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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Rose Rock Midstream, L.P. Common Units Representing Limited Partner Interests | NYSE:RRMS | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 27.16 | 0 | 01:00:00 |
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
|
45-2934823
|
(State or other jurisdiction of
incorporation or organization)
|
(IRS Employer
Identification Number)
|
Large accelerated filer
|
x
|
Accelerated filer
|
o
|
Non-accelerated filer
|
o
|
Smaller reporting company
|
o
|
|
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
|
||
|
|
|
|
•
|
The closing and expected timing of the proposed transaction pursuant to which SemGroup Corporation will acquire all of our outstanding common units not already owned by SemGroup;
|
•
|
Insufficient cash from operations following the establishment of cash reserves and payment of fees and expenses to pay current, expected or minimum quarterly distributions;
|
•
|
Any sustained reduction in demand for, or supply of, crude oil in markets served by our midstream assets;
|
•
|
The effect of our debt level on our future financial and operating flexibility, including our ability to obtain additional capital on terms that are favorable to us;
|
•
|
Our ability to access the debt and equity markets, which will depend on general market conditions and the credit ratings for our debt obligations and equity;
|
•
|
The loss of, or a material nonpayment or nonperformance by, any of our key customers;
|
•
|
Our ability to renew or replace expiring storage, transportation and related contracts;
|
•
|
The amount of cash distributions, capital requirements, and performance of our investments and joint ventures;
|
•
|
The amount of collateral required to be posted from time to time in our purchase, sale or derivative transactions;
|
•
|
The impact of operational and developmental hazards and unforeseen interruptions;
|
•
|
Our ability to obtain new sources of supply of crude oil;
|
•
|
Competition from other midstream energy companies;
|
•
|
Our ability to comply with the covenants contained in our credit facility and the indentures governing our senior notes, including requirements under our credit facility to maintain certain financial ratios;
|
•
|
The overall forward market for crude oil;
|
•
|
The possibility that our hedging activities may result in losses or may have a negative impact on our financial results;
|
•
|
Weather and other natural phenomena, including climate conditions;
|
•
|
A cyber attack involving our information systems and related infrastructure, or that of our business associates;
|
•
|
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 the construction or acquisition of new assets may not result in the corresponding anticipated revenue increases; and
|
•
|
General economic, market and business conditions.
|
PART 1.
|
FINANCIAL INFORMATION
|
Item 1.
|
Financial Statements
|
|
(Unaudited)
|
|
|
||||
|
June 30,
2016 |
|
December 31,
2015 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
7,909
|
|
|
$
|
9,059
|
|
Accounts receivable (net of allowance of $295 and $257, respectively)
|
319,893
|
|
|
240,606
|
|
||
Receivable from affiliates
|
9,197
|
|
|
5,944
|
|
||
Inventories
|
76,343
|
|
|
59,121
|
|
||
Other current assets
|
8,192
|
|
|
4,884
|
|
||
Total current assets
|
421,534
|
|
|
319,614
|
|
||
Property, plant and equipment (net of accumulated depreciation of $138,498 and $123,394, respectively)
|
443,327
|
|
|
441,596
|
|
||
Equity method investments
|
427,961
|
|
|
438,291
|
|
||
Goodwill
|
26,628
|
|
|
26,628
|
|
||
Other intangible assets (net of accumulated amortization of $2,384 and $1,443, respectively)
|
14,626
|
|
|
15,567
|
|
||
Other noncurrent assets, net
|
3,352
|
|
|
3,894
|
|
||
Total assets
|
$
|
1,337,428
|
|
|
$
|
1,245,590
|
|
LIABILITIES AND PARTNERS' CAPITAL
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
310,685
|
|
|
$
|
243,548
|
|
Payable to affiliates
|
18,924
|
|
|
12,995
|
|
||
Accrued liabilities
|
23,030
|
|
|
22,240
|
|
||
Other current liabilities
|
3,609
|
|
|
4,246
|
|
||
Total current liabilities
|
356,248
|
|
|
283,029
|
|
||
Long-term debt, net
|
774,488
|
|
|
732,356
|
|
||
Commitments and contingencies (Note 7)
|
|
|
|
||||
Partners’ capital:
|
|
|
|
||||
Common units – public (16,133,340 and 16,094,260 units issued and outstanding, respectively)
|
71,083
|
|
|
80,829
|
|
||
Common units – SemGroup (20,704,418 units issued and outstanding)
|
126,182
|
|
|
139,470
|
|
||
General partner
|
9,427
|
|
|
9,906
|
|
||
Total partners' capital
|
206,692
|
|
|
230,205
|
|
||
Total liabilities and partners' capital
|
$
|
1,337,428
|
|
|
$
|
1,245,590
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenues, including revenues from affiliates (Note 10):
|
|
|
|
|
|
|
|
||||||||
Product
|
$
|
143,201
|
|
|
$
|
193,525
|
|
|
$
|
319,823
|
|
|
$
|
300,092
|
|
Service
|
25,943
|
|
|
29,778
|
|
|
53,272
|
|
|
57,904
|
|
||||
Total revenues
|
169,144
|
|
|
223,303
|
|
|
373,095
|
|
|
357,996
|
|
||||
Expenses, including expenses from affiliates (Note 10):
|
|
|
|
|
|
|
|
||||||||
Costs of products sold, exclusive of depreciation and amortization
|
128,763
|
|
|
173,133
|
|
|
280,154
|
|
|
269,370
|
|
||||
Operating
|
19,726
|
|
|
23,678
|
|
|
41,133
|
|
|
44,477
|
|
||||
General and administrative
|
5,428
|
|
|
6,329
|
|
|
10,328
|
|
|
11,949
|
|
||||
Depreciation and amortization
|
8,235
|
|
|
10,608
|
|
|
16,128
|
|
|
20,751
|
|
||||
Loss (gain) on disposal of long-lived assets, net
|
1,714
|
|
|
(22
|
)
|
|
2,008
|
|
|
130
|
|
||||
Total expenses
|
163,866
|
|
|
213,726
|
|
|
349,751
|
|
|
346,677
|
|
||||
Earnings from equity method investments
|
17,078
|
|
|
17,683
|
|
|
37,917
|
|
|
38,547
|
|
||||
Operating income
|
22,356
|
|
|
27,260
|
|
|
61,261
|
|
|
49,866
|
|
||||
Other expenses (income), net:
