-----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, MAtQZmp4i7xHAAqiT1yAeQsKgPNMFG6U5GVoS04wpy7NOXN34m5OfDealLATtSHL Aes6s3I3eUrIE57wAdQafw== 0001022321-06-000057.txt : 20061103 0001022321-06-000057.hdr.sgml : 20061103 20061103151104 ACCESSION NUMBER: 0001022321-06-000057 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20061103 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20061103 DATE AS OF CHANGE: 20061103 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: 061186502 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 f8k110306.txt FORM 8-K DATED NOVEMBER 3, 2006 ================================================================================ 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): November 3, 2006 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 November 3, 2006 regarding its financial results for the quarter ended September 30, 2006, and held a webcast conference call discussing those results on November 3, 2006. 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, net cash flows from operating activities, as presented in accordance with accounting principles generally accepted in the placecountry-regionUnited 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. Available Cash before Reserves is a liquidity measure used by management to compare cash flows generated by us to the cash distribution paid to our limited partners and general partner. This is an important financial measure to the public unitholders since it is an indicator of our ability to provide a cash return on their investment. Specifically, this financial measure aids investors in determining whether or not we are generating cash flows at a level that can support a quarterly cash distribution to the partners. Lastly, Available Cash before Reserves (also referred to as distributable cash flow) is the quantitative standard used throughout the investment community with respect to publicly-traded partnerships. We define available cash as net income or loss plus: (1) depreciation and amortization expense; (2) cash proceeds from the sale of certain assets; (3) the addition of losses or subtraction of gains relating to the sale of assets; (4) payments under direct financing leases in excess of the amount recognized as income; (5) the addition of losses or subtraction of gains on derivative financial instruments; (6) available cash generated by equity method investments; (7) the subtraction of maintenance capital expenditures incurred to replace or enhance partially or fully depreciated assets so as to sustain the existing operating capacity or efficiency of our assets and extend their useful lives; and (8) the addition of losses or subtraction of gains relating to other non-cash amounts affecting net income for the period. 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 November 3, 2006. 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: November 3, 2006 By: /s/ ROSS A. BENAVIDES ----------------------------------------- Ross A. Benavides Chief Financial Officer EX-99 2 pr110306.txt PRESS RELEASE ISSUED NOVEMBER 3, 2006 FOR IMMEDIATE RELEASE Contact: Ross A. Benavides Chief Financial Officer (713) 860-2528 GENESIS ENERGY, L.P. REPORTS THIRD QUARTER RESULTS November 3, 2006 (Houston, TX) - Genesis Energy, L.P. (AMEX:GEL) announced today that net income for the third quarter of 2006 was $1.7 million, or $0.12 per unit. Net income for the quarter was reduced by approximately $1.3 million for costs related to the transition to a new senior management team. Without this charge, net income would have been $3.0 million, or $0.21 per unit, for the quarter. In the third quarter of 2005, we recorded a loss of $0.6 million, or $0.06 per unit. Net income for the nine months of 2006 was $7.7 million, or $0.55 per unit. Excluding the effects of the $1.3 million of transition costs, net income would have been $9.0 million, or $0.64 per unit. Net income was $2.9 million, or $0.31 per unit, for the nine months of 2005. Grant Sims, CEO said "We are very pleased with our results for both the third quarter and the nine month period. All segments reported improved performance from the prior year period. For the third quarter of 2006, we generated Available Cash before Reserves, a non-GAAP measure, of $4.1 million or $0.29 per unit, which was more than adequate to cover distributions to the holders of our common units and general partner interest of $2.8 million or $0.20 per unit. Without the transition costs, Available Cash before Reserves for the 2006 quarter would have been $5.4 million, or $0.38 per unit." Available Cash before Reserves is a non-GAAP financial measure that is defined and reconciled later in this