agreement, to our unitholders on a quarterly basis. We rely upon external financing sources, including the
issuance of debt and equity securities and bank borrowings, to fund acquisitions or expansion capital
expenditures. Any limitations on our access to external capital, including limitations caused by illiquidity or
volatility in the capital markets, may impair our ability to complete future acquisitions and construction projects
on favorable terms, if at all. As a result, we may be at a competitive disadvantage as compared to businesses
that reinvest all of their available cash to expand ongoing operations, particularly under adverse economic
conditions.
A downgrade of our credit rating could impact our liquidity, access to capital and our costs of doing
business, and independent third parties determine our credit ratings outside of our control.
A downgrade of our credit rating might increase our cost of borrowing and could require us to post
collateral with third parties, negatively impacting our available liquidity. Our ability to access capital markets
could also be limited by a downgrade of our credit. Credit rating agencies perform independent analysis when
assigning credit ratings. The analysis includes a number of criteria including, but not limited to, business
composition, market and operational risks, as well as various financial tests. Credit rating agencies continue to
review the criteria for industry sectors and various debt ratings and may make changes to those criteria from
time to time. Credit ratings are not recommendations to buy, sell or hold investments in the rated entity. Ratings
are subject to revision or withdrawal at any time by the ratings agencies and no assurance can be given that we
will maintain our current credit ratings.
Our debt levels may limit our flexibility in obtaining additional financing and in pursuing other business
opportunities.
We continue to have the ability to incur additional debt, subject to limitations within our credit facility.
Our level of debt could have important consequences to us, including the following:
• our ability to obtain additional financing, if necessary, for working capital, capital expenditures,
acquisitions or other purposes may be impaired or such financing may not be available on favorable
terms;
• an increased amount of cash flow will be required to make interest payments on our debt;
• our debt level will make us more vulnerable to competitive pressures or a downturn in our business or
the economy generally; and
• our debt level may limit our flexibility in responding to changing business and economic conditions.
Our ability to obtain new debt funding or service our existing debt will depend upon, among other things,
our future financial and operating performance, which will be affected by prevailing economic conditions and
financial, business, regulatory and other factors. In addition, our ability to service debt under our revolving
credit facility will depend on market interest rates. If our operating results are not sufficient to service our
current or future indebtedness, we may take actions such as reducing distributions, reducing or delaying our
business activities, acquisitions, investments or capital expenditures, selling assets, restructuring or refinancing
our debt, or seeking additional equity capital. We may not be able to effect any of these actions on satisfactory
terms, or at all.
Restrictions in our loan agreement may limit our ability to make distributions to unitholders and may limit
our ability to capitalize on acquisitions and other business opportunities.
Our loan agreement contains covenants limiting our ability to make distributions, incur indebtedness, grant
liens, make acquisitions, investments or dispositions and engage in transactions with affiliates. Furthermore,
our loan agreement contains covenants requiring us to maintain a certain leverage ratio and certain other tests.
Any subsequent replacement of our loan agreement or any new indebtedness could have similar or greater
restrictions. If our covenants are not met, whether as a result of reduced production levels of natural gas and
NGLs as described above or otherwise, our financial condition, results of operations and ability to make
distributions to our unitholders could be materially adversely affected.
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