- SemGroup reported third quarter 2016 results with Adjusted EBITDA of $71.3 million, down from $77.7 million in the first quarter of 2016. Net income was a loss of $7.4 million.
- For full year 2016, SemGroup updated capital expenditures guidance to $350 million, a $100 million reduction due to timing of the Maurepas pipeline project.
- SemGroup has a strong balance sheet with $1.1 billion in liquidity and a leverage ratio of 3.0x at the end of the third quarter, within its target leverage of below 4.5x.
2. 2
Non-GAAP Financial Measures
SemGroup’s non-GAAP measure, Adjusted EBITDA, is not a GAAP measure and is not intended to be used in lieu of GAAP presentation of net income (loss),
which is the most closely associated GAAP measure. Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization, adjusted for
selected items that SemGroup believes impact the comparability of financial results between reporting periods. In addition to non-cash items, we have selected
items for adjustment to EBITDA which management feels decrease the comparability of our results among periods. These items are identified as those which are
generally outside of the results of day to day operations of the business. These items are not considered non-recurring, infrequent or unusual, but do erode
comparability among periods in which they occur with periods in which they do not occur or occur to a greater or lesser degree. Historically, we have selected
items such as gains on the sale of NGL units, costs related to our predecessor’s bankruptcy, significant business development related costs, significant legal
settlements, severance and other similar costs. Management believes these types of items can make comparability of the results of day to day operations among
periods difficult and have chosen to remove these items from our Adjusted EBITDA. We expect to adjust for similar types of items in the future. Although we
present selected items that we consider in evaluating our performance, you should be aware that the items presented do not represent all items that affect
comparability between the periods presented. Variations in our operating results are also caused by changes in volumes, prices, mechanical interruptions and
numerous other factors. We do not adjust for these types of variances.
This measure may be used periodically by management when discussing our financial results with investors and analysts and is presented as management
believes it provides additional information and metrics relative to the performance of our businesses. This non-GAAP financial measure has important limitations
as an analytical tool because it excludes some, but not all, items that affect the most directly comparable GAAP financial measures. You should not consider non-
GAAP measures in isolation or as substitutes for analysis of our results as reported under GAAP. Management compensates for the limitations of our non-GAAP
measures as analytical tools by reviewing the comparable GAAP measures, understanding the differences between the non-GAAP measure and the most
comparable GAAP measure and incorporating this knowledge into its decision-making processes. We believe that investors benefit from having access to the
same financial measures that our management uses in evaluating our operating results. Because all companies do not use identical calculations, our
presentations of non-GAAP measures may be different from similarly titled measures of other companies, thereby diminishing their utility.
3. 3
Forward-looking Information
Certain matters contained in this presentation include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. We make these forward-looking statements in reliance on the safe harbor protections
provided under the Private Securities Litigation Reform Act of 1995.
All statements, other than statements of historical fact, included in this presentation including the prospects of our industry, our anticipated financial performance,
our anticipated annual dividend growth rate, management's plans and objectives for future operations, planned capital expenditures, business prospects, outcome
of regulatory proceedings, market conditions and other matters, may constitute forward-looking statements. Although we believe that the expectations reflected in
these forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct. These forward-looking statements are
subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in
these forward-looking statements. Factors that might cause actual results to differ include, but are not limited to, the failure to realize the anticipated benefits of the
transaction, consummated on September 30, 2016, pursuant to which we acquired all of the outstanding common units of our subsidiary, Rose Rock Midstream,
L.P., not already owned by us; our ability to generate sufficient cash flow from operations to enable us to pay our debt obligations and our current and expected
dividends or to fund our other liquidity needs; any sustained reduction in demand for, or supply of, the petroleum products we gather, transport, process, market and
store; the effect of our debt level on our future financial and operating flexibility, including our ability to obtain additional capital on terms that are favorable to us; our
ability to access the debt and equity markets, which will depend on general market conditions and the credit ratings for our debt obligations and equity; the loss of,
or a material nonpayment or nonperformance by, any of our key customers; the amount of cash distributions, capital requirements and performance of our
investments and joint ventures; the amount of collateral required to be posted from time to time in our commodity purchase, sale or derivative transactions; the
impact of operational and developmental hazards and unforeseen interruptions; our ability to obtain new sources of supply of petroleum products; competition from
other midstream energy companies; our ability to comply with the covenants contained in our credit agreement and the indentures governing our senior notes,
including requirements under our credit agreement to maintain certain financial ratios; our ability to renew or replace expiring storage, transportation and related
contracts; the overall forward markets for crude oil, natural gas and natural gas liquids; the possibility that the construction or acquisition of new assets may not
result in the corresponding anticipated revenue increases; changes in currency exchange rates; weather and other natural phenomena, including climate conditions;
a cyber attack involving our information systems and related infrastructure, or that of our business associates; the risks and uncertainties of doing business outside
of the U.S., including political and economic instability and changes in local governmental laws, regulations and policies; costs of, or changes in, laws and
regulations and our failure to comply with new or existing laws or regulations, particularly with regard to taxes, safety and protection of the environment; the
possibility that our hedging activities may result in losses or may have a negative impact on our financial results; general economic, market and business conditions;
as well as other risk factors discussed from time to time in our each of our documents and reports filed with the SEC.
