
15.	CONDENSED CONSOLIDATING GUARANTOR FINANCIAL STATEMENTS

Pursuant to the Registration Rights Agreement related to our offering of $300 million of 7.50% senior unsecured notes, as discussed in Note 8, we intend to file a registration statement with the SEC so that holders of the Notes can exchange the Notes and the related guarantees for the Exchange Notes and related guarantees.

Each of the Guarantors is 100% owned by SemGroup Corporation (the "Parent"). Such guarantees of the Notes are full and unconditional and constitute the joint and several obligations of the Guarantors. The guarantees of the Exchange Notes will be full and unconditional and will constitute the joint and several obligations of the Guarantors. There are no significant restrictions upon the ability of the Parent or any of the Guarantors to obtain funds from its respective subsidiaries by dividend or loan. None of the assets of the Guarantors represent restricted net assets pursuant to Rule 4-08(e)(3) of Regulation S-X under the Securities Act.

Unaudited condensed consolidating financial statements for the Parent, the Guarantors and non-guarantors as of September 30, 2013 and December 31, 2012 and for each of the three months and nine months ended September 30, 2013 and 2012 are presented on an equity method basis in the tables below (in thousands).

Intercompany receivable and payable balances, including notes receivable and payable, are capital transactions primarily to facilitate the capital needs of our subsidiaries. As such, subsidiary intercompany balances have been reported as a reduction to equity on the condensed consolidating Guarantor balance sheets. The Parent's net intercompany balance, including note receivable, and investments in subsidiaries have been reported in equity method investments on the condensed consolidating Guarantor balance sheets. Intercompany transactions, such as daily cash management activities, have been reported as financing activities within the condensed consolidating Guarantor statements of cash flows. The Parent's investing activities with subsidiaries, such as the drop down of a 33% interest in SCPL to Rose Rock in the first quarter of 2013 have been reflected as cash flows from investing activities. Quarterly cash distributions from Rose Rock representing a return on capital have been included in the Parent's cash flows from operations. These balances are eliminated through consolidating adjustments below.

Condensed Consolidating Guarantor Balance Sheets



	September 30, 2013
	Parent		Guarantors		Non-guarantors		Consolidating Adjustments			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	9,711	$	—	$	58,135	$	(3,128	)	$	64,718
Restricted cash	32,880		—		1,302		—			34,182
Accounts receivable	640		11,256		356,350		—			368,246
Receivable from affiliates	752		15,189		244		(3,146		)	13,039
Inventories	—		1,164		45,445		—			46,609
Other current assets	2,417		330		12,420		—			15,167
Total current assets	46,400		27,939		473,896		(6,274		)	541,961
Property, plant and equipment	4,521		318,805		733,790		—			1,057,116
Equity method investments	1,475,019		524,300		228,076		(1,709,246		)	518,149
Goodwill	—		23,587		37,089		—			60,676
Other intangible assets	32		167,834		12,031		—			179,897
Other noncurrent assets, net	19,745		1,172		11,686		—			32,603
Total assets	$	1,545,717	$	1,063,637	$	1,496,568	$	(1,715,520	)	$	2,390,402
LIABILITIES AND OWNERS’ EQUITY
Current liabilities:
Accounts payable	$	104	$	44,888	$	258,680	$	—		$	303,672
Payable to affiliates	14		121		1,967		—			2,102
Accrued liabilities	14,715		8,026		58,773		(5		)	81,509
Payables to pre-petition creditors	32,317		—		55		—			32,372
Deferred revenue	—		—		18,835		—			18,835
Other current liabilities	97		714		8,309		—			9,120
Current portion of long-term debt	—		—		26		—			26
Total current liabilities	47,247		53,749		346,645		(5		)	447,636
Long-term debt	455,000		—		85,043		—			540,043
Deferred income taxes	976		—		52,612		—			53,588
Other noncurrent liabilities	46,358		—		49,060		—			95,418
Commitments and contingencies
Owners’ equity excluding noncontrolling interests in consolidated subsidiaries	996,136		1,009,888		710,848		(1,715,515		)	1,001,357
Noncontrolling interests in consolidated subsidiaries	—		—		252,360		—			252,360
Total owners’ equity	996,136		1,009,888		963,208		(1,715,515		)	1,253,717
Total liabilities and owners’ equity	$	1,545,717	$	1,063,637	$	1,496,568	$	(1,715,520	)	$	2,390,402



