Included in Management's Discussion and Analysis are the following sections:

· Overview

· Available Cash before Reserves

· Results of Operations

· Liquidity and Capital Resources

· Commitments and Off-Balance Sheet Arrangements

· New Accounting Pronouncements

In the discussions that follow, we will focus on two measures that we use to manage the business and to review the results of our operations. Those two measures are segment margin and Available Cash before Reserves. During the fourth quarter of 2008, we revised the manner in which we internally evaluate our segment performance. As a result, we changed our definition of segment margin to include within segment margin all costs that are directly associated with a business segment. Segment margin now includes costs such as general and administrative expenses that are directly incurred by a business segment. Segment margin also includes all payments received under direct financing leases. In order to improve comparability between periods, we exclude from segment margin the non-cash effects of our stock-based compensation plans which are impacted by changes in the market price for our common units. Previous periods have been retrospectively revised to conform to this segment presentation. We now define segment margin as revenues less cost of sales, operating expenses (excluding non-cash charges, such as depreciation and amortization), and segment general and administrative expenses, plus our equity in distributable cash generated by our joint ventures. In addition, our segment margin definition excludes the non-cash effects of our stock-based compensation plans, and includes the non-income portion of payments received under direct financing leases. Our chief operating decision maker (our Chief Executive Officer) evaluates segment performance based on a variety of measures including segment margin, segment volumes where relevant, and maintenance capital investment. A reconciliation of segment margin to income from before income taxes is included in our segment disclosures in Note 10 to the consolidated financial statements.

Available Cash before Reserves (a non-GAAP measure) is net income as adjusted for specific items, the most significant of which are the addition of non-cash expenses (such as depreciation), the substitution of cash generated by our joint ventures in lieu of our equity income attributable to such joint ventures, the elimination of gains and losses on asset sales (except those from the sale of surplus assets) and the subtraction of maintenance capital expenditures, which are expenditures that are necessary to sustain existing (but not to provide new sources of) cash flows. For additional information on Available Cash before Reserves and a reconciliation of this measure to cash flows from operations, see "Liquidity and Capital Resources - Non-GAAP Reconciliation" below.

Overview

In the first quarter of 2009, we reported net income of $5.3 million, or $0.16 per common unit. Non-cash expense related to our senior executive compensation arrangements totaling $2.1 million reduced net income during the first quarter. See additional discussion of our senior executive compensation expense in "Results of Operations - Other Costs, Interest and Income Taxes" below.

During the first quarter of 2009, we generated $21.3 million of Available Cash before Reserves, and we will distribute $14.7 million to holders of our common units and general partner for the first quarter. During the first quarter of 2009, cash provided by operating activities was $3.2 million.

Segment margin for most of our segments increased in the first quarter 2009 as compared to the first quarter of 2008. A significant portion of the increase was attributable to acquisitions during 2008, specifically the two drop down transactions with Denbury in May 2008 and the acquisition of our interest in DG Marine in July 2008.

On April 7, 2009, we announced that our distribution to our common unitholders relative to the first quarter of 2009 will be $0.3375 per unit (to be paid in May 2009). This distribution amount represents a 12.5% increase from our distribution of $0.30 per unit for the first quarter of 2008. During the first quarter of 2009, we paid a distribution of $0.33 per unit related to the fourth quarter of 2008.

The current economic crisis has restricted the availability of credit and access to capital in our business environment. Despite efforts by U.S. Treasury and banking regulators to provide liquidity to the financial sector, capital markets continue to remain constrained. While we anticipate that the challenging economic environment will continue for the foreseeable future, we believe that our current cash balances, future internally-generated funds and funds available under our credit facility will provide sufficient resources to meet our current working capital needs. The financial performance of our existing businesses, $177.0 million in cash and existing debt commitments and no need, other than opportunistically, to access the capital markets, may allow us to take advantage of acquisition and/or growth opportunities that may develop.