press release to its most directly comparable GAAP financial measure, net cash provided by operating activities. Net cash provided by operating activities was $8.3 million for the third quarter of 2006. "For the nine month period, Available Cash before Reserves was $15.2 million, or $1.08 per unit. Without the transition costs such amounts would have been $16.5 million and $1.17, respectively." Net cash provided by operating activities was $6.7 million for the nine months ended September 30, 2006. "Given the performance of our existing business segments, we have the flexibility to now focus to a greater extent on increasing the long-term value of our partnership units. To further that strategy, we have recently received commitments from a syndicate of banks and are in the process of completing documentation to replace our existing credit facility with a new facility. This facility, with up to $500 million of ultimate availability, will position us to execute our plan to make significant accretive investments to grow the partnership," added Mr. Sims. In August, we hired three new senior officers: Grant E. Sims, former CEO of Leviathan Gas Pipeline Partners, L.P. was appointed as the new Chief Executive Officer and a member of the Board of Directors; Joseph A. Blount, Jr., former President and Chief Operating Officer of Unocal Midstream & Trade, was appointed as President and Chief Operating Officer; and Brad N. Graves, former Vice President of Enterprise Products Partners, L.P., was appointed as Executive Vice President of Business Development. This management team will be responsible for designing and implementing a growth-oriented strategy that will include acquisitions from third parties, development projects and, ultimately, acquisitions from (or lease arrangements with) Denbury. Financial Results The following table presents certain selected financial information by segment for the three month and nine month reporting periods for continuing operations:
Crude Oil Pipeline Industrial Gathering and Transportation Gases Marketing Total (in thousands) Three Months Ended September 30, 2006 ------------------------------------- Segment margin excluding depreciation and amortization (a) $ 3,458 $ 3,155 $ 1,999 $ 8,612 Total capital expenditures $ 216 $ 194 $ 34 $ 444 Maintenance capital expenditures $ 146 $ - $ 34 $ 180 Revenues: External customers $ 6,232 $ 4,262 $ 218,141 $ 228,635 Intersegment 916 - - 916 ----------- -------- ----------- --------- Total revenues of reportable segments $ 7,148 $ 4,262 $ 218,141 $ 229,551 =========== ======== =========== =========
Crude Oil Pipeline Industrial Gathering and Transportation Gases Marketing Total (in thousands) Three Months Ended September 30, 2005 ------------------------------------- Segment margin excluding depreciation and amortization (a) $ 1,885 $ 1,688 $ 1,053 $ 4,626 Total capital expenditures $ 555 $ - $ 38 $ 593 Maintenance capital expenditures $ 407 $ - $ 7 $ 414 Revenues: External customers $ 5,989 $ 2,523 $ 291,074 $ 299,586 Intersegment 991 - - 991 ---------- -------- ----------- --------- Total revenues of reportable segments $ 6,980 $ 2,523 $ 291,074 $ 300,577 ========== ======== =========== =========
Crude Oil Pipeline Industrial Gathering and Transportation Gases Marketing Total (in thousands) Nine Months Ended September 30, 2006 ------------------------------------ Segment margin excluding depreciation and amortization (a) $ 9,862 $ 8,808 $ 6,074 $ 24,744 Total capital expenditures $ 639 $ 5,744 $ 190 $ 6,573 Maintenance capital expenditures $ 370 $ - $ 190 $ 560 Revenues: External customers $ 20,158 $ 11,543 $ 691,414 $ 723,115 Intersegment 3,381 - - 3,381 --------- -------- ----------- ---------- Total revenues of reportable segments $ 23,539 $ 11,543 $ 691,414 $ 726,496 ========= ======== =========== ==========
Crude Oil Pipeline Industrial Gathering and Transportation Gases Marketing Total (in thousands) Nine Months Ended September 30, 2005 ------------------------------------ Segment margin excluding depreciation and amortization (a) $ 7,136 $ 5,222 $ 2,391 $ 14,749 Total capital expenditures $ 5,157 $ 13,418 $ 315 $ 18,890 Maintenance capital expenditures $ 1,070 $ - $ 55 $ 1,125 Revenues: External customers $ 18,579 $ 7,371 $ 785,774 $ 811,724 Intersegment 2,597 - - 2,597 -------- -------- ----------- --------- Total revenues of reportable segments $ 21,176 $ 7,371 $ 785,774 $ 814,321 ======== ======== =========== =========
