Financial Data and Key Metrics Changes - The second quarter results were generally in line with expectations, with a focus on future growth opportunities [5] - The company expects to generate increasing amounts of free cash flow starting in the third quarter of 2025, providing financial flexibility for stakeholders [11][18] Business Segment Data and Key Metrics Changes - The offshore pipeline transportation segment saw a sequential increase in volumes as previously impacted offshore wells were brought back online [12] - The marine transportation segment performed in line with expectations, with strong demand fundamentals for the inland fleet, while the blue water fleet faced softer demand [13][15] - The onshore transportation and services segment also performed as expected, with strong volumes through Texas and Riceland terminals [16] Market Data and Key Metrics Changes - Demand for inland transportation equipment is expected to increase as refiners begin their turnaround season, which historically drives demand [14] - The marine transportation market is experiencing some short-term challenges, but long-term fundamentals remain constructive due to limited supply additions [15] Company Strategy and Development Direction - The company is focused on the successful commissioning of the Shenandoah production facility, which has a capacity of 120,000 barrels per day, and is expected to ramp up production significantly [5][7] - Future developments include the Shenandoah South discovery and the Monument discovery, which will further enhance the company's production capabilities [9][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the projected timeline for Salamanca's initial production by the end of the third quarter, despite potential weather disruptions [21] - The company remains committed to reducing leverage and improving the balance sheet while considering capital returns to unitholders starting in 2025 [25][36] Other Important Information - The company highlighted that delays in production will not significantly impact its ability to generate free cash flow or its outlook for 2026 and beyond [18] - Management emphasized the importance of maintaining financial flexibility to pursue strategic opportunities and enhance stakeholder value [18][19] Q&A Session Summary Question: Timing on Salamanca production - Management feels confident about the projected timeline for Salamanca's initial production by the end of the third quarter, with no significant weather disruptions expected [21] Question: Capital return timing - Management indicated that capital returns could potentially start in 2025, depending on the performance of new projects [25] Question: New commercial opportunities - Management stated there are no new commercial opportunities currently identified, focusing instead on ramping up existing offshore projects [26] Question: Portfolio satisfaction and divestiture candidates - Management expressed satisfaction with the current portfolio and indicated no plans for significant divestitures, focusing on existing business lines [27] Question: Monument development timeline - Management confirmed that Monument is expected to be the next significant development after Salamanca, with additional volumes anticipated in 2026 [28] Question: Marine transportation segment trends - Management noted that while the marine transportation segment faced some short-term challenges, utilization rates remain high, supporting future rate increases [32][34] Question: Leverage ratio timeline and balancing shareholder returns - Management indicated that discussions regarding leverage ratios and shareholder returns will be more defined as 2026 approaches, with potential distributions considered in the fourth quarter of 2025 [36][37] Question: Confidence in adjusted EBITDA guidance - Management expressed cautious optimism about meeting the low end of the adjusted EBITDA guidance, based on early production results [39]

Financial Performance - Genesis Energy reported Adjusted EBITDA of $1229 million in the second quarter[10] - The company's leverage ratio was 552x at the end of the second quarter[10, 14] - Available Cash Before Reserves was $32227 thousand in Q2 2025, with a Common Unit Distribution Coverage Ratio of 159x[18, 24] - Total Segment Margin for the second quarter was $135869 thousand[14, 22] Operational Highlights & Future Outlook - Shenandoah achieved first oil in late July, with production expected to ramp up to 90-100k/d[16] - Salamanca remains on track for first oil by the end of 3Q, expecting production to reach 40-50k/d[10, 16] - The company expects a notable step change in the financial contribution from its offshore pipeline transportation segment starting in 3Q 2025[10] - Genesis Energy has $800 million in credit facility commitments, providing adequate liquidity[7] Capital Allocation & Debt Management - The company aims to maintain a leverage ratio at or near 40x[10] - Genesis Energy repurchased $325 million of Class A convertible preferred securities and 114900 common units at an average price of $909 per unit[10]

[Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) Genesis Energy reported a Q2 2025 net loss of $0.4 million, achieving $135.9 million Total Segment Margin and $122.9 million Adjusted EBITDA Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Loss Attributable to Genesis Energy, L.P. | $0.4 million | $8.7 million | | Cash Flows from Operating Activities | $47.0 million | $104.7 million | | Total Segment Margin | $135.9 million | N/A | | Adjusted EBITDA | $122.9 million | N/A | | Available Cash before Reserves to common unitholders | $32.2 million | N/A | | Bank Leverage Ratio (TTM) | 5.52X | N/A | - Declared cash distributions on preferred units totaled approximately **$14.9 million**[4](index=4&type=chunk) - The company achieved **1.59x** coverage for its quarterly distribution of **$0.165** per common unit[4](index=4&type=chunk) [CEO Commentary and Strategic Outlook](index=1&type=section&id=CEO%20Commentary%20and%20Strategic%20Outlook) The CEO highlighted successful Shenandoah and SYNC commissioning, Salamanca progress, and anticipated free cash flow growth for debt reduction - The Shenandoah production facility successfully delivered first oil to the new SYNC pipeline, with production expected to ramp up to **90-100 kbd**[2](index=2&type=chunk) - The Salamanca project remains on track to achieve first oil by the end of Q3 2025, with an initial peak design of **40-50 kbd**[3](index=3&type=chunk) - The company anticipates generating increasing free cash flow starting in Q3, which will be used to pay down its revolving credit facility[5](index=5&type=chunk)[6](index=6&type=chunk) - Future capital allocation strategy includes debt reduction, potential redemption of high-cost preferred units, and possible increases in common unit distributions[7](index=7&type=chunk) [Segment Performance](index=3&type=section&id=Segment%20Performance) Total Segment Margin slightly decreased to $135.9 million in Q2 2025, with Offshore growth offset by Marine and Onshore declines, and a segment reorganization Segment Margin (in thousands) | Segment | Q2 2025 | Q2 2024 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | Offshore pipeline transportation | $87,594 | $86,131 | +$1,463 | +1.7% | | Marine transportation | $29,817 | $31,543 | -$1,726 | -5.5% | | Onshore transportation and services | $18,458 | $20,242 | -$1,784 | -8.8% | | **Total Segment Margin** | **$135,869** | **$137,916** | **-$2,047** | **-1.5%** | - The company reorganized its operating segments, moving the sulfur services business into the Onshore transportation and services segment[14](index=14&type=chunk) [Offshore Pipeline Transportation](index=3&type=section&id=Offshore%20Pipeline%20Transportation) Offshore Segment Margin increased by 2% to $87.6 million, driven by new MVCs and higher volumes from key projects, partially offset by rate adjustments - Growth was driven by the commencement of MVCs on the SYNC and CHOPS pipelines for the Shenandoah development, which began contributing in June 2025[15](index=15&type=chunk) - Deepwater drilling activity in the Gulf of America remains resilient and is not expected to be significantly altered by near-term macroeconomic headwinds[10](index=10&type=chunk) Offshore Operating Data | Metric (average/day) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Crude oil pipelines (barrels) | 646,010 | 642,251 | | Natural gas transportation (MMBtus) | 403,703 | 357,687 | [Marine Transportation](index=3&type=section&id=Marine%20Transportation) Marine Segment Margin decreased by 5% to $29.8 million, with inland market strength offset by offshore market softening due to increased vessel availability - The inland barge business saw slightly lower utilization due to a decline in Midwest refinery demand for black oil equipment[17](index=17&type=chunk) - The bluewater market experienced pressure on day rates as third-party vessels were redeployed from the West Coast to the East and Gulf coasts[11](index=11&type=chunk)[17](index=17&type=chunk) Marine Utilization Percentage | Fleet | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Inland Barge | 98.1% | 100.0% | | Offshore Barge | 97.3% | 94.9% | [Onshore Transportation and Services](index=4&type=section&id=Onshore%20Transportation%20and%20Services) Onshore Segment Margin decreased by 9% to $18.5 million, driven by lower NaHS and caustic soda sales, partially offset by higher rail unload and Texas pipeline volumes - The decrease was mainly