-----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, WkFTgmbe/aVFdU8ud+O3GzJnTQY0L7hog++mR+0T9e7ylN6IsAiMnv56mfUrQaxj 9L5Ki2VNhfnCfhndinHtMw== 0001022321-04-000002.txt : 20040225 0001022321-04-000002.hdr.sgml : 20040225 20040225162408 ACCESSION NUMBER: 0001022321-04-000002 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040225 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20040225 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: 04627921 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 f8k022504.txt FILE 8-K FOR PERIOD 2/25/2004 Microsoft Word 10.0.2627;-1- ================================================================================ 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): February 25, 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 incorporation or organization) File Number) Identification No.) 500 Dallas, Suite 2500, Houston, Texas 77002 (Address of principal executive offices) (Zip Code) (713) 860-2500 (Registrant's telephone number, including area code) ================================================================================ 1 Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (c) Exhibits The following materials are filed as exhibits to this Current Report on Form 8-K. Exhibit. 99.1 Copy of Genesis Energy, L.P.'s press release dated February 25, 2004. Item 9 and 12. Regulation FD Disclosure and Results of Operations and Financial Condition. Genesis Energy, L.P. ("GELP") issued a press release on February 25, 2004 regarding its financial results for the year ended December 31, 2003, and held a webcast conference call discussing those results on February 25, 2004. A copy of this earnings press release is furnished as Exhibit 99.1 to this report. 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. The non-generally accepted accounting principles financial measure of Available Cash is presented in our earnings release. The amount included in this measure is computed in accordance with generally accepted accounting principles (GAAP), with the exception of maintenance capital expenditures as used in our calculation of Available Cash. Maintenance or sustaining capital expenditures are defined as capital expenditures (as defined by GAAP) which do not increase the capacity of an asset or generate additional revenues or cash flow from operations. 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 basic 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 the quantitative standard used throughout the investment community with respect to publicly-traded partnerships. 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 (2) 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. In accordance with General Instruction B.2. of Form 8-K and Securities and Exchange Commission Release No. 33-8176, the above information is being furnished under Items 9 and 12 of Form 8-K and is not deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, is not subject to the liabilities of that section and is not incorporated by reference in any filing under the Securities Act of 1933, as amended. 2 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: February 25, 2004 By: /s/ ROSS A. BENAVIDES -------------------------------- Ross A. Benavides Chief Financial Officer 3 EX-99 3 pr022504.txt PRESS RELEASE DATED 2/25/2004 FOR IMMEDIATE RELEASE Contact: Ross A. Benavides Chief Financial Officer (713) 860-2528 GENESIS ENERGY, L.P. REPORTS 2003 RESULTS February 25, 2004 - Genesis Energy, L.P. (AMEX:GEL) today announced earnings for 2003 of $13.3 million, or $1.50 per unit, and fourth quarter earnings of $11.8 million or $1.28 per unit. These earnings included a gain on the disposal of portions of its Texas pipeline system of $13.1 million in the fourth quarter. Mark Gorman, President and CEO said "2003 was an important year for Genesis. We accomplished our key objectives for the year: o Entering into a new credit facility with a group of banks led by Fleet National Bank during the first quarter; o Completing the sale of our Texas Gulf Coast operations, along with related sales and abandonment of assets, during the fourth quarter; o Completing the fourth quarter acquisition of an interest in 167.5 Bcf of CO2 under a volumetric production payment, plus certain marketing rights, from Denbury Resources Inc. enabling Genesis to commence a wholesale CO2 marketing operation; o Generating Available Cash of $3.7 million before reserves compared to distributions of $2.7 million for the year; and o Increasing our regular quarterly distribution from $0.05 to $0.15 per unit, starting with the fourth quarter of 2003." 2003 Financial Results Genesis generated earnings for 2003 of $13.3 million, or $1.50 per unit, compared to 2002 earnings of $5.1 million, or $0.58 per unit. Genesis generated a loss from continuing operations of $419,000, or $0.05 per unit, for 2003 and income from continuing operations of $1.0 million, or $0.12, per unit for 2002. Income from discontinued operations for 2003 was $13.7 million, or $1.55 per unit, and included $13.0 million of gain from disposal of assets. Income from discontinued operations for the comparable period of 2002 was $4.1 million, or $0.46 per unit. Gross margin (excluding depreciation) from continuing crude oil gathering and marketing activities was $7.9 million for 2003, a decrease of $3.3 million from 2002 levels. The primary factor decreasing gross margin (excluding depreciation) between the two periods was a 23% decrease in purchased volumes, reducing gross margin (excluding depreciation) by $5.3 million. Partially offsetting this decrease in volumes was a $1.7 million positive price variance. Field costs were slightly lower in the 2003 period. 