-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F6DAlCxkMTgCT77yTYsGa118n3OgG9G22UgdqdIrr2hPZpApWu+A1LwlBfrlXkkT l2uYWeDqagmKoAwpCXXaKQ== 0000950129-04-002732.txt : 20040504 0000950129-04-002732.hdr.sgml : 20040504 20040504130559 ACCESSION NUMBER: 0000950129-04-002732 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040503 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040504 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENESIS ENERGY LP CENTRAL INDEX KEY: 0001022321 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-PETROLEUM BULK STATIONS & TERMINALS [5171] IRS NUMBER: 760513049 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12295 FILM NUMBER: 04776600 BUSINESS ADDRESS: STREET 1: 500 DALLAS SUITE 2500 CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7138602500 MAIL ADDRESS: STREET 1: 500 DALLAS SUITE 2500 CITY: HOUSTON STATE: TX ZIP: 77002 8-K 1 h15002e8vk.txt GENESIS ENERGY, L.P. - MAY 3, 2004 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): May 3, 2004 GENESIS ENERGY, L.P. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 1-12295 76-0513049 (State or other jurisdiction of (Commission (I.R.S. Employer Identification No.) incorporation or organization) File Number)
500 DALLAS, SUITE 2500, HOUSTON, TEXAS 77002 (Address of principal executive offices) (Zip Code) (713) 860-2500 (Registrant's telephone number, including area code) ================================================================================ ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (c) Exhibits 99.1 Copy of Genesis Energy, L.P.'s press release dated May 3, 2004. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. The following information is furnished pursuant to Item 12, "Results of Operations and Financial Condition." Genesis Energy, L.P. ("GELP") issued a press release on May 3, 2004 regarding its financial results for the quarter ended March 31, 2004, and held a webcast conference call discussing those results on May 4, 2004. A copy of this earnings press release is furnished as Exhibit 99.1 to this report. Genesis Energy, L.P. does not intend for this Item 12 or Exhibit 99.1 to be incorporated by reference into filings under the Securities Exchange Act of 1934. The webcast conference call will be available for replay on Genesis Energy, L.P.'s website at www.genesiscrudeoil.com. A summary of this conference call is archived on our website. USE OF NON-GAAP FINANCIAL MEASURES Our earnings press release includes the non-generally accepted accounting principle ("non-GAAP") financial measures of Segment Margin and Available Cash. The press release provides reconciliations of these non-GAAP financial measures to their most directly comparable financial measure calculation and presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Our non-GAAP measures should not be considered as alternatives to GAAP measures such as net income, operating income or cash flow from operating activities or any other GAAP measure of liquidity or financial performance. Segment Margin. Our profitability depends to a significant extent upon our ability to maximize segment margin. This measure forms the basis or our internal financial reporting and is used by senior management in deciding how to allocate capital resources among business segments. We believe that investors benefit from having access to the same financial measures that our management uses in evaluating segment results. The GAAP measure most directly comparable to total segment margin is operating income. We define segment margin as revenues less costs of sales and operating expenses. This measure is exclusive of depreciation and amortization, general and administrative expenses, any gains or losses on asset disposals. It also excludes the effects of any adjustments for the effects of derivative accounting, minority interests and the cumulative effect of any accounting changes. Available Cash. The non-GAAP financial measure of Available Cash is calculated in accordance with generally accepted accounting principles (GAAP), with the exception of maintenance capital expenditures as used in our calculation of Available Cash. Maintenance capital expenditures are capital expenditures (as defined by GAAP) to replace or enhance partially or fully depreciated assets in order to sustain the existing operating capacity or