first quarter 2018 resultss21.q4cdn.com/.../doc...presentation-1q-2018-final.pdf · first quarter...

First Quarter 2018 ResultsEarnings Conference Call

May 9, 2018

First Quarter 2018 Results

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Non-GAAP Financial MeasuresSemGroup’s non-GAAP measures, Adjusted EBITDA and Total Segment Profit, are not GAAP measures and are not intended to be used in lieu of GAAPpresentation of net income (loss) and operating income, respectively, which are the most closely associated GAAP measures.

Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization, adjusted for selected items that SemGroup believes impact thecomparability of financial results between reporting periods. In addition to non-cash items, we have selected items for adjustment to EBITDA which managementfeels decrease the comparability of our results among periods. These items are identified as those which are generally outside of the results of day to dayoperations of the business. These items are not considered non-recurring, infrequent or unusual, but do erode comparability among periods in which they occurwith periods in which they do not occur or occur to a greater or lesser degree. Historically, we have selected items such as gains on the sale of NGL EnergyPartners LP common units, costs related to our predecessor’s bankruptcy, significant business development related costs, significant legal settlements,severance and other similar costs. Management believes these types of items can make comparability of the results of day to day operations among periodsdifficult and have chosen to remove these items from our Adjusted EBITDA. We expect to adjust for similar types of items in the future. Although we presentselected items that we consider in evaluating our performance, you should be aware that the items presented do not represent all items that affect comparabilitybetween the periods presented. Variations in our operating results are also caused by changes in volumes, prices, mechanical interruptions and numerous otherfactors. We do not adjust for these types of variances.

Total Segment Profit represents revenue, less cost of products sold (exclusive of depreciation and amortization) and operating expenses, plus equity earningsand is adjusted to remove unrealized gains and losses on commodity derivatives and to reflect equity earnings on an EBITDA basis. Reflecting equity earningson an EBITDA basis is achieved by adjusting equity earnings to exclude our percentage of interest, taxes, depreciation and amortization from equity earnings foroperated equity method investees. For our investment in NGL Energy, we exclude equity earnings and include cash distributions received. Segment profit is themeasure by which management assess the performance of our reportable segments.

These measures may be used periodically by management when discussing our financial results with investors and analysts and are presented as managementbelieves they provide additional information and metrics relative to the performance of our businesses. These non-GAAP financial measures have importantlimitations as analytical tools because they exclude some, but not all, items that affect the most directly comparable GAAP financial measures. You should notconsider non-GAAP measures in isolation or as substitutes for analysis of our results as reported under GAAP. Management compensates for the limitations ofour non-GAAP measures as analytical tools by reviewing the comparable GAAP measures, understanding the differences between the non-GAAP measure andthe most comparable GAAP measure and incorporating this knowledge into its decision-making processes. We believe that investors benefit from having accessto the 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.


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Certain matters contained in this Presentation include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended,and Section 21E of the Securities Exchange Act of 1934, as amended. We make these forward-looking statements in reliance on the safe harbor 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 100 percent of theequity interests in Buffalo Parent Gulf Coast Terminals LLC, the parent company of Buffalo Gulf Coast Terminals LLC and HFOTCO LLC, doing business asHouston Fuel Oil Terminal Company (“HFOTCO”); the loss of, or a material nonpayment or nonperformance by, any of our key customers; the amount of cashdistributions, capital requirements and performance of our investments and joint ventures; the consequences of any divestitures of non-strategic operating assets ordivestitures of interests in some of our operating assets through partnerships and/or join ventures; the amount of collateral required to be posted from time to time inour commodity purchase, sale or derivative transactions; the impact of operational and developmental hazards and unforeseen interruptions; our ability to obtainnew sources of supply of petroleum products; competition from other midstream energy companies; our ability to comply with the covenants contained in our creditagreements, continuing covenant agreement, and the indentures governing our notes, including requirements under our credit agreements and continuing covenantagreement to maintain certain financial ratios; our ability to renew or replace expiring storage, transportation and related contracts; the overall forward markets forcrude oil, natural gas and natural gas liquids; the possibility that the construction or acquisition of new assets may not result in the corresponding anticipatedrevenue increases; any future impairment of goodwill resulting from the loss of customers or business; changes in currency exchange rates; weather and othernatural phenomena, including climate conditions; a cyber attack involving our information systems and related infrastructure, or that of our business associates; therisks and uncertainties of doing business outside of the U.S., including political and economic instability and changes in local governmental laws, regulations andpolicies; 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 andprotection of the environment; the possibility that our hedging activities may result in losses or may have a negative impact on our financial results; generaleconomic, market and business conditions; as well as other risk factors discussed from time to time in our each of our documents and reports filed with the SEC.

