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GENESIS ENERGY LP

GENESIS ENERGY LPGELEarnings & Financial Report

NYSE · Industrials · Pipe Lines (No Natural Gas)

Genesis Energy LP is a U.S.-based midstream energy limited partnership that operates critical infrastructure for crude oil, natural gas, refined petroleum products, and specialty industrial materials. Its core assets include pipelines, storage terminals, marine facilities, and rail logistics hubs, serving refineries, industrial clients, and energy distributors across North America.

What changed in GENESIS ENERGY LP's 10-K — 2022 vs 2023

Top changes in GENESIS ENERGY LP's 2023 10-K

577 paragraphs added · 554 removed · 460 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

182 edited+29 added−38 removed203 unchanged
The Marco Polo Crude Oil Pipeline transports crude oil from our Marco Polo crude oil platform to an interconnect with the Allegheny Crude Oil Pipeline in Green Canyon Block 164. • Constitution Crude Oil Pipeline.
The Marco Polo Pipeline transports crude oil from our Marco Polo crude oil platform to an interconnect with the Allegheny Crude Oil Pipeline in Green Canyon Block 164. • Constitution Pipeline.
Demand for soda ash in the U.S. has been relatively flat over the last five years, with the exception of a slight decline in mid-2020 due to economic shutdowns related to the Covid-19 pandemic (which has recovered in 2021 and 2022).
Demand for soda ash in the U.S. has been relatively flat over the last five years, with the exception of a slight decline in mid-2020 due to economic shutdowns related to the Covid-19 pandemic (which recovered in 2021 and 2022).
We believe we are one of the largest marketers of NaHS in North and South America. By minimizing our costs through utilization of our own logistical assets and leased storage sites, we believe we have a competitive advantage over other suppliers of NaHS.
We are one of the largest marketers of NaHS in North and South America. By minimizing our costs through utilization of our own logistical assets and leased storage sites, we believe we have a competitive advantage over other suppliers of NaHS.
Because of the structural cost advantages of natural soda ash production in the U.S., including lower raw material and energy requirements, imports have not been an important source of competition in North America. According to IHS, on average, the cash cost to produce material soda ash has been about half the cost to produce synthetic soda ash.
Because of the structural cost advantages of natural soda ash production in the U.S., including lower raw material and energy requirements, imports have not been an important source of competition in North America. According to IHS, on average, the cash cost to produce natural soda ash has been about half the cost to produce synthetic soda ash.
Onshore Crude Oil Pipelines Through the onshore pipeline systems and related assets we own and operate, we transport crude oil for our gathering and marketing operations and for other shippers pursuant to tariff rates regulated by FERC or the Railroad Commission of Texas (“TXRRC”).
Onshore Crude Oil Pipelines Through the onshore pipeline systems and related assets we own and operate, we transport crude oil for our gathering and marketing operations and for other shippers pursuant to tariff rates regulated by the FERC or the Railroad Commission of Texas (“TXRRC”).
Our Texas System also transports crude oil from Hastings Junction (south of Houston) to several delivery points near Houston, Texas (including our Webster, Texas facility). We earn a tariff for our transportation services, with the tariff rate per barrel of crude oil varying with the distance from injection point to delivery point. • Jay System .
Our Texas System also transports crude oil from Hastings Junction (south of Houston, Texas) to several delivery points near Houston, Texas (including our Webster, Texas facility). We earn a tariff for our transportation services, with the tariff rate per barrel of crude oil varying with the distance from injection point to delivery point. • Jay System .
We provide a suite of services, primarily to integrated and large independent energy companies who make intensive capital investments to develop numerous large-reservoir, long-lived crude oil and natural gas properties, in one of the largest producing regions in the U.S., the Gulf of Mexico. • Our Alkali Business has significant cost advantages over synthetic production methods.
We provide a suite of services, primarily to integrated and large independent energy companies who make intensive capital investments to develop numerous large-reservoir, long-lived crude oil and natural gas properties in one of the largest producing regions in the U.S., the deepwater Gulf of Mexico. • Our Alkali Business has significant cost advantages over synthetic production methods.
These assets include a suite of trucks, trailers, crude oil railcars, as well as terminals and other tankage with approximately 4.2 million barrels of leased and owned storage capacity in multiple locations along the Gulf Coast, accessible by pipeline, truck, rail or barge, in addition to tankage related to our crude oil pipelines, previously mentioned.
These assets include a suite of trucks and trailers, as well as terminals and other tankage with approximately 4.2 million barrels of leased and owned storage capacity in multiple locations along the Gulf Coast, accessible by pipeline, truck, rail or barge, in addition to tankage related to our crude oil pipelines, previously mentioned.
Food Safety Modernization Act requires that parts of our facility that produce animal nutrition products comply with more rigorous manufacturing standards. We believe that we materially comply with requirements currently in effect and have a program in place to maintain such compliance. We also comply with industry standards developed by various private organizations such as U.S.
Food Safety Modernization Act requires that parts of our facility that produce human food and animal nutrition products comply with more rigorous manufacturing standards. We believe that we materially comply with requirements currently in effect and have a program in place to maintain such compliance. We also comply with industry standards developed by various private organizations such as U.S.
We believe our offshore pipeline transportation segment is well positioned to participate in the energy transition and lower carbon world as barrels produced from the Gulf of Mexico are some of the least emission intensive barrels, from reservoir to refinery, of any barrel refined by Gulf Coast refineries (including shipping).
We believe our offshore pipeline transportation segment is well positioned to participate in both the energy transition and lower carbon world as barrels produced from the Gulf of Mexico are some of the least emission intensive barrels, from reservoir to refinery, of any barrel refined by Gulf Coast refineries (including shipping).
See “Compliance with and 32 Table of Contents changes in cybersecurity requirements has a cost impact on our business, and failure to comply with such laws and regulations could have an impact on our assets, costs, revenue generation and growth opportunities.” Available Information We make available free of charge on our internet website ( www.genesisenergy.com ) our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after we electronically file the material with, or furnish it to, the SEC.
See “Compliance with and changes in cybersecurity requirements has a cost impact on our business, and failure to comply with such laws and regulations could have an impact on our assets, costs, revenue generation and growth opportunities.” 30 Table of Contents Available Information We make available free of charge on our internet website ( www.genesisenergy.com ) our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after we electronically file the material with, or furnish it to, the SEC.
We are one of the leading providers of crude oil and petroleum product transportation, storage and other handling services for large, complex refineries in Baton Rouge, Louisiana and Baytown, Texas, both of which have been operational for over 100 years. • We are financially flexible and have significant liquidity.
We are one of the leading providers of crude oil and petroleum product transportation, storage and other handling services for two large, complex refineries in Baton Rouge, Louisiana and Baytown, Texas, both of which have been operational for over 100 years. • We are financially flexible and have significant liquidity.
In general, most of our offshore pipelines are not subject to regulatory rate-making authority, and the rates our offshore pipelines charge for services are dependent on the quality of the service required by the customer and the amount and term of the reserve commitment by that customer.
In general, most of our offshore pipelines are not subject to regulatory rate-making authority, and the rates we charge for services are dependent on the quality of the service required by the customer and the amount and term of the reserve commitment by that customer.
The net proceeds were used to purchase approximately $316 million of our existing 5.625% senior unsecured notes due June 15, 2024 (the “2024 Notes”), including the related accrued interest and tender premium and fees on those notes that were tendered in the tender offer that ended January 24, 2023, and the remaining proceeds at the time were used to repay a portion of the borrowings outstanding under our senior secured credit facility and for general partnership purposes.
The net proceeds were used to purchase approximately $316 million of our existing 5.625% senior unsecured notes due June 15, 2024 (the “2024 Notes”), and pay the related accrued interest and tender premium and fees on those notes that were tendered in the tender offer that ended January 24, 2023, and the remaining proceeds at the time were used to repay a portion of the borrowings outstanding under our senior secured credit facility and for general partnership purposes.
Our offshore pipelines generate cash flows from fees charged to customers or substantially similar arrangements that otherwise limit our direct exposure to changes in commodity prices.
We generate cash flows from our offshore pipelines from fees charged to customers or substantially similar arrangements that otherwise limit our direct exposure to changes in commodity prices.
In addition to the above, we have access to a suite of trucks, and trailers, as well as terminals and tankage with approximately 4.2 million barrels of storage capacity (excluding capacity associated with our common carrier crude oil pipelines) in multiple locations along the Gulf Coast, which we use to service customers and for our own account.
We have access to a suite of trucks and trailers, as well as terminals and tankage with approximately 4.2 million barrels of storage capacity (excluding capacity associated with our common carrier crude oil pipelines) in multiple locations along the Gulf Coast, which we use to service customers and for our own account.
The High Island Offshore System (“HIOS”) transports natural gas from producing fields located in the Galveston, Garden Banks, West Cameron, High Island and East Breaks areas of the Gulf of Mexico to interconnects with the Kinetica Energy Express. HIOS includes 152 miles of pipeline and eight pipeline junction and service platforms that are regulated by the FERC.
The High Island Offshore System (“HIOS”) transports natural gas from producing fields located in the Galveston, Garden Banks, West Cameron, High Island and East Breaks areas of the Gulf of Mexico to the Kinetica Energy Express. HIOS includes 152 miles of pipeline and eight pipeline junction and service platforms that are regulated by the FERC.
The other core focus of our business is our trona and trona-based exploring, mining, processing, producing, marketing and selling business based in Wyoming (our “Alkali Business”).
The other core focus of our business is our trona and trona-based exploring, mining, processing, producing, marketing, logistics and selling business based in Wyoming (our “Alkali Business”).
Not unlike our crude oil operations, we also gather refined products from refineries, transport refined products via pipeline, truck, railcar and barge, and sell refined products to customers in wholesale markets. For certain of these services, we generate fee-based income related to the transportation services provided.
Not unlike our crude oil operations, we also have the ability to gather refined products from refineries, transport refined products via pipeline, truck, railcar and barge, and sell refined products to customers in wholesale markets. For certain of these services, we generate fee-based income related to the transportation services provided.
Our offshore pipelines, with the exception of our Eugene Island pipeline, are neither interstate nor common carrier pipelines. However, these pipelines are subject to federal regulation under the Outer Continental Shelf Lands Act, which requires all pipelines operating on or across the outer continental shelf to provide nondiscriminatory transportation service.
Our offshore pipelines, with the exception of our Eugene Island pipeline and HIOS, are neither interstate nor common carrier pipelines. However, these pipelines are subject to federal regulation under the Outer Continental Shelf Lands Act, which requires all pipelines operating on or across the outer continental shelf to provide nondiscriminatory transportation service.
We believe we are one of the largest producers and marketers (based on tons produced) of NaHS in North and South America.
We are one of the largest producers and marketers (based on tons produced) of NaHS in North and South America.
Over the long-term, we intend to: • Increase the relative contribution of recurring and throughput-based revenues, emphasizing longer-term contractual arrangements; • Prudently manage our limited direct commodity price risks; • Maintain a sound, disciplined capital structure, including our current and forward path to deleveraging; • Fund capital projects through a combination of the available borrowing capacity under our senior secured credit facility, internally generated free cash flows from operations, or externally; • Pursue divestitures of non-core assets that support our deleveraging objective; and • Create strategic arrangements and share capital costs and risks through joint ventures and strategic alliances.
Over the long-term, we intend to: • Increase the relative contribution of recurring and throughput-based revenues, emphasizing longer-term contractual arrangements; • Prudently manage our limited direct commodity price risks; • Maintain a sound, disciplined capital structure, including our current and forward path to deleveraging; • Fund capital projects through a combination of the available borrowing capacity under our senior secured credit facility, internally generated cash flows from operations, or externally; • Create strategic arrangements and share capital costs and risks through joint ventures and strategic alliances; and • Pursue divestitures that support our deleveraging objective.
Our portfolio of accounts receivable is generally comprised in large part of obligations of refiners, integrated and large independent oil and natural gas producers, and mining and other industrial companies that purchase NaHS and soda ash, most of which have stable payment histories.
Credit Exposure Our portfolio of accounts receivable is generally comprised in large part of obligations of refiners, integrated and large independent oil and natural gas producers, industrial companies that purchase soda ash, and mining and other industrial companies that purchase NaHS, most of which have stable payment histories.
We operate one of the largest pipeline networks (based on throughput capacity) in the Deepwater area of the Gulf of Mexico, an area that produced approximately 15% of the oil produced in the U.S. during 2022. We are one of the leading producers (based on tons produced) of natural soda ash in the world.
We operate one of the largest pipeline networks (based on throughput capacity) in the Deepwater area of the Gulf of Mexico, an area that produced approximately 15% of the oil produced in the U.S. during 2023. We are one of the leading producers (based on tons produced) of natural soda ash in the world.
Time charters, which insulate us from revenue fluctuations caused by weather and navigational delays and temporary market declines, represented over 95% of our marine transportation revenues under term contracts during 2022 and 2021.
Time charters, which insulate us from revenue fluctuations caused by weather and navigational delays and temporary market declines, represented over 95% of our marine transportation revenues under term contracts during 2023 and 2022.
We may be unable to include some or all of such increased costs in the rates charged by our pipelines or other facilities, and any such recovery may depend on events beyond our control, including the outcome of future rate proceedings before the FERC or 30 Table of Contents state regulatory agencies and the provisions of any final legislation or implementing regulations.
We may be unable to include some or all of such increased costs in the rates charged by our pipelines or other facilities, and any such recovery may depend on events beyond our control, including the outcome of future rate proceedings before the FERC or state regulatory agencies and the provisions of any final legislation or implementing regulations.
NaHS has also gained acceptance in environmental applications, including waste treatment programs requiring stabilization and reduction of heavy and toxic metals and flue gas scrubbing. Additionally, NaHS can be used for removing hair from hides at the beginning of the tannery process. Caustic soda is used in many of the same industries as NaHS.
NaHS has also gained acceptance in environmental applications, including waste treatment programs requiring stabilization and reduction of heavy and toxic metals and flue gas scrubbing. Additionally, NaHS can be used for removing hair from hides at the beginning of the tannery process. 17 Table of Contents Caustic soda is used in many of the same industries as NaHS.
We generally earn a fee for unloading railcars at these facilities. Three of these facilities, our Baton Rouge, Louisiana, Raceland, Louisiana, and Walnut Hill, Florida facilities are directly connected to our existing integrated crude oil pipeline and terminal infrastructure. Within our onshore facilities and transportation business segment, we employ many types of logistically flexible assets.
We generally earn a fee for unloading railcars at these facilities. Three of these facilities, our Baton Rouge, Louisiana, Raceland, Louisiana, and Walnut Hill, Florida facilities are directly connected to our existing integrated crude oil pipeline and terminal infrastructure. 21 Table of Contents Within our onshore facilities and transportation business segment, we employ many types of logistically flexible assets.
On June 30, 2021, President Biden signed into law a joint resolution of Congress disapproving the 2020 amendments (with the exception of some technical changes) thereby reinstating the 2012 and 2016 New Source Performance standards. The EPA expects owners and 29 Table of Contents operators of regulated sources to take “immediate steps” to comply with these standards.
On June 30, 2021, President Biden signed into law a joint resolution of Congress disapproving the 2020 amendments (with the exception of some technical changes) thereby reinstating the 2012 and 2016 New Source Performance standards. The EPA expects owners and operators of regulated sources to take “immediate steps” to comply with these standards.
This segment provides services to one of the most active drilling and development regions in the U.S. (the Gulf of Mexico) a producing region representing approximately 15% of the crude oil production in the U.S. during 2022.
This segment provides services to one of the most active drilling and development regions in the U.S. (the Gulf of Mexico) a producing region representing approximately 15% of the crude oil production in the U.S. during 2023.
Competition among common marine carriers is based on a number of factors including proximity to production, refineries and connecting infrastructures, customer service, and transportation pricing. Our marine transportation segment also competes with other modes of transporting crude oil and heavy refined petroleum products, including pipeline, rail and trucking operations.
Competition among common marine carriers is based on a number of factors including proximity to production, refineries and connecting infrastructures, customer service, and transportation pricing. 19 Table of Contents Our marine transportation segment also competes with other modes of transporting crude oil and heavy refined petroleum products, including pipeline, rail and trucking operations.
Several of the production operations in our Alkali Business are subject to regulation by the U.S. Food and Drug Administration (“FDA”). Our sodium bicarbonate plant is a registered facility for the production of food and pharmaceutical 27 Table of Contents grade ingredients and we comply with strict Current Good Manufacturing Practice (“CGMP”) requirements in our operations. The U.S.
Several of the production operations in our Alkali Business are subject to regulation by the U.S. Food and Drug Administration (“FDA”). Our sodium bicarbonate plant is a registered facility for the production of food and pharmaceutical grade ingredients and we comply with strict Current Good Manufacturing Practice (“CGMP”) requirements in our operations. The U.S.
As part of our sulfur services business, we (i) provide sulfur removal services by processing refineries high sulfur (or “sour”) gas streams to remove the sulfur at eleven refining and petrochemical processing facilities located mostly in Texas, Louisiana, Arkansas, Oklahoma, Montana and Utah; (ii) operate significant storage and transportation assets in relation to those services; and (iii) sell NaHS and NaOH (also known as caustic soda) to large industrial and commercial companies.
As part of our sulfur services business, we (i) provide sulfur removal services by processing refineries high sulfur (or “sour”) gas streams to remove the sulfur at 11 refining or petrochemical processing facilities located mainly in Texas, Louisiana, Arkansas, Oklahoma, Montana and Utah; (ii) operate significant storage and transportation assets in relation to those services; and (iii) sell NaHS and NaOH (also known as caustic soda) to large industrial and commercial companies.
We sell our soda ash and specialty products to a diverse customer base directly in the U.S., Canada, the European Community, the European Free Trade Area and the South African Customs Union. Our Alkali Business also sells through the American Natural Soda Ash Corporation, or ANSAC, exclusively in all other markets.
We sell our soda ash and specialty products to a diverse customer base directly in the U.S., Canada, the European Community, the European Free Trade Area and the South African Customs Union. Our Alkali Business also sells soda ash through the American Natural Soda Ash Corporation (“ANSAC”) exclusively in all other markets.
Our sulfur services business helps our host refineries lower their emissions by processing their sour gas streams using our proprietary, closed-loop, non-combustion technology to remove sulfur from the sour gas, whereas the traditional combustion technology releases certain 7 Table of Contents levels of harmful gases and incremental carbon dioxide emissions into the atmosphere.
Our sulfur services business helps our host refineries lower their emissions by processing their sour gas streams using our proprietary, closed-loop, non-combustion technology to remove sulfur from the sour gas, whereas the traditional combustion technology releases certain levels of harmful gases and incremental carbon dioxide emissions into the atmosphere.
Our VSP’s have been approved and we are operating in compliance with the plans for all of its vessels and that are subject to the requirements, whether engaged in domestic or foreign trade. Railcar Regulation We operate a number of railcar unloading facilities and lease a significant number of railcars.
Our VSP’s have been approved and we are operating in compliance with the plans for all of its vessels and that are subject to the requirements, whether engaged in domestic or foreign trade. 24 Table of Contents Railcar Regulation We operate a number of railcar unloading facilities and lease a significant number of railcars.
The PHMSA has issued a number of rulemakings in response to the Pipeline Safety Act, the 2016 PIPES Act, and the 2020 PIPES Act, as well as prior statutes, concerning pipeline safety that impact our pipeline facilities. Over the past several 31 Table of Contents years, the PHMSA adopted additional regulations for natural gas and hazardous liquid pipeline safety.
The PHMSA has issued a number of rulemakings in response to the Pipeline Safety Act, the 2016 PIPES Act, and the 2020 PIPES Act, as well as prior statutes, concerning pipeline safety that impact our pipeline facilities. Over the past several years, the PHMSA adopted additional regulations for natural gas and hazardous liquid pipeline safety.
A majority of the NaHS we receive is sourced from refineries owned and operated by large companies, including Phillips 66, CITGO, HollyFrontier, Calumet and Ergon. Our eleven sulfur removal services contracts have an average remaining term of approximately four years. The timing upon which these contracts renew vary based upon location and terms specified within each specific contract.
A majority of the NaHS we receive is sourced from refineries owned and operated by large companies, including Phillips 66, CITGO, HollyFrontier, Calumet and Ergon. Our 11 sulfur removal services contracts have an average remaining term of approximately three years. The timing upon which these contracts renew vary based upon location and terms specified within each specific contract.
Our onshore pipelines generate cash flows from fees charged to customers. Each of our onshore pipelines has significant available capacity to accommodate potential future growth in volumes. We own four operational crude oil rail unloading facilities located in Baton Rouge, Louisiana; Raceland, Louisiana; Walnut Hill, Florida; and Natchez, Mississippi, which provide synergies to our existing asset footprint.
