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• changes in supply and demand for the products we handle and the services we provide, which can be caused by a variety of factors outside of our control;
−Removed: • natural disasters, catastrophes, terrorist attacks (including eco-terrorist attacks), process safety failures, equipment failures or other events, including pipeline or facility accidents and cyber or other attacks on our electronic and computer systems, could interrupt our operations, hinder our ability to fulfil our contractual obligations and/or result in severe personal injury, property damage and environmental damage;
−Removed: • cybersecurity attacks, data breaches and other disruptions affecting us, or our service providers, could materially and adversely affect our business, operations, reputation and financial results;
+Added: • natural disasters, catastrophes, terrorist attacks (including eco-terrorist attacks), process safety failures, equipment failures or other events, including pipeline or facility accidents;
+Added: • information or operations technology failures, including cybersecurity attacks, data breaches and other disruptions affecting us, or our service providers;
• risks arising from climate change, energy conservation measures, or initiatives that stimulate demand for alternative forms of energy;
2 unchanged sentences
• the overall forward market for crude oil and NGL, and certain market structures, the absence of pricing volatility and other market factors;
−Removed: • an inability to fully implement or realize expected returns or other anticipated benefits associated with acquisitions, joint venture and joint ownership arrangements, divestitures and other projects;
+Added: • an inability to fully implement or realize expected returns or other anticipated benefits associated with acquisitions/divestitures, joint venture and joint ownership arrangements, and other projects;
• entering into new businesses in connection with our strategy to participate in emerging energy opportunities;
−Removed: • pandemics, epidemics or other public health events;
• loss of our investment grade credit rating or a significant reduction in our ability to receive open credit;
3 unchanged sentences
• our insurance coverage may not fully cover our losses and we may in the future encounter increased costs related to, and lack of availability of, insurance;
+Added: • trade tariffs, duties, quotas, inflation, supply disruptions or other factors affecting the commodities and materials we use in our business;
+Added: • pandemics, epidemics or other public health events;
• our current or future debt levels, or inability to borrow additional funds or capitalize on business opportunities;
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• we do not own all of the land on which our pipelines and facilities are located, which could result in disruptions to our operations;
−Removed: • failure to obtain materials or commodities in the quantity and the quality we need, and at commercially acceptable prices, whether due to supply disruptions, inflation, tariffs, quotas or other factors;
−Removed: Index to Financial Statement s
• the pace of development of natural gas infrastructure could have an adverse impact on expected crude oil production growth in the Permian Basin.
+Added: Index to Financial Statements
Risks Related to Laws and Regulations
16 unchanged sentences
federal income tax purposes and not being subject to a material amount of entity-level taxation;
−Removed: • potential legislative, judicial or administrative changes or differing interpretations, possibly applied on a retroactive basis;
−Removed: • potential audit adjustments to our income tax returns for tax years beginning after December 31, 2017, by the IRS or state tax authorities;
+Added: • potential legislative, judicial or administrative changes or differing interpretations, possibly applied on a retroactive basis, or expiration of existing provisions;
+Added: • potential audit adjustments to our income tax returns by the IRS or state tax authorities;
• IRS or Canada Revenue Agency (“CRA”) contests to the federal income tax positions or inter-country allocations we take;
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• the tax treatment of income attributable to distributions on our Series B Preferred Units as guaranteed payments for the use of capital creates a different tax treatment for the holders of our Series B Preferred Units than the holders of our common units and such income is not eligible for the 20% deduction for qualified publicly traded partnership income.
−Removed: Index to Financial Statement s
+Added: Index to Financial Statements
Risks Related to Our Business
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In turn, such developments could lead to reduced throughput on our pipelines and at our other facilities, which, depending on the level of production declines, could have a material adverse effect on our business.
−Removed: Also, except with respect to some of our recently constructed long haul pipeline assets, third-party shippers generally do not have long-term contractual commitments to ship crude oil on our pipelines.
+Added: Also, except with respect to some of our more recently constructed long haul pipeline assets, third-party shippers generally do not have long-term contractual commitments to ship crude oil on our pipelines.
A decision by a shipper to substantially reduce or cease to ship volumes of crude oil on our pipelines could cause a significant decline in our revenues.
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We compete against these companies on the basis of many factors, including geographic proximity to production areas, market access, rates, terms of service, connection costs and other factors.
−Removed: Index to Financial Statement s
+Added: Index to Financial Statements
With regard to our NGL operations, we compete with large oil, natural gas and natural gas liquids companies that may, relative to us, have greater financial resources and access to supplies of natural gas and NGL.
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Terrorists may target our physical facilities and hackers may attack our electronic and computer systems.
−Removed: Index to Financial Statement s
+Added: Index to Financial Statements
If one or more of our pipelines or other facilities, including electronic and computer systems, or any facilities or businesses that deliver products, supplies or services to us or that we rely on in order to operate our business, are damaged by severe weather or any other disaster, accident, catastrophe, terrorist attack or event, our operations could be significantly interrupted.
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The occurrence of such an event, or a series of such events, especially if one or more of them occurs in a highly populated or sensitive area, could negatively impact public perception of our operations and/or make it more difficult for us to obtain the approvals, permits, licenses or real property interests we need in order to operate our assets or complete planned growth projects or other transactions.
−Removed: Cybersecurity attacks, data breaches and other disruptions affecting us, or our service providers, could materially and adversely affect our business, operations, reputation and financial results.
−Removed: We are reliant on the continuous and uninterrupted operation of our various technology systems.
−Removed: User access to our sites and information technology systems are critical elements of our operations, as is cloud security and protection against cyber security incidents.
−Removed: In the ordinary course of our business, we collect and store sensitive data in our data centers and on our networks, including intellectual property, proprietary business information, critical operating information and data, information regarding our customers, suppliers, royalty owners and business partners, and personally identifiable information of our employees.
−Removed: We also engage third parties, such as service providers and vendors, who provide a broad array of software, technologies, tools and other products, services and functions that enable us to conduct, monitor and/or protect our business, operations systems and data assets.
−Removed: The secure processing, maintenance and transmission of this information is critical to our operations and business strategy.
−Removed: Despite our security measures, the information technology and infrastructure we rely on may be vulnerable to attacks by third parties, such as hackers, or breached due to human error, malfeasance or other disruptions.
−Removed: Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen.
−Removed: Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory penalties for divulging shipper information, disruption of our operations, damage to our reputation, and loss of confidence in our services, which could adversely affect our business.
+Added: Our business is highly dependent on the use of information and operations technology systems and the unavailability or ineffectiveness of such systems, whether due to cybersecurity attacks, data breaches, human error or other disruptions affecting us, or our service providers, could materially and adversely affect our business, operations, reputation and financial results.
+Added: The continuous and uninterrupted operation of the information and operations technology systems and infrastructure we use (collectively, our “IT systems”), which include a broad array of third party and cloud-based software, technologies, tools and security products, is critical to the operation of our business and essential to our ability to perform day-to-day operations.
+Added: If we are unable to implement, use and maintain effective IT systems, it could have a material adverse effect on our business.
We and certain of our service providers have, from time to time, been subject to cyberattacks.
The frequency and magnitude of cyberattacks is expected to increase and attackers are becoming more sophisticated.
