As filed with the Securities and Exchange Commission on July 15, 2010.
Registration No. 333-167189
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment
No. 1
to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Genesis
Energy, L.P.
(Exact name of registrant as specified in its charter)
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Delaware
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5171
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76-0513049
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(State or other jurisdiction of
incorporation or organization)
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(Primary Industrial Classification
Code Number)
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(IRS Employer
Identification No.)
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919 Milam, Suite 2100
Houston, Texas 77002
(713) 860-2500
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Ross A. Benavides
919 Milam, Suite 2100
Houston, Texas 77002
Telephone: (713) 860-2500
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copy To:
J. Vincent Kendrick
Akin Gump Strauss Hauer & Feld LLP
1111 Louisiana Street,
44
th
Floor
Houston, Texas 77002
Telephone: (713) 220-5839
Approximate Date
of Commencement of Proposed Sale to the Public: From time to time after the registration statement becomes effective.
If the
only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.
¨
If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box.
x
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check
the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
¨
If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering.
¨
If this form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become
effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box.
¨
If this form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register
additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box.
¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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Accelerated filer
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x
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Non-accelerated filer
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(Do not check if a smaller reporting company)
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Smaller reporting company
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CALCULATION OF
REGISTRATION FEE
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Title of Each Class of
Securities to be Registered
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Amount
to be
Registered(1)
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Proposed
Maximum
Offering Price
Per Unit
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Proposed
Maximum
Aggregate
Offering Price(2)
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Amount of
Registration Fee
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Common Units
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Preferred Securities
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Subordinated Securities
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Options
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Warrants
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Rights
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Total
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$750,000,000
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$53,475(3)
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(1)
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Securities registered hereunder may be sold separately or together with other securities registered hereby. In no event will the aggregate offering price of the
securities issued under this Registration Statement exceed $750,000,000. Such amount represents the issue price of any common units, preferred securities, subordinated securities, options, warrants, or rights. There is being registered hereunder
such indeterminate number or amount of common units, preferred securities, subordinated securities, options, warrants, and rights as may from time to time be issued at indeterminate prices and as may be issuable upon conversion, redemption,
exchange, exercise or settlement of any securities registered hereunder, including under any applicable antidilution provisions. No separate consideration will be received for any securities registered hereunder that are issued upon conversion of,
or in exchange for, or upon exercise of, as the case may be, convertible or exchangeable securities.
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(2)
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We have estimated the proposed maximum aggregate offering price solely to calculate the registration fee under Rule 457(o).
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The
Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Commission acting pursuant to said Section 8(a), may
determine.
The information in this prospectus is not complete and may be changed. These securities may not be
sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or
sale is not permitted.
Subject to Completion, dated July 15, 2010
Prospectus
$750,000,000
Common Units
Preferred Securities
Subordinated Securities
Options
Warrants
Rights
We may from time
to time offer one or more classes or series of these equity securities as described in this prospectus, in one or more separate offerings under this prospectus. This prospectus provides you with the general terms of these equity securities and the
general manner in which we will offer these equity securities. We may offer and sell securities using this prospectus only if it is accompanied by a prospectus supplement. We will include the specific terms of any securities we offer in a prospectus
supplement. The prospectus supplement will also describe the specific manner in which we will offer these equity securities. You should read this prospectus and the prospectus supplement carefully.
We may sell these securities to underwriters or dealers, or we may sell them directly to other purchasers. See “Plan of
Distribution.” The prospectus supplement will list any underwriters and the compensation they will receive. The prospectus supplement will also show you the total amount of money that we will receive from selling these securities, after we pay
certain expenses of the offering.
Our common units are listed on NYSE Amex Equities under the symbol “GEL.”
Investing in our securities involves risks. Limited partnerships are inherently different from corporations. You should
carefully consider the
Risk Factors
beginning on page 2 of this prospectus and contained in any applicable prospectus supplement and in the documents incorporated by reference herein and therein before you make an investment
in our securities.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of
this prospectus is , 2010.
TABLE OF CONTENTS
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ABOUT THIS PROSPECTUS
This prospectus, including any information incorporated by reference herein, is part of a registration statement on Form S-3 that we have
filed with the Securities and Exchange Commission, or the “Commission,” using a “shelf” registration or continuous offering process. Under this shelf registration process, we may sell one or more series or classes of equity
securities described in this prospectus in one or more offerings up to an aggregate offering price of $750,000,000. This prospectus generally describes Genesis Energy, L.P. and our equity securities, including our common units. Each time we sell
securities with this prospectus, we will provide a prospectus supplement containing specific information about the terms of a particular offering. A prospectus supplement may also add to, update or change information in this prospectus. The
information in this prospectus is accurate as of the date on the cover page. You should read carefully the section entitled “Information Regarding Forward-Looking Statements” summarized on page 34. If the description of the offering varies
between the prospectus supplement and this prospectus, you should rely on the information in the prospectus supplement. Therefore, you should carefully read both this prospectus and any prospectus supplement, together with additional information
described under the heading “Where You Can Find More Information” before you invest in our securities. You should rely only on the information contained in this prospectus, any prospectus supplement and the documents we have incorporated
by reference. We have not authorized anyone else to provide you different information. We are not making an offer of these securities in any state where the offer is not permitted. We will disclose any material changes in our affairs in an amendment
to this prospectus, a prospectus supplement or a future filing with the Commission incorporated by reference in this prospectus and any prospectus supplement. You should not assume that the information in this prospectus or any prospectus supplement
is accurate as of any date other than the date on the front of those documents.
Unless the
context otherwise requires, references in this prospectus to “Genesis Energy, L.P.,” “Genesis,” “we,” “our,” “us” or like terms refer to Genesis Energy, L.P. and its operating subsidiaries and joint
ventures; “Quintana” means Quintana Capital Group II, L.P. and its affiliates;
“CO
2
” means carbon dioxide; and “NaHS,” which is
commonly pronounced as “nash,” means sodium hydrosulfide.
GENESIS ENERGY, L.P.
We are a growth-oriented limited partnership focused on the midstream segment of the oil and gas
industry in the Gulf Coast region of the United States, primarily Texas, Louisiana, Arkansas, Mississippi, Alabama and Florida. We have a diverse portfolio of customers, operations and assets, including refinery-related plants, pipelines, storage
tanks and terminals, barges, and trucks. We provide an integrated suite of services to refineries; oil and CO
2
producers; industrial and commercial enterprises that use NaHS and caustic soda; and businesses that use
CO
2
and other industrial gases.
Quintana controls our general partner. On February 5, 2010, Quintana (along with its co-investors, certain members of the Davison
family and our senior management team) acquired control of our general partner.
We were formed in 1996. Our executive offices
are located at 919 Milam, Suite 2100, Houston, Texas 77002, and our telephone number is (713) 860-2500.
For additional
information regarding our business properties and financial condition, please refer to the documents referenced in the section entitled “Where You Can Find More Information.”
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RISK FACTORS
An investment in our securities involves risks. You should consider carefully the risk factors and other information included in, or
incorporated by reference into, this prospectus and any applicable prospectus supplement in evaluating an investment in our securities. We hereby incorporate by reference into this prospectus the risk factors included in Item 1A. “Risk
Factors” in our Annual Report on Form 10-K for the year ended December 31, 2009 and all other risk factors contained in any other documents that are incorporated by reference into this prospectus or any prospectus supplement. This
prospectus also contains forward-looking statements that involve risks and uncertainties. If any of these risks occur, our business, financial condition or results of operation could be adversely affected. Please read “Information Regarding
Forward-Looking Statements.” Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors.
USE OF PROCEEDS
Unless otherwise specified in an accompanying prospectus supplement, we will use the net proceeds we receive from the sale of the
securities described in this prospectus for general partnership purposes, which may include, among other things, repayment of indebtedness, the acquisition of businesses and other capital expenditures, payment of distributions and additions to
working capital. The exact amounts to be used and when the net proceeds will be applied will depend on a number of factors, including our funding requirements and the availability of alternative funding sources.
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DESCRIPTION OF OUR EQUITY SECURITIES
General
As of the date of this prospectus, we have outstanding only common units. In the future, we may issue one or more series or classes of
additional common units as well as the following other types of equity securities — preferred securities, subordinated securities, options securities, warrant securities or rights securities. Those equity securities may have rights to
distributions and allocations junior, equal or superior to our common units. Our general partner can determine the voting powers, designations, preferences and relative, participating, optional or other special rights, duties and qualifications,
limitations or restrictions of any series or class and the number constituting any series or class of equity securities.
Our Common Units
Our common units represent limited partner interests in Genesis Energy, L.P. that entitle the holders
to participate in our cash distributions and to exercise the rights or privileges available to limited partners under our partnership agreement.
Our outstanding common units are listed on NYSE Amex Equities under the symbol “GEL.”
The transfer agent and registrar for our common units is American Stock Transfer & Trust Company.
Status as Limited Partner or Assignee. Except as described under “— Limited Liability,” the common units will be fully
paid, and the unitholders will not be required to make additional capital contributions to us.
Subsequent Transfer of
Common Units
. Each purchaser of common units offered by this prospectus must execute a transfer application. By executing and delivering a transfer application, the purchaser of common units:
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becomes the record holder of the common units and is an assignee until admitted into our partnership as a substituted limited partner;
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automatically requests admission as a substituted limited partner in our partnership;
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agrees to be bound by the terms and conditions of, and executes, our partnership agreement;
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represents that he has the capacity, power and authority to enter into the partnership agreement;
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grants powers of attorney to officers of the general partner and any liquidator of our partnership as specified in the partnership agreement; and
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makes the consents and waivers contained in the partnership agreement.
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An assignee will become a substituted limited partner of our partnership for the transferred common units upon the consent of our general
partner and the recording of the name of the assignee on our books and records. The general partner may withhold its consent in its sole discretion.
Transfer applications may be completed, executed and delivered by a purchaser’s broker, agent or nominee. We are entitled to treat
the nominee holder of a common unit as the absolute owner. In that case, the beneficial holders’ rights are limited solely to those that it has against the nominee holder as a result of any agreement between the beneficial owner and the nominee
holder.
Common units are securities and are transferable according to the laws governing transfer of securities. In addition
to other rights acquired, the purchaser has the right to request admission as a substituted limited partner in our partnership for the purchased common units. A purchaser of common units who does not execute and deliver a transfer application
obtains only:
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the right to assign the common unit to a purchaser or transferee; and
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the right to transfer the right to seek admission as a substituted limited partner in our partnership for the purchased common units.
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Thus, a subsequent purchaser of common units who does not execute and deliver a transfer application:
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will not receive cash distributions or federal income tax allocations, unless the common units are held in a nominee or “street name” account
and the nominee or broker has executed and delivered a transfer application; and
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may not receive some federal income tax information or reports furnished to record holders of common units.
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Until a common unit has been transferred on our books, we and the transfer agent, notwithstanding any notice to the contrary, may treat
the record holder of the unit as the absolute owner for all purposes, except as otherwise required by law or stock exchange regulations.
Limited Liability
. Assuming that a limited partner does not participate in the control of our business within the meaning of the
Delaware Revised Uniform Limited Partnership Act (the “Delaware Act”) and that he otherwise acts in conformity with the provisions of our partnership agreement, his liability under the Delaware Act will be limited, subject to possible
exceptions, to the amount of capital he is obligated to contribute to us for his common units plus his share of any undistributed profits and assets. If it were determined, however, that the right or exercise of the right by the limited partners as
a group:
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to remove or replace the general partner;
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to approve some amendments to our partnership agreement; or
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to take other action under our partnership agreement
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constituted “participation in the control” of our business for the purposes of the Delaware Act, then the limited partners could be held
personally liable for our obligations under Delaware law, to the same extent as the general partner. This liability would extend to persons who transact business with us and who reasonably believe that the limited partner is a general partner.
Neither our partnership agreement nor the Delaware Act specifically provides for legal recourse against our general partner if a limited partner were to lose limited liability through any fault of the general partner. While this does not mean that a
limited partner could not seek legal recourse, we have found no precedent for this type of a claim in Delaware case law.
Under the Delaware Act, a limited partnership may not make a distribution to a partner if, after the distribution, all liabilities of the
limited partnership, other than liabilities to partners on account of their partnership interests and liabilities for which the recourse of creditors is limited to specific property of our partnership, exceed the fair value of the assets of the
limited partnership. For the purpose of determining the fair value of the assets of a limited partnership, the Delaware Act provides that the fair value of property subject to liability for which recourse of creditors is limited shall be included in
the assets of the limited partnership only to the extent that the fair value of that property exceeds the nonrecourse liability. The Delaware Act provides that a limited partner who receives a distribution and knew at the time of the distribution
that the distribution was in violation of the Delaware Act shall be liable to the limited partnership for the amount of the distribution for three years. Under the Delaware Act, an assignee who becomes a substituted limited partner of a limited
partnership is liable for the obligations of his assignor to make contributions to our partnership, except the assignee is not obligated for liabilities unknown to him at the time he became a limited partner and which could not be ascertained from
our partnership agreement.
Meetings; Voting
. Except as described below regarding a person or group owning 20% or more
of any class of units then outstanding, unitholders or assignees who are record holders of units on the record date will be entitled to notice of, and to vote at, meetings of our limited partners and to act upon matters for which approvals may be
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solicited. Common units that are owned by an assignee who is a record holder, but who has not yet been admitted as a limited partner, will be voted by our general partner at the written direction
of the record holder. Absent direction of this kind, the common units will not be voted, except that, in the case of common units held by our general partner on behalf of non-citizen assignees, our general partner will distribute the votes on those
common units in the same ratios as the votes of limited partners on other units are cast.
Our general partner does not
anticipate that any meeting of unitholders will be called in the foreseeable future. Any action that is required or permitted to be taken by the unitholders may be taken either at a meeting of the unitholders or without a meeting if consents in
writing describing the action so taken are signed by holders of the number of units as would be necessary to authorize or take that action at a meeting. Meetings of the unitholders may be called by our general partner or by unitholders owning at
least 20% of the outstanding units of the class for which a meeting is proposed and which are entitled to vote thereat. Unitholders may vote either in person or by proxy at meetings. The holders of a majority of the outstanding units of the class or
classes for which a meeting has been called represented in person or by proxy shall constitute a quorum unless any action by the unitholders requires approval by holders of a greater percentage of the units, in which case the quorum shall be the
greater percentage.
Each record holder of a unit has a vote according to his percentage interest in our partnership, although
additional limited partner interests having special voting rights could be issued. However, if at any time any person or group, other than our general partner and its affiliates, or a direct or subsequently approved transferee of our general partner
or its affiliates or a person or group who acquires the units with the prior approval of the board of directors, acquires, in the aggregate, beneficial ownership of 20% or more of any class of units then outstanding, the person or group will lose
voting rights on any matter relating to the succession, election, removal, withdrawal, replacement or substitution of the general partner and will not be considered to be outstanding when sending notices of a meeting of unitholders, calculating
required votes, determining the presence of a quorum or for other similar purposes
if
the matter to be voted on relates to the succession, election, removal, withdrawal, replacement or substitution of the general partner. Common units held in
nominee or street name account will be voted by the broker or other nominee in accordance with the instruction of the beneficial owner unless the arrangement between the beneficial owner and his nominee provides otherwise.
Any notice, demand, request, report or proxy material required or permitted to be given or made to record holders of common units under
our partnership agreement will be delivered to the record holder by us or by the transfer agent.