1 Crude oil pipeline gross margin (excluding depreciation) from continuing operations was $5.1 million for 2003 as compared to $5.4 million for the 2002 period. Pipeline operating costs were $2.0 million greater in 2003, principally due to regulatory and spill prevention requirements and right of way maintenance. Partially offsetting these higher costs was a $2.4 million benefit from increases in tariff rates. Additionally, in the 2002 period, the accrual for fines and penalties related to the 1999 Mississippi spill increased by $1.5 million. Gross margin (excluding amortization) from CO2 wholesale distribution activities was $724,000. This amount represents gross margin for the last two months of 2003 after Genesis acquired the CO2 assets. General and administrative expenses increased by $904,000 during 2003 as compared to 2002, principally due to small increases in audit and consultant fees, directors' fees and premiums for officers and directors liability insurance. An accrual in 2003 for incentive compensation under the Partnership's plans was offset by reductions in personnel and benefits costs. Interest costs were $49,000 lower in 2003 than the 2002 period, primarily due to lower commitment fees from a reduction in the size of the Partnership's credit facility between the two periods. Two other items that occurred in 2002, but not in 2003, were a loss from the change in the fair value of derivatives of $1.3 million and a gain from the disposal of surplus assets of $705,000. Income from discontinued operations in 2003 included a gain of $13.1 million from the disposition of assets, plus income from the discontinued operations during the year of $714,000. The reduction from the comparable income from these assets in 2002 was due primarily to costs incurred in 2003 to dismantle and dispose of assets. Genesis incurred maintenance capital expenditures of $4.2 million for both 2003 and 2002. During the fourth quarter, Genesis issued 688,811 additional Common Units to Denbury Resources Inc. for $4.9 million. Genesis paid distributions of $0.05 per unit for the first three quarters of 2003 and paid a distribution of $0.15 per unit for the fourth quarter of 2003 in February 2004. Genesis generated Available Cash before reserves (a non-GAAP measure) during 2003 of $3.7 million and made distributions with respect to 2003 of $2.7 million. (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.) 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 gross margin (excluding depreciation) 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. Gross margin before amortization from these activities in 2004 is expected to be more than the annualized 2003 amount. Genesis expects general and administrative expenses to be higher in 2004 than in 2003, 2 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. Available Cash Several adjustments to net income are required to calculate Available Cash. The calculation of Available Cash before reserves for the quarter ended December 31, 2003 is as follows: Net income $ 11,766,000 Depreciation and amortization expense 2,260,000 Excluded gains from asset sales (13,088,000) Cash proceeds in excess of gains on certain asset sales 833,000 Non-cash charges 229,000 Maintenance capital expenditures (697,000) ----------------- Available Cash before reserves $ 1,303,000 ================= The calculation of Available Cash before reserves for the year ended December 31, 2003 is as follows: Net income $ 13,322,000 Depreciation and amortization expense 6,504,000 Excluded gains from asset sales (13,088,000) Cash proceeds in excess of gains on certain asset sales 879,000 Non-cash charges 229,000 Maintenance capital expenditures (4,176,000) ----------------- Available Cash before reserves $ 3,670,000 ================= Available Cash (a non-GAAP liquidity measure) has been reconciled to cash flow from operating activities (the GAAP measure) for the three months and year ended December 31, 2003 in the financial tables below. Earnings Conference Call Genesis Energy, L.P. will broadcast its Earnings Conference Call on Tuesday, February 25, 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, 3 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. (tables to follow) 4 Genesis Energy, L.P. Summary Consolidated Statements of Operations - Unaudited (in thousands except per unit amounts and volumes) Year Ended Year Ended December 31, 2003 December 31, 2002 ----------------- ----------------- Revenues $ 657,897 $ 652,628 Cost of Sales 644,157 636,042 -------------- ------------- GROSS MARGIN 13,740 16,586 General & Administrative Expenses 8,768 7,864 Depreciation and Amortization Expense 4,641 4,603 Unrealized Loss on Change in Fair Value of