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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 1, 2005
GENESIS ENERGY, L.P.
(Exact name of registrant as specified in its charter)
Delaware 1-12295 76-0513049
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
500 Dallas, Suite 2500, Houston, Texas 77002
(Address of principal executive offices) (Zip Code)
(713) 860-2500 (Registrant's
telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
___ Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
___ Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240-14a-12)
___ Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240-14d-2(b))
___ Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240-13e-4(c)
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2
Explanatory Note: On April 1, 2005, Genesis Energy, L.P. ("GELP")
acquired from TCHI Inc. (TCHI), a wholly owned subsidiary of ChevronTexaco
Global Energy Inc., TCHI's 50% partnership interest in T&P Syngas Supply Company
(T&P Syngas) for $13.5 million. GELP filed a Form 8-K on April 7, 2005
announcing this acquisition. This Form 8-K/A amends the Form 8-K filed on April
7, 2005, to include the financial statements of the business acquired and the
pro forma financial information required to be filed under Item 9.01.
Item 9.01. Financial Statements and Exhibits
(a) Financial statements of businesses acquired.
The following report and financial statements of T&P Syngas are included:
o Independent Auditors' Report
o Unaudited Balance Sheet as of March 31, 2005
o Audited Balance Sheets as of December 31, 2004 and 2003
o Audited Statements of Operations for the Years Ended December 31, 2004
and 2003
Unaudited Statements of Operations for the Three Months Ended March 31,
2005 and 2004
Audited Statements of Cash Flows for the Years Ended December 31, 2004
and 2003
Unaudited Statements of Cash Flows for the Three Months Ended March 31,
2005 and 2004
Audited Statements of Changes in Partners' Capital for the Years Ended
December 31, 2004 and 2003
Unaudited Statements of Changes in Partners' Capital for the Three
Months Ended March 31, 2005 and 2004
INDEPENDENT AUDITORS' REPORT
To the Management Committee of T&P Syngas Supply Company
Houston, Texas
We have audited the accompanying balance sheets of T&P Syngas Supply Company
(the "Partnership") as of December 31, 2004 and 2003, and the related statements
of operations, partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on the financial statements based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Partnership's internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership at December 31, 2004 and
2003, and the results of its operations and its cash flows for the years then
ended in conformity with accounting principles generally accepted in the United
States of America.
/s/ Deloitte & Touche LLP
Houston, Texas
June 14, 2005
3
T&P SYNGAS SUPPLY COMPANY
BALANCE SHEETS
(In thousands)
March 31, December 31, December 31,
ASSETS 2005 2004 2003
-------- -------- ---------
(Unaudited)
CURRENT ASSETS
Cash $ 1,182 $ 878 $ 2,212
Accounts receivable - related party 373 721 355
-------- -------- ---------
Total current assets 1,555 1,599 2,567
FIXED ASSETS, at cost 29,421 29,421 29,654
Accumulated depreciation (11,858) (11,470) (9,939)
-------- -------- ---------
Net fixed assets 17,563 17,951 19,715
-------- -------- ---------
TOTAL ASSETS $ 19,118 $ 19,550 $ 22,282
======== ========= ========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable:
Trade $ 108 $ 85 $ 359
Related party 140 164 363
Commitments and Contingencies (Note 8)
Partners' Capital:
PHSI 9,435 9,651 10,780
TCHI 9,435 9,650 10,780
-------- -------- --------
Total Partners' Capital 18,870 19,301 21,560
-------- -------- --------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 19,118 $ 19,550 $ 22,282
======== ========= ========
The accompanying notes are an integral part of
these financial statements.
4
T&P SYNGAS SUPPLY COMPANY
STATEMENTS OF OPERATIONS
(In thousands)
Year Ended Three Months Ended
December 31, March 31,
2004 2003 2005 2004
--------- -------- -------- ---------
(Unaudited)
PROCESSING FEE REVENUES-Related party $ 4,220 $ 3,957 $ 1,093 $ 1,019
OPERATING AND MAINTENANCE EXPENSES:
Related party 589 858 23 144
Unrelated party 9 140 4 1
DEPRECIATION EXPENSE 1,553 1,524 388 388
--------- -------- -------- ---------
OPERATING INCOME 2,069 1,435 678 486
OTHER INCOME 7 29 2 2
OTHER EXPENSE (30) (16) - -
INCOME FROM INSURANCE PROCEEDS (Note 6) - - 1,222 -
--------- -------- -------- ---------
NET INCOME $ 2,046 $ 1,448 $ 1,902 $ 488
========= ======== ======== =========
The accompanying notes are an integral part of
these financial statements.
