We have partial ownership interests in certain joint venture legal entities, including Discovery and
Southeast Texas, which could adversely affect our ability to operate and control these entities. In addition,
we may be unable to control the amount of cash we will receive from the operation of these entities and we
could be required to contribute significant cash to fund our share of their operations, which could
adversely affect our ability to distribute cash to our unitholders.
Our inability, or limited ability, to control the operations and management of joint venture legal entities
that we have a partial ownership interest in may mean that we will not receive the amount of cash we expect to
be distributed to us. In addition, for entities where we have a minority ownership interest, we will be unable to
control ongoing operational decisions, including the incurrence of capital expenditures that we may be required
to fund. Specifically,
• we have limited ability to influence decisions with respect to the operations of these entities and their
subsidiaries, including decisions with respect to incurrence of expenses and distributions to us;
• these entities may establish reserves for working capital, capital projects, environmental matters and
legal proceedings which would otherwise reduce cash available for distribution to us;
• these entities may incur additional indebtedness, and principal and interest made on such indebtedness
may reduce cash otherwise available for distribution to us; and
• these entities may require us to make additional capital contributions to fund working capital and capital
expenditures, our funding of which could reduce the amount of cash otherwise available for distribution.
All of these items could significantly and adversely impact our ability to distribute cash to our unitholders.
The amount of cash we have available for distribution to holders of our common units depends primarily
on our cash flow and not solely on profitability.
Profitability may be significantly affected by non-cash items. As a result, we may make cash distributions
during periods when we record losses for financial accounting purposes and may not make cash distributions
during periods when we record net earnings for financial accounting purposes.
Because of the natural decline in production from existing wells, our success depends on our ability to
obtain new sources of supplies of natural gas and NGLs.
Our gathering and transportation pipeline systems are connected to or dependent on the level of production
from natural gas wells, from which production will naturally decline over time. As a result, our cash flows
associated with these wells will also decline over time. In order to maintain or increase throughput levels on our
gathering and transportation pipeline systems and NGL pipelines and the asset utilization rates at our natural
gas processing plants, we must continually obtain new supplies. The primary factors affecting our ability to
obtain new supplies of natural gas and NGLs, and to attract new customers to our assets include the level of
successful drilling activity near these assets, the demand for natural gas and crude oil, producers’ desire and
ability to obtain necessary permits in an efficient manner, natural gas field characteristics and production
performance, surface access and infrastructure issues, and our ability to compete for volumes from successful
new wells. If we are not able to obtain new supplies of natural gas to replace the natural decline in volumes
from existing wells or because of competition, throughput on our pipelines and the utilization rates of our
treating and processing facilities would decline, which could have a material adverse effect on our business,
results of operations, financial position and cash flows, and our ability to make cash distributions.
Current economic conditions may adversely affect natural gas and NGL producers’ drilling activity and
transportation spending levels, which may in turn negatively impact our volumes and results of operations
and our ability to make distributions to our unitholders.
The level of drilling activity is dependent on economic and business factors beyond our control. Among
the factors that impact drilling decisions are commodity prices, the liquids content of the natural gas production,
drilling requirements for producers to hold leases, the cost of finding and producing natural gas and the general
condition of the credit and financial markets. Natural gas prices have declined substantially compared to
historical periods. For example, the twelve-month average New York Mercantile Exchange, or NYMEX, price
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