(a) Segment margin was calculated as revenues less cost of sales and operating expenses, plus our share of the operating income of our investment in joint ventures. A reconciliation of segment margin to income from continuing operations is presented for periods presented in the tables at the end of this release. Quarterly Comparison Pipeline transportation segment margin from continuing operations was $3.5 million for the third quarter of 2006 as compared to $1.9 million for the 2005 period. Revenues from tariffs increased $0.5 million due to the combination of greater volumes and slightly higher rates. Higher crude oil prices resulted in greater revenues from the sale of crude oil from volumetric gains. Operating costs also declined $0.6 million between the two periods, as a result of completing most of the first cycle of pipeline integrity management program, or IMP, work by 2005. Segment margin from industrial gas activities in the 2006 third quarter was $3.2 million as compared to $1.7 million for 2005. The additional CO2 sales contracts acquired in the fourth quarter of 2005 provided most of this margin increase. Also contributing to the increase was greater earnings from our investments in joint ventures, which we made in the second quarters of 2006 and 2005. Segment margin from crude oil gathering and marketing activities was $2.0 million for the 2006 third quarter, an increase of $0.9 million from 2005 levels. The primary factor increasing segment margin between the two periods was a decrease in field operating costs of $0.7 million. Marketing margins also improved between the periods as we have focused on eliminating volumes providing insufficient contribution to our segment margin. General and administrative expenses increased by $1.3 million during the 2006 third quarter as compared to the 2005 period, principally due to transition costs incurred in connection with the change in our senior management team. Increased employee related costs were offset by a credit related to the accrual for our stock appreciation rights plan. Depreciation and amortization expense increased due to amortization of a greater amount of our CO2 assets for the increased volumes sold under our CO2 contracts. Interest costs were $0.3 million lower in the 2006 third quarter than the 2005 period, due to lower debt balances. Although market interest rates rose between the periods, our average outstanding borrowing during the quarter was $16.1 million less than in the 2005 quarter. Year-to-Date Comparison For the nine-month period, pipeline transportation segment margin increased in 2006 by $2.7 million. The sale of crude oil from volumetric gains provided $1.6 million greater revenues due to higher crude oil prices. Increased tariff revenues and net margin from gas sales totaling $0.7 million and a $0.4 million decrease in pipeline operating costs produced the remaining increase in segment margin. Tariff revenues improved due to increased throughput and higher tariffs. The first cycle of our IMP testing and remediation program was substantially completed during 2005, reducing maintenance costs in 2006. Our industrial gases activities provided improved segment margin of $8.8 million for the nine-month period. The additional CO2 industrial sales contracts acquired in 2005 provided most of the improvement. The 2006 period also included nine months rather than six months of results from the joint venture acquired on April 1, 2005. Crude oil gathering and marketing segment margin improved by $3.7 million to $6.1 million. This significant improvement resulted from lower field operating costs of $1.6 million and improved margins on transactions of $2.1 million. The majority of the decrease in field operating costs is attributable to a reduction in the size of our fleet, combined with a $0.4 million reserve recorded in the 2005 period for environmental remediation of a truck unload site. Marketing margins improved from eliminating less profitable volumes and increasing profitability on volumes retained. General and administrative expenses for the nine months in 2006 were $10.4 million, an increase of $3.9 million over 2005. $1.3 million of the increase resulted from transition costs for the senior management team change. In 2006, we adopted a new method of accounting for our stock appreciation rights plan, which resulted in expense of $0.9 million. In the 2005 period, under the previous method of accounting, we recorded a non-cash credit of $0.5 million due to a decrease in our unit price. The effect of this change in accounting for the plan was an increase in expense of $1.4 million between the two periods. The remaining increase in general and administrative expenses related to compensation, benefits costs and bonus accrual. We also recorded a cumulative effect adjustment of $30,000 of income for the adoption of the new accounting pronouncement for stock appreciation