Readers are cautioned not to place undue reliance on any forward-looking statements contained in this 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: SemGroup Twitter and LinkedIn

Forward-Looking Information

http://ir.semgroupcorp.com


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Ñ Execute 2018 operating budget and long-term strategic plan:• First Quarter Adjusted EBITDA(1): $93.4 million, full year 2018 guidance of $385 to $415 million

• First Quarter Capex Spend: $123 million, full year 2018 guidance of $350 million

• Capital Raise Plan ~$800 million◦ $150 million: Sale of SemMexico and SemLogistics(2)

◦ $300 million: Sale of Glass Mountain Pipeline - December 2017◦ $350 million: Preferred equity raise - January 2018

• Paid HFOTCO Final Payment of ~$580 million - April 2018(3)

Ñ Solid growth in earnings driven by secure cash flows:• Gross Margin take-or-pay nearly 60%

Ñ Streamline & simplify business with focus on three high quality areas:• Canada, Mid-Continent and Gulf Coast

2018: Delivering as Promised

1) Non-GAAP Financial Data Reconciliations are included in the Appendix to this presentation2) Approximate after-tax cash proceeds, SemMaterials Mexico closed March 2018 and SemLogistics closed April 20183) Reflects early payment discount of approximately $20 million


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Ñ White Cliffs Pipeline NGL Conversion • Convert one of the 12" pipelines from crude to NGL Y-grade service

• Transport NGLs from capacity constrained DJ Basin to MontBelvieu via Southern Hills Pipeline

• Initial capacity of 90,000 bpd and expandable up to 120,000 bpd

• Backstopped by 10-year agreement with DCP Midstream, thesecond largest gas processor in the DJ Basin

• DCP has contracted 50,000 bpd of NGL transportation capacity

• Conversion line will be taken out of service late 1Q19 and expectedto be completed by 4Q19

• SEMG will construct a 12-mile interconnect south of Cushing tobring NGLs to Southern Hills Pipeline

• Joint open season to attract additional commitments from 3rdparties

• SEMG capex spend of ~$30 to 33 million(1), minimal spend in 2018

• Clear path to maintain current crude volumes

DJ Basin NGL Take-Away Solution

The pipeline conversion will diversify White CliffsPipeline delivery capabilities and enhance serviceto Colorado’s NGL capacity-constrained DJ Basin

1) Represents SemGroup's 51% expected spend; total project spend of $60-66 million, minimal capital in 2018


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1) Net income (loss) attributable to SemGroup 2) Non-GAAP Financial Data Reconciliations are included in the Appendix to this presentation3) The $12.5 million consists of the following 4Q17 non-recurring earnings: $4 million Glass Mountain Pipeline, $3.5 million and $5 million take-or-pay deficiencies at SemCAMS and Crude Facilities segments, respectively

($ in millions, except per share)

Net Income (loss)(1) $(10.3) $9.6 $(19.1) $2.6 $(33.0)Adjusted EBITDA(2) 60.7 65.4 90.7 111.5 93.4

Cash Interest Expense 18.0 18.4 29.6 35.2 32.5Maintenance Capex 8.3 11.9 12.7 9.6 7.7Cash Taxes 1.2 1.7 0.2 4.1 1.8Common Dividend declared per share $0.4500 $0.4500 $0.4500 $0.4725 $0.4725

Ñ Key Highlights• Net income decreased from 4Q17, primarily due to approximately $27 million reduction in net gains

and losses related to divestitures and impairments

• Adjusted EBITDA decreased 16%, primarily due to $12.5 million(3) of non-recurring earnings recordedin 4Q17, coupled with approximately $4.2 million HFOTCO one-time expense recorded in 1Q18

