Genesis Energy H1 2016 Results Investor Presentation Dame Jenny Shipley – Chairman Albert Brantley – Chief Executive Andrew Donaldson – Chief Financial Officer 24 February 2016 Genesis Energy Limited 1 Disclaimer This presentation has been compiled by Genesis Energy Limited for information purposes only. This disclaimer applies to this document and the verbal and written comments of any person presenting it. Genesis Energy has taken reasonable care in compiling the information in this presentation. However, the information is supplied in summary form only (which is general in nature) and is therefore not necessarily complete nor does it purport to contain all information a prospective investor should consider when evaluating an investment. No representation is made as to the accuracy, completeness or reliability of the information. 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Where non-GAAP financial measures are used in this presentation, you should not consider these in isolation from, or as a substitute for, the information provided in the consolidated financial statements. Genesis Energy gives no warranty or representation as to its future financial performance or any future matter. Except as required by law or the NZX or ASX listing rules, Genesis Energy is not obliged to update this presentation after its release. This presentation does not constitute financial advice, financial product advice, legal or taxation advice. Further, it is not and should not be construed as an offer to sell or a solicitation of an offer to buy Genesis Energy securities and may not be relied upon in connection with any purchase of Genesis Energy securities. The information contained in this presentation should be considered in conjunction with the condensed interim financial statements, which are included in Genesis Energy’s interim report for the 6 month period ending 31 December 2015 and is available at: https://www.genesisenergy.co.nz/reports-and-presentations 24 February 2016 2 H1 2016 Highlights and Strategic Overview Dame Jenny Shipley Chairman 24 February 2016 genesis ENERGY 3 H1 2016 Highlights Six months of resilient operations • Improvement in electricity customers despite strong retail competition • Steady gas customers after increase in first three months of the year • Continued growth of the retail LPG book • Increases in thermal and renewable generation output despite a volatile wholesale electricity market • Reduction in Kupe contribution due to planned plant outage which reduced production levels • Careful management of the impact of significant changes in commodity prices (oil, LPG, methanol) • Continued focus on reducing operating costs 24 February 2016 4 H1 2016 Highlights Improvement of financial metrics • Key financial results in H1 2016 show improvement compared with H1 2015: • EBITDAF of $175.5m was up 2% on comparable period • Adjusted Net Debt of $863.7m was 5% lower than at 30 June 2015, and 10% lower than a year ago • Free cash flow of $114.2m up 25% versus same period last year • Interim dividend declared of 8.2 cps is up 2.5% on interim dividend from first half of last year • Continued to deliver consistent, reliable and attractive dividends even in periods of business cycle downturn • Backed by a portfolio of assets delivering resilient earnings 24 February 2016 5 Strategic Overview Company strategy is focused on five areas • The Customer’s Experience • Increasing value by delivering the right personalised experiences through differentiated brands, products and service • Portfolio Transition • Positioning