driven by lower sales volumes of NaHS and caustic soda[18](index=18&type=chunk) - Performance was partially offset by higher volumes at the Texas system and Raceland terminal, and increased rail unload volumes at the Scenic Station facility[12](index=12&type=chunk)[18](index=18&type=chunk) Onshore Operating Data | Metric (average/day) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Onshore crude oil pipelines (barrels) | 151,899 | 129,522 | | NaHS volumes (Dry short tons) | 23,256 | 29,656 | [Financial Outlook](index=4&type=section&id=Financial%20Outlook) The company revised its full-year 2025 guidance due to temporary delays in Shenandoah and Salamanca first oil, and producer outages, without affecting long-term earnings - Full-year 2025 Adjusted EBITDA is now expected to be at or near the low end of the prior guidance range of **$545–$575 million**[13](index=13&type=chunk) - The delays are considered temporary and are not expected to have any lasting impact on the ability to generate increasing Adjusted EBITDA and free cash flow in 2026 and beyond[13](index=13&type=chunk) [Condensed Consolidated Financial Statements](index=7&type=section&id=Condensed%20Consolidated%20Financial%20Statements) The unaudited financial statements detail Q2 2025 performance, showing a return to profitability from continuing operations and balance sheet changes after the Alkali Business sale [Statements of Operations (Income Statement)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, Genesis reported revenues of $377.3 million and a net loss of $0.4 million, a significant improvement from Q2 2024, with net loss per common unit at $0.12 Q2 Statement of Operations Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenues | $377,348 | $430,179 | | Operating Income | $67,715 | $49,779 | | Net Income (Loss) from Continuing Operations | $10,011 | $(3,965) | | Net Loss Attributable to Genesis Energy, L.P. | $(406) | $(8,744) | | Net Loss per Common Unit - Basic and Diluted | $(0.12) | $(0.25) | [Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $4.84 billion and liabilities $4.12 billion, with the senior secured credit facility balance significantly reduced due to the Alkali Business sale Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total current assets | $587,308 | $911,734 | | Total assets | $4,838,538 | $7,037,692 | | Senior secured credit facility | $71,600 | $291,000 | | Total liabilities | $4,121,134 | $5,521,909 | [Non-GAAP Financial Measures and Reconciliations](index=10&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) The company provides detailed reconciliations for key non-GAAP measures, reporting Q2 2025 Adjusted EBITDA of $122.9 million, Available Cash before Reserves of $32.2 million, and a 5.52x leverage ratio Key Non-GAAP Metrics (Q2 2025) | Metric | Value | | :--- | :--- | | Adjusted EBITDA | $122.9 million | | Available Cash before Reserves | $32.2 million | | Adjusted Debt-to-Adjusted Consolidated EBITDA (LTM) | 5.52X | - The report includes detailed definitions and the company's rationale for using non-GAAP measures such as Available Cash before Reserves and Adjusted EBITDA, which management believes are useful for assessing financial performance, operating performance, and the ability to generate cash[38](index=38&type=chunk)[40](index=40&type=chunk)[50](index=50&type=chunk) - The calculation for the leverage ratio includes pro forma adjustments for material organic growth projects like Shenandoah, based on contractual minimum cash commitments[37](index=37&type=chunk)

Core Viewpoint - Genesis Energy (NYSE: GEL) is experiencing improved operational stability and reduced financial pressures, indicating a positive trajectory for the company [1] Group 1: Operational Performance - Operational risks for Genesis Energy are reported to be under control, suggesting effective management and stability within the company's operations [1] - Early signs of returns from projects indicate that the company is on a solid path toward recovery and growth [1] Group 2: Financial Health - Financial pressures have eased significantly for Genesis Energy, which may enhance its ability to invest in future projects and sustain operations [1]