Our ability to fund large new projects or make large acquisitions in the near term may be limited by the current conditions in the credit and equity markets which may impact our ability to issue new debt or equity financing. We may consider other arrangements to fund large growth projects and acquisitions such as private equity and joint venture arrangements.

Available Cash before Reserves

Available Cash before Reserves was as follows (in thousands):

                                                                     Three Months Ended
                                                             March 31, 2009      March 31, 2008
Net income attributable to Genesis Energy, L.P.             $          5,290     $         1,645
Depreciation and amortization                                         15,419              16,789
Cash received from direct financing leases not included
in income                                                                907                 147
Cash effects of sales of certain assets                                  405                 245
Effects of available cash generated by equity method
investees not included in income                                      (1,289 )               423
Cash effects of stock appreciation rights plan                            (4 )              (158 )
Non-cash tax expense                                                     460              (1,626 )
Earnings of DG Marine in excess of distributable cash                 (1,970 )                 -
Other non-cash items, net                                              3,072                (902 )
Maintenance capital expenditures                                        (948 )              (776 )
Available Cash before Reserves                              $         21,342     $        15,787

We have reconciled Available Cash before Reserves (a non-GAAP measure) to cash flow from operating activities (the GAAP measure) for the three months ended March 31, 2009 in "Liquidity and Capital Resources - Non-GAAP Reconciliation" below. For the three months ended March 31, 2009 and 2008, cash flows provided by operating activities were $3.2 million and 17.4 million, respectively.

Results of Operations

The contribution of each of our segments to total segment margin in the first
quarters of 2009 and 2008 was as follows:

                             Three Months Ended March 31,
                               2009                 2008
                                    (in thousands)
Pipeline transportation   $       10,225       $        4,661
Refinery services                 12,759               12,430
Supply and logistics               5,956                4,061
Industrial gases                   3,023                3,199
Total segment margin      $       31,963       $       24,351

Pipeline Transportation Segment

Operating results for our pipeline transportation segment were as follows:

                           Three Months Ended March 31
Pipeline System             2009                 2008

Mississippi-Bbls/day            25,364              22,854
Jay - Bbls/day                   9,433              14,616
Texas - Bbls/day                29,827              28,562
Free State - Mcf/day           171,293                   -




                                          Three Months Ended March 31,
                                            2009                 2008
                                                 (in thousands)
Crude oil tariffs and revenues from
direct financing leases of crude oil
pipelines                              $        3,954       $        4,126
Non-income payments under direct
financing leases                                  907                  147
Sales of crude oil pipeline loss
allowance volumes                                 799                2,459
CO2 tariffs and revenues from direct
financing leases of CO2 pipelines               6,744                   78
Tank rental reimbursements and other
miscellaneous revenues                            178                  267
Revenues from natural gas tariffs
and sales                                         733                1,355
Natural gas purchases                            (654 )             (1,286 )
Pipeline operating costs, excluding
non-cash charges for our
equity-based compensation plans and
other non-cash charges                         (2,436 )             (2,485 )
Segment margin                         $       10,225       $        4,661

Three Months Ended March 31, 2009 Compared with Three Months Ended March 31, 2008

Pipeline segment margin for the first quarter of 2009 increased $5.6 million as compared to the first quarter of 2008. The significant component of this change is an increase in revenues from CO2 financing leases and tariffs of $6.7 million and a related increase in non-income payments from the same financing leases of $0.8 million. Reducing the impact of this increase were decreases in revenues from sales of pipeline loss allowance volumes of $1.7 million and revenues from crude oil tariffs and related sources of $0.2 million.

Tariff and direct financing lease revenues from our crude oil pipelines decreased $0.2 million primarily due to volume decreases on our Jay pipeline system totaling 5,183 barrels per day as compared to the first quarter of 2008. The decreased volumes were principally due to a producer connected to our Jay System shutting in production in the first quarter of 2009. Volumes on the Mississippi and Texas systems increased in the 2009 first quarter slightly offsetting the impact on tariff revenue of the Jay System decline.

