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• We may not generate sufficient cash from operations following the establishment of cash reserves and payment of fees and expenses, including cost reimbursements to the General Partner, to enable us to make cash distributions on our common units at the current level.
−Removed: • An extended reduction in the demand for, or production of, natural gas or crude oil could adversely affect the demand for our services or the prices we charge for our services, which could result in a decrease in our revenues and cash available for distribution to unitholders.
+Added: • A reduction in the demand for, or production of, natural gas or crude oil could adversely affect the demand for our services or the prices we charge for our services, which could result in a decrease in our revenues and cash available for distribution to unitholders.
• We have several key customers.
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• We face significant competition that may cause us to lose market share and reduce our cash available for distribution.
−Removed: • Implementing the shared services model with Energy Transfer will be a complex and time-consuming process.
−Removed: Disruptions to our systems or operations caused by the implementation may have a material adverse impact on us.
• Our customers may choose to vertically integrate their operations by purchasing and operating their own compression fleet, increasing the number of compression units they currently own, or using alternative technologies for enhancing crude oil production, which could result in a decrease in our revenues and cash available for distribution to unitholders.
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• Our ability to fund purchases of additional compression units and expansion capital expenditures in the future is dependent on our ability to access external capital, and if we are unable to access this external capital, we may be limited in our ability to grow our operations or maintain or increase our distributions.
+Added: • Integration of assets acquired in past acquisitions or future acquisitions with our existing business can be complex, time-consuming, and costly, particularly in the case of material acquisitions such as the J-W Power Acquisition, which increased our size and expanded the geographic areas in which we operate.
+Added: A failure to successfully integrate acquired assets with our existing business in a timely manner may have a material adverse effect on our business, financial condition, results of operations, or cash available for distribution to our unitholders.
+Added: • Changes in U.S.
+Added: trade policy and the impact of tariffs, including any resulting market volatility or trade tensions, may have a material adverse effect on our business and results of operations.
Risks Related to Governmental Legislation and Regulation
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• The Partnership Agreement restricts the voting rights of unitholders owning 20% or more of our common units.
−Removed: • We may issue additional limited partner interests without the approval of unitholders, subject to certain Preferred Unit approval rights, which would dilute unitholders’ existing ownership interests and may increase the risk that we will not have sufficient available cash to maintain or increase our per-common-unit distribution level.
−Removed: • Energy Transfer may sell, and the holders of the Preferred Units have sold and may continue to sell, our common units in the public or private markets, and such sales could have an adverse impact on the trading price of our common units.
+Added: • We may issue additional limited partner interests without the approval of unitholders which would dilute unitholders’ existing ownership interests and may increase the risk that we will not have sufficient available cash to maintain or increase our per-common-unit distribution level.
+Added: • Energy Transfer and Westerman, Ltd.
+Added: may sell our common units in the public or private markets, and such sales could have an adverse impact on the trading price of our common units.
• The General Partner has a call right that may require holders of our common units to sell their common units at an undesirable time or price.
−Removed: • Unitholders may not have limited liability if a court finds that limited partner actions constitute control of our business.
−Removed: • Unitholders may have liability to repay distributions that were wrongfully distributed to them.
−Removed: • Our Partnership Agreement designates the Court of Chancery of the State of Delaware as the exclusive forum for certain types of actions and proceedings that may be initiated by our unitholders, which would limit our unitholders’ ability to choose the judicial forum for disputes with us or our General Partner’s directors, officers, or other employees.
Tax Risks to Common Unitholders
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If the Internal Revenue Service (“IRS”) were to treat us as a corporation for federal income tax purposes or if we were to become subject to material additional amounts of entity-level taxation for state tax purposes, then our cash available for distribution would be substantially reduced.
−Removed: • The tax treatment of publicly traded partnerships or an investment in our common units could be subject to potential legislative, judicial, or administrative changes or differing interpretations, possibly applied on a retroactive basis.
• Our unitholders’ share of our income will be taxable to them for federal income tax purposes even if they do not receive any cash distributions from us.
Unitholders may not receive cash distributions from us equal to their share of our taxable income or even equal to the actual tax due from them with respect to that income.
−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: • Tax gain or loss on the disposition of our common units could be more or less than expected.
+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.
• Unitholders will be subject to limitation on their ability to deduct interest expense incurred by us.
−Removed: unitholders will be subject to U.S.
−Removed: taxes and withholding with respect to their income and gain from owning our units.
• We treat each purchaser of our common units as having the same tax benefits without regard to the actual common units purchased.
The IRS may challenge this treatment, which could adversely affect the value of our common units.
−Removed: • We generally prorate our items of income, gain, loss, and deduction for federal income tax purposes between transferors and transferees of our units each month based on the ownership of our units on the first day of each month,
−Removed: instead of on the basis of the date a particular unit is transferred.
+Added: • We generally prorate our items of income, gain, loss, and deduction for federal income tax purposes between transferors and transferees of our units each month based on the ownership of our units on the first day of each month, instead of on the basis of the date a particular unit is transferred.
The IRS may challenge this treatment, which could change the allocation of items of income, gain, loss, and deduction among our unitholders.
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• As a result of investing in our common units, you will likely become subject to state and local taxes and income tax return filing requirements in jurisdictions where we operate or own or acquire properties.
+Added: • We may have subsidiaries that will be treated as corporations for federal income tax purposes and subject to corporate-level income taxes.
Risks Related to Our Business
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To make cash distributions at our current distribution rate of $0.525 per common unit per quarter, or $2.10 per common unit per year, we will require available cash of $76.1 million per quarter, or $304.4 million per year, based on the number of common units outstanding as of February 12, 2026.
−Removed: Furthermore, our Second Amended and Restated Agreement of Limited Partnership (the “Partnership Agreement”) prohibits us from paying distributions on our common units unless we have first paid the quarterly distribution on the Preferred Units, including any previously accrued but unpaid distributions on the Preferred Units.
−Removed: The Preferred Unit distributions require $4.4 million quarterly, or $17.6 million annually, based on the number of Preferred Units outstanding as of February 6, 2025 and the distribution rate of $24.375 per Preferred Unit per quarter, or $97.50 per Preferred Unit per year.
Under our cash distribution policy, the amount of cash we can distribute to our unitholders principally depends on the amount of cash we generate from our operations, which will fluctuate from quarter to quarter based on, among other things:
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• the cost of achieving organic growth in current and new markets;
−Removed: • the ability to effectively integrate any assets or businesses we acquire;
+Added: • the ability to effectively integrate any assets or businesses we acquire, including the J-W Power Acquisition;
• the level of competition from other companies;
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• the amount of cash reserves established by the General Partner.
−Removed: An extended reduction in the demand for, or production of, natural gas or crude oil could adversely affect the demand for our services or the prices we charge for our services, which could result in a decrease in our revenues and cash available for distribution to unitholders.
+Added: A reduction in the demand for, or production of, natural gas or crude oil could adversely affect the demand for our services or the prices we charge for our services, which could result in a decrease in our revenues and cash available for distribution to unitholders.
The demand for our compression services depends on the continued demand for, and production of, natural gas and crude oil.
Demand may be affected by, among other factors, natural gas prices, crude oil prices, weather, availability of alternative energy sources, governmental regulation, geopolitical events, global health pandemics, and the overall demand for energy.
−Removed: Any extended reduction in the demand for natural gas or crude oil could depress the level of production activity and result in a decline in the demand for our compression services, which could result in a reduction in our revenues and our cash available for distribution.
−Removed: In particular, lower natural gas or crude oil prices over the long term could result in a decline in the production of natural gas or crude oil, respectively, resulting in reduced demand for our compression services.
−Removed: For example, in 2020, the price of crude oil declined rapidly beginning in March of that year.
