Genesis Energy, L.P. Reports Fourth Quarter 2017 Results

HOUSTON–(BUSINESS WIRE)–Genesis Energy, L.P. (NYSE: GEL) today announced its fourth quarter
results.

Certain highlights of our results for the quarter ended December 31,
2017 included the following items:

-We continue to integrate our recently acquired soda ash operations and
performance continues to exceed our expectations.

-We obtained long-term commitments from a leading operator for the
production from approximately 300,000 acres for downstream
transportation on our existing infrastructure in the emerging Powder
River Basin.

-We effectively extended the term for $350 million of our outstanding
notes to 2026 (from 2021) through a new notes offering and a tender
offer for existing notes in December and a planned redemption for the
balance of all untendered notes in February.

-We increased our quarterly distribution rate per common unit by $.01,
consistent with our strategy to increase that distribution rate by at
least $.01 per quarter, and we declared a payment-in-kind distribution
on our preferred units, which will result in the issuance of
approximately 490,252 additional preferred units.

We generated the following financial results for the fourth quarter of
20171:

• Net Income Attributable to Genesis Energy, L.P. of $15.5 million,
  resulting in a loss of $0.01 of net income per common unit for the
  fourth quarter of 2017 (after giving effect to distributions on our
  preferred units) compared to $22.1 million, or income of $0.19 per
  common unit, for the same period in 2016.
• Cash Flows from Operating Activities of $121.1 million for the fourth
  quarter of 2017 compared to $69.9 million for the same period in 2016,
  an increase of $51.2 million, or 73%, principally due to an increase
  in cash flows from operations reflecting a full quarter of our Alkali
  Business and a decrease in working capital needs.
• Available Cash before Reserves of $106.7 million for the fourth
  quarter of 2017, compared to $95.4 million for the same period in
  2016, an increase of $11.3 million, or 12%. Available Cash before
  Reserves provided 1.71 coverage for the quarterly distribution of
  $0.51 per common unit attributable to the fourth quarter. We will pay
  distributions on our convertible preferred units in the form of
  490,252 additional convertible preferred units.
• Adjusted EBITDA of $164.8 million for the fourth quarter of 2017,
  compared to $133.1 million for the same period in 2016, an increase of
  $31.7 million, or 23.8%. Our bank leverage ratio, calculated
  consistent with our credit agreement, is 5.34 as of December 31, 2017.
  These amounts are calculated and further discussed later in this press
  release.

Grant Sims, CEO of Genesis Energy, said, "We are pleased to announce
that we remain on track with our previously announced guidance for
visible, achievable long term distribution growth and a clear path
forward to deleveraging.

Our quarterly results reflect the first full quarter of our recently
acquired soda ash operations, which have continued to exceed our
expectations and remain on track to meet previously announced guidance.
Our legacy businesses continue to perform as expected and we are seeing
increased volumes and contributions from our organic projects in the
Baton Rouge corridor, in and around the Texas City area and in Wyoming.
Our quarterly results were negatively impacted by a number of events
including Hurricane Nate, which had an even bigger temporary impact than
Hurricane Harvey on our offshore operations, limited railroad capacity
out of Canada to the Gulf Coast and operating issues on downstream
facilities in Texas. Despite these challenges, which we believe are
short term in nature, our reported distribution coverage ratio of 1.71
exceeded our targeted range and our bank calculated leverage ratio
slightly increased on a sequential basis as we organically funded the
continued build out of our Baton Rouge deepwater terminal to facilitate
crude exports and our recently announced expansion of our Powder River
infrastructure.

Given our recent and continuing actions to increase liquidity and
strengthen our balance sheet, the integration and financial contribution
of the soda ash business and the continued ramp up of our recent organic
capital program along with contributions from our legacy businesses, we
believe we are well positioned for the rest of this year and beyond to
continue to deliver long term value to all stakeholders without ever
losing our absolute commitment to safe, reliable and responsible
operations."

1 We have recast our prior period non-GAAP measures to
conform to our revised approach to defining and presenting such
measures, which we adopted in the fourth quarter of 2017. For additional
information, please refer to the section entitled “Non-GAAP Measures,”
below.

Financial Results

Segment Margin

On September 1, 2017, we acquired our trona and trona-based exploring,
mining, processing, producing, marketing and selling business
(the "Alkali Business") for approximately $1.325 billion. At the
closing, we entered into a transition service agreement to facilitate a
smooth transition of operations and uninterrupted services for both
employees and customers. We report the results of our Alkali Business in
our renamed sodium and sulfur services segment, which includes our
Alkali Business as well as our sulfur removal refinery services
operations, which remove sulfur from gas streams for refineries.