+Added: Infrastructure assets, including pipelines, may be specifically targeted by certain groups, such as “hacktivists,” state-sponsored groups, criminal organizations or private individuals.
We may be unable to anticipate, detect or prevent future attacks, particularly as the methodologies used by attackers change frequently or are not recognized until launched, and we may be unable to investigate or remediate incidents because attackers are increasingly using techniques and tools designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.
−Removed: The information technology infrastructure we use is critical to the efficient operation of our business and essential to our ability to perform day-to-day operations.
−Removed: Risks to our information technology systems include:
−Removed: unauthorized or inadvertent extraction of business sensitive, confidential or personal information;
−Removed: denial of access extortion;
−Removed: corruption of information;
−Removed: or disruption of business processes.
−Removed: Breaches of our information technology infrastructure or physical facilities, or other disruptions, could result in damage to our assets, safety incidents, damage to the environment, remediation costs, liability, regulatory enforcement, violation of privacy or securities laws and regulations, the loss of contracts or the inability to fulfil our contractual obligations, any of which could have a material adverse effect on our operations, financial position and results of operations.
+Added: Any breach or failure of our IT systems, whether due to cyberattacks or other malfeasance, human error, power failures or other disruptions, could result in interruptions to our operations, damage to our assets, safety incidents, damage to the environment and disclosure of sensitive information (including proprietary business information, critical operating information and data, information regarding our customers, suppliers, royalty owners and business partners, and personally identifiable information of our employees).
+Added: This could in turn cause us to incur significant costs and liabilities, including ransom payments, remediation costs, legal claims, regulatory enforcement actions, violation of privacy or securities laws and regulations and the loss of contracts or the inability to fulfil our contractual obligations.
+Added: Any of these events could have a material adverse effect on our operations, financial position and results of operations.
In addition, we may be required to invest significant additional resources to enhance our information security and controls or to comply with evolving cybersecurity laws or regulations.
+Added: The emergence of new technologies (including generative artificial intelligence) could increase any of the foregoing risks or create new risks.
+Added: We or our counterparties may rely upon such technologies for our operations or security, which could make us more vulnerable to technology failures.
+Added: Our competitors may more effectively implement such technologies in their businesses, and we may be unable to compete as effectively.
+Added: New technologies are also subject to intentional misuse by criminals, terrorists or other bad actors.
We self-insure and thus do not carry insurance specifically for cybersecurity events;
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If we were to incur a significant liability for which we were not fully insured, or if we incurred costs in excess of reserves established for uninsured or self-insured risks, it could have a material adverse effect on our financial position, results of operations and cash flows.
−Removed: Index to Financial Statement s
+Added: Index to Financial Statements
Our and our customers’ operations are subject to various risks arising out of the threat of climate change.
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Such negative sentiment regarding the hydrocarbon energy industry could influence consumer preferences and government or regulatory actions, which could, in turn, have an adverse impact on our business.
−Removed: Index to Financial Statement s
+Added: Index to Financial Statements
Activists concerned about the potential effects of climate change have directed their attention towards sources of funding for hydrocarbon energy companies, which has resulted in certain financial institutions, funds and other sources of capital restricting or eliminating their investment in energy-related activities.
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We could also be subject to additional governmental investigations, private litigation, or activist campaigns as unitholders may attempt to effect changes to our business or governance practices.
−Removed: In March 2022, the SEC issued a proposed rule that would mandate extensive disclosure of climate-related risks, including financial impacts, physical and transition risks, climate-related governance and strategy, and GHG emissions, for all U.S.-listed public companies.
−Removed: The SEC missed its self-imposed October 2022 deadline for issuing a final rule and many commentators now expect a final rule to be issued in the first half of 2024.
−Removed: Although the final form and substance of this rule and its requirements are not yet known and its ultimate impact on our business is uncertain, compliance with the proposed rule, if finalized, will result in additional legal, accounting and financial compliance costs.
+Added: In March 2024, the SEC finalized a set of climate disclosure rules that would mandate extensive disclosure of climate-related risks, including financial impacts, physical and transition risks, climate-related governance and strategy, and GHG emissions, for all U.S.-listed public companies.
+Added: Several states, including California, have passed or proposed bills requiring similar, or more extensive, climate disclosure rules.
+Added: These rules have been subject to legal challenges, and in April 2024 the SEC issued a voluntary stay of its rules.
+Added: Although the outcome of these challenges is not yet known and the ultimate impact of these rules on our business is uncertain, compliance with the rules, if implemented, will result in additional legal, accounting and financial compliance costs.
In addition, enhanced climate-related disclosure requirements could influence stakeholders and lenders to restrict or seek more stringent conditions with respect to their investments in certain carbon-intensive sectors.
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In the past, the results of such activities have varied significantly based on market conditions and these activities may continue to experience highly variable results as a result of future changes to the markets for crude oil and NGL.
−Removed: Index to Financial Statement s
−Removed: Joint ventures, joint ownership arrangements and other projects pose unique challenges and we may not be able to fully implement or realize synergies, expected returns or other anticipated benefits associated with such projects.
+Added: Index to Financial Statements
+Added: Joint ventures, joint ownership arrangements and other capital projects pose unique challenges and we may not be able to fully implement or realize synergies, expected returns or other anticipated benefits associated with such projects.
We are involved in many strategic joint ventures and other joint ownership arrangements.
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If we are unable to successfully execute and manage our existing and proposed joint venture and joint owner projects, it could adversely impact our financial and operating results.
−Removed: We are undertaking, or are participating with various counterparties in, a number of projects that involve the expansion, modification, divestiture or combination of existing assets or the construction of new midstream energy infrastructure assets.
−Removed: Many of these projects involve numerous regulatory, environmental, commercial, economic, weather-related, political and legal uncertainties that are beyond our control, including the following:
−Removed: • We may be unable to realize our forecasted commercial, operational or administrative synergies in connection with our joint ventures and joint ownership arrangements, including the Plains Oryx Permian Basin LLC joint venture;
+Added: We currently participate in a number of projects with various counterparties, and may continue to pursue new capital projects in the future.
+Added: These projects can involve the expansion, modification, divestiture or combination of existing assets or the construction of new midstream energy infrastructure assets and involve numerous regulatory, environmental, commercial, economic, weather-related, political and legal uncertainties that are beyond our control, including the following:
+Added: • We may be unable to realize our forecasted commercial, operational or administrative synergies in connection with our joint ventures and joint ownership arrangements, including the Permian JV;
• Joint ventures and other joint ownership arrangements may demand substantial internal resources and may divert resources and attention from other areas of our business;
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• The completion or success of our projects may depend on the completion or success of third-party facilities over which we have no control.
−Removed: As a result of these uncertainties, the anticipated benefits associated with our joint ventures and joint ownership arrangements may not be achieved or could be delayed.
+Added: As a result of these uncertainties, the anticipated benefits associated with our joint ventures, joint ownership arrangements and other capital projects may not be achieved or could be delayed.
In turn, this could negatively impact our cash flow and our ability to make or increase cash distributions to our partners.
−Removed: Index to Financial Statement s
+Added: Index to Financial Statements
+Added: Acquisitions and divestitures involve risks that may adversely affect our business.