Core Viewpoint - Midstream energy stocks are currently attractive for investment due to their stable cash flows, high yields, and growth opportunities, trading below historical valuations despite improved financial conditions [1]. Group 1: Energy Transfer - Energy Transfer is highlighted as a compelling investment with a high yield, improving financial profile, and solid growth opportunities, trading at low valuations [2][6]. - The company has improved its balance sheet over recent years, reducing debt and increasing free cash flow, allowing it to enter a growth phase [3]. - Approximately 90% of Energy Transfer's EBITDA is fee-based, providing a stable revenue stream insulated from commodity price fluctuations, with a distributable cash flow covering distributions by over 2x [4]. - The company plans to spend $5 billion on growth projects this year, focusing on natural gas supply for AI data centers and LNG exports [5]. - The stock trades at a forward enterprise value-to-EBITDA multiple of 8, indicating it is undervalued given its financial strength and 7.5% yield [6]. Group 2: Enterprise Products Partners - Enterprise Products Partners is characterized as a stable investment with a long history of distribution growth and a conservative balance sheet [7]. - The company has increased its distribution for 26 consecutive years, currently yielding around 6.9%, with expectations for continued growth [8]. - About 85% of Enterprise's cash flow is derived from fee-based contracts, ensuring consistent revenue even in volatile markets [9]. - The company is a major player in natural gas liquids, operating across the entire value chain, with growing global demand [10]. - Enterprise maintains a conservative leverage ratio of just over 3x, with a distribution coverage ratio of 1.7x, allowing it to self-fund growth [11]. Group 3: Genesis Energy - Genesis Energy is undergoing a strategic shift that could unlock significant value, appealing to investors willing to accept higher risk [13]. - The company sold its soda ash business for $1.4 billion, using the proceeds to reduce high-cost debt, which is expected to save $84 million annually in interest expenses [14]. - Focus is shifting to offshore pipeline assets, with two large deepwater projects expected to generate up to $150 million in annual operating profit [15]. - The stock currently yields around 3.9%, with potential for significant distribution increases as new projects come online [16].

Core Viewpoint - The pipeline sector is positioned to offer high yields, predictable cash flows, and solid growth, particularly due to increasing natural gas demand from LNG exports and AI data centers. Company Summaries 1. Energy Transfer - Operates one of the largest midstream networks in the U.S. and is entering a growth phase with a capital expenditure budget increase from $3 billion to $5 billion focused on natural gas infrastructure in the Permian Basin [3][4] - Approximately 90% of EBITDA is tied to fee-based contracts, supporting a distribution yield of 7.2% with a target of 3% to 5% annual growth [5] 2. Enterprise Products Partners - Known for reliability, having raised distributions for 26 consecutive years, with 85% of revenue being fee-based and many contracts having take-or-pay terms [6][7] - Currently has $7.6 billion in projects under construction, with $6 billion expected to come online this year, focusing on high-return expansions in the NGL value chain [7] 3. Western Midstream - Offers a high yield of 9.5% with strong revenue visibility due to cost-of-service protections and minimum volume commitments in contracts [9][10] - Maintains conservative financial management with leverage below 3x and is investing in solid return projects like the $450 million Pathfinder produced-water pipeline [10][11] 4. Williams Companies - Yield is around 3.2%, but it has significant growth potential, particularly through its Transco pipeline system, which connects natural gas fields to growing markets [12][13] - Engaged in multiple expansion projects and a $1.6 billion investment in the Socrates project to serve data center demand [14] 5. Genesis Energy - Represents a turnaround story, having sold its soda ash business for $1.4 billion to reduce debt and improve cash flow [15][17] - Focused on growing its offshore pipeline system, with significant growth expected from upcoming deepwater projects and a marine segment on track for record earnings [18][19]

Core Viewpoint - The midstream energy sector presents attractive investment opportunities for those seeking high yields and growth, despite facing some risks related to energy volumes and prices [1] Group 1: Energy Transfer - Energy Transfer has one of the largest integrated midstream systems in the U.S., with over 90% of its EBITDA tied to fee-based contracts, providing stable cash flows and a 7.1% forward yield [2][4] - The company is increasing its growth capex from $3 billion in 2024 to $5 billion in 2025, leveraging its position in the Permian Basin to meet rising energy demand from AI data centers and LNG exports [3] - Energy Transfer is trading at a forward EV-to-EBITDA multiple of 8.2, indicating a favorable combination of yield and growth potential [4] Group 2: Enterprise Products Partners - Enterprise Products Partners is recognized for its reliability, having increased its