x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
20-3533152
|
(State or other jurisdiction of
incorporation or organization)
|
(IRS Employer
Identification Number)
|
Large accelerated filer
x
|
Accelerated filer
o
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
|
|
Smaller reporting company
o
|
|
Emerging growth company
o
|
Class
|
|
|
Outstanding at April 30, 2018
|
|||
Class A
|
Common stock, $0.01 par
|
|
79,029,331
|
|
|
Shares
|
Class B
|
Common stock, $0.01 par
|
|
—
|
|
|
Shares
|
|
PART I – FINANCIAL INFORMATION
|
|
|
|
|
Item 1
|
|
|
|
||
|
||
|
||
|
||
Item 2
|
||
Item 3
|
||
Item 4
|
||
|
|
|
|
PART II – OTHER INFORMATION
|
|
|
|
|
Item 1
|
||
Item 1A
|
||
Item 2
|
||
Item 3
|
||
Item 4
|
||
Item 5
|
||
Item 6
|
||
|
|
|
|
•
|
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 failure to realize the anticipated benefits of our acquisition of 100% of the equity interests in Buffalo Parent Gulf Coast Terminals LLC ("Buffalo Parent"), the parent company of Buffalo Gulf Coast Terminals LLC ("BGCT") and HFOTCO LLC, doing business as Houston Fuel Oil Terminal Company LLC (“HFOTCO”);
|
•
|
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 consequences of any divestitures of non-strategic operating assets or divestitures of interests in some of our operating assets through partnerships and/or joint ventures;
|
•
|
The amount of collateral required to be posted from time to time in our 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 agreements, continuing covenant agreement and the indentures governing our notes, including requirements under our credit agreements and continuing covenant 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;
|
•
|
Any future impairment of goodwill resulting from the loss of customers or business;
|
•
|
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; and
|
•
|
General economic, market and business conditions.
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
285,498
|
|
|
$
|
93,699
|
|
Accounts receivable (net of allowance of $1,788 and $2,628, respectively)
|
535,705
|
|
|
653,484
|
|
||
Receivable from affiliates
|
937
|
|
|
1,691
|
|
||
Inventories
|
81,542
|
|
|
101,665
|
|
||
Current assets held for sale
|
2,501
|
|
|
38,063
|
|
||
Other current assets
|
17,341
|
|
|
14,297
|
|
||
Total current assets
|
923,524
|
|
|
902,899
|
|
||
Property, plant and equipment (net of accumulated depreciation of $483,904 and $444,842, respectively)
|
3,380,574
|
|
|
3,315,131
|
|
||
Equity method investments
|
279,054
|
|
|
285,281
|
|
||
Goodwill
|
257,302
|
|
|
257,302
|
|
||
Other intangible assets (net of accumulated amortization of $64,810 and $56,409, respectively)
|
390,242
|
|
|
398,643
|
|
||
Other noncurrent assets
|
142,845
|
|
|
132,600
|
|
||
Noncurrent assets held for sale
|
65,784
|
|
|
84,961
|
|
||
Total assets
|
$
|
5,439,325
|
|
|
$
|
5,376,817
|
|
LIABILITIES, PREFERRED STOCK AND OWNERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
492,507
|
|
|
$
|
587,898
|
|
Payable to affiliates
|
2,321
|
|
|
6,971
|
|
||
Accrued liabilities
|
100,373
|
|
|
131,407
|
|
||
Deferred revenue
|
8,312
|
|
|
7,518
|
|
||
Current liabilities held for sale
|
2,434
|
|
|
23,847
|
|
||
Other current liabilities
|
19,184
|
|
|
3,395
|
|
||
Current portion of long-term debt
|
5,527
|
|
|
5,525
|
|
||
Total current liabilities
|
630,658
|
|
|
766,561
|
|
||
Long-term debt, net
|
2,733,957
|
|
|
2,853,095
|
|
||
Deferred income taxes
|
60,551
|
|
|
46,585
|
|
||
Other noncurrent liabilities
|
37,384
|
|
|
38,495
|
|
||
Noncurrent liabilities held for sale
|
14,258
|
|
|
13,716
|
|
||
Commitments and contingencies (Note 7)
|
|
|
|
||||
Preferred stock, $0.01 par value, $350,000 liquidation preference (authorized - 4,000 shares; issued - 350 and 0 shares, respectively)
|
342,354
|
|
|
—
|
|
||
SemGroup owners’ equity:
|
|
|
|
||||
Common stock, $0.01 par value (authorized - 100,000 shares; issued - 79,062 and 79,708 shares, respectively)
|
785
|
|
|
786
|
|
||
Additional paid-in capital
|
1,735,646
|
|
|
1,770,117
|
|
||
Treasury stock, at cost (35 and 1,024 shares, respectively)
|
(381
|
)
|
|
(8,031
|
)
|
||
Accumulated deficit
|
(80,257
|
)
|
|
(50,706
|
)
|
||
Accumulated other comprehensive loss
|
(35,630
|
)
|
|
(53,801
|
)
|
||
Total owners’ equity
|
1,620,163
|
|
|
1,658,365
|
|
||
Total liabilities, preferred stock and owners’ equity
|
$
|
5,439,325
|
|
|
$
|
5,376,817
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Revenues:
|
|
|
|
||||
Product
|
$
|
510,768
|
|
|
$
|
373,361
|
|
Service
|
131,895
|
|
|
68,193
|
|
||
Lease
|
4,329
|
|
|
—
|
|
||
Other
|
14,617
|
|
|
14,546
|
|
||
Total revenues
|
661,609
|
|
|
456,100
|
|
||
Expenses:
|
|
|
|
||||
Costs of products sold, exclusive of depreciation and amortization shown below
|
496,132
|
|
|
348,998
|
|
||
Operating
|
69,791
|
|
|
52,083
|
|
||
General and administrative
|
26,477
|
|
|
21,712
|
|
||
Depreciation and amortization
|
50,536
|
|
|
24,599
|
|
||
Loss (gain) on disposal or impairment, net
|
(3,566
|
)
|
|
2,410
|
|
||
Total expenses
|
639,370
|
|
|
449,802
|
|
||
Earnings from equity method investments
|
12,614
|
|
|
17,091
|
|
||
Operating income
|
34,853
|
|
|
23,389
|
|
||
Other expenses (income), net:
|
|
|
|
||||
Interest expense
|
42,461
|
|
|
13,867
|
|
||
Loss on early extinguishment of debt
|
—
|
|
|
19,922
|
|
||
Foreign currency transaction loss
|
3,294
|
|
|
—
|
|
||
Other income, net
|
(950
|
)
|
|
(218
|
)
|
||
Total other expenses, net
|
44,805
|
|
|
33,571
|
|
||
Loss before income taxes
|
(9,952
|
)
|
|
(10,182
|
)
|
||
Income tax expense
|
23,083
|
|
|
95
|
|
||
Net loss
|
(33,035
|
)
|
|
(10,277
|
)
|
||
Less: cumulative preferred stock dividends
|
4,832
|
|
|
—
|
|
||
Net loss attributable to common shareholders
|
$
|
(37,867
|
)
|
|
$
|
(10,277
|
)
|
Net loss
|
$
|
(33,035
|
)
|
|
$
|
(10,277
|
)
|
Other comprehensive income, net of income tax
|
18,171
|
|
|
6,033
|
|
||
Comprehensive loss
|
$
|
(14,864
|
)
|
|
$
|
(4,244
|
)
|
Net loss per common share (Note 12):
|
|
|
|
||||
Basic
|
$
|
(0.48
|
)
|
|
$
|
(0.16
|
)
|
Diluted
|
$
|
(0.48
|
)
|
|
$
|
(0.16
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(33,035
|
)
|
|
$
|
(10,277
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
50,536
|
|
|
24,599
|
|
||
Loss (gain) on disposal or impairment of long-lived assets, net
|
(3,566
|
)
|
|
2,410
|
|
||
Earnings from equity method investments
|
(12,614
|
)
|
|
(17,091
|
)
|
||
Distributions from equity method investments
|
12,605
|
|
|
17,301
|
|
||
Amortization of debt issuance costs and discount
|
1,796
|
|
|
1,364
|
|
||
Loss on early extinguishment of debt
|
—
|
|
|
19,922
|
|
||
Deferred tax expense (benefit)
|
10,044
|
|
|
(634
|
)
|
||
Non-cash equity compensation
|
2,196
|
|
|
2,757
|
|
||
Provision for uncollectible accounts receivable, net of recoveries
|
(173
|
)
|
|
151
|
|
||
Foreign currency transaction loss
|
3,294
|
|
|
—
|
|
||
Inventory valuation adjustment
|
—
|
|
|
455
|
|
||
Changes in operating assets and liabilities (Note 13)
|
52,497
|
|
|
(12,948
|
)
|
||
Net cash provided by operating activities
|
83,580
|
|
|
28,009
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(131,784
|
)
|
|
(92,248
|
)
|
||
Proceeds from sale of long-lived assets
|
16
|
|
|
15,500
|
|
||
Contributions to equity method investments
|
(309
|
)
|
|
(2,490
|
)
|
||
Proceeds from the sale of Mexican asphalt business, net
|
63,830
|
|
|
—
|
|
||
Distributions in excess of equity in earnings of affiliates
|
6,545
|
|
|
4,392
|
|
||
Net cash used in investing activities
|
(61,702
|
)
|
|
(74,846
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Debt issuance costs
|
(459
|
)
|
|
(4,632
|
)
|
||
Borrowings on credit facilities and issuance of senior notes, net of discount
|
—
|
|
|
437,018
|
|
||
Principal payments on credit facilities and other obligations
|
(134,246
|
)
|
|
(348,278
|
)
|
||
Debt extinguishment costs
|
—
|
|
|
(16,293
|
)
|
||
Proceeds from issuance preferred stock, net of offering costs
|
342,354
|
|
|
—
|
|
||
Repurchase of common stock for payment of statutory taxes due on equity-based compensation
|
(381
|
)
|
|
(1,047
|
)
|
||
Dividends paid
|
(37,230
|
)
|
|
(29,770
|
)
|
||
Proceeds from issuance of common stock under employee stock purchase plan
|
24
|
|
|
231
|
|
||
Net cash provided by financing activities
|
170,062
|
|
|
37,229
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(141
|
)
|
|
1,248
|
|
||
Change in cash and cash equivalents
|
191,799
|
|
|
(8,360
|
)
|
||
Cash and cash equivalents at beginning of period
|
93,699
|
|
|
74,216
|
|
||
Cash and cash equivalents at end of period
|
$
|
285,498
|
|
|
$
|
65,856
|
|
1.