+Added: Our ability to execute our financial strategy is in part dependent on our ability to complete strategic transactions, including acquisitions, divestitures or sales of interests to strategic partners.
+Added: If we are unable to successfully complete, integrate or realize the anticipated benefits of future acquisitions or planned divestitures (due to reduced investment in the energy sector, governmental action, litigation, counterparty non-performance or other factors), it may be more difficult for us to implement our business strategies, maintain our desired leverage levels, increase returns to equity holders or otherwise accomplish our financial goals.
+Added: In addition, in connection with our divestitures, we may agree to retain responsibility for certain liabilities that relate to our period of ownership, which could adversely impact our future financial performance.
+Added: Acquisitions also involve potential risks, including:
+Added: • performance from the acquired businesses or assets that is below the forecasts we used in evaluating the acquisition;
+Added: • a significant increase in our indebtedness and working capital requirements;
+Added: • the inability to timely and effectively integrate the operations of recently acquired businesses or assets;
+Added: • the incurrence of substantial unforeseen environmental and other liabilities arising out of the acquired businesses or assets for which we are either not fully insured or indemnified, including liabilities arising from the operation of the acquired businesses or assets prior to our acquisition;
+Added: • risks associated with operating in lines of business that are distinct and separate from our historical operations;
+Added: • customer or key employee loss from the acquired businesses;
+Added: • the diversion of management’s attention from other business concerns.
+Added: Any of these factors could adversely affect our ability to achieve anticipated levels of cash flows or other benefits from our acquisitions, pay distributions to our partners or meet our debt service requirements.
We may enter into new businesses in connection with our strategy to participate in emerging energy opportunities.
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If we are not able to enter into these new lines of business effectively or at all, it could limit our future growth if such emerging energy businesses grow and become a more important part of the energy industry.
−Removed: Our business, results of operations, financial condition, cash flows and unit price can be adversely affected by pandemics, epidemics or other public health events.
−Removed: Our business, results of operations, financial condition, cash flows and unit price can be adversely affected by pandemics, epidemics or other public health events.
−Removed: Such events may cause widespread economic disruption and result in material reductions in demand for crude oil, NGL and other petroleum products, which in turn may result in significant declines in the volume of crude oil and NGL shipped, processed, purchased, stored, fractionated and/or gathered at or through the use of many of our assets.
−Removed: The effects of a public health event depend on a wide variety of factors that are outside of our control, including the clinical severity and transmissibility of the virus or pathogen;
−Removed: the development, deployment, adoption and effectiveness of treatments and vaccines;
−Removed: the capacity of healthcare systems and public health infrastructure;
−Removed: and the response of public health authorities, governments and individuals in areas impacted by such event.
−Removed: Loss of our investment grade credit rating or the ability to receive open credit could negatively affect our borrowing costs, ability to purchase crude oil, NGL and natural gas supplies or to capitalize on market opportunities.
−Removed: Our business is dependent on our ability to maintain an attractive credit rating and continue to receive open credit from our suppliers and trade counterparties.
−Removed: Our senior unsecured debt is currently rated as “investment grade” by Standard & Poor’s, Moody’s Investors Service and Fitch Ratings Inc.
−Removed: A downgrade by such agencies to a level below investment grade could increase our borrowing costs, reduce our borrowing capacity and cause our counterparties to reduce the amount of open credit we receive from them.
−Removed: This could negatively impact our ability to capitalize on market opportunities.
−Removed: For example, our ability to utilize our crude oil storage capacity for merchant activities to capture contango market opportunities is dependent upon having adequate credit facilities, both in terms of the total amount of credit facilities and the cost of such credit facilities, which enables us to finance the storage of the crude oil from the time we complete the purchase of the crude oil until the time we complete the sale of the crude oil.
−Removed: Accordingly, loss of our investment grade credit ratings could adversely impact our cash flows, our ability to make distributions and the value of our outstanding equity and debt securities.
We are exposed to the credit risk of our customers and other counterparties we transact with in the ordinary course of our business activities.
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Although we have credit risk management policies and procedures that are designed to mitigate and limit our exposure in this area, there can be no assurance that we have adequately assessed and managed the creditworthiness of our existing or future counterparties or that there will not be an unanticipated deterioration in their creditworthiness or unexpected instances of nonpayment or nonperformance, all of which could have an adverse impact on our cash flow and our ability to pay or increase our cash distributions to our partners.
−Removed: Index to Financial Statement s
+Added: Index to Financial Statements
We have a number of minimum volume commitment contracts that support our pipelines.
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While such contracts provide greater revenue certainty, if the applicable shipper fails to transport the minimum required volume and is required to make a deficiency payment, under applicable accounting rules, the revenue associated with such deficiency payment may not be recognized until the applicable transportation credit has expired or has been used.
−Removed: Deferred revenue associated with non-performance by shippers under minimum volume contracts could be significant and could adversely affect our profitability and earnings.
+Added: Deferred revenue associated with movements by shippers of volumes that are less than minimum volume commitments could be significant and could adversely affect our profitability and earnings.
In addition, in those cases in which we provide division order services for crude oil purchased at the wellhead, we may be responsible for distribution of proceeds to all parties.
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Furthermore, nonpayment by the counterparties to our interest rate and/or commodity derivatives could expose us to additional interest rate and/or commodity price risk.
−Removed: Acquisitions and divestitures involve risks that may adversely affect our business.
−Removed: Our ability to execute our financial strategy is in part dependent on our ability to complete strategic transactions, including acquisitions, divestitures or sales of interests to strategic partners.
−Removed: If we are unable to successfully complete, integrate or realize the anticipated benefits of future acquisitions or planned divestitures (due to reduced investment in the energy sector, governmental action, litigation, counterparty non-performance or other factors), it may be more difficult for us to implement our business strategies, maintain our desired leverage levels, increase returns to equity holders or otherwise accomplish our financial goals.
−Removed: In addition, in connection with our divestitures, we may agree to retain responsibility for certain liabilities that relate to our period of ownership, which could adversely impact our future financial performance.
−Removed: Acquisitions also involve potential risks, including:
−Removed: • performance from the acquired businesses or assets that is below the forecasts we used in evaluating the acquisition;
−Removed: • a significant increase in our indebtedness and working capital requirements;
−Removed: • the inability to timely and effectively integrate the operations of recently acquired businesses or assets;
−Removed: • the incurrence of substantial unforeseen environmental and other liabilities arising out of the acquired businesses or assets for which we are either not fully insured or indemnified, including liabilities arising from the operation of the acquired businesses or assets prior to our acquisition;
−Removed: • risks associated with operating in lines of business that are distinct and separate from our historical operations;
−Removed: • customer or key employee loss from the acquired businesses;
−Removed: • the diversion of management’s attention from other business concerns.
−Removed: Any of these factors could adversely affect our ability to achieve anticipated levels of cash flows or other benefits from our acquisitions, pay distributions to our partners or meet our debt service requirements.
−Removed: Index to Financial Statement s
Tightened capital markets or other factors that increase our cost of capital or otherwise limit our access to capital could impair our ability to achieve our strategic objectives.
