x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
(State or other jurisdiction of
incorporation or organization)
|
76-0513049
(I.R.S. Employer
Identification No.)
|
919 Milam, Suite 2100, Houston, TX
(Address of principal executive offices)
|
77002
(Zip code)
|
Registrant's telephone number, including area code:
|
(713) 860-2500
|
Large accelerated filer
o
|
Accelerated filer
x
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
Item 1.
|
Financial Statements
|
Page
|
3 | ||
4 | ||
5 | ||
6 | ||
7 | ||
8 | ||
Item 2.
|
21 | |
Item 3.
|
32 | |
Item 4.
|
33 | |
PART II. OTHER INFORMATION
|
||
Item 1.
|
33 | |
Item 1A.
|
33 | |
Item 2.
|
33 | |
Item 3.
|
33 | |
Item 4.
|
33 | |
Item 5.
|
33 | |
Item 6.
|
33 | |
SIGNATURES
|
34
|
Three Months Ended
March 31, |
||||||||
2010
|
2009
|
|||||||
REVENUES:
|
||||||||
Supply and logistics:
|
||||||||
Unrelated parties
|
$ | 419,702 | $ | 187,818 | ||||
Related parties
|
397 | 1,244 | ||||||
Refinery services
|
29,502 | 48,294 | ||||||
Pipeline transportation, including natural gas sales:
|
||||||||
Transportation services - unrelated parties
|
7,009 | 3,401 | ||||||
Transportation services - related parties
|
5,734 | 8,294 | ||||||
Natural gas sales revenues
|
915 | 713 | ||||||
CO
2
marketing:
|
||||||||
Unrelated parties
|
2,736 | 3,052 | ||||||
Related parties
|
536 | 677 | ||||||
Total revenues
|
466,531 | 253,493 | ||||||
COSTS AND EXPENSES:
|
||||||||
Supply and logistics costs:
|
||||||||
Product costs - unrelated parties
|
392,191 | 163,731 | ||||||
Product costs - related parties
|
- | 1,713 | ||||||
Operating costs
|
22,616 | 17,269 | ||||||
Refinery services operating costs
|
16,227 | 35,333 | ||||||
Pipeline transportation costs:
|
||||||||
Pipeline transportation operating costs
|
3,564 | 2,494 | ||||||
Natural gas purchases
|
865 | 654 | ||||||
CO
2
marketing costs:
|
||||||||
Transportation costs
|
1,234 | 1,307 | ||||||
Other costs
|
16 | 16 | ||||||
General and administrative
|
6,294 | 8,754 | ||||||
Depreciation and amortization
|
13,406 | 15,419 | ||||||
Net loss (gain) on disposal of surplus assets
|
80 | (218 | ) | |||||
Total costs and expenses
|
456,493 | 246,472 | ||||||
OPERATING INCOME
|
10,038 | 7,021 | ||||||
Equity in earnings of joint ventures
|
182 | 1,906 | ||||||
Interest income
|
14 | 21 | ||||||
Interest expense
|
(3,218 | ) | (3,056 | ) | ||||
Income before income taxes
|
7,016 | 5,892 | ||||||
Income tax expense
|
(691 | ) | (591 | ) | ||||
NET INCOME
|
6,325 | 5,301 | ||||||
Net loss (income) attributable to noncontrolling interests
|
560 | (11 | ) | |||||
NET INCOME ATTRIBUTABLE TO
GENESIS ENERGY, L.P.
|
$ | 6,885 | $ | 5,290 |
Three Months Ended
March 31,
|
||||||||
2010
|
2009
|
|||||||
NET INCOME ATTRIBUTABLE TO
GENESIS ENERGY, L.P.
|
||||||||
PER COMMON UNIT:
|
||||||||
BASIC
|
$ | 0.06 | $ | 0.16 | ||||
DILUTED
|
$ | 0.06 | $ | 0.16 | ||||
WEIGHTED AVERAGE OUTSTANDING
|
||||||||
COMMON UNITS:
|
||||||||
BASIC
|
39,548 | 39,457 | ||||||
DILUTED
|
39,596 | 39,566 |
Three Months Ended
March 31,
|
||||||||
2010
|
2009
|
|||||||
Net income
|
$ | 6,325 | $ | 5,301 | ||||
Change in fair value of derivatives:
|
||||||||
Current period reclassification to earnings
|
280 | 132 | ||||||
Changes in derivative financial instruments - interest
rate swaps
|
(204 | ) | (128 | ) | ||||
Comprehensive income
|
6,401 | 5,305 | ||||||
Comprehensive loss (income) attributable to
noncontrolling interests
|
522 | (3 | ) | |||||
Comprehensive income attributable to Genesis Energy, L.P.
|
$ | 6,923 | $ | 5,302 |
Partners' Capital
|
||||||||||||||||||||||||
Number of
Common
|
Common
Unitholders
|
General
Partner
|
Accumulated
Other
|
Non-
Controlling
|
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 losses
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 (See Note 9)
|
- | - | (1,977 | ) | - | - | (1,977 | ) | ||||||||||||||||
Unit based compensation expense
|
98 | 20 | - | - | - | 20 | ||||||||||||||||||
Partners' capital, March 31, 2010
|
39,586 | $ | 574,137 | $ | 10,955 | $ | (791 | ) | $ | 22,532 | $ | 606,833 |
Partners' Capital
|
||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||
Number of
|
Other
|
Non-
|
||||||||||||||||||||||
Common
|
Common
|
General
|
Comprehensive
|
Controlling
|
Total
|
|||||||||||||||||||
Units
|
Unitholders
|
Partner
|
Loss
|
Interests
|
Capital
|
|||||||||||||||||||
Partners' capital, January 1, 2009
|
39,457 | $ | 616,971 | $ | 16,649 | $ | (962 | ) | $ | 24,804 | $ | 657,462 | ||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||
Net income
|
- | 6,481 | (1,191 | ) | - | 11 | 5,301 | |||||||||||||||||
Interest rate swap loss
reclassified to interest expense
|
- | - | - | 64 | 68 | 132 | ||||||||||||||||||
Interest rate swap loss
|
- | - | - | (63 | ) | (65 | ) | (128 | ) | |||||||||||||||
Cash distributions
|
- | (13,021 | ) | (1,089 | ) | - | (1 | ) | (14,111 | ) | ||||||||||||||
Contribution for executive
compensation (See Note 9)
|
- | - | 2,146 | - | - | 2,146 | ||||||||||||||||||
Unit based compensation expense
|
- | 268 | - | - | - | 268 | ||||||||||||||||||
Partners' capital, March 31, 2009
|
39,457 | $ | 610,699 | $ | 16,515 | $ | (961 | ) | $ | 24,817 | $ | 651,070 |
Three Months Ended March 31,
|
||||||||
2010
|
2009
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income
|
$ | 6,325 | $ | 5,301 | ||||
Adjustments to reconcile net income to net cash provided by
operating activities -
|
||||||||
Depreciation of fixed assets
|
5,862 | 6,271 | ||||||
Amortization of intangible and CO
2
assets
|
7,544 | 9,148 | ||||||
Amortization of credit facility issuance costs
|
455 | 480 | ||||||
Amortization of unearned income and initial direct costs on direct