|
OVERVIEW
|
1.
|
OVERVIEW,
Continued
|
|
Three Months Ended March 31, 2018
|
||||||||||
|
Under ASC 606
|
|
Under ASC 605
|
|
Increase/(Decrease)
|
||||||
Accounts receivable, net
|
$
|
535,705
|
|
|
$
|
534,350
|
|
|
$
|
1,355
|
|
Other noncurrent assets
|
$
|
142,845
|
|
|
$
|
124,836
|
|
|
$
|
18,009
|
|
Other current liabilities
|
$
|
19,184
|
|
|
$
|
18,341
|
|
|
$
|
843
|
|
Deferred income taxes
|
$
|
60,551
|
|
|
$
|
54,970
|
|
|
$
|
5,581
|
|
Accumulated deficit
|
$
|
(80,257
|
)
|
|
$
|
(93,197
|
)
|
|
$
|
12,940
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Revenue
|
$
|
661,609
|
|
|
$
|
655,723
|
|
|
$
|
5,886
|
|
Cost of sales
|
$
|
496,132
|
|
|
$
|
492,591
|
|
|
$
|
3,541
|
|
General and administrative expense
|
$
|
26,477
|
|
|
$
|
26,377
|
|
|
$
|
100
|
|
Income tax expense (benefit)
|
$
|
23,083
|
|
|
$
|
22,265
|
|
|
$
|
818
|
|
Net loss
|
$
|
(33,035
|
)
|
|
$
|
(34,462
|
)
|
|
$
|
1,427
|
|
Net loss attributable to common shareholders
|
$
|
(37,867
|
)
|
|
$
|
(39,294
|
)
|
|
$
|
1,427
|
|
Net loss per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
(0.48
|
)
|
|
$
|
(0.50
|
)
|
|
$
|
0.02
|
|
Diluted
|
$
|
(0.48
|
)
|
|
$
|
(0.50
|
)
|
|
$
|
0.02
|
|
•
|
Changes to revenue primarily relate to the timing of recognition of deficiencies on take-or-pay agreements for which there is a contractual make-up period and a change to reporting certain gas gathering and processing fees as revenue rather than a reduction of cost of sales. Under ASC 605 - Revenue (“ASC 605”), revenue related to deficiencies with a make-up period was deferred until the contractual right to make-up a deficiency expired. Under ASC 606, we recognize all or a portion of revenue related to deficiencies before the make-up period expires if we determine that it is probable that the customer will not make-up all or some of its deficient volumes, for example if there is insufficient capacity to make up the deficient volumes. This may lead to earlier recognition of deficiency revenues under ASC 606 as compared with ASC 605.
|
•
|
Changes to cost of sales are due to how certain gathering and processing fees related to percentage of proceeds contracts are treated as revenues rather than reductions to purchase price of commodities (cost of sales).
|
•
|
Changes to accounts receivable, net and noncurrent receivables (included in other noncurrent assets on the condensed consolidated balance sheets) primarily relate to the timing of recognizing take-or-pay deficiencies with make-up rights as discussed above. Noncurrent receivables related to contracts for which we do not have the right to bill the customer for deficiencies until the contract expiration date.
|
•
|
Changes to other noncurrent assets include success fee payments to third parties for certain contracts which were expensed as incurred under ASC 605, but which have been recognized as assets under ASC 606 and are amortized to general and administrative expense in the consolidated statement of operations and comprehensive income (loss).
|
1.
|
OVERVIEW,
Continued
|
•
|
Changes to deferred income taxes primarily relate to the deferred tax impact of adoption entries.
|
•
|
Changes to retained earnings are due to the impact of adoption at January 1, 2018, as described above, and cumulative differences in net income through March 31, 2018.
|
2.
|
DISPOSALS OR IMPAIRMENTS OF LONG-LIVED ASSETS
|
3.
|
EQUITY METHOD INVESTMENTS
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
White Cliffs Pipeline, L.L.C.
|
$
|
260,126
|
|
|
$
|
266,362
|
|
NGL Energy Partners LP
|
18,928
|
|
|
18,919
|
|
||
Total equity method investments
|
$
|
279,054
|
|
|
$
|
285,281
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
White Cliffs Pipeline, L.L.C.
|
$
|
12,605
|
|
|
$
|
15,193
|
|
Glass Mountain Pipeline, LLC
|
—
|
|
|
1,895
|
|
||
NGL Energy Partners LP
|
9
|
|
|
3
|
|
||
Total earnings from equity method investments
|
$
|
12,614
|
|
|
$
|
17,091
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
White Cliffs Pipeline, L.L.C.
|
$
|
19,150
|
|
|
$
|
18,190
|
|
Glass Mountain Pipeline, LLC
|
—
|
|
|
3,503
|
|
||
Total cash distributions received from equity method investments
|
$
|
19,150
|
|
|
$
|
21,693
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Revenue
|
$
|
40,391
|
|
|
$
|
50,184
|
|
Cost of products sold, exclusive of depreciation and amortization shown below
|
$
|
384
|
|
|
$
|
4,113
|
|
Operating, general and administrative expenses
|
$
|
5,402
|
|
|
$
|
6,240
|
|
Depreciation and amortization expense
|
$
|
9,592
|
|
|
$
|
9,256
|
|
Net income
|
$
|
25,014
|
|
|
$
|
30,575
|
|
3.
|
EQUITY METHOD INVESTMENTS,
Continued
|
4.
|
FINANCIAL INSTRUMENTS
|
|
March 31, 2018
|
||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
(1)
|
|
Total - Net
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commodity derivatives
(2)
|
$
|
31
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(31
|
)
|
|
$
|
—
|
|
Interest rate swaps
|
—
|
|
|
—
|
|
|
130
|
|
|
—
|
|
|
130
|
|
|||||
Total assets
|
31
|
|
|
—
|
|
|
130
|
|
|
(31
|
)
|
|
130
|
|
|||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commodity derivatives
|
3,625
|
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
3,594
|
|
|||||
Foreign currency forwards
|
—
|
|
|
1,778
|
|
|
—
|
|
|
—
|
|
|
1,778
|
|
|||||
Total liabilities
|
3,625
|
|
|
1,778
|
|
|
—
|
|
|
(31
|
)
|
|
5,372
|
|
|||||
Net assets (liabilities) at fair value
|
$
|
(3,594
|
)
|
|
$
|
(1,778
|
)
|
|
$
|
130
|
|
|
$
|
—
|
|
|
$
|
(5,242
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
December 31, 2017
|
||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
(1)
|
|
Total - Net
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commodity derivatives
(2)
|
$
|
602
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(602
|
)
|
|
$
|
—
|
|
Foreign currency forwards
|
—
|
|
|
2,564
|
|
|
—
|
|
|
—
|
|
|
2,564
|
|
|||||
Total assets
|
602
|
|
|
2,564
|
|
|
—
|
|
|
(602
|
)
|
|
2,564
|
|
|||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Commodity derivatives
|
1,970
|
|
|
—
|
|
|
—
|
|
|
(602
|
)
|
|
1,368
|
|
|||||
Interest rate swaps
|
—
|
|
|
—
|
|
|
1,228
|
|
|
—
|
|
|
1,228
|
|
|||||
Total liabilities
|
1,970
|
|
|
—
|
|
|
1,228
|
|
|
(602
|
)
|
|
2,596
|
|
|||||
Net assets (liabilities) at fair value
|
$
|
(1,368
|
)
|
|
$
|
2,564
|
|
|
$
|
(1,228
|
)
|
|
$
|
—
|
|
|
$
|
(32
|
)
|
4.