• Declared common stock dividend of $0.4725 per share

• Elected non-cash, payment-in-kind (PIK) preferred stock dividend


1Q17 2Q17 3Q17 4Q17 1Q18


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($ in millions)

Crude Transportation $28.3 $29.0 $34.6 $41.6 $34.3Crude Facilities 9.6 9.5 8.8 14.1 9.3Crude Supply and Logistics (2.4) (2.2) (1.7) (1.5) (6.6)HFOTCO(1) — — 28.5 33.0 31.0SemGas 18.2 19.5 15.6 14.5 14.3SemCAMS 16.9 19.0 16.7 23.7 22.1Corporate/Other 8.3 8.3 8.4 8.2 11.0

Total Segment Profit $78.9 $83.1 $110.9 $133.6 $115.4

1) HFOTCO acquisition closed July 17, 2017

Segment Profit

Ñ First Quarter 2018 vs Fourth Quarter 2017• Crude Transportation

◦ Absent ~$4 million related to Glass Mountain Pipeline 4Q17 earnings ◦ Field Services down ~$4 million driven primarily from lower volumes resulting from weather impacts during the quarter

• Crude Facilities - decrease related to recognition of approximately $5 million Platteville take-or-pay deficiency in 4Q17• Crude Supply and Logistics - lower marketing and blending margins• HFOTCO - down $2 million as increased throughput volumes were more than offset by a $4 million write-off of an insurance claim receivable• SemGas - flat with growing STACK volumes offsetting decline in Mississippi Lime • SemCAMS - decrease related to the recognition of $3.5 million take-or-pay deficiency and producer recoveries in 4Q17,

partially offset by timing of operating expenses

1Q17 2Q17 3Q17 4Q17 1Q18


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Leverage and Liquidity($ in millions, unaudited)

3/31/2018

SemGroup (B2 / B+)

Revolving Credit Facility - $1.0 Billion due 2021 $ —

5.625% Senior unsecured notes due 2022 400




Total SEMG Debt $ 1,375

HFOTCO (Ba3 / BB-)

Revolving Credit Facility - $75 Million due 2019 $ 60

Term Loan due 2021 531

Hurricane Ike Bonds due 2050 225

Total HFOTCO Debt $ 816

Leverage Metrics

SEMG Net Leverage Ratio (max 5.5x)(1) 2.8x

HFOTCO Net Leverage Ratio (max 7.5x)(2) 6.7x

Consolidated Net Leverage Ratio(3) 4.1x

Consolidated Available Liquidity(4) $ 1,261

1) SEMG net leverage calculated per the revolving credit agreement definitions which include material project adjustments and HFOTCO distributions2) Calculated as net debt to LTM EBITDA 3) Calculated as consolidated net debt to consolidated covenant EBITDA, including material project adjustments and pro forma full-year HFOTCO 4) Available liquidity is reduced for outstanding letters of credit

Ñ Preferred Equity• Offering size - $350 million• Dividend - 7%• Conversion Price - $33.00 per share• Closing Date - January 19, 2018

Ñ Targeting consolidated leverage of 5.0x or lower by year-end 2019

Ñ No significant debt maturities until 2021


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Ñ 2018: Year of Execution• Execute 2018 operating budget and long-term strategic plan

• Solid growth in earnings driven by secure cash flows

• Streamline and simplify business with focus on three high quality areas: ◦ Canada, Mid-Continent and Gulf Coast

▪ Capital projects delivered on time / on budget

Ñ 2019 & Beyond: Well-Positioned for Strong Value Creation• New contributions from key projects: Wapiti, Smoke Lake and HFOTCO

• White Cliffs conversion: De-risk DJ Basin assets and created incremental economics

TransformingPortfolio

ExecutingOpportunities

DeliveringShareholder

Value

Clear Path to Year-Over-Year Growth

Appendix


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($in

mill

ions

)

2016 2017 2018E

$283

$328

$385 - $415

2016 - 2018 CAGR of ~20%

2018 Adjusted EBITDA Guidance

($ in millions)

2018 Adjusted EBITDA $385 - $415

Continuing Portfolio Transformation through 2018 for Long-Term Financial Strength

Ñ Growing earnings while improving quality of earningsÑ Divestments contributed $34 million of 2017 Adjusted EBITDAÑ Additional EBITDA to come online in 2019 already contracted

