EQUITY

Unaudited condensed consolidated statement of changes in owners’ equity

The following table shows the changes in our consolidated owners’ equity accounts from December 31, 2012 to September 30, 2013 (in thousands):



	Common Stock		Additional Paid-in Capital			Treasury Stock			Accumulated Deficit			Accumulated Other Comprehensive Loss			Noncontrolling Interests			Total Owners’ Equity
Balance at December 31, 2012	$	420	$	1,039,189		$	(242	)	$	(145,674	)	$	(1,299	)	$	129,134		$	1,021,528
Net income	—		—			—			44,784			—			14,429			59,213
Other comprehensive income (loss), net of income taxes	—		—			—			—			(4,307		)	—			(4,307		)
Distributions to noncontrolling interests	—		—			—			—			—			(11,458		)	(11,458		)
Rose Rock Midstream, L.P. equity issuance	—		—			—			—			—			210,226			210,226
Transfer of SemCrude Pipeline interest to Rose Rock*	—		56,800			—			—			—			(90,516		)	(33,716		)
Warrants settlements	4		23,754			—			—			—			—			23,758
Dividends paid	—		(16,387		)	—			—			—			—			(16,387		)
Unvested dividend equivalent rights	—		(47		)	—			—			—			(33		)	(80		)
Non-cash equity compensation	—		4,733			—			—			—			578			5,311
Issuance of common stock under compensation plans	1		(1		)	—			—			—			—			—
Repurchase of common stock	—		—			(371		)	—			—			—			(371		)
Balance at September 30, 2013	$	425	$	1,108,041		$	(613	)	$	(100,890	)	$	(5,606	)	$	252,360		$	1,253,717

* On January 13, 2013, we contributed a 33% interest in SemCrude Pipeline, L.L.C. to our consolidated subsidiary, Rose Rock. As this transaction was between entities under common control, the interest in SemCrude Pipeline, L.L.C. was recorded by Rose Rock based on SemGroup's book value. This amount represents the purchase price in excess of book value which was attributed to the noncontrolling interest owners of Rose Rock. The entry to additional paid-in capital has been recorded net of tax.

Accumulated other comprehensive loss

The following table presents the changes in the components of accumulated other comprehensive loss from December 31, 2012 to September 30, 2013 (in thousands):



	Currency Translation			Employee Benefit Plans			Total
Balance at December 31, 2012	$	1,855		$	(3,154	)	$	(1,299	)
Currency translation adjustment	(4,444		)	—			(4,444		)
Changes related to benefit plans, net of income tax expense of $46	—			137			137
Balance at September 30, 2013	$	(2,589	)	$	(3,017	)	$	(5,606	)

There were no significant items reclassified out of accumulated other comprehensive loss to net income for the three months and nine months ended September 30, 2013.

Common stock

Upon emergence from bankruptcy, we issued 40,882,496 shares of common stock. The Plan of Reorganization specified that we were to issue an additional 517,500 shares of common stock in settlement of pre-petition claims. As of September 30, 2013, we have issued 226,016 shares of this stock and will issue the remainder as the process of resolving the claims progresses. The owners’ equity balances on the condensed consolidated balance sheets include the shares that are required to be issued in settlement of pre-petition claims. The shares of common stock reflected on the condensed consolidated balance sheet at September 30, 2013 are summarized below:



Shares issued on Emergence Date	40,882,496
Shares subsequently issued in settlement of pre-petition claims	226,016
Remaining shares required to be issued in settlement of pre-petition claims	291,484
Issuance of shares under employee and director compensation programs(*)	689,320
Shares issued upon exercise of warrants	441,325
Total shares	42,530,641
Par value per share	$	0.01
Common stock on September 30, 2013 balance sheet (in thousands)	$	425

(*) These shares include 105,738 shares which vested during the nine months ended September 30, 2013. Of these vested shares, recipients sold back to the Company 8,591 shares to satisfy tax withholding obligations which are being recognized at cost as treasury stock on the condensed consolidated balance sheet.

In addition to the shares in the table above, there are shares of unvested restricted stock outstanding at September 30, 2013. The par value of these shares has not yet been reflected in common stock on the condensed consolidated balance sheet, as these shares have not yet vested. There are also shares of restricted stock that were returned to treasury upon forfeiture. The par value of these shares is not reflected in the condensed consolidated balance sheet, as no accounting recognition is given to forfeited shares.