|
FINANCIAL INSTRUMENTS,
Continued
|
|
Three Months Ended March 31, 2018
|
||
Net liabilities (asset) - beginning balance
|
$
|
1,228
|
|
Transfers out of Level 3
|
—
|
|
|
Realized/Unrealized (gain) loss included in earnings*
|
(1,074
|
)
|
|
Settlements
|
(284
|
)
|
|
Net liabilities (asset) - ending balance
|
$
|
(130
|
)
|
4.
|
FINANCIAL INSTRUMENTS,
Continued
|
|
Three Months Ended March 31,
|
||||
|
2018
|
|
2017
|
||
Sales
|
4,139
|
|
|
4,312
|
|
Purchases
|
3,375
|
|
|
4,131
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
Commodity contracts
|
$
|
—
|
|
|
$
|
3,594
|
|
|
$
|
—
|
|
|
$
|
1,368
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Commodity contracts
|
$
|
(3,136
|
)
|
|
$
|
4,661
|
|
5.
|
INCOME TAXES
|
6.
|
LONG-TERM DEBT
|
|
Interest rate at March 31, 2018
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Senior unsecured notes due 2022
|
5.625%
|
|
400,000
|
|
|
400,000
|
|
||
Senior unsecured notes due 2023
|
5.625%
|
|
350,000
|
|
|
350,000
|
|
||
Senior unsecured notes due 2025
|
6.375%
|
|
325,000
|
|
|
325,000
|
|
||
Senior unsecured notes due 2026
|
7.250%
|
|
300,000
|
|
|
300,000
|
|
||
SemGroup $1.0 billion corporate revolving credit facility
(1)
|
|
|
|
|
|
|
|
||
Eurodollar borrowings
|
|
|
—
|
|
|
131,000
|
|
||
HFOTCO acquisition final payment
|
8.000%
|
|
578,441
|
|
|
565,868
|
|
||
HFOTCO term loan B
(2)
|
5.800%
|
|
530,750
|
|
|
532,125
|
|
||
HFOTCO tax exempt notes payable due 2050
|
2.816%
|
|
225,000
|
|
|
225,000
|
|
||
HFOTCO $75 million revolving credit facility
(3)
|
5.403%
|
|
60,000
|
|
|
60,000
|
|
||
Capital leases
|
|
|
27
|
|
|
25
|
|
||
Unamortized premium (discount) and debt issuance costs, net
|
|
|
(29,734
|
)
|
|
(30,398
|
)
|
||
Total long-term debt, net
|
|
|
2,739,484
|
|
|
2,858,620
|
|
6.
|
LONG-TERM DEBT,
Continued
|
Less: current portion of long-term debt
|
|
|
5,527
|
|
|
5,525
|
|
||
Noncurrent portion of long-term debt, net
|
|
|
$
|
2,733,957
|
|
|
$
|
2,853,095
|
|
(1)
|
SemGroup
$1.0 billion
corporate revolving credit facility matures on March 15, 2021.
|
(2)
|
HFOTCO term loan B is due in quarterly installments of
$1.4 million
with a final payment due on August 19, 2021.
|
(3)
|
HFOTCO
$75 million
revolving credit facility matures on August 19, 2019.
|
SemGroup $1.0 billion revolving credit facility
|
2.25%
|
$
|
39,385
|
|
Secured bi-lateral
(1)
|
1.75%
|
$
|
55,409
|
|
7.
|
COMMITMENTS AND CONTINGENCIES
|
7.
|
COMMITMENTS AND CONTINGENCIES,
Continued
|
|
Volume
(Barrels)
|
|
Value
|
|||
Fixed price purchases
|
1,360
|
|
|
$
|
85,555
|
|
Fixed price sales
|
1,590
|
|
|
$
|
99,470
|
|
Floating price purchases
|
8,366
|
|
|
$
|
531,648
|
|
Floating price sales
|
10,884
|
|
|
$
|
567,025
|
|
7.
|
COMMITMENTS AND CONTINGENCIES,
Continued
|
For year ending:
|
|
||
December 31, 2018
|
$
|
7,950
|
|
December 31, 2019
|
9,567
|
|
|
December 31, 2020
|
8,864
|
|
|
December 31, 2021
|
7,175
|
|
|
December 31, 2022
|
6,753
|
|
|
Thereafter
|
2,791
|
|
|
Total expected future payments
|
$
|
43,100
|
|
For year ending:
|
|
||
December 31, 2018
|
$
|
16,214
|
|
December 31, 2019
|
21,865
|
|
|
December 31, 2020
|
19,770
|
|
|
December 31, 2021
|
12,976
|
|
|
December 31, 2022
|
13,231
|
|
|
Thereafter
|
20,312
|
|
|
Total expected future payments
|
$
|
104,368
|
|
8.
|
EQUITY
|
|
Common
Stock
|
Additional
Paid-in
Capital
|
Treasury
Stock
|
Accumulated
Deficit
|
Accumulated
Other
Comprehensive
Loss
|
Total
Owners’
Equity
|
||||||||||||
Balance at December 31, 2017
|
$
|
786
|
|
$
|
1,770,117
|
|
$
|
(8,031
|
)
|
$
|
(50,706
|
)
|
$
|
(53,801
|
)
|
$
|
1,658,365
|
|
Adoption of ASC 606
|
—
|
|
—
|
|
—
|
|
11,513
|
|
—
|
|
11,513
|
|
||||||
Net loss
|
—
|
|
—
|
|
—
|
|
(33,035
|
)
|
—
|
|
(33,035
|
)
|
||||||
Other comprehensive income, net of income taxes
|
—
|
|
—
|
|
—
|
|
—
|
|
18,171
|
|
18,171
|
|
||||||
Dividends paid
|
—
|
|
(37,230
|
)
|
—
|
|
—
|
|
—
|
|
(37,230
|
)
|
||||||
Unvested dividend equivalent rights
|
—
|
|
53
|
|
—
|
|
—
|
|
—
|
|
53
|
|
||||||
Non-cash equity compensation
|
—
|
|
2,149
|
|
—
|
|
—
|
|
—
|
|
2,149
|
|
||||||
Issuance of common stock under compensation plans
|
1
|
|
557
|
|
—
|
|
—
|
|
—
|
|
558
|
|
||||||
Retirement of treasury stock
|
(2
|
)
|
—
|
|
8,031
|
|
(8,029
|
)
|
—
|
|
—
|
|
||||||
Repurchase of common stock
|
—
|
|
—
|
|
(381
|
)
|
—
|
|
—
|
|
(381
|
)
|
||||||
Balance at March 31, 2018
|
$
|
785
|
|
$
|
1,735,646
|
|
$
|
(381
|
)
|
$
|
(80,257
|
)
|
$
|
(35,630
|
)
|
$
|
1,620,163
|
|
8
|
EQUITY,
Continued
|
|
Currency
Translation
|
|
Employee
Benefit
Plans
|
|
Total
|
||||||
Balance at December 31, 2017
|
$
|
(51,014
|
)
|
|
$
|
(2,787
|
)
|
|
$
|
(53,801
|
)
|
Currency translation adjustment, net of income tax benefit of $2,950
|
(9,137
|
)
|
|
—
|
|
|
(9,137
|
)
|
|||
Currency translation adjustment reclassified to gain on disposal, net of income tax expense of $8,818
|
27,305
|
|
|
—
|
|
|
27,305
|
|
|||
Changes related to benefit plans, net of income tax expense of $1
|
—
|
|
|
3
|
|
|
3
|
|
|||
Balance at March 31, 2018
|
$
|
(32,846
|
)
|
|
$
|
(2,784
|
)
|
|
$
|
(35,630
|
)
|
Quarter Ending
|
|
Dividend Per Share
|
|
Date of Record
|
|
Date Paid
|
||
March 31, 2017
|
|
$
|
0.45
|
|
|
March 7, 2017
|
|
March 17, 2017
|
June 30, 2017
|
|
$
|
0.45
|
|
|
May 15, 2017
|
|
May 26, 2017
|
September 30, 2017
|
|
$
|
0.45
|
|
|
August 18, 2017
|
|
August 28, 2017
|
December 31, 2107
|
|
$
|
0.45
|
|
|
November 20, 2017
|
|
December 1, 2017
|
|
|
|
|
|
|
|
||
March 31, 2018
|
|
$
|
0.4725
|
|
|
March 9, 2018
|
|
March 19, 2018
|
June 30, 2018
|
|
$
|
0.4725
|
|
|
May 16, 2018
|
|
May 25, 2018
|
9.
|
REDEEMABLE PREFERRED STOCK
|
10.
|
REVENUE FROM CONTRACTS WITH CUSTOMERS
|
10.
|
REVENUE FROM CONTRACTS WITH CUSTOMERS,
Continued
|
10.
|
REVENUE FROM CONTRACTS WITH CUSTOMERS,
Continued
|
10.