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If funding is not available when needed, or is available only on unfavorable terms, we may be unable to implement our development plans, enhance our existing business, complete strategic projects and transactions, take advantage of business opportunities or respond to competitive pressures, any of which could have a material adverse effect on our cash flows and results of operations.
+Added: Index to Financial Statements
Our risk policies cannot eliminate all risks and the insufficiency of, or non-compliance with our risk policies could result in significant financial losses.
−Removed: Generally, it is our policy to establish a margin for crude oil or other products we purchase by selling such products for physical delivery to third-party users, or by entering into a future delivery obligation under derivative contracts.
+Added: Generally, it is our policy to establish a margin for crude oil or other products we purchase by selling such products for physical delivery to third-party users, or by entering into futures or derivative contracts that require future delivery or financial settlement, as applicable.
Through these transactions, we seek to maintain a position that is substantially balanced between purchases on the one hand, and sales or future delivery obligations on the other hand.
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We are also exposed to some risks that are not hedged, including risks on certain of our inventory, such as linefill, which must be maintained in order to transport crude oil on our pipelines.
−Removed: In an effort to maintain a balanced position, specifically authorized personnel can purchase or sell crude oil, refined products and NGL, up to predefined limits and authorizations.
+Added: In an effort to maintain a balanced position, specifically authorized personnel can purchase or sell crude oil and NGL, up to predefined limits and authorizations.
Although this activity is monitored independently by our risk management function, it exposes us to commodity price risks within these limits.
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Accordingly, we can give no assurance that we will be able to maintain adequate insurance in the future at rates or on other terms we consider commercially reasonable.
−Removed: In addition, although we believe that we currently maintain adequate insurance coverage, insurance will not cover many types of interruptions or events that might occur and will not cover all risks associated with our operations.
+Added: In addition, although we believe that we currently maintain adequate insurance coverage, insurance will not cover many types of interruptions or losses that might occur and will not cover all risks associated with our operations.
In addition, the proceeds of any such insurance may not be paid in a timely manner and may be insufficient if such an event were to occur.
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“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates— Line 901 Incident Insurance Receivable” and Note 18 to our Consolidated Financial Statements.
−Removed: Index to Financial Statement s
+Added: Trade tariffs, duties, quotas, inflation, supply disruptions or other factors affecting the commodities and materials we use in our business could have a material and adverse impact on our results of operations, financial condition and cash flows.
+Added: Many of the commodities and materials we use in our business are imported and exported.
+Added: We export crude oil and NGL from Canada into U.S.
+Added: To the extent these products become subject to import tariffs in the U.S., it could expose us to costs that we cannot recover from our customers.
+Added: Existing and future trade tariffs, import duties and quotas could also materially increase our costs of procuring the commodities and materials we use and disrupt the markets for the products we handle, which in turn could have a material adverse effect on our financial position, results of operations and cash flows.
+Added: Our business requires access to steel and other materials to construct and maintain new and existing pipelines and facilities.
+Added: If we experience a shortage in the supply of these materials or are unable to source sufficient quantities of high quality materials at acceptable prices and in a timely manner, it could materially and adversely affect our ability to construct new infrastructure and maintain our existing assets.
+Added: Index to Financial Statements
+Added: Our business also depends on having access to significant amounts of electricity and other commodities.
+Added: If we are unable to obtain commodities sufficient to operate and maintain our assets, or only able to do so at commercially unreasonable prices, it could materially and adversely affect our business.
+Added: Supply chain disruptions and inflation of prices for commodities, materials, products and shipping may make it more challenging to obtain sufficient quantities of high quality materials at acceptable prices and in a timely manner.
+Added: If we are unable to source such materials, it could materially and adversely affect our ability to construct new infrastructure and operate and maintain our existing assets.
+Added: Our business, results of operations, financial condition, cash flows and unit price can be adversely affected by pandemics, epidemics or other public health events.
+Added: Our business, results of operations, financial condition, cash flows and unit price can be adversely affected by pandemics, epidemics or other public health events.
+Added: Such events may cause widespread economic disruption and result in material reductions in demand for crude oil, NGL and other petroleum products, which in turn may result in significant declines in the volume of crude oil and NGL shipped, processed, purchased, stored, fractionated and/or gathered at or through the use of many of our assets.
+Added: The effects of a public health event depend on a wide variety of factors that are outside of our control, including the clinical severity and transmissibility of the virus or pathogen;
+Added: the development, deployment, adoption and effectiveness of treatments and vaccines;
+Added: the capacity of healthcare systems and public health infrastructure;
+Added: and the response of public health authorities, governments and individuals in areas impacted by such event.
+Added: Loss of our investment grade credit rating or the ability to receive open credit could negatively affect our borrowing costs, ability to purchase crude oil, NGL and natural gas supplies or to capitalize on market opportunities.
+Added: Our business is dependent on our ability to maintain an attractive credit rating and continue to receive open credit from our suppliers and trade counterparties.
+Added: Our senior unsecured debt is currently rated as “investment grade” by Standard & Poor’s, Moody’s Investors Service and Fitch Ratings Inc.
+Added: A downgrade by such agencies to a level below investment grade could increase our borrowing costs, reduce our borrowing capacity and cause our counterparties to reduce the amount of open credit we receive from them.
+Added: This could negatively impact our ability to capitalize on market opportunities.
+Added: For example, our ability to utilize our crude oil storage capacity for merchant activities to capture contango market opportunities is dependent upon having adequate credit facilities, both in terms of the total amount of credit facilities and the cost of such credit facilities, which enables us to finance the storage of the crude oil from the time we complete the purchase of the crude oil until the time we complete the sale of the crude oil.
+Added: Accordingly, loss of our investment grade credit ratings could adversely impact our cash flows, our ability to make distributions and the value of our outstanding equity and debt securities.
The terms of our indebtedness may limit our ability to borrow additional funds or capitalize on business opportunities.
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• covenants contained in our existing debt arrangements will require us to continue to meet financial tests that may adversely affect our flexibility to plan for and react to changes in our business;
+Added: Index to Financial Statements
• our ability to obtain additional financing for working capital, capital expenditures, acquisitions and general partnership purposes may be limited;
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Significant increases in interest rates above current levels could adversely affect our results of operations, cash flows and financial position due to, among other things:
−Removed: Index to Financial Statement s
• Our exposure to market risk due to the short-term nature of our commercial paper borrowings and the floating interest rates on our credit facilities;
11 unchanged sentences
reporting purposes.
+Added: Index to Financial Statements
Our business requires the retention and recruitment of a skilled workforce, and difficulties retaining and recruiting our workforce could result in a failure to implement our business plans.
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If at any time the availability of these assets is limited or denied, and if access to alternative assets cannot be arranged, it could have an adverse effect on our business, results of operations and cash flow.
−Removed: Index to Financial Statement s
Significant under-utilization of certain assets could significantly reduce our profitability due to fixed costs incurred to obtain the right to use such assets.
7 unchanged sentences
Any significant increase in these expenditures could adversely affect our results of operations, financial position or cash flows, as well as our ability to make cash distributions to our unitholders.
+Added: Index to Financial Statements
We do not own all of the land on which our pipelines and facilities are located, which could result in disruptions to our operations.