Books and Reports
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Our general partner is required to keep appropriate books of our business at our principal office. The books will be maintained for both tax and financial reporting purposes on an accrual basis. For tax and fiscal reporting purposes, our fiscal year
is the calendar year.
We will furnish or make available to record holders of common units, within 75 days after the close of
each fiscal year (or such shorter period as the Commission may prescribe), an annual report containing audited financial statements and a report on those financial statements by our independent registered public accountants. Except for our fourth
quarter, we will also furnish or make available unaudited financial information within 40 days after the close of each quarter.
We will furnish each record holder of a unit with information reasonably required for tax reporting purposes within 90 days after the
close of each calendar year. This information is expected to be furnished in summary form so that some complex calculations normally required of partners can be avoided. Our ability to furnish this summary information to unitholders will depend on
the cooperation of unitholders in supplying us with specific information. Every unitholder will receive information to assist him in determining his federal and state tax liability and filing his federal and state income tax returns, regardless of
whether he supplies us with information.
Our partnership agreement provides that a limited partner can, for a purpose
reasonably related to his interest as a limited partner, upon reasonable demand and at his own expense, have furnished to him:
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a current list of the name and last known address of each partner;
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a copy of our tax returns;
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information as to the amount of cash, and a description and statement of the agreed value of any other property or services, contributed or to be
contributed by each partner and the date on which each became a partner;
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copies of our partnership agreement, the certificate of limited partnership of the partnership, related amendments and powers of attorney under which
they have been executed;
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information regarding the status of our business and financial condition; and
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any other information regarding our affairs as is just and reasonable.
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Our general partner may, and intends to, keep confidential from the limited partners trade secrets or other information the disclosure of
which our general partner believes in good faith is not in our best interests or which we are required by law or by agreements with third parties to keep confidential.
Summary of Partnership Agreement
. For a summary of the important provisions of our partnership agreement, many of which apply to
holders of common units, see “Description of Our Partnership Agreement” in this prospectus.
Our
Preferred Securities
Our partnership agreement authorizes us to issue an unlimited number of additional limited partner
interests and other equity securities for the consideration and with the designations, rights, preferences, and privileges established by our general partner without the approval of any of our limited partners. In accordance with Delaware law and
the provisions of our partnership agreement, we may issue additional partnership interests that have certain preferential rights to which our common units are not entitled, including, without limitation, preferences regarding voting and
distributions. As of the date of this prospectus, we have no preferred securities outstanding.
Should we offer preferred
securities under this prospectus, a prospectus supplement relating to the particular series of preferred securities offered will include the specific terms of those preferred securities, including, among other things, the following:
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the designation, stated value, and liquidation preference of the preferred securities and the number of preferred securities offered;
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the initial public offering price at which the preferred securities will be issued;
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the conversion or exchange provisions of the preferred securities;
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any redemption or sinking fund provisions of the preferred securities;
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the distribution rights of the preferred securities, if any;
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a discussion of any additional material federal income tax considerations (other than as discussed in this prospectus), if any, regarding the preferred
securities; and
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any additional rights, preferences, privileges, limitations, and restrictions of the preferred securities.
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The transfer agent, registrar, and distributions disbursement agent for the preferred securities will be designated in the applicable
prospectus supplement.
Our Subordinated Securities
Our partnership agreement authorizes us to issue an unlimited number of additional limited partner interests and other equity securities
for the consideration and with the designations, rights, preferences, and privileges established by our general partner without the approval of any of our limited partners. In accordance with Delaware law and the provisions of our partnership
agreement, we may issue additional partnership interests that have certain rights, including, without limitation, rights regarding voting and distributions, subordinate to the rights of our common units or preferred securities. As of the date of
this prospectus, we have no subordinated securities outstanding.
Should we offer subordinated securities under this
prospectus, a prospectus supplement relating to the particular series of subordinated securities offered will include the specific terms of those subordinated securities, including, among other things, the following:
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the designation, stated value, and liquidation rights of the subordinated securities and the number of subordinated securities offered;
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the initial public offering price at which the subordinated securities will be issued;
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the conversion or exchange provisions of the subordinated securities;
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any redemption or sinking fund provisions of the subordinated securities;
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the distribution rights of the subordinated securities, if any;
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a discussion of any additional material federal income tax considerations (other than as discussed in this prospectus), if any, regarding the
subordinated securities; and
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any additional rights, limitations, and restrictions of the subordinated securities.
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The transfer agent, registrar, and distributions disbursement agent for the subordinated securities will be designated in the applicable
prospectus supplement.
Our Options
We may issue options for the purchase of common units, preferred securities, subordinated securities or any combination of the foregoing.
Our partnership agreement authorizes us to issue an unlimited number of options to purchase common units, preferred securities or subordinated securities for the consideration and with the rights, preferences, and privileges established by our
general partner without the approval of any of our limited partners. Options may be issued independently or together with other securities and may be attached to or separate from any offered securities. Each series of options will be issued under a
separate option agreement to be entered into between us and a bank or trust company, as option agent. The option agent will act solely as our agent in connection with the options and will not have any obligation or relationship of agency or trust
for or with any holders or beneficial owners of options. A copy of the option agreement will be filed with the Commission in connection with the offering of options.
The prospectus supplement relating to a particular issue of options to purchase common units, preferred securities, subordinated
securities or any combination of the foregoing will describe the terms of such options, including, among other things, the following:
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the title of the options;
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the offering price for the options, if any;
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the aggregate number of the options;
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the designation and terms of the common units, preferred securities, or subordinated securities that maybe purchased upon exercise of the options;
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if applicable, the designation and terms of the securities that the options are issued with and the number of options issued with each security;
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if applicable, the date from and after which the options and any securities issued with the options will be separately transferable;
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the number of common units, preferred securities, or subordinated securities that may be purchased upon exercise of a option and the price at which
such securities may be purchased upon exercise;
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the dates on which the right to exercise the options commence and expire;
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if applicable, the minimum or maximum amount of the options that may be exercised at any one time;
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the currency or currency units in which the offering price, if any, and the exercise price are payable;
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if applicable, a discussion of material federal income tax considerations;
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anti-dilution provisions of the options, if any;
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redemption or call provisions, if any, applicable to the options;
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any additional terms of the options, including terms, procedures, and limitations relating to the exchange and exercise of the options; and
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any other information we think is important about the options.
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Each option will entitle the holder of the option to purchase at the exercise price set forth in the applicable prospectus supplement the
number of common units, preferred securities, or subordinated securities being offered. Holders may exercise options at any time up to the close of business on the expiration date set forth in the applicable prospectus supplement. After the close of
business on the expiration date, unexercised options are void. Holders may exercise options as set forth in the prospectus supplement relating to the options being offered.
7
Until you exercise your options to purchase our common units, preferred securities or
subordinated securities, you will not have any rights as a holder of common units, preferred securities or subordinated securities, as the case may be, by virtue of your ownership of options.
Our Warrants
We may issue warrants for the purchase of common units, preferred securities, subordinated securities or any combination of the foregoing.
Our partnership agreement authorizes us to issue an unlimited number of warrants to purchase common units, preferred securities or subordinated securities for the consideration and with the rights, preferences, and privileges established by our
general partner without the approval of any of our limited partners. Warrants may be issued independently or together with other securities and may be attached to or separate from any offered securities. Each series of warrants will be issued under
a separate warrant agreement to be entered into between us and a bank or trust company, as warrant agent. The warrant agent will act solely as our agent in connection with the warrants and will not have any obligation or relationship of agency or
trust for or with any holders or beneficial owners of warrants. A copy of the warrant agreement will be filed with the Commission in connection with the offering of warrants.
The prospectus supplement relating to a particular issue of warrants to purchase common units, preferred securities, subordinated
securities or any combination of the foregoing will describe the terms of such warrants, including, among other things, the following:
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the title of the warrants;
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the offering price for the warrants, if any;
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the aggregate number of the warrants;
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the designation and terms of the common units, preferred securities or subordinated securities that maybe purchased upon exercise of the warrants;
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if applicable, the designation and terms of the securities that the warrants are issued with and the number of warrants issued with each security;
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if applicable, the date from and after which the warrants and any securities issued with the warrants will be separately transferable;
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the number of common units, preferred securities or subordinated securities that may be purchased upon exercise of a warrant and the price at which
such securities may be purchased upon exercise;
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the dates on which the right to exercise the warrants commence and expire;
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if applicable, the minimum or maximum amount of the warrants that may be exercised at any one time;
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the currency or currency units in which the offering price, if any, and the exercise price are payable;
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if applicable, a discussion of material federal income tax considerations;
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anti-dilution provisions of the warrants, if any;
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redemption or call provisions, if any, applicable to the warrants;
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any additional terms of the warrants, including terms, procedures, and limitations relating to the exchange and exercise of the warrants; and
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any other information we think is important about the warrants.
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Each warrant will entitle the holder of the warrant to purchase at the exercise price set forth in the applicable prospectus supplement
the number of common units, preferred securities or subordinated securities being offered. Holders may exercise warrants at any time up to the close of business on the expiration date set forth in the applicable prospectus supplement. After the
close of business on the expiration date, unexercised warrants are void. Holders may exercise warrants as set forth in the prospectus supplement relating to the warrants being offered.
Until you exercise your warrants to purchase our common units, preferred securities or subordinated securities, you will not have any
rights as a holder of common units, preferred securities or subordinated securities, as the case may be, by virtue of your ownership of warrants.
Our Rights
We may issue rights to purchase common units, preferred securities, subordinated securities or any combination of the foregoing. Our
partnership agreement authorizes us to issue an unlimited number of rights to purchase common units, preferred securities or subordinated securities for the consideration and with the rights, preferences, and privileges established by our general
partner without the approval of any of our limited partners. These rights may be issued independently or together with any other security offered hereby and may or may not be transferable by the holder receiving the
8
rights in such offering. In connection with any offering of such rights, we may enter into a standby arrangement with one or more underwriters or other purchasers pursuant to which the
underwriters or other purchasers may be required to purchase any securities remaining unsubscribed for after such offering.
Each series of rights will be issued under a separate rights agreement, which we will enter into with a bank or trust company, as rights
agent, all as set forth in the applicable prospectus supplement. The rights agent will act solely as our agent in connection with the certificates relating to the rights and will not assume any obligation or relationship of agency or trust with any
holders of rights certificates or beneficial owners of rights. We will file the rights agreement and the rights certificates relating to each series of rights with the Commission, and incorporate them by reference as an exhibit to the registration
statement of which this prospectus is a part on or before the time we issue a series of rights.
The applicable prospectus
supplement will describe the specific terms of any offering of rights for which this prospectus is being delivered, including, among other things, the following:
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the date of determining the unitholders entitled to the rights distribution;
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the number of rights issued or to be issued to each unitholder;
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the exercise price payable for each common unit, preferred security or subordinated security upon the exercise of the rights;
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the number and terms of the common units, preferred securities or subordinated securities, which may be purchased per each right;
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the extent to which the rights are transferable;
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the date on which the holder’s ability to exercise the rights shall commence, and the date on which the rights shall expire;
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the extent to which the rights may include an over-subscription privilege with respect to unsubscribed securities;
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if applicable, the material terms of any standby underwriting or purchase arrangement entered into by us in connection with the offering of such
rights;
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any other terms of the rights, including the terms, procedures, conditions, and limitations relating to the exchange and exercise of the rights; and
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any other information we think is important about the rights.
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The description in the applicable prospectus supplement of any rights that we may offer will not necessarily be complete and will be
qualified in its entirety by reference to the applicable rights certificate, which will be filed with the Commission.
9
CASH DISTRIBUTION POLICY
Distributions of Available Cash
General
. Within approximately 45 days after the end of each quarter, Genesis Energy, L.P. will distribute all available cash to
unitholders of record on the applicable record date. However, there is no guarantee that we will pay a distribution on the common units in any quarter, and we will be prohibited from making any distributions to unitholders if it would cause an event
of default, or if an event of default then exists, under our credit facility.
Definition of Available Cash
. Available
cash generally means, for each fiscal quarter, all cash on hand at the end of the quarter:
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less the amount of cash reserves that the general partner determines in its reasonable discretion is necessary or appropriate to:
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provide for the proper conduct of our business;
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comply with applicable law, any of our debt instruments, or other agreements; or
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provide funds for distributions to our unitholders and to our general partner for any one or more of the next four quarters;
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plus all cash on hand on the date of determination of available cash for the quarter resulting from working capital borrowings. Working capital
borrowings are generally borrowings that are made under our credit facility and in all cases are used solely for working capital purposes or to pay distributions to partners.
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Operating Surplus and Capital Surplus
General
. All cash distributed to unitholders will be characterized either as operating surplus or capital surplus. We distribute
available cash from operating surplus differently than available cash from capital surplus.
Maintenance capital expenditures
are capital expenditures made to maintain, over the long term, the operating capacity of our assets as they existed at the time of the expenditure. Expansion capital expenditures are capital expenditures made to increase over the long term the
operating capacity of our assets as they existed at the time of the expenditure. The general partner has the discretion to determine how to allocate a capital expenditure for the acquisition or expansion of our pipeline systems, storage facilities
and related assets between maintenance capital expenditures and expansion capital expenditures, and its good faith allocation will be conclusive. Maintenance capital expenditures reduce operating surplus, from which we pay the minimum quarterly
distribution, but expansion capital expenditures do not.
Definition of Operating Surplus
. For any period, operating
surplus generally means:
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our cash balance on the closing date of our initial public offering; plus
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$20.0 million (as described below); plus
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all of our cash receipts since the closing of our initial public offering, excluding cash from borrowings that are not working capital borrowings,
sales of equity and debt securities and sales or other dispositions of assets outside the ordinary course of business; plus
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working capital borrowings made after the end of a quarter but before the date of determination of operating surplus for that quarter; less
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all of our operating expenses since the closing of our initial public offering, including the repayment of working capital borrowings and the payment
of capital expenditures, other than:
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repayments of indebtedness that are required in connection with the sale or other disposition of assets or that are made in connection with the
refinancing or refunding of indebtedness with the proceeds from new indebtedness or from the sale of equity securities;
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expansion capital expenditures;
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transaction expenses relating to borrowings or refinancings of indebtedness (other than for working capital purposes), sales of debt or equity
securities or sales or other dispositions of assets other than in the ordinary course of business; less
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the amount of cash reserves that the general partner deems necessary or advisable to provide funds for future operating expenditures.
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Definition of Capital Surplus
. Capital surplus will generally be generated only by:
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borrowings other than working capital borrowings;
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sales of debt and equity securities; or
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sales or other disposition of assets for cash, other than inventory, accounts receivable and other current assets sold in the ordinary course of
business or as part of normal retirements or replacements of assets.
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Characterization of Cash
Distributions
. We will treat all available cash distributed as coming from operating surplus until the sum of all available cash distributed since we began operations equals the operating surplus as of the most recent date of determination of
available cash. We will treat any amount distributed in excess of operating surplus, regardless of its source, as capital surplus. We do not anticipate that we will make any distributions from capital surplus. As reflected above, operating surplus
includes $20.0 million in addition to our cash balance on the closing date of our initial public offering, cash receipts from our operations and cash from working capital borrowings. This amount does not reflect actual cash on hand at closing that
is available for distribution to our unitholders. Rather, it is a provision that will enable us, if we choose, to distribute as operating surplus up to $20 million of cash we receive in the future from non-operating sources, such as assets sales,
issuances of securities and long-term borrowings, which would otherwise be considered distributions of capital surplus. Any distributions of capital surplus would trigger certain adjustment provisions in our partnership agreement as described below.