|
REVENUE FROM CONTRACTS WITH CUSTOMERS,
Continued
|
Product sales
|
31,319
|
|
|
32,573
|
|
||
Storage fees
|
7,104
|
|
|
5,870
|
|
||
Service fees
|
2,855
|
|
|
2,022
|
|
||
Intersegment eliminations
|
(14,859
|
)
|
|
(12,971
|
)
|
||
|
|
|
|
||||
Total revenue
|
$
|
661,609
|
|
|
$
|
456,100
|
|
|
2018
|
2019
|
2020
|
2021
|
2022
|
Thereafter
|
||||||||||||
Expected timing of revenue recognized for remaining performance obligations
|
$
|
217,031
|
|
$
|
224,065
|
|
$
|
179,824
|
|
$
|
153,794
|
|
$
|
151,699
|
|
$
|
1,835,912
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Noncurrent receivables
|
$
|
8,309
|
|
|
$
|
—
|
|
10.
|
REVENUE FROM CONTRACTS WITH CUSTOMERS,
Continued
|
11.
|
SEGMENTS
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Revenues:
|
|
|
|
||||
Crude Transportation
|
|
|
|
||||
External
|
$
|
26,068
|
|
|
$
|
13,979
|
|
Intersegment
|
8,208
|
|
|
6,554
|
|
||
Crude Facilities
|
|
|
|
||||
External
|
9,284
|
|
|
9,635
|
|
||
Intersegment
|
2,993
|
|
|
2,506
|
|
||
Crude Supply and Logistics
|
|
|
|
||||
External
|
443,399
|
|
|
297,471
|
|
||
HFOTCO
|
|
|
|
||||
External
|
44,198
|
|
|
—
|
|
||
SemGas
|
|
|
|
||||
External
|
52,237
|
|
|
57,752
|
|
||
Intersegment
|
3,658
|
|
|
3,911
|
|
||
SemCAMS
|
|
|
|
||||
External
|
45,145
|
|
|
36,798
|
|
||
Corporate and Other
|
|
|
|
||||
External
|
41,278
|
|
|
40,465
|
|
11.
|
SEGMENTS
, Continued
|
Intersegment
|
(14,859
|
)
|
|
(12,971
|
)
|
||
Total Revenues
|
$
|
661,609
|
|
|
$
|
456,100
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Earnings from equity method investments:
|
|
|
|
||||
Crude Transportation
|
$
|
12,605
|
|
|
$
|
17,088
|
|
Corporate and Other
|
9
|
|
|
3
|
|
||
Total earnings from equity method investments
|
$
|
12,614
|
|
|
$
|
17,091
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Depreciation and amortization:
|
|
|
|
||||
Crude Transportation
|
$
|
12,476
|
|
|
$
|
5,927
|
|
Crude Facilities
|
2,132
|
|
|
1,944
|
|
||
Crude Supply and Logistics
|
193
|
|
|
62
|
|
||
HFOTCO
|
19,306
|
|
|
—
|
|
||
SemGas
|
10,449
|
|
|
8,927
|
|
||
SemCAMS
|
5,238
|
|
|
4,496
|
|
||
Corporate and Other
|
742
|
|
|
3,243
|
|
||
Total depreciation and amortization
|
$
|
50,536
|
|
|
$
|
24,599
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Income tax expense (benefit):
|
|
|
|
||||
HFOTCO
|
$
|
209
|
|
|
$
|
—
|
|
SemCAMS
|
2,970
|
|
|
1,424
|
|
||
Corporate and Other
(1)
|
19,904
|
|
|
(1,329
|
)
|
||
Total income tax expense (benefit)
|
$
|
23,083
|
|
|
$
|
95
|
|
(1) Corporate and Other includes the impact of intra-period tax allocation.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Segment profit:
|
|
|
|
||||
Crude Transportation
|
$
|
34,310
|
|
|
$
|
28,251
|
|
Crude Facilities
|
9,341
|
|
|
9,564
|
|
||
Crude Supply and Logistics
|
(6,583
|
)
|
|
(2,428
|
)
|
||
HFOTCO
|
30,988
|
|
|
—
|
|
||
SemGas
|
14,277
|
|
|
18,227
|
|
||
SemCAMS
|
22,113
|
|
|
16,865
|
|
||
Corporate and Other
|
10,963
|
|
|
8,367
|
|
||
Total segment profit
|
$
|
115,409
|
|
|
$
|
78,846
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Reconciliation of segment profit to net loss:
|
|
|
|
||||
Total segment profit
|
$
|
115,409
|
|
|
$
|
78,846
|
|
Less:
|
|
|
|
||||
Adjustment to reflect equity earnings on an EBITDA basis
|
4,883
|
|
|
6,709
|
|
||
Net unrealized loss related to commodity derivative instruments
|
2,226
|
|
|
27
|
|
||
General and administrative expense
|
26,477
|
|
|
21,712
|
|
||
Depreciation and amortization
|
50,536
|
|
|
24,599
|
|
||
Loss on disposal or impairment, net
|
(3,566
|
)
|
|
2,410
|
|
||
Interest expense
|
42,461
|
|
|
13,867
|
|
||
Loss on early extinguishment of debt
|
—
|
|
|
19,922
|
|
||
Foreign currency transaction loss
|
3,294
|
|
|
—
|
|
||
Other income, net
|
(950
|
)
|
|
(218
|
)
|
||
Income tax expense
|
23,083
|
|
|
95
|
|
||
Net loss
|
$
|
(33,035
|
)
|
|
$
|
(10,277
|
)
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Total assets (excluding intersegment receivables):
|
|
|
|
||||
Crude Transportation
|
$
|
1,032,730
|
|
|
$
|
1,039,399
|
|
Crude Facilities
|
148,520
|
|
|
153,953
|
|
||
Crude Supply and Logistics
|
545,551
|
|
|
674,684
|
|
||
HFOTCO
|
2,011,823
|
|
|
2,003,298
|
|
||
SemGas
|
720,827
|
|
|
714,777
|
|
||
SemCAMS
|
561,857
|
|
|
518,900
|
|
||
Corporate and Other
|
418,017
|
|
|
271,806
|
|
||
Total assets
|
$
|
5,439,325
|
|
|
$
|
5,376,817
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Equity investments:
|
|
|
|
||||
Crude Transportation
|
$
|
260,126
|
|
|
$
|
266,362
|
|
Corporate and Other
|
18,928
|
|
|
18,919
|
|
||
Total equity investments
|
$
|
279,054
|
|
|
$
|
285,281
|
|
12.
|
EARNINGS PER SHARE
|
|
12.
|
EARNINGS PER SHARE,
Continued
|
|
Three Months Ended March 31, 2018
|
|
Three Months Ended March 31, 2017
|
||||
Net loss
|
$
|
(33,035
|
)
|
|
$
|
(10,277
|
)
|
Less: cumulative preferred stock dividends
|
4,832
|
|
|
—
|
|
||
Net loss attributable to common shareholders
|
$
|
(37,867
|
)
|
|
$
|
(10,277
|
)
|
Weighted average common stock outstanding
|
78,198
|
|
|
65,692
|
|
||
Basic loss per share
|
$
|
(0.48
|
)
|
|
$
|
(0.16
|
)
|
|
|
Three Months Ended March 31, 2018
|
|
Three Months Ended March 31, 2017
|
||||
Net loss
|
$
|
(33,035
|
)
|
|
$
|
(10,277
|
)
|
Less: cumulative preferred stock dividends
|
4,832
|
|
|
—
|
|
||
Net loss attributable to common shareholders
|
$
|
(37,867
|
)
|
|
$
|
(10,277
|
)
|
Weighted average common stock outstanding
|
78,198
|
|
|
65,692
|
|
||
Effect of dilutive securities
|
—
|
|
|
—
|
|
||
Diluted weighted average common stock outstanding
|
78,198
|
|
|
65,692
|
|
||
Diluted loss per share
|
$
|
(0.48
|
)
|
|
$
|
(0.16
|
)
|
13.
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Decrease (increase) in restricted cash
|
$
|
33
|
|
|
$
|
28
|
|
Decrease (increase) in accounts receivable
|
122,829
|
|
|
(55,150
|
)
|
||
Decrease (increase) in receivable from affiliates
|
754
|
|
|
12,529
|
|
||
Decrease (increase) in inventories
|
25,220
|
|
|
(2,441
|
)
|
||
Decrease (increase) in other current assets
|
(3,748
|
)
|
|
857
|
|
||
Decrease (increase) in other assets
|
805
|
|
|
(875
|
)
|
||
Increase (decrease) in accounts payable and accrued liabilities
|
(104,888
|
)
|
|
40,485
|
|
||
Increase (decrease) in payable to affiliates
|
(4,650
|
)
|
|
(9,422
|
)
|
||
Increase (decrease) in other noncurrent liabilities
|
16,142
|
|
|
1,041
|
|
||
|
$
|
52,497
|
|
|
$
|
(12,948
|
)
|
13.
|
SUPPLEMENTAL CASH FLOW INFORMATION,
Continued
|
14.