the generation fleet and fuel portfolio to meet the changing New Zealand wholesale electricity market • Kupe • Proving up reserves, assessing options for increasing production capacity, and finalising the Phase II Field Development Plan • Digital Acceleration • Utilising digital tools to engage and add value to customers while reducing costs to deliver • New Ventures • Pursuing new business activities with a long term focus on adding revenues and delivering growth 24 February 2016 6 Positive Performance Total Shareholder Returns have been positive since listing Genesis Energy Share TSR Since IPO Genesis Energy TSR NZX50 TSR 70% 14 60% 12 10 50% 40% FY2014 Final dividend 6.6cps FY2015 Interim dividend 8.0cps FY2015 Final dividend 8.0cps 8 30% 6 20% 4 10% 2 0% 0 -10% Dividends Cents Per Share Total Shareholder Return Since IPO Dividends per share -2 24 February 2016 7 H1 2016 Operational Performance Albert Brantley Chief Executive 24 February 2016 genesis ENERGY 8 Customer Experience Growth in Customer Experience earnings Customer Experience Contribution to EBITDAF • Despite fierce competition in the New Zealand retail electricity and gas markets, Customer Experience EBITDAF increased • Steady improvement in EBITDAF contribution over last four years • EBITDAF helped by: • Lower electricity purchase costs (LWAP) • Deferral of acquisition costs and retail incentives • Changes in gas and electricity transfer pricing EBITDAF $m Customer Experience EBITDAF Percent of Group EBITDAF $60m 35% $50m 30% 25% $40m 20% $30m 15% $20m 10% $10m 5% $0m 0% H1 2012 H1 2013 H1 2014 H1 2015 H1 2016 6 m onths to 31 Decem ber 2015 Electricity Customers Gas Customers Total Custom ers ex LPG LPG Customers Total Custom er Acc ounts 522,586 106,809 6 29 ,39 5 14,326 6 43,721 517,492 108,217 6 25,709 13,081 6 38 ,79 0 1% -1% 1% 10% 1% 368,500 19.8% 370,734 20.3% -1% -2% 2,394 621 3,015 2,373 453 2,8 25 1% 37% 7% 2.6 1.7 4.2 2.5 1.5 4.0 3% 11% 6% 2,202 1,944 13% $ 6 1.9 0 $ 72.45 - 15% 100.2% 57.0 101.0% 44.2 -1% 29 % Total Advanced Meters Installed 12 months annualised churn rate Mass Market Electricity Sales (GWh) TOU Electricity Sales (GWh) Reta il Electricity Sa les (GWh) Mass Market Gas Sales (PJ) TOU Gas Sales (PJ) Reta il Ga s Sales (PJ) Retail LPG Sales (tonnes) Avera ge Retail Electric ity Purcha se Pric e - ($ /MWh) LWAP/GWAP ratio* Custom er Experienc e EBITDAF ($ m ) 2014 % change 24 February 2016 9 Customer Experience Electricity customers and market share Electricity Customers & Market Share Customer Numbers Share of Total Market (RHS) 550,000 27.0% 540,000 535,000 26.5% 26.0% 525,000 520,000 25.5% 515,000 510,000 Market Share 530,000 25.0% 505,000 24.5% Q2 Q4 Q1 15/16 Q3 Q2 Q4 Q1 14/15 Q3 Q2 Q4 Q1 13/14 Q3 Q2 Q4 Q1 12/13 Q3 Q2 Q1 11/12 500,000 Source: Company data, Electricity Authority Electricity Sales Volumes (GWh) Quarterly TOU Sales Volumes Quarterly Mass Market Sales Volumes Rolling 12 months sales volumes (RHS) 1800 6000 1600 5000 1400 4000 1000 3000 800 600 GWh 1200 2000 400 1000 200 Q2 Q1 15/16 Q4 Q3 Q2 Q1 14/15 Q4 Q3 Q2 Q1 13/14 Q4 Q3 Q2 Q4 Q1 12/13 Q3 0 Q2 0 Q1 11/12 GWh Customers by ICP • Electricity customer numbers have increased 1.0% compared to H1 2015, and 1.2% since recent downturn in Q3 2015 • Reflects strength in Energy Online which has delivered 14 consecutive months of growth • Stabilisation of Genesis Energy brand through focus on pricing, incentives and acquisition strategy • 12 month rolling switching rate of 19.8% now 0.7% points lower than that of broader electricity market • Improving momentum in electricity