efficiency of our assets and extend their useful lives. We believe that investors benefit from having access to the same financial measures being utilized by management. Available Cash is a liquidity measure used by our management to compare cash flows generated by the Partnership to the cash distribution we pay to our limited partners and the general partner. This is an important financial measure to our public unitholders since it is an indicator of our ability to provide a cash return on their investment. Specifically, this financial measure tells investors whether or not the Partnership is generating cash flows at a level that can support a quarterly cash distribution to our partners. Lastly, Available Cash (also referred to as distributable cash flow) is a quantitative standard used throughout the investment community with respect to publicly-traded partnerships. -2- Several adjustments to net income are required to calculate Available Cash. These adjustments include: (1) the addition of non-cash expenses such as depreciation and amortization expense; (2) miscellaneous non-cash adjustments such as the addition of decreases or the subtraction of increases in the value of financial instruments; and (3) the subtraction of maintenance capital expenditures. As part of our press release information, we have provided a reconciliation of this non-GAAP financial measure to Cash Flow from Operating Activities, the most comparable financial measure calculated and presented in accordance with GAAP. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. GENESIS ENERGY, L.P. (A Delaware Limited Partnership) By: GENESIS ENERGY, Inc., as General Partner Date: May 4, 2004 By: /s/ ROSS A. BENAVIDES ---------------------------- Ross A. Benavides Chief Financial Officer Index to Exhibit 99.1 Genesis Energy, L.P.'s press release dated May 3, 2004. EX-99.1 2 h15002exv99w1.txt PRESS RELEASE - REPORTS FIRST QUARTER RESULTS FOR IMMEDIATE RELEASE Contact: Ross A. Benavides Chief Financial Officer (713) 860-2528 GENESIS ENERGY, L.P. REPORTS FIRST QUARTER RESULTS May 3, 2004 - Genesis Energy, L.P. (AMEX:GEL) announced today that its net loss for the first quarter of 2004 was $1,005,000, or $0.11 per unit. This loss included a charge of $1,104,000 related to the Partnership's incentive compensation plans. "We remain on track to meet our objectives for 2004 said Mark Gorman, President and CEO. We generated Available Cash during the quarter of $1,491,000 or $0.15 per unit, which is equal to our distribution for the quarter. Our crude oil pipeline and CO2 wholesale distribution segments performed very well during the quarter. Additionally, we are making progress towards expanding our credit facility to allow us to make accretive acquisitions this year. "The loss generated this quarter was primarily attributable to a charge for the employee stock appreciation rights program that was implemented in 2003. This expense is a recurring non-cash charge that was unusually large this quarter due to the fact that Genesis' unit price increased by 27 percent from $9.80 at the beginning of the quarter to $12.45 at the end of the quarter. This charge may impact our earnings in future periods if our unit price is volatile. We do not expect this non-cash expense to have an adverse impact on our ability to make or increase distributions to our Unitholders." Financial Results Genesis generated a loss for the first quarter of 2004 of $1.0 million, or an $0.11 loss per unit, compared to first quarter 2003 earnings of $0.9 million, or $0.10 earned per unit. Genesis generated a loss from continuing operations of $0.8 million, or $0.09 per unit, for the 2004 period and income from continuing operations of $0.4 million, or $0.04, per unit for 2003. Loss from discontinued operations for the 2004 period was $0.2 million, or $0.02 per unit. Income from discontinued operations for the comparable period of 2003 was $0.5 million, or $0.06 per unit. The following table presents certain selected financial information by segment for the first quarter reporting periods for continuing operations:
