Genesis Energy, L.P. Reports Third Quarter 2013 Results

  Genesis Energy, L.P. Reports Third Quarter 2013 Results

Business Wire

HOUSTON -- November 1, 2013

Genesis Energy, L.P. (NYSE: GEL) today announced its third quarter results.
Results for the quarter ended September30, 2013 included the following items:

  *We generated total Available Cash before Reserves of $43.3 million in the
    third quarter of 2013, a decrease of $2.6 million, or 6%, from the third
    quarter of 2012. Adjusted EBITDA decreased $0.1 million, or 0.2%, to $56.5
    million over the prior year quarter. Available Cash before Reserves and
    Adjusted EBITDA are non-GAAP measures that are defined and reconciled
    later in this press release to the most directly comparable GAAP financial
    measure, net income.
  *We recorded net income of $18.5 million, or $0.22 per unit for the third
    quarter of 2013, compared to $31.2 million, or $0.39 per unit, for the
    same period in 2012. The decline in net income was due to the prior year
    reversal of a provision for uncertain tax positions of $8.2 million
    combined with a $2.7 million increase in interest expense and an increase
    in current quarter expenses related to growth transactions of $3.1
    million.
  *On November14, 2013, we will pay a total quarterly distribution of $46.3
    million attributable to our financial and operational results for the
    third quarter of 2013, based on our quarterly declared distribution of
    $0.5225 per unit. Our Available Cash before Reserves provided 0.93 times
    coverage for this quarterly distribution.

Grant Sims, CEO of Genesis Energy, said, “While we had a number of items
combine to negatively impact our reported results for the quarter, we remain
confident in the fundamentals of our businesses and the positive impact a
number of our announced organic opportunities will have, especially as we move
into the second half of 2014 and continuing on into 2015 and beyond. Pro forma
Available Cash before Reserves for the third quarter of 2013, excluding the
effect of those items discussed below, would have been approximately $51.6
million and pro forma Adjusted EBITDA, again excluding those items, would have
been $64.8 million.

At the end of August 2013, we completed our acquisition of substantially all
of the assets of the downstream transportation business of Hornbeck Offshore
Services, Inc. for approximately $231 million, which we refer to as our
offshore marine transportation business and assets. That business is comprised
of nine barges and mated tug boats, principally serving refineries and storage
terminals along the Gulf Coast, Eastern Seaboard, Great Lakes and Caribbean.
These ocean going vessels have allowed us to expand our marine transportation
capabilities complementing our inland waterway operations as well as our other
crude and refined product assets. We welcome on board the new employees,
recognize them for their commitment to safe and responsible operations, and
look forward to finalizing the asset integration and realizing the full
financial contribution in future periods.

In September, we issued an additional 5.75 million units in a public offering
at a price of $47.51 per unit. We received net proceeds of approximately $264
million from the offering. Because of the equity raised, we have ample
financial flexibility to complete our announced organic projects which will
contribute in future periods.

The items in the quarter that combined to negatively impact our reported
results, we believe, are largely behind us. We increased our distributions to
our unitholders for the thirty-third consecutive quarter, twenty-eight of
which have been 10% or greater over the prior year quarter and none were less
than 8.7%.

We continue to anticipate that we will realize an increasing contribution in
the fourth quarter and 2014 from the combined effects of our recent
acquisition and our organic projects. Our two largest projects, our SEKCO
joint venture with Enterprise Products and our project around ExxonMobil’s
Baton Rouge refinery complex, will begin contributing in the second half of
2014 and accelerate into 2015. We believe we are well-positioned, given the
current available capacity in our offshore oil pipelines, to benefit in the
latter part of this decade from the dramatically accelerating level of
development activities in the deepwater Gulf of Mexico.

As a result, we believe we are very well-positioned to continue to achieve our
goals of delivering low double-digit growth in distributions, maintaining a
better than investment grade leverage ratio and delivering an increasing
coverage ratio, all without ever losing sight of our absolute commitment to
safe, reliable and responsible operations."