We generate cash flows from our onshore pipelines via fees charged to customers. Each of our onshore pipeline systems has available capacity to accommodate potential future growth in volumes. We own four operational crude oil rail unloading facilities located in Baton Rouge, Louisiana; Raceland, Louisiana; Walnut Hill, Florida; and Natchez, Mississippi, which provide synergies to our existing asset footprint.
Southeast Keathley Canyon Pipeline Company, LLC (“SEKCO”) has crude oil transportation agreements with various Gulf of Mexico producers who have dedicated their production from the Lucius, Buckskin and Hadrian North production areas 15 Table of Contents to the SEKCO pipeline for the life of their reserves.
Southeast Keathley Canyon Pipeline Company, LLC (“SEKCO”) has crude oil transportation agreements with various Gulf of Mexico producers who have dedicated their production from the Buckskin, Hadrian North and Lucius production areas to the SEKCO pipeline for the life of their reserves.
In addition, this system included the 86-mile East Breaks Gathering System, which connects HIOS to the Hoover-Diana deepwater platform located in Alaminos Canyon Block 25. • Anaconda.
In addition, this system includes the 86-mile East Breaks Gathering System, which connects HIOS to the Hoover-Diana deepwater platform located in Alaminos Canyon Block 25. • Anaconda.
The Green Canyon Laterals represent a collection of small diameter pipelines that gather natural gas for delivery to HIOS and various other downstream pipelines. • Manta Ray.
The Green Canyon Laterals are a collection of small diameter pipelines that gather natural gas for delivery to HIOS and various other downstream pipelines. • Manta Ray.
Rate 25 Table of Contents increases made pursuant to the index are presumed to be just and reasonable. They will be subject to protest, but such protests must show that the rate increase resulting from application of the index is substantially in excess of the applicable pipeline’s increase in costs.
Rate increases made pursuant to the index are presumed to be just and reasonable. They will be subject to protest, but such protests must show that the rate increase resulting from application of the index is substantially in excess of the applicable pipeline’s increase in costs.
However, if one of our tow boats is requisitioned or purchased 26 Table of Contents and its associated barge or barges are left idle, we would not be entitled to receive any compensation for the lost revenues resulting from the idled barges.
However, if one of our tow boats is requisitioned or purchased and its associated barge or barges are left idle, we would not be entitled to receive any compensation for the lost revenues resulting from the idled barges.
Most of the production handled by our offshore pipelines is pursuant to life-of-lease commitments that include both firm and interruptible capacity arrangements. Competition The principal competition for our offshore pipelines includes other crude oil and natural gas pipeline systems as well as producers who may elect to build or utilize their own production handling facilities.
Most of the production handled by our offshore pipelines is pursuant to life-of-lease commitments that include both firm and interruptible capacity arrangements. Competition Our principal competition in our offshore pipeline transportation business includes other crude oil and natural gas pipeline systems as well as producers who may elect to build or utilize their own production handling facilities.
This pipeline system serves as a key asset in our integrated Baton Rouge area midstream infrastructure. 22 Table of Contents Other Onshore Facilities and Transportation Operations We own four operational crude oil rail unloading facilities located in Baton Rouge, Louisiana; Raceland, Louisiana; Walnut Hill, Florida; and Natchez, Mississippi which provide synergies to our existing asset footprint.
This pipeline system serves as a key asset in our integrated Baton Rouge area midstream infrastructure. Other Onshore Facilities and Transportation Operations We own four operational crude oil rail unloading facilities located in Baton Rouge, Louisiana; Raceland, Louisiana; Walnut Hill, Florida; and Natchez, Mississippi which provide synergies to our existing asset footprint.
We also own 100% of the Southeast Keathley Canyon pipeline system, or SEKCO pipeline, which is a deepwater pipeline servicing the Lucius, Buckskin and Hadrian North fields in the southern Keathley Canyon area of the Gulf of Mexico. 6 Table of Contents Our interests in operating offshore natural gas pipeline systems and related infrastructure include approximately 764 miles of pipe with an aggregate design capacity of approximately 2,308 MMcf/day.
We also own 100% of the Southeast Keathley Canyon pipeline system (“SEKCO pipeline”), which is a deepwater pipeline currently servicing the Lucius, Buckskin and Hadrian North fields in the southern Keathley Canyon area of the Gulf of Mexico. 6 Table of Contents Our interests in operating offshore natural gas pipeline systems and related infrastructure include approximately 764 miles of pipe with an aggregate design capacity of approximately 2,308 MMcf/day.
The Allegheny Crude Oil Pipeline connects the Allegheny and South Timbalier 316 platforms in the Green Canyon area of the Gulf of Mexico with the CHOPS pipeline and Poseidon pipeline. • Marco Polo Crude Oil Pipeline.
The Allegheny Pipeline connects the Allegheny and South Timbalier 316 platforms in the Green Canyon area of the Gulf of Mexico with the CHOPS pipeline and Poseidon pipeline. • Marco Polo Pipeline.
The Clean Water Act and regulations implemented thereunder also prohibit the discharge of dredge and fill material into regulated waters, including jurisdictional wetlands, unless authorized by an appropriately issued permit. The scope of waters regulated under the CWA has fluctuated in recent years. On June 29, 2015, the EPA and the U.S.
The Clean Water Act and regulations implemented thereunder also prohibit the discharge of dredge and fill material into regulated waters, including jurisdictional wetlands, unless authorized by an appropriately issued permit. 26 Table of Contents The scope of waters regulated under the Clean Water Act has fluctuated in recent years. On June 29, 2015, the EPA and the U.S.
Human capital measures and objectives which we focus on in managing our business include safety, employee compensation and benefits, diversity and inclusion, and employee development. Employees and Collective Bargaining Agreements To carry out our business activities, we employed 2,109 employees at December 31, 2022. Approximately 700 of those employees were covered under collective bargaining agreements.
Human capital measures and objectives which we focus on in managing our business include safety, employee compensation and benefits, diversity and inclusion, and employee development. Employees and Collective Bargaining Agreements To carry out our business activities, we employed 2,137 employees at December 31, 2023. Approximately 700 of those employees were covered under collective bargaining agreements.
We own four onshore crude oil pipeline systems, with approximately 450 miles of pipe located primarily in Alabama, Florida, Louisiana, Mississippi and Texas that are rate regulated by the Federal Energy Regulatory Commission, or FERC. The rates for certain segments of our Texas onshore pipeline are regulated by the Railroad Commission of Texas.
We own four onshore crude oil pipeline systems, which consists of approximately 450 miles of pipe located in Texas, Louisiana, Alabama, Florida and Mississippi that are rate regulated by the Federal Energy Regulatory Commission, or FERC. The rates for certain segments of our Texas onshore pipeline are regulated by the Railroad Commission of Texas.
These collective bargaining agreements cover wage 24 Table of Contents increases and other benefits, including the defined benefit pension plan, the post-employment benefit plan and the enhanced 401(k) retirement savings plan. We consider our relationship with the union strong, and our relationship with our employees, including those covered by collective bargaining agreements, to be in good standing.
These collective bargaining agreements cover wage increases and other benefits, including the defined benefit pension plan, the post-employment benefit plan and the enhanced 401(k) retirement savings plan. We consider our relationship with the union strong, and our relationship with our employees, including those covered by collective bargaining agreements, to be in good standing.
Our sodium minerals and sulfur services footprint includes NaHS and caustic soda terminals in the Gulf Coast, the Midwest, Montana, Utah, British Columbia and South America. In conjunction with our onshore facilities and transportation segment, we sell and deliver (via railcars, ships, barges and trucks) NaHS and caustic soda to approximately 140 customers.
Our soda and sulfur services footprint includes NaHS and caustic soda terminals in the Gulf Coast, the Midwest, Montana, Utah, British Columbia and South America. In conjunction with our onshore facilities and transportation segment, we sell and deliver (via railcars, ships, barges and trucks) NaHS and caustic soda to approximately 120 customers.
Our mining operations in Wyoming are subject to mine permits issued by the Land Quality Division of the Wyoming Department of Environmental Quality (“WDEQ”). WDEQ imposes detailed reclamation obligations on us as a holder of mine permits. As of December 31, 2022, the amount of our reclamation bonds totaled to approximately $83 million.
Our mining operations in Wyoming are subject to mine permits issued by the Land Quality Division of the Wyoming Department of Environmental Quality (“WDEQ”). WDEQ imposes detailed reclamation obligations on us as a holder of mine permits. As of December 31, 2023, the amount of our reclamation bonds totaled to approximately $88 million.
For additional information, please review the section entitled “Financial Measures.” Our operations include, among others, the following diversified businesses, each of which is one of the leaders in its market, has a long commercial life and has significant barriers to entry: • one of the largest pipeline networks (based on throughput capacity) in the Deepwater area of the Gulf of Mexico, an area that produced approximately 15% of the oil produced in the U.S. during 2022; • one of the leading producers (based on tons produced) of natural soda ash in the world; • one of the largest producers and marketers (based on tons produced) of sodium hydrosulfide (or NaHS, pronounced “nash”) in North and South America; and • one of the leading providers of crude oil and petroleum transportation, storage, and other handling services for two of the largest refinery complexes in the U.S., one located in Baton Rouge, Louisiana and one in Baytown, Texas, both of which have been operational for over 100 years; We conduct our operations and own our operating assets through our subsidiaries and joint ventures.
For additional information, please review the section entitled “Financial Measures.” Our operations include, among others, the following diversified businesses, each of which is one of the leaders in its market, has a long commercial life and has significant barriers to entry: • one of the largest pipeline networks (based on throughput capacity) in the Deepwater area of the Gulf of Mexico, an area that produced approximately 15% of the oil produced in the U.S. during 2023; • one of the leading producers (based on tons produced) of natural soda ash in the world; • one of the largest producers and marketers (based on tons produced) of sodium hydrosulfide (or NaHS, pronounced “nash”) in North and South America; and • one of the leading providers of crude oil and petroleum transportation, storage, and other handling services for two of the largest refinery complexes in the U.S., one located in Baton Rouge, Louisiana and one in Baytown, Texas, both of which have been operational for over 100 years.
We are not dependent upon any one customer or principal location for our revenues. • Certain of our businesses are among the leaders in each of their respective markets and each of which has a long commercial life and significant barriers to entry .
We are not dependent upon any one segment, customer or principal location for our revenues. 9 Table of Contents • Certain of our businesses are among the leaders in each of their respective markets and each of which has a long commercial life and significant barriers to entry .
Competition Our competitors for the marine transportation of crude oil and heavy refined petroleum products are both midstream MLPs with marine transportation divisions, refineries, along with companies that are in the business of solely marine transportation operations.
Competition Our competitors for the marine transportation of crude oil and heavy refined petroleum products are midstream MLPs with marine transportation divisions, refineries and other companies that are in the business of solely marine transportation operations.
Among other things, the rules require all hazardous liquid pipelines in or affecting an HCA to be capable of accommodating in-line inspection tools within the next 20 years.
Among other things, the rules require all hazardous liquid pipelines in or affecting an HCA to be capable of accommodating in-line inspection tools 29 Table of Contents within the next 20 years.
These competitors supply caustic soda to our sodium minerals and sulfur services operations and support us in our third-party caustic soda sales.
These competitors supply caustic soda to our soda and sulfur services operations and support us in our third-party caustic soda sales.
According to historical production statistics, approximately 30% of global soda ash is produced from trona or similar sodium carbonate containing materials, with the remainder being produced synthetically, which requires chemical transformation of limestone and salt using a significantly higher amount of energy. Production of soda ash from trona is significantly less expensive than producing it synthetically.
According to historical production statistics, approximately 30% of global soda ash capacity is from trona or similar sodium carbonate containing materials, with the remaining capacity being synthetic, which requires chemical transformation of limestone and salt using a significantly higher amount of energy. Producing soda ash from trona is significantly less expensive than producing it synthetically.
Demand-type fees are similar to firm capacity reservation agreements for a pipeline in that they are charged to a customer 16 Table of Contents regardless of the volume the customer actually delivers to the platform.
Demand-type fees are similar to firm capacity reservation agreements for a pipeline in that they are charged to a customer regardless of the volume the customer actually delivers to the platform.
A spot contract is an agreement with a customer to move cargo from a specific origin to a designated 23 Table of Contents destination for a rate negotiated at the time the cargo movement takes place. Spot contract rates are at the current “market” rate and are subject to market volatility.
A spot contract is an agreement with a customer to move cargo from a specific origin to a designated destination for a rate negotiated at the time the cargo movement takes place. Spot contract rates are at the current “market” rate and are subject to market volatility.
We currently manage our businesses through four divisions that constitute our reportable segments: offshore pipeline transportation, sodium minerals and sulfur services, onshore facilities and transportation and marine transportation.
We currently manage our businesses through four divisions that constitute our reportable segments: offshore pipeline transportation, soda and sulfur services, marine transportation and onshore facilities and transportation.
Additionally, we own an interest in a number of junction and service platforms in the Gulf of Mexico, which are used to (i)interconnect the offshore pipeline network; (ii) provide an efficient means to perform pipeline maintenance; and (iii) contain equipment, such as pumps and measurement equipment, which can increase and direct flow on our pipelines.
Additionally, we own an interest in a number of junction and service platforms in the Gulf of Mexico, which are used to (i) interconnect the offshore pipeline network; (ii) provide an efficient means to perform pipeline maintenance; and (iii) increase or direct the flow on our pipelines via pumps and measurement equipment.
These new standards, to the extent implemented, as well as any future laws and their implementing regulations, may require us to obtain pre-approval for the expansion or modification of existing facilities or the construction of new facilities expected to produce air emissions, impose stringent air permit requirements, or mandate the use of specific equipment or technologies to control emissions.
These laws and regulations, as well as any future laws and their implementing regulations, may require us to obtain pre-approval for the 27 Table of Contents expansion or modification of existing facilities or the construction of new facilities expected to produce air emissions, impose stringent air permit requirements, or mandate the use of specific equipment or technologies to control emissions.
However, we believe that the credit risk posed by this industry concentration is offset by the creditworthiness of our specific customer base in the context of our specific transactions as well as other factors, including the strategic nature of certain of our assets and relationships and our credit procedures.
We believe that any credit risk posed by a concentration of customers in a specific industry is offset by the creditworthiness of our specific customer base in the context of our specific transactions as well as other factors, including the strategic nature of certain of our assets and relationships and our credit procedures.
We also own an interest in three offshore hub platforms, two of which are operational, with an aggregate processing capacity of approximately 495 MMcf/day of natural gas and 123 MBbls/day of crude oil.
We also own an interest in two offshore hub platforms with an aggregate processing capacity of approximately 495 MMcf/day of natural gas and 123 MBbls/day of crude oil.
Sulfur Removal Business Our sulfur services business primarily (i) provides sulfur-extraction services to eleven refining and petrochemical processing facilities located mostly in Texas, Louisiana, Arkansas, Oklahoma, Montana and Utah; (ii) operates significant storage and transportation assets in relation to those services; and (iii) sells NaHS and caustic soda to large industrial and commercial companies.
Sulfur Services Business Our sulfur services business primarily (i) provides sulfur removal services to 11 refining or petrochemical processing facilities located mainly in Texas, Louisiana, Arkansas, Oklahoma, Montana and Utah; (ii) operates significant storage and transportation assets in relation to those services; and (iii) sells NaHS and caustic soda to large industrial and commercial companies.
On August 16, 2022, President Biden signed into law the Inflation Reduction Act (“IRA”), which includes billions of dollars in incentives for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles, investments in advanced biofuels and supporting infrastructure and carbon capture and sequestration.
On August 16, 2022, President Biden signed into law the Inflation Reduction Act (“IRA”), which, along with the Investment in Infrastructure and Jobs Act, provides billions of dollars in incentives for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles, investments in advanced biofuels and supporting infrastructure and carbon capture and sequestration.
For example, we own a 64% interest in the Poseidon oil pipeline system, or Poseidon pipeline, and a 64% interest in the Cameron Highway oil pipeline system, or CHOPS pipeline, which are two of the largest crude oil pipelines (in terms of both length and design capacity) located in the Gulf of Mexico.
For example, we own a 64% interest in the Poseidon oil pipeline system (“Poseidon pipeline”), and a 64% interest in the Cameron Highway oil pipeline system (“CHOPS pipeline”), which are two of the largest crude oil pipelines (in terms of both length and design capacity) located in the Gulf of Mexico.
The Anaconda Gathering System gathers natural gas from producing fields located in the Green Canyon area in the Gulf of Mexico, including the the King’s Quay FPS, which supports the Khaleesi, Mormont and Samurai field developments, for delivery to the Nautilus System. • Green Canyon.
The Anaconda Gathering System gathers natural gas from producing fields located in the Green Canyon area in the Gulf of Mexico, as well as the King’s Quay FPS, which supports the Khaleesi, Mormont and Samurai field developments, to the Nautilus System. • Green Canyon.
Our Objectives and Strategies Our primary objectives are to generate and grow stable free cash flows from operations and continue to deleverage our balance sheet, while never wavering from our commitment to safe and responsible operations, as well as continue to advance and integrate our Environmental, Social and Governance (“ESG”) program.
Our Objectives and Strategies Our primary objectives are to generate and grow stable free cash flows from operations and continue to deleverage our balance sheet, while never wavering from our commitment to safe and responsible operations, as well as continue to advance and integrate our sustainability program.
Our historically consistent financial performance, combined with our goal of a conservative capital structure over the long term, has allowed us to generate relatively stable and increasing cash flows from operations. • We have limited direct commodity price risk exposure in our oil and gas and NaHS businesses.
Our historically consistent financial performance, combined with our goal of a conservative capital structure over the long term, has allowed us to generate relatively stable and increasing cash flows from operations. • We have limited direct commodity price risk exposure in our crude oil marketing business and cost exposure in our soda ash and NaHS businesses.
By utilizing our network of pipelines, trucks, railcars, barges, and terminals, we are able to provide transportation related services to, and in many cases back-to-back gathering and marketing arrangements with, crude oil refiners and producers.
By utilizing our network of pipelines, trucks, rail unloading facilities, barges, tanks and terminals, we are able to provide transportation related services to, and in many cases back-to-back gathering and marketing arrangements with, crude oil refiners and producers.
Government has issued numerous warnings that energy assets could be the subject of future terrorist attacks. We have instituted security measures and procedures in conformity with federal guidance. We will institute, as appropriate, additional security measures or procedures indicated by the federal government.
Since the terrorist attacks of September 11, 2001, the U.S. Government has issued numerous warnings that energy assets could be the subject of future terrorist attacks. We have instituted security measures and procedures in conformity with federal guidance. We will institute, as appropriate, additional security measures or procedures indicated by the federal government.
Subsequent appellate review could result in a further change to the index. In addition to the index methodology, FERC allows for rate changes under three other methods—cost-of-service, competitive market showings and agreements between shippers and the oil pipeline company that the rate is acceptable, or Settlement Rates.
The decision is subject to appellate review, which could result in a further change to the index. 23 Table of Contents In addition to the index methodology, FERC allows for rate changes under three other methods—cost-of-service, competitive market showings and agreements between shippers and the oil pipeline company that the rate is acceptable, or Settlement Rates.
Our portfolio of trucks, railcars, barges and terminals affords us flexibility within our existing regional footprint and provides us the capability to enter new markets and expand our customer relationships. • Our marine transportation assets provide waterborne transportation throughout North America.
Our portfolio of trucks, barges, pipelines, rail unloading facilities, tanks and terminals affords us flexibility within our existing regional footprint and provides us the capability to enter new markets and expand our customer relationships. • Our marine transportation assets provide waterborne transportation throughout North America.
The Shenzi Crude Oil Pipeline gathers crude oil production from the Shenzi production field located in the Green Canyon area of the Gulf of Mexico offshore Louisiana as well as from the King’s Quay FPS, which supports the Khaleesi, Mormont and Samurai field developments, for delivery to both our CHOPS pipeline and Poseidon pipeline systems. • Allegheny Crude Oil Pipeline.
The Shenzi Pipeline delivers crude oil from the Shenzi production field located in the Green Canyon area of the Gulf of Mexico offshore Louisiana as well as from the King’s Quay FPS, which supports the Khaleesi, Mormont and Samurai field developments, to the CHOPS pipeline and Poseidon pipeline. • Allegheny Pipeline.
Total daily volume for the year ended December 31, 2022 includes 28,850 and 53,459 Bbls/day of intermediate refined products and crude oil, respectively, associated with our Port of Baton Rouge Terminal pipelines. Our Louisiana system also transports crude oil from Port Hudson to our Baton Rouge Scenic Station rail unloading facility and continues downstream to the Anchorage Tank Farm.
Total daily volume for the year ended December 31, 2023 includes 32,458 and 33,019 Bbls/day of intermediate refined products and crude oil, respectively, associated with our Port of Baton Rouge Terminal pipelines. Our Louisiana system also transports crude oil from Port Hudson to our Baton Rouge Scenic Station rail unloading facility and continues downstream to the Anchorage Tank Farm.
