CONDENSED CONSOLIDATING GUARANTOR FINANCIAL STATEMENTS

Our senior unsecured notes are guaranteed by certain of our subsidiaries as follows: Rose Rock Finance Corporation, Rose Rock Midstream Operating, LLC, Rose Rock Midstream Energy GP, LLC, Rose Rock Midstream Crude, L.P., Rose Rock Midstream Field Services, LLC, 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., Mid-America Midstream Gas Services, L.L.C., SemCrude Pipeline, L.L.C., Wattenberg Holding, LLC and Glass Mountain Holding, LLC (collectively, the "Guarantors").

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. 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. Distributions of cash flows from HFOTCO, a non-guarantor, are restricted by the existing indebtedness of HFOTCO. 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.

Condensed consolidating financial statements for the Parent, the Guarantors and non-guarantors as of December 31, 2017 and 2016 and for the years ended December 31, 2017, 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 have been reflected as cash flows from investing activities. These balances are eliminated through consolidating adjustments below.

Condensed Consolidating Guarantor Balance Sheets



	December 31, 2017
	Parent			Guarantors		Non-guarantors		Consolidating Adjustments			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	32,457		$	—	$	69,872	$	(8,630	)	$	93,699
Accounts receivable	(9		)	562,967		90,526		—			653,484
Receivable from affiliates	58			1,421		212		—			1,691
Current assets held for sale	—			—		38,063		—			38,063
Inventories	—			101,665		—		—			101,665
Other current assets	6,671			4,493		3,133		—			14,297
Total current assets	39,177			670,546		201,806		(8,630		)	902,899
Property, plant and equipment	8,086			1,002,982		2,304,063		—			3,315,131
Equity method investments	3,085,274			964,930		—		(3,764,923		)	285,281
Goodwill	—			—		257,302		—			257,302
Other intangible assets	10			127,783		270,850		—			398,643
Other noncurrent assets, net	45,587			3,097		83,916		—			132,600
Noncurrent assets held for sale	—			—		84,961		—			84,961
Total assets	$	3,178,134		$	2,769,338	$	3,202,898	$	(3,773,553	)	$	5,376,817
LIABILITIES AND OWNERS’ EQUITY
Current liabilities:
Accounts payable	$	646		$	533,651	$	53,601	$	—		$	587,898
Payable to affiliates	10			6,961		—		—			6,971
Accrued liabilities	38,747			26,275		66,387		(2		)	131,407
Current liabilities held for sale	—			—		23,847		—			23,847
Other current liabilities	1,922			5,532		8,984		—			16,438
Total current liabilities	41,325			572,419		152,819		(2		)	766,561
Long-term debt	1,474,491			6,690		1,395,104		(23,190		)	2,853,095
Deferred income taxes	1,892			—		44,693		—			46,585
Other noncurrent liabilities	2,061			—		36,434		—			38,495
Noncurrent liabilities held for sale	—			—		13,716		—			13,716
Commitments and contingencies
Total owners’ equity	1,658,365			2,190,229		1,560,132		(3,750,361		)	1,658,365
Total liabilities and owners’ equity	$	3,178,134		$	2,769,338	$	3,202,898	$	(3,773,553	)	$	5,376,817



	December 31, 2016
	Parent		Guarantors		Non-guarantors		Consolidating Adjustments			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	19,002	$	—	$	59,796	$	(4,582	)	$	74,216
Accounts receivable	—		361,160		57,179		—			418,339
Receivable from affiliates	27		25,244		184		—			25,455
Inventories	—		89,638		9,596		—			99,234
Other current assets	8,986		5,760		3,887		(3		)	18,630
Total current assets	28,015		481,802		130,642		(4,585		)	635,874
Property, plant and equipment	5,621		970,079		786,372		—			1,762,072
Equity method investments	2,454,118		940,696		—		(2,960,525		)	434,289
Goodwill	—		26,628		7,602		—			34,230
Other intangible assets	15		149,669		1,294		—			150,978
Other noncurrent assets, net	54,155		2,080		1,294		—			57,529
Total assets	$	2,541,924	$	2,570,954	$	927,204	$	(2,965,110	)	$	3,074,972
LIABILITIES AND OWNERS’ EQUITY
Current liabilities:
Accounts payable	$	674	$	348,297	$	18,336	$	—		$	367,307
Payable to affiliates	—		26,508		—		—			26,508
Accrued liabilities	25,078		23,423		32,603		—			81,104
Other current liabilities	889		5,108		7,439		—			13,436
Total current liabilities	26,641		403,336		58,378		—			488,355
Long-term debt	1,050,893		6,142		16,500		(22,617		)	1,050,918
Deferred income taxes	16,119		—		48,382		—			64,501
Other noncurrent liabilities	2,306		—		22,927		—			25,233
Commitments and contingencies
Total owners’ equity	1,445,965		2,161,476		781,017		(2,942,493		)	1,445,965
Total liabilities and owners’ equity	$	2,541,924	$	2,570,954	$	927,204	$	(2,965,110	)	$	3,074,972

