Content analysis
?Positive | ||
Negative | ||
Uncertain | ||
Constraining | ||
Legalese | ||
Litigous | ||
Readability |
H.S. junior Avg
|
New words:
alleviate, began, circuit, Commission, corrected, cybersecurity, deficiency, ECM, ExhibitsExhibit, fraud, heightening, misstated, misstatement, President, printer, settlement, South, stator, step, Treasurer, undeveloped, unencumbered, unproved, update, virtual, WV
Removed:
accrual, achievable, bill, calculating, commenced, comprising, consulting, consumed, developed, dispatch, disregarded, distributed, Exxon, fleet, function, funded, identifiable, independently, legally, main, Mobil, mobile, online, organizational, original, outsourced, partnership, pattern, post, quote, ranging, reflected, reliably, reorganized, settled, shown, standalone, taxed, vendor
Financial report summary
?Risks
- We have limited operating history as an independent company and may not be able to successfully operate our business strategy, generate sufficient revenue to make or sustain distributions to our stockholders or meet our contractual commitments.
- The historical financial information included in this report may not be indicative of the results we would have achieved as a separate stand-alone company and are not a reliable indicator of our future performance or results.
- Uncertainty relating to macroeconomic conditions may reduce the demand for our assets, limit our ability to obtain additional capital to finance new investments or refinance existing debt, or have other unforeseen negative effects.
- The industries in which we operate have experienced periods of oversupply during which asset values have declined, particularly during the most recent economic downturn, and any future oversupply could materially adversely affect our results of operations and cash flows.
- There can be no assurance that any target returns will be achieved.
- Contractual defaults may adversely affect our business, prospects, financial condition, results of operations and cash flows by decreasing revenues and increasing storage, positioning, collection, recovery and lost equipment expenses.
- If we acquire a high concentration of a particular type of asset, or concentrate our investments in a particular sector, our business, prospects, financial condition, results of operations and cash flows could be adversely affected by changes in market demand or problems specific to that asset or sector.
- We may not generate a sufficient amount of cash or generate sufficient free cash flow to fund our operations or repay our indebtedness.
- We operate in highly competitive markets.
- The values of our assets may fluctuate due to various factors.
- We may acquire operating businesses, including businesses whose operations are not fully matured and stabilized. These businesses may be subject to significant operating and development risks, including increased competition, cost overruns and delays, and difficulties in obtaining approvals or financing. These factors could materially affect our business, financial condition, liquidity and results of operations.
- Our use of joint ventures or partnerships, and our Manager’s outsourcing of certain functions, may present unforeseen obstacles or costs.
- We are subject to the risks and costs of obsolescence of our assets.
- The North American rail sector is a highly regulated industry and increased costs of compliance with, or liability for violation of, existing or future laws, regulations and other requirements could significantly increase our operational costs of doing business, thereby adversely affecting our profitability.
- Our business could be adversely affected if service on the railroads is interrupted or if more stringent regulations are adopted regarding railcar design or the transportation of crude oil by rail.
- We could be negatively impacted by environmental, social, and governance (“ESG”) and sustainability-related matters.
- We transport hazardous materials.
- We may be affected by fluctuating prices for fuel and energy.
- Because we depend on Class I railroads for a significant portion of our operations in North America, our results of operations, financial condition and liquidity may be adversely affected if our relationships with these carriers deteriorate.
- Transtar faces competition from other railroads and other transportation providers.
- Our assets are exposed to unplanned interruptions caused by events outside of our control which may disrupt our business and cause damage or losses that may not be adequately covered by insurance.
- We are actively evaluating potential acquisitions of assets and operating companies in other infrastructure sectors which could result in additional risks and uncertainties for our business and unexpected regulatory compliance costs.
- Restrictive covenants in our debt agreements and the certificate of designations for our Series A Redeemable Preferred Stock may adversely affect us.
- Terrorist attacks or other hostilities could negatively impact our operations and our profitability and may expose us to liability and reputational damage.
- Our inability to obtain sufficient capital would constrain our ability to grow our portfolio and to increase our revenues.
- The effects of various environmental regulations may negatively affect the industries in which we operate which could have a material adverse effect on our financial condition, results of operations and cash flows.
- Our Repauno site and the Long Ridge property are subject to environmental laws and regulations that may expose us to significant costs and liabilities.
- We have material customer concentration with respect to the Jefferson Terminal and Railroad businesses, with a limited number of customers accounting for a material portion of our revenues.
- A cyberattack that bypasses our information technology (“IT”) security systems or the IT security systems of our third-party providers, causing an IT security breach or cybersecurity incident, may lead to a disruption of our IT systems and the loss of business information which may hinder our ability to conduct our business effectively and may result in lost revenues and additional costs.
- We have identified a material weakness in our internal control over financial reporting. If we fail to properly remediate this material weakness or if we are otherwise unable to develop and maintain an effective system of internal control over financial reporting, material misstatements in our financial statements could occur and we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us, our business, results of operations and financial condition, and the trading price of our common stock.
