Genesis Energy, L.P. Reports First Quarter Results.HOUSTON Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; -- Genesis Energy, L.P. (AMEX AMEX See: American Stock Exchange :GEL gel: see colloid. ) announced today that net income for the first quarter of 2005 was $2,770,000, or $0.29 per unit. This compares to a loss in the 2004 period of $1,005,000, or $0.11 per unit. Mark Gorman Gorman may refer to: People with the surname Gorman
"Our pipeline transportation and CO2 wholesale distribution segments performed very well in the first quarter of 2005. We continue to take steps to take action; to move in a matter. See also: Step to improve the results from our crude oil gathering and marketing segment, but higher field costs and volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the in marketing margins continue to present challenges. During the first quarter we sold idle assets, resulting in a gain of $0.7 million. Additionally, our general and administrative expenses were reduced in the first quarter primarily due to a non-cash credit related to our employee stock appreciation rights program of $1.3 million." "Since the end of the first quarter of 2005, we acquired a 50% interest in a syngas
Syngas (from synthesis gas) is the name given to a gas mixture that contains varying amounts of carbon monoxide and hydrogen generated by the gasification of a carbon containing fuel to a gaseous product with manufacturing facility, which produces syngas (a combination of carbon monoxide carbon monoxide, chemical compound, CO, a colorless, odorless, tasteless, extremely poisonous gas that is less dense than air under ordinary conditions. It is very slightly soluble in water and burns in air with a characteristic blue flame, producing carbon dioxide; and hydrogen hydrogen (hī`drəjən) [Gr.,=water forming], gaseous chemical element; symbol H; at. no. 1; at. wt. 1.00794; m.p. −259.14°C;; b.p. −252.87°C;; density 0.08988 grams per liter at STP; valence usually +1. ) and high pressure steam. We expect this acquisition to be accretive to earnings and Available Cash before Reserves in future periods." Financial Results Genesis generated income for the first quarter of 2005 of $2.8 million, or $0.29 per unit, compared to a loss for the first quarter of 2004 of $1.0 million, or $0.11 per unit. The 2005 income included income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $2.5 million, or $0.26 per unit, and income from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. of $0.3 million, or $0.03 per unit. The 2004 loss included a loss from continuing operations of $0.8 million, or $0.09 per unit and a loss from discontinued operations of $0.2 million, or $0.02 per unit. The following table presents certain selected financial information by segment for the first quarter reporting periods for continuing operations:
Crude Oil
Gathering
and Pipeline CO2
Marketing Transportation Marketing Total
------------ -------------- ------------ ------------
(in thousands)
Three Months
Ended March 31,
2005
-----------------
Revenues:
External
customers $247,008 $6,633 $2,280 $255,921
Intersegment - 679 - 679
------------ -------------- ------------ ------------
Total revenues of
reportable
segments $247,008 $7,312 $2,280 $256,600
============ ============== ============ ============
Segment margin
excluding
depreciation and
amortization (a) $888 $2,443 $1,525 $4,856
Capital
expenditures $22 $3,676 $- $3,698
Maintenance
capital
expenditures $22 $489 $- $511
Three Months
Ended March 31,
2004
-----------------
Revenues:
External
customers $192,996 $3,263 $1,831 $198,090
Intersegment - 822 - 822
------------ -------------- ------------ ------------
Total revenues of
reportable
segments $192,996 $4,085 $1,831 $198,912
============ ============== ============ ============
Segment margin
excluding
depreciation and
amortization (a) $1,006 $1,853 $1,240 $4,099
Capital
expenditures $51 $349 $- $400
Maintenance
capital
expenditures $51 $104 $- $155
(a) Segment margin was calculated as revenues less cost of sales and
operating expenses. A reconciliation of segment margin to income
from continuing operations is presented for periods presented in
the tables at the end of this release.