Financial Results

Available Cash before Reserves decreased to $43.3 million in the third quarter
of 2013 (or "2013 Quarter") as compared to $45.9 million for the third quarter
of 2012 (or “2012 Quarter”). The primary components impacting Available Cash
before Reserves are Segment Margin, corporate general and administrative
expenses (excluding certain non-cash charges), interest expense and
maintenance capital expenditures.

In the 2013 Quarter, a number of items combined to negatively impact our
operating segments.

In our supply and logistics segment, Segment Margin decreased by $7.9 million
(or 33%). Operating results were negatively impacted by $6.6 million due to
several items including (1) a decline in rail cars unloaded at our Walnut Hill
crude-by-rail unloading terminal as a result of down-time at a connected
shipper's refinery attributable to a scheduled turnaround, (2) rail car rental
and storage costs incurred in advance of completion dates on certain of our
rail projects, and (3) our decision to delay sales and retain on our balance
sheet certain hedged refined product inventory due to a precipitous drop in
the commodity margins for those products.

In our pipeline transportation segment, Segment Margin increased by $6.6
million (or 28%) even though operating results were adversely affected by $1.1
million due to (1) lower than expected throughput volumes on our Jay pipeline
system as a result of down-time at a connected shipper's refinery attributable
to a scheduled turnaround, and (2) lower than expected distributions by CHOPS
resulting from a 10-year right-of-way payment.

In our refinery services segment, Segment Margin increased by $0.2 million (or
1%) even though down-time attributable to a turnaround at one of our
significant refinery locations negatively impacted operating results by $0.6
million due to incremental costs incurred to meet our customers' demand.

Variances from the third quarter of 2012 in these components are explained as
follows:

Segment Margin

Segment Margin (a non-GAAP measure) is defined below and reconciled later in
this press release to income before income taxes. During the 2013 Quarter,
Segment Margin decreased $1.1 million from the 2012 Quarter as increases in
our pipeline transportation and refinery services segments were more than
offset by a decrease in our supply and logistics segment, as discussed below
in further detail.

Segment results for the third quarters of 2013 and 2012 were as follows:

                             
                                    Three Months Ended
                                    September 30,
                                    2013                       2012
                                    (in thousands)
Pipeline transportation             $     29,860                $    23,295
Refinery services                   19,163                      18,983
Supply and logistics                15,801                     23,651
Total Segment Margin                $     64,824               $    65,929
^(1)
                                                                     
(1) We define Segment Margin as revenues less product costs, operating
expenses (excluding non-cash charges, such as depreciation and amortization),
and segment general and administrative expenses, plus our equity in
distributable cash generated by our equity investees. In addition, our Segment
Margin definition excludes the non-cash effects of our stock appreciation
rights plan and includes the non-income portion of payments received under
direct financing leases. A reconciliation of Segment Margin to income before
income taxes is presented for periods presented in the table at the end of
this release.
                                                                     

Pipeline transportation Segment Margin increased $6.6 million, or 28%, between
the third quarter periods even though operating results were adversely
affected by approximately $1.1 million due to (1) lower than expected
throughput volumes on our Jay pipeline system as a result of down-time at a
connected shipper's refinery attributable to a scheduled turnaround, and (2)
lower than expected distributions by CHOPS resulting from a 10-year
right-of-way payment. However, pipeline transportation Segment Margin
increased overall quarter-over-quarter due to higher onshore crude oil tariff
revenues, an increased contribution from CHOPS and an increase in revenues
from onshore pipeline loss allowance volumes. Onshore crude oil tariff revenue
increased primarily due to increases in total throughput volumes, primarily on
our Jay pipeline system, as a result of additional barrels received at our
crude-by-rail unloading terminal at Walnut Hill, Florida and upward tariff
indexing on our FERC-regulated pipelines. The contribution from CHOPS
increased as 2012 improvement facility work by producers at the connected
production fields resulted in lower volumes transported on CHOPS in the 2012
Quarter. Pipeline loss allowance volumes, collected and sold, increased as a
result of an increase in barrels transported in the 2013 Quarter as compared
to the 2012 Quarter.

