CONDENSED CONSOLIDATING GUARANTOR FINANCIAL STATEMENTS

Our SemGroup Notes are guaranteed by certain of our subsidiaries as follows: SemGas, L.P., SemMaterials, L.P., SemGroup Europe Holding, L.L.C., SemOperating G.P., L.L.C., SemMexico, L.L.C., SemDevelopment, L.L.C., Rose Rock Midstream Holdings, LLC and Mid-America Midstream Gas Services, L.L.C. (collectively, the "Guarantors").

Each of the Guarantors is 100% owned by SemGroup Corporation (the "Parent"). Such guarantees of the SemGroup Notes are full and unconditional and 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.

In June 2015, SemCanada, L.P. and SemCanada II, L.P. were released as Guarantors and no longer guarantee our SemGroup Notes. Prior period comparative information has been recast to reflect SemCanada, L.P. and SemCanada II, L.P. as non-guarantors.

Unaudited condensed consolidating financial statements for the Parent, the Guarantors and non-guarantors as of June 30, 2016 and December 31, 2015 and for the three months and six months ended June 30, 2016 and 2015 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 Wattenberg Holding, LLC and Glass Mountain to Rose Rock in the first quarter of 2015, 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



	June 30, 2016
	Parent		Guarantors			Non-guarantors		Consolidating Adjustments			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	187,987	$	—		$	68,614	$	(821	)	$	255,780
Restricted cash	—		—			31		—			31
Accounts receivable, net	641		12,596			375,431		—			388,668
Receivable from affiliates	4,897		802			9,467		(4,947		)	10,219
Inventories	—		(120		)	85,580		—			85,460
Other current assets	9,228		742			15,475		—			25,445
Total current assets	202,753		14,020			554,598		(5,768		)	765,603
Property, plant and equipment, net	4,915		532,702			1,111,345		—			1,648,962
Equity method investments	1,502,156		510,115			427,961		(1,993,294		)	446,938
Goodwill	—		—			34,698		—			34,698
Other intangible assets, net	18		140,083			16,516		—			156,617
Other noncurrent assets	38,780		778			4,598		—			44,156
Total assets	$	1,748,622	$	1,197,698		$	2,149,716	$	(1,999,062	)	$	3,096,974
LIABILITIES AND OWNERS’ EQUITY
Current liabilities:
Accounts payable	$	533	$	11,346		$	326,841	$	—		$	338,720
Payable to affiliates	53		21			13,903		(4,947		)	9,030
Accrued liabilities	9,392		11,511			63,796		4			84,703
Other current liabilities	364		—			11,146		—			11,510
Total current liabilities	10,342		22,878			415,686		(4,943		)	443,963
Long-term debt, net	295,875		6,640			790,988		(23,140		)	1,070,363
Deferred income taxes	135,985		—			47,791		—			183,776
Other noncurrent liabilities	2,175		—			21,369		—			23,544
Commitments and contingencies
Owners’ equity excluding noncontrolling interests in consolidated subsidiaries	1,304,245		1,168,180			802,799		(1,970,979		)	1,304,245
Noncontrolling interests in consolidated subsidiaries	—		—			71,083		—			71,083
Total owners’ equity	1,304,245		1,168,180			873,882		(1,970,979		)	1,375,328
Total liabilities and owners’ equity	$	1,748,622	$	1,197,698		$	2,149,716	$	(1,999,062	)	$	3,096,974



