT DA 12,834 14,660 Selected items impacting comparability 1,046 1,622 Adjusted EBITDA $ 13,880 $ 16,282 Selected Items Impacting Comparability Three Months Ended March 31, 23, ,778.0 Loss (gain) on disposal or impairment of long-lived assets $ 2 $ 43 Loss (income) from discontinued operations - - Foreign currency transaction (gain)/loss - - Employee severance expense - - Impact of change in basis of NGL inventory in fresh-start reporting - - Unrealized (gain)/loss on derivative activities (1,589) 84 Change in fair value of warrants - - Reversal of allowance on goods and services tax receivable - - Depreciation and amortization included within equity in earnings of White Cliffs 2,654 - Allowance on (recovery of) receivable from AGE Refining (300) 1,104 Restricted stock expense Selected items impacting comparability $ 1,046 $ 1,622 35

36 SemStream Adjusted EBITDA Calculation (dollars in thousands, unaudited) Net income (loss) attributable to SemGroup Corporation $ (112) $ 13,948 Add: Interest expense 3,244 2,773 Add: Income tax expense (benefit) - - Add: Depreciation and amortization expense 1,688 1,595 EBIT DA 4,820 18,316 Selected items impacting comparability (2,357) 4,013 Adjusted EBITDA $ 2,463 $ 22,329 Selected Items Impacting Comparability Three Months Ended March 31, 40,271.9 (7,250.0) Loss (gain) on disposal or impairment of long-lived assets $ (3) $ (23) Loss (income) from discontinued operations - - Foreign currency transaction (gain)/loss - - Employee severance expense - - Impact of change in basis of NGL inventory in fresh-start reporting - 26,583 Unrealized (gain)/loss on derivative activities (2,557) (22,803) Change in fair value of warrants - - Reversal of allowance on goods and services tax receivable - - Depreciation and amortization included within equity in earnings of White Cliffs - - Allowance on (recovery of) receivable from AGE Refining - - Restricted stock expense Selected items impacting comparability $ (2,357) $ 4,013 36

37 SemGas Adjusted EBITDA Calculation (dollars in thousands, unaudited) Net income (loss) attributable to SemGroup Corporation $ 1,298 $ (550) Add: Interest expense 390 1,451 Add: Income tax expense (benefit) - - Add: Depreciation and amortization expense 1,429 1,301 EBIT DA 3,117 2,202 Selected items impacting comparability Adjusted EBITDA $ 3,240 $ 2,384 Selected Items Impacting Comparability Three Months Ended March 31, 5, Loss (gain) on disposal or impairment of long-lived assets $ - $ - Loss (income) from discontinued operations - - Foreign currency transaction (gain)/loss - - Employee severance expense - - Impact of change in basis of NGL inventory in fresh-start reporting - - Unrealized (gain)/loss on derivative activities - - Change in fair value of warrants - - Reversal of allowance on goods and services tax receivable - - Depreciation and amortization included within equity in earnings of White Cliffs - - Allowance on (recovery of) receivable from AGE Refining - - Restricted stock expense Selected items impacting comparability $ 123 $

38 SemCAMS Adjusted EBITDA Calculation (dollars in thousands, unaudited) Three Months Ended March 31, Net income (loss) attributable to SemGroup Corporation $ (2,077) $ (1,823) Add: Interest expense 6,234 3,477 Add: Income tax expense (benefit) (1,784) 2,269 Add: Depreciation and amortization expense 2,556 2,695 EBIT DA 4,929 6,618 Selected items impacting comparability (110) (1,338) Adjusted EBITDA $ 4,819 $ 5,280 Selected Items Impacting Comparability Loss (gain) on disposal or impairment of long-lived assets $ - $ - Loss (income) from discontinued operations - - Foreign currency transaction (gain)/loss 3 (1,715) Employee severance expense 3,855 - Impact of change in basis of NGL inventory in fresh-start reporting - - Unrealized (gain)/loss on derivative activities - - Change in fair value of warrants - - Reversal of allowance on goods and services tax receivable (4,144) - Depreciation and amortization included within equity in earnings of White Cliffs - - Allowance on (recovery of) receivable from AGE Refining - - Restricted stock expense Selected items impacting comparability $ (110) $ (1,338) 38

39 SemLogistics Adjusted EBITDA Calculation (dollars in thousands, unaudited) Net income (loss) attributable to SemGroup Corporation $ 1,600 $ 2,474 Add: Interest expense Add: Income tax expense (benefit) 271 1,005 Add: Depreciation and amortization expense 2,280 1,964 EBIT DA 4,369 6,183 Selected items impacting comparability Adjusted EBITDA $ 4,431 $ 6,399 Selected Items Impacting Comparability Three Months Ended March 31, 7, ,054.0 Loss (gain) on disposal or impairment of long-lived assets $ - $ - Loss (income) from discontinued operations 7 46 Foreign currency transaction (gain)/loss (48) 37 Employee severance expense - - Impact of change in basis of NGL inventory in fresh-start reporting - - Unrealized (gain)/loss on derivative activities - - Change in fair value of warrants - - Reversal of allowance on goods and services tax receivable - - Depreciation and amortization included within equity in earnings of White Cliffs - - Allowance on (recovery of) receivable from AGE Refining - - Restricted stock expense Selected items impacting comparability $ 62 $

40 SemMaterials México Adjusted EBITDA Calculation (dollars in thousands, unaudited) Three Months Ended March 31, Net income (loss) attributable to SemGroup Corporation $ (1,270) $ (1,126) Add: Interest expense - 13 Add: Income tax expense (benefit) 157 (166) Add: Depreciation and amortization expense 1,632 1,556 EBIT DA Selected items impacting comparability (162) 64 Adjusted EBITDA $ 357 $ 341 2,989.1 (551.0) Selected Items Impacting Comparability Loss (gain) on disposal or impairment of long-lived assets $ (63) $ - Loss (income) from discontinued operations - - Foreign currency transaction (gain)/loss (162) (3) Employee severance expense - - Impact of change in basis of NGL inventory in fresh-start reporting - - Unrealized (gain)/loss on derivative activities - - Change in fair value of warrants - - Reversal of allowance on goods and services tax receivable - - Depreciation and amortization included within equity in earnings of White Cliffs - - Allowance on (recovery of) receivable from AGE Refining - - Restricted stock expense Selected items impacting comparability $ (162) $ 64 40

41 White Cliffs Pipeline, L.L.C. Summarized Income Statement Information (100% White Cliffs - not adjusted for net ownership interest) Three Months Ended March 31, (amounts in thousands, unaudited) Revenue $ 13,493 $ 12,086 Operating, general and administrative expenses 3,211 3,784 Depreciation and amortization expense 5,205 5,568 Net income $ 5,077 $ 2,734 Add: Depreciation and amortization expense 5,205 5,568 EBITDA 10,282 8,302 Add: Allocated Overhead 1,072 2,005 EBITDA before Allocate Overhead 11,354 10,307 EBITDA before Allocated Overhead - 51% 5,791 5,257 Less: Allocated Overhead 1,072 2,005 SemCrude's 51% of White Cliffs 4,719 3,252 During the three months ended March 31, 2010, SemGroup owned 99% of White Cliffs. During the three months ended March 31, 2011, SemGroup owned 51% of White Cliffs. 41

42 Corporate Organization Conduct operations through six primary business segments 42