distribution for 26 consecutive years, with around 85% of its business being fee-based [5][6] - The company plans to invest $4 billion to $4.5 billion in growth projects in 2025, with $7.6 billion in projects currently under construction [6] - Trading at a forward EV-to-EBITDA multiple under 10 and offering a 6.7% dividend yield, Enterprise is appealing for income-focused investors [7] Group 3: Western Midstream - Western Midstream offers a high yield of 9.4%, supported by consistent fee-based cash flow and a conservative balance sheet with a leverage ratio under 3 [8] - The company aims for mid-single-digit annual distribution growth and is investing in high-return projects, including the Pathfinder pipeline [9] - Trading at a forward EV-to-EBITDA ratio of 9, Western Midstream combines a high yield with a disciplined growth strategy [10] Group 4: MPLX - MPLX features a high yield of 7.4% and has achieved double-digit distribution growth over the past three years, including a 12.5% increase in 2024 [12] - The company is increasing its growth capex from $889 million in 2024 to $1.7 billion in 2025, focusing on natural gas and NGL segments [13] - Trading at a forward EV-to-EBITDA ratio of just over 10, MPLX offers a blend of income and growth at a reasonable valuation [14] Group 5: Genesis Energy - Genesis Energy is transitioning after selling its soda ash business, which provided over $1 billion in proceeds, allowing for aggressive deleveraging and an estimated annual interest savings of $84 million [15] - The company is focusing on offshore pipeline expansion, with projects expected to generate up to $150 million in incremental annual operating profit by mid-2025 [15] - Although Genesis has a current yield of 3.9%, it is positioned for significant future distribution increases, with potential upside if execution is successful [16]

PART I [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Q1 2025, highlighting the impact of the Alkali Business sale on all financial figures [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and liabilities decreased significantly as of March 31, 2025, primarily due to the Alkali Business sale, while cash and cash equivalents substantially increased Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $377,360 | $7,352 | | Total current assets | $937,334 | $911,734 | | Net fixed assets | $3,535,877 | $3,539,886 | | Non-current assets - held for discontinued operations | — | $1,839,113 | | **Total Assets** | **$5,211,859** | **$7,037,692** | | **Liabilities & Capital** | | | | Total current liabilities | $632,970 | $858,755 | | Senior Unsecured Notes, net | $3,439,113 | $3,436,860 | | Long-term liabilities - held for discontinued operations | — | $529,558 | | **Total Liabilities** | **$4,471,727** | **$5,521,909** | | Total partners' capital | $187,609 | $702,194 | [Unaudited Condensed Consolidated Statements of Operations](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a significant net loss of $460.3 million for Q1 2025, primarily driven by a substantial loss from the disposal of discontinued operations Consolidated Statements of Operations Highlights (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenues | $398,311 | $434,447 | | Operating Income | $21,973 | $58,055 | | **Net Income (Loss) from Continuing Operations** | **($36,561)** | **$11,353** | | Loss from disposal of discontinued operations | ($432,193) | — | | **Net Income (Loss)** | **($460,306)** | **$18,956** | | Net Loss Attributable to Common Unitholders | ($497,477) | ($10,541) | | Net Loss Per Common Unit - Basic and Diluted | ($4.06) | ($0.09) | [Unaudited Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow decreased in Q1 2025, while investing activities were significantly positive due to asset sales, and financing activities focused on debt and preferred unit repayments Consolidated Statements of Cash Flows Highlights (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $24,805 | $125,921 | | Net cash provided by (used in) investing activities | $921,343 | ($166,708) | | Net cash provided by (used in) financing activities | ($598,340) | $47,600 | | **Net increase in cash and cash equivalents** | **$347,808** | **$6,813** | - Key investing and financing activities in Q1 2025 included receiving **$996.6 million** from the disposal of discontinued operations, repaying **$540.0 million** on the senior secured credit facility, and using **$262.5 million** to redeem Class A Convertible Preferred Units[19](index=19&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes detail significant accounting events, including the Q1 2025 segment reorganization, the Alkali Business sale, debt amendments, and preferred unit redemptions - In Q1 2025, the company reorganized its operating segments into