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
12,434
|
|
|
10,197
|
|
|
24,871
|
|
|
18,203
|
|
||||
Other income
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
||||
Total other expenses, net
|
12,434
|
|
|
10,192
|
|
|
24,871
|
|
|
18,198
|
|
||||
Net income
|
$
|
9,922
|
|
|
$
|
17,068
|
|
|
$
|
36,390
|
|
|
$
|
31,668
|
|
Net income allocated to general partner
|
$
|
5,537
|
|
|
$
|
5,323
|
|
|
$
|
11,405
|
|
|
$
|
10,065
|
|
Net income allocated to common unitholders
|
$
|
4,385
|
|
|
$
|
11,745
|
|
|
$
|
24,985
|
|
|
$
|
21,603
|
|
Net income per limited partner unit:
|
|
|
|
|
|
|
|
||||||||
Common unit (basic)
|
$
|
0.12
|
|
|
$
|
0.32
|
|
|
$
|
0.68
|
|
|
$
|
0.60
|
|
Common unit (diluted)
|
$
|
0.12
|
|
|
$
|
0.32
|
|
|
$
|
0.68
|
|
|
$
|
0.60
|
|
Basic weighted average number of limited partner units outstanding:
|
|
|
|
|
|
|
|
||||||||
Common units
|
36,838
|
|
|
36,790
|
|
|
36,823
|
|
|
35,803
|
|
||||
Diluted weighted average number of limited partner units outstanding:
|
|
|
|
|
|
|
|
||||||||
Common units
|
36,915
|
|
|
36,839
|
|
|
36,873
|
|
|
35,849
|
|
|
Six Months Ended June 30,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
36,390
|
|
|
$
|
31,668
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
16,128
|
|
|
20,751
|
|
||
Loss on disposal of long-lived assets, net
|
2,008
|
|
|
130
|
|
||
Amortization of debt issuance costs
|
1,659
|
|
|
1,210
|
|
||
Provision for uncollectible accounts receivable
|
38
|
|
|
—
|
|
||
Inventory valuation adjustment
|
—
|
|
|
1,235
|
|
||
Non-cash equity compensation
|
731
|
|
|
655
|
|
||
Net unrealized loss (gain) related to derivative instruments
|
(71
|
)
|
|
1,116
|
|
||
Earnings from equity method investments
|
(37,917
|
)
|
|
(38,547
|
)
|
||
Cash distributions from equity method investments
|
37,917
|
|
|
38,547
|
|
||
Changes in assets and liabilities, net of the effects of acquisitions:
|
|
|
|
||||
Decrease (increase) in accounts receivable
|
(79,325
|
)
|
|
(26,359
|
)
|
||
Decrease (increase) in receivable from affiliates
|
(3,253
|
)
|
|
(2,128
|
)
|
||
Decrease (increase) in inventories
|
(17,222
|
)
|
|
(41,844
|
)
|
||
Decrease (increase) in other current assets
|
(3,285
|
)
|
|
(1,407
|
)
|
||
Increase (decrease) in accounts payable and accrued liabilities
|
68,883
|
|
|
31,161
|
|
||
Increase (decrease) in payable to affiliates
|
5,929
|
|
|
3,683
|
|
||
Net cash provided by operating activities
|
28,610
|
|
|
19,871
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(20,390
|
)
|
|
(36,262
|
)
|
||
Proceeds from sale of long-lived assets
|
15
|
|
|
126
|
|
||
Contributions to equity method investments
|
(3,448
|
)
|
|
(23,462
|
)
|
||
Acquisitions
|
—
|
|
|
(205,071
|
)
|
||
Distributions from equity investments in excess of equity in earnings
|
13,778
|
|
|
13,077
|
|
||
Net cash used in investing activities
|
(10,045
|
)
|
|
(251,592
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Debt issuance costs
|
—
|
|
|
(5,688
|
)
|
||
Borrowings on revolving credit facility and issuance of senior secured notes, net of discount
|
165,500
|
|
|
676,208
|
|
||
Principal payments on revolving credit facility
|
(124,500
|
)
|
|
(364,000
|
)
|
||
Principal payments on capital lease obligations
|
(15
|
)
|
|
(24
|
)
|
||
Proceeds from common L.P. unit issuance, net of offering costs
|
—
|
|
|
89,119
|
|
||
Cash consideration in excess of historical cost of acquisitions from SemGroup
|
—
|
|
|
(46,264
|
)
|
||
Cash distributions to partners
|
(60,700
|
)
|
|
(53,153
|
)
|
||
Net cash provided by (used in) financing activities
|
(19,715
|
)
|
|
296,198
|
|
||
Net increase (decrease) in cash and cash equivalents
|
(1,150
|
)
|
|
64,477
|
|
||
Cash and cash equivalents at beginning of period
|
9,059
|
|
|
3,625
|
|
||
Cash and cash equivalents at end of period
|
$
|
7,909
|
|
|
$
|
68,102
|
|
1.
|
OVERVIEW
|
1.
|
OVERVIEW,
Continued
|
1.
|
OVERVIEW,
Continued
|
2.
|
EQUITY METHOD INVESTMENTS
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
White Cliffs Pipeline, L.L.C.
|
$
|
290,668
|
|
|
$
|
297,109
|
|
Glass Mountain Pipeline, LLC
|
137,293
|
|
|
141,182
|
|
||
Total equity method investments
|
$
|
427,961
|
|
|
$
|
438,291
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
White Cliffs Pipeline, L.L.C.
|
$
|
16,428
|
|
|
$
|
15,545
|
|
|
$
|
36,208
|
|
|
$
|
34,635
|
|
Glass Mountain Pipeline, LLC
|
650
|
|
|
2,138
|
|
|
1,709
|
|
|
3,912
|
|
||||
Total earnings from equity method investments
|
$
|
17,078
|
|
|
$
|
17,683
|
|
|
$
|
37,917
|
|
|
$
|
38,547
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
White Cliffs Pipeline, L.L.C.
|
$
|
21,664
|
|
|
$
|
20,551
|
|
|
$
|
45,762
|
|
|
$
|
44,705
|
|
Glass Mountain Pipeline, LLC
|
3,118
|
|
|
5,009
|
|
|
5,933
|
|
|
6,920
|
|
||||
Total cash distributions received from equity method investments
|
$
|
24,782
|
|
|
$
|
25,560
|
|
|
$
|
51,695
|
|
|
$
|
51,625
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenues
|
$
|
55,586
|
|
|
$
|
48,509
|
|
|
$
|
113,642
|
|
|
$
|
103,123
|
|
Cost of products sold
|
$
|
2,803
|
|
|
$
|
169
|
|
|
$
|
3,053
|
|
|
$
|
1,102
|
|
Operating, general and administrative expenses
|
$
|
10,125
|
|
|
$
|
8,876
|
|
|
$
|
19,727
|
|
|
$
|
16,296
|
|
Depreciation and amortization expense
|
$
|
10,084
|
|
|
$
|
8,587
|
|
|
$
|
19,047
|
|
|
$
|
17,125
|
|
Net income
|
$
|
32,575
|
|
|
$
|
30,870
|
|
|
$
|
71,822
|
|
|
$
|
68,593
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenues
|
$
|
6,898
|
|
|
$
|
9,788
|
|
|
$
|
15,470
|
|
|
$
|
20,909
|
|
Cost of sales
|
$
|
(120
|
)
|
|
$
|
(40
|
)
|
|
$
|
445
|
|
|
$
|
1,974
|
|
Operating, general and administrative expenses
|
$
|
1,618
|
|
|
$
|
1,513
|
|
|
$
|
3,463
|
|
|
$
|
2,920
|
|
Depreciation and amortization expense
|
$
|
3,989
|
|
|
$
|
3,932
|
|
|
$
|
7,925
|
|
|
$
|
7,976
|
|
Net income
|
$
|
1,407
|
|
|
$
|
4,381
|
|
|
$
|
3,632
|
|
|
$
|
8,036
|
|
3.
