-----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, RbmwKdHpD+JrbMkhQrVQEBFpXI/ZdnEkT5tLDWgGdIay/8YQwlUSwKPH8KCntyd9 FxFDjuQ57zojn7J6uKYGvg== 0001022321-05-000040.txt : 20050804 0001022321-05-000040.hdr.sgml : 20050804 20050804091309 ACCESSION NUMBER: 0001022321-05-000040 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050804 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050804 DATE AS OF CHANGE: 20050804 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: 1205 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12295 FILM NUMBER: 05997772 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 f8k080405.txt FORM 8-K DATED AUGUST 4, 2005 ================================================================================ 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): August 4, 2005 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) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: ___ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) ___ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240-14a-12) ___ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b)) ___ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c) ================================================================================ Item 2.02. Results of Operations and Financial Condition Genesis Energy, L.P. ("GELP") issued a press release on August 4, 2005 regarding its financial results for the three and six months ended June 30, 2005, and will hold a webcast conference call discussing those results on August 4, 2005. 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. As provided in General Instruction B.2 to Form 8-K, the information furnished in this Item 2.02 and in Exhibit 99.1 hereto shall not be deemed "filed" for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing with the Securities and Exchange Commission, except as shall be expressly provided by specific reference in such filing. Use of Non-GAAP Financial Measures Our earnings press release includes the non-generally accepted accounting principle ("non-GAAP") financial measure of Available Cash before Reserves. The press release provides a reconciliation of this non-GAAP financial measure to its most directly comparable financial measure calculation as presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Our non-GAAP measure should not be considered as an alternative to GAAP measure such as net income, operating income or cash flow from operating activities or any other GAAP measure of liquidity or financial performance. Available Cash before Reserves. The non-GAAP financial measure of Available Cash before Reserves 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 before Reserves. Maintenance capital expenditures are capital expenditures (as defined by GAAP) to replace or to enhance partially or fully depreciated assets in order to sustain the existing operating capacity or efficiency of our assets and to extend their useful lives. We believe that investors benefit from having access to the same financial measures being utilized by management. Available Cash before Reserves is a 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 before Reserves (also referred to as distributable cash flow) is a quantitative standard used throughout the investment community with respect to publicly-traded partnerships. Several adjustments to net income are required to calculate Available Cash before Reserves. 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. Item 9.01. Financial Statements and Exhibits (a) Financial statements of businesses acquired. Not applicable (b) Pro forma financial information. Not applicable. (c) Exhibits The following materials are filed as exhibits to this Current Report on Form 8-K. Exhibit. *99.1. Genesis Energy, L.P. press release, dated August 4, 2005. 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: August 4, 2005 By: /s/ ROSS A. BENAVIDES --------------------------- Ross A. Benavides Chief Financial Officer EX-99 2 pr080405.txt PRESS RELEASE DATED AUGUST 4, 2005 FOR IMMEDIATE RELEASE Contact: Ross A. Benavides Chief Financial Officer (713) 860-2528 GENESIS ENERGY, L.P. REPORTS SECOND QUARTER RESULTS August 4, 2005 - Genesis Energy, L.P. (AMEX:GEL) announced today that its net income for the second quarter of 2005 was $743,000, or $0.08 per unit. Net income for the six months of 2005 was $3,513,000, or $0.37 per unit. Mark Gorman, President and CEO said "Results for the second quarter of 2005 benefited from the increased segment margin resulting from construction projects and acquisitions placed in service in late 2004 and during the first quarter of 2005. We