sale volumes driven by Time of Use (TOU) improvement and increased demand per customer in winter months 27.5% 545,000 24 February 2016 10 Customer Experience Natural Gas Customers and Market Share Q2 Q4 Q1 15/16 Q3 Q2 36% Q4 37% 100,000 Q1 14/15 102,000 Q3 38% Q2 39% 104,000 Q4 106,000 Q1 13/14 40% Q3 41% 108,000 Q2 42% 110,000 Q4 112,000 Q1 12/13 43% Q3 44% 114,000 Q2 116,000 Q1 11/12 Source: Company data, Gas Industry Co Retail Gas Sales Volumes (PJ) Quarterly TOU Sales Volumes Quarterly Mass Market Sales Volumes Rolling 12 months sales volumes (RHS) 3.0 8.0 7.0 2.5 6.0 2.0 5.0 1.5 4.0 PJ Customers by ICP Share of Total Market (RHS) 45% PJ • Reticulated gas customer base has been lower on back of competition for dual fuel customers • After growth in Q1, Genesis Energy brand losses have reduced group ICP count in Q2, while Energy Online continues to grow • New, flat rate gas plans gaining traction and are a good acquirer of dual fuel customers • Gas sales volumes also benefitted from cold winter months in Q1, plus TOU momentum Customer Numbers 118,000 Market Share Gas customers remaining steady 3.0 1.0 2.0 0.5 1.0 Q2 Q1 15/16 Q4 Q3 Q2 Q1 14/15 Q4 Q3 Q2 Q1 13/14 Q4 Q3 Q2 Q1 12/13 Q4 Q3 Q2 0.0 Q1 11/12 0.0 24 February 2016 11 Fuel Management Fuel remains an important consideration 6 m onths to 31 Decem ber 2015 2014 % change Wholesale Gas Sales (PJ) Total Gas Purchases (PJ) Gas Used in Internal Generation. (PJ) Wholesale Coal Sales (PJ) Coal Purchases (PJ) Coal Used in Internal Generation (PJ) 8.7 24.3 11.3 0.5 5.4 5.1 10.7 24.2 9.6 0.2 5.4 7.2 -19% 1% 18% 186% 0% -29% Coal Stockpile (kilotonnes) 600 870 -31% Huntly Coal Stockpile and Coal Used in Generation 1800 1600 Coal used in generation (PJ) 14 12 1400 1200 10 1000 8 800 6 600 4 400 200 0 Coal Used in Generation (PJ) Coal stockpile (ktonnes) Coal Stockpile (000 tonnes) • Reductions in wholesale gas sales offset by gas used in thermal generation • Slide in methanol prices negatively impacted on prices received for gas sold to Methanex, but contracted gas volumes are decreasing • Last coal delivered to Huntly on 25 October 2016 • Use of coal in Huntly Rankine units now reducing coal stockpile • Currently at 600kt, 31% lower than a year ago • Careful management of stockpile will be required coming into key dry summer months 2 0 24 February 2016 12 Generation Total generation increased 3% Gas (GWh) Coal (GWh) Total Therm al (GWh) Hydro (GWh) Wind (GWh) Total Renewable (GWh) Total Generation (GWh) Average Price Received ($/MWh) 2015 for Generation 2014 % change 1,476 458 1,9 33 1,431 13 1,444 3,377 1,277 641 1,9 18 1,351 11 1,36 3 3,28 0 16% -29% 1% 6% 16% 6% 3% $61.78 $71.75 -14% First Half Year Generation Profile 4500 4000 3500 Hau Nui Wind 3000 GWh • Despite Unit 5 outage for 12 days in November 2015, gas generation output was up 16% on H1 2015: • Due to a weaker comparable period and higher spot prices in November and December 2015 • Coal generation down 29% as Rankine units were used sparsely in August and September 2015 when wholesale prices were generally lower • Timing of hydro inflows into each of three hydro schemes offset impact of lower hydro storage, so renewable generation up 6% year on year • GWAP was down 14% but pockets of firm pricing as thermal capacity tightened 6 m onths to 31 Decem ber Tekapo A & B 2500 Waikaremoana 2000 Tongariro Huntly Unit 6 1500 Huntly Unit 5 1000 Huntly Rankine Units 500 0 H1 2011 H1 2012 H1 2013 H1 2014 H1 2015 H1 2016 24 February 2016 13 Kupe 2015 2014 % c ha nge Gas Sales (PJ) Oil Production (kbbl) Oil Sales (kbbl) LPG Sales (kilotonnes) Oil a nd Ga s EBITDAF 3.4 207.3 158.6 14.1 39 .4 3.5 238.9 233.4 15.2 46 .9 -1% -13% -32% -7% - 16 % Kupe Oil Production Volumes (kbbl) Rolling 12 months production volumes (RHS) H2 2016 FY 2017 Oil hedging Percentage Rate hedged (US$/bbl) 85% $81.00 49% $67.00 Q2 Q4 Q1 15/16 Q3 Q2 Q4 0 Q1 14/15 60 0 Q3 120 20 Q2 180 40 Q4 240 60 Q1 13/14 300 80 Q3 360 100 Q2 420 120 Q4 480 140 Q1 12/13 540 160 Q3 600 180 Q2 200 thousand of barrels Quarterly Production Volumes Q1 11/12 • Production at Kupe processing facility down materially on H1 2015 due to 26 day planned maintenance outage • Oil production -13% and timing of oil shipments meant oil sales down 32% • Likely to be some acceleration of gas in H2 2016 due to favourable pricing – on track for another year of 23 to 24PJ of gas • Hedging policy has helped contain impact of record lower oil prices, with 92% of volumes at US$86.10/bbl • In December 2015 announced upgrade to Kupe developed reserves • Phase II Development Plan expected to be finalised in Q4 FY2016, and will determine timing and magnitude of capex and confirm undeveloped reserves Kupe: 6 m onths to 31 Dec em ber thousand of barrels Managing the fall in oil and LPG prices FX hedging of oil sales Percentage Rate hedged (NZD/USD) 62% 70.0c 60% 64.4c 24 February 2016 14 Digital Transformation Utilising digital tools to engage customers and add value to them while reducing costs to deliver • Current work is focused on digital infrastructure and human resources in order to build a platform that positions the Company for future growth • Such as selecting and partnering with external vendors to provide the means to create new customer-orientated services in our Customer Excellence Centre • Also development of ‘apps’ to support customer self service • Some migration of processes and data storage to “Cloud” • Expectation is that this will deliver tangible reductions in capex and costs to deliver 24 February 2016 15 New Ventures Pursuing new business activities with a long term focus on adding revenues and delivering growth • New Ventures team formed to act as ‘incubator’ of new products and services Solar • Residential power purchase pilot programme now two years in operation with significant insights and learnings captured • Successfully piloted commercial solar Power Purchase Agreements (PPA) with 186kW of installed capacity • Tactical direct solar sales promotion underway to gauge customer interest in solar and establish supporting operational infrastructure Battery storage • Beta trial participant for global in-home storage provider • Additional storage options under consideration Energy services • Exploring demand for additional services that supplement current offering • Leverage partnerships with other market leaders 24 February 2016 16 Health and Safety The safety of our employees and workplace remains a priority Genesis Energy Safety Statistics Sep-15 Nov-15 Jul-15 Mar-15 May-15 Jan-15 Sep-14 Nov-14 Jul-14 Mar-14 May-14 Jan-14 Nov-13 Jul-13 Sep-13 May-13 Jan-13 Mar-13 Nov-12 Jul-12 Sep-12 May-12 Jan-12 Mar-12 Nov-11 Jul-11 Sep-11 Number of Incidents Rolling 12 month TRIFR • Genesis Energy is committed Medically Treated Injuries Lost Time Injuries 12 Month Rolling Total Recordable Incident Frequency Rate (RHS) to a zero harm work 35 5 environment 30 4 • 1 lost time injury and 3 25 3 medically treated incidents in 20 H1 2016 (versus 1 lost time 15 2 injury in H1 2015) 10 1 • Maintenance work during 5 major plant outages 0 0 completed without any Source: Genesis Energy, TRIFR is measured by number of