Energy Transfer 2015 Annual Report Download - page 50

Table of Contents
If we do not make acquisitions on economically acceptable terms, our future growth could be limited.
Our results of operations and our ability to grow and to increase distributions to Unitholders will depend in part on our ability to make acquisitions that are
accretive to our distributable cash flow per unit.
We may be unable to make accretive acquisitions for any of the following reasons, among others:
• because we are unable to identify attractive acquisition candidates or negotiate acceptable purchase contracts with them;
• because we are unable to raise financing for such acquisitions on economically acceptable terms; or
• because we are outbid by competitors, some of which are substantially larger than us and have greater financial resources and lower costs of capital then
we do.
Furthermore, even if we consummate acquisitions that we believe will be accretive, those acquisitions may in fact adversely affect our results of operations or
result in a decrease in distributable cash flow per unit. Any acquisition involves potential risks, including the risk that we may:
• fail to realize anticipated benefits, such as new customer relationships, cost-savings or cash flow enhancements;
• decrease our liquidity by using a significant portion of our available cash or borrowing capacity to finance acquisitions;
• significantly increase our interest expense or financial leverage if we incur additional debt to finance acquisitions;
• encounter difficulties operating in new geographic areas or new lines of business;
• incur or assume unanticipated liabilities, losses or costs associated with the business or assets acquired for which we are not indemnified or for which the
indemnity is inadequate;
• be unable to hire, train or retrain qualified personnel to manage and operate our growing business and assets;
• less effectively manage our historical assets, due to the diversion of management’s attention from other business concerns; or
• incur other significant charges, such as impairment of goodwill or other intangible assets, asset devaluation or restructuring charges.
If we consummate future acquisitions, our capitalization and results of operations may change significantly. As we determine the application of our funds and
other resources, Unitholders will not have an opportunity to evaluate the economic, financial and other relevant information that we will consider.
If we do not continue to construct new pipelines, our future growth could be limited.
Our results of operations and ability to grow and to increase distributable cash flow per unit will depend, in part, on our ability to construct pipelines that are
accretive to our distributable cash flow. We may be unable to construct pipelines that are accretive to distributable cash flow for any of the following reasons,
among others:
• we are unable to identify pipeline construction opportunities with favorable projected financial returns;
• we are unable to obtain necessary governmental approvals and contracts with qualified contractors and vendors on acceptable terms;
• we are unable to raise financing for our identified pipeline construction opportunities; or
• we are unable to secure sufficient transportation commitments from potential customers due to competition from other pipeline construction projects or
for other reasons.
Furthermore, even if we construct a pipeline that we believe will be accretive, the pipeline may in fact adversely affect our results of operations or results from
those projected prior to commencement of construction and other factors.
Expanding our business by constructing new pipelines and related facilities subjects us to risks.
One of the ways that we have grown our business is through the construction of additions to our existing gathering, compression, treating, processing and
transportation systems. The construction of new pipelines and related facilities (or the improvement and repair of existing facilities) involves numerous
regulatory, environmental, political and legal uncertainties beyond our control and requires the expenditure of significant amounts of capital that we will be
required to finance through borrowings, the issuance of additional equity or from operating cash flow. If we undertake these projects, they may not be
completed on schedule, at all, or at the budgeted cost. A variety of factors outside our control, such as weather, natural disasters and difficulties in obtaining
permits and rights-of-way or other regulatory approvals, as well as the performance by third party contractors, may result in increased costs or delays in
construction. Cost overruns or delays in completing a project could have a material adverse effect on our results
44