Genesis Energy (GEL) risk factors, FY2024 10-K

Risks Related to the Operations of Our Business

1. 01We may not be able to fully execute our growth strategy due to various factors, such as unreceptive capital markets and/or excessive competition for acquisitions
2. 02We may not have sufficient cash from operations after the establishment of cash reserves and payment of fees and expenses to pay the current level of quarterly distributions
3. 03Our profitability and cash flow are dependent on our ability to increase or, at a minimum, maintain our current commodity (crude oil, natural gas, refined products, NaHS and caustic soda) volumes, which often depend on actions and commitments by parties beyond our control
4. 04We face intense competition to obtain crude oil, natural gas and refined products volumes
5. 05Many of our crude oil and natural gas transportation customers are producers whose drilling activity levels and spending for transportation have historically been, and may continue to be, impacted by volatility in the commodity markets
6. 06Fluctuations in prices for crude oil, natural gas, refined petroleum products, NaHS and caustic soda could adversely affect our business
7. 07Our use of derivative financial instruments could result in financial losses
8. 08Non-utilization of certain assets could significantly reduce our profitability due to the fixed costs incurred with respect to such assets
9. 09We cannot cause our joint ventures and certain of our unrestricted subsidiaries to take or not to take certain actions unless some or all of the joint venture or third party participants agree
10. 10We may not be able to renew our marine transportation time charters and contracts when they expire at favorable rates, for extended periods, or at all, which may increase our exposure to the spot market and lead to lower revenues and increased expenses
11. 11A decrease in the cost of importing refined petroleum products could cause demand for U.S. flag product carrier and barge capacity and charter rates to decline, which would decrease our revenues and cash flows from operations
12. 12We face periodic dry-docking costs for our vessels, which can be substantial
13. 13The U.S. inland waterway infrastructure is aging and may result in increased costs and disruptions to our marine transportation segment
14. 14Failure to obtain or renew surety bonds on acceptable terms could affect our ability to satisfy long-term obligations

Risks Related to Liquidity and Financing

1. 15Our indebtedness could adversely restrict our ability to operate, affect our financial condition, prevent us from complying with requirements under our debt instruments and prevent us from paying cash distributions to our unitholders
2. 16We may not be able to access adequate capital (debt and/or equity) on economically viable terms or any terms
3. 17Our actual construction, development and acquisition costs could exceed our forecast, and our cash flow from construction and development projects may not be immediate
4. 18The IRA could accelerate the transition to a low carbon economy away from oil and gas
5. 19Fluctuations in interest rates could adversely affect our business
6. 20Inflationary pressures and associated changes in monetary policy have historically increased and may further increase our operating costs, which in turn have caused and may continue to cause our capital expenditures and operating costs to rise
7. 21Non-traditional investment criteria used by many investors may diminish investor interest in us and reduce the value of our common units and our access to capital

Risks Related to Legal and Regulatory Compliance

1. 22Our operations are subject to federal, state and local environmental protection and safety laws and regulations
2. 23Climate change legislation and regulatory initiatives may decrease demand for the products we store, transport and sell and increase our operating costs
3. 24Regulation of the rates, terms and conditions of services and a changing regulatory environment could affect our financial position, results of operations or cash flow
4. 25In addition, some of our pipelines and other infrastructure are subject to laws providing for open and/or non-discriminatory access
5. 26Our business would be adversely affected if we failed to comply with the Jones Act foreign ownership provisions
6. 27Our business would be adversely affected if the Jones Act provisions on coastwise trade or international trade agreements were modified or repealed or as a result of modifications to existing legislation or regulations governing the crude oil and natural gas industry
7. 28Compliance with and changes in cybersecurity requirements have a cost impact on our business, and failure to comply with such laws and regulations could have an impact on our assets, costs, revenue generation and growth opportunities
8. 29We are subject to regulatory and economic risks associated with doing business outside of the United States

Risks Related to Our Partnership Structure

1. 30Individual members of the Davison family can exert significant influence over us and may have conflicts of interest with us and may be permitted to favor their interests to the detriment of our other unitholders
2. 31Our Class B Common Units may be transferred to a third party without unitholder consent, which could affect our strategic direction
3. 32Our general partner has a limited call right that may require common unitholders to sell their units at an undesirable time or price
4. 33The interruption of distributions to us from our subsidiaries and joint ventures could affect our ability to make payments on indebtedness or cash distributions to our unitholders
5. 34We do not have the same flexibility as other types of organizations to accumulate cash and equity to protect against illiquidity in the future
6. 35Unitholders may have liability to repay distributions that were wrongfully distributed to them
7. 36Unitholder liability may not be limited if a court finds that unitholder action constitutes control of our business
8. 37Tax Risks to Our Unitholders
9. 38The tax treatment of publicly traded partnerships or an investment in our units could be subject to potential legislative, judicial or administrative changes and differing interpretations, possibly on a retroactive basis
10. 39A successful IRS contest of the federal income tax positions we take may adversely affect the market for our units, and the costs of any IRS contest would reduce our cash available for distribution to our unitholders and our general partner
11. 40Our unitholders will be required to pay taxes on income (as well as deemed distributions, if any) from us even if they do not receive any cash distributions from us
12. 41Tax gain or loss on the disposition of our units could be more or less than expected
13. 42Unitholders may be subject to limitations on their ability to deduct interest expense by us
14. 43Tax-exempt entities and non-U.S. persons face unique tax issues from owning our units that may result in adverse tax consequences to them
15. 44We will treat each purchaser of our common units as having the same tax benefits without regard to the common units actually purchased. The IRS may challenge this treatment, which could adversely affect the value of our common units
16. 45Our unitholders will likely be subject to state and local taxes in states where they do not live as a result of an investment in our units
17. 46We have subsidiaries that are treated as corporations for federal income tax purposes and subject to corporate-level income taxes
18. 47The IRS could challenge our treatment of the holders of Class A Convertible Preferred Units as partners for tax purposes, and if such challenge were sustained, certain holders of Class A Convertible Preferred Units could be adversely impacted
19. 48The amount that a Class A Convertible Preferred unitholder would receive upon liquidation may be less than the liquidation value of the Class A Convertible Preferred Units

General Risks

1. 49We are exposed to the credit risk of our customers in the ordinary course of our business activities
2. 50A natural disaster, pandemic, epidemic, accident, terrorist attack or other interruption event could result in an economic slowdown, severe personal injury, property damage and/or environmental damage, which could curtail our operations or otherwise adversely affect our assets and cash flow
3. 51Any terrorist attack at our facilities, those of our customers and, in some cases, those of other pipelines, could have a material adverse effect on our business
4. 52We cannot predict the impact of the ongoing international military conflicts and any related humanitarian crisis on the global economy, energy markets, geopolitical stability and our business
5. 53Our business could be negatively impacted by security threats, including cybersecurity threats, and related disruptions
6. 54Our significant unitholders may sell units or other limited partner interests in the trading market, which could reduce the market price of our common units
7. 55We may issue additional common units without common unitholders’ approval, which would dilute their ownership interests
8. 56If we are unable to attract and retain senior management and key technical professionals with elite skills, we may not be able to execute our business strategy effectively and, our operations could be adversely affected