	December 31, 2015
	Parent		Guarantors			Non-guarantors		Consolidating Adjustments			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	4,559	$	—		$	55,101	$	(1,564	)	$	58,096
Restricted cash	—		—			32		—			32
Accounts receivable, net	640		20,015			306,058		—			326,713
Receivable from affiliates	1,616		1,119			6,141		(2,962		)	5,914
Inventories	—		(48		)	70,287		—			70,239
Other current assets	8,477		359			10,551		—			19,387
Total current assets	15,292		21,445			448,170		(4,526		)	480,381
Property, plant and equipment, net	4,335		536,628			1,025,858		—			1,566,821
Equity method investments	1,546,853		426,801			438,291		(1,860,867		)	551,078
Goodwill	—		13,052			34,980		—			48,032
Other intangible assets, net	20		144,183			18,020		—			162,223
Other noncurrent assets	39,358		881			5,135		—			45,374
Total assets	$	1,605,858	$	1,142,990		$	1,970,454	$	(1,865,393	)	$	2,853,909
LIABILITIES AND OWNERS’ EQUITY
Current liabilities:
Accounts payable	$	734	$	11,221		$	261,711	$	—		$	273,666
Payable to affiliates	78		155			7,762		(2,962		)	5,033
Accrued liabilities	5,551		10,957			68,534		5			85,047
Other current liabilities	569		—			12,712		—			13,281
Total current liabilities	6,932		22,333			350,719		(2,957		)	377,027
Long-term debt, net	325,460		7,340			748,856		(23,840		)	1,057,816
Deferred income taxes	155,411		—			45,542		—			200,953
Other noncurrent liabilities	2,528		—			19,229		—			21,757
Commitments and contingencies
Owners’ equity excluding noncontrolling interests in consolidated subsidiaries	1,115,527		1,113,317			725,279		(1,838,596		)	1,115,527
Noncontrolling interests in consolidated subsidiaries	—		—			80,829		—			80,829
Total owners’ equity	1,115,527		1,113,317			806,108		(1,838,596		)	1,196,356
Total liabilities and owners’ equity	$	1,605,858	$	1,142,990		$	1,970,454	$	(1,865,393	)	$	2,853,909

Condensed Consolidating Guarantor Statements of Operations



	Three Months Ended June 30, 2016
	Parent			Guarantors			Non-guarantors			Consolidating Adjustments			Consolidated
Revenues:
Product	$	—		$	39,849		$	172,798		$	(2,521	)	$	210,126
Service	—			10,872			51,328			—			62,200
Other	—			—			15,051			—			15,051
Total revenues	—			50,721			239,177			(2,521		)	287,377
Expenses:
Costs of products sold, exclusive of depreciation and amortization shown below	—			27,171			152,192			(2,521		)	176,842
Operating	—			9,192			45,515			—			54,707
General and administrative	4,782			2,379			13,614			—			20,775
Depreciation and amortization	393			9,146			15,509			—			25,048
Loss (gain) on disposal or impairment of long-lived assets, net	—			(1		)	1,686			—			1,685
Total expenses	5,175			47,887			228,516			(2,521		)	279,057
Earnings from equity method investments	6,557			9,034			17,077			(15,590		)	17,078
Operating income	1,382			11,868			27,738			(15,590		)	25,398
Other expenses (income), net:
Interest expense (income)	(936		)	8,333			11,714			(236		)	18,875
Foreign currency transaction loss	—			—			1,543			—			1,543
Gain on sale of equity method investment	(9,120		)	—			—			—			(9,120		)
Other income, net	(249		)	—			(478		)	236			(491		)
Total other expense (income), net	(10,305		)	8,333			12,779			—			10,807
Income from continuing operations before income taxes	11,687			3,535			14,959			(15,590		)	14,591
Income tax expense	3,679			—			979			—			4,658
Income from continuing operations	8,008			3,535			13,980			(15,590		)	9,933
Loss from discontinued operations, net of income taxes	—			(1		)	(1		)	—			(2		)
Net income	8,008			3,534			13,979			(15,590		)	9,931
Less: net income attributable to noncontrolling interests	—			—			1,922			—			1,922
Net income attributable to SemGroup	$	8,008		$	3,534		$	12,057		$	(15,590	)	$	8,009
Net income	$	8,008		$	3,534		$	13,979		$	(15,590	)	$	9,931
Other comprehensive income (loss), net of income taxes	18,480			485			(12,374		)	—			6,591
Comprehensive income	26,488			4,019			1,605			(15,590		)	16,522
Less: comprehensive income attributable to noncontrolling interests	—			—			1,922			—			1,922
Comprehensive income (loss) attributable to SemGroup	$	26,488		$	4,019		$	(317	)	$	(15,590	)	$	14,600