We intend to develop our business by: • Identifying and exploiting incremental profit opportunities, including cost synergies, across an increasingly integrated footprint; • Economically expanding our pipeline and terminal operations by utilizing capacity currently available on our existing assets that requires minimal to no additional investment; • Optimizing our existing assets and creating synergies through additional commercial and operating advancement; • Leveraging customer relationships across business segments; • Attracting new customers and expanding our scope of services offered to existing customers; • Expanding the geographic reach of our businesses; • Evaluating internal and third party growth opportunities (including asset and business acquisitions) that leverage our core competencies and strengths and further integrate our businesses; and • Focusing on health, safety and environmental stewardship, and advancement of our ESG program. 9 Table of Contents Financial Strategy We believe that preserving financial flexibility is an important factor in our overall strategy and success.
We intend to execute this strategy by: • Identifying and exploiting incremental profit opportunities, including cost synergies, across an increasingly integrated footprint; • Economically expanding our pipeline and terminal operations by utilizing capacity currently available on our existing assets that requires minimal to no additional investment; • Optimizing our existing assets and creating synergies through additional commercial and operating advancement; • Leveraging customer relationships across business segments; • Attracting new customers and expanding our scope of services offered to existing customers; • Expanding the geographic reach of our businesses; • Evaluating internal and third party growth opportunities (including asset and business acquisitions) that leverage our core competencies and strengths and further integrate our businesses; and • Focusing on health, safety and environmental stewardship, and advancement of our sustainability program.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Tax Risks to Our Unitholders Our tax treatment depends on our status as a partnership for federal income tax purposes, as well as us not being subject to a material amount of entity-level taxation by individual states.
Tax Risks to Our Unitholders Our tax treatment depends on our status as a partnership for federal income tax purposes, as well as us not being subject to a material amount of entity-level taxation by individual states.
Collectively, members of the Davison family and their affiliates own approximately 11.1% of our Class A Common Units and 77.0% of our Class B Common Units and are able to exert significant influence over us, including the ability to elect at least a majority of the members of our board of directors and the ability to control most matters requiring board approval, such as material business strategies, mergers, business combinations, acquisitions or dispositions of assets, issuances of additional partnership securities, incurrences of debt or other financings and payments of distributions.
Collectively, members of the Davison family and their affiliates own approximately 11.0% of our Class A Common Units and 77.0% of our Class B Common Units and are able to exert significant influence over us, including the ability to elect at least a majority of the members of our board of directors and the ability to control most matters requiring board approval, such as material business strategies, mergers, business combinations, acquisitions or dispositions of assets, issuances of additional partnership securities, incurrences of debt or other financings and payments of distributions.
Risk Factors Summary Risks Related to the Operations of Our Business • We may not be able to fully execute our growth strategy due to various factors, such as unreceptive capital markets and/or excessive competition for acquisitions. • We may not have sufficient cash from operations to pay the current level of quarterly distributions following the establishment of cash reserves and payment of fees and expenses. • Our profitability and cash flow are dependent on our ability to increase or, at a minimum, maintain our current commodity (crude oil, natural gas, refined products, soda ash, NaHS and caustic soda) volumes, which often depend on actions and commitments by parties beyond our control. • Many of our crude oil and natural gas transportation customers are producers whose drilling activity levels and spending for transportation have historically been, and may continue to be, impacted by volatility in the commodity markets. • Fluctuations in prices for crude oil, refined petroleum products, NaHS, soda ash and caustic soda could adversely affect our business.
Risk Factors Summary Risks Related to the Operations of Our Business • We may not be able to fully execute our growth strategy due to various factors, such as unreceptive capital markets and/or excessive competition for acquisitions. • We may not have sufficient cash from operations after the establishment of cash reserves and payment of fees and expenses to pay the current level of quarterly distributions. • Our profitability and cash flow are dependent on our ability to increase or, at a minimum, maintain our current commodity (crude oil, natural gas, refined products, soda ash, NaHS and caustic soda) volumes, which often depend on actions and commitments by parties beyond our control. • Many of our crude oil and natural gas transportation customers are producers whose drilling activity levels and spending for transportation have historically been, and may continue to be, impacted by volatility in the commodity markets. • Fluctuations in prices for crude oil, natural gas, refined petroleum products, NaHS, soda ash and caustic soda could adversely affect our business.
These participation and protective features often include a governance structure that consists of a management committee or other governing body composed of members or member-designees, only some of which are appointed by us. In addition, many of our joint ventures are operated by our “partners” and have “stand-alone” credit agreements that limit their freedom to take certain actions.
These participation and protective features often include a governance structure that consists of a management committee or other governing body composed of members or member-designees, only some of which are appointed by us. In addition, certain of our joint ventures are operated by our “partners” or have “stand-alone” credit agreements that limit their freedom to take certain actions.
We currently own assets and do business in more than 20 states including Texas, Louisiana, Mississippi, Alabama, Florida, Arkansas and Oklahoma. Many of the states we currently do business in impose a personal income tax. It is our unitholders’ responsibility to file all applicable U.S. federal, foreign, state and local tax returns.
We currently own assets and do business in more than 20 states including Texas, Louisiana, Wyoming, Mississippi, Alabama, Florida, Arkansas and Oklahoma. Many of the states we currently do business in impose a personal income tax. It is our unitholders’ responsibility to file all applicable U.S. federal, foreign, state and local tax returns.
To the extent possible under the new rules, our general partner may elect to either cause us to pay the taxes (including any applicable penalties and interest) directly to the IRS or, if we are eligible, issue a revised information statement to each unitholder and former unitholder with respect to an audited and adjusted return.
To the extent possible under the rules, our general partner may elect to either cause us to pay the taxes (including any applicable penalties and interest) directly to the IRS or, if we are eligible, issue a revised information statement to each unitholder and former unitholder with respect to an audited and adjusted return.
Depending on the needs of each customer and the market in which it operates, we can provide a service for a fee (as in the case of our pipeline, terminal, marine vessel and railcar transportation operations), we can acquire the commodity from our customer and resell it to another party, or, in the case of soda ash, we can produce the commodity ourselves.
Depending on the needs of each customer and the market in which it operates, we can provide a service for a fee (as in the case of our pipeline, terminal, marine vessel transportation and railcar unloading operations), we can acquire the commodity from our customer and resell it to another party, or, in the case of soda ash, we can produce the commodity ourselves.
These incentives could accelerate the transition of the economy away from the use of fossil fuels towards lower or zero-carbon emissions alternatives, which could decrease demand for, and in turn the prices of, the oil and natural gas that we store, transport and sell and adversely impact our business.
These incentives and regulations could accelerate the transition of the economy away from the use of fossil fuels towards lower or zero-carbon emissions alternatives, which could decrease demand for, and in turn the prices of, the oil and natural gas that we store, transport and sell and adversely impact our business.
Risks Related to Our Partnership Structure • Individual members of the Davison family can exert significant influence over us and may have conflicts of interest with us and may be permitted to favor their interests to the detriment of our other unitholders. • Our Class B Common Units may be transferred to a third party without unitholder consent, which could affect our strategic direction. • The interruption of distributions to us from our subsidiaries and joint ventures could affect our ability to make payments on indebtedness or cash distributions to our unitholders. 33 Table of Contents • We do not have the same flexibility as other types of organizations to accumulate cash and equity to protect against illiquidity in the future.
Risks Related to Our Partnership Structure • Individual members of the Davison family can exert significant influence over us and may have conflicts of interest with us and may be permitted to favor their interests to the detriment of our other unitholders. • Our Class B Common Units may be transferred to a third party without unitholder consent, which could affect our strategic direction. • The interruption of distributions to us from our subsidiaries and joint ventures could affect our ability to make payments on indebtedness or cash distributions to our unitholders. 31 Table of Contents • We do not have the same flexibility as other types of organizations to accumulate cash and equity to protect against illiquidity in the future.
If we incur additional indebtedness in the future, it likely would be under our existing or replacement credit agreement or under arrangements that may have terms and conditions at least as or even more restrictive as those contained in our existing credit agreement and the indentures or purchase agreement governing our existing notes.
If we incur additional indebtedness in the future, it likely would be under our existing or a replacement credit agreement or under arrangements that may have terms and conditions at least as or even more restrictive as those contained in our existing credit agreement and the indentures or purchase agreement governing our existing notes.
The system is composed of over 12,000 miles of commercially navigable waterway, supported by over 240 locks and dams designed to provide flood control, maintain pool levels of water in certain areas of the country and facilitate navigation on the inland river system.
The system is composed of over 12,000 miles of commercially navigable waterway, supported by approximately 240 locks and dams designed to provide flood control, maintain pool levels of water in certain areas of the country and facilitate navigation on the inland river system.
In addition, our costs of any contest with the IRS will be borne indirectly by our unitholders and our general partner because these costs will reduce our cash available for distribution. 45 Table of Contents Pursuant to the Bipartisan Budget Act of 2015, for tax years beginning after December 31, 2017, if the IRS makes adjustments to our income tax returns, it (and some states) may assess and collect any taxes (including any applicable penalties and interest) resulting from such audit adjustments directly from us.
In addition, our costs of any contest with the IRS will be borne indirectly by our unitholders and our general partner because these costs will reduce our cash available for distribution. 44 Table of Contents Pursuant to the Bipartisan Budget Act of 2015, for tax years beginning after December 31, 2017, if the IRS makes adjustments to our income tax returns, it (and some states) may assess and collect any taxes (including any applicable penalties and interest) resulting from such audit adjustments directly from us.
Thus, crude oil and natural gas production in our market areas could decline, which could have a material negative impact on our revenues and prospects. Demand for our services is dependent on the demand for crude oil and natural gas.
Thus, crude oil and natural gas production in our market areas could decline, which could have a material negative impact on our revenues and prospects. Demand for our midstream services is dependent on the demand for crude oil and natural gas.
In addition, the actual amount of cash we will have available for distribution to our common unitholders will depend on other factors that include: the level of capital expenditures and costs associated with asset retirement obligations we make, including the cost of acquisitions (if any); our debt service requirements; fluctuations in our working capital; restrictions on distributions contained in our debt instruments or organizational documents governing our joint ventures and unrestricted subsidiaries; distributions we pay to our Class A Convertible Preferred unitholders; our ability to borrow under our senior secured credit facility to pay distributions; and the amount of cash reserves required in the conduct of our business.
In addition, the actual amount of cash we will have available for distribution to our common unitholders will depend on other factors that include: the level of capital expenditures and costs associated with asset retirement obligations we may incur, including the cost of acquisitions (if any); our debt service requirements; fluctuations in our working capital; restrictions on distributions contained in our debt instruments or organizational documents governing our joint ventures and unrestricted subsidiaries; distributions we pay to our Class A Convertible Preferred unitholders; our ability to borrow under our senior secured credit facility to pay distributions, and the amount of cash reserves required in the conduct of our business.
Additional vaccine mandates or health prerequisites may be announced in jurisdictions in which our businesses operate. Our implementation of any such requirements if and when they are deemed to be enforceable may result in attrition, including attrition of critically skilled labor, and difficulty securing future labor needs. These potential impacts, while uncertain, could adversely affect our operating results.
In addition, vaccine mandates or health prerequisites may be announced in jurisdictions in which our businesses operate. Our implementation of any such requirements if and when they are deemed to be enforceable may result in attrition, including attrition of critically skilled labor, and difficulty securing future labor needs. These potential impacts, while uncertain, could adversely affect our operating results.
Our general partner has a limited call right that may require unitholders to sell their units at an undesirable time or price.
Our general partner has a limited call right that may require common unitholders to sell their units at an undesirable time or price.
We are dependent on third parties for caustic soda for use in our sulfur removal process as well as volume to market to third parties. Should regulatory requirements or operational difficulties disrupt the manufacture of caustic soda by these producers, we could be affected.
We are dependent on third parties for caustic soda for use in our sulfur removal process as well as volumes to market to third parties. Should regulatory requirements or operational difficulties disrupt the manufacture of caustic soda by these producers, we could be affected.
We and our third-party service providers may therefore be vulnerable to security events that are beyond our control, and we may be the target of cyber-attacks, as well as physical attacks, which could result in information security breaches and significant disruption to our business.
We and our third-party service providers may therefore be vulnerable to security events that are beyond our control, and we may be the target of cyberattacks, as well as physical attacks, which could result in information security breaches and significant disruption to our business.
For example, certain members of the Davison family (including their affiliates) and management owned approximately 18 million, or approximately 15%, of our common units. From time to time, we also may have other unitholders that have large positions in our common units.
For example, certain members of the Davison family (including their affiliates) and management owned approximately 18 million, or approximately 14%, of our common units. From time to time, we also may have other unitholders that have large positions in our common units.
Moreover, acquisitions and business expansions involve numerous risks, including: difficulties in the assimilation of the operations, technologies, services and products of the acquired companies or business segments; inefficiencies and complexities that can arise because of unfamiliarity with new assets and the businesses associated with them, including unfamiliarity with their markets; and diversion of the attention of management and other personnel from day-to-day business to the development or acquisition of new businesses and other business opportunities. 34 Table of Contents We may not have sufficient cash from operations to pay the current level of quarterly distributions following the establishment of cash reserves and payment of fees and expenses.
Moreover, acquisitions and business expansions involve numerous risks, including: difficulties in the assimilation of the operations, technologies, services and products of the acquired companies or business segments; inefficiencies and complexities that can arise because of unfamiliarity with new assets and the businesses associated with them, including unfamiliarity with their markets; and diversion of the attention of management and other personnel from day-to-day business to the development or acquisition of new businesses and other business opportunities. 32 Table of Contents We may not have sufficient cash from operations after the establishment of cash reserves and payment of fees and expenses to pay the current level of quarterly distributions.
While some of our joint ventures and our unrestricted subsidiaries may generally be required to make cash distributions to us on a quarterly or other periodic basis, distributions from our joint ventures and our unrestricted subsidiaries are subject to the discretion of their respective management committee or similar governing body in one or more respects even if such distributions are generally required, such as with respect to the establishment of cash reserves.
While some of our joint ventures and our unrestricted subsidiaries may generally be required to make cash distributions to us on a 42 Table of Contents quarterly or other periodic basis, distributions from our joint ventures and our unrestricted subsidiaries are subject to the discretion of their respective management committee or similar governing body in one or more respects even if such distributions are generally required, such as with respect to the establishment of cash reserves.
The amount of cash we distribute to our common unitholders principally depends upon margins we generate from our businesses, which fluctuate from quarter to quarter based on, among other things: the volumes and prices at which we purchase and sell crude oil, natural gas, refined products and caustic soda; the volumes of sodium hydrosulfide, or NaHS, and soda ash that we receive for our sodium minerals and sulfur services and the prices at which we sell NaHS and soda ash; the demand for our services; the level of competition; the level of our operating costs; the effect of worldwide energy conservation measures; governmental regulations and taxes; the level of our general and administrative costs; and prevailing economic conditions.
The amount of cash we distribute to our common unitholders principally depends upon margins we generate from our businesses, which fluctuate from quarter to quarter based on, among other things: the volumes and prices at which we purchase and sell crude oil, natural gas, refined products and caustic soda; the volumes of sodium hydrosulfide, or NaHS, and soda ash that we produce and the prices at which we sell NaHS and soda ash; the demand for our services; the level of competition; the level of our operating costs; the effect of worldwide energy conservation measures; governmental regulations and taxes; the level of our general and administrative costs; and prevailing economic conditions.
Many of our crude oil and natural gas transportation customers are producers whose drilling activity levels and spending for transportation have historically been, and may continue to be, impacted by volatility in the commodity markets. 36 Table of Contents Many of our customers finance their drilling activities through cash flow from operations, the incurrence of debt or the issuance of equity.
Many of our crude oil and natural gas transportation customers are producers whose drilling activity levels and spending for transportation have historically been, and may continue to be, impacted by volatility in the commodity markets. Many of our customers finance their drilling activities through cash flow from operations, the incurrence of debt or the issuance of equity.
Any terrorist attack at our facilities, those of our customers and, in some cases, those of other pipelines, could have a material adverse effect on our business. In addition, a natural disaster, pandemic, epidemic, accident, terrorist attack or other interruption event may cause significant volatility in global financial markets, disruptions to commerce and reduced economic activity.
Any terrorist attack at our facilities, those of our customers and, in some cases, those of other pipelines, could have a material adverse effect on our business. 48 Table of Contents In addition, a natural disaster, pandemic, epidemic, accident, terrorist attack or other interruption event may cause significant volatility in global financial markets, disruptions to commerce and reduced economic activity.
Although we cannot predict the future condition of the capital markets, future turmoil in capital markets and the related higher cost of capital could have a 39 Table of Contents material adverse effect on our business, liquidity, financial condition and cash flows, particularly if our ability to borrow money from lenders or access the capital markets to finance our operations were to be limited.
Although we cannot predict the future condition of the capital markets, future turmoil in capital markets and the related higher cost of capital could have a material adverse effect on our business, liquidity, financial condition and cash flows, particularly if our ability to borrow money from lenders or access the capital markets to finance our operations were to be limited.
A reduction in demand for our services in the markets we serve could result in impairments of our assets and have a material adverse effect on our business, financial condition and results of operations. Demand for our soda ash is dependent on worldwide economic conditions and the use of everyday end products that utilize soda ash in their production process.
A reduction in demand for our services in the markets we serve could result in impairments of our assets and have a material adverse effect on our business, financial condition and results of operations. 33 Table of Contents Demand for our soda ash is dependent on worldwide economic conditions and the use of everyday end products that utilize soda ash in their production process.
Any event that interrupts the fees generated by our energy infrastructure assets, or which causes us to make significant expenditures not covered by insurance, could reduce our cash available for paying our interest obligations as well as unitholder distributions and, accordingly, adversely impact the market price of our securities.
Any event that interrupts the fees generated by our energy infrastructure assets, or which causes us to make significant expenditures not covered by insurance, could adversely affect our cash flows available for paying our interest obligations as well as unitholder distributions and, accordingly, adversely impact the market price of our securities.
The anticipated after-tax economic benefit of an investment in our units depends largely on our being treated as a partnership for federal income tax purposes. Section 7704 of the Internal Revenue Code provides that publicly traded 44 Table of Contents partnerships will, as a general rule, be taxed as corporations.
The anticipated after-tax economic benefit of an investment in our units depends largely on our being treated as a partnership for federal income tax purposes. Section 7704 of the Internal Revenue Code provides that publicly traded partnerships will, as a general rule, be taxed as corporations.
We have not requested a ruling from the IRS with respect to our treatment as a partnership for federal income tax purposes. The decision of the U.S. Court of Appeals for the Fifth Circuit in Tidewater Inc. v. U.S., 565 F.3d 299 (5th Cir.
We have not requested a ruling from the IRS with respect to our treatment as a partnership for federal income tax purposes. 43 Table of Contents The decision of the U.S. Court of Appeals for the Fifth Circuit in Tidewater Inc. v. U.S., 565 F.3d 299 (5th Cir.
Our actual construction, development and acquisition costs could exceed our forecast, and our cash flow from construction and development projects may not be immediate. Our forecast contemplates significant expenditures for the development, construction or other acquisition of on shore and offshore infrastructure as well as mining assets, including some construction and development projects with technological challenges.
Our actual construction, development and acquisition costs could exceed our forecast, and our cash flow from construction and development projects may not be immediate. Our forecast contemplates significant expenditures for the development, construction or other acquisition of onshore and offshore infrastructure as well as mining assets, including some construction and development projects with technological challenges.
In addition, states have imposed increasingly stringent requirements related to the venting or flaring of gas during oil and gas operations. In addition, in December 2015, the United States participated in the 21st Conference of the Parties (COP-21) of the United Nations Framework Convention on Climate Change in Paris, France.
In addition, states have imposed increasingly stringent requirements related to the venting or flaring of gas during oil and gas operations. 39 Table of Contents In addition, in December 2015, the United States participated in the 21st Conference of the Parties (COP-21) of the United Nations Framework Convention on Climate Change in Paris, France.
Risks Related to Liquidity and Financing Our indebtedness could adversely restrict our ability to operate, affect our financial condition, prevent us from complying with requirements under our debt instruments and prevent us from paying cash distributions to our unitholders. We have outstanding debt and the ability to incur more debt.
Risks Related to Liquidity and Financing Our indebtedness could adversely restrict our ability to operate, affect our financial condition, prevent us from complying with requirements under our debt instruments and prevent us from paying cash distributions to our unitholders. We have outstanding debt and the potential to incur additional indebtedness.
Moreover, the transferee of an interest in a partnership that is engaged in a U.S. trade 46 Table of Contents or business is generally required to withhold 10% of the “amount realized” by the transferor unless the transferor certifies that it is not a foreign person.
Moreover, the transferee of an interest in a partnership that is engaged in a U.S. trade or business is generally required to withhold 10% of the “amount realized” by the transferor unless the transferor certifies that it is not a foreign person.
