Part I [Business](index=7&type=section&id=Item%201.%20Business) Genesis Energy is a master limited partnership with four segments providing midstream services to the oil and gas industry and producing natural soda ash - The company operates through four reportable segments: **offshore pipeline transportation, sodium minerals and sulfur services, onshore facilities and transportation, and marine transportation**[18](index=18&type=chunk) - Core businesses include being one of the largest pipeline network operators in the Deepwater Gulf of Mexico, a leading producer of natural soda ash, and a major service provider to major U.S. refinery complexes[21](index=21&type=chunk) - Primary objectives are to generate stable free cash flow, continue deleveraging the balance sheet, and advance its Environmental, Social, and Governance (ESG) program[38](index=38&type=chunk) - In February 2023, the company entered into a **new $850 million senior secured revolving credit facility** maturing in February 2026[49](index=49&type=chunk) - The Granger Optimization Project is expected to be completed in the second half of 2023, increasing soda ash production by approximately **750,000 tons per year**[52](index=52&type=chunk) - The company has committed approximately **$550 million (net) in capital expenditures** to construct the new SYNC pipeline and expand the CHOPS pipeline, backed by long-term take-or-pay agreements[54](index=54&type=chunk)[55](index=55&type=chunk) - As of December 31, 2022, the company employed **2,109 people**, with approximately 700 covered under collective bargaining agreements[121](index=121&type=chunk) **Offshore Crude Oil Pipeline Systems (100% basis)** | Pipeline | Operator | System Miles | Design Capacity (Bbls/day) | Interest Owned | 2022 Throughput (Bbls/day) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Main Lines** | | | | | | | CHOPS Pipeline | Genesis | 380 | 500,000 | 64% | 207,008 | | Poseidon Pipeline | Genesis | 332 | 490,000 | 64% | 257,444 | | Odyssey Pipeline | Shell Pipeline | 120 | 200,000 | 29% | 84,682 | | Eugene Island | Genesis/Shell | 184 | 39,000 | 29% | 6,964 | | **Lateral Lines** | | | | | | | SEKCO Pipeline | Genesis | 149 | 115,000 | 100% | N/A | | Shenzi Crude Oil Pipeline | Genesis | 83 | 230,000 | 100% | N/A | **Marine Transportation Fleet Overview** | Fleet Type | Aggregate Design Capacity (MBbls) | Number of Barges | Number of Push/Tug Boats | | :--- | :--- | :--- | :--- | | Inland | 2,285 | 82 | 33 | | Offshore | 884 | 9 | 9 | | American Phoenix (Tanker) | 330 | N/A | N/A | [Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks related to operations, financing, regulation, partnership structure, and taxes that could adversely affect its business - **Operational Risks:** Profitability is dependent on maintaining commodity volumes, which are influenced by factors beyond the company's control, such as producer drilling activity and commodity price volatility[189](index=189&type=chunk)[200](index=200&type=chunk)[214](index=214&type=chunk) - **Liquidity and Financing Risks:** The company's indebtedness could restrict its ability to operate and pay distributions, while access to capital is not guaranteed and rising inflation could increase costs[189](index=189&type=chunk)[226](index=226&type=chunk)[238](index=238&type=chunk) - **Legal and Regulatory Risks:** Operations are subject to stringent environmental and safety laws, and climate change legislation could decrease demand for fossil fuel products and increase operating costs[189](index=189&type=chunk)[235](index=235&type=chunk)[240](index=240&type=chunk) - **Partnership and Tax Risks:** The company's tax treatment depends on its partnership status; if treated as a corporation, cash available for distribution would be substantially reduced[189](index=189&type=chunk)[191](index=191&type=chunk)[262](index=262&type=chunk) [Unresolved Staff Comments](index=52&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that there are no unresolved staff comments - None[303](index=303&type=chunk) [Properties](index=52&type=section&id=Item%202.%20Properties) The company's material properties include extensive trona ore reserves and mining operations in the Green River Basin, Wyoming - The Alkali Business holds leases covering **86,037 acres in Wyoming**, primarily from the Federal government, the State of Wyoming, and Sweetwater Trona OpCo LLC[316](index=316&type=chunk) - Total trona reserves decreased by approximately **7 million short tons** from 2021 to 2022, primarily due to ore consumption from mining operations[350](index=350&type=chunk)[351](index=351&type=chunk)[352](index=352&type=chunk) - The total book value of the Westvaco and Granger mining sites was approximately **$1.528 billion** as of December 31, 2022[344](index=344&type=chunk) **Trona Mineral Reserves as of December 31, 2022** | Reserve Area/Type | Category | Million short tons (dry weight) | Grade (% Trona) | | :--- | :--- | :--- | :--- | | Westvaco dry extraction | Proven & Probable | 431 | 88 | | Westvaco solution mining | Probable | 369 | 88 | | Granger solution mining | Probable | 72 | 85 | | **Total Reserves** | **Total** | **872** | **87** | [Legal Proceedings](index=66&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various incidental claims and lawsuits not expected to have a material adverse effect on its financial condition - The ultimate outcome of various incidental claims, lawsuits, and administrative proceedings is **not expected to have a material adverse effect** on its financial condition[361](index=361&type=chunk) - There are **no environmental matters to disclose** for this period under the SEC's specified threshold of $1 million[362](index=362&type=chunk) [Mine Safety Disclosures](index=66&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety information for the company's Green River, Wyoming mine is included in Exhibit 95 of the Form 10-K - Mine safety disclosures for the Green River, Wyoming mine are provided in **Exhibit 95** to the Form 10-K[363](index=363&type=chunk) Part II [Market for Registrant's Common Equity, Related Unitholder Matters and Issuer Purchases of Equity Securities](index=67&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Unitholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's Class A common units trade on the NYSE under the symbol "GEL", with cash distributions determined quarterly by the general partner - The company's Class A common units are listed on the New York Stock Exchange (NYSE) under the ticker symbol **"GEL"**[365](index=365&type=chunk) - As of February 23, 2023, there were **122,539,221 Class A common units** and 39,997 Class B Common Units outstanding[4](index=4&type=chunk) [Selected Financial Data](index=68&type=section&id=Item%206.