generated Available Cash before Reserves, a non-GAAP measure, of $2.7 million or $0.28 per unit, which exceeded our distribution of $1.4 million or $0.15 per unit for the second quarter of 2005. "During the second quarter of 2005, we acquired a 50% interest in a syngas manufacturing facility, which produces syngas (a combination of carbon monoxide and hydrogen) and high pressure steam for a processing fee. This acquisition added $313,000 to Available Cash before Reserves." Financial Results Genesis generated income for the second quarter of 2005 of $0.7 million, or $0.08 per unit, compared to second quarter 2004 earnings of $1.1 million, or $0.12 per unit. Genesis generated income from continuing operations of $0.7 million, or $0.08 per unit, for the 2005 period and income from continuing operations of $1.2 million, or $0.12, per unit for the 2004 quarter. Loss from discontinued operations for the 2005 period was $9,000. Loss from discontinued operations for the comparable period of 2004 was $0.1 million. For the six month period, Genesis generated net income for 2005 of $3.5 million, or $0.37 per unit, with $3.2 million of income, or $0.34 per unit, from continuing operations and net income of $0.3 million, or $0.03 per unit from discontinued operations. In the comparable period in 2004, income was $0.1 million, or $0.01 per unit, with $0.4 million, or $0.04 per unit from continuing operations and a loss of $0.3 million, or $0.03 per unit, from discontinued operations. The following table presents selected financial information by segment for the three month and six month reporting periods for continuing operations:
Crude Oil Gathering and Pipeline CO2 Marketing Transportation Sales Total ------------ -------------- -------- -------- (in thousands) Three Months Ended June 30, 2005 Revenues: External customers $247,692 $ 5,957 $ 2,568 $256,217 Intersegment - 927 - 927 -------- --------- -------- -------- Total revenues of reportable segments $247,692 $ 6,884 $ 2,568 $257,144 ======== ========= ======== ======== Segment margin excluding depreciation and amortization (a) $ 450 $ 2,808 $ 1,757 $ 5,015 Capital expenditures $ 254 $ 926 $ - $ 1,180 Maintenance capital expenditures $ 25 $ 175 $ - $ 200 Three Months Ended June 30, 2004 Revenues: External customers $225,872 $ 3,206 $ 2,149 $231,227 Intersegment - 880 - 880 -------- -------- -------- -------- Total revenues of reportable segments $225,872 $ 4,086 $ 2,149 $232,107 ======== ======== ======== ======== Segment margin excluding depreciation and amortization (a) $ 1,944 $ 1,657 $ 1,461 $ 5,062 Capital expenditures $ 24 $ 1,055 $ - $ 1,079 Maintenance capital expenditures $ 24 $ 231 $ - $ 255 Six Months Ended June 30, 2005 Revenues: External customers $494,700 $ 12,590 $ 4,848 $512,138 Intersegment - 1,606 - 1,606 -------- -------- -------- -------- Total revenues of reportable segments $494,700 $ 14,196 $ 4,848 $513,744 ======== ======== ======== ======== Segment margin excluding depreciation and amortization (a) $ 1,338 $ 5,251 $ 3,282 $ 9,871 Capital expenditures $ 276 $ 4,602 $ - $ 4,878 Maintenance capital expenditures $ 47 $ 664 $ - $ 711 Six Months Ended June 30, 2004 Revenues: External customers $418,868 $ 6,469 $ 3,980 $429,317 Intersegment - 1,702 - 1,702 -------- -------- -------- -------- Total revenues of reportable segments $418,868 $ 8,171 $ 3,980 $431,019 ======== ======== ======== ======== Segment margin excluding depreciation and amortization (a) $ 2,950 $ 3,510 $ 2,701 $ 9,161 Capital expenditures $ 75 $ 1,404 $ - $ 1,479 Maintenance capital expenditures $ 75 $ 335 $ - $ 410
(a) Segment margin was calculated as revenues less cost of sales and operating expenses. A reconciliation of segment margin 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 $0.5 million for the 2005 second quarter, a decrease of $1.5 million from the 2004 period. The primary factor decreasing segment margin between the two periods was increased field operating costs, including a $0.4 million accrual for our share of the expected costs for the environmental remediation of a site we no longer operate. Also contributing to the higher field costs were increases in fuel costs and personnel costs. The addition of five tractors and trailers to the fleet during the third quarter of 2004 increased vehicle lease costs. A reduction in volumes of crude oil purchased and fluctuations in margins on purchases of crude oil also contributed to the reduction in segment margin. For the six month periods, segment margin from crude oil gathering and marketing decreased $1.6 million in 2005 as compared to the prior period. The reduced segment