Welcome to the 2018 Fourth 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 in 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 at 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 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.

Good morning and welcome to all. As mentioned in this morning's release, we announced record segment margin of 185.5 million in the quarter, which is a testament to the strength of our underlying diverse business segments. This was primarily driven by continued over performance in our soda ash business and continued ramp up of volumes on our Louisiana infrastructure. We try to provide a little more detail in the release because for whatever reason we don't usually get a lot of live participation in our calls. As we have previously alluded, we have identified and are currently evaluating several organic growth opportunities that are complementary to our existing core businesses with apparent multiples to adjusted EBITDA plus or minus 5 times. In conjunction with our desire to internally fund these potential investments and possibly other future opportunities as well as to further strengthen our balance sheet and maintain our financial flexibility, our Board of Directors has made the decision to hold our quarterly distribution rate flat at $0.55 per common unit, beginning with the distribution attributable to the quarter ending March 31, 2019. We intend to use our capital for the highest and best use for all of our stakeholders. We will revisit our distribution policy quarterly, but we currently expect for our quarterly distribution rate to remain at $0.55 per unit for the foreseeable future. For those that have followed us closely over the years, I would mention that our distribution coverage ratio would have been greater than 1 times in each quarter since we reduced our distribution on October 2017, even had we not reduced quarterly distribution. Turning to our quarterly financial results, our businesses continue to perform well in the quarter and we generated recurring financial results have provided 1.66 times coverage for our increased distribution. I…

[Operator Instructions] Our first question comes from the line of Theresa Chen from Barclays.

Good morning. Thank you for taking my questions and certainly appreciate all the color and guidance. Related to your offshore segment, in terms of your comments about the competitor pipeline being oversubscribed and diverting volumes to your systems, can you quantify how much that contributed to the segment margin this quarter and remind us again where do you see it ramping on a dollars per quarter basis for the next 12 to 24 months?

We had no significant effect of it in the fourth quarter. It’s just reported. We would anticipate it to start showing up in the first quarter reported financial results. I think that it's possible, I’m doing the math real quick in my head. We could see it get upwards of $5 million to $7 million a quarter, not necessarily in the first quarter, but as we ramp through 2019, it's our belief that based upon what we are seeing currently, which we’ll be in a position to discuss when we release first quarter of what we're saying currently and given the drilling activity that we believe is happening on some of the fields that are dedicated to the other pipeline in question that we would anticipate that everything else is same for that number to ramp up as we go through 2019.

Got it. And for the tiebacks in the second half of this year as well as the incremental volumes over the next three years that you’re in the process of securing, can you also quantify what kind of segment margin upside is expected from these developments?

Well, I mean as a general proposition, it's plus or minus, the long haul segments are to shore around $1 to a little more than $1, $1 to $1.20 or so, would be the long-haul to shore, to the extent that the tiebacks come in on a lateral and on top of that, we would get a lateral fee. But some of this will be split obviously between Cameron Highway, which is a 100% owned facility for us and Poseidon, which is only 66% owned, so 64% owned. So, but all in all, I think that you can do a little bit of arithmetic around what we anticipate, obviously that we'll see some amount, although it's not what people depict in cartoons of declines from existing production and existing fields. But I think that net-net, these incremental volumes that we see far outpace any amount of natural decline and that it's a net positive as we sit here today.

Understood. Turning to sodium minerals and sulfur services, can you provide a breakdown between what the contribution was with the term soda ash versus the legacy refinery services business for 2018?

We don't break that down, other than I would say that on an annual basis, we exceeded the 165, 175, order of magnitude around little over $5 million on soda.

On the top-end?

Yeah.

Okay. So, if you're in that like 180 range, then you expect the soda ash business to strengthen in 2020 through 2021, do you have a new range in mind of what you can achieve there?

I don't think that we're -- I mean, I think what we're trying to say is that the 2018 performance I think is at least for the next couple or several years, that we would anticipate improving from that 2018 run rate.

Okay. And then in terms of onshore, just to clarify, the $15 million annual EBITDA reduction in 2019, how much is that relative to what Scenic Station did in 2018?

I think that -- I think we're prepared to divulge that we -- in the fourth quarter, I think we moved just under 115 KBD to Scenic on average in the fourth quarter. So we would anticipate that, that would have been otherwise the run rate we would have anticipated. And for internal purposes, we're basically taking that down to the minimum bill levels for the first couple of -- first half of the year and hope that, certainly by the fourth quarter that we get backed up with those ranges.

