Welcome to the 2018 Second Quarter Conference Call for Genesis Energy. Genesis has four business segments: The Offshore Pipeline Transportation Division is engaged in providing critical infrastructure to move oil produced from the long-lived world-class reservoirs from the Deepwater Gulf of Mexico to Onshore Refining Centers. The Sodium Minerals and Sulfur Services Division includes trona and trona-based exploring, mining, processing, producing, marketing and selling activities, as well as the processing of sour gas streams to remove sulfur and refining operations. The Onshore Facilities and Transportation Division is engaged in the transportation, handling, blending, storage and supply of energy products, including crude oil and refined products. The Marine Transportation Division is engaged in the maritime transportation of primarily refined petroleum 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 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. As mentioned in this morning's earnings release we have entered into an option agreement to sell certain non-core assets. In return for the option and we were received a $30 million upfront option payment which would ultimately be applied to the final purchase price subject to certain terms and conditions. We were in a position at this point to announce the option is for Powder River Basin assets and the option holder is Silver Creek Midstream in conjunction with Tailwater Capital and the Energy and Minerals Group to large sophisticated and respected energy focused investment shots. Whether it can be no guarantees that we ultimately consummate and close a transaction we currently expect to sign and close in the third quarter. Proceeds from the sale would be used to paydown outstandings under our revolving credit facility and for general corporate purposes. On a pro forma basis we would expect us to reduce our bank compliance leverage by more than 3/10s return and meaningfully contribute to our ultimate long-term goal of around four times or less on our leverage calculation. Turning to our quarterly results, our businesses in the quarter continue to perform well and delivered financial results have provided 1.55 times coverage or sequentially increased quarterly distribution. Something that we're focused on is performance below our expectations in our offshore business. Three particular major fields have underperformed our expectations over the last two or three quarters. One field we believe is underperforming as a result of reservoir quality degradation and not due to mechanical factors. Offsetting this in future years are two subsea tie-backs to the same dedicated in-field production facility scheduled to come online; one in early 2019 and one later in 2019. Between now and then, however, our segment margin will be around $5 million a…

[Operator Instructions] Your first question comes from the line of Shneur Gershuni from UBS. Your line is open.

Hi. Good morning, guys. Maybe we can just start off with the challenges that you highlighted in the offshore segment. Given the fact that there was an actual - you even shared with us what your expectations were before versus now, but you've given us the delta on it. At the same time you've said that if field is been underperforming for the last several quarters, are we to understand that the $10 million a quarter effectively that was called out or at least $5 million on the ongoing basis would suggest that this quarter would have been $5 million higher? Or are we saying that it's going to degrade further by $5 million on a go forward basis from where you are today? I'm trying to understand what's been baked in and continuing verses degrading further?

The $5 million is already baked in, but we don't see that coming back although not in consequential portion of that will be made up, if not exceeded when the two subsea tie-backs to the same field or consummated by the end of 2019.

So is the way to look at it, you look at today's results, it would have been $5 million higher affectively? So why you have exceeded expectations, what you would have implied higher than that?

Exactly.

Okay. Just wanted to clarify that, secondly with the asset sale, I just wanted to understand some of the mechanics with respect to it. You've already received a $30 million non-refundable payment that you get to keep no matter what happens with this outcome and in sort of trying to triangulate and obviously we're missing some components here. But you talked about a point three times leverage improvement with asset sale. Are we talking something in the $400 million to $500 million range in terms of a valuation number?

I'm not in a position at this point to devolves that, but we would anticipate as - we said we anticipate the option being exercised in fairly short order and so more information around the overall transaction will be forthcoming shortly.

Okay and two more quick follow-ups. Your goal in terms of the leveraged goals that you had laid out, there was actually a range, but like for example you said you'd be approaching 4.75 times to less than five. Are those targets still valid at this point right now it's just towards the middle or higher end of that range or do those targets get revised?

I think that we - earlier whether or not as the fourth quarter or as the first quarter we had said that getting all the way to five at the end of 2018 was going to be probably difficult, primarily because of we were continuing to spend in Wyoming. But so not only we still think that that's going to be a little difficult to do on a TTM basis or an LTM basis at 12/31. Although with an annualized fourth quarter, we think that we will be on top of it. But we do think if we continue to believe that the 2019 and 2020 targets are still reasonably achievable. Although there may be pushed out a little bit as we kind of got it just because we're missing a little bit of the anticipated EBITDA that we just talked about.