Refinery services Segment Margin increased $0.2 million, or 1%, between the
third quarter periods even though down-time attributable to a turnaround at
one of our significant refinery locations negatively impacted operating
results by $0.6 million due to incremental costs incurred to meet our
customers' demand. The decline in Segment Margin from that turnaround was more
than offset by increased NaHS sales volumes. Other significant components that
contributed to the fluctuation in Segment Margin include higher NaHS revenues
due to increases in the average index prices for caustic soda (which is a
component of our sales price), partially offset by the other components
referenced below. The pricing in our sales contracts for NaHS includes
adjustments for fluctuations in commodity benchmarks, freight, labor, energy
costs and government indexes.The frequency at which these adjustments are
applied varies by contract, geographic region and supply point. The mix of
NaHS sales volumes to which these adjustments applied reduced NaHS revenues in
the 2013 Quarter.

Supply and logistics Segment Margin decreased by $7.9 million, or 33%, between
the third quarter periods. In the 2013 Quarter, our operating results were
negatively impacted by approximately $6.6 million for several items including
(1) a decline in rail cars unloaded at our Walnut Hill crude-by-rail unloading
terminal as a result of down-time at a connected shipper's refinery
attributable to a scheduled turnaround, (2) rail car rental and storage costs
incurred in advance of completion dates on certain of our rail projects, and
(3) our decision to delay sales and retain on our balance sheet certain hedged
refined product inventory due to a precipitous drop in the commodity margins
for those products. Although we had hedged that refined product inventory (as
well as all of our other product inventory), we ultimately will be able to
normalize the margin we make on those refined product volumes by waiting for
the related commodity margins and recognized realized hedge losses given our
decision to delay sales, to correct to more normal levels/correlations. Our
decisions, from time to time, to carry more or less product inventory than
usual are often driven by dislocations in the prices/margins for the
underlying commodities. Crude and petroleum products volumes increased 16% in
the 2013 Quarter, however our operating costs, excluding non-cash charges,
increased 27% between the two third quarters primarily due to employee
compensation and related benefit costs. Increases in those costs are the
result of a higher number of employees from our expanded marine and trucking
fleets and the recent growth in our crude oil rail loading and unloading
operations. The overall decrease in Segment Margin was partially offset due to
the recent acquisition of our offshore marine transportation business and the
contribution from our crude oil rail loading and unloading operations
completed in the second half of 2012.

Other Components of Available Cash

Corporate general and administrative expenses included in the calculation of
Available Cash before Reserves decreased by $1 million, substantially due to
lower costs of our employee compensation programs.

Interest costs for the third quarter of 2013 increased $2.7 million from the
third quarter of 2012 primarily as a result of increased borrowings for
acquisitions and other growth projects, a portion of which were financed with
our issuance in the first quarter of 2013 of $350 million of senior unsecured
notes bearing interest at 5.75% per annum. This increase was net of
capitalized interest costs attributable to our growth capital expenditures and
investments in the SEKCO pipeline joint venture.

Several adjustments to net income are required to calculate Available Cash
before Reserves.

The calculation of Available Cash before Reserves for the quarters ended
September30, 2013 and 2012 was as follows:

                                                     
                                                       Three Months Ended
                                                       September 30,
                                                       2013        2012
                                                       (in thousands)
Net income                                             $ 18,474     $ 31,194
Depreciation and amortization                          16,066       14,838
Cash received from direct financing leases not         1,291        1,278
included in income
Cash effects of sales of certain assets                184          13
Effects of distributable cash generated by equity      5,204        5,613
method investees not included in income
Cash effects of legacy stock appreciation rights       (470     )   (466     )
plan
Non-cash legacy stock appreciation rights plan         (181     )   2,001
(benefit) expense
Expenses related to acquiring or constructing assets   3,326        228
that provide new sources of cash flow
Unrealized gain on derivative transactions excluding   (779     )   (75      )
fair value hedges
Maintenance capital expenditures                       (610     )   (701     )
Non-cash tax expense (benefit)                         350          (8,717   )
Other items, net                                       414         653      
Available Cash before Reserves                         $ 43,269    $ 45,859 
                                                                             

Other Components of Net Income

In the 2013 Quarter, we recorded net income of $18.5 million compared to $31.2
million in the 2012 Quarter.

