SEMGROUP CORP, 10-K filed on 2/26/2016
Annual Report
Document and Entity Information (USD $)
12 Months Ended
Dec. 31, 2015
Jun. 30, 2015
Jan. 31, 2016
Class A [Member]
Jan. 31, 2016
Class B
Document Type
10-K 
 
 
 
Amendment Flag
false 
 
 
 
Document Period End Date
Dec. 31, 2015 
 
 
 
Document Fiscal Period Focus
FY 
 
 
 
Document Fiscal Year Focus
2015 
 
 
 
Entity Registrant Name
SemGroup Corporation 
 
 
 
Entity Central Index Key
0001489136 
 
 
 
Current Fiscal Year End Date
--12-31 
 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
 
Entity Common Stock, Shares Outstanding
 
 
43,932,174 
Entity Well-known Seasoned Issuer
Yes 
 
 
 
Entity Public Float
 
$ 3,466,750,226 
 
 
Entity Current Reporting Status
No 
 
 
 
Entity Voluntary Filers
No 
 
 
 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Current assets:
 
 
Cash and cash equivalents
$ 58,096 
$ 40,598 
Restricted cash
32 
6,980 
Accounts receivable (net of allowance of $3,019 and $3,260, respectively)
326,713 
351,334 
Receivable from affiliates
5,914 
16,819 
Inventories
70,239 
43,532 
Other current assets
19,387 
20,017 
Total current assets
480,381 
479,280 
Property, plant and equipment (net of accumulated depreciation of $319,769 and $245,629, respectively)
1,566,821 
1,256,825 
Equity method investments
551,078 
577,920 
Goodwill
48,032 
58,326 
Other intangible assets (net of accumulated amortization of $29,515 and $20,545, respectively)
162,223 
173,065 
Other noncurrent assets, net
62,155 
44,386 
Total assets
2,870,690 
2,589,802 
Current liabilities:
 
 
Accounts payable
273,666 
257,177 
Payable to affiliates
5,033 
13,460 
Accrued liabilities
85,047 
92,694 
Payables to pre-petition creditors
3,129 
Deferred revenue
11,349 
23,688 
Other current liabilities
1,901 
1,474 
Current portion of long-term debt
31 
40 
Total current liabilities
377,027 
391,662 
Long-term debt
1,074,597 
767,092 
Deferred income taxes
200,953 
161,956 
Other noncurrent liabilities
21,757 
49,655 
Commitments and contingencies (Note 16)
   
   
SemGroup Corporation owners’ equity:
 
 
Common stock, $0.01 par value (authorized - 100,000 shares; issued - 44,863 and 44,689 shares, respectively)
439 
436 
Additional paid-in capital
1,217,255 
1,245,877 
Treasury stock, at cost (931 and 862 shares, respectively)
(5,593)
(1,332)
Accumulated deficit
(38,012)
(68,332)
Accumulated other comprehensive loss
(58,562)
(27,141)
Total SemGroup Corporation owners’ equity
1,115,527 
1,149,508 
Noncontrolling interests in consolidated subsidiaries
80,829 
69,929 
Total owners’ equity
1,196,356 
1,219,437 
Total liabilities and owners’ equity
$ 2,870,690 
$ 2,589,802 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Per Share data, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Allowance for doubtful accounts
$ 3,019 
$ 3,260 
Accumulated depreciation
319,769 
245,629 
Accumulated amortization on other intangible assets
$ 29,515 
$ 20,545 
Par value per share
$ 0.01 
$ 0.01 
Common stock shares authorized
100,000 
100,000 
Common stock shares issued
44,863 
44,689 
Treasury Stock, Shares
931 
862 
Consolidated Statements of Operations and Comprehensive Income (Loss) (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Revenues:
 
 
 
Product
$ 1,118,886 
$ 1,780,314 
$ 1,145,104 
Service
259,542 
233,239 
140,198 
Other
76,666 
109,026 
141,714 
Total revenues
1,455,094 
2,122,579 
1,427,016 
Expenses:
 
 
 
Costs of products sold, exclusive of depreciation and amortization shown below
979,549 
1,623,358 
1,020,100 
Operating
224,443 
246,613 
223,585 
General and administrative
97,366 
87,845 
78,597 
Depreciation and amortization
100,882 
98,397 
66,409 
Loss (gain) on disposal or impairment, net
11,472 
32,592 
(239)
Total expenses
1,413,712 
2,088,805 
1,388,452 
Earnings from equity method investments
81,386 
64,199 
52,477 
Gain on issuance of common units by equity method investee
6,385 
29,020 
26,873 
Operating income (loss)
129,153 
126,993 
117,914 
Other expenses (income):
 
 
 
Interest expense
69,675 
49,044 
25,142 
Foreign currency transaction loss (gain)
(1,067)
(86)
(1,633)
Other expense (income), net
(15,801)
(20,536)
45,906 
Total other expenses, net
52,807 
28,422 
69,415 
Income from continuing operations before income taxes
76,346 
98,571 
48,499 
Income tax expense (benefit)
33,530 
46,513 
(17,254)
Income from continuing operations
42,816 
52,058 
65,753 
Income (loss) from discontinued operations, net of income taxes
(4)
(1)
59 
Net income
42,812 
52,057 
65,812 
Less: net income attributable to noncontrolling interests
12,492 
22,817 
17,710 
Net income (loss) attributable to SemGroup
30,320 
29,240 
48,102 
Other comprehensive income (loss):
 
 
 
Currency translation adjustments
(32,142)
(20,551)
(6,363)
Other, net of income tax
721 
(3,736)
4,808 
Total other comprehensive income (loss)
(31,421)
(24,287)
(1,555)
Comprehensive income (loss)
11,391 
27,770 
64,257 
Less: comprehensive income attributable to noncontrolling interests
12,492 
22,817 
17,710 
Comprehensive income (loss) attributable to SemGroup
$ (1,101)
$ 4,953 
$ 46,547 
Net income attributable to SemGroup per common share (Note 18):
 
 
 
Basic
$ 0.69 
$ 0.69 
$ 1.14 
Diluted
$ 0.69 
$ 0.68 
$ 1.13 
Consolidated Statements of Changes in Owners' Equity (USD $)
In Thousands
Total
Common Stock [Member]
Additional Paid-in Capital [Member]
Treasury Stock [Member]
Accumulated Deficit [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Noncontrolling Interest [Member]
Beginning Balance at Dec. 31, 2012
$ 1,021,528 
$ 420 
$ 1,039,189 
$ (242)
$ (145,674)
$ (1,299)
$ 129,134 
Net income (loss)
65,812 
48,102 
17,710 
Other comprehensive income (loss), net of income taxes
(1,555)
(1,555)
Distributions to noncontrolling interests
(17,647)
(17,647)
Non-cash equity compensation
7,330 
6,524 
806 
Warrants exercised
21,379 
21,375 
Issuance of common stock under compensation plans
(1)
Repurchase of common stock
(371)
(371)
Net proceeds from issuance of Rose Rock Midstream, L.P. common units
210,226 
210,226 
Transfer to subsidiary in common control transaction
(67,291)
112,929 
(180,220)
Dividends paid
(25,429)
(25,429)
Unvested dividend equivalent rights
(119)
(71)
(48)
Ending Balance at Dec. 31, 2013
1,213,863 
425 
1,154,516 
(613)
(97,572)
(2,854)
159,961 
Net income (loss)
52,057 
29,240 
22,817 
Other comprehensive income (loss), net of income taxes
(24,287)
(24,287)
Distributions to noncontrolling interests
(28,494)
(28,494)
Non-cash equity compensation
8,262 
7,319 
943 
Warrants exercised
73,017 
73,008 
Issuance of common stock under compensation plans
2,172 
2,170 
Repurchase of common stock
(719)
(719)
Transfer to subsidiary in common control transaction
(31,930)
53,243 
(85,173)
Dividends paid
(44,206)
(44,206)
Unvested dividend equivalent rights
(298)
(173)
(125)
Ending Balance at Dec. 31, 2014
1,219,437 
436 
1,245,877 
(1,332)
(68,332)
(27,141)
69,929 
Net income (loss)
42,812 
30,320 
12,492 
Other comprehensive income (loss), net of income taxes
(31,421)
(31,421)
Distributions to noncontrolling interests
(40,410)
(40,410)
Non-cash equity compensation
10,405 
9,051 
1,354 
Issuance of common stock under compensation plans
1,515 
1,512 
Repurchase of common stock
(4,261)
(4,261)
Net proceeds from issuance of Rose Rock Midstream, L.P. common units
89,119 
89,119 
Transfer to subsidiary in common control transaction
(20,772)
30,680 
(51,452)
Dividends paid
(69,514)
(69,514)
Unvested dividend equivalent rights
(554)
(351)
(203)
Ending Balance at Dec. 31, 2015
$ 1,196,356 
$ 439 
$ 1,217,255 
$ (5,593)
$ (38,012)
$ (58,562)
$ 80,829 
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Cash flows from operating activities:
 
 
 
