EXHIBIT 99.1
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
GENESIS ENERGY, L.P.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, 2011 | December 31, 2010 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 4,155 | $ | 5,762 | ||||
Accounts receivable - trade, net | 268,090 | 171,550 | ||||||
Inventories | 35,559 | 55,428 | ||||||
Other | 20,991 | 19,798 | ||||||
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Total current assets | 328,795 | 252,538 | ||||||
FIXED ASSETS, at cost | 374,479 | 373,339 | ||||||
Less: Accumulated depreciation | (114,120 | ) | (108,283 | ) | ||||
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Net fixed assets | 260,359 | 265,056 | ||||||
NET INVESTMENT IN DIRECT FINANCING LEASES, net of unearned income | 167,225 | 168,438 | ||||||
EQUITY INVESTEES | 340,325 | 343,434 | ||||||
INTANGIBLE ASSETS, net of amortization | 115,394 | 120,175 | ||||||
GOODWILL | 325,046 | 325,046 | ||||||
OTHER ASSETS, net of amortization | 30,506 | 32,048 | ||||||
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TOTAL ASSETS | $ | 1,567,650 | $ | 1,506,735 | ||||
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LIABILITIES AND PARTNERS’ CAPITAL | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable - trade | $ | 217,336 | $ | 165,978 | ||||
Accrued liabilities | 39,869 | 40,736 | ||||||
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Total current liabilities | 257,205 | 206,714 | ||||||
SENIOR SECURED CREDIT FACILITIES | 389,500 | 360,000 | ||||||
SENIOR UNSECURED NOTES | 250,000 | 250,000 | ||||||
DEFERRED TAX LIABILITIES | 14,854 | 15,193 | ||||||
OTHER LONG-TERM LIABILITIES | 5,643 | 5,564 | ||||||
COMMITMENTS AND CONTINGENCIES (Note 12) | ||||||||
PARTNERS’ CAPITAL: | ||||||||
Common unitholders, 64,615 units issued and outstanding at March 31, 2011 and December 31, 2010, respectively | 650,448 | 669,264 | ||||||
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TOTAL LIABILITIES AND PARTNERS’ CAPITAL | $ | 1,567,650 | $ | 1,506,735 | ||||
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
-1-
GENESIS ENERGY, L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per unit amounts)
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
REVENUES: | ||||||||
Supply and logistics | $ | 627,797 | $ | 423,371 | ||||
Refinery services | 47,546 | 29,502 | ||||||
Pipeline transportation services | 14,455 | 13,658 | ||||||
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Total revenues | 689,798 | 466,531 | ||||||
COSTS AND EXPENSES: | ||||||||
Supply and logistics costs: | ||||||||
Product costs | 597,139 | 392,191 | ||||||
Operating costs | 24,225 | 23,866 | ||||||
Refinery services operating costs | 29,586 | 16,227 | ||||||
Pipeline transportation operating costs | 4,070 | 4,429 | ||||||
General and administrative | 8,054 | 6,294 | ||||||
Depreciation and amortization | 13,903 | 13,406 | ||||||
Net (gain) loss on disposal of surplus assets | (11 | ) | 80 | |||||
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Total costs and expenses | 676,966 | 456,493 | ||||||
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OPERATING INCOME | 12,832 | 10,038 | ||||||
Equity in earnings of equity investees | 3,197 | 182 | ||||||
Interest expense | (8,699 | ) | (3,204 | ) | ||||
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Income before income taxes | 7,330 | 7,016 | ||||||
Income tax expense | (300 | ) | (691 | ) | ||||
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NET INCOME | 7,030 | 6,325 | ||||||
Net loss attributable to noncontrolling interests | — | 560 | ||||||
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NET INCOME ATTRIBUTABLE TO GENESIS ENERGY, L.P. | $ | 7,030 | $ | 6,885 | ||||
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NET INCOME ATTRIBUTABLE TO GENESIS ENERGY, L.P. PER COMMON UNIT: | ||||||||
Basic and Diluted | $ | 0.11 | $ | 0.06 | ||||
WEIGHTED AVERAGE OUTSTANDING COMMON UNITS: | ||||||||
Basic and Diluted | 64,615 | 39,548 |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
-2-
GENESIS ENERGY, L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF COMPREHENSIVE INCOME
(In thousands)
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
Net income | $ | 7,030 | $ | 6,325 | ||||
Change in fair value of derivatives: | ||||||||
Current period reclassification to earnings | — | 280 | ||||||
Changes in derivative financial instruments - interest rate swaps | — | (204 | ) | |||||
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Comprehensive income | 7,030 | 6,401 | ||||||
Comprehensive loss attributable to noncontrolling interests | — | 522 | ||||||
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Comprehensive income attributable to Genesis Energy, L.P. | $ | 7,030 | $ | 6,923 | ||||
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
-3-
GENESIS ENERGY, L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL
(In thousands)
Partners’ Capital | ||||||||
Number of Common Units | Common Unitholders | |||||||
Partners’ capital, January 1, 2011 | 64,615 | $ | 669,264 | |||||
Net income | — | 7,030 | ||||||
Cash distributions | — | (25,846 | ) | |||||
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Partners’ capital, March 31, 2011 | 64,615 | $ | 650,448 | |||||
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Partners’ Capital | ||||||||||||||||||||||||
Number of Common Units | Common Unitholders | General Partner | Accumulated Other Comprehensive Loss | Non- Controlling Interests | Total Capital | |||||||||||||||||||
Partners’ capital, January 1, 2010 | 39,488 | $ | 585,554 | $ | 11,152 | $ | (829 | ) | $ | 23,056 | $ | 618,933 | ||||||||||||
Comprehensive income: | ||||||||||||||||||||||||
Net income | — | 2,814 | 4,071 | — | (560 | ) | 6,325 | |||||||||||||||||
Interest rate swap loss reclassified to interest expense | — | — | — | 138 | 142 | 280 | ||||||||||||||||||
Interest rate swap loss | — | — | — | (100 | ) | (104 | ) | (204 | ) | |||||||||||||||
Cash contributions | — | — | 37 | — | — | 37 | ||||||||||||||||||
Cash distributions | — | (14,251 | ) | (2,328 | ) | — | (2 | ) | (16,581 | ) | ||||||||||||||
Contribution for executive compensation | — | — | (1,977 | ) | — | — | (1,977 | ) | ||||||||||||||||
Unit based compensation expense | 98 | 20 | — | — | — | 20 | ||||||||||||||||||
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Partners’ capital, March 31, 2010 | 39,586 | $ | 574,137 | $ | 10,955 | $ | (791 | ) | $ | 22,532 | $ | 606,833 | ||||||||||||
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
-4-
GENESIS ENERGY, L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | 7,030 | $ | 6,325 | ||||
