Good morning. Welcome to the 2020 First Quarter Conference Call for Genesis Energy. Genesis has four business segments. The Offshore Pipeline Transportation segment 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 segment 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 segment is engaged in the transportation, handling, blending, storage and supply of energy products, including crude oil and refined products. The Marine Transportation segment is engaged in the maritime transportation of primarily refined petroleum products. Genesis’ operations are primarily located in Wyoming, the Gulf Coast States 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 Ryan Sims, Senior Vice President, Finance and Corporate Development.

Good morning. I would doubt most of you are all that interested in the results for the quarter ended March 31st. Nonetheless, we had a pretty good quarter, as discussed in greater detail in the earnings release we issued earlier this morning. As we pointed out several obvious challenges by no means unique to Genesis started to arise in February and March, and then continued into the second quarter. So, let's just cut to the chase. Our and virtually every other energy industrial company’s operating environment is the most challenging it has likely been in multiple generations, driven by the demand destruction of shutting down large swaths of economic activity across the world to deal with COVID-19. There will be a recovery, just no one knows when it will start, although maybe it has, or what it will look like. In our particular case, we believe we have already taken all the necessary steps and have all the tools we need in place to navigate through the next few quarters and be able to maintain our financial flexibility and manage our balance sheet, and especially compliance with the covenant or senior secured credit facility. With the proactive decision to reduce our quarterly distribution, we reduced our recurring annual cash obligations by approximately $200 million, bringing our run-rate to around $410 million to $420 million per year, inclusive of maintenance capital spent but before growth capital and asset retirement expenditures. With limited growth capital and asset retirement expenditures of approximately $50 million over the next 12 months, our adjusted EBITDA would have to be less than, call it $470 million for us to not be a net barrier of debt outstanding over this period. Looking forward, given our recurring cash obligations and de minimis growth capital requirements outside of the Granger…

Thank you. [Operator Instructions] And we have our first question from the line of TJ Schultz with RBC.

Just on onshore. So, you've had periods before with zero rail volumes, but there have been some other moving parts. If we just look back to the first quarter of last year, I think there were zero volumes for much of the quarter and segment margin was in the $25 million range. Is that a fair snapshot of what the take-or-pay agreement supports? And then, if you can kind of walk through the step-down and the take-or-pay in '21and '22, and if we assume zero volumes persist? Thanks.

TJ, that's -- I don't know what else was in the first quarter of last year but that seems to me to be high relative to the minimum volume levels. But -- so again, I don't have all of that data right in front of me to be overly responsive. But, that does seem high on an MVC run rate basis. As I recall, it steps down, at least the portion that is reflected, it steps down to about 75% or so of what it ran -- or what it’s running in 2020 through most of '21, and then, another slight step down, maybe to 50% percent of that in the first quarter of '22. And then, I think it expires at the end of 2022.

Okay. And then, in onshore marine, you pointed to some potential opportunities to benefit from contango. Can you just try to quantify that opportunity for you this year?

Well, we don't really have normal storage, like other people do. But, we do have operational storage and we have a little bit of flexibility across our system. I would say that we can -- in terms of total volumes that we could stick in our operational storage that wouldn't interfere with our other ongoing operations as order of magnitude around 800,000 barrels across all of our facilities. And so, depending upon what the overall contango is and what the roles are, and I mean, I think that we could probably expect to -- again, potentially make $5 million to $10 million in 2020, potentially a little bit more, depending upon how long the contango lasts. I don't quite understand the strength in the current front month, given the total macro fundamentals. But, we'll see how everything shakes out.

Okay. I understood. Just last one. So, Granger facility holding in hot hold mode, it says through the end of September. Just kind of what are you looking for there to bring that back into production? Thanks.

Well, as we’ve said earlier, the Granger facility is currently configuration prior to restoring it to its original 1.2 million 1.3 million ton a year capability, is really running about 550,000 to 600,000 tons a year on an annual basis. So, taking it down six months is basically the equivalent of 300,000 total tons. And we'll just have to -- we have to evaluate as we go through the remainder of 2020 and then start seeing whatever recovery there is in 2021 to make the decision of whether or not we bring it back up at the end of September. So, it's just really a matter of balancing sales with production. It's the highest cost because of this inefficiency having high fixed cost if you will running it basically 40% or so of its design capacity, which is why it's such an attractive expansion capability once we get it back up and running to where it was originally designed for. Then, it's a very, very attractive expansion capability. So, we just have to see how things kind of unfold over the next six months before we make that decision.

Okay, understood. Thank you.

Thanks.

Your next line of question comes from Shneur with UBS.

Hi. Good morning, everyone. Grant, thank you for the sober and reelecting shift today. I just wanted to start off a little bit first on the Gulf of Mexico. Obviously, there's been a lot of reports about shut-ins and so forth. But, if I recall, you may not have exposure to some of the names that people are talking about with respect to shut-ins in the Gulf of Mexico. Is there a way for you to remind us where the majority of your exposure is kind of like on an operator basis?

I'd rather go from naming operators and stuff. I think, I tried to give again under confidentiality, and I don't know whether or not it's material from a public company point of view for us, but it's just not appropriate for us to name individual operators and/or individual fields. But I've tried to give you a little bit of flavor for that it’s not significant from our perspective from a financial point of view.

