Genesis Energy, L.P. · NYSE:GEL
Genesis Energy, L.P — 2020 Citi One-on-One Midstream / Energy Infrastructure Virtual Conference
35 slides from Genesis Energy, L.P's conference presentation, August 2020
Slide 1: 2020 Citi One-on-One Midstream / Energy Infrastructure Virtual Conference
2020 Citi One-on-One Midstream / Energy Infrastructure Virtual Conference August 2020
Slide 2: Disclosures & Company Information
Disclosures & Company Information Genesis Energy, L.P. NYSE: GEL Investor Relations Contact Common Unit Market Value ~$0.8 billion(a) [email protected] (713) 860-2500 Convertible Preferred Equity ~$0.9 billion(a) Corporate Headquarters Enterprise Value ~$5.1 billion(a) 919 Milam Street, Su
Slide 3: Genesis Energy Investment Overview
Genesis Energy Investment Overview • Genesis Energy, L.P. operates a diversified collection of high-quality infrastructure assets and world-class businesses • Well positioned to navigate current operating environment in the energy markets and global economy – Approximately $650mm of available liquid
Slide 4: Key Investment Considerations
Key Investment Considerations Market Leading Businesses with High Barriers to Entry 1 • Genesis is a market leader in four critical businesses – (1) Deepwater Gulf of Mexico ("GOM") pipeline transportation, (2) Producer & marketer of U.S. natural soda ash, (3) Refinery-centric onshore terminals and
Slide 5: Market Leading Businesses / High Barriers to Entry
Market Leading Businesses / High Barriers to Entry Genesis Total LTM Offshore Pipeline Transportation Segment Margin $664 MM(a) • Practically irreplaceable integrated asset footprint focused on transporting crude oil produced from the deepwater Central Gulf of Mexico to multiple onshore 25% markets
Slide 6: Diversified & Long-Life Infrastructure Assets
Diversified & Long-Life Infrastructure Assets Key Business Fundamentals Long-Life Infrastructure Assets Offshore Pipeline Transportation • Deepwater crude oil production growth • ~2,400 miles of pipelines and platforms focused on deepwater Gulf of Mexico • Continued new developments and competitive
Slide 7: Operating Leverage with Minimal Capital Required
Operating Leverage with Minimal Capital Required Growth Drivers Operating Leverage Offshore Pipeline Transportation • Anticipated increase in Gulf of Mexico crude oil • Existing connectivity and excess capacity to capture volumes driving both near-term and long-term incremental volumes margin contri
Slide 8: Improving Financial Fundamentals & Guidance
Improving Financial Fundamentals & Guidance Current Business Segment Outlook Offshore Pipeline Sodium Minerals & Onshore Facilities & Marine Transportation Sulfur Services Transportation Transportation • Third quarter typically a heavy • Continued to see demand • Continue to see zero crude-by-rail •
Slide 9: 2020 Estimated Cash Obligations
2020 Estimated Cash Obligations • Recent announcement to reduce common unit distribution will 2020 Estimated Cash Obligations save approximately $200 million per year • Pro-forma for the distribution reduction, we estimate recurring Recurring Cash Obligations cash obligations for 2020 totaling appro
Slide 10: Unitholder Alignment / Long-Term Value Creation
Unitholder Alignment / Long-Term Value Creation Unitholder Alignment Long-Term Value Creation • NO incentive distribution rights (“IDRs”) with non-economic • Management has a track record of acquiring and developing General Partner (no sponsor) world class infrastructure assets at attractive valuati
Slide 11: Business Segment Detail
Business Segment Detail
Slide 12: Offshore Pipeline Transportation Overview
Offshore Pipeline Transportation Overview Acquired World Class Footprint in Leading North American Basin Long-Term Value Creation Stability and Future Growth • Beginning in 2010 with the acquisition of CHOPS, 1,000 Historical CHOPS & Poseidon gross daily volumes $120 management has acquired an irrep
