Rose Rock Midstream, L.P.

3 Months Ended

Mar. 31, 2014

Investments in and Advances to Affiliates, Schedule of Investments [Abstract]

ROSE ROCK MIDSTREAM, L.P.

ROSE ROCK MIDSTREAM, L.P.

We control the operations of our consolidated subsidiary, Rose Rock Midstream, L.P. ("Rose Rock") through our ownership of the general partner interest. As of March 31, 2014, we own the 2% general partner interest and a 51.6% limited partner interest made up of 4.4 million common units, 8.4 million subordinated units and 2.5 million Class A units.

We receive distributions from Rose Rock on our common and subordinated units, our 2% general partner interest and 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.

The following table shows the cash distributions paid or declared during 2014 and 2013 (in thousands, except for per unit amounts):

	Distribution Per Unit			Distributions Paid/To Be Paid
Quarter Ended				SemGroup								Noncontrolling Interest Common Units		Total Distributions
				General Partner		Incentive Distributions		Common Units		Subordinated Units
December 31, 2012	$	0.4025		$	167	$	—	$	1,163	$	3,377	$	3,624	$	8,331
March 31, 2013	$	0.4300		$	179	$	41	$	1,242	$	3,607	$	3,872	$	8,941
June 30, 2013	$	0.4400		$	183	$	72	$	1,271	$	3,692	$	3,962	$	9,180
September 30, 2013	$	0.4500		$	232	$	127	$	1,301	$	3,775	$	6,189	$	11,624
December 31, 2013	$	0.4650		$	257	$	244	$	2,041	$	3,901	$	6,398	$	12,841
March 31, 2014	$	0.4950	*	$	278	$	488	$	2,173	$	4,153	$	6,811	$	13,903

*Expected distributions related to the quarter ended March 31, 2014, which will be paid on May 15, 2014 to unitholders of record as of May 5, 2014.

Certain summarized balance sheet information of Rose Rock is shown below (in thousands):

	(Unaudited)
	March 31, 2014		December 31, 2013
Cash	$	2,823	$	15,459
Other current assets	346,817		306,128
Property, plant and equipment, net	308,270		311,616
Equity method investment	234,742		224,095
Goodwill	28,224		28,322
Other noncurrent assets, net	10,513		11,627
Total assets	$	931,389	$	897,247
Current liabilities	$	326,835	$	293,031
Long-term debt	244,578		245,088
Partners’ capital attributable to SemGroup	120,500		120,610
Partners’ capital attributable to noncontrolling interests	159,950		159,961
Noncontrolling interests in consolidated subsidiary retained by SemGroup	79,526		78,557
Total liabilities and equity	$	931,389	$	897,247

Certain summarized income statement information of Rose Rock for the three months ended March 31, 2014 and 2013 is shown below (in thousands):

	Three Months Ended March 31,
	2014		2013
Revenue	$	290,923	$	171,232
Cost of products sold	$	254,537	$	148,451
Operating, general and administrative expenses	$	18,501	$	8,979
Depreciation and amortization expense	$	10,534	$	3,507
Earnings from equity method investment	$	11,080	$	3,453
Net income	$	16,159	$	11,994
Noncontrolling interests in consolidated subsidiary retained by SemGroup	$	3,676	$	—
Net income attributable to Rose Rock Midstream, L.P.	$	12,483	$	11,994