|
ACQUISITIONS
|
4.
|
SEGMENTS
|
|
Three months ended June 30, 2016
|
||||||||||||||||||
|
Transportation
|
|
Facilities
|
|
Supply and Logistics
|
|
Corporate and Other
|
|
Consolidated
|
||||||||||
Revenues:
|
|
||||||||||||||||||
External
|
$
|
15,644
|
|
|
$
|
10,299
|
|
|
$
|
143,201
|
|
|
$
|
—
|
|
|
$
|
169,144
|
|
Intersegment
|
5,127
|
|
|
2,527
|
|
|
—
|
|
|
(7,654
|
)
|
|
—
|
|
|||||
Total revenues
|
$
|
20,771
|
|
|
$
|
12,826
|
|
|
$
|
143,201
|
|
|
$
|
(7,654
|
)
|
|
$
|
169,144
|
|
Depreciation and amortization
|
$
|
6,171
|
|
|
$
|
1,921
|
|
|
$
|
40
|
|
|
$
|
103
|
|
|
$
|
8,235
|
|
Earnings from equity method investment
|
$
|
17,078
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,078
|
|
Segment profit
(1)
|
$
|
18,421
|
|
|
$
|
9,371
|
|
|
$
|
10,069
|
|
|
$
|
(2,793
|
)
|
|
$
|
35,068
|
|
|
Three months ended June 30, 2015
|
||||||||||||||||||
|
Transportation
|
|
Facilities
|
|
Supply and Logistics
|
|
Corporate and Other
|
|
Consolidated
|
||||||||||
Revenues:
|
|
||||||||||||||||||
External
|
$
|
22,425
|
|
|
$
|
11,402
|
|
|
$
|
189,476
|
|
|
$
|
—
|
|
|
$
|
223,303
|
|
Intersegment
|
3,562
|
|
|
—
|
|
|
—
|
|
|
(3,562
|
)
|
|
—
|
|
|||||
Total revenues
|
$
|
25,987
|
|
|
$
|
11,402
|
|
|
$
|
189,476
|
|
|
$
|
(3,562
|
)
|
|
$
|
223,303
|
|
Depreciation and amortization
|
$
|
9,038
|
|
|
$
|
1,406
|
|
|
$
|
40
|
|
|
$
|
124
|
|
|
$
|
10,608
|
|
Earnings from equity method investment
|
$
|
17,683
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,683
|
|
Segment profit
(1)
|
$
|
19,984
|
|
|
$
|
7,963
|
|
|
$
|
10,978
|
|
|
$
|
(2,472
|
)
|
|
$
|
36,453
|
|
4.
|
SEGMENTS,
Continued
|
|
Six Months Ended June 30, 2016
|
||||||||||||||||||
|
Transportation
|
|
Facilities
|
|
Supply and Logistics
|
|
Corporate and Other
|
|
Consolidated
|
||||||||||
Revenues:
|
|
||||||||||||||||||
External
|
$
|
32,839
|
|
|
$
|
20,433
|
|
|
$
|
319,823
|
|
|
$
|
—
|
|
|
$
|
373,095
|
|
Intersegment
|
12,341
|
|
|
5,272
|
|
|
—
|
|
|
(17,613
|
)
|
|
—
|
|
|||||
Total revenues
|
$
|
45,180
|
|
|
$
|
25,705
|
|
|
$
|
319,823
|
|
|
$
|
(17,613
|
)
|
|
$
|
373,095
|
|
Depreciation and amortization
|
$
|
12,030
|
|
|
$
|
3,805
|
|
|
$
|
80
|
|
|
$
|
213
|
|
|
$
|
16,128
|
|
Earnings from equity method investment
|
$
|
37,917
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
37,917
|
|
Segment profit
(1)
|
$
|
44,013
|
|
|
$
|
18,958
|
|
|
$
|
19,162
|
|
|
$
|
(4,815
|
)
|
|
$
|
77,318
|
|
Total assets at June 30, 2016 (excluding intersegment receivables)
|
$
|
739,904
|
|
|
$
|
154,359
|
|
|
$
|
430,297
|
|
|
$
|
12,868
|
|
|
$
|
1,337,428
|
|
Equity investments at June 30, 2016
|
$
|
427,961
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
427,961
|
|
|
Six Months Ended June 30, 2015
|
||||||||||||||||||
|
Transportation
|
|
Facilities
|
|
Supply and Logistics
|
|
Corporate and Other
|
|
Consolidated
|
||||||||||
Revenues:
|
|
||||||||||||||||||
External
|
$
|
42,752
|
|
|
$
|
22,807
|
|
|
$
|
292,437
|
|
|
$
|
—
|
|
|
$
|
357,996
|
|
Intersegment
|
7,283
|
|
|
—
|
|
|
—
|
|
|
(7,283
|
)
|
|
—
|
|
|||||
Total revenues
|
$
|
50,035
|
|
|
$
|
22,807
|
|
|
$
|
292,437
|
|
|
$
|
(7,283
|
)
|
|
$
|
357,996
|
|
Depreciation and amortization
|
$
|
17,656
|
|
|
$
|
2,775
|
|
|
$
|
79
|
|
|
$
|
241
|
|
|
$
|
20,751
|
|
Earnings from equity method investment
|
$
|
38,547
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
38,547
|
|
Segment profit
(1)
|
$
|
44,508
|
|
|
$
|
16,365
|
|
|
$
|
16,159
|
|
|
$
|
(5,299
|
)
|
|
$
|
71,733
|
|
Total assets at December 31, 2015 (excluding intersegment receivables)
|
$
|
745,612
|
|
|
$
|
155,186
|
|
|
$
|
328,419
|
|
|
$
|
16,373
|
|
|
$
|
1,245,590
|
|
Equity investments at December 31, 2015
|
$
|
438,291
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
438,291
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Reconciliation of segment profit to net income:
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Total segment profit
|
$
|
35,068
|
|
|
$
|
36,453
|
|
|
$
|
77,318
|
|
|
$
|
71,733
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Net unrealized loss (gain) related to derivative instruments
|
4,477
|
|
|
(1,415
|
)
|
|
(71
|
)
|
|
1,116
|
|
||||
Depreciation and amortization
|
8,235
|
|
|
10,608
|
|
|
16,128
|
|
|
20,751
|
|
||||
Interest expense
|
12,434
|
|
|
10,197
|
|
|
24,871
|
|
|
18,203
|
|
||||
Other income
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
||||
Net income
|
$
|
9,922
|
|
|
$
|
17,068
|
|
|
$
|
36,390
|
|
|
$
|
31,668
|
|
5.