The decline in market prices for crude oil reduced pipeline loss allowance revenues. Average crude oil market prices decreased approximately $54 per barrel between the two quarters. Additionally, pipeline loss allowance volumes combined with net volumetric measurement gains were 10,700 barrels greater in the first quarter of 2008 than the first quarter of 2009. The combination of these two declines resulted in a decrease of $1.7 million in pipeline loss allowance revenues.

Revenues and payments related to CO2 pipelines increased by a total of $7.5 million between the two quarters, with $5.2 million attributable to the NEJD pipeline and $2.3 million to the Free State pipeline. The average volume transported on the Free State pipeline for the first quarter of 2009 was 171 MMcf per day, with the transportation fees and the minimum payments totaling $2.0 million and $0.3 million, respectively.

Refinery Services Segment

Segment margin from our refinery services for the first quarter of 2009 was $12.8 million. Segment margin from our refinery services for the same period in 2008 was $12.4 million. The increase in segment margin is primarily related to the decline in sales volumes of NaHS being substantially offset by increased sales of caustic soda and by cost management and logistics optimization. The current macroeconomic conditions have negatively impacted the short-term demand for NaHS, primarily in mining and industrial activities. To help mitigate the financial effects of the decline in NaHS sales, we have been successful in selling caustic soda not needed in our operations and using our existing logistical assets to support such marketing to third parties. The key cost components of the provision of the refinery sulfur removal service continued to be volatile in the first quarter of 2009. Market prices for caustic soda, as published by the Chemical Market Associates, Inc. (CMAI) ranged from $400 to $500 per dry short ton (DST) during the first quarter of 2008 compared to a range of $580 to $750 per DST in the first quarter of 2009. Our freight costs during the first quarter periods fluctuated with freight demand and fuel prices, both of which were significantly higher in the 2008 period. We believe that we were successful in mitigating some of the impact on segment margin of the volatility of these costs through our management of caustic acquisition and freight costs and by indexing our sales prices for NaHS to caustic market prices.

The table below reflects information about NaHS sales for first quarters of 2009 and 2008 volumes and sales prices.

                                                            Three Months      Three Months
                                                                Ended             Ended
                                                              March 31,         March 31,
                                                                2009              2008

NaHS Sales
Dry Short Tons (DST)                                               26,229            41,742
Average sales price per DST, net of delivery costs          $       1,069     $         660

NaHS sales prices per DST increased as we adjusted these prices throughout 2008 for fluctuations in the cost components of our services. As discussed above, market prices for caustic were volatile in both periods. Additionally, freight costs for delivering NaHS to our customers fluctuated in both periods in a manner similar to the freight costs associated with our caustic supply as discussed above. We were generally successful in increasing our sales prices for NaHS to compensate for these cost fluctuations by indexing approximately 60% of our NaHS sales volumes to market prices for caustic soda and by adjusting sales prices for NaHS as fuel surcharges billed to us increased.

In the first quarter of 2009, the contribution to segment margin of the other activities of our refinery services segment was $2.1 million more than in the first quarter of 2008, primarily resulting from selling caustic soda not needed in our operations.

Supply and Logistics Segment

Operating results from our supply and logistics segment were as follows:

                                                         Three Months Ended March 31,
                                                            2009                2008
                                                                (in thousands)
Supply and logistics revenue                           $       189,062       $   430,118
Crude oil and products costs, excluding unrealized
gains and losses from derivative transactions                 (165,317 )        (407,275 )

Operating and segment general and administrative
costs, excluding non-cash charges for stock-based
compensation and other non-cash expenses                       (17,789 )         (18,782 )
Segment margin                                         $         5,956       $     4,061

Volumes of crude oil and petroleum products -
average barrels per day                                         41,489            46,939

Three Months Ended March 31, 2009 as Compared to Three Months Ended March 31, 2008

Fluctuations in the market price of crude oil and petroleum products have limited impact on our segment margin. Therefore, although our supply and logistics revenues and crude oil and product costs fluctuated significantly between the first quarters of 2009 and 2008 due to an almost $50 per barrel market price variance, we will focus our discussion of our operating results on segment margin.