	December 31, 2012
	Parent		Guarantors		Non-guarantors		Consolidating Adjustments			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	19,123	$	—	$	63,844	$	(2,938	)	$	80,029
Restricted cash	33,324		—		1,354		—			34,678
Accounts receivable	1,155		7,927		337,087		—			346,169
Receivable from affiliates	827		7,222		109		(1,980		)	6,178
Inventories	—		181		34,252		—			34,433
Other current assets	2,528		312		15,676		—			18,516
Total current assets	56,957		15,642		452,322		(4,918		)	520,003
Property, plant and equipment	5,399		122,899		686,426		—			814,724
Equity method investments	1,104,832		468,033		138,970		(1,324,033		)	387,802
Goodwill	—		—		9,884		—			9,884
Other intangible assets	36		—		7,549		—			7,585
Other noncurrent assets, net	3,606		1,317		3,258		—			8,181
Total assets	$	1,170,830	$	607,891	$	1,298,409	$	(1,328,951	)	$	1,748,179
LIABILITIES AND OWNERS’ EQUITY
Current liabilities:
Accounts payable	$	70	$	12,304	$	241,249	$	—		$	253,623
Accrued liabilities	8,972		4,546		50,313		—			63,831
Payables to pre-petition creditors	32,876		—		57		—			32,933
Deferred revenue	—		—		18,973		—			18,973
Other current liabilities	134		580		4,263		(17		)	4,960
Current portion of long-term debt	—		—		24		—			24
Total current liabilities	42,052		17,430		314,879		(17		)	374,344
Long-term debt	201,500		—		4,562		—			206,062
Deferred income taxes	2,018		—		63,602		—			65,620
Other noncurrent liabilities	32,866		—		47,759		—			80,625
Commitments and contingencies
Owners’ equity excluding noncontrolling interests in consolidated subsidiaries	892,394		590,461		738,473		(1,328,934		)	892,394
Noncontrolling interests in consolidated subsidiaries	—		—		129,134		—			129,134
Total owners’ equity	892,394		590,461		867,607		(1,328,934		)	1,021,528
Total liabilities and owners’ equity	$	1,170,830	$	607,891	$	1,298,409	$	(1,328,951	)	$	1,748,179

Condensed Consolidating Guarantor Statements of Operations



	Three Months Ended September 30, 2013
	Parent			Guarantors		Non-guarantors			Consolidating Adjustments			Consolidated
Revenues:
Product	$	—		$	63,623	$	231,404		$	(6,575	)	$	288,452
Service	—			1,174		35,228			—			36,402
Other	—			—		32,894			—			32,894
Total revenues	—			64,797		299,526			(6,575		)	357,748
Expenses:
Costs of products sold, exclusive of depreciation and amortization shown below	—			47,657		214,472			(6,575		)	255,554
Operating	—			5,069		47,291			—			52,360
General and administrative	7,855			2,242		10,855			—			20,952
Depreciation and amortization	497			4,838		10,778			—			16,113
Loss (gain) on disposal of long-lived assets, net	—			679		(271		)	—			408
Total expenses	8,352			60,485		283,125			(6,575		)	345,387
Earnings from equity method investments	15,497			24,667		10,787			(43,468		)	7,483
Operating income	7,145			28,979		27,188			(43,468		)	19,844
Other expenses (income):
Interest expense	4,029			1,314		5,136			(1,399		)	9,080
Foreign currency transaction gain	—			—		(457		)	—			(457		)
Other expense, net	3,383			1		(112		)	1,399			4,671
Total other expenses, net	7,412			1,315		4,567			—			13,294
Income (loss) from continuing operations before income taxes	(267		)	27,664		22,621			(43,468		)	6,550
Income tax expense (benefit)	4,960			—		(1,547		)	—			3,413
Income (loss) from continuing operations	(5,227		)	27,664		24,168			(43,468		)	3,137
Loss from discontinued operations, net of income taxes	—			—		(2		)	—			(2		)
Net income (loss)	(5,227		)	27,664		24,166			(43,468		)	3,135
Less: net income attributable to noncontrolling interests	—			—		5,054			—			5,054
Net income (loss) attributable to SemGroup	$	(5,227	)	$	27,664	$	19,112		$	(43,468	)	$	(1,919	)
Net income (loss)	$	(5,227	)	$	27,664	$	24,166		$	(43,468	)	$	3,135
Other comprehensive income (loss), net of income taxes	(2,162		)	—		8,267			—			6,105
Comprehensive income (loss)	(7,389		)	27,664		32,433			(43,468		)	9,240
Less: comprehensive income attributable to noncontrolling interests	—			—		5,054			—			5,054
Comprehensive income (loss) attributable to SemGroup	$	(7,389	)	$	27,664	$	27,379		$	(43,468	)	$	4,186