Okay, fair enough. Then, secondly, I was wondering, given where you’re currently trading at and so forth, do you see any opportunities to acquire debt in the open market or have you actually done so already at this stage?

We were somewhat surprised by the Federal Reserve's announcement on Thursday before Good Friday, whatever day that was, where -- which I think was an extreme moral hazard of the Federal Reserve actually buying securities in the secondary market and not being --- not serving as a lender of last resort. Presumably, it was to fetch a bid in the high yield market for fallen angels. But nonetheless, the bonds have I think rallied back up into the high 80s or something like that. And at that point, I think that we have to evaluate whether or not that's a realistic opportunity, whether or not we'd be interested in acquiring bonds at that.

Okay. Moving on, I was just wondering if we can talk about Granger the hot idle. What are the costs to keep it in hot idle mode, either by month or by quarter? Like, how should we think about that from a cost perspective, so, if you don't have the revenue coming in?

I don't know that I have that exactly in front of me. I think that we're looking at redeploying -- the main cost is going to be personnel and power costs and consumable costs. And so, obviously, we're not going to have that. And we're looking at redeploying some of the personnel. And in fact, we've offered and have worked an agreement with the union there to have voluntary furloughs over the period of time under which we are going to have it temporarily held in hot hold mode. So, I think that it's not a big dramatic run rate cost. And if these kind of prices, even on the variable operating expense basis, it's probably not worth us to continue to run. And there's limited storage. So, it was the best thing that we had to do to balance the -- material balance between our production and our sales.

Okay, fair enough. I’ve just got two more questions. You gave a lot of good color on the soda ash market and kind of what the drivers are and so forth. But, given the fact that Asia tends to reprice more often in the soda ash market, and that's where the recovery is starting first. Have you seen any positive price developments coming out of the Chinese market, or is there demand currently just being satisfied by inventory from elsewhere in the world being redirected to China?

I think that the inventories were high inside China as well as the Asian economies outside of China, as we discussed going into the end of the year and prior to the obvious outbreak and mitigation efforts associated with the virus. I do think that it’s probably -- we're going to see a return of production capability on the synthetic production prior to the May, in all likelihood outstrip the return of demand. So, I think that -- and I think what we’re going to see that is more and more of the world economies, and it's not just unique to soda ash, but I think it's going to be easier to quote unquote, industrial production rather than return on the demand for industrial products. So, long-winded answer is that we don't we don't see the dynamic setup that we're going to see increased pricing. But, as I said in the prepared comments, it's really not a matter of price at this point. It's a matter of the total quantity demanded. And if that doesn't turn around quickly, it's our belief that these prices that synthetic producers in China, both domestically as well as competing for exports are losing money on a cash basis. So, it's going to be interesting how long that people are willing to do that prior to adjusting the production.

Okay. And one last final question, if I may. You put Granger on hot idle, obviously expense reduction there. Are there any other cost cutting measures that you're taking throughout the organization right now? And it didn’t sound like it would be more lasting than just due to coronavirus environment?

I think that we are -- certainly our focus over the last several months has been on the safety of our employees and continuing to be able to deliver safe and responsible products and services to our customers. I think that we're comfortable that we've achieved that. And we are going to focus on whatever the next normal really means. There's four of us in the office today sitting in a room that consists of 22 people or something. So, there's lots of interesting changes that are likely to occur, but something that we're going to start focusing on and probably be in a position to share with everyone, by the time that we have our second quarter call.

Perfect. Well, thank you, Grant. I really appreciate the color today. And stay safe.

Thank you, Shneur.

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

Good morning. I wanted to start by revisiting your guidance for the year for just a moment. You mentioned that Genesis expects to finish the year at the bottom end of the guidance range, if not below. Can you help us kind of frame up some of the different scenarios that would place you, either at the bottom end of the range or kind of help understand like what is the potential below?

I'm not sure that we're willing to go a lot beyond that. But I think that -- I mean, there is a number of scenarios, and I don't want to say that we have a tremendous amount of uncertainty. But, I think that you might see something more triangulate towards, call it to 620 to 640 range as the bookings of maybe a little bit above where we think they were coming out. But, again, we're five weeks into the second quarter, and we have different things in front of us, primarily -- the main things are going to drive and have the variability between now and the end of the year or there is the rapidity of the recovery and demand for soda ash and NaSH, which is again, primarily used in copper mining, which -- and pulp and papers businesses. So that's really the -- enough pricing as volumes. So, that's really what's going to drive the delta between lower or higher for the year.

Okay. That's helpful. And even though, it sounds like you're not really expecting any volume declines in the Gulf of Mexico, can you remind us if there's any MVC contracts in the Offshore Pipeline Transportation segment, or is that all based on throughput?

The older generation contracts are, and I'm talking about the ones we entered into in 1995 to 2010, which are still producing by the way, to give you an idea of the longevity of these agreements, that those primarily do not have MVC agreements, newer generation contracts, not all but the vast majority of things that were entered into call it 2010-2012 time period forward. The majority of those do have MVC agreements. We rarely collect under the MVCs as mainly just from a timing point of view. But, there's very few instances where the producer doesn't actually -- because they've spent billions of dollars. In some cases, we don't spend anything. But, there's very few cases where they don't meet and exceed the MVCs.

Okay. That's helpful. Thank you.

Okay. Thank you.

And that was our last question.

Okay. Well, thanks everybody. And we'll chat again in three months or so. Thank you.

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