financing leases
|
(4,449 | ) | (4,555 | ) | ||||
Payments received under direct financing leases
|
5,464 | 5,462 | ||||||
Equity in earnings of investments in joint ventures
|
(182 | ) | (1,906 | ) | ||||
Distributions from joint ventures - return on investment
|
702 | 400 | ||||||
Non-cash effect of unit-based compensation plans
|
243 | 679 | ||||||
Non-cash compensation charge
|
(1,977 | ) | 2,146 | |||||
Deferred and other tax liabilities
|
186 | 459 | ||||||
Other non-cash items
|
1,277 | (517 | ) | |||||
Net changes in components of operating assets and
liabilities (See Note 10)
|
(8,160 | ) | (20,211 | ) | ||||
Net cash provided by operating activities
|
13,290 | 3,157 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Payments to acquire fixed and intangible assets
|
(2,299 | ) | (17,076 | ) | ||||
Investments in joint ventures and other investments
|
- | (21 | ) | |||||
Other, net
|
268 | 529 | ||||||
Net cash used in investing activities
|
(2,031 | ) | (16,568 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Bank borrowings
|
130,400 | 77,600 | ||||||
Bank repayments
|
(118,900 | ) | (54,100 | ) | ||||
General partner contributions
|
37 | - | ||||||
Noncontrolling interests contributions, net of distributions
|
(2 | ) | (1 | ) | ||||
Distributions to common unitholders
|
(14,251 | ) | (13,021 | ) | ||||
Distributions to general partner interest
|
(2,328 | ) | (1,089 | ) | ||||
Other, net
|
847 | 429 | ||||||
Net cash (used in) provided by financing activities
|
(4,197 | ) | 9,818 | |||||
Net increase (decrease) in cash and cash equivalents
|
7,062 | (3,593 | ) | |||||
Cash and cash equivalents at beginning of period
|
4,148 | 18,985 | ||||||
Cash and cash equivalents at end of period
|
$ | 11,210 | $ | 15,392 |
|
·
|
Pipeline transportation of crude oil and carbon dioxide;
|
|
·
|
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 and petroleum products by trucks and barges; and
|
|
·
|
Industrial gas activities, including wholesale marketing of CO
2
and processing of syngas through a joint venture.
|
March 31, 2010
|
December 31, 2009
|
|||||||
Cash
|
$ | 809 | $ | 585 | ||||
Accounts receivable - trade
|
4,177 | 3,216 | ||||||
Other current assets
|
1,574 | 2,421 | ||||||
Fixed assets, at cost
|
124,316 | 124,276 | ||||||
Accumulated depreciation
|
(10,786 | ) | (9,139 | ) | ||||
Intangible assets, net
|
1,663 | 1,758 | ||||||
Other assets
|
984 | 1,174 | ||||||
Total assets
|
$ | 122,737 | $ | 124,291 | ||||
Accounts payable
|
$ | 2,027 | $ | 1,788 | ||||
Accrued liabilities
|
2,520 | 3,601 | ||||||
Long-term debt
|
46,400 | 46,900 | ||||||
Other long-term liabilities
|
522 | 683 | ||||||
Total liabilities
|
$ | 51,469 | $ | 52,972 |
March 31, 2010
|
December 31, 2009
|
|||||||
Crude oil
|
6,331 | 13,901 | ||||||
Petroleum products
|
35,689 | 22,150 | ||||||
Caustic soda
|
2,664 | 1,985 | ||||||
NaHS
|
3,242 | 2,154 | ||||||
Other
|
2 | 14 | ||||||
Total inventories
|
$ | 47,928 | $ | 40,204 |
March 31, 2010
|
December 31, 2009
|
|||||||||||||||||||||||||||
Weighted Amortization Period in Years
|
Gross Carrying Amount
|
Accumulated Amortization
|
Carrying Value
|
Gross Carrying Amount
|
Accumulated Amortization
|
Carrying Value
|
||||||||||||||||||||||
Customer relationships:
|
||||||||||||||||||||||||||||
Refinery services
|
5 | $ | 94,654 | $ | 44,372 | $ | 50,282 | $ | 94,654 | $ | 41,450 | $ | 53,204 | |||||||||||||||
Supply and logistics
|
5 | 35,430 | 16,615 | 18,815 | 35,430 | 15,493 | 19,937 | |||||||||||||||||||||
Supplier relationships -
|
||||||||||||||||||||||||||||
Refinery services
|
2 | 36,469 | 29,282 | 7,187 | 36,469 | 28,551 | 7,918 | |||||||||||||||||||||
Licensing Agreements -
|
||||||||||||||||||||||||||||
Refinery services
|
6 | 38,678 | 12,707 | 25,971 | 38,678 | 11,681 | 26,997 | |||||||||||||||||||||
Trade names -
|
||||||||||||||||||||||||||||
Supply and logistics
|
7 | 18,888 | 5,966 | 12,922 | 18,888 | 5,444 | 13,444 | |||||||||||||||||||||
Favorable lease -
|
||||||||||||||||||||||||||||
Supply and logistics
|
15 | 13,260 | 1,263 | 11,997 | 13,260 | 1,144 | 12,116 | |||||||||||||||||||||
Other
|
5 | 5,901 | 1,336 | 4,565 | 3,823 | 1,109 | 2,714 | |||||||||||||||||||||
Total
|
5 | $ | 243,280 | $ | 111,541 | $ | 131,739 | $ | 241,202 | $ | 104,872 | $ | 136,330 |
Year Ended December 31
|
Amortization
Expense to
|
|||
Remainder of 2010
|
$ | 19,952 | ||
2011
|
$ | 21,918 | ||
2012
|
$ | 18,261 | ||
2013
|
$ | 14,264 | ||
2014
|
$ | 11,790 | ||
2015
|
$ | 9,856 |
March 31, 2010
|
December 31, 2009
|
|||||||
Genesis Credit Facility, variable rate, due November 2011
|
$ | 332,000 | $ | 320,000 | ||||
DG Marine Credit Facility, variable rate, due July 2011
|
46,400 | 46,900 | ||||||
Total Long-Term Debt
|
$ | 378,400 | $ | 366,900 |
Date Paid
|
Per Unit
Amount
|
Limited
Partner
Interests
Amount
|
General
Partner
Interest
Amount
|
General
Partner
Incentive
Distribution
Amount
|
Total
Amount
|
||||||||||||||||
Fourth quarter 2008
|
February 2009
|
$
|
0.3300
|
$
|
13,021
|
$
|
266
|
$
|
823
|
$
|
14,110
|
||||||||||
First quarter 2009
|
May 2009
|
$
|
0.3375
|
$
|
13,317
|
$
|
271
|
$
|
1,125
|
$
|
14,713
|
||||||||||
Second quarter 2009
|
August 2009
|
$
|
0.3450
|
$
|
13,621
|
$
|
278
|
$
|
1,427
|
$
|
15,326
|
||||||||||
Third quarter 2009
|
November 2009
|
$
|
0.3525
|
$
|
13,918
|
$
|
284
|
$
|
1,729
|
$
|
15,931
|
||||||||||
Fourth quarter 2009
|
February 2010
|
$
|
0.3600
|
$
|
14,251
|
$
|
291
|
$
|
2,037
|
$
|
16,579
|
||||||||||
First quarter 2010
|
May 2010
(1)
|
$
|
0.3675
|
$
|
14,548
|
$
|
297
|
$
|
2,339
|
$
|
17,184
|
|
·
|
To our general partner – income in the amount of the incentive distributions paid in the period.