Segment margin from continuing crude oil gathering and marketing activities was $0.9 million for the 2005 first quarter, a decrease of $0.1 million from 2004 levels. The primary factor decreasing segment margin between the two periods was increased field operating costs operating costs npl → gastos mpl operacionales . Increases in fuel costs as well as personnel costs could not all be passed through to producers due to competition. Pipeline transportation segment margin from continuing operations was $2.4 million for first quarter of 2005 as compared to $1.9 million for the 2004 period. Higher crude oil prices resulted in greater revenues from the sale of crude oil from volumetric volumetric /vol·u·met·ric/ (vol?u-met´rik) pertaining to or accompanied by measurement in volumes. vol·u·met·ric adj. Of or relating to measurement by volume. gains. Additionally, the 2005 quarter included segment margin from the CO2 pipeline segment constructed in 2004 and from natural gas gathering pipelines acquired during the first quarter of 2005. Segment margin from CO2 wholesale distribution activities in the 2004 period was $1.5 million as compared to $1.2 million for 2004. The additional volumetric production payment acquired in the third quarter of 2004 provided most of this margin increase. General and administrative expenses decreased by $2.4 million during the 2005 first quarter as compared to the 2004 period, principally due to an accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. related to the Partnership's stock appreciation rights plan. In the 2004 period, our unit market price increased requiring us to record a charge of $1.1 million. In 2005, the decrease in our unit price resulted in a credit to general and administrative expenses of $1.3 million. In the 2005 first quarter, we disposed dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. of idle assets for $1.3 million, generating $0.7 million of gain. The assets sold included pipelines that had been idle in 2002 and 2003. $0.3 million of this gain is reflected as discontinued operations. Interest costs were $0.2 million higher in the 2005 first quarter than the 2004 period, due to higher debt balances and increased market interest rates. Genesis paid a distribution of $0.15 per unit for the fourth quarter of 2004 in February February: see month. 2005, and announced payment of a distribution of $0.15 per unit for the first quarter of 2005 in May 2005. Genesis generated Available Cash before Reserves (a non-GAAP measure) during the first quarter of 2005 of $3.2 million and net cash flow provided by operations of $2.5 million. (Please see the accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. schedules for a reconciliation of Available Cash, a non-GAAP measure, to net cash flow provided by operations, the GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). measure.) Available Cash before Reserves Several adjustments to net income are required to calculate Available Cash before Reserves. The calculation of Available Cash before Reserves for the quarter ended March 31, 2005 is as follows:
Net income $2,770,000
Depreciation and amortization expense 1,526,000
Cash in excess of gain on asset sales 666,000
Non-cash credit for incentive
compensation plan and other non-cash
items (1,250,000)
Maintenance capital expenditures (511,000)
-----------
Available Cash before reserves $3,201,000
===========
Available Cash before Reserves (a non-GAAP liquidity measure) has been reconciled rec·on·cile v. rec·on·ciled, rec·on·cil·ing, rec·on·ciles v.tr. 1. To reestablish a close relationship between. 2. To settle or resolve. 3. to net cash flow provided by operating activities (the GAAP measure) for the three months ended March 31, 2005 in the financial tables below. Outlook Genesis expects pipeline segment margin from continuing operations for 2005 to be approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. the same as in 2004. Segment margin from the CO2 marketing operation in 2005 is expected to be greater than the 2004 amount due to the acquisition of an additional volumetric production payment in September September: see month. of 2004. Genesis expects general and administrative expenses to be lower in 2005 than in 2004 primarily due to incurring in·cur tr.v. in·curred, in·cur·ring, in·curs 1. To acquire or come into (something usually undesirable); sustain: incurred substantial losses during the stock market crash. 2. the initial costs of complying with the Sarbanes Oxley Oxley refers to several things: People
tr.v. ex·pend·ed, ex·pend·ing, ex·pends 1. To lay out; spend: expending tax revenues on government operations. See Synonyms at spend. 