|
RELATED PARTY TRANSACTIONS
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
NGL Energy
|
|
|
|
||||
Revenues
|
$
|
6,180
|
|
|
$
|
22,204
|
|
Purchases
|
$
|
236
|
|
|
$
|
15,584
|
|
|
|
|
|
||||
White Cliffs
|
|
|
|
||||
Crude oil revenues
|
$
|
—
|
|
|
$
|
436
|
|
Storage revenues
|
$
|
1,088
|
|
|
$
|
1,088
|
|
Transportation fees
|
$
|
3,623
|
|
|
$
|
2,655
|
|
Management fees
|
$
|
133
|
|
|
$
|
127
|
|
Crude oil purchases
|
$
|
895
|
|
|
$
|
4,003
|
|
15.
|
CONDENSED CONSOLIDATING GUARANTOR FINANCIAL STATEMENTS
|
15.
|
CONDENSED CONSOLIDATING GUARANTOR FINANCIAL STATEMENTS
, Continued
|
15.
|
CONDENSED CONSOLIDATING GUARANTOR FINANCIAL STATEMENTS
, Continued
|
|
|
March 31, 2018
|
||||||||||||||||||
|
|
Parent
|
|
Guarantors
|
|
Non-guarantors
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
233,282
|
|
|
$
|
—
|
|
|
$
|
57,079
|
|
|
$
|
(4,863
|
)
|
|
$
|
285,498
|
|
Accounts receivable
|
|
57
|
|
|
456,180
|
|
|
79,468
|
|
|
—
|
|
|
535,705
|
|
|||||
Receivable from affiliates
|
|
177
|
|
|
84
|
|
|
676
|
|
|
—
|
|
|
937
|
|
|||||
Current assets held for sale
|
|
—
|
|
|
—
|
|
|
2,501
|
|
|
—
|
|
|
2,501
|
|
|||||
Inventories
|
|
—
|
|
|
81,542
|
|
|
—
|
|
|
—
|
|
|
81,542
|
|
|||||
Other current assets
|
|
4,407
|
|
|
6,423
|
|
|
6,511
|
|
|
—
|
|
|
17,341
|
|
|||||
Total current assets
|
|
237,923
|
|
|
544,229
|
|
|
146,235
|
|
|
(4,863
|
)
|
|
923,524
|
|
|||||
Property, plant and equipment, net
|
|
7,774
|
|
|
1,013,976
|
|
|
2,358,824
|
|
|
—
|
|
|
3,380,574
|
|
|||||
Equity method investments
|
|
3,069,175
|
|
|
873,864
|
|
|
—
|
|
|
(3,663,985
|
)
|
|
279,054
|
|
|||||
Goodwill
|
|
—
|
|
|
—
|
|
|
257,302
|
|
|
—
|
|
|
257,302
|
|
|||||
Other intangible assets
|
|
9
|
|
|
125,733
|
|
|
264,500
|
|
|
—
|
|
|
390,242
|
|
|||||
Other noncurrent assets, net
|
|
47,943
|
|
|
2,866
|
|
|
92,036
|
|
|
—
|
|
|
142,845
|
|
|||||
Noncurrent assets held for sale
|
|
—
|
|
|
—
|
|
|
65,784
|
|
|
—
|
|
|
65,784
|
|
|||||
Total assets
|
|
$
|
3,362,824
|
|
|
$
|
2,560,668
|
|
|
$
|
3,184,681
|
|
|
$
|
(3,668,848
|
)
|
|
$
|
5,439,325
|
|
LIABILITIES, PREFERRED STOCK AND OWNERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
|
$
|
1,263
|
|
|
$
|
436,443
|
|
|
$
|
54,801
|
|
|
$
|
—
|
|
|
$
|
492,507
|
|
Payable to affiliates
|
|
2
|
|
|
2,319
|
|
|
—
|
|
|
—
|
|
|
2,321
|
|
|||||
Accrued liabilities
|
|
24,385
|
|
|
22,877
|
|
|
53,111
|
|
|
—
|
|
|
100,373
|
|
|||||
Current liabilities held for sale
|
|
—
|
|
|
—
|
|
|
2,434
|
|
|
—
|
|
|
2,434
|
|
|||||
Other current liabilities
|
|
14,495
|
|
|
7,562
|
|
|
10,966
|
|
|
—
|
|
|
33,023
|
|
|||||
Total current liabilities
|
|
40,145
|
|
|
469,201
|
|
|
121,312
|
|
|
—
|
|
|
630,658
|
|
|||||
Long-term debt
|
|
1,344,164
|
|
|
6,947
|
|
|
1,406,293
|
|
|
(23,447
|
)
|
|
2,733,957
|
|
|||||
Deferred income taxes
|
|
13,704
|
|
|
—
|
|
|
46,847
|
|
|
—
|
|
|
60,551
|
|
|||||
Other noncurrent liabilities
|
|
2,294
|
|
|
—
|
|
|
35,090
|
|
|
—
|
|
|
37,384
|
|
|||||
Noncurrent liabilities held for sale
|
|
—
|
|
|
—
|
|
|
14,258
|
|
|
—
|
|
|
14,258
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Preferred stock
|
|
342,354
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
342,354
|
|
|||||
Total owners’ equity
|
|
1,620,163
|
|
|
2,084,520
|
|
|
1,560,881
|
|
|
(3,645,401
|
)
|
|
1,620,163
|
|
|||||
Total liabilities, preferred stock and owners’ equity
|
|
$
|
3,362,824
|
|
|
$
|
2,560,668
|
|
|
$
|
3,184,681
|
|
|
$
|
(3,668,848
|
)
|
|
$
|
5,439,325
|
|
15.
|
CONDENSED CONSOLIDATING GUARANTOR FINANCIAL STATEMENTS
, Continued
|
|
|
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, net
|
|
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
|
|
15.
|
CONDENSED CONSOLIDATING GUARANTOR FINANCIAL STATEMENTS
, Continued
|
|
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-guarantors
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Product
|
$
|
—
|
|
|
$
|
479,449
|
|
|
$
|
31,319
|
|
|
$
|
—
|
|
|
$
|
510,768
|
|
Service
|
—
|
|
|
37,510
|
|
|
94,385
|
|
|
—
|
|
|
131,895
|
|
|||||
Lease
|
—
|
|
|
—
|
|
|
4,329
|
|
|
—
|
|
|
4,329
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
14,617
|
|
|
—
|
|
|
14,617
|
|
|||||
Total revenues
|
—
|
|
|
516,959
|
|
|
144,650
|
|
|
—
|
|
|
661,609
|
|
|||||
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Costs of products sold, exclusive of depreciation and amortization shown below
|
—
|
|
|
469,998
|
|
|
26,134
|
|
|
—
|
|
|
496,132
|
|
|||||
Operating
|
—
|
|
|
27,931
|
|
|
41,860
|
|
|
—
|
|
|
69,791
|
|
|||||
General and administrative
|
6,486
|
|
|
5,990
|
|
|
14,001
|
|
|
—
|
|
|
26,477
|
|
|||||
Depreciation and amortization
|
724
|
|
|
18,731
|
|
|
31,081
|
|
|
—
|
|
|
50,536
|
|
|||||
Loss (gain) on disposal or impairment, net
|
49,288
|
|
|
(78,729
|
)
|
|
25,875
|
|
|
—
|
|
|
(3,566
|
)
|
|||||
Total expenses
|
56,498
|
|
|
443,921
|
|
|
138,951
|
|
|
—
|
|
|
639,370
|
|
|||||
Earnings from equity method investments
|
59,446
|
|
|
557
|
|
|
—
|
|
|
(47,389
|
)
|
|
12,614
|
|
|||||
Operating income
|
2,948
|
|
|
73,595
|
|
|
5,699
|
|
|
(47,389
|
)
|
|
34,853
|
|
|||||
Other expenses (income), net:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
13,379
|
|
|
10,992
|
|
|
18,330
|
|
|
(240
|
)
|
|
42,461
|
|
|||||
Foreign currency transaction loss (gain)
|
4,403
|
|
|
(197
|
)
|
|
(912
|
)
|
|
—
|
|
|
3,294
|
|
|||||
Other income, net
|
(735
|
)
|
|
(5
|
)
|
|
(450
|
)
|
|
240
|
|
|
(950
|
)
|
|||||
Total other expenses, net
|
17,047
|
|
|
10,790
|
|
|
16,968
|
|
|
—
|
|
|
44,805
|
|
|||||
Income (loss) before income taxes
|
(14,099
|
)
|
|
62,805
|
|
|
(11,269
|
)
|
|
(47,389
|
)
|
|
(9,952
|
)
|
|||||
Income tax expense
|
18,936
|
|
|
—
|
|
|
4,147
|
|
|
—
|
|
|
23,083
|
|
|||||
Net income (loss)
|
(33,035
|
)
|
|
62,805
|
|
|
(15,416
|
)
|
|
(47,389
|
)
|
|
(33,035
|
)
|
|||||
Other comprehensive income (loss), net of income taxes
|
(5,612
|
)
|
|
(256
|
)
|
|
24,039
|
|
|
—
|
|
|
18,171
|
|
|||||
Comprehensive income (loss)
|
$
|
(38,647
|
)
|
|
$
|
62,549
|
|
|
$
|
8,623
|
|
|
$
|
(47,389
|
)
|
|
$
|
(14,864
|
)
|
15.