The common stock includes Class A and Class B stock. Class A stock is eligible to be listed on an exchange, whereas Class B stock is not. Any share of Class B stock may be converted to Class A at the election of the holder. Both classes of stock have full voting rights. Both classes of stock have a par value of $0.01 per share. The total number of shares authorized for issuance is 90,000,000 shares of Class A stock and 10,000,000 shares of Class B stock.

Equity-based compensation

We have reserved common stock for issuance pursuant to director and employee compensation programs. At September 30, 2013, there were approximately 534,000 unvested shares that have been granted under these programs. The par value of these shares is not reflected in common stock on the condensed consolidated balance sheet, as these shares have not yet vested. Shares of restricted stock awards that were forfeited were returned to treasury. The par value of these shares is not reflected in the condensed consolidated balance sheet, as no accounting recognition is given to forfeited shares. For certain of the awards, the number of shares that will vest is contingent upon our achievement of certain specified targets. If we meet the specified maximum targets, approximately 141,000 additional shares could vest. The holders of certain restricted stock awards granted prior to 2013 are entitled to equivalent dividends (“UDs”) to be received upon vesting of the restricted stock awards. The dividends will be settled in common shares based on the market price of our Class A shares as of the close of business on the vesting date. The UDs are subject to the same forfeiture and acceleration conditions as the associated restricted stock awards. At September 30, 2013, the value of the UDs related to unvested restricted stock awards was approximately $78 thousand. This is equivalent to 1,366 Class A shares based on the quarter end close of business market price of our Class A shares of $57.02 per share. Dividends related to the 2013 restricted stock awards will be settled in cash upon vesting.

During the nine months ended September 30, 2013, we have issued 201,451 restricted stock awards with a weighted average grant date fair value of $52.78 per award.

Warrants

Upon emergence from bankruptcy, we issued 1,634,210 warrants. The Plan of Reorganization specified that we were to issue an additional 544,737 warrants in settlement of the pre-petition claims. As of September 30, 2013, we have issued 237,897 of the warrants and will issue the remainder as the process of resolving the claims progresses. The warrants are traded on the New York Stock Exchange under the ticker symbol SEMGWS. We classify the warrant fair value as a Level 1 measurement. The warrants reflected on the condensed consolidated balance sheet at September 30, 2013 are summarized below:



Warrants issued on Emergence Date	1,634,210
Warrants subsequently issued in settlement of pre-petition claims	237,897
Remaining warrants to be issued in settlement of pre-petition claims	306,840
Warrants exercised (*)	(818,124		)
Total warrants at September 30, 2013	1,360,823
Fair value per warrant at September 30, 2013	$	34.06
Warrant value included within other noncurrent liabilities on September 30, 2013 consolidated balance sheet	$	46,349,631

(*) During the nine months ended September 30, 2013, certain warrant holders exercised a total of 772,817 warrants resulting in the issuance of 425,618 Class A shares.

Each warrant entitles the holder to purchase one share of common stock for $25 at any time before the November 30, 2014 expiration date. Upon exercise, a holder may elect a cashless exercise, whereby the number of shares to be issued to the holder is reduced, in lieu of a cash payment. In the event of a change in control of the Company, the holders of the warrants would have the right to sell the warrants to us, and we would have the right to purchase the warrants from the holders. In either case, the price to be paid for the warrants would be calculated using a standard pricing model with inputs specified in the warrant agreement.

Employee Stock Purchase Plan

As part of the Company's 2013 Annual Meeting of Stockholders held on May 22, 2013, Company stockholders approved the 2013 Employee Stock Purchase Plan (“ESPP”). The ESPP will be effective October 1, 2013 and will allow Company employees to purchase the Company's Class A stock through payroll deductions based on six month offering periods. Share purchases will be limited to 12,500 shares per offering period per employee-participant. Shares will be able to be purchased by employee-participants at 85% of the Fair Market Value (as defined by the ESPP). Upon the purchase of shares, employee-participants will receive all stockholder rights including dividend and voting rights, and will be permitted to sell their shares at any time. The Company has made 1.0 million shares available under the ESPP. The ESPP terminates on September 30, 2023 or earlier at the discretion of the Board of Directors. No shares are expected to be issued under the ESPP in fiscal year 2013 as the end of the first offering period does not occur until March 31, 2014. The Company expects to begin recording stock based compensation expense related to the ESPP in the fourth quarter for 2013, the start of the first offering period.

Dividends

On May 30, 2013, we paid a dividend of $0.19 per share to shareholders of record on May 20, 2013. On August 30, 2013, we paid a dividend of $0.20 per share to shareholders of record on August 19, 2013.

On November 6, 2013, we declared a dividend of $0.21 per share payable on December 3, 2013 to shareholders of record on November 22, 2013.