Genesis Energy, L.p. · NYSE:GEL
Genesis Energy, L.p — J.P. Morgan - Global High Yield & Leveraged Finance Conference 2024
39 slides from Genesis Energy, L.p's conference presentation, February 2024
Slide 1: Genesis Energy, L.P.
Genesis Energy, L.P. J.P. Morgan - Global High Yield & Leveraged Finance Conference February 2024
Slide 2: Disclosures & Company Information
Disclosures & Company Information Investor Relations Contact InvestorRelations@genlp.com (713) 860-2500 Corporate Headquarters 811 Louisiana, Suite 1200 Houston, TX 77002 Forward-Looking Statements This presentation includes forward-looking statements as defined under federal law. Although we believ
Slide 3: Why Invest in Genesis?
Why Invest in Genesis? Cash Flow Profile Poised to Deliver Increasing Returns to Stakeholders Diverse Portfolio of Long-Lived, Market Leading Businesses with High Barriers to Entry and Significant Operating Leverage Healthy and Improving Balance Sheet Provides Significant Financial Flexibility Expec
Slide 4: Market Leading Businesses
Market Leading Businesses Genesis Total LTM Segment Margin $827 MM(a) Offshore Pipeline Transportation • Practically irreplaceable integrated asset footprint focused on transporting crude oil produced from the deepwater Central Gulf of Mexico to multiple onshore markets 34% • Contracts structured as
Slide 5: Key Takeaways from 4Q Earnings
Key Takeaways from 4Q Earnings Long-Term Thesis Remains In-Tact and Positive • Long-term outlook for Genesis remains constructive and totally in-tact – Reported record results in 2023 with Adjusted EBITDA(a) of $756.4 million, which exceeded the top end of our most recent full year guidance range –
Slide 6: 2024 Guidance
2024 Guidance Initial Guidance Range Provides Pathway to 2025 • Initial guidance range for Adjusted EBITDA(a) provides solid pathway to the step change in earnings anticipated in 2025 2024 Financial Guidance – Range of outcomes driven primarily by the pace at which soda ash prices recover throughout
Slide 7: Business Segment Detail
Business Segment Detail Overview
Slide 8: Offshore Pipeline Transportation – Overview
Offshore Pipeline Transportation – Overview World Class Footprint in Leading North American Basin Long-Term Value Creation Historical CHOPS & Poseidon Volumes • Beginning in 2010 with the acquisition of 50% interest in 700 +89% $120 CHOPS, management has acquired an irreplaceable industry 600 $100 l
Slide 9: 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 10: 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 is projected to increase by ~100% from 2013 – 2025E Non-Deepwater Deepwater (>1,000 ft.) Avg. Crude Price (WTI) 2,500 $120 • Production increas
Slide 11: Active Federal Leases in Gulf of Mexico
Active Federal Leases in Gulf of Mexico Proximity to Existing Leases Creates Stability and Opportunity • Inflation Reduction Act of 2022 allows Department of Interior to grant leases, easements and rights-of-way pursuant to the Outer Continental Shelf Lands Act in land areas previous withdrawn from
Slide 12: Central Gulf of Mexico Overview
Central Gulf of Mexico Overview Robust Inventory of Future Growth Ram Powell Petronius Stonefly Delta House Nearly Headless Nick Selected Recent Developments / FIDs Lobster Field Producer First Oil Spruance Katmai / Winterfell Beacon Mid-2024 Bullwinkle Katmai West • Caicos Baldpate Droshky • Khalee
Slide 13: Gulf of Mexico – Lower Carbon Intensity
Gulf of Mexico – Lower Carbon Intensity Regulatory Oversight Helps Drive Lower Carbon Footprint Gulf of Mexico Plays Leading Role(a) Significant Regulatory Oversight(b) • Barrels produced from the Gulf of Mexico are the least • The leasing and operations activities in the GOM are subject emissions i
Slide 14: NOIA Report – GHG Intensity of Gulf of Mexico
NOIA Report – GHG Intensity of Gulf of Mexico Lower Emission Intensity Should Support Continued Investment Over Time • In May 2023, the National Ocean Industries Association (NOIA) commissioned ICF to study the GHG emission intensity of U.S. oil production compared to oil produced around the world –
