Investor PresentationSecond Quarter 2017 Results
August 2017
Investor Presentation - August 2017
Non-GAAP Financial MeasuresSemGroup’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 forselected items that SemGroup believes impact the comparability of financial results between reporting periods. In addition to non-cash items, we have selecteditems for adjustment to EBITDA which management feels decrease the comparability of our results among periods. These items are identified as those whichare 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 erodecomparability 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 selecteditems such as gains on the sale of NGL Energy Partners LP common units, costs related to our predecessor’s bankruptcy, significant business developmentrelated costs, significant legal settlements, severance and other similar costs. Management believes these types of items can make comparability of the resultsof 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 ofitems in the future. Although we present selected items that we consider in evaluating our performance, you should be aware that the items presented do notrepresent 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 managementbelieves it provides additional information and metrics relative to the performance of our businesses. This non-GAAP financial measure has important limitationsas an analytical tool because it excludes some, but not all, items that affect the most directly comparable GAAP financial measures. You should not considernon-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 themost comparable GAAP measure and incorporating this knowledge into its decision-making processes. We believe that investors benefit from having access tothe same financial measures that our management uses in evaluating our operating results. Because all companies do not use identical calculations, ourpresentations of non-GAAP measures may be different from similarly titled measures of other companies, thereby diminishing their utility.
SemGroup does not provide guidance for net income, the GAAP financial measure most directly comparable to the non-GAAP financial measure AdjustedEBITDA, because Net Income includes items such as unrealized gains or losses on derivative activities or similar items which, because of their nature, cannotbe accurately forecasted. We do not expect that such amounts would be significant to Adjusted EBITDA as they are largely non-cash items.
2
Investor Presentation - August 2017
Forward-Looking Information
3
Certain matters contained in this Press Release 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 protectionsprovided 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, outcomeof regulatory proceedings, market conditions and other matters, may constitute forward-looking statements. Although we believe that the expectations reflected inthese forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct. These forward-looking statements aresubject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected inthese forward-looking statements. Factors that might cause actual results to differ include, but are not limited to, our ability to generate sufficient cash flow fromoperations 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 demandfor, 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 generalmarket conditions and the credit ratings for our debt obligations and equity; the failure to realize the anticipated benefits of our acquisition of HFOTCO LLC, doingbusiness as Houston Fuel Oil Terminal Company (“HFOTCO”); our ability to pay the second payment related to our HFOTCO acquisition and the consequences ofour failing to do so; the loss of, or a material nonpayment or nonperformance by, any of our key customers; the amount of cash distributions, capital requirementsand performance of our investments and joint ventures; the amount of collateral required to be posted from time to time in our commodity purchase, sale orderivative transactions; the impact of operational and developmental hazards and unforeseen interruptions; our ability to obtain new sources of supply of petroleumproducts; competition from other midstream energy companies; our ability to comply with the covenants contained in our credit agreements, continuing covenantagreement, and the indentures governing our notes, including requirements under our credit agreements to maintain certain financial ratios; our ability to renew orreplace expiring storage, transportation and related contracts; the overall forward markets for crude oil, natural gas and natural gas liquids; the possibility that theconstruction or acquisition of new assets may not result in the corresponding anticipated revenue increases; any future impairment of goodwill resulting from theloss of customers or business; changes in currency exchange rates; weather and other natural phenomena, including climate conditions; a cyber attack involvingour information systems and related infrastructure, or that of our business associates; the risks and uncertainties of doing business outside of the U.S., includingpolitical and economic instability and changes in local governmental laws, regulations and policies; costs of, or changes in, laws and regulations and our failure tocomply with new or existing laws or regulations, particularly with regard to taxes, safety and protection of the environment; the possibility that our hedging activitiesmay result in losses or may have a negative impact on our financial results; general economic, market and business conditions; as well as other risk factorsdiscussed 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 press release, which reflect management’s opinions only asof 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 postedand 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