Readers are cautioned not to place undue reliance on any forward-looking statements contained in this presentation which reflect management's opinions only as of
the date hereof. Except as required by law, we undertake no obligation to revise or publicly release the results of any revision to any forward-looking statements.
We use our Investor Relations website and social media outlets as channels of distribution of material company information. Such information is routinely posted
and accessible on our Investor Relations website at ir.semgroupcorp.com.
We are present on Twitter and LinkedIn, follow us at the links below:
SemGroup Twitter and LinkedIn
4. 4
$400
$300
$200
$100
$0
2014 2015 2016E
SEMG Adjusted EBITDA
(in millions)
Third Quarter 2016 Results
$305
$287
$270 - $320
3Q 2016 2Q 2016 1Q 2016
Net Income $(7.4) million $8.0 million $(15.3) million
Adjusted EBITDA(1) $71.3 million $67.6 million $77.7 million
Dividend per share $0.45 $0.45 $0.45
(1) Non-GAAP Financial Data Reconciliations are included in the Appendix to this presentation
Maurepas Pipeline Construction - October 2016
5. 5
2016 Capital Expenditures Updated Guidance
2016 Capital Expenditures – $350 million
~$100 million reduction due to timing of Maurepas Pipeline
n Maurepas Pipeline
n Crude
n Natural Gas
n Other Growth Projects
n Maintenance
$220
13% 63%
1% 16%
$45
$5 $55 ¬ Key Committed Projects
- Crude Projects
• Maurepas Pipeline (expected completion 2Q 2017): $220 million
• Isabel Pipeline (completed 1Q 2016): $9 million
- Natural Gas Projects
• Northern OK well connects & compression: $15 million
• KA Plant Projects: $18 million
• Wapiti Pipeline Expansion (completed 3Q 2016): $9 million
¬ Focus on completing projects & maintain existing assets
¬ Prudent organic capital investments at attractive returns
$25
7%
(in millions)
6. 6
Wapiti Sour Gas Plant in the Liquids-Rich Montney Play
SemCAMS uniquely advantaged, leading the way with sour gas solution in the Wapiti
• New 200 mmcf/d sour gas processing Wapiti plant will be integrated with our
existing infrastructure to optimize & leverage current operations on the Wapiti
Pipeline System and K3 plant located in the Kaybob region
◦ Supported by a 120 mmcf/d, 15 year contract with NuVista
◦ Total project cost ~ $225 - $250 million
◦ Plant completion estimated mid-2019
Active Wapiti Producers
Birchcliff Orlens
Blackbird Paramount
Encana RMP-Chinook
Grafton/Riverstone Seven Generations
Inception Shell
NuVista Sinopec Daylight
7. 7
Third Quarter 2016 Results
(1) Non-GAAP Financial Data Reconciliations are included in the Appendix to this presentation
Segment Adjusted EBITDA
(in millions, unaudited) 3Q 2016 2Q 2016 1Q 2016
Crude - Transportation $27.8 $27.1 $32.0
Crude - Facilities 9.7 9.4 9.6
Crude - Supply and Logistics 3.1 10.1 9.3
SemGas 16.3 12.5 12.4
SemCAMS 13.2 9.3 10.3
SemLogistics 3.4 2.2 2.8
SemMaterials Mexico 2.9 2.6 2.6
Corporate and Other (5.1) (5.6) (1.3)
SemGroup $71.3 $67.6 $77.7
As Reported (in millions, excluding EPS, unaudited) 3Q 2016 2Q 2016 1Q 2016
Net income attributable to SemGroup $ (7.4) $ 8.0 $ (15.3)
Net income per share - diluted $ (0.14) $ 0.18 $ (0.35)
EBITDA(1) $ 50.7 $ 58.5 $ 15.3
Selected Non-Cash Items and Other Items Impacting Comparability(1) $ 20.6 $ 9.1 $ 62.4
Adjusted EBITDA(1) $ 71.3 $ 67.6 $ 77.7
8. 8
Leverage & Liquidity
(in millions, unaudited) September 30, 2016
$1 billion revolver - 2021 $0.0
7.500% Senior unsecured notes - 2021 $300.0
5.625% Senior unsecured notes - 2022 400.0
5.625% Senior unsecured notes - 2023 350.0
Total consolidated debt $1,050.0
Compliance leverage ratio(1) 3.0x
Target leverage <4.5x
Liquidity:
Cash and cash equivalents(2) $140.0
Revolver availability(3) 962.5
Total liquidity $1,102.5