Okay. And MVC, is it still at 40?

Yeah. That's correct.

Okay. So when you were talking about the smoothing effects of how the delta between, if they ship below and then they see, they can apply that to times when they ship above, what are your expectations for the actual throughput in the first half then?

Well, it's pretty close to zero in February and March. And we, this is, you can't -- so it's a long supply chain management issue, you can't turn everything back on on a dime. I think that if you look at the futures market that spreads indicative starting in April and go forward would indicate that rail economics would be supported. But the way the mechanics work, I mean just to do the simple arithmetic, given that you throughout the number, if they did zero but paid for 40 in one quarter, the next quarter, if they did 80, we would still only get paid for 40, because they would have built up a bank to make up the delta.

That makes sense. And what was the actual throughput in January, if you don't mind sharing?

I don't think that we're prepared to release that.

Okay. Can you talk about when that MVC contract rolls off?

It stays at that level through 2020 and then steps down I think to a smaller number through March 2022.

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

Hi. Good morning, guys. I'll try to just keep it to two or three questions. First off, can you confirm CapEx for 2018 that was spent?

For growth CapEx for 2018, it was about $83 million, Shneur.

And maintenance?

Maintenance is also about -- for the full-year, about $80 million.

Great. In terms of the project that you were talking about, I think you talked about a five times multiple project. Can you give us a little bit of color on what you're considering in terms of dollar amounts? And if you were to FID them, how much percentage wise would end up in 2019 CapEx spend?

I don't know that we're prepared to release any of that at this point. I think once we FID that we would probably discuss that. When we do that, I do, I mean, I would say that most of these projects are, a, are longer lead time projects, and therefore the spend is over two or three year period. So we don't -- what we are keen on doing, obviously is managing our overall capital structure that we can efficiently fund these internally without putting any pressure on any places within the capital structure.

Okay. So just sort of thinking aloud, based on the guidance that you've given and where the CapEx would be for this year? It would seem that you would be free cash flow positive, if you were to FID those projects, are you saying that you would still expect to be free cash flow positive and leverage reducing this year?

I don't know that, I can necessarily say that, but I think that our intent, Shneur, is to be able to take advantage of these opportunities, as they arise and still meet our leverage targets that we've laid out.

Okay, fair enough. In terms of your, the projects that you've put into service over the last two or three years, can you talk about how they've actually performed in terms of return, I guess expressed in the multiple versus your original expectations for these projects?

I think that we've talked a little bit about, we've obviously exited Wyoming, at a net book gain from what we spent there. We've talked about a little slower ramp due to some issues, integrity issues, downstream in Texas, so that's probably, everything else is same, been a little bit slower ramping than what we had originally anticipated. I think that, based upon fourth quarter in Louisiana, and prior to December 2, the anticipation that our customer had of even increasing the usage beyond what we actually did in the fourth quarter, that we've been very pleased with how Louisiana has gone. We do other things there, besides Canadian crude by rail, and we anticipate being in service center and around the Baton Rouge refinery for decades to come on a variety of service capabilities, not just Canadian rail.

Okay. In terms of the new projects that you're thinking about, could we assume that on this go around that they're more likely to be contracted with some sort of minimum volume commitments, and is there some learnings from past projects that get applied to this one to ensure five times return multiple?

I think that to the extent that we can, we will have such timing and commercial use risk abatements and contracts as we can possibly get.

All right. That makes sense. That concludes all of my four questions. Thank you very much.

Thank you.

Our next question comes from the line of Ethan Bellamy from Baird.

Hi, Grant. Sorry for the preamble here, but we've got three big changes in the crude market, the Venezuelan Heavy being redirected, waive of Permian pipes, and then IMO 2020. You mentioned the inland barge demand as an opportunity. I'm wondering with these three big changes that are happening over the next say year and a half, are there any risks ahead to your fundamental business? And are there any other opportunities that are opening up here with these three changes?

