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

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

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

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

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

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

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

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

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

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

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

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

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

Financial Results

Segment Margin

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

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

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

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

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

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

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

Other Components of Net Income

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

Earnings Conference Call

We will broadcast our Earnings Conference Call on Thursday, February 15,
2018, at 9:30 a.m. Central time (10:30 a.m. Eastern time). This call can
be accessed at www.genesisenergy.com.
Choose the Investor Relations button. For those unable to attend the
live broadcast, a replay will be available beginning approximately one
hour after the event and remain available on our website for 30 days.
There is no charge to access the event.

Genesis Energy, L.P. is a diversified midstream energy master limited
partnership headquartered in Houston, Texas. Genesis’ operations include
offshore pipeline transportation, sodium minerals and sulfur services,
marine transportation and onshore facilities and transportation.
Genesis’ operations are primarily located in Texas, Louisiana, Arkansas,
Mississippi, Alabama, Florida, Wyoming and the Gulf of Mexico.

This press release includes forward-looking statements as defined under
federal law. Although we believe that our expectations are based upon
reasonable assumptions, we can give no assurance that our goals will be
achieved. Actual results may vary materially. All statements, other than
statements of historical facts, included in this press release that
address activities, events or developments that we expect, believe or
anticipate will or may occur in the future are forward-looking
statements, and historical performance is not necessarily indicative of
future performance. Those forward-looking statements rely on a number of
assumptions concerning future events and are subject to a number of
uncertainties, factors and risks, many of which are outside our control,
that could cause results to differ materially from those expected by
management. Such risks and uncertainties include, but are not limited
to, weather, political, economic and market conditions, including a
decline in the price and market demand for products, the timing and
success of business development efforts and other uncertainties. Those
and other applicable uncertainties, factors and risks that may affect
those forward-looking statements are described more fully in our Annual
Report on Form 10-K for the year ended December 31, 2016 filed with the
Securities and Exchange Commission and other filings, including our
Current Reports on Form 8-K and Quarterly Reports on Form 10-Q. We
undertake no obligation to publicly update or revise any forward-looking
statement.

NON-GAAP MEASURES

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

Contacts

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

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