	Three Months Ended September 30, 2012
	Parent			Guarantors			Non-guarantors			Consolidating Adjustments			Consolidated
Revenues:
Product	$	—		$	28,781		$	182,672		$	(2,251	)	$	209,202
Service	—			282			29,518			—			29,800
Other	—			62			38,788			—			38,850
Total revenues	—			29,125			250,978			(2,251		)	277,852
Expenses:
Costs of products sold, exclusive of depreciation and amortization shown below	—			23,483			168,598			(2,251		)	189,830
Operating	—			3,055			49,312			—			52,367
General and administrative	3,840			2,793			10,047			—			16,680
Depreciation and amortization	628			1,649			9,804			—			12,081
Gain on disposal of long-lived assets, net	—			(3		)	(3,612		)	—			(3,615		)
Total expenses	4,468			30,977			234,149			(2,251		)	267,343
Earnings from equity method investments	14,201			20,904			10,021			(42,010		)	3,116
Operating income	9,733			19,052			26,850			(42,010		)	13,625
Other expenses (income):
Interest expense	4,262			(2,230		)	1,346			(1,386		)	1,992
Foreign currency transaction loss	—			—			355			—			355
Other expense (income), net	8,152			(50		)	(134		)	1,386			9,354
Total other expenses, net	12,414			(2,280		)	1,567			—			11,701
Income (loss) from continuing operations before income taxes	(2,681		)	21,332			25,283			(42,010		)	1,924
Income tax expense	96			—			1,995			—			2,091
Income (loss) from continuing operations	(2,777		)	21,332			23,288			(42,010		)	(167		)
Loss from discontinued operations, net of income taxes	—			(4		)	(261		)	—			(265		)
Net income (loss)	(2,777		)	21,328			23,027			(42,010		)	(432		)
Less: net income attributable to noncontrolling interests	—			—			2,336			—			2,336
Net income (loss) attributable to SemGroup	$	(2,777	)	$	21,328		$	20,691		$	(42,010	)	$	(2,768	)
Net income (loss)	$	(2,777	)	$	21,328		$	23,027		$	(42,010	)	$	(432	)
Other comprehensive loss, net of income taxes	1,475			—			10,597			—			12,072
Comprehensive income (loss)	(1,302		)	21,328			33,624			(42,010		)	11,640
Less: comprehensive income attributable to noncontrolling interests	—			—			2,336			—			2,336
Comprehensive income (loss) attributable to SemGroup	$	(1,302	)	$	21,328		$	31,288		$	(42,010	)	$	9,304