In addition to the factors impacting Available Cash before Reserves, we
recorded non-cash income tax expense of $0.4 million in the 2013 Quarter
compared to a non-cash income tax benefit of $8.7 million in the 2012 Quarter.
The non-cash income tax benefit in the 2012 Quarter was primarily due to the
reversal of uncertain tax positions as a result of tax audit settlements and
the expiration of statutes of limitations.

Expenses related to acquiring or constructing assets that provide new sources
of cash flow increased $3.1 million between the quarterly periods due to
increases in third party costs related to business and growth transactions.

Depreciation and amortization expense increased $1.2 million between the
quarterly periods primarily as a result of our acquisition of substantially
all the assets of the downstream transportation business of Hornbeck and
recently completed internal growth projects.

In the2013Quarter, we recorded a non-cash benefit related to our legacy
stock appreciation rights plan of$0.2 million. In the2012Quarter, we
recorded a non-cash expense of$2 million. Fluctuations in the market price of
our common units were the reasons for the difference.

Distributions

We have increased our quarterly distribution rate for thirty-three consecutive
quarters. During that period, twenty-eight of those quarterly increases have
been 10% or greater year-over-year. Over the last four quarters, we have
increased the distribution rate on our common units by a total of $0.05 per
unit, or 10.6%. Distributions attributable to each quarter of 2013 (to date)
and 2012, are as follows:

                                        
                                               Per Unit
Distribution For       Date Paid
                                               Amount
2013
3rd Quarter            November 14, 2013       $ 0.5225
2nd Quarter            August 14, 2013         $ 0.5100
1st Quarter            May 15, 2013            $ 0.4975
2012
4th Quarter            February 14, 2013       $ 0.4850
3rd Quarter            November 14, 2012       $ 0.4725
2nd Quarter            August 14, 2012         $ 0.4600
1st Quarter            May 15, 2012            $ 0.4500
                                                 

Earnings Conference Call

We will broadcast our Earnings Conference Call on Friday, November1, 2013, at
8:30 am Central 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
pipeline transportation, refinery services and supply and logistics. The
Pipeline Transportation Division is engaged in the pipeline transportation of
crude oil and carbon dioxide. The Refinery Services Division primarily
processes sour gas streams to remove sulfur at refining operations. The Supply
and Logistics Division is engaged in the transportation, storage and supply
and marketing of energy products, including crude oil, refined products and
certain industrial gases. Genesis' operations are primarily located in Texas,
Louisiana, Arkansas, Mississippi, Alabama, Florida and the Gulf of Mexico.

                                              
GENESIS ENERGY, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(in thousands, except per unit amounts)
                                                 
                 Three Months Ended              Nine Months Ended
                 September 30,                   September 30,
                 2013           2012            2013           2012
REVENUES         $ 1,259,818     $ 1,041,837     $ 3,620,689     $ 3,015,985
                                                                 
COSTS AND
EXPENSES:
Costs of sales   1,207,059       987,506         3,450,348       2,857,087
General and
administrative   12,095          10,375          35,156          29,934
expenses
Depreciation
and              16,066         14,838         46,789         45,447      
amortization
OPERATING        24,598          29,118          88,396          83,517
INCOME
Equity in
earnings of      7,059           3,432           16,618          7,971
equity
investees
Interest         (12,587     )   (9,873      )   (36,282     )   (30,697     )
expense
INCOME BEFORE    19,070          22,677          68,732          60,791
INCOME TAXES
Income tax
(expense)        (596        )   8,517          (510        )   8,591       
benefit
NET INCOME       $ 18,474       $ 31,194       $ 68,222       $ 69,382    
NET INCOME PER
COMMON UNIT:
Basic and        $ 0.22          $ 0.39          $ 0.83          $ 0.90
Diluted
WEIGHTED
AVERAGE
OUTSTANDING
COMMON UNITS:
Basic and        83,878          79,901          82,361          77,410
Diluted
                                                                             

Immaterial Restatement

Revenues and cost of sales for 2012 include corrections to previously reported
quarterly and annual amounts for the three and nine months ended September30,
2012. These corrections were made to present certain sales transactions on a
gross basis that previously had been recorded on a net basis. The corrections
had no effect on previously reported operating income, net income, Segment
Margin, Adjusted EBITDA or Available Cash before Reserves.