The ultimate consequences of the Russian-Ukrainian military conflict, which may include further sanctions, embargoes, supply chain disruptions, regional instability and geopolitical shifts, may have adverse effects on global macroeconomic conditions, increase volatility in the price of and demand for oil and natural gas, increase exposure to cyberattacks, cause disruptions in global supply chains, increase foreign currency fluctuations, cause constraints or disruption in the capital markets and limit sources of liquidity.
The ultimate consequences of the war in Ukraine and the military conflict in Israel, which may include further sanctions, embargoes, supply chain disruptions, regional instability and geopolitical shifts, may have adverse effects on global macroeconomic conditions, increase volatility in the price of and demand for oil and natural gas, increase exposure to cyberattacks, cause disruptions in global supply chains, increase foreign currency fluctuations, cause constraints or disruption in the capital markets and limit sources of liquidity.
It is not possible at this time to predict with any accuracy the 41 Table of Contents structure or outcome of any future legislative or regulatory efforts to address such emissions or the eventual costs to us of compliance.
It is not possible at this time to predict with any accuracy the structure or outcome of any future legislative or regulatory efforts to address such emissions or the eventual costs to us of compliance.
Davison, Jr., each of whom is a director of our general partner, each own a significant portion of our common units, including our Class B Common Units, the holders of which elect our directors. Other members of the Davison family also own a significant portion of our common units.
James E. Davison and James E. Davison, Jr., each of whom is a director of our general partner, each own a significant portion of our common units, including our Class B Common Units, the holders of which elect our directors. Other members of the Davison family also own a significant portion of our common units.
The degree to which the COVID-19 pandemic or any other public health crisis adversely impacts our results will depend on future developments, which are highly uncertain and cannot be predicted.
The degree to which a pandemic or any other public health crisis adversely impacts our results will depend on future developments, which are highly uncertain and cannot be predicted.
If so, such unitholder 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. 47 Table of Contents Because a unitholder whose units are loaned to a “short seller” to cover a short sale of units may be considered as having disposed of the loaned units, such unitholder may no longer be treated for tax purposes as a partner with respect to those units during the period of the loan to the short seller and the unitholder may recognize gain or loss from such disposition.
Because a unitholder whose units are loaned to a “short seller” to cover a short sale of units may be considered as having disposed of the loaned units, such unitholder may no longer be treated for tax purposes as a partner with respect to those units during the period of the loan to the short seller and the unitholder may recognize gain or loss from such disposition.
Over the last two years, prices for crude oil ranged from a high of over $120 per barrel to a low of less than $20 per barrel, and such extreme volatility may continue going forward.
Over the last three years, prices for crude oil ranged from a high of over $120 per barrel to a low of less than $50 per barrel, and such extreme volatility may continue going forward.
We earned approximately 54% of our marine transportation revenues from spot contracts, where competition is high and rates are typically volatile and subject to short-term market fluctuations, and where we could bear the risk of vessel downtime due to weather and navigational delays.
We earned approximately 30% of our marine transp ortation revenues from spot contracts, where competition is high and rates are typically volatile and subject to short-term market fluctuations, and where we could bear the risk of vessel downtime due to weather and navigational delays.
General Risks • We are exposed to the credit risk of our customers in the ordinary course of our business activities. • A natural disaster, pandemic, epidemic, accident, terrorist attack or other interruption event could result in an economic slowdown, severe personal injury, property damage and/or environmental damage, which could curtail our operations or otherwise adversely affect our assets and cash flow. • We cannot predict the impact of the ongoing military conflict between Russia and Ukraine and the related humanitarian crisis on the global economy, energy markets, geopolitical stability and our business. • Our business could be negatively impacted by security threats, including cybersecurity threats, and related disruptions. • Compliance with and changes in cyber security requirements have a cost impact on our business. • Our significant unitholders may sell units or other limited partner interests in the trading market, which could reduce the market price of our common units. • We may issue additional common units without unitholders’ approval, which would dilute their ownership interests.
General Risks • We are exposed to the credit risk of our customers in the ordinary course of our business activities. • A natural disaster, pandemic, epidemic, accident, terrorist attack or other interruption event could result in an economic slowdown, severe personal injury, property damage and/or environmental damage, which could curtail our operations or otherwise adversely affect our assets and cash flow. • We cannot predict the impact of international military conflicts and the related humanitarian crisis on the global economy, energy markets, geopolitical stability and our business. • Our business could be negatively impacted by security threats, including cybersecurity threats, and related disruptions. • Our significant unitholders may sell units or other limited partner interests in the trading market, which could reduce the market price of our common units. • We may issue additional common units without unitholders’ approval, which would dilute their ownership interests.
As a result, for years beginning after December 31, 2017, it may not be possible for tax exempt entities to utilize losses from an investment in our partnership to offset unrelated business taxable income from another unrelated trade or business and vice versa. Tax-exempt entities should consult a tax advisor before investing in our units.
As a result, for years beginning after December 31, 2017, it may not be possible for tax exempt entities to utilize losses from an investment in our partnership to offset unrelated business taxable income from another unrelated trade or business and vice versa.
During the year ended December 31, 2022, our marine transportation segmen t received approximately 46% of its revenue from time charters and other fixed contracts, which help to insulate us from revenue fluctuations caused by weather, navigational delays and short-term market declines.
During the year ended December 31, 2023, our marine transportation segmen t receiv ed approximately 70% of its revenue from time charters and other fixed contracts, which help to insulate us from revenue fluctuations caused by weather, navigational delays and short-term market declines.
For example, the IRA includes billions of dollars in incentives for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles, investments in advanced biofuels and supporting infrastructure and carbon capture and sequestration.
For example, the IRA and the Investment in Infrastructure and Jobs Act include billions of dollars in incentives for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles, investments in advanced biofuels and supporting infrastructure and carbon capture and sequestration.
The resulting macroeconomic conditions could adversely affect our cash flows, as well as the market price of our securities. We cannot predict the impact of the ongoing military conflict between Russia and Ukraine and the related humanitarian crisis on the global economy, energy markets, geopolitical stability and our business.
The resulting macroeconomic conditions could adversely affect our cash flows, as well as the market price of our securities. We cannot predict the impact of the ongoing international military conflicts and any related humanitarian crisis on the global economy, energy markets, geopolitical stability and our business.
We regularly consider and enter into discussions regarding additional potential joint ventures, stand-alone projects and other transactions that we believe will present opportunities to realize synergies, expand our role in the infrastructure and mining businesses, and increase our market position and, ultimately, increase distributions to unitholders.
We regularly consider and enter into discussions regarding additional potential joint ventures, stand-alone projects and other transactions that we believe will present opportunities to realize synergies, increase our market position and, ultimately, increase distributions to our unitholders.
For example, they could increase our vulnerability to general adverse economic and industry conditions, limit our ability to make distributions; to fund future working capital, capital expenditures and other general partnership requirements; to engage in future acquisitions, construction or development activities; to access capital markets (debt and equity); or to otherwise fully realize the value of our assets and opportunities because of the need to dedicate a substantial portion of our cash flows from operations to payments on our indebtedness or to comply with any restrictive terms of our indebtedness; limit our flexibility in planning for, or reacting to, changes in our businesses and the industries in which we operate; and place us at a competitive disadvantage as compared to our competitors that have less debt.
For example, they could increase our vulnerability to general adverse economic and industry conditions, limit our ability to make distributions; to fund future working capital, capital expenditures and other general partnership requirements, to engage in future acquisitions, construction or development activities, to access capital markets (debt and equity), or to otherwise fully realize the value of our assets and opportunities, limit our flexibility in planning for, or reacting to, changes in our businesses and the industries in which we operate, and place us at a competitive disadvantage as compared to our competitors that have less debt.
We may be required to expend significant additional resources to respond to cyberattacks, to continue to modify or enhance our protective measures, or to assess, investigate and remediate any critical infrastructure security vulnerabilities.
As cyberattacks continue to evolve, we may be required to expend significant additional resources to respond to cyberattacks, to continue to modify or enhance our protective measures or to investigate and remediate any information systems and related infrastructure security vulnerabilities.
If we are unable to attract and retain a sufficient number of elite skilled professionals, our ability to pursue our business objectives may be adversely affected thus reducing our revenue, increasing our cost, or damaging our reputation. 50 Table of Contents Item 1B. Unresolved Staff Comments None.
If we are unable to attract and retain a sufficient number of elite skilled professionals, our ability to pursue our business objectives may be adversely affected thus reducing our revenue, increasing our cost, or damaging our reputation.
If we were to have insufficient gross income and gain to cause the capital account balance to equal the liquidation value of a preferred unit, then the amount that a Class A Convertible Preferred unitholder would receive upon liquidation would be less than the liquidation value of the Class A Convertible Preferred Units, even though there may be cash available for distribution to the holders of common units or any other junior securities with respect to their capital accounts.
If we were to have insufficient gross income and gain to cause the capital account balance to equal the liquidation value of a preferred unit, then the amount that a Class A Convertible Preferred unitholder would receive upon liquidation would be less than the liquidation value of the Class A Convertible Preferred Units, even though there may be cash available for distribution to the holders of common units or any other junior securities with respect to their capital accounts. 47 Table of Contents General Risks We are exposed to the credit risk of our customers in the ordinary course of our business activities.
Risks Related to Legal and Regulatory Compliance • Our operations are subject to federal, state and local environmental protection and safety laws and regulations. • Climate change legislation and regulatory initiatives may decrease demand for the products we store, transport and sell and increase our operating costs. • Changes in environmental laws could increase costs and harm our business, financial condition and results of operations.
Risks Related to Legal and Regulatory Compliance • Our operations are subject to federal, state and local environmental protection and safety laws and regulations. • Climate change legislation and regulatory initiatives may decrease demand for the products we store, transport and sell and increase our operating costs. • Changes in environmental laws could increase costs and harm our business, financial condition and results of operations. • Compliance with and changes in cybersecurity requirements have a cost impact on our business. • We are subject to regulatory and economic risks associated with doing business outside of the United States.
Fluctuations in prices for crude oil, refined petroleum products, NaHS, soda ash and caustic soda could adversely affect our business. Because we purchase (or otherwise acquire or, in the case of soda ash, produce) and sell crude oil, refined petroleum products, NaHS, soda ash and caustic soda we are exposed to some direct commodity price risks.
Because we purchase (or otherwise acquire or, in the case of soda ash, produce) and sell crude oil, natural gas, refined petroleum products, NaHS, soda ash and caustic soda we are exposed to some direct commodity price risks.
The Inflation Reduction Act could accelerate the transition to a low carbon economy and impose new costs on our operations. On August 16, 2022, President Biden signed into law the Inflation Reduction Act (“IRA”) which, among other provisions, imposes a fee on methane emissions from sources required to report their greenhouse gas emissions to the U.S.
The IRA could accelerate the transition to a low carbon economy away from oil and gas. On August 16, 2022, President Biden signed into law the IRA which, among other provisions, imposes a fee on methane emissions from sources required to report their greenhouse gas emissions to the U.S.
Our operations are subject to stringent federal, state and local environmental protection and safety laws and regulations.
Risks Related to Legal and Regulatory Compliance Our operations are subject to federal, state and local environmental protection and safety laws and regulations. Our operations are subject to stringent federal, state and local environmental protection and safety laws and regulations.
We believe that continued efforts will be made to modify or repeal the Jones Act. If these efforts are successful, foreign-flag vessels could be permitted to trade in the U.S. coastwise trade and significantly increase competition with our fleet, which could have an adverse effect on our business.
If these efforts are successful, foreign-flag vessels could be permitted to trade in the U.S. coastwise trade and significantly increase competition with our fleet, which could have an adverse effect on our business.
In November 2021, in connection with the 26th Conference of the Parties (COP-26) in Glasgow, Scotland, the United States and other world leaders made further commitments to reduce greenhouse gas emissions, including reducing global methane emissions by at least 30% by 2030.
In November 2021, in connection with the 26th Conference of the Parties (COP-26) in Glasgow, Scotland, the United States and other world leaders made further commitments to reduce greenhouse gas emissions, including reducing global methane emissions by at least 30% by 2030 from 2020 levels. More than 150 countries have now signed on to this pledge.
Our ability to pay distributions each quarter depends primarily on our cash flow, including cash flow from financial reserves and working capital borrowings, and our cash requirements, so it is not solely a function of profitability, which will be affected by non-cash items.
Our ability to pay distributions each quarter depends primarily on our cash flow, including cash flow from operations and our cash requirements, which includes capital expenditures amongst other items, and is not solely a function of profitability, which will be affected by non-cash items.
Soda ash is a basic building block for a number of ubiquitous products, including flat glass, container glass, dry detergent, solar panels, lithium batteries and a variety of chemicals and other industrial products.
Soda ash is a basic building block for a number of ubiquitous products, including flat glass, container glass, dry detergent, solar panels, lithium batteries and a variety of chemicals and other industrial products. Demand could be adversely affected by economic recessions and many other factors.
Adverse price changes put downward pressure on drilling budgets for crude oil and natural gas producers, which have resulted, and could continue to result, in lower volumes than we otherwise would have seen being transported on our pipeline and transportation systems, which could have a material negative impact on our revenues and prospects.
Adverse price changes put downward pressure on drilling budgets for crude oil and natural gas producers, which have resulted, and could continue to result, in lower volumes than we otherwise would have seen being transported on our pipeline and transportation systems, which could have a material negative impact on our revenues and prospects. 34 Table of Contents Fluctuations in prices for crude oil, natural gas, refined petroleum products, NaHS, soda ash and caustic soda could adversely affect our business.
Demand for our services could be adversely affected by many factors, including lower refinery utilization rates, U.S. refineries accessing more “sweet” (instead of “sour”) crude and the development of alternative sulfur removal processes that might be more economically beneficial to refiners.
Our ability to access NaHS depends primarily on the demand for our proprietary sulfur removal process. Demand for our sulfur services could be adversely affected by many factors, including lower refinery utilization rates, U.S. refineries accessing more “sweet” (instead of “sour”) crude and the development of alternative sulfur removal processes.
Similar interruptions could result from damage to production or other facilities that supply our facilities or other stoppages arising from factors beyond our control. These interruptions might involve significant damage to people, property or the environment, and repairs or recovery might take from a week or less for a minor incident to six months or more for a major interruption.
Similar interruptions could result from damage to production or other facilities that supply our facilities or other stoppages arising from factors beyond our control. These interruptions might involve significant damage to people, property or the environment, and repairs or recovery might take several months or even longer.
As of December 31, 2022, obligations under our senior secured credit facility bear interest at the Secured Overnight Financing Rate (“SOFR”), which recently replaced the historical LIBOR benchmark under our credit agreement, or an alternate base rate at our option, plus the applicable margin in accordance with our credit agreement. We have not historically hedged our interest rates.
Obligations under our senior secured credit facility bear interest at a rate based on the Secured Overnight Financing Rate (“SOFR”) or an alternate base rate at our option, plus the applicable margin in accordance with our credit agreement. We have not historically hedged our interest rates.
We utilize ANSAC as our exclusive export vehicle for sales to customers in all countries excluding Canada, South Africa, members of the European Community and European Free Trade Area and the South African Customs Union.
We utilize ANSAC as our exclusive export vehicle for soda ash sales to customers in all countries excluding Canada, South Africa, members of the European Community and European Free Trade Area and the South African Customs Union. As a result, we are exposed to ANSAC’s customer relationships and the credit and other terms ANSAC extended to its customers.
Consequently, our ability to fund our commitments (including payments on our indebtedness) and to make cash distributions depends upon the earnings and cash flow of our subsidiaries and joint ventures and the distribution of that cash to us.
We are a holding company. As such, our primary assets are the equity interests in our subsidiaries and joint ventures. Consequently, our ability to fund our commitments (including payments on our indebtedness) and to make cash distributions depends upon the earnings and cash flow of our subsidiaries and joint ventures and the distribution of that cash to us.
In addition, from time to time, some of our joint ventures or unrestricted subsidiaries may have substantial indebtedness, which will include affirmative and negative covenants and other provisions that limit their freedom to conduct certain operations, events of default, prepayment and other customary terms.
In addition, from time to time, some of our joint ventures or unrestricted subsidiaries may have substantial indebtedness, which will include affirmative and negative covenants and other provisions that limit their ability to conduct certain operations, events of default, prepayment and other customary terms. 37 Table of Contents We may not be able to access adequate capital (debt and/or equity) on economically viable terms or any terms.
As a result, the success and timing of development activities of our joint ventures operated by others and the economic results derived therefrom depends upon a number of factors outside our control, including the operator’s timing and amount of capital expenditures, expertise and financial resources, and the inclusion of other participants .
As a result, the success and timing of development activities of our joint ventures operated by others and the economic results derived therefrom depends upon a number of factors outside our control, including the operator’s timing and amount of capital expenditures, expertise and financial resources, and the inclusion of other participants . 35 Table of Contents In addition, joint venture participants may have obligations that are important to the success of the joint venture, such as the obligation to pay their share of capital and other costs of the joint venture.
Risks Related to Liquidity and Financing • Our indebtedness could adversely restrict our ability to operate, affect our financial condition, prevent us from complying with requirements under our debt instruments and prevent us from paying cash distributions to our unitholders. • We may not be able to access adequate capital (debt and/or equity) on economically viable terms, or any terms. • The Inflation Reduction Act could accelerate the transition to a low carbon economy and impose new costs on our operations. • Continuing or worsening inflationary pressures and associated changes in monetary policy have resulted in and may result in additional increases to our operating costs, which in turn have caused and may continue to cause our capital expenditures and operating costs to rise.
Risks Related to Liquidity and Financing • Our indebtedness could adversely restrict our ability to operate, affect our financial condition, prevent us from complying with requirements under our debt instruments and prevent us from paying cash distributions to our unitholders. • We may not be able to access adequate capital (debt and/or equity) on economically viable terms, or any terms. • The IRA could accelerate the transition to a low carbon economy away from oil and gas. • Inflationary pressures and associated changes in monetary policy have increased and may further increase our operating costs, which in turn have caused and may continue to cause our capital expenditures and operating costs to rise. • Non-traditional investment criteria used by many investors may diminish investor interest in us and reduce the value of our common units and our access to capital.
Non-U.S. unitholders are generally taxed and subject to income tax filing requirements by the United States on income effectively connected with a U.S. trade or business (“effectively connected income”). Income allocated to our unitholders and any gain from the sale of our units will generally be considered to be “effectively connected” with a U.S. trade or business.
Income allocated to our unitholders and any gain from the sale of our units will generally be considered to be “effectively connected” with a U.S. trade or business.
As of December 31, 2022, we had approximately $205.4 million outstanding under our senior secured credit facility, $2.9 billion of senior unsecured notes and $425.0 million of Alkali senior secured notes.
As of December 31, 2023, we had approximately $298.3 million outstanding under our senior secured credit facility, $3,099.9 million aggregate principal amount of senior unsecured notes outstanding and $425.0 million aggregate principal amount of Alkali senior secured notes outstanding.
The interest rates on our senior secured credit facility ($205.4 million outstanding at December 31, 2022) and the debt at certain of our unrestricted subsidiaries is variable.
We have exposure to movements in interest rates. The interest rates on our senior secured credit facility ($298.3 million outstanding at December 31, 2023) and the debt at certain of our unrestricted subsidiaries is variable.
Risks Related to the Operations of Our Business We may not be able to fully execute our growth strategy due to various factors, such as unreceptive capital markets and/or excessive competition for acquisitions.
Risks Related to the Operations of Our Business We may not be able to fully execute our growth strategy due to various factors, such as unreceptive capital markets and/or excessive competition for acquisitions. Our strategy contemplates growth through the development and acquisition of a wide range of midstream and other infrastructure and mining assets while maintaining a strong balance sheet.
Our significant unitholders may sell units or other limited partner interests in the trading market, which could reduce the market price of our common units. As of December 31, 2022, we have a number of significant unitholders.
We may also be subject to regulatory investigations or litigation relating from cybersecurity issues. 49 Table of Contents Our significant unitholders may sell units or other limited partner interests in the trading market, which could reduce the market price of our common units. As of December 31, 2023, we have a number of significant unitholders.
If at any time we, our general partner and our and its subsidiaries own 80% or more of the Class A or Class B units, our general partner will have the right, but not the obligation, which it may assign to us or our subsidiaries, to acquire all, but not less than all, of the Class A or Class B units, respectively, held by unaffiliated persons at a price not less than the greater of (i) their then-current market price and (ii) the highest price paid by our general partners, us or our respective subsidiaries for 43 Table of Contents such class of units in the 90 days preceding the purchase notice.
If at any time our general partner, the partnership, and our subsidiaries collectively own 80% or more of the Class A Common Units or Class B Common Units, our general partner will have the right, but not the obligation, which it may assign to us, to acquire all, but not less than all, of the remaining common units of such class held by persons other than our general partner, the partnership or our subsidiaries at a price not less than their then-current market price.
The imposition of this fee and other provisions contained within the IRA could accelerate the transition away from oil and gas, which could adversely affect our business and results of operations. Fluctuations in interest rates could adversely affect our business. We have exposure to movements in interest rates.
