Delaware | 1-12295 | 76-0513049 |
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
919 Milam Suite 2100, Houston, Texas | 77002 |
(Address of principal executive offices) | (Zip Code) |
(1) | the financial performance of our assets; |
(2) | our operating performance; |
(3) | the viability of potential projects, including our cash and overall return on alternative capital investments as compared to those of other companies in the midstream energy industry; |
(4) | the ability of our assets to generate cash sufficient to satisfy certain non-discretionary cash requirements, including interest payments and certain maintenance capital requirements; and |
(5) | our ability to make certain discretionary payments, such as distributions on our units, growth capital expenditures, certain maintenance capital expenditures and early payments of indebtedness. |
(1) | the financial performance of our assets without regard to financing methods, capital structures or historical cost basis; |
(2) | our operating performance as compared to those of other companies in the midstream energy industry, without regard to financing and capital structure; |
(3) | the viability of potential projects, including our cash and overall return on alternative capital investments as compared to those of other companies in the midstream energy industry; |
(4) | the ability of our assets to generate cash sufficient to satisfy certain non-discretionary cash requirements, including interest payments and certain maintenance capital requirements; and |
(5) | our ability to make certain discretionary payments, such as distributions on our units, growth capital expenditures, certain maintenance capital expenditures and early payments of indebtedness. |
Exhibit No. | Description |
99.1 | Genesis Energy, L.P. press release, dated August 3, 2016 |
GENESIS ENERGY, L.P. (A Delaware Limited Partnership) | |||
By: | GENESIS ENERGY, LLC, as General Partner | ||
Date: | August 3, 2016 | By: | /s/ Robert V. Deere |
Robert V. Deere Chief Financial Officer |
* | We reported the following results for the second quarter of 2016 compared to the same quarter in 2015, which improved results were primarily attributable to our acquisition on July 24, 2015 of the offshore pipelines and services business of Enterprise Products Partners, L.P. and its affiliates (our “Enterprise acquisition”): |
• | Net Income Attributable to Genesis Energy, L.P. of $23.7 million, or $0.22 per unit, for the second quarter of 2016 compared to $11.7 million, or $0.12 per unit, for the same period in 2015, representing an increase of $12.0 million or 103%. |
• | Cash Flows from Operating Activities of $62.6 million for the second quarter of 2016 compared to $8.6 million for the same period in 2015, representing an increase of $54 million or 628%. |
• | Available Cash before Reserves of $96.0 million in the second quarter of 2016, an increase of $27.2 million over the prior year quarter, or 40%, providing 1.18 coverage for our quarterly distribution to unitholders attributable to that quarter, which is discussed below. Excluding the effects from our public offering of common units in July 2016 (discussed below), Available Cash before Reserves would have provided 1.27 times coverage for our quarterly distribution. |
• | Adjusted EBITDA for the second quarter of 2016 was $133.5 million, an increase of $46.2 million, or 53%, over the prior year quarter. After giving pro forma effect to our July 2016 common unit offering, our Adjusted Pro Forma Debt to Pro Forma EBITDA ratio is 4.76 as of June 30, 2016. Without giving effect to that offering, our Adjusted Debt to Pro Forma EBITDA ratio is 5.25 as of June 30, 2016. These amounts are calculated and further discussed later in this press release. |
• | Included in each of Net Income, Available Cash before Reserves, and Adjusted EBITDA is a $2.4 million non-cash increase in equity-based compensation expense that resulted solely from a 30% increase in the market price of our common units for the 2016 quarter. |