Key Guidance AssumptionsCrudeWhite Cliffs Pipeline Average Volumes (mbbl/d) 100-110Average Cushing Terminal Utilization 95-100%

SemGasAverage Processing Volumes (mmcf/d) 375-400

SemCAMSAverage Throughput Volumes (mmcf/d) 425-440

HFOTCOAverage Terminal Utilization 95-100%

Ñ 2018 divestments contribute ~$9 million of 2018 Adjusted EBITDAÑ SemCAMS - KA plant turnaround in 2Q18Ñ Assume no U.S. cash taxes and minimal foreign cash taxes in 2018


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Key Projects Driving Financial Growth 2018, 2019 and beyond

2018 Capital Expenditures Guidance

Projects 2Q18 3Q18 4Q18 1H19 2H19 2020+HFOTCO Ship Dock 5 & Crude Storage Tanks: $120mm(1) ~7x EBITDA multipleWapiti Plant: $250mm ~6x EBITDA multipleSmoke Lake Plant: $50mm ~6x EBITDA multipleWhite Cliffs Pipeline, 12" NGL Pipeline Conversion: $32mm(2) < 4x EBITDA multiple

Maintenance Growth

Total Capital Expenditures

($in

mill

ions

)

2016 2017 2018e

$52 $45 $40

$255

$307$447

$492

$310

$350Canada

Mid-Continent

Gulf Coast

Maintenance

2018 Capex Guidance - $350 millionSpending by Strategic Area

$19355%

$5014%

$6719%

$4011%

1) Expected SemGroup project spend on HFOTCO projects; excludes ~$65 million spent prior to close. The 7x multiple is based on the total project cost of $185 million2) Represents SemGroup's 51% expected spend; total project spend of $60-66 million, minimal capital in 2018

12%


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1Q17 2Q17 3Q17 4Q17 1Q18Crude TransportationTransportation Volumes (mbbl/d) 179 182 190 193 182White Cliffs Pipeline Volumes (mbbl/d) 111 107 105 92 107Crude FacilitiesAverage Cushing Terminal Utilization 100% 94% 94% 100% 98%HFOTCO(1)

Average Terminal Utilization n/a n/a 98% 98% 97%SemGas(2)

Total Average Processing Volumes (mmcf/d) 287 277 265 252 305SemCAMS(3)

Total Average Throughput Volumes (mmcf/d) 414 349 414 452 441

Operational Summary

1) HFOTCO acquisition closed July 17, 2017 2) SemGas volumes include total volumes processed - Northern Oklahoma and Sherman, Texas3) SemCAMS volumes include total volumes processed - K3, KA and West Fox Creek facilities4) LTM March 31, 2018, pro forma for full-year HFOTCO acquisition and Maurepas Pipeline

Over 95% of total LTM gross margin from fee based cash flows

Take-or-Pay Fixed Fee POP/Marketing

2014 2015 2016 2017 2018

23% 30% 38% 49% 58%

64% 59% 51%46% 39%

13% 11% 11%

(4)

5% 3%


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Consolidated Balance Sheets

(in thousands, unaudited, condensed) March 31, 2018

December 31, 2017

ASSETSCurrent assets $ 923,524 $ 902,899Property, plant and equipment, net 3,380,574 3,315,131Goodwill and other intangible assets 647,544 655,945Equity method investments 279,054 285,281Other noncurrent assets, net 142,845 132,600Noncurrent assets held for sale 65,784 84,961Total assets $ 5,439,325 $ 5,376,817

LIABILITIES, PREFERRED STOCK AND OWNERS' EQUITYCurrent liabilities:

Current portion of long-term debt $ 5,527 $ 5,525Other current liabilities 625,131 761,036

Total current liabilities 630,658 766,561

Long-term debt, excluding current portion 2,733,957 2,853,095Other noncurrent liabilities 97,935 85,080Noncurrent liabilities held for sale 14,258 13,716Total liabilities 3,476,808 3,718,452

Preferred stock 342,354 —Owners' equity 1,620,163 1,658,365Total liabilities, preferred stock and owners' equity $ 5,439,325 $ 5,376,817


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Consolidated Statements of Operations and Comprehensive Income (Loss)(in thousands, except per share amounts, unaudited, condensed) 2018 2017