|
|
·
|
To our general partner – expense in the amount of the executive compensation expense to be borne by our general partner (See Note 9).
|
|
·
|
To our limited partners and general partner – the remainder of net income in the ratio of 98% to the limited partners and 2% to our general partner.
|
Three Months Ended
March 31,
|
||||||||
2010
|
2009
|
|||||||
Numerators for basic and diluted net income
|
||||||||
per common unit:
|
||||||||
Income attributable to Genesis Energy, L.P.
|
$ | 6,885 | $ | 5,290 | ||||
Less: General partner's incentive distribution
to be paid for the period
|
(2,339 | ) | (1,125 | ) | ||||
Add: (Credit) Expense for Class B and
Series B Awards (Note 9)
|
(1,977 | ) | 2,146 | |||||
Subtotal
|
2,569 | 6,311 | ||||||
Less: General partner 2% ownership
|
(51 | ) | (126 | ) | ||||
Income available for common unitholders
|
$ | 2,518 | $ | 6,185 | ||||
Denominator for basic per common unit:
|
||||||||
Common Units
|
39,548 | 39,457 | ||||||
Denominator for diluted per common unit:
|
||||||||
Common Units
|
39,548 | 39,457 | ||||||
Phantom Units
|
48 | 109 | ||||||
39,596 | 39,566 | |||||||
Basic net income per common unit
|
$ | 0.06 | $ | 0.16 | ||||
Diluted net income per common unit
|
$ | 0.06 | $ | 0.16 |
Pipeline
Transportation
|
Refinery
Services
|
Supply &
Logistics
|
Industrial
Gases
|
Total
|
||||||||||||||||
Three Months Ended March 31, 2010
|
||||||||||||||||||||
Segment margin
(a)
|
$ | 10,399 | $ | 13,260 | $ | 4,512 | $ | 2,494 | $ | 30,665 | ||||||||||
Maintenance capital
expenditures
|
$ | 56 | $ | 459 | $ | 110 | $ | - | $ | 625 | ||||||||||
Revenues:
|
||||||||||||||||||||
External customers
|
$ | 11,412 | $ | 31,370 | $ | 420,477 | $ | 3,272 | $ | 466,531 | ||||||||||
Intersegment
(b)
|
2,246 | (1,868 | ) | (378 | ) | - | - | |||||||||||||
Total revenues of reportable segments
|
$ | 13,658 | $ | 29,502 | $ | 420,099 | $ | 3,272 | $ | 466,531 | ||||||||||
Three Months Ended March 31, 2009
|
||||||||||||||||||||
Segment margin
(a)
|
$ | 10,225 | $ | 12,759 | $ | 5,956 | $ | 3,023 | $ | 31,963 | ||||||||||
Maintenance capital
expenditures
|
$ | 274 | $ | 493 | $ | 181 | $ | - | $ | 948 | ||||||||||
Revenues:
|
||||||||||||||||||||
External customers
|
$ | 11,315 | $ | 49,905 | $ | 188,544 | $ | 3,729 | $ | 253,493 | ||||||||||
Intersegment
(b)
|
1,093 | (1,611 | ) | 518 | - | - | ||||||||||||||
Total revenues of reportable segments
|
$ | 12,408 | $ | 48,294 | $ | 189,062 | $ | 3,729 | $ | 253,493 |
|
a)
|
A reconciliation of Segment Margin to income before income taxes for the periods presented is as follows:
|
Three Months Ended
March 31,
|
||||||||
2010
|
2009
|
|||||||
Segment Margin
|
$ | 30,665 | $ | 31,963 | ||||
Corporate general and administrative expenses
|
(5,430 | ) | (7,501 | ) | ||||
Depreciation and amortization
|
(13,406 | ) | (15,419 | ) | ||||
Net (loss) gain on disposal of surplus assets
|
(80 | ) | 218 | |||||
Interest expense, net
|
(3,204 | ) | (3,035 | ) | ||||
Non-cash credits not included in
segment margin
|
(224 | ) | (716 | ) | ||||
Other non-cash items affecting segment
margin
|
(1,305 | ) | 382 | |||||
Income before income taxes
|
$ | 7,016 | $ | 5,892 |
|
b)
|
Intersegment sales were conducted on an arm’s length basis.
|
Three Months Ended March 31,
|
||||||||
2010
|
2009
|
|||||||
Operations, general and administrative services
provided by our general partner
|
$ | 11,305 | $ | 16,380 | ||||
Sales of CO
2
to Sandhill
|
$ | 536 | $ | 677 | ||||
Petroleum products sales to Davison family businesses
|
$ | 215 | $ | 196 | ||||
Truck transportation services provided to Denbury
|
$ | 182 | $ | 1,048 | ||||
Pipeline transportation services provided to Denbury
|
$ | 1,364 | $ | 3,714 | ||||
Payments received under direct financing leases from
Denbury
|
$ | 5,464 | $ | 5,462 | ||||
Pipeline transportation income portion of direct
financing lease fees
|
$ | 1,502 | $ | 4,606 | ||||
Pipeline monitoring services provided to Denbury
|
$ | 10 | $ | 30 | ||||
Directors' fees paid to Denbury
|
$ | - | $ | 51 | ||||
CO
2
transportation services provided by Denbury
|
$ | 373 | $ | 1,240 | ||||
Crude oil purchases from Denbury
|
$ | - | $ | 1,713 |
Three Months Ended
|
||||||||
March 31,
|
||||||||
Statement of Operations
|
2010
|
2009
|
||||||
Pipeline operating costs
|
$ | 87 | $ | 33 | ||||
Refinery services operating costs
|
178 | 77 | ||||||
Supply and logistics operating costs
|
368 | 209 | ||||||
General and administrative expenses
|
(1,328 | ) | 2,510 | |||||
Total
|
$ | (695 | ) | $ | 2,829 |
Three Months Ended
March 31,
|
||||||||
2010
|
2009
|
|||||||
Decrease (increase) in:
|
||||||||
Accounts receivable
|
$ | 5,521 | $ | 3,971 | ||||
Inventories
|
(9,502 | ) | (2,851 | ) | ||||
Other current assets
|
(2,609 | ) | (2,373 | ) | ||||
Increase (decrease) in:
|
||||||||
Accounts payable
|
1,462 | (10,099 | ) | |||||
Accrued liabilities
|
(3,032 | ) | (8,859 | ) | ||||
Net changes in components of operating assets and liabilities,
net of working capital acquired
|