−Removed: During 2020, the North American rig count reached a low of 247 rigs in August of 2020, down from 790 rigs at the end of January of that year, the price of WTI crude oil briefly went negative in April 2020, down from $51.58 per barrel at the end of January of that year, and Henry Hub natural gas spot reached a low of $1.33 per MMBtu in September 2020, down from $1.91 per MMBtu at the end of January of that year.
−Removed: The decline in commodity prices and the demand for and production of crude oil and natural gas resulted in a decline in the demand for our compression services, which caused a reduction of our revenues and our cash available for distribution.
+Added: Any extended reduction in the demand for natural gas or crude oil could depress the level of production activity and result in a decline in the demand for our compression services, which has in the past and in the future could result in a reduction in our revenues and our cash available for distribution.
+Added: Additionally, as a result of the J-W Power Acquisition, we own and operate specialized manufacturing facilities for the manufacture of compression units.
+Added: The demand for these products is similarly affected by the production levels of natural gas and crude oil, and may be negatively affected even by a short-term decline in production.
+Added: Our customers could seek to preserve capital or reduce expenses by using lower-cost providers of compression services, not renewing month-to-month contracts, determining not to enter into any new compression service contracts, seeking lower contract prices for our services, or delaying or eliminating orders for the manufacture of compression units.
In addition, a portion of our fleet is used in gas lift applications in connection with crude oil production using horizontal drilling techniques.
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All of these competitive pressures could have a material adverse effect on our business, results of operations, financial condition, and cash available for distribution.
−Removed: Implementing the shared services model with Energy Transfer will be a complex and time-consuming process.
−Removed: Disruptions to our systems or operations caused by the implementation may have a material adverse impact on us.
−Removed: We are currently implementing a shared services model with Energy Transfer whereby we intend to share personnel and resources with Energy Transfer in certain departments, including information technology, accounting, and human resources.
−Removed: Integrating these functions with Energy Transfer will require substantial time, resources, and coordination.
−Removed: This could result in significant disruptions or require a disproportionate amount of our management’s attention, and may result in unforeseen
−Removed: operational or administrative difficulties or costs.
−Removed: We may encounter significant delays to this integration, which would further exacerbate these effects.
−Removed: We may also encounter difficulties in integrating our personnel with Energy Transfer’s teams, and may lose key employees.
−Removed: Additionally, as part of the shared services integration, many of our information systems will migrate to Energy Transfer’s enterprise resource planning (“ERP”) systems.
−Removed: This migration may result in significant disruptions to our accounting or other internal systems, including our ability maintain effective systems of internal control over financial reporting and disclosure controls.
−Removed: If any of these risks or any other unanticipated complications were to materialize, we may not realize the desired benefits from the shared services integration, such as operational and administrative synergies and cost reductions, which could result in a negative impact on our cash flows.
−Removed: Additionally, disruptions to our internal systems, including our internal control over financial reporting, could negatively impact our business, results of operations and financial condition.
Our customers may choose to vertically integrate their operations by purchasing and operating their own compression fleet, increasing the number of compression units they currently own, or using alternative technologies for enhancing crude oil production, which could result in a decrease in our revenues and cash available for distribution to unitholders.
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In addition, there are many technologies available for the artificial enhancement of crude oil production, and our customers may elect to use these alternative technologies instead of the gas lift compression services we provide.
−Removed: Such vertical integration, increases in vertical integration, or use of alternative technologies could result in decreased demand for our compression services, which may have a material adverse effect on our business, results of operations, financial condition, and reduce our cash available for distribution.
+Added: Such vertical integration, increases in vertical integration, or use of alternative technologies could result in decreased demand for our
+Added: compression services, which may have a material adverse effect on our business, results of operations, financial condition, and reduce our cash available for distribution.
A significant portion of our services are provided to customers on a month-to-month basis, and we cannot be sure that such customers will continue to utilize our services.
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As of December 31, 2025, we had $2.5 billion of total debt, net of amortized deferred financing costs, outstanding under our Credit Agreement and Senior Notes.
−Removed: The Credit Agreement has an aggregate commitment of $1.6 billion (subject to availability under our borrowing base).
−Removed: The Credit Agreement matures on December 8, 2026.
−Removed: As of December 31, 2024, we had outstanding borrowings under the Credit Agreement of $772.1 million and, after accounting for outstanding letters of credit in the amount of $0.8 million, $827.1 million of remaining unused availability of which, due to restrictions related to compliance with the applicable financial covenants, $782.5 million was available to be drawn.
−Removed: As of December 31, 2024, we had $750.0 million and $1.0 billion aggregate principal amount outstanding on our Senior Notes 2027 and Senior Notes 2029, respectively.
+Added: The Credit Agreement has an aggregate commitment of up to $1.75 billion (subject to availability under our borrowing base), with a further potential increase of up to an additional $300 million.
+Added: The Credit Agreement matures on August 27, 2030, except that if more than $50.0 million of the Senior Notes 2029 are outstanding on December 14, 2028, the Credit Agreement will mature on December 14, 2028.
+Added: As of December 31, 2025, we had outstanding borrowings under the Credit Agreement of $795.0 million and, after accounting for outstanding letters of credit in the amount of $0.8 million, $954.2 million of remaining unused availability, all of which was available to be drawn, inclusive of restrictions related to compliance with applicable financial covenants.
+Added: As of February 12, 2026, we had outstanding borrowings under the Credit Agreement of $1.3 billion and outstanding letters of credit of $2.0 million.
+Added: As of December 31, 2025, we had $1.0 billion and $750.0 million aggregate principal amount outstanding on our Senior Notes 2029 and Senior Notes 2033, respectively.
The Senior Notes 2029 and Senior Notes 2033 accrue interest at the rate of 7.125% and 6.250% per year, respectively.
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As of December 31, 2025, our leverage ratio under the Credit Agreement was 4.00x.
−Removed: Financial covenants in the
−Removed: Credit Agreement permit a maximum leverage ratio of 5.25 to 1.00 (except that we may increase the applicable Total Leverage Ratio by 0.25 for any fiscal quarter during which a Specified Acquisition (as defined in the Credit Agreement) occurs and the following two fiscal quarters, but in no event shall the maximum Total Leverage Ratio exceed 5.50 to 1.00 for any fiscal quarter as a result of such increase);
+Added: Financial covenants in the Credit Agreement require us to maintain a leverage ratio of not greater than 5.50 to 1.00 or less than 0.00 to 1.00;
an Interest Coverage Ratio (as defined in the Credit Agreement) of not less than 2.50 to 1.00;
and a Secured Leverage Ratio (as defined in the Credit Agreement) of not greater than 3.00 to 1.00 or less than 0.00 to 1.00.
−Removed: As of February 6, 2025, we had outstanding borrowings under the Credit Agreement of $801.5 million and outstanding letters of credit of $0.8 million.
Our level of debt could have important consequences to us, including the following:
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While the U.S.
−Removed: Federal Reserve has begun lowering interest rates, macroeconomic circumstances may change, resulting in delays or reversal of such actions, which may result in a prolonged high-interest rate environment.
+Added: Federal Reserve has lowered interest rates recently, macroeconomic circumstances may change, resulting in delays or reversal of such actions, which may result in a prolonged high-interest rate environment.
Any substantial increase in the interest rates applicable to our variable-rate indebtedness outstanding could have a material negative impact on our cash available for distribution.
−Removed: Based on our December 31, 2024, variable-rate indebtedness outstanding, a one percent increase in the effective interest rate would result in an annual increase in our interest expense of approximately $7.7 million.
+Added: Based on our December 31, 2025, variable-rate indebtedness
+Added: outstanding, a one percent increase in the effective interest rate would result in an annual increase in our interest expense of approximately $8.0 million.