rights. The increase in our depreciation and amortization expenses resulted from amortization of our increased investment in CO2 industrial sales contracts and related assets in the fourth quarter of 2005. In the first nine months of 2005, we disposed of idle assets for net cash proceeds of $1.6 million, generating $0.8 million of gain. The assets sold included pipelines that had been idle in 2002 and 2003. $0.3 million of this gain was reflected as discontinued operations. Interest costs in the 2006 nine-month period were $0.8 million lower than the 2005 period, due to lower average outstanding debt balances. We made acquisitions in late 2004 and early 2005 that significantly increased our outstanding debt balance. In the fourth quarter of 2005, we issued new partnership units and used a portion of the proceeds to repay the debt. Consequently, we had lower outstanding borrowings under our revolving credit facility during the first nine months of 2006. Over the last five quarters, we have increased the distribution rate on our common units by a total of $0.05 per unit, or 33.3%. Distribution Distribution for Payment Date Amount per Unit Third Quarter 2006 November 2006 $ 0.20 Second Quarter 2006 August 2006 $ 0.19 First Quarter 2006 May 2006 $ 0.18 Fourth Quarter 2005 February 2006 $ 0.17 Third Quarter 2005 November 2005 $ 0.16 Second Quarter 2005 August 2005 $ 0.15 The third quarter 2006 distribution will be paid November 14, 2006 to unitholders of record on November 2, 2006. We generated Available Cash before Reserves (a non-GAAP measure) during the third quarter of 2006 of $4.1 million and net cash flow provided by operations was $8.3 million. (Please see the accompanying schedules for a reconciliation of Available Cash, a non-GAAP measure, to net cash flow utilized in operations, the comparative GAAP measure.) Available Cash before Reserves Several adjustments to net income are required to calculate Available Cash before Reserves. The calculation of Available Cash before Reserves is as follows (in thousands):
Three Months Ended Nine Months Ended September 30, 2006 September 30, 2006 Net income $ 1,695 $ 7,730 Depreciation and amortization expense 2,107 6,000 Cash from direct financing leases in excess of income recorded 133 394 Available cash generated by joint ventures in excess of earnings 288 988 Non-cash charge for incentive compensation plan and other non-cash items 12 605 Maintenance capital expenditures (180) (560) -------------- --------------- Available Cash before reserves $ 4,055 $ 15,157 ============== ===============
Available Cash before Reserves (a non-GAAP liquidity measure) has been reconciled to net cash flows from operating activities of $8.3 million and $6.7 million (the GAAP measure) for the three months and nine months ended September 30, 2006, respectively, in the financial tables below. Earnings Conference Call We will broadcast our Earnings Conference Call on Friday, November 3, 2006, at 10 a. m. Central time. This call can be accessed at www.genesiscrudeoil.com by choosing 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 or by calling 1-877-660-6853 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 an industrial gases 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 we believe that our expectations are based upon reasonable assumptions, we can give no assurance that our 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, our ability to meet our stated business goals and other risks noted from time to time in our 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 volume data)
Three Months Ended Three Months Ended September 30, 2006 September 30, 2005 ------------------ ------------------ Revenues $ 229,551 $ 300,577 Cost of sales 221,206 295,959 General & administrative expenses 4,539 3,210 Depreciation and amortization expense 2,107 1,601 Losses (gains) from disposals of surplus assets 11 (84) -------------- -------------- OPERATING INCOME (LOSS) 1,688 (109) Equity in earnings of investment in joint ventures 267 8 Interest, net (260) (540) -------------- ------------- Income (loss) from Continuing Operations before income taxes 1,695 (641) Income tax benefit - - -------------- ------------- Income (loss) from Continuing Operations 1,695 (641) Income from Discontinued Operations - 45 -------------- ------------- NET INCOME (LOSS) $ 1,695 $ (596) ============== ============= NET INCOME (LOSS) PER COMMON UNIT - BASIC AND DILUTED Continuing Operations $ 0.12 $ (0.06) Discontinued Operations - - -------------- ------------- Net income (loss) per Common Unit - Basic and Diluted $ 0.12 $ (0.06) ============== ============= Volume Data: Crude oil pipeline barrels per day (total) 62,610 60,164 Mississippi Pipeline System barrels per day 17,078 14,924 Jay Pipeline System barrels per day 14,785 11,704 Texas Pipeline System barrels per day 30,747 33,536 CO2 sales Mcf per day 82,072 51,386 Crude oil gathering wellhead barrels per day 31,626 37,213 Total gathering and marketing barrels per day 34,190 51,639 Units Data: Common units held by Public 12,765,000 8,625,000 Common units held by general partner 1,019,441 688,811 -------------- ------------- Total common units outstanding 13,784,441 9,313,811 ============== =============