	Three Months Ended June 30, 2015
	Parent			Guarantors			Non-guarantors			Consolidating Adjustments			Consolidated
Revenues:
Product	$	—		$	50,293		$	244,886		$	(6,443	)	$	288,736
Service	—			15,743			50,861			—			66,604
Other	—			—			21,886			—			21,886
Total revenues	—			66,036			317,633			(6,443		)	377,226
Expenses:
Costs of products sold, exclusive of depreciation and amortization shown below	—			35,632			214,969			(6,443		)	244,158
Operating	—			8,822			51,978			—			60,800
General and administrative	4,626			2,642			15,649			—			22,917
Depreciation and amortization	329			7,255			17,090			—			24,674
Loss on disposal or impairment of long-lived assets, net	—			108			1,264			—			1,372
Total expenses	4,955			54,459			300,950			(6,443		)	353,921
Earnings from equity method investments	28,583			15,048			17,683			(37,411		)	23,903
Gain on issuance of common units by equity method investee	5,897			—			—			—			5,897
Operating income	29,525			26,625			34,366			(37,411		)	53,105
Other expenses (income), net:
Interest expense	781			6,160			10,614			(733		)	16,822
Foreign currency transaction gain	(5		)	—			(290		)	—			(295		)
Gain on sale of equity method investment	(6,623		)	—			—			—			(6,623		)
Other income, net	(778		)	—			(50		)	733			(95		)
Total other expense (income), net	(6,625		)	6,160			10,274			—			9,809
Income from continuing operations before income taxes	36,150			20,465			24,092			(37,411		)	43,296
Income tax expense	12,853			—			2,008			—			14,861
Income from continuing operations	23,297			20,465			22,084			(37,411		)	28,435
Loss from discontinued operations, net of income taxes	—			(1		)	(1		)	—			(2		)
Net income	23,297			20,464			22,083			(37,411		)	28,433
Less: net income attributable to noncontrolling interests	—			—			5,136			—			5,136
Net income attributable to SemGroup	$	23,297		$	20,464		$	16,947		$	(37,411	)	$	23,297
Net income	$	23,297		$	20,464		$	22,083		$	(37,411	)	$	28,433
Other comprehensive income (loss), net of income taxes	(2,346		)	—			7,866			—			5,520
Comprehensive income	20,951			20,464			29,949			(37,411		)	33,953
Less: comprehensive income attributable to noncontrolling interests	—			—			5,136			—			5,136
Comprehensive income attributable to SemGroup	$	20,951		$	20,464		$	24,813		$	(37,411	)	$	28,817



	Six Months Ended June 30, 2016
	Parent			Guarantors			Non-guarantors			Consolidating Adjustments			Consolidated
Revenues:
Product	$	—		$	73,247		$	379,042		$	(5,267	)	$	447,022
Service	—			23,740			102,533			—			126,273
Other	—			—			28,933			—			28,933
Total revenues	—			96,987			510,508			(5,267		)	602,228
Expenses:
Costs of products sold, exclusive of depreciation and amortization shown below	—			51,780			327,276			(5,267		)	373,789
Operating	—			16,885			88,014			—			104,899
General and administrative	10,654			4,625			26,556			—			41,835
Depreciation and amortization	773			18,020			30,302			—			49,095
Loss on disposal of long-lived assets, net	—			13,051			1,941			—			14,992
Total expenses	11,427			104,361			474,089			(5,267		)	584,610
Earnings from equity method investments	13,147			28,214			37,917			(39,129		)	40,149
Loss on issuance of common units by equity method investee	(41		)	—			—			—			(41		)
Operating income	1,679			20,840			74,336			(39,129		)	57,726
Other expenses (income), net:
Interest expense (income)	(1,513		)	16,336			23,460			(473		)	37,810
Foreign currency transaction loss	—			—			3,012			—			3,012
Loss on sale or impairment of equity method investment	30,644			—			—			—			30,644
Other income, net	(487		)	—			(664		)	473			(678		)
Total other expenses, net	28,644			16,336			25,808			—			70,788
Income (loss) from continuing operations before income taxes	(26,965		)	4,504			48,528			(39,129		)	(13,062		)
Income tax expense (benefit)	(19,706		)	—			2,957			—			(16,749		)
Income (loss) from continuing operations	(7,259		)	4,504			45,571			(39,129		)	3,687
Loss from discontinued operations, net of income taxes	—			(3		)	(1		)	—			(4		)
Net income (loss)	(7,259		)	4,501			45,570			(39,129		)	3,683
Less: net income attributable to noncontrolling interests	—			—			10,942			—			10,942
Net income (loss) attributable to SemGroup	$	(7,259	)	$	4,501		$	34,628		$	(39,129	)	$	(7,259	)
Net income (loss)	$	(7,259	)	$	4,501		$	45,570		$	(39,129	)	$	3,683
Other comprehensive income (loss), net of income taxes	(1,986		)	701			3,767			—			2,482
Comprehensive income (loss)	(9,245		)	5,202			49,337			(39,129		)	6,165
Less: comprehensive income attributable to noncontrolling interests	—			—			10,942			—			10,942
Comprehensive income (loss) attributable to SemGroup	$	(9,245	)	$	5,202		$	38,395		$	(39,129	)	$	(4,777	)