Adjustments to reconcile net income to net cash provided by operating activities - | ||||||||
Depreciation and amortization | 13,903 | 13,406 | ||||||
Amortization and write-off of credit facility issuance costs | 655 | 455 | ||||||
Amortization of unearned income and initial direct costs on direct financing leases | (4,349 | ) | (4,449 | ) | ||||
Payments received under direct financing leases | 5,462 | 5,464 | ||||||
Equity in earnings of investments in equity investees | (3,197 | ) | (182 | ) | ||||
Cash distributions of earnings of equity investees | 4,217 | 702 | ||||||
Non-cash effect of equity-based compensation plans | (135 | ) | 243 | |||||
Non-cash compensation credit | — | (1,977 | ) | |||||
Deferred and other tax liabilities | 145 | 186 | ||||||
Unrealized losses on derivative transactions | 6,460 | 1,113 | ||||||
Other, net | 426 | 164 | ||||||
Net changes in components of operating assets and liabilities (See Note 9) | (32,722 | ) | (8,160 | ) | ||||
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Net cash (used in) provided by operating activities | (2,105 | ) | 13,290 | |||||
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CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Payments to acquire fixed and intangible assets | (5,489 | ) | (2,299 | ) | ||||
Cash distributions received from equity investees - return of investment | 2,283 | — | ||||||
Investments in equity investees | (194 | ) | — | |||||
Other, net | (20 | ) | 268 | |||||
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Net cash used in investing activities | (3,420 | ) | (2,031 | ) | ||||
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CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Bank borrowings | 127,600 | 130,400 | ||||||
Bank repayments | (98,100 | ) | (118,900 | ) | ||||
General partner contributions | — | 37 | ||||||
Noncontrolling interests contributions, net of distributions | — | (2 | ) | |||||
Distributions to common unitholders | (25,846 | ) | (14,251 | ) | ||||
Distributions to general partner interest | — | (2,328 | ) | |||||
Other, net | 264 | 847 | ||||||
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Net cash provided by (used in) financing activities | 3,918 | (4,197 | ) | |||||
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Net (decrease) increase in cash and cash equivalents | (1,607 | ) | 7,062 | |||||
Cash and cash equivalents at beginning of period | 5,762 | 4,148 | ||||||
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Cash and cash equivalents at end of period | $ | 4,155 | $ | 11,210 | ||||
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
-5-
GENESIS ENERGY, L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Organization and Basis of Presentation and Consolidation
Organization
We are a growth-oriented master limited partnership focused on the midstream segment of the oil and gas industry in the Gulf Coast area of the United States. We conduct our operations through our operating subsidiaries and joint ventures. We manage our businesses through three divisions:
• | Pipeline transportation of crude oil and carbon dioxide (or CO2); |
• | Refinery services involving processing of high sulfur (or “sour”) gas streams for refineries to remove the sulfur, and sale of the related by-product, sodium hydrosulfide (or NaHS, commonly pronounced nash); |
• | Supply and logistics services, which includes terminaling, blending, storing, marketing, and transporting crude oil, petroleum products and CO2. |
In February 2010, new investors, together with members of our executive management team, acquired our general partner. At that time, our general partner owned all our 2% general partner interest and all of our incentive distribution rights, or IDRs. In respect of its general partner interest and IDRs, our general partner was entitled to over 50% of any increased distributions we would pay in respect of our outstanding equity.
On December 28, 2010, we permanently eliminated our IDRs and converted our 2% general partner interest into a non-economic interest, which we refer to as our IDR Restructuring. We issued Class A Units, Class B Units and Waiver Units to the former stakeholders of our general partner in exchange for the elimination of our IDRs. See additional information on our outstanding equity in Note 6.
Basis of Presentation and Consolidation
The accompanying Unaudited Condensed Consolidated Financial Statements include Genesis Energy, L.P. and its operating subsidiaries, Genesis Crude Oil, L.P. and Genesis NEJD Holdings, LLC, and their subsidiaries, and Genesis Energy, LLC, our general partner. The inclusion of Genesis Energy, LLC in our Consolidated Financial Statements was effective December 28, 2010 due to our IDR Restructuring.
Our results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the fiscal year. The condensed consolidated financial statements included herein have been prepared by us without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they reflect all adjustments (which consist solely of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the financial results for interim periods. Certain information and notes normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. However, we believe that the disclosures are adequate to make the information presented not misleading when read in conjunction with the information contained in the periodic reports we file with the SEC pursuant to the Securities Exchange Act of 1934, including the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2010.
Except per unit amounts, or as noted within the context of each footnote disclosure, the dollar amounts presented in the tabular data within these footnote disclosures are stated in thousands of dollars.
2. Inventories
The major components of inventories were as follows:
March 31, 2011 | December 31, 2010 | |||||||
Crude oil | $ | 6,609 | $ | 6,128 | ||||
Petroleum products | 16,831 | 38,588 | ||||||
Caustic soda | 6,792 | 6,309 | ||||||
NaHS | 5,323 | 4,387 | ||||||
Other | 4 | 16 | ||||||
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Total inventories | $ | 35,559 | $ | 55,428 | ||||
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-6-
GENESIS ENERGY, L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
At March 31, 2011 and December 31, 2010 market values of our inventories exceeded recorded costs.
3. Equity Investees
We are accounting for our 50% ownership in Cameron Highway Oil Pipeline Company (“Cameron Highway”) under the equity method of accounting.
The following table reflects summarized income statement information for Cameron Highway for only one period as we did not acquire our 50% equity interest in Cameron Highway until November 23, 2010.