Genesis Energy, L.P. Summary Consolidated Statements of Operations - Unaudited (in thousands except per unit amounts and volume data)
Nine Months Ended Nine Months Ended September 30, 2006 September 30, 2005 ------------------ ------------------ Revenues $ 726,496 $ 814,321 Cost of sales 702,671 799,832 General & administrative expenses 10,448 6,536 Depreciation and amortization expense 6,000 4,695 Gains from disposals of surplus assets (38) (482) -------------- ------------- OPERATING INCOME 7,415 3,740 Equity in earnings of investment in joint ventures 919 260 Interest, net (645) (1,401) -------------- ------------- Income from Continuing Operations before income taxes 7,689 2,599 Income tax benefit 11 - -------------- ------------- Income from Continuing Operations 7,700 2,599 Income from Discontinued Operations - 318 Income from cumulative effect adjustment from adoption of new accounting principle 30 - -------------- ------------- NET INCOME $ 7,730 $ 2,917 ============== ============= NET INCOME PER COMMON UNIT - BASIC AND DILUTED Continuing Operations $ 0.55 $ 0.28 Discontinued Operations - 0.03 Cumulative Effect Adjustment - - -------------- ------------- Net income per Common Unit - Basic and Diluted $ 0.55 $ 0.31 ============== ============= Volume Data: Crude oil pipeline barrels per day (total) 62,484 61,690 Mississippi Pipeline System barrels per day 16,828 15,568 Jay Pipeline System barrels per day 13,321 13,909 Texas Pipeline System barrels per day 32,335 32,213 CO2 sales Mcf per day 74,321 50,094 Crude oil gathering wellhead barrels per day 34,009 39,818 Total gathering and marketing barrels per day 38,243 55,211 Units Data: Common units held by Public 12,765,000 8,625,000 Common units held by general partner 1,019,441 688,811 -------------- ------------- Total common units outstanding 13,784,441 9,313,811 ============== =============
Genesis Energy, L.P. Summary Consolidated Balance Sheets - Unaudited (in thousands)
September 30, 2006 December 31, 2005 ------------------ ----------------- ASSETS Cash $ 2,384 $ 3,099 Accounts receivable 91,702 82,634 Inventories 4,435 498 Other current assets 3,772 4,218 -------------- ------------- Total Current Assets 102,293 90,449 Net property 31,803 33,769 CO2 contracts 34,415 37,648 Joint ventures and other investments 18,289 13,042 Other assets 6,182 6,869 -------------- ------------- Total Assets $ 192,982 $ 181,777 ============== ============= LIABILITIES AND PARTNERS' CAPITAL Accounts payable $ 89,908 $ 85,286 Accrued liabilities 7,719 7,325 -------------- ------------- Total Current Liabilities 97,627 92,611 Long-term debt and other liabilities 7,009 955 Minority interest 522 522 Partners' capital 87,824 87,689 -------------- ------------- Total Liabilities and Partners' Capital $ 192,982 $ 181,777 ============== =============
Genesis Energy, L.P. Summary Consolidated Statements of Cash Flows - Unaudited (in thousands)
Nine Months Ended Nine Months Ended September 30, 2006 September 30, 2005 ------------------ ------------------ Net income $ 7,730 $ 2,917 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 6,000 4,695 Amortization of credit facility issuance costs 279 279 Amortization of unearned income (495) (521) Cash received from direct financing leases 889 890 Distributions from joint ventures in excess of earnings from those joint ventures 232 - Gains on asset disposals (38) (800) Other non-cash items 911 (1,078) Changes to components of working capital (8,786) (2,139) -------------- ------------- Net cash provided by operating activities 6,722 4,243 -------------- ------------- Additions to property and equipment (830) (5,374) Investments in joint ventures and other investments (5,749) (13,418) Distributions from joint ventures that are a return of investment 352 53 Proceeds from sales of assets 67 1,581 Other, net (54) (209) -------------- ------------- Net cash used in investing activities (6,214) (17,367) -------------- ------------- Net borrowings of debt 6,000 17,300 Distributions to partners (7,595) (4,277) Other, net 372 172 -------------- ------------- Net cash (used in) provided by financing activities (1,223) 13,195 -------------- ------------- Net decrease in cash and cash equivalents (715) 71 Cash and cash equivalents at beginning of period 3,099 2,078 -------------- ------------- Cash and cash equivalents at end of period $ 2,384 $ 2,149 ============== =============