Net income (loss)
$ 42,812 
$ 52,057 
$ 65,812 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
Net unrealized (gain) loss related to derivative instruments
2,014 
(1,734)
(974)
Depreciation and amortization
100,882 
98,397 
66,409 
Loss (gain) on disposal or impairment, net
11,472 
32,592 
(216)
Equity earnings from investments
(81,386)
(64,199)
(52,477)
Gain on issuance of common units by equity method investee
(6,385)
(29,020)
(26,873)
Gain on sale of common units of equity method investee
(14,517)
(34,211)
Distributions from equity investments
95,429 
85,261 
63,651 
Amortization and write down of debt issuance costs
5,102 
3,632 
2,732 
Deferred tax expense (benefit)
29,197 
36,148 
(36,274)
Non-cash compensation expense
10,617 
8,386 
7,330 
Excess tax benefit from equity-based awards
(1,650)
(Gain) loss on fair value of warrants
13,423 
46,433 
Provision for uncollectible accounts receivable, net of recoveries
208 
360 
(372)
Inventory valuation adjustment
2,590 
5,667 
Currency (gain) loss
(1,067)
(86)
(1,633)
Changes in operating assets and liabilities (Note 22)
(15,206)
(23,365)
39,861 
Net cash provided by operating activities
181,762 
181,658 
173,409 
Cash flows from investing activities:
 
 
 
Capital expenditures
(479,530)
(270,506)
(215,609)
Proceeds from sale of long-lived assets
3,688 
4,445 
1,279 
Investments in non-consolidated subsidiaries
(46,730)
(71,131)
(173,868)
Payments to acquire businesses
(44,508)
(362,456)
Proceeds from sale of common units of equity method investee
56,318 
79,741 
Distributions from equity method investments in excess of equity in earnings
24,113 
11,734 
12,246 
Net cash provided by (used in) investing activities
(442,141)
(290,225)
(738,408)
Cash flows from financing activities:
 
 
 
Debt issuance costs
(6,289)
(8,686)
(14,936)
Borrowings on debt and other obligations
867,208 
1,254,244 
1,268,474 
Principal payments on debt and other obligations
(560,049)
(1,102,272)
(859,412)
Distributions to noncontrolling interests
(40,410)
(28,494)
(17,647)
Proceeds from warrant exercises
1,451 
225 
Repurchase of common stock
(4,261)
(719)
(371)
Dividends paid
(69,514)
(44,206)
(25,429)
Proceeds from issuance of common stock under employee stock purchase plan
1,223 
340 
Excess tax benefit from equity-based awards
1,650 
Proceeds from issuance of Rose Rock Midstream, L.P. common units, net of offering costs
89,119 
210,226 
Net cash provided by (used in) financing activities
277,027 
73,308 
561,130 
Effect of exchange rate changes on cash and cash equivalents
850 
(3,494)
3,191 
Change in cash and cash equivalents
17,498 
(38,753)
(678)
Cash and cash equivalents at beginning of period
40,598 
79,351 
80,029 
Cash and cash equivalents at end of period
$ 58,096 
$ 40,598 
$ 79,351 
Overview
Overview
OVERVIEW
SemGroup Corporation is a Delaware corporation headquartered in Tulsa, Oklahoma that provides diversified services for end-users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt.
The accompanying consolidated financial statements include the activities of SemGroup Corporation and its subsidiaries. The terms “we,” “our,” “us,” “the Company” and similar language used in these notes to consolidated financial statements refer to SemGroup Corporation and its subsidiaries.
At December 31, 2015, our reportable segments include the following:
Crude Transportation operates crude oil pipelines and truck transportation businesses in the United States. Crude Transportation’s assets include:
a 570-mile crude oil gathering and transportation pipeline system with over 650,000 barrels of associated storage capacity in Kansas and northern Oklahoma that is connected to several third-party pipelines and refineries and our storage terminal in Cushing;
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;
Maurepas Pipeline, a project underway to build three pipelines to service refineries in the Gulf Coast region, which is expected to be completed in the fourth quarter of 2016;
a 51% ownership interest in White Cliffs, which owns a 527-mile pipeline, consisting of two 12-inch common carrier, crude oil pipelines, that transports crude oil from Platteville, Colorado to Cushing, Oklahoma (the "White Cliffs Pipeline"); and
a 50% ownership interest in Glass Mountain Pipeline, LLC ("Glass Mountain"), which owns a 210-mile crude oil pipeline in western and north central Oklahoma ("the Glass Mountain Pipeline").
Crude Facilities operates crude oil storage and terminal businesses in the United States. Crude Facilities assets include:
approximately 7.6 million barrels of crude oil storage capacity in Cushing, Oklahoma, of which 6.5 million barrels are leased to customers and 1.1 million barrels are used for crude oil operations and marketing activities; and
a thirty-lane crude oil truck unloading facility with 350,000 barrels of associated storage capacity in Platteville, Colorado which connects to the origination point of the White Cliffs Pipeline.
Crude Supply and Logistics operates a crude oil marketing business which utilizes our Crude Transportation and Crude Facilities assets for marketing purposes. Additionally, Crude Supply and Logistics' assets include:
approximately 61,800 barrels of crude oil storage capacity in Trenton and Stanley, North Dakota.
SemGas, which provides natural gas gathering and processing services in the United States. SemGas owns and operates gathering systems and four processing plants with 595 million cubic feet per day of capacity.
SemCAMS, which provides natural gas gathering and processing services in Alberta, Canada. SemCAMS owns working interests in, and operates, four natural gas processing plants with a combined operating capacity of 695 million cubic feet per day.
SemLogistics, which provides refined product and crude oil storage services in the United Kingdom. SemLogistics owns a facility in Wales that has multi-product storage capacity of approximately 8.7 million barrels.
SemMexico, which purchases, produces, stores, and distributes liquid asphalt cement products in Mexico. SemMexico operates an in-country network of eleven asphalt cement terminals and modification facilities and two marine terminals.
SemStream, which owns 4,652,568 common units representing 4.4% of the total limited partner interests, as of September 30, 2015, in NGL Energy Partners LP ("NGL Energy") (NYSE: NGL) and an 11.78% interest in the general partner of NGL Energy. We report the results of our investment in NGL Energy under the equity method on a one-quarter lag (Note 5).
Consolidation And Basis Of Presentation
Consolidation and Basis of Presentation
CONSOLIDATION AND BASIS OF PRESENTATION
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States.
Consolidated subsidiaries
Our consolidated financial statements include the accounts of our controlled subsidiaries, including Rose Rock Midstream, L.P. ("Rose Rock"). All significant transactions between our consolidated subsidiaries have been eliminated. Outside ownership interests in consolidated subsidiaries are reported as noncontrolling interests in the consolidated financial statements.
In February 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis,” which adds requirements that limited partnerships must meet to qualify as voting interest entities and modifies the evaluation of whether limited partnerships are variable interest entities or voting interest entities. It also eliminates the presumption that a general partner should consolidate a limited partnership. This guidance is effective for public companies for fiscal years beginning after December 15, 2015. The Company will adopt this guidance in the first quarter of 2016. The impact is not expected to be material.
Proportionally consolidated assets
Our SemCAMS segment owns undivided interests in certain natural gas gathering and processing assets, for which we record only our proportionate share of the assets on the consolidated balance sheets. The net book value of the property, plant and equipment recorded by us associated with these undivided interests is approximately $273.0 million at December 31, 2015. We serve as operator of these facilities and incur the costs of operating the facilities (recorded as operating expenses in the consolidated statements of operations) and charge the other owners for their proportionate share of the costs (recorded as other revenue in the consolidated statements of operations).
Equity method investments
We own a 51% interest in White Cliffs. The other owners have substantive rights to participate in the management of White Cliffs. Because of this, we account for it under the equity method. In 2014 and 2013, we sold our interest in SemCrude Pipeline, which holds the 51% interest in White Cliffs, to our consolidated subsidiary, Rose Rock. No gain was recorded on these transactions as they were between entities under common control.
We own a 50% interest in Glass Mountain which we account for under the equity method. In 2015, we sold our interest in Glass Mountain Holding, LLC, which holds the 50% interest in Glass Mountain, to our consolidated subsidiary Rose Rock. No gain was recorded on the transaction as it was between entities under common control.
We own general partner and limited partner interests in NGL Energy which we account for under the equity method.
Summary of Significant Accounting Policies
Summary of Signifcant Accounting Policies
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES—The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts and disclosures in the financial statements. Our significant estimates include, but are not limited to: (1) allowances for doubtful accounts receivable; (2) estimated useful lives of assets, which impact depreciation; (3) estimated fair values used in impairment tests; (4) fair values of derivative instruments; (5) valuation allowances for deferred tax assets; and (6) accrual and disclosure of contingent losses. Although management believes these estimates are reasonable, actual results could differ materially from these estimates.
CASH AND CASH EQUIVALENTS—Cash includes currency on hand and demand and time deposits with banks or other financial institutions. Cash equivalents include highly liquid investments with maturities of three months or less at the date of purchase. Balances at financial institutions may exceed federally insured limits.
RESTRICTED CASH—During the year ended December 31, 2015, we completed the process of disbursing funds held in reserve accounts to settle pre-petition claims related to our predecessor's bankruptcy. Of the restricted cash balance of $7.0 million at December 31, 2014, approximately $3.8 million was restricted for this purpose. See "Payables to Pre-petition Creditors" below.
ACCOUNTS RECEIVABLE—Accounts receivable are reported net of the allowance for doubtful accounts. Our assessment of the allowance for doubtful accounts is based on several factors, including the overall creditworthiness of our customers, existing economic conditions, and the amount and age of past due accounts. We enter into netting arrangements with certain counterparties to help mitigate credit risk. Receivables subject to netting are presented as gross receivables (with the related accounts payable also presented gross) until such time as the balances are settled. Receivables are considered past due if full payment is not received by the contractual due date. Past due accounts are written off against the allowance for doubtful accounts only after all collection attempts have been exhausted.
INVENTORIES—Inventories primarily consist of crude oil and asphalt. Inventories are valued at the lower of cost or market, with cost generally determined using the weighted-average method. The cost of inventory includes applicable transportation costs.
We enter into exchanges with third parties whereby we acquire products that differ in location, grade, or delivery date from products we have available for sale. These exchanges are valued at cost, and although a transportation, location or product differential may be recorded, generally no gain or loss is recognized.
In July 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-11, "Inventory (Topic 330): Simplifying the Measurement of Inventory," which requires that inventory within the scope of the guidance be measured at the lower of cost and net realizable value rather than the lower of cost or market. The standard will be effective for public business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The new guidance shall be applied prospectively and early adoption is permitted. The Company will adopt this guidance in the first quarter of 2017. The impact is not expected to be material.
PROPERTY, PLANT AND EQUIPMENT—Property, plant and equipment is recorded at cost. We capitalize costs that extend or increase the future economic benefits of property, plant and equipment, and expense maintenance costs that do not. When assets are disposed of, their cost and related accumulated depreciation are removed from the balance sheet, and any resulting gain or loss is recorded as a gain or loss on disposal or impairment in the consolidated statements of operations.
Our SemCAMS segment operates plants which periodically undergo planned major maintenance activities, typically occurring every four to five years.  Planned major maintenance projects that do not increase the overall life or capacity of the related assets are recorded in operating expense as incurred, whereas major maintenance activity costs that materially increase the life or capacity of the underlying assets are capitalized. When maintenance expenses are recoverable from the producers who use the plants, they are recorded as revenue, and typically include a 10% overhead fee. 
Depreciation is calculated primarily on the straight-line method over the following estimated useful lives:
Pipelines and related facilities
10 – 31 years
Storage and terminal facilities
10 – 25 years
Natural gas gathering and processing facilities
10 – 31 years
Trucking equipment and other
3 – 7 years
Office property and equipment
3 – 31 years