Three Months Ended March 31, 2011 | ||||
Revenues | $ | 15,009 | ||
Operating Income | $ | 8,409 | ||
Net Income | $ | 8,419 |
4. Intangible Assets and Goodwill
Intangible Assets
The following table reflects the components of intangible assets being amortized as of:
March 31, 2011 | December 31, 2010 | |||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Carrying Value | Gross Carrying Amount | Accumulated Amortization | Carrying Value | |||||||||||||||||||
Refinery services customer relationships | $ | 94,654 | $ | 55,382 | $ | 39,272 | $ | 94,654 | $ | 53,139 | $ | 41,515 | ||||||||||||
Supply and logistics customer relationships | 35,430 | 20,882 | 14,548 | 35,430 | 19,981 | 15,449 | ||||||||||||||||||
Refinery services supplier relationships | 36,469 | 32,133 | 4,336 | 36,469 | 31,476 | 4,993 | ||||||||||||||||||
Refinery services licensing agreements | 38,678 | 16,709 | 21,969 | 38,678 | 15,786 | 22,892 | ||||||||||||||||||
Supply and logistics tradenames - Davison and Grifco | 18,888 | 9,442 | 9,446 | 18,888 | 7,530 | 11,358 | ||||||||||||||||||
Intangibles associated with supply and logistics lease | 13,260 | 1,736 | 11,524 | 13,260 | 1,618 | 11,642 | ||||||||||||||||||
Other | 16,169 | 1,870 | 14,299 | 13,776 | 1,450 | 12,326 | ||||||||||||||||||
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Total | $ | 253,548 | $ | 138,154 | $ | 115,394 | $ | 251,155 | $ | 130,980 | $ | 120,175 | ||||||||||||
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The following table reflects our estimated amortization expense for each of the five subsequent fiscal years:
Year Ended December 31, | Amortization Expense to be Recorded | |
Remainder of 2011 | $21,746 | |
2012 | $21,881 | |
2013 | $14,280 | |
2014 | $12,015 | |
2015 | $10,216 |
-7-
GENESIS ENERGY, L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In the first quarter of 2011, we adjusted the useful lives of our supply and logistics trade names. As a result of this change in the amortization period of our assets, operating income and net income attributable to us for the first quarter of 2011 decreased $1.4 million, or $0.02 per common unit. The impact of this change on net income for the remainder of 2011 and 2012 is expected to total $4.2 million and $2.3 million, respectively, and not be material in future periods. The table of estimated future amortization expense above reflects this change.
Goodwill
The carrying amount of goodwill by business segment at both March 31, 2011 and December 31, 2010 was $301.9 million to refinery services and $23.1 million to supply and logistics.
5. Debt
As of March 31, 2011, we had $389.5 million borrowed under our senior secured credit facility, with $46 million of that amount designated as a loan under the inventory sublimit. Additionally, we had $5 million in letters of credit outstanding. Due to the revolving nature of loans under our credit facility, additional borrowings and periodic repayments and re-borrowings may be made until the maturity date of June 30, 2015. The total amount available for borrowings at March 31, 2011 was $130.5 million under our credit facility.
We believe the amounts included in our balance sheet for debt outstanding under our senior secured credit facility approximate fair value as interest rates reflect current market rates. At March 31, 2011, $250 million of senior unsecured notes were outstanding, which had a fair value of approximately $251.9 million.
We were in compliance with the financial covenants contained in our credit facility and indenture as of March 31, 2011.
6. Partners’ Capital, Distributions and Net Income Per Common Unit
Partners’ Capital
At March 31, 2011 and December 31, 2010, our outstanding equity consisted of 64,575,065 Class A Units and 39,997 Class B Units. Additionally 6,949,004 Waiver Units were outstanding.
Distributions
We paid or will pay the following distributions in 2010 and 2011:
Distribution For | Date Paid | Per Unit Amount | Limited Partner Interests Amount | General Partner Interest Amount | General Partner Incentive Distribution Amount | Total Amount | ||||||||||||||||
Fourth quarter 2009 | February 2010 | $ | 0.3600 | $ | 14,251 | $ | 291 | $ | 2,037 | $ | 16,579 | |||||||||||
First quarter 2010 | May 2010 | $ | 0.3675 | $ | 14,548 | $ | 297 | $ | 2,339 | $ | 17,184 | |||||||||||
Second quarter 2010 | August 2010 | $ | 0.3750 | $ | 14,845 | $ | 303 | $ | 2,642 | $ | 17,790 | |||||||||||
Third quarter 2010 | November 2010 | $ | 0.3875 | $ | 15,339 | $ | 313 | $ | 3,147 | $ | 18,799 | |||||||||||
Fourth quarter 2010 | February 2011 | $ | 0.4000 | $ | 25,846 | $ | — | $ | — | $ | 25,846 | |||||||||||
First quarter 2011 | May 2011(1) | $ | 0.4075 | $ | 26,331 | $ | — | $ | — | $ | 26,331 |
(1) | This distribution will be paid on May 13, 2011 to unitholders of record as of May 3, 2011. |
-8-
GENESIS ENERGY, L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Net Income Per Common Unit
The following table sets forth the computation of basic and diluted net income per common unit.
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
Numerators for basic and diluted net income per common unit: | ||||||||
Income attributable to Genesis Energy, L.P. | $ | 7,030 | $ | 6,885 | ||||
Less: General partner’s incentive distribution to be paid for the period | — | (2,339 | ) | |||||
Less: Credit for Class B Awards | — | (1,977 | ) | |||||
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Subtotal | 7,030 | 2,569 | ||||||
Less: General partner 2% ownership | — | (51 | ) | |||||
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Income available for common unitholders | $ | 7,030 | $ | 2,518 | ||||
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Denominator for basic and diluted per common unit: | 64,615 | 39,548 | ||||||
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Basic and diluted net income per common unit | $ | 0.11 | $ | 0.06 | ||||
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7. Business Segment Information
We define Segment Margin as revenues less product costs, operating expenses (excluding non-cash charges, such as depreciation and amortization), and segment general and administrative expenses, plus our equity in distributable cash generated by our equity investees. Our segment margin definition also excludes the non-cash effects of our stock appreciation rights compensation plan, and includes the non-income portion of payments received under direct financing leases. Our chief operating decision maker (our Chief Executive Officer) evaluates segment performance based on a variety of measures including Segment Margin, segment volumes where relevant and maintenance capital investment.