|
CONDENSED CONSOLIDATING GUARANTOR FINANCIAL STATEMENTS
, Continued
|
|
Three Months Ended March 31, 2017
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-guarantors
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Product
|
$
|
—
|
|
|
$
|
340,788
|
|
|
$
|
32,573
|
|
|
$
|
—
|
|
|
$
|
373,361
|
|
Service
|
—
|
|
|
38,050
|
|
|
30,143
|
|
|
—
|
|
|
68,193
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
14,546
|
|
|
—
|
|
|
14,546
|
|
|||||
Total revenues
|
—
|
|
|
378,838
|
|
|
77,262
|
|
|
—
|
|
|
456,100
|
|
|||||
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Costs of products sold, exclusive of depreciation and amortization shown below
|
—
|
|
|
321,657
|
|
|
27,341
|
|
|
—
|
|
|
348,998
|
|
|||||
Operating
|
—
|
|
|
28,120
|
|
|
23,963
|
|
|
—
|
|
|
52,083
|
|
|||||
General and administrative
|
5,930
|
|
|
6,930
|
|
|
8,852
|
|
|
—
|
|
|
21,712
|
|
|||||
Depreciation and amortization
|
473
|
|
|
16,830
|
|
|
7,296
|
|
|
—
|
|
|
24,599
|
|
|||||
Loss on disposal or impairment, net
|
—
|
|
|
1,982
|
|
|
428
|
|
|
—
|
|
|
2,410
|
|
|||||
Total expenses
|
6,403
|
|
|
375,519
|
|
|
67,880
|
|
|
—
|
|
|
449,802
|
|
|||||
Earnings from equity method investments
|
19,187
|
|
|
18,566
|
|
|
—
|
|
|
(20,662
|
)
|
|
17,091
|
|
|||||
Operating income
|
12,784
|
|
|
21,885
|
|
|
9,382
|
|
|
(20,662
|
)
|
|
23,389
|
|
|||||
Other expenses (income), net:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense (income)
|
5,866
|
|
|
8,820
|
|
|
(626
|
)
|
|
(193
|
)
|
|
13,867
|
|
|||||
Loss on early extinguishment of debt
|
19,922
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,922
|
|
|||||
Other income, net
|
(197
|
)
|
|
(2
|
)
|
|
(212
|
)
|
|
193
|
|
|
(218
|
)
|
|||||
Total other expense (income), net
|
25,591
|
|
|
8,818
|
|
|
(838
|
)
|
|
—
|
|
|
33,571
|
|
|||||
Income (loss) before income taxes
|
(12,807
|
)
|
|
13,067
|
|
|
10,220
|
|
|
(20,662
|
)
|
|
(10,182
|
)
|
|||||
Income tax expense (benefit)
|
(2,530
|
)
|
|
—
|
|
|
2,625
|
|
|
—
|
|
|
95
|
|
|||||
Net income (loss)
|
(10,277
|
)
|
|
13,067
|
|
|
7,595
|
|
|
(20,662
|
)
|
|
(10,277
|
)
|
|||||
Other comprehensive income (loss), net of income taxes
|
(3,581
|
)
|
|
(74
|
)
|
|
9,688
|
|
|
—
|
|
|
6,033
|
|
|||||
Comprehensive income (loss)
|
$
|
(13,858
|
)
|
|
$
|
12,993
|
|
|
$
|
17,283
|
|
|
$
|
(20,662
|
)
|
|
$
|
(4,244
|
)
|
15.
|
CONDENSED CONSOLIDATING GUARANTOR FINANCIAL STATEMENTS
, Continued
|
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||
|
|
Parent
|
|
Guarantors
|
|
Non-guarantors
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||
Net cash provided by (used in) operating activities
|
|
$
|
(31,162
|
)
|
|
$
|
50,421
|
|
|
$
|
64,321
|
|
|
$
|
—
|
|
|
$
|
83,580
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
|
(436
|
)
|
|
(29,872
|
)
|
|
(101,476
|
)
|
|
—
|
|
|
(131,784
|
)
|
|||||
Proceeds from sale of long-lived assets
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
|||||
Proceeds from the sale of Mexican asphalt business, net
|
|
78,729
|
|
|
—
|
|
|
(14,899
|
)
|
|
—
|
|
|
63,830
|
|
|||||
Contributions to equity method investments
|
|
—
|
|
|
(309
|
)
|
|
—
|
|
|
—
|
|
|
(309
|
)
|
|||||
Distributions in excess of equity in earnings of affiliates
|
|
—
|
|
|
6,545
|
|
|
—
|
|
|
—
|
|
|
6,545
|
|
|||||
Net cash provided (used in) investing activities
|
|
78,293
|
|
|
(23,636
|
)
|
|
(116,359
|
)
|
|
—
|
|
|
(61,702
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt issuance costs
|
|
(459
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(459
|
)
|
|||||
Principal payments on credit facilities and other obligations
|
|
(132,863
|
)
|
|
(8
|
)
|
|
(1,375
|
)
|
|
—
|
|
|
(134,246
|
)
|
|||||
Proceeds from issuance preferred stock, net of offering costs
|
|
342,354
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
342,354
|
|
|||||
Repurchase of common stock for payment of statutory taxes due on equity-based compensation
|
|
(381
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(381
|
)
|
|||||
Dividends paid
|
|
(37,230
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(37,230
|
)
|
|||||
Proceeds from issuance of common stock under employee stock purchase plan
|
|
24
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|||||
Intercompany borrowings (advances), net
|
|
(17,751
|
)
|
|
(26,777
|
)
|
|
40,761
|
|
|
3,767
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
|
153,694
|
|
|
(26,785
|
)
|
|
39,386
|
|
|
3,767
|
|
|
170,062
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
—
|
|
|
(141
|
)
|
|
—
|
|
|
(141
|
)
|
|||||
Change in cash and cash equivalents
|
|
200,825
|
|
|
—
|
|
|
(12,793
|
)
|
|
3,767
|
|
|
191,799
|
|
|||||
Cash and cash equivalents at beginning of period
|
|
32,457
|
|
|
—
|
|
|
69,872
|
|
|
(8,630
|
)
|
|
93,699
|
|
|||||
Cash and cash equivalents at end of period
|
|
$
|
233,282
|
|
|
$
|
—
|
|
|
$
|
57,079
|
|
|
$
|
(4,863
|
)
|
|
$
|
285,498
|
|
15.
|
CONDENSED CONSOLIDATING GUARANTOR FINANCIAL STATEMENTS
, Continued
|
|
|
Three Months Ended March 31, 2017
|
||||||||||||||||||
|
|
Parent
|
|
Guarantors
|
|
Non-guarantors
|
|
Consolidating Adjustments
|
|
Consolidated
|
||||||||||
Net cash provided by (used in) operating activities
|
|
$
|
(11,492
|
)
|
|
$
|
34,314
|
|
|
$
|
5,187
|
|
|
$
|
—
|
|
|
$
|
28,009
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
|
(1,863
|
)
|
|
(13,384
|
)
|
|
(77,001
|
)
|
|
—
|
|
|
(92,248
|
)
|
|||||
Proceeds from sale of long-lived assets
|
|
—
|
|
|
15,191
|
|
|
309
|
|
|
—
|
|
|
15,500
|
|
|||||
Contributions to equity method investments
|
|
—
|
|
|
(2,490
|
)
|
|
—
|
|
|
—
|
|
|
(2,490
|
)
|
|||||
Distributions in excess of equity in earnings of affiliates
|
|
—
|
|
|
4,392
|
|
|
—
|
|
|
—
|
|
|
4,392
|
|
|||||
Net cash provided by (used in) investing activities
|
|
(1,863
|
)
|
|
3,709
|
|
|
(76,692
|
)
|
|
—
|
|
|
(74,846
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt issuance costs
|
|
(4,632
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,632
|
)
|
|||||
Borrowings on credit facilities and issuance of senior notes, net of discount
|
|
437,018
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
437,018
|
|
|||||
Principal payments on credit facilities and other obligations
|
|
(348,272
|
)
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(348,278
|
)
|
|||||
Debt extinguishment costs
|
|
(16,293
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,293
|
)
|
|||||
Repurchase of common stock for payment of statutory taxes due on equity-based compensation
|
|
(1,047
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,047
|
)
|
|||||
Dividends paid
|
|
(29,770
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,770
|
)
|
|||||
Proceeds from issuance of common stock under employee stock purchase plan
|
|
231
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
231
|
|
|||||
Intercompany borrowing (advances), net
|
|
(34,668
|
)
|
|
(38,017
|
)
|
|
72,548
|
|
|
137
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
|
2,567
|
|
|
(38,023
|
)
|
|
72,548
|
|
|
137
|
|
|
37,229
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
—
|
|
|
1,248
|
|
|
—
|
|
|
1,248
|
|
|||||
Change in cash and cash equivalents
|
|
(10,788
|
)
|
|
—
|
|
|
2,291
|
|
|
137
|
|
|
(8,360
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
|
19,002
|
|
|
—
|
|
|
59,796
|
|
|
(4,582
|
)
|
|
74,216
|
|
|||||
Cash and cash equivalents at end of period
|
|
$
|
8,214
|
|
|
$
|
—
|
|
|
$
|
62,087
|
|
|
$
|
(4,445
|
)
|
|
$
|
65,856
|
|
•
|
Crude Transportation operates crude oil pipelines and truck transportation businesses in the U.S. Crude Transportation’s assets include:
|
•
|
a
450
-mile crude oil gathering and transportation pipeline system with over
560,000
barrels of associated storage capacity in Kansas and northern Oklahoma that is connected to several third-party pipelines and refineries;
|
•
|
the Wattenberg Oil Trunkline (“WOT”), a
75
-mile, 12-inch diameter crude oil gathering pipeline system that transports crude oil from production facilities in the DJ Basin to the pipeline owned by White Cliffs Pipeline, L.L.C. (“White Cliffs”). The WOT has a capacity of 60,000 barrels per day as well as
360,000
barrels of operational storage;
|
•
|
a crude oil trucking fleet of approximately
195
transport trucks and approximately
215
trailers;
|
•
|
Maurepas Pipeline, consisting of three pipelines, with an approximate total of 106 miles, that service refineries in the Gulf Coast region (the “Maurepas Pipeline”); and
|
•
|
a
51%
ownership interest in White Cliffs, which owns two parallel 527-mile 12-inch common carrier, crude oil pipelines, that transport crude oil from Platteville, Colorado to Cushing, Oklahoma (the “White Cliffs Pipeline”) that we operate.