$ | (8,160 | ) | $ | (20,211 | ) |
Sell (Short)
Contracts
|
Buy (Long)
Contracts
|
|||||||
Designated as hedges under accounting rules:
|
||||||||
Crude oil futures:
|
||||||||
Contract volumes (1,000 bbls)
|
37 | - | ||||||
Weighted average contract price per bbl
|
$ | 82.19 | $ | - | ||||
Not qualifying or not designated as hedges
under accounting rules:
|
||||||||
Crude oil futures:
|
||||||||
Contract volumes (1,000 bbls)
|
481 | 85 | ||||||
Weighted average contract price per bbl
|
$ | 81.56 | $ | 80.58 | ||||
Heating oil futures:
|
||||||||
Contract volumes (1,000 bbls)
|
34 | - | ||||||
Weighted average contract price per gal
|
$ | 2.08 | $ | - | ||||
RBOB gasoline futures:
|
||||||||
Contract volumes (1,000 bbls)
|
13 | - | ||||||
Weighted average contract price per gal
|
$ | 2.21 | $ | - | ||||
Crude oil written calls:
|
||||||||
Contract volumes (1,000 bbls)
|
40 | - | ||||||
Weighted average premium received
|
$ | 2.33 | $ | - |
Asset Derivatives
|
|||||||||
Unaudited
|
|||||||||
Consolidated
|
|||||||||
Balance Sheets
|
Fair Value
|
||||||||
Location
|
March 31, 2010
|
December 31, 2009
|
|||||||
Commodity derivatives - futures and
call options:
|
|||||||||
Hedges designated under accounting
guidance as fair value hedges
|
Other Current Assets
|
$ | 95 | $ | 53 | ||||
Undesignated hedges
|
Other Current Assets
|
176 | 307 | ||||||
Total asset derivatives
|
$ | 271 | $ | 360 |
Liability Derivatives
|
|||||||||
Unaudited
|
|||||||||
Consolidated
|
|||||||||
Balance Sheets
|
Fair Value
|
||||||||
Location
|
March 31, 2010
|
December 31, 2009
|
|||||||
|
|||||||||
Commodity derivatives - futures and
call options:
|
|||||||||
Hedges designated under accounting
guidance as fair value hedges
|
Other Current Assets
|
$ | (166 | ) (1) | $ | (159 | ) (1) | ||
Undesignated hedges
|
Other Current Assets
|
(1,357 | ) (1) | (2,118 | ) (1) | ||||
Total commodity derivatives
|
(1,523 | ) | (2,277 | ) | |||||
Interest rate swaps designated as cash
flow hedges under accounting rules:
|
|||||||||
Portion expected to be reclassified into
earnings within one year
|
Accrued Liabilities
|
(1,266 | ) | (1,176 | ) | ||||
Portion expected to be reclassified into
earnings after one year
|
Other Long-term Liabilities
|
(346 | ) | (512 | ) | ||||
Total liability derivatives
|
$ | (3,135 | ) | $ | (3,965 | ) |
|
(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 (Loss)
|
||||||||||||||||||||||||
Amount of Gain (Loss) Recognized in Income | ||||||||||||||||||||||||
Supply & Logistics
|
Interest Expense
|
Income (Loss)
|
||||||||||||||||||||||
Product Costs
|
Reclassified from AOCI
|
Effective Portion
|
||||||||||||||||||||||
Three Months
|
Three Months
|
Three Months
|
||||||||||||||||||||||
Ended March 31,
|
Ended March 31,
|
Ended March 31,
|
||||||||||||||||||||||
2010
|
2009
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||||||||
Commodity derivatives - futures and
call options:
|
||||||||||||||||||||||||
Contracts designated as hedges
under accounting guidance
|
$ | 274 | (1) | $ | (529 | ) (1) | $ | - | $ | - | $ | - | $ | - | ||||||||||
Contracts not considered hedges
under accounting guidance
|
(552 | ) | 182 | - | - | - | - | |||||||||||||||||
Total commodity derivatives
|
(278 | ) | (347 | ) | - | - | - | - | ||||||||||||||||
Interest rate swaps designated as
cash flow hedges under
accounting guidance
|
- | - | (280 | ) | (132 | ) | (204 | ) | (128 | ) | ||||||||||||||
Total derivatives
|
$ | (278 | ) | $ | (347 | ) | $ | (280 | ) | $ | (132 | ) | $ | (204 | ) | $ | (128 | ) |
(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 $0.1 million and $1.0 million for March 31, 2010 and March 31, 2009, respectively.
|
Fair Value at March 31, 2010
|
Fair Value at December 31, 2009
|
|||||||||||||||||||||||
Recurring Fair Value Measures
|
Level 1
|
Level 2
|
Level 3
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||||||||
Commodity derivatives:
|
||||||||||||||||||||||||
Assets
|
$ | 271 | $ | - | $ | - | $ | 360 | $ | - | $ | - | ||||||||||||
Liabilities
|
$ | (1,523 | ) | $ | - | $ | - | $ | (2,277 | ) | $ | - | $ | - | ||||||||||
Interest rate swaps - Liabilities
|
$ | - | $ | - | $ | (1,612 | ) | $ | - | $ | - | $ | (1,688 | ) |
Three Months Ended
March 31,
|
||||||||
2010
|
2009
|
|||||||
Balance at beginning of period
|
(1,688 | ) | (1,964 | ) | ||||
Realized and unrealized gains (losses)-
|
||||||||
Reclassified into interest expense for settled contracts
|
280 | 132 | ||||||
Included in other comprehensive income
|
(204 | ) | (128 | ) | ||||
Balance at end of period
|
$ | (1,612 | ) | $ | (1,960 | ) | ||
|
||||||||
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 and 2009, respectively
|
$ | (21 | ) | $ | (11 | ) |
|
·
|
Overview
|
|
·
|
Available Cash before Reserves
|
|
·
|
Results of Operations
|
|
·
|
Liquidity and Capital Resources
|
|
·
|
Commitments and Off-Balance Sheet Arrangements
|
|
·
|
New Accounting Pronouncements
|
Three Months Ended
|
||||
March 31, 2010
|
||||
Net income attributable to Genesis Energy, L.P.
