Investor Presentation
November 2014
Risks and Forward-Looking Statements
This presentation includes forward looking statements within the meaning of Section 21A of the
Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934 as amended. Except
for the historical information contained herein, the matters discussed in this presentation include
forward looking statements. These forward looking statements are based on the Partnership’s current
assumptions, expectations and projections about future events, and historical performance is not
necessarily indicative of future performance. Although Genesis believes that the assumptions
underlying these statements are reasonable, investors are cautioned that such forward-looking
statements are inherently uncertain and necessarily involve risks that may affect Genesis’ business
prospects and performance, causing actual results to differ materially from those discussed during
this presentation. Genesis’ actual current and future results may be impacted by factors beyond its
control. Important risk factors that could cause actual results to differ materially from Genesis’
expectations are discussed in Genesis’ most recently filed reports with the Securities and Exchange
Commission. Genesis undertakes no obligation to publicly update any forward-looking statements,
whether as a result of new information or future events.
This presentation may include non-GAAP financial measures. Please refer to the presentations of the
most directly comparable GAAP financial measures and the reconciliations of non-GAAP financial
measures to GAAP financial measures included in the end of this presentation.
‐2‐
Genesis Energy, L.P.
Partnership Overview
Investment Highlights
 Master Limited Partnership (NYSE: GEL)
 Integrated asset portfolio creates opportunity
across the crude oil production / refining
value chain
 L.P. market capitalization of ~$4.5 billion
 Fixed margin businesses, limited commodity
price exposure
 Integrated portfolio of assets focused on
providing services to:
 Handle crude oil upstream of refineries
 Substantial footprint of increasingly integrated
assets and service capabilities
 Perform sulfur removal and other services
inside refineries
 Significant organic projects underway in and
around existing assets
 Handle products (primarily intermediate and
heavies) downstream of refineries
 Disciplined financial policy
 Culture committed to health, safety and
environmental stewardship
 Competitive equity cost of capital with no GP
incentive distribution rights (IDRs)
‐3‐
Genesis’ Business Proposition
 Integrated asset & services portfolio creates opportunities with producers and refineries
Asset / Services Integration
CO2 Pipelines
Producers
Refinery
Services
Supply & Logistics
Crude Oil
Trucks
Terminals
Crude Pipelines
Supply & Logistics
Refined Products
Trucks
Refineries
Marine
Terminals
Marine
Sulfur Removal
Rail
Rail
NaHS Markets
‐4‐
Genesis’ Operational Footprint
Pipeline Transportation
Refinery Services
Supply & Logistics
$163 million (44%)
$84 million (22%)
$127 million (34%)
• Transportation & supply of crude oil and CO2,
connecting producers to large interstate pipelines and
refineries
• Refinery sulfur removal services and sales of byproducts at 10 owned and / or operated facilities; 4
marketing agreements
• ~500 miles of oil pipelines in TX, MS, FL, AL & LA
• Owned & leased NaHS and NaOH terminals in Gulf