2. during 2004 due primarily to pipeline integrity management program expenditures on the Mississippi Mississippi, state, United States Mississippi (mĭs'əsĭp`ē), one of the Deep South states of the United States. It is bordered by Alabama (E), the Gulf of Mexico (S), Arkansas and Louisiana, with most of the border formed by Pipeline System. Genesis' earnings are likely to be impacted in future periods from volatility in its unit price and the effect of that volatility on the accounting for the stock appreciation rights plan. This non-cash expense Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) is not expected to have an adverse impact on the Partnership's ability to make or increase distributions to its Unitholders. Based on the foregoing, Genesis expects to be able to sustain its regular quarterly distribution of $0.15 per unit during 2005. Our ability to increase distributions during 2005 will depend in part on our success in developing and executing capital projects and making accretive acquisitions Accretive Acquisition An acquisition that will increase the acquiring company's EPS. Notes: As they are expected to increase the acquiring company's future earnings, these acquisitions tend to be favorable for the company's market price. , the results of our integrity management program testing, and our ability to generate sustained improvements in the gathering and marketing segment. Earnings Conference Call Genesis Energy, L.P. will broadcast its Earnings Conference Call on Wednesday Wednesday: see week. , May 4, 2005, at 10:00 a.m. Central time. This call can be accessed at www.genesiscrudeoil.com by choosing the Investor Relations Investor relations The process by which the corporation communicates with its investors. button. Listeners should go to this website at least fifteen minutes before this event to download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. 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 60 days. There is no charge to access the event. Genesis Energy, L.P. operates crude oil common carrier pipelines and is an independent gatherer and marketer of crude oil in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , with operations concentrated in Texas, Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. , Alabama Alabama, indigenous people of North AmericaAlabama (ăləbăm`ə), indigenous people of North America whose language belongs to the Muskogean branch of the Hokan-Siouan linguistic stock (see Native American languages). , Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and , and Mississippi. Genesis Energy, L.P. also operates a wholesale CO2 marketing business. This press release includes forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although Genesis believes that its expectations are based upon reasonable assumptions, it can give no assurance that its goals will be achieved. Important factors that could cause actual results to differ materially from those in the forward looking statements herein include the timing and extent of changes in commodity prices for oil, ability to obtain adequate credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities , managing operating costs, completion of capital projects on schedule and within budget, consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. of accretive acquisitions, capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. , environmental risks, government regulation, the ability of the Partnership to meet its stated business goals and other risks noted from time to time in the Partnership's Securities and Exchange Commission filings. Actual results may vary materially. We undertake no obligation to publicly update or revise any forward-looking statement. (tables to follow)
Genesis Energy, L.P.
Summary Consolidated Statements of Operations - Unaudited
(in thousands except per unit amounts and volumes)
Three Months Ended Three Months Ended
March 31, 2005 March 31, 2004
------------------- -------------------
Revenues $256,600 $198,912
Cost of sales 251,744 194,813
General & administrative
expenses 858 3,164
Depreciation and amortization
expense 1,526 1,547
Gains from disposals of
surplus assets (371) -
------------------- -------------------
OPERATING INCOME (LOSS) 2,843 (612)
Interest and other, net (355) (170)
------------------- -------------------
Income (loss) from Continuing
Operations 2,488 (782)
Income (loss) from
Discontinued Operations 282 (223)
------------------- -------------------
NET INCOME (LOSS) $2,770 $(1,005)
=================== ===================
NET INCOME (LOSS) PER COMMON
UNIT - BASIC AND DILUTED
Continuing Operations $0.26 $(0.09)
Discontinued Operations 0.03 (0.02)
------------------- -------------------
Net income (loss) Per Common
Unit - Basic and Diluted $0.29 $(0.11)
=================== ===================
Continuing Operations Volumes:
Crude oil wellhead barrels per
day 41,969 48,409
Total gathering and marketing
barrels per day 58,346 60,591
Crude oil pipeline barrels per
day 60,821 68,583
CO2 marketing Mcf per day 47,808 39,173
Genesis Energy, L.P.
Summary Consolidated Balance Sheets - Unaudited
(in thousands)
March 31, 2005 December 31, 2004
------------------- -------------------
ASSETS
Cash $3,131 $2,078
Accounts receivable 90,492 69,321
Inventories 1,797 1,866
Other current assets 3,842 4,131
------------------- -------------------
Total Current Assets 99,262 77,396
Net property 33,525 33,786
CO2 contracts 25,708 26,344
Other assets 8,162 5,628
------------------- -------------------
Total Assets $166,657 $143,154
=================== ===================
LIABILITIES AND PARTNERS'
CAPITAL
Accounts payable $95,250 $75,415
Accrued liabilities 6,651 6,523
------------------- -------------------
Total Current Liabilities 101,901 81,938
Long-term debt and other
liabilities 17,656 15,460
Minority interest 517 517
Partners' capital 46,583 45,239
------------------- -------------------
Total Liabilities and
Partners' Capital $166,657 $143,154
=================== ===================
Genesis Energy, L.P.