Crude Oil ----------------------------- Gathering and CO2 Marketing Pipeline Marketing Total ------------- -------- --------- -------- (in thousands) Three Months Ended March 31, 2004 Revenues: External customers $192,996 $ 3,263 $ 1,831 $198,090 Intersegment -- 822 -- 822 -------- -------- -------- -------- Total revenues of reportable segments $192,996 $ 4,085 $ 1,831 $198,912 ======== ======== ======== ======== Segment margin(a) $ 1,006 1,853 $ 1,240 $ 4,099 Capital expenditures $ 51 $ 349 $ -- $ 400 Maintenance capital expenditures $ 51 $ 104 $ -- $ 155 Three Months Ended March 31, 2003 Revenues: External customers $171,693 $ 3,211 $ -- $174,904 Intersegment -- 778 -- 778 -------- -------- -------- -------- Total revenues of reportable segments $171,693 $ 3,989 $ -- $175,682 ======== ======== ======== ======== Segment margin(a) $ 2,790 1,511 $ -- $ 4,301 Capital expenditures $ 96 $ 854 $ -- $ 950 Maintenance capital expenditures $ 96 $ 854 $ -- $ 950
(a) Segment margin was calculated as revenues less cost of sales and operating expenses. A reconciliation of segment margin (a non-GAAP measure) to income from continuing operations is presented for periods presented in the tables at the end of this release. Segment margin from continuing crude oil gathering and marketing activities was $1.0 million for the 2004 first quarter, a decrease of $1.8 million from 2003 levels. The primary factor decreasing segment margin between the two periods was a $2.1 million negative price variance. Partially offsetting this negative price variance was a 9% increase in purchased volumes, increasing segment margin by $0.5 million. Field costs were slightly higher in the 2004 period. Crude oil pipeline segment margin from continuing operations was $1.9 million for first quarter of 2004 as compared to $1.5 million for the 2003 period. Pipeline operating costs were $0.3 million less in 2004, principally due to costs incurred in 2003 related to regulatory requirements and right of way maintenance. Segment margin from CO2 wholesale distribution activities in the 2004 period was $1.2 million. Genesis entered this business in November 2003. General and administrative expenses increased by $0.9 million during the 2004 first quarter as compared to the 2003 period, principally due to an accrual related to incentive compensation under the Partnership's plans. The increase in Genesis market unit price from $9.80 at December 31, 2003 to $12.45 at March 31, 2004 resulted in a $1.1 million charge related to Genesis' long-term stock appreciation plan. Interest costs were $0.4 million lower in the 2004 first quarter than the 2003 period, primarily due to a charge in the 2003 period for unamortized deferred costs related to a credit facility that was replaced in March 2003. The $0.2 million loss from discontinued operations in the 2004 first quarter was due to costs to dismantle and dispose of abandoned assets. The operations that were disposed of in the fourth quarter of 2003 generated income of $0.5 million during the first quarter of 2003. Genesis paid a distribution of $0.15 per unit for the fourth quarter of 2003 in February 2004, and will pay a distribution of $0.15 per unit for the first quarter of 2004 in May 2004. Genesis generated Available Cash before reserves (a non-GAAP measure) during the first quarter of 2004 of $1.5 million and will make a distribution with respect to 2004's first quarter. (Please see the accompanying schedules for a reconciliation of Available Cash, a non-GAAP measure, to net cash flow provided by operations, the GAAP measure.) Available Cash Several adjustments to net income are required to calculate Available Cash. The calculation of Available Cash before reserves for the quarter ended March 31, 2004 is as follows: Net loss $(1,005,000) Depreciation and amortization expense 1,547,000 Non-cash charge for incentive compensation plan 1,104,000 Maintenance capital expenditures (155,000) ----------- Available Cash before reserves $ 1,491,000 ===========