Investor Presentation - August 2017
Delivering Long-Term ValueTransforming SemGroup from an upstream dependent company to a premier diversifiedenergy infrastructure company
Ñ Adding growth paths in exciting new areas:• Gulf Coast
◦ Deep water access, pipeline connectivity and world class residual fuel oil terminal◦ 24” crude pipeline connecting St. James to refineries that value crude optionality
• STACK Play◦ Crude and gas pipelines, backed by investment-grade counterparties and driven by a
robust production environment continuing to develop in the STACK• Duvernay/Montney
◦ Leveraging SemCAMS' unique and valued high-sulphur gas processing footprint andpipeline transport capacity
4
Investor Presentation - August 2017
Over 70% of SemGroup's pro forma revenue isderived from investment grade counterparties
Over 95% of gross margin isfee based
(1) LTM December 31, 2016(2) Counterparty ratings LTM December 31, 2016; excludes SemLogistics and SemMaterials Mexico
Take or Pay
Fixed Fee
POP/Marketing
2016 Annualized 4Q 2017
38%55%
51%41%
11%
Investment Grade
Non-Investment Grade
72%
28%
Company Strengths
5 1) Annualized 4Q 2017 run rate, includes HFOTCO and Maurepas2) LTM 6/30/17, pro forma HFOTCO acquisition; excludes SemLogistics and SemMaterials Mexico
5
Counterparty Strength(2)Stable Cash Flows
HFOTCO increases SEMG's portion of cash flows with fixed-fee, contractedarrangements from credit-worthy counterparties
(1)
4%
Investor Presentation - August 2017
Ñ Crude Oil• ~1,800 miles of crude oil pipelines• 10 million barrels of crude oil storage capacity • More than 230 crude oil trucks and trailers• Maurepas Pipeline• STACK Crude Omega Pipeline under construction(1)
Ñ HFOTCO• 16.8 mmbbls storage terminal, premier deepwater access• One of the largest providers of residual fuel oil storage
on the U.S.Gulf Coast• Located in the leading refined products / oil storage
and export marketplace
Ñ Natural Gas• 8 natural gas processing plants• STACK SemGas Canton Pipeline under construction(1)
• New 200 mmcf/d Wapiti Gas Plant under construction(2)
• ~1,600 miles of natural gas gathering pipeline• ~1.3 bcf/d of total processing capacity
Ñ Additional Assets• 8.7 million barrels, multi-product storage in U.K.• 14 asphalt terminals in Mexico• ~12% ownership in GP of NGL Energy Partners
Crude and Gas Assets in Key Growth Areas
61) Expected completion late 4Q 20172) Expected completion 2Q 20193) Via Bayou Bridge and Ho-Ho, HFOTCO will be connected to St. James and ultimately will be connected to Maurepas
(3)
Crude Business
7
Investor Presentation - August 2017
DJ BasinÑ White Cliffs Pipeline - 51% ownership
• DJ Basin to Cushing, Oklahoma• Two 527-mile, 12-inch pipelines• 215,000 bpd current capacity• Currently ships two crude types
▪ DJ Basin crude/condensate▪ Kansas common
Ñ Wattenberg Oil Trunkline• 75-mile, 12-inch pipeline and storage in DJ Basin• Transports Noble Energy production to White Cliffs• 360,000 barrels of storage capacity• 4-bay truck unloading facility at Briggsdale
Ñ Platteville Truck Unloading Facility• 30-lane truck unloading facility• Origin of White Cliffs Pipeline• 350,000 barrels of storage capacity
Crude Business Overview
8
U.S. Gulf CoastÑ Maurepas Pipeline
• 24-inch, 34 mile crude oil pipelineconnected to LOCAP at St. Jamesand terminating at Norco refinery
• 12-inch, 35 mile intermediates pipelinebetween Convent and Norco refineries
• 6-inch, 35 mile intermediates pipelinebetween Norco and Convent refineries
Investor Presentation - August 2017
All Uncommitted Volumes Shipped At Lowest Applicable Incentive Rate
White Cliffs Pipeline Contract & Rate Structure
9
1) Average remaining contract life as of 06/30/20172) Weighted average rate ($/bbl)3) FERC Filing No. 4.5.0, effective June 1, 20174) Shipper receives credit for the committed volumes towards their uncommitted volume incentive rate
Committed Take or Pay Volumes
Origination Volumes(bpd) Rate ($/bbl)
Wtd. Avg.Remaining
Contract Life(1)
Platteville, CO 72,000 $5.20 ~ 2.6 yearsHealy, KS 5,000 $2.09 ~ 4.1 years
77,000 $5.00(2) ~ 2.7 years
Shipper Example - 1 Month 61,000 bpd shipped during the month, 10,000 of those barrels are committed volumes
Below is an example the shipper’s tariff structure
Total Volumes(bpd) Rate ($/bbl)
Committed Volumes 10,000 $5.20
Uncommitted Volumes 51,000 $3.00(4)
61,000 $3.36(2)
Uncommitted Volumes(3)
Volumes (bpd) Incentive Rate ($/bbl)
0 – 9,999 $4.90
10,000 – 19,999 $4.65
20,000 – 29,999 $4.40
30,000 – 39,999 $4.15
40,000 – 49,999 $3.90
50,000 – 59,999 $3.25
60,000 and up $3.00
Investor Presentation - August 2017
Crude Business Overview
10 1) Expected completion late 4Q 2017, see slide 26 for additional project information
Oklahoma/Kansas Assets
Field Services
Ñ Cushing Storage• 7.6 million barrels of storage • ~82% under long-term fixed fee contracts with first
expiration 2018• 2017 average storage rate of $0.33 per month• Connectivity to all major inbound/outbound pipelines
Ñ Kansas/Oklahoma System • 460-mile gathering and transportation pipeline
system• Connects to third-party pipelines, Kansas and
Oklahoma refineries and Cushing terminal • More than 700,000 barrels of storage capacity
Ñ Crude Oil Trucking Fleet• Fleet of ~230 crude oil transport trucks • Servicing the Bakken, DJ/Niobrara, Eagle Ford,