	Six Months Ended June 30, 2015
	Parent			Guarantors			Non-guarantors			Consolidating Adjustments			Consolidated
Revenues:
Product	$	—		$	101,346		$	419,938		$	(12,417	)	$	508,867
Service	—			30,202			98,279			—			128,481
Other	—			—			38,188			—			38,188
Total revenues	—			131,548			556,405			(12,417		)	675,536
Expenses:
Costs of products sold, exclusive of depreciation and amortization shown below	—			76,300			372,347			(12,417		)	436,230
Operating	—			16,936			96,954			—			113,890
General and administrative	22,228			4,706			28,293			—			55,227
Depreciation and amortization	623			14,288			33,497			—			48,408
Loss on disposal of long-lived assets, net	—			107			2,323			—			2,430
Total expenses	22,851			112,337			533,414			(12,417		)	656,185
Earnings from equity method investments	43,388			27,576			38,547			(65,049		)	44,462
Gain on issuance of common units by equity method investee	5,897			—			—			—			5,897
Operating income	26,434			46,787			61,538			(65,049		)	69,710
Other expenses (income), net:
Interest expense	2,203			11,651			19,058			(1,499		)	31,413
Foreign currency transaction gain	(5		)	—			(809		)	—			(814		)
Gain on sale of equity method investment	(14,517		)	—			—			—			(14,517		)
Other income, net	(1,570		)	—			(115		)	1,499			(186		)
Total other expenses (income), net	(13,889		)	11,651			18,134			—			15,896
Income from continuing operations before income taxes	40,323			35,136			43,404			(65,049		)	53,814
Income tax expense	15,560			—			4,043			—			19,603
Income from continuing operations	24,763			35,136			39,361			(65,049		)	34,211
Loss from discontinued operations, net of income taxes	—			(1		)	(1		)	—			(2		)
Net income	24,763			35,135			39,360			(65,049		)	34,209
Less: net income attributable to noncontrolling interests	—			—			9,446			—			9,446
Net income attributable to SemGroup	$	24,763		$	35,135		$	29,914		$	(65,049	)	$	24,763
Net income	24,763			35,135			39,360			(65,049		)	34,209
Other comprehensive income (loss), net of income taxes	6,300			—			(9,840		)	—			(3,540		)
Comprehensive income	31,063			35,135			29,520			(65,049		)	30,669
Less: comprehensive income attributable to noncontrolling interests	—			—			9,446			—			9,446
Comprehensive income attributable to SemGroup	$	31,063		$	35,135		$	20,074		$	(65,049	)	$	21,223