(1) Calculated per revolving credit agreement definitions, which includes material project adjustments; maximum total leverage covenant of 5.5x
(2) Cash excludes SemMaterials Mexico
(3) Revolver availability excludes outstanding letters of credit
9. 9
A Look Ahead
Strong Balance
Sheet
High Return Growth
Projects & Strategic
Acquisitions
Focus on Portfolio
Balance and Secure
Cash Flows
Dividend Growth
Beyond 2016
11. 11
88% of total LTM gross margin from fixed fee based cash flows
37% of total LTM gross margin secured by take or pay contracts
More than 70% of SemGroup's revenue is derived from
investment grade counterparties
Stable Cash Flows(1)
Counterparty Strength(1)(2)
SemGroup derives a significant portion of its margin from fixed-fee contracted arrangements
with strong counterparties; SemGroup is well-positioned to drive future growth
(1) LTM September 30, 2016
(2) Counterparty ratings LTM September 30, 2016; excludes SemLogistics and SemMaterials Mexico
Company Strengths
Take or Pay Fixed Fee POP/Marketing
600
500
400
300
200
100
0
($inmillions)
2014 2015 2016 Investment Grade
Non-Investment Grade
71%
29%51%
37%
12%11%
59%
30%
64%
13%
23%
12. 12
250
200
150
100
50
0
1Q 2Q 3Q 4Q 1Q 2Q 3Q
125.6
151.0 157.2
191.2 209.8 198.5 206.7
250
200
150
100
50
0
1Q 2Q 3Q 4Q 1Q 2Q 3Q
111.1 119.1 109.4 109.6 102.4 111.3 104.6
76.8
187.9
93.2
212.3
91.6
201.0
91.5
201.1
93.8
196.2
86.3
197.6
97.1
201.7
250
200
150
100
50
0
1Q 2Q 3Q 4Q 1Q 2Q 3Q
139.2 121.3 120.7 130.3 142.3 124.9 114.9
64.9
204.1
71.8
193.1
61.5
182.2
59.9
190.2
58.9
201.2
52.5
177.4
52.5
167.4
2015 2016
Crude Key Performance Metrics
(1) Weighted average term of storage contracts
(2) Prior period volumes recast to include intersegment volumes for comparability
(3) Volumes on 100% owned pipelines
(4) Reflects 100% throughput on Joint Venture pipelines
Transportation Volumes
(Thousand Barrels per Day)
Supply and Logistics Volumes(2)
(Thousand Barrels per Day)
Facilities - Cushing Storage
7.6 million Barrels Capacity
Joint Venture Transportation Volumes
(Thousand Barrels per Day)(4)
n Third-party contracted(1) n Operational / Marketing n Uncontracted
n White Cliffs Pipeline n Glass Mountain Pipeline
0.7
2015 2016
2015 2016
8
6
4
2
0
2016 2017 2018 2019
6.3
5.5
4.6
1.1
1.3
1.4
1.4
1.4
0.7 1.6
5.1
n Pipelines(3) n Field Services
13. 13
SemCAMS Avg Throughput Volume (mmcf/d)
600
500
400
300
200
100
0
1Q 2Q 3Q 4Q 1Q 2Q 3Q
302.5 288.8 254.6 267.4 270.4
157.0
253.5
91.9
394.4
96.6
385.4
93.4
348.0
106.0
373.4
114.3
384.7
147.1
304.1 135.0
388.5
SemGas Northern OK Avg Processed Volume (mmcf/d)
Capacity Processing Volumes
600
500
400
300
200
100
0
1Q 2Q 3Q 4Q 1Q 2Q 3Q
369.0 384.2 368.0 336.1 325.9 290.6 284.4
2015 2016
Natural Gas Key Performance Metrics
2015 2016
Capacity n K3 Plant n KA Plant
(1) Lower volumes related to an unplanned shutdown at our K3 plant during June
(1)
14. 14
Consolidated Balance Sheets
(in thousands, unaudited, condensed) September 30,
2016
December 31,
2015
ASSETS
Current assets $ 612,484 $ 480,381
Property, plant and equipment, net 1,696,010 1,566,821
Goodwill and other intangible assets 188,271 210,255
Equity method investments 438,194 551,078
Other noncurrent assets, net 51,573 45,374
Total assets $ 2,986,532 $ 2,853,909
LIABILITIES AND OWNERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 25 $ 31
Other current liabilities 415,742 376,996
Total current liabilities 415,767 377,027
Long-term debt, excluding current portion 1,030,140 1,057,816
Other noncurrent liabilities 73,293 222,710
Total liabilities 1,519,200 1,657,553
Total owners' equity 1,467,332 1,196,356
Total liabilities and owners' equity $ 2,986,532 $ 2,853,909
15. 15
Consolidated Statements of Operations and Comprehensive Income