Coast, Midwest, Montana, British Columbia, Utah and
South America
• ~1,200 miles of offshore pipelines, primarily servicing
deepwater production
• Crude oil services and logistics, refined products services
and logistics, marine transportation and rail services
• Crude Oil: ~1.8 mmbbl storage and ~135 trucks & facilities
along Gulf Coast
• Refined Products: ~1.5 mmbbl storage and ~150 trucks
• Inland marine operations: 62 “black oil” barges and 24
push-boats; Offshore marine operations: 9 boats / 9
barges
• Owned & leased logistical assets: trucks, railcars,
barges and ships
• ~270 miles of CO2 pipe including Free State and NEJD
WV
MT
NY
WY
UT
CO
Ouachita
River
Mississippi
River
Red River
AZ
Jackson
Shreveport
Midland
Natchez
Liberty
Wink
Walnut Hill
Port
Arthur
Houston
Pipelines
CO2
Refinery Services
Crude Oil
Owned / Operated Facilties
Marketing Agreements
Refineries - Products
Product Tanks
Lake
Charles
TX City
NaHS/NaOH Terminals
Supply & Logistics
Crude Oil Operations
Crude Oil Tanks
Baton
Rouge
ODYSSEY
EUGENE
ISLAND
CHOPS
Corpus
Christi
Marine Transportation
SEKCO
Rail Services
CO2 Facilities
Note: LTM Segment Margin pro forma for Material Projects and Acquisitions as of 9/30/14.
‐5‐
Mobile
POSEIDON
`
GA
Limited Commodity Price Exposure
Business Segment
Pipeline Transportation
Refinery Services
Supply & Logistics
General Commodity Exposure
Mitigant
• Tariff-based, fee income (except for PLA
volumes)
• Fixed lease payments from DNR for
NEJD CO2 system through 2028
No Direct Exposure
• ~85% of our operating expense is cost of
NaOH
• ~60% of NaHS sales contracts indexed to
NaOH prices
• Remaining 40% have short-term
mechanism to change pricing in response
to changes in operating costs
NaHS (Long)
NaOH (Short)
• Typically back-to-back monthly purchase
and sales contracts for crude oil
• On average, carry low level (<200 kbbl)
crude inventory
• Refined products held for blending are
hedged to remove volatility in underlying
value but subject to marked-to-market
accounting
• No “paper” trading
• Tight controls under board approved risk
management policy (VAR ≤ $2.5 mm)
Crude Oil
Refined Products
‐6‐
Existing Businesses
Pipeline Transportation – Onshore
• Stable cash flows through pipeline tariffs combined with future volume growth
• Provides a foothold for growth of crude oil supply and logistics segment
Onshore Crude Oil Pipelines
CO2 Pipelines
TX System
MS System
Jay System
LA System
Length (miles)
Existing 8” – 90
Looped 18” – 19
235
135
17
183
86
Capacity
Existing 8” – ~60 kbd
Looped 18” – ~275 kbd
~45 kbd
~150 kbd
~350 kbd
N/A
~500 mmcfd
Average Daily
Volume (a)
~62 kbd
~15 kbd
~23 kbd
~18 kbd
$5.2 mm per
quarter
~145 mmcfd
Delivery
Points
Marathon’s TX City
refinery, Houston
Refining and Texas
City Oil Terminal
Interconnect w/ Capline
to Midwest refiners
Shell’s Mobile refinery
& PAA’s Mobile
terminal
ExxonMobil’s Anchorage
Tank Farm
Denbury’s Phase I
fields in Mississippi
and Louisiana
Denbury’s Phase II
fields in Mississippi
Jackson
NEJD
Free State
Free State
WY
Jay System
Casper
NEJD
Louisiana
System
Mississippi
System
Mobile
Baton Rouge
Houston
Texas
System
Port Arthur
Crude Oil Pipeline
Looped 18” Pipeline
CO2 Pipeline
(a)
Average daily volume for 3Q 2014.
‐8‐
Pipeline Transportation – Offshore
• Positioned to provide deepwater producers maximum optionality with access to both Texas & Louisiana markets
