AGCO (AGCO)

Risks

• We may be unable to renew or replace expiring contracts at favorable rates or on a long-term basis.
• If third-party pipelines and other facilities interconnected to our assets become unavailable to transport natural gas, our business, financial condition and results of operations could be materially adversely affected.
• Our operations are subject to operational hazards, unforeseen interruptions and damage caused by third parties and natural events. If a significant accident or event occurs that results in a business interruption or damage to our pipelines, storage and gathering systems, the facilities of our customers or other interconnected pipelines and facilities, our business, financial condition and results of operations could be materially adversely affected.
• Expansion projects or acquisitions that are expected to be accretive may nevertheless reduce our cash from operations and could materially adversely affect our business, financial condition and results of operations.
• We have entered into joint ventures, and may in the future enter into additional or modify existing joint ventures, which might restrict our operational and corporate flexibility. In addition, these joint ventures are subject to most of the same operational risks to which we are subject.
• We do not own the majority of the land on which assets are located, which could disrupt our current and future operations.
• We face and will continue to face opposition to the development or operation of our assets from various groups.
• The expansion of our existing assets and construction of new assets is subject to economic, market, regulatory, environmental, political, and legal risks, which could materially adversely affect our business, financial condition and results of operations. If we are unable to complete expansion projects, our future growth may be limited.
• Failure to retain and attract key executives and other skilled professional and technical employees could materially adversely affect our business, financial condition and results of operations.
• The lack of diversification of our assets and geographic locations could materially adversely affect our business, financial condition and results of operations.
• We may not have access to additional financing sources on favorable terms, or at all, which could materially adversely affect our business, financial condition and results of operations, and independent third parties determine our credit ratings outside of our control.
• Fluctuations in energy prices could materially adversely affect our business, financial condition and results of operations.
• We are exposed to our customers’ credit risk and our credit risk management and contractual terms may be inadequate to protect against such risk.
• Our existing and future level of debt may limit our flexibility to obtain additional financing and to pursue other business opportunities.
• Increases in interest rates could increase our interest expense and may adversely affect our cash flows, our ability to service our indebtedness and our ability to pay dividends to our shareholders.
• Continuing inflation and cost increases may impact our sales margins and profitability.
• Restrictions under our existing or any future credit facilities, indentures and senior notes could adversely affect our business, financial condition, results of operations and ability to pay dividends to our shareholders.
• If our intangible assets or goodwill become impaired, we may be required to record a charge to earnings.
• The adoption of legislation and introduction of regulations relating to hydraulic fracturing and the enactment of new or increased severance taxes and impact fees on natural gas production could cause our current and potential customers to reduce the number of wells or curtail production of existing wells. If reductions are significant for those or other reasons, the reductions could materially adversely affect our business, financial condition and results of operations.
• Our operations are subject to environmental laws and regulations that may expose us to significant costs and liabilities and changes in these laws and regulations could materially adversely affect our business, financial condition and results of operations.
• Our natural gas transportation and storage operations are subject to extensive regulation by the FERC and state regulatory authorities and changes in FERC or state regulation could materially adversely affect our business, financial condition and results of operations.
• We are exposed to costs associated with lost and unaccounted-for volumes.
• A change in the jurisdictional characterization of our gathering assets may result in increased regulation by FERC, which could cause our revenues to decline and operating expenses to increase and could materially adversely affect our business, financial condition and results of operations.
• State and local legislative and regulatory initiatives relating to gas operations could adversely affect our services and customers’ production and therefore, materially adversely affect our business, financial condition and results of operations.
• Changes in tax laws or regulations may have a material adverse effect on our business, cash flow, financial condition or results of operations.
• Some of our operations cross the U.S./Canada border and are subject to cross-border regulation.
• We may incur significant costs and liabilities to maintain our pipeline integrity management program and related testing, pipeline repair, and preventative or remedial measures.
• Certain portions of our pipelines, storage and gathering infrastructure are aging, which could materially adversely affect our business, financial condition and results of operations.
• Our insurance policies do not cover all losses, costs or liabilities that we may experience, and there is no assurance that we will be able to purchase cost effective insurance in the future.
• We are subject to cyber security and data privacy laws, regulations, litigation and directives relating to our processing of personal data.
• A terrorist attack, armed conflict or cyber security event, or the threat of them, could harm our business.
• Customers’, legislators’ and regulators’ perceptions of us are affected by many factors, including environmental and safety concerns, pipeline reliability, protection of customer information, media coverage and public sentiment. Customers’, legislators’ or regulators’ negative opinion of us could materially adversely affect our business, financial condition and results of operations.
• A pandemic, epidemic or outbreak of an infectious disease, such as the COVID-19 pandemic, could materially adversely affect our business, financial condition and results of operations and we face numerous risks related to the COVID-19 pandemic.
• We could have an indemnification obligation to DTE Energy in accordance with the terms of the Tax Matters Agreement if the Distribution were determined not to qualify for non-recognition treatment for U.S. federal tax purposes, which could materially adversely affect our business, financial condition and results of operations
• We have only operated as an independent, publicly traded company since July 1, 2021, and our historical financial data is not necessarily representative of the results we would have achieved if we had been an independent, publicly traded company and may not be a reliable indicator of our future results.
• The Separation may expose us to potential liabilities arising out of state and U.S. federal fraudulent conveyance laws and legal dividend requirements.
• After the Separation, certain members of management and directors may face actual or potential conflicts of interest.