                                                     
GENESIS ENERGY, L.P.

OPERATING DATA - UNAUDITED
                                                                             
                                 Three Months Ended     Nine Months Ended
                                 September 30,           September 30,
                                 2013       2012       2013       2012
Pipeline Transportation
Segment
Onshore crude oil pipelines
(barrels/day):
Texas                            52,557      52,767      53,629      50,327
Jay                              39,808      22,841      35,365      19,931
Mississippi                      17,768     17,942     18,561     18,377  
Onshore crude oil pipelines      110,133    93,550     107,555    88,635  
total
Offshore crude oil pipelines
(barrels/day):
CHOPS ^ (1)                      160,105     91,377      133,868     78,817
Poseidon ^(1)                    203,909     215,474     209,713     206,596
Odyssey ^(1)                     45,073      31,869      44,254      35,994
GOPL                             8,138      8,300      8,797      16,979  
Offshore crude oil pipelines     417,225    347,020    396,632    338,386 
total
CO[2] pipeline (Mcf/day)
Free State                       201,635    188,165    212,381    177,527 
                                                                             
Refinery Services Segment
NaHS (dry short tons sold)       35,946     34,372     109,233    107,321 
NaOH (caustic soda dry short     24,492     21,152     65,442     56,740  
tons sold)
                                                                             
Supply and Logistics Segment
Crude oil and petroleum          116,277    100,095    114,470    91,444  
products sales (barrels/day)
                                                                             
(1) Volumes for our equity method investees are presented on a 100% basis.
                                                                             

                                                          
GENESIS ENERGY, L.P.
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
(in thousands, except number of units)
                                                                         
                                             September 30,   December 31,
                                             2013            2012
ASSETS
Cash and cash equivalents                    $ 16,859        $ 11,282
Accounts receivable - trade, net             364,080         270,925
Inventories                                  119,122         87,050
Other current assets                         24,008         34,777      
Total current assets                         524,069         404,034
Fixed assets, net                            969,337         565,281
Investment in direct financing leases, net   153,300         157,385
Equity investees                             605,067         549,235
Intangible assets, net                       65,753          75,065
Goodwill                                     325,046         325,046
Other assets, net                            36,998         33,618      
Total assets                                 $ 2,679,570    $ 2,109,664 
LIABILITIES AND PARTNERS’ CAPITAL
Accounts payable - trade                     $ 340,531       $ 258,053
Accrued liabilities                          69,674         54,598      
Total current liabilities                    410,205         312,651
Senior secured credit facility               411,300         500,000
Senior unsecured notes                       700,804         350,895
Deferred tax liabilities                     13,625          13,810
Other long-term liabilities                  17,419          15,813
Partners' capital:
Common unitholders                           1,126,217      916,495     
Total liabilities and partners' capital      $ 2,679,570    $ 2,109,664 
                                                                         
Units Data:
Total common units outstanding               88,690,985     81,202,752  

                           
GENESIS ENERGY, L.P.
RECONCILIATION OF SEGMENT MARGIN TO INCOME BEFORE INCOME TAXES - UNAUDITED
(in thousands)
                                 