Granite Wash & Mississippi Lime
Ñ Glass Mountain Pipeline – 50% ownership• 215-mile pipeline• 140,000 bpd current capacity• Two laterals – Granite Wash and Mississippi Lime join and
terminate in Cushing• 1.5 million barrels of storage capacity• STACK Crude pipeline extension - under construction(1)
Ñ Isabel Pipeline • 48 mile, 8-inch crude oil pipeline from Isabel Junction, KS
to Alva, OK• Connects Kansas barrels to Glass Mountain Pipeline
Investor Presentation - August 2017
2016 2017
8
6
4
2
0
2016 2017 2018 2019
6.3 6.3 5.8
1.6
1.3 1.3 1.3
1.3
0.5
4.7
n Third-party contracted(1) n Operational / Marketing n Uncontracted
1) Weighted average term of storage contracts2) Volumes on 100% owned pipelines3) Reflects 100% throughput on Joint Venture pipelines
Crude Key Performance MetricsSupply and Logistics Volumes
250200150100
500
(Tho
usan
dB
arre
lspe
rDay
)
1Q 2Q 3Q 4Q 1Q 2Q
209.8 198.5 206.7 197.7241.1 232.6
Pipelines Field Services
Transportation Volumes
250200150100
500
(Tho
usan
dB
arre
lspe
rDay
)
1Q 2Q 3Q 4Q 1Q 2Q
102.4 111.3 104.6 96.4 88.0 89.9
93.8
196.2
86.3
197.6
97.1
201.7
99.6
196.0
91.2
179.2
92.1
182.0
White Cliffs Pipeline Glass Mountain Pipeline
Joint Venture Transportation Volumes
250200150100
500
(Tho
usan
dB
arre
lspe
rDay
)
1Q 2Q 3Q 4Q 1Q 2Q
142.3 124.9 114.9 115.0 111.1 107.3
58.9201.2
52.5177.4
52.5167.4
58.3173.3
72.5
183.6
81.5
188.8
Facilities - Cushing Storage 7.6 million Barrels Capacity
11
2016 2017 2016 2017(2)
(3)
2016 2017
HFOTCO
12
Investor Presentation - August 2017
Unique Position on the Houston Ship Channel
1) Fifth ship dock is currently under construction, expected completion mid-20182) HFOTCO owns two pipelines13
Ñ Land• 300 acres of waterfront land on the Houston Ship Channel • 12 acres of undeveloped land at Moore Road Junction, hub
for multiple pipelines
Ñ Storage tanks• 144 tanks ranging in size from 10 to 400 mbbls• 16.8 mmbbls of storage capacity• Additional 1.45 mmbbls currently under construction
(expected completion mid-2018)
Ñ Ship & Barge Docks• Five ship docks which can receive up to Suez-max vessels
with 45-foot draft(1)
• Seven barge docks (accommodating 23 bargesimultaneously)
Ñ Pipelines, Truck & Rail• Three crude oil pipelines to four refineries(2)
• 72 rail spots• 14 trucks spots
Investor Presentation - August 2017
…with Strong Connectivity to the Houston RefineryComplex
14
Ñ Connects directly or indirectly to crude pipelines serving the Eagle Ford, Permian, Bakken, Midcontinent and Canada
Investor Presentation - August 2017
HFOTCO Customer Base
Diversified, Long-Term and Primarily Investment GradeCustomers
15
• Top 10 customers comprise ~61% of rentalrevenues
• No customer accounts for more than 10% of rentalrevenues
• Average customer tenure of ~15 years
• 48% of customers have been with HFOTCO forover 18 years
• 75% of the contracted capacity is with diversifiedinvestment grade counterparties
• Non-rated / non-IG customers include severallarge global private companies
Key Customers
Ñ Approximately 88% of HFOTCO’s 2016 revenue is generated by take-or-pay storage contracts
Ñ The remaining 12% based on predictable streams related to ancillary services that derive from basic storage functions (heating, throughput fees, etc.)
Natural Gas Business
16
Investor Presentation - August 2017
SemGas Areas of Operation
Ñ Located in liquids rich oil plays Ñ Four processing facilities - 595 mmcf/d of current capacity
• ~1,000 miles of gathering linesÑ STACK Canton Pipeline - under construction(1)
17
SemGas Natural Gas BusinessN. Oklahoma Avg Processed Volume
Capacity Processing Volumes
600500400300200100
0
(mm
cf/d
)
1Q 2Q 3Q 4Q 1Q 2Q
325.9 290.6 284.4 284.2 273.6 262.8
2016 2017
1) Expected completion late 4Q 2017, see slide 27 for additional project information
Investor Presentation - August 2017
Ñ 600 miles of transport and gathering linesÑ Strong incumbent position to serve industry’s growing infrastructure needsÑ Wapitit Sour Gas Plant - under construction(3)
18
SemCAMS Areas of Operations
SemCAMS Natural Gas BusinessAverage Throughput Volume
K3 Plant KA Plant Capacity
600500400300200100
0
(mm
cf/d
)
1Q 2Q 3Q 4Q 1Q 2Q
270.4157.0 253.5 253.7 260.7 171.1
114.3384.7
147.1304.1 135.0
388.5143.1396.8
146.9407.6
172.2343.3
(1)
2016 2017
(2)
1) Lower volumes related to an unplanned shutdown at our K3 plant during June 20162) Scheduled plant turnaround at K33) Expected completion 2Q 2019, see slide 28 for additional project information
Financials, Guidance &Capital Expenditures
19
Investor Presentation - August 2017
Ñ SemCAMS - increased nearly $4 million due to take-or-pay true-ups, partially offset by lower capitalfee revenue related to K3 plant turnaround
Ñ SemGas - increased largely due to a $2.5 million one-time contractual true-up, partially offset bylower volumes
Ñ Crude Supply & Logistics - results reflect continued pressure on marketing differentials Ñ SemLogistics - down approximately $1 million primarily due to lower throughput revenue
Second Quarter 2017 Results
Segment Adjusted EBITDA 2Q 2017 1Q 2017Crude - Transportation $ 25.2 $ 25.7Crude - Facilities 8.9 9.0Crude - Supply and Logistics (3.5) (3.5)SemGas 17.0 16.1SemCAMS 15.9 12.5SemLogistics 3.1 3.9SemMaterials Mexico 1.9 2.0Corporate and Other (3.1) (5.0)
$ 65.4 $ 60.7
As Reported (in millions, excluding EPS, unaudited) 2Q 2017 1Q 2017Net income (loss) attributable to SemGroup $ 9.6 $ (10.3)Net income (loss) per share - diluted $ 0.15 $ (0.16)EBITDA(1) $ 52.3 $ 28.3Selected Non-Cash Items and Other Items Impacting Comparability(1) $ 13.1 $ 32.4Adjusted EBITDA(1) $ 65.4 $ 60.7Dividend per Share $ 0.45 $ 0.45