Construction in process is reclassified to the fixed asset categories above and depreciation commences once the asset has been placed in-service.
LINEFILL—Pipelines and storage facilities generally require a minimum volume of product in the system to enable the system to operate. Such product, known as linefill, is generally not available to be withdrawn from the system. Linefill owned by us in facilities operated by us is recorded at historical cost, is included in property, plant and equipment in the consolidated balance sheets, and is not depreciated. We also own linefill in third-party facilities, which is included in inventory on the consolidated balance sheets.
IMPAIRMENT OF LONG-LIVED ASSETS—We test long-lived asset groups for impairment when events or circumstances indicate that the net book value of the asset group may not be recoverable. We test an asset group for impairment by estimating the undiscounted cash flows expected to result from its use and eventual disposition. If the estimated undiscounted cash flows are lower than the net book value of the asset group, we then estimate the fair value of the asset group and record a reduction to the net book value of the assets and a corresponding impairment loss.
GOODWILL—We test goodwill for impairment on an annual basis, or more often if circumstances warrant, by estimating the fair value of the reporting unit to which the goodwill relates and comparing this fair value to the net book value of the reporting unit. If fair value is less than net book value, we estimate the implied fair value of goodwill, reduce the book value of the goodwill to the implied fair value, and record a corresponding impairment loss. Our policy is to test goodwill for impairment on October 1 of each year.
INTANGIBLE ASSETS—Intangible assets are stated at cost, net of accumulated amortization, which is recorded on a straight-line or accelerated basis over the life of the asset. We review amortizable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If such a review should indicate that the carrying amount of amortizable intangible assets is not recoverable, we reduce the carrying amount of such assets to fair value.
EQUITY METHOD INVESTMENTS—We account for an investment under the equity method when we have significant influence over, but not control of, the significant operating decisions of the investee. Under the equity method, we record in the consolidated statements of operations our share of the earnings or losses of the investee, with a corresponding adjustment to the investment balance on our consolidated balance sheet. When we receive a distribution from an equity method investee, we record a corresponding reduction to the investment balance. When an equity method investee issues additional ownership interests which dilute our ownership interest, we recognize a gain or loss in our consolidated statements of operations.
We assess our equity method investments for impairment when circumstances indicate that the carrying value may not be recoverable and record an impairment when a decline in value is considered to be other than temporary.
For equity method investments for which we do not expect financial information to be consistently available on a timely basis to apply the equity method currently, our policy is to apply the equity method consistently on a one-quarter lag.
DEBT ISSUANCE COSTS—Costs incurred in connection with the issuance of long-term debt are reported as other noncurrent assets and are amortized to interest expense using the straight-line method over the term of the related debt. Use of the straight-line method of amortization does not differ materially from the “effective interest” method.
In April 2015, the FASB issued ASU 2015-03, “Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs,” which is designed to simplify presentation of debt issuance costs. The standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. In August 2015, the FASB issued ASU 2015-15, “Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements - Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting,” which amended the SEC paragraphs of ASC Subtopic 835-30 to include the language from the SEC Staff Announcement indicating that the SEC would not object to presenting deferred debt issuance costs related to line-of-credit agreements as assets and subsequently amortizing the deferred debt issuance costs ratably over the term of the agreement. The standards will be effective for U.S. public companies for annual reporting periods beginning after December 15, 2015. Early adoption is permitted. The new guidance shall be applied on a retrospective basis for all periods presented. The Company will adopt this guidance in the first quarter of 2016. The impact is not expected to be material.
COMMODITY DERIVATIVE INSTRUMENTS—We generally record the fair value of commodity derivative instruments on the consolidated balance sheets and the change in fair value as an increase or decrease to product revenue.
As shown in Note 13, the fair value of commodity derivatives at December 31, 2015 and 2014 are recorded to other current assets or other current liabilities on the consolidated balance sheets. Related margin deposits are recorded to other current assets or other current liabilities on the consolidated balance sheets. Margin deposits are not generally netted against derivative assets or liabilities.
The fair value of a derivative contract is determined based on the nature of the transaction and the market in which the transaction was executed. Quoted market prices, when available, are used to value derivative transactions. In situations where quoted market prices are not readily available, we estimate the fair value using other valuation techniques that reflect the best information available under the circumstances. Fair value measurements of derivative assets include consideration of counterparty credit risk. Fair value measurements of derivative liabilities include consideration of our creditworthiness.
We have elected “normal purchase” and “normal sale” treatment for certain commitments to purchase or sell petroleum products at future dates. This election is only available when a transaction that would ordinarily meet the definition of a derivative but instead is expected to result in physical delivery of product over a reasonable period in the normal course of business and is not expected to be net settled. Agreements accounted for under this election are not recorded at fair value; instead, the transaction is recorded when the product is delivered.
PAYABLES TO PRE-PETITION CREDITORS—During the year ended December 31, 2015, we completed the process of disbursing funds held in reserve accounts to settle pre-petition claims related to our predecessor's bankruptcy. At December 31, 2014, we recorded a liability of $3.1 million associated with these obligations and a liability of $0.7 million which is associated with discontinued operations and is reported within other current liabilities. Cash was held in accounts restricted for this purpose which was included in Restricted Cash on the balance sheet.
CONTINGENT LOSSES—We record a liability for a contingent loss when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. We record attorneys’ fees incurred in connection with a contingent loss at the time the fees are incurred. We do not record liabilities for attorneys’ fees that are expected to be incurred in the future.
ASSET RETIREMENT OBLIGATIONS—Asset retirement obligations include legal or contractual obligations associated with the retirement of long-lived assets, such as requirements to incur costs to dispose of equipment or to remediate the environmental impacts of the normal operation of the assets. We record liabilities for asset retirement obligations when a known obligation exists under current law or contract and when a reasonable estimate of the value of the liability can be made.
REVENUE RECOGNITION—Sales of product, as well as gathering and marketing revenues, are recognized at the time title to the product transfers to the purchaser, which typically occurs upon receipt of the product by the purchaser. Terminal and storage revenues are recognized at the time the service is performed. Revenue for the transportation of product is recognized upon delivery of the product to its destination. Certain revenue transactions are reported on a net basis, including certain buy/sell transactions (see “Purchases and Sales of Inventory with the Same Counterparty”). Other revenue primarily represents operating cost recovery from working interest owners in certain processing plants and is recorded when earned in accordance with the terms of related agreements. Taxes collected from customers and remitted to governmental authorities are recorded on a net basis (excluded from revenue).
In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers," which supersedes nearly all existing revenue recognition guidance under accounting principles generally accepted in the United States ("U.S. GAAP"). The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard permits using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). In August 2015, the FASB issued ASU 2015-14 which deferred the effective date of ASU 2014-09 by one year. We are currently evaluating the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements and have not yet determined the method by which we will adopt the standard. We will adopt this guidance in the first quarter of 2018.
COSTS OF PRODUCTS SOLD—Costs of products sold consists of the cost to purchase the product, the cost to transport the product to the point of sale, and the cost to store the product until it is sold.
PURCHASES AND SALES OF INVENTORY WITH THE SAME COUNTERPARTY—We routinely enter into transactions to purchase inventory from, and sell inventory to, the same counterparty. Such transactions that are entered into in contemplation of one another are recorded on a net basis.
CURRENCY TRANSLATION—The consolidated financial statements are presented in U.S. dollars. Our segments operate in four countries, and each segment has identified a “functional currency,” which is the primary currency in the environment in which the segment operates. The functional currencies include the U.S. dollar, the Canadian dollar, the British pound sterling, and the Mexican peso.
At the end of each reporting period, the assets and liabilities of each segment are translated from its functional currency to U.S. dollars using the exchange rate at the end of the month. The monthly results of operations of each segment are generally translated from its functional currency to U.S. dollars using the average exchange rate during the month. Changes in exchange rates result in currency translation gains and losses, which are recorded within other comprehensive income (loss).
Certain segments also enter into transactions in currencies other than their functional currencies. At the end of each reporting period, each segment re-measures the related receivables, payables, and cash to its functional currency using the exchange rate at the end of the period. Changes in exchange rates between the time the transactions were entered into and the end of the reporting period result in currency transaction gains or losses, which are recorded in the consolidated statements of operations.
INCOME TAXES—Deferred income taxes are accounted for under the liability method, which takes into account the differences between the basis of the assets and liabilities for financial reporting purposes and amounts recognized for income tax purposes. We record valuation allowances on deferred tax assets when, in the opinion of management, it is more likely than not that the asset will not be recovered.
We monitor uncertain tax positions and we recognize tax benefits only when management believes the relevant tax positions would more likely than not be sustained upon examination. We record any interest and any penalties related to income taxes within income tax expense in the consolidated statements of operations.
In November 2015, the FASB issues ASU 2015-17, "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes," which requires all deferred tax assets and liabilities to be classified as noncurrent in the statement of financial position. For public entities, this ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those years. The new guidance may be applied prospectively or retrospectively and early adoption is permitted. The Company has not determined which method we will apply when we adopt the standard. The Company intends to adopt this guidance in the first quarter of 2017. The impact is not expected to be material.
RECLASSIFICATIONS—Certain reclassifications have been made to conform prior year balances to the current year presentation.
PENSION BENEFITS—Pension cost and obligations are actuarially determined and are affected by assumptions including expected return on plan assets, discount rates, compensation increases, and employee turnover rates. We evaluate our assumptions periodically and make adjustments to these assumptions and the recorded liability as necessary. Actuarial gains or losses are amortized on a straight-line basis over the expected remaining service life of employees in the pension plan.
EQUITY-BASED COMPENSATION—We grant certain of our employees and non-managerial directors equity-based compensation awards which vest contingent on continued service of the recipient and, in some cases, on their achievement of specific performance targets or market conditions. We record compensation expense for these outstanding awards over applicable service or performance periods based on their grant date fair value with a corresponding increase to additional paid-in capital. The expense to be recorded over the life of the awards is discounted for expected forfeitures during the vesting period.
NONCONTROLLING INTERESTS IN CONSOLIDATED SUBSIDIARIES—Noncontrolling interests represents third-party limited partner unitholders' interests in our consolidated subsidiary, Rose Rock. Rose Rock allocates net income to its limited partners based on the distributions pertaining to the current period's available cash as defined by Rose Rock's partnership agreement. After adjusting for the appropriate period's distributions, the remaining undistributed earnings or excess distributions over earnings, if any, are allocated to Rose Rock's general partner, limited partners and participating securities in accordance with the contractual terms of Rose Rock's partnership agreement and as further prescribed under the two-class method. Incentive distribution rights do not participate in undistributed earnings.
COMPREHENSIVE INCOME (LOSS) AND ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)—Comprehensive income (loss) is defined as a change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources and includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. Our comprehensive income (loss) includes currency translation adjustments and changes in the funded status of pension benefit plans.
Rose Rock Midstream, L.P.
Rose Rock Midstream, L.P.
ROSE ROCK MIDSTREAM, L.P.
At December 31, 2015, we owned the 2% general partner interest and a 55.1% limited partner interest made up of 20,704,418 common units of Rose Rock. We also own certain incentive distribution rights, which are described below. We control the operations of Rose Rock through our ownership of the general partner interest and consolidate Rose Rock. Rose Rock owns and operates all of our domestic crude oil assets with the exception of the Maurepas Pipeline. The outside ownership interests in Rose Rock are reflected in “noncontrolling interests in consolidated subsidiaries” on our consolidated balance sheets. The portion of the net income of Rose Rock that is attributable to outside owners is reflected within “net income attributable to noncontrolling interests” in our consolidated statements of operations and comprehensive income.
Rose Rock intends to pay a minimum quarterly distribution of $0.3625 per unit to the extent it has sufficient available cash, as defined in Rose Rock’s partnership agreement. Rose Rock’s partnership agreement requires Rose Rock to distribute all of its available cash each quarter in the following manner:
 