three divisions: **Offshore pipeline transportation**, **Marine transportation**, and **Onshore transportation and services** The sulfur services business was moved into the onshore segment[21](index=21&type=chunk)[26](index=26&type=chunk)[73](index=73&type=chunk) - On February 28, 2025, the company sold its Alkali Business for a gross price of **$1.425 billion**, generating net proceeds of approximately **$1.0 billion** The sale resulted in a pre-tax loss of **$432.2 million** and is reported as a discontinued operation[23](index=23&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) - On March 6, 2025, the company redeemed **7,416,196** Class A Convertible Preferred Units for **$262.5 million**, plus accrued distributions[64](index=64&type=chunk)[19](index=19&type=chunk) - Subsequent to the quarter end, on April 3, 2025, the company redeemed the remaining **$406.2 million** of its 8.000% senior unsecured notes due 2027, incurring a net loss of approximately **$9 million**[111](index=111&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial results, highlighting a net loss from continuing operations, decreased segment margin, and successful deleveraging efforts post-Alkali Business sale [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Operating income and total segment margin decreased in Q1 2025, primarily due to higher G&A expenses from the Alkali Business sale and lower segment performance across all divisions Segment Margin by Segment (in thousands) | Segment | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Offshore pipeline transportation | $76,548 | $97,806 | (22%) | | Marine transportation | $30,021 | $31,363 | (4%) | | Onshore transportation and services | $14,826 | $18,098 | (18%) | | **Total Segment Margin** | **$121,395** | **$147,267** | **(18%)** | - Offshore pipeline transportation Segment Margin decreased by **$21.3 million** (**22%**) due to a contractual rate step-down on a life-of-lease dedication and producer underperformance at major fields A return to normal production is expected by Q3 2025[135](index=135&type=chunk) - Marine transportation Segment Margin decreased by **$1.3 million** (**4%**) due to slightly lower inland barge utilization, which was partially offset by a contractual rate increase on the M/T American Phoenix[138](index=138&type=chunk) - Onshore transportation and services Segment Margin decreased by **$3.3 million** (**18%**) due to lower NaHS and caustic soda sales volumes, partially offset by increased rail unload volumes[144](index=144&type=chunk) - General and administrative expenses increased by **$25.9 million**, primarily due to **$25.2 million** in transaction costs associated with the sale of the Alkali Business[146](index=146&type=chunk)[147](index=147&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) The company significantly improved its liquidity and capital structure in Q1 2025 by using Alkali Business sale proceeds to reduce debt and redeem preferred units, extending debt maturities - Completed the sale of the Alkali Business for **$1.425 billion**, using the proceeds to pay down the credit facility, redeem preferred units, and redeem senior notes[157](index=157&type=chunk) - Following the Alkali sale, the senior secured credit facility capacity was reduced from **$900 million** to **$800 million** As of March 31, 2025, there were no borrowings outstanding and **$795.5 million** of available capacity[158](index=158&type=chunk)[166](index=166&type=chunk) - Growth capital expenditures are focused on expanding the **CHOPS pipeline** and constructing the **SYNC Pipeline** to service two new deepwater developments, **Shenandoah** and **Salamanca**, expected to come online in mid-2025[135](index=135&type=chunk)[178](index=178&type=chunk)[180](index=180&type=chunk) Capital Expenditures from Continuing Operations (in thousands) | Type | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Maintenance capital | $22,644 | $15,075 | | Growth capital | $27,263 | $70,094 | | **Total capital expenditures** | **$49,907** | **$85,169** | [Non-GAAP Financial Measures](index=42&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles non-GAAP financial measures, including Segment Margin and Available Cash before Reserves, which significantly decreased in Q1 2025 Reconciliation to Available Cash before Reserves (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income (loss) attributable to Genesis Energy, L.P. | ($469,075) | $11,353 | | Depreciation, amortization and accretion | $59,011 | $52,163 | | Loss on disposal of discontinued operations | $432,193 | — | | Maintenance capital utilized | ($16,900) | ($18,100) | | Distributions to preferred unitholders | ($19,942) | ($21,894) | | **Available Cash before