5
T&P SYNGAS SUPPLY COMPANY
STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended Three Months Ended
December 31, March 31,
2004 2003 2005 2004
--------- -------- -------- ---------
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,046 $ 1,448 $ 1,902 $ 488
Adjustments to reconcile net income to net cash provided by
operating activities-
Depreciation 1,553 1,524 388 388
Loss (gain) on disposal of surplus assets 29 (7) - -
Changes in components of working capital-
Accounts receivable (366) (11) 348 42
Other current assets - 36 - -
Accounts payable (215) (167) (1) (236)
---------- -------- -------- ---------
Net cash provided by operating activities 3,047 2,823 2,637 682
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to fixed assets (76) (312) - -
--------- -------- -------- ---------
Net cash used in investing activities (76) (312) - -
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners (4,305) (5,000) (2,333) -
--------- -------- -------- ---------
Net cash used in financing activities (4,305) (5,000) (2,333) -
--------- -------- -------- ---------
NET (DECREASE) INCREASE IN CASH (1,334) (2,489) 304 682
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 2,212 4,701 878 2,212
--------- -------- -------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 878 $ 2,212 $ 1,182 $ 2,894
========= ======== ======== =========
The accompanying notes are an integral part of
these financial statements.
6
T&P SYNGAS SUPPLY COMPANY
STATEMENTS OF PARTNERS' CAPITAL
(In thousands)
PHSI TCHI Total
-------- -------- ---------
Partners' Capital, January 1, 2003 $ 12,556 $ 12,556 $ 25,112
Net income for the year ended December 31, 2003 724 724 1,448
Distributions during the year ended December 31, 2003 (2,500) (2,500) (5,000)
-------- -------- ---------
Partners' capital, December 31, 2003 10,780 10,780 21,560
Net income for the year ended December 31, 2004 1,023 1,023 2,046
Distributions during the year ended December 31, 2004 (2,153) (2,152) (4,305)
-------- -------- ---------
Partners' capital, December 31, 2004 9,651 9,650 19,301
Net income for the three months ended March 31, 2005 (unaudited) 951 951 1,902
Distributions during the three months ended March 31, 2005 (unaudited) (1,167) (1,166) (2,333)
-------- -------- ---------
Partners' capital, March 31, 2005 (unaudited) $ 9,435 $ 9,435 $ 18,870
======== ======== =========
The accompanying notes are an integral part of
these financial statements.
7
T&P SYNGAS SUPPLY COMPANY
NOTES TO FINANCIAL STATEMENTS
1. Organization and Basis of Presentation
Organization
T&P Syngas Supply Company (T&P Syngas) is a Delaware general partnership. The
partners in T&P Syngas were Praxair Hydrogen Supply, Inc. (PHSI) and TCHI, Inc.
(TCHI), each of whom owned 50% of T&P Syngas. On April 1, 2005, TCHI sold its
interest in T&P Syngas to a subsidiary of Genesis Energy, L.P.
T&P Syngas is managed by a management committee comprised of representatives
from the partners.
T&P Syngas processes raw materials provided by its customer into syngas and
steam and earns a fee for its processing services. These operations are
conducted at its facilities in Texas City, Texas.
Basis of Presentation
The accompanying financial statements and related notes present the financial
position as of March 31, 2005 and December 31, 2004 and 2003 for T&P Syngas and
its results of operations and cash flows and changes in partners' capital for
the years ended December 31, 2004 and 2003 and its results of operations and
cash flows for the three months ended March 31, 2005 and 2004.
The statement of financial position as of March 31, 2005 and the statements
of operations and cash flows for the three months ended March 31, 2005 and 2004
have been prepared without audit. Accordingly, they reflect all adjustments
(which consist solely of normal recurring adjustments) which are, in the opinion
of T&P Syngas, necessary for a fair presentation of the financial results for
interim periods. Certain information and notes normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations. However,
we believe that the disclosures are adequate to make the information presented
not misleading.
No provision for income taxes related to the operations of T&P Syngas is
included in the accompanying financial statements; as such income will be
taxable directly to the partners.
2. Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires the use
of estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities, if any at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Significant accruals that may be made
include: (1) estimated useful lives of assets, which impacts depreciation and
amortization, (2) accruals related to revenues and expenses, (3) liability and
contingency accruals, (4) estimates of future net cash flows from assets for
purposes of determining whether impairment of those assets has occurred. While
T&P Syngas believes these estimates are reasonable, actual results could differ
from these estimates.
Cash and Cash Equivalents
Cash and cash equivalents consist of all demand deposits and funds invested
in highly liquid instruments with original maturities of three months or less.
T&P Syngas has no requirement for compensating balances or restrictions on cash.
8
Fixed Assets
Property and equipment are carried at cost. Depreciation of property and
equipment is provided using the straight-line method over the estimated useful
life of the asset. The asset life of property and equipment is 20 years.
Property and equipment are reviewed for impairment when events or
circumstances indicate that its carrying value may not be recoverable. The
carrying value of property and equipment is not recoverable if it exceeds the
sum of the undiscounted cash flows expected to be generated from the use and
ultimate disposal of the asset. If the carrying value is determined to not be
recoverable under this method, an impairment charge equal to the amount the
carrying value exceeds the fair value is recognized. Fair value is generally
determined from estimated discounted future net cash flows.
Maintenance and repair costs are charged to expense as incurred. Costs
incurred for major replacements and upgrades are capitalized and depreciated
over the remaining useful life of the asset.
Asset Retirement Obligations
Asset retirement obligations are accounted for in accordance with Statement
of Financial Standards No. 143 (SFAS 143). SFAS 143 requires that the cost for
asset retirement obligations be capitalized as part of the cost of the related
long-lived asset and subsequently allocated to expense systematically as with
depreciation. At the end of the processing agreement in July 31, 2016, T&P
Syngas, at the option of the owner of the site on which the assets are located,
may (1) sell its assets at fair market value to a third party or the owner of
the site, (2) not be required to remove the assets, or (3) be required to remove
the assets and restore the site to approximately its original condition. The
processing agreement between T&P Syngas and PHSI provides for extensions of the
agreement. The fair value of any asset retirement obligations cannot be
reasonably estimated, as the settlement dates are indeterminable.
In March 2005, the FASB issued FASB Interpretation No. 47, "Accounting for
Conditional Asset Retirement Obligations, an interpretation of FASB Statement
No. 143" (FIN 47). FIN 47 clarifies that the term, conditional asset retirement
obligation as used in SFAS 143, refers to a legal obligation to perform an
asset retirement activity in which the timing and/or method of settlement are
conditional upon a future event that may or may not be within the control of the
entity. Although uncertainty about the timing and/or method of settlement may
exist and may be conditional upon a future event, the obligation to perform the
asset retirement activity is unconditional. Accordingly, an entity is required
to recognize a liability for the fair value of a conditional asset retirement
obligation if the fair value of the liability can be reasonably estimated. FIN
47 clarifies when an entity would have sufficient information to reasonably
estimate the fair value of an asset retirement obligation and emphasizes that
uncertainty about the timing or method of settlement of the obligation should be
factored into the calculation of the fair value of the obligation. FIN 47 is
effective no later than the end of reporting periods ending after December 15,
2005. T&P Syngas is currently evaluating what effect FIN 47 will have on its
financial statements, but at this time, it does not believe that the adoption of
FIN 47 will have a material effect on its financial position, results of
operations or cash flows.
Revenue Recognition
Revenues are recognized under the terms of the processing agreement between
T&P Syngas and PHSI. These terms provide that T&P Syngas earns revenue during
periods when processing occurs and required outputs are produced. PHSI provides
the materials to be processed and certain levels of other services to enable T&P
Syngas to produce the syngas and steam at levels specified in the agreements
between the parties.
9
Operating and Maintenance Costs
Under the terms of the agreements between T&P Syngas and PHSI, PHSI provides
the materials and services to produce specified levels of syngas and steam. T&P
Syngas incurs operating and maintenance costs when inputs exceed prearranged
levels under the terms of the processing agreement. Additionally, T&P Syngas
pays royalties related to the technology used in its processes and may incur
other operating expenses outside the scope of the processing agreement.
Concentrations of Credit and Other Risks
All T&P Syngas' receivables are due from PHSI, and the agreements between T&P
Syngas and PHSI provide that T&P Syngas' only customer is PHSI. This customer
concentration has the potential to impact T&P Syngas' exposure to credit risk,
either positively or negatively, in that T&P Syngas could be affected by
economic, industry and other conditions that affect PHSI.
Fair Value of Financial Instruments
The carrying values of cash and cash equivalents, accounts receivable and
accounts payable in the Balance Sheets approximated fair value due to the short
maturity of these instruments.
3. Fixed Assets
Fixed assets consisted of the property and equipment located at T&P Syngas'
facility at Texas City, Texas. Depreciation expense was $1,553,000 and
$1,524,000 for the years ended December 31, 2004 and 2003.
4. Partners' Capital and Distributions
The partners in T&P Syngas own 50% interests in T&P Syngas. The agreement
between the partners provides that distributions will be paid quarterly to the
partners from the excess cash after reserves at the end of each quarter.
5. Transactions with Related Parties
All of the revenues and receivables of T&P Syngas are earned from and
receivable from PHSI under the terms of a processing agreement that is effective
through July 31, 2016.
Operating and maintenance expenses in the amounts of $449,000 and $858,000
for the years ended December 31, 2004 and 2003, were provided by PHSI.
Royalties in the amount of $140,000 for the year ended December 31, 2004 were
payable to an affiliate of TCHI under the terms of a licensing agreement for the
technology used by T&P Syngas.
Accounts payable at December 31, 2004 and 2003 included $24,000 and $363,000,
respectively owed to PHSI for operating and maintenance expenses. Accounts
payable at December 31, 2004 included $140,000 owed to an affiliate of TCHI for
royalties.
6. Insurance Proceeds
In January 2005, T&P Syngas received proceeds from an insurance settlement
related to an equipment failure in 2000. These proceeds of $1.2 million were
recorded as other income in 2005. A distribution was paid to the partners in
January 2005 in the amount of the proceeds.
10
7. Supplemental Cash Flow Information
Cash received by T&P Syngas for interest during the years ended December 31,
2004 and 2003 was $7,000 and $29,000, respectively.
8. Commitments and Contingencies
T&P Syngas is subject to a royalty agreement related to the technology it
uses. Two royalties are calculated under the agreement - capacity royalties and
technology update royalties. Royalties related to technology updates had been
paid in full as of January 1, 2003. T&P Syngas is subject to capacity royalties
based on operations. These royalties become payable as T&P Syngas increases its
daily average output levels during a calendar period. At December 31, 2004, the
royalty related to operations had been recorded to the maximum capacity level of
T&P Syngas' facility. Should capacity be increased in the future, additional
royalties will be owed.
The processing agreement with PHSI expires July 31, 2016. It may be extended
for two additional five year terms at PHSI's option. At the termination of the
processing agreement, T&P Syngas, at the option of the owner of the site on
which the assets are located, may (1) sell its assets at fair market value to a
third party or the owner of the site, (2) not be required to remove the assets,
or (3) be required to remove the assets and restore the site to approximately
its original condition.
A third party has advised T&P Syngas that it may make a claim against T&P
Syngas for damages the third party incurred in 2000 related to an equipment
failure at T&P Syngas' facility. The third party has made a claim against an
affiliate of TCHI related to this incident. T&P Syngas has not been formally
brought into the litigation between the TCHI affiliate and the third party, and
T&P Syngas does not know what exposure, if any, it may have from this claim.
9. Subsequent Events
On April 1, 2005, TCHI sold its interest in T&P Syngas to Genesis Syngas
Investments, L.P., a subsidiary of Genesis Energy, L.P. for $13.5 million.
On May 6, 2005, T&P Syngas paid a distribution totaling $1,347,000 with
respect to the first quarter of 2005 to the partners. TCHI received its share of
this distribution.
11
(b) Unaudited pro forma financial information.
GENESIS ENERGY, L.P. UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
The following Unaudited Pro Forma Consolidated Balance Sheet as of March 31,
2005 and the Unaudited Pro Forma Consolidated Statement of Operations for the
year ended December 31, 2005 and the three months ended March 31, 2005 give
effect to the acquisition by Genesis Energy, L.P. (Genesis) of a 50% interest in
T&P Syngas Supply Company (T&P Syngas) and the related assumptions and
adjustments described in the notes thereto. These statements will be referred to
as the Unaudited Pro Forma Statements.
The Unaudited Pro Forma Statements are based upon the historical unaudited
consolidated balance sheet and audited and unaudited statements of operations of
Genesis and the unaudited balance sheet and audited and unaudited statements of
operations of T&P Syngas and should be read in conjunction with the audited
consolidated financial statements and notes thereto included in Genesis's Annual
Report on Form 10-K for the year ended December 31, 2004, the unaudited
consolidated financial statements and notes thereto included in Genesis's
Quarterly Report on Form 10-Q for the three months ended March 31, 2005, and the
audited and unaudited financial statements of T&P Syngas included in this
current report on Form 8-K.
The Unaudited Pro Forma Statements were prepared assuming that the
acquisition by Genesis of a 50% interest in T&P Syngas was consummated as of
March 31, 2005 for the Unaudited Pro Forma Consolidated Balance Sheet, and as of
the beginning of each period presented for the Unaudited Pro Forma Consolidated
Statements of Operations. The Unaudited Pro Forma Statements have been prepared
based upon assumptions deemed appropriate by Genesis and may not be indicative
of actual results.
Genesis has been indemnified by TCHI for the potential third party claim
discussed in note 8 of the notes to the financial statements of T&P Syngas.
12
GENESIS ENERGY, L.P.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 2005
(In thousands)
Historical Pro Forma Pro
ASSETS Genesis Adjustments Forma
---------- ----------- ---------
CURRENT ASSETS
Cash $ 3,131 $ 3,131
Accounts receivable 90,492 90,492
Other current assets 5,639 5,639
--------- ---------
Total current assets 99,262 99,262
FIXED ASSETS, at cost 68,094 68,094
Accumulated depreciation (34,569) (34,569)
--------- ---------
Net fixed assets 33,525 33,525
CO2 ASSETS, net of amortization 25,708 25,708
INVESTMENT IN T&P SYNGAS $ 13,500 (a) 13,500
OTHER ASSETS, net 8,162 (500)(b) 7,662
--------- --------- ---------
TOTAL ASSETS $ 166,657 $ 13,000 $ 179,657
========= ========= =========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES
Accounts payable: $ 95,250 $ 95,250
Accrued liabilities 6,651 6,651
--------- ---------
Total current liabilities 101,901 101,901
LONG-TERM DEBT 17,500 $ 13,000 (c) 30,500
OTHER LONG-TERM LIABILITES 156 156
COMMITMENTS AND CONTINGENCIES
MINORITY INTERESTS 517 517
PARTNERS' CAPITAL 46,583 46,583
--------- --------- ---------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 166,657 $ 13,000 $ 179,657
========= ========= =========
See Notes to Unaudited Pro Forma Financial Statements.
13
GENESIS ENERGY, L.P.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2004
(In thousands)
Historical Pro Forma Pro
Genesis Adjustments Forma
---------- ----------- ----------
REVENUES $ 927,143 $ 927,143
COSTS AND EXPENSES:
Crude oil, pipeline operating and CO2 marketing costs 908,804 908,804
General and administrative expenses 11,031 11,031
Depreciation and amortization 7,298 7,298
Net loss on disposal of surplus assets 33 33
--------- ---------
Total costs and expenses 927,166 927,166
--------- ---------
OPERATING LOSS (23) (23)
Equity in earnings of investee $ 664 (d) 664
Net interest expense (926) (723)(e) (1,649)
--------- --------- ---------
LOSS FROM CONTINUING OPERATIONS $ (949) $ (59) $ (1,008)
========= ========= =========
BASIC AND DILUTED NET LOSS FROM CONTINUING OPERATIONS PER COMMON UNIT $ (0.10) $ (0.11)
========= =========
See Notes to Unaudited Pro Forma Financial Statements.
14
GENESIS ENERGY, L.P.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2005
(In thousands)
Historical Pro Forma Pro
Genesis Adjustments Forma
REVENUES $ 256,600 $ 256,600
COSTS AND EXPENSES:
Crude oil, pipeline operating and CO2 marketing costs 251,744 251,744
General and administrative expenses 858 858
Depreciation and amortization 1,526 1,526
Net gain on disposal of surplus assets (371) (371)
--------- ----------
Total costs and expenses 253,757 253,757
--------- ---------
OPERATING INCOME 2,843 2,843
Equity in earnings of investee $ 250 (d) 250
Net interest expense (355) (223)(e) (578)
--------- ------- ---------
INCOME FROM CONTINUING OPERATIONS $ 2,488 $ 27 $ 2,515
========= ======= =========
BASIC AND DILUTED NET INCOME FROM CONTINUING OPERATIONS PER COMMON
UNIT $ 0.26 $ 0.26
========= =========
See Notes to Unaudited Pro Forma Financial Statements.
15
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2004 AND THE THREE MONTHS ENDED MARCH 31, 2005
The pro forma adjustments to the unaudited pro forma statements reflect the
following:
(a) Investment in T&P Syngas - This amount represents the purchase price
Genesis paid to TCHI for a 50% interest in T&P Syngas.
(b) Other assets - Genesis paid a deposit to TCHI that was included in
Other Assets at March 31, 2005. This adjustment reflects the
reclassification of that deposit to the investment.
(c) Long-term debt - Genesis borrowed funds to complete the acquisition
under its existing credit agreement.
(d) Equity in earnings of investee - This adjustment represents Genesis
equity in the earnings of T&P Syngas for the period, net of the
amortization of the excess of Genesis's investment over its share of
partners' capital of T&P Syngas. Genesis paid $4.1 million more for its
interest in T&P Syngas than its share of partners' capital on the balance
sheet of T&P Syngas at the date of the acquisition. This excess amount of
the purchase price over the equity in T&P Syngas is being amortized using
the straight-line method over the remaining useful life of the assets of
T&P Syngas of eleven years. The pro forma statement of operations for the
year ended December 31, 2004, included $1,023,000 as Genesis's pro forma
share of the earnings of T&P Syngas, reduced by amortization of the excess
purchase price of $359,000. The pro forma statement of operations for
the three months ended March 31, 2005, included $340,000 as Genesis's pro
forma share of the earnings of T&P Syngas, reduced by amortization of the
excess purchase price of $90,000. The insurance proceeds received by T&P
Syngas in January 2005 related to an accident in 2000 have been excluded
from the earnings of T&P Syngas for purposes of the pro forma adjustment.
(e) Interest expense - The adjustment for interest expense reflects
interest computed on pro forma increases in debt balances using the
prime rate in effect during the respective periods, as adjusted for
the margin over the prime rate applicable to Genesis credit
agreement. The effective prime rate used was 4.34% and 5.43% for the
2004 annual period and 2005 three-month period, respectively. If
interest rates had been 0.125% higher during the 2004 annual period
and the 2005 three month period, interest expense would have been
approximately $15,000 and $4,000 greater, respectively, than the
amounts shown in the pro forma statements of operations.
16
(c) Exhibits
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GENESIS ENERGY, L.P.
(A Delaware Limited Partnership)
By: GENESIS ENERGY, Inc., as
General Partner
Date: June 16, 2005 By: /s/ ROSS A. BENAVIDES
-----------------------------------------
Ross A. Benavides
Chief Financial Officer