I think, that relative to the inland comments that I made, I think that the IMO 2020, which really, I think, we believe that's going to require moving a lot of intermediate refined products, which are heated and require internal heater barges. So it's not crude oil related, it’s moving intermediate products to protect from one refinery location to another, so that it can meet ultimately their finished products whether or not it's diesel or no-lead, can meet the more stringent requirements coming under IMO 2020. So we think that that's a positive, as because some existing refinery locations aren't capable of meeting some of those requirements. And then we've made reference to, for our larger vessels, which are ocean-going barges, at least the five dirty ones that we have, which are 110s and 135s, relative as well as the American Phoenix, which is still under contract with P66 through September 2020 that what we have seen is, as more and more of the Permian barrels or Eagle Ford barrels are ultimately DJ and PBR barrels, may or may not hit the Gulf Coast kind of, in our opinion, they need to be exported either technically to international markets or potentially to the East and West coast to pad 1 and pad 5 refineries. And we have seen an increase in demand and day rates for Panamax Jones Act vessels, as well as larger crude capable ATVs. So we think that that is a positive for the marine side. So again, we're not sitting here and wishing and hoping, because it's not a very good strategy of getting back to 2014, 2015 type run rates. But we do see some positives, those macro dynamics that you mentioned Ethan, potentially playing out for the demand for our types of existing reinvestments.

Okay. And then sticking with the vessel theme, are there any one-time dry-dock or any other vessel related items that we should be modeling this year?

We have, I mean it's nothing out of the ordinary, we have a fairly robust inland dry docking. But I think consistent with 2018, so I don't -- nothing ordinary.

Okay. And I just want to be clear on the new distribution policy moving to the financial side. If you hit four times debt to EBITDA, does that mean distribution growth would restart or is there any other gating factor that would sort of allow the policy to change again?

So I don't think that we have any bright lines on anything other than as we're trying to say that, I think that it is our intent to use our capital, which is a scarce resource to the -- for the highest value of use. And so that's ultimately something beyond internally funding, what we perceive to be kind of core high return long-term projects, maybe it's additional distribution growth, maybe it's a one-time special distributions, maybe it's ultimately unit repurchases, but with a, as a [indiscernible] reasonably dysfunctional equity market, the dollars are more valuable for us to create long-term value with the core investments.

Your next question comes from the line of Kyle May from Capital One Securities.

Good morning. Just wondering if you can talk more about the potential growth opportunities that you're evaluating. I know, excuse me, in the release you mentioned one offshore opportunity, but just wondering if you can give us a sense if other opportunities are all in the offshore segment? Or if they could complement other areas of the business?

I think, I mentioned that we're evaluating some things relative to our existing footprints in both Texas and Louisiana in terms of potential export opportunities or international export opportunities. But importantly, and we've talked about this somewhat publicly is that, there is an expansion opportunity of our existing footprint, soda ash operations in Green River, Wyoming, that we believe is one of the, if not the -- most economical lumpy expansions in international soda ash world of approximately 700,000 tons of incremental production capabilities. So currently given the macro that we gave on the soda ash market, tight in '19 and probably tighter in '20 and '21 by implication, that means that it would, absent any kind of dramatic change to demand, and no change to supply outlook, but even greater needs for incremental supply in an already tight market three years down the road, just happens to be -- be three years from the -- once we FID and expansion before we would see first production. So those are -- that's another type of thing that we're looking at.

And maybe could you talk a little bit more about how you're thinking of balancing your leverage targets with the potential for these expansions?

Well again, I think that we believe that we're rapidly approaching free cash flow positive. You can see that we believe that without capital that we have a fair amount of growth in front of us, which will just increase the amount of free cash flow with disciplined approach to the distribution that the Board has taken relative to these opportunities in front of us. We think that we have a fairly good line of sight of being able to capitalize on these opportunities and still meet our ultimate leverage targets of getting down to less than four.

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

Hey, guys. I'm sorry I had to join the call late and maybe I missed this, but as you continue to work down towards your leverage targets and you've got such healthy coverage. Do you get more aggressive about maybe rationalizing assets that don't feel like they are core to your growth at this point, as part of your funding for growth projects?

It’s certainly something that we would, we always take a look at, and we don't, and we never say never. But that's not something that we're actively out, taking a look at, at this point.

As there are no further questions at this time, I turn the call back over to the presenters.

Okay. Well that ends the call and we appreciate everybody's participation and we'll talk in another 90 days or so. Thank you.

This concludes today's conference. You may now disconnect.