                                 Three Months Ended
                                 September 30,
                                 2013                     2012
Segment margin ^(1)              $     64,824              $    65,929
Corporate general and            (11,113         )         (9,428         )
administrative expenses
Non-cash items included in
general and administrative       (37             )         377
costs
Cash expenditures not
included in Adjusted             3,326                     228
EBITDA
Cash expenditures not            (469            )         (481           )
included in net income
Adjusted EBITDA                  56,531                    56,625
Depreciation and                 (16,066         )         (14,838        )
amortization
Interest expense, net            (12,587         )         (9,873         )
Cash expenditures not
included in Adjusted             (2,857          )         253
EBITDA or net income
Adjustment to exclude
distributions from equity
investees and include            (5,204          )         (5,613         )
equity in investees net
income
Non-cash legacy stock
appreciation rights plan         181                       (2,001         )
benefit (expense)
Other non-cash items             (928            )         (1,876         )
Income before income taxes       $     19,070             $    22,677    
                                                                          
(1) Our reconciliation of Segment Margin to income before income taxes
reflects that Segment Margin (as defined above) excludes corporate general and
administrative expenses, depreciation and amortization, interest expense,
certain non-cash items, the most significant of which are the non-cash effects
of our stock appreciation rights plan and unrealized gains and losses on
derivative transactions not designated as hedges for accounting purposes.
Items in Segment Margin not included in income before income taxes are
distributable cash from equity investees in excess of equity in earnings (or
losses) and cash payments from direct financing leases in excess of earnings.
                                                                          

                          
GENESIS ENERGY, L.P.
RECONCILIATION OF AVAILABLE CASH BEFORE RESERVES AND ADJUSTED EBITDA TO PRO
FORMA
AVAILABLE CASH BEFORE RESERVES AND PRO FORMA ADJUSTED EBITDA - UNAUDITED
(in millions)
                               
                               Three Months Ended September 30, 2013
                               Available Cash before        Adjusted EBITDA
                               Reserves
As reported ^(1)               $        43.3                 $       56.5
Effects of items
discussed above:
Pipeline transportation        1.1                           1.1
Segment Margin
Supply and logistics           6.6                           6.6
Segment Margin
Refinery services Segment      0.6                          0.6
Margin
Pro forma                      $        51.6                $       64.8
                                                                     
(1) Available Cash before Reserves and Adjusted EBITDA are reconciled to their
most directly comparable financial measures calculated in accordance with
generally accepted accounting principles in the United States of America
(GAAP) in this press release.
                                                                     

                                   
GENESIS ENERGY, L.P.
ADJUSTED DEBT-TO-PRO FORMA EBITDA RATIO - UNAUDITED                    
(in thousands)
                                                                       
                                            September 30, 2013
Senior secured credit facility              $          411,300
Senior unsecured notes (excluding           700,000
unamortized premium of $804)
Less: Outstanding inventory                 (97,100                    )
financing sublimit borrowings
Less: Cash and cash equivalents             (16,859                    )
Adjusted Debt ^(1)                          $          997,341         
                                                                       
                                            Pro Forma LTM
                                            September 30, 2013
LTM Adjusted EBITDA (as reported)           $          238,034
^ (2)
Acquisitions and material projects          67,334                     
EBITDA adjustment ^(3)
Pro Forma EBITDA                            $          305,368         
                                                                       
Adjusted Debt-to-Pro Forma EBITDA           3.27                       x
                                                                       
(1) We define Adjusted Debt as the amounts outstanding under our senior
secured credit facility and senior unsecured notes (excluding any unamortized
premiums or discounts), less the amount outstanding under our inventory
financing sublimit, less cash and cash equivalents on hand at the end of the
period.
                                                                       
(2) Last twelve months ("LTM") Adjusted EBITDA. The most comparable GAAP
measure to Adjusted EBITDA, income before income taxes, was $26.3 million for
the fourth quarter of 2012, $22.6 million for the first quarter of 2013, $27
million for the second quarter of 2013 and $19.1 million for the third quarter
of 2013. Reconciliations of Adjusted EBITDA to income before income taxes for
all periods presented are available on our website at www.genesisenergy.com.
                                                                       
(3) This amount reflects the adjustment we are permitted to make under our
credit agreement for purposes of calculating compliance with our leverage
ratio. It includes a pro rata portion of projected future annual EBITDA from
material projects (i.e. organic growth) and includes Adjusted EBITDA (using
historical amounts and other permitted amounts) since the beginning of such
calculation period attributable to each acquisition completed during such
calculation period, regardless of the date on which such acquisition was
actually completed. This adjustment may not be indicative of future results.
                                                                       

This press release includes forward-looking statements as defined under
federal law. Although we believe that our expectations are based upon
reasonable assumptions, we can give no assurance that our goals will be
achieved. Actual results may vary materially. All statements, other than
statements of historical facts, included in this 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 December31, 2012 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.