|
FINANCIAL INSTRUMENTS
|
5.
|
FINANCIAL INSTRUMENTS,
Continued
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
Level 1
|
|
Netting*
|
|
Total
|
|
Level 1
|
|
Netting*
|
|
Total
|
||||||||||||
Assets
|
$
|
1,160
|
|
|
$
|
(1,160
|
)
|
|
$
|
—
|
|
|
$
|
131
|
|
|
$
|
(131
|
)
|
|
$
|
—
|
|
Liabilities
|
$
|
1,428
|
|
|
$
|
(1,160
|
)
|
|
$
|
268
|
|
|
$
|
470
|
|
|
$
|
(131
|
)
|
|
$
|
339
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Sales
|
5,890
|
|
|
7,721
|
|
|
16,310
|
|
|
13,452
|
|
Purchases
|
5,743
|
|
|
7,508
|
|
|
16,253
|
|
|
13,413
|
|
5.
|
FINANCIAL INSTRUMENTS,
Continued
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
Commodity contracts
|
$
|
—
|
|
|
$
|
268
|
|
|
$
|
—
|
|
|
$
|
339
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Commodity contracts
|
$
|
(7,127
|
)
|
|
$
|
(2,202
|
)
|
|
$
|
(3,773
|
)
|
|
$
|
(2,846
|
)
|
6.
|
LONG-TERM DEBT
|
6.
|
LONG-TERM DEBT,
Continued
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
5.625% senior unsecured notes due 2022
|
$
|
400,000
|
|
|
$
|
400,000
|
|
Unamortized debt issuance costs on 2022 notes
|
(6,442
|
)
|
|
(6,975
|
)
|
||
5.625% senior unsecured notes due 2022, net
|
393,558
|
|
|
393,025
|
|
||
|
|
|
|
||||
5.625% senior unsecured notes due 2023
|
350,000
|
|
|
350,000
|
|
||
Unamortized discount on 2023 notes
|
(5,178
|
)
|
|
(5,455
|
)
|
||
Unamortized debt issuance costs on 2023 notes
|
(4,931
|
)
|
|
(5,266
|
)
|
||
5.625% senior unsecured notes due 2023, net
|
339,891
|
|
|
339,279
|
|
||
|
|
|
|
||||
Revolving credit facility
|
41,000
|
|
|
—
|
|
||
Capital leases
|
64
|
|
|
83
|
|
||
Total long-term debt, net
|
774,513
|
|
|
732,387
|
|
||
Less: current portion of long-term debt
|
25
|
|
|
31
|
|
||
Noncurrent portion of long-term debt, net
|
$
|
774,488
|
|
|
$
|
732,356
|
|
6.
|
LONG-TERM DEBT,
Continued
|
7.
|
COMMITMENTS AND CONTINGENCIES
|
7.
|
COMMITMENTS AND CONTINGENCIES,
Continued
|
7.
|
COMMITMENTS AND CONTINGENCIES,
Continued
|
|
Volume
(Barrels)
|
|
Value
|
|||
Fixed price purchases
|
3,528
|
|
|
$
|
167,030
|
|
Fixed price sales
|
4,563
|
|
|
$
|
218,212
|
|
Floating price purchases
|
12,701
|
|
|
$
|
601,820
|
|
Floating price sales
|
15,613
|
|
|
$
|
760,170
|
|
8.
|
PARTNERS’ CAPITAL AND DISTRIBUTIONS
|
|
Common
Units -
Public
|
|
Common
Units -
SemGroup
|
|
General
Partner
Interest
|
|
Total Partners' Capital
|
||||||||
Balance at December 31, 2015
|
$
|
80,829
|
|
|
$
|
139,470
|
|
|
$
|
9,906
|
|
|
$
|
230,205
|
|
Net income
|
10,942
|
|
|
14,043
|
|
|
11,405
|
|
|
36,390
|
|
||||
Unvested distribution equivalent rights
|
66
|
|
|
—
|
|
|
—
|
|
|
66
|
|
||||
Cash distributions to partners
|
(21,485
|
)
|
|
(27,331
|
)
|
|
(11,884
|
)
|
|
(60,700
|
)
|
||||
Non-cash equity compensation
|
731
|
|
|
—
|
|
|
—
|
|
|
731
|
|
||||
Balance at June 30, 2016
|
$
|
71,083
|
|
|
$
|
126,182
|
|
|
$
|
9,427
|
|
|
$
|
206,692
|
|
Quarter Ended
|
|
Record Date
|
|
Payment Date
|
|
Distribution Per Unit
|
December 31, 2014
|
|
February 3, 2015
|
|
February 13, 2015
|
|
$0.6200
|
March 31, 2015
|
|
May 5, 2015
|
|
May 15, 2015
|
|
$0.6350
|
June 30, 2015
|
|
August 4, 2015
|
|
August 14, 2015
|
|
$0.6500
|
September 30, 2015
|
|
November 3, 2015
|
|
November 13, 2015
|
|
$0.6600
|
December 31, 2015
|
|
February 2, 2016
|
|
February 12, 2016
|
|
$0.6600
|
March 31, 2016
|
|
May 3, 2016
|
|
May 13, 2016
|
|
$0.6600
|
June 30, 2016
|
|
August 2, 2016
|
|
August 12, 2016
|
|
$0.6600
|
8.
|
PARTNERS’ CAPITAL AND DISTRIBUTIONS,
Continued
|
9.
|
EARNINGS PER LIMITED PARTNER UNIT
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income attributable to Rose Rock Midstream, L.P.
|
$
|
9,922
|
|
|
$
|
17,068
|
|
|
$
|
36,390
|
|
|
$
|
31,668
|
|
Less: General partner's incentive distribution earned
|
5,339
|
|
|
4,981
|
|
|
10,677
|
|
|
9,431
|
|
||||
Less: General partner's 2.0% ownership
|
198
|
|
|
342
|
|
|
728
|
|
|
634
|
|
||||
Net income allocated to limited partners
|
$
|
4,385
|
|
|
$
|
11,745
|
|
|
$
|
24,985
|
|
|
$
|
21,603
|
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted average number of common units outstanding
|
36,838
|
|
|
36,790
|
|
|
36,823
|
|
|
35,803
|
|
||||
Effect of non-vested restricted units
|
77
|
|
|
49
|
|
|
50
|
|
|
46
|
|
||||
Diluted weighted average number of common units outstanding
|
36,915
|
|
|
36,839
|
|
|
36,873
|
|
|
35,849
|
|
||||
Net income per limited partner unit:
|
|
|
|
|
|
|
|
||||||||
Common unit (basic)
|
$
|
0.12
|
|
|
$
|
0.32
|
|
|
$
|
0.68
|
|
|
$
|
0.60
|
|
Common unit (diluted)
|
$
|
0.12
|
|
|
$
|
0.32
|
|
|
$
|
0.68
|
|
|
$
|
0.60
|
|
10.
|
RELATED PARTY TRANSACTIONS
|
10.
|
RELATED PARTY TRANSACTIONS,
Continued
|
10.
|
RELATED PARTY TRANSACTIONS,
Continued
|
11.