Q1 Q1 Q2 Q3 Q4 FY2017Revenues $ 661,609 $ 456,100 $ 473,089 $ 545,922 $ 606,806 $ 2,081,917Expenses:

Costs of products sold, exclusive of depreciation and amortization shownbelow 496,132 348,998 340,107 398,252 427,534 1,514,891Operating 69,791 52,083 73,346 62,666 66,669 254,764General and administrative 26,477 21,712 26,819 38,389 26,859 113,779Depreciation and amortization 50,536 24,599 25,602 50,135 58,085 158,421Loss (gain) on disposal or impairment, net (3,566) 2,410 (234) 41,625 (30,468) 13,333Total expenses 639,370 449,802 465,640 591,067 548,679 2,055,188

Earnings from equity method investments 12,614 17,091 17,753 17,367 15,120 67,331Operating income (loss) 34,853 23,389 25,202 (27,778) 73,247 94,060Other expenses, net 44,805 33,571 11,966 28,574 39,487 113,598Income (loss) from continuing operations before income taxes (9,952) (10,182) 13,236 (56,352) 33,760 (19,538)Income tax expense (benefit) 23,083 95 3,625 (37,249) 31,141 (2,388)Net income (loss) (33,035) (10,277) 9,611 (19,103) 2,619 (17,150)

Less: cumulative preferred stock dividends 4,832 — — — — —Net income (loss) attributable to common shareholders $ (37,867) $ (10,277) $ 9,611 $ (19,103) $ 2,619 $ (17,150)Net income (loss) $ (33,035) $ (10,277) $ 9,611 $ (19,103) $ 2,619 $ (17,150)Other comprehensive income (loss), net of income taxes 18,171 6,033 8,952 9,230 (4,102) 20,113Comprehensive income (loss) $ (14,864) $ (4,244) $ 18,563 $ (9,873) $ (1,483) $ 2,963Net income (loss) per common share:

Basic $ (0.48) $ (0.16) $ 0.15 $ (0.25) $ 0.03 $ (0.24)Diluted $ (0.48) $ (0.16) $ 0.15 $ (0.25) $ 0.03 $ (0.24)

Weighted average shares (thousands):Basic 78,198 65,692 65,749 75,974 78,189 71,418Diluted 78,198 65,692 66,277 75,974 78,749 71,418


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(in thousands, unaudited) 2018 2017Segment Profit: Q1 Q1 Q2 Q3 Q4 FY2017

Crude Transportation $ 34,310 $ 28,251 $ 29,028 $ 34,585 $ 41,641 $ 133,505Crude Facilities 9,341 9,564 9,481 8,806 14,116 41,967Crude Supply and Logistics (6,583) (2,428) (2,173) (1,693) (1,507) (7,801)HFOTCO 30,988 — — 28,504 33,032 61,536SemGas 14,277 18,227 19,484 15,555 14,539 67,805SemCAMS 22,113 16,865 19,037 16,704 23,668 76,274Corporate and other 10,963 8,367 8,296 8,421 8,153 33,237

Total Segment Profit 115,409 78,846 83,153 110,882 133,642 406,523Less:

General and administrative expense 26,477 21,712 26,819 38,389 26,859 113,779Other expense (income) (950) (218) (508) (3,390) (516) (4,632)Pension curtailment gain (loss) — — — 3,097 (89) 3,008

Plus:M&A related costs 1,156 — 5,453 14,886 1,649 21,988Employee severance and relocation 137 558 312 104 720 1,694Non-cash equity compensation 2,196 2,757 2,803 2,957 1,736 10,253

Consolidated Adjusted EBITDA $ 93,371 $ 60,667 $ 65,410 $ 90,733 $ 111,493 $ 328,303

Segment Profit and Adjusted EBITDA


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Non-GAAP Adjusted EBITDA Calculation

(in thousands, unaudited) 2018 2017Reconciliation of net income to Adjusted EBITDA: Q1 Q1 Q2 Q3 Q4 FY2017Net income (loss) $ (33,035) $ (10,277) $ 9,611 $ (19,103) $ 2,619 $ (17,150)

Add: Interest expense 42,461 13,867 13,477 32,711 42,954 103,009Add: Income tax expense (benefit) 23,083 95 3,625 (37,249) 31,141 (2,388)Add: Depreciation and amortization expense 50,536 24,599 25,602 50,135 58,085 158,421