Reserves** | **$20,347** | **$54,048** | [Quantitative and Qualitative Disclosures about Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company states that there have been no material changes to its market risk disclosures since its last Annual Report - There have been no material changes in quantitative and qualitative disclosures about market risk since the last Annual Report[214](index=214&type=chunk) [Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of the end of the quarter - The company's CEO and CFO have concluded that disclosure controls and procedures are effective as of March 31, 2025[215](index=215&type=chunk) - No changes occurred during Q1 2025 that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[217](index=217&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) There have been no material developments in legal proceedings since the filing of the company's Annual Report on Form 10-K - No material developments in legal proceedings have occurred since the last Annual Report[219](index=219&type=chunk) [Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report - No material changes to risk factors have occurred since the last Annual Report[221](index=221&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports that there were no sales of unregistered equity securities during the first quarter of 2025 - There were no sales of unregistered equity securities during the quarter[222](index=222&type=chunk) [Exhibits](index=49&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Membership Interest Purchase Agreement for the Alkali Business sale, an amendment to the credit agreement, and various officer certifications

Financial Data and Key Metrics Changes - The first quarter was described as a transformational quarter for the company, successfully exiting the soda ash business and simplifying the balance sheet, which is expected to significantly reduce future cash costs [6][10] - The anticipated annual cash costs of running and sustaining the business have been reduced to approximately $425 million to $450 million [19][20] Business Segment Data and Key Metrics Changes - The offshore pipeline transportation segment is expected to see a significant increase in financial contribution due to new production facilities, Shenandoah and Salamanca, which will add nearly 200,000 barrels of oil per day of incremental production capacity [9][10] - The Marine Transportation segment is on pace to post record earnings in 2025, supported by steady demand and limited new construction in the market [16][18] - The Onshore Transportation and Services segment has seen steady volumes and is expected to increase as new offshore projects commence production [19] Market Data and Key Metrics Changes - Gulf Coast refinery utilization has recovered from approximately 80% in January to roughly 94% in late April, supporting the need for transportation of heavy and intermediate products [17][18] - The demand for moving petroleum products from the Gulf Coast to East and Mid-Atlantic markets remains steady due to inadequate regional refining capacity [18] Company Strategy and Development Direction - The company plans to implement a capital allocation strategy focusing on redeeming high-cost preferred units, paying down debt, and returning capital to unitholders [20] - The management is optimistic about the long-term value creation potential from the offshore expansion projects and the overall midstream energy space [7][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resolution of mechanical issues affecting production, expecting volume levels to return to normalized levels by the end of the second quarter or third quarter [11][40] - The company believes that deepwater projects are more resilient during low price environments compared to onshore shale plays, with significant capital already invested [14][40] Other Important Information - The Department of Interior's new permitting procedures are expected to expedite the development of domestic energy resources, potentially bringing forward opportunities that were previously slated for later [15] - Ten of the 22 active deepwater drilling rigs in the Gulf of America are working on leases dedicated to the company's pipeline infrastructure [16] Q&A Session Summary Question: Thoughts on capital allocation and distribution - Management indicated a likely flat distribution for the second quarter, with potential adjustments in the third quarter based on project timelines and mechanical issue resolutions [23] Question: Quantifying additional infield and subsea opportunities - Management noted that there are seven active rigs drilling for potential production increases, with typical wells expected to produce 7,000 to 10,000 barrels per day [26][31] Question: Segment margin guidance for offshore segment - Management anticipates that the offshore segment will contribute significantly to annual EBITDA guidance, with OTS and marine segments expected to remain consistent with the first quarter [30] Question: Confidence in resolution of producer issues - Management expressed confidence based on real-time data from producers and noted that producers are incentivized to resolve issues quickly [40] Question: Target leverage ratio and distribution coverage ratio - The long-term target leverage ratio is around four times, with expectations to reach this ratio rapidly as segment margins increase [42]