incidents per million man hours worked serious incidents • TRIFR* of 4.28 at 31 December 2015 was up versus 0.54 at 31 December 2014 • Good improvement over last 5 years, but vigilance still needed *Total Recordable Injury Frequency Rate per million man hours 24 February 2016 17 H1 2016 Financial Performance Andrew Donaldson Chief Financial Officer 24 February 2016 genesis ENERGY 18 Results Summary Genesis Energy 6 Monthly EBITDAF • EBITDAF consistency highlights portfolio resilience to variable operating conditions • Total revenue down 2% due to reduced GWAP, lower gas pricing and planned Kupe outages • EBITDAF +2% to $175.5m due to lower electricity and gas purchase costs, $m offsetting lower Kupe EBITDAF Revenue operating expenses • Significant negative fair value swing due Total EBITDAF* depletion & amortisation to hedge contracts and swaption led to Depreciation Impairment Fair value change (gains)/losses 47% decline in NPAT to $35.9m Other (gains)/losses Earnings before interest a nd tax • Strength of operating earnings and Interest Tax reduction in Stay in Business capex Net profit after tax highlighted in 25% increase in Free Cash Earnings per share (cents per share) Stay in business capital expenditure Flow (FCF) Free cas h flow Dividends declared • Good dividend coverage and reduction in Dividends per share (cents per share) Dividends declared as a % of FCF Net Debt Net debt 250 200 EBITDAF consistency 150 $m H1 H2 100 Oneoff items 50 0 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 H1 2016 1041.6 866.1 175.5 73.1 0.0 21.0 (0.1) 8 1.5 31.4 14.2 35.9 3.6 H1 2015 % cha nge 106 7.8 895.0 172.8 75.7 3.3 (34.6) (0.9) 129 .3 33.9 27.2 6 8 .2 6.8 -2% -3% 2% -3% -100% -161% -89% -37% -7% -48% -47% -47% 15.7 20.2 -22% 114.2 91.5 25% 82.0 80.0 3% 8.2 8.0 3% 72% 87% -18% 901.3 9 59 .0 -6% * Earnings before net finance expense, tax, depreciation, amortisation, fair value changes and other gains and losses 24 February 2016 19 Segmental Detail Customer Experience EBITDAF up despite increased competition • Increase in Customer Experience EBITDAF • Higher customer numbers in competitive environment have driven increased acquisition costs and retail incentives • Offset by operating costs and Cost to Serve reductions • Change in accounting treatment of retail incentive and acquisition costs effectively contributed $7.5m • Changes in gas and electricity transfer pricing removed circa $4m of costs EBITDAF bridge from H1 2015 to H1 2016 $200m $173m $13m $3m $8m $0m $176m Customer Experience Energy Management Oil & Gas Corporate H1 2016 EBITDAF $150m $100m $50m $0m H1 2015 EBITDAF $m Revenue Energy Management EBITDAF Customer Experience EBITDAF Oil and Gas EBITDAF Corporate Overheads H1 2016 1,041.6 98.0 57.0 39.4 -18.9 H1 2015 % cha nge 1,067.8 100.7 44.2 46.9 -19.0 • Energy Management EBITDAF marginally lower due to higher gas 175.5 172.8 transmission costs, lower wholesale gas Tota l EBITDAF sales prices and lower transfer prices • Oil and Gas EBITDAF impacted by lower production and international oil prices • Corporate overhead costs marginally lower -2% -3% 29% -16% -1% 2% 24 February 2016 20 Balance Sheet Net debt reducing and credit metrics remain strong • Improvement in earnings and cashflow has helped to reduce Net Debt and gearing • After adjusting for USPP movements Net Debt of $864m is 5% lower than 30 June 2015 and 10% lower than a year ago • Gearing now at 32.8% • Key credit rating metric of Net Debt to EBITDAF currently at 2.5x which is at bottom end of range to maintain BBB+ rating • No motivation to seek an upgraded