Total Quarterly Distributions
Per Unit Target Amount
 
Marginal Percentage
Interest in Distributions
 
Unitholders
 
General
Partner
 
Incentive
Distribution
Rights
Minimum Quarterly Distributions
 
 
 
 
 
 
$
0.362500

 
98.0
%
 
2.0
%
 

First Target Distribution
above
 
$
0.362500

 
up to
 
$
0.416875

 
98.0
%
 
2.0
%
 

Second Target Distribution
above
 
$
0.416875

 
up to
 
$
0.453125

 
85.0
%
 
2.0
%
 
13.0
%
Third Target Distribution
above
 
$
0.453125

 
up to
 
$
0.543750

 
75.0
%
 
2.0
%
 
23.0
%
Thereafter
 
 
 
 
above
 
$
0.543750

 
50.0
%
 
2.0
%
 
48.0
%
 
The following table shows the distributions paid related to the earnings for each of the following periods (in thousands, except for per unit amounts):
 
Distribution
Per Unit
 
Distributions Paid
Quarter Ended
SemGroup
Noncontrolling
Interest
Common Units
Total
Distributions
General
Partner
Incentive
Distributions
Common
Units
Subordinated
Units
December 31, 2012
$
0.4025

 
$
167

$

$
1,163

$
3,377

$
3,624

$
8,331

 
 
 
 
 
 
 
 
 
March 31, 2013
$
0.4300

 
$
179

$
41

$
1,242

$
3,607

$
3,872

$
8,941

June 30, 2013
$
0.4400

 
$
183

$
72

$
1,271

$
3,692

$
3,962

$
9,180

September 30, 2013
$
0.4500

 
$
232

$
127

$
1,301

$
3,775

$
6,189

$
11,624

December 31, 2013
$
0.4650

 
$
257

$
244

$
2,041

$
3,901

$
6,398

$
12,841

 
 
 
 
 
 
 
 
 
March 31, 2014
$
0.4950

 
$
278

$
488

$
2,173

$
4,153

$
6,811

$
13,903

June 30, 2014
$
0.5350

 
$
334

$
888

$
3,646

$
4,488

$
7,362

$
16,718

September 30, 2014
$
0.5750

 
$
377

$
1,835

$
3,918

$
4,824

$
7,912

$
18,866

December 31, 2014
$
0.6200

 
$
485

$
3,487

$
6,551

$
5,202

$
8,544

$
24,269

 
 
 
 
 
 
 
 
 
March 31, 2015
$
0.6350

 
$
568

$
4,450

$
13,148

$

$
10,213

$
28,379

June 30, 2015
$
0.6500

 
$
590

$
4,979

$
13,458

$

$
10,456

$
29,483

September 30, 2015
$
0.6600

 
$
604

$
5,333

$
13,665

$

$
10,619

$
30,221

December 31, 2015
$
0.6600

(1)
$
604

$
5,333

$
13,665

$

$
10,622

$
30,224


(1) The distribution to common unitholders related to earnings for the quarter ended December 31, 2015 was payable on February 12, 2016 to holders of record at February 2, 2016.
Certain summarized balance sheet information of Rose Rock is shown below (in thousands):
 
