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Rose Rock Midstream, L.P.
 6 Months Ended
Jun. 30, 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 June 30, 2014, we own the 2% general partner interest and a 56.8% limited partner interest made up of 6.8 million common units, 8.4 million subordinated units and 3.75 million Class A units.
On June 23, 2014, we contributed the remaining 33% interest in SemCrude Pipeline, L.L.C. ("SCPL") to Rose Rock for (i) cash of approximately $114.4 million, (ii) the issuance of 2.425 million common units, (iii) the issuance of 1.25 million Class A units, and (iv) an increase of the capital account of the general partner and a related issuance of general partner interest, to allow the general partner to maintain its 2% general partner interest. Subsequent to this transaction, Rose Rock owns 100% of SCPL, which owns a 51% membership interest in White Cliffs Pipeline, L.L.C. ("White Cliffs").
The Class A units are not entitled to receive any distribution of available cash (other than upon liquidation) prior to the first day of the month immediately following the first month for which the average daily throughput volumes on the White Cliffs Pipeline for such month are 125,000 barrels per day or greater. Upon such date, the Class A units will automatically convert into common units.
As the transaction was between entities under common control, Rose Rock recorded its investment in SCPL based on SemGroup's historical cost. The purchase price in excess of historical cost was treated as an equity transaction with SemGroup, which reduced the partners' capital accounts of Rose Rock's general and limited partners on a pro-rata basis.
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

June 30, 2014
$
0.5350

*
$
334

$
888

$
3,646

$
4,488

$
7,362

$
16,718


*Expected distributions related to the quarter ended June 30, 2014, which will be paid on August 14, 2014 to unitholders of record as of August 4, 2014.

Certain summarized balance sheet information of Rose Rock is shown below (in thousands):
 
(Unaudited)
 
 
 
June 30,
2014
 
December 31,
2013
Cash
$
3,353

 
$
15,459

Other current assets
669,012

 
306,128

Property, plant and equipment, net
336,377

 
311,616

Equity method investment
271,187

 
224,095

Goodwill
46,059

 
28,322

Other noncurrent assets, net
22,549

 
11,627

Total assets
$
1,348,537

 
$
897,247

 
 
 
 
Current liabilities
$
247,677

 
$
293,031

Long-term debt
847,568

 
245,088

Partners’ capital attributable to SemGroup
180,116

 
120,610

Partners’ capital attributable to noncontrolling interests
73,176

 
159,961

Noncontrolling interests in consolidated subsidiary retained by SemGroup
—

 
78,557

Total liabilities and equity
$
1,348,537

 
$
897,247


The June 30, 2014 balances for long-term debt and other current assets above include the impact of the issuance of senior unsecured notes by Rose Rock. The offering commenced on June 27, 2014 and proceeds were received on July 2, 2014 and used to pay down Rose Rock's revolving credit facility balance. At June 27, 2014, we recorded the liability for the senior unsecured notes and a receivable for the proceeds. See Note 8 for additional information.
Certain summarized income statement information of Rose Rock for the three months and six months ended June 30, 2014 and 2013 is shown below (in thousands):
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2014
 
2013
 
2014
 
2013
Revenue
$
290,432

 
$
161,422

 
$
581,355

 
$
332,654

Cost of products sold
$
255,745

 
$
140,506

 
$
510,282

 
$
288,957

Operating, general and administrative expenses
$
23,007

 
$
9,061

 
$
41,508

 
$
18,040

Depreciation and amortization expense
$
6,267

 
$
3,690

 
$
16,801

 
$
7,197

Earnings from equity method investment
$
12,291

 
$
3,451

 
$
23,371

 
$
6,904

Net income
$
15,130

 
$
9,134

 
$
31,289

 
$
21,128

Noncontrolling interests in consolidated subsidiary retained by SemGroup
$
4,082

 
$
—

 
$
7,758

 
$
—

Net income attributable to Rose Rock Midstream, L.P.
$
11,048

 
$
9,134

 
$
23,531

 
$
21,128