(in thousands, except per share amounts, unaudited, condensed) Three Months Ended Nine Months Ended
September 30, June 30, September 30,
2016 2015 2016 2016 2015
Revenues $ 327,764 $ 397,065 $ 287,377 $ 929,992 $ 1,072,601
Expenses:
Costs of products sold, exclusive of depreciation and amortization shown below 218,503 274,639 176,842 592,292 710,869
Operating 52,636 53,267 54,707 157,537 167,157
General and administrative 20,583 23,045 20,775 62,419 78,272
Depreciation and amortization 24,912 26,022 25,048 74,007 74,430
Loss (income) on disposal or impairment, net 1,018 (951) 1,685 16,010 1,479
Total expenses 317,652 376,022 279,057 902,265 1,032,207
Earnings from equity method investments 15,845 16,237 17,078 55,994 60,699
Gain (loss) on issuance of common units by equity method investee — 136 — (41) 6,033
Operating income 25,957 37,416 25,398 83,680 107,126
Other expenses, net 21,199 17,829 10,807 91,987 33,725
Income (loss) from continuing operations before income taxes 4,758 19,587 14,591 (8,307) 73,401
Income tax expense (benefit) 11,898 10,006 4,658 (4,851) 29,609
Income (loss) from continuing operations (7,140) 9,581 9,933 (3,456) 43,792
Loss from discontinued operations, net of income taxes — (1) (2) (1) (3)
Net income (loss) (7,140) 9,580 9,931 (3,457) 43,789
Less: net income attributable to noncontrolling interests 225 4,707 1,922 11,167 14,153
Net income (loss) attributable to SemGroup Corporation $ (7,365) $ 4,873 $ 8,009 $ (14,624) $ 29,636
Net income (loss) attributable to SemGroup Corporation $ (7,365) $ 4,873 $ 8,009 $ (14,624) $ 29,636
Other comprehensive income (loss), net of income taxes (7,051) (20,210) 6,591 (4,569) (23,750)
Comprehensive income (loss) attributable to SemGroup Corporation $ (14,416) $ (15,337) $ 14,600 $ (19,193) $ 5,886
Net income (loss) per common share:
Basic $ (0.14) $ 0.11 $ 0.18 $ (0.31) $ 0.68
Diluted $ (0.14) $ 0.11 $ 0.18 $ (0.31) $ 0.67
Weighted average shares (thousands):
Basic 52,642 43,808 45,236 47,269 43,775
Diluted 52,642 43,971 45,647 47,269 43,969
16. 16
Non-GAAP Adjusted EBITDA Calculation
(in thousands, unaudited) Three Months Ended Nine Months Ended
September 30, June 30, September 30,
Reconciliation of net income to Adjusted EBITDA: 2016 2015 2016 2016 2015
Net income (loss) $ (7,140) $ 9,580 $ 9,931 $ (3,457) $ 43,789
Add: Interest expense 21,032 19,170 18,875 58,842 50,583
Add: Income tax expense (benefit) 11,898 10,006 4,658 (4,851) 29,609
Add: Depreciation and amortization expense 24,912 26,022 25,048 74,007 74,430
EBITDA 50,702 64,778 58,512 124,541 198,411
Selected Non-Cash Items and
Other Items Impacting Comparability 20,588 11,171 9,121 92,046 27,546
Adjusted EBITDA $ 71,290 $ 75,949 $ 67,633 $ 216,587 $ 225,957
Selected Non-Cash Items and
Other Items Impacting Comparability
Loss (gain) on disposal or impairment, net $ 1,018 $ (951) $ 1,685 $ 16,010 $ 1,479
Loss from discontinued operations, net of income taxes — 1 2 1 3
Foreign currency transaction (gain) loss 659 (385) 1,543 3,671 (1,199)
Remove NGL equity losses (earnings) including loss (gain) on issuance of common units 38 742 — (2,153) (11,070)
Remove loss (gain) on sale or impairment of NGL units — — (9,120) 30,644 (14,517)
NGL cash distribution — 4,752 — 4,873 14,235
M&A transaction related costs 3,269 — — 3,269 10,000
Inventory valuation adjustments including equity method investees — 142 — — 1,377
Employee severance and relocation expense 534 21 836 1,629 42
Unrealized loss (gain) on derivative activities 6,167 (4,546) 4,477 6,096 (3,316)
Depreciation and amortization included within equity earnings 7,283 6,412 7,138 20,960 19,134
Bankruptcy related expenses — 33 — — 224
Legal settlement expense — 3,394 — — 3,394
Non-cash equity compensation 1,620 1,556 2,560 7,046 7,760
Selected Non-Cash items and