Variances between the fourth quarter of 2017 (the “2017 Quarter”) and
the fourth quarter of 2016 (the “2016 Quarter”) in these components are
explained below.

Segment margin results for the 2017 Quarter and 2016 Quarter were as
follows:

Three Months Ended December 31,
2017	2016
(in thousands)
Offshore pipeline transportation	$	74,012	$	87,163
Sodium minerals and sulfur services	66,469	17,922
Onshore facilities and transportation	24,377	19,395
Marine transportation	10,526	16,384
Total Segment Margin	$	175,384	$	140,864

Offshore pipeline transportation Segment Margin for the 2017 Quarter
decreased $13.2 million, or 15.1%, from the 2016 Quarter. The 2017
Quarter was negatively impacted by both anticipated and unanticipated
downtime at several major fields, including weather related downtime,
affecting certain of our deepwater Gulf of Mexico customers and thus
certain of our key crude oil and natural gas assets, including our
Poseidon pipeline and certain associated laterals that we own. The 2017
period also reflects the effects of a contractual adjustment to a lower
rate during 2017 on a lateral we own, which lower rate we anticipate
will be in place going forward. In addition, the 2016 Quarter benefited
from the temporary diversion of certain natural gas volumes from third
party gas pipelines to one of our gas pipelines and related facilities
due to one-time disruptions at onshore processing facilities where such
volumes typically flow.

Sodium minerals and sulfur services Segment Margin for the 2017 Quarter
increased $48.5 million, or 270.9%. This increase is principally due to
the inclusion of contributions from the Alkali Business (which we
acquired on September 1, 2017). In addition, in the 2017 Quarter we
experienced stronger demand for and sales of NaHS, particularly from our
mining customers, relative to the 2016 Quarter.

Onshore facilities and transportation Segment Margin increased by $5.0
million, or 25.7%, between the two quarters. The 2017 Quarter includes
the effects of the ramp up in volumes on our pipeline, rail and terminal
infrastructure on our recently completed infrastructure in the Baton
Rouge corridor, as well as the ramp up in volumes on our Wyoming and
repurposed Texas pipeline systems. The increases from these activities
were partially offset by lower demand for our services in our historical
back-to-back, or buy/sell, crude oil marketing business associated with
aggregating and trucking crude oil from producers' leases to local or
regional re-sale points.

Marine transportation Segment Margin for the 2017 Quarter decreased $5.9
million, or 35.8%, from the 2016 Quarter. The decrease in Segment Margin
is primarily due to lower day rates on our inland and offshore fleets
(which offset higher utilization as adjusted for planned dry docking
time in our offshore fleet). In our inland fleet, weaker demand
continued to apply pressure on our rates, which we expect to continue
into 2018. In our offshore barge fleet, as a number of our units have
come off longer term contracts, we have continued to choose to primarily
place them in spot service or short-term (less than a year) service, as
we continue to believe the day rates currently being offered by the
market are at, or approaching, cyclical lows.

Other Components of Net Income

In the 2017 Quarter, we recorded Net Income Attributable to Genesis
Energy, L.P. of $15.5 million compared to $22.1 million in the 2016
Quarter. In addition to the overall increase in Segment Margin as
discussed above, net income for the 2017 Quarter was positively impacted
by gains on the sale of certain non-core assets of $13.6 million, as
well as a tax benefit of $4.8 million as a result of newly passed
federal tax laws in the 2017 Quarter. These items were more than offset
by certain items resulting in a decrease in net income in the 2017
Quarter relative to the 2016 Quarter, including an increase in interest
expense of $19.4 million (principally related to the financing of the
acquisition of our Alkali Business), an increase in depreciation and
amortization expense of $10.6 million (principally related to assets we
acquired in the acquisition of our Alkali Business), a $6.2 million loss
on debt extinguishment in the 2017 Quarter relating to activities
associated with refinancing $350 million of our notes due in 2021, an
$8.2 million charge relating to the quarterly re-measurement of the
derivative features included in our convertible preferred units and an
increase in general and administrative expenses of $16.8 million (which
includes approximately $14.6 million of accruals made in the 2017
Quarter for a variety of items, including approximately $7.5 million
relating to our annual bonus program).