See “— Distributions From Capital Surplus” and “— Adjustment to the Minimum Quarterly Distribution and Target Distribution Levels.”
Distributions of Available Cash From Operating Surplus
We will make distributions of available cash from operating surplus in the following manner:
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First
, 98% to all unitholders, pro rata, and 2% to the general partner until we distribute for each outstanding unit an amount equal to the
minimum quarterly distribution for that quarter; and
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Thereafter, in the manner described under “— Incentive Distribution Rights” below.
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Incentive Distribution Rights
Incentive distribution rights represent the right to receive an increasing percentage of quarterly distributions of available cash from
operating surplus after the minimum quarterly distribution and the target distribution levels have been achieved. Our general partner holds all of the incentive distribution rights. There are no restrictions on the ability of our general partner to
transfer the incentive distribution rights.
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If for any quarter we have distributed available cash from operating surplus to the common
unitholders in an amount equal to the minimum quarterly distribution, then we will distribute any additional available cash from operating surplus for that quarter among the unitholders and the general partner in the following manner:
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First
, 98% to all unitholders, pro rata, and 2% to the general partner, until each unitholder receives a total of $0.25 per unit for that
quarter (the “first target distribution”);
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Second
, 84.74% to all unitholders, pro rata, 13.26% to the holder of the incentive distribution rights and 2% to the general partner, until each
unitholder receives a total of $0.28 per unit for that quarter (the “second target distribution”);
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Third
, 74.53% to all unitholders, pro rata, 23.47% to the holder of the incentive distribution rights and 2% to the general partner, until each
unitholder receives a total of $0.33 per unit for that quarter (the “third target distribution”); and
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Thereafter, 49.02% to all unitholders, pro rata, 48.98% to the holder of the incentive distribution rights and 2% to the general partner.
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Percentage allocations of available cash from operating surplus
The following table illustrates the percentage allocations of the additional available cash from operating surplus between the unitholders
and our general partner up to the various target distribution levels. The amounts set forth under “Marginal Percentage Interest in Distributions” are the percentage interests of our general partner and the unitholders in any available cash
from operating surplus we distribute up to and including the corresponding amount in the column “Total Quarterly Distribution Target Amount,” until available cash from operating surplus we distribute reaches the next target distribution
level, if any. The percentage interests shown for the unitholders and the general partner for the minimum quarterly distribution are also applicable to quarterly distribution amounts that are less than the minimum quarterly distribution.
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Total Quarterly
Distribution
Target Amount
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Marginal Percentage Interest in Distributions
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Unitholders
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General
Partner
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Holder of Incentive
Distribution
Rights
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Minimum Quarterly Distribution
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up to $0.20
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98
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%
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2
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%
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—
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First Target Distribution
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above $0.20 up to $0.25
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98
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%
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2
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—
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Second Target Distribution
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above $0.25 up to $0.28
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84.74
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2
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13.26
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%
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Third Target Distribution
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above $0.28 up to $0.33
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74.53
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2
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23.47
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%
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Thereafter
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above $0.33
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49.02
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%
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2
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%
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48.98
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%
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Distributions from Capital Surplus
We will make distributions of available cash from capital surplus, if any, in the following manner:
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First
, 98% to all unitholders, pro rata, and 2% to the general partner, until we distribute for each common unit that was issued in the initial
public offering, an amount of available cash from capital surplus equal to the initial public offering price; and
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Thereafter, we will make all distributions of available cash from capital surplus as if they were from operating surplus.
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Effect of a Distribution from Capital Surplus
. The partnership agreement treats a distribution of capital surplus as the repayment
of the initial unit price from the initial public offering, which is a return of capital. The initial public offering price less any distributions of capital surplus per unit is referred to as the unrecovered initial unit price. Each time a
distribution of capital surplus is made, the minimum quarterly distribution and the target distribution levels will be reduced in the same proportion as the corresponding reduction in the unrecovered initial unit price. Because distributions of
capital surplus will reduce the minimum quarterly distribution, after any of these distributions are made, it may be easier for the general partner to receive incentive distributions.
Once we distribute capital surplus on a unit in an amount equal to the initial unit price, we will reduce the minimum quarterly
distribution and the target distribution levels to zero and we will make all future distributions from operating surplus, with 49.02% being paid to the unitholders and 50.98% to the general partner.
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Adjustment of Minimum Quarterly Distribution and Target Distribution Levels
In addition to adjusting the minimum quarterly distribution and target distribution levels to reflect a distribution of
capital surplus, if we combine our units into fewer units or subdivide our units into a greater number of units, we will proportionately adjust:
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the minimum quarterly distribution;
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the target distribution levels; and
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the unrecovered initial unit price.
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For example, if a two-for-one split of the common units should occur, the minimum quarterly distribution, the target distribution levels
and the unrecovered initial unit price would each be reduced to 50% of its initial level. We will not make any adjustment by reason of the issuance of additional units for cash or property.
In addition, if legislation is enacted or if existing law is modified or interpreted in a manner that causes us to become taxable as a
corporation or otherwise subject to taxation as an entity for federal, state or local income tax purposes, we will reduce the minimum quarterly distribution and the target distribution levels by multiplying the same by one minus the sum of the
highest marginal federal corporate income tax rate that could apply and the effective overall state and local income tax rates. For example, if we became subject to a maximum marginal federal, and effective state and local income tax rate of 38%,
then the minimum quarterly distribution and the target distributions levels would each be reduced to 62% of their previous levels.
Distributions of Cash Upon Liquidation
If we dissolve in accordance with our partnership agreement, we will sell or
otherwise dispose of our assets in a process called a liquidation. We will first apply the proceeds of liquidation to the payment of our creditors. We will distribute any remaining proceeds to the unitholders and the general partner, in accordance
with their capital account balances, as adjusted to reflect any gain or loss upon the sale or other disposition of our assets in liquidation.
Manner of Adjustment for Gain
. The manner of the adjustment is set forth in the partnership agreement. Upon liquidation, we will
allocate any gain to the partners in the following manner:
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First
, to our general partner and the holders of units who have negative balances in their capital accounts to the extent of and in proportion
to those negative balances;
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Second
, 98% to the common unitholders, pro rata, and 2% to the general partner, until the capital account for each common unit is equal to the
sum of:
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the unrecovered initial unit price; plus
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(2)
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the amount of the minimum quarterly distribution for the quarter during which our liquidation occurs;
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Third
, 98% to all unitholders, pro rata, and 2% to the general partner, pro rata, until we allocate under this paragraph an amount per unit
equal to:
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the sum of the excess of the first target distribution per unit over the minimum quarterly distribution per unit for each quarter of our existence; less
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(2)
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the cumulative amount per unit of any distributions of available cash from operating surplus in excess of the minimum quarterly distribution per unit that was
distributed 98% to the units, pro rata, and 2% to the general partner, pro rata, for each quarter of our existence;
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Fourth
, 84.74% to all unitholders, pro rata, 13.26% to the holder of the incentive distribution rights and 2% to the general partner, until we
allocate under this paragraph an amount per unit equal to:
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(1)
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the sum of the excess of the second target distribution per unit over the first target distribution per unit for each quarter of our existence; less
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(2)
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the cumulative amount per unit of any distributions of available cash from operating surplus in excess of the first target distribution per unit that was distributed
84.74% to the unitholders, pro rata, 13.26% to the holder of the incentive distribution rights and 2% to the general partner for each quarter of our existence;
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Fifth
, 74.53% to all unitholders, pro rata, 23.47% to the holder of the incentive distribution rights and 2% to the general partner, until we
allocate under this paragraph an amount per unit equal to:
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(1)
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the sum of the excess of the third target distribution per unit over the second target distribution per unit for each quarter of our existence; less
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(2)
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the cumulative amount per unit of any distributions of available cash from operating surplus in excess of the second target distribution per unit that was distributed
74.53% to the unitholders, pro rata, 23.47% to the holder of the incentive distribution rights and 2% to the general partner for each quarter of our existence;
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Thereafter, 49.02% to all unitholders, pro rata, 48.98% to the holder of the incentive distribution rights and 2% to the general partner.
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Manner of Adjustment for Losses
. Upon our liquidation, we will generally allocate any loss to the
general partner and the unitholders in the following manner:
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First
, 98% to the holders of common units in proportion to the positive balances in their capital accounts and 2% to the general partner until
the capital accounts of the common unitholders have been reduced to zero; and
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Thereafter, 100% to the general partner.
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Adjustments to Capital Accounts Upon the Issuance of Additional Units
. We will make adjustments to capital accounts upon the
issuance of additional units. In doing so, we will allocate any gain or loss resulting from the adjustments to the unitholders and the general partner in the same manner as we allocate gain or loss upon liquidation. In the event that we make
positive interim adjustments to the capital accounts, we will allocate any later negative adjustments to the capital accounts resulting from the issuance of additional units or distributions of property or upon liquidation in a manner which results,
to the extent possible, in the capital account balance of the general partner equaling the amount which would have been in its capital account if no earlier positive adjustments to the capital accounts had been made.
DESCRIPTION OF OUR PARTNERSHIP AGREEMENT
The following is a summary of the material provisions of our partnership agreement. Our partnership agreement has been filed with the
Commission, and is incorporated by reference in this prospectus. The following provisions of our partnership agreement are summarized elsewhere in this prospectus:
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allocations of taxable income and other tax matters are described under “Material Income Tax Consequences”; and
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rights of holders of common units are described under “Description of Our Equity Securities—Our Common Units.”
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Purpose
Our purpose under our partnership agreement is to engage directly or indirectly in any business activity that is approved by our general
partner and that may be lawfully conducted by a limited partnership under the Delaware Act. All of our operations are conducted through our subsidiaries and joint ventures.
Power of Attorney
Each limited partner, and each person who acquires a unit from a unitholder and executes and delivers a transfer application, grants to
our general partner and, if appointed, a liquidator, a power of attorney to, among other things, execute and file documents required for our qualification, continuance or dissolution. The power of attorney also grants the general partner the
authority to amend, and to make consents and waivers under, our partnership agreement.
Reimbursements of Our
General Partner
Our general partner does not receive any compensation for its services as our general partner. It is,
however, entitled to be reimbursed for all of its costs incurred in managing and operating our business. Our partnership agreement provides that our general partner will determine the expenses that are allocable to us in any reasonable manner
determined by our general partner in its sole discretion. In addition, our general partner owns certain of our equity interest, including our general partner interest and our incentive distribution rights.
Issuance of Additional Securities
Our partnership agreement authorizes us to issue an unlimited number of additional partner securities and rights to buy partnership
securities that are equal in rank with or junior to our common units on terms and conditions established by our general partner in its sole discretion without the approval of the unitholders.
It is possible that we will fund acquisitions through the issuance of additional common units or other equity securities. Holders of any
additional common units we issue will be entitled to share equally with the then-existing holders of common units in our distributions of available cash. In addition, the issuance of additional equity securities may dilute the value of the interests
of the then-existing holders of common units in our net assets.
In accordance with Delaware law and the provisions of our
partnership agreement, we may also issue additional equity securities that, in the sole discretion of our general partner, may have special voting rights to which common units are not entitled.
Our general partner has the right, which it may from time to time assign in whole or in part to any of its affiliates, to purchase common
units or other equity securities whenever, and on the same terms that, we issue those securities to persons other than our general partner and its affiliates, to the extent necessary to maintain its percentage interest, including its interest
represented by common units, that existed immediately prior to the issuance. The holders of common units will not have preemptive rights to acquire additional common units or other partnership securities.
Amendments to Our Partnership Agreement
Amendments to our partnership agreement may be proposed only by or with the consent of our general partner. Any amendment that materially
and adversely affects the rights or preferences of any type or class of limited partner interests in relation to other types or classes of limited partner interests or our general partner interest will require the approval of at least a majority of
the type or class of limited partner interests or general partner interests so affected.
However, in some circumstances, more
particularly described in our partnership agreement, our general partner may make amendments to our partnership agreement without the approval of our limited partners or assignees.
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Withdrawal or Removal of Our General Partner
Our general partner may withdraw as general partner without first obtaining approval of any unitholder by giving 90 days’ written
notice, and that withdrawal will not constitute a violation of our partnership agreement.
Upon the voluntary withdrawal of
our general partner, the holders of a majority of our outstanding common units may elect a successor to the withdrawing general partner. If a successor is not elected, or is elected but an opinion of counsel regarding limited liability and tax
matters cannot be obtained, we will be dissolved, wound up and liquidated, unless within 180 days after that withdrawal, the holders of a majority of our outstanding common units agree in writing to continue our business and to appoint a successor
general partner.
Our general partner may be removed with or without cause. “Cause” means that a court of competent
jurisdiction has entered a final, non-appealable judgment finding our general partner liable for actual fraud, gross negligence or willful or wanton misconduct in its capacity as our general partner. If cause exists, our general partner may not be
removed unless that removal is approved by the vote of the holders of not less than two-thirds of our outstanding units, including units held by our general partner and its affiliates. The removal of our general partner for cause is also subject to
the approval of a successor general partner by a vote of the holders of not less than two-thirds of our outstanding units, including units held by our general partner and its affiliates. If no cause exists, our general partner may not be removed
unless that removal is approved by the vote of the holders of not less than a majority of our outstanding units, excluding units held by our general partner and its affiliates. Any removal of our general partner by the unitholders without cause is
also subject to the approval of a successor general partner by the vote of the holders of a majority of our outstanding common units and the receipt of an opinion of counsel regarding limited liability and tax matters. Additionally, upon removal of
the general partner without cause, our general partner will have the option to convert its interest in us (other than its common units) into common units or to require our replacement general partner to purchase such interest for cash at its then
fair market value.
While our partnership agreement limits the ability of our general partner to withdraw, it allows the
general partner interest to be transferred to an affiliate or to a third party in conjunction with a merger or sale of all or substantially all of the assets of our general partner. In addition, our partnership agreement expressly permits the sale,
in whole or in part, of the ownership of our general partner. Our general partner may also transfer, in whole or in part, the common units and any other partnership securities it owns, including the incentive distribution rights.
Liquidation and Distribution of Proceeds
Upon our dissolution, unless we are reconstituted and continued as a new limited partnership, the person authorized to wind up our affairs
(the liquidator) will, acting with all the powers of our general partner that the liquidator deems necessary or desirable in its judgment, liquidate our assets. The proceeds of the liquidation will be applied as follows:
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first
, towards the payment of all of our creditors; and
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then
, to our unitholders and our general partner in accordance with the positive balance in their respective capital accounts.
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The liquidator may defer liquidation of our assets for a reasonable period or distribute assets to our
partners in kind if it determines that a sale would be impractical or would cause undue loss to our partners.
Change of Management Provisions
Our partnership agreement contains the following specific provisions that are intended to discourage a person or group from attempting to
remove our general partner or otherwise change management:
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any units held by a person that owns 20% or more of any class of units then outstanding, other than our general partner and its affiliates, cannot be
voted on any matters pertaining to the succession, election, removal, withdrawal, replacement or substitution of our general partner; and
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the partnership agreement contains provisions limiting the ability of unitholders to call meetings or to acquire information about our operations, as
well as other provisions limiting the unitholders’ ability to influence the manner or direction of management.