|
$ | 6,885 | ||
Depreciation and amortization
|
13,406 | |||
Cash received from direct financing leases not
included in income
|
1,015 | |||
Cash effects of sales of certain assets
|
304 | |||
Effects of available cash generated by equity
method investees not included in income
|
291 | |||
Cash effects of equity-based compensation plans
|
(551 | ) | ||
Non-cash tax expense
|
186 | |||
Earnings of DG Marine in excess of distributable
cash
|
(1,053 | ) | ||
Non-cash equity-based compensation benefit
|
(695 | ) | ||
Other non-cash items, net
|
(1,072 | ) | ||
Maintenance capital expenditures
|
(625 | ) | ||
Available Cash before Reserves
|
$ | 18,091 |
|
Three Months Ended March 31,
|
|||||||
2010
|
2009
|
|||||||
(in thousands)
|
||||||||
Pipeline transportation
|
$ | 10,399 | $ | 10,225 | ||||
Refinery services
|
13,260 | 12,759 | ||||||
Supply and logistics
|
4,512 | 5,956 | ||||||
Industrial gases
|
2,494 | 3,023 | ||||||
Total Segment Margin
|
$ | 30,665 | $ | 31,963 |
Three Months Ended March 31,
|
||||||||
Pipeline System
|
2010
|
2009
|
||||||
Mississippi-Bbls/day
|
23,626 | 25,364 | ||||||
Jay - Bbls/day
|
14,098 | 9,433 | ||||||
Texas - Bbls/day
|
19,355 | 29,827 | ||||||
Free State - Mcf/day
|
175,251 | 171,293 |
Three Months Ended March 31,
|
||||||||
2010
|
2009
|
|||||||
(in thousands)
|
||||||||
Crude oil tariffs and revenues from direct financing leases of crude oil pipelines
|
$
|
4,516
|
$
|
3,954
|
||||
CO
2
tariffs and revenues from direct financing leases of CO
2
pipelines
|
6,688
|
6,744
|
||||||
Sales of crude oil pipeline loss allowance volumes
|
1,339
|
799
|
||||||
Non-income payments under direct financing leases
|
1,015
|
907
|
||||||
Other miscellaneous revenues
|
176
|
178
|
||||||
Revenues from natural gas tariffs and sales
|
939
|
733
|
||||||
Natural gas purchases
|
(865
|
)
|
(654
|
)
|
||||
Pipeline operating costs, excluding non-cash charges for our equity-based compensation plans and other non-cash charges
|
(3,409
|
)
|
(2,436
|
)
|
||||
Segment margin
|
$
|
10,399
|
$
|
10,225
|
|
·
|
Crude oil tariffs and revenues from direct financing leases increased $0.6 million. Volumes transported on our crude oil pipelines decreased 7,545 barrels per day; however the majority of the decline was attributable to volume decreases on the Texas System where the impact of volume decreases has a relatively low impact on revenues. Approximately 77% of the volume on that system in the first quarter was shipped on a tariff of $0.31 per barrel. The decreased volumes were principally due to downtime during pipeline integrity testing. The downtime on the Texas System decreased revenues by $0.2 million in the first quarter of 2010. The decrease in revenue from the Texas System was offset by increased revenue from the Jay System. Volumes on the Jay System increased as a producer connected to our Jay System restarted production from wells that were shut in during 2009 due to the decline in crude oil prices. Volume fluctuations on the Mississippi System, where the incremental tariff rate is only $0.25 per barrel, are primarily a result of Denbury’s crude oil production activities.
|
|
·
|
Tariff rate increases of approximately 7.6% on our Jay and Mississippi pipelines went into effect July 1, 2009, partially mitigating the effects of lower crude oil pipeline volumes. The rate increases increased Segment Margin between the two periods by approximately $0.3 million.
|
|
·
|
An increase in revenues from sales of pipeline loss allowance volumes increased segment margin by $0.5 million. Higher market prices for crude oil increased the value of our pipeline loss allowance volumes and, accordingly, our loss allowance revenues. Average crude oil market prices increased approximately $35 per barrel, or approximately 83%, between the two quarterly periods. The price increase more than offset the decrease in pipeline loss allowance volumes of approximately 3,400 barrels.
|
|
·
|
Pipeline integrity testing and other repairs increased by $0.8 million. Pipeline integrity tests on a segment of our Texas System in the first quarter of 2010 cost approximately $0.6 million. In addition, the costs of the tests on this segment of pipeline were higher than typical due to additional testing to increase the operating pressure of the segment. This segment of pipeline will not be required to be tested again until 2015. An additional $0.2 million of repair costs were incurred for various maintenance projects throughout our pipeline systems
|
Three Months Ended March 31,
|
||||||||
2010
|
2009
|
|||||||
Volumes sold:
|
||||||||
NaHS volumes (Dry short tons "DST")
|
33,107 | 26,229 | ||||||
NaOH volumes (DST)
|
21,367 | 16,900 | ||||||
Total
|
54,474 | 43,129 | ||||||
NaHS revenues
|
$ | 24,254 | $ | 31,253 | ||||
NaOH revenues
|
4,802 | 15,548 | ||||||
Other revenues
|
2,314 | 3,104 | ||||||
Total external segment revenues
|
$ | 31,370 | $ | 49,905 | ||||
Segment margin
|
$ | 13,260 | $ | 12,759 | ||||
Average index price for NaOH per DST
(1)
|
$ | 268 | $ | 830 | ||||
Raw material and processing costs as % of
segment revenues
|
29 | % | 58 | % | ||||
Delivery costs as a % of segment revenues
|
18 | % | 9 | % |
|
(1)
|
Source: Harriman Chemsult Ltd.
|
|
·
|
An increase in NaHS sales volumes of 26%. Macroeconomic conditions in some of our markets have improved, increasing the demand for NaHS. In particular, we have experienced a noticeable increase in NaHS demand from some copper and molybdenum miners and, to a lesser extent, from some industrial customers (primarily paper and pulp manufactures and leather tanners).
|
|
·
|
An increase in NaOH sales volumes of 26%. NaOH (or caustic soda) is a key component in the provision of our services for which we receive the by-product NaHS. We are a very large consumer of caustic soda, and our economies of scale and logistics capabilities allow us to effectively market caustic soda to third parties. Most of these third parties use the caustic soda in energy-related processes within their facilities.
|
|
·
|
Index prices for caustic soda averaged approximately $830 per DST in the first quarter of 2009. Market prices of caustic soda have decreased to an average of approximately $270 per DST during the first quarter of 2010. That volatility affects the revenues and costs related to our sulfur removal services as well as our caustic soda sales activities. However, changes in caustic soda prices generally do not materially affect Segment Margin attributable to our sulfur processing services because we generally pass those costs through to our NaHS sales customers.
|
|
·
|
Aggressive management of production costs. Raw material and processing costs related to our sulfur removal services and caustic soda sales activities as a percentage of our segment revenues declined 29% between the periods. Caustic soda is the key component of those raw material and processing costs. In addition, as discussed above, we also market caustic soda. As the market price of caustic soda has fluctuated in 2009 and 2010, we have minimized our acquisition costs by better timing of our purchases and by lowering the costs of transporting caustic soda to our refinery services locations through the use of our logistics resources. We have also taken steps to reduce processing costs.
|
|
·
|
Higher delivery logistics costs. Our costs of delivering NaHS and caustic soda to our customers increased as a percentage of segment revenues by 9% between the two quarterly periods. Although our logistics costs per unit increased only modestly, our logistics costs expressed as a percentage of revenues increased by 9% (to 18%) primarily because our sales price per unit, along with our cost per unit, dropped precipitously. Quantities delivered to customers also increased. Freight demand and fuel prices increased modestly in the 2010 period as economic conditions improved, increasing demand for transportation services and the increase in crude oil prices increased the cost of fuel used in transporting these products.
|
Three Months Ended March 31,
|
||||||||
2010
|
2009
|
|||||||
(in thousands)
|
||||||||
Supply and logistics revenue
|
$
|
420,099
|
$
|
189,062
|
||||
Crude oil and products costs, excluding unrealized gains and losses from derivative transactions
|
(392,191
|
)
|
(165,317
|
)
|
||||
Operating and segment general and administrative costs, excluding non-cash charges for stock-based compensation and other non-cash expenses
|
(23,396
|
)
|
(17,789
|
)
|
||||
Segment margin
|
$
|
4,512
|
$
|
5,956
|
||||
Volumes of crude oil and petroleum products - average barrels per day
|
54,869
|
41,489
|
|
·
|
The narrowing of quality differentials and contango pricing beginning late in the fourth quarter of 2009 and extending through the first quarter of 2010;
|
|
·
|
Increased opportunities to handle the heavy end petroleum products due to increased access to transportation services (including those of DG Marine) and storage facilities; and
|
|
·
|
Lower average charter rates at DG Marine’s inland marine barge operations.
