Plains All American Pipeline (PAA) risk factors, FY2024 10-K

Other

1. 01Risks Inherent in an Investment in Us

Risks Related to an Investment in Our Debt Securities

1. 02Tax Risks to Common Unitholders and Series B Preferred Unitholders
2. 47Our leverage may limit our ability to borrow additional funds, comply with the terms of our indebtedness or capitalize on business opportunities
3. 48The ability to transfer our debt securities may be limited by the absence of an organized trading market
4. 49We have a holding company structure in which our subsidiaries conduct our operations and own our operating assets, which may restrict our ability to receive funds from such subsidiaries and make payments on our debt securities
5. 50We do not have the same flexibility as other types of organizations to accumulate cash, which may limit cash available to service our debt securities or to repay them at maturity
6. 51The tax treatment of publicly traded partnerships or an investment in our units could be subject to potential legislative, judicial or administrative changes or differing interpretations, possibly applied on a retroactive basis
7. 52Tax Risks to Common Unitholders
8. 53If the IRS or CRA contests the federal income tax positions or inter-country allocations we take, the market for our common units may be adversely impacted and the cost of any IRS or CRA contest or incremental taxes paid will reduce our cash available for distribution or debt service
9. 54Our unitholders may be required to pay taxes on their share of our income even if they do not receive any cash distributions from us
10. 55Taxable gain or loss on the disposition of our common units could be more or less than expected
11. 56Unitholders may be subject to limitation on their ability to deduct interest expense incurred by us
12. 57Tax-exempt entities face unique tax issues from owning our common units that may result in adverse tax consequences to them
13. 58We 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
14. 59Our unitholders will likely be subject to state, local and non-U.S. taxes and return filing requirements in states and jurisdictions where they do not live as a result of investing in our units
15. 60We have adopted certain valuation methodologies in determining a unitholder’s allocations of income, gain, loss and deduction. The IRS may challenge these methodologies or the resulting allocations, which could adversely affect the value of our common units
16. 61Taxable income from our non-U.S. businesses is not eligible for the 20% deduction for qualified publicly traded partnership income
17. 62Tax Risks to Series B Preferred Unitholders