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Limited Call Right
If at any time our general partner and its affiliates own more than 80% of the issued and
outstanding limited partner interests of any class, our general partner will have the right to acquire all, but not less than all, of the outstanding limited partner interests of that class that are held by non-affiliated persons. The record date
for determining ownership of the limited partner interests would be selected by our general partner on at least ten but not more than 60 days notice. The purchase price in the event of a purchase under these provisions would be the greater of
(1) the current market price (as defined in our partnership agreement) of the limited partner interests of the class as of the date three days prior to the date that notice is mailed to the limited partners as provided in the partnership
agreement and (2) the highest cash price paid by our general partner or any of its affiliates for any partnership securities of the class purchased within the 90 days preceding the date our general partner first mails notice of its election to
purchase those partnership securities.
Indemnification
Under our partnership agreement, in most circumstances, we will indemnify our general partner, its affiliates and their officers and
directors to the fullest extent permitted by law, from and against all losses, claims or damages any of them may suffer by reason of their status as general partner, officer or director, as long as the person seeking indemnity acted in good faith
and in a manner believed to be in or not opposed to our best interest. Any indemnification under these provisions will only be out of our assets. Our general partner and its affiliates shall not be personally liable for, or have any obligation to
contribute or loan funds or assets to us to enable us to effectuate any indemnification. We are authorized to purchase insurance against liabilities asserted against and expenses incurred by persons for our activities, regardless of whether we would
have the power to indemnify the person against liabilities under our partnership agreement. In addition, we typically enter into indemnification agreements with each director of our general partner covering any costs, claims or expenses such
director incurs in connection with serving in her/his capacity as a director or any other capacity at the request of our general partner or us.
Registration Rights
Under our partnership agreement, we have agreed to register for resale under the Securities Act of 1933 (the “Securities Act”),
and applicable state securities laws any common units or other partnership securities proposed to be sold by our general partner or any of its affiliates or their assignees if an exemption from the registration requirements is not otherwise
available. We are obligated to pay all expenses incidental to the registration, excluding underwriting discounts and commissions.
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MATERIAL INCOME TAX CONSEQUENCES
This section is a discussion of the material income tax consequences that may be relevant to prospective unitholders who are individual
citizens or residents of the United States and, unless otherwise noted in the following discussion, expresses the opinion of Akin Gump Strauss Hauer & Feld LLP, counsel to our general partner and us, insofar as it relates to legal
conclusions with respect to matters of United States federal income tax law. This section is based upon current provisions of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), existing and proposed Treasury
Regulations promulgated under the Internal Revenue Code (the “Treasury Regulations”), and current administrative rulings and court decisions, all of which are subject to change. Later changes in these authorities may cause the tax
consequences to vary substantially from the consequences described below. Unless the context otherwise requires, references in this section to “us,” “we,” “our,” or “ours” are references to Genesis Energy,
L.P. and its subsidiaries.
The following discussion does not comment on all federal income tax matters affecting us or our
unitholders. Moreover, the discussion focuses on unitholders who are individual citizens or residents of the United States and has only limited application to corporations, estates, trusts, nonresident aliens or other unitholders subject to
specialized tax treatment, such as tax-exempt institutions, foreign persons, individual retirement accounts (IRAs), real estate investment trusts (REITs) or mutual funds. Accordingly, we urge each prospective unitholder to consult, and depend on,
his own tax advisor in analyzing the federal, state, local and foreign tax consequences particular to him of the ownership or disposition of common units.
All statements as to matters of law and legal conclusions, but not as to factual matters, contained in this section, unless otherwise
noted, are the opinion of Akin Gump Strauss Hauer & Feld LLP and are based on the accuracy of the representations made by us and our general partner. No ruling has been or will be requested from the Internal Revenue Service (the
“IRS”) regarding any matter affecting us or prospective unitholders. Instead, we will rely on opinions and advice of Akin Gump Strauss Hauer & Feld LLP. Unlike a ruling, an opinion of counsel represents only that counsel’s
best legal judgment and does not bind the IRS or the courts. Accordingly, the opinions and statements made herein may not be sustained by a court if contested by the IRS. Any contest of this sort with the IRS may materially and adversely impact the
market for our common units and the prices at which common units trade. In addition, the costs of any contest with the IRS, principally legal, accounting, and related fees, will result in a reduction in cash available for distribution to our
unitholders and our general partner and thus will be borne directly or indirectly by our unitholders and our general partner. Furthermore, the tax treatment of us, or of an investment in us, may be significantly modified by future legislative or
administrative changes or court decisions. Any modifications may or may not be retroactively applied.
For the reasons
described below, Akin Gump Strauss Hauer & Feld LLP has not rendered an opinion with respect to the following specific federal income tax issues:
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the treatment of a unitholder whose common units are loaned to a short seller to cover a short sale of common units (please see “— Tax Consequences of Unit
Ownership— Treatment of Short Sales”);
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(2)
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whether our monthly convention for allocating taxable income and losses is permitted by existing Treasury Regulations (please see “— Disposition of Common
Units— Allocations Between Transferors and Transferees”); and
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(3)
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whether our method for depreciating Section 743 adjustments is sustainable (please see “— Tax Consequences of Unit Ownership— Section 754
Election”).
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Partnership Status
A partnership is not a taxable entity and incurs no federal income tax liability. Instead, each partner of a partnership is required to
take into account his share of items of income, gain, loss and deduction of the partnership in computing his federal income tax liability, regardless of whether cash distributions are made to him by the partnership. Distributions by a partnership to
a partner are generally not taxable to the partnership or to the partner unless the amount of cash distributed to him is in excess of the partner’s adjusted basis in his partnership interest.
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Section 7704 of the Internal Revenue Code provides that publicly-traded partnerships
will, as a general rule, be taxed as corporations. However, an exception, referred to as the “Qualifying Income Exception,” exists with respect to publicly-traded partnerships of which 90% or more of the gross income for every taxable year
consists of “qualifying income.” Qualifying income includes income and gains derived from the transportation, storage, processing, and marketing of crude oil, natural gas and products thereof and fertilizer. Other types of qualifying
income include interest (other than from a financial business), dividends, gains from the sale of real property and gains from the sale or other disposition of capital assets held for the production of income that otherwise constitutes qualifying
income. We estimate that at least 90% of our current gross income is qualifying income. Based upon and subject to this estimate, the factual representations made by us and the general partner and a review of the applicable legal authorities, Akin
Gump Strauss Hauer & Feld LLP is of the opinion that at least 90% of our current gross income constitutes qualifying income.
No ruling has been or will be sought from the IRS and the IRS has made no determination as to our status as a partnership for federal
income tax purposes or whether our operations generate “qualifying income” under Section 7704 of the Internal Revenue Code. Instead, we will rely on the opinion of Akin Gump Strauss Hauer & Feld LLP. It is the opinion of Akin
Gump Strauss Hauer & Feld LLP that, based upon the Internal Revenue Code, the Treasury Regulations, published revenue rulings and court decisions and the representations described below, we will be classified as a partnership for federal
income tax purposes.
In rendering its opinion, Akin Gump Strauss Hauer & Feld LLP has relied on factual
representations made by us and our general partner. The representations made by us and our general partner upon which counsel has relied include:
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Neither we nor the operating company has elected or will elect to be treated as a corporation;
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(b)
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For each taxable year, more than 90% of our gross income has been and will be income from sources that Akin Gump Strauss Hauer & Feld LLP has opined or will
opine is “qualifying income” within the meaning of Section 7704(d) of the Internal Revenue Code; and
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(c)
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Each hedging transaction that we treat as resulting in qualifying income has been and will be appropriately identified as a hedging transaction pursuant to applicable
Treasury Regulations, and has been and will be associated with oil, gas or products thereof that are held or are to be held by us in activities that Akin Gump Strauss Hauer & Feld LLP has opined or will opine result in qualifying income.
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If we fail to meet the Qualifying Income Exception, other than a failure that is determined by the IRS to be
inadvertent and that is cured within a reasonable time after discovery (in which case the IRS may also require us to make adjustments with respect to our unitholders or pay other amounts), we will be treated as if we had transferred all of our
assets, subject to liabilities, to a newly formed corporation, on the first day of the year in which we fail to meet the Qualifying Income Exception, in return for stock in that corporation, and then distributed that stock to our unitholders in
liquidation of their interests in us. This deemed contribution and liquidation should be tax-free to unitholders and us so long as we, at that time, do not have liabilities in excess of the tax basis of our assets. Thereafter, we would be treated as
an association taxable as a corporation for federal income tax purposes.
If we were treated as an association taxable as a
corporation in any taxable year, either as a result of a failure to meet the Qualifying Income Exception or otherwise, our items of income, gain, loss and deduction would be reflected only on our tax return rather than being passed through to our
unitholders, and our net income would be taxed to us at corporate rates. In addition, any distribution made to a unitholder would be treated as either taxable dividend income, to the extent of our current or accumulated earnings and profits, or, in
the absence of earnings and profits, a nontaxable return of capital, to the extent of the unitholder’s tax basis in his common units, or taxable capital gain, after the unitholder’s tax basis in his common units is reduced to zero.
Accordingly, taxation as a corporation would result in a material reduction in a unitholder’s cash flow and after-tax return and thus would likely result in a substantial reduction of the value of the units.
The remainder of the discussion below is based on Akin Gump Strauss Hauer & Feld LLP’s opinion that we will be classified
as a partnership for federal income tax purposes.
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Limited Partner Status
Unitholders who have become limited partners of Genesis will be treated as partners of Genesis for federal income tax purposes. Also:
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assignees who have executed and delivered transfer applications, and are awaiting admission as limited partners, and
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unitholders whose common units are held in street name or by a nominee and who have the right to direct the nominee in the exercise of all substantive rights attendant
to the ownership of their common units,
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will be treated as partners of Genesis for federal income tax purposes. As there is no
direct authority addressing assignees of common units who are entitled to execute and deliver transfer applications and become entitled to direct the exercise of attendant rights, but who fail to execute and deliver transfer applications, the
opinion of Akin Gump Strauss Hauer & Feld LLP does not extend to these persons. Furthermore, a purchaser or other transferee of common units who does not execute and deliver a transfer application may not receive some federal income tax
information or reports furnished to record holders of common units unless the common units are held in a nominee or street name account and the nominee or broker has executed and delivered a transfer application for those common units.
A beneficial owner of common units whose units have been transferred to a short seller to complete a short sale would appear to lose his
status as a partner with respect to those units for federal income tax purposes. Please see “— Tax Consequences of Unit Ownership— Treatment of Short Sales.”
Income, gain, deductions or losses would not appear to be reportable by a unitholder who is not a partner for federal income tax
purposes, and any cash distributions received by a unitholder who is not a partner for federal income tax purposes would therefore appear to be fully taxable as ordinary income. These holders are urged to consult their own tax advisors with respect
to their status as partners in Genesis.
The references to “unitholders” in the discussion that follows are to
persons who are treated as partners in Genesis for federal income tax purposes.
Tax Consequences of Unit
Ownership
Flow-Through of Taxable Income.
Except for taxes paid by our corporate subsidiaries, we will not pay
any federal income tax. Instead, each unitholder will be required to report on his income tax return his share of our income, gains, losses and deductions without regard to whether corresponding cash distributions are received by him. Consequently,
we may allocate income to a unitholder even if he has not received a cash distribution. Each unitholder will be required to include in income his allocable share of our income, gains, losses and deductions for our taxable year ending with or within
his taxable year. Our taxable year ends on December 31.
Treatment of Distributions.
Distributions by us to a
unitholder generally will not be taxable to the unitholder for federal income tax purposes, except to the extent the amount of any such cash distribution exceeds his tax basis in his common units immediately before the distribution. Our cash
distributions in excess of a unitholder’s tax basis generally will be considered to be gain from the sale or exchange of our common units, taxable in accordance with the rules described under “— Disposition of Common Units”
below. Any reduction in a unitholder’s share of our liabilities for which no partner, including the general partner, bears the economic risk of loss, known as “nonrecourse liabilities,” will be treated as a distribution by us of cash
to that unitholder. To the extent our distributions cause a unitholder’s “at risk” amount to be less than zero at the end of any taxable year, he must recapture any losses deducted in previous years. Please see
“— Limitations on Deductibility of Losses.”
A decrease in a unitholder’s percentage interest in us
because of our issuance of additional common units will decrease his share of our nonrecourse liabilities, and thus will result in a corresponding deemed distribution of cash. This deemed distribution may constitute a non-pro rata distribution. A
non-pro rata distribution of money or
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property may result in ordinary income to a unitholder, regardless of his tax basis in his common units, if the distribution reduces the unitholder’s share of our “unrealized
receivables,” including depreciation recapture, and/or substantially appreciated “inventory items,” both as defined in Section 751 of the Internal Revenue Code, and collectively, “Section 751 Assets.” To that
extent, he will be treated as having been distributed his proportionate share of the Section 751 Assets and then having exchanged those assets with us in return for the non-pro rata portion of the actual distribution made to him. This latter
deemed exchange will generally result in the unitholder’s realization of ordinary income, which will equal the excess of (1) the non-pro rata portion of that distribution over (2) the unitholder’s tax basis (generally zero) for
the share of Section 751 Assets deemed relinquished in the exchange.
Basis of Common Units.
A
unitholder’s initial tax basis for his common units will be the amount of cash he pays for our common units and his adjusted basis in any assets he exchanges for common units plus his share of our nonrecourse liabilities. That basis will be
increased by his share of our income and by any increases in his share of our nonrecourse liabilities. That basis will be decreased, but not below zero, by distributions from us, by the unitholder’s share of our losses, by any decreases in his
share of our nonrecourse liabilities and by his share of our expenditures that are not deductible in computing taxable income and are not required to be capitalized. A unitholder will have no share of our debt that is recourse to our general
partner, but will have a share, generally based on his share of profits, of our nonrecourse liabilities. Please see “— Disposition of Common Units— Recognition of Gain or Loss.”
Limitations on Deductibility of Losses.
The deduction by a unitholder of his share of our losses will be limited to the tax
basis in his units and, in the case of an individual unitholder, estate, trust, or corporate unitholder (if more than 50% of the value of the corporate unitholder’s stock is owned directly or indirectly by or for five or fewer individuals or
some tax-exempt organizations), to the amount for which the unitholder is considered to be “at risk” with respect to our activities, if that is less than his tax basis. A unitholder subject to these limitations must recapture losses
deducted in previous years to the extent that distributions cause his at-risk amount to be less than zero at the end of any taxable year. Losses disallowed to a unitholder or recaptured as a result of these limitations will carry forward and will be
allowable as a deduction to the extent that his at-risk amount is subsequently increased, provided such losses do not exceed such common unitholders’ tax basis in his common units. Upon the taxable disposition of a unit, any gain recognized by
a unitholder can be offset by losses that were previously suspended by the at-risk limitation but may not be offset by losses suspended by the basis limitation. Any loss previously suspended by the at-risk limitation in excess of that gain would no
longer be utilizable.
In general, a unitholder will be at risk to the extent of the tax basis of his units, excluding any
portion of that basis attributable to his share of our nonrecourse liabilities, reduced by (i) any portion of that basis representing amounts otherwise protected against loss because of a guarantee, stop loss agreement or other similar
arrangement and (ii) any amount of money he borrows to acquire or hold his units, if the lender of those borrowed funds owns an interest in us, is related to the unitholder or can look only to the units for repayment. A unitholder’s
at-risk amount will increase or decrease as the tax basis of the unitholder’s units increases or decreases, other than tax basis increases or decreases attributable to increases or decreases in his share of our nonrecourse liabilities.
