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Rose Rock Midstream, L.P.
 9 Months Ended
Sep. 30, 2012
Investments in and Advances to Affiliates, Schedule of Investments [Abstract]  
ROSE ROCK MIDSTREAM, L.P.
ROSE ROCK MIDSTREAM, L.P.
On December 14, 2011, our subsidiary Rose Rock Midstream, L.P. (“Rose Rock”) completed an initial public offering (“IPO”) of 7 million common units representing limited partner interests (NYSE: RRMS). We control the operations of Rose Rock through our ownership of the general partner interest, and we continue to consolidate Rose Rock. Our ownership interest in Rose Rock as of September 30, 2012 (unaudited) and December 31, 2011 is shown in the table below:

General partner interest
2
%
Limited partner interest (a)
57
%
Total ownership interest
59
%
(a)
Represents 1.4 million common units and 8.4 million subordinated units
Outside ownership interests in Rose Rock are reflected in “noncontrolling interests in consolidated subsidiaries” on our condensed consolidated balance sheets at September 30, 2012 and December 31, 2011. The portion of Rose Rock’s net income attributable to outside owners is reflected within “net income attributable to noncontrolling interests” in our condensed consolidated statements of operations and comprehensive income (loss) for the three months and nine months ended September 30, 2012.
We receive distributions from Rose Rock on our common and subordinated units and our two percent general partner interest, which includes our incentive distribution rights. Rose Rock intends to pay a minimum quarterly distribution of $0.3625 per unit, to the extent it has sufficient available cash, as defined in Rose Rock’s partnership agreement. Rose Rock’s partnership agreement requires Rose Rock to distribute all of its available cash each quarter in the following manner:
 
Total Quarterly Distributions
Per Unit Target Amount
 
Marginal Percentage
Interest in Distributions
 
Unitholders
 
General
Partner
 
Incentive
Distribution
Rights
Minimum Quarterly Distributions
 
 
 
 
 
 
$
0.362500

 
98.0
%
 
2.0
%
 
—

First Target Distribution
above
 
$
0.362500

 
up to
 
$
0.416875

 
98.0
%
 
2.0
%
 
—

Second Target Distribution
above
 
$
0.416875

 
up to
 
$
0.453125

 
85.0
%
 
2.0
%
 
13.0
%
Third Target Distribution
above
 
$
0.453125

 
up to
 
$
0.543750

 
75.0
%
 
2.0
%
 
23.0
%
Thereafter
 
 
 
 
above
 
$
0.543750

 
50.0
%
 
2.0
%
 
48.0
%
 
The following table shows the distributions paid or expected to be paid (in thousands, except for per unit amounts):

 
 
Record Date
 
Payment Date
 
Distri-bution
Per Unit
 
Distributions Paid/To Be Paid
Quarter Ended
 
SemGroup
 
Noncontrolling
Interest
Common Units
 
Total
Distributions
 
General
Partner
 
Incentive
Distri-butions
 
Common
Units
 
Subord-inated
Units
 
December 31, 2011
*
February 3, 2012
 
February 13, 2012
 
$
0.0670

* 
$
23

 
$
—

 
$
93

 
$
561

 
$
470

 
$
1,147

March 31, 2012
 
May 7, 2012
 
May 15, 2012
 
$
0.3725

  
$
128

 
$
—

 
$
517

 
$
3,125

 
$
2,607

 
$
6,377

June 30, 2012
 
August 6, 2012
 
August 14, 2012
 
$
0.3825

 
$
131

 
$
—

 
$
532

 
$
3,209

 
$
2,678

 
$
6,549

September 30, 2012
 
November 5, 2012
 
November 14, 2012
**
$
0.3925

**
$
134

 
$
—

 
$
545

 
$
3,293

 
$
2,748

 
$
6,720

*Minimum quarterly distribution for quarter ended December 31, 2011 was prorated for the period beginning immediately after the closing of Rose Rock’s IPO, December 14, 2011 through December 31, 2011.
**Expected payment date and amounts for distributions related to the quarter ended September 30, 2012.Certain summarized balance sheet information of Rose Rock is shown below (in thousands):
 
(unaudited)
 
 
 
September 30,
2012
 
December 31,
2011
Cash
$
13,498

 
$
9,709

Other current assets
236,144

 
156,873

Property, plant and equipment, net
285,244

 
276,246

Other noncurrent assets, net
2,665

 
2,666

Total assets
$
537,551

 
$
445,494

Current liabilities
$
227,131

 
$
140,553

Long-term debt
69

 
87

Partners’ capital attributable to SemGroup
180,441

 
177,323

Partners’ capital attributable to noncontrolling interests
129,910

 
127,531

Total liabilities and partners’ capital
$
537,551

 
$
445,494

Certain summarized income statement information of Rose Rock for the three months and nine months ended September 30, 2012 and September 30, 2011 is shown below (in thousands):
 
Three Months Ended September 30, 2012
 
Three Months Ended September 30, 2011
 
Nine Months Ended September 30, 2012
 
Nine Months Ended September 30, 2011
 
 
 
 
Revenue
$
131,554

 
$
104,616

 
$
468,687

 
$
299,121

Cost of products sold
$
111,790

 
$
90,660

 
$
412,847

 
$
252,804

Operating, general and administrative expenses
$
9,779

 
$
6,570

 
$
25,976

 
$
20,202

Depreciation and amortization expense
$
3,066

 
$
3,122

 
$
9,032

 
$
8,505

Net income
$
6,469

 
$
3,830

 
$
19,353

 
$
16,407