Condensed Consolidating Guarantor Statements of Cash Flows



	Six Months Ended June 30, 2016
	Parent			Guarantors			Non-guarantors			Consolidating Adjustments			Consolidated
Net cash provided by operating activities	$	25,427		$	17,351		$	56,585		$	(25,448	)	$	73,915
Cash flows from investing activities:
Capital expenditures	(1,350		)	(11,211		)	(114,151		)	—			(126,712		)
Proceeds from sale of long-lived assets	—			—			114			—			114
Contributions to equity method investments	—			—			(3,448		)	—			(3,448		)
Proceeds from sale of common units of equity method investee	60,483			—			—			—			60,483
Distributions in excess of equity in earnings of affiliates	13,767			—			13,778			(13,767		)	13,778
Net cash provided by (used in) investing activities	72,900			(11,211		)	(103,707		)	(13,767		)	(55,785		)
Cash flows from financing activities:
Borrowings on credit facilities	118,000			—			165,500			—			283,500
Principal payments on credit facilities and other obligations	(148,367		)	—			(124,514		)	—			(272,881		)
Proceeds from issuance of common units, net of offering costs	228,546			—			—			—			228,546
Distributions to noncontrolling interests	—			—			(21,485		)	—			(21,485		)
Repurchase of common stock for payment of statutory taxes due on equity-based compensation	(904		)	—			—			—			(904		)
Dividends paid	(39,720		)	—			—			—			(39,720		)
Proceeds from issuance of common stock under employee stock purchase plan	555			—			—			—			555
Intercompany borrowings (advances), net	(73,009		)	(6,140		)	39,191			39,958			—
Net cash provided by (used in) financing activities	85,101			(6,140		)	58,692			39,958			177,611
Effect of exchange rate changes on cash and cash equivalents	—			—			1,943			—			1,943
Change in cash and cash equivalents	183,428			—			13,513			743			197,684
Cash and cash equivalents at beginning of period	4,559			—			55,101			(1,564		)	58,096
Cash and cash equivalents at end of period	$	187,987		$	—		$	68,614		$	(821	)	$	255,780



	Six Months Ended June 30, 2015
	Parent			Guarantors			Non-guarantors			Consolidating Adjustments			Consolidated
Net cash provided by operating activities	$	19,092		$	18,222		$	55,462		$	(19,819	)	$	72,957
Cash flows from investing activities:
Capital expenditures	(1,105		)	(73,195		)	(162,656		)	—			(236,956		)
Proceeds from sale of long-lived assets	—			20			210			—			230
Proceeds from the sale of Wattenberg Holding, LLC and Glass Mountain Holding, LLC to Rose Rock Midstream L.P.	251,181			—			—			(251,181		)	—
Contributions to equity method investments	—			—			(23,461		)	—			(23,461		)
Proceeds from sale of common units of equity method investee	56,318			—			—			—			56,318
Distributions in excess of equity in earnings of affiliates	11,676			—			13,077			(11,676		)	13,077
Net cash provided by (used in) investing activities	318,070			(73,175		)	(172,830		)	(262,857		)	(190,792		)
Cash flows from financing activities:
Debt issuance costs	(601		)	—			(5,688		)	—			(6,289		)
Borrowings on credit facilities and issuance of senior secured notes, net of discount	126,000			—			676,208			—			802,208
Principal payments on credit facilities and other obligations	(161,000		)	—			(364,024		)	—			(525,024		)
Proceeds from issuance of Rose Rock Midstream, L.P. common units, net of offering costs	—			—			89,119			—			89,119
Distributions to noncontrolling interests	—			—			(19,261		)	—			(19,261		)
Repurchase of common stock for payment of statutory taxes due on equity-based compensation	(4,254		)	—			—			—			(4,254		)
Dividends paid	(31,478		)	—			—			—			(31,478		)
Proceeds from issuance of common stock under employee stock purchase plan	609			—			—			—			609
Intercompany borrowing (advances), net	(157,632		)	54,953			(181,841		)	284,520			—
Net cash provided by (used in) financing activities	(228,356		)	54,953			194,513			284,520			305,630
Effect of exchange rate changes on cash and cash equivalents	—			—			390			—			390
Change in cash and cash equivalents	108,806			—			77,535			1,844			188,185
Cash and cash equivalents at beginning of period	9,254			—			35,445			(4,101		)	40,598
Cash and cash equivalents at end of period	$	118,060		$	—		$	112,980		$	(2,257	)	$	228,783