%20Selected%20Financial%20Data) This item is not applicable and contains no data - None[369](index=369&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=68&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The company reported a significant turnaround to a $75.5 million net income in 2022, driven by a $152.3 million increase in Segment Margin - The increase in 2022 net income was primarily driven by a **$152.3 million increase in segment margin**, lower depreciation and interest expense, and income from debt cancellation[372](index=372&type=chunk) - The Sodium Minerals and Sulfur Services segment margin **increased by $139.9 million (84%)** due to favorable pricing and higher soda ash sales volumes[398](index=398&type=chunk) - The Marine Transportation segment margin **increased by $31.6 million (92%)** due to higher utilization rates and increased day rates for its barge fleet[410](index=410&type=chunk) - As of December 31, 2022, the company had **$436.1 million of available borrowing capacity** under its revolving credit facility[442](index=442&type=chunk) - Key accounting estimates include fair value in acquisitions, asset impairment, revenue recognition with variable consideration, and derivative valuation[489](index=489&type=chunk) **2022 vs 2021 Financial Highlights** | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Net Income (Loss) Attributable to Genesis Energy, L.P. | $75.5 million | ($165.1 million) | | Segment Margin | $770.1 million | $617.7 million | | Cash flows from operating activities | $334.4 million | $338.0 million | | Available Cash before Reserves | $352.6 million | $203.9 million | **Segment Margin by Segment (in thousands)** | Segment | 2022 | 2021 | | :--- | :--- | :--- | | Offshore pipeline transportation | $363,373 | $317,560 | | Sodium minerals and sulfur services | $306,718 | $166,773 | | Onshore facilities and transportation | $33,755 | $98,824 | | Marine transportation | $66,209 | $34,572 | | **Total Segment Margin** | **$770,055** | **$617,729** | **Capital Expenditures (in thousands)** | Category | 2022 | 2021 | | :--- | :--- | :--- | | Maintenance capital expenditures | $132,539 | $99,868 | | Growth capital expenditures | $333,782 | $225,714 | | Capital expenditures related to equity investees | $10,301 | $352 | | **Total capital expenditures** | **$476,622** | **$325,934** | [Quantitative and Qualitative Disclosures About Market Risk](index=93&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is primarily exposed to commodity price risk, managed with derivatives, and interest rate risk from its floating-rate credit facility - Primary market risks are **commodity price risk** (crude oil, petroleum products, natural gas) and **interest rate risk**[512](index=512&type=chunk) - Commodity price risk is managed through derivative instruments, including futures, swaps, and options, to hedge inventory and purchase commitments[513](index=513&type=chunk) - Interest rate risk is associated with the floating-rate senior secured credit facility, and a 10% change in the SOFR rate was estimated to have an **immaterial impact** on 2022 net income[517](index=517&type=chunk)[518](index=518&type=chunk) [Financial Statements and Supplementary Data](index=94&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the company's audited consolidated financial statements and the independent auditor's report for the year ended December 31, 2022 - The auditor's report from Ernst & Young LLP provides an **unqualified opinion** on the consolidated financial statements and internal controls[666](index=666&type=chunk)[667](index=667&type=chunk) - A critical audit matter identified was the **estimation of variable consideration for revenue recognition** in the Offshore pipeline transportation segment[671](index=671&type=chunk)[672](index=672&type=chunk)[673](index=673&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=94&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[520](index=520&type=chunk) [Controls and Procedures](index=94&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of year-end, following the remediation of a previously identified material weakness - A **material weakness** in internal control over financial reporting, identified during Q2 2022, was **remediated** as of December 31, 2022[521](index=521&type=chunk) - Management, including the CEO and CFO, concluded that disclosure controls and procedures were **effective** as of December 31, 2022[522](index=522&type=chunk) [Other Information](index=96&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[528](index=528&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=96&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The company is managed by its general partner, whose board is significantly influenced by the Davison family's ownership of Class B units - Members of the Davison family collectively own **77.0% of the Class B Common Units**, giving them the ability to elect at least a majority of the board of directors[532](index=532&type=chunk) - The board consists of seven directors, with **four determined to be independent** under NYSE rules[534](index=534&type=chunk) - Grant E. Sims serves as Chairman and CEO, while Kenneth M. Jastrow II serves as the lead independent director[536](index=536&type=chunk)[537](index=537&type=chunk) [Executive Compensation](index=101&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation aligns with unitholder interests through a mix of salary, bonuses, and long-term incentives benchmarked against a peer group - The compensation program for NEOs is overseen by the Governance, Compensation and Business Development (G&C) Committee, using an independent consultant and a **peer group of 14 energy companies**[570](index=570&type=chunk)[573](index=573&type=chunk)[576](index=576&type=chunk) - Long-term incentive awards granted in 2022 are cash-based and tied to performance metrics including **Available Cash before Reserves, Consolidated Leverage Ratio, and safety metrics**[594](index=594&type=chunk)[611](index=611&type=chunk) - The CEO to median employee pay ratio for 2022 was **24:1**, with CEO total compensation at $2,931,949[628](index=628&type=chunk) **2022 NEO Compensation Summary** | Name | Position | Salary ($) | Bonus ($) | Non-equity Incentive Plan Comp ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | :--- | | Grant E. Sims | CEO | 758,461 | 665,000 | 792,000 | 2,931,949 | | Robert V. Deere | CFO | 450,000 | 270,000 | 288,000 | 1,049,704 | | Edward T. Flynn | EVP | 500,000 | 850,000 | 240,000 | 1,627,890 | | Kristen O. Jesulaitis | CLO & SVP | 436,154 | 410,000 | 198,000 | 1,080,050 | | Garland G. Gaspard | SVP | 365,307 | 295,000 | 180,000 | 885,061 | [Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters](index=110&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Unitholder%20Matters) Ownership is concentrated among directors, officers, the Davison family, and a few institutional and preferred unitholders - All directors and executive officers as a group beneficially own **11.3% of Class A Common Units** and **80.8% of Class B Common Units**[631](index=631&type=chunk) - Major institutional holders of Class A Common Units include **ALPS Advisors, Inc. (13.3%)**, **Invesco LTD (13.2%)**, and **FMR LLC (6.0%)**[631](index=631&type=chunk) - The Class A Convertible Preferred Units are beneficially owned **50% by GSO Rodeo Holdings LP** and **50% by KKR Rodeo Aggregator L.P.**[635](index=635&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=111&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company discloses transactions with its CEO and a major preferred unitholder, and confirms the independence of four of its seven directors - The company paid its CEO, Grant E. Sims, **$0.7 million in 2022** for the business use of his personal aircraft[637](index=637&type=chunk) - On May 17, 2022, the company fully redeemed the outstanding Alkali Holdings preferred units held by BXC (an affiliate of Blackstone) for **$288.6 million**[641](index=641&type=chunk) - The board of directors has determined that **four of its seven members are independent** under NYSE rules[644](index=644&type=chunk) [Principal Accountant Fees and Services](index=113&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) This section summarizes fees paid to the principal accounting firm, Ernst & Young LLP, for services rendered in 2022 and 2021 - All services provided by Ernst & Young LLP in 2022 and 2021 were **pre-approved by the audit committee**[648](index=648&type=chunk) **Accountant Fees (in thousands)** | Fee Category | 2022 | 2021 | | :--- | :--- | :--- | | Audit Fees | $3,374 | $3,087 | | All Other Fees | $423 | $3 | | **Total** | **$3,797** | **$3,090** | Part IV [Exhibits and Financial Statement Schedules](index=114&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed as part of the Form 10-K report - This section provides an index of all financial statements, schedules, and exhibits included with the Form 10-K filing[652](index=652&type=chunk) [Form 10-K Summary](index=118&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable - Not Applicable[657](index=657&type=chunk)