• Potential for meaningful volume growth with increased development drilling in dedicated, currently connected fields
Gulf of Mexico Crude Oil Pipelines
CHOPS
Poseidon
SEKCO
Odyssey
Eugene Island
Length (miles)
380
367
149
120
183
Capacity (a)
~500 kbd
~350 kbd
~115 kbd
~200 kbd
~39 kbd
Average Daily
Volume (b)
~186 kbd
~214 kbd
0
~51 kbd
~8 kbd
Delivery
Points
Texas City and Port Arthur
Refineries
Shell Tankage in Houma, LA
Poseidon SMI-205 Platform
Delta Loop 20” (Venice, LA)
Caillou Island, LA
Ownership
Interest
50%
28%
50%
29%
23% undivided joint interest,
Two 100% owned laterals
Port Arthur
Houma
Houston
Odyssey
TX City
Eugene Island
CHOPS
Poseidon
SEKCO
(a)
(b)
Capacity figures represent gross system capacity except Eugene Island, which represents Genesis net capacity in undivided joint interest system.
Average daily volume for 3Q 2014. All average daily volume represents gross system daily volume except Eugene Island, which represents volume shipped by GEL on system.
‐9‐
Pipeline Transportation – Offshore
Gulf of Mexico Development
• Provides our producer and refinery partners with an integrated midstream solution and maximum optionality
• Gulf of Mexico activity continues to increase from moratorium levels
Gulf of Mexico Major Connected Fields / Uncommitted Prospects
Port Arthur
Houma
TX City
Odyssey
Petronius
Ram Powell
Poseidon
CHOPS
Eugene Island
Bushwood
Danny
Key
North Platte
Guadalupe
SEKCO
Tiber
Kaskida
3rd Party Laterals
Major Connected Fields /
Production Hubs
Uncommitted Prospects
Lobster
Megalodon
Candy Bars
Prince
Healey
Bald Pate
Allegheny
Angel Fire Hornet
Front Runner
Kilchurn
Knotty Head / Stampede
Jake
Ness
K2
Fresian
Tahiti
Ticonderoga
Holstein Shenzi
Atlantis
Caesar/Tonga
Constitution
Ardennes
Heidelberg Mad Dog
Shenandoah
Coronado
Yucatan
Tucker
Bonanza
Bioko
Moccasin
Buckskin
Hadrian
Lucius
Logan
Phobos
Hummer
Jack/St. Malo
Note: Highlighted prospects per PennEnergy Research (discoveries either in development or appraisal stages) and BSEE current deepwater activity report.
‐10‐
Horn Mountain
Refinery Services
• Refinery sulfur removal and sales of by-products at 10 owned and/or operated facilities; 4 marketing agreements
• Owned & leased NaHS and NaOH terminals in Gulf Coast, Midwest, Montana, British Columbia, Utah and South America
• Lease ~350 rail cars, 6 chemical barges
• Purchase / Consume / Handle 350k – 400k DST of NaOH per year
Refinery Services NaHS and NaOH Terminals and Facilities
MT
NY
Tulsa
WV
Ouachita
River
WY
Red River
Midland
Shreveport
GA
AZ
Houston
TX City
Refinery Services
NaHS Facilities (Owned / Operated)
Port
Arthur
Corpus
Christi
NaHS/NaOH Terminals
Refinery Services Marketing Agreement
‐11‐
Baton
Rouge
Lake
Charles
Refinery Services Process Overview
 Sour “Gas Processing” units inside
the fence at 10 refineries
– Produce NaHS through proprietary
process utilizing large amounts of
Caustic Soda (NaOH)
Nat Gas
H 2S
Nat Gas
Refiners
– Take NaHS in kind as compensation
for services
 Sell NaHS primarily to large mining,
pulp & paper and refinery customers:
NaHS Unit
“Gas Processing”
Trucks
Terminals
Barges & Ship
Rail Cars
(48%)
Mining (57%)
(33%)
Pulp & Paper (26%)
Others (17%)
Chemical
– Mining (NaHS): Copper / Moly ore
separation
Tanning
Environmental
– Pulp & Paper (NaHS/NaOH):
Pulp/Fiber process
– ~85% of our operating expense is
cost of NaOH
– Approximately 60% of the Company’s
sales contracts are indexed to caustic