The imposition of this fee and other provisions contained within the IRA could accelerate the transition away from oil and gas, which could decrease demand for, and in turn the prices of, the oil and natural gas that we store, transport and sell and adversely impact our business. Fluctuations in interest rates could adversely affect our business.
Failure of the federal government to adequately fund infrastructure maintenance and improvements in the future would have a negative impact on our ability to deliver products for our marine transportation customers on a timely basis. 38 Table of Contents Failure to obtain or renew surety bonds on acceptable terms could affect our ability to secure reclamation obligations and, therefore, our ability to conduct our mining operations.
Failure of the federal government to adequately fund infrastructure maintenance and improvements in the future would have a negative impact on our ability to deliver products for our marine transportation customers on a timely basis.
If these third parties do not satisfy their obligations under these arrangements, our business may be adversely affected.
The performance and ability of third parties to satisfy their obligations under joint venture arrangements is outside our control. If these third parties do not satisfy their obligations under these arrangements, our business may be adversely affected.
Since certain transactions can involve very large payments, the risk of nonpayment and nonperformance by customers, industry participants and others is an important consideration in our business.
When we (or our joint ventures) market our products or services, we (or our joint ventures) must determine the amount, if any, of the line of credit to extend to our customers. Since certain transactions can involve very large payments, the risk of nonpayment and nonperformance by customers, industry participants and others is an important consideration in our business.
We cannot predict the extent of the conflict’s effect on our business and results of operations, as well as on the global economy and energy and soda ash markets.
We cannot predict the extent of these conflicts’ effect on our business and results of operations, as well as on the global economy and energy and soda ash markets. Our business could be negatively impacted by security threats, including cybersecurity threats, and related disruptions.
Thus, without the concurrence of the other joint venture participants and/or the lenders of our joint venture participants, we cannot cause our joint ventures to take or not to take certain actions, even though those actions may be in the best interest of the joint ventures or us. 37 Table of Contents The insolvency of an operator of our joint ventures, the failure of an operator of our joint ventures to adequately perform operations or an operator’s breach of applicable agreements could reduce our revenue and cash flow and result in our liability to governmental authorities for compliance with environmental, safety and other regulatory requirements and to the operator’s suppliers and vendors.
The insolvency of an operator of our joint ventures, the failure of an operator of our joint ventures to adequately perform operations or an operator’s breach of applicable agreements could reduce our earnings and cash flow and result in our liability to governmental authorities for compliance with environmental, safety and other regulatory requirements and to the operator’s suppliers and vendors.
Any waiver of the coastwise laws, whether in response to natural disasters or otherwise, could result in increased competition from foreign product carrier and barge operators, which could reduce our revenues and cash available for distribution. 42 Table of Contents Foreign-flag vessels generally have lower construction costs and generally operate at significantly lower costs than we do in U.S. markets, which would likely result in reduced charter rates.
Any waiver of the coastwise laws, whether in response to natural disasters or otherwise, could result in increased competition from foreign product carrier and barge operators, which could reduce our revenues and cash available for distribution.

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Item 2. Properties

Properties — owned and leased real estate

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Ore is extracted primarily by our single longwall mining machine from an extensive network of parallel drifts and connecting cross-cuts, known as room-and-pillar mining, and from longwall mining. Longwall miners shear off successive panels of ore which drops onto a conveyor belt for delivery to the vertical hoisting shafts.
Ore is extracted primarily by our single longwall mining machine from an extensive network of parallel drifts and connecting cross-cuts, known as room-and-pillar mining. Longwall miners shear off successive panels of ore which drops onto a conveyor belt for delivery to the vertical hoisting shafts.
Area by lessor (acres) Contiguous leases Non-contiguous leases Location Granger Westvaco Granger Remaining Federal 4,236 19,699 — 320 State 1,280 6,403 640 13,280 Sweetwater 8,320 27,379 4,480 — Total Area 13,836 53,481 5,120 13,600 Our trona resources and mining operations are held under leases covering 86,037 acres over portions of 23 townships, primarily in two contiguous units informally known as the “Westvaco” and “Granger” blocks.
Area by lessor (acres) Contiguous leases Non-contiguous leases Lessor Granger Westvaco Granger Remaining Federal 4,236 19,699 — 320 State 1,280 6,403 640 13,280 Sweetwater 8,320 27,379 4,480 — Total Area 13,836 53,481 5,120 13,600 Our trona resources and mining operations are held under leases covering 86,037 acres over portions of 23 townships, primarily in two contiguous units informally known as the “Westvaco” and “Granger” blocks.
“Business—Recent Developments and Status of Certain Growth Initiatives—Granger Production Facility Expansion” for more information. Our senior secured credit facility is guaranteed by substantially all of our restricted subsidiaries and is secured by liens on a substantial portion of our assets, including our trona leases. Refer to further discussion over our senior secured credit facility in Item 7.
“Business—Recent Developments and Status of Certain Growth Initiatives—Granger Production Facility Expansion” for more information. Our senior secured credit facility is guaranteed by substantially all of our restricted subsidiaries and is secured by liens on a substantial portion of our assets, including our trona leases. Refer to further discussion of our senior secured credit facility in Item 7.
A new TRS was not filed as a part of this Annual Report on Form 10-K because (i) there was not a material change in the mineral reserves or mineral resources from such previously filed TRS and (ii) all material assumptions and information pertaining to the disclosure of our mineral resources and mineral reserves required by paragraphs (d), (e), and (f) of subpart 1302 of Regulation S-K, including material assumptions relating to all modifying factors, price estimates, and scientific and technical information (e.g., sampling data, estimation assumptions and methods), were current as of December 31, 2022, as confirmed by Stantec.
A new TRS was not filed as a part of this Annual Report on Form 10-K because (i) there was not a material change in the mineral reserves or mineral resources from such previously filed TRS and (ii) all material assumptions and information pertaining to the disclosure of our mineral resources and mineral reserves required by paragraphs (d), (e) and (f) of subpart 1302 of Regulation S-K, including material assumptions relating to all modifying factors, price estimates and scientific and technical information (e.g., sampling data, estimation assumptions and methods), were current as of December 31, 2023, as confirmed by Stantec.
Additionally, our management and technical staff includes senior personnel who have remained closely involved with each of our active mining and mineral processing operations. 63 Table of Contents In preparing our reserve estimates for our Alkali operations at Green River, Wyoming, we follow accepted mining industry practice and are guided by our long-term experience in extraction of trona ore from underground mining and sodium carbonate from brine (solution) mining in the district.
Additionally, our management and technical staff includes senior personnel who have remained closely involved with each of our active mining and mineral processing operations. 64 Table of Contents In preparing our reserve estimates for our Alkali operations at Green River, Wyoming, we follow accepted mining industry practice and are guided by our long-term experience in extraction of trona ore from underground mining and sodium carbonate from brine (solution) mining in the district.
The steps to produce soda ash are similar to the dry mined processes, except the crushing and dissolving steps are eliminated because the trona is already in a water solution as it leaves the mine. 58 Table of Contents Figure 2.4 Westvaco Surface Production Facilities The Westvaco site also has a facility producing food, feed, and pharmaceutical grade sodium bicarbonate from a Sesqui plant intermediate product.
The steps to produce soda ash are similar to the dry mined processes, except the crushing and dissolving steps are eliminated because the trona is already in a water solution as it leaves the mine. 59 Table of Contents Figure 2.4 Westvaco Surface Production Facilities The Westvaco site also has a facility producing food, feed, and pharmaceutical grade sodium bicarbonate from a Sesqui plant intermediate product.
Sustaining cap-ex in the future is assumed similar to recent history and short term projections, with inflation similar to product pricing escalation. • All leases remain valid throughout the time required to mine the reserves • All permits remain valid throughout the life of the operation, and no new laws are enacted that require any extraordinary compliance which would significantly impact production or cost. • New permits and approved mine plans will be obtained for mining reserves that lie within existing leases, but outside of our current mining permit areas. • Tailings storage capacity will be developed as necessary over the life of the mine and processing plants. • Because our Alkali Business is structured as a pass-through entity for income tax purposes, there is no provision for income taxes in the cash flow analysis.
Sustaining capital expenditures in the future is assumed similar to recent history and short-term projections, with inflation similar to product pricing escalation. • All leases remain valid throughout the time required to mine the reserves • All permits remain valid throughout the life of the operation, and no new laws are enacted that require any extraordinary compliance which would significantly impact production or cost. • New permits and approved mine plans will be obtained for mining reserves that lie within existing leases, but outside of our current mining permit areas. • Tailings storage capacity will be developed as necessary over the life of the mine and processing plants. • Because our Alkali Business is structured as a pass-through entity for income tax purposes, there is no provision for income taxes in the cash flow analysis.
Fifty percent caustic is produced on the Westvaco site for commercial sale from a Mono plant intermediate product. The Westvaco site has successfully mined and processed trona ore at a profit for over 70 years. In this time, capital has been expended as appropriate to sustain the operation at the current production and operating cost level.
Fifty percent caustic is produced on the Westvaco site for commercial sale from a Mono plant intermediate product. The Westvaco site has successfully mined and processed trona ore at a profit for over 75 years. In this time, capital has been expended as appropriate to sustain the operation at the current production and operating cost level.
Due to differences in geology between these two mine areas, the mineral leases and, ultimately, the trona resources and reserve estimates have been separated into Westvaco contiguous leases, Granger contiguous leases and Granger non-contiguous leases. The table and figures below are summaries of our acreage under each mineral lease type as of December 31, 2022.
Due to differences in geology between these two mine areas, the mineral leases and, ultimately, the trona resources and reserve estimates have been separated into Westvaco contiguous leases, Granger contiguous leases and Granger non-contiguous leases. The table and figures below are summaries of our acreage under each mineral lease type as of December 31, 2023.
The ore is 57 Table of Contents conveyed underground to two hoisting operations where it travels about 1,600 feet vertically to the surface and is either taken directly into our processing facilities or stored on two outdoor stockpiles for future consumption. • Secondary Recovery Brine Mining.
The ore is conveyed underground to two 58 Table of Contents hoisting operations where it travels about 1,600 feet vertically to the surface and is either taken directly into our processing facilities or stored on two outdoor stockpiles for future consumption. • Secondary Recovery Brine Mining.
See “Commitments and Off-Balance Sheet Arrangements” in Management’s Discussion and Analysis of Financial Condition and Results of Operations, and Note 4 to our Consolidated Financial Statements in Item 8 for details on our right of use assets and related lease liabilities. Such information is incorporated herein by reference.
See “Commitments and Off-Balance Sheet Arrangements” in Management’s Discussion and Analysis of Financial Condition and Results of Operations, and Note 5 to our Consolidated Financial Statements in Item 8 for details on our right of use assets and related lease liabilities. Such information is incorporated herein by reference.
“Liquidity and Capital Resources.” Our Alkali senior secured notes are secured by GA ORRI’s fifty-year 10% limited term overriding royalty interest in substantially all of the Alkali Business’ trona mineral leases. See Item 1. “Recent Developments and Status of Certain Growth Initiatives—Alkai Senior Secured Notes Issuance and Related Transactions” for more information. 54 Table of Contents Figure 2.3.
“Liquidity and Capital Resources.” Our Alkali senior secured notes are secured by GA ORRI’s fifty-year 10% limited term overriding royalty interest in substantially all of the Alkali Business’ trona mineral leases. See Item 1. “Recent Developments and Status of Certain Growth Initiatives—Alkali Senior Secured Notes Issuance and Related Transactions” for more information. 55 Table of Contents Figure 2.3.
The steps to produce soda ash are similar to the dry mined processes, except the crushing and dissolving steps are eliminated because the trona is already in a water solution as it leaves the mine. 59 Table of Contents Figure 2.5.
The steps to produce soda ash are similar to the dry mined processes, except the crushing and dissolving steps are eliminated because the trona is already in a water solution as it leaves the mine. 60 Table of Contents Figure 2.5.
Lease Tenure 55 Table of Contents The table below shows certain key information for leases in the Westvaco contiguous leases, Granger contiguous leases, and Granger non-contiguous leases that are included in the resource and reserve estimates, including lessor, lease term, size, royalty information and expiration date.
Lease Tenure 56 Table of Contents The table below shows certain key information for leases in the Westvaco contiguous leases, Granger contiguous leases, and Granger non-contiguous leases that are included in the resource and reserve estimates, including lessor, lease term, size, royalty information and expiration date.
In addition to trona, the evaporite sodium mineral assemblage includes variable levels of other sodium 53 Table of Contents carbonate minerals as well as halite (NaCl). At least 25 beds of natural trona in the Wilkins Peak Member of the Eocene Green River Formation exceed at least three feet in thickness and are estimated by the U.S.
In addition to trona, the evaporite sodium mineral assemblage includes variable levels of other sodium carbonate minerals as well as halite (NaCl). At least 25 beds of natural trona in the Wilkins Peak Member of the Eocene Green River Formation exceed at least three feet in thickness and are estimated by the U.S.
Map of Mining Areas The Green River trona beds are collectively the largest known deposit of trona and the undisputed largest source of raw material feed for the production of natural soda ash in the world. The trona deposits are the result of very unusual, geological circumstances.
Map of Mining Areas 54 Table of Contents The Green River trona beds are collectively the largest known deposit of trona and the undisputed largest source of raw material feed for the production of natural soda ash in the world. The trona deposits are the result of very unusual, geological circumstances.
The table below shows annual production from our trona property and its four plants for the fiscal years ended December 31, 2022, 2021 and 2020.
The table below shows annual production from our trona property and its four plants for the fiscal years ended December 31, 2023, 2022 and 2021.
Infrastructure on the Westvaco site is very well developed as the facilities have been in operation for nearly seventy years. The infrastructure consists of sufficient truck and rail loadout facilities, electrical generation and transmission facilities, tailings facilities, product storage facilities, process facilities, natural gas pipelines and distribution facilities and water pipelines, treatment and distribution facilities.
Infrastructure on the Westvaco site is very well developed as the facilities have been in operation for over 75 years. The infrastructure consists of sufficient truck and rail loadout facilities, electrical generation and transmission facilities, tailings facilities, product storage facilities, process facilities, natural gas pipelines and distribution facilities and water pipelines, treatment and distribution facilities.
The total book value of the Westvaco and Granger sites as of December 31, 2022 and December 31, 2021 was approximately $1,528 million and $1,439 million, respectively. In many cases, market demand drives annual production so that actual production may be less than plant capacities.
The total book value of the Westvaco and Granger sites as of December 31, 2023 and December 31, 2022 was approximately $1,668 million and $1,528 million, respectively. In many cases, market demand drives annual production so that actual production may be less than plant capacities.
Approximately 60% of the world’s natural soda ash is produced from trona extracted from underground mines and brine (solution) mining in the Green River Basin of southwestern Wyoming. Our trona mining and processing facilities are located in southwestern Wyoming approximately 18 miles west of the city of Green River, Wyoming.
Approximately 50% of the world’s natural soda ash capacity is from trona extracted from underground mines and brine (solution) mining in the Green River Basin of southwestern Wyoming. Our trona mining and processing facilities are located in southwestern Wyoming approximately 18 miles west of the city of Green River, Wyoming.
This includes air, land, surface and groundwater, drinking water, wildlife, and waste. Approved reclamation plans are in place along with surety in the amounts of approximately $54 million for the Westvaco site and $28 million for the Granger site.
This includes air, land, surface and groundwater, drinking water, wildlife, and waste. Approved reclamation plans are in place along with surety in the amounts of approximately $55 million for the Westvaco site and $33 million for the Granger site.
No elements or compounds from within the beds were identified as having a material impact on the ability to extract trona from the beds via mechanical or brine (solution) mining methods. 61 Table of Contents December 31, 2022 December 31, 2021 Reserve Area/Type Resource Category Million short tons (dry weight) (1) Grade (% Trona) (5) Million short tons (dry weight) (1) Grade (% Trona) (5) Westvaco dry extraction Proven (2) 252 88 257 88 Probable (2) 179 88 179 88 Total Reserves (3) 431 88 436 88 Westvaco solution mining Proven (2) — — Probable (2) 369 88 371 88 Total Reserves (4) 369 88 371 88 Granger solution mining Proven (2) — — Probable (2) 72 85 72 85 Total Reserves (4) 72 85 72 85 Total solution mining Total Reserves (4) 441 88 443 88 Total dry extraction and solution mining Total Reserves 872 87 879 87 (1) Our trona ore reserves are calculated from in-place trona-bearing material that can be economically and legally extracted and processed into commercial products at the time of reserve determination.
No elements or compounds from within the beds were identified as having a material impact on the ability to extract trona from the beds via mechanical or brine (solution) mining methods. 62 Table of Contents December 31, 2023 December 31, 2022 Reserve Area/Type Reserve Category Million short tons (dry weight) (1) Grade (% Trona) (5) Million short tons (dry weight) (1) Grade (% Trona) (5) Westvaco dry extraction Proven (2) 248 88 252 88 Probable (2) 179 88 179 88 Total Reserves (3) 427 88 431 88 Westvaco solution mining Proven (2) — — Probable (2) 368 88 369 88 Total Reserves (4) 368 88 369 88 Granger solution mining Proven (2) — — Probable (2) 70 85 72 85 Total Reserves (4) 70 85 72 85 Total solution mining Total Reserves (4) 438 88 441 88 Total dry extraction and solution mining Total Reserves 865 87 872 87 (1) Our trona ore reserves are calculated from in-place trona-bearing material that can be economically and legally extracted and processed into commercial products at the time of reserve determination.
The following maps show the location of our mining property, as of December 31, 2022: 51 Table of Contents Figure 2.1. General Location Map 52 Table of Contents Figure 2.2.
The following maps show the location of our mining property, as of December 31, 2023: 52 Table of Contents Figure 2.1. General Location Map 53 Table of Contents Figure 2.2.
Granger Surface Production Facilities The Granger site has successfully mined and processed trona ore at a profit for over 35 years. In this time, capital has been expended as appropriate to sustain the operation at the current production and operating cost level.
Granger Surface Production Facilities The Granger site has successfully mined and processed trona ore at a profit for over 35 years. In this time, capital has been expended as appropriate to sustain the operation at the current production and operating cost level. In 2023, the Granger Optimization Project reached substantial completion and achieved first production.
The Union Pacific Railroad passes just north of the Westvaco facilities with siding to access the mainline. The two main population centers of Green River, Wyoming and Rock Springs, Wyoming are 18 miles and 30 miles to the east, respectively. Evanston, Wyoming is 66 miles to the west.
I-80 exit 72 is approximately seven miles from the processing plant. The Union Pacific Railroad passes just north of the Westvaco facilities with siding to access the mainline. The two main population centers of Green River, Wyoming and Rock Springs, Wyoming are 18 miles and 30 miles to the east, respectively. Evanston, Wyoming is 66 miles to the west.
In 1952, the Westvaco Division of FMC formed the Intermountain Chemical Company as Wyoming’s first trona mining company. In 1953, Intermountain Chemical Company began producing refined soda ash by a sesquicarbonate process through a plant with a 300,000-ton capacity.
In the fall of 1948, Westvaco Chemical Corporation was acquired by the Food Machinery Corporation (later known as “FMC”). In 1952, the Westvaco Division of FMC formed the Intermountain Chemical Company as Wyoming’s first trona mining company. In 1953, Intermountain Chemical Company began producing refined soda ash by a sesquicarbonate process through a plant with a 300,000-ton capacity.
Stantec reviewed our data at the end of 2022 and determined that, other than updating reserves to reflect ore consumption in 2022, there was no material change in mineral resources and reserves disclosed in the TRS and the TRS can be relied upon in stating 2022 reserves.
Stantec reviewed our data at the end of 2023 and 2022 and determined that, other than updating reserves to reflect ore consumption, there has not been any material changes in our mineral resources and reserves since the issuance of the TRS and the TRS can be relied upon in stating 2023 and 2022 reserves.
The Granger Optimization Project is underway with the upgraded operation scheduled to start in the second half of 2023. Capital expenditures are generally for sustaining production and operating costs except for some remaining capital for our Granger Optimization Project. We believe that the Granger site and its operating equipment are maintained in good working condition.
Capital expenditures are generally for sustaining production and operating costs except for some remaining capital for our Granger Optimization Project. We believe that the Granger site and its operating equipment are maintained in good working condition.
Dry mining reserves at year end 2022 are approximately five million short tons, or 1.2%, lower than year end 2021 reserves as a result of dry mine extraction in 2022. 62 Table of Contents Brine (solution) mining reserves at year end 2022 are approximately two million short tons, or 0.5% lower than year end 2021 reserves as a result of brine (solution) mining extraction in 2022.
Dry mining reserves at year end 2023 are approximately four million short tons, or 1.0%, lower than year end 2022 reserves as a result of dry mine extraction in 2023.