Financial Data and Key Metrics Changes - For the full year 2022, the company generated adjusted EBITDA of $717 million, which was up approximately 25% over the initial 2022 guidance range and up approximately 18% even when excluding $41 million of non-recurring income recognized in 2022 [6][10] - The quarter-end leverage ratio decreased to 4.14x, down from 5.51x in Q3 2021, approaching the targeted long-term leverage ratio of 4x [10] Business Segment Data and Key Metrics Changes - The Marine Transportation segment is experiencing full utilization of all classes of Jones Act vessels, allowing the company to drive day rates for spot and contract charters to levels not seen since 2014 and 2015 [11][51] - The Sodium Minerals and Sulfur Services segment saw quarterly contract prices for soda ash increase by approximately 40% from Q1 to Q4 2022, with significant demand growth expected in 2023 [32][33] Market Data and Key Metrics Changes - The company expects to generate EBITDA in the range of $780 million to $810 million for 2023, taking into account potential negative effects from a worldwide recession [11][12] - The soda ash market remains tight, with the company locking in prices for approximately 85% of anticipated sales volumes for 2023, expecting the weighted average realized price to exceed that of 2022 [61] Company Strategy and Development Direction - The company plans to manage its leverage ratio to a level at or below 4x while increasing financial flexibility and utilizing free cash flow from operations to fund high-return growth projects [54] - The company is focused on expanding its infrastructure in the Central Gulf of Mexico, with ongoing projects expected to solidify its position as a leading independent provider of midstream services [24][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fundamentals and macro conditions across its business segments, indicating a positive outlook for 2023 and beyond [70] - The company is optimistic about the potential for increased demand for soda ash driven by solar glass production in China and electric vehicle production [35][39] Other Important Information - The company successfully eliminated its nearest unsecured maturity and extended its revolving credit facility, providing increased flexibility for potential investments [13][14] - The Granger production facility was restarted ahead of schedule, with expectations to ramp up to its nameplate capacity of 500,000 tons of annual soda ash production [41] Q&A Session Summary Question: What is the plan regarding the flexibility from the expanded investment baskets and revolver? - Management indicated that they will evaluate the capital structure over time and consider purchasing securities as debt leverage moves below 4x [64] Question: What is the expected volume uplift from the Samurai well and the ramp-up for Argos? - Management noted that while the Samurai well may not provide a net uplift due to existing constraints, the King's Quay is performing well above pre-drill expectations [65][66] Question: What are the expectations for free cash flow in 2024? - Management expects a significant reduction in growth CapEx in 2024, with most spending occurring in 2023, leading to a positive free cash flow situation [71] Question: What is the status of soda ash pricing beyond 2023? - Management confirmed that they have a series of laddered contracts with some locked in at previous pricing, which will need to be repriced at the end of their primary terms [74]

Wells Fargo Midstream & Utilities Symposium December 2022 Disclosures & Company Information | --- | --- | --- | |-------------------------------------|-------------------|-----------------------------------------------------| | Genesis Energy, L.P. | NYSE: GEL | Investor Relations Contact | | Common Unit Market Value | ~$1.2 billion (a) | InvestorRelations@genlp.com | | Convertible Preferred Equity | ~$0.9 billion (a) | (713) 860-2500 | | Enterprise Value | ~$5.0 billion (a) | Corporate Headquarters 919 Mil ...

Genesis Energy, L.P. (NYSE:GEL) Q3 2022 Earnings Conference Call October 27, 2022 10:00 AM ET Company Participants Dwayne Morley - Vice President of Business Development & Investor Relations Grant Sims - Chairman & Chief Executive Officer Conference Call Participants Michael Blum - Wells Fargo TJ Schultz - RBC Capital Markets Karl Blunden - Goldman Sachs Operator Greetings and welcome to Genesis Energy Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A q ...

Wells Fargo Leveraged Finance Conference September 2022 Disclosures & Company Information | --- | --- | --- | |-------------------------------------|-------------------|-----------------------------------------------------| | Genesis Energy, L.P. | NYSE: GEL | Investor Relations Contact | | Common Unit Market Value | ~$1.4 billion (a) | InvestorRelations@genlp.com | | Convertible Preferred Equity | ~$0.9 billion (a) | (713) 860-2500 | | Enterprise Value | ~$5.1 billion (a) | Corporate Headquarters 919 Milam ...

Genesis Energy, L.P. (NYSE:GEL) Q2 2022 Results Conference Call July 28, 2022 10:00 AM ET Company Participants Dwayne Morley - VP, IR Grant Sims - CEO Bob Deere - CFO Ryan Sims - SVP, Finance & Corporate Development Conference Call Participants Karl Blunden - Goldman Sachs T.J. Schultz - RBC Operator Greetings, and welcome to the Genesis Energy LP Second Quarter 2022 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference ov ...

EIC Investor Conference May 2022 Disclosures & Company Information | --- | --- | --- | |-------------------------------------|-------------------|-----------------------------------------------------| | Genesis Energy, L.P. | NYSE: GEL | Investor Relations Contact | | Common Unit Market Value | ~$1.3 billion (a) | InvestorRelations@genlp.com | | Convertible Preferred Equity | ~$0.9 billion (a) | (713) 860-2500 | | Enterprise Value | ~$5.1 billion (a) | Corporate Headquarters 919 Milam Street, Suite 2100 | | ...

Genesis Energy, L.P. (NYSE:GEL) Q1 2022 Earnings Conference Call May 4, 2022 10:00 AM ET Company Participants Dwayne Morley - VP, IR Grant Sims - CEO Conference Call Participants Kyle May - Capital One Securities TJ Schultz - RBC Capital Markets Operator Greetings and welcome to the Genesis Energy L.P. First Quarter 2022 Earnings Call. At this time, all participants are in a listen-only. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference ...