Genesis Energy, L.P. Reconciliations SEGMENT MARGIN EXCLUDING DEPRECIATION AND AMORTIZATION RECONCILIATION TO INCOME FROM CONTINUING OPERATIONS
Three Months Ended Three Months Ended September 30, 2006 September 30, 2005 ------------------ ------------------ (in thousands) Segment margin excluding depreciation and amortization $ 8,612 $ 4,626 General & administrative expenses (4,539) (3,210) Depreciation and amortization expense (2,107) (1,601) (Losses) gains from disposals of surplus assets (11) 84 Interest, net (260) (540) -------------- ------------- Income (loss) from continuing operations $ 1,695 $ (641) ============== =============
Nine Months Ended Nine Months Ended September 30, 2006 September 30, 2005 ------------------ ------------------ (in thousands) Segment margin excluding depreciation and amortization $ 24,744 $ 14,749 General & administrative expenses (10,448) (6,536) Depreciation and amortization expense (6,000) (4,695) Gains from disposals of surplus assets 38 482 Interest, net (645) (1,401) Income tax credit 11 - -------------- ------------- Income from continuing operations $ 7,700 $ 2,599 ============== =============
GAAP to Non-GAAP Financial Measure Reconciliation AVAILABLE CASH BEFORE RESERVES RECONCILIATION TO NET CASH FLOWS FROM OPERATING ACTIVITIES
Three Months Ended Nine Months Ended September 30, 2006 September 30, 2006 ------------------ ------------------ (in thousands) Net cash flows from operating activities (GAAP measure) $ 8,266 $ 6,722 Adjustments to reconcile net cash flow provided by operating activities to Available Cash before reserves: Maintenance capital expenditures (180) (560) Amortization of credit facility issuance costs (93) (279) Cash effects of stock appreciation rights plan (242) (271) Available Cash from joint ventures not included in operating cash flows 81 756 Unrealized gains on fair value hedges (588) (64) Proceeds from asset sales - 67 Net effect of changes in components of working capital (3,189) 8,786 ----------- ------------ Available Cash before reserves (non-GAAP measure) $ 4,055 $ 15,157 =========== ============
This press release and the accompanying schedules include a non-generally accepted accounting principle ("non-GAAP") financial measures of available cash. The accompanying schedule provides a reconciliation of this non-GAAP financial measure to its most directly comparable financial measure calculated in accordance with generally accepted accounting principles in the United States of America ("GAAP"). Our non-GAAP financial measure should not be considered as an alternative to GAAP measures of liquidity or financial performance. We believe that investors benefit from having access to the same financial measures being utilized by management, lenders, analysts and other market participants. Available cash. Available Cash before Reserves is a liquidity measure used by management to compare cash flows generated by us to the cash distribution paid to our limited partners and general partner. This is an important financial measure to the public unitholders since it is an indicator of our ability to provide a cash return on their investment. Specifically, this financial measure aids investors in determining whether or not we are generating cash flows at a level that can support a quarterly cash distribution to the partners. Lastly, Available Cash before Reserves (also referred to as distributable cash flow) is the quantitative standard used throughout the investment community with respect to publicly-traded partnerships. We define available cash as net income or loss plus: (1) depreciation and amortization expense; (2) cash proceeds from the sale of certain assets; (3) the addition of losses or subtraction of gains relating to the sale of assets; (4) payments under direct financing leases in excess of the amount recognized as income; (5) the addition of losses or subtraction of gains on derivative financial instruments; (6) available cash generated by equity method investments; (7) the subtraction of maintenance capital expenditures incurred to replace or enhance partially or fully depreciated assets so as to sustain the existing operating capacity or efficiency of our assets and extend their useful lives; and (8) the addition of losses or subtraction of gains relating to other non-cash amounts affecting net income for the period. # # # -----END PRIVACY-ENHANCED MESSAGE-----