Other Items Impacting Comparability $ 20,588 $ 11,171 $ 9,121 $ 92,046 $ 27,546
17. 17
Non-GAAP Financial Data Reconciliations
(in thousands, unaudited) Three Months Ended Nine Months Ended
September 30, June 30, September 30,
2016 2015 2016 2016 2015
Net income $ 13,054 $ 12,120 $ 11,797 $ 44,147 $ 38,714
Add: Interest expense 154 267 193 611 524
Add: Depreciation and amortization expense 6,307 9,022 6,171 18,337 26,678
EBITDA 19,515 21,409 18,161 63,095 65,916
Selected Non-Cash Items and
Other Items Impacting Comparability 8,334 6,587 8,954 23,894 19,463
Adjusted EBITDA $ 27,849 $ 27,996 $ 27,115 $ 86,989 $ 85,379
Selected Non-Cash Items and Other Items Impacting Comparability
Loss on disposal or impairment, net $ 1,018 $ 27 $ 1,714 $ 2,799 $ 160
Inventory valuation adjustments including equity method investees — 142 — — 142
Employee severance and relocation expense 33 6 102 135 27
Depreciation and amortization included within
equity earnings 7,283 6,412 7,138 20,960 19,134
Selected Non-Cash items and
Other Items Impacting Comparability $ 8,334 $ 6,587 $ 8,954 $ 23,894 $ 19,463
Crude - Transportation Segment
18. 18
Non-GAAP Financial Data Reconciliations
(in thousands, unaudited) Three Months Ended Nine Months Ended
September 30, June 30, September 30,
2016 2015 2016 2016 2015
Net income $ 7,692 $ 7,633 $ 7,450 $ 22,845 $ 21,223
Add: Depreciation and amortization expense 1,987 1,451 1,921 5,792 4,226
EBITDA 9,679 9,084 9,371 28,637 25,449
Selected Non-Cash Items and
Other Items Impacting Comparability 2 — 4 6 —
Adjusted EBITDA $ 9,681 $ 9,084 $ 9,375 $ 28,643 $ 25,449
Selected Non-Cash Items and Other Items Impacting Comparability
Employee severance expense $ 2 $ — $ 4 $ 6 $ —
Selected Non-Cash items and
Other Items Impacting Comparability $ 2 $ — $ 4 $ 6 $ —
Crude - Facilities Segment
19. 19
Non-GAAP Financial Data Reconciliations
(in thousands, unaudited) Three Months Ended Nine Months Ended
September 30, June 30, September 30,
2016 2015 2016 2016 2015
Net income (loss) $ (3,248) $ 10,216 $ 5,370 $ 15,583 $ 24,969
Add: Interest expense 186 119 182 508 330
Add: Depreciation and amortization expense 46 40 40 126 119
EBITDA (3,016) 10,375 5,592 16,217 25,418
Selected Non-Cash Items and
Other Items Impacting Comparability 6,167 (4,546) 4,477 6,323 (2,198)
Adjusted EBITDA $ 3,151 $ 5,829 $ 10,069 $ 22,540 $ 23,220
Selected Non-Cash Items and Other Items Impacting Comparability
Loss (gain) on disposal or impairment, net $ — $ — $ — $ 227 $ (3)
Unrealized loss (gain) on derivative activities 6,167 (4,546) 4,477 6,096 (3,430)
Inventory valuation adjustments — — — — 1,235
Selected Non-Cash items and
Other Items Impacting Comparability $ 6,167 $ (4,546) $ 4,477 $ 6,323 $ (2,198)
Crude - Supply and Logistics Segment
20. 20
Non-GAAP Financial Data Reconciliations
(in thousands, unaudited) Three Months Ended Nine Months Ended
September 30, June 30, September 30,
2016 2015 2016 2016 2015
Net income (loss) $ 3,763 $ 4,754 $ (321) $ (10,027) $ 16,688
Add: Interest expense 3,367 3,504 3,431 10,353 9,624
Add: Depreciation and amortization expense 9,066 8,601 9,194 27,182 23,098
EBITDA 16,196 16,859 12,304 27,508 49,410
Selected Non-Cash Items and
Other Items Impacting Comparability 125 561 256 13,772 2,539
Adjusted EBITDA $ 16,321 $ 17,420 $ 12,560 $ 41,280 $ 51,949
Selected Non-Cash Items and Other Items Impacting Comparability
Loss (gain) on disposal or impairment, net $ — $ 445 $ (1) $ 13,051 $ 1,894
Employee severance expense — — 13 13 —
Non-cash equity compensation 125 116 244 708 645
Selected Non-Cash items and
Other Items Impacting Comparability $ 125 $ 561 $ 256 $ 13,772 $ 2,539
SemGas Segment
21. 21
Non-GAAP Financial Data Reconciliations
(in thousands, unaudited) Three Months Ended Nine Months Ended