In the first quarter of 2011, we reorganized our operating segments as a result of a change in the way our Chief Executive Officer evaluates the performance of operations, develops strategy and allocates capital resources. The results of our CO2 marketing activities and processing of syngas through a joint venture, formerly reported in the Industrial Gases Segment, are now included in our Supply and Logistics Segment. The change in operating segments had no impact on our reportable units for goodwill purposes. The historical segment disclosures have been recast to be consistent with the current presentation. This recast also included combining revenues and costs and expenses for our industrial gases activities shown separately in our Unaudited Condensed Consolidated Statements of Operations in the 2010 period with revenues and costs and expenses for our supply and logistics activities.
-9-
GENESIS ENERGY, L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Pipeline Transportation | Refinery Services | Supply & Logistics | Total | |||||||||||||
Three Months Ended March 31, 2011 | ||||||||||||||||
Segment margin(a) | $ | 17,682 | $ | 17,948 | $ | 13,525 | $ | 49,155 | ||||||||
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Maintenance capital expenditures | $ | 187 | $ | 207 | $ | 385 | $ | 779 | ||||||||
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Revenues: | ||||||||||||||||
External customers | $ | 12,593 | $ | 49,583 | $ | 627,622 | $ | 689,798 | ||||||||
Intersegment(b) | 1,862 | (2,037 | ) | 175 | — | |||||||||||
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Total revenues of reportable segments | $ | 14,455 | $ | 47,546 | $ | 627,797 | $ | 689,798 | ||||||||
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Three Months Ended March 31, 2010 | ||||||||||||||||
Segment margin(a) | $ | 10,399 | $ | 13,260 | $ | 7,006 | $ | 30,665 | ||||||||
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Maintenance capital expenditures | $ | 56 | $ | 459 | $ | 110 | $ | 625 | ||||||||
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Revenues: | ||||||||||||||||
External customers | $ | 11,412 | $ | 31,370 | $ | 423,749 | $ | 466,531 | ||||||||
Intersegment(b) | 2,246 | (1,868 | ) | (378 | ) | — | ||||||||||
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Total revenues of reportable segments | $ | 13,658 | $ | 29,502 | $ | 423,371 | $ | 466,531 | ||||||||
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a) | A reconciliation of Segment Margin to income before income taxes for the periods presented is as follows: |
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
Segment margin | $ | 49,155 | $ | 30,665 | ||||
Corporate general and administrative expenses | (7,384 | ) | (5,430 | ) | ||||
Depreciation and amortization | (13,903 | ) | (13,406 | ) | ||||
Net gain (loss) on disposal of surplus assets | 11 | (80 | ) | |||||
Interest expense | (8,699 | ) | (3,204 | ) | ||||
Non-cash expenses not included in segment margin | (7,435 | ) | (224 | ) | ||||
Other items excluded from income affecting segment margin | (4,415 | ) | (1,305 | ) | ||||
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Income before income taxes | $ | 7,330 | $ | 7,016 | ||||
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b) | Intersegment sales were conducted on an arm’s length basis. |
8. Transactions with Related Parties
Sales, purchases and other transactions with affiliated companies, in the opinion of management, are conducted under terms no more or less favorable than then-existing market conditions. Affiliates of Denbury Resources, Inc.
-10-
GENESIS ENERGY, L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
sold its interests in our general partner on February 5, 2010. Transactions with Denbury are included in the table below as related party transactions through February 5, 2010.
The transactions with related parties were as follows:
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
Petroleum products sales to an affiliate of the Robertson Group | $ | 9,721 | $ | — | ||||
Marine operating fuel and expenses provided by an affiliate of the Robertson Group | 1,040 | — | ||||||
Sales of CO2 to Sandhill | 543 | 536 | ||||||
Petroleum products sales to Davison family businesses | 242 | 215 | ||||||
Operations, general and administrative services provided by our general partner(1) | — | 11,305 | ||||||
Truck transportation services provided to Denbury | — | 182 | ||||||
Pipeline transportation services provided to Denbury | — | 1,364 | ||||||
Payments received under direct financing leases from Denbury | — | 5,464 | ||||||
Pipeline transportation income portion of direct financing lease fees from Denbury | — | 1,502 | ||||||
Pipeline monitoring services provided to Denbury | — | 10 | ||||||
CO2 transportation services provided by Denbury | — | 373 |
(1) | Our general partner became a wholly-owned subsidiary in December 2010. |
Amounts due to and from Related Parties
At March 31, 2011 and December 31, 2010, an affiliate of the Robertson Group owed us $2.9 million and $1.4 million, respectively, for petroleum products purchases, and we owed the affiliate $0.4 million and $0.2 million, respectively, for marine-related costs. Sandhill owed us $0.2 million for purchases of CO2 at March 31, 2011 and December 31, 2010.
9. Supplemental Cash Flow Information
The following table provides information regarding the net changes in components of operating assets and liabilities.
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
Decrease (increase) in: | ||||||||
Accounts receivable | $ | (96,899 | ) | $ | 5,521 | |||
Inventories | 20,211 | (9,502 | ) | |||||
Other current assets | (7,890 | ) | (2,609 | ) | ||||
Increase (decrease) in: | ||||||||
Accounts payable | 51,249 | 1,462 | ||||||
Accrued liabilities | 607 | (3,032 | ) | |||||
|
|
|
| |||||
Net changes in components of operating assets and liabilities | $ | (32,722 | ) | $ | (8,160 | ) | ||
|
|
|
|
Payments of interest and commitment fees were $3.1 million and $2.7 million for the three months ended March 31, 2011 and 2010, respectively.
-11-
GENESIS ENERGY, L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
At March 31, 2011, we had incurred liabilities for fixed asset and intangible asset additions totaling $0.6 million that had not been paid at the end of the first quarter, and, therefore, are not included in the caption “Payments to acquire fixed and intangible assets” under investing activities on the Unaudited Consolidated Statements of Cash Flows. At March 31, 2010, we had incurred $1.3 million of such liabilities that had not been paid at that date and are not included in “Payments to acquire fixed and intangible assets” and “Other, net” under investing activities.