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Genesis Energy, L.P. for the quarter ended March 31, 2022, including balance sheets, statements of operations, comprehensive income (loss), partners' capital, and cash flows, along with detailed notes explaining accounting policies, segment information, debt, equity, and other financial instruments [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric | March 31, 2022 (unaudited) (in thousands) | December 31, 2021 (in thousands) | | :-------------------------------- | :--------------------------------------- | :------------------------------- | | **ASSETS** | | | | Cash and cash equivalents | $9,547 | $19,987 | | Accounts receivable - trade, net | $531,791 | $400,334 | | Total current assets | $669,599 | $542,484 | | Net fixed assets | $3,911,770 | $3,912,185 | | Total assets | $6,019,199 | $5,905,801 | | **LIABILITIES AND CAPITAL** | | | | Accounts payable - trade | $365,935 | $264,316 | | Total current liabilities | $597,205 | $496,939 | | Senior secured credit facility | $94,800 | $49,000 | | Senior unsecured notes, net | $2,932,003 | $2,930,505 | | Total liabilities | $4,076,093 | $3,925,666 | | Partners' capital | $885,749 | $930,452 | [Unaudited Condensed Consolidated Statements of Operations](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Total revenues | $631,947 | $521,219 | | Total costs and expenses | $580,276 | $493,198 | | Operating income | $51,671 | $28,021 | | Net income (loss) | $4,449 | $(29,435) | | Net loss attributable to Genesis Energy, L.P. | $(5,250) | $(34,224) | | Net loss per common unit (Basic and Diluted) | $(0.20) | $(0.43) | [Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Net income (loss) | $4,449 | $(29,435) | | Other comprehensive income: Decrease in benefit plan liability | $122 | $122 | | Total Comprehensive income (loss) | $4,571 | $(29,313) | | Comprehensive loss attributable to Genesis Energy, L.P. | $(5,128) | $(34,102) | [Unaudited Condensed Consolidated Statements of Partners' Capital](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Partners%27%20Capital) | Metric | December 31, 2021 (in thousands) | March 31, 2022 (in thousands) | | :------------------------------------------ | :------------------------------- | :------------------------------ | | Partners' capital, beginning of period | $930,452 | $930,452 | | Net income (loss) | $(5,250) | $(3,374) | | Cash distributions to partners | $(18,387) | $(18,387) | | Distributions to Class A Convertible Preferred unitholders | $(18,684) | $(18,684) | | Partners' capital, end of period | $885,749 | $885,749 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Net cash provided by operating activities | $54,245 | $77,159 | | Net cash used in investing activities | $(75,514) | $(30,051) | | Net cash provided by (used in) financing activities | $10,829 | $(40,339) | | Net increase (decrease) in cash and cash equivalents and restricted cash | $(10,440) | $6,769 | | Cash and cash equivalents and restricted cash at end of period | $14,552 | $33,787 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [1. Organization and Basis of Presentation and Consolidation](index=9&type=section&id=1.%20Organization%20and%20Basis%20of%20Presentation%20and%20Consolidation) - Genesis Energy, L.P. is a growth-oriented master limited partnership focused on the midstream crude oil and natural gas industry and natural soda ash production, primarily in the Gulf Coast, Wyoming, and Gulf of Mexico[23](index=23&type=chunk) - The company manages its businesses through four reportable segments: Offshore pipeline transportation, Sodium minerals and sulfur services, Onshore facilities and transportation, and Marine transportation[24](index=24&type=chunk)[27](index=27&type=chunk) [2. Recent Accounting Developments](index=9&type=section&id=2.%20Recent%20Accounting%20Developments) - The company is evaluating ASU 2020-04, Reference Rate Reform (Topic 848), regarding the discontinuation of LIBOR in 2023, and has not yet determined the impact on its financial statements related to its senior secured credit facility[27](index=27&type=chunk) [3. Revenue Recognition](index=10&type=section&id=3.%20Revenue%20Recognition) | Revenue Category | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :----------------- | :--------------------------------------------- | :--------------------------------------------- | | Fee-based revenues | $137,473 | $129,109 | | Product Sales | $467,575 | $369,601 | | Refinery Services | $26,899 | $22,509 | | Total revenues | $631,947 | $521,219 | - The majority of contracts qualify for expedients or exemptions from disclosing unsatisfied performance obligations, with remaining long-term contracts primarily in Offshore Pipeline Transportation and Onshore Facilities and Transportation[30](index=30&type=chunk)[31](index=31&type=chunk) [4. Lease Accounting](index=11&type=section&id=4.%20Lease%20Accounting) - The company leases transportation equipment, terminals, land, facilities, and office space, with lease terms varying from short to long term, and recognizes lease expense for short-term leases (under 12 months) on a straight-line basis[33](index=33&type=chunk) - As a lessor, the company generated **$4.1 million** in lease revenues from the M/T American Phoenix in Q1 2022, up from **$3.4 million** in Q1 2021[36](index=36&type=chunk) [5. Inventories](index=12&type=section&id=5.%20Inventories) | Inventory Component | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------------------- | :------------------------------ | :------------------------------- | | Petroleum products | $795 | $998 | | Crude oil | $8,962 | $11,834 | | Caustic soda | $6,654 | $5,690 | | NaHS | $18,308 | $17,040 | | Raw materials - Alkali operations | $7,760 | $7,599 | | Work-in-process - Alkali operations | $10,058 | $7,496 | | Finished goods, net - Alkali operations | $17,669 | $13,681 | | Materials and supplies, net - Alkali operations | $13,888 | $13,620 | | Total | $84,094 | $77,958 | - Inventories are valued at the lower of cost or net realizable value; no adjustment was made in Q1 2022, but a **$2.0 million** reduction was recorded in Q4 2021[38](index=38&type=chunk) [6. Fixed Assets, Mineral Leaseholds, and Asset Retirement Obligations](index=13&type=section&id=6.%20Fixed%20Assets%2C%20Mineral%20Leaseholds%2C%20and%20Asset%20Retirement%20Obligations) | Fixed Asset Category | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :------------------------------------ | :------------------------------ | :------------------------------- | | Crude oil and natural gas pipelines | $2,840,622 | $2,839,443 | | Alkali facilities, machinery & equipment | $675,940 | $670,880 | | Marine vessels | $1,018,919 | $1,018,284 | | Construction in progress | $400,840 | $350,137 | | Net fixed assets | $3,911,770 | $3,912,185 | | Mineral leaseholds, net | $547,985 | $549,005 | | Depreciation expense (Q1 2022 vs Q1 2021) | $65,750 vs $62,702 | | | Depletion expense (Q1 2022 vs Q1 2021) | $1,020 vs $912 | | | Asset Retirement Obligation (ARO) | Amount (in thousands) | | :-------------------------------- | :-------------------- | | ARO liability balance, Dec 31, 2021 | $220,906 | | Accretion expense | $3,447 | | Settlements | $(1,461) | | ARO liability balance, Mar 31, 2022 | $222,892 | [7. Equity Investees](index=14&type=section&id=7.