December 31,
 
2015
 
2014
Cash
$
9,059

 
$
3,625

Other current assets
310,555

 
271,144

Property, plant and equipment, net
441,596

 
396,066

Equity method investment
438,291

 
269,635

Goodwill
26,628

 
36,116

Other noncurrent assets
31,702

 
29,677

Total assets
$
1,257,831

 
$
1,006,263

 
 
 
 
Current liabilities
$
283,029

 
$
265,682

Long-term debt
744,597

 
432,092

Partners’ capital attributable to SemGroup
149,376

 
238,560

Partners’ capital attributable to noncontrolling interests
80,829

 
69,929

Total liabilities and partners’ capital
$
1,257,831

 
$
1,006,263


Certain summarized income statement information of Rose Rock for the years ended December 31, 2015, 2014, and 2013 is shown below (in thousands):
 
Year Ended December 31,
 
2015
 
2014
 
2013
Revenue
$
844,711

 
$
1,298,097

 
$
767,202

Costs of products sold
$
671,769

 
$
1,131,362

 
$
663,759

Operating, general and administrative expenses
$
114,476

 
$
99,894

 
$
51,624

Depreciation and amortization expense
$
41,998

 
$
40,035

 
$
23,708

Earnings from equity method investment
$
76,355

 
$
57,378

 
$
17,571

Net income
$
49,673

 
$
62,925

 
$
37,515

Noncontrolling interest in consolidated subsidiaries retained by SemGroup
$

 
$
7,758

 
$
1,256

Net income attributable to Rose Rock Midstream, L.P.
$
49,673

 
$
55,167

 
$
36,259

Drop-down Transactions with Rose Rock
2015 drop-down transaction
On February 13, 2015, we contributed WOT and Glass Mountain Holding, LLC, which holds our 50% interest in Glass Mountain, to Rose Rock in exchange for (i) cash of approximately $251.2 million, (ii) the issuance of 1.75 million common units and (iii) an increase of the capital account of the general partner of Rose Rock and a related issuance of general partner interest, to allow the general partner of Rose Rock to maintain its 2% general partner interest. The cash consideration was funded through a borrowing under Rose Rock's credit facility and the issuance and sale of 2.3 million common units in an underwritten public offering for net proceeds of $89.1 million. SemGroup used the proceeds from these transactions to pay amounts owed under its revolving credit facility.
As the acquisition was between parties under common control, Rose Rock recorded its interest in acquired assets and liabilities at SemGroup's historical value and SemGroup did not recognize a gain on the transaction. Proceeds in excess of the historical value were accounted for as a dividend from Rose Rock to SemGroup and resulted in a $51.5 million reduction to noncontrolling interests in consolidated subsidiaries and an offsetting increase to additional paid-in capital of $30.7 million (net of tax impact of $20.8 million). This non-cash entry represents the portion of the proceeds in excess of historical cost which were attributed to Rose Rock's third-party unitholders.
Additionally, the acquisition of WOT created a change in reporting entity which required Rose Rock's historical results to be recast as if WOT had been part of Rose Rock in prior periods. The historical summarized financial information of Rose Rock has been recast to reflect this change. The impact to prior periods was not significant. Earnings of WOT prior to the acquisition have been allocated to the general partner. The acquisition of the equity method investment in Glass Mountain did not create a change in reporting entity. As such, prior periods have not been recast to include the historical results of Glass Mountain. There was no impact to SemGroup from the Rose Rock recast as these entities are all reported within the Crude Transportation segment.
2014 drop-down transaction
On June 23, 2014, we contributed the remaining 33% interest in SemCrude Pipeline, L.L.C. ("SCPL") to Rose Rock in exchange for (i) cash of approximately $114.4 million, (ii) the issuance of 2.425 million common units, (iii) the issuance of 1.25 million Class A units, and (iv) an increase of the capital account of the general partner and a related issuance of general partner interest, to allow the general partner to maintain its 2% general partner interest. Subsequent to this transaction, Rose Rock owns 100% of SCPL, which owns a 51% membership interest in White Cliffs. SemGroup used the proceeds from these transactions to pay amounts owed under its revolving credit facility.
The Class A units were not entitled to receive any distribution of available cash (other than upon liquidation) prior to the first day of the month immediately following the first month for which the average daily throughput volumes on the White Cliffs Pipeline for such month are 125,000 barrels per day or greater. The Class A units converted to common units in January 2015.
As this transaction was between parties under common control, Rose Rock recorded its interest in SCPL at SemGroup's historical value and as such no gain on the sale was recognized by SemGroup. Proceeds in excess of the historical value were accounted for as a dividend from Rose Rock to SemGroup and resulted in an $85.2 million reduction to noncontrolling interests in consolidated subsidiaries and an offsetting increase to additional paid-in capital of $53.2 million (net of tax impact of $31.9 million). This non-cash entry represents the portion of the proceeds in excess of historical cost which were attributed to Rose Rock's third-party unitholders.
SemGroup incurred approximately $0.9 million of expense associated with this transaction, including $0.4 million of costs incurred by Rose Rock.
2013 drop-down transactions
On January 11, 2013, we contributed a 33% interest in SCPL to Rose Rock in exchange for (i) cash of approximately $189.5 million, (ii) the issuance of 1.5 million common units, (iii) the issuance of 1.25 million Class A units and (iv) an increase of the capital account of the general partner of Rose Rock and a related issuance of general partner interest, to allow the general partner of Rose Rock to maintain its 2% general partner interest.
In connection with this transaction, Rose Rock issued and sold 2.0 million common units to third-party purchasers in a private placement for aggregate consideration of approximately $59.3 million. In addition, Rose Rock made a borrowing of $133.5 million under its revolving credit facility. The proceeds from the private placement and the borrowing were used by Rose Rock to fund the cash consideration in the transaction with us and to pay certain related transaction costs and expenses.
On December 16, 2013, we contributed an additional 33% interest in SCPL to Rose Rock in exchange for (i) cash of approximately $173.1 million, (ii) the issuance of 1.5 million common units, (iii) the issuance of 1.25 million Class A units, and (iv) an increase of the capital account of the general partner of Rose Rock and a related issuance of general partner interest, to allow the general partner of Rose Rock to maintain its 2% general partner interest. The cash consideration was funded through a borrowing under Rose Rock's credit facility.
As these transactions were between parties under common control, Rose Rock recorded its interest in SCPL at SemGroup's historical value and as such no gain was recognized by SemGroup. Proceeds in excess of the historical value were accounted for as a dividend from Rose Rock to SemGroup and resulted in a $180.2 million reduction to noncontrolling interests in consolidated subsidiaries and an offsetting increase to additional paid-in capital of $112.9 million (net of tax impact of $67.3 million). This non-cash entry represents the portion of the proceeds in excess of historical cost which were attributed to Rose Rock's third-party unitholders.
SemGroup incurred approximately $2.2 million of expense associated with these transactions, including expenses of Rose Rock. Rose Rock incurred $1.6 million of equity issuance costs which were offset against proceeds, $1.6 million of costs related to the January 2013 borrowing which were deferred, and $0.9 million of acquisition related costs which were expensed. SemGroup used the proceeds from these transactions to pay amounts owed under its revolving credit facility.
Rose Rock equity issuance
In August 2013, Rose Rock sold 4.75 million common limited partner units to third-party purchasers for $152.5 million, net of underwriting discounts and commissions. Proceeds were used to repay borrowings on the Rose Rock credit facility.
Rose Rock conversion of subordinated and Class A units
On January 1, 2015, certain operational targets were achieved by White Cliffs and all 3,750,000 Class A units held by the Company were converted to common units on a one-for-one basis. The conversion did not impact the total number of Rose Rock's outstanding units representing limited partner interests.
On February 17, 2015, certain targets specified in Rose Rock’s partnership agreement were achieved and all 8,389,709 subordinated units held by the Company were converted to common units. The conversion did not impact the total number of Rose Rock’s outstanding units representing limited partner interests.
Equity Method Investments
Equity Method Investments
EQUITY METHOD INVESTMENTS
Our equity method investments consist of the following (in thousands):
 
December 31,
 
2015
 
2014
White Cliffs
$
297,109

 
$
269,635

NGL Energy
112,787

 
162,246

Glass Mountain
141,182

 
146,039

Total equity method investments
$
551,078

 
$
577,920


Our earnings from equity method investments consist of the following (in thousands):
 
Year Ended December 31,
 
2015
 
2014
 
2013
White Cliffs
$
70,238

 
$
57,378

 
$
45,459

NGL Energy(1)
5,031

 
2,343

 
7,123

Glass Mountain
6,117

 
4,478

 
(105
)
Total earnings from equity method investments
$
81,386

 
$
64,199

 
$
52,477

(1) Excluding gains on issuance of common units of $6.4 million, $29.0 million and $26.9 million for the years ended December 31, 2015, 2014 and 2013, respectively.
Cash distributions received from equity method investments consist of the following (in thousands):
 
Year Ended December 31,
 
2015
 
2014
 
2013
White Cliffs
$
86,845

 
$
66,768

 
$
57,576

NGL Energy
19,074

 
23,404

 
18,321

Glass Mountain
13,623

 
6,823

 