Segment margin increased $2.0 million comparatively between the first quarters of 2009 and 2008. The key factors affecting this comparison are as follows:

- Acquisition of inland marine transportation operations of Grifco in third quarter of 2008 (increased segment margin);

- Reduction in opportunities for us to take advantage of purchasing and blending of products (reduced segment margin); and

- Crude oil contango market conditions (increased segment margin).

The inland marine transportation operations of Grifco Transportation, acquired by DG Marine in the third quarter of 2008, added $3.1 million to segment margin in the first quarter of 2009. These operations provided us with an additional capability to provide transportation services of petroleum products by barge.

In the first quarter of 2008, the high demand for gasoline by consumers led refiners to operate at increased production levels. Refineries are willing to sell the "heavy" end of the refined barrel, in the form of fuel oil or asphalt, at more attractive pricing (to us) in order to free up capacity to meet the gasoline demand. Due to our logistics equipment, we were able to take advantage of these opportunities and acquire product at attractive prices for our petroleum products marketing and blending.. In the first quarter of 2009, demand for gasoline declined significantly. With refiners reducing their production rates volumes available to us to purchase were limited, resulting in a decrease in our petroleum products volumes of 16% and segment margin of $2.0 million.

During the first quarter of 2009, crude oil markets were in contango (oil prices for future deliveries are higher than for current deliveries), providing an opportunity for us to purchase and store crude oil as inventory for delivery in future months. The crude oil markets were not in contango in the first quarter of 2008. During the first quarter of 2009, we placed 188,000 barrels of crude oil in our storage tanks and hedged this volume with futures contracts on the NYMEX. We are accounting for the effects of this inventory position and related derivative contracts as a fair value hedge under SFAS 133. The effect on segment margin for the amount excluded from effectiveness testing related to this fair value hedge was a $0.5 million gain in the first quarter of 2009.

Industrial Gases Segment

Our industrial gases segment includes the results of our CO2 sales to industrial customers and our share of the operating income of our 50% joint venture interests in T&P Syngas and Sandhill.

CO2 - Industrial Customers - We supply CO2 to industrial customers under seven long-term CO2 sales contracts. The sales contracts contain provisions for adjustments for inflation to sales prices based on the Producer Price Index, with a minimum price.

Our industrial customers treat the CO2 and transport it to their customers. The primary industrial applications of CO2 by those customers include beverage carbonation and food chilling and freezing. Based on historical data for 2004 through the first quarter of 2009, we can expect some seasonality in our sales of CO2. The dominant months for beverage carbonation and freezing food are from April to October, when warm weather increases demand for beverages and the approaching holidays increase demand for frozen foods.

Operating Results - Operating results from our industrial gases segment were as follows:

                                                  Three Months Ended March 31,
                                                    2009                 2008
                                                         (in thousands)
Revenues from CO2 marketing                    $        3,729       $        3,870
CO2 transportation and other costs                     (1,323 )             (1,272 )
Available cash generated by equity investees              617                  601
Segment margin                                 $        3,023       $        3,199

Volumes per day:
CO2 marketing - Mcf                                    69,833               73,062

Three Months Ended March 31, 2009 Compared with Three Months Ended March 31, 2008

The decrease in margin from the industrial gases segment between the two quarterly periods was the result of a decrease in volumes sold, slightly offset by an increase in the average sales price of CO2 to our customers. During the first quarter of 2009, volumes declined 4% as compared to the 2008 first quarter as customers reduced volumes while performing maintenance activities at their facilities. Variations in the volumes sold among contracts with different pricing terms resulted in the average sales price of the CO2 increasing $0.01 per Mcf, or 2%.