10. Derivatives
Commodity Derivatives
At March 31, 2011, we had the following outstanding derivative commodity futures, forwards and options contracts that were entered into to hedge inventory or fixed price purchase commitments:
Sell (Short) Contracts | Buy (Long) Contracts | |||||||
Designated as hedges under accounting rules: | ||||||||
Crude oil futures: | ||||||||
Contract volumes (1,000 bbls) | 19 | — | ||||||
Weighted average contract price per bbl | $ | 91.96 | $ | — | ||||
Not qualifying or not designated as hedges under accounting rules: | ||||||||
Crude oil futures: | ||||||||
Contract volumes (1,000 bbls) | 116 | 99 | ||||||
Weighted average contract price per bbl | $ | 99.23 | $ | 105.38 | ||||
Heating oil futures: | ||||||||
Contract volumes (1,000 bbls) | 181 | — | ||||||
Weighted average contract price per gal | $ | 2.92 | $ | — | ||||
RBOB gasoline futures: | ||||||||
Contract volumes (1,000 bbls) | 8 | — | ||||||
Weighted average contract price per gal | $ | 3.05 | $ | — | ||||
#6 Fuel oil futures: | ||||||||
Contract volumes (1,000 bbls) | 394 | 45 | ||||||
Weighted average contract price per bbl | $ | 86.97 | $ | 96.07 | ||||
Crude oil forwards: | ||||||||
Contract volumes (1,000 bbls) | 122 | 122 | ||||||
Weighted average contract price per bbl | $ | 110.37 | $ | 118.79 | ||||
Crude oil written calls: | ||||||||
Contract volumes (1,000 bbls) | 235 | — | ||||||
Weighted average premium received | $ | 3.69 | $ | — |
Financial Statement Impacts
The following tables reflected the estimated fair value gain (loss) position of our hedge derivatives and related inventory impact for qualifying hedges at March 31, 2011 and December 31, 2010:
-12-
GENESIS ENERGY, L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Fair Value of Derivative Assets and Liabilities
Asset Derivatives | ||||||||||
Unaudited Consolidated Balance Sheets Location | ||||||||||
Fair Value | ||||||||||
March 31, 2011 | December 31, 2010 | |||||||||
Commodity derivatives - futures and call options: | ||||||||||
Hedges designated under accounting guidance as fair value hedges | Other Current Assets | $ | 4 | $ | 14 | |||||
Undesignated hedges | Other Current Assets | 214 | 493 | |||||||
|
|
|
| |||||||
Total asset derivatives | $ | 218 | $ | 507 | ||||||
|
|
|
|
Liability Derivatives | ||||||||||
Unaudited Consolidated Balance Sheets Location | ||||||||||
Fair Value | ||||||||||
March 31, 2011 | December 31, 2010 | |||||||||
Commodity derivatives - forwards futures and call options: | ||||||||||
Hedges designated under accounting guidance as fair value hedges | Other Current Assets | $ | (309 | ) (1) | $ | (191 | ) (1) | |||
Undesignated hedges | Other Current Assets | (8,678 | ) (1) | (2,283 | ) (1) | |||||
|
|
|
| |||||||
Total liability derivatives | (8,987 | ) | (2,474 | ) |
(1) | These derivative liabilities have been funded with margin deposits recorded in our Unaudited Consolidated Balance Sheets in Other Current Assets. |
` | Effect on Unaudited Consolidated Statements of Operations and Other Comprehensive Income | |||||||||||||||||||||||
Amount of Gain (Loss) Recognized in Income | ||||||||||||||||||||||||
Supply & Logistics Product Costs | Interest Expense Reclassified from AOCL | Other Comprehensive Loss Effective Portion | ||||||||||||||||||||||
Three Months Ended March 31, | Three Months Ended March 31, | Three Months Ended March 31, | ||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||
Commodity derivatives - forwards futures and call options: | ||||||||||||||||||||||||
Contracts designated as hedges under accounting guidance | $ | (261 | ) (1) | $ | 274 | (1) | $ | — | $ | — | $ | — | $ | — | ||||||||||
Contracts not considered hedges under accounting guidance | (18,253 | ) | (552 | ) | — | — | — | — | ||||||||||||||||
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| |||||||||||||
Total commodity derivatives | (18,514 | ) | (278 | ) | — | — | — | — | ||||||||||||||||
Interest rate swaps designated as cash flow hedges under accounting guidance | — | — | — | (280 | ) | — | (204 | ) | ||||||||||||||||
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|
|
|
|
|
|
|
| |||||||||||||
Total derivatives | $ | (18,514 | ) | $ | (278 | ) | $ | — | $ | (280 | ) | $ | — | $ | (204 | ) | ||||||||
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-13-
GENESIS ENERGY, L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) | Represents the amount of loss recognized in income for derivatives related to the fair value hedge of inventory. The amount excludes the gain on the hedged inventory under the fair value hedge of $0.6 million and $0.1 million for March 31, 2011 and March 31, 2010, respectively. |
11. Fair-Value Measurements
The following table sets forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2011. As required by fair value accounting guidance, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value requires judgment and may affect the placement of assets and liabilities within the fair value hierarchy levels.
Fair Value at March 31, 2011 | Fair Value at December 31, 2010 | |||||||||||||||||||||||
Recurring Fair Value Measures | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||
Commodity derivatives: | ||||||||||||||||||||||||
Assets | $ | 218 | $ | — | $ | — | $ | 507 | $ | — | $ | — | ||||||||||||
Liabilities | $ | (7,960 | ) | $ | (1,027 | ) | $ | — | $ | (2,474 | ) | $ | — | $ | — |
Level 1
Included in Level 1 of the fair value hierarchy as commodity derivative contracts are exchange-traded futures and exchange-traded option contracts. The fair value of these exchange-traded derivative contracts is based on unadjusted quoted prices in active markets and is, therefore, included in Level 1 of the fair value hierarchy.
Level 2
Level 2 fair values are based on pricing inputs other than quoted prices in active markets (as reflected in Level 1 fair values) and are either directly or indirectly observable as of the measurement date. Level 2 fair values include instruments that are valued using financial models or other appropriate valuation methodologies. Such financial models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, the time value of money, volatility factors, current market and contractual prices for the underlying instruments and other relevant economic measures. Substantially all of these assumptions are: (i) observable in the marketplace throughout the full term of the instrument; (ii) can be derived from observable data; or (iii) are validated by inputs other than quoted prices (e.g., interest rate and yield curves at commonly quoted intervals). Our Level 2 fair values consist of forward commodity derivative instruments. The fair values of these derivative instruments are based on observable price quotes for similar products and locations.
Level 3
At March 31, 2011, we had no Level 3 fair value measurements. Included within Level 3 of the fair value hierarchy at March 31, 2010 were our interest rate swaps. These swaps were settled in July 2010 in connection with the acquisition of the 51% of DG Marine we did not own and the termination of DG Marine’s credit facility.