Risks Related to Our Business

1. 03Our profitability depends on the volume of crude oil, natural gas and NGL shipped, processed, purchased, stored, fractionated and/or gathered at or through the use of our pipelines and facilities, which can be negatively impacted by a variety of factors outside of our control
2. 04Our profitability can be negatively affected by a variety of factors stemming from competition in our industry, including recontracting and other risks associated with the general capacity overbuild of midstream energy infrastructure in some of the areas where we operate
3. 05Index to Financial Statements
4. 06Changes in supply and demand for the products we handle, which can be caused by a variety of factors outside of our control, can negatively affect our operating results
5. 07Our and our customers’ operations are subject to various risks arising out of the threat of climate change
6. 08We may face opposition from various groups to the development or operation of our pipelines and facilities and our business may be subject to societal and political pressures
7. 09We are subject to scrutiny by financial stakeholders with respect to the perceived social and environmental cost of our industry and our governance structure, which may adversely impact our ability to raise capital from such investors
8. 10Our crude oil and NGL merchant activities are influenced by the overall forward market for crude oil and NGL, and certain market structures, the absence of pricing volatility and other market factors may adversely impact our results
9. 11Joint ventures, joint ownership arrangements and other capital projects pose unique challenges and we may not be able to fully implement or realize synergies, expected returns or other anticipated benefits associated with such projects
10. 12Acquisitions and divestitures involve risks that may adversely affect our business
11. 13Any of these factors could adversely affect our ability to achieve anticipated levels of cash flows or other benefits from our acquisitions, pay distributions to our partners or meet our debt service requirements
12. 14We are exposed to the credit risk of our customers and other counterparties we transact with in the ordinary course of our business activities
13. 15Tightened capital markets or other factors that increase our cost of capital or otherwise limit our access to capital could impair our ability to achieve our strategic objectives
14. 16Our risk policies cannot eliminate all risks and the insufficiency of, or non-compliance with our risk policies could result in significant financial losses
15. 17Our insurance coverage may not fully cover our losses and we may in the future encounter increased costs related to, and lack of availability of, insurance
16. 18Trade tariffs, duties, quotas, inflation, supply disruptions or other factors affecting the commodities and materials we use in our business could have a material and adverse impact on our results of operations, financial condition and cash flows
17. 19Our business also depends on having access to significant amounts of electricity and other commodities. If we are unable to obtain commodities sufficient to operate and maintain our assets, or only able to do so at commercially unreasonable prices, it could materially and adversely affect our business
18. 20Our business, results of operations, financial condition, cash flows and unit price can be adversely affected by pandemics, epidemics or other public health events
19. 21Loss of our investment grade credit rating or the ability to receive open credit could negatively affect our borrowing costs, ability to purchase crude oil, NGL and natural gas supplies or to capitalize on market opportunities
20. 22The terms of our indebtedness may limit our ability to borrow additional funds or capitalize on business opportunities. In addition, our current or future debt levels, or inability to borrow additional funds or capitalize on business opportunities, may limit our future financial and operating flexibility
21. 23Increases in interest rates could adversely affect our business and the trading price of our units
22. 24Changes in currency exchange rates could adversely affect our operating results
23. 25Our business requires the retention and recruitment of a skilled workforce, and difficulties retaining and recruiting our workforce could result in a failure to implement our business plans
24. 26An impairment of long-term assets could reduce our earnings
25. 27We are dependent on the use or availability of third-party assets for certain of our operations
26. 28Significant under-utilization of certain assets could significantly reduce our profitability due to fixed costs incurred to obtain the right to use such assets
27. 29Many of our assets have been in service for many years and require significant expenditures to maintain them or remove them from service. As a result, our maintenance, repair or asset retirement costs may increase in the future
28. 30We do not own all of the land on which our pipelines and facilities are located, which could result in disruptions to our operations
29. 31The pace of development of natural gas infrastructure could have an adverse impact on expected crude oil production growth in the Permian Basin

Risks Related to Laws and Regulations

1. 32Index to Financial Statements
2. 33Some of our operations cross the U.S./Canada border and are subject to cross-border regulation
3. 34Our purchases and sales of crude oil, natural gas and NGL, and hedging activities, expose us to potential regulatory risks
4. 35The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) established federal oversight and regulation of derivative markets and entities, such as us, that participate in those markets. The CFTC has promulgated implementing regulations with respect to the Dodd-Frank Act
5. 36Legislation, executive orders and regulatory initiatives relating to climate change could have a material adverse effect on our business, demand for our services, financial condition, results of operations and cash flows
6. 37Legislation, executive orders and regulatory initiatives relating to hydraulic fracturing or other hydrocarbon development activities could reduce domestic production of crude oil and natural gas
7. 38Cost reimbursements due to our general partner may be substantial and will reduce our cash available for distribution to unitholders
8. 39Cash distributions are not guaranteed and may fluctuate with our performance and the establishment of financial reserves
9. 40Our preferred units have rights, preferences and privileges that are not the same as, and are preferential to, the rights of holders of our common units
10. 41Unitholders may not be able to remove our general partner even if they wish to do so
11. 42We may issue additional common units without unitholder approval, which would dilute a unitholder’s existing ownership interests
12. 43Our general partner has a limited call right that may require unitholders to sell their units at an undesirable time or price
13. 44Under Delaware law, a unitholder could be held liable for our obligations to the same extent as a general partner if a court determined that the right of unitholders to remove our general partner or to take other action under our partnership agreement constituted participation in the “control” of our business
14. 45Conflicts of interest could arise among our general partner and us or the unitholders
15. 46The control of our general partner may be transferred to a third party without unitholder consent. A change of control may result in defaults under certain of our debt instruments and the triggering of payment obligations under compensation arrangements