|
Three Months Ended March 31,
|
||||||||
2010
|
2009
|
|||||||
(in thousands)
|
||||||||
Revenues from CO
2
marketing
|
$ | 3,272 | $ | 3,729 | ||||
CO
2
transportation and other costs
|
(1,250 | ) | (1,323 | ) | ||||
Available cash generated by equity investees
|
472 | 617 | ||||||
Segment margin
|
$ | 2,494 | $ | 3,023 | ||||
Volumes per day:
|
||||||||
CO
2
marketing - Mcf
|
61,490 | 69,833 |
Three Months Ended March 31,
|
||||||||
2010
|
2009
|
|||||||
(in thousands)
|
||||||||
General and administrative expenses not
separately identified below
|
$ | 5,229 | $ | 5,389 | ||||
Expenses related to change in owner of our
general partner
|
1,762 | - | ||||||
Bonus plan expense
|
1,000 | 855 | ||||||
Equity-based compensation plans expense
|
280 | 364 | ||||||
Non-cash compensation expense related to
management team
|
(1,977 | ) | 2,146 | |||||
Total general and administrative expenses
|
$ | 6,294 | $ | 8,754 |
Three Months Ended March 31,
|
||||||||
2010
|
2009
|
|||||||
(in thousands)
|
||||||||
Interest expense, including commitment fees,
excluding DG Marine
|
$ | 1,924 | $ | 1,616 | ||||
Amortization of facility fees, excluding
DG Marine facility
|
163 | 163 | ||||||
Interest expense and commitment fees -
DG Marine
|
1,131 | 1,363 | ||||||
Capitalized interest
|
- | (86 | ) | |||||
Interest income
|
(14 | ) | (21 | ) | ||||
Net interest expense
|
$ | 3,204 | $ | 3,035 |
Three Months Ended
|
||||||||
March 31,
|
||||||||
2010
|
2009
|
|||||||
(in thousands)
|
||||||||
Capital expenditures for property, plant and equipment:
|
||||||||
Maintenance capital expenditures:
|
||||||||
Pipeline transportation assets
|
56 | 274 | ||||||
Supply and logistics assets
|
102 | 121 | ||||||
Refinery services assets
|
459 | 493 | ||||||
Administrative and other assets
|
8 | 60 | ||||||
Total maintenance capital expenditures
|
625 | 948 | ||||||
Growth capital expenditures:
|
||||||||
Pipeline transportation assets
|
20 | 1,816 | ||||||
Supply and logistics assets
|
104 | 11,457 | ||||||
Refinery services assets
|
- | 1,307 | ||||||
Information technology systems upgrade project
|
2,373 | - | ||||||
Total growth capital expenditures
|
2,497 | 14,580 | ||||||
Total
|
3,122 | 15,528 | ||||||
Capital expenditures attributable to unconsolidated affiliates
|
- | 21 | ||||||
Total
|
- | 21 | ||||||
Total capital expenditures
|
$ | 3,122 | $ | 15,549 |
Three Months Ended
|
||||
March 31, 2010
|
||||
(in thousands)
|
||||
Cash flows from operating activities
|
$ | 13,290 | ||
Adjustments to reconcile operating cash flows to
|
||||
Available Cash:
|
||||
Maintenance capital expenditures
|
(625 | ) | ||
Proceeds from sales of certain assets
|
224 | |||
Amortization of credit facility issuance fees
|
(455 | ) | ||
Effects of available cash generated by equity method
investees not included in cash flows from operating activities
|
(230 | ) | ||
Earnings of DG Marine in excess of distributable cash
|
(1,053 | ) | ||
Other items affecting available cash
|
(1,220 | ) | ||
Net effect of changes in operating accounts not
included in calculation of Available Cash
|
8,160 | |||
Available Cash before Reserves
|
$ | 18,091 |
|
·
|
demand for, the supply of, changes in forecast data for, and price trends related to crude oil, liquid petroleum, natural gas and natural gas liquids or “NGLs”, sodium hydrosulfide and caustic soda in the United States, all of which may be affected by economic activity, capital expenditures by energy producers, weather, alternative energy sources, international events, conservation and technological advances;
|
|
·
|
throughput levels and rates;
|
|
·
|
changes in, or challenges to, our tariff rates;
|
|
·
|
our ability to successfully identify and consummate strategic acquisitions, make cost saving changes in operations and integrate acquired assets or businesses into our existing operations;
|
|
·
|
service interruptions in our liquids transportation systems, natural gas transportation systems or natural gas gathering and processing operations;
|
|
·
|
shut-downs or cutbacks at refineries, petrochemical plants, utilities or other businesses for which we transport crude oil, natural gas or other products or to whom we sell such products;
|
|
·
|
changes in laws or regulations to which we are subject;
|
|
·
|
our inability to borrow or otherwise access funds needed for operations, expansions or capital expenditures as a result of existing debt agreements that contain restrictive financial covenants;
|
|
·
|
loss of key personnel;
|
|
·
|
the effects of competition, in particular, by other pipeline systems;
|
|
·
|
hazards and operating risks that may not be covered fully by insurance;
|
|
·
|
the condition of the capital markets in the United States;
|
|
·
|
loss or bankruptcy of key customers;
|
|
·
|
the political and economic stability of the oil producing nations of the world; and
|
|
·
|
general economic conditions, including rates of inflation and interest rates
.
|
GENESIS ENERGY, L.P.
(A Delaware Limited Partnership)
|
||
By:
|
GENESIS ENERGY, LLC, as
General Partner |
|
Date: May 10, 2010
|
By:
|
/s/
Robert V. Deere
|
Robert V. Deere
Chief Financial Officer
|
|
(a)
|
Phantom Units.
The Committee shall have the authority to determine the Employees and Directors to whom Phantom Units shall be granted, the number of Phantom Units to be granted to each such Participant, the Restricted Period, the conditions under which the Phantom Units may become vested or forfeited, which may include, without limitation, the accelerated vesting upon achievement of specified performance goals, and such other terms and conditions as the Committee may establish with respect to such Awards, including whether DERs are granted with respect to such Phantom Units.
|
|
(i)
|
DERs.