And one final question, Onshore segment did well. It looks like the long awaited ramp of Baton Rouge is finally happening, when we think about the maximum capacity of what that can do the volumes during the quarter. What percentage utilization does that sort of represent at this stage right now because you sort of suggest by the meaningful upside that we're not quite near full-year?

Yes, I mean I think that we realistically we can do two trains a day from a capacity point of view. But that's not where we're - we haven't seen that yet, but we do see some ramping coming up and I think that we anticipate that based upon what we've seen in the capacity expansions on the CP and the CN that coming out of Canada that the market dynamics are certainly there to see meaningful volume ramps in the third quarter. We're seeing those and continuing on into the fourth.

Great, thank you very much. Appreciate all the color today.

Thank you.

Your next question is from the line TJ Schultz from RBC Capital Markets. Your line is open.

Hi, great. Thanks. I guess just first a quick follow-up on that last point. On the Canadian rail capacity expansions, is there - has this opened up enough or do you have a line of sight to get two trains per day at Scenic Station?

Again that's a capacity situation. I would say that we've seen nominations that would indicate on average at least 1.5 trains a day on average.

Okay. And then back on offshore volumes. Those volumes that you are expecting to get from dedications away that will or may need to use your pipes. What's trigger the hurdles for you to get those volumes and I think you said that could have an impact of $7 million per quarter for you all?

The trigger for it is basically is competing pipeline and ramps to its capacity and therefore it have no other way to go except to be dropped off. There are some other means there are some interesting plumbing with some interconnectivity elsewhere, but we have seen nominations starting in August which we - for prospective periods and producers are interested in entering into 12-month to 24month contracts to provide the capacity that is going to be required to move their production, because it can't move on the pipelines dedicated to.

Okay. And the assets sale are you able to give the current run rate EBITDA associated with the PRB assets you're looking to sell?

No, we're not in a position to do that, but our calculation of the overall effect on our calculated ratio is basically a round term that included the net proceeds from the overall assuming that the transaction closes as well as backing out the LTM EBITDA.

Yes, okay understood. Just lastly on leverage and distribution I certainly understand you have plenty of coverage on the distribution and I just want to confirm or get your view if there's any plan on reevaluating distribution policy again just to get that leverage down sooner or is this just something that you think you have time to kind of wait out?

I think that we - as we discussed almost a year-ago when we at the cap reallocation that we will evaluate on a go forward basis what the ash value use of our capital and but it does point we see nothing that would deviate from what we laid out back in October.

Okay. Thanks Grant.

Your next question is from the line of Theresa Chen from Barclays. Your line is open.

Hi, on the soda ash business is that $10 million guidance sustainable for 2019 as well or does it know if they have to do with competitor facilities abroad facing issues today?

We feel that the market fundamentals in the dynamics are such that it's sustainable into 2019.

Got it. On offshore can just give us a bit of history on how you came to adjust our estimates for the reservoir quality for the field in decoration and how like comfortable what do you feel about the rest of the estimates in the near term for the other fields?

Well we saw a continued precipitous decline and we don't have the inside and direct knowledge and kind of reservoir engineering data that we came to the conclusion that this was not something that was going to snapback. So we did an evaluation kind of the 12 months ending 6/30/2017 versus 12 months ending 2018 on that. And that was the Genesis no pun intended over the $5 million a quarter of underperformance that we did not expect. So we are making the assumption that is not coming back. And on the other fields basically, again as we said, we rely upon a good place, the estimates of the production coming from the fields to put into our forecast both for financial purposes as well as capacity and in physical operation purposes. What they have certainly not met, what they told us to expect even last year. So we've kind of recalibrated our expectations that's not coming as rapidly as what we had anticipated or not be where we thought it would.

Got it. Thank you very much.

Your next question is from the line of George Wang from Citigroup. Your line is open.

Hey guys. Good morning.

Good morning.