This press release and the accompanying schedules include non-generally
accepted accounting principle (non-GAAP) financial measures of available cash
and Adjusted EBITDA. The accompanying schedules provide reconciliations of
these non-GAAP financial measures to their most directly comparable financial
measures calculated in accordance with generally accepted accounting
principles in the United States of America (GAAP). Our non-GAAP financial
measures should not be considered as alternatives to GAAP measures of
liquidity or financial performance. We believe that investors benefit from
having access to the same financial measures being utilized by management,
lenders, analysts and other market participants.

Available Cash before Reserves. Available Cash before Reserves, also referred
to as distributable cash flow, is commonly used as a supplemental financial
measure by management and by external users of financial statements such as
investors, commercial banks, research analysts and rating agencies, to assess:
(1) the financial performance of our assets without regard to financing
methods, capital structures, or historical cost basis; (2) the ability of our
assets to generate cash sufficient to pay interest costs and support our
indebtedness; (3) our operating performance and return on capital as compared
to those of other companies in the midstream energy industry, without regard
to financing and capital structure; and (4) the viability of projects and the
overall rates of return on alternative investment opportunities. Because
Available Cash before Reserves excludes some items that affect net income or
loss and because these measures may vary among other companies, the Available
Cash before Reserves data presented in this press release may not be
comparable to similarly titled measures of other companies.

Available Cash before Reserves, including applicable pro forma presentations,
is a performance measure used by our management to compare cash flows
generated by us to the cash distribution paid to our common unitholders. This
is an important financial measure to our public unitholders since it is an
indicator of our ability to provide a cash return on their investments.
Specifically, this financial measure aids investors in determining whether or
not we are generating cash flows at a level that can support a quarterly cash
distribution to the partners. Lastly, Available Cash before Reserves is the
quantitative standard used throughout the investment community with respect to
publicly-traded partnerships.

Available Cash before Reserves is net income as adjusted for specific items,
the most significant of which are the addition of certain non-cash expenses
(such as depreciation and amortization), the substitution of distributable
cash generated by our equity investees in lieu of our equity income
attributable to our equity investees, the elimination of gains and losses on
asset sales (except those from the sale of surplus assets), unrealized gains
and losses on derivative transactions not designated as hedges for accounting
purposes, the elimination of expenses related to acquiring or constructing
assets that provide new sources of cash flows and the subtraction of
maintenance capital expenditures, which are expenditures that are necessary to
sustain existing (but not to provide new sources of) cash flows. Significant
maintenance capital expenditures may be recognized over the useful life of the
asset.

Adjusted EBITDA. Adjusted earnings before interest, taxes, depreciation and
amortization ("Adjusted EBITDA"), including applicable pro forma
presentations, is commonly used as a supplemental financial measure by
management and external users of our financial statements, such as investors,
commercial banks, research analysts and rating agencies. Since Adjusted EBITDA
excludes some, but not all, items that affect net income or loss and because
these measures may vary among other companies, the Adjusted EBITDA data
presented in this press release may not be comparable to similarly titled
measures of other companies.

We define Adjusted EBITDA as net income or loss plus net interest expense,
income taxes, depreciation and amortization plus other specific items, the
most significant of which are the addition of cash received from direct
financing leases not included in income, non-cash equity-based compensation
expense, expenses related to acquiring assets that provide new sources of cash
flow and the effects of available cash generated by equity method investees
not included in income. We also exclude the effect on net income or loss of
unrealized gains or losses on derivative transactions.

Contact:

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