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Transportation operates crude oil pipelines and truck transportation businesses. Transportation's assets include:
|
◦
|
a
388
-mile crude oil gathering and transportation pipeline system with over
630,000
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 approximately 85,000 barrels per day as well as
360,000
barrels of operational storage;
|
◦
|
a
16
-mile crude oil pipeline that connects our Platteville, Colorado crude oil terminal to the Tampa, Colorado crude oil market;
|
◦
|
a crude oil trucking fleet of over
270
transport trucks and
270
trailers;
|
◦
|
a
51%
interest in White Cliffs. White Cliffs owns a pipeline system consisting of two
527
-mile parallel lines that transport crude oil from Platteville, Colorado in the DJ Basin to Cushing, Oklahoma (the "White Cliffs Pipeline"), which we operate. The White Cliffs Pipeline recently underwent an expansion project which increased the capacity from approximately 150,000 barrels per day to approximately 215,000 barrels per day; and
|
◦
|
a
50%
interest in Glass Mountain Pipeline, LLC ("Glass Mountain"). Glass Mountain owns a 215-mile pipeline that transports crude oil in western and north central Oklahoma (the "Glass Mountain Pipeline"), which we operate. It has capacity of approximately 140,000 barrels per day as well as 440,000 barrels of operational storage.
|
•
|
Facilities operates crude oil storage and terminal businesses. Facilities' assets include:
|
◦
|
approximately
7.6 million
barrels of crude oil storage capacity in Cushing, Oklahoma, of which
6.25 million
barrels are leased to customers and
1.35 million
barrels are used for 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.
|
•
|
Supply and Logistics operates a crude oil marketing business which utilizes our Transportation and Facilities assets for marketing purposes. Additionally, Supply and Logistics includes:
|
◦
|
approximately
61,800
barrels of crude oil storage capacity in Trenton and Stanley, North Dakota.
|
•
|
our operating performance as compared to that of other companies in our industry, without regard to financing methods, historical cost basis, capital structure or the impact of fluctuating commodity prices;
|
•
|
the ability of our assets to generate sufficient cash flow to make distributions to our partners;
|
•
|
our ability to incur and service debt and fund capital expenditures; and
|
•
|
the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(in thousands, except per unit and operating data)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Statements of income data:
|
|
|
|
|
|
|
|
||||||||
Revenues, including revenues from affiliates:
|
|
|
|
|
|
|
|
||||||||
Product
|
$
|
143,201
|
|
|
$
|
193,525
|
|
|
$
|
319,823
|
|
|
$
|
300,092
|
|
Service
|
25,943
|
|
|
29,778
|
|
|
53,272
|
|
|
57,904
|
|
||||
Total revenues
|
169,144
|
|
|
223,303
|
|
|
373,095
|
|
|
357,996
|
|
||||
Expenses, including expenses from affiliates:
|
|
|
|
|
|
|
|
||||||||
Costs of products sold, exclusive of depreciation and amortization
|
128,763
|
|
|
173,133
|
|
|
280,154
|
|
|
269,370
|
|
||||
Operating
|
19,726
|
|
|
23,678
|
|
|
41,133
|
|
|
44,477
|
|
||||
General and administrative
|
5,428
|
|
|
6,329
|
|
|
10,328
|
|
|
11,949
|
|
||||
Depreciation and amortization
|
8,235
|
|
|
10,608
|
|
|
16,128
|
|
|
20,751
|
|
||||
Loss (gain) on disposal of long-lived assets, net
|
1,714
|
|
|
(22
|
)
|
|
2,008
|
|
|
130
|
|
||||
Total expenses
|
163,866
|
|
|
213,726
|
|
|
349,751
|
|
|
346,677
|
|
||||
Earnings from equity method investments
|
17,078
|
|
|
17,683
|
|
|
37,917
|
|
|
38,547
|
|
||||
Operating income
|
22,356
|
|
|
27,260
|
|
|
61,261
|
|
|
49,866
|
|
||||
Other expense, net
|
12,434
|
|
|
10,192
|
|
|
24,871
|
|
|
18,198
|
|
||||
Net income
|
$
|
9,922
|
|
|
$
|
17,068
|
|
|
$
|
36,390
|
|
|
$
|
31,668
|
|
Net income per limited partner unit:
|
|
|
|
|
|
|
|
||||||||
Common unit (basic)
|
$
|
0.12
|
|
|
$
|
0.32
|
|
|
$
|
0.68
|
|
|
$
|
0.60
|
|
Common unit (diluted)
|
$
|
0.12
|
|
|
$
|
0.32
|
|
|
$
|
0.68
|
|
|
$
|
0.60
|
|
Distributions paid per common unit
|
$
|
0.66
|
|
|
$
|
0.64
|
|
|
$
|
1.32
|
|
|
$
|
1.26
|
|
|
|
|
|
|
|
|
|
||||||||
Statements of cash flows data:
|
|
|
|
|
|
|
|
||||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
|
||||||||
Operating activities
|
$
|
14,080
|
|
|
$
|
26,941
|
|
|
$
|
28,610
|
|
|
$
|
19,871
|
|
Investing activities
|
$
|
(3,578
|
)
|
|
$
|
(21,195
|
)
|
|
$
|
(10,045
|
)
|
|
$
|
(251,592
|
)
|
Financing activities
|
$
|
(13,265
|
)
|
|
$
|
49,033
|
|
|
$
|
(19,715
|
)
|
|
$
|
296,198
|
|
|
|
|
|
|
|
|
|
||||||||
Other financial data:
|
|
|
|
|
|
|
|
||||||||
Adjusted gross margin
|
$
|
44,858
|
|
|
$
|
48,755
|
|
|
$
|
92,870
|
|
|
$
|
89,742
|
|
Adjusted EBITDA
|
$
|
44,852
|
|
|
$
|
44,718
|
|
|
$
|
93,873
|
|
|
$
|
86,836
|
|
Capital expenditures
|
$
|
9,204
|
|
|
$
|
20,831
|
|
|
$
|
20,390
|
|
|
$
|
36,262
|
|
Acquisitions
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
205,071
|
|
Contributions to equity method investments
|
$
|
2,093
|
|
|
$
|
8,280
|
|
|
$
|
3,448
|
|
|
$
|
23,462
|
|
|
|
|
|
|
|
|
|
||||||||
Operating data:
|
|
|
|
|
|
|
|
||||||||
Cushing storage capacity (MMBbls as of period end)
|
7.6
|
|
|
7.6
|
|
|
7.6
|
|
|
7.6
|
|
||||
Percent of Cushing storage capacity contracted to third parties (as of period end)
|
82
|
%
|
|
86
|
%
|
|
82
|
%
|
|
86
|
%
|
||||