margin in the first half of 2005 was due primarily to an increase in field costs of $1.8 million. The same factors that increased field costs in the three-month period were responsible for the increase for the six-month period. These increased costs were offset slightly by credit cost reductions and increased margins from purchasing and transporting the crude oil. Pipeline transportation segment margin from continuing operations was $2.8 million for the second quarter of 2005, as compared to $1.7 million for the 2004 period. Higher crude oil prices resulted in greater revenues from the sale of crude oil from volumetric gains. Additionally, the 2005 quarter included segment margin from the CO2 pipeline segment constructed in 2004 and from natural gas gathering pipelines acquired during the first quarter of 2005. Finally, changes to tariffs in Mississippi combined with increased volumes on that system increased segment margin more than offsetting volume and tariff reductions on the Texas System. Segment margin from our crude oil pipeline operations increased $1.7 million between the six month periods for the same reasons noted above for the second quarter of 2005. Segment margin from CO2 sales activities in the 2005 three and six month periods was $1.8 million and $3.3 million, respectively, as compared to $1.5 million and $2.7 million for the three and six month periods in 2004, respectively. The additional volumetric production payment acquired in the third quarter of 2004 provided most of this margin increase. General and administrative expenses increased by $0.4 million during the 2005 second quarter as compared to the 2004 period. During the 2004 quarter, Genesis recorded a $0.5 million credit to account for its employee stock appreciation rights program that was implemented in 2003. This credit resulted from a decrease in Genesis' unit price. In the second quarter of 2005, the unit price increased slightly, resulting in a small charge. Other general and administrative expenses decreased by $0.1 million. General and administrative expenses decreased by $1.9 million during the 2005 six-month period as compared to the 2004 period principally due to the accrual related to the stock appreciation rights plan. In the 2004 period our unit market price increased, requiring us to record a charge of $0.6 million. In 2005, the decrease in our unit price resulted in a credit to general and administrative expenses of $1.3 million. In the first half of 2005, we disposed of idle assets for $1.3 million, generating $0.7 million of gain. The assets sold included pipelines that had been idle in 2002 and 2003. $0.3 million of this gain is reflected as discontinued operations. On April 1, 2005, we acquired a 50% interest in T&P Syngas. Our equity in the earnings of T&P Syngas for the second quarter of 2005, net of the amortization of our purchase price over our share of the equity of T&P Syngas, was $0.3 million for the second quarter. Interest costs were $0.4 million more in the 2005 six month period due to higher debt balances from borrowings to make acquisitions. Additionally market interest rates were higher in 2005. Genesis paid a distribution of $0.15 per unit for the first quarter of 2005 in May 2005, and will pay a distribution of $0.15 per unit for the second quarter of 2005 in August 2005. Genesis generated Available Cash before reserves (a non-GAAP measure) of $2.7 million during the second quarter of 2005 and $5.9 million during the first six months of 2005. (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 June 30, 2005 is as follows (in thousands): Net income $ 743 Depreciation and amortization expense 1,568 Cash in excess of gain on asset sales 23 Cash from direct financing leases in excess of income recorded 124 Cash distribution for the second quarter of 2005 from T&P Syngas 313 Non-cash credit for incentive compensation plan and other non-cash items 126 Maintenance capital expenditures (200) ------------- Available Cash before reserves $ 2,697 ============= Available Cash (a non-GAAP liquidity measure) has been reconciled to cash flow from operating activities (the GAAP measure) for the three and six months ended June 30, 2005 in the financial tables below. Outlook Genesis expects pipeline segment margin from continuing operations for 2005 to be approximately the same as in 2004. Increased costs for pipeline integrity testing and repairs are expected to offset increased revenues. Segment margin from the CO2 sales operation in 2005 is expected to be greater than the 2004 amount due to the acquisition of an additional volumetric production payment in September