In addition to the basis and at-risk limitations on the deductibility of losses, the passive loss limitations generally
provide that individuals, estates, trusts and some closely-held corporations and personal service corporations can deduct losses from passive activities, which are generally trade or business activities in which the taxpayer does not materially
participate, only to the extent of the taxpayer’s income from those passive activities. The passive loss limitations are applied separately with respect to each publicly traded partnership. Consequently, any passive losses we generate will only
be available to offset our passive income generated in the future and will not be available to offset income from other passive activities or investments, including our investments or investments in other publicly traded partnerships, or salary or
active business income. Passive losses that are not deductible because they exceed a unitholder’s share of income we generate may be deducted in full when he disposes of his entire investment in us in a fully taxable transaction with an
unrelated party. The passive loss limitations are applied after other applicable limitations on deductions, including the at-risk rules and the basis limitation.
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A unitholder’s share of our net income may be offset by any of our suspended passive
losses, but it may not be offset by any other current or carryover losses from other passive activities, including those attributable to other publicly traded partnerships.
Limitations on Interest Deductions
. The deductibility of a non-corporate taxpayer’s “investment interest expense”
is generally limited to the amount of that taxpayer’s “net investment income.” Investment interest expense includes:
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interest on indebtedness properly allocable to property held for investment;
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our interest expense attributed to portfolio income; and
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the portion of interest expense incurred to purchase or carry an interest in a passive activity to the extent attributable to portfolio income.
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The computation of a unitholder’s investment interest expense will take into account interest on any
margin account borrowing or other loan incurred to purchase or carry a unit. Net investment income includes gross income from property held for investment and amounts treated as portfolio income under the passive loss rules, less deductible
expenses, other than interest, directly connected with the production of investment income, but generally does not include gains attributable to the disposition of property held for investment or qualified dividend income. The IRS has indicated that
the net passive income earned by a publicly traded partnership will be treated as investment income to its unitholders. In addition, the unitholder’s share of our portfolio income will be treated as investment income.
Entity-Level Payments.
If we are required or elect under applicable law to pay any federal, state, local or foreign income
tax on behalf of any unitholder or our general partner or any former unitholder, we are authorized to pay those taxes from our funds. That payment, if made, will be treated as a distribution of cash to the partner on whose behalf the payment was
made. If the payment is made on behalf of a person whose identity cannot be determined, we are authorized to treat the payment as a distribution to all current unitholders. We are authorized to amend our partnership agreement in the manner necessary
to maintain uniformity of intrinsic tax characteristics of units and to adjust later distributions, so that after giving effect to these distributions, the priority and characterization of distributions otherwise applicable under our partnership
agreement is maintained as nearly as is practicable. Payments by us as described above could give rise to an overpayment of tax on behalf of an individual partner in which event the partner would be required to file a claim in order to obtain a
credit or refund.
Allocation of Income, Gain, Loss and Deduction.
In general, if we have a net profit, our items
of income, gain, loss and deduction will be allocated among our general partner and our unitholders in accordance with their percentage interests in us. At any time that incentive distributions are made to our general partner, gross income will be
allocated to the recipients to the extent of these distributions. If we have a net loss, that loss will be allocated first to the general partner and the unitholders in accordance with their percentage interests in us to the extent of their positive
capital accounts and, second, to the general partner.
Specified items of our income, gain, loss and deduction will be
allocated to account for (i) any difference between the tax basis and fair market value of our assets at the time of an offering and (ii) any difference between the tax basis and fair market value of any property contributed to us that
exists at the time of such contribution, together, referred to in this discussion as the “Contributed Property.” The effect of these allocations, referred to as Section 704(c) Allocations, to a unitholder purchasing common units from
us in an offering will be essentially the same as if the tax bases of our assets were equal to their fair market value at the time of such offering. In the event we issue additional common units or engage in certain other transactions in the future,
we will make “reverse Section 704(c) Allocations,” similar to the Section 704(c) Allocations described above, to all holders of partnership interests immediately prior to such issuance or other transactions to account for the
difference between the “book” basis for purposes of maintaining capital accounts and the fair market value of all property held by us at the time of such issuance or future transaction. In addition, items of recapture income will be
allocated to the extent possible to the partner who was allocated the deduction giving rise to the treatment of that gain as recapture income in order to minimize the recognition of ordinary income by some unitholders. Finally, although we do not
expect that our operations will result in the creation of negative capital accounts, if negative capital accounts nevertheless result, items of our income and gain will be allocated in an amount and manner as is needed to eliminate the negative
balance as quickly as possible.
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An allocation of items of our income, gain, loss or deduction, other than an allocation
required by the Internal Revenue Code to eliminate the difference between a partner’s “book” capital account, credited with the fair market value of Contributed Property, and “tax” capital account, credited with the tax
basis of Contributed Property, referred to in this discussion as the “Book-Tax Disparity,” will generally be given effect for federal income tax purposes in determining a partner’s share of an item of income, gain, loss or deduction
only if the allocation has substantial economic effect. In any other case, a partner’s share of an item will be determined on the basis of his interest in us, which will be determined by taking into account all the facts and circumstances,
including:
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his relative contributions to us;
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the interests of all the partners in profits and losses;
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the interest of all the partners in cash flow; and
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the rights of all the partners to distributions of capital upon liquidation.
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Akin Gump Strauss Hauer & Feld LLP is of the opinion that, with the exception of the issues described in “—
Section 754 Election” and “— Disposition of Common Units— Allocations Between Transferors and Transferees,” allocations under our partnership agreement will be given effect for federal income tax purposes in determining
a partner’s share of an item of income, gain, loss or deduction.
Treatment of Short Sales
. A unitholder whose
units are loaned to a “short seller” to cover a short sale of units may be considered as having disposed of those units. If so, he would no longer be treated for tax purposes as a partner with respect to those units during the period of
the loan and may recognize gain or loss from the disposition. As a result, during this period:
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any of our income, gain, loss or deduction with respect to those units would not be reportable by the unitholder;
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any cash distributions received by the unitholder as to those units would be fully taxable; and
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all of these distributions would appear to be ordinary income.
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Akin Gump Strauss Hauer & Feld LLP has not rendered an opinion regarding the tax treatment of a unitholder whose common units
are loaned to a short seller to cover a short sale of common units because there is no direct or indirect authority on the issue related to partnership interests and without such authority a legal opinion cannot be issued; therefore, unitholders
desiring to assure their status as partners and avoid the risk of gain recognition from a loan to a short seller are urged to modify any applicable brokerage account agreements to prohibit their brokers from borrowing and loaning their units. The
IRS has announced that it is actively studying issues relating to the tax treatment of short sales of partnership interests. Please also read “— Disposition of Common Units— Recognition of Gain or Loss.”
Alternative Minimum Tax
. Each unitholder will be required to take into account his distributive share of any items of our income,
gain, loss or deduction for purposes of the alternative minimum tax. Prospective unitholders are urged to consult with their tax advisors as to the impact of an investment in units on their liability for the alternative minimum tax.
Tax Rates
. Under current law, the highest marginal U.S. federal income tax rate applicable to ordinary income of individuals
is 35% and the highest marginal U.S. federal income tax rate applicable to long-term capital gains (generally, capital gains on certain assets held for more than 12 months) of individuals is 15%. However, absent new legislation extending
the current rates, beginning January 1, 2011, the highest marginal U.S. federal income tax rate applicable to ordinary income and long-term capital gains of individuals will increase to 39.6% and 20%, respectively. Moreover, these rates
are subject to change by new legislation at any time.
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The recently enacted Patient Protection and Affordable Care Act will impose a 3.8% Medicare
tax on certain investment income earned by individuals for taxable years beginning after December 31, 2012. For these purposes, investment income generally includes a unitholder’s allocable share of our income and gain realized by a
unitholder from a sale of units. The tax will be imposed on the lesser of (i) the unitholder’s net income from all investments, and (ii) the amount by which the unitholder’s adjusted gross income exceeds $250,000 (if the
unitholder is married and filing jointly) or $200,000 (if the unitholder is unmarried).
Section 754 Election
. We
have made the election permitted by Section 754 of the Internal Revenue Code. That election is irrevocable without the consent of the IRS. The election will generally permit us to adjust a common unit purchaser’s tax basis in our assets
(“inside basis”) under Section 743(b) of the Internal Revenue Code to reflect his purchase price. This election does not apply to a person who purchases common units directly from us. The Section 743(b) adjustment belongs to the
purchaser and not to other unitholders. For purposes of this discussion, a unitholder’s inside basis in our assets will be considered to have two components: (1) his share of our tax basis in our assets (“common basis”) and
(2) his Section 743(b) adjustment to that basis.
Where the remedial allocation method is adopted (which we have
generally adopted as to all of our properties), the Treasury Regulations under Section 743 of the Internal Revenue Code require a portion of the Section 743(b) adjustment that is attributable to recovery property under Section 168 of
the Internal Revenue Code whose book basis is in excess of its tax basis to be depreciated over the remaining cost recovery period for the Section 704(c) built in gain. Under Treasury Regulation Section 1.167(c)-1(a)(6), a
Section 743(b) adjustment attributable to property subject to depreciation under Section 167 of the Internal Revenue Code, rather than cost recovery deductions under Section 168, is generally required to be depreciated using either
the straight-line method or the 150% declining balance method. If we elect a method other than the remedial method, the depreciation and amortization methods and useful lives associated with the Section 743(b) adjustment, therefore, may differ
from the methods and useful lives generally used to depreciate the inside basis in such properties. Under our partnership agreement, the general partner is authorized to take a position to preserve the uniformity of units even if that position is
not consistent with these and any other Treasury Regulations. Please see “— Uniformity of Units.”
Although Akin Gump Strauss Hauer & Feld LLP is unable to opine as to the validity of this approach because there is no direct or
indirect controlling authority on this issue, we intend to depreciate the portion of a Section 743(b) adjustment attributable to unrealized appreciation in the value of Contributed Property, to the extent of any unamortized Book-Tax Disparity,
using a rate of depreciation or amortization derived from the depreciation or amortization method and useful life applied to the property’s unamortized Book-Tax Disparity, or treat that portion as non-amortizable to the extent attributable to
property which is not amortizable. This method is consistent with the methods employed by other publicly traded partnerships but is arguably inconsistent with Treasury Regulation Section 1.167(c)-1(a)(6), which is not expected to directly
apply to a material portion of our assets. To the extent this Section 743(b) adjustment is attributable to appreciation in value in excess of the unamortized Book-Tax Disparity, we will apply the rules described in the Treasury Regulations and
legislative history. If we determine that this position cannot reasonably be taken, we may take a depreciation or amortization position under which all purchasers acquiring units in the same month would receive depreciation or amortization, whether
attributable to common basis or a Section 743(b) adjustment, based upon the same applicable rate as if they had purchased a direct interest in our assets. This kind of aggregate approach may result in lower annual depreciation or amortization
deductions than would otherwise be allowable to some unitholders. Please see “— Uniformity of Units.” A unitholder’s tax basis for his common units is reduced by his share of our deductions (whether or not such deductions
were claimed on an individual’s income tax return) so that any position we take that understates deductions will overstate the common unitholder’s basis in his common units, which may cause the unitholder to understate gain or overstate
loss on any sale of such units. Please see “— Disposition of Common Units— Recognition of Gain or Loss.” The IRS may challenge our position with respect to depreciating or amortizing the Section 743(b) adjustment we
take to preserve the uniformity of the units. If such a challenge were sustained, the gain from the sale of units might be increased without the benefit of additional deductions.
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A Section 754 election is advantageous if the transferee’s tax basis in his units
is higher than the units’ share of the aggregate tax basis of our assets immediately prior to the transfer. In that case, as a result of the election, the transferee would have, among other items, a greater amount of depreciation deductions and
his share of any gain on a sale of our assets would be less. Conversely, a Section 754 election is disadvantageous if the transferee’s tax basis in his units is lower than those units’ share of the aggregate tax basis of our assets
immediately prior to the transfer. Thus, the fair market value of the units may be affected either favorably or unfavorably by the election. A basis adjustment is required regardless of whether a Section 754 election is made in the case of a
transfer of an interest in us if we have a substantial built-in loss immediately after the transfer, or if we distribute property and have a substantial basis reduction. Generally a built-in loss or a basis reduction is substantial if it exceeds
$250,000.
The calculations involved in the Section 754 election are complex and will be made on the basis of assumptions
as to the value of our assets and other matters. For example, the allocation of the Section 743(b) adjustment among our assets must be made in accordance with the Internal Revenue Code. The IRS could seek to reallocate some or all of any
Section 743(b) adjustment allocated by us to our tangible assets to goodwill instead. Goodwill, as an intangible asset, is generally nonamortizable or amortizable over a longer period of time or under a less accelerated method than our tangible
assets. We cannot assure you that the determinations we make will not be successfully challenged by the IRS and that the deductions resulting from them will not be reduced or disallowed altogether. Should the IRS require a different basis adjustment
to be made, and should, in our opinion, the expense of compliance exceed the benefit of the election, we may seek permission from the IRS to revoke our Section 754 election. If permission is granted, a subsequent purchaser of units may be
allocated more income than he would have been allocated had the election not been revoked.
Tax Treatment of
Operations
Accounting Method and Taxable Year
. We use the year ending December 31 as our taxable year and
the accrual method of accounting for federal income tax purposes. Each unitholder will be required to include in income his share of our income, gain, loss and deduction for our taxable year ending within or with his taxable year. In addition, a
unitholder who has a taxable year ending on a date other than December 31 and who disposes of all of his units following the close of our taxable year but before the close of his taxable year must include his share of our income, gain, loss and
deduction in income for his taxable year, with the result that he will be required to include in income for his taxable year his share of more than one year of our income, gain, loss and deduction. Please see “— Disposition of Common
Units— Allocations Between Transferors and Transferees.”
Tax Basis, Depreciation and Amortization
. The
tax basis of our assets will be used for purposes of computing depreciation and cost recovery deductions and, ultimately, gain or loss on the disposition of these assets. The federal income tax burden associated with the difference between the fair
market value of our assets and their tax basis immediately prior to an offering will be borne by our unitholders holding interests in us prior to any such offering. Please see “— Tax Consequences of Unit Ownership— Allocation of
Income, Gain, Loss and Deduction.”
To the extent allowable, we may elect to use the depreciation and cost recovery
methods that will result in the largest deductions being taken in the early years after assets subject to these allowances are placed in service. We may not be entitled to amortization deductions with respect to certain goodwill conveyed to us in
future transactions or held at the time of any future offering. Property we subsequently acquire or construct may be depreciated using accelerated methods permitted by the Internal Revenue Code.
If we dispose of depreciable property by sale, foreclosure or otherwise, all or a portion of any gain, determined by reference to the
amount of depreciation previously deducted and the nature of the property, may be subject to the recapture rules and taxed as ordinary income rather than capital gain. Similarly, a unitholder who has taken cost recovery or depreciation deductions
with respect to property we own will likely be required to recapture some or all of those deductions as ordinary income upon a sale of his interest in us. Please see “— Tax Consequences of Unit Ownership— Allocation of Income, Gain,
Loss and Deduction” and “— Disposition of Common Units— Recognition of Gain or Loss.”
The costs we
incur in selling our units (called “syndication expenses”) must be capitalized and cannot be deducted currently, ratably or upon our termination. There are uncertainties regarding the classification of costs as organization expenses, which
may be amortized by us, and as syndication expenses, which may not be amortized by us. The underwriting discounts and commissions we incur will be treated as syndication expenses.