If our operating results are not sufficient to service our current or future indebtedness, we could be forced to take actions such as reducing the level of distributions on our common units, curtailing or delaying our business activities, acquisitions, investments or capital expenditures, selling assets, restructuring or refinancing our debt, or seeking additional equity capital.
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In addition, supply chain disruptions (including those caused by geopolitical events) may harm our suppliers and further complicate existing supply chain constraints.
−Removed: We also rely primarily on three vendors, A G Equipment Company, Alegacy Equipment, LLC., and Standard Equipment Company, to package and assemble our compression units.
+Added: We also rely on a limited number of vendors, including Standard Equipment Company, a subsidiary of Energy Transfer, to package and assemble our compression units.
We do not have long-term contracts with these suppliers or packagers, and a partial or complete loss of any of these sources could have a negative impact on our results of operations and could damage our customer relationships.
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To the extent we are unable to finance growth through external sources efficiently, our ability to maintain or increase the level of distributions on our common units could be significantly impaired.
−Removed: In addition, because we distribute all of our available cash, excluding prudent operating reserves, we may not grow as quickly as businesses that are able to reinvest their available cash to expand ongoing operations.
−Removed: There are no limitations in the Partnership Agreement on our ability to issue additional equity securities, including securities ranking senior to the common units, subject to certain restrictions in the Partnership Agreement limiting our ability to issue units senior to or pari passu with the Preferred Units.
+Added: In addition, because we distribute all of our available cash, excluding prudent
+Added: operating reserves, we may not grow as quickly as businesses that are able to reinvest their available cash to expand ongoing operations.
+Added: There are no limitations in the Partnership Agreement on our ability to issue additional equity securities, including securities ranking senior to the common units.
To the extent we issue additional equity securities, including common units and preferred units, the payment of distributions on those additional securities may increase the risk that we will be unable to maintain or increase our per-common-unit distribution level.
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Please read Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Revolving Credit Facility and – Senior Notes”.
−Removed: The deterioration of the financial condition of our customers could adversely affect our business.
−Removed: During times when the natural gas or crude oil markets weaken our customers are more likely to experience financial difficulties, including being unable to access debt or equity financing, which could result in a reduction in our customers’ spending for our services.
−Removed: For example, our customers could seek to preserve capital or reduce expenses by using lower-cost providers of compression services, not renewing month-to-month contracts, determining not to enter into any new compression service contracts, or seeking lower contract prices for our services.
−Removed: A significant decline in commodity prices may cause certain of our customers to reconsider their near-term capital budgets, which may impact large-scale natural gas infrastructure and crude oil production activities.
−Removed: Reduced demand for our services could adversely affect our business, results of operations, financial condition, and cash flows.
+Added: Integration of assets acquired in past acquisitions or future acquisitions with our existing business can be complex, time-consuming, and costly, particularly in the case of material acquisitions such as the J-W Power Acquisition, which increased our size and expanded the geographic areas in which we operate.
+Added: A failure to successfully integrate acquired assets with our existing business in a timely manner may have a material adverse effect on our business, financial condition, results of operations, or cash available for distribution to our unitholders.
+Added: The difficulties of integrating past and future acquisitions with our business include, among other things:
+Added: • operating a larger combined organization in new geographic areas and new lines of business;
+Added: • hiring, training, or retaining qualified personnel to manage and operate our growing business and assets;
+Added: • integrating management teams and employees into existing operations and establishing effective communication and information exchange with such management teams and employees;
+Added: • diversion of management’s attention from our existing business;
+Added: • assimilation of acquired assets and operations, including additional regulatory programs;
+Added: • loss of customers;
+Added: • loss of key employees;
+Added: • maintaining an effective system of internal controls in compliance with the Sarbanes-Oxley Act of 2002 as well as other regulatory compliance and corporate governance matters;
+Added: • integrating new technology systems for financial reporting.
+Added: If any of these risks or other unanticipated liabilities or costs were to materialize, we may not realize the desired benefits from past and future acquisitions, resulting in a negative impact on our results of operations.
+Added: We may not be successful in integrating acquisitions, including the J-W Power Acquisition, into our existing operations within our anticipated time frame, which may result in unforeseen operational difficulties, diminished financial performance, or require a disproportionate amount of our management’s attention.
+Added: In addition, acquired assets may perform at levels below the forecasts used to evaluate their acquisition value, due to factors beyond our control.
+Added: If the acquired assets perform at levels below the forecasts, then our future results of operations could be negatively impacted.
+Added: The J-W Power Acquisition could expose us to additional unknown and contingent liabilities.
+Added: The J-W Power Acquisition could expose us to additional unknown and contingent liabilities.
+Added: We performed due diligence in connection with the J-W Power Acquisition and attempted to verify the representations made by J-W Power, J-W Energy, and Westerman, Ltd.
+Added: in connection therewith, but there may be unknown and contingent liabilities of which we are currently unaware.
+Added: Westerman, Ltd.
+Added: has agreed to indemnify us for losses or claims relating to the operation of the business or otherwise only to a limited extent and for a limited period of time.
+Added: There is a risk that we could ultimately be liable for obligations relating to the J-W Power Acquisition for which indemnification is not available, which could materially adversely affect our business, results of operations and cash flow.
+Added: We may be unable to grow successfully through acquisitions, which may negatively impact our operations and limit our ability to maintain or increase the level of distributions on our common units.
+Added: From time to time, we may choose to make business acquisitions, such as the J-W Power Acquisition, to pursue market opportunities, increase our existing capabilities, and expand into new geographic areas of operations.
+Added: While we have reviewed acquisition opportunities in the past and will continue to do so in the future, we may not be able to identify attractive acquisition opportunities or successfully acquire identified targets.
+Added: Any acquisitions we do complete may require us to issue a substantial amount of equity or incur a substantial amount of indebtedness.
+Added: If we consummate any future material acquisitions, our capitalization may change significantly, and unitholders will not have the opportunity to evaluate the economic, financial, and other relevant information that we will consider in connection with any future acquisition.
+Added: Furthermore, competition for acquisition opportunities may escalate, increasing our costs of pursuing acquisitions or causing us to refrain from making acquisitions.
+Added: Also, our reviews of proposed business or asset acquisitions are inherently imperfect because generally it is not feasible to perform an in-depth review of each such proposal given time constraints imposed by sellers.
+Added: Even if performed, a detailed review of assets and businesses may not reveal existing or potential problems, and may not provide sufficient familiarity with such business or assets to fully assess their deficiencies and potential.
+Added: Inspections may not be performed on every asset, and environmental problems, such as groundwater contamination, may not be observable even when an inspection is undertaken.
We are exposed to counterparty credit risk.
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We therefore are subject to heightened risks of loss resulting from nonpayment or nonperformance by our customers, suppliers, and vendors.
−Removed: Severe financial problems encountered by our customers, suppliers, and vendors could limit our ability to collect amounts owed to us, or to enforce the performance of obligations owed to us under contractual arrangements.
+Added: Severe financial problems encountered by our customers, suppliers, and vendors could limit our ability to collect amounts owed to us,
+Added: or to enforce the performance of obligations owed to us under contractual arrangements.
In the event that any of our customers was to enter into bankruptcy, we could lose all or a portion of the amounts owed to us by such customer, and we may be forced to cancel all or a portion of our service contracts with such customer at significant expense to us.
−Removed: For example, as of December 31, 2024, two customers accounted for 12% and 11% of our trade accounts receivable, net balance, respectively.
−Removed: If these customers were to enter bankruptcy or failed to pay us, it could adversely affect our business, results of operations, financial condition, and cash flows.
+Added: For example, as of December 31, 2025 and 2024, one customer accounted for 12% and 11% of our trade accounts receivable, net balance, respectively.
+Added: If this customer were to enter bankruptcy or failed to pay us, it could adversely affect our business, results of operations, financial condition, and cash flows.