Year ended December 31, 2022 2021 2020 Total (in thousands of tons) 3,635 3,483 3,206 On January 1, 2023, we restarted our original Granger facility (which was put in cold standby in the second half of 2020) and its estimated 500,000 tons of annual production capacity and expect to complete the Granger Optimization Project and its incremental 750,000 tons of annual production capacity in the second half of 2023. 60 Table of Contents Summaries of our mineral resources and reserves for the fiscal year ended December 31, 2022 are set forth in the tables below: Area Resource Category (1) Million short tons (dry weight) Grade (% Trona) (2) Granger Contiguous Leases Measured 617 84 Indicated 145 89 Measured + Indicated 762 85 Westvaco Contiguous Lease Area Measured 1,067 88 Indicated 158 84 Measured + Indicated 1,225 87 Inferred 4 80 Granger Non-Contiguous Leases Measured 87 85 Indicated 60 84 Measured + Indicated 147 85 Inferred 3 84 Total Measured + Indicated 2,134 86 Total Measured + Indicated + Inferred 2,141 86 (1) Mineral resources are exclusive of mineral reserves, which are summarized in the table below.
Also in 2023, our Granger Optimization Project reached substantial completion and achieved first production and is expected to ramp up to incremental 750,000 tons of annual production capacity in 2024. 61 Table of Contents Summaries of our mineral resources and reserves for the fiscal years ended December 31, 2023 and 2022 are set forth in the tables below: December 31, 2023 December 31, 2022 Area Resource Category (1) Million short tons (dry weight) Grade (% Trona) (2) Million short tons (dry weight) Grade (% Trona) (2) Granger Contiguous Leases Measured 617 84 617 84 Indicated 145 89 145 89 Measured + Indicated 762 85 762 85 Westvaco Contiguous Leases Measured 1,067 88 1,067 88 Indicated 158 84 158 84 Measured + Indicated 1,225 87 1,225 87 Inferred 4 80 4 80 Granger Non-Contiguous Leases Measured 87 85 87 85 Indicated 60 84 60 84 Measured + Indicated 147 85 147 85 Inferred 3 84 3 84 Total Measured + Indicated 2,134 86 2,134 86 Total Measured + Indicated + Inferred 2,141 86 2,141 86 (1) Mineral resources are exclusive of mineral reserves, which are summarized in the table below.
The location of the Westvaco site and contiguous lease boundary can be found in Figure 2.2. It is located in Sweetwater County, Wyoming, 18 miles west of Green River and is accessible from Interstate 80 (I-80), a four-lane divided highway. I-80 exit 72 is approximately seven miles from the processing plant.
Our Westvaco site is a production stage property that mines trona through both dry mining and brine (solution) mining methods. The location of the Westvaco site and contiguous lease boundary can be found in Figure 2.2. It is located in Sweetwater County, Wyoming, 18 miles west of Green River and is accessible from Interstate 80 (I-80), a four-lane divided highway.
The area population provides a more than adequate base for staffing the Westvaco facilities, with a pool of talent for management. 56 Table of Contents The Westvaco site has been in continuous operation since 1947. Westvaco Chemical Corporation notified Union Pacific in 1946 of its intention to sink a mine shaft and to construct a trona processing plant.
The area population provides a more than adequate base for staffing the Westvaco facilities, with a pool of talent for management. 57 Table of Contents The Westvaco site has been in uninterrupted, continuous operation since its start in 1947 by Westvaco Chemical Corporation.
Our mineral resource and reserve estimates are based on many factors, including the area and volume covered by our mining rights, assumptions regarding our extraction rates (based upon an expectation of operating the mines on a long-term basis) and the quality of in-place reserves.
Brine (solution) mining reserves at year end 2023 are approximately three million short tons, or 0.7% lo wer than year end 2022 reserves as a result of brine (solution) mining extraction in 2023. 63 Table of Contents Our mineral resource and reserve estimates are based on many factors, including the area and volume covered by our mining rights, assumptions regarding our extraction rates (based upon an expectation of operating the mines on a long-term basis) and the quality of in-place reserves.
Total trona reserves for the fiscal year ended December 31, 2022 decreased approximately seven million short tons from fiscal year ended December 31, 2021, representing approximately 0.8% of the total reserves. Our 2021 reserves were largely based on an assessment completed by Stantec, an external QP, meeting the requirements of subpart 1300 of Regulation S-K.
Total trona reserves for the fiscal year ended December 31, 2023 decreased approximatel y seven million short tons from fiscal year ended December 31, 2022, representing approximately 0.8% of the total reserves.
A shaft was sunk in 1947 to the top of Bed 17 bringing the first skipload of trona to the surface in late 1947. In the fall of 1948, Westvaco Chemical Corporation was acquired by the Food Machinery Corporation (later known as “FMC”).
Westvaco Chemical Corporation notified Union Pacific in 1946 of its intention to sink a mine shaft and to construct a trona processing plant. A shaft was sunk in 1947 to the top of Bed 17 bringing the first skipload of trona to the surface in late 1947.
Removed
Our Westvaco site is a production stage property that mines trona through both dry mining and brine (solution) mining methods. The Westvaco mine has been in uninterrupted, continuous operation since its start in 1947 by Westvaco Chemical Company. We acquired the Westvaco facility in September 2017.
Added
Year ended December 31, 2023 2022 2021 Total (in thousands of tons) 3,889 3,635 3,483 On January 1, 2023, we restarted our original Granger facility (which was put in cold standby in the second half of 2020) and its estimated 500,000 tons of annual production capacity.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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See Note 21 to our Consolidated Financial Statements in Item 8. Item 103 of SEC Regulation S-K requires disclosure of certain environmental matters when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that we reasonably believe will exceed a specified threshold.
See Note 2 2 to our Consolidated Financial Statements in Item 8. Item 103 of SEC Regulation S-K requires disclosure of certain environmental matters when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that we reasonably believe will exceed a specified threshold.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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“Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters” for information regarding securities authorized for issuance under equity compensation plans. 65 Table of Contents Item 6. Selected Financial Data None.
“Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters” for information regarding securities authorized for issuance under equity compensation plans. 66 Table of Contents Item 6. Selected Financial Data None.
See Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Capital Expenditures and Distributions Paid to our Unitholders” and Note 11 to our Consolidated Financial Statements in Item 8 for further information regarding restrictions on our distributions. See Item 12.
See Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Capital Expenditures and Distributions Paid to our Unitholders” and Note 1 2 to our Consolidated Financial Statements in Item 8 for further information regarding restrictions on our distributions. See Item 12.
Item 5. Market for Registrant’s Common Equity, Related Unitholder Matters and Issuer Purchases of Equity Securities Our Class A common units are listed on the New York Stock Exchange, or NYSE, under the symbol “GEL.” At February 23, 2023, we had 122,539,221 Class A common units outstanding.
Item 5. Market for Registrant’s Common Equity, Related Unitholder Matters and Issuer Purchases of Equity Securities Our Class A Common Units are listed on the New York Stock Exchange, or NYSE, under the symbol “GEL.” At February 23, 2024, we had 122,424,321 Class A Common Units outstanding.
As of December 31, 2022, the closing price of our common units was $10.21 and we had approximately 28,000 record holders of our Class A common units, which include holders who own units through their brokers “in street name.” Additionally, we have issued 25,336,778 Class A Convertible Preferred Units for which there is no established public trading market.
As of December 31, 2023, the closing price of our common units was $11.58 and we had approximately 26,400 record holders of our Class A Common Units, which include holders who own units through their brokers “in street name.” Additionally, we have issued 23,111,918 Class A Convertible Preferred Units for which there is no established public trading market.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

133 edited+63 added−38 removed124 unchanged
Available Cash before Reserves Purposes, Uses and Definition Available Cash before Reserves, often referred to by others as distributable cash flow, is a quantitative standard used throughout the investment community with respect to publicly-traded partnerships and is commonly used as a supplemental financial measure by management and by external users of financial statements such as investors, commercial banks, research analysts and rating agencies, to aid in assessing, among other things: (1) the financial performance of our assets; (2) our operating performance; (3) the viability of potential projects, including our cash and overall return on alternative capital investments as compared to those of other companies in the midstream energy industry; (4) the ability of our assets to generate cash sufficient to satisfy certain non-discretionary cash requirements, including interest payments and certain maintenance capital requirements; and 76 Table of Contents (5) our ability to make certain discretionary payments, such as distributions on our preferred and common units, growth capital expenditures, certain maintenance capital expenditures and early payments of indebtedness.
Available Cash before Reserves Purposes, Uses and Definition Available Cash before Reserves, often referred to by others as distributable cash flow, is a quantitative standard used throughout the investment community with respect to publicly-traded partnerships and is commonly used as a supplemental financial measure by management and by external users of financial statements such as investors, commercial banks, research analysts and rating agencies, to aid in assessing, among other things: (1) the financial performance of our assets; (2) our operating performance; (3) the viability of potential projects, including our cash and overall return on alternative capital investments as compared to those of other companies in the midstream energy industry; (4) the ability of our assets to generate cash sufficient to satisfy certain non-discretionary cash requirements, including interest payments and certain maintenance capital requirements; and 77 Table of Contents (5) our ability to make certain discretionary payments, such as distributions on our preferred and common units, growth capital expenditures, certain maintenance capital expenditures and early payments of indebtedness.
We did not identify any relevant events or circumstances indicating that it is more likely than not that the fair value of the reporting unit is less than the respective carrying value. As such, a quantitative goodwill test was not required, and no goodwill impairment was recognized for the year ended December 31, 2022.
We did not identify any relevant events or circumstances indicating that it is more likely than not that the fair value of the reporting unit is less than the respective carrying value. As such, a quantitative goodwill test was not required, and no goodwill impairment was recognized for the year ended December 31, 2023 and 2022.
We recognized an actuarial gain of $11.2 million during 2022 in accumulated other comprehensive income (loss) primarily as a result of an increase to the discount rate utilized to calculate our benefit obligation from 3.27% at December 31, 2021 to 5.33% at December 31, 2022.
We recognized an actuarial gain of $11.2 million during 2022 in accumulated other comprehensive income primarily as a result of an increase to the discount rate utilized to calculate our benefit obligation from 3.27% at December 31, 2021 to 5.33% at December 31, 2022.
Through these assets we offer our customers a full suite of services, including the following as of December 31, 2022: • facilitating the transportation of crude oil from producers to refineries and from our terminals, as well as those owned by third parties, to refiners via pipelines; • shipping crude oil and refined products to and from producers and refiners via trucks and pipelines; • storing and blending of crude oil and intermediate and finished refined products; • purchasing/selling and/or transporting crude oil from the wellhead to markets for ultimate use in refining; • purchasing products from refiners, transporting those products to one of our terminals and blending those products to a quality that meets the requirements of our customers and selling those products (primarily fuel oil, asphalt and other heavy refined products) to wholesale markets; and • unloading railcars at our crude-by-rail terminals.
Through these assets we offer our customers a full suite of services, including the following as of December 31, 2023: • facilitating the transportation of crude oil from producers to refineries and from our terminals, as well as those owned by third parties, to refiners via pipelines; • shipping crude oil and refined products to and from producers and refiners via trucks and pipelines; • storing and blending of crude oil and intermediate and finished refined products; • purchasing/selling and/or transporting crude oil from the wellhead to markets for ultimate use in refining; • purchasing products from refiners, transporting those products to one of our terminals and blending those products to a quality that meets the requirements of our customers and selling those products (primarily fuel oil, asphalt and other heavy refined products) to wholesale markets; and • unloading railcars at our crude-by-rail terminals.
In addition, the credit agreement amendment re-designated Genesis Alkali Holdings Company LLC, Genesis Alkali Holdings, LLC, Genesis Alkali, LLC and Genesis Alkali Wyoming, LP (the subsidiary entities that own our Alkali Business, other than the ORRI Interests) as restricted entities and guarantors of our credit agreement.
In addition, the amendment re-designated Genesis Alkali Holdings Company LLC, Genesis Alkali Holdings, LLC, Genesis Alkali, LLC and Genesis Alkali Wyoming, LP (the subsidiary entities that own our Alkali Business, other than the ORRI Interests) as restricted entities and guarantors of our old credit agreement.
At December 31, 2022, we were not aware of any contingencies or environmental liabilities that would have a material effect on our financial position, results of operations or cash flows. Additionally, certain of our assets have contractual and regulatory obligations to perform dismantlement and removal activities, and in some instances remediation, when the assets are abandoned.
At December 31, 2023, we were not aware of any contingencies or environmental liabilities that would have a material effect on our financial position, results of operations or cash flows. Additionally, certain of our assets have contractual and regulatory obligations to perform dismantlement and removal activities, and in some instances remediation, when the assets are abandoned.
Although we do not necessarily consider all of our Select Items to be non-recurring, infrequent or unusual, we believe that an understanding of these Select Items is important to the evaluation of our core operating results. The most significant Select Items in the relevant reporting periods are set forth below. Year Ended December 31, 2022 2021 I.
Although we do not necessarily consider all of our Select Items to be non-recurring, infrequent or unusual, we believe that an understanding of these Select Items is important to the evaluation of our core operating results. The most significant Select Items in the relevant reporting periods are set forth below. Year Ended December 31, 2023 2022 I.
For additional information regarding our goodwill, see Note 9 to our Consolidated Financial Statements in Item 8. Revenue recognition - Estimation of variable consideration Our offshore pipeline transportation segment has certain long-term contracts with customers that include variable consideration that must be estimated at contract inception and re-assessed at each reporting period.
For additional information regarding our goodwill, see Note 10 to our Consolidated Financial Statements in Item 8. Revenue recognition - Estimation of variable consideration Our offshore pipeline transportation segment has certain long-term contracts with customers that include variable consideration that must be estimated at contract inception and re-assessed at each reporting period.
Working capital borrowings are generally borrowings that are made under our senior secured credit facility and in all cases are used solely for working capital purposes or to pay distributions to partners. On February 14, 2023, we paid a distribution of $0.15 per common unit related to the fourth quarter of 2022.
Working capital borrowings are generally borrowings that are made under our senior secured credit facility and in all cases are used solely for working capital purposes or to pay distributions to partners. On February 14, 2024, we paid a distribution of $0.15 per common unit related to the fourth quarter of 2023.
The other core focus of our business is our trona and trona-based exploring, mining, processing, producing, marketing and selling business based in Wyoming (our “Alkali Business”).
The other core focus of our business is our trona and trona-based exploring, mining, processing, producing, marketing, logistics and selling business based in Wyoming (our “Alkali Business”).
Our primary sources of liquidity have historically been cash flows from operations, borrowing availability under our senior secured credit facility, proceeds from the sale of non-core assets, the creation of strategic arrangements to share capital costs through joint ventures or strategic alliances, and the proceeds from issuances of equity (common and preferred) and senior unsecured or secured notes.
Our primary sources of liquidity have historically been cash flows from operations, borrowing availability under our senior secured credit facility, proceeds from the sale of assets, the creation of strategic arrangements to share capital costs through joint ventures or strategic alliances, and the proceeds from issuances of equity (common and preferred) and senior unsecured or secured notes.
With respect to our Class A Convertible Preferred Units, we declared a quarterly cash distribution of $0.9473 per unit (or $3.789 on an annualized basis). These distributions were paid on February 14, 2023 to unitholders holders of record at the close of business January 31, 2023.
With respect to our Class A Convertible Preferred Units, we declared a quarterly cash distribution of $0.9473 per unit (or $3.789 on an annualized basis). These distributions were paid on February 14, 2024 to unitholders holders of record at the close of business January 31, 2024.
On May 17, 2022 (the “Redemption Date”), we fully redeemed the 251,750 outstanding Alkali Holdings preferred units a Base Preferred Return Amount of $288.6 million utilizing a portion of the proceeds we received from the issuance of our Alkali senior secured notes. As of December 31, 2022, there were no Alkali Holdings preferred units outstanding.
On May 17, 2022 (the “Redemption Date”), we fully redeemed the 251,750 outstanding Alkali Holdings preferred units a Base Preferred Return Amount of $288.6 million utilizing a portion of the proceeds we received from the issuance of our Alkali senior secured notes. As of December 31, 2022 and 2023, there were no Alkali Holdings preferred units outstanding.
If we determine that an asset’s unamortized cost may not be recoverable due to impairment, we may be required to reduce the carrying value and/or the subsequent useful life of the asset. Any such write-down of the value and unfavorable change in the useful life of a long-lived asset would increase costs and expenses at that time.
If we determine that an asset’s carrying value may not be recoverable due to impairment, we may be required to reduce the carrying value and/or the subsequent useful life of the asset. Any such write-down of the value and unfavorable change in the useful life of a long-lived asset would increase costs and expenses at that time.
One of our other monitoring procedures is the comparison of our market capitalization to our book equity to determine if there is an indicator of impairment. We performed a qualitative assessment as of October 1, 2022 for our refinery services reporting unit, which is the only reporting unit as of our assessment date that has goodwill.
One of our other monitoring procedures is the comparison of our market capitalization to our book equity to determine if there is an indicator of impairment. We performed a qualitative assessment as of October 1, 2023 and 2022 for our refinery services reporting unit, which is the only reporting unit as of our assessment date that has goodwill.
Employee Benefits We sponsor a defined benefit pension plan for union-only employees of our Alkali Business. We recognize the net funded status of the pension plan under GAAP as a net liability, included within “Other long-term liabilities” as of December 31, 2022 and 2021 on our Consolidated Balance Sheets.
Employee Benefits We sponsor a defined benefit pension plan for union-only employees of our Alkali Business. We recognize the net funded status of the pension plan under GAAP as a net liability, included within “Other long-term liabilities” as of December 31, 2023 and 2022 on our Consolidated Balance Sheets.
We also have current asset retirement obligations of approximately $27 million that we expect to pay in 2023. These requirements are expected to be funded primarily with free cash flow generated from our operations and availability under our senior secured credit facility.
We also have current asset retirement obligations of approximately $27 million that we expect to pay in 2024. These requirements are expected to be funded primarily with free cash flow generated from our operations and availability under our senior secured credit facility.
A more detailed discussion of our segment results and other costs is included below in “Results of Operations”. Distributions to Unitholders On February 14, 2023, we paid a distribution of $0.15 per common unit related to the fourth quarter of 2022.
A more detailed discussion of our segment results and other costs is included below in “Results of Operations”. Distributions to Unitholders On February 14, 2024, we paid a distribution of $0.15 per common unit related to the fourth quarter of 2023.
Additionally, our offshore transportation assets incur maintenance capital expenditures to replace, maintain, and upgrade equipment at certain of our offshore platforms and pipelines that we operate. We expect future expenditures to be within a reasonable range of 2022’s expenditures dependent upon the timing of when we incur certain costs.
Additionally, our offshore transportation assets incur maintenance capital expenditures to replace, maintain, and upgrade equipment at certain of our offshore platforms and pipelines that we operate. We expect future expenditures to be within a reasonable range of 2023’s expenditures dependent upon the timing of when we incur certain costs.
Our sales prices for volumes sold internationally and to ANSAC are contracted for the current year either annually in the prior year or periodically throughout the current year (often quarterly), and our volumes priced and sold domestically are contracted at various times and can be of varying durations, often multi-year terms.
Our sales prices for volumes sold internationally are contracted for the current year either annually in the prior year or periodically throughout the current year (often quarterly), and our volumes priced and sold domestically are contracted at various times and can be of varying durations, often multi-year terms.
Other Consolidated Results Net income for the year ended December 31, 2022 included an unrealized loss of $18.6 million from the valuation of our previously recognized embedded derivative associated with our Class A Convertible Preferred Units, and also included cancellation of debt income of $8.6 million associated with the open market repurchase and extinguishment of certain of our senior unsecured notes.
Net income for the year ended December 31, 2022 included an unrealized loss of $18.6 million from the valuation of our previously recognized embedded derivative associated with our Class A Convertible Preferred Units, and also included cancellation of debt income of $8.6 million associated with the open market repurchase and extinguishment of certain of our senior unsecured notes.
Additionally, changes in certain of our operating costs between the respective periods, such as those associated with our sodium minerals and sulfur services, offshore pipeline and marine transportation segments, are not directly correlated with crude oil prices. We discuss certain of those costs in further detail below in our segment-by-segment analysis.
Additionally, changes in certain of our operating costs between the respective periods, such as those associated with our soda and sulfur services, offshore pipeline transportation and marine transportation segments, are not directly correlated with crude oil prices. We discuss certain of those costs in further detail below in our segment-by-segment analysis.
Holders of our Class A Convertible Preferred Units vote on an as-converted basis with holders of our common units and have certain class voting rights, including with 81 Table of Contents respect to any amendment to the partnership agreement that would adversely affect the rights, preferences or privileges, or otherwise modify the terms, of those Class A Convertible Preferred Units.
Holders of our Class A Convertible Preferred Units vote on an as-converted basis with holders of our common units and have certain class voting rights, including with respect to any amendment to the partnership agreement that would adversely affect the rights, preferences or privileges, or otherwise modify the terms, of those Class A Convertible Preferred Units.