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Valuation and Tax Basis of Our Properties
. The federal income tax consequences
of the ownership and disposition of units will depend in part on our estimates of the relative fair market values, and the initial tax bases, of our assets. Although we may from time to time consult with professional appraisers regarding valuation
matters, we will make many of the relative fair market value estimates ourselves. These estimates and determinations of basis are subject to challenge and will not be binding on the IRS or the courts. If the estimates of fair market value or basis
are later found to be incorrect, the character and amount of items of income, gain, loss or deductions previously reported by unitholders might change, and unitholders might be required to adjust their tax liability for prior years and incur
interest and penalties with respect to those adjustments.
Disposition of Common Units
Recognition of Gain or Loss.
Gain or loss will be recognized on a sale of units equal to the difference between the amount
realized and the unitholder’s tax basis for the units sold. A unitholder’s amount realized will be measured by the sum of the cash or the fair market value of other property received by him plus his share of our nonrecourse liabilities.
Because the amount realized includes a unitholder’s share of our nonrecourse liabilities, the gain recognized on the sale of units could result in a tax liability in excess of any cash received from the sale.
Prior distributions from us in excess of cumulative net taxable income for a common unit that decreased a unitholder’s tax basis in
that common unit will, in effect, become taxable income if the common unit is sold at a price greater than the unitholder’s tax basis in that common unit, even if the price received is less than his original cost.
Except as noted below, gain or loss recognized by a unitholder, other than a “dealer” in units, on the sale or exchange of a
unit will generally be taxable as capital gain or loss. Capital gain recognized by an individual on the sale of units held for more than twelve months will generally be taxed at a maximum U.S. federal income tax rate of 15% through
December 31, 2010 and 20% thereafter (absent new legislation extending or adjusting the current rate). However, a portion, which will likely be substantial, of this gain or loss will be separately computed and taxed as ordinary income or loss
under Section 751 of the Internal Revenue Code to the extent attributable to assets giving rise to depreciation recapture or other “unrealized receivables” or to “inventory items” we own. The term “unrealized
receivables” includes potential recapture items, including depreciation recapture. Ordinary income attributable to unrealized receivables, inventory items and depreciation recapture may exceed net taxable gain realized upon the sale of a unit
and may be recognized even if there is a net taxable loss realized on the sale of a unit. Thus, a unitholder may recognize both ordinary income and a capital loss upon a sale of units. Net capital losses may offset capital gains and no more than
$3,000 of ordinary income, in the case of individuals, and may only be used to offset capital gains in the case of corporations.
The IRS has ruled that a partner who acquires interests in a partnership in separate transactions must combine those interests and
maintain a single adjusted tax basis for all those interests. Upon a sale or other disposition of less than all of those interests, a portion of that tax basis must be allocated to the interests sold using an “equitable apportionment”
method, which generally means that the tax basis allocated to the interest sold equals an amount that bears the same relation to the partner’s tax basis in his entire interest in the partnership as the value of the interest sold bears to the
value of the partner’s entire interest in the partnership. Treasury Regulations under Section 1223 of the Internal Revenue Code allow a selling unitholder who can identify common units transferred with an ascertainable holding period to
elect to use the actual holding period of the common units transferred. Thus, according to the ruling discussed above, a common unitholder will be unable to select high or low basis common units to sell as would be the case with corporate stock,
but, according to the Treasury Regulations, he may designate specific common units sold for purposes of determining the holding period of units transferred. A unitholder electing to use the actual holding period of common units transferred must
consistently use that identification method for all subsequent sales or exchanges of common units. A unitholder considering the purchase of additional units or a sale of common units purchased in separate transactions is urged to consult his tax
advisor as to the possible consequences of this ruling and application of the Treasury Regulations.
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Specific provisions of the Internal Revenue Code affect the taxation of some financial
products and securities, including partnership interests, by treating a taxpayer as having sold an “appreciated” partnership interest, one in which gain would be recognized if it were sold, assigned or terminated at its fair market value,
if the taxpayer or related persons enter(s) into:
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an offsetting notional principal contract; or
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a futures or forward contract with respect to the partnership interest or substantially identical property.
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Moreover, if a taxpayer has previously entered into a short sale, an offsetting notional principal contract or a futures or forward
contract with respect to the partnership interest, the taxpayer will be treated as having sold that position if the taxpayer or a related person then acquires the partnership interest or substantially identical property. The Secretary of the
Treasury is also authorized to issue regulations that treat a taxpayer that enters into transactions or positions that have substantially the same effect as the preceding transactions as having constructively sold the financial position.
Allocations Between Transferors and Transferees
. In general, our taxable income and losses will be determined annually, will
be prorated on a monthly basis and will be subsequently apportioned among our unitholders in proportion to the number of units owned by each of them as of the opening of the applicable exchange on the first business day of the month, which we refer
to as the “Allocation Date.” However, gain or loss realized on a sale or other disposition of our assets other than in the ordinary course of business will be allocated among our unitholders on the Allocation Date in the month in which
that gain or loss is recognized. As a result, a unitholder transferring units may be allocated income, gain, loss and deduction realized after the date of transfer.
Although simplifying conventions are contemplated by the Internal Revenue Code and most publicly traded partnerships use similar
simplifying conventions, the use of this method may not be permitted under existing Treasury Regulations. Accordingly, Akin Gump Strauss Hauer & Feld LLP is unable to opine on the validity of this method of allocating income and deductions
between transferor and transferee unitholders. If this method is not allowed under the Treasury Regulations, or only applies to transfers of less than all of the unitholder’s interest, our taxable income or losses might be reallocated among the
unitholders. We are authorized to revise our method of allocation between transferor and transferee unitholders, as well as unitholders whose interests vary during a taxable year, to conform to a method permitted under future Treasury Regulations.
A unitholder who owns units at any time during a quarter and who disposes of them prior to the record date set for a cash
distribution for that quarter will be allocated items of our income, gain, loss and deductions attributable to that quarter but will not be entitled to receive that cash distribution.
Notification Requirements.
A unitholder who sells any of his units is generally required to notify us in writing of that sale
within 30 days after the sale. A purchaser of units who purchases units from another unitholder is also generally required to notify us in writing of that purchase within 30 days after the purchase. Upon receiving such notifications, we
are required to notify the IRS of that transaction and to furnish specified information to the transferor and transferee. Failure to notify us of a purchase may, in some cases, lead to the imposition of penalties. However, these reporting
requirements do not apply to a sale by an individual who is a citizen of the United States and who effects the sale or exchange through a broker who will satisfy such requirements.
Constructive Termination.
We will be considered to have been terminated for tax purposes if there are sales or exchanges
which, in the aggregate, constitute 50% or more of the total interests in our capital and profits within a twelve-month period. For purposes of measuring whether the 50% threshold is reached, multiple sales of the same interest are counted only
once. A constructive termination results in the closing of our taxable year for all unitholders. In the case of a unitholder reporting on a taxable year other than a fiscal year ending December 31, the closing of our taxable year may result in
more than twelve months of our taxable income or loss being includable in his taxable income for the year of termination. A constructive termination occurring on a date other than December 31 may result in us filing two tax returns (and common
unitholders may receive two Schedules K-1) for one fiscal year and the cost of the preparation of these returns will be borne by all common unitholders. We would be required to make new tax elections after a termination, including a new election
under Section 754 of the Internal Revenue Code, and a termination would result in a deferral of our deductions for depreciation. A termination could also result in penalties if we were unable to determine that the termination had occurred.
Moreover, a termination might either accelerate the application of, or subject us to, any tax legislation enacted before the termination.
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Uniformity of Units
Because we cannot match transferors and transferees of units, we must maintain uniformity of the economic and tax characteristics of the
units to a purchaser of these units. In the absence of uniformity, we may be unable to completely comply with a number of federal income tax requirements, both statutory and regulatory. A lack of uniformity can result from a literal application of
Treasury Regulation Section 1.167(c)-1(a)(6). Any non-uniformity could have a negative impact on the value of the units. Please see “— Tax Consequences of Unit Ownership—Section 754 Election.”
We intend to depreciate the portion of a Section 743(b) adjustment attributable to unrealized appreciation in the value of
Contributed Property, to the extent of any unamortized Book-Tax Disparity, using a rate of depreciation or amortization derived from the depreciation or amortization method and useful life applied to the property’s unamortized Book-Tax
Disparity, or treat that portion as nonamortizable, to the extent attributable to property the common basis of which is not amortizable, consistent with the Treasury Regulations under Section 743 of the Internal Revenue Code, even though that
position may be inconsistent with Treasury Regulation Section 1.167(c)-1(a)(6), which is not expected to directly apply to a material portion of our assets. Please see “— Tax Consequences of Unit Ownership— Section 754
Election.” To the extent that the Section 743(b) adjustment is attributable to appreciation in value in excess of the unamortized Book-Tax Disparity, we will apply the rules described in the Treasury Regulations and legislative history. If
we determine that this position cannot reasonably be taken, we may adopt a depreciation and amortization position under which all purchasers acquiring units in the same month would receive depreciation and amortization deductions, whether
attributable to a common basis or Section 743(b) adjustment, based upon the same applicable methods and lives as if they had purchased a direct interest in our property. If this position is adopted, it may result in lower annual depreciation
and amortization deductions than would otherwise be allowable to some unitholders and risk the loss of depreciation and amortization deductions not taken in the year that these deductions are otherwise allowable. This position will not be adopted if
we determine that the loss of depreciation and amortization deductions will have a material adverse effect on our unitholders. If we choose not to utilize this aggregate method, we may use any other reasonable depreciation and amortization method to
preserve the uniformity of the intrinsic tax characteristics of any units that would not have a material adverse effect on our unitholders. The IRS may challenge any method of depreciating the Section 743(b) adjustment described in this
paragraph. If this challenge were sustained, the uniformity of units might be affected, and the gain from the sale of units might be increased without the benefit of additional deductions. Please see “— Disposition of Common Units—
Recognition of Gain or Loss.”
Tax-Exempt Organizations and Other Investors
Ownership of units by employee benefit plans, other tax-exempt organizations, non-resident aliens, foreign corporations and other
foreign persons raise issues unique to those investors and, as described below, may have substantially adverse tax consequences to them. If you are a tax-exempt entity or a foreign person, you should consult your tax advisor before
investing in our common units.
Employee benefit plans and most other organizations exempt from federal income tax, including
individual retirement accounts and other retirement plans, are subject to federal income tax on unrelated business taxable income. Virtually all of our income allocated to a unitholder that is a tax-exempt organization will be unrelated business
taxable income and will be taxable to it.
Non-resident aliens and foreign corporations, trusts or estates that own units will
be considered to be engaged in business in the United States because of the ownership of units. As a consequence, they will be required to file federal tax returns to report their share of our income, gain, loss or deduction and pay federal income
tax at regular rates on their share of our net income or gain. Moreover, under rules applicable to publicly traded partnerships, we will withhold at the highest applicable effective tax rate from cash distributions made quarterly to
foreign unitholders. Each foreign unitholder must obtain a taxpayer identification number from the IRS and submit that number to our transfer agent on a Form W-8BEN or applicable substitute form in order to obtain credit for these
withholding taxes. A change in applicable law may require us to change these procedures.
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In addition, because a foreign corporation that owns units will be treated as engaged in a
United States trade or business, that corporation may be subject to the United States branch profits tax at a rate of 30%, in addition to regular federal income tax, on its share of our income and gain, as adjusted for changes in the foreign
corporation’s “U.S. net equity,” which are effectively connected with the conduct of a United States trade or business. That tax may be reduced or eliminated by an income tax treaty between the United States and the country in
which the foreign corporate unitholder is a “qualified resident.” In addition, this type of unitholder is subject to special information reporting requirements under Section 6038C of the Internal Revenue Code.
Under a ruling of the IRS, a foreign unitholder who sells or otherwise disposes of a unit will be subject to federal income tax on gain
realized on the sale or disposition of that unit to the extent that this gain is effectively connected with a United States trade or business of the foreign unitholder. Because a foreign unitholder is considered to be engaged in business in the
United States by virtue of the ownership of units, under this ruling a foreign unitholder who sells or otherwise disposes of a unit generally will be subject to federal income tax on gain realized on the sale or other disposition of units. Apart
from the ruling, a foreign unitholder will not be taxed or subject to withholding upon the sale or disposition of a unit if he has owned less than 5% in value of the units during the five-year period ending on the date of the disposition and if the
units are regularly traded on an established securities market at the time of the sale or disposition.
Administrative Matters
Information Returns and Audit Procedures
. We intend to furnish to each unitholder, within 90 days after the close of each calendar
year, specific tax information, including a Schedule K-1, which describes his share of our income, gain, loss and deduction for our preceding taxable year. In preparing this information, which will not be reviewed by counsel, we will take various
accounting and reporting positions, some of which have been mentioned earlier, to determine each unitholder’s share of income, gain, loss and deduction. We cannot assure you that those positions will in all cases yield a result that conforms to
the requirements of the Internal Revenue Code, Treasury Regulations or administrative interpretations of the IRS. Neither we nor Akin Gump Strauss Hauer & Feld LLP can assure prospective unitholders that the IRS will not successfully
contend in court that those positions are impermissible. Any challenge by the IRS could negatively affect the value of the units.
The IRS may audit our federal income tax information returns. Adjustments resulting from an IRS audit may require each unitholder to
adjust a prior year’s tax liability, and possibly may result in an audit of his return. Any audit of a unitholder’s return could result in adjustments not related to our returns as well as those related to our returns.
Partnerships generally are treated as separate entities for purposes of federal tax audits, judicial review of administrative adjustments
by the IRS and tax settlement proceedings. The tax treatment of partnership items of income, gain, loss and deduction are determined in a partnership proceeding rather than in separate proceedings with the partners. The Internal Revenue Code
requires that one partner be designated as the “Tax Matters Partner” for these purposes. Our partnership agreement names our general partner as our Tax Matters Partner.
The Tax Matters Partner has made and will make elections on our behalf and on behalf of unitholders. In addition, the Tax Matters Partner
can extend the statute of limitations for assessment of tax deficiencies against unitholders for items in our returns. The Tax Matters Partner may bind a unitholder with less than a 1% profits interest in us to a settlement with the IRS unless that
unitholder elects, by filing a statement with the IRS, not to give that authority to the Tax Matters Partner. The Tax Matters Partner may seek judicial review, by which all our unitholders are bound, of a final partnership administrative adjustment
and, if the Tax Matters Partner fails to seek judicial review, judicial review may be sought by any unitholder having at least a 1% interest in profits or by any group of unitholders having in the aggregate at least a 5% interest in profits.
However, only one action for judicial review will go forward, and each unitholder with an interest in the outcome may participate.
A unitholder must file a statement with the IRS identifying the treatment of any item on his federal income tax return that is not
consistent with the treatment of the item on the tax report we provide to him. Intentional or negligent disregard of this consistency requirement may subject a unitholder to substantial penalties.
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Nominee Reporting
. Persons who hold an interest in us as a nominee for another person
are required to furnish to us:
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the name, address and taxpayer identification number of the beneficial owner and the nominee;
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whether the beneficial owner is
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a person that is not a United States person,
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a foreign government, an international organization or any wholly owned agency or instrumentality of either of the foregoing, or
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the amount and description of units held, acquired or transferred for the beneficial owner; and
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specific information including the dates of acquisitions and transfers, means of acquisitions and transfers, and acquisition cost for purchases, as well as the amount
of net proceeds from sales.