* | On August 12, 2016, we will pay a total quarterly distribution of $81.4 million based on our quarterly declared distribution of $0.69 per unit attributable to our financial and operational results for the second quarter of 2016. This represents an increase in our distribution for the forty-fourth consecutive quarter. |
Three Months Ended June 30, | |||||||
2016 | 2015 | ||||||
(in thousands) | |||||||
Offshore pipeline transportation | $ | 84,282 | $ | 25,100 | |||
Onshore pipeline transportation | 12,090 | 14,363 | |||||
Refinery services | 19,861 | 20,221 | |||||
Marine transportation | 18,082 | 27,225 | |||||
Supply and logistics | 8,171 | 11,658 | |||||
Total Segment Margin | $ | 142,486 | $ | 98,567 |
Distribution For | Date Paid | Per Unit Amount | ||||
2016 | ||||||
2nd Quarter | August 12, 2016 | $ | 0.6900 | |||
1st Quarter | May 13, 2016 | $ | 0.6725 | |||
2015 | ||||||
4th Quarter | February 12, 2016 | $ | 0.6550 | |||
3rd Quarter | November 13, 2015 | $ | 0.6400 | |||
2nd Quarter | August 14, 2015 | $ | 0.6250 | |||
1st Quarter | May 15, 2015 | $ | 0.6100 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
REVENUES | $ | 445,976 | $ | 656,327 | $ | 824,390 | $ | 1,183,184 | |||||||
COSTS AND EXPENSES: | |||||||||||||||
Costs of sales | 330,805 | 583,910 | 590,515 | 1,045,602 | |||||||||||
General and administrative expenses | 11,283 | 14,832 | 23,504 | 28,053 | |||||||||||
Depreciation and amortization | 55,900 | 28,205 | 102,535 | 55,330 | |||||||||||
OPERATING INCOME | 47,988 | 29,380 | 107,836 | 54,199 | |||||||||||
Equity in earnings of equity investees | 12,157 | 18,661 | 22,874 | 34,180 | |||||||||||
Interest expense | (35,535 | ) | (17,905 | ) | (69,922 | ) | (37,120 | ) | |||||||
Other income/(expense), net | — | (17,529 | ) | — | (17,529 | ) | |||||||||
INCOME BEFORE INCOME TAXES | 24,610 | 12,607 | 60,788 | 33,730 | |||||||||||
Income tax expense | (1,009 | ) | (942 | ) | (2,010 | ) | (1,850 | ) | |||||||
NET INCOME | 23,601 | 11,665 | 58,778 | 31,880 | |||||||||||
Net loss attributable to noncontrolling interests | 126 | — | 252 | — | |||||||||||
NET INCOME ATTRIBUTABLE TO GENESIS ENERGY, L.P. | $ | 23,727 | $ | 11,665 | $ | 59,030 | $ | 31,880 | |||||||
NET INCOME PER COMMON UNIT: | |||||||||||||||
Basic and Diluted | $ | 0.22 | $ | 0.12 | $ | 0.54 | $ | 0.33 | |||||||
WEIGHTED AVERAGE OUTSTANDING COMMON UNITS: | |||||||||||||||
Basic and Diluted | 109,979 | 99,174 | 109,979 | 97,113 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||
Offshore Pipeline Transportation Segment | |||||||||||
Crude oil pipelines (barrels/day unless otherwise noted): | |||||||||||
CHOPS (1) | 214,884 | 166,735 | 205,878 | 169,382 | |||||||
Poseidon (1) | 265,157 | 274,517 | 257,386 | 251,913 | |||||||
Odyssey (1) | 104,816 | 51,165 | 106,304 | 49,872 | |||||||
GOPL | 5,030 | 18,709 | 5,612 | 12,493 | |||||||
Offshore crude oil pipelines total | 589,887 | 511,126 | 575,180 | 483,660 | |||||||
SEKCO (1) | 72,192 | 70,422 | 68,778 | 46,265 | |||||||
Natural gas transportation volumes (MMbtus/d) (1) | 588,068 | — | 592,933 | — | |||||||
Onshore Pipeline Transportation Segment | |||||||||||
Crude oil pipelines (barrels/day): | |||||||||||
Texas | 40,568 | 68,407 | 56,963 | 71,903 | |||||||
Jay | 14,583 | 18,082 | 14,178 | 16,784 | |||||||
Mississippi | 10,715 | 16,824 | 11,164 | 15,882 | |||||||
Louisiana | 20,213 | 10,178 | 24,869 | 19,975 | |||||||
Wyoming | 13,987 | — | 10,684 | — | |||||||
Onshore crude oil pipelines total | 100,066 | 113,491 | 117,858 | 124,544 | |||||||
CO2 pipeline (Mcf/day) | |||||||||||
Free State | 83,965 | 167,451 | 107,795 | 178,915 | |||||||
Refinery Services Segment | |||||||||||
NaHS (dry short tons sold) | 30,011 | 32,503 | 61,817 | 64,933 | |||||||
NaOH (caustic soda dry short tons sold) | 21,387 | 22,130 | 40,149 | 43,316 | |||||||
Marine Transportation Segment | |||||||||||
Inland Fleet Utilization Percentage (2) | 91.7 | % | 99.4 | % | 93.3 | % | 97.8 | % | |||
