Partners' Capital, Mezzanine Capital and Distributions

3 Months Ended

Mar. 31, 2024

Partners' Capital, Mezzanine Capital and Distributions

Partners’ Capital, Mezzanine Capital and Distributions

At March 31, 2024, our outstanding common units consisted of 122,424,321 Class A Common Units and 39,997 Class B Common Units. The Class A Common Units are traditional common units in us. The Class B Common Units are identical to the Class A Common Units and, accordingly, have voting and distribution rights equivalent to those of the Class A Common Units, and, in addition, the Class B Common Units have the right to elect all of our board of directors and are convertible into

Class A Common Units under certain circumstances, subject to certain exceptions. At March 31, 2024, we had 23,111,918 Class A Convertible Preferred Units outstanding, which are discussed below in further detail.

In an effort to return capital to our investors, we announced a common equity repurchase program (the “Repurchase Program”) on August 8, 2023. The Repurchase Program authorizes the repurchase from time to time of up to 10% of our then outstanding Class A Common Units, or 12,253,922 units, via open market purchases or negotiated transactions conducted in accordance with applicable regulatory requirements. These repurchases may be made pursuant to a repurchase plan or plans that comply with Rule 10b5-1 under the Securities Exchange Act of 1934. The Repurchase Program will be reviewed no later than December 31, 2024 and may be suspended or discontinued at any time prior thereto. The Repurchase Program does not create an obligation for us to acquire a particular number of Class A Common Units and any Class A Common Units repurchased will be canceled. During 2023, we repurchased and cancelled a total of 114,900 Class A Common Units at an average price of approximately $9.09 per unit for a total purchase price of $1.0 million, including commissions. We did not repurchase any Class A Common Units during the three months ended March 31, 2024.

Distributions

We paid, or will pay, the following cash distributions to our common unitholders in 2023 and 2024:


Distribution For	Date Paid	Per Unit Amount		Total Amount
2023
1st Quarter	May 15, 2023	$	0.15	$	18,387
2nd Quarter	August 14, 2023	$	0.15	$	18,387
3rd Quarter	November 14, 2023	$	0.15	$	18,370
4th Quarter	February 14, 2024	$	0.15	$	18,370
2024
1st Quarter(1)	May 15, 2024	$	0.15	$	18,370

(1)This distribution was declared in April 2024 and will be paid to unitholders of record as of April 30, 2024.

Class A Convertible Preferred Units

Our Class A Convertible Preferred Units rank senior to all of our currently outstanding classes or series of limited partner interests with respect to distribution and/or liquidation rights. Holders of our Class A Convertible Preferred Units vote on an as-converted basis with holders of our common units and have certain class voting rights, including with respect to any amendment to the partnership agreement that would adversely affect the rights, preferences or privileges, or otherwise modify the terms, of those Class A Convertible Preferred Units.

Accounting for the Class A Convertible Preferred Units

Our Class A Convertible Preferred Units are considered redeemable securities under GAAP due to the existence of redemption provisions upon a deemed liquidation event that is outside of our control. Therefore, we present them as temporary equity in the mezzanine section of the Unaudited Condensed Consolidated Balance Sheets. We initially recognized our Class A Convertible Preferred Units at their issuance date fair value, net of issuance costs, as they were not redeemable and we did not have plans or expect any events that constitute a change of control in our partnership agreement.

Net Income (Loss) Attributable to Genesis Energy, L.P. is adjusted for distributions attributable to the Class A Convertible Preferred Units that accumulate in the period. Net Income (Loss) Attributable to Genesis Energy, L.P. was reduced by $21.9 million and $24.0 million for the three months ending March 31, 2024 and 2023, respectively, due to Class A Convertible Preferred Unit distributions paid in the period (Class A Convertible Preferred Unit distributions are summarized in the table below).

As of March 31, 2024, we will not be required to further adjust the carrying amount of our Class A Convertible Preferred Units until it becomes probable that they would become redeemable. Once redemption becomes probable, we would adjust the carrying amount of our Class A Convertible Preferred Units to the redemption value over a period of time comprising the date redemption first becomes probable and the date the units can first be redeemed.

We paid, or will pay, by the dates noted below, the following cash distributions to our Class A Convertible Preferred unitholders in 2023 and 2024:


Distribution For	Date Paid	Per Unit Amount		Total Amount
2023
1st Quarter	May 15, 2023	$	0.9473	$	24,002
2nd Quarter	August 14, 2023	$	0.9473	$	23,314
3rd Quarter	November 14, 2023	$	0.9473	$	22,612
4th Quarter	February 14, 2024	$	0.9473	$	21,894
2024
1st Quarter(1)	May 15, 2024	$	0.9473	$	21,894

(1)This distribution was declared in April 2024 and will be paid to unitholders of record as of April 30, 2024

Noncontrolling Interests

We own a 64% membership interests in Cameron Highway Oil Pipeline Co. (“CHOPS”) and are the operator of its pipeline and associated assets (the “CHOPS pipeline”). We also own an 80% membership interest in Independence Hub, LLC. For financial reporting purposes, the assets and liabilities of these entities are consolidated with those of our own, with any third party or affiliate interest in our Unaudited Condensed Consolidated Balance Sheets amounts shown as noncontrolling interests in equity.

In the first quarter of 2024 we received a $9.0 million contribution from our noncontrolling interest holder of CHOPS, of which we are required to use for completing the ongoing offshore growth capital project related to CHOPS. As of March 31, 2024, this amount is included within “Restricted cash” on the Unaudited Condensed Consolidated Balance Sheet and is expected to be spent on the associated project in the second quarter of 2024.