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Brokers and financial institutions are required to furnish additional information,
including whether they are United States persons and specific information on units they acquire, hold or transfer for their own account. A penalty of $50 per failure, up to a maximum of $100,000 per calendar year, is imposed by the Internal Revenue
Code for failure to report that information to us. The nominee is required to supply the beneficial owner of the units with the information furnished to us.
Accuracy-Related Penalties
. An additional tax equal to 20% of the amount of any portion of an underpayment of tax that is
attributable to one or more specified causes, including negligence or disregard of rules or regulations, substantial understatements of income tax and substantial valuation misstatements, is imposed by the Internal Revenue Code. No penalty will be
imposed, however, for any portion of an underpayment if it is shown that there was a reasonable cause for that portion and that the taxpayer acted in good faith regarding that portion.
For individuals, a substantial understatement of income tax in any taxable year exists if the amount of the understatement exceeds the
greater of 10% of the tax required to be shown on the return for the taxable year or $5,000 ($10,000 for most corporations). The amount of any understatement subject to penalty generally is reduced if any portion is attributable to a position
adopted on the return:
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for which there is, or was, “substantial authority,” or
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as to which there is a reasonable basis and the pertinent facts of that position are disclosed on the return.
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If any item of income, gain, loss or deduction included in the distributive shares of unitholders might result in that kind of an
“understatement” of income for which no “substantial authority” exists, we must disclose the pertinent facts on our return. In addition, we will make a reasonable effort to furnish sufficient information for unitholders to make
adequate disclosure on their returns and to take other actions as may be appropriate to permit unitholders to avoid liability for this penalty. More stringent rules apply to “tax shelters,” which we do not believe includes us or any of our
investments, plans or arrangements.
A substantial valuation misstatement exists if the value of any property, or the adjusted
basis of any property, claimed on a tax return is 150% or more of the amount determined to be the correct amount of the valuation or adjusted basis. No penalty is imposed unless the portion of the underpayment attributable to a substantial valuation
misstatement exceeds $5,000 ($10,000 for most corporations). If the valuation claimed on a return is 200% or more than the correct valuation, the penalty imposed increases to 40%. We do not anticipate making any valuation misstatements.
Reportable Transactions
. If we were to engage in a “reportable transaction,” we (and possibly you and others) would
be required to make a detailed disclosure of the transaction to the IRS. A transaction may be a reportable transaction based upon any of several factors, including the fact that it is a type of tax avoidance transaction publicly
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identified by the IRS as a “listed transaction” or that it produces certain kinds of losses for partnerships, individuals, S corporations, and trusts in excess of $2 million
in any single year, or $4 million in any combination of six successive tax years. Our participation in a reportable transaction could increase the likelihood that our federal income tax information return (and possibly your tax return) would be
audited by the IRS. Please see “— Information Returns and Audit Procedures.”
Moreover, if we were to
participate in a reportable transaction with a significant purpose to avoid or evade tax, or in any listed transaction, you may be subject to the following provisions of the American Jobs Creation Act of 2004:
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accuracy-related penalties with a broader scope, significantly narrower exceptions, and potentially greater amounts than described above at
“— Accuracy-Related Penalties,”
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for those persons otherwise entitled to deduct interest on federal tax deficiencies, nondeductibility of interest on any resulting tax liability, and
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in the case of a listed transaction, an extended statute of limitations.
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We do not expect to engage in any reportable transactions.
State, Local, Foreign and Other Tax Consequences
In addition to federal income taxes, you may be subject to other taxes, such as state, local, and foreign income taxes, unincorporated
business taxes, and estate, inheritance or intangible taxes that may be imposed by the various jurisdictions in which we do business or own property or in which you are a resident. We own assets and do business in more than 25 states including
Texas, Louisiana, Mississippi, Alabama, Florida, Arkansas and Oklahoma. Many of the states we currently do business in currently impose a personal income tax. We may also own property or do business in other states in the future. Although an
analysis of those various taxes is not presented here, each prospective unitholder is urged to consider their potential impact on his investment in us. Although you may not be required to file a return and pay taxes in some jurisdictions because
your income from that jurisdiction falls below the filing and payment requirement, you might be required to file income tax returns and to pay income taxes in other jurisdictions in which we do business or own property, now or in the future, and may
be subject to penalties for failure to comply with those requirements. In some jurisdictions, tax losses may not produce a tax benefit in the year incurred and may not be available to offset income in subsequent taxable years. Some jurisdictions may
require us, or we may elect, to withhold a percentage of income from amounts to be distributed to a unitholder who is not a resident of the jurisdiction. Withholding, the amount of which may be greater or less than a particular unitholder’s
income tax liability to the jurisdiction, generally does not relieve a nonresident unitholder from the obligation to file an income tax return. Amounts withheld will be treated as if distributed to unitholders for purposes of determining the amounts
distributed by us. Please see “— Tax Consequences of Unit Ownership— Entity-Level Payments.”
It
is the responsibility of each unitholder to investigate the legal and tax consequences, under the laws of pertinent jurisdictions, of his investment in us. Accordingly, each prospective unitholder is urged to consult, and depend upon, his tax
counsel or other advisor with regard to those matters. Further, it is the responsibility of each unitholder to file all state, local and foreign, as well as United States federal tax returns, that may be required of him. Akin Gump Strauss
Hauer & Feld LLP has not rendered an opinion on the state, local, or foreign tax consequences of an investment in us.
INVESTMENT IN GENESIS BY EMPLOYEE BENEFIT PLANS
An investment in Genesis by an employee benefit plan is subject to certain additional considerations because persons with discretionary
control of assets of such plans (a “fiduciary”) are subject to the fiduciary responsibility provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and transactions are subject to restrictions
imposed by Section 4975 of the Code. As used in this prospectus, the term “employee benefit plan” includes, but is not limited to, qualified pension, profit-sharing and stock bonus plans, Keogh plans, Simplified Employee Pension
Plans, and tax deferred annuities or Individual Retirement Accounts (“IRAs”) established or
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maintained by an employer or employee organization. Among other things, consideration should be given to (1) whether such investment is prudent under Section 404(a)(1)(B) of ERISA,
(2) whether in making such investment such plan will satisfy the diversification requirement of Section 404(a)(1)(C) of ERISA, and (3) whether such investment will result in recognition of unrelated business taxable income by such
plan. Please read “Material Income Tax Consequences—Tax-Exempt Organizations and Other Investors.” Fiduciaries should determine whether an investment in Genesis is authorized by the appropriate governing instrument and is an
appropriate investment for such plan.
In addition, a fiduciary of an employee benefit plan should consider whether such plan
will, by investing in Genesis, be deemed to own an undivided interest in the assets of Genesis, with the result that the general partner would also be a fiduciary of such plan and Genesis would be subject to the regulatory restrictions of ERISA,
including its prohibited transaction rules, as well as the prohibited transaction rules of the Code.
Section 406 of
ERISA and Section 4975 of the Code (which also applies to IRAs that are not considered part of an employee benefit plan; i.e., IRAs established or maintained by individuals rather than an employer or employee organization) prohibit an employee
benefit plan from engaging in certain transactions involving “plan assets” with parties who are “parties in interest” under ERISA or “disqualified persons” under the Code with respect to the plan. Under Department of
Labor regulations the assets of an entity in which employee benefit plans acquire equity interests would not be deemed “plan assets” if, among other things, (1) the equity interests acquired by employee benefit plans are publicly
offered securities - i.e., the equity interests are widely held by 100 or more investors independent of the issuer and each other, freely transferable and registered pursuant to certain provisions of the federal securities law, (2) the entity
is an “operating company” - i.e., it is primarily engaged in the production or sale of a product or service other than the investment of capital, or (3) there is no significant investment by benefit plan investors, which is defined to
mean that less than 25% of the value of each class of equity interest is held by employee benefit plans subject to the fiduciary responsibility provisions of ERISA or Section 4975 of the Code. Genesis’ assets are not expected to be
considered “plan assets” under these regulations because it is expected that the investment will satisfy the requirements in (1) above, and may also satisfy the requirements in (2) and (3).
Each person investing in Genesis will be deemed to represent that its acquisition, holding and disposition of such investment will not
constitute a non-exempt prohibited transaction under Section 406 of ERISA or Section
4975 of the Code.
PLAN OF DISTRIBUTION
We may offer and sell the securities described in this prospectus from time to time directly, through agents, or to or through
underwriters or dealers. The prospectus supplement relating to any particular offering will contain the terms of the securities sold in that offering, including:
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the names of any underwriters, dealers or agents (if any);
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underwriting discounts;
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•
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sales agents’ commissions;
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other forms of underwriter or agent compensation;
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discounts, concessions or commissions that underwriters may pass on to other dealers; and
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any exchange on which the securities are listed.
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We may change the offering price, underwriting discounts or concessions, or the price to dealers when necessary. Discounts or commissions
received by underwriters or agents and any profits on the resale of securities by them may constitute underwriting discounts and commissions under the Securities Act.
32
Unless we state otherwise in a prospectus supplement, underwriters will need to meet certain
requirements before purchasing securities. Agents may act on a “best efforts” basis during their appointment. We will also state the net proceeds from the sale in a prospectus supplement.
Any brokers or dealers that participate in the distribution of the securities may be “underwriters” within the meaning of the
Securities Act for such sales. Profits, commissions, discounts or concessions received by such broker or dealer may be underwriting discounts and commissions under the Securities Act. Brokers or dealers may act as agent or may purchase securities as
principal and thereafter resell the securities from time to time in or through one or more transactions or distributions.
Offers to purchase securities may be solicited directly by us and the sale thereof may be made by us directly to institutional investors
or others, who may be deemed to be underwriters within the meaning of the Securities Act with respect to any resale thereof. The terms of any such sales will be described in the prospectus supplement relating thereto. We may use electronic media,
including the Internet, to sell offered securities directly.
When necessary, we may fix securities distribution using
changeable, fixed prices, market prices at the time of sale, prices related to market prices, or negotiated prices.
We may,
through agreements, indemnify underwriters, dealers or agents that participate in the distribution of the securities against certain liabilities including liabilities under the Securities Act. We may also provide funds for payments that the
underwriters, dealers or agents may be required to make. Underwriters, dealers and agents, and their affiliates may transact with us and our affiliates in the ordinary course of their business.
We may offer our equity securities described in this prospectus into an existing trading market on the terms described in the prospectus
supplement thereto. Underwriters and dealers who may participate in any at-the-market offerings will be described in the prospectus supplement relating thereto.
The aggregate maximum compensation the underwriters will receive in connection with the sale of any securities under this prospectus and
the registration statement of which it forms a part will not exceed 10% of the gross proceeds from the sale.
Because the
Financial Industry Regulatory Authority (FINRA) views our common units as interests in a direct participation program, any offering of common units under the registration statement of which this prospectus forms a part will be made in compliance
with Rule 2310 of the FINRA Rules.
To the extent required, this prospectus may be amended or supplemented from time to time
to describe a specific plan of distribution. The place and time of delivery for the equity securities in respect of which this prospectus is delivered will be set forth in the accompanying prospectus supplement.
To facilitate an offering of a series of the securities, certain persons participating in the offering may engage in transactions that
stabilize, maintain, or otherwise affect the price of the securities. This may include over-allotments or short sales of the securities, which involves the sale by persons participating in the offering of more securities than we sold to them. In
these circumstances, these persons would cover the over-allotments or short positions by making purchases in the open market or by exercising their over-allotment option. In addition, these persons may stabilize or maintain the price of the
securities by bidding for or purchasing securities in the open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating in the offering may be reclaimed if securities sold by them are repurchased in connection
with stabilization transactions. The effect of these transactions may be to stabilize or maintain the market price of the securities at a level above that which might otherwise prevail in the open market. These transactions may be discontinued at
any time.
Any offering and sale under this prospectus may be made on one or more national securities exchanges or in the
over-the-counter market, or otherwise at prices and on terms then prevailing or at prices related to the then-current market price, or in negotiated transactions.
33
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
The statements in this prospectus and the documents incorporated in this prospectus by reference that are not historical information may
be “forward looking statements” within the meaning of the various provisions of the Securities Act and the Securities Exchange Act of 1934. All statements, other than historical facts, included in this prospectus and the documents
incorporated in this prospectus by reference that address activities, events or developments that we expect or anticipate will or may occur in the future, including things such as plans for growth of the business, future capital expenditures,
competitive strengths, goals, references to future goals or intentions and other such references are forward-looking statements. These forward-looking statements are identified as any statement that does not relate strictly to historical or current
facts. They use words such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “position,”
“projection,” “strategy” or “will” or the negative of those terms or other variations of them or by comparable terminology. In particular, statements, expressed or implied, concerning future actions, conditions or
events or future operating results or the ability to generate sales, income or cash flow are forward-looking statements. Forward-looking statements are not guarantees of performance. Those forward-looking statements reflect our intentions, plans,
expectations, assumptions and beliefs, and they involve risks, uncertainties and other contingencies, many of which are beyond our control. Future actions, conditions or events and future results of operations may differ materially from those
expressed in these forward-looking statements. Many of the factors that will determine these results are beyond our ability or the ability of our affiliates to control or predict. Specific factors that could cause actual results to differ from those
in the forward-looking statements include:
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demand for, the supply of, changes in forecast data for, and price trends related to crude oil, liquid petroleum, natural gas and natural gas liquids,
or “NGLs,” sodium hydrosulfide and caustic soda in the United States, all of which may be affected by economic activity, capital expenditures by energy producers, weather, alternative energy sources, international events, conservation and
technological advances;
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throughput levels and rates;
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changes in, or challenges to, our tariff rates;
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our ability to successfully identify and consummate strategic acquisitions, make cost saving changes in operations and integrate acquired assets or
businesses into our existing operations;
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service interruptions in our liquids transportation systems, natural gas transportation systems or natural gas gathering and processing operations;
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shut-downs or cutbacks at refineries, petrochemical plants, utilities or other businesses for which we transport crude oil, natural gas or other
products or to whom we sell such products;
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changes in laws or regulations to which we are subject;
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our inability to borrow or otherwise access funds needed for operations, expansions or capital expenditures as a result of existing debt agreements
that contain restrictive financial covenants;
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the effects of competition, in particular, by other pipeline systems;
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hazards and operating risks that may not be covered fully by insurance;
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the condition of the capital markets in the United States;
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the loss or bankruptcy of key customers;
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the political and economic stability of the oil producing nations of the world; and
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34
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general economic conditions, including rates of inflation and interest rates.
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You should not put undue reliance on any forward-looking statements. When considering forward-looking statements, please review the risk
factors described under “Risk Factors” beginning on page 2 of this prospectus. Except as required by applicable securities laws, we do not intend to update these forward-looking statements and information.
LEGAL MATTERS
Akin Gump Strauss Hauer & Feld LLP, as our counsel, will issue an opinion for us about the legality of the securities and the
material federal income tax considerations regarding the common units. Any underwriter will be advised about other issues relating to any offering by its own legal counsel.
EXPERTS
The consolidated financial statements and the related financial statement schedule incorporated in this prospectus by reference from
Genesis Energy, L.P.’s Annual Report on Form 10-K for the year ended December 31, 2009 and the effectiveness of Genesis Energy, L.P.’s internal control over financial reporting have been audited by Deloitte & Touche LLP, an
independent registered public accounting firm, as stated in their reports, which are incorporated herein by reference. Such consolidated financial statements and financial statement schedule have been so incorporated in reliance upon the reports of
such firm given upon their authority as experts in accounting and auditing.