In addition, nonperformance by suppliers or vendors who have committed to provide us with critical products or services could raise our costs or interfere with our ability to successfully conduct our business.
−Removed: The Preferred Units have rights, preferences, and privileges that are not held by, and are preferential to the rights of, holders of our common units.
−Removed: The Preferred Units rank senior to our common units with respect to distribution rights and rights upon liquidation.
−Removed: These preferences could adversely affect the market price for our common units, or could make it more difficult for us to sell our common units in the future.
−Removed: In addition, distributions on the Preferred Units accrue and are cumulative, at the rate of 9.75% per annum on the original issue price, which amounts to a quarterly distribution of $24.375 per Preferred Unit, or $97.50 per Preferred Unit per year.
−Removed: If we do not pay the required distributions on the Preferred Units, we will be unable to pay distributions on our common units.
−Removed: Additionally, because distributions on the Preferred Units are cumulative, we will have to pay all unpaid accumulated distributions on the Preferred Units before we can pay any distributions on our common units.
−Removed: Also, because distributions on our common units are not cumulative, if we do not pay distributions on our common units with respect to any quarter, our
−Removed: common unitholders will not be entitled to receive distributions covering any prior periods if we later recommence paying distributions on our common units.
−Removed: The Preferred Units are convertible into common units in accordance with the terms of the Partnership Agreement by the holders of the Preferred Units or by us in certain circumstances.
−Removed: In 2024, holders of our Preferred Units converted an aggregate of 320,000 Preferred Units.
−Removed: Our obligation to pay distributions on the Preferred Units, or on the common units issued following the conversion of the Preferred Units, could impact our liquidity and reduce the amount of cash flow available for working capital, capital expenditures, growth opportunities, acquisitions, and other general Partnership purposes.
−Removed: Our obligations to the holders of the Preferred Units also could limit our ability to obtain additional financing or increase our borrowing costs, which could have an adverse effect on our financial condition.
−Removed: See Note 11 to our consolidated financial statements in Part II, Item 8 “Financial Statements and Supplementary Data”.
−Removed: Restrictions in the Partnership Agreement related to the Preferred Units may limit our ability to make distributions to our common unitholders and our ability to capitalize on acquisition and other business opportunities.
−Removed: The operating and financial restrictions and covenants in the Partnership Agreement related to the Preferred Units could restrict our ability to finance future operations or capital needs, or to expand or pursue our business activities.
−Removed: The Partnership Agreement restricts or limits our ability (subject to certain exceptions) to:
−Removed: • pay distributions on any junior securities, including our common units, prior to paying the quarterly distribution payable to the holders of the Preferred Units, including any previously accrued and unpaid distributions;
−Removed: • issue any securities that rank senior to or pari passu with the Preferred Units;
−Removed: however, we will be able to issue an unlimited number of securities ranking junior to the Preferred Units, including junior preferred units and additional common units;
−Removed: • incur Indebtedness (as defined in the Credit Agreement) if, after giving pro forma effect to such incurrence, the Leverage Ratio (as defined in the Credit Agreement) determined as of the last day of the most recently ended fiscal quarter would exceed 6.5x, subject to certain exceptions.
A prolonged or severe sudden downturn in the economic environment could cause an impairment of identifiable intangible assets and reduce our earnings.
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These events could cause us to record impairments of identifiable intangible assets.
−Removed: For example, for the year ended December 31, 2020, we recognized a $619.4 million impairment of goodwill as a result of an economic downturn that occurred that year.
If we determine that any of our identifiable intangible assets are impaired, we will be required to take an immediate charge to earnings with a corresponding reduction of partners’ capital resulting in an increase in balance sheet leverage as measured by debt to total capitalization.
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Events and conditions that could result in impairment in the value of our long-lived assets include changes in the industry in which we operate, competition, advances in technology, adverse changes in the regulatory environment, or other factors leading to a reduction in our expected long-term profitability.
−Removed: For example, for the years ended December 31, 2024, 2023, and 2022, we evaluated the future deployment of our idle fleet assets under current market conditions and retired 2, 42, and 15 compression units, respectively, representing approximately 1,260, 37,700, and 3,200 of aggregate horsepower, respectively, that previously were used to provide compression services in our business.
−Removed: As a result, we recorded impairments of compression equipment of $0.3 million, $12.3 million, and $1.5 million for the years ended December 31, 2024, 2023, and 2022, respectively.
−Removed: Additionally, for the year ended December 31, 2024, we recognized a $0.6 million impairment of assets related to capitalized software costs that are no longer expected to provide benefit.
+Added: For example, for the years ended December 31, 2025, 2024, and 2023, we evaluated the future deployment of our idle fleet assets under current market conditions and retired 28, 2, and 42 compression and treating units, respectively, representing approximately 19,005, 1,260, and 37,700 of aggregate horsepower, respectively, that previously were used to provide compression and treating services in our business.
+Added: As a result, we recorded impairments of compression and treating equipment of $7.8 million, $0.3 million, and $12.3 million for the years ended December 31, 2025, 2024, and 2023, respectively.
+Added: Changes in U.S.
+Added: trade policy and the impact of tariffs, including any resulting market volatility or trade tensions, may have a material adverse effect on our business and results of operations.
+Added: Our business and results of operations may be adversely affected by uncertainty and changes in U.S.
+Added: trade policies, including tariffs, trade agreements or other trade restrictions imposed by the U.S.
+Added: or other governments.
+Added: For example, on March 12, 2025, the U.S.
+Added: government imposed a 25% tariff on steel imports, which was increased to 50% on June 4, 2025, and on April 2, 2025, the U.S.
+Added: government announced a 10% tariff on product imports from almost all foreign countries and individualized higher tariffs on certain other countries.
+Added: Several tariff announcements have been followed by announcements of limited exemptions and temporary pauses.
+Added: These actions have caused uncertainty and volatility in financial markets and may result in retaliatory measures on U.S.
+Added: Steel is a necessary component to build our compression units, and we require various other materials and equipment to operate and maintain our compression units.
+Added: Any imposition of or increase in tariffs on imports of steel or other materials or equipment utilized in our business, as well as corresponding price increases for such materials available domestically, could increase the costs to purchase new compression units, manufacture compression units, and to maintain our operations.
+Added: Additionally, any escalation of trade tensions, retaliatory measures by foreign governments, or shifts in U.S.
+Added: or international trade policies could adversely impact our supply chain and increase costs.
+Added: We may not be able to fully pass along the cost increases to our customers, which could materially and adversely affect our business and results of operations.
+Added: Additionally, our customers may be also affected by tariffs and the resulting volatility in pricing and demand, which could in turn affect demand for our services.
+Added: Similarly, declines in consumer confidence and/or consumer spending, changes in unemployment, significant inflationary or deflationary changes or disruptive regulatory or geopolitical events could contribute to increased volatility and diminished expectations for the economy, including the market for our services, and lead to demand or cost pressures that could negatively and adversely impact our business.
+Added: Volatility in the capital markets could also limit our ability to access capital on favorable terms, which could have an adverse impact on our ability to grow our business.
+Added: The nature of these types of risks, which are often unpredictable, makes them difficult to plan for, or otherwise mitigate, and they are generally uninsurable, which compounds their potential impact on our business and results of operations.
Our ability to manage and grow our business effectively may be adversely affected if we lose key management or operational personnel.
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Our ability to grow or even to continue our current level of service to our current customers could be adversely impacted if we are unable to successfully hire, train, and retain these important personnel.
−Removed: We may be unable to grow successfully through acquisitions, which may negatively impact our operations and limit our ability to maintain or increase the level of distributions on our common units.
−Removed: From time to time, we may choose to make business acquisitions to pursue market opportunities, increase our existing capabilities, and expand into new geographic areas of operations.