credit rating • Currently assessing best use of future cashflows and funding headroom • Strict return thresholds to be met for any use of funds As a t ($ m ) 31 Dec 2015 30 Jun % c hange 2015 Cash and cash equivalents Other current assets Non-current assets Total assets 37.5 298.2 3,097.5 3,433.2 21.0 325.5 3,181.5 3,528.0 79% -8% -3% -3% Total borrowings Other liabilities Total equity 938.8 724.8 1,769.6 958.2 744.4 1,825.4 -2% -3% -3% 8 6 4.3 32.8% 6.6 2.5 $1.64 9 05.1 33.1% 6.1 2.6 $1.70 - 5% -1% 8% -6% -3% Adjusted Net debt (1 ) Gearing EBITDAF interest cover Net debt: EBITDAF (2 ) NTA per share (1) H1 2016 net debt of $901.3m has been a djus ted for $37m of forei gn currency tra ns l a ti on and fa i r val ue movements rel ated to USD denomi nated borrowi ngs whi ch have been ful l y hedged wi th cros s currency i nteres t rate s waps . (2) H1 2016 EBITDAF a nnua li s ed for cal cul a ti on As a t ($ m ) Total Debt Cash and cash equivalents Hea dline Net Debt USPP FX and FV adjustments Adjusted Net Debt Headling Gearing Adjusted Gearing 31 Dec 2015 938.8 37.5 9 01.3 -37.0 8 6 4.3 33.7% 32.8% 30 Jun % c ha nge 2015 958.2 -2% 21.0 79% 9 37.2 - 4% -32.1 15% 9 05.1 - 5% 33.9% 33.1% -1% -1% 24 February 2016 21 Cashflow and Dividends Cashflow generation improvement • Operating cashflows higher primarily due to improvement in working capital given lower coal stockpile • Investing cash outflows lower due to 22% reduction in stay in business capex • Timing and magnitude of projects affect H1 2016 capex • Expect stay in business capex for FY2016 of $30m to $40m versus $43.6m in FY2015 • FCF increased 25% to $114.2m • Interim dividend declared of $82m or 8.2cps • Represents a 72% payout as a proportion of FCF • Dividend record date of 1 April 2016, payment date 15 April 2016 • 80% imputed $m H1 2016 H1 2015 % change Net operating cashflow Net investing cashflow Net financing cashflow Net increa se (dec rease) in cas h 162.5 -13.0 -133.0 16 .5 136.2 -25.6 -103.5 7.1 19% -49% 29% 132% Stay in business capex Total c apex Free ca sh flow 15.7 14.9 114.2 20.2 22.7 9 1.5 -22% -34% 25% Dividends Declared and Free Cash Flow Dividends Free Cash Flow Payout as % of FCF (RHS) $120m $114m 100% $106m $100m 80% $92m $83m $79m $80m $64m $80m $80m $82m 60% $66m $60m 40% $40m 20% $20m $0m 0% H1 2014 H2 2014 H1 2015 H2 2015 H1 2016 24 February 2016 22 H1 2016 Outlook Statement Dame Jenny Shipley Chairman 24 February 2016 genesis ENERGY 23 Genesis Energy Overview Outlook • In the face of dynamic retail and wholesale electricity and gas markets, plus softer commodity prices, Genesis Energy continues to deliver consistent results • There will be opportunities to derive more value from the Company’s current portfolio if further tightening in the wholesale electricity market occurs, and the Company continues to reduce operating costs and capital expenditure Outlook • Retail electricity and gas competitive tensions persist while wholesale electricity prices look to be firming in the near term, and the impact of low oil prices in H2 2016 will be mitigated by hedging in place • FY2016 EBITDAF expected to be similar to that reported in FY2015 • This includes the benefit of changes in the accounting treatment of customer incentives and acquisition costs • The final dividend declared in FY2016 and the level of imputation is expected to equal the dividend declared for H1 2016 24 February 2016 24 APPENDIX 24 February 2016 genesis ENERGY 25 Reconciliation of EBITDAF to NPAT • • • • EBITDAF is a non-GAAP item but is used as a key metric by Management to