Summary Consolidated Statements of Cash Flows - Unaudited
(in thousands)
Three Months Ended Three Months Ended
March 31, 2005 March 31, 2004
------------------- -------------------
Net income (loss) $2,770 $(1,005)
Adjustments to reconcile net
income (loss) to cash
provided by operating
activities:
Depreciation and
amortization 1,526 1,547
Amortization of credit
facility issuance costs 93 93
Amortization of unearned
income (177) -
Cash received from direct
financing leases 297 -
Change in fair value of
derivatives 9 -
Gains on asset disposals (653) -
Other non-cash items (1,329) 1,104
Changes to components of
working capital 3 (5,342)
------------------- -------------------
Net cash provided by (used in)
operating activities 2,539 (3,603)
------------------- -------------------
Additions to property and
equipment (3,597) (400)
Proceeds from sales of assets 1,319 -
Other, net (546) -
------------------- -------------------
Net cash used in investing
activities (2,824) (400)
------------------- -------------------
Net borrowings of debt 2,200 2,900
Distributions to partners (1,426) (1,426)
Other, net 564 -
------------------- -------------------
Net cash provided by financing
activities 1,338 1,474
------------------- -------------------
Net increase (decrease) in
cash and cash equivalents 1,053 (2,529)
Cash and cash equivalents at
beginning of period 2,078 2,869
------------------- -------------------
Cash and cash equivalents at
end of period $3,131 $340
=================== ===================
Genesis Energy, L.P.
Reconciliations
SEGMENT MARGIN EXCLUDING DEPRECIATION AND AMORTIZATION RECONCILIATION
TO OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS
Three Months Ended Three Months Ended
March 31, 2005 March 31, 2004
------------------- -------------------
(in thousands)
Segment margin excluding
depreciation and amortization $4,856 $4,099
General & administrative
expenses (858) (3,164)
Depreciation and amortization
expense (1,526) (1,547)
Gains from disposals of
surplus assets 371 -
------------------- -------------------
Operating income (loss)
from continuing
operations $2,843 $(612)
=================== ===================
GAAP to Non-GAAP Financial Measure Reconciliation
AVAILABLE CASH BEFORE RESERVES RECONCILIATION
TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Three Months Ended
March 31, 2005
-------------------
(in thousands)
Net cash flow provided by operating activities
(GAAP measure) $2,539
Adjustments to reconcile net cash flow provided by
operating activities to Available Cash before
reserves:
Maintenance capital expenditures (511)
Proceeds from asset sales 1,319
Amortization of credit facility issuance costs (93)
Cash effects of stock appreciation rights plan (50)
Net effect of changes in operating accounts not
included in calculation of Available Cash
before reserves (3)
-------------------
Available Cash before reserves (non-GAAP measure) $3,201
===================
Genesis believes that investors benefit from having access to the same financial measures being utilized by management. Segment margin forms the basis of our internal financial reporting and is used by senior management in deciding how to allocate To reserve a resource such as memory or disk. See memory allocation. capital resources among business segments. We believe that investors benefit from having access to the same financial measures that our management uses in evaluating segment results. The GAAP measure most directly comparable to total segment margin is operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. . We define segment margin as revenues less costs of sales and operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . This measure is exclusive of depreciation and amortization, general and administrative expenses, any gains or losses on asset disposals. It also excludes the effects of any adjustments for the effects of derivative derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. accounting, minority interests and the cumulative effect of any accounting changes. Available Cash before Reserves is a liquidity measure used by management to compare cash flows generated by the Partnership to the cash distribution paid to the limited partners and the general partner. This is an important financial measure to the public unitholders since it is an indicator Indicator Anything used to predict future financial or economic trends. Notes: In the context of technical analysis, an indicator is a mathematical calculation based on a securities price and/or volume. The result is used to predict future prices. of the Partnership's ability to provide a cash return on their investment. Specifically, this financial measure tells investors whether or not the Partnership is generating cash flows at a level that can support a quarterly cash distribution to the partners. Lastly, Available Cash (also referred to as distributable cash flow) is the quantitative quantitative /quan·ti·ta·tive/ (kwahn´ti-ta?tiv) 1. denoting or expressing a quantity. 2. relating to the proportionate quantities or to the amount of the constituents of a compound. standard used throughout the investment community with respect to publicly traded partnerships Publicly Traded Partnership A limited partnership that also has interests traded in the equity securities market. Notes: This is also known as a master limited partnership. See also: Master Limited Partnership, Partnership, Public Company . |
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