Just a couple quick questions. Firstly, just in terms of unit buyback versus debt payment, any thoughts on kind of when that the Board may or may not eventually approve the unit buyback just considering the Genesis still trading at a substantial discount versus peers?

Thanks. Once we get comfortably under [$5 million] it certainly something that we could evaluate as a Board in terms of - if we still think that if the point the unit share undervalued, but getting our financial flex - maintaining our financial flexibility we think that we have a number of opportunities that we have good places to deploy our capital. Again, if we think that that's the best use of the capital, buying back units will certainly be on the radar screen.

Gotcha. And secondly just in terms of deal flow and beside this coming PRB asset sale, are there any more sorts of non-core assets chopping blocks, you guys are looking at?

I don't know that I'm saying the blocks or anything, but there's other - we have other pockets of assets which I would say are non-core, but we have nothing pending or any kind of processes or anything else. But we are continuing to sharpen our focus on where we have dominant and quality market positions. We think that's a good place to focus.

Gotcha. And lastly, but just in terms of Marine segment, you guys guided by the next few years it's going to stay depressed. So is there any kind of catalyst like you guys can see for a stronger recovery beyond expectation? I just wonder what it can sort of cost the segment to perform much better with the expectation going forward.

I mean I think that the best thing that could happen would be domestic differentials blowing out to the point that it would absorb some of the marine capacity that move crude oil from point A to point B and that primarily mean Gulf Coast destinations to eastern West Coast which would soak up a lot of marine transportation assets. With all of the March moving the bottleneck from the Permian to Corpus Christi Houston area that's a potential likely outcome. And so from an overall industry point of view, Houston or Corpus starts trading in a significant discount which it might once you just kind of debottlenecking get the stuff down then those differentials would support marine transportation to pad one, pad five. But when that occurs, I'm not exactly sure. But that's an illustrative of what could more near-term kind of probably provides some overall relief for the marine transportation sector.

Okay. Thanks so much.

Your next question is from the line of Barrett Blaschke of MUFG Securities. Your line is open.

Hey, guys. A lot of mine have been asked, but just to kind of housekeeping here. On the $5 million from basically slower production - is that the same $5 million from degradation of the other field or is that [$5 million and $5 million]?

$5 million and $5 million.

$5 million and $5 million, okay. So $5 million sort of expected to come back and $5 million sort of staying offline, okay. That helps. And then just notice the Free State volume seem to be sort of slowly on the uptick. Is that just a function of commodity price today or what's driving that?

Well, as you're probably aware, Denbury is the primary shipper to the extent that our prices support additional - we would expect and if that's what is occurring and we would expect volumes of Free State to ensure way.

Okay, thank you.

Your next question is from the line of Patrick Wang of Baird. Your line is open.

Hey, good morning everyone. Looking at the soda ash business results there continue to impress. But can you comment on the current spot market with the recent softening in Chinese prices and what if any implications you have at this point on contract renewals heading into year end?

It's reasonably sensitive at this point, but again I think that everything else the same as we said that export prices in the first half of the year have exceeded at our expectations as we entered the year and we believe those market fundamentals are in place to continue exceeding our expectations for the remainder of the year. As I've answered in earlier question, we don't see a lot of changes in fundamentals that would back off in 2019.

Okay, thanks for that. And then my last question, on your some $750 million in preferred equity, could you remind us if you have the option to continue to paying kind of those units beyond the first on 18-month period or those become fully cash pay in 2019?

For summit to the original terms and conditions, the pick period was for 18 months.

All right, thank you very much.

[Operator Instructions] Again your next question is from the line of Shneur Gershuni from UBS. Your line is open.

Hi, guys. Just one last follow-up question, do you happen to have the CapEx for the quarter and is it still 122 for the year as an expectation?

I believe is that expectation is somewhat [indiscernible] up on what happens in Wyoming and if we close the transaction then it will relieve some of the estimated capital expenditures.

Yes, order of magnitude at the transaction close prospective CapEx for the year would be down $15 million to $20 million.

And do you having to have what was spent during 2Q?

$20.5 million in Q2.

Perfect. All right, thank you very much guys. Really appreciate that.

[Operator Instructions] There are no further questions at this time. Please continue.

Okay. Well, that concludes the quarterly call, and we appreciate everyone's attendance. Thanks.