20 1) Non-GAAP Financial Data Reconciliations are included in the Appendix to this presentation
Investor Presentation - August 2017
Leverage and Liquidity(in millions, unaudited)
Standalone6/30/2017 Adjustments
Pro Forma6/30/2017
SemGroup (B2 / B+)(1)
Revolving Credit Facility - $1.0 Billion due 2021 $ 164 $ 301 $ 4655.625% Senior unsecured notes due 2022 400 4005.625% Senior unsecured notes due 2023 350 3506.375% Senior unsecured notes due 2025 325 325
Total SEMG Debt $ 1,239 $ 1,540
HFOTCO (Ba3 / BB-)(1)
Revolving Credit Facility - $75 Million due 2019Term Loan due 2021 $ 535Hurricane Ike Bonds due 2050 225
Total HFOTCO Debt $ 760
Leverage MetricsSEMG Covenant Net Leverage Ratio (max 5.5x)(3) 3.7x 3.8x
HFOTCO Covenant Net Leverage Ratio (max 7.5x)(4) 6.8x
Consolidated Net Leverage Ratio 3.7x 5.2x
LiquiditySEMG Available Liquidity(5) $ 850 $ 549HFOTCO Available Liquidity 79
Consolidated Available Liquidity $ 850 $ 628
1) Corporate Family Rating2) SemGroup completed the initial payment, which consisted of $301 million cash payment, funded from SEMG's revolving credit facility 3) Calculated per SEMG revolving credit agreement definitions, which includes material project adjustments ~$50 million and LTM Pro Forma HFOTCO distributions received ~$70 million4) Calculated per HFOTCO revolving credit agreement definitions5) Available liquidity excludes SemMaterials Mexico cash and is reduced for outstanding letters of credit
21
(2)
Investor Presentation - August 2017
Crude • Average Cushing storage rate: $0.33/barrel/month• Maurepas Pipeline: completed• Transportation volumes(3): flat year over year• White Cliffs Pipeline volumes: 100-110k bpd• Glass Mountain Pipeline volumes: 75-80k bpd
SemGas • N. Oklahoma processing volumes: 260-280 mmcf/d
SemCAMS • Processing volumes: 400-420 mmcf/d• K3 plant turnaround - completed 2Q 2017
HFOTCO• Acquisition effective July 17, 2017, includes ~$60
million of Adjusted EBITDA post-close
Cash Taxes• Approximately $5 million, related to foreign subs
Adjusted EBITDA $330 million - $350 million
Updated 2017 Adjusted EBITDA Guidance
22
1) 2017 Adjusted EBITDA guidance narrowed, primarily due to the continued softness in the crude supply & logistics markets and the timing of Maurepas cash flows2) HFOTCO Adjusted EBITDA of $60 million reflects post-close contribution; $115 million full-year 20173) Transportation volumes excludes Maurepas Pipeline and JV assets (White Cliffs and Glass Mountain Pipeline)
$400
$300
$200
$100
(inm
illio
ns)
Initial 2017E (narrowed) HFOTCO 2017E Updated 2017E
$60
$330 - $350
$270 - $290
(2)(1)
Investor Presentation - August 2017
Key Committed Projects
Crude Projects• Maurepas Pipeline ~ completed: $180 million• Cushing 20" Pipeline ~ completion 4Q 2017: $35 million• STACK Crude Omega Pipeline ~ completion late 4Q 2017: $30 million(1)
Natural Gas Projects• Wapiti Sour Gas Plant ~ completion 2Q 2019: $80 million• KA Plant projects: $25 million • N. Oklahoma gathering projects: $20 million• STACK SemGas Canton Pipeline ~ completion late 4Q 2017: $60 million
HFOTCO(2)
• Ship Dock #5: $35 million ~ completion mid-2018• 1.45 mmbbls crude storage: $20 million ~ completion mid-2018
Updated 2017 Capital Expenditure Guidance$575 million Capex Spend on Strategic Crude and Natural Gas Projects
231) Reflects SemGroup's 50% of capital contributions to the joint venture2) Reflects SemGroup's 2017 spend post-close of acquisition
Maurepas Pipeline
Crude
HFOTCO
Natural Gas
Other Growth Projects
Maintenance
$18031%
$6511%
$7513%
$18532%
$102%
$6010%11%
Investor Presentation - August 2017
Key Projects Update Ñ Maurepas Pipeline ~ $500 million(1)
• Pipeline construction of all three pipelines is complete • 24” crude pipeline is operational and cash flowing• 6” and 12” product pipelines are complete and expected to begin contributing in September
Ñ STACK Crude Omega Pipeline ~ $30 million(2) • Right of way and surveys complete• Tank construction at Omega and Ruby stations are progressing on schedule• Expected completion late 4Q 2017
Ñ STACK SemGas Canton Pipeline ~ $60 million(1) • Recently executed long-term gathering and processing contract with dedicated acreage in
Blaine and Major counties• Expected completion late 4Q 2017
Ñ Wapiti Gas Plant ~ $225-250 million(1) • Site work continues to progress• Expected completion 2Q 2019
Ñ HFOTCO Projects ~ $120 million(3) • Ship Dock #5 and 1.45 mmbbls crude storage • Backstopped by long-term contract with credit worthy counterparty• Expected completion mid-2018
241) Expected total project spend2) Expected total project spend; reflects SemGroup's 50% of capital contributions to the joint venture3) Expected total project spend; reflects SemGroup's total spend on HFOTCO projects
Investor Presentation - August 2017
25
Maurepas Pipeline Area Map
Maurepas Pipeline Project Completed July 2017
Investor Presentation - August 2017
(1) Reflects SemGroup's 50% of capital contributions to the joint venture
Omega Pipeline Ñ 44-mile pipeline extension of Glass
Mountain Pipeline to STACK resource playto Cushing storage complex
Ñ Backed by a long-term, fee-basedtransportation agreement with a largeinvestment-grade producer includescommitted area of dedication
Ñ Provides cost-effective, reliabletransportation to Cushing and access toMid-Continent and Gulf Coast refineries
Ñ Total project cost ~ $30 million(1)
Ñ Project completion estimated late 4Q 2017
STACK Crude Omega Pipeline
26 1) Reflects SemGroup's 50% of capital contributions to the joint venture