−Removed: While we have reviewed acquisition opportunities in the past and will continue to do so in the future, we may not be able to identify attractive acquisition opportunities or successfully acquire identified targets.
−Removed: Any acquisitions we do complete may require us to issue a substantial amount of equity or incur a substantial amount of indebtedness.
−Removed: If we consummate any future material acquisitions, our capitalization may change significantly, and unitholders will not have the opportunity to evaluate the economic, financial, and other relevant information that we will consider in connection with any future acquisition.
−Removed: Furthermore, competition for acquisition opportunities may escalate, increasing our costs of pursuing acquisitions or causing us to refrain from making acquisitions.
−Removed: Also, our reviews of proposed business or asset acquisitions are inherently imperfect because generally it is not feasible to perform an in-depth review of each such proposal given time constraints imposed by sellers.
−Removed: Even if performed, a detailed review of assets and businesses may not reveal existing or potential problems, and may not provide sufficient familiarity with such business or assets to fully assess their deficiencies and potential.
−Removed: Inspections may not be performed on every asset, and environmental problems, such as groundwater contamination, may not be observable even when an inspection is undertaken.
−Removed: Integration of assets acquired in future acquisitions with our existing business can be complex, time-consuming, and costly, particularly in the case of material acquisitions such as the CDM Acquisition, which significantly increased our size and expanded the geographic areas in which we operate.
−Removed: A failure to successfully integrate acquired assets with our existing business in a timely manner may have a material adverse effect on our business, financial condition, results of operations, or cash available for distribution to our unitholders.
−Removed: The difficulties of integrating future acquisitions with our business include, among other things:
−Removed: • operating a larger combined organization in new geographic areas and new lines of business;
−Removed: • hiring, training, or retaining qualified personnel to manage and operate our growing business and assets;
−Removed: • integrating management teams and employees into existing operations and establishing effective communication and information exchange with such management teams and employees;
−Removed: • diversion of management’s attention from our existing business;
−Removed: • assimilation of acquired assets and operations, including additional regulatory programs;
−Removed: • loss of customers;
−Removed: • loss of key employees;
−Removed: • maintaining an effective system of internal controls in compliance with the Sarbanes-Oxley Act of 2002 as well as other regulatory compliance and corporate governance matters;
−Removed: • integrating new technology systems for financial reporting.
−Removed: If any of these risks or other unanticipated liabilities or costs were to materialize, we may not realize the desired benefits from past and future acquisitions, resulting in a negative impact on our results of operations.
−Removed: For example, subsequent to the CDM Acquisition the attrition rate of specialized field technicians exceeded our projections and, as a result, we incurred
−Removed: unanticipated costs in 2018 to utilize third-party contractors to service our compression units at a greater cost than we would have incurred to compensate employees to perform the same work.
−Removed: We may not be successful in integrating acquisitions into our existing operations within our anticipated time frame, which may result in unforeseen operational difficulties, diminished financial performance, or require a disproportionate amount of our management’s attention.
−Removed: In addition, acquired assets may perform at levels below the forecasts used to evaluate their acquisition value, due to factors beyond our control.
−Removed: If the acquired assets perform at levels below the forecasts, then our future results of operations could be negatively impacted.
−Removed: The CDM Acquisition could expose us to additional unknown and contingent liabilities, which liabilities could materially adversely affect our business, results of operations, and cash flow.
−Removed: The CDM Acquisition could expose us to additional unknown and contingent liabilities.
−Removed: We performed due diligence in connection with the CDM Acquisition and attempted to verify the representations made by Energy Transfer in connection therewith, but there may be unknown and contingent liabilities of which we are currently unaware.
−Removed: Energy Transfer has agreed to indemnify us for losses or claims relating to the operation of the business or otherwise only to a limited extent and for a limited period of time, and certain of Energy Transfer’s indemnification obligations have lapsed.
−Removed: There is a risk that we could ultimately be liable for obligations relating to the CDM Acquisition for which indemnification is not available, which could materially adversely affect our business, results of operations, and cash flow.
+Added: Implementing the shared services model with Energy Transfer has been and will continue to be a complex and time-consuming process.
+Added: Disruptions to our systems or operations caused by the implementation may have a material adverse impact on us.
+Added: We continue to implement a shared services model with Energy Transfer whereby we share personnel and resources with Energy Transfer in certain departments, including information technology, accounting, and human resources.
+Added: Integrating these functions with Energy Transfer has required, and will continue to require, substantial time, resources, and coordination.
+Added: This could result in significant disruptions or require a disproportionate amount of our management’s attention, and may result in unforeseen operational or administrative difficulties or costs.
+Added: We may encounter significant delays to this integration, which would further exacerbate these effects.
+Added: Additionally, as part of the shared services integration, many of our information systems have migrated to Energy Transfer’s enterprise resource planning (“ERP”) systems.
+Added: This migration may result in significant disruptions to our accounting or other internal systems, including our ability maintain effective systems of internal control over financial reporting and disclosure controls.
+Added: If any of these risks or any other unanticipated complications were to materialize, we may not realize the desired benefits from the shared services integration, such as operational and administrative synergies and cost reductions, which could result in a negative impact on our cash flows.
+Added: Additionally, disruptions to our internal systems, including our internal control over financial reporting, could negatively impact our business, results of operations and financial condition.
+Added: We may be subject to product liability claims if people or property are harmed by the compression units we package.
+Added: As a result of the J-W Power Acquisition, we own and operate specialized manufacturing facilities for the manufacture of compression units that support our internal operations and those of third-party customers.
+Added: We face an inherent risk of product liability exposure related to the sale of these compression units.
+Added: We may be sued if any of these compression units allegedly causes injury.
+Added: Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability, and a breach of warranties.
+Added: If we cannot successfully defend ourselves against claims that our product caused injuries, we may incur substantial liabilities.
+Added: Regardless of merit or eventual outcome, liability claims may result in injury to our reputation, significant costs to defend the related litigation, distraction to our management team, substantial monetary awards to plaintiffs, and loss of revenue.
+Added: We cannot be certain that our insurance coverage will be adequate for liabilities actually incurred or that insurance will continue to be available to us on commercially reasonable terms, or at all.
+Added: As a result of these factors, a product liability claim, even if successfully defended, could have a material adverse effect on our business or results of operations.
From time to time, we are subject to various claims, tax audits, litigation, and other proceedings that could ultimately be resolved against us and require material future cash payments or charges, which could impair our financial condition or results of operations.
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We are currently, and may in the future become, subject to various claims, which, if not resolved within amounts we have accrued, if any, could have a material adverse effect on our financial position, results of operations, or cash flows, including our ability to pay distributions.
−Removed: Similarly, any claims, even if fully indemnified or insured, could negatively impact our reputation among our customers and the public, and make it more difficult for us to compete effectively or obtain adequate insurance in the future.
+Added: Similarly, any claims, even if fully indemnified or insured, could negatively
+Added: impact our reputation among our customers and the public, and make it more difficult for us to compete effectively or obtain adequate insurance in the future.
See Part I, Item 3 “Legal Proceedings” and Note 17 to our consolidated financial statements in Part II, Item 8 “Financial Statements and Supplementary Data” for additional information regarding certain proceedings to which we are a party.
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These permits and authorizations frequently contain numerous compliance requirements, including monitoring and reporting obligations and operational restrictions, such as emissions limits.
−Removed: Given the wide variety of locations in which we operate, and the numerous environmental permits and other authorizations that
−Removed: are applicable to our operations, we may occasionally identify or be notified of technical violations of certain requirements existing under various permits or other authorizations.
+Added: Given the wide variety of locations in which we operate, and the numerous environmental permits and other authorizations that are applicable to our operations, we may occasionally identify or be notified of technical violations of certain requirements existing under various permits or other authorizations.