The following table provides a reconciliation of changes in fair value of the beginning and ending balances for our derivatives measured at fair value using inputs classified as Level 3 in the fair value hierarchy:
-14-
GENESIS ENERGY, L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three Months Ended March 31, | ||||
2010 | ||||
Balance at beginning of period | (1,688 | ) | ||
Realized and unrealized gains (losses)-Reclassified into interest expense for settled contracts | 280 | |||
Included in other comprehensive income | (204 | ) | ||
|
| |||
Balance at end of period | $ | (1,612 | ) | |
|
| |||
Total amount of losses for the three months ended included in earnings attributable to the change in unrealized losses relating to liabilities still held at March 31, 2010 | $ | (21 | ) | |
|
|
See Note 10 for additional information on our derivative instruments.
We generally apply fair value techniques on a non-recurring basis associated with (1) valuing potential impairment loss related to goodwill, (2) valuing asset retirement obligations, and (3) valuing potential impairment loss related to long-lived assets.
12. Contingencies
We are subject to various environmental laws and regulations. Policies and procedures are in place to monitor compliance and to detect and address any material releases of crude oil from our pipelines or other facilities; however, no assurance can be made that such environmental releases may not substantially affect our business.
We are subject to lawsuits in the normal course of business, as well as examinations by tax and other regulatory authorities. We do not expect such matters presently pending to have a material adverse effect on our financial position, results of operations, or cash flows.
13. Condensed Consolidating Financial Information
The $250 million Senior Unsecured Notes co-issued by Genesis Energy, L.P. and Genesis Energy Finance Corporation are fully and unconditionally guaranteed jointly and severally by all of Genesis Energy, L.P.’s subsidiaries, except Genesis Free State Pipeline, LLC, Genesis NEJD Pipeline, LLC and certain other minor subsidiaries. Genesis NEJD Pipeline, LLC is 100% owned by Genesis Energy, L.P., the parent company. The remaining non-guarantor subsidiaries are owned by Genesis Crude Oil, L.P., a guarantor subsidiary. Genesis Energy Finance Corporation has no independent assets or operations. See Note 10 for additional information regarding our consolidated debt obligations.
As a result of the IDR Restructuring on December 28, 2010 (see Note 1), each subsidiary guarantor and the subsidiary co-issuer are 100% owned, directly or indirectly, by Genesis Energy, L.P.
The following is condensed consolidating financial information for Genesis Energy, L.P. and subsidiary guarantors:
-15-
GENESIS ENERGY, L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2011 | ||||||||||||||||||||||||
Genesis Energy, L.P. (Parent and Co-Issuer) | Genesis Energy Finance Corporation (Co-Issuer) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Genesis Energy, L.P. Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 3 | $ | — | $ | 3,768 | $ | 384 | $ | — | $ | 4,155 | ||||||||||||
Other current assets | 611,373 | — | 314,490 | 24,503 | (625,726 | ) | 324,640 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total current assets | 611,376 | — | 318,258 | 24,887 | (625,726 | ) | 328,795 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Fixed Assets, at cost | — | — | 298,970 | 75,509 | — | 374,479 | ||||||||||||||||||
Less: Accumulated depreciation | — | — | (106,657 | ) | (7,463 | ) | — | (114,120 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net fixed assets | — | — | 192,313 | 68,046 | — | 260,359 | ||||||||||||||||||
| �� |
|
|
|
|
|
|
|
|
|
| |||||||||||||
Goodwill | — | — | 325,046 | — | — | 325,046 | ||||||||||||||||||
Other assets, net | 14,040 | — | 304,076 | 165,581 | (170,572 | ) | 313,125 | |||||||||||||||||
Equity investees and other investments | — | — | 340,325 | — | — | 340,325 | ||||||||||||||||||
Investments in subsidiaries | 672,502 | — | 84,749 | — | (757,251 | ) | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total assets | $ | 1,297,918 | $ | — | $ | 1,564,767 | $ | 258,514 | $ | (1,553,549 | ) | $ | 1,567,650 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
LIABILITIES AND PARTNERS’ CAPITAL | ||||||||||||||||||||||||
Current liabilities | $ | 7,970 | $ | — | $ | 871,206 | $ | 3,290 | $ | (625,261 | ) | $ | 257,205 | |||||||||||
Senior secured credit facilities | 389,500 | — | — | — | — | 389,500 | ||||||||||||||||||
Senior unsecured notes | 250,000 | — | — | — | — | 250,000 | ||||||||||||||||||
Deferred tax liabilities | — | — | 14,854 | — | — | 14,854 | ||||||||||||||||||
Other liabilities | — | — | 5,643 | 170,381 | (170,381 | ) | 5,643 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total liabilities | 647,470 | — | 891,703 | 173,671 | (795,642 | ) | 917,202 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Partners’ capital | 650,448 | — | 673,064 | 84,843 | (757,907 | ) | 650,448 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total liabilities and partners’ capital | $ | 1,297,918 | $ | — | $ | 1,564,767 | $ | 258,514 | $ | (1,553,549 | ) | $ | 1,567,650 | |||||||||||
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-16-
GENESIS ENERGY, L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010 | ||||||||||||||||||||||||
Genesis Energy, L.P. (Parent and Co-Issuer) | Genesis Energy Finance Corporation (Co-Issuer) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Genesis Energy, L.P. Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 1 | $ | — | $ | 5,082 | $ | 679 | $ | — | $ | 5,762 | ||||||||||||
Other current assets | 584,967 | — | 245,240 | 20,620 | (604,051 | ) | 246,776 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total current assets | 584,968 | — | 250,322 | 21,299 | (604,051 | ) | 252,538 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Fixed Assets, at cost | — | — | 297,832 | 75,507 | — | 373,339 | ||||||||||||||||||