Provides significant operational synergies by connecting to Glass Mountain Pipeline
Investor Presentation - August 2017
STACK SemGas Canton Pipeline
Canton Pipeline Ñ 24-inch diameter natural gas pipeline, ~50 miles long
Ñ Originates from SemGroup’s Rose Valley gasprocessing facility in Woods County and extends tonorth central Blaine County
Ñ Backed by a long-term, firm commitment from aninvestment-grade counterparty
Ñ Additional long-term gathering and processingcontract with dedicated acreage
Ñ Initial capacity of 200 mmcf/d, and could be expandedup to 400 mmcf/d by adding compression, to serveother producers in the area
Ñ Project completion estimated late 4Q 2017
Ñ Total project cost ~ $60 million
27
Provides significant operational synergies with our existing assets
Investor Presentation - August 2017
Ñ New 200 mmcf/d sour gas processing Wapitiplant will be integrated with our existinginfrastructure to optimize & leverage currentoperations on the Wapiti Pipeline Systemand K3 plant located in the Kaybob region
Ñ Supported by a 120 mmcf/d, 15 yearcontract with NuVista
Ñ Total project cost ~ USD $225 - $250 million
Ñ Plant completion estimated 2Q 2019
Wapiti Sour Gas Plant in the Liquids-Rich Montney Play
28
Investor Presentation - August 2017
HFOTCO Strategically Located Asset…
29
Ñ HFOTCO is strategically situated on the Houston Ship Channel in close proximity to both supply sources (residual fuel oil from refineries and domestic crude oil production) and demand sources (area refineries and waterborne export)
Houston Fuel Oil Terminal Co.
Area Refineries
24” Crude Oil Pipeline (Owned by HFOTCO)16” Crude Oil Pipeline (Owned by 3rd Party)24” to Speed (Owned by HFOTCO)24” Valero PipelineProposed PipelinePipeline Interconnections
APPENDIX
30
Investor Presentation - August 2017
Consolidated Balance Sheets
(in thousands, unaudited, condensed) June 30, 2017
December 31, 2016
ASSETSCurrent assets $ 543,126 $ 635,874Property, plant and equipment, net 1,948,787 1,762,072Goodwill and other intangible assets 180,441 185,208Equity method investments 430,514 434,289Other noncurrent assets, net 63,350 57,529Total assets $ 3,166,218 $ 3,074,972
LIABILITIES AND OWNERS' EQUITYCurrent liabilities:
Current portion of long-term debt $ 28 $ 26Other current liabilities 455,446 488,329
Total current liabilities 455,474 488,355
Long-term debt, excluding current portion 1,215,244 1,050,918Other noncurrent liabilities 90,101 89,734Total liabilities 1,760,819 1,629,007
Total owners' equity 1,405,399 1,445,965Total liabilities and owners' equity $ 3,166,218 $ 3,074,972
31
Investor Presentation - August 2017
Consolidated Statements of Operations and Comprehensive Income (Loss)(in thousands, except per share amounts, unaudited, condensed) Three Months Ended Six Months Ended
June 30, March 31, June 30,2017 2016 2017 2017 2016
Revenues $ 473,089 $ 287,377 $ 456,100 $ 929,189 $ 602,228Expenses:
Costs of products sold, exclusive of depreciation and amortization shown below 340,107 176,842 348,998 689,105 373,789Operating 73,346 54,707 52,083 125,429 104,899General and administrative 26,752 20,775 21,644 48,396 41,835Depreciation and amortization 25,602 25,055 24,599 50,201 49,106Loss (gain) on disposal or impairment, net (234) 1,685 2,410 2,176 14,992Total expenses 465,573 279,064 449,734 915,307 584,621
Earnings from equity method investments 17,753 17,078 17,091 34,844 40,149Loss on issuance of common units by equity method investee — — — — (41)Operating income 25,269 25,391 23,457 48,726 57,715Other expenses, net 12,033 9,944 33,639 45,672 68,566Income (loss) from continuing operations before income taxes 13,236 15,447 (10,182) 3,054 (10,851)Income tax expense (benefit) 3,625 4,658 95 3,720 (16,749)Income (loss) from continuing operations 9,611 10,789 (10,277) (666) 5,898Loss from discontinued operations, net of income taxes — (2) — — (4)Net income (loss) 9,611 10,787 (10,277) (666) 5,894
Less: net income attributable to noncontrolling interests — 1,922 — — 10,942Net income (loss) attributable to SemGroup Corporation 9,611 8,865 (10,277) (666) (5,048)Net income (loss) attributable to SemGroup Corporation 9,611 8,865 (10,277) (666) (5,048)Other comprehensive income, net of income taxes 8,952 6,591 6,033 14,985 2,482Comprehensive income (loss) attributable to SemGroup Corporation $ 18,563 $ 15,456 $ (4,244) $ 14,319 $ (2,566)Net income (loss) per common share:
Basic $ 0.15 $ 0.20 $ (0.16) $ (0.01) $ (0.11)Diluted $ 0.15 $ 0.19 $ (0.16) $ (0.01) $ (0.11)
Weighted average shares (thousands):Basic 65,749 45,236 65,692 65,717 44,553Diluted 66,277 45,647 65,692 65,717 44,553
32
Investor Presentation - August 2017
2016 Quarterly Financial Data
Note: Prior quarter amounts above have been restated from the amounts originally reported to correct for an immaterial error identified by management in the fourthquarter related to an under capitalization of interest on certain capital projects. Previously reported interest expense, included in "other expense, net" above, hasbeen decreased by $1.4 million, $0.9 million and $2.5 million for the quarters ended March 31, June 30 and September 30, 2016, respectively, with a correspondingincrease to net income. Earnings per basic share was increased by $0.03, $0.02 and $0.05 per share for the quarters ended March 31, June 30 and September 30,2016, respectively. Capitalized interest recorded for the fourth quarter of 2016 includes an immaterial out of period adjustment of $6.3 million related to undercapitalization of interest in the prior year.