	Nine Months Ended September 30, 2013
	Parent			Guarantors		Non-guarantors			Consolidating Adjustments			Consolidated
Revenues:
Product	$	—		$	146,880	$	634,117		$	(15,663	)	$	765,334
Service	—			1,646		94,091			—			95,737
Other	—			—		108,617			—			108,617
Total revenues	—			148,526		836,825			(15,663		)	969,688
Expenses:
Costs of products sold, exclusive of depreciation and amortization shown below	—			108,814		587,481			(15,663		)	680,632
Operating	—			13,041		149,772			—			162,813
General and administrative	15,983			6,347		32,557			—			54,887
Depreciation and amortization	1,504			8,898		31,161			—			41,563
Loss (gain) on disposal of long-lived assets, net	—			682		(812		)	—			(130		)
Total expenses	17,487			137,782		800,159			(15,663		)	939,765
Earnings from equity method investments	52,432			63,011		31,886			(107,640		)	39,689
Operating income	34,945			73,755		68,552			(107,640		)	69,612
Other expenses (income):
Interest expense	1,112			3,141		15,845			(4,127		)	15,971
Foreign currency transaction gain	—			—		(973		)	—			(973		)
Other expense (income), net	32,826			159		(341		)	4,127			36,771
Total other expenses, net	33,938			3,300		14,531			—			51,769
Income from continuing operations before income taxes	1,007			70,455		54,021			(107,640		)	17,843
Income tax benefit	(40,469		)	—		(836		)	—			(41,305		)
Income from continuing operations	41,476			70,455		54,857			(107,640		)	59,148
Income (loss) from discontinued operations, net of income taxes	—			66		(1		)	—			65
Net income	41,476			70,521		54,856			(107,640		)	59,213
Less: net income attributable to noncontrolling interests	—			—		14,429			—			14,429
Net income attributable to SemGroup	$	41,476		$	70,521	$	40,427		$	(107,640	)	$	44,784
Net income	$	41,476		$	70,521	$	54,856		$	(107,640	)	$	59,213
Other comprehensive income (loss), net of income taxes	190			—		(4,497		)	—			(4,307		)
Comprehensive income	41,666			70,521		50,359			(107,640		)	54,906
Less: comprehensive income attributable to noncontrolling interests	—			—		14,429			—			14,429
Comprehensive income attributable to SemGroup	$	41,666		$	70,521	$	35,930		$	(107,640	)	$	40,477



	Nine Months Ended September 30, 2012
	Parent		Guarantors			Non-guarantors			Consolidating Adjustments			Consolidated
Revenues:
Product	$	—	$	86,158		$	629,770		$	(7,520	)	$	708,408
Service	—		951			85,776			—			86,727
Other	—		69			126,456			—			126,525
Total revenues	—		87,178			842,002			(7,520		)	921,660
Expenses:
Costs of products sold, exclusive of depreciation and amortization shown below	—		68,874			589,929			(7,520		)	651,283
Operating	—		9,255			163,495			—			172,750
General and administrative	16,528		6,109			30,436			—			53,073
Depreciation and amortization	1,938		4,707			29,042			—			35,687
Gain on disposal of long-lived assets, net	—		(3		)	(3,493		)	—			(3,496		)
Total expenses	18,466		88,942			809,409			(7,520		)	909,297
Earnings from equity method investments	36,721		39,992			25,053			(78,863		)	22,903
Operating income	18,255		38,228			57,646			(78,863		)	35,266
Other expenses (income):
Interest expense	4,064		(915		)	8,609			(3,995		)	7,763
Foreign currency transaction loss	—		—			358			—			358
Other expense (income), net	12,902		(19		)	(95		)	3,995			16,783
Total other expenses (income), net	16,966		(934		)	8,872			—			24,904
Income from continuing operations before income taxes	1,289		39,162			48,774			(78,863		)	10,362
Income tax expense	286		—			699			—			985
Income from continuing operations	1,003		39,162			48,075			(78,863		)	9,377
Income (loss) from discontinued operations, net of income taxes	3		(11		)	(448		)	—			(456		)
Net income	1,006		39,151			47,627			(78,863		)	8,921
Less: net income attributable to noncontrolling interests	—		—			7,915			—			7,915
Net income attributable to SemGroup	$	1,006	$	39,151		$	39,712		$	(78,863	)	$	1,006
Net income	$	1,006	$	39,151		$	47,627		$	(78,863	)	$	8,921
Other comprehensive income, net of income taxes	984		—			13,946			—			14,930
Comprehensive income	1,990		39,151			61,573			(78,863		)	23,851
Less: comprehensive income attributable to noncontrolling interests	—		—			7,915			—			7,915
Comprehensive income attributable to SemGroup	$	1,990	$	39,151		$	53,658		$	(78,863	)	$	15,936