Available Cash (a non-GAAP liquidity measure) has been reconciled to cash flow from operating activities (the GAAP measure) for the three months ended March 31, 2004 in the financial tables below. Outlook The Partnership's continuing gathering and marketing business is expected to perform better during 2004 than it did during 2003, principally due to the expectation of less volatility in P-Plus market prices. Genesis expects pipeline segment margin from continuing operations for 2004 to be generally consistent with 2003 levels. Genesis owned its newly purchased wholesale CO2 marketing operations for two months in 2003. Segment margin from these activities in 2004 is expected to be more than the annualized 2003 amount due to seasonality. Genesis expects general and administrative expenses to be higher in 2004 than in 2003, and expects 2004 projected maintenance capital expenditures to be less than half of the amounts expended during 2003. Based on the foregoing, Genesis continues to expect to be able to sustain its regular quarterly distribution of $0.15 per unit for 2004 and to be able to restore its regular distributions to the targeted minimum distribution amount of $0.20 per unit per quarter in 2005. However, Genesis could increase its regular quarterly distribution sooner or decrease its distribution depending on actual results. Earnings Conference Call Genesis Energy, L.P. will broadcast its Earnings Conference Call on Tuesday, May 4, 2004, at 10:00 a.m. Central time. This call can be accessed at www.genesiscrudeoil.com. Choose the Investor Relations button. Listeners should go to this website at least fifteen minutes before this event to download and install any necessary audio software. For those unable to attend the live broadcast, a replay will be available beginning approximately one hour after the event and remain available on our website for 60 days. There is no charge to access the event. Genesis Energy, L.P. operates crude oil common carrier pipelines and is an independent gatherer and marketer of crude oil in North America, with operations concentrated in Texas, Louisiana, Alabama, Florida, and Mississippi. Genesis Energy, L.P. also operates a wholesale CO2 marketing business. This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although Genesis believes that its expectations are based upon reasonable assumptions, it can give no assurance that its goals will be achieved. Important factors that could cause actual results to differ materially from those in the forward looking statements herein include the timing and extent of changes in commodity prices for oil, ability to obtain adequate credit facilities, environmental risks, government regulation, the ability of the Partnership to meet its stated business goals and other risks noted from time to time in the Partnership's Securities and Exchange Commission filings. Actual results may vary materially. (tables to follow) GENESIS ENERGY, L.P. SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED (in thousands except per unit amounts and volumes)
Three Months Ended Three Months Ended March 31, 2004 March 31, 2003 -------------- -------------- Revenues $ 198,912 $ 175,682 Cost of sales 194,813 171,381 General & administrative expenses 3,164 2,277 Depreciation and amortization expense 1,547 1,144 Gains from disposals of surplus assets -- (44) --------- --------- OPERATING (LOSS) INCOME (612) 924 Interest and other, net (170) (542) --------- --------- (LOSS) INCOME FROM CONTINUING OPERATIONS (782) 382 LOSS FROM DISCONTINUED OPERATIONS (223) 497 --------- --------- NET (LOSS) INCOME $ (1,005) $ 879 ========= ========= NET (LOSS) INCOME PER COMMON UNIT - BASIC AND DILUTED Continuing Operations $ (0.09) $ 0.04 Discontinued Operations (0.02) 0.06 --------- --------- NET (LOSS) INCOME PER COMMON UNIT - BASIC AND DILUTED $ (0.11) $ 0.10 ========= ========= CONTINUING OPERATIONS VOLUMES: Crude oil wellhead barrels per day 48,409 45,869 Total gathering and marketing barrels per day 60,591 56,313 Crude oil pipeline barrels per day 68,583 67,728 CO2 marketing Mcf per day 39,173 --
GENESIS ENERGY, L.P. SUMMARY CONSOLIDATED BALANCE SHEETS - UNAUDITED (in thousands)
March 31, 2004 December 31, 2003 -------------- ----------------- ASSETS Cash $ 340 $ 2,869 Accounts receivable 74,406 66,732 Inventories 1,240 1,546 Other current assets 10,246(1) 17,064(2) -------- -------- TOTAL CURRENT ASSETS 86,232 88,211 Net property 33,347 33,971 CO2 contracts 23,550 24,073 Other assets 767 860 -------- -------- TOTAL ASSETS $143,896 $147,115 ======== ======== LIABILITIES AND PARTNERS' CAPITAL Accounts payable $ 74,902 $ 67,175 Accrued liabilities 8,654 20,069(2) -------- -------- TOTAL CURRENT LIABILITIES 83,556 87,244 Long-term debt 9,900 7,000 Minority interest 517 517 Partners' capital 49,923 52,354 -------- -------- TOTAL LIABILITIES AND PARTNERS' CAPITAL $143,896 $147,115 ======== ========