Slide 13: Case Study: Poseidon Oil Pipeline
Case Study: Poseidon Oil Pipeline Irreplaceable Crude Oil Pipeline in the Central Gulf of Mexico • Poseidon Oil Pipeline is a high barrier to entry pipeline transporting Steady Volumes Through Commodity Cycles central Gulf of Mexico production to key markets in Louisiana – Integrated onshore with Ge
Slide 14: Buckskin Development Overview
Buckskin Development Overview Meaningful EBITDA Contribution with No Capital Requirements • Achieved first oil in June 2019; developing field with two phase I wells with target production rate of 30kbd(a) • 100% of production for the life of the Buckskin field is 100% dedicated to flow on Genesis’ S
Slide 15: Offshore Pipeline Transportation Asset Summary
Offshore Pipeline Transportation Asset Summary Leading Gulf of Mexico Midstream Service Provider • ~2,400 miles of pipelines and associated platforms primarily Deepwater to Shore Crude Oil Pipeline Solutions located in the Central Gulf of Mexico CHOPS Poseidon Eugene Island Odyssey • Leading indepen
Slide 16: Gulf of Mexico Crude Oil Production
Gulf of Mexico Crude Oil Production Continued Growth in the Deepwater Gulf of Mexico Crude Oil Production(a) • Deepwater Gulf of Mexico crude oil production has increased by ~59% since 2013 and total Gulf of Mexico crude oil production is Non-Deewater Deepwater (>1,000 ft.) Avg. Crude Price (WTI) fo
Slide 17: Central Gulf of Mexico Overview
Central Gulf of Mexico Overview Robust Inventory of Future Growth Ram Powell Petronius Stonefly Horn Mountain Delta House Nearly Headless Nick Lobster Spruance Selected Recent Developments / Key FID Katmai Bullwinkle • Caicos Field Producer First Oil Droshky • Khaleesi / Mormont Baldpate Allegheny •
Slide 18: Central Gulf of Mexico Midstream Dynamics
Central Gulf of Mexico Midstream Dynamics Uniquely Positioned with Available Capacity to Capture Additional Volumes • Uniquely positioned with maximum optionality and available capacity to CHOPS / Poseidon Available Capacity to Shore(a) provide a “highway to shore” for deepwater producers 1,000 850
Slide 19: Sodium Minerals Overview
Sodium Minerals Overview Largest North American Producer of Low Cost Natural Soda Ash • Market leading position with highly consistent cash flow profile Genesis has Largest Trona Lease Holding in U.S. and significant barriers to entry • ~4 million tons per year of natural soda ash production capacit
Slide 20: Soda Ash Market Summary
Soda Ash Market Summary Supply / Demand Balance Expected to Remain Tight over Long-Term • Turkey expansion at Kazan (startup 2017) ~2.5 million metric Historical U.S. Natural Soda Ash Pricing(a) tons per year fully absorbed by market • No significant global natural supply expected to be online for $
Slide 21: Soda Ash Demand Drivers
Soda Ash Demand Drivers Growing Global Demand (Ex. China) Driven by Emerging Middle Class • Soda ash demand is driven by a diversified set of global end Diversified Global End-Markets (%)(a)(b) markets Metals / Lithium Mining Carbonate 4% 1% • Over 75% of global demand from glass, chemicals and soap
Slide 22: Natural Soda Ash Cost Advantage
Natural Soda Ash Cost Advantage Low Cost Position Drives Stable Cash Flow Generation • Global low cost soda ash producer Natural vs. Synthetic Production(a) – Average cost to produce natural soda ash is ~50% of the cost Solvay U.S. Natural China HOU to produce synthetic soda ash Process – Synthetic
Slide 23: Granger Facility Expansion
Granger Facility Expansion Overview Granger Pre-Expansion • Genesis plans to invest ~$330 million (includes contingency) to expand its Granger soda ash facilities (the “Granger Optimization Project” or “GOP”) by approximately 750k tons per year – Anticipated construction period of 36-48 months – Ram
Slide 24: Sulfur Services Overview