|
•
|
Crude Facilities operates crude oil storage and terminal businesses in the U.S. Crude Facilities’ assets include:
|
•
|
approximately
7.6 million
barrels of crude oil storage capacity in Cushing, Oklahoma, of which approximately
6.0 million
barrels were leased to customers and the remaining barrels were available for use in crude oil operations and marketing activities; and
|
•
|
a
30
-lane crude oil truck unloading facility with
350,000
barrels of associated storage capacity in Platteville, Colorado which connects to the origination point of the White Cliffs Pipeline.
|
•
|
Crude Supply and Logistics operates a crude oil marketing business which utilizes our Crude Transportation and Crude Facilities assets for marketing purposes. Additionally, Crude Supply and Logistics’ assets include approximately 61,800 barrels of crude oil storage capacity in Trenton and Stanley, North Dakota.
|
•
|
HFOTCO operates a large terminal facility located on the U.S. Gulf Coast. HFOTCO’s assets include:
|
•
|
approximately 16.8 million barrels of product storage with crude pipeline connectivity to the local refining complex, deep water marine access and inbound crude receipt pipeline connectivity, as well as rail and truck loading and unloading capabilities; and
|
•
|
330 acres on the Houston Ship Channel.
|
•
|
SemGas, which provides natural gas gathering and processing services in the U.S. SemGas owns and operates gathering systems and four processing plants with
595
million cubic feet per day of capacity.
|
•
|
SemCAMS, which provides natural gas gathering and processing services in Alberta, Canada. SemCAMS owns working interests in, and operates, four natural gas processing plants with a combined operating capacity of
695
million cubic feet per day.
|
|
Three Months Ended March 31,
|
||||||
(in thousands)
|
2018
|
|
2017
|
||||
Revenue
|
$
|
661,609
|
|
|
$
|
456,100
|
|
Expenses:
|
|
|
|
||||
Costs of products sold, exclusive of depreciation and amortization shown below
|
496,132
|
|
|
348,998
|
|
||
Operating
|
69,791
|
|
|
52,083
|
|
||
General and administrative
|
26,477
|
|
|
21,712
|
|
||
Depreciation and amortization
|
50,536
|
|
|
24,599
|
|
||
Loss (gain) on disposal or impairment, net
|
(3,566
|
)
|
|
2,410
|
|
||
Total expenses
|
639,370
|
|
|
449,802
|
|
||
Earnings from equity method investments
|
12,614
|
|
|
17,091
|
|
||
Operating income
|
34,853
|
|
|
23,389
|
|
||
Other expenses (income), net:
|
|
|
|
||||
Interest expense
|
42,461
|
|
|
13,867
|
|
||
Loss on early extinguishment of debt
|
—
|
|
|
19,922
|
|
||
Foreign currency transaction loss
|
3,294
|
|
|
—
|
|
||
Other income, net
|
(950
|
)
|
|
(218
|
)
|
||
Total other expenses, net
|
44,805
|
|
|
33,571
|
|
||
Loss before income taxes
|
(9,952
|
)
|
|
(10,182
|
)
|
||
Income tax expense
|
23,083
|
|
|
95
|
|
||
Net loss
|
$
|
(33,035
|
)
|
|
$
|
(10,277
|
)
|
|
Three Months Ended March 31,
|
||||||
(in thousands)
|
2018
|
|
2017
|
||||
Revenue:
|
|
|
|
||||
Pipeline transportation
|
$
|
21,112
|
|
|
$
|
6,184
|
|
Truck transportation
|
13,164
|
|
|
14,349
|
|
||
Total revenue
|
34,276
|
|
|
20,533
|
|
||
Less:
|
|
|
|
||||
Operating expense
|
17,463
|
|
|
16,082
|
|
||
Plus:
|
|
|
|
||||
Earnings from equity method investments
|
12,605
|
|
|
17,088
|
|
||
Adjustments to reflect equity earnings on an EBITDA basis
|
4,892
|
|
|
6,712
|
|
||
Segment profit
|
$
|
34,310
|
|
|
$
|
28,251
|
|
|
Three Months Ended March 31,
|
||||||
(in thousands)
|
2018
|
|
2017
|
||||
Revenue:
|
|
|
|
||||
Storage fees
|
$
|
7,549
|
|
|
$
|
7,881
|
|
Service fees
|
4,728
|
|
|
4,260
|
|
||
Total revenue
|
12,277
|
|
|
12,141
|
|
||
Less:
|
|
|
|
||||
Operating expense
|
2,936
|
|
|
2,577
|
|
||
Segment profit
|
$
|
9,341
|
|
|
$
|
9,564
|
|
|
Three Months Ended March 31,
|
||||||
(in thousands)
|
2018
|
|
2017
|
||||
Revenue
|
$
|
443,399
|
|
|
$
|
297,471
|
|
Less:
|
|
|
|
||||
Costs of products sold, exclusive of depreciation and amortization shown below
|
450,934
|
|
|
298,485
|
|
||
Operating expense
|
1,274
|
|
|
1,441
|
|
||
Unrealized gain (loss) on commodity derivatives, net
|
(2,226
|
)
|
|
(27
|
)
|
||
Segment profit
|
$
|
(6,583
|
)
|
|
$
|
(2,428
|
)
|
|
Three Months Ended March 31,
|
||||||
(in thousands)
|
2018
|
|
2017
|
||||
Gross product revenue
|
$
|
1,210,188
|
|
|
$
|
1,110,561
|
|
Nonmonetary transaction adjustment
|
(764,563
|
)
|
|
(813,063
|
)
|
||
Unrealized loss on derivatives, net
|
(2,226
|
)
|
|
(27
|
)
|
||
Product revenue
|
$
|
443,399
|
|
|
$
|
297,471
|
|
|
Three Months Ended March 31,
|
||
(in thousands)
|
2018
|
||
Revenue:
|
|
||
Storage fees
|
$
|
32,102
|
|
Service fees
|
7,767
|
|
|
Lease revenue
|
4,329
|
|
|
Total revenue
|
44,198
|
|
|
Less:
|
|
||
Operating expense
|
13,210
|
|
|
Segment profit
|
$
|
30,988
|
|
|
Three Months Ended March 31,
|
||||||
(in thousands)
|
2018
|
|
2017
|
||||
Revenue:
|
|
|
|
||||
Product sales
|
$
|
39,708
|
|
|
$
|
47,227
|
|
Gathering and processing fees
|
16,187
|
|
|
14,436
|
|
||
Total revenue
|
55,895
|
|
|
61,663
|
|
||
Less:
|
|
|
|
||||
Costs of products sold, exclusive of depreciation and amortization shown below
|
33,923
|
|
|
36,143
|
|
||
Operating expense
|
7,695
|
|
|
7,293
|
|
||
Segment profit
|
$
|
14,277
|
|
|
$
|
18,227
|
|
|
Three Months Ended March 31,
|
||||||
(in thousands)
|
2018
|
|
2017
|
||||
Revenue
|
|
|
|
||||
Service fees
|
$
|
30,542
|
|
|
$
|
22,393
|
|
Other revenue
|
14,603
|
|
|
14,405
|
|
||
Total revenue
|
45,145
|
|
|
36,798
|
|
||
Expenses:
|
|
|
|
||||
Costs of products sold, exclusive of depreciation and amortization shown below
|
102
|
|
|
45
|
|
||
Operating expense
|
22,930
|
|
|
19,888
|
|
||
Segment profit
|
$
|
22,113
|
|
|
$
|
16,865
|
|
|
Three Months Ended March 31,
|
||||||
(in thousands)
|
2018
|
|
2017
|
||||
Revenue
|
|
|
|
||||
Product sales
|
$
|
31,319
|
|
|
$
|
32,573
|
|
Storage fees
|
7,104
|
|
|
5,870
|
|
||
Service fees
|
2,855
|
|
|
2,022
|
|
||
Intersegment eliminations
|
(14,859
|
)
|
|
(12,971
|
)
|
||
Total revenue
|
26,419
|
|
|
27,494
|
|
||
Less:
|
|
|
|
||||
Costs of products sold, exclusive of depreciation and amortization shown below
|
11,173
|
|
|
14,325
|
|
||
Operating expense
|
4,283
|
|
|
4,802
|
|
||
Plus:
|
|
|
|
||||
Earnings from equity method investments
|
9
|
|
|
3
|
|
||
Adjustments to reflect NGL Energy equity earnings on a cash basis
|
(9
|
)
|
|
(3
|
)
|
||
Segment profit
|
$
|
10,963
|
|
|
$
|
8,367
|
|
•
|
operating expenses, maintenance capital expenditures and cash dividends through existing cash and cash from operating activities;
|
•
|
expansion capital expenditures and any working capital deficits through cash on hand, borrowings under our credit facilities and the issuance of debt securities and equity securities;
|
•
|
acquisitions through cash on hand, borrowings under our credit facilities, the issuance of debt securities and equity securities and proceeds from the divestiture of assets or interests in assets; and
|
•
|
debt principal payments through cash from operating activities and refinancing when the credit facility becomes due.