September 30, June 30, September 30,
2016 2015 2016 2016 2015
Net income $ 5,006 $ 2,119 $ 2,021 $ 9,783 $ 4,233
Add: Interest expense 2,249 2,270 2,235 6,710 8,499
Add: Income tax expense 1,573 2,361 451 2,989 3,528
Add: Depreciation and amortization expense 4,239 3,198 4,294 12,484 9,451
EBITDA 13,067 9,948 9,001 31,966 25,711
Selected Non-Cash Items and
Other Items Impacting Comparability 124 (745) 381 888 376
Adjusted EBITDA $ 13,191 $ 9,203 $ 9,382 $ 32,854 $ 26,087
Selected Non-Cash Items and Other Items Impacting Comparability
Gain on disposal or impairment, net $ — $ (917) $ — $ — $ (917)
Foreign currency transaction (gain) loss — 3 (1) 5 104
Employee severance 1 — — 1 —
Non-cash equity compensation 123 169 382 882 1,189
Selected Non-Cash items and
Other Items Impacting Comparability $ 124 $ (745) $ 381 $ 888 $ 376
SemCAMS Segment
22. 22
Non-GAAP Financial Data Reconciliations
(in thousands, unaudited) Three Months Ended Nine Months Ended
September 30, June 30, September 30,
2016 2015 2016 2016 2015
Net income (loss) $ 948 $ (1,077) $ (1,447) $ (745) $ (2,900)
Add: Interest expense 456 433 353 1,185 1,341
Add: Income tax expense (benefit) (601) (170) (273) (815) (372)
Add: Depreciation and amortization expense 1,880 2,173 1,983 5,823 6,367
EBITDA 2,683 1,359 616 5,448 4,436
Selected Non-Cash Items and
Other Items Impacting Comparability 686 670 1,562 2,935 801
Adjusted EBITDA $ 3,369 $ 2,029 $ 2,178 $ 8,383 $ 5,237
Selected Non-Cash Items and Other Items Impacting Comparability
Foreign currency transaction loss $ 647 $ 596 $ 1,391 $ 2,548 $ 374
Non-cash equity compensation 39 74 171 387 427
Selected Non-Cash items and
Other Items Impacting Comparability $ 686 $ 670 $ 1,562 $ 2,935 $ 801
SemLogistics Segment
23. 23
Non-GAAP Financial Data Reconciliations
(in thousands, unaudited) Three Months Ended Nine Months Ended
September 30, June 30, September 30,
2016 2015 2016 2016 2015
Net income $ 1,491 $ 2,473 $ 1,187 $ 3,374 $ 8,683
Add: Interest expense 43 44 — 43 46
Add: Income tax expense 349 642 194 1,150 2,396
Add: Depreciation and amortization expense 932 993 949 2,822 3,083
EBITDA 2,815 4,152 2,330 7,389 14,208
Selected Non-Cash Items and
Other Items Impacting Comparability 72 480 244 686 959
Adjusted EBITDA $ 2,887 $ 4,632 $ 2,574 $ 8,075 $ 15,167
Selected Non-Cash Items and Other Items Impacting Comparability
Loss (gain) on disposal of long-lived assets, net $ — $ 124 $ (28) $ (67) $ 105
Foreign currency transaction loss 30 269 153 439 494
Non-cash equity compensation 42 87 119 314 360
Selected Non-Cash items and
Other Items Impacting Comparability $ 72 $ 480 $ 244 $ 686 $ 959
SemMaterials México Segment
24. 24
Non-GAAP Financial Data Reconciliations
(in thousands, unaudited) Three Months Ended Nine Months Ended
September 30, June 30, September 30,
2016 2015 2016 2016 2015
Net loss $ (35,846) $ (28,658) $ (16,126) $ (88,417) $ (67,821)
Add: Interest expense 14,577 12,533 12,481 39,432 30,219
Add: Income tax expense (benefit) 10,577 7,173 4,286 (8,175) 24,057
Add: Depreciation and amortization expense 455 544 496 1,441 1,408
EBITDA (10,237) (8,408) 1,137 (55,719) (12,137)
Selected Non-Cash Items and
Other Items Impacting Comparability 5,078 8,164 (6,757) 43,542 5,606
Adjusted EBITDA $ (5,159) $ (244) $ (5,620) $ (12,177) $ (6,531)
Selected Non-Cash Items and Other Items Impacting Comparability
Loss (gain) on disposal or impairment, net $ — $ (630) $ — $ — $ 240
Loss from discontinued operations, net of income taxes — 1 2 1 3
Foreign currency transaction (gain) loss (18) (1,253) — 679 (2,171)
Remove NGL equity losses (earnings) including gain on issuance of
common units 38 742 — (2,153) (11,070)
Remove loss (gain) on impairment or sale of NGL units — — (9,120) 30,644 (14,517)