soda prices (cost-plus)
– Remaining 40% of contracts are
adjustable (typically 30 days advance
notice)
NaHS Service Units
Refinery Operator
Phillips 66
Holly Refinery
Holly Refinery
Citgo
Delek
Chemtura
Albemarle
Ergon Refinery
Cross Oil
Ergon Refinery
Note: Customer % breakout represents sales volumes for 2Q 2014.
‐12‐
Location
Westlake, LA
Tulsa, OK
Salt Lake City, UT
Corpus Christi, TX
El Dorado, AR
El Dorado, AR
Magnolia, AR
Vicksburg, MS
Smackover, AR
Newell, WV
Relationship
History
20 Years
2 Years
3 Years
10 Years
30 Years
10 Years
30 Years
30 Years
20 Years
30 Years
Capacity
DST
110,000
24,000
21,000
20,000
15,000
10,000
8,000
6,000
3,000
2,800
Supply & Logistics
• Crude oil services and logistics, refined products services and logistics, marine transportation and rail services
• 135 trucks / 135 trailers in crude oil trucking fleet. Additional 150 trucks / 250 trailers in refined products fleet
• Inland marine operations (brown water) – own 66 black oil barges and 25 push-boats. 9 push-boats on order for arrival
starting in 4Q 2014 with periodic deliveries through 2016; 8 barges on order: 4 for arrival in 3Q / 4Q 2015 and 4 in 1Q / 2Q
2016
• Offshore marine operations (blue water) – own 9 boats and 9 coastwise barges acquired in recent Hornbeck acquisition
• ~1.8 mmbbl crude storage and ~1.5 mmbbl refined product storage
– Additional ~1.8 mmbbl crude storage (various loactions) / ~0.7 mmbbl refined products storage (Baton Rouge Terminal) under
construction
• Lease 80 refined product rail cars. Took delivery of 500 leased crude rail cars since 2012 (all coiled and insulated DOT 111A
new builds)
• Walnut Hill rail facility operational as of August 2012; Wink rail facility as of October 2012; Natchez as of January 2013;
Pronghorn as of December 2013; Scenic Station as of July 2014
• Handled approximately 96,500 bpd of crude oil and petroleum products in 3Q 2014
Supply & Logistics Operational Footprint
Ouachita
River
WY
Mississippi
River
Red River
UT
CO
Shreveport
Midland
Natchez
Wink
Port Arthur
Houston
Supply & Logistics
Crude Oil Operation
Crude Oil Tanks
Refineries-Products
Products Tanks
Corpus
Christi
Lake
TX City Charles
Marine Transportation
Rail Services
‐13‐
Liberty
Baton Rouge
Mobile
Walnut Hill
Business Objectives and
Recent Developments
Business Objectives
 Identify and Exploit Profit Opportunities Across an Increasingly Integrated
Asset Footprint
 Continue to Optimize Existing Asset Base and Create Synergies
 Evaluate Internal and 3rd Party Growth Opportunities that Leverage Core
Competencies, Lead to Further Integration and Expand Geographic Reach
 Leverage Existing Customer Relationships Across Businesses and Attract
New Customers
 Maintain Focus on HSSE
‐15‐
Organic Capital Projects
• Opportunities focused on leveraging existing Genesis
footprint and providing an integrated midstream
solution to our producer and refinery customers
Capital Allocation by Segment
Pipeline Transportation
26%
• Project portfolio provides for continued investment at
attractive returns
• Projected capital expenditures on organic capital
projects of ~$730 million, inclusive of capital deployed
in 2014
Supply & Logistics (“S&L”)
74%
 2014 capital expenditures of ~$470 million
2013
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
Completed
SEKCO (Pipeline)
Completed
ExxonMobil Baton Rouge Project (Pipeline and S&L)
Completed


