Genesis Energy (GEL) risk factors, FY2025 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 acquisitions74% rewritten
2. 02including an inability to raise adequate capital on acceptable terms, competition from competitors and/or an inability to successfully integrate one or more acquired businesses into our operationsNew
3. 03We 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 distributions22% rewritten
4. 04Our 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
5. 05We face intense competition to obtain crude oil, natural gas and refined products volumes
6. 06Many 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
7. 07Fluctuations in prices for crude oil, natural gas, refined petroleum products, NaHS and caustic soda could adversely affect our business28% rewritten
8. 08Our use of derivative financial instruments could result in financial losses
9. 09Non-utilization of certain assets could significantly reduce our profitability due to the fixed costs incurred with respect to such assets
10. 10We 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
11. 11We may not be able to renew our marine transportation term 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 expenses22% rewritten
12. 12A 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
13. 13We face periodic dry-docking costs for our vessels, which can be substantial
14. 14The U.S. inland waterway infrastructure is aging and may result in increased costs and disruptions to our marine transportation segment67% rewritten
15. 15Failure 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. 16Our 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. 17We may not be able to access adequate capital (debt and/or equity) on economically viable terms or any terms
3. 18Our actual construction, development and acquisition costs could exceed our forecast, and our cash flow from construction and development projects may not be immediate
4. 19The IRA could accelerate the transition to a low carbon economy away from oil and natural gas
5. 20Fluctuations in interest rates could adversely affect our business
6. 21Inflationary 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 rise30% rewritten
7. 22Non-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. 23Our operations are subject to federal and state rate regulation and federal, state and local environmental protection and safety laws and regulations
2. 24Climate change legislation and regulatory initiatives may decrease demand for the products we store, transport and sell and increase our operating costs
3. 25Regulation 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. 26In addition, some of our pipelines and other infrastructure are subject to laws providing for open and/or non-discriminatory access
5. 27Our business would be adversely affected if we failed to comply with the Jones Act foreign ownership provisions
6. 28Our 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. 29Compliance 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 opportunities76% rewritten
8. 30We are subject to regulatory and economic risks associated with doing business outside of the United States

Risks Related to Our Partnership Structure

1. 31Individual 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. 32Our Class B Common Units may be transferred to a third party without unitholder consent, which could affect our strategic direction
3. 33Our general partner has a limited call right that may require common unitholders to sell their units at an undesirable time or price
4. 34The 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. 35We do not have the same flexibility as other types of organizations to accumulate cash and equity to protect against illiquidity in the future
6. 36Unitholders may have liability to repay distributions that were wrongfully distributed to them
7. 37Unitholder liability may not be limited if a court finds that unitholder action constitutes control of our business
8. 38Tax Risks to Our Unitholders75% rewritten
9. 39will be taxable as a corporation under Section 7704 of the Internal Revenue Code for federal income tax purposes for that taxable year and all subsequent years. We have not requested a ruling from the IRS with respect to our treatment as a partnership for federal income tax purposesNew
10. 40The 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
11. 41A 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
12. 42Our 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
13. 43Tax gain or loss on the disposition of our units could be more or less than expected
14. 44Unitholders may be subject to limitations on their ability to deduct interest expense by us
15. 45Tax-exempt entities and non-U.S. persons face unique tax issues from owning our units that may result in adverse tax consequences to them
16. 46We 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
17. 47Our 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
18. 48We have subsidiaries that are treated as corporations for federal income tax purposes and subject to corporate-level income taxes
19. 49The 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
20. 50The 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. 51We are exposed to the credit risk of our customers in the ordinary course of our business activities
2. 52A 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. 53Any 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. 54We cannot predict the impact of the ongoing international military conflicts and any related humanitarian crisis or any other geopolitical tensions on the global economy, energy markets, geopolitical stability and our business33% rewritten
5. 55Our business could be negatively impacted by security threats, including cybersecurity threats, and related disruptions41% rewritten
6. 56Artificial intelligence presents risks and challenges that can impact our business, including by posing security risks to our confidential information, proprietary information and personal dataNew
7. 57Our significant unitholders may sell units or other limited partner interests in the trading market, which could reduce the market price of our common units
8. 58We may issue additional common units without common unitholders’ approval, which would dilute their ownership interests
9. 59If 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