We could be subject to penalties for any noncompliance in the future.
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New regulations or proposed modifications to existing regulations under the Clean Air Act (“CAA”), as discussed in detail in Item 1 “Business – Our Operations – Governmental Regulations”, may lead to adverse impacts on our business, financial condition, results of operations, and cash available for distribution.
−Removed: For example, in 2015, the EPA finalized a rule strengthening the primary and secondary National Ambient Air Quality Standards (“NAAQS”) for ground level ozone, both of which are eight-hour concentration standards of 70 parts per billion (the “2015 NAAQS”).
+Added: For example, in 2015, the EPA finalized a rule strengthening the primary and secondary National Ambient Air Quality Standards (“NAAQS”) for ground level ozone, both of
+Added: which are eight-hour concentration standards of 70 parts per billion (the “2015 NAAQS”).
In December 2020, the EPA announced its decision to retain, without changes, the 2015 NAAQS.
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Congress, from time to time, has considered legislation to reduce GHG emissions.
−Removed: In August 2022, the IRA 2022 was passed, which imposes a methane emissions charge on certain oil and gas facilities, including onshore petroleum and natural gas production facilities, that emit 25,000 metric tons or more of carbon dioxide equivalent gas per year and exceed certain
−Removed: emissions thresholds.
−Removed: In November 2024, the EPA issued a final rule to impose and collect the methane emissions charge authorized under the IRA 2022.
+Added: In August 2022, the IRA 2022 was passed, which imposed a methane emissions charge on certain oil and gas facilities, including onshore petroleum and natural gas production facilities, that emit 25,000 metric tons or more of carbon dioxide equivalent gas per year and exceed certain emissions thresholds.
+Added: The One Big Beautiful Bill Act, signed by President Trump on July 4, 2025, delays the imposition of the methane emissions charge until calendar year 2034.
In addition, federal or state governmental agencies could seek to pursue legislative, regulatory, or executive initiatives that restrict GHG emissions.
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Although a number of these lawsuits have been dismissed, others remain pending and the outcome of these cases remains difficult to predict.
−Removed: Although it is not currently possible to predict with specificity how the IRA 2022 or any proposed or future GHG legislation, regulation, agreements, or initiatives will impact our business, any legislation or regulation of GHG emissions that may be imposed in areas in which we conduct business or on the assets we operate, including a carbon tax or cap-and-trade program, could result in increased compliance or operating costs, additional operating restrictions, or reduced demand for our services, and could have a material adverse effect on our business, financial condition, and results of operations.
+Added: Although it is not currently possible to predict with specificity how any proposed or future GHG legislation, regulation, agreements, or initiatives will impact our business, any legislation or regulation of GHG emissions that may be imposed in areas in which we conduct business or on the assets we operate, including a carbon tax or cap-and-trade program, could result in increased compliance or operating costs, additional operating restrictions, or reduced demand for our services, and could have a material adverse effect on our business, financial condition, and results of operations.
Climate change may increase the frequency and severity of weather events that could result in severe personal injury, property damage, and environmental damage, which could curtail our or our customers’ operations and otherwise materially adversely affect our cash flows.
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These factors include, among others, the potential adoption of new government regulations, including those related to fuel conservation measures and climate change regulations, technological advances in fuel economy, and energy generation devices.
−Removed: For example, legislative, regulatory, or executive actions intended to reduce emissions of GHGs, such as the IRA 2022, could increase the cost of consuming crude oil and natural gas, or provide incentives to encourage alternative forms of energy, thereby potentially causing a reduction in the demand for crude oil and natural gas.
+Added: For example, legislative, regulatory, or executive actions intended to reduce emissions of GHGs could increase the cost of consuming crude oil and natural gas, or provide incentives to encourage alternative forms of energy, thereby potentially causing a reduction in the demand for crude oil and natural gas.
A broader transition to alternative fuels or energy sources, whether resulting from potential new government regulation, carbon taxes, or consumer preferences, could result in decreased demand for crude oil, natural gas, and NGLs.
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Also, recent activism directed at shifting funding away from companies with energy-related assets could result in a reduction of funding for the energy sector overall, which could have an adverse effect on our ability to obtain external financing as well as negatively affect the cost of, and terms for, financing to fund capital expenditures or other aspects of our business.
−Removed: Increased attention to ESG matters and conservation measures may adversely impact our business.
−Removed: Increasing attention to, and societal expectations on companies to address, climate change and other environmental and social impacts, investor and societal expectations regarding voluntary environmental, social, and governance (“ESG”) disclosures, and consumer demand for alternative forms of energy may result in increased costs, reduced demand for fossil fuels and consequently demand for our services, reduced profits, increased risk of investigations and litigation, and negative impacts on the value of our assets and access to capital.
+Added: Focus on ESG matters and conservation measures may adversely impact our business.
+Added: Focus on companies to address, climate change and other environmental and social impacts, investor and societal expectations regarding environmental, social, and governance (“ESG”) disclosures, and consumer demand for alternative forms of energy may result in increased costs, reduced demand for fossil fuels and consequently demand for our services, reduced profits, increased risk of investigations and litigation, and negative impacts on the value of our assets and access to capital.
Increasing attention to climate change and environmental conservation, for example, may result in demand shifts for crude oil and natural gas products, and additional governmental investigations and private litigation against us or our customers.
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In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters.
−Removed: Unfavorable ESG ratings and recent activism directed at shifting funding away from companies with energy-related assets could lead to increased negative investor sentiment toward us and our industry and to the diversion of investment to other industries, which could have a negative impact on our access to and costs of capital.
+Added: Unfavorable ESG ratings and activism directed at shifting funding away from companies with energy-related assets could lead to increased negative investor sentiment toward us and our industry and to the diversion of investment to other industries, which could have a negative impact on our access to and costs of capital.
Additionally, to the extent ESG matters negatively impact our reputation, we may not be able to compete as effectively to recruit or retain employees, which may adversely affect our operations.
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Any new laws or regulations regarding hydraulic fracturing could negatively impact our customers’ ability to produce natural gas, which could adversely impact our revenue.
−Removed: State and federal regulatory agencies also have recently focused on a possible connection between the operation of injection wells used for oil and gas waste disposal and seismic activity.
+Added: State and federal regulatory agencies also have focused on a possible connection between the operation of injection wells used for oil and gas waste disposal and seismic activity.
Similar concerns have been raised that hydraulic fracturing also may contribute to seismic activity.
When caused by human activity, such events are called induced seismicity.
−Removed: Developing research suggests that the link between seismic activity and wastewater disposal may vary by region, and that only a very small fraction of the tens of thousands of injection wells have been suspected to be, or have been, the likely cause of induced seismicity.
−Removed: In March 2016, the U.S.
−Removed: Geological Survey identified six states with the most significant hazards from induced seismicity, including Oklahoma, Kansas, Texas, Colorado, New Mexico, and Arkansas.
In light of these concerns, some state regulatory agencies have modified their regulations or issued orders to address induced seismicity.
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Unlike the holders of common stock in a corporation, our common unitholders only have limited voting rights on matters affecting our business and, therefore, limited ability to influence management’s decisions regarding our business.
−Removed: unitholders have no right to elect the General Partner or the board of directors of the General Partner (the “Board”).
−Removed: Energy Transfer is the sole member of the General Partner and has the right to appoint the majority of the members of the Board, including all but one of its independent directors.
−Removed: Also, pursuant to that certain Board Representation Agreement entered into by us, the General Partner, Energy Transfer, and EIG Veteran Equity Aggregator, L.P.