%20Equity%20Investees) | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :------------------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Genesis' share of operating earnings | $16,010 | $24,533 | | Amortization of differences attributable to Genesis' carrying value of equity investments | $(3,566) | $(3,873) | | Net equity in earnings | $12,444 | $20,660 | | Distributions received | $19,018 | $29,516 | - Poseidon Oil Pipeline Company, L.L.C., **64% owned by Genesis**, is the most significant equity investment, with its revolving credit facility non-recourse to Genesis and secured by Poseidon's assets[49](index=49&type=chunk)[51](index=51&type=chunk) [8. Intangible Assets](index=15&type=section&id=8.%20Intangible%20Assets) | Intangible Asset Category | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------------- | :------------------------------ | :------------------------------- | | Marine contract intangibles | $184 | $193 | | Offshore pipeline contract intangibles | $102,627 | $104,707 | | Other | $23,972 | $22,163 | | Total | $126,783 | $127,063 | | Amortization expense (Q1 2022 vs Q1 2021) | $2,588 vs $2,600 | | - Estimated amortization expense for the next five years is projected to be **$8.988 million** for the remainder of 2022, **$11.733 million** for 2023, **$11.368 million** for 2024, **$11.143 million** for 2025, and **$10.843 million** for 2026[52](index=52&type=chunk) [9. Debt](index=16&type=section&id=9.%20Debt) | Debt Instrument | March 31, 2022 (Net Value, in thousands) | December 31, 2021 (Net Value, in thousands) | | :------------------------------------ | :--------------------------------------- | :--------------------------------------- | | Senior secured credit facility-Revolving Loan | $94,800 | $49,000 | | 5.625% senior unsecured notes due 2024 | $339,243 | $339,029 | | 6.500% senior unsecured notes due 2025 | $530,679 | $530,382 | | 6.250% senior unsecured notes due 2026 | $356,584 | $356,389 | | 8.000% senior unsecured notes due 2027 | $993,803 | $993,408 | | 7.750% senior unsecured notes due 2028 | $711,694 | $711,297 | | Total long-term debt | $3,026,803 | $2,979,505 | - The company's new credit agreement, entered April 8, 2021, provides a **$950 million** senior secured credit facility, maturing March 15, 2024, with a **$650 million** Revolving Loan and a **$300 million** Term Loan (repaid in full Nov 2021)[54](index=54&type=chunk) - As of March 31, 2022, **$94.8 million** was outstanding under the Revolving Loan, with **$553.7 million** available for borrowings, subject to covenants[56](index=56&type=chunk) [10. Partners' Capital, Mezzanine Capital and Distributions](index=17&type=section&id=10.%20Partners%27%20Capital%2C%20Mezzanine%20Capital%20and%20Distributions) - As of March 31, 2022, the company had **122,539,221 Class A common units**, **39,997 Class B common units**, and **25,336,778 Class A Convertible Preferred Units** outstanding[60](index=60&type=chunk) | Distribution For | Date Paid | Per Unit Amount | Total Amount (in thousands) | | :--------------- | :---------- | :-------------- | :-------------------------- | | **Common Unitholders** | | | | | 2021 4th Quarter | Feb 14, 2022 | $0.15 | $18,387 | | 2022 1st Quarter | May 13, 2022 | $0.15 | $18,387 | | **Class A Convertible Preferred Unitholders** | | | | | 2021 4th Quarter | Feb 14, 2022 | $0.7374 | $18,684 | | 2022 1st Quarter | May 13, 2022 | $0.7374 | $18,684 | - Redeemable noncontrolling interests, primarily from Alkali Holdings preferred units purchased by BXC for the Granger Optimization Project, totaled **$267.2 million** as of March 31, 2022[69](index=69&type=chunk)[70](index=70&type=chunk)[76](index=76&type=chunk) [11. Net Loss Per Common Unit](index=20&type=section&id=11.%20Net%20Loss%20Per%20Common%20Unit) | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Net loss attributable to Genesis Energy, L.P. | $(5,250) | $(34,224) | | Less: Accumulated distributions attributable to Class A Convertible Preferred Units | $(18,684) | $(18,684) | | Net loss attributable to common unitholders | $(23,934) | $(52,908) | | Weighted average outstanding units | 122,579 | 122,579 | | Basic and diluted net loss per common unit | $(0.20) | $(0.43) | - The assumed conversion of Class A Convertible Preferred Units was anti-dilutive for both periods and thus not included in diluted EPS calculation[79](index=79&type=chunk) [12. Business Segment Information](index=21&type=section&id=12.%20Business%20Segment%20Information) - The company manages its businesses through four reportable segments: Offshore pipeline transportation, Sodium minerals and sulfur services, Onshore facilities and transportation, and Marine transportation[81](index=81&type=chunk)[84](index=84&type=chunk) | Segment | Segment Margin (Q1 2022, in thousands) | Segment Margin (Q1 2021, in thousands) | | :-------------------------------- | :------------------------------------- | :------------------------------------- | | Offshore pipeline transportation | $70,904 | $84,269 | | Sodium minerals and sulfur services | $67,375 | $43,720 | | Onshore facilities and transportation | $7,036 | $20,999 | | Marine transportation | $12,137 | $7,109 | | Total Segment Margin | $157,452 | $156,097 | | Segment | Total Assets (March 31, 2022, in thousands) | Total Assets (December 31, 2021, in thousands) | | :-------------------------------- | :------------------------------------------ | :--------------------------------------------- | | Offshore pipeline transportation | $2,101,728 | $2,103,140 | | Sodium minerals and sulfur services | $2,149,589 | $2,132,588 | | Onshore facilities and transportation | $1,014,005 | $923,064 | | Marine transportation | $698,209 | $703,030 | | Total consolidated assets | $6,019,199 | $5,905,801 | [13. Transactions with Related Parties](index=24&type=section&id=13.%20Transactions%20with%20Related%20Parties) | Transaction Type | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :------------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Revenues from services and fees to Poseidon | $3,238 | $3,786 | | Revenues from product sales to ANSAC | $88,182 | $67,955 | | Amounts paid to CEO for aircraft use | $165 | $165 | | Charges for services from Poseidon | $255 | $240 | | Charges for services from ANSAC | $845 | $178 | - The company provides management and administrative services to Poseidon (**64% owned**) and is a member of ANSAC, an organization for promoting U.S. natural soda ash sales outside the U.S[92](index=92&type=chunk)[93](index=93&type=chunk) [14. Supplemental Cash Flow Information](index=25&type=section&id=14.%20Supplemental%20Cash%20Flow%20Information) | Component of Operating Assets and Liabilities | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :-------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Accounts receivable (Increase) decrease | $(131,249) | $(99,504) | | Inventories (Increase) decrease | $(282) | $27,450 | | Accounts payable Increase (decrease) | $107,747 | $38,994 | | Accrued liabilities Increase (decrease) | $(15,513) | $22,561 | | Net changes in components of operating assets and liabilities | $(29,169) | $(5,062) | - Interest and commitment fees paid increased to **$69.8 million** in Q1 2022 from **$35.4 million** in Q1 2021, primarily due to the timing of interest payments on 2027 Notes[98](index=98&type=chunk) - Liabilities incurred for fixed and intangible asset additions not yet paid increased to **$45.0 million** in Q1 2022 from **$27.1 million** in Q1 2021, mainly due to the Granger Optimization Project (GOP) and offshore growth capital expenditures[99](index=99&type=chunk) [15. Derivatives](index=25&type=section&id=15.