Condensed Consolidating Guarantor Statements of Operations



	Year Ended December 31, 2017
	Parent			Guarantors			Non-guarantors			Consolidating Adjustments			Consolidated
Revenues:
Product	$	—		$	1,468,754		$	153,164		$	—		$	1,621,918
Service	—			149,197			242,069			—			391,266
Lease	—			—			5,843			—			5,843
Other	—			—			62,890			—			62,890
Total revenues	—			1,617,951			463,966			—			2,081,917
Expenses:
Costs of products sold, exclusive of depreciation and amortization shown below	—			1,383,868			131,023			—			1,514,891
Operating	—			113,503			141,261			—			254,764
General and administrative	42,422			26,143			41,808			—			110,373
Depreciation and amortization	2,294			70,053			86,074			—			158,421
Loss (gain) on disposal or impairment, net	—			(79,585		)	92,918			—			13,333
Total expenses	44,716			1,513,982			493,084			—			2,051,782
Earnings from equity method investments	68,964			(11,564		)	—			9,931			67,331
Operating income (loss)	24,248			92,405			(29,118		)	9,931			97,466
Other expenses (income):
Interest expense	40,053			38,791			25,019			(854		)	103,009
Loss on early extinguishment of debt	19,930			—			—			—			19,930
Foreign currency transaction gain	(2,764		)	—			(1,945		)	—			(4,709		)
Other income, net	(913		)	(33		)	(1,134		)	854			(1,226		)
Total other expenses, net	56,306			38,758			21,940			—			117,004
Income (loss) from continuing operations before income taxes	(32,058		)	53,647			(51,058		)	9,931			(19,538		)
Income tax expense (benefit)	(14,908		)	—			12,520			—			(2,388		)
Income (loss) from continuing operations	(17,150		)	53,647			(63,578		)	9,931			(17,150		)
Net income (loss)	$	(17,150	)	$	53,647		$	(63,578	)	$	9,931		$	(17,150	)
Net income (loss)	$	(17,150	)	$	53,647		$	(63,578	)	$	9,931		$	(17,150	)
Other comprehensive income (loss), net of income taxes	(11,987		)	(573		)	32,673			—			20,113
Comprehensive income (loss)	$	(29,137	)	$	53,074		$	(30,905	)	$	9,931		$	2,963



	Year Ended December 31, 2016
	Parent			Guarantors		Non-guarantors			Consolidating Adjustments			Consolidated
Revenues:
Product	$	—		$	872,961	$	136,448		$	—		$	1,009,409
Service	—			162,460		102,570			—			265,030
Other	—			—		57,725			—			57,725
Total revenues	—			1,035,421		296,743			—			1,332,164
Expenses:
Costs of products sold, exclusive of depreciation and amortization shown below	—			761,971		111,460			—			873,431
Operating	—			115,431		96,668			—			212,099
General and administrative	22,349			31,196		30,363			—			83,908
Depreciation and amortization	1,647			68,669		28,488			—			98,804
Loss (gain) on disposal or impairment, net	—			16,115		(67		)	—			16,048
Total expenses	23,996			993,382		266,912			—			1,284,290
Earnings from equity method investments	56,815			81,366		—			(64,424		)	73,757
Loss on issuance of common units by equity method investee	(41		)	—		—			—			(41		)
Operating income	32,778			123,405		29,831			(64,424		)	121,590
Other expenses (income):
Interest expense (income)	(4,002		)	72,277		(4,819		)	(806		)	62,650
Foreign currency transaction loss	—			—		4,759			—			4,759
Loss on sale or impairment of non-operated equity method investment, net	30,644			—		—			—			30,644
Other expenses (income), net	(339		)	63		(1,524		)	806			(994		)
Total other expenses (income), net	26,303			72,340		(1,584		)	—			97,059
Income from continuing operations before income taxes	6,475			51,065		31,415			(64,424		)	24,531
Income tax expense	4,380			—		6,888			—			11,268
Income from continuing operations	2,095			51,065		24,527			(64,424		)	13,263
Loss from discontinued operations, net of income taxes	—			—		(1		)	—			(1		)
Net income	2,095			51,065		24,526			(64,424		)	13,262
Less: net income attributable to noncontrolling interests	—			11,167		—			—			11,167
Net income attributable to SemGroup	$	2,095		$	39,898	$	24,526		$	(64,424	)	$	2,095
Net income	$	2,095		$	51,065	$	24,526		$	(64,424	)	$	13,262
Other comprehensive income (loss), net of income taxes	7,360			1,223		(23,935		)	—			(15,352		)
Comprehensive income (loss)	9,455			52,288		591			(64,424		)	(2,090		)
Less: comprehensive income attributable to noncontrolling interests	—			11,167		—			—			11,167
Comprehensive income (loss) attributable to SemGroup	$	9,455		$	41,121	$	591		$	(64,424	)	$	(13,257	)