Less: Accumulated depreciation | — | — | (101,472 | ) | (6,811 | ) | — | (108,283 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net fixed assets | — | — | 196,360 | 68,696 | — | 265,056 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Goodwill | — | — | 325,046 | — | — | 325,046 | ||||||||||||||||||
Other assets, net | 14,695 | — | 310,808 | 166,616 | (171,458 | ) | 320,661 | |||||||||||||||||
Equity investees and other investments | — | — | 343,434 | — | — | 343,434 | ||||||||||||||||||
Investments in subsidiaries | 682,641 | — | 83,323 | — | (765,964 | ) | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total assets | $ | 1,282,304 | $ | — | $ | 1,509,293 | $ | 256,611 | $ | (1,541,473 | ) | $ | 1,506,735 | |||||||||||
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|
|
|
|
|
|
|
|
|
| |||||||||||||
LIABILITIES AND PARTNERS’ CAPITAL | ||||||||||||||||||||||||
Current liabilities | $ | 3,040 | $ | — | $ | 805,381 | $ | 2,172 | $ | (603,879 | ) | $ | 206,714 | |||||||||||
Senior secured credit facilities | 360,000 | — | — | — | — | 360,000 | ||||||||||||||||||
Senior unsecured notes | 250,000 | — | — | — | — | 250,000 | ||||||||||||||||||
Deferred tax liabilities | — | — | 15,193 | — | — | 15,193 | ||||||||||||||||||
Other liabilities | — | — | 5,564 | 171,266 | (171,266 | ) | 5,564 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total liabilities | 613,040 | — | 826,138 | 173,438 | (775,145 | ) | 837,471 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Partners’ capital | 669,264 | — | 683,155 | 83,173 | (766,328 | ) | 669,264 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total liabilities and partners’ capital | $ | 1,282,304 | $ | — | $ | 1,509,293 | $ | 256,611 | $ | (1,541,473 | ) | $ | 1,506,735 | |||||||||||
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|
-17-
GENESIS ENERGY, L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three Months Ended March 31, 2011 | ||||||||||||||||||||||||
Genesis Energy, L.P. (Parent and Co-Issuer) | Genesis Energy Finance Corporation (Co-Issuer) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Genesis Energy, L.P. Consolidated | |||||||||||||||||||
REVENUES: | ||||||||||||||||||||||||
Supply and logistics | $ | — | $ | — | $ | 627,797 | $ | — | $ | — | $ | 627,797 | ||||||||||||
Refinery services | — | — | 47,510 | 4,480 | (4,444 | ) | 47,546 | |||||||||||||||||
Pipeline transportation services | — | — | 7,921 | 6,534 | — | 14,455 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total revenues | — | — | 683,228 | 11,014 | (4,444 | ) | 689,798 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
COSTS AND EXPENSES: | ||||||||||||||||||||||||
Supply and logistics costs | — | — | 621,364 | — | — | 621,364 | ||||||||||||||||||
Refinery services operating costs | — | — | 29,518 | 4,220 | (4,152 | ) | 29,586 | |||||||||||||||||
Pipeline transportation operating costs | — | — | 3,909 | 161 | — | 4,070 | ||||||||||||||||||
General and administrative | — | — | 8,054 | — | — | 8,054 | ||||||||||||||||||
Depreciation and amortization | — | — | 13,254 | 649 | — | 13,903 | ||||||||||||||||||
Net loss on disposal of surplus assets | — | — | (11 | ) | — | — | (11 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total costs and expenses | — | — | 676,088 | 5,030 | (4,152 | ) | 676,966 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
OPERATING (LOSS) INCOME | — | — | 7,140 | 5,984 | (292 | ) | 12,832 | |||||||||||||||||
Equity in earnings of joint ventures | — | — | 3,197 | — | — | 3,197 | ||||||||||||||||||
Equity in earnings of subsidiaries | 15,708 | — | 1,716 | — | (17,424 | ) | — | |||||||||||||||||
Interest (expense) income | (8,678 | ) | — | 4,259 | (4,280 | ) | — | (8,699 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
(Loss) income before income taxes | 7,030 | — | 16,312 | 1,704 | (17,716 | ) | 7,330 | |||||||||||||||||
Income tax (expense) benefit | — | — | (264 | ) | (36 | ) | — | (300 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
NET (LOSS) INCOME | 7,030 | — | 16,048 | 1,668 | (17,716 | ) | 7,030 | |||||||||||||||||
Net loss attributable to noncontrolling interests | — | — | — | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
NET (LOSS) INCOME ATTRIBUTABLE TO GENESIS ENERGY, L.P. | $ | 7,030 | $ | — | $ | 16,048 | $ | 1,668 | $ | (17,716 | ) | $ | 7,030 | |||||||||||
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|
-18-
GENESIS ENERGY, L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three Months Ended March 31, 2010 | ||||||||||||||||||||||||
Genesis Energy, L.P. (Parent and Co-Issuer) | Genesis Energy Finance Corporation (Co-Issuer) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Genesis Energy, L.P. Consolidated | |||||||||||||||||||
REVENUES: | ||||||||||||||||||||||||
Supply and logistics | $ | — | $ | — | $ | 423,371 | $ | — | $ | — | $ | 423,371 | ||||||||||||
Refinery services | — | — | 29,179 | 2,353 | (2,030 | ) | 29,502 | |||||||||||||||||
Pipeline transportation services | — | — | 7,037 | 6,621 | — | 13,658 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total revenues | — | — | 459,587 | 8,974 | (2,030 | ) | 466,531 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
COSTS AND EXPENSES: | ||||||||||||||||||||||||
Supply and logistics costs | — | — | 416,057 | — | — | 416,057 | ||||||||||||||||||
Refinery services operating costs | — | — | 15,853 | 2,115 | (1,741 | ) | 16,227 | |||||||||||||||||
Pipeline transportation operating costs | — | — | 4,305 | 124 | — | 4,429 | ||||||||||||||||||
General and administrative | — | — | 6,294 | — | — | 6,294 | ||||||||||||||||||
Depreciation and amortization | — | — | 12,758 | 648 | — | 13,406 | ||||||||||||||||||
Net loss on disposal of surplus assets | — | — | 80 | — | — | 80 | ||||||||||||||||||
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Total costs and expenses | — | — | 455,347 | 2,887 | (1,741 | ) | 456,493 | |||||||||||||||||
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OPERATING (LOSS) INCOME | — | — | 4,240 | 6,087 | (289 | ) | 10,038 | |||||||||||||||||
Equity in earnings of joint ventures | — | — | 182 | — | — | 182 | ||||||||||||||||||
Equity in earnings of subsidiaries | 6,885 | — | 1,771 | — | (8,656 | ) | — | |||||||||||||||||
Interest (expense) income | — | — | 1,162 | (4,366 | ) | — | (3,204 | ) | ||||||||||||||||