NGL cash distribution — 4,752 — 4,873 14,235
M&A transaction related costs 3,269 — — 3,269 10,000
Employee severance and relocation expense 498 15 717 1,474 15
Unrealized loss on derivative activities — — — — 114
Bankruptcy related expenses — 33 — — 224
Legal settlement expense — 3,394 — — 3,394
Non-cash equity compensation 1,291 1,110 1,644 4,755 5,139
Selected Non-Cash items and
Other Items Impacting Comparability $ 5,078 $ 8,164 $ (6,757) $ 43,542 $ 5,606
Corporate & Other Segment
25. 25
2016 Adjusted EBITDA Guidance
(1) Net income in our guidance reconciliation does not include unrealized gains or losses on derivative activities or other similar items which, due to their nature,
cannot be accurately forecasted. Net income, as presented in the reconciliation, is based on the best information available but is not intended to represent guidance
for net income and should not be relied on as such
(in millions, unaudited) 2016 Guidance
Mid-point
Net income(1) $ 34.0
Add: Interest expense 83.0
Add: Income tax expense 10.0
Add: Depreciation and amortization 126.0
EBITDA $ 253.0
Selected Non-Cash and Other Items Impacting Comparability 42.0
Adjusted EBITDA $ 295.0
Selected Non-Cash and Other Items Impacting Comparability
Depreciation and amortization included within equity earnings $ 28.0
Non-cash equity compensation 14.0
Selected Non-Cash and Other Items Impacting Comparability $ 42.0
26. 26
(in thousands, unaudited) Three Months Ended
March 31, 2016
Crude -
Transportation
Crude -
Facilities
Crude -
Supply and
Logistics SemCAMS SemLogistics SemMexico SemGas
Corporate
and other Consolidated
Net income (loss) $ 19,296 $ 7,703 $ 13,461 $ 2,756 $ (246) $ 696 $ (13,469) $ (36,445) $ (6,248)
Add: Interest expense 264 — 140 2,226 376 — 3,555 12,374 18,935
Add: Income tax expense (benefit) — — — 965 59 607 — (23,038) (21,407)
Add: Depreciation and amortization expense 5,859 1,884 40 3,951 1,960 941 8,922 490 24,047
EBITDA 25,419 9,587 13,641 9,898 2,149 2,244 (992) (46,619) 15,327
Selected Non-Cash Items and
Other Items Impacting Comparability 6,606 — (4,321) 383 687 370 13,391 45,224 62,340
Adjusted EBITDA $ 32,025 $ 9,587 $ 9,320 $ 10,281 $ 2,836 $ 2,614 $ 12,399 $ (1,395) $ 77,667
Selected Non-Cash Items and Other Items Impacting Comparability
Loss (gain) on disposal of long-lived assets, net $ 67 $ — $ 227 $ — $ — $ (39) $ 13,052 $ — $ 13,307
Loss from discontinued operations, net of income taxes — — — — — — — 2 2
Foreign currency transaction loss — — — 6 510 256 — 697 1,469
Remove NGL equity earnings including gain on issuance of common units — — — — — — — (2,191) (2,191)
Remove gain on sale of NGL units — — — — — — — 39,764 39,764
NGL cash distribution — — — — — — — 4,873 4,873
Employee severance and relocation expense — — — — — — — 259 259
Unrealized gain on derivative activities — — (4,548) — — — — — (4,548)
Depreciation and amortization included within
equity earnings 6,539 — — — — — — — 6,539
Non-cash equity compensation — — — 377 177 153 339 1,820 2,866
Selected Non-Cash Items and
Other Items Impacting Comparability $ 6,606 $ — $ (4,321) $ 383 $ 687 $ 370 $ 13,391 $ 45,224 $ 62,340
Reconciliation of Net Income to Adjusted EBITDA
27. 27
(in thousands, unaudited) Year Ended
December 31, 2015
Crude -
Transportation
Crude -
Facilities
Crude -
Supply and
Logistics SemCAMS SemLogistics SemMexico SemGas
Corporate
and other Consolidated
Net income (loss) $ 44,771 $ 27,928 $ 27,567 $ 7,879 $ (1,624) $ 8,725 $ 16,704 $ (90,425) $ 41,525
Add: Interest expense (income) 778 — 462 10,742 1,746 46 13,162 42,739 69,675
Add: Income tax expense (benefit) — — — 4,847 (2,195) 2,611 — 29,554 34,817
Add: Depreciation and amortization expense 35,500 5,829 159 12,940 8,543 4,076 31,803 2,032 100,882