Sulfur Services Overview Market Leader of NaHS Production and Leading Provider of Sulfur Removal Services • Market leading position with highly consistent cash flow profile Production Process and Sales Overview and significant barriers to entry to replicate both asset and Nat Gas NaHS Trucks marketi
Slide 25: Onshore Facilities & Transportation Overview
Onshore Facilities & Transportation Overview Integrated Asset Footprint with Exposure to Significant Refinery Demand Baton Rouge Complex Texas City Terminal Raceland Terminal Other Legacy Onshore Assets • Underpinned by take-or-pay (“ToP”) • Underpinned by ToP contracts with • Connection to Genesis
Slide 26: Asset Snapshot: Baton Rouge Complex
Asset Snapshot: Baton Rouge Complex Integrated Crude & Intermediates Logistics Platform • Integral part of day-to-day refinery logistics and feedstocks for Baton Rouge Complex Exxon Mobil's Baton Rouge refinery (4th largest U.S. refinery with 503 kbd of capacity) Port Hudson Terminal • Scenic Statio
Slide 27: Marine Transportation Overview
Marine Transportation Overview Bottom of the Cycle & High Degree of Operating Leverage • Inland barges are all asphalt capable, heated barges primarily Genesis Marine Equipment utilized in black oil service American Inland Offshore Phoenix • American Phoenix currently under term contract with invest
Slide 28: Appendix & Reconciliations
Appendix & Reconciliations
Slide 29: Corporate Information
Corporate Information Debt and Preferred Equity Profile & Corporate Structure Balance Sheet Overview Corporate Structure(a) • Committed to long-term leverage ratio of 4.00x(b) Series A Class A Class B Convertible Common Units Common Units Preferred Units • No near-term maturities (25,336,778) (122,5
Slide 30: Environmental, Social & Governance ("ESG")
Environmental, Social & Governance (“ESG”) Supporting Business Priorities & Our Investors Through ESG • Genesis is committed to operating its business in a responsible and sustainable manner – Understanding, monitoring, engaging and improving ESG metrics is central to our long-term strategy and valu
Slide 31: Balance Sheet & Credit Profile
Balance Sheet & Credit Profile Leverage Ratio & Common Unit Distribution Coverage Ratio ($ in 000s) 6/30/2020 Senior secured credit facility $1,053,000 Senior Unsecured Notes 2,379,576 Less: Outstanding inventory financing sublimit borrowings (32,300) Less: Cash and cash equivalents (4,761) (a) $3,3
Slide 32: Reconciliation: Segment Margin
Reconciliation Segment Margin ($ in 000s) 3 months ended LTM June 30, YTD 6/30/2020 2020 2020 2019 2018 Net Income (Loss) Attributable to Genesis Energy, LP ($261,880) ($326,714) ($301,805) $95,999 ($6,075) Corporate general and administrative expenses 59,512 24,867 31,359 52,755 64,683 Depreciation
Slide 33: Reconciliation: Available Cash Before Reserves
Reconciliation Available Cash Before Reserves ($ in 000s) 3 months ended LTM June 30, YTD 6/30/2020 2020 2020 2019 2018 Net income (loss) attributable to Genesis Energy, L.P. ($261,880) ($326,714) ($301,805) $95,999 ($6,075) Interest expense, net 214,815 51,618 106,583 219,440 229,191 Income tax exp
Slide 34: Reconciliation: Adjusted Debt & Adjusted Consolidated EBITDA
Reconciliation Adjusted Debt & Adjusted Consolidated EBITDA ($ in 000s) LTM Long-term debt 6/30/2020 2019 2018 2017 Senior secured credit facility $1,053,000 $959,300 $970,100 $1,099,200 Senior Unsecured Notes 2,379,576 2,469,937 2,462,363 2,598,918 Less: Outstanding inventory financing sublimit bor
Slide 35: Reconciliation: Select Items
Reconciliation Select Items ($ in 000s) 3 months ended LTM June 30, YTD 6/30/2020 2020 2020 2019 2018 Applicable to all Non-GAAP Measures Differences in timing of cash receipts for certain contractual arrangements (a) $19,785 $11,638 $16,128 ($8,478) ($6,629) Adjustment regarding direct financing le
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