To the extent provided by the Committee, in its discretion, a grant of Phantom Units may include a tandem DER grant, which may provide that such DERs shall be paid directly to the Participant, be credited to a bookkeeping account (with or without interest at the discretion of the Committee) subject to the same vesting restrictions as the tandem Award, or be subject to such other provisions or restrictions as determined by the Committee in its discretion.
|
|
(ii)
|
Forfeiture
. Except as otherwise provided in the terms of the Phantom Units grant, upon termination of a Participant’s status as an Employee or Director, whichever is applicable, for any reason during the applicable Restricted Period, all unvested Phantom Units and any tandem DERs shall be forfeited by the Participant unless otherwise provided in a written employment agreement between the Participant and the Company or its Affiliates. The Committee may, in its discretion, waive in whole or in part such forfeiture with respect to a Participant’s Phantom Units and tandem DERs.
|
|
(iii)
|
Lapse of Restrictions
. Upon or as soon as reasonably practicable and not later than 30 days following the vesting of each Phantom Unit, the Participant shall receive from the Company an amount of cash equal to the Fair Market Value of a Unit.
|
|
(b)
|
General.
|
|
(i)
|
Awards May Be Granted Separately or Together
. Awards may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution for any other Award granted under the 2010 Plan or any award granted under any other plan of the Company or any Affiliate. Awards granted in addition to or in tandem with other Awards or awards granted under any other plan of the Company or any Affiliate may be granted either at the same time as or at a different time from the grant of such other Awards or awards.
|
|
(ii)
|
Limits on Transfer of Awards
.
|
|
(A)
|
Except as provided in (B) below, no Award and no right under any Award may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Affiliate.
|
|
(B)
|
Participants may transfer Awards by will and the laws of descent and distribution.
|
|
(iii)
|
Terms of Awards
. The term of each Award shall be for such period as may be determined by the Committee.
|
|
(iv)
|
Consideration for Grants
. Awards may be granted for such consideration, including services or such minimal consideration as may be required by law, as the Committee determines.
|
|
(v)
|
Change in Control.
Upon a Change in Control or such period prior thereto as may be established by the Committee, all Awards shall automatically vest and become payable in full. In this regard, all Restricted Periods shall terminate and all performance criteria, if any, shall be deemed to have been achieved at the maximum level.
|
|
(c)
|
Adjustments.
In the event that the Committee determines that any distribution (whether in the form of cash, Units, other securities, or other property), recapitalization, split, reverse split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Units or other securities of the Partnership, issuance of warrants or other rights to purchase Units or other securities of the Partnership, or other similar transaction or event affects the Units such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the 2010 Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and type of Units (or other securities or property) with respect to which Awards may be granted, (ii) the number and type of Units (or other securities or property) subject to outstanding Awards, and (iii) if deemed appropriate, make provision for a cash payment to the holder of an outstanding Award; provided, that the number of Units subject to any Award shall always be a whole number.
|
|
(a)
|
No Rights to Award.
No Person shall have any claim to be granted any Award under the 2010 Plan, and there is no obligation for uniformity of treatment of Participants. The terms and conditions of Awards need not be the same with respect to each recipient.
|
|
(b)
|
Withholding.
The Company or any Affiliate is authorized to withhold from any Award, from any payment due under any Award or from any compensation or other amount owing to a Participant the amount of any applicable taxes payable in respect of the grant of an Award, the lapse of restrictions thereon, or any payment under an Award or under the Plan and to take such other action may be necessary in the opinion of the Company to satisfy its withholding obligations for the payment of such taxes.
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(c)
|
No Right to Employment.
The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of the Company of any Affiliate or to remain on the Board, as applicable. Further the Company of an Affiliate may at any time dismiss a Participant from employment, free from any liability or any claim under the 2010 Plan, unless otherwise expressly provided in the 2010 Plan or in any Award agreement.
|
|
(d)
|
Governing Law
. The validity, construction, and effect of the 2010 Plan and any rules and regulations relating to the Plan shall be determined in accordance with the laws of the State of Delaware without regard to its conflict of laws principles.
|
|
(e)
|
Severability.
If any provision of the 2010 Plan or any award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the 2010 Plan or any award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the 2010 Plan or the Award, such provision shall be stricken as to such jurisdiction, person or award and the remainder of the 2010 Plan and any such Award shall remain in full force and effect.
|
|
(f)
|
Other Laws.
The Committee may refuse to pay any cash under an Award if, in its sole discretion, it determines that the payment might violate any applicable law or regulation or the rules of the principal securities exchange on which the Units are then traded.
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|
(g)
|
No Trust or Fund Created.
Neither the 2010 Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any participating Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any participating Affiliate pursuant to an award, such right shall be no greater than the right of any general unsecured creditor of the Company or any participating Affiliate.
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|
(h)
|
Headings.
Headings are given to the Sections and subsections of the 2010 Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the 2010 Plan or any provision thereof.
|
|
(i)
|
Facility Payment
. Any amounts payable hereunder to any person under legal disability or who, in the judgment of the Committee, is unable to properly manage his or her financial affairs, may be paid to the legal representative of such person, or may be applied for the benefit of such person in any manner which the Committee may select, and the Company shall be relieved of any further liability for payment for such amounts.
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(j)
|
Gender and Number
. Words in the masculine gender shall include the feminine gender, the plural shall include the singular and the singular shall include the plural.
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(k)
|
Participation by Affiliates
. With respect to the Awards made to the employees of an Affiliate, the Company shall act as agent of such participating Affiliate. In this regard, the Company shall make payment with respect to such Awards directly to the participating Affiliate, which, in turn, shall be responsible for making the payments with respect to such Awards to its eligible employees.
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(l)
|
Section 409A Compliance
. The 2010 Plan is intended to comply with Section 409A of the Internal Revenue Code (the “Code”) and any ambiguity is intended to be interpreted in a manner that complies with Code Section 409A and the Treasury Regulations and related interpretive guidance issued thereunder. The payments under the 2010 Plan are intended to be short term deferrals that are exempt from the application of Code Section 409A and the 2010 Plan will be administered and interpreted to maximize the short-term deferral exemption to Code Section 409A. The portion of any payment under the 2010 Plan that is paid within the short-term deferral period (as defined in Treasury Regulations section 1.409A-1(b)(4)) will be treated as a short-term deferral and not aggregated with other plans or payments. Payment dates provided for in the 2010 Plan are deemed to incorporate “grace periods” provided by Treasury Regulations section 1.409A-3(d) and no Participant may, directly or indirectly, designate the taxable year of any payment made under the 2010 Plan.
|
By:
|
/s/ Robert C. Sturdivant
|
||
Name: Robert C. Sturdivant
|
|||
Title: Chairman of the Board
|
|
1.
|
Grant of Phantom Units with DERs.
|
|
(a)
|
General.
The Company shall from time to time grant to Director Phantom Units pursuant to the 2010 Plan. Such grants of Phantom Units also include a grant of tandem DERs with respect to each Phantom Unit. The Company shall establish a DER bookkeeping account with respect to each Phantom Unit (“DER Account”) that shall be credited with an amount equal to any cash distributions made by the Partnership on a Unit during the period such tandem Phantom Unit is outstanding. If the participant is a Director on the date on which Partnership pays pro rata cash distributions to its unitholders, the Company shall pay the Participant on such date an amount of money equal to her/his DER Account balance, subject to any limitations provided in this Agreement or the 2010 Plan. This grant is subject to the terms and conditions of the 2010 Plan, which is incorporated herein by reference as a part of this Agreement. A copy of the 2010 Plan is attached hereto. In the event of any conflict between the terms of this Agreement and the 2010 Plan, the 2010 Plan shall control. Capitalized terms used in this Agreement but not defined herein shall have the meanings ascribed to such terms in the 2010 Plan, unless the context requires otherwise.
|
|
(b)
|
Vesting.