Our costs, some of which are variable in nature and others are fixed in nature, relate primarily to the processing and producing of soda ash (and other alkali specialty products) and marketing and selling activities. In addition, costs include activities associated with mining and extracting trona ore, including energy costs and employee compensation.
Our costs, some of which are variable in nature and others are fixed in nature, relate primarily to the processing and producing of soda ash (and other alkali specialty products) and marketing and selling activities. In addition, 69 Table of Contents costs include activities associated with mining and extracting trona ore, including energy costs and employee compensation.
The net proceeds were used to purchase approximately $316 million of our existing 2024 Notes, including the related accrued interest and tender premium and fees on those notes that were tendered in the tender offer that ended January 24, 2023 and the remaining proceeds at the time were used to repay a portion of the borrowings outstanding under our senior secured credit facility and for general partnership purposes.
The net proceeds were used to purchase approximately $316 million of our existing 2024 Notes, including the related accrued interest and tender premium and fees on those notes that were tendered in the tender offer that ended January 24, 2023 and the remaining proceeds at the time were used to repay a portion of the borrowings outstanding under our old revolving credit facility and for general partnership purposes.
Our operating cash flows can be impacted by changes in items of working capital, primarily variances in the carrying amount of inventory and the timing of payment of accounts payable and accrued 82 Table of Contents liabilities related to capital expenditures and interest charges, and the timing of accounts receivable collections from our customers.
Our operating cash flows can be impacted by changes in items of working capital, primarily variances in the carrying amount of inventory and the timing of payment of accounts payable and accrued liabilities related to capital expenditures and interest charges, and the timing of accounts receivable collections from our customers.
Guarantor Summarized Financial Information Our $2.9 billion aggregate principal amount of senior unsecured notes co-issued by Genesis Energy, L.P. and Genesis Energy Finance Corporation are fully and unconditionally guaranteed jointly and severally by all of Genesis Energy, L.P.’s current and future 100% owned domestic subsidiaries (the “Guarantor Subsidiaries”), except GA ORRI and GA ORRI Holdings and certain other subsidiaries.
Guarantor Summarized Financial Information Our $3.1 billion aggregate principal amount of senior unsecured notes co-issued by Genesis Energy, L.P. and Genesis Energy Finance Corporation are fully and unconditionally guaranteed jointly and severally by all of Genesis Energy, L.P.’s current and future 100% owned domestic subsidiaries (the “Guarantor Subsidiaries”), except GA ORRI and GA ORRI Holdings and certain other subsidiaries.
We believe that, without such modified disclosure, such changes in our maintenance capital expenditures could be confusing and potentially misleading 77 Table of Contents to users of our financial information, particularly in the context of the nature and purposes of our Available Cash before Reserves measure.
We believe that, without such modified disclosure, such changes in our maintenance capital expenditures could be confusing and potentially misleading to users of our financial information, particularly in the context of the nature and purposes of our Available Cash before Reserves measure.
A substantial portion of our revenues and costs are derived from the purchase and sale of crude oil in our crude oil marketing business, which is included in our onshore facilities and transportation segment, revenues and costs associated with our Alkali Business, which is included in our sodium minerals and sulfur services segment, and revenues and costs associated with our offshore pipeline transportation segment.
A substantial portion of our revenues and costs are derived from the purchase and sale of crude oil in our crude oil marketing business, which is included in our onshore facilities and transportation segment, revenues and costs associated with our Alkali Business, which is included in our soda and sulfur services segment, and revenues and costs associated with our offshore pipeline transportation segment.
This discussion can be found within our previously filed 2021 Form 10-K, which was filed with the SEC on February 24, 2022. Non-GAAP Financial Measures General To help evaluate our business, this Annual Report on Form 10-K includes the non-generally accepted accounting principle (“non-GAAP”) financial measure of Available Cash before Reserves.
This discussion can be found within our previously filed 2022 Form 10-K, which was filed with the SEC on February 24, 2023. Non-GAAP Financial Measures General To help evaluate our business, this Annual Report on Form 10-K includes the non-generally accepted accounting principles (“non-GAAP”) financial measure of Available Cash before Reserves.
Liquidity and Capital Resources General On April 8, 2021, we entered into our Fifth Amended and Restated Credit Agreement, which initially provided for a $950 million senior secured credit facility, which comprised a revolving loan with a borrowing capacity of $650 million and a term loan with a borrowing capacity of $300 million, with the ability to increase the aggregate size of the revolving loan by an additional $200 million subject to lender consent and certain other customary conditions.
Liquidity and Capital Resources General On April 8, 2021, we entered into our Fifth Amended and Restated Credit Agreement (the “old credit agreement”), which initially provided for a $950 million senior secured credit facility, which was comprised of a revolving senior secured credit facility (the “old revolving credit facility”) with a borrowing capacity of $650 million and a term loan with a borrowing capacity of $300 million, with the ability to increase the aggregate size of the old revolving credit facility by an additional $200 million subject to lender consent and certain other customary conditions.
Although we believe our estimates to be reasonable, these estimates and assumptions about future events and their effects cannot be determined with certainty, and, accordingly, are evaluated on a regular basis and revised as needed as new events occur or more information is acquired, and as the business environment in which we operate 87 Table of Contents changes.
Although we believe our estimates to be reasonable, these estimates and assumptions about future events and their effects cannot be determined with certainty, and, accordingly, are evaluated on a regular basis and revised as needed as new events occur or more information is acquired, and as the business environment in which we operate changes.
Changes in these 88 Table of Contents estimates could have a significant impact on fair value. If the fair value of the reporting unit (including its inherent goodwill) is less than its carrying value, a charge to earnings may be required to reduce the carrying value of goodwill to its implied fair value.
Changes in these estimates could have a significant impact on fair value. If the fair value of the reporting unit (including its inherent goodwill) is less than its carrying value, a charge to earnings may be required to reduce the carrying value of goodwill to its implied fair value.
Our term loan was paid off in full on November 17, 2021 with a portion of the gross proceeds of $418 million received from the sale of a 36% minority interest in CHOPS. On February 17, 2023, we entered into the Sixth Amended and Restated Credit Agreement (our “new credit agreement”) to replace our Fifth Amended and Restated Credit Agreement.
Our term loan was paid off in full on November 17, 2021 with a portion of the gross proceeds of $418 million received from the sale of a 36% minority interest in CHOPS. On February 17, 2023, we entered into the Sixth Amended and Restated Credit Agreement (our “credit agreement”) to replace our old credit agreement.
(2) Each series of senior unsecured notes is further discussed and defined in Note 10 to our Consolidated Financial Statements in Item 8.
(2) Each series of senior unsecured notes is further discussed and defined in Note 1 1 to our Consolidated Financial Statements in Item 8.
The impact of the increase in our discount rate was partially offset as a result of an actuarial loss recognized due to the difference between the actual and expected return on our plan assets during 2022.
The impact of the increase in our discount rate was partially offset as a result of an actuarial loss recognized due to the difference between the actual and expected return on our plan assets during 2022. 92 Table of Contents
On April 29, 2022, we received $40 million, or $32 million net to our ownership interests, for the sale of our 80% owned Independence Hub platform which allowed us to repay a portion of the borrowings outstanding under our senior secured credit facility and further increase our borrowing capacity.
On April 29, 2022, we received $40 million, or $32 million net to our ownership interests, for the sale of our 80% owned Independence Hub platform which allowed us to repay a portion of the borrowings outstanding under our old revolving credit facility and further increase our borrowing capacity.
In conjunction with these agreements, we are in the process of expanding the current capacity of the CHOPS pipeline and constructing a new 100% owned, approximately 105 mile, 20” diameter crude oil pipeline (the “SYNC pipeline”) to connect one of the developments to our existing asset footprint in the Gulf of Mexico.
In conjunction with these agreements, we are expanding the current capacity of the CHOPS pipeline and constructing a new 100% owned, approximately 105-mile, 20” diameter crude oil pipeline, the SYNC pipeline, to connect one of the developments to our existing asset footprint in the Gulf of Mexico.
The shippers on our offshore pipelines are mostly integrated and large independent energy companies whose production is ideally suited for the vast majority of refineries along 68 Table of Contents the Gulf Coast.
The shippers on our offshore pipelines are mostly integrated and large independent energy companies whose production is ideally suited for the vast majority of refineries along the Gulf Coast.
(2) There are no noncontrolling interests held at the Issuer or Guarantor Subsidiaries for the period presented. (3) Excluded from revenues in the table above are $5.1 million of sales from Guarantor Subsidiaries to non-Guarantor Subsidiaries for the year ended December 31, 2022. Critical Accounting Estimates The preparation of our consolidated financial statements in conformity with U.S.
(2) There are no noncontrolling interests held at the Issuer or Guarantor Subsidiaries for the period presented. (3) Excluded from revenues in the table above are $2.8 million of sales from Guarantor Subsidiaries to non-Guarantor Subsidiaries for the year ended December 31, 2023. Critical Accounting Estimates The preparation of our consolidated financial statements in conformity with U.S.
A reconciliation of Net income (loss) attributable to Genesis Energy, L.P. to total Segment Margin is included in our segment disclosure in Note 13 to our Consolidated Financial Statements in Item 8.
A reconciliation of Net income (loss) attributable to Genesis Energy, L.P. to total Segment Margin is included in our segment disclosure in Note 1 4 to our Consolidated Financial Statements in Item 8.
Our primary cash requirements consist of: • working capital, primarily inventories and trade receivables and payables; • routine operating expenses; • capital growth (as discussed in more detail below) and maintenance projects; • interest payments related to outstanding debt; • asset retirement obligations; • quarterly cash distributions to our preferred and common unitholders; and • acquisitions of assets or businesses.
Our primary cash requirements consist of: • working capital, primarily inventories and trade receivables and payables; • routine operating expenses; • capital growth (as discussed in more detail below) and maintenance expenditures; 81 Table of Contents • interest payments related to outstanding debt; • asset retirement obligations; • quarterly cash distributions to our preferred and common unitholders; and • acquisitions of assets or businesses.
We revise these estimates as additional information is obtained or resolution is achieved. 89 Table of Contents We also make estimates related to future payments for environmental costs to remediate existing conditions attributable to past operations. Environmental costs include costs for studies and testing as well as remediation and restoration.
We revise these estimates as additional information is obtained or resolution is achieved. We also make estimates related to future payments for environmental costs to remediate existing conditions attributable to past operations. Environmental costs include costs for studies and testing as well as remediation and restoration.
For additional information regarding the Class A Convertible Preferred Units and the associated embedded derivative, see Note 11 and Note 18 to our Consolidated Financial Statements in Item 8. Liability and Contingency Accruals and Asset Retirement Obligations We accrue reserves for contingent liabilities including environmental remediation and potential legal claims.
For additional information regarding the Class A Convertible Preferred Units and the associated embedded derivative, see Note 1 2 and Note 1 9 to our Consolidated Financial Statements in Item 8. Liability and Contingency Accruals and Asset Retirement Obligations We accrue reserves for contingent liabilities including environmental remediation and potential legal claims.
The producer agreements include long term take-or-pay arrangements and, accordingly, we are able to receive a project completion credit for purposes of calculating the leverage ratio under our senior secured credit facility throughout the construction period.
The producer agreements include long term take-or-pay arrangements and, accordingly, we are able to receive a project completion credit for purposes of calculating the leverage ratio under our credit agreement throughout the construction period.
The successful completion of the above events has resulted in no scheduled maturities of our unsecured notes until 2025 and has provided us a significant amount of available borrowing capacity under our senior secured credit facility, subject to compliance with covenants, to, amongst other things, utilize for funding the remaining growth capital expenditures associated with our Granger Optimization Project and our offshore growth projects discussed earlier.
The successful completion of the above events has resulted in no scheduled maturities of our senior unsecured notes until 2026 and has provided us a significant amount of available borrowing capacity under our senior secured credit facility, subject to compliance with covenants in the credit agreement, to, amongst other things, utilize for funding the remaining growth capital expenditures associated with our GOP and our offshore growth projects discussed earlier.
The rights of holders of our senior unsecured notes against the Guarantor Subsidiaries may be limited under the U.S. Bankruptcy Code or state fraudulent transfer or conveyance law. 86 Table of Contents On May 17, 2022, we entered into our credit agreement amendment, which designated GA ORRI and GA ORRI Holdings as unrestricted subsidiaries under our credit agreement.
The rights of holders of our senior unsecured notes against the Guarantor Subsidiaries may be limited under the U.S. Bankruptcy Code or state fraudulent transfer or conveyance law. On May 17, 2022, we entered into an amendment to our old credit agreement, which designated GA ORRI and GA ORRI Holdings as unrestricted subsidiaries under our credit agreement.
We used a portion of net proceeds from the issuance to fully redeem the outstanding Alkali Holdings preferred units and utilized the remainder to repay a portion of the outstanding borrowings under our senior secured credit facility.
We used a portion of net proceeds from the issuance to fully redeem the outstanding Alkali Holdings preferred units and utilized the remainder to repay a portion of the outstanding borrowings under our old revolving credit facility.
Included in Management’s Discussion and Analysis are the following sections: • Overview of 2022 Results • Recent Developments and Initiatives • Results of Operations • Other Consolidated Results • Financial Measures • Liquidity and Capital Resources • Guarantor Summarized Financial Information • Critical Accounting Estimates • Recent Accounting Pronouncements Overview of 2022 Results We reported Net Income Attributable to Genesis Energy, L.P. of $75.5 million in 2022 compared to Net Loss Attributable to Genesis Energy, L.P. of $165.1 million in 2021.
Included in Management’s Discussion and Analysis are the following sections: • Overview of 2023 Results • Recent Developments and Initiatives • Results of Operations • Other Consolidated Results • Financial Measures • Liquidity and Capital Resources • Guarantor Summarized Financial Information • Critical Accounting Estimates • Recent Accounting Pronouncements Overview of 2023 Results We reported Net Income Attributable to Genesis Energy, L.P. of $117.7 million in 2023 compared to Net Income Attributable to Genesis Energy, L.P. of $75.5 million in 2022.
Recent Developments and Initiatives Our primary objectives are to generate and grow stable free cash flows and continue to deleverage our balance sheet, while never wavering from our commitment to safe and responsible operations, as well as continue to advance and integrate our Environmental, Social and Governance (“ESG”) program.
Recent Developments and Initiatives Our primary objectives are to generate and grow stable free cash flows and continue to deleverage our balance sheet, while never wavering from our commitment to safe and responsible operations, as well as continue to advance and integrate our sustainability program.
A summary of the applicable redemption periods is provided in the table below. 2024 Notes 2025 Notes 2026 Notes 2027 Notes 2028 Notes Redemption right beginning on June 15, 2019 October 1, 2020 February 15, 2021 January 15, 2024 February 1, 2023 Redemption of up to 35% of the principal amount of notes with the proceeds of an equity offering permitted prior to June 15, 2019 October 1, 2020 February 15, 2021 January 15, 2024 February 1, 2023 For additional information on our long-term debt and covenants see Note 10 to our Consolidated Financial Statements in Item 8.
A summary of the applicable redemption periods is provided in the table below. 2026 Notes 2027 Notes 2028 Notes 2029 Notes 2030 Notes Redemption right beginning on February 15, 2021 January 15, 2024 February 1, 2023 January 15, 2026 April 15, 2026 Redemption of up to 35% of the principal amount of notes with the proceeds of an equity offering permitted prior to N/A N/A N/A January 15, 2026 April 15, 2026 For additional information on our long-term debt and covenants see Note 1 1 to our Consolidated Financial Statements in Item 8.
See Note 11 to our Consolidated Financial Statements in Item 8 for additional information regarding our mezzanine capital.
See Note 1 2 to our Consolidated Financial Statements in Item 8 for additional information regarding our mezzanine capital.
The cash requirements for these activities can result in short term increases and decreases in the borrowings under our senior secured credit facility. In our Alkali Business, we typically extract trona from our mining facilities, process into soda ash and other alkali products, and deliver and sell to our customers all within a relatively short time frame.
The cash requirements for these activities can result in short term increases and decreases in the borrowings under our senior secured credit facility. In our Alkali Business, we typically extract trona from our mining facilities, process into soda ash and other alkali products, and deliver and sell to our customers domestically and internationally.
No assurance can be made that we will be able to raise necessary funds on satisfactory terms. At December 31, 2022, we had $205.4 million borrowed under our senior secured credit facility, with $4.7 million of the borrowed amount designated as a loan under the inventory sublimit.
No assurance can be made that we will be able to raise necessary funds on satisfactory terms. At December 31, 2023, we had $298.3 million borrowed under our senior secured credit facility, with $19.3 million of the borrowed amount designated as a loan under the inventory sublimit.
Future payment obligations associated with our Alkali senior secured notes, as of December 31, 2022, including both estimated principal and interest payments, are summarized in the table below: Payment Obligations Estimated Interest Payments Estimated Principal Payments 2023 $ 24,969 $ — 2024 24,712 11,618 2025 23,997 13,097 2026 through 2042 227,794 400,285 We have the right to redeem each of our series of senior unsecured notes beginning on specified dates as summarized below, at a premium to the face amount of such notes that varies based on the time remaining to maturity on such notes.
Future payment obligations associated with our Alkali senior secured notes, as of December 31, 2023, including both estimated principal and interest payments, are summarized in the table below: Payment Obligations Estimated Interest Payments Estimated Principal Payments 2024 $ 24,712 $ 11,618 2025 23,997 13,097 2026 23,203 14,227 2027 through 2042 204,592 386,058 82 Table of Contents We have the right to redeem each of our series of senior unsecured notes beginning on specified dates as summarized below, at a premium to the face amount of such notes that varies based on the time remaining to maturity on such notes.
Applicable only to Available Cash before Reserves Certain transaction costs (6) 7,339 8,946 Other 2,208 1,398 Total Select Items, net $ 106,327 $ 154,567 (1) Represents the difference in timing of cash receipts from customers during the period and the revenue we recognize in accordance with GAAP on our related contracts.
Applicable only to Available Cash before Reserves Certain transaction costs (6) 105 7,339 Other 3,076 2,208 Total Select Items, net $ 102,272 $ 106,327 (1) Represents the difference in timing of cash receipts from customers during the period and the revenue we recognize in accordance with GAAP on our related contracts.
The estimated total for our unconditional purchase obligations is $54.1 million, of which $41.9 million is estimated to be paid in 2023. Contracts to purchase natural gas and utilities are generally at market-based prices. The estimated volumes and market prices at December 31, 2022 were used to value those obligations.
The estimated total for our unconditional purchase obligations is $25.3 million, of which $13.1 million is estimated to be paid in 2024. Contracts to purchase natural gas and utilities are generally at market-based prices. The estimated volumes and market prices at December 31, 2023 were used to value those obligations.
(3) 2022 includes an unrealized loss of $18.6 million from the valuation of our previously recorded embedded derivative associated with our Class A Convertible Preferred Units and an unrealized gain of $24.3 million from the valuation of our commodity derivatives transactions (excluding fair value hedges). 2021 includes an unrealized loss of $30.8 million from the valuation of the embedded derivative and an unrealized gain of $0.1 million from the valuation of our commodity derivatives (excluding fair value hedges).
(3) 2023 includes an unrealized loss of $36.7 million from the valuation of our commodity derivatives transactions (excluding fair value hedges). 2022 includes an unrealized loss of $18.6 million from the valuation of our previously recorded embedded derivative associated with our Class A Convertible Preferred Units and an unrealized gain of $24.3 million from the valuation of our commodity derivatives transactions (excluding fair value hedges).
We describe, in more detail, the impact on revenues and costs for each of our businesses below. As it relates to our crude oil marketing business, the average closing prices for West Texas Intermediate crude oil on the New York Mercantile Exchange (“NYMEX”) increased approximately 39% to $94.90 per barrel in 2022 as compared to $68.14 per barrel in 2021.
We describe, in more detail, the impact on revenues and costs for each of our businesses below. As it relates to our crude oil marketing business, the average closing prices for West Texas Intermediate crude oil on the New York Mercantile Exchange (“NYMEX”) decreased approximately 18% to $77.58 per barrel in 2023 as compared to $94.90 per barrel in 2022.
As additional information becomes available, we may adjust the original estimates within a short time period subsequent to the acquisition. In addition, we are required to recognize intangible assets separately from goodwill.
As additional information becomes available, we may adjust the original estimates within one year subsequent to the acquisition. In addition, we are required to recognize intangible assets separately from goodwill.
Our final valuation of the embedded derivative occurred on September 29, 2022, which is when the feature within the Class A Convertible Preferred Units that required bifurcation and fair value measurement no longer existed. On September 29, 2022, the fair value of the liability associated with the embedded derivative was reclassified to mezzanine equity.
Our final valuation of the embedded derivative occurred on September 29, 2022, which is when the feature within the Class A Convertible Preferred Units that required bifurcation and fair value measurement no longer existed.