Derivatives - 1,279 Gains from Disposals of Surplus Assets (236) (705) Other operating charges - 1,500 -------------- ------------- OPERATING INCOME 567 2,045 Interest Expense, Net (986) (1,035) -------------- ------------- Income (Loss) from Continuing Operations (419) 1,010 Discontinued Operations 13,741 4,082 -------------- ------------- NET INCOME $ 13,322 $ 5,092 ============== ============= NET INCOME PER COMMON UNIT - BASIC AND DILUTED $ 1.50 $ 0.58 ============== ============= Continuing operations volumes: Wellhead barrels per day 45,015 47,819 Total gathering and marketing barrels per day 56,805 73,429 Pipeline barrels per day 66,959 71,870 Three Months Ended Three Months Ended December 31, 2003 December 31, 2002 ----------------- ----------------- Revenues $ 178,451 $ 151,833 Cost of Sales 174,676 146,048 -------------- ------------- GROSS MARGIN 3,775 5,785 General & Administrative Expenses 2,194 1,833 Depreciation and Amortization Expense 1,556 1,183 Gains from Disposals of Surplus Assets (120) (7) Other operating charges - 1,500 -------------- ------------- OPERATING INCOME 145 1,276 Interest and Other, Net (130) (188) -------------- ------------- Income from Continuing Operations 15 1,088 Discontinued Operations 11,751 481 -------------- ------------- NET INCOME $ 11,766 $ 1,569 ============== ============= NET INCOME PER COMMON UNIT - BASIC AND DILUTED $ 1.28 $ 0.18 ============== ============= Continuing operations volumes: Wellhead barrels per day 48,409 46,889 Total gathering and marketing barrels per day 61,350 58,181 Pipeline barrels per day 67,855 72,014
5 Genesis Energy, L.P. Summary Consolidated Balance Sheets - Unaudited (in thousands) December 31, 2003 December 31, 2002 ----------------- ----------------- ASSETS Cash $ 2,869 $ 1,071 Accounts Receivable 66,732 80,664 Inventories 1,546 4,952 Other Current Assets 17,064(1) 5,410 -------------- ------------- Total Current Assets 88,211 92,097 Net Property 33,971 44,460 CO2 Contracts 24,073 - Other Assets 860 980 -------------- ------------- Total Assets $ 147,115 $ 137,537 ============== ============= LIABILITIES AND PARTNERS' CAPITAL Accounts Payable $ 67,175 $ 87,386 Accrued Liabilities 20,069(1) 8,834 -------------- ------------- Total Current Liabilities 87,244 96,220 Long-Term Debt 7,000 5,500 Minority Interest 517 515 Partners' Capital 52,354 35,302 -------------- ------------- Total Liabilities and Partners' Capital $ 147,115 $ 137,537 ============== ============= (1) Includes $12.8 million accrual for settlement of litigation and the related receivable for reimbursement from insurers.
6 Genesis Energy, L.P. Summary Consolidated Statements of Cash Flows - Unaudited (in thousands) Year Ended Year Ended December 31, 2003 December 31, 2002 ----------------- ----------------- Net income $ 13,322 $ 5,092 Adjustments to reconcile net income to cash provided by operating activities: Depreciation, amortization and impairment 6,504 5,813 Amortization/write-off of credit facility issuance costs 1,031 736 Gains on asset disposals (13,264) (708) Other non-cash charges 268 3,555 Changes to components of working capital (3,168) (7,071) -------------- ------------- Net cash provided by operating activities 4,693 7,417 -------------- ------------- Additions to property and equipment (4,910) (4,211) Purchase of CO2 contracts and other (24,425) - Proceeds from sales of assets and other 22,341 2,248 -------------- ------------- Net cash (used in) provided by investing activities (6,994) (1,963) -------------- ------------- Net borrowings (repayments) of debt 1,500 (8,400) Issuance of units and minority interest contributions 5,013 - Distributions to partners (1,321) (1,760) Credit facility issuance fees (1,093) - -------------- ------------- Net cash used in financing activities 4,099 (10,160) -------------- ------------- Net increase (decrease) in cash and cash equivalents 1,798 (4,706) Cash and cash equivalents at beginning of period 1,071 5,777 -------------- ------------- Cash and cash equivalents at end of period $ 2,869 $ 1,071 ============== =============
7 Genesis Energy, L.P. Reconciliation of Unaudited GAAP "Net Cash Flow Provided by Operating Activities" to Non-GAAP "Available Cash before Reserves" for the Three Months and Year Ended December 31, 2003 (in thousands) Three Months Ended Year Ended December 31, 2003 December 31, 2003 ----------------- ----------------- Net Cash Flow Provided by Operating Activities $ (3,642) $ 4,693 Adjustments to reconcile Net Cash Flow Provided by Operating Activities to Available Cash before reserves: Maintenance capital expenditures (697) (4,176) Proceeds from sales of certain assets 819 1,055 Change in fair value of derivatives - (39) Amortization of credit facility issuance costs (128) (1,031) Net effect of changes in operating accounts not included in calculation of Available Cash before reserves 4,951 3,168 -------------- ------------- Available Cash before reserves $ 1,303 $ 3,670 ============== =============
Genesis believes that investors benefit from having access to the same financial measures being utilized by management. 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. # # # 8 -----END PRIVACY-ENHANCED MESSAGE-----