(in thousands, except per share data, unaudited)First
QuarterSecondQuarter
ThirdQuarter
FourthQuarter Total
Total revenues $ 314,851 $ 287,377 $ 327,764 $ 402,172 $ 1,332,164
Loss on disposal or impairment, net 13,307 1,685 1,018 38 16,048
Other operating costs and expenses 292,250 277,379 316,644 381,969 1,268,242Total expenses 305,557 279,064 317,662 382,007 1,284,290Earnings from equity method investments 23,071 17,078 15,845 17,763 73,757Loss on issuance of common units by equity method investee (41) — — — (41)Operating income 32,324 25,391 25,947 37,928 121,590Other expenses, net 58,622 9,944 18,684 9,809 97,059Income (loss) from continuing operations before income taxes (26,298) 15,447 7,263 28,119 24,531Income tax expense (benefit) (21,407) 4,658 11,898 16,119 11,268Income (loss) from continuing operations (4,891) 10,789 (4,635) 12,000 13,263Income (loss) from discontinued operations, net of income taxes (2) (2) 3 — (1)Net income (loss) (4,893) 10,787 (4,632) 12,000 13,262Less: net income attributable to noncontrolling interests 9,020 1,922 225 — 11,167Net income (loss) attributable to SemGroup $ (13,913) $ 8,865 $ (4,857) $ 12,000 $ 2,095Earnings (loss) per share—basic $ (0.32) $ 0.20 $ (0.09) $ 0.18 $ 0.04Earnings (loss) per share—diluted $ (0.32) $ 0.19 $ (0.09) $ 0.18 $ 0.04
33
Investor Presentation - August 2017
Non-GAAP Adjusted EBITDA Calculation
(in thousands, unaudited) Three Months Ended Six Months EndedJune 30, March 31, June 30,
Reconciliation of net income to Adjusted EBITDA: 2017 2016 2017 2017 2016Net income (loss) $ 9,611 $ 10,787 $ (10,277) $ (666) $ 5,894
Add: Interest expense 13,477 18,011 13,867 27,344 35,588Add: Income tax expense (benefit) 3,625 4,658 95 3,720 (16,749)Add: Depreciation and amortization expense 25,602 25,055 24,599 50,201 49,106
EBITDA 52,315 58,511 28,284 80,599 73,839Selected Non-Cash Items and
Other Items Impacting Comparability 13,095 9,121 32,383 45,478 71,461Adjusted EBITDA $ 65,410 $ 67,632 $ 60,667 $ 126,077 $ 145,300
Selected Non-Cash Items andOther Items Impacting ComparabilityLoss (gain) on disposal or impairment, net $ (234) $ 1,685 $ 2,410 $ 2,176 $ 14,992Loss from discontinued operations, net of income taxes — 2 — — 4Foreign currency transaction loss (gain) (1,011) 1,543 — (1,011) 3,012Remove NGL equity earnings including loss on issuance of commonunits (6) — (3) (9) (2,191)Remove loss (gain) on sale or impairment of NGL units — (9,120) — — 30,644NGL cash distribution — — — — 4,873M&A transaction related costs 5,453 — — 5,453 —Employee severance and relocation expense 312 836 558 870 1,095Unrealized loss (gain) on derivative activities (928) 4,477 27 (901) (71)Depreciation and amortization included within equity earnings 6,698 7,138 6,712 13,410 13,677Non-cash equity compensation 2,803 2,560 2,757 5,560 5,426Loss on early extinguishment of debt 8 — 19,922 19,930 —Selected Non-Cash items and
Other Items Impacting Comparability $ 13,095 $ 9,121 $ 32,383 $ 45,478 $ 71,461
34 Note: 2Q 2017 cash expense: ~ $18 million interest, ~ $12 million maintenance capex, ~ $2 million income tax
Investor Presentation - August 2017
Non-GAAP Financial Data Reconciliations
(in thousands, unaudited) Three Months Ended Six Months EndedJune 30, March 31, June 30,
2017 2016 2017 2017 2016Net income $ 13,520 $ 11,794 $ 12,242 $ 25,762 $ 31,089
Add: Interest expense (income) (1,470) 193 (1,305) (2,775) 457Add: Depreciation and amortization expense 6,498 6,174 5,927 12,425 12,034
EBITDA 18,548 18,161 16,864 35,412 43,580Selected Non-Cash Items and
Other Items Impacting Comparability 6,683 8,954 8,788 15,471 15,560Adjusted EBITDA $ 25,231 $ 27,115 $ 25,652 $ 50,883 $ 59,140
Selected Non-Cash Items and Other Items Impacting Comparability
Loss (gain) on disposal or impairment, net $ (15) $ 1,714 $ 1,961 $ 1,946 $ 1,781Employee severance and relocation expense — 102 115 115 102Depreciation and amortization included within
equity earnings 6,698 7,138 6,712 13,410 13,677Selected Non-Cash items and
Other Items Impacting Comparability $ 6,683 $ 8,954 $ 8,788 $ 15,471 $ 15,560
Crude - Transportation Segment
35
Investor Presentation - August 2017
Non-GAAP Financial Data Reconciliations