Supply and Logistics volumes (average Bpd)
(1)
|
198,500
|
|
|
151,000
|
|
|
206,400
|
|
|
138,300
|
|
||||
Unloading/Platteville volumes (average Bpd)
(1)
|
56,200
|
|
|
68,600
|
|
|
47,900
|
|
|
70,000
|
|
||||
Transportation volumes (average Bpd)
(1)
|
197,600
|
|
|
212,300
|
|
|
196,900
|
|
|
200,200
|
|
||||
White Cliffs Pipeline 100% (average Bpd)
|
124,900
|
|
|
121,300
|
|
|
133,600
|
|
|
130,200
|
|
||||
Glass Mountain Pipeline 100% (average Bpd)
|
52,400
|
|
|
71,800
|
|
|
55,600
|
|
|
68,400
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Unaudited; in thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Reconciliation of operating income to Adjusted gross margin:
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Operating income
|
$
|
22,356
|
|
|
$
|
27,260
|
|
|
$
|
61,261
|
|
|
$
|
49,866
|
|
Add:
|
|
|
|
|
|
|
|
||||||||
Operating expense
|
19,726
|
|
|
23,678
|
|
|
41,133
|
|
|
44,477
|
|
||||
General and administrative expense
|
5,428
|
|
|
6,329
|
|
|
10,328
|
|
|
11,949
|
|
||||
Depreciation and amortization expense
|
8,235
|
|
|
10,608
|
|
|
16,128
|
|
|
20,751
|
|
||||
Loss (gain) on disposal of long-lived assets, net
|
1,714
|
|
|
(22
|
)
|
|
2,008
|
|
|
130
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Earnings from equity method investments
|
17,078
|
|
|
17,683
|
|
|
37,917
|
|
|
38,547
|
|
||||
Non-cash unrealized gain (loss) on derivatives, net
|
(4,477
|
)
|
|
1,415
|
|
|
71
|
|
|
(1,116
|
)
|
||||
Adjusted gross margin
|
$
|
44,858
|
|
|
$
|
48,755
|
|
|
$
|
92,870
|
|
|
$
|
89,742
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Unaudited; in thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Reconciliation of net income to Adjusted EBITDA:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
9,922
|
|
|
$
|
17,068
|
|
|
$
|
36,390
|
|
|
$
|
31,668
|
|
Add:
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
12,434
|
|
|
10,197
|
|
|
24,871
|
|
|
18,203
|
|
||||
Depreciation and amortization expense
|
8,235
|
|
|
10,608
|
|
|
16,128
|
|
|
20,751
|
|
||||
Cash distributions from equity method investments
|
24,782
|
|
|
25,560
|
|
|
51,695
|
|
|
51,625
|
|
||||
Inventory valuation adjustment
|
—
|
|
|
48
|
|
|
—
|
|
|
1,235
|
|
||||
Non-cash equity compensation
|
366
|
|
|
357
|
|
|
731
|
|
|
655
|
|
||||
Loss (gain) on disposal of long-lived assets, net
|
1,714
|
|
|
(22
|
)
|
|
2,008
|
|
|
130
|
|
||||
Provision for uncollectible accounts receivable
|
—
|
|
|
—
|
|
|
38
|
|
|
—
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Earnings from equity method investments
|
17,078
|
|
|
17,683
|
|
|
37,917
|
|
|
38,547
|
|
||||
Impact from derivative instruments:
|
|
|
|
|
|
|
|
||||||||
Total loss on derivatives, net
|
(7,127
|
)
|
|
(2,202
|
)
|
|
(3,773
|
)
|
|
(2,846
|
)
|
||||
Total realized loss (cash flow) on derivatives, net
|
2,650
|
|
|
3,617
|
|
|
3,844
|
|
|
1,730
|
|
||||
Non-cash unrealized gain (loss) on derivatives, net
|
(4,477
|
)
|
|
1,415
|
|
|
71
|
|
|
(1,116
|
)
|
||||
Adjusted EBITDA
|
$
|
44,852
|
|
|
$
|
44,718
|
|
|
$
|
93,873
|
|
|
$
|
86,836
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Unaudited; in thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Reconciliation of net cash provided by operating activities to Adjusted EBITDA:
|
|
|
|
|
|
|
|
||||||||
Net cash provided by operating activities
|
$
|
14,080
|
|
|
$
|
26,941
|
|
|
$
|
28,610
|
|
|
$
|
19,871
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Changes in operating assets and liabilities, net
|
(11,462
|
)
|
|
(386
|
)
|
|
(28,273
|
)
|
|
(36,894
|
)
|
||||
Add:
|
|
|
|
|
|
|
|
||||||||
Interest expense, excluding amortization of debt issuance costs
|
11,606
|
|
|
9,515
|
|
|
23,212
|
|
|
16,994
|
|
||||
Distributions from equity investments in excess of equity in earnings
|
7,704
|
|
|
7,876
|
|
|
13,778
|
|
|
13,077
|
|
||||
Adjusted EBITDA
|
$
|
44,852
|
|
|
$
|
44,718
|
|
|
$
|
93,873
|
|
|
$
|
86,836
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue
|
|
|
|
|
|
|
|
||||||||
Product
|
$
|
143,201
|
|
|
$
|
193,525
|
|
|
$
|
319,823
|
|
|
$
|
300,092
|
|
Service
|
25,943
|
|
|
29,778
|
|
|
53,272
|
|
|
57,904
|
|
||||
Total revenues
|
169,144
|
|
|
223,303
|
|
|
373,095
|
|
|
357,996
|
|
||||
Expenses, including expenses from affiliates:
|
|
|
|
|
|
|
|
|
|
||||||
Costs of products sold, exclusive of depreciation and amortization
|
128,763
|
|
|
173,133
|
|
|
280,154
|
|
|
269,370
|
|
||||
Operating
|
19,726
|
|
|
23,678
|
|
|
41,133
|
|
|
44,477
|
|
||||
General and administrative
|
5,428
|
|
|
6,329
|
|
|
10,328
|
|
|
11,949
|
|
||||
Depreciation and amortization
|
8,235
|
|
|
10,608
|
|
|
16,128
|
|
|
20,751
|
|
||||
Loss (gain) on disposal of long-lived assets, net
|
1,714
|
|
|
(22
|
)
|
|
2,008
|
|
|
130
|
|
||||
Total expenses
|
163,866
|
|
|
213,726
|
|
|
349,751
|
|
|
346,677
|
|
||||
Earnings from equity method investment
|
17,078
|
|
|
17,683
|
|
|
37,917
|
|
|
38,547
|
|
||||
Operating income
|
22,356
|
|
|
27,260
|
|
|
61,261
|
|
|
49,866
|
|
||||
Other expenses (income), net:
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
12,434
|
|
|
10,197
|
|
|
24,871
|
|
|
18,203
|
|
||||
Other income
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
||||
Total other expenses, net
|
12,434
|
|
|
10,192
|
|
|
24,871
|
|
|
18,198
|
|
||||
Net income
|
$
|
9,922
|
|
|
$
|
17,068
|
|
|
$
|
36,390
|
|
|
$
|
31,668
|
|
Net income per common unit (basic)