Except as otherwise provided in Paragraph 2 hereof, all Phantom Units and DERs granted hereunder shall vest in accordance with Schedule A as attached to each notice of grant.
|
|
2.
|
Events Occurring Prior to Vesting.
|
|
(a)
|
Death or Disability.
If, prior to vesting, Director ceases to be a Director as a result of death or disability (within the Company’s policy or determination thereof), all unvested Phantom Units and DERs granted hereunder then held by Director will automatically become fully vested upon such termination.
|
|
(b)
|
Other Termination.
If Director ceases to be a Director for any reason other than death or disability as provided in (a) above, all unvested Phantom Units and DERs granted hereunder then held by Director shall be automatically forfeited upon such termination, unless the Committee, in its discretion, waives, in whole or in part, such forfeiture.
|
|
(c)
|
Change in Control.
Notwithstanding any other provision hereof, immediately prior to the occurrence of a Change in Control, all Phantom Units and DERs granted hereunder then held by Director shall become fully vested.
|
|
3.
|
Payment.
As soon as administratively practicable and not later than 30 days after the vesting of a Phantom Unit and its tandem DER, Director shall receive from the Company, in cancellation of such Phantom Unit and DER, a cash payment equal to the sum of (i) the Fair Market Value of a Unit on the payment date and (ii) the amount of cash then credited to the DER Account with respect to such Phantom Unit.
|
|
4.
|
Withholding of Tax.
To the extent that the grant, vesting or payment of a vested Phantom Unit or DER results in the receipt of compensation by Director with respect to which the Company or Affiliate has a withholding obligation, the Company or Affiliate shall withhold such amount from any payment otherwise due under this Agreement.
|
|
5.
|
Binding Effect.
This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company or upon any person lawfully claiming under Director.
|
|
6.
|
Modification.
Except to the extent permitted by the 2010 Plan, any modification of this Agreement will be effective only if it is in writing and signed by each party whose rights hereunder are affected thereby.
|
|
7.
|
Governing Law.
This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to conflicts of laws principles thereof.
|
GENESIS ENERGY, LLC
|
||
By:
|
||
Name:
|
||
Title:
|
||
DIRECTOR
|
||
|
1.
|
Grant of Phantom Units with DERs.
|
|
(a)
|
General.
The Company shall from time to time grant to Employee Phantom Units pursuant to the 2010 Plan. Such grants of Phantom Units also include a grant of tandem DERs with respect to each Phantom Unit. The Company shall establish a DER bookkeeping account with respect to each Phantom Unit (“DER Account”) that shall be credited with an amount equal to any cash distributions made by the Partnership on a Unit during the period such tandem Phantom Unit is outstanding. If the participant is an Employee on the date on which Partnership pays pro rata cash distributions to its unitholders, the Company shall pay the Participant on such date an amount of money equal to her/his DER Account balance, subject to any limitations provided in this Agreement or the 2010 Plan. This grant is subject to the terms and conditions of the 2010 Plan, which is incorporated herein by reference as a part of this Agreement. A copy of the 2010 Plan is attached hereto. In the event of any conflict between the terms of this Agreement and the 2010 Plan, the 2010 Plan shall control. Capitalized terms used in this Agreement but not defined herein shall have the meanings ascribed to such terms in the 2010 Plan, unless the context requires otherwise.
|
|
(b)
|
Vesting.
Except as otherwise provided in Paragraph 2 hereof, all Phantom Units and DERs granted hereunder shall vest in accordance with Schedule A as attached to each notice of grant.
|
|
2.
|
Events Occurring Prior to Vesting.
|
|
(a)
|
Death or Disability.
If, prior to vesting, Employee ceases to be an employee of the Company and its Affiliates or a member of the Company acting in an employee role as a result of death or disability (within the Company’s policy or determination thereof), all unvested Phantom Units and DERs granted hereunder then held by Employee will automatically become fully vested upon such termination.
|
|
(b)
|
Other Termination.
If Employee terminates from the Company and its Affiliates or ceases to be a member acting in an employee role for any reason other than death or disability as provided in (a) above, all unvested Phantom Units and DERs granted hereunder then held by Employee shall be automatically forfeited upon such termination, unless the Committee, in its discretion, waives, in whole or in part, such forfeiture.
|
|
(c)
|
Change in Control.
Notwithstanding any other provision hereof, immediately prior to the occurrence of a Change in Control, all Phantom Units and DERs granted hereunder then held by Employee shall become fully vested.
|
|
3.
|
Payment.
As soon as administratively practicable and not later than 30 days after the vesting of a Phantom Unit and its tandem DER, Employee shall receive from the Company, in cancellation of such Phantom Unit and DER, a cash payment equal to the sum of (i) the Fair Market Value of a Unit on the payment date and (ii) the amount of cash then credited to the DER Account with respect to such Phantom Unit.
|
|
4.
|
Limitations Upon Transfer.
All rights under this Agreement shall belong to Employee and may not be transferred, assigned, pledged, or hypothecated in any way (whether by operation of law or otherwise), other than by will or the laws of descent and distribution or pursuant to a “qualified domestic relations order” (as defined by the Internal Revenue Code of 1986, as amended), and shall not be subject to execution, attachment, or similar process. Upon any attempt to transfer, assign, pledge, hypothecate, or otherwise dispose of such rights contrary to the provision in this Agreement, or the 2010 Plan, or upon the levy of any attachment or similar process upon such rights, such rights shall immediately become null and void.
|
|
5.
|
Withholding of Tax.
To the extent that the grant, vesting or payment of a vested Phantom Unit or DER results in the receipt of compensation by Employee with respect to which the Company or Affiliate has a withholding obligation, the Company or Affiliate shall withhold such amount from any payment otherwise due under this Agreement.
|
|
6.
|
Binding Effect.
This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company or upon any person lawfully claiming under Employee.
|
|
7.
|
Modification.
Except to the extent permitted by the 2010 Plan, any modification of this Agreement will be effective only if it is in writing and signed by each party whose rights hereunder are affected thereby.
|
|
|
|
8.
|
Governing Law.
This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to conflicts of laws principles thereof.
|
GENESIS ENERGY, LLC
|
||
By:
|
||
Name:
|
||
Title:
|
||
EMPLOYEE
|
||
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Genesis Energy, L.P.;
|
|
2.
|
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation, and
|
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors:
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: May 10, 2010
|
|
/s/ Grant E. Sims
|
|
Grant E. Sims
|
|
Chief Executive Officer
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Genesis Energy, L.P.;
|
|
2.
|
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation, and
|
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors:
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: May 10, 2010
|
|
/s/ Robert V. Deere
|
|
Robert V. Deere
|
|
Chief Financial Officer
|
|
(1)
|
the Partnership’s Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 as amended; and
|
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.
|
May 10, 2010
|
/s/ Grant E. Sims
|
Grant E. Sims
|
|
Chief Executive Officer,
|
|
Genesis Energy, LLC
|
|
/s/ Robert V. Deere
|
|
Robert V. Deere
|
|
Chief Financial Officer,
|
|
Genesis Energy, LLC
|