	Year Ended December 31, 2015
	Parent			Guarantors			Non-guarantors			Consolidating Adjustments			Consolidated
Revenues:
Product	$	—		$	900,303		$	218,583		$	—		$	1,118,886
Service	—			188,429			71,113			—			259,542
Other	—			—			76,666			—			76,666
Total revenues	—			1,088,732			366,362			—			1,455,094
Expenses:
Costs of products sold, exclusive of depreciation and amortization shown below	—			808,776			170,773			—			979,549
Operating	—			117,541			106,902			—			224,443
General and administrative	29,914			31,021			36,431			—			97,366
Depreciation and amortization	1,522			73,393			25,967			—			100,882
Loss on disposal or impairment, net	—			10,399			1,073			—			11,472
Total expenses	31,436			1,041,130			341,146			—			1,413,712
Earnings from equity method investments	65,512			86,518			—			(70,644		)	81,386
Gain on issuance of common units by equity method investee	6,385			—			—			—			6,385
Operating income	40,461			134,120			25,216			(70,644		)	129,153
Other expenses (income):
Interest expense (income)	2,230			69,664			(262		)	(1,957		)	69,675
Foreign currency transaction gain	(5		)	—			(1,062		)	—			(1,067		)
Gain on sale of non-operated equity method investment	(14,517		)	—			—			—			(14,517		)
Other income, net	(2,048		)	(38		)	(1,155		)	1,957			(1,284		)
Total other expenses (income), net	(14,340		)	69,626			(2,479		)	—			52,807
Income from continuing operations before income taxes	54,801			64,494			27,695			(70,644		)	76,346
Income tax expense	24,482			—			9,048			—			33,530
Income from continuing operations	30,319			64,494			18,647			(70,644		)	42,816
Loss from discontinued operations, net of income taxes	—			(3		)	(1		)	—			(4		)
Net income	30,319			64,491			18,646			(70,644		)	42,812
Less: net income attributable to noncontrolling interests	—			12,492			—			—			12,492
Net income attributable to SemGroup	$	30,319		$	51,999		$	18,646		$	(70,644	)	$	30,320
Net income	$	30,319		$	64,491		$	18,646		$	(70,644	)	$	42,812
Other comprehensive income (loss), net of income taxes	17,420			430			(49,271		)	—			(31,421		)
Comprehensive income (loss)	47,739			64,921			(30,625		)	(70,644		)	11,391
Less: comprehensive income attributable to noncontrolling interests	—			12,492			—			—			12,492
Comprehensive income (loss) attributable to SemGroup	$	47,739		$	52,429		$	(30,625	)	$	(70,644	)	$	(1,101	)

Condensed Consolidating Guarantor Statements of Cash Flows



	Year Ended December 31, 2017
	Parent			Guarantors			Non-guarantors			Consolidating Adjustments			Consolidated
Net cash provided by (used in) operating activities	$	(46,556	)	$	98,857		$	88,175		$	—		$	140,476
Cash flows from investing activities:
Capital expenditures	(4,554		)	(135,999		)	(322,160		)	—			(462,713		)
Proceeds from sale of equity method investment and other long-lived assets	—			312,492			2,329			—			314,821
Contributions to equity method investments	—			(26,444		)	—			—			(26,444		)
Payments to acquire business, net of cash acquired	—			—			(294,239		)	—			(294,239		)
Distributions from equity method investees in excess of equity in earnings	—			28,774			—			—			28,774
Net cash provided by (used in) investing activities	(4,554		)	178,823			(614,070		)	—			(439,801		)
Cash flows from financing activities:
Debt issuance costs	(11,116		)	—			—			—			(11,116		)
Borrowings on credit facilities and issuance of senior unsecured notes	1,470,377			—			55,000			—			1,525,377
Principal payments on credit facilities and other obligations	(1,049,652		)	(26		)	(2,750		)	—			(1,052,428		)
Debt extinguishment costs	(16,293		)	—			—			—			(16,293		)
Repurchase of common stock for payment of statutory taxes due on equity-based compensation	(1,473		)	—			—			—			(1,473		)
Dividends paid	(129,925		)	—			—			—			(129,925		)
Proceeds from issuance of common stock under employee stock purchase plan	1,114			—			—			—			1,114
Intercompany borrowings (advances), net	(198,467		)	(277,654		)	480,169			(4,048		)	—
Net cash provided by (used in) financing activities	64,565			(277,680		)	532,419			(4,048		)	315,256
Effect of exchange rate changes on cash and cash equivalents	—			—			3,552			—			3,552
Change in cash and cash equivalents	13,455			—			10,076			(4,048		)	19,483
Cash and cash equivalents at beginning of period	19,002			—			59,796			(4,582		)	74,216
Cash and cash equivalents at end of period	$	32,457		$	—		$	69,872		$	(8,630	)	$	93,699



