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Genesis Energy, L.P. Reports Third Quarter 2012 Results

Distributions

We have increased our quarterly distribution rate for twenty-nine consecutive quarters. During that period, twenty-four of those quarterly increases have been 10% or greater year-over-year. Over the last four quarters, we have increased the distribution rate on our common units by a total of $0.045 per unit, or 10.5%. Distributions paid over the last four quarters, and the distribution to be paid on November 14, 2012 for the third quarter of 2012, are as follows:
Distribution For   Date Paid   Per Unit

Amount
2012
3rd Quarter November 14, 2012 $ 0.4725
2nd Quarter August 14, 2012 $ 0.4600
1st Quarter May 15, 2012 $ 0.4500
2011
4th Quarter February 14, 2012 $ 0.4400
3rd Quarter November 14, 2011 $ 0.4275
 

Earnings Conference Call

We will broadcast our Earnings Conference Call on Tuesday, November 6, 2012, at 8:00 a.m. Central time. This call can be accessed at www.genesisenergy.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. is a diversified midstream energy master limited partnership headquartered in Houston, Texas. Genesis' operations include pipeline transportation, refinery services and supply and logistics. The Pipeline Transportation Division is engaged in the pipeline transportation of crude oil and carbon dioxide. The Refinery Services Division primarily processes sour gas streams to remove sulfur at refining operations. The Supply and Logistics Division is engaged in the transportation, storage and supply and marketing of energy products, including crude oil, refined products, and certain industrial gases. Genesis' operations are primarily located in Texas, Louisiana, Arkansas, Mississippi, Alabama, Florida and the Gulf of Mexico.

GENESIS ENERGY, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED

(in thousands, except per unit amounts)
   
Three Months EndedSeptember 30, Nine Months EndedSeptember 30,
2012   2011 2012   2011
REVENUES $ 942,334 $ 830,200 $ 2,797,945 $ 2,282,788
 
COSTS AND EXPENSES:
Costs of sales 888,003 777,957 2,639,047 2,146,954
General and administrative expenses 10,375 8,905 29,934 25,339
Depreciation and amortization 14,838   14,706   45,447   43,100  
OPERATING INCOME 29,118 28,632 83,517 67,395
Equity in earnings (losses) of equity investees 3,432 (412 ) 7,971 3,377
Interest expense (9,873 ) (8,960 ) (30,697 ) (26,670 )
INCOME BEFORE INCOME TAXES 22,677 19,260 60,791 44,102
Income tax benefit (expense) 8,517   (172 ) 8,591   (626 )
NET INCOME $ 31,194   $ 19,088   $ 69,382   $ 43,476  
NET INCOME PER COMMON UNIT:
Basic and Diluted $ 0.39 $ 0.27 $ 0.90 $ 0.65
WEIGHTED AVERAGE OUTSTANDING COMMON UNITS:
Basic and Diluted 79,901 70,447 77,410 66,580
 

GENESIS ENERGY, L.P.

OPERATING DATA - UNAUDITED
   
Three Months EndedSeptember 30, Nine Months EndedSeptember 30,
2012   2011 2012   2011
Pipeline Transportation Segment
Onshore crude oil pipelines (barrels/day):
Jay 22,841 17,720 19,931 16,499
Texas 52,767 44,149 50,327 46,020
Mississippi 17,942   20,884   18,377   20,883
Onshore crude oil pipelines total 93,550   82,753   88,635   83,402
Offshore crude oil pipelines (barrels/day):
CHOPS (1) 91,377 90,312 78,817 123,034
Poseidon (1) (2) 215,474 206,596
Odyssey (1) (2) 31,869 35,994
GOPL (2) 8,300     16,979  
Offshore crude oil pipelines total 347,020   90,312   338,386   123,034
CO 2 pipeline (Mcf/day)
Free State 188,165   192,041   177,527   166,302
 
Refinery Services Segment
NaHS (dry short tons sold) 34,372   33,396   107,321   106,709
NaOH (caustic soda dry short tons sold) 21,152   23,440   56,740   74,289
 
Supply and Logistics Segment
Crude oil and petroleum products sales (barrels/day) 100,095   77,179   91,444   71,770
(1) Volumes for our equity method investees are presented on a 100% basis.
(2) Acquired in January 2012.
 

GENESIS ENERGY, L.P.

CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED

(in thousands, except number of units)
   
September 30,2012 December 31,2011
ASSETS
Cash and cash equivalents $ 15,461 $ 10,817
Accounts receivable - trade, net 318,892 237,989
Inventories 67,298 101,124
Other current assets 25,616   26,174
Total current assets 427,267 376,104
Fixed assets, net 535,951 416,925
Investment in direct financing leases, net 158,698 162,460
Equity investees 547,925 326,947
Intangible assets, net 79,140 93,356
Goodwill 325,046 325,046
Other assets, net 33,128   30,006
Total assets $ 2,107,155   $ 1,730,844
LIABILITIES AND PARTNERS’ CAPITAL
Accounts payable - trade $ 254,688 $ 199,357
Accrued liabilities 63,691   50,071
Total current liabilities 318,379 249,428
Senior secured credit facility 483,000 409,300
Senior unsecured notes 350,924 250,000
Deferred tax liabilities 11,598 12,549
Other long-term liabilities 15,321 16,929
Partners' capital:
Common unitholders 927,933   792,638
Total liabilities and partners' capital $ 2,107,155   $ 1,730,844
 
Units Data:
Total common units outstanding 81,202,752   71,965,062
 

GENESIS ENERGY, L.P.

RECONCILIATION OF SEGMENT MARGIN TO INCOME BEFORE INCOME TAXES - UNAUDITED

(in thousands)
 
Three Months EndedSeptember 30,
2012   2011
Segment margin $ 65,929 $ 52,931
Corporate general and administrative expenses (9,431 ) (8,194 )

Non-cash items included in general and administrative costs
377 (219 )
Cash expenditures not included in Adjusted EBITDA 228 1,008
Cash expenditures not included in net income (481 ) (327 )
Adjusted EBITDA 56,622 45,199
Depreciation and amortization (14,838 ) (14,706 )
Interest expense, net (9,873 ) (8,960 )

Cash expenditures not included in Adjusted EBITDA or net income
253 (681 )

Adjustment to exclude distributions from equity investees and include equity in investees net income
(5,613 ) (3,702 )
Non-cash compensation charges (2,001 ) 930
Other non-cash items (1,873 ) 1,180  
Income before income taxes $ 22,677   $ 19,260  
 

GENESIS ENERGY, L.P.

ADJUSTED DEBT-TO-PRO FORMA EBITDA RATIO - UNAUDITED

(in thousands)
 
September 30, 2012
Senior secured credit facility $ 483,000
Senior unsecured notes (excluding unamortized premium of $924) 350,000
Less: Outstanding inventory financing sublimit borrowings (48,600 )
Less: Cash and cash equivalents (15,461 )
Adjusted Debt (1) $ 768,939  
 
Pro Forma LTM (2)
Adjusted EBITDA (as reported) September 30, 2012
4 th Quarter 2011 $ 45,279
1 st Quarter 2012 51,124
2 nd Quarter 2012 54,259
3 rd Quarter 2012 56,622  
LTM Adjusted EBITDA 207,284
Acquisitions and material projects EBITDA adjustment (3) 19,995  
Pro Forma EBITDA $ 227,279  
 
Adjusted Debt-to-Pro Forma EBITDA 3.38x
(1) We define Adjusted Debt as the amounts outstanding under our senior secured credit facility and senior unsecured notes (excluding any unamortized premiums or discounts), less the amount outstanding under our inventory financing sublimit, less cash and cash equivalents on hand at the end of the period.

(2) Last twelve months ("LTM"). The most comparable GAAP measure to Adjusted EBITDA, income before income taxes, was $5.9 million for the fourth quarter of 2011, $19.6 million for the first quarter of 2012, $18.5 million for the second quarter of 2012, and $22.7 million for the third quarter of 2012. Reconciliations of Adjusted EBITDA to income before income taxes for all periods presented are available on our website at www.genesisenergy.com.
(3) This amount reflects the adjustment we are permitted to make under our credit agreement for purposes of calculating compliance with our leverage ratio. It includes a pro rata portion of projected future annual EBITDA from material projects and includes Adjusted EBITDA (using historical amounts) since the beginning of such calculation period attributable to each acquisition completed during such calculation period, regardless of the date on which such acquisition was actually completed. This adjustment may not be indicative of future results.
 

This press release includes forward-looking statements as defined under federal law. Although we believe that our expectations are based upon reasonable assumptions, we can give no assurance that our goals will be achieved. Actual results may vary materially. Please refer to our Annual Report on Form 10-K for the year ended December 31, 2011 filed with the Securities and Exchange Commission and other filings, including our Current Reports on Form 8-K and Quarterly Reports on Form 10-Q for additional information and risk factors that may affect these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statement.

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