Condensed Consolidating Guarantor Statements of Cash Flows



	Nine Months Ended September 30, 2013
	Parent			Guarantors			Non-guarantors			Consolidating Adjustments			Consolidated
Net cash provided by operating activities	$	19,717		$	16,424		$	74,197		$	(13,819	)	$	96,519
Cash flows from investing activities:
Capital expenditures	(622		)	(65,845		)	(65,183		)	—			(131,650		)
Proceeds from sale of long-lived assets	—			3			1,045			—			1,048
Proceeds from the sale of interest in SemCrude Pipeline, L.L.C. to Rose Rock Midstream L.P.	189,500			—			—			(189,500		)	—
Investments in non-consolidated subsidiaries	(18,775		)	(28,031		)	(96,657		)	—			(143,463		)
Payments to acquire businesses	—			(306,232		)	(49,969		)	—			(356,201		)
Distributions in excess of equity in earnings of affiliates	5,541			—			7,550			—			13,091
Net cash provided by (used in) investing activities	175,644			(400,105		)	(203,214		)	(189,500		)	(617,175		)
Cash flows from financing activities:
Debt issuance costs	(9,037		)	—			(2,828		)	—			(11,865		)
Borrowings on credit facilities	575,000			—			353,474			—			928,474
Principal payments on credit facilities and other obligations	(321,500		)	—			(272,903		)	—			(594,403		)
Proceeds from issuance of Rose Rock Midstream, L.P. common units, net of offering costs	—			—			210,226			—			210,226
Distributions to noncontrolling interests	—			—			(11,458		)	—			(11,458		)
Proceeds from warrant exercises	225			—			—			—			225
Repurchase of stock-based awards for payment of statutory taxes due on stock-based compensation	(371		)	—			—			—			(371		)
Dividends paid	(16,387		)	—			—			—			(16,387		)
Intercompany borrowings (advances), net	(432,703		)	383,681			(154,107		)	203,129			—
Net cash provided by (used in) financing activities	(204,773		)	383,681			122,404			203,129			504,441
Effect of exchange rate changes on cash and cash equivalents	—			—			904			—			904
Change in cash and cash equivalents	(9,412		)	—			(5,709		)	(190		)	(15,311		)
Cash and cash equivalents at beginning of period	19,123			—			63,844			(2,938		)	80,029
Cash and cash equivalents at end of period	$	9,711		$	—		$	58,135		$	(3,128	)	$	64,718



	Nine Months Ended September 30, 2012
	Parent			Guarantors			Non-guarantors			Consolidating Adjustments			Consolidated
Net cash provided by (used in) operating activities	$	(4,374	)	$	11,105		$	58,353		$	(13,326	)	$	51,758
Cash flows from investing activities:
Capital expenditures	(1,621		)	(41,706		)	(38,796		)	—			(82,123		)
Proceeds from sale of long-lived assets	—			12			335			—			347
Investments in non-consolidated subsidiaries	(1,740		)	(62,464		)	205			—			(63,999		)
Proceeds from the sale of non-consolidated affiliate	—			—			3,500			—			3,500
Distributions in excess of equity in earnings of affiliates	5,062			—			5,507			—			10,569
Net cash provided by (used in) investing activities	1,701			(104,158		)	(29,249		)	—			(131,706		)
Cash flows from financing activities:
Debt issuance costs	(455		)	—			(239		)	—			(694		)
Borrowings on credit facilities	184,000			—			76,500			—			260,500
Principal payments on credit facilities and other obligations	(76,500		)	—			(102,501		)	—			(179,001		)
Distributions to noncontrolling interests	—			—			(5,754		)	—			(5,754		)
Repurchase of stock-based awards for payment of statutory taxes due on stock-based compensation	(242		)	—			—			—			(242		)
Intercompany borrowing (advances), net	(98,381		)	93,053			(8,086		)	13,414			—
Net cash provided by (used in) financing activities	8,422			93,053			(40,080		)	13,414			74,809
Effect of exchange rate changes on cash and cash equivalents	—			—			(977		)	—			(977		)
Change in cash and cash equivalents	5,749			—			(11,953		)	88			(6,116		)
Change in cash and cash equivalents included in discontinued operations	—			—			(36		)	—			(36		)
Change in cash and cash equivalents from continuing operations	5,749			—			(11,989		)	88			(6,152		)
Cash and cash equivalents at beginning of period	111			—			76,264			(2,762		)	73,613
Cash and cash equivalents at end of period	$	5,860		$	—		$	64,275		$	(2,674	)	$	67,461