monitor performance at a business segment and Group level Genesis Energy believes that reporting EBITDAF assists stakeholders and investors in understanding the Company’s operational performance In H1 2016 EBITDAF of $175.5m was up 2% on H1 2015 $m EBITDAF H1 2016 H1 2015 % c hange 175.5 172.8 73.1 0.0 21.0 -0.1 75.7 3.3 -34.6 -0.9 -3% -100% -161% -89% 8 1.5 129 .3 -37% Finance revenue Finance expense Profit before inc om e ta x 1.4 -32.8 50.1 0.4 -34.3 9 5.4 250% -4% -47% Income tax expense Net profit a fter ta x -14.2 35.9 -27.2 6 8 .2 -48% -47% Depreciation, depletion and amortisation Impairment of non-current assets Change in fair value of financial instruments Other gains (losses) Profit before net fina nc e expens e and inc om e tax 2% H1 2016 Net Profit After Tax of $35.9m was 47% lower than in H1 2015 24 February 2016 26 Reconciliation of EBITDAF to NPAT • Free Cash Flow (FCF) is a key metric showing the ability to pay cash dividends • Calculated using EBITDAF, finance expense, tax paid, and stay in business capital expenditure • In H1 2016 FCF of $114.2m was up 25% on H1 2015 mainly due to decrease in stay in business capital expenditure and lower tax expense $m EBITDAF Less net finance expense Less income tax expense Less stay in business capex Free c as h flow H1 2016 175.5 31.4 14.2 15.7 114.2 H1 2015 % c ha nge 172.8 33.9 27.2 20.2 9 1.5 2% -7% -48% -22% 25% 24 February 2016 27 Debt Profile • Recent restructuring of revolving credit facilities has led to reduced finance expenses Genesis Energy Debt Profile $400 Capital Bonds were modified in July 2013: • Amount reduced from $275 million to $200 million • Coupon reduced from 8.50% to 6.19% • US$150 million (NZ$193 million) raised in first USPP in October 2014 at an average coupon of 3.67% • Average maturity tenor is 8.0 years • $350m of revolving cash facilities were undrawn at 31 December 2015 $350 $300 $250 $m • $200 $150 $100 $50 $0 FY FY FY FY FY FY FY FY FY FY FY FY 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Retail Bonds Wholesale Domestic Revolving Credit Capital Bonds FY 2042 USPP 24 February 2016 28 Net Debt to EBITDAF ratio • • Net Debt to EBITDAF ratio is the key metric focused on by credit ratings agencies, including Standard and Poors (S&P) In order to maintain a BBB+ rating the target range for the EBITDAF ratio is 2.5 to 2.8 Note that S&P calculation of Net Debt/EBITDAF includes a number of adjustments to reported numbers e.g. USPP foreign currency translation Genesis Energy Net Debt to EBITDAF 3.5 Net Debt to EBITDAF ratio • 3.0 Target range 2.5 2.0 1.5 1.0 0.5 0.0 H1 2014 H2 2014 H1 2015* H2 2015* H1 2016* * Net Debt adjusted for USPP FX and FV adjustments 24 February 2016 29 Kupe Reserves • On 9 December 2015 Genesis Energy announced an increase in Kupe’s developed reserves • Proved plus Probable developed reserves of the field have increased by approximately 33% from 27.7m barrels of oil equivalent (BoE) to 36.9m BoE. • Genesis Energy’s share (31%) of Proved plus Probable developed reserves has increased from 8.6m BoE to 11.4 m BoE. Genesis Energy Share Natural Gas (PJ) LPG (thousands of tonnes) Condensate/Light Oil (millions of barrels) Energy Equivalent (millions BoE) Reassessed Developed Reserves Developed Reserves Developed Reserves (Proved plus (Proved plus (Proved plus Probable) Probable) Probable) as at 30 Jun 2015 Q3 2015 Production as at 30 Sep 2015 as at 30 Sep 2015 38.1 2.1 36 47.7 change +11.7 % change +32.6% 165 8.5 156.5 199.4 +42.9 +27.4% 1.6 0.2 1.4 2 +0.6 +42.1% 9.1 0.5 8.6 11.4 +2.9 +33.4% 24 February 2016 30 Thank you