(in thousands, unaudited) Three Months Ended Six Months EndedJune 30, March 31, June 30,
2017 2016 2017 2017 2016Net income $ 6,690 $ 7,450 $ 6,884 $ 13,574 $ 15,155
Add: Interest expense 165 — 134 299 —Add: Depreciation and amortization expense 2,022 1,921 1,944 3,966 3,803
EBITDA 8,877 9,371 8,962 17,839 18,958Selected Non-Cash Items and
Other Items Impacting Comparability — 4 54 54 4Adjusted EBITDA $ 8,877 $ 9,375 $ 9,016 $ 17,893 $ 18,962
Selected Non-Cash Items and Other Items Impacting Comparability
Employee severance expense $ — $ 4 $ 54 $ 54 $ 4Selected Non-Cash items and
Other Items Impacting Comparability $ — $ 4 $ 54 $ 54 $ 4
Crude - Facilities Segment
36
Investor Presentation - August 2017
Non-GAAP Financial Data Reconciliations
(in thousands, unaudited) Three Months Ended Six Months EndedJune 30, March 31, June 30,
2017 2016 2017 2017 2016Net income (loss) $ (2,941) $ 5,370 $ (3,961) $ (6,902) $ 18,831
Add: Interest expense 327 182 257 584 322Add: Depreciation and amortization expense 78 40 62 140 80
EBITDA (2,536) 5,592 (3,642) (6,178) 19,233Selected Non-Cash Items and
Other Items Impacting Comparability (928) 4,477 170 (758) 156Adjusted EBITDA $ (3,464) $ 10,069 $ (3,472) $ (6,936) $ 19,389
Selected Non-Cash Items and Other Items Impacting Comparability
Loss on disposal or impairment, net $ — $ — $ — $ — $ 227Employee severance expense — — 143 143 —Unrealized loss (gain) on derivative activities (928) 4,477 27 (901) (71)Selected Non-Cash items and
Other Items Impacting Comparability $ (928) $ 4,477 $ 170 $ (758) $ 156
Crude - Supply and Logistics Segment
37
Investor Presentation - August 2017
Non-GAAP Financial Data Reconciliations
(in thousands, unaudited) Three Months Ended Six Months EndedJune 30, March 31, June 30,
2017 2016 2017 2017 2016Net income (loss) $ 4,459 $ (325) $ 3,673 $ 8,132 $ (13,799)
Add: Interest expense 3,096 3,431 3,149 6,245 6,986Add: Depreciation and amortization expense 9,099 9,198 8,927 18,026 18,125
EBITDA 16,654 12,304 15,749 32,403 11,312Selected Non-Cash Items and
Other Items Impacting Comparability 347 256 318 665 13,647Adjusted EBITDA $ 17,001 $ 12,560 $ 16,067 $ 33,068 $ 24,959
Selected Non-Cash Items and Other Items Impacting Comparability
Loss (gain) on disposal or impairment, net $ — $ (1) $ 21 $ 21 $ 13,051Employee severance expense 45 13 — 45 13Non-cash equity compensation 302 244 297 599 583Selected Non-Cash items and
Other Items Impacting Comparability $ 347 $ 256 $ 318 $ 665 $ 13,647
SemGas Segment
38
Investor Presentation - August 2017
Non-GAAP Financial Data Reconciliations
(in thousands, unaudited) Three Months Ended Six Months EndedJune 30, March 31, June 30,
2017 2016 2017 2017 2016Net income $ 6,652 $ 2,325 $ 3,506 $ 10,158 $ 5,601
Add: Interest expense 2,111 1,931 2,162 4,273 3,637Add: Income tax expense 2,267 451 1,424 3,691 1,416Add: Depreciation and amortization expense 4,434 4,294 4,496 8,930 8,245
EBITDA 15,464 9,001 11,588 27,052 18,899Selected Non-Cash Items and
Other Items Impacting Comparability 429 381 932 1,361 764Adjusted EBITDA $ 15,893 $ 9,382 $ 12,520 $ 28,413 $ 19,663
Selected Non-Cash Items and Other Items Impacting Comparability
Loss on disposal or impairment, net $ — $ — $ 445 $ 445 $ —Foreign currency transaction loss (gain) (12) (1) 8 (4) 5Employee severance 1 — — 1 —Non-cash equity compensation 440 382 479 919 759Selected Non-Cash items and
Other Items Impacting Comparability $ 429 $ 381 $ 932 $ 1,361 $ 764
SemCAMS Segment
39
Investor Presentation - August 2017
Non-GAAP Financial Data Reconciliations
(in thousands, unaudited) Three Months Ended Six Months EndedJune 30, March 31, June 30,
2017 2016 2017 2017 2016Net income (loss) $ 1,040 $ (1,447) $ 1,285 $ 2,325 $ (1,693)
Add: Interest expense 561 353 522 1,083 729Add: Income tax expense (benefit) 372 (273) 381 753 (214)Add: Depreciation and amortization expense 1,901 1,983 1,815 3,716 3,943
EBITDA 3,874 616 4,003 7,877 2,765Selected Non-Cash Items and
Other Items Impacting Comparability (772) 1,562 (64) (836) 2,249Adjusted EBITDA $ 3,102 $ 2,178 $ 3,939 $ 7,041 $ 5,014
Selected Non-Cash Items and Other Items Impacting Comparability