Earnings Conference Call

We will broadcast our Earnings Conference Call on Thursday, February 15,
2018, at 9:30 a.m. Central time (10:30 a.m. Eastern time). This call can
be accessed at www.genesisenergy.com.
Choose the Investor Relations button. 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
offshore pipeline transportation, sodium minerals and sulfur services,
marine transportation and onshore facilities and transportation.
Genesis’ operations are primarily located in Texas, Louisiana, Arkansas,
Mississippi, Alabama, Florida, Wyoming and the Gulf of Mexico.

GENESIS ENERGY, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS – UNAUDITED
(in thousands, except per unit amounts)
Three Months Ended December 31,	Year Ended December 31,
2017	2016	2017	2016
REVENUES	$	720,049	$	428,053	$	2,028,377	$	1,712,493
COSTS AND EXPENSES:
Costs of sales and operating expenses	566,544	308,336	1,529,236	1,238,245
General and administrative expenses	27,698	10,909	66,421	45,625
Depreciation and amortization	76,027	65,396	252,480	222,196
Gain on sale of assets	(13,627	)	—	(40,311	)	—
OPERATING INCOME	63,407	43,412	220,551	206,427
Equity in earnings of equity investees	16,241	12,582	51,046	47,944
Interest expense	(54,645	)	(35,290	)	(176,762	)	(139,947	)
Other expense	(14,439	)	—	(16,715	)	—
INCOME BEFORE INCOME TAXES	10,564	20,704	78,120	114,424
Income tax benefit (expense)	4,837	(383	)	3,959	(3,342	)
NET INCOME	15,401	20,321	82,079	111,082
Net loss attributable to noncontrolling interests	111	1,797	568	2,167
NET INCOME ATTRIBUTABLE TO GENESIS ENERGY, L.P.	$	15,512	$	22,118	$	82,647	$	113,249
Less: Accumulated distributions attributable to Class A Convertible Preferred Units	(16,526	)	—	(21,995	)	—
NET INCOME AVAILABLE TO COMMON UNITHOLDERS	$	(1,014	)	$	22,118	$	60,652	$	113,249
NET INCOME PER COMMON UNIT:
Basic and Diluted	$	(0.01	)	$	0.19	$	0.50	$	1.00
WEIGHTED AVERAGE OUTSTANDING COMMON UNITS:
Basic and Diluted	122,579	117,979	121,546	113,433

GENESIS ENERGY, L.P.
OPERATING DATA – UNAUDITED
Three Months Ended December 31,	Year Ended December 31,
2017	2016	2017	2016
Offshore Pipeline Transportation Segment
Crude oil pipelines (barrels/day unless otherwise noted):
CHOPS	193,210	215,794	213,527	204,533
Poseidon (1)	240,241	272,905	253,547	262,829
Odyssey (1)	98,529	107,859	116,408	106,933
GOPL	8,243	12,321	8,185	7,468
Offshore crude oil pipelines total	540,223	608,879	591,667	581,763
Natural gas transportation volumes (MMbtus/d) (1)	434,591	749,262	496,302	679,862
Sodium Minerals and Sulfur Services Segment
NaHS (dry short tons sold)	37,829	29,650	133,404	125,766
Soda Ash volumes (short tons sold) (2)	1,062,000	—	1,398,000		—
NaOH (caustic soda) volumes (dry short tons sold) (3)	28,854	20,219	84,816	80,021
Onshore Facilities and Transportation Segment
Crude oil pipelines (barrels/day):
Texas	45,343	10,306	32,684	33,814
Jay	13,189	15,769	14,155	14,815
Mississippi	7,732	9,176	8,290	10,247
Louisiana (4)	152,954	73,568	135,310	44,295
Wyoming	29,789	13,808	22,329	10,959
Onshore crude oil pipelines total	249,007	122,627	212,768	114,130
Free State- CO2 Pipeline (Mcf/day)	92,397	88,417	77,921	97,955
Crude oil and petroleum products sales (barrels/day)	59,237	49,854	51,771	62,484
Rail load/unload volumes (barrels/day) (5)	46,544	38,592	52,877	19,691
Marine Transportation Segment
Inland Fleet Utilization Percentage (6)	90.0	%	91.4	%	90.4	%	91.4	%
Offshore Fleet Utilization Percentage (6)	97.5	%	88.3	%	98.2	%	90.5	%
(1) Volumes for our equity method investees are presented on a 100% basis. We own 64% of Poseidon and 29% of Odyssey, as well as equity interests in various other entities. (2) Includes sales volumes from September 1, 2017, the date on which we acquired the Alkali Business. (3) Caustic soda sales volumes also include volumes sold for the month of September from our new Alkali Business. (4) Total daily volume for the three months and twelve months ended December 31, 2017 includes 35,459 and 14,117 barrels per day, respectively of crude oil transported by our new Raceland Pipeline which became fully operational in the second quarter of 2017. (5) Indicates total barrels for which fees were charged for either loading or unloading at all rail facilities. (6) Utilization rates are based on a 365 day year, as adjusted for planned downtime and dry-docking.