%20Derivatives) - The company uses exchange-traded futures, options, and swap contracts to hedge commodity price exposure (crude oil, fuel oil, natural gas, petroleum products), with most petroleum product derivatives not designated as accounting hedges[100](index=100&type=chunk) | Derivative Type | Three Months Ended March 31, 2022 (Gain/Loss, in thousands) | Three Months Ended March 31, 2021 (Gain/Loss, in thousands) | | :------------------------------------ | :-------------------------------------------------------- | :-------------------------------------------------------- | | Commodity derivatives (designated hedges) | $(1,170) | $(5,897) | | Commodity derivatives (undesignated hedges) | $6,048 | $(3,921) | | Natural Gas Swap | $(1,102) | $(67) | | Preferred Distribution Rate Reset Election | $(4,258) | $(18,438) | - The Preferred Distribution Rate Reset Election, an embedded derivative in Class A Convertible Preferred Units, resulted in an unrealized loss of **$4.3 million** in Q1 2022 and **$18.4 million** in Q1 2021, recorded in 'Other expense'[112](index=112&type=chunk)[120](index=120&type=chunk) [16. Fair-Value Measurements](index=28&type=section&id=16.%20Fair-Value%20Measurements) | Financial Instrument | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :--------------------------------- | :------------------------------ | :------------------------------- | | Commodity derivatives (Assets) | $7,844 (Level 1: $7,544, Level 2: $300) | $2,226 (Level 1: $359, Level 2: $1,867) | | Commodity derivatives (Liabilities) | $(2,287) (Level 1: $(1,341), Level 2: $(946)) | $(3,197) (Level 1: $(2,589), Level 2: $(608)) | | Preferred Distribution Rate Reset Election (Liabilities) | $(87,468) (Level 3) | $(83,210) (Level 3) | - The fair value of the embedded derivative feature (Preferred Distribution Rate Reset Election) is based on a **Level 3 valuation model**, which includes management judgment on inputs like common unit price, dividend yield, discount yield, default probabilities, and equity volatility[120](index=120&type=chunk) - The fair value of senior unsecured notes was approximately **$3.0 billion** at both March 31, 2022, and December 31, 2021, classified as a **Level 2 fair value measurement**[122](index=122&type=chunk) [17. Commitments and Contingencies](index=29&type=section&id=17.%20Commitments%20and%20Contingencies) - The company is subject to environmental laws and regulations, and lawsuits in the normal course of business, but does not expect current matters to materially affect its financial position, results of operations, or cash flows[123](index=123&type=chunk)[124](index=124&type=chunk) [18. Subsequent Events](index=30&type=section&id=18.%20Subsequent%20Events) - On April 29, 2022, the company agreed to sell its Independence Hub platform for **$40 million** gross proceeds (**$8 million** attributable to noncontrolling interests), expecting to recognize a gain of approximately **$40 million** in Q2 2022[125](index=125&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations for the three months ended March 31, 2022, compared to the same period in 2021, covering overall performance, segment-specific results, liquidity, capital resources, and non-GAAP financial measures, highlighting key drivers of change and future outlook [Overview](index=31&type=section&id=Overview) | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Net Loss Attributable to Genesis Energy, L.P. | $(5,250) | $(34,224) | | Cash flow from operating activities | $54,200 | $77,200 | | Available Cash before Reserves | $55,700 | $54,500 | | Segment Margin | $157,500 | $156,100 | - The improvement in Net Loss was primarily driven by increased operating income in the sodium minerals and sulfur services segment due to higher export pricing in the Alkali Business and a reduced unrealized loss from the Class A Convertible Preferred Units embedded derivative[129](index=129&type=chunk) - Cash flow from operating activities decreased due to changes in working capital, mainly higher interest payments in Q1 2022[130](index=130&type=chunk) [Covid-19, Ukraine War and Market Update](index=32&type=section&id=Covid-19%2C%20Ukraine%20War%20and%20Market%20Update) - The Covid-19 pandemic and the war in Ukraine have caused continued volatility in commodity prices, impacting oil, natural gas, petroleum products, and industrial products[135](index=135&type=chunk) - Management continues to monitor the market for potential impairment triggering events but believes core business fundamentals remain strong, with a focus on deleveraging the balance sheet[136](index=136&type=chunk)[137](index=137&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) [Revenues and Costs and Expenses](index=33&type=section&id=Revenues%20and%20Costs%20and%20Expenses) | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :----------------------- | :--------------------------------------------- | :--------------------------------------------- | | Total revenues | $631,947 | $521,219 | | Total costs and expenses | $580,276 | $493,198 | | Operating income | $51,671 | $28,021 | - Revenues increased by **$110.7 million (21%)** and total costs and expenses increased by **$87.1 million (18%)** in Q1 2022 compared to Q1 2021, leading to a **$23.7 million** increase in operating income[139](index=139&type=chunk) - The increase in operating income was primarily driven by higher export pricing in the Alkali Business within the sodium minerals and sulfur services segment[139](index=139&type=chunk) [Segment Margin](index=34&type=section&id=Segment%20Margin) | Segment | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Offshore pipeline transportation | $70,904 | $84,269 | | Sodium minerals and sulfur services | $67,375 | $43,720 | | Onshore facilities and transportation | $7,036 | $20,999 | | Marine transportation | $12,137 | $7,109 | | Total Segment Margin | $157,452 | $156,097 | - Total Segment Margin increased by **$1.4 million (1%)** in Q1 2022 compared to Q1 2021[132](index=132&type=chunk) [Offshore Pipeline Transportation Segment](index=36&type=section&id=Offshore%20Pipeline%20Transportation%20Segment) | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Offshore crude oil pipeline revenue, net | $60,868 | $62,662 | | Offshore natural gas pipeline revenue | $9,069 | $10,397 | | Offshore pipeline transportation Segment Margin | $70,904 | $84,269 | | Crude oil pipelines (avg barrels/day, 100% basis) | 518,889 | 601,057 | | Natural gas transportation volumes (MMBtus/day, 100% basis) | 223,662 | 325,669 | - Segment Margin decreased by **$13.4 million (16%)** due to unplanned operational maintenance downtime, incremental producer downtime, and lower distributions from equity investments (specifically Poseidon)[150](index=150&type=chunk) - Future volumes are expected to increase from the King's Quay floating production system (first oil April 2022) and Argos floating production system (first oil expected Q3 2022)[152](index=152&type=chunk) [Sodium Minerals and Sulfur Services Segment](index=37&type=section&id=Sodium%20Minerals%20and%20Sulfur%20Services%20Segment) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | NaHS volumes (Dry short tons) | 32,169 | 28,802 | | Soda Ash volumes (short tons sold) | 744,788 | 762,820 | | Revenues associated with Alkali Business (in thousands) | $203,659 | $167,324 | | Segment Margin (in thousands) | $67,375 | $43,720 | | Average index price for NaOH per DST | $972 | $648 | - Segment Margin increased by **$23.7 million (54%)** due to higher export pricing in the Alkali Business and increased volumes and pricing in refinery services, driven by strong global demand and tight supply[155](index=155&type=chunk) - The