−Removed: (along with its affiliated funds, “EIG”) in connection with our private placement of Preferred Units and warrants to EIG, EIG Management Company, LLC has the right to designate one of the members of the Board for so long as the holders of the Preferred Units hold more than 5% of the Partnership’s outstanding common units in the aggregate (taking into account the common units that would be issuable upon conversion of the Preferred Units).
+Added: Common unitholders have no right to elect the General Partner or the board of directors of the General Partner (the “Board”).
+Added: Energy Transfer is the sole member of the General Partner and has the right to appoint all of the members of the Board, including all of its independent directors.
If our common unitholders are dissatisfied with the General Partner’s performance, they have little ability to remove the General Partner.
−Removed: Common unitholders are currently unable to remove the General Partner because the General Partner and its affiliates own a sufficient number of our common units to prevent its removal.
−Removed: The vote of the holders of at least 66 2/3% of all outstanding common units is required to remove the General Partner, and Energy Transfer currently owns over 33 1/3% of our outstanding common units.
+Added: The vote of the holders of at least 66 2/3% of all outstanding common units is required to remove the General Partner, and Energy Transfer currently owns approximately 32% of our outstanding common units, making any effort to remove the General Partner difficult.
As a result of these limitations, the price of our common units may decline because of the absence or reduction of a takeover premium in the trading price.
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The General Partner and its affiliates, including Energy Transfer, have conflicts of interest with us and limited fiduciary duties, and they may favor their own interests to the detriment of us and our unitholders.
−Removed: Energy Transfer owns and controls the General Partner and appoints all of the officers and a majority of the directors of the General Partner, some of whom also are officers and directors of Energy Transfer.
+Added: Energy Transfer owns and controls the General Partner and appoints all of the officers and directors of the General Partner, some of whom also are officers and directors of Energy Transfer.
Although the General Partner has a fiduciary duty to manage us in a manner that is beneficial to us and our unitholders, the directors and officers of the General Partner also have a fiduciary duty to manage the General Partner in a manner that is beneficial to its owner.
Conflicts of interest will arise between the General Partner and its owner, on the one hand, and us and our unitholders, on the other hand.
−Removed: In resolving these conflicts of interest, the General Partner may favor its own interests and the interests of its owner over our interests and the interests of our unitholders.
+Added: In resolving these conflicts of
+Added: interest, the General Partner may favor its own interests and the interests of its owner over our interests and the interests of our unitholders.
These conflicts include the following situations, among others:
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For example, the Partnership Agreement permits the General Partner to make a number of decisions in its individual capacity, as opposed to its capacity as the General Partner, or otherwise free of fiduciary duties to us and our unitholders.
−Removed: This entitles the General Partner to consider only the interests and factors that it desires and relieves it of any duty or obligation to give any consideration to any interest of, or factors affecting, us, our affiliates, or our limited partners.
+Added: This entitles the General Partner to consider only the interests and factors that
+Added: it desires and relieves it of any duty or obligation to give any consideration to any interest of, or factors affecting, us, our affiliates, or our limited partners.
Examples of decisions that the General Partner may make in its individual capacity include:
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Therefore, increases or decreases in interest rates may affect whether or not certain investors decide to invest in master limited partnership units, including ours, and a rising interest rate environment could have an adverse impact on our common unit price and impair our ability to issue additional equity or incur debt to fund growth or for other purposes, including distributions.
−Removed: We may issue additional limited partner interests without the approval of unitholders, subject to certain Preferred Unit approval rights, which would dilute unitholders’ existing ownership interests and may increase the risk that we will not have sufficient available cash to maintain or increase our per-common-unit distribution level.
−Removed: The Partnership Agreement does not limit the number or timing of additional limited partner interests that we may issue, including limited partner interests that are convertible into or senior to our common units, without the approval of our common unitholders as long as the newly issued limited partner interests are not senior to, or pari passu with, the Preferred Units.
−Removed: With the consent of a majority of the Preferred Units, we may issue an unlimited number of limited partner interests that are senior to our common units and pari passu with the Preferred Units.
−Removed: If a substantial portion of the Preferred Units are converted into common units, common unitholders could experience significant dilution.
−Removed: Furthermore, if holders of such converted Preferred Units were to dispose of a substantial portion of these common units in the public market, whether in a single transaction or series of transactions, it could adversely affect the market price of our common units.
−Removed: In addition, these sales, or the possibility that these sales may occur, could make it more difficult for us to sell our common units in the future.
+Added: We may issue additional limited partner interests without the approval of unitholders, which would dilute unitholders’ existing ownership interests and may increase the risk that we will not have sufficient available cash to maintain or increase our per-common-unit distribution level.
+Added: The Partnership Agreement does not limit the number or timing of additional limited partner interests that we may issue, including limited partner interests that are convertible into or senior to our common units, without the approval of our common unitholders.
Our issuance of additional common units, including pursuant to our DRIP, or other equity securities of equal or senior rank, such as additional preferred units, will have the following effects:
3 unchanged sentences
• the market price of our common units may decline.
−Removed: Energy Transfer may sell, and the holders of the Preferred Units have sold and may continue to sell, our common units in the public or private markets, and such sales could have an adverse impact on the trading price of our common units.
−Removed: As of February 6, 2025, Energy Transfer beneficially owns an aggregate of 46,056,228 common units in us.
−Removed: As of February 6, 2025, the holders of our Preferred Units (the “Preferred Unitholders”) have converted a portion of their Preferred Units into 15,990,804 common units, in accordance with the formula set forth in our Partnership Agreement.
−Removed: Additionally, the warrants held by the Preferred Unitholders have been exercised and net settled in full for 2,894,796 common units.
−Removed: We have granted certain registration rights to Energy Transfer and its affiliates with respect to any common units they own, and have filed a registration statement with the SEC for the benefit of the Preferred Unitholders with respect to any common units they may receive upon conversion of the Preferred Units or exercise of the warrants.
−Removed: Energy Transfer may, and the Preferred Unitholders have and may continue to, sell our common units.
+Added: Energy Transfer and Westerman, Ltd.
+Added: may sell our common units in the public or private markets, and such sales could have an adverse impact on the trading price of our common units.
+Added: As of February 12, 2026, Energy Transfer beneficially owns an aggregate of 46,056,228 common units and Westerman, Ltd.
+Added: owns an aggregate of 18,175,323 of our common units.
+Added: We have granted certain registration rights to Energy Transfer and its affiliates with respect to any common units they own, and have an obligation to file a registration statement with the SEC for the benefit of Westerman, Ltd.
+Added: with respect to the common units they received as a result of the J-W Power Acquisition.
+Added: Energy Transfer may, and Westerman, Ltd.
+Added: may, subject to certain lock-up restrictions agreed to in the J-W Power Acquisition, sell our common units.
Any sales of these common units in the public or private markets could have an adverse impact on the price of our common units.
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Unitholders may not have limited liability if a court finds that limited partner actions constitute control of our business.
−Removed: Under Delaware law, unitholders could be held liable for our obligations to the same extent as a general partner if a court determined that the right of limited partners to remove our General Partner or to take other action under the Partnership Agreement constituted participation in the “control” of our business.
+Added: Under Delaware law, unitholders could be held liable for our obligations to the same extent as a general partner if a court determined that the right of limited partners to remove our General Partner or to take other action under the Partnership
+Added: Agreement constituted participation in the “control” of our business.
Additionally, under Delaware law, the General Partner has unlimited liability for the obligations of the Partnership, such as our debts and environmental liabilities, except for those contractual obligations of the Partnership that are expressly made without recourse to the General Partner.
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Because we are a publicly traded partnership, the NYSE does not require us to have a majority of independent directors on the Board, or to establish a compensation committee, or a nominating and corporate governance committee.
−Removed: Accordingly, unitholders do not have the same protections afforded to investors in certain corporations that are subject to all of the NYSE corporate governance requirements.