Total cash distributions received from equity method investments
$
119,542

 
$
96,995

 
$
75,897


White Cliffs
Certain summarized balance sheet information of White Cliffs is shown below (in thousands):
 
December 31,
 
2015
 
2014
Current assets
$
54,091

 
$
35,623

Property, plant and equipment, net
509,068

 
471,179

Goodwill
17,000

 
17,000

Other intangible assets, net
11,974

 
16,043

Total assets
$
592,133

 
$
539,845

 
 
 
 
Current liabilities
$
9,491

 
$
11,108

Members’ equity
582,642

 
528,737

Total liabilities and members’ equity
$
592,133

 
$
539,845


Certain summarized income statement information of White Cliffs for the years ended December 31, 2015, 2014 and 2013 is shown below (in thousands):
 
Year Ended December 31,
 
2015
 
2014
 
2013
Revenue
$
206,395

 
$
160,369

 
$
133,310

Operating, general and administrative expenses
$
33,284

 
$
23,067

 
$
23,825

Depreciation and amortization expense
$
34,105

 
$
23,257

 
$
18,668

Net income
$
139,000

 
$
114,045

 
$
90,817


The equity in earnings of White Cliffs for the years ended December 31, 2015, 2014 and 2013 reported in our consolidated statements of operations is less than 51% of the net income of White Cliffs for the same period. This is due to certain general and administrative expenses we incur in managing the operations of White Cliffs that the other members are not obligated to share. Such expenses are recorded by White Cliffs, and are allocated to our membership interests. White Cliffs recorded $1.3 million, $1.6 million and $1.8 million of such general and administrative expense for the years ended December 31, 2015, 2014 and 2013, respectively.
The members of White Cliffs are required to contribute capital to White Cliffs to fund various projects. For the year ended December 31, 2015, we contributed $42.8 million to these projects, including $34.5 million of contributions for an expansion project adding approximately 65,000 barrels per day of capacity. Remaining contributions related to the expansion project will be paid in 2016 and are expected to total approximately $2.3 million. The project is expected to be completed during the first half of 2016.
In August 2014, White Cliffs completed an expansion project adding a parallel 12" pipeline from Platteville, Colorado to Cushing, Oklahoma. For the years ended December 31, 2014 and 2013, we contributed $53.3 million and $95.5 million, respectively, for project funding. This expansion increased White Cliffs’ capacity to about 150,000 barrels per day and became fully operational in the third quarter of 2014.
Our membership interest in White Cliffs is significant as defined by Securities and Exchange Commission’s Regulation S-X Rule 1-02(w). Accordingly, as required by Regulation S-X Rule 3-09, we have included the audited financial statements of White Cliffs as of December 31, 2015 and 2014 and for each of the three years in the period ended December 31, 2015 as an exhibit to this Form 10-K.
NGL Energy
At December 31, 2015, we owned 4,652,568 common units representing limited partner interests in NGL Energy, which represents approximately 4.4% of the limited partner units of NGL Energy outstanding at September 30, 2015, and an 11.78% interest in the general partner of NGL Energy.
On October 27, 2014, we agreed to terminate our right to appoint two representatives to the Board of Directors of NGL Energy Holdings LLC, the general partner of NGL Energy, and our current representatives resigned. We no longer have significant influence over NGL Energy Holdings, LLC or NGL Energy. However, in accordance with ASC 323-30-S99-1, we have continued to account for these investments under the equity method as our ownership is within the 3 to 5 percent interest which is generally considered to be more than minor.
At December 31, 2015, the fair market value of our 4,652,568 common unit investment in NGL Energy was $51.4 million, based on a December 31, 2015 closing price of $11.04 per common unit. This does not reflect our 11.78% interest in the general partner of NGL Energy. The fair value of our limited partner investment in NGL Energy is categorized as a Level 1 measurement, as it is based on quoted market prices.
During the 4th quarter of 2015 the market price of NGL Energy common units fell below our carrying value per unit. In accordance with ASC 320-10-S99 “Investments - Debt and Equity Securities” we have assessed whether such decline in value is other than temporary. The evidence management considered in such assessment included the nature and volatility of such decline, as well as the latest public financial guidance, condition, and results of NGL Energy. Based on the rapid and recent nature of such decline, and our assessment of the financial condition and near-term prospects of NGL Energy, we have concluded that the decline in the value of our investment is not other than temporary. We have the ability and intent to hold the shares for a period of time sufficient to allow for a recovery in the market value. However, we will continue to closely monitor future events and developments related to NGL Energy that would impact our conclusions about the recoverability of the investment, and if future facts and circumstances indicate that the decline in value of our investment is other than temporary, a significant impairment may be recorded.
Our policy is to record our equity in earnings of NGL Energy on a one-quarter lag, as we do not expect information on the earnings of NGL Energy to always be available in time to consistently record the earnings in the quarter in which they are generated. Accordingly, the equity in earnings from NGL Energy, which is reflected in our consolidated statements of operations and comprehensive income for the years ended December 31, 2015, 2014 and 2013 relates to the earnings of NGL Energy for the twelve months ended September 30, 2015, 2014 and 2013 respectively.
Certain unaudited summarized balance sheet information of NGL Energy is shown below (in thousands):
 
(Unaudited)
 September 30,
 
2015
 
2014
Current assets
$
1,276,919

 
$
2,585,053

Property plant and equipment, net
1,845,112

 
1,433,313

Goodwill
1,490,928

 
1,170,490

Intangible and other assets, net
1,836,878

 
1,362,823

Total assets
$
6,449,837

 
$
6,551,679

 
 
 
 
Current liabilities
$
852,170

 
$
1,759,980

Long-term debt
3,093,694

 
2,437,351

Other noncurrent liabilities
17,679

 
39,518

Equity
2,486,294

 
2,314,830

Total liabilities and equity
$
6,449,837

 
$
6,551,679


Certain unaudited summarized income statement information of NGL Energy for the twelve months ended September 30, 2015, 2014 and 2013 is shown below (in thousands):
 
(Unaudited)
Twelve Months Ended September 30,
 
2015
 
2014
 
2013
Revenue
$
14,504,581

 
$
15,748,520

 
$
5,935,715

Costs of products sold
$
13,573,066

 
$
15,054,291

 
$
5,478,361

Operating, general and administrative expenses
$
625,035

 
$
440,609

 
$
276,905

Depreciation and amortization expense
$
221,067

 
$
162,443

 
$
94,050

Net income
$
22,995

 
$
11,409

 
$
44,378


During the years ended December 31, 2015, 2014 and 2013, our limited partnership interest was diluted in connection with NGL Energy common unit issuances. Accordingly, we recorded non-cash gains of $6.4 million, $29.0 million and $26.9 million for the years ended December 31, 2015, 2014 and 2013, respectively, related to these transactions, which are included in "gain on issuance of common units by equity method investee" in our consolidated statements of operations and comprehensive income.
During the year ended December 31, 2015, we sold 1,999,533 of our NGL Energy common units for $56.3 million, net of related costs of $0.5 million. We recorded a net gain of $14.5 million in "other expense (income), net" in our consolidated statement of operations and comprehensive income. During the year ended December 31, 2014, we sold 2,481,308 of our NGL Energy common units for $88.8 million, net of related costs of $3.1 million. We recorded a net gain of $34.2 million in "other expense (income), net" in our consolidated statement of operations and comprehensive income.
Our ownership interest in NGL Energy is significant as defined by Securities and Exchange Commission’s Regulation S-X Rule 1-02(w). Accordingly, as required by Regulation S-X Rule 3-09, we will amend this Form 10-K to include the audited financial statements of NGL Energy as of March 31, 2016 and 2015 and for each of the three years in the period ended March 31, 2016 as an exhibit, when available.
Glass Mountain
We hold a 50% interest in Glass Mountain which we account for under the equity method. Glass Mountain began operations in the first quarter of 2014.
The excess of the recorded amount of our investment over the book value of our share of the underlying net assets represents equity method goodwill and capitalized interest of $31.0 million and $4.0 million, respectively, at December 31, 2015. Capitalized interest is amortized as a reduction of earnings from equity method investments.
The equity in earnings of Glass Mountain for the years ended December 31, 2015 and 2014 reported in our consolidated statement of operations and comprehensive income is less than 50% of the net income of Glass Mountain for the same period due to amortization of capitalized interest for the period.
Certain summarized balance sheet information of Glass Mountain is shown below (in thousands):
 
December 31,
 
2015
 
2014
Current assets
$
7,856

 
$
8,810

Property, plant and equipment, net
205,920

 
215,876

Total assets
$
213,776

 
$
224,686

 
 
 
 
Current liabilities
$
1,036

 
$
2,643

Other liabilities
28

 
42

Members’ equity
212,712

 
222,001

Total liabilities and members’ equity
$
213,776

 
$
224,686


Certain summarized income statement information of Glass Mountain for the year ended December 31, 2015 and 2014 is shown below (in thousands):
 