Slide 15: Central Gulf of Mexico Midstream Dynamics
Central Gulf of Mexico Midstream Dynamics Uniquely Positioned to Capture Additional Volumes in the Central Gulf of Mexico • Integrated system provides producers with basin leading midstream solution “highway to shore” for deepwater producers – Uniquely positioned to service the continued growth in c
Slide 16: 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 basin critical pipeline that transports Steady Volumes Through Commodity Cycles central Gulf of Mexico production to key markets in Louisiana +45% – Integrated onshore with G
Slide 17: Offshore Expansion – Project Overview
Offshore Expansion – Project Overview Expanding Basin Critical Infrastructure in the Gulf of Mexico • On May 4th, 2022 Genesis announced it would expand its existing CHOPS system and construct a new 100% owned “SYNC” pipeline to support additional volumes in the central deepwater Gulf of Mexico – Pr
Slide 18: Offshore Expansion – Commercial Support
Offshore Expansion – Commercial Support Supported by Credit Worthy Take-or-Pay Agreements and Life of Lease Dedications • Genesis entered into definitive agreements to provide downstream New Dedicated Deepwater Developments transportation services for two separate standalone deepwater upstream devel
Slide 19: Soda and Sulfur Services – Overview
Soda and Sulfur Services – Overview Two Market Leading Businesses with Vertical Integration • The Soda and Sulfur Services segment is comprised of two market leading businesses, Genesis Alkali and TDC – Genesis Energy’s second largest segment (~34% of LTM total segment margin as of YE 2023) – 2023 L
Slide 20: Soda Ash – Business Overview
Soda Ash – Business Overview Largest North American Producer of Low Cost Natural Soda Ash • Market leading soda ash position with steady cash flow profile Genesis has Largest Trona Lease Holding in U.S. and significant barriers to entry • Largest supplier of natural soda ash in the Western Hemispher
Slide 21: Soda Ash Operations
Soda Ash Operations Multiple Production Facilities Provides Customers with Volume Assurance • Genesis operates two main soda ash manufacturing sites in Green River, Wyoming – Pro-forma for the Granger expansion Genesis will be the largest soda ash producer in the Western Hemisphere with a combined ~
Slide 22: Long-Term Soda Ash Fundamentals
Long-Term Soda Ash Fundamentals Strong Market Characteristics Driving Long-Term Outlook • Soda Ash is an Essential Component with No Known Substitutes – >60% of global demand is used in the manufacturing of glass (flat, container, automobile, solar panels, etc…)(a) • Soda ash helps glass manufacture
Slide 23: Soda Ash – Market Summary
Soda Ash – Market Summary Supply / Demand Balance Expected to Remain Tight over Long-Term • U.S. demand is relatively stable Historical U.S. Natural Soda Ash Pricing(a) • Domestic natural soda ash production competitively positioned vs. $170 global high-cost synthetic production to supply export gro
Slide 24: Soda Ash – Demand Drivers
Soda Ash – Demand Drivers Growing Global Demand (Ex. China) Driven by Emerging Middle Class & Green Initiatives • Soda ash demand is driven by a diversified set of global end 2023 Global End-Markets (%)(a)(b) markets Lithium Metals / Carbonate Mining • Approximately 85% of global demand from glass,
Slide 25: Natural Soda Ash Advantages
Natural Soda Ash Advantages Low-Cost Position and Lower Carbon Footprint Provide Competitive Advantages • Genesis is a low-cost producer of natural soda ash Natural vs. Synthetic Production(a) – Synthetic production is ~70% of global supply but more than 2x as expensive to produce when compared to U
Slide 26: Granger Facility Expansion
Granger Facility Expansion Project Overview December 2021 • The Granger soda ash facility originally opened in 1976 as dry ore mine producing ~1.3 million tons/yr. – Converted to inefficient solution mine operation in 2011 with only ~500k tons/yr. of topside evaporative capacity • Granger expansion