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Any loss of rights with respect to real property, through our inability to renew right-of-way contracts or otherwise, could have a material adverse effect on our business, results of operations, and financial position.
−Removed: If we fail to obtain materials or commodities in the quantity and the quality we need, and at commercially acceptable prices, whether due to supply disruptions, inflation, tariffs, quotas or other factors, our results of operations, financial condition and cash flows could be materially and adversely affected.
−Removed: Our business requires access to steel and other materials to construct and maintain new and existing pipelines and facilities.
−Removed: If we experience a shortage in the supply of these materials or are unable to source sufficient quantities of high quality materials at acceptable prices and in a timely manner, it could materially and adversely affect our ability to construct new infrastructure and maintain our existing assets.
−Removed: Our business also depends on having access to significant amounts of electricity and other commodities.
−Removed: If we are unable to obtain commodities sufficient to operate and maintain our assets, or only able to do so at commercially unreasonable prices, it could materially and adversely affect our business.
−Removed: Supply chain disruptions and inflation of prices for commodities, materials, products and shipping may make it more challenging to obtain sufficient quantities of high quality materials at acceptable prices and in a timely manner.
−Removed: If we are unable to source such materials, it could materially and adversely affect our ability to construct new infrastructure and operate and maintain our existing assets.
−Removed: Index to Financial Statement s
−Removed: In addition, some of the materials used in our business are imported.
−Removed: Existing and future import duties and quotas could materially increase our costs of procuring imported or domestic steel and/or create shortages or difficulties in procuring sufficient quantities of steel meeting our required technical specifications.
−Removed: A material increase in our costs of construction and maintenance or any significant delays in our ability to complete our infrastructure projects could have a material adverse effect on our financial position, results of operations and cash flows.
The pace of development of natural gas infrastructure could have an adverse impact on expected crude oil production growth in the Permian Basin.
5 unchanged sentences
The current laws and regulations affecting our business are subject to change and in the future we may be subject to additional laws, executive orders and regulations, which could adversely impact our business.
−Removed: Our operations involving the storage, treatment, processing, and transportation of liquid hydrocarbons, including crude oil, NGL and refined products, are subject to stringent federal, state, and local laws and regulations governing the discharge of materials into the environment.
+Added: Our operations involving the storage, treatment, processing, and transportation of liquid hydrocarbons, including crude oil, NGL and natural gas, are subject to stringent federal, state, and local laws and regulations governing the discharge of materials into the environment.
Our operations are also subject to laws and regulations relating to protection of the environment, natural resources, operational safety, climate change and related matters.
1 unchanged sentence
Also, new or additional laws and regulations, new interpretations of existing requirements or changes in our operations could trigger new permitting requirements applicable to our operations, which could result in increased costs or delays of, or denial of rights to conduct, our development programs.
−Removed: The failure to comply with any such laws and regulations could result in the assessment of administrative, civil, and criminal penalties, the imposition of investigatory or remedial obligations or the incurrence of capital expenditures.
+Added: The failure to comply with any such laws and regulations could result in the assessment of administrative, civil, and criminal penalties, the imposition of investigatory or remedial obligations or the incurrence of capital expenditures, the costs of which may be substantial.
Any such failure could also result in the imposition of restrictions, delays or cancellations in the permitting or performance of projects, or the issuance of injunctions that may subject us to additional operational requirements and constraints, or claims of damages to property or persons.
1 unchanged sentence
Our business and operations may also become subject to new or additional laws or regulations.
−Removed: For example, President Biden has made the combat of climate change arising from GHG emissions a priority under his Administration and has issued, and may continue to issue, executive orders or other regulatory initiatives in pursuit of his regulatory agenda that could curtail oil and natural gas production and transportation.
+Added: For example, certain U.S.
+Added: presidential administrations have pursued regulatory agendas focused on the emission of GHGs or other pollutants that could curtail oil and natural gas production and transportation.
Potential examples include laws, rules, executive orders or regulations that limit fracturing of oil and natural gas wells, restrictions on flaring and venting during natural gas production on federal properties, limitations or bans on oil and gas leases on federal lands and offshore waters, increased requirements for construction and permitting of pipeline infrastructure and LNG export facilities, and further restrictions on GHG emissions from oil and gas facilities.
Any new laws, executive orders or regulations, or changes to or interpretations of existing laws or regulations, adverse to us could have a material adverse effect on our financial position, results of operations and cash flows.
−Removed: Index to Financial Statement s
+Added: Index to Financial Statements
We have a history of making incremental additions to the miles of pipelines we own, both through acquisitions and investment capital projects.
3 unchanged sentences
Some of these expenses could increase by amounts disproportionately higher than the relative increase in pipeline mileage and the increase in revenues associated therewith.
−Removed: Our refined products terminal assets are also subject to significant compliance costs and liabilities.
−Removed: In addition, because of the increased volatility of refined products and their tendency to migrate farther and faster than crude oil when released, releases of refined products into the environment can have a more significant impact than crude oil and require significantly higher expenditures to respond and remediate.
−Removed: The incurrence of such expenses not covered by insurance, indemnity or reserves could materially adversely affect our results of operations.
We currently devote substantial resources to comply with DOT-mandated pipeline integrity rules.
20 unchanged sentences
Under certain circumstances, the FERC could limit our ability to set rates based on our costs, or could order us to reduce our rates and could require the payment of reparations to complaining shippers for up to two years prior to the complaint.
−Removed: Index to Financial Statement s
In addition, we routinely monitor the public filings and proceedings of other parties with the FERC and other regulatory agencies in an effort to identify issues that could potentially impact our business.
2 unchanged sentences
Despite such efforts, we can provide no assurance that the FERC and other agencies that regulate our business will not issue future orders or declarations that increase our costs or otherwise adversely affect our operations.
+Added: Index to Financial Statements
Our Canadian pipelines are subject to regulation by the CER and by provincial authorities.
6 unchanged sentences
Some of our operations cross the U.S./Canada border and are subject to cross-border regulation.
−Removed: Our cross border activities subject us to regulatory matters, including import and export licenses, tariffs, Canadian and U.S.
+Added: Our cross border activities subject us to regulatory matters, including import and export licenses, trade tariffs, Canadian and U.S.
customs and tax issues and toxic substance certifications.
−Removed: Such regulations include the Short Supply Controls of the EAA, the USMCA and the TSCA.
−Removed: Violations of these licensing, tariff and tax reporting requirements could result in the imposition of significant administrative, civil and criminal penalties.
+Added: Such regulations include the USMCA and the TSCA.
+Added: Violations of these licensing, trade tariff and tax reporting requirements could result in the imposition of significant administrative, civil and criminal penalties.
Furthermore, Presidential Permits that allow cross-border movements of crude oil may be revoked or terminated at any time.
7 unchanged sentences
Failure to comply with such regulations, as interpreted and enforced, could have a material adverse effect on our business, results of operations, financial condition and our ability to make cash distributions to our unitholders.
−Removed: The enactment and implementation of derivatives legislation could have an adverse impact on our ability to use derivative instruments to reduce the effect of commodity price, interest rate and other risks associated with our business and increase the amount of working capital required to conduct these hedging activities.