Year Ended December 31,
 
2015
 
2014
Revenue
$
38,526

 
$
30,398

Cost of Sales
$
3,392

 
$
757

Operating, general and administrative expenses
$
6,643

 
$
6,419

Depreciation and amortization expense
$
15,828

 
$
13,872

Net income
$
12,657

 
$
9,344


We invested $2.7 million, $16.2 million and $57.8 million in Glass Mountain for the years ended December 31, 2015, 2014 and 2013, respectively.
Our ownership interest in Glass Mountain is not significant as defined by Securities and Exchange Commission's Regulation S-X Rule 1-02(w). Accordingly, no audited financial statements of Glass Mountain pursuant to Regulation S-X 3-09 have been included as an exhibit to this Form 10-K.
Acquisitions
Business Combination Disclosure [Text Block]
ACQUISITIONS
During the year ended December 31, 2014, we completed the following acquisition:
Crude oil trucking assets
On June 24, 2014, our Crude Transportation segment acquired crude oil trucking assets from a subsidiary of Chesapeake Energy Corporation ("Chesapeake") (NYSE: CHK) for $44.0 million in cash. Highlights of the transaction include:
124 trucks, 122 trailers and miscellaneous equipment; and
a long-term transportation agreement with Chesapeake Energy Marketing, Inc.
During the year ended December 31, 2013, we completed the following acquisitions:
Mid-America Midstream Gas Services, L.L.C.
On August 1, 2013, our SemGas segment acquired the equity interest of Mid-America Midstream Gas Services, L.L.C. ("MMGS"), a wholly owned subsidiary of Chesapeake, which is the owner of gas gathering and processing assets in the Mississippi Lime play for approximately $314.0 million in cash. We incurred approximately $3.6 million in transaction related general and administrative expenses. The transaction was funded through the combination of a portion of the net proceeds from the sale of $300 million of 7.50% senior unsecured notes (Note 15) and a borrowing under the revolving credit facility under SemGroup's corporate credit agreement. Highlights of the acquisition include the following:
200 miles of gathering pipeline;
Rose Valley I plant - A 200 mmcf/d (million cubic feet per day) cryogenic processing plant, placed in operation in the first quarter of 2014;
Rose Valley II plant - A 200 mmcf/d cryogenic processing plant placed in operation in mid-2015;
Approximately 540,000 net acre dedication in the core of the Mississippi Lime play, supported by a joint venture between Chesapeake and Sinopec International Petroleum Exploration and Production Corporation ("Sinopec"); and
A 20-year, 100% fee based, gas gathering and processing agreement with certain affiliates of Chesapeake and Sinopec.
Barcas Field Services, LLC
On September 1, 2013, our Crude Transportation segment completed the acquisition of the assets of Barcas Field Services, LLC ("Barcas") for $49.0 million in cash. Highlights of the acquisition include the following:
114 trucks, 120 trailers and miscellaneous equipment; and
a long-term take-or-pay customer transportation agreement, which has expired.
NGL Energy
On August 6, 2013, we completed the acquisition of approximately 5.36% of the general partner of NGL Energy, which increased our ownership of NGL Energy's general partner to 11.78%.
Disposals of Long-Lived Assets
Disposals of Long-Lived Assets
DISPOSALS OR IMPAIRMENTS OF LONG-LIVED ASSETS
Year Ended December 31, 2015
During the year ended December 31, 2015, our SemGas segment sold certain non-core Kansas based gas gathering and compression assets for approximately $1.0 million, resulting in a pre-tax loss of approximately $1.7 million which is reported in "loss (gain) on disposal or impairment, net" in the consolidated statement of operations and comprehensive income. See Note 12 for discussion of the goodwill impairment recorded by our Crude Transportation segment.
Year Ended December 31, 2014
On June 1, 2014, our SemGas segment sold certain natural gas gathering assets in Eastern Oklahoma resulting in a $20.1 million pre-tax loss on a cash sales price of $2.4 million. The assets sold were made up of property, plant and equipment with a net book value of $22.5 million. The loss on the sale was reported in "loss (gain) on disposal or impairment, net" in the consolidated statement of operations and comprehensive income. The operations of the gas gathering assets were not material to SemGroup.
During the year ended December 31, 2014, we recorded an impairment charge of $11.9 million related to leaseholds of unproved oil and gas properties located in Kansas. These assets were written off when due to the downturn in crude oil prices and the remaining life of the leaseholds, it became apparent that these properties would not be developed. These assets were held by a subsidiary included in Corporate and Other in our segment disclosures (Note 8).
Year Ended December 31, 2013
There were no significant gains (losses) recorded during the year ended December 31, 2013 related to the disposal or impairment of long-lived assets.

Segments
Segments
SEGMENTS
As described in Note 1, our businesses are organized based on the nature and location of the services they provide. Certain summarized information related to our reportable segments is shown in the tables below. None of the operating segments have been aggregated. Our equity investment in NGL Energy is included within the SemStream segment. Although Corporate and Other does not represent an operating segment, it is included in the tables below to reconcile segment information to that of the consolidated Company. Eliminations of transactions between segments are also included within Corporate and Other in the tables below.
During the year ended December 31, 2015, management made the decision to disaggregate certain activities and functions within the domestic crude oil business to provide additional granularity, both internally and externally, to our operating results. As such, the prior period results of the former Crude segment have been recast to reflect the resulting reportable segments: Crude Transportation, Crude Facilities and Crude Supply and Logistics. Certain amounts formerly included in the Crude segment have been included in Corporate and Other in the current presentation. No other segments were impacted.
The accounting policies of each segment are the same as the accounting policies of the consolidated Company. Transactions between segments are generally recorded based on prices negotiated between the segments. Certain general and administrative and interest expenses incurred at the corporate level were allocated to the segments, based on our allocation policies in effect at the time.
 
Year Ended December 31,
 
2015
 
2014
 
2013
Revenues:
 
 
 
 
 
   Crude Transportation
 
 
 
 
 
External
$
81,991

 
$
84,718

 
$
34,917

Intersegment
15,021

 
10,840

 
225

   Crude Facilities
 
 
 
 
 
External
45,936

 
44,007

 
46,697

   Crude Supply and Logistics
 
 
 
 
 
External
716,784

 
1,169,372

 
685,588

   SemGas
 
 
 
 
 
External
231,569

 
342,286

 
207,134

Intersegment
20,605

 
37,897

 
23,985

   SemCAMS
 
 
 
 
 
External
136,197

 
176,724

 
198,450

   SemLogistics
 
 
 
 
 
External
24,351

 
12,650

 
11,671

   SemMexico
 
 
 
 
 
External
211,291

 
290,869

 
242,559

   Corporate and Other
 
 
 
 
 
External
6,975

 
1,953

 

Intersegment
(35,626
)
 
(48,737
)
 
(24,210
)
Total Revenues
$
1,455,094


$
2,122,579

 
$
1,427,016

 
 
 
 
 
 
 
Year Ended December 31,
 
2015
 
2014
 
2013
Earnings from equity method investments:
 
 
 
 
 
   Crude Transportation
$
76,355

 
$
61,856

 
$
45,354

   SemStream(1)
11,416

 
31,363

 
33,996

Total earnings from equity method investments
$
87,771


$
93,219

 
$
79,350

(1) including gain on issuance of common units by equity method investee
 
 
 
 
 
 
 
Year Ended December 31,
 
2015
 
2014
 
2013
Depreciation and amortization:
 
 
 
 
 
   Crude Transportation
$
35,500

 
$
33,679

 
$
17,814

   Crude Facilities
5,829

 
5,365

 
4,833

   Crude Supply and Logistics
159

 
549

 
673

   SemGas
31,803

 
26,353

 
14,517

   SemCAMS
12,940

 
14,295

 
10,766

   SemLogistics
8,543

 
10,005

 
9,426

   SemMexico
4,076

 
6,031

 
5,991

   Corporate and Other
2,032

 
2,120

 
2,389

Total depreciation and amortization
$
100,882

 
$
98,397

 
$
66,409

 
 
 
 
 
 
 
Year Ended December 31,
 
2015
 
2014
 
2013
Income tax expense (benefit):
 
 
 
 
 
SemCAMS
$
4,847

 
$
3,135

 
$
6,348

SemLogistics
(2,195
)
 
(2,231
)
 
(5,699
)
SemMexico
2,611

 
4,053

 
2,589

Corporate and other
28,267

 
41,556

 
(20,492
)
Total income tax expense (benefit)
$
33,530

 
$
46,513

 
$
(17,254
)
 
 
 
 
 
 
 
Year Ended December 31,
 
2015
 
2014
 
2013
Segment profit (1):
 
 
 
 
 
   Crude Transportation
$
81,028

 
$
76,705

 
$
51,100

   Crude Facilities
33,757

 
32,286

 
37,083

   Crude Supply and Logistics
30,088

 
24,021

 
15,010

   SemGas
61,669

 
41,715

 
32,483

   SemCAMS
36,013

 
45,326

 
32,886

   SemStream
11,391

 
31,280

 
33,389

   SemLogistics
7,249

 
25

 
(2,007
)
   SemMexico
15,614

 
16,139

 
13,493

   Corporate and Other
(44,760
)
 
(43,841
)
 
(30,088
)
Total segment profit
$
232,049


$
223,656

 
$
183,349

(1) Segment profit represents revenues excluding unrealized gains (losses) related to derivative instruments plus earnings from equity method investments less cost of sales excluding depreciation and amortization and less operating and general and administrative expenses.
 