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(Loss) income before income taxes | 6,885 | — | 7,355 | 1,721 | (8,945 | ) | 7,016 | |||||||||||||||||
Income tax (expense) benefit | — | — | (691 | ) | — | — | (691 | ) | ||||||||||||||||
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NET (LOSS) INCOME | 6,885 | — | 6,664 | 1,721 | (8,945 | ) | 6,325 | |||||||||||||||||
Net loss attributable to noncontrolling interests | — | — | 560 | — | — | 560 | ||||||||||||||||||
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NET (LOSS) INCOME ATTRIBUTABLE TO GENESIS ENERGY, L.P. | $ | 6,885 | $ | — | $ | 7,224 | $ | 1,721 | $ | (8,945 | ) | $ | 6,885 | |||||||||||
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-19-
GENESIS ENERGY, L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three Months Ended March 31, 2011 | ||||||||||||||||||||||||
Genesis Energy, L.P. (Parent and Co-Issuer) | Genesis Energy Finance Corporation (Co-Issuer) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Genesis Energy, L.P. Consolidated | |||||||||||||||||||
Net cash provided by operating activities | $ | (29,498 | ) | $ | — | $ | 26,801 | $ | 585 | $ | 7 | $ | (2,105 | ) | ||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||||||
Payments to acquire fixed and intangible assets | — | — | (5,489 | ) | — | — | (5,489 | ) | ||||||||||||||||
Distributions from joint ventures - return of investment | 25,846 | — | 2,283 | — | (25,846 | ) | 2,283 | |||||||||||||||||
Investments in joint ventures and other investments | — | — | (194 | ) | — | — | (194 | ) | ||||||||||||||||
Repayments on loan to non-guarantor subsidiary | — | — | 887 | — | (887 | ) | — | |||||||||||||||||
Other, net | — | — | (20 | ) | — | — | (20 | ) | ||||||||||||||||
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Net cash used in investing activities | 25,846 | — | (2,533 | ) | — | (26,733 | ) | (3,420 | ) | |||||||||||||||
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CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||||||
Bank borrowings | 127,600 | — | — | — | — | 127,600 | ||||||||||||||||||
Bank repayments | (98,100 | ) | — | — | — | — | (98,100 | ) | ||||||||||||||||
Credit facility and senior unsecured notes issuance fees | — | — | — | — | — | — | ||||||||||||||||||
Issuance of ownership interests to partners for cash | — | — | — | — | — | — | ||||||||||||||||||
Noncontrolling interests contributions, net of distributions | — | — | — | — | — | — | ||||||||||||||||||
Acquisition of noncontrolling interest in DG Marine | — | — | — | — | — | — | ||||||||||||||||||
Distributions to partners/owners | (25,846 | ) | — | (25,846 | ) | — | 25,846 | (25,846 | ) | |||||||||||||||
Other, net | — | — | 264 | (880 | ) | 880 | 264 | |||||||||||||||||
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Net cash provided by (used in) financing activities | 3,654 | — | (25,582 | ) | (880 | ) | 26,726 | 3,918 | ||||||||||||||||
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Net increase (decrease) in cash and cash equivalents | 2 | — | (1,314 | ) | (295 | ) | — | (1,607 | ) | |||||||||||||||
Cash and cash equivalents at beginning of period | 1 | — | 5,082 | 679 | — | 5,762 | ||||||||||||||||||
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Cash and cash equivalents at end of period | $ | 3 | $ | — | $ | 3,768 | $ | 384 | $ | — | $ | 4,155 | ||||||||||||
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-20-
GENESIS ENERGY, L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three Months Ended March 31, 2010 | ||||||||||||||||||||||||
Genesis Energy, L.P. (Parent and Co-Issuer) | Genesis Energy Finance Corporation (Co-Issuer) | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Genesis Energy, L.P. Consolidated | |||||||||||||||||||
Net cash provided by operating activities | $ | — | $ | — | $ | 12,240 | $ | 1,043 | $ | 7 | $ | 13,290 | ||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||||||
Payments to acquire fixed and intangible assets | — | — | (2,271 | ) | (28 | ) | — | (2,299 | ) | |||||||||||||||
Distributions from joint ventures - return of investment | 16,578 | — | — | — | (16,578 | ) | — | |||||||||||||||||
Investments in joint ventures and other investments | 1,940 | — | — | — | (1,940 | ) | — | |||||||||||||||||
Repayments on loan to non-guarantor subsidiary | — | — | 801 | — | (801 | ) | — | |||||||||||||||||
Other, net | — | — | 268 | — | — | 268 | ||||||||||||||||||
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Net cash used in investing activities | 18,518 | — | (1,202 | ) | (28 | ) | (19,319 | ) | (2,031 | ) | ||||||||||||||
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CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||||||
Bank borrowings | — | — | 130,400 | — | — | 130,400 | ||||||||||||||||||
Bank repayments | — | — | (118,900 | ) | — | — | (118,900 | ) | ||||||||||||||||
Credit facility and senior unsecured notes issuance fees | — | — | — | — | — | — | ||||||||||||||||||
Issuance of ownership interests to partners for cash | (1,940 | ) | — | 37 | — | 1,940 | 37 | |||||||||||||||||
Noncontrolling interests contributions, net of distributions | — | — | — | — | (2 | ) | (2 | ) | ||||||||||||||||
Acquisition of noncontrolling interest in DG Marine | — | — | — | — | — | — | ||||||||||||||||||
Distributions to partners/owners | (16,578 | ) | — | (16,581 | ) | — | 16,580 | (16,579 | ) | |||||||||||||||
Other, net | — | — | 847 | (794 | ) | 794 | 847 | |||||||||||||||||
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Net cash provided by (used in) financing activities | (18,518 | ) | — | (4,197 | ) | (794 | ) | 19,312 | (4,197 | ) | ||||||||||||||
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Net increase (decrease) in cash and cash equivalents | — | — | 6,841 | 221 | — | 7,062 | ||||||||||||||||||
Cash and cash equivalents at beginning of period | 2 | — | 3,884 | 262 | — | 4,148 | ||||||||||||||||||
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Cash and cash equivalents at end of period | $ | 2 | $ | — | $ | 10,725 | $ | 483 | $ | — | $ | 11,210 | ||||||||||||
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-21-