Offshore Fleet Utilization Percentage (2) | 91.6 | % | 99.7 | % | 88.5 | % | 99.8 | % | |||
Supply and Logistics Segment | |||||||||||
Crude oil and petroleum products sales (barrels/day) | 65,929 | 100,054 | 67,955 | 97,148 | |||||||
Rail load/unload volumes (barrels/day) (3) | 5,735 | 18,709 | 13,472 | 17,067 | |||||||
June 30, 2016 | December 31, 2015 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 8,550 | $ | 10,895 | |||
Accounts receivable - trade, net | 249,133 | 219,532 | |||||
Inventories | 78,738 | 43,775 | |||||
Other current assets | 36,105 | 32,114 | |||||
Total current assets | 372,526 | 306,316 | |||||
Fixed assets, net | 4,125,794 | 3,931,979 | |||||
Investment in direct financing leases, net | 136,378 | 139,728 | |||||
Equity investees | 427,558 | 474,392 | |||||
Intangible assets, net | 216,274 | 223,446 | |||||
Goodwill | 325,046 | 325,046 | |||||
Other assets, net | 62,235 | 58,692 | |||||
Total assets | $ | 5,665,811 | $ | 5,459,599 | |||
LIABILITIES AND PARTNERS’ CAPITAL | |||||||
Accounts payable - trade | $ | 148,253 | $ | 140,726 | |||
Accrued liabilities | 119,361 | 161,410 | |||||
Total current liabilities | 267,614 | 302,136 | |||||
Senior secured credit facility | 1,405,800 | 1,115,000 | |||||
Senior unsecured notes | 1,810,101 | 1,807,054 | |||||
Deferred tax liabilities | 23,995 | 22,586 | |||||
Other long-term liabilities | 224,820 | 192,072 | |||||
Partners' capital: | |||||||
Common unitholders | 1,942,083 | 2,029,101 | |||||
Noncontrolling interests | (8,602 | ) | (8,350 | ) | |||
Total partners' capital | 1,933,481 | 2,020,751 | |||||
Total liabilities and partners' capital | $ | 5,665,811 | $ | 5,459,599 | |||
Units Data: | |||||||
Total common units outstanding | 109,979,218 | 109,979,218 |
Three Months Ended June 30, | |||||||
2016 | 2015 | ||||||
Total Segment Margin (1) | $ | 142,486 | $ | 98,567 | |||
Corporate general and administrative expenses | (10,491 | ) | (13,953 | ) | |||
Non-cash items included in general and administrative costs | 778 | 763 | |||||
Cash expenditures not included in Adjusted EBITDA | 747 | 1,992 | |||||
Cash expenditures not included in net income | (57 | ) | (91 | ) | |||
Adjusted EBITDA | 133,463 | 87,278 | |||||
Depreciation and amortization | (55,900 | ) | (28,205 | ) | |||
Interest expense, net | (35,535 | ) | (17,905 | ) | |||
Cash expenditures not included in Adjusted EBITDA or net income | (690 | ) | (1,901 | ) | |||
Adjustment to exclude distributable cash generated by equity investees not included in income and include equity in investees net income | (11,141 | ) | (7,038 | ) | |||
Non-cash legacy stock appreciation rights plan expense | (736 | ) | 468 | ||||
Loss on debt extinguishment | — | (19,225 | ) | ||||
Other non-cash items | (4,725 | ) | (865 | ) | |||
Income tax expense | (1,009 | ) | (942 | ) | |||
Net income attributable to Genesis Energy, L.P. | $ | 23,727 | $ | 11,665 |
Three Months Ended June 30, | |||||||
2016 | 2015 | ||||||
(in thousands) | |||||||
Net income attributable to Genesis Energy, L.P. | $ | 23,727 | $ | 11,665 | |||
Depreciation and amortization | 55,900 | 28,205 | |||||
Cash received from direct financing leases not included in income | 1,548 | 1,405 | |||||
Cash effects of sales of certain assets | 209 | 460 | |||||
Effects of distributable cash generated by equity method investees not included in income | 11,141 | 7,038 | |||||
Cash effects of legacy stock appreciation rights plan | (57 | ) | (91 | ) | |||
Non-cash legacy stock appreciation rights plan expense | 736 | (468 | ) | ||||
Expenses related to acquiring or constructing growth capital assets | 747 | 1,992 | |||||
Unrealized (gain) loss on derivative transactions excluding fair value hedges, net of changes in inventory value | (338 | ) | 290 | ||||
Maintenance capital utilized (1) | (1,795 | ) | (746 | ) | |||
Non-cash tax expense | 710 | 642 | |||||
Loss on debt extinguishment | — | 19,225 | |||||
Other items, net | 3,507 | (831 | ) | ||||
Available Cash before Reserves | $ | 96,035 | $ | 68,786 |