+Added: Existing or future derivatives legislation and regulations could have an adverse impact on our ability to use derivative instruments to reduce the effect of commodity price, interest rate and other risks associated with our business and increase the amount of working capital required to conduct these hedging activities.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) established federal oversight and regulation of derivative markets and entities, such as us, that participate in those markets.
−Removed: The Dodd-Frank Act requires the CFTC and the SEC to promulgate rules and regulations implementing the Dodd-Frank Act.
−Removed: Although the CFTC has finalized certain regulations, others remain to be finalized or implemented and it is not possible at this time to predict when this will be accomplished.
−Removed: Index to Financial Statement s
+Added: The CFTC has promulgated implementing regulations with respect to the Dodd-Frank Act.
The CFTC has designated certain interest rate swaps and credit default swaps for mandatory clearing, and the associated rules require us, in connection with covered derivative activities, to comply with clearing and trade-execution requirements or take steps to qualify for an exemption from such requirements.
6 unchanged sentences
Posting of additional cash margin or collateral could affect our liquidity (defined as unrestricted cash on hand plus available capacity under our credit facilities) and reduce our ability to use cash for capital expenditures or other partnership purposes.
+Added: Index to Financial Statements
Even if we ourselves are not required to post additional cash margin or collateral for our derivative contracts, the banks and other derivatives dealers who are our contractual counterparties will be required to comply with other new requirements under the Dodd-Frank Act and related rules.
1 unchanged sentence
In addition, implementation of the Dodd- Frank Act and related rules and regulations could reduce the overall liquidity and depth of the markets for financial and other derivatives we utilize in connection with our business, which could expose us to additional risks or limit the opportunities we are able to capture by limiting the extent to which we are able to execute our hedging strategies.
−Removed: Finally, the Dodd-Frank Act was intended, in part, to reduce the volatility of oil and gas prices, which some legislators attributed to speculative trading in derivatives and commodity instruments related to oil and gas.
−Removed: Our financial results could be adversely affected if a consequence of the Dodd-Frank Act and implementing regulations is lower commodity prices.
−Removed: The full impact of the Dodd-Frank Act and related regulatory requirements upon our business will not be known until the regulations are implemented and the market for derivatives contracts has adjusted.
−Removed: The Dodd-Frank Act and any new regulations could significantly increase the cost of derivative contracts, materially alter the terms of derivative contracts, reduce the availability of derivatives to protect against risks we encounter, reduce our ability to monetize or restructure our existing derivative contracts.
−Removed: If we reduce our use of derivatives as a result of the Dodd-Frank Act and regulations implementing the Dodd-Frank Act, our results of operations may become more volatile and our cash flows may be less predictable.
−Removed: Any of these consequences could have a material adverse effect on us, our financial condition and our results of operations.
+Added: The current statutory or regulatory provisions implementing derivatives regulations could be amended, and we cannot predict the impact on our hedging activities of any future amendments.
+Added: Any such changes could have a material adverse effect on us, our financial condition and our results of operations.
Legislation, executive orders and regulatory initiatives relating to climate change could have a material adverse effect on our business, demand for our services, financial condition, results of operations and cash flows.
−Removed: The adoption and implementation of any international, federal, regional or state legislation, executive actions, regulations or other regulatory and policy initiatives that impose more stringent standards for GHG emissions, restrict the areas in which the oil and gas industry may produce crude oil and natural gas or generate GHG emissions, increase scrutiny of environmental permitting or delay such permitting reviews, or require enhanced disclosure of such GHG emission and other climate-related information, could result in reduced demand for crude oil and natural gas, and thus our services, as well as increase our compliance costs.
+Added: The adoption and implementation of any international, federal, regional or state legislation, executive actions, regulations or other regulatory and policy initiatives that impose more stringent standards for GHG emissions, restrict the areas in which the oil and gas industry may produce crude oil and natural gas or generate GHG emissions, increase scrutiny of environmental permitting or delay such permitting reviews, require enhanced disclosure of such GHG emission and other climate-related information, or promote and subsidize lower GHG-emitting, alternative energy products, could result in reduced demand for crude oil and natural gas, and thus our services, as well as increase our compliance costs.
Although it is not possible at this time to predict how legislation or new regulations that may be adopted to address GHG emissions and climate change could impact our business, any such future laws and regulations could have a material adverse effect on our business, demand for our services, financial condition, results of operations and cash flows.
−Removed: Index to Financial Statement s
Legislation, executive orders and regulatory initiatives relating to hydraulic fracturing or other hydrocarbon development activities could reduce domestic production of crude oil and natural gas.
4 unchanged sentences
There have been a variety of legislative and regulatory proposals to prohibit, restrict, or more closely regulate various forms of hydraulic fracturing;
−Removed: for example, the Governor of California issued an order directing the Department of Conservation’s Geologic Energy Management Division to initiate regulatory action to end the issuance of new permits for hydraulic fracturing by early 2024.
−Removed: Moreover, the Biden Administration has pursued policy initiatives that have resulted in temporary suspensions of new oil and gas leasing, more stringent emissions and operating regulations, and increased royalty rates for oil and gas operations on federal lands and waters.
+Added: for example, California’s Department of Conservation’s Geologic Energy Management Division issued a final regulatory statewide ban on hydraulic fracturing in October 2024.
+Added: Other states require the disclosure of certain chemicals used in hydraulic fracturing and have conducted investigations into connections between hydraulic fracturing and induced seismicity.
These actions, as well as any other legislation, executive orders or regulatory initiatives that curtail hydraulic fracturing or otherwise limit producers’ ability to drill or complete wells could reduce the production of crude oil and natural gas in the United States or Canada, and could thereby result in reduced demand for our transportation, terminalling and storage services as well as our merchant activities.
Laws and regulations pertaining to the protection of threatened and endangered species or to critical habitat, wetlands and natural resources could delay, restrict or prohibit our and our customers’ operations and cause us or our customers to incur substantial costs that may have a material adverse effect on our results of operations.
−Removed: In the United States, the Endangered Species Act (“ESA”) and comparable state laws were established to protect endangered and threatened species.
+Added: In the United States, the ESA and comparable state laws were established to protect endangered and threatened species.
Under the ESA, if a species is listed as threatened or endangered, restrictions may be imposed on activities that have the potential to adversely affect that species’ habitat.
3 unchanged sentences
Additionally, the designation of previously unprotected species or the re-designation of under-protected species as threatened or endangered in areas where we or our customers conduct operations could cause us to incur increased costs arising from species protection measures or could result in delays, restrictions or prohibitions on our customers’ development and production activities that could have a material adverse effect on our results of operations.
+Added: Index to Financial Statements
Risks Inherent in an Investment in Us
11 unchanged sentences
Therefore, cash distributions might be made during periods when we record losses and might not be made during periods when we record profits.
−Removed: Index to Financial Statement s
Our preferred units have rights, preferences and privileges that are not the same as, and are preferential to, the rights of holders of our common units.
13 unchanged sentences
• generally, if a person acquires 20% or more of any class of units then outstanding other than from our general partner or its affiliates, the units owned by such person cannot be voted on any matter, except that such shares constituting up to 19.9% of the total shares outstanding may be voted in the election of PAGP GP directors;
+Added: Index to Financial Statements
• the PAGP GP Board is composed of three classes of directors, which limits our unitholders’ ability to make significant changes to the board in any given year;
10 unchanged sentences
• the market price of the common units may decline.
