1092914--3/5/2010--ATLAS_PIPELINE_PARTNERS

related topics

{tax, income, asset}

{gas, price, oil}

{debt, indebtedness, cash}

{cost, regulation, environmental}

{acquisition, growth, future}

{cost, contract, operation}

{operation, international, foreign}

{loss, insurance, financial}

{interest, director, officer}

{financial, litigation, operation}

{cost, operation, labor}

{customer, product, revenue}

{operation, natural, condition}

{condition, economic, financial}

{competitive, industry, competition}

{provision, law, control}

Risks Relating to Our Business The amount of cash we generate depends, in part, on factors beyond our control. Economic conditions and instability in the financial markets could negatively impact our business. We are affected by the volatility of prices for natural gas and NGL products. Our price risk management strategies may fail to protect us and could reduce our gross margin and cash flow. Due to the accounting treatment of our derivative contracts, increases in prices for natural gas, crude oil and NGLs could result in non-cash balance sheet reductions. We are exposed to the credit risks of our key customers, and any material nonpayment or nonperformance by our key customers could negatively impact our business. Due to our lack of asset diversification, negative developments in our operations would reduce our ability to fund our operations, pay required debt service on our credit facilities and make distributions to our common unitholders. The amount of natural gas we gather will decline over time unless we are able to attract new wells to connect to our gathering systems. The amount of natural gas we gather or process may be reduced if the natural gas liquids pipelines to which we deliver NGLs cannot or will not accept the NGLs. The amount of natural gas we gather, treat or process may be reduced if the intrastate and interstate pipelines to which we deliver gas cannot or will not accept the gas. If we are unable to obtain new rights-of-way or the cost of renewing existing rights-of-way increases, then our cash flows could be reduced. The success of our interest in the Laurel Mountain joint venture depends upon Atlas Energy Resources ability to drill and complete commercially producing wells. The failure of Atlas Energy Resources to perform its obligations under the Laurel Mountain Gathering Agreements may adversely affect our business. The success of our Mid-Continent operations depends upon our ability to continually find and contract for new sources of natural gas supply from unrelated third parties. Our Mid-Continent operations currently depend on certain key producers for their supply of natural gas; the loss of any of these key producers could reduce our revenues. The curtailment of operations at, or closure of, any of our processing plants could harm our business. We may face increased competition in the future in our Mid-Continent operations. The acquisitions of the Chaney Dell and the Midkiff/Benedum systems in July 2007 and the contribution of our Appalachia assets to Laurel Mountain in May 2009 have substantially changed our business, making it difficult to evaluate our business based upon our historical financial information. The scope and costs of the risks involved in making acquisitions may prove greater than estimated at the time of the acquisition. We may be unsuccessful in integrating the operations from any future acquisitions with our operations and in realizing all of the anticipated benefits of these acquisitions. Our construction of new assets may not result in revenue increases and is subject to regulatory, environmental, political, legal and economic risks, which could impair our results of operations and financial condition. We may not be able to execute our growth strategy successfully. Limitations on our access to capital or the market for our common units will impair our ability to execute our growth strategy. Our debt levels and restrictions in our credit facility could limit our ability to fund operations, pay required debt service on our credit facility and make distributions to our unitholders. If we do not pay distributions on our common units with respect to any fiscal quarter, our unitholders are not entitled to receive distributions for such prior periods in the future. We may issue additional units, which may increase the risk of not having sufficient available cash to make distributions at prior per unit distribution levels, once distributions are reinstated. Regulation of our gathering operations could increase our operating costs, decrease our revenues, or both. Compliance with pipeline integrity regulations issued by the DOT and state agencies could result in substantial expenditures for testing, repairs and replacement. Our midstream natural gas operations may incur significant costs and liabilities resulting from a failure to comply with new or existing environmental regulations or a release of hazardous substances into the environment. Our midstream natural gas operations may incur significant costs and liabilities resulting from new environmental regulations related to climate control. Litigation or governmental regulation relating to environmental protection and operational safety may result in substantial costs and liabilities. We are subject to operating and litigation risks that may not be covered by insurance. Risks Related to Our Ownership Structure Atlas Energy and its affiliates, including Atlas Energy Resources, have conflicts of interest and limited fiduciary responsibilities, which may permit them to favor their own interests to the detriment of our unitholders. Cost reimbursements due our General Partner may be substantial and will reduce the cash available for distributions to our unitholders. Our control of the Chaney Dell and Midkiff/Benedum systems is limited by provisions of the limited liability company operating agreements with Anadarko and, with respect to the Midkiff/Benedum system, the operation and expansion agreement with Pioneer. We are not the operator of the gathering system owned by Laurel Mountain and do not control Laurel Mountain other than through provisions of the limited liability company agreement with Williams Laurel Mountain, LLC, or Williams. Tax Risks of Unit Ownership If we were treated as a corporation for federal income tax purposes, or if we were to become subject to entity-level taxation for federal or state income tax purposes, then our cash available for distribution to our unitholders would be substantially reduced. Unitholders may be required to pay taxes on income from us even if they do not receive any cash distributions from us. Tax gain or loss on disposition of our common units could be more or less than expected. Tax-exempt entities and foreign persons face unique tax issues from owning common units that may result in adverse tax consequences to them. We treat each purchaser of our common units as having the same tax benefits without regard to the common units purchased. The IRS may challenge this treatment, which could adversely affect the value of the common units. The sale or exchange of 50% or more of our capital and profits interest within a 12-month period will result in the termination of our partnership for federal income tax purposes. Unitholders may be subject to state and local taxes and return filing requirements as a result of investing in our common units. The IRS may challenge our tax treatment related to transfers of units, which could change the allocation of items of income, gain, loss and deduction among our unitholders. If the IRS contests the federal income tax positions we take, the market for our common units may be adversely affected, and the costs of any such contest will reduce cash available for distributions to our unitholders. We have adopted certain valuation methodologies that may result in a shift of income, gain, loss and deduction between us and our public unitholders. The IRS may challenge this treatment, which could adversely affect the value of our common units. A unitholder whose units are loaned to a short seller to cover a short sale of units may be considered as having disposed of those units. If so, the unitholder would no longer be treated for tax purposes as a partner with respect to those units during the period of the loan and may recognize gain or loss from the disposition.

Full 10-K form ▸

1092914--3/5/2010--ATLAS_PIPELINE_PARTNERS_LP