|
$
|
0.12
|
|
|
$
|
0.32
|
|
|
$
|
0.68
|
|
|
$
|
0.60
|
|
Net income per common unit (diluted)
|
$
|
0.12
|
|
|
$
|
0.32
|
|
|
$
|
0.68
|
|
|
$
|
0.60
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Pipeline transportation
|
$
|
6,672
|
|
|
$
|
8,390
|
|
|
$
|
14,747
|
|
|
$
|
16,170
|
|
Truck transportation
|
14,099
|
|
|
17,597
|
|
|
30,433
|
|
|
33,865
|
|
||||
Total revenue
|
20,771
|
|
|
25,987
|
|
|
45,180
|
|
|
50,035
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
||||||||
Operating
|
16,616
|
|
|
21,127
|
|
|
35,067
|
|
|
39,455
|
|
||||
General and administrative
|
1,098
|
|
|
2,581
|
|
|
2,236
|
|
|
4,486
|
|
||||
Depreciation and amortization
|
6,171
|
|
|
9,038
|
|
|
12,030
|
|
|
17,656
|
|
||||
Loss (gain) on disposal of long-lived assets, net
|
1,714
|
|
|
(22
|
)
|
|
1,781
|
|
|
133
|
|
||||
Total expenses
|
25,599
|
|
|
32,724
|
|
|
51,114
|
|
|
61,730
|
|
||||
Earnings from equity method investments
|
17,078
|
|
|
17,683
|
|
|
37,917
|
|
|
38,547
|
|
||||
Operating income
|
$
|
12,250
|
|
|
$
|
10,946
|
|
|
$
|
31,983
|
|
|
$
|
26,852
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue
|
$
|
12,826
|
|
|
$
|
11,402
|
|
|
$
|
25,705
|
|
|
$
|
22,807
|
|
Expenses:
|
|
|
|
|
|
|
|
||||||||
Operating
|
2,422
|
|
|
2,398
|
|
|
4,540
|
|
|
4,669
|
|
||||
General and administrative
|
1,033
|
|
|
1,041
|
|
|
2,207
|
|
|
1,773
|
|
||||
Depreciation and amortization
|
1,921
|
|
|
1,406
|
|
|
3,805
|
|
|
2,775
|
|
||||
Total expenses
|
5,376
|
|
|
4,845
|
|
|
10,552
|
|
|
9,217
|
|
||||
Operating income
|
$
|
7,450
|
|
|
$
|
6,557
|
|
|
$
|
15,153
|
|
|
$
|
13,590
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue:
|
$
|
143,201
|
|
|
$
|
189,476
|
|
|
$
|
319,823
|
|
|
$
|
292,437
|
|
Expenses:
|
|
|
|
|
|
|
|
||||||||
Costs of products sold, exclusive of depreciation and amortization shown below
|
136,417
|
|
|
176,695
|
|
|
297,767
|
|
|
276,653
|
|
||||
Operating
|
689
|
|
|
155
|
|
|
1,527
|
|
|
348
|
|
||||
General and administrative
|
503
|
|
|
233
|
|
|
1,069
|
|
|
396
|
|
||||
Depreciation and amortization
|
40
|
|
|
40
|
|
|
80
|
|
|
79
|
|
||||
Loss (gain) on disposal of long-lived assets, net
|
—
|
|
|
—
|
|
|
227
|
|
|
(3
|
)
|
||||
Total expenses
|
137,649
|
|
|
177,123
|
|
|
300,670
|
|
|
277,473
|
|
||||
Operating income
|
$
|
5,552
|
|
|
$
|
12,353
|
|
|
$
|
19,153
|
|
|
$
|
14,964
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenues
|
$
|
143,201
|
|
|
$
|
189,476
|
|
|
$
|
319,823
|
|
|
$
|
292,437
|
|
Less: Costs of products sold, exclusive of depreciation
|
136,417
|
|
|
176,695
|
|
|
297,767
|
|
|
276,653
|
|
||||
Less: Unrealized gain (loss) on derivatives, net
|
(4,477
|
)
|
|
1,415
|
|
|
71
|
|
|
(1,116
|
)
|
||||
Adjusted gross margin
|
$
|
11,261
|
|
|
$
|
11,366
|
|
|
$
|
21,985
|
|
|
$
|
16,900
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Reconciliation of operating income to Adjusted gross margin:
|
|
|
|
|
|
|
|
||||||||
Operating income
|
$
|
5,552
|
|
|
$
|
12,353
|
|
|
$
|
19,153
|
|
|
$
|
14,964
|
|
Add:
|
|
|
|
|
|
|
|
||||||||
Operating expense
|
689
|
|
|
155
|
|
|
1,527
|
|
|
348
|
|
||||
General and administrative expense
|
503
|
|
|
233
|
|
|
1,069
|
|
|
396
|
|
||||
Depreciation and amortization expense
|
40
|
|
|
40
|
|
|
80
|
|
|
79
|
|
||||
Loss (gain) on disposal of long-lived assets, net
|
—
|
|
|
—
|
|
|
227
|
|
|
(3
|
)
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss) on derivatives, net
|
(4,477
|
)
|
|
1,415
|
|
|
71
|
|
|
(1,116
|
)
|
||||
Adjusted gross margin
|
$
|
11,261
|
|
|
$
|
11,366
|
|
|
$
|
21,985
|
|
|
$
|
16,900
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(in thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Gross product revenue
|
$
|
761,254
|
|
|
$
|
757,338
|
|
|
$
|
1,393,943
|
|
|
$
|
1,333,084
|
|
Nonmonetary transaction adjustment
|
(613,576
|
)
|
|
(569,277
|
)
|
|
(1,074,191
|
)
|
|
(1,039,531
|
)
|
||||
Unrealized gain (loss) on derivatives, net
|
(4,477
|
)
|
|
1,415
|
|
|
71
|
|
|
(1,116
|
)
|
||||
Product revenue
|
$
|
143,201
|
|
|
$
|
189,476
|
|
|
$
|
319,823
|
|
|
$
|
292,437
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue
|
$
|
(7,654
|
)
|
|
$
|
(3,562
|
)
|
|
$
|
(17,613
|
)
|
|
$
|
(7,283
|
)
|
Expenses:
|
|
|
|
|
|
|
|
||||||||
Costs of products sold, exclusive of depreciation and amortization shown below
|
(7,654
|
)
|
|
(3,562
|
)
|
|
(17,613
|
)
|
|
(7,283
|
)
|
||||
Operating
|
(1
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
5
|
|
||||
General and administrative
|
2,794
|
|
|
2,474
|
|
|
4,816
|
|
|
5,294
|
|
||||
Depreciation and amortization
|
103
|
|
|
124
|
|
|
213
|
|
|
241
|
|
||||
Total expenses
|
(4,758
|
)
|
|
(966
|
)
|
|
(12,585
|
)
|
|
(1,743
|
)
|
||||
Operating loss
|
$
|
(2,896
|
)
|
|
$
|
(2,596
|
)
|
|
$
|
(5,028
|
)
|
|
$
|
(5,540
|
)
|
•
|
operating expenses, maintenance capital expenditures and cash distributions through existing cash and cash from operating activities;
|
•
|
expansion related capital expenditures and working capital deficits through cash on hand, borrowings under our credit facility and the issuance of debt securities and common units;
|
•
|
acquisitions through cash on hand, borrowings under our credit facility and the issuance of debt securities and common units; and
|
•
|
debt principal payments through cash from operating activities and refinancing when the credit facility and senior unsecured notes become due.