−Removed: Index to Financial Statement s
In addition, our Series A preferred units are convertible into common units at any time by the holders of such units, or under certain circumstances, at our option.
14 unchanged sentences
Delaware law provides that for a period of three years from the date of an impermissible distribution, limited partners who received the distribution and who knew at the time of the distribution that it violated Delaware law will be liable to the limited partnership for the distribution amount.
+Added: Index to Financial Statements
Conflicts of interest could arise among our general partner and us or the unitholders.
9 unchanged sentences
• the general partner would not breach our partnership agreement by exercising its call rights to purchase limited partnership interests or by assigning its call rights to one of its affiliates or to us.
−Removed: Index to Financial Statement s
The control of our general partner may be transferred to a third party without unitholder consent.
10 unchanged sentences
In the event of the insolvency, bankruptcy, liquidation, reorganization, dissolution or winding up of the business of a subsidiary, other than a subsidiary that may guarantee our debt securities in the future, creditors of that subsidiary would generally have the right to be paid in full before any distribution is made to us or the holders of our debt securities.
+Added: Index to Financial Statements
Our leverage may limit our ability to borrow additional funds, comply with the terms of our indebtedness or capitalize on business opportunities.
7 unchanged sentences
Our ability to make scheduled payments, to refinance our obligations with respect to our indebtedness or our ability to obtain additional financing in the future will depend on our financial and operating performance, which, in turn, is subject to prevailing economic conditions and to financial, business and other factors.
−Removed: We believe that we will have sufficient cash flow from operations and available borrowings under our bank credit facilities to service our indebtedness, although the principal amount of our debt securities will likely need to be refinanced at maturity in whole or in part.
+Added: We believe that we will have sufficient cash flow from operations and available borrowings under our bank credit facilities to service our indebtedness, although the principal amount of our debt securities will likely need to be refinanced at or prior to maturity in whole or in part.
A significant downturn in the hydrocarbon industry or other development adversely affecting our cash flow could materially impair our ability to service our indebtedness.
3 unchanged sentences
Our leverage may also make our results of operations more susceptible to adverse economic and industry conditions by limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate and may place us at a competitive disadvantage as compared to our competitors that have less debt.
−Removed: Index to Financial Statement s
The ability to transfer our debt securities may be limited by the absence of an organized trading market.
10 unchanged sentences
We can give no assurance that we would be able to refinance our debt securities.
+Added: Index to Financial Statements
We do not have the same flexibility as other types of organizations to accumulate cash, which may limit cash available to service our debt securities or to repay them at maturity.
Unlike a corporation, our partnership agreement requires us to distribute, on a quarterly basis, 100% of our available cash to our unitholders of record.
−Removed: Available cash is generally defined as all of our cash and cash equivalents on hand at the end of each quarter less reserves established in the discretion of our general partner for future requirements.
+Added: Available cash is generally defined as all of our cash receipts and cash equivalents on hand at the end of each quarter less reserves established in the discretion of our general partner for future requirements.
Our available cash also includes cash on hand resulting from borrowings made after the end of the quarter.
2 unchanged sentences
• to comply with applicable law or any loan agreement, security agreement, mortgage, debt instrument or other agreement or obligation;
−Removed: • to provide funds to make payments on the preferred units;
+Added: • to provide funds to make payments on the preferred unitholders;
• to provide funds for distributions to our common unitholders for any one or more of the next four calendar quarters.
1 unchanged sentence
Accordingly, if we experience a liquidity problem in the future, we may not be able to issue equity to recapitalize.
−Removed: Index to Financial Statement s
Tax Risks to Unitholders
Our tax treatment depends on our status as a partnership for U.S.
−Removed: federal income tax purposes and not being subject to a material amount of entity-level taxation.
+Added: federal income tax purposes and not being subject to a material amount of entity-level taxation by individual states or foreign jurisdictions.
If the IRS were to treat us as a corporation for U.S.
−Removed: federal income tax purposes, or we become subject to entity-level taxation for state or foreign tax purposes, our cash available for distributions to our unitholders would be substantially reduced.
+Added: federal income tax purposes, or if we become subject to a material amount of entity-level or other form of taxation for state or foreign tax purposes, our cash available for distributions to our unitholders would be substantially reduced.
The anticipated after-tax economic benefit of an investment in our units depends largely on our being treated as a partnership for U.S.
1 unchanged sentence
A publicly traded partnership such as us may be treated as a corporation for U.S.
−Removed: federal income tax purposes unless it satisfies a “qualifying income” requirement, as defined in Section 7704 of the Internal Revenue Code of 1986, as amended.
−Removed: Based upon our current operations and current Treasury Regulations, we believe we satisfy the qualifying income requirement.
+Added: federal income tax purposes unless it satisfies a “qualifying income” requirement, as defined in Section 7704 of the Code.
+Added: Based upon our current operations and current U.S.
+Added: Treasury Regulations, we believe we satisfy the qualifying income requirement.
However, no ruling has been or will be requested regarding our treatment as a partnership for U.S.
8 unchanged sentences
Therefore, treatment of us as a corporation would result in a material reduction in cash flow and after-tax return to our unitholders, likely causing a substantial reduction in the value of our units.
−Removed: In addition, several states have been evaluating ways to subject partnerships to entity-level taxation through the imposition of state income, franchise and other forms of taxation.
+Added: In addition, several states impose and others have been evaluating ways to subject partnerships to entity-level taxation through the imposition of state income, franchise and other forms of taxation.
For example, we are subject to entity-level tax on the portion of our income apportioned to Texas.
−Removed: Imposition of any similar taxes or additional federal or foreign taxes on us will reduce the cash available for distribution to our unitholders.
+Added: Imposition of any similar taxes by individual states or additional federal or foreign taxes on us could substantially reduce our cash available for distribution to our unitholders.
+Added: Index to Financial Statements
The tax treatment of publicly traded partnerships or an investment in our units could be subject to potential legislative, judicial or administrative changes or differing interpretations, possibly applied on a retroactive basis.
3 unchanged sentences
federal income tax laws that would affect publicly traded partnerships, including proposals that would eliminate our ability to qualify for partnership tax treatment.
+Added: Recent proposals have provided for the expansion of the qualifying income exception for publicly traded partnerships in certain circumstances and other proposals have provided for the total elimination of the qualifying income exception upon which we rely for our partnership tax treatment.
Further, while unitholders of publicly traded partnerships are, subject to certain limitations, entitled to a deduction equal to 20% of their allocable share of a publicly traded partnership’s “qualified business income,” this deduction is scheduled to expire with respect to taxable years beginning after December 31, 2025.
8 unchanged sentences
You are urged to consult with your own tax advisor with respect to the status of regulatory or administrative developments and proposals and their potential effect on your investment in our units.
−Removed: Index to Financial Statement s
unitholders will be subject to U.S.