GENESIS ENERGY, L.P.
CONDENSED CONSOLIDATED BALANCE SHEETS – UNAUDITED
(in thousands, except number of units)
December 31, 2017	December 31, 2016
ASSETS
Cash and cash equivalents	$	9,041	$	7,029
Accounts receivable – trade, net	495,449	224,682
Inventories	88,653	98,587
Other current assets	42,890	29,271
Total current assets	636,033	359,569
Fixed assets and mineral leaseholds, net	5,430,535	4,214,864
Investment in direct financing leases, net	125,283	132,859
Equity investees	381,550	408,756
Intangible assets, net	182,406	204,887
Goodwill	325,046	325,046
Other assets, net	64,849	56,611
Total assets	$	7,145,702	$	5,702,592
LIABILITIES AND CAPITAL
Accounts payable – trade	$	270,855	$	119,841
Accrued liabilities	185,409	140,962
Total current liabilities	456,264	260,803
Senior secured credit facility	1,099,200	1,278,200
Senior unsecured notes, net of debt issuance costs	2,598,918	1,813,169
Deferred tax liabilities	20,134	25,889
Other long-term liabilities	256,571	204,481
Total liabilities	4,431,087	3,582,542
Mezzanine capital:
Class A convertible preferred units	697,151	—
Partners' capital:
Common unitholders	2,025,543	2,130,331
Noncontrolling interests	(8,079	)	(10,281	)
Total partners' capital	2,017,464	2,120,050
Total liabilities, mezzanine capital and partners' capital	$	7,145,702	$	5,702,592
Common Units Data:
Total common units outstanding	122,579,218	117,979,218

GENESIS ENERGY, L.P.
RECONCILIATION OF NET INCOME TO SEGMENT MARGIN – UNAUDITED
(in thousands)
Three Months Ended December 31,	Year Ended December 31,
2017	2016	2017	2016
Net Income Attributable to Genesis Energy, L.P.	$	15,512	$	22,118	$	82,647	$	113,249
Corporate general and administrative expenses	26,335	8,636	60,029	40,905
Depreciation, depletion, amortization and accretion	77,808	62,072	262,021	230,563
Interest expense, net	54,645	35,290	176,762	139,947
Tax expense	(4,837	)	383	(3,959	)	3,342
Gain on sale of assets	(13,627	)	—	(40,311	)	—
Equity compensation adjustments	(283	)	(251	)	(940	)	(317	)
Provision for leased items no longer in use	—	—	12,589	—
Other	2,987	—	2,962	—
Plus (minus) Select Items, net	16,844	12,616	42,743	41,882
Segment Margin (1)	$	175,384	$	140,864	$	594,543	$	569,571
(1) See definition of Segment Margin later in this press release.

GENESIS ENERGY, L.P.
RECONCILIATIONS OF NET INCOME TO ADJUSTED EBITDA AND AVAILABLE CASH BEFORE RESERVES- UNAUDITED
(in thousands)
Three Months Ended December 31,	Year Ended December 31,
2017	2016	2017	2016
(in thousands)	(in thousands)
Net income attributable to Genesis Energy, L.P.	$	15,512	$	22,118	$	82,647	$	113,249
Interest expense, net	54,645	35,290	176,762	139,947
Income Tax expense	(4,837	)	383	(3,959	)	3,342
Depreciation, depletion, amortization, and accretion	77,808	62,072	262,021	230,563
EBITDA	143,128	119,863	517,471	487,101
Plus (minus) Select Items, net	21,652	13,268	59,295	45,128
Adjusted EBITDA, net	164,780	133,131	576,766	532,229
Maintenance capital utilized(1)	(3,750	)	(2,446	)	(13,020	)	(7,696	)
Interest expense, net	(54,645	)	(35,290	)	(176,762	)	(139,947	)
Cash tax expense	270	(300	)	(100	)	(1,200	)
Other	53	305	2,148	855
Available Cash before Reserves	$	106,708	$	95,400	$	389,032	$	384,241
(1) Maintenance capital expenditures in the 2017 Quarter and 2016 Quarter were $35.7 million and $6.8 million, respectively. This increase principally is a result of expenditures associated with our Alkali Business.