|
|
Six Months Ended June 30,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
28,610
|
|
|
$
|
19,871
|
|
Investing activities
|
(10,045
|
)
|
|
(251,592
|
)
|
||
Financing activities
|
(19,715
|
)
|
|
296,198
|
|
||
Change in cash and cash equivalents
|
(1,150
|
)
|
|
64,477
|
|
||
Cash and cash equivalents at beginning of period
|
9,059
|
|
|
3,625
|
|
||
Cash and cash equivalents at end of period
|
$
|
7,909
|
|
|
$
|
68,102
|
|
|
Six Months Ended June 30,
|
||||||
|
2016
|
|
2015
|
||||
Net income
|
$
|
36,390
|
|
|
$
|
31,668
|
|
Non-cash expenses, net
|
20,493
|
|
|
25,097
|
|
||
Changes in operating assets and liabilities, net
|
(28,273
|
)
|
|
(36,894
|
)
|
||
Net cash flows provided by operating activities
|
$
|
28,610
|
|
|
$
|
19,871
|
|
•
|
expansion related 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
|
|
Distribution Per Unit
|
December 31, 2014
|
|
February 3, 2015
|
|
February 14, 2015
|
|
$0.6200
|
|
|
|
|
|
|
|
March 31, 2015
|
|
May 5, 2015
|
|
May 15, 2015
|
|
$0.6350
|
June 30, 2015
|
|
August 4, 2015
|
|
August 14, 2015
|
|
$0.6500
|
September 30, 2015
|
|
November 3, 2015
|
|
November 13, 2015
|
|
$0.6600
|
December 30, 2015
|
|
February 2, 2016
|
|
February 12, 2016
|
|
$0.6600
|
|
|
|
|
|
|
|
March 31, 2016
|
|
May 3, 2016
|
|
May 13, 2016
|
|
$0.6600
|
June 30, 2016
|
|
August 2, 2016
|
|
August 12, 2016
|
|
$0.6600
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
|
|
Light Sweet
Crude Oil
Futures
($ per Barrel)
|
Three months ended June 30, 2016
|
|
|
High
|
|
$51.23
|
Low
|
|
$35.70
|
High/Low Differential
|
|
$15.53
|
|
|
|
Three months ended June 30, 2015
|
|
|
High
|
|
$61.43
|
Low
|
|
$49.14
|
High/Low Differential
|
|
$12.29
|
|
|
|
Six Months Ended June 30, 2016
|
|
|
High
|
|
$51.23
|
Low
|
|
$26.21
|
High/Low Differential
|
|
$25.02
|
|
|
|
Six Months Ended June 30, 2015
|
|
|
High
|
|
$61.43
|
Low
|
|
$43.46
|
High/Low Differential
|
|
$17.97
|
|
|
|
Year Ended December 31, 2015
|
|
|
High
|
|
$61.43
|
Low
|
|
$34.73
|
High/Low Differential
|
|
$26.70
|
|
Notional
Volume
(Barrels)
|
|
Fair Value
|
|
Effect of
10% Price
Increase
|
|
Effect of
10% Price
Decrease
|
|
Settlement
Date
|
||||||
Crude oil:
|
|
|
|
|
|
|
|
|
|
||||||
Futures
|
942 short
|
|
$
|
(268
|
)
|
|
$
|
(4,553
|
)
|
|
$
|
4,553
|
|
|
Various through December 2016
|
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
|
|||||
April 1, 2016 - April 30, 2016
|
|
121
|
|
|
$
|
11.32
|
|
|
—
|
|
|
—
|
|
May 1, 2016 - May 31, 2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
June 1, 2016 - June 30, 2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
121
|
|
|
$
|
11.32
|
|
|
—
|
|
|
—
|
|
(1
|
)
|
|
Represents shares of common units withheld from certain of our employees for payment of taxes associated with the vesting of restricted unit awards.
|
(2
|
)
|
|
The price paid per common unit represents the closing price as posted on the New York Stock Exchange on the day that the units vested.
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
Exhibit
Number
|
Description
|
2.1
|
Agreement and Plan of Merger dated as of May 30, 2016, by and among SemGroup Corporation, PBMS, LLC, Rose Rock Midstream, L.P., and Rose Rock Midstream GP, LLC (filed as Exhibit 2.1 to the Registrant's current report on Form 8-K dated May 30, 2016, filed May 31, 2016 and incorporated herein by reference).
|
31.1
|
Rule 13a-14(a)/15d-14(a) Certification of Carlin G. Conner, Chief Executive Officer.
|
31.2
|
Rule 13a-14(a)/15d-14(a) Certification of Robert N. Fitzgerald, Chief Financial Officer.
|
32.1
|
Section 1350 Certification of Carlin G. Conner, Chief Executive Officer.
|
32.2
|
Section 1350 Certification of Robert N. Fitzgerald, Chief Financial Officer.
|
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: August 5, 2016
|
ROSE ROCK MIDSTREAM, L.P.
|
||
|
|
|
|
|
By:
|
|
Rose Rock Midstream GP, LLC, its general partner
|
|
|
|
|
|
|
|
/s/ Robert N. Fitzgerald
|
|
|
|
Robert N. Fitzgerald
|
|
|
|
Senior Vice President and
Chief Financial Officer
|
Exhibit
Number
|
Description
|
2.1
|
Agreement and Plan of Merger dated as of May 30, 2016, by and among SemGroup Corporation, PBMS, LLC, Rose Rock Midstream, L.P., and Rose Rock Midstream GP, LLC (filed as Exhibit 2.1 to the Registrant's current report on Form 8-K dated May 30, 2016, filed May 31, 2016 and incorporated herein by reference).
|
31.1
|
Rule 13a-14(a)/15d-14(a) Certification of Carlin G. Conner, Chief Executive Officer.
|
31.2
|
Rule 13a-14(a)/15d-14(a) Certification of Robert N. Fitzgerald, Chief Financial Officer.
|
32.1
|
Section 1350 Certification of Carlin G. Conner, Chief Executive Officer.
|
32.2
|
Section 1350 Certification of Robert N. Fitzgerald, Chief Financial Officer.
|
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.
|
1 Year Rose Rock Midstream, L.P. Common Units Representing Limited Partner Interests Chart |
1 Month Rose Rock Midstream, L.P. Common Units Representing Limited Partner Interests Chart |
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