|
|
Three Months Ended March 31,
|
||||||
(in thousands)
|
2018
|
|
2017
|
||||
Statement of cash flow data:
|
|
|
|
||||
Cash flows provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
83,580
|
|
|
$
|
28,009
|
|
Investing activities
|
(61,702
|
)
|
|
(74,846
|
)
|
||
Financing activities
|
170,062
|
|
|
37,229
|
|
||
Subtotal
|
191,940
|
|
|
(9,608
|
)
|
||
Effect of exchange rate on cash and cash equivalents
|
(141
|
)
|
|
1,248
|
|
||
Change in cash and cash equivalents
|
191,799
|
|
|
(8,360
|
)
|
||
Cash and cash equivalents at beginning of period
|
93,699
|
|
|
74,216
|
|
||
Cash and cash equivalents at end of period
|
$
|
285,498
|
|
|
$
|
65,856
|
|
|
Three Months Ended March 31,
|
||||||
(in thousands)
|
2018
|
|
2017
|
||||
Net loss
|
$
|
(33,035
|
)
|
|
$
|
(10,277
|
)
|
Non-cash expenses, net
|
64,118
|
|
|
51,234
|
|
||
Changes in operating assets and liabilities
|
52,497
|
|
|
(12,948
|
)
|
||
Net cash flows provided by operating activities
|
$
|
83,580
|
|
|
$
|
28,009
|
|
•
|
$25.9 million
in depreciation and amortization expense, primarily as a result of the acquisition of HFOTCO and completion of the Maurepas Pipeline;
|
•
|
$4.5 million
reduction in earnings from equity method investments due to lower White Cliffs earnings and the prior year divestiture of our investment in Glass Mountain Pipeline;
|
•
|
$3.3 million
in currency exchange losses in the current year primarily due to foreign currency forwards to purchase Canadian dollars to limit exposure to foreign currency rate fluctuations for capital contributions to our Canadian operations; and
|
•
|
$10.7 million
change in deferred income tax expense (benefit).
|
•
|
$19.9 million
decrease related to a prior year loss on early extinguishment of $300 million of senior unsecured notes;
|
•
|
$6.0 million
increase in gains on disposal or impairments, net, primarily due to current year gain on the disposal of our Mexican asphalt business as compared to prior year losses;
|
•
|
$4.7 million
in distributions from equity investments due to our prior year disposal of our investment in Glass Mountain Pipeline;
|
•
|
expansion capital expenditures, which are cash expenditures incurred for acquisitions or capital improvements that we expect will increase our operating income or operating capacity over the long-term; or
|
•
|
maintenance capital expenditures, which are cash expenditures (including expenditures for the addition or improvement to, or the replacement of, our capital assets or for the acquisition of existing, or the construction or development of new, capital assets) made to maintain our long-term operating income or operating capacity.
|
Quarter Ended
|
|
Record Date
|
|
Payment Date
|
|
Dividend Per Share
|
March 31, 2017
|
|
March 7, 2017
|
|
March 17, 2017
|
|
$0.45
|
June 30, 2017
|
|
May 15, 2017
|
|
May 26, 2017
|
|
$0.45
|
September 30, 2017
|
|
August 18, 2017
|
|
August 28, 2017
|
|
$0.45
|
December 31, 2017
|
|
November 20, 2017
|
|
December 1, 2017
|
|
$0.45
|
|
|
|
|
|
|
|
March 31, 2018
|
|
March 9, 2018
|
|
March 19, 2018
|
|
$0.4725
|
June 30, 2018
|
|
May 16, 2018
|
|
May 25, 2018
|
|
$0.4725
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
|
|
Light Sweet
Crude Oil
Futures
(Barrel)
|
|
Mont Belvieu
(Non-LDH)
Spot Propane
(Gallon)
|
|
Henry Hub
Natural Gas
Futures
(MMBtu)
|
Three Months Ended March 31, 2017
|
|
|
|
|
|
|
High
|
|
$54.45
|
|
$0.93
|
|
$3.42
|
Low
|
|
$47.34
|
|
$0.57
|
|
$2.56
|
High/Low Differential
|
|
$7.11
|
|
$0.36
|
|
$0.86
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2018
|
|
|
|
|
|
|
High
|
|
$66.14
|
|
$1.02
|
|
$3.63
|
Low
|
|
$59.19
|
|
$0.73
|
|
$2.55
|
High/Low Differential
|
|
$6.95
|
|
$0.29
|
|
$1.08
|
|
|
|
|
|
|
|
Year Ended December 31, 2017
|
|
|
|
|
|
|
High
|
|
$60.42
|
|
$1.01
|
|
$3.42
|
Low
|
|
$42.53
|
|
$0.57
|
|
$2.56
|
High/Low Differential
|
|
$17.89
|
|
$0.44
|
|
$0.86
|
•
|
A 10% increase in the price of natural gas and natural gas liquids results in approximately a $2.9 million increase to gross margin.
|
•
|
A 10% decrease in those prices would have the opposite effect.
|
|
Notional
Volume
(Barrels)
|
|
Fair Value
|
|
Effect of
10% Price
Increase
|
|
Effect of
10% Price
Decrease
|
|
Settlement
Date
|
||||||
Crude oil:
|
|
|
|
|
|
|
|
|
|
||||||
Futures
|
1,029 (short)
|
|
$
|
(3,594
|
)
|
|
$
|
(6,682
|
)
|
|
$
|
6,682
|
|
|
May 2018
|
Liabilities
|
March 31, 2018
|
|
December 31, 2017
|
Long-term debt - variable rate
|
$815.8 million
|
|
$948.1 million
|
Average interest rate
|
4.95%
|
|
4.32%
|
Long-term debt - fixed rate
|
$1.4 billion
|
|
$1.4 billion
|
Fixed interest rate
|
6.16%
|
|
6.16%
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
|
Total Number of Shares Purchased (1)
|
|
Weighted Average Price Paid per Share (2)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs
|
|||||
January 1, 2018 - January 31, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
February 1, 2018 - February 28, 2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
March 1, 2018 - March 31, 2018
|
|
17,131
|
|
|
22.40
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
17,131
|
|
|
$
|
22.40
|
|
|
—
|
|
|
—
|
|
(1
|
)
|
|
Represents shares of common stock withheld from certain of our employees for payment of taxes associated with the vesting of restricted stock awards.
|
(2
|
)
|
|
The price paid per common share represents the closing price as posted on the New York Stock Exchange on the day that the shares were purchased.
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
Exhibit
Number
|
Description
|
2
|
|
3
|
10.1
|
|
10.2
|
|
10.3
|
|
10.4
|
|
31.1
|
|
31.2
|
|
32.1
|
|
32.2
|
|
101.INS
|
XBRL Instance Document.
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
Date: May 9, 2018
|
SEMGROUP CORPORATION
|
||
|
|
|
|
|
By:
|
|
/s/ Robert N. Fitzgerald
|
|
|
|
Robert N. Fitzgerald
|
|
|
|
Senior Vice President and
|
|
|
|
Chief Financial Officer
|
(b)
|
Involuntary Termination; Change of Control
.
|
Performance Goal
|
Adjusted CAFD Growth Achievement Level
|
Percentage of Target Award Vesting
|
Threshold Goal
|
______%
|
50%
|
Target Goal
|
______%
|
100%
|
Maximum Goal
|
______%
|
200%
|
1.
|
I have reviewed this quarterly report on Form 10-Q of SemGroup Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Carlin G. Conner
|
Carlin G. Conner
|
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of SemGroup Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Robert N. Fitzgerald
|
Robert N. Fitzgerald
|
Senior Vice President and Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Carlin G. Conner
|
Carlin G. Conner
|
President and Chief Executive Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Robert N. Fitzgerald
|
Robert N. Fitzgerald
|
Senior Vice President and
|
Chief Financial Officer
|