In our Alkali Business, during 2022, as noted above, we had positive effects to our revenues compared to 2021 (with a lesser impact to costs) due to favorable export pricing of soda ash and higher sales volumes as a result of increased economic and market demand. For additional information, see our segment-by-segment analysis below.
In our Alkali Business, during 2023, as noted above, we had positive effects to our revenues compared to 2022 (with a lesser impact to costs) due to slightly higher domestic and export pricing of soda ash and higher sales volumes. For additional information, see our segment-by-segment analysis below.
The decrease in depreciation and depletion expense is primarily attributable to the acceleration of depreciation on certain of our asset retirement obligation assets during 2021 as a result of updates to the estimated timing and costs associated with certain of our non-core offshore natural gas assets.
This decrease is primarily attributable to an acceleration of depreciation on our asset retirement obligation assets as a result of updates to the estimated timing and costs associated with certain of our non-core offshore gas assets in 2022.
(2) Utilization rates are based on a 365 day year, as adjusted for planned downtime and drydocking. Marine Transportation Segment Margin for 2022 increased $31.6 million, or 92%, from 2021.
(2) Utilization rates are based on a 365 day year, as adjusted for planned downtime and drydocking. Marine Transportation Segment Margin for 2023 increased $44.2 million, or 67%, from 2022.
That issuance generated net proceeds of approximately $491 million, net of issuance costs 79 Table of Contents incurred.
That issuance generated net proceeds of approximately $491 million, net of issuance costs incurred.
Our Alkali Business mines and processes trona from which it produces natural soda ash, also known as sodium carbonate (Na 2 CO 3 ), a basic building block for a number of ubiquitous products, including flat glass, container glass, dry detergent and a variety of chemicals and other industrial products, and has been operating for over 70 years.
Our Alkali Business mines and processes trona from which it produces natural soda ash, also known as sodium carbonate (Na 2 CO 3 ), a basic building block for a number of ubiquitous products, including flat glass, container glass, dry detergent, lithium hydroxide and lithium carbonate (which are key inputs in the production of lithium batteries) and a variety of chemicals and other industrial products, and has been operating for approximately 75 years.
Applicable to all Non-GAAP Measures (in thousands) Differences in timing of cash receipts for certain contractual arrangements (1) $ 51,102 $ 15,482 Distributions from unrestricted subsidiaries not included in income (2) 32,000 70,000 Certain non-cash items: Unrealized losses (gains) on derivative transactions excluding fair value hedges, net of changes in inventory value (3) (5,717) 30,700 Loss on debt extinguishment (4) 794 1,627 Adjustment regarding equity investees (5) 21,199 26,207 Other (2,598) 207 Sub-total Select Items, net 96,780 144,223 II.
Applicable to all Non-GAAP Measures (in thousands) Differences in timing of cash receipts for certain contractual arrangements (1) $ 56,341 $ 51,102 Distributions from unrestricted subsidiaries not included in income (2) — 32,000 Certain non-cash items: Unrealized losses (gains) on derivative transactions excluding fair value hedges, net of changes in inventory value (3) 36,688 (5,717) Loss on debt extinguishment (4) 4,627 794 Adjustment regarding equity investees (5) 24,635 21,199 Other (23,200) (2,598) Sub-total Select Items, net 99,091 96,780 II.
These deposits also impact our operating cash flows as we borrow under our senior secured credit facility or use cash on hand to fund the deposits. Net cash flows provided by our operating activities were $334.4 million and $338.0 million for 2022 and 2021, respectively.
These deposits also impact our operating cash flows as we borrow under our senior secured credit facility or use cash on hand to fund the deposits. 84 Table of Contents Net cash flows provided by our operating activities were $521.1 million and $334.4 million for 2023 and 2022, respectively.
The King’s Quay FPS is life-of-lease dedicated to our 100% owned crude oil and natural gas lateral pipelines and further downstream to our 64% owned Poseidon and CHOPS crude oil systems and our 25.67% owned Nautilus natural gas system for ultimate delivery to shore.
The King’s Quay FPS supports volumes from the Khaleesi, Mormont, and Samurai field developments and is life of lease dedicated to our 100% owned crude oil and natural gas lateral pipelines and further downstream to our 64% owned Poseidon pipeline and 64% owned CHOPS pipeline and our 25.67% owned Nautilus natural gas system for ultimate delivery to shore.
Expenditures for capital assets to grow the partnership distribution will depend on our access to debt and equity capital. We will look for opportunities to acquire assets from other parties that meet our criteria for stable cash flows. We continue to pursue a long term growth strategy that may require significant capital.
Expenditures for capital assets to grow the partnership distribution will depend on our access to debt and equity capital. We will look for opportunities to acquire assets from other parties that meet our criteria for stable cash flows.
The actual physical volumes and settlement prices may vary due to uncertainties involved in these estimates which include levels of production at the wellhead, changes in market prices and other conditions beyond our control. • We have estimated cash requirements associated with our growth capital spending program.
The actual physical volumes and settlement prices may vary due to uncertainties involved in these estimates which include levels of production at the wellhead, changes in market prices and other conditions beyond our control. • We have estimated cash requirements associated with our growth capital spending program, which we anticipate to be approximately $275.0 million to $300.0 million to complete our ongoing projects over the next 18 months.
Impairment of Long-Lived Assets When events or changes in circumstances indicate that the carrying amount of a fixed asset, intangible asset, equity method investment, or right of use asset with finite lives may not be recoverable, we review our assets for impairment.
Recoverability of Long-Lived Assets When events or changes in circumstances indicate that the carrying value of our long lived assets, including fixed assets, finite lived intangible assets, and right of use asset may not be recoverable, we review our assets for impairment.
(4) 2022 includes the write-off of the unamortized issuance costs associated with the repurchase and extinguishment of certain of our senior unsecured notes during the year. 2021 includes the transaction costs and write-off of the unamortized issuance costs associated with the redemption of our remaining 2023 Notes.
(4) 2023 includes the write-off of the unamortized issuance costs and tender premium fees associated with the repurchase and extinguishment of our 2024 Notes and 2025 Notes. 2022 includes the write-off of the unamortized issuance costs associated with the repurchase and extinguishment of certain of our senior unsecured notes during the year.
During the years ended December 31, 2022 and 2021, we recorded unrealized losses of $18.6 million and $30.8 million, respectively, associated with fair value changes of the embedded derivative.
Treasury rates, and default and redemption probabilities and timing estimates, which involved management judgment. During the years ended December 31, 2022 and 2021, we recorded unrealized losses of $18.6 million and $30.8 million, respectively, associated with fair value changes of the embedded derivative.
Segment Margin was $770.1 million in 2022, an increase of $152.3 million as compared to 2021. We currently manage our businesses through four divisions that constitute our reportable segments - offshore pipeline transportation, sodium 66 Table of Contents minerals and sulfur services, onshore facilities and transportation and marine transportation.
Segment Margin was $827.1 million in 2023, an increase of $57.0 million as compared to 2022. We currently manage our businesses through four divisions that constitute our reportable segments - offshore pipeline transportation, soda and sulfur services, marine transportation and onshore facilities and transportation.
In addition, net income for the year ended December 31, 2022 included a gain of $40.0 million recorded in “Loss (gain) on sale of asset” on the Consolidated Statement of Operations, of which $8.0 million, or 20%, is attributable to our noncontrolling interest holder, related to the sale of our Independence Hub platform to a producer group in the Gulf of Mexico for gross proceeds of $40.0 million.
In addition, Net income for the year ended December 31, 2022 included a gain of $40.0 million recorded in “Gain on sale of asset” on the Consolidated Statement of Operations, of which $8.0 million, or 20%, is attributable to our noncontrolling interest holder, related to the sale of our Independence Hub platform to a producer group in the Gulf of Mexico for gross proceeds of $40.0 million. 76 Table of Contents A discussion of the operating results for the year ended December 31, 2022 compared with the year ended December 31, 2021 has been omitted from this Form 10-K.
Other Costs, Interest and Income Taxes General and administrative expenses Year Ended December 31, 2022 2021 (in thousands) General and administrative expenses not separately identified below: Corporate $ 47,306 $ 43,329 Segment 3,674 4,162 Long-term incentive based compensation plan expense 8,279 4,748 Third-party costs related to business development activities and growth projects 7,339 8,946 Total general and administrative expenses $ 66,598 $ 61,185 Total general and administrative expenses increased $5.4 million between 2022 and 2021.
Other Costs, Interest and Income Taxes General and administrative expenses Year Ended December 31, 2023 2022 (in thousands) General and administrative expenses not separately identified below: Corporate $ 48,407 $ 47,306 Segment 3,862 3,674 Long-term incentive based compensation plan expense 13,405 8,279 Third-party costs related to business development activities and growth projects 105 7,339 Total general and administrative expenses $ 65,779 $ 66,598 Total general and administrative expenses decreased $0.8 million between 2023 and 2022.
Refiners are the shippers of approximately 98% of the volumes transported on our onshore crude pipelines, and refiners contract for approximately 90% of the revenues from our marine inland barges, which are used primarily to transport intermediate refined products (not crude oil) between refining complexes.
Refiners are the shippers of approximately 98% of the volumes transported on our onshore crude pipelines, and refiners account for approximately 90% of the revenues from our marine transportation segment during 2023, where we primarily transport intermediate refined products (not crude oil) between refining complexes.
Operating results for our marine transportation segment were as follows: Year Ended December 31, 2022 2021 Revenues (in thousands): Inland freight revenues $ 105,583 $ 73,465 Offshore freight revenues 87,587 68,703 Other rebill revenues (1) 100,125 48,659 Total segment revenues $ 293,295 $ 190,827 Operating costs, excluding non-cash charges for long-term incentive compensation and other non-cash expenses (1) $ 227,086 $ 156,255 Segment Margin (in thousands) $ 66,209 $ 34,572 Fleet Utilization: (2) Inland Barge Utilization 98.6 % 81.9 % Offshore Barge Utilization 96.9 % 95.9 % (1) Under certain of our marine contracts, we “rebill” our customers for a portion of our operating costs.
Operating results for our marine transportation segment were as follows: Year Ended December 31, 2023 2022 Revenues (in thousands): Inland freight revenues $ 129,023 $ 105,583 Offshore freight revenues $ 113,990 $ 87,587 Other rebill revenues (1) $ 84,451 $ 100,125 Total segment revenues $ 327,464 $ 293,295 Operating costs, excluding non-cash charges for long-term incentive compensation and other non-cash expenses (1) $ 217,041 $ 227,086 Segment Margin (in thousands) $ 110,423 $ 66,209 Fleet Utilization: (2) Inland Barge Utilization 100.0 % 98.6 % Offshore Barge Utilization 98.1 % 96.9 % (1) Under certain of our marine contracts, we “rebill” our customers for a portion of our operating costs.
Additionally, we had higher capitalized interest during 2022 as a result of our increased capital expenditures associated with the GOP and our offshore growth capital construction projects, both of which are being funded internally. Income tax expense A portion of our operations are owned by wholly-owned corporate subsidiaries that are taxable as corporations.
This increase was partially offset by higher capitalized interest during 2023 as a result of our increased capital expenditures associated with the GOP and our offshore growth capital construction projects during the year. Income tax expense A portion of our operations are owned by wholly-owned corporate subsidiaries that are taxable as corporations.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

13 edited+6 added−2 removed5 unchanged
The following discussion addresses each category of risk: Commodity Price Risk We use derivative instruments to hedge price risk associated with the following commodities: • Crude Oil and Petroleum Products — We utilize crude oil and petroleum product derivatives to hedge commodity price risk inherent in our onshore facilities and transportation segment.
The following discussion addresses each category of risk: Commodity Price Risk We use derivative instruments to hedge price risk associated with the following commodities: • Crude Oil and Petroleum Products — We utilize crude oil and petroleum product derivatives to hedge commodity price risk, including crude oil, fuel oil and other petroleum products, inherent in our onshore facilities and transportation segment.
Given the competitive advantages associated with our naturally produced soda ash as 91 Table of Contents previously discussed (relative to that which is synthetically produced), we believe this somewhat mitigates market risk within our Alkali Business. Interest Rate Risk We are also exposed to market risks due to the floating interest rates on our senior secured credit facility.
Given the competitive advantages associated with our naturally produced soda ash as previously discussed (relative to that which is synthetically produced), we believe this somewhat mitigates market risk within our Alkali Business. Interest Rate Risk We are also exposed to market risks due to the floating interest rates on our senior secured credit facility.
Item 7a. Quantitative and Qualitative Disclosures About Market Risk We are exposed to various market risks, including (i) commodity price risk and (ii) interest rate risk. We use various derivative instruments primarily to manage commodity price risk.
Item 7a. Quantitative and Qualitative Disclosures About Market Risk We are exposed to various market risks, including (i) commodity price risk, (ii) fuel and freight price risk and (iii) interest rate risk. We use various derivative instruments primarily to manage commodity price risk and fuel and freight price risk.
A 10% change in the SOFR rate would have resulted in an immaterial impact to Net income for the year ended December 31, 2022.
A 10% change in the Term SOFR rate would have resulted in an immaterial impact to Net income for the year ended December 31, 2023.
Notional amounts in barrels or MMBtu, the weighted average contract price, total contract amount and total fair value amount in U.S. dollars of our open positions are presented below. Fair values were determined by using the notional amount in barrels or MMBtu multiplied by the December 31, 2022 quoted market prices.
Notional amounts in barrels, MMBtu, gallons (“Gal”), or metric tons (“MT”), the weighted average contract price, total contract amount and total fair value amount in U.S. dollars of our open positions are presented below. Fair values were determined by using the notional amount in barrels, MMBtu, gallons, or metric tons multiplied by the December 31, 2023 quoted market prices.
Obligations under our senior secured credit facility bear interest at the SOFR rate or alternate base rate (which approximates the prime rate), at our option, plus the applicable margin. We have not historically hedged our interest rates. On December 31, 2022, we had $205.4 million of debt outstanding under our senior secured credit facility.
Obligations under our senior secured credit facility bear interest at the Term SOFR rate or alternate base rate (which approximates the prime rate), at our option, plus the applicable margin. We have not historically hedged our interest rates. On December 31, 2023, we had $298.3 million of debt outstanding under our senior secured credit facility.
The accounting treatment for our commodity derivatives is discussed further in Note 18 to our Consolidated Financial Statements in Item 8. The table below presents information about our open commodity derivative contracts at December 31, 2022.
The accounting treatment for our derivatives is discussed further in Note 1 9 to our Consolidated Financial Statements in Item 8. 93 Table of Contents The table below presents information about our open derivative contracts at December 31, 2023.
Our objectives for these derivatives include hedging anticipated purchases of natural gas used by our Alkali business to generate heat and power for operations. We manage these exposures with various instruments including futures, swaps, and options. As of December 31, 2022 we had entered into derivative instruments that will settle between January 2023 and December 2023.
Our objectives for these derivatives include hedging anticipated purchases of natural gas used by our Alkali Business to generate heat and power for operations. We manage these exposures with a combination of commodity price swap contracts, futures and option contracts. As of December 31, 2023 we had entered into derivative instruments that will settle between January 2024 and December 2025.
As of December 31, 2022 we had entered into derivative instruments that will settle between January 2023 and March 2023. • Natural Gas — We utilize natural gas derivatives to hedge commodity price risk inherent in our sodium minerals and sulfur services segment.
As of December 31, 2023 we had entered into derivative instruments that will settle between January 2024 and April 2024. • Natural Gas — We utilize natural gas derivatives to hedge commodity price risk inherent in our Alkali Business.
Our objectives for these derivatives include hedging fixed price purchase and sales, crude inventories, and basis differentials. We manage these exposures with various instruments including futures, swaps, and options. Our risk management policies are designed to monitor our physical volumes, grades and delivery schedules to ensure our hedging activities address the market risks inherent in our gathering and marketing activities.
Our risk management policies are designed to monitor our physical volumes, grades and delivery schedules to ensure our hedging activities address the market risks inherent in our gathering and marketing activities.
See Note 11 and Note 18 to our Consolidated Financial Statements in Item 8 for further discussion of our Class A Convertible Preferred Units and embedded derivatives. Item 8. Financial Statements and Supplementary Data The information required hereunder is included in this report as set forth in the “Index to Consolidated Financial Statements.” Item 9.
See Note 1 2 and Note 1 9 to our Consolidated Financial Statements in Item 8 for further discussion of our Class A Convertible Preferred Units and embedded derivatives. 94 Table of Contents Item 8.
Unit of Measure for Volume Contract Volumes (in 000’s) Unit of Measure for Price Weighted Average Market Price Contract Value (in 000’s) Mark-to Market Change (in 000’s) Settlement Value (in 000’s) Futures and Swap Contracts Sell (Short) Contracts: Crude Oil Bbl 93 Bbl $ 78.31 $ 7,282 $ 197 $ 7,479 #6 Fuel Oil Bbl 25 Bbl $ 56.15 $ 1,404 $ 95 $ 1,499 Natural Gas MMBtu 1,480 MMBtu $ 5.27 $ 7,794 $ (829) $ 6,965 Buy (Long) Contracts: Crude Oil Bbl 90 Bbl $ 76.43 $ 6,878 $ 348 $ 7,226 Natural Gas Swaps MMBtu 9,765 MMBtu $ 0.64 $ 6,231 $ 32,151 $ 38,382 Natural Gas MMBtu 8,060 MMBtu $ 5.36 $ 43,185 $ (8,809) $ 34,376 Option Contracts Written Contracts: Natural Gas MMBtu 1,910 MMBtu $ 0.70 $ 1,340 $ 559 $ 1,899 Purchased Contracts: Natural Gas MMBtu 340 MMBtu $ 0.03 $ 9 $ (9) $ — We manage our risks of volatility in NaOH prices by indexing prices for the sale of NaHS to the market price for NaOH in most of our contracts.
Unit of Measure for Volume Contract Volumes (in 000’s) Unit of Measure for Price Weighted Average Market Price Contract Value (in 000’s) Mark-to Market Change (in 000’s) Settlement Value (in 000’s) Futures and Swap Contracts Sell (Short) Contracts: Crude Oil Bbl 242 Bbl $ 74.71 $ 18,080 $ (715) $ 17,365 Natural Gas MMBtu 2,100 MMBtu $ 2.54 $ 5,332 $ 137 $ 5,469 Buy (Long) Contracts: Crude Oil Bbl 30 Bbl $ 74.89 $ 2,247 $ (97) $ 2,150 Natural Gas Swaps MMBtu 13,230 MMBtu $ 0.56 $ 7,399 $ (1,826) $ 5,573 Natural Gas MMBtu 13,440 MMBtu $ 3.58 $ 48,080 $ (10,429) $ 37,651 Bunker Fuel MT 62 MT $ 53.00 $ 33,322 $ (155) $ 33,167 Option Contracts Written Contracts: Natural Gas MMBtu 60 MMBtu $ 0.75 $ 45 $ 5 $ 50 Purchased Contracts: Natural Gas MMBtu 30 MMBtu $ 0.02 $ 1 $ (1) $ — Diesel Gal 2,750 Gal $ 0.33 $ 912 $ (445) $ 467 We manage our risks of volatility in NaOH prices by indexing prices for the sale of NaHS to the market price for NaOH in most of our contracts.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.
Financial Statements and Supplementary Data The information required hereunder is included in this report as set forth in the “Index to Consolidated Financial Statements.” Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.
Removed
As noted above, on May 17, 2022, we entered into our Second Amendment and Consent to the credit agreement, which among other things, replaced our existing LIBOR rate based borrowings with the Term SOFR rate.
Added
Our objectives for these derivatives include hedging fixed price purchase and sales, crude inventories, and basis differentials. We manage these exposures with various instruments including exchange-traded futures, options and swap contracts.
Removed
The impact to our senior secured credit facility and related interest expense upon transition to SOFR did not have a material impact on our Consolidated Financial Statements for the year ended December 31, 2022.
Added
Fuel and Freight Price Risk • Forward Freight Hedges — ANSAC is exposed to fluctuations in freight rates for vessels used to transport soda ash to our international customers. We use exchange-traded or over-the-counter futures, swaps and options to hedge future freight rates for forecasted shipments.
Added
As of December 31, 2023 we did not have any open derivative positions related to vessel freight. • Bunker Fuel Hedges — ANSAC is exposed to fluctuations in the price of bunker fuel consumed by vessels used to transport soda ash to our international customers.
Added
We use exchange-traded or over-the-counter futures, swaps and options to hedge bunker fuel prices for forecasted shipments.
Added
As of December 31, 2023 we had entered into derivative instruments that will settle between January 2024 and December 2024. • Rail Fuel Surcharge Hedges — ANSAC enters into rail transport agreements that require us to pay rail fuel surcharges based on changes in the U.S. On-Highway Diesel Fuel Price published by the U.S. Department of Energy (“DOE”).
Added
We use exchange-traded or over-the-counter futures, swaps and options to hedge fluctuations in the fuel price. As of December 31, 2023 we had entered into derivative instruments that will settle between January 2024 and August 2024.

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