17 unchanged sentences
While the determination of a partner’s “amount realized” generally includes any decrease of a partner’s share of the partnership’s liabilities, the Treasury regulations provide that the “amount realized” on a transfer of an interest in a publicly traded partnership will generally be the amount of gross proceeds paid to the broker effecting the applicable transfer on behalf of the transferor, and thus will be determined without regard to any decrease in that partner’s share of a publicly traded partnership’s liabilities.
−Removed: For a transfer of interest in a publicly traded partnership that is effected through a broker on or after January 1, 2023, the obligation to withhold is imposed on the transferor’s broker.
−Removed: Prospective foreign unitholders should consult their tax advisors regarding the impact of these rules on an investment in our units.
+Added: For a transfer of interest in a publicly traded partnership that is effected through a broker, the obligation to withhold is imposed on the transferor’s broker.
+Added: Current and prospective foreign unitholders should consult their tax advisors regarding the impact of these rules on an investment in our units.
+Added: Index to Financial Statements
Tax Risks to Common Unitholders
−Removed: If the IRS makes audit adjustments to our income tax returns for tax years beginning after December 31, 2017, 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 which case our cash available for distribution to our unitholders might be substantially reduced.
−Removed: Pursuant to the Bipartisan Budget Act of 2015, for tax years beginning after December 31, 2017, if the IRS makes audit 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.
+Added: If the IRS makes audit 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 which case our cash available for distribution to our unitholders might be substantially reduced.
+Added: If the IRS makes audit 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.
To the extent possible under these rules, our general partner may elect to either 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.
−Removed: Although our general partner may elect to have our unitholders and former unitholders take such audit adjustment into account and pay any resulting taxes (including applicable penalties or interest) in accordance with their interests in us during the tax year under audit, there can be no assurance that such election will be practical, permissible or effective in all circumstances.
+Added: Although our general partner may elect to have our unitholders and former unitholders take such audit adjustments into account and pay any resulting taxes (including applicable penalties or interest) in accordance with their interests in us during the tax year under audit, there can be no assurance that such election will be practical, permissible or effective in all circumstances.
As a result, our current unitholders may bear some or all of the tax liability resulting from such audit adjustment, even if such unitholders did not own units in us during the tax year under audit.
If, as a result of any such audit adjustment, we are required to make payments of taxes, penalties and interest, our cash available for distribution to our unitholders might be substantially reduced.
−Removed: These rules are not applicable for tax years beginning on or prior to December 31, 2017.
If the IRS or CRA contests the federal income tax positions or inter-country allocations we take, the market for our common units may be adversely impacted and the cost of any IRS or CRA contest or incremental taxes paid will reduce our cash available for distribution or debt service.
7 unchanged sentences
See Note 14 for additional information regarding CRA challenge of intercompany transactions.
−Removed: Index to Financial Statement s
Our unitholders may be required to pay taxes on their share of our income even if they do not receive any cash distributions from us.
−Removed: Because our unitholders will be treated as partners to whom we will allocate taxable income that could be different in amount than the cash we distribute, they will be required to pay any U.S.
+Added: Because our unitholders will be treated as partners to whom we will allocate taxable income, including gains and losses resulting from the sale of assets, that could be different in amount than the cash we distribute, they will be required to pay any U.S.
federal income taxes and, in some cases, state and local income taxes on their share of our taxable income even if they receive no cash distributions from us.
8 unchanged sentences
In the taxable period in which a unitholder sells its units, such unitholder may recognize ordinary income from our allocations of income and gain to such unitholder prior to the sale and from recapture items that generally cannot be offset by any capital loss recognized upon the sale of units.
+Added: Index to Financial Statements
Unitholders may be subject to limitation on their ability to deduct interest expense incurred by us.
In general, we are entitled to a deduction for interest paid or accrued on indebtedness properly allocable to our trade or business during our taxable year.
−Removed: However, for taxable years beginning after December 31, 2017, our deduction for “business interest” is limited to the sum of our business interest income and 30% of our “adjusted taxable income.” For the purposes of this limitation, our adjusted taxable income is computed without regard to any business interest expense or business interest income.
+Added: However, our deduction for “business interest” is limited to the sum of our business interest income and 30% of our “adjusted taxable income.” For the purposes of this limitation, our adjusted taxable income is computed without regard to any business interest expense or business interest income.
If our “business interest” is subject to limitation under these rules, our unitholders will be limited in their ability to deduct their share of any interest expense that has been allocated to them.
4 unchanged sentences
federal income tax, including IRAs and other retirement plans, will be unrelated business taxable income and will be taxable to them.
+Added: Additionally, all or part of any gain recognized by such tax-exempt organization upon a sale or other disposition of our units may be unrelated business taxable income and may be taxable to them.
Tax-exempt entities should consult a tax advisor before investing in our common units.
4 unchanged sentences
It also could affect the timing of these tax benefits or the amount of gain from the sale of common units and could have a negative impact on the value of our common units or result in audit adjustments to our unitholders’ tax returns.
−Removed: Index to Financial Statement s
Our unitholders will likely be subject to state, local and non-U.S.
7 unchanged sentences
federal, state, local and non-U.S.
−Removed: tax returns, as applicable.
+Added: tax returns, as applicable, and pay any taxes due in these jurisdictions.
Unitholders should consult with their own tax advisors regarding the filing of such tax returns, the payment of such taxes, and the deductibility of any taxes paid.
6 unchanged sentences
It also could affect the amount of gain from our unitholders’ sale of common units and could have a negative impact on the value of the common units or result in audit adjustments to our unitholders’ tax returns without the benefit of additional deductions.
+Added: Index to Financial Statements
A unitholder whose common units are the subject of a securities loan (e.g., a loan to a “short seller” to cover a short sale of common units) may be considered to have disposed of those common units.
8 unchanged sentences
We generally prorate our items of income, gain, loss and deduction between transferors and transferees of our units each month based upon the ownership of our units on the first day of each month (the “Allocation Date”), instead of on the basis of the date a particular unit is transferred.
−Removed: Similarly, we generally allocate certain deductions for (i) depreciation and amortization of capital additions, (ii) gain or loss realized on a sale or other disposition of our assets, and (iii) in the discretion of the general partner, any other extraordinary item of income, gain, loss or deduction based upon ownership on the Allocation Date.
+Added: Similarly, we generally allocate (i) certain deductions for depreciation and amortization of capital additions, (ii) gain or loss realized on a sale or other disposition of our assets, and (iii) in the discretion of the general partner, any other extraordinary item of income, gain, loss or deduction based upon ownership on the Allocation Date.
Treasury Regulations allow a similar monthly simplifying convention, but such regulations do not specifically authorize all aspects of our proration method.
If the IRS were to challenge our proration method, we may be required to change the allocation of items of income, gain, loss and deduction among our unitholders.
−Removed: Index to Financial Statement s
Taxable income from our non-U.S.
6 unchanged sentences
trade or business, unitholders may not apply the 20% deduction for qualified publicly traded partnership income to that portion of our income.
+Added: Index to Financial Statements
Tax Risks to Series B Preferred Unitholders
27 unchanged sentences
federal income tax returns in order to seek a refund of such excess.
−Removed: Index to Financial Statement s
All holders of our Series B Preferred Units are urged to consult a tax advisor with respect to the consequences of owning our Series B Preferred Units.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.