The balance sheet of Genesis Energy, LLC as of
December 31, 2009, incorporated in this prospectus by reference from Genesis Energy, L.P.’s Current Report on Form 8-K filed on February 26, 2010 has been audited by Deloitte & Touche LLP, independent auditors, as stated in
their report, which is incorporated in this prospectus by reference. Such balance sheet has been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and other reports and other information with the Commission. You may read and copy documents we file at the
Commission’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for information on the public reference room. You can also find our filings at the Commission’s website at
http://www.sec.gov and on our website at http://www.genesisenergy.com. We make our website content available for information purposes only. Information contained on our website is not incorporated by reference into this prospectus and does not
constitute a part of this prospectus.
The Commission allows us to “incorporate by reference” the information we
have filed with the Commission, which means that we can disclose important information to you without actually including the specific information in this prospectus by referring you to those documents. The information incorporated by reference is an
important part of this prospectus and later information that we file with the Commission will automatically update and supersede this information. Therefore, before you decide to invest in a particular offering under this shelf registration, you
should always check for reports we may have filed with the Commission after the date of this prospectus. We incorporate by reference the documents listed below and any future filings we make with the Commission under Sections 13(a), 13(c), 14, or
15(d) of the Securities Exchange Act of 1934 (excluding information deemed to be furnished and not filed with the Commission) until we sell all of the securities offered by this prospectus:
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Annual Report on Form 10-K for the fiscal year ended December 31, 2009;
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Quarterly Report on Form 10-Q for the three months ended March 31, 2010;
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Current Reports on Form 8-K filed on February 11, 2010, February 26, 2010, March 5, 2010, March 22, 2010, and July 2, 2010;
and
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35
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the description of our common units in our registration statement on Form 8-A (File No. 001-12295) filed on January 30, 2001.
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We will provide without charge to each person, including any beneficial owner, to whom this prospectus is
delivered, upon written or oral request, a copy of any document incorporated by reference in this prospectus, other than exhibits to any such document not specifically described above. Requests for such documents should be directed to:
Investor Relations
Genesis Energy, L.P.
919 Milam, Suite 2100
Houston, Texas 77002
(713) 860-2500 or (800) 284-3365
We intend to furnish or make available to our unitholders within 75 days (or such shorter period as the Commission may prescribe)
following the close of our fiscal year end annual reports containing audited financial statements prepared in accordance with generally accepted accounting principles and furnish or make available within 40 days (or such shorter period as the
Commission may prescribe) following the close of each fiscal quarter quarterly reports containing unaudited interim financial information, including the information required by Form 10-Q for the first three fiscal quarters of each of our fiscal
years. Our annual report will include a description of any transactions with our general partner or its affiliates, and of fees, commissions, compensation and other benefits paid, or accrued to our general partner or its affiliates for the fiscal
year completed, including the amount paid or accrued to each recipient and the services performed.
36
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
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ITEM 14.
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OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
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The following table sets forth the costs and expenses, other than selling or underwriting discounts and commissions, we expect to incur in
connection with the issuance and distribution of the securities being registered. All amounts shown are estimated except the Commission registration fee. Genesis Energy, L.P. will bear all such costs.
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Securities and Exchange Commission registration fee
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$
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53,475
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Accounting fees and expenses
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15,000
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Legal fees and expenses
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50,000
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Printing and engraving expenses
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5,000
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Transfer agent fees
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5,000
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Listing fees*
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—
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Miscellaneous
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15,000
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Total
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$
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143,475
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*
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The listing fee is based upon the number of securities listed and is therefore currently indeterminable.
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ITEM 15.
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INDEMNIFICATION OF DIRECTORS AND OFFICERS
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Section 17-108 of the Delaware Revised Uniform Limited Partnership Act provides that, subject to such standards and restrictions, if
any, as are set forth in its limited partnership agreement, a Delaware limited partnership may, and shall have the power to, indemnify and hold harmless any partner or other person from and against all claims and demands whatsoever. The partnership
agreement of Genesis Energy, L.P. provides that Genesis Energy, L.P. will indemnify (to the fullest extent permitted by applicable law) certain persons (each, an “Indemnitee”) from and against any and all losses, claims, damages,
liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, penalties, interest, settlements or other amounts incurred by such Indemnitee in connection with any claim, demand, action, suit or proceeding to which
the Indemnitee is or was an actual or threatened party by reason of its status as an Indemnitee. This indemnity is available only if the Indemnitee acted in good faith, in a manner in which such Indemnitee believed to be in, or not opposed to, the
best interests of Genesis and, with respect to any criminal proceeding, had no reasonable cause to believe its conduct was unlawful. Indemnitees include the general partner, any Departing Partner (as defined in the partnership agreement of Genesis
Energy, L.P.), any affiliate of the general partner or any Departing Partner, any person who is or was a director, officer, employee, agent or trustee of the general partner or any Departing Partner or any affiliate of either (including Genesis
Energy, L.P. and its subsidiaries), or any person who is or was serving at the request of the general partner, any Departing Partner, or any such affiliate as a director, officer, employee, member, partner, agent fiduciary or trustee of another
person. Expenses subject to indemnity will be paid by the partnership to the Indemnitee in advance, subject to receipt of an undertaking by or on behalf of the Indemnitee to repay such amount if it is ultimately determined that the Indemnitee is not
entitled to indemnification. Genesis Energy, L.P. will, to the extent commercially reasonable, purchase and maintain insurance on behalf of the Indemnitees, whether or not Genesis Energy, L.P. would have the power to indemnify such Indemnitees
against liability under the partnership agreement.
Genesis Energy, L.P. has entered into indemnification agreements with the
directors of its general partner. Those agreements provide, among other things, that Genesis Energy, L.P. will indemnify each director in the event that such director becomes a party or otherwise a participant in any action or proceeding on account
of such director’s service as a director (or service for another entity in any capacity at the request of the general partner of Genesis Energy, L.P. or Genesis Energy, L.P.) to the fullest extent permitted by applicable law. Under each
indemnification agreement, Genesis Energy, L.P. has agreed to pay, in advance of the final disposition of any such action or proceeding, expenses (including attorneys’ fees) incurred by each director in defending or otherwise responding to such
action or proceeding. The contractual rights to indemnification provided by the indemnification agreements are subject to the limitations and conditions specified in those agreements, and are in addition to any
II-1
other rights the directors may have under the general partner’s limited liability company agreement and the partnership agreement of Genesis Energy, L.P. (each as amended from time to time)
and applicable law. The general partner of Genesis Energy, L.P. is party to each of those indemnification agreements. Genesis Energy, L.P. has joint and several liability with the general partner for all obligations owed to those directors under
those indemnification agreements. Under the partnership agreement of Genesis Energy, L.P., it has agreed to reimburse and indemnify the general partner for all costs and expenses it incurs in connection with being general partner of Genesis Energy,
L.P., including any costs and expenses related to indemnifying its directors.
Reference is made to Exhibit 1.1 hereto, which
will contain provisions for indemnification of Genesis Energy, L.P., the general partner and its directors, officers, and any controlling persons, against certain liabilities for information furnished by the underwriters and/or agents, as
applicable, expressly for use in a prospectus supplement.
II-2
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Exhibit
Number
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Description
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1.1*
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Underwriting Agreement
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4.1
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Certificate of Limited Partnership of Genesis Energy, L.P. (incorporated herein by reference to Exhibit 3.1 to Amendment No. 2 to Registration Statement on Form S-1, File No.
333-11545)
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4.2
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Fourth Amended and Restated Agreement of Limited Partnership of Genesis Energy, L.P. (incorporated herein by reference to Exhibit 4.1 to Form 8-K filed on June 15,
2005)
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4.3
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Amendment No. 1 to Fourth Amended and Restated Agreement of Limited Partnership of Genesis Energy, L.P. (incorporated herein by reference to Exhibit 3.3 to Form 10-K filed on March
17, 2008)
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4.4
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Amendment No. 2 to Fourth Amended and Restated Partnership Agreement of Genesis Energy, L.P., dated March 1, 2010 (incorporated herein by reference to Exhibit 10.2 to Form 8-K filed
on March 5, 2010)
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4.5
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Certificate of Conversion of Genesis Energy, Inc., a Delaware corporation, into Genesis Energy, LLC, a Delaware limited liability company (incorporated herein by reference to
Exhibit 3.1 to Form 8-K filed on January 7, 2009)
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4.6
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Certificate of Formation of Genesis Energy, LLC (incorporated herein by reference to Exhibit 3.2 to Form 8-K filed on January 7, 2009)
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4.7
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Amended and Restated Limited Liability Company Agreement of Genesis Energy, LLC dated February 5, 2009 (incorporated herein by reference to Exhibit 3.1 to Form 8-K filed on February
11, 2010)
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4.8
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Specimen Common Unit Certificate of Genesis Energy, L.P. (incorporated herein by reference to Exhibit 4.1 to Form 10-K filed March 17, 2008)
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4.9*
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Form of Preferred Security Certificate
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4.10*
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Form of Subordinated Security Certificate
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4.11*
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Form of Warrant Agreement
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4.12*
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Form of Warrant Certificate
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4.13*
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Form of Option Agreement
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4.14*
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Form of Rights Agreement
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5.1***
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Opinion of Akin Gump Strauss Hauer & Feld LLP as to the legality of the securities
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8.1**
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Opinion of Akin Gump Strauss Hauer & Feld LLP as to certain federal income tax matters
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23.1***
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Consent of Deloitte & Touche LLP
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23.2***
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Consent of Deloitte & Touche LLP
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23.3***
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Consent of Akin Gump Strauss Hauer & Feld LLP (included in Exhibit 5.1)
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23.4**
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Consent of Akin Gump Strauss Hauer & Feld LLP (included in Exhibit 8.1)
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24.1**
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Powers of Attorney
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*
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To be filed as an exhibit to a report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 or in a post-effective amendment to this
registration statement.
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II-3
(a) The
undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
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(i)
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To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
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(ii)
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To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
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(iii)
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To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such
information in the registration statement;
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provided, however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) do not
apply if information required to be included in a post-effective amendment by those paragraphs is contained in the reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any
purchaser:
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(i)
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Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was
deemed part of and included in the registration statement; and
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(ii)
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Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering
made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the
earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any
person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which the prospectus relates, and the offering of such
securities at that time shall be deemed to be the initial
bona fide
offering thereof.
Provided, however
, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document
incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any
statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
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II-4
(5) That, for the purpose of determining liability of the registrant under the Securities
Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the
underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be
considered to offer or sell such securities to such purchaser:
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(i)
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Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
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(ii)
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Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
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(iii)
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The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by
or on behalf of the undersigned registrant; and
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(iv)
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Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
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(b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933 each
filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be
deemed to be the initial
bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, in the
State of Texas, on July 15, 2010.
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GENESIS ENERGY, L.P.
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By:
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GENESIS ENERGY, LLC, its general partner
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By:
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/s/ Grant E. Sims
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Grant E. Sims
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Chief Executive Officer
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Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed below by
the following persons in the capacities set forth below on July 15, 2010.
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SIGNATURE
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TITLE
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(OF GENESIS ENERGY, LLC)*
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/s/ G
RANT
E.
S
IMS
Grant E. Sims
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Chief Executive Officer and Director
(Principal Executive Officer)
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/s/ R
OBERT
V.
D
EERE
Robert V. Deere
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Chief Financial Officer
(Principal Financial Officer)
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/s/ K
AREN
N.
P
APE
Karen N. Pape
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Senior Vice President and Controller
(Principal Accounting Officer)
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Robert C. Sturdivant
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Director
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Corbin J. Robertson III
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Director
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William K. Robertson
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Director
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SIGNATURE
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TITLE
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(OF GENESIS ENERGY, LLC)*
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Donald L. Evans
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Director
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James E. Davison
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Director
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James E. Davison, Jr.
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Director
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Kenneth M. Jastrow, II
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Director
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S. James Nelson
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Director
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Sharilyn S. Gasaway
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Director
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Carl A. Thomason
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Director
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**By
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/
S
/ R
OBERT
V.
D
EERE
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Robert V. Deere
Attorney-in-fact
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*
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Genesis Energy, LLC is the sole general partner of Genesis Energy, L.P.
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INDEX TO EXHIBITS
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Exhibit
Number
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Description
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1.1*
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Underwriting Agreement
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4.1
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Certificate of Limited Partnership of Genesis Energy, L.P. (incorporated herein by reference to Exhibit 3.1 to Amendment No. 2 to Registration Statement on Form S-1, File No.
333-11545)
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4.2
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Fourth Amended and Restated Agreement of Limited Partnership of Genesis Energy, L.P. (incorporated herein by reference to Exhibit 4.1 to Form 8-K filed on June 15,
2005)
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4.3
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Amendment No. 1 to Fourth Amended and Restated Agreement of Limited Partnership of Genesis Energy, L.P. (incorporated herein by reference to Exhibit 3.3 to Form 10-K filed on March
17, 2008)
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4.4
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Amendment No. 2 to Fourth Amended and Restated Partnership Agreement of Genesis Energy, L.P., dated March 1, 2010 (incorporated herein by reference to Exhibit 10.2 to Form 8-K filed
on March 5, 2010)
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4.5
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Certificate of Conversion of Genesis Energy, Inc., a Delaware corporation, into Genesis Energy, LLC, a Delaware limited liability company (incorporated herein by reference to
Exhibit 3.1 to Form 8-K filed on January 7, 2009)
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4.6
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Certificate of Formation of Genesis Energy, LLC (incorporated herein by reference to Exhibit 3.2 to Form 8-K filed on January 7, 2009)
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4.7
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Amended and Restated Limited Liability Company Agreement of Genesis Energy, LLC dated February 5, 2009 (incorporated herein by reference to Exhibit 3.1 to Form 8-K filed on February
11, 2010)
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4.8
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Specimen Common Unit Certificate of Genesis Energy, L.P. (incorporated herein by reference to Exhibit 4.1 to Form 10-K filed March 17, 2008)
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4.9*
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Form of Preferred Security Certificate
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4.10*
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Form of Subordinated Security Certificate
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4.11*
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Form of Warrant Agreement
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4.12*
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Form of Warrant Certificate
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4.13*
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Form of Option Agreement
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4.14*
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Form of Rights Agreement
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5.1***
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Opinion of Akin Gump Strauss Hauer & Feld LLP as to the legality of the securities
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8.1**
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Opinion of Akin Gump Strauss Hauer & Feld LLP as to certain federal income tax matters
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23.1***
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Consent of Deloitte & Touche LLP
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23.2***
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Consent of Deloitte & Touche LLP
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23.3***
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Consent of Akin Gump Strauss Hauer & Feld LLP (included in Exhibit 5.1)
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23.4**
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Consent of Akin Gump Strauss Hauer & Feld LLP (included in Exhibit 8.1)
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24.1**
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Powers of Attorney
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*
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To be filed as an exhibit to a report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 or in a post-effective amendment to this
registration statement.
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Genesis Energy (AMEX:GEL)
과거 데이터 주식 차트
부터 10월(10) 2024 으로 11월(11) 2024
Genesis Energy (AMEX:GEL)
과거 데이터 주식 차트
부터 11월(11) 2023 으로 11월(11) 2024