- If we are deemed an “investment company” under the Investment Company Act, it could have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows.
- Adverse judgments or settlements in legal proceedings could materially harm our business, financial condition, operating results and cash flows.
- The terms of our Series A Preferred Stock have provisions that could result in the holders of the Series A Preferred Stock having the ability to elect a majority of our board of directors in the case of an Event of Noncompliance, including our failure to pay amounts due upon redemption of Series A Preferred Stock.
- The failure of the Company to pay required dividends on its Series A Preferred Stock following the second anniversary of the issuance date may have a material adverse effect on the Company’s financial condition.
- We are dependent on our Manager and other key personnel at Fortress and may not find suitable replacements if our Manager terminates the Management Agreement or if other key personnel depart.
- There are conflicts of interest in our relationship with our Manager.
- Our directors have approved a broad asset acquisition strategy for our Manager and will not approve each acquisition we make at the direction of our Manager. In addition, we may change our strategy without a stockholder vote, which may result in our acquiring assets that are different, riskier or less profitable than our current assets.
- Our Manager will not be liable to us for any acts or omissions performed in accordance with the Management Agreement, including with respect to the performance of our assets.
- Our Manager’s due diligence of potential asset acquisitions or other transactions may not identify all pertinent risks, which could materially affect our business, financial condition, liquidity and results of operations.
- We may be unable to achieve some or all of the benefits that we expect to achieve from our spin-off from FTAI.
- Our agreements with FTAI may not reflect terms that would have resulted from arm’s-length negotiations among unaffiliated third parties.
- The ownership by some of our executive officers and directors of common shares, options, or other equity awards of FTAI may create, or may create the appearance of, conflicts of interest.
- We may compete with affiliates of and entities managed by our Manager, including FTAI, which could adversely affect our and their results of operations.
- We share certain key directors and officers with FTAI, which means those officers do not devote their full time and attention to our affairs and the overlap may give rise to conflicts.
- We incurred indebtedness in the form of the 2027 Notes in connection with the spin-off from FTAI, and the degree to which we are leveraged could cause a material adverse effect on our business, financial condition, results of operations and cash flows.
- Our ability to use net operating losses to offset future taxable income may be subject to limitations.
- The market price and trading volume of our common stock may be volatile, which could result in rapid and substantial losses for our stockholders.
- An increase in market interest rates may have an adverse effect on the market price of our common stock.
- There can be no assurance that the market for our common stock will provide you with adequate liquidity.
- Failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could have a material adverse effect on our business and stock price.
- Your percentage ownership in us may be diluted in the future.
- Our common stock is subject to ownership and transfer restrictions intended to preserve our ability to use our net operating loss carryforwards and other tax attributes.
- We may incur or issue debt or issue equity, which may negatively affect the market price of our common stock.
- Provisions of Delaware law, our certificate of incorporation and our bylaws, prevent or delay an acquisition of our company, which could decrease the market price of our common stock.
- Our bylaws contain exclusive forum provisions for certain claims, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
- While we currently intend to pay regular quarterly dividends to our stockholders, we may change our dividend policy at any time.
- As a public company, we will incur additional costs and face increased demands on our management.
- If securities or industry analysts do not publish research or reports about our business, or if they downgrade their recommendations regarding our common stock, our stock price and trading volume could decline.
- Our determination of how much leverage to use to finance our acquisitions may adversely affect our return on our assets and may reduce funds available for distribution.
- Non-U.S. persons that hold or have held (actually or constructively) more than 5% of our common stock may be subject to U.S. federal income tax upon the disposition of some or all their stock.
- Changes to United States federal income tax laws could materially and adversely affect us and our stockholders.
Management Discussion
- The chief operating decision maker (“CODM”) utilizes Adjusted EBITDA as the key performance measure. Adjusted EBITDA is not a financial measure in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). This performance measure provides the CODM with the information necessary to assess operational performance, as well as make resource and allocation decisions. We believe Adjusted EBITDA is a useful metric for investors and analysts for similar purposes of assessing our operational performance.
- Adjusted EBITDA is defined as net income (loss) attributable to stockholders, adjusted (a) to exclude the impact of provision for (benefit from) income taxes, equity-based compensation expense, acquisition and transaction expenses, losses on the modification or extinguishment of debt and capital lease obligations, changes in fair value of non-hedge derivative instruments, asset impairment charges, incentive allocations, depreciation and amortization expense, interest expense, interest and other costs on pension and OPEB liabilities, dividends and accretion of redeemable preferred stock, and other non-recurring items, (b) to include the impact of our pro-rata share of Adjusted EBITDA from unconsolidated entities, and (c) to exclude the impact of equity in earnings (losses) of unconsolidated entities and the non-controlling share of Adjusted EBITDA.
- (1) Includes the following items for the three months ended March 31, 2024 and 2023: (i) depreciation and amortization expense of $20,521 and $20,135 and (ii) capitalized contract costs amortization of $576 and $—.