Foreign currency transaction (gain) loss $ (914) $ 1,391 $ (259) $ (1,173) $ 1,901Non-cash equity compensation 142 171 195 337 348Selected Non-Cash items and
Other Items Impacting Comparability $ (772) $ 1,562 $ (64) $ (836) $ 2,249
SemLogistics Segment
40
Investor Presentation - August 2017
Non-GAAP Financial Data Reconciliations
(in thousands, unaudited) Three Months Ended Six Months EndedJune 30, March 31, June 30,
2017 2016 2017 2017 2016Net income $ 633 $ 1,187 $ 406 $ 1,039 $ 1,883
Add: Income tax expense 525 194 217 742 801Add: Depreciation and amortization expense 1,022 949 937 1,959 1,890
EBITDA 2,180 2,330 1,560 3,740 4,574Selected Non-Cash Items and
Other Items Impacting Comparability (281) 244 391 110 614Adjusted EBITDA $ 1,899 $ 2,574 $ 1,951 $ 3,850 $ 5,188
Selected Non-Cash Items and Other Items Impacting Comparability
Gain on disposal of long-lived assets, net $ (211) $ (28) $ (17) $ (228) $ (67)Foreign currency transaction (gain) loss (84) 153 252 168 409Non-cash equity compensation 14 119 156 170 272Selected Non-Cash items and
Other Items Impacting Comparability $ (281) $ 244 $ 391 $ 110 $ 614
SemMaterials México Segment
41
Investor Presentation - August 2017
Non-GAAP Financial Data Reconciliations
(in thousands, unaudited) Three Months Ended Six Months EndedJune 30, March 31, June 30,
2017 2016 2017 2017 2016Net loss $ (25,339) $ (15,567) $ (34,312) $ (59,651) $ (51,173)
Add: Interest expense 8,687 11,921 8,948 17,635 23,457Add: Income tax expense (benefit) 5,358 4,286 (1,927) 3,431 (18,752)Add: Depreciation and amortization expense 548 496 491 1,039 986
EBITDA (10,746) 1,136 (26,800) (37,546) (45,482)Selected Non-Cash Items and
Other Items Impacting Comparability 7,617 (6,757) 21,794 29,411 38,467Adjusted EBITDA $ (3,129) $ (5,621) $ (5,006) $ (8,135) $ (7,015)
Selected Non-Cash Items and Other Items Impacting Comparability
Gain on disposal or impairment, net $ (8) $ — $ — $ (8) $ —Loss from discontinued operations, net of income taxes — 2 — — 4Foreign currency transaction (gain) loss (1) — (1) (2) 697Remove NGL equity earnings including loss on issuance of commonunits (6) — (3) (9) (2,191)Remove loss on impairment or sale of NGL units — (9,120) — — 30,644NGL cash distribution — — — — 4,873M&A transaction related costs 5,453 — — 5,453 —Employee severance and relocation expense 266 717 246 512 976Non-cash equity compensation 1,905 1,644 1,630 3,535 3,464Loss on early extinguishment of debt 8 — 19,922 19,930 —Selected Non-Cash items and
Other Items Impacting Comparability $ 7,617 $ (6,757) $ 21,794 $ 29,411 $ 38,467
Corporate & Other Segment
42
Investor Presentation - August 2017
(in thousands, unaudited) Three Months EndedSeptember 30, 2016
Crude -Transportation
Crude -Facilities
Crude -Supply andLogistics SemCAMS SemLogistics SemMexico SemGas
Corporateand Other Consolidated
Net income (loss) $ 13,052 $ 7,697 $ (3,248) $ 5,080 $ 948 $ 1,491 $ 3,750 $ (33,402) $ (4,632)
Add: Interest expense 154 — 186 2,175 456 43 3,367 12,136 18,517
Add: Income tax expense (benefit) — — — 1,573 (601) 349 — 10,577 11,898
Add: Depreciation and amortization expense 6,309 1,982 46 4,239 1,880 932 9,079 455 24,922
EBITDA 19,515 9,679 (3,016) 13,067 2,683 2,815 16,196 (10,234) 50,705Selected Non-Cash Items and Other Items Impacting Comparability 8,334 2 6,167 124 686 72 125 5,078 20,588
Adjusted EBITDA $ 27,849 $ 9,681 $ 3,151 $ 13,191 $ 3,369 $ 2,887 $ 16,321 $ (5,156) $ 71,293
Selected Non-Cash Items and Other Items Impacting Comparability
Loss (gain) on disposal of long-lived assets, net $ 1,018 $ — $ — $ — $ — $ — $ — $ — $ 1,018Foreign currency transaction (gain) loss — — — — 647 30 — (18) 659Remove NGL equity losses including gain on issuance of common units — — — — — — — 38 38Employee severance expense 33 2 — 1 — — — 498 534Unrealized loss on derivative activities — — 6,167 — — — — — 6,167M&A transaction related costs 3,269 3,269Depreciation and amortization included within equity earnings 7,283 — — — — — — — 7,283Non-cash equity compensation — — — 123 39 42 125 1,291 1,620Selected Non-Cash Items and Other Items Impacting Comparability $ 8,334 $ 2 $ 6,167 $ 124 $ 686 $ 72 $ 125 $ 5,078 $ 20,588
Reconciliation of Net Income to Adjusted EBITDA
43
Top Related