EBITDA 81,049 33,757 28,188 36,408 6,470 15,458 61,669 (16,100) 246,899
Selected Non-Cash Items and
Other Items Impacting Comparability 35,600 — 4,491 773 1,399 1,193 2,777 12,150 58,383
Adjusted EBITDA $ 116,649 $ 33,757 $ 32,679 $ 37,181 $ 7,869 $ 16,651 $ 64,446 $ (3,950) $ 305,282
Selected Non-Cash Items and Other Items Impacting Comparability
Loss (gain) on disposal of long-lived assets, net $ 9,621 $ — $ (3) $ (917) $ — $ 85 $ 1,832 $ 854 $ 11,472
Loss from discontinued operations, net of income taxes — — — — — — — 4 4
Foreign currency transaction (gain) loss — — — 103 799 605 — (2,574) (1,067)
Remove NGL equity earnings including gain on issuance of common units — — — — — — — (11,416) (11,416)
Remove gain on sale of NGL units — — — — — — — (14,517) (14,517)
NGL cash distribution — — — — — — — 19,074 19,074
Employee severance expense 75 — 4 — — — — 11 90
Unrealized loss (gain) on derivative activities — — 1,900 — — — — 114 2,014
M&A transaction related costs — — — — — — — 10,000 10,000
Depreciation and amortization included within
equity earnings 25,307 — — — — — — — 25,307
Inventory valuation adjustment including equity method investees 597 — 2,590 — — — — — 3,187
Bankruptcy related expenses — — — — — — — 224 224
Legal settlement — — — — — — — 3,394 3,394
Non-cash equity compensation — — — 1,587 600 503 945 6,982 10,617
Selected Non-Cash Items and
Other Items Impacting Comparability $ 35,600 $ — $ 4,491 $ 773 $ 1,399 $ 1,193 $ 2,777 $ 12,150 $ 58,383
Reconciliation of Net Income to Adjusted EBITDA
28. 28
(in thousands, unaudited) Year Ended
December 31, 2014
Crude -
Transportation
Crude -
Facilities
Crude -
Supply and
Logistics SemCAMS SemLogistics SemMexico SemGas
Corporate
and other Consolidated
Net income (loss) $ 31,301 $ 26,921 $ 24,610 $ 14,318 $ (10,072) $ 5,900 $ 6,792 $ (47,713) $ 52,057
Add: Interest expense (income) 11,727 — 502 13,558 1,528 166 8,570 12,993 49,044
Add: Income tax expense (benefit) — — — 3,135 (2,231) 4,053 — 41,556 46,513
Add: Depreciation and amortization expense 33,679 5,365 549 14,295 10,005 6,031 26,353 2,120 98,397
EBITDA 76,707 32,286 25,661 45,306 (770) 16,150 41,715 8,956 246,011
Selected Non-Cash Items and
Other Items Impacting Comparability 21,582 (34) 4,004 590 (1,083) 621 21,053 (5,303) 41,430
Adjusted EBITDA $ 98,289 $ 32,252 $ 29,665 $ 45,896 $ (1,853) $ 16,771 $ 62,768 $ 3,653 $ 287,441
Selected Non-Cash Items and Other Items Impacting Comparability
Loss (gain) on disposal of long-lived assets, net $ 467 $ (34) $ (42) $ (950) $ (2,490) $ (53) $ 20,092 $ 15,602 $ 32,592
Loss (income) from discontinued operations, net of income taxes — — — — (1) — — 2 1
Foreign currency transaction (gain) loss — — — 42 821 279 — (1,228) (86)
Remove NGL equity earnings including gain on issuance of common units — — — — — — — (31,363) (31,363)
Remove gain on sale of NGL units — — — — — — — (34,211) (34,211)
NGL cash distribution — — — — — — — 23,404 23,404
Employee severance expense 9 — — 150 — — 41 20 220
Unrealized loss (gain) on derivative activities — — (1,621) — — — — (113) (1,734)
Change in fair value of warrants — — — — — — — 13,423 13,423
Depreciation and amortization included within
equity earnings 18,992 — — — — — — — 18,992
Inventory valuation adjustment including equity method investees 2,114 — 5,667 — — — — — 7,781
Recovery of receivables written off at emergence — — — (664) — — — — (664)
Bankruptcy related expenses — — — — — — 150 1,160 1,310
Charitable contributions — — — — — — — 3,379 3,379
Non-cash equity compensation — — — 2,012 587 395 770 4,622 8,386
Selected Non-Cash Items and
Other Items Impacting Comparability $ 21,582 $ (34) $ 4,004 $ 590 $ (1,083) $ 621 $ 21,053 $ (5,303) $ 41,430
Reconciliation of Net Income to Adjusted EBITDA