(1) Includes $6.9 million receivable for reimbursement from insurers related to settlement of litigation. (2) Includes $12.8 million accrual for settlement of litigation and the related receivable for reimbursement from insurers. GENESIS ENERGY, L.P. SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED (in thousands)
Three Months Ended Three Months Ended March 31, 2004 March 31, 2003 -------------- -------------- Net income $(1,005) $ 879 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 1,547 1,515 Amortization/write-off of credit facility issuance costs 93 750 Change in fair value of derivatives -- 39 Gains on asset disposals -- (44) Other non-cash compensation plan charges 1,104 -- Changes to components of working capital (5,342) 2,917 ------- ------- NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES (3,603) 6,056 ------- ------- Additions to property and equipment (400) (2,195) Proceeds from sales of assets and other -- 84 ------- ------- NET CASH USED IN INVESTING ACTIVITIES (400) (2,111) ------- ------- Net borrowings (repayments) of debt 2,900 (2,000) Distributions to partners (1,426) -- Credit facility issuance fees -- (1,093) ------- ------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 1,474 (3,093) ------- ------- Net (decrease) increase in cash and cash equivalents (2,529) 852 Cash and cash equivalents at beginning of period 2,869 1,071 ------- ------- Cash and cash equivalents at end of period $ 340 $ 1,923 ======= =======
GENESIS ENERGY, L.P. GAAP TO NON-GAAP FINANCIAL MEASURE RECONCILIATIONS SEGMENT MARGIN EXCLUDING DEPRECIATION AND AMORTIZATION RECONCILIATION TO OPERATING (LOSS) INCOME
Three Months Ended Three Months Ended March 31, 2004 March 31, 2003 -------------- -------------- (in thousands) Segment margin excluding depreciation and amortization (non-GAAP measure) $4,099 $4,301 General & administrative expenses 3,164 2,277 Depreciation and amortization expense 1,547 1,144 Gains from disposals of surplus assets - (44) -------------- ------------- Operating (loss) income (GAAP measure) $ (612) $ 924 ============== =============
AVAILABLE CASH BEFORE RESERVES RECONCILIATION TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Three Months Ended March 31, 2004 (in thousands) -------------- Net cash flow provided by operating activities (GAAP measure) $(3,603) Adjustments to reconcile net cash flow provided by operating activities to Available Cash before reserves: Maintenance capital expenditures (155) Amortization of credit facility issuance costs (93) Net effect of changes in operating accounts not included in calculation of Available Cash before reserves 5,342 ------- Available Cash before reserves (non-GAAP measure) $ 1,491 =======
Genesis believes that investors benefit from having access to the same financial measures being utilized by management. Segment margin forms the basis of our internal financial reporting and is used by senior management in deciding how to allocate capital resources among business segments. We believe that investors benefit from having access to the same financial measures that our management uses in evaluating segment results. The GAAP measure most directly comparable to total segment margin is operating income. We define segment margin as revenues less costs of sales and operating expenses. This measure is exclusive of depreciation and amortization, general and administrative expenses, any gains or losses on asset disposals. It also excludes the effects of any adjustments for the effects of derivative accounting, minority interests and the cumulative effect of any accounting changes. Available Cash is a liquidity measure used by management to compare cash flows generated by the Partnership to the cash distribution paid to the limited partners and the general partner. This is an important financial measure to the public unitholders since it is an indicator of the Partnership's ability to provide a cash return on their investment. Specifically, this financial measure tells investors whether or not the Partnership is generating cash flows at a level that can support a quarterly cash distribution to the partners. Lastly, Available Cash (also referred to as distributable cash flow) is the quantitative standard used throughout the investment community with respect to publicly-traded partnerships. # # # -----END PRIVACY-ENHANCED MESSAGE-----