Baton Rouge Terminal Project (Pipeline and S&L)
Rail Projects
Wink Rail Facility Phase II (S&L)
Completed
Natchez Phases II / Truck & Dock Expansion (S&L)
Walnut Hill Phase II & Second Tank (S&L)
Completed
Completed

Completed
Raceland Rail Facility (S&L)

Wyoming Projects
Pronghorn Rail Facility (S&L)
Completed
Gathering Pipeline Segments (Pipeline)
Completed
Genesis Inland Marine Growth (S&L)
Completed
Completed
‐16‐
Completed

Completed




Pipeline Recent Development
SEKCO
•
•
Project Overview and Uncommitted Prospects
On January 4, 2012, Genesis and Enterprise
announced the formation of Southeast Keathley
Canyon Pipeline Company (“SEKCO”), a 50/50 JV to
construct a 149 mile pipeline to export oil from the
Lucius discovery
–
18” diameter with 115,000 bpd capacity
–
Ties into existing downstream infrastructure at
SMI-205 platform (Poseidon)
Eugene Island
CHOPS
Poseidon
SMI-205 Platform
Bald Pate
Angel Fire
Kilchurn
Bushwood
Jake
Danny
SEKCO
Lucius discovery is estimated to contain 300 million
barrels of oil equivalent
North Platte
–
Ardennes
Anchor producers include: Anadarko, Apache,
Exxon, ENI, Petrobras and Plains
Shenandoah
Coronado
Yucatan
–
On December 15, 2011, Lucius producers
sanctioned the construction of an 80,000 bpd
spar
Kaskida
Tucker
•
Pipeline mechanically complete as of June 2014
Bioko
Hummer
Moccasin
Jack / St. Malo
Buckskin
•
Pipeline began earning minimum revenues as of
July 1, 2014 (including certain minimum revenues
related to Poseidon)
Hadrian
LUCIUS
Logan
Phobos
‐17‐
Pipeline / S&L Recent Development
Integrated Crude Logistics
•
•
Project Overview
Port Hudson Truck Station
One existing 10,000 bbl tank
Genesis entered into definitive agreements with ExxonMobil (“XOM”) in which
Genesis improved existing assets and developed new infrastructure in Louisiana to
connect into XOM’s Anchorage Tank Farm which supplies its Baton Rouge refinery,
one of the largest refinery complexes in North America
LA
Genesis is constructing the following infrastructure:
–
Barge dock improvements and ~200,000 barrels of storage at Port Hudson,
Louisiana (existing 216,000 barrels of tank capacity)
–
Crude oil unit train facility at the Scenic Station Terminal
–
New 18 mile, 24” diameter crude oil pipeline connecting Port Hudson to the Scenic
Station Terminal and downstream to the XOM Anchorage Tank Farm (ultimate
capacity of ~350,000 bpd)
•
Port Hudson upgrades and new pipeline completed in 1Q 2014; Scenic Station
Terminal commissioned in July 2014
•
Expanding existing Port Hudson truck terminal to accommodate increasing local
production; expected completion in 4Q 2014
Port Hudson Terminal
Two new 110,000 bbl tanks
One existing 206,000 bbl tank
KCS
Scenic Station Terminal
Unit Train Rail Facility
Baton Rouge Terminal
CN
•
Genesis has commenced steps to construct a new crude oil, intermediates and
refined products import / export terminal in Baton Rouge, Louisiana
•
Will initially include ~1.1 million barrels of storage
Ability to segregate, blend and batch multiple grades of crude oils, intermediates
and refined products for multiple customers
–
Ample room for expansion to provide additional services and/or handle additional
products
Will be connected to Genesis’ Scenic Station unit train facility

•
XOM Baton Rouge
Refinery (506 kbd)
XOM Anchorage Tank Farm
Shippers to Scenic Station able to access both local refiners and other attractive
refining markets via the Baton Rouge Terminal
Will be connected to the deepwater docks of the Port of Greater Baton Rouge
–
Ability to handle vessels ranging from barges to Aframax class ships
•
Will have additional connectivity to Genesis’ Port Hudson terminal north of Scenic
Station
•
Project expected to be operational by the end of 2Q 2015
‐18‐
Baton Rouge Terminal Project
•
–
Placid Refinery (60 kbpd)
Baton Rouge Terminal
~1.1 Million Barrels of Storage
Port of Greater Baton Rouge
Aframax Class Ships / Barges
Supply & Logistics Recent Developments
Rail Projects
Wink

Crude oil rail loading facility located in Wink,
Texas
Natchez

Walnut Hill

Crude oil rail unloading / loading facility at
Genesis’ existing terminal in Natchez, MS
 Currently able to load Genesis and 3rd party
railcars designed to move West Texas
production to more highly valued markets
 Designed to facilitate the movement of
Canadian bitumen / dilbit to higher valued
gulf coast markets
 Site located on the Texas/New Mexico
Railway (“TNMR”) which connects to the
Union Pacific (“UP”) in Monahans, Texas
 Located on Natchez Railway which is
shortline connected to Canadian National RR

Synergies with Genesis’ existing crude oil
gathering business in West Texas

Genesis’ to increase marketing volumes by
providing an outlet with rail accessibility

Capabilities to load 140 cars

Full service capabilities currently operational
with the capability to unload ~140 rail cars,
capable of both manifest and unit trains
 1 x 100 kbbl tank; 1 x 50 kbbl tank

Facility has capability to unload bitumen /
dilbit, transfer to heated tanks and load heated
barges via the Mississippi River

Facility operational as of January 2013
– Unique location allows Genesis to make a
direct connection into its Jay system
providing direct / indirect access to regional
refineries
– Site is located on the Alabama / Gulf Coast
Railway which is shortline connected to
BNSF Railway