of 2004. Genesis expects gathering and marketing segment margins from continuing operations to be significantly less than the 2004 amounts due primarily to lower volumes and increased operating costs. We expect our investment in T&P Syngas to contribute to Available Cash before reserves during 2005. Genesis expects general and administrative expenses to be lower in 2005 than in 2004 primarily due to incurring the initial costs of complying with the Sarbanes Oxley Act during 2004. Genesis expects 2005 projected maintenance capital expenditures to be approximately twice as much as the amounts expended during 2004 due primarily to pipeline integrity management program expenditures on the Mississippi Pipeline System. Genesis' earnings are likely to be impacted in future periods from volatility in its unit price and the effect of that volatility on the accounting for the stock appreciation rights plan. This non-cash expense is not expected to have an adverse impact on the Partnership's ability to make or increase distributions to its Unitholders. Based on the foregoing, Genesis expects to be able to sustain its regular quarterly distribution of $0.15 per unit during 2005. Our ability to increase distributions during 2005 will depend in part on our success in developing and executing capital projects and making accretive acquisitions, the costs of repairs and improvements under of our integrity management program, and our ability to generate sustained improvements in the gathering and marketing segment. Earnings Conference Call Genesis Energy, L.P. will broadcast its Earnings Conference Call on Thursday, August 4, 2005, at 2:00 p.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 30 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 sales 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, managing operating costs, completion of capital projects on schedule and within budget, consummation of accretive acquisitions, capital spending, 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. We undertake no obligation to publicly update or revise any forward-looking statement. (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 June 30, 2005 June 30, 2004 ------------- ------------- Revenues $ 257,144 $ 232,107 Cost of sales 252,129 227,045 General & administrative expenses 2,468 2,022 Depreciation and amortization expense 1,568 1,627 Gains from disposals of surplus assets (27) (75) --------------- ------------- OPERATING INCOME 1,006 1,488 Equity in earnings of investment in T&P Syngas Supply Company 252 - Interest, net (506) (328) -------------- ------------- Income from continuing operations 752 1,160 Loss from discontinued operations (9) (61) -------------- -------------- NET INCOME $ 743 $ 1,099 ============== ============= NET INCOME PER COMMON UNIT - BASIC AND DILUTED Continuing operations $ 0.08 $ 0.12 Discontinued operations 0.00 0.00 -------------- ------------- Net Income Per Common Unit - Basic and Diluted $ 0.08 $ 0.12 ============== ============= Continuing Operations Volumes: Crude oil wellhead barrels per day 40,323 49,128 Total gathering and marketing barrels per day 55,722 65,164 Crude oil pipeline barrels per day 64,094 67,156 CO2 sales Mcf per day 51,049 45,480
Genesis Energy, L.P. Summary Consolidated Statements of Operations - Unaudited (in thousands except per unit amounts and volumes)
Six Months Ended Six Months Ended June 30, 2005 June 30, 2004 ------------- ------------- Revenues $ 513,744 $ 431,019 Cost of sales 503,873 421,858 General & administrative expenses 3,326 5,186 Depreciation and amortization expense 3,094 3,174 Gains from disposals of surplus assets (398) (75) --------------- ------------- OPERATING INCOME 3,849 876 Equity in earnings of investment in T&P Syngas Supply Company 252 - Interest, net (861) (498) -------------- ------------- Income from continuing operations 3,240 378 Income (loss) from discontinued operations 273 (284) -------------- -------------- NET INCOME $ 3,513 $ 94 ============== ============= NET INCOME (LOSS) PER COMMON UNIT - BASIC AND DILUTED Continuing operations $ 0.34 $ 0.04 Discontinued operations 0.03 (0.03) -------------- ------------- Net Income Per Common Unit - Basic and Diluted $ 0.37 $ 0.01 ============== ============= Continuing Operations Volumes: Crude oil wellhead barrels per day 41,142 48,787 Total gathering and marketing barrels per day 57,027 62,877 Crude oil pipeline barrels per day 62,466 67,869 CO2 sales Mcf per day 49,437 42,164
Genesis Energy, L.P. Summary Consolidated Balance Sheets - Unaudited (in thousands)