 
 
 
 
 
 
Year Ended December 31,
 
2015
 
2014
 
2013
Reconciliation of segment profit to net income:
 
 
 
 
 
   Total segment profit
$
232,049


$
223,656

 
$
183,349

     Less:
 
 
 
 
 
Net unrealized loss (gain) related to derivative instruments
2,014

 
(1,734
)
 
(974
)
Depreciation and amortization
100,882

 
98,397

 
66,409

Interest expense
69,675

 
49,044

 
25,142

Foreign currency transaction gain
(1,067
)
 
(86
)
 
(1,633
)
Other expense (income), net
(15,801
)
 
(20,536
)
 
45,906

Income tax expense (benefit)
33,530

 
46,513

 
(17,254
)
Loss (income) from discontinued operations
4

 
1

 
(59
)
   Net income
$
42,812


$
52,057

 
$
65,812

 
 
 
 
 
 
 
Year Ended December 31,
 
2015
 
2014
 
2013
Additions to long-lived assets, including acquisitions and contributions to equity method investments:
 
 
 
 
 
   Crude Transportation
$
219,227

 
$
160,471

 
$
244,777

   Crude Facilities
30,118

 
8,207

 
11,783

   Crude Supply and Logistics
2,564

 
11,662

 
1,868

   SemGas
110,908

 
153,088

 
410,508

   SemCAMS
142,368

 
35,286

 
56,122

   SemLogistics
12,289

 
2,974

 
2,071

   SemMexico
7,051

 
9,690

 
6,375

   SemStream

 

 
18,775

   Corporate and Other
1,919

 
1,906

 
1,211

Total additions to long-lived assets
$
526,444


$
383,284

 
$
753,490

 
 
 
 
 
 
 
 
 
December 31,
 
 
 
2015
 
2014
Total assets (excluding intersegment receivables):
 
 
 
 
 
   Crude Transportation
 
 
$
877,017

 
$
746,723

   Crude Facilities
 
 
155,186

 
116,784

   Crude Supply and Logistics
 
 
328,419

 
271,444

   SemGas
 
 
719,789

 
662,223

   SemCAMS
 
 
331,749

 
279,191

   SemLogistics
 
 
155,794

 
150,498

   SemMexico
 
 
89,608

 
107,225

   SemStream
 
 
112,787

 
162,246

   Corporate and Other
 
 
100,947

 
93,468

Total
 
 
$
2,871,296

 
$
2,589,802

 
 
 
 
 
 
 
 
 
December 31,
 
 
 
2015
 
2014
Equity investments:
 
 
 
 
 
   Crude Transportation
 
 
$
438,291

 
$
415,674

   SemStream
 
 
112,787

 
162,246

Total equity investments
 
 
$
551,078


$
577,920

Inventories
Inventories
INVENTORIES
Inventories consist of the following (in thousands):
 
December 31,
 
2015
 
2014
Crude oil
$
59,121

 
$
26,722

Asphalt and other
11,118

 
16,810

Total inventories
$
70,239

 
$
43,532



During the years ended December 31, 2015 and 2014, our Crude Supply and Logistics segment recorded non-cash charges of $2.6 million and $5.7 million to write-down crude oil inventory to the lower of cost or market.
Other Assets
Other Assets
OTHER ASSETS
Other current assets consist of the following (in thousands):
 
December 31,
 
2015
 
2014
Prepaid expenses
$
6,252


$
5,989

Deferred tax asset
2,321

 
5,897

Other
10,814


8,131

Total other current assets
$
19,387


$
20,017



Other noncurrent assets consist of the following (in thousands):
 
December 31,
 
2015
 
2014
Debt issuance costs, net (1)
$
23,728

 
$
22,203

Deferred tax asset
34,848

 
13,933

Other
3,579

 
8,250

Total other noncurrent assets, net
$
62,155

  
$
44,386

(1) See Note 15 for discussion of debt issuance costs.
Property, Plant and Equipment
Property, Plant and Equipment
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of the following (in thousands):
 
December 31,
 
2015
 
2014
Land
$
89,815

 
$
81,886

Pipelines and related facilities
338,789

 
283,347

Storage and terminal facilities
283,608

 
284,300

Natural gas gathering and processing facilities
810,358

 
606,553

Linefill
26,900

 
26,050

Trucking equipment and other
43,157

 
40,392

Office property and equipment
45,818

 
37,120

Construction-in-progress
248,145

 
142,806

Property, plant and equipment, gross
1,886,590

 
1,502,454

Accumulated depreciation
(319,769
)
 
(245,629
)
Property, plant and equipment, net
$
1,566,821

 
$
1,256,825



We recorded depreciation expense of $90.5 million, $82.5 million and $60.4 million for the years ended December 31, 2015, 2014 and 2013, respectively.
We include within the cost of property, plant and equipment interest costs incurred while an asset is being constructed. We capitalized $1.0 million, $1.5 million and $4.3 million of interest costs during the years ended December 31, 2015, 2014 and 2013, respectively.
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets
GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill
Goodwill relates to the following segments (in thousands):
 
December 31,
 
2015
 
2014
Crude Transportation
$
26,628

 
$
36,116

SemGas
13,052

 
13,052

SemMexico
8,352

 
9,158

Total Goodwill
$
48,032

 
$
58,326


In addition to the amounts in the table above, approximately $46.4 million of our investment in NGL Energy and $31.0 million of our investment in Glass Mountain represents equity method goodwill. Equity method goodwill is not amortized and is tested for impairment with the equity method investment in accordance with ASC 323.
We assess our goodwill for impairment at least annually as of October 1. No impairments were indicated as of October 1, 2015. However, as a result of the continued decline in oil prices and lower forecast volumes from declining drilling activity, along with lower than expected results during the fourth quarter of 2015, we performed an interim goodwill impairment analysis as of December 31, 2015 which resulted in an impairment charge of $9.5 million related to our crude oil trucking operation which was identified as the reporting unit for purposes of the impairment test.
We used an income approach, supplemented by a market approach to calculate the fair value of the reporting unit. Under the income approach, we utilized a discounted cash flow model to determine the fair value of our crude oil trucking operations. Significant judgments and assumptions included the discount rate, anticipated revenue and volume growth rates, estimated operating expenses and capital expenditures, which were based on our operating and capital budgets as well as our strategic plans. A significant underlying assumption is that crude oil prices will eventually improve and production volumes will begin to increase. If crude oil production does not increase in the future or the production takes longer than anticipated to return, this would negatively affect our key assumptions and potentially lead to additional impairments in the future. We considered the market approach by comparing the revenue and earnings multiples implied by our income approach to those of comparable companies for reasonableness.
Changes in goodwill balances during the period from December 31, 2012 to December 31, 2015 are shown below (in thousands):
Balance, December 31, 2012
$
9,884

Barcas acquisition (Note 6)
28,322

MMGS acquisition (Note 6)
23,839

Currency translation adjustments
(24
)
Balance, December 31, 2013
62,021

Crude oil trucking asset acquisition (Note 6)
7,892

MMGS purchase price allocation adjustment
(10,787
)
Barcas purchase price allocation adjustment
(98
)
Currency translation adjustments
(702
)
Balance, December 31, 2014
58,326

Impairment loss
(9,488
)
Currency translation adjustments
(806
)
Balance, December 31, 2015
$
48,032


For U.S. federal income tax purposes, goodwill is amortized on a straight-line basis over 15 years.
Other intangible assets
The gross carrying amount and accumulated amortization of intangible assets are shown below (in thousands):
 
December 31, 2015
 
December 31, 2014
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
 
Gross Carrying Amount
 
Accumulated Amortization
 
Gross Carrying Amount
Customer Relationships
$
188,304

 
$
(26,975
)
 
$
161,329

 
$
189,583

 
$
(17,963
)
 
$
171,620

Trade Names
493

 
(378
)
 
115

 
570

 
(379
)
 
191

Unpatented Technology
2,941

 
(2,162
)
 
779

 
3,457

 
(2,203
)
 
1,254

Total other intangible assets
$
191,738

 
$
(29,515
)
 
$
162,223

 
$
193,610

 
$
(20,545
)
 
$
173,065


Changes in other intangible asset balances during the period from December 31, 2012 to December 31, 2015 are shown below (in thousands):
Balance, December 31, 2012
$
7,585

Amortization
(6,018
)
Barcas acquisition
6,930

MMGS acquisition
166,332

Currency translation adjustments
9

Balance, December 31, 2013
174,838

Amortization
(15,875
</