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Genesis Energy L.P. Reports Operating Results (10-Q)

November 06, 2012 | About:
10qk

10qk

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Genesis Energy L.P. (GEL) filed Quarterly Report for the period ended 2012-09-30.

Genesis Energy Lp has a market cap of $2.54 billion; its shares were traded at around $32.97 with a P/E ratio of 33.3 and P/S ratio of 0.8. The dividend yield of Genesis Energy Lp stocks is 5.8%. Genesis Energy Lp had an annual average earning growth of 6.1% over the past 10 years.

Highlight of Business Operations:

Segment Margin (as described below in “Financial Measures”) increased by $13 million, or 25%, in the 2012 Quarter, as compared to the 2011 Quarter. This increase resulted from improvement in Segment Margin in our pipeline transportation, refinery services and supply and logistics segments of 45%, 6% and 25%, respectively. The contribution from our interests in certain Gulf of Mexico pipelines that we acquired in 2012 and higher crude oil tariff revenues were the primary factors increasing pipeline transportation segment margin. Results for our pipeline transportation segment were somewhat reduced during both quarters due to ongoing improvements at several dedicated fields. Improvements at those fields were substantially completed late in the 2012 Quarter. Our refinery services segment margin increased primarily as a result of increased NaHS sales volumes and operating efficiencies realized at several of our sour gas processing facilities as well as our favorable management of the acquisition and utilization of caustic soda in our, and our customers', operations. Our supply and logistics segment benefited from acquisitions and other growth initiatives completed in the second half of 2011 as well as higher volumes handled by our expanded trucking and barge fleets.

Our revenues for the nine months ended September 30, 2012 increased $515.2 million, or 23% from the nine months ended September 30, 2011. Costs and expenses increased $499 million, or 23% between the two nine month periods.

Crude oil tariff revenues of onshore crude oil pipelines increased $4.4 million primarily due to upward tariff indexing of 6.9% and 8.6% for our FERC-regulated pipelines effective in July 2011 and 2012, respectively.

Average index prices for caustic soda increased to $579 per DST in the third quarter of 2012 compared to $540 per DST during the third quarter of 2011. Those price movements affect the revenues and costs related to our sulfur removal services as well as our caustic soda sales activities. However, generally, changes in caustic soda prices do not materially affect Segment Margin attributable to our sulfur processing services because we usually pass those costs through to our NaHS sales customers. Additionally, our bulk purchase and storage capabilities related to caustic soda allow us to somewhat mitigate the effects of changes in index prices for caustic on our operating costs.

Net cash flows provided by our operating activities for the nine months ended September 30, 2012 were $142.9 million compared to $39.1 million for the nine months ended September 30, 2011. As discussed above, changes in the cash requirements related to payment for petroleum products or collection of receivables from the sale of inventory impact the cash provided by operating activities. Additionally, changes in the market prices for crude oil and petroleum products can result in fluctuations in our operating cash flows between periods as the cost to acquire a barrel of oil or products will require more or less cash. The increase in operating cash flow for the nine months ended September 30, 2012 compared to the same period in 2011 was primarily due to higher cash earnings and cash requirements to meet working capital needs.

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