Three Months Ended June 30, | |||||||
2016 | 2015 | ||||||
(in thousands) | |||||||
Cash Flows from Operating Activities | $ | 62,566 | $ | 8,637 | |||
Maintenance capital utilized (1) | (1,795 | ) | (746 | ) | |||
Proceeds from asset sales | 209 | 460 | |||||
Amortization and writeoff of debt issuance costs, including premiums and discounts | (2,551 | ) | (5,279 | ) | |||
Effects of available cash from joint ventures not included in operating cash flows | 6,063 | 3,663 | |||||
Net effect of changes in operating accounts not included in calculation of Available Cash before Reserves | 38,174 | 40,975 | |||||
Non-cash effect of equity based compensation expense | (4,589 | ) | (2,142 | ) | |||
Non-cash loss on debt extinguishment | — | 19,225 | |||||
Other items affecting available cash | (2,042 | ) | 3,993 | ||||
Available Cash before Reserves | $ | 96,035 | $ | 68,786 |
Three Months Ended June 30, | |||||||
2016 | 2015 | ||||||
Cash Flows from Operating Activities | $ | 62,566 | $ | 8,637 | |||
Interest Expense | 35,535 | 17,905 | |||||
Amortization and writeoff of debt issuance costs, including premiums and discounts | (2,551 | ) | (5,279 | ) | |||
Effects of available cash from equity method investees not included in operating cash flows | 6,063 | 3,663 | |||||
Net effect of changes in components of operating assets and liabilities not included in calculation of Adjusted EBITDA | 38,174 | 40,975 | |||||
Non-cash effect of equity based compensation expense | (4,589 | ) | (2,142 | ) | |||
Non-cash loss on debt extinguishment | — | 19,225 | |||||
Other items, net | (1,735 | ) | 4,294 | ||||
Adjusted EBITDA | $ | 133,463 | $ | 87,278 |
June 30, 2016 | ||||
Senior secured credit facility | $ | 1,405,800 | ||
Senior unsecured notes | 1,810,101 | |||
Less: Outstanding inventory financing sublimit borrowings | (57,800 | ) | ||
Less: Cash and cash equivalents | (8,550 | ) | ||
Adjusted Debt (1) | $ | 3,149,551 | ||
Pro Forma LTM | ||||
June 30, 2016 | ||||
LTM Adjusted EBITDA (as reported) (2) | $ | 531,773 | ||
Acquisitions and material projects EBITDA adjustment (3) | 67,798 | |||
Pro Forma EBITDA | $ | 599,571 | ||
Adjusted Debt-to-Pro Forma EBITDA | 5.25 | x |
June 30, 2016 | ||||
Adjusted Debt | $ | 3,149,551 | ||
Pro forma adjustment for proceeds of issuance of common units | 297,952 | |||
Adjusted Pro Forma Debt | $ | 2,851,599 | ||
Adjusted Pro Forma Debt-to-Pro Forma EBITDA | 4.76 | x |
(1) | the financial performance of our assets; |
(2) | our operating performance; |
(3) | the viability of potential projects, including our cash and overall return on alternative capital investments as compared to those of other companies in the midstream energy industry; |
(4) | the ability of our assets to generate cash sufficient to satisfy certain non-discretionary cash requirements, including interest payments and certain maintenance capital requirements; and |
(5) | our ability to make certain discretionary payments, such as distributions on our units, growth capital expenditures, certain maintenance capital expenditures and early payments of indebtedness. |
(1) | the financial performance of our assets without regard to financing methods, capital structures or historical cost basis; |
(2) | our operating performance as compared to those of other companies in the midstream energy industry, without regard to financing and capital structure; |
(3) | the viability of potential projects, including our cash and overall return on alternative capital investments as compared to those of other companies in the midstream energy industry; |
(4) | the ability of our assets to generate cash sufficient to satisfy certain non-discretionary cash requirements, including interest payments and certain maintenance capital requirements; and |
(5) | our ability to make certain discretionary payments, such as distributions on our units, growth capital expenditures, certain maintenance capital expenditures and early payments of indebtedness. |
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