	Year Ended December 31, 2016
	Parent			Guarantors			Non-guarantors			Consolidating Adjustments			Consolidated
Net cash provided by operating activities	$	84,460		$	79,054		$	65,282		$	(58,822	)	$	169,974
Cash flows from investing activities:
Capital expenditures	(2,928		)	(56,102		)	(253,426		)	—			(312,456		)
Proceeds from sale of long-lived assets	—			53			98			—			151
Contributions to equity method investments	—			(4,188		)	—			—			(4,188		)
Proceeds from sale of common units of equity method investee	60,483			—			—			—			60,483
Distributions from equity method investments in excess of equity in earnings	—			27,726			—			—			27,726
Net cash provided by (used in) investing activities	57,555			(32,511		)	(253,328		)	—			(228,284		)
Cash flows from financing activities:
Debt issuance costs	(7,728		)	—			—			—			(7,728		)
Borrowings on credit facilities and issuance of senior unsecured notes	382,500			—			—			—			382,500
Principal payments on debt and other obligations	(396,859		)	(31		)	—			—			(396,890		)
Proceeds from issuance of common shares, net of offering costs	223,025			—			—			—			223,025
Distributions to noncontrolling interests	—			(32,133		)	—			—			(32,133		)
Repurchase of common stock	(965		)	—			—			—			(965		)
Dividends paid	(92,910		)	—			—			—			(92,910		)
Proceeds from issuance of common stock under employee stock purchase plan	1,010			—			—			—			1,010
Intercompany borrowings (advances), net	(235,645		)	(23,437		)	203,278			55,804			—
Net cash provided by (used in) financing activities	(127,572		)	(55,601		)	203,278			55,804			75,909
Effect of exchange rate changes on cash and cash equivalents	—			—			(1,479		)	—			(1,479		)
Change in cash and cash equivalents	14,443			(9,058		)	13,753			(3,018		)	16,120
Cash and cash equivalents at beginning of period	4,559			9,058			46,043			(1,564		)	58,096
Cash and cash equivalents at end of period	$	19,002		$	—		$	59,796		$	(4,582	)	$	74,216



	Year Ended December 31, 2015
	Parent			Guarantors			Non-guarantors			Consolidating Adjustments			Consolidated
Net cash provided by operating activities	$	37,259		$	122,838		$	58,845		$	(37,180	)	$	181,762
Cash flows from investing activities:
Capital expenditures	(1,740		)	(197,074		)	(280,716		)	—			(479,530		)
Proceeds from sale of long-lived assets	—			257			3,431			—			3,688
Contributions to equity method investments	—			(46,730		)	—			—			(46,730		)
Proceeds from the sale of interest in SemCrude Pipeline, L.L.C. to Rose Rock Midstream, L.P.	251,181			—			—			(251,181		)	—
Proceeds from sale of common units of equity method investee	56,318			—			—			—			56,318
Distributions from equity method investments in excess of equity in earnings	35,340			24,113			—			(35,340		)	24,113
Net cash provided by (used in) investing activities	341,099			(219,434		)	(277,285		)	(286,521		)	(442,141		)
Cash flows from financing activities:
Debt issuance costs	(601		)	(5,688		)	—			—			(6,289		)
Borrowings on credit facilities and issuance of senior unsecured notes	181,000			686,208			—			—			867,208
Principal payments on credit facilities and other obligations	(186,000		)	(374,049		)	—			—			(560,049		)
Distributions to noncontrolling interests	—			(40,410		)	—			—			(40,410		)
Proceeds from issuance of common units, net of offering costs	—			89,119			—			—			89,119
Repurchase of common stock	(4,261		)	—			—			—			(4,261		)
Dividends paid	(69,514		)	—			—			—			(69,514		)
Proceeds from issuance of common stock under employee stock purchase plan	1,223			—			—			—			1,223
Intercompany borrowings (advances), net	(304,900		)	(253,150		)	231,812			326,238			—
Net cash provided by (used in) financing activities	(383,053		)	102,030			231,812			326,238			277,027
Effect of exchange rate changes on cash and cash equivalents	—			—			850			—			850
Change in cash and cash equivalents	(4,695		)	5,434			14,222			2,537			17,498
Cash and cash equivalents at beginning of period	9,254			3,624			31,821			(4,101		)	40,598
Cash and cash equivalents at end of period	$	4,559		$	9,058		$	46,043		$	(1,564	)	$	58,096