GENESIS ENERGY, L.P.
RECONCILIATION OF NET CASH FLOWS FROM OPERATING ACTIVITIES TO ADJUSTED EBITDA – UNAUDITED
(in thousands)
Three Months Ended December 31,	Year Ended December 31,
2017	2016	2017	2016
Cash Flows from Operating Activities	$	121,068	$	69,941	$	338,858	$	298,338
Interest Expense, net	54,645	35,290	176,762	139,947
Amortization of debt issuance costs and discount	(4,949	)	(2,575	)	(13,103	)	(10,138	)
Effects of available cash from equity method investees not included in operating cash flows	5,763	4,701	20,280	21,353
Net effect of changes in components of operating assets and liabilities	(36,418	)	27,243	(10,156	)	90,650
Non-cash effect of equity based compensation expense	(121	)	(990	)	4,549	(7,316	)
Expenses related to acquiring or constructing growth capital assets	5,324	579	16,833	1,945
Differences in timing of cash receipts for certain contractual arrangements (1)	(5,846	)	(3,624	)	(17,540	)	(13,253	)
Other items, net	11,687	2,566	19,972	10,703
Gain on sale of assets	13,627	—	40,311	—
Adjusted EBITDA	$	164,780	$	133,131	$	576,766	$	532,229
(1) Represents adjustments attributable to certain cash payments received from customers under certain of our minimum payment obligation contracts that are not recognized as revenue under GAAP in the period in which such payments are received. For purposes of our Non-GAAP measures, we add those amounts in the period of payment and deduct them in the period in which GAAP recognizes them.

GENESIS ENERGY, L.P.
RECONCILIATION OF NET CASH FLOWS FROM OPERATING ACTIVITIES TO ADJUSTED EBITDA – UNAUDITED
(in thousands)
December 31, 2017
Senior secured credit facility	$	1,099,200
Senior unsecured notes	2,598,918
Less: Outstanding inventory financing sublimit borrowings	(29,000	)
Less: Cash and cash equivalents	(9,041	)
Adjusted Debt (1)	$	3,660,077
Pro Forma LTM
December 31, 2017
Consolidated EBITDA (per our senior secured credit facility) (2)	$	561,961
Acquisitions, material projects and other Consolidated EBITDA adjustments (3)	123,815
Adjusted Consolidated EBITDA (per our senior secured credit facility) (4)	$	685,776
Adjusted Debt-to-Adjusted Consolidated EBITDA	5.34	x
(1) We define Adjusted Debt as the amounts outstanding under our senior secured credit facility and senior unsecured notes (including 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) Consolidated EBITDA for the four-quarter period ending with the most recent quarter, as calculated under our senior secured credit facility. (3) This amount reflects the adjustment we are permitted to make under our senior secured credit facility for purposes of calculating compliance with our leverage ratio. It includes a pro rata portion of projected future annual EBITDA from material projects (i.e. organic growth) and includes Adjusted EBITDA (using historical amounts and other permitted amounts) since the beginning of the 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. (4) Adjusted Consolidated EBITDA for the four-quarter period ending with the most recent quarter, as calculated under our senior secured credit facility.

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. All statements, other than
statements of historical facts, included in this press release that
address activities, events or developments that we expect, believe or
anticipate will or may occur in the future are forward-looking
statements, and historical performance is not necessarily indicative of
future performance. Those forward-looking statements rely on a number of
assumptions concerning future events and are subject to a number of
uncertainties, factors and risks, many of which are outside our control,
that could cause results to differ materially from those expected by
management. Such risks and uncertainties include, but are not limited
to, weather, political, economic and market conditions, including a
decline in the price and market demand for products, the timing and
success of business development efforts and other uncertainties. Those
and other applicable uncertainties, factors and risks that may affect
those forward-looking statements are described more fully in our Annual
Report on Form 10-K for the year ended December 31, 2016 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. We
undertake no obligation to publicly update or revise any forward-looking
statement.

NON-GAAP MEASURES

This press release and the accompanying schedules include non-generally
accepted accounting principle (non-GAAP) financial measures of Adjusted
EBITDA and total Available Cash before Reserves. In this press release,
we also present total Segment Margin as if it were a non-GAAP measure.

Contacts

Genesis Energy, L.P.
Bob Deere, 713-860-2516
Chief Financial
Officer

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