Genesis Energy L.P. (GEL, Financial) filed Annual Report for the period ended 2010-12-31.
Genesis Energy L.p. has a market cap of $1.17 billion; its shares were traded at around $26.16 with a P/E ratio of 40.3 and P/S ratio of 0.6. The dividend yield of Genesis Energy L.p. stocks is 6.1%. Genesis Energy L.p. had an annual average earning growth of 8.7% over the past 10 years.
On December 28, 2010, we permanently eliminated our IDRs and converted our two percent general partner interest into a non-economic interest. In exchange for our IDRs and the 2% economic interest attributable to our general partner interest, we issued approximately 20 million common units and 7 million “Waiver Units” to the stakeholders of our general partner, less approximately 145,000 common units and 50,000 Waiver units that have been reserved for a new deferred equity compensation plan for employees. Our Waiver Units have the right to convert into common units in four equal installments in the calendar quarter during which each of our common units receives a quarterly distribution of at least $0.43, $0.46, $0.49 and $0.52, if our distribution coverage ratio (after giving effect to the then convertible Waiver Units) would be at least 1.1 times. Our distribution coverage ratio is computed as the ratio of our Available Cash before Reserves (also known as distributable cash flow) for a quarterly period to the total distribution to be paid with respect to that quarter.
On November 23, 2010, we acquired a 50% interest in Cameron Highway for approximately $330 million. Cameron Highway, a joint venture with Enterprise Products Partners, L.P. (Enterprise Products), owns and operates the largest (measured by both length and capacity) crude oil pipeline system in the Gulf of Mexico. Constructed in 2004, the Cameron Highway oil pipeline system, or CHOPS, is comprised of 380 miles of 24- and 30- inch diameter pipeline with capacity to deliver up to 500,000 barrels per day of crude oil from developments in the Gulf of Mexico to refining markets along the Texas Gulf Coast located in Port Arthur and Texas City, Texas. When we acquired our interest in Cameron Highway, its assets included CHOPS, approximately $50 million of crude oil linefill and $9 million in pumping equipment (in each case, net to acquired 50% interest). Enterprise Products owns the remaining 50% interest in, and operates, the joint venture. We financed the purchase price for the acquisition primarily with the net proceeds of approximately $119 million from an underwritten public offering of 5.2 million of our common units (including the overallotment option that the underwriters exercised in full and including our general partner s proportionate capital contribution to maintain its 2% general partner interest) at $23.58 per common unit and net proceeds of approximately $243 million from a private placement of $250 million in aggregate principal amount of 7.875% senior unsecured notes due 2018. We used $23.8 million in excess net proceeds to temporarily reduce the balance outstanding under our revolving credit agreement.
On June 29, 2010, we restructured our credit agreement. Our credit agreement now provides for a $525 million senior secured revolving credit facility, includes an accordion feature whereby the total credit available can be increased up to $650 million under certain circumstances, and matures on June 30, 2015. Among other modifications, our credit agreement now includes a $75 million sublimit tranche designed for more efficient financing of crude oil and petroleum products inventory.
We have increased our quarterly distribution rate for twenty-two consecutive quarters. On February 14, 2011, we paid a quarterly cash distribution of $0.40 (or $1.60 annually) per unit to unitholders of record as of February 2, 2011, an increase per unit of $0.0125 (or 3.2%) from the distribution in the prior quarter, and an increase of 11.1% from the distribution in February 2010. As in the past, future increases (if any) in our quarterly distribution rate will depend on our ability to execute critical components of our business strategy.
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Genesis Energy L.p. has a market cap of $1.17 billion; its shares were traded at around $26.16 with a P/E ratio of 40.3 and P/S ratio of 0.6. The dividend yield of Genesis Energy L.p. stocks is 6.1%. Genesis Energy L.p. had an annual average earning growth of 8.7% over the past 10 years.
Highlight of Business Operations:
The aggregate market value of the Class A common units held by non-affiliates of the Registrant on June 30, 2010 (the last business day of Registrant s most recently completed second fiscal quarter) was approximately $589,410,000 based on $19.15 per unit, the closing price of the common units as reported on the NYSE. For purposes of this computation, all executive officers, directors and 10% owners of the registrant are deemed to be affiliates. Such a determination should not be deemed an admission that such executive officers, directors and 10% beneficial owners are affiliates. On March 14, 2011, the Registrant had 64,575,065 Class A common units outstanding.On December 28, 2010, we permanently eliminated our IDRs and converted our two percent general partner interest into a non-economic interest. In exchange for our IDRs and the 2% economic interest attributable to our general partner interest, we issued approximately 20 million common units and 7 million “Waiver Units” to the stakeholders of our general partner, less approximately 145,000 common units and 50,000 Waiver units that have been reserved for a new deferred equity compensation plan for employees. Our Waiver Units have the right to convert into common units in four equal installments in the calendar quarter during which each of our common units receives a quarterly distribution of at least $0.43, $0.46, $0.49 and $0.52, if our distribution coverage ratio (after giving effect to the then convertible Waiver Units) would be at least 1.1 times. Our distribution coverage ratio is computed as the ratio of our Available Cash before Reserves (also known as distributable cash flow) for a quarterly period to the total distribution to be paid with respect to that quarter.
On November 23, 2010, we acquired a 50% interest in Cameron Highway for approximately $330 million. Cameron Highway, a joint venture with Enterprise Products Partners, L.P. (Enterprise Products), owns and operates the largest (measured by both length and capacity) crude oil pipeline system in the Gulf of Mexico. Constructed in 2004, the Cameron Highway oil pipeline system, or CHOPS, is comprised of 380 miles of 24- and 30- inch diameter pipeline with capacity to deliver up to 500,000 barrels per day of crude oil from developments in the Gulf of Mexico to refining markets along the Texas Gulf Coast located in Port Arthur and Texas City, Texas. When we acquired our interest in Cameron Highway, its assets included CHOPS, approximately $50 million of crude oil linefill and $9 million in pumping equipment (in each case, net to acquired 50% interest). Enterprise Products owns the remaining 50% interest in, and operates, the joint venture. We financed the purchase price for the acquisition primarily with the net proceeds of approximately $119 million from an underwritten public offering of 5.2 million of our common units (including the overallotment option that the underwriters exercised in full and including our general partner s proportionate capital contribution to maintain its 2% general partner interest) at $23.58 per common unit and net proceeds of approximately $243 million from a private placement of $250 million in aggregate principal amount of 7.875% senior unsecured notes due 2018. We used $23.8 million in excess net proceeds to temporarily reduce the balance outstanding under our revolving credit agreement.
On June 29, 2010, we restructured our credit agreement. Our credit agreement now provides for a $525 million senior secured revolving credit facility, includes an accordion feature whereby the total credit available can be increased up to $650 million under certain circumstances, and matures on June 30, 2015. Among other modifications, our credit agreement now includes a $75 million sublimit tranche designed for more efficient financing of crude oil and petroleum products inventory.
We have increased our quarterly distribution rate for twenty-two consecutive quarters. On February 14, 2011, we paid a quarterly cash distribution of $0.40 (or $1.60 annually) per unit to unitholders of record as of February 2, 2011, an increase per unit of $0.0125 (or 3.2%) from the distribution in the prior quarter, and an increase of 11.1% from the distribution in February 2010. As in the past, future increases (if any) in our quarterly distribution rate will depend on our ability to execute critical components of our business strategy.
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