 100 unloading spots, capable of both
manifest and unit train service
 New 100 kbbl tank; 2 x 50 kbbl tanks; 5 x 30
kbbl tanks located at the facility

Crude oil rail unloading facility utilizing
existing rail infrastructure at Walnut Hill, FL
Full service capabilities currently operational
with the capability to unload ~116 rail cars
(“Unit Train”), ~75,000 bbls, at a time
 2 x 110 kbbl tanks located at the facility
Currently expanding truck station and barge
capabilities to be completed in 4Q 2014
 7 truck unloads
Rail Operations Footprint Overview
Pronghorn
Natchez
Wink
Scenic Station
Raceland
‐19‐
Walnut Hill
Pipeline / S&L Recent Development
Raceland Rail Facility
• Raceland is being designed to handle
the unloading of up to two unit trains per
day (~140 kbd) with two parallel tracks
capable of staging ~118 cars each
–
Project Overview
Placid
Port Allen
XOM
Baton Rouge
Anchorage
Capability to unload a single train
at 10 kbh (~7 hours), or two trains
at a combined 20 kbh
Motiva
Convent
Marathon
Garyville
• 4 x 110 kbbl tanks to be initially
constructed at the location
• Unique location jointly served by the
Burlington Northern Santa Fe Railway
(“BNSF”) and Union Pacific (“UP”)
Motiva
Norco
St. James
Shell
Saint Rose
Valero
Saint Charles
XOM
Chalmette
BNSF / UP
Raceland
New GEL Line
• Raceland will be able to accept a variety
of crudes from existing and emerging
shale plays and Canada (i.e. Bakken,
Eagle Ford, West Texas, Niobrara and
WCS pipeline quality barrels)
Phillips 66
Alliance
Houma
Clovelly
Key
• Project completion expected by 1Q 2015
Murphy
Meraux
3rd
Party Pipelines
3rd
Party Crude Tanks
Refineries
‐20‐
Pipeline / S&L Recent Development
Wyoming Projects
Wyoming Assets Overview
 Genesis has completed construction of its unit train
loading facility in the heart of the Powder River Basin
(“PRB”) and Niobrara shale play (“Pronghorn”)
 Site located in the center of Converse County, 15 miles
north of Douglas, Wyoming
 Successfully loaded first train December 30, 2013
 Unique location along the Orin Subdivision allows
Pronghorn to be jointly served by both the Burlington
Northern Santa Fe Railway (“BNSF”) and the Union Pacific
Railroad (“UP”) providing shippers with direct rail access
to a majority of the rail unloading destinations throughout
the country
Pronghorn
Pronghorn
– Actively shipping trains on both the BNSF and UP
 Two 110 kbbl tanks in operation at Pronghorn with a 3rd
110 kbbl tank under construction
 Facility able to receive barrels via pipeline through
Genesis existing gathering system as well as truck barrels
– One field truck station in service; two additional field
truck stations currently being re-activated
 Building additional logistics infrastructure to expand
operations and compliment existing asset base
‐21‐
S&L Recent Developments
• Inland (Brown Water) Marine Growth:
– Took possession of 4 asphalt / crude capable barges in 3Q/ 4Q 2013; received additional 8 barges in 2Q / 3Q 2014
– 10 push-boats on order for arrival starting in 4Q 2014 with periodic deliveries through 2016; 4 barges on order for arrival in
3Q / 4Q 2015. Declared option to build 4 additional barges to be delivered Q1 / Q2 2016.
– Hold option to build up to 8 barges per year from 2016 through 2020
• Offshore (Blue Water) Marine Growth:
– Acquired all the assets of the downstream transportation business of Hornbeck Offshore Transportation, LLC for $230 million
Inland Operations
Offshore Operations
• Provide inland river transportation of liquid black oil
products for Genesis and 3rd party customers along
Intercoastal Canal, Upper River and Western River
Systems and Gulf Coast
• Primarily focused on bluewater or coastwise “shorthaul” transportation capable of traveling in the Gulf
of Mexico, Eastern Seaboard, Caribbean and the
Great Lakes
• Operate in one boat / 2 to 3 barge per tow
configuration
• Operate in one boat / 1 barge per tow configuration
• Fleet consists of 9 boats (3,000 – 6,140HP) and 9
coastwise barges:
• Existing fleet consists of 25 boats (1,800 – 4,200HP)
and 66 inland barges (58 – 30,000 bbls / 8 – 38,000
bbls)
– 3 – 65,000, 1 – 81,000, 3 – 110,000 and 2 –
135,000 bbls
‐22‐
S&L Recent Developments
American Phoenix Acquisition
• Genesis has agreed to acquire the M/T American Phoenix from Mid Ocean Tanker Company for
approximately $157 million
– Modern, double-hulled, Jones Act qualified tanker with 330,000 barrels of cargo capacity
– Classification allows operation in a very broad range of cargo types
– Design makes vessel one of the safest and most sophisticated tankers in the world
• Complements and further integrates our existing operations, including our Genesis Marine business
• Currently operating under long term charters into 2020 with high quality counterparties, including major
integrated oil companies
• Expected to close acquisition by early November
‐23‐
Financial Summary
Financial Objectives
 Continue to deliver disciplined, low double-digit growth in distributions
 Grow our distribution coverage ratio, using excess Available Cash as equity
and to pay down senior secured debt
 Target long-term total leverage ratio of +/- 3.75x. Allow to episodically
increase to +/- 4.25 to fund construction of high return organic opportunities
‐25‐
Strong Balance Sheet and Credit Profile
($ in 000s)
Senior Secured (a)
Senior Unsecured
Pro Forma Adjusted Debt
LTM Pro Forma EBITDA
Reported LTM
9/30/2014
$246,275
1,050,000
$1,296,275
$280,513
Pro Forma Adjusted Debt / LTM Pro Forma EBITDA
Pro Forma LTM
9/30/2014
$246,275
1,050,000
$1,296,275
$49,108
$329,621
3.93x
3Q 2014 Reported Available Cash Before Reserves
Less: Distributions
Distribution Coverage ($)
Distribution Coverage
(a)
Material Project & Acquisitions
EBITDA Adjustment
$60,798
($54,112)
$6,686
1.12x
Excludes debt used to finance short-term hedged inventory of $105.9 million as of 6/30/14. Net of cash of $14.3 million as of 6/30/14.
‐26‐
Disciplined Distribution Growth
 36 consecutive quarters of distribution increases to L.P.s, 31 of which have been greater than 10%
year-over-year
Historical LP Unit Distributions ($ / unit)
‐27‐
Appendix
Pro Forma Segment Margin Reconciliation
($ in 000s)
Pro Forma LTM
9/30/2014
Segment Margin Excluding Depreciation and Amortization:
Pipeline Transportation
Refinery Services
Supply and Logistics
Total Segment Margin
Corporate General and Administrative Expense
Depreciation and amortization
Interest Expense, Net
Distributable Cash from Equity Investees in Excess of Equity in Earnings
Non-Cash Expenses Not Included in Segment Margin
Cash Payments from Direct Financing Leases in Excess of Earnings
Income tax (expense) benefit
Discontinued operations
Income from Continuing Operations
$120,445
$83,891
$123,515
$327,851
(48,813)
(82,924)
(59,616)
(27,556)
(2,788)
(5,437)
(2,669)
(1,290)
$96,758
Total Segment Margin
Acquisitions and Material Projects EBITDA Adjustment
Pro Forma Segment Margin
$327,851
49,108
$376,959
Note: Material Projects EBITDA Adjustment based on growth projects EBITDA multiplied by % completion.
‐29‐
9 months Ended September 30,
2014
2013
$93,078
64,354
97,390
$254,822
(37,715)
(64,919)
(47,314)
(20,326)
1,935
(4,113)