Slide 27: Sulfur Services – Business Overview
Sulfur Services – Business Overview Market Leader of NaHS Production and Leading Provider of Sulfur Removal Services • Produce sodium hydrosulfide (“NaHS”) through proprietary Sales by Industry(a) process reacting high hydrogen sulfide (“H2S”) gas with Caustic Soda (“NaOH”) • Sour “Gas Processing” u
Slide 28: Facilitating Lower Refinery Emissions
Facilitating Lower Refinery Emissions NaHS Technology Helping Reduce Host Refinery and End Customer Emissions • Proprietary technology used to facilitate the eco-friendly NaHS Production Process removal of sulfur entrained in crude oil and its finished refined High H2S products Gas Stream Chlor-Alka
Slide 29: Marine Transportation – Overview
Marine Transportation – Overview Improving Fundamentals & High Degree of Operating Leverage • Inland barges are mostly all asphalt capable, heated barges Genesis Marine Equipment primarily utilized in black oil service (95%) American Inland Offshore • Business operates with largely fixed costs and a
Slide 30: 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 • Integral part of ExxonMobil’s Baton • Connection to Genesis owned • Connection to Genesis own
Slide 31: Appendix & Reconciliations
Appendix & Reconciliations
Slide 32: Corporate Information
Corporate Information Debt and Preferred Equity Profile & Corporate Structure Balance Sheet Overview Corporate Structure(a) • Committed to long-term leverage ratio(b) at or near 4.00x Series A Class A Class B Convertible • 4Q 2023 leverage ratio(b) of 3.96x Common Units Common Units Preferred Units
Slide 33: Sustainability
Sustainability Supporting Business Priorities & Our Investors Through Sustainability • Genesis is committed to operating its business in a responsible and sustainable manner – Released inaugural sustainability report in May 2023 – Issued 2022 sustainability report in December 2023 – Understanding, m
Slide 34: Actively Participating in Green Activities
Actively Participating in Green Activities Helping Facilitate the Energy Transition & Lower Emission Activities Soda & Sulfur Services • Our soda ash business should increasingly participate in multiple renewable energy themes moving forward – Demand for soda ash driven by the production of new LEED
Slide 35: Balance Sheet & Credit Profile
Balance Sheet & Credit Profile Leverage Ratio & Common Unit Distribution Coverage Ratio ($ in 000s) 12/31/2023 Senior secured credit facility $298,300 Senior unsecured notes, net of debt issuance costs, discount and premium 3,062,955 Less: Outstanding inventory financing sublimit borrowings (19,300)
Slide 36: Reconciliation
Reconciliation Segment Margin ($ in 000s) YTD 2023 2022 2021 2020 2019 Net Income (Loss) Attributable to Genesis Energy, LP $117,720 $75,457 ($165,067) ($416,678) $95,999 Corporate general and administrative expenses 73,876 71,820 61,287 51,457 52,755 Depreciation, depletion, amortization and accret
Slide 37: Reconciliation
Reconciliation Available Cash Before Reserves ($ in 000s) 2023 2022 2021 2020 2019 Net income (loss) attributable to Genesis Energy, L.P. $117,720 $75,457 ($165,067) ($416,678) $95,999 Interest expense 244,663 226,156 233,724 209,779 219,440 Income tax expense (benefit) (19) 3,169 1,670 1,327 655 De
Slide 38: Reconciliation
Reconciliation Adjusted Debt & Adjusted Consolidated EBITDA ($ in 000s) Long-term debt 2023 2022 2021 2020 2019 Senior secured credit facility $298,300 $205,400 $49,000 $643,700 $959,300 Senior unsecured notes, net of debt issuance costs, discount and premium 3,062,955 2,856,312 2,930,505 2,750,016
Slide 39: Reconciliation
Reconciliation Select Items ($ in 000s) 2023 2022 2021 2020 2019 Applicable to all Non-GAAP Measures Differences in timing of cash receipts for certain contractual arrangements (a) $56,341 $51,102 $15,482 $40,848 ($8,478) (b) Distributions from unrestricted subsidiaries not included in income - 32,0
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