+Added: Accordingly, unitholders do not have the same protections afforded to investors in certain corporations
+Added: that are subject to all of the NYSE corporate governance requirements.
Please read Part III, Item 10 “Directors, Executive Officers, and Corporate Governance”.
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Distributions generally would be taxed again as corporate dividends (to the extent of our current and accumulated earnings and profits), and no income, gains, losses, deductions, or credits would flow through to you.
−Removed: Because taxes would be levied on us as a corporation, our cash
−Removed: available for distribution also would be substantially reduced.
+Added: Because taxes would be levied on us as a corporation, our cash available for distribution also would be substantially reduced.
Therefore, if we were treated as a corporation for federal income tax purposes, there would be a material reduction in the anticipated cash flow and after-tax return to our unitholders, likely causing a substantial reduction in the value of our common units.
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We may engage in transactions to de-lever the Partnership and manage our liquidity that may result in income and gain to our unitholders.
−Removed: For example, if we sell assets and use the proceeds to repay existing debt or fund capital expenditures, you may be allocated taxable income and gain resulting from the sale.
+Added: For example, if we sell assets and use the proceeds to repay existing debt or fund capital expenditures, you may
+Added: be allocated taxable income and gain resulting from the sale.
The ultimate effect of any such allocations will depend on the unitholder’s individual tax position with respect to its units.
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In addition, our costs of any contest with the IRS will be borne indirectly by our unitholders because the costs will reduce our cash available for distribution.
−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
−Removed: adjustments directly from us, in which case our cash available for distribution to our unitholders might be substantially reduced.
−Removed: 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.
Federal income tax returns for years 2019 and 2020 are currently under examination by the IRS.
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Generally, 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.
−Removed: Our “business interest” has been subject to limitation under these rules by $105.5 million and $95.1 million for tax years 2023 and 2022, respectively.
+Added: Our “business interest” has been subject to limitation under these rules in prior tax years, and may be subject to limitations in the future.
As a result, our unitholders may be subject to limitation on their ability to deduct interest expense incurred by us and allocated to them.
−Removed: In certain circumstances, a unitholder may be able to utilize a portion of a business interest deduction subject to this limitation in future taxable years.
+Added: In certain circumstances, a unitholder may be able to utilize a portion of a business interest deduction
+Added: subject to this limitation in future taxable years.
Unitholders should consult their tax advisors regarding the impact of this business interest deduction limitation on an investment in our units.
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A unitholder’s share of our income, gain, loss, and deduction, and any gain from the sale of our units generally will be considered effectively connected income.
−Removed: distributions to a non-U.S.
+Added: As a result, distributions to a non-U.S.
unitholder will be subject to withholding at the highest applicable effective tax rate and a non-U.S.
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Treasury regulations provide that the “amount realized” on a transfer of an interest in a publicly traded partnership generally will be the amount of gross proceeds paid to the broker effecting the applicable transfer on behalf of the transferor.
−Removed: Treasury regulations and recent Treasury guidance further provide that for a transfer of an 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.
+Added: For a transfer of an interest in a publicly traded partnership that is effected through a broker, the obligation to withhold is imposed on the transferor’s broker.
unitholders should consult their tax advisors regarding the impact of these rules on an investment in our units.
11 unchanged sentences
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 as having disposed of those common units.
−Removed: If so, such unitholder would no longer be treated for federal income tax purposes as a partner with respect to those common units during the period of the loan and may recognize gain or loss on the disposition.
+Added: If so, such unitholder would no longer
+Added: be treated for federal income tax purposes as a partner with respect to those common units during the period of the loan and may recognize gain or loss on the disposition.
Because there are no specific rules governing the federal income tax consequences of loaning a partnership interest, a unitholder whose common units are the subject of a securities loan may be considered to have disposed of the loaned common units.
5 unchanged sentences
In determining the items of income, gain, loss, and deduction allocable to our unitholders, we must routinely determine the fair market value of our assets.
−Removed: Although we may from time to time consult with professional appraisers regarding valuation
−Removed: matters, we make many fair market value estimates using a methodology based on the market value of our common units as a means to measure the fair market value of our assets.
+Added: Although we may from time to time consult with professional appraisers regarding valuation matters, we make many fair market value estimates using a methodology based on the market value of our common units as a means to measure the fair market value of our assets.
The IRS may challenge these valuation methods and the resulting allocations of income, gain, loss, and deduction.
10 unchanged sentences
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.
+Added: We may have subsidiaries that will be treated as corporations for federal income tax purposes and subject to corporate-level income taxes.
+Added: Even though we (as a partnership for federal income tax purposes) are not subject to federal income tax, following the J-W Power Acquisition, we will conduct some of our operations through subsidiaries that are organized as corporations for federal income tax purposes.
+Added: The taxable income, if any, of subsidiaries that are treated as corporations for federal income tax purposes, is subject to corporate-level federal income taxes, which may reduce the cash available for distribution to us and, in turn, to our unitholders.
+Added: If the IRS or other state or local jurisdictions were to successfully assert that these corporations have more tax liability than we anticipate or legislation was enacted that increased the corporate tax rate, the cash available for distribution could be further reduced.
General Risk Factors
13 unchanged sentences
If we were to incur substantial liability and such damages were not covered by insurance or were in excess of policy limits, or if we were to incur liability at a time when we are not able to obtain liability insurance, our business, results of operations, and financial condition could be adversely affected.
−Removed: Cybersecurity breaches and other disruptions of our information systems could compromise our information and operations and expose us to liability, which would cause our business and reputation to suffer.
+Added: Cybersecurity breaches and other disruptions of our information systems, or those of our service providers, could compromise our information and operations and expose us to liability, which would cause our business and reputation to suffer.
We rely on our information technology infrastructure to process, transmit, and store electronic information critical to our business activities.
−Removed: In recent years, there has been a rise in the number of cyberattacks on other companies’ network and
−Removed: information systems by state-sponsored and other criminal organizations, as well as data security incidents caused by human error, vulnerabilities in software and other technologies, or vendor and supply chain incidents.
+Added: In recent years, there has been a rise in the number of cyberattacks on other companies’ network and information systems by state-sponsored and other criminal organizations, as well as data security incidents caused by human error, vulnerabilities in software and other technologies, or vendor and supply chain incidents.
As a result, the risks associated with such an event continue to increase and we frequently detect, respond to and mitigate security incidents.
+Added: 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 (e.g., human resources, finance, data transmission, communications, risk, compliance, among others) that enable us to conduct, monitor and/or protect our business, operations, systems and data assets.
+Added: If these third parties fail to adequately safeguard our data or their systems, or if they experience security breaches, our operations and reputation may be adversely affected.
A significant failure, compromise, breach, or interruption of our information systems or inadequacies in our incident response processes could result in loss of confidential information, a disruption of our operations, customer dissatisfaction, damage to our reputation, a loss of customers or revenues, privacy or cybersecurity related litigation, and potential regulatory fines.
3 unchanged sentences
The long-term impact of terrorist attacks and the magnitude of the threat of future terrorist attacks on the energy industry in general, and on us in particular, are not known at this time.
−Removed: Uncertainty surrounding sustained military campaigns may affect our operations in unpredictable ways, including disruptions of crude oil and natural gas supplies and markets for crude oil, natural gas, and NGLs, and the possibility that infrastructure facilities could be direct targets of, or indirect casualties of, an act of terror.
+Added: Uncertainty surrounding sustained military campaigns may affect our operations in unpredictable ways, including disruptions of crude oil and natural gas supplies and markets for crude oil, natural gas, and NGLs, and the possibility that infrastructure facilities could be direct targets of, or indirect casualties of, an act
Changes in the insurance markets attributable to terrorist attacks may make insurance against such attacks more difficult for us to obtain, if we choose to do so.
2 unchanged sentences
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.