company plans to restart its original Granger production facility (**500,000 tons/year**) in Q1 2023 and expects first production from the Granger Optimization Project (**750,000 tons/year**) in Q3 2023[155](index=155&type=chunk) [Onshore Facilities and Transportation Segment](index=38&type=section&id=Onshore%20Facilities%20and%20Transportation%20Segment) | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Gathering, marketing, and logistics revenue | $213,644 | $178,562 | | Segment Margin | $7,036 | $20,999 | | Onshore crude oil pipelines total (avg barrels/day) | 113,373 | 110,059 | | Crude oil and petroleum products sales (avg barrels/day) | 23,887 | 31,462 | | Rail unload volumes (avg barrels/day) | 2,505 | 40,252 | - Segment Margin decreased by **$14.0 million (66%)** primarily due to **$17.5 million** in cash receipts from the previously owned NEJD pipeline in Q1 2021, which did not recur in Q1 2022[163](index=163&type=chunk) - The decrease was partially offset by higher volumes on the Texas pipeline, which benefited from the CHOPS pipeline being back in service[163](index=163&type=chunk) [Marine Transportation Segment](index=40&type=section&id=Marine%20Transportation%20Segment) | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :-------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Inland freight revenues | $21,036 | $17,515 | | Offshore freight revenues | $18,938 | $14,526 | | Total segment revenues | $55,774 | $40,331 | | Segment Margin | $12,137 | $7,109 | | Inland Barge Utilization | 90.3% | 72.0% | | Offshore Barge Utilization | 96.6% | 95.7% | - Segment Margin increased by **$5.0 million (71%)** due to higher utilization and day rates in both inland and offshore businesses, including the M/T American Phoenix[167](index=167&type=chunk) - The company continues to enter into short-term contracts, believing current day rates have not fully recovered from cyclical lows[167](index=167&type=chunk) [Other Costs, Interest, and Income Taxes](index=40&type=section&id=Other%20Costs%2C%20Interest%2C%20and%20Income%20Taxes) | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Total general and administrative expenses | $15,122 | $11,666 | | Total depreciation, depletion and amortization expense | $69,506 | $66,286 | | Net interest expense | $55,104 | $57,829 | - General and administrative expenses increased by **$3.5 million** due to higher corporate costs and long-term incentive compensation[169](index=169&type=chunk) - Net interest expense decreased by **$2.7 million** due to lower outstanding balance on the senior secured credit facility and higher capitalized interest, partially offset by increased interest on senior unsecured notes[173](index=173&type=chunk)[174](index=174&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) [General](index=42&type=section&id=General) - The company's new credit agreement (April 2021) provides a **$950 million** senior secured credit facility, with the Term Loan fully repaid in November 2021 from the sale of a **36% minority interest** in CHOPS[177](index=177&type=chunk) - As of March 31, 2022, the company had **$553.7 million** available borrowing capacity under its Revolving Loan, with no scheduled long-term debt maturities until 2024[179](index=179&type=chunk) - A **$40 million** sale of the Independence Hub platform in April 2022 (net **$32 million** to ownership) will provide additional borrowing capacity[179](index=179&type=chunk) [Capital Resources](index=42&type=section&id=Capital%20Resources) - Long-term debt totaled approximately **$3.0 billion** at March 31, 2022, consisting of **$94.8 million** under the senior secured credit facility and **$2.9 billion** in senior unsecured notes[182](index=182&type=chunk) - The Granger Optimization Project (GOP) completion is extended to H2 2023, with BXC committing up to **$351.8 million** in Alkali Holdings preferred units, of which **250,114 units** were outstanding as of March 31, 2022[183](index=183&type=chunk)[184](index=184&type=chunk) - The company has a universal shelf registration statement (2021 Shelf) on file with the SEC, allowing for unlimited equity and debt securities issuance until April 2024 to meet future liquidity needs[186](index=186&type=chunk) [Cash Flows from Operations](index=43&type=section&id=Cash%20Flows%20from%20Operations) - Net cash flows provided by operating activities decreased to **$54.2 million** in Q1 2022 from **$77.2 million** in Q1 2021, primarily due to changes in working capital and higher interest payments[193](index=193&type=chunk) - Operating cash flows are impacted by changes in inventory, timing of accounts payable and receivable, and margin funding for commodity derivatives[187](index=187&type=chunk)[191](index=191&type=chunk) [Capital Expenditures and Distributions Paid to Our Unitholders](index=44&type=section&id=Capital%20Expenditures%20and%20Distributions%20Paid%20to%20Our%20Unitholders) | Capital Expenditure Type | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Total maintenance capital expenditures | $21,917 | $26,153 | | Total growth capital expenditures | $51,921 | $9,882 | | Total capital expenditures for fixed and intangible assets | $73,838 | $36,035 | | Capital expenditures related to equity investees | $1,323 | $0 | | Total capital expenditures | $75,161 | $36,035 | [Growth Capital Expenditures](index=44&type=section&id=Growth%20Capital%20Expenditures) - The Granger Optimization Project (GOP) is anticipated to be completed in H2 2023, increasing production by approximately **750,000 tons per year**, with remaining capital expenditures now funded internally[196](index=196&type=chunk) - The company expects to spend approximately **$600 million gross ($500 million net)** over the next three years to expand the CHOPS pipeline and construct a new **105-mile SYNC pipeline** for deepwater developments[197](index=197&type=chunk)[198](index=198&type=chunk) - Growth capital expenditures will be funded by available borrowing capacity under the Revolving Loan and increasing cash flows from operations, driven by new offshore volumes and favorable Alkali Business pricing[199](index=199&type=chunk) [Maintenance Capital Expenditures](index=45&type=section&id=Maintenance%20Capital%20Expenditures) - Maintenance capital expenditures in Q1 2022 primarily related to marine transportation (barge and fleet upgrades) and the Alkali Business (equipment and facilities maintenance), as well as offshore transportation assets[200](index=200&type=chunk) [Distributions to Unitholders](index=45&type=section&id=Distributions%20to%20Unitholders) - The company declared a quarterly distribution of **$0.15 per common unit** and **$0.7374 per Class A Convertible Preferred Unit** for Q1 2022, payable May 13, 2022[202](index=202&type=chunk) [Guarantor Summarized Financial Information](index=45&type=section&id=Guarantor%20Summarized%20Financial%20Information) - The company's **$3.0 billion** senior unsecured notes are fully and unconditionally guaranteed by all **100% owned domestic Guarantor Subsidiaries**, which largely own assets outside the Alkali Business[203](index=203&type=chunk) | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :------------------------------------ | :------------------------------ | :------------------------------- | | Current assets | $438,728 | $325,666 | | Fixed assets, net | $2,179,728 | $2,197,127 | | Non-current assets | $812,652 | $817,199 | | Current liabilities | $461,609 | $341,782 | | Non-current liabilities | $3,386,132 | $3,334,091 | | Class A Convertible Preferred Units | $790,115 | $790,115 | | Revenues (Q1 2022) | $405,096 | | | Operating income (Q1 2022) | $12,907 | | | Net loss (Q1 2022) | $(34,307) | | | Net loss attributable to common unitholders (Q1 2022) | $(52,991) | | [Non-GAAP Financial Measure Reconciliations](index=47&type=section&id=Non-GAAP%20Financial%20Measure%20Reconciliations) | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Net loss attributable to Genesis Energy, L.P. | $(5,250) | $(34,224) | | Income tax expense | $304 | $222 | | Depreciation, depletion, amortization and accretion | $72,948 | $68,997 | | Plus (minus) Select Items, net | $12,211 | $46,495 | | Maintenance capital utilized | $(13,500) | $(12,800) | | Cash tax expense | $(125) | $(100) | | Distributions to preferred unitholders | $(18,684) | $(18,684) | | Redeemable noncontrolling interest redemption value adjustments | $7,823 | $4,791 | | Available Cash before Reserves | $55,727 | $54,500 | [Non-GAAP Financial Measures](index=48&type=section&id=Non-GAAP%20Financial%20Measures) [Segment Margin (Non-GAAP Definition)](index=48&type=section&id=Segment%20Margin%20%28Non-GAAP%20Definition%29) - Segment Margin is defined as revenues less product costs, operating expenses, and segment general and administrative expenses (net of noncontrolling interests), plus or minus applicable Select Items, excluding asset sale gains/losses[213](index=213&type=chunk) [Available Cash before Reserves (Non-GAAP Definition)](index=48&type=section&id=Available%20Cash%20before%20Reserves%20%28Non-GAAP%20Definition%29) - Available Cash before Reserves is a non-GAAP measure used to assess financial and operating performance, project viability, and ability to satisfy non-discretionary cash requirements and make discretionary payments[215](index=215&type=chunk)[220](index=220&type=chunk) [Maintenance Capital Requirements](index=49&type=section&id=Maintenance%20Capital%20Requirements) - Maintenance capital expenditures are capitalized costs necessary to maintain existing assets' service capability, which can be discretionary or non-discretionary[217](index=217&type=chunk) - The company's maintenance capital expenditures have become more discretionary and material since 2014, particularly for non-pipeline assets like marine vessels and trucks[219](index=219&type=chunk) [Maintenance Capital Utilized](index=50&type=section&id=Maintenance%20Capital%20Utilized) - Maintenance capital utilized is defined as the portion of previously incurred maintenance capital expenditures used during the quarter, allocated ratably over the useful lives of projects/components[221](index=221&type=chunk) - This measure serves as a proxy for non-discretionary maintenance capital expenditures and considers the relationship among maintenance capital expenditures, operating expenses, and depreciation[222](index=222&type=chunk) [Critical Accounting Estimates](index=50&type=section&id=Critical%20Accounting%20Estimates) - There have been no new or material changes to the critical accounting estimates discussed in the company's Annual Report[223](index=223&type=chunk) [Forward Looking Statements](index=50&type=section&id=Forward%20Looking%20Statements) - The report contains forward-looking statements regarding future activities, financial performance, and growth plans, which involve risks, uncertainties, and assumptions that could cause actual results to differ materially[224](index=224&type=chunk) - Key factors influencing future results include demand and price trends for commodities, execution of business strategies, throughput levels, regulatory changes, capital availability, and global economic conditions[225](index=225&type=chunk)[228](index=228&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=52&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section states that there have been no material changes to the quantitative and qualitative disclosures about market risk previously provided in the company's Annual Report, with further details on derivative instruments and hedging activities available in Note 15 - No material changes have occurred in the quantitative and qualitative disclosures about market risk since the Annual Report[229](index=229&type=chunk) [Item 4. Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures as of March 31, 2022, and states that there were no material changes to internal control over financial reporting during the quarter - The company's disclosure controls and procedures were evaluated and determined to be effective as of March 31, 2022[230](index=230&type=chunk) - No changes materially affected, or are reasonably likely to materially affect, internal control over financial reporting during Q1 2022[231](index=231&type=chunk) [PART II. OTHER INFORMATION](index=53&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) This section indicates that there have been no material developments in legal proceedings since the filing of the Annual Report on Form 10-K, and no environmental matters requiring disclosure under the **$1 million** threshold - No material developments in legal proceedings have occurred since the Annual Report filing[234](index=234&type=chunk) - No environmental matters requiring disclosure under the **$1 million** threshold were identified for the period[235](index=235&type=chunk) [Item 1A. Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) This section states that there has been no material change in the company's risk factors as previously disclosed in its Annual Report on Form 10-K - No material change in risk factors has occurred since the Annual Report on Form 10-K[236](index=236&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section confirms that there were no sales of unregistered equity securities during the first quarter of 2022 - No sales of unregistered equity securities occurred during Q1 2022[237](index=237&type=chunk) [Item 3. Defaults upon Senior Securities](index=53&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) This section reports that there were no defaults upon senior securities during the period - No defaults upon senior securities occurred[238](index=238&type=chunk) [Item 4. Mine Safety Disclosures](index=53&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section refers to Exhibit 95 for information regarding mine safety and other regulatory actions at the company's mines in Green River and Granger, Wyoming - Mine safety disclosures are provided in Exhibit 95[239](index=239&type=chunk) [Item 5. Other Information](index=53&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to report for the period - No other information to report[240](index=240&type=chunk) [Item 6. Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including organizational documents, unit certificates, certifications by the CEO and CFO, mine safety disclosures, and XBRL interactive data files - The exhibits include various corporate documents, certifications (31.1, 31.2, 32), mine safety disclosures (95), and XBRL interactive data files (101.INS, 101.SCH, 101.CAL, 101.LAB, 101.PRE, 101.DEF, 104)[242](index=242&type=chunk) [SIGNATURES](index=55&type=section&id=SIGNATURES)

Genesis Energy, L.P. (NYSE:GEL) Q4 2021 Earnings Conference Call February 17, 2022 10:00 AM ET Company Participants Dwayne Morley – Vice President-Investor Relations Grant Sims – Chief Executive Officer Conference Call Participants Michael Blum – Wells Fargo Kyle May – Capital One Securities Karl Blunden – Goldman Sachs Operator Hello, and welcome to the Genesis Energy Fourth Quarter 2021 Earnings Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasur ...