Welcome to the 2017 first quarter conference call for Genesis Energy. Genesis has four business segments. The Offshore Pipeline Transportation Division is engaged in providing the critical infrastructure to move oil produced from the long-lived, world-class reservoirs from the deepwater Gulf of Mexico to onshore refining centers. The Refinery Services Division primarily processes sour gas streams to remove sulfur at refining operations. The Marine Transportation Division is engaged in the maritime transportation of primarily refined petroleum products. The Supply and Logistics Division is engaged in the transportation, handling, blending, storage and supply of energy products, including crude oil and refined products. Genesis operations are primarily located in Texas, Louisiana, Arkansas, Mississippi, Alabama, Florida, Wyoming and the Gulf of Mexico. During this conference call, management may be making forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. The law provides safe harbor protection to encourage companies to provide forward-looking information. Genesis intends to avail itself of those safe harbor provisions and directs you to its most recently filed and future filings with the Securities and Exchange Commission. We also encourage you to visit our website at genesisenergy.com, where a copy of the press release we issued today is located. The press release also presents a reconciliation of non-GAAP financial measures to the most comparable GAAP financial measures. At this time, I would like to introduce Grant Sims, CEO of Genesis Energy, L.P. Mr. Sims will be joined by Bob Deere, Chief Financial Officer; and Karen Pape, Chief Accounting Officer.

Good morning, everyone. As we mentioned in the release, while certain headwinds persist, we are encouraged by the performance of certain of our base businesses that have experienced specific challenges. Although the offshore continues to meet or exceed our expectations, we feel other segments are currently bottoming and poised to deliver increasing financial contributions in future periods with little or no additional capital required, as the industry ultimately recovers from cyclical lows. Even though we experienced certain delays, our growth projects are starting to contribute meaningfully and we believe will accelerate as we reach full operational capability across our suite of projects. As we sit here today, the ultimate performance of our recent investments appears likely to exceed our original expectations. The first quarter and the beginning of the second quarter have been a busy, and we believe, constructive start to 2017. We're beginning to have line of sight on record volumes to be moved on our crude oil pipelines out of the deepwater Gulf of Mexico, a trend we would expect to likely continue in coming years based on current activities by our customers. Some of the turnarounds that we expected in Q1 will not be felt until the second quarter. But again, we view these as quarter-to-quarter anomalies that are not indicative of what we feel were very solid fundamentals. This is Offshore Technology Conference week here in Houston, and we would encourage those who are interested to review some of the really informative news and data points coming out of the OTC, from the likes of BP and others who are major customers of ours in the Gulf. We are handling increasing volumes across our Baton Rouge corridor footprint, with both imports in marine-based intermediate refined products from international sources and crude via rail from Canada. We've…

Thank you, Grant. In the first quarter of 2017, we generated total available cash before reserves of $93 million, representing a decrease of $4.8 million or 5% over the first quarter of 2016. Adjusted EBITDA decreased $2.5 million over the prior year quarter to $131.4 million, representing a 2% decrease. Net income attributable to Genesis for the quarter was $27.1 million or $0.23 per unit compared to $35.3 million or $0.32 per unit for the same period in 2016. Segment margin from our Offshore Pipeline Transportation segment increased $8.5 million or 11% between the first quarter periods. The increase was the result of new production, primarily attributable to 2016 drilling activity. This activity predominantly occurred near existing infrastructure due to the attractive economics even in current pricing conditions. Our extensive pipeline network benefited ratably from the new production. Refinery Services margin for the 2017 quarter decreased $3.7 million or 17%. The 2017 quarter includes the effects of commercial discussions with certain of our host refineries, as well as a large number of our NaHS customers, which resulted in extending the term and tenor of our contractual relationships. This includes the extension of our largest Refinery Services agreement at our Westlake facility through 2026. We would expect the effects of these discussions and rework contractual relationships to continue going forward. Marine Transportation segment margin for the 2017 quarter decreased $6 million or 31% from the 2016 quarter. The decrease in the segment margin is primarily due to a combination of slightly lower utilization and lower day rates on our inland fleet as well as lower day rates on our offshore fleet, which offset higher utilization as a result of the plan -- as adjusted for planned dry docking time. This excludes the M/T American Phoenix, which is under long-term contract through…

Thanks, Bob. As discussed, our legacy businesses are performing reasonably well. And we're increasingly confident in the ultimate performance of our growth projects. The actions we have taken, including the issuance of new units or are currently undertaking, which includes going through the process of extending our current agreement, provides us financial and opportunistic flexibilities. Our significant, recent investments continue to ramp up. And our consolidated financial results resume growing. As we remain confident in our business prospects in the current environment, we continue to believe we are well-positioned to deliver long-term value to all of our stakeholders without ever losing our absolute commitment to safe, reliable and responsible operations. As always, we'd like to recognize the efforts and commitment of all those with whom we were fortunate enough to work. With that, I'll turn it back to the moderator for any questions.

[Operator Instructions] Your first question comes from the line of TJ Schultz.

First, what are the projects that are ramping or set to ramp in both South Louisiana and around Texas City, just stepping back, big picture, as we think about the EBITDA that can be generated over the next 12 months, just from those assets ramping and apart and separate from the new bolt-on that you kind of mentioned. What is the opportunity for EBITDA uplift from completing and ramping those projects that essentially require no more CapEx?

Well, I would say that our first quarter results in somewhat fourth quarter only were -- reflected contribution out of Baton Rouge. And volumes are continuing to ramp there, certainly in the second quarter. And we'll start seeing the contribution from Texas, as I said in the prepared remarks, actually went live on May 1 and is contributing today; and in Raceland, probably later in the quarter. So we think that we have not insignificant additional growth in segment margin and EBITDA between now and mid-2018 or as things begin to ramp associated with what amounts to close to 700 million or 750 million worth of cumulative CapEx. So we're encouraged.

Okay. So that 700 million of cumulative CapEx, is there any way to kind of quantify how much of that you would save in service now which is -- and what is left to kind of come in service or keep ramping, just on a percentage basis?

Probably in round terms, about half of it is in and around the Baton Rouge corridor. But that, as I said earlier, that's continuing to ramp. And while I know that this has been relative to the first quarter results, but the -- at least the volumes in second quarter, at this point, are in excess to what we saw in the first quarter, even in Baton Rouge.

Okay, that's helpful. Just a couple of smaller things on the model. First, on the offshore turnarounds that have been deferred, just any color on the impact to you all going forward, just trying to quantify the impact. And should we expect that to be isolated to the second quarter?

Yes. I think and as I try to characterize it, I mean we view them as anomalies and not, that's why kind of looking one quarter to the next isn't the best way to look at the long-lived production profiles of these world-class reservoirs and stuff. So we believe that it is likely that we could see a dip in aggregate volumes, or certainly, segment margin in the second quarter. But that is strictly transitory and wouldn't assume that in third quarter and beyond, that all of that would be kind of back on trend.

Okay. And then on the Marine segment, do you consider the first quarter kind of rebasing at the bottom? I know you mentioned things looks better into the end of March, particularly on inland and black oil and then all set by some of the blue water weakness. Maybe if you can just provide any color on run rate expectations for that segment going forward.

Well, I think that as we said in the fourth quarter call and it manifested itself in Marine in the first quarter that, and it's a little bit hard to follow because, I mean we basically, we report our utilization statistics on available days. But we had 2, extend the dry dockings of, in the first quarter. The vessels were not even available to work, even at spot prices and stuff. So that's , I think those are kind of behind us at this point. And so yes, I would kind of consider, even if the challenging macros on the blue side because of the 2 dry dockings, which occurred in the first quarter, the total Marine segment margin, we think, will be better on a prospective basis.

Your next question comes from the line of Gabe Moreen.

Just a quick question kind of on the asset sales. I think that's relatively specific and something you haven't mentioned, I think, in prior quarters, if I'm not mistaken. But the $50 million to $70 million, can you talk about, I guess, where those assets might be and to what extent you may lose or not lose any associate to EBITDA with those assets?

I'm not sure that we are prepared to specifically identify. But I would say that they're, a, they're small; and b, there's 2 of them that were kind of in different levels in discussions. And again, I've characterized it as there were, for particular reasons, they appear to be worth more for other people. I would say that in this kind of, they are miniscule. And from our perspective, the cell would be at a, again, from our evaluation, would be a very attractive multiple as a seller. But that doesn't mean anything that they are used and useful in other situations for the potential buyers. With them, we're having discussions.

That's helpful. And then in terms of kind of your redeploying the proceeds there. Can you maybe talk about that within the context of growth CapEx assumptions for the year? I know you're ramping down, but anything kind of on the horizon that you may use. Have you used those proceeds or anything else to it to spend...

Yes, thanks. And I think I would leave, felt like, and we said on our fourth quarter call, that we didn't have the need for anything other than the tail wind expenditures. But we, and we said that we would probably over-equitize, so to speak, new identified stuff. So I think it's fair to assume that we have identified and we will put, at least, 140 million to work. We are examining and evaluating a couple of acquisition opportunities, which make a whole lot of sense to us. But there's no guarantee. And the aggregate of those are probably north of $500 million. We're also evaluating organic opportunities, probably not in the 2017 type time frame. But certainly in an '18, '19 timeframe, that again could be upwards to $500 million. So we have lots of things that we are looking at and evaluating and trying to get to the finish line. But in terms of 2017, I think that -- again, as I referenced in our prepared remarks, that short of consummating something of scale, I agree we didn't probably necessarily define that, but we don't have any need to go anywhere else on the equity side at this red-hot moment.

I mean to follow that up in terms of scale or not scale, given that answer, can you just talk about onshore or offshore? Which segment you kind of -- maybe the preponderance of those opportunities, M&A or organic may lie?

I think it's a combination of both onshore as well as offshore.

[Operator Instructions] The next question comes from the line of Shneur Gershuni.

Just wanted to sort of follow-up to TJ and Gabe's questions. It -- when we sort of look at your cost of equity at this stage right now, the level of leverage seems to be the sort of weighing on the stock a little bit. And this is not a preface to go issue equity. I guess what I'm trying to understand right now is it sort of seemed like 2017 would be kind of this transition year. You're coming off a large CapEx spend. You have some EBITDA going up. Yet, you're extending your credit facility and so forth. When do we hit that promised inflection point? Is it something that starts to show up in 2Q and build in 3Q, 4Q and so forth? I'm just trying to understand how we should think about the cadence of when your leverage is going to start materially coming down and seeing the benefits of dropping off the spend and the increasing EBITDA?

I would say that we would expect the calculated leverage ratio to kind of probably be reasonably flat this next quarter and then start its way down, primarily as a result of the EBITDA -- cumulative effect of the EBITDA contributions that we will realize at that point in time. Then in 2018, absent any significant additional identified growth opportunities, we would just expect to accelerate that naturally deleveraging so that our increasing coverage ratio, if you will, really is excess cash no matter how you slice and dice it. And outstanding balances under our revolving -- revolver would be paid down. And therefore, in the calculation of the leverage ratio, the numerator's being paid down and is going down at the same time that the trailing 12 months or LTM EBITDA is rising. So you have a, you're kind of turbo-charging, if you will, the deleveraging process. And one of the things that I think that we had our discussions with our banks was to try to address this perceived overhang or potential overhang. And I've made reference to it, but we expanded our leverage covenant with our lenders, not that we need it. But tends to signal that things aren't as tight that some people want them, to perceive them to be from a leverage perspective and that we're not in a position where we have to go issue equity and/or we have to address our distribution policy to efficiently manage our capital structure. So that's the main point that we were trying to make with the discussion in and around the extension of our bank deal, including their evaluation of our forecast and that scheme of internally everything else the same are naturally deleveraging the process that we have in front of us.

Okay. So we should see this progress really start to show up in the third quarter and accelerate next year, right, if I can sort of paraphrase what you just said?

That's exactly it, yes.

And then a follow-up question on the Marine side. A competitor of yours recently, very recently said that they started to see pricing nudge a little bit up a little bit. Is that something that you're seeing as well too? Just sort of as production increase for all hydrocarbons in the U.S. starts to go up, does that sort of start to benefit pricing and capacity utilization for the Marine segment?

Well again, I think that I would agree with that on our inland side. In our, but our, remember, our inland side is almost exclusively in the black oil trade, if you will, the internal heater barges. All but 4 of our, actually, we have 72 internal heaters and 4 that aren't but currently in the fleet. Those work for refineries and move intermediate refined products from one location to another. And yes, I would say that we would not disagree with, because of the utilizations we said as we exited the quarter and continue to see it. For those particular sub-segment of the inland tank barge business, the high rates of utilization are a necessary condition before you could start seeing rates start to come up. But I would say that we are starting to see glimmers of rig recovery because of the tightness in the utilization.

And there are no more questions at this time.

Okay. Well thank you very much, and we'll talk to you again in 3 months or so. Thank you.