June 30, 2005 December 31, 2004 ------------- ----------------- ASSETS Cash $ 1,628 $ 2,078 Accounts receivable 90,231 69,321 Inventories 4,329 1,866 Other current assets 4,059 4,131 -------------- ------------- Total Current Assets 100,247 77,396 Net property 34,589 33,786 CO2 contracts 25,023 26,344 Investment in T&P Syngas Supply Company 13,757 - Other assets 7,500 5,628 -------------- ------------- Total Assets $ 181,116 $ 143,154 ============== ============= LIABILITIES AND PARTNERS' CAPITAL Accounts payable $ 92,056 $ 75,415 Accrued liabilities 8,050 6,523 -------------- ------------- Total Current Liabilities 100,106 81,938 Long-term debt and other liabilities 34,592 15,460 Minority interest 517 517 Partners' capital 45,901 45,239 -------------- ------------- Total Liabilities and Partners' Capital $ 181,116 $ 143,154 ============== =============
Genesis Energy, L.P. Summary Consolidated Statements of Cash Flows - Unaudited (in thousands)
Six Months Ended Six Months Ended June 30, 2005 June 30, 2004 ------------- ------------- Net income $ 3,513 $ 94 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 3,094 3,174 Amortization of credit facility issuance costs 187 194 Equity in earnings of investment in T&P Syngas Supply Company (252) - Amortization of unearned income (349) - Cash received from direct financing leases 593 - Change in fair value of derivatives (432) (18) Gains on asset disposals (671) (75) Other non-cash items (510) 592 Changes to components of working capital (6,028) 1,503 -------------- ------------- Net cash (used in) provided by operating activities (855) 5,464 -------------- ------------- Additions to property and equipment and other assets (17,899) (1,490) Proceeds from sales of assets 1,360 79 Other, net (53) - -------------- ------------- Net cash used in investing activities (16,592) (1,411) -------------- ------------- Net borrowings (repayments) of debt 19,100 (1,500) Distributions to partners (2,851) (2,851) Credit facility issuance fees - (839) Other, net 748 - -------------- ------------- Net cash provided by (used in) financing activities 16,997 (5,190) -------------- ------------- Net decrease in cash and cash equivalents (450) (1,137) Cash and cash equivalents at beginning of period 2,078 2,869 -------------- ------------- Cash and cash equivalents at end of period $ 1,628 $ 1,732 ============== =============
Genesis Energy, L.P. Reconciliations SEGMENT MARGIN EXCLUDING DEPRECIATION AND AMORTIZATION RECONCILIATION TO OPERATING INCOME FROM CONTINUING OPERATIONS
Three Months Ended Three Months Ended June 30, 2005 June 30, 2004 ------------- ------------- (in thousands) Segment margin excluding depreciation and amortization $ 5,015 $ 5,062 General & administrative expenses 2,468 2,022 Depreciation and amortization expense 1,568 1,627 Gains from disposals of surplus assets (27) (75) -------------- ------------- Operating income from continuing operations $ 1,006 $ 1,488 ============== =============
Six Months Ended Six Months Ended June 30, 2005 June 30, 2004 ------------- ------------- (in thousands) Segment margin excluding depreciation and amortization $ 9,871 $ 9,161 General & administrative expenses 3,326 5,186 Depreciation and amortization expense 3,094 3,174 Gains from disposals of surplus assets (398) (75) -------------- ------------- Operating income from continuing operations $ 3,849 $ 876 ============== =============
GAAP to Non-GAAP Financial Measure Reconciliation AVAILABLE CASH BEFORE RESERVES RECONCILIATION TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Three Months Ended Six Months Ended June 30, 2005 June 30, 2005 ------------- ------------- (in thousands) Net cash flow provided by operating activities (GAAP measure) $ (3,394) $ (855) Adjustments to reconcile net cash flow provided by operating activities to Available Cash before reserves: Maintenance capital expenditures (200) (711) Proceeds from asset sales 41 1,360 Amortization of credit facility issuance costs (94) (187) Cash effects of stock appreciation rights plan - (50) Cash distribution for second quarter 2005 from T&P Syngas 313 313 Net effect of changes in operating accounts not included in calculation of Available Cash before reserves 6,031 6,028 -------------- ------------- Available Cash before reserves (non-GAAP measure) $ 2,697 $ 5,898 ============== =============
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, plus the adjustments for the effects of derivative instruments. This measure is exclusive of depreciation and amortization, general and administrative expenses, and any gains or losses on asset disposals. It also excludes the effects of 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-----