Item 1A. Risk Factors
ITEM 1A. RISK FACTORS.
An investment in our securities involves certain risks. Security holders and potential investors in our securities should carefully consider the risks described under “ Risk Factors ” set forth in Part I, Item 1A of our 2024 Form 10-K, in addition to other information in such annual report and this quarterly report (including the risk factor set forth below). The risk factors set forth in our 2024 Form 10-K and as set forth below are important factors that could cause our actual results to differ materially from those contained in any written or oral forward-looking statements made by us or on our behalf.
Changes in U.S. trade policy and the impact of tariffs may have a material adverse effect on our business and results of operations.
Our business and results of operations may be adversely affected by uncertainty and changes in U.S. trade policies, including tariffs, trade agreements or other trade restrictions imposed by the U.S. or other governments. These actions have caused uncertainty and volatility in financial markets, may result in retaliatory measures on U.S. goods and may adversely impact both the U.S. and global economies.
Our business requires access to steel and other materials to construct and maintain our pipelines. While our practice is to source steel through domestic producers in the U.S. in most instances, any imposition of or increase in tariffs on imports of steel or other materials, as well as corresponding price increases for such materials available domestically, could increase our construction costs and our costs to maintain our assets. To the extent that we are unable to pass all or any such cost increases on to our customers, such cost increases could adversely affect our returns on investment. Higher materials costs could also diminish our ability to develop new projects at acceptable returns, particularly during times of economic uncertainty, and limit our ability to pursue growth opportunities.
Tariffs or other trade restrictions may lead to continuing uncertainty and volatility in U.S. and global financial and economic conditions and commodity markets, inflation, and reduced demand for our and our customers’ products and services. Such conditions could have a material adverse impact on our business, results of operations and cash flows. Also, disruptions and volatility in the financial markets may lead to adverse changes in the availability, terms and cost of capital. Such adverse changes could increase our costs of capital and limit our access to external financing sources to fund acquisitions, capital projects, or refinancing of debt maturities on similar terms, which could in turn reduce our cash flows and limit our ability to pursue growth opportunities.
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