EBITDA 83,045 28,284 52,315 26,494 134,799 241,892Selected Non-Cash Items and

Other Items Impacting Comparability 10,326 32,383 13,095 64,239 (23,306) 86,411Adjusted EBITDA $ 93,371 $ 60,667 $ 65,410 $ 90,733 $ 111,493 $ 328,303

Selected Non-Cash Items andOther Items Impacting ComparabilityLoss (gain) on disposal or impairment, net $ (3,566) $ 2,410 $ (234) $ 41,625 $ (30,468) $ 13,333Foreign currency transaction loss (gain) 3,294 — (1,011) (747) (2,951) (4,709)Adjustments to reflect equity earnings on an EBITDA basis 4,883 6,709 6,692 6,678 6,811 26,890M&A transaction related costs 1,156 — 5,453 14,886 1,649 21,988Pension plan curtailment loss (gain) — — — (3,097) 89 (3,008)Employee severance and relocation expense 137 558 312 104 720 1,694Unrealized loss (gain) on derivative activities 2,226 27 (928) 1,833 (892) 40Non-cash equity compensation 2,196 2,757 2,803 2,957 1,736 10,253Loss on early extinguishment of debt — 19,922 8 — — 19,930Selected Non-Cash items and

Other Items Impacting Comparability $ 10,326 $ 32,383 $ 13,095 $ 64,239 $ (23,306) $ 86,411


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Non-GAAP Adjusted EBITDA Calculation

(in thousands, unaudited) 2016Reconciliation of net income to Adjusted EBITDA: Q1 Q2 Q3 Q4 FY2016Net income (loss) $ (4,893) $ 10,787 $ (4,632) $ 12,000 $ 13,262

Add: Interest expense 17,577 18,011 18,517 8,545 62,650Add: Income tax expense (benefit) (21,407) 4,658 11,898 16,119 11,268Add: Depreciation and amortization expense 24,051 25,055 24,922 24,776 98,804

EBITDA 15,328 58,511 50,705 61,440 185,984Selected Non-Cash Items and

Other Items Impacting Comparability 62,340 9,121 20,585 4,765 96,811Adjusted EBITDA $ 77,668 $ 67,632 $ 71,290 $ 66,205 $ 282,795

Selected Non-Cash Items andOther Items Impacting ComparabilityLoss on disposal or impairment, net $ 13,307 $ 1,685 $ 1,018 $ 38 $ 16,048Loss (income) from discontinued operations, net of incometaxes 2 2 (3) — 1Foreign currency transaction loss 1,469 1,543 659 1,088 4,759Adjustments to reflect equity earnings on an EBITDA basis 9,221 7,138 7,321 5,077 28,757Remove loss (gain) on sale or impairment of NGL units 39,764 (9,120) — — 30,644M&A transaction related costs — — 3,269 — 3,269Employee severance and relocation expense 259 836 534 499 2,128Unrealized loss (gain) on derivative activities (4,548) 4,477 6,167 (5,107) 989Non-cash equity compensation 2,866 2,560 1,620 3,170 10,216Selected Non-Cash items and

Other Items Impacting Comparability $ 62,340 $ 9,121 $ 20,585 $ 4,765 $ 96,811


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Reconciliation of Operating Income to Total Segment Profit

(in thousands, unaudited) 2018 2017Q1 Q1 Q2 Q3 Q4 FY2017

Operating income (loss) $ 34,853 $ 23,389 $ 25,202 $ (27,778) $ 73,247 $ 94,060Plus: Adjustments to reflect equity earnings on an EBITDA basis 4,883 6,709 6,692 6,678 6,811 26,890

Unrealized loss (gain) on derivatives 2,226 27 (928) 1,833 (892) 40General and administrative expense 26,477 21,712 26,819 38,389 26,859 113,779Depreciation and amortization 50,536 24,599 25,602 50,135 58,085 158,421Loss (gain) on disposal or impairment, net (3,566) 2,410 (234) 41,625 (30,468) 13,333

Total Segment Profit $ 115,409 $ 78,846 $ 83,153 $ 110,882 $ 133,642 $ 406,523

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