The inflation adjustment to the rate we pay Denbury to transport the CO2 to our customers resulted in greater CO2 transportation costs in the first quarter of 2009 when compared to the 2008 quarter. The transportation rate increase between the two quarters was 4.4%.

Our share of the available cash before reserves generated by our equity investments in each quarterly period primarily resulted from our investment in T&P Syngas.

Other Costs, Interest, and Income Taxes

General and administrative expenses. General and administrative expenses
consisted of the following:

                                                         Three Months Ended March 31,
                                                           2009                2008
                                                                (in thousands)
General and administrative expenses not separately
identified below                                       $       5,389       $       7,866
Bonus plan expense                                               855               1,163
Equity-based compensation plans expense (credit)                 364                (505 )
Compensation expense related to management team                2,146                   -
Total general and administrative expenses              $       8,754       $       8,524

Between the first quarter periods, general and administrative expenses increased by $0.2 million. Several factors contributed to this increase. These factors are:

- Expense recorded for the compensation arrangement between our senior executive team and our general partner added $2.1 million in the first quarter of 2009. This cash cost of these arrangements will be borne by our general partner.

- The increase in our common unit price since December 31, 2008 and the issuance of additional stock appreciation rights and phantom units resulted in equity-based compensation expense for the first quarter of 2009 of $0.4 million related to personnel included in general and administrative expenses. As compared to the first quarter of 2008, this was an increase in expense of $0.9 million.

- Reductions in travel costs, audit and tax professional services and bonus expense totaling $1.8 million offset some of the increased amounts.

On December 31, 2008, our general partner and our senior executive management team entered into a compensation arrangement whereby our executive team may earn an interest in our incentive distribution rights owned by our general partner. While our general partner will bear the cash cost of the arrangement with our senior executives, we record the expense of the arrangements with an offsetting non-cash capital contribution by our general partner. As discussed in Note 12 under Class B Membership Interests, we estimate the fair value of the awards to our senior executives at each reporting date and adjust the expense we have recorded based on that fair value. Based on the fair value estimate at March 31, 2009 of $19.9 million, we recorded expense for the first quarter of 2009 of $2.1 million. The fair value of the awards is being recorded on an accelerated basis due to the vesting conditions contained in the awards, so as to match the expense recorded to the service period required for vesting.

Depreciation and amortization expense. Depreciation and amortization expense decreased in the first quarter of 2009 as compared to the same quarter in 2008 primarily as a result of the amortization expense recognized on intangible assets. Depreciation and amortization totaled $15.4 million and $16.8 million for the quarters ended March 31, 2009 and 2008, respectively.

We are amortizing our intangible assets over the period during which the intangible asset is expected to contribute to our future cash flows. As intangible assets such as customer relationships and trade names are generally more valuable in the first years after an acquisition, the amortization we record on these assets is greater in the initial years after the acquisition. As such the amount of amortization we have recorded has declined since the intangible assets were acquired in 2007.

Interest expense, net.

Interest expense, net was as follows:

                                                         Three Months Ended March 31,
                                                           2009                2008
                                                                (in thousands)
Interest expense, including commitment fees,
excluding DG Marine                                    $       1,616       $       1,674
Amortization of facility fees, excluding DG Marine
facility                                                         163                 165
Interest expense and commitment fees - DG Marine               1,363                   -
Capitalized interest                                             (86 )               (53 )
Interest income                                                  (21 )              (117 )
Net interest expense                                   $       3,035       $       1,669

On May 30, 2008, we increased our debt to fund the drop-down transactions from Denbury. As a result, our average outstanding debt balance under our credit facility increased by $248.2 million over the average outstanding debt balance in the first quarter of 2008. Our average interest rate, however, was 4.1% lower during the 2009 quarter, resulting in a decrease for the quarter of $0.1 million. DG Marine incurred interest expense in the first quarter of $1.4 million under its credit facility.

. . .