Financial Data and Key Metrics Changes - The first quarter was described as a transformational quarter for the company, successfully exiting the soda ash business and simplifying the balance sheet, which is expected to significantly reduce future cash costs [5][6] - The anticipated annual cash costs of running and sustaining the business have been reduced to approximately $425 million to $450 million [18][20] Business Segment Data and Key Metrics Changes - The offshore pipeline transportation segment is expected to see a significant increase in financial contribution due to new production facilities, Shenandoah and Salamanca, which will add nearly 200,000 barrels of oil per day of incremental production capacity [8][9] - The Marine Transportation segment is on pace to post record earnings in 2025, supported by steady demand and limited new construction in the market [15][17] - The Onshore Transportation and Services segment has seen steady volumes and is expected to increase as new offshore projects commence production [18] Market Data and Key Metrics Changes - Gulf Coast refinery utilization has recovered from approximately 80% in January to roughly 94% in late April, supporting the need for transportation of heavy and intermediate products [16][17] - The demand for moving petroleum products from the Gulf Coast to East and Mid-Atlantic markets remains steady due to inadequate regional refining capacity [17] Company Strategy and Development Direction - The company is focused on generating excess cash flow and plans to implement a capital allocation strategy that includes redeeming high-cost preferred units, paying down debt, and returning capital to unitholders [19][20] - The management is optimistic about the long-term value creation potential from the offshore expansion projects and the overall midstream energy space [6][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resolution of mechanical issues affecting production, with expectations for volume levels to return to normal by the end of the second quarter or third quarter [10][39] - The company believes that deepwater projects are more resilient during periods of low commodity prices compared to onshore shale plays, with significant capital already invested [12][13] Other Important Information - The Department of Interior's new permitting procedures are expected to expedite the development of domestic energy resources, potentially bringing forward opportunities that were previously slated for later [14] - Ten of the 22 active deepwater drilling rigs in the Gulf of America are working on leases dedicated to the company's pipeline infrastructure, indicating a strong strategic position [15] Q&A Session Summary Question: Thoughts on capital allocation and distribution - Management indicated that they are likely to maintain a flat distribution for the second quarter but will consider movements in the quarterly distribution for the third quarter and beyond [23] Question: Quantifying additional infield and subsea opportunities - Management noted that there are several active rigs drilling in fields dedicated to the company, with expectations for additional production in the range of 7,000 to 10,000 barrels per day from new wells [25][26] Question: Segment margin guidance for offshore segment - Management stated that while they do not provide segment guidance, they anticipate that the offshore segment will contribute significantly to overall EBITDA, especially as new projects come online [30] Question: Crude oil price impact on producer activity - Management expressed confidence that producers are incentivized to maintain production despite price fluctuations, citing low marginal lifting costs in the Gulf [40] Question: Target leverage ratio and distribution coverage ratio - The long-term target leverage ratio is around four times, with management confident in reaching this target rapidly as segment margins increase [41][42] Question: Marine segment day rates and new construction - Management indicated that day rates need to increase by 30% to 40% and be sustained for several years to incentivize new construction in the Marine segment [43]