(2,334)
$80,036
$81,512
55,824
69,995
$207,331
(32,255)
(46,780)
(36,283)
(16,659)
(2,828)
(3,786)
(510)
(949)
$67,281
2013
$108,879
75,361
96,120
$280,360
(43,353)
(64,784)
(48,583)
(23,889)
(7,551)
(5,110)
(845)
(2,241)
$84,004
2012
$96,539
72,883
92,911
$262,333
(38,372)
(61,150)
(40,923)
(24,464)
(5,280)
(5,016)
9,205
1,004
$97,337
Available Cash Before Reserves
($ in 000s)
Income from continuing operations
Depreciation and amortization
Cash received from direct financing leases not
included in income
Cash effects of sales of certain assets
Effects of distributable cash generated by equity method
investees not included in income
Cash effects of equity-based compensation plans
Non-cash legacy stock appreciation rights plan expense
Non-cash executive equity award expense
Expenses related to acquiring or constructing assets
that provide new sources of cash flow
Unrealized loss (gain) on derivative transactions
excluding fair value hedges
Maintenance capital expenditures
Non-cash tax benefit
Other items, net
Available Cash before Reserves
Distributions
Distribution Coverage Ratio
Pro Forma LTM
9/30/2014
$96,758
$82,923
$0
$5,437
$1,278
$0
$27,556
($2,675)
$271
$0
$0
$3,472
$0
($532)
($1,657)
$1,268
$4,019
$218,118
9 months Ended September 30,
2014
2013
$80,036
$67,282
64,919
$46,780
2013
$84,004
64,784
2012
$97,337
61,150
4,113
178
$3,786
$810
5,110
1,910
5,016
773
20,326
(1,066)
(279)
-
$16,659
($3,889)
$5,154
23,889
(5,498)
5,704
-
24,464
(3,280)
4,478
500
1,890
$4,209
5,791
1,679
(4,647)
(532)
1,234
3,553
$169,725
($2,802)
($2,444)
($186)
$2,313
$137,672
1,313
(3,569)
(152)
2,779
$186,065
86
(4,430)
(9,222)
607
$179,158
$200,462
$153,009
$129,051
$176,504
$150,096
1.1x
1.1x
1.1x
1.1x
1.2x
‐30‐
Pro Forma EBITDA Reconciliation
($ in 000s)
Pro Forma LTM
9/30/2014
Income from continuing operations
$96,758
Depreciation and amortization
82,924
Interest expense, net
59,616
Cash expenditures not included in Adjusted EBITDA
or net income
797
Adjustment to include distributions from equity investees
and exclude equity in investees net income
27,556
Non-cash legacy stock appreciation rights plan expense
271
Non-cash executive equity award expense
Other non-cash items
8,632
Income tax expense (benefit)
2,669
Discontinued operations
1,290
Adjusted EBITDA
$280,513
Acquisitions and Material Projects EBITDA Adjustment
Pro Forma EBITDA
49,108
$329,621
Note: Material Projects EBITDA Adjustment based on growth projects EBITDA multiplied by % completion.
‐31‐
9 months Ended September 30,
2014
2013
$80,036
$68,222
64,919
46,780
47,314
36,283
824
2013
$84,004
64,784
48,583
2012
$97,337
61,150
40,923
261
234
(1,705)
20,326
(279)
3,019
2,334
$218,493
16,659
5,154
2,407
510
951
$177,227
23,889
5,704
8,020
845
2,241
$238,304
24,464
4,478
500
6,816
(9,205)
(1,004)
$223,754
$218,493
$177,227
58,320
$296,624
18,089
$241,843
Adjusted Debt Reconciliation
($ in 000s)
Pro Forma LTM
9/30/2014
$335,000
1,050,000
(71,800)
(16,925)
Long-term debt
Senior Unsecured Notes
Adjustment for short-term hedged inventory
Cash and cash equivalents
New senior notes offering
Repayment of credit facility
Pro Forma Adjusted Debt
EBITDA (as reported)
Acquisitions and Material Projects EBITDA Adjustment
Pro Forma EBITDA
Pro Forma Adjusted Debt / Pro Forma EBITDA
‐32‐
2012
$500,000
350,000
(63,900)
(11,282)
$1,296,275
$1,193,134
$774,818
$280,513
49,108
$329,621
$238,304
58,320
$296,624
$223,754
18,089
$241,843
3.93x
Note: Material Projects EBITDA Adjustment based on growth projects EBITDA multiplied by % completion..
2013
$582,800
700,000
(80,800)
(8,866)
4.02x
3.20x